In Play

On the Wires

MR. MEHANNA’S crimes were speech crimes, even thought crimes. The kinds of speech that the government successfully criminalized were not about coordinating acts of terror or giving directions on how to carry out violent acts. The speech for which Mr. Mehanna was convicted involved the religious and political advocacy of certain causes beyond American shores.

Unlike the government of the United States, I can’t claim any hands-on experience with Colombian hookers. But I was impressed by the rates charged by Miss Dania Suarez, and even more impressed by the U.S. Secret Service’s response to them.

Cartagena’s most famous “escort” costs $800. For purposes of comparison, you can book Eliot Spitzer’s “escort” for $300. Yet, on the cold grey fiscally conservative morning after the wild socially liberal night before, Dania’s Secret Service agent offered her a mere $28.

Twenty-eight bucks! What a remarkably precise sum. Thirty dollars less a federal handling fee? Why isn’t this guy Obama’s treasury secretary or budget director? Or, at the very least, the head honcho of the General Services Administration, whose previous director has sadly had to step down after the agency’s taxpayer-funded public-servants-gone-wild Bacchanal in Vegas.

All over this dying republic, you couldn’t find a single solitary $28 item that doesn’t wind up costing at least 800 bucks by the time it’s been sluiced through the federal budgeting process. Yet, in one plucky little corner of the Secret Service, supervisor David Chaney, dog-handler Greg Stokes, or one of the other nine agents managed to turn the principles of government procurement on their head. If the same fiscal prudence were applied to the 2011 Obama budget, the $3.598 trillion splurge would have cost just shy of $126 billion. The feds’ half a billion to Solyndra would have been a mere $18 million. The 823-grand GSA conference on government efficiency at the M Resort Spa & Casino would have come in at $28,805.

Chaney-Stokes 2012! Grope . . . and Change! Red lights, not red ink.

Read the rest here.

By BEN LEVISOHN And JOE LIGHT

How do you like them apples?

Investors got a scare on Monday when Apple, AAPL -2.46% among the best-performing stocks of 2012, tumbled 4.2%, capping a five-day stretch during which it lost 8.8%. The stock continued its slide later in the week, finishing Friday down 10% from its all-time high.

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Martin Wolf just said something that should terrify anyone who believes the EU crisis can be navigated without default.

Read here:

The other news is Wolf expects IMF chief Christine Lagarde will get her request for at least $400 billion, which would double the fund’s lending capacity.

Wolf supports the idea of the IMF having a larger insurance fund, so countries won’t need to hold as much currency reserves but thinks it should be more global in nature.

“To put it all into Europe? That looks to me like a very dangerous game for the IMF,” he says. “They’ve made quite clearly some serious mistakes getting so involved in a political project they don’t really control.”

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Today, Friday, April 20 is Adolph Hitler’s birthday.

Incredibly, sixty-two years after his suicide, Hitler’s image still seems to be popping up everywhere. One would think that the legacy left by the man who personified ultimate evil would serve as an antidote to hate and extremism. A good thing, right? Not always.

Here in America, character assassination—not of Hitler—but of contemporary figures abound. Attacks from both political extremes often equate America’s top leaders from President George W. Bush to President Barack Obama—with the worst world leader of all time.

Meanwhile in Germany, this April 20th still finds neo-Nazi thugs and three-piece suit bigots still drawing inspiration from the Fuehrer.

Now from China comes an incredible attack on the Dalai Lama—the Fuehrer’s antithesis—as a “new” Hitler. A commentary on China Tibet Online, also carried by the official Xinhua News Agency, accused the exiled Tibetan leader and Nobel Peace Prize winner of “Nazi” racial policies including encouraging Tibetans to segregate themselves and planning a Holocaust against Han Chinese. This from a regime whose treatment of Tibetans, it could be argued sometimes bears a resemblance to the Nazi treatment of Poles.

