The Big Picture |  |
- The Greatest OWS Protest Sign Ever
- Fall Shopping: What are People Buying?
- The Most Important Facts about the Global Debt Crisis
- Taxing the Rich Gains Unexpected Support in Europe
- I Support The Occupy Movement – banner project
- 10 Monday AM Reads
- US Stock Market: Bulls vs. Bears; Historians vs. Risk Takers?
- Throwable Panoramic Ball Camera
- Occupy Wall Street Must Occupy Congress, AG offices
- tUnE-yArDs – ‘Bizness’
| The Greatest OWS Protest Sign Ever Posted: 17 Oct 2011 01:00 PM PDT |
| Fall Shopping: What are People Buying? Posted: 17 Oct 2011 11:30 AM PDT |
| The Most Important Facts about the Global Debt Crisis Posted: 17 Oct 2011 09:00 AM PDT Yesterday, we looked at percentage of debt by US President. Today, we are looking at debt by nation: > Source:
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| Taxing the Rich Gains Unexpected Support in Europe Posted: 17 Oct 2011 08:35 AM PDT Europe’s richest are following the words of Warren Buffet, and are willing to pay more in taxes to alleviate growing economic tensions with middle class. Video courtesy Fox News. Photo: Getty Images. WSJ 10/17/2011 8:12:53 AM
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| I Support The Occupy Movement – banner project Posted: 17 Oct 2011 07:15 AM PDT I am digging this new movement: >
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| Posted: 17 Oct 2011 06:30 AM PDT Here are my early morning reading material:
What are you reading? > This Occupation is going too well . . .
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| US Stock Market: Bulls vs. Bears; Historians vs. Risk Takers? Posted: 17 Oct 2011 05:30 AM PDT US Stock Market: Bulls vs. Bears; Historians vs. Risk Takers? ~~~ "The jury is still out." That legal term has been a headline for two centuries. In the 1940s, its usage morphed to a broader reference factual findings of all types. We will apply it to the stock market today. The jury is still out but the evidence keeps coming in. For the last several months, we posited that the August 8 bottom of the S&P 500 Index at the 1100 level was a robust selling climax. Whether it was an interim selling climax or a final selling climax is unresolved. That jury is still out. The selling commenced at the beginning of May. It accelerated sharply to the down side at the end of July and into early August. The reasons that caused the sell-off are history now, and discussion of them is redundant. We have written on several occasions that the 1100 level was established with intraday trading on August 8, tested twice in the futures market and held. In the subsequent rally and sell-off, the 1100 level was pierced on only one day. The 1100 S&P level has continued to hold and reflect a tentative bear market bottom. The most recent test that successfully reaffirmed this bottoming level of the S&P 500 Index occurred on October 3. Markets have rallied strongly since. The S&P 500 index is about 1228 in Asian futures market pricing this morning. Many of our internal studies indicate that the potential for an upward move in stock prices is huge. We are positioning accordingly and have been since the sell off intensified in July. We have established this position s risk takers, not as history book writers. On the other hand, there are conflicting and negative forecasts that argue the opposite of Cumberland Advisors' position. The negative forecasts are usually coupled with recession forecasts. Readers see them every day on TV, hear them on radio and read them in the financial press. Harsh and negative forecasts dominate the media. Meanwhile, the economic evidence is mixed. It does not support the recession scenario. The US economy is not shrinking. The economy continues to muddle along at a slow growth rate. There is no strongly robust, apparently upward, trend. There probably will not be one for several more years. Slow growth centered on 2% is more likely to be the norm. Fears of a financial market meltdown or a repeat of Lehman Brothers/ AIG failures of 2008 continue. Very negative pictures can be painted on the outcomes of the European sovereign debt crisis. Other negatives can point to more deteriorating factors in the United States, such as the weak housing market and the high unemployment rate. In our view, all of these factors are known. They have been established for some time. They have been mixed into the pricing expectations in markets. In essence, they are "old news". As investment risk takers, we believe the August 8 climax at 1100 level was a final climax. That determination is the basis for our investment posture. The climax is/was enough for us to take a position on markets. It is not enough for us to write a history book chapter. For historians, a candid assessment of the outcomes would suggest that