Remember what I said about Niall Ferguson some time ago?
[url]http://www.ritholtz.com/blog/2012/08/open-mouth-insert-foot-going-viral/[/url]

[QUOTE=garo;308830]Remember what I said about Niall Ferguson some time ago?
[url]http://www.ritholtz.com/blog/2012/08/open-mouth-insert-foot-going-viral/[/url][/QUOTE]

Ferguson committed a gaffe (and one indicative of partisan bias, which is a big red flag in this era of bipartisan ponzi-financial douchebaggery) ... but Invictus also makes a highly dubious claim about the relative "strength" of private-sector emplyment gains in the current "recovery":
[quote]At 3:55 into the clip, Sara asks Ferguson about the private sector job gains versus the massive public sector job losses we’ve seen under Obama. (I’d add, as Sara alluded to, that this private sector recovery continues to exceed what we saw in the last two recessions, as I first wrote about [url=http://www.ritholtz.com/blog/2010/09/it-was-the-best-of-times-it-was-the-worst-of-times-yup/]two years ago[/url].)[/quote]
Invictus is using a carefully selected starting point and seasonally-adjusted data series of the same kind which indicate the unemployment rate has dropped to around 8% ... I find those kind of massaged data to be highly misleading, although in a way the Keynesians and callers-for-more-stimulus like to see. To my mind, the best indicator of employment trends is the employment/population ratio, containing no black-box model fudgeery nor seasonal-factors bullshit, [url=http://data.bls.gov/timeseries/LNS12300000]also available at the BLS website[/url].

Set the beginning year at (say) 1982 to capture the [url=http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States]last 3 recessions[/url] (roughly 1990-1991, 2000-2002, 2007-2009 according to NBER), look at the resulting chart, and then tell me: what recovery? I see E/P ratio plunging hugely during 2008 and 2009 and recovering not one iota.

But the point remains. The job situation would have been a lot better if Obama did what the Republicans accuse him of - Big Government. If he had added federal jobs at the same rate as GWB unemployment would have been a lot lower.

[url=www.nytimes.com/2012/08/24/business/global/chinas-economy-besieged-by-buildup-of-unsold-goods.html?_r=1&ref=business]China Besieged by Glut of Unsold Goods[/url]: [i]GUANGZHOU, China — After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.[/i]
[quote]The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home. [/quote]With most of China's chief export markets either in or on the verge of recession, good luck with that.
[quote] The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government — all part of an effort to prop up confidence in the economy among business managers and investors.

But the main nongovernment survey of manufacturers in China showed on Thursday that inventories of finished goods rose much faster in August than in any month since the survey began in April 2004. The previous record for rising inventories, according to the HSBC/Markit survey, had been set in June. May and July also showed increases.

“Across the manufacturing industries we look at, people were expecting more sales over the summer and it just didn’t happen,” said Anne Stevenson-Yang, the research director for J Capital Research, an economic analysis firm in Hong Kong. With inventories extremely high and factories now cutting production, she added, “Things are kind of crawling to a halt.”

China is the world’s second-largest economy and has been the largest engine of economic growth since the global financial crisis began in 2008. Economic weakness means that China is likely to buy fewer goods and services from abroad at a time when the sovereign debt crisis in Europe is already hurting demand, raising the prospect of a global glut of goods and falling prices and weak production around the world.[/quote]
Mish has a complementary piece on the latest data and the clearly dire trend in China manufacturing data:

[url=http://globaleconomicanalysis.blogspot.com/2012/08/china-flash-manufacturing-pmi-at-9.html]China Flash Manufacturing PMI at 9-Month Low, New Export Orders Plunge at Sharpest Rate Since March 2009[/url]
[quote]Notice the sheer absurdity of the proposal: "Beijing must step up policy easing to lift infrastructure investment in the coming months".

