9/27/12 – Stories Worth Noting

Posted by Brad McMillan, CFA, CAIA, MAI

Find me on:

This entry was posted on Sep 27, 2012 12:41:34 PM

and tagged Fiscal Cliff, Yesterday's News

Leave a comment

The fiscal cliff

As the cliff gets closer, the horizon gets shorter, and people are starting to notice. The Wall Street Journal (WSJ) has “Getting a Fix on the Fiscal Cliff” (p. A2) and the Financial Times (FT) has “Fiscal cliff dims business mood” (p. 2). The WSJ article offers a pretty good breakdown of the possible scenarios and is worth a look, while the FT article presents more evidence for the negative effects of uncertainty—which we already knew, and have discussed, but it is always nice to have more evidence.

U.S. economy

“US Consumer Rebound Based on More-Solid Foundations” (WSJ, p. C12) discusses how the housing recovery is providing a foundation for a much wider nascent recovery. I mentioned a couple of days ago that I plan a more detailed analysis of this, but in the meantime, this article makes several excellent points. Worth reading.

Health insurance changes

Possibly the most cutting-edge article in today’s papers, with the largest implications for the future, is “Big Firms Overhaul Health Coverage” on the front page of the WSJ. It describes how Sears and Darden Restaurants (Red Lobster, among others) plan to provide employees with a fixed amount of money to buy health benefits, rather than arranging the benefits themselves. This transition, if it catches on, will be even bigger than the shift from pensions to 401(k)s and will be driven by the same factors. If this is the future, it will have even more of an effect on the health system than Obamacare.

Chinese economy still looking negative

The New York Times (NYT) leads on the front page with “China Politics Stall Overhaul for Economy,” which talks about how the Chinese economy is showing signs of serious weakness and how the pending government transition has frozen the typical response of stimulus. The WSJ’s “New Labor Attitudes Fed Into China Riot” (p. B1) expands on several of the points I made yesterday about the changing expectations of younger workers and how that must change the Chinese economy.

Upcoming Appearances

Tune in to Bloomberg Radio's Bloomberg Businessweek on Friday, February 28, at 3:45 P.M. ET to hear Brad talk about the market. Stream the show live at https://www.bloombergradio.com/, listen through SiriusXM 119, or download Bloomberg's app, Bloomberg Radio+.

Tune into Yahoo Finance's The Final Round on Thursday, March 12, between 2:50 and 4:00 P.M. ET to hear Brad talk about the market. Exact interview time will be updated once confirmed. Watch at finance.yahoo.com

Subscribe via E-mail

New call-to-action
Crash-Test Investing
Commonwealth Independent Advisor

Hot Topics

Have a Question?

New Call-to-action

Conversations

Archives

see all

Subscribe

Disclosure

The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly into an index.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.  

Third party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.

Member FINRASIPC

Please review our Terms of Use

Commonwealth Financial Network®