Ayn Rand: Casting The ‘Atlas Shrugged’ Movie

This was posted on WSJ Blog. I can’t wait to see this movie. Ayn Rand’s Atlas Shrugged is one of my all-time favorite read ever.

If there’s one thing we know, it’s that Deal Journal readers like Objectivist author Ayn Rand. So, good news for Rand fans who can tear themselves away from their copies of the Romantic Manifesto long enough to get to a theater: a new Atlas Shrugged movie is in the works, and a new Fountainhead (potentially starring Brad Pitt) may not be far behind.

Some of the chess pieces are already in place. Lionsgate vice chairman Michael Burns has acquired the rights. Vadim Perelman, the director of The House of Sand and Fog, will direct the movie, which will star pillowy-lipped, bedroom-eyed actress Angelina Jolie as the heroine, Dagny Taggart.

Read the WSJ Blog

Atlas Shrugged IMDB

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Fed might stop its rate cutting campaign (Special report)

New York, Apr 26, 2008

Special Report

Fed is in the hot-seat torn between cutting rates to spur the U.S economic growth and taming the skyrocketing inflation. Most FOMC members are concerned about the spiralling inflation. They favor either leaving the rates at this level or some even wouldn’t mind raising the rate by 25 basis points. If the credit market is tight and economic growth has stalled, why would the Fed not slash the rates on April 30th? One word: Inflation. Inflation has not just surfaced yesterday. But Fed as always overlooked inflation cutting rates left and right in the last 6 months. The rate cutting campaign started last August.

Take a look at the 2-YR treasury yield over the past month (chart below), up almost 70 basis points. In fact, yields are up across the board for treasuries, as the stock market rallied over 4% this week. The most dramatic action in the bond market was in the short end; 3mth, 6mth, 2yr & 3yr yields causing the so called ‘flattening’ of the yield curve.

Inflation

In early April, Newsday ran an article on Inflation that carried this interesting chart. The current way of measuring inflation is absurd. What most economists and Fed prefer to use is Core inflation which excludes volatile food and energy. Barry Ritholtz in his Big Picture blog highlights the difference among the terms “core”, “actual” and “real rate” of inflation. He says that since late 2002, the core rate dramatically misrepresented actual inflation. This led Fed taking rates down too low (thanks to Greenspan) and leaving rates at that level too long. The combination of ultra lower rates and increasing money supply sent the U.S dollar to 15 year lows against major world currencies, raised the cost of all goods denominated in USD (commodities such as Oil, Grain, Steel etc) and lowered the standard of living for many people.

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Why Apple’s iPhone matters?

Apple’s earnings this week blew away Wall Street’s expectations. Apple sold 1.7 million phones in the last quarter alone and it is on track to sell 10 million phones by year-end. Apple’s iPhone entry not only disrupted the mobile device market but also cracked open the carrier-centric structure of the wireless industry. Apple used its design prowess and product development experience in creating a simple, powerful and yet elegant device. Before Apple entered the device market, the market was dominated by major mobile players including RIM’s Blackberry, Motorola and Nokia. Many predicted that Apple won’t be able to make its footprint in an already overcrowded market.

But within the first 6 months, Apple managed to sell over 5 million phones. Analysts at Piper Jaffray expect Apple to capture at least 7% market share by 2009. This is huge for a new entrant given that they have no history in the mobile industry. The chart below shows that iPhone has already taken over Symbian and WinCE as the No.1 player in the Browser market. Symbian’s share is huge outside of North America, but obviously it has the most to lose as Apple is planning to release the iPhone in every major International market, and already started in the U.K.

Smart Devices Market Share

Let’s look at the market share. iPhone continues to eat up into Window Mobile devices and Palm’s share and eventually challenge Blackberry’s dominance (perhaps next year??).

