Links 8/10/12

Drunk Bear Family Downs Over 100 Beers During Bear Rager Gawker

Environment: The end of the line: Many of the world’s best-known fish and whales are in danger of extinction Financial Times

The Hidden Power of Whale Poop Wired (Chuck L)

Go Back You Fool! An Irish Sailing Common Dreams (Aquifer)

The Airport Baggage Carousel Is Not A Good Napping Spot Consumerist

August 9, 2012 – Fires in Sicily NASA (Aquifer) :-(

The Wall Street Journal: Dismissing Environmental Threats Since 1976 Media Matters (furzy mouse)

Demand for water outstrips supply Nature (Aquifer)

UN urges US to cut ethanol production Financial Times

Farmer’s guilty plea may signal tough new attitude on fake organics McClatchy

Chinese capacity utilisation plummets MacroBusiness

Defiant Pussy Riot tell court: we are freer than those who prosecute us Independent

NYPD unveils new $40 million super computer system that uses data from network of cameras, license plate readers and crime reports Daily News (Aquifer)

Just 14% Think Today’s Children Will Be Better Off Than Their Parents Michael Shedlock

NPR Planet Money Host Adam Davidson Under Fire from Rogue Media Ethicists New York Observer. This is important validation. And the Observer is read by NYC journalists. It might rattle the Times if a lot of readers sent this to its ombudsman as well as its editor in chief.

Ex-Goldman programmer faces new charges Financial Times. Why is a public prosecutor acting like Goldman’s private attorney???

Bonds for the Long Run Barry Ritholtz. Although he’s right about Siegel, I disagree with the driver of the cult of equities. There was an Ibbotsen and Sinquefield study that was published in the 1980s that argued that equities provided a 7% return premium over the risk-free rate. That 7% was gospel for quite a while.

Obama, Not Reid, Should Be Taking on Mitt Romney’s Tax Record Matt Taibbi

Neil Barofsky on ‘Foaming the Landing’ for Banks PBS Newshour

JPMorgan revises down capital levels Financial Times

Charts of the Day: Trading Volume Slump Continues WSJ Marketbeat. More proof of bot-dominated markets.

FHFA’s Stand Against Eminent Domain Plans Likely to Prevail American Banker. Wow, this is an embarrassing article. While yours truly said yesterday FHFA could make lots of trouble by threatening to end Fannie and Freddie loans in jurisdictions that did mortgage condemnations, this article goes on the premise that the GSEs are Federal entities. No they aren’t, they are private companies.

Osborne lobbies Geithner on StanChart Financial Times. This is getting funnier with every passing moment. Get a map! Washington is not Albany! Geithner has no leverage over Cuomo. I know the protocol is to call your counterparty and Osborne does need to tell SCB he did what he could, but if he thinks this will accomplish something, he’s got it wrong.

* * *
lambert here:

D – 29 and counting*

Much less is it adviseable for a Person to go thither [to America], who has no other Quality to recommend him but his Birth. In Europe it has indeed its Value; but it is a Commodity that cannot be carried to a worse Market than that of America, where people do not inquire concerning a Stranger, What is he? but, What can he do? –Ben Franklin, Information to Those Who Would Remove to America

Montreal. Carré rouge: Across Montreal little red squares, sprayed on sidewalk corners, drawn into bus stop walls, or pinned to shirts, speak to the historic nature of Quebec’s ongoing political crisis sparked by a massive student strike.” … Gabriel Nadeau-Dubois resigns as CLASSE co-spokesperson: “The CLASSE, with or without me, will continue to accomplish great things: I am not, and have never been, a leader. Through leaving, I will prove this beyond doubt.I am leaving, but the movement will carry on. What I am leaving is not the mobilization, the struggle, nor the CLASSE: I am leaving my role of spokesperson. I will still be at your side, in the street and in assemblies.

Occupy. Tinpot tyrants: “David C. Gorczynski [of Occupy Easton (PA) was arrested after walking into a pair of city banks and displaying two signs, one reading, ‘You’re being robbed,’ [true] the other reading, ‘Give a man a gun, he can rob a bank. Give a man a bank, he can rob a country,’ [true] authorities have said. Gorczynski is charged with felony attempted robbery as well as lesser charges of making terroristic threats and disorderly conduct.” A felony? For a sign? What’s wrong with these people?

