10 Tuesday AM Reads

The world keeps spinning, the news keeps flowing, and we sort it all out for you with our morning train reads:

• Hedge Funds Are Boosting Tech Valuations to Dangerous Heights (Bloomberg)
• A Scary Movie: Filling Your 401(k) With Company Stock (NY Times)
• China Wants to Buy Europe (Bloomberg View) see also An update on Asian equities – upward explosion ahead (Peter L Brandt)
• Asian Infrastructure Investment Bank: France, Germany and Italy said to join (The Guardian)
• Why we’re all overconfident (PRIsee also How Emotional Intelligence Can Make You a Better Investor (Institutional Investor)

Continues here



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Discussions found on the web:
  1. farmera1 commented on Mar 24

    Concerning California running out of water, it isn’t the only State with real water problems.

    The world’s fifth-largest food supplier is almost out of water

    My brother-in-law tells me Corvallis, Oregon is making plans to ration water next year. There is a lot of irrigated crop land in the Corvallis area also, as I remember from a visit there. Also they have been having very warm (and dry) winters.


    • RW commented on Mar 24

      As things are going in western Oregon we could be rationing water this year. Things are worse in the southern half of the state, and northern California too of course, but the northern half including the big Willamette basin isn’t looking good either. There’s hardly anywhere in the state that is even 50% of median/normal for this time of year and considering how warm this winter has been I’d guess we’re pretty close to being out of time.

      See for e.g., http://www.wcc.nrcs.usda.gov/reports/UpdateReport.html;jsessionid=+44JZ08heMao-pLKav2lSM5L?report=Oregon

    • VennData commented on Mar 24

      Ted Talk.


      “…Senator Cruz raised $500,000 in his first day – 60% from major donors, including last night’s New York fundraiser, and 40% online. His savvy launch far exceeded expectations, and surprised Republicans of all stripes — even rival campaigns. The theater-in-the-round format at Liberty University had a few drawbacks…”

      “…Ted Cruz is just the latest presidential hopeful to test the theory that experience is overrated.”

      “Cruz has held elected office for barely two years. He’s written a single law and refused to take part in any significant deal-making in Congress. Yet on Monday, the Texas senator … [is] running to be leader of the free world.”

  2. RW commented on Mar 24

    Demand slack combined with large (and growing) corporate cash hordes appears contradictory, a conundrum as it were. A series of thought experiments by Dan Davies provides a more satisfying answer than others I’ve heard. (ht BDL)

    How Secular Stagnation Came to Smurf Village

    “The real lesson of the Smurf village model is that secular stagnation isn’t really about growth slowing down…

    …It’s about investment slowing down, and none of the normal policy levers being able to speed it up again. What all six of the Smurfs’ explanations have in common is that investment capital, instead of circulating round the economy, gets stuck and starts to pile up somewhere, despite price signals telling it that it ought to be chasing new investments. …

    • VennData commented on Mar 24

      VennData’s theory is that the butt-lickers that make it to the top of corporations can’t handle the rapid change. So they are ultra conservative, resort to financial engineering etc. Just look at Big Food, they simply can’t get their minds around the drive to healthy eating.

      Everybody talks about great management, but new products span the digital IT to biotech and complex supply chains. It’s too much for a legacy Harvard MBA whose daddy produced a hit movie in the 70’s or was elected to a dozen concurrent terms as a safe seat in Alabama.

      And to those who argue against STEM, you are part of the problem. We need minds steeped in Engineering, math science, not nostalgia..

    • BillG commented on Mar 24

      “We need minds steeped in Engineering, math science, not nostalgia..”

      We need more of those minds in management positions, maybe, but there’s no shortage of scientifically trained individuals in this country. For that matter there’s no great demand for them in management either though there probably should be. But CEOs hire people like themselves for accelerated management tracks. They’d rather hire someone that went to the same elite prep schools, colleges, and MBA programs than some guy with any real technical ability.

  3. VennData commented on Mar 24

    Boehner ‘Baffled’ by Reports Israel Spied on Iran Talks



    ​Everything baffles this country club​ puck.

    His position is a game to him. He’s not serious. If he was he would tackled problems like health care costs, infrastructure, funding the military, budgets, etc…

    This is not your private little consultancy you cancerous moron! This is moving the world’s beacon of freedom forward. We lead the free world, Stop sweating tax cuts for the rich and fucking work.

    And McCain. Where’s your temper tantrum now?

