Greetings!
Spain's unemployment rate rose to 26 percent at the end of 2012, up from 25 percent in the previous quarter. As Europe's safety nets strain under the weight of austerity measures, more social and political unrest could arise. Sometimes, when we look at America's debt, we are inclined to worry and see our own future in Spain's. We are vastly more capable than that; let's look at an allegory before the economics. (7)
A few years ago we saw a futurist presentation which was so optimistic, we were dumbstruck with skepticism. Ray Kurzweil held in his hand a phone into which he spoke English. The phone instantly translated what he said to a person in Germany. That person spoke back to the phone in German, and the phone spoke to him in English. It was fantastic technology! A few years later, Apple came out with Siri. And, just recently, Google hired Mr. Kurzweil as their Chief Scientist.
What will come next? Who knows! But the productivity from our creativity alone may be enough to thwart the dangers of America's money malaise.
The key difference between Spain and America is the currency. America controls its currency and Spain, of course, cannot. If Spain still had its own currency, they could issue more of it. The currency would be worth less than other countries' money. Spain's labor costs would be lower than the rest of the world. Companies would take advantage of cheap labor, and Spain's unemployment would decrease.
America is different from Spain because we have our own currency. Next week, we'll look at the threats to the US dollar and address the increasing fear of inflation. |
| Weekly Economic Update | |
HOMEBUYING DECREASES IN DECEMBER Last month, existing home sales slumped 1.0% and new home sales tumbled 7.3%. Year-over-year numbers, however, remain hugely positive. Residential resales improved 12.8% in 2012, with December's median single-family home price up 11.5% from a year before to $180,300. New home sales rose 19.9% last year, representing the first annual increase since 2005 and the best year since 1983. (1,2)
HOUSE VOTES TO EXTEND DEBT CEILING The House of Representatives voted 285-144 last week to suspend the current limit on federal borrowing through May 18, in a measure demanding that both houses of Congress approve a budget by April 15 or work for free. The Senate is expected to pass the bill this week, a formality en route to President Obama's signature. (3)
LEADING INDEX RISES 0.5%
The gain in the Conference Board's Index of Leading Economic Indicators matched the expectations of analysts polled by Dow Jones Newswires. The 0.2% November retreat in the index was revised upward to show no change. (4)
S&P 500 SETTLES ABOVE 1,500
Rising 0.54% in five days, the index ended the week at 1,502.96, its highest close since December 2007. Friday afternoon, the blue chips were on track for their best January since 1989: the Dow rose 0.51% on the week to settle at 13,895.98 Friday. The NASDAQ went +0.62% last week to close Friday at 3,149.71. Oil ended the week at $95.88, gold at $1,656.60. (5,6) |
| Market Summary |
|
% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+6.04 |
+8.93 |
+2.77 | |
NASDAQ |
+4.31 |
+11.76 |
+7.08 | |
S&P 500 |
+5.38 |
+13.34 |
+2.59 |
(Source: cnbc.com, usatoday.com, treasury.gov, treasurydirect.gov -01/25/13). Past performance is no guarantee of future results. Indices are unmanaged, and investors cannot invest in them directly. |
|
Create a beautiful week!
Karl Frank, MBA, MSF
Certified Financial Planner (R)
A & I Financial Services LLC
303.690.5070
Citations:
1 - www.usatoday.com/story/money/business/2013/01/22/
existing-home-sales-december/1854563/ [1/22/13]
2 - www.sfgate.com/business/bloomberg/article/New-Home-
Sales-Decline-Blemishes-Best-Year-Since-4223610.php [1/25/13]
3 - thehill.com/blogs/floor-action/house/278835-house-passes-no-budget-no-pay-sends-to-the-senate [1/23/13]
4 - www.nasdaq.com/article/us-conference-board-december-
leading-index-rises-05-as-expected-20130124-00822 [1/24/13]
5 - www.cnbc.com/id/100407825 [1/25/13]
6 - www.nasdaq.com/markets/commodities.aspx [1/25/13]
7 - http://www.eitb.com/en/ as of January 29, 2013
Securities offered through Geneos Wealth Management, Inc., member FINRA/SIPC. Investment advisory services offered through A & I Financial Services LLC, registered investment advisor. |
|
|
|
|
| Words for Thought |
"We are what we repeatedly do; excellence, then, is not an act but a habit."
Aristotle |
|
Riddle of the Week
|
I am gentle enough to soothe the skin, light enough to reflect the sky, yet hard enough to crack rocks. What am I?
Last week's riddle:
You can rearrange the letters in insatiable to make another ten-letter word that starts with the letter b. What is this ten-letter word?
Last week's answer:
Banalities |
|
|
