Time to Attempt the Reverse Long Term Capital Management: Long Treasuries/Short Junk? (TLT; TMF; HYG; JNK)

Attempting a 2 1/2 twisting Meriwether, not that high a D-ifficulty score, so to pull it out the execution must be flawless....

...And yes! He sticks the faceplant landing!

Stuff I think about when dreaming up relative value and convergence trades.

LTCM was shorting the more liquid on-the-run treasuries and buying the less liquid off-the-run to catch a few points or shorting treasuries and buying other sovereigns. It worked until Russia defaulted and the crowd did the flight to quality thing: spreads blew out and it was game over.

Here's what Scott Grannis thinks about at Calafia Beach Pundit:

I was probably too cavalier this morning in my dismissal of the risks of a Treasury downgrade. In discussions over lunch today with my most excellent former colleagues, Steve and Ken, I came to appreciate the deep concerns that hover over the institutional bond market community. My point this morning was that a downgrade of US Treasury debt is essentially a downgrade of all debt—since Treasuries are the bedrock upon which all debt is priced—so a downgrade doesn't really mean much.

Their point, however, is that a downgrade of Treasury debt has huge and little-understood implications for many large institutional bond portfolios. To understand why, consider the case of a billion dollar bond portfolio that is currently underweight Treasuries, overweight MBS and corporate bonds, and skewed to lower-quality debt given the steepness of the credit curve. Given the steepness of the yield curve and the still-generous level of corporate spreads, overweighting MBS and corporates has been a very profitable strategy in recent years and promises to continue to be so. Moreover, such a strategy recognizes that Treasuries are very fully valued (and quite possibly overvalued), and thus minimizes a portfolio's exposure to rising Treasury yields. If a manager is even modestly optimistic on the economy's prospects, and if he believes that the Fed's accommodative monetary policy stance should, by making liquidity relatively abundant, result in relatively low default rates and facilitate economic growth, then positioning this portfolio at the low end of his client's acceptable credit quality range makes a lot of sense. (And isn't the Fed trying to encourage people to take on more risk?) In short, there are many good reasons for large, diversified, institutional portfolios to be structured today with a relatively low average credit quality.

But here's the catch: If Treasuries are downgraded, then a portfolio's average credit quality, assuming it holds at least some Treasuries, will fall....MORE

Ha!
No Noble Laureates were injured in the performance of these mental gymnastics.

Gingrich Closes Tiffany’s Account, Stock Declines (TIF)

The stock opened up but has traded down 11 cents (.13%) at $81.61.
From USA Today's On Politics blog:

GOP presidential hopeful Newt Gingrich reported that he closed a revolving credit account at Tiffany's last year and that it is "paid in full."...

Lunatic Chartology (SPY; DIA)

I don't buy it.* Quoting the father of Behavioral Finance:

...The Rock Man said, "Say, babe, there ain't nothing pointless about this gig. The thing is you see what you want to see and you hear what you want to hear. You dig? Did you ever see Paris?"
"No."
"Did you ever see New Delhi?"
"No."
"Well, that's it. You see what you want to see and you hear what you want to hear." And with that the Rock Man fell soundly asleep...

-from Harry Nilsson's The Point!

From Slope of Hope:




Previously:
"Moonstruck: Lunar Cycle Says Expect Market Rally"

*On the other hand All About Alpha has a learned and erudite post (HT: Alphaville):
A Hedge Fund Risk Profile Changes As the Moon Waxes and Wanes

Q and A: Bill Gates on Energy

This is a bit old but worth a look.
From Wired:

...If you’re going for cuteness, the stuff in the home is the place to go. It’s really kind of cool to have solar panels on your roof. But if you’re really interested in the energy problem, it’s those big things in the desert....

