Tuesday, January 31, 2012

It's The Economy Stupid: It's going to be a bumpy ride...

Just when you thought it was okay to think positively about the direction of the economy…

 

 

Home prices fell more steeply than expected in November, and consumers turned less optimistic in January.

 

So, there are still some hurdles facing the bumpy economic recovery.

 

The S&P/Case-Shiller composite index of single-family home prices in 20 metropolitan areas, released on Tuesday, declined 0.7 percent on a seasonally adjusted basis, a bigger drop than the 0.5 percent economists expected.

 

Separately, the Conference Board’s Consumer Confidence index of consumer attitudes fell to 61.1 in January from 64.8 the month before, as Americans turned gloomy about the job market and income prospects, said the Conference Board, representing private companies.

 

Also weighing on the market was the Chicago Purchasing Manager Index report that showed business activity in the U.S. Midwest grew more slowly than expected in January - the index fell to 60.2 compared with a forecast of 63 - hurt by a weaker labor market.

 

 

“Ladies and gentlemen, the Captain has turned on the Fasten Seat Belt sign. Please take your seat and fasten your seat belt. And also make sure your seat back and folding trays are in their full upright position.”

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd

 

Monday, January 30, 2012

It's The Economy Stupid: Greece Is The Word (again)

This piece is written by David Zervos (a Greek) who knows a thing or two about the Greek economy and the political machinations that are occurring about the Greek economy.

------------------------------------


----- Original Message -----
From: DAVID ZERVOS (JEFFERIES & CO., INC)
At: 1/30 10:09:09

Before diving into the latest chapter of the Greek debt saga, some housekeeping is in order. First, our database was somewhat overwhelmed Friday with around 3000 client requests. It is going to take a few days to get the master distribution list configured, so in the interim commentaries will be sent per the normal route. For those that did not see Friday's message, we will be moving to a non-forwardable commentary distribution structure. Any client who wishes to continue to receive the notes must go to the following link and fill out the required information.

http://www.jefferies.com/Zervos_subscription/

The second bit of housekeeping relates to our Global Macro Speaker Series event from last week with Marty Feldstein. We had a very strong turnout with about 150 folks for lunch in NYC. I will send out a recap of the discussion tomorrow, focusing on Marty's answers to the 10 questions I posed during the discussion. I know many folks were anxious to see his responses, but given the twists and turns in Greece over the last 72 hours, I thought I would focus attention there this morning. So without any further delays - here are some thoughts on the latest chapter in the Greek saga:

This past weekend the German economy minister and chairman of Merkel's coalition partner the FDP, Philip Roesler, openly called for Greece to surrender control of its budget in order to continue receive EU aid. In addition, there is a German produced document circulating amongst senior EU leaders which proposes a new EU "budget commissioner" who would have veto power over spending and tax decisions by the Greek government. Both the EC and the Greek government came out "strongly against" the proposal. But the German move has not gone unnoticed.

Of course, such a maneuver should surprise no one. Greece has been fighting off a hostile takeover from its neighbor to the north for centuries. From 1830s to the 1860s, and of course in the early 1940s, Germany directly controlled the country.

Statements from the German minister like this will surely generate acrimony and hostility across the Greek population. It will also jar some very painful memories. And this all kicks off as we head into the critical March 20th debt payment and PSI decision process. As the German politicians pour gasoline on a Greece that is already burning, there is really no hope for a harmonious solution. Greece will not and cannot pay its debts - just like in 1826 and 1932 - and the Germans have seemingly decided that they can quarantine the German financial system from the hard default fallout. As Karl Pohl said at the beginning of this crisis, the only reason the Germans have been paying bailout money is to protect their banking system. With the EFSF, ESM, LTRO and the stress tests in place, German policy maker confidence has grown. They have built a German TARP and TLGP structure so now is as good a time as any to pull the rip cord. Listening to Merkel in Davos it sure seemed like she was ready. So let the games begin.

Remember, the Europeans have yet to unleash defaults on their financial system. They have successfully instituted a "help for homeowners" program for their subprime borrowers - the PIIGS. Three 100b plus bailouts have stopped a Greek, Portuguese and Irish "foreclosure process". The SMP staved off a similar fate for Italy and Spain. But the coupon payments can only be paid by creditors for so long. Eventually the piper must be paid. And he who pays the piper gets to call the tune - which of course will be ""Deutschland, Deutschland über alles".

