Dow Above 13,000 – Sign of a vibrant economy?

For the first time since May 2008, the Dow Jones Industrial Average has closed above 13,000, an important psychological and technical level.

What does this event say about the economy, if anything?

Simpletons might be inclined to identify the breaking of 13,000 as a sign that the US economy and the world’s economy are returning to vibrancy. Such an explanation is overly simplistic, ignoring the complexity and the myriad variables that lead markets to behave the way they do.

US stocks are being driven higher for two reasons:

1) Fear of exposure to European sovereign debt

and

2) Fear of exposure to European banks

Both of these drivers have led investors to seek safety in US Treasuries, which has driven down Treasury yields, causing many treasury investors to seek potentially higher returns in stocks due to the low returns offered by Treasuries. As a result, I believe it’s safe to say that the recent breaking of 13,000 is not caused by bullish sentiment on stocks, but rather is simply a consequence of insanely low-yielding debt, which has made stocks look like a bargain in comparison.

Investors are faced with heightened global uncertainty due to fears of low growth in the Eurozone and the United States, slowing growth in China, high energy prices, and the threat of inflation. The obvious play in this environment would be to buy gold, TIPS, and Treasuries and wait out the storm until it’s safe to wade back into the equity markets. However, there is little opportunity to make gains using said strategy because our relatively efficient markets have priced gold at stratospherically-high levels and have done the same to TIPS and Treasuries, some of which are currently sporting negative yields (including the 5, 7, and 10-year TIPS).

So what might an intelligent investor do to best position their portfolio with regard to risk and return?

1) Buy leveraged real estate funds, REITs, apartment home operators, and senior living operators

With the cost of financing going through the floor, healthy demand for apartments and rental housing, and low prices for single-family homes due to the poor health of the US housing market, real estate is cheap. Cheap asset prices and dirt cheap financing? Sign me up.

2) Buy energy services firms

Energy prices are high and will likely remain high, barring a global recession. Oil production in the Bakken shale and other areas in the heartland of North America is increasing quickly due to recent advances in horizontal drilling and fracking. Increased production will drive higher revenue and margins for energy services firms.

3) Go bargain hunting in Europe

European equities are cheap, and by spending some time prospecting through them, you might just discover some hidden gems.

Festival of New Spanish Cinema in Seattle presented by SIFF and Pragda

I was lucky enough to attend the opening night of the Festival of New Spanish Cinema in Seattle on Wednesday at SIFF Cinema, and ran into the star of the film we’d just watched, (With or Without Love), Angie Cepeda:

The film was light-hearted and funny, and full of surprises. I wouldn’t have normally chosen to see a film in this genre, but after seeing the film I’m quite glad I did.

Check out the remainder of the festival, which goes through Sunday:

festival of new spanish cinema
September 21–25, SIFF Cinema at McCaw Hall

The energy of Almódovar. The risk-taking of Amenabar. The unadulterated exhilaration of Buñuel. SIFF celebrates the return of the Festival of New Spanish Cinema, unveiling the next generation of Spanish film legends. Featuring first-time filmmakers and established masters alike, the very best in contemporary Spanish cinema comes to SIFF Cinema. Join us for award-winning comedies, romances and dramatic masterpieces, and the special unveiling of a horror classic.

Organized by Pragda and SIFF Cinema. Supported by the Embassy of Spain in Washington DC and Ministry of Culture of Spain-ICAA. Additional support comes from Consulate of Spain in Seattle and San Francisco, Instituto Cervantes Seattle, University of Washington, Iberia Airlines, American Airlines and Eurochannel. Wine courtesy of Martín Códax Albariño and Las Rocas Garnacha, our exclusive wine sponsor. Promotional consideration by 88.5 KPLU.

Series Pass Available!
All 10 films for $60 | $40 SIFF Members

Pet Shop Boys – West End Girls

I want this knit.

ACL found this Made in England knit by Garbstore while in Paris recently, and I cannot possibly desire anything more than I desire this knit:

Appearance and Respect

“Mr. Greenfield first grasped the importance of appearances while trying to survive the Holocaust. When he was 14, he and his father, mother, two sisters and a brother were taken from their home in Pavlova, in what was then Czechoslovakia, and later delivered to Auschwitz.

