My morning reads:

• How Boehner’s Plan B for the ‘fiscal cliff’ began and fell apart (The Washington Post)
• ICE Deal for N.Y.S.E. Creates Global Powerhouse (NYT) see also NYSE, ICE Deal About Everything but Stocks (The Street)
• Gen Y investors in the driver seat of ETF growth (Investment News)
• Hedge funds: Rich managers, poor clients (The Economist)
• For banks, nothing is illegal (The Physics of Finance)
• The Fed’s Century of Power Started With a Fateful Meeting (Echoes)
• Corporate Short-Termism in the Fiscal Cliff’s Shadow (Project Syndicate)
• Instagram Does an About-Face (Bits)
• Doctors Move to Webcams (WSJ)
• Daily Gun Slaughter in U.S. Obscured by Newtown Rampage (Bloomberg)

What are you reading?

 

Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt

Source: Bloomberg

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.

26 Responses to “10 Friday AM Reads”

  1. VennData says:

    I’m packin’. I turned my flag upside down. Watch out liberals.

    I will be DAMNED if I’m going to let other people tell me what to do in a democracy. It’s against the Constitution for liberals to make me do things and not do things.

    I will not have my taxes raised by Obama and the liberals. I don’t care if they aren’t raising them and actually cut them. That’s not how I feel about it.

    I will do ANYTHING to keep taxes rich on the elite in inhabitants of New York City and LA where most of those billionaires live. I love ‘em. I love Trump. I hate Kenya and Kenyans.

    Thank God for George W. Bush.

  2. RW says:

    There is no fiscal crisis. And macroeconomics is not a morality play. (ht BDL)

    Here are two numbers to know about the United States and Japan: 1.79 percent and 0.77 percent. Those are the yields on 10-year bonds in those two nations as of Thursday morning, the price their governments must pay to borrow money for a decade. In other words, investors are willing to fling their savings at those two seemingly dysfunctional governments for next to nothing…. Name a country with… a stable political system, a central bank to call its own, and a free flow of capital across its borders… and it has, right now, extraordinarily low interest rates…. [A]round the world there are all sorts of savers–pension funds, wealthy individuals in emerging nations, governments that want to ensure they have reserves put aside in case there were to be a run on their currency–for whom the goal is not so much to get a big yield on their savings, but rather to ensure that they will get their money back when they need it…. There are three points to draw from that.

    One is that as the United States looks to reduce budget deficits, it should do so on its own terms…. Second, if there are things we can do with the cheap money the world is flinging at us that would make the U.S. economy more competitive in the longer run, we should take advantage…. The third point… is… there is an unfortunate tendency to treat the size of budget deficits and the level of inflation or unemployment in moral terms. Surely when a nation sins through fiscal irresponsibility and tempts the devil inflation, it ought to receive the wrath of a vengeful god. But that’s not how it is. Macroeconomics is not a morality play…

    @VennData, dig your exploration of Poe’s Law.

  3. Bob is still unemployed   says:

    Apple likes to keep the walls high around the Apple Walled Garden. It appears that Apple is quite afraid of others trying to provide unique solutions to the problems Apple’s customers face, to the point of forcing the cancellation of a Kickstarter project.

    Edison Junior, the technology and design lab behind the POP portable power station, is returning the full $139,170 in funding it received from Kickstarter backers to develop the device. Unfortunately, Apple has refused to give the project permission to license the Lightning charger in a device that includes multiple charging options.

    POP was billed as “the intersection between charging and design” and featured connectors to charge iPads, iPhones, and yes … Android devices. Its four retractable cord reels would have powered anything using micro-USB charging connectors….

    He also said that, while Apple is a private company and can do whatever it wishes, it should watch out. “When you do things that are bad for the customer … I think it will be bad for them.”

    How much of this sort of ill-will is simmering in the background for Apple?

  4. VennData says:

    Regarding the ‘Economist’ article about the fact that simply, low-cost ETFs outperform hedge funds.

    1) No! I want those guys with carried interest tax breaks who can’t even beat the indices! They are stars!

    2) The stars! are the ones adding value and creating jobs, I don’t care what the facts are.

    3) I don’t care that Warren Buffet bet that indices would beat any ten hedge funds you want to pick, he is a far left liberal who wants to raise taxes on everybody, including his bitch of a secretary.

