My morning reads:

• S&P 500 Breaks 1900: Divergences Show Lack of Confirmation (See It Market) but see Stock Markets Had a Rough Second Yesterday (Bloomberg View)
• Why London’s house prices are soaring (Economist)
• Japan GDP hits 5.9% amid massive shopping spree (CNN Money) see also Japan’s GDP growth picks up sharply. (WSJ)
• Where Outperformance Comes From (Motley Fool)

Continues here

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.

15 Responses to “10 Thursday AM Reads”

  1. > The 20 Best Cities on the Planet

    Los Angeles? The traffic is impossible and the heat . . . 101 today.

    • rd says:

      Its a great city if you can travel by helicopter. I think that was the target audience of the survey.

  2. couragesd says:

    Venture Capital Firm Appoints Machine Intelligence As Board Member
    “Hong Kong based venture capital firm Deep Knowledge Ventures (DKV) has appointed a machine learning program to its board. Called VITAL, it’s an “equal member” that will uncover trends “not immediately obvious to humans” in order to make investment recommendations.”
    ….
    http://io9.com/venture-capital-firm-appoints-machine-intelligence-as-b-1576797618

  3. rd says:

    Interesting article about millenials and their (lack of) stock holdings:

    http://blogs.marketwatch.com/thetell/2014/05/14/millennials-are-not-stock-market-fans-but-charles-schwab-sees-them-coming-back-eventually/

    As the parent of several millenials, I have a couple of comments realted to this:

    1. With average student loans of $25k and the consistent recommendation by financial planners to build up several months (usually 6 to 12) of expenses, basically a full year or more of gross income is already allocated for the next few years before they even start working. Not a lot of room to start buying large holdings of stocks. These are also some of the reasons why they aren’t buying houses.

    2. With 10% to 20% unemployment (depending on which stats to look at) and even higher undeer-employment, most millenials know they want to build that cash hoard because they know their employers view them as disposable items. If they want to be entrepreneurs, they also need the cash hoard since they will struggle to get a credit card with more than $1,000 limit.

    3. I have worked with my kids as they move into the work force to get them to build up their cash and to contribute to Roth IRAs, 401ks etc. As a result, the two older ones that have been out for a while are sitting on half a year’s pay in cash and have been contributing to Roth IRAs and 401ks and have anotehr half a year in pay or more sitting in those. And no, they are not thinking of buying a house soon.

    4. T Rowe Price has a great program to contribute as little as $50/month with no other starting minimum into a Roth or Regular IRA if you do it as an automatic debit from your bank account. One of my kids started using this in the depths of the financial crisis to start building small retirement savings while also saving cash. This has started to build up into a tidy nest egg and signfiicantly more than $50/month is put into it at this time. Since the expenses of the Target Date fund are relatively low while being well-diversified with decent performance, it is possible that T Rowe Price has gotten a customer for life simply by offering something appropriate for somebody starting out small. There should be a lesson for that somewhere in the financial sector marketing handbook.

    5. The other kid was saving lots of cash and so had enough to put it into a Vanguard Roth IRA in chunks well above the minimum amount required.

    6. Both have ok, but not great options for 401ks at work, so they are putting money into those mainly to get the employer’s match. It is highly likely that those will get transferred into Vanguard or similar accounts down the road assuming they leave those employers to have lower expenses. There could be a lesson in that for the financial marketers as well.

    • rd says:

      More beatings on Millenials and Gen X for being conservative.:

      http://money.cnn.com/2014/04/01/investing/hoarding-cash.moneymag/index.html

      The complaint is that people in their 30s with $100k+ have 42% in cash. Apparently, having the rest of their funds in investable assets (I presume mainly stocks) means they are “conservative”.The comparison is made with professional money managers who only have less than 5% cash in their accounts. I am sure that if the surveyed individuals were able to get 1% of somebody elses money, they too would be fine with having the other persons money in things other than cash. These types of false analogies are very annoying from a logic perspective.

      I would assume though that many of these people are quite comfortable with $40k or so cash available to them if there is a job loss, roof needs repair, purchase of a car, house downpayment etc. They should be lauded for having $40 k in cash while still having a bunch of other invested assets. If more people had these finances in their 30s, the future retirement crisis would probably disappear.

