Wednesday 10 Spot
Here are 10 items that caught my eye:
• Bears prowl Wall St as insiders dump stock (Reuters) A massive rally in U.S. stocks since March has reawakened bullish spirits, but insiders are jumping out of the market in a sign the run up is getting stretched.Company executives are selling stock at a rate not seen in two years after a near 50 percent rise in the S&P 500 from a March 9 low. That suggests directors and managers may think stock prices are nearing the top end of their range in the current economic climate.
• Rogoff: Why we need to regulate the banks sooner, not later (FT) Too many policymakers, investors and economists have concluded that US authorities could have engineered a smooth exit from the bubble economy if only Lehman had been bailed out. Too many now believe that any move towards greater financial regulation should be sharply circumscribed since it was the government that dropped the ball. Policymakers should not be obsessed with moral hazard and should forget trying to micromanage the innovative financial sector.
• Growth in “Potential GDP” Shows Limited Potential (Hussman)
• Odd WSJ Real Estate Story on Vermont Mortgage Regs: (Economist’s View) The tenor of the article is that Vermont has overregulated the mortgage market preventing…wait for it…the unforgivable error of restricting loans to those who can prove an ability to repay. Worse yet, consumers receive explicit notice of high rates and brokers are held accountable:
• Your Handy Health Care Cheat Sheet
• Credit Card Firms Face New Curbs This Week (Washington Post) The first phase of the landmark credit card legislation signed by President Obama in May will take effect this week, forcing card issuers to give consumers more time to pay their bills and to consider interest rate increases. Starting Thursday, issuers must give customers 45 days’ notice before raising their interest rates, instead of 15 days as previously required.
• A Nuclear Renaissance Beckons Electricity demand is expected to increase 50 percent by 2030. NRC has received 17 license applications for 26 new nuclear power reactors. These are the first applications for new reactors since the late 1970s. In addition to new reactors, the NRC has seen an increase in licensing applications related to uranium recovery and fuel-processing facilities.
• Americans Pay The Most For Cellphone Service (Consumerist)
• Debate’s Path Caught Obama by Surprise (Washington Post) President Obama’s advisers acknowledged Tuesday that they were unprepared for the intraparty rift that occurred over the fate of a proposed public health insurance program, a firestorm that has left the White House searching for a way to reclaim the initiative on the president’s top legislative priority.
• Visualizing up to ten dimensions (boingboing)
Anything else you are to note?
August 19th, 2009 at 2:15 pm
Here is what did not make the top 10:
and because it was everywhere else:
New study: Up to 90 percent of U.S. paper money contains traces of cocaine
August 19th, 2009 at 2:19 pm
I hope everyone is following the biggest story of the year. Obama caught red handed in a $150 million dollar bribe from big healthcare companies. Ouch!
http://www.huffingtonpost.com/2009/08/13/internal-memo-confirms-bi_n_258285.html
After secretly agreeing to NO REFORMS for big healthcare Obama hit the town hall meetings circuit and promised big reforms for the american people.
August 19th, 2009 at 2:23 pm
WAMU auctions woman’s House by mistake…..
http://www.nbcmiami.com/news/local-beat/Womans-House-Mistakenly-Auctioned-by-Bank-53583357.html
August 19th, 2009 at 2:28 pm
The debate over health care has certainly sucked the oxygen out of the debate over bank bailouts and new financial regulations.
August 19th, 2009 at 2:30 pm
@DL: Maybe that was by design?
August 19th, 2009 at 2:32 pm
update @ 2:19
This is all part of his plan to siphon off money from Medicare. He made a similar deal with the AMA.
Pretty smart politics…. if Obama can fool enough people.
August 19th, 2009 at 2:35 pm
Great link about how Vermont avoided the mortgage/housing problem.
“put the brokers who arranged loans on the hook if their customers defaulted”
Amazing how simple it is. Just align the incentives with the goal and it all takes care of itself.
August 19th, 2009 at 2:42 pm
Sorry I am obsessed with FX moves lately. This was arguably today’s market mover:
http://www.bloomberg.com/apps/news?pid=20601170&sid=aLW8jvysIe5k
August 19th, 2009 at 2:42 pm
The one on Americans going to Mexico for health care should have made the list. I mean if foreigners coming to US for health care is proving that US has the best health care, then americans going to Mexico for health care must prove that Mexico has the bestest best health care system in the world
August 19th, 2009 at 2:44 pm
http://business.theatlantic.com/2009/08/an_option_that_has_been_proven_difficult_and_left_untried.php
looking at the re-insurance option again.
August 19th, 2009 at 2:45 pm
@leftback: I saw that article last night and wondered if there wasn’t some intention with it. Our gov’t and corporations are basically one and the same entity now.
August 19th, 2009 at 2:57 pm
No worries on the Bill Gross commentary, guys.. he was so woefully wrong on bonds a several years ago, he literally secluded (or recused) himself for awhile. And, I will always contend that El-Erian was brought in because Gross was so out of touch.. and peek over in the video section, he just bought a postage stamp lot with teardown in NB for $20+ million..
