Good Saturday morning. To cap off a fast moving week, pour yourself a strong cup of joe, and settle into your favorite chair for our longer form, weekend reads:
• The Real Story of How America Became an Economic Superpower (The Atlantic)
• Thoughts on “Teaching Economics After the Crash” (Medium)
• The War Nerd: More proof the US defense industry has nothing to do with defending America (Pando Daily) see also Americans Have Spent Enough Money On A Broken Plane To Buy Every Homeless Person A Mansion (Think Progress)
• How Lego Became the Apple of Toys (Fast Company)
• The Top-Secret Food That Will Change the Way You Eat (Outside)
• The Success Equation: An Interview with Michael Mauboussin (Start-Up Town) see also Masters in Business: Michael Mauboussin (TBP)
• Facebook is the new AOL, and other ways the 90s are back (The Verge)
• The Economics (and Nostalgia) of Dead Malls (NY Times)
• Big Mother Is Watching You: The Track-Everything Revolution Is Here Whether You Want It Or Not (Buzzfeed)
• You are a musical expert: You might not be a virtuoso, but you have remarkable music abilities. You just don’t know about them yet. (Aeon) see also Brain Damage Saved His Music: After a chunk of his brain was removed, guitarist Pat Martino got his groove back. (Nautilus)
Be sure to check out this week’s Masters in Business podcast, with Patrick O’Shaughnessy, author of Millenial Money.
Crude Oil Breaks Below Long-term Support
Source: Chart of the Day
An oldie but goodie.
Sisyphus as Social Democrat
If there were justice in the world, John Kenneth Galbraith would rank as the twentieth century’s most influential American economist. He has published several books that are among the best analyses of modern U.S. history, played a key role in midcentury policymaking, and advised more presidents and senators than would seem possible in three lifetimes. Yet today, Galbraith’s influence on economics is small, and his influence on U.S. politics is receding by the year.
In this lively and thoughtful biography, Richard Parker sets himself the task of explaining Galbraith’s career: why it was so dazzling, and why its long-term impact has turned out to be so much less than expected. The result is not only the story of a smart, witty, and important man, but also a fascinating meditation on the rise and fall of twentieth-century American liberalism. ….
NB: Okay 2005 isn’t all that old but it’s a very good review and the subject well worth revisiting especially these days.
I enjoyed reading the two articles trashing the F35, with one bemoaning the demise of the A10 Warthog.The F35 is s super sophisticated aircraft. Like most other groundbreaking pieces of equipment, and especially one that has to suffice as a primary weapon system for the next quarter century at least, there will be problems. Lots of them. This is nothing new. We have had many problems with just about every brand new weapon system. Anticipating three generations hence the value of effective military equipment is daunting, error-filled and very, very expensive.
If the F35 is such a mess, why are Russia and China attempting to copy the aircraft? Why are they scared to death of it’s air dominance? It is easy for armchair authors to seek preserving dinosaur military equipment designed to fight four wars past, as through they are rehabbing a house on a reality tv show. If their son or daughter were in the military, would they want them protected by the best equipment that gives them a hefty chance of survival? Ask the pilots in the Air Force if they want to fly 1960s technology into the 2015 war zone.
Granted we have spent too much of our national treasure on defense. Living large off defense contracts dates back to the Revolutionary War. What is the ultimate price of not being prepared?
How can a nation afford to lose a billion dollar fighter in combat. Can you spell p-o-r-k?
Do you even read what you’re pasting from freerightwingtalkingpoints.com?
How utterly big of you to concede that “we have spent too much of our national treasure” on not “defense” but rather pork, BS, and the tools of imperial hijinx. Ya think?
It’s a “groundbreaking piece of equipment”, alright … it breaks when it hits the ground (if it gets off it at all).
The F35 is a sophisticated aircraft, for sure. “Super”, well, not so much. Except for the price. Of the R&D.
And where exactly do you get this “best equipment” straw man for [my] son or daughter? By definition, by the very history of its factual, reality-based existence, it is anything but the “best equipment”. Any objective person of even minimal intellect would define “best equipment” as something along the lines of ‘reliable and reasonably economical to acquire’ …
Can’t you guys come up with better trolls? This is pathetic, and you need new material.
The Cannabis Queen of Beverly Hills (NYTimes mag)
Tales from Drinking in New York (Narratively)
Taibbi: Rex’s Last Stand (Grantland)
‘Selma’ vs. History – Elizabeth Drew
http://www.nybooks.com/blogs/nyrblog/2015/jan/08/selma-vs-history/?insrc=wbll
“By distorting an essential truth about the relationship between Lyndon Johnson and Dr. Martin Luther King over the Voting Rights Act of 1965, Selma has opened a very large and overdue debate over whether and how much truth the movie industry owes to the public. The film suggests that there was a struggle between King and Johnson over whether such a bill should be pushed following the passage of the 1964 Civil Rights Act, signed into law in July of that year. The clear implication is that Johnson was opposed to a voting rights bill, period, and that he had to be persuaded by King. This story has now been propagated to millions of viewers, to the point where young people in movie houses boo Johnson’s name.”
