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Dec. Durable Goods: +4.6% vs. +1.6% expected, +0.7% prior. Ex-transport +1.3% vs. +0.4%...

Dec. Durable Goods: +4.6% vs. +1.6% expected, +0.7% prior. Ex-transport +1.3% vs. +0.4% expected, +1.6% prior .
Comments (123)
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Go $UXI!

     

    http://seekingalpha.co...
    28 Jan 2013, 08:35 AM Reply Like
  • mrdirt
    , contributor
    Comments (485) | Send Message
     
    Numbers based on small sample size.
    Due to the small monthly sample, these 89 categories have been combined into 65
    publication levels. The survey methodology assumes that the month-to-month changes of the total
    operations of those companies in the monthly survey effectively represent the month-to-month
    movements of all establishments that make up the category. The current coverage levels in the survey
    show that reported data in the monthly survey represent approximately 60 percent of the shipments
    estimates at the total manufacturing level. Data published represent manufacturing in a calendar month.
    The data collection is based on a voluntary survey authorized by Title 13 of the United States Code.
    28 Jan 2013, 08:50 AM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    Another blowout economic report. The US keeps growing at a faster pace.
    28 Jan 2013, 08:54 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10865) | Send Message
     
    Yeah, and interest rates rose past 2% as well..Sure Ben is happy with that !!

     

    Here comes inflation...
    28 Jan 2013, 09:22 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Year-over-year, however, new orders are up just 0.2%, reinforcing the long-term declining trend in place since 2010. More importantly, however, non-defense capital goods orders excluding transportation – a proxy for business fixed investment used in the GDP calculation –rose just 0.2% in December, down 4.2% year-over-year. . If this month’s regional manufacturing indices are any indication, durable goods have a lot more to prove to indicate enough gains to spur hiring above its current trend.
    28 Jan 2013, 09:41 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Awesome! Slow hiring means sustained high unemployment and more QE!!!!!!!!!
    28 Jan 2013, 09:55 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Absolutely. What it really means is that the economic activity doesn't really support the fundamentals for earnings to support the valuations. This could lead to a risk-off event which would mean equities down and treas yields down. Then, it will be up to the Fed to up QE, which it seems likely they would. Ideally, you would want to sell the peak, move into bonds, wait for the gains in bonds, then sell the bonds, buy back into equities right before QE is ramped up even more, which will then rally the asset prices in another risk-on move, and presto you just had a bunch of wealth from the general populace transferred your way.

     

    Thank goodness for the Dancing With the Stars electorate our gov schools have created, because they keep voting for their wealth to be transferred from them to me. This is how you create an aristocracy and the scenario where the rich get richer and the poor get poorer. Now, if we could just create another subsidy that targets real estate more specifically, I could really benefit from that wealth transfer.
    28 Jan 2013, 10:04 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Did you see that UMDD is up 25% YTD?
    28 Jan 2013, 10:08 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Its all part of the risk-on that occurs with gov consumption subsidies. The problem is these bubbles burst, and you need to not get suckered in to thinking they never will. You need to observe macro fiscal and monetary policy to determine what effect they will have on net Fed note creation and how effective those notes will be in the economy.

     

    Right now based on the interplay of monetary and fiscal policy, the Fed is trying to create Fed notes and the Executive and a large part of the Legislative is working to destroy those notes and/or make the remaining ones less effective. For 2013 it seems the Fed is going to win to some degree, thus I could see 1600 on the S&P and maybe 2.40 on the 10 yr. Then in 2014, I could see fiscal policy really putting a dent in Fed note creation, and the risk-off returning.

     

    This gives me a window for real estate to do better, but a direct policy subsidy like letting people buy bank owned real estate with no tax on any gains for the next 10 years would really make that window much wider. We could tell the Dancing With the Stars electorate that its for the common good of our one big family, and they would probably vote for it.
    28 Jan 2013, 10:22 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Let's make money in 2013. We will worry about 2014 when the time comes.
    28 Jan 2013, 10:27 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    All I can say is good luck to those who think they're prescient enough to time those cycles accurately and make money. Most of the folks who spend every waking hour worrying about "risk on" and "risk off" (stupid cliches, if there ever were some) mostly achieve "gains-off" results.
    28 Jan 2013, 11:39 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    I agree, but for me its a job requirement and unavoidable, and its rendered another $4 to $5 million in gains for me since 2009. So I come to SA to think out loud and get some responses to help me keep that going. For most of the retail folks, I wouldn't advise it, I'd tell them to follow your plan, but I have to follow another.

     

    I've been trying to come up with some metrics to quantify how net Fed note creation affects asset prices, and maybe someday, with enough people thinking along those lines something will be developed, but right now I just have to look at it from a macro level. Its like watching a football game where one of the teams constantly lines up backwards. You don't need a lot of fancy charts and graphs to fiqure out who is going to win that contest.

     

    Also, I come to SA to pick fights with coercives. Watching them get mad at me and call me names is very relaxing.
    28 Jan 2013, 11:50 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    I'm assuming you're a money manager of some sort. You manage some fund that's compelled to trade?

     

    As regards Fed note creation and impact on asset prices, one of the things I see is that it's been very inefficient on the equity side, as vast sums of money are parked elsewhere. The question in my mind becomes whether that money gradually flows to equities or gets reeled back in by the Fed. My guess is the former if and until we see some definitive signs of inflation. Given the present demand-supply equation, inflation doesn't appear to be imminent.
    28 Jan 2013, 12:02 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Macro,
    Have you seen this:
    http://bloom.bg/ViMx1R

     

    ???

     

    Besides, Dec. durable goods uptick was mainly due to G.E. and the massive military order it got from Government. I wouldn't count on that for making a sound economic analysis.
    Houses weren't so good either, were they ?
    Still, I wish you luck.
    28 Jan 2013, 12:17 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Filipo, Never bet against QE.
    28 Jan 2013, 12:28 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    jhooper, Are you required to beat market indices? Do you consistently beat market indices? Do you believe that money managers who do not consistently beat market indices should be fired?
    28 Jan 2013, 12:29 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Tack

     

    I deal exclusively in bonds and 95% of that is agencies. The portfolio runs between $50 million and $100 million, just depending on when its good to get in and get out. So interest rates are what matter to me, and its the direction of interest rates that will determine if I am looking at MBS, callables, bullets, etc. Equities are a guide for interest rates, but only from an inverse perspective. Equities can reflect cash flows, but it depend on where the cash flows are coming from and going to. For instance, before LTRO you could have interest rates going down and equities going up because the cash flows from Europe where going into equities and bonds at the same time (which just means the prices of both were going up).

     

    So for me its about looking at macro trends that will drive interest rates, and interest rates go up for two reasons.

     

    1. The demand for capital outstrips the supply because economic opportunities are coming online faster than the capital is (the economy is just taking off on a real economic boom like in a recovery)

     

    2. Credit risk - wherein, in order to attract buyers of your notes you have to keep offering them more and more rate

     

    Neither 1 or 2 will apply to US for a long time, thus for a very long time rates will stay down. What we will get are short term stimulus risk-on bubbles (equities up and yields up) followed by the bubbles popping. This will all be the result of the interplay between fiscal policy and monetary policy creating or destroying Fed notes which are used to bid up asset prices.

     

    Overall, the economy will grow, but it will just be anemic. Granted the President or Congress could kill that, but they have to do something drastic to do it overnight. So in the next few decades of anemic economic growth, we will have generally lower rates but with a growing equities market. Equities won't shoot to the moon in a parabolic fashion, but they will trend up. The uptrends will be interupted by either fiscal policy or monetary policy "cancelling" Fed notes. When that happens risk-on switchs back to risk-off because the overall trend of the economy is anemic. Its in that zone, that I grow the portfolio or shrink it.

     

    If I could buy equities now, I would do so. Then I would sell them when it appeared the interplay between fiscal and monetary policy suggested net Fed note destruction and buy bullet agencies. Then when equities retreated and it appeared fiscal or monetary policy would shift back towards net Fed note creation to deal with that asset deflation, I would sell my bonds for gains, and go back to equities. Based on this, if I were a money manager, then I would suggest people just stay in equities and hope they don't need to pull anything out at a time of net Fed note destruction.

