Yes Pecan!

February 28, 2009

I guess this is January news, but seems like the new Ben & Jerry’s ice cream flavor named “Yes Pecan!” for President Obama has inspired some creativity.

Yes Pecan!

Yes Pecan!

Today I received an email with a number of other possible names for a Bush flavor, to which I have added. In searching the web I came across the creative examples depicted above.  Please post your own!

Ben & Jerry created “Yes Pecan!” ice cream flavor for President Obama. They then asked people to fill in the blank to the following:

For George W. Bush, we should create “_________”. Here are some of their favorite responses:

1.      Grape Depression
2.      Abu Grape
3.      Cluster Fudge
4.      Nut’n Accomplished
5.      Iraqi Road
6.      Chock ‘n Awe
7.      WireTapioca
8.      Impeach Cobbler
9.      Guantanmallow
10.    imPeachmint
11.    Good Riddance You Lousy Motherfucker. Swirl
12.    Heck of a Job, Brownie!
13.    Neocon Politan
14.    RockyRoad to Fascism
15.    The Reese’s-cession
16.    Cookie D’oh!
17.    The Housing Crunch
18.    Nougalar Proliferation
19.    Death by Chocolate. and Torture
20.    Credit Crunch
21.    Country Pumpkin
22.    Chunky Monkey in Chief
23.    George Bush Doesn’t Care About Dark Chocolate
24.    WM Delicious
25.    Chocolate Chimp
26.    Bloody Sundae
27.    Caramel Preemptive Stripe
28.    I broke the law and am responsible for the deaths of thousands – with nuts.

My additions:
29.    Orange Alertalicious
30.    Saddamcicle
31.    Waterboard Crunch
32.    Shot by Cheney Dough-Crunch
33.    WMD (With Mounds and Devil Dogs, but when you look inside its just plain vanilla!)


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Robert Prechter of Elliot Wave

February 27, 2009

Prechter is a near term bull, calling earlier in the week for shorts to cover.

NEW YORK (Reuters) – U.S. stocks will remain in a bear market for years as company earnings shrink further, and the S&P 500 could fall by half from current levels even though there could be a sharp short-term rally soon, Robert Prechter, who had forecast the 1987 market crash, said on Friday.

“My long term opinion is that the bear market has several years left to run, and stock prices will go a lot lower,” Prechter, chief executive officer at research company Elliott Wave International, said in a telephone interview. “So any rally that happens is going to be a bear market rally.”

The S&P this week broke below 745 points — 19 months after Gainesville, Georgia-based Elliott Wave International had recommended shorting the benchmark index down to that level.

Now, Prechter said, the S&P index could fall by half from these levels over the long term, although he declined to give a specific forecast.

“We are less than halfway through it price-wise,” he said. “The market is still overvalued, one reason being that companies continue to lower earnings.”

But near term, the risk of a kneejerk rebound in stock prices has risen.

This week Prechter recommended closing out the short position recommended on the S&P 500 back in 2007, because too many investors are now betting that prices will drop.

“The bear side has gotten a bit crowded in the stock market,” Prechter said, but said this is a short term strategic view only.

On Friday morning, the S&P 500 fell to a 12-year low around 735 points, mauled by deepening worries about the banking system and government data showing the deepest quarterly contraction in the U.S. economy since the early 1980s.

NO GLITTER IN GOLD

Prechter now advocates betting on a decline in precious metals, after investors fearful about the safety of their money amid the biggest global financial crisis since the Great Depression have piled into the classic safe haven of gold in recent weeks, boosting its price.

On Monday, Prechter forecast that gold had just peaked, at $1,000 an ounce.

“Gold and silver should go significantly lower,” he said. “Too many people now think owning them is a good idea. Remember when everybody thought owning real estate and stocks was a good idea?”

Gold, which briefly topped the $1,000 mark last week on escalating fears about the deeply impaired state of debt-burdened banks, has since slipped to about $950. Gold hit “an important intermediate term peak,” at $1,000, Prechter said.

“Again, nothing is certain, but I like betting against crowds. And we have had so many to bet against in recent years: real estate, stocks, subprime mortgages, The New Economy, oil, collectibles, commodities, baseball salaries, and now silver and bonds. It’s been a smorgasbord of opportunity,” Prechter said.

In addition, Prechter has a pessimistic outlook on U.S. government bonds.

“Treasury bonds have started a bear market,” over the longer term, he said.

“Several scenarios could unfold to explain why: one of them is that government borrowing demands could go up and up and creditors could demand higher yields,” he said. The U.S. government is expected to issue some $2 trillion of debt this year.

Fixed-income analysts have been stepping up warnings that over recent months that gargantuan government bond issuance to pay for financial rescue efforts may push yields, which move inversely to prices, steeply higher. The 10-year yield traded one percentage point its five-decade trough on Friday, at 3.04 percent.

But Prechter, as he originally urged in his 2002 book “Conquer the Crash,” which warned of the dangers of a U.S. debt bubble and deflationary depression, continues to favor safer cash proxies such as Treasury bills.

“It’s a deflationary environment. Safe cash equivalents are still where you want to be,” he said. “I am still in favor of (U.S.) T-bills,” he said. “The dollar bull market has more to run. That is one reason to hold them.”

