Wednesday Linkage
Clickworthy stuff to get you through hump day . . .
• Richard Thaler: Markets can be wrong and the price is not always right (FT)
• Moodys: Fannie Mae, Freddie Mac Likely to Be Wound Down (Bloomberg)
• BofA’s tiny SEC fine (Felix Salmon) See WSJ for more details
• A concrete problem (The Economist) Banks face another round of property-related bad debts: this time it will be flashy offices, not rundown homes
• No end in sight for bank bailouts (CNN/Money)
• The Unconscionable Math of Health Insurance Rescission (Taunter Media)
• Choose Your Own Apocalypse: How Is America Going To End?
• The Secret Design History of 12 Famous Brands (Fast Company)
• Scientists hit back at climate scepticism (Sydney Morning Herald)
• You can never get enough Parkour (Damien Walters)
What other clickworthy stories might I have overlooked?
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August 5th, 2009 at 2:45 pm
TrimTabs Estimates U.S. Lost 488,000 Jobs in July — BLS Likely to Revise Job Loss Estimates Sharply Higher for First Half of 2009
http://www.thedisciplinedinvestor.com/blog/2009/08/05/trimtabs-estimates-us-lost-488000-jobs-in-july/
August 5th, 2009 at 2:47 pm
How about:
Will Health-Care Reform Save Medical Innovation?
http://voices.washingtonpost.com/ezra-klein/2009/08/will_health-care_reform_save_m.html
(Interview with Dr. Jerry Avorn, chief of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women’s Hospital)
August 5th, 2009 at 2:53 pm
http://blogs.cfr.org/setser/2009/08/04/all-great-things-have-to-end/
Brad Setser retires from blogging, goes to government work.
Who will protect us from Voldemort’s lies?
August 5th, 2009 at 2:57 pm
Oh, Barry, how do you miss an article on housing that cites one of your blog posts? Tsk tsk.
http://willworkforjustice.blogspot.com/2009/08/marriage-dating-housing-and-tax-code.html
August 5th, 2009 at 3:09 pm
Paying Kim’s Price
http://online.wsj.com/article/SB10001424052970204313604574330733667176234.html
…is the WSJ opinion editor’s take on Bill Clinton’s heroic trip to Pyongyang to save two wrongly-imprisoned Americans. Yet the Wall Street Journal can only see the negative. In this innuendo-laden screed they ask:
“We don’t begrudge the congratulations Bill Clinton deserves for saving the two journalists from what might have been a nightmare 12 years of hard labor; that was the sentence a kangaroo North Korean court imposed for allegedly blundering across its border with China in March. But the important question going forward is whether Mr. Clinton’s visit was merely the down payment Kim extracted from the Obama Administration for a potentially larger set of American concessions.”
Don’t begrudge? They spend the next paragraphs doing just that – complete with a “going forward.” Without an iota of evidence this snarky little right-wing twits proceed to make baseless assumption after baseless assumption. They can’t let a simple good deed go without their particularly slimy brand of tar.
I encourage BP readers to email a note about how you feel to “wsj.ltrs@wsj.com”
August 5th, 2009 at 3:13 pm
i guess if this guys mouth is moving, we should ignore him>
http://baselinescenario.com/2009/08/05/john-dugan-consumer-advocate-or-bank-defender/
and
a really bad imitation of consumer protection
http://baselinescenario.com/2009/08/04/the-republican-consumer-financial-protection-plan/
and why aren’t the community banks pushing back against the TBTF banksers?
http://baselinescenario.com/2009/08/03/why-dont-the-community-banks-get-it/
http://baselinescenario.com/2009/08/03/community-banks-part-three/
August 5th, 2009 at 3:18 pm
http://www.finreg21.com/news/fdic%E2%80%99s-bair-maintains-stance-systemic-risk-council-even-after-geithner-%E2%80%98critique%E2%80%99
August 5th, 2009 at 3:37 pm
http://finance.yahoo.com/news/Signs-show-slow-start-on-apf-3169866984.html?x=0&sec=topStories&pos=2&asset=&ccode=
Signs show slow start on back-to-school sales
“Michael P. Niemira, chief economist at International Council of Shopping Centers, estimated that same-store sales, or sales at stores open at least a year, will fall 5.5 percent in July, compared with a year ago. That would be slightly worse than June’s 5.1 percent decrease, according to the ICSC-Goldman Sachs index.