    The GOP is a joke. If you don’t get how out of touch they are, READ something outside their sphere of influence.

    • VennData commented on Mar 24

      Someone should tell Boehner.

  4. DeDude commented on Mar 24

    Second to last paragraph captures exactly the biggest problem with Bibi’s moronic attack on the President of US.


    By inserting himself into the internal partisan warfare of this country he has put in jeopardy the great strategic advantage that Israel had by being one of the few remaining non-partisan issues. Israel has always had broad support from politicians in both parties. By direct partisan interference behind one party in the US this is likely to disappear. GOPsters will be more than happy since it may give them additional funding and support from groups that have been leaning democratic. The big loser will be the country that elected this clueless right wing clown as their leader a few days ago.

    • VennData commented on Mar 24

      Shalomgate is about to consume the worst Congress in history in endless finger pointing and denial of who invited whom to give what joint congressional talk where.

  5. Jojo commented on Mar 24

    According to Businessweek, having more kids would solve problems with SS & Medicare because the kids would generate more taxes when they went to work. So let’s increase the tax incentive for having kids.

    Sadly, this is an example of unable to adjust to the new world paradigm, where jobs are being consumed/transferred to automation/robotics in ever increasing numbers. Will there actually be jobs for those tax incentivized kids when they reach working age? I don’t think so.
    Have Kids? You Deserve a Tax Break
    39 Mar 16, 2015 11:44 AM EDT
    By The Editors

    Parenthood comes with lots of surprises. Among the largest is surely the price tag: In the U.S., each little one costs roughly $245,000 to rear, on average, not including college. Parents who undertake those costs aren’t just raising the next generation of upstanding citizens: They’re also subsidizing their childless peers. The tax code should do a lot more to help them out.

    Entitlement programs such as Social Security and Medicare depend on younger generations of workers to contribute payroll taxes. Nonparents don’t have to pitch in for all the diapers and iPhones and orthodontics required to raise those workers, yet they’re entitled to the benefits the youngsters eventually pay for.

    That’s not only unfair, but it also creates a perverse incentive: For a given individual, generous entitlements discourage procreation by reducing the need for a child’s help in old age. Yet sustaining those benefits requires the country as a whole to produce more kids. The fertility rate in the U.S. is now at an all-time low, and Social Security, according to one study, has been responsible for about half its decline. Meanwhile, as you may have heard, the baby boomers are retiring.


  6. rd commented on Mar 24

    BP is leaving ALEC (American Legislative Exchange Council) which has been aggressively arguing against climate change.


    The North Atlantic conveyor appears to be slowing down which could have significant impacts on British and Northern Europe climate

  7. VennData commented on Mar 24

    With Development Bank, China Challenges Japan’s Role in Asia

    ​”….China’s plans for a new development bank to fund infrastructure in Asia pose a challenge to Japan…”


    What PLANET are these WSJ idiots living on?

    The Multilateral institutions World Bank, IMF etc set out reforms to accommodate China’s growing wealth and the GOP Congress as refused to do anything. So China is snubbing the Boehner and his stupid Hastert rule.

    When the S&P500 clowns lose that contracts to an offshore players on an AIIB deal thank Boehner and his rock rib tea partiers. And what are they gaining? WHAT?

    Republicans are a joke.

  8. VennData commented on Mar 24

    “…​Cruz has previously said that he receives his health insurance through his wife’s Goldman plan and has boasted about not needing to receive government health care benefits. It’s unclear what health care plan the Texas senator will choose while his wife is on leave from Goldman. Cruz’s spokespeople didn’t immediately return requests for this information…”​


    I sure hope none of his rock ribs get busted

  9. RW commented on Mar 24

    The Assumptions Behind the Federal Reserve’s Choice of 2% per Year Were Erroneous

    The decision by the Federal Reserve in the mid-1990s to settle on a 2% per year target inflation rate depended on three facts — or, rather, on three things that were presumed to be facts back in the mid-1990s:

    1. That the long run Phillips curve was vertical even with an inflation rate averaging 2% per year, so that there was no production or employment cost of such a target.

    2. That the safe real interest rate would be positive and significant, so that a 2% per year inflation target would not entail disturbingly low levels of nominal interest rates that might lead to instabilities in velocity.

    3. That shocks to the economy would be small, so that the Federal Reserve would never seek to compensate with an interest-rate reduction in the range of 5% or more.

    We now know that all three of these were and are false.

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