The Big Picture |
- Greatest American Rock and Roll Band?
- Kedrosky: Six Trends Startups Must Cope With in 2013
- Bloomberg Billionaire Index
- IMF Austerity Mea Culpa?
- IMF: Coping with High Debt and Sluggish Growth
- Better than expected US December NFP data
- 10 Friday AM Reads
- Why Isn’t the 30 Fixed-Rate Mortgage at 2.6% ?
- Ferrari 275 GTB/4
- NFP: 20 Years of Net Job Creation
- Labor-Market Polarization Over the Business Cycle
| Greatest American Rock and Roll Band? Posted: 04 Jan 2013 03:00 PM PST This was originally published at essays & effluvia, an early non finance blog I was experimenting with back in December 2003. ~~~ Here’s an odd little conversation starter from the office this week: Who is/was the greatest American Rock ‘n Roll band? Before you answer, understand the masturbatory parameters of this debate:
The three qualifications for our list were: 1) Body of Work; 2) Influence; and 3) Live performance. My colleague had narrowed his list down to 3 bands: The Eagles, Van Halen and the Beach Boys. I mostly disagreed. My choices were: Creedence Clearwater Revival, The Doors, Steely Dan, Talking Heads and R.E.M. (And though they are not a choice of mine, I can also see how some people would put the Grateful Dead into the mix; The same thought applies to Nirvana, but even less so). Here are my choices, and then my colleagues (which I mostly challenged): My nominations for the Greatest American Rock and Roll Band are: Creedence Clearwater Revival: Consistently one of the most underated bands in U.S. musical history. Hugely influential, tremendous body of work. Where as most Beach Boy songs sound somewhat dated, CCR still sounds fresh and relevant today. Listen to the songs Fortunate Son, Green River or Run through the Jungle. Any of these could be credibly performed by many popular bands today (at least the ones that have chops).
The biggest issue with choosing CCR is that John Fogarty, their singer/songwriter/guitarist has such a substantial body of solo work, its sometimes hard to separate the two. Its also true that CCR was essentially Fogarty, so perhaps they only quasi-qualify as a Band. Upon reflection, I will admit that CCR is specific to a certain era, and while some may find they are somewhat dated — I think they still rock the house. ~~~ The Doors: You have to include The Doors in this list. They were a quintessential late 60′s/early 70′s band. Their first album makes all kinds of lists: Best albums of the ’60s, best debut album.
Their body of work was abbreviated due to Jim Morrison’s untimely death. Had they gone the distance, or even just another 5 years, they would have been a lock for the top slot. Despite their relatively short run, they still made the short list. But as matter of choice, I base my list on actual performance, not unrealized potential. So put The Doors into the top 5, and move on. ~~~ Steely Dan: Precise musicianship and song writing, effortlessly crossing boundaries into pop and jazz. An enormous body of work, known for its depth as well as breadth. One of the great things about Dan is that you can grab any CD of theirs, and play it straight thru. There ain’t much in the way of filler here.
Criticisms: Not the most raucous live bands you’ve ever seen. Too cerebral for some, while others find their work cold or distant. I think they’re great, but then again I like Dread Zeppelin, which some find unlistenable . . . ~~~ Talking Heads: Here’s where we start to get religious. You either ‘got’ and loved the T. Heads in the ’80s, or you didn’t, in which case you were probably a disco loving jerk — but lets not start with the name calling so soon, ok?
The Heads were enormously influential on so many bands that followed them. Their layered soundscapes of rythm and percussion still resonate today. Although their earlier work sounds very much tied to the early era of punk (when listened to today), and their latter stylizings are, well, very stylized. “Little Creatures,” which was a fun album when released, comes across a bit corny today. But their middle work reveals a powerful and innovative band: “Fear of Music” and “Remain in Light” are masterpieces; “Speaking In Tongues” still sounds great. The marvelously stripped down “Stop Making Sense” foreshadowed MTV unplugged by nearly a decade. I understand that the Heads were somewhat inaccessible; its rock and roll, but not what some people think of as pure rock (like CCR); if you think Steely Dan is cerebral, Eno and Byrne drove the Heads intellectually light years ahead of their time. Still, if you’re looking for collaborative American genius, this is it. ~~~ R.E.M.: I guess we saved the best for last. An incredibly rich and varied body of work. Groundbreaking; Revitalizing. Just as rock n roll was becoming irrelevant, R.E.M. snatched it back with avengeance. Beautifully constructed melodies and lyrics, driving guitars, a thoughtful presence throughout.
