Welcome to the working week: Here are the 10 most intriguing things I happened across this morning:

The Mistakes We Make—and Why We Make Them (WSJ) How investors think often gets in the way of their investment success. While we know that we made investment mistakes, and vow not to repeat them, most people have only the vaguest sense of what those mistakes were, or, more important, why they made them. Only by understanding the answer to these questions can we begin to improve our financial future.

The Man Who Sells America’s I.O.U.’s (NYT) In a city full of pompous politicians and bombastic bureaucrats, Mr. Zeck quietly runs one of the government’s truly indispensable operations. He is not a policy maker. He does not decide how much to borrow. He just makes sure the money is borrowed, in a regular and predictable way, at the lowest possible cost to the government over time.

• A front page, Goldman Sachs, 2-fer:

-Goldman’s Trading Tips Reward Its Biggest Clients (WSJ)
-Arrest Over Software Illuminates Wall St. Secret (NYT)

China’s 2% Inflation Estimate Puzzles Economists as Prices Fall A Chinese government estimate that inflation may be 2 percent for 2009 is puzzling economists after prices fell for six of the past seven months.  The Ministry of Commerce made the estimate in a statement on its Web site yesterday, citing rising demand and gains in commodity prices.  (Bloomberg)

Five Financial Stocks Dominating Market Volume (Zero Hedge)

Gold bugs, rev your engines: Fed official: rates to be kept low past upturn (Reuters) Financial markets have not fully understood that the U.S. Federal Reserve’s pledge to keep interest rates exceptionally low for an extended period means they will stay low beyond when officials normally would raise them, a top Fed official said on Friday.  see also Bundesbank confirms Germany’s gold is in play (GATA)

Employment Change by Industry (visual economics)

• Apple Highest Grossing Retailer on Fifth Avenue as iPhone Defies Recession (Bloomberg) Apple’s Fifth Avenue emporium probably has annual sales of more than $350 million, topping any of the chain’s other outlets, said Jeffrey Roseman, executive vice president of real- estate broker Newmark Knight Frank Retail in New York. The location is 10,000 square feet, putting its sales per square foot at a minimum of $35,000, based on Roseman’s estimate.

• SENTIMENT ANALYSIS: Mining the Web for Feelings, Not Facts (NYT) An emerging field known as sentiment analysis is taking shape around one of the computer world’s unexplored frontiers: translating the vagaries of human emotion into hard data.

• Time’s 50 Best Websites 2009

Anything else worth reading this week ?

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

47 Responses to “Monday Linkfest”

  1. I count that as a very soft 10 . . .

  2. leftback says:

    This came out at midday as the market weakened, but who the hell knows why this market trades as it does?
    http://www.calculatedriskblog.com/2009/08/fitch-dramatic-decrease-in-cure-rates.html

  3. Cohen says:

    The Mistakes We Make article is interesting and highlights some common mental errors we make. Unfortunately it’s also full of bad investment advice.

  4. call me ahab says:

    apple, apple, apple- I am sick of hearing about apple- the iphone- nothing more than an electronic toy

    lb-

    as i have been saying to anyone who will listen- if you are underwater on your home and have a non-recourse mortgage-

    send your keys back to the bank and move- period. There is nothing the bank can do. Do not refinance- do not do 105′s or 125′s-

    let the bank take the loss

  5. VennData says:

    RE: “Goldman’s Trading Tips Reward Its Biggest Clients”

    …well, the blood sucked by the vampire squid had to go somewhere.

  6. Onlooker from Troy says:

    Barry

    LOL Cheater!

  7. Onlooker from Troy says:

    Yep, some folks are going to be saying “what was I thinking, buying stock when the S&P 500 was at 1035?”, before this is all over with. Valuations are insane, and it will matter in the long run.

  8. Vilgrad says:

    Excellent rant about the Fed by me posted today.

    http://theburningplatform.com/economy/the-federal-reserve-must-die-1

  9. Cohen says:

    @Onlooker

    Likely the buy and holders and dollar cost averagers

  10. Cohen says:

    I found this article interesting about the resurgence of lay-away programs.

    http://finance.yahoo.com/news/Consumer-strain-Pens-and-apf-1974175437.html?x=0

    The gist, though anecdotal, is that consumers do not want anymroe debt so spending is done with cash which means even small ticket items, like calculators are making their way to being on lay-away.

  11. Steve Barry says:

    Nouriel making good sense…I read this as “there is no free lunch”

    http://news.yahoo.com/s/nm/20090823/bs_nm/us_roubini_doubledip_recession_1

  12. constantnormal says:

    Wow … the ZH piece on 5 financial stocks dominating market volume puts a whole new perspective on “market breadth”. There really should be a market breadth statistic that only counts stocks that have more than 0.01% of total shares traded volume — or maybe more than 0.1%.

