Author Archive

  • Proxy Battle at the NYT
    , February 29th, 2008 at 1:27 pm

    Get ready folks. Looks like there’s some ol fashioned proxy wrastlin’ brewing down yonder at the NYT:

    A dissident investor stepped up pressure on The New York Times Co. Friday, formally proposing its own slate of four directors and saying the company needs to take more drastic action to compete online.
    Harbinger Capital, an investment firm that now owns about 19 percent of the company, filed its own proxy statement with the Securities and Exchange Commission listing its nominees for directors to be elected at the Times’ annual meeting April 22.
    The Times has already filed its own full slate of director nominees, but has said it was still considering whether to accept Harbinger’s candidates.
    Times spokeswoman Catherine Mathis said the company’s board was interviewing the Harbinger nominees. She declined to comment further on their proxy filing.
    The looming proxy battle comes as the Times and other U.S. newspapers are facing huge challenges in adapting to the steady migration of readers and advertising dollars to the Internet. An economic slowdown coupled with a deep slump in the housing market is worsening the situation.

    Good for them; we need to see more of this. The stock is about were it was 11 years ago.

  • Natural Born Presidents
    , February 29th, 2008 at 11:07 am

    One of the sillier parts of our Constitution is that only natural born citizens can become president. The New York Times reports that this could raise questions for John McCain, who was born in the Panama Canal Zone (McCain’s father and grandfather were Admirals).
    Most experts agree that as a legal challenge, this issue won’t go very far. One lawyer said that if she were on the Supreme Court, she’d rule in McCain’s favor, “But it is certainly not a frivolous issue.”
    Interestingly, Barack Obama was to an American mother and a Kenyan father. Again, there’s no doubt that he’s an American citizen. He was born in Hawaii on August 4, 1961, so this could be the first election were the two major candidates were not born in the continental U.S.
    That’s less than two years after Hawaii was granted statehood. So if he was just slightly older, then we’d have the first election were the two major candidates weren’t born on American soil.

  • California Housing Market
    , February 29th, 2008 at 10:47 am

    I have some bad news for California homeowners. The median price of a home in the San Fernando Valley has fallen 25%, from $655,000 to $500,000. The good news is that the median value is $500,000.

  • Leap Day
    , February 29th, 2008 at 10:39 am

    The market is having a lousy day today, but historically, Leap Day has been one of the better market days. A few months ago, I looked at how well the Dow did every day of the year.
    On average, the Dow has risen 0.1256% on Leap Day. In terms of the Presidential Election Cycle, we’re still in a flat period. The Dow has historically been fairly quiet from August of the Pre-Election year through July of the Election year. After that, the market shoots ahead for another twelve months.

  • Indexed
    , February 28th, 2008 at 4:35 pm

    Jessica Hagy’s Indexed blog is very cute. She has a book out as well.
    (Hat Tip: Barry Ritholtz)

  • More Lousy GDP Numbers
    , February 28th, 2008 at 11:15 am

    The revised GDP report came out today and it showed 0.6% growth for the fourth quarter, which was the same as the initial report.

    “The first quarter will be ugly,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “The strength of exports is what would keep us out of a recession if we don’t go into one.”
    The report, combined with figures today showing claims for unemployment insurance jumped last week, reinforced traders’ expectations that the Federal Reserve will cut interest rates again. Investors see a 100 percent chance of at least a half- point reduction in the benchmark rate to 2.5 percent by the end of the next meeting on March 18. Odds of a three-quarter point cut rose to 36 percent, from 10 percent.
    Fed Chairman Ben S. Bernanke, testifying to the Senate Banking Committee today, signaled he’s ready to lower interest rates again to sustain the expansion.
    The median estimate in a Bloomberg News survey of 74 economists was for a 0.8 percent increase in GDP.

    This was one of the smallest revisions I’m aware of. The GDP number was revised lower by 0.0025%.
    Here’s a look at GDP growth based on a trailing three-quarter basis. I don’t know why, but that often seems to be useful time frame.
    image618.png

  • Bernanke Warns
    , February 27th, 2008 at 2:37 pm

    My favorite headline is back in the news today.
    Fed’s Bernanke warns of more economic trouble
    Bernanke Warns of Worsening Economy
    Bernanke warns of sluggish US growth
    Europe shares drop as Bernanke warns on writedowns
    Bernanke warns of sluggish growth
    Bernanke Warns Economy Worsening
    Here are some previous warnings.
    Bernanke Warns on US Housing, Economy
    Bernanke warns stock investors
    Bernanke warns against ad hoc regulation of derivatives
    Bernanke warns of economic ‘drag’
    Bernanke Warns of Possible ‘Crisis’ From Budget Gap
    Bernanke warns of worse to come in subprime fallout
    Bernanke Warns Inflation Remains A Significant Risk
    Bernanke warns of ‘vicious cycle’ in deficits
    Bernanke warns about economic isolationism
    Bernanke warns of falling economy
    Bernanke warns action needed soon on budget
    Bernanke warns US about burden of ageing population
    Bernanke Warns Of Growing Inequality
    Bernanke warns against protectionism
    Greenspan home robbed

  • The 90-Day Treasury Is Below 2%
    , February 27th, 2008 at 2:34 pm

    Ben’s testimony worked! The yield on the 90-day T-Bill has slipped below 2% again. Six months ago, the yield was close to 5%.

