The AL MVP Debate

Posted on October 5, 2012 by ashot

It’s Friday, so how about something on the light side?

We’ve discussed some weighty topics here at ATiM and, with the exceptions of Scott and QB, we’ve all managed to be right once or twice. But we have yet to tackle a topic as important or divisive as: Who should win this year’s American League Most Valuable Player award?

Like the Presidential race, there are two candidates: Mike Trout of the Anaheim Angels and Miguel Cabrera of the Detroit Tigers.

As in the Presidential race, the sides have dug in and the mud-slinging has begun. There are many other similarities as well, but let’s just get to the arguments.

Mike Trout:

.326 BA, 30 HR, 83 RBI, 49 SB, 10.4 WAR (via Fangraphs)

Pros:He’s one of the best center fielders in baseball and is a rookie! He’s having one of the best rookie seasons in the history of baseball.

Cons: His team didn’t make the playoffs and he faded the last month of the season.

Miguel Cabrera:

.330 BA, 44 HR, 139 RBI, 4 SB, 7.2 WAR (via Fangraphs)

Pros: He just won the Triple Crown, meaning he led the American League in Batting Average, RBIs and Home Runs. He is the first player to do so since 1967. He played his best in August and September with the Tigers trying to make the Playoffs.

Cons: He’s not a good defender and he is not a good runner. His team had a worse record than Mike Trout’s team.

Some of you may be asking…what in the world is WAR? WAR is a “new” statistic that stands for Wins Above Replacement and has become somewhat of a dividing line between the Pro-Cabrera and Pro-Trout camps. From Fangraphs: WAR basically looks at a player and asks the question, “If this player got injured and their team had to replace them with a minor leaguer or someone from their bench, how much value would the team be losing?”

So, according to WAR, if Cabrera was replaced with a minor league player, the Tigers would win 7 fewer games while the Angels would win 10 fewer games. Now I could go on and on about these arguments and am happy to do so in the comments, but the bottom line is I’d be voting for Trout. He’s nearly as good of a hitter as Cabrera and he adds a lot more value with his running ability and defense. Who’s got your vote?

Filed under: 2012, fun stuff | Tagged: | 27 Comments »

Morning Report 10/4/12

Posted on October 4, 2012 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1451.4 6.7 0.46%
Eurostoxx Index 2495.3 2.8 0.11%
Oil (WTI) 88.75 0.6 0.69%
LIBOR 0.352 0.000 -0.07%
US Dollar Index (DXY) 79.74 -0.226 -0.28%
10 Year Govt Bond Yield 1.64% 0.03%  
RPX Composite Real Estate Index 194.4 0.2  

Markets are higher this morning after the ECB held rates steady. Generally speaking, the path of least resistance has been up in the equity markets since QEIII.  Bonds and MBS are down small.

Initial Jobless claims came in at 367k, better than expected, but higher from last week’s revised 363k.  Later this afternoon, we will get the minutes of the FOMC meeting which should make interesting reading. 

Lender Processing Services Mortgage Monitor showed delinquencies have dropped almost 50% from peak, while foreclosures remain at their highs.  Which means foreclosures should start dropping in the future. The states with the highest remaining foreclosures are NY, NJ, and HI.

Challenger and Gray reported that planned layoffs are the lowest in 12 years as government downsizing appears to be at an end. While this is a good sign, it doesn’t necessarily mean hiring is about to pick up as headwinds from Europe and Asia, as well as political uncertainty in the US are keeping companies from making any major expansion or hiring moves. They cite a Business Roundtable survey which found that only 30% of CEOs expected to increase capital spending or add more workers.  Those numbers are down from the mid 40s in Q1.  So while layoffs are back at pre-recession levels, hiring is not.

The debate last night was not market moving, but Romney’s performance should put an end to the pundits declaring the race over already.  At the margin, a Romney win would be bond bearish, and possibly stock market bearish since Ben Bernanke would not be re-appointed.  I was happy to hear Romney mention the lack of guidance as to what constitutes a qualified mortgage. 

