Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Tuesday, November 13, 2007

News You Can Use

Stocks are rallying hard in the pre-market. Earnings news from Wal-Mart seems to be the driver ...

Wal-Mart Stores 3Q Profit Up 8 Percent BENTONVILLE, Ark. (AP) -- Wal-Mart Stores Inc., the world's largest retailer, said Tuesday its fiscal 2008 third-quarter profit grew 8 percent to top Wall Street expectations on strong international growth and improved performance in its U.S. operations.

My question for Wall Street: Why the hell is this good news? It just means consumers are getting so stressed financially that they're biting the bullet and going to Wal-Mart. That's not a good sign for the economy. I see it as a bad sign.

There is a Wal-Mart near us that I visit every few months -- either because I forget how bad it is or because there is something "Wal-Mart Specific" that I can only buy there. The best way to describe this Wal-Mart is "soul-sucking." No one wants to be there -- not even the people who work there. They'd probably rather be working at Target or Publix.

We'll see how the market likes the Pending Homes Sales data that comes out today. It could be good (better than expectations), it could be bad, and it will probably set the tone for the afternoon. it comes out at 10 am. The market expects a 2% drop, and the prior drop was 6.5%.

In other news ...

The economic costs to the United States of the wars in Iraq and Afghanistan so far total approximately $1.5 trillion, according to a new study by congressional Democrats that estimates the conflicts' "hidden costs"-- including higher oil prices, the expense of treating wounded veterans and interest payments on the money borrowed to pay for the wars.

Gee, I remember when Deputy Defense Secretary Paul Wolfowitz dismissed estimates of $60 to $65 billion as the cost of the war as too high. The war would pay for itself, he said. Obviously, he's the kind of fiscal genius you want to put in charge of the World Bank.

The official total cost of the Iraq war is $611.5 billion. From the Boston Globe, here's what that would buy you ...

• "U.S. drivers consume approximately 384.7 million gallons of gasoline a day. Retail prices averaged $3.00 a gallon in early November. Breaking it down, $611 billion could buy gasoline for everybody in the United States, for about 530 days."

• "In fiscal 2008, Medicare benefits will total $454 billion, according to a Heritage Foundation summary. The $611 billion in war costs is 17 times the amount vetoed by the president for a $35 billion health care benefit program for poor children."

• "According to World Bank estimates, $54 billion a year would eliminate starvation and malnutrition globally by 2015, while $30 billion would provide a year of primary education for every child on earth. At the upper range of those estimates, the $611 billion cost of the war could have fed and educated the world's poor for seven years."

My choice would be to not spend it at all and pay down the debt. Fat chance!

Treasury Bond Anxiety of Runaway Inflation Spurred by Bush Dollar Collapse For the first time in 18 months, the U.S. government bond market is showing growing anxiety that the plummeting dollar will result in runaway inflation.

China's Inflation Accelerates to Decade High of 6.5 Percent on Food Prices Inflation in China, the world's fastest-growing major economy, accelerated in October as food prices jumped, increasing pressure on the central bank to raise interest rates for a sixth time this year.

Lundin Mining Profit Rises After Buyouts Boost Output of Gold and Copper Lundin Mining Corp., which has bought more than C$2 billion ($2.1 billion) in base-metal assets this year, said third-quarter profit rose fourfold after the acquisitions increased output.

IEA Reduces Global Oil for 2008 Demand Forecast as Prices Curb Consumption The International Energy Agency, the adviser to 26 oil-consuming nations, cut its forecast for global demand for the rest of this year and 2008 as prices near $100 a barrel slow consumption in the U.S., Europe and Japan.

Soybeans Gain to 3-Year High in Chicago on Speculation China May Buy More Soybeans rose to a three-year high in Chicago on speculation that China, the world's biggest oilseed consumer, may boost imports of the commodity to help ease decade-high inflation partly caused by edible oil shortages.

The Wall Street Journal had a good story on the declining US dollar yesterday.

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