    4) My American flag is upside down. Distress!

  5. willid3 says:

    Implications of “I am not a member of an organized political party. I am a Republican.” (with apologies to Will Rogers)
    http://www.econbrowser.com/archives/2012/12/dragged_to_the.html

    and off to the cliff??
    http://www.washingtonpost.com/opinions/ruth-marcus-making-a-b-line-to-the-cliff/2012/12/20/15735646-4ae8-11e2-b709-667035ff9029_story.html

  6. CharlesII says:

    The markets really do not get it.

    Lunatics are in charge of the House. We face at least two years of fanatical opposition to modernity. The end of the Empire is staring us in the face, but we cannot even stop hundreds of billions of waste in the military or the medical insurance system or corporate welfare because, well, freedom.

    They are all very nice people, I am sure. Very few people who are elected to political office are not charming. Most are smarter than their constituents. But…good grief!

    What happened in the House yesterday was an embarrassment to anyone who loves the United States. We are in the hands of angry three-year olds, and we can only hope by the time they turn five they are wiser.

    And, with only the certainty that uncertainty persists until after Christmas, the markets bounce off their lows and head up. Go figure.

  7. willid3 says:

    another failure of the free market? seems we gave compounding pharmacies a bye on having much regulation. and that seems to have worked out really really well
    http://www.washingtonpost.com/opinions/rules-for-compounding-pharmacies-need-to-change/2012/12/20/77863788-4938-11e2-ad54-580638ede391_story.html

  8. VennData says:

    The NRA: Gun bans at schools create dangerous places.

    http://www.cnn.com/2012/12/21/us/connecticut-school-shooting/index.html

    The NRA must protect the right of people who want to own automatic weapons.

    I personally like hand grenades. I will NOT allow you to violate my right to own hand grenades. You will take my hand grenade only from my cold dead, ex-hand.

    LIBERAL COMMENTS HACKER: Doesn’t the “Gun bans at schools create dangerous places.” sound like the “tax cuts create more tax revenue” argument to you? Are you starting to see a pattern here?

  9. DSS10 says:

    Why I think the Washington Post is a total milquetoast organization and why Fox news should be seen as a PAC that owns a TV station. I’d love it if Fox would have to register as a political action committee and if Murdoch citizenship would be revoked due to his organizations criminal activities regarding wiretapping and bribery of police officers.

    “So now we have it: what appears to be hard, irrefutable evidence of Rupert Murdoch’s ultimate and most audacious attempt – thwarted, thankfully, by circumstance – to hijack America’s democratic institutions on a scale equal to his success in kidnapping and corrupting the essential democratic institutions of Great Britain through money, influence and wholesale abuse of the privileges of a free press

    Murdoch and Ailes have erected an incredibly influential media empire that has unrivaled power in British and American culture: rather than judiciously exercising that power or improving reportorial and journalistic standards with their huge resources, they have, more often than not, recklessly pursued an agenda of sensationalism, manufactured controversy, ideological messianism, and political influence-buying while masquerading as exemplars of a free and responsible press…”

    http://m.guardian.co.uk/commentisfree/2012/dec/20/bernstein-murdoch-ailes-petreaus-presidency

  10. DSS10 says:

    I remember when the NRA was a sporting organization and not a political committee that just happened to be involved with hunting and target shooting. As Louis CK would say Wayne LaPierre is a bag of ……

    http://www.bloomberg.com/news/2012-12-21/nra-calls-for-armed-guards-in-schools-to-prevent-killings.html

  11. willid3 says:

    those mythical mystical bond vigilantes?
    must be on a really long vacation almost 20 years and counting
    http://www.slate.com/blogs/moneybox/2012/12/20/bond_vigilantes_mythical_creatures_have_haunted_american_policymaking_since.html

  12. willid3 says:

    a new way to recreate the 2008 debacle? clearing houses?
    tax payer money at risk…again?
    http://www.bloomberg.com/news/2012-12-21/swaps-armageddon-lingers-as-new-rules-concentrate-risk.html

  13. beaufou says:

    DSS10 link,

    “The National Rifle Association called for stationing police officers in schools as the proper response to the Dec. 14 school shooting in Connecticut and blamed “blood-soaked films” and video games for the violence.”

    Films and video games are distributed Worldwide, high capacity magazines aren’t.

