Some killer stuff here:

How mistaken ideas helped to bring the economy down (FT)

• Jubbak: Why big banks hate banking (MSN)

Reflation Trade Shifting Into Reverse? (Barrons)

Uncle Sam Adds 5% to Prices of Homes, Goldman Says (WSJ Deelopments)

• Rex Nutting: 7 hidden ways to watch economic indicators (Marketwatch)

Bond Weakling California Shows States’ Failure to Disclose Debt (Bloomberg)

CNBC Viewership Plunges 50% In October (Zero Hedge)

Silicon Valley office vacancies near 20 percent (Merc)

Memories of Friends Departed Endure on Facebook (Facebook blog)

• Justice Stephen Breyer and Justice Antonin Scalia A Conversation On The Constitution (Video)


What are you reading?

Category: Financial Press, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

54 Responses to “Wednesday Reading”

  1. Michael M says:

    “Boston Properties also said it recaptured the naming rights of the General Motors Building at 767 Fifth Ave, as the automaker agreed to continue to rent 114,000 square feet for another 10 years in one of Manhattan’s most valuable buildings, while giving its landlord the naming rights.”

    GM…one of Manhattan’s most valuable buildings…for another 10 years…

    http://www.reuters.com/article/marketsNews/idCNN2830584420091028?rpc=44

  2. call me ahab says:

    from Peter Boockvar on BR’s Think Tank-

    “Edmonds.com today is estimating that the Cash for Clunkers program cost taxpayers $24,000 per vehicle sold. They estimate that 82% of sales would have happened anyway and thus the handout of up to $4,500 really only enticed 18% of the buyers of 690k vehicles sold under the program.”

    USG in action- why not just buy the cars and give them away in a raffle

  3. Stephen says:

    I started reading the FT piece and have a question:

    When talking about markets and prices the term ‘fair value’ keeps getting thrown around. Just what the hell is ‘fair’ value and who is the Deity that determines what ‘fair’ is?

    If I have a commodity for sale there will be many, many different prices for it because it is worth a different amount to different buyers. ‘Fair’ is a four letter word that is thrown around by anybody that is trying to gain an unfair advantage IMHO.

    Martin Wolf keeps throwing the term ‘fair value’ around as if he were sitting on Mount Olympus viewing the world through his magic glasses that tell him exactly what the price of every item should be. If you think Markets aren’t nicely efficient, just wait until you see how inefficient price setting by some small regulatory board turns out to be.

    The only way to find out what prices should be is to allow buyers to bid on the item – read, FREE MARKET.

  4. MRegan says:

    This way off the beaten path, but I have been reading about a Chinese company’s (CAMC?) interest in underwriting an agricultural irrigation project in an area called Condesuyos (southern Peru)- to the tune of 300 million semolians.

    http://www.camce.com.cn/en/

    Guess what else might be present in Condesuyos- uranium. Also Condesuyos is basically the western slope of Coropuna: http://en.wikipedia.org/wiki/Coropuna

    That’s all about water.

    In Spanish:
    http://www.minasdeperu.com/PROSPECTO-URANIO.pdf

  5. call me ahab says:

    “Wal-Mart Starts Selling Caskets, Urns Online”

    http://www.cnbc.com/id/33519401

    looks like Walmart is covering the whole life cycle-

    better than a Folger’s can I guess

  6. bsneath says:

    Study: No Shortage of U.S. Engineers
    America is turning out plenty of science and engineering grads, a university study concludes, but many of the best are taking jobs in finance and consulting

    http://www.businessweek.com/bwdaily/dnflash/content/oct2009/db20091027_723059.htm

  7. Pat G. says:

    “CNBC Viewership Plunges 50% In October (Zero Hedge)”

    There are reasons for that. Like this: http://www.cnbc.com/id/33289478

  8. HarryWanger says:

    Let’s see… I just read this:

    Oct. 28 (Bloomberg) — U.S. Senate leaders revised a proposal to replace an expiring $8,000 tax credit for first-time homebuyers, expanding access to higher-income borrowers and to some people who already own a home, a person familiar with the matter said.

