We can only hope that the chart below, which shows a rather disturbing linkage between consumption of chocolate (in kg/yr/capita) and Nobel prize laureates per 10 million of population, is simply a good confirmation of the old adage which everyone these days seems to forget (especially those who look at "black box" models and predict the outcome of the presidential election with 75.304% accuracy in hopes of signing even better book deals) that correlation most certainly is not causation. Of course, for the vast majority of people who have no idea where statistics ends and heuristics begins, there is nothing greater in life than a high R-squared, which is why we expect that the next generation of Americans will be even fatter (if that is even possible) for one simple reason: their proud parents will fed them intravenous chocolate in hopes of creating the next Economics Nobel prize winner.
For many, the collapse of the housing bubble was the trigger that began the era of economic slowdown Americans find themselves mired in. But recently there have been growing reports in the media of a housing "recovery." So we've invited Patrick Killelea, founder of the popular housing site Patrick.net and author of The Housing Trap: How Buyers Are Captured and Abused and How to Defend Yourself, to clarify the situation. The short answer is this: While there are some markets where home prices are back in line with both fundamental and historic norms, buyers still need to exert caution when making a purchase. Patrick also shares insights from his analysis of years of national home purchases. These include: don't sell too often (the transaction costs will kill your returns), don't upgrade too frequently (it's more costly than you think), and it's worth it to transact without an agent if you're able to do so.
With everyone's attention focused on the aftermath of hurricane Sandy, some may have forgotten that the Middle East is the proverbial powder keg, just waiting for an Archduke and a lit match, not necessarily in that order. Moments ago, Israel's military reminded us of just that when it reported that 3 Syrian tanks have entered the Golan Heights DMZ. Because it appears that the absolutely deranged and insane (or at least that's how it will be portrayed) Syrian regime is not satisfied with provoking the humanistic Western media with "offensive" measures taken against both Turkey and Lebanon, it now has decided to enter the lion's mouth, and is begging, just begging, for a UN-endorsed retaliation. How soon until Syria floats a submarine into New York harbor where it explodes but only after leaving a convenient note saying "Death to the Infidels, Love Syria." Or something just as realistic.
On October 30, the day after the worst natural disaster in New York history struck and flooded virtually all of downtown, Governor Andrew Cuomo tweeted the following dramatic picture of Whitehall station, which was then completely submerged underwater. A few days later, Whitehall station is almost dry. Watch this MTA video to see how they did it in 3 short days.
Mitt Romney has a credibility problem. He changes his beliefs like laundry (abortion, medical insurance, whether Bin Laden was worth killing, attacking Iran), refuses to disclose his tax returns, and won't explain how he could possibly pay for the tax cuts he proposes. But there is another scandal in Romney's campaign -- namely Glenn Hubbard, Romney's chief economic advisor, who was chairman of the Council of Economic Advisors under George W. Bush, and is now Dean of Columbia Business School. I interviewed Hubbard for my documentary film Inside Job, and analyzed his record again for my book Predator Nation. The film interview became famous because Hubbard blew his cool after I interrogated him about his conflicts of interest: "This isn't a deposition, sir. I was polite enough to give you time, foolishly I now see, but you have three more minutes. Give it your best shot." But the really important thing about Hubbard isn't his personality; it's that as an economist and an advisor, he is a total, unmitigated disaster.
Supposedly this is big news, so we probably have to report it. Just out from the NY Mayor's office:
We have decided to cancel the NYC marathon. The New York Road Runners will have additional information in days ahead for participants.
— NYC Mayor's Office (@NYCMayorsOffice) November 2, 2012
... and just as the residents of some NY boroughs were eagerly looking forward to the New York version of the hunger games.
From the ECB's Virtual Currency Schemes, aka the "Bash Bitcoin Boondoggle" (p. 27): "A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity." Considering that this elucidation comes from the very same entity that launched the SMP, LTRO, OMT, EFSF, ESM, oh, and of course, TARGET2, and whose head said to not short the EUR as there is "no risk" whatsoever in holding said currency, one would expect that this definition is absolutely spot on...
