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For the week 4/22-4/26
The Global Economy
There is no debating the fact there is little growth around the world these days. In China, HSBC’s flash estimate on manufacturing for April came in at 50.5, barely above the 50 dividing line between growth and contraction and down from a final 51.6 in March. China grew at a slower pace in the first quarter than the fourth.
The Politburo Standing Committee said in a statement that “China needs to cement its domestic economic growth momentum and guard against potential risks in financial sectors.”
Nomura has lowered its estimate of growth in China to 7.2 percent by the fourth quarter year-on-year, 7.5 percent for the full year; this after China’s 7.8 percent pace for all of 2012 was the weakest in 13 years.
In the United States, the first estimate for growth in the initial three months of 2013 came in at a less than expected 2.5 percent and there seems little doubt the pace will be softer in the current quarter. Durable goods (big-ticket items) for March were awful, down 5.7 percent and ex- the volatile transportation sector off 1.5 percent after being down 1.7 percent in February. The minus 5.7 figure was the worst for durable goods in seven months.
Existing home sales for March came in less than expected, though the median home price, up 11.8 percent over March 2012, was the biggest increase since Nov. 2005.
And then you have the slew of corporate earnings reports that continued a trend that has been in place for well over a year...companies are beating estimates on the bottom line through cost-cutting, while fewer than 50 percent are matching revenue projections on the top line.
You have to grow revenues for long-term success, sports fans.
Procter & Gamble guided lower for the year; AT&T saw its revenues decline year over year; Caterpillar, which had previously warned prior to this week, nonetheless saw a huge drop in both earnings and revenues, though it claimed conditions across the globe were “stable,” which I guess means lousy; Dow Chemical beat on earnings but missed on revenues, which were less than last year; 3M missed on both the top and bottom line, with revenues up only 2% vs. 2012 as the company guided lower, and there are others, as described below.
Oh, there were some positive stories, and overall the stock market rallied, but there has been little fundamental cause for optimism...save for the Federal Reserve....which I’ll address in a bit.
So we move on to Europe. Here, stocks on Tuesday and Wednesday staged their best rally in eight months... because the fundamentals are absolutely dreadful!
No, don’t be confused. The data was so putrid, investors are convinced that the European Central Bank has to lower interest rates as early as next week, and that has to be good, right?
Not necessarily. Lowering the ECB’s benchmark interest rate from 0.75 percent to 0.50 percent will do zippo for the credit crunch, particularly in the periphery (Greece, Portugal, Spain and Italy), which is crushing small- and medium-sized businesses.
But here are the facts. The flash composite PMI for both services and manufacturing in the 17-nation eurozone for April came in at 46.5, unchanged from March and the 15th contraction in a row.
Chris Williamson, chief economist for Markit, which publishes the data, said, “Although the PMI was unchanged in April, the survey is signaling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify further in coming months rather than ease.”
Germany’s composite PMI was just 48.8 in April, a six-month low (47.9 for manufacturing), plus Germany had a sharp drop in its key business confidence index.
Spain reported its 2012 budget deficit was a whopping 10.6% of GDP, higher than Greece’s 10% (the EU limit is supposed to be 3%), plus Spain then announced its unemployment rate was 27.2% (with a youth rate of 57.2%). As recently as mid-2007, the jobless rate in Spain was 7.9%, but then this was the peak in its real estate bubble.
So Spain’s government on Friday announced it was lowering its economic outlook for 2013 to -1.3%, compared with an earlier GDP contraction estimate of -0.5%. Spain now doesn’t see anything better than 1.3% growth in 2016. It also admitted it needed two extra years to bring its budget deficit back below the 3 percent target.
Anti-austerity protests in Spain on Thursday turned violent.
About the only good economic news came out of the U.K., where growth in the first quarter was 0.3%, meaning Britain avoided a triple-dip recession, though hardly the kind of growth that will take the heat off the Cameron government’s economic policies.
And Italy did move closer to a new government, which was a positive, at least for today.
87-year-old Giorgio Napolitano was dragged kicking and screaming into an unprecedented second seven-year term as president when Italian lawmakers couldn’t agree on anyone else.
I mean picture this guy. He desperately wanted to retire, but when he gave in to the majority, said, “I am driven at this time by a feeling that I cannot escape from assuming my responsibilities towards the nation, trusting that my gesture could be matched by a similar assumption of responsibility.”
Talk about embarrassing. Napolitano was, to put it mildly, torqued off.
So the next day he announced a surprise nominee for prime minister, 46-year-old center-left politico Enrico Letta, charging Letta with forming a government that would then gain a vote of confidence in both houses of parliament, potentially in the next few days.
Letta is from the center-left, but he has the total confidence of center-right kingpin, Silvio Berlusconi. You see, Letta’s uncle is Berlusconi’s long-time right-hand man.
So Napolitano’s move places Berlusconi back into a position of kingmaker, despite all his legal issues. In fact Berlusconi’s right-wing People of Freedom Party is ahead by eight points over the Democratic Party, center-left coalition, in the latest polls with Beppe Grillo’s Five Star movement trailing badly in third place; significant should there still need to be a snap election this June or next September.
For now, the Letta government is expected to pursue the pro-European reform agenda laid down by 10 “wise-men” appointed by President Napolitano recently.
But Letta has already said “the policy of austerity is no longer sufficient,” and herein was the other big story of the week.
The debate over austerity vs. a pro-growth agenda. I cover it more broadly speaking down below as part of the Reinhart/Rogoff academic mess, but this week saw a major change in tone, at least among some Euro leaders.
Jose Manuel Barroso, the European Commission president, long a proponent of austerity, reversed course and said the EU should place a greater emphasis on policies that stimulate growth and less on austerity measures, such as cutting government spending.
“While I think this policy (austerity) is fundamentally right, I think it has reached its limits,” said Barroso.
“A policy to be successful not only has to be properly designed, it has to have a minimum of political and social support.”
This is a definite shift, moving the EC and ECB closer to the IMF, for one, that has been recommending the likes of Britain lighten up on the budget cuts.
Barroso’s speech is also being seen as a sign that countries such as France and Spain will be given longer to get their spending under control.
But German Chancellor Angela Merkel is not yet ready to give in on the austerity debate, especially since her deficit hawk policy has won her plaudits at home as she approaches the September election. Merkel is not changing before then and in fact, this week she reiterated Eurozone members must be prepared to surrender more authority to European institutions if the continent was to avoid decline.
