Zeitgeist: Survivalist Reality Show Winner to Get Own Bunker (as survival condos sell out)

Well that ties a couple cultural trends together in a neat little package doesn't it.
From NBC Los Angeles:

"These are not people that you may think are living in a shelter in the middle of the woods," Spike exec says. "These could be your friends"

AP

This artist rendering released by Vivos, an underground shelter network, shows a design for an underground bunker. Spike TV will be airing a six-episode series called "Last Family on Earth" a competition in which survivalists will compete for an underground bunker in an undisclosed location. 

The Spike television network is airing a competition this fall to award a fortified bunker to a family that believes the end of the world is near.

Seriously.

The network said Tuesday that its six-episode series called "Last Family on Earth" will feature survivalists competing to show how tough and resourceful they are. The winner gets an underground bunker in an undisclosed location.

Sharon Levy, executive vice president of original programming at Spike, said the series doesn't necessarily coincide with the theory that the ancient Mayan civilization predicted the end of the world will arrive in December 2012.

Levy said polls show that many people believe that there will be some catastrophic event like an earthquake or epidemic that threatens civilization, and these are the people who will participate in the show.

"We don't think there's anything funny about that," Levy said. "We think it's a very interesting segment of the population that is very prepared, is highly intelligent....MORE

These things are apparently the hottest ticket in real estate.
From CNET:

Apocalypse-proof condos already sold out

You can survive the end of the world in this charming nuclear missile silo. The views aren't great, but there won't be anything to see outside anyway.

In a hole in the ground there lived a hobbit the remnants of humanity.

(Credit: SurvivalCondo.com)

What's your favorite doomsday scenario? Epidemic? Nuclear fallout? The Rapture redux? How about the Mayan apocalypse?

None of these will ruin your day if you live in Survival Condo, a converted nuclear ballistic missile silo in Kansas. With supplies of food, air, and water, you can wait out Armageddon underground.

For years, developer Larry Hall, a former software engineer, has been working on a 1960s-era Atlas F missile silo in north-central Kansas, turning it into luxury lockdown residences in preparation for inevitable end-times (see cleanup photos here). He says all units in the complex sold out this month, and there's even a waiting list.

Why did he want to turn this 174-foot-deep hole into condos? "To have a safe place for the increasing number of threats that are occurring," Hall says. But why are people willing to pay $2 million apiece for the 1,820-square-foot units?...MORE

HT on the second story: Dr. Hazlett who emailed at almost the same time I was debating whether it was time for an apocalypse story.

Estonia and Austerity: Growing at 7.6%; Debt to GDP 6% Hmmmm....

From CNBC:
Estonia Uses the Euro, and the Economy is Booming

It’s the euro zone Jim, but not as we know it.

Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average. 

Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece. 

Shoppers throng Nordic design shops and cool new restaurants in Tallinn, the medieval capital, and cutting-edge tech firms complain they can’t find people to fill their job vacancies.

It all seems a long way from the gloom elsewhere in Europe. 

Estonia’s achievement is all the more remarkable when you consider that it was one of the countries hardest hit by the global financial crisis. In 2008-2009, its economy shrank by 18 percent. That’s a bigger contraction than Greece has suffered over the past five years. 

How did they bounce back? “I can answer in one word: austerity. Austerity, austerity, austerity,” says Peeter Koppel, investment strategist at the SEB Bank. 

After three years of painful government belt-tightening, that’s not exactly the message that Europeans further south want to hear....MORE

As Chesapeake Contemplates Dumping Pipeline for $4 Billion, McClendon Lawyers Up With ex-SEC Hard Guy (CHK; CHKM)

 CHK is trading up 3.83% at $17.65 while Chesapeake Midstream, up 2.2% yesterday it tacking on another 5.38% in early pre-market action.
First up, Bloomberg via the San Francisco Chronicle:
Chesapeake Said in Talks to Sell Pipelines in $4 Billion Deal

Chesapeake Energy Corp. is in advanced talks to sell pipelines to Global Infrastructure Partners for more than $4 billion, said two people with knowledge of the matter.

 

The Oklahoma-City based energy explorer, facing a $22 billion cash-flow shortfall after natural-gas prices touched a decade low is discussing selling its entire stake in Chesapeake Midstream Partners LP and other pipeline assets, said the people, who spoke on condition of anonymity because the talks are private. The negotiations may lead to a deal within days and could also fall apart, the people said.

Chesapeake Midstream operates pipeline networks in Texas, Louisiana, Pennsylvania and other gas-producing states, and had 3,953 miles (6,360 kilometers) of pipe as of March 31. The partnership gets about 75 percent of its revenue from Chesapeake Energy, with the remainder from energy producers such as France's Total SA and Norwegian oil company Statoil ASA. Chesapeake Energy also owned 1,950 miles of pipelines separate from the Midstream partnership as of Dec. 31....MORE

And from Reuters:

Exclusive: Chesapeake CEO McClendon hires ex-SEC lawyer

The embattled chief executive of Chesapeake Energy Corp. has hired a top defense lawyer to represent him in a securities regulatory inquiry into $1.3 billion in personal loans, three people familiar with the situation said.

CEO Aubrey McClendon has retained Marvin Pickholz, a partner with Duane Morris and a former assistant director of enforcement with the U.S. Securities and Exchange Commission. He is counseling McClendon in connection with the SEC inquiry into loans he obtained from an investment firm doing business with the natural gas company.

The SEC is looking into whether the loans posed a conflict of interest or should have been disclosed to shareholders.

The loans from investment funds managed by EIG Global Energy Partners enabled McClendon to participate in a special perk which awarded him as much as a 2.5 percent interest in every well drilled by Oklahoma City-based Chesapeake each year.

McClendon used the well stakes as collateral for the loans.

The SEC launched its inquiry soon after April 18, when Reuters reported on the loans to McClendon, who co-founded Chesapeake more than two decades ago.

Pickholz, an aggressive and tough-talking attorney, represented a key prosecution witness in the trial of homemaking doyenne Martha Stewart on obstruction of justice charges stemming from an insider trading investigation. He is also a frequent legal commentator on television news programs....MORE

D-Day: A Little Boat that Made the Difference

First posted June 6th 2009.

There were so many heroes on June 6, 1944 that it is not right to single out any individual or group.

From the lunatic glider troops of the British 6th Airborne Division securing the Pegasus Bridge at 0016 hrs in Operation Deadstick, the pilots landing within yards of their objective, in freakin' gliders!, with a skill that Sir Trafford Leigh-Mallory, the commander of Allied air forces, would later praise as the finest feat of flying in the entire war.

The parachutists of the 82nd Airborne jumping into Sainte Mere Eglise at 01:30, where Pvt. John Steele found his place in history when his parachute got caught on the church steeple and he hung wounded for two hours before the Germans cut him down (he escaped).

The German privates in the bunkers and pillboxes at dawn, looking out at the largest armada ever assembled-
6939 vessels: 1213 naval combat ships, 4126 landing ships and landing craft, 736 ancillary craft and 864 merchant vessels.

Most of them said something that included the word Scheiße (exkrement).
(One German officer purportedly said, in disbelief, "It's impossible ... there can't be that many ships in the world." )

At 06:30 the 2nd Ranger Battalion scaling Pointe du Hoc's 100 foot cliffs under fire using ropes and ladders.

Those are some of the famous stories, and there are hundreds more.
The archetypal image though, is the beach landing, with this being one of the most famous pictures of the war:

That's a Higgins boat with troops of 1st Infantry Division (The Big Red One) on Omaha Beach.

