Friday, November 16, 2012

Some Observations

Everyone is holding their breath, hoping Democrats and Republicans reach an agreement on the fiscal cliff. Today we saw an unusual sight: The majority and minority leaders of both Houses speaking to reporters in a conciliatory manner. It looks like we are getting close to an agreement. Get ready for a big rally when a credible deal is announced.

That's the good news. Here's the bad:

Hurricane Sandy has had a huge negative impact on the economy. It caused a large spike in initial jobless claims and a sharp drop in industrial production. Sandy raises the risk of another recession.

Twinkies are no more. Some of you would say that's good news. After all, there is no nutritional value to those delicious cupcake-like treats. No doubt, Twinkies are the last thing an obese country needs. Hostess, the company that makes Twinkies and other bad-for-you treats, is going out of business. Before you cheer, keep in mind that Hostess runs 33 plants around the country that employ almost 20,000 Americans. Goodbye Twinkies. Goodbye jobs.

Shares of Apple keep plummeting. The company has lost about a quarter of its market capitalization since its September peak. Is this a buying opportunity? It's hard to say no.

America's military leadership is in turmoil; but not because of battles gone wrong. The culprit is sex. Imagine that.

The Middle East is in turmoil. While many in the West celebrated the so-called Arab Spring, Israel's leaders worried more about the instability that it could produce. Indeed, Islamists have gained power and they are proving their credentials by attacking Israel. The bombs are flying and things will likely get worse. How will the Obama administration react? It's still trying to figure out exactly what happened in Benghazi.