Wednesday Reading
By Barry Ritholtz - July 22nd, 2009, 3:30PM
Wednesday linkage — something for everyone:
• Paulson’s Colossal Lack of Judgment (Alhambra)
• Jamie Dimon v. Larry Summers (Baseline Scenario)
• S&P Commits Professional Suicide With Ratings Round Trip, Underlying CRE Remains Toxic Garbage (Zero Hedge)
• Business Journalism: A Vanishing Necessity? (Time) I’m curious as to why they limited this to business journalism . . .
• How far will US home prices fall? (Vox EU)
• Fiscal ruin of the Western world beckons (Telegraph)
• How ever did I miss this? A NIGHT OUT WITH | CODY WILLARD (NYT)
• The Manchester Report: 20 ideas for solving the climate crisis (Guardian)
• Musicians Find Backers as Labels Wane (NYT)
• Turning CT scans into Art (New Scientist)
Anything else clickworthy?
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July 22nd, 2009 at 3:46 pm
Another story on poorly-managed hedg… I mean, university endowment funds:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aQn_Cxyu99xY
Like pension funds, these institutions are going to have to do some sellin’ to pay the bills this Fall.
Guess what they are going to sell first?
July 22nd, 2009 at 3:55 pm
17. Ash Trees
In the late 1990s, a pretty, iridescent green species of beetle,
now known as the emerald ash borer, hitched a ride to North
America with ash wood products imported from eastern Asia. In less
than a decade, its larvae have killed millions of trees in the
Midwest, and continue to spread. They’ve killed more than 30
million ash trees in southeastern Michigan alone, with tens of
millions more lost in Ohio and Indiana. More than 7.5 billion ash
trees are currently at risk.
16. Ham Radio
Amateur radio operators enjoy personal (and often worldwide)
wireless communications with each other and are able to support
their communities with emergency and disaster communications if
necessary, while increasing their personal knowledge of
electronics and radio theory. However, proliferation of the
Internet and its popularity among youth has caused the decline of
amateur radio. In the past five years alone, the number of people
holding active ham radio licenses has dropped by 50,000, even
though Morse Code is no longer a requirement.
http://www.schargel.com/2009/03/27/25-things-about-to-become-extinct/
~~
Obama task force backs indefinite detention without trial
By Tom Eley
On Monday, an Obama administration task force announced it would delay for six months release of a report that was to outline plans for the prosecution of inmates at its Guantᮡmo Bay prison camp and future prisoners seized in the “war on terror.” In its stead came an interim report and a White House press briefing that together indicate President Barack Obama is likely to rely on military tribunals or indefinite detention without trial in cases where evidences against “terror suspects” is scant or tainted by torture.
http://uruknet.com/?p=m56239&hd=&size=1&l=e
July 22nd, 2009 at 4:05 pm
and this
http://www.calculatedriskblog.com/2009/07/bernanke-cre-may-pose-risk.html
July 22nd, 2009 at 4:08 pm
and this
http://www.calculatedriskblog.com/2009/07/pbgc-to-assume-delphi-pension-plans.html
just out of curiosity, does any one know if there is some really watching our 401k (oh….ok…..20.5ks) to make sure they don’t end up in smoke?
of course, now days it may not matter. there isn’t as much in them any more
July 22nd, 2009 at 4:16 pm
http://www.calculatedriskblog.com/2009/07/bernanke-cre-may-pose-risk.html
Ya think?
“does any one know if there is some really watching our 401k?”
I watch my own, and so should you. Not sure what would happen if a huge mutual fund manager went under. That would be Armageddon, I think. Still, if your 401K assets are with a small outfit of dubious capital, you might want to roll it over to someone respectable ASAP….
God knows who would have responsibility for bailouts if Fidelity, Vanguard etc.. rolled over. That would dwarf FDIC, PBGC and everyone else. The $ would be toast by then and we would all be working on cvienne’s farm.
July 22nd, 2009 at 4:16 pm
not sure about this one but here you go any way
http://economistsview.typepad.com/economistsview/2009/07/ten-myths-about-the-subprime-crisis.html#more
July 22nd, 2009 at 4:20 pm
http://online.wsj.com/article/SB124813472753066949.html
It looks like the Detroit Public School System may be the first to file bankruptcy. Frankly I’m surprised it hasn’t happened already.