Murmur, Life’s Rich Pageant, Document and Reckoning are a murder’s row of releases. I can’t find much to dislike about this choice, except some of their lesser, later work; Also, not everyone appreciates the occasional mandolin. Some of the much later albums lack some of the original creative spark.
~~~ My colleague’s choices: The Eagles: A fairly inspired choice which I might have overlooked. Over the course of more than 20 years, they have produced a widely appreciated catalogue of music covering a broad swath of styles, from country to rock. They have also adapted well to a few key line up changes. Two strikes against them: First, I think of them as more influenced by other bands, rather than influencing others. One would hope that the greatest American Rock n Roll band was ‘inspirational.’
The other strike? I saw the Eagles live, and it was a yawner. Very boring to watch 5 motionless guys spread out across a stage. Hell, Tenacious D puts on a better show. If you can’t light it up live, than you simply cannot be named the “Greatest American Rock and Roll Band.” Period. ~~~ Van Halen: Now, here’s a band that certainly knows how to kick it live (“kick it with a tasty groove” as JB would say). They have an extensive catalogue, with many great songs.
Very little in the way of criticism of this choice, but here goes: Perhaps they are too well known for their covers, rather than their own work. Non hard core Van Halen fans know their versions of the Kinks “You Really Got Me” and Roy Orbison’s “(Oh) Pretty Woman.” That cuts both ways, and while it kinda takes some of the blush off the rose for some, I don’t have a problem with it; but I do understand the argument that we would prefer the greatest band in the land to be best known for their own body of work. I would certainly choose VH over, say Aerosmith, because of the body of work. But they don’t strike me as THE seminal USA rock n roll band. Random VH note: I saw them open for Black Sabbath in 1979, and they simply blew Ozzie and friends off the stage. Kick ass performance. ~~~ Beach Boys: There’s no doubt that the Beach Boys were very influential. “Pet Sounds” is widely credited with influencing the Beatles to do a concept album of their own: Sgt. Peppers.
However, they are so narrowly genre specific — “Surf Music” — that its hard to call them fully representative of American Rock ‘n Roll. You can try making the same argument about Van Halen, but “Hard Rock” is so much broader of a genre than the narrow field the Beach Boys tilled. An interesting choice, but does not make the final cut. Let’s just call them top five, and leave it at that. ~~~ Got an opinion on music? Agree or disagreee with these choices? Let me know by submitting a comment below — I’ll waive my usual requirement and even allow anonymous postings . . . Final thoughts: There are plenty of other bands one could include on this list, but most fail to make the final cut for a variety of reasons. CSNY were too narrow, Red Hot Chili Peppers, who have a large of body of work are also in the running. ~~~ While we are talking about Music, be sure to check out the industry commentary: Music Sales Rise on Aggressive Discounting, Price Competition and an Improving Economy ~~~ UPDATE: March 14, 2004 9:07am The Guardian’s approach doesn’t use our framework –they allow solo acts, which of course changes the entire dynamic. Regardless, its a good read. ~~~ UPDATE II: December 24, 2005 11:07am John Fogerty is back at Fantasy records, his old label. The new owners and Fogerty buried the hatchet, and he released “The Long Road Home: The Ultimate John Fogerty-Creedence Collection.” Now, you can see the full catalogue of both CCR and Fogerty. Only problem is, it makes CCR look like a Fogerty backing band! |
| Kedrosky: Six Trends Startups Must Cope With in 2013 Posted: 04 Jan 2013 12:27 PM PST Bloomberg Contributing Editor Paul Kedrosky discusses his predictions for technology startups. He speaks with Cory Johnson on Bloomberg Television’s “Bloomberg West.”
|
| Posted: 04 Jan 2013 12:00 PM PST |
| Posted: 04 Jan 2013 09:10 AM PST
A number of folks are looking at the latest IMF paper (here) as a startling admission of the failure of Austerity:
The math is quite simple: Simultaneously choke off government spending and raise taxes, and you crimp the economy reduce job creation and hurt tax revenues — creating an even bigger deficit. To fix a chronic deficit, you need to make the economy grow faster . . .
