My morning reads:

• Fed Ties Rates to Joblessness, With Target of 6.5% (NYT)
Hoenig: To protect banks and the taxpayer, we must insist on strong capital for all banks (
• Volcker Spots a Problem (Economix) see also Rigged Libor With Police Nearby Shows Flaw of Light Touch (Bloomberg)
The Rules of behavior for corporate finance and M&A investment bankers (The Epicurean Dealmaker)
Eisinger: Is Stevie Cohen (SAC) the “Michael Jordan” of the investing world or the Lance Armstrong? (ProPublica)
• The strange world of negative interest rates (Coppola Comment)
• A Giant Statistical Round-up of the Income Inequality Crisis in 16 Charts (The Atlantic)
• Rally in PC Stocks Is a Yawner. Google Fiber Is a “Disruptor” (Barron’s)
• Maps App for iPhone Steers Right (NYT)see also Google Releases Map App for iPhone (WSJ)
• ‘Seinfeld’ masters a new domain: Twitter (MarketWatch)

What are you reading?


The Mighty Consumer Is on the Ropes

Source: WSJ

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.

22 Responses to “10 Thursday AM Reads”

  1. craig.r.jackson says:

    I would think that the best way to regulate banks is to regulate the rating agencies. Ratings on bank assets should be subject to a federal agency approval in the same way a drug requires an FDA approval. If an asset rating isn’t FDIC approved, then it cannot be listed as an asset.

  2. re..

    • Eisinger: Is Stevie Cohen (SAC) the “Michael Jordan” of the investing world or the Lance Armstrong? (ProPublica)


    Expert network -

    Expert networks are primary research firms that connect buy side investors, consultants, and business decision-makers with industry experts. Consultations between …

    Expert networks: Linking expert mouths with eager ears
    – The Economist
    THE inside information she gave him was “absolutely perfect”, a former hedge-fund executive testified on June 6th. Winifred Jiau, a consultant for Primary Global …

    is a Story, dramatically, under-Reported.\.

  3. Bob is still unemployed   says:

    I’ve been reading a bit about how advertisers track you and tailor ads to your activities. There are two particularly egregious methods that raise my level of concern.

    The first method uses a TV set-top box with a camera and a microphone.

    Verizon has filed a patent for a DVR that can watch and listen to the goings-on in your living room. In the application, the company proposes to use the technology to serve targeted ads appropriate to whatever you’re doing in the, uh, privacy of your own home—fighting, cuddling, or hanging out with your cats.

    The second method exploits a known security issue in Microsoft’s Internet Explorer, a security issue that Microsoft has indicated they do not plan to fix.

    A security researcher has published yet another reason not to use Internet Explorer for anything, under any circumstances: it can track your mouse cursor movements, even when it’s minimised.

    Affecting all versions newer than IE 6.0, and with no plans for a fix by Microsoft, the bug is demonstrated here (not being an IE user, this El Reg hack hasn’t tested the game).

    As the notice from states, the exploit “compromises the security of virtual keyboards and virtual keypads” – often used as a “secure” login that defeats keyloggers.

    “An attacker can get access to your mouse movements simply by buying a display ad slot on any webpage you visit,” the company writes. “The vulnerability is already being exploited by at least two display ad analytics companies across billions of webpage impressions each month. As long as the page with the exploitative advertiser’s ad stays open—even if you push the page to a background tab or, indeed, even if you minimise Internet Explorer—your mouse cursor can be tracked across your entire display.”

  4. AHodge says:

    re simon johnson “volcker spots a problem”
    im a huge fan of both
    but simon may be missing some points and also volcker intent
    you need to
    1 fix accounting its in the toilet and mark it
    then the markets probably not allow huge leverage
    2 withdraw the guarantee from the non bankin opaque derivatives ete etc crap of the giant mutants we used to call banks–this is real volcker rule- and i think he himself favors, Volcker was shocked obama named what was put on the table after him! even more problematical as the review gusts it partially. that will also chop back funding of leverage
    3 put in more equity once you know wtf it is
    see point one and make that cyclical– more reserves as assets get overvalued
    –manage reserve requirements cyclically like smart countries say china do

    i am not against size limits
    but i am for light touch rules based regulation– and think first what the best system would be
    lets not just decree size unless we have to
    try the above three first?

