I found this compulsively listenable Electro-Swing song on a commercial — The Cosmopolitan Hotel’s “Just The Right Amount of Wrong” (see prior example).
Thanks to Tivo and Shazam, I was able to track the name of the song: Its Booty Swing by Parov Stelar. In hunting down the full version, I found this video of Forsythe’s mad moves.
Damn, that boy can dance:
Interesting quote from Laszlo Birinyi on Wall Street research:
“One of the dark secrets of the market is we don’t really do much research on Wall Street. I started off on the trading desk. I worked at my job. There were a lot of people who really hadn’t done the work, and what they were saying was very compelling and saleable, but it wasn’t right.”
-Laszlo Birinyi
Things have improved, but not all that much.
Its a Friday, the sun is shining, we were positioned correctly for the face ripper. And yet . . .
There remains an undercurrent that should give one pause. The ripper was based on some rather ephemeral news, some bad sentiment, and too many people on the wrong side of the boat.
Consider:
• US GDP: While the economy in Q3 grew at the fastest pace in 4Qs, it was primarily driven by Corporate spending, and household reduced savings. GDP improvement occurred despite the biggest drop in household incomes in 2 years, on top of the ongoing decline in home prices, and near rock bottom consumer confidence. Can spending drive GDP in Q4 and beyond? Is it repeatable? Hey, 2.5% is better than 1.3%, but I have my doubts that it is the start of a new trend.
The girl with the curls and the sweet pink ribbon in her hair
She’s crawling out her window ’cause her daddy
He just don’t care
• European Debt Crisis: Can it really be that easy? Deeply indebted Europeans decide to go deeper into debt, and that somehow is a solution? These is a high probability that Greece will fall out of the Eurozone, go back ont he Drachma, and start printing (Maybe they can borrow Ben’s chopper). A recession in Europe is a very high probability, assuming they are not in one right now. And yet, on this ephemera, we
The clown with the frown driving down to the sidewalk fair
Finger on the trigger let me tell you gave us quite a scare
• Take ‘em higher boys: Hedge funds are dramatically under-performing, and it seemed to be a group decision to rally ‘em hard yesterday. This was not based on fundamentals, but rather, something else entirely. We started with short covering, saw some under-invested hedgies pile in, then it was off to the races. (Mutual fund managers are not as lucky, investors have been dumping funds, even as stocks rally)
The kids flip their lids when their ids hear that crazy sound
My neighbor digs the flavor still he’s moving to another town
And I don’t believe he’ll come back
• Breakout/New Trading Range: Last Friday’s breakout saw S&P and Dow break free of the range they had been mired in for 3 months. The breakout seems to have stuck, and barring any catastrophic reversal, we should be in rally mode for a short while.
Well I don’t know how you take in all the shit you see
No don’t believe anyone and most of all
Don’t believe me
Believe you
Which leads us to:
• Year end rally: I have mentioned seasonality several times over the past week, and this rally seems to be running (or perhaps front running) into the best 6 months of the year. This does not mean the secular bear market is over, but it could very well clear us for a few weeks as we “melt up“.
Come on! Goddamn right it’s a beautiful day.
~~~~
Full lyrics from “Mr. E’s Beautiful Blues” after the jump
EU Banks Must Raise Capital
The Wall Street Journal – European Banks Look to Reassure on Capital Needs
Europe’s banks sought to reassure investors Thursday that they won’t tap them for fresh capital needed under a €106 billion recapitalization plan designed to make the sector more resilient to sovereign shocks. Spanish, French and Italian banks need around €50 billion in fresh capital under a European Union-wide agreement forged late Wednesday that analysts said was largely in line with market expectations and is part of broader efforts to restore the region’s financial health. However, several large banks from the countries early Thursday said they won’t have to turn to shareholders for the money, and analysts affirmed that many banks should be able to accrue capital by retaining earnings and disposing of assets…EU banks supervisor the European Banking Authority said around 70 banks in the 27-country bloc must add roughly €106.4 billion to their capital reserves to reflect price declines in the Greek and other sovereign debt they hold, and to generally bolster capital held against their assets. Final shortfall estimates will be released next month and banks will have until the end of the year to tell domestic regulators how they plan to come up with the money.
Asia To The Rescue?
The Wall Street Journal – Europe Turns to Asia for Help With Bailout
European officials have quickly turned to Asia to help bankroll their plan to ease Greece’s debt obligations and prevent its fiscal collapse—but it won’t be an easy sell. French President Nicolas Sarkozy was set to call his Chinese counterpart, Hu Jintao, just hours after the deal, and the head of the euro zone’s bailout fund was heading to China and Japan, cap in hand. But both Asian powerhouses have made clear that while they are willing to help Europe, they will invest on their own terms. The visit by Klaus Regling, of the European Financial Stability Facility, or EFSF, probably won’t bear fruit immediately, as China has indicated to International Monetary Fund officials that Beijing would contribute only through the IMF and in conjunction with Brazil, India and Russia, the other major emerging economies that together with China make up the so-called BRIC nations.
