4 Recessions (and Recoveries)

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By Barry Ritholtz - September 25th, 2010, 7:25AM

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Floyd Norris takes a closer look at the current post-recession recovery, compared to prior recoveries. The overall trend appears to be slower snapbacks (1990-91 and 2001), jobless recoveries (2001, 08-09).

The chart above shows the economic data where this recovery is typical and very atypical.

In some areas, the data is typical of 1990-91 and 2001 recessions, but worse than the 81-82 recovery: Service employment, Private sector hiring, hours worked. Manufacturing Jobs are better than 2001, and 1991, worse than ’82. Industrial production is better than 91/01, and almost as good as 82.

Where this recovery is much much worse than typical: Unemployment rates, Long Term unemployed, Construction employment, housing starts, financial service employment (duh), state and local government hiring.

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Source:
Recessions and Recoveries Are Not All the Same
FLOYD NORRIS
NYT, September 24, 2010
http://www.nytimes.com/2010/09/25/business/economy/25charts.html

Hedge Fund Titan David Tepper

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By Barry Ritholtz - September 25th, 2010, 5:00AM

Why making the call to buy financials in 2009 was easy and other market insights, with David Tepper, president & founder of Appaloosa Management.


Airtime: Fri. Sept. 24 2010 | 0:00 DT ET

Friday Nite Jazz Rock: 5 Best Unknown/Unheard Albums

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By Barry Ritholtz - September 24th, 2010, 6:30PM

Two months ago, I asked a simple question:  What are the 5 best unknown, unheard Rock albums ?

The question generated 100s of comments overnight; anyone looking to discover some great new music is advised to sift thru the laundry list of suggestions.

As promised, I am going to share my list this evening. Before my reveal, a quick note about those qualifiers: In order to make this exercise have some resonance, we had to limit the musical universe:

-Rock/Pop was the standard idiom. Jazz, Classical, World, Folk Hip Hop and Electronica are so diverse and have so many back waters and eddies, huge swaths of it seem unknown (I say that as a serious Jazz fan).

-Modern era (1985 to 2010) We could have gone further back in time, but that ran the risk of simply being unknown due to age, versus true obscurity. (We saw examples of that in comments).

-I kept it to 5 for simple reasons of focus (and crowd control).

There are lots great bands that have relatively unheard great albums, but have a major hit single. These are usually so well known that they didn’t qualify. Examples include the Fountains of Wayne album Welcome Interstate Managers — “Stacy’s Mom” was a huge hit, but the rest of the album was overlooked; so to with Dada‘s debut disc Puzzle — they had a giant single in “Dizz Knee Land,” the rest of the album was just as strong, but overlooked. I had a hard time omitting a few Reggae discs, like One Tree or Yell Fire!. Jazz albums that could qualify as Pop are fine — think Jamie Cullum‘s breakout album Twentysomething, but it was too popular to not qualify.

Indeed, figuring out was too popular or too unknown was the biggest challenge. Few people ever heard of my first choice, but the last disc on the list is very well known — it just sold poorly and was heard even less.

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Roman CandleSays Pop (2002)

In 2005, I wrote: Roman Candle’s debut is a joyful assortment of finely crafted pop tunes. If FM Radio didn’t suck, this is the sort of music you would be hearing on it right now. Finely crafted lyrics mated to delightful melodies delivered by a tight power pop five-some in a surprisingly slick production.

Like nearly all the discs on this list, this one is really good from start to finish.

Why didn’t you ever hear of these guys? Roman Candle hails from Chapel Hill, North Carolina, and signed with an independent label. No payola, no Clearchannel — and no radio play.

Note: This was released under a new label as “The Wee Hours Review” but its mostly the same disc.

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The Push Stars After the Party

How to describe the well crafted, heartfelt songs on this album? Start with infectious melodies, slide reflective lyrics over that, mix in a little effervescent joy. The tunes range from melancholy ballads to joyous rock to pop perfection.

The band has 3 outstanding albums, but After the Party is my absolute favorite. I cannot figure out why the song “Drunk Is Better Than Dead” was not a huge radio smash (but as noted earlier, radio sucks).

The other two favorites are meet me at the fair and Opening Time.

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PreFab Sprout Two Wheels Good

This is a spectacular album, released as Steve McQueen in the UK, where it is well known. In the US, this Thomas Dolby-produced album is mostly unknown, hardly heard. And that is a shame, as it is a tour de force of song writing chops, clever lyrics, and brilliant music.

I don’t even know where to begin describing this. Paddy McAloon’s songwriting has been compared to Brian Wilson, and justly so. Each heart rending song of love and loss is harrowing, gorgeous, lovely. The lyrics are sly, full of wry irony. They grab you, and refuse to let go.

