Morning Report:

Posted on December 12, 2011 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1243 -15.8 -1.26%
Eurostoxx Index 2288.7 -53.850 -2.30%
Oil (WTI) 98.14 -1.270 -1.28%
US Dollar Index (DXY) 79.277 0.645 0.82%
10 Year Govt Bond Yield 2.01% -0.05%

European stocks are weaker this morning as Moody’s announced it will review ratings for all Euro sovereigns in the first quarter of next year. Italian sovereign yields are 34 basis points higher and Spanish sovereign yields are 23 basis points higher. US futures are weaker on Europe and a profits warning from Intel.

The WSJ has an article this morning discussing the strength of consumer spending. We have been noting nascent strength in consumer spending / sentiment over the past few months, and there appears to be follow-through. The article goes on to caution that spending has increased without an increase in incomes, which is unsustainable. That is true, but is also typical of how recessions end. Demand increases => spending increases => unemployment decreases. I also want to throw out a few charts that illustrate what is going on with the consumer.

The first chart is US Household debt as a percent of GDP. Household debt as a percent of GDP has been rising steadily since WWII, and a lot of that has been driven by the widening acceptance of credit cards. That said, the consumer has delevered in a remarkable way since the recession began – Debt to GDP has dropped to 87% from 98% in late 08. But, if you look at the chart, you would say that household debt would have to drop to 70% of so to get back to “healthy” levels.

Chart: US Household Debt as a Percent of GDP:

That ratio looks at consumer debt versus the economy as a whole, but it doesn’t tell the whole story – what matters to the consumer is their debt versus their incomes, and spending is a function of disposable income. Disposable income is also a function of interest rates – as rates fall, debt service falls. The chart below looks at the ratio of debt service payments to disposable income. Debt service payments have dropped more dramatically than debt because interest rates have fallen and a large chunk of those debt service payments are fixed rate mortgages which aren’t going up, even when rates start to increase in a few years.

Chart: Ratio of Debt Service Payments to disposable income:

If you look at debt service to income ratios, not only has debt service dropped to “healthy” levels, it has dropped to very depressed levels – levels which preceded large increases in consumer spending. If incomes rise even slightly, it will have an outsized effect on the ratio. Just another indication of pent-up demand and the path out of the malaise.

Filed under: Uncategorized | 20 Comments »

Sunday Funnies a la lmsinca

Posted on December 11, 2011 by Michigoose

Not so much political, as just musings on life. . .

Peanuts

Story of my life here in Utah sometimes. . . thankfully not yet this year!

Calvin and Hobbes

I miss Calvin and Hobbes.

Pearls Before Swine

But Pearls Before Swine has filled a lot of my need for sarcastic humor.  What’s going on in your worlds today?

Filed under: comics | Tagged: | 61 Comments »

It’s Saturday, and Things are Slow

Posted on December 10, 2011 by Michigoose

Both here at Chez Michigoose and, evidently, at ATiM.  So I thought I’d try my hand at embedding videos.

First up, is an amazing ad from Rick Perry.  What makes it amazing to me is the amount of dislike that he manages to express in one small, 31-second snippet.  Gays, non-Christians (or even Christians who just don’t publicly proclaim their faith–which I’m pretty sure is something that Jesus himself suggested), the President. . . he really packs it in there!

Second up is a clever rebuttal.

All I’m gonna add is that, as a commenter on Political Animal noted, I don’t think that Rick Perry’s barn coat has ever seen an honest day’s work.  What is it about this man, Mark, Mr Troll McWingnut, and others familiar with Texas politics, that has made him such an unstoppable force within the state?  Now that he’s on the national stage he sure seems like a bit of a doofus.

