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

From the annals of wrong comes this article, published 6 years ago today (2005): The Housing Bears Are Wrong Again.

Here is a quick excerpt:

“Homebuilders led the stock parade this week with a fantastic 11 percent gain. This is a group that hedge funds and bubbleheads love to hate. All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market.

None of this has happened. The Federal Reserve has effectively mopped up excess cash and calmed inflation expectations. That’s why bond rates are hovering around 4 percent, with most mortgage rates about a point higher . . .”  (emphasis added)

This is a fascinating study of how hard people fight to retain their preconceived belief system, their notions of what they already know – and what challenges that information.

Some of this may be the result of ideological bias, but I suspect most of this is a case of the Sunk Cost dilemma. When you have spent so much time and energy and money –indeed, your entire professional career — acquiring information and a supporting belief system, it is rather challenging to reverse course from that.

Hence, the difficulty in getting someone to recognize events that are outside oft heir experience. Consider this paragraph:

Meanwhile, the homebuilders index has increased 76 percent over the past year, with particularly well-run companies like Toll Brothers up about twice as much. The bubbleheads missed all this because they haven’t done their homework. If they had put a little elbow grease into their analysis, they would have learned that new-housing starts for private homes and apartments haven’t changed much during the past three and a half decades.

If you looked at home-building relative to Income, or to Household Formations, or to GDP, by 2005 it had was already 2 standard deviations away from the historical mean. It is very challenging to convince people what the norm is int he midst of bubble. And in 2005, we were in the middle of the world’s biggest credit bubble.

What fascinates me is how reasonable the arguments against the bubble sound. Read the whole article without the benefit of knowing how it all crumbled, and you will find it is surprisingly persuasive — just as the housing boom reached its peak.

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Source:
The Housing Bears Are Wrong Again
This tax-advantaged sector is writing how-to guide on wealth creation.
Larry Kudlow
National Review, June 20, 2005
http://article.nationalreview.com/276028/the-housing-bears-are-wrong-again/larry-kudlow

Dan Alpert is a founding Managing Partner of Westwood Capital, LLC and its affiliates. He has more than 30 years of international merchant banking and investment banking experience, including a wide variety of work-out and bankruptcy related restructuring experience.

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Back in the fall of last year, we commented to many that the so-called “foreclosure-gate,” or “document-gate” (remember, the Schwarzeneggerian term “robo-signers”) was going to prove to be a double edged sword for the large banks.

On the one hand, lying to judges and facing the possible voiding of mortgage collateral documents and the ability to foreclose is decidedly bad for business. On the other hand, we pointed out that there would likely be sighs of relief (we were once, injudiciously, quoted as referring to the popping of champagne corks) at the notion that the recognition of losses connected with the bubble of pending home repossessions, that was then coming towards the end of the foreclosure snake, could again be delayed.

Over the past week, two intrepid investigative business reporters, at The Financial Times and The New York Times, respectively, have published stories that shed new light on this issue, in a manner that furthers our concerns about the banking sector. More about the articles below (don’t miss this, keep reading).

In our view, the magnitude of pending foreclosures, together with housing prices that continued to decline through March, could potentially result in losses to banks that materially exceed existing provisions for such losses. Moreover, if the backlog of foreclosures were to move through repossession and liquidation, the impact on the housing market would unquestionably be to accelerate the pace of falling prices (at least in many regions of the country).

Not surprisingly, in this environment, lender recoveries of loan principal through the liquidation of foreclosed mortgage collateral has been dismal – averaging between 35% and 40% of loan face amount (taking into consideration both selling price and all costs related to the foreclosure and liquidation) for years now and showing no signs of improving.

With home prices, per the S&P Case Shiller 20-City Index, having fallen 6.2% from the end of Q3 2010 through the end of Q1 2011, and now more than 33% below peak levels in July of 2006, the largest banks in the U.S. are therefore loath to repossess and liquidate defaulted home loan collateral.

Yet, apparently driven by a now-questionable view (possible, but by no means a certainty) that the American economy is positioned for a sustainable recovery, banks have been releasing provisions for losses on loans held in portfolio. This has had a positive effect on bank earnings for several quarters. Although, with many banks trading below book value, the market seems not to believe either the sustainability of recent earnings or the recoverability of bank loan assets.

