I’m at a crossroads right now. It’d be unreal if DeShawn Stevenson somehow shutdown LeBron tonight. But don’t kid yourself… it’d be a defining career moment to see LBJ put up 40 tonight and shut everyone up. As someone who fucking hates how much ESPN and other people can blow one god damn game out of proportion, I love when people shut the media up. On the other hand… DeShawn’s been so heinous yet so unreal it’s bizarro world out there. A 3 in Bron’s face would be dopies.
Apparently this isn’t a joke. Tennessee has made it illegal for shocking or offensive images that could cause emotional distress to be posted on the internet. I don’t even know what to say about this. You guys are fucked in the head. That’s about all I got. The governor actually signed this into law… an elected official. Well suck my dick and call me Sally this is just absurd. Fuckin’ twilight zone shit down there, they can just ignore the First Amendment completely and the only thing we say is “jesus those people are stupid”.
Hate all you want… these are fuckin’ dope. Who cares if they’re not actually a throwback to any kind of jersey. I need one of these like I need air: I’m not sure how, but I’m pretty sure I’ll die if I don’t have it. God DAMN I can’t wait for this night game. Too bad Bouba isn’t on the team anymore, the stripes are totally his style. (I feel bad just writing that… Bouba you’re unreal!)
New data out from the Commerce Department shows the trade deficit narrowed 6.7%. Even though oil was trading at the highest levels since September of ’08, the deficit was reduced to about $43.7 billion. While some of this has to do with imports from Japan dropping 25% with all the shit going on there, record exports are forcing many economists are now claiming they’ll revise the Q2 GDP growth rate. 1.8% was pretty hard to understand, so hopefully there’ll be a consensus on a higher rate. The deficit numbers also pushed stocks up about 1%, with the Dow up 75 points and the S&P up about 9 points. I wouldn’t expect those rises to continue tho if shitty numbers keep comin’ out.
New claims for unemployment benefits increased by 1,000, to 427,000 this past week, while forecasts expected that number to drop instead. I feel like that’s a big statistic, even if it was only 1,000 new claims. That means 1,000 more people we’re just like “fuck… might as well get paid to do nothing”. It’s hard to decipher what unemployment stats are actually saying about the economy, because we’re at a point now (and have been for awhile) where some people would rather take the unemployment checks than work at or near minimum wage. This is where my conservative side kicks in and I wanna fuckin’ trash the idea that we even have unemployment benefits… but I ain’t gonna hate. If I was 5-years out of a good college and there was no hope of a job except pumpin’ gas for $7.25 an hour, it’s possible I might do the same thing. Seems a little emasculating to me tho, prolly why some of those people have the balls to do something about their situation.
Deficit reduction talks are gonna start up soon. Interesting to see if the Dems can get the GOP to agree to some tax increases.
Bernanke mentioned in yesterday’s speech that further Fed action might be required. Basically, the recovery is slower than expected. Some sectors are growing while others remain stagnant, things are not that dopies right now, but should be getting more chron in the next two quarters. Today’s 10-year note auction produced a yield of 2.967. The drop also caused the May 10-years, which yield 3.125, to be pushed up 1/4 to 101 11/32. Justin Lederer of Cantor Fitzgerald said, “With the future uncertain, investors are grabbing as much yield as possible, even if we aren’t at amazing yield levels. The market is playing it safe right now.” Ya, that explains it. The bid-to-cover today was 3.23, above the average of 3.09.
Dogshit numbers over the past couple weeks have been dominating equities. The Dow closed 21.87 points lower than yesterday, at 12,048.90. The S&P fell another 5.38 points to 1,278, with a lot of people saying 1,200 could be a dangerous level and could prompt a sell-off. Let’s fuckin’ hope not. It’s gonna be interesting to see what happens when QE2 wraps up this month. The 2-year/30-year spread was down today to 3.83 from 3.85 yesterday, the high since March. The prospect of continued low interest rates has been pushing this spread as the economic data has supported continued Fed intervention. For clarification, people are continuing to buy more 2-years than 30-years on the hopes that QE will be extended and prices will go up, which widens that spread.
During the Fed Chairman’s press conference today, Bernanke got a tough question from dopeboy Dimon. He asked:
“Has anyone bothered to study the cumulative effect of these things, and do you have the fear, like I do, that when we look at it all, it will be the reason” why banks aren’t lending, he asked. “Is this holding us back at this point?”