CA. Police killings: “The man began charging at the officers with the [aluminum baseball] bat raised toward them, and fearing for their lives the officers shot him several times, according to police. [The man] died from his injuries.”

CO. Fracking: “A petition for an anti-fracking ballot issue, filed July 20 by the group “Our Health, Our Future, Our Longmont,” has enough signatures to go before voters in November, [the] City Clerk announced. The measure would amend the city charter to ban hydraulic fracturing, or ‘fracking.'” (mr)

FL. Voting: “The DOJ sent subpoenas to nine of FL’s county election supervisors, demanding extensive information as to how the counties may have sought to remove non-citizens from the voter rolls. ” … RNCon: “GOProud, the org of gay conservatives, is holding an event at the RNCon called ‘Homocon 2012.'”

IA. Disemployment: “The self-help computer kiosks that have replaced three dozen IA unemployment offices do not adequately provide access to services for job seekers, an unreleased report by the U.S. Department of Labor shows. … Wind: “The lines are now drawn on a political hot button in Iowa: a lucrative tax break for wind energy. Romney is against it, Obama favors it. [IA]has more wind energy jobs than any other state in the nation.” Wind is big in CO too. … Memories: “DNC Chair Debbie Wasserman Schultz will be at the IA D’s booth on Friday, August 10, from 11:30 to noon. Last year members of the advocacy group Iowa Citizens for Community Improvement confronted Wasserman Schultz during her State Fair appearance, [which] contributed to IA D Chair Sue Dvorsky’s public denunciation of Iowa CCI shortly thereafter.”

LA. Market state: “[C]harters have expanded in New Orleans to the point where they educate nearly 80% of the city’s public school students. “

MD. Foreclosure: “The rate of new foreclosure filings in MD far exceeded any other state’s this spring, a spike caused in large part by the national robo-signing legal settlement that unleashed a flood of new cases. Almost 20 in every 1,000 home loans in Maryland — twice the national average — were drawn into the foreclosure process during April, May and June.”

MI. Referendum: “The MI Board of State Canvassers met today in Lansing and followed the order given to them by the state Supreme Court to put the repeal of Public Act 4 – our state’s anti-democratic Emergency Manager Law – on the November ballot.”

NC. DNCon: “Labor unions aren’t slated to sponsor any official convention events, according to a recent convention itinerary obtained by POLITICO. Unions are also refusing to put up the money to back get-out-the-vote efforts they’ve funded in the past.”

NV. Disemployment: “Even by Las Vegas standards, it was a shocking billboard: A mannequin dangling on a hangman’s noose below a black sign with the ominous words ‘Dying for Work.’ Sebring Frehner, an Occupy supporter… told The Associated Press he didn’t know who put the hangmen up, but applauded the message behind it. ‘People saying it’s in bad taste are living sheltered lives and don’t pay attention to what affects the working class,’ he said.” Fascinating AP goes to Occupy for a quote.

NY. Leading indicators: “In recent months, authorities have reported a rash of [metal] thefts. From copper wiring at electrical substations to manhole and catch basin covers to one brazen episode where thieves chopped away a 250 pound block of metal from a bridge. Syracuse schools have been targeted with thousands of dollars in thefts from campuses across the city.” Tweakers, a rotten economy, or both.

PA. Voting: “Examining wards by racial population, there was a strong relationship between high white population percentages and a low percentage without valid PennDot ID, and between a high black population percentage and a high percentage without valid PennDot ID. A moderate positive relationship was found between a neighborhood’s Latino percentage and its percentage of invalid PennDot ID.” … Fracking: “The Department of Environmental Protection has fined EXCO Resources $47,500 for operating unpermitted residual waste transfer stations in Lycoming and Sullivan counties in 2011 and earlier this year.” The waste: Fracking flowback and sand.

TX. Public good: “The expansion of Houston Metro got another boost from the federal government with the allocation of $188 million in additional construction funding for the North and Southeast light rail lines.”

WI. Police blotter: “A unicyclist allegedly selling marijuana downtown was arrested when he pulled numerous bags of pot out of his shorts, claiming it was for his personal use.”

“The Economy.” Disemployment: “The recovery looks safe for those of us who are not already screwed.” Especially in the swing states!

Outside Baseball. Education, snark watch: “The reason reformers keep saying that it is ‘for the children,’ is because it’s not.”

