Mr. Sensitive

February 25, 2013

This Sequester Thing Might Actually Happen

Filed under: Uncategorized — lbej @ 14:40

Remember the fiscal cliff?  Financial media and general news media alike were in full meltdown mode from mid-November on, shouting about how we had had HAD to avoid the dreaded fiscal cliff.  CNBC is my proxy for the opinion of the rich people and corporatists controlling the Republican fundraising and electioneering machine–Fox News is for if you want to get the pulse of the racists and the zealots, not that you do.  The issues pushed by Fox News drive voter turnout; the issues highlighted by CNBC drive policy.  Well, CNBC ran a ‘countdown to fiscal cliff’ clock graphic during most of their daily market coverage beginning at the end of November(!), and the programming execs created a post-election network-wide theme they called ‘Rise Above,’ ostensibly urging Congress and the President (they’d failed to unseat) to put aside their differences and work together to avoid…dum dum dum…the fiscal cliff.  What did that mean?

The richies and the corporatists weren’t interested in going over the cliff.

So it should have surprised no one when the House Republicans seemingly caved, ‘allowing’ taxes on the wealthy to rise while raising the threshold for the top tax bracket and scuttling efforts to close corporate tax loopholes.  As part of that deal, the automatic spending cuts that were to accompany the automatic tax increases were tabled–until March 1.  That gave the new Congress and the President time to reach a broader, more comprehensive deal on entitlements, defense spending and other issues impacting the budget deficit.

Ha ha ha no.

Well, March 1 is Friday, and there’s no movement.  The President sounds like he’s working more on exposing Republican intransigence than on negotiating a deal, and the Republicans are saying not much of anything.  What about CNBC?  There’s no ‘countdown to sequester’ this time, no exhortations to ‘Rise Above.’  It’s not being ignored, but it’s being treated as just one of a number of challenges to the ongoing bull market, the same as this weekend’s Italian election and aggressive yen-manipulation being undertaken by the Bank of Japan.  What does that tell me?  Two things:

1.  This sequester thing might actually happen, because

2.  The richies and corporatists only ever cared about the tax component of the fiscal cliff to begin with.

With tax issues largely resolved, the corporatists are willing to get out of the way of the Tea Party crazies, and the crazies want Armageddon, or as close to it as they can get.  So far, the market isn’t concerned, and pullbacks have been short and shallow.  In part, that’s because the multinational corporations that dominate the major indices have geographically diversified revenue streams, but there may also be more than a little undue complacency.  In short, I think the sequester is happening, and I think it hasn’t been priced into equities at current levels.  Friday could be very, very interesting.

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February 22, 2013

FSX Friday Update

Filed under: Uncategorized — lbej @ 16:59

The stock market sold off—hard—midweek when the FOMC minutes revealed a willingness to ‘vary the pace of asset purchases,’ Fed-speak for slowing down the pace of quantitative easing.  That the Fed merely suggested that it might decide to ease less aggressively going forward—which, by the way, it won’t—and the result was a panicked dash for the exit, well…it’s not a good sign, at least not for the bulls.  Stock pickers and market strategists alike have been relying more and more on fundamentals in framing the bull case for a technically-overbought market closing in on all-time highs, but this week’s Fed-induced swoon suggests that not everyone’s drinking the Kool-aid.  The not-so-secret secret is that the Kool-aid is spiked, and the Fed’s been spiking it, in one form or another, since 2001 (and without interruption since 2008).  Eventually it will end; maybe not before we get QE5, or QE6, or QE10, but eventually.  The market rebounded nicely on Friday, but what we saw midweek is the tiniest of sneak-peaks at what will happen, at least in the short-term, when the end arrives.

The Family Stock Index made yet another all-time high—14,879—on Wednesday morning, and then it rolled over.  After a drop of 350 points in less than a day’s worth of trading, the FSX firmed up around 14,500 and rebounded slightly, finishing the week down 1.2% to 14,608.  Was this the much-needed correction?  Breadth was appropriately dismal—21 decliners to 4 advancers—and for a minute there, it felt like a real pullback.  But after seven weeks and 1400 points to the upside, a minute doesn’t mean much.  There’s a strong bid just below current levels and it’s going to take more than a little skittishness to stop bulls from pouncing on every pullback.  Might a sequestration do it?  We’re about to find out.

