The Big Picture

BLS and Sequester
Discuss: USA Infrastructure Dead Last In Trains and Roads
10 Thursday PM Reads
The Corporate States of America
Housing Recovery Elusive for U.S. Homebuilders
10 Thursday AM Reads
Why I Write: Barry Ritholtz
Seinfeld On Stern

Posted: 28 Jun 2013 02:00 AM PDT

BLS and Sequester
David R. Kotok
June 27, 2013

On March 1, 2013, President Obama ordered into effect the across-the-board spending cuts (commonly referred to as sequestration) required by the Balanced Budget and Emergency Deficit Control Act, as amended. Under the order, the Bureau of Labor Statistics (BLS) must cut its current budget by more than $30 million, 5 percent of the current 2013 appropriation, by September 30, 2013. In order to help achieve these savings and protect core programs, the BLS will eliminate two programs, including Mass Layoff Statistics, and all “measuring green jobs” products. This news release is the final publication of monthly mass layoff survey data.
– Source: press release of Bureau of Labor Statistics, June 21, 2013

The above is an official admission of yet another impact of the sequester: we are going to see a diminishing degree of reliability in our statistics. We thank Talley Leger for his note on this.

In addition, there is an attack being mounted against funding the statistical agencies. Eleven Republican congressmen have cosponsored a bill to eliminate the counting of nearly everything but the required census.

Now imagine a world where there are no independent or impartial statistical agencies. And imagine a world where there is no clear method of collecting data, transparently presented, so that policy can be debated based on reliable information.

Imagine a world where we do not know the unemployment rate. Or where we do not follow data that all of us currently rely upon in our everyday lives. As it is, data may have errors and may need corrections and revisions, but it serves a purpose, and that purpose impacts the lives of 350 million people who live and work and play and grow while they reside in our nation.

Here is a single example of a critical function that is carried on in our government every day. Whether we measure employment or practice landing on aircraft carriers, our nation is being set back by this ongoing budget sequester.

Just because we do not see every impact that sequester deals us in our daily lives, doesn't mean we are not being hurt.

