The Big Picture

Succinct Summations of Week’s Events 8.29.14
Conservatives Discover America’s Infrastructure Problems
10 Friday AM Reads
About David Tice’s 60% Crash Call . . .
Jaguar F-Type R Coupe

Succinct Summations of Week’s Events 8.29.14

Posted: 29 Aug 2014 12:00 PM PDT

Succinct Summations week ending August 29th

Positives:

1. S&P 500 crossed 2,000 for the first time ever and took just 94 days to climb from 1,900 to 2k.
2. Pending home sales rose 3% m/o/m vs expectations of a 0.5% rise.
3. 2Q GDP rose 4.2% annualized vs expectations of a 4% rise.
4. Durable goods surged 22.6% the biggest increase and highest level since 1992 (due to an expected big increase in aircraft orders
5. Consumer confidence rose to 92.4, the highest level since October 2007.
6. Richmond manufacturing index came in at 12, the highest level since March 2011.
7. June durable goods were revised up to 2.7% from a previous reading of 0.7%.
8. Markit's flash service sector activity came in at 58.5 v 58 expected.
9. Initial jobless claims fell by 1,000. The 4-week average is down 1,250 to 299,750.
10. Chicago PMI came in at 64.3 vs 56.5 expected.

Negatives:

1. New single-family home sales fell 2.4%, the slowest pace in four months.
2. Case-Shiller home prices fell 0.2%, the second straight month of declines.
3. New home sales came in at SAAR of 412k v the 430k expected.
4. Durable goods ex-transportation fell 0.8%
5. July personal income rose 0.2% vs expectations of a 0.3% rise.
6. Personal spending fell 0.1% vs expectations of a 0.2% rise.

Thanks, Batman!

Conservatives Discover America’s Infrastructure Problems

Posted: 29 Aug 2014 07:30 AM PDT

Last night, I made a rare airport run. Our niece from Chicago is visiting for the long weekend, and rather than send a car, we fought through both U.S. Open and Mets traffic to pick her up at LaGuardia Airport.

Regular readers know my views of U.S. airports in general and LaGuardia in particular. Despite the occasional spectacular views, it is on my list of worst U.S. airports, second only to John F. Kennedy International Airport.

It’s as if we forgot what routine government spending was supposed to accomplish.

In general, American air travel is terribly annoying. Anytime someone we know comes thorough either airport, the conversation invariably touches on the sad state of U.S. infrastructure. Vice President Joe Biden compared LaGuardia to a third-world country. There are improvements coming, but it has been ever-so slow.

It's a tired but true litany: crumbling bridges and roads; how little the U.S. spends on infrastructure compared with other industrialized nations; the list of states’ unmet infrastructure needs; the opportunity to make needed long-term repairs and improvements while financing costs are so cheap.

Continues here

10 Friday AM Reads

Posted: 29 Aug 2014 06:30 AM PDT

Your three (or is it four?) day weekend is almost here! Don’t get bored on the beach, some expertly selected reads will keep your mind active while you tan:

• In Pursuit of Past Performance (A Wealth of Common Sense)
• Calling Gordon Gekko: This Is Japan (Bloomberg View)
• Alaska Is a Petrol State, but it doesn't act like one.(Slate)
• Daniel McFadden: Understanding better how people really make choices (Lindau Nobel Laureate Meetings) see also Does It Help to Know History? (The New Yorker)

Continues here

About David Tice’s 60% Crash Call . . .

Posted: 29 Aug 2014 04:00 AM PDT

Earlier this week, Prudent Bear fund founder David Tice warned of an imminent crash — as bad as 30-60% down on the S&P500.

One small thing: This is pretty much the same call that Tice made in 2010 and 2012. Apparently, if you make the same crash call every 2 years, most of the media and viewers will have forgotten the prior crash forecast.

Only Google never forgets. In 2010, Tice warned that the Secular Bear Market will not end until we get back to book value or below (Federated’s David Tice Is Not A Fan Of Fed-Manufactured, Free Money Driven, Bear Market Bounces, Sees “Huge” Potential For Decline 03/19/2010).

He repeated that crash call in 2012, predicting “Gold Will Surge To $2,500 And The S&P 500 Will Plunge To 1,000.” Meanwhile, the market rallied to 2000, a 100% gain versus the forecast.

Regular readers know that I believe forecasts are folly.

Perhaps all these crash predictions that did not come to pass while the market tripled in value is why my colleague Michael Batnick notes that The Prudent Bear fund has trailed the S&P500 by 400,000 basis points since 1996.

400,000 basis points!

The truth of markets is that all cycles end. The current bull market will one day end just as well. I advise people that between now and the day this bull cycle reaches its denouement, be careful as to who’s bull you choose to listen to.

Jaguar F-Type R Coupe

Posted: 29 Aug 2014 03:00 AM PDT

From the Wall Street Journal:

Base price: $99,000

Price, as tested: $104,975

Powertrain: Front-mounted supercharged 5.0-liter, DOHC 32-valve, direct-injection V8 with variable cam phasing and active exhaust; eight-speed automatic transmission; rear-wheel drive with electronic limited-slip differential.

Horsepower/torque: 550 hp at 6,500 rpm/502 pound-feet at 2,500-5,500 rpm

Length/weight: 176.0 inches/3,638 pounds

Wheelbase: 103.2 inches

0-60 mph: <4 seconds

EPA fuel economy: 16/23/18 mpg, city/highway/combined

Cargo capacity: 11 cubic feet