Advancers

  • Nicole M. (COLM) +6.5%.  Mario provided some truly compelling analysis on this stock last week, and in light of the follow-on rally it bears revisiting.  To quote him, ‘Nicole is very excited about the new addition in our house. I’m of course referring to the new dog food that we got Winston.’  Having switched dog food several times myself, I know that the early stages can be nerve-racking.  The market certainly has confidence in the new dog food, though; an 11% rally in a sideways market and a new 52-week high speak for themselves.
  • Ed Winston (ED) +3.4%.  Dogs, fortunately, do not speak for themselves.  Mario told us last week the ‘[Winston’s] old food resulted in diarrhea for like four straight days,’ and I imagine Ol’ Ed would have turned the air blue while he was turning the ground brown.  Hopefully he’ll get on board with the new dog food, though, because it can be a tough transition; some dogs don’t care what you feed them (Zondro), and others like their food the way it was (Wilson).
  • Mario the Elder (MGEE) +2.1%.  Grandpa might spend the rest of his life building glass sandcastles.  It sounds like a beautiful metaphor, doesn’t it?
  • Ruby (RJET) +0.8%.  If it’s not a metaphor, we could be looking at the catalyst for Ruby’s (+72% in 2013) long-overdue correction.
  • Wilson (WILC) +1.2%.  If my dogs had stomach problems, I’d probably never know.  How awesome is that for me?

Decliners

  • Zero (ZAGG) -1.6%.  Zero quit his job after failing to find respect and appreciation working for a multinational corporation.  He also failed to find the Spear of Destiny or the Lost Continent of Atlantis—but keep looking, bro.
  • Jenny (JNY) -3.8%.  Jenny’s grades are sliding again, and she’s got Bs in three of her core academic subjects (as of Katie’s most recent check).  I’ve made my position on this very clear: if a B is the result of Jenny’s best effort, it’s just a B; if not, it’s an F.  Jenny mixes in too many Ds and Fs among the As she’s otherwise able to get, and when we review her assignments with her, her mistakes are inevitably the result of sloppiness and carelessness.  The majority of those mistakes would have been avoided or corrected if Jenny took the time to think through and review her work.  I don’t like the idea of punishing her for screwing up individual assignments; I don’t want to live that way any more than she does.  But it doesn’t take many 40% or 50% scores to ruin an average, and if those scores are coming as a result of poor effort, drastic measures may be necessary.  I can’t do anything about aptitude, but effort is another matter entirely.  And while I’m sure there’s a point beyond which I won’t go, I can’t off the top of my head think of what point that might be.
  • Reagan (REGN) -2.8%.  At the opposite, slightly-deranged end of the educational spectrum, we have Reagan.  Reagan had to miss two days of school this week because she had the flu, and while I’m sure she will eventually forgive her mother for failing to stop by school and get the days’ assignments from her teachers, I’m not sure when it will be.  If anyone doubts that nature has a strong case in the nature-vs-nuture debate, I invite you to spend a day with my daughters.
  • Mario the Younger (MAR) -4.2%.  Switching dog food can be stressful.  I remember exactly how I felt the first time I switched dog food…or, on second thought, maybe I don’t.  I’ve had these dogs for a long, long time.
  • Zondro (ZQK) -6.4%.  Spring is coming, and Zondro’s long winter of contentment will ending just as soon as it arrives.  He may have forgotten that he’s an outside dog, but I sure haven’t.
  • Lucas (LEI) -13%.  The deeper voice may be tough to get used to, Mario, but there’s a trick to it.  When a young man’s voice first changes, it’s liable to drop a couple octaves.  Once that young man gets over the fact that his voice changed, however, at least one of those abandoned octaves will magically come back.  A teenage boy’s baritone isn’t all affectation, obviously, but you can bet he’s aware of it.  The novelty will wear off.  I sound like a robot bear all the time, but I only try to sound like a giant robot bear when a kid- or dog-misstep makes it necessary.

