My afternoon reading:

• 71% Say Government Should Let Big Troubled Banks Fail (Rasmussen Report)
• Greece: when the drugs run out (FT.com)
• Queen Elizabeth, Venture Capitalist for Marauders (Bloomberg)
• Lampert Skeptics Could Get Seared on Sears (WSJ)
• Investigating JPMorgan Chase (Economix)
• Rand Paul’s cynical budget (Washington Post)
• How Yahoo Killed Flickr and Lost the Internet (Gizmodo)
• Coffee May Help Drinkers Live Longer, U.S. Study Suggests (Bloomberg)
WTF? The manhood makeover: The rise of the penis enlargement (Independent)
• TONITE: Conan O’Brien to Appear on Letterman Show (NYT)

What are you reading?

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How Facebook’s I.P.O. Compares


Source: NYT

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

24 Responses to “10 Thursday PM Reads”

  1. DSS10 says:

    This was sent to me this afternoon, I’m sure that it must have been posted here before but if not….

    The video is interesting.

    http://www.artemiscm.com/category/research/

    Volitility at Worlds End: Two Decades of Movement in Markets
    April 17th, 2012 By: Christopher Cole Tags: Videos, Volatility

    Artemis Capital Management LLC is pleased to present “Volatility at World’s End: Two Decades of Movement in Markets” a unique visualization of implied and realized stock market volatility from 1990 to 2011. The video was originally shown as part of Christopher Cole’s speech at the 2012 Global Derivatives and Risk Management Conference in Barcelona Spain on April 17th.

    The movement of stock prices has been an obsession for generations of speculators and traders. On a higher level mathematicians believe that modern markets are an extension of the same fractal beauty found in nature. Visualized these stock markets may take the shape of a turbulent ocean with waves made of human hopes, dreams, greed, and fear. Merging the world of high-finance and high-art Artemis Capital Management LLC is proud to present a creative visualization of stock market volatility over the last two decades.

    Volatility at World’s End: Two Decades of Movement in Markets is a depiction of real stock market volatility using trading data from 1990 to 2011. The visuals are designed from S&P 500 index option data replicating the implied volatility wave (or variance swap curve) extending to an expiration of one year. The front of the volatility wave contains the same data used to calculate the CBOE VIX index. The movement of this wave demonstrates changing trader expectations of the future stock market volatility. As the wave moves through time the expected (or implied) volatility surface transforms into a realized volatility surface derived from historical S&P 500 index movement. The transition represents what professional traders call “volatility arbitrage”. The color variation in the volatility waves show the volatility -of-volatility or internal movement of the wave. The track underneath the volatility wave represents underlying S&P 500 index prices.

  2. willid3 says:

    market wont fix JPM

    http://baselinescenario.com/2012/05/17/why-markets-wont-fix-jpmorgan/

    Bankers don’t ask, “Do I want to gain or lose money today?” That’s not the relevant point at which incentives apply. Instead, they ask: “Do I want to engage in this specific class of activities that has a certain expected payout structure?” In the JPMorgan case, the question is: “Do I want to engage in trades that are, roughly, portfolio hedges but that also take significant long or short positions on the credit market as a whole, with the conscious intention of making money?” And what we care about is whether the bankers’ decisions are producing the socially optimal level of risk.

  3. Sunny129 says:

    Euro Banksters vs Sexi Alexi!

    WSJ:

    ATHENS—The head of Greece’s radical left party says there is little chance Europe will cut off funding to the country and if it does, Greece will repudiate its debts, throwing down a gauntlet that could increase tensions between Greece’s recalcitrant politicians and frustrated European creditors.[..]
    Mr. Tsipras says that, if push comes to shove, Greece can manage on its own. By not paying its debts, the country will have enough cash to pay its workers and retirees, he says. He also proposes cuts in defense spending, cracking down on waste and corruption, and tackling widespread tax evasion by the rich.

    “Whatever we do, things will be difficult. But it will also be difficult at the same time for all of Europe because the euro will collapse” if Greece’s funding is cut off, says Mr. Tsipras. He adds that both sides should step back “before we reach that point” and find a “European solution.”

    the Greek drama is getting intense by the day!

  4. willid3 says:

    why the cops could be knocking on JPM door

    http://www.nakedcapitalism.com/2012/05/michael-crimmins-why-the-cops-should-be-knocking-on-jamie-dimons-door-soon.html

    but dont expect any thing soon.

    JPM and company have a lot of lawyers. on speed dial

    so it will take while before any thing happens

  5. rd says:

    Only 71%?

