Global Financial Crisis (Was: Subprime Meltdown)

[ewmayer]

Ambac moving toward deal: CNBC: Tuesday March 4, 3:33 pm ET

NEW YORK (Reuters) - Ambac Financial Group Inc (NYSE:ABK - News), the second-largest bond insurer, is progressing toward a deal to raise capital but has not yet reached an agreement, CNBC reported on Tuesday.

Ambac is looking to raise capital to help keep the top credit ratings at its main insurance unit.

CNBC's Charlie Gasparino said a group of banks working on the deal plans to work through the night.

Almost the identical hopeful-yet-vague phrasing, e.g. "progressing toward..." as before - I seem to also recall seeing the same dramatic "working through the night" BS last time. How many times will the same bogus bailout rumor in the-last-hour-of-trading ploy work to briefly rally the markets? [Note this time there was no massive turnaround, just a slight upward swing - maybe even the galloping herd is slowly wising up to that one.] That storyline is getting kinda old - they really could use a few new copywriters on the Plunge Protection Team, it seems.

Update: To give you a better sense of just how hard at work your friendly neighborhood PPT is, here's a snippet of some more of the "news" that helped turn today into a merely-mediocre day in the markets:

AP | Stocks Pull Off Lows on Bargain Hunting

Technology stocks rebounded, too, after a Dow Jones Newswires report that Cisco CEO John Chambers said he is "even more comfortable" with the long-term growth targets the company has outlined, and after Amazon.com's chief financial officer reiterated the online retailer's 2008 revenue forecast.

Let's summarize:

Cisco CEO: Nothing new, just "even more comfy-wumfy" with the made-up long-term growth *targets* - not even vague long-term growth *forecasts*, but "targets" they'd already made some weeks ago. No news, just re-gurgitation. [Aside: Is re-regurgitation even a word?]

Amazon CFO: Reiterates their earlier forecast - again absolutely nothing new. But heck, at least it was "reiterated forecast" in this case, rather than a weak-assed "reiterated long-term growth target".

Ya just Gotta love Wall Street. It's like some weird kind of neverending Trillion-dollar Kabuki theater production with dozens of colorful, funny-faced sock puppets to distract the audience from ugly reality, and roving bands of pickpockets to distract them from their cash.

[ewmayer]

Foreclosures in U.S. Hit Record High: Nearly 1 million U.S. households in default, more than double compared to a year ago.


Ambac News!: [And it's not good]. After at least 3 rounds of "Ambac Bailout Imminent! Banks Working Through the Night!" rumors, mostly courtesy of CNBC lead Ambac shill Charlie Gasparino [contrary to popular rumor, it's not really spelled "Gasbaggarino" - it's just pronounced that way], yesterday rumor finally gave way to some actual news about the desperate capital-raising efforts by the ailing bond insurer, breathlessly hyped-just-prior-to-the-announcement by the aforementioned Mr. Gasparino, who apparently broke into CNBC`s normal stock-pumping and said something to the effect of "I`ve been told to get my makeup ready...stay tuned!", only to make viewers wait a half-hour for the actual announcement. Which ... was not positive. No "bailout", rather a fire-sale public stock offering involving massive shareholder dilution, and whose value promptly plummeted as the market reacted to the news, sending ABK's shares down 20% by end of the day, down a further 10% so far today. A classic shaved-coin operation, if ever there was one.


Want to see a graphic illustration of a Mortgage-lender implosion? Check out Thornburg Mortgqge. Here`s the story -- note that Thornburg is not even a "classic" poster-child subprime lender; rather it got into the jumbo mortgage game big, and lost big, by way of yet another convoluted financial-derivative called a reverse repurchase agreement, or REPO. Well, guess who`s getting REPOd now. Those are precisely the types of loans which have now been foisted onto the balance sheets of the 2 big government-backed mortgage lenders` portfolios as part of the recently passed $150B Good Money after Bad, erm, I mean, "Fiscal Stimulus" package. That means that in coming years, the U.S. taxpayers will be left holding the bag, in lieu of shareholders in companies like Thornburg and Countrywide. A million jumbo mortgages equates to roughly a trillion dollars. It's gonna be ugly - those are Iraq-War-type numbers there, and they are being *added* to the deficit-financed war, to boot. I fear we as a nation will be paying for the twin follies - in fact the triple folly, when you include Bush's irresponsible budget-busting-from-the-get-go tax cuts - for decades to come. We have mortgaged our future to try to force democracy on a people which neither wants nor deserves it, and to bail out millions of home speculators and the lenders who helped lure them in.


