• Those Wacky Economists
    Posted by on June 8th, 2009 at 3:18 pm

    The New York Times:

    President Obama was getting his daily economic briefing one recent morning when a fly distracted him. The president swatted and missed, just as the pest buzzed near the shoes of Lawrence H. Summers, the chief White House economic adviser. “Couldn’t you aim a little higher?” deadpanned Christina D. Romer, the chairwoman of the Council of Economic Advisers.

  • How to Fix Financial Television
    Posted by on June 8th, 2009 at 10:34 am

    Barry Ritholtz has a great post listing 15 ways to fix financial television. Here’s his list:

    1. Stop Yelling. Stop interrupting. Stop Talking Over Each Other: This is not Jerry Springer, its serious business. Please treat it that way.
    2. Bring us People We Don’t Have Access to. Where various FinTV channels do really well is when they bring us long, thoughtful interviews with the likes of Warren Buffett, WIlliam Ackman, David Einhorn, and others. This morning, CNBC had on James Rickard. More of this please.
    3. S – L – O – W D – O – W – N
    4. Risk: All traders have to appreciate the downside of trades. So too, does FinTV. Explain stop losses. Understand Risk/Reward. Recognize there are periods when Buy & Hold is a jumbo loser.
    5. Lose the Octobox. ‘Nuff said.
    6. Separate the Signal from the Noise. Understand that most of the day to day action is simply noise. Not every data release, slice of news, or rumor is significant. Stop treating them as if they are.
    7. FactCheck: An awful lot of things on air get stated with authority and confidence. Most of them are junk. Why is it that the more dubious a proposition is, the greater the confidence the speaker musters? Consider fact checking as much of the statements that are made on air.
    8. Accountability is important: Track record your guests, let us know how their past few calls have been. Are they Perma-bulls or bears? Are their stock picks awful? Are they money makers? If not let us know. (If not, why even have them on?)
    9. Bring Back Louis Rukeyser: Not the man, but rather, his style. Wall $treet Week — Rukeyser hosted it from 1970 to 2005 — was plain-spoken, thoughtful and accessible. The investing public would appreciate something of that sort — again.
    10. Sound FX: What is with all the bizarre sound effects every time a screen changes? Its financial news, not a video game. Kill ‘em.
    11. Embed your video (on your own website or YouTube) instead of using WMP. At long last, thank you.
    12. Most stock picks are losers. That is part of the challenge — like a baseball, a 350 hitter is an all star. Explain this to your audience.
    13. Stop the Bull/Bear Debate: This is a vast over-simplification of the market, and does not serve your audience.
    14. Partisanship: Leave your personal politics at home. Viewers don’t care what most of you think.
    15. Respect the Audience: We are adults. Treat us that way.

    Since I was one of the very few people who didn’t like Jon Stewart’s famous attack on CNBC, I need to stress that there’s much to criticize of the network.
    I think Barry is particularly about with slowing down, respecting the audience and ditching the Octobox. CNBC simply moves too quickly to give viewers much information.
    I’m not so bothered by the bull/bear debate or the political stuff as long as it’s moved to the after-hours shows. Larry Kudlow should not be on during market hours.
    CNBC has increasingly taken on the look and feel of ESPN. That’s no accident. Sports and stocks hit similar parts of the brain. They’re both male-centered, data-heavy and they even have scoreboards. Trading is fun, that’s fine to admit, but it shouldn’t be treated as a circus.
    What CNBC needs to add is more thoughtful commentary on the markets. The network has already done this type of work with David Faber’s specials. Those are very good and they should bring more of the type of programming to they’re day-to-day schedule.

  • Newsweek on Paul Wilmott
    Posted by on June 6th, 2009 at 8:08 pm

    The new-and-improved Newsweek has an excellent article on quant guru Paul Wilmott.

  • Marcy Kaptur Pwns Bernanke
    Posted by on June 6th, 2009 at 2:30 pm

    Several months ago, a YouTube video made the rounds of Ron Paul questioning Ben Bernanke. The video was hailed as Paul putting Bernanke in his place. That’s not what I saw. Megan McArdle summed it up best: “I see a really, really smart economist responding to Ron Paul the same way you react to Cousin Mildred when she corners you after Christmas dinner to complain about the flouridation of the water supply.”
    That’s pretty much what I see in this video that’s currently making the rounds:

    Incidentally, Kaptur is the same person who didn’t even know who Bernanke was last year.