    The plan would extend the credit, due to expire Nov. 30, to home purchases under contract by April 30, 2010, with borrowers allowed another 60 days to close the sale. It would make the credit available to individuals earning up to $125,000 – or $225,000 for couples – up from $75,000 for individuals and $150,000 for couples under the current law.

    -Bound to happen. Now they need to adjust jumbo rates to reflect conventional rates and presto! the stimulated housing market becomes a bubble. But of course by that time, conventional rates might be substantially higher anyway.

  9. HarryWanger says:

    Regarding CNBC: They had “Breaking News” on their own show and went to someone in another studio who announced that CNBC polled a group of S&P analysts who all think the S&P will be higher by the end of the year.

    Yes, they created their own “Breaking News. Pathetic group over there.

  10. ben22 says:

    re: that extension of the home tax credit:

    Ahab posted over at AT’s site that the credit would be $7,290 or 10% of purchase price of the home whichever is less.

    Why $7,290? Where does that come from?

  11. The Curmudgeon says:

    @HW:

    Yeah, I just read that. There is seemingly no limit to how much pandering the pols are capable of. Why not tell everybody that the first $10,000 of their tax liability is theirs to spend? Would it increase the deficit? Sure, but at least it wouldn’t continue along this massive mis-allocation of capital that constitutes government interventions in the housing market.

    As for me, I’m thinking I need to buy a house, just to get the credit. It’d require shifting some money around in the IRA’s, and presto, a goodly portion of my taxes are paid. I already have a house that’s paid for, but hey, maybe my kids (15 and 13) need one too. See how ridiculously this queers up the capital allocation?

  12. torrie-amos says:

    apparently it is a ratchet down, 8k if you’re in by april, only 4k for another 60 days and then a final 2k over the summer

  13. ben22 says:

    harry you’ve really joined the dark side haven’t you?

    welcome

    we’ll all be meeting for Halloween for the usual….

  14. ben22 says:

    speaking of IRA’s and taxes,

    it won’t be for everyone but people may care to take a look at the Roth Conversion rules for 2010.

  15. emmanuel117 says:

    @bsneath

    “Gates argued that there is a decline in student interest in the sciences and that changes in immigration policy should be made to help fill gaps in the labor market. At the hearing, Gates advocated for a variety of changes to U.S. immigration policy, including extending the period foreign students can work in the U.S. after graduation, increasing the current cap on H-1B visas [for skilled workers], and significantly increasing the number of green cards issued annually. Tech companies such as Google (GOOG) and Oracle (ORCL) also advocate these policies as part of Compete America, the tech industry lobbying group.”

    Translation: We don’t want to attract talent by raising wages, so just give us some cheap labor.

    Also, there’s a reason for the lack of student interest…

  16. torrie-amos says:

    ben, there are forms like tax forms realators have to fill out that work out the numbers, the tug is 8k, it is usually not that yet it is plain and simple free money and pretty close

  17. HarryWanger says:

    Regarding the CNBC “Breaking News”, here’s the video. It’s pretty priceless that they interrupted their own show for their own poll. Worth a watch to hear what the “half dozen or so analysts” had to say that was “Breaking News”

    http://www.cnbc.com/id/15840232?video=1311466052&play=1

  18. ben22 says:

    Torrie,

    thanks
    the entire scam of these credits disgusts me.

  19. HarryWanger says:

    ben22: There was a definite change in psychology in the divergence from what the cheerleading analysts were saying and what the chart was saying. They were screaming SPX1200 EOY and the chart was screaming TOP! I think we may be in for a sucker day tomorrow to get the traders all excited again but they’ll get slammed as we go into the end of the year.

    My thought for the TLP (The Little Picture – through year’s end): Managers have to start to worry if the market continues lower or they’ll have hell to pay. You don’t think you’ll have a mass of pissed off fund investors who’ll scream “Why didn’t you sell when the Dow was at 10,000?” If that happens, we could see a very swift sell off into the EOY as everyone scrambles to lock in gains. JMO.

  20. Pat G. says:

    @ ahab–”better than a Folger’s can I guess”

    Depends. Ever see that movie with Nicholson and Freeman called The Bucket List?

