Some reads to keep you busy on this Good Friday morn:

• Did the bull market happen without you? Here’s why (MarketWatch)
• Money Rotates Into Late Cycle Names (All Star Charts) see also Why Stocks Are 43% Too Expensive (Forbes)
• Active managers must work to justify fees (FT)
• Yuan Depreciation Is Deeper Than You Think (Real Time Economics)
• The Economist Was a Rock Star (New Republic)
• Labor Shortage Threatens to Bust the Shale Boom (Bloomberg)
• Merely Rich and Superrich: The Tax Gap Is Narrowing (NY Times) see also Get Used to It: The Rich Do Get Richer (Fiscal Times)
• How Can Yahoo Be Worth Less Than Zero? (Bloomberg View)
• Is Harvard Law prof Cass Sunstein “the most dangerous man in America?”  (The Atlantic)
• The Business of Building Roller Coasters (Priceonomics)

What are you reading?

 
Declining Misery Index Boosting P/E

Source: Dr. Ed’s Blog

 

 

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.

17 Responses to “10 Friday AM Reads”

  1. hue says:

    Larry Summers: Now is the time to rebuild our national infrastructure (Boston Globe) Rebuilding the nation’s airports, highways, and bridges will boost the economy and jobs. … I guess there is zero chance this will happen.

    What America’s internal migration tells us about the death of the mall, and the brand (Quartz) Orange Julius for everybody

    Little White Lies the Internet Told Me (The New Yorker) Squandr – New App Matches You With Others In Vicinity Who Wasted $2.99 On Same App (The Onion)

  2. RW says:

    Our own domestic ‘conservatives’ — I use scarequotes since many if not most who identify with that label these days frequently assert positions more consistent with anarchists, propertarians or reactionaries — tend to just prevaricate flat out while accusing opponents of doing the same but, as Disraeli is supposed to have said, “There are three kinds of lies …”

    Abusing economic analysis: UK Treasury edition

    Ask most people if they think a particular tax – like fuel duty – should be reduced, and they will say yes. If you ask people do you think income taxes should be raised to pay for a cut in fuel duty, you will get a rather different response. So just asking people if they would like one particular tax to be cut without saying how it will be paid for is pretty meaningless. Unless of course your aim is to provide ‘evidence’ that taxes are too high, and you are not too worried about the nature of that evidence.

    There is a slightly more sophisticated version of this trick, and the UK Treasury have just played it. …

    And speaking of the third kind of lie WRT that fatuous Marketwatch article, ‘rd’ nailed it yesterday morning; e.g., “Complaining about how small investors are lagging behind benchmarks for the 1950 to 2013 period is a ridiculous, meaningless comparison. Trading costs and fees for buying and selling stocks, bonds, and mutual funds as well as the annual expense ratios would have meant that the average investor would have typically lagged by a minimum of 1% for most of this period, probably closer to 2%-3% even if they were getting average returns.”

  3. swag says:

    Heinous irony watch: Rogoff said the mistake made by the U.S. and European governments was not realizing the crisis was going to last as long as it did.

    http://yaledailynews.com/blog/2014/04/16/rogoff-talks-financial-crisis/

  4. VennData says:

    Pro-Russia Militant Leader Balks at Terms of Ukraine Pact

    “…​I REFUSE!”

    http://www.nytimes.com/2014/04/19/world/europe/ukraine-russia.html

    And take those stupid masks off. ​

  5. willid3 says:

    ever the rebel, seems its really using a very old way to pay workers. and its worked since very early in our history. just we dont do this much if any at all any more

    http://finance.fortune.cnn.com/2014/04/17/southwest-airlines-profit-sharing-payout-what-capitalism-should-be/?source=yahoo_quote

  6. VennData says:

    Zero Hedge says the unpatriotic kooks who won’t pay grazing rights are heroes for Liberty, part if a “Liberty Movement.”

    http://www.zerohedge.com/news/2014-04-17/guest-post-liberty-movement-rising

    So when these clowns pay what they owe, will the Liberty Movement be dead?

    These asshats are no different from Americans who hide assets offshore. Unpatriotic. Not real Americans.

    Why does Zero Hedge support unpatriotic people? Just because he missed the last 1,200 S&P points?

  7. Jojo says:

    Cityscape: A Journal of Policy Development and Research • Volume 16, Number 1 • 2014
    U.S. Department of Housing and Urban Development • Office of Policy Development and Research
    Congress Should Phase Out the Mortgage Interest Deduction
    Eric Toder
    Urban Institute

    The mortgage interest deduction is one of the most expensive federal tax preferences. The Joint Committee on Taxation (2013) estimated that the deduction will cost about $380 billion from fiscal years 2013 through 2017. Homeowners also benefit from the deduction of real property taxes and the exemption of the first $250,000 ($500,000 for couples) of capital gains on the sale of principal residences.

    Defenders of the mortgage interest deduction claim that it stimulates homeownership, which they argue has many broader benefits to society beyond the benefits to the owners themselves. I argue instead that the case for these “external” social benefits is unproven and that, even if these benefits exist, the mortgage interest deduction is an ineffective tool for increasing homeownership. Instead, the deduction mostly serves as an incentive for middle-income and upper income people to acquire larger and more expensive homes than they otherwise would have purchased. These increased investments in homes that the tax subsidy generates divert resources from business investments with a larger social yield but without a comparable tax subsidy. If promoting homeownership is the goal, a subsidy directed to people who might be choosing between buying and renting would be a more effective tool for doing so.

    http://www.taxpolicycenter.org/UploadedPDF/1001721-congress-should-phase-out-the-MID.pdf

  8. Jojo says:

    Could “Liking” A Brand On Facebook Waive Your Legal Rights?
    Apr 17, 2014 at 10:47am ET by Greg Sterling

    There is a very disturbing trend in the world of corporate terms and conditions. Consumers (and small merchants) are increasingly being forced by fine-print clauses into binding arbitration to resolve disputes with companies.