Bill Gates, head of charity, is every bit as brilliant and hyperrational as Bill Gates, head of Microsoft, ever was. The cochair of the world’s biggest foundation can hold forth on the impact of polio in India, the challenges of fixing American high schools, and the necessity of distributing better seeds to small farms in Africa. But he really gets amped up about the future of energy. “If you gave me the choice between picking the next 10 presidents or ensuring that energy is environmentally friendly and a quarter as costly, I’d pick the energy thing,” he told the audience at the Wired Business Conference in May. Gates fielded questions from Wired editor in chief Chris Anderson (and some audience members), geeking out on energy technology, policy, and economics. In these highlights from the hourlong session, Gates argues that nuclear power is still safer than all other energy options, rich countries aren’t spending enough on R&D, and installing solar panels on your roof is not helping to reduce CO₂ emissions. It’s merely “cute.”

Chris Anderson: How has Fukushima changed your perspective on nuclear power?
Bill Gates: What happened in Japan is terrible, and there are many reasons it should have been avoided. It’s a 1960s plant design, generation two, put into service in the early 1970s. Emergency planning and execution were quite weak. The environmental and human damage is clearly very negative, but if you compare that to the number of people that coal or natural gas have killed per kilowatt-hour generated, it’s way, way less. The nuclear industry has this amazing record, even equipment from generations one and two. But nuclear mishaps tend to come in these big events—Chernobyl, Three Mile Island, and now Fukushima—so it’s more visible. Coal and natural gas have much lower capital costs, and they tend to kill only a few at a time, which is highly preferred by politicians....MORE

HT: Future of Capitalism

See also:
"Bill Gates’ Children Mock Him With ‘Billionaire’ Song"
"Bill Gates on R&D, a Carbon Tax and China’s Climate Role"
Bill Gates: "Why We Need Innovation, Not Just Insulation" (BRK.A; MSFT)
Energy: "The man who’s tutoring Bill Gates … "

"Democrats offer debt plan they say GOP "can't refuse"', President to Speak at 9:00 EDT

In the words of Vinnie Barbarino: "I'm so confused".

Credit: ZeroHedge

From CBS:

Senate Democrats unveiled a plan to raise the debt ceiling Monday that abandoned President Obama's call for revenue increases as part of a deal, putting forth a plan they said would cut spending by $2.7 trillion.

"This is an offer that Republicans can't refuse," Sen. Charles Schumer said. Just hours later, House Speaker John Boehner decried the plan as "full of gimmicks."...MORE

From CNNMoney:
Budget games: Debt ceiling plan counts on war savings


From USA Today's The Oval blog: 
Obama backs Reid debt plan; will speak at 9 p.m.

Analyst Roundup: "When Will Markets React to Debt Ceiling Impasse?"

Today the Dow Industrials were down 7/10%
The Nasdaq and S&P 500 -.56%.
From Real Time Economics:

...Until now, the market reaction to the on-again-off-again negotiations in Washington has been fairly reserved, mostly because the consensus is that neither Democrats nor Republicans want to commit political suicide. But conversations with portfolio managers, strategists and economists suggest many are giving the government until end-of-day Wednesday to show some discernible progress instead of just throw debt-cutting proposals back-and-forth....

...Here are a few thoughts from market participants on when and how to pull the trigger:

James Marple, Senior Economist, TD Bank
He says that the market will continue showing “wishful thinking” until the middle of the week, but that’s when investors will realize that if there’s still no agreement between the “power players” in the Senate and the House, there will be much more of a reaction.

