10 Tuesday AM Reads

March 10, 2015 7:30am by

Friday’s Jobs-driven sell off gave way to Monday’s rally, which has led to todays red futures, and . . . and the beat goes on. Oh, and our morning train reads:

• The Six-Year Bull Market in Five Charts (MoneyBeat)
• Apple Watch Won’t Rescue Gold Bugs (Bloomberg View)
• A Mystery in Hedge Fund Investing (NY Times) see also Swedroe: Excuses For Active Managers (ETF.com)
• Dear Federal Reserve: *Now* is the time to raise interest rates? RLY?? SRSLY?!? (Bonddad)
• Is Art an Asset Class? (WealthManagement.com)

Continues here

 

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  2. A Farmer commented on Mar 10

    The most misleading article ever, at, naturally, the Wall Street Journal:

    http://www.wsj.com/articles/recessions-impact-lingers-for-many-states-1425926163

    How does one write an article about state tax revenues running lower than pre-recession levels adjusted for inflation, and fail to mention state income tax cuts? Not sure, but these clowns did it. Also, how about throwing Kansas and Wisconsin on that chart, just for giggles. Why would somebody in favor of Republican tax policies run a chart which so obviously undermines those same policies?

    • rd commented on Mar 10

      The global 1-yr old vaccination rate is higher than some wealthy American counties.

  5. Concerned Neighbour commented on Mar 10

    Surely I can’t be the only one outraged at GM announcing a $5B share buyback.

    http://www.wsj.com/articles/gm-commits-to-immediate-5-billion-share-buyback-1425900636

    So a few scant years after going bankrupt and requiring a massive bailout, the executives have $5B burning a hole in their pocket? Here’s a thought: how about saving that money for a rainy day? When all the subprime car loans being issued go bust, I truly hope not one cent goes to bailing out these car companies again. I was for the original bailout, but to see this kind of reckless behavior under these economic conditions is just infuriating. It’s much like the big banks issuing record bonuses a couple years after blowing up the economy.

    Then there’s the fact the governments that bailed out these car companies weren’t made whole… where was this buyback while governments still owned shares?

    • rd commented on Mar 10

      Its not just taxpayers. The bondholders took it in the shorts as well: http://am.blogs.cnn.com/2009/06/01/bondholder-furious-over-gm-bankruptcy/

      Part of the new reality of “maximize shareholder value” is that the shareholders want to extract what they can in the short-term, minimize R&D and capital investment, and not worry about having a functioning company a decade from now. Bondholders lend money for years or decades and rely on the company being there or else have a senior claim on assets. The past decade has turned those principles on their head.

    • Iamthe50percent commented on Mar 10

      I’m upset that they didn’t spend this money on product improvement. Just got to juice the share price for those executive bonuses.

    • rd commented on Mar 10

      They did invest in product improvement. GM’s product has been its financials for years. Unfortunately, that product sucked as bad in the 2000s as their cars did in the previous 30 years.

      America’s corporations view fending off proxy fights as their version of R&D and capex.

      I have been hoping that Mary Barra can turn GM back into an actual car company. I think some of its shareholders are getting in her way. That will just delay my potential purchase of a GM car longer. We are looking to replace an old vehicle this spring. The US car companies don’t have anything that interests us.

    • willid3 commented on Mar 10

      its just a sign of how US business operates. they arent the only company doing that. and to top it of, most are borrowing the money to do that buy back. and while they will say its to provide ‘value’ to stock holders. does it really? cause it seems to line executives pockets too, as they get those stock packages, which will increase in value. not that any body has noticed it. or will allow any one to fix it

    • Robert M commented on Mar 10

      this is the type of financial engineering(you’ve held your stake how long) President Obama needs to come in and say no to immediately. I don’t care if he declares it a National Security issue and its ligitigated till hell freezes over to do so. In terms of economic policy using the TARP funds to secure the bankruptcy of GM when no financial company would put up the money kept the Great Recession from becoming The Great Depression Infinity and Beyond version. The President has run away from his signature legislative accomplishment. to run away from his signature economic one moves the scale of cowardice into level 8 of hell.

  7. romerjt commented on Mar 10

    Feeling really smart again today having predicted the problem that foreign fighters would pose to ISIS although you probably don’t need to be a War College grad to see that having recruits from vastly different places, speaking different languages, who got their information from the internet is not all good .
    “Most striking are the growing signs of friction between the foreigners lured by its state-building experiment and local recruits, who have grown resentful of the preferential treatment meted out to the expatriates, including higher salaries and better living conditions. Foreign fighters get to live in the cities, where coalition airstrikes are relatively rare because of the risk of civilian casualties, while Syrian fighters are required to serve in rural outposts more vulnerable to attacks . . .” Worth noting that other reports say the foreigners are treated more as cannon fodder . . . either way, as increasing numbers of foreigners become disillusioned and escape they will strike a PR blow to ISIS that may even be fatal. Islamic extremism will not go away anytime soon but ISIS’ days are numbered. Now, if we can just keep the Republicans from sending ground troops before it happens . . . Shut up Lindsay Graham.

  9. DeDude commented on Mar 10

    It seems that more and more economists are scared that Yellen will do a Trichet and dumbfumble on the interest rates. But so far I have not seen the signs that she is that incompetent or that amenable to pressure from incompetent politicians. Am I missing something real? or just missing a paranoia storm?

  10. VennData commented on Mar 10

    “…Benjamin Netanyahu is claiming that a multinational conspiracy is seeking to bring down his government…”

    http://www.ft.com/cms/s/0/1c26c782-c72a-11e4-9e34-00144feab7de.html#axzz3U0Hh5tK5

    These liberal conspiracies will raise him even higher in US polls. Flag burning! Stem cell research! Wolves eating homeless people! He can become our next President. Cut taxes for the rich. Raise them on everyone else.

    If he loses he can come here and become a myth, shouting at Labor back in Tel Aviv “Mr Herzog, tear down these settlements.”

    • rd commented on Mar 10

      V.1.0 of Apple products never have battery lives longer than minutes for actual use.

      Its not until V 3.0 or so that they get up to normal device battery lives.

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