1. RIM’s Blackberry – 41%

2. Apple’s iPhone – 28%

3. All Window Mobile devices – 21%

4. Palm – 9%

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China has largest Internet users

BEIJING (Reuters) - China has surpassed the United States to become the world’s largest Internet-using population, reaching 221 million by the end of February, state media said on Thursday.The number of Internet users in China was 210 million at the end of last year, only 5 million fewer than the U.S. Internet users then, Xinhua news agency said, quoting the China Internet Network Information Centre.Reuters article on China Internet users

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USD continues to fall driving Oil prices up

It has been a record breaking day in the financial markets with the US dollar falling to a new all-time low and oil prices hitting a record high above $119 a barrel. When it comes to oil and the US dollar, it is difficult to determine which is the primary driver because the dollar’s weakness pushes oil prices higher while oil prices hurts the outlook for the US economy. Although it can be argued that higher crude prices are inflationary, it is not that simple because the Federal Reserve cannot raise interest rates to combat inflation. With the market already pricing in only a quarter point rate cut, to forgo a rate cut completely would send a message to the markets that the Federal Reserve is not quite ready for. At this time, the Fed’s bigger problem is the pressure that $5 gas prices may have on consumer spending and corporate profitability.

The pocketbooks of US consumers are getting pinched by the day as prices rise globally. This morning, there have been reports that Mattel is raising toy prices and even the MTA (Metropolitan Transportation Authority) here in NY is planning to raise the price of alcohol, soda and snacks for the first the first time in 4 years; the price hike of 25 percent is by no means shallow. Housing market numbers were released this morning and they were not as bad as analysts had feared. The absolute number of existing homes sold was slightly more than expected even though the drop on a percentage basis was greater. House prices actually ticked higher which is a relief for the housing market even though that relief will probably be temporary. California just reported the highest level of mortgage defaults in 15 years, reflecting the severity of the problems in the US real estate market. Expect the US economy to get worse before it gets better.

Check out more on Daily FX

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China bubble finally popped

SHANGHAI, China - Retiree Guan Yuhuai plunged into stock trading for the very first time when prices were beginning to soar two years ago. Within a month, he doubled his investment, and he was hooked. But with the market’s recent plunge to half its October all-time high, Guan and millions of other Chinese investors are getting a rude introduction to the downside of capital markets.

Millions of individual Chinese investors dumped their savings into the stock market as the Shanghai Composite index soared 130 percent in 2006 and 97 percent in 2007.

But it has fallen sharply since hitting an all-time high of 6,124.04 in mid-October after regulators suspended sales of mutual funds to new subscribers, deflating what they feared was a bubble in stock prices. Repeated interest rate hikes and other tightening measures have also contributed to the decline.

With inflation running at over 8 percent, authorities are unlikely to relax monetary policy - the one thing that might actually rekindle buying sentiment, he says.

Chinese mutual funds, the main vehicle for individual investments, lost $93 billion in the first quarter of this year, with combined assets under management falling to $357 billion, Xinhua News reported Tuesday. It cited figures compiled from earnings reports by TX Investment Consulting, a local securities company.

http://www.forbes.com/feeds/ap/2008/04/23/ap4923930.html

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HD enthusiasts crying foul over cable TV’s crunched signals

Interesting analysis from AP on HD signal quality 

For example, Discovery’s bit rate was 14.16 megabits per second on Verizon’s FiOS system but only 10.43 Mbps on Comcast; A&E HD was 18.66 Mbps on FiOS compared with 14.48 Mbps on Comcast. The FiOS system didn’t offer Sci Fi HD, which Fowler’s testing showed at 12.59 Mbps on Comcast.

The source image might not have been recorded in HD, or the television’s settings, the viewing angle and even the ambient lighting in the room could be the cause.

Derek Harrar, a Comcast senior vice president in charge of video, said the company recently began using new technology on some channels to compress three HD channels into the bandwidth of one analog station. Other channels continue to get the previous 2-to-1 compression.

