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

Sankey via ChartPorn:

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Source:
Indianapolis Art Museum
Möbius Ship, by Tim Hawkinson
Creation date 2006

DeLong vs. Grant: Is QE3 a Lifeboat or Torpedo?

With the U.S. economy showing signs of softness as the Fed’s second round of “quantitative easing” is set to expire, many are asking whether a third round of stimulus is in order. Berkeley’s Brad DeLong and Jim Grant, of Grant’s Interest Rate Observer, offer their differing takes on whether QE3 is a good idea.

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Real Time Economics
6/16/2011 8:00:43 AM

Over the last few years, and increasing in recent months, Fareed Zakaria has thrown off the shackles of his public role as a foreign policy commentator to become Time Magazine’s voice on the obstacles to American decline. Almost alone among the journalistic Mandarins, Zakaria is the voice of reason, common sense and adult responsibility.

Nowhere is that more in evidence than his new column on the ideological blinders that cripple American Conservatism. In an era when government is considered reflexively bad by both Democrats and Republicans, Zakaria takes a little time to remind us of some simple facts:

what is the evidence that tax cuts are the best path to revive the U.S. economy? Taxes — federal and state combined — as a percentage of GDP are at their lowest level since 1950. The U.S. is among the lowest taxed of the big industrial economies. So the case that America is grinding to a halt because of high taxation is not based on facts but is simply a theoretical assertion. The rich countries that are in the best shape right now, with strong growth and low unemployment, are ones like Germany and Denmark, neither one characterized by low taxes.

Many Republican businessmen have told me that the Obama Administration is the most hostile to business in 50 years. Really? More than that of Richard Nixon, who presided over tax rates that reached 70%, regulations that spanned whole industries, and who actually instituted price and wage controls?

In fact, right now any discussion of government involvement in the economy — even to build vital infrastructure — is impossible because it is a cardinal tenet of the new conservatism that such involvement is always and forever bad. Meanwhile, across the globe, the world’s fastest-growing economy, China, has managed to use government involvement to create growth and jobs for three decades. From Singapore to South Korea to Germany to Canada, evidence abounds that some strategic actions by the government can act as catalysts for free-market growth.

The Republican Right may be the most out-of-touch but Zakaria goes too easy on the rest of America. The idea that government has any positive role to play is entirely absent from our political culture. We complain bitterly about the lack of enforcement from Washington over a slew of industries and regulations—none more than Washington’s failure to rein in the mortgage and banking industries—but refuse to pay government officials and badger them over any status-conferring perks.

Worse still, in our zeal to denigrate government, we have taken to venerating the least efficient and productive sector of our economy, philanthropy. With Bill Gates and Warren Buffett touring the world with their misguided campaign to divert even more of the world’s capital into this wasteful and unaccountable sector, The Economist recently ran a side-by-side comparison of the IBM Corporation and Carnegie Endowment to determine which entity had created more social good over the last half century:

Judged on the past 50 years, there is a strong case for saying IBM has had more impact than Carnegie—especially if you count its accidental contribution to philanthropy by incompetently failing to stop Mr Gates from creating Microsoft. In part this is because its business, the management of information, has unusually large social benefits, and causes relatively few social or environmental costs.

In future, IBM expects to play an even greater role in profitably solving social problems by working with governments. “Everybody says they’re unsolvable—safe borders, clean water, energy. But the application of technology can solve a lot of these things we wrestle with,” points out Mr Palmisano. Firms in other, dirtier industries may not compare against philanthropy so well.

The Economist goes on to guess that the reason the Carnegie Endowment has not kept up with IBM is simply the dynamic nature of competition. Surviving a near-death experience and since having been remade again, IBM’s need to compete keeps the company from becoming sclerotic and complacent. The charity has no commensurate mechanism to keep it’s leaders “up at night.”

Returning to Zakaria’s point, what’s most striking about this bake off between IBM and Carnegie is that the mother of all social institutions–government–is absent from the evaluation. Despite government’s pervasive role–for both good and ill–in our lives, Americans seem determined to ignore its existence.

Even with all its flaws, government has accountability and competition built into the democratic system. The only question is why we—as citizens—don’t demand more of it.

