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Monday, April 7, 2014

Some noontime reading


Here's some stuff to read:

New Deal Democrat - weekly economic indicators. The spring rebound continues. Just buy the frickin' S&P and quit whining.

Bespoke - bears wide awake. Because the US economy is doing horrible, like NDD says in the article abov... oh, wait....

Calculated Risk - labour force participation rate update. Bill McBride is utterly fixated on hammering home the idea that demographic trends are important to understanding labour data in the US.

Bespoke - companies with no earnings are faring the worst. Companies that are actually making money weren't doing so bad last month. It's almost as if, once the doubters and doomers realized we were in a new secular bull, they just started trading the same stocks they were trading 15 years ago during the end of the last secular bull.

Reformed Borker (Bork Bork Bork!) - but it's a good company. An important point for the supposed "fundamental" investor:
What [Howard Marks'] career experience so far had told him was that with its Nifty 50 policy, Citibank had invested in “the best companies in America and lost a lot of money.” Then it invested in “the worst companies in America and made a lot of money,” Marks noted, adding that “it shouldn’t take you too long to figure out that success in investing is not a function of what you buy. It’s a function of what you pay.” An asset of high quality, Marks pointed out, can be overpriced and be a bad investment; an asset of low quality can be bought cheaply and be a good investment.
Ritholtz - structure overhang and capex spending. This might be another factor in whether Rosie's capex call turns out right or not; the US will have to eat through a big inventory first. Rosie might, yet again, be falling for the fallacy that "this time is like the last time", when in fact it might be grossly different. Very long academic article, very worth reading.

FT beyond brics - EM fund flows. People (and funds) are pouring money back into EM ETFs, but it's only a bull correction in a secular bear:
“Is EM a good idea? As a trade, right now, it probably is.” So said Bob Baur, chief economist at Principal Global Investors, on a visit to beyondbrics this week. “But the long-term trend for EM is still structural headwinds, excess capacity and squeezed profits.”

In other words, EM assets are enjoying a correction.
Reuters - Modi advisers dream of a Thatcherite revolution. Oh swell. Hey, India has a lot to fix; but union-busting and a regressive poll tax isn't what India needs.

Mineweb - Indian banks promoting gold-backed loans. This is very bad for gold; Indian farmers hold a big share of the world's gold, and you don't want that puked into the market every time there's a drought. Or even puked on the market as it's collected, to be replaced by IOUs backing loans. Which is what will happen, because what bank will take gold collateral on a loan and then hold it escrowed in a safe when they can sell the gold, leverage the cash, and earn a profit on the cash til the gold needs to be replaced, the way banks normally do things?

ESPN - Raiderette cheerleader sues for pay. Apparently, NFL cheerleaders aren't actually paid anything. That violates California labour law. Pretty open-and-shut case, no? Either labour law counts or it doesn't.


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