10 Friday AM Reads

Good Friday morn. Heckuva week, but its almost over. To tide you til the weekend, here are our morning train reads:

• Behold The Carnage: Hedge Funds Most Short The Swiss Franc Since June 2013 (Zero Hedge) see also Top 10 Hedge Fund Trends for 2015 (All About Alpha)
• 29 Charts Worth Your Time (CFA Institute)
• U.S. companies attracted most venture capital money in 2014 since 2000 (Washington Post) but see Starved of Financing, New Businesses Are in Decline (Gallup)
• The ECB’s (Losing) Battle Against Deflation (MoneyBeat)
• Gold Shines as Traders Seek Safety From SNB’s Shock Move (WSJ)

Continues here


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Discussions found on the web:
  1. Concerned Neighbour commented on Jan 16

    I must say I’m experiencing a fair amount of schadenfreude over the Swiss franc affair. The number of “professionals” out there behaving like petulant children in the aftermath doesn’t surprise me. In my opinion, these people were in clear need of a reminder that they, too, live in the real world. I have no sympathy for people that make reckless currency trades.

    On another note, today’s concoction of awful economic data may be just what’s needed to eliminate all this week’s losses. We shall see…

    • rd commented on Jan 16

      The Swiss “crisis” is just further proof of the over-financialization of the world and over-leveraging of the financial system. A country of 8 million people that makes expensive watches, produces some good cheeses and chocolates, and provides bank accounts to drug lords, tax evaders, and Third World despots should not be able to “roil the markets”.

      The problem is coming from currency trades with 20:1 leverage that are expecting a sure thing, similar to the MBS problem of the mid-2000s. The falling trading revenues and profits at the major banks is indicating that the traders are probably going to take on more leverage and more risk in order to make short-term trading bucks. That is probably not going to end well. Unfortunately, many of the institutions are backed by government guarantees now unlike 7 years ago, so it will be the world’s taxpayers that are going to take it on the chin.

    • VennData commented on Jan 16

      When you say “…today’s concoction of awful economic data…” are you including all the data? earnings, sentiment, market movements?

      No. You’re not.

    • Concerned Neighbour commented on Jan 16

      What, you aren’t going to congratulate me on my miraculous foresight?

      It’s funny that you would lump in sentiment so innocently, when in fact sentiment is all that matters, especially central bank sentiment. And we got stronger hints that ECB QE will be happening, which is great because now we can continue to ignore fundamentals for months to come. The diagonal up algos should have us at 2500 on the S&P 500 by September.

  2. RW commented on Jan 16

    This is probably a long weekend read but still worth mentioning on a Friday morning. Even a quick browse reveals how many states not only stick it to the poor and weak but make ’em pay for the privilege. Wait ’till you see the “Terrible Ten;” most not surprising but a couple will surely raise an eyebrow.

    Who Pays? 5th Edition

    A Distributional Analysis of the Tax Systems in All Fifty States (the fifth edition of the report) assesses the fairness of state and local tax systems …It discusses important features of each state’s tax system and includes detailed state-by-state profiles that provide essential baseline data to help lawmakers understand the effect tax reform proposals will have on constituents at all income levels.

    The report includes these main findings:

    • Virtually every state tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families. …

    • The lower one’s income, the higher one’s overall effective state and local tax rate. …

    • [seven more myths exploded] ….

    • willid3 commented on Jan 16

      you would think democrats would latch on this meme. they could be in favor of cutting the total tax burden on the 99%. thats an easier rebutal to the always cutting taxs crowd, who really never seem to cut taxs for any but the 1`%

    • ilsm commented on Jan 16

      Cutting the 99% taxes would be best done by reinstating level of revenue sharing for states and municipalities to before Bush 43 levels. The part of the 5% GDP going down the pentagon drain could be taken for this.

  3. VennData commented on Jan 16

    Cruz Immigration Crusade Has Republicans Fretting Over Backlash


    The selfish, impatient Latino “Leaders” and “Activists” who “Broke with Obama” were ignorant. They’d better be out there in full force supporting The President and apologizing.


    • rd commented on Jan 16

      At least Cruz won’t be able to become President as he is not a “natural-born citizen” per the definition used by many in the Republican party.

      Although it is possible that his birth certificate was forged in a major conspiracy to deprive him of his right to run for the Presidency and he was actually born in the US instead of Canada.

    • willid3 commented on Jan 16

      of course it was!

    • ilsm commented on Jan 16

      Faux News is ranting about amnestied immigrants getting EITC!!!!

  4. RW commented on Jan 16

    There are a number of reasons job openings don’t get filled but one that I haven’t seen much discussed is how many employers (or their HR depts) use outdated hiring practices and fail to employ available technologies to efficiently seek and vett prospective employees. I was reminded of this by an article I read over a year ago and linked to but forgot for a time. The article focuses on lower wage/lower skill retail jobs but I would not be surprised if the problem is wider spread than that.