From a 1964 interview with Supreme Allied Commander General Dwight Eisenhower:

"'Andrew Higgins..'..Eisenhower said..'..is the man who won the war for us.' My face must have shown the astonishment I felt at hearing such a strong statement from such a source. Eisenhower went on to explain, 'If Higgins had not designed and built those LCVPs, we never could have landed over an open beach. The whole strategy of the war would have been different.'" 

-Stephen E. Ambrose

D-DAY JUNE 6, 1944: THE CLIMACTIC BATTLE OF WORLD WAR II

As one writer put it:

...It wasn't very big, it wasn't blindingly fast, it wasn't brimming with big guns, and it most definitely wasn't heavily armored. In fact, it was made primarily of wood. 

But the Higgins Boat was one of the most decisive weapons utilized by the Allies during World War II. The only real dispute is whether it should be classified as a weapon.

It differed greatly from other tide-turning developments, such as the British Spitfire fighter plane, the Russian T34 tank, and the American P51 Mustang fighter. While the boat was equipped with a pair of .30 caliber machine guns, it was not an instrument of destruction....

Mr. Higgens ended up running a pretty big operation, over 20,000 employees manufacturing the landing craft and PT boats. Here's a factoid:

...In September, 1943, when the United States Fifth Army landed at Salerno, Italy, and General Douglas MacArthur's forces captured Salamaua in New Guinea, the American navy totaled 14,072 vessels.  Of these boats, 12,964, or 92% of the entire U.S. Navy, were designed by Higgins Industries, Incorporated; 8,865 were built at the Higgins plants in New Orleans, La....

This landing craft was in on every major D-Day invasion of the war. Normandy, North Africa, Sicily, Italy, and the islands of the Pacific: Guadalcanal, Tarawa, Saipan, Tinian, Iwo Jima and Okinawa.
 
Here's the site of the Higgins Memorial in Columbus Nebraska, Higgens' boyhood home, a long way from the beaches of Normandy.

See also:
Eisenhower Takes Responsibility for the Failure of the D-Day Landings

Silicon Valley Legend, Y Combinator's Paul Graham on What the Facebook Flop Means to Start-ups (FB)

From Y Combinator's Hacker News:
Paul Graham's Letter to YC Companies

Jessica and I had dinner recently with a prominent investor. He seemed sure the bad performance of the Facebook IPO will hurt the funding market for earlier stage startups. But no one knows yet how much. Possibly only a little. Possibly a lot, if it becomes a vicious circle.

What does this mean for you? If it means new startups raise their first money on worse terms than they would have a few months ago, that's not the end of the world, because by historical standards valuations had been high. Airbnb and Dropbox prove you can raise money at a fraction of recent valuations and do just fine. What I do worry about is (a) it may be harder to raise money at all, regardless of price and (b) that companies that previously raised money at high valuations will now face "down rounds," which can be damaging.
What to do?

If you haven't raised money yet, lower your expectations for fundraising. How much should you lower them? We don't know yet how hard it will be to raise money or what will happen to valuations for those who do. Which means it's more important than ever to be flexible about the valuation you expect and the amount you want to raise (which, odd as it may seem, are connected). First talk to investors about whether they want to invest at all, then negotiate price....MORE

HT: Wall St. Cheat Sheet's "SUPER SCARED: Silicon Valley Elite See Facebook’s Dark Cloud"

Paul Kedrosky also weighs in, via peHUB:
Kedrosky: First the Warning, Now the Fallout

In ways, it feels silly, comparing an alarmist email about the market by Y Combinator’s Paul Graham to the 56-page slideshow produced by Sequoia Capital in October 2008.

While both were designed to warn their portfolio companies of tough sledding ahead, an email is no carefully conceived PowerPoint. And Graham’s email is a direct reaction to Facebook’s IPO, which has negatively impacted a very small circle of people; Sequoia Capital’s slideshow was a response to a deep global financial crisis precipitated by some of the most dramatic days that Wall Street has ever seen.

Still, instinct tells me Graham’s message will pack more of a punch than even he is willing to concede. (He told AllThingsD today, “I never thought anyone would care enough to treat this as news. The email is mostly fairly technical stuff about what to do if the funding market turns bad.”)

Economist Paul Kedrosky, who I caught up with a bit earlier over the phone, seems to agree. His reaction to Graham’s email, edited for length, follows:

There’s already been an impact.

There’s been this rapidly expanding bubble, in terms of people getting excited about this whole domain of social, and social media, and social media on mobile. And as hedge fund guy recently said to me, ‘Having Facebook s**t the bed’ [forces a lot of the air out of that bubble].

It’s causing a whole bunch of things to happen at once. First, people who were on the margin, those who were thinking of bringing new money to market in terms of funding startups, are now reconsidering. It doesn’t take much to [spook] them if they were at the margin. Then a bunch of people who were counting on pulling money out of Facebook, including secondary traders who might have cycled their capital back in to the market, have less money than they thought they would right now. More, they’re newly convinced that this marketplace is shakier than they’d thought. ...MORE

Earlier:
Y Combinator March, 2012
"Frighteningly Ambitious Startup Ideas"

Sequoia, Nov. 2008
Venture Capital: From the Valley Comes a Warning

CNBC: "Warren Buffett's Stock Buying Secret Revealed"

From CNBC's Warren Buffett Watch:

The secret is out.

Warren Buffett's Berkshire Hathaway held over 1.6 million shares of Lee Enterprises, about 3.2 percent of its outstanding shares, as of March 31, according to a filing with the SEC late today.  On that date the stake was worth $2.1 million.  The total market value of the company is around $60 million.

The stock is soaring in after-hours trading, up $0.29 to $1.44 as of 4:40p ET.  That's an increase of more than 25 percent.

The Lee stake is tiny by Berkshire standards, but its particularly interesting because Buffett's company had wanted to keep it secret....MORE

Stocks That Have Underperformed Facebook Since May 17 (FB)

Lifted in toto from Bespoke Investment Group:

This could be one of the shortest lists we have published this year.  In the table below, we list the Russell 3000 companies that have seen larger percentage declines than Facebook's (FB) 31.92% drop since the company priced its IPO on 5/17.  As shown, there are only six companies that have seen a larger decline in percentage terms than Facebook (FB).

Taking a closer look at these six stocks, this is probably not the company FB intended to keep when it IPOd.  Not a single company on the list had a closing price of more than $2 per share today, and one of the companies, FriendFinder (FFN), is often described as the 'adult' version of Facebook (FB).  Oh, how the mighty have fallen.  Three weeks ago, many were saying that FB would be among the world's most valuable companies.  Today, the best it can do is make a list of poor performing penny stocks.  At what point do comparisons between Facebook and MySpace become offensive to MySpace!

Trouble Behind, Trouble Ahead: Icahn's Chesapeake Intervention May Not Take (CHK)

Apologies to the Grateful Dead for mixing them up in this mess.
It was probably the intervention thang.*

Some years ago I was trying to determine if it was possible to save a private company that had raised money under regs 504 through 6. While out looking for ideas I came across one of the grossest human beings I've ever met, always talking about his anal fissures when he wasn't trying to screw everyone he met.

His idea was to loan the company some money and take the intellectual property when it couldn't meet the terms, all while promising the passive investors that he was "providing a lifeboat".
First he'd save the IP and then he'd come back for them.