The risk of further massive losses at Fannie and Freddie is already on vivid display: FNM shares tumbled over 10% earlier today after UK hedge fund Carlyle Capital, which last summer bought over $20B of Fannie and Freddie-backed mortgages, defaulted on a margin call, just like Thornburg did. In Carlyle's case, the risk of the financial vehicle was compounded by the classic hedge fund stunt of using massive leverage: re-read the article and do that math: that's right, Carlyle raised a little over 300 *million* dollars, and used that to "buy" over 20 *billion* dollars in mortgages.from FNM and FRE.

By way of an addendum, illustrating the "worse than useless"ness of the debt rating agencies, now, after Thornburg defaults on its latest margin calls, does Fitch ratings downgrade it to a "default" rating of RD. Well, duh! The ever-wise analysts at Bear Stearns, meanwhile, have downgraded the stock - not to the more-appropriate "Get out now! Sell! Sell! Sell!", mind you, but the much-milder "underperform". Oh, it's "underperforming", all right - thanks for letting us know that, now that the stock has plunged over 90%. [Aside: This kind of after-the-fact rerating-to-the-obvious is often lampooned as "stock proctology" - perhaps that`s why they`re called "securities analysts."]


Lastly, on a much-needed humorous note, courtesy of our hardworking friends at the eCONomic Scuttlebutt blog:

Home Cooking Banned in Californica: Legal victory for fast-food franchises

[Uncwilly]

Heard the stat that home owner equity has fallen to below 50%. This is the first time that it has happened since the 1940's.

http://money.cnn.com/2008/03/06/real...y.ap/index.htm

[ewmayer]

Salon.com | Countrywide and the "left-wing anti-business press"

Muckraked, a blog run by former Wall Street Journal editor Marcus Baram, got its hands on a 23-page memo summarizing the findings to date by [Senator Henry] Waxman, one day before a congressional hearing in which Mozilo, O'Neal and Prince are expected to testify. ... Muckraked plucks out one particularly juicy nugget that bears repeated highlighting. It is part of an e-mail in which Mozilo responds to an executive compensation consultant who was working for Mozilo, but was disappointed in the terms of the agreement ultimately decided upon, because, sadly, they limited Mozilo's "maximum opportunity."

US corporate bond spreads approach widest on record: "The gears of capitalism are ... grinding to a halt."
[EWM: Actually, since much of this is due to a massive deleveraging of Banks' and Hedge Funds' highly-leveraged bets, it seems that the while the "gears" of capitalism may be grinding to a halt, the "levers" are pumping overtime.]

UBS Analyst: Mortgage markets "Utterly Unhinged": Rising mortgage rates despite Fed rate cuts indicate "broken system"

Mish Shedlock sums up the situation succinctly on his blog:

...But let's not be too gloomy here.

Other than overleverage, bad debts, sinking home prices, no jobs, shrinking wages, cash strapped US consumers, rising oil prices, a sinking US dollar, $500 trillion in derivatives not marked to market, rampant overcapacity, underfunded pension plans, looming boomer retirements, no funding for Medicaid, no funding for Medicare, and no Social Security trust fund, everything is just fine.

And even though the Fed, central bankers in general, and governments combined to create this problem, the irony is nearly everyone is begging for them to fix the problem by encouraging still more speculation in housing, commercial real estate, and the markets.

Sorry folks, it's the end of the line and payback time for the world's most reckless financial experiment in history. The deflation genie can't be put back in the bottle until leverage everywhere is unwound.

[garo]

The White House acknowledged its disappointment in the bleak jobs report. "This quarter's going to be a difficult quarter for the U.S. economy. We are in a low growth period in the economy," White House spokesman Tony Fratto said.

Right!

[ewmayer]

So garo, is a period of "low growth" better than "underperform", worse than, or somewhere in between?

