My morning reads:

• The Fed begins its long and gradual exit (FT.com)
• GMO’s Montier on Why to Hold Cash (Advisor Perspectives)
Wolfers: Markets Have Already Misread the Fed (The Ticker) see also More easy money’s on the way (New York Post)
• Emerging Markets Crack as $3.9 Trillion Funds Unwind (Bloomberg)
• Bond Bull Market Isn’t Dead Yet, Longtime Bond Bull Says (Yahoo) see also Bernanke won’t blow up bond market (Fortune)
• Embrace The Life-Building Power Of Creative Destruction (Forbes)
• Why India Trails China (NYT)
• Sizing Up Big Data, Broadening Beyond the Internet (Bits)
• How Caffeine Can Cramp Creativity (New Yorker)
• Remembering James Gandolfini and Tony Soprano (Hit Fix) see also Definitive Explanation of the End of the Sopranos (Masters of Sopranos)

What are you reading?

 

Bond Investors Head for the Hills
Graphic
Source: WSJ

Category: Markets

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.

16 Responses to “10 Thursday AM Reads”

  1. RW says:

    I was never persuaded the Fed was targeting equity prices so no big hu-hu there, but I did believe they had decided to adhere to their dual mandate in realistic terms (meaning an inflation target near or above 2% and unemployment at or below 6.5% — paying some attention to the employment/population too). Oh well, silly me: looks like I’ll trade a few nice names at limit price; [shrug]

    A Potentially Tragic Taper

    …I did want to weigh in briefly on the Fed’s latest, in which Bernanke confirmed that the Fed is getting significantly more hawkish — based on relatively optimistic forecasts.

    My reaction is, this is not good. They might get away with it, but there’s also a serious chance that this will end up looking like a historic mistake.

  2. Joe Friday says:

    Last night, Stephen Schwarzman, the Chairman & CEO of Blackstone, told Charlie Rose:

    (1) “If China continues growing at three times the Western world…

    Wow. What a sucker.

    ~~

    (2) “I think with individual tax reform, that something closer to a flat tax is much more equitable.”

    Unless he’s utilizing some definition of “equitable” from Bizarro World, he’s completely uninformed and ass backwards.

    ~~

    Just how do so many of these out-of-touch and uninformed fools end up as CEOs of major companies ?

  3. RW says:

    The Second Great Depression: Why the Economic Crisis Is Worse Than You Think by J. Bradford DeLong

    Review of After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead by Alan S. Blinder. Penguin Press, 2013, 476 pp.

    Most economists [including Blinder] claim at least one silver lining in the economic downturn: that it was not as bad as the Great Depression. Up until recently, I agreed; I even took to calling the episode ‘the Lesser Depression.’ I now suspect that I was wrong. Compare the ongoing crisis to the Great Depression, and there is hardly anything ‘lesser’ about it. The European economy today stands in a worse position compared to 2007 than it did in 1935 compared to 1929, when the Great Depression began. And it looks as if the U.S. economy, when all is said and done, will have faced certainly one lost decade, and perhaps even two.

    NB: this link should get around the pay wall; see DeLong’s blog entry

    • willid3 says:

      if we are lucky it will only be a lost decade. but so far i am thinking its already been going on for a decade (i tend to count back to 2001 since if we look at the ‘great ‘ economy we had, it looks a like what we have now. just that we had the easy credit and housing bubbles that made it look a lot better than it really was)

  4. VennData says:

    Former TigerDirect President Indicted in $230 Million Laundering Scheme

    “…He allegedly used the kickbacks to buy an $8 million residence in Coral Gables, Fla., furnishings for the home and pay his credit card bills, as well as pay for tennis coaching and the use of a hip-hop production company…”

    http://blogs.wsj.com/riskandcompliance/2013/06/19/former-tigerdirect-president-indicted-in-230-million-laundering-scheme/

    Dis tigah’s gotta line direct to Dead Presidents
    investin’ in Miami an’ movin’ to my residence​​

  5. VennData says:

    Senators urge inclusion of food safety in Smithfield review

    http://www.reuters.com/article/2013/06/20/us-smithfield-shuanghui-senators-idUSBRE95J0O220130620

    Get government off the Chinese back! No wonder there’s no foreign investment in this country!!! What with the high corporate taxes!!! Higher than ANYWHERE! And Obama!!!!!

