"The period of time starting in late October and ending on New Year's Eve, so named for the commercial tendency to put up Christmas displays before Halloween. See also Christmahanukwanzakah"
Wednesday, October 31, 2007
Sunday, October 28, 2007
Just the Numbers: Week 43
THE NUMBERS
The race continues to narrow.
Thompson's numbers finally break to the downside.
Gore's numbers fall off. Huckabee gets a boost, including as VP nominee, from winning so-called "Values Voters" poll from FRC gathering.
Clinton appears to be dominating in Iowa and New Hampshire.
The Senate Republican candidates are showing as favorites, in Alaska, Idaho, New Mexico, Maine, Oregon, and Minnesota. Louisiana and New Hampshire are in a dead heat.
THE STRATEGIES
Not any special insights this week.
Picking the losers has been a sucessful adventure on this blog. With the breakdown in the Thompson and McCain figures, following those strategies would have netted over 20% each. Selling the combo early on of Hagel, Gingrich, Huckabee, Gore, Edwards, Biden, Clark has netted some 12% before trading costs, which is more than the U.S. stock market this year, it seems.
You can double your money is you bet on Clinton to win the nomination, but think that she will lose the general election.
| 2007 Week 43: Brownback withdraws as Colbert announces; GOP Candidates before "Values Voters Summit"; firestorms in California draw focus;  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IMPORTANT DISCLAIMER: this is just an informational note and not a solicitation or recommendation to buy or sell securities and there is no guarantee implied and people can lose all money on all investments. Numbers are believed to be correct, but do your own math and make your own conclusions or consult with an advisor before making any decisions.
| Caucus/Candidate | Pr (%) | Chg Wk. | bid-ask |
|---|---|---|---|
| Iowa Caucus | |||
| Democratic | |||
| CLINTON | 66.1 | 15.1 | 13% |
| OBAMA | 20 | 2.5 | 20% |
| EDWARDS | 5 | -5 | 198% |
| FIELD | 0 | 0 | n.m. |
| GORE | 1 | -9 | n.m. |
| Republican | |||
| ROMNEY | 67 | 5 | 6% |
| GIULIANI | 1.5 | -8.5 | n.m. |
| THOMPSON(F) | 5.1 | -5 | 96% |
| FIELD | 3 | -3.2 | 223% |
| MCCAIN | 1.5 | 0.5 | n.m. |
| New Hampshire Primary | |||
| Democratic | |||
| CLINTON | 82 | 8 | 9% |
| OBAMA | 10 | -2 | 50% |
| EDWARDS | 1 | 0.5 | n.m. |
| FIELD | 0.2 | 0 | n.m. |
| GORE | 6 | 4 | 67% |
| Republican | |||
| ROMNEY | 50.3 | 0.3 | 19% |
| GIULIANI | 33 | -2 | 5% |
| THOMPSON(F) | 0.2 | 0.1 | n.m. |
| FIELD | 5.5 | 2 | 76% |
| MCCAIN | 7.5 | 2 | 96% |
| South Carolina Primary | |||
| Democratic | |||
| CLINTON | 71 | 6 | 13% |
| OBAMA | 20 | 0 | 50% |
| EDWARDS | 0.5 | -4.5 | n.m. |
| FIELD | 0.1 | 0 | n.m. |
| GORE | 2 | 1.9 | 400% |
| Republican | |||
| ROMNEY | 10.3 | 1 | 62% |
| GIULIANI | 35.3 | 0 | 27% |
| THOMPSON(F) | 40 | -5 | 3% |
| FIELD | 4.6 | 3.6 | 96% |
| MCCAIN | 2 | -1.3 | 385% |
| Florida Primary | |||
| Democratic | |||
| CLINTON | 80 | 80 | 6% |
| OBAMA | 10 | 0 | 50% |
| EDWARDS | 0.2 | 0 | n.m. |
| FIELD | 0 | 0 | n.m. |
| GORE | 0.1 | -6 | n.m. |
| Republican | |||
| ROMNEY | 2.5 | 1.5 | 240% |
| GIULIANI | 67 | 3 | 4% |
| THOMPSON(F) | 20.1 | -9.9 | 48% |
| FIELD | 3.9 | 2.9 | 28% |
| MCCAIN | 1 | 0 | n.m. |
| Nevada Primary | |||
| Democratic | |||
| CLINTON | 76 | 1 | 5% |
| OBAMA | 5 | 0 | 180% |
| EDWARDS | 5 | 0 | 80% |
| FIELD | 0.1 | 0.1 | n.m. |
| GORE | 5 | 0 | 200% |
| Republican | |||
| ROMNEY | 20.3 | 5 | 46% |
| GIULIANI | 45.3 | 10.3 | 21% |
| THOMPSON(F) | 20 | 20 | 63% |
| MCCAIN | 1 | 0.8 | n.m. |
Thursday, October 25, 2007
Lube Job
OIL Price rise and the impact to oil exporting countries.
