All Things in Moderation

Vital Statistics:

Stock indices are flattish as the market digests the Fed’s statement and people watch the declining Euro. Supposedly 1.30 is some sort of magic level (the press loves big figures), but people forget that a decade earlier it was around 90 cents. Euro sovereign levels are slightly firmer and commodities are getting hit. Volumes have been light lately and will only dry up further as we head into year end.

The NYT has a story on Comedy-Bank (Commerzbank) and its capital woes. The German state already owns 25% of the company, and the European Banking Authority has said it needs another 5.3 billion euros in capital, which is a tall order when your market cap is only 6.2 billion euros to begin with. Looks like the German Government is going to have to kick in some more equity. A German broker once told me that the men’s room on the Commerzbank equity trading floor has an eye-level window in front of the urinals with a view of Deutsche Bank’s headquarters across the park. Ja, und now we piss on Deutsche Bank! I can’t verify the veracity of this, but it would be funny if it is true.

Today is Mitt Money Day with the NYC finance sector. Big shindig at Steve Schwartzman’s pad tonight, with J Tom Hill, Paul Singer, Dan Loeb and others tonight. NYC Wall Street cash is all-in with Romney and the Republican primary. Obama will raise some cash from the dyed-in-the-wool Democrats, but the Republican nominee is going to raise a ton. Don’t read too much into the initial fund raising numbers on WS yet – Romney hasn’t even gone to bat yet.

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The intellectual difference as to how men and women frame their personal narratives.

Can men and women just be friends?

The men answer no, but leave out the obvious answer: “Well, sure, if she’s not attractive.” 😉

I love the fact that, after listening to all these women say that men and women can be “just friends”, he asks the follow up question: “So, do you think he would hook up with you, if you gave him a chance?”

All the pictures you could ever want to permanently crush any hope you might have ever held for the future of humanity.

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I’ve noted elsewhere that lots of people don’t think Newt Gingrich has a prayer of becoming president, not even the Republican nominee.

Lee Stranahan thinks Newt Gingrich is inevitably our next president. Well, that makes two people (Newt, and now Lee). I still remain very dubious.

From back when the Gingrich campaign was imploding, The 11 Craziest Things Newt Gingrich has Ever Said.

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Vital Statistics:

Markets are rallying this morning on a better-than expected bond auction in Spain. Retail Sales came in lower than expected, though. Retail Sales came in + .2% vs expectations of +.6%. Retail sales less autos and gas came in +.2%. Later this afternoon, we will get the FOMC decision. Nobody expects any changes, but the market will focus on the language. It will be interesting to see how Europe is addressed. While US banks don’t have huge exposure to Irish and Greek banks, they do have massive exposure to the UK, German, and French banks.

Best Buy is down premarket after stinking up the joint with a lousy 3Q earnings report. The miss was largely attributed to “promotional costs,” which is retailer-speak for “we had to cut prices more than expected to move the merchandise.” This has been a consistent theme – the consumer is back spending money, but they are very price-sensitive.

The MF Global hearings will continue this afternoon with testimony in front of a Senate Panel. Jon Corzine will be there, as well as MF Global’s CFO and COO. The CFO and COO have stated in prepared testimony that they don’t know where the customer funds went either.

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Hat tip to Ace of Spades HQ. I have never been to San Francisco, but this was still very funny.

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From The Economist:
Protest in Russia
A Russian awakening

AFTER several days of tension, clashes and arrests following Russia’s rigged parliamentary election (http://www.economist.com/node/21541455) on December 4th, yesterday something unexpectedly good happened. Tens of thousands of middle-class Muscovites held a peaceful rally in the centre of Moscow, the biggest such event since the early 1990s.

Astonishingly, there was not a single arrest. Indeed, some of the thousands of
policemen and interior-ministry troops showed sympathy for the protestors.
This was an uplifting display of both dignity and indignation. Citizens were riled not
only about the electoral fraud, but at being treated as imbeciles by their leader,
Vladimir Putin. There was anger at the Kremlin, calls for “Russia without Putin” and
against the ruling United Russia party (“the party of thieves and crooks”), but no
aggression. The crowd contained not only liberals but also Communists, anarchists
and some nationalists. But protestors were almost conspicuously polite towards each
other.

Some carried white flowers, which they tried to give to the police. They made jokes.
146% of Muscovites are for free elections one sign read. Another said: I did not
vote for these bastards. I voted for other bastards. I demand a recount.


The speakers included liberal politicians, such as Vladimir Ryzhkov and Boris Nemtsov,
but also Boris Akunin, a famous writer, and Leonid Parfyonov
(http://www.economist.com/blogs/easternapproaches/2010/11/russian_media) , a
celebrated television journalist. They demanded the immediate release of more than
1,000 political activists arrested during last week’s protests, a full investigation into
electoral fraud allegations, a new election, the sacking of Vladimir Churov (head of the
electoral commission) and the registration of all opposition parties, not just the ones
sanctioned by the Kremlin.

