Ellisblog!

2009-11-10T14:12:00.001-05:00

Hard Times at Wal-Mart.

“There are families not eating at the end of the month,” said Stephen Quinn, executive vice president and chief marketing officer at Wal-Mart Stores, and “literally lining up at midnight” at Wal-Mart stores waiting to buy food when paychecks or government checks land in their accounts. (via Kedrosky)

2009-11-07T09:06:00.002-05:00

Into the Gunfire.

It takes great courage to do what she did. Sgt. Munley saved the lives of "countless others."

2009-11-07T08:34:00.001-05:00

Keb Mo

Saw Keb' Mo' last night at the Tarrytown Theater. If he comes to your town, get tickets, go. He is simply sensational.

2009-11-04T12:05:00.004-05:00

Post-Election Analysis.

Mike Barone provides a concise recap of what happened yesterday. It's actually two columns (here's the other one) and it pretty much covers the waterfront.

The parallels to 1993/1994 seem especially ominous for Team Obama, as well they should. The aftershocks of the 1990-1992 recession made 1994 the year of going sideways and backwards and down. Veteran Wall Streeters still shudder at the memory of it. The aftershocks of the nearly complete collapse of the global financial system in 2008 and the recession of 2007-2009 will likely be much more vicious and much more painful.

Soon enough, perhaps sooner than people think, the great flood of free money (which was necessary to keep the financial system afloat) will begin to abate. Interest rates will begin to creep up as the Fed exits from the stage. The dollar carry trade will no longer work. Markets will deflate. Cost cuts will resume. Unemployment will get worse, not better. 2010 will likely bring nothing but economic pain.

If you're the party in power, you're going to get hammered as a result. Assuming the GOP can adopt a very simple platform -- spend less money, create more wealth -- they can recapture the House, the Senate and most of the key statehouses. This being the modern GOP, I'm certain that they'll figure out a way to snatch some defeats from certain victory. But the wind is at their back and all they really have to do is raise a big spinnaker and point the ship dead down-wind.

2009-11-03T12:45:00.000-05:00

Few Posts.

Deep into work flow. Not posting much at all.

2009-10-21T16:36:00.003-04:00

The Warnings

The Frontline broadcast, "The Warning," obviously suffers from the non-participation of three key players; Treasury Secretary Rubin, his successor Larry Summers and former Fed Chief Alan Greenspan. It's nevertheless worth watching and, thinking ahead, quite chilling. You can feel the same mistakes re-gathering. You can hear the same wishful thinking. You can see it all unfolding again and faster.

Martin Wolf addresses this issue (what do we do now?) forthrightly (as ever). It's worth reading. I suspect that everyone will agree with him and simultaneously ignore everything he says.

2009-10-20T07:18:00.002-04:00

76-10.

Those are the second half scoring stats for the Denver Broncos this year. They've scored 76 points in the second halves of the six games they've played. They've allowed just 10 points over the same 12 quarters. That's indicative of good conditioning and very good coaching.

Last night the Broncos defeated, decisively, the San Diego Chargers. The Chargers have "issues." The Broncos exposed them, completely.

2009-10-16T17:11:00.000-04:00

Rhode Island Adds Six (6) Jobs.

Your multi-billion dollar stimulus plan at work.

2009-10-16T12:36:00.006-04:00

If You Thought He Could Win....

Chris Daggett, the Independent candidate for governor of New Jersey, continues to gain ground. A new survey shows him with 18% of the vote in a sample of 611 "likely voters." Daggett has now entered a campaign phase that requires him to assert that he will win if people think he can win. It sounds convoluted. It's not.

In 1992, in what was then the largest national exit poll ever conducted, the Voter News and Research Service asked (see page 15 of the link) more than 11,000 voters: (paraphrased) if you thought Ross Perot had a realistic chance to win today's election, for whom would you have voted? The results were Perot 40%, Clinton 33% and Bush 27%. In the actual balloting, Perot got just over 19% of the vote.

