Been out of pocket all afternoon — gotta catch up! Here are few items that I will be reading on the train home:

Oh, and I am doing this in real time. You can watch this list come together (keep refreshing Done!)

• Dow at New 17-Month High (WSJ)
• Google Is Hiring Bond Traders (Business Insider)
• Feinberg Cuts Cash Pay by a Third at Five U.S. Firms  (Bloomberg)
• Pressure grows to overhaul Fannie Mae, Freddie Mac (LA Times)
• Oil reserves ‘exaggerated by one third’  (Telegraph)
• Republican lawmakers stir up the ‘tea party’ crowd (WaPo)
• Too big to fail is too costly to continue (FT)
• Broken China (Fortune)
• The top five brief and blunt Steve Jobs email replies (Mac Daily)
• Google to China: Your move (GMSV)
• Astronomy Picture of the Day (NASA/Astropix)

Whats are you reading?

Category: Financial Press

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.

21 Responses to “Tuesday Reads”

  1. dead hobo says:

    • Oil reserves ‘exaggerated by one third’ (Telegraph)

    The scientist and researchers from Oxford University argue that official figures are inflated because member countries of the oil cartel, OPEC, over-reported reserves in the 1980s when competing for global market share.

    reply:
    ——————
    Who planted this? Of course they lied. Please don’t notice that the technology of oil recovery has had 30 years to improve since then. In another 30 years, I suspect people will be ankle deep in oil like material in their own back yards if technology continues to grow hyper geometrically.

  2. Those Who’ve Provided Intellectual Cover For The Bulls

    For some reason, people saying bearish things always sound smarter than those with more bullish leanings. Many of the bears are sharp guys. They often have great insights and the courage of their convictions. They write very well and much of what they say has been incontestable.

    But investing based on their conclusions this year, as satisfying as they may have been on a purely cerebral level, would’ve kept you out – or even short – during one of the greatest face-melting rallies in history.

    So how did we reconcile the factual erudition of the bears with the blatant and definitive reality of green quote screens all year? Well, we relied on a small but worthy cadre of voices who gave us the Intellectual Cover we needed to be bullish.

    I give props to four of them below…

    http://www.thereformedbroker.com/2010/03/23/those-who-provided-intellectual-cover-for-the-bulls/

  3. Brendan says:

    Oil “demand may outstrip supply by 2014.” “May,” try “did” in 2008. You can argue that it hasn’t “peaked” yet or argue technicalities about artificial demand (i.e. the difference between use rates and demand) all you want, but the bottom line was we already visited that spot. The recession timing has given some breathing room so that new, more costly, supplies could be developed before demand ramps up again. But we are clearly at the point where the only way to keep up with immediate supply is to push existing wells harder to produce more at the cost of future supply. The science is pretty simple, the finances much less so. This will be done when the price is right. You can recover more from a well at a slow rate than a fast one, so it isn’t a simple matter of the number of barrels in the ground, it’s far more complicated than that.

  4. jeg3 says:

    “There was a reason that the Sierra Club used to support nuclear power.”
    http://nucleargreen.blogspot.com/2010/03/bright-source-to-cost-15000-per-kw.html
    and
    http://energyfromthorium.com/2010/03/23/energy-cheaper-than-from-coal/

    “Cutting expenses to reduce deficits is a weak attempt to reform. One does not starve themselves back to health. What is needed is growth, savings and investment, the reallocation of capital and true valuation of goods and services. The productive economy must come back into balance with the administrative sectors, those being finance and government.

    At the end of the day, some of the greatest impediments to economic recovery reside in the selfish and fearful desire for control and power in rather narrow oligarchies, both in the East and the West. They were the primary beneficiaries of the status quo, and they will seek to maintain and even recreate it, even though it has proven to be unsustainable.”

    http://jessescrossroadscafe.blogspot.com/2010/03/monetary-base-during-great-depression.html

  5. alfred e says:

    @Brendan: We did not hit that “spot” in 2008.

    What we hit was a spot where the speculators walked away with a ton of poorly earned money, as we paid an unjustifiable price at the gas pump. Just speculators sucking some more money out of our helocs as we partied hardy.

    That pricing collapsed is proof enough.

    Yeah, it was nice to scare as many people as possible away from gas-guzzling monster trucks. And goose hybrids. And get people to start anticipating what “MIGHT” happen.

    We always seem to find a way to muddle along.

    Except nuclear power. We screwed the pooch on that one. And can never correct it.

    France got it right – breeder reactors. Actually safer. We got it wrong – boiling water fission reactors. Rickover and Westinghouse – thanks guys.

