George Will cracked open his thesaurus again. Seems like a good word for the occasional comment thread.
pet·ti·fog/ˈpetēˌfôg/
That is all.
Filed under: Uncategorized | 14 Comments »
George Will cracked open his thesaurus again. Seems like a good word for the occasional comment thread.
That is all.
Filed under: Uncategorized | 14 Comments »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1321.7 | 1.9 | 0.14% |
| Eurostoxx Index | 2474.0 | 3.2 | 0.13% |
| Oil (WTI) | 96.59 | -1.0 | -1.04% |
| LIBOR | 0.5306 | -0.007 | -1.21% |
| US Dollar Index (DXY) | 79.078 | 0.216 | 0.27% |
| 10 Year Govt Bond Yield | 1.83% | 0.00% |
Stocks are flat this morning, with a lot of data. Productivity was up .7% and unit labor costs were up 1.2% for the 4th quarter. Productivity was below expectations and costs were above. Initial jobless claims were 367K vs 371K expected. Continuing claims were slower than expected as well. Stocks rebounded modestly on the numbers.
Corelogic reported its December Home Price Index and full year 2011. Home prices fell 4.7% nationally during 2011. The worst states were Illinois, Nevada, Georgia, Ohio, and Minnesota. Montana, Vermont, South Dakota, Nebraska, and NY reported the highest increases.
Today is the first Thursday of the month, which means retailers are reporting same-store sales. The winners so far appear to be Gap and Kohls. Ann Taylor and Abercrombie and Fitch (Abercrumble) are bringing up the rear.
Facebook filed its registration statement last night. I have only skimmed the document, but a few things stand out. First, there are two classes of stock – the B shares which have 10 votes per share and the A shares which have 1. Facebook is selling 5 billion of the A shares. They did 3.7 billion in revenue in 2011 and have roughly 62% EBITDA margins. Given the $100 billion price tag, this works out to 27x sales and 45x EBITDA. Revenues are roughly doubling per year. It will no doubt make zero sense on any sort of reasonable valuation metric, but iconic companies like Apple and Google always trade rich.
Pulte Homes reported earnings this moring. They are echoing the sentiment of the other homebuilders – noting reasons for optimism regarding profits, and a “growing sense of optimism” about the housing market in general. 4Q earnings were light, though.
Filed under: Earnings Announcements, Economic data | Tagged: Facebook | 29 Comments »
The days fly by. Already hump day, and I haven’t finished the stuff I meant to get done on Monday.

Startfire Sure Wears Less Clothes Than She Did When I Read Teen Titans (of course, she's not in the Teen Titans anymore).
The 5 Most Ridiculously Sexists Superhero Costumes.
Scientists say sugar is as toxic as alcohol, and there should be a drinking age for soda.
Some fly-by-night web startup called Facebook filed their IPO, which values the company at $100 zillion dollars.
Republicans direct police to detain documentary crew to keep them from filing a hearing on natural gas. Oh, that doesn’t make them look like a collect group of mustache-twirling Snidely Whiplashes.
And right under that on Dvorak, do you think Big Brother should be watching everybody? Well, now there’s an app for that.
Back to Starfire. How would someone even wear something like that? It would have to be painted on. Sheesh.
That’s it. Blessing and karma to all! — KW
Filed under: Bits and Pieces, comics | Tagged: comic books, objectification, sexism, starfire | 103 Comments »
Nothing new, but Medicare, Social Security and other so-called mandatory spending are busting the budget. But that spending makes for a sizeable re-election war chest.
Filed under: Uncategorized | Leave a comment »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1315.7 | 7.5 | 0.57% |
| Eurostoxx Index | 2457.8 | 41.1 | 1.70% |
| Oil (WTI) | 98.79 | 0.3 | 0.31% |
| LIBOR | 0.5371 | -0.005 | -0.97% |
| US Dollar Index (DXY) | 78.801 | -0.477 | -0.60% |
| 10 Year Govt Bond Yield | 1.80% | 0.01% |
Markets are rallying this morning on no real news. Portuguese yields are again lower and have retraced the big spike from Monday. Amazon.com stunk up the joint last night with a miss on the top line and disappointing guidance.
In economic data, mortgage applications were down in January. The ADP report suggests 170k jobs were added in January. The bulk of the jobs were added in small business and services. The January number was lower than expected. December was also revised downward from 325k to 292k. The takeaway is that the labor market is improving, albeit slowly.
The rumors are true: Obama plans to do a no-questions-asked refi program for anyone who is current in their mortgage. The program will be financed with a fee on banks with $50 billion in assets. The details have yet to be released, but the fee is probably going to act as a poison pill. As I have said before, the flaw in the plan is the originator. By definition, underwater loans are non-conforming (i.e. in contravention of FHA lending standards) and the government has the right to force the originator to buy it back. Originators are not going to take that put-back risk for no compensation, especially when there are plenty of good quality mortgages to underwrite. At any rate, banks are especially stingy with their warehouse lines these days, so originators are unable to make as many loans as they would like. Nobody is going to tie up precious warehouse capacity with non-conforming loans that can end up back in their lap.
