Archive for October, 2008

  • The 28th Amendment
    , October 31st, 2008 at 10:43 pm

    How large should a representative assembly be relative to its population? My idea is that it should be the pi root of the population. I figure that since the Greeks invented democracy, it should have some connection to the ancients.

    Personally, I’d like to see this as a constitutional amendment (called the Elfenbein Amendment) that will formally determine the size of the U.S. House of Representatives, although I don’t believe it’s required. I think a simple law will do.

    I ran the idea passed John Derbyshire, and he had the best response—pi is appropriate given that the place is irrational.

    I’ve attached a spreadsheet showing what the historical root has been, and it’s often hovered around 3.14.

  • Voting During a Recession
    , October 31st, 2008 at 9:53 pm

    This will be the first time Americans will be voting for president during a recession in 48 years. The National Bureau of Economic Research hasn’t officially declared this a recession, but I’m assuming they’re mark the beginning of this current recession as starting sometime in the second quarter. If I had to guess, I’d say May or June.
    NBER has the dates of recessions going back to 1854 and this is the longest stretch without a recession election.
    Here are the previous recession elections:
    Several of those are now viewed as pretty historic elections. Notice how often there was a change of parties. It’s also pretty amazing how Harry Truman pulled it off 60 years ago.

  • The Nouriel Roubini Halloween Facemask
    , October 31st, 2008 at 12:46 pm

    Be afraid.
    Be very afraid.

  • Charlie Gasparino Gets Philosophical…I Think
    , October 30th, 2008 at 8:44 pm

  • The First Trading Day of the Month
    , October 30th, 2008 at 7:59 pm

    As we get set for the weekend, I’ll remind you the first trading day of the month has performed very well. Over the last 13 years, the S&P 500 is up 64.1%, but the combined return of the first trading day is up 68.6%. The first day of the month makes up slightly less than 5% of trading days.

  • Slowest Eight-Year Economic Growth Rate in 50 Years
    , October 30th, 2008 at 1:03 pm

    With today’s third-quarter GDP report, the trailing 32-quarter GDP growth rate is 19.1% which is annualized at 2.2%. That’s the lowest since the quarterly records start in 1947.

  • Headlines You Don’t See
    , October 30th, 2008 at 12:55 pm

    Market Watch Reports:

    Exxon Mobil breaks record with $14.8 billion profit

    Or another way of phrasing it:

    Exxon Mobil breaks record with $11.3 billion tax bill

  • Bear Market Rallies
    , October 29th, 2008 at 11:15 am

    Since the market broke one year ago, the Dow hasn’t been able to sustain one single bear market rally. The largest so far was an 11.2% gain from March 10 to May 2. With yesterday’s 10.9% gain, we might able to break that today.
    Bear market rallies are very typical in long down markets. The Dow lost 89% from September 1929 to July 1932, however it was anything but a straight line. There were five separate rallies of 23% or more. By “separate rally,” I mean that Dow lost everything it gained from the rally and went on to make a new lower. Think about that—each one was a false signal that the bad times were over.
    When the Nasdaq dropped 78% in the early part of this decade, there were four separate rallies of 24% or more. Three of the rallies were over 35%.
    Just a friendly warning for you.

  • WR Berkley and Fiserv’s Earnings
    , October 29th, 2008 at 8:55 am

    I have two recent earnings reports to pass along:
    WR Berkley (WRB) yesterday reported third-quarter operating earnings of 73 cents a share. That was two cents more than Wall Street was expecting. Unfortunately, it was down from the 93 cents a share it made in last year’s third quarter. This has been a difficult time for the entire insurance industry, but WRB is still going for less than eight times next year’s earnings.
    Fiserv (FISV) reported earnings after charges of 81 cents a share, which was two cents below Street estimates. Despite the miss, it’s an impressive increase over the 72 cents a share from last year’s third quarter. Fiserv’s stock is down very sharply in the past few weeks and it’s also going for just eight times earnings.

  • +889.35
    , October 28th, 2008 at 9:21 pm

    Today was the sixth-best day ever for the Dow. The fifth-best day came just two weeks ago yesterday.
    You know you’re in a different environment when you’re up 10% and it’s not even the best day of the month.