COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

George Chamberlin's Money in the Morning

Hope that we'll slide down the "fiscal cliff" without too many bumps or bruises sent stocks higher again yesterday. The Dow Industrials were up 115 points, the second consecutive session in a row with triple-digit gains, something that hasn't happened since July. During the past two sessions the Dow has gained 216 points -- 1.64 percent -- bringing the year-to-date increase to a respectable 9.28 percent.

******

The media has once again misread a key economic report out this morning. Saying it is a sign the housing market may be cooling down, analysts are suggesting the Commerce Department report showing new home construction activity in November declined by 3 percent was bad news. However, if they had taken the time to look into the details of the report they would have seen the drop was very explainable. They seemed to forget there was this storm, Superstorm Sandy, that shut down most of the Northeast last month. As a result, construction in the region fell 6.2 percent. Every other region in the country saw activity increase including the West, where housing starts were up 5.9 percent. Compared to November 2011, construction in the Northeast is down 5 percent while housing starts in the West are up 22.2 percent.

******

The U.S. Treasury is getting out of the car business and it is costing taxpayers a ton of money. Actually, several tons. The government will sell 200 million shares of General Motors stock back to the company for $27.50 a share. The remaining 300 million shares the Treasury owns will be sold in the open market starting next month. Here's the bad news: In order for taxpayers to break even on the bailout, the shares would have to sell at $70. So, that's a loss of $43 a share times 500 million shares. You do the math.

******

Here's today's "Bah, humbug" item: BankRate.com is reporting 33 percent of people surveyed say the pending fiscal cliff has caused them to reduce spending over the past 30 days. Sorry, I don't think 33 percent of the people out there have a clue what the fiscal cliff is all about or how it will impact their pocketbook.

******

Despite being all freaky about the fiscal cliff, most Americans are doing a pretty darned good job of paying their bills on time. According to the S&P/Experian consumer credit default indices, a measure of changes in consumer loan defaults, the rate of late payments rose in November to 1.64 percent after hitting a post-recession low of 1.46 percent in September. "This increase in national default rates was solely driven by an increase in the first mortgage default rate. All other loan types -- auto loan, bank card and second mortgage -- posted decreases in their default rates in November," said David Blitzer of S&P.

******

The minimum wage in Mexico is on the rise. The government announced yesterday the hourly minimum wage will increase in 2013 by 3.9 percent to 65 pesos, the equivalent of $5.10 in U.S. dollars. Like here, most workers in Mexico earn more than the minimum wage.

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.

User Response
0 UserComments

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.

Subscribe Today!