Eighteen years ago on December 5th Allen Greenspan shook up the equity markets by questioning the value of stocks.
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On December 5th, 1996 Greenspan gave a televised speech titled "The challenge of central banking in a democratic society." In that speech he posed the following question.
Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?
The Japanese market was open during the speech and it immediately dropped -3% and markets around the world followed suit. Greenspan wrote in his 2008 book that the phrase came to him while he was in the bathtub thinking about his upcoming speech. The phrase was later used as the title of Robert Shiller's March 2000 book "Irrational Exuberance" making several arguments that the equity markets were very overvalued. The Nasdaq market crash occurred within days of the book's release.
Fortunately our markets are not irrationally overvalued today but there was some serious acrophobia on Friday. The closer the Dow got to 18,000 the weaker the breadth became. Eventually enough traders began taking profits and the Dow's ascent ended at 17,991. The profit taking was limited and the Dow, S&P, Nasdaq Composite and Russell 2000 all closed with gains. The Nasdaq 100 ended slightly lower after a downgrade of Google (GOOGL) weighed on the big caps.
The big news of the day was not the Google downgrade. The Nonfarm Payroll report stole all the headlines and deservedly so. The report surprised everyone with +321,000 new jobs created in November. This was significantly higher than the +228,000 analysts expected. In addition the October gains were revised higher from 214,000 to 243,000 and September was revised up from 256,000 to 271,000. This brings the three month average up to 278,000 and the trailing 12 month average to 228,000.
This was a huge number and the market should have cratered on expectations for Fed action sooner rather than later. However, cooler heads prevailed because one month does not make a trend. We have to discount the three-month average because it contains all the temporary hires for the holiday season. The 12-month average at 228,000 is right in line with what everyone expects to see in the future. However, if December and January jobs come in higher than expected then the Fed will not be far behind. We have to get out of Q4 before the numbers have any real validity. The Q4 period has monster seasonal adjustments that can severely distort the headline number if they are wrong.
For instance the separate Household survey only showed a gain of +4,000 jobs. The ADP Employment on Wednesday only showed a gain of +208,000 jobs. We saw three different numbers over the last three days and there is a spread of 317,000 jobs between the high and the low numbers. Which one is correct? We will not know the answer for three months until the final revisions are in but I would bet on the ADP number at +208,000 as the real pace of job growth.
The commonly quoted U3 unemployment rate held at 5.8% with the U6 unemployment rate declining slightly from 11.5% to 11.4%.
More than 69,000 workers dropped out of the labor force and the total unemployed rose by +115,000. The U.S. population rose +187,000. The labor force participation rate was flat at 62.8%.
Involuntary part-time workers declined by -177,000, which is really positive. Those are people who were forced to take part-time because a full time job was not available. Voluntary part-time workers rose by +235,000. Chalk that up to seasonal holiday workers.
Average hourly earnings rose +0.37% and the fastest pace since February. The average workweek rose slightly to 34.6 hours.
If this was an accurate dataset it suggests the U.S. economy is shifting gears to a faster rate of growth. I personally believed the number was distorted by the seasonal adjustments but research suggests otherwise. According to the BLS tables the unadjusted job gains were +471,000. That means the seasonal adjustment only removed -176,000 jobs as seasonal temporary workers. They take the average over the last five years to develop their seasonal adjustments. This suggests the hiring pace, at least for the holiday months, has definitely surged.
The market took the headline number in stride and futures actually went negative for a few minutes before the open but when the bell rang the market gapped higher. Either nobody believed the number or they believe the rest of the world is still in such bad shape the Fed can't possibly raise rates until late in 2015.
This may have actually been a case where good news was actually good news and not a reason to run for cover.
On the flip side Factory Orders for October declined -0.7% after a -0.5% decline in September and a -10.0% decline in August. The internals were not pretty. Nondurable goods orders declined -1.5% and nondefense capital goods ex-aircraft declined -1.6%. Durable goods rose only +0.3%. The only real highlight was a +10.8% spike in defense orders. That was probably the 5,000 Hellfire missiles ordered for Iraq. Defense orders are very volatile because of the dollar amounts and random nature of the orders.
This was not a good report and does not suggest the economy is accelerating. The strong dollar is making it difficult for buyers overseas. This makes U.S. goods cost more and will end up hurting U.S. corporations.
The economic calendar for next week is lackluster. There are several important reports but none of them are market movers. The big event, especially in light of the payroll numbers, is the FOMC meeting the following week. What they have to say about employment in the post meeting statement will be market moving.
