10 Thursday AM Reads
My early morning reads:
• QOTD: “Please move $165mm using rep code CHASEFIN” Fast, Furious at MF Global (WSJ)
• Gold down 5 percent, biggest one-day drop in 3 years (Reuters) see also Don’t blame the Depression on the gold standard – but don’t expect it back either (City AM)
• Todays WTF?! headline: Dow 13,000 now; 116,200 by 2046 (MarketWatch)
• Copper Confronts a Round Trip (WSJ)
• Charts of the Week: Market Rallying Because Of Fed Liquidity (Business Insider)
• Explainer: Why Do We Need a Volcker Rule? (The Nation) see also Tighter Rules Sought in Wake of MF Global Collapse (WSJ)
• British bank chief warns quantitative easing is ‘laying seeds for next crisis’ (Guardian) see also ECB Free Money May Carry a Cost (WSJ)
• Substantial Growth in Ads Is on the Way to Facebook (NYT)
• As Staff Flees, TechCrunch’s Traffic Plummets (Paid Content)
• TSA: Fail (GMan Case File)
What are you reading?
ECB Free Money May Carry a Cost $$
Source: WSJ
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March 1st, 2012 at 9:56 am
Since the Fed was created, we are effectively in our third 15-20 year long plateau of stock market prices. After each of these plateaus, the stock market went up about one order of magnitude in price over about 30 years. So, I think the prediction of Dow 116,200 in 2046 is very feasible. However, two-thirds of that increase will not be real as inflation will be going up as well.
Oh, and it will not go up in a straight line. The next 5 years are likely to be quite painful with various smooth upglides and periodic mini-crashes after that until 116,200 is reached.
I do love the precision of the 200 in the 116,200 in the estimate.
March 1st, 2012 at 10:14 am
We are reading Credit Suisse this morning. They’re calling for “synchronised QE” programs across G5 central banks by the end of this year:
http://www.dailycollateral.com/2012/03/01/credit-suisse-are-big-fans-what-to-do-when-we-get-synchronised-qe/
March 1st, 2012 at 11:41 am
One wonders just how objective any of this crew can be in view of the stakes . . .
“The 15-member I.S.D.A. committee behind the decision includes 10 banks that deal in derivatives and 5 asset management firms.”
Officials Rule No Payout on Greek Swaps
http://dealbook.nytimes.com/2012/03/01/officials-rule-no-payout-on-greek-swaps/?hp
March 1st, 2012 at 11:43 am
“Fast, Furious at MF Global” requires a WSJ subscription : ( Can’t find other links by googling.
Terrie
March 1st, 2012 at 12:06 pm
With virtually flat market in 2011, an eight percent rise so far in 2012 means it,s up 4% annually over the last two years. Peanuts.
March 1st, 2012 at 12:11 pm
andrew breitbart dead at 43:
http://news.yahoo.com/blogs/cutline/andrew-breitbart-died-los-angeles-144221781.html
March 1st, 2012 at 12:54 pm
Global warming is real.
http://www.nybooks.com/articles/archives/2012/mar/22/why-global-warming-skeptics-are-wrong/
My go to site when discussing global warming:
http://www.skepticalscience.com/
March 1st, 2012 at 1:26 pm
Thanks for the TSA post. Great piece.
I remember vividly when GWB caved and agreed to allow the new “government run” agency.
We groaned and knew then what was coming. This is no surprise. I hate flying now, and
dread going through security and being made to feel like a criminal in my own “free” country.
He is spot on.
March 1st, 2012 at 3:08 pm
Friedman and Keynes could agree on one thing for sure. What ever the connection between gold and money supply in the 30s, it was too constraining.
The CATO economist who cites golds allure being the “stability of the gold standard era” is obviously unaware of the numerous panics and bank runs of the “stable gold era”. The amplitude of the business cycle was much greater than during the “fiat money” era.
Fond remembrances of an era that never was.
March 1st, 2012 at 3:16 pm
The Big Fracking Bubble: The Scam Behind the Gas Boom
According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling.
When the wells don’t pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods.
“This is an industry that is caught in the grip of magical thinking,” Berman says
http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301#ixzz1ntk1fxva
March 2nd, 2012 at 8:23 am
The Raspberry Pi: reviving the lost art of children’s computer programming http://www.guardian.co.uk/commentisfree/2012/feb/29/rasperry-pi-childrens-programming
March 2nd, 2012 at 10:54 am
SOP: while fracking gone wrong is a problem, the bigger problem remains the mineral laws written by industry. As Goodell wrote it make no sense wrecking our nation to fulfill China’s energy needs. It doesn’t matter whether its coal, gas, or oil. The medieval rule of discovery is our nation’s non-policy for energy. Our nation and mineral producing states need a energy policy like that of Norway which never spends the principle, only the interest, and deliberately rations leases.
Presently our companies hold leases (10 year term) for generations mimicking minimal activity just enough to “hold the lease.” Presently these companies hold thousands of approved drilling permits (2 year term, extended another 2 years with a mere request). The rule of discovery makes shopping the K-Mart blue light special look organized as companies race mindlessly locking up resources before thinking whether they’ll use them, where the capital will come from, and how to use them.
One fix is terminating all leases not generating x million in royalties per unit of land when the leases term is up. No exceptions. Second, end extensions for APDs. These 2 measures will force the blue-haired companies chasing the flashing “blue light” of discover to actually plan. Third, stop the rule of discovery by barring companies from selecting (nominating) their own leases. Use instead the Norweign deliberate model telling companies which parcels will be available for lease so the superior title holder (we the people) gain certainty and long-term use from our non-renewable resources.