  6. TakBak04 says:

    BR: I found this article very disturbing.. Do we need GOOGLE doing BONDS? I’d like to hear your take on this. As much as I love Google…like all of us…are they treading into “dark waters/pools” where we out here in the “hinterlands” should start to be worried? The article worried me…but like with so much reports from MSM it might be a DISINFORMATION post.

    What Do YOU think about this? Postive, Negative, Inbetween?

    ————————-
    Google Is Hiring Bond Traders
    Gregory White | Mar. 22, 2010, 11:59 AM | 12,610 | comment 26

    The Strongest Evidence Yet That Google Has Too Much Time, Money
    building imploding implode collapse
    Muni Bonds Are Hyped And Starting To Implode… Time To Loosen Credit Standards?

    Google is hiring traders for its new bond trading platform, according to published advertisements on its job site.

    Currently, roles include trader of foreign government bonds, portfolio analyst for Google’s U.S. government bond portfolio, and a portfolio analyst for agency mortgage-backed securities.

    All of the roles are at Google’s Mountain View facility.

    A source who interviewed for one of the positions said that this was a means for Google (GOOG) to make use of its large cash reserves.

    Google has long discussed using its access to massive amounts of data to build a hedge fund.
    http://www.businessinsider.com/google-builds-bond-trading-desk-in-bid-to-make-money-off-of-cash-reserves-2010-3

  7. Simon says:

    re: Oil reserves exaggerated by 1/3. Why wouldn’t you? Mining companies do it all the time and oil companies are mining companies. What does it mean for you and me? Nothing new except that oil will get more expensive sooner then the experts thought. And actually expensive oil means expensive everything so perhaps Bernanki’s dreams of inflation will come true although not benignly so.

  8. alfred e says:

    Google using its data to build a hedge fund?

    Now that’s scary.

    Oh, first do no harm, as in the med profession. First get paid by someone.

    Oh, do no evil.

    I want to see that benevolent, generous bond trader in action.

    If that’s not a conflict I don’t know what is. And where are they going to hire these traders from? Wall Street or Guantanamo?

  9. Brendan says:

    @alfred: like I said, you can throw out all the technicalities you want, but we hit a point where demand outstripped supply. Not to be combative, but you define demand to exclude speculators. Why should speculator demand be excluded? Is there an international law on the books banning oil speculation? Would you argue that housing demand didn’t outstrip supply during the housing boom because some buyers were speculators? By this metric, gold is virtually worthless, nearly its entire value is based on speculators. There’s way more gold sitting on the sidelines than will be used in jewelry and industry anytime soon. Speculators will always be part of the demand for any commodity worth speculating on, why should they be excluded from oil but not other markets? The only reason oil could reach such a high price in 2008 was because of supply issues. If it were salt, another mine would have been opened or expanded and prices would have been forced down. Oil was outside of the “target price” for far to long to be the result of speculators alone. You can’t exclude hoarders and speculators from demand, they are part of the demand equation.

  10. bsneath says:

    Wall Street Despised in Poll Showing Majority Want Regulation
    http://www.bloomberg.com/apps/news?pid=20601103&sid=a4nQoiYaj2ag

  11. alfred e says:

    @Brendan: Because speculators are unconscionable thieves that steal from little guys by virtue of their ability to drive markets based on size and being insiders. Thank you very much for asking. It went way beyond the best social model of supply and demand, or as the hypocrites like to say, “market making”.

    There were no true supply issues in 2008. Fabricated … perhaps.

  12. Jack says:

    Ritholtz,
    You gotta love this Google bond/hedge/whatever fund. Isn’t this what makes companies great? Is Buffett complaining? Slim? Oh yeah, MSFT Bill?

    Here we go world. Google Roooles.

  13. Arequipa01 says:

    Re oil reserves inflation. I recommend that those who care to, begin to research the differences between electromagnetic geophysical techniques and the 3-D modeling approaches to developing the proved reserves numbers. The Times article focuses on OPEC, but the ‘margins’ are decisive IMHO. There is a company called PGS (Norwegian), and they do multi-transient electronagnetic logging. It all gets rather technical after the first couple of letters. What they do should be contrasted with, for example, how Chevron developed their numbers for the Gorgon project. Monte Carlo…A good resource is the Journal of Petroleum Science & Engineering (not free as far as I know). And the whole deal regarding neutron generators.

    Anyone playing around with the oil operations and in particular the presalt stuff off Brazil (PBR, OGX, etc) must immediately get wise to this feature of that reality. The technical challenges facing PBR et al. are significant.