Filed under: Morning Report | 48 Comments »

Debate Night

Posted on October 3, 2012 by lmsinca

This will be an open thread, live blogging the first Presidential debate.

From a variety of sources this is what we know:

The first presidential debate of 2012 will be held on Wednesday, Oct. 3, at the University of Denver in Denver, Colo. The moderator is Jim Lehrer, executive editor of the PBS NewsHour.

The Commission on Presidential Debates said the 2012 presidential debates will be moderated by a single individual and take place from 9 to 10:30 p.m. Eastern Standard Time. Neither of the candidates will be permitted to give opening statements, but will be allowed 2 minutes for closing statements.

The first debate will focus on domestic policy. The specific topics will be announced several weeks beforehand, and the debate will be divided into six 15-minute segments focusing on each. The moderator will ask a question, and each candidate will have 2 minutes to respond.

It should go something like this:

A debate that will consist of a total of six time segments of approximately fifteen minutes each in length. The issues to be discussed by the candidates have been agreed to in advance of the debate. Lehrer said on September 19, as he announced the issues that would be debated on Wednesday, that the first three segments would focus on “the economy”, while the final three would discuss “health care, the role of government, and governing”.

Each candidate will be asked a question by the moderator, and the candidate will respond with his answer, representing his personal view on the question. Some new proposals may be introduced during the debate, and while the debate will have few direct interactions between the candidates, both candidates are expected to question the proposals of their opponent.

And then a little hopeful thinking from one of Nova’s links:

Who knows? Maybe one day there will be candidates who will see it as politically advantageous to reveal themselves in this way. In the meantime, take note of a meaningful rule change announced this year by the presidential debate commission. For the first time, in the first and third events, the candidates will each get two minutes to respond to the opening question for each 15-minute segment, and then “the moderator will use the balance of the time in the segment for a discussion.” That could mean up to 11 minutes of free-wheeling talk between the candidates. In a 90-minute debate, that could happen six times.

That is not insignificant. And if the candidates use that time not to make speeches or repeat talking points, or to ignore an important question that was just asked, but instead to listen, engage and think in a way the audience can witness, we just might get a presidential debate that deserves the label.

What are you looking for in the debate? Do debates ever change the trajectory of an election? Why are there so few chances for third party candidates to participate? Will we hear any surprises, policy-wise, from what we’ve heard on the campaign trail?

And lastly, here are some body language tells we can all watch for…………hahahahahaha

1. An itchy nose could be a sign that someone isn’t telling the truth. If someone is scratching their nose, there could be an issue

2. Hands in pockets are a sign of insecurity

3. Crossed arms don’t necessarily mean a person is angry or protective: They could just be cold in the studio where the debates are taking place!

4. Touching the neck could be a sign that someone is threatened or feels insecure

5. Finger pointing is a sign of aggression and it can make the audience mistrust the speaker

Another telltale sign, experts say, is frequent blinking by a speaker. It might indicate that person is uncomfortable with the words they are saying.

Filed under: 2012, Debates, Mitt Romney, Obama | 157 Comments »

Morning Report 10/3/12

Posted on October 3, 2012 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1442.2 1.3 0.09%
Eurostoxx Index 2491.1 -2.5 -0.10%
Oil (WTI) 91.06 -0.8 -0.90%
LIBOR 0.353 -0.002 -0.42%
US Dollar Index (DXY) 79.89 0.143 0.18%
10 Year Govt Bond Yield 1.62% 0.00%  
RPX Composite Real Estate Index 194.4 0.2  

Markets are flattish after ADP says US companies added 162,000 jobs in September.  This was better than expectations.  August was revised downward from 201k to 189k.  Mortgage applications rose 16.6% as rates fell.  Bonds and MBS are down small.

Corelogic reported home prices increased 4.6% in August 2012 compared to August 2011.  This was the biggest percentage increase in prices since 2006. All but 6 states reported price gains. They are forecasting a 5% increase for Sep. 