| Wealth Transfer to Top World Oil Net Exporters, 2005*, $ Billion | |||||||
| Country | Net Oil Exports | 2004 | 2005 | 2006 | 2007 | Total | |
|---|---|---|---|---|---|---|---|
| 1) | Saudi Arabia | 9.1 | 36 | 79 | 113 | 136 | 364 |
| 2) | Russia | 6.7 | 27 | 58 | 83 | 100 | 268 |
| 3) | Norway | 2.7 | 11 | 24 | 33 | 40 | 108 |
| 4) | Iran | 2.6 | 10 | 23 | 32 | 39 | 104 |
| 5) | United Arab Emirates | 2.4 | 10 | 21 | 30 | 36 | 96 |
| 6) | Nigeria | 2.3 | 9 | 20 | 28 | 34 | 92 |
| 7) | Kuwait | 2.3 | 9 | 20 | 28 | 34 | 92 |
| 8) | Venezuela | 2.2 | 9 | 19 | 27 | 33 | 88 |
| 9) | Algeria | 1.8 | 7 | 16 | 22 | 27 | 72 |
| 10) | Mexico | 1.7 | 7 | 15 | 21 | 25 | 68 |
| 11) | Libya | 1.5 | 6 | 13 | 19 | 22 | 60 |
| 12) | Iraq | 1.3 | 5 | 11 | 16 | 19 | 52 |
| 13) | Angola | 1.2 | 5 | 10 | 15 | 18 | 48 |
| 14) | Kazakhstan | 1.1 | 4 | 10 | 14 | 16 | 44 |
| 15) | Qatar | 1 | 4 | 9 | 12 | 15 | 40 |
| Grand Total: | 1,595 | ||||||
| *Table includes all countries with net exports exceeding 1 million barrels per day in 2005. Price rise is increase from an assumed $25/bbl refiner's acquisition cost in 2002, which is a conservative estimate. | |||||||
Tuesday, October 16, 2007
Oscar Wilde - Britain's Top Wit By Vote
And the popular plurality goes to:
LONDON (Reuters) - Playwright Oscar Wilde, who even managed to mutter on his death bed "Either those curtains go or I do," was named in a poll on Monday as Britain's greatest wit.
He captured 20 percent of the vote, just two points ahead of comedian Spike Milligan, who had engraved on his tombstone the epitaph "I told you I was ill."
Winston Churchill said: "Bessie, you're ugly. And tomorrow morning I will be sober but you will still be ugly."
Noel Coward: "Wit ought to be a glorious treat like caviar. Never spread it about like marmalade."
Margaret Thatcher, once quipped: "Being powerful is like being a lady. If you have to tell people you are, you aren't."
Sunday, October 14, 2007
Apple Cider Doughnuts
Some lovelies from yesterday's escapades.
The best time of year!
(if you need a bit of the country, click on pic for drooling priviledges)
More:
Just the Numbers: Week 41
THE NUMBERS
Edwards is slipping. Huckabee looks topped out, but remains strongly bid for VP. McCain is flat.
The race has narrowed more on democratic side.
Because of his strong organization in Iowa, one wonders how the existence of the Edwards campaign will affect the results, if he keeps Obama, who appears to be the main rival stil, from building any momentum in that state.
