Pool Dancing

You can have your Usain Bolts, Michael Phelpses and Gabby Douglases; we prefer the anonymous practitioners of synchronized swimming, an athletic art that rivals the music of the spheres for precision and elegance – kinda like the sporting life on this side of the Atlantic.  Not.  Equity prices rose and bonds fell, sending the discordant message that economic growth and rising inflation lies ahead.

Considering the fiscal cliff the U.S. is hurtling toward, financial markets are either blissfully optimistic or whistling past the graveyard.  The Dow Jones Industrial Average gained 0.32% Friday and is up 8.9% so far in the second half of the year.  Meanwhile, the yield on the 10-year U.S. Treasury note has risen 20 basis points since June 1 to 1.65%.

The action came against a skeletal backdrop.  Productivity in the second quarter was reported to have risen 1.6% after falling 0.5% in the first quarter, when hiring was more robust.  The cruelest irony of the soft jobs market is that rising output per worker has meant less pressure for firms to add workers.

Wholesale inventories declined 0.2% in July, signaling either increasing demand or business pessimism – take your pick.  And the federal budget went $70 billion further in the red last month versus a $60 billion deficit in June.

The most encouraging news was the surprising drop in initial jobless claims to 361,000 versus an expectation of 370,000.  Our colleague Rich Bieglmeier was spot on with his call on this high-frequency series.

There will be stronger hooks to hang a hat on this week.  Tuesday brings the biggest number, retail sales for July.  Recall that last month’s report of a 0.5% decline in June kindled fresh speculation that the economy was tipping over and the Federal Reserve would be forced to act.  Economists generally expect a 0.2% increase in sales and 0.3% increase excluding automobiles.

The producer price index for July, also on Tuesday, is seen rising a benign 0.2% including and excluding food and fuel prices.  The consumer price index, to be released Wednesday is seen rising a similar amount.  Also Wednesday, the Empire State Index of August business activity in New York, industrial production in July and the homebuilders index are slated for release.

Also on tap are jobless claims, housing starts and the Philadelphia Fed’s survey on Thursday.

On the earnings front, big retailers are in the spotlight.  On tap to report quarterly results are Home Depot, Wal-Mart, Target and Sears.  The results could be key to setting the tone for the week.

This week, we inaugurate our Houdini Award with a nod to Goldman Sachs for escaping criminal prosecution for touting securities it was betting against, proving once again it’s better to be right and lucky.

And our Laurel Wreath goes to Shakespeare’s “scepter’d isle,” for hosting all the Bolts, Phelpses, Douglases and synchronized swimmers while delighting our teenage daughter with a closing ceremony performance of English boy band One Direction.

Meanwhile, U.S. investors prepare for the post-Olympics fiscal cliff-diving competition in 2013.  Good luck.

Elephants and Whales

We were deep into the healthcare reform summit, determined to figure out this enigma wrapped in a riddle, when a friend notified us that the women’s curling semi-finals were on the USA network. We left the gas bags behind and quickly switched channels.

You can have your Lindsey Vonns, Apolo Ohnos, Johnny Weirs and snowboard dudes and dudettes; we’ll take the ladies of delicate releases, gentle twists of slim wrists followed by the furious sweeping or gentle nursing of dedicated handmaids, aiding the direction and speed of m’lady’s stone.

It’s a chess match on ice, matched only by the thrust and parry of our republic’s representatives in advocating competing cures for healthcare nation. To hear them talk, one would think 300 million people were in the intensive care unit and the remaining few were asking the ailing if they want to live forever.

“It’s a thingy, a fiendish thingy!” as George Harrison exclaimed in the curling sequence in “Help!”.

Yes it is, George. Luckily, Ringo escaped the exploding stone and the Beatles found themselves at Scotland Yard, seeking protection.

“And you shall have it,” the intrepid inspector promised as he cowered beneath his desk.

Just as the wide-eyed Ms. Ott of Switzerland (is she related to Mel of New York baseball Giants fame, who caused Leo Durocher to famously assert, “nice guys, they’ll finish last”?) and the steely Ms. Bernard of Canada dueled in Vancouver, the lawmakers slid their stones, sweeping with statistics, studies and anecdotes in an effort to announce checkmate. Alas, it was a stalemate.

In curling, competitors get extra innings, er, “ends,” to determine a winner. In policy-making, suits and ties and strands of pearls spin stories until the mind is dizzy with argument.

It seemed to us that one of the purposes of these United States is to save capitalism from its voracious self. Someone has to train the captive elephant not to step on the fleas, or let the beast roam the savanna; persuade the captive killer whale not to eat its keeper, or let the whale kill who it might in the ocean.

‘Tis a special art, like curling and (dare we mention it) golf, which requires furious effort or benign neglect. Yet, as Joyce told us, the newspapers were right. The snow was general all over Ireland, falling faintly on the living and the dead.