Source:
|
| IMF: Coping with High Debt and Sluggish Growth Posted: 04 Jan 2013 08:30 AM PST |
| Better than expected US December NFP data Posted: 04 Jan 2013 08:00 AM PST The Nikkei closed +2.8% higher today, following yesterday’s holiday. With the Yen declining materially, in particular against the US$, the Nikkei has been outperforming global markets over the last month and the trend looks set to continue, unless the BoJ does not play ball with Mr Abe's suggestion that they target an inflation rate of 2.0% at the next meeting on 22nd January; Average home prices in the 100 largest Chinese cities were up slightly in December Y/Y, the 7th monthly consecutive gain and the 1st Y/Y gain since March last year; HSBC China December services PMI came in at 51.7 M/M, lower than the 52.1 in November. Whilst lower, new business and employment were positive, which bodes well for the future; India's current account deficit rose to US$22.31bn in the quarter ended 30th September, the largest deficit since independence in 1949. The current a/c deficit soared to -5.4% of GDP, up from -3.9% in the previous quarter. The Rupee, certainly looks vulnerable; Indian December services PMI rose materially to 55.6, up from 52.1 in November, suggesting that the current account deficit for the quarter to 31st December will increase further; Italian December services PMI was still in contractionary territory, coming in at 45.6 M/M, though higher than the 44.6 in November and better than the 45.0 expected; The WSJ reports that the Spanish government has been forcing its Social Security Reserve Fund to buy government bonds. Apparently 95% of the funds assets have been invested in government bonds, up from just 55% in 2008. Furthermore, the Spanish government has been withdrawing cash to meet pension payments – E3bn and E4bn were withdrawn in September and November last year, respectively. The fund is apparently some E3bn in deficit – which given the Spanish authorities penchant for being "economical with the truth", suggests that it will prove to be far more than that. Spain continues to be a basket case and Mr "ditherer" Rajoy will have to ask for a bail out shortly – Spain needs to raise around E207bn this year, up from E186 in 2012 – some hope unless they ask for help. The prospects for Spain remain bleak; Spanish December services PMI came in at a contractionary 44.3 M/M, though up from 42.4 in November. However, it was the 18th consecutive month of contraction; German November (seasonally adjusted) preliminary real retail sales were up +1.2% M/M (-0.9% Y/Y), much stronger than the Reuters forecast of a gain of +0.8% M/M or -1.6% Y/Y. Recent polls indicate that 78% of Germans are more confident of the future – bodes well for domestic consumption. German final services PMI was fractionally lower at 52.0 M/M in December, lower than the 52.1 previously; French final December PMI fell to 45.2 M/M, lower than the flash reading of 46.0 and November's 45.8. Final December composite PMI rose to a 4 month high of 44.6 (still in contraction territory though), lower than the flash reading of 45.0, though higher than the 44.3 in November; EZ December final services PMI came in at 47.8 M/M (the highest in 5 months), unchanged from the flash reading, but higher than November's 46.7; EZ flash December CPI came in at +2.2% Y/Y, slightly higher than the +2.1% forecast. I do not believe that the ECB will cut interest rates imminently, but will do so in H1 this year and possibly even in late Q1; UK December services PMI came in at a disappointing 48.9 M/M, much lower than the Reuters forecast of 50.5 and the 50.2 reported in November. It was the lowest reading since April 2009. Sterling declined following the report, currently trading at US$1.6042. The data will revive fears of a recession, given the importance of the services sector to the UK economy. However, I continue to believe that the UK is performing better than the data would suggest; Irish unemployment came in at 14.6% in December, unchanged from November. December seasonally adjusted unemployment claims fell by 1.4k to 431k, though more importantly was the 6th consecutive monthly decline; The FED minutes released yesterday really did throw the cat amongst the pigeons. Essentially, members of the Federal Open Market Committee are split as to whether to keep buying assets through 2013. At present, the FED is buying US$85bn of MBS's and Treasuries per month. The minutes reveal that "several" FED members want "to slow down or to stop purchases well before the end of 2013". One member opposed further QE altogether. 