there is no sure way anyone can know now. At the very least it was a robust interim climax and set the stage for the strengthening stock market that has occurred since. For historians, it remains to be seen if the 1100 level was the final selling climax low in a market that peaked on April 29, sold down in August, retested the low in October, and is firmly in an uptrend. Historians will not know that until the market is much higher and more time has passed. Note that here is an important difference between investment risk takers and history book writers. Historical studies suggest that there are two possible scenarios at work. At this point in time they would look alike so either one is possible. Scenario 1. History says that if there is a serious, prolonged recession in the next year or so, then it is likely that we witnessed only an interim selling climax on August 8. That means there is another leg down in stock prices ahead of us. That is the bear case promoted by numerous money managers and advisory firms who forecast an S&P 500 Index level of somewhere between 800 and 900 as a bottom. That is not the perspective at Cumberland. We support a second scenario. Scenario 2. That history says there may not be a second leg down recession. Instead it calls for a slow but steady rate of growth centered on 2% in real terms. It will be accompanied by low rates of inflation and very low interest rates. This is likely to be in place for the next couple of years. This means the profit share to business will remain very high, and it means there will be a slow but steady growth rate of nominal GDP. From this rising nominal GDP, the earnings for American business are likely to stay high and continue to rise. Furthermore, there is some evidence that the housing market is bottoming in some regions. This data is also mixed. However, there are gradual signs that a base is being formed in some housing sectors. The result of that is to ease the pressures on the banking system, and indicate that the credit problems attached to the housing debacle may begin to subside. If this is so, and we believe it is, then the financial stocks, which have been devastated for four years, are currently positioned for a buying opportunity. In Cumberland's case, we have scaled into financials several times and taken up the weights in the regional banks. So far, that is proving the correct course of action. We have taken the overall financials exposure above market weight. We continue to be a scaled buyer in financials. For an excellent discussion of the banking sector, see Andrew Bary's column in Barron's this weekend. For superb detailed discussion about banks see Dick Bove's research at Rochdale Securities. Additional excellent discussion is found in Jason Benderly's proprietary work on the financials and markets. Ten days ago, the entire banking system of the United States was for sale below its stated book value. One could argue it was for sale below its tangible book value, which means you could buy all the banks in the United States at stock exchange prices trading for less than their liquidation value. Clearly, that is an absurd pricing level. Are banks now sound? Answer: some are, some are not. Are there still problems ahead in the financials and in the banking sector? Obviously, yes. Is regulatory change an issue? Again, yes. Are earnings derived from net interest margin an issue? Once again, yes. Does that mean that banks are dead forever? Our answer is a resounding no. The time to enter a sector and start to take up the weights is when it has been devastated in a bear market for several years and priced to an extreme. When you price the entire banking sector below its liquidation value, below its tangible book value, you are seeing a pricing level in a climate where all the bad news is known or identified. Only then are you are defining an entry point. Further, the financial sector has lost ten percentage points of the value share of the stock market since its peak. Think about this sector where it once was 24% of the market weight and derived 40% of the market's earnings. Now it is 14% of the market weight. Its earnings are substantially down from the peak earnings that were extant five years ago when everyone wanted to own financials. In summary, we do not know for sure if the 1100 level on the S&P 500 Index was a final selling climax established level or is an interim selling climax level. It will take more time to write that history book chapter. We are basing our investment risk taking action on the likelihood it was a final climax. It will take months before that finding is firmly established. We do know that, at least, we did have a robust interim selling climax. The 1100 level was tested several times and has demonstrated support. We do know that buyers are