Of multitudes and miscegenation

Miscegenation is a word Guambat's kids probably, hopefully, never heard. But young Guambat heard it often enough in his younger days, from radio talk shows through every-day conversations with church-going oldies and some fellow travelers.

In the times of the major so-called civil rights movement, which coincided with the times of Woodstock and Guambat's youth, there was much anticipation of breaking down the miscegenation generations amid a new age of Aquarius. Then came the seventies and eighties and on and on and it looked like the good fight would never get off the ground.

And then, finally and without the fanfare that would have been blown way back then, along comes Barak Obama, Tiger Woods and, more importantly, the millions of unkown Tigers and Baraks. One by one and without the drama of the sixties, the miscegenated divide is dissolving.

The New Minority-Majority

The US Census Bureau has found that communities across the United States are redefining the meaning of “visible minority".
According to the US Census Bureau, Hawaii, California, New Mexico, Texas and the District of Columbia have populations with minority-majorities. The concept of minority-majorities may be a syntactical oxy-moron, but it’s a reality for 21.2% of Americans who live in states where visible minorities make up more than 50% of the population. At first glance five out of fifty states with minority-majorities actually seems like a small number until you take into account that California and Texas represent the first and second most populous states in the union.

The idea of having an African-American presidential candidate and subsequently the first African-American president saw media institutions, schools and coffee shop conversations all a twitter about issues of race. CNN, MSNBC and FOX News gave daily reports on voter statistics based on race throughout the election, grouping the voting public into Black, White, Hispanic, Asian or “other”. 1.7 million Indian-Americans and 1.2 million Arab-Americans fit into the “other” classification.

In 2007 6.1 million Americans identified themselves as being a member of two or more races. This trend will continue well into the future as the American population becomes more racially and ethnically diverse, leading to new and more complex issues of race in America.

Young boost diversity as population ages

The population of the United States - and of California - is becoming older on average and also more racially and ethnically diverse. The number of people who identify as multiracial is also growing, and at a faster rate than any other racial or ethnic group.

Multiracial people become fastest-growing US group

And speaking of muddied multitudes, Study Finds Multitude of Bacteria on Human Skin

Scientists at the U.S. National Human Genome Research Institute have used the same techniques that enabled them to map the human genetic makeup to identify all the bacteria living on human skin.

There are lots of them, of all sorts. In scientific terms, 19 separate phyla and 205 different genera to be found on the 20 sites sampled by the researchers.

The diversity found as the investigators sequenced bacteria found in moist sites (inside the nose, the armpits, the navel), dry areas (such as the forearm) and oily sites (inside the ear, between the eyebrows, the back of the scalp) was a surprise

Even more unexpected was the similarity of the bacteria living in the same sites on different people. "We found that the site was more determining than the individual," Segre said. "In different people's armpits we found the same bacteria, while different parts of the body had very different bacteria."

Another reason to download GoogleEarth

Guambat just got back from a trip Down There and notes a couple of things that he's spotted whilst trying to catch up.

First, it appears the short sellers were not the real cause of the market's collapse, notwithstanding the crock-a-poo CEOs, at least if this anecdotal event suggests:

Finance stocks slump after ban ends

And it wasn't the CEOs fault, either; it was the pollies:

Short selling ban was 'politically motivated': trader

Second, and here's another good reason to download GoogleEarth:

Gulags, Nukes and a Water Slide: Citizen Spies Lift North Korea's Veil

North Korea Uncovered

Witless Carlyle Group was beneficiary of corrupt system

According to this story in the WaPo,

a Carlyle official who spoke on condition of anonymity because he was not authorized to discuss the matter publicly. [said] "We were the unwitting beneficiaries of a corrupt system.... The $20 million payment is effectively returning some of the economic benefit that unwittingly accrued to us."

What $20 million payment, you ask? According to the story,

The Carlyle Group, one of the world's largest private-equity firms, has agreed to pay $20 million and stop using politically connected operatives to land business with government pension systems around the country....

