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"Two Bits"

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To quote my Dad, “two bits” was the cost of a shave and a haircut. Now it's the quarter percent rise in the US FED interest rate. Neither sounds like much but listen to the partisan groaning.

China Labour Bulletin says factory closings, labour strikes and layoffs reveal an economy decelerating faster than the government expected. Growth is slowest in 25 years – a failed promise for many families. The Fed rate increase could further exasperate China's efforts to lift its economic outlook.

Closer to home, Hudson's Bay which owns Saks Fifth Avenue is about to close a deal to buy Gilt Groupe for 25% of its 2011 value.

Hundreds of US companies are the subject of financial obfuscation – “adjusted earnings” that don't comply with GAAP (generally accepted accounting principles) and independent analysis. Some names include Post Cereal, Dupont Chemical, AT&T and Wendy's. Without the “adjustments”, third-quarter earnings results fell 13%: research Deutsche Bank.

While the Fed raised its overnight rate, the ECB and PBOC cut rates to combat slowing economies. This sets off a bout of divergence between the Fed and other major central banks. Global diversified Fixed Income is a consistent play for years to come.