Consumer Spending and Total Incomes
Americans were so depressed in November about the country’s direction and so hateful towards George W. Bush they …. went to the shopping malls and bought up stuff like there was no tomorrow.
On a serious note, consumer spending in November grew 1.1%. That was well above expectations. A stunning performance, in fact. Consumer spending accounts roughly for 2/3 of all economic activity.
Total incomes in November grew at an annualized rate of 4.8%. That’s above the prevailing inflation rate. We’ve already blogged here about income growth and total wage and salary growth during 2007 exceeding inflation. For obvious reasons the media simply won’t report that information to the general public.
Cue the Imperial Theme Music
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Obviously the young and stupified denizens of the Kos blocs won’t stop to consider what it means to have DOJ looking into a company’s “bill-and-hold” accounting. The same would hold true for the adult but spacey denizens of the paranoid, black helicopter blocs. Ironically, however, their collective ignorance won’t stop them reflexively from twitching and frothing at the mouth — merely the reference to Diebold will get that ball rolling.
EPA vs. Cali
The Bush administration slapped down California’s attempt to regulate businesses concerning CO2 gases and other emissions. The EPA’s viewpoint is that states are not permitted to enforce their own emissions regulations. California disagrees.
That dispute would make for an interesting U.S. Supreme Court case down the road, wouldn’t it?
Businesses, incidentally, would prefer the certainty of a single, uniform set of rules and regs, as opposed to a state-by-state patchwork of differing and potentially inconsistent laws.
If I were a judge I’d have to conclude that California’s proposed regulations are barred either by preemption or by the so-called “dormant” commerce clause.
A cheap buying opportunity is about to get even cheaper as the SEC formally is investigating Washington Mutual to determine whether the company colluded with real estate appraisers to lend money secured by inflated home values.
Hopefully the Lemmings on Wall St. will react to that news the same way they reacted to Altria’s (then Philip Morris’) problems circa 1999-2000, or Tyco’s problems circa 2002-2003, or to Merck’s travails circa 2004. In all three instances herd-based thinking on Wall St. resulted in the stock prices of good companies under litigation pressure getting so incredibly cheap they simply had to be purchased. Value investors who were “greedy when others were fearful,” as Warren Buffett would say, made out very, very well.
Time of course will tell for certain.
Guilty as Skin
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As they say, watch the whole G-string, er, I mean, read the whole thing.
The Federal Reserve auctioned off $40 billion in public money this week. That’s in response to the putative credit crunch, about which the liberal media has been hyperventilating.
I wash my hands of the Fed.
Hopefully in a year or two we won’t be sitting around complaining about inflation and wondering why the Fed pumped so much liquidity into the system. Time will tell.