Update on 3/01 Post: Found a link to the NBR transcript of the Moody analyst's "It's the bailout that keeps on giving!" commentary. Note the conspicuous lack of mention of any hint that the ratings agencies might have fallen down on the job even a teeny-weeny bit when they rated all this toxic subprime-backed waste paper AAA:

"Commentary"-How Best To Stop The Mortgage Mess
Monday, March 03, 2008

SUSIE GHARIB: Tonight's commentator says more needs to do be done to stop the current mortgage meltdown. He's Mark Zandi, chief economist at moodyseconomy.com.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM: The economy is in recession. The key reason: the evaporating housing market and surging mortgage foreclosures. House prices have plunged a stunning 10 percent from their peak and millions of homeowners now owe more on their mortgage than their house is worth. With prices sure to fall further, homeowners are literally walking away from their mortgages and investors who own them are suffering massive losses.

The financial system is in disarray, impairing credit to all borrowers, bad and good. The Treasury Department has been working aggressively to shore up the sliding housing and mortgage markets. Their efforts to date, while well-intentioned are set to fail. They have brokered various deals between mortgage investors, servicers and borrowers to try to keep people in their homes. But given the differing incentives of all involved, and that the deals are voluntary, few homeowners are getting much relief. The administration is loath to do much more, however. It is against legislation currently in Congress to allow homeowners to go into a bankruptcy workout to reduce their mortgage balance or interest rate. It is against any plan and there are many in Washington, that uses taxpayer money to purchase mortgage loans or securities.

This, Secretary Paulson says, would be a bailout. Yes, it would be a bailout, but not of investors and homeowners. They are suffering hundreds of billions in losses and millions are losing homes. The bailout would be of taxpayers themselves, as the recession won't be short and mild. It will be long and severe. This is Mark Zandi.

Speaking of idiot analysts blathering away on TV [which I find myself doing quite frequently these days], on one of last week's NBR installments they had a Wall Street "expert" talking about how even though the current conditions in the financial markets and economy-at-large are very worrying, he saw economic fundamentals as "sound" because "people still have jobs". As if that were somehow magically immune to the turmoil in housing and debt markets. Well gee, guess what?

U.S. Job Losses Worst in 5 Years: Payrolls sink in February, fueling recession anxiety. Unemployment rate declines, but that's because there are fewer people in the workforce.

I mentioned a few weeks ago how misleading an economic indicator the Federal unemployment figures are - the above article provides an illustration as to why:

Despite the loss, the unemployment rate improved to 4.8% from the 4.9% reading in January. Economists had forecast the unemployment rate would rise to 5%. The rate fell because of a big jump in the number of people that the government counted as no longer in the labor force.

Interesting CNN/Money piece detailing how in the current financial markets, even a well-run hedge fund [which in fact is not necessarily a contradiction in terms - it just often seems that way because the HFs one hears about on the news are the ones that imploded spectacularly] making nonleveraged investments in genuine quality mortgage-backed bonds [again, NNACIT] can go under if the bank lending it capital gets into trouble:

Anatomy of a hedge fund collapse: When big banks have multibillion-dollar holes on their balance sheets, they make harsh margin calls even to their healthier clients. Here's how one fund got crunched by the credit crisis.


Fitch may downgrade securities: Credit rating agency mulls slashing the ratings of $160B in securities that are backed by alt-A loans.
Likely too late to tell us anything we din't know, but of the "Big Three" ratings agencies, Fitch seems to be the only one doing anywhere close to a reasonable amount of due diligence and objective, unbiased underwriting.


Time to check in on the hijinks at our favorite "hilarious mispredictions" source, those wacky, irreverent folks at the NAR:
Home sales stay weak in Realtors' report: Homes under contract flat in January but remain near record low, showing continued weakness in market.

Another month, another post-fact downward revision in a previous forecast. But, things are still on track for a "great second half of 2008!":

The Realtors also released an updated economic and sales outlook that now sees the sales pace and prices for existing homes during the first half of this year slightly worse than in its February estimate. But it is still sticking with a forecast of a modest turnaround in the second half of the year.

Repeat after me: "Your friendly neighborhood reamtor, wants to sell you a wonderful mortgouge." Now write it down 100 times, or I'll cut your credit rating!


And in closing this wild week, the weekly Awards Ceremony - MOTW ... Is our good friend, George Dubya Bush:

Bush blames economic slowdown on OPEC's refusal to increase oil production.
I believe that requires no additional commentary.

[ewmayer]

As Good as Cash, Until It’s Not: Article about last month's collapse of the formerly-obscure-to-most-folks Auction-Rate Note market.