Happy pre-July 4th weekend

~~~
David R. Kotok, Chairman and Chief Investment Officer

Discuss: USA Infrastructure Dead Last In Trains and Roads

Posted: 27 Jun 2013 04:30 PM PDT

USA! USA!

Source: Spiegel

10 Thursday PM Reads

Posted: 27 Jun 2013 01:30 PM PDT

My afternoon train reads:

• Baum: Grow up, people. It's time to stop blaming Bernanke for your losses. (Bloomberg)
• Deception by Derivative (NYT)
• U.S. Bond Funds Have Record $61.7 Billion in Redemptions (Bloomberg) see also Bond Selloff Creates Fits for the ‘King’ (WSJ)
• Is the U.S. Turning Into a Nation of Temps? Depends on Where You Live (Atlantic Cities)
• Ailing Infrastructure: Scrimping Threatens Germany’s Future (Spiegel)
• You Listen to This Man Every Day (Daily Beast)
• Sepp Blatter has kicked off Fifa’s Arab Spring in Brazil (theguardian)
• 7 Reasons I Dumped Facebook (Yahoo News)
• How to #Unplug in 6 Steps (Fast Company)
• The Era of Cognitive Computing (Irving Wladawsky-Berger)

What are you reading?

Source: Economist

The Corporate States of America

Posted: 27 Jun 2013 11:30 AM PDT

Click to enlarge

Source: Tumblr

Housing Recovery Elusive for U.S. Homebuilders

Posted: 27 Jun 2013 09:00 AM PDT

Click to enlarge

Source: Bloomberg

Interesting chart form Dave Wilson showing how elusive the U.S. housing market's rebound has been for the Homebuilders.

Existing single-family homes sold at about the same pace in May as they did in January 2000, according to data compiled by the National Association of Realtors. New home sales are running a full 45% lower. One new home was sold last month for every 9.7 resales.

Bill McBride of Calculated Risk observed: "Builders weren't able to compete with the low prices of all the foreclosed properties."

Source:
Housing Recovery Elusive for U.S. Homebuilders
David Wilson
Bloomberg, June 26, 2013

A few comments on House Prices and New Home Sales
Bill McBride
Calculated Risk, 6/25/2013 http://www.calculatedriskblog.com/2013/06/a-few-comments-on-house-prices-and-new.html

10 Thursday AM Reads

Posted: 27 Jun 2013 07:00 AM PDT

My morning reads:

• Quarter-End: Who What When Where Why How (Scott Skyrm)
• Central Banks: Powerful or Powerless? Make Up Your Mind. (Fatas and Mihov) see also Risk of 1937 relapse as Fed gives up fight against deflation (Telegraph)
• The Japanese public’s ingrained distrust of investor capitalism (Observing Japan)
• Ratings Ratio Worst Since 2009 as Profits Slow (Bloomberg)
• CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners (Economic Policy Institute) see also Labor's Declining Share Is an International Problem (Economix)
• The IRS scandal unwinds (Columbia Journalism Review)
• Commodities traders call end of 'supercycle' (FT.com) see also Gold Climbs in New York Trading as Investors Await U.S. Reports (Bloomberg)
• Rates and the US housing market (FT Alphaville)
• What an iPod tells us about the competitiveness revolution (World Economic Forum) see also iOS 7: Catch me if you can (Allen Pike)
• Edward Snowden and the Privatization of National Security (Yahoo Finance)

What are you reading?

Crude Oil and Gasoline Inventories Both Rise More Than Expected

Source: Bespoke

Why I Write: Barry Ritholtz

Posted: 27 Jun 2013 04:15 AM PDT

I did a longish, NSFW, no holds barred interview with Marco Nappolini and the folks at Pieria. The concept of the series was “to shed light on the motivations, inspirations and writing processes of some of the leading financial bloggers.”

I suspect I gave them more than they were looking for.

Here is an excerpt:

M.N: There's a great quote on your press reviews page from Dealbreaker that says: 'Barry Ritholtz takes down financial writers like it's his job'.

Now if the role of the mainstream media is to hold power to account, could you say that it's the role of the blogosphere to act as a check on the mainstream media?

B.R: Well that died a long time ago – the media as a balance to power – but let me give you the arc of that, because there's a development within that arc, that I think is interesting.

When you first start blogging, you have this platform and no one is paying attention. You become completely outraged with some of the of things that you see and read and it's not just that the media or corporate press is outright corrupt, its more that their business model is so awful.

A perfect example is economic coverage: They'll throw some kid onto the economic beat who graduated from a liberal arts college last year, or has a degree in media or journalism but not mathematics. This poor bastard is suddenly forced to cover economic data even though they just don't have the chops for it, they don't have the tools. So what happens is they actually believe some of the bullshit that gets fed to them – how important NFP is (its not) silly survey projections about Xmas shopping (wildly wrong every year), National Association of Realtors reports (mostly spin) – its kinda crazy.

Now understand, there's a mix of data sources, most of the people that appear in the financial press have a very specific agenda. They appear on TV and radio or get quoted because they want to attract clients. We understand their motivations. Where things begin to get dicey is when they start to say ever more ridiculous things in order to do more media interviews. They figure that no one will remember what they said, so long as they're on TV a lot they'll attract more business.

So that's one particular sub group of people that really deserves to be metaphorically slapped around.”

There’s a lot more at Pieria . . .

Source:
Why I Write: Barry Ritholtz
Marco Nappolini
Pieria, June 26th 2013
http://www.pieria.co.uk/articles/5_barry_ritholtz

Seinfeld On Stern

Posted: 27 Jun 2013 03:00 AM PDT

“Pop-Tarts…they can’t go stale because they were never fresh!”

Long form entertainment, it’s the wave of the future.

Huh? Don’t we live in the short attention span era?

WRONG! Ignore everything said by anybody who proffers this theory. Ever see a kid play video games? You can’t tear him away. The truth is we all want to dig deeper, and he who realizes this will own the future.

