I linked to this song before, but now the actual music video is available. “Man or Muppet”, from The Muppets, one of my favorite movies this year. Of course, I love the Muppets.
Love it.
Um. How about the Angry Video Game Nerd reviews Michael Jackson’s Moonwalker for Sega Genesis? Profanity abounds.
Yeah, I’m low on content tonight. Feel free to add.
Filed under: Bits and Pieces | Tagged: michael jackson, muppets | 67 Comments »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1326.3 | 6.1 | 0.46% |
| Eurostoxx Index | 2455.9 | 34.730 | 1.43% |
| Oil (WTI) | 100.68 | 1.280 | 1.29% |
| LIBOR | 0.5531 | -0.004 | -0.63% |
| US Dollar Index (DXY) | 79.148 | -0.328 | -0.41% |
| 10 Year Govt Bond Yield | 1.96% | -0.03% |
Futures are higher this morning on strength in Europe and the Fed’s comments. To be honest, I found yesterday’s language in the FOMC statement to be equity-bearish. They committed to lower interest rates until late 2014, took down GDP estimates, and made scant mention of the recent signs of an accelerating economy. The Fed looks at economic indicators that are not made public, so we can’t know exactly what they are seeing. Perhaps their models are telling them that these recent strong data points have been spurious.
I like to listen to conference calls from companies reporting earnings. And while it is tough to quantify and model body language, it does give a view of the economy going forward. Apple’s report certainly speaks of a stronger consumer. The homebuilders have been increasing backlog and activity. United Rentals reported last night a 27% increase in revenues in Q4 and a utilization rate of 69% for FY11, a company record. While you can object that URI’s numbers are coming from a weak base, you can’t dispute the direction.
One thing is for sure, the Fed wants you out of Treasuries. They are giving you a good bid to exit the long end of the curve. They are telling you (through an explicit inflation target) that they intend for you to make a 0% real rate of return on the 10 year bond. They are paying you nothing to sit in short term paper. The Fed wants you buying real estate. They want you buying stocks. There is an old saw in the market – “don’t fight the fed.” And that may explain yesterday’s equity rally as much as anything. Heard on the Street this morning this morning interpreted the statement as “We won’t raise rates until the economy is really going.” And supposedly that gave equity investors a little comfort to put more money to work.
I guess it is time to figure out where the next bubble is going to be. 6 years of rock-bottom interest rates should be a good base for one. Farmland. Commodities. You could make the argument that long term govvies are in bubble territory already. If we start seeing levered Treasury strategy ETFs and structured notes, you’ll know we have crossed the rubicon.
In economic data this morning, durable goods orders were higher than expected at 3%. Initial Jobless Claims came in at 377k. EURIBOR / OIS continues to tighten, down to 78.5 basis points. 20 basis points could be considered “normalcy” in the European banking sector. Still, it has come in over 21 basis points in 6 weeks.
Filed under: Earnings Announcements, Economic data, Economy, Federal Reserve | 130 Comments »
iPad textbooks won’t replace textbooks soon. Heck, I can’t even get an iPad 2 so I can do demonstrations to our school support staff. At least, not yet. 😉
Did a webinar for the new Filemaker features. Had to agree to an NDA, but the demonstration of new features was extremely weak tea compared to what I saw at FileMaker DevCon this year. Alas, with the school merger pending, we may never do another FileMaker upgrade. Still, there’s not a better integrated DB and interface builder around. What, Access you say? Pthpht!
Does money really buy elections? Freakonomics says no.
A primer on 3D printing from TED:
Thomas Dolby talks about, and then performs, One of Our Submarines from his Sole Inhabitant Tour.
I’m a big Thomas Dolby fan. Golden Age of Wireless is a near-perfect album.
Speaking of which, I’ve posted this before but I’m going to post it again, because I love the song. Thomas Dolby’s “Oceanea”.
For anyone with a Spotify account, here’s the link for Thomas Dolby’s “Cruel”, one of my favorite songs from him.
That’s it for tonight. Please talk amongst yourselves. —KW
______________________________________________
And a bleg — please vote in my poll if you haven’t already. It looks to be very close between Newt and Mitt, though Mitt got a bit of a bounce from the debate Monday night.
— Mike
One more thing to spend time doing: Interactive map of Euro crisis
Filed under: Uncategorized | Tagged: elections, iPads, ipads, textbooks | 249 Comments »
Longer Run Policy Considerations
Big Picture: The Fed is on hold until late 2014. Previously they anticipated low interest rates through mid-2013. Inflation target is 2%. The Fed will continue to re-roll its investments into mortgage backed debt. Operation Twist will continue.
In this new age of transparency, the Fed is giving investors more of a look at their thinking.