So the banks owning large residential loan portfolios have slowed the foreclosure process to a trickle and, at the same time, have been unwilling to restructure home mortgage loans in a manner that would lead to large scale principal reductions. According to various studies, the best path to the maximization of defaulted mortgage recoveries runs through actions that keep people in their homes and paying instead of walking away.

And with regard to underwater borrowers (nearly a third of all mortgagors now) the best way to keep people paying is to renegotiate the original principal. Recoveries on that basis promise numbers closer to 70% of face, than to liquidations yielding half that ratio.

The banks do have one further concern that is not entirely illegitimate. The see moral hazard in the notion that aggressive principal modifications would trigger more widespread default, as borrowers who might otherwise pay will, literally in some cases, covet their neighbors principal reduction and default themselves in order to obtain the same treatment. But we do not see the advantages of a stand-off over liquidations or modifications in a stable or declining price environment, in the absence of sustainable macroeconomic improvement. We also note that it is somewhat painful to listen to moral hazard arguments from lenders who have recently been the beneficiaries of assistance themselves.

So that’s why we feel it important to highlight two pieces of journalism that have shed more light on these issues and promise further data to come.

Last Monday, Suzanne Kapner of The Financial Times wrote a small but interesting piece entitled Concern Rises over U.S. Mortgage Defaults which discloses that she has received some hitherto unpublished numbers from the Office of the Controller of the Currency (the principal regulator of large banks) that potentially suggest that delinquencies on bank residential mortgage loans in portfolio may be higher than have been previously understood (and higher than what banks have disclosed for securities act purposes). Some 20% of bank-held mortgage loans, according to Kapner, are 30-days or more past due, which we read as meaning loans that are about to miss two or more payments. We are very interested in seeing more work from Ms. Kapner on this subject as banks hold nearly $3 trillion of mortgage loans in non-securities form on their books. 20% could be an alarmingly large number relative to existing loan loss provisions if such loans are eventually liquidated at anything near today’s prevailing recovery rates.

Yesterday, in a piece entitled Backlog of Cases Gives a Reprieve on Foreclosures, David Streitfeld of The New York Times writes extensively on the fact that the pace of foreclosure repossessions has slowed to a crawl throughout the country. He quotes one Florida chief judge as noting, “We’re here to do what we’re asked to do. But you’ve got to ask. And the banks aren’t asking.” He further notes that, at the current pace, it would take years to liquidate even the homes that are presently repossessable – and that’s just in the so-called non-judicial states. In states in which courts control the foreclosure process, it would take decades.

Yes, it is possible that these matters are coincidental and that the unfortunate situation merely looks as though large banks are kicking the can in order to avoid recognizing substantial losses for as long as possible. Or, perhaps, the situation is exactly as is appears – only bank regulators know for sure. And, like the rest of us, the regulatory establishment fears having the banking system fall back into disarray in a political environment in which renewed taxpayer assistance to the industry is by no means a certain alternative.

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Daniel Alpert
Managing Partner
Westwood Capital, LLC and affiliates
Office: 212-953-6448
www.westwoodcapital.com

This is what I will be reading on the way home tonight:

• Economist: Overly Swift Spending Cuts Scarier Than Temporary Default (Real Time Economics)
• The Unreliable Predictive Power of Bond Yields (BusinessWeek)
• With Its Stock Price Buffeted, Berkshire May Be a Bargain (WSJ)
• ‘Zombie notes’ live to haunt deed transfers (News Press)
• What This Country Needs Is a Good 5% CPI (WSJ)
• FireEye: Botnet Busters (BusinessWeek)
• The Triumph of New-Age Medicine (The Atlantic)
• 9 Awesome Interviews with Creative Visionaries (The 99 Percent)
• Geothermal Energy That Sucks CO2 From The Atmosphere (Fast Company)
• Gates’s Guidelines: 7 Rules for Managing the Pentagon (WSJ)

What are you reading?

If the Big Man can die, so can I.

Bruce Springsteen hasn’t written a hit in years. But we go to the show to remember. Who we once were. When we had hope, when we believed, when we still had hair, when we were skinny.

Danny Federici was bad enough. Then again, there’s been some change in the group. David Sancious used to play in the E Street Band. And Max wasn’t the original drummer. And Nils Lofgren broke through with Neil Young. And Miami Steve left and then came back.

But there’s no Springsteen without Bruce.

