STOCK MARKET WATCH - Thursday, 5 January 2012
[font size=3]STOCK MARKET WATCH, Thursday, 5 January 2012[/font]
SMW for 4 January 2012
AT THE CLOSING BELL ON 4 January 2012
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Dow Jones 12,418.42 +21.04 (0.17%)
S&P 500 1,277.30 +0.24 (0.02%) [font color=red]
Nasdaq 2,648.36 -0.36 (-0.01%)
[font color=green]10 Year 1.98% +0.04 (2.06%)
30 Year 3.03% +0.06 (2.02%)
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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
[/center][font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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Financial Sector Officials Convicted since 1/20/09 = [/font][font color=red]12[/font]
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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font]
= new reply since forum marked as read
Discovered the font tag I see. 
Pretty fancy coloring the gains and losses. 
I will say this much, which is enough and more than enough, and then if the discussion needs to go further, I'll start another thread or something.
The ongoing issues of copyright protection/infringement, including the battles over digital books and "DRM" or the embedded "Digital Rights Management" in some ebooks, interest me far more than I have the time to explore. I do not know anything about the software itself; I know DRM can be disabled/removed from some e-documents, but I don't know how, so I'm not even going to get into that.
But when it comes to copyrights -- which are not quite the same as patents, though close -- most of the legal battles such as what we've seen with RIAA suing over music downloads and now the class action suit against the Big 5 (or 6, sometimes) publishers -- http://www.teleread.com/paul-biba/class-action-suit-files-against-apple-and-publishers-for-price-fixing-under-the-agency-model/ -- involve the protection of the rights of corporations to rip off creative artists and performers.
This goes back to the early syndication of TV programs where the studios and/or networks reaped huge royalties over the reshowing of sitcoms and kids' shows but the actors and others never got another dime. (Peter Graves, of TV's "Mission: Impossible" was one of the lucky/smart ones: for years and years and years he received "residual" checks from his early days on the children's show "Fury." Most weren't so fortunate.)
It also involves the recording contracts that early rock n roll performers signed in the 1950s and 60s, so that the payments they received of a couple hundred dollars from producers and promoters ultimately deprived the artists of royalties. The case of Frankie Lymon was probably the best known, maybe because it continued long after his death and because it involved his numerous marital entanglements http://en.wikipedia.org/wiki/Frankie_Lymon but Lymon wasn't the only one. It's still going on with all the business of the Beatles' songs being "owned" by Michael Jackson, etc., etc., etc.
Obviously, the founding fathers who wrote the Constitution and enshrined some form of what we know now as Intellectual Property Law into it had no idea what the future would bring. But long before there were e-readers and WhisperNet, publishers were ripping off authors. One of the reasons Charles Dickens was so successful financially was that he published his own work -- 
Demeter!
In the early to mid 1960s, when I was old enough to have enough money to buy my own books other than through the school book club, the local paperback outlet where I lived was a little combination newsstand, bookstore, tobacco shop called Kindler's, in Arlington Heights, Illinois. Books had the price printed on the front and that was what you paid. Period. There were no discounts, becuase books were "fair traded," meaning all retailers sold them for the same price and couldn't undercut each other. Somewhere along the line, that practice was ruled illegal price fixing, and then you began to see discounts.
By the time I got into the writing business, in the 1980s, a few things had changed. Books could be discounted, but they could also be resold. There had always been used book stores, but with the explosion of mass market paperback publishing in the 70s and 80s, the "book exchange" model arose, where readers could trade in their already-read books for used copies of others.
There were authors who hated this, because they saw it as depriving them of royalties. Romance novelist Rebecca Brandewyne was one of the most outspoken against used bookstores and in favor of somehow charging both used bookstores AND libraries to get more royalties for authors. Of course, this was also costing the publishers money, too, in lost sales, but there wasn't much they could do about it. Used bookstores and libraries were ensconced in the American culture and the corporations would be seen as just too greedy. Yeah, back in the day.
So by the 1990s, when technology had made the PC and the compact disk everyday items, the publishers knew they had to make sure they didn't lose out when books went the way of the gramophone and everyone was reading electronically. I'm sure we're all familiar with the various difficulties the entertainment industry has put in the way of consumer copying/downloading of music, videos, TV shows, movies, etc. What most people don't know is that the scene had already been set to do the same with digitized books.