So how will this go down? Here is the most likely sequence imho –

- The EU leaders will not resolve anything today.
- There will be a PSI deal announced shortly and risk markets will rally for a few hours/days.
- But the take up on the PSI will not be enough and the deal will fail.
- The Greeks will reintroduce a CAC clause and the CDS will trigger.
- There will be a private sector default and the ECB will not participate.
- The fallout will quickly create "realized" losses at many European financial institutions.
- Bank funding will start to freeze, risk markets will dip and Portguese markets in particular will suffer significant losses.
- The Fed will quickly react to stave off any contagion to US financial institutions which could include the reintroduction of some funding facilities and an MBS QE3 program.
- The ECB will be less reactive but ultimately the Italians (with plenty of American pressure) will force the Germans to acquiesce. The ECB will backstop what remains of the European financial system with an LTRO structure that takes in pretty much any non-Greek or Portuguese asset that is on any non-Greek or Portuguese bank balance sheet.
- The "EMU 15" will then introduce a Eurobond structure and stronger but unenforceable fiscal discipline structure is agreed across the zone.
- Eventually strains will arise but the shedding of 2 PIIGS will be a short term positive for EMU.
- The Cypriots will also be at risk but the Russians will step in to keep them alive

Of course there are many possible permutations to this roadmap, but the baseline idea is fairly simple - a smaller EMU and massive policy stimulus. The risk asset dip will be short lived and those playing for chaos will have difficulty covering. Long risk + levered long blues, golds or Agency MBS should work well through the messy times.

Finally, I thought it would be useful to put some perspective on the history of German intervention in Greece. This is very important because Greeks continue to see themselves as part of Europe. They want to be European. But the German actions over the last 72 hours will play VERY poorly in Greece. It will not appear to the Greeks that they joined a "European" Monetary Union, but instead it will look like they made a Faustian pact with a very familiar foe. In any event let's go back to the history books for a moment –

Otto, a 17-year prince from Bavaria, was named King of Greece in 1832 after an 11 year battle against the Turks. He was installed by the UK, France and Russia who had financed the Greek uprising against centuries of Ottoman control in the 1820s. Of course, Greece defaulted on 600m francs of war debt in 1826, and part of the reason a monarchy was established was to get some cash back. However, King Otto was eventually exiled in the 1860s with no cash to show for his efforts. He also failed to convert Greeks from Orthodoxy to Roman Catholicism. He did however leave a nice palace which now houses Greek Parliament as well as a fancy square - "Constitution Square" or "Syntagma Square" - which is where the protests against his rule began. King Otto was adamant against the creation of a Greek constitution.

As today's title suggests the EU "budget commissioner" will look a lot like King Otto returning to Athens (singing that familiar German song). The motives of the Germans have become clearer by the day, and Greek politics is set to ignite a very ugly election period. The 2 far left parties (KKE and SYRIZA) are already calling for an early election and an end to the technocratic (German installed) government. The most recent KKE statement reads something like this – "it is up to the working people to upset their plans and to punish the accomplices severely. Class organization, popular alliance. Counterattack everywhere. Down with the parties of plutocracy. Out with their troika associates, disengagement from the EU with popular power that will write off the debt". At the same time Samaras is chillin in Moscow with Putin. The result looks to be a "Gazprom South" deal - http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_26/01/2012_424338. Of course, hooking oneself into the Russian gas complex is a recipe for Ukrainian style outcomes in Greek politics - messy indeed.

Greece can head in many directions and the upcoming political process will be extremely complex. Of course, we would continue to maintain that the best things for the Greeks is exit, drachma reintroduction and devaluation. And playing the EU against the Russians, the US and Chinese could suit Greece quite well in the coming years. It will be a fascinating spring in the Balkans. Strap in and always remember that the Fed and ECB will be forced to act decisively as the European subprime sovereign lending losses rip through EU financial institutions.

Before I wrap up, as I wrote today's note I could not help but recall King Otto's suicide squad from Monty Python's "The Life of Brian". It's a fantastic scene with plenty of quality English/German subliminal messages that make for a great chuckle on a sleepy Monday morning - http://www.youtube.com/watch?v=h1dZ0YddG7w. Enjoy! Good luck trading.

