Markets continued to drop as people fear the fiscal cliff, unrest in the middle east, and the growing recession / depression in Europe. Friday there was a small blip up, which I expect to continue for a few days on light volume. Next week the markets are closed for Thanksgiving and open a half day on Friday.
Israel is attacking Gaza with lotsa bombs. Hamas is shooting back with lotsa rockets - about 800 in the last week. Who started it? Isaac? Jacob? Joshua? Palestinians? Israelis? I've followed the timeline and it's not clear. Why now? Annoyingly, I seem to have been removed from the Israeli defense planning distribution list. But it's not hard to guess: Iran has been arming Hamas, Islamic Jihad, Hezbollah, Iraq, Syria; the expressed intent is that if Israel attacks Iran they will find themselves fighting on several fronts. It seems clear that the point of the Israeli strikes is to disarm their nearest threat, both by blowing up weapons caches and by getting the stuff fired off now. Expect air strikes in Lebanon against Hezbollah next. I'd like to be sympathetic with the Israelis, a small group of people wildly outnumbered by neighbors who profess the desire to see them all dead; but I have to admit in the last couple of decades it seems it's all too often the Israelis who provoke with illegal settlements and disproportionate military responses. Well, whoever started it, it reminds one of Gandhi's quote, "An eye for an eye makes the whole world blind."
Taliban spokesperson Qari Yousuf Ahmedi sent out an email to roughly 500 recipients, but used "cc" instead of "bcc." Lots of secret Taliban supporters and activists have been outed. The CIA is quietly ecstatic.
China has apparently completed their government change-over, retiring the current group of 70-somethings and replacing them with a new group of 60-somethings, who were hand-picked by the 70-somethings as clones. By all appearances, nothing much is going to change. The new leaders seem disinterested in reform, democracy is completely off the table, and empty cities and bridges to nowhere will continue to be the hot investments. There does seem to be consensus that it's time to start rolling back the 1 child policy. Meet the new boss, same as the old boss.
The FHA will be asking for a bailout soon. They hold about $100b in delinquent mortgages, more than Fannie Mae and Freddie Mac combined. Because the FHA has what is known as "permanent and indefinite" budget authority, it won't need to ask Congress for funds; it will automatically receive money from the US Treasury.
The post office lost $16b last fiscal year, Oct 1 2011 to Sept 30 2012. The post office has also reached its $15b borrowing limit with the treasury. Obama and Romney spent $500m on campaign junk mail; this cash is keeping the post office afloat for an extra couple of months. Expect big changes in the next six months. Big changes. Really, I'm serious this time. Congress will Do The Right Thing and it will All Be Better.
All the news this week is about US oil production. We're going to pass up Saudi Arabia in five years (this is likely true). We're going to be oil independent in 10 years. Nah, no chance of this. Our oil production looks to peak at about 10b barrels per year. We use 19b. And don't expect gas prices to go down, with world demand increasing that's just not going to happen. So this oil thing is a great story but it doesn't mean we're headed back to $19 / barrel oil or $1 / gallon gasoline.
Argentina, which likes to default on their debt every ten to twenty years, looks about ready to do it again. One more straw for the global camel. . .
Greece's economy shrank 7% year on year, 19% since 2007. Unemployment is over 25%, nearing 60% for youth. The US has not experienced anything like this since the 1930s. European forecasts of Greek GDP have been something between comical and tragic - Greece is going down hard and the EU is trying to reassure them that the worst is behind them. It's not. Anti-austerity strikes have spread across Europe, engulfing Spain, Greece, Italy, and Portugal. In Spain the General Workers Union said the nationwide stoppage, the second this year, was being heeded by nearly 100 percent of workers Wednesday in the automobile, energy, shipbuilding and constructions industries.
BP's resolution with the Department of Justice will cost it an aggregate of $4.5 billion. BP will accept "responsibility for actions" related to the 2010 Gulf of Mexico spill and agree to plead guilty to 11 felony counts. Two BP employees will also face manslaughter charges. That figure makes it the to the largest criminal penalty in US history. The current record is held by Pfizer Inc, which paid a $1.3 billion fine in 2009 for marketing fraud.
The End of Twinkies: Hostess has been in bankruptcy all year and now wants to close their doors and shut down all operations. They say this is because they have been unable to negotiate a deal with their 6400 unionized bakers. A bit over 18,000 jobs will be lost due to a failure to compromise. Their facilities and brand names, which also include Ding Dongs and Wonderbread, would be sold at auction. Twinkies, widely believed to be able to survive a nuclear war, apparently cannot survive a union battle over pension costs. Computer programmers everywhere, who are known to work only at night and live on twinkies and mountain dew, are terrified.
Some states seem determined to go bankrupt. Others manage to live within their means. Here's the top and bottom five:
|Top five||Bottom five|
Thinking of buying a new phone? There's about a dozen operating systems for phones. Look at the graph below and see if you can predict what will happen to your favorite. One of the reasons for Apple's recent stock decline is worries about the long-term viability of the iPhone, the source of over half of Apple's profits.
Graphic Images Department: Here's what happens to the arteries of normal, average people who live on cheeseburgers, fries and shakes.
Election Aftermath: Who voted for whom?