  21. call me ahab says:

    b22-

    i pulled that post directly from CR-

    http://www.calculatedriskblog.com/2009/10/home-buyer-tax-credit-to-be-extended.html

    did you kids have a fun day over at Andy’s :-)

  22. call me ahab says:

    pat g-

    did not see that- my reference was to The Big Lebowski- but on second thought i think it was a Hills Bros can

  23. Pat G. says:

    @ ahab

    I recommend the movie. I’m sure it’s out as a rental. Both were buried in coffee cans. Not sure whose.

  24. call me ahab says:

    pat g-

    i’ll check it out- think i have it “on demand” on comcast

  25. Steve Barry says:

    What I said two days ago is starting to play out…it could be torrential:

    “You cannot print your way to prosperity and you cannot solve a debt problem with more debt. Therefore the rally is doomed. It does seem that stocks now move inverse to the dollar. That is also an unsustainable conundrum. You can’t debase your currency to prosperity. So what will give?

    Gold speculation is at record highs…dollar is also heavily shorted. Those two go hand in hand. Since other currencies are equally as bad, and China can’t have the dollar collapse, fundamentals and sentiment calls for a huge dollar rally. Physical demand for gold is plunging – this is a deflationary debt crash.

    Therefore, I conclude big dollar rally coming, massive gold and stock collapse. According to Hussman last week, we are at record overbought conditions in stocks.”

  26. Pat G. says:

    @ ahab

    Tell me what you think. Where they were buried and how was a fitting end.

  27. Steve Barry says:

    Check out gold miner AEM after hours…ties into my theme.

  28. ben22 says:

    ahab,

    of course, especially on days like today, plenty to talk about.

    @Steve Barry,

    The DX is tracing a 5 up, I think we’ve bottomed and if not I don’t expect lower than 74.50-74. As you say, way too many shorts there and the exit won’t be orderly. All the headlines on the dollar and the countdowns to dollar implosion should reinforce this view, not to mention the persistent 3% DSI bull reading on the dollar for the better part of two months now. It’s all one trade from there….

  29. Pat G. says:

    @ Steve

    Let’s keep this simple. Debasing our currency by printing our way to prosperity is exactly what the USG has planned for us. Eventually, the stock market and USD will move in one direction, south. Dollar rally? Perhaps. But given the massive debt being sold into the marketplace now, the debt which will occur in the future from passing a national health & cap and trade plan not to mention the $60T due in siphoned off SS benefits to baby boomers..the USD is toast. The USG’s plan has always been to repudiate its debts.
    We are the winkest link.

  30. Pat G. says:

    Oops. I meant weakest (wink, wink).

  31. atswimtwobirds says:

    i wonder is Barry still long AIB. It’s down about 20% since Monday.

    ~~~

    BR: Long gone — AIB was dumped at 8 and change;

    See my market warning yesterday morning that we were due for a 5-15% correction (5% is already in!) . . .

  32. economicsmatters says:

    The Future of the Dollar: The Threat of Collapse and the Move Towards a New Reserve Currency
    http://www.scribd.com/doc/21696939

  33. thetanman says:

    ats

    And almost 50% off the highs. The indices are ok, but the underlying carnage has been brutal-especially for the recent buyers. Goodyear was down 20% today. The volume has been a lot heavier than on the way up. A decent correction would just about finish off any residual retail enthusiasm. Looks kinda shitty.

  34. Steve Barry says:

    @Pat G:

    Remember though that the dollar is priced relative to other currencies. I fully expect the USG to debase it..but I expect every other government to do the same. Relatively, the dollar should rise….it has already been shorted the crap out of. You might then say, “buy gold”…but every spec out there already did that too…it’s going down.

  35. Rikky says:

    Goldman has spoken and whatever they say do the exact opposite as everything they say is for their own benefit. I interpret the below as a push to lower the market so they can make more profits when it snaps back higher after 12 months.

    “Cash on sidelines” less than investors anticipate: Goldman

    http://news.yahoo.com/s/nm/20091028/bs_nm/us_economy_cashflows_1

  36. HarryWanger says:

    More thoughts on consumer spending this holiday, which for some reason, many “experts” are saying will be a surprise. Let’s take a look at two indicators, employment and consumer confidence.