Source:
Stocks bear market has years to run: Prechter
John Parry, Reuters, February 27, 2009
http://www.reuters.com/article/hotStocksNews/idUSTRE51Q48420090227?sp=true


Bottoms

February 27, 2009

So if the television show Flip that House marked the top of the housing and credit bubbles, then I predict that when we finally get a television talk show for one of our doomsayers like Nouriel Roubini or Nassem Taleb we will undoubtedly be at or just passed a bottom.


Jobless Rolls Swell To More Than 6.5 Million

February 27, 2009

From Morning’s with NPR & Alex:

Mornings with NPR: Jobless Rolls Swell To More Than 6.5 Million

Mornings with NPR: Jobless Rolls Swell To More Than 6.5 Million

Jobless Rolls Swell To More Than 6.5 Million
Alessandra Olanow, Mornings With NPR, February 19, 2009
http://morningswithnpr.blogspot.com/2009/02/jobless-rolls-swell-to-more-than-65.html


Stick ’em Up!

February 26, 2009

Did anyone catch this a couple of weeks back?  Apparently the republican fearing state of Vermont has taken Eminent Domain to a new level.  Funny to note who the primary taxpayer is.

MONTPELIER — The unorganized town of Glastenbury has amassed an impressive property-tax surplus, despite its sparse population.

The $254,000 reserve, funded by six full-time residents and a handful of seasonal dwellers, has accrued at a rate of about $20,000 annually over the past decade or so.

Now the state of Vermont would like to take it….

…One Glastenbury home, a multimillion-dollar mansion, accounts for close to three-quarters of all property tax revenue raised there. The home is owned by Robert Scott, the former president and chief operating officer of Morgan Stanley. [More]

Source:
Vt. wants to seize surpluses
Peter Hirschfeld, Vermont Press Bureau, January 22, 2009
http://www.rutlandherald.com/article/20090122/NEWS04/901220382/1004/NEWS03


Rolling Papyrus: The Mighty Joint

February 25, 2009

Big news today when it was announced that California might be considering legalizing marijuana to raise over $1 billion in badly needed tax revenue.  A Reuters Blog article by James Saft offers a fairly nice take on the announcement some excerpts are below.

…Want to help fund the bank bailout, ease California’s budget crisis and shore up strained U.S. finances? Legalize drugs, tax the trade and save on interdiction, domestic enforcement and the prison and court system….

…After all, it certainly helped Franklin Delano Roosevelt, who legalized alcohol in 1933 in the midst of the Depression and after more than a decade of prohibition, thus bringing a half a billion in 1933 dollars into public coffers in the form of tax revenue. By 1936, alcohol taxes were 13 percent of Federal revenue….

…California Governor Arnold Schwarzenegger has a similar opportunity. He is facing a $42 billion budget deficit, his prisons are filled to bursting, in substantial part with people in on drug-related crime, and he will soon be forced by judicial edict to start freeing people. He also has an offer from a group call Let Us Pay Taxes, which claims to represent the marijuana industry and is willing to pay $1 billion annually in taxes if only he will legalize. No doubt they are low-balling.

The U.N. estimates the value of the U.S. cannabis market at $64 billion annually, while a paper by academics Jonathan Caulkins and Peter Renter calculates that about half of the costs of drugs are in one way or another attributable by factors linked to interdiction and its perils (click here to read Render’s paper in pdf format)….[More]

Of course tax revenue is only one angle here.  Proponents argue that there would also be significant savings on law enforcement for what now amounts to petty criminal possession.   Resources currently used to enforce marijuana laws could readily be redeployed to more critical security needs.

Of course if we really think outside the box, we could co-opt the Pentagon to support legalization.  After all this clip from History of the World Part One offers another view on marijuana as a strategic weapon. ;)

In case the embed is disabled you can click here to launch the video in a new window: Mighty Joint Video

Source:
A revenue and legalization lesson from FDR
James Saft, Reuters, February 25th, 2009
http://blogs.reuters.com/great-debate/2009/02/25/a-revenue-and-legalization-lesson-from-fdr/


Credit Default Swaps: Is Low Supply Lifting All Boats?

February 25, 2009

So in looking at CDS pricing across the board lately one could assume that systemic risks have risen just about everywhere.  However, spending a little time looking at the SOVR screen in Bloomberg, which offers both currency pricing and 5-year credit default swap pricing on sovereign debt, I began to wonder if the CDS market is still as efficient as it use to be.

I have no doubt that the credit quality of national issuers has been under pressure with the size and scope of the regional bank bailouts underway.  Rating agencies are of course talking of downgrading entire countries.  That said, seeing that CDS prices on US, Japanese or UK debt have risen over ten fold since 2007 has made me wonder if the probability of default by the largest economies is ten times higher, or if maybe it’s only five or seven times higher (arbitrary) and that maybe the balance is due to the fact that there are now less underwriters of the loosely regulated OTC derivatives market.

Between Lehman’ collapse, AIG’s paralysis and effective collapse, shrinking hedge funds, and other counterparties, it occurred to me that a portion of the price inflation for credit protection may be attributable to supply constraints.

I would love to see some buonafide research on this.  If anyone knows of any, please let me know.

Bloomberg SOVR Screen 2.20.09

Bloomberg SOVR Screen 2.20.09