Alrighty then.
I'm reminded of this when thinking about deal guys coming to rescue shareholders.
Somehow the deal guy always gets prime seat in the lifeboat while the other shareholders may or may not do as well.

Today the stock closed up another 2.91% at 17 bucks even.
Here's today's story, from Bloomberg:
Icahn’s Chesapeake Intervention Faces $22 Billion Hurdle

Carl Icahn’s makeover of Chesapeake Energy Corp. (CHK) (CHK)’s board may be too late to shield the U.S. natural- gas producer from a gathering storm of wrong-way bets on energy demand, plunging oil prices and corporate-governance failures. 

Chairman and Chief Executive Officer Aubrey McClendon’s management of the company he co-founded 23 years ago will come under new oversight after Chesapeake said yesterday it will replace four of the eight non-executive directors along with naming a new independent chairman. Icahn said he’ll now push to curb spending after earlier criticizing the CEO and directors for “irresponsible actions” that led Chesapeake “to the edge of the proverbial cliff.”

The overhaul of Chesapeake’s board follows a plunge in gas prices to a 10-year low and revelations that McClendon had intertwined his personal business with that of the company’s key financiers. The CEO’s strategic shift from gas toward more profitable oil production may falter after crude prices had their biggest monthly decline since 2008.

Bringing in new directors doesn’t address “concern on cash flow in 2013, especially after you had a $24-a-barrel pullback in crude prices,” Tim Rezvan, a New York-based analyst for Sterne Agee & Leach Inc. who rates the shares “neutral,” said yesterday in a telephone interview. “That’s the latest bomb to drop: First you had gas prices, then the personal conflict-of- interest story and now you’ve got a 25 percent pullback” in crude prices since March 1.

5-4 Majority
Chesapeake lost almost half its market value in the past year as a glut of North American gas collapsed prices to the lowest since 2002 and McClendon’s personal finances came under scrutiny by the U.S. Securities & Exchange Commission, the Internal Revenue Service and the board he has led since the company’s inception....MORE

*Via the UC Santa Cruz's Annotated Grateful Dead Lyrics:

...Yeah, Neal was a great speed freak (better watch your speed) and lady in red is a barbituate (you'd be better off dead). And all notions "just crossed my mind"; Neal was famous for saying "It just occurred to me...". As the driver of The Bus, "Driving that train, high on cocaine..". Casey is Cassady. Anyway, that is the conventional wisdom on that song. I could be wrong...... 

Bank for International Settlements warns global lending contracting at fastest pace since 2008 Lehman crisis

We pay attention to what the Central Banker's Central Bank has to say.
From Ambrose at the Telegraph:

International lending is contracting at the fastest pace since the onset of the financial crisis in 2008 as Europe's banks scramble to meet tougher rules. 

The Bank for International Settlements (BIS) said cross-border loans fell by $799bn (£520bn) in the fourth quarter of 2011, led by a broad retreat from Italy, Spain and the eurozone periphery.

Lending to banks in the eurozone fell $364bn or 5.9pc, with drastic reductions of 9.8pc in Italy and 8.7pc in Spain.

The BIS's quarterly report said the decline in lending was "largely driven by banks headquatered in the euro area facing pressures to reduce their leverage".

Banks must raise their core tier one capital ratios to 9pc by the end of this month or face the risk of partial nationalisation. The global Basel III rules are also pressuring banks to retrench.

The International Monetary Fund said banks will have to slash their balance sheets by $2 trillion (£1.6 trillion) by the end of next year even in a "best-case scenario"....MORE

See also:

Why You Really, Really Want to Listen to the Bank for International Settlements

"Canada Bracing for Massive Influx of Wisconsin Boat People"

Thanks (I think) to a reader.
While we don't get too political at CI, this story transcends politics and has the potential to become a human tragedy.

From the Borowitz Report:

OTTAWA (The Borowitz Report) – The Canadian coast guard was on alert today, preparing for what it fears could be a massive invasion of  boat people from Wisconsin.

Conor McGlindon, commander of the Royal Canadian Mounted Coast Guard (RCMCG), said that satellite photos had revealed a “substantial flotilla” in the making, as Wisconsinites prepared to flee their state for their neighbor to the North.

“Word has gotten around that we have policemen, firemen, and basic school lunches up here,” Mr. McGlindon said.  “You can’t blame these boat people for seeking a better life.  But we are under orders to intercept them.”

In Canada, officials fear that refugees from Wisconsin will brave the treacherous journey across Lake Superior in the hopes of giving birth to so-called “anchor babies” on Canadian soil.

Mr. McGlindon offered reporters a look at satellite photos showing the boat people larding their vessels with wheels of premium cheddar cheese, possibly in the hopes of bribing Canadian officials on Superior’s northern shore....MORE

Cleveland Fed Conference on Shale Gas and Competitive Advantage

From the Cleveland Plain Dealer:

Shale gas boom could bring manufacturing jobs back to U.S., economists say

The shale gas boom hitting Ohio, Pennsylvania and several other states could provide a major advantage to manufacturers in the United States -- cheap energy that could significantly cut the costs to produce goods here, a group of economists said Thursday.

"By 2025, the manufacturing sector alone could save $11.5 billion in energy costs," Robert McCutcheon, an economist with consulting group PwC, said at a manufacturing summit hosted by the Federal Reserve Bank of Cleveland. McCutcheon's company, formerly called PriceWaterhouseCoopers, released a study late last year predicting that as many as 1 million new U.S. manufacturing jobs could come from lower-cost energy.
"If we save $11.5 billion, that's investment capital that could be redirected elsewhere," McCutcheon added.

Cleveland Fed President and Chief Executive Sandra Pianalto said manufacturing businesses have been leading the economic recovery in the United States for the past two years, but she added that job growth hasn't been as strong as profit and sales growth. To add jobs, the sector needs to attract new manufacturers and bring production back to the United States from other countries.

That's where shale gas and cheap energy could come in.

Pianalto said one steel producer told her recently that energy costs in North America are one-third the cost of European steel plants [reporter's note: an earlier version of this story said U.S. costs were one-tenth of Europe's. Pianalto's office said the Cleveland Fed chief went over her notes and found that one-third was the more accurate figure]. Those costs, coupled with weak demand, has ArcelorMittal expanding in Ohio while it cuts production in Europe. Several other steel plants in the region have also increased production to sell pipeline tubes and other parts to oil and gas companies...MORE

Weather Underground on the 2012 Hurricane Season

Specifically, Jeff Masters via the Wunderground blog:
The 2012 Atlantic hurricane season begins: what is in store?

It's June 1st, and the 2012 Atlantic hurricane season is officially underway. With two early season storms, Alberto and Beryl, having already come and gone, this year's season has gotten off to a near-record early start. Since reliable record keeping began in 1851, only the hurricane seasons of 1908 and 1887 had two named storms form so early in the year. So, will this early pace continue? What will this year's hurricane season bring? Here are my top five questions for the coming season:

1) All of the major seasonal hurricane forecasts are calling for a near-average season, with 10 - 13 named storms. Will these pre-season predictions pan out?

2) How will the steering current pattern evolve? Will the U.S. break its six-year run without a major hurricane landfall, the longest such streak since 1861 - 1868?

3) Will the 420,000 people still homeless in Haiti in the wake of the January 2010 earthquake dodge a major tropical cyclone flooding disaster for the third consecutive hurricane season?

4) How will new National Hurricane Center director Rick Knabb fare in his inaugural season?