The trail. Polls: “While 56.5% of women say they are unwilling to reduce the United States’ gargantuan military budget to rein in deficit spending, only 50% of men are unwilling to put the Pentagon on the cutting table.” … Battleground states: “Here we are in August and what the Obama campaign, at the beginning of all this, said would be the battleground states are the battleground states. They are not what the Romney camp said and hoped it would be, expanding to places like PAand MN (and MI and WI still look like reaches).:

Green Party.Ballot access: “Today the Stein campaign announced success in petition drives led by Greens and Volunteers for Jill Stein groups in AK, KS, MD, WA, and WI. In each of these states, state elections authories have received more than enough qualified signatures to place the Green Party or the Stein/Honkala ticket on the ballot.” … TN: “A 6th U.S. Circuit Court of Appeals ruling Thursday assures that Green Party candidates will have a place on TN’s November general election ballot in several races – including Martin Pleasant of Knoxville as the party’s U.S. Senate nominee.”

Romney. Losing the political class: “Shouldn’t Romney be wiping the floor with Obama? … The more likable candidate wins. Not always, but almost always.” This means “likeable” to the press corps (like Bush, unlike Gore). … Social media: “Romney has been scrutinized recently for his abnormal increase in new followers (@mittromney), indicating that these followers had been purchased in the same way as the Dealers/Abuser scenario from our study. We do note that these followers could have been purchased by either himself, his associates or by his opponents.” … Adelson: “Las Vegas billionaire Sheldon Adelson, a top R campaign donor, sued Dallas lawyer Marc Stanley and the Jewish D group he leads for $60 million on Wednesday over claims that he condoned prostitution at his Chinese casinos.” … Endorsements: “The OH-based [Scotts Miracle-Gro Company,] familiar as the producer of a ubiquitous plant fertilizer [make up your own jokes], is now a political player, donating $200,000 in June to the Restore Our Future super PAC supporting Republican presidential candidate Romney.” I use compost. I don’t need or want weird green chemical powders. Not a reason to vote for Romney! … Interview: “[ROMNEY:] Ask one question. But I’m holding up traffic in Chicago trying to—I’ve got the Secret Service and all the press and we’re stopped in front of a place of business. So shoot.” A surprisingly un-bot-like remark (though a CEO-like tone!) Reading this interview, I think Romney could do better in the debates than people think. Then again, immediately after: “I’m not a business.” But “corporations are people, my friend!” Good analysis of the interview here.

Obama. Enthusiasm: “Intermixed with inspirational lines from Obama’s 2008 campaign speeches, are lyrics like, ‘It felt like change and it’s a hope I still remember… But the change I got was that I moved in with my mother.'” … Winning the political class: “[HALPERIN: ] As a snapshot of a key metric — control over their extended teams and keeping people in line — Chicago seems to have a big advantage on this one.” The “have a beer” trope: “If all elections come down to who voters would rather have a beer with, President Barack Obama has a definitive lead, and not just because Mitt Romney, his Republican challenger and a devout Mormon, is a teetotaller.” “Likeability” once more. … Tax return flap: “There is no evidence that Mr. Romney paid no personal taxes, and his campaign has said there was no year in which he paid nothing. But by declining to release additional years, Mr. Romneyhas given Democrats an opening to speculate, and they are plowing through it.” …. Teebee: “Titled ‘He Did It,’ the advertisement asks if anyone can truly remember where Romney was the night of the child’s murder, and whether the U.S. populace wants a president capable of strangling a little girl and dumping her body in her parents’ basement.”

* 29 days until the Democratic National Convention ends with big trays of lutefisk for everybody on the floor of the Bank of America Panther Stadium, Charlotte, NC. NY has 29 electoral votes.

* * *

Antidote du jour:

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  1. fresno dan

    This to me is what has shaken my belief in the “market” to its core. Not that DoJ won’t prosecute – obviously laws do not apply to bankers.
    But here we have irrefutable proof that Goldman RECOMMENDS something, and than bets against it. I expect that of Goldman. But what is bizarre, inexplicable, confounding is that humans still do business with Goldman.

    1. Rex

      I agree on GS.

      …but I must now don my *Then/Than Defender* suit.
      Case in point — “and than bets against it”

      Why do we seem to have this trend to use these two words completely backwards? I must stomp my foot in frustration. Please stop spreading this common internet misuse phenomenon.