Europe must have “the last word,” Merkel said, in another sign Berlin will insist there are Europe-wide controls over national budgets.
There is going to be a critical Euro summit in June to discuss moving forward towards fiscal union. I’m guessing it all comes to a head at that time.
[Merkel did throw France a bone this week in saying she would support it being given another year to bring its budget deficit below 3 percent.]
So you add all the above up and it’s not like it’s been a discussion on keeping growth under control, and avoiding inflation, is it?
It’s about a moribund economic outlook, which I admit isn’t all bad for stocks, as we’ve seen. Easy money from Japan, to the United States, to a coming renewal of same in Europe. Goldman Sachs economist Jan Hatzius doesn’t see the Federal Reserve raising its benchmark interest rate from zero until January 2016!
But this is for all the wrong reasons, as in Hatzius’ position is based on no real improvement in the U.S. employment picture until then.
And of course next year the following topic hits us in the face....
“It was always going to be difficult to implement Obamacare, but even fervent supporters of the law admit that things are going worse than expected.
“Implementation got off to a bad start because the Obama administration didn’t want to release unpopular rules before the election. Regulators have been working hard but are clearly overwhelmed, trying to write rules that influence the entire health care sector – an economic unit roughly the size of France. Republicans in Congress have made things much more difficult by refusing to provide enough money for implementation.
“By now, everybody involved seems to be in a state of anxiety. Insurance companies are trying to put out new products, but they don’t know what federal parameters they have to meet. Small businesses are angry because the provisions that benefited them have been put on the back burner. Health care systems are highly frustrated. They can’t plan without a road map. Senator Max Baucus, one of the authors of the law, says he sees a ‘huge train wreck’ coming.
“I’ve been talking with a bipartisan bunch of health care experts, trying to get a sense of exactly how bad things are. In my conversations with this extremely well-informed group of providers, academics and former government officials, I’d say there is a minority, including some supporters of the law, who think the whole situation is a complete disaster. They predict Obamacare will collapse and do serious damage to the underlying health system.
“But the clear majority, including some of the law’s opponents, believe that we’re probably in for a few years of shambolic messiness, during which time everybody will scramble and adjust, and eventually we will settle down to a new normal.
“What nobody can predict is how health care chaos will interact with the political system. There’s a good chance that Republicans will be able to use unhappiness with what is already an unpopular law to win back the Senate in 2014. Controlling both houses of Congress, they will be in a good position to alter, though not repeal, the program.
“The law’s biggest defenders will then become insurance companies and health care corporations. Having spent billions of dollars adapting to the new system, they are not going to want to see it repealed or replaced....
“Over all, it seems likely that in some form or another Obamacare is here to stay. But the turmoil around it could dominate politics for another election cycle, and the changes after that – to finally control costs, to fix the mind-boggling complexities and the unintended consequences – will never end.
“Regulatory regimes can be simple and dumb or complex and sprawling. When you build complex, it takes a while to work through the consequences.”
The Reinhart, Rogoff Dispute
Last week I noted how two Harvard economists, Carmen Reinhart and Kenneth Rogoff, circulated a paper in 2010 titled “Growth in a Time of Debt” that identified a critical tipping point for government indebtedness, 90 percent of GDP.
The theory became gospel in conservative circles, both in the U.S. and Europe, to bolster arguments to drive down budget deficits, but researchers at the Univ. of Massachusetts said there were errors in the original spreadsheet used by the two.
Reinhart and Rogoff are in the austerity camp. Upon seeing they made some mistakes, pro-stimulus proponents such as economist Paul Krugman relished the debunking of the theory.
For their part, Reinhart and Rogoff defended the technical aspects of their work this week:
“Our critics seem to suggest that they can ignore everything else we have done because we are somehow going around placing great emphasis on one outlier estimate for growth. This is wrong. We have never used anything but the conservative median estimate in our public discussions.”
The two acknowledged that they had inadvertently left some data out of their calculations. Still, the error didn’t change the basic findings of their research, they said.
“John Kenneth Galbraith memorably put down his fellow economist Milton Friedman by saying: ‘Milton’s misfortune was that his policies had been tried.’
“The same observation might be made of Carmen Reinhart and Kenneth Rogoff. Especially in Europe, pro-austerity policy makers have tried policies based on their research with catastrophic economic and human consequences. The Harvard economists’ tragedy is not the misuse of a Microsoft Excel spreadsheet but the misuse of Microsoft PowerPoint. They hyped their results. In doing so, they followed the golden rule of tabloid journalism: simplify then exaggerate.
“After the publication in 2009 of their bestselling book, This Time Is Different, the professors published research on the relationship between debt and growth which suggested there is a 90 percent threshold of debt to gross domestic product beyond which economic growth declines rapidly. Many policy makers have interpreted this rule as a call to reduce debt to below that level for the sake of growth. Profs Reinhart and Rogoff have thus become the intellectual godmother and godfather of austerity.
“To see their enormous influence on the European debate, it is worth quoting an extract from a speech by Olli Rehn, the European Commission’s economic chief, to the Council on Foreign Relations in June 2011. ‘Carmen Reinhart and Kenneth Rogoff have coined the ’90 percent rule’,’ he said. ‘That is, countries with public debt exceeding 90 percent of annual economic output grow more slowly. High debt levels can crowd out economic activity and entrepreneurial dynamism, and thus hamper growth. This conclusion is particularly relevant at a time when debt levels in Europe are now approaching the 90 percent threshold, which the U.S. has already passed.’....
“The Reinhart and Rogoff thesis, as it is understood by policy makers, incorporates two separate myths. The first is the existence of the 90 percent threshold. The second is about causality.
“The first was debunked last week by Thomas Herndon, Michael Ash and Robert Pollin, researchers from the University of Massachusetts Amherst. Their corrected figures show a rather smooth negative relationship between growth and debt. Economists will always squabble about statistical issues – whether to use the median or the mean, and the like. But no matter how you twist and turn this, there is no structural break at a 90 percent threshold. There is no structural break anywhere.
“For the policy discussion, this point is hugely important. It pulls apart the notion of 90 percent as some magic number – which European policy makers now obsess about, just as they used to about annual budget deficits not exceeding 3 percent of GDP, for which there was no theoretical basis.