     

    The pattern I described above is a centuries old pattern. Its part of the coercive power of a gov. It allows the gov to transfer wealth. The transfers inflate asset prices to the sectors receiving the transfers. I'm simply recognizing it for what it is, and using it to have some of that wealth transferred my way.
    28 Jan 2013, 01:33 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "Do you believe that money managers who do not consistently beat market indices should be fired? "

     

    I never use money managers, so I can only say is that they are a product just like anything else in the economy. Do your research before you use one, and if the product doesn't perform for you, stop paying for it.

     

    My job is to move with the direction of interest rates, so that's what I try to do.
    28 Jan 2013, 01:36 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    Being stuck only on the bond side is a bit challenging. The agency field is even more so because of the extensive use of leverage in that arena. I did very well in agencies, but have been consistently trimming positions because the pressure on rates will increase as capital flows start to migrate toward equities. I like floating-rate and convertible issues in this environment.

     

    I am not sure about the maintenance of low rates for a lengthy time because one part of what's made that all possible has been the manifest fear that has made people opt for what they perceived as 'safe" over what offered better returns. This was both a post-2008 effect and the "Europhobia" effect. Now, those impacts are ameliorating, and many investors are finding that safety may be overrated, as rates begin to rise and bond prices fall, not to mention that many of them have been living on a net-loss basis, i.e., their expenses exceeded their incomes, but they were too scared to do anything about it. At some point, people are forced back outside into the sunshine. I think we're seeing the beginnings of that behavior.

     

    Yes, absent some black swans, we'll climb the wall of worry.
    28 Jan 2013, 02:00 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Macro,
    If it's the Ray Dalio matrix you use, there is 1 missing parameter, and that's growth.
    I don't deny there has been a lot of rumor lately about global growth coming in, but Shiller doesn't see any in the US housing market and the above Bloomberg article explicitly warns for too much optimism. The growth we all thought was on the brink to appear, me included, might be a perception, a fata morgana. Housing figures were disappointing. And you probably know how important US housing is in the whole picture, don't you ?

     

    QE might still prove to be a hindering factor rather than a favoring one: I still don't see many horses (private or corporate) coming to drink. Currency debasement may still be the cause. The real economy doesn't really get any better, does it ? Caterpillar ?

     

    I think we might see lots of money flowing back into the shelter of bonds from now on. Bond yields might go down accordingly.
    28 Jan 2013, 02:22 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "At some point, people are forced back outside into the sunshine."

     

    The part I am having trouble quantifying is Obamacare, Dodd Frank, and "taxing the rich". Taxing the rich is the least challenge, but considering the impacts of Ocare and DF are much more difficult. Ultimately they are just taxes too, and like all taxes they raise the fix costs or production. As such, the sunshine that will be needed to lure people out will be overcast to some degree by these things. This mean continued pressure on employment, which means the tendency for people to spend on things in the CPI stays muted.

     

    When you combine the pressure on employment and the currency war (if you can call it a war) the demand for savings assets will stay higher for longer than we normally anticipate. With lots of demand for savings assets, then you don't need to attract people with rate. I could see rates staying between 1.50 and 2.50 for the 10yr for the next 10 yrs.
    28 Jan 2013, 02:23 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    filipo:

     

    Housing disappointing? What, one month? Housing sales were up year over year 6.0% in 2012 and 5.9% in prices. Hardly "disappointing." And, inventories remain very low, providing further impetus for gains.

     

    No way money is going to flow back toward bonds unless we get some major economic dislocation. The bond outflows have just commenced.
    28 Jan 2013, 03:05 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    Obamacare is wholly priced in, and its impact, as a tax on most people, isn't that severe in practice. The most onerous tax, the 3.8% on home profits doesn't even come into play for most sellers. I hate Obamacare, but I don't think it's going to tank the economy.

     

    Employment has been the largest canard for the average investor, who somehow thinks the unemployment rate somehow dictates the economy and/or the stock market. The corporations were carrying lots of dead wood that they've now jettisoned. It's merely been transferred from "private welfare" to the public dole. And, increasingly hidden in the official unemployment numbers is the growing number of workers holding part-time and cash-paying jobs that are off the radar.

     

    As the benefits paid to "unemployed" become more lucrative, people are less inclined to give them up, so they work, but it just doesn't show up "officially." That's why the economy and is doing a lot better than people can understand, so they conjure up all kinds of conspiracy theories as to how it's all "phony." But, it's not; it's just that many investors made the wrong calls by following all the usual endless mass-media bleating about the poor, beleaguered unemployed. The same applies to the endless whining about the plight of home owners.

     

    Personally, I think the likelihood of endless low rates is next to nil. There are too many pressures re-emerging for growth in the U.S., Europe, China and other emerging markets for things to stay moribund. Recessions, pessimism and excess caution are always transient human endeavors. They are the anomaly, not the norm, and it won't be any difference this time. We're already wearing out "Death-Valley" thinking.
    28 Jan 2013, 03:16 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "Obamacare is wholly priced in,"

     

    Maybe for the explicit taxes, but I'm more concerned with the non-explicit taxes. A regulation is a consumption subsidy, and like all subsidies it bids up the price of the thing being consumed. In this case healthcare. So the price of healthcare is going to go up along with insurance premiums. As such, people will pay more for less, and that extra cost is a tax. That tax takes away from the ability to buy other things in the economy, and thus earnings for equities struggle to justify their prices. This will cause a battle between risk-on and risk-off for quite some time. Also, don't think Obamacare is over. Once a nation goes down this road, they are forever battling with paying for the subsidy and thus it is perpetually being reformed and expanded. There is no way the market could price in all those unknowns.

     

    The same will be true for Dodd Frank. The CFPB has almost untold powers that almost makes them another branch of the gov. Regulations on the financial/banking industry are basically the same thing as raising the FF rate or shrinking the Fed's balance sheet. So basically DF is a "cancellation" of Fed notes.

     

    Also, they are not done with more taxes on the rich. That's just getting started. Obama and Boehner don't know how our monetary system works. They have been educated to think as if we are on a gold system or gold standard. So they think expropriation taxes (income taxes) fund our gov. Their focused on the debt for the debt's sake. This will be bad for sentiment, so plenty of fear factor there that will cause the rush to risk-off from time to time.

     

    Now add to this the mercantilists economies of Europe and Asia. They have to buy our treas and Fed notes to keep their currencies competitive to ours. This means ready demand for our notes. As such we don't have to use rate as much to attract buyers for them.

     

    Yet another thing to add to this is that we are definitely on our way to the high unemployment anemic growth of Europe with a lack luster standard of living (unless you are a ruling official or a politically connected and favored industry). The difference for the US is that it has what Mises called a large "Capitalist's reserve". Europe just wasn't that wealth when it went down the path, but the US is. We could take a long time to burn through that capital till we reach a point that we are an anemic Europe.

     

    So while "endless" low rates do have a small chance of happening, it could be quite a few decades before we see rates in US tick up appreciably. It is even more likely that a 7 to 10 year bullet will win 80% of the time for the next 10 years, and the callables provide the me the best yield, though maybe not the best total return. I could see the S&P topping out in the 1600s and the 10 yr at 2.50, and then staying more or less range bound if Ocare, DF, and taxes on the rich get ramped up even more (which is a high probability - not to mention all the other fixes they will come up with for the messes they create but will blame on the markets).
    28 Jan 2013, 03:46 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    That comes across as a pretty pessimistic outlook, and when I was younger (now 63) I'd probably have bought right into the logic and been inclined, given my rather conservative politics, to think the worst was ahead and that I should prepare for calamity or at least moderate failure and disappointment in all things.

     

    What I've gradually learned in my "old" age is that the bark is always worse than the bite, and the media almost assures it, if nothing else. Also, there's something just relentless about human needs and desires that is as unstoppable as the tides, and it overcomes even the most asinine obstacles placed in the path by do-gooder, or even evil, governments. What occurs is that things are simply repriced, almost always higher, because governments think the solution to problems, or at least to mask them, is always to print more money. Eventually, if not sooner, that results in the money actually being employed, and that changes the real money supply versus the goods and services and leads to inflation, desirable or not. Inflation does raise all boats, despite the false belief of some that it damages equities.

