Archive for April, 2009

  • Wall Street Imitates the Simpsons
    , April 16th, 2009 at 11:46 am

    Selma on the Simpsons in 1994

    Hey, relax. I told you, I got money. I bought stock in a mace company just before society crumbled.

    The WSJ today:

    Fear and Greed Have Sales of Guns and Ammo Shooting Up

  • Baxter and Amphenol
    , April 16th, 2009 at 11:21 am

    Two of our Buy List stocks reported earnings this morning, and they were both pretty good.
    Amphenol (APH) earned 43 cents a share down from 54 cents a share last year. They had a two-cent benefit, so the 41 cents was a penny better than expectations (though FactSet said consensus was 39 cents. Hmm. No consensus on consensus).
    Revenue fell 14.4% to $660 million which was a bit better than the $654.8 million consensus. The company sees Q2 EPS coming in between 41 and 43 cents, and revenues between $660 million and $675 million. The stock seems a bit pricey right now, but terribly overpriced.
    The other earnings report came from Baxter International (BAX). First-quarter EPS came in at 83 cents which is a nice improvement from 67 cents a year ago. Sales actually fell 1.8% but if you discount currency moves, they were really up about 6%.
    For the year, BAX sees EPS coming in between $3.72 and $3.78. They raised the low end by two cents. For Q2, they see earnings in a range of 93 cents to 95 cents a share.
    Both stocks are doing well this morning.

  • To All the Goldman H8trs
    , April 16th, 2009 at 11:05 am

    Seesh, why all hate on Goldman (GS) lately? Face it, Goldman is going to thrive and survive. I’ve never seen an institution that so many people admire yet want to fail at the same time. OK, maybe second to the Yankees.
    Their orphan quarter wasn’t some secret conspiracy. It was perfectly public. The Feds forced them to be a bank holding company so they changed their fiscal year, presto four-month reporting.
    Just because it’s a large, powerful, filthy rich and highly opaque bank that seems to run the government is no reason to fear them.

  • JPMorgan Chase Is Still Ticking
    , April 16th, 2009 at 10:50 am

    The other day I said I had no idea what JPMorgan Chase’s (JPM) earnings would be. It turns out, my prediction was correct. The bank earned over $2.1 billion for the first three months of the year, or 40 cents a share.
    The news is reporting that the Street’s consensus was for 32 cents a share. That was the average, but analysts were all over the map. I think the Street is just happy to see a profit — any profit. I should remind you that JPM hasn’t posted a single earnings loss during this mess. For last year’s Q1, they made 67 cents a share.
    The best news is that banking isn’t dead. The bank said that loan losses will continue growing from credit cards and mortgages. The Bear and WaMu acquisitions are clearly helping out. It’s kinda cool when your trading can make up for all the bad stuff.
    Jamie Dimon said JPM wants to pay back its TARP money as soon as they can. He also said that the bank will sit out Timmy’s little public/private plan. If JPM won’t bite, who else will?

  • Regulators and Redskins
    , April 15th, 2009 at 8:39 pm

    Rational expectations:

    We examine the correlation between federal government activity and the performance of the D.C. area’s National Football League team, the Washington Redskins. We find a significantly positive, non-spurious, and robust correlation between the Redskins’ winning percentage and the amount of federal government bureaucratic activity as measured by the number of pages in the Federal Register. Because the Redskins’ performance is prototypically exogenous, we give this surprising result a causal interpretation. Drawing upon public choice theory and behavioral economics, we provide a plausible explanation for the causal mechanism: bureaucrats must make “logrolling” deals in order to expand their regulatory power, and a winning football team acts as a commonly shared source of joyous optimism to lubricate such negotiations. We do not find the same correlation when examining Congressional activity, which we attribute to legislator loyalty to their home state’s team(s).

    (HT: Ribstein.)

  • I’m Sorry But I Just Don’t Get Seasteading
    , April 15th, 2009 at 4:52 pm

    Here’s another Tax Day post.
    As person who enjoys highly theoretical or just plan off-the-wall propositions, it pains me to say that I just don’t get seasteading.
    If you’re not familiar with it, this is a radical libertarian venture that aims to build libertarian city-states…are you ready…floating on the high seas. Think of John Galt, but on a raft.
    I don’t want to be too dismissive of seasteading. Here’s Patri Friedman making the case.
    For myself, count me out. First, I do in fact love my country and feel loyalty to it no matter how batty its laws are. Secondly, I share Arnold Kling’s thought that a lot problems we have on land will follow them at sea.
    Still, I think dry land is the way to go. I would try to hunt for some speck in the Pacific Ocean. There are about a billion islands out there just waiting to be made into a libertarian paradise. Come to think of it, I never saw much government on Gilligan’s Island or Lost.
    The U.S. has a bunch of possessions out there. So do France and Britain. Why not try to buy one? The Northern Mariana Islands have a couple of uninhabited islands (see Pagan Island).
    Even if you don’t want to buy one, just go there and set up your own community. When someone official starts to bother you, do what everyone else does—secede. Sure, that will involve some government, but probably less than running a big boat.

  • The Libertarian Way to Fight Pirates
    , April 15th, 2009 at 1:21 pm

    In Article I, Section 8 of the Constitution, Congress has the power to issue Letters of Marque. As I understand it, this is an authorization from a government to individuals to let them seize assets from a foreign ship. “Here (scribble), go nuts.”
    I always thought this was some curio still left in the Constitution. I even joked with a friend recently that this would be the best way to fight the pirates.
    I joked too soon. I give you, Ron Paul:

    Rep. Ron Paul (R-Texas) has called for the use of congressional letters of marque to allow private security forces to patrol international waters and assume liability for such operations.
    “The whole mess over there is a reflection of our foreign policy as well because we’ve been involved in Somalia for a long time,” Paul said on Fox News on Wednesday.

    I wonder if it would apply to blimps. Shouldn’t they be Emails of Marque? So many questions. Anyway, Happy Tax Day.

  • Taleb Idiocy Watch
    , April 15th, 2009 at 11:05 am

    I hope to be credited as the person who starts this. Mark my words: More people are going to realize that Mr. Black Swan/Napoleon Dynamite has no idea what he’s talking about.

    Private-equity firms and the stock market share characteristics of Ponzi schemes, “Black Swan” author Nassim Nicholas Taleb said.
    Leveraged buyouts, the principal tool of private-equity investing, and buying stocks on margin should be restricted for the protection of small investors and the economy, Taleb said in a Bloomberg Television interview.
    “We want economic life to be organized to be as distant from that Madoff model as we can,” Taleb said, referring to Bernard Madoff, who pleaded guilty last month to directing the largest Ponzi scheme, bilking investors of about $65 billion.
    LBOs are “too close to Madoff” because “you rely on new investors to pay off the other ones,” Taleb said. “The stock market has some mild Ponzi characteristics. We have to make sure that innocent people are not harmed by this Ponzi-attribute.”
    The financial system needs to be simple because regulators can’t protect investors from complex financial products, Taleb said.
    “Regulators are fundamentally dumb,” he said. “Traders will go around them. I want the system where regulators can be stupid without you and I being harmed by it.”

    (EP and Joe W have more).

  • Audi Vs. BMW
    , April 15th, 2009 at 9:50 am

    car-wars.jpg

  • The Last Five Years In One Chart
    , April 14th, 2009 at 10:51 pm

    Here are the daily changes of the S&P Banking Index:
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