Morning Report

Vital Statistics:

Last Change Percent
S&P Futures 1374.7 -15.5 -1.11%
Eurostoxx Index 2392.5 -5.9 -0.25%
Oil (WTI) 101.65 -1.7 -1.61%
LIBOR 0.4692 0.000 0.00%
US Dollar Index (DXY) 79.92 0.034 0.04%
10 Year Govt Bond Yield 2.03% -0.02%
RPX Composite Real Estate Index 170.61 -0.1

Slow news day.

Equity futures are lower on the back of Friday’s lousy employment report. Bonds and MBS are rallying, with the 10-year again flirting with a 2% yield. European markets are closed for the Easter holiday, so volumes will be light.

Friday’s employment report showed an increase in 120,000 private sector jobs and a drop in the unemployment rate to 8.2%. The reason for the drop in unemployment was due to a drop in the labor force participation rate, which has fallen from 64% to 63.8% since December. These are the 99-ers who have exhausted their unemployment benefits and no longer count as part of the labor force.

Alcoa kicks off Q1 reporting season tomorrow after the close.

Bites & Pieces (Passover/Good Friday/Easter Edition)

 

Mark shared with us his Italian Jewish version of Passover soup last night (and I’m looking forward to trying it, Mark!); I didn’t know about the split over rice.  The things you learn on this blog!

At any rate, here is my take on Matzoh Ball Passover soup (which you won’t have time to make for tonight, but there’s always next year!) and a few Easter recipes for your viewing pleasure.


Chicken Soup with Matzoh Balls

For the soup (which I usually make a day or two ahead; basically I make chicken stock since I remove all of the solids):

  • 1 3- 4 lb chicken (or I often use a bunch of chicken thighs instead)
  • Kosher salt
  • 4 celery stalks, roughly chopped
  • 2 large carrots, roughly chopped
  • 1 onion cut in eighths
  • 2 leeks, thoroughly rinsed and roughly chopped
  • 3 garlic cloves, peeled
  • 4 sprigs flat-leaf parsley
  • 3 sprigs dill
  • 1/2 tsp peppercorns
  • 2 bay leaves

Rub chicken (if using whole chicken) inside and out with salt and let sit for about 15 minutes.  Rinse thoroughly, place in a large stockpot and add water to cover by three inches.  Bring to a boil over high heat and skim off foam until it stops appearing.  At that point, add the rest of the ingredients, reduce heat to medium low and simmer until chicken is falling off the bones.

Remove the chicken from the pot and remove the bones, placing them back into the soup–save the meat for another use.  Simmer for another hour, then strain all solids out through a couple layers of cheesecloth, cover the soup and refrigerate until the fat on top solidifies and can be removed.  Wise and experienced cooks will keep this schmaltz wrapped in the refrigerator for wonderful uses later.

For the matzoh balls (this part of the recipe is from a genuine Jewish grandmother who lives in NYC):

  • 4 eggs
  • 1/2 cup seltzer
  • 1 tsp salt
  • Dash black pepper
  • 1 cup matzoh meal
  • 1/2 cup melted shortening (or schmaltz)

Beat the eggs, then add the seltzer, salt and pepper.  Add the matzoh meal and shortening, mixing well.  Cover and refrigerate overnight.

Put a large pot of salted water on to boil, then wet your hands in cold water and form walnut-sized balls with the matzoh dough.  When the water comes to a boil add the balls and simmer, covered for 45 minutes.  Do not remove the cover until done.

The last line of the e-mail when she sent me the recipe:  “If they are good I get all the credit, if not it’s yours.  Enjoy!”


Lamb with Yogurt Sauce

What is more traditional than lamb at Easter?  This is one of my favorite ways to fix it.