Robert Sinche, Global Head of Foreign Exchange Strategy, RBS Securities
If there are no agreements or even notable progress by end-of-day Wednesday, he says, Thursday morning in Asia “could become a lot more unsettling.” And it goes without saying, of course, that if Asia comes undone, European traders will follow the trend and it’ll culminate with wild trading in the U.S....MORE

Infographic: News of the World and the British Power Elite (NWS.A)

From Bloomberg via the Global Sociology blog (click for full size):
The Visual Du Jour – Power Elite: Illustrated

And let’s not forget that the presence of a power elite is, inherently, detrimental to democracy:

HT:
Simoleon Sense » Blog Archive » Weekly Roundup 136: A Curated Linkfest For The Smartest People On The Web

The CJR (!) Disses Tom Friedman

Yeah, yeah I know, the entire financial system may be on the verge of collapse but this is news!
And well written.
From the Columbia Journalism Review's Campaign Desk blog:

Tom Friedman’s ‘Radical’ Wrongness

Critics debunk—again—the NYT columnist’s ‘radical center’ dream

By Greg Marx

Over the weekend, The New York Times op-ed page published one of Tom Friedman’s periodic columns about the need for a uprising of the “radical center.” It was, unsurprisingly, terrible. Though the details of these columns change with each iteration—this one relied heavily on a new initiative called Americans Elect, which brings together two of Friedman’s favorite things, wealthy people and the Internet—the basic wrongheadedness does not.

Friedman’s idea seems to be that if only we can find some reform that will allow us to “break the oligopoly of the two-party system,” it might, someday, be possible for someone who holds 90 percent of Barack Obama’s stated policy positions—plus support for a carbon tax—to assume a position of power. Then, for reasons that aren’t entirely clear—maybe because some fantasy vice president (Michael Bloomberg?) applies some of his “pragmatic independent” pixie dust?—political dysfunction disappears, and a magical new era of “superconsensus” to solve our “superhard” problems is ushered in. Startlingly, this consensus seems to closely reflect many of Friedman’s personal policy preferences....MORE

See also last month's "China to Friedman: The world is round".

"A Golden Moment for Domestic Refiners" (WNR; HFC; MPC)

From Barron's:

Refiners like Marathon Petroleum, HollyFrontier and Western Refining are reaping the "mid-continent advantage" as U.S. crude prices stay below world levels. A big boost to margins.

Rising oil production in the U.S. and Canada is keeping U.S. crude prices sharply below those in the world market. That has been a boon to independent oil refiners such as Marathon Petroleum (ticker: MPC), HollyFrontier (HFC) and Western Refining (WNR), which are benefiting from plentiful oil supplies in the middle of the country.

Good times for Midwestern refiners could last several years, lifting stocks like Marathon Petroleum, which was spun off from Marathon Oil (MRO) on July 1.

Marathon Petroleum shares, near 40, trade for less than seven times projected 2011 profit of $6 a share. "Marathon has top-tier refining assets and is benefiting disproportionately from the mid-continent advantage," says Evan Calio, an energy analyst at Morgan Stanley, who began coverage after the spinoff with an Outperform rating and a $54 price target. His earnings estimate is above consensus at about $7 a share for both 2011 and 2012.

Calio's reference to the mid-continent advantage refers to the boost that Midwestern and Southwestern refiners now get from purchasing oil at prices linked to West Texas Intermediate, the relatively low-cost U.S. benchmark crude, and selling gasoline, diesel fuel and other petroleum products at lofty prices based on more expensive world crude sources. The profit from refining a barrel of oil in the Midwest is now around $30 per barrel, triple the level of a year ago....MUCH MORE

Apple is the Market, the Market is Apple: "Some Quick Facts About Apple's Massive Market Footprint" (AAPL; QQQ; NDX; SPY)

As of June 30 AAPL was weighted at 2.58% of the S&P 500 index, second only to XOM's 3.34%.
In addition, Apple's weighting in the Nasdaq 100 is 12.33%, far and away the largest weight in that index.
The stock is up $6.10 at $399.40.
From ZeroHedge:

