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Five Things You Need to Know for Wednesday


What you need to know (and what it means).


Five things you need to know to stay ahead of the pack on Wall Street.

1. Durable Goods Orders

Durable Goods orders for March jumped 6.1%, far higher than the median Reuters forecast of 1.6%.

  • Durable Goods orders, reported by the U.S. Commerce Department, are described as long-lasting goods (meant to last three years or more) and include machinery and equipment, trucks, aircraft and defense goods.
  • It was the largest gain in durable goods orders since May 2005.
  • Transportation equipment had the largest increase, up 14%, but even without Transportation orders rose 2.8%
  • All categories rose with the exception of electrical equipment and defense aircraft.
  • While new orders were up sharply in the past two months, shipments of durable goods rose just 0.3% in March.
  • Unfilled orders, which economists view as a sign of future production, were higher by 2.8% following February's 1% rise.

2. What we've got here is... failure to communicate.

Under the guidance of Chairman Ben Bernanke, the Federal Reserve is set to embark upon a comprehensive internal review of longstanding Fed communication policies and tools established for the dissemination and discussion of Fed qualitative information hierarchies and policy-making determinants in the context of private and professional investment discourse as provided for by various outlets vis-a-vis the protocols of the separate but equal 12 district banks and their presidents, as well as the role of Fed Chairman in Congressional testimony, relative to guidance and transparency in all ongoing policy and forward-looking economic data surveillance, under which all statements made or suggested by members may influence, without reducing the effectiveness thereof, the appropriate level of description and clarity, generally speaking, that is necessary for the effective forecasting by investors and future stability qua stability of financial markets.

  • The Federal Reserve is preparing a comprehensive internal review under Chairman Ben S. Bernanke's guidance.
  • The purpose of the review is to help provide the public with more insight into Fed deliberations.
  • The examination will take months and seek a consensus among all 19 members of the bank's rate-setting Open Market Committee.
  • Press conferences and the publication of specific forecasts for economic growth and inflation may be among the new tools the Fed uses to provide more transparency.
  • The Bank of England, the Bank of Canada, the European Central Bank and the Bank of Japan each have regularly scheduled press conferences to discuss policy-making and economic forecasts.

"You gonna get used to wearin' them chains afer a while, Luke. Don't you never stop listenin' to them clinking. 'Cause they gonna remind you of what I been saying. For your own good."

3. New Home Sales

After a steep plunge in February to their lowest level in five years, new home sales are expected to come in slightly better in March.

  • Yesterday's existing-home sales were higher than expected so getting a read on today's new home sales number is more difficult.
  • It should be noted, however, that the steep plunge in February, (-10.52%), which followed a (-5.33%) decline in January, suggested new home sales have not benefited as much as existing-home sales from better-than-expected weather in the reporting period.
  • The pace of sales last month was the slowest since May of 2003.
  • Most are expecting a modest increase to 1,106k units in March, which would still be below the January figure of 1,207k units.
  • New Home Sales data is considered to be a much better gauge of current housing activity than Existing Home numbers.

4. What's in Your Wallet?

Bank of America (BAC) Chairman and Chief Executive Kenneth Lewis said the company may be interested in starting a credit-card processing network and a new brand of card to compete with Visa, MasterCard, Discover and American Express, the Wall Street Journal reported this morning.

  • BAC has more than 41.9 million credit-card accounts, nearly a fifth of the credit cards issued by the top 50 banks issuers, according to the Nilson Report.
  • Currently, BAC issues its credit cards through Visa.
  • According to the WSJ, analysts estimate BAC pays approximately $0.08 per $100 in spending $0.06 per transaction.
  • The irony of BAC's current situation is that one of the company's forefather institutions, BankAmerica of San Francisco, brought to market the first credit card, the BankAmericard.
  • BAC took over MBNA, a credit-card issuer, on Jan. 1 for $34.2 billion.
  • According to the WSJ, Nilson Report publisher David Robertson suggested BAC could be discussing the start of its own credit card processing network as a ploy to negotiate better terms with its current credit card processors.

Not actual size.

5. Twenty Percent of You Have Some Kind of Shoddy, Fake Excuse for Being Late to Work Today

One-in-five workers admit to making up fake excuses to explain their tardiness, according to a survey.

  • A survey by found that One-in-ten workers -- 13 percent -- say they arrive late to work at least once a week and 24 percent say they arrive late at least once a month.
  • The most popular excuse for being late to work? Traffic.
  • Monday is the most popular day for showing up late.
  • Thirty-five percent of managers say most of the time they don't believe employee excuses for being late.
  • Among the most bizarre excuses for being late, according to CareerBuilders:
    - I had to take my cat to the dentist.
    - I saw that you weren't in the office, so I went out looking for you.
    - I dreamed that I was fired, so I didn't bother to get out of bed.


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