Another rain storm here tonight so it's a late arrival. No real time for a finely crafted post, so here is a linkfest for review. Probably will not be a quiz.
Wednesday Links
Stuff well worth a look.
The Reformed Broker captures the struggle all players are dealing with right now:
Do the Push and Pull
Better than expected retail sales? But Belgian bond yields are shooting higher! Industrial Production and Capacity back at pre-crisis levels? But Spain is the next Italy which was the next Greece which was the next Iceland!
Tony of Macro Story has been on the credit markets better than most I read and tonight's recap looks at some currencies as well: Market Recap Wednesday November 16, 2011
Mr. Phil Pearlman has an important take on what lies beneath the psychology of the market and I agree 100%:
The Markets and The Deep Layer of Chronic Diffuse Anxiety
Beneath the surface anxiety though, there is another deeper layer of anxiety that is unconscious and much more difficult to pin down. It is experienced as a general low grade chronic state of worry that does not seem to really be attached to any one concrete thing.
Now read the rest.
Robert Sinn, The Stock Sage, has some good observations on how this week has gone so far, fake outs and shake outs: Bodybags
Leigh Drogen has an interesting take on how social media, largely Twitter, is changing things big time in many ways:
How To Make Friends and Find Investors Without Speaking To Anyone
A lot of people knock social media as ridiculous because people have online “friends” who they aren’t really friends with. In many cases this is true, but Twitter is different. It’s about sharing thoughts and experiences, so that people can get to know who you really are, and connect with you in the real world.
While Facebook is the 21st century Yellow Pages, Twitter is the 21st century telephone. Which one do you think is more important?
I am not sure where the time went, but I am a little late getting to the blog. A few things to look over.
They Seem Confident At 7:35 am this morning I saw this headline over at Yahoo Finance and I knew I had to capture it for later in the day: They seemed confident of a Wall Street up day! Why not? It is Monday after all.
I figured this would happen so I sent the link home; here is the address I copied: http://finance.yahoo.com/news/European-stocks-gain-ahead-of-apf-1007474471.html?x=0
When I punch it in now this is what I get: US housing data weigh on world markets Interesting, yes? I love this kind of stuff.
Throttle Linkage Way short on time so here is the obligatory linkfest. Use the comments to give me a writing idea, I need inspiration!
In what will come as a surprise to precisely nobody, a new study by McKinsey has confirmed that sellside analysts were "typically overoptimistic, slow to revise their forecasts to reflect new economic conditions, and prone to making increasingly inaccurate forecasts when economic growth declined."
Indeed.
Stoneleigh of The Automatic Earth has another wonderful essay up that relates to what can happen to trade given deflation and credit collapse: The Rise and Fall of Trade
Over at the Keg boards a member used this quote from "Bladerunner" and it has been sticking with me all day long:
"I've seen things you people wouldn't believe. Attacked ships on fire off the shoulder of Orion. I watched c-beams ... glitter in the dark near Tanhauser Gate. All those ... moments will be lost ... in time, like tears ... in rain. Time ... to die."
Make sure you scroll down and check out the fishing pictures from today that I posted. What a great time. No work and no things economic was so relaxing, except when the fish were biting!
Links There was plenty of stuff out there, much of it very important, but I cannot pretend I am even into it this evening. Here are some stops you should make: -Housing Doom picked up a Businessweek article that showed agency paper (FNM, FRE) trading at 106 cents on the dollar, that's right, 6 cents over full value! No idea what this means and too tired to bother.
-FED to go QE 2.0 to the tune of 5 Trillion? Why not, the first attempt has worked so well I can only imagine how great the second will go. Surely this means gold will collapse.
-It is always something from out of the blue that starts a big panic, so here is Romania for you.
-Did budget director Orszag quit because he works for idiots? Probably. Seems a recurring theme as of late.
-Well, we have been told all this would happen, but did you bother to read?
-Don't click if you do not want to get depressed, but here is Alabama waves rolling in with additives.
Friday Night Bonanza I came across a ton of cool stuff tonight so this is going to be fun!
Best of YouTube How about a spider crab molting its shell in time lapse? COOL!