He goes on to mention that exotic derivatives are few and far between now, boards and regulators are tougher, banks’ liquidity and capital levels are very high, and lending practices are far tighter than in the past. On top of that, the new proposed 3% surcharge for “big banks” out of the Basel III discussions has created even more uncertainty.
People have been fuckin’ loving Jamie Dimon over the past year or two. JPMorgan is arguably on top of the financial sector right now, especially with GS on the ropes. One of the issues with him asking this question all the way down in Atlanta is pretty obvious: why did he have to ask such a basic (but important) question in a public forum? Two possibilities. The first is he’s had this conversation with Bernanke before, but didn’t get the answer he wanted. Asking it in front of an international audience might force Bernanke to give a different, crowd-pleasing answer. The second, and more intriguing one is that he’s actually never been able to ask the question. In other words, he’s tried to get an answer out of the Fed (preferably Bernanke) and has never gotten one. If that’s the case, then that’s not good. Even though conspiracy theorists would consider it a sign of our impending enslavement to the Fed, the CEO of JPMorgan should be able to have a conversation with the Chairman of the Fed pretty easily.
Now I’d love to have a strong opinion on this, but there’s not much of a point to that. Banking regulations could be a reason for slow growth (strict lending reduces consumer spending), but businesses are borrowing at ridiculously low levels. Corporate capital accumulation and investment is very strong right now. The uncertainty in the banking sector could just as easily be a symptom of the slow recovery. Some of that chicken or the egg bullshit I guess.
I’m gonna start doing some profiles on candidates, and give my opinions on their positions. First up… Mitt Romskis (Warning: pretty fuckin’ biased, sorry)
Trade: Romney, like all Republicans, supports free trade. He’s especially focused on the rising Asian economies. What I like about his stance on trade as opposed to others’, is that he acknowledges the benefits of emerging economies. I have yet to hear him say something like Pawlenty’s quote, “America’s rightful place is not behind China”. That may rile up people in Iowa who don’t realize we’re no longer the only superpower, but his optimism in the future of trade is refreshing. It’s a long-term comparative advantage position: free trade will allow us to eventually cut loose those the shitty industry sectors that no longer help us. I just re-read that Pawlenty quote and I just can’t help but feel that’s the kind of shit that got our country in this position in the first place. People just feel like we’ll always be the ultimate superpower no matter how much evidence there is to the contrary. Now, we’re obviously still dominating the world (China’s GDP at PPP is about 2/3 ours, and much less for nominal GDP), but we haven’t had a 5-year stretch of at least 5% growth like… ever. Pawlenty is promoting his “goal” of 5% growth for the next 10-years. Get the fuck outta here.
Taxes: Once again, love the action this dude takes. When he was governor of Massachusetts, he jacked up court fees, professional licenses, and gun licenses, (shit people usually pay for whatever the cost) raising $400 million in the first year. He was also able to raise about $180 million more over two years through business taxes. While many people complained these were tax increases, he did it through fixing loopholes. By cutting out these loopholes, he’s effectively reducing the uncertainty in future taxes, and people can finally shut the fuck up about tax uncertainty. In reality, the only corporations who strictly choose their investment opportunities based on tax rates are fortune 500 types. The average business prolly doesn’t blink twice at the tax rate. He also didn’t support the temporary extension of the Bush tax cuts in 2010 saying, “because the extension is only temporary, a large portion of the investment and job growth that characteristically accompanies low taxes will be lost.” I feel like it’s rare for a politician to admit that a tax cut extension doesn’t really do much. It’s not like they’re gonna go out and buy a fuckin’ car because taxes got reduced a little bit for 2 years, as much as people want to believe that. Unlike many politicians, he truly understands the economic effects of taxes on the economy (both good and bad).
Energy: I only mention this because of his recent statements. There’s growing skepticism of humans’ role in global climate change in conservative circles, with some denying global warming entirely. Romney is coming out and backing his stance that everyone is indeed fuckin’ up. I love that this dude is finally growing some balls and saying “blow me” to all the ultra-conservatives. He has a strong position on the need for alternative energies, citing the compromising position of foreign oil reliance. This isn’t extremely important to me at the moment, but it’s nice to see he’s comfortable with his moderate position.
Immigration: As opposed to picking one of two sides, amnesty vs. rounding up every alien and shipping them off, Romney wants to implement a plan to encourage illegals to apply for citizenship. While border control is obviously important, the US has already been “penetrated” by illegals. When I can drive to the west-side of Grand Rapids and 30% of the people I say are Mexicans, it makes border control seem like a lost cause. He’s also big on cutting federal funds to “sanctuary cities” like San Francisco and NYC. I don’t think the important part is the fund slashing, but the idea of cities that encourage illegal aliens to live there must face consequences.
