THURSDAY READS

Be Careful What You Wish
http://www.zerohedge.com/news/2013-05-07/art-cashin-warns-bernanke-fans-be-careful-what-you-wish-deficit

The UK Sterling And BOE http://www.marctomarket.com/2013/05/the-boe-and-sterling.html

All Empires Crash http://t.ritholtz.com/bigpicture/#!/entry/all-empires-crash-soon-after-they-reach-their-peak,518b3493da27f5d9d0bfc005

Big Banks Push Back http://online.wsj.com/article/SB10001424127887324244304578471312603346762.html?mod=ITP_pageone_0

What's The Real Cost?
http://www.businessinsider.com/heritage-immigration-cost-63-trillion-2013-5?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29

Berkshire's Munger Speaks
http://money.cnn.com/video/news/2013/05/08/n-charlie-munger-europe-japan-economy.cnnmoney/index.html

SUNDAY READS

Confidence Lags
http://wealthmanagement.com/research-amp-tools/advisor-confidence-plunges?NL=WM-10&Issue=WM-10_20130503_WM-10_575&YM_RID=rleasset01@hotmail.com&YM_MID=1391235&sfvc4enews=42

Cost-cutting Coffee Choices
http://www.moneytalksnews.com/2013/05/03/the-best-cheap-coffee/?utm_source=newsletter&utm_campaign=email-2013-05-03&utm_medium=email

Apple Anyone?
http://www.fool.com/investing/general/2013/05/01/apple-stock-it-gets-worse.aspx

Predicting: How Accurate Is It?
http://tech.fortune.cnn.com/2013/04/26/nate-silver-what-big-data-cant-predict/?iid=SF_F_River


Can You Afford It?
http://www.moneytalksnews.com/2013/05/03/study-growing-number-of-people-cant-afford-to-buy-or-rent-their-homes/?utm_source=newsletter&utm_campaign=email-2013-05-04&utm_medium=email

THE SNIFFING AROUND RULE

Seven out of 30 is a pretty disturbing number.

That's an eye-catching low of 23%, hardly a respectable number for any industry. But in 2012 only seven of the 30 largest shipping firms made money.

Since 2007 excess capacity has been the industry's worse nightmare. The global downturn added to the problem. It's one of the oldest economic dilemmas, too much capacity and too little demand.

 Europe and Asia, key shipping routes, slowed and high fuel costs didn't help. And it's tough to raise rates in such an environment. Over capacity and decreased demand, according to industry sources, caused freight rates to take a hit, falling by nearly 7%.

According to a WSJ article, the cost of a 20 foot container going from China to Europe that cost $1200 at the first of this year now runs about $800.

The high fuel costs led to building more fuel efficient freighters, adding to an already over supply of vessels some estimate that is at least 10% above current needs. There is also fears about another price war like the one in 2011 breaking out.

In our Thursday Reads we posted a link: Shipping Next. It's worth a look. The whole industry passes the sniffing around rule.

http://www.cnbc.com/id/100697092

WEEKEND READ

Forget Saints. It's preferreds that are marching in now.
Bank preferreds.

With interest rates lower than low, a niche' is being fulfilled, according to the WSJ.

Financial firms so far this year have unloaded nearly $14 billion of these preferred shares in the U.S. It's the fastest such an amount has sold this early since 2008.

In the hierarchy of stocks preferreds usually stand in front of common shares should something go shake, rattle and broke. Preferreds are like bonds, however, and when interest rates rise share values sink. Just the reverse is also true.

Right now the ducks are quacking--in this case, they're two sets of ducks, the yield starved public and big banks that seek to repair or bolster their balance sheets.

Now the Journal article says this allows banks to help themselves without hurting shareholders. But you might want to add a "Not so fast!" to that.

The yield might look appetizing now in this low-interest rate scene, but when rates start back up--and they will--these gems could belly flop. The surprise might be higher rates than anyone foresees. It wouldn't be the first time.

So if you're thinking about them read the fine print carefully. Are they callable, putable, accumulative are just a few of the things you want to know.

It remains to be told if they turn out to be Saints.

WE'RE ALL GONNA SEE

There is, as one might expect, no shortage of quotes about today's announced job numbers.

We thought it might be fun and perhaps instructive to list a few. These are from Market Watch.

• “Jobs [numbers] more good news on top of consumer confidence, lower deficit, $35B debt paydown, housing recovery. Only cloud on horizon: sequester.” — Rep. Gerry Connolly, Democrat of Virginia. @GerryConnolly.

• “Now is not the time for Washington to impose self-inflicted wounds on the economy. The Administration continues to urge Congress to replace the sequester with balanced deficit reduction, while working to put in place measures to create middle-class jobs, such as by rebuilding our roads and bridges and promoting American manufacturing.” — Alan Krueger, chairman of President Barack Obama’s Council of Economic Advisers.

• “Today’s jobs report showed some signs of hope for the thousands of people who found a job in April. However, this growth is way behind our nation’s potential. We must focus on job creation more than one day a month.” — House Majority Leader Eric Cantor, Republican of Virginia.

• “Like: Biggest rise in temp hiring in 13 months. Don’t like: Zero [manufacturing] job gains, and first decline in construction since last May.” — Ian Shepherdson, chief economist, Pantheon Macroeconomic Advisors Inc. @IanShepherdson.

• “The latest jobs report shows that we are a long way from a true resurgence in American manufacturing. We strongly believe that we won’t see real growth in manufacturing jobs without the right policies from Washington, DC.” — Scott Paul, president of the Alliance for American Manufacturing.

• “The Fed will view this with some relief. The better job numbers will diminish some of the near term risks to growth and in principle diminish some of the angst accumulating with the roll over in the inflation data.” — Eric Green, Global Head Rates, FX & Commodity Research, TD Securities.