Also a related article by the NYT's Paul Krugman here:

One consequence of the crisis is that while the Fed has been cutting the interest rate it controls — the so-called Fed funds rate — the rates that matter most directly to the economy, including rates on mortgages and corporate bonds, have been rising. And that’s sure to worsen the economic downturn.

What’s going on? Mr. Geithner described a vicious circle in which banks and other market players who took on too much risk are all trying to get out of unsafe investments at the same time, causing “significant collateral damage to market functioning.”

A report released last Friday by JPMorgan Chase was even blunter. It described what’s happening as a “systemic margin call,” in which the whole financial system is facing demands to come up with cash it doesn’t have. (A financial joke making the rounds, via the blog Calculated Risk: “Who is this guy Margin that keeps calling me?”)

China's trade surplus plunges 63%: Chinese sales to U.S., Europe weaken, but economists say exports should rebound.

Newsflash: While the snowstorm is surely responsible for part of the drop in exports, the real storm is just starting, as U.S. and European consumers are gonna be drastically curtailing their spending in the coming months. While this will help the discount retailers like Walmart and Target [2 of the biggest U.S. buyers of low-priced Chinese goods] relative to high-end chains, people are going to really ratchet back on the non-necessities, which is also a huge part of the market for Chinese goods.
[Personal example: Last December I asked all my relatives and gift-list acquaintances to please refrain from sending me any made in China merchandise for Christmas - got nothing against the Chinese, but do have something against the kind of rampant spending on stuff-you-didn't-really-need-in-the-first-place we as a nation have been doing, which has had the effect of exporting a good fraction of our domestic economy - low-wage jobs as well as higher-wage - overseas, in disproportionate measure to China. So when one of my friends - not deliberately, I`m sure - sent me a cute-but-useless fake Tiffany-style miniature-plastic-Christmas-tree-with-lights from Target - "made in China", of course - I returned it to the local Target store the next day. They said their store didn't carry that particular item so they couldn't give me a store credit, I told them that's OK, just keep it, I got no use for it, maybe they could send it back to its country of manufacture, it being so useful and all.]


An interesting followup to my comment last Friday that of the Big Three ratings firms, Fitch seems to be only one even coming close to doing its job. There can probably be no better sign of that than this kind of thing:

MBIA to Fitch: "Good Ratings Only, If You Please"

MBIA Inc. Monday released a letter to its shareholders explaining that it requested a withdrawal of Fitch Ratings Services’ financial strength (IFS) ratings, saying the value of the IFS ratings from Fitch were “limited at this time,” because every MBIA investor has the “benefit of transaction-level credit analysis” from either or both Moody’s and Standard & Poor’s. “Of equal importance in today’s environment, the impact of even a hint of change in Fitch’s IFS ratings for MBIA causes serious volatility in terms of how our company is view in the equity markets, collateralized debt markets and the reputation of our firm,” the Armonk, N.Y.-based bond insurer added.

Regarding my previous comments about CNBC shill Charlie Gasparino and his repeated rumors about a bailout of bond insurer Ambac Financial - which materialized in a rather different way than he predicted - Mish Shedlock has done some very interesting charting of the recent trading action in Ambac. Not that there's any insider trading going on here, or anything - that could never happen in that bastion of ethical behavior that is Wall Street:

Global Economics Blog: Amazing Action in Ambac, MBIA

All this rumoring-about has led our friends at the UK Ministry of Silly Walks to weigh in:

Rumour of second bail out rumour coming in Ambac: A source close to the industry said that a consortium is being put in place to work on new rumours but we can't be sure that these rumours will actually be ready for another five business days."

Which inspires the following priceless user commentary:

"The Ambac bailout rumor isn't dead.....it's restin'. Remarkable rumor, the Norwegian Bailout Blue, idn'it, ay? Beautiful plumage."


