The parties are over, the family has left town, the waist
size has increased, the house seems empty with the holiday decorations in the
garage, so it is now time to concentrate on 2015.
Expect nonstop energy drama in 2015: This year should be one
of the most ambitious in energy and climate policy: President Obama's
administration will spend 2015 taking on energy controversies from fracking to
smog, from interstate air pollution to coal-burning power plants - and in
December, his negotiators will head to Paris to try to reach a global agreement
on climate change. In between all that, he just might make a decision on the
Keystone XL pipeline.
Republicans ... vow to wield their spending and
investigative powers to ensure none of this goes down easily. The collision
between a strengthened GOP and a president with just two years to cement his
legacy will be one of 2015's biggest policy dramas, while setting markers that
will have repercussions for the 2016 presidential campaign. ... The Obama
administration won't just be turning out new regulations - it will also
implement ones it has been crafting over the last six years.
The senator to watch in 2015: Standing at the intersection
of three foreign policy crises and a perennial constitutional tension, Bob
Corker (R-Tenn.), incoming chairman of the Foreign Relations Committee, may be
the senator who matters most in 2015.
The big question for the 2015 global economy is how dramatic
China’s economic slowdown will be. A gauge of factory output in November
registered an eight-month low, which piles onto a continuing slump in real
estate. And this coming spring, expect China to announce its lowest official
GDP growth target in nearly a quarter of a century: 7%. (Real GDP won’t outpace
it either, as it has in the past.) The bright side? As China takes its foot off
the gas, it can focus on reform efforts like dealing with its crippling
pollution. The downside: Much lower growth could trigger widespread Chinese loan
defaults—with global repercussions.
Gas might be cheap, but a different American fuel is getting
pricier: The cost of lattes is primed to increase in 2015 — potentially by as
much as 30%. Prices of the morning salve’s main inputs — coffee beans and milk
— are both up, and likely to keep rising. But this is all a preamble to 2080,
when the coffee bean might disappear from the planet all together. If morning
commutes are still around by then, expect mayhem.
Job growth has been faster in 2014 than at any point since
the recovery began, but the American public is still down on the economy. Why?
Wages for the average worker have barely kept up with inflation in recent
years. That looks set to turn around next year. The unemployment rate already
sits at 5.8%, close to full employment, and several other indicators suggest
that the job market is about to get drum tight: this year saw a record number
of job openings and increased labor market turnover. As the competition for
labor gets tougher, employers will have to start offering raises if they want
to keep talent.
10 Global Elections to Watch in 2015: From Louisiana to
Saudi Arabia, this year isn't just a lead-up to 2016: Kentucky's Gubernatorial
Election ... Nigeria's General Election ... Saudi Arabia's Municipal Elections
... Spain's General Election ... Chicago's Mayoral Election: Rahm Emanuel will
be fighting for his political life this February ... Britain's Parliamentary
Election ... Louisiana's Gubernatorial Election ... Canada's Parliamentary
Elections ... Israel's Legislative Elections ... Argentina's Presidential
Election.
When reports surfaced that Xiaomi was raising money at a $50
billion valuation in late 2014, many were incredulous. But the Chinese company,
which sells high-quality phones at razor-thin margins, overtook Samsung as
China’s No. 1 smartphone seller this year. Now enter a half dozen other Chinese
smartphone makers—including Meizu, OnePlus, and Vivo. Look for one to have a
Xiaomi-like rise next year.
Same-day delivery services like eBay Now have proven costly
and unnecessary. But on-demand services with very specific functions have
thrived. For this, we can blame Uber, the wildly popular on-demand car service
app. Uber’s seamless simplicity has conditioned us to summon anything we
need—paving the way for startups like Washio (on-demand laundry), Glam Squad
(in-home hair and makeup), Instacart (groceries), and Canary (the “Uber for
weed”). There’s also the simplistic app Push for Pizza, which is exactly what
it sounds like. Next year, the instant gratification economy will only get
bigger and more ridiculous. Not-so-far-fetched ideas for 2015: on-demand
tattoos, paternity tests and day-old bread. Need someone to brush your teeth
for you? It’s only a swipe and a tap away. VCs, call us.