Comment
Reading between the lines, the Chinese want the U.S., who make up 18% of the IMF, to bear some of the burden of the European bailout. Sarkozy might want to consider a call to Obama as well.
Bloomberg.com – Sarkozy to Seek China Aid as EU Expands Rescue Fund
French President Nicolas Sarkozy said he plans to call Chinese counterpart Hu Jintao today to discuss China contributing to Europe’s efforts to resolve the region’s debt crisis…“China will need time to evaluate this plan very carefully,” said Shen Jianguang, a Hong Kong-based economist for Mizuho Securities Asia Ltd. “What worries China is that there is so much disagreement among European policy makers. It doesn’t want to be seen spending money on a plan that even Europeans don’t want to support.”
The Wall Street Journal – Europe’s High Price for China’s Friendship
Premier Wen Jiabao and other Chinese leaders have toured the continent, promising support for Greece, Spain and Italy in their hour of need. But beyond a few inconclusive data points, and hints from European officials who have every interest in talking up buying activity, it isn’t clear that China’s purchases of European debt have increased. The State Administration of Foreign Exchange—the manager of China’s foreign-exchange reserves—is focused on safety rather than returns. A dash into debt issued by distressed European countries appears unlikely. If Europe wants serious infusions of cash from China, it is going to have to put some real assets, or policy concessions, on the table. That process is already under way. In July 2010, Chinese state-owned shipping giant Cosco signed a 35-year lease on a Greek port for $4.2 billion. For a major trading nation, you can’t get much more strategic than a port. Beyond bricks and mortar, China has other interests to pursue with Brussels. Designation as a market economy under World Trade Organization rules could be top of the list—this would limit Europe’s capacity to take actions against the Chinese on trade matters. Mr. Wen has already dropped a broad hint that China’s support for a debt-ridden Europe would be tied to a change of heart by the EU on this key question.
Source: Arbor Research, LLC
Yeah, its Friday! Some reads to start your end of week:
• Economy in U.S. Surpasses Pre-Recession Level (Bloomberg)
• The tricky path toward greater fiscal integration (Economist) but see Greece Will Eventually Leave Euro Even With Bailout Agreement, Rogoff (Bloomberg)
• Ms. Rand, Meet Singapore. Mr. Hayek, Meet Norway. (Businessweek)
• Groupon and Zynga: What Happened One Share, One Vote? (WSJ)
• A Special Offer from America’s Corporations (Guardian) see also Goldman Bullies Teeny Credit Union that #OccupyWallStreet Uses (naked capitalism)
• Harp-ing on about housing (Alphaville)
• Squeezed Dry: Why Americans Work So Hard but Feel So Poor (The Atlantic)
• Climate Change Deniers Abandon ‘Befuddled Warmist’ Physicist Who Came Around On Global Warming (TPM)
• What’s Really Next for Apple in Television (Bits)
• Driven: 2012 Audi A7 (Automobile Mag)
What are you reading?
>
If the purpose of yesterday’s announced plan in Europe ex the details, the framework of which we’ve know for days, was meant to protect Italy and Spain’s access to inexpensive funding, the immediate response is a thumbs down in the market for Italian and Spanish debt. Yields are jumping for both as Italy sold debt with maturities stretching out 10 years. For the longest maturity, Italy has to pay a 6.06% coupon and the auction had a bid to cover of just 1.27. Italy raised 7.93b euros, most but not all of the 8.5b euros they hoped for. The action in Italian bonds however is not a response to the EU’s plans, its the lack of faith that Italy itself will have the political will in facing the obstacles to growth in their economic system that will hamper their ability to pay down debt. In the category that nothing is for free, in response to the push on the part of US Gov’t officials to expand the HARP program to allow more home owners with underwater mortgages to refinance, the Norway sovereign wealth fund said they sold all of their FNM and FRE MBS securities due to the heightened pre payment risks
If the purpose of yesterday’s announced plan in Europe ex the details, the framework of which we’ve know for days, was meant to protect Italy and Spain’s access to inexpensive funding, the immediate response is a thumbs down in the market for Italian and Spanish debt. Yields are jumping for both as Italy sold debt with maturities stretching out 10 years. For the longest maturity, Italy has to pay a 6.06% coupon and the auction had a bid to cover of just 1.27. Italy raised 7.93b euros, most but not all of the 8.5b euros they hoped for. The action in Italian bonds however is not a response to the EU’s plans, its the lack of faith that Italy itself will have the political will in facing the obstacles to growth in their economic system that will hamper their ability to pay down debt. In the category that nothing is for free, in response to the push on the part of US Gov’t officials to expand the HARP program to allow more home owners with underwater mortgages to refinance, the Norway sovereign wealth fund said they sold all of their FNM and FRE MBS securities due to the heightened pre payment risks
Full article, Genius Marketing: Audi Ad Details Crushing Physical Toll Of Racing In Le Mans at FactCoDesign:
Eliminating Luck,
The following photograph on videos show that Marine veteran Scott Olsen was peacefully standing at the Oakland protest when police fired a projectile at him:
Here is a photo of the ammunition or projectiles which police shot at the Oakland protesters:
Karl Denninger argues that the police intended to hit Olsen in the head:
One ex-Marine — a combat veteran — took a rubber round in the head. He is in critical condition and may die. That was not a mistake; that was aimed fire and an intentional assassination. Sorry folks, that’s facts – from 50′ you don’t “miss” and hit someone in the head with these things if you’re shooting for the legs or other non-vital parts. He was shot in the head by someone who aimed for the head. Those projectiles are not “non-lethal” and the bomb thrown by a cop at the people trying to come to his assistance after he fell wasn’t tossed accidentally either.
