Good Monday morning. Let’s jump right in with our daily train reads:
• Remaining Rational in an Irrational Marketplace (Emotional Investor) see also Rooting For a Bear Market? (A Wealth of Common Sense)
• How Many Mutual Funds Routinely Rout the Market? Zero (NYT)
• Uh-Oh: 401(k) Stock Allocation Highest Since 2007 (Dan Lyons)
• Learning From a Lagging Mutual Fund: The once-highflying Hussman Strategic Growth Fund weathered the crisis but missed the rally (WSJ) see also A Dozen Things I’ve Learned from Morgan Housel about Investing and Life (25iq)
• Shake Shack Founder Says In-N-Out “Way, Way Upped The Fast Food Game” (Buzzfeed)
Chasm Grows Within G.O.P. Over Spending
“…The congressional push this week to secure the first Republican budget plan in nearly a decade is revealing a chasm between fiscal hawks determined to maintain strict spending caps and defense hawks who are threatening to derail any budget that does not ensure an increase for the military…”
http://mobile.nytimes.com/2015/03/16/us/politics/budget-battle-in-gop-is-test-of-governance.html
After six years of their own no vote blaming of government “Not having a budget” the GOP can’t reconcile their sequester cuts to Defense spending. Oh they’ll blame Obama, Pelosi’s jet trips, Reid. But if you don’t understand that the problem in America is the GOP, you are watching Fox and reading the WSJ too much. (Any is too much.)
So you’re either a budget cutter, small debt small deficit person OR military spender.
Choose one.
The Republicans are complete clowns
Bob Shiller: How Scary is the Bond Market?
http://www.project-syndicate.org/commentary/bond-market-crash-contagion-by-robert-j–shiller-2015-03
Not very scary according to Shiller; e.g. “…we will not see a crash in the bond market unless central banks tighten monetary policy very sharply (by hiking short-term interest rates) or there is a major spike in inflation.”
Draft Newt!
If you Republicans are sick of Trump mucking up your primary, vote for him. Only once he’s won a place on a ballot will he demure and back down so he can manage his daddy’s Real Estate and his clever, interesting, and intellectually rewarding TV show.
Because well, frankly GOP, you ain’t gonna win this next Presidential election. Shoot for 2020 Get Trump out of the way and jettison the snakehandler anti-science types and you’ve got a shot. Because recall the reason you have congress is gerrymandering.
In case you wondered if public officials are focused on protecting children’s health:
http://www.usatoday.com/story/news/2015/03/15/artificial-turf-health-safety-studies/24727111/
The irony of the artificial turf debate regarding unsafe levels of lead is that the wealthier a community, the more likely it is they got it installed earlier for children’s playing surfaces. So the same parental groups that are not vaccinating their children based on disproven theories have actively raised money in their communities to install a lead health hazard, despite lead having one of the most proven connections to a multitude of health problems, especially brain and neural system. The elected institutions in those areas are resisting testing because they don’t want to find out.
Loretta Lynch nomination vote stalled as Republicans announce new delay
http://www.theguardian.com/us-news/2015/mar/16/loretta-lynch-attorney-general-vote-delay-republicans
What grade would you give Republicans at running Congress?
Macau’s GDP shrinks 0.4 percent in 2014 – down 17 percent in Q4
http://www.macaunews.com.mo/content/view/3281/53/lang,english/
Austerity works! Government Mandated moralism works! Gotta love the Chinese wealth shamers.
GOP, tell us how to live our private lives! GIve us austerity! Why don’t you rock-ribbed Republicans do your personal tax inversion and move to China where they are trying your values-voter experiments.
Bye. Don’t forget to write.
Cruz: Lift all contribution limits on campaign cash
“Unlimited political cash would give rank-and-file conservative activists greater sway in picking their representatives, including the president, White House hopeful Ted Cruz told New Hampshire voters on Sunday.”
http://news.yahoo.com/texas-cruz-lift-contribution-limits-campaign-cash-193953501–election.html
Except That’s not what the facts say.
http://www.politico.com/story/2014/09/democrats-big-donors-2014-elections-111225.html
Imagine that a Right Wing Kook from Texas getting the facts wrong.
He’s not from Texas. He’s from Calgary, Alberta, Canada.