And there’s really no E Street Band without Clarence Clemons.

Not only was the Big Man on the cover of “Born To Run”, the breakthrough album, he signified that Bruce was something different, not a me-too act. Springsteen might have been labeled a Dylan wannabe, but when they finally turned up the band on the second record, and Landau enriched the sound on the third, the music was as far away from Dylan as Asbury Park is from Hibbing.

I bought that first album. And as good as “It’s Hard To Be A Saint In The City” was, “Spirit In The Night” was the keeper. Because of the sax.

And “Rosalita” was the keeper on the follow-up album. For the same reason. The explosion of pure joy. When Bruce sings about the record company giving him a big advance you feel like it happened to a member of your family, you’re not envious in a twenty first century way, wondering how come you haven’t gotten yours, but thrilled that someone you know has made it.

And then came “Born To Run”. If you’d been following at this point, the sax was not a surprise. It was an integral part of the group.

Then there was the end of “Jungleland”. That lonely sax spoke of nothing so much as despair. That’s the flip side of rock and roll. The exuberance and then the solitary feeling that you’re Wall-E, alone in a city without heart, without hope.

And what do you do when you feel this way? Put on a record! It’s the only thing that gets you through!

Springsteen changed with “Born In The U.S.A.” He tried to become what we didn’t want him to be. Everybody else’s.

But he redeemed himself with “Tunnel Of Love”. Listen to the title track. That’s love, a ride on a roller coaster in the dark.

“Lucky Town” was the better album, but the title track of “Human Touch” was pure Bruce. Anthemic without being meaningless. Bruce was not Gene Simmons, he wasn’t asking for your attention.

Ironically, that was Clarence’s gig. He could be everything the Boss was not. Flamboyant. A cheerleader. Clarence could enjoy the success when Bruce could not.

But no longer.

Like Ian Hunter, we were shocked to find out how old Clarence Clemons was. We think all our stars start out in garages and are on their way by twenty one.

But it takes others time to find their way. Their life experiences enrich their music. They’re one step ahead of us.

Then they’re gone.

It was bad enough he had a stroke. Dick Clark had one of those, he may not speak well, but he’s alive. Same with Kirk Douglas, hell, he was on the Oscars.

As long as Clarence Clemons was alive so were our hopes and dreams. On some level I’d just graduated from college, the E Street Band was on the stage at the Bottom Line, it was still a year away from “Born To Run”, never mind law school, marriage and decay.

But then he died.

I found out the way you do now. On my BlackBerry.

And the e-mail got me frantically searching.

There was a link to TMZ. But I wouldn’t believe it until a Twitter search confirmed it.

The Big Man had finally left the band.

Like Bill Murray said in “Stripes”, one day Tito Puente’s gonna die and you’re gonna say you’ve been listening to him for years!

One day Clarence Clemons is gonna die and he won’t be a secret. We’ll all say we’ve been listening to him for years.

It’s sad. For him.

And for us.

So put on a smile, let your freak flag fly, get behind the wheel of that convertible and floor it!

It’s fucking great to be alive. Seize the moment.

Clarence may die, but the music survives.

Crank it!

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Anyone in interested in the future digital media and the press simply MUST read this confessional straight off the plantation: An AOL Content Slave Speaks Out.

We start out with a simple admission that farmed content is garbage, and progress from there:

We — by which I mean me and my fellow employees — were all so grateful. Which allowed us to ignore — or willfully overlook — certain problems. Such as the fact that AOL editors forced us to work relentless hours. Or the fact that we were paid to lie, actually instructed to lie by our bosses.

was given eight to ten article assignments a night, writing about television shows that I had never seen before. AOL would send me short video clips, ranging from one-to-two minutes in length — clips from “Law & Order,” “Family Guy,” “Dancing With the Stars,” the Grammys, and so on and so forth… My job was then to write about them. But really, my job was to lie. My job was to write about random, out-of-context video clips, while pretending to the reader that I had watched the actual show in question. AOL knew I hadn’t watched the show. The rate at which they would send me clips and then expect articles about them made it impossible to watch all the shows — or to watch any of them, really.

