DSK strike back

El-Erian also commented on the IMF loan with the ECB

Pawn shops are experiencing high volume growth this holiday season.

Bargain hunters rule retail

(via The Economist)

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ON CHRISTMAS DAY, millions of Britons will gather around the television to watch “Downton Abbey”, a nostalgic soap opera set in the days of country houses and dignified butlers. Back then, gentlemen cultivated the land (and occasionally went to war); they did not run a business, a task far beneath their station. In living memory, some middle-class Britons would not allow delivery boys to come to their front door; the tradesmen’s entrance was at the side.

This sniffy attitude towards commerce was not confined to Britain, nor did it die out with liveried footmen and debutante balls. Aristocrats across Europe were equally suspicious of the nouveaux riches. And their modern descendants, the middle-class intelligentsia who populate the continent’s universities and staff its public sector, have a tendency to despise the businesspeople who generate the wealth needed to fund their way of living. There is great distaste at the idea that political choices should be dictated by “the markets”; investors should just hand over their money and not ask whether it will be paid back.

French politicians will defend to the death the agricultural subsidies granted to their farmers. After all, the farmers comprise la France profonde, the heartland of villages and vineyards. But the same politicians are withering about the idea that David Cameron, the British prime minister, might relegate Britain to the fringes of Europe in order to protect the country’s financial-services industry.

One can see a similar attitude in the debate about Germany’s role in creating the current euro-mess. Who are these Germans, with their work ethic, their competitive industrial sector and their success in exporting to Asia? Other Europeans may regard Germany with grudging admiration, but they see it less as an example to be copied than as a tiresome nag, forever blathering about fiscal probity. Let the Germans soil their hands with trade while the rest of us live off the prosperity it brings.

Perhaps these attitudes go all the way back to the ancient Greeks and Romans. Their elites had slaves to attend to their needs. Their lives were not idle, but the path to respectability was through military service or farming, rather than trade. However, it was the merchants bringing the grain from north Africa to Rome who kept the empire fed.

These attitudes persisted through the Middle Ages, when moneylending was a despised activity to be left to minorities like the Jews; sovereign risk in those days was the danger that the king would imprison or execute his creditors to avoid repayment. When mankind began to escape the Malthusian trap of subsistence living in the late 18th and early 19th centuries, the attitude towards the new industries was one of disgust for the “dark, Satanic mills”.

Admittedly, manufacturing is now seen in a rather more positive light. A far smaller part of the economy, it is bathed in nostalgia: real men making real things. Once a job on a production line was a soul-destroying drudge; nowadays that label has fallen on service-sector jobs in call centres and fast-food restaurants.

Apart from technology, the three most successful industries of the past 50 years have been finance, pharmaceuticals and energy. Look at the way those sectors are portrayed in films and in TV dramas and the same attitudes prevail. Financiers are unthinking brutes, whose obsession with numbers is a form of autism. Multinational drug companies are vast conspiracies selling products with fat margins and hiding their deadly side-effects. Energy companies are despoiling the planet.

All these industries are, of course, legitimate subjects for criticism. But such lofty attitudes towards commerce are easy to adopt in a relatively rich society, in which few have to worry where the next meal is coming from. Europeans have had a pretty privileged existence over the past half-century or so, riding on the back of America’s global dominance. But the economic power is shifting towards Asia, a region where many people are prepared to work hard to get ahead and business isn’t always a dirty word.

Eventually, the great estates like Downton Abbey fell into decay. The cost of maintenance soared while death duties depleted the owners’ capital; the servants found better-paying jobs in manufacturing. The aristocrats were forced to discover a head for business, turning their estates into safari parks and their conservatories into tea shops. As their populations age and their relative economic weight declines, Europeans may need a similar change in attitude towards the sordid business of earning a national living.

News stories saying 50 percent of Americans are low-income or in poverty may be wrong, Census analysts in LA said.

You may have heard worried news reports that 50 percent of Americans had either fallen into poverty or are considered low income.

UPDATE: Census Bureau clarifies poverty figures.

But while poverty in the United States is certainly an important issue, those figures appear to be wrong, perhaps based on a misunderstanding of the data by journalists who did not go back to the source to doublecheck their figures, said analysts at the U.S. Census Bureau district office in Los Angeles.

NBCLA worked with three data analysts at the Census Bureau to check the data, and the real figures do indeed appear to be quite different.

Read the rest here.

Chart porn addicts only

Not what we need

Morgan Stanley (MS: 15.23, +0.17, +1.13%) finally threw in the towel.

After months of denying that the big Wall Street investment bank had plans to announce across-the-board job cuts if business conditions didn’t improve, the firm announced Thursday morning that it will slash about 1,600 jobs, or a little more than 2% of its total workforce.

In July the FOX Business Network was first to report that Morgan was drawing up plans to slash jobs beyond the previously announced cuts of about 300 brokers from its “retail” division — which sells stocks and other securities to individual investors — if business conditions deteriorated. Morgan has the largest retail sales force with about 18,000 brokers.