Elsewhere in Asia, trendy invocations of Hitler in countries with virtually no Jews are even harder to account for. “Hitler chic” manifests itself in fashion, music, advertising campaigns, and even school competitions:

In Thailand—a Buddhist country of 64 million with less than 1,000 Jews—there was a disgraceful parade at the exclusive Catholic Sacred Heart Preparatory School in Chiang Mai led by students who gave the “Sieg Heil” salute carrying Nazi flags. Gun-toting adults proudly accompanied their children.

In Japan, the popular rock group Kishidan appeared on MTV Japan wearing SS-like uniforms. To its credit, Sony responded to criticism with a press release: “We will not broadcast, transmit, or distribute the video recording of Kishidan’s performance with the said costume and the recording will be disposed of immediately.”

Of course, there was no explanation from Kishidan as to why the garb of genociders was chosen in the first place.

In South Korea, where Hitler-themed sports bars remain popular, an advertising firm produced an ad campaign with a Nazi soldier and Hitler symbolizing the “revolutionary” moisturizing and calming effects of a skin lotion.

In India, where, of course the swastika had a religious significance long before the Nazis perversely appropriated it, there was the “Hitler Crossing Café” in Mumbai and a publisher who has a smash best-seller marketing “Mein Kampf” to grad students and aspiring business leaders as a prime example of an highly-organized mind.

Closer to the epicenter of Mideast fault lines, in Turkey, the chief rabbi of that country’s beleaguered 500 year-old Jewish community, protested a television commercial for Biomen’s “100 percent male shampoo” showing Hitler shouting in a dubbed-over Turkish voice: “If you are not wearing women’s dress, you shouldn’t be using women’s shampoo either!” At a time when Turkey’s president anti-Israel rants continue unabated it took international protests to finally force the Biomen Hitler campaign from the airwaves.

Search Google and you will be overwhelmed with new titles every year containing the word “Hitler,” including those about “the young Hitler” that flirt with sympathy for that “troubled teenager.”

Nazi-themed art is also hot. Just a few years ago, artist Tom Sachs produced for the New York Jewish Museum’s Mirroring Evil exhibition his “Giftgas Giftset” exhibit consisting of simulated poison gas canisters bearing names and logos like Chanel.

Sachs explained: “I use the iconography of the Holocaust to bring attention to fashion… Fashion is good when it helps you to look sexy but it’s bad when it makes you feel stupid or fat because you don’t have a Gucci dog bowl and your best friend has one.”

Historian Peter Novick justified such trendy art as a necessary iconoclastic corrective to conventional moral revulsion at the Holocaust: “There are more important lessons about how easily we become victimizers to be drawn from the normal behavior of normal Americans in normal times than from the SS in wartime.”

Do critics like Novick mean that the sins of Middletown, USA, have more to teach us about murderous evil than the esprit de corps of the Storm Troopers—or the videocam that Toulouse’s serial killer Mohamed Merah wore around his neck?

Leaders of our Global Village may argue that they already have too much on their plate; that Job Number 1 is to focus on the Herculean task of regaining economic momentum. But history teaches us again and again that societies rushing headlong into the future—willfully oblivious to the past—are destined for disaster.

A generation after Auschwitz, Hitler’s aura still looms large. The only stave that can finally slay Hitler’s ghost is educating the conscience of future generations. We can either confront evil or watch our grandchildren march to its totalitarian hymns.

AHAHAHAHAHAhHAHA

Uh, read here:

Households in the U.S. may remain intent on repairing tattered finances by rebuilding savings for years to come as the specter of job losses and meltdown in stocks triggered by the recession lingers.

Americans are putting money away at a pace more than double that leading up to the economic slump. The saving rate has averaged 4.8 percent since June 2009, when the 18-month contraction ended, compared with 2.2 percent in the three years leading up the downturn.

“Households are going to be mired in this deleveraging environment for a few more years,” Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, said in a telephone interview. “That’s not atypical following a financial crisis.”