It raises the question whether Obama understands this problem. My sense is that he does – that is why the poison pill bank fee was put in. This is just so much political theater – a chance to make an election year point. “See, I wanted to lower your mortgage payment, but those 1% bankster defending, do-nothing Republicans wouldn’t let me.”
Obama did roll out a pilot program on REO-to-rentals. FHA will sell foreclosed properties in bulk sales to investors who will turn them into rentals. It is an interesting idea. The rub will be pricing and scalability. The Cleveland Fed has already weighed in on the idea for its area and admitted it probably won’t work in the Rust Belt, where population loss is driving up vacancy rates and properties are spread out. This plan could work in dense places like South Florida and Las Vegas perhaps. Pricing will be problem as well. Currently, foreclosures are trading around 85% of Broker Price Opinion. Professional investors are probably going to need larger discounts to generate the returns necessary to attract capital. Since the government isn’t going to allow Wall Street Wiseguys to flip this stuff, they will require a multi-year holding period. No pension fund or endowment is going to tie up capital for 3 years at a high single-digit rate of return.
Filed under: Morning Report | 38 Comments »
I got nuthin’, nuthin’ I tell you. Some industrious moderator, please edit this post and add a link to a funny story from The Onion, preferably with pictures. Thanks!
— KW
Even The Onion didn’t have a whole lot going on, Kevin, but here you go:
Governor Romney’s watch is missing:
“I pledge to every single Hispanic-American—whether you came here from Mexico to start a new life for your family or fled the brutality of Castro’s Cuba—that if my watch is put back in its rightful place in the next two hours, I will consider the matter closed and no one will be the wiser.” With the watch still not returned at press time, Romney begged the nation’s Hispanics, “Please don’t make me call the—how do you say it? El policío? La policía? The appropriate authorities.”
And I don’t think I’ve linked to this video before:
–Michigoose
Filed under: Bits and Pieces | 42 Comments »
WASHINGTON — The Catholic Church is protesting an Obama administration rule that requires nearly all employers — even Catholic ones — who provide insurance to their employees to include coverage of birth control services.
The United States Conference of Catholic Bishops (USCCB) has come down against the administration for not exempting all religious organizations from the rule.
In a video posted to the group’s website, USCCB president Archbishop Timothy Dolan said the “administration is on the wrong side of the Constitution” and that the rule to provide birth control is a violation of the First Amendment of the Constitution, which provides for the free exercise of religion.
Anecdotally, Catholics from the Midwest to the Washington, D.C., area said their churches addressed the issue in the past week via church bulletins that urged churchgoers to contact their members of Congress to support legislation to reverse the administration’s rule.
The Obama administration rule stems from a provision in the Affordable Care Act (ACA) that requires no-cost coverage for preventive health services. The Institute of Medicine (IOM) recommended that the Department of Health and Human Services cover the “full range of FDA-approved contraceptive methods” in order to prevent unintended pregnancies at no cost to the beneficiary, and that includes birth control.
The final rule, issued by the Department of Health and Human Services (HHS) on Jan. 20, says that starting on Aug. 1, 2013, health plans must cover all FDA-approved contraceptives, including hormonal contraceptives such as birth control pills, implanted devices such as intrauterine devices (IUDs), Plan B emergency contraceptives (the “morning-after” pill), and sterilization — all without charging a copay, coinsurance, or a deductible.
The plans will not have to cover abortions, however.
Churches and church-affiliated secondary schools are exempt from the rule, but other organizations with religious affiliations — including universities, charities, and hospitals — must comply. Such organizations petitioned HHS for an exemption after the preliminary rule was issued last summer. As a compromise, they have been given an extra year to comply.
“In effect, the president is saying we have a year to figure out how to violate our consciences,” Dolan said in a statement.
The Catholic Church opposes preventing conception by any artificial means, including condoms, IUDs, birth control pills, and sterilization.
Sister Mary Ann Walsh of the USCCB told MedPage Today that requiring Catholic providers to write prescriptions for birth control would be asking them to violate the church’s teaching.
“If you went to the Jewish deli, you can’t complain because it doesn’t have pork,” she said. “If you went to a Catholic hospital, you shouldn’t be surprised that that a Catholic hospital won’t prescribe contraception and sterilization.”
Walsh said the USCCB supports legislation authored by Rep. Jeff Fortenberry (R-Neb.) that would amend the ACA to permit health plans to refuse to cover specific items, such as birth control or services that “are contrary to the religious beliefs” of the entity offering the plan, without penalty. The bill, HR 1179, would allow those plans to still be considered “qualified health plans” and therefore able to be sold in the health insurance exchanges created by the healthcare reform law.
The bill has 102 sponsors, seven of whom are Democrats.
The Catholic Health Association of the United States declined a request for an interview, but pointedMedPage Today to a statement made by CEO Carol Keehan, who said the group is disappointed that HHS exempted only churches, but not religious hospitals, from its preventive services rule.
“The challenge that these regulations posed for many groups remains unresolved,” Keehan said in the statement. “This indicates the need for an effective national conversation on the appropriate conscience protections in our pluralistic country, which has always respected the role of religions.”