While we fret about Europe, the other problem lies across the Pacific – the bursting of the Chinese real estate bubble. The Chinese appear to be at the final phase of the bubble, where the government is hoping that prices simply stagnate for a decade while economic growth and incomes catch up. Unfortunately, experience tells us once bubbles become inflated they take on a life of their own.  That said, the Chinese are savers, and have a cushion that US and European households do not. 

The Washington Post tries to game the election for the markets.  Bottom line:  the evidence is mixed, so don’t try and trade it.  Of course pundits from each political persuasion will try and claim that they are better for the markets. The article ignores the most important consideration (IMO) – An Obama win means the Fed will continue its policy of aggressive quantitative easing.  A Romney win means a new Federal Reserve Chairman, and presumably less aggressive measures.  So at the margin, an Obama win is bond bullish (or neutral), while a Romney win is bond bearish.  I would say that would apply to the stock market as well, at least in the short term.  Longer term, the economy will benefit more from less manipulation of interest rates than more.  ZIRP is creating imbalances that will create problems down the road.

Filed under: Morning Report | 46 Comments »

Morning Report 10/2/12

Posted on October 2, 2012 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1444.8 7.9 0.55%
Eurostoxx Index 2513.6 14.8 0.59%
Oil (WTI) 92.8 0.3 0.35%
LIBOR 0.354 -0.001 -0.35%
US Dollar Index (DXY) 79.67 -0.159 -0.20%
10 Year Govt Bond Yield 1.65% 0.02%  
RPX Composite Real Estate Index 194.5 0.3  

Markets are higher this morning on speculation Spain is preparing to ask the ECB to purchase its debt. The stock market definitely feels like the path of least resistance is up, though it could be the calm before the storm – Alcoa kicks off earnings season next week. Notable earnings warnings so far include Caterpillar and FedEx.  Bonds and MBS are down / flat.

Yesterday’s ISM Purchasing Managers Report was reasonably constructive.  The headline number of 51.1 means that the economy should expand at roughly 3% or so, at least according to historical trends.  Production and backlog were the weak spot, while employment and prices were areas of strength.

The Washington Post has an article which shows what the Fed is up against: Even though interest rates are at rock bottom levels, savings deposits continue to increase. Risk aversion and the desire to replenish lost savings are behind the phenomenon.  Even though the stock market has rallied, the lack of volume indicates that retail investors are not putting money to work there.  Aside from the risk appetite considerations, it also demonstrates why consumption remains weak. 

You know who loves this situation?  Corporate America.  As if on cue, I just received an email saying WellPoint is issuing $1.5 billion of senior unsecured 30 year convertible bonds tomorrow with a price talk of 2.5% – 3% coupon, 20% – 25% premium.  To put that in perspective, the 30 year government bond is at 2.8% and WLP pays a 1.9% dividend. Old time convertible arbs are shaking their collective heads at that one.

Finally, Bill Gross on budgetary crystal meth and the ring of fire.

Filed under: Morning Report | 67 Comments »

Morning Report 10/1/12

Posted on October 1, 2012 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1439.0 4.8 0.33%
Eurostoxx Index 2480.9 26.7 1.09%
Oil (WTI) 91.72 -0.5 -0.51%
LIBOR 0.355 -0.003 -0.91%
US Dollar Index (DXY) 79.8 -0.135 -0.17%
10 Year Govt Bond Yield 1.62% -0.02%  
RPX Composite Real Estate Index 194.5 0.0  

Stock index futures are higher as we kick off the 4th quarter.  There are no major headlines or economic data this morning. Later this week, we will get the FOMC minutes from the last meeting, and Friday’s jobs report will have market moving potential. Bonds and MBS are up.

Will the fiscal cliff affect housing in any way?  Perhaps.  One provision in the expiring tax cuts is the 2007 Mortgage Forgiveness Debt Relief Act and Debt Cancellation which made the debt forgiveness in short sales non-taxable.  Typically debt forgiveness is considered taxable income.  If this provision goes away, short sales and mods with principal forgiveness may grind to a halt.

Meanwhile, HUD secretary Shaun Donovan was defending the mortgage interest deduction on the Sunday morning talk circuit over the weekend.

Filed under: Morning Report | 79 Comments »

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