5) Will the Republican National Convention, scheduled to occur in Tampa during the last week of August, get interrupted by a tropical storm or hurricane?

---------------------------------------------------------------------------------------------------------------

Quick summary of the early-season atmosphere/ocean conditions in the Atlantic
Strong upper-level winds tend to create a shearing force on tropical storms (wind shear), which tears them apart before they can get going. In June, two branches of the jet stream, the polar jet to the north, and a subtropical jet to the south, typically bring high levels of wind shear to the Atlantic. The southern subtropical jet currently lies over the Caribbean, and is expected to remain there the next two weeks, making development unlikely in the Caribbean. Between the subtropical jet to the south and the polar jet to the north, a "hole" in the wind shear pattern formed during May off the Southeast U.S. coast, and this is where both Alberto and Beryl were able to form. Their formation was aided by the fact ocean temperatures off the U.S. East coast are quite warm--about 1 - 2°C above average. A wind shear "hole" is predicted to periodically open up during the next two weeks off the Southeast U.S. coast, making that region the most likely area of formation for any first-half-of-June tropical storms. However, none of the reliable computer models are predicting tropical storm formation in the Atlantic between now and June 8.

May ocean temperatures in the tropical Atlantic are approximately the third coolest we've seen since the current active hurricane period began in 1995. SSTs in the Main Development Region (MDR), between 10 - 20°N latitude, from the coast of Africa to the Central America, were about 0.35°C above average in May, according to NOAA's Coral Reef Watch. Tropical storm activity in the Atlantic is strongly dependent on ocean temperatures in this region, and the relatively cool temperatures imply that we should see a delayed start to development of tropical waves coming off the coast of Africa and moving into the Caribbean, compared to the period 1995 - 2011. An interesting feature of this month's SST departure from average image (Figure 2) is the large area of record-warm ocean temperatures off the mid-Atlantic and New England coasts, from North Carolina to Massachusetts. Ocean temperatures are 3 - 5°C (5 - 9°F) above average in this region. This makes waters of much above-average warmth likely to be present during the peak part of hurricane season, increasing the chances for a strong hurricane to affect the mid-Atlantic and New England coast.

The upper-level jet stream pattern is critical for determining where any tropical storms and hurricanes that form might go. Presently, these "steering currents" are in a typical configuration for June, favoring a northward or northeastward motion for any storms that might form. However, steering current patterns are fickle and difficult to predict more that seven days in advance, and there is no telling how the steering current pattern might evolve this hurricane season. We might see a pattern like evolved during 2004 - 2005, with a westward-extending Bermuda High, forcing storms into Florida and the Gulf Coast. Or, we might see a pattern like occurred during 2010 - 2011, with the large majority of the storms recurving harmlessly out to sea. That's about as helpful as a weather forecast of "Sho' enough looks like rain, lessen' of course it clears up," I realize.

Figure 2. Departure of sea surface temperature from average for May 31, 2012. Image credit: NOAA/NESDIS.

Colorado State predicts a slightly above-average hurricane season
A slightly above-average Atlantic hurricane season is on tap for 2012, according to the seasonal hurricane forecast issued June 1 by Dr. Phil Klotzbach and Dr. Bill Gray of Colorado State University (CSU). The CSU team is calling for 13 named storms, 5 hurricanes, and 2 intense hurricanes, and an Accumulated Cyclone Energy (ACE) of 80, which is 87% of average. This is very close to the 1981 - 2010 average of 12 named storms, 6 hurricanes, and 3 major hurricanes. Hurricane seasons during the active hurricane period 1995 - 2011 have averaged 15 named storms, 8 hurricanes, and 4 major hurricanes, with an ACE index 153% of the median. The forecast calls for an average chance of a major hurricane hitting the U.S., both along the East Coast (28% chance, 31% chance is average) and the Gulf Coast (28% chance, 30% chance is average). The risk of a major hurricane in the Caribbean is also average, at 39% (42% is average.) The CSU teams expects we will have a weak El Niño develop by the peak of this year's hurricane season in September, which will cut down on this year's activity by increasing wind shear over the Tropical Atlantic. However, there is considerable uncertainty in this outlook....MUCH MORE

Does Anyone Actually Read the Harvard Business Review?

For years I though it was just me thinking that the HBR was only used by high-buck consultant's to stroke CEO's egos, telling them how smart the CEO was to hire said HBR-spouting consultant.
From Felix Salmon at Reuters:
Leadership lessons from a Wall Street consultant

I’ve been spending much more time than usual on Facebook, over the past week — you’d think the company has been in the news, or something like that. And so I found myself this evening clicking on a classic clickbait headline — “Two Lists You Should Look at Every Morning” — which had been shared approvingly by my ex-boss, and which came with the somewhat respectable logo of the Harvard Business Review.

The article in question isn’t long, but it is pretty much everything you hate about the HBR. It’s written by some consultant who loves to talk about “leadership” a lot, and who loves to use phrases like “platform for talent”. What’s more, he’s ever so keen on focus, and eliminating distractions. Apparently, when you’ve got some dead time while standing in an elevator, the wrong thing to do is to use that time for something productive, like dashing off a quick email. Email, you see, is a distraction from more important things, like, um, working out who else might be in the elevator. Or, single-mindedly trying to win some pointless gong:

After the CEO busted me in the elevator, he told me about the meeting he had just come from. It was a gathering of all the finalists, of which he was one, for the title of Entrepreneur of the Year. This was an important meeting for him — as it was for everyone who aspired to the title (the judges were all in attendance) — and before he entered he had made two explicit decisions: 1. To focus on the meeting itself and 2. Not to check his BlackBerry.
What amazed him was that he was the only one not glued to a mobile device. Were all the other CEOs not interested in the title? Were their businesses so dependent on them that they couldn’t be away for one hour? Is either of those a smart thing to communicate to the judges?
There was only one thing that was most important in that hour and there was only one CEO whose behavior reflected that importance, who knew where to focus and what to ignore. Whether or not he eventually wins the title, he’s already winning the game.

This one story is reasonably impressive in that it inadvertently tells you everything you need to know about the leadership industry. For one thing, the people who are most successful, in this industry, tend to be obscene flatterers: whatever your client does, he does it better than any of his competitors, and he’s “winning the game”. When CEOs ask for advice, what they really want is flattery: they want to be told how brilliant their decisions are, and that the only thing which would make those decisions even more brilliant would be if they were made even more decisively....MUCH MORE, all good.

"If Europe Went Back to Its Old Currencies…"

From the WSJ's The Euro Crisis blog:

A drachma coin is seen on display.

If, over the weekend, euro-zone countries reverted to their national currencies, how would they move relative to each other?

We’ll assume they swap one for one. In other words one new old currency for one euro.
So what happens now?

Well, it’s a pretty simple assumption that the Deutschmark would appreciate while the drachma would drop like a stone. But by how much?

One rough and ready proxy could be the euro-zone central banks’ Target2 balances. Target2 balances are how national central banks within the single currency reconcile cross-border commercial banking payments....MORE

Dead Duck Day crowds gather in Rotterdam

Following up on yesterday's "Tomorrow—June 5—is Dead Duck Day" I am coming to believe that Harvard's own Improbable Research may have lost their collective minds.
From IR:

With 20 minutes to go before the 2012 Dead Duck Day celebration begins, crowds gather outside the Natural History Museum in Rotterdam. This photo, below, documents the mounting excitement.