Clips Tuesday and Wednesday night I read the book "The Last Great Fight" by Joe Layden which recounts the story around the Mike Tyson vs. Buster Douglas fight back in 1990. The book was amazing and I really can recommend it. It brought back memories; I watched that fight live and was in total shock. Here is the last 3 rounds with the 8th round knockout, I mean knockdown by Tyson and then the brutal end in the 10th:
Wow.
The intro to John Carpenter's "Christine". Gives me the chills:
Rock Blogging We need a little music to really get this weekend going and so here it is.....
Watchtower asked about the April Wine song "I Like to Rock", which I had never heard. The song was so great I can allow the crap at the end to slide:
That was a great one, thanks Watchtower!
Lurker would like a little "Blinded by the Light" from Manfred Mann and I had not heard this one in a bit so here it is:
Nice.
Gawains was looking for some KISS and Firehouse, but that got me in mind of my favorite KISS clip, a live version of "I Was Made for Loving You":
What a great live version! Plus plenty of hot ladies in the audience, not that I was looking, I am married and all.
Ok, maybe a little old school heavy rock overload so far. How can we change it up?
Maybe slow it down with Bon Jovi and "Always"?:
Your welcome ladies!
This song can be complex to play, and my Dad played a nasty good one on 12 string guitar that was amazing. I wish he had played electric! Anyways, here is Dolly Parton with "Jolene":
Great stuff.
Two more then I have to go, I was paddling up a river all day, but I did have a paddle, obviously!
How about a little "Rocky Top" for Tennessee:
Also very good on a 12 string!
Last call! Have a great weekend! Now what to close the show with????...
Ok, I had this one over a year ago (9/26/08) but it really is a great tune and so I send you off for the night with Adrenalin and "Road of the Gypsy":
"You know it don't come easy.." You said it brother!
Short again on time this evening. Going back to work is not that easy! Some small items and a few links.
Last Post Reader Anon got my film quote question correct, it was from "The Last Dragon" which is a really fun martial arts film.
New reader Zaloett stopped in all the way from Spain! Hello there!
Linkage A few items that caught my eye.
Reader and fellow blogger C-T found a local Louisiana paper that had a great slide show of the big oil spill down there. It is well worth a look as local press coverage tends to be better than national coverage: Photos and Slide show of Gulf Oil Spill Great find!
I had mentioned last night that Argentina was a more apt fit when comparing deflation/inflation models to the US than the old school German one of the dumb Zimbabwe one. A comment on Zero Hedge pointed to this essay from the summer: "The Royal Scam" Notice the graphs and the time frames of bond market usage. A total default and Argentina was able to go back for funding after just a few years at low rates. And yes, the whole thing happened almost overnight.
I am either suffering from delayed sun stroke or the world is ending as I think I agree with Paul Krugman in his blog today titled: Greek End Game I know, shocking!
From the department of totally missing the point, via Barry Ritholtz: US Greek Bailout Costs? Tiny. So size matters? What about a debate about the bailout in general? It is super cheap to bailout Bernie Madoff, but is it right? Not the same I know, but in the words of Jedi Grandmaster Yoda: "Size matters Not!".
This past week seemed to go by very slow. As such I am lacking the energy to do some kind of major post that will illuminate the future for all time or something to that degree. I will give an answer to a question posed in the comments section, rip off the best works on the web via linkage, and then reinvigorate with an entertainment section sure to please one and all.
Asked and Answered From time to time the comments section is visited by one of the Anon posters. The one I am talking about offers a great contrarian view than most of what I write and usually will ask great questions that I will think about for some time. Last night was such an instance.
Anon@7:58 posted:
Here's a question, when is the last time you were optimistic, I mean truly optimistic about the state of the US economy? My guess is the answer is never, hence the reason some (namely I) question your impartiality.
For me, I was optimistic in 01, staid in 02-03, concerned in 04, gloomy gus pessimist 2005-07. Since then, I have slowly become more and more optimistic. Despite the massive, massive govt interventions, we still have gone through the most jarring economic dislocation in decades. We are so much closer to the bottom now than we were in 2005, and this makes me much more optimistic now than I was then.
Now if you are not familiar with Anon that comment may have seemed a touch rough, but I actually like his/her up front take and there are some points here that I would like to discuss.
When was the last time I was optimistic on the US economy? I would say the 1998-2000 time frame. I was fresh out of college, working at one of the hottest biotechs in the industry, gene discovery was running at a clip unseen which promised new drugs, the Internet was not new but the promise it offered sure was, a projected budget surplus was a good thing I thought, the dollar was king crap of turd mountain, and everyone around me (and myself to some extent) were riding the stock market wave higher.