10 year Treasury yields rocketed, rising to 1.94% at present. Whilst treasuries yields may decline on difficult negotiations in respect of the upcoming negotiations in Congress in respect of spending cuts and the need to raise the US debt ceiling, I would not be surprised if 10 year US treasury yields rise to above +2.50% this year. However, the FED is on hold in terms of its interest rate policy, which confirms that monetary policy will remain accommodative; US December NFP came in at +155k, marginally higher than the +152k expected and the upwardly revised +161k (+14k higher) in November. Private sector payrolls rose by +168k, higher than the +155k expected, as opposed to the upwardly revised +171k (up +21k) in November. The participation rate came in at 63.6%, unchanged from November. Average hourly earnings rose by +0.3% M/M (+2.1% Y/Y), higher than the +0.2% M/M and +1.7% Y/Y expected, possibly reflecting early payments to avoid expected tax increases starting in 2013. The average work week rose to 34.5 hours, marginally higher than the 34.4 expected and 34.4 in November. On balance a decent set of numbers; Outlook Asian markets closed mainly mixed, with the Nikkei up over +2.8%, with the Shanghai Composite up +0.2%, though Hong Kong is -0.3% lower. India was flat. Europe having opened lower is trading flat, with the FTSE higher, following the US NFP data. . The US$ responded positively to a potential slowdown/cessation by the FED of QE in H2 this year. It strengthened materially against the Euro declining to near US$1.30, though the Euro picked up following the release of the December NFP data and is currently trading at US$1.3055. The Yen is at 87.70 against the US$. The December NFP data is more positive US$ news, though the Euro is strengthening against the US$ – currently US$1.3056. Will look to start building up a short in due course. Gold is being crushed, with the precious metal trading at $1647. February Brent is also lower at US$111.24. Silver is even lower, losing over 4.0% today. I've had a great run in the base metal miners and inspite of being positive on China, decided to sell out of my positions, given the rise of the US$, which I expect will continue. Will revisit in due course. A steepening yield curve will, off course, be positive for financials. I will retain my holdings and, in due course, will increase. Kiron Sarkar |
| Posted: 04 Jan 2013 06:50 AM PST My morning reads:
What are you reading?
Investors Sour on Pro Stock Pickers |
| Why Isn’t the 30 Fixed-Rate Mortgage at 2.6% ? Posted: 04 Jan 2013 05:30 AM PST Why Isn't the Thirty-Year Fixed-Rate Mortgage at 2.6 Percent?
As of mid-December, the average thirty-year fixed-rate mortgage was near its historic low of about 3.3 percent, or half its level in August 2007 when financial turmoil began. However, yield declines in the mortgage-backed-securities (MBS) market, where bundles of mortgage loans are sold to investors, have been even more dramatic. In fact, all else equal, had these declines passed through to loan rates one-for-one, the average mortgage rate would now be around 2.6 percent. In this post, we summarize some of the findings from a workshopheld at the New York Fed in early December aimed at better understanding the drivers behind the increased wedge between mortgage loan and MBS rates. The chart below shows the recent evolution of the gap between the two rates (the "primary-secondary spread") as measured by the difference between a representative yield on newly issued agency MBS (the "current coupon," or secondary rate) and the average thirty-year fixed loan rate (the "primary rate") from the Freddie Mac Primary Mortgage Market Survey. The spread has increased 70 basis points, on net, from around 45 basis points in 2007 to about 115 today, implying that declines in the primary rate have been smaller than those in the secondary rate. So, why is the primary rate at 3.3 percent and not at 2.6 percent today?