    Somebody read me that fairy tale about stable markets again, please … especially that part where the share prices climbed back to set new highs, and everybody lived happily ever after.

  13. Andy T says:

    So, was at a party and my friend, aka, “Brian the Broker” asked me my opinion of the market. I said:

    “Look, I’m convinced that this a bear market rally. It keeps going up, therefore it keeps going up, sucking in more and more $s before the next big fall. I can’t short it because it hasn’t shown me any real signs of peaking action. But, I believe we’ll break the March lows.”

    I’ve known this guy for awhile, and he knows my general views. He’ll usually get into at least a debate about things. But this time, he just looked at me with complete derision…he didn’t even comment. Just walked away…Now that’s a sign of sentiment: It’s not even within the realm of possibility in this guy’s mind that we’ll take out the lows.

    At least you should be willing to admit “anything is possible.”

  14. So I was washing some clothes today and I noticed there was a setting on the washer that said causal. I though about how cool that was. Causal clothing. Talk about items that ‘make things happen’. Very cool. I couldn’t find a setting for correlative though. Then I realized the setting was casual. That kind of ruined it for me

  15. Andy T says:

    “Gold bugs, rev your engines: Fed official: rates to be kept low past upturn”

    Yeah, that’s new information that Gold traders weren’t factoring in yet….

  16. constantnormal says:

    @Andy T 3:54 pm

    ” … new information that Gold traders weren’t factoring in yet ….”

    or dollar traders … seems like the dollar oughta be sliding steadily lower, as the only thing that’s gonna make money move to dollars is if it is scared out of the bond (and stock) markets.

    And you’ve already seen (courtesy of your friend Brian) that there’s no fear in the markets.

  17. leftback says:

    Barry, did you know that slicing and dicing of MBS and CDOs is back already???
    http://news.yahoo.com/s/ap/20090824/ap_on_bi_ge/us_meltdown_deja_vu;_ylt=AsRvx4pkYU6g8Kynx7msOFJRF78C;_ylu=X3oDMTJtYmw3NTlzBGFzc2V0A2FwLzIwMDkwODI0L3VzX21lbHRkb3duX2RlamFfdnUEY3BvcwM2BHBvcwM2BHNlYwN5bl90b3Bfc3RvcmllcwRzbGsDcmVtZW1iZXJtZXdh

    Andy, BRIAN is coining it right now – making big commissions as JOHNNY clamors for a piece of the action. The dollar having one of its better days of late today. Not totally convinced yet, but LB liked the way gold and oil turned around today once the rally in Treasuries got started.

  18. constantnormal says:

    @ The Common Man 3:54 pm

    Take more naps.

  19. batmando says:

    @Andy T at 3:48 pm
    re “Brian the Broker”
    similar experiences over the last year with a broker, member of my fellowship, strictly of the buy-and-hold paradigm for his clients; a crooked little smile accompanied by a wondering look verging on pity whenever I venture a less than sanguine outlook on this “market”

  20. call me ahab says:

    “Fed official: rates to be kept low past upturn”

    Andy- did you have any doubt?

  21. leftback says:

    batmando: It’s a form of mind control that BRIAN practices on everyone, including himself. He has to project at all times an appearance of utter certainty regarding the market’s upward and ever-accelerating trajectory.

    It is the sales mentality that you must always be seen to drink your own Kool-Aid. If it isn’t absolutely oozing out of your pores, then JOHNNY Retail won’t buy the wares. Also remember that BRIAN isn’t the sharpest tool in the shed so his ability to discern a debt deflation from an inventory-driven recession is zero. Which if you think about it is totally irrelevant to his job anyway, he is just there to offload the freshly lipsticked swine to the eager populace.

  22. clawback says:

    Re: Mistakes We Make

    I can’t count how many columns like this I’ve seen in the last few months — the wealth management industry must be having a real crapper with people wanting to hold cash and not wanting to get into stocks. Most financial advisors have been giving the same crap advice forever — and they’re still doing it. I have to say, the stupidest mistake I ever made was listening to my advisor in July of 2008 when he convinced my wife and me that WE were stupid in trying to time the market (i.e. wait 3 months before investing more). People can buy and hold if they want to, but if their advisor isn’t employing market-timing and risk management strategies, then they’re paying for nothing. Any boob can write a check every month to an index fund. It amazes me that the buy-and-hold crowd isn’t saying “sorry” or at least “oops, our bad.” Just like Bernanke, they won’t take credit for their own mistakes. I have no respect for that mentality.