  • RIP: William F. Buckley
    , February 27th, 2008 at 11:48 am

    WFB2578.jpg
    From the New York Times:

    William F. Buckley Jr., who marshaled polysyllabic exuberance, famously arched eyebrows and a refined, perspicacious mind to elevate conservatism to the center of American political discourse, died Wednesday at his home in Stamford, Conn.
    Readers’ Comments
    Mr Buckley, 82, suffered from diabetes and emphysema, his son Christopher said, although the exact cause of death was not immediately known. He was found at his desk in the study of his home, his son said. “He might have been working on a column,” Mr. Buckley said.
    Mr. Buckley’s winningly capricious personality, replete with ten-dollar words and a darting tongue writers loved to compare with an anteater’s, hosted one of television’s longest-running programs, “Firing Line,” and founded and shepherded the influential conservative magazine, “National Review.”
    He also found time to write 45 books, ranging from sailing odysseys to spy novels to celebrations of his own dashing daily life, and edit five more. Two more books, one a political novel, and the other a history of the magazine called “Cancel Your Own Goddam Subscription” are scheduled to be published in 2007.
    The more than 4.5 million words of his 5,600 biweekly newspaper columns, “On the Right,” would fill 45 more medium-sized books.

    My favorite Buckleyism came in the letters section of the National Review. A woman wrote in to say that she was fed up — she could no longer stand Buckley’s use of big words and Latin phrases. She said that by the time she finished one of his columns, she didn’t know if he was “for or against.”
    Buckley wrote: “Madam, I am against. Sincerely – WFB”
    In a more civilized time, here’s Buckley threatening to punch Gore Vidal.

  • The Dollar Falls to $1.50 Against the Euro
    , February 27th, 2008 at 10:08 am

    Ben Bernanke is speaking again today on Capitol Hill. This is the start of his big semi-annual testimony before the House and Senate.
    I’ve gone to the previous few hearings (even snagging the seat right behind Ben), but honestly, it’s not that interesting in person. The room is almost completely empty, and the questions from members of Congress are a bit embarrassing.
    Yesterday, the U.S. dollar, for the first time, traded below $1.50 to the Euro.

    The U.S. currency slumped against 15 of the 16 most-active counterparts after Fed Vice Chairman Donald Kohn said turmoil in credit markets and the possibility of slower economic growth pose a “greater threat” than inflation.
    Kohn’s comment “confirmed the Fed will keep cutting interest rates,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, the world’s biggest currency trader. “That brought more downward pressure on the dollar.”
    The dollar fell to $1.5047 per euro before trading at $1.5017 at 7:47 a.m. in Tokyo from $1.4979 yesterday in late New York. The U.S. currency traded at 107.24 yen, following a 0.7 percent decline yesterday.
    Boyton forecasts a dollar drop to $1.55 per euro in the next three months. He’s more bearish than the consensus. The dollar will rebound to $1.48 per euro by the end of March and to $1.40 by year-end, according to the median forecast in a Bloomberg News survey of 41 analysts.
    The U.S. currency has lost about a quarter of its value in the past five years, according to the Fed’s U.S. Trade Weighted Major Currency Dollar index, which comprises seven currencies of U.S. trading partners. The weaker dollar has made U.S. goods cheaper abroad, boosting exports to a record and shrinking the nation’s trade deficit last year for the first time since 2001.

    Here’s Bernanke’s entire testimony. This is a sample:

    As part of its ongoing commitment to improving the accountability and public understanding of monetary policy making, the Federal Open Market Committee (FOMC) recently increased the frequency and expanded the content of the economic projections made by Federal Reserve Board members and Reserve Bank presidents and released to the public. The latest economic projections, which were submitted in conjunction with the FOMC meeting at the end of January and which are based on each participant’s assessment of appropriate monetary policy, show that real GDP was expected to grow only sluggishly in the next few quarters and that the unemployment rate was seen as likely to increase somewhat. In particular, the central tendency of the projections was for real GDP to grow between 1.3 percent and 2.0 percent in 2008, down from 2-1/2 percent to 2-3/4 percent projected in our report last July. FOMC participants’ projections for the unemployment rate in the fourth quarter of 2008 have a central tendency of 5.2 percent to 5.3 percent, up from the level of about 4-3/4 percent projected last July for the same period. The downgrade in our projections for economic activity in 2008 since our report last July reflects the effects of the financial turmoil on real activity and a housing contraction that has been more severe than previously expected. By 2010, our most recent projections show output growth picking up to rates close to or a little above its longer-term trend and the unemployment rate edging lower; the improvement reflects the effects of policy stimulus and an anticipated moderation of the contraction in housing and the strains in financial and credit markets. The incoming information since our January meeting continues to suggest sluggish economic activity in the near term.