Also at IR:
Today is Dead Duck Day

War in the Shadows: "Unit 8200 and Israel's high-tech whiz kids"

From UPI:

Israel's highly secretive Unit 8200 of Military Intelligence is increasingly seen to have played a leading role with the United States in developing a powerful new cyberweapon known as W32.Flame that attacked Iran's oil industry in April.

Veterans of the unit, the equivalent of the U.S. National Security Agency and Britain's Government Communications Headquarters, have in recent years been at the cutting edge of building Israel's formidable high-tech sector into what the Financial Times calls a "global technology powerhouse."

Indeed, the proliferation of Unit 8200 alumni across the spectrum of Israel's high-tech industry suggests that they probably run it and that there are strong security links between the unit and civilian high-tech outfits.
Israel's high-tech exports are estimated to be worth $18.4 billion a year, comprising more than 45 percent of the Jewish state's exports, Central Bureau of Statistics data indicate.

Unit 8200 whiz kids have founded scores of high-tech start-ups in recent years.
Gil Schwed, reputed to be one of Israel's youngest billionaires, launched CheckPoint, one of the country's leading high-techs with major dealings in the United States.

The Zisapel brothers, Yehuda and Zonhar, sold and floated a dozen companies for hundreds of millions of dollars.

"It's almost impossible to find a technology company in Israel without people from 8200 and in many cases the entrepreneur, the manager or the person who had an idea for the project will be someone from 8200," said Yair Cohen, a former brigadier general who once commanded Unit 8200.

Cohen heads the intelligence cyber department of Elbit Systems, a leading Israeli defense company.

Yossi Vardi, who founded Israel's first software company in 1969, observed, "More high-tech billionaires were created from Unit 8200 than from any business school in the country."...MORE

Wall Street Woman Who Sold Largest Sub-Prime Originator Just Before Crisis Dead at 81 (GDW; WB; WFC)

We've looked at the timing of the sale of Golden West Financial on two occasions, the first linking to the most prescient bit of analysis we've ever had on Climateer Investing.*
First some housekeeping.
This is Marion Sandler:

Associated Press

Marion Sandler at a 2006 meeting following Golden West’s sale to Wachovia.

She is not to be confused with Irena Sendler:**

Irena Sendler

Photo from findingDulcinea
From the Los Angeles Times:
Marion Sandler dies at 81; World Savings Bank executive

Sandler was one of the first women on Wall Street. She and husband Herb bought the small Oakland S&L in 1963 and expanded it to 285 branches before selling it.

As one of the first women to hold a position of power on Wall Street, Marion O. Sandler was notable even before she and her husband, Herbert, spent 43 years building Oakland's World Savings Bank into such a major — and ultimately controversial — adjustable mortgage lender.

Sandler, the daughter of Jewish immigrants from Lithuania and Russia, exploited her keen analytic skills to become Dominick & Dominick's first female executive in 1955 and joined Oppenheimer & Co. as a savings and loan analyst in 1961.

Spotting an opportunity, she and her husband, an attorney she had met in the Hamptons, used a bank loan two years later to buy the Oakland S&L, which then had two branches. By the time the co-chief executives were through, there were 285 World branches in 10 states.

Marion Sandler died Friday at her home in San Francisco after a long battle with severe asthma and migraine headaches, her family announced. She was 81.

Having sold World's parent firm, Golden West Financial Corp., for $24 billion on the eve of the mortgage meltdown, the Sandlers used their more than $2 billion cut of the proceeds to greatly expand their wide-ranging philanthropies. Their foundation's major efforts included significant funding for fair-lending advocates, such as the Center for Responsible Lending, for asthma research and for investigative reporting.

Yet the Sandlers also were attacked for pioneering pay-option mortgages, which allowed borrowers to pay so little that their balances rose instead of fell. Critics blamed the loans for the demise of Wachovia Corp., which bought Golden West in 2006 and was near collapse when it sold itself to Wells Fargo & Co. two years later....MORE

The Sandler pic is from the WSJ's Deal Journal the first place I saw notice of her passing.

*On August 10, 2007, you may remember it as the week about which Goldman's David Viniar said:
“We were seeing things that were 25-standard deviation moves, several days in a row” 
which caused some jollity among the cognescenti, see: "How Unlucky is 25 Sigma", we posted:
The Day the Music Died--The Mortgage Business
 which referred back to the May 6, 2006 sale of Golden West to Wachovia.
The post also contained this bit from some guy in India:

On May 10, 2006 India Daily said:
Sell of Golden West Financial to Wachovia signifies burst of housing bubble

Not a bad call.
Four days after the sale and two months before John Paulson started his first sub-prime fund.
The second look was in 2010:
"Happy Anniversary, Wells Fargo and Wachovia!" (WFC; WB)

**Irena Sendler is the woman Al Gore beat for the Nobel Peace Prize.
From our In Memorium post:
Irena Sendler, Nobel Peace Prize Candidate, Has Died

Some of the headlines.

From the Telegraph:
Irena Sendler
Social worker who saved 2,500 Jewish children in Warsaw and was tortured by the Gestapo

...The Nazis took Irena Sendler to the Pawiak prison, where she was tortured; although her legs and feet were broken, and her body left permanently scarred, she refused to betray her network of helpers or the children whom she had saved. Finally, she was sentenced to death....

From The Hindu:
Saviour of 2,500 children

From the Kansas City Star:
Polish woman championed by Kansas students dies

From the Associated Press:
Polish Holocaust hero dies at age 98

...MUCH MORE 

Al Gore made a movie.

Historical Heads-up: Mental Floss is Posting the Run-up to the Start of WW I Centenary

Mental Floss, on the blogroll at left, is good at a lot of things but this may be their most ambitious project yet.
Here is the bio/archive page for their writer:

Erik Sass

Profile: Erik Sass is the author of The Mental Floss History of the United States and co-author with Steve Wiegand of The Mental Floss History of the World, both of which you should go buy right now. When he’s not writing about historical curiosities for mental_floss, he covers online and traditional media for MediaPost. His interests include water gardens, games of strategy, geography, and cats.

Posts by Erik Sass:

World War I Centennial: Protests and Pistols in Hungary’s Parliament
by June 4, 2012 - 3:50 PM

World War I Centennial: Germany Ramps Up and Albanians Take Up Arms
by May 21, 2012 - 11:44 PM

World War I Centennial: Balkan Bedlam Beckons
by May 12, 2012 - 10:41 PM

World War I Centennial: Recalling the Messenger
by May 9, 2012 - 3:14 PM

World War I Centennial: Rattling the Saber at Sea
by May 7, 2012 - 11:00 PM

World War I Centennial: Mission Implausible
by April 30, 2012 - 10:36 PM

...MUCH MORE

His interests extend beyond the confines of the Great War:

The Nazi Sex Doll Initiative

Soros-backed Westport Innovations Hooks Up With Caterpillar For Natural Gas Vehicles (WPRT; CAT; CLNE)

Westport is up 19.72% at $26.66.
It looks like this deal could replace-and-more any loss from the possible defection of Cummins who is developing their own natty engine.
Pickens-back Clean Energy Fuels has made a sympathy move, up 6%.
From Green Car Congress:

Westport and Caterpillar to co-develop natural gas technology for off-road equipment

Westport Innovations Inc. has signed agreements with Caterpillar Inc. to co-develop natural gas technology for off-road equipment, including mining trucks and locomotives.

Caterpillar and Westport will combine technologies and expertise, including Westport High Pressure Direct Injection (HPDI) technology and Caterpillar’s off-road engine and machine product technology, to develop the natural gas fuel system. Caterpillar will fund the development program. When the products go to market, Westport expects to participate in the supply of key components.

