Bill Miller, Legg Mason Capital Management – The great bond
bear market has begun, starting with Treasuries, which should see years of
losses as interest rates begin to normalize. Equities, which outperformed bonds
in 2012, will continue to do well, driven by rising earnings, strong free cash
flow, solid profit margins, low inflation and attractive valuation relative to
bonds.
Bryon Wien, vice chairman Blackstone – Prospects in
Washington are gloomy, we cannot solve our problems simply by getting the rich
to pay more. We have to broaden the tax base, revise the tax code and deal with
entitlements. S & P 500 will decline 10 percent before ending the year
about where it is now.
Bill Gross, founder of investment firm Pimco – little risk
in bonds because the Federal Reserve is buying and there is no real risk until
the war is over at 6.5% unemployment which he believes is two-three years away.
Mr. Gross likes bonds from Italy and Spain, also Brazil. Brazil has much better
growth prospects with bonds yielding 8.5 percent.
Karl Case, an emeritus professor at Wellesley College, who
helped create the widely cited S & P Case-Shiller Index of housing prices.
He says a year ago was a terrific time to buy a house. A 20-city composite
index showed a 4.5 percent gain. Prices in hard-hit Phoenix have now gained 13
consecutive months. And even in Chicago and New York City where average prices
dropped in 2012, prices should be improving in 2013. California is gaining
strength but a long way from pre-recession process. California makes up
one-fourth of the housing value in the United States. Real Estate tends to move
in longer cycles, and Mr. Case is still saying now is a good time to buy.
REMEMBERING
HUELL HOWSER - "Folksy television host: Known for his
gee-whiz enthusiasm, he highlighted the familiar and the obscure all around the
state,: Huell Howser seemed an unlikely candidate to become a television star -
a big, grinning ex-Marine with a ... Tennessee drawl and an eye for stories
that others would pass by, such as the Bunny Museum in Pasadena and the
rendering of artwork out of dryer lint. ... Howser, 67, [was] an iconic figure
in public television ... A former local television news reporter, Howser struck
out on his own in the 1980s - producing 'Videolog,' a series of human interest
stories, for public television station KCET-TV. In 1990, he launched his
'California's Gold' series that aired on public TV stations throughout the
state."
DISNEY
EYES LAYOFFS - "Walt Disney Co. started an internal
cost-cutting review several weeks ago that may include layoffs at its studio
and other units, three people with knowledge of the effort told Reuters, in an
early sign that big companies may not be finished tightening their belts.
Disney ... is exploring cutbacks in jobs it no longer needs because of
improvements in technology, one of the people said. It is also looking at
redundant operations that could be eliminated following a string of major acquisitions.
...
"After years of repeated and sometimes severe cost
cutting in the wake of the financial crisis, by last summer it looked as though
Corporate America had trimmed all the fat and was back on the path of profits
through operating growth. But news Disney is weighing cuts - on the heels of
Eli Lilly and Co.'s warning last week that cost controls would drive earnings
this year - could herald yet another wave of retrenchment."
CLIMATE
BLINK: HOTTEST YEAR EVER - "Temperatures in the contiguous
United States last year were the hottest in more than a century of
record-keeping, shattering the mark set in 1998 by a wide margin. ... The
average temperature in 2012 was 55.3 degrees, one degree above the previous
record and 3.2 degrees higher than the 20th-century average, scientists at the
National Oceanic and Atmospheric Administration said. They described the data
as part of a longer-term trend of hotter, drier and potentially more extreme
weather. ... [T]he data provided further compelling evidence that human
activity - especially the burning of fossil fuels, which produces greenhouse
gases - is contributing to changes in the U.S. climate."
ECONOMIC
TREND: AMERICANS AGAIN ON THE MOVE - "Americans began striking out for greener
pastures at a pace not seen since before the recession crippled job prospects,
hobbled home sales and kept many stuck in place. About 3.9 percent of the
population, or 11.8 million people, moved to a different county in 2011, new
Census figures show. That was the highest level since before the recession, and
up from 3.5 percent in 2010 and 2009 - the lowest level since the government
began the tally in 1948. Movement between counties largely reflects people
moving because of jobs. ... Overall, the increase signals both a healthier
economy and future growth because it means more workers are being matched with
jobs that suit their skills. However, the 3.9 percent rate remains low
historically, fueling debate about the implications for the economy. The census
data don't indicate whether it rose again in 2012."
BIRTHDAYS
THIS WEEK – Birthday wishes and thoughts this week to: Edwin
“Buzz” Aldrin (83), Robert F. Kennedy Jr. (59), Steven Soderbergh (50), Mick
Taylor (65).
RICHARD
MILHOUS NIXON was born 100 years ago this past week in Yorba Linda,
Calif. -- "Bob Woodward believes now that the Watergate scandal was much
worse than he realized as a young Washington Post reporter ... 'Those tapes are
a tire iron wrapped around the Nixon legacy that no one's going to ever get
off,' he said in an interview. 'You listen to those tapes, and he literally is
using the presidency as an instrument of personal revenge and reward.' ... Many
of Nixon's marquee accomplishments would make today's Republican rank and file
apoplectic. He signed a bill creating the Environmental Protection Agency,
proposed universal health care and supported an Equal Rights Amendment to the
Constitution. He even imposed wage and price controls. ...
