Friday is here, as is the best set of morning train reads you will see:
• The Fear Factor Behind Stock Prices (Bloomberg View) but see Jeremy Grantham: Markets Headed to ‘Bubbleland,’ (MoneyBeat)
• Housel: Investing is a great way to learn about human behavior—and about yourself (WSJ)
• With All Due Respect, Mr. Icahn (Irrelevant Investor) see also How hedge-fund geniuses got beaten by dart throwing monkeys — again (Marketwatch)
• Scientific Retractions are on the Rise, and That May Be a Good Thing (Priceonomics)
• How Israel defies drought (CS Monitor)
Investment analysis for the longer term.
Carbon Tracker
Carbon Tracker is a not for profit financial think tank aimed at enabling a climate secure global energy market by aligning capital market actions with climate reality.
U.S. Inflation Undershoots Fed’s 2% Target for 37th Consecutive Month
Fed officials have said they expect to raise short-term interest rates later this year. Their first rate increase will come when the labor market has further improved and they are “reasonably confident” inflation will soon move back to 2% ….
NB: Calling it a target is clearly inaccurate but, if it’s actually a ceiling, then it’s just as clearly too low.
As predictions go seeing the climate 50 years out is hard to impossible. It is probable that the impact from Global Warming is off, either exaggerating the impacts or understating the impacts. Sorta like predicting what happens to the stock market.
Some are starting to believe we have understated the impact of the increasing c02 levels. And yes c02 levels are increasing rapidly and yes c02 does let light pass through, but c02 traps the heat that is then radiated from the earth as a result of that light hitting the earth in this case, thus the name green house effect. We are rolling the bones with our grand kids lives, to some unknown level.
http://www.businessinsider.com/new-lancet-climate-change-report-2015-6
Thank you. Last paragraph is a real pearl:
“The difficulty, essentially, is ourselves: the tendency of humans to ignore or discount unpleasant facts or difficult choices, the nature of companies and countries to defend their own rather than collective interests and the narrow, short term horizons of most human institutions, which feed into the difficulties of global negotiations,”
hard to fix poverty if we dont know what is going on. seems that most of them are working.
http://www.eurekalert.org/pub_releases/2015-06/byu-moa062515.php
cause some seem to think the poor arent working and standing on the street corners. but they arent
so who really supports the American worker? and the small business that exists because of them?
http://www.nytimes.com/2015/06/25/opinion/whos-speaking-up-for-the-american-worker.html?partner=rss&emc=rss
economists seem to think that its ok to destroy US jobs, so that others might have lower prices *(maybe a few tenths here and there lower) and others can have a job (while earning maybe $100 a month). of course the Americans lifes are destroyed, but nobody even checks to see how that works out. and then they wonder why doing more of the same leads to a revolt?
that drought in the West? wasnt just caused by mother nature
we humans had a hand in it, because of our policy choices
http://www.npr.org/2015/06/25/417430662/how-a-historical-blunder-helped-create-the-water-crisis-in-the-west?utm_medium=RSS&utm_campaign=aroundthenation
Re: Stock market trouncing rebounds
The article looks only at the index price, not its total returns. As a result, there are apples to oranges comparisons.
In 1932, the DJIA dividend yield was in double digits. As a result, and investor (as opposed to a trader) actually recovered their total portfolio value much faster than the price index shows if they just hung onto their shares and re-invested dividends. Also, there was significant deflation in the Great Depression, so the headline percentage loss in nominal values was softened quite a bit when purchasing power was considered.
I looked up the Greek ETF GREK and it has a yield of 1%. It looks like the Nikkei 225 is also yield around 1%. It will take a very long-time for re-investment of these dividends to make any serious difference.
So the real comparison needs to be made between countries where business prospects really have collapsed versus periods like the Great Depression when the markets appeared to overshoot how bad business really was (the companies could still produce significant cash to pay dividends).
How bubbles form and burst:
“The tone from the state media is particularly helpful to retail investors like me, as I have a job to do and am pretty busy,” said Yao, 35. “China’s stock market is really different from other countries. The government surely has some measures to control the movement.”
This sounds like small investors in China are investing because they don’t think the Chinese government will allow the stock market to collapse. And we thought the Greenspan Put was powerful.
http://www.bloomberg.com/news/articles/2015-06-26/the-loudest-voice-in-china-s-stock-market-is-changing-its-tune
I think Scalia is missing an important thing in his ruling. It has been clear for a year now that the entire Obamacare ruling would turn on what “established by the State” means. At any point in this, Congress had the opportunity to pass a simple 1-sentence resolution that defined which of the two potential meanings was meant, and it didn’t. It wouldn’t even have had to go to the President’s desk for signature, as the resolution itself would have been a clear signal that even the Supreme Court could have understood. Instead, Congress elected to leave it up to the crap shoot of the Supreme Court.
http://blogs.wsj.com/law/2015/06/25/dissent-opinion-on-health-law-subsidies-ruling-key-excerpts/?mod=trending_now_3
But Congress did spend the time to define what craft beer is. At least we know what areas of the economy Congress is willing to focus its attention on.
http://www.marketwatch.com/story/sam-adams-is-about-to-be-kicked-out-of-the-craft-beer-category-2015-06-25?dist=afterbell
Scalia cared only for dogma not for “intent” of the legislations.
If the feds wanted to “put it up to the several states” they would use the term “several states”.
The option of the federal or individual state exchange was clearly intended and if the law was to allow annulling PPACA if a state decided to “nullify” it then they would have to reverse Jackson v Calhoun “crisis” of 1831.
How could the supremes reverse “nullification” [of collecting tariffs] to allow nullification of providing a modern form of public good?
Loyd’s of London
“Food System Shock
The insurance impacts of acute disruption to global food supply”
http://www.lloyds.com/news-and-insight/risk-insight/library/society-and-security/food-system-shock