Pretty Girls from Occupy Wall Street

Hot Chicks of Occupy Wall Street from Steven Greenstreet on Vimeo.

A lot of fantastic media has been created about the "Occupy" movement. I was watching one video in particular and commented to a friend, "Wow, seeing all those super smart hot chicks at the protest makes me want to be there." He replied, "Hmmm... Yeah, let's go with that."
We instantly went to Tumblr and made hotchicksofoccupywallstreet.tumblr.com. Our original ideas were admittedly sophomoric: Pics of hot chicks being all protesty, videos of hot chicks beating drums in slow-mo, etc. But when we arrived at Zuccotti Park in New York City, it evolved into something more.

There was a vibrant energy in the air, a warmth of community and family, and the voices we heard were so hopeful and passionate. Pretty faces were making signs, giving speeches, organizing crowds, handing out food, singing, dancing, debating, hugging and marching.

It made me want to pack my bags and pitch a tent on Wall Street. And it's in the light that we created this video.

And we hope it makes you want to be there too.
EDIT: Apparently a lot of controversy has erupted online from people passionately opining (among many things) that this is sexist, offensive, and dangerously objectifies women. It was not my intent to do that and I think the spirit of the video, and the voices within, are honorable and inspiring.

However, if you disagree with me, I encourage you to use that as an excuse to create constructive discussions about the issues you have. Because, to be honest, any excuse is a good excuse to bring up the topic of women’s rights.

CAMERA: Two Canon 7Ds.
LENS: 17-55mm, 70-200mm, 18-135mm
AUDIO: Rode Video Mic Pro
Shot in 60 fps
Music: Theme from "Fast, Cheap and Out of Control" by Caleb Sampson

Bank of America climbs on plan to sell China stake

SAN FRANCISCO (MarketWatch) — Bank of America said Monday it plans to sell 13.1 billion shares of China Construction Bank in another move to bolster capital on its balance sheet, an issue that’s been dogging the nation’s largest bank this summer.

The deal, slated to close in the third quarter, is expected to raise $8.3 billion in cash. Bank of America BAC +5.03%  will retain a 5% stake in the Chinese bank CICHY +2.20%  after the transaction.

“This sale of approximately half of our shares of CCB stock is expected to generate about $3.5 billion in additional Tier 1 common capital and reduce our risk-weighted assets by $7.3 billion under Basel I,” said Chief Financial Officer Bruce Thompson in a statement.

Bank of America shares surged 5% to $8.13 in mid-morning trades Monday, making it the top gainer among major U.S. bank stocks.

Click to Play

Markets Rally after Hurricane Irene

There are thin trading volumes due to late summer vacations and people staying after hurricane Irene, but the markets opened with a rally. Steven Russolillo and Michael Casey explain the market moods on Markets Hub. (Photo: Reuters.)

Better yet, the Chinese bank stock sale, which many investors had figured would eventually happen, follows on the $5 billion investment Bank of America got from Warren Buffett’s Berkshire Hathaway BRK.A +3.00%   BRK.B +3.02%  on Thursday. Read about Buffett’s $5 billion investment in Bank of America.

This is calming jittery investors who had been selling Bank of America’s stock in droves from the end of July through mid-August. Shares of the Dow component have jumped more than 35% since Tuesday, when they hit a 52-week low of $6.01.

The three other financial stocks on the Dow Jones Industrial Average — J.P. Morgan Chase JPM +2.73% , American Express Co. AXP +0.39%  , and Travelers Inc. TRV +4.85%  — all traded higher.

On Monday morning, the financial sector was the top industry gainer on the S&P 500 SPX +2.09% . The Financial Select SPDR ETF XLF +3.21% , which tracks financial companies on the S&P, advanced 2.9% to $13.14. The KBW Bank Index BKX +3.17%  , which consists of the nation’s 24 leading banks, moved up 2.9%.

Citigroup Inc. C +3.85%  rose nearly 4%, Goldman Sachs Group Inc. GS +2.93%  gained 2.9%, and Wells Fargo WFC +2.56%  rose 2%.

Post-Irene insurer shares surge

After Hurricane Irene passed over the East Coast with less damage than anticipated, insurers turned out to be one of the strongest subsectors on the S&P 500. Hartford Financial Services Group Inc. HIG +10.44%  led the charge with shares up more than 9%.

Shares of Allstate Corp. ALL +6.08%  , XL Group PLC XL +6.59%  , Lincoln National Corp. LNC +6.53%  , Genworth Financial Inc. GNW +6.14%   and MetLife Inc. MET +5.59%   all traded 5% or higher.

