Some reads to start your Sunday:

• R. Glenn Hubbard: Romney’s Go-To Economist (NYT)
• Mutual fund casinos still skimming billions (MarketWatch)
• Rule #1. Surround yourself with people who are smarter than you and move out of their way (Explore)
• Surprise Jack Welch Missed Shows Better U.S. Growth (Bloomberg)
• A big shift in oil will bring price relief (Quartz)
• Law is going to be made’ in CalPERS’ challenge of Stockton – even if it leads to the Supreme Court (Financial Times)
• Inside the Obama Campaign’s Hard Drive (MoJo)
Josh Barro: The Final Word on Mitt Romney’s Tax Plan (Bloomberg)
• The Dangers of Allowing an Adversary Access to a Network (NYT)
• Privacy Is Tough to Find on Facebook (WSJ)

What’s up?

 

 J.P. Morgan and Wells Fargo: Housing on Mend

Source: WSJ

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.

13 Responses to “10 Sunday Reads”

  1. Orange14 says:

    I read the Hubbard piece yesterday and could hardly keep from getting nauseous. He really should move to the American Enterprise Institute where he can accept all the money he wants from his ‘scholarly’ writings.

  2. spooz says:

    Regarding Bloomberg’s Surprise Index (Welch) article, two of their important data points, existing home and auto sales, are benefiting from looser lending standards, the usual growth mechanism in our economy of late. The fact that the government is backing this new subprime lending doesn’t make it sustainable, imo.

    Also, regardless of how the BLS plays with numbers with mysterious adjustments and especially considering margin of error in the household survey, employment doesn’t look to be getting better and Bernanke’s QE3 is unlikely to change that. And the IMF and business executives do not have the same confidence as do consumers (at least according to the survey) about the economy.

    http://www.chicagotribune.com/business/yourmoney/ct-biz-1014-gail-20121014,0,3881461.column

  3. VennData says:

    That Bloomberg article that the economy is getting better is a croc of crap. Everybody knows Bloomberg and his New Yorkers can’t make socialism work… so they change the numbers.

    - Jack Welch

    P.S. ?

  4. ilsm says:

    @spooz,

    “….the usual growth mechanism in our economy of late. ” That is long as the arsonists run congress, keeping ‘debt’ more important than employment.

    Were Obama out of the way, debt wold no longer be the big issue, deficit spending for “winning the Ayatollahs’ hearts and minds” will give a paltry .6 mulitplier.

    If Romney, secret voodoo economics/more trinkle down, wins it will be a fine recovery for the 1% for the military industry congress complex with a jobless “prosperity” for the rest.

  5. hue says:

    ok, attorneys like Bubba and Obambi don’t know jack about business or economics so they relied on Rubinites. but Mittsy Bainer, the private equity guy, will be advised by L. Ron Hubbard to help create 12 million jobs?

    Since we choose our leaders like Survivor contestants, the next president should depend on Dr. Cal Lightman http://wapo.st/QlLLQO

  6. nofoulsontheplayground says:

    Tom McClellan – “40-Year Cycle in DJIA”

    http://www.mcoscillator.com/learning_center/weekly_chart/40-year_cycle_in_djia/

    Tom shows a chart with total real returns on the Dow, including dividends. When the 1942-1982 period is overlaid on the 1982 to present, we can see the market is almost replicating the prior period on a semi-log chart.

    Up next on the chart, 1973-1974.

  7. Bob is still unemployed   says:

    Banks err by confusing risk, uncertainty

    Complex prediction models may have blinded financial institutions to looming meltdown

    WASHINGTON — Major banks conduct an annual ritual of financial forecasting futility: Their complex risk models consistently flub predictions about the relative values of the dollar and the euro in the coming year, a new analysis finds.

    Annual forecasts of currency values from December 2001 to December 2010, which guided banks’ investment decisions, badly missed the mark nine out of 10 times, says psychologist Gerd Gigerenzer of the Max Planck Institute for Human Development in Berlin. Banks incorrectly foretold the fates of the dollar and the euro in the years leading up to, during and after the recent financial crisis.

    Gigerenzer described his findings October 4 at “Reckoning with the Risk of Catastrophe,” a meeting of German and U.S. scientists trying to devise ways to measure the probability of financial calamities, natural disasters and other catastrophes.

    It’s hard to predict currency values worse than the banks did,” Gigerenzer said. “Highly paid people produced worthless predictions.” …..