He was assigned to wash clothes in the camp’s alteration shop, and one day he accidentally ripped an SS officer’s shirt, an affront for which he was beaten. The officer threw the shirt at Mr. Greenfield, who mended it and started wearing it instead of the uniforms the other prisoners wore. From then on, he said, the guards and prisoners began treating him with respect.

“He looked like a somebody,” said Jay Greenfield, 52, Mr. Greenfield’s oldest son and the executive vice president of the company, Martin Greenfield Clothiers, explaining that his father attributes his survival to that shirt. The rest of Mr. Greenfield’s family perished in the camp, though he did not find that out immediately and spent two years after the war looking for them.”

A Tailor, Called Upon by Designers and Politicians – The New York Times

Wow. (Lacoste S/S 2011)

Simple, classic, elegant. Lacoste knows how I like my runway shows (all you avant-garde fashionistas be-damned!). Also, I’d like to make it known that I would marry this model in a heartbeat.

Photo by The Cobrasnake.

Leopard Sentries

Interesting outfits, guys.

Via Yvan Rodic.

Iceland’s Elections: May The ‘Best’ Party Win

No, this is not a satirical article drawn from The Onion:

REYKJAVIK, Iceland — A polar-bear display for the zoo. Free towels at public swimming pools. A “drug-free Parliament by 2020.” Iceland’s Best Party, founded in December by a comedian, Jón Gnarr, to satirize his country’s political system, ran a campaign that was one big joke. Or was it? In the depressed aftermath of the country’s financial collapse, the Best Party emerged in May as the biggest winner in Reykjavik’s elections, with 34.7 percent of the vote, and Gnarr — who also promised a classroom of kindergartners he would build a Disneyland at the airport — is the fourth mayor in four years of a city that is home to more than one-third of the island’s 320,000 people.

In his acceptance speech he tried to calm the fears of the other 65.3 percent.

“No one has to be afraid of the Best Party, because it is the best party. If it wasn’t, it would be called the Worst Party or the Bad Party. We would never work with a party like that,” he said.

His party won six of the City Council’s 15 seats, and Gnarr needed a coalition partner, but he ruled out any party whose members had not seen all five seasons of “The Wire.”

The Best Party’s members include a who’s who of Iceland’s punk-rock scene. The new government granted free admission to swimming pools for everyone younger than 18.

“Just because something is funny doesn’t mean it isn’t serious,” said Gnarr, whose foreign-relations experience includes a radio show in which he regularly crank-called the White House, the CIA, the FBI and police stations in the Bronx, N.Y., to see if they had found his wallet.

The polar-bear idea, for example, was not totally facetious. As a result of climate change, a few polar bears have swum to Iceland in recent years and been shot. Better, Gnarr said, to capture them and put them in the zoo.

The free towels? That evolved from an idea to attract more tourists by attaining spa status for the city’s public pools, which have seawater and sulfur baths. For accreditation under certain European Union rules, however, a spa has to offer free towels, so that became a campaign slogan.

Gnarr, born in Reykjavik as Jón Gunnar Kristinsson to a policeman and a kitchen worker, was not a model child. At 11, he decided school was useless to his future as a circus clown or pirate and refused to learn anymore. At 14, he was sent to a boarding school for troubled teenagers and stayed until he was 16, when he left school for good.

Last winter, he opened a Best Party website and started writing surreal “political” articles.

Party anthem

The campaign released a popular video set to Tina Turner’s “The Best,” in which Gnarr posed with a stuffed polar bear and petted a rock, while joining his supporters in singing about the Best Party.

“A lot of us are singers,” said Óttarr Proppé, the third-ranking member of the Best Party, who was with the cult rock band HAM and the punk band Rass.

Proppé now sits on the city’s executive board, where he will be deciding matters such as how much money to allocate for roads.

Fed-up Icelanders elect a comedian – Seattle Times

Skirt With Pockets

I love this look. Rarely do you see a skirt with pockets.

Via Facehunter.

Stunna Shades

Is is just me, or does this fish look like he’s wearing stunna shades?:

(click to enlarge)

Photo credit: Stefanos Kofopoulos/Titanas, Crete Aquarium.

I want to look like this guy.

Scott Schuman’s genius shows itself once more.

Coffee and the Enlightenment

Was coffee’s introduction into Europe responsible for fomenting the Enlightenment?