That alone was unethical. But what happened next was painful. My “ideal” turn-around time to produce a column started at thirty-five minutes, then was gradually reduced to half an hour, then twenty-five minutes. Twenty-five minutes to research and write about a show I had never seen — and this twenty-five minute period included time for formatting the article in the AOL blogging system, and choosing and editing a photograph for the article. Errors were inevitably the result. But errors didn’t matter; or rather, they didn’t matter for my bosses.”

Google has started making some progress on plantation-derived content. I wonder if they will be gunning for the hybrid farming model — Huff Po, Seeking Alpha, and Biz Insider — or if their prominent name writers will continue to provide cover for the rest of the filler.

Meanwhile, check out the charts below

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Source:
An AOL Content Slave Speaks Out
Oliver Miller
Faster Times, June 16, 2011
http://thefastertimes.com/news/2011/06/16/aol-hell-an-aol-content-slave-speaks-out/

We took our QID and SDS leveraged shorts off today.

Not that we won’t put them back on eventually, but the 200 day moving average seems to be pretty decent support for now. (We added longs back in March)

This capital has yet to be redeployed — we are now running about 39% cash in Long/Short, our most aggressive portfolio.

More as this develops . . .

Interesting look at the long term capitalization of the NYSE & Nasdaq relative tot heir long term trend line:

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Market Cap, 1925 -2011

click for larger charts

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All charts sourced from Ron Griess, The Chart Store

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In case you missed it, my Sunday Washington Post column is on the interesting life lessons I have learned from people of great wealth.

I excerpted it yesterday. Rather than run yet another excerpt, I’d rather a) Point you to “7 life lessons from the very wealthy,” and 2) pull some of the quotes that I used in it.

Money won’t buy happiness, but it will pay the salaries of a large research staff to study the problem.
-Bill Vaughan

“Amat victoria curam.“
(Translation:  “Victory loves careful preparation.”)

“Luck is where preparation meets opportunity.”
-Roman philosopher Seneca the Younger

“Life is what happens to you while you’re busy making other plans.”
-John Lennon, “Beautiful Boy”

If you enjoy quotes and aphorisms such as these, I suggest you follow Market Quotes on Twitter.

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Source:
7 life lessons from the very wealthy
Barry Ritholtz
Washington Post June 18 Page G6| Updated: Friday, June 17, 9:45 PM
http://www.washingtonpost.com/business/7-life-lessons-from-the-very-wealthy/2011/06/15/AGxw6aaH_story.html

PDF

Comstock Partners analyzes economic and financial conditions from a long-term macro-economic perspective and makes adjustments based on cyclical and shorter-term considerations. In pursuit of its goals, the firm invests in various asset classes including domestic and foreign stocks, bonds, currencies and derivatives including indices and options.

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Looking back at the long history of the U.S. stock market it is clear that there are long periods when the trend is distinctly up or down. We call these long trend “secular” markets as opposed to the commonly-known cyclical market trends that last about four years on average. In our view we are currently in a secular bear market that began when the market peaked over 11 years ago in early 2000.

The most powerful secular bull market took place in the 18-year period from 1982 to 2000. In this period the market rose from 777 on the DJIA to almost 12,000 (16% compounded/year); the S&P 500 from about 100 to 1550 (16% compounded/year); and the NASDAQ from about 160 to 5050 (22% compounded/year). Although there were two other powerful secular bull markets such as the periods from 1921 to 1929 and 1949 to 1966, the bull market of 1982 to 2000 was the most significant by far.

The last half-decade of the 1982-2000 advance was accompanied by arguably the most spectacular financial mania of all time. Stocks, most often in the technology sector, typically went public and tripled on the first day of trading. The so-called dot.com stocks often had no earnings while others were merely concepts that didn’t even have revenues. To justify the ridiculous prices of these stocks, analysts came up with new and untried metrics such as the number of eye balls that were viewing or would be viewing their websites rather than fundamentals such as earnings or cash flow.

Starting in the late 1990s Comstock constantly warned clients how sick the mania had become. We did this through lengthy bi-monthly reports in print and later through brief comments on our website. Although we were too early, our judgment was finally vindicated for all of the right reasons once the stock market finally peaked in early 2000. At that time we were convinced that the market was entering a secular bear market that would last for many years. The combination of the extremely powerful 1982-2000 bull market accompanied by a senseless financial mania was the recipe for the start of the secular bear market we envisioned.