Oh, one more thing. I did some research on target-date funds for a friend who wants to “set it and forget it”. Vanguard killed the competition in cost, probably because its underlying funds were index funds, not the actively managed funds that composed the other target-date funds. I didn’t backtest, or do any MVO, or run any Monte Carlo simulations on any of these funds. Which such a huge difference in cost, and with the track record of actively managed funds vs. index funds, that hardly seemed necessary:
Vanguard target date 2035 – VTTHX – Expense Ratio 0.18
https://personal.vanguard.com/us/funds/snapshot?FundId=0305&FundIntExt=INT
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Schwab target date 2035 – SWIRX – Expense Ratio 0.87
http://www.schwab.com/public/schwab/investing/investment_help/investment_research/mutual_fund_research/mutual_funds.html?path=%2fProspect%2fResearch%2fmutualfunds%2fsummary.asp%3fsymbol%3dSWIRX
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T Rowe Price target date 203 – TRRJX – Expense Ratio 0.75
http://www3.troweprice.com/fb2/fbkweb/snapshot.do?ticker=TRRJX&adcode=7208&PlacementGUID=40B0C61753AD4D669A83398A18C7DBEE
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Fidelity Freedom 2035 Fund – FFTHX – Expense Ratio 0.78
https://fundresearch.fidelity.com/mutual-funds/composition/315792655
Although Vanguard isn’t the only one that does it, their pesky $20 annual fee on each fund for small investors (under $10k per fund) can really crank up expenses. If someone was just starting out with the $1000 minimum, that is an additional 2% drag.
If the Republicans really think they are America’s saviors, perhaps they should read the military articles and do some serious house cleaning. Oh, but wait, we’re talking about votes and jobs.
Oh well, I guess that justifies the corruption. Onward and downward.
Corporate officers have two fiduciary duties…neither of which involve maximizing shareholder value.
https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to-maximize-profits-939ae50d0572
An important piece on America’s military – worth reading again.
http://www.theatlantic.com/features/archive/2014/12/the-tragedy-of-the-american-military/383516/
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ADMIN: Previously mentioned here:
http://ritholtz.com/2015/01/weekend-reads-147/
Windfall for Taxpayers Coming to an End
By BINYAMIN APPELBAUM
JAN. 9, 2015
WASHINGTON — The Federal Reserve’s bond-buying campaign continues to produce one clear benefit: a windfall for taxpayers.
The Fed, which turns over most of its profits to the Treasury Department, said on Friday that last year, it transferred an estimated $98.7 billion, a record. The Fed’s profits have been large enough to significantly restrain the growth of the federal debt, cutting aggregate deficits by about 8 percent since 2010.
But the good times are drawing to a close. The Fed’s earnings will decrease as it raises its benchmark interest rate, a process that Fed officials say they are likely to begin later this year. The Congressional Budget Office estimated last year that the Fed’s annual transfers could reach a low point of just $8 billion in 2018.
….
http://www.nytimes.com/2015/01/10/business/end-coming-to-windfall-for-taxpayers.html
Our Nuclear Waste Is a Goldmine
Technology for generating power from spent uranium hits policy barriers.
By John Upton
November 21, 2013
If America’s nuclear waste could be turned into electricity, it could power the country for the next century. More than 77,000 tons of plutonium, americium, and other radioactive leftovers of uranium fission have piled up at America’s atomic power plants, turning them into radioactive waste warehouses. Known as transuranics, these materials remain radioactive for thousands of years, and are stored in above-ground, concrete-encased water pools and steel casks, fueling endless political battles about where they should be buried. In August 2013, the United States Court of Appeals for the District of Columbia Circuit ordered the government to resume planning for the Yucca Mountain dump site, but the Nuclear Regulatory Commission says it lacks the money.
But there is a better solution: Nuclear waste can be turned into electricity. A new generation of nuclear reactors, dubbed Gen-IV reactors, could do it with great efficiency. In the process, transuranics would be broken into elements that remain radioactive for a much shorter period of time, thus alleviating both our energy and our waste issues. As a country, we are sitting on a radioactive gold mine. But the economics of mining that gold are complicated. To make the new reactors work, new economic policies have to work first.
….
http://nautil.us/issue/7/waste/our-nuclear-waste-is-a-goldmine
Thanks for the link re: Pat Martino. After reading the Nautilus piece, I went to YouTube and watched some of his performances and interviews. Wow. That is powerful stuff indeed. Thank you.
The Nautilus article on Pat Martino is THE definitive piece on one of the finest guitarists of the 20thC. In the mid-late ’60’s when he was coming up, he was THE guitarist’s guitarist.
His 1st, & best: http://www.allmusic.com/album/el-hombre-mw0000689936 [1967]
Thank you for posting this informative & sensitive article on neuroscience and a beautiful person.