The government is unlikely to meet any of these demands. But the rally has already
achieved its most important result: the political awakening of Russia’s urban middle
class. Over the past decade these people have devoted their energy to making
money, consuming and travelling, allowing Mr Putin to consolidate unprecedented
power, eliminate alternative sources of influence and turn television into a tool of
propaganda.

But yesterday the protestors showed themselves to be a political force. “We exist! We
exist!” they chanted. They were educated and affluent—many of them carried iPads—
and were keen to make their voice heard. The protest had been organised on social
networks, but yesterday this Facebook crowd turned its virtual agitation into political
reality.

The rally was a rare example of all sides showing sense. The authorities allowed the
demonstration to go ahead and showed restraint in policing it. The organisers went
out of their way to stop provocations and keep the event peaceful. Even the statecontrolled media, which had completely ignored all previous demonstrations and
suggestions of electoral fraud, reported the rally in a balanced and accurate way.
A small group of radicals who tried to hold their own event at Revolutionary Square
were ignored by everyone, including the police. Their leader, Eduard Limonov, bitterly
complained that his revolution had been stolen. But for a few hours yesterday,
Russia’s capital felt democratic, despite the heavy police presence.

Similar, if smaller, rallies were held in some 90 cities across Russia. (Some ended with
arrests). Almost everywhere protestors chanted “Russia”. This is what United Russia
members were encouraged to do by Mr Putin at their recent party conference. But
yesterday it had a very different sound, and it was a very different Russia.

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Ruth Marcus tells us that gay marriage is good politics.   William Baude, in his maiden voyage at Volokh, gives us some insight into the complexity of purely legal issues regarding marriage, gay marriage, and DOMA.  Baude continues tomorrow for those inclined to follow legal arguments, as I am.

Were I a state legislator, I would vote to legalize gay marriage in my state.  As a federal constitutional issue, despite my idea of what good politics is, I would be very hesitant to impose an “equal rights” argument.  Not because that argument has no appeal for me, but because marriage itself is not a constitutional issue.  I full well know that Loving made it one in the case of race, and I think that was justified on 14th A grounds, from the historical perspective.  But that does not necessarily apply to all other conditions of distinction.

So now I will tell a funny story about an old war I lost in Austin.

In the late 70s and early 80s I represented Braniff’s then wholly owned Driskill Hotel.  Did their employment stuff, mainly.  Well, gay activists began dancing mano a mano and femme a femme in the 1886 Club, and Braniff wanted it stopped, because it pissed off the pilots who always frequented the club.

The hotel’s manager, to whom I directly answered, was gay, and had not thought about it until the big cheeses in Dallas came down on him.

Austin had just passed its first anti-discrimination law based on sexual orientation or preference.  I advised my client to quietly break up all same sex dancing couples and offer them a free drink or an escort out of the club, setting up the confrontation.

The City prosecuted.  We went to trial before a jury of 6.  The City was represented by its own attorneys and a volunteer from a SF, CA Gay Rights organization.

On cross examination, I elicited testimony from the dancing gays that each could have physically chosen to dance with someone of a different gender.  Some had done so – mano a femme gay dancing.  Thus I was able to obtain the admission that it was not their sexual orientation that kept them off the dance floor.

On my defensive case, I put on a gay dance instructor from Arthur Murray who explained that he was gay, but that he taught traditional dance, with steps, patterns, and a lead and follower role.  He said that in traditional ballroom dancing, a male and a female were the dancers.  I had set up the prosecution to ask more questions, and they did.  They crossed my “expert” by asking him to admit he would prefer to dance with a man.  He answered that he preferred sex with men, but formal ballroom dancing was not about sex, it had rules.  He preferred to dance with women, otherwise it was not dancing.  He  persisted in saying that same sex dancing was not about dancing, but about sex.  He allowed as how PDA is offensive.  The more he spoke, the more the jury giggled.  I thought that was a good sign – they obviously liked the guy. The prosecutors asked about Middle Eastern formal dancing, with men only.  My expert brightened up and said if that was what 1886 Club had prohibited they would be wrong, because that was traditional dancing.

They had no experts on dance.

Lost 6-0.  Liberal Austin jurors were not buying.  Politically, same sex dancing had come to  Austin.  I thought I had made a record for appeal, however, and told the manager.  He said he was happy to have put up a good fight but happy to have lost [not to tell that to Braniff, however].  And so it went.

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Club for Growth has a chart on S&P Returns for the 3rd year of recent presidents. 1995 under Clinton was awesome! The lesson? We should have elected Hilary Clinton.

I’m not a fan of such selective comparisons (if we compare every 3rd Sunday in a Leap Year and take an average, this president is the worst ever), but was curious if there’s anything meaningful to it.

Historically, incumbency is power. I can see Obama losing handily to a solid conservative Republican, given other externalities. If we had the economy of 1996, Obama would sail to victory. As it is, even without the primary challengers, I see Obama as vulnerable. But losing to Mitt Romney or Newt Gingrich? Incumbency is still awfully potent.

Still, it could be a very good time for a mediocre candidate to become President (unlike 2008), and natural cycles might make a president Romney look a lot better in 2014 than a president Romney would have looked in 2010. So, you never know.

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