Good Monday morning. Markets are closed for the Martin Luther King Day holiday int he states — so no train for me — but no worries, we still have your reads queued up:
• No One Was Supposed to Lose This Much Money on Swiss Francs (Bloomberg View)
• The long and short of it: How bull and bear markets fight and co-exist (Financial Post)
• The casualties of cheap oil (WonkBlog) but see Finance can cope with cheap oil (FT)
• California Zooms Past Russia, Italy and Soon Brazil in Economic Might (Bloomberg)
• The Next Growth Area in Energy Has Nothing to Do With Oil, Wind, or Solar. It’s Batteries. (Slate)
• A 12-Hour Window for a Healthy Weight (Well) see also Minifasting: How Occasionally Skipping Meals May Boost Health (NPR)
• Experience is Simply the Name We Give Our Mistakes (Notes from the Hedge)
• Cruz Immigration Crusade Has Republicans Fretting Over Backlash (Bloomberg)
• Pope Francis Is Taking Action On Climate Change (Business Insider) see also New Pew survey shows Americans might finally be getting serious about global warming (WonkBlog)
• Formation-flying satellites link up to create giant virtual telescope in orbit (The Guardian)
What are you reading?
Falling Rates Spur Revival in Market for Mortgages
Source: WSJ
Hollande: ECB will pull trigger on QE plans this week
http://www.marketwatch.com/story/hollande-ecb-will-pull-trigger-on-qe-plans-this-week-2015-01-19
I can’t believe any sane person would look at the EU today – that place of surging asset prices and ridiculously low, in some case negative, rates – and conclude the problem is not enough QE. As the saying goes, when your only tool is a hammer…
Gee, I wonder what the diagonal up algos will take us to on this “surprise” announcement Thursday. After all, it’s not like this hasn’t been priced in an infinite number of times already since Draghi’s “all it takes” jawboning three years ago. Better price it in a few dozen times more… just to be sure.
If it’s been priced in then it is a fair value.
No on knows if something has been priced in.
Why are you afraid of negative rates? That just means there’s deflation. How do you fix deflation? Print money.
I hope ConcernedNeighbour is wrong about Europe. I have held my nose and established a decent sized position. I’d buy more but I don’t think the Euro types will have the stones to QE in size – I am afraid the current market price reflects a slight tilt to easing in size.
I confess: I have lived in Europe, have owned a couple of properties there, love it (my experience is with FR and NL) but I certainly don’t ‘get’ them. Their capacity to fiddle while Rome, Berlin, the Balkans, or their polity burns is truly a wonder to behold. OTOH they saved $3tt on stupid wars recently…
Once last comment: folks should not focus on austerity for austerity’s sake. The goal should be to obviate the need for scary right wing parties. Austerity fetishism is not helping in that regard.
Occupy before Occupy: MLK’s “Poor People’s Campaign”
http://www.vox.com/2015/1/18/7548453/poor-peoples-campaign-mlk
Josh Brown quotes right wing genufletor Podhoretz
“…Tuesday night’s State of the Union address could be the first one in history deliberately designed solely to generate a Pavlovian rage response in members of the opposing party…”
http://thereformedbroker.com/2015/01/19/qotd-trollbama/
Like the Boy Who Cried Wolf EVERYTHING Obama does or doesn’t do “generate[s] a Pavlovian rage response.”
As we sweep the Reagan legacy away America gets stronger
http://www.bloomberg.com/news/2015-01-16/brown-s-california-overtakes-brazil-with-companies-leading-world.html
Obama Jinxes Tax Reform
http://www.bloombergview.com/articles/2015-01-19/obama-jinxes-tax-reform
So the GOP is so sensitive that if Obama even says he’s interested in raising taxes on the rich NOTHING can get done?
That’s funny. Amazing how much Obama’s done after the GOP SAID they wanted to impeach /sue him, scream “your Lie” at him, accuse him of being a traitor, Islamist, of hating white people, fight him to the point of not funding overseas troops or even allowing a Free Trade with Europe come to the floor.
These GOP mouthpeices, card-carrying members of the GOP Media Machine are ridiculous.
I hate their guts, but I’m glad they are keeping that crappy trade treaty off the floor.
California Zooms Past Russia, Italy and Soon Brazil in Economic Might
“…Governor Jerry Brown, 76, sworn in this month to an unprecedented fourth term, is presiding over the turnaround as he steers away from persistent deficits and fiscal turmoil that prompted Republican presidential candidate Mitt Romney in 2012 to compare California to Greece…”
http://www.bloomberg.com/news/2015-01-16/brown-s-california-overtakes-brazil-with-companies-leading-world.html
Another GOP prediction gone awry
Hey GOP who do you have in the Super Bowl? I’ll bet the opposite way.
The GOP in Congress are still betting on the Dallas Cowboys and Arizona Cardinals. The New England Patriots and Seattle Seahawks are from Communist, non-family-value states and can’t possibly be successful.
But California is Greece!
Greece, I tell you!
Everyone will emigrate if the government confiscates 1% more of the wealthy’s income in taxes!
The economy will collapse!
[Of course, some people did leave. Some went to Colorado or Washington or Texas or Florida. We call those people “the ones who couldn’t hack it.” For the rest of us, paradise might be getting a little hotter and drier each year, but it’s still pretty damn nice. Paying that new top marginal rate has been such a burden for me this year. I’m going to have to cut back on…oh, I can’t think of it right now, but I’m sure I’ll have to cut back on something. And as for that terrible, commie, leftist regime in Sacto, well, it’s actually performing better than most other statehouses.]
A whole lot better than dysfunctional Illinois! Maybe we here should take up a collection to bribe our pols to do their jobs. That seems to be the only language they understand – the rustle of folding green.
not loosing lots of money on SF, sounds like cant loose money on housing
Mean girls live:
http://www.nytimes.com/2015/01/18/opinion/sunday/mean-girls-in-the-retirement-home.html?_r=0
Happily my mother is in Hearthstone at Murrayhill independent living and does not suffer from such nonsense. They don’t allow ‘saving chairs’ and strangers are welcomed. The older ones are revered rather than shunned.
The Swiss Franc Affair has been fascinating. We keep hearing about the Efficient Market Theory and how important it is that the financial institutions be ruled by the free market instead of regulators, but everybody is shocked when the market forces actually prevail.
Relying on politicians’ and central bankers’ policy statements is not the same as doing the homework on the economics and math. Little shocks like this one (losses in the 10s and 100s of millions) are critical to inform the financial speculators in the major institutions that a bull market doesn’t mean they are geniuses.
So who were the George Soros’s of this event who figured out that the Swiss Franc peg was not sustainable and went long on it? So far all we have heard are about the losers, but there must be somebody who had the other side of the trade.
The CHF badness is a pretty pure example of Minsky, it sounds. Fascinating, indeed, rd.
“Our lives begin to end the day we become silent about the things that matter.” Dr. ML King, from a jail cell in Birmingham, Alabama in 1963.
Reading and writing about doubleline and Gundach’s data fail http://www.wallstreetrant.com/2015/01/doubleline-data-fail-stock-market-has.html