     

    So, I've learned to be circumspect about onerous prognostications and to continue to seek value in a disciplined manner. The markets' gyrations are always the "noise," never the underlying reality. That reality is that the global population gets larger each day, and it wants and needs more, and somebody will figure out how to provide it. It's truly that simple.
    28 Jan 2013, 04:00 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    It's the perception that counts. Today markets anticipated good housing news. The Dec figures were lower, so they disappointed:
    http://bloom.bg/VjjXNJ
    That's why the Dow stayed flat.
    28 Jan 2013, 04:08 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    "There are too many pressures re-emerging for growth in the U.S., Europe, China and other emerging markets for things to stay moribund."

     

    Like China's companies' trillion debt ?
    http://bloom.bg/VjkCi0
    An anomaly ?
    Good luck with your optimism. I don't share it.
    28 Jan 2013, 04:17 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    fil:

     

    Debts denominated in one's own currency can be literally anything, as tough as that is to imagine for some. Ultimately, sovereign debt is just a placeholder for created currency. The amount of that currency that actually gets into circulation controls how that currency is priced, both against other currencies and against the supply of various good and services. When prices rise, revenues rise, profits rise and share prices follow.

     

    Sure, it's all nominal dollars, but that's the only kind we get to earn, spend and invest.
    28 Jan 2013, 04:26 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    Sorry to intervene, but...
    "Inflation does raise all boats, despite the false belief of some that it damages equities. "
    If inflation grows high, it depends on growth to have equities perform.
    Inflation with no growth crushes equities and bonds alike (rule n°1 of Ray Dalio's matrix); only gold florishes.
    Inflation with growth should be good for equities, but bad for bonds (rule n°2).
    28 Jan 2013, 04:32 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    fil:

     

    I don't need "rules." Go back and examine SPX during the major inflation of late '70's. The markets surged higher right along. It was only after Volcker sent rates to the moon that equities retreated.

     

    Moderate inflation will be beneficial for equities and housing, especially so if it runs ahead of rates.
    28 Jan 2013, 04:37 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    I appreciate what you are saying, and I'm not a gloom and doomer, so don't intepret my assessment that way, but when I look at the macro picture, I just see too many headwinds to any sort of vibrant robust recovery. Its sort of like making a prediction about phonograph needle manufacturers when CDs were becoming popular. So I have to do the same sort of thing for the general direction of interest rates. That's not to say that certain sectors will do well, new technologies won't come online, and efficiencies won't still be discovered, but that these things won't occur with the sort of gusto that they could occur at.

     

    When you look at the global macro economic setup from Asia's mercantilism, to Europe's mercantilist/welfare/s... and the US's tendency to drift that way, combined with the rising culture of dependency in the US driven by a gov school system that churns out millions and millions of dependent minded people every year, a vibrant leap forward in productivity and prosperity that will cause the demand for capital to oustrip the supply seems very small.

     

    No, what I see is a new normal of anemic, tepid growth over the next several decades, with perpetually higher unemployment, a slowly eroding standard of living, and the result is an environment where the demand for capital just isn't all that strong, credit risk isn't really an issue, and thus the two conditions for high interest rates just don't exist.

     

    I can appreciate your experience, but I read alot of history, and when you look at the patterns of the past and overlay it with the circumstances of the present, the foundation seems to be laid for a rather tepid situation for some time to come. One thing that could alter this course would be some new completely unexpected technology that offsets the taxation costs of gov regulation, and one thing on that front would be new sources of oil via fracking or some other technology that makes oil cheaper. Of course, we already see that being attacked. So, it just seems what is shaping up is a period of malaise. So yeah, there will be more people, and they will require things, but they won't have the sort of standard of living increases that will demand higher interest rates. You can do well if you know where to go, but for me I don't see anything in a macro sense that makes mean lean towards higher (at least materially higher) interest rates anytime soon.
    28 Jan 2013, 04:50 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    Yes, but there still was strong economic growth in the early '70's.
    That growth stalled when the oil price went through the roof, remember ? Yom Kippur war ? Iranian Revolution ? War Iran-Iraq ?
    From ca 1973 the SPX went down, logically.

     

    http://yhoo.it/14ph1G3#symbol=^gspc;range=my...

     

    I not only look at inflation, I equally ask about growth: is there any probability that you can take for granted that we will see economic growth of say ca. 3% in 2013 ?
    As an aside, growth would have the advantage to lessen the national debt.
    I want to answer that question positively without too much Government interference. Government interference often tends to be not so productive and not very lasting.
    Up till now I couldn't find enough parameters that offer me a statistical probability to found a positive answer on. Sorry.
    28 Jan 2013, 05:13 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    I understand your point, but the world has never seen rates like this, except in times of severe economic dislocation. Where I see the problem is that, in reality, we have an unsustainable inversion of living costs versus returns being offered by the present yields, Government-manipulated CPI stats notwithstanding. Even if the pressure on rates isn't going to come from huge demands for risk capital, it will emanate from a general migration away from 'safe' Treasuries and other bonds for the simple reason that people cannot survive forever on negative real returns, no matter how scared they thought they might be.

     

    So, just to earn higher returns, people will be forced to seek other investment venues because to stay at negative returns is to bleed to death slowly. Unless some new scare materializes, they'll get tired of hiding in bonds and bleeding. I think we're seeing the front edge of that phenomenon now.

     

    And, as money migrates away from Treasuries and other "safe" bonds at historic low yields holders will suddenly confront the effects of the bond convexity curve, which is hardly friendly at the current low rates. That will cause noticeable losses and expedite the exodus from bonds, driving rates yet higher.

     

    Call it "bond stagflation" if you will, but I see rates going higher. Keep in mind that there's acres of room to move higher with almost no negative impact on economic growth. In fact, it might spur growth, as lenders will be far more amenable to making loans at higher rates than in today's ZIRP environment.
    28 Jan 2013, 05:28 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "it will emanate from a general migration away from 'safe' Treasuries "

     

    Hmmmm....not that's something to think about. OK. That's why I'm here...hoping somebody will say something that I haven't thought about. Let me stu on that, and see if there might be something to mitigate that point.
    28 Jan 2013, 05:36 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    jhooper, Are you required to beat market indices? Do you consistently beat market indices?
    28 Jan 2013, 08:55 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    filipo, Again, I have no idea what the Ray Dalio metric is, but if he is a hedge fund manager, he is likely not doing so well in beating the market in the long run. Not sure I would take advice from a hedge fund manager.
    28 Jan 2013, 08:58 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    " hoop:

     

    That comes across as a pretty pessimistic outlook, and when I was younger (now 63) I'd probably have bought right into the logic and been inclined, given my rather conservative politics, to think the worst was ahead and that I should prepare for calamity or at least moderate failure and disappointment in all things.

     

    What I've gradually learned in my "old" age is that the bark is always worse than the bite, and the media almost assures it, if nothing else. Also, there's something just relentless about human needs and desires that is as unstoppable as the tides, and it overcomes even the most asinine obstacles placed in the path by do-gooder, or even evil, governments. What occurs is that things are simply repriced, almost always higher, because governments think the solution to problems, or at least to mask them, is always to print more money. Eventually, if not sooner, that results in the money actually being employed, and that changes the real money supply versus the goods and services and leads to inflation, desirable or not. Inflation does raise all boats, despite the false belief of some that it damages equities.

     

    So, I've learned to be circumspect about onerous prognostications and to continue to seek value in a disciplined manner. The markets' gyrations are always the "noise," never the underlying reality. That reality is that the global population gets larger each day, and it wants and needs more, and somebody will figure out how to provide it. It's truly that simple. "

     

    The above post is something all young people should read and learn from (and I am one of the young people).
    28 Jan 2013, 09:00 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Macro,
    Take two axes and cross them right in the middle.
    Draw an arrow on top of the vertical axe and an arrow at the very end of the horizontal axe.
    Write "inflation" on top of the vertical axe and write "growth" at the very end of the horizontal axe.
    That's the start of Dalio's metric.
    He is a very succesful hedgie, but a hedgie who has been succesful year over year. Read the links I gave you.

