Ed’s Daily Notes for August 19th   3 comments

This week’s calendar:

TUESDAY: Home Depot (HD) earnings report release.
WEDNESDAY: Federal Reserve Open Market Committee meeting minutes (from 7/31) and U.S. Existing Home Sales report for July.
THURSDAY: Multiple retail earnings report releases, including Gap Inc. (GPS), Ross Stores (ROST) and Dollar Tree (DLTR).
FRIDAY: U.S. New Home Sales report for July

The Telegraph: Egyptian bloodbath threatens crucial routes for oil and gas supplies

After last week’s bloody crackdown by the Egyptian army, fears of a disruption of oil supplies to the West have boosted the oil price. Brent crude prices were propelled to a four-month high of $111.23 on Thursday. If the turmoil gets worse – or unrest spreads to other countries – the risk premium currently factored into the price of crude is likely to increase further.

Egypt is not a major energy exporter, producing a nominal amount of the world’s oil and gas. The North African country appears at number 54 on the list of the world’s largest oil exporters, producing about 0.9pc of the world’s oil and 1.8pc of global natural gas supply.

However, Egypt plays a vital role in international energy markets through the operation of the Suez Canal and the Suez-Mediterranean (Sumed) pipeline. These are vital pieces of infrastructure in the global oil market.

Last year, about 7pc of all seaborne traded oil and 13pc of liquefied natural gas (LNG) travelled through the Suez Canal, according to data collected by the US Energy Information Administration (EIA).

Reuters (via Yahoo News): Summers-led Fed might raise rates faster than Yellen

Barring another financial crisis or slide back into recession, the next head of the Federal Reserve is likely to oversee a gradual normalization of monetary policy.

But that pace, including the first interest rate hike, might be somewhat quicker under former Treasury Secretary Lawrence Summers than under current Fed Vice Chair Janet Yellen, the two top contenders for the job, if their own comments are any guide.

Moreover, a Summers-led Fed would appear less likely to extend or expand the use of the extraordinary measures that the central bank has undertaken during the tenure of current chairman Ben Bernanke, whose term expires in January.

The distinction between Summers and Yellen is perhaps best illustrated by remarks they delivered at separate events in April.

Yellen, a strong supporter of Bernanke’s policies, in a speech to business editors in Washington, exhorted the Fed to keep its focus on efforts to foster a lower unemployment rate, even if it comes at a cost of stronger-than-desired inflation.

By contrast, Summers, in a separate, closed event in California later that month, raised doubts that the unemployment rate could drop all that much lower without kindling unwanted levels of inflation.

He also was skeptical about how effective the Fed’s massive bond buying program, known as quantitative easing, has been in promoting economic growth.

Sky News: Google Outage: Internet Traffic Plunges 40%

Worldwide internet traffic plunged by around 40% as Google services suffered a complete black-out, according to web analytics experts.

The tech company said all of its services from Google Search to Gmail to YouTube to Google Drive went down for between one and five minutes [Friday night].

The reason for the outage is not yet known, and Google refused to provide any further information when contacted by Sky News Online.

According to web analytics firm GoSquared, global internet traffic fell by around 40% during the black-out, reflecting Google’s massive grip on the web.

“That’s huge,” said GoSquared developer Simon Tabor. “As internet users, our reliance on Google.com being up is huge.

“It’s also of note that pageviews spiked shortly afterwards, as users managed to get to their destination.”

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Posted August 19, 2013 by edmcgon in Economy, Federal Reserve, News, Stocks

3 responses to “Ed’s Daily Notes for August 19th

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  1. We’re out of the recession, so everything must be alright then, isn’t it? Why then is our unemployment spiking this month? Why is it now the highest in 10 years? If GDP is growing, why is unemployment rising even in Belgium? Maybe everything is not so alright then …

  2. Interesting POV on job creation

    T.J. Rodgers: Targeting the Wealthy Kills Jobs
    My investment in my company helps maintain 3,470 permanent positions. What’s not ‘fair’ about that?
    http://online.wsj.com/article/SB10001424127887324110404578630461045403872.html?mod=WSJ_article_comments#articleTabs%3Darticle

    • Interesting article. I read it this morning. I like the comparison he makes in what it costs a private company to create a job versus the federal government.

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