Asking the Right Question

Since September started the drive home has been murderous. I mean just unreal stupid. If there was an index fund for automotive repair for the Northeast Massachusetts area I would commit my entire net worth to it as this month it seems everyone is hell bent on wrecking their cars (right at 4:30pm of course) and causing a mess of every road in the state. If things are this bad now, when the snow starts I may have to quit my job and daytrade! That said, super short post tonight as I have no time at all to do anything.

Why I Stopped Buying Metal Miners
I hate to make blanket statements, so understand I am speaking for myself. There are much better investors out there that can pick and choose the best metal miners and they do great, I was never one of them! I did have a few winners, but mostly what happens is you get a nice run up in gold or silver, the miner you have exposure to moves up a little, then management makes a monster acquisition, blows a earnings quarter, or some other calamity and while the metals are up 15% your miner is down 20%. It gets annoying fast.

The Golden Truth has a tale of such a firm today:
AngloGold Ashanti Throws In The Towel On Its Massive Gold Hedge
Punch up AU versus GLD and you will see what I mean. I am not knocking all miners, just saying I stopped buying them a while ago.

Asking the Right Question
Jake over at EconomPic asks the most pertinent question about government interventions (in this case currency, but in reality across all interventions).

First off, a little color.

The Bank of Japan massively intervened in the Yen causing by selling around 20 Billion dollars worth of them, and of course Economic Disconnect does not play fiat currencies either because of extreme volatility!

For fun, check out the dueling headlines:
Japan intervenes to weaken yen; more to come
versus
U.S. industry and lawmakers urge action on China's yuan

And if you want more fun, what if China was forcing Japan to devalue? (via Tim Duy):
Yen Intervention, or Why Japan is Now Carrying China's Water?

Now I have always been clear I am not an FX man, I don't like to deal in the imaginary too much. Whether Japan's move today can work will depend on how much follow through they continue with and how much traders want to go with them. Early reports (since changed tremendously) reported that Japan did this in concert with several central banks knowledge and help, but the story now is that Japan did this all alone and told nobody. I leave it to the reader to figure out for themselves which to believe.

Ok, back to EconmPic's question:

First of all... I am many things and a currency expert is not one of them...

With that said... I completely understand why Japan is intervening in the currency markets for economic purposes (a strong yen is hurting exports), BUT isn't the ability to literally print an overvalued piece of paper the ultimate prize?

For years, counter-fitters have printed worthless paper in the hopes of using it to buy things of value, but with Japan they can do this legally! Why not open up the printing presses and use that new currency to buy goods of value from abroad (I'm not talking other currencies, I'm talking REAL assets)?

To me this will result in at least one of the following (though, I'm sure there are 1000 more):

-A weaker Yen (i.e. the goal)
-Inflation (i.e. the best thing that could happen to Japan so that monetary policy would actually work)
-Nothing to the Yen or to inflation, which means you got a bunch of real assets... for free.
What am I missing?

Oh man what a great way to frame the question!

If you have been reading this site over the years I have covered this question (not quite in this form) many times. Rather than offer it again, I would love to see the readers answers in the comments here or over at Jake's site. I may give a written form of my answer in tomorrow's post. I think this question is of the utmost importance if you want to understand the way the world works. I know I can count on some good stuff.

Have a good night.

Just a Few Notes

That Ravens-Jets game may have been the ugliest football contest I have ever seen. Insane penalties called all over the place, sputtering offenses, and turnovers galore make for a somewhat boring, if funny, game. Of course the loss should focus the Jets very much, just in time to host the New England Patriots! Thanks a bunch guys!

Odds and Ends
-Silver is making the break I was hoping for. The rest of the week will be important, but crossing the $20 mark is a solid move.

-I thought ultra low rates allowed the banks to "grow" their way out of losses? Maybe so, if you are one of the big 6 banks! Smaller banks are still having real trouble:
More banks missing TARP dividend payments
One sixth of banks are delinquent.

-On a related note, after endless programs to help housing, we have this:
Bank Repossession of Homes Sets New Record in August
Welcome to the housing recovery!

MUST SEE Video
If you ever watch a clip here, make it this one!

One of the funniest things I have ever seen, via Geekologie:

It is only 13 seconds, so watch all the way to the end! Guaranteed belly buster!

Have a good night.