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Sources:
How Today’s Conservatism Lost Touch with Reality
FAREED ZAKARI
Time Magazine, June 16, 2011
http://www.time.com/time/nation/article/0,8599,2077943,00.html

The Centarians Square Up
The Economist, June 9, 2011
http://www.economist.com/node/18802844

Click on chart for larger image

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Despite the concern about the economy, Greece, China, etc., and general sentiment readings, the VIX remians surprisingly low:

BusinessWeek: No Panic in Options After VIX Takes Six Weeks to Exceed Average

It took six weeks of equity losses, a series of lower-than-estimated economic reports and political turmoil in Greece to finally drive the options gauge known as the VIX above its long-term average. The Chicago Board Options Exchange Volatility Index rose 17 percent to 21.32 yesterday, topping its 21-year mean of 20.34 for the first time since March 21, according to data compiled by Bloomberg. The VIX averaged 17.44 since the Standard & Poor’s 500 Index, the benchmark measure of U.S. stocks, began falling after reaching an almost three-year high on April 29. The options measure failed to surge even after the Citigroup Economic Surprise Index sank to minus 117.20 this month, meaning data missed projections in Bloomberg surveys by the most since January 2009. The response shows there’s no panic among investors buying and selling equity derivatives. . .”

Jim Bianco of notes the following about the VIX:

“In both normalized measurements, the present VIX reading is just over its trend curve. This is a market simply unwilling to acknowledge anything unusual might be underway.

As the spate of negative economic news and the largest one-day selloff since August 2010 have not been kept secret, we have to conclude one of two things: Either the options market is correct or option buyers have been blinded by, well, blind faith. It is quite possible the latest spate of negative news is simply one in a series of crises since March 2009 that have generated a great deal of excitement and then were buried in the next rally. For more than two years, the the bears have made the headlines and the bulls have made the money, much to the consternation of the bears.

Still, as noted in March, it would be better to see a rising VIX in such a situation. What never has changed and never can change are the mechanics of market-making; each purchase of protection in the put options market or in floating-rate receiving on variance swaps demands market makers sell ever-greater quantities of stock at ever lower prices to hedge. If the present complacence is incorrect, the subsequent adjustment will be harder and more violent than it would have been otherwise.”

NPR: Quick-Blog Site Tumblr Takes Off In An Uncertain Marketplace

This is what I am reading this morning:

• Gambler or Investor? The Truth About Why We Trade (WSJ)
• 8 reasons you stink at trading stocks (Market Watch)
• Google and Silicon Valley’s cult of innovation (Telegraph)
• The Misunderstood Home-Mortgage Interest Deduction (Economix)
• Beware Contagion From Greeks Baring Rifts (WSJ)
• America’s Favorite Talking Hothead (NY Times)
• Guides for the Casual Movie Buff and Dedicated Cinephile  (App Smart)
• One Night in Bangkok Can Lead to Quite a ‘Hangover’ for Thailand (WSJ)
• The true Life Confessions of Fleetwood Mac (Rolling Stone Magazine)
• George W. Bush’s Nixonian Moment (NYT)

What are you reading?

The following was written by Jawad Mian, Portfolio Manager based in Doha, Qatar

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I have tremendous respect for Akram Annous, a 30-something market intellectual, a mad scientist if you will but without the hair. He is a great writer and friend, and we both share a similar passion for the global macro world. We also both share a similar aversion to The Bernank. For the last 3 years we have largely been in agreement on our views about the world and where to invest. Lately, however, we seem to be fighting about everything. Like a married couple, we can’t seem to agree on anything. Never before have our views been so divergent. Never before has reading his writing caused me so much pain. I had had enough. It was getting ridiculous. So I proposed we have a sit down, scratch our heads, and let it all out. ‘The Great Debate’ is what ensued. It is kindly attached for those eager few who would like to read our silly musings. Have a sexy weekend.

-Jawad

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US Markets

Jawad: I believe the US market is making a transition to a new phase that will result in slower price gains and higher price volatility. That’s not unusual as corporate profits begin to settle down to a more steady state or long-term trend and earnings growth naturally slows. The easiest part of the bull market is over and we can see market correlations fall further. But we are not on the verge of a new bear market in my view. The market trend going forward will be a lot flatter but still upward biased. I expect the S&P to make new highs. Liquidity, economic momentum, and “valuations” are still supportive of further gains.

Akram: Sorry Jman, but I am going to have to say BEAR! We are headed lower. And I’m not even thinking about an entry level to buy stocks yet.

