My morning reads:

• Jobless Claims in U.S. Unexpectedly Fall to a Six-Week Low (Bloomberg) but see With Positions to Fill, Employers Wait for Perfection (NYT)
• Is that a buy from the Coppock indicator? (FT Alphaville)
• Holder says some banks are ‘too large’ ( see also Too-Big-to-Fail Banks Limit Prosecutor Options, Holder Says (Bloomberg)
• With Legal Reserves Low, Bank of America Faces a Big Lawsuit (DealBook)
• Citizens in Europe are rejecting austerity policies as deeply misguided (theguardian) see also We’ve reduced the deficit and hurt the short-term economy (Wonkblog)
• New robots in the workplace: Job creators or job terminators? (The Washington Post)
• Fallout from ‘Untouchables’ Documentary: Another Wall Street Whistleblower Gets Reamed (Taibblog)
• ComScore:  iPhone Taking Share From Android in U.S. Smartphone Market (comScore)
• The father of all men is 340,000 years old (NewScientist)
• How to predict the progress of technology (MIT news)

What are you reading?


Bad-News Bears Crash the Party

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.

18 Responses to “10 Thursday AM Reads”

  1. swag says:

    I am speechless. USA Today has given Duncan Black (Atrios) a column –

    401Ks are a disaster


    BR: That column is a good one — he is (mostly) right about the problems

  2. rd says:

    Given the aging population of the US as the Baby Boomer bulge moves into retirement, neither of these stories are good news for the economy over the next decade. Poor income growth for workers and poor retirement income security is unlikely to lead to a rise in conumer income and spending as well as deleveraging by paying down instead of default.

  3. RW says:

    Why correlations tend to 1.0

    Abnormal Returns extols the virtues of William Bernstein’s books (as well he should). I’ read The Ages of the Investor awhile back and can’t imagine why I didn’t follow up with Skating Where the Puck Is but I’ll amend the deficit this weekend.

  4. joinvestor says:

    Found this interesting to support the idea that longer term the market is still headed upward:
    “The Latest Sure-Fire Economic Indicator? Traffic”

    But also found this to support my idea that in the short term, we are still headed for an minor correction in the longer upward bull market:
    “With Positions to Fill, Employers Wait for Perfection”

  5. PeterR says:

    Does anyone track Paul Farrell’s “The Crash is Coming” articles relative to stock market performance?

    He is starting to remind me of Robert Prechter in the 1990′s calling for the next big correction coming soon.

    Even a broken watch is right eventually, but recently PF seems off IMO, especially with MarketWatch featuring his articles on the top of the home page each time it opens up.

    There has got be be a Contrarian indicator lurking here.

  6. VennData says:

    U.S. Captures bin Laden Son-in-Law

    Rand Paul should get up a protest this horrifying abuse of Obama’s authority! Issa should investigate, and demand to know why he doesn’t have all the documents! Boehner should tell the American people he doesn’t know if the Sequestor had anything to do with it.

    And why, if you disagree with Obama, you’re suddenly labeled a terrorist?!?!

  7. PeterR says:

    PS — PF’s main point about the brain is OK, but his point is lost in the hyperbole and melodrama IMO. Drama queens should not be featured so prominently by a publication like MW.

  8. RW says:

    The sordid history of Congressional acceptance and rejection of cap-and-trade: Implications for climate policy

    Not so long ago, cap-and-trade mechanisms for environmental protection were popular in Congress. Now, such mechanisms are denigrated. What happened? This column tells the sordid tale of how conservatives in Congress who once supported cap and trade now lambast climate change legislation as ‘cap-and-tax’. Ironically, conservatives are choosing to demonise their own market-based creation. The successful conservative campaign that disparaged cap-and-trade means it may now be politically impossible to promote it in the US. The good news? Elsewhere, cap and trade is now a proven, viable option for tackling large-scale environmental problems.

  9. willid3 says:

    another hit on that retirement meme.

    seems that we have just barely recovered in retirement savings. but now we are 15 years behind. and the averages aren’t with us at all.
    and considering the likelihood of another recession in the next decade, retirement looks less and less likely.
    consider this
    There are two major problems that arise from this. The first is that for individuals trying to save for their retirement they have lost 14 years of irreplaceable time to do so. In 1999 an individual with 15 years to retirement had plenty of time to get there. That is not the case today as they stare retirement in the face and come to the realization that working through their golden years will have to be seriously considered.