China is loaded up with malls with no shoppers, trains with no passengers, and even entire cities where no one lives, and economists want or expect China to start more infrastructure projects.[/quote]

Mitt Romney has an OP-Ed in today`s WSJ, which ZeroHedge reprints for the the benefit of non-subscribers:

[url=www.zerohedge.com/news/mitt-romney-explains-what-he-learned-bain-capital]Mitt Romney Explains What He Learned At Bain Capital[/url]

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Obama to Europe: "What's good for my re-election campaign is good for Europe":

[url=www.independent.co.uk/news/world/europe/obama-asks-eurozone-to-keep-greece-in-until-after-election-day-8076852.html]Obama asks eurozone to keep Greece in until after election day[/url]
[quote]The Obama administration will pressure European governments not to let Greece fall out of the eurozone before November's Presidential elections, British Government sources have suggested.

Representatives from the International Monetary Fund, the European Central Bank and the European Commission are due to arrive in Athens next month to assess Greece's reform efforts.

They are expected to report in time for an 8 October meeting of eurozone finance ministers which will decide on whether to disburse Greece's next €31bn aid tranche, promised under the terms of the bailout for the country.

American officials are understood to be worried that if they decide Greece has not done enough to meet its deficit targets and withhold the money, it would automatically trigger Greece's exit from the eurozone weeks before the Presidential election on 6 November.

They are urging eurozone Governments to hold off from taking any drastic action before then – fearing that the resulting market destabilisation could damage President Obama's re-election prospects. European leaders are thought to be sympathetic to the lobbying fearing that, under pressure from his party lin Congress, Mitt Romney would be a more isolationist president than Mr Obama.

The President discussed the eurozone crisis with David Cameron during a conference call on Wednesday and both welcomed statements by the European Central Bank that it was "standing firmly behind the euro".

The ECB is expected to present a plan in the next few weeks to help indebted countries like Spain and Italy by buying their government bonds.[/quote]

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Chris Whalen marks the 5th anniversary of the collapse of housing-bubble dodgy-loan poster chile Countrywide Financial, which, along with the implosion of several MBS-heavy investment funds at HSBC and Bear Stearns, marked the onset of the subprime-triggered gloabl financial crisis:

[url=http://www.zerohedge.com/contributed/2012-08-23/happy-anniversary-countrywide-or-it-back-future]Happy Anniversary Countrywide! Or is it Back to the Future?[/url]

Note that global equity markets shrugged off the dire warning signs and kept right on climbing until late 2007. Compare that with the current bout of market complacency despite the Euro debt crisis and other "signs of yet another bout of government-abetted overleverage" in places like China and the U.S.

One of the reader comments has an interesting note about the sister of then-former and now-again CA governor Jerry Brown and CFC.

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[b]Friday Humor:[/b]

Is courtesy of a ZH reader who, commenting on the latest "strategic market-goosing Fed-leak to the WSJ", pens a faux-biblical "How to understand the Mind of Bernanke":
[i]
And He said : Thou shalt not hedge. And lo and behold, the market did rampeth, and the vol did evaporate and hardly a share was traded. And He saw this, and it was good.[/i]

[URL]http://news.yahoo.com/bain-documents-romney-offshore-investments-used-blockers-avoid-185957445--abc-news-topstories.html[/URL]

[QUOTE]The newly released documents rekindle questions about one of the more technical tax questions that has emerged about Romney's investments – the use of so-called "blocker" entities.[/QUOTE]Our accountant never mentioned this option to us.

:unsure:

Unwittingly hilarious non sequitur of the week comes [url=http://www.bloomberg.com/news/2012-08-29/september-offers-15-days-to-cement-crisis-solutions-euro-credit.html]from the mouth[/url] of "Super" Mario Draghi:
[quote]The ECB “[u]will always act within the limits of its mandate[/u],” Draghi wrote in a commentary for German newspaper Die Zeit provided by the Frankfurt-based ECB yesterday. “Yet it should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools.” [/quote]
Translation: "beyond standard monetary policy tools" = "beyond our mandate". The ECB has been operating well outside its mandate almost nonstop for several years now.