Go read it, and go figure.

A volatile look at volatility

Traders sifting the tea leaves for market direction inevitably look at some point to the sentiment indicators. In Guambat's experience, it's a last resort, desperate act, when all else fails to reconcile his market view with price reality.

Sentiment charts tend to look like inverse related mirror images of price action, but Guambat is not at all sure if this is more correlative than causative, when starting from the sentiment perspective. That is, does sentiment lead or follow price? Take a look at this S&P500 chart and the StockCharts.com VIX chart below it.





The VIX is the "classic" proxy for market sentiment, but what it really measures is a forward-looking indication of traders' pricing expectation of options, and the VIX charts these expectations.

In the S&P price chart above, there are Bollinger Bands, and these, too, are something like sentiment indicators in that they measure volatility, that is variations in price ranges over similar periods of time, but they are more backward-looking, calculated by standard deviations from a moving average, which is historical data.

Mark Hulbert, who is a divine diviner of market behavior, but no one gets it right all the time, looks at the current VIX, compares it to the relative price swings of recent times, and concludes the VIX is not expressing the truth about state of current perceived volatility.

That is, he is expecting a retreat from current price levels even though the VIX is "low" by recent standards (but certainly high by the standards of recent years). He suggests, to use the term generally assigned to low volatility numbers, the market is "complacent", which is a contrarian set up for a fall.

Thus, he reckons prices will react to sentiment, rather than the other way around.

But he explains it all so much better in his MarketWatch blog:

[The VIX] is not, strictly speaking, a measure of the stock market's past volatility. It instead reflects option traders' expectations of future volatility.

The two are related, to be sure, but nevertheless not the same.

Consider the number of sessions in which the stock market rises or falls by at least 1%, as it did on Thursday, when the Dow Jones Industrial Average fell by 102 points, or 1.2%. Over the last 63 trading days (a calendar quarter, in other words), there have been no fewer than 43 such sessions -- or more than two of every three days in which the stock market was open. The comparable number as of last Oct. 24, when the VIX hit its all-time high, was essentially the same -- 44 days.

So, at least from this perspective, recent volatility is just as high today as it was last October.

The data paint an even starker picture when we focus on daily percentage changes of at least 2%. There have been 21 such days over the last quarter, or one out of three days in which the market was open. The comparable number last October was 27, not that much higher than the current reading.

Looking at actual volatility, therefore, it is difficult to justify the VIX being barely a third as high today as it was last October.

Why is it nevertheless so much lower? Because options traders are less concerned about the stock market today than then -- far less.

And that, as I have argued in recent columns, is a bad sign from a contrarian point of view. It adds yet more evidence that the market's impressive rise since March 9 may nevertheless be a bear-market rally.

Guambat defers to Hulbert's more experienced and successful viewpoint, and dearly hopes he's right, as it would confirm Guambat's disposition du jour.

But Guambat is squeamish about putting his money on these particular tea leaves. He turns, nevertheless, to them in these desperate times.

Like Big Pharma running FDA

After the WSJ ran an article earlier this week on the apparently conflicted trades of NY Fed Chief Stephen Friedman, a former Goldman Sachs head, today Friedman resigned, admitting no such conflict or misdeed.

Felix Salmon, now blogging at Reuters, says this is a good thing.

Jim Cramer and a few of the panelists at CNBC's Fast Money this morning lauded the "public service" attitude of those at Goldman. The minority exceptions on the panel saw it as more of a Trojan horse than a public service.

Guambat agrees. If it is a good public service for Goldman connections to run the country's public financial institutions, why don't we expand on that an encourage
Big Pharma boys and girls to do sabbaticals at FDA, and failing auto execs to run the agencies which regulate auto safety and standards?

It's preposterous. Geithner ought to be challenged as well. Surely there are other applicants for such positions.

