10 Thursday AM Reads

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By Barry Ritholtz - February 9th, 2012, 10:00AM

My (belated) morning reads:

• Why Wall Street Should Stop Whining (Rolling Stone)
• To Envision Dodd-Frank’s Future, Look to Its Predecessor SOX (DealBook)
Andy Xie: The outlook for the global economy is gloomy and leaders lacking vision are to blame (Caixin)
• Black Helicopters Hover Over Economic Reality (Bloomberg) see also Bernanke Says 8.3% Unemployment Understates Weakness in U.S. Labor Market (Bloomberg)
• The insiders are selling heavily (Market Watch)
• Wall Street Places Big Bets on Troubled Securities (DealBook) see also Goldman Snags Old AIG Bonds (WSJ)
• Records tumble at Christie’s art sale (Reuters)
• States With Top Foreclosure Rates Push U.S. Mortgage Accord to Completion (Washington Post) see also States Negotiate $26 Billion Agreement for Homeowners (NYT)
• Albert the (financial) Populist (Alphaville)
• Ferraris Out of Fashion in Italy as Police Nab Tax Evaders (Bloomberg) see also Honda Aims to Reclaim Its Luster (NYT)

What are you reading?

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U.S., Banks Agree on Foreclosure Pact

Source: WSJ

Why @GSElevator Is a Fake

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By Barry Ritholtz - February 9th, 2012, 7:18AM

When the Twitter handle @GSElevator first launched, I followed it for a while, but soon thereafter unfollowed. Some of it was funny — very funny — but it read less like overheard true conversations, and more like what someone imagined would be overheard in a Goldie elevator.

I hadn’t thought about it until a reader sent me a link to a hilarious story about a roadshow gone terribly wrong. It confirmed my suspicions that this was being written by a young aspiring sitcom writer, and not a banker. More on that in a moment.

@GSElevator author is supposedly a “former first-year analyst, now working in Goldman’s investment banking and capital markets divisions.” I highly doubt that for a variety of reasons, starting with the fictitious parody-like way they read, rather then genuine conversation.

Then there is the math: Think just for a brief moment about every elevator ride you have ever taken — you are either with a large group of people, where no one speaks — or with a smaller group where there is some conversation. Even if we expand the geography to include offices, hallways, lobbies, dining rooms, glimpses of such explicit and inappropriate speaking come along infrequently. Certainly not two or three times per day. Even if a team of 1000s of eavesdroppers are listening, transcribing and mailing in the Tweets to a central editor, there simply are not that many offhandly humorous statements made in banks in New York / London / Hong Kong. It would quickly exhaust the global supply of that rare earth mineral hilarium.

All good bankers understand Risk Factors — its explicitly detailed on all their documents. Consider the risk of getting caught. One or two of these overheard snippets would help triangulate who the eavesdropper is — but post 100s and the risks of getting found out go up exponentially. Goldie’s security people could geolocate the Tweeter to their exact longitude and latitude, floor and desk seat in a day. Too many people would see these clips and be able to tag the 3rd man in the elevator as the source. Hence, they are most likely fictitious.

The final piece of evidence comes with this column: Your Average Business Trip…Gone Horribly Wrong. It screams professional (or aspiring professional) comedy writer, attempting to follow the Twitter trail blazed by Justin Halpern’s @ShitMyDadSays to sitcom glory. It is clever, well written, and rather hilarious. It also so obviously identifies its author to the rest of the folks in the tale that he would immediately be outed. That is before we even get to the publication site, Total Frat Move — a tell this is no Goldman alum.

We can deduce that at best, this is someone who worked in a large office — law firm, bank, etc., and has an ear for ddialogue and a sharp sense of humor. My money is on an MBA drop out, who has enough jargon to pass to laypeople, but uses it awkwardly enough that it fails the sniff test.

Regardless, Your Average Business Trip…Gone Horribly Wrong an outrageous and funny piece of writing, an excellent calling card for networks looking for an original new series. It is simply way too funny to be written by a real banker.

Good luck, @GSElevator with your career in Hollywood — I look forward to your first take-no-prisoners  movie/sitcom. Just be forewarned — they are as blood thirsty in LaLa land as anyone who works for the Vampire Squid.