Thursday, January 26, 2012

It's The Economy Stupid: Durable Goods & Jobless Claims

Okay, strong Durable Good Orders.  Across the board, all good.  Jobless numbers weren’t as strong, but still in a better direction than last year.  All & all, pretty good stuff.

 

Economic Event

Period

Economic Survey

Actual Reported

Original Prior

Revised Prior

Durable Good Orders

DEC

2.0%

3.0%

3.8%

4.3%

Durable Goods Ex Transportation

DEC

0.9%

2.1%

0.3%

0.5%

Cap Goods Orders Non Defense Ex Air

DEC

1.0%

2.9%

-1.2%

 

Cap Goods Orders Shipped

DEC

1.0%

2.9%

-1.0%

 

Initial Jobless Claims

JAN 21

370K

377K

352K

356K

Continuing Claims

JAN 14

3500K

3554K

3432K

3466K

 

The blow back from the International Monetary Fund lowering the economic growth forecast for Europe not really a big deal.  Could it be that the rest of us already figured out that Europe has some economic problems???

 

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd

 

Wednesday, January 25, 2012

It's The Economy Stupid: Fed Says It's Keeping Rates Low Till 2014

Bernanke wants to throw more money at the problem.  Says ‘inflation is going to remain below target’.  He obviously hasn’t bought bacon in the last year.   I like the part about ‘talking’ about inflation keeping it ‘firmly anchored’.  That’s a hoot. 

 

That’s like saying talking about sex prohibits ….  Well, you know where I am going with that one.

 

-------------------------------

 

 

Wire: BLOOMBERG News (BN) Date: Jan 25 2012  13:43:58

Fed Says Key Interest Rate Will Stay Low Until Late 2014 (4)

 

By Craig Torres and Caroline Salas Gage

     Jan. 25 (Bloomberg) -- Federal Reserve officials said their

benchmark interest rate will stay low until at least late 2014

and anticipate that unemployment will remain high and inflation

“subdued.”

     “The Committee expects to maintain a highly accommodative

stance for monetary policy,” the Federal Open Market Committee

said in a statement released in Washington today. “Economic

conditions -- including low rates of resource utilization and a

subdued outlook for inflation over the medium run -- are likely

to warrant exceptionally low levels for the federal funds rate

at least through late 2014.”

     The Fed extended its previous pledge to keep rates low at

least until the middle of 2013 as more than two years of

economic growth have failed to push unemployment below 8.5

percent. Fed officials in a separate statement today lowered

their forecasts for economic growth and inflation this year and

in 2013.

     “What they’re doing is setting the table for some sort of

additional monetary easing,” said Scott Minerd, chief

investment officer in Santa Monica, California for Guggenheim

Partners LLC. “The changes in the statement from last month de-

emphasize growth.”

     Stocks rose and Treasuries extended gains. The Standard &

Poor’s 500 Index climbed 0.4 percent to 1,320.24 at 2:40 p.m. in

New York. The yield on the current five-year note fell nine

basis points to 0.80 percent after touching the record low of

0.76 percent.

 

                         ‘On the Table’

 

     Fed Chairman Ben S. Bernanke, speaking at a news conference

after the statements, said that the option of further large-

scale bond purchases is still “on the table.”

     “If inflation is going to remain below target for an

extended period and employment progress’’ is very slow, then

“there is a case’’ for additional monetary stimulus, he said.

     The Fed lowered its forecast for growth this year to 2.2

percent to 2.7 percent, down from a projection of 2.5 percent to

2.9 percent in November. It predicted the economy next year will

expand between 2.8 percent to 3.2 percent, down from a previous

forecast of 3.0 percent to 3.5 percent.

     In a separate statement of its long-range goals and

strategy, the FOMC specified a 2 percent goal for long-term

inflation, as measured by the annual change in the price index

for personal consumption expenditures.

 

                        ‘Firmly Anchored’

 

     “Communicating this inflation goal clearly to the public

helps keep longer-term inflation expectations firmly anchored,

thereby fostering price stability,” the panel said in a

statement. It also enhances “the committee’s ability to promote

maximum employment in the face of significant economic

disturbances.”

