10 Tuesday PM Reads
By Barry Ritholtz - August 2nd, 2011, 4:30PM
This is what I will be reading on the way home tonight:
• Debt ceiling: Winners (FT.com) and Losers (FT.com)
• Investors Made a Fortune Betting on U.S. Treasuries (Bloomberg)
• The Obama Downgrade, Alphabetically (WSJ)
• More Than Meets the Eye (Hussman Funds)
• MBA Head Cozy with Banks While at the FHA (American Banker)
• Is a Balanced Budget Amendment a Good Idea? (Economix)
• How Apple would solve the debt crisis (Market Watch)
• Jay Rosen: Journalism in the Internet Age (The Browser)
• Speaker Boehner’s Debt Ceiling Agreement Presentation (The Big Picture)
• Hilarious! The Great Debt Ceiling Debate! (Hovac On The Hill)
What are you reading?
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August 2nd, 2011 at 4:35 pm
Black Hat: System links your face to your Social Security number and other private things
Black Hat presentation to show how photos, facial recognition and overlapping databases will lead to less privacy
http://www.networkworld.com/news/2011/080111-blackhat-facial-recognition.html?source=NWWNLE_nlt_daily_am_2011-08-02
August 2nd, 2011 at 5:01 pm
Improving Mexican economy draws undocumented immigrants home from California
Mexico’s unemployment rate is now 4.9 percent, compared with 9.4 percent joblessness in the United States.
http://www.sacbee.com/2011/07/28/3799513/improving-mexican-economy-draws.html
I’ll bet the Mexican army would shoot you if you crossed over into their territory
Goldman’s new money machine: warehouses | Reuters
(Reuters) – In a rundown patch of Detroit, enclosed by a cyclone fence and barbed wire, stands an unremarkable warehouse that investment bank Goldman Sachs has transformed into a money-making machine.
http://www.reuters.com/article/2011/07/29/us-lme-warehousing-idUSTRE76R3YZ20110729
Walnuts are DRUGS! FDA makes bizarre claim after seller says they ‘reduce risk of heart disease and cancer’
http://www.dailymail.co.uk/news/article-2018807/Walnuts-DRUGS-FDA-makes-bizarre-claim-seller-says-reduce-risk-heart-disease-cancer.html?ito=feeds-newsxml
August 2nd, 2011 at 5:01 pm
BR identified:
Investors Made a Fortune Betting on U.S. Treasuries (Bloomberg)
reply:
——–
There’s probably another fortune waiting. I went for what I had already won in my bond fund rather than go for what might be behind door #1 last Friday and made money. Rather than cry about missing out on today and yesterday, I think I will make it up soon unless the world ends shortly. Long term rates don’t appear to move in a straight line. There appears to be a lot of 50%, more or less, retracements on big moves. A buy in around 30Y 4.15 is highly possible. I’m waiting for this. Unless the world ends soon, 30Y index buyers today will suck wind unless they hold for a few weeks.
Good thing I quit stocks around S&P 1340. See me do the obnoxious happy dance.
PS: copper has barely budged. hint hint hint.
August 2nd, 2011 at 5:03 pm
Re: “The Obama Downgrade, Alphabetically” by Bret Stephens…
Nobody does sniveling douchebaggery quite like the WSJ.
August 2nd, 2011 at 5:08 pm
[...] – Further further further reading. [...]
August 2nd, 2011 at 5:08 pm
B is for Bull—t. Don’t post stupid articles from the WSJ.
August 2nd, 2011 at 5:11 pm
Oh, I see what you did there.
Contrast the WSJ manure against the article from Market Watch.
Very Smart.
August 2nd, 2011 at 5:19 pm
Compared to the Market, Solar Panels look like a Sure Thing.
August 2nd, 2011 at 5:20 pm
Some interesting data on joblessness…
http://mjperry.blogspot.com/2011/08/jobless-recovery-and-education-gap.html#links
August 2nd, 2011 at 5:33 pm
shorter wsj…”we are broke, but need to spend much more on war”…?