The contracts continue to suggest four senate seats in play, two because of resignations: Colorado, Virginia, New Hampshire, and Nebraska. So far, the markets are deeply confused about a replacement for Senator Pete Domenici.
THE STRATEGIES
Nothing new. Bets against Thompson and, now, Gore, as his contract ticks up to 11%, look like reasonably profitable for the risk.
The race narrows. The joint probability of any combo in the "finals" of Clinton, Romney, Giuliani, or Obama rises to the highest yet (just over 70%), lowering payoffs (to below 30%).
| 2007 Week 41: Gingrich finds no money and says he will not run; GOP debate economics in Michigan; Ads make Romney look ever more contradictory; Senate battles heat up as the Collins campaign in Maine gets called on nastiness; President vetos health bill for kids; Non-candidate Gore wins Nobel Peace Prize, sending Reaganites into a tailspin (and probably Bill Clinton, too). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IMPORTANT DISCLAIMER: this is just an informational note and not a solicitation or recommendation to buy or sell securities and there is no guarantee implied and people can lose all money on all investments. Numbers are believed to be correct, but do your own math and make your own conclusions or consult with an advisor before making any decisions.
| President Parley | Pr (%) | Chg Wk. | bid-ask |
|---|---|---|---|
| CLINTON-GIULIAN | 25 | -3 | 52% |
| CLINTON-ROMNEY | 15 | -1 | 30% |
| CLINTON-THOMP | 15 | 0 | 17% |
| OBAMA-GIULIANI | 7 | 0 | 43% |
| GORE-GIULIANI | 3.9 | 0.9 | 79% |
| OBAMA-THOMP | 3 | 0 | 167% |
| CLINTON-McCAIN | 3 | 0 | 167% |
| GORE-ROMNEY | 2 | 2 | 100% |
| Caucus/Candidate | Pr (%) | Chg Wk. | bid-ask |
|---|---|---|---|
| Iowa Caucus | |||
| Democratic | |||
| CLINTON | 51 | -9 | 16% |
| OBAMA | 17.5 | 0.8 | 14% |
| EDWARDS | 10 | -5 | 30% |
| FIELD | 0 | 0 | n.m. |
| GORE | 10 | 4.9 | 100% |
| Republican | |||
| ROMNEY | 62 | 2 | 12% |
| GIULIANI | 10 | 0 | 88% |
| THOMPSON(F) | 10.1 | 0.1 | 45% |
| FIELD | 6.2 | 0.2 | 56% |
| MCCAIN | 1 | 0 | n.m. |
| New Hampshire Primary | |||
| Democratic | |||
| CLINTON | 74 | -1 | 19% |
| OBAMA | 12 | 2 | 66% |
| EDWARDS | 0.5 | 0.4 | n.m. |
| FIELD | 0.2 | 0 | n.m. |
| GORE | 2 | -7.7 | 1405% |
| Republican | |||
| ROMNEY | 50 | 7 | 15% |
| GIULIANI | 35 | 7 | 13% |
| THOMPSON(F) | 0.1 | -9.9 | n.m. |
| FIELD | 3.5 | -3.7 | 149% |
| MCCAIN | 5.5 | 0.5 | 58% |
| South Carolina Primary | |||
| Democratic | |||
| CLINTON | 65 | 5 | 15% |
| OBAMA | 20 | -5 | 49% |
| EDWARDS | 5 | 0 | 194% |
| FIELD | 0.1 | 0.1 | n.m. |
| GORE | 0.1 | -5 | n.m. |
| Republican | |||
| ROMNEY | 9.3 | 0.3 | 58% |
| GIULIANI | 35.3 | 10.3 | 27% |
| THOMPSON(F) | 45 | -3 | 10% |
| FIELD | 1 | 0 | n.m. |
| MCCAIN | 3.3 | -1.7 | 194% |
| Florida Primary | |||
| Democratic | |||
| CLINTON | 0 | -80 | n.m. |
| OBAMA | 10 | -0.1 | 50% |
| EDWARDS | 0.2 | 0.2 | n.m. |
| FIELD | 0 | 0 | n.m. |
| GORE | 6.1 | 1 | 884% |
| Republican | |||
| ROMNEY | 1 | 0.9 | n.m. |
| GIULIANI | 64 | 9 | 7% |
| THOMPSON(F) | 30 | -5 | 32% |
| FIELD | 1 | 0.9 | n.m. |
| MCCAIN | 1 | 0.2 | n.m. |
| Nevada Primary | |||
| Democratic | |||
| CLINTON | 75 | 5 | 7% |
| OBAMA | 5 | 0 | 200% |
| EDWARDS | 5 | 0 | 200% |
| FIELD | 0 | 0 | n.m. |
| GORE | 5 | 0 | 200% |
| Republican | |||
| ROMNEY | 15.3 | 3.3 | 552% |
| GIULIANI | 35 | 0 | 28% |
| THOMPSON(F) | 0 | -40 | n.m. |
| MCCAIN | 0.2 | 0 | n.m. |
Wednesday, October 10, 2007
Working Class Stiffs
As the President lauds those who work 2+ jobs, just to make ends meet, as "uniquely American", comes this that those in his own party simply are too tuckered out for that:
GOP congressmen quit because of five-day work week.
