10 Friday AM Reads

The week ends with some ugly futures; no worries, we are sending you into the weekend with our free range, locally sourced morning train reads:

• Relax, rate hike virgins! Fed shouldn’t kill stocks (CNN Moneybut see Investors Switch Out of U.S. Stocks and Into European Equities (Bloomberg)
• Hedge funds are having trouble hiring, and it’s changing the Wall Street ecosystem (Business Insider)
• The Big Short is The Wolf of Wall Street with a conscience (The Vergesee also ‘Big Short’ hero goes long mortgage start-up (CNBC)
• Economists: Buckle Up, Climate Change Is Going to Be a Rough Ride (Slate)
• Balance of Power Between Home Buyers and Sellers is Shifting in U.S. (World Property Journalsee also New York’s Biggest Rental Tower Is a Stand-Alone City, Pet Spa Included (Bloomberg)

Be sure to check out our Masters in Business interview this weekend with Jazz guitarist and singer John Pizzarelli.

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What's been said:

Discussions found on the web:
  1. catman commented on Dec 11

    Yesterdays comments were something. Here’s a shout out to our genial host. Grantham did a total evisceration of “the narrative”. Common currency hereabouts.

  2. VennData commented on Dec 11

    Rate hike Virgins! Classic!

    • Iamthe50percent commented on Dec 11

      And it would still look better than Trump’s hair!

  3. VennData commented on Dec 11

    “…Thirty-five percent of Republican primary voters support Trump, up 13 points since October, and his highest level of support in CBS News polling…”


    He’s a shoo in. now he might not be a top the GOP ticket, if not it will be on top of the Tea Party Ticket


    And his coattails for adding other billionaires into the House and Senate will be long and distinguished. We need more plutocracy and less garbage about people’s lives who matter.

    • Iamthe50percent commented on Dec 11

      Leaving us with the choice of Trump or Hillary. Maybe I can emigrate to Germany.

  4. VennData commented on Dec 11

    ​Mark Zuckerberg should spend $45 billion on undoing Facebook’s damage to democracies

    ​”… because Facebook offers conflicting versions of the truth, because no one trusts what they read — then peace is impossible, too…”


    The US hasn’t found a way to offer an un-conflicted version of the truth. Why is it Facebook’s fault?​

    Why not invest in other news sources people can rely on? If that doesn’t work, capitalism is doomed, if only shill outfits that thrive are like Fox News and the Wall Street Journal with their full of half truths and spin then humanity will be electing idiots like George Bush and Ted Cruz until we learn not to or get wiped out.

    Ted Cruz gets a pass from right wing media to say he didn’t cause the shutdown, he didn’t dis Trump. This is not Facebook’s fault. There will always be kooks out there. We must as a planet, educate, and share facts, information, and get people out of this silly emotional narratives.

  5. Concerned Neighbour commented on Dec 11

    “Opinion: Stocks are more overvalued now than at 2000 and 2007 peaks”

    Finally this kind of analysis is making it into the mainstream press. This has been true for some time now.

    But I suppose we shouldn’t worry, because 1) the global economy is doing so incredibly well; and 2) the 2025 forward P/E is a mere 12. (OK, I may have made both of those up).

    • willid3 commented on Dec 11

      depends on what you mean by doing well. if you mean that the top.10% are just killing it, yes its just great! if you mean for the bottom 99%, no so great

      but since the top .10% can get their way (see Trump and others) what ever the erst of say. since we dont get to vote more than once every 2 years. not that our politicians are all that when they are running for office, which does seem to be all the time, but mostly its to money for running the next campaign.

  6. rd commented on Dec 11

    Ned Davis does an interesting twist on stock market valuations and concludes it is very richly valued. http://www.marketwatch.com/story/stocks-are-more-overvalued-now-than-at-2000-and-2007-peaks-2015-12-11?dist=lcountdown

    Please note that while I believe the stock market is over-valued and we will have a nasty bear market starting sometime in the next couple of years, it doesn’t mean it is a “bubble”. The NASDAQ was a bubble in 2000 because many of the valuations there were based on bizarre metrics like clicks and had no basis in reality. As a result, the NASDAQ dropped over 80% in value and took more than a decade to come back to its original high with a very different group of firms. The current S&P 500 is over-valued and could easily drop 50%+ but would still be made up of viable functioning companies with real cash flows that would likely have their fundamental business models largely unchanged, although there would likely be management changes and compensation structure changes.

