Afternoon Reading
By Barry Ritholtz - July 7th, 2009, 2:30PM
Some interesting items that caught my fancy:
• Picks and Pans From Market Pros (WSJ)
• Study: Many Mortgage DefaultsAre Intentional (Time)
• Interview: Rolling Stone Matt Taibbi of GS bashing fame (Wall Street Cheat Sheet)
• Glut of oil could push gasoline prices back down below $2 a gallon (LA Times)
• Oil, Gas Market Speculation May Face Restrictions (Bloomberg)
• How to think about a jobless recovery (Economist)
• Good Riddance SIVs (FT)
• Banks Planning “Harry and Louise” Ads (TNR)
• Porn Downloads Strain Japan Phone Network, Prompt DoCoMo Curbs (Bloomberg)
• E-tailers Grapple with Sales Tax
• Michael Jackson Tour Plan Shows Concerts Are Where Money Is (WSJ)
I miss anything noteworthy?
July 7th, 2009 at 2:36 pm
Here’s another interesting item – someone FINALLY put an inflation-adjusted ranking of the top grossing movies of alltime. If you really think about it, it is ridiculous that box office “records” have not been kept in inflation-adjusted terms all these years.
http://www.bloomberg.com/apps/news?pid=20601088&sid=aLzh3gmCoWdo
July 7th, 2009 at 2:52 pm
@E Says
I want to know how “An Inconvenient Truth” stacks up against “Bill & Ted’s Excellent Adventure”…
July 7th, 2009 at 2:56 pm
A suggestion:
My google alert on Hugh Hendry produced a link to an FT video interview of Hugh Hendry by an intelligent woman. Like Gaul, it is divided into three parts covering the big issues. I still think he is great.
First video here:
http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.html?_i_referralObject=6506752&fromSearch=n
July 7th, 2009 at 3:06 pm
Here is a great, non-mathematical explanation of why all those sophisticated VAR programs didn’t work. I even passed the link along to people whose eyes glaze over when I talk math.
http://www.psyfitec.com/2009/07/quibbles-with-quants.html
July 7th, 2009 at 3:13 pm
Speculation restrictions on energy?
As BR says, I’ll believe it when I see it. Just words.
But at least at some level the truth is getting out to people. Duh. $4 gas. And we were told it was market forces that were needed to “find” the price point. Right. Just like cheese.
July 7th, 2009 at 3:17 pm
BR: That link to the Times article suggesting that mortgage defaults are intentional .. doesn’t work. Although I could interpret it as a snarky riposte to the (lack of) logic that must be used to believe such Republican twaddle, it’s probably just a linking oversight.
July 7th, 2009 at 3:18 pm
@Mike in Nola: Great video clip. That guy’s great. It’s great that he was allowed to talk without constantly being interrupted. Thanks for sharing.
July 7th, 2009 at 3:26 pm
re the Taibbi interview- Taibbi has an interesting observation-
“…the mainstream press — which should be covering politics and finance — are doing such a terrible job, it opens great opportunities for smaller news organizations that wouldn’t have had them previously. The only reason Rolling Stone can even think about having an important voice in financial reporting is a result of the traditional financial reporters blowing the stories for the past five or six years or so.”
no kidding- if Rolling Stone is out reporting the MSM in business and finance- we have to be suspect of what MSM’s real objective is- and getting to the truth is not at the top of the list
July 7th, 2009 at 3:30 pm
I welcome Harry and Louise telling us that we can’t be told what to buy or not (ironic that… anyway) since I’m looking at a mortgage from the corner non-bank financial institution: a zero-down, fifty year, six month teaser, resetting to your Capital One Credit Card’s APR plus five percent, recourse first… with a piggy-backed second in US minted gold coins.
July 7th, 2009 at 3:43 pm
The big banks need to be boycotted by the American public, period. If our govt won’t put them out of business then we should. I won’t hold my breath though.
I really don’t know why people bank with these slimy, bureaucratic thieves. There are so many better alternatives out there; small banks, credit unions.
What is it that draws people to them?
Big name recognition? Have we been so conditioned to buy brand name that people think it must be better if they’ve seen a national advertisement from them?
I don’t know, but I won’t give them my money. And if we all starved them of capital they’d wither on the vine. What a happy thought.
July 7th, 2009 at 3:54 pm
onlooker-
I think a bit of that is going on with people who are cognizant of what has been happening- many people just don’t understand because it does not interest them or maybe they are just not too bright- and then we need to define what banks we are talking about-
just Citi, BAC and Chase? or all that received tarp funds? – from what has come out- it appears some banks were pretty much forced to participate- and should we include GE?- they are issuing bonds that are guaranteed by the USG under one of their many facilities- so it’s a big slopfest trying to figure out who is gaming who the most
July 7th, 2009 at 3:58 pm
Mike inNO:
As Manny said, thanks for the Hugh Hendry video.