The figures do not include the results from world’s largest retailer, Wal-Mart Stores Inc., which stopped reporting same-store sales figures after announcing April results.
Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer’s health.
A decline in July same-store sales would mark the 11th consecutive monthly drop when excluding Wal-Mart results — which had buoyed the industry in the spring before it stopped reporting monthly numbers.”
August 5th, 2009 at 3:37 pm
interesting
http://news.yahoo.com/s/ap/20090804/ap_on_re_us/us_alabama_county_crisis_1
August 5th, 2009 at 3:54 pm
http://econompicdata.blogspot.com/2009/08/income-down-savings-up-consumption-down.html
August 5th, 2009 at 3:55 pm
http://www.bloomberg.com/apps/news?pid=20603037&sid=adBYDzUMt68k
‘Underwater’ Mortgages to Hit 48%, Deutsche Bank Says (Update1)
Aug. 5 (Bloomberg) — Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends, Deutsche Bank AG said.
The percentage of “underwater” loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011, Karen Weaver and Ying Shen, analysts in New York at Deutsche Bank, wrote in a report today.
….Yes, you too can own more home than you can possibly pay for…with UE of 11% (U3 ONLY!), government owned car industries, government owned mortgages…
I think this is a Vulcan Mind Meld…Government debt and Homeowner debt are becoming as one…If only Mr. Spock were here to see this…
August 5th, 2009 at 4:35 pm
From the Trim Tabs article:
“Two months ago, we asked BEA economists how they reconciled the huge declines in real-time tax deposits with their report of a modest decline in wages and salaries,” said Biderman. “They could not answer our question. We know now that by ignoring real-time data, the BEA was providing an inaccurate view of the economy’s health.”
And after all, it would get in the way of our (fed govt) grand confidence game (AKA con job) that we’re trying to pull off, not understanding or recognizing or wanting to admit (take your choice) that it’s not just a confidence problem after. We’re fundamentally insolvent as a nation. And that’s not going to go away by hoping and spending more.
August 5th, 2009 at 4:36 pm
here is an interesting headline-
“A 46% drop in profit and Cisco still beats estimates”
what would bad be exactly?
also revenue was off 18%
August 5th, 2009 at 4:38 pm
another outlet bites the dust.
http://www.calculatedriskblog.com/2009/08/wsj-taylor-bean-to-cease-operations.html
August 5th, 2009 at 4:40 pm
Buffet’s Betrayal
Nice dig on the exalted Oracle. Will he lose his vaunted status by the time this secular bear is over? Will his swimming naked metaphor be interestingly apt, and ironically chosen?
August 5th, 2009 at 4:41 pm
Reuters reporting the SEC is going after two (maybe not so) small players for “naked” short selling. I seem to recall seeing somewhere that the major offender in the “failure to deliver” borrowed shares issue was one of the largest Wall Street firms. Now, my memory is not what it once was, along with several other things, but, if I am correct, it would seem that pursuing smaller firms while ignoring the big guys is a bit of a straw man. Somebody correct me if I am wrong.
Best regards,
RF
August 5th, 2009 at 4:47 pm
Great links today.
August 5th, 2009 at 6:24 pm
I’ve got you all beat with this link….how about this one…new economic indicator of Hot Waitresses= Bad economy. http://contraryriches.blogspot.com/2009/08/why-hot-waitresses-are-bad-economic.html
To wit: Selling everything from condos to premium vodka is enhanced by proximity to pretty young people (of both sexes) who get paid for providing this service. That leaves more-punishing work, like waiting tables, to those with less striking genetic gifts. But not anymore.
Bon Appetit!
August 5th, 2009 at 6:28 pm
Got a little bored today, and have been noodling on some global warming issues…basically just trying to visualize what’s going on.
So, here’s what I’ve worked out just now:
The relatively higher ability of this carbon to absorb heat-frequency electromagnetic waves from the sun is the argued cause of global warming due to human activities. But, to visualize all this a bit, just how big of a sheet of carbon is due to the human contribution?
Let’s look at the facts:
The total mass of atmospheric carbon dioxide is 3.0×10××15 kg (3,000 gigatonnes). Human activities such as the combustion of fossil fuels and deforestation have caused the atmospheric concentration of carbon dioxide to increase by about 35% since the beginning of the age of industrialization. [Source: Wikipedia]
Thus roughly 1.0×10××15 kg of atmospheric carbon dioxide has been added by human activity.