“The reduction of everything to a single number was followed by an exaggeration of the impact. Causation could go from high debt to low growth, as the authors suggest; or the other way round; or in both directions. Or the relation might be spurious. Or something altogether different might cause both. If causality is the other way round, the story is much less exciting for someone who peddles economic policies. You might as well say: people are poor because they have no money. If your growth is negative, your debt ratio rises for the simple reason that it is expressed in terms of nominal GDP....
“The 90 percent rule...is unbelievably flimsy. And even though it has been refuted, it will continue to shape the policy debate for a while.
“As for Profs Reinhart and Rogoff, I suspect that they, too, will be mostly remembered for the fact that their policies have been tried.”
“An insistent question of our time is, how much government debt is too much. Is there some debt level that becomes crushing as opposed to merely costly? The controversy over research by economists Carmen Reinhart and Kenneth Rogoff shows how explosive the issue is....
“This dispute, which would normally be confined to obscure scholarly journals, has assumed greater visibility because it involves the debate over deficit spending. One group of economists and policymakers argues that annual deficits must be cut because they’re creating – or have already created – dangerous debt levels. Another group contends that large deficits are needed to propel stronger recoveries and reduce huge unemployment.
“It’s ‘austerity’ versus ‘stimulus.’ If debt exceeding 90 percent of GDP is hazardous, then the case for austerity seems stronger. (Already many countries exceed or are approaching the 90 percent mark.) If not, deficit spending remains a possible temporary spur. Which is it? Although the newly discovered errors in Reinhart and Rogoff’s paper are embarrassing, they do not alter one of its main conclusions: High debt and low economic growth often go together.”
Samuelson displays a table comparing annual economic growth rates of 20 advanced countries from 1945 to 2009 at various debt levels. Here’s the bottom line.
For debt/GDP of 60-90 percent, the annual growth rates as estimated by Reinhart/Rogoff are 2.8 percent. For the UMass economists, 3.2 percent.
For debt/GDP of 90+, Reinhart/Rogoff calculate you’d have an annual contraction of -0.1 percent, while the UMass folks see growth of 2.2 percent.
“(The) UMass economists confirm that high debt implies lower economic growth...But the UMass economists debunk the notion that growth collapses when debt hits 90 percent of GDP....
“Still, (Reinhart and Rogoff’s) modest mistakes have inspired outlandish allegations. ‘Did an Excel coding error destroy the economics of the Western world?’ asked economist Paul Krugman in his New York Times column. Well, no. The Reinhart/Rogoff paper was published in January 2010, more than a year after Lehman Brothers’ failure and the onset of the financial crisis. At that point, all the ingredients of Europe’s debt crisis (housing bubbles in Spain and Ireland, huge budget deficits in Greece, weak banks throughout the continent) were also in place.
“ ‘How much unemployment was caused by Reinhart and Rogoff’s arithmetic mistake? That’s the question millions will be asking,’ suggests Dean Baker of the Center for Economic and Public Policy Research, a left-leaning think tank. Actually, millions won’t ask, and the answer is: probably none. History may or may not judge Europe’s austerity a mistake, but German Chancellor Angela Merkel – its chief advocate – was not taking her cues from Reinhart and Rogoff. Her policies reflect strongly held German beliefs and values.
“Something similar can be said of British Prime Minister David Cameron. He took office in May 2010 when the Reinhart/Rogoff paper still enjoyed standard academic obscurity. Cameron’s decision to make deep cuts in Britain’s budget deficits, then running about 10 percent of GDP, was controversial. At most, Reinhart/Rogoff provided some intellectual cover for policies that would have occurred anyway....
“As for American ‘austerity,’ there hasn’t been much. Though declining, budget deficits remain large and the Federal Reserve’s monetary policy remains loose.
“What’s sobering about this brawl is that it settles nothing. With some exceptions, most advanced countries, including the United States, seem caught in a similar trap. Their debt/GDP ratios are high and rising, so it’s hard to embrace massive deficit-financed stimulus programs. But austerity programs of spending cuts and tax increases may dampen growth and raise debt/GDP ratios. There is no obvious exit from this dilemma except a burst of spontaneous growth, which is conspicuous by its absence.”
--Stocks rallied back from the worst week of the year the prior one with the Dow Jones adding 1.1% to 14712, while the S&P 500 tacked on 1.7% to 1582, 11 shy of an all-time high, and Nasdaq rose 2.3%.
--U.S. Treasury Yields
6-mo. 0.09% 2-yr. 0.22% 10-yr. 1.67% 30-yr. 2.86%
--In light of this week’s report on first-quarter GDP, the Bureau of Economic Analysis coincidentally said it will be shaking up government statistics, going all the way back to 1929, in a move that will lift the official size of the U.S. economy by 3 percent, as well as see government statistics take into account for the first time 21st century components such as film royalties and spending on research and development.
R&D, for example, will now count as an investment, adding a bit more than 2 percent to the measured size of the economy. [Robin Harding / Financial Times]
--The hack attack on the AP’s Twitter feed that led to the flash crash on Tuesday was apparently carried out by the Syrian Electronic Army, which describes itself as “proudly pro-Assad” and has supposedly carried out attacks on the likes of “60 Minutes” and NPR, among others.
On its website, the group professes to be involved in arming Syrian Arabs with “science and knowledge” against campaigns from the Arab and western media to broadcast fabricated news about what is actually happening in Syria.
--The airline industry, and the flying public, were furious over the impact of the sequester on the air traffic control system, with hundreds of flights facing lengthy delays due to furloughed controllers, so Congress quickly acted, with both houses passing legislation that would let the FAA use up to $253 million from airport improvement and other accounts to end the furloughs for the controllers through the Sept. 30 end of the federal fiscal year.
But with President Obama signing it into law, I do still want to get the following down for the archives...and my running history of our times.
The Wall Street Journal had the best synopses of the situation prior to Congress’ acting.
“As travelers nationwide are learning, the White House has decided to express its dislike of the sequester – otherwise known as modestly smaller government – by choosing to cut basic air traffic control services....
“Start with the Federal Aviation Administration, better known as the Postal Service without the modern technology. Flyers directly fund two-thirds of the FAA’s budget through 17 airline taxes and fees – about 20% of the cost of a $300 domestic ticket, up from 7% in the 1970s. Yet now the White House wants to make this agency that can’t deliver what passengers are supposedly paying for even more dysfunctional.
“Ponder this logic, if that’s the right word: The sequester cuts about $637 million from the FAA, which is less than 4% of its $15.9 billion 2012 budget, and it limits the agency to what it spent in 2010. The White House decided to translate this 4% cut that it has the legal discretion to avoid into a 10% cut for air traffic controllers. Though controllers will be furloughed for one of every 10 working days, four of every 10 flights won’t arrive on time....
