10 Friday AM Reads

It was a busy week, but its not over yet as futures warn of downside pressure in equities. Our morning train reads will get you ready:

• Fed’s John Williams: Timing of Rate Rise Is Overrated (Upshot)
• Big Oil Is About to Lose Control of the Auto Industry (Bloombergsee also Low Prices Cool Boom in U.S. Oil Production (WSJ)
• Shilling: Where Have All the Consumers Gone? (BV)
• Did macro theory fail us in the crisis? (Noahpinionsee also Forecasting vs Explaining (Stumbling and Mumbling)
• Actual words my coworkers have said to me, a woman in tech (Quartz)

 Continues here


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  1. Iamthe50percent commented on Apr 17

    Just had to forward that Quartz article to my sister and daughter (both women in tech).

  2. rd commented on Apr 17

    I am baffled about why people are struggling with the concept that the US consumer isn’t pounding their money down on sales counters. If you look at the demographics, the US had an actual reduction in the number of 25 to 44 year olds between 2000 and 2010 even while the overall population grew. The number of people over the age of 45 sky-rocketed. Oddly enough, people older than 50 are unlikely to be buying lots of stuff for their kids, new houses etc. If anything, many of them will be trying to downsize, pay off debt, and increase savings for retirement. As they retire, many of them will see a significant drop in their income because they had not saved enough before. The 25 to 44 year old growth is where the consumer spending will come from and that number shrunk over 3 million people and will likely stay down for another decade unless a wave of immigration shows up.

    Simultaneously, we have seen a reduction in the real disposable income of the median household income. It would be unexpected if people made less money but spent more.

    If businesses and governments are relying on the US consumer picking up the mantle again of their glory years, I think they will be waiting another decade until the millenial group is in their 30s.

    • farmera1 commented on Apr 17

      I’m impressed with your analysis. I think you are right on.

      Me I’m in the 60 plus group. I’ve been very conservative my whole life saving and investing. But now I’m spending on myself and others, so I guess there are exceptions to the rule, but in general I agree with your thoughts above.

    • willid3 commented on Apr 17

      and the older folks are the usually the ones with money. while the younger ones tend to not too. and many seem to be trying to figure out why sales arent doing so well. it couldnt be that they are trying to compete with 3rd world countries for jobs could it? but the older folks dont buy as much, since we tend to be slowing down. while the youth are just getting started. and they tend have less to spend, and so they ‘buy’ cheaper things. like replacing a car with a cell phone

    • rd commented on Apr 18

      I don’t expect our P/E ratios to survive the older folks having the money and then either selling their stocks for income or for more stable assets as they move deeper into retirement. Not a timing prediction because it plays out over many years, but I think the demand for equities will drop over the next decade before rising again when the millenials enter their peak earning years. I am not sanguine about CAPE=20+ surviving the next decade.

  3. RW commented on Apr 17

    WRT the putative failure of macroeconomic theory:

    That Old-Time Economics

    … it’s wrong to claim, as many do, that policy failed because economic theory didn’t provide the guidance policy makers needed. In reality, theory provided excellent guidance, if only policy makers had been willing to listen. Unfortunately, they weren’t.

    And they still aren’t.

  4. farmera1 commented on Apr 17


    Notice that the drought is spreading again into the midwest into some pretty productive corn and soybean country. This could have a large impact on crop production. The West is drying out to the point it looks dangerous.

    With the drought growing all eyes are turning again to desalinization especially in the west. It is a costly process but the Israelis seem to have come up with a plant that will reduce the cost at least theoretically. Desalinization is an energy hog, and until efficiencies can be had, water from this process will be very costly. The process in the new Israeli plant just seems to bigger (bigger pipes etc) more efficient motors but not really new technology or break throughs.


    But the plant will reduce the cost of water so obtained, at least theoretically..

    • willid3 commented on Apr 17

      maybe they need to sign up for Obamacare?

    • Whammer commented on Apr 17

      @rd, you need a sarcasm font! ;-)

      How “regular Americans” can vote for a party that thinks the estate tax is a big problem is just beyond me.

      Current GOP needs to be burned to the ground, and we need some sane conservatives to do something different.

  5. hue commented on Apr 17

    re big oil & auto, about?

    Trap Flix: Making Hood Movies For The Hood (medium well http://bit.ly/1DQfzyY) fo sizzle my nizzle, Boyz in da Hood, holds up decades later

    Gwyneth did the food stamp challenge wrong. So does everyone else. (vox http://bit.ly/1yBZm0g) Vox faces Twitter backlash over Gwyneth Paltrow ‘explainer’ (digiday http://bit.ly/1yzXHIm ) not a bad actor, like Barney Rebel, b4 conscious coupling and uncoupling. saw her on SNL, every skit was a different person, character

    How the ‘Rich Kids of Instagram’ spent their spring break (biz insider sans stalwart http://read.bi/1FSujuk )

  6. Jojo commented on Apr 17

    April 9, 2015
    ‘Warm blob’ in Pacific Ocean linked to weird weather across the U.S.
    Hannah Hickey

    The one common element in recent weather has been oddness. The West Coast has been warm and parched; the East Coast has been cold and snowed under. Fish are swimming into new waters, and hungry seals are washing up on California beaches.

    A long-lived patch of warm water off the West Coast, about 1 to 4 degrees Celsius (2 to 7 degrees Fahrenheit) above normal, is part of what’s wreaking much of this mayhem, according to two University of Washington papers to appear in Geophysical Research Letters, a journal of the American

    Geophysical Union.
    Picture graph

    “In the fall of 2013 and early 2014 we started to notice a big, almost circular mass of water that just didn’t cool off as much as it usually did, so by spring of 2014 it was warmer than we had ever seen it for that time of year,” said Nick Bond, a climate scientist at the UW-based Joint Institute for the Study of the Atmosphere and Ocean, a joint research center of the UW and the U.S. National Oceanic and Atmospheric Administration.


  7. Jojo commented on Apr 17

    More Older Adults Are Becoming Inventors
    APRIL 17, 2015

    Like many inventors, Bob Nepper, 82, is a compulsive improver. Mr. Nepper, an electrical engineer who lives in North St. Paul, Minn., has pet projects that have included a self-guided lawn mower and an outside faucet that can run hot and cold. His basement is stocked with tools like a lathe and a milling machine to craft his ideas.

    But Mr. Nepper, who retired from the 3M Company decades ago, is most obsessed with building a low-cost way to purify water in the world’s poorest countries.



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