Movies: Now You See Me

(Drivebycuriosity) - Magicians are masters of illusion & distraction. You never know what is real and what not. The movie "Now You See Me" (imdb) tells the story of a group of super-illusionists who pull off bank heists during their performance - or don´t they?

The team of script writers knitted a highly elaborated plot with a lot of twists and surprises. I had fun watching the hilarious events on the screen - especially because of the fine actors. Woody Harrelson had the strongest impression on me. As usual he showed a perplexing mixture of seriousness and goofiness. The fast speaking Jesse Eisenberg gives the illusionists a kind of scientific touch. His prosaic and analytical style makes the story almost believable. It is also amusing to watch Mark Ruffalo as a detective. His character reminded me a bit of "Columbo".

"Now You See Me" is a nice opportunity to escape the summerly heat and to forget the daily grind for some minutes.
  

New York City: Happy Midsummer

(Drivebycuriosity) - This morning exactly at 1.04 am U.S. Eastern time the Northern Hemisphere of the Earth reached its point of greatest inclination to the Sun (planetsave.com). This moment is called summer solstice. The 21st June also is the longest day of the year and the unofficially start of midsummer.

New Yorker City is less crowded as usual. Many New Yorkers spend the hot summer days on beaches and other places far from the now almost tropical metropolis. The rest enjoys the gained space on the boardwalks (less risk to bump into somebody) and a better chance to get tables  in restaurants & bars.

New Yorkers seem to enjoy the hot season. They spend their time outdoors and indulge walking the summerly streets, places and parks. Many restaurants, cafes and bars serve outside.

The city also got more sex appeal. Many girls on the streets or in the restaurants & bars are very summerly dressed - one of the joys of a hot summer day.

According to Wikipedia many cultures traditionally celebrate the summer solstice event in some way with holidays, festivals, and rituals around that time with themes of religion or fertility (wikipedia). Tomorrow Coney Island will have its traditional "Mermaid Parade" where the girls show a lot of skin (coneyisland.com). If you are  more in raucous rock music you could visit "Punk Island" which is celebrated on Staten Island also tomorrow (punkislandnyc.org).

Stock Market: From Weak To Strong

(Drivebycuriosity) - This morning the stock market is under pressure again. Stock prices are still responding negatively to yesterday´s Fed announcement that her stimulus program QE3 will run out through mid 2014 (tapering).

Stocks are now getting passed from weak hands on strong hands. Gamblers with a very short time horizon, including many hedge funds, are selling, investors with a longer time horizon are buying.

I reckon that the investors are right and that they will rewarded soon. Yesterday´s Fed decision signals more optimism. The U.S. economic upswing is now sustainable. Rising company profits, climbing retail sales and further healing job & home markets will fuel the economic growth in the coming months and induce more stock market gains. History also shows that stocks are the best investment on the long run  (ritholtz   ritholtz  fool.com). Soon the gloomy professionals, who are selling today, have to come back, otherwise they would miss the upcoming stock market gains (performance pressure).

Economy/Stock Market: QE3 - Welcome Tapering

(Drivebycuriosity) - Today the Dow Jones fell around 200 points, S&P 500 and Nasdaq each lost around 1.2%. The selling started point 2.15 pm U.S. Eastern Time as the U.S. Federal Reserve had announced her policy decision. According to the media Federal Reserve chairman Ben Bernanke said that the central bank may reduce the pace of bond buying (monthly $85 billion), known as QE3, later this year as economic risks subside (reuters marketwatch bloomberg). He also announced that this stimulus program could end around the middle of next year. According to the Financial Times this was the firmest timeline yet for the so-called tapering.

I reckon that today´s stock market drop was just a short lived response. It seems that hedge funds and other gamblers with a very short time horizon took some money from the table. They responded like junkies, but being an investor with a long time horizon I welcome the tapering announcement.

I believe that the rally will resume soon because the run is driven by rising company profits (thanks to efficiency gains) and a healing economy. The tapering announcement, which was very moderate, demonstrates that the Federal Reserve Bank is getting more optimistic. Rightly so, the economy is now driven by a sustainable upswing. The home market is coming back, weekly jobless claims are continuing their trend south and retail sales are growing with a solid pace.

Hence massive stimulating measures aren´t necessary anymore and could lead to an overheating in the future. The tapering should also keep the commodity speculation at bay which is running on cheap credits and speculations on a return of inflation as an alleged result of QE3.

Movies: The East

(Drivebycuriosity) - Terrorism has many faces. A lot of fanatics try to enforce their political, religious and other ideas with violence. The movie "The East" focuses on a group of fanatic environmentalists with a tendency to illegal methods (imdb). A young woman joins this group to spy on them at the behest of a private agency that works for wealthy clients.

The film was way less dramatic and scary than the trailer promised. The plot, written by director Zal Batmanglij  and Brit Marling, who also played the leading female role, was inconsequential and didn´t convince me. The title of the movie - "The East" - is symptomatic for the movie´s weakness. The term is a relative construct, the east varies depending if you live in San Francisco, in New York (East Coast), in Leibzig (East Germany), in Dubai (Near East) or in Shanghai (Far East). The east is not tangible, neither is the story of the flick.

