Sloppy Market? Blame the Financials

Master technician John Roque of WJB Capital put out a fascinating chart this week, looking at what a drag the financial sector has been on the overall market. John also notes how poorly Goldman Sachs is trading; only AIG (-37% ytd) and HCBK (-27% ytd) have worse year-to-date performance among S&P financials.

If you could magically back out the financials, the market would be at an all time high:


S&P500 Ex-Financials

Category: Economy, Markets, Technical Analysis

A Guide to S&P’s Latest Credit Ratings by Country

click for ginormous graphic via Mint

Category: Analysts, Credit, Digital Media

What Does U.S. Hitting Debt Ceiling Mean ?


U.S. Hits the Debt Ceiling: What Does It All Mean?
Aaron Task
Yahoo Finance, May 16, 2011

Category: Taxes and Policy, Video

Still Home Sick

Still Home Sick By John Mauldin May 16, 2011 ~~~ Everyone is curious about the state of housing in the US. My friend Gary Shilling recently did a lengthy issue on housing as it is today. I asked him to give us a shorter version for Outside the Box, and he graciously did. And you…Read More

Category: Real Estate, Think Tank

Notable Monkeys

Source: (When The What?)

Category: Digital Media, Weekend

Willful Blindness: Why We Ignore the Obvious at Our Peril

Willful Blindness: Why We Ignore the Obvious at Our Peril by Margaret Heffernan looks at some of the more fascinating cognitive failures of the human mind: Denial, Delusion, and Self-Deception.

Humans frequently ignore painful or frightening truths, subconsciously believing that denial can protect us. Instead, our delusions make us ever more vulnerable, and whatever suffering we choose to ignore continues unabated. The implications for policy makers, investors, and just about everyone else are enormous.

The reviews for the book have been outstanding:

• “A call to arms to any whistle-blowers who see what lies ahead and have the courage to speak up.”—Kirkus

• “A thoughtful and entertaining treatise on the seductiveness—and consequences—of ignoring what’s right in front of our eyes … Heffernan’s cogent, riveting look at how we behave at our worst encourages us to strive for our best.”—Publishers Weekly

• “Willful Blindness is an engaging read, packed with cautionary tales ripped from today’s headlines as well as a trove of research on why we often stick our head in the sand. With deft prose and page after page of keen insights, Heffernan shows why we close our eyes to facts that threaten our families, our livelihood, and our self-image—and, even better, she points the way out of the darkness.”—Daniel H. Pink, author of Drive and A Whole New Mind

• “An intelligent and eye-opening look at the pervasiveness of willful blindness across society. Margaret Heffernan presents overwhelming evidence of the need for mindfulness as part of the cure.”—Ellen J. Langer, author of Mindfulness and Counterclockwise: Mindful Health and the Power of Possibility

• “Willful Blindness combines compelling anecdotes, insightful interviews, and convincing scientific evidence to confront the mental distortions that conspire to blind us. Heffernan skillfully shows that by questioning the reasons for our actions and beliefs, we can take positive steps to avoid deluding ourselves.”—Daniel Simons, coauthor of The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us

• “Margaret Heffernan is an unblinking observer of what makes us tick in work and life. This is a book that everyone should read with eyes—and minds—wide open!”—Alan M. Webber, author of Rules of Thumb: 52 Truths for Winning at Business Without Losing Your Self

• “Heffernan speaks with a relentlessly constructive voice, brave curiosity, a passion for truth, and the practical mindset of someone who has built and led successful organizations herself. She motivates us to resist our own tendency to ignore the truths around us, and provides the insights and tools for us to empower others to do the same.”—Mary C. Gentile, Ph.D., author of Giving Voice to Values: How to Speak Your Mind When You Know What’s Right

Book Intro, Chapters 1 and 10 after the jump . . .

Read More

Category: Books, Psychology

Reprofiling and Stagflating

The head of the euro zone finance ministers, Jean-Claude Junker, has introduced a new word in the lexicon of credit markets and debt restructuring and its called “reprofiling.” It seems to be the politically correct way of saying “extend maturities” and it’s what the EU seems to be leaning towards with Greece. If it occurs,…Read More

Category: MacroNotes

Tuesday Early Morning Reads

The latest additions to my Instapaper, for your reading pleasure: • An Ominous-Looking Market Top (Comstock) • Economics for Sale (Economix) • Hussman: Hanging Around, Hoping to Get Lucky (Hussman Funds) • Is Portfolio Theory Harming Your Portfolio? (SSRN) • Old ideas that never die, monetary policy edition (Matt Rognlie) • Anti-Global Warming Study gets…Read More

Category: Financial Press

Combining Schumpeter and Keynes to Boost Innovation

Giovanni Dosi: Combining Schumpeter and Keynes to Boost Innovation:

Parts 2-4 can be seen here

Category: Video

Two Red Flags: Russell and the Hang Seng

We note that the Russell 2000 broke its 50-day moving average today and the Hang Seng pierced its 200-day last night.  We also just posted the S&P 500 looks ready to test its 50-day. These two indices are key indicators of the global markets’ propensity to take risk.   We’ve written several times of how the…Read More

Category: Technical Analysis