Its day 2 of the FOMC meeting, and apparently, I am one of the few on this planet who believe keeping or removing the word “patient” is totally irrelevant. But your patience will be rewarded with our midweek morning train reads:
• The Fuzzy, Insane Math That’s Creating So Many Billion-Dollar Tech Companies (Bloomberg) see also Mind Games That Can Kill Investors (Stock Charts)
• Stock Performance Before, During & After Recessions (A Wealth of Common Sense)
• Commodities two-fer:
…..-Gold Futures Fall to Four-Month Low Ahead of FOMC Meeting (WSJ)
…..-U.S. Oil Prices at Six-Year Low on Storage Concerns (WSJ)
• 86% of active managers failed to beat market in 2014 (CNN Money)
• The dollar is rising faster than any time in the last 40 years (Washington Post) see also Rising Dollar Is Creating Trouble for Emerging Economies (Upshot)
The price of gold in oil barrels is at its highest in 30 yrs.
I can’t wait to fill up my new all-gold Apple watch!
Re: Valuations
Pretty much the only nice thing about the current investing landscape is that it appears the US economy is on a different wavelength from the rest of the world. My 401k has automatic quarterly rebalancing (its either quarterly or none at all), so the main job of my US equity allocation over the past couple of years has been to create capital gains to sell quarterly to buy equities from the rest of the world, including Europe and emerging markets, and to buy more bonds and TIPs. I don’t think the current US bull is going to end in a nice way, but there is a reasonable chance that the international stocks will into suffer anywhere near as much and can be rebalanced back into the US at much lower purchase points.
From everything I have seen looking at the history of bond markets, bond bear markets tend to take about a decade to play out if the losses are similar to a major stock bear market which is usually complete within about 2 years of the peak. So bonds may do badly over the next decade or so, butt they should react much more slowly than stocks, so they should still be valuable for rebalancing during an equity bear market.
My number one investing concern is that we are in the early stages of a very tumultuous period, such as occurred several times at the end of the 19th century and the first half of the 20th century. Major wars tend to be disruptive to the concepts of global commerce and investing in both global stocks and bonds.
I can’t wait for the Fed to hike and see all the naysayers get laughed out of the room, again, in a couple year’s time.
It will be a wonderful financial journalist landscape when none of the rock-ribbed future predictors have a shred of cred.
Tim Cook: Apple isn’t becoming the new Microsoft
http://www.engadget.com/2015/03/18/tim-cook-says-apple-isnt-new-microsoft
The fact that you have to say it suggests you are, Mr Propriety.
I save a lot of money with the same functionality with Google/Android open systems.
BARNEY FRANK: Aaron Schock ‘spent entirely too much time in the gym for a straight man’
http://www.businessinsider.com/barney-frank-on-the-aaron-schock-rumor-2015-3
If visible obliques, a yen for foreign TV, a flair with sepia-toned post-Lincoln GOP lithos and traveling by private jet with the same twinkie doesn’t seal it for Barney Frank’s gaydar, then we need to re-visit every line of Dodd-Frank
So unlike Bush, Netanyahu’s flip flop on nation building involves more settlements.
http://www.theatlantic.com/international/archive/2015/03/Benjamin-Netanyahu-Rejects-Two-State-Solution-Palestine-Israel-Before-Election/387919/
It’s time to rethink our relationships.
Seeing white: A historic winter
With an impressive 108.6 inches of snow, Boston made history with its snowiest winter on record. Here is a look at how photographers captured the striking ways that this massive amount of snow changed the landscape in the region for months.
3/17/2015
http://www.bostonglobe.com/news/bigpicture/2015/03/16/seeing-white-historic-winter/9QBtM2rdqCpYwTIl1ct5cK/story.html
meanwhile:
Scientists warn Antarctic melting more extensive than previously thought
Additional melting in East Antarctica could lead to a global sea level rise of at least 11 feet, new paper warns
March 16, 2015
http://america.aljazeera.com/articles/2015/3/16/scientists-warn-antarctic-melting-is-more-extensive-than-previously-thought.html
MoneyWatch
March 13, 2015
America’s Millennials: Well educated but unskilled
Bad news ahead for the American workforce: Its Millennial generation is flunking the basics.
Americans born after 1980 are lagging their peers in countries ranging from Australia to Estonia, according to a new report from researchers at the Educational Testing Service (ETS). The study looked at scores for literacy and numeracy from a test called the Program for the International Assessment of Adult Competencies, which tested the abilities of people in 22 countries.