     Policy makers declined to specify a goal for employment,

saying that it “is largely determined by non-monetary

factors.” The committee’s longer-run forecast for the jobless

rate is 5.2 percent to 6 percent.

     The Fed said it would continue to extend the average

maturity of its $2.6 trillion securities portfolio, a move

dubbed “Operation Twist.” The Fed also maintained its policy

of reinvesting maturing housing debt into agency mortgage-backed

securities.

     “The Committee expects economic growth over coming

quarters to be modest and consequently anticipates that the

unemployment rate will decline only gradually,” the statement

said. “The Committee also anticipates that over coming

quarters, inflation will run at levels at or below those

consistent with the Committee’s dual mandate.”

 

                        Omit Description

 

     Richmond Federal Reserve Bank President Jeffrey Lacker

dissented, and “preferred to omit the description of the time

period over which economic conditions are likely to warrant

exceptionally low levels of the federal funds rate.”

     Recent reports on manufacturing, housing and employment

indicated that the economy was picking up speed as the new year

began.

     Employers added 200,000 jobs in December, twice the

previous month’s pace, and the unemployment rate dropped to 8.5

percent from 8.7 percent the month before.

     Household wealth is getting a boost from rising stock

prices. The Standard and Poor’s 500 Index climbed 4.5 percent in

2012 through yesterday, the best start to the year since 1997,

when it rallied 6.1 percent in the first 14 days.

     Harley-Davidson Inc., the biggest U.S. motorcycle maker,

reported $54.6 million income from continuing operations in the

fourth quarter compared with a loss of $42.1 million a year

earlier. Sales at the maker of Fat Boy and V-Rod motorcycles

rose 12 percent in the U.S.

     Investors are turning increasingly bullish on U.S. markets

as they declare its economy in better health than major rivals

from Europe to Asia, according to the Bloomberg Global Poll.

 

                         Highest Rating

 

     Forty-eight percent of respondents predict the U.S. will be

among the world’s best-performing markets this year, according

to the quarterly poll of 1,209 investors, analysts and traders

who are Bloomberg subscribers that was conducted Jan. 23-24.

That’s the highest rating for the U.S. since the poll began in

2009 and it’s more than twice that of Brazil and China, the

second-ranked markets.

     Private forecasters predict the U.S. economy will grow 2.3

percent this year, up from 1.8 percent in 2011, according to a

median estimate in a Bloomberg survey from Jan. 6 to Jan. 11.

     Fed officials are still concerned about the sustainability

of consumer spending as savings rates fall and as disposable

income adjusted for inflation shrinks, said Roberto Perli,

managing director of policy research at International Strategy

and Investment Group Inc. in Washington.

 

                          Europe Crisis

 

     A deeper crisis in Europe is another cause for concern. The

International Monetary Fund yesterday cut its forecast for

global growth this year and said the euro crisis threatens to

derail the world economy.

     For the U.S., “the top risks are unemployment and

Europe,” said Drew Matus, senior U.S. economist at UBS

Securities LLC and a former New York Fed staff member.

     UBS estimates that every 0.7 percentage point decline in

euro-area growth cuts U.S. output by 0.3 point. The IMF

yesterday forecast the 17-nation euro area would shrink 0.5

percent this year.

     Google Inc., owner of the world’s most popular Internet

search engine, last week reported fourth-quarter revenue and

profit that missed analysts’ estimates as a slowdown in Europe

crimped sales.

     Some Fed officials have indicated that they remain open to

more bond purchases to keep interest rates low and support

growth.

 

                          Option Open

 

     Atlanta Fed President Dennis Lockhart told reporters Jan. 9

that he hadn’t closed out “the option” for more stimulus,

while New York Fed President William C. Dudley said in a Jan. 6

speech that it’s “appropriate” to evaluate whether the Fed

could do more to boost growth.

     “Europe is the reason” Fed officials are considering

buying more bonds to boost the economy, said Lou Crandall, chief

economist at Wrightson ICAP LLC in Jersey City, New Jersey.

     “You want to gain as much momentum as you can in case

another storm hits,” Crandall said. “They are worried about

the lack of a catalyst in the U.S. to get us to escape

velocity” of self-sustaining growth.