“The White House claims the sequester applies to the budget category known as ‘projects, programs and activities’ and thus it lacks flexibility. Not so: This is a political pose to make the sequester more disruptive. Legally speaking, the sequester applies at a more general level known as ‘accounts.’ The air traffic account includes 15,000 controllers out of 31,000 employees. The White House could keep the controllers on duty simply by allocating more furlough days to these other non-essential workers....
“Meanwhile, ever since Al Gore launched a training initiative to increase the productivity of air traffic controllers in 1998, productivity has continued to fall. A larger workforce is now in charge of a smaller workload as the number of flights has dropped by 23%. As the Inspector General reports, ‘FAA data suggest that its overall staffing may not be optimal.’
“A rational government would use the sequester to improve on this sorry record. But instead this White House is responding to the FAA’s failures by making the flying experience for millions of Americans even more unfriendly. It is actively creating even more delays, cancellations and missed connections in order to incite a public outcry on behalf of bigger government.
“All of this deserves to backfire, and it will if Republicans break from their circular immigration firing squads and explain what Mr. Obama is doing. For all of its rough edges, the sequester is proving to be educational. It is showing Americans how broken so much of government is, and it is revealing how our politicians refuse to distinguish between essential services and needless waste.”
The Star-Ledger of New Jersey had this bit concerning flight delays.
“Cindy Hollingsworth, who had a layover in Newark on her trip from Richmond, Va., to San Francisco, said she was surprised at how vocal her flight attendant had been this morning on the subject of sequestration.
“ ‘She went up and down the aisle reminding everyone that if they voted for Obama, this was the result,’ said Hollingsworth, who declined to name the airline. ‘I don’t want to get that girl in trouble.’”
--South Korea’s economy grew 0.9% in the first quarter from the previous three months, the best in two years; not bad considering the yen’s decline hurts South Korea’s exports.
--Apple said it would return $100 billion to shareholders by the end of 2015 as it increased its quarterly dividend by 15 percent and boosted its share buyback program from $10 billion to $60 billion.
Sales of the iPhone and iPad handily beat estimates, as revenues rose to $43.6 billion, and earnings of $10.09 per share exceeded expectations by a few pennies.
However, Apple warned revenues in the current quarter will come in below analysts’ expectations at between $33.5 billion and $35.5 billion, when the Street was looking for $38.9 billion. Ergo, no imminent product launches....and that’s the big concern.
CEO Tim Cook tried to reassure investors and shareholders that Apple was continuing to take measures to ensure that it maintained its dominance in the market.
“The decline in Apple’s stock price over the last couple of quarters has been very frustrating for all of us...but we’ll continue to do what we do best....
“Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline.”
But clearly Cook is fed up with what many at Apple see as increasingly unrealistic expectations for the company.
Apple’s cash hoard is up to $145 billion, but two-thirds of this is held overseas.
Meanwhile, iPhone sales of 37.4 million surpassed predictions of 35.4 million; 19.5 million iPads were sold, beating estimates of 18.3 million.
At the end of the week, Apple shares were higher than when the report was issued, $417 vs. $406.
--KFC parent Yum Brands reported that quarterly profit fell less than Wall Street expected, despite a sharp fall in sales in its top China market.
Most of Yum’s 5,500 restaurants in China are KFCs and sales at these branches fell 20 percent in the quarter with a bird flu outbreak coming on the heels of a previous food safety scare in December.
Overall, revenues for Q1 fell 7.6% from $2.74 billion to $2.54 billion.
The company said April sales could decline at a 30 percent clip in China, where the company derives more than half its overall revenues, yet Yum says it expects positive growth to return there in the fourth quarter. And this is where I have a problem.
The H7N9 virus is very real and, witness Yum’s own admitted sales problem in April, changing consumer habits rapidly. The latest bird flu has claimed at least 23 lives in China and has a mortality rate of 20%, not insignificant. Taiwan also reported its first case on the island as well.
A report in The Lancet medical journal this week provided the first evidence that the new flu virus is 99.4 percent related genetically to that found in live chickens. Though the virus’ ability to spread from birds to humans is still limited, the study in The Lancet said it displayed a high ability to spread between chickens – with 20 percent of chickens in linked markets found to be infected by H7N9.
Keiji Fukuda, one of the leading flu experts at the World Health Organization, said, “This is definitely one of the most lethal influenza viruses we have seen so far....an unusually dangerous virus.”
--Exxon Mobil Corp.’s first-quarter profit rose slightly, but oil and natural gas production dropped for the seventh consecutive quarter on a year-over-year basis, falling 3.5% from the same period in 2012.
Exxon has vowed production will expand from 2014 through 2017 as it starts pumping at more than two dozen major oil and gas projects.
The company still earned $9.5 billion, up from $9.45 billion a year earlier.
--The New York Times Co. reported revenue fell 2% from a year earlier, with advertising dropping more than 11%, while subscription sales rose 6.5%.
--George Soros has taken a 7.9 percent stake in troubled JC Penney and the shares rallied strongly in response. Soros Fund Management also has stakes in Wal-Mart, Home Depot, Walgreen and Macy’s, according to the latest filings.
--Samsung Electronics announced first-quarter earnings that slightly exceeded expectations but reiterated a cautious outlook for the global smartphone market.
At the same time, Samsung admitted difficulties in meeting “overwhelming global demand” for the new Galaxy S4, which went on sale, Friday.
Nonetheless, the company is concerned about the growing competitive threat from low-cost Chinese manufacturers.
One analyst estimates Samsung’s second-quarter smartphone shipments at 76 million units, compared with 68 million in the first quarter. As noted above, Apple sold 37.4 million units of the iPhone in the March quarter.
--AT&T’s sales dropped 1.5 percent in the first quarter as the company continues to be hurt by sluggish demand for traditional phone connections – especially among business customers.
And while AT&T signed up 296,000 customers in its wireless division, this was dwarfed by Verizon’s 677,000.
--Quarterly revenue topped $1 billion for the first time at Netflix, which saw its shares soar on better than expected results. Playing off the success of its first original series, “House of Cards,” Netflix apparently surpassed HBO in subscribers, 29.2 million to 28.7 million. [HBO does not publish detailed subscriber data, but the 28.7 figure is derived by research firm SNL Kagan.]