The publishers wrote their contracts -- believe me, authors don't write these things, and agents don't give a rat's ass -- to give themselves "all rights." They didn't exactly buy the copyrights; those are still in the authors' names, so technically the author still "owns" his or her book. But the contracts give the publishers sole and exclusive rights to make copies and distribute, and those rights go on as long as the contract remains in force.
Of course, the publishers have to pay royalties, per the contracts, but in some cases those royalty rates are obscenely low. One percent of the net proceeds isn't unheard of, and some publishers have so many subsidiaries and "overseas" offices that the "net proceeds" is determined after the publisher sells the contract to themselves fourteen times over, leaving the author to get 2 cents out of every $8 copy sold.
In some contracts, electronic rights aren't even mentioned, but in others, such as the thousands of contracts written by Harlequin Enterprises (or whatever name their home company goes by these days; maybe it's still Torstar), the publisher retains all rights in perpetuity. So for the past couple of months Harlequin has been reissuing digitized editions of old books, which have a HUGE market, and the authors are getting a pittance. Unfortunately, Harlequin has been doing shit like this for as long as I've known about their practices (which goes back to about 1984). They sell a lot of books, and give their authors a small portion to keep them happy. (See Paul Grescoe's "Merchants of Venus." Very nice man.)
Other publishers and contracts have different arrangements and terms, and in many cases, authors are able to essentially declare the contract no longer valid because the books are no longer in print. This is known as reversion of rights, and most publishing contracts contain a clause that enables the author to request that his or her rights be returned so they can either publish the book themselves or with another publisher.
Most of these reversion clauses contain very specific language -- the book has to be out of print X number of years, the author has to request reversion in writing, the publisher has X months to reply, the publisher can retain rights by doing Y or Q or N. Y or Q or N usually involves reprinting the book in a minimum number of copies. Since that involves substantial cash investment, if he publisher doesn't think they can sell enough of a new edition to recoup the investment, they don't reprint and thus allow the author to take his or her rights back and do with them what they will.
Today, as is the case with Harlequin's digital reprints(sic), authors can digitally republish their older books (called 'backlist"
and make more than they ever did in print. A standard royalty rate in the 1980s was 4-8% of retail, depending on publisher. So when Marsha Canham's historical romance "Bound by the Heart," to site one example, was published by Avon in 1984, the cover price was $2.95 and maybe she was in a 6% royalty, so she got 18 cents per copy.
In 2011, Ms. Canham re-acquired her rights to "Bound by the Heart" from Avon (a division of one of the huge conglomerate corporations) and reissued her own digital edition http://www.amazon.com/Bound-By-The-Heart-ebook/dp/B0046H9IBA/ref=sr_1_1?ie=UTF8&qid=1325771486&sr=8-1
It sells on Amazon for $3.99 and she gets a 70% royalty, or roughly $2.80 per copy.
As more and more and more books are purchased in digital versions, publishers are going to lose their competitive edge. I mean, seriously, WHY WOULD ANYONE continue to go to print publishers for a 10% royalty that you have to wait years for (advances are WAY down from what they used to be, so don't even figure that in) when you can publish almost instantly for 70% royalties that show up in your bank account in 90 days?
To stave off that eventuality and to lock up the rights virtually in perpetuity, the publishers ganged up against the authors with this "Agency" pricing model, spurred on in part by the notoriously "proprietary" Apple. Who loses? Readers and authors.
The publishers will make some concessions to readers, but not many. That's where the money comes from. But as long as publishers can put out digital editions for the same price as "dead tree" editions, why not? They make a helluva lot more money off them than they do print. And whatever the older generations say about the comfort of holding a book in the hand, let me tell you that I'd much rather have my 5,000 dead tree books on an electronic device that taking up space in my house! (Well, not really. I like my books.) Generations who have grown up with electronic publishing and who don't have the space for 5,000 or even 500 books are going to prefer the convenience of digital.
DRM is easily removed, so ebooks can be "recycled." The publishers don't like it, but it's a fact of life. Readers dislike the proprietariness of differences between Nook and Kindle and Kobo and whatever other devices are out there. (Anyone remember Betamax and/or 8-track tapes?) The variety in hardware/software systems protects ONLY the publishers and distributors; it does nothing to enhance the reading experience for readers or the income of the authors.