Make Way for Monday Night Football

It was chilly again up here and there were huge thunderstorms passing by last hour! Where did the summer escape to?

Make Way for Monday Night Football
Short on time tonight because there is a Monday Night Football double header and the very important Ravens vs. Jets game is going on at 7pm. This is a pretty big game for week 1 and it should be a real tilt!

Just a couple of notes:

-The big news was that banks can continue with massive leverage and insufficient capital to back up any losses. Why this was news I have no idea, did anyone really think anything was going to com out of this?
Basel Regulators to Bolster Bank Capital Requirements
They actually changed this headline from the time I sent it home, before its read:
Basel Boosts Bank Capital Ratios, Firms Get Until 2018 to Comply
2018? What a joke.

-As I have been long saying, the sentiment right now is one of extreme complacency and overall bullish moods. Everyone talks a big game on how they are bearish, but that is not how they are using their money. This is a key point! Pragmatic Capitalism had a great post up today that shows where things are (referencing Eric King):
Mutual Funds are "All In"

Eric King posted this interesting chart showing mutual fund cash levels. According to King mutual fund cash level has declined to its lowest levels ever:

You’re likely familiar with the myth of cash on the sidelines, however, if mutual fund managers are any sign of bullishness it’s clear that they’re quite bullish. The last two times we witnessed cash levels near these levels were directly before the 1999 market implosion and the 2008 market debacle. Surely it’s unwise to use any single indicator to make market decisions, however, this is one macro indicator that is worth noting.

The numbers don't lie! Who is bearish?

Have a good night.

Sunday Steaks with a Side Order of Football

The season has begun! Plenty of excitement today already in the league.

Steak - It's Whats for Dinner
I was cleaning out the freezer last week and I saw that I still had two enormous bone in ribeyes and two filet mignons from Allen Brothers! These are superb steaks and they are wet aged to perfection. I took them out Friday night to thaw for today in the fridge.

After the early games were over, it was Big Steel Keg's time to shine. I set up a big pile of lump charcoal, lit the fire in several places, opened the vents to 100% and let the lava eruption commence. After about 20 minutes I had the searing temp of 650-700 degrees stable.

Here are the steaks in the packaging:

Nothing fancy here, coat them with sea salt and pepper and brush with olive oil:

These things were so tender I had to be very careful not to rip them!

On the keg they go! I cook 5 minutes per side, then I start flipping them every 3 minutes. The steaks are huge, almost 2 inches thick so it does take a while to get them cooked up. Here are the finished products:

While the steaks were resting (you do rest your steaks right?) I threw on a foil pack with some asparagus. 8 minutes is all it takes to steam them perfect. Here is my dinner plate tonight:

Only the bone was left when I was done!

These things are unreal good, a real treat for NFL opening day!

NFL Week One Observations
-I was shocked at how fast the Patriots defense was! All those young kids are quick! They hit like tons of bricks as well. I was very surprised indeed. The offense looked great as well. Do not allow the final score to make you think the Bengals were ever in this game, most of those points were allowed by a time burning prevent defense to get the game over. The Jets are next week and I am feeling a bit better about the New England chances.
-The Texans might have just broken out to the big time. A complete victory against the Colts was something they have been missing for years. I did pick this game correct, BTW.
-The Falcons look like they may have some serious issues on offense, though playing against the Steelers defense can make it look that way for sure. Huge win for Pittsburgh. I picked this one wrong.
-The Raiders were totally unprepared for week one, big surprise.
-The Jaguars beat the Broncos and that was a surprise. I picked this one wrong as well.
-The late games are in progress and what happened to San Francisco? Arizona is having issues as well.

My picks will get better after a few weeks.

I Robot
Well I could not leave this one out:
Robotics breakthrough: Scientists make artificial skin
Unreal.

Have a good night.

NFL Opening Weekend

The wait is over, NFL football has arrived!

September 11
Today is September 11th and I think everyone can remember what that day was like for them. I remember many things about that day. I knew something was going to be very wrong when I was waiting for one of my favorite writers morning note on the markets, and it was not on The Street.com at the usual time. Bill Meehan never wrote that update, or anything ever again.

Kid Dynamite has reposted an email he sent out in the days following and it is worth a read as it is very moving:
5 Years Later
and
I Remember

While names like Bin Laden, Zawahiri, and Atef were about to become well known, I knew all about them already and I knew exactly who was responsible. I had read the book The New Jackals and was not shocked at the degree of murder these maniacs would pursue.