Health Care: Dude wants to make state rights the standard. That’s a good thing for Republicans. His individual mandate eliminated the possibility of people showing up to emergency rooms and forcing the state to pick up the tab. That’s called enforcing personal responsibility, not forcing someone to buy something they don’t want. If you can afford health care, you’ll probably have it. If you can’t, the state will subsidize it. While that may not be good in an ideological sense, please take note that as of now Romneycare takes up 1% of the Massachusetts state budget. It ain’t breakin’ the bank. Furthermore, I’ve stood in line behind people who have to walk away empty handed because they can’t afford their fuckin’ diabetes meds. I’m not saying that government needs to provide health care. I’m just saying with all of the wasteful spending, 1% of a state’s budget is not such a bad thing. There’s plenty of evidence showing increased education spending doesn’t help kids in the long run, use some of that to make sure one of those kid’s dad doesn’t drop dead on him. You call it a liberal view, I call it proper spending allocation.
Education: While there’s a lot of roadblocks and issues to face with improving education, he focuses on what I believe to be the biggest problem. Romney has consistently expressed his view that increased incentives, like bonuses or higher salaries, for high performing teachers is pivotal to increased standards. He realizes that just injecting money into schools doesn’t yield results. It’s not a monetary problem, it’s a fundamental problem. When a teacher can get tenure for sitting on their ass for 3 years and then basically never get fired, that’s seriously fucked up. It’s one of the few professions I can think of that pay is completely unrelated to performance. When we’ve got teachers unions screaming to block these changes in pay structure and tenure, it’s pretty clear their thoughts are on themselves and not the future of the country. If teaching was a $100,000/year job, we’d have some good ass teachers. Some people might say “oh well people will just teach for the money then”. Well, not if they’re shitty because they’ll get fired. It makes so much sense I can’t even stand it. And I’m tellin’ you, a good teacher makes every difference in the world.
Abortion: He thinks any policy that is based on a religious view is unacceptable, and that there are more important problems. What else is there to say? Fuck abortion issues, fuck don’t ask don’t tell, and fuck the gay marriage debate. We got bigger issues to focus on.
My Take: Well if you can’t tell, I’m guarn voting for Romney. He’s got two knocks on him right now tho, one more obvious than the other. Obviously people have been shitting on him for Romneycare, which I can understand because Republicans just spent 2 years doing the same thing to Obama. I think it’s important to note the state vs. federal power here; Romneycare fits very well in a state like Massachusetts, but other states don’t have to follow suit. The other problem I think he has is he’s trying to appeal too much to moderates. It’s definitely a growing area of the population, but there’s not a fucking chance the average moderate/moderate-liberal votes for anyone else other than Obama. So, while I think he should be able to beat out Pawlenty and Santorum, I feel like it’ll be a toss-up between him and Obama. Liberals fucking love Obama unconditionally, like he’s a god damn family member. It’s wild.
The European debt crisis is finally beginning to be handled. The ECB has said that they will probably back Greek debt rollovers. After all of the talk of default it really makes you wonder. What is the point of pretending a country will be allowed to default? The US is on the brink of defaulting, but there’s no chance that happens. If the debt ceiling isn’t raised and we do default, shit is gonna hit the fan. Rates will skyrocket, and we can kiss a recovery good-bye. And for what? To teach us a lesson? Doesn’t make very much sense to me.
But, finally we’re seeing the euro bounce back up, hitting a 1-month high against the dollar. With the current state of US consumers (i.e., not spending), we gotta hope this climb continues if we want exports to pull us out of the hole. Rates have been higher in Europe for some time now, so what’s hopefully the end of the euro plummet will help. The slip in the euro was undoubtedly due to European debt crisis worries, but the continued asset purchases keeping US rates extremely low should help the euro’s rebound. We’ll find out today what Bernanke says about the future of QE2. It’d be nice if he could put sort of a range on the market and say something like “if the market falls we’ll be ready to add some liquidity”, which would hopefully keep shorts out without sparking a rally. Especially now with economic data that doesn’t support the movements of the market, people have been jumping onto rallies because there’s not much information to say they should do otherwise. Hence the bubble-worries over the past few months.