      Skippy, warning, I’ve been cutting you slack on the to, too, two issue as it is less common.

      1. nowhereman

        Can’t agree more, and the Observer piece made the same mistake, and these are educated people who write for a living. Is it laziness? Then/than, mistakes ruin the reading experience and leave me doubting the intelligence of the writer,

      2. JEHR

        I just imagine such usages result from hitting the wrong key and forgetting to proofread; otherwise, it would drive me crazy too!

        1. tomk

          Another more obscure but too common misuse is pour instead of pore when used in the sense of close examination.

          1. Aquifer

            Shucks, I don’t know, for some stuff is may well be better to pour than pore over it, or pore then pour over it ….

          2. Aquifer

            oops, “is” is not, “it” is …. or are we now in the “depending on the meaning of ‘is'” territory ….

          3. Maximilien

            “Flaunt” used instead of “flout” is a mis-usage that drives me crazy!

            Example: The bankers flaunt the law.

            While they flout their wealth, I suppose. Completely intolerable and inexcusable!

            (Until, of course, everybody mis-uses the word. Then it will be completely acceptable and sanctioned by dictionaries. Grrrr…..I need a Valium.)

          4. Procopius

            The one that truly enrages me is “hoard” and “horde.” Is it so hard to think, “The horde of Mongol horsemen discovered a huge hoard of gold.”? Others, “discreet” and “discrete.” I have to say I’m glad our brains are hardwired to detect these things when we’re reading, but I do find myself thinking too often, “I don’t think that word means what you think it means. Now, let’s see, what could he reasonably be trying to say here?”

      3. Hugh

        With a comparison, better than then than then.
        With time, better then then than than.

        What could be clearer?

        1. tomk

          I’m confused, did you mean to write? –with comparison, better than than then then. With time, better then than than then.

    2. JGordon

      That’s really funny. Since Levin’s famous “shitty deal” tirade, I have been thinking myself that anyone who does business with GS and then loses money by all rights ought to be sued for willful negligence by all interested parties.

      Well–maybe there is just a sort of masochistic urge among fund managers that makes them enjoy bending over and getting muppeted? I mean obviously you’d have to be out of your mind to put your own money at risk based on GS advice, but losing other people’s money isn’t so bad.

      1. aet

        Compare and contrast the treatment of Standard Chartered, which did NOT participate in US sub-prime mortgage lending.

        However, Standard Chartered’s past actions somehow “threaten” the course of US Middle Eastern policy…so the focus is on them – like a laser beam.

        Goldman Sachs? Pure as the driven snow, compared to Standard Chartered….right? Right? That’s what the banking regulators – Fed and State – are saying, from what I see.

    3. Wall Street = organized crime

      Wall Street = organized crime. Instead of bribing narco cops, they bribe the politicians and regulators to bend the law and/or its enforcement to their favor, so that ultimately Wall Street has become a platform for extracting money from the real economy (per Mark Cuban’s words, if I recall correctly) rather than a means for real businesses to obtain financing. Stealing is “legal”, either by law or by lack of enforcement of law.

      I also wonder whether to perceive the situation this way: Finance is a critical tool for an empire. Has the US has “weaponized” finance? Was GS’s activity to help Greece into the EU an operation to undermine a competing currency? When foreigners sell you goods in exchange for your (endlessly printable) bonds at low yields, it truly is a privilege.

  2. Richard

    So to complete the then/than picture, will people PLEASE stop saying, “different than…” The expression is, “different FROM…” Thank you.

    1. aet

      R No no, that’s the old way of sayin’.

      Times change and so does usage: dictionaries and grammarians should strive to accurately describe, and ought not to attempt to prescribe.

      Just like economists – many of whom seem to mis-understand the purely descriptive economic thinking of Adam Smith. For Mr Smith was not seeking to PRESCRIBE any specific course of action for economic activity: he sought to DESCRIBE the economic action he observed, as the best, most rational, way to understand it.

      He did NOT seek to create an infallible new God called “the market” – quite contrary to what presently passes for “conservative economic thought” in the popular press!

      1. Wall Street = organized crime

        >> Times change and so does usage: dictionaries and grammarians should strive to accurately describe, and ought not to attempt to prescribe.