 

Name Ticker 2/22/2013 Change
Brinkley BCO $26.35 -0.19
Charlotte ICE $155.98 -0.48
Dustin DST $67.59 -0.29
Ghost Marisa MOLXA $22.92 -0.21
Icarus FAST $51.47 -1.29
Jenny JNY $11.27 -0.45
Jodi Ann JOY $63.02 +0.16
Justin SCI $15.67 -0.04
Katie CATY $19.79 -0.35
Lee TGI $73.47 -0.35
Lisa LNCE $25.56 +0.14
Lucas LEI $1.37 -0.21
Lulu LULU $67.05 -0.80
Marcus MCS $12.65 -0.11
Mario T.E. MGEE $54.40 +1.11
Mario T.Y. MAR $39.49 -1.74
Namilita NL $13.39 +0.09
Nicole E. NICE $35.98 -0.22
Nicole M. COLM $56.20 +3.44
Reagan REGN $160.38 -4.55
Ruby RJET $9.66 +0.08
Wilson WILC $5.56 +0.06
Winston ED $58.48 +1.90
Zero ZAGG $7.44 -0.12
Zondro ZQK $5.96 -0.41

 

February 15, 2013

FSX Friday Update

Filed under: Uncategorized — lbej @ 17:56

I have a secret.  Remember when I said that my timetable for completion of the second draft of Book Four—thirteen weeks, hence Plan XIII—was very conservative?  I did, in case you don’t.  Well, that wasn’t entirely true.  Was it achievable?  It was and it is.  Was it conservative?  Well, I’ve got to bag two chapters this week and double-up again at some point in the final six weeks, so probably not.  I could do the update this week, of course, and I would if had to.  But since Mario told Katie he was interested in subbing for me, I’m only too happy to let him.  So after a brief recap of the market action overall—Mario didn’t seem interested in addressing that—I’ll turn the a/d section over to him.

The broader averages were basically flat on the week, with 0.1% moves for the Dow, S&P and Nasdaq.  All three managed to notch new five-year highs, though, and the upward bias continues to hold.  The Family Stock Index beat the market handily after trailing the S&P for a few weeks; a 1.2% gain this week lifted the FSX to an all-time intraday high above 14,800 before we settled out at 14,782.  The FSX is up 10% year-to-date with 20 of 25 components in the green and six new 52-week highs just this week (Charlotte, Dustin, Justin, Katie, Lee and Ruby).  Pretty sweet, no?

Now on to the people and pets, courtesy of Mario TY (with a couple additions from Mr. S):

