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

Source:
Bernanke’s Off the Hook: Emerging Markets Are Really to Blame for Rising Food Prices, Says Bremmer
Stacy Curtin
Yahoo Tech Ticker Feb 14, 2011 03:06pm EST

http://finance.yahoo.com/tech-ticker/bernanke%27s-off-the-hook-emerging-markets-are-really-to-blame-for-rising-food-prices-says-bremmer-535927.html

• Great Inflation Debate: Big Week for Inflationistas (Marketbeat)

• Bubblemania: Is It Time to be Skeptical of the Skeptics? (Observer)

• The History of Too Big To Fail (Focus)

• Bernanke two-fer:
-Fed dictator Bernanke needs to be toppled (Marketwatch)
-The FOMC is Right to Stay the Course on QE2 (Jeff Frankels Weblog)

• Moody’s CMBS delinquency tracker tops 9% for first time (Housing Wire)

• The sabotaging of Iran (FT.com)

• “Crazy Eddie” Fraudster to return to crime, thanks to Anti-Regulators (DAGblog)

• The Untold Story of How My Dad Helped Invent the First Mac (Fast Co Design)

• Conan 2.0 (Fortune)

Interactive graphic from the NYT showing how the 2012 is allocated:

>

click for interactive graphic

>

The Bloomberg chart above compares year-to-year percentage changes in labor costs and consumer prices – from 1950 to present,  for the past six decades (data source:  Labor Department).

These indicators had a high correlation — 0.82 during the period — according to Brian Belski, chief investment strategist for Oppenheimer & Co.  Labor costs have fallen for the past eight quarters, and are essentially flat over the past decade. Declining wages means consumers have less cash to fuel spending. Companies will have a limited ability to raise prices, and will likely see their margins pressured, Belski has argued.

Hence, even rising bond yields are unlikely to reflect a worsening inflation outlook. Since  October 7th 2010, the yield on the Treasury’s 10-year note climbed 1.25 percentage points from its low.

>

Source:
‘Several Years’ of Tame U.S. Inflation Lie Ahead: Chart of Day
David Wilson
Bloomberg, February 14, 2011

Melena Ryzik gets a rare behind-the-scenes look at the Pixar Studios complex in California.

Source:
Animation Advocacy, Pixar Style
MELENA RYZIK
NYT, February 9, 2011

http://www.nytimes.com/2011/02/10/movies/awardsseason/10bagger.html

>

What a stock market!  Just 29 days (11.5 percent of the year) of trading into the year and the S&P500 is already up 5.94 percent,  outperforming the Presidential Stock Cycle chart analog by 150 bps.  This market is not allowing anyone to get in and those who take profits end up buying back their stock 2 percent higher.

If you’re a buyer of this chart analog, the S&P500 is due for a rest and some sideways consolidation over the next month before making its next 6-7 percent move into May.   That is, unless, of course, the S&P500 and other developed country stock markets, along with certain commodities,  have become a global inflation hedge.   Stay tuned!

The NAHB home builder sentiment survey was unch at 16, in line with expectations and flat for a 4th straight month. Present conditions rose by 2 pts to 17, the best since June. The Future outlook rose 1 pt. Prospective Buyers Traffic was unch at 12. Expressing how depressed the industry remains, 50 is the breakeven between expansion and contraction. According to the NAHB head, “while builders are starting to see more interest among potential home buyers, we are dealing with a multitude of challenges, including competition from foreclosure properties and inaccurate appraisals of new homes, which are limiting our ability to sell…On top of that, an extremely tight lending environment continues to make it almost impossible to obtain credit for viable new and existing projects, and most do not see that situation improving anytime soon.” While things are really not much better for builders, its hard to imagine they can get much worse.

The Feb NY Fed survey (the 1st Feb industrial figure out) was about in line with expectations at 15.4 vs 11.9 in Jan to the best since June but also reflected continued inflation pressures and mixed components. New Orders fell a touch. Backlogs rose but remained negative. The Employment component fell by 5 pts but the average workweek rose to a 5 month high. Inventories rose 5 pts to the highest since April. Prices Paid rose 10 pts to 45.8, the highest since Aug ’08 while Prices Received rose 1 pt to 16.9, the most since Oct ’08, thus “suggesting some pressure on profit margins” said the NY Federal Reserve Bank. The 6 month outlook fell by 10 pts to 49.4 but from a very elevated level in Jan. The outlook for both Prices Paid and Received over the next 6 months fell and central bankers around the world are hoping for the same thing.