        You’re encouraging an inconsistency. We don’t say “X differs than Y”. We say “X differs from Y”.

        1. ralph waldo emerson

          A foolish consistency is the hob-goblin of little minds, adored by little statesmen and philosophers and divines.

    1. Valissa

      It’s refreshingly ‘in your face’ to another wing of their party… way too politically incorrect for any liberal leaning group to come up with… but a hilarious example of intra-party squabbling… LOL…

  3. LucyLulu

    Romney is opposed to $1.6B in wind energy subsidies next year. Yet two months ago, his energy advisor, Hamm, argued in front of the Senate that repeal of $40B in oil subsidies over the next 10 years would sideline drilling and exploration and derail our path to energy independence.

    1. LucyLulu

      Hilarious piece from The Onion, Lambert. Now that it’s known that Mittens will steadfastly refuse to release his tax returns, the allegations the Obama campaign can make is limited only by their imaginations. Reid merely realized this sooner than the rest of us. A Mormon thing, perhaps?

  4. Richard Kline

    Pussy Riot rock the agitprop. Three anarchos on song against the malignancy of state power, I can shout out for that. And if the Velvet Tsar is gonna jail yah, it’s best to have a sense of humor, for which they don’t lack.

    1. Richard Kline

      And I look well on the post of Barry Ritholz linked to, one of his better ones for brevity, clarity, and significance even if it doesn’t box every corner of the compass on the issue as noted by Yves. The political signicance of the ‘equities give better return’ meme cannot be overstated. Really, it isn’t even touched on directly in the mentioned post. This was the sale point behind Greenspan’s handing the Fed’s regulatory power and credit distillery over to Wall Street in the 90s. This has been the sale point in the ‘get rid of Social Security, the returns are lousy (compared to equities)’ basic LIE of the 00s, which both of the oligarchical parties are still pushing hard.

      It would be much harder to convince many in the public that ‘business is better than the state’ at protecting the financial security of individuals _absent_ the ‘equities give better return’ meme. Which is, in simple English, a deliberate lie (read Ritholz’s piece, and dig after the rest). Seriously, the entire financial macro-strategy Big Money sells to Main Street is a shoddy lie, whose principal effect is to persuade rubes of modest means to hand their accumulated capital to the oligarchs and be fleeced. That couldn’t be *gulp* _intentional? Could it??

      Here’s a simple point, which despite manifest evidence most don’t believe: the function of the financial ‘system’ is _to steal your money._ When you understand this, you might be in a position to make some money dealing with it, should you have the skill and the stomach. But the point of the system isn’t to ‘move capital where it’s needed,’ or ‘to make you money,’ it’s to STEAL your money for the benefit of those who already have the most money to begin with. You’ll want to remember that, I suggest folks . . . .

      1. lambert strether

        “The function of the financial ‘system’ is to steal your money.” Exactly.

        Reminds me of the old joke: “They call it a financial vehicle because it’s designed to drive off with your money.”

        1. Ms G

          Another one might be:

          “Don’t give your candy to strangers who offer you a ride in their shiny vehicle.”

  5. MacCruiskeen

    “this article goes on the premise that the GSEs are Federal entities. No they aren’t, they are private companies.”

    That’s right–the Federales only bought a 79.9 percent stake in them, so that this fiction could be maintained with a straight face, so let’s not forget it.

    1. reprobate

      You may not like it, but they still have a private shareholders. That makes them not a government entity. These distinctions matter in legal actions like opposing the use of eminent domain.

  6. Claire

    I found this in the comments section at exiledonline by someone called “The Dude”:

    “This guy [Adam Davidson] looks exactly like a cyst with teeth and hair…”

    1. Aquifer

      The technical term for this is dermoid cyst … (been trying to remember that all day, tough getting old :))

  7. Tiger

    Barofski on PBS: the Interviwer’s prism is making him ask questions in the way that he is. What he does not get is that the banks are engaging in racketeering. It needs to be made clearer to the world that we WANT these organizations to be restructured completely and that we have the right to do so because they are public servants.

    1. MyLessThanPrimeBeef

      I may be missing a few beetles in the photo, but the flowers are lovely, if not all in focus!

    1. F. Beard

      There is no need to “cover the deficit.” A monetarily sovereign government should NORMALLY run deficits, never run a surplus and only occasionally (if ever) have a balanced budget.

