That Was The Week That Was- 1st Week October

Last Week’s Time Cover Said it All

MARKETS SOUR DUE TO POLITICS NOT ECONOMICS BUT NO MELTDOWN.

Tea Party Types  were created  because of people’s  annoyance with high taxes and big government. The name came about from the ‘Boston Tea Party’. The Tea Party group has been growing slowly but steadily through the Obama White House years. Those politicals who ran on a Tea Party ticket promised if elected to reduce taxes, government spending-debt and size of the national government. Then came the National Health Care Act and the Tea Party Minor Minority turned its attention, and ire, on eliminating something that had already been voted and passed as a law.  They are now the tail that wags the Republican party dog and leadership seems powerless to rein them in.T-Party members in Congress as of 2012.

They’ve been wrong before.  The Tea Party has been fighting high taxes and Taxes are lower today than they were in 1950 and subsequent years: 1950 Bottom Bracket was 17.5% on Taxable Income up to $4,000. The Top Bracket 91% on Income over $400,000. In 2011 10% on $17,000 for the lowest and 35% on over $379,150. Government, however, continues to grow, even as our population has doubled since 1950 from 150 million to over 300 million.

Bill Clinton proved that reducing the budget deficit could be accomplished but he increased the national debt by 30% at the same time. The focus of the Tea Party has always been on economic and not social issues. Which leads me to wonder why attack National Health Care? I am as confused as anyone. There are plenty of economic problems that can use these people’s time and energy  such as jobs and infrastructure.

Tuesday Morning WSJ Announced The Government Shutdown. They Called it A Defining Moment For Boehner. Boehner called the clash…’ about fairness to the American people.’ (He said that with a straight face). Rep. Chris Van Hollen (D, Md), said on the House floor, ‘Why don’t you just just quicken it up and pass Sen. Cruz the gavel?’ California Rep. Dan Rohrabacher said, ‘What we’re doing here is shooting ourselves in the head.’ Heritage Action, the campaign arm of the Heritage Foundation, posted on Twitter a message encouraging Republicans to pass a government-funding bill without conditions, saying, ‘They’ve already embarrassed themselves.’  And obviously really don’t care much about who they represent.

Other Countries Confused & Frightened.

BBC reported October 1st called it being concerned the world’s most powerful country shutting down. Wondering why the leaders would deliberately provoke a crisis in suspending public services and disrupting economic growth. The BBC wrote that many country leaders were astonished. In other parts of the world such a shutdown is impossible. In budget battles such as this a no confidence vote in other democracies would create a new election. There would be no shutdown of the government as we are seeing in the United States. Brazil is able to keep the government going through any budget impasse.  John Ibbitson in Canada’s Globe worried that Canadians can only pray their economy is not collateral damage. James Fallows writes in the Atlantic, ‘Constant shutdown, permanent emergency governance is so destructive that no other serious country engages in or could tolerate it.’

TUESDAY MARKETS SHRUGGED OFF THE TURMOIL IN WASHINGTON AND THE GLITCHES WITH THE NEW HEALTH CARE ENROLLMENT SERVICE. The WSJ reported October 2nd that unlike other standoffs where both sides had arranged backdoor closed-door talks this time there were none. Only confirms the complete lack of leadership on both sides.

The longer this goes on the more it’ll take to dig ourselves out of the hole. The Federal Reserve may well have seen this situation and why they’ve ixnayed tapering bond purchases. The following history charts published in MarketWatch, WSJ and produced by FactSet & Markit.

 

 While Not Believing The U.S. Will Default the Cost of Insuring Against Default Has Skyrocketed.

The Daily Beast reported Friday, October 4th, Big Money Republican Contributors are Fed Up with the Tea Party antics. The campaign $$ spigot may well be turned off in 2014.

Talmer Financial Reported October 4th: The Week That Almost Was (Bad), Wasn’t. It could of been worse been we’re only into the first half before any reconciliation.

.New Deals? Some Exciting? Hilton, the world’s largest hotel chain has filed for an IPO. Twitter will soon become a public company. Chrysler ‘may’ file for an IPO if they can get the union and owners together.

Twitter Filed It’s IPO October 3rd. It’ll be $1 billion about 1/16th the size of Facebook.

  Opps! Vlad Savov, 10-5-2013, reported online in the Verge, Twitter IPO filing prompts mistaken rush of worthless TWTRQ stock.  Tweeter Home Entertainment Group, a bankrupt company with zero assets, attracted millions of dollars in the mistaken belief that it was the share symbol for Twitter. ARGH! When Twitter does trade it’ll be under the symbol TWTR.

 

Eric Rosengren, president of the Federal Reserve Bank Boston. The Fed’s easing, or tapering, Rosengren said on Wednesday, October 2nd, could last for several years. According to experts Rosengren’s timetable seems to be much longer than the anticipated 2014-2014 date being discussed by other officials. This should keep rates pretty much in a forced narrow range longer than many investors are comfortable with.

Expect Low Rates, sez Bill Gross, till 2035. In his Monthly Investment Outlook for October Gross cautioned investors that rates would remain inordinately low for decades and not years. ‘You can’t keep adding $1 billion to the balance sheet every year (meaning the Federal Reserve) without something negative happening.

 

EMPIRE STATE BUILDING IPO IS THE EMPIRE STATE REALTY TRUST.  Besides the Empire State Building the Trust owns other buildings in Manhattan and Connecticut.

ON WEDNESDAY’S CNBC SQUAWK BOX, ERSKINE BOWLES WARNED, ‘DEBT DEFAULT WOULD BE CATASTROPHIC.’ Bowles went on to say, ‘We’ve done the stupid stuff. You don’t get much stupider than the sequester….the tough stuff still remains untouched such as reforming entitlements, making Social Security solvent and overhauling the tax code.’

U.S. to overtake Russia as world’s top oil and gas producer. This from the WSJ reported in CNBC.com. In 2012 the U.S. got more natural gas than Russia and it’s catching up in pumping crude. Still Russia sits on untapped reserves and could be having an energy boom for years and years.

 

Liz Klimas in The Blaze, 10-04-2013, ‘Ever Wonder What’s Really in Those Chicken Nuggests?’

According to a study chicken nuggets have less than 50% chicken meat. Published in the American Journal of Medicine the contents of two national food chain nuggets were examined and published. The recipe included: Fat, bone, connective tissue, blood vessels, nerves and internal organs. No research currently being done on dipping sauces.

 

Sad. Tom Clancy, age 66 died Wednesday in a Baltimore hospital. Red October was his techno-thriller and changed the way Cold War spy books were written. Some of my friends hated poring through the minutia on and about technology and spy-craft that was the signature of Clancy’s novels. Then there were those of us that just loved the stuff.  His 17th book will be released this December. Yes, and back is Jack Ryan!

 

Questions, call or write Paul @ 586 295 0430 or pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

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