     The Fed’s $2.3 trillion of bond purchases in two rounds of

so-called quantitative easing haven’t stoked inflation. A gauge

of consumer prices tied to personal expenditures, excluding food

and energy, rose 1.7 percent for the 12 months ending November.

 

For Related News and Information:

Credit crunch page: WWCC <GO>

Fed balance-sheet figures: ALLX FARW <GO>

Government relief programs: GGRP <GO>

Fed monetary policy: FOMC <GO>

Fed Web links: FRBM <GO>

Central bank rates worldwide: CBRT <GO>

 

--With assistance from Vivien Lou Chen and Steve Matthews.

Editors: Christopher Wellisz, James Tyson

 

To contact the reporters on this story:

Craig Torres at +1-202-654-1220

or ctorres3@bloomberg.net;

Caroline Salas Gage at +212-617-2314 or

Csalas1@bloomberg.net

 

To contact the editor responsible for this story:

Christopher Wellisz at +1-202-624-1862 or

cwellisz@bloomberg.net

 

 

[TAGINFO]

 

NI FED

NI CEN

NI GOV

NI REL

NI MOR

NI HOM

NI GFX

NI FRX

NI INF

NI LABOR

NI USECO

NI CRUNCH

NI BNK

NI HSNG

NI USB

NI TOP

 

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#<610782.1028300.2.1.95.14779.25>#

-0- Jan/25/2012 19:43 GMT

 

-----------------------------====================------------------------------

                     Copyright (c) 2012, Bloomberg, L. P.

 

################################ END OF STORY 1 ##############################

 

 

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd

 

Thursday, January 19, 2012

It's The Economy Stupid: Jobless Claims Fall to Lowest in Four Years

Jobless Claims in U.S. Fall to Lowest in Almost Four Years

 

Fewer Americans than forecast filed first-time applications for unemployment benefits last week, easing concern that post-holiday firings were on the rise.  Claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008. The median forecast of economists projected 384,000. A Labor Department spokesman said the decrease reflected volatility seen during this time of year (holidays).  The four-week average, which smoothes out fluctuations, decreased to 379,000 last week from 382,500.  Cleary companies are slowing the pace of firings and beginning to step up the pace of hiring even as there’s a slump in Europe. Although clearly Europe’s problems may limit U.S. growth.

 

Other data today showed housing starts in December dropped more than forecast and consumer prices were little changed. Housing starts dropped 4.1 percent to a 657,000 annual rate

last month, reflecting a slump in multifamily dwellings, Commerce Department figures showed. Building permits, a proxy for future construction, were little changed.

 

Cost of Living / CPI

 

The cost of living was little changed for a second month as stores cut prices to boost holiday sales.  The monthly figure was an increase in CPI of 0.1%.  Excluding volatile food and fuel costs, the Core CPI also rose 0.1 Percent.  The annual CPI / Cost of Living grew at 3.0%, in line with economist’s estimates, down slightly from the November rate of 3.4%. 

 

    

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd

 

Wednesday, January 18, 2012

It's The Economy Stupid: It's a MIRACLE!!!

U.S. Treasury says no to the International Monetary Fund’s request for to participate in $500 Billion European firewall fund.  Treasury says Europe has capacity to solve its own problems.

 

It’s a New Year’s Miracle!

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

 

It's The Economy Stupid: Your Government Dollars At Work

The Navy last month signed a $12 million contract to buy 450,000 gallons of fuel made from algae and used cooking oil, the largest biofuel purchase in U.S. government history. While that price amounts to OVER $26 a gallon, the department says the expenditure will help next-generation biofuels become competitive with conventional transportation fuels.

 

Okay, economically speaking, that’s STUPID.

 

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

 

It's The Economy Stupid: PPI & Industrial Production

Upside surprise on US core PPI, Broad-based rebound in US manufacturing output

 

The PPI declined by -0.1% MoM in December, below the consensus +0.1% MoM. The downside surprise largely reflected the food component, which fell -0.8% after six consecutive months of gains. The energy component was also down -0.8%, close to expectations. Core PPI surprised on the upside, rising +0.3%, two-tenths above the consensus. This partly reflected a rebound in the vehicle components, autos and light trucks.  Elsewhere, the picture was more mixed, with gains in pharmaceuticals, tobacco and women’s apparel offset by declines in electronic equipment, appliances, and men's apparel.