Publishers have also gone to nefarious lengths to protect their contracts and their rights, and to keep authors from regaining theirs. THERE IS NOTHING ILLEGAL ABOUT WHAT THEY DO, but there is a lot that is unethical.
For instance, one author followed the terms of her contract to request in 2011 the reversion of her rights to a book that was last printed in 1996. In the process of requesting that reversion, she learned that the publisher had, without notifying her (they don't have to), printed approximately 28,000 copies of that book in 2004 and sold them for 50 cents each to a bulk purchaser. Even at 50 cents each, the publisher made a profit, so you know what that means -- IT COSTS LESS THAN 50 CENTS A COPY TO PRINT A PAPERBACK BOOK (if you already have the typesetting done, etc.). The copies were identified as "first editions" which they are not. Changing that information on the copyright page apparently would have eaten into the publisher's profits. Even so, with that 2004 edition the book had been OOP (out of print) long enough for the rights to revert.
However, rather than saying to the author, "Hey, this book didn't sell so well in 1996 and it doesn't look like anyone else is going to show any interest in it, here, you can have the rights back," they told her they were going to make the book "available" again in a trade paperback (that's the bigger size) edition.
Now, why would they do that? Why go to the expense of printing a bunch of larger edition paperbacks when the original mass market size didn't sell all that well? Doesn't make any sense, does it. Of course not. But the key word here is "available." And that's the wording from the contract -- in order to keep from having to revert those rights to the author, all the publisher has to do is make it "available" for sale. And that's what they did. For a few weeks, they made a print-in-demand edition "available" at $19, discounted at Amazon to $15. No investment by the publisher at all.
The obvious next question, of course, is why didn't they just throw up a digital version? Why not cash in on the really new technology?
Let me tell you something -- it costs virtually NOTHING to digitize a paperback. So why didn't the publisher do that?
Simple -- they didn't have the rights. Unfortunately, neither did the author. Because when the contract was written -- remember the book was published in 1996 so the contract was from 94 or 95, and I happen to know it was 1994 -- everyone knew electronic rights were on the horizon but no one knew what they'd be. So this particular contract gives the publisher the right to release a digital version, but no royalty rate is set, and they can't publish a digital version without negotiating with the author "in good faith." Now, understand that under the contract, they don't HAVE to publish an electronic edition, but they can if they want to, provided they negotiate that royalty rate.
And in order to hang onto that digital right, they have to make the book "available" and avoid reversion to the author. The author, however, has no right whatsoever to the digital edition of her work.
Is any of this making any sense? probably not, but my point is to show you how nefarious, how greedy, how evil publishers are.
In this case, the publisher is Simon & Schuster. They can't put out a digital edition, but they won't let the author put one out either, so instead they rigged up this so-called "trade paeprback edition" to hang onto their rights. And unless the author wants to foot the bill to take it to court, the matter ends there.
Publishers are corporations and their sole allegiance is to the stockholders and the bottom line. They are just another variety of vampire squid, jacking up the price of digital books because they can. They screw the readers and they screw the authors.
That's why I was so glad to see Greg Mitchell's "Atomic Cover-Up" out in an affordable digital edition that appears to be self-published. I'm pretty sure that he got a lot more of the money than some bloodsucking corporation.
Okay, that's enough for now. It's not a novel, but it's close.
My day job calls.
TG, who is not Marsha Canham
Asian stocks (MXAP) and the Australian dollar weakened after Italy’s biggest bank said it needs to raise more capital, spurring concern that the European debt crisis is worsening.
The MSCI Asia Pacific Index (MXAP) fell 0.3 percent as of 9:56 a.m. in Tokyo after climbing 2.4 percent in the past two days. Standard & Poor’s 500 Index futures were little changed. The so- called Aussie retreated 0.4 percent to $1.0332. The euro was little changed at $1.2933 after yesterday’s 0.8 percent decline. Gold and oil were also little changed.
“Problems sparked by the European debt crisis are reigniting and people in the market have reaffirmed that the situation has not changed,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That’s weakening the euro and hurting exporters with a heavy reliance on Europe.”