  • Ruby (RJET) +7.8%.  The excitement has started to ramp up for the celebration of her 60th birthday in October. Yep, that’s it.
  • Zero (ZAGG) +7.5%.  The Grammys were last week. I’m pretty sure Zero probably hated most of the music in the Grammys, but still, it’s music. And Zero likes music.
  • Charlotte (ICE) +5.0%.  One of her favorite shows, “Community”, came back on the air last week, so Charlotte is clearly riding a high related to that.
  • Justin (SCI) +4.6%.  I got an email from Justin this week. This has happened twice before in history, I think, so I’m assuming Justin’s stock went up both times that he had the privilege of emailing me.
  • Nicole M. (COLM) +4.1%.  Nicole is very excited about the new addition in our house. I’m of course referring to the new dog food that we got Winston, since his old food resulted in diarrhea for like four straight days.
  • Icarus (FAST) +4.1%.  Maybe Icarus is excited because its warmer in the Northeast right now, meaning that he doesn’t have to go outside and pose for photos with icicles forming all over him.
  • Jodi Ann (JOY) +2.3%.  Monday is President’s Day, and teachers usually have the day off, right?
  • Lee (TGI) +2.0%.  Obviously not having to write this weekly recap has caused Lee to be up this week. Oh, and it’s Presidents Day, and I feel like Lee loves the institution of President of the United States.
  • Ghost Marisa (MOLXA) +1.5%.  I have nothing to say about Marisa. That’s probably the way ghosts like it.
  • Katie (CATY) +1.5%.  I think that between her birthday and the fact that I’m now joining Katie in watching the show “Parenthood”, it was easy to predict that she’d be up this week.
  • Mario TE (MGEE) +1.0%.  Dad is just looking for something to occupy his time and he may have found it this week.
  • Mario TE (MAR) +0.6%.  Despite the fact that the Super Bowl just ended, I’m already excited for the coming football season.
  • Nami & Lita (NL) +0.5%.  I know nothing about these cats. But if Charlotte’s happy, I’m guessing that means they’re happy, too. And Charlotte’s stock is up …
  • Dustin (DST) +0.3%.  He bought his tickets for the trip to Hawaii this week.
  • Wilson (WILC) unch.  Sounds just about right. He never seems too happy or too sad.
  • Lulu (LULU) -0.3%.  She misses Marisa. (She looks like she ate Marisa—Mr. Sensitive)
  • Reagan (REGN) -0.6%.  There are just 24 hours in a day, and Reagan needs more time for her homework.
  • Lucas (LEI) -0.6%.  I talked to Lucas on the phone this week. Still can’t get over the voice change.
  • Jenny (JNY) -0.7%.  Katie and Jenny stayed up to watch the Grammys. A little mother-daughter bonding time always kicks off a great week. (And then it kicks you in the face later in the week when you have to get up at 5:30—Mr. Sensitive)
  • Ed Winston (ED) -1.0%.  He didn’t get fed for a full day at one point this week as we attempted to work him through a stomach bug.
  • Lisa (LNCE) -1.7%.  They got tickets to Hawaii this week, so I’m assuming they’re on a budget for a few months.
  • Brinkley (BCO) -1.8%.  He might be down, but I’m guessing whoever makes the pacifier is up this week.
  • Nicole E. (NICE) -2.2%.  She probably loves the snow, so when it melted this week, Nicole was sad.
  • Marcus (MCS) -2.2%.  Marcus likes to teach, so the day off for Presidents Day is disappointing to him.
  • Zondro (ZQK) -5.8%.  Huge drop for Zondro. Could it be the post-Puppy Bowl blues?
Name Ticker 2/15/2013 Change
Brinkley BCO $26.54 -0.50
Charlotte ICE $156.46 +7.46
Dustin DST $67.88 +0.20
Ghost Marisa MOLXA $23.13 +0.35
Icarus FAST $52.76 +2.07
Jenny JNY $11.72 -0.08
Jodi Ann JOY $62.86 +1.41
Justin SCI $15.71 +0.69
Katie CATY $20.14 +0.29
Lee TGI $73.82 +1.42
Lisa LNCE $25.42 -0.43
Lucas LEI $1.58 -0.01
Lulu LULU $67.85 -0.19
Marcus MCS $12.76 -0.29
Mario T.E. MGEE $53.29 +0.54
Mario T.Y. MAR $41.23 +0.26
Namilita NL $13.30 +0.06
Nicole E. NICE $36.20 -0.80
Nicole M. COLM $52.76 +2.10
Reagan REGN $164.93 -0.92
Ruby RJET $9.58 +0.69
Wilson WILC $5.50 unch
Winston ED $56.58 -0.57
Zero ZAGG $7.56 +0.53
Zondro ZQK $6.37 -0.39

February 8, 2013

FSX Friday Update

Filed under: Uncategorized — lbej @ 17:02

The stock market just does not want to go down, period; we notched new multi-year highs for the major indices today.  The more chatter the market hears about how it’s due for a correction, the less likely that correction becomes.  Is it a bubble?  Not really, not in my opinion.  Valuations are definitely stretched.  At 18x earnings, you could argue that risk is being mispriced, if not ignored.  But is it the Nasdaq in March 2000?  No.  Is it the U.S. housing market in 2006?  No.  Is it the bond market right now?  No.  In fact, I think fear of a bond market implosion is underpinning stock inflows.  The reality is that multinational corporations are healthier than governments and far more rational, and however overvalued the stocks of those companies are, it’s nothing compared to how overvalued their bonds are.  The attempts at correction mounted this week and last have failed decisively, because the market doesn’t want to go down.  Would I buy at these levels?  Not on your life.  But I wouldn’t short this market, either.  To get a major move in either direction, we’re going to need to see a directional shift in fundamentals.  We didn’t get that from earnings—they’ve been steady-as-she-goes—so we’ll see what the politicians have in store for us over the next two months.

The Family Stock Index started its pullback last week (-0.7%) while the broader averages continued to rally, so we weren’t in a position to challenge multi-year/all-time highs on Friday.  The FSX added 0.6% on the week to close at 14,600, within sight of last week’s record level of 14,699.  Breadth is starting to deteriorate, though, and the number of stocks in the red for the year has risen from just one two weeks ago to six now.  It’s not necessarily a bad thing to see rotation out of last year’s leaders (REGN, LULU), but when I’m one of the main drivers of FSX gains (TGI +11% YTD), that hasn’t been a good sign, historically.  Maybe things will be different this year; I’ll believe it if I’m still sporting a 7-handle come July.

