Morning Report

Posted on January 12, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1294.5 6.3 0.49%
Eurostoxx Index 2371.5 31.960 1.37%
Oil (WTI) 101.97 1.100 1.09%
LIBOR 0.5715 -0.005 -0.87%
US Dollar Index (DXY) 81.118 -0.140 -0.17%
10 Year Govt Bond Yield 1.92% 0.01%

Markets are slightly positive this morning as good news out of Europe is offset by disappointing economic numbers out of the US. Spain and Italy had good debt auctions, which is pulling down sovereign yields across the board. The ECB held rates at 1% and noted “tentative signs of stabilization” in Europe.
Initial Jobless claims for the week ending 1/7 were 399k, versus 375k expected. Continuing claims were higher as well. Retail Sales for December were flat ex autos. November numbers were revised upwards. Given the comp numbers reported last week, I would not be surprised to see upward revisions. It feels like an outlier.
Regarding the jobs numbers, an interesting dynamic will be playing out in the unemployment numbers. Workers who have been unemployed for over 6 months are considered “discouraged workers” and do not count in the unemployment numbers. As the economy improves, those workers will start looking for work again and should be counted as “unemployed” This should add upward pressure to the unemployment numbers. But, with an election coming up, the Labor Department will want to understate this phenomenon as much as possible. So I would take any unemployment numbers with a grain of salt, if you don’t already.
The winter that never was (it is 40 degrees and rainy this morning in the Northeast) is wreaking havoc on natural gas prices. While WTI continues to hang around $100, gas is now down to $2.71. Natural gas bulls are being taken to the woodshed, and is approaching the 2009 lows of $2.51. It will be interesting to see if someone ends up getting carried out on a gas bet.

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Bits & Pieces (Wednesday Night Health Edition)

Posted on January 11, 2012 by Michigoose

Well, there goes my reason for drinking red wine!  Guess I’ll just have to stick with white. . . and the occasional martini when I’m out of state (due to Utah’s often odd liquor laws a real martini can’t be made here:

Metered Dispensing
Utah law requires restaurants, clubs, on-premise banquet licensees, reception centers, and airport lounges to use a metered dispensing system that is calibrated to dispense no more than 1.5 ounces of primary liquor in a mixed drink. Secondary alcoholic flavorings may then be added to a mixed drink as the recipe requires, not to exceed a total of 2.5 ounces of spirituous liquor.


Internal medicine vs surgery. . . also female vs male.  “Eating is for wimps and dermatologists!”  LMAO!


And just to show how versatile these characters are, here’s the explanation we’ve all been waiting for:




While Garth Brooks/Chris Gaines doesn’t allow YouTube (or iTunes, for that matter) to distribute his videos, Don Henley is a worthy substitute:


And another oldie but goodie:

Bob graduated from the high school that I would have attended had I stayed in Ann Arbor (darn my parents for moving!!), and one year he came back to be the Senior Prom “band”.  One of my very best friends of all time knew how much I loved Bob Seger and the Silver Bullet Band and invited me to the prom. . . Best. Concert. Ever!

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Morning Report

Posted on January 11, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1282.1 -4 -0.31%
Eurostoxx Index 2333.4 -14.120 -0.60%
Oil (WTI) 101.41 -0.830 -0.81%
LIBOR 0.5765 -0.003 -0.52%
US Dollar Index (DXY) 81.325 0.426 0.53%
10 Year Govt Bond Yield 1.94% -0.03%

Markets are a touch weaker this morning after yesterday’s rally. Euro sovereign yields are tighter on a lack of news. The Fed’s Beige Book comes out around 2:00 this afternoon and tomorrow we get jobless claims and retail sales data.
Bloomberg is speculating that the Fed is ready to start large-scale mortgage purchases again. I suspect the reason for this is the new increased fee that Fannie Mae is going to charge, which will probably tack on 10 basis points or so to the interest rate on new mortgages starting next month. The hope is that they can reduce the base yield of MBS in order to take the sting out of the increased fee.
Rumors of a big refi package coming from the GSEs will get more life as Fannie Mae’s CEO Michael Williams is stepping down. The rumor has been that the government will start offering no-questions-asked refis to anyone who is current on their mortgage. I have said before that the originator is the weak link in this plan, but there is an election coming up. Even if it doesn’t work, it allows obama to say he is doing something about house prices.
Lennar reported earnings in line with expectations this morning, but the focus is going to be on the outlook. They reported a 35% increase in backlog and a 20% increase in new orders – more indications that construction is coming back, albeit from a very depressed level. Historically, housing starts would be 1.5MM to 2MM units at this point in the economic cycle, not the current 650k annual pace. Their view is that the housing market is stabilizing.

