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

According to Dictionary.com, the definition of a speculative bubble is “a temporary market condition created through excessive buying and an unfounded run up in prices occurs.” If there is one asset that commonly gets described as being in a bubble, its gold but let’s look at its move over the past 10 yrs in perspective compared to other “bubble’s.” Gold at $1400 is up 450% from the Aug ’99 low. From 1982 to 2000, the NASDAQ rose 3000% and the DJIA rose 1400%. From 1978 to 1989, the Nikkei rose 700%. From July ’98 to the high in July ’08, crude oil rose 1245%. From its low in Nov ’01, copper has risen 605%. I’m not calling a bubble in Apple but its up by 4850% since 2003 for the obvious reasons. Thus, just because an asset is higher and has done well for years doesn’t mean its a bubble, YET, and this gold rally which I’ve been bullish on for many years, still has room to run.

Even more holiday chart porn, via Daily Infographic:

>

click for ginormous infographic:

>

The chart above, courtesy of Bianco Research, gives you a sense of how much enthusiasm there has been for Bonds, at the tail end of a 30 year bull run in fixed income, following the 2008 credit crisis and market collapse.

Note that even after the equity market began to rally, it was still sold off by the public.

The excuses given for rampant, systemic, illegal foreclosure activity by banks is the overwhelming volume the local offices have to deal with.

In housing disaster regions like South Florida or Vegas, that nonsense excuse at least has a basis in fact. The reality is the mass volume of foreclosures act to reveal the flaws in the banks processing systems. If they engage in small illegalities in New Hampshire, for instance, its doubtful anyone would notice.

Hence, the assembly line perjury the banks have committed are harder to hide in mass foreclosure venues. Which is what makes this touching Christmas Eve story all the more peculiar:

“In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment.

The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.

Why? Because another unit of Bank of America erroneously reported to credit agencies that the family was seeking a loan modification, ruining their credit rating and as the result putting their mortgage into default.

All this is happening even though the bank – after admitting it erred and sent a letter of apology in September – handed this case to a special unit at Bank of America that is charged with dealing with severe customer issues. It promised to notify the credit reporting agencies that the couple were not deadbeats, but were good credit risks”

Post bailout, the giant banks have become too large to manage themselves. It is not just housing sh%$ holes like South Florida where the banks are paperwork disasters, but apparently states such as Connecticut, also.

How else can BoA threaten foreclosure proceeding with on a house that never missed a mortgage payment; indeed, the owners were NEVER late on any mortgage payments! There was never a risk of default, or delinquency. And yet, BoA is automatically generating foreclosure notices (which no one at BOA can figure out how or why).

The obvious answer is the illegal processing of foreclosures. When lawyers, bank executives and there outside contractors are paid to violate the law, the local State Attorney General needs to prosecute these felons. Where Lawyers perjure themselves, swearing they have verified, reviewed and confirmed foreclosure files they never so much have looked at, they need to be disbarred.

Its called the rule of law, and its long past time we actually enforced it.

>

Source:
Bank Of America’s Christmas present: Foreclose Even Though Not A Payment Missed
George Gombossy
CT watchdog, Dec 24, 2010
http://ctwatchdog.com/2010/12/24/bank-of-americas-christmas-present-foreclose-even-though-not-a-payment-missed

On the heels of the sharp US Treasury selloff yesterday and with London back open, yields in Europe are heading higher again. In particular, Italy’s 10 yr yield is rising to the highest since Jan ’09, Greece is just shy of a new record high and French yields are just below the highest since April. Also, Australia’s 10 yr yield is rising to the highest since May. Philippines did not raise rates as expected but Taiwan is expected to raise their benchmark rate tomorrow. Indonesia raised the reserve requirement of the FX holdings of its banks. The Shanghai and Hang Seng indices bounced back from their rate hike selloff and that set a positive tone for the rest of the region which then spilled over into Europe. ABC weekly confidence fell 3 pts to -44 from last week’s 6 month high. II: Bulls 55.6 v 58.8 (off highest since Oct ’07), Bears 20 v 20.6.

David Leonhardt has a short column in today’s NYT that is noteworthy for it excellent chart porn:

>
click for ginormous version:

>

click for larger versions

>

Source:
In the Rearview, a Year That Fizzled
DAVID LEONHARDT
NYT, December 28, 2010  
http://www.nytimes.com/2010/12/29/business/economy/29leonhardt.html

How to be ahead of 2011′s biggest investment fads, with Josh Brown, Fusion Analytics.

If you are doing some post X-mas shopping for yourself, the first 6 seasons of Entourage are on sale at Amazon for $10 per set.

Season 7 (which finished on HBO earlier this year) will be out in 2011. I assume after the last season 8 (late 2011) will lead to a complete box set.

• Entourage: The Complete First Season (2004)

• Entourage: The Complete Second Season (2004)

• Season Three:
-Entourage: Season Three, Part 1 (2004)
-Entourage: Season Three, Part 2 (2004)

• Entourage: The Complete Fourth Season (2007)

• Entourage: The Complete Fifth Season (2009)

• Entourage: The Complete Sixth Season (2010)

~~~

UPDATE: December 29th 2010, 3:45pm

I was in Target picking up a few items — they have the full run of Entourage seasons for $10 each as well . . .

One of my favorite US media outlets is the Christian Science Monitor. They have four guiding principles which many other media players seem to have forgotten:

Be unrelenting but fair.
Be excited by what’s new and developing – yet always mindful of history.
Be broad in scope but written for the individual.
Make a point of resisting the sensational in favor of the meaningful.

With that in mind, have a look at CSM’s top five overlooked stories of 2010:

1. Stuxnet
2. TARP is cheaper than expected
3. Common school standards
4. Rise of natural gas
5. Twilight of the desktop

Fascinating stuff . . .

>

Source:
Top 5 overlooked stories of 2010
Mark Clayton
Christian Science Monitor, December 2010
http://www.csmonitor.com/USA/2010/1224/Top-5-overlooked-stories-of-2010/

Another year in the books and I’ve updated my Investing Fads and Themes guide accordingly.  It begins with 1996 because that was my first summer working on The Street and my earliest exposure to the market.

So what was 2010 about?

Well, it was basically about the mobile web and the tablets and smartphones we use to access it.  Everything became an app and everyone’s phone got real smart.  Devices were the must-have item from Apple’s summer iPad launch straight through through Christmas.  We’re even hearing that Amazon may have sold 8 million Kindles this year, way above the 5 million estimate.

We also went berserk for metals and mining stocks this year.  Silver stocks as an industry group are up 88% year-to-date, an astounding performance both on an absolute basis and versus the 14% or so that the S&P 500 will probably finish with.

Lastly. we’d be remiss not to point out that one of the hottest (and faddiest) investing themes this year was venture capital.  Everyone, it seems, was an angel or an expert in venture finance.  As of this writing, Facebook is being valued at $65 billion – and coming public could actually be detrimental to that valuation!

Anyway, here is my updated guide to the Investing Fads and Themes by Year, 1996 – 2010.  Enjoy!

ot

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.