Advancers

  • Zondro (ZQK +6.0%) and Wilson (WILC +4.6%).  Both of my dogs set fresh highs this week, and I can’t help but wonder if it was a mistake to underweight pets in the FSX.  Wilson overweights himself, though, so I was just trying to balance things out.
  • Charlotte (ICE) +5.8%.  Charlotte wowed the analysts with a blowout quarter and is on track to sew up the NYSE acquisition in the coming months; as a result, investors pushed her stock to levels not seen since 2008.  What does Charlotte plan to do with the New York Stock Exchange?  Whatever her intentions are, I feel confident in saying that there will be more than one picture of my sister hanging on the trading floor once the deal closes.  The trading floor of the NYSE is pretty big; I’m setting the over/under at eight tasteful Charlottes.
  • Zero (ZAGG) +5.1%.  I know Zero was pretty bummed out when Charlotte bid for the NYSE two years ago, but that deal was 20% pricier and Charlotte was bringing in Nasdaq to prop up the bid.  Why would Zero want to share Charlotte with Nasdaq anyway?  Those cats are needy enough as it is.
  • Ruby (RJET) +4.5%.  Ruby sold off last week as the market came to terms with the end of her extended travel season.  This week investors returned to the stock after remembering that the home Ruby returns to is in Hilton Head now, not Wytheville.
  • Lee (TGI) +3.1%.  Maybe Charlotte will let me run day-to-day operations at stock exchange once she’s in charge.  I don’t like portraits of myself, so no worries there.  All I want—beyond the eight-figure salary, of course—is to wear a cape to work.  And maybe a winged helmet.
  • Nami & Lita (NL) +3.0%.  What will the cats do when Charlotte lets them loose on Wall Street?  Do they ever poop in people’s shoes?  If not, it’s time to start.
  • Mario TY (MAR) +1.7%.  Mario will be writing an upcoming FSX Update; no doubt he’s already looking forward to all the comments that these posts get.  Ha ha no.  If you want comments, I have one word for you: insults.

Decliners

  • Brinkley (BCO) -2.6%.  Don’t bother insulting Brinky; he doesn’t care.  I threw a ball at him yesterday and he didn’t even turn around.
  • Jenny (JNY) -2.9%.  It’s no good insulting Jenny, either.  She doesn’t look up from her Nook or take her headphones out of her ears except for dinner.
  • Marcus (MCS) -3.3%.  The market has spoken: it’s time to make this cape thing happen in the world of education.
  • Jodi Ann (JOY) -4.2%.  Capes up, neckties down.  No more neck-phallus male-domination in the workplace.  Nothing says equality and empowerment like a cape.
  • Reagan (REGN) -4.2%.  Reagan came home from school early on Wednesday because she had a stomach ache and her teacher was concerned enough to call.  That’s because Reagan isn’t a complainer, at least not when she’s at school.  Reagan doesn’t complain about ailments when she’s at school, because Reagan doesn’t want to miss school, because Reagan is school.  So when Katie and sick Reagan walked in the door, the first thing Reagan did was go up to her bed to lie down.  Ha ha no.  The first thing Reagan did was sit down at the kitchen table to start on her homework.   That kind of crazy catches up with you eventually, and the market is beginning to price a crazy-Reagan discount into REGN stock.
Name Ticker 2/8/2013 Change
Brinkley BCO $27.04 -0.71
Charlotte ICE $149.00 +8.12
Dustin DST $67.68 +0.97
Ghost Marisa MOLXA $22.78 +0.01
Icarus FAST $50.69 +0.03
Jenny JNY $11.80 -0.35
Jodi Ann JOY $61.45 -2.70
Justin SCI $15.02 +0.05
Katie CATY $19.85 +0.16
Lee TGI $72.40 +2.18
Lisa LNCE $25.85 +0.11
Lucas LEI $1.59 -0.03
Lulu LULU $68.04 +0.18
Marcus MCS $13.05 -0.45
Mario T.E. MGEE $52.75 -0.15
Mario T.Y. MAR $40.97 +0.68
Namilita NL $13.24 +0.39
Nicole E. NICE $37.00 -0.32
Nicole M. COLM $50.66 +0.06
Reagan REGN $165.85 -7.03
Ruby RJET $8.89 +0.38
Wilson WILC $5.50 +0.24
Winston ED $57.15 +0.10
Zero ZAGG $7.03 +0.34
Zondro ZQK $6.76 +0.38

The Federal Reserve Can’t Create Jobs

Filed under: Uncategorized — lbej @ 10:39

Charles Evans is the President of the Federal Reserve Bank of Chicago, one of the 12 regional branches of the Federal Reserve System.  Mr. Evans is also a member of the Federal Open Market Committee (FOMC), the entity responsible for establishing and executing monetary policy for the United States.   Mr. Evans said some dubious things this week, and I’m bothered by the lack of pitchforks and torches I’m seeing.  First, a little background.