After the close on Friday Gentex Corp (GNTX) announced a 2:1 split for January 2nd. Hain Celestial is holding its gains after the prior week's 2:1 split announcement. Both could give us a decent split run. GNTX was already at a new high and it gapped up about $1 to $38.67 in afterhours.
Apple (AAPL) rumors were swirling on Friday of two new iPhone 6 models for 2015. The first is a 4 inch compact mini dubbed the 6C. There are no close competitors and the compact form is a better fit for business men. This is expected in March/April. Apparently there are a lot of iPhone 6 complaints because there is not a smaller version. Many users were not happy about upgrading to the larger format. The iPhone 5 had a 4 inch screen, iPhone 6 a 4.7 inch and 5.5 inch for the Plus. The Chinese website Feng.com quoted suppliers claiming Apple was sourcing parts for the 6C.
The second rumor was an upgrade to the base memory in the iPhone 6 from 16gb to 32gb. This would increase demand for the phone alongside the release of the Apple Watch. More memory would make the phone faster in interfacing with the apps on the Watch.
On Cyber Monday 78% of mobile shopping occurred on Apple devices, down from 84.1% on the same day in 2013. Android's share rose from 15.4% to 21.6%.
UBS is predicting Apple could sell 70.9 million iPhones in Q4 compared to the Wall Street consensus of 64 million. UBS said if Apple does not reach that number it will not be due to a lack of demand but a lack of parts. If Apple is supply constrained UBS expects only 67 million phones sold. The analyst said demand for the 6 plus is accelerating and Apple may be forced to shift production from the regular version to boost the plus version. Demand in China is especially strong. Currently demand is 3-1 for the regular phone over the Plus but the ratio is moving towards the Plus.
UBS raised their target to $125 and Cannacord is targeting $135 but Alex Gauna at JMP Securities has them beat. Alex raised his target to $150 saying investors should buy ahead of the Q4 earnings in January and the China Mobile 4G subscriber update in a couple of weeks. That will tell investors how fast iPhone 6 sales are ramping up in China.
Apple shares traded down last week after Pacific Crest recommended selling Apple because the iPhone 6 expectations were already in the stock. Pacific Crest is expecting sales of only 63 million units because of production shortages. Morgan Stanley also recommending selling Apple shares from a 4% weighting to 3% in their model portfolio.
Apple was also hit by the unusual trading on Monday where 6.7 million shares were sold in one minute at 9:51 am. Later a high frequency trading firm said they saw program trading in 300 stocks that started at 9:50. Alibaba (BABA) also fell sharply (-1.4%) at the same time and the SPY traded 1.5 million shares in the same minute.
Lastly Apple has been in court all week in a $1 billion class action suit over iPod music. When Apple updated the iPod in one of the earlier versions all songs downloaded from other sources quit working because of Apple's new licensing issues as well as technology issues. Steve Jobs said Real Networks hacked the iPod to figure out how to play music that was not uploaded from the iTunes store. Apple fixed the hack and all that third party music quit working. There were 3 plaintiffs and one dropped out. Apple checked the serial numbers on the three iPods in question and found that at least one and possibly all three were bought after the complaint period. If the remaining two plaintiffs can't come up with receipts that are acceptable with the court the 6 year old case could be thrown out.
Whatever the reason for the stock decline I believe it is a buying opportunity. They can't make phones fast enough and it looks like demand will last well into 2015. That will boost earnings over the $7.69 consensus and they may have some new products in the mix that are not currently in the revenue/earnings calculations.
Google (GOOGL) is not having a good month. Shares have declined -$20 for the week with a -14.50 drop on Friday. Bank of America cut Google from buy to neutral and lowered the price target from $600 to $580. Google shares closed at $528. Bank America Merrill Lynch (BAML) cut earnings estimates to $33.81 and below consensus at $35.77. They blamed slowing growth in search at 8-9% in the USA. BAML also said capex could rise +50% and hiring +22%.
BAML also pointed to the increasing regulatory risk. The EU is considering whether to breakup or constrain Google in Europe on antitrust issues.
Bing has captured 18% of market share in search and accelerating. Apple is widely expected to dump Google and move to Bing when the contract agreement with Google ends in the first half of 2015. Apple is widely believed to be moving away from giving any business to their Android competitor. Facebook is also improving its search capabilities and capturing search advertisers that previously ran on Google.