    Confidence fell again this week to 47 with expectations component down as well. Last October it was hovering right around 40. Not a huge difference given the fact that the “world was ending” last year. Now look at unemployment. Last Nov. the unemployment rate was at 6.7%. We’re at 9.8% and climbing.

    So with a dismal consumer holiday last year with 6.7% unemployment and a confidence level in the 40′s how could any sane person make the argument that with unemployment at nearly 10% this year and confidence fairly close to last year that we won’t have a dismal season. Simple math. It’s impossible to have anything but a disappointing holiday retail season.

  37. HarryWanger says:

    Rikky: Cash on the sidelines was and still is a big joke. Someone so aptly pointed out a few days ago (I can’t remember who it was but I’m giving credit where due) Volume, minus the craziness of late ’08 and early ’09 is really not that far out of normal. Actually, it’s pretty much right where it has been historically. So either that cash has been sitting on the sidelines since early this decade or it’s just another “mantra” for the “experts” to throw around fooling not only themselves but the naive that follow them.

  38. cvienne says:

    @Venn Data (9:36)

    In similar news…78 (January), down to 53 (now)…and counting…

    Barack Obama sees approval rating plummet

    Barack Obama’s decline in popularity since the summer IS THE WORST of any US president at the same stage in a first term in over 50 years.

    The most recent public opinion poll carried out by the research company Gallup found Mr Obama’s approval rating stood at 53 per cent for the third quarter of 2009.

    The figure represents a sharp drop for the 62 per cent he recorded from April.

    When he first entered the White House, Mr Obama’s rating stood at a LOFTY 78 per cent, but since then has been crippled by the long-running debate over his health reform plans and accusations he is “dithering” over sending more troops to Afghanistan.

    Commenting on the latest opinion poll, Jeffrey Jones, from Gallup, said: “The dominant political focus for [Mr] Obama in the third quarter was the push for health care reform, including his nationally televised address to Congress in early September.

    “[Mr] Obama hoped that Congress would vote on health care legislation before its August recess, but that goal was missed, and some members of Congress faced angry constituents at town hall meetings to discuss health care reform.

    “Meanwhile, unemployment continued to climb near ten per cent.”

    Republicans have stepped up their attacks on the president in recent weeks, sensing public opinion turning against some of his more dividing policies.

    In a speech to a thinktank in Washington last week, former US vice president Dick Cheney accused Mr Obama of being scared of making a decision on Afghnaistan.

    “Having announced his Afghanistan strategy in March, President Obama now seems afraid to make a decision, and unable to provide his commander on the ground with the troops he needs to complete the mission,” he said.

    “It’s time for President Obama to make good on his promise. The White House must stop dithering while America’s armed forces are in danger.

    “Make no mistake, signals of indecision out of Washington hurt our allies and embolden our adversaries.

    “Waffling, while our troops on the ground face an emboldened enemy, endangers them and hurts our cause.”

    The US has delayed making any decision on further troop deployments until the result of a run-off in Afghanistan’s presidential election are formally confirmed.

  39. Mike in Nola says:

    Venn Data:

    Re: ZH and Google searches

    Apples and oranges.

    Neilsen ratings are the equivalent of hits.
    Regarding a web site, the number of hits is a lot more important than Google searches. I never search for ZH because I have it in my RSS reader. Doesn’t mean I don’t read it.

    Google searches would be more like how many people looked in the TV schedule to find what channel ZH is on.

  40. Greg0658 says:

    cvienne at 9:52 pm .. I saw that survey on the air today .. what a mashup of pollsters
    TBTF
    http://en.wikipedia.org/wiki/MSNBC (GE)
    http://en.wikipedia.org/wiki/The_Wall_Street_Journal (NewsCorp)

    ps – if the WH is monitoring .. FYI .. imo ChicagoFOX is not exactly like NationalFOX
    http://en.wikipedia.org/wiki/Carnivore_(software)

  41. cvienne says:

    @Greg0658

    “I saw that survey on the air today .. what a mashup of pollsters”

    Yeah, I suppose when the approval ratings were 78 they were dead on accurate, but now it’s just a “mashup”, makes a lot of sense…

    Because we know the dissatisfaction could not possibly come from this:

    ‘Jobs Created or Saved’ Is White House Fantasy: Caroline Baum
    http://www.bloomberg.com/apps/news?pid=20601039&sid=aUuHhaDx8Hr8

    Excerpt:
    Actual hiring seems to be lagging behind the model’s land of make-believe. For small businesses, which are the source of most job creation in the U.S., the government’s increased and changing role in the economy isn’t a confidence builder. Businessmen have no idea what health-care reform will mean for their cost structure or what whimsical tax policies the government might impose when it realizes those short-term deficits are running into long-term unfunded liabilities.