  23. leftback says:

    Re: Mistakes We Make:

    It will be interesting to see how people behave after a second Red October™, and – perhaps more interestingly -during a second deleveraging event. LB is not sure that B&Hers would remain so calmly sedated this time if the market retrenches and they get the feeling that they are about to be fleeced again. Therein, perhaps, lie the psychological roots of Prechter’s BIG wave down, and the underpinning of the perception held by some that the March lows might be breached before this Bear market is over. LB is agnostic on this point because so much depends on the extent of subsequent intervention.

  24. constantnormal says:

    Some discussion, please, regarding exactly HOW the Fed will keep rates low for an extended period of time, long past when they would normally be raising them, and in an environment of unprecedented government spending.

    There are only a couple of ways I can see that this can happen. Either

    1) they print money out the wazoo, or

    2) they periodically “engineer” fire drills in the bond and stock markets, flushing money back into “safe and secure” Treasuries. This seems a bit counterproductive, however.

    Neither way seems to be being actively employed thus far. If anything, the Fed has slowed the rate at which they are printing money, by spreading the remainder of the Treasury support printing through October instead of printing it all by the end of September.

    I’m awfully curious as to what will happen in November. But even before then, I cannot imagine Treasuries not buckling under the weight of Congressional spending before then.

    Somebody please enlighten me as to the error in my thinking.

  25. Bruce in Tn says:

    http://features.csmonitor.com/politics/2009/08/24/next-democratic-senate-leader-to-get-booted-harry-reid/

    Next Democratic Senate leader to get booted: Harry Reid?

    ….OK…Barry edited this earlier in the day and removed it, but I am going to remake my point. I don’t care if Harry Reid runs on the Martian/Brett Favre ticket….the point I tried to make this morning before I was sent to pout in the corner was that WHOEVER is voting for a massive increase in government spending needs to be aware that taxpayers are not liking this. I don’t care if he is from the Bull Moose party, his voting public have cast an early “no” and this is likely to continue.

    OK, now you can remove it again…..but I will still be a fiscal conservative until they pry the internet from my cold…..well, you get the idea….

  26. mcHAPPY says:

    @constantnormal:

    You hit the nail on the head in #2 – deflate & reflate. Each time up banks win, each time down banks win. You know who loses right? Also every high is sure to be lower and every low is to be lower until the deleveraging is a) over or b) debt is manageable.

    Deleveraging is going to be a beeeotch.

  27. Cohen says:

    @constant

    The destruction of debt > government printing

    The Fed is fighting tooth and nail to engineer economic growth, I doubt they succeed.

  28. leftback says:

    “I cannot imagine Treasuries not buckling under the weight of Congressional spending before then.”

    If they were going to buckle, they would already have done so. Treasuries are where they are because the bond market knows that the equity market is on crack, and so increasingly are the commodities markets. Look, if they print and spend completely indiscriminately, the bond market would crater and rising rates would crush the pseudo-recovery, so that is out. Without additional printing/stimulus, the equity rally will eventually fail, resulting in a flight to safety trade. Hence, you have yields where they are today.

    Think Japan, JGB yields stayed low for ever, and toss the Myth of American Exceptionalism out of the window.

  29. clawback says:

    leftback,

    I agree re people’s reactions this fall: “I’m NOT going to make the same mistake again, I’m selling!” As I understand it, most retail folks DIDN’T sell in October — that’s why they’re still angry at their advisors. Anyhow, I think the same kind of thinking is keeping this rally going — retail isn’t selling yet, and the pros are riding the momentum. The “trigger” could simply be coming up against the pre-Lehman level in the indexes — how many people are just praying “to get back to where we were” and have promised to themselves that they’ll get out after that? I know several people like that.

  30. Steve Barry says:

    One measure of sentiment has now blown past 5 year highs…that means, by this measure (FWIW), traders are more bullish than at the top of the housing boom and at Dow 14,000. Amazing.

    http://www.investorsintelligence.com/x/free_chart.html?r=101#

  31. Tom K says:

    Another for ya:

    The Biochemistry of Financial Risk
    Testosterone’s influence on financial decisions

    http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/the_biochemistry_of_financial_risk

  32. call me ahab says:

    “American Exceptionalism’

    akin to the Loch Ness Monster and Bigfoot- you always hear about it but never actually see it-

    a myth- much like the American Dream- fantasy- as if there was a collective American Dream-unless it is personified by the greed and fraud- as demonstrated by those in power-

    i for one could not be more ready to shred the images and catch phrases associated w/ this country and start anew

  33. constantnormal says:

    @leftback 4:45 pm

    “… the bond market would crater and rising rates would crush the pseudo-recovery”

    It seems to be cracking a bit now.

    http://www.ft.com/cms/s/0/28aa86cc-8cef-11de-a540-00144feabdc0.html

  34. constantnormal says:

    Regarding the “Employment change by industry” chart. Why is there no industry shown that is less impacted by unemployment issues than the financial industry?