Earlier in the week Google admitted that 56% of the ads it serves are not seen by a human. They were either served too low on a page to be seen or were served up to search robots scanning pages for indexes. Analysts believe "non-viewable ads" will be worthless in 2015. The technology is moving fast enough that advertisers will be able to demand view ability on their advertising purchases. The move towards full disclosure in the ad world could be painful for Google in 2015. Dan Niles at AlphaOne said Google was his number one short idea.
Northrop Grumman (NOC), a current Option Investor play, got a major boost on Friday. Bank America reiterated a neutral rating with a $150 price target. That did not get much play because at the same time Goldman Sachs upgraded the stock to its "conviction buy" list and raised the price target to $165. It came after Northrop announced after the close on Thursday a new $3 billion stock repurchase program. Goldman believes Northrop's position as a major subcontractor on the $1.5 trillion Joint Strike Fighter program will continue to power Northrop's profitability. Earnings are expected to increase from $8.34 this year to $9.48 in 2015. This is up from $7.80 in 2013.
Dow components Goldman Sachs (GS) and Visa (V) were big contributors to the Dow's gains on Friday with a +3.50 spurt by Goldman and +2.21 gain by Visa. That amounted to about 45 points of the Dow's gain. Since July 3rd when the Dow hit 17,000 Visa has added +301 points to the Dow, Goldman +166.9 points, Nike +134.0, Home Depot +113, United Health +109 and 3M +108 points. If Apple had been in the Dow it would have added 166 points. In that same period IBM subtracted -162, Chevron -130, Caterpillar -79, Exxon -56, MCD, UTX and AXP about -25 each. The Dow steering committee has to be careful on which stocks they include in the index because the volatility of the price weighted index can increase sharply if they add a rocket stock to the mix.
The S&P squeezed out another new high at 2,075, one point over Wednesday's high. Considering where we started the week with a dip to 2,050 we really can't complain. I would be perfectly happy with 10-15 point gains per week for the rest of the year.
The VIX spiked to nearly 15 on Monday but fell to 11.82 at Friday's close. This is back at complacency levels indicating buyers are in control and there is no fear of an imminent meltdown. This could last for a couple more weeks as fund managers chase prices into the end of December.
There is a warning on the horizon. The high yield ETF (HYG) has sold off -4% since October. Since 2007 the HYG has sold off -5% in 30 trading days only 10 times. On 9 of those declines the S&P sold off as well with an average drop of -9%. Only once did the S&P post a gain and it was only +0.4%. That is some pretty bad odds but historical repeats are never guaranteed. The HYG still has -1% to fall to equal the prior declines but we should be seeing some weakness in the S&P if it was going to follow the HYG lower and there is no weakness. Let's keep our fingers crossed.
Brett Steenbarger, author of "The Psychology of Trading" plus other books, pointed out on Thursday that the number of stocks making new three-month lows actually outnumbered those making new highs at a time when the market was setting new highs. This broad divergence is historically negative for the weeks that follow. However, I believe you can't just look at numbers in a vacuum. You have to understand why it is happening. I think we are seeing the new lows mostly from the energy sector as a result of the lower oil prices. The low oil prices are actually bullish for future earnings and improving economics. Everybody understands the drop in energy stocks and that is why the markets are still trading at the highs. This is just my theory.
Secondly, Brett pointed out the correlation between stocks and sectors are at the lowest since 2004. Correlation trends tend to rise during market declines and then remain at the highs on the eventual rebounds. As the rebound crests the correlation begins to fade as weak sectors begin to sell off and break away from the crowd. As those sectors peel off from the remaining strong sectors the correlation widens and the market becomes unstable. Brett says we are seeing "massive divergences, thanks to the relative weakness among raw materials (XLB), energy stocks (XLE), regional banks (KRE) and small cap (IJR) and midcap (MDY) stocks."
Trimtabs.com tracks the money flows into ETFs and they claim we are at extremes not seen since just before the 2008 market crash. Inflows into ETFs for the month ending November 26th totaled $42.9 billion and a level not seen since December 2007. That is also five-times the year to date average. Flows at Pre-crash Highs
Obviously we have to look at the fundamentals as well as technicals and we have to take into account the investing calendar. With December the strongest month of the year and economic conditions improving with corporate earnings setting new highs there are good reasons for being bullish for the next several weeks. Once into January we should worry as portfolio managers begin to restructure portfolios for 2015. Profits taken in January can be invested all year before taxes have to be paid.
The S&P is still making new highs thanks to the big cap stocks and finally the financials, which participated last week to offset the energy stocks. If oil were to firm and the energy sector rebound we could have a decent rally but oil is still looking week.