July 22nd, 2009 at 4:26 pm
Another story on poorly-managed hedg… I mean, State Pension funds:
http://www.ft.com/cms/s/0/994f8c66-762d-11de-9e59-00144feabdc0.html?nclick_check=1
When it turns out that the Green Shoots are withering and we see a flight to lower yielding assets, the chances are that they are NOT going to make up 2008′s losses this year. So CALPERS and other institutions are going to have to do some sellin’ to pay the bills this Fall. Guess what asset class they are going to sell first?
I think we are beginning to see the roots of what may lie ahead for Mr Market this year.
July 22nd, 2009 at 4:29 pm
i think this has been seen before but its an oldy but goody!
http://www.calculatedriskblog.com/2009/07/herald-tribune-flipping-fraud-ignored.html
July 22nd, 2009 at 4:30 pm
and then there is this
http://dandelionsalad.wordpress.com/2009/07/21/the-great-tax-con-job-by-thom-hartmann/
July 22nd, 2009 at 4:34 pm
http://www.atimes.com/atimes/Global_Economy/KG24Dj02.html
July 22nd, 2009 at 4:44 pm
LB
Indeed pension funds, endowments, insurance companies (and Buffett) have all gotten a huge reprieve from this rally. Insurance companies are largely just a big leveraged play on the market itself.
If things go down appreciably from here, we’ll hear a lot more from those quarters.
July 22nd, 2009 at 5:00 pm
“Peak Civilization”: The Fall of the Roman Empire”
http://doomisnigh.blogspot.com/2009/07/peak-civilization-fall-of-roman-empire.html
PBCG takes over delphi
http://doomisnigh.blogspot.com/2009/07/pbgc-deficit-climbs-to-335-billion-at.html
Oakland to become first to tax marijuana
http://doomisnigh.blogspot.com/2009/07/oakland-to-tax-marijuana.html
July 22nd, 2009 at 5:01 pm
I had missed this slugfest, but Tyler has been all over it today. Not sure about you, Barry, but I’m going with Janet for a TKO in the 5th. Charlie will need a good cut man for this bout, Janet has a sweet jab and a killer right cross.
http://zerohedge.blogspot.com/2009/07/janet-tavakoli-rips-into-charlie.html
July 22nd, 2009 at 5:13 pm
@ LB 4:16 — cviene is hiring?
July 22nd, 2009 at 6:11 pm
@ LB 4:16 — cviene is hiring?
Especially if you’re good with arugula, like Karen.
Barry, when you catch up with this, check out the HFT smackdown on the other thread between DH and KD….
July 22nd, 2009 at 6:29 pm
This is extremely long, and not recent, but does do a nice job on RBS, the UK’s version of Shittybank:
http://www.lrb.co.uk/v31/n10/lanc01_.html
July 22nd, 2009 at 6:29 pm
For anyone who is a residential or commercial real estate investor buying short sales and foreclosures in distressed areas, this is a good first hand account of what to expect to find.. http://contraryriches.blogspot.com/2009/07/i-saw-some-really-crazy-shit-today.html
July 22nd, 2009 at 6:34 pm
For anyone who thinks cvienne is too far out there in going off the grid, this guy has deflation down pat:
http://men.style.com/details/features/full?id=content_9817&pageNum=2
July 22nd, 2009 at 6:35 pm
http://www.calculatedriskblog.com/2009/07/s-increases-forecast-for-subprime.html
July 22nd, 2009 at 6:47 pm
Barry, check this out. An interesting chart we have all looked at many many times:
http://www.calculatedriskblog.com/2009/07/stock-market.html
LB is struck by how the 1998 correction (was that Asian crisis/LTCM?) is an almost perfect mirror image of the present rally around the SPX axis. Back in 1998 the trend was restored around SPX 950…. fascinating, eh?
July 22nd, 2009 at 7:07 pm
You’ve posted this before I think but it’s more important than people realize (there is never only one cockroach):
http://www.vanityfair.com/politics/features/2009/08/harvard200908?printable=true¤tPage=all
I wonder if Harvard hedg.. sorry, University, will turn out be TBTF?
There will be more of these endowment blow-ups out there and many of them will not be TBTF.