  14. VennData says:

    Newtown Shootings Could Have Been Stopped If There Weren’t so Many Women Around

    http://www.nationalreview.com/articles/335996/newtown-answers-nro-symposium#

    These are the same guys that tell us tax cuts will raise more revenue, right?

    How DARE you call them the anti-science party.

  15. DRR says:

    http://www.bloomberg.com/news/2012-12-20/fed-s-4-trillion-rescue-helps-hedge-fund-as-savers-hurt.html
    Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt

    This article convinces me that the supply side economics/trickle down philosophy of the last 2 decades is still paramount in the economic decisions of the current US leadership–protect and stimulate the wealth of the 1% so they create jobs for the rest of us.

    But the 1% have turned into hoarders and rentiers, not job creators….

  16. rd says:

    BTW – this is an example of the oil and gasoline that is apparently preferable to the “dirty” sources of oil being developed in North america, such as the Oil Sands. Apparently, this is considered acceptable as I have not seen massive protests against Nigerian oil recently.

    http://news.yahoo.com/burning-pipeline-fire-sign-nigerias-woes-093149858.html

  17. willid3 says:

    another take on the fiscal slope?
    http://www.latimes.com/news/opinion/commentary/la-oe-kelton-fiscal-cliff-economy-20121221,0,2129176.story

    History tells the tale. The federal government has achieved fiscal balance (even surpluses) in just seven periods since 1776, bringing in enough revenue to cover all of its spending during 1817-21, 1823-36, 1852-57, 1867-73, 1880-93, 1920-30 and 1998-2001. We have also experienced six depressions. They began in 1819, 1837, 1857, 1873, 1893 and 1929.

    Spending is the lifeblood of our economy. Without it, there would be no sales, and without sales, no profits and no reason for any private firm to produce anything for the marketplace. We tend to forget that one person’s spending becomes another person’s income. At its most basic level, macroeconomics teaches that spending creates income, income creates sales and sales create jobs.

  18. VennData says:

    Iran’s supreme leader joins Great Satan’s No. 1 social network

    http://news.cnet.com/8301-1023_3-57559632-93/irans-supreme-leader-joins-great-satans-no-1-social-network/

    I wonder if all his wives are friends with each other.

  19. SecondLook says:

    The one chart that everyone should see:

    http://www.csmonitor.com/Environment/Energy-Voices/2012/1219/The-one-chart-about-oil-s-future-everyone-should-see?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+feeds%2Fenvironment+%28Christian+Science+Monitor+|+Environment%29

    What Sweetnam’s chart tells us is that we must find and bring into production the equivalent of five new Saudi Arabias between now and 2030 in order to meet expected demand even if the volume of tight oil reaches its maximum projected output. (The Saudis currently produce about 11.7 mbpd of oil and other liquids.)

    (What some cornucopian pundits have been calling the boom in shale oil, is actually tight oil – light oil can be tricked out from stone formations. Shale oil, which really isn’t oil, is kerogen, solid organic compounds which can be transformed into oil; at a completely/b> unaffordable cost.)

    The reality is that one of those huge, almost incomprehensible, challenges to modern civilization is coming very shortly down the road.

    Speaking of reality checks. One of the popular memes put out is that we have a hundred years of natural gas. In fact, we have 92 years – how people love to round up – based on current demand and best estimate of total resources. However, that estimate is based on two assumptions: That cost won’t be factor, and neither technological limitations. That we’ll be willing to pay what it costs, and that somehow we’ll be able to do things like drill and produce from places where we don’t have a clue how to.
    Using reasonable costs, and reasonable current and future technology, that 92 years comes down to 50-60. Assuming the current rate of demand doesn’t grow. Apply a fairly modest increase in demand, and our supply life slumps down to about 30 years or so.

    Then, what do we do?

  20. rd says:

    On hedge funds:

    Things haven’t changed much since “Where are the Customers’ Yachts?” was published. This and “Extraordinary Popular Delusions and the Madness of Crowds” are two essential reference books for small investors.

    http://www.amazon.com/Where-Are-Customers-Yachts-Investment/dp/0471770892

    The explosion of hedge funds over the past decade does help the markets by providing more liquidity in some of the various nooks and crannies but I doubt if they help investors beyond that.

  21. Jack says:

    When will John Bogle be recognized as the visionary he is?