Monday, November 21, 2011

It Begins

The Holiday travels begin: one word – help!

Why, why, why?

I could be home in Archie’s chair, a cocktail, salami, my iPad and Blackberry a short distant away, watching football, hockey, CNBC, Weather Channel. But no, freeways, airports, cold weather, hearing loss, mayhem – why?

One word – family. Love them to death but can’t they come here????

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Troy Aikman (45), Barbara and Jenna Bush (30), Goldie Hawn (66), Caroline Kennedy (54), Stan Musial (91).

FIRST LOOK -- FORTUNE's 2011 "Business Person of the Year": Starbucks chairman and CEO Howard Schultz -- David A. Kaplan: "Back in September, two days before Barack Obama delivered his speech to Congress on jobs, he put in a call to Howard Schultz ... The business icon had suddenly become a political activist, announcing that because he was disgusted with Washington's dysfunction, he would cease making campaign contributions to incumbents in either party. ... Obama ... had no personal relationship with Schultz, a registered Democrat, and the two had met only once, when Obama was the junior U.S. senator from Illinois. 'Howard,' said the President, 'I'd like to talk to you about a number of things, including your campaign initiative, as well as your thoughts on the economy and job creation.' ...

BACKSTAGE - HOW THE SUPERCOMMITTEE FLUNKED : The supercommittee last met Nov. 1 - three weeks ago! It was a public hearing featuring a history lesson, "Overview of Previous Debt Proposals," with Alan Simpson, Erskine Bowles, Pete Domenici and Alice Rivlin. The last PRIVATE meeting was Oct. 26. You might as well stop reading right there: The 12 members (6 House, 6 Senate; 6 R, 6 D) were never going to strike a bargain, grand or otherwise, if they weren't talking to each other. Yes, we get that real deal-making occurs in small groups. But there never WAS a functioning supercommittee: There was Republican posturing and Democratic posturing, with some side conversations across the aisle.

We thought that human factors would prod ambitious members to crack the code, and that the committee would take on its own ecology, regardless of pressures from above or below. But we were punk'd: The supercommittee - one of the most fascinating government experiments of this generation -- never existed as a dynamic political organism.

The official deadline for action by the Joint Select Committee on Deficit Reduction is Wednesday, the day before Thanksgiving. The real deadline is Monday night, since any plan has to be posted for 48 hours before it's voted on. So conversations this weekend revolved around how to shut this turkey down. Aides expect some "Hail Mary" offers on Sunday, and there's something on the stove that could be inoffensive to both sides. But the committee may not even have a fig-leaf agreement to announce. Total, embarrassing failure. The markets and the country will hate it.

SUPERCOMMITTEE FAIL: WHY MARKETS SHOULDN'T CARE - No one ever gave the supercommittee much of a chance, so it's hardly a surprise they are meeting those low expectations. There is no debt limit or government shutdown crisis looming. The "government is broken" argument is not wrong but it's not new and there are plenty on both sides who think doing nothing here was better than anything on the table. The failure triggers automatic "sequester" cuts of $1.2 trillion over 10 years (thought they don't kick in until 2013 and are thus deeply suspect.) ... There probably won't be any downgrades and if there are ... so what.

The S&P downgrade had no impact on the 10-year Treasury yield, which kept dropping after the ratings agency made its controversial summer move. And the biggest reason the supercommittee fail is a big fat nothing-burger? The economy is showing signs of life with a decent chance that jobs growth hits close to or over 200K in November and that fourth quarter GDP surprises to the upside. Growth won't erase big structural benefits vs. tax rates problems but it will make the numbers easier.

NFL - Sunday stats - NFL release : "New Orleans' DREW BREES (3,326 yards, 23 touchdowns), Green Bay's AARON RODGERS (3,168 yards, 31 touchdowns) and New England's TOM BRADY (3,032 yards, 23 touchdowns in nine games) have all passed for at least 3,000 yards and 20 touchdowns in their team's first 10 games (Brady and the Patriots play their 10th game on Monday night). This is the first time in NFL history that three different quarterbacks have passed for at least 3,000 yards and 20 touchdowns in their team's first 10 games. ... The GREEN BAY PACKERS defeated Tampa Bay 35-26 and improved to 10-0. The Packers have won a franchise-record 16 consecutive games (including the playoffs) and are the third defending Super Bowl champion to start the following season 10-0 (1990 San Francisco 49ers and 1998 Denver Broncos). The Packers are 10-0 for the third time in franchise history (1929 and 1962). Green Bay won the NFL Championship in both of those seasons. ...

"The DETROIT LIONS erased a 24-7 deficit to defeat Carolina 49-35. The Lions are the first team in NFL history to win three games in a single season in which it trailed by at least 17 points. The Lions won games in Weeks 3 (20-point deficit vs. Minnesota) and 4 (24-point deficit vs. Dallas) after trailing by at least 17 points. ... Green Bay quarterback AARON RODGERS completed 23 of 34 passes (67.6 percent) for 299 yards with three touchdowns and one interception for a 112.3 passer rating in the Packers' win. Rodgers is the first quarterback to record a passer rating of at least 100 in 10 consecutive games in a single season. He had previously been tied with PEYTON MANNING (nine in 2004) for the longest such streak. Rodgers has passed for at least two touchdowns in all 10 games this season and is the fifth quarterback in NFL history with multiple TD passes in each of his team's first 10 games. The other four quarterbacks to accomplish the feat are Pro Football Hall of Famers JOHNNY UNITAS (1959) and DAN MARINO (1984) and PEYTON MANNING (2004) and TOM BRADY (2007)."

COLLEGE FOOTBALL PICK OF THE WEEK – Saturday 11/26, it is finally here, Ohio State Buckeyes (6-5) at #15 ranked Michigan Wolverines (9-2), 12:00 PM ET, ABC. Ohio State stinks this year, Michigan is getting better, but still it is the best game of the year. The Big House will be rocking as Michigan takes Ohio State in a laugher.
Season to date (7-5).

SMALL COLLEGE PICK OF THE WEEK – Saturday 11/26 and the next round of the D-III playoffs have #5 ranked Linfield Wildcats (10-0) at Wesley Wolverines (10-1), 12:00 PM ET, HGTV. Linfield is the best in the west after beating Cal Lutheran (SCIAC) by three points on Saturday. We like them to continue on in the playoffs with a big win in Dover, Delaware.
Season to date (11-1).

NFL PICK OF THE WEEK – Thursday, 11/24 – parades, shovel the sidewalk, the smell of Turkey in the oven, Green Bay Packers (10-0) at Detroit Lions (7-3), 12:30 PM ET, Fox – this is Thanksgiving in America. The Lions need this one to get into the playoffs, it will be a tough one but the Lions will win.
Season to date (6-5).

THE SWAMI’S TOP PICKS – Michigan 35 Ohio State 21, BC Lions 28 Winnipeg Blue Bombers 17, Detroit 42 Green Bay 40. Season to Date (22-11).

DRIVING THE WEEK - Today is all about markets reacting to (and politicians spinning) the supercommittee failure (or celebrating a SHOCKING and nearly impossible breakthrough). Later in the week features some key U.S. data and European debt sales ... President Obama is in New Hampshire on Tuesday to talk about the jobs bill at Manchester High School Central. ... Third quarter GDP gets revised on Tuesday ... Wednesday is loaded with juicy data due to the holiday with weekly jobless claims, personal income and spending and Reuters/U. Mich. consumer sentiment (a key number heading into Black Friday and the full-tilt holiday shopping season)

Next week, words of the month and Jack Ass of the month.

Until next Monday, Adios.

Claremont, CA
November 21, 2011

#II-30, 83

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