The policemen firing seemed to be having a little too much fun:
A protester also says the police shot him with a rubber bullet when he helped carry Scott Olsen to safety after he had been injured:
The Oakland police violated their own rules (page 9), and some have argued that they would have violated the Geneva Convention against targeting wounded combatants or those attempting to render medical aid.
No wonder even Amnesty International has condemned the use of tear gas as well as the actions of Mayor Jean Quan of Oakland, who said the measures were justified because protesters threw rocks. Although the Obama administration and the Department of Justice has shown no interest in investigating.
Olsen is a decorated veteran, who was an extremely hard-working network engineer:
Scott Olsen, 24, joined the protests as he worked his day job as a network engineer and left his apartment each night to sleep alongside protesters in San Francisco and Oakland, Calif., Keith Shannon said.
***Olsen, who is originally from Wisconsin, served two tours of duty in Iraq, makes a good living at a San Francisco software company and had a hillside apartment that overlooks San Francisco Bay.
***
Each night, he would go out to the tent camps that have sprung up over the past month in cities as the movement spread to protest economic inequality and what they see as corporate greed.
***
People at OPSWAT, the company where Olsen works, were devastated after learning of his injuries. They described him as a humble, quiet guy who worked hard over long hours.
“He’s been a big piece of what we do here and our growth strategy, so obviously it’s pretty devastating for us that he’s in the shape he’s in,” said Jeff Garon, the company’s director of marketing.
Olsen was awarded seven medals while serving in the U.S. Marine Corps, which he left as a lance corporal in November 2009 after serving for four years.
He went on two tours in Iraq, one in 2006-2007 and another in 2008, where he worked as a data network specialist. He was awarded seven medals, including the Navy-Marine Corps Achievement Medal, according to the Marine Corps.
Olsen’s condition has been upgraded from critical to “fair”, although neurologists say that he may require brain surgery.
Militarization of the Police is the Problem
Some are comparing police brutality towards the Occupy protesters to that used by Israeli forces against Palestinian protesters. Indeed, numerous heads of U.S. police departments have traveled to Israel for “anti-terrorism training”, and received training from Israeli anti-terrorism experts who have traveled to the U.S. See this, this, this, this.
But whether or not Israeli influence on U.S. police forces is a problem, the increasing militarization of U.S. police departments is clearly the problem (more).
In October 2010, the Oakland Tribune reported:
An Oakland police SWAT team finished second in a prestigious, internationally known training competition this past weekend, losing out to a group of Israeli police but beating more than two dozen other Bay Area law enforcement agencies that participated.
Indeed, the Alameda County Sheriff has hosted some of these Swat competitions (Oakland is in Alameda County, California).
Veterans Are Not Amused by the Attack on Olsen
Veterans are not amused by an attack on one of their own:
Apparently, veterans led the march to re-occupy Oakland after Olsen was injured.
And see this.
Anonymous Releases Police Information
Anonymous released a video in support of Olsen:
The group also temporarily took down the Oakland police website, and released personal information about Oakland police officers.
Mayor Backs Down
And the Mayor of Oakland has now done an about-face, saying the protesters can stay and that she “supports” them.
The Big Picture Conference
By popular request, the entire conference is now available for online viewing on Fora.tv. We have subsidized the video recording, editing and hosting, and your cost to view the entire conference online is $39.95 (versus $895 in person).
Fireside Chat with Doug Kass
Doug Kass: Is Apple More Valuable than Gold? from The Big Picture Conference on FORA.tv
"Markets can remain irrational longer than you can remain solvent." —John Maynard Keynes
After 3 quarters in a row that averaged just 1.2%, Q4 GDP grew 2.8%, a touch below expectations of 3.0% BUT Nominal GDP grew well below forecasts. Because the price deflator was up just .4% vs the estimate of 1.9%, Nominal GDP was up 3.2% vs the estimate of 4.9%. Personal Consumption rose 2.0% vs the forecast of 2.4%. Fixed Investment rose 3.3% helped by a 5.2% increase in equipment and software spending and residential construction rose by 10.9%. Trade was a slight drag on GDP growth and government spending was as well led by a 12.5% decline on national...
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