Guambat blogged over two years ago about Goldie as a world-wide political hedge fund. Today we see other such posts:

Sacks of gold
Is Goldman Sachs Controlling Washington?

Guambat does not believe in an absolute prohibition against Goldies in government, but reckons they should be put through the most rigorous form of scrutiny from selection to every decision made to make sure the effective beneficiary is not the Goldman empire. Goldman gift horses must be looked at in the mouth.

Headlines I'd right

A large number of Guambat's posts have been inspired simply by the desire to rewrite a headline on a news item he'd read.

For instance, these two below (we'll see if this turns up again as a repeating post theme):

OBAMA NOT A TWIT, instead of:

A President Goes Friending

President Obama will not twit, I have been authoritatively informed. Or should that be tweet? Unsure about the correct verb form for sending Twitter messages, I turned for guidance to my authoritative ....

GOOGLE GETS MY GOAT, instead of:

Bleat that: Google outsources goats to mow, fertilise lawns

Internet-Age innovator Google is taking advantage of an old-time principle. It has brought in about 200 of the grazers to munch fields around its campus in Mountain View. California is prone to fires and years of drought have ....

Privacy rights -- and wrongs

The debate over privacy matters has gotten up close and very personal at the US Supreme Court level.

There seem now to be new standards of privacy: matters that are illegal, matters that are offensive, matters that are irresponsible and matters that are unethical.

Clearly, this is unsatisfactorily unclear.

The latest tempest involves Justice Scalia, and is summarized in the ABA Journal/blog, "Law News Now":

Last year, when law professor Joel Reidenberg wanted to show his Fordham University class how readily private information is available on the Internet, he assigned a group project. It was collecting personal information from the Web about himself.

This year, after U.S. Supreme Court Justice Antonin Scalia made public comments that seemingly may have questioned the need for more protection of private information, Reidenberg assigned the same project. Except this time Scalia was the subject... And, as Scalia himself made clear in a statement to Above the Law, he isn't happy about the invasion of his privacy.

There are a least two other sources or contributions to the story, and reading the comments to all the blogs adds flesh to the story, if you're hungry for it.

Above the Law's inquiry to Justice Scalia elicited this terse dissent:

I stand by my remark at the Institute of American and Talmudic Law conference that it is silly to think that every single datum about my life is private. I was referring, of course, to whether every single datum about my life deserves privacy protection in law.

It is not a rare phenomenon that what is legal may also be quite irresponsible. That appears in the First Amendment context all the time. What can be said often should not be said. Prof. Reidenberg's exercise is an example of perfectly legal, abominably poor judgment. Since he was not teaching a course in judgment, I presume he felt no responsibility to display any.

Above the Law also points us to another blog, Concurring Opinions, that has been covering the events. There, law professor Dan Solove, recalled

One of the issues discussed at the conference (informally rather than at the public portion of the event) were the ethics of compiling the dossier and whether to inform Justice Scalia about it. In our informal discussion of the issue during the conference, we had a lively debate with a variety of views.

Some thought that it was poetic justice for Scalia, taking him up on his challenge that he wouldn't be bothered by such information compiling. If he didn't see it as a privacy problem, then there was no harm in doing it.

Others thought it since they viewed it as a privacy violation, it shouldn't matter what Scalia thought about it -- it was creepy nonetheless.

Some thought that Reidenberg should inform Scalia about it; others thought that this might make Scalia uncomfortable.

In the end, no consensus was reached.

Privacy, the new Supreme Court's pornography: Can't define it but I know it when I see it.
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2 diverse headlines

Study: Africans More Genetically Diverse Than Rest of World

Africans are more diverse genetically than the inhabitants of the rest of the world combined, according to a sweeping study....

Obama's election most diverse in U.S. history, study shows

Nearly one in four voters who participated in last November’s presidential election was nonwhite, making it the most racially and ethnically diverse election in U.S. history....

Diversity: the new homogeneity?