You would have to think this secular bear market would be extremely severe with the combination of a major bull market followed by a financial mania. The market did decline by about 50% but the powers that be did whatever possible to delay or reverse the secular bear. Fed Chairman Greenspan tried to stop the severe stock market decline by lowering the Fed Funds rate to 1% in mid 2003 and keeping it at that level for a year. This move stopped the bear market in its tracks. The low rate enabled home prices to accelerate to the upside, and congress jumped in to help the Fed with the rescue by passing every law they could to make it easy for virtually anyone to buy a home.

This started the housing market on a tear (or bubble) since anyone who wanted to buy a home was able to do so by putting up little, or no money. Many of these loans were called “no doc” loans which meant that there was no documentation (like annual salary) required in order to get the mortgages approved. This caused a housing mania that was exacerbated when investment banks packaged the loans and sold them to their clients. They wound up selling packages of very poor quality mortgages (sub-prime) called “collateralized debt obligations” (CDOs) and convinced the rating agencies (who were paid by Wall Street) to rate these “securitized mortgages” AAA. To make things worse, most of the brokerage firms that understood the toxicity of these CDOs protected themselves by buying “credit default swaps”, which were paid off when the loans defaulted.

Now, if the most significant bull market in U.S. history, that drove the stock market to “nose bleed” levels, followed by a dot com financial mania wasn’t enough to start the secular bear market, what would? Well the market did drop by about 50% in 2000-2003 and was on its way to completing the secular bear. But, when the Fed induced a housing market mania accompanied by a cyclical bull market in stocks (within a secular bear) you would think that when the secular bear resumed it would be more severe and deeper. So far, it did produce another 50% decline in the stock market in 2008 and early 2009 as a credit crisis in 2007 caused the worst recession since the Great Depression.

The major 50% decline in the market also fit the same path as Japan as one of our “special reports” discussed in 12/2/2010 “Is America Following the Same Path as Japan?” Japan “hit the wall” after experiencing a similar stock market move from 1972 when the Nikkei 225 was trading about 2000 until the end of 1989 when it reached over 39,000 (18% compounded/year). If you recall it was in the late 1980s when everyone believed that Japan would take over all the manufacturing in the world. At one time the U.S. had a robust TV industry until Japan essentially took over the industry and made virtually every U.S. TV in the late 1980s. This move up in Japan was driven by excesses in the non-financial corporate debt side. That was when Japan corporations bought Pebble Beach and Rockefeller Center and anything else that was for sale. Japan paid the price for the excess debt- driven bull market that drove the Nikkei to almost 40,000 and now is under 10,000 over two decades later.

The key 18 year bull market we experienced here in the U.S. ending in 2000 was driven by excesses in household debt. Although wage growth had flattened out, consumers wanted a larger home, a nicer car, and nicer clothes whether they could afford it or not. If they ran out of money with their credit cards and bank loans they would take out a second mortgage on their homes that they felt could never decline in value. Household savings rates, which usually averaged about 9%, fell to near zero. Household debt as a percentage of GDP generally averaged about 50% of GDP and 65% of personal disposable income (PDI). However, starting in the early 1980s (as the stock market started this amazing bull market run discussed earlier) household debt rose to 100% of GDP and 130% of PDI by 2008.

Once the secular bear market started in 2000 we were convinced that the U.S. public had learned their lesson and would start to pay down their debt and begin saving again. We were wrong. After Greenspan lowered rates and started another financial mania driven by home values and the stock market, we were again convinced that the public couldn’t be fooled again. However, after enormous bailouts of the largest financial institutions in the country, as well as the auto industry, and even more monetary ease than in 2003 (accompanied by TARP, the stimulus plan, QE, and QE2); we started another cyclical bull market within the secular bear market. The stock market went from severely oversold in March of 2009 to gaining 100% from those levels. We are convinced that, after the latest 100% rally since March of 2009, that this was the last time the public could be fooled again. And this time we are able to determine that consumers are saving more and consuming less; we believe this change in attitude will continue for a long period of time, creating severe headwinds against strong economic growth.