    There Are 4 Million U.S. Job Openings: Why Are The Positions Unfilled? (Forbes: June, 2013)

    If you’re paying attention to the U.S.’s economic recovery, you’ll probably know that there are about 11 million unemployed citizens and strong disagreements about how to create more jobs. What you may not know is that there are actually four million open jobs waiting to be filled, and that American businesses could be filling more of those jobs – if they better utilized technology. …

    To better understand this, I recently put myself through the job application process as a walk-in candidate with a few well-known global brands in New York City. ….

    • ilsm commented on Jan 16

      4 million opening looking for excuses to hire H1B’s.

    • rd commented on Jan 16

      Two of my kids got permanent jobs through temp agencies (about the only way for a millennial to get a job in 2008-2011). More companies are using them as a way to vet employees before bringing them on full-time. You work for the temp agency who can put you into a variety of jobs. As you demonstrate skills and the ability to show up on time, you get put into better and better openings with “rent-to-own” potential. Once an employee and a an employer figure out they are a fit, then the employer takes the employee on full-time on a permanent basis with very little HR input.

    • marketmap commented on Jan 18

      As shown on chart 5, in making a couple of allocation decisions a year, on average, the return is magnified X3. As Fama and French factors ( beta, size, and value) add “value” premium to the portfolio, modern tactical allocation adds further value premium ( the “undiscovered” factor) and risk is mitigated.

    • WallaWalla commented on Jan 16

      My new job has me interacting with HR departments all over the country.

      Most HR professionals do not have a seat at the table so-to-say. Their requests for tech improvements are seen as ‘wants’ rather than ‘needs’. The majority of HR pros are well equipped with ‘soft’ skills rather than the ‘hard’ skills needed to communicate with the c-suite. They speak a different language in many ways, and so the decision makers do not seem to understand the need to improve these aspects of their business.

      So many problems are associated with this. Why did this person leave our company after we trained him? Instead of looking into why the person left (perhaps the companies comp package was lagging the market?), the execs say, ‘well there’s no ROI for training so don’t bother. Only hire people who need no training’…. And then you end up with 4mil seemingly unfillable positions.

      “Train people so they can leave. Compensate them so they’ll stay.” – Richard Branson

  5. wally commented on Jan 16

    “The ECB’s (Losing) Battle Against Deflation”
    There’s no battle going on – just passive acceptance.

  6. VennData commented on Jan 16

    Why do web outlets not have the same title in their auto-send as the title on their article page? Like:


    The headline is “The Worst Thing You Can Order At 20 Fast Food Chains”

    But you hit the handy-dandy “Send this link with Gmail” Extension and you get :

    “Unhealthy Fast Food”

    Now I live in Chicago – though not everybody believes it – and we got a new Shake Shack and there’s always a line and my drinking buddies are laughing about how people stand in lines for burgers and have a thing were we impulse to Shake Shake, meet there, and snicker at everyone in the line, go to any number of Chicago Taverns and get bombed for lunch.

    So I want to send this link to a bud, and loan in the body “Hey! This is the worst thing we can get a Shake Shack, let’s meet and get it, though KNOWING that we are going to go there, pretend to be frustrated by the line and got somewhere else.

    And then I get the “Unhealthy Fast Food” in the email, have to go back and cut and paste the title I want, removed the “READ MORE” link etc. That’s totally different than “The Worst Thing You Can Order At 20 Fast Food Chains”

    Why not make it easy on your readers? I mean I’m sending you new readers? Why muck that up?

    P.S. I know Shake Shake is good. I’ve been to an NYC location. And they happily combine the Chocolate and Peanut Butter into a shake for me, that’s delicious, though I can’t imbibe calories for a couple of days afterwards. I’m not picking on them. This is an internet-wide problem here I addressing. An opportunity to make some bold, society-wide efficiency gains. Who’s in?

    • Jojo commented on Jan 16

      “Why do web outlets not have the same title in their auto-send as the title on their article page?”
      Yeah. Same thing in magazines/newspapers, etc. Read an article in a magazine, then try going to the website to search for a copy of it. You generally will not get any hits. The best way to search is the author’s name and the first few words of the article.

      Someone once explained that it has something to do with the way journalism works with different people and editors wanting to leave their mark on a story.

  7. Willy2 commented on Jan 16

    I was long Yen & short EUR. Didn’t expect the SNB move (but it makes sense) but that move also gave the Eur/Yen a big push lower. Thanks, SNB !!!!

    • Willy2 commented on Jan 16

      Doesn’t bode well for the USD & Yen in the (near (??)) future. I assume those two currencies will move (MUCH) higher as well.

      I wouldn’t be surprised to see the Eur/USD go down to say 0.80, and the USD/Yen go down to say 55 or 65. Just imagine what that would mean for the Eur/Yen rate (currently at ~ 136).

    • Willy2 commented on Jan 16

      When Is the BoJ going to end the increase of their balance sheet (a.k.a. Abenomics) ?

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