What was shocking to some is that while “House of Cards’” 13 episodes were posted online on the same day, the company said it found fewer than 8,000 cases where people signed up for the show, watched it, and then canceled their subscriptions.
Netflix stock closed at $174 before the earnings release and finished the week at $215.
--Amazon.com Inc. reported operating income in the first quarter of $181 million, handily exceeding expectations, as sales rose 22 percent, but net income fell to 18 cents a share from 28 cents a year earlier.
CEO Jeff Bezos continues to pour money into expansion, including 20 new shipment hubs last year to attract customers by offering faster delivery times.
Amazon shares, however, cratered $20 to close Friday at $254.
--Toyota held on to the top spot in global auto sales in the first quarter, though sales declined 2.2% from a year earlier. Toyota sold 2.43 million vehicles, compared to No. 2 GM at 2.36 million and Volkswagen at 2.27 million. GM’s sales rose 3.6% and VW’s climbed 5.1%.
Toyota continues to be hit by anti-Japanese sentiment in China, where sales declined 13%.
--Ford reported strong earnings for the quarter, with sales up 20% to $22.3 billion.
But Ford also reiterated its loss for 2013 in Europe will be $2 billion, having lost $462 million there in the first quarter.
On the other hand, North American profits were the best since at least 2000.
--The largest U.S. homebuilder by volume, D.R. Horton Inc., said its fiscal second-quarter profit more than doubled and the share price hit its highest level since February 2007.
--The Australian central bank announced it will invest about 5 percent of its foreign reserves in Chinese government bonds, in a further attempt to forge closer economic ties; China being Australia’s top export destination, and its biggest source of imports. In 2012, more than a quarter of Australia’s exports – mostly commodities – went to China.
--Chinese telecom network equipment maker Huawei said it has given up trying to conquer the U.S. market, after being repeatedly blocked by security fears.
“We are not interested in the U.S. market anymore,” Eric Xu, executive vice-president, said at the company’s annual analyst summit.
Huawei has steadfastly denied it was a threat to U.S. national security. Now, the world’s second-largest supplier of network gear by revenue will focus on expansion in Asia and elsewhere.
--Farming exports in Russia hit an all-time high in value last year, some $16.6 billion worth of mostly grain. Russia just wrapped up a five-year government program to develop the sector.
But the country’s export figure compares to the $141.3 billion worth of U.S. agricultural sales to foreign markets last year. [Moscow Times]
--Heineken’s sales in Europe fell 9 percent in the first quarter; 2 percent in the Americas.
--Charles Schwab & Co. had major issues on its website this week as it was hit with denial-of-service attacks.
--We note the passing of Shakuntala Devi, an Indian mathematical wizard, at the age of 83.
As the New York Times’ Haresh Pandya put it, Devi was known as “the human computer” for her ability to make incredibly swift calculations.
For example, “In 1980, she correctly multiplied two 13-digit numbers in only 28 seconds at the Imperial College in London. The feat, which earned her a place in the 1982 edition of the Guinness Book of World Records, was even more remarkable because it included the time to recite the 26-digit solution.
“(The numbers, selected at random by a computer, were 7,686,369,774,870 and 2,465,099,745,779. The answer was 18,947,668,177,995,426,462,773,730.)”
Syria: What now? U.S. Defense Secretary Chuck Hagel, traveling in the Middle East, said on Thursday from Abu Dhabi that “our intelligence community does assess, with varying degrees of confidence, that the Syrian regime has used chemical weapons on a small scale in Syria.”
The White House released a letter to key senators making the same claim.
And then on Friday, prior to a meeting with Jordan’s King Abdullah II, Obama said some of the following:
“What we have right now is an intelligence assessment,” but he stressed it is too soon to say whether the “red line” of chemical weapons use was crossed.
“Knowing that, potentially, chemical weapons have been used inside of Syria doesn’t tell us when they were used, how they were used,” or provide “confirmation and strong evidence. This is going to be a long-term proposition. This is not going to be something that is solved easily overnight.”
In other words, time to punt it to the U.N., as Syria expert Joshua Landis told the Washington Post late Friday.
“ ‘As President of the United States, I don’t bluff.’ So President Obama famously said in March 2012, warning Iranian leaders that he would not allow them to acquire nuclear weapons. Those are words Iranian leaders surely have in mind as they watch to see if Mr. Obama was bluffing about the warning the President has repeatedly delivered against the use of chemical weapons by the Assad regime in Syria.
“ ‘I’ve made it clear to Bashar al-Assad and all who follow his orders: We will not tolerate the use of chemical weapons against the Syrian people, or the transfer of those weapons to terrorists,’ Mr. Obama said last month. ‘The world is watching; we will hold you accountable.’
“Or not. On Thursday, the White House confirmed in a letter to Senators John McCain and Carl Levin that the U.S. intelligence community now believes ‘the Syrian regime has used chemical weapons on a small scale in Syria, specifically the chemical agent sarin.’ That comports with similar claims by the French, British and Israel....
“To recap: In a world in which there are few limits on war’s brutality, chemical weapons have since World War I largely been the exception. Yet now there is growing evidence that Mr. Assad is the first known leader to use chemical weapons since Saddam Hussein murdered his own people in the Kurdish city of Halabja in 1988. The Syrian attack violates red lines Mr. Obama personally laid down. And now the Administration will....go to the U.N.?
“At Turtle Bay, the U.S. will need permission from Syria’s protectors in Moscow and Beijing merely to begin an investigation....several months, if not years, down the road – proof of the attacks will be all-but impossible to come by....
“This message about American bluffing won’t be lost on Iran, which has refused to bend on its nuclear program despite claims by Secretary of State John Kerry that time is running out. It also won’t be lost on Israeli leaders, who can’t afford to let Syria’s chemical stockpiles spread to its other enemies in the region.
“The growing strength within the Syrian insurgency of the al-Nusra Front – now an official franchise of al-Qaeda – means the chances of chemical weapons falling into the hands of jihadists has never been greater....
“Presidents who are exposed as bluffers tend to have their bluff called again and again, with ever more dangerous consequences.”
This week, Israeli Brig. Gen. Itai Brun said at a security conference: “To the best of our professional understanding, the regime has made use of deadly chemical weapons against the rebels in a number of incidents in the past.”
Separately, up to 500 were reportedly killed in a Syrian Army offensive on a key Damascus suburb that had become a stronghold for the opposition. Activists increasingly cite the participation of Hizbullah fighters in attacks against the rebels.