 

Industrial production rose +0.4% MoM in December, in line with consensus +0.5%. There was a sharp -2.7% decline in utilities output offset by a much stronger-than-expected +0.9% increase in manufacturing. The upside surprise partly reflected the vehicles component, which rose +0.3%. By industry group, both durable and nondurable components rose.  Looking ahead, the continued upward trend in manufacturing surveys and the strong rebound in the level of output in December appears to have set a nice base for further production growth in Q1.

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Thursday, January 12, 2012

It's The Economy Stupid: Jobless Claims & Retail Sales

Economic Event

Period

Economic Survey

Actual Reported

Original Prior

Revised Prior

Advance Retail Sales

DEC

0.3%

0.1%

0.2%

0.4%

Retail Sales Less Autos

DEC

0.3%

-0.2%

0.2%

0.3%

Retail Sales Ex Auto & Gas

DEC

0.4%

0.0%

0.2%

-

Retail Sales "Control Group"

DEC

0.3%

-0.2%

0.2%

0.3%

Initial Jobless Claims

JAN 7

375K

399K

372K

375K

Continuing Claims

DEC 31

3595K

3628K

3595K

3609K

 

 

Okay, no one saw the increase in jobless claims coming.  That was a negative surprise.  And frankly, the December retail sales was an abysmal number. (Remember December?  There’s this Christmas thingy that goes on in December.  Supposedly a lot of people buy stuff for that.) Ugh!  Seems like we take a couple of steps forward, and then a giant step backwards. 

 

Oh well, one month doesn’t make a trend.

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd

 

Wednesday, January 11, 2012

Visions of Curly Hallman

    

Rivals.com   Yahoo! Sports Home 

   

Tiger Penthouse

The Tiger Den

 

January 11, 2012

 

Bryan Lazare

TigerBait.com Senior Writer

 

LSU coach Les Miles always talks about his team winning all three phases - offense, defense and special teams.

 

Well, Miles' Tigers squad was 0-for-3 in those areas in the Mercedes-Benz Superdome on Monday night. As a result, LSU is not the 2011 college football national champion.

 

Alabama, the Southeastern Conference Western Division runner-up to the Tigers, won all three phases en route to its 21-0 victory in the BCS national title game. For such a result, one must give the nod to Nick Saban over Miles in the coaching matchup.

 

There was no game this season that LSU was beaten as soundly as it was Monday night. The 21-point loss was the worst for the Tigers since they lost to Florida 51-21 three seasons ago.

 

Without a doubt, LSU took its worst pounding when it had the football. Everyone knows by now that the Tigers didn't run a play in Crimson Tide territory until the fourth quarter. With a first down at Alabama's 32, LSU went backwards.

 

On first down, Michael Ford took an option pitch and was dropped for a three-yard loss by DeQuan Menzie. The Tigers were pushed back five more yards when Chris Faulk was penalized for a false start. On second down, Spencer Ware failed to haul in a Jordan Jefferson pass.

 

On third down, Jefferson overthrew an open Jarvis Landry over the middle. On fourth down, Dont'a Hightower sacked Jefferson, who fumbled. Nick Gentry recovered the ball at midfield. Therefore, no LSU possession ended in Alabama territory.

 

In LSU's 9-6 victory against the Tide back in November, its only offensive call which worked was the option. Now, everyone could be assured that Saban would have his defense ready for the option in the rematch. That scenario definitely played out. The Tigers did nothing with the option.

 

The most disappointing part of the offensive game plan was the lack of another way to attack the Alabama defense. LSU didn't try to run the ball inside as Kenny Hilliard and Ware had a combined eight attempts. Of course, it didn't seem that the Tigers line could block the Crimson Tide front.

 

So, that left LSU to build the offense around Jefferson. Now, everyone knows that Jefferson is not a very accurate pocket passer. He needs to throw the ball on the move with rollouts and boots. Everyone saw a quarterback use those types of passes quite successfully Monday.

 

Unfortunately, it was Alabama quarterback AJ McCarron. The Tide had 23 pass completions with 11 going to tight ends and running backs. Brad Smelley had seven catches for 39 yards. Alabama always had a way of gaining yards on early downs.

