Thoughts for October 08, 2014

Thoughts for October 08, 2014

Was there a setback on October 07, 2014? US stocks took one of their most precipitous drop since July, a 275 point drop, not pretty, but with a steady vertical trend over the past 60 days many would consider this a minor adjustment. I have stated since July 01, 2014 that the market would shift upward due to midterm elections and that both parties would do all in their powers to put the brightest face on the economy that they could to make their respective party appear to look good in light of, a really ‘crappy economy, that has been perpetuated by an equally lousy Congress, that has failed at every juncture to do its job, and has maintained a dismal approval rating of less than 12% as reported by  Real Clear Politics as of September 29, 2014.

It is no coincidence that it happened on the same day that the International Monetary Fund (IMF) cut its outlook for next year’s global economic growth. The IMF cut its forecast for global growth to 3.3% in 2014 down from 3.4% and lowered its 2015 forecast citing regional weaknesses including Europe and potential geopolitical risks of the Middle East. The Eurozone economy is genuinely struggling, investors are extremely anxious about how this will affect large US enterprises. Even the Germans who have appeared to be in control of their economic dominion , have demonstrated weak metrics recently which tends to make everyone in the European Union queasy.

On the home front, HP first announced its redesign / restructuring plans in 2012. Those plans included the lay-off of more than 25,000 workers. But, then at that time, HP would cut 27,000. By June of this year, it had doubled the target, to 50,000, with 36,000 employees already gone.

On this Monday past, it bumped up the new layoff target, yet again, to 55,000. Even so, HP remains an enormous employer, with over 330,000 employees worldwide, and that means that when HP reorganizes itself, it will likely make even more cuts. However, when we look at the US employment, we must be concerned with how many American jobs will be lost and be concerned with America first!

As I originally pointed to back in July is that after the midterms, watch for rapids inflation, (hyper-inflation) it has already begun. Frito-Lay has increased prices in September by as much as 20%, Produce has risen by as much as 14%, in general food costs for the past 90 days have increased an average of 5.83%. The Federal Reserve will not include these numbers in their inflationary figures as demonstrated in Janet Yellen’s commentary before the Senate in July/August hearings. Fuel prices are being kept artificially low. Why? Midterm Elections! On October 7, 2014, national news reported (ABC news) that winter heating fuel prices would be rising ‘very high’ in comparison to last year, which is very curious to me. I find it curious as we are not fighting any war in Iraq or Afghanistan so our US military fuel consumption should be lowered by over 250 million barrels per month. So would cost go up if consumption is down?

Here are some thoughts on the current economy for you to give consideration. Please look at all your candidates carefully. This election is important. Parity in both houses is important, when one house is dominated by one party whether at state level or federal level, nothing is ever accomplished. Parity forces both sides to talk with each other, to work in the interests of the people, not their own agenda’s.

Lastly, if you think multi-millionaires / billionaires are going to represent the best interests of those that make $38,000 per year, think again……… but who am I but a humble economist…………………. (Unproofed)

https://www.youtube.com/watch?v=Q_D-uijGVew

http://www.kidsnotceos.com/school-district-cuts

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