The Big Picture

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• I agree with Michele Bachmann
• Superfail? DC Fiscal Clown Show May Still Yield Results
• 10 Monday PM Reads
• The Insanely Great History of Apple
• 9 Things You Didn’t Know About Amazon
• October Existing Home Sales Conclusion Result Is Wildly Misleading
• XKCD: Money!
• No debt deal? Treasury market doesn’t care
• US/Eurozone GDP Component Comparisons
• Dissecting the Big Lie (Update)

I agree with Michele Bachmann Posted: 21 Nov 2011 04:30 PM PST Well, at least about this one thing: She and I are quite sympatico — at least when it comes to criticizing the Bush troika (Bush/Paulson/Bernanke) for the absurd bailouts of failed banks: “The Bush administration … was embracing a kind of ‘bailout socialism,’ ” wrote the Minnesota congresswoman, who is running for the GOP presidential nomination. “It was painful to find out John McCain too favored the TARP bailout. … Here was no 'maverick' moment. The same disappointing stance was taken by the Republican leadership in the House.” “I knew there was no way I could vote for it, because I couldn't find authority for it in the Constitution," Bachmann continued. "As a constitutional conservative, I put principle over party.” Source: Michele Bachmann says Bush, GOP embraced ‘bailout socialism Seema Mehta Los Angeles Times November 20, 2011 http://www.latimes.com/news/politics/la-pn-bachmann-book-20111120,0,2416841.story

Superfail? DC Fiscal Clown Show May Still Yield Results Posted: 21 Nov 2011 03:00 PM PST Source: Yahoo Finance

10 Monday PM Reads Posted: 21 Nov 2011 01:30 PM PST Here’s my afternoon train reading: • Michele Bachmann says Bush, GOP embraced ‘bailout socialism’ (LA Times) • Can China Defeat America? (NYT) • Foreign Banks Double Deposits at Fed (Bloomberg) • Repeating history (NY Post) • U.S. Billionaires Avoid Reporting Cash to IRS (Bloomberg) • Krugman: Dangerous Romanticism of Dubious Economic analysis (NYT) • An Edge in Science Among the Foreign-Born (Economix) • Volcker & Ravitch, Senior Advisers: Two Old Friends Talk Fishing and Finance (WSJ) • The most important living psychologist? (The Psychologist) see also Report: 1 in 5 of US adults on behavioral meds (Yahoo) • How I ended up leaving Poynter (Jim Romenesko) What are you reading?

The Insanely Great History of Apple Posted: 21 Nov 2011 12:30 PM PST Click for ginormous chart: Source: The Insanely Great History of Apple Visual.ly, November 16, 2011

9 Things You Didn’t Know About Amazon Posted: 21 Nov 2011 11:30 AM PST Source: Frugaldad.com

October Existing Home Sales Conclusion Result Is Wildly Misleading Posted: 21 Nov 2011 11:15 AM PST [click to expand] It's been nearly a year since I got enough energy to talk about a National Association of Realtors Existing Home Sales release. While their editorial side of the association is very good, the research side continues to issue information that simply misleads their agents and the public. Here's the release: Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 1.4 percent to a seasonally adjusted annual rate of 4.97 million in October from a downwardly revised 4.90 million in September, and are 13.5 percent above the 4.38 million unit level in October 2010. To those in the real estate trenches, this is confusing. Perhaps it is some sort of skeptical breath of fresh air in a cauldron of bad economic news? The media is confused using the word "unexpected" a lot and agents are confused because this is NOT what is happening on the ground. Doesn't it seem odd that the rate of contract failures nearly doubled, yet sales increased? Not logical. A higher rate of contract failures has held back a sales recovery. Contract failures2 reported by NAR members jumped to 33 percent in October from 18 percent in September, and were only 8 percent a year ago, so we should be seeing stronger sales," Yun added. The reason for all this gobblygook? NAR Research continues to over emphasize "seasonally adjusted" (methodology is not disclosed) results in a market that has been subjected to unprecedented external influences such as tax credits and downwardly managed mortgage rates. No seasonal adjustments [black line] In the above chart, the orange glow overlay on the black line reflects non-adjusted sales activity annualized from August to October over the past 3 years. The latest segment shows a sharp decline in sales relative to the prior 2 years. That is what real estate professionals and consumers are generally feeling since that is what is actually happening across the country. Seasonal adjustments [red line] The seasonally adjusted red line has been slowly eroding in 2011 and a headline saying "October Existing-Home Sales Rise, Unsold Inventory Continues to Decline" is completely out of context. Inventory is declining because it always declines in the last several months of the year. Contrary to the institutional culture baked-in over at NAR Research, this simply creates more mistrust from the membership and consumers – and more importantly, it does not help agents sell more properties, the key reason for the existence of this trade group. Please stop. (Originally published at Matrix) ~~~ BR adds: Have a look at my favorite RE chart, the Existing Home Sales, NSA (nonseasonally adjusted), via Calculated Risk. October 2011 EHS is an improvement over 2010, but worse than 2009 and 08… > click for larger graphic

XKCD: Money! Posted: 21 Nov 2011 11:07 AM PST click for insanely ginormous graphic of mindblowing detail and proportions XKCD

No debt deal? Treasury market doesn’t care Posted: 21 Nov 2011 10:15 AM PST No debt deal in Washington, DC, who cares, give me my 2 yr US Treasury notes backed by the full faith and credit of the US government! Today’s bid to cover of 4.07 for $35b of notes was the highest seen since at least 1992 that I see records on. That is also well above the 12 month average of 3.39. Direct and indirect bidders took the most since Oct ’10. Flight to cash equivalents is of course the main driver, particularly with the European interbank lending markets getting more and more expensive by the day and the economic fallout that follows. With no change in the spending trajectories of the long term drivers of US debt, that being medicare, medicaid and social security, markets will eventually get to us but for now, the focus remains Europe.

US/Eurozone GDP Component Comparisons Posted: 21 Nov 2011 09:00 AM PST ISI notes the differences between the US and EuroZone in terms of GDP components: • Housing in the US at just 2% GDP has already collapsed; housing in the Eurozone at 5% has substantial downside risk. • Capex in the Eurozone at 14% has downside risk. • Eurozone consumer already is a significantly smaller share of GDP than US. • Exports & imports = 24% in Eurozone is much more exposed to global slowdown and currency changes. > here is the chart comparing the two regions:

Dissecting the Big Lie (Update) Posted: 21 Nov 2011 07:30 AM PST This weekend, the Washington Post published the follow up piece to the Nov 5th Big Lie column. I supplemented that with a run of charts to illustrate the facts I cited. The pushback continues from the usual sources. We can group folks repeating the faux arguments into 3 distinct categories. Some of these reveal disturbing trends: 1) The Cognitive Dissidents (my term for a those politically dissenting from reality); their brains simply will not allow them to see what disagrees with their ideology. This is a very real and unfortunate part of human nature; 2) The Political Manipulators, who cynically know what they peddle is nonsense, but nonetheless push the stuff because it is effective. These folks are more committed to their ideology than the good of the nation, and as such earn my disdain. 3) The Innumerates, the people who truly disrespect a legitimate process of looking at the data and making intelligent assessments. These innumerates — mathematical illiterates — seem to revel in their own ignorance; it si embarrassing. The denying of reality has been an issue, from Galileo to Columbus to modern times. Reality always triumphs eventually, but there are very real costs to it occurring later versus sooner . . . > Still popular in WaPo Business Section!

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