Just a couple of quick observations on how the market is now pretty much "all Apple." Using David Kostin's previously published data, the first chart below shows that Apple alone accounts for a substantial portion of the best margin performing group in the S&P: Information Technology. Indeed, as the second chart shows while most sectors have been cutting their margin forecasts for H2, with a particular emphasis on materials, healthcare and industrials, one sector has been doing surprisingly well: InfoTech. And of this, Apple is the dominant margin leader. As Kostin says, "AAPL was a key contributor to the market’s continued margin expansion." Take away this cult company and the entire market's forecasted margin improvement collapses. Furthermore, as was pointed out previously, and confirming just how massive Apple's role is in the S&P earnings picture, is the fact that  Apple (AAPL) which posted revenues $3.9 billion (16%) above expectations and single-handedly contributed a stunning 40% ($0.23) of the $0.57 per share of aggregate EPS surprise for the S&P 500....MORE

Our 'Debt Ceiling ' Newsfeeds

We have 1600 feeds on various terminals, 'puters etc.
Some of the ones we favor:
Drudge Report
The WSJ's Washington Wire
The Hill
Politico
ABC News:

The Note 
Jake Tapper

Washington Post:

2 ChambersPolitical Economy

There are more but life is short

"Official corn and soy harvest estimates 'too high'" (DBA; MOO; CORB; WEAT)

From Agrimoney:

Lanworth, the analysis group which draws crop estimates from satellite data, has pegged the US corn harvest 570m bushels below government estimates, warning of weather damage and lower sowings than officials are counting on.

The prominent consultancy, which was also more downbeat that the US Department of Agriculture on prospects for the country's soybean output, said that yields of both the oilseed and corn would come in close to trend in the important agricultural states of Illinois, Iowa and Nebraska.

However, surrounding areas would see losses of 7-9%.

"The largest losses are expected in the eastern Corn Belt, where historically delayed planting under wet conditions has been followed by hot and dry conditions, and in drought-affected Southern areas," Lanworth said.

"Imagery confirms extremely low vegetation density in eastern Indiana, central and southern Kansas, northwest Ohio, and southern Michigan."...MORE

"Pelosi: Markets might have to plummet before GOP acts on debt limit"

That's not news, she said it on July 14.
It is a reminder that this is high-stakes politics.
Here's her thinking, via The Hill:

House Minority Leader Nancy Pelosi (D-Calif.) warned Thursday that it might require financial turmoil before Republican leaders agree to raise the nation’s debt ceiling.

“I don’t need to see markets drop 400 points [to be convinced],” Pelosi said during a press conference at the Capitol, “but Republicans may need to see markets drop 400 points.”

Pelosi noted that it took a stock market free-fall, in late 2008, to convince House lawmakers to rally behind the Troubled Asset Relief Program (TARP), which President George W. Bush had championed to stabilize a teetering Wall Street.


When the House shot down the initial TARP bill, the Dow fell 777 points. Four days later, the House passed the bill, with 57 members switching their votes to yes....MORE

Here are the latest headlines:

Politico 4:52 EDT
No debt deal in sight, parties go separate ways

New York Post 4:55 EDT
Last-minute debt talks moving on several fronts as deadline approaches

MarketWatch 5:05 EDT

No U.S. debt deal; Obama meeting with Democrats

Chance of technical default 20%, investor says

Fox, no timestamp
The Debt Talks: Asia and the Heat of the Moment

It's the heat of the moment in the debt limit talks. And for the moment, this is all about Asia.
As in when the Asian markets open for trading Sunday.
Electronic S&P futures trading begins at 6 pm ET Sunday. Nikkei futures also go hot at six. Trading in Treasury futures starts a half hour later.
Tokyo opens at 8 pm ET Sunday, followed by the Hang Seng Index in Hong Kong at 10 pm ET.

