Gold Standard

Daily Market Commentary for August 15, 2011

40-year anniversary of the day the USA stopped using the gold standard. (read more at Millennium-Traders.Com)
http://www.millennium-traders.com/ne...ommentary.aspx

The DJIA was hosting a triple digit gain into mid-afternoon trading session amidst favorable gains, across the board.

Billionaire Warren Buffett called on Congress to hike taxes on the nation’s wealthiest individuals in an effort to help reduce the federal deficit. Buffet said the move by Congress would not harm investment or the creation of jobs. “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice,” per Buffett who added that he personally paid a lower percentage of his taxable income than was paid by the other 20 people in his office.

The deal of the day is about Google (NasdaqGS: GOOG) buying out Motorola Mobility Holdings (NYSE: MMI , the phone-hardware business spinoff, for a whopping $12.5 Billion. Google will now take on more than 19,000 employees, raising the company’s headcount by 66%. A key factor to the deal consists of the nearly 17,000 patents owned by Motorola. It is likely Google will try to use patents owned by Motorola to indemnify other Android partners against various IP infringements. Google’s poor patent position in the Smartphone market has created concern by some investors who worry that the patent problem ultimately hinder Android’s fast-growing position. The Motorola deal will additionally provide Google a big mobile-hardware portfolio, with both phones and a tablet thus, making it more like Apple.

Another merger making headlines, Time Warner Cable (NYSE: TWC) announced the acquisition of cable operator Insight Communications for $3 billion.

Transocean (NYSE: RIG) reported they will pay $1.4 billion for Aker Drilling in order to bolster its presence in Norway.

National Association of Home Builders home market index remained at 15 in August on a seasonally adjusted measure where readings over 50 are considered good; this has not been the case since April 2006. The component measuring sales expectations for the next six months declined two points but, two of the three components - current sales conditions and traffic of prospective buyers - inched higher. According to NAR, in June, the median new single-family home cost $235,200 while the median existing single-family home went for $184,600. One reason for the large gap between new and existing homes is that first-time buyers and investors are looking for bargains. The move tends to be the lower-priced homes or those in distress, while the purchases in the new-home market are more in the middle of the quality and size spectrum. NAHB reported that inaccurate appraisal values, issues with buyers not being able to sell an existing home and tough lending criteria, have weighed in on the housing market.

Released today by the New York Federal Reserve, the Empire State index fell to negative 7.7 in August from negative 3.8 in July. Expectations were for the index to improve to zero. A key barometer of future activity that asks manufacturers of their expectations six months ahead plummeted in August to 8.7, striking its lowest level seen since February 2009. Empire State data is the first reading for the health of the manufacturing sector during August and manufacturing activity slowed sharply in Q2. Additionally, new orders index worsened to negative 7.8 in August from negative 5.5 in July. Price index continued to retreat with the prices-paid index falling 15 points to 28.3 after the index fell by 42 points since May which is a sign that inflation pressures are easing. Index of the number of employees was slightly positive in August, while the average workweek index was slightly negative.


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