/... http://www.bloomberg.com/news/2012-01-05/asia-stocks-aussie-drop-on-europe-concern.html
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HONG KONG, Jan 5 (Reuters) - China shares closed at their lowest level in almost 34 months on Thursday on fears that the Chinese economy will cool further, with strong turnover a bearish sign pointing to more losses to come.
Hong Kong stocks managed to hold on to gains despite the downdraft from mainland markets, with the Hang Seng Index ending up 0.5 percent at 18,813.4 points, and the China Enterprises Index of top mainland listings in Hong Kong gaining 0.5 percent. But traders said weak turnover in Hong Kong pointed to a lack of confidence and signaled that the day's gains may not be sustained.
In Shanghai, investors unwound positions in growth-sensitive sectors and small cap names after the HSBC China services purchasing managers index (PMI) for December showed only sluggish growth in the sector.
The Shanghai Composite Index reversed early gains to slip for a second-straight session, closing down 1 percent at 2,148.5 points. The Shanghai materials sub-index was a relative underperformer, declining 2.4 percent... The CSI500, a gauge of small- and medium-cap names listed on the Shanghai and Shenzhen bourses, slumped 3.7 percent.
/... http://uk.reuters.com/article/2012/01/05/markets-hongkong-china-stocks-update-idUKL3E8C5ESO20120105
will happen in India. It may not seem a big deal on the surface but those call center jobs are unraveling the social fabric in India. Kids are making good money if not more than they would if they went to college. They don't want to live at home and do the arranged marriage thing and live in a multigenerational cramped house. Now add to that a one child policy strictly enforce and the wholesale female genocide that has been going on for years and is now showing up. Oh and did I mention the custom that the wife takes care of the husbands parents??? Everyone wanted a boy for 'security in our old age' but they didn't think past the sex...of the child.
India is in a bit better spot than China. India has many expatriots, but what American, Canadian or western born Indian woman would give this up to go back to India...It ain't happening folks. But an Indian born woman might be willing to marry a Western born Indian man (my Indian born niece and her Canadian born Indian husband). She did have a good number of interested suitors in India but opted for the Canadian (and a sweet guy to boot-eh).
Hubby already noticed some of the changes I told him about the last time we were there-they have discos and clubs now and single people are renting flats. All this change in 8 years.
... Gold has responded to the onset of Euro-QE backed by a Fed that has made dollars available to foreign banks at lower rates by moving decisively below its 200-day moving average. This begs the question: As we move into the New Year, what might the action of gold be telling us about the state of QE in January 2012?
As we see in Chart 1, the SPDR Gold Shares ETF GLD, a proxy for gold itself, has broken sharply below its 200-day moving average. The last time gold dropped below its 200-day moving average was August 2008, just before the big stock market break that began in September of 2008 and extended into October/November of that year. In that case, gold was signaling the start of a liquidity crunch that led to severe forced selling in stocks going into the third quarter of 2008. This was followed by another wave of selling that took the market to its ultimate lows in March of 2009. In the end it all added up to a rather harrowing experience for investors. Could gold be signaling another period like this for stocks just ahead?...
... If gold presages another down leg in stocks, we would tend to look at this as a necessary “clearing of the decks” in the stock market given that we are now in the third year of a bull rally that began off the March 2009 market lows... If the irresistible force of mass fiat money-printing, the essence of QE, runs into what finally becomes the immovable object in a debt mountain that has grown well beyond reasonable proportions, then stocks could see some problems in the early part of 2012. They may very well be in a position to stage such a new down leg in a continuing market correction that may have been initiated with the sharp break off the market’s peak in late July/early August of 2011.
... We believe a new down leg for the market that began in the early part of 2012 could result in a bottom perhaps some time in spring or summer. This would in turn potentially coincide with the market beginning to discount the potential for positive government economic policies and initiatives that could be catalyzed by the November 2012 election. On the margin, the potential for serious economic policy change could provide enough of an “inflection point” to spark a strong market rally phase at some point in the mid- to latter parts of next year...
/... http://www.marketwatch.com/story/what-is-gold-telling-us-2012-01-03?reflink=seekingalpha
Sounds about right to me... What will second-term Obamanomics be like?
Note that SPX around 1250, where it is today, was at the edge of the precipitous fall to around 800 in 2008.
