My longer form, weekend reading

• The Wolf of Wall Street Can’t Sleep (New York Magazine)
• The 40-Year Slump (American Prospect) see also Secular Stagnation and Post-Scarcity (Pieria)
• The Black Swan (Seeking Wisdom)
• Why Are So Many People Paying So Much for Art? (New Yorker)
• Animals Were Harmed: Hollywood’s Nightmare of Death, Injury, and Secrecy Exposed (Hollywood Reporter)
• Inside the Company That Bungled Obamacare (Newsweek) see also Mark McClellan ran Medicare Part D. Here’s his advice for the Obama administration. (WaPo)
• This entire country is about to be wiped out by climate change: Drowning Kiribati (Businessweek)
• How Our Soldiers Come Home From the Wars: Broken (Mother Jones)
• Retail Therapy: Inside the Apple Store: It’s a Trap! (McSweeney’s) see also The Birth of the iPhone (Medium)
• Platinum Underdog: Why Taylor Swift Is the Biggest Pop Star in the World (Vulture)

And I suppose you are going to be shopping all weekend?


All Major Market Rallies of the Last 113 Years

Source: Chart of the Day


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.

19 Responses to “10 Weekend Reads”

  1. ilsm says:

    Warriors returning.

    Why do we need ‘activists’ to get the politicians who sent them to act?

    How many years did VA deny agent orange? How many suffer traumatic brain injury (TBI), ‘activists’ pushing that one.

    The shame is to use charities to support our veterans.

    • rd says:

      At least almost all of the politicans wear American flags on their lapels. That is very important.

    • Petey Wheatstraw says:

      It must be a stroke of luck that all of Mitt Romney’s sons, and those similarly situated, returned from serving their country without a scratch. Serving God and Country through Vulture Capitalism, since 1980.

      What are these wars about, again?

  2. whatdoiknow says:

    I like the Chart of the Day “All Major Market Rallies of the Last 113 Years”
    For the Bulls:
    The un-named rallies (near zero) and the 1942 rally seem to be outliers.
    I removed them, omitted the current rally (it’s not over) and recalculated the mean.
    Came up with the pretty much the same data-point.
    Mean Data Point lies at =>
    Percent Change = 309 %
    Rally Duration = 2043 trading days
    Note: sample size is only 7, so the standard deviation is large at 182% and 1033 days)

    The current rally shows 130% and 1100 days
    All of this based on my ability to read the data point coordinates on the chart.

    For the Bears:
    On the chart as shown, keeping the outlier data points in the mix, there are a total of 12 rallies (not including the current one).
    The current rally has outlasted 6 of the 12.
    Uh oh.

  3. scottinnj says:

    The article on the returning troops is very depressing. To coin a phrase from Churchill, never before have so many been so ungrateful for the sacrifices of so few. A friend of a friend had a son who recently incurred a severe, but fortunately not life threatening, injury in Afghanistan. The army does not provide any way for the soldier to be in contact with his Mom or fiance, fortunately due solely to the Wounded Warrior Project, he was able to talk by cell phone a few minutes each day with his Mom and fiance to give them an update the first week or so while he was recovering in Afghanistan. Heckuva job, Congress.

  4. RW says:

    This looks a lot more like discrimination than “lack of skills.”

    The Terrifying Reality of Long-Term Unemployment

    It’s an awful catch-22: employers won’t hire you if you’ve been out of work for more than six months

  5. xatta says:

    Regarding the Chart Of The Day, the current rally may be “well below average” but it is pretty much right at the median.

  6. RW says:

    This was a critical victory given the importance of Texas to the textbook industry. Still, it’s bad enough that battles like this are even going on in 21st Century USA, never mind districts where the battle is being lost.

    How Science Won in the Texas Textbook Battle

    Last week’s State Board of Education (SBOE) vote to adopt new science textbooks for Texas public schools represented an important victory for science education. But what you have been reading in the news media doesn’t tell the whole story about what was happening behind the scenes in this battle — including the effort to derail the adoption of one of the leading high school biology textbooks in the country.

  7. hue says:

    Inside the Mind of NetScape Founder, Venture Capitalist Marc Andreessen (Fortune CNN)

    fa fa fa Fa fa: The Neuroscientist Who Discovered He Was a Psychopath (Smithsonian)

    A 31-Year-Old Is Tearing Apart the Right Wing
    (The New Republic) Think Republicans have been making fools of themselves? Blame Heritage Action’s Michael Needham. Dana Milbank profiled him briefly during the shutdown.

    • DeDude says:

      Great news about the implosion of Heritage. They have historically had a lot of damaging influence on society. Losing their brains is good, but I am somewhat ambivalent about them losing their influence. I mean having a second in command who could not provide a real answer to the question of “what if our opponents next move is x?”. Talk about an arrogant idiot. In chess and politics it doesn’t get any better than an opponent who cannot think 2 steps aheah. More power to that guy – pretty please.

      • 873450 says:

        Losing your brain is now a prerequisite litmus test for earning GOP right wing acceptance and support.

  8. b_thunder says:

    About the Chart of the Day:

    I think it would be very useful to post a table of the P/E ratios at the start of, and the average rate of GDP growth during the initial 5 years of each of these “bull markets.”