So what happened?
Well, all those genes I and many others found were great but never really translated (pun intended!) to real drugs. My firm was losing about 400-700 million a year but was valued at something like 8 Billion dollars!
Cisco was almost worth more than Japan or something and suddenly that made no sense anymore.
All those stocks up in the nosebleeds came down hard and many got toasted (I sold all my options $5 from the all time high! HA!).
Pets.com closed which was scary.
On some of this I am trying to be funny, but what happened was a huge bubble burst. Soon I was informed I would be out of a job and had to find another. Many faced the same thing. The rest I think you probably know how it goes.
In summary, I wanted to learn how the whole thing happened and that was how I learned about things economic and especially about bubbles.
And not even 2 years later I started to see some of the same signs in housing here in Massachusetts. I applied lessons learned and figured the easy money from Alan Greenspan was an attempt to make the same kind of bubble the dotcom was in another form to rescue an economy that was facing the worst recession since the Great Depression (and yes many were writing that then!).
So Anon, you say you turned more optimistic in 2001, but I was the opposite. I thought it would take a long time to work off all the malinvestment. Little did I know a bubble replacement was in the works.
Now do not confuse macro views with short window views. I knew housing was going up and would continue to until a blow off top, so you could say I was "optimistic" on home prices, but pessimistic on the ramifications to the economy. That's why I was piling into gold and silver from 2002-2004.
I am not optimistic now. Anon may well be right that we are near "the bottom" and I may even agree. What I think we will differ on is how long we stay at the bottom. Just because you have stopped falling does not mean you are going to go up. I do not have time to cover all the reasons for my views, if you read regularly you know the imbalances of which I speak
Anyways, I hope that both answered Anon's question and was worth a read in the process. I do not pretend to know everything I just offer my take.
Linkage Trolling the Internets (both of them) for the best reads out there so you can all save time.
More and more of the American middle class are joining the race to the bottom, entering the ranks of the poor every day. Food Stamps and other entitlement programs have replaced the food lines of the Great Depression.
To which I responded:
Why is it nobody gets this? They all say "In the Depression there were food lines" well WTF do you call millions on food stamps? I call it moving the line out of sight.
The blogroll on the left (on the right for those of you in the southern hemisphere) has plenty to read on a news filled day as well.
Friday Night Entertainment I was sidetracked most of the day exchanging emails with a trader friend of mine who was playing TNA for the morning pop then sold off to avoid the after 11am downdraft. TNA is an ETF so get your mind out of the gutter! Anyways, plenty of good fun this evening.
I am Not Making This Up Sometimes real life is better than make believe!
Argentinian President Cristina Fernandez has told a gathering at her Presidential Palace that pork is even better than Viagra for spicing things up in the bedroom - and credited a satisfying weekend with her husband to the meat. "I've just been told something I didn't know, that eating pork improves your sex life," she said in a televised speech to the leaders of the Argentinian meat industry, "I'd say it's a lot nicer to eat a bit of grilled pork than take Viagra." Speaking of a weekend spent with her husband after eating the meat, Fernandez said, "We were in high spirits the whole weekend... I'm a pork fanatic."
For Valentines day gentlemen, may I suggest some flowers, some candy, and some bone-in pork chops? You never know!
Bookshop Loyal reader and literary sage Gawains suggested some works this week: -"Exiles" by Ron Hansen which looks very compelling -"Imbibe" by David Wondrich and with a title like that it is going in my Amazon basket!
And no I do not get anything from Amazon, no affiliation.
I will throw in a book passage:
"In addition to believing that my brother's book deserves to be read, there is another reason for having it published. Frankly his story is incredible. No matter how I try, I can't believe it. I hope its publication creates the possibility that someone will. For myself, I can accept only one aspect of it-but that I accept completely: To Richard, this was not a work of fiction. He believed, without question, that he lived each moment."
Funny Picture Naked Capitalism offered this choice picture: Be sure to drink your ovaltine!
This is running long, so here we go....
Rock Blogging Take a chance, come on and dance Guys grab a girl, don't wait, make HER TWIRL It's your world and I'm just a SQUIRREL Trying to get a nut to move your butt To the dance floor, so yo what's up C&C Music Factory!