    Some other observations — it is easy to see why the web is whomping the print media, the print folks pay themselves to much, especially if they intend to compete with someone whose publication costs are a tiny fraction of theirs.

    And look at the huge bar for manufacturing jobs lost — I thought we didn’t manufacture in this country anymore?

  35. call me ahab says:

    sb-

    and the bullishness comes from where? that’s what i don’t understand-

    like Dow 14,000- that was just beyond comprehension- with all the storm clouds on the horizon- safety should have been first- especially if responsible for the savings and investments of others- but no- stupidity ruled-

    just as now- there is zero reason to a bull- safety should be paramount

  36. Bruce in Tn says:

    http://finance.yahoo.com/news/Consumer-strain-Pens-and-apf-1974175437.html?x=0&sec=topStories&pos=4&asset=&ccode=

    NEW YORK (AP) — To gauge consumers’ strain, look no further than the rows and rows of plastic bags awaiting layaway payments at Kmart. They are filled with back-to-school basics — not just T-shirts and jeans but notebooks, magic markers and pencils.It is unheard of for layaway rooms to be so packed at back-to-school time and for the packages to include relatively cheap school supplies.

    A record number of shoppers, shut off from credit and short on cash, are relying on Kmart’s layaway program to pay for all of their kids’ school needs, said Tom Aiello, a spokesman for Kmart’s parent Sears Holdings Corp. Layaway allows shoppers to pay over time, interest- free, and pick up their merchandise when it’s paid in full.

  37. Bruce in Tn says:

    http://www.ft.com/cms/s/0/9b8cc53e-90db-11de-bc99-00144feabdc0.html?ftcamp=rss

    White House set for backlash on national debt

    “The Obama administration is bracing for a political backlash on Tuesday when it issues national debt numbers showing federal debt rising by $9,000bn over the next decade – significantly higher than the forecast it made earlier this year.

    The revision, which will add $2,000bn (€1,400bn, £1,200bn) to the White House’s initial projection made in February, comes amid growing public jitters about the scale of US nat­ional debt, with one recent opinion poll showing Americans giving higher priority to reducing deficits than to reviving the economy.”

    …..OK, Leftback….Joe 6 pack may be smarter than either you or me (I know for sure about you, I still have my doubts about Me..)…”Americans giving higher priority to reducing deficits than to reviving the economy…!

    Hallelujah! and pass the biscuits….

  38. gregh says:

    in case you still don’t believe the market/rally is a speculative pos that ignores fundamentals –

    http://www.businessinsider.com/chart-of-the-day-xxx-2009-8

  39. Pat G. says:

    I’m not a gold bug just anti the USD due to the incompetence of the FED and the corruption of politicians by special interest groups/lobbyists. Anybody with half a brain realizes that the FED is not going to hike up rates until after next year’s elections. Their attempt is to create inflation and they’re going to get it as well as us. I hear on here all the time, “Don’t fight the FED”, so why are there still so many non-believers? When the FED starts paying interest on that $1T in excess bank reserves in order to entice them into not lending it out, I for one would like to know the rate. Mom & Dad are getting a great big .25% currently on their savings accounts. Bet the banks will get more, a lot more. And who pays for that? Oh yeah, we do! Let me reiterate; this is not going to end well. Especially, for those holding just about anything which is denominated in the USD.

  40. Thor says:

    President Obama to Reappoint Ben Bernanke as Chairman of the U.S. Federal Reserve -

    Can’t wait to see what you all have to say about that

  41. jeff in indy says:

    you mean they weren’t day-trading treasuries already?

    http://www.cnbc.com/id/32538039

  42. bergsten says:

    “Mistakes We Make” — the first and biggest one (and the one from which all the rest follow) is thinking of any money placed into the public markets as an “investment.”

  43. President Obama to Reappoint Ben Bernanke as Chairman of the U.S. Federal Reserve - :roll:

    Looks like we get a 400 point rally tomorrow

    I’m almost beginning to believe that the Emperors (CB heads) leave when they choose to and they tell that to whichever servant is in the White House at the time

    On the positive side, it looks like we have another dead judge on our hands…..oh wait, that is next decade when they make decisions like this:

    Federal Reserve loses suit demanding transparency

  44. BTS says:

    What do you say to Behind The Spread Barry

    http://www.behindthespread.com