BRIC Recession: Less Than 2% From Joining The Rest Of The World In A Fresh Bear Market

The week is finally over, and the numbers are in: after narrowly avoiding the "bear market" two weeks ago when we dipped by 19.63%, or about two ticks away from the dreaded 20% correction, the subsequent dead cat bounce fabricated in no small part courtesy of Europe's unprecedented intervention in all markets, both bond and stock, has ended, and we are back to being under 2% away from reentering a Bear Market (and closing at the Lows of the Day). That however will not be the end of the world: as the chart below shows America will actually be the last major market to enter join the Bear party, so little shame there. As the second chart from Rosenberg today shows all the developed countries plus all the BRICs are already there. We expect an ongoing selloff into the last week of August (no need to remind what happens then), at which point the market may get a surprise or two. In the meantime, we depart with Rosie's words: "the US economy is slipping into recession, Europe is as well, and HP served up a reminder that this earnings season has not been the slam-dunk positive reporting period posted in the prior eight quarters. But disciplined investors who took our advice should not be feeling much pain at all." Who laughs last again?

Global bear market:

Charting The Upcoming Recession, And Is Goldman Really Predicting A 2012 Year End S&P Range Of 700 - 900?

In his weekly chart packet, Goldman's high frequency strategist, David Kostin, who now changes his year end S&P targets almost as frequently as the firm's economic team changes its GDP forecast, once again gets decidedly fatalistic (very much like Citigroup did yesterday, and Morgan Stanley last week), and is now openly contemplating downside cases to his EPS forecast. And with 2012 EPS numbers thrown around like $91 based on what is certainly an upcoming (but for now still hypothetical) margin contraction, $82 based on a 2% drop (almost guaranteed) in GDP Y/Y, and $75 based on historical earnings plunges in a recession, it may be time to listen up, because apply a traditional contractionary multiple of about 9-10x, and you have yourself a tidy little range of 700 - 910 on the S&P in about a year, absent yet another round of fiscal and/or monetary stimulus.
Kostin on the sensitivity between GDP and EPS:

Every 50 bp shift in 2012 GDP growth rate translates into about $2 per share in 2012 EPS. For example, if the US economy stalls and registers no growth in 2012, then our EPS forecast would equal $94, about $8 below our current estimate and 2% below 2011. If US GDP contracts by 2% on a year/year basis then 2012 EPS would fall to $82 reflecting a 14% decline from 2011.

Many investors are surprised that the EPS sensitivity to GDP growth is not more sizeable. One explanation is that a meaningful portion of aggregate earnings is only modestly linked to GDP growth. Utilities, Telecom Services, Consumer Staples and Health Care will account for nearly 30% of 2012 EPS. We recognize that federal and state government austerity next year will likely have a negative impact on earnings for certain sub-sectors of Health Care. Information Technology, Energy, and Materials generate a large portion of their sales outside the US, in some cases more than 50%, and pricing for commodities reflects global supply and demand. These sectors account for 36% of our 2012 S&P 500 EPS.

For future gloating's sake, where is where Wall Street currently sees 2012 GDP:

One thing we can guarantee: the consensus will not be reality 16 months from now.
How about the predictive ability of margin contraction?

Every 50 bp swing in margins equates to $5 per share in S&P 500 EPS (assuming sales growth and Financials and Utilities EPS estimates are unchanged). If margins fall by 140 bp from current 8.9% then S&P 500 EPS would fall to $91, $11 or 11% below our existing 2012 EPS forecast of $102.

Note the assumptions which will never be realized if the bottom falls out.
But the bigggest bear argument is not based on predicting the future (never Goldman's strong suit, unless the firm is actually defining it courtesy of its DC based tentacles), but based on the past:

Six profit cycles since 1974 show peak-to-trough declines in S&P 500 EPS averaged 22%. Most downturns ranged from 10% to 22% although the 2009 drop hit 58% led by a 157% collapse in Financials EPS. Sector level average peak-to-trough declines ranged from 8% growth (Consumer Staples) to 56% decline (Financials). If next year S&P 500 experiences a profit cycle decline similar in magnitude to prior contractions then earnings would fall by 22% to roughly $75 in 2012. Prior downturns typically occurred over 18 months.

End result: $75 EPS x 10 Multiple = 750 for the S&P.
That distant runging noise is every Wall Street CEO calling Ben Bernanke at the same time.