    The nano level is determinant because everything is granular. You got to know the what’s happening between the rubber and the road or you’re going to get run over.
    In a lighter vein, I am currently reading an interview with a certain Capitán Saravia who was one the men involved in the murder of Archbishop Oscar Romero, thirty years ago (warning-in Spanish): http://www.walkingwithelsalvador.org/saraviainterview.pdf

  14. Arequipa01 says:

    Here’s an excerpt from the interview:

    Saravia-Yo también. ¡Claro! Vaya a verme ahora. He aprendido a vivir con lo que
    tengo. He vivido con la gente que realmente sufre. Pero sufre una calamidad
    espantosa. ¡La peor desgracia del mundo! ¡La pobreza! ¿Cómo no iba a ser
    guerrillero el hombre si estaba viendo que sus hijos se estaban muriendo de
    hambre? Y cuando iban a cagar cagaban lombrices. Yo agarro mi fusil y me
    voy a la verga. No lo espero dos veces. Ni tres. Ni necesitan convencerme
    mucho.

    Me too. Of course! Take a look at me now. I’ve learned to live with what I have. I have lived with people who truly suffer. Suffer a terrible calamity! The worst misfortune in the world! Poverty! How could a guy not be a guerrillero if he was seeing that his children were dying of hunger? And that when they went to take a sh*t, they were sh*tting worms. I’d grab a rifle and say f*ck it all. Wouldn’t wait two seconds. Or three. They wouldn’t need to convince me much.

    Of course, the geniuses in Texas don’t know who O. Romero was (the eff they don’t). Hey Texas, yer great granpappies just copied the West Florida Rebellion, oathbreakers, thieves and slavers.

    Pero, qué rico plátano!

  15. China: the coming costs of a superbubble

    China may seem to have defied the recession and the laws of economics. It hasn’t. When China’s bubble bursts, the global impact will be severe, spiking US interest rates.

    The world looks at China with envy. China’s economy grew 8.7 percent last year, while the world economy contracted by 2.2 percent. It seems that Chinese “Confucian capitalism” – a market economy powered by 1.3 billion people and guided by an authoritarian regime that can pull levers at will – is superior to our touchy-feely democracy and capitalism. But the grass on China’s side of the fence is not as green as it appears.

    In fact, China’s defiance of the global recession is not a miracle – it’s a superbubble. When it deflates, it will spell big trouble for all of us.

    To understand the Chinese economy, consider three distinct periods: “Late-stage growth obesity” (the decade prior to 2008); “You lie!” (the time of the financial crisis); and finally, “Steroids ’R’ Us” (from the end of the financial crisis to today).
    Late-stage growth obesity

    About a decade ago, the Chinese government chose a policy of growth at any cost. China’s leaders see strong gross domestic product (GDP) growth not just as bragging rights, but as essential for political survival and national stability.

    Because China lacks the social safety net of the developed world, unemployed people aren’t just inconvenienced by the loss of their jobs, they starve; and hungry people don’t complain, they riot and cause political unrest.

    Remember the 1994 movie “Speed”? A young cop (Keanu Reeves) had to save passengers on a bus that would explode if its speed dropped below 50 m.p.h. Well, China is like that bus with 1.3 billion people aboard. If the Communist Party can’t keep the economy growing at a fast clip, the result will be catastrophic.

    To achieve high growth, China kept its currency, the renminbi, at artificially low levels against the dollar. This helped already cheap Chinese-made goods become even cheaper. China turned into a significant exporter to the developed economies.

    Normally, if free-market economic forces were at work, the renminbi would have appreciated and the US dollar would have declined. However, had China let this occur, demand for its products would have declined, and its economy wouldn’t have grown at roughly 10 percent a year, which it did during the past decade.

    The more China sold to the United States, the more dollars it accumulated, and thus the more US Treasuries it bought, driving our interest rates down. US consumers responded to these cheap goods and cheap home loans by going on a buying binge.

  16. Mr.E. says:

    Kinsley: Inflation vs. Hyperinflation By Michael Kinsley
    http://www.theatlanticwire.com/opinions/view/opinion/Kinsley:+Inflation+vs.+Hyperinflation-2935

    This was Kinsely’s reaction to Krugman’s analysis of an article written by Kinsley )m in which he notes his concern about the possibility of hyperinflation in our near future (it’s a he said, he said debate). In his original article that provoked Krugman, Kinsley states, “I worry that when and if the recession is well and truly over, there is a serious danger of another round of vicious inflation. (If the recession is not over, or gets worse, we’ll have other problems.) This time, inflation will be a lot harder to stop before it turns into hyperinflation”

    Kinsley’s original is here …
    http://www.theatlantic.com/magazine/archive/2010/03/my-inflation-nightmare/7995/

    Krugman’s dissection of Kinsley’s concerns is here …
    http://krugman.blogs.nytimes.com/2010/03/18/stagflation-versus-hyperinflation/

  17. johnborchers says:

    Submitted by Chindit13 – From ZeroHedge

    Market Update 23 March 2015

    The DOW rebounded from a crushing six point opening sell off to close the day at 21,626, up 43 points for the day. The rebound came after there were reports, later denied, that European officials are working on a bailout for EU member Greece. Greece has been in a state of near suspended animation since debt woes struck the country in early 2010, though strikes have been averted through the daily airing on government controlled television of an Anthony Quinn film extravaganza.