Almost three years into the recovery, the world’s largest economy has yet to regain even half the 8.8 million jobs lost and $16.4 trillion in household net worth washed away as a result of the worst recession since the 1930s. While the saving rate has dropped recently, longer term the need to boost cash reserves and pay down debt may eclipse the urge to be the first on the block to drive the newest model car.

Auto Demand
Pent-up demand for automobiles helped propel a 0.8 percent gain in consumer spending in February, the biggest in seven months, according to Commerce Department data. The pickup carried over into March as figures this week showed retail sales also advanced 0.8 percent, reflecting stepped-UNNp purchases of furniture, clothes and electronics.

Stronger earnings, reflecting in part the recent pickup in sales, are boosting share prices. The Standard & Poor’s 500 Index climbed 0.4 percent to 1,382.32 at 10:03 a.m. in New York. General Electric Co. (GE), Microsoft Corp. (MSFT) and Schlumberger Ltd. reported profits that topped analysts’ estimates.

Shares were also boosted by better economic news elsewhere. A report showed German business confidence unexpectedly increased in April for a sixth month,

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We’re just a few days away from the third Federal Open Market Committee meeting of the year, and the air is thick with speculation about QE3, the U.S. economy and our money.

As has been the case for some time, you would be hard-pressed to find a Fed watcher who’s calling for any real drama next week. In short, don’t expect a rate increase or clear pronouncements about future monetary injections. Do expect substantial parsing of every grammatical tweak in the central bank’s statement and ongoing talk about whether the dollar is living on borrowed time.

In all seriousness, the Fed and its actions over the past few years have been no small matter. That holds whether you view Chairman Ben Bernanke and his colleagues as saviors of the American economy, in which case you’ve supported moves aimed at bolstering the money supply, or whether you view them as destroyers of the American economy, in which case you’ve viewed their decisions as setting us on a course toward inevitable and out-of-control inflation.

Those worries about the Fed, the dollar, the U.S. and the future in general have played no tiny part in lifting investor interest in precious metals. You don’t have to be a commodities trader to know that gold and silver have been very good performers in recent years. Start with silver. Even after the decline from last year’s trip to near $50 an ounce, if you’ve owned the metal for around two years you’ve almost doubled your money. As of now, it’s about $32. Gold is off a couple hundred dollars from it’s high near $1,900 an ounce a few months ago, but it still has had an outstanding run. In the last two years you’re up about $500 and over five years by roughly $1,000.

Supporters of physical metals as legitimate currencies like to view themselves as practical. Detractors like to mock them as helmet-wearing cave dwellers. But we’re getting to the point where the dollar’s fate, as well as that of the metals, isn’t simply an academic exercise. See Utah, where Gov. Gary Herbert recently signed legislation liberalizing the use of gold and silver as currencies. When you’re talking about metals as legal tender in one of the lower 48, that’s saying something about the times in which we live.

And Utah’s not alone, potentially. CNNMoney noted a couple of months ago that more than a dozen states have lawmakers in office who are at least exploring options to the dollar. On the federal level, long-serving U.S. Rep. Ron Paul, who, yes, is still seeking the GOP nomination for president and whose image made an appearance on a silver coin a few years ago, has been one of the nation’s most visible proponents of dollar alternatives for years.

So is Utah the start of a trend? We can’t say that for sure yet, but the issue isn’t going away. Of course, neither is the Fed, and neither is the debate.

Full article

“WASHINGTON�(CNNMoney) — The European Central Bank has pulled out all the stops over the past few months to prevent a credit crunch by providing banks with €1 trillion in ultra-low cost financing.

That €1 trillion move, which was hailed as a game changer, helped ease pressure on eurozone nations as some banks used the money to buy government bonds.

But the potency of the ECB’s two long-term refinancing operations, or LTROs, appears to be fading as yields on Spanish and Italian bonds have shot higher in recent weeks.

ECB president Mario Draghi has said the goal is to support the economy by helping banks that have been struggling to fund themselves amid concerns about exposure to sovereign debt. He has called on eurozone officials to take advantage of improved market conditions to push ahead with fiscal consolidation and structural reforms aimed at increasing economic competitiveness.