Development programs will start immediately for both new and existing engines, combustion technology and fuel systems. Commercial production is expected to begin in about five years.

This is a significant opportunity that has the potential to transform important segments of the global off-road equipment industries. The substantial price difference between natural gas and diesel fuel is resulting in a strong financial incentive to enable off-road applications to take advantage of low natural gas energy costs without sacrificing operational performance. There is also a clear environmental incentive because of the reduced carbon emissions. Adding to the solid business case for this program is the potential to convert existing field units to natural gas – opening up a whole new market opportunity.

—David Demers, CEO of Westport Innovations

While the agreements initially focus on engines used in mining trucks and locomotives, the companies will also develop natural gas technology for Caterpillar’s off-road engines...MORE 

While definitely good news the stock has over-reacted, possibly due to desperate shorts trying to cover.
I mean look at the size of the gap up (via Yahoo Finance):

As Google Tinkers with Search, Upstarts Gain Ground (GOOG)

From MIT's Technology Review:

Niche search engines Blekko and DuckDuckGo have exploded in popularity in recent months.

Google's willingness to tinker with its Web search may be opening a gap for new search engines to fill.

January saw Google launch Search, plus Your World, a service that adds links shared by friends to the results page a user sees, based on activity collected from other Google services such as Google+ and Gmail. February brought news that Google would correlate users' activity across all its sites, to better target its ads. At about the same time as these controversial changes were implemented, usage of two search startup companies, Blekko and DuckDuckGo, started to climb rapidly, and the two haven't looked back since.

The two sites still command only a tiny percentage of online searches, but their recent growth suggests they didn't receive millions from venture capitalists in vain. Both companies make a point of emphasizing their relatively simple design and a commitment to protecting users' privacy, values some people claim Google has abandoned with its social efforts.

"I believe that there's an opportunity for multiple new search engines to fragment the market a little bit, and that represents a great opportunity," says Gabriel Weinberg, who founded DuckDuckGo in 2008 as a side project, but whose company now employs four people full-time and received $3 million in investment funding late last year. "It's the same as happened with Web browsers. People realized that there was very little choice, and then it fragmented again," he says, referring to the way that Microsoft's Internet Explorer lost its dominant position....MORE

Timely: With Britain Heading Into Recession Skadden Brings Out Their UK Takeover Guide

From the M & A Law Prof Blog:

UK Takeover Guide

Skadden has just released their annual overview of the UK takeover regime.  It's a good read and at 44 pages is just long enough for the train ride home.  Get it here.

Bloomberg: Goldman Sachs, Sex, Viagra, Tiger Woods, and Barack Obama

From New York Magazine's article "The Mayor of All Media":

As Michael Bloomberg prepares for his post-mayoralty, his media company is also evolving. For decades, Bloomberg LP saw profits soar by selling just-the-facts journalism and financial information to Wall Street traders. That vision, while still wildly profitable—Bloomberg LP earned $7.6 billion in revenue last year—is now changing. The company is aggressively leasing its terminals abroad even as it is trying to diversify. Last year, Bloomberg spent almost $1 billion to acquire the legal-­research firm BNA and spent millions to launch a ­government-information service called Bgov....

...Bloomberg journalists are constantly evaluated for their productivity. Reporters earn points for the number of clicks their articles receive on the Bloomberg terminal. “It was well known and is well known that if you write a story about Goldman Sachs, sex, Viagra, Tiger Woods, and Barack Obama, you’d get a huge number of clicks,” a former reporter says....

HT: Clusterstock whose headline was "Bloomberg LP, Home Of Hardcore Clickbait".

I don't care who you are, that's funny
-Larry the clickbait guy.

Breakout! "Wal-Mart Shares Jump As Broad Market Struggles" (WMT)

Take a look at the chart in this morning's "Say What You Will About Wal*Mart (WMT)" post.
What do you see?

The old time chartists had a rule of thumb that the target of the upmove was as high as the plateau under the breakout was long.

Of course it mattered what the ratio of your X and your Y was and whether you used a log or arithmetic presentation but you get the point.

Here's the latest, from MarketBeat:

Shares of Wal-Mart continue to defy expectations.

The stock, which languished for a decade, recently broke out to fresh 12-year highs despite the broad market’s swoon. The pop has coincided with growing optimism that the company’s U.S. operations are improving.

“After four years of on-again-off-again attempts to right the U.S. business, Wal-Mart appears to be regaining its sales momentum,” says Michael Exstein, an analyst at Credit Suisse.

Shares are up 0.6% at $65.95. Wal-Mart is the best performing Dow component over the last month, up 12%, while the blue-chip index has declined 7.3%....MORE

Today the stock was up 2/3 of a percent while the DJIA, of which it is a component, was down .14% .

Chesapeake to Sell 337,000 Acres in Liquids Rich Utica Shale (CHK)

Hmmm...
Selling off the Ohio properties because no one would bid up for your "dry" gas prospects.
As you've recently seen in another context, "That's hedge fund behavior".
From Reuters Africa:

Chesapeake Energy Corp is looking to sell about 337,000 acres of its holdings in Ohio, as it works to raise money to meet an expected cash shortfall, according to a prospectus released by one of its advisers.


The holdings on the block include some in the Utica shale. The prospectus was posted on the website of Meagher Energy Advisors, an energy-focused asset acquisition and divestiture boutique firm that has sold assets for Chesapeake in the past.

This is not good news for long-term shareholders but what with the board shake-up and the Hogshooter discovery well, the stock is up 6% at $16.51.

Climateer Line of the Day: Journalism Edition

Today's winner of the prestigious CLoD is the Wall Street Journal's Matt Phillips:

The clamor for more historical context on the current record low for U.S. interest rates has hit a fever pitch!

-from "U.S. Borrowing Costs: 1941-Present"

Attentive (and possibly deranged) readers will note the stylistic similarity to the work of an earlier award winner:

Dead zones are all the rage! Here's my latest dead zone story.

That's all I do now: I've got the dead zone beat....

-the Washington Post's Joel Achenbach  reprised in our "Risk: "Under the world's greatest cities, deadly plates" post.

T Bond Futures Chart vs Commercial Positioning

From History Squared:

Factoid: Price of English Farmland Has Risen 10,745% During the Reign of Elizabeth II Regina

Yeah, I know about the other realms and dominions but this research focused on England,
From the International Business Times:

English farm land has risen in value by 10,745% during the lat 60 years, according to research carried out to mark The Queen’s diamond jubilee.

Values rose most quickly, up by 390%, during the third decade of her reign and hit a record high of £6,156 an acre in June 2011, the research from Knight Frank shows.


‘Queen Elizabeth II has presided over a huge increase in the price of farmland. When she became queen in 1952 the average price of agricultural land in England was £56 per acre. It is now worth £6,073 an acre, according to the Knight Frank Farmland Index, just shy of the record price of £6,156 achieved in June 2011,’ said Andrew Shirley, head of rural property research at Knight Frank....MORE

"Tomorrow—June 5—is Dead Duck Day"

Who knew?
From Improbable Research:

Tomorrow, June 5th, is Dead Duck Day. Exactly at 17.55h, we will gather next to the Natural History Museum in Rotterdam, the Netherlands. Click here for more information (and here for those who master the Dutch Language) about this commemoration of the incident that became the first scientifically recorded case of homosexual necrophilia in the mallard duck...MORE

Amazing: All Three of Sequoia's 1999 and 2000 Vintage (Dot Bomb Era) Funds Have Generated Positive Returns

That is seriously impressive.
From peHUB:

Exclusive: Sequoia’s 1999 and 2000 Funds Outperform Dot-Com Peers

Sequoia Capital generated positive investment returns for its 1999 and 2000 funds, defying a period of financial turmoil that doomed most dot-com era venture funds, peHUB has learned.