Now, let’s examine just how much carbon that is:
CO2 has two parts oxygen to one-part carbon, and the atomic number of oxygen is eight versus six for carbon. Thus the carbon in CO2 makes up 27.3% of its mass (ratio of 6/22).
Thus of the 1.0×10××15 kg of atmospheric carbon dioxide, 2.73×10××14 kg of carbon has been added due to human activity.
The density of graphite carbon is 2.2 g/cm××3. Thus one square meter of 1-cm thick (less than ½ inch) graphite carbon weighs: (2.2 g/cm××3) x (10,000 cm××2/m××2) x (1cm) = 22 kg/m××2
So, finally, a visual:
Just how big of a 1-cm thick layer of graphite carbon is equivalent to that in the atmosphere that is attributed to human activity…?
Answer:
(2.73×10××14 kg) / (22 kg/m××2) = 1.24×10××13 square meters …which is equal to 1.24×10××7 square kilometers
And just how big is that…?
Answer:
Eighteen times the size of the State of Texas
Like I said, I was kinda bored today…but running the numbers has impressed me.
August 5th, 2009 at 7:02 pm
http://www.financialsense.com/Market/wrapup.htm
Good perspective on the wonderful cash for clunkers boondoggle.
August 5th, 2009 at 7:04 pm
And more, I meant to say before hitting submit.
August 5th, 2009 at 7:17 pm
So, BofA pays a $33M fine for lieing about $3.6B paid in Merrill Lynch bonuses and GE pays a $50M fine due to “accounting irregularities”. Where is the parity? Hmmm. Oh yeah, one is a conglomerate and the other is a bank. That explains the difference…
August 5th, 2009 at 7:35 pm
“• Moodys: Fannie Mae, Freddie Mac Likely to Be Wound Down (Bloomberg)”
The first sentence of the article is a little more explanative as it goes on to say. “The U.S. government is likely to decide within 18 months that Fannie Mae and Freddie Mac need to be wound down”.
Likely to “decide” within 18 months!. Then how long for the actual ” wind down”. If you were cruising blogs and mining for substantive headlines this would be a real mis-leader. I think headlines like these are designed specifically for that purpose.
August 5th, 2009 at 7:37 pm
good article here from Jesse’s Cafe’ Americain’-
“Is Sheila Bair an Unsophisticated Hick”
http://jessescrossroadscafe.blogspot.com/2009/08/infamia-e-disgrazie.html
excerpt-
“The reporter on Bloomberg television just mentioned as a snide, smirking editorial aside, that Sheila Bair feels that a million dollars is a lot of pay for one year, and that ten million is excessive for a deposit taking institution. He noted that she is obviously a Washingtonian, and not a New Yorker.”
these shills for Wall Street- I don’t get it- they would cut these reporter’s heart out if it meant a bigger bonus
August 5th, 2009 at 8:31 pm
Ahab, Cisco had a 22% decline in product sales and Nortel went BK in Jan, maybe that helped Cisco beat expectations, plus they laid off more employees than they projected. Green shoots up our butts!
August 5th, 2009 at 8:34 pm
@Pat G
How about this for a headline?
“The United States of America Likely to be Wound Down”
August 5th, 2009 at 8:40 pm
cvienne-
good one- what have we become exactly- the mega rich are protected and become richer- regardless of failure- and then-
the man with a small business shuts down because he doesn’t have Uncle Sam on his side- protecting his business through the downturn-
fucking bullshit if you ask me
August 5th, 2009 at 8:48 pm
Jim O’Neill, Goldman Sachs Group’s chief economist interview with WSJ
WSJ: How do you think investors should target emerging markets?
Mr. O’Neill: Emerging markets are a diverse set of countries. So it doesn’t make much sense to invest in a broad-based emerging-markets index
http://online.wsj.com/article/SB124864236547882043.html
ROFL. Yeah, that VWO is no good, vampire-squid dude.
August 5th, 2009 at 9:15 pm
@ahab
VennData seems to be happy…Good for him!
May the powers that be lavish upon him all that he deserves!
So let it be written…so let it be done!