So can he even run for president then?
Not according to many Republicans, but the Democrats are fine with it.
Although since Canada isn’t Kenya, that is probably an exception that the birther movement will make since Canada is almost the USA.
The Marijuana Analyst Class vs. the Marijuana User Class
What this [chart] means practically is that the public debate about marijuana is shaped almost exclusively by people who don’t live and work in the world where 5/6 of the drug is actually consumed.
An interesting piece by Robert Shiller about the low probability of a bond market crash in the near-future. He especially thinks it is unlikely that a bond market “crash” would coincide with a stock market crash unless the fed really jacks up short-term interest rates which would require a significant spike in inflation to justify.
http://www.marketwatch.com/story/how-scary-is-the-bond-market-2015-03-16
WRT Hussman’s Strategic Growth Fund, I sold all my shares in 2009 when it became clear from Hussman’s weekly commentary that he was persistently misunderstanding the macroeconomic situation and this was, quite naturally, effecting his analysis and allocation decisions; see the Treasury View; or for a longer, more detailed walk, Fama’s Fallacy, Take I, Take II, Take III and Take IV: The Decline of the Chicago School.
No dis on Hussman: It took me a long time to wrap my head around some of this stuff and even longer (too long frankly) to fully correct my error(s) WRT asset allocation.
1 trader on CNBC said that his kids are spending their gas savings on upgrading their Obamacare plans.
That slow down in volume was a collective aneurysm going through their stay-at-home trader demographic.
Netanyahu: If I’m elected, there will be no Palestinian state
http://www.haaretz.com/news/israel-election-2015/.premium-1.647212
Here’s the guy the GOP brings in to give us a pep talk on diplomacy.
Here’s the guy the low-information American voter thought gave a “Good speech.”
Here’s the guy that doesn’t get along with our President.
Could it be that the main mechanism that will prevent inflation from growing will be a growth in the savings rate from deleveraging and increased retirement/cash savings?
http://www.marketwatch.com/story/us-economy-still-not-following-script-for-breakout-year-2015-03-15?page=1
Another food worry to go with mercury in fish. Arsenic in rice…
——————
Ask Well: Arsenic in Rice Crackers?
By Deborah Blum
March 13, 2015
Q – Recently, I’ve been reading about the presence of unacceptable levels of arsenic in both brown and white rice. Are rice vinegar and rice crackers also affected?
A – Foods that contain rice, including rice crackers and vinegar, routinely contain some level of arsenic, scientists say, as do products like rice cakes, rice wine and cereals, and snack bars and baking mixes that contain rice flour or bran. But it’s unclear how serious a health risk they pose.
The Food and Drug Administration has a list of rice-containing foods that focuses on inorganic arsenic, considered the most dangerous form of the poison. One reason rice gets so much attention is that the plant is very good at pulling inorganic arsenic from soil and water and storing it in the edible grain.
But levels of contamination vary according to the type of rice and where it is grown. Brown rice, for example, tends to show higher levels than white rice, which is stripped during processing of layers of the grain where arsenic tends to collect. California rice frequently contains less arsenic than that grown in southern states, which tends to have higher levels of arsenic in the soil. Consumer Reports found that basmati rice from India, Pakistan and California had markedly lower levels of arsenic than other varieties.
….
His recommendation: “If you are a person who is eating rice every day, and also snacking on rice products, then that five micrograms from rice crackers becomes significant,” he said. “If once a month, not so much. The idea is to eat a varied diet — and be aware of how much rice you are eating.”
http://well.blogs.nytimes.com/2015/03/13/ask-well-arsenic-in-rice-crackers/
What Happened When Ted Cruz Told a 3 Year Old Girl the ‘World’s On Fire’
http://abcnews.go.com/Politics/happened-ted-cruz-told-year-girl-worlds-fire/story?id=29673686
In the emperor-has-no-clothes moment of a generation Even little kids see how nuts the GOP is.
‘Very few professional investors have actually managed to outperform the rising market consistently over those years. No mutual funds did.’ — NYT
This is a false expectation. Even a system which beats the S&P by an average 5 percentage points annually, outperforms in about 75% of years.
There is no such thing as a market-beating system that outperforms at a steady rate, every month, every year. Might as well search for a perpetual motion machine.