The results — not publicly reported before — will likely cement Sequoia’s reputation for generating top-notch returns in good times and bad. PeHUB obtained the performance data from the University of California through a California Public Records Act request.

Sequoia raised three funds in 1999 and 2000. The best performer is the Sequoia Capital Franchise Fund, a $350 million late stage vehicle raised in 1999, which has generated an internal rate of return of  11%, as of  December 2010, according to the University of California....MORE

"Short of euros, Greeks barter"

With the added advantage, in Greek eyes, of avoiding the tax man.
From ekathimerini:

As a computer specialist who can fix your PC, Vassilis Revelas has a valuable skill. In Greece's economic crisis, he's found a new way of using its value - without a single euro changing hands.

Like hundreds of others in Greece, where incomes have plunged in four years of recession, he uses the time bank - an online exchange where members swap services, counting the cost not in euros, but in hours.
“I racked up about 10 hours of work by fixing people's computers,” says Vassilis.

“In return I've had an electrician come to help with my phone line, I've had someone do my hair, I had someone help me move house and I also had Spanish lessons,” he told AFP.

Time-banking and other forms of bartering are on the rise in Greece and other crisis-hit countries such as Spain, as people come to grips with lower salaries, pensions and job prospects....MORE

HT: the (almost) essential Debt Crisis Live-blog at the Telegraph.

Time For a Short Term Pop in the Market (FSLR)

One of our short term indicators (0-2 day lead time), First Solar traded down to  an all-time low this morning and reversed, it is now up 1.83% on the day.
The DJIA is down .33% at 12, 078 and the S&P is down .41% at 1272.76.

"Facebook Hit With $25 Price Target From Bernstein"

That would imply the IPO was more than 50% overvalued.
The stock is at $27.13, down another 2.13%.
From Deal Journal, who also get the hat-tip on the immediately prior MF Global link:

Bernstein has delivered a new blow to Facebook this morning: A $25 price target.

Facebook shares, two weeks into their life as the most heavily-traded IPO of all time, face a “material risk” because investors will question the company’s ability to meet 2013 forecasts, Bernstein says.

“Therefore, it is difficult to argue for owning the stock today,” the firm adds to its underweight rating....MORE

MF Global Lied to its CME Regulator About Customer Fund Segregation

Following up on "MF Global Trustee May Bring Corzine Negligence Claims".
From the Wall Street Journal:

Feds Eye MF's False Promise 
Firm Assured CME of a $200 Million Cushion After Concerns Raised Internally

Federal investigators are scrutinizing a series of conversations among MF Global Holdings Ltd. employees shortly before the securities firm erroneously told regulators that its customer funds were safe, said people with knowledge of the probe.

Three days before MF Global filed for bankruptcy-court protection, CME Group Inc. CME +1.46% was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money.

But the customer accounts actually were in the red, and the deficit ballooned to more than $900 million on the night of Oct. 30. MF Global tumbled into Chapter 11 on Oct. 31. The bankruptcy trustee trying to recover money for the firm's U.S. customers has estimated that the shortfall now is roughly $1.6 billion. A large chunk of the money is stuck outside the U.S....MUCH MORE

"MF Global Trustee May Bring Corzine Negligence Claims"

Mis, mal and non-feasance, they're all actionable but seriously, what these folks did is criminal and it sure would be nice if it were treated that way.
From Bloomberg:

James Giddens, the trustee liquidating MF Global Holdings (MFGLQ) Ltd.’s brokerage, said in a report that claims for breach of fiduciary duty and negligence can be made against employees of the company including former Chairman Jon Corzine, finance chief Henri Steenkamp, and Assistant Treasurer Edith O’Brien.

The trustee declined to make any recommendations on potential criminal liability, saying such determinations were beyond the scope of his mandate. MF Global managers may be liable for some of the $1.6 billion shortfall in customer money, according to the report. Giddens said he will pursue claims through litigation and negotiation.

“I have determined there may be valid claims against individuals and entities,” Giddens said in the report. “In my capacity as trustee, I will make every effort to ensure that such claims result in the greatest possible returns to customers in an efficient and fair manner, whether those claims are pursued by my office or others.”...MORE

Financial Engineering: Is it Time for The Exchequer to Securitise the Queen?

Brilliant.
From Bright Green:

Times of economic stress call for creative solutions, and on this Diamond Jubilee I think it’s fitting to celebrate the Queen by using her for some first-rate financial engineering. I think it’s time the UK government started issuing MBS. Yes, Monarch-Backed Securities.

Monarch-backed securities are innovative new financial instruments that will securitise the Queen, using her as collateral against which the government can borrow money. Traditionally, government debt was thought to be so safe that it was considered risk free, but we don’t really believe that any more – Queenie would be doing the UK a great favour if she was put up as collateral, extending the Royal favour of lowering the UK’s cost of borrowing. Property is normally the thing people use for loan collateral, because it’s big and solid, but Queenie is infinitely more solid than property (Indeed, her predecessors basically invented the concept of private property back in the enclosure movement).

Although it sounds extreme, the idea of using the Queen as collateral to secure debt makes perfect sense. After all, government debt is often called sovereign debt, and isn’t she the sovereign? Imagine how easy it would be for the treasury to market monarch-backed securities to institutional investors: Gentlemen, not only are our Sovereign Bonds truly sovereign, but they’re backed by divine decree and the hand of God. It seems to me that Her Majesty is an under-utilised asset, being used right now for the lowly task of drawing tourists. Release her full potential. Issue debt against her majestic power.

The technicalities of the monarch-backed sovereign debt could be ironed out fairly quickly. We put the Queen into an SPV (a special purpose vehicle, of financial crisis fame), which issues 20-year bonds to investors. The SPV is bankruptcy remote, which means that if the entity defaults, the investors can claim the Queen, but no government assets. Of course we tranche the returns: Risk-averse investors take the upper tranches, backed by the stable cash flows of the Queen’s ordinary tourist revenue. Hedge funds take the risky lower tranches, betting on the volatile residual returns from Royal event licensing rights, such as a wedding or funeral....MORE

Say What You Will About Wal*Mart (WMT)

One of my mentors had a deal go one-thousand-fold before it was bought out, I thought that was quite impressive.
Here's one that almost doubled that performance.
From Slope of Hope:

Say What You Will, But.......Up 180,000%

They both pale in comparison with Berkshire Hathaway which Buffett began buying at 7 5/8 and had control of by the time the stock hit 14 7/8.
Call it a blended average of ten bucks (to keep the math simple for yours truly) and you've got 11,984 times on your money '62-'64 through Friday's close.
Now that's impressive.
Part of the secret is what, as early as the Jan. 18, 1965 Letter to Partners, Buffett described as:

A long life (in the erudite vocabulary of the financial sophisticate this is referred to as the Methusalah Technique)

"Worst Week Ever for US Economic Indicators?"

