Take it easy this morning and complement your brunch with some reads:

• 4 things doom-and-gloomers got totally wrong (MarketWatch)
• Goldman: From ‘vampire squid’ to plain boring (The Globe and Mail) see also Scenes from an Independent Brokerage Firm (Reformed Broker)
• The Perils of Managed Portfolios (Barron’s)
• When moderation is no virtue (Economist)
• It’s Time to Kill Surface (stratechery) see also Technology: Think local, act global (Asymco)
• 21 things ACA does that you didn’t know about (Vox)
• Darwin’s Neuroscientist: Gerald M. Edelman, 1929-2014 (NeuroBanter)
• Six Ways to Separate Lies From Statistics (Bloomberg View)
• Admiral McRaven: 10 Lessons to Help Change the World (Alcalde)
• BMW M3 and BMW M4 Inside: smartly light, rigid, precise. (BMW M Power)

Bloody Mary or Mimosa?



Tech Firms’ Cash Piles Cool Fears of Meltdown

Source: WSJ

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.

11 Responses to “10 Sunday Reads”

  1. RW says:

    Kocherlakota’s Case for Price Level Targeting (ht WCEG)

    … The low inflation in the United States tells us that resources are being wasted. What exactly are these wasted resources?…. The biggest and most disturbing answer is our fellow Americans…. The FOMC is undershooting its price stability objective and is expected to continue to do so. But we should all keep in mind that this outcome–and especially the forecast for continued undershootin–typically means that the FOMC is also underperforming on its other objective of promoting maximum employment….

  2. constantnormal says:

    @BR — the link on the (rather good) Bloomberg View piece “Six Ways to Separate Lies From Statistics” is wrong, it should be:

  3. RW says:

    Seen on the intertubes:

    Plot idea: 97% of the world’s scientists contrive an environmental crisis but are exposed by a plucky band of billionaires and oil companies.

    Think it will sell?

  4. RW says:

    Switching gears

    Will You Still Study Me When I’m 64?

    “When older patients seek out health care, they are unwittingly enrolling in an experiment: Will medical procedures that have been proved effective mainly on the young also help the elderly?”

    That’s the first sentence in the editorial that my colleague Dr. Donna Zulman and I have in the New York Times today. We discuss the exclusion of older patients from many medical research studies and how it both compromises quality of care and is socially unjust. It’s a specific example of the more general problem I have discussed before: The people who are enrolled in the research studies that guide the provision of health care are markedly different from real-world patients on many dimensions.

    NB: Some years ago my 87 year-old father fell badly, fracturing two ribs, and in hospital became severely delusional from pain-killers; so much so that he was given anti-psychotics which also made him paranoid. He lived another ten years but his delusions and paranoia never cleared up and he ultimately had to be institutionalized. I learned later his was a recognized phenomenon — “hospital delirium” — and not uncommon among elderly patients who could respond unpredictably to normally prescribed adult-level drug dosages.

    The broader point being something that is easy to forget when just looking at a numeric data series: those numbers are conditional.

  5. mpetrosian says:

    I read all the horror stories about non traded REITS before moving from Merrill to an independent. Then I got a chance to dig in and find out for myself. Truth is that most suck and a few are very good. Clients don’t really give a rats ass what fees are if their experience has been that they give you 100K and then in a few years get back say 125K back plus dividends earned. How much would it cost to invest in real estate on your own? Closing costs, maintenance, management, taxes, on and on. Understand a non traded REIT balance sheet and the accounting tricks they use. Understand the funding hurdles, use of leverage, their financing channels, etc. Once in awhile a good one comes around.

  6. 873450 says:

    FOMC can only put food on the table.

  7. > 4 things doom-and-gloomers got totally wrong

    Certainly, Howard Gold’s fellow MarketWatch contributor Paul Farrell deserved a special mention . . .

  8. Adam Jones says:

    The four “totally wrong” things article was pretty meh.

    I mean, sure, the people who asserted those outcomes without any doubt have massive overconfidence issues, but all four theories, even if not always plausible, were not impossible either.

    There is a difference between saying something is a concern and saying something is inevitable. The author seems to tar everyone with the same brush.

    But worse is grouping the euro in with the other three. As Michael Pettis has continued to argue, *none* of the eurozone imbalances have been resolved. In fact, many of them are growing. The one things euroskeptics got almost “totally wrong” was the tolerance for voters in the periphery for depression-level unemployment. That tolerance *still* surprises me, but I’m not fluent enough in local politics to know why this bizarre trend to vote for euro-preservation over self-preservation has perpetuated itself.

    Where the Dow is going, where gold is going, where the dollar and interest rates are going, these things are hard to know. To see that the eurozone has very large, atypical balance of trade and unemployment issues that will be nearly impossible to solve without a breakup or massively more fiscal integration is not so difficult. When that will happen? I have no idea.

  9. intlacct says:

    FT does a Reinhardt and Rogoff takedown on Piketty:


    My takeaway:

    1. inequality is clearly an issue,
    2. likely definitely rising (in the US at least – strangely the biggest argument against that for conservatives would be the advent of the Affordable Care Act, IMO),
    3. but I love when people get down in the weeds to show how little there is there.

  10. intlacct says:

    re: non-traded REITs in Josh’s piece – I have heard of these and they sounded confiscatory. If you want 7%, why not buy an O&G royalty trust?

  11. Laocoon says:

    re Indexing vs active trading – if “everyone” is indexed, then what determines stock prices? Is there a trading volume point at which prices become artificial? Combine indexing with HFT and what volume is necessary to determine prices based on opinion of fundamentals? If a substantial majority of stock is held in index funds, where trading is limited to maintaining the index (even if a broad-based one), will that limit the rest of the trading volume? What would the implications be? Would that make stock prices (and the indexes) more volatile and perhaps create some artificial price levels because of thin markets? I’m not smart enough to figure this out, but I do wonder what happens if the indexing trend continues to capture more assets and the markets get to a marginal place, perhaps a tipping point of volatility that in turn could be amped up by HFT algos.