August 2nd, 2011 at 5:40 pm
In Dr. Hussman’s essay ‘More Than Meets the Eye,’ posted early Monday morning before any data releases, he stated:
‘From the standpoint of this composite [model], we would require only modest deterioration in stock prices and the ISM index to produce serious recession concerns.’
As of today, both of his conditions have been fulfilled. The ISM index plunged to 50.9, and the S&P is down from its level of six months ago. So apparently, his composite model now unambiguously predicts recession. I’d put the probability of a fresh recession at about 60% myself.
That said, a model with this many conditions (‘degrees of freedom,’ in mathematical terms) is heavily curve-fitted, when there are only 11 postwar recessions to go by — and some of the input data doesn’t extend back that far. For statistical validity, you’d want 50 or even 100 recessions to analyze, before slapping that many hairsplitting conditions on a model.
A far simpler model says that when year-over-year GDP growth slips below 2%, a recession follows. This model has worked 10 times out of 12. As of the flash GDP estimate, year-on-year GDP growth is an anemic 1.6%, and a recession is predicted. Panic buying of bonds over the past week supports this conclusion, as does today’s breach of the 200-day moving average by the S&P. A fresh record in gold is vote no. 3 for recession.
The bruised US economy is down on the mat, gasping for breath, and the referee is counting to ten.
August 2nd, 2011 at 5:52 pm
W is for Who cares about what the WSJ thinks of Obama
August 2nd, 2011 at 5:56 pm
BR asks, “What are you reading?”
A few bits and pieces about critical commodities and how their markets might fair in the near and long term. The news on Euro Oil is of no surprise, but is nice to see the WSJ bring up Peak Oil – it is starting to bite harder now.
The culling of the cattle (2nd below) is getting scary. It’s one thing to take losses on this year’s “crop” of cattle-for-market, but the culling of herds that have been very carefully assembled over many years and cost enormous amounts of money and time to rebuild… assuming you are crazy enough to want to rebuild when it is looking more and more like we might be returning to the Dust Bowl years ( is it even worth the risk?).
Europe’s Big Oil Sees Output Fall
LONDON—Most European major oil companies posted a surge in quarterly profits last week, but their results were overshadowed by a trend that continues to trouble Wall Street and corporate boardrooms: Nearly every major oil company reported year-to-year oil-and-gas output declines, often in the double-digits.
Big Oil is throwing huge resources at the problem with more open embrace of unconventional petroleum developments, high-risk exploration in frontier areas and corporate restructuring. But even if these strategies work in some cases, there is little doubt that anemic petroleum output signals a long-term challenge confronting the sector…
http://online.wsj.com/article/SB10001424053111903520204576479992404942406.html?mod=WSJ_Energy_leftHeadlines
” The expanding extreme drought in the Southern Plains is causing a significant acceleration of cattle liquidation in the region….By pushing beef-cow slaughter close to last year’s record levels, the drought ensures additional herd liquidation that deepens the hole from which the industry must start to rebuild”
http://beefmagazine.com/cowcalfweekly/0729-drought-accelerates-liquidation/
All 50 States See Record Highs in July
By OurAmazingPlanet Staff
LiveScience.com | LiveScience.com – Mon, Aug 1, 2011
No state in the union was safe from July’s blistering heat wave, according to data from the U.S. National Climatic Data Center.
The horrible July heat wave, lasting weeks in some cities, the entire month in others, affected nearly 200 million people in the United States at some point. Preliminary data show that 2,712 high-temperature records were either tied or broken in July, compared with 1,444 last year, according to the NCDC. At least one weather station in all 50 states set or tied a daily high temperature record at some point during July.
http://news.yahoo.com/50-states-see-record-highs-july-173203227.html
August 2nd, 2011 at 6:17 pm
Barry, Thanks for the link to The Great Debt Ceiling Debate, sometimes you just have to step back from it all and laugh.