    If you have a diversified portfolio, holding international stocks as well as US stocks, then the overall P/E of the global stock portfolio isn’t grossly out of line with historic norms.

    • Concerned Neighbour commented on Dec 11

      I would argue there are certainly areas of especially bubbly valuations, such as biotechs and parts of tech. But the main point is that there is pretty much nowhere to hide in these “markets”. Whether that’s the fault of central bank pumping, buybacks at record highs, index funds, algorithmic trading, etc. is open to debate.

    • willid3 commented on Dec 11

      kinda wonder why stocks are so high when sales arent growing. profit seems to be doing well. for now

  7. VennData commented on Dec 11

    OK, OK, I admit I love the pans to the NFL owner’s boxes. I love watching Jerrah Jones stew, Virginia McCaskey turn her nose up at the opposition cheerleaders, or watch Jerry Richardson hardly breath, comatose

    But why are they so bored? Seems to me 99% of Americans who owned a football team would be partying it up, raging, drinking, smoking weed with attractive celebrities and models.

    That’s what I’d be doing.

    What’s wrong with America’s rich?

  8. VennData commented on Dec 11

    What social science tells us about racism in the Republican party

    “…The same argument has been applied to almost every recent presidential election: President Ronald Reagan was criticized for invoking the image of the welfare queen to imply that African Americans were lazy crooks who bilked the government. President George H. W. Bush’s infamous Willie Horton spot told the story of a black man who committed violent crimes while on furlough from prison, a move that critics say won Bush supporters by exploiting white Americans’ fear of black crime…”


    Remember the facts. Forget the rhetoric. The GOP is bad for America

  9. tigerlilac commented on Dec 11

    Oil seems to be the market’s Judas Goat but it has a very uneven effect within the energy sector itself. Absent companies overburdened by debt while juggling very high distributions (e.g., KMI and some other MPs) that have gone off the rails on the recent plunge in oil prices, I keep looking askance at Big Oil companies like CVX. It has maintained its sizable dividend and promise to protect the balance sheet by slashing cap x (as if that doesn’t have a downside).The market has responded by increasing CVX’s share price by 27% as of mid day today from the low point of oil prices back in August, despite WTI crude prices being substantially lower today. Juxtaposed to that, I see that shares in USO, the oil commodity fund (which is the size of a pimple on Chevron’s backside), are down 11% from the previous August low point. By my math, 27 plus 11 is 38%. If Mr. Market is so wise, what am I missing that makes me so perplexed by arbitrage in pricing?

  10. Jojo commented on Dec 11

    Undercover Activists Buy Off Professors in Climate Sting
    by Ben Jervey
    December 8, 2015

    With the second week of climate talks in a relatively steady holding pattern, the most interesting news out of Paris today had nothing to do with the negotiations themselves. Greenpeace used the platform of COP21 to release results of an undercover investigation that revealed just how easy it is to pay an academic to say whatever you want him to.

    While posing as representatives from oil and gas companies, the Greenpeace U.K. investigators struck deals with academics from Princeton and Penn State to publish academic articles that promoted the positive benefits of carbon dioxide and the positive impacts of coal for the poor.

    One of the academics exposed, William Happer of Princeton, is actually testifying at Ted Cruz’s Senate hearing on protecting climate denial this afternoon.The details from the sting are a fascinating look into how academic credibility can be bought.



  11. Jojo commented on Dec 11

    Donald Trump’s proposed Muslim-entry ban has a precedent — and its ‘scars are still being healed’ today
    Maxwell Tani
    Dec. 8, 2015

    Donald Trump’s proposal to temporarily ban Muslims from entering the US in the wake of the terrorist attack in San Bernardino, California, last week has been roundly criticized by many political figures across the ideological spectrum.

    Some critics immediately denounced his plan as “fascist.” But Trump’s proposal actually mirrors similar US race-based immigration laws from the early 20th century.

    The first major immigration restriction passed in the US in 1882, halting Chinese immigration and barring naturalization for Chinese immigrants. At the time, xenophobic fears grew that Asian immigrants were, as Asian-American historian Erika Lee describes it, “unassimilable.”



  12. tigerlilac commented on Dec 12

    No man is an island an neither is our country. The economic dislocation across several continents along with the rise of nationalism in not only Russia and Europe but in the US as well associated with the drop in energy prices should be a concern of everyone.

  13. Silversem commented on Dec 12

    Increasing nationalism is a big threat to all of us. In the US and in Europe (I’m from The Netherlands). I worry about that more than about the shitty state the economy is in. Nationalism drives people apart and results in war.

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