‘Any fool can criticize, condemn, and complain, and most fools do. But it takes character and self control to be understanding and forgiving.’ Dale Carnegie
Over the course of the last week, the deed was done, or more accurately, was not done, as most observers knew would be the case. If you are confused, forgive my vagueness, as my reference is to the Federal Reserve’s announcement that, ta da, the current short term interest rate level would not be changed. Stunner. Shock of shocks, right? Uh, no. The night before, the Bank of Japan pretty much did the same thing by not changing their policy of buying bonds to keep short term rates negative, but also targeting the long end of the yield curve to stay neutral (ten year instruments). Since the next Federal Reserve Board meeting is just days before the 2016 Presidential and Congressional elections, you know nothing will be done then. So, the next potential chance to raise interest rates would be December, and now, it looks like the Fed is angling to take that off the table as well, by dropping 2017 and 2018 estimates. Investors responded by buying, buying, and buying some more, especially stocks and oil, stoked by the prospects of a weaker dollar. Alas, when the Saudis decide to put the kibosh on any chance of an OPEC agreement to cut production at the upcoming pow wow in Algeria, it was back to the same old see saw we have seen for going on a few years. As the Fed meeting is now behind us, at least for the time being, the world turns its attention to the Monday night debate between Donald and Hillary. More on that in a sec, so stay with me.
Elsewhere in the capital markets, the European purchasing manager’s index came in soft, which also calls into question how long the ECB will stick with the current policy of quantitative easing. In the technology world, Facebook admitted a few of its advertising metrics regarding video have been highly inflated, causing some large advertisers to question how it measures traffic. It seems third parties are not part of the verification process and this is a major problem as currently, you have to take Zuck’s word for it on traffic figures. Not good. Yahoo disclosed a data breach, only 500 million accounts involved. Again, not good, and it shows the continuing escalation of the importance of data security for large enterprises. Rumors that Tweety bird (Twitter) is actively listening to offers to buy the company boosted the price pretty nicely yesterday, though nothing was announced. Leon Cooperman, a fifty year veteran of the equity wars and a Hall of Fame investor, was charged, though not criminally, by the SEC with insider trading. As an interesting note, keep in mind this is the same government which gave five of Hillary Clinton’s staff limited immunity for cooperating with the email investigation where these five individuals essentially impeded a House of Representatives investigation. Not hard to understand why the country has little faith in any branch of government, right?
In a couple of days, Donald Trump and Hillary Clinton will engage in their first debate so the country can become more informed about the candidates and their vision, or lack thereof, for the country. Many think this will be the critical event to determine who will become president. Maybe, maybe not. Usually, what is expected does not take place, especially in sports, markets, and plenty of other arenas, including politics. My take is both candidates have the task of trying to persuade maybe 20% of the electorate they are the better person for the job. A big part of sales is merchandising and how you appear and communicate to the potential buyer. The country is not particularly in love with either side, in fact, the winner is probably the person who the voting population is least disgusted by. In this light, if I were Mr. Trump’s handlers, I would have him prepared with every statistic you can think of to support his arguments. Essentially, bore the country into thinking he is qualified. Apparently, this is not their strategy. Democrats believe the best thing for Hillary to do is to work at getting under Donald’s notoriously thin skin in an effort for the country to see his lack of self control. Of course, Mr. Trump certainly is capable of bringing up Hillary’s credibility shortcomings, of which there is plenty of material available. All in all, I think the television networks will be pleased with the viewing audience, but should include a brief disclaimer to make sure each person has a paper bag available when watching, kind of like on an airplane. You know, just in case either candidate says something which makes you want to throw up. I suspect the person who displays more of Mr. Carnegie’s excellent wisdom probably will have the upper hand. However it turns out, I hope you enjoy it.
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