My afternoon train reading:

• Why It’s So Tough to Short This Market (Moneybeat) see also Bear trap in S&Ps and Dow should lead to new all-time highs (Brandt)
• At Risk: The Dollar’s Privilege as a Reserve Currency (NYT)
• Handicapping the 2013 Economics Nobel (Real Time Economics)
• “We are watching a train wreck in slow motion, but eventually there won’t be a crash” (MoneyBeat)
• Janet Yellen Big User Of Vanguard Funds (Index Universe) see also How to Get Your 401(k) Ready for Retirement (WSJ)
• 20 Simple Questions About The Federal Reserve (Slate)
• Why U.S. Health Care Is Obscenely Expensive, In 12 Charts (Huff Po)
• GOP moderates in tough spot in swing districts (MSN Money) see also Inside the Republican Suicide Machine (Rolling Stone)
• What Twitter knows that Blackberry didn’t (MarketWatch)
• The Best Things Kanye West Said to Jimmy Kimmel Last Night (Vulture)

What are you reading?

 
Bear trap in S&Ps, Dow should lead to new all-time highs
original_16413176
Source: Brandt

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.

8 Responses to “10 Thursday PM Reads”

  1. “A very scary possibility is that the market price on the U.S. political system doesn’t reflect what market participants are coming to believe about it: that a once capable and reliable system is now dysfunctional and unpredictable. That raises the possibility that a pivotal event could move markets dramatically because traders are prepared to believe, and to begin trading on, a much more pessimistic assessment of America’s political system. If everyone were moved to act on that belief simultaneously — by a debt-ceiling crisis, for example — the results could be earthshaking.”

    Is U.S. Political Bubble About to Burst? (Bloomberg)

    http://goo.gl/QNwjdn

  2. chartist says:

    We subsidize the world’s access to cheaper drugs and the world overpays for gasoline so we can have it cheaper.

  3. The party of stupid, managing to make ACA more popular since the shutdown DESPITE its stumbling hard out the gate . . .

    “If it were not so bad for the country, the results could almost make a Democrat smile,” says Democratic pollster Peter D. Hart, who conducted the survey with Republican pollster Bill McInturff. “These numbers lead to one inescapable conclusion: The Republicans are not tone deaf; they are stone deaf. . . . For one thing, the health-care law has become more popular since the shutdown began. Thirty-eight percent see the Affordable Care Act (or “Obamacare”) as a good idea, versus 43 percent who see it as a bad idea – up from 31 percent good idea, 44 percent bad idea last month.”

    NBC/WSJ poll: Shutdown debate damages GOP

    http://goo.gl/QQ2qrU

  4. RW says:

    NYT Says Concerns Over Debt Ceiling May Lead China to Stop Manipulating Its Currency

    That’s not exactly what the piece said. Rather it said that China raised concerns about the debt ceiling in discussions with Secretary of State John Kerry. It implied that such concerns may affect China’s willingness to buy and hold U.S. debt.

    The NYT piece linked in today’s PM reads is a bit more subtle but commits some of the same fallacies as the piece Dean Baker appropriately derides above. Even in the case of a politically forced default there is virtually no chance the $USD will not be an important reserve currency for the foreseeable future. But that does not also mean it must remain the reserve currency and continue to be expensive: A “strong dollar” has benefits but it also has costs; e.g., loss of formerly middle-wage manufacturing jobs. IOW it wouldn’t hurt the USA at all if the $USD were cheaper.

  5. RW says:

    Does Yellen Pick Show Obama Finally Cares About Jobs?

    …at long last President Barack Obama’s nominee for the next chairman of the Federal Reserve, is also something else: His first appointment focused on jobs and economic growth.

  6. bonzo says:

    Abnormal returns (http://abnormalreturns.com/living-low-return-world/) linked to this interesting article by William Bernstein, a mix of optimism about our economic future, but pessimism about future investment returns: http://larrysiegeldotorg.files.wordpress.com/2012/01/the-paradox-of-wealth-v2-formatted.pdf

    Bernstein’s argument that prosperity leads to low real interest rates doesn’t explain why 30-year TIPS rates were over 3.5% 15 years ago but now they are under 1.5%. Surely the United States was prosperous in 1998. He reminds me of Fisher’s famous statement in 1929 that stock prices then were at a permanently high plateau. My own view is that we are indeed in a world of low prospective returns on investments, due to the concentration of wealth and income, which leads to a shortfall of demand (deflationary environment). However, that shortfall of demand can easily be changed by a war or natural disaster, and it WILL be changed in one of these ways eventually, if history is any guide to the future. That is, war or natural disaster would reverse the situation to one of shortfall of supply, driving up returns on capital (interest rates) and crushing long bonds and especially stocks (which are effectively very long-term bonds plus a call option).

    In the meantime, the deflationary environment is definitely good for bonds and possibly good for stocks, assuming there is no hit to earnings. That assumption has held so far, but it’s a very dubious assumption, IMO, which is why I’m heavily into intermediate-term bonds right now myself.

  7. metphd23 says:

    While on furlough :-( I am taking an EdX Behavioral Economics class online. One of the students posted this very interesting article: http://www.nytimes.com/2013/09/17/science/the-rational-choices-of-crack-addicts.html?smid=tw-share&_r=0. Probably not a result that the politicians would want to see though.