  5. AHodge says:

    from simon
    QUOTE The assets they buy look like a sure thing until the moment they collapse in value. This is the classic and future recipe for systemwide panic and potential collapse. The only solution to prevent this is to limit the size of the largest institutions and the activities they can undertake.UNQUOTE

    the first two sentences right on and highlights the what crap accounting is and why reserves need to be made procyclical. IF i am right– his last sentence is dead wrong, there are several other good things to try first.

  6. Bob A says:

    Trulia’s latest American Dream survey reveals consumer optimism about homeownership is rebounding

  7. RW says:

    The Nonsense About a Demographic Crisis
    One of themes that recurs endlessly in news coverage is that the United States and other countries face a disastrous threat to their living standards as a result of a falling ratio of workers to retirees. This is one that can be easily dismissed with some simple arithmetic.

  8. willid3 says:

    Liebor shows that you cant let regulated regulate them selves. not sure why we keep falling for that scam

  9. RW says:

    The Federal Reserve’s Shift from a Time- to a State-Based Policy Rule: Will It End Our “Lost Decade”?
    …Let us try to imagine a world in which it does not work–in which, three years from now, unemployment is still above 6.5% and forecast core inflation still below 2.5%/year. In that possible future world, the Federal Reserve will be holding $3 trillion more of long Treasury and MBS securities than it is holding today. The private sector (plus foreign governments) will be holding $2 trillion less of long-term Treasury and MBS securities than they are holding today …

    That possible future world is not a future world in which unemployment is still above 6.5% and forecast core inflation is still below 2.5%/year.

    Thus the possible future world three years from now in which the economy is still stuck more-or-less where it is now–and in which people then are really glad that they hunkered down, took no risks, and socked nearly all of their portfolios in zero-yielding safe Treasuries and cash–has, as of 12:30 PM yesterday–vanished from the spread of possible future worlds that can be rationally anticipated as of today. …

  10. VennData says:

    Ban on loud TV commercials takes effect today

    How DARE the government tell these alabaster white pillars of the community (with sick wives, children, mothers, that they must tend to by hand every morning when they wake up and every night before they doze off) what to do! These are once-proud, now-bitter, broken-to-the-bone entrepreneurs who just recently started up these stations with the money they saved fishing golf balls out of water traps at the country club ponds and reelling them to the older generation who knew what was what and what a dollar was worth. Now these pious, God-fearing, charitable folks get one last chance at the American dream and LOOK AT WHAT THEY”VE BEEN HANDED.

    You know our nation is going down the drain when we tell these earnest, modest souls to be quiet. December 13th? I’ll say, unlucky 13 for the media creators in this once-great land, score one more for Team Obama and their gag orders.

    I’ve never heard anyone ever complain about commercial being too loud? Have you? well, not over that racket on CNBC all weekend long. at least.

  11. Mike in Nola says:

    RW: The obvious answer to any demographic problems is to let in a lot of young immigrants. Throughout the 19th and 20th centuries the waves of immigrants, e.g. Irish, Germans, Jews and Italians helped to boost long term growth. I suppose Asian immigration with prove the same.

    Some of the hardest workers I’ve seen were illegals working for contractors after Katrina. A goodly number of them working legally could easily solve any funding problems for SS and Medicare.

  12. DSS10 says:

    RE:”You don’t need a weatherman to know which way the wind blows”

    Republicans Deemed Too Pro-Rich, 57% in Poll Want Change

    “….For the Republican Party to broaden its base, they will need to change either what they value, or how they talk about what they value,” said J. Ann Selzer, president of Des Moines, Iowa-based Selzer & Co., which conducted the Dec. 7-10 poll. “What they are doing now is not winning.”