     

    Maybe you yourself are not a hedge fund manager, but the way you operate is very hedgie-like. 3x leveraged ? A 30% gain expectancy yoyoyoyoy ?
    29 Jan 2013, 02:58 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "away from 'safe' Treasuries"

     

    I'm going to call this "safe haven fatigue", and if you read through the FOMC minutes and QAs with Congress, its exactly what BB has been trying to create. While it is something to think about, its still more about feelings than fundamentals. Fiscal policy is set up to work against BB more and more. This represents an unprecedented change in the subsidy mix, and if there is one thing history has taught, is that gov regulations drive down the productivity of an economy. As such, the psychological effect of "safe haven fatigue" is going to face the very real fundamental of higher production costs and higher unemployment pressure. There is still plenty of fundamental factors to affect fear factors in the coming years. If I could see some large macro factor that could overcome these obstacles, then I could see a reason for interest rates to rise, but a psychological factor that is facing very real fundamental factors just isn't all that convincing.

     

    Its like watching your football team constantly lining up backwards against the opposing team. It isn't pessimistic to say their chances of winning are very small. Its just a fundamental evaluation of their strategic and tactical approach.
    29 Jan 2013, 06:38 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    "Safe-haven fatigue" isn't merely driven by "feelings;" it's driven by the very real-world reality that yields are negative versus even the stated rates of inflation, much less what they actually are. This is not a sustainable situation, either for individuals or the general economy.

     

    New fear factors will only emerge if there's a new "black swan," not from day-to-day economic apprehensions. It's precisely the fatigue of worrying about the next "wolf" that doesn't arrive that is going to find people migrating away from low-yield bonds.
    29 Jan 2013, 06:56 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    "its exactly what BB has been trying to create."
    Indeed, and he'd better acknowledge what he's wishing for. Safe haven fatigue could make rates rise more than is healthy for the economy.
    That in turn might induce BB to still create more money as a tool to suck up Treasuries so as to lower the rates again.
    In the "end"... it's a never ending story with ever more newly made money involved, a spiral that only serves it's own subsistance but that hardly helps the real economy, on the contrary, it undermines confidence in the currency.
    This is a catch22 situation in which BB is the dog that runs in order to grasp his own tail.

     

    "This represents an unprecedented change in the subsidy mix, and if there is one thing history has taught, is that gov regulations drive down the productivity of an economy."

     

    Exactly !
    29 Jan 2013, 07:02 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "This is not a sustainable situation, either for individuals or the general economy. "

     

    True, but the question is, "how long?". Look at how long people put up with poverty under the Soviet Union. Look at how long they have put up with it under N Korea and Cuba. The Japanese have been doing a similar thing via their concept of Uchi Soto and their willingness to use their savings to finance their "stimulus" and their 10 stays around 1%.

     

    One day it has to turn around, but if a tyrant manages correctly, the wealth transfer can go on for decades. That's in general what I see, at least for now. I'm considering what you said, but its not quite enough to convince me just yet. The US has a lot of wealth to burn through before people finally learn a lesson.
    29 Jan 2013, 07:14 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "at in turn might induce BB to still create more money as a tool to suck up Treasuries so as to lower the rates again."

     

    And its not just BB. The bank regulators are playing with new rules that will require banks to keep new levels of liquidity, and guess what they will give higher liquidity ratings too? That's right, US treasuries. Its a back door to creating demand for US treasuries, and creating ready demand it keeps the price of bonds up by keeping their rates down. There are just so many things from unemployment pressure to regulatory rule changes that are in place to keep downward pressure on rates, that I just entirely convinced yet that "safe haven fatique" will overpower all those factors. It might do it for a short term, like in all the other QEs we have seen, but for the next few years or so, there are still plenty of factors to keep the liquidity sloshing back and forth between risk-on and risk-off.
    29 Jan 2013, 07:18 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    filipo, I trade on my own account and do not charge people for the privilege of underperforming the market. So, I take major umbrage when you equate me with a hedge fund manager who in my mind as a group are leeches.

     

    Till you post Dalio's Sharpe Ratio I have no interest in his models.
    29 Jan 2013, 07:38 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Macro,
    Fair enough, but you shouldn't be so delirious about your own role in society.
    I wouldn't go so far as to describe you as a leech, but consider that all you practice is a zero-sum game: your gains are someone else's losses. The economy doesn't profit.
    The same counts of course for me, but I'm not boosting my merits.
    Meantime, forget about Dalio. One day, you'll meet him.
    29 Jan 2013, 09:21 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    fil:

     

    It you truly believe that every time someone gains in markets, somebody else must lose, then you don't understand how it all works. The "fixed-size pie" mentality has misled many.
    29 Jan 2013, 09:46 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    In this case, someone else lost heavily.
    29 Jan 2013, 09:59 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    fil:

     

    Perhaps, you can elaborate.

     

    Individual investors lose money all the time, when they make bad investment decisions, not because of the actions of others, who make better decisions. But, neither of these events addresses your previous comment, which tends to imply that all trades result in "winners" and "losers."
    29 Jan 2013, 10:09 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    You like me to go down, don't you ?
    Well, I accept the challenge and try to work it out.
    As long as M(n) grows, the economy grows, at least nominally.

     

    If we exclude tangible assets (infrastructure, housing, auto-motive...) and only keep M as a payable, suppose M doesn't grow, zero-sum games would result.
    Macro's gains would be someone else's losses.

     

    If M(n) doesn't grow but we take into account tangible assets, there's obviously no question of a zero-sum game: tangible assets most of the time (in a healthy economic environment at least) do grow and provide for remuneration of Macro's personal gains. Rising productivity is a strong general wealth creator.

     

    Fortunately M(n) also grows most of the time (not all the time), so he can be paid in sound money without hurting the counter-party.

     

    Don't shoot at me, if I'm wrong. All I took was a 2-year course in economic history.
    29 Jan 2013, 10:24 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    I don't want to rub it in to you, but as I anticipated:
    http://bloom.bg/VlmAi1
    Don't think I'm delighted by this. For me (and I hope for you too), our discussion was purely academic.
    29 Jan 2013, 10:51 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    fil:

     

    I learned long ago to ignore the myriad sentiment polls, which more often than not are in no way aligned with people's actual behavior. Generally speaking, people like to bitch and moan, and they do.

     

    I often joke that most of these people are interviewed at malls or otherwise on their way to buy something.

     

    Yes, our discussion is entirely academic.
    29 Jan 2013, 11:38 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "I learned long ago to ignore the myriad sentiment polls"

     

    Does that mean you ignore them when they are going up as well?
    29 Jan 2013, 11:47 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    Absolutely! As I always am fond of saying, "watch what people do, not what they say."

     

    I keep my eyes glued to corporate data, followed by industry data (e.g., retail, etc.) and, lastly, at various Government indices, although recognizing that the margin of error in these month to month is rather sizable.
    29 Jan 2013, 11:54 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    OK. Just curious.

     

    In case anyone is curious about who these guys are.

     

    http://bit.ly/WzcQkt

     

    Economic product is like any other product (and yes this includes the angelically motivated, no question of any sort of bias ever, gov data), caveat emptor.
    29 Jan 2013, 11:59 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    "Fair enough, but you shouldn't be so delirious about your own role in society.
    I wouldn't go so far as to describe you as a leech, but consider that all you practice is a zero-sum game: your gains are someone else's losses. The economy doesn't profit."

