WEEKLY QUOTE

“In times of rapid change, experience could be your worst enemy.”
- J. Paul Getty

CONSUMER PRICES UP 0.2% for January

Major factors in this increase in the Consumer Price Index include a 0.9% rise in the price of clothing as well as rising rents and healthcare costs. Core CPI also rose 0.2% in January. The annualized inflation rate hit 2.3% last month, yet the Federal Reserve expects but a 1.6% gain in the CPI across 2012. Wholesale inflation ticked up 0.1% for January, with the core Producer Price Index up 0.4%.

RETAIL SALES FALL SHORT OF (HIGH) EXPECTATIONS
The Census Bureau reported a healthy 0.4% rise in U.S. retail purchases for January. However, economists polled by Dow Jones Newswires thought they would rise 0.9% for the month. Subtract a 1.1% decline in auto sales from the data, and retail sales were up 0.7% for January.

LEADING INDICATORS Hit 3½-YEAR PEAK
The Conference Board’s Leading Indicator Index rose 0.4% in January, with seven of ten indicators improving. (The most notable positive detected: a widening in the spread between short-term and long-term interest rates.) The index advanced for a fourth consecutive month.

NASDAQ 3,000? DOW 13,000?

Both indices approached those psychological landmarks on Friday. The Dow went +1.16% for the week, the NASDAQ +1.65% and the S&P 500 +1.38%. At week’s end, the Dow was at 12,949.87, the NASDAQ at 2,951.78 and the S&P at 1,361.23. Oil futures soared 4.63% last week on the NYMEX to settle at $103.24 a barrel Friday. Gold had a flat week, settling at $1,724.50 Friday on the COMEX following a 0.07% five-day advance.

THIS WEEK: U.S. financial markets are closed Monday for the Presidents Day holiday; big news could come out of Europe Monday, as Eurozone finance ministers could greenlight a new bailout package for Greece. Tuesday, earnings reports roll in from Barnes & Noble, Macy’s, Dell, Saks, Wal-Mart, Kraft Foods, Home Depot and Radio Shack. Wednesday, the NAR puts out data on January existing home sales and quarterly results come in from Toll Bros., MGM, TJX, Dollar Tree, Fluor, Conseco, Hertz and Hewlett-Packard. Thursday brings earnings from Target, Kohl’s, Hormel, OfficeMax, Safeway, Sears, Public Storage, Gap and AIG. Friday, the final University Of Michigan consumer sentiment survey for February appears, the Census Bureau publishes January new home sales figures and J.C. Penney, Scripps and Berkshire Hathaway issue Q4 results.

“A successful person is one who can lay a firm foundation with the bricks that others throw at him or her.”

- David Brinkley

WEEKLY RIDDLE
A train moving as fast as it can go strikes a man’s hand, yet he is uninjured and the train goes off its tracks. Under what circumstances could this happen?

Last week’s riddle:
The wind is blowing east through the mountains. A lone pine tree stands on a cliff. Which way do its leaves blow?
Last week’s answer:
A pine tree has needles, not leaves. So no leaves are blowing in the first place.

WILL THE MORTGAGE ACCORD BRING MUCH RELIEF?
While the $25+ billion settlement reached last week between five large mortgage servicers and 49 states was momentous, it may not help many borrowers in trouble. Only about 1 million of the estimated 11 million underwater homeowners will see relief as loans sold to Fannie Mae and Freddie Mac aren’t included in the deal. Much of the settlement money will go toward mortgage modification. Roughly 750,000 homeowners are slated to receive financial compensation from the accord (an average of about $2,000 per household). The lenders involved are JPMorgan Chase, Bank of America, Ally Financial, Citigroup and Wells Fargo; other banks could join them. (The state of Oklahoma forged its own agreement with the five lenders.)

CONSUMER CONFIDENCE TAKES A DIP
The University of Michigan’s initial February consumer sentiment survey fell to 72.5 from its one-year peak of 75.0 at the end of January. Economists polled by Bloomberg News had expected a 74.8 reading. However, the percentage of consumers who felt the jobless rate would fall in future months was at the highest level the survey had seen in 28 years.

STOCKS RETREAT FOR THE WEEK ON FRIDAY LOSSES
When the Dow’s worst day of 2012 brings only an 89-point loss, it seems the year is off to a good start. That loss occurred Friday after another stall in the Greek debt negotiations. On the week, the major U.S. indices pulled back a bit: DJIA, -0.47% to 12,801.23; S&P 500, -0.17% to 1,342.64; NASDAQ, -0.06% to 2,903.88.

