My afternoon train reading:

• Why The Austrian Business Cycle Theory Is Wrong (Robert Nielsen)
• ETF Fees Creep Higher (Rick Ferri) see also The Market Timing Myth (WSJ)
• Volume of Property Deals Plunges in Hong Kong (World Property Channel)
• As a datum speaketh: The evolution of The Economist’s infographics (Economist)
• Nokia ran out of moves—but now Microsoft can make some of its own (Quartz) see also Here’s why Microsoft is buying Nokia’s phone business (The Switch)
A Dozen Things I have Learned from Barry Ritholtz about Investing (25iq)
• McKinsey & Co. Isn’t All Roses in a New Book (DealBook)
• Where Politicized Intelligence Comes From (National Interest)
• Students’ parody performance ‘blurs lines’ (3 News)
The man who sees red: Ferraris in the focus of Günther Raupp (Classic Driver)

What are you reading?


Here Comes September

Source: Bianco Research

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.

12 Responses to “10 Tuesday PM Reads”

  1. RW says:

    Sequester Watch, #20

    Here’s the latest in our continuing collection of reports on sequestration’s impacts on the ground. There’s more on Head Start (see “Who’s Not Going Back to School?” below), legal services, and scientific research.

    Or note this, from a piece below on the impact of the cuts on soldiers and vets with mental health needs:

    “We’ve got a suicide epidemic with record numbers of suicides among military personnel every year…Guys coming home with PTSD and depression, and then the clinicians working with them were only available four days a week instead of five.”

    Indeed, Stars and Stripes recently reported that Walter Reed National Medical Center had reduced beds in the in-patient mental health section from 28 to 22; an internal memo encouraged “dispositions/discharges as soon as possible” and the western Army medical region alone had delayed 10,000 routine patient appointments in the first month of furloughs due to staffing shortages.

    Remind me: how do those spending cuts help America?

    Those who forget the sequester are doomed to repeat it.

    • ilsm says:


      “Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” – Mark Twain

      So that contract service and supplies would not be cut, DoD hit wages and services delivered by those wage earners.

      The furlough days were stopped at 6, the remaining 5 Fridays through 30 Sep will be worked.

      Next fiscal year DoD will not be permitted to make sequestration “cuts” that harm medical care for serving members and veterans.

      A bit of sharpening of the pencil and no cuts would have been made that impacted veterans and soldiers health.

      I cannot tell if the pentagon was inept or it planned to cause the most pain?

  2. stonedwino says:

    Damn BR, you got guys at Microsoft blogging about…”Given Barry’s towering intellect, this is a scary exercise.”…

    You are a Rock Star…

  3. GeorgeBurnsWasRight says:

    My only problem with the charts showing how stocks historically underperform in September is that the “Sell in May and go away” meme didn’t work well this year.

    About the only “old saying” you can depend upon is the one which says that when a pattern becomes obvious then it stops working.

  4. DeDude says:

    Calculated risk has a graph of construction spending. Look at the public construction spending –can you see the stimulus? I think it is a tiny little thing in 2010 that barely pops above the noice level and doesn’t even get past the previous maximum public construction spending (in the first months of 2009). When people tell me the stimulus failed, I always ask them what stimulus? Now I have a graph to go with that answer.

  5. silverBUG says:

    Logged in just to post I’m surprised you included the Dealbook article on McKinsey. Hell he refutes himself twice! Tough to question their results and in the next sentance disclose they have been brought in to help the NYT strategy. McKinsey has many problems but delivery great work isn’t one of them.

  6. jhawkins90 says:

    Article about Austrian Business Cycle Theory is dumb, though forgivable because everybody seems to get it wrong, including most of the Austrians.

    It attacks a special stylized version, but avoids the heart of the matter.

    The real point is that people who first come into touch with new money affect prices. So when consumers get loans and buy houses with it, they distort the housing price. The reason is because a new loan is like printing money (private banks can print money too… this is a point nearly every Austrian gets wrong…).

    Once loans stop being generated, the money supply settles, prices return to “equilibrium”, and the preferences of the individuals who were driving the market become drowned out by the rest of the market.

    So the real problem with ABCT is only about half the story. It explains how debt driving into asset classes changes prices, and how changing interest rates changes prices in incorrect ways, but it doesn’t explain all too well (though this is arguable) why the debt piles into specific assets rather than just stuff in general. It doesn’t explain the herding. That is for much smarter people like Didier Sornette to find out.

    • Hence, the criticism of Austrian economics — which, as you described, has a deeply flawed conception of credit and inflation. It seemingly has no concept of equilibrium

      • jhawkins90 says:

        Isn’t that a positive/realistic aspect of the theory? Financial markets don’t seem to be as enamored with equilibrium as most economists are.

  7. alexeck says:

    “Why The Austrian Business Cycle Theory Is Wrong” — reading the article, I don’t entirely understand what is right about what the author is saying. I’m completely bemused by his Keynesian arguments.