Huh? Aren’t you the wanker who tells musicians to stop making albums?

“A small amount of too much spoils the whole thing.”

That’s why Jerry didn’t do another season of “Seinfeld.” He was worried about compromising the white hot relationship between the show and its fans. Once it’s not quite as good, it’s awful. Kind of like a standup…he’s genius if he kills for an hour ten, after an hour and a half, it’s way too much, you’re looking at your watch, you’re ready to go home. Come on, you’ve had this feeling at the gig. You can’t believe you’re there, that they’re playing your song! And it’s not that you don’t want to hear any more, but that special feeling…it’s evaporating.

But first you need an audience. That’s your goal. And if you think you gain an audience through an album, you’re clueless about relationships. Relationships are fostered on specialness, then you bring on the quantity.

I watched Seinfeld’s show from its inception, because I was aware of him from late night TV, with his routine about the supermarket and women…that’s why they call it the “checkout” line. But despite being on Johnny Carson for nine years, NBC never offered him a gig. It was his manager, George Shapiro, who started the conversation. Shapiro sent a one sentence letter to the NBC brass, saying he saw Jerry on NBC in the future.

Huh. I was just discussing this last night. Trink said you need to put yourself out there, you need a plan…I always wait for things to come to me. Maybe Trink’s right.

And Jerry takes the meeting and doesn’t pitch an idea. He hasn’t got one. But then he tells the story to Larry David, they go to a restaurant, goof on some people, and Larry says…THIS IS THE SHOW!

And the rest is both TV and comedy history.

And recently, Jerry’s bugged me. He’s so self-satisfied.

But listening to him on Stern I became aware…that’s who Jerry is! It isn’t because he had a hit TV show and made millions, he was the same damn guy before he made it. That’s what long form does…give you insight.

Yup, I sat in my car in the eighty degree heat for over an hour, parked, I couldn’t turn Seinfeld off.

And I’m not saying you’ll be just as fascinated, but I am saying that we’ve got unlimited time for that which interests us.

And Jerry kept stressing that Stern’s show is all about honesty, so he kept telling the real story. How he really didn’t put that much time in before he made it, only four years. How he saw no need to put women and blacks on “Seinfeld,” but after ten episodes Colin Quinn told him he was gonna get in trouble for it, and he did.

Howard didn’t ask Jerry about meeting his wife right after her honeymoon, but that’s not to say the questions were softballs. But the more you heard Jerry speak, the more you liked him. Because first and foremost he’s a comedian.

That’s the problem with “artists” today. They want fame, they want riches, but they don’t want to be the thing that got them there. They want to go to the Lakers game, but they don’t want to rehearse.

Yes, Jerry is working all the time.

No, he cannot go to a restaurant and turn it off. He’s always looking for what’s funny. Thank god his wife is amenable to that. You think you want to marry a celebrity? Be ready to have little one on one time with your beloved, and when they’re there, they still might be checked out.

Kind of like Seinfeld’s father. His mother married him because he was the life of the party. But once he got home…he could be morose and depressed.

Which is what Jerry said about life… You want to find the gig you can tolerate. Yup, that’s where you end up, with the torture you can handle. It ain’t fun. Oh, sometimes it is. But really, it’s work!

That’s what wannabes don’t understand. That’s why I respect people who graduate from college. Not because they learn anything there, but because they endured it! Everything I learned in college was outside the classroom. I spent hours reading “Rolling Stone” and “Fusion” and “Crawdaddy” and so many magazines you’ve never heard the name of. But I knew what the game was, I played it, stretching its limits, of course, I could tell you stories, and it’s like I survived boot camp, or a war, it informs who I am.

But the youngsters and the dropouts… They’ve got the will, but no history. The army breaks you down, turns you into someone who can be counted on… That’s what I want, someone I can count on!

I don’t want the most beautiful wife.

And I don’t want the most loquacious friend.

First and foremost I want people I can count on. Who will be there. Because life is no picnic, I want to be lifted up when I’m worn out and pushed forward when I don’t want to play anymore. It takes a special kind of person to do this, look for them.

And I’m interested in process. Howard gets that from musicians too, but you don’t see it anywhere else. Based on the music press, you’d think songs are delivered instantaneously, by God. The truth is many are written by committee, there’s no there there, whereas Jerry said he wouldn’t want to use anybody else’s jokes, the thrill is in working it out yourself.

In other words, most of the act no one ever sees. If you’re only interested in the fame, good luck! It ain’t never gonna work for you.

And Jerry knows who he is. He says he’s not as good as Carlin or Pryor, then again, he knows how great his TV show was, he’s loath to do another one, he knows it could never be as good.

But Jerry’s not about sitcoms or movies, he’s about being a comedian. He won’t go on Fallon and only do the couch, he’s got to perform, he’s got to do standup, that’s who he IS!

P.S. It was the human things that really touched me…the uncomfortableness of going to parties. Jerry’s found out that people love to talk about themselves, and if you listen long enough, everybody has an interesting story to tell. But really, he’d rather talk with comedians. I feel exactly the same way, the discomfort, the listening and the desire at the end…to have been somewhere else!