Spare a few moments today to think about all the people that lost so much.

2010 NFL Opening Weekend
It is time!

Exciting sports weekend with the NFL and tonight is the Saturday Night race at Richmond in NASCAR where the drivers will be fighting to get into the NASCAR post season final 12.

I was a late comer to football. I only started watching it freshman year in high school. Better late than never, and I love it!

Here is how I see things this season as of now. I like to do this kind of thing after all teams have played 4 games, I am much closer to being right then! Still, here is my outlook for this year.

z = division winner
x = wild card

AFC

East
1-z New England Patriots 10-6
2-x NY Jets 9-7
3-Miami Dolphins 8-8
4 Buffalo Bills 6-10

North
1-z Baltimore Ravens 11-5
2-Pittsburgh Steelers 8-8
3-Cincinnati Bengals 8-8
4-Cleveland Browns 4-12

South
1-z Indianapolis Colts 12-4
2-x Houston Texans 9-7
3-Tennessee Titans 8-8
4-Jacksonville Jaguars 5-11

West
1-z San Diego Chargers 10-6
2-Oakland Raiders 8-8
3-Denver Broncos 7-9
4-Kansas City Chiefs 5-11

NFC

East
1-z Dallas Cowboys 11-5
2-x New York Giants 10-6
3-Washington Redskins 8-8
4-Philadelphia Eagles 8-8

North
1-z Minnesota Vikings 12-4
2-x Green Bay Packers 11-5
3-Chicago Bears 8-8
4-Detroit Lions 3-13

South
1-z New Orleans Saints 12-4
2-Atlanta Falcons 10-6
3-Carolina Panthers 7-9
4-Tampa Bay Buccaneers 4-12

West
1-z Arizona Cardinals 10-6
2-San Francisco 49ers 9-7
3-St. Louis Rams 6-10
4-Seattle Seahawks 4-12

Notes:
-Everyone loves the Packers this year but the Vikings are still the team to beat in the NFC North
-I hate the NY Jets
-I hate the NY Giants
-I overestimate the New England Patriots, I really think they will go more 8-8 or 9-7 and will miss the playoffs
-If the Texans do not beat Indianapolis in week 1, their chances for the post season go way down
-Derek Anderson will do very well in Arizona
-The Bears could be a big surprise this year
-The Jets will be less than advertised
-The Ravens have a real shot at the Superbowl
-By seasons end, the Raiders will not be a team any playoff possible team will want to play

Week 1 Predictions
While I am not a great stock picker, by week 4 my NFL picks are almost crazy on target! If you are the betting sort, I am sure I have helped you out over the years!

I already picked the Saints win.

-Titans 24, Raiders 20
-Giants 28, Panthers 13
-Texans 27, Colts 24
-Broncos 17, Jaguars 16
-Falcons 21, Steelers 17
-Dolphins 28, Bills 13
-Bears 31, Lions 20
-Patriots 48, Bengals 45 (I think the Bengals may win but I won't make that my pick!)
-Buccaneers 13, Browns 9
-49ers 20, Seahawks 7
-Packers 38, Eagles 24
-Cardinals 27, Rams 17
-Cowboys 24, Redskins 20
-Chargers 31, Chiefs 14
-Game of the week is the Monday Night contest between Baltimore and the NY Jets.
Ravens 27, Jets 24

Almost time for football!

Have a good night.

Friday Out Loud

We had to put on the gas fireplace tonight, it is pretty chilly!

Awesome game last night as the New Orleans Saints defeat the Minnesota Vikings 14-9. All the press was how the game was low scoring but I was focused on how the Saints were able to run inside against the top run defense in the league. That would scare me more than the usual aerial show! Full NFL post tomorrow.

Week Ends
Ok, maybe I have been a bit negative this week, so I will lay off the economics tonight. I could hardly do better than Mish on this item from today anyway:

Instant Insanity
Willem Buiter, chief economist for Citigroup arguably provides another example of why shares of Citigroup are sitting in the gutter at $4 a share in spite of trillions of dollars in bailouts to banks.
The fact that Buiter entertains "innovative and unorthodox" measures such as "expiring currency" proves he is off his rocker even though he states "the mere fact that something has not been done before often is sufficient grounds for not doing it now."
Any chief economist, anywhere in the world, should be able to come up with better rationale than that.