So it seems to me that the next polling outfit that interviews New Jersey voters about their upcoming gubernatorial election should ask this very question: "If you thought Independent gubernatorial candidate Chris Daggett had a realistic chance of winning the election, for whom would you vote?" The answers would tell us a lot about the real state of the campaign.

2009-10-15T11:07:00.005-04:00

No Sale.

The New York Times announced Wednesday that the Boston Globe was no longer for sale. It appears that the reported offers of $35 million in cash and the assumption of $59 million in unfunded liabilities collapsed when the two remaining bidders, Team Taylor and Platinum Equity, learned that the unfunded liabilities were actually north of $100 million.

The New York Times says that because of concessions made by its labor unions, paycuts for management, higher subscription rates and operational consolidation, the paper is on the "path to profitability." One hopes that that is true. It would be a very bad day indeed for everyone who works there if the paper collapsed.

That said, it is not clear how the "path to profitability" will lead to actual profitability. The Globe continues to lose money, advertising revenues are "less bad" but still dreadful, the paper's cost structure is not sustainable and Boston.com's business model isn't working. Perhaps a rising economic tide will lift all boats, the Globe can be put back on the market next year and some tolerable purchase price will be proffered.

But the more likely outcome is that the grim slide will continue and that an already poisonous culture will grow yet more toxic. What's the end-game there? How long can the NYT afford to carry the net operating losses? When does it make more sense to just shut it down?

Whatever else happens, the paper must do everything it can to keep the Sports Section talent happy. Absent Bob Ryan and Dan Shaughnessy and one or two others, the Globe Sport Section is no different from any other sports section. Lose them to ESPN or Comcast and it's game over.

2009-10-09T10:01:00.004-04:00

Oh No!

Here comes another speech! Just when you thought he might stop and start doing his job, horrible Norwegian people intervene.

2009-10-08T08:04:00.001-04:00

AT&T Wireless Overwhelmed.

As an indicator of the bottleneck ahead, AT&T has been overwhelmed with a 5,000 per cent increase in wireless data consumption in three years, driven by the minority of customers who own Apple’s iPhone. For now, AT&T is the exclusive US carrier for that device.
“We’re seeing a disproportionate number of users driving consumption,” Ralph de la Vega, AT&T Mobility president, said at the conference.
“If we don’t find a way to keep them from crowding out others, we’re going to have a very significant issue.”
Mr de la Vega said the top 3 per cent of its smartphone customers were responsible for 40 per cent of data usage, consuming 13 times more than the average smartphone user. With new smartphones that have software fromGoogle and others coming, and the prospects of wider distribution of broadband-enabled notebook PCs, the demands for connectivity will continue to jump geometrically.
--from today's Financial Times.

2009-10-07T16:20:00.003-04:00

Decumulation.

Where do people in money management come up with these words? Apparently, when you sell stock to help pay for your retirement, you're "decumulating!" If all the baby-boomers do it at more or less the same time, it amounts to a fairly massive "decumulation." (via Kedrosky)

2009-10-07T16:17:00.003-04:00

Belichick on Coaching.

“Age was never a big thing for me, whether it was the head coach of Cleveland or any of those assistant jobs. It was more about doing the job,” Belichick said yesterday. “I feel like if the players feel like, as a coach, you can help them, and you know what you’re talking about, and you can tell them things that’ll make them better and help prepare them because they want to prepare, they want to do well and they want to improve. If you can show them you can do that, then they respect you. If you don’t, I’m not saying they’re disrespectful, but they don’t listen carefully, they’re not as attentive because I don’t think they feel like they are getting information or the assistance that they’re looking for, and what they’ve been used to getting in the past. That’s really what it’s about for me.” -- from The Boston Herald.

2009-10-07T06:54:00.002-04:00

If a Shoe Drops

And everyone pretends it didn't, did it? The Fed says: we have a Rapid Response Team for that!

2009-10-07T06:50:00.001-04:00

Afghanistan.

