My morning reads:

• Interest rates 101: Why the party is over (Fortune)
• Corporate Tax Rates Plummet As Profits Soar (National Memo)
• Forward guidance, the ECB way (FT Alphaville) see also After Bernanke, make unconventional policy the norm (FT.com)
• Japan and the liquidity trap (Noahpinion)
• Hedge Fund Alpha is Negative; Down Around 1700 BPs in 11 Years (ValueWalk)
• India may have picked a fight with the markets it can’t win (Quartz)
• The Sequester Is a Failure—Posner (Becker-Posner Blog) but see Market rally puts stock prices in question (USA Today)
Spitzer: The Steamroller Returns (New York Magazine)
• A Sneak Peek of the National Grid on Renewables (MIT Technology Review)
• The Single Most Important Change You Can Make In Your Working Habits (Farnam Street)

What are you reading?

 

For Treasury, a Question of Fundamentals
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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.

7 Responses to “10 Tuesday AM Reads”

  1. Bob is still unemployed   says:

    It appears that datacenters make for strange political bedfellows, with google hosting a fundraiser for Oklahoma Senator Jim “the Bible disproves global warming” Inhofe.

  2. slowkarma says:

    I’ve been reading a lot of what you’ve been posting — the “Macro Tourist” post, the “Interest Rates 101,” the David Kotok “fully invested” report from Jackson Hole…

    So Barry, what I’d really like to see from you, or any other qualified commentator, is a post that would explain (or speculate on) how the QE era will end. I don’t need a definitive work, but a succinct explanation of the range of possibilities without a lot of political posturing about what’s “good” or “right.” I feel like we’re in an economic climate never before experienced — that it really is different this time.

    Will this condition simply go away? Will we just kind of wander back to “normalcy,” whatever that is, without any real consequences from the QE, or consequences that are routinely manageable, like past recessions? Or is something really weird going to happen (or be required to happen) before we get back?

    I recently saw a long post on the Wall Street Journal (maybe yesterday?) that claimed that the sum of recent government policies involving uncertainty about taxes, employment policies, Obamacare, etc., have created an employment climate (as captured by the participation rate) that simply won’t improve until there are some fundamental changes. If there’s any truth in that at all, and if QE is pegged to employment…then what happens. QE forever? What would be the consequences of that?

    Most of us aren’t traders, we’re investors. We follow the prescriptions seen here (have a plan, stick with it, no-load funds, etc.) but it seems if you have an old-fashioned plan in which you have a balance of stocks and bonds, and stocks are artificially elevated by government action that could end capriciously, and bonds could be cataclysmically trashed by a sudden jump in interest rates…it seems that those plans could be a prescription for disaster. So we need other plans. What would those be? Is there any way to insulate yourself from the capriciousness of government action?

    • willid3 says:

      i see the uncertainty meme is back. doesnt the WSJ realize (and every one else) that uncertainty has always existed, and no one really knows what will happen from one day to the next? and that has always been so? and while i suppose government could change the tax rate, the fed fund rate. nothing new there either. thats always been the case. and if thats all you cared about, you really are in trouble any way.

    • Biffah Bacon says:

      Barry, Krugman and others have pointed out that credit crises take longer to work out than other recessions. I think this one is not much different as we rebound despite political gridlock and chronic unemployment. It wasn’t that long ago that people who could code a little html were making over 100k and in huge demand.
      It would have helped if the big banks and some other monopoly/oligopoly situations were addressed, and criminal activity investigated and addressed even if no real punishments were forthcoming. Real estate market system has some unforced errors. But the take home message is that money has to go somewhere-keep an eye out for it and do some research, and don’t gamble anything you can’t afford to lose.

  3. iScott says:

    I have the same dilemma. I’m considering building a bond ladder with a short term bias to insulate myself from the volatility caused by both the gov’t and the pack of “feral hogs” as Richard Fisher described them.
    One other approach might be to consider where the big money might go if the scenario you described does occur and go there early because that sector or alternative would fare better simply because of becoming inflated as a result of the massive flow of funds into it.