The FOX Business report was initially denied by press officials at the firm as fear spread among bankers and traders that slowing business conditions were likely to be addressed through job cuts. Adding to the confusion: shares fluctuated wildly over the summer as investors speculated that Morgan was holding sovereign debt and other securities tied to several troubled European countries.

Morgan continues to deny that it has significant exposure to Europe, though today the firm finally confirmed its job cutting plans.

“As we conduct our year-end performance management process and evaluate the right size of the franchise for 2012, we anticipate the elimination of approximately 1,600 positions across the firm globally impacting all job levels — to take place early in the first quarter of 2012,” the firm said in a statement.

Shares of Morgan have fallen more than 40% this year; they rose a little less than 1% on the news.

Morgan isn’t the only firm to announce cutbacks as stiffer regulations and a slowing business environment crimp Wall Street profits. Nearly every major firm is paring back staff, including Morgan’s arch rival,  Goldman Sachs (GS: 92.93, -0.32, -0.34%).

Morgan CEO James Gorman has already announced that executives at his firm should expect much smaller bonuses this year, with some receiving no bonus at all.

“The government constraints put on this industry in terms of earning money has never been seen in any other industry,” said securities analyst Dick Bove. “And the result is they have to fire people. This isn’t specific or unique to Morgan Stanley.”

What makes Morgan’s situation unusual is the amount of confusion surrounding the job cuts, and the contingency plans that were in place. Some analysts have speculated that the firm didn’t want to concede it was likely to cut its staff so as not to give credibility to fears it may face losses tied to Europe.

Read more: http://trade.cc/rec

Final revision of November’s read took China’s manufacturing index from 49 to 47.7…

Full article

(Reuters) – Applications for refinancing on home mortgages jumped last week, even as demand for new home purchases dried up, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.1 percent in the week ended Dec 9.

The MBA’s seasonally adjusted index of refinancing applications climbed 9.3 percent, while the gauge of loan requests for home purchases tumbled 8.2 percent.

The refinance share of total mortgage activity rose to 79.7 percent of applications from 76.0 percent the week before.

Fixed 30-year mortgage rates averaged 4.12 percent, down 6 basis points from 4.18 percent the week before. It was the lowest rate this year, MBA said.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Some good news here….

Crazy chart porn

A good analysis of how Europe can hurt the U.S.

Full article

All signs of a slowing economy; the question is how hard or soft will it be ?

Full article

Interesting read for all its assumptions and accusations…

A mistake or a calculated misdirection ?

Language has changed for the better from the previous FOMC release, but risks remain form the EU crisis.

Full article/report

from CNBC.com

Fine whisky has been part of Scotland’s heritage for over 500 years, but it is only recently that the investment opportunities for its most famous export have become clear. With global demand for luxury whisky on the rise, putting your money in Scottish single malt could make you some pretty neat returns.

Jonnie Miles | Getty Images

“Over the last 10 to 15 years, the demand for whisky has just increased,” said director ofThe Whisky Exchange, Sukhinder Singh.

“My feeling is that the risk in whisky is quite low,” he said. “I can just feel the demand globally; even very recently I’m watching prices go wild over the past six months.”

While the US remains the top Scotch whisky importer, with more than $400 million sold there this year, Asia has seen the largest increase. Demand from Singapore rose 64 percent, making it the third largest importer, and in Taiwan demand was up 45 percent.

Whisky writer Jonny McCormick explained global interest to CNBC: “Just in the last couple of years we’ve seen new auctions open up by Bonhams in New York and in Hong Kong, and these sales are extremely popular. We’ve seen nearly 100 percent sales by lot and by value and the American collecting market is extremely lively. The Chinese and Japanese market is very popular.”

The Macallan distillery is one of Scotland’s most famous brands, and has become a strong name in whisky investment.

David Cox, director of fine & rare whiskies at the Macallan, told CNBC, “We were one of the early pioneers if you like, in the release and availability of very rare and old whiskies. As we released these onto the market, that, together with the reputation of the Macallan, attracted collectors and connoisseurs around the world.”

Cox also highlighted the increasing importance of less traditional markets.

“Russia has become a very, very important market for us,” he said. “There’s still many collectors in Europe and certainly North America as well, who are on the lookout for special Macallan bottlings. But as a proportion of the ones that we are releasing these days, certainly we are seeing a higher and higher percentage going to Asia-Pacific and to Russia.”

For the potential investor, names like the Macallan are a great bet; a 64-year-old Macallan auctioned last year for charity achieved a world-record price of $460,000. While of course not all bottles are fetching these kinds of prices, Singh says investors have a budget in mind—and enough space to house a collection—then getting into this market is easier than it used to be, and specialist shops and auctions are the places to be.

“It’s much easier now that it was a number of years ago,” he said. “As the demand for whisky has increased, more and more specialist whisky shops have cropped up.

“There are a number of auction houses.  I remember when I started there was only one, and there was only one auction a year. I think today there are three or four auction houses doing whisky and each of them are having maybe anywhere between three to four sales a year, which is quite a lot.”

“A collection of about 120-150 bottles … is a nice size collection. You’ll have a balance of some really standard stuff, you’ll have some very rare stuff which is quite expensive, but it’s a controllable size.”

READ THE REST AT CNBC