THIS WEEK: Monday, President Obama submits his 2013 fiscal budget proposal to Congress. Tuesday, the Census Bureau publishes January retail sales figures and MetLife issues Q4 earnings. Wednesday, the Fed issues the 1/25 FOMC minutes, the federal government comes out with figures on January industrial output and Q4 results arrive from Comcast, Deere, CBS, Abercrombie & Fitch and Nvidia. On Thursday, General Motors, Nordstrom and Baidu come out with earnings and new initial jobless claims are announced; January’s PPI is also released plus data on January housing starts, and Fed chairman Ben Bernanke speaks at an FDIC hearing. Friday, January’s CPI comes out along with the Conference Board’s newest leading economic indicator index; Q4 results come in from Heinz and Campbell’s Soup.

Sources: online.wsj.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/10/126,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

“If you would be loved, love and be lovable.”
- Benjamin Franklin

JOBLESS RATE DOWN TO 8.3%

Are we seeing a trend here? The unemployment rate has now fallen 0.8% in the last six months. We haven’t seen a descent this sharp and swift since 1984. January hiring blew away forecasts: the Labor Department said the economy added 243,000 jobs last month, while economists polled by Briefing.com expected non-farm payrolls to grow by 155,000 positions. The labor force hasn’t grown so much in a month since last April, and the numbers are making analysts wonder if the Federal Reserve will tinker with interest rates months ahead of expectations.

HOUSEHOLDS SAVE FIRST, SPEND SECOND

Consumer spending was flat in December after gains of just 0.1% in November and October. More significantly, consumer incomes rose 0.5% for December and so did the personal savings rate. People essentially put the extra money in the bank. In related news, the federal government estimated 2011 GDP at 1.7%, about half of the economic growth seen in 2010.

BOTH ISM INDEXES RISE
The Institute for Supply Management’s closely watched purchasing manager indexes signaled expanding service and manufacturing sectors in January. ISM’s service sector PMI improved 3.8% to 56.8. Its manufacturing PMI advanced 1.0% to 54.1.

CASE-SHILLER INDEX DECLINES AGAIN
This was the third straight monthly dip for the 20-city roundup of residential home prices. The latest available edition (November) showed a 1.3% monthly retreat in prices with a 3.7% year-over-year drop.

NASDAQ TOPS 2,900

The tech-heavy index closed at an 11-year high Friday: 2,905.66. The Dow settled at 12, 862.23 at week’s end, its best close since May 2008. The S&P 500 finished Friday at 1,344.90. The weekly gains: DJIA, 1.59%; S&P, 2.17%; NASDAQ, 3.16%.

THIS WEEK: Earnings take center stage in a stretch without much economic data. Monday brings Q4 results from Yum Brands, Humana and Hasbro. Tuesday, earnings arrive from Disney, UBS, Toyota, BP, Coca-Cola and Hartford Financial. Wednesday, Groupon, VISA, CVS, Sprint Nextel, Time Warner and Cisco join in. Thursday, the Bank of England and ECB wrap up policy meetings; new initial claims figures complement earnings reports from Expedia, PepsiCo, Dunkin’ Brands, Sirius XM Radio, Rio Tinto and Credit Suisse. Friday, the University of Michigan’s initial February consumer sentiment survey comes out plus Q4 results from Barclays.

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/3/12^1,7,8,9  Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

During the media tour launching The Compound Effect, CNN asked me to submit an article for their website. So, what do I have to say to CNN? Below is the article I submitted to my PR team. Even after they begged me to neuter it, to refocus it on 24/7 news (not just CNN and not just the Wolf man), CNN still didn’t have the backbone to publish the critical commentary. So I publish it here.

(CNN-) Disaster. Crisis. Failure. Scandal. Tragic. Devastation. Danger. Emergency. Threat. Crash… just a few words spoken by Wolf Blitzer in “The Situation Room” within only a five-minute span. If you listen to The Wolf, the world is coming to an end… every five minutes. And we wonder why people feel hopeless (giving up the belief that a job even exists), fearful (pessimistic about the future) and lack confidence (market and otherwise) when you have The Wolf & Friends spreading the gospel of fear, worry, danger and anxiety in our family rooms, offices, cars and airports 24/7.

The damage these constant and repeated messages have on our consciousness and creative potential is “devastating.” (see Media Madness video)

What controls your attention controls your life.

