Courtesy of Minyanville.com, we have the ten foreign currencies with names that most resemble a “death metal” band.
9. Haiti - Gourde
8. Guatemala - Quetzal
7. Kazakhstan - Tenge
6. Malaysia - Ringgit
5. Honduras - Lempira
4. Mozambique - Metical
3. Estonia - Kroon
2. Vietnam - Dông
1. Mongolia - Tugrik
As if the obscenely high paychecks of the “masters of the universe” weren’t enough… Jake Bernstein and Jesse Eisinger of ProPublica yesterday reported a story in cooperation with NPR that we thought merited further distribution. Bottom line: Some Wall Street bankers, in order to continue to pad their earnings, created fake demand for Collateralized Debt Obligations. Their chicanery ultimately exacerbated the damage from the explosion of the subprime mortgage market and thus the economic and market downturn that we’re currently experiencing. It should be pointed out that their actions didn’t create the subprime debacle, the collapse of the debt markets in 2008, the enormous build-up of consumer debt or the other scandals of which we’re dealing with the aftermath, but they certainly may have been the “straw that broke the camel’s back.”
Links to the article: ProPublica, National Public Radio
A couple of graphics from the story:
UPDATE:
ProPublica published on their website a great graphic showing the interlocking ownership of the 85 CDOs detailed in their earlier story.
HatTip: Ritholtz.com
Aug 27th
In our recent client letter and e-newsletter we stated our expectation of a rocky third quarter for the stock markets. Courtesy of Chart Of The Day comes a graph that supports that view from a historical perspective.
Aug 26th
We’ve argued consistently that the US, indeed most of the global economies, face the potential if not the reality of a deflationary environment, and we’ve suggested strategies that Harmonic is pursuing on behalf of clients to reduce the corrosive impact of deflation. The Wall Street Journal’s Brett Arends offered more specific recommendations in an August 18th article “What Deflation Means for Your Money.” Although we could nitpick and/or expand on each of his suggestions, we generally agree:
MEASURES OF US INFLATION, AUG 2005 – JULY 2010
PCE deflator (white), Consumer Price Index (orange) "core" CPI (yellow)
Aug 22th
Perfectly put.
Hat tip: Ritholtz.com
Aug 20th
Regardless of one’s political views an understanding of impactful legislation is critical (not the easiest thing to attain when the legislation in question is 2300+ pages long!). We view the Financial Regulatory Reform legislation as having a potentially profound impact on the economy and markets for many years to come and so continue to seek out tools to improve our understanding. The key question of implementation, which will literally take years, remains.
One of the better brief descriptions of the legislation, from McBee Strategic Insight via Bernstein Research, is here. A Reuters story describing the bill shortly before its passage, is here. A resource for background is here.
Excerpts from the McBee piece:
Aug 20th
The US Bureau of Labor Statistics recently released state-by-state Unemployment data for July 2010. According to the BLS the seasonally adjusted unemployment rate for the state of Idaho was 8.8% last month, an increase of +0.6% from July 2009. Over that period, employment rose by +2,800 workers, from 605,100 to 607,900.
Eliminating the seasonal adjustment, Idaho’s labor force rose from 757,900 to 765,400 and the number of unemployed civilians jumped from 57,800 to 65,700 on a year-over-year basis.
The change in Idaho’s unemployment rate appeared greater than the nation as a whole; the seasonally adjusted national unemployment rate rose +0.1%, to 9.5%, over the same period. However, Idaho’s rate remained below the national rate.
An analysis by industry using non-seasonally adjusted figures highlights the sharp contraction in the construction industry within the state. Notably, the several industries have begun to show year-over-year job growth.
