Tuesday, November 02, 2010

Tomorrow should be interesting

As I write this the polls have just closed in much of the US, but it will be late into the night before we have a clear indication of the direction of Congress. I'm going to say 53 seats in the House go Republican and the Republicans will pick up 8 seats in the Senate but given my fantasy football record this year, I think you should expect any of my predictions to be wildly off the mark.

The markets are expecting some big news out of the Fed tomorrow that could significantly impact the US dollar (and ultimate all assets including stocks). I'm still thinking that the Fed might surprise us on the low side and that might cause some wild movements in the currency markets tomorrow.

Second, I need to offer up a little Mea Culpa - well, it wasn't really my mistake, but I passed along bad data without sufficiently parsing the data and for that I'm sorry. About 2 weeks ago, I mentioned that income for the very HIGHEST earners has risen substantially as reported by the Social Security Administration to an average of $519 million up substantially from the $91 million in 2008. This was clearly a shocking stat and really should have warranted further investigation. However, given the spike in hedge fund payouts, I found the data to be believable. Apparently someone pulled a joke (or there may have been some malicious intent) on the Social Security Administration because 2 people apparently filed multiple W-2's that resulted in them reporting $32 billion in income in 2009. Since, this is 8 times higher than the highest paid individual in 2009 it clearly should have raised red flags, but it didn't and the Social Security Admin put out the data that was skewed by the "fake $32 billion W-2's".

Two people out of 74 filed W-2's reporting $32 billion in income and it didn't catch someone's attention? I'm sure that you can trust with complete confidence any other piece of data coming from the government (sarcasm off).

Finally, a comment on candy inflation post Halloween. Remember, there is no inflation so there will be no cost of living adjustments for retirees on Social Security this year. However, when I picked up one of the "snack size" candy bars that my daughter received while trick or treating I was surprised by how light it felt. Was it my imagination or did the chocolate shrink while the packaging remained the same?

An old Kit Kat Snack size was effectively a 1/2 of a Kit Kat bar or 2 wafers. Since a Kit Kat weighs 1.61 ounces this put the snack size at 0.805 ounces. However, imagine my surprise when I read the back of a "new" kit kat bag that says the individual size is now 14 grams or 0.494 ounces. That's roughly a 39% reduction in the size of the snack size candy bar.

The good news: it now takes 6 snack size Kit Kat wafers to equal a "serving size".

The bad news: while I can't confirm it with a package of snack size Kit Kats from the past, I'd suspect that the candy makers have reduced the size of the bars, held the number of bars in a bag constant and kept the price the same. Effectively rasing the price of the Kit Kat's without "actually raising the price".

Cheers!

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