Sunday, November 27, 2011

Did I miss anything last week?

Well, it was just the worst Thanksgiving week for markets in 80 years but all is forgiven now because...stop me if you've heard this one before "Hopes that European Leaders will do more to stop the debt crisis."

There's no real new plan, it's just hopes that Europe will get it's act together.  I'm in the camp that says Europe has crossed their event horizon and it's just a matter of time until we see some more real fireworks.

There were plenty of stories on the madness that was Black Friday.  The ESTIMATES indicate that this was the biggest Black Friday since 2008 to which I'll say 2 things:

1) These estimates are based on foot traffic not transactions (in the next few day's you'll hear better estimates from Visa or Mastercard which should be more accurate).

2) The last time Black Friday peaked was in 2008 at the HEIGHT of the economic crisis so US consumers tend to be pretty terrible indicators of the health of the economy. 

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Just in case you were starting to develop a soft spot in your heart for the big banks consider this story from Bloomberg that highlights how little the US public and Congress knew about the bailouts in 2008.  I'm sure the next time around they'll tell us the whole truth....

"The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he“wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed“one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day."

A smart politician (is that an oxymoron?) could utilize news like this to work toward unifying the tea party and occupy movements.

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FACT OF THE DAY:  Apple's new $1 Billion data facility in Maiden, NC will have just 50 full-time employees.  To get those 50 jobs local authorities cut Apple's property tax bill by 50% and personal income tax bill by 85%.

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