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Bits & Pieces (Tuesday Night Open Mic)

Posted on January 10, 2012 by Michigoose

Well, well, well. . . many of our hometowns turn up on this list, but look who’s the gayest of them all.  Who’d a thunk it??

Few things are better than women in science (right??!!??), and this TED talk is great!

Another edition of clinician silliness cartoons: 

Try as they might. . .

The Granite State © Nate Beeler, The Washington Examiner,mitt romney, new hampshire, granite, state, primary, campaign, 2012, republican, gop, candidates, nomination, election, politics, newt gingrich, ron paul, rick santorum, jon huntsman, stone

So what else is up out there?  Got any more code for us tonight, Kevin?  🙂

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Whither Texas?

Posted on January 10, 2012 by markinaustin

Quandary.  Texas’ primary will surely be postponed until June.

How did we get here?

1]  TX Lege published its CD map based on the 2010 census.

2]  TX is a state that must pre-clear its map with the Justice Department or alternatively ask a USDC in Washington DC for a declaratory judgment.  No state had ever gone to court before, but TX thought it would do “better” in court than with a D DOJ.  This infused delay, as a matter of course – DOJ pre-clearance takes but 60 days.

3]  The DC Court has not finally ruled, but did make an interim finding that the TX plan violated the VRA.  The DC Court will finally rule in March, perhaps.

4]  TX had scheduled its primary for Super Tuesday in March, so, in an unusual move, the DC Court permitted a TX federal court panel to draw an interim plan for TX.  The San Antonio panel obliged, but without ever making its own preliminary finding that the TX plan violated the VRA.  

5]  TX appealed the SA map to the Supremes saying it was not based on a finding of a violation. Further, TX said, it could use its own map if no violation had been found.  The DC court case was not part of the appeal but it was not far from the Supremes’ minds, either.

6]  Read the link to see that the Supremes are confused, too. I think you will sense that the Supremes will probably come up with a compromise result that will be more about judicial administration of the federal court system, IMHO, then about the probable swing of 4 HoR votes by party that are the political stakes.  3 of 4 new HoR seats are R under the TX plan, but D under the San Antonio USDC plan.

7]  Remember that this is only about TX’s interim plan at this point – the final plan will be dictated by the USDC in DC, or the appeal of that case.  Problem for TX is that the interim makes the CD lines for 2012, and until we have a final ruling, we cannot have 2012 elections or primaries.  The Supremes [and all courts] hate tight timelines in complex matters.

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Morning Report

Posted on January 10, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1289.5 13.9 1.09%
Eurostoxx Index 2351.9 65.460 2.86%
Oil (WTI) 103.13 1.820 1.80%
LIBOR 0.5795 -0.001 -0.17%
US Dollar Index (DXY) 80.776 -0.212 -0.26%
10 Year Govt Bond Yield 2.00% 0.04%

Markets are rallying worldwide on no real news. Alcoa kicked off earnings season last night with a loss that was more or less expected. Sales were higher than forecast. Alcoa also forecast global demand will drop to 7% from 11% last year on China weakness. Regardless, the stock is up this morning. Lennar and JP Morgan also report this week. I am interested in what Lennar has to say – construction has been the weak link in this recovery, and some of the other homebuilders had been relatively optimistic about 2012. If housing construction starts picking up, that is a great sign that the recovery is picking up steam.
The markets are rallying partly on hope that China will ease. China’s hard or soft landing may turn out to be the next wall of worry after Europe. By all accounts, their real estate bubble has burst and Chinese savers are heavily exposed to real estate. China’s capital controls mean that Western banks don’t have much exposure to China’s banks, but they do have exposure to the big UK/HK giants HSBC and Standard Chartered. At any rate, the loss of Chinese demand is the last thing the global economy needs at the moment, though it will be music to the Fed’s ears as it should lead to lower commodity prices.

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Another Baby

Posted on January 10, 2012 by lmsinca

I’m not sure how many of you remember BGinCHI (Brad-King of Snark), or ever knew him, but here’s a picture of their little guy born on Jan. 6.  Maybe once his life gets back into a nice routine he’ll have time to post over here occasionally…..lol.  Hey if Ash can do it………………………

Also, some of you may remember me asking for advice when our daughter fell in New Orleans at one of the hotels and broke her front tooth quite badly.  We’re still waiting to see if their insurance pays for it (about $5K) but she got her smile back and is grinning again.  I just wanted to say thanks for the advice.

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Bits & Pieces (Monday Night Open Mic)

Posted on January 9, 2012 by Kevin S. Willis

I been gone all day, and will be similarly disposed Tuesday and Wednesday. PowerSchool SQL training at work, new puppy and busted TV at home, I’m busy.