    2. fledermaus

      The thing that Mish doesn’t understand is there will ALWAYS be a deficit, and a fairly large one at that. Wall Street can’t make money or do business without a steady diet of US Treasuries. Any entitlement/spending cuts will be matched by tax cuts or increases in corporate welfare to ensure the deficit remains high and the free money casino can keep on keeping on.

      Why else did Greenspan freak out about out paying off the deficit too fast after just 2 years of surpluses?

      1. F. Beard


        The US government issues its own currency and, in intrinsic terms, never needs to fund its own spending in US dollars. The issuing of public debt is an entirely voluntary act by the US government and provides the bond markets with “corporate welfare”. Just imagine what the uproar would be from the bond markets and investment banks if the US government announced it was cutting off this source of corporate welfare.

        It happened in 2001 in Australia when the Australian government had virtually caused the official bond markets to dry up when it used the surpluses it was running to run down outstanding debt. The Sydney Futures Exchange led the charge and demanded that the Government continue issuing debt, which gave the game way – if debt-issuance was to fund net government spending (deficits) then why would they be issuing debt when they were running surpluses?

        Answer: it was patently obvious that the outstanding debt was private wealth and its risk-free nature allowed the private investment institutions to price other risky assets and maintain a safe haven when uncertainty rose (by holding bonds). from

        1. JustAnObserver

          What happened then ? Did the Aussie government cave in to the derivatives dealers & start borrowing again ?

          A broader question would be whether there’s ever been a situation where a “National Debt” has been payed off and then kept at 0 for a long-ish time.

      2. Robin Hood

        I guess we can take comfort, then, in the fact that we now have $16 trillion in USG debt supporting $600 trillion in derivatives. Europe is helping with the derivatives too, but who’s counting.

        Never say never. We avoided the catastrophe of running out of government debt and inadvertently shutting down Wall Street.

    3. Neo-Realist

      Pull out of Iraq and Afghanistan, cut out a lot of unnecessary weapon systems, and close many of the overseas military bases and you’ll go a long way. Now as to whether it is politically possible, that’s a totally different issue.

  8. F. Beard

    re Bonds for the Long Run :

    Makes sense. The present world system seems configured for the benefit of counterfeiters and usurers.

  9. Chris A

    RE: Bonds for the Long Run

    This is slightly off topic, but I’m one of those classically-trained MBA/economist types (who’s also a lefty iconoclast, go figure) and have believed that equities produce superior returns as a conviction if not an article of faith for some time. Can anybody recommend source material/research on Ritholtz’s basic thesis here? I need to learn a lot more. Thanks!

    1. Robin Hood

      Year 2000 – S&P 500 = 1400

      Year 2012 – S&P 500 = 1400

      Did pay divs at about the inflation rate, taxable at 15%.

      Ok, so that was the good one.

      More worried about going forward.

      10 year bond – 1.5%

      Then there would be that stocks/economy relationship.

      I give up.

    2. Peter Schaeffer

      Chris A,

      What follows is a short version of a longer post below.

      Check out the data from Professor Aswath Damodaran (corporate finance) of the Stern School of Business at New York University. See “Annual Returns on Stock, T.Bonds and T.Bills: 1928 – Current” ( His data shows stocks outperforming bonds over 30 years and 40 years. Note that he is using the 10 year Treasury bonds as his benchmark. Since other sources yield similar results, he is almost certainly correct in his conclusions.

      As it turns out, Professor Damodaran isn’t considered to be the leading authority on this subject (no offence Professor), Ibbotson is. What does the Ibbotson data show? Well it turns out that Ibbotson (now Morningstar) wrote about this very point (actually not quite, but close). See “Will Bonds Outperform Stocks over the Long Run? Not Likely” (

      A number of folks have suggested going to a public library and finding a copy of “Ibbotson SBBI Valuation Yearbook 2012: Market Results for Stocks, Bonds, Bills, and Inflation 1926-2011 (Stocks, Bonds, Bills, and Inflation (Sbbi) Yearbook”. A new version of SBBI is published each year.

  10. Aquifer

    As the fellow at the end of the article reflected – it’s good thing the Law of the Sea hasn’t embraced pooper scooper laws, although actually, maybe that would be a good idea – if you had to clean up after your whale, maybe you wouldn’t want to “own” one …

  11. Valissa

    Janet Napolitano-run Homeland Security treated male staffers like lapdogs, federal discrimination lawsuit charges

    Looks like the Department of Homeland Security could be renamed the Department of Hyper Sexuality.