The U.S. Congress charged the Federal Reserve (let’s call it the Fed, everyone does) with two equally important economic functions: maintaining price stability and maintaining full employment.  We call this the Fed’s dual mandate.  To achieve these goals, Congress gave the Fed control over monetary policy, making the Fed responsible for the supply of dollars in circulation.  Congress retains control of fiscal policy—taxing and spending—as required by the Constitution.  (The Constitution conveniently has nothing to say about monetary policy.)  Prior to 2008, the FOMC used the Fed Funds rate—the rate at which banks borrow from and lend to each other—to execute monetary policy.  When the Fed wanted to stimulate the economy, it would lower the Fed Funds rate for banks, and banks would in turn lower the rates at which consumers and business could borrow.  The increase in bank lending would inject more money into the economy, driving real economic activity and leading businesses to hire more workers.  If, however, the supply of money increased faster than the rate at which it could be channeled into production and consumption of real goods and services, the result was inflation—more dollars chasing the same amount of goods and services.  Inflation erodes the purchasing power of money, and runaway hyperinflation makes money useless, with the result being the breakdown of trade and commerce above the level of bartering.  In the past, when the Fed perceived that the risk of rising inflation outweighed the risk of rising unemployment, it would raise the Fed Funds rate, curtailing lending, economic activity, and money supply.  When the risks were reversed—in the view of the FOMC—the Fed Funds rate would be lowered, causing an expansion of lending, economic activity, and money supply.  Monetary policy works with a significant lag, so it would be several months or more before the impact of a change in the Funds rate would be felt in the real economy.  For this reason, the FOMC had to act before a bad situation—high inflation or high unemployment—manifested itself, making the rate-setting process a hit-or-miss proposition for the FOMC, and a guessing game for market participants.  Sounds fun, right?  Well, it sorta was.

In 2008, everything changed.  The collapse of the housing market in 2007 caused a wave of mortgage defaults and delinquencies, which in turn destroyed the value of many of the mortgage-backed securities sitting on the balance sheets of the nation’s banks.  When these investments were written down, bank capital disappeared, and massive institutions like Bear Stearns, Lehman Brothers, Washington Mutual and Wachovia were suddenly insolvent.  The result was a near-collapse of the global financial system, and even when the FOMC cut the Fed Funds rate to zero, it wasn’t enough.  Banks wouldn’t lend to each other no matter what the rate was, because the problem was confidence.  It doesn’t matter what the interest rates are when seemingly-healthy banks can go belly-up tomorrow.  The Fed and the U.S. Treasury took unprecedented steps to avoid a complete collapse of the economy, and began injecting money directly into the banks.  This was done directly through TARP and indirectly through asset purchases.  The banking system stabilized and a second Great Depression was avoided, so TARP was wound-down as banks were able to repay the Treasury and end direct government ownership.  A Great Depression was avoided, but a deep recession was not, and so the Fed Funds rate remained at zero and the indirect injection of liquidity into the banks—what we call quantitative easing or QE—intensified.  We’re now five years clear of the financial crisis, and what the Fed calls ‘accomodative’ monetary policy continues, with no apparent end in sight.

This brings us to Mr. Evans, who this week said that he believes the unemployment rate will not drop to 6.5% until 2015 (it’s 7.9% now) and that QE should and will continue until that time.  Why 6.5%?  This is the arbitrary level the Fed now considers ‘full employment.’  Never mind that when George W. Bush took office in 2001 the unemployment rate was under 5%; 6.5% is now full employment, and Mr. Evans believes pumping cash into the banks until 2015 is what it will take to get us there.  What about the other half of the dual mandate, you ask?  Inflation’s not a problem, according to the Fed.  The Consumer Price Index (CPI) tells us that inflation is running well under 2% annually, and if anything, it could stand to be higher.  Never mind that the CPI strips out food and energy prices—who needs food and energy?—and fails to properly account for the soaring cost of health care and education.  Yes, inflation isn’t a problem, as long as you don’t need food, electricity, gasoline, health care or education.  So that must be my issue with Mr. Evans and his colleagues, right?