The world economy is still recovering from the last
financial crisis, but is another just on the horizon? The consensus view is no,
but economist David Levy says yes. He argues that China has over-invested in
its export sector for years now without commensurate growth in demand across
the developed world, and that this dynamic could trigger a Chinese debt crisis
in 2015 that takes down an already reeling Europe and ultimately the U.S. This
isn’t a popular view, as plenty of China watchers see the globe’s second
largest economy continuing to grow at twice the speed of the world at large.
But if the global economy does suffer a major slowdown, trouble Middle Kingdom
will be the culprit.
Standard & Poor’s 500 Index will close 2015 at 2312, a
roughly 10% increase from todays’ levels.
Liquid lunches will gain in popularity, not alcohol but
Chicken Tea, a wide variety of soups and consommés, are gaining strength in
restaurant menus.
Mixing warm metals, such as copper and rose gold, with cool
ones like silver is hot right now in interior decorating: A strategic layered
mix of silvery, gold and black metals as a stylish option to home décor.
Volvo V60 wagon is the hot automobile for 2015. Starting
your car remotely from your smartphone, all seat heaters, this car is wired
like hunting socks. Volvo On Call package of apps and telematics provides
in-vehicle WiFi and app support. The GPS system is better than the Space
Shuttle. Four big side doors and a top-hinged rear hatch. Zero to 60 mph in 5
seconds plus 28 mpg on the highway. A fantastic car, hugely practical, dead
sexy, super fun, a class act all the way.
Augusta National moves ahead of Pine Valley into the top
spot as America’s top golf course.
Tiger Woods and Phil Mickelson will never win another major
golf championship; While Rory McIlroy, Jordan Spieth and Ricky Fowler will win many.
COLLEGE
CHRONICLES - 'THE THREE Cs': Coding, college readiness and
community impact define Forbes' "30 Under 30" education honorees this
year. Sarah Kunst, 28, gets a mention for her work with groups like Venture for
America, Code2040 and the State Department's Tech Women. Strive for College
Founder Michael Carter, 26, also gets a mention, along with Higher Achievement
Director Amelia Castañeda.
Colleges' New Aid Target: the Middle Class. As soaring
college costs saddle more students with debt, colleges are increasingly
earmarking aid for students who can fall through the cracks of existing programs:
those who aren't from poor families, can't necessarily maintain a 4.0 GPA or
hit a three-pointer at the buzzer." http://on.wsj.com/1Bkoa96
SOBERING
DATA
– U.S. off war footing at year's end, but wars go on. As of Dec. 16, a total of
2,215 U.S. troops had died in Afghanistan and 19,945 had been wounded. In Iraq,
4,491 died and 32,244 wounded.
TOP
FILMS - The top 10 films at the North American box office in
2014," via AP: 1. 'Guardians of the Galaxy,' $332.9 million ... 2. 'The
Hunger Games: Mockingjay, Part 1,' $308.9 million ... 3. 'Captain America: The
Winter Soldier,' $259.8 million ... 4. 'The Lego Movie,' $257.8 million ... 5.
'Transformers: Age of Extinction,' $245.4 million ... 6. 'Maleficent,' $241.4
million ... 7. 'X-Men: Days of Future Past,' $233.9 million ... 8. 'Dawn of the
Planet of the Apes,' $208.6 million ... 9. 'The Amazing Spider-Man 2,' $202.9
million ... 10. 'Big Hero 6,' $201.5 million.
Hollywood
Predictions for 2015: Rupert 'retires' ... 2. Sumner [Redstone]
'retires' ... 3. Netflix crosses over. Which side is Netflix really on ...
digital or is it TV? ... 4. Television crosses over ... 5. And Facebook wants
to be television, too ... 6. Comcast deals NBCU ... 7. Boutique cable is the
flavor of the year ... 8. A new notion enters the media discussion[:] ... 'the
end of advertising.
