10 Wednesday AM Reads

March 4, 2015 7:00am by

Its Wednesday, and we have only had two snowstorms so far this week, with another expected tomorrow. No worries, there is only 16 days to Spring. And, our morning train reads:

• Wall Street Has Its Eyes on Millennials’ $30 Trillion Inheritance (Bloomberg)
• Innovation, not easy money, is behind the Nasdaq’s return to 5,000 (MarketWatch) see also The Last Nasdaq 5000 Was Happier (Real Time Economics)
• Why Buzzfeed is the most important news organization in the world (Stratechery)
• Wolf: The riches and perils of the fossil-fuel age (FT) see also US running out of room to store oil; price collapse next? (AP)
• India’s Failure to Cut Import Duty on Gold Hurts Prices (WSJ)

Continues here

 

 

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Discussions found on the web:
    • rd commented on Mar 4

      It won’t be a problem. They will have a bipartisan approach. Brian Williams and Bill O’Reilly will co-chair the panel that will decide on which are facts and which are not.

  2. VennData commented on Mar 4

    “Republicans” Capitulate On Barack Obama’s Amnesty Plan

    “…By a 257-167 vote – the “GOP-controlled” chamber send the administration a bill funding U.S. Department of Homeland Security (DHS) through the end of September. And yes … the measure contained money for Obama’s dictatorial executive amnesty program…”

    http://www.fitsnews.com/2015/03/03/republicans-capitulate-barack-obamas-amnesty-plan/

    So if “Republicans” vote to bomb Venezuela, take all their oil, enforce unbridled capitalism on them, make them speak English, and Obama signs it, does that make the bill “Obama’s dictatorial executive amnesty program?”

    I guess this fitnews.com site will have a tough time with the Google fact-based search system

    • rd commented on Mar 4

      Its not as easy as that. You have to get the right type of crude to the right type of refineries, all within the Jones Act rules. The primary reason that the Keystone XL has been a priority for the oil industry is because the oil sands crude it carries would replace the heavy Venezuelan crude that some of the Gulf refineries we set up to process but no longer get.

      Many East Coast refineries get imported crude from Europe and the Middle East. The pipelines don’t exist to send them enough crude from Cushing. They would need American built and flagged tankers to ship the crude from the Gulf Coast to the East Coast. The lack of pipelines and ships to the East Coast is the primary reason why there are so many oil trains heading to the East Coast to refine the North Dakota Bakken crude there.

    • ilsm commented on Mar 4

      Leave the Alberta stuff in the ground!

      Crude and pipelines do not mix. Refined product goes through pipelines that are smaller diameter and have lower power needs.

      Rail borders on ‘less than logical’. While pipelines are marginally “safer”.

      Status quo under Jones act, or not retooling refineries are excuse to spew 80% more CO2 into the air from Tar Sand Crude.

      Water is cheapest way to move things cheapest oil related things.

  5. VennData commented on Mar 4

    Boehner Outfoxes His Critics. Again.

    “…Thus he could tell conservatives this week that he drove a harder bargain than Senate Majority Leader Mitch McConnell did, and it’s possible some conservatives in and out of Congress will buy it…”

    Did you buy it? If you did please reply below right wing Tea Partiers. Did Boehner fool you again?.

    http://www.bloombergview.com/articles/2015-03-03/boehner-outfoxes-his-critics-again-

    “..Pundits and reporters have portrayed the chain of events as a disaster for the speaker, and are wondering again if his job is in jeopardy. So why do I think Boehner’s “defeat” was actually a brilliant maneuver?…”

    GO ahead, strawman the pundits.The fact is Boehner let HOMELAND SECURITY FUNDING languish for seven months and slipped it through while a foreign right wing nut ranted and raved a bunch of nonsense.

    The Tea Party can’t keep voting against HOMELAND SECURITY FUNDING and not ejecting Boehner so the far right caved. Boehner didn’t out fox anybody. His Hastert approach is making Tea Partiers go back on the word to the their Texas Districts.

    Boehner is RINOing the Tea Party. And they cave without a peep because they like their cushy DC offices and taking meetings with cute foreign lobbyists. And if YOU Tea Partiers think otherwise… well the joke’s on you.

  6. rd commented on Mar 4

    The biggest difference between NASDAQ 5000 then and now as that the tech stocks today stocks represent actual businesses today instead of just elevator pitches. We may argue about whether or not the businesses are over-valued, but at least the metrics now are dollars of profits and sales instead of website clicks. Many of the 2000 NASDAQ stocks would have left Shark Tank without a good offer.

    • VennData commented on Mar 4

      This sanguine point of view misses the international, global picture! Obama has driven up the price of dollar with his ham-fisted, overreaching limp-wristed-ness, while Bush cut export prices by 41%.

      Ignore that the collapsing value of the Euros sitting in your pocket from that last six week cruise you took (same water levels at every port of call as last year you Global Warming Kooks!) and you’ll miss that real question: Why hasn’t Obama dropped bombs (that get cheaper by the day) on the people deviating from this central planning model like Cuba, Venezuela and Iran? It makes you wonder how much weaker he can get with his lawless domination in neutering my Net.

  7. rd commented on Mar 4

    Propublica just did a major takedown on workers compensation “reforms”. A key takeaway is that, even though business are complaining about the rising cost of workers’ comp, the actual cost as a percentage of employee’s wages has declined 50% over the past 30 years.