July 22nd, 2009 at 7:31 pm
@LB (6:34)
Thanks for that “missing” link http://men.style.com/details/features/full?id=content_9817&pageNum=2
Gotta love that guy…
FYI – I’m not TOTALLY off the grid yet…I still need to to get myself to the state of “off the grid” drunkenness…
- I’ve got the potatoes & corn going (so I could make moonshine & sourmash)…
- My vineyard is going to take another 3 years to produce any wine worth drinking
- I’m just getting the HOPS started this fall (for beer)
- I’m still working on “irrigation” issues for my rice fields (for sake)
Until you can get yourself to a self sustaining state of drunkenness, what the hell good are you?
FARM NAKED…that’s my new motto!
July 22nd, 2009 at 7:50 pm
20 Ideas for solving the climate crisis…
If the sunspot astrophysicists are correct the crisis is over already.
We’ve had the coldest July ever recorded here in east Tennessee this year.
Started a new business today. It has kind of recharged my batteries…I’ll let you know how it goes over the next few months.
July 22nd, 2009 at 7:57 pm
Two words to simultaneously solve the health care crisis and the putative warming of the Earth:
Tax Fat.
(The kind around the waistline, not in the foods you eat.)
July 22nd, 2009 at 7:59 pm
Bruce – There’s a rather large El Nino forming in the Pacific – summer has been cool in a lot of places. It’s been scorching out west though. Palm Springs hasn’t dropped below 110 for the high in almost two weeks. Looking forward to a raining winter.
July 22nd, 2009 at 7:59 pm
Re. Cody Williard’s piece in the NYT, author Brian Stelter refers to “indie rock credentials” … that’s like saying, “trading is in my Deoxyribonucleic acid” …it’s DNA.. and it’s “indie cred…”
http://en.wikipedia.org/wiki/Indie_cred
July 22nd, 2009 at 8:22 pm
the end of any recovery. the jobless recovery
http://delong.typepad.com/sdj/2009/07/we-are-live-at-the-week-with-the-jobless-recovery-has-begun.html
my real question is if nobody is responsible for monitoring the health of the companies holding 401ks, or takes responsibility if the company holding 401k collapses. then have we created a potential for disaster. since that become the new retirement plan. at least pensions have an agency to take on them if the company fails. as far as i know there isn’t one.
and I saw a story that Rome really fell because of a drought. and a drought for them would destroy their economy. which would lead to all kinds of other disasters (political and militarily)
July 22nd, 2009 at 8:32 pm
and then there is this
http://econompicdata.blogspot.com/2009/07/dollar-is-overvalued-but-against-what.html
July 22nd, 2009 at 8:50 pm
Folks,
The BO speach – effectively proposing an FDIC for Investment (err…. Commercial) Banks!
wtf – the Shadow Banking system survives
we are truly and wholly f’d….
July 22nd, 2009 at 8:56 pm
i thought the investment banks died off as each one rushed head long into being regular banks to stave off collapse
July 22nd, 2009 at 8:57 pm
Thor:
I kind of look at this global warming thingy as being like the “science” of economics…sunspots, previous short chain carbon atoms became longer chain carbon polymers, and are now going back to short chain carbon atoms once again, mini-ice ages in the recorded past(last in the late 1800′s I believe without checking)…there are so many variables that a blowhard like Al Gore (claims Tennessee, but raised in DC) could be right. Could be wrong. If the universe is more than 15 billion years old, I really doubt what we are doing to some carbon atoms is going to change much. I’d be much more enthusiastic about sunspots…but like they used to say in my profession…an expert is someone more than 60 miles away from home with his own set of slides…if you can’t explain it all..you probably can’t really explain climate change at all…sort of like the problems physics had with Einstein and Heisenberg co-existing…without a bridging theory…
July 22nd, 2009 at 8:57 pm
and
http://www.usnews.com/articles/business/careers/2009/07/22/states-where-the-unemployed-are-giving-up.html
July 22nd, 2009 at 9:06 pm
Has anyone else been following the various videos of Hank Paulsons testimony in front of whatever committee is presently questioning him. Several are posted on daily bail .com. I’ve got to admit, I’m almost suicidal as I realize this man is worth millions and I’m not. What the hell is really wrong with this country. He really ran Goldman Sachs, I mean really? How is that even possible. He’s a stammering goddamn retard. I once wrote that he reminded me of George the handyman on the Bob Newhart show, but I fear I only succeeded in degrading George with that comment, and for that, I sincerely apologize.