Asian Markets: "You're on Your Own Deal Looks Unlikely for 5:00 Today"

From ZeroHedge:

From The Hill: "Asian Markets? They Are On Their Own - Deal Today Looking Unlikely"
With 10 minutes remaining until 4 pm, and no newsflow to the contrary, it was pretty obvious that there would be no deal, at least in the immediate future. This has now been confirmed by ABC News's Jonathan Carl: "Asian markets?  They are on their own. A Republican source tells ABC News negotiators do not expect to have a deal or even the framework of a deal on the debt ceiling by 4 p.m. today, as House Speaker John Boehner had said he wanted to steady jittery Asian markets when they open." And here is why the dip buyers will be having a field day today: "In fact, the source says a deal today is now looking unlikely." Remember: under Bernanke, nothing can possibly ever go wrong. So buy everything, buy with both hands, buy on margin. In fact, take out a 4th lien on your unborn child and margin that up while buying every dip. Remember: there is no risk. The central planners have spoken....MORE

How the Federal Reserve Has Crushed Middle Class Savers

Starting in 2008 we had so many posts on what was coming that I ended up boring myself.
Here's one from December of that year:
"Mom, Ben Bernanke Likes Bankers Better than He Likes You"

Savers are getting screwed as banks reliquify their balance sheets.
The ostensible reason short rates are now officially at 0.2% is to encourage banks to lend.
It's not going to happen. The banks are not taking on individual's or commercial's risk. Auto loans for a FICO score of less than 720 aren't being written.
So what are they doing? Carry-trade (say it like "Toga party").
For months, the borrow U.S. short, lend U.S. long has been used to rebuild banks balance sheets, destroyed by their former business practices.

Now with the Fed explicitly committed to lowering long rates (the 30-year trading at 2.63%, the 10-year at 2.144%), even borrowing at 0.2% doesn't give enough spread to run cash flow through the income statement and onto the bank's balance sheets.
What will the banks do? My guess is they will start buying sovereign debt for the yield, maybe even selling it to the Fed so they can take the money and do it all over again.
Right now Australian 15-years are priced at 4.20%.

Today, the American saver gets a pittance in a money market. It's really nothing but a wealth transfer racket.
Mom, we're going to Sydney.
Similar thoughts at "Investment Postcards from Cape Town":

Here's today's story, from Barron's:
The Steep Costs of Easy Money

The Fed's loose monetary policies have delivered a body blow to savers—and to the economy.
Aesop and his ants had it all wrong: The advantage belongs to the grasshoppers.

A new study by two economists at the nonpartisan American Institute for Economic Research concludes that Federal Reserve Board Chairman Ben Bernanke's crisis management has kept interest rates so low for so long that it has deprived savers of hundreds of billions of dollars in interest income. That, in turn, has cost the economy $256 billion to $587 billion in consumption and 2.4 million to 4.6 million jobs, but has shaved between 1.75 and 3.32 percentage points to gross-domestic-product growth.

The beneficiaries of the Fed's policies have been borrowers. In other words, people employing record-inexpensive leverage—the grasshoppers among us—have been thriving, while the fortunes of the prudent, savings-minded ants have been wilting.

Bernanke, defending his policies, has cited a study by the central bank's own economists that concluded the Fed's policy of easy money and huge asset purchases prevented a ruinous bout of deflation, and will have contributed to the addition of three million jobs to the economy by 2012. Minus the Fed's actions, there would have been 1.8 million fewer jobs, the study claims. Bernanke cited the Fed study in a footnote to the semiannual Monetary Policy Report to the Congress, which he delivered July 13 to the House Committee on Financial Services.

Like the American Institute's study, the Fed paper admits that savers paid a price. But if you read between the lines, the Fed paper is arguing that its actions significantly boosted the fortunes of people who own stocks, are inclined to borrow for business, own homes and purchase cars and major appliances—supposedly, most U.S. households. While the Fed study doesn't claim that Bernanke's policies constituted a magic bullet, it argues that any standard macroeconomic model would show that the easy money and the asset purchases created a net positive effect on spending.

"The Fed paper argues that it impacted the economy positively through three main channels," says Polina Vlasenko, who co-authored the American Institute paper with fellow economist William Ford.

