- 10 Tuesday PM Reads
- Web Equity
- Cheap Yuan Unfair: US Ambassador
- Guide To Being A Pirate
- What Does the Ratio Between Bonds/Stock Suggest?
- Housing starts weaker than expected
- Italy still has higher rating than Hungary and Turkey
- 10 Tuesday AM Reads
- Res Politica versus Res Economica
Posted: 20 Sep 2011 02:15 PM PDT
Eclectic Train Reading:
What are you reading?
Posted: 20 Sep 2011 12:45 PM PDT
Based on the music listening habits of Musicovery’s registered users, Mapping Music by Likes [musicovery.com] demonstrates how people’s general music preferences share some universal values.
In particular, when the ratio between number of listeners who tagged “I like” and “I don’t like” is calculated, it can be observed that almost all positively ranked songs carry some form of “universal” values, such as wisdom, compassion, love, peace, etc.
click for Musicovery
Posted: 20 Sep 2011 11:30 AM PDT
Posted: 20 Sep 2011 09:57 AM PDT
Posted: 20 Sep 2011 09:48 AM PDT
Posted: 20 Sep 2011 09:00 AM PDT
Michael Gayed of Pension Partners wonders if that the current Stock/Bond ratio is suggesting a rally:
Posted: 20 Sep 2011 07:55 AM PDT
Aug Housing Starts totaled 571k annualized, 19k below estimates and down from 601k in July. After a steady increase over the past few months, multi family starts fell by 24k. Single family starts fell by 6k to 417k. Permits though saw an increase in each category, totaling 620k, 30k more than expected. To quantify the change in single family vs multi family construction seen over the past few years, single family starts are 263k higher than multi family compared to 1.489mm in Feb ’06. In terms of construction jobs, over the past 6 months, 3.526mm homes (both single and multi) have been completed vs the 3.482mm of new starts over that same time frame so many are now looking for more work. Bottom line and no surprise, single family starts continue to bounce along the bottom with the extraordinary competition from the supply of existing homes while multi family starts remain a bright spot as vacancies fall due to the fall in home ownership rates.
Posted: 20 Sep 2011 06:48 AM PDT
After the initial downward response in the S&P futures to the S&P downgrade of Italy, markets realized again that rating agencies follow the markets, never lead them. To put into context, Italy’s 5 yr CDS is at a record high again at 507 bps and S&P downgraded them to A, 3 notches above Moody’s and 2 above Fitch. Hungary’s 5 yr CDS is trading at 475 bps with a BBB- rating and S&P just upgraded Turkey to investment grade at BBB- and Turkey’s 5 yr CDS is at 258 bps. Spain sold 1 yr and 18 month debt at yields about 20 bps above those sold in Aug. Greece will have another call with the EU and IMF at 1pm est time and most signs still point to them buying more time (time is now in weeks, no longer months and years). Portuguese yields are rising to 2 month highs. European stocks got a lift at around 5am after Germany’s Sept ZEW investor confidence in their economy was a touch better than expected even though it fell to the lowest since Dec ’08. In Asia, Hong Kong’s unemployment rate in Aug fell to 3.2%, the lowest since 1998. The FOMC 2 day meeting begins today and as I’ve said repeatedly, incremental Fed action is now impotent and in fact damaging.
Posted: 20 Sep 2011 06:28 AM PDT
Here is what I am reading today:
What are you reading?
Posted: 20 Sep 2011 05:30 AM PDT
Res Politica versus Res Economica
Today's Outside the Box is the latest chapter in my ongoing discussion with Dr. Woody Brock on the rationale of the politics of economics. In this essay, Woody explains how political science has taken a back seat to economics, and how to redress the imbalance we find today between what he terms “Res Politica” (the rule of politics) and “Res Economica” (the rule of economics or money). Where the rubber meets the road here is that our important economic decisions are increasingly being made by politicians (who are not particularly well-schooled in either economics or political science), with consequences that are likely to be dangerous. You will have to put on your thinking cap, but this will provide you with some real insights and food for thought.
Woody is one of the best "big-picture" economic theoreticians of our time, and that's why I treasure the times we get to talk (or rather I get to "sit in “school" and learn), and have invited him to speak at our annual conference. He has already committed for next year, so save the dates: May 2-4 in La Jolla. In the meantime, you can find more of Woody's thinking at his company's site, Strategic Economic Decisions. (For the record, this is the first OTB I have sent from my iPad.)
Your hoping the politicians are listening analyst,
John Mauldin, Editor
RES POLITICA versus RES ECONOMICA
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