There is plenty more where that came from so check it out.

Friday Night Entertainment
Yeah, this is going to be a good one, probably a long one too! I was inundated with requests so I will apologize up front if I cannot get to everything!

Greatest Invention Ever!
Well maybe not the greatest, but close! I submit the Nut Wizard (get your minds out of the gutter!):

The acorns in the yard do not stand a chance, and yes I have already tried it! I love it!

Disturbing Move in the Robot Revolution
I find this item very disturbing:
Robots capable of 'deceiving humans' built by crazed boffins
Oh No! From the story:

"We have developed algorithms that allow a robot to determine whether it should deceive a human or other intelligent machine and we have designed techniques that help the robot select the best deceptive strategy to reduce its chance of being discovered," says Arkin, proudly.
"We strongly encourage discussion about the appropriateness of deceptive robots to determine what, if any, regulations or guidelines should constrain the development of these systems," adds the prof.
So there you have it - conclusive proof that robots are quite capable of lying to or otherwise deceiving their fleshy masters. Don't trust the machines. 'We do understand there's a downside to this'

Remember, these things start small and innocent and build.

Odds and Ends
Various items that could be worth a look.

-An artificial kidney getting closer?
-Do you know to whom the horse Bucephalus belonged?
--A great write up on Anterograde Amnesia:

“I don’t remember things,” Henry explained to the unfamiliar female interviewer. She seemed very curious about how he spends a typical day, and about what he had eaten for breakfast, but his efforts to summon the information from his mind were fruitless. He could easily answer her questions regarding his childhood and early adult years, but the indefinite expanse of time since then was bereft of memories. In fact, from moment to moment Henry feels almost as though he has just awakened from a deep sleep, with the fleeting remnants of a dream always just beyond his grasp. Each experience, dull or dramatic, evaporates from his memory within a few dozen heartbeats and leaves no trace.
For over fifty years Henry has lived with anterograde amnesia, a form of profound memory loss which prevents new events from reaching his long-term memory. As a result his only memories are those he possessed prior to his amnesia, and the small window of moments immediately preceding the present.

Much more at the link.
-The 15 Hottest Hollywood Actresses that have strict No Nudity clauses. Sorry guys! (Note, link is a little edgy and NSFW)

Video Killed the Radio Star
Stuff to watch!

Mike Tyson's first fight after his loss to Buster Douglas was against Henry Tillman. Now the fight was not supposed to be hard, and it wasn't, but I LOVE the sarcasm on display by announcer Larry Merchant. Skip to the 3:20 mark, watch Tillman get KO'd, and then Merchant yells out "SURPRISE!!!!!"! Classic funny:

Love it.

I really love the film "The Mask of Zorro" and check the scene from the 1:40 mark to 3:10 for my favorite part:

Epic.

If you have not seen "Zombieland" yet you are missing out. Zombie Kill of the week?:

Was that a baby grand piano?

Rock Blogging
In the end, it is about the tunes is it not? Quite a few requests for the show this week, but not all can make it. What will we see tonight?

Reader C-T was looking for some Counting Crows and "Anna Begins" which is weird because I have this album but could not remember the tune! Very nice one indeed:


Lurker requested "Please Come to Boston" by Dave Loggins and why anyone would want to come here I have no idea, but the song was pretty cool and I had never heard it before:


Watchtower was maybe "Dreaming" about Blondie front woman Debbie Harry and this is a nice version live from the Glasgow Theater:

Debbie Harry can visit my dreams anytime!

Ok, this is a direct ripoff of a tune over at The Illusion of Prosperity, but he is used to it and I do so LOVE Lacuna Coil! Try out "Our Truth":

For more, a nice cover of Depeche Mode's "Enjoy the Silence". Sweet!

Quite a few requests for CCR this week! I thought I had played all their tunes by now, and all are so great. I searched the sight, and "Long as I Can See the Light" has yet to make an appearance:

Guess I've go that old travelin' bone!

Only two songs left! I am always excited to do the Friday night post, but I hate when it ends. I could do this all night! Still, it is what it is!

Let get it going with Heart showcasing what real vocal talent can do with "If Looks Could Kill":

Live no less!

Last call! Time to close the show! Grab a girl, a drink, or the mouse and get ready!