First, the Fed notes, it has kept rates low to stimulate borrowing; second, it has created a wealth effect by encouraging savers to move money from certificates of deposit and low-yielding bonds into riskier assets like equities. Third, it depressed the value of the dollar, stimulating export growth. All of these channels worked to some extent, says Vlasenko, who discussed the research with me by phone last week. "What we say is that there is another channel affecting the economy, which is that as you keep rates low for a very long time, you deprive those who save of their interest income."...MORE

"Is There Hope for the Unemployed?"

From the New York Times' Economix blog:

Recent reports of the bleak jobs outlook for the United States brought to mind an eye-opening report for the Council on Foreign Relations by Michael Spence, a Nobel laureate, and Sandile Hlatshwayo. I highly recommend that report, at the very least its summary, “Globalization and Unemployment,” in the current issue of Foreign Affairs. It clearly explains our current dilemma in the labor market.

The authors break down our economy into those sectors whose output is traded across international borders (the tradable sectors) and is thus subject to competition from foreign producers, and those sectors whose output is not traded across international borders (the nontradable sectors).

In the tradable category are manufactured goods, farm products, raw materials and financial, consulting, educational, computing and other technical services. Prominent in the nontradable sector are government, health care, retailing, construction, restaurants and, for the most part, legal services.

The authors then explore the question of how employment and value added per employee developed in both sectors from 1990 to 2008. The chart below, based on Figure 5 of the report, answers the first of these questions.

The Tradable Sector
Jobs in the tradable sector were added primarily in high-value services. They were lost in manufacturing, through outsourcing of the lower value-added components of the value chain to other countries.
The net effect has been that of the 27.3 million jobs created in the American economy from 1990 to 2008, only 662,000 new jobs were added by the tradable sector. That is only 2.3 percent of total job creation in the economy.

The concept of the “value chain” is fundamental to understanding the impact of globalization on the American economy. The value chain for a product consists of the entire series of discrete steps from development and design to final sales, including transportation and marketing.

The value added by a particular step in the chain is created by the capital and the labor that step employs. It is calculated as the value of the output by that step minus the cost of intermediate goods and services used by that step but produced outside that value chain by other producers and minus the cost of raw materials and energy used by the particular step in question.

The value added produced by all industries in a nation adds up to the nation’s gross domestic product.
In a global economy with very cheap transoceanic transportation, the various steps in the value chain of a final product may be performed by different countries, depending on the value added of the step and the cost or labor used to perform that step. No aircraft or automobile sold by an American manufacturer, for example, has been produced wholly in the United States.

Until now, the developed countries have tended to retain the steps that create high value added per employee and outsourced the rest to other countries. That practice naturally contributes proportionately more to gross domestic product in the United States than to employment. Furthermore, it tends to yield high incomes to highly educated people and depress the wages of lower-skilled American workers competing with foreign labor in the lower value-added segments of the value chain.

The Apple iPad, for example, was designed and developed by highly educated employees of Apple Inc. and is marketed by that company. But the device is assembled by the Taiwanese company Foxconn in its manufacturing plants in China, with components manufactured in South Korea, Japan and Europe.

It has been reported that of the retail price of an iPad of $499, Apple spends about $291 on components, typically produced in other countries. It retains a gross profit of about $208 per iPad, or about 42 percent of the retail price. Some of that gross profit covers marketing and administration; with worldwide sales, even those outlays produce jobs both in the United States and abroad.

Thus, the iPad adds proportionately much more to G.D.P. in the United States than to employment there. It supports some high-paying jobs in the United States, but few if any middle-income and lower-middle-income jobs in manufacturing. It shows that technical innovation in the United States is great and can contribute to the growth of G.D.P. per capita, but it may not offer Americans many jobs....MORE

Excerpt: "I'm Feeling Lucky: The Confessions of Google Employee Number 59"

From the Wall Street Journal:
The Beginning

An insider recounts the early days: the bizarre job interview, April Fools' pranks that enraged users, roller hockey, platters of sushi—and the uneasy leap to the mainstream.

