My Sunday morning lazing-about-the-house-ate-too-much-this-weekend reads:
• If Factor Returns Are Predictable, Why Is There an Investor Return Gap? (Research Affiliates)
• Metals prices are falling knives. Don’t make the mistake of catching them (Bloomberg)
• Myth: Stocks Are In Trouble When Commodities Tank (Ciovacco Capital)
• Why driving in the US is making a big comeback (Vox) see also 50 Years Ago, ‘Unsafe at Any Speed’ Shook the Auto World (NYT)
• Is It Too Late To Sink Your Teeth Into F.A.N.G. Stocks? (Dana Lyons)
• The DEA has failed to eradicate marijuana. Some members of Congress want it to stop trying (Washington Post)
• Trouble in the Checkout Line: Which Way to Pay? Holiday shoppers must figure out whether to dip or swipe, wave or tap as payment methods proliferate (WSJ) see also Black Friday looks like being the latest victim of the disruptive power of the internet (Telegraph)
• The Surprising Benefits Of Gratitude: Sure, you may know that you should be thankful, but did you know that a lack of gratitude could be hurting your health and career? (Fast Company)
• The Subsidy Gap: The $10 Billion Divide Between Elite Sports Programs And All The Rest (Huffington Post)
• Jeff Bezos vs. Elon Musk: A Thrilling, New Space Race (Bloomberg)
Managed Futures Growth in AUM 1980 – 2014
Source: Fund Reference
Category: Financial Press
In 1962 Hitchcock and Truffaut locked themselves away in Hollywood for a week to excavate the secrets behind the mise-en-scène in cinema. Based on the original recordings of this meeting—used to produce the mythical book Hitchcock/Truffaut—this film illustrates the greatest cinema lesson of all time and plummets us into the world of the creator of…Read More
Terrorist rings come and go throughout history, and Da’ish (ISIL) is the latest to spread horror and fear to a marred civilization. The research here (assembling thousands of data points from regional news and government sources) shows that terrorism is on the rise, squeezed in one location(s) at times but sooner or later spread out in others….Read More
Almost half of Germany’s energy currently comes from coal. By 2050, the country hopes to get 80 per cent of its energy from renewable sources. This expertly shot short film from National Geographic offers a vision of Germany’s energy transition, and perhaps, the future of energy worldwide.
This past week, our Masters in Business radio podcast, we speak with Ken Fisher, who manages $68 billion for Fisher Investments, author of 11 books and the longest running columnist for Forbes. Fisher describes building a firm from the ground up, having “no idea what he was doing.” Despite calling himself the Forrest Gump of finance, he talks…Read More
Kick back, pour yourself some strong joe, and settle in for our longer for weekend reads, straight from the meanest part of Chicago: • Even Michael Lewis Was Surprised Hollywood Bet on The Big Short (Vanity Fair) • Department of Defense Head Ashton Carter Enlists Silicon Valley to Transform the Military (Wired) • Bread Is Broken: Industrial production…Read More
Category: Financial Press
Succinct Summation of Week’s Events: Positives: 1) US Durable goods orders in October rose .5% m/o/m ex transports which was two tenths better than expected and September was revised up by a few tenths. Importantly, the core measure rose 1.3%, well better than the forecast of up .2% and September was revised from -.1% (revised…Read More
Until this year, Sphero had been a small tech startup making a very niche product: remote controlled, plastic, robot balls. When Disney announced that one of the most recognizable characters in the new “Star Wars” movie would be a cute little robot ball, Sphero suddenly became the center of the toy world. Bloomberg spoke to Sphero co-founder Adam Wilson about how the introduction of BB-8 dramatically changed his company.
What Happens When a Little Toy Company Meets ‘Star Wars’
I have one, its crazy cool and drives the dogs insane!
The City of Seattle’s minimum wage is now $11, going up to $15 for some employers by 2020. Mark Perry has posted his monthly missive on how April’s minimum wage hike is destroying restaurant employment there:
I’ve pointed out ad nauseam that this larger region is irrelevant to any discussion of the minimum wage debate. While the min wage has gone up in the City of Seattle, that may or may not have an impact on the entire — and many times larger — Seattle MSA.
The Seattle-Tacoma-Bellevue Metropolitan Statistical Area (MSA) that Perry likes to harp on is comprised of three counties – King (in which Seattle resides), Pierce, and Snohomish. The MSA has a population of some 3.6 million versus the city’s population of about 660,000. In other words, almost 3 million people, or about 72% of the total, reside (and likely work) outside the area are where the minimum wage was hiked.
To use this as the basis of a minimum wage critique is either incredibly ignorant or purposefully misleading. It does not reflect well on its authors. This inexcusable approach means that AEI has been party to what is an obviously false analysis. That is why amongst knowledgeable analysts, AEI are known as a “Stink Tank.” Everything they produce comes with the stank of its dubious validity and questionable intellectual honesty.
AEI seems to have finally figured out that obviously lying about data is going to get them called out as the fabricators they have unfortunately morphed into: The most recent post by Perry includes a disclaimer indirectly admitting this entire line of argument has been a scam. There has not been the sort of intellectual honesty where one admits error — no mea culpa like BR does — but instead a “Technical Note” at the end of the post essentially explaining why the entire post is utter nonsense. I assume AEI forced this on Perry in order to protect their already damaged reputation.
Technical Note: The BLS restaurant employment data for the Seattle MSA covers the entire metro area of 3.6 million people, while the population in the city of Seattle, which is the only part of the MSA that is subject to the eventual $15 an hour minimum wage, is only about 652,000. Therefore there are several possibilities when considering the loss of 900 restaurant jobs this year . . .
Even that is not a fair and honest disclaimer, as it posits a number of possible scenarios, rather than admit that the MSA is not relevant to the City of Seattle. We just don’t have sufficient data to draw a conclusion.
As I’ve said all along, there are simply no inferences to be made about the city from the MSA. But don’t take my word for it – here (again) is what regional economist Annaliese Vance-Sherman had to say about it:
It is not possible to draw conclusions about the city based on the MSA.
I think it is important to remember that the $15 minimum wage was a city-level ordinance. The City of Seattle falls within a large urban county (King County), which consists of 39 cities including Seattle. In turn, the county is one of three large urban counties that make up the Seattle MSA.
People from the City of Seattle are not going to drive two counties north or south, or cross the mountains, for a burger. If there is a border effect, it would be well within the MSA (well within the boundaries of the county, actually), and would register as a net zero change.
Without re-creating the chart, what could be showing up in this chart is that the recovery in Seattle has been stronger (and earlier) than the remainder of the state. The increased momentum in hiring could be representative of the relatively delayed recovery outside of the Seattle MSA.
For those who may (inexplicably) be new to this issue, here’s a map of the aforementioned tri-county area:
Sadly for Perry, who has married his original bad analysis and refuses to do any further investigating, there is more accurate data out there on employment in the state of Washington, compiled by the Employment Security Department of Washington State. At their site, we can explore and examine each of the counties on a stand alone basis.
My local not on a train morning reads, straight out of Chicago: • The single biggest way shoppers are manipulated by retailers (Business Insider) • Recognizing those who have improved our financial lives (Chicago Tribune) • Preparing For Lower Returns (Irrelevant Investor) see also Welcome to the Flat Stock Society (Bloomberg) • Google Will Help You Shop on Black…Read More
Category: Financial Press