My afternoon train reads:

• Finally, a half decent explanation of the Hindenburg Omen (ETF Daily News)
• ‘Financialization’ as a Cause of Economic Malaise (Economix)
• Crazy Eddie fraudster says SEC can’t keep up (MarketWatch)
• For Sussing Out Whether Debt Affects Future Growth, the Key is Carefully Taking into Account Past Growth (Supply Side Liberal)
• Apple’s Good Looks Get It Only So Far (WSJ) see also From Apple, an Overhaul for Mobile and the Mac (NYT)
The Amish Are Getting Fracked: Their Religion Prohibits Lawsuits—and the Energy Companies Know It (New Republic)
• There is No Such Thing as Invention (IMHO)
• 5 Maps That Show How Divided America Really Is (Atlantic Cities)
• The Awful Truth About Jogging (robicellis)
Stat humor! Study says 83% Of Gamblers Quit Right Before They Would Have Hit The Big One (Onion)

What are you reading?


Spike in Mortgage Rates  
Source: Bespoke

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 Tuesday PM Reads”

  1. VennData says:

    “…Microsoft may not have been listening to the rumbling of discontent over some of the new “features” coming with Xbox One, but Sony certainly has…”

    Really? Gates and Ballmer not doing what customers want? There’s a shocker.

    Oh well, the Wall Street Analysts will continue to tell you it’s a “value” stock, so keep buying this company that uses a model rejected by human beings.

  2. Mike in Nola says:

    I thought this was one of the better comments on the new IOS look. It’s from The Verge which is certainly not know for being anti-Apple.

    As it points out, anyone who follows these things could see that the new interface has lots of borrowed features, the question being how well they executed it. Personally, I found the colors pretty bad, looking like an appeal to adolescent girls. Based on twitter, I wasn’t the first to notice similarities to XP. How well it all hangs together remains to be seen after it gets on phones.

  3. Mike in Nola says:

    Oops! forgot the link. Shouldn’t post when waking up from a nap.

  4. VennData says:

    Balky Bond-Market Plumbing Is a Big, Hidden Risk

    “What scares me and really what the reality is, is that there’s not enough balance sheet on the ‘sell side’ to support any kind of warehousing activity if institutional investors want to materially reduce their holdings.”

    DAYTRADER: Oh NO! Another horrible PROBLEM! And it will make trading MORE VOLATILE! Which means that the prices for bonds will be TOO LOW!!!

    SCIENTIST: Well buy some bonds that are too low then. What are you waiting for?

    DAYTRADER: Well they are too HIGH I mean!

    SCIENTIST: So SELL them when they are too high. What are you waiting for?

    DAYTRADER: I mean… I mean they go up and down too much!

    SCIENTIST: So buy/sell then buy/sell then buy/sell. What are you waiting for?

    DAYTRADER: I mean… I mean how do I know whether they will go up and down!?

    SCIENTIST: So you used to know what would happen?


    SCIENTIST: So buy and hold. What are you waiting for?

  5. chartist says:

    The monthly MACD for the SPX is at absolute nose bleed levels. I’d say the next several months are flat at best….I suspect we’ll see a period where the SPX level rises while the monthly MACD diverges over the next 18 months….I’d be a buyer of a 20% down move in silver from current levels if your holding period is 5 to 10 years. Ford motor remains my favorite large cap play….I think F is a referendum on the surge of the Chinese middle class….Toyota and Honda won’t play well in China, or South Korea…..

  6. willid3 says:

    well since we wont take steps to climate change, we might as well take the steps to get ready for the result?

  7. Bill in SF says:

    It’s not just that the SEC is understaffed and can’t keep up, they’re just such nice guys. Just look at the size of the fine imposed in this case.

    SEC Cracks Down on Chicago Options Exchange for Naked Short Sales

    Oh, and there’s this; “The SEC has decided not to strip or restrict the CBOE of its authority as a self-regulatory organization, citing the remedial measures the exchange has agreed to undertake.” Of course, the CBOE is Too Big to Strip.

  8. VennData says:

    Edward “Dunning–Kruger effect” Snowden the high-school-drop-out is the hero of the angry and paranoid…

    ​”…Google sent a letter to U.S. authorities asking that secrecy restrictions be loosened so the company could publish the number and scope of surveillance court requests in reports it already issues on data requests from authorities. “Google’s numbers would clearly show that our compliance with these requests falls far short of the claims being made. Google has nothing to hide,” said David Drummond, the company’s chief legal officer…”

    DROP-OUT WORSHIPERS RESPOND: No these companies MUST be lying! They know I called my mom now! They’ve taken everything!!!