Since economies are cyclical I like to use Shiller’s S&P CAPE ratio when I want to look at equity valuations. Presently, it’s flashing extremely expensive. I’m a big believer in the fact that equity multiples are going to contract, maybe even to extreme historical lows. We are already seeing signs of this in some sectors like financials or large cap tech, both of which make this bull look a lot more like a bear in disguise. Low rates and cash rich balance sheets are byproduct of an economy facing structural challenges and more likely than not a protracted period of subpar economic growth.

Look at Best Buy. They beat earnings estimates. How? They borrowed $700mm and bought back $500mm in stock. At the same time they slashed prices to move product, and cut more overhead. The stock looks cheap as management is massively buying back stock, but is this a business you want to own right now? Almost everything they sell can be bought in an aisle at Wal-Mart or Target and definitely on Amazon. The multiple will continue to come in because longer-term the growth isn’t there. Best Buy’s problems are structural, and that’s how I view most of the US economy these days. When you combine that with the fact that corporate margins have likely peaked, the dollar devaluation won’t be a tailwind for most global corporate top lines anymore, and a Fed that can now do nothing but sit and watch; you should be wary of equities. I will however concede that companies most leveraged to emerging market growth should fare better, but when you consider the current relative size of the US economy to the rest of the global economy that’s not saying much.

Jawad: I don’t disagree with your assessment of the economy. I share the same view.  However, making a structural case for the economy does not help you time cyclical investment opportunities in markets – the 6 to 12 month outlook. Four months ago, everything lined up for a great short trade and I thought we could lose 20 percent easy. But the market chose to correct within a 10 percent range and consolidate sideways over a period of four months. The current weakness may persist, but I still view it as a buying opportunity seeing as we are closer to the lower end of that range. The window for a major decline has now closed.

Most of the overbought conditions have slowly worked off and sentiment has turned decisively negative for stocks. Financials are breaking down but you don’t need them to rally for the market to move higher. It is not a reason to worry – unless you see rising rates or another financial crisis. I don’t see both happening any time soon. Rotation can be good. Tech needed to breath and energy still looks great. There could be a 5 percent slide here but I want to buy into that. The cyclical uptrend in stocks is not over.

Akram: ‘Buy the Dip’ is over Jman. The Bernanke Put has expired. Your bull was nothing more than the work of a clever illusionist.

Jawad: Do you even remember what it was like to be bullish about something??

Akram: Yes, the lobster dish at Zuma. The only perma you will find here is perma-frost as we enter a new ice age for equities. You can’t change my mind. I’m a big bad bear!

Jawad: I’ve danced with the bears, now it’s time to ride with the bulls. That sounded better in my head.

Treasuries

Akram: Yields are going lower. US households have less than 2% of their nearly $50 trillion of financial assets in Treasuries. Most of this household wealth is tied up in the aging baby boomer generation. As they shift to capital preservation mode, they will buy more and more Treasuries despite all the fiscal worries. Who wants to fight that tape? Let me see it get over 5%, and I will be willing to take a second look. And this is before Uncle Sam starts calling for them to do so with clever patriotic ads. Also, the unfunded or underfunded obligations we here so much about don’t really concern me. Americans will just have to get used to a lower standard of living. You will retire later and have to pay more out of pocket for your healthcare.

One day, a stroke of the pen will eliminate most of these Medicare and Social Security obligations we are so worried about today. Since The Bernank signaled the end of QE2 is on schedule this past February yields have plunged. Why is that? If he was supposedly supporting this market, shouldn’t his exit cause yields to rise? If you ask me, it’s the QE that kills treasuries by causing dollar angst. Take it away and we will resume our long-term descent. We are headed to the low 2’s on the 10 year over the next 18 months.

Jawad: Wow, I can’t believe you just said that. I just downgraded you in my head. This is what happened: we reached February and it was easy to see markets are vulnerable, sectors are overbought, relative valuations are not as exciting, and economic data will weaken. Yields had come off nicely so you could buy safety there. Markets come down; government bonds catch a bid and rally. That’s it, plain and simple.  You give too much credit to The Bernank. Who listens to him anymore? The Treasury market was quick to discount an extended slowdown and appears overvalued. The Treasury rally needs QE3 to continue.