Retail Sales were below expectations headline, ex auto’s and ex auto’s/gasoline and Dec was revised lower. Sales ex auto’s and gasoline specifically rose .2% vs the forecast of up .4% and Dec was revised to a gain of .1% vs the initial reading of up .4%. The core rate which takes out building materials in addition to auto’s and gasoline, was up .4% after a decline of .1% in Dec (revised from up .2%). Sales rose in electronics, after 3 months of declines, food/beverages, health/personal care, department stores and for online retailers. Sales fell at restaurant/bars, clothing, sporting goods, building materials and furniture. This data doesn’t take into account inflation where many things we buy are imported and Jan import prices rose 5.3% y/o/y vs estimates of 4.4%. Of course though what we bought in Jan was imported well before but points to the future influence inflation will have. Import prices from China rose .3% for a 4th straight month.

This week Max Keiser and co-host Stacy Herbert talk about the Shoe Throwing Index, Saudi oil reserves and haircuts on investors. In the second half of the show, Max talks to investment adviser Barry Ritholtz about program trading and agnotology.

I roll in around the 14 minute mark

~~~

SENIOR SOFTWARE ENGINEER / ARCHITECT

Skills Required
Java/J2EE, MySQL, PHP, Servlets, Apache, JSP, Linux, Financial Algorithms

What you NEED for this position:

- 7+ years industry professional experience,
- 5+ years of recent engineering experience in building J2EE applications with front end components.
- 5+ years of recent engineering experience in LAMP stack – Linux, Apache, MySQL, PHP
- Experience with MySQL databases through JDBC
- Experience working deploying applications to J2EE application servers
- Good programming concept knowledge: algorithms, data structures, network protocols
- Enterprise front end development experience (JSP, HTML, CSS, JavaScript, AJAX)
- Experience with Linux operating system
- Experience with SVN source control

Candidates with financial experience and knowledge are preferred.

The ideal candidate will have good technical leadership and design skills,
experience with remote teams, and full project life cycles.

Our flagship product FusionIQ can be seen here: http://www.fusioniqrank.com/

The position of Senior Software Engineer will be responsible for maintaining the
core web application while designing new products. You will work with our analysts
to develop backtesting algorithms and commercial data feeds in custom formats.
Experience working with financial data sources (Bloomberg,Reuters,Morningstar) is highly desirable.

SEND RESUMES AND COVER LETTERS TO INFO -at- FUSIONINVEST dot COM

“This is the first I have heard about it. It’s not a very good report.”

-Joseph E. Stiglitz, Nobel-winning economist

>

Dealbook:

“A new study backed by pro-business groups takes a harsh stance on rules intended to bring transparency to the $600 billion derivatives market. The report, published on Monday, claims that proposed regulation could cost 130,000 jobs and could cut corporate spending by $6.7 billion.

The findings are clearly meant to scare politicians and drum up public support — just as financial regulators are set to testify on the issue before a Congressional committee on Tuesday. And at first blush, the study would seem to be good ammunition for the Chamber of Commerce and its other supporters.

The study was conducted by Keybridge Research, a seemingly independent economics and public policy consulting firm. The firm’s bona fides include an all-star roster of academics, including Joseph E. Stiglitz, a Nobel laureate in economic science; David Laibson, a professor of economics at Harvard, and Stephen P. Zeldes, a professor of economics and finance at Columbia’s Graduate School of Business.

But a closer look at the report raises some serious questions. For one, the findings seem oddly out of step with the views of some of the group’s luminaries, including Mr. Stiglitz, who is advertised on Keybridge’s site as an adviser . . . [But] it appears that Mr. Stiglitz and many of the firm’s advisers are not advisers at all.”

I’ll say what Sorkin cannot:  Those with a financial stake in maintaining the status quo about Derivatives are engaging in a phony lobbying campaign to protect their highly lucrative fiefdoms. This includes imitating judges in their astroturfed letter writing campaigns, and now claiming affiliations with well regarded economists and Nobel Laurelates where none exists.

Like the Astroturfing letters, these reports are bought and paid for by people whose sense of ethics, is, shall we say, “challenged.” There are so many billions of dollars at stake that ethics, even lawfulness, is routinely ignored.

What other illegal activities will these people engage in to protect their economy risking practices of highly leveraged derivative speculation and underwriting?

>

Previously:
Who Was Astroturfing Forged Letters Against FinReg? (February 12th, 2011)

Source:
Vanishing Act: ‘Advisers’ Seek Distance From a Report
ANDREW ROSS SORKIN
NYT, FEBRUARY 14, 2011
http://dealbook.nytimes.com/2011/02/14/vanishing-act-advisers-seek-distance-from-a-report/