Week Aug 3 2012 – Weekly Recap & The Week Ahead
“Who can be patient in extremes?” — William Shakespeare
1. Consumer spending falls again in June — according to MarketWatch, U.S. consumers reduced spending for the second straight month despite a sharp increase in wages, boosting their savings rate to the highest level in a year. The savings rate jumped to 4.4% from 4.0% in May.
2. Massive India power outage affects 600 million — A massive power outage in northern and eastern India left 600 million people, about half the country’s population, without electricity last Tuesday. The outage, which further aggravated a grid failure that had disrupted life in the country’s north for several hours the day before, reportedly stranded travelers and commuters, trapped miners and caused traffic jams.
3. India GDP growth forecast cut, but inflation view raised — GDP growth for the year ending March 31, 2013 was cut to 6.5% from the central bank’s previous estimate of 7.3%. At the same time, the RBI raised its wholesale price index-based inflation target for the current financial year to 7% from 6.5%.
4. Congress set to extend government funding for six months — Reuter reported that the House and Senate leaders have struck a deal to fund the U.S. government for the first six months of FY 2013. If passed by Congress, the deal for a six-month spending extension eliminates one layer of difficult year-end wrangling for Congress just after the election as it deals with the “fiscal cliff” of expiring tax cuts, automatic spending cuts, a debt-limit increase and other fiscal deadlines.
5. FOMC stands pat — The FOMC did even less than expected and announced neither additional stimulus, nor an extension of the low-rate pledge past late-2014. The Fed did talk about closely monitoring the economy, which is a bit of a change from the previous statements.
6. U.S. Oil Reserves Jumped in 2010 — according to the IEA, the U.S.’s proven oil reserves jumped 13% in 2010 to 25.2B barrels and those of natural gas 12% to 318T cubic feet, the EIA said in its annual report, with the gains the largest since the agency started keeping records in 1977. Horizontal drilling and fracking played a major role in the increases.
7. San Bernardino files for bankruptcy with over $1 billion in debts — San Bernardino filed for bankruptcy protection citing more than $1 billion of debts and making it the third California city to seek protection from creditors. In the past two months, the cities of Stockton and Mammoth Lakes have also filed for Chapter 9 bankruptcy protection, a special bankruptcy provision for municipalities.
The week ahead — Economic data from Econoday.com:
