My afternoon train reads:

• Why Europe May Gain the Edge for Investors (NY Times)
• Alpha Addict: The Amazing Career of Leon Cooperman (CNBC)
• When Beliefs and Facts Collide (NY Times)
• Do optimists or pessimists manage their money better? (Yahoo Finance) see also Economists have a lot to learn from ‘The Big Bang Theory’ (FT)
• People Hate Bankers Because People Are Ignorant (Bloomberg View)
• The Difficulty in Holding Executives Accountable (DealBook)
• Limousine liberalism’s good works (WaPo)
• State’s job growth defies predictions after tax increases (Sacramento Bee)
• Apple Readies a Big Bet on Big-Screen Phones (WSJ)
• 22 Goyim Who Must Be Stopped (Buzzfeed)

What are you reading?

Markets Don’t Dwell on Bad News

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.

12 Responses to “10 Tuesday PM Reads”

  1. swag says:

    weird Al Yankovic – “Mission Statement”

  2. rd says:

    The biggest difficulty in holding executives accountable is the belief that the can’t be found accountable (presumably that is why they are paid so much).

    The BS is a classic example. Several years ago there were stories everywhere of forged notary public signatures etc. that caused some judges to throw out foreclosures. However, I never heard of any prosecutions over this. One forgery would generally just be a misdemeanor but when it grows into the thousands, it becomes much more than that. However, it was clear that people knew that beginning to look would likely be like tugging at the piece of yarn that eventually unravels the sweater. A classic technique for going after organized crime is to get a low echelon person to roll over and provide the evidence to work up the food chain. The financial system doesn’t have a well structured omerta, so getting people to roll in the face of incontrovertible evidence like forged signatures would be simple.

    It is amazing what people will put in writing. The initiation of discovery would likely uncover smoking guns in many of the major crises that we have had that were not investigated. We have created a system where fines are now negotiated to be just another line item expense. That is not an effective deterrent, especially if the profits are larger than the fine. More investigations, likely leading to prosecutions of individuals, are essential to stop bad behavior.

    • willid3 says:

      well you know we have a history of not prosecuting them, even if they have gotten people killed (not just GM, but back in the 1920s there was a massacre where workers and their families were killed because they were on strike, course no one prosecuted ). we have had one occurrence when we actually did prosecute or at least threaten too, back in the 1920s. but that was more of a anomaly than any thing else.
      and most of the time its because our government doesnt work for the people. not really.

    • Woof says:

      Re: Bloomberg View. Isn’t it the case that most mutual funds, after fees, underperform the market? If that’s true, isn’t it the case that an individual stock bought at random will out perform a randomly selected mutual fund?


      ADMIN: No. A broad Index will outpform most mutual funds net of fees, a single stock may or may not.

      • Woof says:

        I agree. But that seems to prove my point. Picking a single stock is risky. But if everyone did it at random they would essentially recreate a broad index in total. The ‘average’ person would then outperform the mutual fund.

        I am not advocating going entirely undiversified, but as they framed the question I still believe that’s the answer.


        ADMIN: By your logic, if you had one hand in freezing liquid nitrogen, and the other in molten hot lava, on average you would be okay. #FAIL

      • Woof says:

        No, not really. I think an example that is closer to the situation presented by Bloomberg is:

        Say you are presented with the ‘opportunity’ draw pick one bill from a bag called ‘stocks’ containing 55 $1 bills, 25 $5 bills, 15 $10 bills, 4 $20 bills, and 1 $100 bill (expected value $5.10) OR picking from a bag called ‘mutual funds’ that has 10 $1 bills and 85 $5 bills and 5 $10 bills (expected value $4.85). Logically (I think) one should draw from the bag with the higher expected value even though many of the people that do so will end up with less than those that draw from the one with the lower expected value.

        But, if I understand some of what’s been written here over the years, the universe of mutual funds has a lower expected value than the universe of stocks. And the best answer to the question as framed is that one should take a stock.

        Please don’t imagine that I am advising that anyone should randomly pick one stock to put all their money into. That would be asinine. But if everyone did as Bloomberg recommends, the expected return for everyone as a whole (except mutual fund managers) would be lower than if they picked stocks, wouldn’t it?

        I won’t be looking back to see if you comment again. Don’t really care if you post this or not. But I found your last reply to be less than respectful and thought maybe if I explained myself better you might see where I was coming from,

  3. Init4good says:

    RE: People Hate Bankers Because People Are Ignorant

    Same reason they hate the “government.”

  4. CD4P says:

    Wow. That “People Hate Bankers … ” piece is really something. It completely neglects Time magazine asking the public whether they’re missing out on the boom and the N.A.R. using plenty of TV commercials to pitch the virtues of home ownership. Or president Bush encouraging home ownership. Simply put there were plenty of pushers affecting societal behavior, driving the bubble. And helping out were affordability products created to put people in homes they couldn’t afford. And what did “Robo signing” have to do with financial illiteracy on the part of the public?

    Mr. Leonid Bershidsky, enjoy:

  5. winstongator says:

    @hating bankers because of ignorance:
    You could more easily stump the public with any basic science questions, let alone any technical engineering questions. People are bad at science and math, so we should pay bankers 10-100x what they need to be paid? The highest potential compensation in tech is at startups, where workers take appreciable risks of lower salary in exchange for stock option benefits. Salaries and stock benefits are very good at places like Apple, Google & Facebook, but answer this: how many readers of this blog could answer all 3 questions? How many have the technical skills to work at a high tech firm?

  6. rd says:

    American small investor portfolios are becoming more diversified, which should be a good thing, even if they may not know it.

  7. DeDude says:

    My biggest problem with this complaint about “Limousine liberalism” is that it is based on an assumption that we all should be sociopaths who would always and exclusively work for ourselves with no consideration for fairness towards others. It is actually particularly praiseworthy when someone who benefits from a state of affairs speaks up against it rather than twisting themselves into a knot trying to come up with justifications that doesn’t sound selfish.