I see resistance at 2,080 and 2,100 and support at 2,065 and 2,050.
The Dow finally closed well above the twin levels of uptrend resistance and should be free to move higher. Those resistance levels should not be support. Again, if Exxon and Chevron were to turn positive at the same time as the financials the Dow could stretch its gains. We are definitely in blue sky territory and definitely overbought. That can continue thanks to the consolidation at the highs the prior week.
Dow 18,000 seems to be the price magnet and there may be a sell the news event when it is hit. The selling that appeared on Friday when the Dow reached 17,990 is a clue as to what may lie ahead. Support is well below at 17,800 and that 18,000 level should be resistance.
The Nasdaq Composite crashed back to support at 4,725 on Monday and then struggled higher the rest of the week to close at 4,780. The gains were steady with the exception of the hiccup on Thursday. The November high close was 4,792.
The problem is the big caps dragging down the index. The Nasdaq 100 ($NDX) lost -26 points for the week because of big cap declines in stocks like Google and Apple while the Composite lost -11 points.
Fortunately the downgrades have probably run their course. With the positive jobs numbers and nothing material on the economic calendar for next week we should see fund managers buy the dips on those big cap declines. The keyword there was "should."
Support on the Nasdaq remains 4,725 and resistance is 4,790 and 4,800.
The Russell 2000 actually gained ground last week but at +9 points it was not much. Just being positive is a help because a negative Russell is a sentiment drag on the rest of the indexes. We need it to climb back over 1,190 and rekindle some animal spirits now that November is over. It is time for fund managers to start adding some small caps in advance of the Santa Claus rally, which is the last 5 days of December and first two days of January.
Support is 1,170, resistance 1,190.
I expect the market to be positive this week. There is only one Fed speaker on tap because they go quiet the week before a FOMC meeting. That means we should escape any comments about interest rate hikes. The economic calendar is weak and that also removes potential trouble spots.
The positive jobs report, even if the numbers are confusing, should provide a positive sentiment boost. Just remember that the market does not need a reason to correct. Sometimes it just happens. However, the next two weeks are historically bullish and a lot of fund managers are still trailing their benchmarks. This means bonuses will be minimal and they only have a couple weeks to redeem themselves.
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Sunday is the anniversary of the attack on Pearl Harbor that triggered our entry into World War II. Starting at 7:48 AM the base was attacked by 353 Japanese fighter planes launched from six aircraft carriers. A total of 2,403 Americans were killed, less than in the World Trade Center attack, and 1,178 were wounded. Only 29 Japanese aircraft were shot down. By attacking Pearl Harbor the Japanese would later say they woke the sleeping bear. For the U.S. the war began in December 1941 and ended on September 2nd, 1945.
During those four years the American industrial complex was mobilized to design and build over 1,000 ships, thousands of planes and tanks and munitions of all shapes and sizes and get all of it overseas to the battlefield. There was no OSHA or EPA to retard the process. If the U.S. was attacked today we do not have the capability to build more than 1,000 ships and thousands of tanks and planes in just a couple years. Everything is more complex today and a lot of our materials and components come from overseas. Despite 7 decades of "progress" we don't have the same manufacturing capabilities today as we had back then. Between 50 and 85 million people died in the war. If there is a WW III the number of dead could be significantly higher.
We have spent more money in Iraq and Afghanistan than was spent in WW II and the fighting continues. This is the difference between planning to win a war at all costs and fighting a war waged by politicians and political correctness. We could have wiped out ISIS by now if we wanted to but that does not fit the current political agenda.
On Black Friday the national debt exceeded $18 trillion for the first time. This amounts to $56,369 for every U.S. citizen or $153,729 for each taxpayer. Current tax revenue is about $3.1 trillion and our GDP is about $17.2 trillion. Six years ago the national debt was $10.6 trillion. It is expected to rise by $1.3 trillion a year over the next two years and exceed $20 trillion by the end of 2016 and $25 trillion by 2020.
The national debt is different than the total debt. The national debt is the amount of loans we have outstanding in the form of treasury bonds and notes. The nation has an additional $115.7 trillion in "unfunded liabilities" that are not included in the debt totals. These are payments that will come due for Social Security, Medicare, etc.
The debt clock is ticking and the debt bomb will eventually do more damage to the U.S. than the last world war. Once global investors realize that the U.S. can't ever pay its debt they will demand more interest to counteract the additional risk. What is the magic number? $20 trillion, $25 trillion? There is a number that will trigger the debt bomb and it is not that far into our future.