“…when coffee originally arrived as a phenomenon in the mid-1600s, it was not seducing a culture of perfect sobriety. It was replacing alcohol as the daytime drug of choice. The historian Tom Standage writes in his ingenious A History of the world in Six Glasses:

The impact of the introduction of coffee into Europe during the seventeenth century was particularly noticeable since the most common beverages of the time, even at breakfast, were weak “small beer” and wine….Those who drank coffee instead of alcohol began the day alert and stimulated, rather than relaxed and mildly inebriated, and the quality and quantity of their work improved….Western Europe began to emerge from an alcoholic haze that had lasted for centuries.”

Steven Johnson’s The Invention of Air, pages 59-60.

Yitta Schwartz: The most dangerous (dead) woman on the planet.

Yitta Schwartz died in January 2010, but she is perhaps the most dangerous woman on the planet. She is dangerous not because of her demeanor or her smile, but rather her unique set of values, and what those values drove her to do: she excessively over-bred, leaving 2,000+ descendants, and consequently quickened the destruction of the biosphere that we call home. Mrs. Schwartz’ individual actions affected us all–she took from all of us, and gave us nothing in return.

Yitta and her husband Yosef had 17 children over the years, living in Antwerp and finally settling in Williamsburg, Brooklyn. Those 17 children produced 170 grandchildren. Amazingly, Yitta could name all of them. Two more generations sprang forth from the loins of her grandchildren, and it is believed that she has at least 2,000 descendants, and perhaps 2,500, if they were to counted systematically. It is unlikely that Mrs. Schwartz knew of the outsized negative impact her progeny has had on the planet, and the commensurate setback in human sustainability.

Let’s not mince words; Mrs. Schwartz’ behavior is abhorrent. Her religion (Orthodox Judaism, or more specifically, Satmar Hasidic Judaism) gave her a belief that she should produce a brood as large as her body would allow. Her family planning behavior–that of having no control whatsoever over the number of her offspring–puts her squarely on the same level as wild animals.

The lack of strategy and planning that Mrs. Schwartz employed is an affront to the human intellect, and it also sets a dangerous precedent. Is it okay, in this day and age, to breed uncontrollably, to breed irresponsibly? If we were all to breed like rabbits (as Mrs. Schwartz certainly did), our species would be doomed to perpetually fight over dwindling resources, and our society would crumble. Law and order would vanish. All the work of our species, put in over thousands of years, toward the aim of building a more prosperous human condition, would be wasted.

If such a dystopian future is as detestable as I think it is, why then do we continue to allow humans to breed like wild animals? Why do we sign-off on the atrocious behavior of some solely becausee they subscribe to a particular brand of prehistoric beliefs? Is our desire to avoid offending religious and ideological groups responsible for putting society on a course toward its eventual ruin?

If our planet wasn’t overpopulated, then sure, overbreeding would be A-Okay, at least for a while. But in 2010, with a world population of 6.7 billion stretching the planet’s resources thin, excessive procreation hurts everyone. When anti-social behavior comes about, humans do the right thing–they ban and punish it. Perhaps it’s time that we ban excessive procreation.

God Said Multiply, and Did She Ever – NYTimes.com

Coffee Culture

“… the open circulation of ideas was practically the founding credo of [...] eighteenth-century coffeehouse culture [...]. With the university system languishing amid archaic conditions, and corporate R&D labs still on the distant horizon, the public space of the coffeehouse served as the central hub of innovation in British society. How much of the Enlightenment do we owe to coffee? Most of the epic developments in England between 1650 and 1800 that still warrant a mention in the history textbooks have a coffeehouse lurking at some crucial juncture in their story. The restoration of Charles II, Newton’s theory of gravity, the South Sea Bubble–they all came about, in part, because England had developed a taste for coffee, and a fondness for the kind of informal networking and shoptalk that the coffeehouse enabled. Lloyd’s of London was once just Edward Lloyd’s coffeehouse, until the shipowners and merchants started clustering there, and collectively invented the modern insurance company.”

Steven Johnson’s The Invention of Air, pages 57/58.

Florence and the Machine & Dizzee Rascal – You’ve Got The Love (Live)

A few days ago, I was chatting with a local music tastemaker, Arianna O’Dell, who was asking me for music recommendations. We got on the subject of British rapper Dizzee Rascal (who I’m hot or cold on, depending on the track). Anyways, right after I recommended a song to her, Dizzee came out and KILLED IT on the track with Florence and the Machine, live, at the 2010 Brit Awards!:

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LIVE MASHUPS ARE THE NEW-NEW THING!