My view is that current yields are at the bottom end of a range and more likely to shift modestly higher than lower in the coming months. The economic surprise index has fallen even further than it did during last year’s growth slowdown and reversals in the surprise index have been well correlated with reversals in the Treasury market, suggesting that the risks for yields are now skewed toward the upside. The same index pointed to lower yields from the highs in late February.

I don’t see how we can sustain below 2.60 on the 10 year. I would use any further strength to accumulate short positions at the longer end. Extremely low real Treasury yields highlight that investors do not require any fiscal risk premium at the moment – that is likely to change at some point over the next 18 months. Think about it, even a 5% bond rate on the 30 year extrapolates to only 2% inflation for 30 years. I can’t buy into that. Not with The Bernank at the helm as the monetary bartender… I’m not drinking that Kool-Aid!

US Dollar

Jawad: The dollar is going down, down, down. The biggest unappreciated risk to the global macro picture is a “dollar crisis”. That is, a swift decline in the dollar. If it is orderly, that’s okay. But if it is quick and swift – like a crash – then that’s a huge problem. I’m of the view that that’s where you will see the market show its disgust towards the US fiscal theater at play over the coming years. It would be a “dollar crisis”, as a result of the fiscal disaster.

It is argued that the US cannot default. All US debt is denominated in dollars and the Fed can print as many dollars as needed to repay creditors. Even if that’s technically correct I believe it is irrelevant for the holders of US debt. Getting repaid 50 cents on the dollar is the same as getting repaid in a dollar that only has 50 cents of purchasing power. I see no real possibility of a drastic change in policy to avert this outcome. I’m very, very bearish on the US dollar.

Akram: Currencies are a relative game, and right now I’m more bearish on the Euro. I think Trichet must be running monetary policy from a cloud based computer. He is talking about raising rates again in July while I expect him to have to reverse course and cut again. Europe’s economy is for the most part less dynamic and productive then the US, and it probably has even worse structural issues when you look at it as a whole. The manufacturing volatility in this economy is in Germany.  The debt problem is on the periphery. The innovation is non-existent. And the sovereign cancer in the banking system has most likely already metastasized. Wait for the China demand boom that is the German engine to slow and watch what will happen. Add in the Fed exiting QE2 right now and you have to really like the US dollar against the euro.

Jawad: Only short-term. I still favor staying broadly short the US dollar. I don’t see how it can sustain a powerful advance like the one we had in 2008 anymore. The world has changed.

Akram: 2008 was a panic. The last three years have been a combination of that fear unwinding and an intentional move by the Fed to provide relief from the Fisher Dollar disease which The Bernank is oh so obsessed with and an expert on. We will settle somewhere in between, but I am wary of the bartender.

China

Akram: They are a growth story, and probably driving 90% of what is working in global markets these days. But even the best growth stories experience major bumps along the road. China is approaching a big one. While most people are worried about inflation, I see a deflationary bust around the corner in this economy. We’ve been talking about a housing crash for several years; it’s finally starting to happen. A slowdown in fixed investment and the paper tiger remerges.

Jawad: I don’t see a deflationary bust. I view the recent poor performance of the Chinese market as cyclical rather than secular. The weakness in China was policy driven and the policy environment is turning progressively supportive for stocks. China is in the late stages of its tightening and money growth has declined sharply. Real estate stocks there have stopped underperforming the benchmark which is a positive. Copper is soft but not collapsing. Being a China and commodities bear is not contrarian anymore. I like the odds here and expect a recovery rally later in the year.

Akram: I’ll stick to betting against the Chinese economy and not Chinese equities in general as I don’t see much excess there. Though I am sure bank shorts will work well once the real estate problems really get going. With price to income ratios close to 40x in Beijing and residential investment at 9% of GDP versus something closer to 5% for Japan during the 1980’s, you are not going to get me to back off this bubble. Anyway, we must go to China.

Gold and Silver

Jawad: Love it!!! I consider precious metals to be the single best investment right now, buy and forget. But I’m even more excited about the shares. The gold and silver mining stocks should perform strongly in the second half of the year and over the longer-term. Gold mining stock price/earnings ratios are near multi-year lows and gold mining companies have systematically reduced hedges on future production thus offering a better play on higher gold prices. I strongly believe that one should hold a basket of juniors. I’m buying right now.

