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| | | Frankenstorm | | | First and foremost, my thoughts are with the people on the East Coast and all who have been affected by Sandy. With the US equity markets and the correlated indexes closed on Monday and again today, we await Wednesday to see the impact of the storm and how the markets react after the first weather closure in 27 years.
Unfortunately, signs point lower as we got more bad data Monday. The US consumer is no shape to handle the economic fallout of the storm, or really any unexpected expenditure, for that matter. Monday’s personal income and spending report for the month of September showed troubling signs that many American’s have dipped dangerously into their savings. While Personal Income rose at the expected pace of 0.4%, spending in the last month came well above expectations of 0.6%, printing at 0.8%, which meant that on a net basis, consumers, always hopeful, outspent themselves by a margin of 0.4%.
This meant that the savings rate declined from 3.7% in August to a tiny 3.3% in September. This was the lowest Savings print in 2012, and higher only compared to last November's 3.2%, which in turn was the lowest point since the start of the second great depression.
The consumer was since mid-2010 was continuing to spend more of his income (and therefore saving less) – but in 2012 this trend reversed. In the last two months, however, this trend appears to be again changing again to the consumer spending more of its income.
What does that mean? The US consumer is tapped out. They can ill afford any sort of unexpected economic event considering that being uninsured, underinsured, or unemployed is all too common.
Combine this with the “Frankenstorm” that has just hit the East Coast and it’s not a pretty picture.
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Speaking about this past weekend's Trading Advantage Live Event:
"This weekend was GREAT!!! It was such a pleasure getting to meet everyone with Trading Advantage and build on a strong relationship. It really helped to reinforce the decision I made to get involved with this company! Chris Gardner was amazing! It was very nice to see the direction that Trading Advantage is going and the valuable courses that you guys have been working on!!!" | | | | | | NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial. | | | |  | | |  | | | | Volatility Commentary | | | | | | |  | | | | Currency Spotlight | | | | The pain in Spain will delay the fiscal train. In Madrid, expectations are growing for Spain to miss the required EU deficit targets for the previous aid it received.
September retail sales collapsed 11% on the year. Bank of Spain Deputy Governor Fernando Restoy outlined plans for a bad bank to purchase troubled assets from default bound lenders. While Spain delays in requesting its bailout, the euro is losing momentum. Tomorrow, the Spanish economy will most likely contract for a fifth consecutive quarter.
Spain is also expected to have the required 20 billion euros it owes this week in bond redemptions. The forex market will not see a formal request for aid. The next key moment in Spanish debt will come in January when a 19 billion euro payment is due. Euro weakness may persist and will accelerate with any additional risk off global events.
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