• “This month’s abysmal jobs number – 165,000 new jobs in April, barely enough to cover new people coming into workforce – is a self-inflicted wound. Government austerity – tax hikes and spending cuts – is suffocating the economy, just when it needs air. And the perversity will get worse. The sequester cuts are only now beginning to hit.” — Robert Borosage, co-director of the Campaign for America’s Future. 

There's a line in an old Don Williams song: "I guess we're all gonna be what we're gonna be." It's probably just as likely we're all gonna see what we want to see.

BRIEFS

There's the old saw about don't do as I do but do as I say. 

Some think that's what Fed Chairman Ben Bernanke should do, especially now that the unemployment rate has dropped to 7.5% and many folks seem to be cheering.

http://online.wsj.com/article/SB10001424127887323296504578394242752505924.html?mod=WSJ_Opinion_LEFTTopOpinion

Speaking of jobs, this morning's report surprised with 165,000 new jobs in April versus an expected 140,000.

But as CNN reported the bigger story was the Bureau of Labor's revision of those abysmal March numbers. The BLS now says 138,000 jobs were added in March, 50,000 more than the 88,000 originally announced.

As if that weren't enough spike for the economcic-recovery-punch bowl, the BLS added more jobs to their February count, claiming 332,000 jobs came on board.

So much for a spring slowdown is how some cheerleaders view it. Only time will tell.
http://money.cnn.com/2013/05/03/news/economy/april-jobs-report/index.html

For the sake of some semblance of balance here's another side, perhaps a not so rosy one, to those job numbers.
http://www.marketwatch.com/story/dark-side-to-jobs-report-big-drop-in-hours-worked-2013-05-03

THURSDAY READS

Shipping Next
http://www.cnbc.com/id/100697092

It's France, Jake.
http://www.testosteronepit.com/home/2013/5/1/the-french-governments-exquisite-bullying.html

Skill Over Rated
http://blogs.marketwatch.com/thetell/2013/05/01/words-of-wisdom-from-investment-guru-howard-marks/

Prices Never Drop
http://www.financialsense.com/contributors/michael-shedlock/here-we-go-again-builders-hold

Blame Game
http://www.guardian.co.uk/business/2013/may/01/federal-reserve-congress-cuts-policy

First One Then Another
http://www.reuters.com/article/2013/05/01/us-usa-fiscal-defense-idUSBRE94016S20130501

WEDNESDAY READS

What's In It?
http://www.medhelp.org/nutrition/slideshows/Nutrition-Labels-101-How-to-Evaluate-Packaged-Foods/825/1

Another View
http://investorplace.com/2013/05/3-canadian-stocks-worth-buying/

1700 By Halloween? http://www.marketwatch.com/story/sp-500-will-be-at-1700-on-halloween-2013-05-01

Hard To Find
http://online.wsj.com/article/SB10001424127887323798104578455192845985954.html?mod=ITP_pageone_0

Fed Sits Tight
http://www.cnbc.com/id/100695681

Haircut Warning From Bill Gross
http://money.cnn.com/2013/05/01/investing/pimco-gross-bull/index.html

Spanish Debt Buyers: A Look
http://www.marctomarket.com/2013/05/another-look-at-who-has-been-buying.html#more

ECONOMIC POLITICS

Economics is about far more than numbers and graphs.

More often than not it's about politics. The big debate about fiscal rectitude and high levels of debt brought out the "political gottcha corp," this time on the left.

The huge focus on a spreadsheet error, very common occurrences, didn't really change the basic fact of the study: big debt slows growth.

Common sense tells one that. What it doesn't tell is what's the magic number or ratio. The normal human temperature is 98.6 with slight variation up and down. 

Hang around an ER and you'll see some temps of 102 or 103-plus even. Do they all die? Absolutely not. But all get treated.

http://gregmankiw.blogspot.com/2013/04/stevenson-wolfers-on-reinhart-rogoff.html

ECONOMIC SNAPSHOT

A friend toils on the workman's compensation side of medicine. He's been doing it for nearly three decades.

For the unfamiliar WC is all about work-related injuries. When people are injured on the job their employer usually pays for work-related medical care. And a claim gets filed with the state and insurers.

Each state has its own regulations and each state is different. But it's big business that involves essentially the public trough, a place where many sup, perhaps not the least of whom are PI or personal injury attorneys.

Drive into or out of just about any airport in America and you'll see the billboards. On the rare chance you miss them there, check out late night infomercials and talk radio. Vultures can smell decay. 

My friend though he owns three clinics is a mom-and-popper in a declining mon-and-popper industry that's being swallowed whole by big conglomerates. Just like Costco and Walmart in retail to farming and pharmacies like CVS and Walgreens to you name it, the genie is out of the neighborhood bottle.

It's a big, cold, indifferent business despite the marketing. Vultures can also smell money. But we'll leave that for another time.

Besides worker-related injuries most of these clinics do other tasks like pre-employment physical exams and drug screens and even urgent care to a degree. In some ways they are far more sensitive to changes in the economic landscape than all the economists with all their econometric minutiae together.

Pre-employment physicals have to do with jobs. And the number fluctuates not only with the seasons but the times. Even drugs screens are a decent economic indicator. A positive test usually results in a non-hire, especially in harder times like now.

But before the recession when the economy was percolating things were so tight employers were hiring applicants with positive tests. They needed bodies. In short it's a cycle. 

The other neat feature is one gets to talk to lots of business owners, large and small. It's an informal survey, a snapshot, but it's much closer to where the surf and the sand unite than econometric models.

During good times work-related injuries usually increase. And foot traffic, not unlike, say, retail, tends to decrease during slower periods. It probably makes too much common sense for the cognoscenti.

And besides it's much more difficult for them and MSM to manipulate.