July 22nd, 2009 at 9:13 pm
http://www.ft.com/cms/s/b576ec86-761e-11de-9e59-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fb576ec86-761e-11de-9e59-00144feabdc0.html%3Fftcamp%3Drss&_i_referer=http%3A%2F%2Fprudentbear.com%2Findex.php%3FItemid%3D57%26option%3Dcom_content%26view%3Dfrontpage&ftcamp=rss
China to deploy foreign reserves
Beijing will use its foreign exchange reserves, the largest in the world, to support and accelerate overseas expansion and acquisitions by Chinese companies, Wen Jiabao, the country’s premier, said in comments published on Tuesday.
“We should hasten the implementation of our ‘going out’ strategy and combine the utilisation of foreign exchange reserves with the ‘going out’ of our enterprises,” he told Chinese diplomats late on Monday.
….Sounds like our helicopter just threw a shoe….24 more months as the world’s reserve currency…Leftback? A burger?
July 22nd, 2009 at 9:28 pm
@greg: A brilliant mind isn’t required for the procurement of riches in this country. A criminal mind is.
@wes: Sitting at denver airport after a business-personal trip. Got some fantastic mountain rides in here. Did ok for a flatlander. The riding is amazing here. Wouldn’t mind living here someday.
July 22nd, 2009 at 9:48 pm
While I know this will be an ADULT rated video I think it might speak to some as a reminder that “redneck” Main Street is not totally oblivious to what is going on.
(Come on, how many of you don’t want to pick a bat and hit something over what is going on right now??? I know I wish I could express myself like this sometimes.)
WARNING – EXTREME LANGUAGE! – Do not watch with the kids!!!
http://www.youtube.com/watch?v=ZaV2rNXtlXs
July 22nd, 2009 at 9:55 pm
Bruce – I think the global weather system is too complicated for anyone to know for sure exactly what’s going on now or how much we’re going to warm up. Certain things are fairly straight forward though – we are warming up, it’s just a matter of why, and how much – the glaciers are melting, that’s pretty easy to see with your own eyes, same for sea ice in the arctic and the southwest getting drier. As I said, the global weather system is so large, and there are so many unknown variables (massive prolonged volcanic activity, The Atlantic ocean current shutting down) that it’s virtually impossible to know for sure. People were worried about a coming ice age in the 70′s, 5 years ago it was the ocean currents shutting down (ala The Day After Tomorrow). They’ve apparently now decided that a shutdown of the ocean currents in the Atlantic would be slow, and not abrupt (see below)
http://www.sciencedaily.com/releases/2009/07/090716141142.htm
July 22nd, 2009 at 9:56 pm
Mannie @9:26 –
excellent
glad you able to enjoy
i was in steamboat springs a few summers ago and really enjoyed some road and mountain biking, as another flatlander and near sea level kind a guy…there were some challenges that required acclimation.
July 22nd, 2009 at 10:04 pm
Thor:
I agree. For something as complex as climate and the passage of time, I agree most of what we hear is opinion…
July 22nd, 2009 at 10:09 pm
Manny – Colorado is beautiful isn’t it? My grandmother’s family is from there. The southwest of the state is also very nice – Durango, Four Corners area.
July 22nd, 2009 at 10:26 pm
Good to learn that some of the good folks here are visiting my fine sate of Colorado. Way off Wall Street here, but sometimes that makes it easier to gain perspective.
For an incredibly beautiful photo of Boulder, Co – my stomping grounds – see the bottom of my blog home page. (Taken by a local photog – not me)
July 22nd, 2009 at 10:43 pm
@bthewee I’d like to nominate this guy as Cramer’s replacement on Mad Money.
July 22nd, 2009 at 11:57 pm
Wonder if this is a sign that China’s stocks are nearing a top:
Chinese Rush to Open Stock Accounts After End of IPO Moratorium
http://www.bloomberg.com/apps/news?pid=20601089&sid=arw3c1rxJTq8
As the article notes, “Individual investors opened 484,799 stock accounts last week, data from the nation’s clearing house showed today, the most since the five days ended Jan. 25, 2008, and almost five times this year’s low in January. The Shanghai Composite Index rose the most today in six weeks to the highest since June 2008.”
