April 4, 2012
Markets are weak today on, gasp, indications the Fed may refrain from increasing monetary accommodation unless the economy falters or inflation slows below 2%. Fed minutes from last month’s meeting showed the Fed feels less urgency to add stimulus, although there is no plan to change the commitment to low rates through late 2014. This market is addicted to easy money and stimulus.
US auto dealers posted the best monthly rise in sales in 5 years, up 12.7% in March. Sales growth was led by more fuel efficient models as gas prices soar across the country. General Motors (GM) and Ford (F) sales missed estimate, rising 12% and 5.5% respectively. Chrysler sales continued to be strong, rising 34%, and Nissan sales rose 5%. Sales of the Toyota Prius jumped also. Nissan, Toyota and Volkswagen all announced plans to add new workers in the US.
Chinese Premier Wen Jiabao is looking to break up the nation’s bank-lending monopoly to accelerate the flow of capital into the economy. “What we can now do to ease private capital flow into the financial system, fundamentally speaking, is to break this monopoly.”
Bloomberg is reporting that fewer people in the US are paying taxes than ever before. Today 46% of people owe no federal tax, while 18% don’t pay either federal taxes or payroll (i.e. social security) taxes.
It’s been quite some time since I focused on the liability-asset gap of corporate pension funds. Milliman, a consulting firm, reported that the gap hit an all-time high in 2011 of $327 billion. “low interest rates drove the pension funding deficit to record levels, and the record deficit drove everything else” said the study.
US General Services Administration (GSA) chief Martha Johnson resigned just before a report was issued criticizing the agency for spending $825K on a conference in Las Vegas.
I received an email earlier in the week from an unnamed school board member who was laughing (not really) about the provisions in the recently passed California Senate Bill 48. The bill made several changes to the Education Code, including specific requirements dealing with course of study, classroom instruction, and instructional materials. This was my favorite-I just wish I had the publishing contract for history books:
The bill added language to Education Code Section 51204.5, which prescribes the inclusion of the contributions of various groups in the history of California and the United States. This section already included men and women and numerous ethnic groups; the expanded language now includes (additions bolded):
“...a study of the role and contributions of both men and women, Native Americans, African Americans, Mexican Americans, Asian Americans, Pacific Islanders, European Americans, lesbian, gay, bisexual, and transgender Americans, persons with disabilities, and members of other ethnic and cultural groups, to the economic, political, and social development of California and the United States of America, with particular emphasis on portraying the role of these groups in contemporary society.”
“When in doubt, distort the facts.” I can’t remember which politician said that, but it seems that in France they have adopted that stance during the ongoing debates leading up to the next presidential election. Nicolas Sarkozy and Francois Hollande have been engaging in a campaign without discussing the economy at all. As The Economist wrote “It is not unusual for politicians to avoid some ugly truths during elections; but it is unusual, in recent times in Europe, to ignore them as completely as French politicians are doing.”
Just remember you read it here first. When the Fukushima nuclear reactor imploded last year, I said that the nuclear fallout would be global in scale. A new report by the Journal Environmental Science and Technology is reporting that California (primarily central and southern) was the hardest hit with the radiation plume. Seaweed is testing over 500% higher for radioactive idoie-131 than anywhere else in the US and Canada. The study noted that monitoring sites in Anaheim (yes, home of Disneyland and the Angels) recorded a peak airborne concentration of 131I at 1.9pCi m-3, yet those were close to zero one year ago. How has the US government responded to these higher airborne readings and radioactive debris washing up on our beaches? By raising the “acceptable” levels of radiation deemed to be safe, without any scientific data to back it up.
It seems like football just ended, college basketball ended Monday night (congratulations to Kentucky, who is still waiting for Kansas to show up), pro basketball is steaming towards the playoffs, soccer just kicked off (yes, pun intended), and now it’s time for the national pastime-baseball. The MLB kicks off this weekend, and for the first time in the 40 or so years I’ve been an Angel fan, we are the favorites. I’m going to savor this moment while it lasts.
Have a great day