     

    I completely agree. But at least I do not swindle others while under performing the market. There is one thing to not add any societal value. There is another thing to destroy societal value and then get rich on the back of it. The hedge fund managers - frankly professional money managers of any sort - belong in the second group. I would make an exception for some select venture capital guys and some select private equity guys who actually build longstanding good companies that employ loads and loads of Americans while giving above average returns to investors. But they are few and far between.
    29 Jan 2013, 01:08 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "There is another thing to destroy societal value and then get rich on the back of it. "

     

    I knew there was something wrong with trying to let politicians or their appointees manage the economy.
    29 Jan 2013, 01:44 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    I didn't know that politicians were getting rich. I do agree that there is something wrong with letting professional money managers manage your money.
    29 Jan 2013, 01:53 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    http://bit.ly/Vu5p37

     

    http://nbcnews.to/WMZ4Me

     

    http://bit.ly/Vu5m7w

     

    Of course, what also needs to be considered, is what would they make, if being in office didn't offer a long time career choice?
    29 Jan 2013, 02:00 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    jh, Do you think professional money managers should get paid a cent for under performing the market?
    29 Jan 2013, 02:03 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    If people are willing to pay it, then sure. People also do drugs or listen to Beyonce, which I have no interest in. Its a voluntary transaction, but if they think they get value from it, that's their decision. I might think its wrong, but all I can do is offer an opinion. They can listen, or not listen. People can also hire a politician to steal for them. That's a voluntary transaction between those doing the hiring and the politician. What's not voluntary is the victim. Its the coercion you want to stop, not people voluntarily engaged in transactions.

     

    Here's another example of coercion and wealth transfer and how it creates bubbles.

     

    http://bit.ly/uRnDRv
    29 Jan 2013, 02:36 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    I would like to know your opinion, JH, on whether professional money managers should be paid a cent if they don't outperform the market.
    29 Jan 2013, 02:37 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    I don't really have one. Its not a product I'm interested in. So what other people do with their money is their business. If they feel they get value, then they are free to spend their money however they want. Beating the market implies a standard that everyone agrees to. While you might think one standard is reasonable, other people might find other things about some manager that they like. Its not up to me to tell them what to do. That's the beauty of a coercion free market. Its a constant election that happens all day, every day. It is a constant morass of comprise that allows people to engage in constant discovery. It only allows what people allow it to allow, and anything that is not perceived as adding value is eliminated. If people have reasons for constantly electing some money manager, that's their business.
    29 Jan 2013, 02:51 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    jh, Are you a professional money manager?
    29 Jan 2013, 02:54 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    No. The market wouldn't allow it.
    29 Jan 2013, 02:56 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Thank you JH for not being a leech.
    29 Jan 2013, 03:02 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    If you want to mount a campaign to change someone's mind, have at it. That's exactly what a coercion free market is all about. Its about enticing people via the exchange of ideas and information to adopt new patterns of behavior. After all, leeching used to be standard medical procedure and all the best and brightest minds swore by it as the bare minimum in medical standards.
    29 Jan 2013, 03:14 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    People's minds are changing as ETFs are becoming more popular by the day. I believe in another 20-30 years professional money management will be a relic of the past.
    29 Jan 2013, 03:16 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    One more.

     

    http://bit.ly/Vvy2wM
    30 Jan 2013, 08:29 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    Sometimes, some people are too defenseless (too ill, too weak, not brave or clever enough) to defend themselves.
    Sometimes, clever people set up schemes to lure defenseless people into giving them their money. Look what happened with Subprime.

     

    You ever watched a football game ? There is a referee. Everyone accepts that.

     

    In US finance industry of around 2008 there was no referee. Isn't that odd ? No regulation whatsoever ? You liked it when Madoff could play his tricks cause there was no SEC doing a proper job and as a consequence there were no markets for a few weeks ?
    Well, I didn't.
    I like markets, I like doing business and consequently I want a referee that I can trust when I play on the field.
    If you call an honest referee coercion, be my guest.
    30 Jan 2013, 03:01 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "If you call an honest referee coercion, be my guest"

     

    What makes an honest referee honest? What if the referee has incentives to be called a referee but not act like one? Should the referee interfere when he thinks a player has poor technique?

     

    Regulations rest on coercion, but coercion is dangerous, thus the regulators need to be regulated. So my contention is not that we have no referees, but that when we get referees we know what they are able to referee and that when they do referee they are kept honest. If this doesn't happen then the referee becomes more of a problem than if there were no referee at all.
    30 Jan 2013, 03:46 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    "If this doesn't happen then the referee becomes more of a problem than if there were no referee at all."

     

    Well, if you doubt the function of a referee at football, imagine a football game without referee.
    Just imagine a football game without referee. I guess that would hurt.... blood, limbs, corpses lingering all around. Lads can be furious, you know :-)

     

    I admit not all referees are honest (some get bribed, others have their preferences), but overall the disadvantage of having a certain % of dishonest referees doesn't outweigh the advantage of the principle of having a referee.
    I'd rather have a dishonest referee restraining the teams from bloodshed, even if one team wins most of the time thanks to his interference, then no referee at all because in that case there simply would be no game possible.

     

    Besides, the possibility of a referee being dishonest all the time all the games is statistically rather small: players of non-favoured teams would scream out loud their indignation and replace the culprit by another referee, more apt to regulate according the rules.
    There's an excellent analysis of that kind of statistical matter that has been done by Levitt and Dubner, an absolute must-read:
    http://bit.ly/XT0xQ1
    Esp.: "What the bagel man saw: mankind may be more honest than we think", p.46-

     

    Now,
    "Regulations rest on coercion, but coercion is dangerous, thus the regulators need to be regulated."
    I couldn't agree more concerning the case of the failing rating agencies who gave wrong ratings on financial institutions and even countries (Iceland f.i.). It's obvious there was something fishy with their ratings because no one regulated their actions.
    Question however is, were the rating agencies to be regarded as referees ? Not to my knowledge. They are (in)dependent companies that get paid to give ratings. They don't set the rules and they don't interfere when the rules are infringed.
    Sorry to mention the rating agencies, I know some people (probably not you) regard them as regulators.
    The only referee with authority was the SEC. But the SEC didn't act because involved in the banking system and because politics (to not to name Larry Summers) had judged that regulation is something obsolete and accordingly had reduced the SEC to an empty shell.
    I don't pretend that in my small country the system works much better, but at least we have a regulator regulated by Parliament. Not that that had any positive influence on keeping the toxic assets at bay, but that's another story. I guess the unspoken reputation of US bankers may at that time have played a major role in deluding the fin. industry in it's entirety.
    30 Jan 2013, 04:52 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    I guess what I am saying is that it is specious to say, "We have a problem, therefore if we just appoint a regulator the problem will go away."

     

    Gov is the regulator, but if you don't think about what that means and what the gov is going to do to regulate and even if the gov can regulate the thing you want it to regulate.

     

    The football analogy is a good one. It has a lot of the same incentives. You just don't appoint a regulate to be appointing a regulate. You have to actually think if they can do the job once you appoint them. That's based on incentive structures.

     

    So if you say the football team needs a referee, and one of the teams pay for the referee, you don't get a fair football game just because you hired a referee.
    30 Jan 2013, 05:27 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    "So if you say the football team needs a referee, and one of the teams pay for the referee, you don't get a fair football game just because you hired a referee."
    In reality all teams of the whole national league pay tuitions for the referees they use to regulate their games. Not just one team.

     

    "You just don't appoint a regulate to be appointing a regulate."
    Indeed not, UNLESS the ultimate referee is Parliament (Kinda Hawk Eye at tennis). Parliament has enough expertise in the house to judge bad and good referees (SEC-members in our analogy).
    In my country they appointed a special commission for that purpose. Since this commission is constitued by members of all parties there is check and balance and the system works.
    I'll be out of town for awhile now, so I won't be able to answer before a week.
    31 Jan 2013, 03:40 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Special interest pay for politicians, so guess who ultimately picks the regulator.

     

    If politicians and regulators could run business better than business, then the markets would pay them for that, so the evidence of their superior business knowledge would that they would be in the markets not in gov.
    31 Jan 2013, 05:54 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    it's a delusion to think everyone with brains is in business, not in politics.
    Be realistic. A gov. job has strong incentives that appeal to bright idealists.
    On the other hand, business often brings stress and that's a strong dissuasive.
    I'm off now, my wife's waqiting in the car. Tooodleoooo !
    31 Jan 2013, 06:06 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    This will be here when you get back.