More granular stuff: The Fed has taken down its forecast for GDP growth in 2012 and 2013. In November, they projected 2.5% – 2.9% GDP growth for 2012 and 3.0% to 3.5% for 2013. They now expect 2.2% to 2.7% growth for 2012 and 2.8% to 3.2% for 2013. So, while the general tenor of most observers seems to be more optimistic, the Fed is going in the opposite direction.
However, they took down their unemployment estimates from November, so that is a positive. What is interesting is that they stated the “normal rate of unemployment” range was 5.2% to 6.0%. Which means that once unemployment gets in the mid 5-s, the Fed will start tightening. At least that is how I interpret it. Don’t expect to see long-term unemployment rates similar to the ones Clinton (5.19%) and Bush (5.27%) enjoyed. 6 is the new 5. The Fed is at least paying lip service to the idea of preventing future bubbles.
The Fed introduced an inflation target of 2%. Note the 10 year is yielding 2%. Get the message? Nope, the 10 year rallied hard on the announcement. Stocks also rallied.
Filed under: Uncategorized | Tagged: Federal Reserve | 36 Comments »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1307.6 | -3.8 | -0.29% |
| Eurostoxx Index | 2412.5 | -19.590 | -0.81% |
| Oil (WTI) | 98.35 | -0.600 | -0.61% |
| LIBOR | 0.5566 | -0.003 | -0.45% |
| US Dollar Index (DXY) | 80.226 | 0.428 | 0.54% |
| 10 Year Govt Bond Yield | 2.05% | -0.01% |
Markets are mixed this morning, with the broader indices lower following Europe, and the Nasdaq up on Apple’s earnings. AAPL is up about 8% pre-market. Conoco Philips also reported good earnings this morning. United Rentals reports after the close, which should provide another data point as to the state of the construction industry. Construction / Housing has been the achilles heel of this recovery, and if that sector is turning around, the economy could finally be on its way.
I didn’t watch the SOTU last night (I always just read speeches), but it doesn’t sound like there was anything market-moving in it. Natural Gas is up a little, presumably on the lack of a production target. The US dollar is stronger this morning and bonds are up 1/3 of a point, presumably on Europe, not necessarily the SOTU.
Perhaps the timing of the robo-signing settlement was not a co-incidence. In the speech last night, Obama laid out a plan for refinancing underwater mortgages. The fine print will not be available for some time, and it will require Congressional approval. I have noted in the past that you have to get the originators on board with this plan, and put-back risk is the big hurdle. Put back risk means the government can decide after the fact that a mortgage violated underwriting standards and can force the originator to buy it back. Re-financing underwater homes will by definition violate underwriting standards. The government can tell originators that it will allow underwriting violations for this program, but there is nothing preventing a future administration from changing the rules. An originator makes exactly the same profit on a 80% LTV loan as they do on a 120% LTV loan. So why would originators take the additional political risk when the returns are exactly the same? They won’t.
The FOMC rate decision will be released this afternoon. I don’t think anyone expects a change in policy, but people will be interested in seeing if the the Fed takes note of the early signs of a turnaround.
Filed under: Earnings Announcements, Economic data, Economy, housing, Morning Report, stock market | Tagged: robo-signing | 67 Comments »
So, now that this weekend’s brouhaha is largely past us and the postmortem recriminations have been played out, complete with after-the-fact play by play and color commentary, I thought I would add my own observations about something that has heretofore been unremarked upon, and that is how third parties react to a perceived instance of a breach in ATiM etiquette.
I for one am very reluctant to play moderator or referee in the midst of a heated conversation between two other people, particularly by calling someone out, and especially as a public matter. (Ignore, for now, the fact that I am usually a participant and rarely a third party observer in such conversations.) Both personal experience and observation suggests to me that it rarely ends up being helpful, and often makes things worse, embroiling yet more people in the heat rather than cooling things down as intended. Perhaps a private e-mail, or brief “Come on, people” from a third party might be useful. But if that doesn’t work, I think letting things play out and having a postmortem later is likely to be less damaging than trying to intervene by taking people to task on the board.
This is a self-moderated blog, and in the first instance it means exactly that- each of us is expected to moderate ourselves individually, according to the rules that we all know. And I can say from personal experience that, having determined to one’s own satisfaction that one hasn’t done anything wrong, to see the repeated insinuation from third parties that one is out of bounds can be extremely grating, even if, in retrospect, there may be a point. This simply dials up, rather than alleviates, the heat of the situation.
Letting an inflamed situation play out is not the end of the world. What makes our discussion standards notable here is what we are striving to achieve, not the fact that we always and everywhere achieve it. If, in a given instance, we fail, then we fail. On to the next one and try again. And an after-the-fact discussion about it may well prove more valuable, or at least less damaging, than a heat-of-the-battle attempt to stop it. Active third-party moderation is not always, and perhaps not even often, the best approach.