It is an open question why they chose this title, the movie didn´t tell much about geography at all. But worse, it didn´t show whether those environmentalists were really eco-terrorists, a pseudo-religious cult or just a group of naughty hippies. Were they really dangerous or just spoiled kids?

According to Wikipedia the film was shot in just 26 days which could be an explanation for the immaturity of the story (wikipedia). Wikipeda also reports that  Batmanglij & Marling developed the idea for the movie in the year 2009, two years before producing it. In the time between the makers wrote and shot another movie together ("The Sound Of My Voice"). Marling also cowrote the movie "Another Earth" where she also had the leading role. It looks like makers lost the idea a bit out of sight thanks to all this multi-tasking.

But the movie was acceptable thanks to the cast. Brit Marling is still a fresh face even though the actor/writer is now part of Hollywood`s establishment. She proves that intellect and beauty go hand in hand. Alexander Skarsgård played a convincingly charismatic cult leader. They were supported by the ubiquitous Ellen Page and other fine actors.

 I found "The East" somewhat entertaining, but not worth remembering.

Oil 2013: The Mother Of All Bubbles

(Drivebycuriosity) - Last week we got news that the U.S. inventories for crude oil & gasoline grew again and are close to a record level (bespoke). But the oil price ignored the fundamental facts and continued its climbing tour.

Since April oil prices have been moving northwards, ignoring that U.S. inventories reached a record high, stock markets got volatile, interest rates jumped, the U.S. oil production is rising and the U.S. oil demand is shrinking. Instead the market has been focusing on the political news. According to Bloomberg and other sources the price of oil rose last week to a four-month high on Middle East tensions (bloomberg). The media claim that the civil war in Syria, massive demonstrations in Istanbul and the conflict with Iran (about their nuclear ambitions) could disrupt the global supply of oil.

This reminds me of the first half of the year 2008. Then the price of oil jumped to an all-time high of $147 even though the recession had already started. Before the year 2000 the oil price fluctuated around $40. Around the year 2003 a oil price rally had began and catapulted the energy price to a level of around $100 where it has been sticking since then (except a short lived selling panic in the second half of 2008) (wikipedia). Between the years 2003 and 2008 gas prices at U.S. pumps more than doubled and seem to be glued to $4 per gallon (gasprice).

What caused this apparently stubborn behavior? Oil is traded on financial markets like stocks and bonds. Many hedge funds and other speculators are buying oil futures, which represent the energy prices. For years they have been pumping many billions of dollars into the oil market in the hope of further price gains. Hence the oil price reflects expectations rather than the real supply and demand.

Since the early years of this century the oil prices have been agitated by continuous speculation about conflicts in or with Iran, Iraq, Libya, Syria, Egypt and other places in the unruly and politicaly fragile area that all could endanger the oil supply in the future. Many gamblers have been betting on a politically caused oil shortness and created a huge price bubble.

But, history shows that bubbles pop. That is their nature. There are already strong forces working against the oil bubble. The U.S. oil supply is rising fast thanks to new technologies like fracking and deep sea exploration (finance.yahoo). On the other side oil demand is shrinking in many nations because people drive less, use fuel-saving cars and other energy-efficient machines (demand destruction). They also switch to alternative energy sources like natural gas, wind & solar energy. Both trends lead to an over supply which carries a growing pressure onto the price of oil. 

Therefore the oil bubble needs more and more political fear mongering to stay alive. At some point the Near East scares won`t be strong enough to overpower the fundamental forces and the bubble will implode as any bubble does.

Economy/Urbanism: Welcome Back To The City

(Drivebycuriosity) - For decades people have been fleeing big cities and have moved to suburbs and the country side. But it seems that his trend has reversed recently.  A new study shows that the population of rural and small-town America contracted over the past two years (businessinsider). An analysis of US Census Bureau data by the Department of Agriculture also found that people in their 20s and 30s were migrating away from the rural areas and were moving to large cities (ers.usda.gov  businessinsider).

I believe that the return to the big city has at least 3 explanations:

1. Job markets are tougher these days than they have been in previous decades.  As I recently wrote, big cities like New York City offer more job opportunities than the country side and the suburbs (drivebycuriosity). Big cities also provide more and better possibilities for education (universities et.al.) which might be helpful for finding jobs.

2. Gasoline is much more expensive than in the last century. Before the year 2000 a gallon of gas cost below $2 at the pump, now drivers have to pay close to $4 (gasprice). People, who have to drive large distances for commuting to their workplaces, now have to pay a much larger part of their income for gas. Hence it makes sense to move to a dense city with short commuting distances and an affordable public transportion system such as in New York City.

3. It seems that big cities also benefit from another trend. Today people spend smaller parts of their income for cars, furniture and other expensive things and more for live events because they want to experience something. Big cities supply much more leisure facilities than the countryside like rock concerts, clubs, operas, theaters, museums. Big cities also offer more chances to meet other people and to acquire new friends - with much lower travel costs.


Welcome back to the big city!