"The winners don't make enough to offset the losers."
Meanwhile, over at CNBC…a middle-aged man loses a bet and is sent to Virginia Beach during Hurricane Joaquin to show Americans what an ocean looks like. As you can expect, a lot of cut shots of water tickling the doorframes of vehicles, multiple shots of cars with hazard lights flashing, and plenty of seizure-inducing graphics spin across the screen. The art department loves a hurricane. Will this storm compare to Sandy or Katrina: Break out the charts. Where might landfall be? There are 30 graphics for that…
But the big one is one the economic impact. Charts and charts and charts of how this hurricane might compare financially. Is the storm good or bad for the economy? Well, that depends on your ability to ignore the fact that the storm is destroying assets.
Old Dominion University economist Chip Filer explains that for companies, there are winners and losers. However, Filer explains (rightly) that the net effect of storms like Joaquin is negative, because the companies that do make money (Home Depot for example) can’t offset the losses for others in the tourism, energy and restaurant business. Mike Hixenbaugh should be writing for a bigger audience than he Virginian-Pilot because more Americans than the 156,000 subscribers this daily has need access to rational economic analysis like this.
Meanwhile, at the Street, Ryan Sweet explains how GDP can be positively impacted by a storm like this... Because spending on cleanup is factored into the number, but the destruction is not. And that is the lesson, everyone. For some in academics, the only figures that count are related to creation… not economic loss.
So, if Paul Krugman’s proposed alien invasion did destroy the East Coast, but don’t worry because our GDP figure would rise as we pick up the scraps and rebuild, or something.
“The idea the U.S. economy could power forward while the rest of the world is stalling out, that idea can be put in the garage bin.”
Chris Rupkey, chief financial economist at MUFG, has given up on a rate hike in 2015.
After today’s jobs report, Rupkey said that the Federal Reserve might never raise interest rates.
If you don’t know already, the unemployment rate is cooked. We’re sitting at 5.1%, but the workforce participation rate just fell to its lowest level since 1977. Approximately 94.6 million Americans are not in the workforce. And the number of Americans between the ages of 25-54 who are working is still several percentage points away from employment levels in 2008.
The U.S. economy has a long way to go as we head into year eight of the so-called recovery. The most interesting economic number from today’s jobs report, however, is 14,000. That’s the number of immigrants who gained jobs last month. Meanwhile, “native-born” Americans saw job declines of 262,000. Expect that figure to be on prominent display during the upcoming debates.
“But his disastrous performance illustrates how treacherous the markets have become — even for one of the smartest guys in the room.”
The New York Post wants to let you know that hedge fund superstar David Einhorn is having a worse year than you…
His hedge fund Greenlight Capital is down 17% on the year. Too much time at the poker table?
Bloomberg also profiled several funds that are taking a beating in 2015, and the carnage is starting to mirror the 2008 downturn.
"You would consider it. That doesn’t necessarily mean you would do it.”
A slump in global oil prices has created an environment for merger and acquisition activity around the world? So, should you buy into oil-and-gas takeover targets? Victoria Tait at MyWealth in Australia offers a deep dive into the subject, and speaks with several experts.
It’s a very good exploration into one of the few ways that investors seem to be making money in the low-price environment.
“Some time ago, Mr. Wey’s wife purchased tickets for Mr. Wey, Mrs. Wey and their children to attend a performance of the New York City Ballet at Lincoln Center on the evening of Tuesday, Sept. 29, 2015”
New York Global Group CEO Benjamin Wey is in trouble with the Manhattan court system. He faces 25 years in prison for a charge in securities fraud, a multi-million-dollar sexual harassment suit from a former intern, another charge of money laundering and a very angry spouse who can’t be happy with his infidelity.
But Wey seemed more concerned about his ability to see Swan Lake on Tuesday night.
In an absurd letter from his lawyer to Manhattan federal Judge Alison Nathan, Wey was upset that his ankle bracelet and court-enforced nightly curfew conflicted with an evening at the ballet.
Neither the court, nor did the intern who won an $18-million sexual harassment case against him in July, found this amusing. Hanna Bouvang’s lawyer suggested that he sell the tickets to help fund the millions that she is owed. The details of that case, found here, provide quite a trip down the rabbit hole. (The kicker is after all the harassment, infidelity and name-calling, Wey has the stones to say he made mistakes with the former intern that he fired and defamed, but that “he cared.” At one point he e-mailed her father to say she was sleeping with another man – her boyfriend.)
Here’s the kicker: The judge sided with Wey, and allowed him to attend the final show in the ballet’s weeklong schedule.
Wall Street gossip isn’t really part of the Daily Alpha’s focus, but Wall Street priorities certainly are. When you’re facing decades behind bars for alleged stock manipulation, and you’re already convicted of sexual harassment, why does he receive special treatment?
Ordinary Americans would be sitting behind bars awaiting trial.
That’s all for today…
Check back next week for updates on the hurricane and the global markets’ take on the Federal Reserve.