  6. Francisco Bandres de Abarca says:

    Regarding Montier’s ‘Why to Hold Cash’–to my thinking, it is best to let the market–in combination with one’s stop-loss orders–determine when your portfolio becomes increasingly allocated to cash. And today, as stop-loss orders are triggered–bloop!–suddenly the allocation to cash increases. Profits (or mitigated losses) live to battle another day.

    I suspect not all of today’s action in the market (and look at the yield on the 10-year go!) can be attributed solely to what came out of this week’s Federal Reserve meeting. The problems in China are roiling markets as well. Frankly, I thought the Loan Trouble in Big China was going to surface a couple months ago.

    And what’s this about caffeine cramping creativity? Hell, on many days, if it weren’t for coffee, there wouldn’t any activity emanating from my brain pan. Sometimes, elemental functionality is enough.

    Y’all take care out there!

    • bonzo says:

      Set your stop-loss orders that tight and you’ll be shaken out early in the rally. Trading is a poker game. Luck cancels out in the long run and skill reduces to reading the psychology of the other players and outwitting them. Mechanical rules like stop-loss orders 5% below the market are no substitute for thinking. If you’re a value trader, the time to start getting out of the market was long ago, back around SP500 = 1500. Value traders always get out too early on the way up and get back in again too early on the way down. Learn to live with it. If the swings up and down are big enough, value traders still make good profits. Momentum traders do the opposite, get out too late and get in too late. I have no idea when it would be a good idea for momentum traders to get out because momentum thinking is alien to me. Momentum does work, that I know, and the really great traders combine value with momentum.

  7. Herman Frank says:

    More than the stock market, more than Fed caffeine withdrawal symptoms, more than whether some manager got a golden or platinum parachute the subject of “The Broken Social Contract” is worrisome to me.
    Because it puts the ax to our society at large, finishes off the American Dream, puts an end to fairness and equality.

    Tom Edsall has a blog-post on it: http://opinionator.blogs.nytimes.com/2013/06/19/our-broken-social-contract/?hp

    How can anyone “sit still and hold the course” if the description is: “…. an eight-year period of social disintegration, inequality and rising self-preoccupation …”

  8. loebd says:

    The Inflation hedge myth. Thought you could hedge your inflation risk with equities, commodities, and infrastructure? Think again:
    http://ai-cio.com/channel/RISK_MANAGEMENT/The_Inflation_Hedge_Myth.html

  9. RW says:

    The market’s freakout is presenting some nice trading opportunities but my background assumption remains the same: the ‘taper’ is still below the event horizon (I doubt it will be announced this year).

    Tim Duy’s Fed Watch: The Chart to Watch?

    The story is that the Fed has tended to overestimate the strength of the economy, and has consequently had to maintain easy policy longer than policymakers had anticipated. Assuming the Fed continues this pattern of errors, they may delay the now-anticipated exit from asset purchases. …But while the growth forecasts have tended to be overly optimistic, the same is not true for the unemployment forecast. Those forecasts have tended to move downward over time …

  10. willid3 says:

    so much for keeping corporation in line

    http://www.ibtimes.com/supreme-court-cases-big-win-corporations-high-court-puts-severe-limits-class-action-cases-1316619

    they are now free to rape and pillage to their hearts content

  11. intlacct says:

    haven’t read Montier yet but, I saw something the other day (I think it was linked here at TBP) about the returns on various asset classes and how, after inflation, cash sucked. The problem is, when u want to go shopping, say, now or in the not-too-distant future, after ridiculous valuations get blown up, cash is mighty handy.

    Cash is the red-headed stepchild of asset classes. I hope it continues to be hated. ;)