As we noted in a white paper prepared as background material for the workshop, a number of factors may be at play. First, the primary-secondary spread is only an imperfect proxy for the degree of "pass-through" between the MBS market and the primary market. For one thing, we can't observe the MBS yield directly, but instead must compute it under a number of assumptions that are particularly sensitive to misspecification in the current environment. Also, the spread doesn't take into account the guarantee fees on loans charged by Fannie Mae or Freddie Mac (the agencies or "GSEs"), which have increased from 20 to 25 basis points before 2008 to about 50 basis points today. Rising Cost or Rising Profit? Recent movements in OPUCs, shown in the chart below, are similar to those in the primary-secondary spread. OPUCs have increased significantly, from below $2 (per $100 loan) in the 2005-08 period to a record high of about $5, suggesting that even after accounting for the higher guarantee fees, something unusual may be occurring in mortgage markets today.
Much of the discussion at the workshop, like the analysis in the paper, revolved around the question of why OPUCs have grown so substantially. First, OPUCs could be unusually high in order to compensate originators for increased put-back risk (the risk of having to repurchase some delinquent loans from the GSEs), possible increases in pipeline hedging costs, or other loan production expenses. They could also be overstated due to a decline in the value of mortgage servicing rights. While it's hard to measure each of these components, we tentatively concluded in the paper that these costs don't seem to have changed sufficiently to offset the increase in OPUCs, suggesting that profits in mortgage origination have likely increased. Workshop participants overall agreed with this analysis, but also countered that while each cost increase was small on its own, their sum was a sizable amount, offsetting part of the OPUC rise. In addition, some panelists pointed to more time-intensive underwriting procedures as contributing to higher origination costs. Overall, the discussion didn't refute the alternative explanation of higher profit levels. So what would drive such an increase in the profitability of mortgage origination? In the paper, we discuss how lenders' pricing power appears to have increased over the past couple of years, especially on refinancing loans. For example, we document how rates on refinancing loans, in particular those under the Home Affordable Refinance Program (HARP), have been higher than those on purchase loans, for which the market appears to be more competitive. We also note, however, that originators' capacity constraints are likely the key driver behind the currently elevated profit levels. The chart below plots the OPUC measure against the mortgage application volume index from the Mortgage Bankers Association. OPUCs tend to increase whenever application volume rises rapidly. As discussed at the workshop, a likely interpretation of this relationship is that in such times, lenders can't handle all the demand they would get if they lowered rates further, and thus they keep their offered rates high.
In principle, when profits are high, one would expect existing firms to expand capacity or new competitors to enter the market. But workshop participants pointed out that these channels may be impaired today because of the decline in third-party originations by mortgage brokers or correspondent lenders, uncertainty about how long the high origination volumes will last, lack of clarity about future regulations, more general fear of future liability risk, or difficulty hiring qualified underwriters. As a result, profit levels and the primary-secondary spread could stay higher than normal. What’s Next? ~~~ Disclaimer
David Lucca is an economist in the Research and Statistics Group. |
| Posted: 04 Jan 2013 05:00 AM PST Gorgeous car:
• 0-100mph in under Source: Classic Driver |
| NFP: 20 Years of Net Job Creation Posted: 04 Jan 2013 03:45 AM PST click for larger chart
On NFP day, I usually present you with my usual schtick as to why each month’s data point is much less important than is made out. Rather than repeat that yaddayaddayadda again this month, let’s look at the really long term 20 year chart above. A few things stand out:
Also worth noting: The Labor Force participation rate has now fallen back to 1985 levels — that is pre-tech boom, and before the bulge of FIRE hiring occurred. When today’s NFP is released, instead of having a kneejerk reaction to the preliminary soon-to-be=revised data, consider putting it into the context of the longer term, bigger picture.
BLS data released at 8:30am ~~~ Previously: |
| Labor-Market Polarization Over the Business Cycle Posted: 04 Jan 2013 03:00 AM PST |
| You are subscribed to email updates from The Big Picture To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 comments:
Post a Comment