  • Morning Links
    Posted by on June 5th, 2009 at 10:01 am

    Here are a few items floating around the interblogs.
    Abnormal Returns has an excellent post called Being right is overrated. AB should do more writing. David Merkel has a reply.
    Justin Fox asks Are Stocks Still Good for the Long Run? My answer—they’re good enough.
    Government benefit checks accounted for one-sixth of personal income in the first quarter.
    Jim Cramer says Bernanke has saved us from the second Great Depression.
    The LA Times notes the return of the male prostitute. Sadly, no mention is made of Fred Garvin.

  • Job Market Sucks Somewhat Less than Expected
    Posted by on June 5th, 2009 at 9:40 am

    The jobs numbers are out today. Unemployment hit 9.4% last month and the nonfarm payrolls fell by 345,000 which was much less than the 525,000 loss Wall Street was expecting.
    image818.png
    The unemployment hasn’t been this high since August 1983. The rate is being reported as 9.4% but looking at the details, it’s 9.357% which rounds up.
    See how the last two bars on the NFP graph look like the beginning of a trend. That’s what the market has been so excited about.
    image819.png

  • Financials and Techs Divided by the S&P 500
    Posted by on June 4th, 2009 at 1:26 pm

    Here’s a look at the S&P Financial Sector Index (^SPSY) and Technology Sector Index (^SPLY) divided by the S&P 500 (^SPX). A rising line means that the industry group is outperforming; a falling line means it’s underperforming.
    image817.png

  • Happy 75th Birthday SEC
    Posted by on June 4th, 2009 at 11:50 am

    On June 6, 1934, FDR signed into law the Securities Exchange Act of 1934 which bright the Securities and Exchange Commission to Life. Roosevelt then appointed Joseph P. Kennedy to be its first head which caused some to think this was “setting a wolf to guard a flock of sheep.” (Incidentally, Georgetown hosts the poorly named Joseph P. and Rose F. Kennedy Institute of Ethics).
    This hasn’t been a good year for the SEC. Regulators continue their war against efficient markets. Last year’s shorting ban in financial stocks was a bust (financials underperformed the broader market). The SEC completely missed the Madoff scandal after being told what was happening. The agency’s own inspector general said they bungled the Pequot Capital thing (“raised serious questions about the impartiality and fairness”).
    It gets even worse. Check out this Dow wire story from earlier this week:

    The internal watchdog at the Securities and Exchange Commission revealed Monday his office is investigating several employees, including one top SEC official, after receiving complaints alleging they improperly disclosed non-public information.
    One pending investigation by SEC Inspector General H. David Kotz comes in response to an allegation that a top SEC official improperly disclosed non-public information to a large investment bank.
    In another case, Kotz reported that his office is investigating two enforcement attorneys for possibly disclosing non-public information from an internal SEC database to a corrupt FBI agent and short seller who was later convicted of fraud, racketeering and conspiracy.
    Then, in yet a third case, the inspector general said he’s looking into whether a former SEC attorney may have revealed confidential investigative information in a book he wrote. Kotz said the attorney may have provided the privileged information to a company where he worked as a lobbyist after leaving the SEC.
    Separately, his office is also trying to determine if non-public information may have been disclosed to a national news outlet.
    Kotz, who is leading the internal investigation into the agency’s failure to detect Bernard Madoff’s Ponzi scheme, disclosed some details about his pending investigations in his newly published semi-annual report to Congress on Monday.
    In it, he said he has 19 pending investigations, one of which is tied to the Madoff failings.

    Here’s to 75 more years!

  • Fantasy Football Lawsuit
    Posted by on June 4th, 2009 at 11:34 am

    The AP reports:

    Yahoo Inc. has sued the NFL Players Association, claiming it shouldn’t have to pay royalties to use players’ statistics, photos and other data in its popular online fantasy football game because the information is already publicly available.

    Let’s see if I have this right: A company is bringing a real lawsuit against a group of adult men who play a children’s game for their statistics which are used by other adult men who merely pretend they’re in charge of the first group of adult men while they play the children’s game.
    There are the parts of the New Economy I like best.

  • Odd Lots
    Posted by on June 4th, 2009 at 7:50 am

    Here are some assorted links I wanted to pass on:
    Why having the Penguins win the Stanley Cup is good for the stock market.
    Here’s an investment beating stocks and gold this year.
    Actual academic report: The economics of Dr. Seuss.
    Jeremy Siegel “virtually sure” it’s not going to be a long wait for a good return on stocks.
    The rally is being led by junk stocks.
    Ukraine’s economy drops 21% in Q1.
    Iceland central bank slashes rates to 12%. In other news, Iceland has a central bank?