On the song Appetite:

Here she is with two small problems
And the best part of the blame
Wishing she could call him heartache
But it’s not a boy’s name

On Horsin’ Around, a song about unfaithfulness:

It’s me again; Your worthless friend (or foe)
I somehow let that lovely creature down
Horsin’ around, horsin’ around
Some things we check and double check (and lose)
I guess I let that little vow get lost
Forgettin’ the cost, forgettin’ the cost

On the song He’ll Have To Go, these lyrics always stood out:

Put your sweet lips a little closer to the phone
Let’s pretend that we’re together all alone
I’ll tell the man to turn the jukebox way down low
And you can tell your friend there with you
He’ll have to go (go, go go)

Every song is a brilliant combination of musical arrangement, melody, and lyrical genius. I cannot listen to this disc without thinking about loves lost in college, grad school and beyond.

Note: Faron, The opening song, is atypical of the rest of the disc. I always start with the 2nd song, Bonnie, and play it straight through, ending with Faron.

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The Philosopher Kings The Philosopher Kings

The Philosopher Kings mix soulful tunes with rock, jazz and R&B. Gerald Eaton’s distinctive vocals fit the original lyrics/Some people have called this disc urban jazz, I prefer to think of  as an amalgam of pop, rock, soul, fink, layered with jazz instrumentation. Call it smoky vocal jazz with a rock sensibility.

Its wildly original, and every song on the album packs a punch.

The album earned the group a Juno Award nomination for Best R&B/Soul Recording of the Year.

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Freedy Johnston This Perfect World: Johnston’s gravelly soprano voice is perfectly suited to his bittersweet lyrics of heartbreak and loneliness. The music belies the lyrical angst, with bouncy chords and jangling guitars serving as the backdrop for exquisite melodies.

Johnston is known for the craftsmanship of his songs, and has been described as a “songwriter’s songwriter; In 1994, Rolling Stone named him “songwriter of the year”. A reviewer “Marries perfectly realized power-pop sensibility to skilled, literary writing chops” — and I see nothing to disagree with there.

This Album never broke into the Billboard charts, and the song Bad Reputation was a minor hit. Why this wasn’t a monster is beyond me: Every song is a perfectly crafted, radio friendly, little story.

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The Magic Numbers The Magic Numbers

I thought the band’s debut disc, The Magic Numbers, was the best new rock and roll release of 2005. I was astonished to learn the CD sold a mere 44,000 copies in the US. That’s astonishing to me, considering what a great CD it is.

The band is an amalgam of all sorts of oddities, but
the entire assemblage works surprisingly well. Two pairs of brother/sister teams (from Trinidad/New York/London), best described as “an unfashionable blend of soft country pop with Fifties and Sixties inflections.”

What I liked about it was the strong mix of rock and roll, summery guitars, laid over skiffle and country pop structures. It is spare and at the same time complex, flavored with an inflection of a1960s guitar band. Somehow, it all sounds very modern, via classic rock instruments — simply guitar bass drums — no synth. The songs are jangly, melodic and hook laden; the writing is outstanding. Lyrics and vocals reveal a tender vulnerability. I found the album very addictive — with each listen, you want to hear more . . .

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OK, so my top 5 slipped to 6 –  but I couldn’t leave out the last disc.

Runners Up after the jump . . .

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Succinct summation of week’s events

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By Peter Boockvar - September 24th, 2010, 4:15PM

Succinct summation of week’s events:

Positives

1) Durable goods core cap ex better than expected
2) Multi family starts highest since Mar ’09, single family permits drop (we need less new ones right now)
3) German IFO highest since June ’07
4 ) Asset prices love a Fed that only knows cheap money and more of it as path to prosperity
5) Commodity prices continue higher, good global growth?
6) Stocks of South Korea, Thailand, Indonesia, India, Singapore and Philippines rise to multi year, and for Jakarta an all time high.

Negatives

1) B52 Ben cleared for another takeoff, US$ index near 9 month low, commodity prices higher, gold at record high, inflation expectations rise, this can’t end well
2) Jobless Claims stay weak
3) NAHB holds at 18 mo low
4) New Home Sales a hair above 47 yr low and prices near 7 yr low
5) Single family permits drop, more drag for construction
6) Refi’s at 6 week low, purchases at 3 week low.
7) PIG debt concerns continue to grow
8) ABC confidence falls to 6 week low

New Lotus Elite

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By Barry Ritholtz - September 24th, 2010, 2:59PM

Nice!