    If the Supreme Court voids Obamacare subsidies in federal exchange states, many of those states’ residents are going to see a double-whammy of poor healthcare insurance coverage (companies will even be able to drop insurance coverage then without paying penalties) and rock-bottom compensation for on-the-job injuries and illnesses. I hear the early 1900s were a great time to be an employee in a manufacturing or mining firm, which is, I assume, why we are rushing to return to those times.

    http://www.propublica.org/article/the-demolition-of-workers-compensation

    • willid3 commented on Mar 4

      saw this earlier and that it was just a Texas thing. turns out its not. does make wonder why any body does a job that puts you in harms way. cause business isnt doing its part. course then you really wonder why some are so into their mantra about job creation, when they really dont care.

  8. rj chicago commented on Mar 4

    “Wall Street Has Its Eyes on Millennials’ $30 Trillion Inheritance”

    Ummm……so do the crooks in the government – don’t fool yourselves to think it is only Wall St.

    • rd commented on Mar 4

      I think the $30 Trillion is way overstated. I think the financial sector must be assuming that the kids will off their parents early in retirement to preserve the current retirement savings instead of spending it down. It is likely that most or all of any household retirement savings of $500k or less will get used up by the end of the average lifespan as it gets spent with numerous claimants: fun things on top of SS and pensions, healthcare, nursing home care etc.

      That will wipe out most of the savings for most people. It will only be a small percentage of the population that will have big enough savings to survive all of that.

      http://www.bloombergview.com/quicktake/americas-retirement-gap

    • willid3 commented on Mar 4

      dont them that. they will look for even more from every one else, they have bonuses tonget you know

  9. VennData commented on Mar 4

    Major Theater Chains to Boycott Netflix’s ‘Beasts of No Nation’

    http://variety.com/2015/film/news/major-theater-chains-to-boycott-netflixs-beasts-of-no-nation-1201445636/

    If only these rock-ribbed businessmen had tax cuts, they could afford to take the impending hit from Netflix’s ascent, but without a fair corporate rate (One that will collect the exact same amount of tax without the loopholes) they must suffer at the hands of Net UNneutral competitors fostered by Obama’s heavy-handed, overarching weaknesses to his Hollywood friends.

    And Hillary’s money.

    And Monica Lewinsky.

    • VennData commented on Mar 4

      And Hillary’s emails.

  10. RW commented on Mar 4

    Updating two mid-cycle indicators

    …A mid-cycle indicator is one that turns roughly in the middle of an economic expansion. It is a way to focus attention. Are we in the first part of an expansion, or are we at a point where we should begin to watch for a turn down in long leading indicators?

    In this post I want to update 2 series which appear to make good mid-cycle indicators: retail sales vs. personal consumption expenditures, and the personal savings rate minus the inflation rate. ,,,,

  11. pcassell commented on Mar 4

    Schwab posted an FAQ on their intelligent portfolios robo advisor offering:
    https://intelligent.schwab.com/about-sip.html

    I found it interesting that their aggressive allocation for a 30 year old included 6.9% in cash and 3.1% in commodities. Their justification for cash is all around diversification benefits. Of course, they collect on the spread between interest paid on the cash and what they can earn on it. It seems a bit deceitful.

    But the broader question it brought up for me is the true value of diversification only for reducing volatility but when the long term “investment” results for these asset classes are suspect. Commodities and cash have returned little over time. And we can create all kinds of investment vehicles that return nothing / very little but dampen portfolio volatility.

    Thoughts Barry?

    • rd commented on Mar 4

      The Schwab allocation model looks similar to the Dow Jones Real Return Target Date indices. http://press.djindexes.com/index.php/dow-jones-indexes-launches-dow-jones-real-return-target-date-index-series/

      I think DJ has largely abandoned these indices due to lack of demand and just stuck with their prior target date indices. Schwab has a very different marketing model so they may be able to make a much better go of it. It looks like their average annual cost is slightly lower than the equivalent Wells Fargo Dow Jones Target Date funds. it wasn’t clear to me how many of the ETFs would be subject to transaction fees which could be a significant cost for small portfolios.

    • intlacct commented on Mar 4

      I’ve said it here multiple times: gold in a portfolio, even a small amount (3%) can be a great diversifier. Same way with commodities. It’s the holy grail for goodness sake – non-correlated assets.

      And for the kiddies, given equity valuations and commodity valuations, it’s a great time to establish that portion of your portfolio.

      What’s that you say? Millenials won’t be tempted to abandon the plan when confronted with the third major drawdown of their lives and no ballast to preserve a bit of hope? History is on my side on that one…

  14. VennData commented on Mar 4

    America Subpoenas Hillary Clinton for her Lying Trove of ill-Gotten Emailings

    http://nypost.com/2015/03/04/benghazi-committee-to-subpoena-hillarys-private-emails/

    I say FINALLY! Finally we will get to the bottom of this house of cards, this pack of lies, this circus carnival, this mass deception, this ring of fire, this secret policeman’s ball.

    This strategy has worked well to end waste, fraud and abuse for the GOP in the past and it will continue to work. I just hope Darrell Issa gets an honorable mention for his perfecting the craft

    And if it doesn’t, just sue the pantsuit off her!

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