     

    "it's a delusion to think everyone with brains is in business,"

     

    That's not the issue. The issue is one of incentives. Basically what you are saying is that everyone wants a certain product, but that no business will provide that product. Thus the gov has to force business to provide that product, and the gov has to give the business the information to create the product. The reason gov can do this is because it has really smart people that know how to create said product.

     

    Now think about that. If these really smart gov people know how to make a product that everyone wants but yet no one will provide, those really smart gov people have knowledge that is worth 100x what their gov salary is offering. Why would they give away information that is worth billions is not trillons and keep their gov salary which is only worth a few million? The proof of their superior intellect is the reward the market would give them for their superior market knowledge. As such, the proof of this said superior knowledge would be billions and billions of votes for them. Since people aren't giving them these billions and billions of votes, the only logical conculsion is that whatever intelligence they have is not enough to provide the superior product they claim they can produce.
    31 Jan 2013, 07:26 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    I'm back indeed, sooner than anticipated. The W.C. Louisville Kentucky cyclo cross was rescheduled to today instead of Sunday due to expected floods and I wanted to watch this on TV. Belgians 1 & 2, not too bad :-) Awful weather it was.
    I'm not sure I understand what you say about your issue.
    What product do you have in mind ?
    2 Feb 2013, 05:20 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "What product do you have in mind ?"

     

    All of them.
    2 Feb 2013, 07:51 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    "As such, the proof of this said superior knowledge would be billions and billions of votes for them."
    Not all the people working for government rely on votes. Only the politicians do.
    Civil servants don't
    Being voted can indeed be regarded as the ultimate reward, but since in most of the cases of people working for Gov. no voting is involved, you have to look for other incentives: money, feeling good, feeling useful, free time, regular family life with lots of leisure, no stress, regular pay, security, work close to home, easy commuting...
    Still, I don't exactly get your point.
    3 Feb 2013, 02:58 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    People vote for what feels good. In a coercion free market, that happens very fast. The more coercion you get in a market, the slower that happens. Gov is coercion. It has only one role in the market. The more it leaves that role, the more coercion that enters the market and the slower the voting process becomes.
    3 Feb 2013, 07:33 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Perhaps, JH, people should vote for what is good for them, rather than what feels good, but since they won't, Govt intervention makes sure that happens?
    3 Feb 2013, 08:57 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    "People vote for what feels good."
    True, and that's exactly the weak spot of our democracies. People vote for the easiest way: socialism, money for nothing, the heaven for everybody.
    Political models that have been trying to do that (socialist paradises like Hollande's in France now) have all failed, because of this simple truth: there's no such a thing as a free lunch.

     

    I say, the less coercion, the fastest one is bound to get a socialist regime. The more coercion, the less likely to get that kind of failed state.
    Look at Italy: Monti is the only solution to get Italy back on track, but Italians don't want him because he implies more austerity than his colleague of centre left. Italians (and the vast majority of people too) don't want to face the reality of having to downgrade.
    If the Italian left wins at next elections (polls give the left a strong lead), Italy will be toast, so will Europe: people indeed vote for what feels good, not for what IS good.

     

    The problem is that societies have become extremely complex structures. Common people have no clue how to deal with the problems. Let them vote freely and decide over issues that matter and that they don't understand, and you get a recipe for disaster.
    I'm more in favor therefore of a government of experts who act responsably without any populist constraint.
    I therefore see no difference between a Democrat or a Republican as US president: they all act pretty rational and take into account checks and balances of the different opinions in society.
    All it matters whether you get a "good" president or a "bad" one, is whether he's lucky to have the economic tide in the back.
    3 Feb 2013, 09:15 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "Govt intervention makes sure that happens? "

     

    If that were true, then nobody, anywhere, would ever have to work. Your basic claim is that gov is omniscient, and omniscience would mean perfect production knowledge, perfection production knowledge would mean machines that do the production and only human creativity were required to tell the machines what to produce and consumption would be simply a question of command.

     

    Gov intervention certainly does create a scenarior where people don't work, but they also have very little to consume. Having very little to consume feels bad, and feeling bad is not good for you. As such, the logical conclusion is that gov intervention is not good for you because it will make you feel bad via reducing your level of consumption.
    3 Feb 2013, 09:44 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "people indeed vote for what feels good, not for what IS good."

     

    Consider this. What IS good is what FEELS good. However, the question is, "What will feel good?" This is where human reason comes into play. We have instincts such as our feelings, but we also have the capacity to reason. This allows us to talk and to store knowledge in ways that allows us to pass survival information to our offspring and each other in something other than just our genetic code. As such, our capacity to acclerate our standard of living is exponentially greater than that of other creatures on the planet.

     

    As such, we can use our reason to reason out just exactly what "feels good". So, while I see that some people will ingest certain substances that makes them feel good, I can also observe that those feel good feelings bring on not so feel good feelings, namely pain. So while the use of a substance might make you feel good for a single night, a long term addiction can destroy your entire life. From this observation, I realize that feeling good is a net position. This is what you mean by "What is good".

     

    "What is good" is what produces net pain. The discomfort of exerting energy by climbing a tree produces the pleasure of consumption. Nature has provided us with pleasure and pain to incentive us to survive. Nature has also given us the capacity to reason to discover what will produce net pleasure and what will produce net pain.

     

    This is why I disagree with this...

     

    "they all act pretty rational and take into account checks and balances of the different opinions in society."

     

    They are human beings that will act according to the incentive structures they find themselves in. People in gov have access to coercion, as such, they find themselves in a situation that makes stealing very cheap (this is why a thief uses coercion, it makes stealing cheap). Without a system of checks, or limitations, as in limited gov, what you allow to happen is an incentive structure to delevop where even the right person will do the wrong things.

     

    This goes back to what feels good and the capacity for our reason to tell us what will be net pleasure and what will be net pain. Allowing people in gov to have unlimited control of coercion because we are just hoping the right people will never have the incentives to do the wrong thing, creates an incentive structure where people don't have the incentive to act in accord with long-term pleasure. Polictians with then respond to the incentives that provide short-term pleasure, but produce long-term pain.

     

    The reason for this is simply consumption feels good, so politicians will use the coercive power of gov to take gov from the few that are really good producers to the many that aren't as good at production. This will be done for votes. In other words, the coercive power of gov creates incentives that induce people to eat their seed corn because the people that don't grow the corn don't appreciate the effort it took to create it. You then create the scenario of margins. The producers that are on the margin, then join those on side of those not producing but only consuming, creating even more of an incentive via votes backed up by coercion to demand even more from the producers.

     

    What you create is a vicious cycle, where the producers become fewer and fewer, and those that control the coercion gain more and more power from the growing throng of voters that vote for more and more consumption without having to offer any trade in exchange. It is a guaranteed route to austerity via a short-term pleasure vehicle of eating your savings. It becomes no different than a drug addict, other than the incentives are created for widespread drug dependency because the power of coercion eliminates the need for sensitivity to nature's pricing mechanisms that communicate what is a net pleasure produce and a net pain producer.

     

    Thus, we use our reason to realize that the only tool gov can be given is the tool of coercion. Gov can regulate with regards to coercion, but to make sure this is the only thing gov does, that coercion must be limited by limiting gov. Our reason also tells us that coercion is not a net pleasure creator, because coercion is not a tool for converting resources into assets. Only human labor (labor in this sense is the economic one of mind and body LEARNING how to turn resources into assets for increased consumption - net pleasure) can turn resources into assets. People do this via mistakes. We learn what methods are best for this and people constantly improve on the methods. The methods also include better methods of trade. Learning is maximized when people are most sensitive to mistakes, and coercion limits our sensitivity to mistakes.

     

    Thus gov regulates coercion and nature regulates prices. If gov is doing its job of keeping us free of coercion, then we are at our peak sensitivity to mistakes and our societies will operate at the outer most limits of the production possibilities frontier. This is why it is critical to make sure gov coercion is kept within its only logical sphere. Not doing so, will slow down, sometimes severly (see Cuba, Soviet Union, Greece, N Korea), our learning about asset creation, and the result is a net pain position instead of a net pleasure position.