Still, the renewed tensions have raised speculation that the ECB could resume its controversial purchases of government bonds.

Robert Zoellick, the outgoing president of the World Bank, said Thursday that the ECB’s “extraordinary actions” were appropriate, although he suggested that more may need to be done.

“We are now in a phase where, after the ECB provided very attractive financial resources to a number of the banks to be able to buy government debt…they are about at the end of that point and limit, so I think further actions are going to be called for,” said Zoellick….”

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Total Dollars And Deals Both Down From Last Quarter…

“Federal Reserve policies are pumping up markets to the point that the art of picking stocks based on corporate and economic fundamentals is dead, says James Bianco, president of Bianco Research.

Since the downturn, the Federal Reserve under Chairman Ben Bernanke has pumped trillions into the economy and slashed interest to ensure long-term borrowing costs stay low in hopes businesses invest and hire.

Such a policy, known as quantitative easing, pumps up stock prices in the process and has also been a tool of choice for the European Central Bank and other monetary authorities.

“Stock picking is a dead art,” Bianco tells MarketWatch.

“The most important man in investing decisions is Ben Bernanke. It shouldn’t be, but it is. We are in a post-crisis environment where the Fed is running the most extreme policy it’s ever run; Europe is even more extreme. That affects all investment decisions.”

Since Fed intervention makes short-term stock market plays the only viable investment option, most investors should go light on stocks until fundamentals return to the market’s driver’s seat and not Federal Reserve juicing, Bianco says.

Furthermore, the Fed will have to mop up excess liquidity in the marketplace once the economy does show signs of improvement or it will face heavy inflationary pressures.

“If Bernanke really wants to instill confidence, he needs to tell us in clear and precise language how the Fed intends to get out of this,” Bianco says.

“I get it that you’ve put us on this ‘sugar high,’ rammed interest rates down and stock prices up. But tell me how you’re going to stop, so this is not going to wind up like the fall of 2008 or the summer of 1979 with inflation.”

Treasurys, meanwhile, will serve as a good option to ride out current market conditions, Bianco says.”

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Source

“Advanced Micro Devices Inc. (AMD) : The second-largest maker of processors for personal computers forecast sales growth that beat estimates as supply constraints eased and demand increased for personal-computer chips.

Capital One Financial Corp. (COF US): The lender that acquired ING Groep NV’s online U.S. bank this year posted a higher first-quarter profit as credit-card rewards programs fueled customer spending.

Cepheid Inc. (CPHD) : The maker of a rapid test for the drug-resistance staph infection known as MRSA lowered its forecast for adjusted earnings in 2012 to between 50 cents and 55 cents a share from a previous projection of as much as 60 cents.

Chipotle Mexican Grill Inc. (CMG) : The burrito seller that was best-performing restaurant stock in the S&P 500 last year said first-quarter profit rose 35 percent as U.S. consumers dined out more.

Ezcorp Inc. (EZPW) : The short-term cash lender forecast earnings in 2012 to be no more than $2.95 a share, down from an earlier projection of at least $3.05 and below the average analyst estimate of $3.06.

Microsoft Corp. (MSFT) : The world’s largest software maker reported fiscal third-quarter profit that topped estimates on better-than-expected corporate software sales.

Riverbed Technology Inc. (RVBD) : The maker of computer- networking products reported first-quarter sales of $183 million, missing the average analyst estimate of $186.1 million.

SanDisk Corp. (SNDK) : The biggest maker of flash-memory cards posted first-quarter earnings of 63 cents a share, missing the average analyst estimate by 4 cents.

Tempur-Pedic International Inc. (TPX) : The maker of luxury mattresses reaffirmed its forecasts for earnings and sales in 2012, which fell short of analysts’ estimates. “

In Play

On the Wires 

This is thought to have caused European markets to pare losses this morning….