Nope.  I’m not even talking about the magic inflation measurements that allow the Fed to ignore its failure to maintain price stability.  I’m talking about jobs.  Quantitative Easing hasn’t worked, it won’t work, and it wasn’t ever going to work—not if the goal is to increase employment.  Why is this the case?  Because banks aren’t lending.  The old system—the Fed makes it easier for banks to borrow so banks make it easier for consumers and businesses to borrow—is broken.  The Fed is pumping money into the banks, and they’re hoarding it, unwilling to lend until they see concrete evidence of a recovery in employment.  You see the problem: the Fed is hoping QE will increase employment by increasing lending, but the banks won’t lend until they see evidence of increased employment.  The system is broken.

In part, the Fed is to blame for the lack of lending.  The FOMC wants banks to lend, but the enforcement arm of the Federal Reserve—the folks I dealt with in my former life—have been forcing banks to tighten lending standards and add layers of loan review that slow down and shut down the lending process.  I can’t tell the Fed which is preferable—higher hurdles for making a loan or stimulative lending practices—but it should be obvious that you can’t have both.  Banks are also to blame for being overly risk-averse, and for hoarding capital reserves beyond what is necessary.  Whichever party is to blame for the bottleneck the banks now represent, the reality of that bottleneck can no longer be ignored.  It’s the fact that Mr. Evans and his FOMC colleagues continue to do so that should alarm market participants and members of Congress alike.

 

February 7, 2013

Brinky Bowl Champion

Filed under: Uncategorized — lbej @ 08:43

Nicole E. is the 2013 Brinky Bowl Champion; it’s taken me awhile to get with the feting because the outcome of the Superbowl was so disappointing.  When the lights went out at the Superdome I thought my Superbowl pick–a giant sinkhole and/or cosmic vortex–was about consume both teams and win the game by default.  The result would have been a Harbaughless world and a Brinky Bowl victory for me, so you can understand how it’s taken me a few days to get over my disappointment.  The final standings are as follows:

#1 – Nicole (39 points)

#2 – Tara (38)

#3 – Justin (28)

#4 – Jenny (24)

#5 – Lee (23)

#6 – Mario (22)

#7 – Katie (16)

Jenny had the most points among the four Bowlers picking the 49ers, and she would have been the champion had San Francisco won.  I told her that going in, and then she showed up for the kickoff wearing purple.  I’m a man of science and I cannot be swayed by superstitious mysticism; I need evidence.  Jenny wore that stupid purple shirt-thing until the Ravens went up 28-6 and I got mad about it.  After Jenny changed into a red shirt with gold pants, the lights went out and the 49ers went on a run.  So if we’re being scientific about it, Ray Lewis’ god didn’t cause the Ravens to win the Superbowl–Jenny did.  She also caused the blackout in the Superdome.

There’s not an actual Brinky Bowl to award, and I wouldn’t send it to Nicole if there was one, but I didn’t want to just do nothing in the way of feting.  So I looked around my office and the only bowl I have is this one:

bowl 002

There are some leaves in it, plus a glue stick and the Violator.  Feel free to imagine him clapping some of his hands in celebration of Nicole.

February 1, 2013

FSX Friday Update Triple-Team

Filed under: Uncategorized — lbej @ 19:50

Intro by Mr. Sensitive; advancers and decliners by Reagan; Reagan’s insanity transcribed by Katie.

U.S. stocks rallied to new multi-year highs, with the Dow closing above 14,000 for the first time since October 2007, before the housing collapse and ensuing financial crisis.  Friday’s employment report wasn’t bad, but neither was it strong enough to make anyone think the Fed will be tightening monetary policy anytime soon.  The Family Stock Index badly lagged the broader market, losing 0.7% on the week compared to the 0.7% gain in the S&P 500.  The FSX hit an all-time high of 14699.60  on Tuesday before settling out at 14,513 on Friday.  Decliners barely edged out advancers 12 to 13.

