The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

I will be incommunicado today, winging my way back from Berlin for 8 und eh heff hours. I wrote this back in 2005, but never published it widely.

Enjoy:

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What sort of crap do you have lurking hidden on your iPod?

That’s the question on an older article I stumbled across from my old e&e blog.  The Arizona Republic asked:

“Those saccharine pop tunes and schmaltzy ballads cloaked from friends? There’s no excuse anymore. No blaming it on a CD that had just one song you liked. No claiming it belonged to your wife, husband or friend.You selected each and every tune. Like it or not, these are your greatest hits.

Now, let the melodic mocking commence.”

OK, I’m guilty as charged. Not only do I have a slew of really embarrassing guilty pleasures on my pod, but they have actually found their way on to various mixes I’ve made. That means, no excuses.

How about you? What embarrassing ditties would your close friends be aghast about — if they knew? Since our last interactive musical discussion — Greatest American R&R Band — was so much fun, let’s take another swipe at it:

What are the most horrendous, embarrassing, guilty pleasures on your iPod?

I’ll start the HD spinning with my hidden collection of pathetic guilty pleasures (’tho music snob that I am, I foolishly believe my guilty pleasures are superior to most people’s — indefensible as that position might be).

These lists go from least (10) to most (1) embarrassing.

Generally embarrassing pop orotherwise awful commercial song:

10. Semi-Charmed Kinda of Life, Third Eye Blind
9. Undone – The Sweater Song, Weezer
8. Horndog, Overseer
7. Hey Leonardo (She Likes Me for Me), Blessid Union Of Souls
6. I Touch Myself, Divinyls
5. Closing Time, Semisonic
4. Complicated, Avril Lavigne
3. (I Hate) Everything About You, Ugly Kid Joe
2. She Hates Me, Puddle of Mudd
1. Mmmm Bop, Hanson

These are the utterly embarrassing songs on my “Gym Mix” :

10. I’m Just a Girl, No Doubt
9. Groove Is In The Heart, Deee-Lite
8. Take It Off, The Donnas
7. Fantastic Voyage, Coolio
6. Murder On The Dance floor, Sophie Ellis Bextor
5. Good Vibrations, Marky Mark
4. Steal My Sunshine, Len
3. That Don’t Impress Me Much, Shania Twain
2. I Just Want to Make Love to You, Foghat
1. Rico Suave, Gerardo

And lastly, a mix I named “Bad radio from my Youth” — and it is utterly ghastly:

10. Bad Time (for Being in Love), Grand Funk Railroad
9. Keep On Loving You, REO Speedwagon
8. Day After Day, Badfinger
7. Without you, Badfinger

A two way tie of simply awful for 3rd place:

6. (Shake, Shake, Shake) Your Booty, K.C. & The Sunshine Band
5. Keep It Comin’ Love, K.C. & The Sunshine Band
(I’ve actually grown to like some other KC stuff, but these 2 — shudder — sheesh!)

A three way tie totally lacking any redeeming qualities for 2nd place:

4. Cover of the Rolling Stone, Dr. Hook & The Medicine Show
3. When You’re in Love (with a Beautiful Woman), Dr. Hook
2. Sylvia’s Mother, Dr. Hook

Last, and actually least, a song beyond bad:

1. Coconut, Harry Nilsson

There, I’ve outed myself and my misspent youth . . .

There are some interesting comments on this issue over at kottke, which is where I originally saw the pointer for this. Since then, there have been over 100 entries of guilty iPod pleasures, including what must be the playlist from Hell.

Check it out . . .

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Sources:
iPod guilty pleasures
Don Fernandez
Cox News, Sept. 11, 2004 12:00 AM
http://www.azcentral.com/ent/pop/articles/0911ipod11.html

Most investors know that the S&P 500 hit a record high in October 2007 and a (the?) low in March of this year. But when you break it down by sector, things are a bit more complicated.

Otherwise, for those who are wondering whether there is more upside ahead, the fact that four groups — telecom services, financials, energy, and utilities — have not seen new highs this month while the S&P 500 has might be a cause for concern.

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Some good learnin’ here:

This web site stems from a personal interest in critical thinking and is a collection of links to articles and sites pertaining to numeracy and critical thinking. Links should be good for at least the date posted. After the posting date, link reliability depends on the policy of the linked sites. Some sites may require registration before allowing access.

The Quote of the Day comes to us via Bloomberg’s Alice Schroeder:

“We’re in the midst of a deflationary trend that is temporarily being masked by inventory restocking and free lunches like Cash for Clunkers. Consumers are done with borrowing. They’ll keep refueling the deflation by going through their attics and garages to find stuff they can sell on Ebay to raise cash.”

-Gold Tells You U.S. Bubble Hasn’t Popped Yet

OK, it’s not quite the “magazine cover indicator”…

…but surely this must be telling us something about the gold market (lol)?

Hat tip LOLFed

Source:
Cats for Gold
http://www.catsforgold.com/

Evan Newmark writes a regular column on the WSJ’s Deal Journal. His stock in trade is contrarian takes on the markets and politics. To the extent that he represents an extreme version of the Wall Street world view, he’s a bellwether.