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Hot Tamales

Posted on December 10, 2011 by Arcanaut

Hi all,
It is a tradition throughout Latin America to make tamales around Christmas. Make them, share them, compare them (yours are best, of course). Having married a Tica, we carry the tradition forwards. We use her Tia Lijia’s recipe with a few modifications.
A tamal is essentially a way to convert scraps into a meal. I want to call it a tamale too, but the singular is tamal and the plural is tamales (note, tamalays, not tamalis). We don’t have any truck with those Philistines in Mexico who use corn husks to wrap them. Costa Rican tamales are wrapped in banana leaves, which are great for steaming. The quality of the banana leaf is important. My beloved Keen does the selection and slicing of the leaves.
Here’s how you make Fallas-Baldi tamales. Take two prepared banana leaves and place them cross-wise. That’ll form a good seal for the steaming. Next, put on a generous dollop of masa. That’s the critical component and I’ll explain its preparation in a bit. Now, add the presents to your package. A couple pieces of chicken. A couple of olives. A few capers. Some sautéed, julienned carrots and bell pepper. Raisins are traditional, but we use dried, sweetened cranberries. Wrap up your tamal, put it against another one and tie up into a package. Your tamales will be steamed with others in batches. I think we make about 100 tamales each year, most of which are to be given away.
The masa is the crucial component. The first step is to make the broth. The standard approach is to boil chicken breasts in water then add spices (condimento—a Latino spice). One then removes the chicken breasts for later preparation. Spices are added to the broth and then masa harina (corn flour with lime, Maseca is a popular brand that we use). Mashed potatoes are the secret ingredient in the FB masa. It’s also important to add plenty of fat. We use Crisco, but I suspect that lard is traditional.
Here was my one and only innovation. It struck me that (a) the chicken would be over-cooked and (b) wouldn’t add enough flavor to the broth. I’m big into stock and poached chicken is lovely. It struck me that the basic method overcooked the chicken and didn’t add enough flavor to the broth. This is my one and only innovation (approved of by the tamal nazi).
I purchased 8 chickens at Costco this year. The thighs and legs were removed, skinned, and set aside for later use. The breasts were removed off the bone and set aside. The backs and wings were chopped into pieces, roasted, and used to make stock. It’s a standard stock, with the substitution for parsley with plenty of cilantro and culantro. The latter is a flat-leafed herb with a flavor similar to cilantro. Cilantro is actually called culantro in Costa Rica; culantro is called culantro coyote. It was considered something of a wild herb there and we can finally get it in the U.S. (exported from Costa Rica). We’re going to wind up with about 3 gallons of stock out of all of this.
OK. We just poached the chicken breasts in the stock. In the past, I’ve poached the chicken breasts in water and then added the bones, mirepoix, and herbs to make stock. I think I like this way better as the stock flavors the breasts and vice versa. The chicken is then cut into ~1/2 pieces. It’ll be sautéed in onions with condimento (spice blend) and achiote (which colors the chicken). The julienned bell peppers and carrots will be similarly sautéed.
For a vegetarian friend, I make a few tamales without chicken. She’s not bothered about broth, so I  like making a few tamales con camarones. One year, we made masa with a shrimp stock. Keen indulged me. We also have some pork loin in the freezer, so I’ve defrosted it and we’ll make a few pork tamales.
We’ll be busy tomorrow. Friends are coming over, drinks will be drunk and many tamales will be made.
¡Felix Navidad!

Filed under: cooking, food, latino | 8 Comments »

Bits & Pieces (Friday Night Open Mic)

Posted on December 9, 2011 by Kevin S. Willis

I got nuthin’. I started watching the new Battlestar Galactica, finally—it’s awesome.

Otherwise, it’s all yours.
— KW

Filed under: Uncategorized | 8 Comments »

Great Read on End of Life Care

Posted on December 9, 2011 by novahockey

This essay looks at how doctors make end of life care decisions for themselves. They don’t subject themselves to what the rest of us do.

What are we getting for the money we spend: “What it buys is misery we would not inflict on a terrorist.”

More: “Several years ago, my older cousin Torch (born at home by the light of a flashlight—or torch) had a seizure that turned out to be the result of lung cancer that had gone to his brain. I arranged for him to see various specialists, and we learned that with aggressive treatment of his condition, including three to five hospital visits a week for chemotherapy, he would live perhaps four months. Ultimately, Torch decided against any treatment and simply took pills for brain swelling. He moved in with me.

We spent the next eight months doing a bunch of things that he enjoyed, having fun together like we hadn’t had in decades. We went to Disneyland, his first time. We’d hang out at home. Torch was a sports nut, and he was very happy to watch sports and eat my cooking. He even gained a bit of weight, eating his favorite foods rather than hospital foods. He had no serious pain, and he remained high-spirited. One day, he didn’t wake up. He spent the next three days in a coma-like sleep and then died. The cost of his medical care for those eight months, for the one drug he was taking, was about $20.”

This isn’t saying anything that I haven’t already said, so I’m just passing it along.

Filed under: Uncategorized | 16 Comments »

Bluetick Coonhound

Posted on December 9, 2011 by novahockey

I have a bluetick coonhound and can’t say enough about how wonderful they are. This one needs a home.

Filed under: Uncategorized | 6 Comments »

Morning Report

Posted on December 9, 2011 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1245 9 0.73%
Eurostoxx Index 2311.2 23.120 1.01%
Oil (WTI) 98.24 -0.100 -0.10%
US Dollar Index (DXY) 78.865 0.037 0.05%
10 Year Govt Bond Yield 1.98% 0.01%

Stocks are up this morning on the perception of progress in Europe. Here is the document. In typical European fashion, it is short on specifics, but the markets seem to like what they see.

