Archive for September 2015

At the height of the 2013 coal boom, the trading firm Glencore purchased mining firm Xtrata forming Glencore-Xtrata. The thought was combining low volatility Glencore with high volatility Xtrata, and in the process making a bigger firm, would improve results. Wrong! Firm value is down 75% Y-o-Y. Worse, declining coal prices coupled with the massive…

While college students have borrowed over $1.2 trillion and seven million students are in default, more debt doesn’t appear to increase default rates. Of students that borrow less than $5,000, 34% default, those that borrow between $5,000 and $10,000 have a 29% likelihood of defaulting, while those who borrow more than $100,000 have an 18%…

Unless Speaker Boehner can raise the debt ceiling and fund the government through 2017 before he resigns on 10/31/15, the Fed may again delay raising rates. If these issues aren’t resolved, it will fall to presumed Speaker McCarthy to solve them by 12/11/15. He’ll be loath to cut a deal with Democrats on his first…

The Friday File: After two weeks, NFL teams are converting one-point conversions at a rate of 94.1%, down from 99.3% last year, due to a significant rule change making the kick 33 yards, not 20 yards. Last year, two-point conversions were successful 47.8% of the time. This means that now, on average, a one-point conversion…

While inflation is well below the Fed’s 2% goal, according to Fed Chairwoman Yellen 80% of the shortfall is evenly split between low energy prices and the strengthening dollar, with the remainder split between labor market slack and weak commodity prices. Except for labor market slack, Yellen expects the other forces to dissipate relatively soon.…

In 11/07, the number of full-time workers peaked at 121.9 million, while the number of part-time workers totaled 24.8 million, including 4.3 million part-timers who couldn’t find full-time work. Last month, the number of full-timers hit 122 million, finally surpassing the old record! The number of part-timers is stable at 26.9 million, while the number…

Any hope about a near-term resurgence in the manufacturing sector should be put to rest. The most recent readings for industrial production and capacity utilization showed a decline, as have all three Federal Reserve manufacturing indices along the east coast. Just today, the Chemical Activity Barometer — a good leading indicator of manufacturing activity —…

Median household income in 2014 was $53,657, down from $54,462 in 2013 and is down 9.3% from the all-time high of $57,843 in 1999. Median household income is now roughly where it was in 1989 when it surpassed $53,000 for the first time. In 2014, 5.6% of households had incomes above $200,000, the highest percentage…

The Friday File: Americans spend about $1 billion/year on nail polish. The most costly, Rouge Louboutin at $50 for less than half an ounce. Revenues across all 53,815 nail salons are $8.5 billion/year with the number of salons up from 48,930 last year but down from the high of 59,843 in 2006. The data suggest…

After months of speculation, the Fed left interest rates unchanged. They expect to bump rates a quarter-point before year end, and anticipate raising rates by one percentage point per calendar year until the fed funds rate reaches 3.5% in 2018. In the end, global weakness and wider credit spreads stayed their hand. Lastly, with rates…