February 28, 2011
This week we are expecting a slew of economic data to be released. This morning Personal Income for January came in ahead of expectations on a 0.3% increase in wages and extended tax cuts. Personal spending rose by 0.2%, less than the 0.4% consensus as higher food and energy prices forced Americans to cut back on other goods and services. Adjusted for inflation, consumer spending fell by 0.1%, the first decline in over a year. The Chicago PMI came in at 71.2 vs. expectations of 67.5.
The dollar is under pressure this morning as global markets are betting that the ECB begins to combat inflation sooner than the Fed. Consumer price inflation in Germany hit its highest annual rate in more than two years on higher energy costs.
Voters in Ireland unseated the Fianna Fail party, replacing them with the Fine Gael party. "We now stand at a transformative moment in Ireland's history," Fine Gael leader Enda Kenny said. "We stand on the brink of fundamental change in how we regard ourselves, how we regard our economy and how we regard our society."
Approximately 70K people rallied to protest an effort in Wisconsin to restrict state workers’ right to collective bargaining. It is interesting to note that Federal workers have never had the right to collective bargaining.
After months of hot air being spewed about a government shutdown, it appears that Republicans and Democrats are close to an agreement that will extend the government’s spending authority for two weeks.
The FSB has been focused on reducing the reliance by financial markets on credit ratings. Some countries have even begun removing references to ratings in their regulations.
Stocks on the Egyptian exchange in Cairo are set to resume trading tomorrow for the first time since January 27th.
Iceland has begun conducting a feasibility study into building an 1170 Km (727 mile) power cable to Scotland to transport up to 18 terawatt-hours of geothermal and hydro power. The cable would be the longest ever built. The country presently generates the bulk of its electricity from hydropower (glaciers) and geothermal (volcanoes) sources, and is hoping to export this low cost source of power. Alcoa and other metal manufacturers have already set up plants in Iceland to take advantage of the cheap power, and Alcoa announced that it plans to build another geothermal-powered smelter.
Support has been building to allow states to file for bankruptcy as a way to escape their unfunded pension obligations. If the Federal government picks up the obligations, will the states actually learn to live within their means?
Asian markets were mixed last night as concerns about rapidly rising food and energy prices pressured some markets. Singapore, Thailand, Australia, and South Korean markets were all down while Japan, Hong Kong, and Chinese markets rose. European markets are strong this morning.
The King’s Speech won top honors at the Academy Awards last night. The film grossed $237 million worldwide after a $15 million total production cost. For 2010 industry revenues in the US and Canada fell slightly on a 6% attendance drop but higher ticket prices for 3-D films. So far this year sales are down 21% from 2010 and attendance is down 22%.
Frank Buckles, who was the last known surviving American Veteran from World War I died yesterday at 110.
Have a great Monday