    A blistering federal discrimination suit accuses agency honcho Janet Napolitano of turning the department into a female-run “frat house” where male staffers were banished to the bathrooms and routinely humiliated.

    Some times real news is a lot funnier than The Onion :)

  12. Peter Schaeffer

    Barry Ritholtz claimed.

    “This isn’t merely a short term phenomena: Bonds have outperformed equities over the past 1, 2, 5, 10, 30 and 40 years.”

    Let’s see if that’s completely true, partially true, or not true.

    First, we have data from Professor Aswath Damodaran (corporate finance) of the Stern School of Business at New York University. See “Annual Returns on Stock, T.Bonds and T.Bills: 1928 – Current” ( His data shows stocks outperforming bonds over 30 years and 40 years. Note that he is using the 10 year Treasury bonds as his benchmark. Since other sources yield similar results, he is almost certainly correct in his conclusions.

    As it turns out, Professor Damodaran isn’t considered to be the leading authority on this subject (no offence Professor), Ibbotson is. What does the Ibbotson data show? Well it turns out that Ibbotson (now Morningstar) wrote about this very point (actually not quite, but close). See “Will Bonds Outperform Stocks over the Long Run? Not Likely” (

    This report shows stocks outperforming bonds over the 30 and 40 year periods ending December 2010 (not 2011). For 30 years, stocks yielded 10.71% versus 8.51% for intermediate-term Treasury bonds and 10.18% for long-term Treasury bonds. For 40 years, stocks yielded 10.14%, versus 7.81% for intermediate-term Treasury bonds and 8.57% for long-term Treasury bonds.

    Ibbotson didn’t publish a comparable report for the period ending in December 2011, but the numbers aren’t too hard to calculate. For stocks the 30 year yield is 10.98% versus 11.02% for long-term Treasury bonds. Given that intermediate-term bond yields are always more than 100 basis points below long term bond yields, it is almost certain that for the 30 years ending in December 2011, intermediate-term Treasury bonds underperformed stocks.

    The 40 year Ibbotson data ending in December 2011, also shows stocks outperforming bonds. Stocks returns 9.84% over 40 years. Long-term bonds returned 8.91%.

    So far we have one time period (30 years ending December 2011) and one type of bond (20 year treasuries) where bonds outperformed stocks. Of course, it is likely that longer Treasury bonds (the 30 year) also outperformed stocks over the 30 year period in question.

    Will it ever happen again? Of course, the future is unknown, but it probably won’t happen soon. Here’s why. 1982 was not a normal yield for long-term Treasury bonds. The total return for 1982 (from Ibbotson) was 40.4%. That’s roughly 10 percentage points higher than any other year. Note that the yield on the 20 year Treasury fell from 14.57% in January to 10.62% in December. See the 20-Year Treasury Constant Maturity Rate (GS20) in FRED.

    As of December 2012, the 1982 data is out of the 30 year period. Beyond that, stocks have easily outperformed long-term treasuries for 2012 (so far).

    There is an easy test of this point. For the 29 year period starting in January of 1983 and ending in December of 2011, stocks outperformed long-term Treasury bonds. Since (as noted earlier), 2012 has been better year for stocks than bonds (so far), adding in this year’s data will show that over a 30 year period stocks have once again, outperformed long-term bonds.

    By the way, contra Barry Ritholtz, Shiller matches Siegel for the period from 1871 to present.

    If anyone is interested in the PDFs and spreadsheets used to derive these results, I would be glad to provide them.

    1. Robin Hood

      “If anyone is interested in the PDFs and spreadsheets used to derive these results, I would be glad to provide them.”

      I think you should send them to the Smithsonian, and seal them in an airtight container.

      Someday, Space Alien anthropologists will be interested in what our thoughts were.

      1. Peter Schaeffer


        Space Alien anthropologists may have higher priorites than stock returns. Of course, they may not. An economic crisis was part of the back story of “Rendezvous With Rama”.

        1. Robin Hood

          And past perfomance is not a guarantee of future returns…or however that disclaimer goes…

          I guess the Space Aliens might buy at S&P 2 ?

          But who would they pay???

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