My afternoon train reading:

• Here’s What Business Insider Readers Like For Financial TV (Business Insider)
• Buying Stocks at Record Highs: Will You Be Sorry? (WSJ) but see A Record Market Is Not All That It Seems (NY Times)
• Rich make same investment errors as rest (FT.com)
• The shakeup at the Minneapolis Fed is a battle for the soul of macroeconomics—again (Quartz)
• Faucets at $1,000 Abound as Home Equity Spigot Opens (Bloomberg)
• Super Zips — those ranking highest on income and college education (Washington Post)
• An Open Letter to the FOMC: Recognizing the Valuation Bubble in Equities (Hussman Funds) but see Bubble or not, don’t (necessarily) blame Fed (Washington Post)
• 8 Subconscious Mistakes Our Brains Make Every Day–And How To Avoid Them (Fast Company)
• Sweden Becomes First Western Nation to Reject Low-fat Diet Dogma in Favor of Low-carb High-fat Nutrition (Health Impact News)
• Scott Adams: I Hope My Father Dies Soon (Dilbert)

What are you reading?

 

China is the World’s Biggest Producer of Carbon Emissions

Source: Businessweek

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.

20 Responses to “10 Monday PM Reads”

  1. Anonymous Jones says:

    I like Hussman, and he’s obviously very smart, but the thing about very smart people is that they are so often surrounded by stupid people that they mistakenly start to believe they know more than they actually know. Call it the bias of the smart, which so often leads to overconfidence. There is no necessary correlation between identifying how others make stupid mistakes and one’s ability to understand a complex universe and uncertain future that is beyond anyone’s ability to accurately assess or predict.

    Certainly, there are risks of “unintended consequences” in everything. Is there really a good way to quantify when the risk of “unintended consequences overwhelm expected benefits”? I’m dubious.

    Yes, profits are high and unlikely to have permanently plateaued. I am on record over and over again saying that I doubt real returns will clear even a very low bar over the next decade, given the current valuations in the market and the probable distribution of economic output over that time frame. But I have no idea what path we’re going to take to get there. There is no certainty that even if this is a bubble, seriously debilitating adverse consequences will result from it. Bubbles don’t have to pop; sometimes they slowly deflate until rising fundamentals catch up to the prices.

    The idea that the FOMC should be more worried about any possible adverse consequences from a decline in equity valuations than the current pain experienced by so many in an economy operating far below capacity seems, sorry to say it, silly (though I may be over-confidently estimating my ability to identify the worse of the two problems).

  2. constantnormal says:

    Freeports: Über-warehouses for the ultra-rich — The Economist.

    … I think there’s another “Die Hard” movie plot in here, something about one of these “storage facilities” being taken and held hostage for a billion-dollar ransom … I’m not sure whether Detective McClane burns it to the ground in the course of “saving it” or not, but that would be the way to draw the biggest audiences among the 99% …

  3. willid3 says:

    on the same note (but different) re Scott Adam’s dad. others can see the same thing but different in that as we all get older the chances that you will loose your facilities (i.e. dementia/Alzheimer) is really based on your genes, and luck, plus how active you are. its really hard when your parents need your help, and you become the parent, because they are mentally about 6. or they start repeating verbatim what they said 5 minutes ago. or repeatedly introduce the same people. and the cost of living explodes for your parents. while they may have lived frugally their entire lives, they no longer can, nor can they take care of them selves any more. and no Medicare doesnt cover this. Medicaid does. because unless you move into your kids home, expect to pay 3,000 or more a month. every year. for up to 20 years, or longer. my mother in law has a long term care policy, she paid 15,000 in premium, so far, less than 10 years later, the insurance company has paid almost 300,000.

  4. Concerned Neighbour says:

    The Hussman piece voices many of my own concerns, only much more eloquently and with better laid out evidence. His two strongest arguments for a bubble in my view are the historically high corporate profit margin and price to revenue ratio. The fact we’re seeing these valuations in an era of poor top-line growth makes them all the more challenging to defend.

    I do wonder if the “markets” are pricing in crony capitalism to a degree. Can these profit margins be challenged when the existing players control the laws and politicians, and buy any promising upstart before they pose any real challenge? There are consequences to not enforcing the rule of law in the white collar arena, and a blow to entrepreneurship is arguably one of them.

