George Chamberlin's Money in the Morning

September 17, 2014

What, me worry? A few folks out there may remember the comment that appeared with the picture of Alfred E. Newman on the cover of each issue of Mad magazine. Yesterday’s rally of 101 points on the Dow industrials sort of fit that description. After weeks and weeks of media frenzy about what will happen if the Fed decides to unveil its plan for raising short-term interest rates -- most analysts predict financial calamity -- investors decided to just ignore the hype and put money to work in stocks. It's pretty simple: Without any serious threat to inflation, the Fed would be hard-pressed to push up rates and risk cracking a still-fragile economic recovery.

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Speaking of inflation, I mentioned in my column yesterday that I would not be surprised to see the consumer price index for August show an actual decline. Most "experts" had been predicting a small increase. Well, turns out the cost of living last month declined 0.2 percent, the result of a 2.6 percent drop in gasoline prices. Over the past 12 months, the CPI has increased just 1.7 percent. You can bet Janet Yellen and the rest of the Fed team will be debating these numbers and how they will affect the decision of raising rates.

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The Fed announcement today is scheduled for 11 a.m. Pacific time and will be followed a half-hour later by a news conference with Yellen.

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The confidence of America's homebuilders rose in September for the fourth consecutive month and pushed an index from the National Association of Home Builders to its highest level since November 2005. But things could be better. "While a firming job market is helping to unleash pent-up demand for new homes and contributing to a gradual, upward trend in builder confidence, we are still not seeing much activity from first-time home buyers," NAHB chief economist David Crowe said. On Thursday morning there will be a report from the Department of Commerce on new home construction activity this month which will show if rising confidence results in increased building activity.

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Boeing and Space Exploration Technologies -- Elon Musk's company -- were awarded contracts from NASA yesterday to develop, test and fly U.S. astronauts back and forth to the International Space Station. Since the end the space shuttle program a couple of years ago, the U.S. has been using the Russian space program to take astronauts to the ISS. Seems wrong, huh? If all goes well, the commercial space program will kick into use in 2017. The contracts for "Launch America" are worth an estimated $7 billion.

Stores within stores. J.C. Penney Co. has been a leader in bringing other companies into its stores and dedicating floor space for their products. It has had some success with Polo Ralph Lauren, Izod, and other clothing retailers. Now, Toys "R" Us has announced it will allow Claire's to set up shop in some of its stores, offering everything from ear-piercing services to products for preteen girls -- products that do not conflict with existing lines at the stores.

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Those Girls Scouts sure know how to brand a successful product. They announced today a licensing agreement with Nestle to sell bottled Nesquik drinks flavored with two popular cookies, Thin Mints and Caramel Coconut. You could pretty much combine Thin Mints with just about anything and, in my opinion, it would work.

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George Chamberlin's Money in the Morning

What, me worry? A few folks out there may remember the comment that appeared with the picture of Alfred E. Newman on the cover of each issue of Mad magazine. Yesterday’s rally of 101 points on the Dow industrials sort of fit that description. After weeks and weeks of media frenzy about what will happen if the Fed decides to unveil its plan for raising short-term interest rates -- most analysts predict financial calamity -- investors decided to just ignore the hype and put money to work in stocks. It's pretty simple: Without any serious threat to inflation, the Fed would be hard-pressed to push up rates and risk cracking a still-fragile economic recovery.

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Video Interviews

Manpower's Trevor Blair on helping veterans transition to civilian workforce

Aug. 14, 2014 -- George Chamberlin discusses veterans in the workplace with Trevor Blair, workforce development manager for Manpower, who explains the firm's military transition support project.

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