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Right back into the range

The first week of earnings season is behind us. The results were not nearly as bad as investors feared. Some averages, such as the Russell small and mid-cap indexes, actually made new highs. However, all the indexes fell back into a trading range by the close on Friday. read more…

Brazil—not for the faint of heart

Beset by scandals that could reach as high as the presidential office, suffering from an epic drought, low oil prices, high inflation, a declining currency and a negative economic growth rate, the world’s seventh largest economy could be an interesting long-term investment but not for the faint of heart. read more…

Earnings on deck

This week launched the beginning of first-quarter earnings results for American companies. Wall Street doesn’t expect much. It is bracing for a disappointing season, especially from U.S. exporters. Has the market discounted that news already? read more…

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Will beer become an acquired taste?

Twenty-five years ago American beer had more in common with spring water than with one of the oldest beverages of the human race. Today, thanks to a return to the methods of the past, microbreweries and craft beer brewers are hoping to create a renaissance among beer drinkers in America. read more…

Is Everybody Happy?

 

The Dow made a new record high every day this week, except Friday. The S&P 500 Index came within a hair’s breath of its historical high as well. Most world indexes are doing the same thing. The consensus is that the markets are going higher–Uh oh. read more…

The Richest Man on Earth

 

As the white smoke clears, the world’s first Argentine was appointed to the pinnacle of the Roman Catholic Church. Pope Francis I, formerly known as Cardinal Jorge Mario Bergoglio, assumed the reigns of what many believe is the wealthiest instituition on earth and since he is the boss that makes him one wealthy individual. read more…

Now What?

 

Unless you have been in a coma, most investors are well aware that the Dow Jones Industrial Average reached an all-time high this week. Aside from its headline value, should we attach any importance to this event? read more…

The Blame Game

 

“Let’s call out names, names, I hate you more

Let’s call out names, names, for sure”

Blame Game by Kayne West

If it wasn’t such a national embarrassment, the finger pointing going on among our so-called leaders would be comical. Nonetheless, it is March 1 and time is up. Bring on the Sequester.

Our congressional leaders made a big show today at the White House Sequestration meeting. It was their first such meeting on the subject to date.  I considered it a photo op at best. This week, rather than attempt a compromise, both Democrats and Republicans spent their time blaming each other for the Sequester.

From the GOP point of view, it is “the president’s sequester” while the president is blaming the cuts on the Republican’s failure to act responsibly. Since it was the Budget Control Act of 2011that first authorized the Sequester, (if the bi-partisan “Super committee” couldn’t come up with a compromise solution to reducing the deficit), let’s look at how the final vote panned out.

One hundred and seventy-four Republicans voted for the measure but only ninety-five Democrats. The final tally was 269 to 161 with just about all of today’s GOP leadership voting yes. These are the same characters who now claim it was Obama’s fault. All of this name calling is a smokescreen to hide an even more important deadline that occurs at the end of March.

On March 27, Congress will need to pass a “continuing resolution” (read short-term spending plan) or funding for the Federal government will expire. Yes, my long-suffering readers, without a deal between the two parties the government shuts down.  Continuing resolutions are stop gap measures that keep the lights on in Washington, absent a formal budget. We haven’t had one of those in years because of political partisanship.

The threat of a shutdown actually will force congress to act since, unlike the more subtle and slower paced sequester cuts, a total shut down of the government would be highly visible and extremely disruptive. It would not be pretty. Either congress will agree to keep the sequester cuts as is or it will have to come up with an alternative set of revenue increases and spending cuts.

In the meantime, both parties will have had almost a month of dealing with irate airline passengers, defense contractors, various agency heads, parents of Head Start children and the like.  So this week’s failure to compromise is simply setting the stage for a bigger cliff hanger, much more drama, and, I suspect, heightened volatility in the stock market.

Readers may have noticed that over the last two weeks volatility has escalated among the averages. We will most likely see more one percent up and down days as March unfolds. Washington seems to be providing the justification for the pullback I have been expecting. So with headwinds strengthening, one wonders just how long the markets will be able to shrug them off. But let me be clear: I don’t expect a market route, simply a nice pullback that stocks sorely need in order to advance further this year.

 

 

 

 

Snap, Crackle and Pop

Chiropractors are seeing more patients than ever and that trend is expected to continue as Baby Boomers grow older. The popularity of alternative medicines and Americans newly-found caution towards pain killers only increase the demand. But the real question is can the industry get paid for it? read more…

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About Bill

Bill Schmick was born in a blue-collar neighborhood of Philadelphia, just a few blocks north of “Rocky Balboa” territory where most of his Catholic schoolmates grew up to be either cops or criminals. He narrowly escaped both professions by volunteering to fight in Vietnam as a U.S. Marine... Read More

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