Professor Elam

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  • Professor Elam

    Presidential Dissatisfaction

    Wednesday Dec 23, 2009

    Barack Obama's disapproval ratings are up to 46%, and this is just his first year. This is no surprise to a student of socionomics, the trend and mood are down!  Remember out template is the period from 1966-1982. We are now well into the 1970s. If Bush was Nixon, Obama is Carter. While Carter embraced different policies than Ford and Nixon, he finally suffered one of the worst defeats ever. The same scenario is being repeated. The only surprise is that political observers are, well, surprised. Note by the way that this is Not necessarily driving voters to Republicans, lest you think I am cheering for Republicans. They too are suffering low approval, the reason is the negative perception of all in office. 

    A public enamored with mobsters (the Sopranos won tv show of the decade as reported here yesterday) and vampires (everywhere!) is not enamored with politicians. Indeed, Congress rates lower than the President, and did so during the Bush presidency, nothing has changed!  The claims that housing and the economy are improving which is not the case, will only drive his numbers lower, as they did Carter. 

    The parallel of the New York City economic crisis of 1976 is now multiplied, read about Detroit and bankruptcy here. Detroit Mayor Bing admits the actual unemployment rate may be close to 50%.

    We suspect a big issue this next year will be city state and university pension funds seeking Federal bailouts. Is a pension fund a bank worthy of TARP money?  Do pensioners vote?  Do taxpayers asked to support pensioners vote? 

    2010 is shaping up to be an interesting year to say the least. 

  • Professor Elam

    Mediaweek

    Tuesday Dec 22 2009

    Rush Limbaugh has been named Radio Personality of the Decade by Mediaweek, a leading industry magazine and Web site.  Mediaweek also named Apple’s Steve Jobs as Marketer of the Decade, “The Sopranos” the TV Show of the Decade, Rupert Murdoch the Media Executive of the Decade, YouTube the Web Site of the Decade, Wired the Magazine of the Decade, Apple the Brand of the Decade, Larry Page and Sergey Brin of Google the Media Entrepreneurs of the Decade, and Google the Media Company of the Decade.

    This sort of thing is interesting in terms of emerging social trends, a popular topic for this blog. It matters not what you think of Rush Limbaugh, or Keith Oberman for that matter, what does matter is the opinion that large segments of the population have of them. 

    For example, there have been numerous attempts to run someone liberal as a popular radio talk show host, Mario Cuomo, Jim Hightower, many try, most like Air America fail. Why?  The assumption is that Rush just talks conservative and that if the other side just talks liberal they will find an audience. Obviously this is not the case. Indeed there are many conservative talk show hosts but Mediaweek notes none of the others come close to Limbaugh in terms of audience. Limbaugh points out that he is a professional broadcaster, it is the content of his show that makes it different. So what is the difference, any thoughts?

    At any rate, consider the others in the list. 

    Jobs has made Mike Dell eat his words about liquidating Apple as Dell stock cannot rise above $20 and is in Wal Mart selling computers . The i Empire will no doubt spur lots of sales of the upcoming iTablet or whatever Apple will call its reader. The Sopranos tv show foretold the turn to the dark side and the popularity of gangster shows ala our previous template, 1966-82 for the period we are in now. Notably it was followed by True Blood, one show about contemporary gangsters, another about contemporary vampires. Conventional media still does not want to take Murdoch seriously but he did buy the Wall Street Journal, and his Fox News continues to attract and star ex CNN talent. O Reiley is up again this year. You Tube has made every video cam a potential tv studio, can Jay Leno rescue NBC?  I think I will subscribe to Wired, we did post a story about quants from Wired. Apple has created Apple devotees, something that escapes their commodity based competitors that are essentially selling television sets. I view today's personal computer as the new television set of another generation. Interestingly Apple has shown no interest in going down market to compete on price. Wall Street dismissed the Dutch Auction of Google shares, and then it went to $400 a share. Google continues to set the pace.  

    A key component of success here is Design. We previously mentioned this with Apple, its elegant designs cascade right down to the packaging. Limbaugh has designed his program his way, it is right there for everyone to hear, why can't they duplicate it?  Note to younger readers, others tried to do the same when Johnny Carson and Ed McMahon were on the Tonite Show, they tried all sorts of guy combinations, none were successful. Letterman, O Brien, and Leno are shadows of that team. Google also has a clean uncluttered design interface. Conclusion, Good Design Works. 


