Here are this week's need-to-know facts about the stock market, economy, Wall Street, and life-changing global events…
It's the numbers that count in this crazy world. They can tell stories that words sometimes can't.
Here's a look at some of the fascinating, infuriating, amusing, depressing, and altogether important numbers that the world has put up on the board recently – and why you need to know them.
40,000 watts is the amount of electricity generated by the U.S. Navy's experimental Wave Energy Test Site in Kaneohe Bay, Hawaii. The Navy, which has always been the most environmentally conscious of the armed services, is contracting with a small company to develop a 500-kilowatt wave power generator and bring this promising, vast energy source into the mainstream. The Navy is one of the largest deep-pocket investors in wave electric power, an unconventional yet infinitely renewable and infallible power source.
1.1% is the average September decline on the S&P 500, going all the way back to 1929. September is the only month that sees a decline more than 50% of the time. The Dow Jones Industrial Average doesn't do much better, losing an average of 1.09% every September since 1896. This turns established investment superstition on its ear – somewhat – as investors usually look for the market to decline in October. The Magic 8-Ball doesn't call for a great September 2013, either.
234,812 words comprise the Patient Protection & Affordable Care Act. This includes substantive text and does not include prefacing, indices, headers, etc. By comparison, J.K. Rowling's far more popular bestseller Harry Potter and the Order of the Phoenix comes in at just under 257,000 words. To say the little-understood law, also known as Obamacare, is controversial is an understatement – but the good news is, there are ways to make money from it, and we know how…
13 years is the age of a young counterfeiter arrested this week in Lima, Peru. The lad was arrested in a police crackdown aimed at halting counterfeiting U.S. dollars. Peru has overtaken Colombia and North Korea as the chief producer of the bogus greenbacks. Despite using only inkjet printers and bond paper, the Peruvian ring was able to produce "top-quality" counterfeits, detectable only to infrared scanners at banks. As many as five young "artisans" will work on the bills during the process, each adding little touches that "add to the quality." Over the past 10 years, more than $103 million worth of Peruvian fakes have been seized, nearly half since 2010. It's a reminder you can never be too careful – just like with the fakes lurking in the gold market.
$131 billion is how much Fannie Mae and Freddie Mac have returned out of the $187 billion government cash infusion given to them in 2008. Their delisted shares are up close to 500%, while their preferred stock is up 200%. Many investors see this as a sign that Fannie and Freddie will continue, although under a different paradigm, with different organization. Meanwhile, Perry Capital has sued the government, claiming the two mortgage giants were "improperly seized" and have given the government ill-gotten profits. Perry Capital hopes to capture some of those profits for itself with the suit.
136,038,000 Americans are employed as of the end of August 2013. The U.S. Bureau of Labor Statistics monthly jobs data showed that the economy added 169,000 jobs last month, and (official) unemployment is at 7.3%. This news brought a mixed open to the markets. U.S. Federal Reserve Chairman Ben Bernanke has said that unemployment will be a "barometer" in determining when to begin tapering. The specter of a taper or halt to the money printing now has the power to send markets tumbling, as quantitative easing (QE) is seen as a driving force behind this 54-month old bull market. QE isn't just boosting American markets, either. Nearly every market in the world is affected.
6 inches is the size of the screens being tested on next-generation Apple Inc. (Nasdaq: AAPL)iPhone prototypes. This has the potential to make the iPhone by far the largest smartphone in the business – significantly larger than previous iPhones, and certainly larger than archrival Samsung's Galaxy phones. The large screens may herald a new device category for the two rivals: the phone-tablet hybrid. Call it the phablet… or the tablone. Critics of Apple believe that, with the passing of visionary leader Steve Jobs, the company is done with the real innovations that drove its revenues (and share prices) in the past. Whether the critics are right or not remains to be seen, but our Private Briefing Editor Bill Patalon has found a deal in the works that could drive AAPL shares to $777 territory.
5 U.S. Navy destroyers and one amphibious assault ship are steaming toward the Eastern Mediterranean and Syria. One aircraft carrier strike group of five ships, headed by USS Nimitz, has taken position in the Red Sea. Nimitz remains far to the south of Syria but within striking distance of Syria's closest ally, Iran. France has dispatched one frigate, FS Chevalier Paul, to the area, while the United Kingdom is staging ships, men, and materiel at RAF Akrotiri, a U.K. Sovereign Base Area on Cyprus. Russia, which opposes Western military intervention in Syria, has dispatched at least two warships to Syria and the Tartus naval base – the only Russian military base outside the old Soviet Union. With at least 14 warships from different nations operating in close proximity, uncertainty is a force to contend with.
$1.2 quadrillion is the estimated size of the global derivatives market. Warren Buffett has called derivatives "financial weapons of mass destruction," and a collapse in this titanic market could come suddenly and without much warning. Estimates range from $600 trillion to $1.5 quadrillion, but even the lowest estimate is about 10 times the size of the global economy, $60 trillion. This incredibly valuable market may as well be a 1.2 quadrillion-pound weight hanging over the planet, for all the damage it could do in the event of collapse. But, then again, it's hard to evaluate the risk to the system without the details of all the contracts at issue – an impossibility, given the unregulated, almost mystical nature of the derivatives market. Fortunately, Money Morning Chief Investment Strategist Keith Fitz-Gerald has a pretty good handle on the problem…
10.5% is the consensus estimate on earnings growth for the fourth quarter of 2013. Yet those same estimates show that sales are only expected to grow by 0.6% in the same time period. This points to shrinking profit margins, especially in the consumer discretionary and telecom sectors. Meanwhile, investors are looking for the best, most sustainable margins around and finding them in surprising places.
What are the most interesting, eye-catching, life-altering numbers you've encountered this week? Share with us in the comments below…