      My guess is that many of these people will end up holding their cash stake relatively stable as they age while their non-cash investable assets grow as they save and invest more, especially in retirement accounts.

  4. DeDude says:

    Not surprised that the SEC finds that private equity companies are run by swindlers. The surprising thing is that we allow public pension fund managers to hand our taxpayers money to those swindlers. After all who covers the shortfall after the public pension fund has been robbed by these sociopaths?

  5. willid3 says:

    publish executive pay?

    http://qz.com/209685/abramson/

  6. DeDude says:

    Talk about criminals persecuting the victim:

    http://www.cnn.com/2014/05/15/politics/va-scandal-eric-shinseki-preview/

    Maybe Shinseki should be “mad as hell” at congress. The problem at the VA system begins with underfunding. We began two wars that produced a huge number of sick veterans for the VA system. But not nearly enough resources were allocated to take care of them. Then we get long waiting times (although for many specialties not as long as waits outside the VA). The response is a stupid mandate to not have anybody waiting over 90 days, but without funding to hire more doctors. So the result is that someone who can easily wait over 90 days is pushed in at day 89 in front of someone who have an urgent need to see a doctor but who have not yet waited 90 days. Talk about misallocated resources and bean counters taking decisions away from doctors. Doctors and nurses waste huge amounts of time trying to get non-compliant and disinterested patients to come in before the “deadline”, rather than helping sick patients who can, will, and desperately need, to be helped. Have we not yet learned that when bean counters take over and enforce their “metrics”, it becomes all about the beans and metrics – and the quality goes to hell?

  7. rd says:

    If you had to ID two things that account for 25% of California’s water consumption, would you have guessed almonds and alfalfa?

    http://www.slate.com/articles/technology/future_tense/2014/05/_10_percent_of_california_s_water_goes_to_almond_farming.html

  8. VennData says:

    US helth care is much worse than Candian health care on many metrics. Example:

    ​”…Canadians and Europeans also live longer, on average, than Americans do. Their children are less likely to die than ours. American women are twice as likely to die as a result of pregnancy or childbirth as Canadian women…”​

    http://www.nytimes.com/2014/05/15/opinion/kristof-its-now-the-canadian-dream.html

    ​US politicians and voters who prefer to go back to the pre-existing condition, life-time cap era need to stand up and say that they are ideological and do not care about the data.

    GOP Stand up and say you don’t care about the data. It’s time.

  9. rd says:

    I wonder if stopping work on $18 billion worth of transportation projects in August would raise unemployment and increase the odds of recession?

    http://www.slate.com/articles/news_and_politics/politics/2014/05/highway_trust_fund_gas_tax_washington_is_refusing_to_even_consider_the_only.html

  10. VennData says:

    Real Koch Facts

    http://realkochfacts.com/

    Find out how they’re spending that $125 million to convince your neighbor what isn’t so.

  11. Jojo says:

    Biggest NSA leaks are yet to come, Glenn Greenwald tells Al Jazeera
    Former Guardian journalist speaks to Al Jazeera’s John Seigenthaler about NSA leaks and Edward Snowden’s life in Russia

    May 14, 2014

    Journalist Glenn Greenwald, who has been at the center of controversy ever since breaking the story about the existence of the expansive National Security Agency (NSA) surveillance program, told Al Jazeera’s John Seigenthaler on Wednesday that there were “many more stories to go” based on the top secret documents taken by former NSA contractor Edward Snowden.

    Greenwald also insisted that despite accusations to the contrary — the Obama administration has repeatedly said that the leaks hurt U.S national security — “nobody has been injured or in any way harmed as a result of our reporting.”

    During the interview, Greenwald also spoke extensively about Snowden, remarking that even though Snowden’s life had “unraveled” from the fallout of the NSA revelations, he was still doing “remarkably well.”

    “Of all the people I know in my life, the one who is most at peace and most fulfilled and probably the happiest is Edward Snowden,” Greenwald told Seigenthaler. “Because he told me recently, he gets to put his head on his pillow every night knowing that he took actions in defense of this principles.”

    http://america.aljazeera.com/articles/2014/5/14/greenwald-nsa-snowden.html