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

As mentioned Monday, I found The Big Short discussion on 60 Minutes quite interesting. I went over to Amazon to check out the book — and was stunned at the very low review ratings for a book that had yet to be released.

At the time, there were but 7 reviews. I clicked through a few a One Star ratings, and saw some jackass had written the following:

“Watched the interview on 60 minutes last night could not wait to order the book this morning on my kindle. Your loss.”

My response to the dolt reviewer:

“The book isn’t even out yet — and because the publisher has yet to release the kindle edition, you give the book a 1 star rating? An author spends 2 years researching and writing — important enough of a subject that 60 Minutes does a piece on it. What sort of creep dismisses 2 years of someone’s work because their infantile demands could not be satisfied THIS SECOND?

There are now 77 reviews, and 41 are one star reviews for kindle related  issues. Most of these brain damaged eejits who won’t understand this, but Amazon sure as hell should:

Authors do not control when the Kindle version comes out any more than they do when the paperback is released. Publishers typically release a kindle version sometime AFTER the hardcover. My book, Bailout Nation, was released May 26, 2009, and the kindle edition came out sometime in the Fall . . . the paperback is due June 28, 2010.

As an author, you have precisely ZERO control over these dates.

Considering the 1 star ratings/complaints about the Kindle edition were posted BEFORE THE BOOK was even released, they are utterly absurd. Amazon needs to step up and delete these non-reviews of books. At the very least, they should not count in the book’s star ratings. (And as commentors have suggested, they should require a purchase prior to any reviews).

That’s the equivalent of giving a movie a bad review because the popcorn concession in the lobby was out of butter.

These pro-kindle, anti-author reviews are completely unfair to the writer. A review is supposed to be about the book, not the publishers format release schedule.

If Amazon wants to be a fair vendor of books, they need to delete these idiotic, pro-kindle, fan boy reviews. Is Amazon a fair arbiter of this, or has their mad kindle lust blinded them to what is right?

Hey Jeff Bezos !  Please show me my trust in Amazon is not misplaced! Fix these damned reviews

Anyone else noticing an excessive amount of TrackBack Spam? It seems lots of gullible folks are buying into those Internet Get Rich Quick infomercials.

The SEEO folks have convinced them if they link to a lot of bloggers,and then get trackbacks, it will raise their Google Rank.

Not on my watch. That crap just pollutes the comment stream. After the jump, you will find a run of bogus splogs, scrapers and spammers. If you blacklist them, you will see a huge reduction in this crap.

(Note: If you use WordPress, you can simply grab all of this garbage and cut & paste it into your Comment Blacklist under discussion settings):

Here is all of the spammage that has shown up this month alone:

Read the rest of this entry »

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The Daily Show just kills it in this piece on Corporate fraud.

If you haven’t seen it (posted early this morning in the Think Tank) its must viewing.

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Art Cashin, head of floor operations at UBS, has the buzz from the NYSE.

Airtime: Wed. Mar. 17 2010 | 8:47 AM ET

There seems to be growing consensus that the recession ended some time in mid-2009 (June or July), and we recently pointed out that regional St. Louis Fed economists have placed their bets on a July 2009 trough. Now it’s up to the NBER.

We know that they weigh a variety of economic indicators, including Employment, Industrial Production, Real Income, and Real Retail Sales (tracked here at the St. Louis Fed). Business Cycle Dating Committee member Jeffrey Frankel likes to look at aggregate hours, too. In the real world, all of this is mostly an academic exercise in any event — Americans, like Associate Justice Potter Stewart once famously said on a different topic altogether, know a recession when they see one, and they also generally have a pretty good idea when it’s ended.  (I take pride in having nailed the NBER’s call that the recession began in December 2007 while blogging elsewhere.)

But what about GDP? How does it figure into the equation? We’ve had two consecutive quarters of growth, including the 5.9 percent of Q4 2009. How will that play?

Well, it’s a interesting question, as the NBER has very contradictory and conflicting information at its own website about how it weighs the evidence:

In announcing the 2001 recession, the NBER said (emphasis mine):

Because a recession influences the economy broadly and is not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The traditional role of the committee is to maintain a monthly chronology, so the committee refers almost exclusively to monthly indicators. The committee gives relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions.

Got that?  Okay, let’s move on.

October 21, 2003 Memo from the Committee (not coinciding with a peak or trough announcement; emphasis mine):

The committee views real GDP as the single best measure of aggregate economic activity. In determining whether a recession has occurred and in identifying the approximate dates of the peak and the trough, the committee therefore places considerable weight on the estimates of real GDP issued by the Bureau of Economic Analysis of the U.S. Department of Commerce. The traditional role of the committee is to maintain a monthly chronology, however, and the BEA’s real GDP estimates are only available quarterly. For this reason, the committee refers to a variety of monthly indicators to determine the months of peaks and troughs.

Although the Committee qualifies its October 2003 remarks by mentioning the need to maintain a monthly chronology, the two comments nonetheless seem contradictory to me, and flip-flop the importance of what is to be considered.

Whichever way they eventually call it, the NBER will have a document to which it can point to support its decision.  Is it time — or long past — to formalize what it means to be in, or out of, recession?  If so, my vote might easily go to the Chicago Fed’s National Activity Index.

