Succinct Summations week ending September 27, 2013.

Positives:

1. The Russell 2000 had its highest closing price ever this week.
2. August new home sales rose 421k, in line with expectations.Up 7.9% m/o/m v 6.6% expected.
3. U.S. Household net worth rose $1.34T in the second quarter thanks to Tesla and Facebook.
4. U.S. durable goods rose 0.1% last month v expectations of a 0.2% decline.
5. U.S. consumer spending rose 0.3% in August, incomes grew 0.4%.
6. AAA said gasoline prices fell another .06 on the week to $3.42, the cheapest since January and down 10% y/o/y. (so much for inflation)
7. Chinese Flash PMI rose to 51.2, a 6-month high.
8. 30 year mortgage rate falls 14 bps to 4.28% (Bankrate.com). MBA said refi applications rose 4.9% and purchases were up by 6.6%, both higher for a 2nd week.
9. Senate approves bill to avoid government shutdown, get in line Congress.
10. Initial claims fell 5k to 305k.
11. Eurozone flash PMI rose to 51.1, its highest level in more than 2 years.
12. Despite all the noise, we are whole 3% off all time highs.

Negatives:

1. Dow Jones and S&P 500 have been down 6 out of the last 7 sessions thanks to political ineptitude.
2. Partisan squabbling threatens shutdown and raises huge fiscal questions as the Potomac Paralysis raises risks for the entire economy.
3. August pending home sales come in at -1.6% v expectations of a 1% fall, a 3rd consecutive monthly decline.
4. Core CapEx orders rose 1.5% in August v expectations of +2%.
5. August Durable Goods orders missed expectations as orders ex transports fell .1% m/o/m
6. Consumer confidence fell to 79.9 from 81.8 in August
7. Case-Shiller’s 20-city index came in at 0.62% m/o/m v expectations of a 0.88% gain. y/o/y printed a 12.39% gain, in line with expectations.
8. Richmond Fed manufacturing data collapsed to 0 versus 14 previously.

Thanks Batman!

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Succinct Summation of Week’s Events (September 27, 2013)”

  1. rd says:

    Since we are less than 3 weeks away from Lew’s D-Day on the debt ceiling, here are Sections 4 and 5 from the Fourteenth Amendment thatare likely to be the topic of much discussion in the next few weeks:

    “Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

    Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.”

    Wikipedia’s discussion of these two sections is below:

    Validity of public debt

    Section 4 confirmed the legitimacy of all U.S. public debt appropriated by the Congress. It also confirmed that neither the United States nor any state would pay for the loss of slaves or debts that had been incurred by the Confederacy. For example, during the Civil War several British and French banks had lent large sums of money to the Confederacy to support its war against the Union. In Perry v. United States (1935), the Supreme Court ruled that under Section 4 voiding a United States bond “went beyond the congressional power.”

    The debt-ceiling crisis in 2011 raised the question of what powers Section 4 gives to the President, an issue that remains unsettled. Some, such as legal scholar Garrett Epps, fiscal expert Bruce Bartlett and Treasury Secretary Timothy Geithner, have argued that a debt ceiling may be unconstitutional and therefore void as long as it interferes with the duty of the government to pay interest on outstanding bonds and to make payments owed to pensioners (that is, Social Security recipients) Legal analyst Jeffrey Rosen has argued that Section 4 gives the President unilateral authority to raise or ignore the national debt ceiling, and that if challenged the Supreme Court would likely rule in favor of expanded executive power or dismiss the case altogether for lack of standing. Erwin Chemerinsky, professor and dean at University of California, Irvine School of Law, has argued that not even in a “dire financial emergency” could the President raise the debt ceiling as “there is no reasonable way to interpret the Constitution that [allows him to do so]“.

    Power of enforcement

    Main article: Congressional power of enforcement

    Section 5, also known as the Enforcement Clause of the Fourteenth Amendment, enables Congress to pass laws enforcing the amendment’s other provisions.[In the Civil Rights Cases (1883), the Supreme Court interpreted Section 5 narrowly, stating that “the legislation which Congress is authorized to adopt in this behalf is not general legislation upon the rights of the citizen, but corrective legislation”. In other words, the amendment authorizes Congress to pass laws only to combat violations of the rights protected in other sections.

    In Katzenbach v. Morgan (1966),the Court upheld Section 4(e) of the Voting Rights Act of 1965, which prohibits certain forms of literacy requirements as a condition to vote, as a valid exercise of Congressional power under Section 5 to enforce the Equal Protection Clause. The Court ruled that Section 5 enabled Congress to act both remedially and prophylactically to protect the rights guaranteed by the amendment. However, in City of Boerne v. Flores (1997), the Court narrowed Congress’s enforcement power, holding that Congress may not enact legislation under Section 5 that substantively defines or interprets Fourteenth Amendment rights. The Court ruled that legislation is valid under Section 5 only if there is a “congruence and proportionality” between the injury to a person’s Fourteenth Amendment right and the means Congress adopted to prevent or remedy that injury.

    http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

  2. KDawg says:

    I was wrong the other day when I said there were few left wing extremists. I just revisited some of the old political blogs I used to read and it is a cesspool over there. Holy crap. I hope these people never run any political party.

    I think what happened is when Obama won, the reasonable people left and only the obsessive crazies remained. They were a minority. Now they seem to be the majority.

    Of course, this is the Internet. The comments consist of mostly crazy people with nothing better to do. Hopefully, the real world doesn’t mirror what I’ve just witnessed.