    Among all Americans, 57 percent say the Republican Party needs a major overhaul, while 30 percent say modest modifications are needed and eight percent say no changes are necessary. The survey of 1,000 adults has a margin of error of plus or minus 3.1 percentage points on the full sample…”

  13. “…A goodly number of them working legally could easily solve any funding problems for SS and Medicare…”

    some(many?) of those “illegals” are actually supporting SSI/Medicare-aid via Payroll Taxes deducted from their Checks (when they receive them)…

    “…But, immigrants aren’t flocking to the United States to mooch off the government. According to a study by the Urban Institute, the 1996 welfare reform effort dramatically reduced the use of welfare by undocumented immigrant households, exactly as intended. And another vital thing happened in 1996: the Internal Revenue Service began issuing identification numbers to enable illegal immigrants who don’t have Social Security numbers to file taxes.

    One might have imagined that those fearing deportation or confronting the prospect of paying for their safety net through their own meager wages would take a pass on the IRS’ scheme. Not so. Close to 8 million of the 12 million or so illegal aliens in the country today file personal income taxes using these numbers, contributing billions to federal coffers. No doubt they hope that this will one day help them acquire legal status — a plaintive expression of their desire to play by the rules and come out of the shadows.

    What’s more, aliens who are not self-employed have Social Security and Medicare taxes automatically withheld from their paychecks. Since undocumented workers have only fake numbers, they’ll never be able to collect the benefits these taxes are meant to pay for. Last year, the revenues from these fake numbers — that the Social Security administration stashes in the “earnings suspense file” — added up to 10 percent of the Social Security surplus. The file is growing, on average, by more than $50 billion a year…”

  14. Mike in Nola says:

    Mark: I know about the payroll taxes, but was referring to the cash payments many received.

  15. willid3 says:

    a modest proposal. instead of sequestration (like the fiscal this time) why not punish the politicians instead?

    Ideally, the punishments meted out should begin reasonably and eventually proceed to levels that are both cruel (so that it really hurts them) and comedic (so that we can all enjoy it). So, let’s say that their failure to act should trigger a massive reduction in their take-home pay, right off the bat. After another week of inaction, they lose their office funding. A third week costs them their family health benefits. A fourth week costs them their privileges. After five weeks, they get punched in the face every day. And we continue from there, until their punishments are so severe and their public humiliation so acute that they are desperate to come to an agreement

  16. Mike,

    I hear that, too..

    though, you being “Legal”, How many ‘steps’ can you take w/o Paying Taxes?

    they, the “Illegals”, are Walking similar Paths (Jurisdiction(s))

  17. RW says:

    Mike in Nola: Agreed, in fact I would go further and say that immigration is one of the main reasons the US will not become Japan.

  18. Hammer of Thor says:

    Will be interesting to see if this is just noise or the start of a new trend.

  19. Mike in Nola says:

    I totally agree with Peter Bright about MSFT’s peculiar method of seppuku:

    I suppose it is a product of MSFT”s legendary corporate warfare. One is willing to sell competitors the shovel (or is it the rope?) to kill off its own company’s other products. Paul Thurrot long ago said that the best thing that could have happened to MSFT was for the justice to department to break it up. You would then have had three companies who would have been much more agile and already dominated their markets: Office, Servers and Windows OS itself. Instead you have infighting which holds them all back, e.g. Windows Phone would have made a great tablet OS, but Sinofsky nixed that because it wasn’t invented by his division. On top of that, he forced Windows phone to be completely rewritten so it was more compatible (tho not compatible enough) with Windows 8. “Windows Everywhere” This delayed release of the new version by a year and they are now essentially occupied fixing the inevitable annoying bugs that accompany new code. Nothing as bad as Apple maps, but they could have been working on new features instead.

  20. Marc P says:

    Re: The Rules of behavior for corporate finance and M&A investment bankers

    I love how bankers always talk about how tough it is and how tough they are. Like wearing a $4000 suit to a lunch meeting and eating foie gras is tough. Like “oh my god, if I get fired I’ll be so poor I’ll have to share a helicopter to my house in the Hampstons” is tough.

    The phrase “center of their own attention” comes to mind. Harden the fuck up.

    Meanwhile some guy with a GED in Fresno is working three manual labor jobs to pay for his uninsured daughter’s dialysis, without a whimper and without swagger.