Similar is observed (& with quite clear 'head and shoulders' at present) in emerging markets:
Last edited Thu Jan 5, 2012, 06:58 AM - Edit history (1)
LONDON, Jan 5 (Reuters) - Britain's top shares fell on Thursday, pressured by financial stocks, as concerns over Europe's debt problems took centre stage ahead of a French debt auction later in the session.
Banks, under the cosh on Wednesday when funding concerns were highlighted by a deeply discounted rights issue from Italy's UniCredit, extended falls, as the spotlight shone firmly on France, especially given concerns about the country's triple-A credit rating.
France plans to raise up to 8 billion euros in long-term debt, following on from Wednesday's 10-year German Bunds auction, which while subdued nevertheless marked a sharp improvement from November...
... The UK benchmark was down 22.05 points, or 0.4 percent, at 5,646.40, by 0934 GMT, having fallen 0.6 percent on Wednesday.
/... http://uk.reuters.com/article/2012/01/05/markets-britain-stocks-idUKL6E8C518020120105
Last edited Thu Jan 5, 2012, 07:08 AM - Edit history (1)
European stocks (SXXP)fell, erasing earlier gains, as banks retreated before a French bond sale. U.S. index futures and Asian shares also declined...
... The Stoxx 600 yesterday retreated from a five-month high on concern that the region’s banks will need to raise more capital to weather the sovereign-debt crisis. France plans to sell as much as 8 billion euros ($10.4 billion) of debt today in the country’s first test this year of investor appetite for its bonds amid threats of a downgrade of its AAA rating by credit-rating companies.
Service industries in the U.S. probably grew in December at the fastest pace in three months, showing the economy picked up as 2011 drew to a close, economists said before a report today.
The Institute for Supply Management’s index of non- manufacturing (NAPMNMI) industries, which account for about 90 percent of the economy, rose to 53 from 52 in November, according to the median projection of 65 economists surveyed by Bloomberg News. The number of applications for jobless benefits (INJCJC) fell last week, another report may show.
In Greece, Prime Minister Lucas Papademos said that deeper cuts in incomes are the only way for the country to remain in the euro area and receive more financing from international creditors. These steps are necessary to avert an economic collapse that may otherwise come as soon as March, he said.
/... http://www.bloomberg.com/news/2012-01-05/european-stock-index-futures-are-little-changed-before-french-bond-sale.html
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In order to truly understand what is happening today, we must first explore how money came to be, and the purpose it serves.
In primitive human societies, humans were all hunters, with no or little/simple tools, so there was no real specialization. These people barely had enough in order to survive - nothing more.This is why there was no private property, or trade transactions (some primitive races in places like the Amazon still live in such a state). But then humans began to improve their tools and weapons, and they also developed agriculture as well, which was a huge leap forward. It today's terms, people become more productive, and "specialization" started to appear, as some people became "professional farmers", some others were "professional craftsman" creating tools etc. For the first time in history, there were different "professions" - this "specialization" allowed people to become more productive in more and more tasks, and every "professional" (eg farmer, hunter, builder, craftsman, etc) was not self-sufficient, but also relied on others in order to live a better life. By increasing productivity, humanity could create more wealth than before, and by increasing specialization some people (eg the farmers) had a surplus of wheat, and some other people (eg the craftsmen) had a surplus of tools or clothes. So, this is when private property firsts appears, and trade starts to grow, as one person exchanges "something that belongs to him" with "something else" that belongs to "someone else".
This barter system had some problems however: For example, some products are not easy to carry, or they don't last long (food is a good example, as it must be consumed within a few days). Furthermore, as specialization deepens, there are more and more trade transactions. This is why people turned to something else, a "super-product" that could be used as a benchmark for all other products: Money. All other goods have a value that could now be expressed through it. Mankind has used many different forms of money, but gold (and secondarily silver) is the form that dominated over all the other forms. The reason is that gold is durable, easily transferable from one place to another, and rare. Many other forms of money where tried, but nothing could beat gold's advantages as money.
Today, specialization has grown to an incredible degree - capitalism has created an international system, where everyone is more or less dependent on others from around the world in order to live a good life. When such systems collapse, humanity suffers greatly - here's Tony Jackson from the Financial Times: "Four years ago, I related in this column how a stockbroker acquaintance of mine had likened the outlook to 1929. A couple of weeks ago he was back on the phone. Forget 1929, he said: we are looking at the Dark Ages." The Dark Ages, of course, are something else again. But let me repeat here what I said four years ago: that the purpose of such comparisons is not to indulge in fancies about history repeating itself, but to expand our conception of the possible.