My two cents.
Filed under: Uncategorized | 38 Comments »
You probably won’t want to watch the whole thing. It lasts over 2 hours.
In 2009, Casey Pugh asked thousands of Internet users to remake “Star Wars: A New Hope” into a fan film, 15 seconds at a time. Contributors were allowed to recreate scenes from Star Wars however they wanted. Within just a few months SWU grew into a wild success. The creativity that poured into the project was unimaginable.
The 5 Online Petitions that Prove Democracy is Broken. Like that was really necessary.
Coming up with stuff to link to would be a lot easier if the Net Nanny here didn’t block The Onion. Someone link to something from The Onion.
Will this be Apple’s First $40 Billion Quarter?
I miss Bloom County.
For you physicists and metaphysicists in the audience . . .
Click on it to actually see the whole thing. All right. That’s it for tonight. Just somebody link to something in The Onion.
— KW
And, by the way, the FAQ page is up. Look it over and let me know what you think–and feel free to add (or just leave it in a comment and I’ll add it either tonight or [more likely] tomorrow)!
— Michigoose
Filed under: Bits and Pieces, FAQ, Star Wars | Tagged: bloom county, cartoons, online petitions, star wars, Sunday funnies | 60 Comments »
HHS has been making a big deal about how “flexible” the essential health benefits requires are for states. Sure, it’s very flexible. They can choose from column A or column A1.
States would have the flexibility to select an existing health plan to set the “benchmark” for the items and services included in the essential health benefits package. States would choose one of the following health insurance plans as a benchmark:
States can modify coverage within a benefit category, but they have to cover items and services for the following 10 categories of care: (1) ambulatory patient services, (2) emergency services (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care.
So, states have the “flexibility” to craft a benefit package that is based on the existing plans in their state and must include a statutorily mandated list [Section 1302(b)(1) of the ACA] of benefits. States can tweak the specific benefits in each category but can not reduce the value of coverage. And God help you if you try, for example, to change a formulary to cover a generic vs. a brand name, or institute step-therapy in that prescription drug category.
As far as the ability to craft a unique policy, that ability just isn’t there. HHS admits as much in its recently released guidance.
Generally, according to this analysis, products in the small group market, State employee plans, and the Federal Employees Health Benefits Program (FEHBP) Blue Cross Blue Shield (BCBS) Standard Option and Government Employees Health Association (GEHA) plans do not differ significantly in the range of services they cover. They differ mainly in cost-sharing provisions, but cost-sharing is not taken into account in determining EHB. Similarly, these plans and products and the small group issuers surveyed by the IOM appear to generally cover health care services in virtually all of the 10 statutory categories.
The HHS analysis found that the differences among plans are minor. Some plans cover or don’t cover acupuncture, bariatric surgery, hearing aids, and smoking cessation programs and medications. So Mississippi can strike a blow for federalism by telling HHS, no, we’re not covering acupuncture.
Where there might be some differences now will be eliminated. Not every state mandates coverage for behaviorial health treatment. Now it is number 5 on the “must cover” list.
Basically, the differences will be on the edges, minor and will address how something will be provided. For example, pediatric dental plans may be wrapped into a medical benefit. Or they can be sold as stand-alone plans. That’s an issue that will be worked out on state-by-state basis. But I don’t think that makes it more or less “flexible” for states.
States also have varying definitions of the various mandated benefit categories. What “habilitative services and devices” isn’t necessarily consistent across state lines. But, in general, it’s for physical therapy (PT), occupational therapy (OT), and speech therapy (ST). Differences might be who qualifies (meaning what medical condition) and at what level of cost sharing for such benefits. I don’t consider that flexibility.
Not all states current mandate coverage for the 10 categories (mostly habilitative services, pediatric oral services, and pediatric vision services) . While HHS is considering how to best rectify this, the law and HHS are very clear on this point: they will be covered. How is TBD, but the guidance (linked below) lays out some options and basically tells state to pick an existing plan coverage, for example, the Federal Employees Dental and Vision Insurance Program, and graft it onto their “flexible” state plan.
States do have some flexibility within a benefit category, but only to a point. States can adjust benefits within a category subject to a baseline set as reflected in the benchmark plan.
Here’s the kicker: Section 1302(b)(4)(G) and (H) direct the Secretary to periodically review and update EHB. Translation. Those 10 mandated benefit categories can become 20 if we want them to be. Also, look for those categories to be more clearly defined through regulatory capture guidance. Want to make sure a plan covers a specific treatment? Gather data, hire a good lobbyist and you too can have your benefit become essential.
Full HHS guidance here. [Note: opens PDF]
And if you missed it, Sebelius was on the Daily Show to talk about the ACA. Bonus points for work-related Daily Show viewing. Link at KHN.