    The very pro-business US Supreme Court not long ago ruled this was entirely legal.

    What it means as a practical matter is that individuals give up their right to sue in court as well as the right to join together in class action litigation against corporations. The problem is that consumers, even if they’re permitted to sue individually, won’t because they don’t have the motivation or money.

    While class action litigation has certainly been abused it also has enabled consumers to join together to balance their almost complete lack of legal power vs. large corporations. Class actions in one sense have provided a corporate oversight and legal enforcement mechanism that Congress has largely abdicated.

    http://marketingland.com/liking-brand-facebook-waive-legal-rights-80648

  9. S Brennan says:

    From the Vinyard Blog

    Vlad addresses US attempts to punish Russia’s moves to counter Obama’s Ukrainian coup of a democratically [yes, corrupt] elected government…

    Q: “If the West refuses to purchase gas from Russia, how will that affect people’s well-being…

    A: VLADIMIR PUTIN: I have to say that oil and gas revenues make up a large part of the Russian budget revenue. This is a serious component for us in addressing economic development, budget funding for our development programmes and, of course, and meeting of our social commitments to our citizens.

    I’ll tell you what. I am not sure that I’ll get the figures right, but, if my memory serves me correctly, the bulk of oil and gas revenue comes not from gas but from oil. In terms of the dollar equivalent, our oil revenues last year amounted to $191-194 billion and gas revenues to about $28 billion. See the difference? 191 from oil and 28 from gas.

    Oil is sold on world markets. Is there any way to do us harm? One may try. But what would be the result for those who would attempt to do it? First of all, how would this be done? Of all the countries in the world, only Saudi Arabia has the real potential to increase production and thus bring down world prices. Saudi Arabia’s budget assumes a price of $85-$90 per thousand cubic metres.

    Q: KIRILL KLEYMENOV: President Obama has already visited them.

    A: VLADIMIR PUTIN: I’m sorry, I meant oil, not gas. The budget assumes a price of $85-$90 per barrel, and our budget, I think, $90. So, if one goes below $85, Saudi Arabia will be on the losing end and have problems. For us a drop from $90 to $85 is not critical. That is first.

    Second, we are on very good terms with Saudi Arabia. We may, for example, differ in terms of our views on Syria, but we practically have identical positions on the development of the situation in Egypt. There are many other things where we see eye-to-eye.

    I have great respect for the custodian of the two Muslim shrines, the King of Saudi Arabia. He is a very clever and balanced man. I don’t think that our Saudi friends would make any abrupt changes to harm themselves and the Russian economy.

    Furthermore, they are members of OPEC, where we have many supporters. It is not that they have sympathy for us, but that they have their own economic interests and sharply reducing production – which can only be done in a manner agreed upon within OPEC – is a fairly complicated business.

    Finally, in the United States, which is developing shale gas and shale oil production, production costs are very high. These are expensive projects. If world prices tumble, these projects may turn out to be unprofitable, loss-making and the nascent industry may simply die.
    And one last point. Oil is priced and traded in the world in dollars. If prices fall, demand for dollars will plummet and the dollar will start losing its significance as a world currency. There are very many factors involved. The wish to bite us is there, but the opportunities are limited. That said, some damage can be caused.

    Now about gas. We sell gas by pipeline (most of our sales are by pipeline) mainly to the European countries that depend on Russian supplies to cover about 30-35, 34 percent of their needs. Can they stop buying Russian gas altogether? I don’t think that this is possible.

    Some of our neighbours, very good neighbours with which we have very sound relations, such as, for example, Finland…Finland gets 90 percent of its gas from Russia. Some countries that used to be called People’s Democracies in Eastern Europe depend on Russian gas if not for 90 percent, then for 60, 50 or 70 percent of their needs.

    Can supplies be stopped altogether? I think that this is totally unrealistic. But one can do this at one’s own cost, by hurting oneself. However, I cannot imagine such a situation. Therefore, of course, everyone is keen on diversifying their sources of supplies. Europe is talking about greater independence from Russia as a supplier, and similarly we are beginning to talk and act to become less dependent on our consumers.

    However, so far, there is a measure of balance between consumers and suppliers. The only problem is transit countries. And the most dangerous part, of course, is transit via Ukraine with which we have tremendous difficulties in agreeing on energy problems. But I hope that we will be able to bring things back to normal, considering the contracts that have been signed and are functioning.”

    And the proof is in the pudding:

    http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140411_costs.png

  10. Robert M says:

    Calvin and Hobbes for a quote. That is too much information.

  11. rd says:

    A column on Barry’s favorite topic of forecasting:

    http://www.marketwatch.com/story/dont-let-market-pundits-lead-you-astray-2014-04-18

    I love studies that go back to see if anything has really changed in people from 80 years ago.

  12. N says:

    I read the article from J.C. Parets “Money rotates into late cycle names”. The basic thesis is that in the last 90 days the relative performance of the different sectors is what you usually see before a market top: Utilities and Health outperform Financials, Tech, and Industrials. The question that I have is if this always predicts market tops or there are false positives. The author does not answer this question so I investigated myself. In 2013 during the same 90 days (Jan April), the relative performance of the different sectors was actually the same: Utilities and Health outperformed Finance, Tech, and Industrials. And this did not predict a market top, as we all know. It looks like the author failed to mention that THIS particular relative sector performance predicts market tops SOMETIMES and sometimes it does not.

  13. willid3 says:

    wait there is a down side to being Goldman Sachs?
    http://qz.com/198980/the-downside-of-being-goldman-sachs/