    We have to put this chart into context: Thanks to the Greenspan/Bernanke “put,” the markets weren’t allowed to fully correct in ’87, ’97, ’00 and ’08. In other words, the “starting PE” was nowhere near what it was in the 1940 or 1970s. Can we really expect the same gains from the bottom now as in the 1940s , 1950s or 1980s?

    Also, the GDP growth over the first 5 years of this “recovery” has been one of the slowest. There’s a limit of what financial engineering can do to the bottom line (example: IBM) It’s going to take a really, *really* large number of your local Starbucks reviews on Yelp, status updates on FB and “what i had 4 lunch” tweets to push the GDP to the levels enjoyed in the 1950s in order to get the 2009 stock market rally the same long term potential as the 1942 market rally had.

    • rd says:

      The 2009 CAPE low was about 13.

      1942 bottomed at a CAPE<10, as did 1921, 1933, and 1974. 1907 was about 10 at the bottom.

      1987 was really more of a big correction in the great bull from 1982-2000 that delayed the irrational exuberance for a few years – the CAPE bottom in 1982 was the lowest since the early '30s. Given how short a time the 1987 bear lasted and its limited magnitude, it would even be reasonable to simply plot the 1982-2000 market instead of splitting it in two – it would have been up there with the 1942 market then.

      1903 bottomed out higher than a CAPE of 10 in the range of the 2009 CAPE low.

      The only times where we had extended bull runs after significant market drops were the CAPE valuations did not get below 10 were the early 1900s, the 1987 bear that occurred within the great 1982-2000 bull, and a few other short runs inside big secular bull markets that had started with a CAPE valuation much less than 10.

      We live in interesting times.

  9. rd says:

    On the big long market rallies:

    1942 – after a decade of depression around the world, the Japanese had captured most of the west Pacific and the Germans had advanced far into Russia and North Africa and were posed to capture Leningrad, Stalingrad, Moscow, and the Egyptian oil fields. This really became the great US bull run of the 20th century as the US became the dominant world power, human rights were advanced, and the economy grew for pretty much everyone.

    1974 – much of the nominal returns of the stock market from 1974 to 1980 were due to double digit inflation while the economy stagnated.

    1921 – this one had real economic underpinnings coming out ofthe disaster of WW I but the last couple of years were illusory and ended in the Great Crash of 1929-1932.

    1987 – this one had real economic underpinnings for most of the run but similar to 1921 ended up with a couple of bubble years that terminated in a decade of market crashes.

    I am hoping that we win the Battle of Midway soon and the rest of the world can win the Battles of Stalingrad and El Alamein.

  10. rd says:

    Re: 40 year slump and secular stagnation:

    The biggest puzzle to me over the past couple of decades is why American fiscal and taxation policy is so focused on punishing labor and work.Not working is rewarded through the safety net of welfare etc. or by much lower taxation rates on capital gains and dividends. Even much of government spending is focused on things like subsidies to corporations and paying people to not grow crops.

    Actual labor is punished at almost punitive levels by the FICA taxes (15.3% for employee and employer contribution) which are not even deductible from your income taxes that are at higher rates than capital gains and dividends. Even the Obamacare surcharge tax for Medicare of 0.9% for high earners is still only focusedo n wages. Even hedge funds and private etc. get a carried interest benefit for many of their fees by pretending that they are not working even though the fees were earned by working.

    Typically, if you want to reduce or eliminate something you apply a high tax rate of it (fuel usage in much of the world, cigarettes, alcohol etc.). So why are we setting up our policies to apply much higher taxes to actual work? Do we really want to have less of it?

    I have been wondering if the economic malaise will only end when crooks are actually investigated an imprisoned and our tax system is re-designed to encourage behaviors that we want.

  11. S Brennan says:

    When an asteroid comes steaming in to destroy earth….who you gonna call? The guys that missed 911 after being told, the how, the who, the what, the when and the where? …Or the guys who navigate the solar system like Minnesota Fats used to run a pool table.

    NASA does all this and develops technology that has fueled 50 years of economic growth with 1/200th of your tax dollar, while the National Security Apparatus [that's not the military...dear reader] consumes about 1/4th* of your tax dollar and can’t stop 7 known guys with utility knives.

    *200-300 Billion..we are not allowed to know exactly

    • Petey Wheatstraw says:

      It’s fairly obvious that their mission isn’t to stop terrorism, or terrorism’s domestic little sister, mass murders. I wonder what it really is.

      I’ll bet it’s looting the Treasury.

      • NeutralObserver says:

        And as a happy side effect, when the SHTF next time the security apparatus will be able to crack down so tight that a mouse won’t be able to fart. They won’t be having any of that nonsense like back in 1789 or 1917 or Occupy Wallstreet disturbances next time around.

  12. 873450 says:

    After five years of austerity and an election Iceland changes direction – new government coalition will write down underwater home loans paid for via tax imposed on bailed out banks and haircuts imposed on bailed out investors. IMF, S&P and Fitch are upset.

    Iceland government launches debt relief package for households

    “A centre-right coalition of the Progressive Party and the Independence Party won an election earlier this year on a promise to reduce the financial burden on households … The government said it would finance the measure through tax hikes on financial institutions and a haircut on … overseas investors in Iceland’s failed banks, which collapsed in late 2008. … Those debts are now mainly held by hedge funds, which bought them at a deep discount.”