Lastly for today - one of the few good aspects of the plummeting value of the US$ is that it helps exports of U.S. products. However, since we in the U.S. hardly make any actual *stuff* anymore, having shipped that line of business abroad and gone into the full-time business of "selling each other price-inflated real estate", one may well ask, "So, what exports might actually be helped by a weak dollar?" Here's one of the few remaining areas where the U.S. is still a world leader - no, not that silly "high tech" stuff or that fuzzy "software" or "web services" vapor-foo - I'm talking about actual *hard* exports here:

U.S. Dollar Recovers on OPEW Cutoff Rumors

Richard Stiffley, chairman of the Organization of Porn Exporting Websites (OPEW) promised that member companies would continue to keep the supply of U.S. porn flowing to the Middle East, Africa and South America. But he admitted that OPEW was considering a U.S. dollar-only policy after years of amassing tremendous foreign currency reserves, particularly Iranian Rials and Venezualen Bolivars.

Continuing the analogy [which begins with the acronym] with that other world power in hard commodities, OPEC, the frightening possibility of an OPEW porn embargo lends an entirely new meaning to the phrase, "shorting the markets." [Or would "turning off the spigot" be a more apt analogy?] I wonder if there's an ETF for this sort of thing ... Maybe leading industry analyst Ron Jeremy of the Wall Street firm of Pokem, Strokem & Plookem knows.

[ewmayer]

That $150B "economic stimulus package" you may have heard about? That was peanuts, just add it to the Iraq-war tab, bartender. Now we're talking *real* bailout money here:

Bloomberg.com | Fed to Lend $200 Billion, Take on Mortgage Securities

March 11 (Bloomberg) -- The Federal Reserve, struggling to contain a crisis of confidence in credit markets, will for the first time lend Treasuries in exchange for debt that includes mortgage-backed securities. The Fed said in a statement in Washington it plans to make up to $200 billion available through weekly auctions, and officials told reporters the program may be increased as needed. The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems.

And who`s left holding the bag when - not if, but when - the toxic components of that debt melt down? Why, the taxpayer, of course. Now the Fed and the Big Banks who run things and who will be using this gift to dump billions in toxic paper are saying, "but this is only for super-duper-safe top-rated AAA paper", but of course the utter lack of due diligence in assigning those bogus AAAs on the part of the massively interest-conflicted agencies which issue those very ratings is one of Two Pillars of Fraud [the other being the Fed`s irresponsible easy-money policy and refusal to rein in the out-of-control lending practices that resulted from same], which along with consumers' greed and desire to get something for nothing, created this whole boondoggle.

Interesting discussion of what-does-this-all-mean on the Wall Street Examiner, and also at The Big Picture blog.


Seen yesterday on the Yahoo! Finance Google message board:

User: weqweqwqqqq
10-Mar-08 04:58 pm
I've Lost Everything!!!!!!!!!!!!!!!!!!!!
I was margined up and taken out of my life savings. I went from 150K to 10K, I havent told anyone. Has anyone told family after losing big?

Another poor slob who followed Jim "Do the Opposite" Cramer's advice on CNBC Mad Money, more than likely. To compound the error of speculating on a high-flying "pure momentum" stock by leveraging oneself on margin - all very foolish but oh-so-tempting when a seeming "Once in a lifetime! Can`t lose!!" proposition like GOOG comes along, and one has perhaps already made a lot of money riding it up.

To the above plaintive post - following the usual spate of idiotic and downright nasty replies - poster "oldguytim" replies:

Let me tell you a little story.

It was late 1999. I had recently turned 2 million dollars into 5 million dollars. I was brilliant. I ran with the big dogs and day traded tech stocks and made tons of money.

Than, in early 2000 things began to change. But I was smarter than everyone else. I knew the stocks I had loved would go back up and that my 5 million which was quickly going down would again be worth 5 million.

I think you know what happened. I held, I held longer until the margin calls started. I sold what I needed to stay afloat but after about 2 years that 5 million was worth about 200k.

I fell into a deep depression. I lost everything. I had it all for a short period and was riding high.

I sold everything and was left with very little. I started over. I stayed away from the stock market and still do to this day. I was stupid. I "gambled" away everything I built. I lost a marriage, cause stress and strain on others.....

but

Today and the last few years have been better than ever. I learned my lesson. I invest wisely, enjoy what I have now and understand that money does not solve one single thing.

I was stupid, I know this, but I will tell all of you this that want to attack what I did.

I am a better person today that I would have been if I had sold at the peak and retired. I know what it is like to lose and understand now even more the value of a dollar. The important things in life are your family, friends and health and having all the money in the world, riding high on the stock market and crap like that is totally pointless.

