My afternoon reads:

• 10 Secrets About Wall Street’s New Top Cop (The Fiscal Times) see also Obama sends tough prosecutor to police Wall Street (MarketWatch)
• Irrational Pessimism Eats Away at Apple Stock (The Fiscal Times)
• Buffett pulls ahead in wager against hedge funds (Fortune)
• The looming currency war (Reuters) see also Japan spurs talk of currency war (CNNMoney)
• Microsoft Holds More Than Meets the Eye (WSJ)
• Debt-to-GDP and Misdiagnosing a Bubble Economy’s Ills (Iacono Research)
• How Fed Learned to Stop Worrying and Love Zero (Bloomberg) see also Economists Give Abenomics Early Thumbs Up (Japan Realtime)
• Tax-Boost Bark Is Worse Than Bite (WSJ)
• Will you leave your job to join the sharing economy? (Venture Beat)
• Aetna CEO: We Use Google to Track Flu Outbreaks (PC Mag)

What are you reading?


The Most Important Graph on the Deficit

Source: Next New Deal

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 Thursday PM Reads”

  1. slowkarma says:

    Thanks for the link to the Iacono article. The whole business of projecting an economic recovery on our getting “back to normalcy” has always seemed weird to me, when we can’t even define normalcy. The 70s didn’t seem normal, with all the stagflation; the 80s inflation fight didn’t seem normal, with 10 and 12 percent mortgages (and fed bonds); the 90s boom certainly didn’t seem normal, with a smart friend of mine telling me that he thought he could pretty much count on 15% annual returns on stocks; and were the 2000′s normal?

    I know it’s not generally considered good to use pure anecdotal evidence to predict economic trends, but Fidelity’s Peter Lynch many times suggested keeping your eyes open for businesses that really seemed to rock — just reports from your friends and neighbors about looking for the new Gap or Starbucks or whatever. I try to do that, try to spot trends, and one trend that I’m beginning to feel is that boomers now seem to me to be getting rid of stuff. It’s all anecdotal, but affluent boomer friends of mine seem to simply be tired of piling up stuff. I know a number of people who’ve sold summer cabins — not because they needed the money, but because the whole thing of having a cabin, paying the taxes, doing the maintenance, getting the boat out and putting it away, is just a pain in the ass. Instead, they pay essentially for low-cost services: go to Vegas or Palm Springs for a couple of weeks or a month in the winter. No fuss, no muss, no pain in the ass. The real estate market where I have my cabin is worse than flat — it’s been trending down since before the Great Recession. I see the same thing just on a house-by-house basis: not a lot of people buying the newest biggest flat screen, or paying huge bucks for the most prestigious possible kitchen…they could afford it, just don’t seem to need it anymore, and getting it is a pain in the ass.

    I don’t know if this anecdotal observation has an validity, and I don’t even know how you find out, but if boomers as a group are tired of buying stuff — they just don’t *want* it any longer, if they’ve discovered that the bigger house, more cars, in-home gyms, etc., new clothes every month are just a pain in the ass — then the whole demand cycle could be in deep shit.

  2. danm says:

    slowkarma :

    All I have to do is look at my parents (67) and in-laws (70) to know what is coming.

    In the top 10%, yet not much room for folly… in their minds anyway…. rates are too low and government will probably screw them somehow. No DBs, only personal savings. The wives stayed home for a bit so the government pension is nil for one and ok for the other.

    Both downsized… they are now trying to dump their junk on us and think we are spoiled brats for not accepting it. One sold the cottage because the wife got sick of maintaining 2 houses. Both moved to the exurbs for nature but booboos are starting to make them want to be closer to healthcare. Not many trips… 500$ in health insurance costs to stay in Florida for 4-6 weeks is 1 reason.

    From 2 cars to 1 car. Lots of surfing and arts and crafts… however arthritis can take its toll on the fingers.

    If that’s the top 10%, imagine the rest!!!

  3. danm says:

    I went to get my car fixed early one morning. Popped into a quiet diner for coffee with a good book. By 8am it was jam packed with retirees… in an area full of civil servants with good pensions.