    If the time spent writing 2000 pages of Dodd-Frank followed by that or more for new regulations had been spent on figuring out tweaks to Chapter 11 to allow a TBTF to fail, replacing management and wiping out shareholders, then the financial sector would be much closer to be productive members of society.

    They certainly took the time to rewrite Chapter 7 for individuals to make that more difficult and to prevent student loans from being discharged in bankruptcy. They also took a liberal interpretation of bankruptcy laws to put MF Global through Chapter 11 to transfer money to JPM from the “segregated” customer accounts that were not in fact segregated. The precendence of bondholders in Chapter was also liberally interpretated in the auto company bankruptcies to beenfit the unions.

  6. willid3 says:

    SEC takes a while to get going. but eventually it might. course it might have some thing to do with its budget.
    if those who work for wall street in congress can’t stop it from doing its job by legislating it (might have a really red face on the next election if it got out!) or by cutting its budget (that works too! only know body notices that!), or by voting for a crony who is in their pocket (or can’t tell the difference!)

    http://www.nakedcapitalism.com/2012/05/mirabile-dictu-the-sec-finally-investigates-magnetar.html

  7. PeterR says:

    Re: Fa(r)ceBook IPO:

    This is Options Week.

    If this IPO falls on its Face(Book), no pun previously intended honest!, could the trading week end quite miserably?

    Have a good weekend.

  8. Sunny129 says:

    @DSS10

    Thanks for the link. The video is awesome driving the point!

  9. ssc says:

    US orders 31% duty on Chinese solar panel: http://online.wsj.com/article/SB10001424052702303360504577410392432515760.html?mod=WSJ_hp_LEFTWhatsNewsCollection

    And the real gem is in reader comments from a Mr. Charles Webb:

    “There’s so much irony here it’s hard to know where to start. Nothing like slapping a big tariff on solar panels to achieve the goal of cheap green energy.

    So it’s a crime when the Chinese subsidize this industry but helping the greater good if the subsidies come from Washington. For once we had someone else supporting this boondoggle that doesn’t involve the US tax payer. Apparently, it’s only appropriate if we do it – with money borrowed from the Chinese of course. Another outstanding example of government logic at work.”

  10. willid3 says:

    if incomes had kept growing at the same rate as they did it the 1970s.

    http://www.businessinsider.com/nick-hanauer-ted-presentation-about-why-rich-people-arent-job-creators-2012-5#household-income-hasnt-come-close-to-matching-the-overall-economy-11

    so all of the ‘support’ for the ‘job creators’ has been going to the wrong ones, as they must be creating jobs in other countries.
    and in a capitalistic society, the only part that the top 1% can pay is maybe a start up. but after that, its all dependent on customers buying what ever is being offered. fail to make sales, leads to complete job loss. but we seem to believe that of we cut taxes those job ‘creators’ will start doing their part. but they are extremely slow, as they have had their tax cuts for almost a decade now. and still they haven’t exactly done any thing. but then it does sound like giving pay raises for doing nothing. and expecting more. doesn’t seem to work well. but then we dont give pay raises even when we get more, if you are employed.

  11. willid3 says:

    Rd, not sure that we would ever be able to use Chapter 11 (or 7) for banks. cause how would we handle deposits? they are debts owed to depositors, they are not investors, but they aren’t creditors either. and how does the FDIC work with it? does it make up for what ever shortfall (or haircut). but then does that actually end up hurting depositors as they get less from the court, and could creditors make demands on that FDIC payments to depositors? and understand, depositors includes not just individuals, but businesses too. and does it make it so that bank run will make a return? as depositors flee banks that have even a hint of trouble? and would we really want to have banks be unstable, because bank runs weren’t based on logic, but on emotions and the fear of loss of all money deposited. thinking a better choice would be to have a way to ‘nationalize’ a bank, in some procedure, like the FDIC does, only made much more robust to allow them to even handle TBTF banks. but only if a bank has hit some metrics that say it has really failed, but the lights are still on, but nobody is home

  12. willid3 says:

    spending and growth

    http://krugman.blogs.nytimes.com/2012/05/17/spending-and-growth/

    So Japan, which is spending heavily for post-tsunami reconstruction, is growing quite fast, while Italy, which is imposing austerity measures, is shrinking almost equally fast.

    yes that Japan that has been depressed for decades now. is much more dynamic than the US, Germany, and twice as much growth as Italy, who is implementing austerity.
    and where is the growth coming from? well it seems that they are rebuilding from that tsunami

  13. willid3 says:

    seems JPM is having trouble moving on from the debacle. and in fact its getting worse. heading to $3 billion.
    http://finance.yahoo.com/blogs/daily-ticker/getting-worse-why-jpmorgan-struggling-move-bad-trade-175817773.html

  14. Iamthe50percent says:

    willid3 , it’s simple. FDIC pays depositors their insured amount, then becomes the claimant in the bankruptcy.