I never get tired of listening to well thought out opinions…
July 7th, 2009 at 3:58 pm
Dip masters getting crushed, the Transports are right at the bottom of their range, and 15 months of fame Meredith Whitney bullish on banks. For the deflationistas it might finally be show time!
July 7th, 2009 at 4:25 pm
You couldn’t resist that Japanese porn download, could you, Barry? Let them have their network back, now…
Well, we closed at SPX 880, an auspicious number. Johnny Retail must be wondering what’s up.
Those of us who called for a trading range between SPX 880-910/925/950 are going to be tested now. I am sure there are those who expect to see SPX 850 this week but I am not one of them. As far as earnings are concerned, we begin with AA on Wednesday – we might be seeing “sell the rumor, buy the news” – it is a bear market after all…
We went long ERX and added to positions in COP and VLO, for a trade. All these seem to be sitting on long-term support. No question that oil and energy will go lower in the medium term, but not immediately, IMO.
July 7th, 2009 at 4:29 pm
Bruce N Manny:
I suppose Lefty will be all puffed up when he hears Hendry recommending long bonds. But I had thought it a good trade also and have bought some.
Was not happy to hear his statement about markets not crashing in hot weather, as I’m reasonably stocked up on short stuff which is finally coming around. Trouble is, with GS the other big guys manipulating the markets, you never know if today was what it seemed. Not a lot of volume. They may just be playng games to shake out longs before they pump it higher.
I thought Zero Hedge’s implication that the charges against the Russian programmer were trumped up to injure a potential program trading rival were believable:
http://zerohedge.blogspot.com/2009/07/citadel-trail-emerges-goldman.html
The part of the news report about the code being uploaded to a German site make no sense if he was stealing it for his new employer. Encrypting it using steganography and putting it on a micro SD chip hidden somewhere would make a lot more sense.
July 7th, 2009 at 4:57 pm
“I suppose Lefty will be all puffed up when he hears Hendry recommending long bonds. But I had thought it a good trade also and have bought some.”
I expect Hugh was just reading TBP one day and happened on another outstanding call by LB.
“Was not happy to hear his statement about markets not crashing in hot weather”
Too many traders in the Hamptons, baby!!
July 7th, 2009 at 5:16 pm
Well, Hendry did reference “Bailout Nation,” didn’t he?
Great link, Mike. Thanks for that.
A couple of terrific quotes re: China.
“I think China looks like an investor in a Madoff scheme” and “China is a deep, out-of-the-money call option on the US economy.”
When I heard him say that I really had to wonder whether he’s got a great point — that people have been too quick to give China’s central planners too much credit. They did, after all, peg their economy to US consumption. poof.
July 7th, 2009 at 5:28 pm
China is so screwed. See riots in Western China today.
Too many people to feed, let alone keep happy with Western-style consumer goods. The FXI has always traded like the NASDAQ on steroids, it is basically a leveraged play on the US economy, hence the “Chimerica” concept.
July 7th, 2009 at 5:34 pm
Let me join in the applause for the Hendry link. That was awesome. Pretty much sums up my deflation view.
July 7th, 2009 at 5:36 pm
I turned on the tube around noon. I don’t watch a lot of TV. And here’s a good reason why; 10 channels were showing the Jackson Memorial Funeral in L.A. 10 channels?? Next time BO is on, I’ll have to count how many channels are broadcasting his speech.
July 7th, 2009 at 5:50 pm
“The Commodity Futures Trading Commission will hold hearings this month and next to explore the need for government-imposed restrictions on speculative trading in oil, gas and other energy markets, Chairman Gary Gensler said today in a statement.”
Yeah, they’re interested in curtailing those speculators in areas where lower prices would result in more disposable income for consumers. Keep ‘em spending. In order to be fair, why not impose “government-imposed restrictions on speculative trading” in the entire commodity futures complex?
July 7th, 2009 at 6:25 pm
http://www.bloomberg.com/apps/news?pid=20601080&sid=aV4OPwuOlwAw
China Banking Regulator Warns of Risks to Loan Growth
“Chinese banks advanced a record 5.84 trillion yuan ($850 billion) of new loans in the first five months, almost triple the amount of a year earlier, after the government eased lending restrictions in November to stem a slowdown in the world’s third- largest economy. The regulator on May 31 warned against the “accumulation of risks” and ordered lenders to ensure the quality of new loans. ”
Thought this article was interesting especially after watching the Hendry piece and his caution about what may happen in China. Wouldn’t it be interesting if after being given their marching orders about lending, and if the US and European recoveries fail to materialize, if China falls into a black hole?
July 7th, 2009 at 6:35 pm
the more I think of it- the more I think China is the one that will be the most bludgeoned by this economic malaise (pulling out my Jimmy Carter references)-
wrong word really- but the D word just may scare the little kiddies or faint of heart
July 7th, 2009 at 6:39 pm
Bruce:
Most of what I’ve been reading indicates that they are blowing property and commodity bubbles in the great tradition of the country they are trying to replace. Just a matter of how long they can keep them inflated.