Yesterday, he may have run the bell a bit too hard. In a post explaining why Goldman Sachs has nothing to apologize for–a completely legitimate position that can be debated with great nuance from both sides–Newmark insists on rolling this M-80 under the chairs of his readers:

In an economy full of losers, everyone is fixated on hating the winner.

He’s right about the world fixating on a winner. Goldman has made itself a lightning rod for the nation’s frustrations by being particularly ham-handed in their handling of their compensation. But that isn’t the issue here.

Where does Newmark get off describing the US as an economy full of losers? Does he not recognize that the vast majority of workers at all salary, skill and social levels who are out of work right now have lost their jobs due to the miscalculations and mismanagement of others?

The decisions that led to their dire financial situations certainly were not theirs. The loss of their jobs didn’t come because they were incompetent or made lousy products. You could blame them if those problems appeared over time as with the automakers but this is a collapse, an exogenous event in their working lives.

It’s bad enough that the world economy was mismanaged to a level that created a disruption that will fall disproportionately on persons who had no role in creating the bubble or reaping its rewards. That may be unfortunate and unavoidable. But do they really deserve to have Marie Antoinette Newmark call them “losers?”

Later, Newmark sums up with a thought that applies equally (in reverse) to himself:

It’s much easier for the public to point the finger at the great Goldman conspiracy than to point it at itself.

Source:
Don’t Apologize for Anything, Goldman Sachs
EVAN NEWMARK
Deal Journal/Wall Street Journal ; Nov. 19, 2009
http://blogs.wsj.com/deals/2009/11/18/mean-street-dont-apologize-for-anything-goldman-sachs/?mod=djemDeal

Back in October, I laughed off the latest China GDP data as utterly fabricated.

As it turns out, I was not the only one. China expert Gordon G. Chang (author of The Coming Collapse of China) is more than skeptical — he has the data to question much of China’s growth miracle.

Spoiler alert: Its been wildly exaggerated:

“Beijing, in the 1990s, ordered factories to churn out goods in periods of low demand, and there are indications that officials are resorting to this tactic now. While optimistic analysts point to astounding car sales–up 70.5% in July, 94.7% in August and 83.6% in September–there are reports that central government officials have ordered state enterprises to buy fleets of vehicles and that these businesses are storing them in parking lots across the country. These stories are as yet unconfirmed, but they are consistent with statistics showing that gasoline sales have been flat this year–up only 6.4% in August, for instance, and sliding since then from all indications. So here’s another question: At a time when economic activity is supposedly rising at a quick pace, how can large increases in passenger vehicle sales not be accompanied by corresponding surges in fuel usage? (emhasis added)

The answer is that Beijing’s statisticians have gone back to their old tactic of making up figures to support the Politburo’s predictions. The Chinese economy is probably growing due to state-led investment, but it cannot be doing so at the rates claimed. Wen Jiabao’s stimulus plan is, above all, grossly inefficient. For all the money he is pouring into the economy, the country is getting a small return in economic output. That’s why Premier Wen, despite the high growth numbers he’s been reporting, consistently refuses to end his stimulus program. If his numbers were real, he would be worried about overheating. But he’s apparently not.”

Gee, whoever would have guessed that a Totalitarian government would lie in its official data?

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Previously:
Who Believes China’s ‘Bernie Madoff’ Data? (October 22nd, 2009)
http://www.ritholtz.com/blog/2009/10/who-believes-chinas-bernie-madoff-data/

Source:
China’s 8.9% Growth? No Way
Gordon G. Chang
Forbes, 10.23.09
http://www.forbes.com/2009/10/22/china-growth-gdp-economy-opinions-columnists-gordon-g-chang.html

Compared to historical norms, Nasdaq market capitalization is significantly above median levels relative to GDP.

The Nasdaq’s median percentage of GDP has averaged 61.8%; its now over 100%. As the chart below shows, the big aberrational periods have been due Fed bubble inflation: first in 1998-2000; then more recently in 2006-07.

The present Zero Interest Rate policy (ZIRP) is helping to inflate a 3rd market bubble:

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Chart courtesy of Ron Griess of The Chart Store.

Phil Gramm, the former Republican Senator from Texas who co-wrote the act that undid Glass-Steagall, has our DQotD:

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“I’ve never seen any evidence to substantiate any claim that this current financial crisis had anything to do with Gramm-Leach-Bliley. In fact, you couldn’t have had the assisted takeovers you had. More institutions would have failed.”

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Your dumb Quote of the Day is sponsored by Cognitive Dissonance, a Nasdaq Company . . .

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Sources:
Wall Street Faces ‘Live Ammo’ as Congress Aims to Unravel Banks
Alison Vekshin and Robert Schmidt
Bloomberg, November 12 2009
http://www.bloomberg.com/apps/news?pid=20601109&sid=az7AcisnxsCA&pos=11

As long as I am here in Europe, I might as well give you some flavor of what has become known as Recession Porn: The most dire forecasts expecting the most egregious outcomes.

Today’s “Crisis Porn” comes to us via Société Générale by way of the UK’s Telegraph, and its Pretty grim:

“In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years.

“As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse,” said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.

Under the French bank’s “Bear Case” scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

Note that the report is a “worst case scenario.” That’s your recession porn for the day . . .

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Source:
Société Générale tells clients how to prepare for ‘global collapse’
Ambrose Evans-Pritchard
Telegraph, 6:12PM GMT 18 Nov 2009
http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html