    It was the DOW’s 722nd consecutive positive close, as well as the 217th straight positive Monday close. The strongest sectors were, as has been the case for the last half decade, consumer retail, banks, homebuilders, and specialty coffee companies. Key movers were Sears Holdings, whose stocked jumped after reports surfaced that billionaire Ed Lampert was increasing his stake in the retailer to just above 100%, and KBHomes, who reported their 63rd consecutive smaller than expected quarterly loss. Overall volume was somewhat light at just under five thousand shares. There were 4,658 new highs, no new lows, with 2852 counters unchanged. 3788 companies showed no volume whatsoever, which independent market commentator Dennis Kneale was quick to point out “indicates the shares are held by strong hands“.

    The market also received a small boost from influential market startegist Abby Joseph Cohen of Goldman Sachs-Wells Fargo-Bank of America Advisors, who said that she believes the market is 13.5% undervalued.

    Offsetting this somewhat were comments by perennial bear Robert Prechter, who advised clients to go 10,350% short in preparation for the arrival of P3. Mr. Prechter was interviewed by Bloomberg Fox Business News reporter Charles Gasparino from Prechter’s suite at the Bellevue Institute for the Perpetually Pessimistic. The two later dined together at Elaines.

    In economic data, the market was buoyed by a better than expected 100% increase in sales of existing homes, though some market watchers argued the data was only cause for cautious optimism rather than outright euphoria, coming as it did after last month’s nationwide sales of that single home in the suddenly chic downtown area of Detroit. The market awaits Friday’s release of the BLS monthly employment figures, where market consensus calls for a better than expected number. Last month’s figures are expected to be revised down, as they have been every single month since the fall of 2009, though economist Robert Barbera donwplayed this anticipated revision, reminding the market that labor is a lagging indicator and that unemployment of 36% means that 64% of the labor force is gainfully employed. Mr. Barbera’s models show labor bottoming within the next few months.

    Elsewhere, the Federal Reserve released its latest balance sheet today, showing that total assets stand just below $47 trillion. Among the key month-to-month changes, the Fed increased its holdings of Hong Kong mortgaged backed securities, and slightly reduced its holding of Icelandic Government debt. Other key items highlighted included a slight increase in the holdings of Maiden Lane LXVII, the vehicle formed to support Kenyan real estate prices after Somali pirates, stung by the total collapse of world trade, could no longer make payments on their Mombasa properties.

    In other markets, gold fell $8 to close at $1097. Gold has been in a tight range of approximately $1090 to $1135 for five years. Two noted gold experts, Jim Sinclair and Gordon Gekko, reiterated their call to BUY GOLD NOW!

    In a related market story, former Zero Hedge founder Tyler Durden lost yet another appeal against the contempt of court charge that has kept him confined in a Federal lockup since late 2010. Mr. Durden, who reportedly suffers from a multiple personality disorder, was charged with contempt for failing to reveal his source for an article he wrote detailing the Federal Reserves acceptance of Pets.com stock and Russian Czarist Bonds as collateral at the Fed’s Primary Dealer Credit Facility. Fed Chairmen in Perpetuity Ben Bernanke has yet to comment on the allegations, other than to say he’ll look into it. Representative Ron Paul added that he will hold Bernanke to it

  18. Jim Fickett says:

    For those of us trying to put good investing information out on the web, ING Direct’s study of investor information sources (http://www.docstoc.com/docs/document-preview.aspx?doc_id=30719715&key=ODhjYTc5N2It&pass=Yzc2Ny00Y2Fj) was interesting. A little less than half of investors surveyed use “Financial web sites and blogs” as sources of investment advice.

    Jim Fickett
    ClearOnMoney.com

  19. Just a hunch but I think Google has an FBI raid somewhere in its future

  20. Guambat says:

    I’m reading from FT Alphaville that Charlie Gasparino is palling around with David Einhorn? Strange bedfellows at Fox?
    http://ftalphaville.ft.com/blog/2010/03/23/184546/einhorn-v-lehman-congressional-hearings-edition/#comments

  21. Jojo says:

    @johnborchers – That was a great post from ZH! Do you have a direct link?