Sec. of State Kerry said the U.S. would double its nonlethal aid to opposition forces in Syria to $250 million, which rebel leaders find laughable. ‘We need weapons,’ they say.
Meanwhile, Lebanon is increasingly being drawn into the war, the Sunnis on the side of the rebels, Shiites on the side of the regime, with two influential Lebanese Sunni clerics this week calling on their community to wage “jihad” in Syria to defend their brethren. There has been heavy fighting close to the border, with rockets fired into Lebanon killing at least two in recent days.
Iran: Tehran and the International Atomic Energy Agency are slated to hold talks on May 15, what will be the 10th meeting between the two aimed at hammering out terms for investigating Iran’s nuclear activities. But once again, there seems little doubt the IAEA will be denied in its request to inspect the military facility at Parchin, where it is suspected Iran has been conducting tests on items such as nuclear triggers. Iran has refused to open up Parchin to agency auditors.
At the same time, it would seem the P5+1 (U.S., China, Russia, Britain, France and Germany) are holding off in their demands until after Iran’s June presidential election.
Iraq: At least 125 were killed in clashes between Sunni Muslims and security forces, particularly in northern Iraq, as anti-government demonstrations have been growing in intensity the past four months. The protests are centered around calls for the resignation of Shiite Prime Minister Nouri al-Maliki and his regime’s alleged targeting of the Sunni community by the authorities.
Provincial elections held last weekend, though, the first since the Americans withdrew their final troops, went off relatively peacefully. To accomplish this, however, parts of the country were in virtual lockdown.
Libya: The French embassy in the capital of Tripoli was targeted by a car bomb that caused extensive damage, but incredibly only two French guards were injured.
North / South Korea: Seoul announced on Friday it is pulling out all remaining workers from its jointly run industrial zone in North Korea, Kaesong, after Pyongyang rejected a call for formal talks to end a standoff that resulted in 53,000 North Korean workers being pulled from 123 South Korean companies operating there.
North Korea is making an incredibly stupid mistake with its move. For starters, imagine the 53,000? What will they do now?
Kaesong was opened in 2004 as part of a so-called sunshine policy between the two Koreas, with the South Korean companies producing clothing and household goods. The North received about $90 million a year in cash through the project.
China / Japan: Three Chinese government ships entered Japanese territorial waters on Friday, days after Japanese Prime Minister Shinzo Abe vowed to expel any Chinese landing on what Japan calls the Senkaku islands, and China labels the Diaoyu. On Tuesday, eight Chinese government vessels sailed into the disputed waters in the East China Sea.
This was also a week when nearly 170 Japanese lawmakers made the annual pilgrimage to the controversial Yasukuni war shrine in central Tokyo, where convicted war criminals are enshrined alongside more than two million others who died in Japan’s modern wars. Abe, facing criticism from China and South Korea over the visits, aggravated the situation further when he said in parliament:
“The definition of what constitutes an ‘invasion’ has yet to be established in academia or in the international community. Things that happened between nations will look different depending on which side you view them from.”
A South Korean foreign ministry spokesman said, “At this occasion, we expressed strong regrets with regards to the distorted understanding of history and anachronistic words from Japan, its government and politicians. We hope Japan’s leaders will reflect upon its colonization and invasion with an honest and modest mind-set and correct its anachronistic understanding and rhetoric.”
Japan annexed Korea in 1910 and occupied the peninsula until the end of World War II.
While Abe has an approval rating near 70%, only 14% of the Japanese people support his stance on diplomacy and security issues.
On a different issue, China’s Defense Ministry issued its biannual white paper and what raised eyebrows in the defense community was the omission, for the first time, of China’s “no-first-use” policy for nuclear weapons.
“Beijing for decades has publicly maintained an ‘unequivocal commitment’ that it would never be the first one to use nuclear weapons in a war. This pledge has been explicitly set out in every white paper until now and China routinely calls on every nuclear-weapon state to adopt similar declaratory statements.”
But while there is no mention of circumstances under which Chinese strategic arms could be used in a first strike, James Acton, a senior associate for nuclear policy with the Carnegie Endowment for International Peace, said it is “notable that the document made public last week does not once include an unambiguous recommitment to the nuclear doctrine.” [Rachel Oswald]
“China may intend the new language in its white paper to send a signal: that in a future crisis, if it concluded that the United States was about to attack its nuclear arsenal with conventional weapons that were backed up by missile defenses, China might use its nuclear weapons first....The United States should recognize this concern.”
Separately, China has deployed a powerful missile designed to take out U.S. aircraft carriers to prevent the U.S. from aiding Taiwan during a conflict between Taipei and Beijing.
And, lastly, there have been a slew of pieces from varying sources on China and pollution and how attitudes are changing rapidly. As in foreigners are increasingly saying no to work assignments in China (including heavily polluted Hong Kong), while Chinese families who can afford to are leaving the big cities such as Beijing because the health risks are just too great.
The government knows it has a huge problem on its hands, but often seems powerless to do anything about it.
A Deutsche Bank report released the other month said China’s air pollution situation, particularly in the big cities with heavy automobile use, could worsen by an additional 70 percent by 2025.
Russia: In an annual five-hour televised Q&A, President Vladimir Putin said of the relationship with the U.S.:
“First of all, I want to say that some cooling in our relations began with events in Iraq. It began not yesterday, not last year and not this year. Then events in Libya and other parts of the world began...We observe chaos everywhere. And we do not think that our partners’ position is absolutely right.”
Putin also denied there are political prisoners in Russia, likening jailed members of the anti-Putin punk band Pussy Riot to people who deface soldiers’ graves.
Meanwhile, opposition leader and anti-corruption blogger Alexei Navalny stands trial in a Kirov courtroom on embezzlement charges that he and his supporters say are politically motivated.
Switzerland: Members of the European Commission in Brussels are furious with Switzerland after it announced quotas on immigration that will apply to immigrants from eight Eastern European countries that joined the EU nine years ago, including Poland, Hungary and the Czech Republic. Limits are also being prepared for the 17 older EU states, including Britain and France.
The EU accused non-member Switzerland of breaking an agreement on the free movement of people.
Foreign migrants make up almost one fifth of the Swiss population of 8 million, with the highest numbers coming from Italy, Germany and Portugal, but the biggest increase in 2012 was from Hungary, with arrivals up 23.6 percent. [London Times]
Bangladesh: The death toll from the collapse of a garment-factory building has exceeded 300. Some 3,100 workers were employed there and 2,200 had been rescued as of Friday so you can do the math on the final outcome, the building having collapsed on Wednesday.