August 19th, 2009 at 3:16 pm
@ Leftback,
PIMCO’s starting up TIPS funds, a little book-talking? Clearly the fundamentals support dollar weakness, but the way the Chinese market has performed in the last two weeks, I don’t see reserves seriously moving from dollars.
http://online.wsj.com/article/SB125021658485031221.html
August 19th, 2009 at 3:16 pm
Apparently Lispy Lloyd’s wife and Stephen Friedman’s wife made quite the scene out at the Hamptons. So this is why we’re bailing out Wall Street? So our royals can feel even more entitled to everything? Barry – were you present for this?
I’m not a violent person by nature, but I’m really thinking that mass violence is the only way to stop these people.
http://www.nypost.com/seven/08052009/gossip/pagesix/goldman_sachs_wives_hate_to_wait_183044.htm
August 19th, 2009 at 3:17 pm
WAMU auctions woman’s House by mistake….
Lady, if you don’t get your house free out of that deal then I’d sue your lawyer for negligence
August 19th, 2009 at 3:18 pm
@bong: There you go. That’s the kind of thing I was thinking/looking for after reading this last night. Of course, PIMCO wouldn’t be talking its book to try to move the market to raise funds for their TIPS fund, now would they?
August 19th, 2009 at 3:18 pm
@karen
Thanks for those words…
If there is one “pet peeve” that I have in my life, it’s these guys like Warren Buffett & Bill Gross that can simply get on the microphone one day and mess with a position that I’ve patiently waited for and built…
August 19th, 2009 at 3:27 pm
How about Glenn Beck’s stellar work in disproving that axiom about “any publicity is good publicity”?
August 19th, 2009 at 3:27 pm
@karen Says:
No worries on the Bill Gross commentary, guys..
I wouldn’t be too sure of that. He has been cozy enough with the government of late that he might be one of those whispering lead economic policy indicators. I think he has moved a lot closer to the inside due to his actions in the crisis
August 19th, 2009 at 3:28 pm
that should state:
whispering leading economic policy indicators
August 19th, 2009 at 3:50 pm
Manny: It is only a matter of time before public anger at banksters boils over.
“Warren Buffett & Bill Gross that can simply get on the microphone one day and mess with a position that I’ve patiently waited for and built…”
Just a chance to extend the position, old chap. Mean reversion will be along before you know it.
August 19th, 2009 at 3:55 pm
The WSJ article on Vermont was rebutted on various claims made in the article that exposed it for a piece of propoganda against regulation.
I now regard the WSJ as complete rubbish. I’ll never read it again.
August 19th, 2009 at 3:59 pm
@Mannwich
Not sure what is worse for that woman in Miami…that she accidentally got kicked out of her house for 48 hours, or that the house she paid $250K for (just 3 years ago) was won at the auction for less than $90K…
August 19th, 2009 at 4:08 pm
One day PIMCO may be right. The fed and banks SHOULD be solvent enough to drastically increase the money supply at some point. However, will they lend? Will they have slaked their thirst for prop trading enough to allocate more capital to less sexy biz models? Will the consumer delever enough to buy discretionary crap again (I count myself as willfull buyer of dumb stuff, and I haven’t)? When inflation does return, will the Fed raise rates fast enough to tamp it down?
August 19th, 2009 at 4:27 pm
If I could travel back in time, I’d plant some human bones in with dinosaur bones just to mess with everybody.
August 19th, 2009 at 4:31 pm
It is not nicotine that is so addictive, it is creditine….
http://www.msnbc.msn.com/id/32478021/ns/business-personal_finance/
Wells Fargo sued after slashing credit lines
…give it to me mainline….um, humm…..
“The suit, which was filed in Illinois, claims Wells Fargo failed to accurately assess the value of customers’ houses before deciding to cut the size of their credit lines. San Francisco-based Wells Fargo is being accused of using unreliable computer models that wrongly valued home prices too low to justify cutting the size of customers’ loans.”
In Illinois, house values always go up….didn’t WF get the memo?
August 19th, 2009 at 4:51 pm
Cash for Computers . . . . It will never end.
http://www.businessweek.com/the_thread/economicsunbound/archives/2009/08/needed_cash_for.html
August 19th, 2009 at 4:58 pm
regulating banks
http://economistsview.typepad.com/economistsview/2009/08/rogoff-we-need-to-regulate-banks.html
August 19th, 2009 at 4:59 pm
@Thor: No, it will not. Not until some extraneous force/event blows it all up and ends the free money campaign once and for all.
August 19th, 2009 at 5:49 pm
well for those that were up last weekend- early Saturday morning- when i left my post re having to buy a new fridge because my 20 year old fridge stopped doing its thing-
and how i was distraught that i would have to invest in the ecnomy- which i have been boycotting except for non-discretionary items such as food-
lo and behold i found a used one on Craig’s List- talked the lady down to $70- my son and I loaded it in my 4Runner and drove it home-
hooked up the water- plugged it in- works great- and looks good too- now I am back deep in ice and cold beers-
life is truly wonderful
August 19th, 2009 at 6:05 pm
@ahab: I love Craig’s List. Nice job with that. We also have all old kitchen appliances and may do the same if/when they finally crap out. I’m also trying to do my part in not buying any non-essentials as my own small form of dissent. Nice work, ahab.