  • 1 5 – 6 lb leg of lamb
  • 4 garlic cloves, thinly sliced

For the marinade:

  • 1 tbs garlic, minced
  • 3 tbs dried oregano
  • 1/2 cup lemon juice (~2 lemon’s worth)
  • 1/2 cup EVOO
  • 1 cup dry red wine

For the yogurt sauce:

  • 2 cups plain nonfat yogurt
  • 1 small cucumber peeled, seeded and coarsely grated
  • 2 garlic cloves, minced
  • 2 tbs really good EVOO
  • 2 tbs lemon juice
  • 3 tbs fresh mint, chopped

Make incisions in the lamb and insert the garlic slices into the holes.

Whisk the marinade together and add the lamb.  Marinate overnight in the refrigerator.

Line a sieve with cheesecloth and place it over a bowl.  Place the yogurt in the sieve and let drain overnight in the refrigerator. . . or use Greek yogurt for this and skip this step.

Preheat oven to 375 degrees, remove the lamb from the marinade, salt and pepper and place in a roasting pan.  Roast, basting occasionally with the reserved marinade until the lamb is 135 degrees.

Finish making the sauce by placing the cucumber in a sieve and salting heavily; let drain for 30 minutes, then rinse thoroughly and squeeze the cucumber dry.  Add the cucumber and remaining ingredients to the drained yogurt and mix thoroughly.

After the lamb rests for 5 – 10 minutes, slice and serve with the yogurt sauce.


Hot Cross Buns

A Betty Crocker Classic

  • 1/2 cup warm water
  • 2 pkg active dry yeast
  • 1/2 cup lukewarm milk
  • 3/4 cup unseasoned mashed potatoes
  • 1/2 cup sugar
  •  1 1/4 tsp salt
  • 1/2 cup butter
  • 2 eggs
  • 1 cup raisins
  • 1 tsp cinnamon
  • 1/4 tsp nutmeg
  • Half of 4 1/2 cups sifted AP flour

Add the yeast to the water and stir to dissolve

Stir the remaining ingredients into the yeast until smooth, then continue adding flour, mixing by hand, until the dough handles easily.  Turn onto a lightly floured board and knead until smooth.

Let dough rise until doubled (about 1 1/2 hours), then punch down and divide in two.  Shape each part into 16 buns.  Place in 2 greased 9″ baking pans (or 2″ apart on a greased baking sheet).  Let rise until double (~30 minutes).  Brush with an egg yolk glaze (1 egg yolk beaten with 2 tbs water) and bake for 20 – 25 minutes. Cool slightly, then make a cross on top with white icing.


Deviled Eggs

 

Why?  I have no idea why this is considered a traditional Easter food, but two different people told me that, and one of them is my Mom, so who am I to argue?
 

  • 6 hard-cooked eggs
  • 1/2 tsp salt
  • 1/4 tsp pepper
  • 1/2 tsp dry mustard
  • ~3 tbs vinegar or salad dressing to moisten filling

Cut eggs in half and remove yolks.  Mash yolks with remaining ingredients, then refill the whites, heaping the filling up lightly. Dust with paprika and serve.
 


A  joyous holiday weekend to all, no matter what your persuasion!  And feel free to edit this post to drop in your own recipes. . .

Faux Morning Report

Vital Statistics:

Last Change Percent
S&P Futures 1398.0 10.0 0.7%
Eurostoxx Index 2392.54 19.24 .8%
Oil (WTI) 100.31 -1.35 -1.33%
LIBOR 0.4692 0.000 0.00%
US Dollar Index (DXY) 80.046 0.268 0.34%
10 Year Govt Bond Yield 2.055% -0.105%
RPX Composite Real Estate Index 170.92 0.3

Almost all markets are closed today except for the USD fixed income market, so all Vital Statistics numbers are actually from yesterday’s close, except for the the 10y treasury yield.

Labor statistics came out this morning at 8:30. Change in non-farm payrolls came in at a very disappointing 120k (205k expected) with only a minor revision upward for last month, up 13k to 240k. Manufacturing jobs were up 37k, higher than expected (20k), and the unemployment rate fell again to 8.2% from last month’s 8.3%. But overall the numbers were very disappointing, which was reflected in the reaction of the only market open for trading.

