I found this to be particularly humorous excerpt from Prudent Bear's daily market wrap:
“I don’t have a choice but to invest,” the 51-year-old said. “If I don’t, I won’t be able to retire. I’m not necessarily perfectly at peace with it, but I feel like I don’t have any choice but to be in the market.”
That’s an amazing thing to say for a person worried about retirement. After all, she could have said any of the following:
“I don’t have any choice but to save more money.”
“I don’t have any choice but to stop buying six dollar lattes.”
“I don’t have any choice but to investigate the lower cost of living in Sub-Saharan Africa.”
Instead she said, “I don’t have a choice but to invest.” The meaning of the word “invest,” like the word “thong,” has changed over the years. “
The whole article could be taken as tongue in cheek, except that this is really what the guys at Prudent Bear think. All their stuff from Friday is pretty smartassy. I think it's their intern's last day for the year and maybe they were celebrating a little. Whatever. Entertaining financial writing rocks.
Posted by nicole at 10:12 AMI think that part of the strategy for Iraq has always been to draw the Al Queda people out of Saudi Arabia, where we can get at them. Thus, I particularly agree with this bit of an OpEd at the New York Post:
>On the contrary. We've taken the War Against Terror to our enemies. It's far better to draw the terrorists out of their holes in the Middle East, where we don't have to read them their rights, than to wait for them to show up in Manhattan again.
While I really don't believe that the Bushies have forgotten how many of the 9/11 hijackers were Saudis, I suspect the chuminess of the House of Saud and the Bush Sr. may prevent any kind of direct attack on certain terrorists.
I just hope they have some fucking plan for dealing with the Saudi complicity in 9/11. Our liberty was lessened by the attacks, thanks to this administration, and if that was for nothing, I will be disgusted.
On the Wall Street Journal's front page right now, I found this:
Palestinians vowed to round up those behind a Hamas suicide bombing that killed at least 20 people, including five Americans, and Abbas moved to sever all ties with Hamas and Islamic Jihad.
Don't they do this every week now? Who *seriously* thinks there's a "peace process" in place here, much less any fucking MAP to lead them to "the" peace. Whenever they start talking about "the" peace, you know there ain't any.
Who really takes the Palenstinians at their word, over and over again? Someone? Bueller?
Posted by nicole at 08:22 PMIf you've watched the performance of Fannie Mae and Freddie Mac in the last five years or so, you've seen a shooting star. They really look too good to be true, and now that interest rates are going up, it turns out that they are. The going story is that they are inadequately hedged against upward movement in rates. NY Times claims to have an insider who says so. Benson points out just how much money the F&F Gang control, and it's pretty damn alarming.
I saw an article in the NY Times discussing things, and I meant to write about that, but I was waiting for some confirmation, since I don't think much of the Times. Now that I see that somewhere else, the Times article has gone archive on me.[1]
In any case, a guy named Richard Benson has an essay (and pictures!) explaining exactly how Fannie and Freddie are fucked. It's brought to you by Prudent Bear, a place I like on general principle.
Here's a gem from that:
Fannie and Freddie have no doubt not even considered a world where their customers will be facing higher heating prices, insurance, property taxes, interest rates, and virtually no home equity to start, along with a home bought at the top of the real estate bubble.
I would like to point out that the F&F Gang don't, as it turns out, have a guarantee of the full faith and credit of the U.S. Treasury. People *like* to think they do, but this is not actually the case. The real story then is whether the U.S. taxpayers will be forced to bail these idiots out or not. Gosh, I hope not.
[1] This story is from 7-August, no where near 30 days ago. If that's the way the Times does it now, this will not help their reputation. Of course, I'm sure they think blogs are a scourge on the earth, so what do they care?
Posted by nicole at 08:22 PMStephen Roach's twice-weekly column has some interesting things to say about productivity:
It all boils down to the essence of productivity enhancement -- whether efficiency gains are driven by synergies between human capital and technological innovation or by hard-nosed cost-cutting. The former is “good productivity” -- the stuff of rising prosperity and lasting improvements in a nation’s standard of living. The latter is “bad productivity” -- centered on strategies of downsizing that have the clear potential to lead to increasingly hollow enterprises and labor markets.
The basic gist of this piece is that any recovery we are seeing now will not have a lasting effect. The GDP for the second quarter was mostly buoyed by government spending refilling the arsenal after using munitions in the war on terrorism: "A 44% annualized surge in defense outlays accounted for fully 70% of the total increase in national output." He also has some not-so-nice things to say about the U.S. Current Account Deficit.
Stephen Roach never criticises political actions, he seems to be a fairly pure analyst of the economy. I've been keeping up with his columns so far this year, and he never disappoints. I can't help but notice journalists capitalizing on his ideas and writings without making any actual attributions. I think he's a trend creator in business journalism, not a follower.
If you like the ones I've linked to, the Morgan Stanley digest page links to all their daily squawk box-type reports. He usually writes on Monday and Friday, but there are some deviations from that including August 11.
Posted by nicole at 10:39 PMThe Economic Policy Institute points out that the drop in the unemployment rate for July rings hollow:
The fall in unemployment was largely driven by a drop of 556,000 in the labor force, and thus is not indicative of an improvement in the labor market (employment actually fell in the survey from which the unemployment rate is derived). In fact, hours worked per week, a measure of the strength of labor demand, fell to the lowest level on record (tracking began in 1964). Despite some positive indicators of renewed economic activity, the nation remains mired in a deep and persistent hiring slump.
Basically, people are giving up looking. Underemployment is a big issue. Payrolls have contracted by one million jobs since the "recovery" began. None of this is reflected in a logical manner by the BLS numbers.
It's a short piece, just one page, and worth a read.
Posted by nicole at 10:36 PM