August 2nd, 2011 at 6:18 pm
“balanced budget” seem an inappropriate name for it. More like “Capped Budget.”
As long as you have a current account deficit, by definition one or both of the government and private sectors must be in deficits. If these peanuts in the tea party want to balance the budget they should focus first on the structural reason for perpetual current account deficits.
http://seekingalpha.com/instablog/486073-wildebeest/200217-balanced-budget-madness
August 2nd, 2011 at 6:26 pm
http://www.bloomberg.com/news/2011-08-02/u-s-seeks-to-dismiss-new-york-state-lawsuit-over-natural-gas-drilling.html . Watch out for your drinking water NYC.
August 2nd, 2011 at 7:07 pm
Moody’s confirms US AAA rating
http://news.smh.com.au/breaking-news-business/moodys-confirms-us-aaa-rating-20110803-1iad4.html
August 2nd, 2011 at 8:47 pm
Lariat1,
that’s some nice fear-mongering, see some of..
Drinking Water Protection Program
Information about drinking water supply
Drinking Water Program Overview
Frequently Asked Questions and Definitions
Public Water Systems in New York: Facts and Figures
Providing Information for Consumers
Promotes the public’s “right to know” about the quality of their drinking water.
Annual Water Quality Report
Annual Compliance Reports: Public Water Systems with Violations
2010 Annual Compliance Report
Annual Compliance Reports (1998 – Present)
Boiling Water and Emergency Disinfection
Bromate in Drinking Water
Coliform Bacteria in Drinking Water Supplies
Concerns About Surface Water as a Drinking Water Source
Flood Recovery
Fluoridation in New York State: What are the benefits
Gasoline Oxygenates in Drinking Water – Fact Sheet
Lead in Drinking Water
Public Notification Requirements
Sources of Information for Consumers
Where can I get more Information?
Public Water Supply Contact Information
http://www.health.state.ny.us/environmental/water/drinking/
By Michael Hawthorne and Alexia Elejalde-Ruiz
Tribune reporters
April 17, 2008
Chicago officials have never tested the city and suburban water supply for pharmaceuticals and other unregulated chemicals, even as concern grows about the possible health effects of trace amounts of drugs in drinking water.
So the Tribune and RedEye did the testing the city won’t do….”
…
“…The Tribune’s findings echo what authorities have detected in tap water supplies elsewhere in the country: dozens of prescription and over-the-counter drugs as well as chemicals from personal-care products, food packaging, clothing and household goods….”
http://www.chicagotribune.com/news/chi-chicago-water-testapr17,0,6323835.story
LSS: the Idea of ‘Centralized Water ‘Sanitation”/Distribution is as absurd, an as (un-)effective, as Centralized Electricity Generation..
note, not, in the least, to be construed as “pro-” Industrial Spoilage of Water Resources..
August 2nd, 2011 at 9:13 pm
… I do believe that this last piece is the best I have seen in .. maybe the best thing from The Economist that I have EVER seen …
Buttonwood: Running out of options
… an excellent description of the corner that western civilization has painted itself into, without any phony solutions prescribed.
OK, so I’ll do that. Instead of assiduously using monetary policy, and military actions on demand, to keep our economies running properly, perhaps we should have been working harder (a LOT harder — easy enough, as we seem to not have been working on this at all) on making government work better.
Of rooting out corruption and waste, instead of gratuitously sewing it into the fabric of our nations and societies. Of making our middle classes stronger and more vibrant, as that is ultimately where prosperous and stable societies derive their strength.
Maybe it’s not too late to start. But given the decrepit nature of our present society, it’s going to be a much more difficult task now — but still easier that attempting to build a working civilization from smoldering ruins.
August 2nd, 2011 at 9:26 pm
Lariat1, there was also a recent episode of This American life that provided some backstory …
http://www.thisamericanlife.org/radio-archives/episode/440/game-changer
August 2nd, 2011 at 10:28 pm
@constantnormal: Thanks for link.