Quantifying the effects of the collapse of the Roman Empire is not an exact science. But from the start to the finish of the first millenium AD, according to the economic historian Angus Maddison, the economy of Western Europe shrank by around a quarter, and that of Italy itself by nearly half. What this meant for Britain has been spelt out by the Oxford historian Bryan Ward-Perkins. After the Romans left in 410 AD, the archaeological record suggests that the economy slumped to a much more primitive level than on their arrival nearly 400 years earlier. The reason is clear enough. The more complex and specialised an economy becomes, the more helpless its individuals are in the face of breakdown. The Romans introduced a higher level of complexity to Britain, then took it back home again. It is here that parallels with today start to look rather stretched. But the theme of periodic collapse is perhaps borne out by the longer historical record...capitalism is about to send us in a new "Dark Age”, as antagonisms create trade wars, protectionism and full-scale military wars. We are dependent on each other, but we are divided by a handful of oligarchs, who don't produce anything but exploit us, grabbing an ever-increasing part of the wealth for themselves, leaving nothing but crumbs for us to fight over.
We will talk more about this in the future, but for now let's get back to the history of money, as gold ("money"
has today been replaced by "currency".
AND IT GOES ON==ECONOMICS IN A NUTSHELL (AND NOT JUST ANY NUT, EITHER). TODAY'S MUST READ
So why buy gold when you can buy the commodities themselves? And if it is a time of crisis who says people will trade commodities essentials for survival for a yellow metal. The greatest demand from gold comes from the jewelry industry, a highly cyclical industry that bears a high correlation to the stock market. The only real value gold has comes from demand for jewelry and few industrial applications; it has little real value. Gold bugs say gold does not hold the risk currencies do because there is no corrupt government regulating or in charge of it like in the case of a currency. This is partly true, the value of gold is not determined by any central bank, but it is determined by the market. As humans we will always value food and shelter more than an arbitrary yellow metal. By this logic the price gold should never outpace the price of farmland (JJA) , oil (OIL), Natural Gas (GAZ) livestock (COW), grains (JJG) , and other real commodities. These real commodities hold the same exposure to inflation, while also maintaining a very inelastic demand curve.
By no means am I saying that gold cannot rise to $10,000 an ounce as some gold bulls are predicting, because as is said on Wall Street “the market can stay irrational longer than you can stay solvent.” But every rational investors interested in investing in gold should really evaluate the risk they are taking when investing in the "safest currency."...
http://seekingalpha.com/article/317412-gold-a-commodity-or-a-currency
http://jessescrossroadscafe.blogspot.com/
Hello Chicago-area comedy/economics fans:
* I'm on my way to Chicago for the American Economic Association annual meeting and will be doing two gigs that are free and open to the public, one at the AEA Humor Session (on Saturday Jan 7 at 8pm, with headliner Paul Krugman!) and one at the University of Chicago (on Monday Jan 9 at 7pm), plus some free shows for local high schools. Details on all of these here and if you have connections at the University of Chicago please help spread the word! (The econ department there has been typically laissez faire The Jan 7 show will definitely be packed, and the Jan 9 one may be also, so show up early to get a good seat! And of course if the dates above don't work for you then drop me a line if you want to hire me for another time while I'm on my 2012 "Gold Standard" World Tour, which so far includes gigs in Asia and Europe, plus Duluth MN, Boston, Oregon, Texas, and Florida.
* Check out excerpts &etc from the just-released Volume 2 (Macroeconomics) of the Cartoon Introduction to Economics.
* In case you missed it I've got a handful of China video blogs from the 5 months I was in Beijing (including some comedy bits) and I also had a NY Times op-ed last month ("The dismal education" .
Happy winter, hope to see you this coming week!
yoram bauman phd, standupeconomist.com
“the world’s first and only stand-up economist”
i wonder if that's a Good Omen or a Bad Omen?
i just needed confirmation.
A major bear on the housing market, Amherst Securities' Laurie Goodman has predicted since 2009 another housing crash as banks are forced to liquidate tons of bad loans.