Interesting price action on the treasuries right before today’s employment data came out. After closing yesterday at a yield of around 2.17%, the 10yr note hit 2.24% about 2 minutes before the numbers were released, and then with the disappointing employment data, the market rallied tremendously, and is now at 2.05%. The markets are somewhat illiquid with Europe on holiday and even a lot of the US market taking Good Friday off, so that can explain some of the large movement. Not a lot of people around to cover the large amount of buying after the number. But still the market seems to be hoping for, and betting on, some form of QE III, despite the minutes from last month’s Fed meeting ostensibly quelling that possibilty.

Futures markets close in about 5 minutes (11:15 EST) and the bonds will close by 1pm. So the day is pretty much over now. Europe is closed on Monday as well, so it will be interesting to see how the Euroean markets react on Tuesday to the violent move in US after a 4 day layoff. But Sunday night in Asia and then Monday morning should give us some idea if this rally is a bit overdone or if the market really is intent on seeing sub 2.00% yields again on the 10yr.

Happy Easter and Happy Passover to all who celebrate those things. To the rest…it’s looking like golfing weather is finally here.

The First Amendment and the Military

From the NYT today: Military Board Says Marine Who Criticized President Obama Should Be Dismissed

A military board has recommended dismissal for a Marine sergeant who criticized President Barack Obama on his Facebook page, including allegedly putting the president’s face on a “Jackass” movie poster.

The Marine Corps administrative board said after a daylong hearing late Thursday at Camp Pendleton that Sgt. Gary Stein has committed misconduct and should be dismissed.

The board also recommended that Stein be given an other-then-honorable discharge. That would mean Stein would lose his benefits and would not be allowed on any military base.

The board’s recommendations go to a general who will either accept or deny them. If the general disagrees with the board, the case could go to the secretary of the Navy.

Stein’s lawyers argued that the 9-year Marine, whose service was to end in four months, was expressing his personal views and exercising his First Amendment

Can the military legitimately restrict the rights of free expression of those who choose to be in the military, particularly with regard to criticism of the president? I am inclined to think that it can, especially because enrollment in the military is voluntary, and respect for the chain of command, which the president himself heads, is an important part of military culture. But I am curious what those who have been in the military actually think.

Bits & Pieces (Lulu’s Birthday Edition)

Today is our very own lms’s birthday!

Today is also Agnetha Fältskog’s [Anna Ulvaeus] birthday from the group ABBA, so with that in mind. . .

ABBA’s Benny and Bjorn sing Happy Birthday

hoppy birdies, lms!

Mark adds the recipe for traditional Italian Jewish Passover Seder soup, which is somewhat different than northern European Jewish Matzoh ball soup:

Minestra di riso per pesach from Edda Servi

As Edda Servi Machlin notes, though the Ashkenazim consider rice chametz, Italkim do not; this is thus the Italian equivalent of matza ball soup and is served at the Seder. It includes meatballs made from chicken breast and immature chicken eggs, which she suggests be substituted with hard-boiled eggs as they are hard to find. To serve 8:
Prep Time: 30 minutes

Cook Time: 20 minutes

Total Time: 50 minutes

Ingredients:

A whole chicken breast, boned
An egg, lightly beaten
1/4 cup matza meal
1/2 teaspoon salt
A pinch of nutmeg or cinnamon
2 1/2 quarts chicken broth
1/2 cup (100 g) uncooked rice
8 small hard-boiled eggs
Preparation:

Grind the chicken breast. Lightly beat the egg and combine it with the matza meal and 2 tablespoons of the chicken broth. Combine the ground chicken breast and the matza mixture, salt, and spice, and mix thoroughly. Chill the mixture for 15 minutes; in the meantime peel the eggs, discarding the whites, and bring your soup stock to a boil.