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Pair of articles on the sudden and "unexpected" end of the resources-driven boom in Australia:

[url=http://www.zerohedge.com/news/kangaroo-metals-mine-fortescue-trying-raise-15-billion-20-banks-iron-prices-implode]The Kangaroo In The Metals Mine: Fortescue Trying To Raise $1.5 Billion From 20 Banks As Iron Prices Implode[/url]

[url=www.theage.com.au/business/warning-after-boom-itll-be-dutch-and-go-20120829-2510q.html]Warning: after boom it'll be Dutch and go[/url]: [i]Australia faces a run on its currency, a deeper collapse in housing prices and a bank funding crisis to rival Europe's as it tries to come to grips with life after the mining boom, according to a report from a boutique US advisory firm.[/i]

This is accompanied by the usual lies about "deficits don't matter", "it's different here" and "our banks are strong" and denials by pols and sell-side "analysts":
[quote][U.S. advisory firm Variant Perception] says the Reserve Bank will come to come to the rescue of the big four Australian banks in a crisis because they are too important to fail.

But Australian analysts dismissed many of Variant's conclusions as nothing new. "They've discovered the current account deficit," said one. "We discovered it in the 1980s and got on with our lives.'' Annette Beacher, the head of Asia-Pacific research with TD Securities, said the analysis was selective.

''There are scant fundamental grounds for comparing Europe with Australia,'' she said. ''Australian banks loosened their prudential standards on home loans only very briefly in 2006-07, and certainly learnt their lesson for the subsequent commodity boom.''

She noted that Australian banks were extremely profitable and now far less dependent on overseas markets for funding.[/quote]
LOL@ "scant fundamental grounds" for comparing Oz with other post-bubble-hangover-afflicted countries: I guess strikingly similar basic economic metrics such as home prices vs incomes, economic-sector balance, over-reliance on a near-term asset-price boom, overleverage and capital misallocation at all levels amount to "scant" in Ms. Beacher's bubble-head.

[URL]http://news.yahoo.com/facebook-co-founder-sells-450-000-shares-203404246--finance.html[/URL]

:iceberg:

[QUOTE=Xyzzy;309822][URL]http://news.yahoo.com/facebook-co-founder-sells-450-000-shares-203404246--finance.html[/URL]

:iceberg:[/QUOTE]

He got over 5% more for the latest batch of shares he sold than if he had waited 'til today...and his pal Shugga -- that's my new gansta-rapper-style nickname for Mark Z, deriving from the German meaning of his last name, the Hebrew/Yiddish word "meshugga" for "crazy", as in "D00d, that post-IPO price action in FB shares has been meshugga lame", and of course the eponymous [url=http://en.wikipedia.org/wiki/Meshuggah]Swedish heavy metal band[/url] -- is now only worth $(N/2) billion (with N >> 1), poor guy.

------------------------------

A couple of BRIC-related pieces from this week's news:

[url=http://globaleconomicanalysis.blogspot.com/2012/08/china-flash-manufacturing-pmi-at-9.html]China Flash Manufacturing PMI at 9-Month Low, New Export Orders Plunge at Sharpest Rate Since March 2009[/url]

[url=http://www.bloomberg.com/news/2012-08-27/brezhnev-bonds-haunt-putin-as-investors-hunt-for-785-billion.html]Brezhnev Bonds Haunt Putin as Investors Hunt $785 Billion - Bloomberg[/url]

[url=www.bloomberg.com/news/2012-08-28/poor-in-india-starve-as-politicians-steal-14-5-billion-of-food.html]Poor in India Starve as Politicians Steal $14.5 Billion of Food[/url]

That last piece embodies the reason India is not going to become a global economic superpower any time soon: Very little of that newfound wealth has accrued to the bottom 90%, who are at the same time being robbed blind by a corrupt political class. Countries with that level of institutionalized corruption and wealth disparity have not fared well in the annals of economic history, at least not without a global-scale colonial looting operation to allow the kleptocrats to keep their own unwashed hordes semi-pacified.