What a roundtrip! After starting off November with a bang, and after nearly retracing all October losses in the aftermath of the NFP headfake in less than 2 trading sessions, the S&P futures literally imploded, and dropped 23 points from the intraday high, the same distance traveled as it crossed yesterday, only to the downside and on very strong volume for the second day in a row. While the 1400 support in ES is once again in play (ES closed literally on the lows of the session at 1405.5), as we suggested earlier, the far more ominous news is that the AAPL bubble appears to have popped (but, but, it is so cheap on forward multiple basis: guess what - forward multiples are based on forward earnings, which may very well never materialize! and thanks to the dividend, not even AAPL's cash hoard is the bastion it one was) and is now close to entering bear market territory, down just shy of 20% from its all time highs of $705.07 hit on September 12. Now with the 200 DMA taken out, the next support is the 20% retracement from the high which is at $564. After that it is freefall for a long time as a very deep gap needs filling. It is unclear just how much of the selling was there to cause max pain for Dick Bove and Rochdale, for whom every tick lower in the stock means a bigger margin call.Finally, news hitting literally seconds ago that MSFT may be launching its own phone if its partner strategy falters, means there go even more margins.
Perhaps the reason why AAPL is having its biggest daily tumble in recent history on the day it officially launched the iPad mini for retail sale, is because all the people who otherwise would be waiting in line in front of FAO Schwartz and inhaling the smell of fresh horse excrement, are doing all they can to obtain gas. Any gas. Because iHeater, iShower and iFridge just lack that little "oomph" when dealing with people who are cold, smelly and hungry.
Moments ago AAPL broke the 200 DMA. Whether or not this was due to the earlier news from Rochdale getting caught with its pants down, and supposedly losing tons of money due to a rogue trader "buying" the stock as its proceeded to tumble from its all time highs less then 45 days ago (during which time it has lost more than 10 years worth of dividends in market cap), is unclear. What is quite clear, is the moment when the general market realized what had just happened. Sure enough, the jobs number came and want, and ES largely faded that move in under an hour. It remains to be seen if a technical indicator for the world's most widely held stock is more important to the general stock market than how many 60 year old workers the US economy added in October. Oh, and as for that whole iPad mini launch spectacle? Sorry. Time for the iPad Mini Magnum launch... or maybe even the maxiPad.
Bloomberg has an update on the most amusing story of the day, namely that Rochdale appears to have blown daytrading Apple. And guess what: taking a cue from SocGen, UBS, and JPM, it's all a "rogue trader's" fault. Of course, if the trade had gone the "other way", Rochdale would not be needing a bailout, and the rogue trader would be looking forward to a generous holiday bonus.
- Rochdale bought more Apple shares than the brokerage’s management intended around the time of the technology company’s Oct. 25 earnings report, two people familiar told Bloomberg’s Hugh Son, Saijel Kishan and Zeke Faux.
- Rochdale officials told employees a rogue trader amassed the position, one of the people said.
We wonder how many more such "rogue traders" who dabbled in AAPL, and blew up after leveing the house in hopes to make their year on AAPL soaring into year end, will emerge before the next week is over...
The traditional excuse apologists for America's collapsing labor force participation rate use every month is that due to "demographics" and retiring baby boomers, increasingly more old workers are no longer counted by the BLS and as a result, are skewing the labor force. That's where they leave it because digging into details is not really anyone's forte anymore. This would be great if it was true. It isn't. And nowhere is this more visible than in today's jobs report. On the surface, the US generated a whopping 413,000 jobs (after generating a massive 873,000 last month) according to the Household Survey in October. That's great, unfortunately breaking down this cumulative addition by age cohort confirms precisely what we have said: all the jobs are going to old workers, who have zero wage bargaining leverage (as they just want to have a day to day paycheck). To wit: when broken down by age group, the total October increase shows that of the new jobs, 10.7% went to those aged 16-19 (source), 11.6% went to those aged 20-24 (source), a tiny 9.8% went to the prime agr group: 25-54 (source), and a massive 67.8% went to America's baby boomers: those aged 55 and over (source), and who refuse to leave the workforce and make way for others.