The Big Picture

Tuesday Reading List
No end in sight to foreclosure quagmire
Please Take My Money for a 1% Return Back
Death Cab For Cutie’s “Home Is A Fire” Video
Who’s Paying for the Eurozone Bailout?
Citi’s Reverse Split
A Bit of Healthcare Chart Porn
Zombie Lie
Import prices continue to spike
Dates of Important Internet Launches

Posted: 10 May 2011 01:00 PM PDT

Some interesting reads for your reading pleasure:

• 'Prescient' economic indicator is bullish (Market Watch)
• Google’s stealth multi-billion-dollar business (CNN/Money)
• Fortune: How they failed to catch Madoff (Fortune)
• Rear-View Mirror Can’t Forecast 2011 Economy (Bloomberg)
• Paulson Plays the Lehman Bust (WSJ)
• Taco Bell and the Golden Age of Drive-Thru (BB Businessweek)
• Google to Unveil Service to Let Users Stream Their Music (NYT)
• Confessions of a Car Salesman (Popular Mechanics)
• The World’s 26 Best Cities for Business, Life, and Innovation (The Atlantic)
• How to steal like an artist (and 9 other things nobody told me) (Austin Kleon)

What are you reading?

No end in sight to foreclosure quagmire

Posted: 10 May 2011 12:17 PM PDT

Horrifying, shocking story of abuse and deception by banks regarding modifications:

The NBC News/MSNBC.com special report on the foreclosure crisis is now posted on the msnbc.com website.

The posting includes four Lisa Myers video reports.

Part I

Visit msnbc.com for breaking news, world news, and news about the economy

~~~

Part II

Visit msnbc.com for breaking news, world news, and news about the economy

~~~
Part III

Visit msnbc.com for breaking news, world news, and news about the economy

~~~
Part IV

Visit msnbc.com for breaking news, world news, and news about the economy

Please Take My Money for a 1% Return Back

Posted: 10 May 2011 11:49 AM PDT

The 3 yr note auction was good as the yield as about in line with the when issued but the bid to cover of 3.29 is the best since August and above the 12 month avg of 3.16. The US Treasury is certainly getting the gift of 1% financing costs for three years. Dealers also took the least amount since Jan thus leaving more in investor hands. This auction will be followed by the important 10 yr tomorrow and 30 yr on Thursday and as we all know, every day that goes by is one day closer to the end of Fed buying. Treasuries have certainly traded great of late and its due to concerns with economic growth as we close the chapter on QE2 and a large crutch gets taken away that was so supportive mostly to asset prices beginning in late August.

Death Cab For Cutie’s “Home Is A Fire” Video

Posted: 10 May 2011 11:35 AM PDT

Boing Boing premiered of Death Cab For Cutie’s “Home Is A Fire” music video, by artist Shepard Fairey and Death Cab bassist Nicholas Harmer. The song is from Death Cab for Cutie’s exquisite new album, Codes And Keys, available May 31, 2011 on Atlantic Records. Below, Shepard and Nick share their inspiration and thoughts on this perfect collaboration.

~~~

Who’s Paying for the Eurozone Bailout?

Posted: 10 May 2011 11:30 AM PDT

Informative chart from The Economist, looking at exactly where funding is coming from for the various PIIGs bailouts.

The total €865 billion ($1.2 trillion) pot available for euro-area rescues is rather enormous. (Whether it will be sufficient to cope with Greece, Ireland and Portugal's needs is yet to be determined).

The sources of all that cash include the European Financial Stability Facility, (€440 billion) primarily funded by Germany, France and Italy. The IMF can kick in up to €280 billion. America has also suggested she will lend €50 billion.>

Citi’s Reverse Split

Posted: 10 May 2011 10:00 AM PDT

Thoughts on Citi's Reverse Split:

• The Wall Street Journal – Citigroup Instantly Becomes a $40 Stock

Citigroup, the heaviest-traded U.S. stock that accounted for 6.8% of total U.S. stock trading volume last year, drastically shrunk its share count. The move instantly erased its single-digit stock price, which has been a persistent reminder of the trauma the bank suffered during the financial crisis. Through a reverse split, Citigroup was able to ax a huge number of shares outstanding by turning every 10 shares into a single share. Instead of trading for less than $5 a share, where Citigroup has languished despite improvements in profits and capital, the New York financial behemoth instantly became a $40 stock. Shares of the bank fell $1.04, or 2.3%, to $44.16…Broader studies also show a mixed record for reverse splits. James Rosenfeld, an associate professor of finance at Emory University's business school in Atlanta, said he and April Klein of New York University's business school had tracked the performance of 1,600 companies that did reverse stock splits over a three- year period. They underperformed the returns of comparable companies by 50 percentage points.