You need some bluesy, heavy metal, rock out tunage? I have you covered with Black Sabbath and N.I.B.!:

That song is sick as all GET OUT!!!!!

Have a good night.

It's Time for the Bottom Line

Some local drama today and it turned quite chilly as well. No need to remind the regulars, tonight MY world champion New Orleans Saints open the season against the Minnesota Vikings. I will have a full NFL preview post up Saturday, but this game is tonight. This will be a short post so I can catch the game.

I know the Vikings feel they are the better team after last year, and they even might be. If this was week 8 I think the game goes for the Vikings. It is week 1, and the preseason cannot get you ready for the offensive firepower that is New Orleans, especially at home. I am calling for Saints 31, Vikings 21.

Friday night is tomorrow and I do not know if you folks think I write the entertainment post way in advance or what, but requests are considered all the way until Friday night at about 7pm.

Massachusetts Emergency
This morning Tom Brady, the quarterback of my co-favorite NFL team New England Patriots, was in a moderate car accident. All reports state he is fine and he was at practice and did the full day's work. The local channel 7 News had SEVEN on the scene reporters at the corner where the crash happened (at 6am remember) tonight at 6pm! They all covered various angles of the story! This was big news indeed.

It seems a nut job in a minivan ran a red light at high speed and Brady's car collided with it. It was a red minivan, driven by a NY Jets fan (kidding!) with a driving violation record that is 4 pages long, as reported by channel 7. This driver was driving so fast and so reckless he almost ran over a 70 year old lady in the crosswalk who was with her dogs. This guy is in big trouble.

I hope Brady is ok, but these things tend to take a few days to affect you. What a mess.

It's Time for the Bottom Line
I like to poke fun at headlines, use sarcasm as my medium for creation, and highlight the hilarity that is our economic mess. Tonight I am low on time and lower on patience (long week!) so I just want to hammer one thought home and then I want some answers.

How long until this recovery happens?

Now most readers here are probably more of the mind that any recovery has been weak or not arrived at all. I am asking the other 95% of the world this question.

Case in point, this mornings "awesome" initial jobless claims. Coming in at only 451,000 this was cause for celebration. Keep in mind 451,000 initial would still indicate job losses, and certainly not real job growth. What is the consensus view?:
Hopes rise as jobless claims fall, trade gap eases
New filings for jobless benefits tumble to two-month low
WTF? Still looking for hope? At this stage in the recovery this number needs to be lower, much lower. From Calculated Risk the following chart of initial claims (click for larger view):

Hello! Anybody home?

At the peak of the last UE spike, initial claims ran just about at 500k. During the jobless recovery the number drifted around 450k. When construction and other jobs were created by the housing boom the initial number ran closer to 320k. I would also point out the Hurricane Katrina spike in initial claims was much smaller than what we are running all the time now! So here I am wondering again, where is this recovery? Where is it? It is late in the game to still be looking at second derivatives and hoping for more. It's getting old, it really is.

I would like to point out that last weeks numbers were revised up, and this weeks number was based on plenty of guesswork as 9 states did not report numbers due to the Monday holiday. I kid you not. Estimates were used instead! This did not make it into the release, but made the rounds shortly after via Bloomberg. This is unacceptable. You can read more about the number here:
Nine States Did Not File Initial Claims Data Due To Labor Day, Hundreds Of Thousands Of Estimates In Data "Beat"
BLS BS
Now perhaps next week this all gets sorted out and today's number was very close to correct. It would not change my point at all.

I do not want to go on about many items that are "screaming" recovery but only when viewed by comparison with the worst numbers. At this point the recovery should be gathering steam and running full on, not slowing down, which it is. That is the bottom line to borrow a phrase from The Housing Time Bomb.

The stock market is a mess and makes as little sense right now as it did back in 2007. Corporate profits are better than they have been, but that was accomplished by cost cuts and extremely favorable cost pressures. Many scream stocks are cheap based on XYZ criteria, but I have zero interest in the overall market unless it gets 20% lower which I think is fair value for where the economy is now and looking ahead.

This week I learned that:
-Deflation is over
-The Double Dip is officially dead
-The stock market, ALWAYS a LEADING indicator, says old highs on the way
-Jobs will come roaring back any day now
-Money is leaving the stock market, but this is bullish as the chumps always pull their money before huge rallies
-There is a Santa Claus

Overall a positive week. I guess I need to cheer up!

Have a good night.