_________________________________________________________________
During the debate in 2009, The Bishops fought to have abortion not covered by ACA and the Catholic hospitals split with them (you can look that up). The compromise finally went the Bishops’ way on abortion, as I recall. Birth control, not including elective abortion, of course, remained in ACA, with an exemption for Churches, but not for RC employers or RC Hospitals (which presumably do not want that exemption, judging by 2009’s experience). Is there some way the Bishops have been subjected to a sneak attack here, or was this a fight that was just going to happen once ACA was implemented, no matter what? It seems to me that HHS is implementing ACA here as written. Is there an executive overreach here that I am missing? Was there reason to think a “church” included a “hospital” affiliated with the RCC?
Your collective input is required for my edification.
Filed under: 2012, Affordable Care Act, religion | 20 Comments »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1315.7 | 6.8 | 0.52% |
| Eurostoxx Index | 2434 | 29.330 | 1.22% |
| Oil (WTI) | 101.03 | 2.250 | 2.28% |
| LIBOR | 0.5424 | -0.005 | -0.82% |
| US Dollar Index (DXY) | 78.888 | -0.237 | -0.30% |
| 10 Year Govt Bond Yield | 1.85% | 0.01% |
Markets are stronger this morning on progress in Europe. The Portuguese long bond is up a point and the Euro is strengthening. In earnings, Exxon missed, Eli Lilly beat. People are waiting anxiously to see the red herring for Facebook’s IPO. Certainly the other social media stocks have not been shooting the lights out, but leaders always trade rich to also-rans. Watching Linked-In or Groupon may not turn out to be the best comp.
The employment cost index came in at .4%, in line with expectations. Case-Schiller was also released this morning, with a 70 basis point decline MOM and 3.67% decline YOY. This puts the index back to April 2003 levels. Case-Schiller is a very lagged indicator and this number covers the 3 month average ending in November, so it is a snapshot of how the real estate market looked last fall. Anecdotally, I am hearing things are improving in my neck of the woods, NYC metro.
Chart: Case-Schiller
Another sign that the inventory of foreclosed homes is moving – the professional investor is getting involved. Bloomberg has a story this morning on how private equity is getting involved in the Administration’s REO-to-Rental program. These funds are looking at spending billions. Still, the absolute numbers are staggering. “About 7.5 million homes with a current market value of $1 trillion will be liquidated through foreclosures or other distressed sales by 2016” according to Morgan Stanley.
$1 trillion in distressed sales. Wow.
Filed under: Uncategorized | 115 Comments »
Work has been miserable. A lot of not great information from our Rapid Notice Service provider has made adding SMS numbers to student outreach much, much more problematic than it has to be. So I’ve been busy.
However, a U.S. Navy Ship-Mounted Rail Gun is closer to reality. It’s about time we started flinging superheated aluminum at distant objects at supersonic speeds.
Here’s an original 1982 Featurette on The Making of Tron.
Michelle Obama indulges in $50,000 shopping spree. I’m pretty sure the cost of vacationing on Air Force One is a lot higher, and the tax payers foot the bill for that.
Warren Buffett says: "I'm too rich! And so, I demand the government take your money! Mine, of course, will remain in untouchable tax shelters."
Warren Buffett is not an oracle of public finance. It covers a lot of the stuff we touched on previously. But here it is again, if you just can’t get enough.
If you don’t use coupons, you’re leaving money on the table. Why not set some cash on fire, while you’re at it?
UPDATE! The Muppets respond to Fox accusing said Muppets of advancing an anti-oil, anti-capitalist agenda:
Filed under: Bits and Pieces | 47 Comments »
Vital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1303 | -9.5 | -0.72% |
| Eurostoxx Index | 2412.9 | -23.710 | -0.97% |
| Oil (WTI) | 99.02 | -0.540 | -0.54% |
| LIBOR | 0.5469 | -0.004 | -0.77% |
| US Dollar Index (DXY) | 79.32 | 0.484 | 0.61% |
| 10 Year Govt Bond Yield | 1.83% | -0.06% |
Stock index futures are lower this morning as Europe becomes the focus again. The Germans have proposed creating a commissioner with veto power over Greek budgetary decisions as a condition for aid. Greek Financial Minister Evangelos Venizolos rejected the idea. Portugese spreads are 180 basis points wider this morning as well.
Merger Monday is back with a couple of deals – The Gores Group (a West Coast private equity group) is buying Pep Boys. Swiss engineering giant ABB is buying Thomas and Betts. Eastman Chemical bid for Solutia on Friday. Merger activity seems to be picking up, another sign that the economy is gathering strength.
Personal income came in at .5% for December, slightly higher than the .4% estimate. Spending however was flat, lower than the .1% estimate. The spending number may be explained by the marked strength in spending in 2010. Spending started to gather momentum from Q310 – Q111 before falling off as the European crisis began to coalesce. So the weakness may simply be a tough comp problem.
The earnings parade continues this week with McKesson, ADM, Exxon, Eli Lilly, UPS, Amazon.com, Pulte, and Dow as the major players releasing Q4 results.
Filed under: Morning Report | 86 Comments »