The Big Picture

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• “Torture didn’t provide useful, meaningful, trustworthy information”
• Late Week Reads
• What will bring a rate hike or QE3
• Behind The Sounds: Wouldn’t It Be Nice Behind The Sounds: Wouldn’t It Be Nice
• A Very Brief History of iPad
• Dr. Copper Falls Through the Ice
• Is The Market Rigged? Survey Says … ‘Yes!’
• Media Appearance: Bloomberg Surveillance Midday
• Downside Limited by Transports
• 2011 Investment Company Fact Book

“Torture didn’t provide useful, meaningful, trustworthy information” Posted: 05 May 2011 05:00 PM PDT Today’s quote of the day is my attempt to thwart a wrongheaded meme. It is terror variant of the CRA argument. Did torture help find OBL? From the CIA: "Torture [at the Guantanamo Bay detention camp] didn't provide useful, meaningful, trustworthy information. Everyone [at the CIA] was deeply concerned and most felt it was un-American and did not work." -Glenn L. Carle, a retired C.I.A. officer who oversaw the interrogation of a high-level detainee in 2002 What about a torture derived smoking gun? From the NSA: "The bottom line is this: If we had some kind of smoking-gun intelligence from waterboarding in 2003, we would have taken out Osama bin Laden in 2003. It took years of collection and analysis from many different sources to develop the case that enabled us to identify this compound, and reach a judgment that Bin Laden was likely to be living there." -Tommy Vietor, spokesman for the National Security Council. Are you telling me that waterboarding someone 5 or 10 times is not going to get any good info out of them? Khalid Shaikh Mohammed was waterboarded 183 times — repeatedly misled interrogators about the courier's identity. Why does getting this right matter? Why is it so important to deal with reality and not some ideology not based on real information, data, and human behavior? Creating a false premise as to a cause or major factor in a societal event ultimately leads to the wrong policy decisions being made on the basis of bad information. Thinking that torture is wrong is not a liberal or conservative value — it is an American value.

Late Week Reads Posted: 05 May 2011 01:30 PM PDT Lots of good stuff to fill your brain pan with: • Goldman lobbying hard to weaken Volcker rule (Baltimore Sun) • Jim Rogers: Commodities to outperform equities (Economic Times) • World’s Millionaire Ranks Seen Soaring Through 2020 (Reuters) • Kenneth Rogoff: Bernanke Meets the Press (Project Syndicate) • Top Five Reasons that MBS Lawsuits Are Just Beginning (Subprime Shakeout) • Apocalypse: What Disasters Reveal (Boston Review) • Surveillance, Not Waterboarding, Led to bin Laden (Danger Room) • Human Cartography: Maps That Define the Mind (The Atlantic) • In baseball, ‘dead money’ lives on to haunt teams that continue to pay players no longer on their rosters; ‘Sunk costs,’ are a key part of game’s economics. (LA Times) • 5 Guides to Life from Cultural Luminaries (Brain Pickings) What are you reading?

What will bring a rate hike or QE3 Posted: 05 May 2011 12:51 PM PDT Fed voting member Kocherlakota in a speech is covering all his bases in terms of his thoughts on where future policy will go if it were up to him. IF core inflation reaches his estimate of 1.5%, he will vote for interest rate hikes. IF core inflation “were to fall over the course of ’11 relative to ’10, then it would be desirable for the FOMC to ease further in response to that decline. I imagine that easing would take place through the purchase of more long term government securities.” Because on inflation he expects the former to be a much more likely outcome than the latter, he thinks it “would be appropriate for the FOMC to raise the fed funds target interest rate by a modest amount at the end of 2011.” He also says “my baseline forecast about inflation was wrong last year, and could well be again this year.” Bottom line, rates may go up by year end or they may not with now inflation the deciding factor according to one member’s opinion. And to the point of whether we’ll see QE3 or not, Kocherlakota tells us what will be the deciding factor for him.

Behind The Sounds: Wouldn’t It Be Nice Behind The Sounds: Wouldn’t It Be Nice Posted: 05 May 2011 12:30 PM PDT A video detailing the creative process behind “Wouldn’t It Be Nice” from The Beach Boys’ 1966 Album “Pet Sounds”. via Open Culture

A Very Brief History of iPad Posted: 05 May 2011 12:00 PM PDT > click for larger graphic > Discountcoder via Web Design Core

Dr. Copper Falls Through the Ice Posted: 05 May 2011 11:43 AM PDT Chart of the Day: Dr. Copper broke through its support at 4.10 and is below 4.00 for the first time since early December.   Lots of flakes in this chart as head and shoulder patterns are ubiquitous.   Copper is a very crowded trade and some big players have bet the ranch.  Unless we get an intraday reversal in the Doctor, it looks like the next stop is 3.60.  Maybe it's time to start channeling our inner Jim Chanos or rather our margin clerk? (click here if chart is not observable) >

Is The Market Rigged? Survey Says … ‘Yes!’ Posted: 05 May 2011 10:00 AM PDT ~~~ Source: Is The Market Rigged? Survey Says … 'Yes!' Peter Gorenstein Daily Ticker, April 4, 2011 http://finance.yahoo.com/blogs/daily-ticker/market-rigged-survey-says-yes-130546433.html

Media Appearance: Bloomberg Surveillance Midday Posted: 05 May 2011 08:55 AM PDT > I am off to go chat with Bloomberg's Tom Keene at 12:o0 — watch it live on BBTV or stream it on the web.

Downside Limited by Transports Posted: 05 May 2011 08:15 AM PDT Yesterday, I created a list of “Things To Be Concerned About Regarding This Market.” I discussed those concerns yesterday (here). Call it Anti-Confirmation Bias: Its something I like to do when we are fully invested (about 86% long). That list of ten items didn’t even include problems in Europe, US Housing, or other well know issues. So far, the market downside has been limited. Even if you overlook this resiliency, it is hard to get too bearish when the Transports look like this: > Dow Jones Transports (Daily) click for ginormous graphs > Dow Jones Transports (Weekly) > Of course, the Trannies could roll over tomorrow — and that would change out investment posture. But for now, as long as they remain within spitting distance of all time highs, its a tough market to be short in . . .

2011 Investment Company Fact Book Posted: 05 May 2011 07:04 AM PDT Awesome collection of data, chart porn, and other goodies related to the Mutual Fund, ETFs and Closed End fund industry from ICI: 2011 Investment Company Fact Book. Yes, it is an industry publication, but they have been cranking these out for half a century — this is the 51st edition — and they seem quite legit. They are not like other gorups I could name but won’t (rhymes with Shmealtors). > Source: ICI

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