tepidly coming into stocks. There is a large amount – trillions of un-invested funds – that face decisions about whether to nibble at the stock market or stay in the bond market or cash equivalents at very, very low interest rates. In our view, the US stock market is currently a place of opportunity. We are in it. Cumberland's US exchange-traded fund accounts continue to be fully invested in diversified ETF portfolios. We are increasingly emphasizing growth-oriented ETFs at this time, and mixing the weights and sectors accordingly. We are gradually taking up exposure to the financial sector. We are targeting an S&P 500 Index level of 1350-1400 based on a high profit share derived from a GDP above $15 trillion. We expect that nominal GDP to rise at about a 4% annual rate or higher for the rest of this decade. We project that the GDP will reach $20 trillion by this decade's end. Our longer-term target for the US stock market is the 2000 level or higher. If the GDP profit share rises to the level we saw in the 1950s, that stock market outcome could be much higher. ~~~
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| Throwable Panoramic Ball Camera Posted: 17 Oct 2011 05:00 AM PDT Throwable Panoramic Ball Camera captures a full spherical panorama when thrown into the air. At the peak of its flight, which is determined using an accelerometer, a full panoramic image is captured by 36 mobile phone camera modules. Hat tip boingboing Patent pending. More info: http://jonaspfeil.de/ballcamera A project of the Computer Graphics Group, TU Berlin. To be presented as an Emerging Technologies demonstration at the SIGGRAPH Asia 2011: Jonas Pfeil, Kristian Hildebrand, Carsten Gremzow, Bernd Bickel, Marc Alexa Diploma thesis ‘Throwable Camera Array for Capturing Spherical Panoramas’: Video: Jonas Pfeil, Junny Chen, Qian Qin, Björn Bollensdorff Voice: Hugh Jeremy Music: ADO and Wonderland by IZCY Video licensed under CC BY-NC 3.0 We would like to thank Axel Kretzschmann for helpful tips on high speed electronics, Analog Devices, Inc., for providing parts and STMicroelectronics for helpful information regarding the camera module. Thanks to Hugh Jeremy for providing the voice-over. Check out his awesome channel on Natural Selection 2: http://www.youtube.com/watch?v=Rkgztfuij2w Patent pending, http://jonaspfeil.de/ballcamera
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| Occupy Wall Street Must Occupy Congress, AG offices Posted: 17 Oct 2011 04:00 AM PDT There is an unfocused financial rage in the United States. It was born in the late 1990s on an unholy trinity of accounting swindles, the dotcom collapse and analyst scandals. It grew on a housing boom and bust that created 5 million (and counting) foreclosures, leaving more than a quarter of bank financed homes worth less than their mortgages. It matured on a growing wealth disparity that eviscerated the middle class, and brought back the plutocracy of the 1920s. It reached its peak with the bailout of reckless bankers, who were rewarded for their irresponsibility with the greatest wealth transfer in human history. And now, it seems to be finding a new voice with the movement known as Occupy Wall Street (OWS). Like the Tea Party, OWS began as a loose collection of people who knew they were getting a raw economic deal — but were unsure as to precisely why. They both started with a surge of grassroots politics. Both tapped into the national zeitgeist, feeding on an unfocused economic angst. When the Tea Party first burst onto the national stage, I had high hopes they might address some of the persistent economic problems our two-party political system was ignoring. But the Tea Party tilted to the right, shifting from the economic to the partisan. Obamacare and taxes – neither of which were responsible for a laundry list of economic woes facing the nation – became their focus. That move created a vacuum. Since then, we have been waiting for a group of angry Americans to fill the void. It did not look like OWS was going to be the ones to do so. Especially with the way the Media was either ignoring them, or portraying them as a group of slacker hippies, fringe dwellers and kooks. Credit the Daily Show with changing all that. Jon Stewart's team surfaced a video of a senior NYPD officer pepper-spraying some young girls for no apparent reason. NYC may not be Libya, but that clip of abusive police behavior – and the young women collapsing in obvious agony – ramped up the mainstream coverage. What Rick Santelli's infamous rant on CNBC did for the Tea Party, the NYPD pepper spray video did for the Wall Street protesters. Now, the founders of OWS must consider what to do next. They surely do not want to let the momentum and energy dissipate. They see the Tea Party as hugely influential, but highly partisan, and