The recent success in the euro/dollar is now being seen in equities as the S&P 500 index bounced off a 2 1/2 month low. As of now, the index is trading at 12.2 times estimated profits… which is cheap as hell. Meanwhile, oil is dropping as expectations of OPEC announcing an increase in production quotas gain steam. This should help transportations, and in turn exports, who have faced a lot of problems from oil prices over the past few months. I just heard today that the 16 largest US airlines reported an on-time rate of 75.5%… weather has been a motherfucker lately.
I have to agree with what Obama just said in his press conference with Angela Merkel. Freaking out over one month of poor economic data is exactly what we’re trying to avoid. If focus continues to be on the short-term, there’s no chance we’ll keep volatility and speculation down. While neither is explicitly bad, too much is obviously bad for growth. Hopefully the increases we saw today will mark an upturn in markets. With poor housing markets, and now poor jobs data bogging down the recovery, the upswings in markets are a good sign for future growth.
I’m not an anti-Obama extremists who hopes he gets assassinated… just an unreal pic
In a recent Fortune article, Meredith Whitney is holding onto her position of a bear market in municipal bonds. Back in December on 60 Minutes, she said that there’d be “50 to 100 sizeable defaults” worth “hundreds of billions of dollars” over the next 12 months. The muni market is worth around $2.9 trillion right now, so hundreds of billions of dollars is… a fuckin’ shitload. While there have been 29 straight weeks of withdrawals from muni-bond mutual funds, actual muni-bond defaults have fallen. From January 1 through April, there were 14 defaults worth around $605 million. That same period in 2010 saw 43 defaults worth around $1.7 billion. So, naturally, a lot of people don’t (and don’t wanna) believe her.
Even though Whitney’s forecast has been condemned for some time, the extent of her firm’s new research might make your ballsack shrink a bit. For instance, since 2003 state outlays have risen from some $1.5 trillion to $2.2 trillion, while tax revenues have increased from $1 trillion to $1.4 trillion. Uh… that is not good. What makes this market different than say, treasury securities, is a muni-bond default is much different than a corporate-bond default. A bondholder can’t force a city into foreclosure, you kind of just have to accept the bond haircut and restructuring if there is no bailout by the federal gov’t. Especially when the economy is in a position like it is now, this uncertainty can more than offset the tax-free attribute of munis. So, if anything, Meredith Whitney telling everyone that there’s gonna be hundreds of billions of dollars worth of defaults could end up being a self-fulfilling prophecy (fuckin’ hate those, right?). Rates are already ridiculously low and we’re not seeing much growth. What happens when they rise due to defaults, and we haven’t even gotten out of the gutter? Don’t expect state debt problems to be solved anytime soon.
Just read this great article that provided me with some, I’m assuming, legitimate data for something I’ve considered many times: the quality of a democracy depends on the education level of the average voter. My thoughts are usually more in the form of “why are there so many god damn retards out there?” There’s an actual graph of the relationship between gov’t quality and avg. education, but here’s an excerpt:
In order to evaluate the actions of politicians, voters need to be able to process the available information and understand the impact of the actions of elected officials on their welfare. Voters unable to process information and make rational decisions are as ineffective as uninformed voters. Winston Churchill, who had a dismal view on voters’ ability to process information, once said: “the best argument against democracy is a five-minute conversation with the average voter”.
When we’ve got Mike Huckabee–a legit candidate in 2008–saying “[abortion] transcends all of the political issues”, then we’ve got fuckin’ problems. Huckabee, as much as I don’t wanna admit it, is obviously a pretty smart dude. But do you think he actually believes that bullshit? Heeellllll no. But there are PLENTY of people in this country that do… and he’ll gladly scoop those votes when he needs them. I mean seriously. Not the economy. Not education. I’d even accept fuckin’ airport security over this shit. Abortion! But… what are ya gonna do?
It’s hard not to feel depressed about all this. I mean I regularly bitch about the bullshit politicians do, but the reason they vote in lockstep over every single partisan issue is because that’s how they’ll get re-elected. The political process isn’t dangerous, it’s expected. What’s dangerous is the amount of people who vote for someone based solely on their party-affiliation, or their position on one or two issues. Down in Alabama, Billy Bob doesn’t know jack shit about the Dodd-Frank Act. But you can bet your sweet ass the second he finds out his district’s rep wants to close down all the Chic-fil-A’s in the state, he’ll be voting for the other guy.
Just remembered this video… laughing at the beginning and screaming at the end:
Dimepiece at 2:15 tho… that stutter is cool with me cutie.