We’ve made it through the first week of what we expected would be a volatile September. This week, Congress will determine whether to authorize military strikes on Syria while the White House works to garner the support of a very skeptical public.
President Obama will address the nation about Syria tomorrow night, perhaps in order to avoid interrupting Monday Night Football. (The Washington Redskins host the Philadelphia Eagles tonight.)
Tomorrow also brings the big reveal from Apple (AAPL). What new gadgets will the company show us? The rumor mill is buzzing.
The Syria saga is twisting by the hour. Consider these three developments.
- On Friday, Vladimir Putin said Russia would continue supporting Syrian president Bashar al-Assad’s government even if the U.S. attacks. Russia has a Navy base at the Syrian port of Tartus.
- Over the weekend, Assad denied using chemical weapons. In a telephone interview with Bloomberg’s Charlie Rose, Syria’s president promised retaliation if U.S. forces attack his country — just like our friend J.R. predicted last week.
- Today, Russian Foreign Minister Sergei Lavrov went to Moscow and urged Syria to give up the chemical weapons it denies having. U.S. Secretary of State John Kerry also hinted Assad could avoid attack if it handed over the chemicals.
It looks to me like a plan is brewing.
Imagine this: If Assad delivers a few tanker trucks to the U.N., then Obama can claim victory, Congress can get on with business and Russia will look like a peacemaker.
Something along these lines is probably the best we can hope for at this point. Syria’s civil war will resume, but everyone else can rewind to three weeks ago and pretend it all never happened.
What do you think — do Obama and Putin have a secret plan?
Carl Icahn talked about Apple on CNBC today:
"I believe Apple is a very undervalued situation, just on the numbers. Let’s even forget the technology, which, I think they have a great name, great stuff. If you just look — I look for these no-brainers when I invest, and if you look at the numbers, look at the multiples that are going on, look at the great cash flow they have, I mean, so, you really have a lot of protection on the downside.
"I mean, it’s like Netflix (NFLX) was when you first bought it at $58, it’s amazing, and that was a no-brainer, because people, a lot of these analysts, you’ve got $2.5 billion coming in there. So it was the same concept. …"
Icahn still sounds bullish. Apple shares climbed back over $500 today, ending at $506.17.
Tomorrow is the big day for iPhone fans. The media event is at 1 p.m. Eastern (10 a.m. Cupertino, Calif., time). Beyond showcasing the new devices, Apple could also announce some important business developments.
The company has another media event scheduled in Beijing a few hours after the U.S. announcement. Rumors suggest the iPhone could soon be more widely available in China through China Mobile (CHL).
Click on the image to watch the full interview.
Our analyst Geoff Garbacz, on an internal Uncommon Wisdom Daily editors’ call today, suggested the possible Apple-China Mobile partnership could present serious gains in the coming months.
You can bet we will share our top takeaways from the event, plus our recommendations on how to move forward with AAPL. If you catch some event highlights before we publish the Afternoon Edition tomorrow, send me your impressions here.
The line to buy the next great gadget may be a little shorter than the previous one. That’s because the recession is touching everyone. Several people wrote over the weekend with comments on the August unemployment data.
Reader Sharon R. says: "My two adult children are marginally attached. The son, in his 30s — a hard worker with a good work ethic — has repeatedly been promised full-time at the interviews, and part-time in reality. He ended up almost homeless in another state. We paid for him to get home to our state, and he is presently living at home. He now has a full-time job, no bennies, no pension plan, and it will take him a couple of years to pay back old bills and get back on his feet.
"The daughter, same story. Presently working, but no job security, and no promise she’ll continue to have this job next year. Another relative, in his 40s with a Ph.D. and who works in medical research, has had the funding cut to his projects twice now. As of Dec. 31 he’ll be out of work again. AND, he’s still paying off student loans, AND there’s still no job security."
Brad: Sharon, you’re clearly a devoted parent. I wish your family better fortune.
Reader Bob Y. says: "Brad, your calculation that at the current rate of job creation, there will be jobs for everyone in 10 years is wrong. You are not accounting for population growth and the increasing number of new job seekers. The current rate of job creation is barely enough to employ the new workers joining the job market. This rate will never provide jobs for everyone who wants one.
"The problem is systemic. Increased productivity, which is a measure of labor efficiency beneficial to employers, is destroying the need for new workers. The only industries actually growing the need for more workers are in healthcare linked primarily to the growth of the age groups that require greater care, and energy production from the need for new wells and transport systems in the oil and gas patch. Other sectors, like IT, are growing rapidly but without the need for more human workers.
"The basic problem is that productivity gains have delinked economic growth from job creation. There is no evidence that this trend will reverse anytime soon, if ever. We may need to revisit the New Deal policies that created jobs to meet the needs of the larger economy to ensure that young people can be assured of employment.
"Over the long term, creating a whole generation of unemployed, and unemployable, 20- and 30-somethings will be politically destabilizing and ultimately threaten the survival of capitalism and democracy."
Brad: Thanks, Bob. I used the 10-year statement to illustrate a broader point: The U.S. economy is a long, long way from having enough jobs for everyone.
I like your statement "productivity gains have delinked economic growth from job creation." This is one reason U.S. stocks are performing well despite the extended unemployment problem.
Several readers suggested people aren’t working because it is so easy to get government benefits. I’m sure this is part of the explanation — but we all know hard-working, talented people who are unemployed. People who did everything right and don’t expect handouts are jobless, too.
I’m afraid unemployment is a big, complicated problem with no easy solutions … but if you have one, please share it with us.
Here are some highlights from the news….
- Good economic news from China and Japan gave world markets a mostly good day. The S&P 500 notched its fifth-straight win, closing with a 1% gain.
- San Francisco Fed President John Williams said the unemployment data was about what he expected. Apparently, he didn’t expect much.
- Williams — whose district includes Silicon Valley — said the Fed will probably adopt a "multi-step" tapering plan next week.
- Bond yields softened a bit, with the 10-year Treasury rate down to 2.90% this afternoon.
- Gold trading was quiet, but crude oil dropped as the Syria threat receded.
Good luck and happy investing,
Uncommon Wisdom Daily
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