Once the Fed begins to "normalize" interest rates we could see the problem begin. Currently, because of the low interest rates the interest on our debt is about $450 billion a year. We just sell an extra $450 billion a year in treasuries to pay it. Basically we get another cash advance on our credit card to pay the current bill. Once interest rates begin to rise within 2 years the interest on our debt will rise to $1 trillion a year. Remember, we only take in $3.1 trillion in taxes. This will be the straw that breaks our economic back by accelerating our total debt by as much as $2 trillion a year. Global investors will take note and it will get ugly.
Just to emphasize this fact the U.S. Treasury sold $1.04 trillion in new debt since October 1st, just to raise money to pay the interest and principal on maturing securities. Over the same period the Treasury took in $341.6 billion in revenues.
Treasury Secretary Jack Lew told the Senate Finance Committee the U.S. "rolls over about $100 billion in U.S. bills every week. If U.S. debt holders decided they wanted to be repaid instead of continuing to roll over their investments, we could dissipate our entire cash balance. There is no plan other than continuing to raise the debt limit that permits us to meet all our obligations." You heard it from the man in charge. There is no plan to stop the never ending debt acceleration. Don't forget the Fed owns more than $4 trillion of the debt. The government owes more than $5 trillion to entities like the Social Security Trust Fund where it borrowed the funds on deposit and left the fund with a note instead.
Only $1.54 trillion is in 30-year treasuries. The rest is in short term notes that mature in 2,3,5,7 and 10 years with an average interest rate of 1.807%. The government can't afford to pay the higher interest rates of longer term securities even at the current record low rates. This means the interest on those short term securities can escalate violently if the debt market suddenly turned against the USA. This means the fuse on the debt bomb is very short. Once it is lit the change in conditions can occur very rapidly. It could be one of the fastest economic collapses on record.
While everyone was worrying about the Ferguson and Staten Island events last week China became the biggest economy on the planet. The U.S. dropped into the number 2 position. This is a problem of our own creation. We have the highest corporate taxes in the world and the most regulations that stifle growth and job creation. We have the best minds in the world and the best entrepreneurial spirit but the regulations, negative legal system and high taxes have pushed us into the number 2 position.
The U.S. is under outright cyber attack by numerous state-sponsored agencies and we are doing nothing about it. It was reported last week that Iranian hackers have infiltrated the U.S. critical infrastructure systems, some of which control the country's water, gas and transit networks and airport security networks. The administration is ignoring the attacks and instead giving Iran another 7 month extension on its nuclear program and talking to them about helping fight ISIS in Iraq.
At the same time China is hacking our satellite networks that affect aviation, shipping and hundreds of other critical uses. A couple days earlier they hacked into the U.S. Postal Service and accessed data on 800,000 employees. A cyber security expert said Chinese are hacking into corporate networks with "reckless abandon" because they are convinced "there are no consequences to getting caught."
China's latest stealth fighter, the J-31, is believed to be entirely based on stolen top secret specifications of the F-35 Joint strike Fighter being built by Lockheed Martin.
Russian hackers have been invading U.S. services networks and security systems for years. The Dept of Homeland Defense said in November that a Russian state-backed effort had compromised "numerous critical components of U.S. industries." In October a Russian state-sponsored cyber attack successfully breached the White House computer network.
Numerous intrusions into the U.S. electrical grid infrastructure have been carried out by state-sponsored teams from Russia and China. One set of Russian code has been found in more than 1,100 grid locations. It would be obscenely naive to believe that neither of these rogue nations were not capable of shutting down our electric grid at will.
The U.S. consumer is saving $630 million a day on lower gasoline prices compared to the $3.31 average high in June. If prices were to stay this low for a year that would amount to a $230 billion windfall and a monster stimulus program for the U.S. economy. On Friday gas prices fell under $2 in Oklahoma and within the next week that should spread to several other coastal states. On Friday the national average was $2.75 and AAA expects it to drop another 10-20 cents by the end of the month. I paid $2.32 with a loyalty card in Denver on Saturday.
At the current price of oil OPEC members could lose $590 billion in revenue. Global producers in total will see a -$1.5 trillion drop in revenue. The U.S., Japan, China and India will benefit the most. Saudi Arabia, Russia, Iraq, Venezuela and Nigeria will suffer the most. The London based Capital Economics said the drop in fuel prices could boost the global GDP by 1% in 2015. Global demand could increase up to 1.0 mbpd over the prior forecast as a result of the lower fuel prices. U.S. gasoline demand has increased +429,000 bpd to 9.43 mbpd or nearly +5% over just the last four weeks as a result of the lower prices. There are already rumors that OPEC will call an emergency meeting for the end of January to again discuss production cuts. At the last meeting 8 countries were for cutting production and 4 countries against a cut. Saudi Arabia, whose vote counts the most, was against a cut.
Cyber Monday was a blowout for some companies. Walmart said it was the "biggest online day in its history." Thanksgiving was the second largest day in their history. Even more interesting they said 70% of traffic to their site came from mobile devices. Walmart was offering same day in store pickup on most items. That means you could order online at the sale price and not have to fight the crowds. Just walk in and pick it up whenever it was convenient. The biggest online sellers were the iPad mini 16gb, PS4 500Gb console, Nintendo 3DS XL handheld, Xbox One Assassins Creed Unity Bundle, LG 49" LED HDTV and LEGO Giant Creative Tower with 1,600 pieces.
The Pied Piper of the ECB again promised more stimulus but failed to deliver. Mario Draghi pledged to assess the need for more stimulus early in 2015 despite sharply lower forecasts for economic activity. This is like saying the house is really burning now but let's wait another week or two before trying to put it out. It may get better by itself.
Jim Cramer of the TheStreet.com was called out by a shareholder last week. J. Carlo Cannell's hedge fund is the second largest shareholder in TheStreet.com (TST) at 9%. He sent a letter to the company complaining that Jim Cramer spent far too much time working for CNBC and not enough time working for TST. "You are simultaneously an employee of CNBC and a director, major shareholder and employee of TST. To which entity do you ascribe your greater allegiance?"
Cannell urged Cramer to resolve the conflict by either pursuing a sale of TheStreet.com or quit CNBC. "Resign from CNBC and align your considerable energy and talents to helping your fellow shareholders crawl back from Hades."
He also suggested Cramer take a pay cut as part of a full-time return to TST complaining that his annual compensation is almost 5% of the company's market value. "Why in the very worst years for TST shareholders must you pay yourself more than $3.5 million per year? When you lie on your deathbed how will you reflect upon your legacy?" He said Cramer has "enjoyed considerable nonpecuniary compensation such as perfumed sedan driver(s) and assorted assistants who spray ionized lavender water on your barren cranium." Company filings show Cramer is guaranteed $2.5 million a year in royalties, $300,000 in licensing as well as stock awards. In 2013 TST lost -$3.8 million, which was better than the $13 million loss in 2012. In 2013 another shareholder, Spear Point LLC, urged the company to put itself up for sale. According to Bloomberg Spear Point no longer has a stake in TST today.
ISIS has just claimed on Twitter that they have a dirty bomb. ISIS stole radioactive material from the Mosul University and they claim they have already weaponized it and have plans to use it. Iraq's UN ambassador said in July that the nuclear material had been stolen and the UN Secretary General warned the substance can be used to create a weapon of mass destruction. If the bomb was used in a city like London it would be terribly disruptive even more so than a regular bomb. With a regular bomb you clean up the wreckage and rebuild. With a major dirty bomb the city may have to close off the area for years while cleanup occurs.
The toilet seat in a supermarket bathroom may be cleaner than a shopping cart handle. A University of Arizona survey swabbed 85 grocery carts and found that nearly 75% contained some type of fecal bacteria. More than 50% contained E. Coli bacteria. Studies have also found that children are at increased risk of salmonella infections if they ride in a grocery cart.
The largest white truffle in the world goes up for auction this weekend. The 4.16 pound truffle should fetch a record price. This one is twice the size of the existing record holder that sold for $417,200 in 2010. White truffles are rare and can only be found three months of the year in Italy. The finder has already been offered more than $1 million from a buyer in China. Not a bad find while he was out training his new dog. Truffle hunters train dogs to sniff out the buried truffles. You know you have too much money when you can pay $1 million for a hunk of fungus.
Sam Eisenstadt, former research director at Value Line, is predicting the S&P will reach 2,300 by the end of May. That is an 11% gain from here. Eisenstadt is known for his accurate predictions. Back in June with the S&P at 1,924 he predicted the S&P would reach 2,100 in early December. With the S&P at 2,079 on Friday he has another winning prediction he can add to his portfolio. He retired in 2009 after 63 years at Value Line but he still follows the market. He has a proprietary model developed over 7 decades of research.
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