• MarketBeat (WSJ Blog) – Don't Blame Citigroup (Entirely) For Your Weak Volume Insecurities

With trading done for the day, it's time to take a look at Citigroup's much-vaunted one-for-10 reverse stock split. Did trading volumes shrivel up and die with the much-diluted presence of one of America's highest-profile corporations — one that combines brand-name recognition with oceans of liquidity and one of the most bargain-basement-cheap price tags on the Street? The answer: Not really. Just to sum up, total NYSE composite volume today rolled in at just 3.03 billion shares — making it the second-slowest day so far in 2011, and well below this year's daily average of 4.33 billion shares. The obvious blame for this goes to Citigroup, which after its decupling exercise is now only contributing tens of millions to NYSE composite volume, rather than the hundreds of millions it used to contribute in those halcyon pre-reverse-split days.

Comment:

The first story above points out that Citi accounted for 6.5% of NYSE composite volume last year. As we pointed out on April 6, the stock's reverse split would depress composite volume. Our chart below shows yesterday's volume (last red bar) was the lowest non-holiday volume since October 29, 2007. If the technicians were worried about the bearish implications of a rally with declining volume, this will only grow larger considering Citi's reverse split.

FYI – Our data, calculated by Bloomberg (MVOLNU <index>), shows NYSE composite volume was 2.93 billion yesterday. The story above says NYSE composite volume was 3.03 billion shares. We are not sure what data source they used which might lead to this slight discrepancy.

Click on chart for larger image

A Bit of Healthcare Chart Porn

Posted: 10 May 2011 08:30 AM PDT

I’ve been tinkering with Google’s Fusion Tables (which are very cool and no relation to our host’s biz), and wondering how best to introduce a chart or two to TBP. BR’s recent post on healthcare gave me the perfect opening.

So, herewith, the first of what I hope will be many Fusion Tables to come (hover over countries for data).

First up, worldwide density of doctors per 10,000 population (these are doctors only; dentists, nurses, and other healthcare professionals are tallied separately). To spare you the trouble of searching, Cuba is #1 at 64, and Greece is #2 at 54; many countries are at one or less.

Source: WHO

Next up, total healthcare expenditures as a percent of GDP. There are additional aspects of this to explore (private expenditures, government expenditures, etc.), but I’ll leave that for another time in the interest of getting the overall picture out.

Source: WHO

You’ll probably not find #1 on the graphic above (at 17.9%), which is the only country ahead of the United States (at 16%). It is Niue, a speck of an island in the South Pacific (east of Fiji) no larger than a pixel or two on your screen.

I love being able to visualize the data via Fusion Tables. The Tables themselves still seem to be a work-in-progress (still in Beta), and there are many improvements I hope Google makes, but its ability to import Excel data and manipulate is great. Which leads to this question: What would folks be interested in seeing via the Fusion Tables — suggestions should be either worldwide (rankings by nation) or specific to the United States (state-by-state). Of course, the data must be readily available and from reputable sources. Throw it in comments and I’ll see what I can do — if there’s one thing this crowd is long it’s imagination.

Zombie Lie

Posted: 10 May 2011 07:30 AM PDT

zombie lie

n. A false statement that keeps getting repeated no matter how often it has been refuted.

-Wordspy

~~~

Example Citations:

Most of the biosphere cannot see the infosphere; it is invisible, a parallel universe humming with ghostly inhabitants. But they are not ghosts to us—not anymore. We humans, alone among the earth’s organic creatures, live in both worlds at once. It is as though, having long coexisted with the unseen, we have begun to develop the needed extrasensory perception. We are aware of the many species of information. We name their types sardonically, as though to reassure ourselves that we understand: urban myths and zombie lies.
—James Gleick, “What Defines a Meme?,” Smithsonian magazine, May 1, 2011

~~~

On Social Security, Simpson is repeating a zombie lie — that is, one of those misstatements that keeps being debunked, but keeps coming back.

—Paul Krugman, “Zombies Have Already Killed The Deficit Commission,” The New York Times, June 21, 2010

This is an interesting Word Spy observation of a new grammatical idiom — a falsehood that will not go away.

I guess Zombie Economics is a broad based application of Zombie Lies. See Supply Side is a perfect example of this.

Import prices continue to spike

Posted: 10 May 2011 07:13 AM PDT

Thanks to the weak US$, rising commodity prices and growing wage inflation in China, April import prices rose 2.2% m/o/m and are now up 11.1% y/o/y vs expectations of 1.8% and 10.4% respectively. It’s not just food and energy too as ex that prices were up .5% m/o/m led by a 5% rise in the cost of imported industrial supplies. Import prices from China rose .4% after a .6% gain in March and is up 2.8% y/o/y as the days of importing deflation from China is over. This data highlights clearly the inflationary implications of a weak US$ when we have a trade deficit as large as ours. The weak US$ certainly helps the export side in terms of competitiveness and revenues but we import a lot more than we export at an ever growing cost.

Dates of Important Internet Launches

Posted: 10 May 2011 06:37 AM PDT