    Meanwhile Time Warner threatens to drop Fox, gee does that mean 24?  Time Warner proved its incompetence over paying for AOL resulting in the biggest impairment write off in history, perhaps they can do it again!


  • Professor Elam

    Taxpayer Funded Pension Plans?

    Tuesday Dec 22, 2009

    Pension plans helped sink GM and are now doing the same to YRC. YRC is the remnant of Yellow Freight and Roadway, now drowning in debt, and pension obligations. Seems that the surviving company is on the hook for all the laid off Teamster drivers of failed companies. Mish Shedlock takes an extensive look in his Dec 22 2009 post. 

    The chapter on pensions is far too detailed in my opinion, it fails to give students the big picture of what is really happening in terms of liability to the employer, we will all be reading this column in Intermed II next semester. 

    2010 will be characterized by these types of failed promises. Our template for the near future is 1968-82. This period was a series of ups and downs for the stock market, politicians and everything else. NYC actually defaulted because of its difficulties with municipal worker contracts. Now cities and states and employers have all made similar agreements that cannot be kept. This will come crashing down in spectacular fashion. Mish details how a congressman is trying to move the target on calculating the pension obligation. But there is no way all this can be paid. Expect pension funds to ask for bank status and TARP or other federal assistance. 

  • Professor Elam

    Texas Universities Offer Vampire Courses

    Picture 10  Well so much for cowboys and where the west begins, Texas tops the list of US universities offering courses on vampires. Literature, sociology, you name it. UT Austin, the class is now at 250 and growing, TCU, and gads, Texas Tech now offer courses on our they live by night friends. 

    You heard it on my blog first. Fascination with the occult goes with the dark side of the downturn in the economy. The fact that interest in vampires is growing tells us we are nowhere near the end of this down cycle. For the time being there are no plans that I know of to offer a credit course on vampires at SA A & M. We will however keep you posted on the blog, well I am tempted to post a vampire analogy but….

  • Professor Elam

    Hawaii, Latest Trainwreck

    Obama may be their native son but he has certainly hurt more than helped. After excoriating companies for trips to posh vacation spots, many companies cancelled trips to both Las Vegas and Hawaii. Well guess what, both economies are now on the intensive care list. 

    Read about Hawaii here. 

    As the say ing goes Mr. President, with friends like these…..

  • Professor Elam

    Watch the Bond Market

    Picture 6

    This
    is a ratio chart of Central Fund versus the US Dollar. CEF has outperformed the
    dollar, until Dec 1. Note the ratio went below the 200 bar moving average to
    really kick this off in April. The message is that we expect the 200 bar MA to
    be tested and overthrown again.

    Well
    tell you what let’s look at the bond market before we go…

    Picture 8


    This
    is the very long picture of the fall in rates since the top in 1981. Rates have
    followed the 50 bar MA all the way down. We assume that the spike to two
    something percent on the thirty year and zero on t bills is the bottom of rates.
    Note 39 year rates are now 4.45%. The 200 bar MA is at 5.5%. So a mere 100
    basis points would turn up a thirty year trend.

    At
    top the rate of change from last fall’s panic low has topped out, significant
    on a thirty year chart, okay, twenty nine years and counting…

    Our
    point here is that the bond market bears watching for what is  ble to be important events in 2009. How
    important is the bond market?  Glad
    you asked.

    Picture 9

    Bond
    yields are in black and red. They topped at 14% shown on the right scale in
    1981 The stock market, the solid black line bottomed at that point. Money moved
    from CDs, safety, to the stock market, risk. And that continued until 2000.
    The  stock market managed to come
    all the way back up to 1500, but has not done so since. Low interest rates move
    money to stocks, high interest rates discourage stock investing, why bother
    when 14%  is available at the
    insured local bank (now a much larger question mark than in 1981!).  Note the stock market has NOT come near
    its previous high despite trillions of dollars poured into the ecomomy by Time’s
    Man of the Year.

    Monitoring
    the bond yields should be the final clue to stock market behavior in  2010.