  8. RW says:

    Okay, a little weird, but I was browsing Aristotle’s (c. 334 BC) “Politics” and came across this in section 1295b:

    Now in all states there are three elements; one class is
    very rich, another very poor, and a third in a mean. It
    is admitted that moderation and the mean are best, and there-
    fore it will clearly be best to possess the gifts of fortune
    in moderation ; for in that condition of life men are most
    ready to listen to reason. But he who greatly excels in
    beauty, strength, birth or wealth, or on the other hand who
    is very poor, or very weak, or very much disgraced, finds it
    difficult to follow reason. …

    the one class cannot obey, and can only rule despotically; the
    other knows not how to command and must be led like
    slaves. Thus arises a city, not of freemen, but of masters
    and slaves, the one despising, the other envying and nothing
    can be more fatal to friendship and good fellowship than this:
    for good fellowship tends to friendship; when men are at enmity
    with one another, they would rather not even share the same path.

    But a city ought to be composed, as far as possible, of equals
    and similars ; and these are generally the middle classes.
    Wherefore the city which is composed I of middle-class citizens
    is necessarily best governed; they I are, as we say, the
    natural elements of a state.

    Since that was over 2300 years ago I suppose it could be considered outdated but human nature doesn’t change much and it reminded me that redistribution of the sort Keynes recommended is actually a requirement for making capitalism work over the long haul. As many such as Aristotle have argued over the centuries it is also a requirement for a stable society: The middle-class is just something “nice to have” and, if the natural propensity of humans to be selfish and short-sighted prevents if from strengthening then institutions must be present to counteract that propensity.

    What we have seen in the past few decades is the weakening and corruption of institutions in our own society and I have come to believe a host of social maladies, from growing political factionalism to unimpeded financial misfeasance and fraud, are in direct consequence.

  9. RW says:

    Ach, where’s the edit button, the middle-class is NOT just something “nice to have”

  10. ilsm says:

    Was Jefferson pre Keynes?

    “Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.” Jefferson to James Madison 28 Oct 1785

    More Jefferson: “We hold these truths to be self evident, that all men are created equal……..”

    For more than just opportunity!

  11. Greg0658 says:

    k.d. lang – Constant Craving (1993 Grammys)
    http://www.youtube.com/watch?v=dRUt8PyD2Dk
    ttp://www.cowboylyrics.com/tabs/lang-k-d/constant-craving-4515.html

  12. SecondLook says:

    RW (and ilsm),

    While having a predominately middle-class economic arrangement may be an ideal. It goes against what seems to be an organic cultural development, as first researched and analyzed by Vilfredo Pareto. That income and wealth follows a power law distribution. In short, that the distribution of both is typically 20/80, or at best 30/70. That is, 20-30% of the population – regardless of how advanced or not the economy is – controls 70-80% of the wealth.

    In the hundred plus years since Pareto first published his findings (Now called the Pareto Principle), no subsequent research has fundamentally found fault with his conclusions. It doesn’t matter whether it’s Holland or Honduras, the same pattern of distribution applies.

    Given that, the real question isn’t how defy that distribution, but in ensure that the top group takes responsible care of the vastly larger bottom. That the lower groups have a decent share of the benefits flowing from the nations’ wealth. Also, to enable reasonable mobility between the groups – one of the worse consequences is having a virtual hereditary elite. An aristocracy of wealth.

    Jefferson’s remarks deal, knowingly and directly to that. Without having the formal mathematical proofs and heavily researched evidence of Pareto, he saw the nature of society, and the need to deal fairly with the facts of life.

    By the way, without directly addressing the issue of inequality, Adam Smith also favored a system of taxation that would have the same affect: Exempting wages and earned profits from taxes, and taxing property and unearned income heavily. His logic was that taxing the former would be deleterious to growth, discouraging work and enterprise; while taxing the latter would encourage the movement of capital to engines of growth.

    In modern terms: I suspect that Smith would approve of buying shares in a IPO, and no taxes on the profits gained, but tax heavily buying current shares. The former helps a company raise capital to succeed, the later is simply passive gains, derived from whatever valuation part ownership of the company has.

    hmmm, that would be an interesting market – no taxes ever on IPO’s and secondary stock offerings, a high rate on current stocks. It would encourage one of the original functions of the stock market, to help companies raise capital, but inhibit the orderly transfer of part ownerships. Perhaps, for the purpose of taxation, the base price of a stock wouldn’t be the purchase price, but rather the current enterprise value of the company. Just a thought…

  13. VennData says:

    Analysis: Aid recipients welcome IMF’s shift on austerity
    http://www.reuters.com/article/2012/10/14/us-imf-aid-admission-idUSBRE89D0GQ20121014
    Will the superrich recipients of Bush’s ‘temporary’ ‘ tax cuts shift their position on GOP party platform austerity upon you?
    I guess ‘no.’