Akram: It’s been fun. I’d still probably hold some gold in a diversified portfolio, but I am not prepared to switch to a precious metal store of value regiment anytime soon. Silver was a bubble and it probably still is one, basically, it’s a great asset for speculators in either direction. Let the euphoria around gold subside some, and I might be willing to take a look. But overall too consensual for me, and I was a bug for several years.

Jawad: The only bubble right now is the way you think! Mark my word – silver is going to be above $100 by the time I turn 30. How old will you be by then? You don’t have to answer that.

The Global Economy

Akram: Down but not out. There is a once in a lifetime shift going on here. Wealth transfers like we are witnessing don’t happen very often. We will eventually find a balance, but it is going to take some time.

Jawad: I generally agree with that. I used to be a “double dipper”, but I don’t see that risk anymore.  But I do see the risk of not being paid bonus again this year.

MENA

Jawad: I find the politics more interesting than the markets right now. But to put it simply, I believe the Gulf markets will do well over the medium-term. I like Qatar and Saudi Arabia. I have a very positive energy outlook and I believe energy-related investments will fare well over time. Higher oil prices will lead to a higher level of public spending which should lead to a higher rate of contract awards for some of the listed players and higher earnings. The return of liquidity should also find its way into the equity markets.

Akram: I have to admit that I am not too excited about equity markets in the region right now. There was a period of extreme volatility that coincided with the political/social turmoil that was great for making money in equity markets (Saudi and Egypt in particular). If you missed that or got caught in it, you most likely are going to end up having a tough year. Overall, Saudi and Qatar equities have held up the best, but I am not too excited about either equity market for the remainder of the year as I see them more exposed to an Asian demand drop-off. If you want to chase MENA liquidity, go buy some credit. Fixed income has been the place to be, and it continues to be the place to be. Look at how paper like the DIFC Sukuk, Emaar convert, and Aldar convert has fared over the past six months.

Jawad: Credit is boring, I prefer stocks. There are plenty of risks to monitor, however. The biggest of which is the Kingdom’s succession problem. King Abdullah of Saudi Arabia is close to 88 years old and in frail health. His brothers, though less revered by the Saudi people, are not any younger or doing any better health-wise. The sudden demise of King Abdullah would almost certainly stoke fears of social unrest in Saudi Arabia. That could really spoil the royal revelry. However, there is no way to predict the precise timing of the King’s death. I already checked with Goldman.

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Jawad S. Mian

Direct: +974 4405 6557

Email: jmian -at- qinvest.com

PO Box 26222 | Doha | Qatar

After 8 weeks in the past 9 of above expected Initial Jobless Claims, they were 6k less than expected at 414k for the week ended Saturday, down from 430k (revised up by 3k) last week. It is though the 10th straight week above 400k. The 4 week average was unchanged at 425k. Continuing Claims fell by 21k but was 5k higher than forecasted. Extended Benefits fell a net 115k to the lowest since July and while the pace of new hires still remain lackluster, we hope that the drop in this category is more to people finding new jobs rather than exhausting benefits. It’s likely a combination of both. In terms of Initial Claims, the unfortunate trend continues of a still stubborn pace of firings that is only modestly being offset by hirings.

May Housing Starts were 15k higher than expected at 560k annualized and April was revised up by 18k to 541k. The 560k level is right in line with the 12 month average and still not to far from the lowest since at least 1959 so we continue to bounce along the bottom. Both single family and multi family categories rose. Permits, the precursor to Starts, totaled 612k, 55k higher than estimated and the highest since Dec, but was mostly led by multi family construction where they rose to the most since Nov ’08 as the country continues to transition to a lower homeownership rate. As of Q1, the homeownership rate was at 66.4%, below the record high of 69.2% in Q2 ’04 but still above the long term average of 65.4%. In terms of overall construction jobs, multi family will be one bright area. For single family homes, I continue to argue the less starts the better right now as we work thru the still high inventory of existing homes.