Make meatballs no larger than the yolks. Add them and the rice to the soup, and simmer for 15-20 minutes. Place a yolk in each of the soup bowls, ladle the soup over it, and serve.

Happy Penguin Birthday!

 

Republican War on Women (RWoW)

This deserves a thread of its own.

Google the phrase.

  1. Top 10 Shocking Attacks from the GOP’s War on Women

    pol.moveon.org/waronwomen/

    Stop the Republican War on Women. Redefining rape. Attacking the right to choose. Belitting victims of violence. The Republicans are on a rampage attacking 

This is quite clearly a freighted political catchphrase, intended so by sources like MoveOn and HuffPo.  Like the “War on Drugs” and the “War on Terror” it is intended to limit discussion of issues based on impugning motives.  Scott has been trying to make that point.

If we could define the Republican War on Women as the sum of these actions:

a failed conservative move to cut off U.S. government aid to Planned Parenthood + the Komen decision, since reversed + the attempted but failed roll back of contraception under employer health plans + the all male panel called to testify + the G’town student who was called a “slut” by Limbaugh + Santorum’s money guy’s “aspirin between the knees” comment + the vaginal insert sonogram, since abandoned in VA + the R opposition to extending the funding under the Violence against Women Act + personhood laws (thanks, Ashot), we could probably still talk about the cumulation without calling it war.

We could see it as R strategy to appeal to a fundamentalist base, that has become a bolder strategy as more and more of the active voting base of Rs claim fundamentalist religious principles, which often go far beyond the antipathy to abortion that many non-fundamentalists share.  We could see that fundamentalist faith actually does put women in a secondary role – this is true in all the Abrahamic religions.

We could see that some of the individual issues that have been tarred as part of the RWoW don’t derive their impetus from pandering to fundamentalist religion.  For example, some may derive from the desire to cut the budget.

We would not be surprised that moderate women would have no sympathy for any of the items I listed, and would be moving away from the Rs, unless some other set of issues took priority for them.

IMHO,  resisting the shorthand RWoW is worthwhile just in order to keep the issue conversation alive.  I think the same is true of other uses of the word “war” in a catchphrase intended to inflame emotions – like the WoD and the WoT.  It also cheapens the meaning of the word, fwiw.

Mourning Report

RIP Jim (Guv’nor) Marshall – the man who made heavy guitar sound so awesome

Vital Statistics:

Last Change Percent
S&P Futures 1388.0 -5.2 -0.37%
Eurostoxx Index 2373.3 -25.1 -1.05%
Oil (WTI) 101.66 0.2 0.19%
LIBOR 0.4692 0.000 0.00%
US Dollar Index (DXY) 80.046 0.268 0.34%
10 Year Govt Bond Yield 2.16% -0.06%
RPX Composite Real Estate Index 170.92 0.3

Markets are continuing the sell-off that began when the Fed hinted that QEIII isn’t going to happen. Bonds are up over a point and MBS are up half a point. Euro sovereign yields are wider again, and you are starting to see   bids in bank credit default swaps, particularly in some of the traditional European ne’er do wells – Dexia and Intesa SanPaolo. Spain is the new one to watch.

Today is the first Thursday of the month, which means retailers are reporting same store sales for March. Generally, they appear to be strong, particularly in department stores and Men’s / Women’s apparel. Discounters and Teen Apparel were weaker with some exceptions (Zumiez and Target).  Overall, the numbers look good and a few took up Q1 earnings estimates. The “yes. but…” is that March had some unseasonably warm weather, and that undoubtedly helped get people out of the house and into the stores.

Initial Jobless Claims came in at 357k.  Continuing Claims were 3,338k.