From the analytics service Stratfor:

By most accounts, McChrystal is a sharp and capable military leader. It is not only his prerogative as senior commander in Afghanistan but his job to turn the tide against any and all opposition there -- to seek as long-term and lasting a solution as possible to problems like internal security. To do that, he has outlined a long-term operational strategy and asked for what appears to be essentially as many troops as the Pentagon conceivably might give him.

But the White House has a different role: American grand strategy. It is the executive that is responsible not only for Afghanistan but for balancing American resources across a series of geopolitical challenges, from a resurgent Russia to Iran. The president must decide what he wants to accomplish in Afghanistan, given the spectrum of challenges and what resources can be allocated to that mission.

It should be no surprise that the role and perspective of the senior military commander in Afghanistan and the president of the United States might produce different answers to the question of the appropriate American strategy. Afghanistan is a war that the Obama administration inherited, and the circumstances there have gone from bad to worse to worse yet in only a year's time. Some of the president's closest advisers now appear to be laying the groundwork for a White House decision on the Afghan strategy that does not match with McChrystal's request.

2009-09-28T18:48:00.001-04:00

The Truth About Derivatives.

Quickly! Probably no more than 1200 words! (via Kedrosky)

2009-09-24T17:12:00.002-04:00

A Good Guy.

Mickey Kaus perfectly captures the imprisonment of Paul Kirk.

2009-09-23T20:17:00.005-04:00

This is Sort of It.

President Obama has to make a very tough call. Do we stay and fight in Afghanistan with a mini-surge of troops that might not be successful (the commanders want a maxi-surge, but they're not going to get it)? Or do we get out and turn it over to the Taliban and give Al Qaeda its first huge victory since September 11, 2001? The consequences of whatever decision the President makes will be enormous. Here's the brief. What would you do? (see also: here.)

2009-09-19T06:53:00.003-04:00

New, Innovative Intellectual Leadership.

Where would we be without the Massachusetts state Democratic Party? Now they want to tax dogs.

I know, I know, you're saying: "that's not true, Ellisblog is spinning the news." Read it again.

2009-09-18T05:38:00.002-04:00

The Banking Crisis, Act Two, Scene One.

Last year (and the year before) focused our attention on ever larger number of defaults in the sub-prime mortgage market, which then laid waste to various securitzed exotica, which thus rendered our major banking institutions and non-bank banks insolvent. Roughly speaking.

If you live in New York, as I do, and hang out with Wall Street traders, as I sometimes do, you have been told for well over a year now: "you think subprime was bad, wait until the Commercial Real Estate (CRE) market begins to fall apart."

Wait no more!

2009-09-18T05:35:00.002-04:00

Missile Defense in Eastern Europe.

I wonder what the Secretary of Defense and the Joint Chiefs of Staff think? From The Financial Times:

“Those who say we are scrapping missile defence in Europe are either misinformed or misrepresenting the reality of what we are doing in Europe,” said Robert Gates, US defence secretary. The new approach would be more effective than the previous plan, which he recommended to former President George W. Bush three years ago.

2009-09-14T21:05:00.003-04:00

A Blast of Common Sense.

The case involved $3.6 billion in bonuses that were paid by Merrill Lynch late last year, just as that firm was about to be merged with Bank of America. Neither company provided details of the bonuses to their shareholders, who voted on Dec. 5 to approve the merger.
The judge focused much of his criticism on the fact that the fine in the case would be paid by the bank’s shareholders, who were the ones that were supposed to have been injured by the lack of disclosure.
“It is quite something else for the very management that is accused of having lied to its shareholders to determine how much of those victims’ money should be used to make the case against the management go away,” the judge wrote.

--- from a story on The New York Times website.

2009-09-12T16:35:00.002-04:00

The Axeman Cometh.

The Washington Post Company's newspaper division lost $143 million in the first half of 2009. Annualized, that's a nearly $300 million loss. Newsweek, which is losing readers at an alarming pace, lost $50 million. There is no way that any of this is sustainable. And where (oh where) can $285 million of cost savings be found at the Washington Post?

2009-09-09T15:56:00.001-04:00

Clinton At His Best.

A warm and moving rememberance of Walter Cronkite.