[Apologies to Mark for taking so long with this. ]
Filed under: Affordable Care Act, health insurance | 41 Comments »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1304.6 | -6.5 | -0.50% |
| Eurostoxx Index | 2410.3 | -31.180 | -1.28% |
| Oil (WTI) | 99.26 | -0.320 | -0.32% |
| LIBOR | 0.5591 | -0.001 | -0.18% |
| US Dollar Index (DXY) | 79.989 | 0.191 | 0.24% |
| 10 Year Govt Bond Yield | 2.05% | 0.00% |
Stocks are lower on brinkmanship over the Greek settlement talks. In spite of Greek worries, EURIBOR / OIS (a measure of stress in the banking system that is watched closely by professionals) has been in steady decline for a month now. It is currently 80 basis points lower than its post-crisis peak of 100 basis points in early December.
The Washington Post has an article on the potential robo-signing settlement with the large banks. The size of the settlement is said to be around $25 billion and liberals want it larger. It will supposedly include additional regulations on loan servicers, which could create loads of unintended consequences. Mortgage Servicing Rights are already pretty much worthless, and the big banks are exiting the business. Ocwen is refusing to advance principal and interest payments to bondholders until it recoups its advancements. The administration could end up shooting itself in the foot if it goes overboard with the servicers.
Diamondback is settling with the SEC for $9 million. Diamondback is a $2.5 billion hedge fund in Stamford CT and is run by ex SAC traders. It will be interesting to see if the Feds get info that leads back to Stevie Cohen.
Japan is running a trade deficit? Apparently, yes. Part of it is due to the nuclear disaster and the earthquake, but it is also due to a strong currency and an aging population. Japanese companies are succumbing to the same globalization forces we are and are moving production overseas. The yen has been strengthening for 30 years, bottoming out at 277 in 1982. It is now 77.
No major economic news today. Apple will report after the close.
Filed under: Uncategorized | 149 Comments »
Hi all,
We’re about an hour from debate time and I wanted to expand upon something that came up in an earlier debate. Rick Perry voiced what I thought was a dangerous line of attack on Newt. Here’s the quote: “If you cheat on your wife, you’ll cheat on your business partner, so I think that issue of fidelity is important.” It’s an interesting challenge and one worth expanding upon.
Let’s take fiscal conservatives as an example. I consider myself a fiscal conservative in both the personal and political senses of the world. We bought our house in 2005, when the real estate world seemed to have gone mad. People were getting all kinds of crazy mortgages, which really pissed me off as it meant I couldn’t afford the kind of home I hoped to have. We held to a firm rule. 10% down. 15 year fixed mortgage. It would mean sacrifices, but it made fiscal sense. I’m glad we were careful as despite our care, we had financial troubles. The place needed a good deal more work than anticipated and so we blew through our savings, I took out a $15k improvement loan, and we were still running a bit short. [I’m fiscally conservative, but also make mistakes.] We bore down, built up some minimal savings, and paid off that loan 7 years early. We’re working to pay off my wife’s student loans next year (way early after having consolidated), and I want to pay off the mortgage by the time the boys exit elementary school (that’d be about 3 – 4 years early). I don’t want to be in a position of needing a paycheck ever again. I’ll note that I’m lucky in that I’ve had a relatively secure position during the last 4 years and my wife’s freelancing has taken off.
I’m also a fiscal conservative in the political sense. For me, being a fiscal conservative means that expenditures should match income. Cutting taxes without cutting expenditures is the act of a fiscal fool. So is increasing expenditures without increasing taxes. So, Medicare Part D was reckless. Expanding Medicare to include a drug benefit? Great idea! Doing it without touching FICA rates. Terrible idea¡ If you want federal taxes to be limited to 20% of GDP, fine. Then propose a budget that meets that.
Now, shocks occur. I am horrified by the present fiscal situation, but it beats a second great depression. It flips my personal stance (short term pain for long term gain). Ironically, the opposite seems to be the case. Short term deficits and long term cuts. The alternative is Greece (or the UK, which slipped back into recession).
That’s a somewhat lengthy example. Let’s bring it to politicians. Example A would be Rep. Joe Walsh (R-Illinois). Owes child support, a condo foreclosure, and tax liens. How can anyone take such an individual seriously? I’ll also put Charlie Rangel in the same class. For all his tap dancing, the attacks on Al Gore for his mansion hit home.
I’m curious as to other analogues. Do apparent contradictions between a politician’s personal behavior and their political positions matter to you? Are there any cases of where your vote has been affected by a politician’s personal actions?
And most important of all. Would you like to grope Sen. Rand Paul? 😉
BB
Filed under: politics | 15 Comments »
Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojkt
All Things in Moderation 