  15. Singmaster says:

    @willid,
    ‘Job creators’ is a phony argument-a Frank Luntz wordplay.
    I worked in corp USA and made lots of $$, the kind of $$ that qualifies for ‘job creator’ status. I spent a great deal of my time figuring out how to do more with fewer people.
    To be honest, I never really noticed the Clinton/Bush tax cuts having an effect on our income.

    What I do recall is the pay raise we both earned in Mar/Apr/May of every year when we reached the salary cap for social security. It was like, wow, what happened here, a pay raise.
    Why the cap, I have no idea.
    Someone earning $110k a year salary pays higher tax rate than one with a $350k year salary.

  16. JoseOle says:

    Conan O’Brien and penis enlargement in the same list? Coincidence? Methinks not.

  17. willid3 says:

    Iamthe50percent , not sure that works. as the FDIC is basically insurance. but I suppose it might. insurance companies are among the most active litigators ever. because they become their policy holders and can sue those who caused the damage. now then does that mean they can sue the bank? and why would they, since under current rules, they can take over the bank, fire the executives, force creditors to take haircut, and sue the executives personally.

    and Singmaster thats been my take too. cause every time a politician wants to do some thing its about jobs. even if the legislation has nothing to do with it. so any time one of them opens their mouth and claims they are working to create jobs, we know its nothing but trying to get votes
    the original purpose of the cap, was that the vast majority of workers made less than that and it kept the amount of tax coming in at a certain percentage of all income. but now that the bottom 99% aren’t making the majority of all income, and the top 5% take in almost 40% of all income and pay a lot less of their income into SS, it makes it harder to keep the program solvent. even though for decades we have paid in many multiples of what was needed. mainly cause we knew in the 80s that there would be a huge bubble of people retiring. now all of the money had to go into treasuries (just like the ones sold to investors. only a little different). so those who seem to be wanting to change the bargain are really welching on that bargain, and making other investor very nervous, cause if they could welch on a bargain with owners of the country, whats to stop them from doing that with their loans?

  18. popham says:

    Indeed, other investor friends are avoiding this Facebook IPO like the plague; that it will rise
    to ‘stardom’ and then fade like a wilting flower.
    We’ll see.

  19. Mike in Nola says:

    More good news for Chanos: car inventories pile up in China.

    http://www.bloomberg.com/news/2012-05-17/china-car-dealerships-struggle-as-stockpiles-increase.html

    Also interesting is the FT Alphaville post about currency troubles. Barry may have already posted a link, but doing it just in case. The post again validates Chanos who said last year he thought the Yuan was overvalued, not undervalued.
    http://ftalphaville.ft.com/blog/2012/05/16/1002681/why-chinas-rmb-exodus-is-the-story/

    It is irritating in that there is no good way to short within IRA’s over the longer term. Short ETF’s “decay”. I tried puts, but you can’t go out very far, so even though I agreed with Chanos and was right, I’ll probably lose money.

  20. bear_in_mind says:

    HEADLINE: “71% Say Government Should Let Big Troubled Banks Fail.”

    QUESTION: Who, besides folks on the Wall Street payroll, are amongst the 29% who say government should NOT let big troubled banks fail?! I sure haven’t met any of them… and that’s regardless of political stripe.

  21. mathman says:

    overheard at the latest crisis meeting over the Greek situation (borrowed from Blazing Saddles):

    Taggart (German chancellor Merkel): I got it! I got it!
    Hedley Lamarr (new French president Francois Hollande) : You do?
    Taggart: We’ll work up a Number 6 on ‘em.
    Hedley Lamarr: [frowns] “Number 6″? I’m afraid I’m not familiar with that one.
    Taggart: Well, that’s where we go a-ridin’ into town, a-whompin’ and a-whumpin’ every livin’ thing that moves within an inch of its life. Except the women folks, of course.
    Hedley Lamarr: You spare the women?
    Taggart: Naw, we rape the shit out of them at the Number Six Dance later on.
    Hedley Lamarr: Marvelous!

  22. VennData says:

    Microsoft stops tech product imports because they patented … scheduling a meeting from a mobile device!

    http://arstechnica.com/gadgets/2012/05/microsoft-wins-us-import-ban-on-motorolas-android-devices/

    “…The present invention includes a mobile device which provides the user with the ability to schedule a meeting request from the mobile device itself…”

    http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=6370566.PN.&OS=PN/6370566&RS=PN/6370566

    Gates, Ballmer, and the Microsoft lawyers, patent trolls extraordinaire.