I owe all the credit of my Hendry link to Google Alerts. Even though I dislike Google as a threat to privacy, the alerts are useful. From the web search page, go to News, then there is a link to Alerts in the lower left hand column. Think you have to have a gmail account, which is not a big deal. I have them for a few people I’m interested in. A few people I only want to see the death notices, so I tried putting their names on the theory that Google scans the obits in local papers.
I do find myself using Bing a lot. It really does cut down on the number of trash hits you get from a search.
BTW, if you get a gmail account, don’t send any sensitive info through it. If you send emails, you will notice that the ads on the mail page will relate to what’s in your emails. That’s cause Google scans whatever you send and receive. I was intrigued by the restarting of Google Voice which can do wonderous things with phone calls, but the trouble is, it does speech to text translation to email you the gist of voice messages. I’m sure that text is is saved also, so no client confidentiality. I had to give up the idea of a cheap way to keep my business number in NOLA forwarded to Houston. Will have to keep paying Ma Bell to do it. Maybe I should just get an extra cell line.
July 7th, 2009 at 6:40 pm
how about this
http://www.calculatedriskblog.com/2009/07/cnbc-interview-with-bryan-marsal-ceo-of.html
July 7th, 2009 at 6:46 pm
Mike in NO:
I visited Mish’s site this afternoon…I read as much as I can,anywhere, but comment here. Currently he is madder than a wet hen that four of the megabanks we bailed out have decided not to take IOU’s after Friday. Now initially they indicated they would. Mish did post one postscript from a reader who wondered if these banks were so short of cash that they figured they couldn’t make a go of it taking IOU’s for any extended period of time…interesting idea, ain’t it?
http://globaleconomicanalysis.blogspot.com/
July 7th, 2009 at 6:47 pm
Well you all should know my position on China’s future by now – I won’t bore you with a repeat of it
July 7th, 2009 at 6:52 pm
Bruce – thanks for that link. I must say, you keep more up to date on what’s going on in the state that I live in than I do.
Outrageous though isn’t it? On the one hand, i can see where they banks wouldn’t want to encourage the state government to take it’s time on fixing the budget. On the other hand, my tax dollars went directly to some of these very banks, not they don’t want to return the favor by helping out the people who are going to be issued IOU’s.
July 7th, 2009 at 6:55 pm
willid3; Thanks for the link. The written quote was good. Couldn’t find it in the video, but he accurately describes Geithner’s plan just drag things out by various means and hope the banks heal themselves. Of course, we all know that won’t work.
Bruce: Actually, I read it this morning, but the signifcance didn’t really strike me. I thought that maybe those IOU’s would be able to be counted as assets in computing their capital ratios because of CA’s lowered rating. But, the other interpretation could be correct.
July 7th, 2009 at 7:06 pm
and then there is this on AIG and the whose got the numbers
http://www.propublica.org/ion/bailout/item/how-big-is-aigs-bailout-really-707
July 7th, 2009 at 7:39 pm
@BinTn: Perhaps the notion that the big four are struggling to stay liquid is a good one.
Otherwise I’m with everyone else. F’em.
This is still yet to play out as you well know, not just in CA. The stimulus is starting to look pretty puny and ineffective.
Stay tuned.
July 7th, 2009 at 7:45 pm
re: GS software theft. How exactly did they determine the software was uploaded to Germany?
Oh, Big Brother. Never mind.
July 7th, 2009 at 8:22 pm
Funny.
http://zerohedge.blogspot.com/2009/07/gold-anti-trust-action-committee-urges.html
Of course, nothing will happen given the current state of affairs. Strange that you have to hope for armageddon to get any real reform.
July 7th, 2009 at 8:22 pm
I did see where they determined Michael Jackson died from eating rancid food…
Apparently ate a 7 year old weiner…
July 7th, 2009 at 10:31 pm
Bruce: Pretty crude. Will have to pass it on.
July 7th, 2009 at 10:52 pm
Goldman May Lose Millions….
http://www.bloomberg.com/apps/news?pid=20601087&sid=axYw_ykTBokE
I must be through the looking glass. This quote struck me as funny coming from Goldman, following Kramer’s comments on how he used to artificially pump up (aka manipulate) stocks when he worked for Goldman.
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public yesterday. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”
On the other hand I’m reasonably sure Goldman would never manipulate things so they would have an unfair advantage.
July 8th, 2009 at 10:27 am
US rental market close to all time low as young adults hit hardest; largest group in commercial real estate defaults
http://www.reuters.com/article/topNews/idUSTRE5670KD20090708?feedType=RSS&feedName=topNews
US mtg fraud up 36%..
http://www.reuters.com/article/topNews/idUSTRE5667LD20090708?feedType=RSS&feedName=topNews