    Secondly, consumption makes up roughly 70% of the overall economy. With incomes stagnant, and personal savings rates below 3%, the spread between the cost of living and incomes continues to widen. In turn, consumption is crimped keeping economic growth weak which exacerbates job creation, income increases and overall prosperity. With the average income at roughly $55,000 per year – retirees have little margin of error with only 18 months of incomes saved up in retirement plans.

    so much for the 401k being a good retirement vehicle for the majority.

  10. willid3 says:

    more on that to big to prosecute

    here i think is the big question.
    how do you prosecute a firm (bank or any really large company
    interconnected company….)

    and not end up taking the US economy down with it? some of these banks have trillions in deposits. and more interconnectedness to many other major companies. including smaller banks. same for insurance companies. and consider Walmart. do you really want to add 1 million+ employees to unemployment in one fell swoop?
    so the real problem is have equal justice. which right not seems to not be the case even though nobody will admit to that
    plus consider, that there are many in Congress who see nothing wrong with this

  11. S Brennan says:

    “With Positions to Fill, Employers Wait for Perfection”

    Interesting, but the article lost creditability with me when the author quoted a University of Chicago Economics professor…Offhand, I can’t think of an institution [and a profession], that has less credibility on the subject of jobs than that group of individuals who have contributed so much to human misery by resurrecting a 19th century ideology that is both cruel and economically disastrous.

  12. willid3 says:

    and another take on not prosecuting banks

    it makes those who acted responsibly, but still got crushed by all of the malfeasance by wall street and banks, to loose any trust in both banks, wall street and government. the private sector was given a green light that no regulations would be enforced (in fact a regulator took a chainsaw to the regulation book, and some even claimed they wanted to provider better customer service,,,,to those they policed) so the private sector went wild (again) and played games with other peoples money. and in the end hurting millions. and government didn’t prosecute the offenders (but then I suppose they couldn’t as probably the same folks were in the same jobs. I seem to recall that there have been studies in the past that after an 8 administration, that who ever gets elected next, really doesnt get that much control till almost the end of their first term, if not the 2nd one)

  13. PeterR says:

    New article on 787 batteries. Scary IMO that they can’t really figure out what the cause(s) are.

    I thought this was jetliner science?

  14. kek says:

    willid3 Says: another hit on that retirement meme.

    Actually the problem lies with investor behavior, not the markets.

    If one started to dollar cost average 1/1/99, with an allocation of 50% US Large Cap, 30% Bonds & 20% Foreign Equity, with an annual rebalance to the initial allocation, the portfolio would have grinded out a 6.04% annual return from 1/1/1999-1/31/2013. Not the disaster thrown about in the article. Buy, hold, dollar cost average, rebalance, repeat.

    I ran another screen on a lump sum with the same funds (middle of the road all three) with a lump sum investment on 3/1/2000, close to the top. Same allocation 50-30-20, annual rebalancing, no additional contributions. This portfolio would have averaged 4.87% per year, 3/1/2000-1/31/2013.

    I suspect this basic portfolio’s returns would have placed it in the top quartile of all real life returns over that time period.

  15. Iwasframed says:

    In the article “Fallout from ‘Untouchables’ Documentary: Another Wall Street Whistleblower Gets Reamed” was anyone else outraged? Not only does the DOJ fail to bring cases but the courts decide to arbitrarily undo that which juries decide. I guess the third branch of government is gone too. Next watch for the Supreme Court’s decision on Monsanto’s seed patent. Forget the stock market — we’ve got bigger problems. Only amendment of the Constitution will give us our government back.

  16. AnnaLee says:

    kek, if there is a prescription for 100% guarantee of success, we could just automate retirement savings and everyone would come in a winner and retire without worry. If that wouldn’t work why do people always break in and claim it’s the behavior. It kind of like “distribution free”, only now it’s “behavior free”. Problem is – what is this winning formula that has no risk and why do we make people save with risk if the “risk free” “failure free” retirement formula exists? It makes no sense to gamble with the retirement part of one’s savings if you can win without doing it. How-to’s work until they don’t.

  17. kek says:

    Anna lee, sticking to a basic asset allocation, and rebalancing plan during the worst stretch for average investors since the ’30s gave pretty decent results. There are no guarantees in investing. But by employing basic principles of diversification, and asset allocation, one has been able to weather some long stretches of bad markets with decent returns. The time frame from 1966-1981 when the market averages went nowhere, this basic approach also yielded similar results. The behavior part comes in because it is hard to do during market corrections when you feel dumb, and during bull runs when you most certainly will underperform.