August 5th, 2009 at 9:21 pm
@ahab
You see… to THEM…they’re all simply invited guests, simple “diners” at the table…The food tastes good, the wine is mellow…It’s nice to pass along a story or two in the process…
They don’t need to be worried about trivial things like “who’s going to pay the check when it is presented”, or, “who has to wash plates and clean up this mess”…
To THEM, it’s all a simple matter of filling their gullet, gettin’ drunk on the wine, and stumblin’ their way back home…
August 5th, 2009 at 9:25 pm
cvienne-
here is the good news-
we’re going to make it
here’s the bad news-
it’s going to suck-
but the mega rich don’t give a shit – because they will be comfortable anywhere- Paris sounds nice
August 5th, 2009 at 9:26 pm
That recission piece is simply stunning. STUNNING.
August 5th, 2009 at 10:25 pm
Paris is nice, non?
August 5th, 2009 at 10:37 pm
and away we go…
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/05/AR2009080504063.html
U.S. Considers Remaking Mortgage Giants
‘Bad Bank’ Would Wipe Slate Clean for Fannie Mae, Freddie Mac by Taking Their Toxic Loans[/size]
By Zachary A. Goldfarb and David Cho[/b]
Washington Post Staff Writers
Thursday, August 6, 2009
The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market, government officials said.
The bad debts the firms own would be placed in new government financial institutions — so-called bad banks — that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.
The moves would represent one of the most dramatic reorderings of the badly shattered housing finance system since District-based Fannie Mae was created by Congress to support mortgage lending during the Great Depression. Both Fannie Mae and Freddie Mac, based in McLean, have government charters to buy home loans from banks, which they then repackage and sell to investors. The banks can then use the proceeds to offer more loans to home buyers.
August 5th, 2009 at 10:45 pm
theora-
thanks for highlighting the rescission article- it is as I have said-
if they can’t eliminate the insurance companies- than why bother with health insurance reform at all- with the ins companies in the mix it will be a slopped up affair with higher costs-
Wes-
only if it is a dalliance- while on your way to a Greek island- to take a long respite- after moving all your USD holdings into foreign currencies or gold-
and then- deciding how to pass the time
August 5th, 2009 at 11:39 pm
Yes, the recission article! And, now I seem to be obsessed with the entire site.. bookmark http://tauntermedia.com/ and thank you, Barry.
August 6th, 2009 at 1:23 am
To THEM, it’s all a simple matter of filling their gullet, gettin’ drunk on the wine, and stumblin’ their way back home…
And they need not worry about the highway robbers on their way home because they control that market too.
August 6th, 2009 at 8:07 am
If Trimtabs jobs assessment is correct we are still in really deep doodoo and the suspicions about the gummint misleading us is well founded
TrimTabs Estimates U.S. Lost 488,000 Jobs in July
BLS Likely to Revise Job Loss Estimates Sharply Higher for First Half of 2009
Sausalito, CA – August 5, 2009 – TrimTabs Investment Research estimates that the U.S. economy lost 488,000 jobs in July, considerably more than the consensus estimate of a loss of 305,000 jobs. In addition, TrimTabs expects the Bureau of Labor Statistics to revise its job loss estimates sharply higher for the first half of 2009 based on the latest unemployment insurance survey results.
“While Wall Street is convinced the recession is over, the economy continues to shed jobs at an alarming rate,” said Charles Biderman, CEO of TrimTabs.
TrimTabs’ employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees. Historically, TrimTabs’ employment estimates have been more accurate than those of the BLS.
As job losses have continued at a rapid clip, declines in wages and salaries have accelerated. According to TrimTabs’ tax data, wages and salaries fell 5.9% year-over-year in July, worse than the decline of 5.1% year-over-year in the second quarter.
“The personal income report the Bureau of Economic Analysis released Tuesday contained huge downward revisions to wage and salary growth,” said Biderman. “Now that the BEA is using unemployment insurance reports from the first quarter to estimate current wage and salary growth, its data confirms what we have been reporting for months.”
The BEA’s estimates of wages and salary growth changed from year-over-year declines of 0.8% in April and 1.1% in May to year-over-year declines of 4.0% in April and 4.2% in May. Also, the BEA reported that wages and salaries dropped even more sharply in June, falling 4.7% year-over-year.
“Two months ago, we asked BEA economists how they reconciled the huge declines in real-time tax deposits with their report of a modest decline in wages and salaries,” said Biderman. “They could not answer our question. We know now that by ignoring real-time data, the BEA was providing an inaccurate view of the economy’s health.”