REO asset managers may want to watch this developing situation – allegations of discrimination regarding the maintenance and upkeep of homes in minority neighborhoods. The National Fair Housing Alliance put out a report alleging that REO properties in predominantly minority neighborhoods lack “for sale” signs, have boarded-up windows, and trash, as opposed to REO in white neighborhoods. This study was put out with a grant from HUD and will undoubtedly be fodder for a lawsuit.

The US is far behind on reforming the country’s housing finance system, Geithner said at a speech at the Chicago Economic Club. The reality is that our current housing finance system is more or less nationalized and we are far from being in the position to have private capital carry the load.

The Census Bureau released a study discussing the changes in growth patterns since 2010.  Interestingly, of the 50 fastest-growing metro areas over the last decade, only 24 were still in the top fifty since the 2010 census. Unsurprisingly, the areas most affected by the real estate boom fell out (Las Vegas, Palm Coast FL) fell out of the top 50 and it appears some of the energy-centric areas (TX, ND) are entering.

Bartlett on Health Care in the Financial Times

Lapsed R Bruce Bartlett says government can do it better.  Hmmm.

 

America
The folly at the heart of the US healthcare debate

America is the only developed country that does not offer some form of national health insurance to all its citizens.

Those over the age of 65 have coverage through Medicare and the poor are covered through Medicaid, both established in 1965. Those who are neither poor nor old are expected to obtain their own health insurance or get a job that provides coverage. The federal government does subsidise private insurance through the tax code by allowing its cost to be excluded or deducted from taxable income. This reduces federal revenues by some $180bn per year.

In 2009, the Obama administration put forward a plan for extending health insurance to those who did not have it through an employer, those who could not afford it and those who could not obtain coverage due to a pre-existing medical condition. A complex system of subsidies was established to make coverage affordable to everyone and a mandate was put into place requiring people to get coverage or else pay a fine.

The mandate is by far the most controversial element of the Affordable Care Act. Its rationale is that insurance companies cannot be forced to cover those with pre-existing conditions without it, or else people will simply wait until they are sick before buying health insurance. Nevertheless, many Republicans view the mandate as an unconstitutional intrusion into the economy and they have brought a case before the Supreme Court to declare the legislation null and void for that reason. Court watchers believe the case could go either way, with a final decision expected just before the election in November.

Exactly what would replace the Affordable Care Act if it is found unconstitutional is a mystery. The Obama administration appears to have no back-up plan and Republicans have steadfastly refused to offer any proposal for expanding health coverage. One problem is that before Barack Obama became president, Republicans were the primary supporters of an individual mandate, viewing it is as a more market-oriented way of expanding health coverage without a completely government-run health system. Indeed, Mitt Romney, the likely Republican presidential nominee, established a healthcare system in Massachusetts, where he was governor, that is virtually identical to the national system created by Mr Obama.

Simultaneously, Republicans are keen to cut spending for Medicare and Medicaid, because they are among the most rapidly expanding government spending programmes. A plan supported by Republicans in the House of Representatives would effectively privatise Medicare, giving the elderly a government voucher to buy insurance or health services, in lieu of the pay-for-service system that exists now. Medicaid would be devolved to the states.

What neither party has made any effort to grapple with is the extraordinarily high cost of health, public and private. According to the Organisation for Economic Cooperation and Development, the US spends more of its gross domestic product on health than any other country by a large margin. Americans spent 17.4 per cent of gross domestic product on health in 2009 – almost half of it came from government – versus 12 per cent of GDP or less in other major economies. Britain spends 9.8 per cent of GDP on health, almost all of it through the public sector. The total government outlay is almost exactly the same in the US and the UK at 8.2 per cent of GDP. This suggests that for no more than the US government spends on health now, Americans could have universal coverage and a healthcare system no worse than the British.

However, the option of a completely government-run health system was never seriously considered in the US when the Affordable Care Act was debated in 2009. Americans are too convinced that everything government does is less efficient and costs more than if the private sector does it. The fact that this is obviously wrong in the case of healthcare has never penetrated the public consciousness.