From Bespoke Investment Group:

We can't recall a worse week for US economic indicators.  While it was only a four-day week, there were a large number of indicators released -- 21 to be exact.  As shown below, of the 21 releases, a whopping 18 came in weaker than expected!...MORE

Something appears to be hitting the fan in China.
A Greek default tips a bunch of Spanish and Italian banks over the edge.
And George Bush is back in the White House.

Natural Gas Rig Count Down 6 (Yawn)

We've been saying the count has to fall into the high 400's for the E&P's announced cutbacks to be taken seriously.
Platt's has 540 as a target but the number is a couple weeks old and may not take into account the gas being produced as a "byproduct" of the hunt for liquids.
The near futures were at $2.325, down 4% or 9.7 cents.
From Reuters:

US natgas rig count near 13-year low

The U.S. natural gas drilling rig count fell to its lowest level since Oct. 1999 

as low gas prices curbed drilling in the country's shale gas outposts, data
from oil services firm Baker Hughes showed on Friday.

The gas-directed rig count fell by six to 588, after falling by the same 

amount last week, according to the data. 

Gas drilling has become largely uneconomical with current
prices, forcing drillers to move rigs to more lucrative oil
plays. The gas-directed rig count is some 63 percent lower than
the record highs in Sep. 2008. 

The oil rig count rose by three to a new 25-year high of
1,386 this week, according to Baker Hughes.

The number of horizontal rigs, the type most often used to
extract oil or gas from shale, fell by eight to 1,183 after
hitting an all time high in the week to May 18. 

Some analysts have suggested that 600 natural gas rigs are
about enough to prevent gas storage from overflowing this
summer. Baker Hughes forecasts show the number of rigs drilling
for natural gas in the United States will be 534 at the end of
this year, down 275 from a year earlier.

Other analysts argue that still deeper cuts will be needed
unless unusually hot weather stokes utility demand. 

U.S. natural gas production in the lower 48 states fell for
a second straight month in March, down 4 percent to 71.76
billion cubic feet per day (bcfd) from the 72.02 bcfd produced
in February, according to data from the Energy Information
Administration. 

The rig data did little to lift gas futures prices, which
remained lower for a fifth time in six sessions.

 As of 1:06 p.m. EDT, front-month July natural gas futures on
the New York Mercantile Exchange were at $2.341 per
million British thermal units, down 8.1 cents, or more than 3
percent....MORE

As we saw yesterday the March decline should read 0.4% rather than 4 percent: 

Natural Gas: EIA Monthly Production Report--Down 0.4% for March

Facebook: The $100 Billion Oxymoron (FB)

From William Bernstein's Efficient Frontier:*

I generally don't comment on initial public offerings; there are some neighborhoods in town I consider it wise to avoid, and when it comes to investments, this is certainly one of them. The classic 1991 study on the subject by Jay Ritter in Journal of Finance, for example, showed that initial public offerings (IPOs) produced a first-day pop of 16%, then underperformed the market by an average of 28% over the next three years. From the perspective of the first-day return, the average IPO is "underpriced," designed as a bon-bon to preferred brokerage customers. The "success" of the IPO is thus defined by the profit provided to these initial purchasers, who are favored by the wirehouses in the same way that casinos favor the highest rollers. That the issuing company and the later purchasers do not come out so well doesn't seem to enter into this rather perverse calculus of success.  But don't feel too sorry for issuing corporations, they are past-masters at cranking out expensive shares when the markets are frothy (not only as initial offerings, but also as seasoned ones) and issuing debt when markets are cheap. In fact, if you've ever wondered just who is taking the opposite side of the average mutual fund investor on the wrong end of the dollar-weighted/time-weighted gap, the answer seems to be corporate CFOs. Several things struck me about the tsunami of media attention over the "failed" Facebook IPO. The first was the discovery by participants that instead of being able to quickly flip their purchase to a second-day patsy, they were the patsies (at least after one week)....MORE

HT: MartketBeat *We are fans.
From our 2010 post "Berkshire May Be Required To Post Up To $8 Billion In Collateral" (BRK.A; BRK.B)'":

I think it was Boston University's Zvi Bodie* who, shrugging off the restraints of his MIT PhD, pointed out to the "expected return" crowd that if it were true that the risk of negative returns decreases as the time frame increases, the cost of long-term puts should decrease the farther out you go.
Kind of an Emperor has no clothes thing to say.
I'm referring, of course to the equity index puts that Mr. Buffett sold...

...*William Bernstein (No slouch either, M.D. Neurologist, PhD. Chemistry, dabbler in Modern Portfolio Theory, Bestselling Author, etc.) in one of his Efficient Frontier pieces, "Zvi Bodie and the Keynes’ Paradox of Thrift" described the professor as "Academician, raconteur, and all-around good guy Zvi Bodie...".

Then he rips his lungs out. Very typical in the academy:...

Gazprom Hires Soccer Star to Boost Image in Europe

Too funny.
From the WSJ Europe's Emerging Europe Real Time blog:

Facing stagnating sales of natural gas in Europe, its main export market, Gazprom hired German soccer superstar Franz Beckenbauer to promote Russia’s gas.

During the 1966 World Cup, Mr. Beckenbauer, debuting at the West Germany team, put the final nail in the coffin of the Soviet team in the semi-final. Under Mr. Beckenbauer as a West Germany’s captain, the Soviets were squarely defeated 3-0 in the final of the 1972 European Championship. Gazprom’s Chief Executive Alexei Miller, a football fan himself, must have remembered this, hiring arguably the most famous German footballer and coach.

Gazprom is not new to football. It’s sponsoring German team FC Schalke 04 and St. Petersburg-based Zenit.
Gazprom’s main business–gas exports to Europe–has, however, been recently facing difficulties. The company had to cut its exports outlook to 150 billion cubic meters for 2012....MORE

Follow-up, Italian Kneecapping: "Armed extremists are targeting nuclear and nanotechnology workers."

Following up on May 11ths "Italian anarchists kneecap nuclear executive and threaten more shootings".
From the Journal Nature:

A loose coalition of eco-anarchist groups is increasingly launching violent attacks on scientists.

A group calling itself the Olga Cell of the Informal Anarchist Federation International Revolutionary Front has claimed responsibility for the non-fatal shooting of a nuclear-engineering executive on 7 May in Genoa, Italy. The same group sent a letter bomb to a Swiss pro-nuclear lobby group in 2011; attempted to bomb IBM’s nanotechnology laboratory in Switzerland in 2010; and has ties with a group responsible for at least four bomb attacks on nanotechnology facilities in Mexico. Security authorities say that such eco-anarchist groups are forging stronger links....MUCH MORE

"Noted Stock Analyst the Amazing Kreskin Says Facebook Is Going Down" (FB)

From New York Magazine's Daily Intel:

Since Facebook's ruinous IPO, the in-boxes of tech reporters have been flooded by PR firms pitching hundreds of "industry experts," all offering to assess the company's long-term potential in exchange for a little ink.

But only one pitch — from the legendary mentalist the Amazing Kreskin — promised a no-fail look into Facebook's actual future. So we called him.

"I'm not a financial expert by any means," Kreskin said as a caveat to our call. "My work really deals with how people are thinking, and tuning in on your thoughts."

Nevertheless, the Hollywood mentalist (don't call him a psychic) agreed to take our Facebook-related questions. He said he had gotten interested in Facebook recently, after hearing whispers at parties about the company's IPO.

"As I studied more and more and listened, it was almost like a cartoon character that made a hit in the movies, and suddenly there was a cast over the character."...MORE

 HT: the Wall Street Journal's MarketBeat blog.