Where your attention goes, energy flows and so goes your life. When I interviewed racecar-driving legend Mario Andretti, I asked him for the No. 1 success tip to racecar driving. His answer, “Don’t look at the wall.” He explained, “Your car goes where your eyes go.” If you are a tightrope walker, what’s the one thing you never do? Right, look down. Why? Your body will follow your eyes. Your body (your life) also follows your eyes (your attention). If you point your eyes at Constant Negative News (there’s an acronym for that), your life will also go in that direction.

Your mind is like an empty glass. It will hold anything you put into it. You put in sensational news, salacious headlines and talk show rants and you are pouring dirty water into your glass. If you’ve got dark, dismal, worrisome water in your glass, everything you create will be filtered through that muddy mess, because that’s what you’ll be thinking about. Garbage in, garbage out.

You can flush your dirty glass with clean, clear, pure water. What is clear water? Positive, inspirational and supportive input and ideas. Stories of aspiration, people who, despite challenges, are overcoming obstacles and achieving great things. Strategies of success, prosperity, health, love and joy. Ideas to create more abundance, to grow, expand and become more. But it’s a constant battle as we are surrounded by those who want to spew dirty water into our glass constantly.

Why does The Wolf do it?

The fight for your attention has never been bloodier. Once upon a time there were only a few TV channels, a few radio stations (that came in), a few major newspapers and a handful of magazines. Now there are thousands of each, plus blogs, RSS feeds, text alerts, iPad apps, satellite radio, Pandora, tweets, Facebook posts and LinkedIn notifications, ad nauseam. So to compete in this bare-knuckled blood sport The Wolf has to shock you into paying attention to him (and his advertisers) and nothing gets your attention like good old-fashioned fear.

Your mind is not designed to make you happy. Did you know that? Happiness is not its job. Its main and sole concern is survival, to keep you alive, thus it is on constant watch looking out for any danger or impending threat. The Wolf knows this. The Wolf knows your mind better than you. He can’t get your attention (or the needed Nielsen audience measurement metrics) with happy feel-good stories and reports. Positive potential, abundance and optimism don’t grab your mind by the shirt collar like danger, disaster and tragedy does.

The media is crippling our creative potential.

You get in life what you create. Expectation drives the creative process. What do you expect? You expect what you are thinking about. Your thought process, the conversation in your head, is the foundation of the results you create in life. What are you thinking about? What is influencing and directing your thoughts? The answer: whatever you’re allowing yourself to hear and see. The input you are feeding your mind is what it is processing and thinking about.

If you listen to The Wolf you will be constantly reminded of, and thinking about, the tragic unemployment rate, the volatile and uncertain stock market, the gloomy state of the economy, scandals on Wall Street, gossip and shenanigans in Washington… after the relentless coverage of the latest tsunami, hurricane, car bombing, heinous murder and other calamities. Feed your mind repeated meals of that junk food and then wonder why you don’t feel very motivated to find a job or start a new business.

You can change the world—your world.

You can rid your world of all wars, murders, crimes, scandals, gossip, corruption and international disasters. You have that much power… in the palm of your hand.

How? Hit the OFF button. Turn off your TV. Turn off your radio. Cancel your newspaper subscription.

I learned an important life philosophy long ago. Control what’s controllable. What you can’t control is the national economy. What you can control is your economy. What you can’t control is what Washington does about healthcare. What you can control is the care of your own health. What you can’t control is how the president is running the country. What you can control is how you are running your business, household and life. What you can’t control is the war in Afghanistan. What you can control is the peace and harmony in your own home. Stop paying attention to what you can’t control, or it will control you and your life.

It’s time to take back control of your mind so you can take back your life. Stop letting other people influence your attitude, your hope for the future and your potential to do something great. Focus your mind and attention on what is right with the world and what’s possible for you. At the same time The Wolf is pointing out the 12 ugly, heinous, murderous and disastrous things that happened in the world today, millions of wonderful, miraculous and beautiful things happened as well. Step out of the perverted view of the world from “The Situation Room” and into the world of abundance, splendor and the unlimited positive potential that surrounds you every day. Focus your attention on ideas, information and knowledge that can help you grow, prosper, create and contribute to making a positive difference in your world… and you might just do something to change the world.

Bio: Darren Hardy, author of The Compound Effect—Jumpstart Your Income, Your Life, Your Success, is an accomplished entrepreneur, publisher and editorial director of SUCCESS magazine. He’s a peak performance expert and popular keynote speaker.