2014 Box Office: Admissions Lowest Since 1995; Despite a
fantastic Christmas at the box office, 81 million people didn't buy movie
tickets this year. Not only were this year's domestic admissions of 1.259
billion off 6% from 2013's 1.34B, but the number of tickets sold hit their
lowest level since 1995 when 1.211B people went to the cinema. ... Insiders
attribute the down year to lackluster product and the lack of even bigger
tentpoles versus ticket prices, which remained level.
114th
CONGRESS CONVENES TUE. - Energy and Obamacare will dominate the first
two weeks of Republican control of Capitol Hill. House Republicans will move
next week on legislation to jump-start the construction of the Keystone XL
pipeline and define a full workweek as being 40 hours for the purpose of the
Affordable Care Act (ACA), according to a GOP leadership aide. The goal ... is
to begin passing bills that will clear both the House and the Senate and end up
on President Obama's desk. ...
The GOP is also trying to get ahead of another legislative
crisis. In Congress' second week in session - the week of Jan. 12 - House
Republicans will seek to pass a bill to fund the Department of Homeland
Security, which runs out of money Feb. 28. Speaker John Boehner and House
Majority Leader Kevin McCarthy are working with Senate leaders to craft a
package that also includes reforms to the nation's immigration laws. One
strategy under consideration is to include a border security package in the
funding bill. That could set up a major confrontation with Obama.
SQUAWK
BOX MOVES – The popular CNBC early morning business program
moves to New York studios on January 7. Lets’ hope host Joe Kernen stops dying
his hair in 2015. Still the best business show on television, sorry Maria.
HAPPY
ANNIVERSARY – 70 years for President George Bush (41) and
Barbara Bush
Mario
Matthew Cuomo, 1932-2015: A national liberal champion when liberalism
was marginalized: Cuomo became a political sensation through a medium thought
to belong to another era: words. ... He was reared in a household of Italian
speakers; English ... was his second language. ... Cuomo was a relative
political unknown in 1984, when the Democratic Party's presidential nominee,
Walter Mondale, asked him to deliver the keynote address at the party's
national convention in San Francisco. ... He offered a polite but passionate
assault on Ronald Reagan's America, his shining city on a hill. ...
Cuomo disdained the term 'liberal,' preferring to describe
himself as a pragmatic progressive or a progressive pragmatist.
--STATEMENT BY THE PRESIDENT: "An Italian Catholic kid
from Queens, born to immigrant parents, Mario paired his faith in God and faith
in America to live a life of public service -- and we are all better for it.
... Michelle and I extend our deepest condolences to Mario's wife Matilda, his
children, Governor Andrew Cuomo, Maria, Margaret, Madeline, and Chris, ... and
New Yorkers who loved him dearly."
BIRTHDAYS
THIS WEEK – Birthday wishes and thoughts this week to: Nicolas Cage
(50), Bradley Cooper (40), Robert Duvall (84), Nigella Lawson (55), Nancy Lopez
(58), Bart Starr (80).
SPORTS
BLINK - Win for ESPN, but Title Game Is the Real Test - Ohio
State's 42-35 upset of Alabama in the Sugar Bowl attracted 28.27 million
viewers, making it the most watched event in cable TV history. Oregon's 59-20
blowout of Florida State in the Rose Bowl had 28.16 million viewers - the most
for that bowl since 35.6 million watched Texas beat Southern California in the
2006 national title game on ABC. ...
Now comes Part B for ESPN : Ohio State versus Oregon at
AT&T Stadium in Arlington, Tex [Jan. 12]. Will the final's viewership soar
beyond 30 million, to a level akin to that of the N.F.L. conference
championship games, which averaged 53.7 million viewers last year? Or will it
fall below that aspirational level without a magnet team like Alabama as a
draw? I'll predict 45 million.