If you check out the chart for the Shanghai composite at http://www.bloomberg.com/apps/cbuilder?ticker1=SHCOMP%3AIND , that was just after the all-time peak.
July 23rd, 2009 at 12:02 am
Congressional meddling at Citigroup:
http://www.bloomberg.com/apps/news?pid=20601109&sid=ahOcsipoRBL4
Who coulda knowed? More reason to take them down and sell off the parts.
July 23rd, 2009 at 12:27 am
bergsten Says:
July 22nd, 2009 at 10:43 pm
@bthewee I’d like to nominate this guy as Cramer’s replacement on Mad Money.
BERG – Guess my post was too racy for Barry – I see it has been Dismissed – Oh well!!
You’ll never know what you missed!
July 23rd, 2009 at 12:31 am
Bergsten – I agree – Cramer’s got, “NOTHING, NOTHING, THEY have NOTHING!!!” on that guy.
July 23rd, 2009 at 1:46 am
@Bthewee — ZH dedicated an entire “post” to this guy (clever title too):
http://zerohedge.blogspot.com/2009/07/deep-thoughts-from-0925-batting-average.html
Your 9:48 pm post is still there (well, at least “I” still see it)
July 23rd, 2009 at 1:49 am
Not only that, but there’s a whole bunch of his videos (he even cracks himself up now and then)…
http://www.youtube.com/user/walstreetpro2
July 23rd, 2009 at 7:15 am
The Guardian didn’t mention cvienne’s Krakatoa idea. “All we need” is a Krakatoa event every so often to reverse the effects of putting greenhouse gasses into the atmosphere. In absence of Krakatoa, maybe we should detonate nuclear weapons from time to time to kick up some dust.
Someone give cvienne a research grant so he can study that idea. In the meantime, since there’s been no Krakatoa event in a while, the problem keeps getting worse. But, cvienne is very sure there’s nothing to worry about. That’s good enough for me.
July 23rd, 2009 at 8:02 am
http://money.cnn.com/2009/07/23/news/economy/state_budget_gaps/index.htm?postversion=2009072306
State budgets walloped again
Revenue shortfalls lead to new budget gaps only three weeks into the new fiscal year. States are forced to make more painful budget cuts.
July 23rd, 2009 at 8:04 am
“The revenue forecasts are continuing to underperform even the most pessimistic of projections,” Eckl said. “There’s still a lot of this ahead of us.”
July 23rd, 2009 at 8:19 am
I’m on a train from NYC to DC, and it’s packed to the gills. I saw a lot of people with suitcases and my hope is they’re getting out at EWR. But the conductor did say this is a full train and there’s an equipment shortage. Also, I noticed that nobody was really offering any “recession” specials on food or clothes. In fact, Filene’s Basement was out of stock on lots of things I wanted to buy (shoes, a wallet). I did get a “recession” special at Gray’s Papaya, but it was only $1 off. The above applies to NYC and Boston. Green shoots, my friends, green shoots!
July 23rd, 2009 at 8:36 am
@wunsacon
give me a research grant & pay ME to blow things up?
You’re onto something there :-)
July 23rd, 2009 at 8:37 am
Where do these clowns come from?
“Dow 15000 in 2 years”
http://finance.yahoo.com/tech-ticker/article/288287/Dow-15000-Here-We-Come-Stocks-Going-to-New-Highs-Lemonides-Says?tickers=^dji,^GSPC,qqqq,ba,lm,mmm,spy
On a different note, Initial Jobless claim increased by 30k to 554,000.
July 23rd, 2009 at 9:01 am
wavecatcher,
My mother was from Boulder. She lived near the red rocks, but when she went back 50 years later it was a mall.
July 23rd, 2009 at 11:55 am
My mother was from Boulder. She lived near the red rocks, but when she went back 50 years later it was a mall.
At the rate CRE is headed they’ll be red rocks again in no time
July 23rd, 2009 at 2:39 pm
LOL, cvienne. I was hoping you’d take that in good spirit. But, I also did intend to make a point. In other words, I don’t think Krakatoa is going to save us.
And, perhaps more importantly, where incredible risks are concerned, I’m inclined to put the burden of proof on those who argue “there isn’t enough data” to prove that the status quo will be okay.
July 23rd, 2009 at 2:40 pm
I agree: too much development in Sedona!