    No wonder capital spending plans were at an all-time low in the third quarter, according to the NFIB monthly survey.

    Only 30,383 jobs were created or saved by the American Recovery and Reinvestment Act, according to Recovery.gov, the government’s once-transparent Web site that has become a complex blur of numbers, graphs and pie charts. These are only the jobs reported by federal contract recipients. The Obama administration will report the larger universe of ARRA-related jobs on Oct. 30.

    An extrapolation of what would have happened without the fiscal stimulus isn’t much consolation to the 9.8 percent of the workforce that is unemployed. Nor is Romer’s prescription for the economy and labor market very comforting in light of the trillions of future tax dollars that have been spent, lent or promised by the federal government.

    “If you take your foot off the gas, the car goes from 60 back down to a slow crawl,” Romer said in clarifying blog post.

  42. cvienne says:

    @Greg0658

    Or the string of broken promises…

    1.PROMISE BROKEN. Mr Obama said he would “not sign any non-emergency bill without giving the American public an opportunity to review and comment on the White House website for five days”. But the “sunlight before signing” promise has already fallen by the wayside with Mr Obama signing three major bills without public scrutiny.

    2.PROMISE BROKEN. Mr Obama repeatedly said he would negotiate health care reform in televised sessions broadcast on C-SPAN, the public service network. Instead, he his approach has been no different from his predecessors, holding talks behind closed doors at the White House and Congress.

    3.PROMISE BROKEN. Mr Obama solemnly pledged that “no political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years”. In practice, Mr Obama has granted several waivers to this rule, allowing lobbyists to serve in the top reaches of his administration…

  43. Greg0658 says:

    cvienne .. (just an outline / gotta move off here to be serious)
    I sorta gave myself this assignment to help Arianna Huffington with … this looks like a good starting block:
    “Suggestions Wanted for “Can Capitalism Survive?” Debate .. On Friday, I’m taking part in a debate that will be broadcast on C-SPAN. Howard Dean and I will be crossing rhetorical swords with Dick Armey and John Kasich on the question “America’s Future: Can Capitalism Survive?” The event will be moderated by Joe Scarborough.”

    1) TBTF – easy .. capitalisms drive to destroy competition in a super-interactive, high technology, competitive society that is required more and more to be politically correct
    2) Technology interactiveness – in a competitive environment people must utilize trusts in products and services across many fields that any one step up the ladder can bring ones unit crashing to the ground into a unmitigatable tangle
    3) Jobs Created or Saved / Sm Mid Big Huemega Businesses – these last couple decades has demonstrated how the trickle down of knowledge from super-technological developments and the corps that own the patents and the trickle down of those profit $s has brought upon our pyramid scheme a stratified distribution that capitalism is unable by design to handle … the government attempted to create jobs for folks via building buildings (an enterprise that is about 8000 years in development) and paper pushing (an enterprise that is about 6000 years in development)
    4) Disclosure / Public Input – capitalism and its millenniums of development and control is fighting that one tooth and nail .. you can’t blame POTUS44 for that
    5) Healthcare – I’m getting tired and this is just a blog entry Ditto 4) … except pull millenniums down to 300 years
    6) Good-ole Boy Network – to quote an old song “I can tell by the clothes you wear you come from BarryTown”

    * LOL this moment (30 min ago) at SquawkBox (StarTrek) intro .. I am just about sure Earth transformed from capitalism to another form of labor for stuff environment … to have folks on the planet and in the stars content with their roles in the Enterprise

  44. Greg0658 says:

    other areas I’m interested in
    7) Immigration & Population Control for “the greatest nation for capital gains retention/export”
    8) Energy Independance / R&D
    9) Waste Reduction & Removal R&D / Global Climate Change R&D
    10) Dispersement of Global Policing Costs

  45. cvienne says:

    @Greg0658

    ?????????WTF????????????