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Update 1, Feb 9, 2012 10:41am:
The Epicurean Dealmaker reached the same conclusion 6 months ago . . .

Update 2, Feb 10, 2012 1:22pm :
@GSElevator responds here
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Source:
Roadshow Gone Horribly Wrong
By gselevator 23 days ago

http://totalfratmove.com/782530

See also:
Tweets that feed into Wall St elevator gossip (FT.com)

Investment Banking Meet the Goldman Sachs Banker Behind @GSElevator  (Dealbook)

Are Positives Starting to Dominate ?

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By Barry Ritholtz - February 8th, 2012, 9:06PM

The folks at ISI are suggesting that the economic and policy data is beginning to become overwhelmingly positive. I am less sanguine then they are, and I disagree with a few of the bullet points (#1 especially).

However, it is a pretty long list of things that seem to be improving — or at least not getting worse:

• Housing starting to recover
• Labor market improving
• Credit expansion unfolding
• Low dollar
• Low rates
• Pent-up demand
• US mfg renaissance
• US energy sector booming
• Double-dip fears minimal so far this year
• Inflation receding around the world
• Europe financial strains have eased
• Liquidity is building in the world economy, eg, corporate cash
• There’ve been 83 stimulative policy initiatives announced around
the world over the past 5 months, eg, Indonesia cut rates
• The Fed has rates on hold at zero and is doing Operation Twist
• ECB is scheduled to further expand its balance sheet on Feb 29
by as much as + €1t
• There are no particular problems at the moment such as Japan
disasters, Thailand floods, supply-chain disruptions, gasoline
price spikes, and debt ceiling crises

What do you think? Is the data objectively getting better, or is this merely a selective list of positives?

~~~

What say ye?

10 Wednesday PM Reads

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By Barry Ritholtz - February 8th, 2012, 4:30PM

My afternoon train reading:

• Lunch with Kenneth Rogoff (FT.com)
• Facebook already went public, you weren’t invited (Fortune)
• Kant and Hume on Causality (Stanford Encyclopedia of Philosophy)
• Here’s Why It May Be Time To Think Defensively (WSJ)
• Cancer rates triple among New York police officers who responded to 9/11 (Telegraph)
• In Piracy Debate, Deciding if the Sky Is Falling (NYT)
• The rise and fall of lap dancing (BBC)
• Gartner Says Western European PC Shipments Fell 16% in Q4 (Gartner)
• How Massage Heals Sore Muscles (NYT) see also How to live 100 healthy years (Market Watch)
• Blogosphere, We Get It… (Floating Path)

What’s on your tablet?
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Ranks of Low-Risk Corporate Issuers Thin

Source: WSJ

SEC Keeps Giving Wall Street Banks A Break

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By Barry Ritholtz - February 8th, 2012, 2:30PM

Source:
S.E.C. Is Avoiding Tough Sanctions for Large Banks
NYT, February 3, 2012

5th Anniversary of the Sub-Prime Crisis

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By Barry Ritholtz - February 8th, 2012, 12:00PM

Click to enlarge:

>Source: Bianco Research

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Happy Anniversary! Here we are, exactly 5 years to the day from the beginning of the credit crisis.

Jim Bianco dates the crisis as formerly beginning on February 8, 2007 when HSBC’s Household International announced huge losses due to subprime lending. HSBC had to restate its 2006 earnings significantly lower. Bianco adds that while most people were asking what a subprime loan was, HSBC was “patient zero” of the crisis.

To underscore this was indeed the start, HSBC ended this lending unit March 2009, literally hours before the stock market bottomed.

Best Disclaimer Language Ever

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By Barry Ritholtz - February 8th, 2012, 10:30AM

I like a legal department that has a sense of humor. This is the standard disclaimer that Contango Oil & Gas Company (MCF) includes with their quarterly earnings reports:

Lawyer Stuff

The future is unknowable. We have good intentions but all of our projections and estimates will be wrong, and could be materially wrong. Wildcat exploration is expensive, speculative and potentially dangerous. An offshore spill or explosion would be enormously expensive. We have insurance but it may not be enough. You could lose your entire investment. Don’t be lazy – read our 10-Q’s, 10-K’s and press releases, and if you lose money – please no tears.

“Don’t forget about risk-free T-bills in your portfolio…After inflation and taxes you’ll likely only lose 5-10% of your investment.”

- Contango V.P. Investor Relations

Great stuff!

Hat tip Aurelian Management