In November 1999, Douglas Edwards became fledgling Google's first "brand manager," making him employee No. 59. In this excerpt from his new book, "I'm Feeling Lucky," Mr. Edwards gives an inside view of the company's early days, starting with his job interview with co-founder Sergey Brin, then 26 years old.

Cindy McCaffrey, director of public relations, brought me back to the conference room to wait for Sergey. I wasn't nervous. Sergey was about the age of my favorite T-shirt (I was 41) and a Russian by birth. I had lived in Russia. I spoke some Russian. I had Russian friends.

I felt unusually confident that the interview would go well. Perhaps I would become his mentor and we would toast each other's health with fine Siberian vodka. Sergey showed up wearing roller-hockey gear: gym shorts, a T-shirt and in-line skates. He had obviously been playing hard. I had known better than to wear a tie, but he took office casual to a new level.

Sergey pored over my résumé and began peppering me with questions. "What promotion did you do that was most effective?" "What metrics did you use to measure it?" "What types of viral marketing did you do?"

"How much do you think a company our size should spend on marketing?" Sergey asked me. Based on his earlier questions, it was easy to guess what he wanted to hear from me. "I don't think at this stage you should spend much at all," I said. "You can do a lot with viral marketing and small budgets."

He nodded his agreement, then asked about my six months in Siberia, casually switching to Russian to see how much I had picked up. Finally, he leaned forward and fired his best shot, what he came to call "the hard question."

"I'm going to give you five minutes," he told me. "When I come back, I want you to explain to me something complicated that I don't already know." He then rolled out of the room toward the snack area. I looked at Cindy. "He's very curious about everything," she told me. "You can talk about a hobby, something technical, whatever you want. Just make sure it's something you really understand well."

I reached for a piece of scrap paper as my mind raced. What complicated thing did I know well enough to describe to Sergey? I decided to go with the general theory of marketing, which was fresh in my mind, because I'd only learned it recently.

One of my dirty little secrets was a complete lack of academic preparation for the business world. Fortunately, my boss at the San Jose Mercury News, where I was working as a brand manager, had a Harvard MBA and a desire to drive some business theory into my thick skull. She had given me a bunch of her old textbooks, along with strong hints that I should spend time reading them. I began regurgitating everything that I could remember onto the paper in front of me: The five P's (or was it six?), the four M's, barriers to entry, differentiation on quality or price....MORE

See also:
Newly Rich or Expect to be? Google Employee #23 on What to do With Your Millions

Newly Rich or Expect to be? Google Employee #23 on What to do With Your Millions.

"How a Personality Test Described as “A Joycean Soliloquy in Whitmanic Rhythms, The Interior Monologue of a Neurotic Modern Everyman” Became Corporate America's Barometer of Employability"

From Believer Magazine:

DISCUSSED: Rent-A-Center, Monthly Diarrhea, Satisfactory Sex Lives, Minnesota Multiphasic Personality Inventory, Tall Women, How to Read a Person Like a Book, The Peronal Data Sheet, Robert Woodworth, Starke Hathaway, J. Charnley McKinley, This Republic of the Insane, Vivisected Frogs, Galloping Empiricism, Tarry-Looking Bowel Movements, Holding [Your] Urine, Diamond Thieves, Multers, Senator Sam J. Ervin Jr., The Funhouse Mirror of American Capitalism, Job Employees Who Think Like Convicted Felons

Walt Disney World was a curious choice for the 1998 meeting of Rent-A-Center managers. The giddy whirl of theme-park rides and the melting heat of a Florida September made an odd setting for talk about the rent-to-own couches and coffee tables that are the company’s stock in trade.

Things got even stranger early one morning when the managers were herded into a chilly conference room. They had been scheduled to participate in a budgeting workshop, but company leaders instead announced an abrupt change in plans. Employees would immediately begin taking the Management Test, a five-hour battery of nine separate examinations.