As an old Russian saying goes: "If you lose money, you've lost nothing. If you lose a friend, you've lost something. If you lose hope, you've lost everything." However comforting those kinds of I-spit-in-the-face-of-the-coming-depression sentiments may be, the fact is, a lot of people are going to suffer real hardship as a result of the housing-and-credit-bubble implosion. I predict this latest market manipulation by the Fed will provide at most a week-long upward blip in the ongoing crapflush.

[ewmayer]

The Fed's worst nightmare: Dismal February retail sales and a somber forecast from CFOs point to recession, but rising oil and gold prices and a weak dollar show inflation. What's Ben Bernanke to do?

Quick answer: Stop trying to bail out the banks and mortgage speculators by way of irresponsibly low, dollar-value-hammering and inflation-stoking interest rates. Accept that the massive housing bubble, like all speculative manias, is simply going to have to unwind itself. Allow housing prices to fall back to more-normal historic levels. Accept that this will involve economic pain, especially for those who speculated and leveraged themselves the most. Stop pandering to the recession-denying White House and your banker buddies. "More of what got us into this mess" is not going to get us out of it.

S&P sees end to mortgage writedowns: Standard & Poor's Ratings Services hiked its estimate for how many bad mortgage investments banks will have to write off their books, though the ratings agency said Thursday the end may be in sight.

Yah, right. Like the other ratings agencies, S&P has ZERO credibility by now. Nil. Nada. Bupkus.
[OK, I admit that Fitch may have credibility = epsilon << 1, not absolute zero.]


Foreclosures up 60% in February: The number of filings jumps year over year but decreases modestly over last month.

RealtyTrac, an online marketer of foreclosure properties, said 223,651 homes got hit with foreclosure filings last month, which include default notices, auction sale notices and bank repossessions. 46,508 of those were lost to bank repossessions, which more than doubled over last year.

The report also indicated that foreclosure filings in February fell 4% compared with January, similar to a 6% decrease that occurred during the same time-span in 2007.

Isn't math ignorance wonderful? Hello - February also had 2 less *days* that January, and 10% fewer business days.^*


Bear Stearns plummets on insolvency fear: Whispers that the New York-based bank is in trouble dragged the company's stock to its cheapest price since just after the September 11th terrorist attacks.
When will the USFed get it, that the fundamental issue with the highly-leverage banks is not liquidity, but solvency? [Rhetorical question, which I'll answer: Most likely, only after the fact, once the first really big financial institution out-and-out fails.]

=============

^*[Assuming here in the U.S. that everyone got 1 January off, and President's day in Feb, but not MLK day in Jan, which seems to be the most-common pattern except perhaps for postal workers.]

[Wacky]

Originally Posted by ewmayer

[url=http://money.cnn.com/2008/03/13/markets/morningbuzz/index.htm]Foreclosures up 60% in February: The number of filings jumps year over year but decreases modestly over last month.


Isn't math ignorance wonderful? Hello - February also had 2 less *days* that January, and 10% fewer business days.^*

I don't think that the number of business days is a factor. Almost all mortgages require a uniform payment near the first of each month, without respect to the length of the month. If anything, the short month would be more likely to affect the March payments (which occur after the decreased work period rather than before it when the Feb payment was due.)

The article also notes that the decrease is most likely a "seasonal adjustment" to the similar underlying rate that was seen in January.

[ewmayer]

Originally Posted by Wacky

I don't think that the number of business days is a factor. Almost all mortgages require a uniform payment near the first of each month, without respect to the length of the month. If anything, the short month would be more likely to affect the March payments (which occur after the decreased work period rather than before it when the Feb payment was due.)

The article also notes that the decrease is most likely a "seasonal adjustment" to the similar underlying rate that was seen in January.

While payments might be bunched near the start of each month, these are foreclosure filings we're talking about here - AFAIK there's no "special time of the month" for those. Getting back to the "seasonal adjustment" claim, in the absence of direct cause-and-effect evidence, I find that unconvincing, especially in light of the fact that foreclosure paperwork typically takes time - often months - to process and wend its way through the system. And lastly, even if all the above dubious assumptions were in fact borne out, does 4% strike anyone as "of obvious statistical significance", and worthy of the hopeful spin the the article assigns to it? Perhaps I'm being too picky here, but I detest the pervasive habit of the mass media in taking dubious statistics at face value and often going much further into reading actual trends into what is at best noise.