Now for the people, comments by Reagan, typing by Katie:

Advancers

  • Charlotte (ICE) +4.5%. She is up because she’s really really really really excited about the Super Bowl because she’s planning on surprising us and just showing up at 3:30 in the morning on the day of the Super Bowl and then she’s going to watch the Super Bowl with us and everyone’s going to be happy.
  • Icarus (FAST) +3.5%. Icky’s up because he is really happy to have gotten to spend that month with Justin (you know, the whole month of January) after he got back from Christmas from visiting us. Icky was really excited because he got to do the walks and the playing. Wait, Icky was here. Nevermind.
  • Dustin (DST) +3.4%. He’s probably happy that Lucas is back in school because he’s gotten to play some golf. And spend time with Lisa. And do computer thingies.
  • Katie (CATY) +2.2%. I think Mommy’s up because she has had a really successful week and everybody’s happy, even though Daddy is kind of sick.
  • U. Mario (MAR) +1.8%. Uncle M. Um, let’s see. You’re typing everything I say, aren’t you? Um. Who’s this? He’s back to work so he can call Mommy in the mornings. He’s been enjoying his walks with Winston in the mornings.

Decliners

  • Lulu (LULU) -2.8%. Lulu has been pushed off the table multiple times by me because she’s been creeping into my room and creeping me out because she stands right on top of whatever I’m trying to do in there and so then I push her off and then she meows and walks out the door.
  • Lee (TGI) -3.6%. Daddy’s not been feeling very well and he’s been having a hard time breathing and stuff like that. Which is a shame. I hope he feels better.
  • Brinkley (BCO) -7.2%. Brink-a-ley has a little red spot on his face. Whoa whoa whoa…where’s Brinky? (answer: in bed) And he’s been having a hard time with his diaper changing. He doesn’t like diapers. And he’s kind of been trying to run into everything in the world lately.
  • Ruby (RJET) -7.3%. Boo-boo was out of town this week, so she didn’t get to hear about my report card, which was all A’s by the way, and she can’t wait to hear about it.
  • Zero (ZAGG) -7.6%. Zero, he…here’s the thing…he’s just (sniff, sniffle) actually supposed to be down this week since Charlotte was up and she’s his wife. It also happened with Dustin and Lisa, you know, Dustin was up and Lisa was down. Those sorts of things. He’s just made to. He’s supposed to. That’s how it works. This week at least.
Name Ticker 2/1/2013 Change
Brinkley BCO $27.75 -2.15
Charlotte ICE $140.88 +6.06
Dustin DST $66.71 +2.18
Ghost Marisa MOLXA $22.77 -0.01
Icarus FAST $50.66 +1.70
Jenny JNY $12.15 +0.16
Jodi Ann JOY $64.15 +0.89
Justin SCI $14.97 +0.11
Katie CATY $19.69 +0.43
Lee TGI $70.22 -2.63
Lisa LNCE $25.74 -0.22
Lucas LEI $1.62 -0.03
Lulu LULU $67.86 -1.97
Marcus MCS $13.50 +0.35
Mario T.E. MGEE $52.90 +0.72
Mario T.Y. MAR $40.29 +0.73
Namilita NL $12.85 -0.03
Nicole E. NICE $37.32 +0.27
Nicole M. COLM $50.60 -0.61
Reagan REGN $172.88 -1.60
Ruby RJET $8.51 -0.67
Wilson WILC $5.26 -0.14
Winston ED $57.05 +0.54
Zero ZAGG $6.69 -0.55
Zondro ZQK $6.38 -0.03

Brinky Bowl Update – Pooper Bowl

Filed under: Uncategorized — lbej @ 12:08

Ugh, this game.  If Ray Lewis finds the Spear of Destiny before kickoff and uses it to vanquish Captain Comeback, the Ravens will win.  Otherwise, who knows?  I’m planning to watch the game muted except for the commercials, and I’m not watching the halftime show at all.  Destiny’s Child?  Meh.  Show me the fake baby and I’ll watch.

The conference championship games two weeks ago shook up the Brinky Bowl standings.  Tara picked both games correctly; Nicole, Jenny and Katie were each 1-1; and Mario, Justin and I whiffed on both.  Each game was worth 7 points, leaving the standings as follows:

#1 – Nicole (29 points)

#2 – Tara (28)

#3 – Jenny (24)

#4 – Lee (23)

#5 – Mario (22)

#6 – Justin (18)

#7 – Katie (16)

The Superbowl is worth 10 points, so everyone’s still in it except for Katie and Justin.  Bowlers need to pick 49ers or Ravens and send the pick to me or Katie by kickoff on Sunday.

Ugh, this game.

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