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The Chicago Fed provides the following bogeys:  ”A CFNAI-MA3 value below –0.70 following a period of economic expansion indicates an increasing likelihood that a recession has begun. A CFNAI-MA3 value above –0.70 following a period of economic contraction indicates an increasing likelihood that a recession has ended. A CFNAI-MA3 value above +0.20 following a period of economic contraction indicates a significant likelihood that a recession has ended.”  It is an excellent indicator.

Feb PPI fell .6% headline vs expectations of a drop of .2% but the core gain of .1% was right in line with forecasts. The headline figure was led lower by a 2.9% fall in energy prices (led by gasoline) while food prices rose .4%. Energy prices have since reversed, with gasoline in particular at the highest level since Oct ’08 so PPI will move up again in March. Inflation in the pipeline was mixed but comes after strong gains in Jan. Goods at the intermediate stage of production rose .1% after a 1.7% gain in Jan. Ex f&f it was up .9%. Crude goods inflation fell 3.5% but follows a 9.6% rise in Jan. Ex f&f, prices fell .6% but follows a 6.6% gain in Jan. On a y/o/y basis, overall PPI is up 4.4% and the core is up 1%. Bottom line, because of the moving piece of energy, the headline fall is old news and tomorrow’s CPI report will be more relevant to market action.

The BoJ and FOMC, BFF. Overnight, the BoJ held hands with the FOMC in keeping rates at virtually zero. They also expanded its 3 month credit program to 20t yen from 10t. Japanese stocks rallied and the yen is down but 10 yr JGB’s are little changed. Commodity prices are rallying in response. Chinese stocks rallied 2% after a PBOC Q1 inflation expectations index fell from the record high in Q4. UK jobless claims were much better than expected and the pound is rising to a 4 week high. The US$ index is at 6 week low with the Canadian $ in particular .01 shy of parity to the US$. The weekly ABC confidence poll showed big improvement, rising 6 pts to -43, its highest level since Jan 5th and is now 4 pts above its one year avg. The MBA said the avg 30 yr mortgage rate fell to a 12 week low at 4.91% but purchases fell 2.3% and refi’s were down 1.7%. II: Bulls 46.1 v 44.9 Bears 21.3 v 23.6

One of the things I hate about a secular bull market — especially towards its rampaging tail end — is how everyone and everything gets silly. Money and champagne flows, conspicuous consumption is on full display. I recall people — literally — dancing on bars during the late 90s in NYC.

To be sure, Fed Chair Alan Greenspan was not going to be the spoilsport and take away the punchbowl. Every one was having a good old time.

Except the people who knew. Those worrywarts who looked at price, at valuations, who are familiar with market history and understood mean reversion. These folks were aware of what was going to come next.

I hated the Manhattan party atmosphere in 1999; it was obvious how (but not precisely when)  it was going to end: Badly. The prices paid for baubles, the reckless, conspicuous consumption, and ostentatious displays of wealth — paying more than full retail — it was all a symptom of way too much money sloshing around.

Mal-investments were everywhere, and prices became stupid — for cars, for apartments, and of course, for equities.

That is, to say the least, no longer the case (equities excepted).

Prices have plummeted, consumers are de-leveraging, and cash is king, For those of you consumers who are value sensitive — and still have jobs — this current environment is far more attractive a period of time to acquire goods and services than the mayhem at bull market tops. Everything is priced to sell.

I started thinking about this issue in mid 2008 when a wealthy client had said the following to me: “Barry, I appreciate you steering us away from trouble during this mess, but your commentary is so relentlessly negative, its a bummer to read. What can you tell me that is not utterly depressing?”

Now, this gentlemen measures his wealth in GDP of small countries, and while we have many similar interests — cars, watches, boats, travel, music, etc. — his “collections” are insane, museum quality work. (I have an old SL, he has a airplane hanger full of fully restored 196os Ferraris; I have a few nice antique watches, he has million dollar time pieces).  So my advice –  I mentioned this on Tech Ticker — was as follows: “Make a wish list of what you have wanted to own, but were unwilling to pay top dollar for. Could be real estate, art work, collectible autos, jewels, sports franchises. Bid 50% of the peak market price. Then sit back to see what happens.”

He thanked me for that, and acquired a number of items at a hefty discount to market value.

Which leads me to this question for us mortals: Are any of you readers going on a “spending spree” of sorts? What are you purchasing? What assets have dropped enough in price that they have tempted you to step up to the plate and buy?

Since the crisis began, I have advised clients to consider buying:

-Homes, Vacation Properties
-Renovations, Construction, Extensions
-Vacations, Travel
-Collectible Automobiles
-Investments, Stocks, funds
-Boats, Planes, recreational vehicles
-Art & Sculptures?
-Audio, Video, Electronics, Computers.
-Watches, Jewelry (especially those of Precious Metals)

Fortunately, I avoided temptation and did not make many dumb purchases at the top. That made me more comfortable buying distressed assets after the prices collapsed. And, putting my money where my mouth is, I have made many purchases this down cycle (no Gulfstream, but much of the rest of the list).

So my question is simply this: What are you buying?

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For those of you who want to be anonymous, send me an email at thebigpicture at optonline dot net, and I will assemble a list of the most interesting purchases for a future post . . .