August 19th, 2009 at 6:09 pm
Ahab – have you looked into the cost in utilities for an older versus a newer fridge? Savings in electricity makes a big difference.
August 19th, 2009 at 6:28 pm
thx for the support mannwich
thor- gee thx for popping my balloon! j/k-
refrigerator i bought is not that old- so its better than what I had energy wise- but i am trying to stay true to my pledge to not prop up the economy- i’ll leave that to the Fed
August 19th, 2009 at 6:42 pm
Glen Beck has moved to Sweden!
http://www.reuters.com/article/featuredCrisis/idUSLJ189142
August 19th, 2009 at 6:49 pm
Glen Beck’s kids leave the nest!
http://www.theonion.com/content/opinion/you_kids_are_old_enough_now_to?utm_source=b-section
August 19th, 2009 at 7:02 pm
Does leftist liberal Alec Baldwin think Glen Beck’s advertiser pull out means he’s not a closer!? “Put. That coffee. Down. Coffee’s for closers only.”
http://www.colbertnation.com/the-colbert-report-videos/246560/august-13-2009/glenn-harried-glenn-lost
August 19th, 2009 at 8:18 pm
I’m not so sure that, “A Nuclear Renaissance Beckons.” The author seems awfully politically motivated to justify his position. But it’s not just about politics, it’s also about the money. And current-technology plants being constructed in Finland and proposed in Turkey (if my memory of the countries serves me correctly) are showing that nuclear just isn’t economically feasible in this day and age. Cost overruns have been huge, landing per-kWh costs higher than renewable options and way higher than increasing energy efficiency to reduce demands by equal amounts. Contrary to what’s being said, the US is in no risk of becoming too reliant on intermittent renewables or running out of ways to be more efficient anytime soon. Applying for a permit and actually building a plant are two different things. Speculative money to apply for permits and pay for feasibility studies, and hard money to actually build plants are not the same thing. Our current trajectory doesn’t seem to suggest that we’ll be seeing any new nukes anytime soon.
Add on top of that the fact that nuclear plants are the most water hungry type of plant in the most water intensive industry, in a country that is rapidly running into water supply issues, and you have yourself a recipe for trouble. As I said before, having a permit and building a plant are not one and the same.
August 19th, 2009 at 8:28 pm
The historical perspective reflected in that Time article on pay raises is impressive (tongue planted firmly in cheek):
“But in other recent recessions salary growth hasn’t slowed this much. Going back to the early 1990s, base salaries never increased by less than 3.4% a year,”
Wow, all the way back to the ’90s. That’s like the dark ages, isn’t it?
August 19th, 2009 at 8:40 pm
That Newsweek piece on the balance sheet excuse (The lamest business excuses of 2009.)a is really one of the best I’ve seen in the MSM for quite some time.
Kind of like the U.S. It’s a good country, with a really bad balance sheet. And it didn’t just happen by some bad luck. Management has driven it into a ditch.
August 19th, 2009 at 8:42 pm
I liked the video about 10 dimensions. Much more interesting than health care!
August 19th, 2009 at 9:46 pm
Just popped in to say hello. My google alert on Albert Edwards popped up this Forbes article on the fake Chinese recovery. I think most of us knew it, but when Forbes gets on board….
http://www.forbes.com/forbes/2009/0907/outfront-global-gloom-in-china-economic-stats.html
August 19th, 2009 at 11:57 pm
Obama’s Health Care Policy:
They said that it could not be done,
He said “Just let me try.”
They said, “Other men have tried and failed,”
He answered, “But not I.”
They said, “It is impossible,”
He said, “There’s no such word.”
He closed his mind, he closed his heart…
To everything he heard.
He said, “Within the heart of man,
There is a tiny seed.
It grows until it blossoms,
It’s called the will to succeed.
Its roots are strength, its stem is hope,
Its petals inspiration,
Its thorns protect its strong green leaves,
With grim determination.
Its stamens are its skills
Which help to shape each plan,
For there’s nothing in the universe
Beyond the scope of man.”
They thought that it could not be done,
Some even said they knew it,
But he faced up to what could not be done…
AND HE COULDN’T BLOODY DO IT….!
Benny Hill
Best regards,
Econolicious
August 20th, 2009 at 9:39 am
Ahab; I am so glad to hear that you are doing your patriotic duty and investing in the economy by saving money. We need that balance between savers and spenders. Without savers like you (and the Chinese), there could be no spenders like my brother in law and “we the people’s” government
August 20th, 2009 at 9:56 am
[...] and, more importantly, one of the world’s top 10 financial bloggers, Barry Ritholtz. Barry posted a very important statistic from this [...]
August 20th, 2009 at 10:00 am
[...] and, more importantly, one of the world’s top 10 financial bloggers, Barry Ritholtz. Barry posted a very important statistic from this [...]