COLLEGE
FOOTBALL PICK OF THE WEEK – College
Playoff Championship Game: Monday 1/12, 8:30 PM ET, ESPN: #2 Oregon
Ducks (13-1) vs. #4 Ohio State Buckeyes (13-1). The Ducks will be too much for
THE Ohio State, Oregon 45 Ohio 24 Season
to date (12-7)
COLLEGE
HOCKEY GAME OF THE WEEK – Saturday 1/10, 7:00 PM CT, CBS: #7
Minnesota-Duluth Bulldogs (12-6) at #1 North Dakota (13-4-2). A battle for
first place in the NCHC, The ex-Fighting Sioux 4 the Bulldogs 3. Season
to date (0-0)
NFL
PICK OF THE WEEK – Sunday 1/11, 1:05 PM ET, Fox: Dallas Cowboys
(13-4) vs. Green Bay Packers (12-4). I smell an upset, Dallas 24 The Pack 21. Season to date (13-5)
THE
SWAMI’S WEEK TOP PICKS –
(NFL, Jan. 11) Indianapolis Colts (12-5) 28 at Denver Broncos (12-4) 35
(SCIAC Game of the Week, Jan. 6) University of La Verne
Leopards (4-6) 65 at Pomona-Pitzer
Endowments (2-8) 59
(NCAA hockey, Jan. 10) #19 Yale University Bulldogs (8-3-2) 5 at #3 Harvard Crimson (10-1-2) 4
(NHL, Jan. 10) Nashville Predators (25-9-4) 3 at Minnesota Wild (18-15-4) 2
Season
to date (81 - 68) – Final 2014 totals 54%
MARKET WEEK - Nonetheless, the
S&P 500 chalked up its third straight year of double-digit gains, its
longest streak since a five-year run from 1995 to 1999.
The euro sank to a 4-1/2-year low on Friday
after comments from European Central Bank President Mario Draghi suggested the
institution could soon start buying the sovereign debt of member states. Draghi
said the risk of the bank falling short of its mandate on inflation targeting
had risen.
Mergers and acquisitions activity reached
nearly $3.5 trillion in 2014, the highest level since 2007, the New York Times
reported. Dealmakers announced more than 40,000 transactions last year, in part
due to cheap debt financing and accelerating stock prices.
U.S. box office receipts fell about 5.3
percent in 2014 from the previous year, the Los Angeles Times reported.
American movie-goers spent an estimated $10.3 billion last year as studios
released fewer blockbusters than they did in 2013.
Digital album sales fell 9 percent in the
United States in 2014, and online song sales slipped 12 percent, according to
Neilsen data, the Financial Times reported. Meanwhile, audio and video
streaming increased more than 50 percent.
It’s the first full week of trading in 2015,
and there’s no shortage of economic data on the docket leading up to Friday’s
December employment report. Among the highlights, December auto sales are
released today, with the ADP private-payrolls report and minutes from the
latest Fed meeting out Wednesday.
The euro hit a nine-year low against the
dollar, as the timetable for ECB action appears to be accelerating thanks to a
storm of negatives including concern about Greek politics.
U.S. crude and Brent oil futures dropped to
new five-and-a-half-year lows this morning on continued worries about a surplus
of global supplies against the backdrop of weak demand.
DRIVING THE WEEK – President Obama
is back in DC and the 114th Congress kicks off on Tuesday. The President will
look to steal some thunder from the GOP takeover by hitting the road to preview
State of the Union themes. The road trip begins Wednesday in Detroit for an
event on the automobile industry and manufacturing in general. Obama is in
Phoenix on Thursday for an event focused on the housing sector ... Obama and VP
Biden will be in Tennessee on Friday (when the December jobs number comes out)
for an event focused on a college affordability initiative ...
Auto sales come out late this afternoon and
are expected to dip to 16.9M from 17.1M ... ISM non-manufacturing at 10:00 a.m.
Tuesday expected to dip to 58.0 from 59.3 ... ADP employment at 8:15 pm.
Wednesday expected to rise by 225K ... FOMC minutes Wednesday at 2:00 p.m. will
include discussion around dropping "considerable time" and replacing
it with a pledge to "be patient" on rate hikes ... BLS jobs report at
8:30 a.m. Friday expected to show a gain of 240K with the unemployment rate
dropping a tenth to 5.7 percent ... House will look to move on Keystone XL and
other bills they can now probably get through the Senate and to the president's
desk.
Next
week: 2014/2015 Tax Planning
Until Next Monday, Adios!
Claremont, CA
January 5, 2015
#V-37-247
CARTOON
OF THE WEEK – Doonesbury
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