The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

OK, kids, lets have some fun with this one:

When does the ZIRP Fed policy come to an end — later this year, next year, never?

And where does that lead Inflation or Deflation or Disinflation?

Gold goes to: $1500 or $3000 or back to $500 ?

~~~

What say ye?

Not to make today all me-media all the time, but since people asked, here are the links to the 3 Yahoo segments I recorded yesterday:

• Weak New Home Sales Report Least of Housing’s Problems, Barry Ritholtz Says

• Something’s Gotta Give: Rising Retail Profits Meet Falling Consumer Confidence

• Ritholtz: Still Bullish After All These Gains

News Hub: Wall Street Blogs to Watch 2/25/2010 9:31:42 AM

David Weidner tells the News Hub panel which Wall Street blogs are must-reads.

The 7 yr note auction was good as the yield at 3.078% was about 1-2 bps below the when issued and the bid to cover at 2.98 is the highest since this maturity was reintroduced in Feb ’09. The average since then is 2.59. The fly continues to be the very high level of direct bidders which totaled 17.2% with indirect bidders chipping in 40.3% of the auction. 17.2% is so far above normal (has only been in double digits once before and was running 2-8% most of last year) that it is really distorting the color on who is buying as buyers avoid the dealer community in placing bids and go direct to the Treasury instead. This influence is possibly skewing the pricing as dealers don’t have as much transparency of the market.

This morning, the Census Bureau reported the latest data on new orders for durable goods. As usual, all eyes were on the ex-transportation component, which unexpectely fell 0.6 percent in January, sending economists scurrying to figure out why the economy is not doing what they said it will.

Admittedly, month-to-month changes don’t tell a whole lot. After looking through the data going back several years, however, one trend seems to stand out: the growing impact of public spending on the overall total. Although the relationship has been somewhat volatile on a monthly basis, it’s clear that defense-related outlays, for example, have accounted for an increasing share of orders for products that are expected to last more than three years.

During the last 17 years or so, the median value of the ratio of defense-related orders to the overall orders number has been 4.4 percent. However, since the recession began (in December 2007), the average has been 6.6 percent. Last month, it hit 8 percent. As with other areas of the economy where the government appears to be playing an important role, it’s worth bearing in mind that the “recovery” may not be all that it seems.

The big 3 credit ratings firms seem to have missed nearly every major crisis, collapse, bankruptcy and default of the past few decades.

The fear is that they will – belatedly, and without providing any meaningful insight (beyond CYA) further pummel Greek government bonds by lowering their ratings for Greece.

The fear that Standard & Poor’s and/or Moody’s will soon lower the boom (Fitch already has) has Gold rallying, and the US dollar up 0.135 (0.17%).

MarketBeat reports that spreads on Greek borrowing has widened vs Germany to 3.55%, and the cost of insuring a Greek government bond against default for five years, has hit about $397,000 annually (up from $382,000 yesterday).

Equities down 2% at one point, have climbed back to down 1% or less.

It just goes to show you that Ratings Agencies are no different than analysts: You don’t need them in a Bull market, and you don’t want them in a Bear market . . .

~~~

And the markets? They are none too happy about all this:

Very nice comments from the WSJ today:

“Every addict has to have his or her fix, and for Wall Street junkies obsessed with bonuses, bailouts and beta, the blogosphere has plenty of smack to go around…

What follows, in my opinion, is the best of the best. I’ve limited the list to include sites that combine news and analysis on Wall Street, skipping the stockpickers or pure investing sites. Some in the top 10 are focused on the economy, but include the world of broker/dealers and banks as part of their mission. For purely economic blogs see WSJ.com’s piece from July 2009. I’ve also excluded blogs run by major news organizations such as the Wall Street Journal, New York Times and Financial Times.”

The list includes TBP, Business Insider, Calculated Risk, DealBreaker, Epicurean Dealmaker, Goldman Sachs 666, MacroMan, Naked Capitalism, Reformed Broker, and Zero Hedge.

>

The realm of fund manager and Bailout Nation author Barry Ritholz,The Big Picture is an often-updated take on all things Wall Street with a particular focus on economics. Launched in 2003, Mr. Ritholtz and more than a dozen contributors have won Big Picture a wide following, claiming more than two million monthly page views, with prescient calls and common sense. It’s a beautiful, clean site updated frequently and written in plain English.

Followers: Nouriel Roubini. Regular traffic comes from the Federal Reserve, Goldman Sachs, according to the site.

How Ritholtz Rules Discussion on BP:”Fear my wrath, mortals!”

Way cool !

>

Source:
Ten Wall Street Blogs You Need To Bookmark Now
DAVID WEIDNER
WSJ, FEBRUARY 25, 2010
http://online.wsj.com/article/SB10001424052748704240004575085901098514146.html

In likely weather related noise, Initial Jobless Claims totaled 496k, 36k higher than expected and up from a revised 474k last week. Continuing Claims, delayed by one week, rose just 6k but were 47k above expectations. Extended benefits, reported on a 2 week lag, fell by a net 320k but follow a gain of 275k last week. Bottom line, the snow storms were a definite influence on the reported data likely due to the administrative backlogs that got created, thus don’t read too much into the data. With this said, the trend in initial claims is still too high and while the pace of firings still has slowed dramatically, companies still remain very reluctant to aggressively add workers on a permanent basis.

The Warner Bros. annual blooper reel for 1936.

Featuring Humphrey Bogart, Joe E. Brown, James Cagney, Bette Davis, Kay Francis, Leslie Howard, Paul Lukas, Barton MacLane, Fredric March, Paul Muni, Pat O’Brien, Claude Rains, Edward G. Robinson, Warren William, etc.

Film was expensive then and stoppages were costly. Film now is the least of the expenses and they can make up for it by adding it as “extras” on the DVD. Flubs then cost money, now they can make money.