Up to 11 million mortgages are likely to default, according to Goodman. This is a frightening figure, seeing as only several million have been liquidated since the crisis began. When it happens, the market will be flooded with supply.
Goodman reached 11 million by projecting default rates for non-performing loans, re-performing loans, and underwater loans. Here's a slide from a recent presentation (via The Atlantic):
Read more: http://www.businessinsider.com/laurie-goodman-11-million-mortgages-2011-7#ixzz1iabwLNWQ
An old pearl of wisdom from the Great Depression held that investors should have known it was time to sell when shoeshine boys started handing out stock tips. The day traders of the late-1990s were a recent version of the same phenomenon. When the dumb money is rushing into the market, it’s probably a smart time for you to bail.
Until this past week, I thought of the house-flipping craze of the mid-aughts in the same light. The fact that there were enough speculative, small-time investors in house prices that A&E turned it into a reality show was surely a sign of a market out of control. But what I didn’t realize was that, unlike the shoe-shine tipsters of the ’20s, house-flippers were actually driving the price explosion. New research from the Federal Reserve Bank of New York indicates that flippers were in fact sufficiently numerous and active to make a major impact on prices, and that these facts have interesting implications for both monetary policy and bank regulation in the future.
The authors, Andrew Haughwout, Donghoon Lee, Joseph Tracy, and Wilbert van der Klaauw, were able to calculate how many home-buyers had multiple mortgages and thus how many people own multiple homes.
The data let us see that the growth of house prices in the first half of the aughts was closely associated with a sharp rise in the number of people owning multiple homes. In 2000, only 20 percent of mortgages were going to multiple mortgage holders and 75 percent of those were for second houses. By 2006, 35 percent of mortgages were multiples and more than 5 percent of all loans were going to people with four or more mortgages. What’s more, the trend was especially pronounced in what we now know to have been the prime bubble states of California, Florida, and Nevada. By 2006, at least 25 percent of mortgages in these states were going to people who already owned one home, and a further 20 percent went to people with at least two.
*** i have tended NOT to believe what this article is saying
Nasdaq 2,643 -5 -0.20%
S&P 500 1,270 -7 -0.54%
GlobalDow 1,819 -19 -1.05%
Gold 1,600 -13 -0.78%
Oil 102.58 -0.62 -0.60%
Euro /$1US 1.2809 -0.0136 [/font]
umm...why the hell is that in green?? I set the font color to red! *shrug*
oh well...blah.
Stephanie Hession runs some useful comparisons on housing costs in the DC area and finds that people are willing to pay a significant premium to live within walking distance of a Metro station. It's about a 9 percent premium in Fairfax County, a 28 percent premium in the District, and in "the Northern Virginia, Inner Beltway and Montgomery County submarkets, the premiums are even higher, both near 40 percent in the third quarter of 2011."
2012 is set to be a big year for transit starts, which is good news. But it's worth reflecting on the fact that these high premia are a sign of something out of whack. It's natural for land with access to special geographical features, be that a Metro station or a beach, to be more expensive than land elsewhere. But we have the technology—specifically elevators—to fit a very large number of homes on a small patch of land if the market demand for living there is real. The gigantic premiums in the inner ring of suburbs strongly suggest that the areas around their Metro stations are under-built, and probably saddled with excess parking requirements, height restrictions, and other rules that restrict access to transit-oriented housing. The 28 percent premium in the District is bad enough, but 40 percent is absurd. The lesson for cities around the country who are making new investments in transit infrastructure is that this stuff is both expensive and valuable. But to maximize the value you get for your expense, you really need to unlock the potential for densty created by the high demand for these locations. If you build the lines but don't allow the density, you've really just created a private benefit for people who happen to live near the stations.
I think the smileys are available in the problems and metadiscussion forum, pinned to the top.
I just memorized the ones I use the most, like
(leave out the spaces)
: thumbsup :
: hi :
: evilgrin :
: donut :
from the patronage days? Actually, hubby's family can trace their lineage back to a court musician. My family does include numerous musicians including one that was a premire teacher at the Julliard. Musician trace themselves back though their teachers or the school. Artist use to have schools. Jewelry etc, seems to be through craft guilds. It is an interesting topic.
But no matter TG, I consider you in a class of your own and priceless beyond measure. 