     

     

      

     

  • Professor Elam

    Dollar Weakens Commodities

    Picture 1

    The
    red and black bars are the new junior miners etf. The Solid Black line is UUP a
    dollar index ETF. This is shown on an hourly basis to emphasize how dramatic
    the shift really was. The dollar bottomed in this measure at Dec 1 just as GDXJ
    and every other gold share topped. I ran this comparison using GDX, ABX, and a
    small mine GSS, they all look the same, the more junior miners dropping a lot
    more percentage wise.

    In
    three weeks the dollar moved up  about 4-5% and GDXJ dropped about 15%.

    Picture 3

    There
    are after all commercial uses for oil much more than for gold and silver.  Oil seems to run ahead of a change in
    the dollar. It started falling before the dollar rallied and has rallied as the
    dollar probably has reached a short term top    .

    Picture 4

    The
    inverse relation ship is clear here, dollar down on main chart, GLD up at
    bottom. This is a real dollar bottom for the time being, this is the first time
    RSI has risen above 50% shown at top, since the Dollar top at 89 last March.

    We speculate that the
    dollar is overdone short term, pulls back for a couple of weeks through
    Christmas or perhaps that is delayed until traders get back from the holidays
    post Jan 1. If this will be a five wave move up in the dollar, considerable
    short term strength lies ahead once a correction is over. At that point, we
    will see how strong the gold silver oil rally has actually been.   Just a small pop in the dollar
    has curtailed gold and silver shares.       
      

     

  • Professor Elam

    Chinese Find It Harder to Buy US Treasuries

    Even closed mouth China is choking on US Treasuries, the irony continues as Bernake is named Man of the Year, printing Treasury debt like there is no tomorrow. 

  • Professor Elam

    On Good Writing

    Picture 9  The first step to good writing, in my opinion, is good reading. And with that in mind I highly recommend 

    columns by David E. Davis, even if you are not a gearhead. Davis writing career really got going at Car and Driver in the 1960s, he left for an ad agency, came back and quit C/D after it was bought by CBS or some such and started Automobile Magazine. He was left with online WindingRoad.com. But fittingly he has returned by invitation to Car and Driver again. He can also hold forth on contemporary politics using his own personal history as guide. Note how he builds a sense of theater of the mind describing what took place in those old cars…..

    but as I say the reason you should read him is not out of affection for cars of which he has a great deal, but out of affection for good writing. Good writing embraces us, beckons us along, makes us comfortable for the ride and we leave wanting more.  Stephen King can do this as do most  of the million selling writers, …. David E. Davis declared back in the 60s that he was influenced by then budding writer Tom Wolf (The Kandy Kolored Tangerine Flake Streamlined Baby, The Right Stuff) and if you have not read Wolf, you have simply not read modern American literature. 

    So what are you doing over the break?  This is the chance to do some good reading, and therefore learn more about good writing. I checked out a P J O'Rourke from the SA Public Library today and just ordered some classic Jean Shepherd (he authored A Christmas Story which became the now famous seasonal movie) stories. 

    Next time you are with a group of friends, go round the circle asking who has read what, you will learn a good deal about them, if the answer is, I am too busy, oh, I just read on the net  or some such, you have learned a great deal about their intellectual curiosity and therefore what you may eventually learn from them, we are after all known by the friends we keep. 

  • Professor Elam

    Avatar Opens this Weekend

    Picture 8 Outer space has been good to me 

    Sigourney Weaver

    You can see the blue creatures elsewhere, Sig photos gets my vote on this blog. Whoever did her eye job certainly earned his fee!

    Avatar with a budget of over $300 M and 3 D effects debuts this weekend. Projections are $80-$200 M for the first weekend, it is a world wide debut. James Cameron has not done a film since Titanic and with its success, got free reign to do what he wanted. 

    Read about it and Sig W's comments here. 

    Thirty years later, Alien and Aliens are perhaps the best sci fi movies ever made. The gritty realism (?) if in fact we ever end up on distant planets seems just right and it established one of the first female action stars. Avoid the last two which are in no way equal to the first two franchises. 

    Sean Connery only did one space film Outland. while the the Review at Amazon is nothing special, I thought like Aliens it captured the loneliness of a far off world. Connery said he had been offered many scie fi scripts before finally picking this one.