The results are sobering, with dire implications for America. It hints that students may be falling behind not only in their early educational years but at the college level. Even though more Americans between the ages of 20 to 34 are achieving higher levels of education, they’re still falling behind their cohorts in other countries. In Japan, Finland and the Netherlands, young adults with only a high school degree scored on par with American Millennials holding four-year college degrees, the report said.
“A decade ago, the skill level of American adults was judged ‘mediocre,'” the report said. “Now it is below even that. Millennials, who will form the backbone of this nation’s future, are not poised to lift us out of this predicament; in fact, the lack of adequate skills in this population has become a challenge for us to confront.”
…
http://www.cbsnews.com/news/americas-millennials-well-educated-but-unskilled/
drugs and diseases that drive US health care costs
http://qz.com/364149/the-diseases-that-are-driving-up-american-drug-spending/
that terrible creation
http://www.pragcap.com/a-world-without-the-federal-reserve
mostly just makes so we can get paid
when pr spin is sold as good policy?
http://www.nakedcapitalism.com/2015/03/maya-macguineas-of-fix-the-debts-profound-fiscal-irresponsibility.html
T-1000 lives! It ain’t a movie no more:http://www.theatlantic.com/technology/archive/2015/03/3d-printing-just-got-100-times-faster/388051/
why EMF actually is junk
http://www.pragcap.com/three-things-i-think-i-think-dollar-contagion-dumb-markets
UK Conservative party proposes a tax on companies who try to avoid paying taxes in the UK
“…In his final Budget before the election, George Osborne said firms that aid tax evasion will also face new penalties and criminal prosecutions…The so-called “Google Tax” is designed to discourage large companies diverting profits out of the the UK to avoid tax…”
http://www.bbc.com/news/business-31942639
In America, Republicans would be suing the PM, The GOP says people who evade and leave the country are heroes. They would invite North Korea’s leader to come and speak to the House of Lords to save his sons inevitable appointment to leadership and curse, and swear and spit..
Well, the argument from our exchanges/regulators, circa, say, 10 years ago, ran to making our markets more ‘competitive’ and ‘welcoming’. Thus a Gresham’s dynamic (see Akerlof and Romer) – effectively winking at/encouraging unethical/fraudulent/criminal behavior – became the norm.
I find it hard to believe that the folks who gave us LIBOR rigging, the London Whale, PMs with Swiss bank accounts, the uber wealthy infestation of London, not to mention the old stand-by tax havens/dodges as the Jersey, Guernsey, Isle of Man, the British Virgin Islands and the Cayman Islands, will actually follow thru.
Arizona Senate supports allow sawed-off shotguns, silencers
http://www.azcentral.com/story/news/arizona/politics/2015/02/24/senate-supports-bill-allow-sawed-shotguns-silencers/23922561/
Phoenix suburbs gets mass shooting.
http://news.yahoo.com/four-injured-shooting-multiple-locations-mesa-arizona-report-171739149.html
Gun nuts will say the answer is more guns and that we’ll only be ssfe when everyone has a gun and can carry it wherever they want.
The 21st century version of war is now “hybrid warfare”. Putin has been bringing the concept to high art. Militaries usually get very good at fighting the last war but not necessarily the next one.
http://news.yahoo.com/nato-allies-come-grips-russias-hybrid-warfare-182821895.html
“Tim began to offer his liver to Steve. “I really wanted him to do it,” he remembers. “He cut me off at the legs, almost before the words were out of my mouth. ‘No,’ he said. ‘I’ll never let you do that. I’ll never do that!’
“Somebody that’s selfish,” Cook continues, “doesn’t reply like that. I mean, here’s a guy, he’s dying, he’s very close to death because of his liver issue, and here’s someone healthy offering a way out. I said, ‘Steve, I’m perfectly healthy, I’ve been checked out. Here’s the medical report. I can do this and I’m not putting myself at risk, I’ll be fine.’ And he doesn’t think about it.”
I disagree. My interpretation was a certain kind of selfishness – little regard for the loved ones and company left behind. The liver is an insanely amazing organ.
As much insight as Jobs had in style and marketing, he lacked it equally or more so in matters of commonsense health care decision-making. Where were the wife and his doctors in this (homeopathic remedies, rejecting this overture.