“We thought, ‘Uh-oh, this must be that test we’ve been hearing about,’” recalls Art Staples, then a manager of several San Francisco–area stores. Rent-A-Center had been bought by another firm just a month before, and word had gotten out that the new company required all employees to take a long and demanding test. “There was nothing we could really do except refuse to take it, walk out of the room—and find our own transportation back to California,” Staples says.

The managers knew, too, that their scores on the test could determine the course of their careers at Rent-A-Center—or even whether they had jobs at all. “We had been told that if you did not pass the test, then you would not be allowed to work in management,” says Scott Hadley, another store supervisor from the Bay Area. “We were afraid that if we failed, we would be let go.”

An anxious hush fell over the room as the exams were passed out. Within minutes, however, the silence was breached by a stir of astonishment. “People were looking around at each other with this expression of ‘You’ve got to be kidding me,’” Staples recalls. The questions in front of them had nothing to do with renting furniture, or managing employees, or keeping the books.

“My sex life is satisfactory.” “I have diarrhea once a month or more.” “I would like to be a florist.” “Everything tastes the same.” “My mother was a good woman.” “I am a special agent of God.” Arriving at the question “I liked Alice in Wonderland, by Lewis Carroll,” the managers might well have felt that they had slipped down the rabbit hole. The test was the MMPI—the Minnesota Multiphasic Personality Inventory, a personality test created decades earlier at a Midwestern mental hospital.

Hadley and Staples were offended and angered by the personal nature of the items. “These questions had no relation to what we did for a living, to whether we were good managers or not,” Hadley says. “Our employer just didn’t need to have all that information.” He was particularly struck by an item that read, “I like tall women.” “How was I supposed to answer that?” he asks. “My wife is five foot three.”...MORE

Peak Ethanol in Bozeman

More accurately, peak public intoxication.
From The Mess that Greenspan made:

The Best of the Bozeman Police Reports

A store employee said a man was in the store “acting crazy” but “would not say what type of crazy behavior” the man was exhibiting. The man, who was trying to provoke a fight, was gone when police arrived.

Six black cows were in a woman’s yard at 5:30 p.m. The cows did not belong to her.

Officers spoke to a man who appeared to be breaking into a vehicle. It ended up being his vehicle but he was very intoxicated. He was warned about driving and given a ride.

An officer noticed an intoxicated man passed out in his vehicle with the engine running. He was arrested for Driving Under the Influence.

Police warned transients and members of the Missoula Maggots rubgy team for urinating in the 300 block of East Mendenhall Street at 11:30 p.m.

About 20 sheep were “headed northbound” on Jackrabbit Lane at 1:30 a.m.

An intoxicated man stole a hanging flower basket from a business. Officers “followed the flower trail to his residence,” where he was cited and released.

An intoxicated man was warned for trying to climb the face of a downtown building....MORE

Seagate Slammed By Margin Concerns, Rare Earths Prices (STX; MCP; WDC)

This is a couple days old but worth posting as a signpost along the way.
From Tickerspy via Yahoo Finance:

Shares of hard disk drive maker Seagate Technology (NASDAQ: STX - News) are plunging 17% after the company said rising rare earths prices will result in a 200-basis point margin headwind in the second half of this year. California-based rival Western Digital (NYSE: WDC - News), which reports earnings after the close of U.S. markets today, is following suit with a decline of 8%.

Not surprisingly, the Seagate news is weighing on the Data Storage Stocks Index, which is lower by 1.1%. Research firm Brean Murray said Western Digital will probably feel a more muted impact from rising rare earths prices than Seagate, but that the latter will feel a pinch nonetheless. Rare earths prices have been soaring over the past year as China, which controls 95% of the global export market for the 17 elements used to produce an array of high-tech gadgets, has consistently pared its export quotas. The news may be having a positive affect on the Rare Earths Stocks Index, which up 1.2% today. Shares of Molycorp (NYSE: MCP - News), the largest U.S. rare earths miner, are trading flat on the day....MORE