Verizon’s FiOS doesn’t compress the signal once it receives it, and Willcox said it’s considered the picture quality “benchmark.” However, Verizon said the system is growing but is now available only in parts of 17 states and has just over a million subscribers — compared with more than 24 million for Comcast.

http://biz.yahoo.com/ap/080420/compressed_hd.html

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Private profits, socialized losses

On the April issue of Fortune, Allan Sloan writes an insightful article on the current Financial crisis highlighting the risks taken by major investment banks at the expense of taxpayers money.

Here’s the math. say the Fed extends $500 billion of emergency loans to firms in need of short-term money. They are paying around 2.5% interest to Uncle Ben. That rate is way below what they’d pay to borrow in the open market, if they could borrow. The difference between the open-market price and 2.5% is a gift from us, the taxpayers. 

In the case of Bear Sterns deal, Fed is fronting $29 billion to Bear, which in turn will offload $30 billion of its financial toxic waste into a fund run on the Fed’s behalf.

http://money.cnn.com/2008/03/28/news/economy/disaster_sloan.fortune/index2.htm

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Video Game industry growth looks solid

Despite the slowdown in the U.S economy, one industry is defying the gravity. Video games industry is posting some solid growth numbers. Take a look at the market stats here.

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NY/Miami Real Estate Market Data

I like the Miami chart. It tells exactly what happened in the past 10 years. Does that foretell what might happen in NYC?

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Art Review: Andrea Cukier in Midtown

Art Review: Andrea Cukier in Midtown

Shows like this are why we live in New York. This is someone who will be creating important and emotionally impactful art for a long time, the rare artist whose work will send you flying out into the street afterward with an elevated pulse and renewed passion for being alive. Argentinian expat Andrea Cukier’s work is defined by subtlety, yet packs a potently visceral intensity. To say that her collection of nebulous yet riveting oil paintings - on display at the Consulate General of Argentina through April 30- is captivating is the understatement of the year. Many of these works are pensive and stark, yet rich with emotion and sometimes longing. The artist has a special affinity for the port of Buenos Aires, several views of which are featured in this show.

http://lucidculture.wordpress.com/2008/04/11/art-review-andrea-cukier-in-midtown/

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Trade deficit widens again

This nice chart from reedconstructiondata.com shows the U.S current deficit with other countries. This current deficit obviously has an impact on the U.S dollar and interest rate.

Let’s look at the finer points

Top 5 U.S Imports

1. Canada ($27.7 billion)
2. China ($24.1 billion)
3. Mexico ($17.7 billion)
4. Japan ($12.5 billion)
5. Germany ($8 billion)

Top 5 U.S Exports

1. Canada ($21.2 billion)
2. Mexico ($12.2 billion)
3. China ($5.8 billion)
4. Japan ($5.7 billion)
5. Germany ($4.6 billion)

Now, let’s look at our trade deficit with China since 2001. Well to put plainly, it looks bad.

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U.S Japan Housing crisis looks similar

Three points mentioned by Barry Ritholtz on BigPicture blog makes complete sense

1. Excess housing inventory is currently at or near historic levels.
2. The Housing Affordability Index is still very elevated. (The index measures median household income relative to the income needed to purchase a median-priced house). While it is off of its recent highs, it is still above its historic mean by significant amounts.

3. The House Price to Rental Ratio. As the chart shows, we are not remotely close to normalized levels yet.

U.S. home ownership rates from 1900 through the current year (Courtesy:WSJ)

Filed under: Economy, Housing | | 1 Comment »

Tale of three bubbles

Personally I don’t think the Housing bubble has burst completely yet. It has some more to go. Mark Twain once said, “History doesn’t repeat itself — at best it sometimes rhymes.”

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Apple takes top music retailer spot

As I predicted earlier in the year, Apple iTunes Store just took over the No 1 spot from WalMart in the Music sales. Meanwhile Amazon is nicely climbing up in the ladder. I expect Amazon to take the No. 3 spot not too far in the future.

Apple sold more albums in January and February than any other U.S. retailer, market research firm NPD Group said Thursday, underscoring how the music industry is on the front edge of a digital media shift that is upending businesses as diverse as bookstores and video game makers.

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