Nine Republican congressmen have so far announced that they will not be running for re-election. One of those lawmakers, Rep. Ray LaHood (R-IL), complained “that the Democrats’ new five-day workweek” is part of the reason they’re all retiring:
“I do think the schedule and the flying is a huge pain for people, particularly those who are from the Midwest or even further West,” he said, adding that it’s “probably the worst part of the job.”
“I think that has played into these retirement announcements,” said the seven-term congressman from Peoria.
In Dec. 2006, Rep. Jack Kingston (R-GA) also griped about having to work five days each week, stating, “Marriages suffer. The Democrats could care less about families — that’s what this says.”
Look Ma, a Nobel
Nobel Prize for applied physics. Gosh, pretty soon anyone will be able to win.
Just kidding. Basically, they figured out how to wave little magnetic wands to cast big spells and became the fathers of nanotechnology. One could have a worse fate.
Monday, October 8, 2007
Financial Crises: Over-reacting to Over-reactions
Scanning through uber financial historian Harold James recent piece, at least two thoughts come to mind.
NO OUNCE OF PREVENTION, NO PRUDENCE SUFFICIENT?
In most cases, history's lesson is that the risks that are not watched are the ones that get out of hand.
I don't think all financial crises are 'unknowable'. It may simply be that they are unpreventable. This seems to me the conclusion that Alan Greenspan came to following his 'irrational exuberance' speech, following which he was severely browbeaten by Wall Street.Most financial crises are happening in plain sight. The ability of Wall Street to manufacture junk credit may be put under the rubric of "financial innovation", or one could find a more descriptive name. It doesn't seem to fall in line with something like checking accounts or consumer credit cards. Ranking CDO's as investment grade when maybe they weren't doesn't seem to count as "innovation" or "innovation related", does it?
HIDDEN RISKS, NOT UNKNOWN RISKS
In many cases, history's lesson is that the risks that are not watched are the ones that get out of hand. The most telling tidbit from Greenspan's recent testimony isn't that the Board didn't know about the risks of sub-prime. Clearly, they did (even by admission). Theoretically, one approves of such things (I do). But the sub-prime market, as an innovation, had been through 'tough times' before, with so-called "manufactured home" defaults, among at least two cycles (that I know).
No, the most telling tidbit is that they didn't realize the magnitude of the lending that was going on. This was partly because those doing the lending were outside the ambit of those doing the watching. In other words, Q.E.D.
DOING NOTHING
Many, if not most, crises involve some sort of panic, which one might describe as "accelerating risk aversion".
It's important that the financial systems themselves do not contribute. Orderly markets should be maintained, if they can be. There are things 'to do' to make that possible.
Fear feeds on lack of transparency, which lends itself to rumor and exaggeration. Efforts to put a floor under the market, to make key variables transparent (like coming clean on the size of problems or the details of risk-burden sharing, etc.) are things to do.
Betting on one side, as many central banks have tried to do during currency crises, for example, might be a waste. Same for maintaining artificial (non-economic) restraints or props, like the gold standard.