~~~

Contango_PCP2012

10 MidWeek AM Reads

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By Barry Ritholtz - February 8th, 2012, 9:30AM

My early morning reads:

• What Game Theory has to do with Market Volatility (Bloomberg)
• Bernanke-Led Economy Shows Critics Wrong About Fed (Bloomberg) see also To Senators, Bernanke Defends the Fed’s Dual Objectives (NYT)
• Retail: The decline of the shopping mall (CS Monitor)
• Blue Chips Hit a Yearly High (WSJ) see also Stop The Presses, Dr. Doom Is Turning Bullish (WSJ)
• Proposed settlement with banks over foreclosure practices dealt a setback (Washington Post)
• Another Year of Fear for Municipal Bonds (WSJ) see also BlackRock, Fidelity, Schwab Signal Demand for Corporate Bonds (Bloomberg)
• Time to close the carried-interest loophole (Washington Post)
• Self-Inflicted Blindness: The Austerity Threat To Innovation (Forbes) see also The hazards of crisis management (The Economist)
• Apparently, Richard Nixon was a Leftist: 1971 SOTU Address (Credit Rightdowns)
• The iPhone is a nightmare for carriers (CNNMoney Tech)

What are you reading?

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It’s Time To End the Greek Rescue Farce

Source: Spiegel.de

What Are the Industrials and Transports Suggesting?

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By Barry Ritholtz - February 8th, 2012, 7:00AM

Dow Theory — a study of the relationship between the Industrials and the Transports — are suggesting a potential inflection point is nearing.

A move above 12,900 in the Dow Industrials would surpass the April 2011 highs, and the bulls would like to see that confirmed by the Trannies getting over 5630.

As we see from the indices via The Chart Store below, both the Industrials & Trannies are on the verge of that breakout. Just note that Classic Technical analysis requires you wait for the breakout/breakdown confirmation, rather than anticipate it.

Caveat: I am not a Dow Theorist, and this is a grossly oversimplified explanation. For more details, Wikipedia has an excellent primer on the major tenets of Dow Theory. Or check out Richard Russell’s The History of the Dow Theory.

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Click to enlarge:

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Source: The Chart Store

Two-for-Tuesday PM Reads

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By Barry Ritholtz - February 7th, 2012, 4:30PM

My afternoon train reading:

• Americans Gaining Energy Independence With U.S. Emerging as No. 1 Producer (Bloombergsee also Messages show conflict within NRC after Japan earthquake and tsunami (Washington Post)
Advice for Advisors: Stop Talking and Start Listening! (Financial Sense) see also Mastering the Mad Scramble for New Clients (Registered Rep)
• Target at Post-Bailout GM: Earning $10 Billion a Year (WSJ) see also Bush Tells Dealers He Avoided ‘Gamble’ in Bail Out (Bloomberg)
• Bernanke: Fed Policy’s Encouragement of Risk Is by Design (Real Time Economics) see also Investors Place Their Money on Fed (WSJ)
• Is Facebook accurately counting its daily active users? (CNet) see also Facebook “Jumps the Shark” Interview with Michael Whalen (IRA Analyst)
• MF Trustee Traced $105B in Cash Movement (Bloomberg) see also Challenges for MF Trustee (WSJ)
Bartlett: Tilting the Budget Process to the G.O.P. (Economixsee also The Business Cycle Throws The GOP A Curveball (Forbes)
• Beast With Four Tails: Milky Way Devouring Neighboring Dwarf Galaxies (Science Daily) see also Galaxy Hosts 100 Billion Planets, in New Estimate (WSJ)
• Romney Finding Support Where Women Hold Sway (WSJ) but see Are Republicans About To Commit Medicare Suicide? (TPM)
• Truth, lies and Afghanistan (Armed Forces Journal) see also What goes on in the mind of a sniper? (BBC News)

What are you reading?

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Dollar’s China Conundrum

Source:WSJ

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