Violent demonstrations were widespread as workers and victims’ family members clashed with police. Just a day earlier there was a local television report on cracks being seen in the structure and when you look at the pile of rubble, you can see how pathetic the construction must have been. The building owner fled.
Five months ago, a fire in a building housing garment workers there killed 112. With wages among the lowest in the world, Bangladesh has increasingly been a magnet for numerous global brands.
“As it played out last week, the Boston bombing case was declared – by media and political consensus – a model of post-9/11 coordination among federal, state and local law enforcement. ‘They all worked as they should, as a team,’ said President Obama after the surviving Tsarnaev brother was captured alive. If only this Boston story were that neat and reassuring.
“Revelations have since raised serious questions about America’s antiterror defenses. Over the weekend, the FBI confirmed what first emerged from press interviews with the mother of the Tsarnaev brothers: In March 2011, the bureau received a tip from the Russians that Tamerlan Tsarnaev was ‘a follower of radical Islam’ and questioned him and his family members. The FBI says its investigation turned up nothing and the Russians didn’t reply to a request for additional information.
“The FBI also says it didn’t know Tamerlan Tsarnaev spent months in 2012 in Dagestan, a restive Muslim region in southern Russia next to Chechnya. A senior FBI official told some Members of Congress his name and date of birth were incorrectly entered – by the CIA, in one account – into a database that checks flight manifests against a list of potential terrorists. Another report said the airline made the spelling mistake.
“This Keystone Cops routine gets worse. In testimony before the Senate Judiciary Committee, Homeland Security Secretary Janet Napolitano on Tuesday said that her department’s ‘system pinged when he was leaving’ the U.S. So DHS knew that Tamerlan Tsarnaev – who had been put on the Treasury Enforcement Communications System, or TECS – was headed back to Russia, but the FBI and CIA didn’t. DHS didn’t tell anyone else, apparently.
“Tamerlan’s return to the U.S. last summer failed to ‘ping’ at DHS. His listing on TECS had lapsed, since the FBI had closed his file. Tamerlan’s return to Russia should at least have extended his stay on the watch list. The Patriot Act and other policy changes after 9/11 were meant to prevent this kind of cock-up.....
“(Tamerlan) Tsarnaev did not appear at the Boston marathon out of nowhere. The FBI had interviewed him and he had posted jihadist videos on the Internet. Someone dropped the ball, and dozens of Americans will be scarred forever. The public deserves a full accounting from FBI Director Robert Mueller, not merely an apologia.”
--The mother of Dzhokhar and Tamerlan Tsarnaev is a vile figure and at her news conference in hell-hole Dagestan, she not only said America had taken her children away from her, but she reiterated her sons were not involved in the attack.
“I would prefer not to have lived in America. Why did I go there? I thought America would protect us. America took my kids away from me...I’m sure my kids were not involved in anything.”
But here’s the deal with Zubeidat Tsarnaeva....she isn’t likely to come to the U.S. because she fears arrest if she returns. Why? She was charged with shoplifting in the States last year.
“The shutdown of Boston during the search for the Marathon bombers was symptomatic of a country that still has a lot to learn about dealing with terrorism. Shutting down an entire city to find two people is not only absurd and extraordinarily costly, it feeds right into the hands of terrorists, who study our responses and plan their next attacks accordingly....
“(Jihadis) around the world must have noticed what can only be called a law-enforcement overreaction of gigantic proportions.
“When the manhunt began in earnest, law-enforcement officers from all around the region descended on the scene in a massive show of support....
“Ironically, the area of interest was essentially limited to an area of several blocks in the suburb of Watertown.
“This concentration of force – the largest man-hunt in New England history – had the potential for tragedy. When you have so much uncoordinated firepower concentrated in a small area, chaos can quickly turn into catastrophe.
“Moreover, the policy of police overreaction sends a very strong message to both large global terrorist organizations and small local terrorist cells that are planning their next strikes against us: In response to even a relatively small attack, we will shut down, lock our citizens in their homes, close down transportation and businesses and concentrate all our homeland-security assets in one place.
“Then thousands of law enforcement, military, federal and private security forces will converge on the streets in ad hoc martial law to find a single teenage terrorist.”
--Canadian authorities arrested two suspects, allegedly with ties to al-Qaeda, who were plotting to attack a train from Toronto to New York and derail it.
--The fertilizer plant that exploded in West, Texas, killing 14 and injuring 200, contained 1,350 times the amount of explosive chemical that would normally require safety oversight by officials. The plant had not informed the Department of Homeland Security of the high levels of ammonium nitrate, which can be used in bomb making.
--Sen. Max Baucus (D-Mont.) announced he would not seek reelection in 2014, which is important for a number of reasons.
For starters, he has vowed to use his remaining two years to promote sweeping changes to the tax code. Baucus said when Obama called him after his announcement, the senator brought up tax reform. “They’re going to get tired of me,” Baucus said. He has been chairman of the Senate Finance Committee for a long period and played a key role in drafting Obamacare.
But Baucus is also the sixth Democrat to opt out of a 2014 run, with Obama having lost three of the states, including Montana by 14 points, in 2012, so Republicans are hopeful.
Baucus, 71, said “I don’t want to leave here when I’m 80 years old....I want to see what life is like outside the United States Senate.”
Former Montana governor Brian Schweitzer is likely to run for Baucus’ seat on the Democrat side.
--Barbara Bush, in an interview with NBC, said she was not in favor of son Jeb running for president.
“I think it’s a great country, there are a lot of great families, and it’s not just four families or whatever. There are other people out there that are very qualified, and we’ve had enough Bushes.”
She added that she felt Jeb was the “most qualified,” but she did not think he would run.
Earlier, George W. said he would urge his brother to go for it.
--Speaking of George W. Bush, a new Washington Post-ABC News poll suggests the passage of time has been beneficial.
Days before the end of his second term in 2009, Bush’s approval rating had plunged to 33%. Now it’s back up to 47% (50% disapprove). His economic approval rating has risen from 24% to 43%.
Iraq, Katrina, the financial collapse...there’s a lot there.
But even Jimmy Carter praised Bush’s initiative to combat HIV/AIDS in Africa, which has helped save hundreds of thousands of lives.