Sometimes shutting down the markets has proved to be workable. The redux of the Asian financial crisis smiled favorably on Malyasia, who shut down currency speculation in a anti-liberal way. In Hong Kong, they monetized the market in order to protect values from panic. That might seem like medicine that would kill you, but one can see positive effects. Which suggest that savvy is part of the equation, as much as some would like an on-balance assessment for ... being impervious to crisis.
Theoretical Biology: Your Appendix is Now Referenced
Did you know that there was a Journal of Theoretical Biology?
An article they've published suggests that the vestigial appendix is not ... not vestigial.
Billions of bacteria apparently feel that justice has been served.
The Joys of Being Dictatorially Irrelevant
Someone wrote about the joys of being cost irrelevant, during the budgeting process.
Our man Nazarbayev.
Sunday, October 7, 2007
Portrait of the Artist as a Young Man ... Literally
Technology amok with our imaginations? A pro uses software to find out that the young William Shakespeare looked like the young Daniel Radcliffe:
Political Tragedies: Ongoing, 21st Century
Here is the system the military dictatorship of Burma/Myanmar is killing people to keep in place:
(h/t Johan Norberg)Political rights: 7, the lowest possible (Freedom House)
Civil liberties: 7, the lowest possible (Freedom House)
Press freedom: 164 of 166 countries (Reporters Without Borders)
Freedom from corruption: 179 of 179 countries (Transparency International)
Economic freedom: 140 of 141 countries (Economic Freedom of the World)
Tax Cuts and Job Growth
It doesn't always work out the textbook way.
Paul Krugman dissects the White House's spin.
Tuesday, October 2, 2007
Inflation Risk Premium Conundrum?
How has the Bush Administration been doing with the inflation risk premium?
It turns out that it is not as bad as one might expect, another extension of the Greenspan-dubbed 'conundrum'. Either that or inflation hedging tools have gotten to the point where people can lay off the risk and it's not in the numbers completely (not so likely).
One can compare the real rates observed from the Treasury's Inflation Protected Securities (TIPs) to the real rates implied by a difference between nominal interest rates and some measure of inflation, typically the CPI.
The difference between the rates might be explained as a combination of the all-important inflation risk premium and the difference between true inflation expectations and the CPI inflation measure used in the calculation. To short-hand it, I'll just call this whole quantity the "inflations expectations risk premium" (IERP), which is a nonsense term that somehow seems to still convey the quantity's essence.
The first thing to note is that real rates have been trending up. Until the last quarter of 2005, say, they were below 2%, in the range of 0.5%-2.0%; and they are now back above 2%, in the range of 2-2.5%. Trend lines for both the 5-yr and 10-yr are positive, so it's not just a flattening of the yield curve over the period. (Gone are the days when one could get a 4% real yield on offer with TIPs. The rise in real-rates is a reminder that investors can lose money in TIPs, over certain intervals.)
The second thing to note is that the trend IERP is flat. Under adverse circumstances, one might reasonably expect both a rising risk inflation-risk premium and expectations of future inflation rate ahead of the current measured inflation rate. So, a flat IERP is good news, but also part of the "conundrum".
The IERP bounces around in its range, mostly with an average of about 0.5% and a standard deviation of circa 0.65%. (The fact that its volatility doesn't appear to be diminishing suggests that real rates may continue to be less volatile than nominal rates).
The latest IERP reading is below average, negative (just barely), and low (more than one standard deviation from its period average - a range of +/- 1 deviation is highlighted on the chart). Based on that, one might easily conclude that the bond markets are not expecting any accelerating inflation and, in fact, may be expecting either higher nominal rates or lower realized inflation (of about 0.5%, the amount that the current IERP reading is below its period average).
The impact of the latest Fed easing has been very small.
inflation and inflation 6-month moving average is in red; stair-step is Fed Funds rate; rate line collection in the middle are TIPs (with black trend line), the rate line collection beneath is the "IERP", with one standard deviation corridor in whitewash centered around the flat, IERP trendline shown in black.
src: US Treasury, BLS
Subscribe to:
Posts (Atom)
