My afternoon train reads:

• Record High Close for Dow, Spurred by Fed and Profits (NYT) see also New Dow Highs Usually Spur More Buying (WSJ)
• ‘Lost decade’ not over for 401(k)s, IRAs (MarketWatch)
• FBI joins SEC in computer trading probe ( see also U.S. state regulators urge Congress to probe high-frequency trading (Reuters)
The Latest Prediction of The World’s Wrongest Man (New York)
• Buffett Picks His ‘Bear’ for Annual Meeting (DealBook) see also Buffett’s Lament; or, Don’t Let The “Uncle Warren” Stuff Fool You (Jeff Matthews Is Not Making This Up)
• Greenspan Fed’s Biggest Mistake: LTCM Rate Cuts (Macroeconomic Silence)
• Apple nearly called the iPhone the ‘TelePod’, ‘Mobi’, ‘TriPod’ and even ‘iPad’ (Digital Trends) see also Apple’s Reality Distortion Field Relocates to Wall Street (Time)
• U.S. Has 7th Highest Cancer Rate in the World (WebMD)
• The Mystery of Easter Island (World Property Channel)
• 9 Ways Dr. Seuss Was a Secret Bad-Ass (Hollywood)

What are you reading?


Big Banks Error Rates Raise Questions About $9.3B Settlement

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.

15 Responses to “10 Tuesday PM Reads”

  1. MikeNY says:

    Excellent piece on LTCM.

    Sadly, we appear to have learned nothing.

  2. slowkarma says:

    The WSJ article, “New Dow Highs Usually Spur More Buying” had a rather interesting conclusion:

    “All of this leaves investors with two big facts. First, the bull market is old and, in a normal world, might not be far from a high. Second, this isn’t a normal world, and Fed Chairman Bernanke is determined to keep markets liquid. Until the Fed shows signs of retreat, it will take a serious shock from somewhere else to send U.S. stocks lower.”

    Like what kind of shock? A pure Black Swan? Or will it be something that can be anticipated? If Bernacke should even seem hesitant about continuing the bond-buying, does the market drop 1,000 points in one day? I mean, could we crash even on a slip of the tongue?

  3. BennyProfane says:

    The real “lost decade’ Of 401ks isn’t the ups and downs of the market, it’s the lost forever chance to save at a younger age than you are now. Market goes up sometimes, but, you can never get that time back.

  4. mad97123 says:

    October 11th 2007, the last time stocks were here…

    •Dow Jones Industrial Average: Then 14164.5; Now 14164.5
    •Regular Gas Price: Then $2.75; Now $3.73
    •GDP Growth: Then +2.5%; Now +1.6%
    •Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
    •Americans On Food Stamps: Then 26.9 million; Now 47.69 million
    •Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
    •US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
    •US Deficit (LTM): Then $97 billion; Now $975.6 billion
    •Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
    •US Household Debt: Then $13.5 trillion; Now 12.87 trillion
    •Labor Force Particpation Rate: Then 65.8%; Now 63.6%•Consumer Confidence: Then 99.5; Now 69.6
    •S&P Rating of the US: Then AAA; Now AA+
    •VIX: Then 17.5%; Now 14%
    •10 Year Treasury Yield: Then 4.64%; Now 1.89%
    •USDJPY: Then 117; Now 93•EURUSD: Then 1.4145; Now 1.3050
    •Gold: Then $748; Now $1583
    •NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

  5. catclub says:

    I wonder how many mistakes shown in the figure at bottom of the post
    should have resulted (if fixed) in a
    payment to the bank – i.e mistakes NOT in the banks’ favor.

    You notice in car dealerships that the mistakes in transcribing prices always tilt one way.
    I think The Blog Host even mentioned that.

  6. spooz says:

    I also enjoyed the LTCM piece, and like the idea of the fed issuing a citizens dividend (helicopter money) instead of propping up banks and asset prices.

    Along those lines, Mish just posted a piece on Beppe Grillo, who “supports a concept of a guaranteed “citizenship income” for all, whose cost is estimated at between 20 and 30 billion euros.”


  7. VennData says:

    Cheers Are Few as Dow Jones Average Hits Milestone

    “…In the past, such a recovery would have led to celebrations on Wall Street and spread optimism about the economy. But the fact that a Socialist is ruining the nation with his his high taxes, massive spending, and use of drones to attack God-fearing White Rural Americans means that the vast majority of people are not in the stock market, except Obama’s close friends, patrons and shady off-shore financiers of his media campaign to discourage work, enforce dependency and end heterosexuality as we know it…”

  8. outis says:

    I was just reading about Easter Island in _The Third Chimpanzee_ by Jared Diamond. Interesting stuff and worth reading (the Easter island bit it towards the end, but the whole book is great).

  9. czyz99 says:

    I’ve always thought LTCM was a huge mistake, but Greenspan saved my ass.

  10. Moss says:

    Keep in mind the Dow is in nominal terms. Current P/E is below 2007 levels and below historical averages, long bonds have returned 31% since. One other thing… George Bush was not a brilliant economic mind

  11. [...] was reminded of all this yesterday when I linked to an amusing New York magazine column: World’s Wrongest Man Ventures Latest Prediction. The [...]

  12. jnkowens says:

    Enjoyed ‘Record High Close for Dow, Spurred by Fed and Profits’, and then I saw Josh Browns tweet yesterday of David Rosenberg’s comments at a CFA Institute of Chicago event. Specifically Rosie said the correlation between the Fed balance sheet and stocks was 87% while the correlation between corporate profits and stocks is only 70%. Wow.

    I just have a hard time, given that context, of believing we are seeing durable market gains. I know this is overly simplistic, but in the long run GDP drives corporate profits, and corporate profits drive stock prices. That relationship can be influenced by lots of things along the way, but will (has always) revert to mean. Unless of course, “this time is different”.

  13. AHodge says:

    Listenin mainly
    the last two days Nat Assn of Business Economists meetings NABE
    you prob heard Yellin (no tightening) and volcker (no reform)
    you can find those
    also Posen VS Lacker politely slugging out QE good or bad on the highest intellectual level
    couple of my favorite info nugget factoids

    Iraq, yes Iraq, is now OPECS second largest producer at 3.0 MM barrels day goin to 3.4 this year
    security evident completely under control (no news good news)

    Dimarco says fannie freddie operations to be folded into new joint venture next year
    -sketchy details mainly their cobol based software and pricing models are an antique joke and need replacemt
    but-i sold all my fannie stock on risk aversion,
    that might allow FF reform that wipes out their equity

    most new heavy trucks railroads natgas powered in 10 years

  14. “U.S. Has 7th Highest Cancer Rate in the World” should read ” U.S. Has 7th Highest Cancer Diagnosis Rate in the World.”

    Big difference, given that many of the cancers diagnosed are early stage and the long-term efficacy of invasive treatments vs. doing nothing is (in many cases, e.g. breast/prostate) nil. But where there’s money to be made…

  15. tsk tsk says:

    While reading the “U.S. Has 7th Highest Cancer Rate in the World” did anyone else notice the similarities to the Highest Overall Cancer Rates to the ‘Happiest Countries List?’ Correlation or Causation?

    “World’s happiest countries” from Forbes
    1. Norway
    2. Denmark
    3. Sweden
    4. Australia
    5. New Zealand
    6. Canada
    7. Finland
    8. The Netherlands
    9. Switzerland
    10. Ireland