So, this is what I’m doing right now:

select st.lastfirst,st.grade_level gl,sc.abbreviation, 

sch2.abbreviation as abbr2,st.entrydate,st.exitdate,st.enroll_status, 

sch2.dfltnextschool, sch3.name,re.entrydate “PrevEntDate”, 

re.grade_level PrevGL,re.schoolid PrevSchoolID

from students st 

join schools scon st.schoolid = sc.school_numberjoin reenrollments re 

on st.schoolid != re.schoolidand st.id = re.studentidjoin schools sch2

on re.schoolid=sch2.school_numberjoin schools sch3

on sch3.school_number = sch2.dfltnextschoolwhere st.schoolid=25and st.enroll_status = 0

and re.exitdate = to_date(’06/04/2011′,’mm/dd/yyyy’)

and (sch2.dfltnextschool != st.schoolid)

and st.schoolid != st.next_schoolorder BY lastfirst

But I’m more interested in figuring out what the custom fields are inside custom CLOBs, but no love so far. See you later!

***

A former employee dishes on working for Keith Olberman. Blocked by my net nanny, but I’m going to have to read that later. 😉

– KW

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Whither the Tea Party

Posted on January 9, 2012 by nsullivan12

One of the genuine curiosities of the current race for the Republican nomination is
the absence of The Tea Party as a real player. Given that the energy and enthusiasm
in the Republican party appears to reside within The Tea Party it’s worth wondering why
that element of the party appears content, or resigned, to see Romney or Santorum take the
nomination. Neither candidate could fairly be seen to be suited to carry the banner
of limited government.

One possibility seems to be that the Tea Party simply does not have, for now at least,
the kind of organization needed to bring a candidate to the fore. A successful run for the Republican nomination requires organization and funding. That Romney has been able to acquire that organization and funding without significant Tea Party backing, and given that the Tea Party has not brought a viable competitor forward, it may simply be
the case that the Tea Party does not now possess the resources needed to do so.

Another possibility is that the Tea Party has the resources, or could have acquired them in a timely manner, but has elected not to do so. If that is the case, then it seems reasonable to
assume that the Tea Party isn’t well suited to uniting to support a certain candidate, at least in the nomination process. It may be that the Tea Party is more a loose collection of individuals that a group suited to hammering out differences in order to settle on a particular candidate.

Another possibility is that the Tea Party is not, generally speaking, as opposed to government
as its rhetoric would suggest. With the congress, particularly the House, effectively refusing everything, one would expect House Republicans in particular, to be more popular with the Tea Party base of the Republican Party. Polling does not appear to indicate that that is the case. That is to say that, given the rhetoric, one would expect to see intransigent
Republican House members and the House leadership, buoyed by the praises of the base of
the party. That does not seem to have happened. And given all the talk of
smaller government and reducing taxes, one would expect the Tea Party to find, and back
to the hilt, a Republican nominee fiercely determined to do so. That is not the case either.
Furthermore, the Tea Party, taken as a whole, seems reluctant about, if not openly hostile, toward, cuts in medicare and social security, and, perhaps, to a lesser degree defense. With that being the case, it is difficult not to suspect that the Tea Party is principally comprised of older Americans interested in cutting government programs for others and safeguarding the ones that benefit them.

There are other possibilities and more than one, or none, may be correct. Of the three mentioned above, however, the third possibility seems to be bolstered, in part, by the fact that it would place the Tea Party in line with general attitudes. Americans, particularly elderly Americans, have demonstrated little real zeal for reducing the size of government and perhaps the Tea Party, for all its rhetoric, has not broken free of that.

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Morning Report

Posted on January 9, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1275.1 0.9 0.07%
Eurostoxx Index 2304.9 6.280 0.27%
Oil (WTI) 101.43 -0.130 -0.13%
LIBOR 0.5805 -0.001 -0.17%
US Dollar Index (DXY) 81.1 -0.160 -0.20%
10 Year Govt Bond Yield 1.98% 0.02%

Markets are flattish this morning on a lack of news. No major news out of Europe. Unicredito is the first Euro bank to start raising additional capital. The stock is down 12% on its rights issue.
Robert Samuelson has a column on the state of China’s real estate bubble. I don’t think people in the US fully grasp the size of that bubble. China has entire cities built on spec – in other words, they are completely built and vacant. Here are some satellite images. Apartments in Beijing are 27 times income. Chinese savers have few investment options, so real estate tends to absorb the majority of the excess capital. This could get ugly over the next few years. While the western banks don’t have a lot of direct exposure to Chinese banks, they do have exposure to HSBC and Standard Chartered. For those wanting a stronger Chinese currency, forget about it.
Earnings season kicks off tonight with Alcoa reporting after the close.

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