The rear-wheel-drive 2+2 prototype has a 5.0-litre front-mid-mounted V8 engine delivering 611bhp and 720Nm of torque, which should enable the 1650kg car to accelerate to 62mph in something between 3.5 and 3.7 seconds.

via Classic Driver

Property Taxes in America

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By Barry Ritholtz - September 24th, 2010, 2:46PM

Median household property tax by Credit Loan.

The median reflects the mix of houses, local school districts, government spending, expenses, etc. So the average for NYS at $3600 reflects inexpensive homes with modest taxes, and a smaller percentage of expensive hoems with taxes 5X and 10X the median.

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click for ginormous chart

Effect of Structural Deficits on USA National Debt

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By Barry Ritholtz - September 24th, 2010, 12:36PM

Terrific charts via Freddy Hutter of Trendlines Research, showing long term structural deficits.

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Effect of Structural Deficits on USA National Debt

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Thanks, Freddy!

Colbert Testifies to Congress

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By Barry Ritholtz - September 24th, 2010, 12:18PM

Visit msnbc.com for breaking news, world news, and news about the economy

What the SEC Staff Will Likely Recommend in Reaction to the May 6th Flash Crash

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By Guest Author - September 24th, 2010, 12:10PM

Joseph Saluzzi (jsaluzzi-at-ThemisTrading.com) and Sal L. Arnuk (sarnuk-at-ThemisTrading.com) are co-heads of the equity trading desk at Themis Trading LLC (www.themistrading.com), an independent, no conflict agency brokerage firm specializing in trading listed and OTC equities for institutions. Prior to founding Themis, Sal and Joe worked for more than 10 years at Instinet Corporation, pioneers in the field of electronic trading, and at Morgan Stanley.

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What the SEC Staff Will Likely Recommend in Reaction to the May 6th Flash Crash

A Themis Trading LLC White Paper
By Sal Arnuk and Joseph Saluzzi

Introduction

The SEC staff is likely to issue recommendations shortly for preventing another May 6th Flash Crash. Certainly, the staff has taken on a daunting task, with no shortage of critics questioning every move, but it should be congratulated for a diligent undertaking. That being said, we anticipate that the recommendations may be more on the order of temporary Band-Aids, although we still hold out hope for a pleasant surprise. While implementation of some technical fixes may decrease the likelihood of another May 6th, they will not address the root problems that have been exposed in our “Frankenmarkets.” Those recommendations are likely to come later.

Ultimately, the investing public – and by that we mean traditional institutional and retail investors, managing pension, 401K and IRA money – will decide whether the committee has done enough to restore confidence. The Flash Crash erased $862 billion in equity value in 20 minutes. Since then through August, investors have withdrawn nearly $57 billion from U.S. stock mutual funds, the most during any four-month period since 2008, according to the Investment Company Institute. Third quarter average daily trading volumes are down more than 25% from the second quarter and down more than 15% year over year. Investors are as risk-averse today as at any point in the past 10 years, with the exception of the height of the financial system meltdown, according to the State Street investor confidence index.

The question is: How long can Wall Street sustain this situation?

Likely SEC Staff Recommendations

Based on the preliminary findings of the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues, existing SEC proposals and comments from market participants, we believe the SEC staff will make four major recommendations:

1. Alter the existing single stock circuit breaker to include a limit up/down feature. The SEC has implemented a single stock circuit breaker (SSCB) pilot program which halts any stock currently in the program for five minutes if the price moves 10% or more in the preceding five minute period. We commented to the SEC that the current program was triggering unnecessary halts. To improve the SSCB, we recommended that before a halt is issued, a minimum number of trades at the threshold level should have to occur. We also recommended that the National Best Bid and Offer (NBBO) should be checked before the halt is issued. Other commenters have recommended that the SEC revise the halt process to a limit up/down feature similar to what is used in the futures market. We believe the SEC will alter the existing SSCB to include a limit up/down feature, as well as some form of price check and minimum number of trades, to prevent false triggers.

2. Eliminate stop-loss market orders. Many investors that lost money on May 6th did so because they thought they were protecting themselves with stop-loss market orders. As the market melted down, these orders were activated and chased prices down a vicious spiral. These orders were not the cause of the Flash Crash per se, but they resulted in enormous damage to many unsuspecting traditional investors. The SEC has indicated that it may require market order “collars,” effectively converting market orders into limit orders.

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Redesigning the American Dollar

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By Barry Ritholtz - September 24th, 2010, 11:30AM

I’ve previously mentioned the Dollar Redesign project from Richard Smith.

Every now and again, a new design catches my eye. Dowling Duncan is the latest artist to tickle my numismatology fancy:

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