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[b]Friday Funnies:[/b]

o Latest fad diet making the rounds: [url=http://www.zerohedge.com/news/friday-humor-gold-barbeque-relish]The Keynesian Diet[/url]. (Hilarious stuff, IMNSHO).

o [url=http://www.reuters.com/article/2012/08/27/us-usa-crime-amish-idUSBRE87Q07R20120827?feedType=RSS&feedName=domesticNews]Hate crimes. Amish-versus-Amish style[/url]

o This one is mainly for market followers (that is, all the HFT algos amongst our vast readership): This past Tuesday, a ZeroHedge reader penned the following "premonitory news story" about Bernanke's much-anticipated [url=http://market-ticker.org/akcs-www?post=210935]speech this morning[/url] at the annual [strike]confabulation of International Currency Counterfeiters[/strike] Fed conference at Jackson Hole:
[quote]August 31, 2012, Jackson Hole, Wyoming- In a surprise move today, Fed Chief Ben Bernanke calmed investor's fears by unveiling the Federal Reserve's latest program to calm investor's fears. Dubbed "Operation TotCon", the centerpiece of the new program involves taking the Federal Reserve public, with an IPO scheduled for late October. The central bank will trade under the symbol JACK. Market watchers were unclear as to whether the phrases "you ain't got JACK" and "you got JACK" would acquire new meaning. Quasi-paradoxically, the phrase "if you ain't got JACK, you got jack" may be true; however, the phrase "if you got JACK, you ain't got jack", may no longer be allowed. When asked about the motivation for this latest effort, Bernanke said, "for too long, the markets have been seen in a 'risk-on, risk-off' modality. With Operation TotCon, credit for prevailing market sentiment will be properly allocated, as we anticipate acknowledgment of a 'JACK-on, JACK-off' trade to carry the market predominantly forward." A Fed spokesperson who wished to remain anonymous, said that Operation Totcon will begin 2 days prior to the IPO by buying controlling interest in all publicly traded companies on the New York Stock Exchange. In a related story, the Obama administration announced today that "day trading on margin" would now qualify as acceptable as a work requirement for receiving welfare benefits.

At the time of this story, the DJIA had rallied 6,300 points in light trading.[/quote]

[QUOTE=ewmayer;309882]Countries with that level of institutionalized corruption and wealth disparity have not fared well in the annals of economic history, at least not without a global-scale colonial looting operation to allow the kleptocrats to keep their own unwashed hordes semi-pacified.[/QUOTE]Not recently, perhaps, but Egypt managed something like 1500 years, spread over 3000 years in total. Unlike the Romans, they didn't go in for foreign takeover bids.

[QUOTE=xilman;309911]Not recently, perhaps, but Egypt managed something like 1500 years, spread over 3000 years in total. Unlike the Romans, they didn't go in for foreign takeover bids.[/QUOTE]

There are indeed interesting parallels between dynastic Egypt and more-recent India, esp. w.r.to to the longstanding deeply rooted caste systems. In Egypt, the [url=https://www.google.com/url?q=http://www.despair.com/achievement.html&sa=U&ei=-mRCUNurC4iRiQKGnYAY&ved=0CBIQFjAA&usg=AFQjCNH3gir1zTM7KwuR3UrY32O1H8JyMA]myth of armies of slaves building the pyramids[/url] has been more or less debunked; rather, a [url=http://harvardmagazine.com/2003/07/who-built-the-pyramids-html]highly specialized worker caste[/url] appears to have been key:
[quote]What began to interest Lehner more than the question of how the Egyptians built the pyramids was, he says, “how the pyramids built Egypt.” Construction of the immense Giza monuments, thought to have been built for three successive pharaohs in a kind of experimental gigantism, must have required a lot of “free-wheeling” on the existing social apparatus. Influenced by Cambridge University’s Barry Kemp, who wrote Ancient Egypt: Anatomy of a Civilization, Lehner came to believe that the colossal marshaling of resources required to build the three pyramids at Giza—which dwarf all other pyramids before or since—must have shaped the civilization itself.[/quote]
The question is, can such a model work in the interconnected, royalty-are-not-gods modern world?