April 2012

ADP Employment Report - 209,000 Private Sector Jobs for March 2012

ADP, released their proprietary private payrolls jobs report. This month ADP is reporting a gain of 209,000 private sector jobs in March. February 2012 was revised up by 14,000, from 216,000 to 230,000. January was also revised, from 173,000 to 182,000. In contrast, the BLS reported 233,000 private sector jobs for February 2012.

Walmart's Low Prices Bear a High Cost for America

For untold millions, Walmart is not simply a place to shop, but the place. Considering that the quintessential big-box retailer claims to, and often does, offer just about every conventional item necessary for the family at an affordable price, this should be none too surprising.

However, at what cost does this convenience come, and in the grander scheme of things, is what Walmart has to offer really convenience at all? The company’s ownership would most definitely say so, as would throngs of eager consumers. Many economists, social scientists, and former employees, though, have a strikingly different opinion. While one can choose to believe whichever side of the argument he or she likes best, where do the facts lie?

First and foremost, it should be known that every single American taxpayer is essentially footing the bill for Walmart’s mere existence.

According to Reuters, this is because, as a study published last year by the City University of New York’s Hunter College Center for Community Planning showed, company employees receive inadequate health insurance coverage and in turn are left with few other options than to apply for public assistance. Beyond providing a lack of medical benefits, Walmart’s presence in most regions, says the study, "Depresses area wages....pushes out more retail jobs than it creates, and results in more retail vacancies."

We Told Ya So - FOMC Minutes Confirm No Quantitative Easing

We told ya so, yet people don't listen. The Federal Reserve FOMC meeting minutes were released and showed no quantitative easing for you.

Here is the money shot from the FOMC minutes:

A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run.

The FOMC has 10 voting members. The news is clear, those in favor or more quantitative easing are now 8 to 2 and if and only if the economy goes further into the tank.

Nevertheless, the staff continued to forecast that real GDP growth would pick up only gradually in 2012 and 2013, supported by accommodative monetary policy, easing credit conditions, and improvements in consumer and business sentiment

We're sure some will hold out hope against hope that more quantitative easing will happen. After all there are two members of the FOMC leaving the door open on more quantitative easing if the unemployment situation gets worse. That said, the next time you see some major investment group claiming QE3 is sure to arrive, check their interests and why that group is making such a claim. Alternatively just read us, we sure knew QE3 was not gonna happen.

Factory Orders Up 1.3% for February 2012

The Manufacturers' Shipments, Inventories, and Orders report was released today. This report is called Factory Orders by the press and covers both durable and non-durable manufacturing orders, shipments and inventories. While new orders increased 1.3% from January, the first thing to notice is new orders have recovered to pre-recession levels.

 

TBTF's Double Dip Dessert

doubledipWe all know Too Big To Fail Banks became even bigger from the financial crisis. We also know previous mergers and acquisitions along with financial deregulation allow banks to own, invest and advise, often on the same transactions or deals. We also know time and time again, this has led to strong conflicts of interest and disaster for shareholders, taxpayers and customers.

The latest is an acquisition deal of El-Paso, a natural gas pipeline operator, by Kinder Morgan, a competitor. Seems Goldman Sachs made off with a $25 million fee for advising El-Paso, all the while having a 19%, $4 billion dollar stake in Kinder Morgan, plus a couple of seats on the Kinder Morgan board to boot.

There is a clear conflict of interest on the El Paso-Kinder Morgan deal. The stink is so bad, Goldman Sachs even brought the wrath of Delaware Chancellor Leo Strine who called the deal tainted with disloyalty. Of course the acquisition of El Paso by Kinder Morgan goes through anyway, in spite of the court admonishment.

Construction Spending Declined, -1.1%, in February 2012

The Census, part of the Commerce Department, today released the monthly construction spending report. This is a monthly tally, reported seasonally adjusted, annualized, of how much money was spent on construction. Spending was $808.9 billion in February. The survey has been done since 1960. The below graph shows just how badly construction spending imploded since 2008.

The Lottery is the Best Investment Strategy for April 1st 2012

After 72 hours of non-stop mega millions lottery news coverage, we discovered the best investment strategy to secure your future is to buy lottery tickets. One never knows and it's best to place your fate in the hands of improbable odds. While the chance of hitting it big are 176,000,000 to 1, we checked the numbers and discovered getting your retirement 401k to where it needs to be has even worse odds and also correlates to winning a lottery. See the correlation graph below.

 

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