Career News 24/7: The Big Picture

Friday, November 4, 2011

The Big Picture

Amy Winehouse New Album: Lioness: Hidden Treasures
Good Credit: MasterCard & Visa
Succinct summation of week’s events (11/04/2011)
Europe’s Tower of Terror
Daily Deals by the Numbers
Vizify + Twitter = Tweetsheet
Triumph Insult Comic Dog Goes to Occupy Wall Street
Employment Situation In Pictures
Are Italian Yields Once Again At The Tipping Point?
QOTD: Chanos on Europe, China

Amy Winehouse New Album: Lioness: Hidden Treasures

Posted: 04 Nov 2011 03:22 PM PDT

I first mentioned Amy Winehouse back in April 30th, 2007: “A fierce English performer whose voice combines the smoky depths of a jazz chanteuse with the heated passion of a soul singer.”

Her death at 27 was tragic but inevitable; Now comes news of a posthumous release of Lioness: Hidden Treasures. Its a full 12 track album from Winehouse, scheduled US release on December 6th, a mix of previously unreleased tracks, alternate takes, brand new compositions. Its likely to be a big seller in the UK. The Guardian in London got to hear most of the songs recently. They wrote:

“At best, the seven tracks sounded like the basis for another hit album, although it’s hard to make any kind of judgment on the basis of one listen. Several are based around demos or early versions of songs, to which Remi subsequently added vocal parts, backing tracks and more. He insisted that since Winehouse’s death on 23 July, he has only spent two weeks polishing the material. “Touching things up, adding some strings,” he said. “Just what you’d do with any recording.”

Nonetheless, it is hard to believe that Winehouse herself – who oversaw every aspect of the two albums she released – wouldn’t have reworked much of the material that is to be put out. There are certainly times when her vocal on a song sounds more like a sketch, even if she was an instinctive artist who appreciated the magic of capturing a first take.”

Regardless, I expect it will find its way to my gift list this year.

The Guardian has a track by track discussion of the new album.

Track List:

Our Day Will Come
Between the Cheats
Tears Dry
Like Smoke
Halftime
The Girl from Ipanema
A Song For You

(The above were the seven tracks played at the listening session)

Best Friends
Valerie
Wake Up Alone
Will You Still Love Me Tomorrow; (Shirelles cover)
Body and Soul (Tony Bennett duet)

(These were mentioned but not played)

Previously:
Amy Winehouse (April 30th, 2007)

Tragically Inevitable: Amy Winehouse Dead at 27 (July 23rd, 2011)

Sources:
Amy Winehouse album to be released in time for Christmas
Caspar Llewellyn Smith
Guardian, 31 October 2011
www.guardian.co.uk/music/2011/oct/31/amy-winehouse-album-released-christmas

Good Credit: MasterCard & Visa

Posted: 04 Nov 2011 02:58 PM PDT

Fri 04 Nov 11 | 02:40 PM ET

Disclosure: We own Visa for clients in our Separately Managed Accounts.

Succinct summation of week’s events (11/04/2011)

Posted: 04 Nov 2011 12:30 PM PDT

Succinct summation of week’s events:

Positives:

1) While Oct job gains were only 80k, the weakest in 4 months, the prior two months were revised up by a net 102k

2) Initial claims below 400k at 397k

3) Oct Vehicle sales in line with estimates but best level since Feb

4) China service indices mixed relative to expectations but both firmly above 50

5) Inida mfr’g PMI rises to 52 from 50.4 and South Korea rises a touch although remains below 50

6) RB of Australia cuts interest rates 25 bps to 4.5% to help economic growth as one of the only responsible central banks in the world gave themselves bullets over the past few years

7) ECB cuts rates to help economy but inflation is their mandate, Phillips Curve faith

Negatives:

1) Within payrolls, avg hourly earnings up only 1.9% y/o/y vs CPI near 4%

2) ISM mfr’g and services both slightly below forecasts

3) US Oct retail comps light

4) Canada reports unexpected sharp drop in jobs

5) Papandreou creates chaotic situation in Greece with referendum call. I’m all for democracy but that’s what elections are for and he made a deal with his EU counterparts

6) Italian gov’t losing the faith of the markets to liberalize their economy, yields spike across their yield curve

7) EFSF can’t sell bonds, an embarrassment for this supposed AAA paper

8) German Sept factory orders unexpectedly fall for a 3rd straight month

9) Euro zone mfr’g and services composite index revised down to 46.5 with Italian mfr’g specifically down to 43.3 and services at 43.9

10) Euro zone CPI at 3%, holding at highest since Oct ’08, ECB bets it’s not sustainable with slowing economic growth, we’ll see

11) China mfr’g PMI falls to 50.4 from 51.2, Taiwan drops to 43.7

12) Bernanke officially lays groundwork for QE3. I say he is the most dangerous impediment to sound economic growth, more so than Congress that he has enabled and financed to spend the way they have.