"Nixon died nearly two decades ago , at 81, but those
tapes he secretly recorded of his Oval Office conversations continue to trickle
out. Fresh batches have revealed disparaging comments about blacks, gays, Jews
and ethnic groups ... More are being processed. 'You've got a self-portrait by
him - he installed the tape system, he knew it was functioning,' said Woodward.
'It's the perfect irony that he thought he was so powerful that no one would
ever find out about the tapes or ever get them.' ... Gerald Ford would have
turned 100 this July, and he seems likely to get even less fanfare than Nixon
for his centenary. But the 50th anniversary of John Kennedy's assassination,
Nov. 22, will most likely spark a spike in Kennedy nostalgia."
HARD TO
BELIEVE FILE: CALIFORNIA BALANCES ITS BOOKS! - "After five
years of crippling deficits, Gov. Jerry Brown announced ... that the state is
in the black as he proposed a $97.7-billion budget that would increase funds
for education and health care while still leaving money on the table. The
governor's optimism followed an unanticipated leap in revenue that helped
cancel the $1.9-billion deficit estimated only months ago. ...
"And the state this year will begin to reap the
benefits of tax increases he championed last year. Brown would increase overall
spending by 5 percent, buoyed by forecasts of an improving economy and higher
tax receipts. His plan includes few of the spending cuts that have
characterized recent state budgets."
L.A.'S
RACE FOR MAYOR ... Greuel and Garcetti hope for support from
[Bill] Clinton or Obama,": "The two leading contenders for mayor -
City Controller Wendy Greuel and City Councilman Eric Garcetti - have each told
confidants they hope one of those marquee names will be in their corner. ...
Garcetti's connections to Obama could be trumped by the clout of some of
Greuel's most prominent, moneyed backers. Two of the founders of the DreamWorks
studio -- Steven Spielberg and Jeffrey Katzenberg -- ... have made clear that
Greuel, their onetime employee, is their choice for mayor. ... Bill Clinton
might be among those to remind analysts that presidential endorsements don't
necessarily carry the day. Just a few months into his first term in 1993, he
endorsed City Councilman Michael Woo for mayor of L.A. and even traveled to Van
Nuys to pitch for the candidate. Businessman Richard Riordan, a moderate
Republican, beat Woo soundly."
SIGN OF
THE TIMES: The number of NYSE market makers and traders working on
the floor has fallen from 3,000 in 2007 to 300 today, per today's N.Y. Post.
COLLEGE
FOOTBALL BOWL PICK OF THE WEEK – RR ended the season 13 – 7, not
a bad season. Congrats to the National Champions in all four NCAA football
divisions: Alabama Crimson Tide, North Dakota State Bisons, Valdosta State
Blazers, and Mount Union Purple Raiders.
COLLEGE
HOCKEY PICK OF THE WEEK – Friday January 18, 7:00 PM ET, TWCS; #15
ranked Cornell University Big Red (7-6-2) vs. #16 ranked Union College Dutchmen
(10-7-4). A big capital district game, we like Cornell to pull the upset over
The Dutchmen, Cornell 4 Union 1. (Season to date (3-0)
NFL
FOOTBALL PICK OF THE WEEK – Sunday January 19, 3:00 PM ET,
Fox; San Francisco 49ers (12-4-1) vs. Atlanta Falcons (14-3), the NFC
Championship game; the 49ers in a breeze over Atlanta, San Francisco 32 Atlanta
21. Season
to date (12-7)
THE
SWAMI’S TOP PICKS – 49ers 32 Falcons 21, New England Patriots 28
Baltimore Ravens 17, Cornell 4 Union 1. Season
to date (48-24)
DRIVING THE WEEK - With the $1 trillion coin idea (fun while it
lasted but never plausible) now formally off the table, we get back to
regularly scheduled programming of trying to figure out if and when the debt
ceiling will be raised. Still too soon for much serious movement off initial
hard line positions. Presumably the picture will become clearer after the House
GOP retreat late in the week, when members receive presentations on just how
devastating a default would be to a fragile U.S. economy. Such a default would,
in fact, make a prime GOP goal, reducing the debt, a great deal harder by
crushing economic growth and possibly sending borrowing rates higher should the
US lose some of its safe haven status. ... But GOP frustration at a lack of
cuts in the fiscal cliff deal is very understandable. Trick will be to slake
partisan thirst for big confrontation and dramatic results without tanking the
global economy.
Fed Chairman Ben Bernanke speaks today at 4 p.m. at the
University of Michigan on monetary policy and the U.S. economy ... Huge week
for bank earnings with Goldman Sachs, JPMorgan Chase and U.S. Bancorp on
Wednesday; Bank of America, BlackRock and Citigroup on Thursday; and Morgan
Stanley on Friday.
Next week; Office politics how to stop it.
Until Next Monday, Adios!
Claremont, CA
January 14, 2013
#III-39, 144
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