At the moment, everyone is waiting for the Supreme Court to speak before moving forward on any serious new health reform plan. Whichever way the court rules, it is likely to give some push to further action next year regardless of the election outcome. Moreover, the growing governmental cost of Medicare and Medicaid is something that has to be addressed if there is any hope of stabilising the national finances. That alone would be an impetus for action even if the Affordable Care Act had never been enacted.

The writer is a former senior economist at the White House, US Congress and Treasury. He is author of ‘The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take’

Morning Report

Vital Statistics:

Last Change Percent
S&P Futures 1397.8 -11.0 -0.78%
Eurostoxx Index 2429.9 -29.0 -1.18%
Oil (WTI) 102.74 -1.3 -1.22%
LIBOR 0.4692 0.000 0.00%
US Dollar Index (DXY) 79.723 0.240 0.30%
10 Year Govt Bond Yield 2.26% -0.04%
RPX Composite Real Estate Index 170.61 0.0

Markets are continuing their sell-off that started after the Fed released the minutes of their last FOMC meeting. The message:  The economy has to weaken for the Fed to consider another round of quantitative easing. Ironically, the FOMC statement noted more strength in the economy, but the markets are selling off.

A lousy Spanish bond auction has people wringing their hands over Europe again. Euro sovereign spreads are wider across the board, and Greek spreads continue to widen. Post restructuring, the Greek 10 year yield bottomed at 18% two weeks ago. It is now 22%. The ECB also kept rates unchanged at their meeting today and forecast the eurozone economy will shrink .3% this year. The ECB is in a pickle as inflation is becoming a risk in Germany while deflation is a risk in the South.

ADP released their March National Employment Report, suggesting nonfarm private employment increased by 209,000 in March. After declining for 4 years, we are seeing modest growth in construction and finance.

Steven Davidoff (The Deal Professor) lambastes the JOBS act. The punch line: Decimalization could explain why small IPOs are lagging as much as inability to access VC funds. Essentially, Congress is clueless about the financial markets (true) and legislates to the political winds (true). The reason why this bill got pushed through is so that Washington can have the appearance of “doing something” about jobs in the US. The unintended consequence is that it makes it easier for a dodgy company to raise capital, and if we have a couple of Sino Forests on our hands, multiples could contract across the market.

The WSJ has a story discussing how much credit has tightened. Loans closed in February had an average FICO of 750 and LTC of 76%. The average denied loan had a FICO of 699 and LTV of 83. 699.  83.  Denied. They go on to say that even as credit conditions ease in the greater economy, credit conditions in residential mortgages are still getting tighter. Of course, this is one of the side effects of abnormally low interest rates – as a lender, you are almost guaranteed to lose money lending for 30 years at 3.75%. Unintended consequences rear their ugly head again.

Is your local savings bank becoming a credit union? If it is, perhaps it is due to the new regulatory environment. As the OTS gives way to the OCC, many smaller banks are opting to become credit unions or state regulated.

Cops Fishing for Cash With Bogus Drug Stops

Just add this to the list of reasons to avoid Illinois. Alas, they are hardly the only place stopping folks for things they didn’t do in order to attempt to confiscate their cash and cars.

Asset forfeiture is the process by which law enforcement agencies can take possession of property suspected of being tied to illegal activity. Under these laws, the property itself is presumed to be guilty of criminal activity. Once the property has been seized, it’s up to the owner to prove he obtained the property legitimately.

In about 80 percent of civil asset forfeiture cases, the property owner is never charged with a crime. And in Illinois — like many states — the law enforcement agency that makes the seizure gets to keep the cash or the proceeds of the forfeiture auction (in Illinois, the prosecutor’s office gets 10-12 percent).

Critics say civil asset forfeiture is rife with poor incentives, and violates the Fifth Amendment’s protection against seizure of property without due process of law. Police can seize a car, cash, even a home on the flimsiest of evidence.