    All I got out of that was:

    The voice of Charlie Brown’s teacher…………………………….STAR TREK………………………More voice of Charlie Brown’s teacher…………….

  46. Greg0658 says:

    cvienne :-) blah blah blah blah
    The Great Pumpkin, Charlie Brown (for your enjoyment)
    http://www.youtube.com/watch?v=pzU8UX6hP8w

    FYi – last evening I spent over 4 hours rewrite’g (above 20minutequickie-work’g off our points) for the Cspan debate/show mentioned in the 1st paragraph. On posting the piece, it was to long, they have a 250 word limit. (went to bed / woke up at midnight). Attempted post in 3 parts / the editor okd.

    seen here at time stamp 10/30/09@1:51am
    http://www.huffingtonpost.com/arianna-huffington/suggestions-wanted-for-ca_b_335779.html

    Oh and yester-day actually Worked on below civic project & for a change, real customers thru the door & even paper trail making phone calls.
    http://my.barackobama.com/page/content/hrvcvideos/

  47. Greg0658 says:

    Can Capitalism Survive .. imo No .. at least it shouldn’t .. *but with a but*
    Corporatism – as in your opening – I will be using one of the 2 “C” words used in this essay – nearly the same notion.

    1) Energy Independence – Capitalism is unable to move away from oil dependency into cleaner fuels for climate interests and trade balance without upsetting the cash flow rhythm and the controlling faculty.

    2) Waste Reduction & Cleanup – Corporatism is un-eagar to move from a throw away society and recycle, again because controlling faculties would lose market, and Capitalism does not intend to (when able to thwart) spend cash resources for cleanup needs, like on our Supersites.

    3) Population Balance; Natural Resources; Immigration Control – Capitalism is in constant need for expansion as its engine of growth. Take as an example, well manufactured furniture and homes. They would be in less demand with a designed population per acre balance. War as a method for reductions are no longer as politically correct; or advisable on a world war scale of activities. Items 1 & 2 are major injections here also.

    4) ToBigToFight – Corporatisms natural drive is to destroy competition. To be a world player and mass produce a widget, a business needs a massive factory. The Good-ole boy network has little interest in sharing, that notion goes against our sporting competitive nature*.

    Hence:
    Mergers & Acquisitions work against the consumer, who needs a job to buy.
    M&A works against the government who needs a competitor factory for its property taxes.
    We are where we are because of a Wrung Out Economy with to many laborers unable to labor.

    5) Technology Interactivity – a business must utilize products and services and place trust across many fields to produce a product of major standing, researching patents and implementing twists of trade secrets. The interactive nature of data collection will report activity to the collective with the notion that a startup is threatening the Collective.

    With items 4 & 5 there is also the Polar Opposite. At levels, little is known, as in the underground cash flow in drugs, prostitution, gambling. Those operations can run with printed cash exchanging hands. A law in nature, “For every action there’s an opposite and equal reaction”. TBTF creates the need for these avenues of small business to exist.

    Hence:
    6) Disbursement of Police’g Costs – to many USA Capitalism businesses this is a loss. Versus, to some Corporatism interests this is a win. America in large part is policing the world at the expense of the American worker through payroll deduction. Be mindful of a book and notion, Disaster Capitalism side aspect. A small scale example: a glass window replacer’s kid with a BBgun shooting up the neighborhood.

    7) Healthcare Debate – in essence is Industry vs. Industry, TBTFight, Interconnectivity in profits generation, Corporatisms drive to wring out as many costs as possible. Pitting cheaper labor markets, robotic technology, and threatened job loss as incentive to play along.

    *but coda jump* Music Harmony above Sport Competitiveness .. I do worry, nearly as much .. of the creativity & human drive losses without the sport of competition. I posted over on The Big Picture earlier a reference to StarTrek .. I am just about sure Earth would need to transform from Capitalism / Corporatism to another form of labor for stuff to arrive into that day and age … folks both on Earth and in the stars, content with their roles in the Enterprise.