    They still need to socialize but prefer breakfast/brunch to dinner because it’s easier on the wallet and the digestive system.

    Something tells me the restaurant landscape will change drastically over the next 10-20 years.

  4. VennData says:

    Republican Leaders Search for New, Winning Strategy

    “…The GOP plans to let everything Obama wants breeze through Congress, rubber stamping even his most phantasmagorical Socialist dreams: no guns, free food for everybody, kill two birds (Education and Health Care) with one stone by making everyone a doctor, then tax the heck out of ‘em. THEN we’ll see who likes Democrats!!!”

  5. “…sold summer cabins — not because they needed the money, but because the whole thing of having a cabin, paying the taxes, doing the maintenance, getting the boat out and putting it away, is just a pain in the ass…”

    “…but because the whole thing of having a cabin, paying the taxes is just a pain in the ass…”

    “…paying the taxes…”

    “…paying the taxes…”

    • 10 Secrets About Wall Street’s New Top Cop (The Fiscal Times) see also Obama sends tough prosecutor to police Wall Street (MarketWatch)

    Who’s taking Bets that “Wall St.” will skate on their Dealing the Pension Funds ‘the Bone’ ?

  6. danm says:

    Re: pensions…

    When you see that they are using 7.75% and 4.3% as assumptions, you’ve got to shudder… if rates stay low much longer, good luck with that guaranteed pension and if rates go up… I don’t want to see what it does to those using leverage.

    Something big is brewing on the pension side.

  7. bonzo says:

    @slowkarma: It’s called a savings spree, and the boomers could use a lot of savings to prepare for retirement. Private savings already offsets the huge deficits, and yet the savings rate isn’t that high. If the savings rate picks back up to the usual 10%, and corporations continue to be reluctant to invest, and the government deficit doesn’t grow, then we are in for a long period of stagnation.

  8. JimRino says:

    Oh, and I got the flu shot this year.
    It’s still contains formaldehyde and thimerosal.
    So, your Flu Producer are still giving the fringe reason to Not Get a Shot.

    Which leads me to conclude that a Heavily Regulated Capitalist System is the best form of business system, and that we are Not Regulated sufficiently.
    There is No Floor a Capitalist will not undermine, without regulation.

  9. hue says:

    “Something tells me the restaurant landscape will change drastically over the next 10-20 years.”

    thx danm, we’re becoming a nation of waiters, cashiers. so we have that going for us, serving baby boomers who don’t want to cook, which is nice, we think.

    “Services have been a crucial source of job growth, creating about 90 percent of the net jobs added since January. For all of 2012, the economy added 1.69 million service jobs, about the same as in 2011. Many of the new jobs are in low-paying retail and restaurant industries.”

  10. danm says:


    It was tongue in cheek… even those with guaranteed pensions are opting for cheapness here in Canada… and we have yet to understand what it feels like to have our home equity disappear in a few quarters!

    The only ones who tend opt for the luxury are the 1%, the ones who don’t know how to calculate DCF and those who are convinced they will not live past 65.

    If we want growth it will have to be off the government’s books: such as PPPs…. Leveraging bank reserves? Sucking up pension plan funds?

  11. hue says:

    so was my post danm. Baby Boomers leave us in their economic wave, we’re beginning to see the trends of their retirement spending or non-spending.
    i’m not sure if we will see the same kind of post WWII boom, consumption again. Take cars as an example, “more than one-quarter of 16 to 34 year olds, who are known as Generation Y or the Millenials, do not even have a driver’s license.”

  12. Greg0658 says:

    I found this report on USA magazines in print .. very interesting

    I wonder sometimes if its jealousy .. don’t think so .. its worry for the OpSys and all the inhabitants of all species that are born this minute. Of course – I’m the lucky one that isn’t fueled by above stats – so there it is.

    Will we fuel ourselves into extinction?

  13. Greg0658 says:

    my last post there .. missed point’g @ the point
    Thats Not Real GDP in the sense of reported worldly GDP
    well ok – Life is Great category GDP

    GDP of – promotion, writeoff, workcation, nepotism

    proper taxation is the mechanism to squelch harmful behavior

    if food & fuel were in great abundance – great
    Gollum: “precious”