Cheech and Chong, up in smoke, and at work
Recapping the day's news and newsmakers through the lens of CNBC.
Here's one for anyone who hires and fires: can you fire a worker for smoking pot if it's legal? It will be in Colorado, starting next month. The short answer is, we don't know. It will probably take a string of court cases to clear things up. For now, employers who want to ban drug use can cite federal law, which still makes marijuana use illegal and may trump state laws that say otherwise.
Of course, pot smoking on the job could be treated like boozing on the job, which employers are free to ban. But pot smoking off the job is a trickier issue. It gets even more complex if the off-job toking is for an approved medical purpose. Two court cases in Colorado have upheld an employer's right to fire workers for smoking medicinal marijuana off the job, but appeals are coming. Though Colorado makes pot legal, it does ban driving under the drug's influence, so employers have reason to believe some level of restriction will be acceptable.
"Employers big and small across the state are really struggling with these questions. They have to come up with testing protocols that don't alienate their own employees but cover themselves from liability, as well."—Danielle Durban, a Denver-based employment attorney at Fisher & Phillips LLP
Shutting up about the shutdown
Employers created 215,000 jobs in November, surprising economists, who had forecast 173,000. ADP also revised its October figure to 184,000, up from 130,000 initially reported. Most economists had expected more damage from the partial government shutdown. Service industries accounted for the lion's share of November's figure, adding 176,000 jobs. The good numbers fanned speculation that the Federal Reserve could start cutting back its stimulus program.
"This feels pretty good. I'm surprised at how well the job market held up in the face of what happened in Washington."—Mark Zandi, an economist with Moody's Analytics, which assists ADP in putting together the monthly report
Housing spike, or anomaly?
Sales of new single-family homes leaped in October, recording the biggest increase in 33 ½ years. The Commerce Department said sales jumped 25.4 percent to an annual rate of 444,000 units. Economists had expected 228,000. New-home sales are counted when contracts are signed. The gain came despite a rise in mortgage rates since spring, but coincided with a slight dip in rates in October. At October's pace, it would take 4.9 months to clear home inventories, down from 6.4 months in September. A six-month supply is considered healthy.
The big question: Will the higher rate of sales hold after today's "preliminary" number is revised? Was the jump an anomaly caused by pent-up demand released when loan rates dipped?
"The October 'preliminary' report released this morning, along with the terrible August and September data, is the outlier and will be revised lower next month in line with the new trend lower that began in July."—Housing analyst Mark Hanson, Mark Hanson Advisers
Shock and Libor
The European Commission has imposed a record fine on major banks for rigging key interest-rate benchmarks, the European and Yen London interbank offered rates. The $2.3 billion fine was levied on Citigroup, Deutsche Bank, Royal Bank of Scotland, JPMorgan and Societe Generale.
"What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other."—EC President Joaquín Almunia
—By Jeff Brown, Special to CNBC.com