“I am confident that next Sunday, the Eurogroup will be able to decide on the disbursement of the 5th tranche of the loans for Greece in early July,” said Olli Rehn, the EU economic commissioner at around 6am this morning. The Greek 2 yr yield, above 30% right before, is back towards 29%. If it wasn’t for the ECB and their line in the sand position against any sort of debt workout, this process would certainly be much easier and it still remains to be seen to what the ECB will eventually compromise on. ECB member Bini Smaghi repeated his stance against what the private bond participation that the Germans are pushing for. The ECB is in a dream world thinking the Greeks can pay back what is owed and the ECB’s polluted balance sheet is the major impediment to a deal. Spanish bonds are no longer immune as their 10 yr yield is rising to an 11 yr high and 5 yr CDS is back above the concerning level of 300 bps, a 5 month high after they sold 8 and 15 yr paper in a total amount that was below what they hoped for. $ and euro swap spreads are spiking to 6 month highs. The Reserve Bank of India raised interest rates as expected but with real interest rates still negative, they hinted at more to come as they admitted they are willing to sacrifice short term growth for long term price stability.

Did Goldman mislead Congress about its ‘Big Short?’ The answer, according to PPWIJ* Jesse Eisinger, is an emphatic yes.

Eisinger cuts right to the heart of the matter regarding Goldman Sachs possible perjury regarding their “big short.” It was not the actual size of the short, but it was a) How GS got short; and 2) Whether Goldman was saying one thing in disclosures to clients and doing another.

Here’s Jesse:

“To establish many of its short positions, the Senate report says, Goldman created new securities, backed them with its good name, and then strung together misleading statements to its customers about what it was actually doing. By shorting the way it did, the bank perverted the market instead of correcting it.

Take Hudson Mezzanine, a $2 billion collateralized debt obligation created by Goldman in 2006. In marketing material, the firm wrote that “Goldman Sachs has aligned incentives with the Hudson program.”

I suppose that was technically true: Goldman had made a small investment in the C.D.O. and therefore had an aligned incentive with the other investors. But the material failed to mention the firm’s much larger bet against the C.D.O. — a huge adverse incentive to its customers’ interests.”

That appears bad enough; but Goldman seems to have misled its clients as to how these CDO’s were constructed. In a classic case Goldman Sachs alchemy, they scraped the shit off their own boots, i.e., junk assets on their own books they could not otherwise find a buyers for. That is not what they had told buyers, however:

“Goldman told investors that the Hudson assets had been “sourced from the Street,” which most investors would understand to mean that Goldman had purchased the assets from other broker-dealers. In fact, all the assets had come from Goldman’s own balance sheet, the Senate report found.”

If you are going to screw your clients, well, thats bad enough. It may not be illegal, its merely sleazy, Vampire Squid-like behavior. But to get this bad behavior to rise to a crime, you need to do a little more. You need to lie to Congress about it:

“In his April 2010 testimony to the Senate, Goldman’s chief executive, Lloyd C. Blankfein, argued that Goldman was merely making a market in these securities and derivatives, matching willing and sophisticated buyers and sellers. But Goldman was acting like an underwriter, not a market maker.

As the underwriter, Goldman threw its marketing muscle behind Hudson Mezzanine and other C.D.O.’s. When the bank’s salespeople ran into trouble selling the securities, they begged for help from the executives who created them. One requested material to give to clients about “how great” the sector was. One needed the aid to get a client to invest, to be “THERE AND IN SIZE,” according to e-mails cited in the report.”

Goldie can dispute the Permanent Subcommittee on Investigations report on the financial crisis all it wants; The report is compelling and the data shows Goldman Sachs had a huge hedge against the housing market versus their own underwriting.

Whether this amounts to a Big Short or not is almost beside the point: You cannot say one thing to clients and then do the exact opposite in your own book.

I previously suggested this may not be an ideal case to settle. In light of the most recent revelations, and the ongoing overhang that is starting to impact recruiting, retention, and other factors. The stock has been one of the worst performing issues int he financial sector.

Maybe its time for GS to face this head on. Thus, I will give advice to Goldman Sachs that 1) might save them $100s of millions of dollars; b) be completely ignored.

That advice? Sit down with Senate and DoJ leaders, put together new procedures, write another big fat check, and make this go away . . .

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Previously:
10 Things You Don’t Know (or were misinformed) About the GS Case (April 23rd, 2010)

Its the Law, Bitches! (July 19th, 2010)

Contest: Ideas for Goldman Sachs Ad Campaign (September 29th, 2010) 

Source:
Misdirection in Goldman Sachs’s Housing Short
JESSE EISINGER
New York Times DealBook, June 15, 2011, 3:01 pm
http://dealbook.nytimes.com/2011/06/15/misdirection-in-goldman-sachss-housing-short/

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* Pulitzer Prize Winning Investigative Journalist