up until now the Tea Party has been far less willing to criticize corporate interests than OWS. The founders of OWS are aware of how the Tea Party was Jiu Jitsued by the existing GOP political establishment. OWS want to avoid a similar fate. Such an end could occur of the leaders of MoveOn.org, a partisan Democratic group, gets their way. They have bulled their way into the media, pretending to speak for OWS. (The media are suckers for a simple narrative, and MoveOn.org provides that). Hence, OWS needs to demonstrate a few things: A clear leadership. A consistent message. But most importantly of all, some specific policy objectives. To become as focused and influential as the Tea Party, what Occupy Wall Street needs a simple set of goals. Not a top 10 list — that’s too unwieldy, and too unfocused. Instead, a simple 3 part agenda, that responds to some very basic problems regardless of political party. It must address the key issues, have a specific legislative agenda, and finally, effect lasting change. By keeping it focused on the foibles of Wall Street, and on issues that actually matter, it can become a rallying cry for an angry nation. I suggest the following three as achievable goals that will have a lasting impact:
Let's look at each of these in turn: 1. No more bailouts/Bring Back Real Capitalism! "Socialism for bankers, wrenching capitalism for the working stiff" is not a slogan you are likely to see on a bumper sticker anytime soon. But that's wht the US had morphed into. America needs to end this system of spoils. There should be no more bailouts, no more crony capitalism, no more government determined winners and losers. We simply cannot live in a society of privatized gains and socialized losses. 2. End Too Big To Fail /Restore Competition The current economic approach of "Too Big to Fail" is itself a failure. It reduces economic competition, concentrates risk, and raises costs for consumers. I agree with University of Missouri–Kansas City (UMKC) professor of Economics and Law William Black, who notes that the TBTF moniker is misleading. We should start calling these firms by the more accurate phrase "Systemically Dangerous Institutions" (SDIs). TBTF makes it sound like the size is the problem – in reality, the systemically, regardless of size, is what we should be focused on. SDI is an accurate phrase, and appropriately pejorative. The TBTF size has brought a different set of problems: The bailouts have made the top 10 SDI an even bigger, less competitive oligarchy. We need to bring back competition by limiting the size of these firms. We can do that by capping their deposits, in terms of total percentage or a specific dollar amounts. There are many ways to accomplish this, including an FDIC caps on deposit insurance. And if the OWS people were smart, they would bring in former FDIC chair Sheila Bair (now private citizen) into the discussion. 3. Take Congress back from Wall Street The Supreme Court has ruled repeatedly on campaign finance reform, finding against voters and in favor of corporate interests. The only way to take the government back is a Constitutional Amendment. The United States has become a "corporatocracy." Campaign finance and lobbying money has so utterly corrupted Congress that we might as well put elected officials up for bid on eBay – that is how corrupted the system has become. We have even seen the State Attorneys Generals become targets of aggressive lobbying, most recently in Florida. We must become a democracy again, where one man one vote matters. To do that, Wall Street money must be taken out of the process. The only way to accomplish that goal and have it withstand Supreme Court review is a Constitutional Amendment, mandating public financing of Congressional elections and criminalizing the purchases of politicians. We need to marginalize lobbyists, and make voters the most important people in the nation (again). A national campaign to get that amendment on every ballot in every state should be the objective. ~~~ You will note that these three goals are issues that both the Left and the Right — Libertarians and Liberals — should be able to agree upon. These are all doable measurable goals, that can have a real impact on legislation, the economy and taxes. But amending the Constitution to eliminate dirty money from politics is an essential task. Failing to do that means backsliding from whatever gains are made. Whatever is accomplished will be temporary without campaign finance reform . . .
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| Posted: 16 Oct 2011 05:10 PM PDT Killer song, very interesting video: From tUnE-yArDs second album, w h o k i l l - Download a free MP3 of ‘Bizness’ here – http://www.tune-yards.com/ Directed by Mimi Cave
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