Nobel Peace Prize Paradox

Nobel's Prize, and the Day's Business News Review

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Nobel Peace Prize

President Barrack Obama collected his Nobel Prize, while Afghan villagers chanted "Death to Obama!" One such man rebutted to the award ceremony, "Obama has only brought war to our country. Peace prize? He's a killer!" It must have been tough for the President to collect his Nobel Peace Prize just days after announcing he would send 30K new troops to Afghanistan. It must have been even harder for the folks who issue the esteemed award to give it away on this particular day. They may have had some second thoughts after all, and I expect that by the end of 2010 (perhaps much sooner) Obama will no longer be viewed a President of peace, but one of war. That's because war with Iran is inevitable, and that very special war will likely prove both bloody and messy.

We have been talking about Iran here from our inception in 2006, and friends of "The Greek" have heard my rants and raves about it for even longer. Now that the whole of the United Nations seems to sense it, I look back with cynicism at the many ouzos I shared with a French Representative one bitter evening in a dark Upper East cove. I remember his words precisely, "Iran only seeks nuclear energy, not weapons," he stated with complete confidence. I felt he considered me naive in my view point, and I could not comprehend how someone so close to the action could be so far from reality. I hope I do alarm you as I state: the countdown has begun! I sincerely believe it has, and plans for war are likely very well under way.

So collect your medals now Mr. President, because in short time they will be burning your effigy in the streets of Tehran, Palestine and even Washington D.C. Let me be clear though, "The Greek" views this war inevitable, as Iran will not back away from its decades long effort, and America, Europe and Israel will not live with a nuclear armed Iran... PERIOD! What you should really worry about is how China, Russia and allies of Iran will move when the fuse is lit.

Business News Review

Weekly Jobless Claims

Weekly Initial Jobless Claims data were reported this morning at 8:30. In recent weeks, we've seen steady improvement. In the week ending December 5, initial filers for unemployment insurance amounted to 474K, up 17,000 from the prior week's count. This step back was somewhat unexpected, but not abnormal for a weekly data point. Economists surveyed by Bloomberg forecast 460K, but as we have noted here before, economists do not spend an awful amount of time on this weekly data point. The four-week moving average still managed improvement to 473,750, thanks to prior week drops in claims. This is the good news, if it holds, as it seems to paint a clear signpost toward economic recovery.

State Conditions:

The highest insured unemployment rates in the week ending Nov. 21 were in Puerto Rico (6.1 percent), Oregon (5.6), Alaska (5.5), Nevada (5.1), Wisconsin (4.9), Washington (4.8), Michigan (4.7), Pennsylvania (4.7), Arkansas (4.5), Idaho (4.5), and North Carolina (4.5).

The largest increases in initial claims for the week ending Nov. 28 were in Wisconsin (+8,067), Kansas (+3,825), Missouri (+3,307), Iowa (+2,789), and Indiana (+2,162), while the largest decreases were in California (-28,672), Texas (-9,519), North Carolina (-8,873), Florida (-7,214), and Illinois (-6,610).

International Trade

International Trade data were reported this morning as well. October's trade deficit decreased to $32.9 billion, improved from September's revised deficit of $35.7 billion. Economists were looking for a reading of -$36.4 billion, but the data looks like a non-market-moving factor today nonetheless. A disproportional increase in exports to imports of goods drove the decrease in overall deficit.

Overseas News Drivers

The Bank of England kept its key interest rate steady at 0.5%, and left its quantitative easing policy unaltered. The non-move was widely expected among market watchers, and thus a non-factor today. The FTSE 100 Index approved, rising 0.59% on the day thus far. The Euro Stoxx 50 was up 0.71% despite still bearing the weight of concerns around Athens. That said, Greece saw a market rebound today, with the Athens Stock Exchange General Index improving 5.15%.

RBC Cash Index

The RBC Cash Index was reported at 10:00 a.m. Known as the "consumer attitude index," RBC's reading took a spill last month when it sank to a level of 30.2, from 51.8 in the prior month. December's reading showed modest improvement to a mark of 39.0. Ever the optimist, RBC notes the reading was more than twice that of a year ago (15.3 in December 2008). While a better reading is nice in this season of giving, on an absolute basis, the latest check does not reflect confidence, in our view.

Washington Drivers

Treasury Secretary Timothy Geithner is up on the Hill testifying before the Congressional Oversight Panel on TARP. Things are getting heated, and so you may want to tune into Bloomberg Radio for a listen.

The Treasury Budget is due for report at 2:00 PM ET. Economists are looking for a November deficit of $135 billion, compared against October's deficit of $176.4 billion. Over the past five years, the deficit has averaged $93.5 billion in November. Clearly, receipts are down and spending is up, as we do our best to spur recovery out of recession.

The Fed will issue its Flow of Funds Report, and Fed Governor Elizabeth Duke will address the Mortgage Foreclosure Policy Conference in Chicago.

Corporate News Drivers

United Technologies (NYSE: UTX) meets with investors. Thursday's earnings news will emanate from BWAY Holding (NYSE: BWY), Ciena Corporation (Nasdaq: CIEN), Costco (Nasdaq: COST), Gildan Activewear (NYSE: GIL), Learning Tree Int'l (Nasdaq: LTRE) and Smithfield Foods (NYSE: SFD).


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