Where to start? Ok, when I was young I used to see those TV commercials that had those huge compilation albums for sale and the titles would scroll on the screen and soundbites were played. I always loved the song by the Moody Blues, "Knights in White Satin" and it was on every one of those albums:
Nice!
Some requests? Gawains wonders if I like country music, and I of course grew up on folk and country music and my Dad's 12 string guitar! Try out David Allen Coe with "You Never Even Called Me by My Name":
My position is I don't care what the ladies call me, as long as they call me!
I had never heard The Police tune "Synchronicity" and lets say I found it interesting:
My wifes dream man has been Sting for years!
From a late comment from last post I was challenged to post a song with just some lyrics to go on. I KNEW one song right off the bat, but I also weaseled out and did a search and now I am stuck. Best guess, is Michael Damian's "Rock On" but the older version is better I think (plus I had help!). Try out David Essex and "Rock On":
Thanks!
Editors picks? Ok.
In line with the "not in one calendar year repeat unless special circumstances" rule, enjoy the greatest metal singer going it alone with "Tears of the Dragon":
I still get chills on that one.
Last Call!
Get loose, get crazy and get wild with White Snake and "Still of the Night":
It would figure that after about a week of having trouble finding compelling things to write about I would stumble upon about 20 things today that I wanted to spend time on! I am way short on time after getting home late and I have a hard stop at 8:30 to watch the opening game of the NFL season. I am very excited about this year in football and I think it could be one of the most competitive seasons in memory. My call tonight, Pittsburgh Steelers 17, Tennessee Titans 10 in a very physical game featuring two of the leagues best defenses.
I will probably do a weekend post because I have a few philosophical musings I want to get into writing. I am going to do a full Friday night post, so get your requests in for pictures (clean ones), film clips, book passages, music, you name it, I find it.
Items of Interest Long time readers know I hate "link" posts, but that is about all I can muster tonight.
Barrick Gold Observations The strange move by Barrick gold to end hedges, but pay current contracts in cash (not bullion delivery) by raising money via a stock offering can only be termed "puzzling". Two items on this: From Jesse's Cafe: Barrick Capitulates Recounts the hedge contracts held by Barrick along with JP Morgan gold shorts and ties it all together
How In the World is this Even Possible? Without hard numbers and projections for review, I have to say up front this story could be another "scare" job to get the kind of fee hand the banks demand in every area. That said, this story DEMANDS more attention: Proposed Debit Card Regulations Could Cause 1,000 Banks and 2,000 Credit Unions to Fail Excerpt:
According to Michael Moebs, an economic advisor for many banks and credit unions stated that Rep. Maloney’s legislation would effectively kill overdraft services, which could cause up to 1,000 banks and 2,000 credit unions to fold within the next two years. The reason for these potential failures is that 45% of banks collect more in overdraft fees than they make in profits.
I find this to be absurd, yet it is probably true. Can anyone shed more light on this?
You May be Right, I May be Crazy This market has humbled anyone that has a brain and made heroes of anyone blindly buying equities by the boat load. Just like 1998-2000! Fun stuff.
The Housing Time Bomb wraps up all the dislocations across 4 major market indicators that no longer have any correlation at all which begs the question "what the heck is going on?": Something Doesn't Add Up Excerpt of the authors bottom line:
None of these correlations add up folks. The market is trading like it has 5 different personalities. You might as well just call it Sybil these days. Today alone: Sybil acted bullish, feared deflation, feared inflation, and traded the US currency like its not worth the paper its printed on(which it probably isn't). Sybil's price action is extremely unstable and inconsistent folks. This should concern all investors regardless if you are bullish or bearish.
The questions the author raises would be a great exercise in thought for any interested.
Home late from a work related function, but some links are in order.
More Bearer Bond News Oh boy, now the Italians want the SEC to make a ruling on the bonds authenticity. Market Skeptics has the goods.
Krugman Is, and Always was a Keynesian Clown Mish delivers the knockout blow with this story. Dead to rights line from Krugman himself in August 2002:
The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
Game over. The housing bubble was both done on purpose and finally exposes Keynesian economics for what it is: Useless and Dangerous
Other Stuff A good friend of Economic Disconnect has plenty of content up tonight, so why not check out Illusion of Prosperity?