Virtually everyone will remember the periodic table of elements from their high school or collegiate chemistry class. Lists of metals, gasses and other elements were neatly laid in rows, even color-coded sometimes, in an attempt to make the subject more understandable and engaging.
https://www.msu.edu/~zeluffjo/periodic_table.gif
The Periodic Table concept is a useful way to present data for other purposes as well. It’s laid out somewhat differently than the classic chart above, but I’ve used for many years a chart that demonstrates to investors how unstable asset class returns are from year to year (I actually use a different one, but it’s copyrighted):
http://www.callan.com/research/download/?file=periodic/free/360.pdf
Here’s a similar chart including alternative investments:
From a firm that specializes in commodity investments, we have the following:
http://www.usfunds.com/investor-resources/frank-talk/?i=2155
While it may be of questionable value (probably don’t need any more “talking heads” in the investment business) I’ve found some good resources from this one:
TheReformedBroker.com
As a heavy user of the internet for research, I appreciated this periodic table…
http://www.wellingtongrey.net/miscellanea/archive/2007-06-23--periodic-table-of-the-internet.html
…and while I’m not a big user of social media, this is also helpful:
http://www.rickliebling.com/2009/02/23/the-periodic-table-of-the-social-media-elements/
It goes without saying that I’m a visual communicator, so I found this table particularly cool:
http://www.visual-literacy.org/periodic_table/periodic_table.html#
As my Significant Other is well aware, I have a sweet tooth that must be reckoned with; perhaps this table will prove instructive:
http://www.eblong.com/zarf/periodic/closeup.html
Finally, the periodic table’s been used (commandeered might be more like it) by the humorists at ModernToss.com for their Periodic Table of Swearing (you’ll have to visit their site yourself, this is a PG-rated blog.)
UPDATE, August 29, 2010:
Here’s one that landed in my inbox recently I found particularly amusing – enjoy (hat tip, Ritholtz.com)
Aug 17th
It’s reasonably well known and commonsensical that durable goods purchases are cyclical; that is, when the economy’s doing well they rise, and vice versa. The data series is produced monthly (also quarterly as part of the GDP release) and can be used as a signal of consumer participation in economic activity; when other indicators point to an economic expansion or contraction beginning to take hold, this is one data point that can confirm whether consumer (the traditional engine of US economic activity) has jumped on board.
When observing the data series since its 1961 start I noticed an interesting trend: Not only is consumer spending on durable goods cyclical as expected, but there’s an obvious long-term trend towards a lower percentage of consumer spending being dedicated to durable goods.
The implications of this trend are more numerous than I can name, but the list might begin with the impact of lower consumer demand on durable goods production in the US, the reduced number of jobs required to manufacture those goods, a confirmation that the US has become a more service-driven economy, the environmental impact of consumption of goods that are intended to be “disposable”, etc.
I have asked the Federal Bureau of Economic Analysis for their insights and will update the post when it’s available.
To complete the chart-fest, here are the other two components of consumer spending, nondurable goods and services, over the same time-frame:
NONDURABLE GOODS
SERVICES
If you’re a real data junkie, here is the BEA’s description of the 2009 revision of the PCE classifications.
Aug 31th
Jump-starting the Engine of Job Growth
Author: Kenn Lamson
Comments: 0
Anyone who’s read our research knows by now that we believe the single most important factor for “turning the economy around” is the creation of private sector jobs. Consumer spending, home prices, pretty much every area of the economy awaits the spark inherent in private sector job growth. Further, the US economy is currently bifurcated between large companies with access to capital and small ones without that lifeline (discussed in our recent quarterly letter, found here). We recently read an essay by Vivek Wadhwa, a “tech entrepreneur, academic, researcher and writer” that furthered that argument and expanded our understanding of the importance start-up companies play in our economy.
The final paragraph of his essay hits the nail on the head: “Simply put, if we are serious about lifting the economy out of its rut, we need to focus all of our energy on helping entrepreneurs. Provide them with the incentives (tax breaks and seed financing); education; and infrastructure. And gear public policy—like patent-protection laws—toward the startups. Let’s not bet on the companies that are too big to fail or too clumsy to innovate.”
Link to the full article:
http://wadhwa.com/blog/2010/08/14/startups-or-behemoths-which-are-we-going-to-bet-on/