Jon Corzine “never intended” to authorize the transfer of segregates loans. He had mentioned that it is possible that someone below him misinterpreted his directive to “fix this.” In separate news, it looks like George Soros took some of Corzine’s position off of his hands.

The University of Michigan Consumer Sentiment index was released this morning. It shows that the sentiment numbers have picked up from late summer / fall, but are still pretty depressed.

Chart: University of Michigan Consumer Sentiment Index:

Filed under: Uncategorized | 38 Comments »

Bits & Pieces (Thursday Night Open Mic)

Posted on December 8, 2011 by Kevin S. Willis

Ron Paul gets the Bad Lip Reading Treatment.

Obama administration says Fort Hood shootings were “workplace violence”. Well,  I guess that’s true, but . . .
The background here is that on August 20, 2011, the independent commission that was set up to determine how best to do force protection on base – where almost everyone goes about their business unarmed – made these preliminary findings, among 79 recommendations:

Educating commanders about the symptoms of potential workplace violence and the tools available to them to address it.

Ensuring commanders and supervisors have access to appropriate information in personnel records throughout a service member’s career.

Improving law enforcement and force-protection information sharing with partner agencies and among installations to ensure all relevant personnel are aware of and able to analyze and respond to potential threats.

Expanding installations’ emergency-response capabilities, including enabling enhanced 911 to notify dispatchers of a caller’s location, mass notification and warning systems to guide installation personnel and emergency responders to an emergency, and a common operating picture to ensure emergency responders have access to real-time information in a crisis.

Integrating force-protection policy through the creation of a consultative and policy-making body that will bring together the various entities across the department with force protection responsibilities.

Ensuring the department provides top-quality health care to servicemembers and health care providers by hiring additional health care providers, particularly in the mental health field, and ensuring health care providers receive appropriate post-deployment respite and time at home between deployments.

Gates also has directed the assistant secretary of defense for homeland defense and America’s security affairs to continue to lead the follow-on review and to provide regular progress reports to him.  Killeen Daily Herald, August 24, 2011.




So the criticism of the use of the phrase “workplace violence” when the security team was charged with learning as much as it could to make bases safe (force protection) seems like much ado about nothing.  You will recall that other Army shrinks, including other Muslim Army shrinks, warned about Maj. Hasan well before the shootings, but the command structure simply did not take them seriously.  The preliminary panel report addresses the training of command staff, so that they will take reports from their health care pros seriously.

But everybody gets to gripe about something.

A blogger is not a journalist, meaning they don’t enjoy the same 1st Amendment protections, I guess. Be careful what you say, folks, at least in Oregon. 

Filed under: Uncategorized | 33 Comments »

Morning Report

Posted on December 8, 2011 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1254.1 -9.9 -0.78%
Eurostoxx Index 2331.6 -13.340 -0.57%
Oil (WTI) 100.36 -0.130 -0.13%
US Dollar Index (DXY) 78.544 0.125 0.16%
10 Year Govt Bond Yield 2.05% 0.02%

European Central Bank President Mario Draghi has shown the markets his bazooka and they yawned. The ECB cut interest rates by 25 basis points and then further announced they would offer banks 3 year loans and relax collateral requirements. This is an extension from the one year loans currently being offered; the market had expected an extension to 2 years.

Initial Jobless Claims came in lower than expected – 381k vs 295k expected. Continuing Claims were 3.58million vs. 3.7 million expected. This print approaches the post crisis low of 375 set in Feb 2011. Just another sign that the labor market is beginning to thaw.

Jon Corzine will be in front of Congress this morning to address the MF Global fiasco. In his prepared statements, he claims he has no idea where the money was and wasn’t involved in the day-to-day movement of capital at the firm. He doesn’t understand why the accounts haven’t been reconciled yet. The Kenny Lay defense, I guess. I would bet the missing money went to cover margin calls. If so, the money should be recoverable – technically it wasn’t MF Global’s money to give. Find out who made the margin call and you will know who is about to make an earnings pre-announcement.

Bloomberg released some of the findings from its Bloomberg Global Poll this morning. 61% of the respondents (mainly professional investors) believe China will face a banking crisis within the next 5 years. It will be interesting to see how the “world’s best managed economy” behaves once the bubble bursts. I am sure the Thomas Friedmans of the world will not abandon their fixation that the government can fine-tune the economy and manage it intelligently.

Chart: Initial Jobless Claims:

Filed under: Uncategorized | 59 Comments »

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