    Of course, his piece and any subsequent discussion are likely for amusement only, because with Ms. Yellen coming aboard, we probably haven’t seen anything yet. She did, after all, say with some confidence that there is “nothing to see here” when it comes to valuations. Just, as Hussman points out, she proclaimed everything hunky dory in housing before it all hit the fan. La plus ca change…

  5. RW says:

    Humphreys’ Law of Captive Audience Rage as Applied to Cell Phones on Airplanes

    In its finite wisdom, the Federal Communications Commission is mooting an end to the inflight cell phone ban on airplanes. The likely impact of such a move may at first seem unpredictable, unless of course you know Humphreys’ Law of Captive Audience Rage.

  6. mpetrosian says:

    The Swedish diet article is the health equivalent of a finance piece advocating a portfolio of high cost leveraged mutual funds, private REITS, and penny stocks. There are lots of ways to construct a diet to follow but there are a few tenets or rules of the road to follow no matter what your strategy. Kind of like rebalancing; very few would argue against that. The average human doing average things on an average day needs about 2000 calories of energy to get it done. Hold yourself to that benchmark with a little moderate exercise and you’ll net negative at the end of the day and day after day that difference adds up to real progress. The composition of those calories does matter, especially when you’re very active or involved in a sport competitively, but its the amount of food people are eating these days and lack of physical activity that creates most problems. Large people get hungry often because their brains are telling them that they’re hungry. Your bodies composition of different chemicals, hormones, proteins, etc is regulated by your actions. Your body has set the controls for a 4k-5k a day diet and when you suddenly stop, your brain releases a cocktail to get you eating, to keep the machine running the way you’ve taught it to. It takes time and patience and fortitude to break that cycle and reset the levels of those chemicals involved in a myriad of processes taking place right now behind the scenes. Being rich is cool. Being rich and healthy is nirvana. Eat for energy, not for pleasure.

    • The Swedish idea is to shift away from sugar and simple carbs to complex carbs & protein, with fat not the evil bugaboo it was.

      • ilsm says:

        Interest in hypoglycemic diets is rising in the US.

        Diabetes is a big issue in the US! Sugar and refined (no fiber left) carbohydrates/grains lead to spikes in blood glucose levels which infer type 2 diabetes.

        Avoid bleached flour products, juices from concentrate etc that have no fiber, sugar is not good. Look at labels, if corn syrup etc is in top 4 ingredients it has too much glucose…….

        I think glucose level is as much a health issue as lipids/LDL. Diabetes is a threat to the heart, circulation in the extremities and kidneys to name a few complications.

        An apple a day.

      • mpetrosian says:

        The Swedish idea has some merit. My point is that people cutting out sugar and carbs will end up compensating with more complex carbs and protein and then have all the problems associated with eating too much of those. A well balanced diet will give you a little of everything. Also, refined sugar from pastries or candy is very different from the sugars in an apple. The standard serving size for a piece of steak is about the size of a deck of cards. When is the last time you were served a steak that small at a restaurant? And where’s the leafy greens in that diet? Please keep posting health related stuff! Respect.

  7. ricecake says:

    “China is….. “

    But of course because China has been doing all the dirty works for the other people around the world, specially for those who lived in developed countries so that these countries can have better air in their own home.

    How stupid of the Chinese!. But they realized that now although it’s too late.

  8. farmera1 says:

    Rules, we don’t need no stinking laws.

    http://www.bloomberg.com/news/2013-11-22/gensler-rushes-to-lock-in-swap-rules-as-wall-street-pushes-back.html

    Got to love these guys, it must be nice to get bailed out (to the tune of trillions) by the tax payers and then sue over the possibility of new rules. What a country.

  9. ldaalder says:

    Well, on that Hussman article: don’t get fooled by the tight fit of some of these charts… I did some digging and found an alternative that worked just as fine….

    http://lukasdaalder.com/2013/11/14/crap-works/

    Lukas

  10. jtuck004 says:

    In regards to Scott Adam’s letter, damn right.

    And may his father rest in peace.

  11. rd says:

    I wonder if John Paulson is moving some of his money from gold to Bitcoins:

    http://www.businessinsider.com/is-bitcoin-about-to-change-the-world-2013-11

  12. rd says:

    Apparently Congress has decreed that cheap American-refined gasoline should go to South America and Africa instead of New York and Florida:

    http://www.businessweek.com/articles/2013-11-25/are-u-dot-s-dot-gasoline-exports-about-to-goose-prices-at-the-pump#r=read

    The Jones Act and the ethanol mandates appear to be the main culprits. After all of the belating about having free markets, it is always interesting to see the power of special interests bring the politicians to heel.