     

    Thus, if you create an incentive structure that allows people to vote for access to coercion, they will wind up voting for what feels bad even though they think they are voting for what feels good. In essence what happened is that their access to coercion blinds them to the mistake they are making, which is what I am trying to point out to you here.
    3 Feb 2013, 10:19 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    I disagree.
    3 Feb 2013, 10:33 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jh,
    "Your basic claim is that gov is omniscient"
    That's what they think in China, hence their economy is called central planning, a recipe for disaster.
    If you want to know why:
    http://bit.ly/WnAFzp
    BUT, don't you think US political model is miles away from what China does ?
    3 Feb 2013, 10:36 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    But you have to have more a reason than that to be convincing. If you could demonstrate an economy somewhere where coercion had built an economy where people didn't have to work, then that would be convincing. A great example would have been slavery in the southern states of the US. In that case, the South should have won the war, because they could have just beaten their slaves to produce the assets necessary to beat the North. N Korea and Cuba should put the rest of the world to shame and people in Florida would be risking their lives in bathtubs to float to Cuba (voting with there feet, er bathtubs).

     

    When you see a football team lining up backwards on every play, you don't assume they are going to win because they have the greatest intentions of winning, you make the assessment based on past observations about what it takes to score the most touchdowns. In other words, based on what they are going to DO. Just claiming the believe they have the best plan is not enough.
    3 Feb 2013, 10:41 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    jk,
    It is my experience that societies with an absolute absence of coercion lead to anarchy and societies with too much coercion lead to dictatorship.
    I guess the ideal model should be somewhere in the middle of both extremes. And reality shows that in our Western developed countries it also is, although from time to time you get shifts from one side to the other and back.
    3 Feb 2013, 10:58 AM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "It is my experience that societies with an absolute absence of coercion lead to anarchy and societies with too much coercion lead to dictatorship."

     

    If there were no coercion of any kind in human life, why would you be afraid of anarchy. If no one could force you to do anything, which means you can't force anyone to do anything, the only way to survive is voluntary cooperation. That means no war, no violence, no shootings, we would have no need for militaries, no need for alarm systems, there would be no stealing, no murder. The only activity of human beings would be activities that increased our standard of living. We would probably have a 10 hour work week, live a lot longer, cured a lot more diseases, be much healthier, and be free to pursue a great deal more leisure. This would all be possible because the blinding effects of coercion on asset creation would be gone. Granted such a coercion free society is a theoretical construct, but it is not an unreasonable one. I see no reason to fear such an existence. I would welcome a society totally free of coercion. It would be a dream come true. Talk about your net pleasure creation.
    3 Feb 2013, 11:21 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    JH, that's not what I said. Of course people have to work. My claim is simple, Govt has the benefit of smart people telling it what to do, while individuals don't. For example, Govt knows that global warming is an issue because it has the best scientists helping it, while the people ont he street is getting his/her information from talk show hosts. The Govt is just better informed, not omniscient.

     

    Does the Govt still make poor choices? Of course, it is after all made up of humans. Especially, if those humans are the lowest of the low like the Tea PArty PAtriots, the Govt is bound to make bad choices.
    3 Feb 2013, 11:37 AM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    hoop:

     

    Better quit while your ahead.

     

    Everybody understands your promotion of the idea of free markets, but when you devolve into Utopian silliness that, left to their own devices, all individuals would be guided by enlightened self interest and moral purity, and we'd have no war or crime, then, such nonsense undermines your original economic discussion.
    3 Feb 2013, 11:56 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    filipo, You seem to like austerity. What do you think of the USA and the UK experience when it comes to austerity? Compare and contrast please?

     

    Is there ever going to be a time when, faced with the overwhelming facts, you will admit that austerity is like blood letting and neo-Keynesian economis is like antibiotics?

     

    Or is your mind set in stone and no amount of facts will ever change it?

     

    Thank goodness I do no live in Europe.
    3 Feb 2013, 12:08 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    I have never head of a more silly statement than what feels good IS good. I can expect a child saying this, but not an adult. JH, are we adults here or children?
    3 Feb 2013, 12:10 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "My claim is simple, Govt has the benefit of smart people telling it what to do"

     

    But that's an unreasonable claim. You are just assuming what makes someone smart. We would have to have a debate on what makes someone smart. To me smart would have to comport with our observations of nature. Our observations from nature tell us that humans have an instinct to survive. Ultimately our reason would tell us that the only way to survive is production. Of course, reason is about experience, and some people will discover that they can use coercion to steal another's production. So people wind up making a choice about survival. They will either produce or steal to survive. It will just depend which one in their judgement based on their experiences they determine will cost less.

     

    Overall then, the humans that are the "smartest" will be those that are the best at production, or in other words those that figure out how to make production, cheaper, and cheaper. People who produce a lot, don't need to force others to want to trade with them. It is instinct. We are led by what feels good, and we use our reason to figure out what produces net pleasure. If you are producing food, and other people are hungry, the hunger pains motivate them to take action to alleviate their pain. They will naturally come to the food producer.

     

    Reason will teach people that trade is how we speicalize, and thus save time, and thus improve our standard of living. Food producers realize that even though they have improved their methods, there is only so much one person can do. The food producer, can then take the hungry and trade. The food producer teaches the hungry his methods, and they use the methods during the period they are learning. In exchange for their labor the food producer compensates them with some food. Eventually the learners become the masters and then new innovators, and what you get is an exponential increase in the standard of living. In such a system there is no such thing as "trickle down", what you get is "exponential prosperity". No where in this exchange was coercion necessary for everyone to improve their standard of living. It happens because it is a natural law. You don't need to pass a law for the sun to burn. It does so because that's how the universe works. It part of nature and human nature is part of nature.

     

    As such, smart is measured by productivity, not by claims of smart. In other words the proof is in the pudding. If the smart were really smart, they wouldn't need coercion. They would just produce and people would line up to trade with them. If you have to use coercion to prove to people how "smart" you are, then that is evidence that you are not that smart and have no business telling people what to do. You become a slave owner that begins to rationalize your theft of other's people labor. You tell your self that the slave cannot surive on their own. In fact you give them guaranteed labor, guaranteed room and board, guaranteed family planning, guaranteed healthcare, and that the state they are currently living is far better than anything they can achieve on their own.

     

    So when it comes to productivity gov can never be better informed because its access to coercion allows it to be blind to its mistakes and allows it to rationalize the austerity it creates. It starts to make excuse after excuse of why it can't achieve what it promised to achieve (its Bushes fault, its those lowest of low T Parties fault, its the weather's fault, its Europes fault, its the Jew's fault, its the rich's fault, those darn slaves are just lazy, etc, etc)

     

    Good, bad, evil, holy, it all revolves around our instinct interacting with our reason as to what will produce net pleasure and what will produce net pain. Our reason should tell us to utilize the laws of nature to our advantage, not ignore them. Nature has provided signals to what is productive and what is not. We call these prices. They tell us what produces net pleasure and what does not. Coercion blinds us to prices, because it allows for wealth transfer, and wealth transfer feels good because it allows for consumption for the receiver. It also provides pain for the victim, but the one with coercion doesn't have to listen to the complaints because they can always rationalize that they are smart and the victim is stupid.

     

    I read a book a while back about the political debate in the 1850s around slavery, and what's fascinating is that the rationalizations that you and Obama use for using gov coercion to control people are the same rationalization the slave owners used to justify having slaves. Remember slavery was imported to the colonies by Europe, and Europe had long had a ruling class with a monopoly of coercion. Their rational for putting slaves in the colonies was to maximize the return for Europe by getting as much out of the colonies as they possibly could. It was also the rational for having a nobility. The peasant was just too stupid to know what was good for them, and so too they rationalized the "primitives" in Africa were sub par, so why not control them.

     

    The history of the world is people with access to coercion rationalizing the horrible things they did to others via they are better and everyone else is inferior. Their access to coercion made stealing cheap, so they acted on their instincts, chose to ignore their reason, and the result is thousands of years of chains, dungeons, wars, and ruined lives.