Europe’s Tower of Terror

Posted: 04 Nov 2011 12:00 PM PDT

The circus continues in Europe. No big bazooka EFSF coming out of G20 to put a firewall around Greece and save Italy. Greece is a sideshow and the Italy-Germany bond spread is what you need to watch as an indicator of the short-term direction of the risk markets. Clearly, at least to us, risk wants to run into year-end but fear of the EU macro bear is palpable and reflected in the elevated VIX even on big up days.

Maybe the U.S. markets can decouple, but the fear and linkage in the financials is just too strong, in our opinion. Here's the scoop from AFP,

Germany-Italy bond yield spread widens to record

The difference between the German and Italian sovereign 10-year bond yields widened on Friday to a record of 4.57 percentage points.

The difference in the cost of borrowing for the two countries widened because money flowed into safe-haven German bonds, pushing down the fixed interest on those bonds, while concern about the state of Italy's public finances sent Italian rates up.

The yield on 10-year Italian debt also rose to a record high point, putting Italy close to levels at which financing its debt mountain is widely considered to be unsustainable.

So what is the trade? If Italy continues to blow out and a big bazooka EFSF bailout fund is not attainable, the EU will be faced with certain death or massive ECB bond purchases. We think they will choose the later, which makes the Euro a sell against the dollar and gold a buy, in our opinion.

At that point, maybe the S&P500 and Euro will become less correlated. Time to rewrite the algo? And time to rewrite "risk on/risk off"? Jusk askin'.

Daily Deals by the Numbers

Posted: 04 Nov 2011 11:30 AM PDT

In light of Groupon’s IPO, have a look at this cool graphic from BuySellAds:

Thanks, Scott!

Vizify + Twitter = Tweetsheet

Posted: 04 Nov 2011 10:30 AM PDT

Pretty cool trick — here’s what happens when you combine Vizify with Twitter — you get Tweetsheet!

click for updated version

Triumph Insult Comic Dog Goes to Occupy Wall Street

Posted: 04 Nov 2011 10:28 AM PDT

From Conan:

Hat tip Andrew Upward

Employment Situation In Pictures

Posted: 04 Nov 2011 09:00 AM PDT

Let’s take a fun romp through some of the employment charts today:

via Calculated Risk

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Source: Bianco Research

~~~

via Bruce Steinberg

Are Italian Yields Once Again At The Tipping Point?

Posted: 04 Nov 2011 08:15 AM PDT

Comment
Back on September 12, we examined Italian bond spreads and CDS. At the time, 5-year Italian CDS was approaching 5% and 10-year Italian spreads to Germany were approaching 4%. Now that these levels are once again being breached, as shown in the charts below, we revisit why these markets may be reaching a tipping point.

LCH Clearnet is the main clearing house of European bonds and CDS. In October 2010 they released a circular which formalized some of their guidelines for margin requirements:

• LCH.Clearnet Ltd monitors the yield spreads between 10-year bonds from each sovereign issuer and benchmark 10-year AAA government bonds. We would generally consider a spread of 450 basis points over the 10-year AAA benchmark to be indicative of additional sovereign risk and LCH.Clearnet Ltd may materially increase the margin required for positions in that issuer. As a guide, materially would likely mean an increase in the order of 15% of position size, with further material increases in margin charged as the spread deteriorates further. We will also consider whether additional margin is required from indicators in CDS prices or Market Implied Rating data.

• Where a sovereign issuer is downgraded to sub-investment grade by a major rating agency we would generally expect market liquidity to be significantly impacted and may seek to apply additional margin for positions in that issuer.

• If a Clearing Member and sovereign issuer subject to increased 'jump-to-default' risk are highly correlated ('wrong-way' risk) we would also seek additional margin.

When Irish spreads breached the 450 basis point level, LCH Clearnet responded with a margin hike. A second and third margin hike were announced when spreads remained consistently over 500 basis points.

While the bullet points above would lead us to believe that Italy may be close to a margin hike, these rules should not be considered definitive. In a world where a 50% Greek haircut can be deemed voluntary, anything is possible. In fact, officials at LCH Clearnet recently commented on the guidelines above by saying, "It is important to note that it is an outline guide to our approach to managing risk. Our risk managers will use their judgement to determine whether, and if so how, we will utilise the framework."

The ECB clearly understands the importance of the 450 basis point spread. They have been rumored to have bought large chunks of Italian debt in an attempt to hold this level. The fear is that, if this measure only postpones the inevitable, LCH Clearnet will have to make some difficult decisions in the near future. Based on past precedence, it would appear as though Italy is once again dangerously close to the tipping point.

Source: Bianco Research