 

The LSU offensive staff didn't follow suit. One bootleg pass was called for Jefferson. For the most part, Jefferson sat in the pocket. As the game wore on, the Crimson Tide turned up the pass rush. Jefferson was sacked four times and scrambled four other times. He also threw an interception to avoid a sack.

 

There were three offensive plays in the first quarter which set a horrible tone. On the first series, the Tigers had a manageable third-and-two from their 36. The play never developed as Jefferson dropped the shotgun snap from center P.J. Lonergan.

 

LSU started the second series from its 21. That possession never had a chance as tackle Alex Hurst was called for a false start before the first play. That penalty was the first of three false starts against the Tigers.

 

On its third series with Alabama ahead 3-0, LSU picked up a first down on a Jefferson scramble. Facing a third-and-four from the Tigers' 47, Jefferson threw a pass in the flat to Alfred Blue. It appeared that Blue had room for a first down.

 

Blue merely had to avoid a Tide linebacker. Blue was very unsuccessful as C.J. Mosley tackled Blue not for a short gain, but for a three-yard loss. The Tigers never got close to midfield again until they trailed 12-0.

 

Once again, the Crimson Tide secondary made Rueben Randle a non-factor. He gained 13 yards on three receptions. In the first game, Randle snagged only two passes for 19 yards. Russell Shepard wasn't utilized in any manner. Odell Beckham was the one receiver targeted by Jefferson.

 

For the first time since Miles became coach, LSU failed to score a point. The game plan wasn't the best. Once the offensive line couldn't open any holes or stave off the pass rush, Jefferson had no chance. Miles had no intention of using Jarrett Lee, who lacks mobility, against the Tide defense.

 

The Tigers defense played well enough to keep the team in the game. Even though the LSU offense was non-existent, Alabama didn't clinch the victory until Trent Richardson's 34-yard touchdown run inside the five-minute mark of the fourth quarter.

 

The Tigers held the Tide to seven field goal attempts, However, Alabama got about ten yards deeper each time than it did in the first game. None of the five field goals made by Jeremy Shelley were longer than 44 yards. More importantly, the defense caused no turnovers.

 

Saban put the game on the shoulders of McCarron, who responded with a 234-yard passing night. Richardson was used as a secondary option. He had 22 touches - 20 runs and two catches - for 107 yards. Marquis Maze injured a hamstring in the first quarter and didn't play the rest of the night.

 

So, it wasn't a game plan dominated by Richardson and Maze. The Tide went to the air with McCarron finding the other receivers - Smelley, Darius Hanks and Kevin Norwood. Hanks and Norwood combined for 136 yards on nine catches.

 

Tyrann Mathieu was victimized in coverage when he lined up on the outside on patterns similar to the ones used by Tennessee's Da'Rick Rogers. The bootleg action by McCarron negated LSU's pass rush. The Tigers had two sacks and rarely pressured McCarron.

 

It was expected that LSU would use a different offensive strategy in which it moved Jefferson in the pocket. Instead, Alabama put McCarron on the move with great success.

 

Finally, the Tigers had to win the special teams matchup in order to come away with a victory. LSU surprisingly had the poorer kicking teams Monday. Maze had a 49-yard punt return to set up the first Alabama field goal. Mathieu had one punt return for one yard.

 

Christion Jones took James Hairston's lone kickoff about five yards deep in the end zone. Jones brought the ball out to the Tide's 32. Alabama drove for a field goal to put it on top 12-0. LSU had six kickoff returns - five by Morris Claiborne - and never reached its 30.

 

Then, Jeremy Shelley connected on five of seven field goal attempts. The only key play by the Tigers came on a blocked field goal by Michael Brockers. But, that second-quarter play brought about no change of momentum.

 

Finally, there is the issue of stadium atmosphere. In LSU's national title game victories against Oklahoma and Ohio State, it definitely had a Superdome homefield advantage. There was no such situation Monday. At best, the crowd was evenly divided. There could have even been a few more Alabama fans.

 

There was a competition for secondary tickets - those not sold by the schools. Give the Alabama fans credit for doing a good job at not letting LSU fans dominate the Superdome. The fact that the Tigers didn't have a decided edge in crowd noise prior to the game was an indication of what was to come.