The most important question to ask yourself is, “can we have another major bull market in U.S. stocks anytime in the near future?” We believe the answer is a resounding “NO”! Just look at what took place in Japan after their stock market and economy “hit the wall” at the end of 1989. The private sector corporate debt that was primarily responsible for the most significant bull market in Japan’s history continued deleveraging for decades. Government debt rose in order to replace the shrinking of the non-financial corporate debt (the debt that drove their bull market) that was either defaulted on or paid off. If the non financial corporate debt drove the market up during their great bull market, it only makes sense that their stock market (Nikkei 225) would decline as the deleveraging process was taking place. And that is exactly what has been taking place for the past 21 years (since 1989) as the Nikkei declined from almost 40,000 to under 10,000 where it is presently. We also note that during the past two decades Japan’s GDP grew at an average annual rate of only 1%.

Why would we expect any different outcome in the United States as the household debt sector (the main sector that rose and drove the U.S. bull market of the 80s and 90s and also continued adding to the debt as the housing market took off from 2003 to 2007) is still in the process of deleveraging since 2007? That is just a little over 4 years, and we can expect a continuation of deleveraging for many years to come-we have a long way to go in order to get back to the levels of household debt relative to GDP or Personal Disposable Income (PDI). (See attached charts)

The U.S. stock market will not be able to rise in a sustained manner if we are correct in believing that U.S. households will continue deleveraging for the next few years to as many as 10 more years. The key is that household debt will have to decline to the levels of the 1950s, 1960s, and 1970s of 50% of GDP and 65% of PDI. That would mean the weak consumption will continue and that should lead to disappointing economic growth. The average annual growth in consumption over the last 50 years was about 3.5%, but only 0.6% over the seven quarters since the recovery started. That is the lowest growth rate since the Great Depression.

So the next question is, “How will the deleveraging affect the economy? And how will a weak economy affect corporate earnings? ” If the deleveraging affects the U.S. economy the way Japan’s deleveraging affected their economy over the past 21 years, it will clearly be highly negative for U.S economic growth. Since GDP growth and profits are positively correlated over time, that should negatively affect corporate earnings that have driven the stock market up for the past couple of years.

Now that operating earnings estimates for the S&P 500 have risen to the record levels of $100 again, we suspect that the deleveraging and weak economy will affect this estimate in a similar vein as in 2008, when S&P 500 earnings estimates were over $108 as late as May of that year. Actual earnings came in at less than $50 for operating earnings and less than $15 for “reported” earnings.

The bottom line is that we expect U.S. stocks to stay in the secular bear market that started in 2000 for many years to come. We believe the main factor that drove the most significant bull market in U.S. stock market history (household debt that enabled unrestricted consumption of everything from goods and services to homes) will reverse and continue the deleveraging process that will more than likely continue for a very long time. This deleveraging will act to affect the stock market in the exact opposite manner as the leveraging did in the bull market. To quantify this, if we were to look at historical household debt relative to GDP and DPI we would expect the debt to be in the area of about $7 to $7.5 trillion. Instead this debt rose to about $14.5 trillion at the peak in 2008 before declining to about $13.5 trillion presently. We expect this debt to fall below $10 trillion. This could take many years and be very painful for our economy, corporate profits, and the stock market.

click for PDF graphics
Standard and Poors 500
Nasdaq Composite
Dow Jones Industrial Average
Nikkei 225
Household Debt Percent Personal Income
Personal Consumption Expenditures as % of Disposable Personal Income
Performance of Real PCE vs. 1991, 2001 and Avg of Last Six Expansions
Economy (Index of Coincident Economic Indicators) – Revised

Source:
Why We Believe we are in a Secular Bear Market
Comestock Special Report, June 16, 2011

Some short, interesting reading to start off your week:

• With executive pay, rich pull away from rest of America (Washington Post) see also Stock awards and bonuses push up compensation totals (WaPo)
• Stocks Cheapest in 26 Years as S&P 500 Falls (Bloomberg)
• Felix Zulauf: Don’t Buy Stocks Until The Next Stimulus Begins (Business Insider)
• In 2011, Whither Skeptics of Euro? (WSJ)
• For Treasury Bulls, It’s All Good (WSJ)
• A (not so) Brief History of the Corporation: 1600 to 2100 (Ribbon Farm)
• Companies Push for Tax Break on Foreign Cash (NY Times)
• Why Do We Fight? Blame It on Our Brains. (WSJ)
• Complete And Thorough Incompetence: Your Guide To The 2011 Pick-Up Basketball Season (SB Nation)
• The Big Man, Much More Than Springsteen’s Sideman (NYT Arts)

What are you reading?