“Historical judgments mature slowly, but they tend to reward being right on the large things. Bush was right in shaping the structures and doctrines of a serious war against terrorism – a vindication demonstrated by President Obama’s imitation. Right in predicting a wave of change in the Middle East and North Africa and in urging autocrats to embrace reform or risk revolution. Right in pushing reluctant Republicans toward greater outreach, particularly to Hispanics and other rising minority groups. Right – if politically premature – in pressing Congress to act on entitlement and immigration reform.
“Put this in the category of backhanded compliments: Many politicians who are eager to criticize the Bush legacy have managed to embrace the Bush agenda....
“The same man who regarded the authors of 9/11 as evil saw the fight against global AIDS as an ethical imperative. It was all one whole. And with the distance of years, it looks a lot like principle.”
“Barack Obama was elected president in 2008 because he was not George W. Bush. In fact, he was elected because he was the farthest thing possible from Mr. Bush. On some level he knew this, which is why every time he got in trouble he’d say Bush’s name. It’s all his fault, you have no idea the mess I inherited. As long as Mr. Bush’s memory was hovering like Boo Radley in the shadows, Mr. Obama would be O.K.
“This week something changed. George W. Bush is back, for the unveiling of his presidential library. His numbers are dramatically up. You know why? Because he’s the farthest thing from Barack Obama.
“In all his recent interviews Mr. Bush has been modest, humorous, proud but unassuming, and essentially philosophical: History will decide. No finger-pointing or scoring points. If he feels rancor or resentment he didn’t show it. He didn’t attempt to manipulate. His sheer normality seemed like a relief, an echo of an older age.
“And all this felt like an antidote to Obama – to the imperious I, to the inability to execute, to the endless interviews and the imperturbable drone, to the sense that he is trying to teach us, like an Ivy League instructor taken aback by the backwardness of his students. And there’s the unconscious superiority....
“When Bush left office, his approval rating was down in the 20s to low 30s. Now it’s at 47%, which is what Obama’s is. That is amazing, and not sufficiently appreciated....Which suggests Republicans in general have some latent, unseen potential of which they’re unaware. Right now, they’re busy being depressed.”
--According to a USA TODAY Poll, by 49-45, those surveyed favor Congress passing a new gun-control law. In an NBC/Wall Street Journal poll in early April, 55% had backed a stricter gun law, which was down from 61% in February.
As pollster Stuart Rothenberg said, “So much of the support for gun control is emotional, following the Newtown tragedy. The longer you get away from there, people start thinking of other issues. They start thinking about terrorism or jobs or immigration, and not surprisingly, then some of the momentum behind gun control starts to fade.”
And then came the Boston Marathon bombings. Rothenberg told USA TODAY, “It wouldn’t be shocking if people sitting in their homes in Massachusetts cities and towns thought to themselves, ‘Boy, I wish I had something to protect myself with if a terrorist came through the door now.’”
“The graying man flashing fury in the Rose Garden on behalf of the Newtown families, the grieving man wiping away tears after speaking at the Boston memorial service, is not the same man who glided into office four years ago.
“President Obama has watched the blood-dimmed tide drowning the ceremony of innocence, as Yeats wrote, and he has learned how to emotionally connect with Americans in searing moments, as he did from the White House late Friday night after the second bombing suspect was apprehended in Boston.
“Unfortunately, he still has not learned how to govern.
“How is it that the president won the argument on gun safety with the public and lost the vote in the Senate? It’s because he doesn’t know how to work the system. And it’s clear now that he doesn’t want to learn, or to even hire some clever people who can tell him how to do it or do it for him.
“It’s unbelievable that with 90 percent of Americans on his side, he could get only 54 votes in the Senate. It was a glaring example of his weakness in using leverage to get what he wants. No one on Capitol Hill is scared of him.
“Even House Republicans who had no intention of voting for the gun bill marveled privately that the president could not muster 60 votes in a Senate that his party controls....
“Obama hates selling. He thinks people should just accept the right thing to do. But as Joe Manchin, the West Virginia Democrat, noted, senators have their own tough selling job to do back home. ‘In the end you can really believe in something,’ he told The Times’ Jennifer Steinhauer, ‘but you have to go sell it.’
“The president said the Newtown families deserved a vote. But he was setting his sights too low. They deserved a law.”
--I was at the Jersey shore last Saturday, helping an old friend dig out from Hurricane Sandy. [Jimbo and Pete M., other members of our poker group from high school, have done far more than I have...I note for the record.]
It’s a high-end community...NBC’s Brian Williams has a house a few blocks from my buddy...but I was amazed by the devastation that was still there six months later...with the town not having bulldozed scores of homes that were totally destroyed. [60+ out of 500 in this one place.]
And this town has a big issue with some holdout homeowners who don’t want to grant easement, which allows beach/dune replenishment, because they don’t want to lose their ocean view, even though they are right on the beach.
Anyway, the latest Rutgers-Eagleton Poll shows that a majority of New Jerseyans believe it will take one to five years for the state to get “back to normal” after Sandy and roughly 90 percent think Shore communities need to construct seawalls or dunes to prevent similar flood damage.
--So I seldom look at my traffic for StocksandNews... numbers don’t change that much after 14 years, after all, especially since I’ve done zero advertising recently.
But the one thing I’m curious about is traffic outside the U.S. and so I’m with my tech guy the other day and we see Pakistan is No. 2....and it’s not even close. Canada is a distant third, followed by India, Indonesia and the U.K.
--Talk about global warming; we’re worried about a degree here, a degree there. But did you see that scientists, as outlined in the journal Science, now believe the Earth’s inner core is far hotter than prior experiments suggested?
How hot? Try 6,000C – as hot as the Sun’s surface! Measurements in the early 1990s suggested a core temp closer to 5,000C.
So you may want to rededicate yourself to avoiding Hell. Just sayin’.
--Finally...RIP, George Jones.
Pray for the men and women of our armed forces...and all the fallen.
Gold closed at $1453
Returns for the week 4/22-4/26
Dow Jones +1.1% 
S&P 500 +1.7% 
S&P MidCap +1.8%
Russell 2000 +2.5%
Nasdaq +2.3% 
Returns for the period 1/1/13-4/26/13
Dow Jones +12.3%
S&P 500 +10.9%
S&P MidCap +11.8%
Russell 2000 +10.1%
Have a great week. I appreciate your support.
Nightly Review video schedule Mon.-Thurs. around 5:30 PM ET.