A U.S. Economy at Stall Speed; A Morning Gold Bounce; Cautious Outlooks from Amazon and Apple; LIBOR Probe Spreads; Labor Agreement at S.A. Gold Mines
There was good news about the economy as the government reported a stronger than expected annual economic growth pace of 2%. Before you pull out the party hats, consider this analysis from Zerohedge.com:
“Because of the 2.02% annualized increase in GDP, over one third, or 0.71% (compared to a deduction of -0.14% in Q2), was contributed by “Government Consumption.” This was the biggest rise in government spending in 3 years, and only the first contribution by Uncle Sam to its own GDP print since Q2 2010. So in much the same way as the September jobs print soared courtesy of government employee hiring, this same government is now juicing its own numbers to make itself look better. The real question is what the second and third Q3 GDP revisions will show, which both come, luckily, after the election. Recall that Q2 GDP initially came out at 1.5%, then was revised to 1.7%, until finally coming to rest at 1.25%.”
Translation: GDP (minus the distortion of a large jump in government hiring) was closer to 1% annualized, or roughly a third of one percent on a quarterly basis, or stall speed.
Stock futures have drifted lower.
With nearly moribund GDP growth, it’s no wonder that Apple and Amazon.com issued what the Wall Street Journal called cautious earnings outlooks. Apple is flat and Amazon has mustered a gain of 2% after their earnings releases yesterday evening.
APPLE: Here’s Why We Made A Small iPad Even Though Steve Jobs Said He Hated Small Tablets http://www.businessinsider.com/apple-heres-why-we-made-a-small-ipad-2012-10?0=sai via @sai
Gold fell to as low as $1701 in overnight trading, but has since rebounded to roughly the $1715 as of this writing.
The Voice of America is reporting this morning that South Africa mines and workers have reached a labor agreement. S. Africa Mines, Workers Reach Agreement http://www.voanews.com/content/south-african-gold-mining-companies-workers-reach-deal/1533017.html
The probe into LIBOR rate manipulation spreads. Nine More Banks Targeted in Libor Probe, include Bank of America: http://dlvr.it/2NX9Z0 . A corrupt to the core banking system cannot stand. The Vipers, as Andrew Jackson once said, must be routed out. Until the rule of law returns, banking and societal standards will continue to decay until the system collapses upon itsef!
This is a notable corporate story coming from Europe…
British ExxonMobil oil chief ‘assassinated’ in Brussels street via @Telegraph http://soc.li/IyzmXfS
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Author Jim Kingsland
Market commentator with focus on Gold and Silver after long broadcast career at FNN, Bloomberg, and Fox. #RandomHouse published author on PMs. Jim has also been involved in projects for CAC and Coinplex.
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