“Various group of people have been saying a lot about the end of the commodity/ steel/ metal and other super-cycles which were led primarily by China’s increasing demand.  Credit Suisse had absolutely no idea what is going to happen as different teams disagreed with each other, and Citi thinks that it’s over.  Now it is Nomura’s take.

Similar to Citi’s argument, Nomura thinks that while commodity consumption per capita-type of analysis shows that China’s metal consumption does not look very stretched, this type of analysis is likely understating the true usage.  Citi argues that the value in use (i.e. taking the prices of those metal into account) analysis shows that China has overtaken most of the developed world in terms of metal consumption, while Nomura points out that the amounts of various metal used per USD1 million of GDP for China are basically outliers and outrageously high.

Why we are different is more important than the fact we are different: Our analysis is focussed on metal intensity of China’s GDP, not per capita metal consumption

The point we wish to emphasize to readers is not so much that our forecasts are different, but why they are different.

We have performed a detailed analysis of metal intensity of GDP for steel, copper and aluminium in the following pages, which we believe clearly outlines our view that China’s economy is not large enough (in GDP terms) to support a continuation of the rapid growth in metal consumption seen in 2000-11.

Our conclusions are based on an analysis of China’s metal intensity of GDP rather than metal consumption per capita, and reflect a simple premise that while a country’s population size may be an important indicator of a country’s potential demand for industrial metals (per capita), the ability to meet potential demand is determined by the quantity of metal consumed in relation to the size of economic output (ie, GDP, not GDP per capita). Hence, in our view, metal intensity of GDP is a more important variable to monitor than per capita metal consumption.

The three charts below show the per capita consumption.  As you can see, China is not really using ridiculous amount of various metals on a per capita basis.

Source: Nomura

On a consumption per GDP basis, however, China is outrageously high.  In other words, to produce the same amount of GDP being generated, China is already using much more Steel, Copper and Aluminium than most other countries, as shown in the following three charts:

Source: Nomura”

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DUH. Perhaps the behavior and gross negligence of bankers should be considered….

“Italian and Spanish bonds fell as the Group of 20 nations said Europe’s debt crisis still poses a threat to global growth.

The declines pushed the yield on the Spanish 10-year bond above 6 percent for first time in four days. The G-20, whose finance chiefs are meeting in Washington, cited “the situation in Europe” first among drags on the world economy, according to a draft statement obtained by Bloomberg News. French 10-year bond yields reached the highest in almost three months before the first round of presidential elections on April 22.

“Underlying sentiment is still pretty nervous and people are still pretty worried about the fiscal prospects in Spain,” said Nick Stamenkovic, a strategist in Edinburgh at RIA Capital Markets Ltd., a broker for banks. “With French elections starting, investors remain on the defensive toward risk markets. That will continue near term.”

The yield on Spain’s 10-year bond increased five basis points, or 0.05 percentage point, to 5.98 percent at 9:42 a.m. London time, after being as high as 6.04 percent. The 5.85 percent bond maturing in March 2022 fell 0.365, or 3.65 euros per 1,000-euro ($1,316) face amount, to 99.06. Italy’s 10-year yields climbed six basis points to 5.67 percent.

French 10-year yields were little changed at 3.10 percent, after reaching 3.17 percent, the most since Jan. 25. The extra yield that investors get for holding the securities instead of German bunds widened to as much as 149 basis points, the most since January. French securities slipped this week as Citigroup Inc. said it expects the nation’s credit rating to be cut over the next two to three years….”

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But we’ll also confess to getting a bit nervous right now.

Why?

Two reasons:

First, the Apple zealots have gone silent.

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Robert Sinn the Stock Sage

For roughly six months during 2006 I worked as a proprietary trader at a small but well known prop trading firm in South Florida. It was a small office with about a dozen experienced traders (some much more than others but there were no newbies) who traded anywhere from $500,000 to $5 million accounts. The guy who invited me to work in this office was also a veteran trader himself who happened to also be one of the firms managing partners. His name was Mark and he also happens to be the best trader I have ever personally had the pleasure of witnessing with my own eyes.

Read the rest here.