    Wait until the Euro’s see how many lives this has saved.

    DROP-OUT WORSHIPERS RESPOND: Home school your children so THEY will sell out the technological prowess the shadowy elite have fostered on the backs of disintermediated businesses! END THE INTERNET! You will never believe they are not reading all of your emails, ever again, will you? STOP THE INTERNET FOREVER!

  9. rd says:

    The sharp rise in mortgage interest rates won’t impact house prices because housing has returned to a normal market where the buyers are all investors using cash from Fed financing which isn’t dependent on the 10-yr T-bond to set rates.

  10. Theravadin says:

    So far it looks an awful lot like Apple was paying too much attention to the competition with iOS7. Not only is there a WP8 look to the screen (and personally WP8 is not a look I’d want to copy – looks like it was made for the Sesame St crowd circa 1975), but some of the dynamic features are distinctly BB10. OK, I love the BB10 dynamics, but Apple has always been about finding that magical integration, not creating a pastiche of features from others. Maybe once you have it in your hand it will all come together, but it isn’t screaming “must have” to me, at least yet.

    Hopefully Apple has something big coming later, and these are just stop-gaps. If not…

  11. slowkarma says:

    I liked the story on the The HIndenburg Omen (so named because the market will be going down in flames?) The story said,

    “Once a Hindenburg Omen signal has been confirmed, the probability of a market downturn within the next several months of 5% or greater is 67.8%. Here’s the likelihood of progressively more severe drops:
    Probability of an 8% decline or more: 48.5%;
    Probability of a panic sell-off of 10% or more: 35.6%;
    Probability of a full-blown stock market crash of 15% or more: 25.8%.”

    I wonder what the probability is of a market crash within the next several months after I hole-out for an eagle? Or to put it another way, I wonder what the probability is at any given moment, of a 5% market downturn in the next several months?

    • Disinfectant says:

      I pulled S&P 500 price-only data from Yahoo and, using closing prices since 1/1/1985, the probability of greater than x% decline over the next 63 trading days (about 3 months) from ANY randomly selected day were as follows:

      5% decline: 32.1%
      8% decline: 17.1%
      10% decline: 13.0%
      15% decline: 6.9%

      It is, of course, obvious that the Omen has a higher hit rate going backwards, otherwise no one would pay any attention to it. What is not clear is whether it is just a result of data mining overfit. There is a strong implication that it the case because the “formula” to trigger the Omen has changed over time. If the original idea were valid, additional criteria would not have been needed.

  12. rd says:

    This is going to come as a shock to people, but apparently currency traders at large banks are front-running their clients to make profits for the banks:

    This will also come as a shock, but it appears that it can’t and/or won’t be prosecuted.

  13. I was belatedly reading this week’s Hussman Weekly Market Comment, and found this apropos of the Hindenburg Omen (a topic which I see is again on Barry’s reading list above)…

    “So while we certainly would not put much weight on the so-called “Hindenburg Omen” in the absence of other very negative indications, I suspect that the present sighting will turn out to be one of the spectacular successes, much like the 1987 (not shown), 2000, and 2007 instances were. The criteria in the chart below are a slight modification of Peter Eliaides’ definition. Some observers suggest an additional instance in August 2010, but at that point, the market was below its level of 10-weeks earlier, as well as its 10-week moving average, so I disagree with that sighting. In the chart below, the bars indicate points in the past 20 years where the following conditions were true.

    NYSE 52-week highs and lows both greater than 2.5% of total issues traded (composite highs work better than equity-only, because dispersion of interest-sensitive issues is often meaningful);
    New highs no greater than twice the number of new lows;
    S&P 500 greater than its level of 10-weeks earlier (some versions use the NYSE composite, but our index of interest is generally the SPX, and we are less interested in signals that might occur when the market is already down substantially);
    McClellan Oscillator (the 19-day minus the 39-day smoothing of daily advances minus declines on the NYSE) below zero, which is another indication of dispersion;
    Two signals within 36 trading sessions, which is helpful for reducing one-off noise.
    Ominous? Not necessarily. Worth considering in the context of a much more troubling syndrome of overvalued, overbought, overbullish, rising-yield conditions? Sure.”

  14. VennData says:

    I love Bartlett, above:

    “…Research by the University of Michigan sociologist Greta R. Krippner supports this position. She notes that financialization exacerbates the well-known problem of corporate ownership and control: while corporate assets are owned by shareholders, they are controlled by managers who often extract an excessive share of corporate profits for themselves…”