     

    I know it makes you feel good to think you are better than everyone else, but that's a primitive emotion. Use your reason, and you will find even better feelings by seeing your fellow man as equals and assets with whom you can trade and cooperate. Then via an increase to price sensitivity, you will find that both of you experience a growth in your standard of living.

     

    If we adopted the principles of enlightenement in the US, as I have laid them out above, the US would become the have of capital and labor for the entire world. GDP would be over 10% every year. Unemployment would be in the 2% range, the prices of everyday consumables would be constantly falling making real incomes constantly going up. People could retire at 40 and actually be able to afford to do so. Racism would disappear, poverty would constantly be battling to make an appearance, and your work week would be getting shorter every couple of years.

     

    We are throwing so much away, simply because we refuse to use reason.
    3 Feb 2013, 12:12 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Macro,
    I think to have a fair option on recovery you need to bring in both variables: austerity and stimulus. Why ?
    If you only adopt stimulus, inflation will surge and currency debasement alike.
    If you only adopt austerity (Greece), you kill GDP.
    The only question is, what proportion ?????
    Impossible to answer that.

     

    As an aside: you should know Mervyn King also introduced stimulus by monetizing the debt by an average of £400bn/year. It hardly worked because when crisis hit, the UK faced a debt/GDP ratio of around 170%. That was never the case for the US.
    So, the moral of this story is: be careful before you compare nations: they might be the proverbial apple and orange.

     

    As another aside: you should also realize that austerity has also been introduced in the US: how many foreclosures ? By how much % will taxes go north this year ? That's austerity.
    So don't think the US aren't immune to austerity.

     

    Again: it all comes down to the right proportion. And since we're in uncharted territory, that question, my friend, no one can answer.
    3 Feb 2013, 12:21 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    I didn't have the impression he ever was ahead.
    3 Feb 2013, 12:22 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "Impossible to answer that."

     

    Its not really the question.

     

    In the US what was the top marginal income tax rate in 1919? What was it in 1922?

     

    Next what was the FF rate in June 1920, and what was it in 1922?
    3 Feb 2013, 12:45 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    filipo, Tax hikes on the rich are not austerity. Let's get that fact straight first. Austerity is spending cuts, on the back of the poor and the middle class. Which is why Europeans who still are somewhat stuck in the aristocratic mindset love austerity so much. Protect the currency, lower inflation, and protect the wealthy, while screwing the poor and the middle class from high unemployment is not something that easily flies in a country like the USA which is built by the middle class. That's why conservatives have lost the popular vote in 5 out of the last 6 elections.

     

    I would agree with you that foreclosures are austerity though. The subprime mortgage crisis was really small int he beginning. Coupel of hundred billion dollars would have bene enough to bail out all the subprime borrowers. But instead the Republican Govt chose to punish the poor and in the process sink the country in the Great recession. For shame!
    3 Feb 2013, 02:26 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Pardon my asking this, JH, what is your education level?
    3 Feb 2013, 02:27 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "Pardon my asking this, JH, what is your education level? "

     

    Years and years of formal and informal education. Some of it was in gov schools, some was in private, and everyday I educate myself. I have gov license that allows me to be part of a cartel, and I hold a position that carries an abduction risk, so I have signed policies that limit what disclosures I can give about myself.

     

    Your debate against me will have to rest on the merits of your logic rather than a demonizing attack on what your perceptions or misperceptions are about what you think constitutes education. Imagine living in 16th century Spain, and the conventional wisdom by all the most highly "educated" individuals is that everyone should obey the king without question and the king says pay your taxes and a tithe to the church. How dare anyone question the church. Such low lifes and irrational people (they really should be slaves) don't dare question anything that experts in latin and church doctrine declare to be true. Why all the educated people just know because they are smarter than everyone else that there should be a union between church and state and that everyone should be Catholic. After all, these super smart, educated people know what's best for everyone.
    3 Feb 2013, 02:52 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    I reason I am asking is because your arguments have been countered innumerable times by academicians and anyone with a decent education in economics and finance wouldn't have repeated them.
    3 Feb 2013, 02:53 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    MI

     

    Oh yeah, do you know the answers to my questions above?
    3 Feb 2013, 02:53 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Frankly, I don't, because I don't have any idea what you are talking about. You seem like an academe-hating populist.
    3 Feb 2013, 02:55 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "Frankly, I don't, because I don't have any idea what you are talking about."

     

    How can that be. You claimed to be part of the intellectual elite. Perhaps you just need to do some more demonizing. That should provide the intellectual arguments to establish your seat amongst the self proclaimed elites.

     

    If you just do some googling you will find the answers, and it will tell you something, that is assuming you can give up your conventional wisdom.
    3 Feb 2013, 03:36 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Macro,
    Get real, it's not only the rich that will be hit by taxes. Middle class too:
    http://usat.ly/Vxv0D0
    and
    http://onforb.es/11iGGS3

     

    "But instead the Republican Govt chose to punish the poor..."
    Obama came into office in 2009. When did doreclosures start ? 2008.
    Don't think I blame Obama. He inherited the situation created by people who came before him, but he could have rescued "all the subprime borrowers". Instead he rescued the banks, which was a wise decision.
    Only recently did Bernanke decide targeting mortgage securities by buying at a rate of $40bn a month. Quite late, if you want to exclusively blame the GOP.
    3 Feb 2013, 03:43 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    JH, Being part of the intellectual elite doesn't come with a secret decoder ring when populists stay totally strange things that they read on the internet. That's the problem of having a formal education rather than self-education through Google.
    3 Feb 2013, 04:08 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    filipo, I don't blame Obama either. The headlines were screaming about the sub-prime crisis from the 2006 range. What America as a country should have done is give cash outright to people with sub-prime mortgages so that they could pay off the toxic loans. By most estimates the cost would have less than $200B. I blame Bush for not doing this. I can guarantee you if I were President I would have pushed hard for it.

     

    Given how lopsided wealth is in the USA we can raise enough tax through wealth taxation in addition to income taxation so that the middle class (bottom 75% of the population, or those with household income less than $75k) is untouched. In fact we can even do it without touching the bottom 85% of the population (sub $100k) though I am not sure exempting the upper middle class is the right thing to do.
    3 Feb 2013, 04:12 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    "That's the problem of having a formal education "

     

    Then why does your formal education not provide you with the answer to a few simple questions? My formal education didn't provide it either, but it did provide me with research abilities. Even in gov education, there are pockets that do a better job than others. I just want more from you than common platitudes and self praise. They are simple questions, why can't you answer them? You should understand where they are leading if your vaunted formal education is as great as you claim it is.

     

    Perhaps you drop the demonizing long enough for us to have a reasonable discussion.
    3 Feb 2013, 04:25 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Can you ask the questions in a pithy bullet point list and not write yet another Shakespearean novel?
    3 Feb 2013, 06:55 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Just tell me the four data points above. Then I will tell you how it relates to the direction of the markets.
    3 Feb 2013, 07:09 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    What 4 data points?
    3 Feb 2013, 07:10 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Top marginal rate in 1919.

     

    Then 1922

     

    Fed fund rate jun 1920.

     

    Then 1922.
    3 Feb 2013, 07:21 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    No idea.
    3 Feb 2013, 07:25 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Do you just want me to tell you?
    3 Feb 2013, 07:36 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Tell me.
    3 Feb 2013, 07:43 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Well, I don't want to make it too easy, and besides the context will help. At least look up what was happening in the economy during Jan 1920 to Jul 1921, and then tell me what that period was like. Nothing detailed. Just in general.
    3 Feb 2013, 08:23 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Tell me something, why should I do research to illustrate your point, especially when I don't even know what your point is? If you have a point, state it with facts and I will then be happy to tear it apart. Just don't make it a Shakespearean drama again. Be pithy and to the point.
    3 Feb 2013, 09:03 PM Reply Like
  • jhooper
    , contributor
    Comments (5783) | Send Message
     
    Doing your own research helps you learn. Wasn't that a part of your formal education? It was in mine.
    3 Feb 2013, 10:11 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9032) | Send Message
     
    Going on wild goose chases was not part of my formal education. Perhaps it was in yours.
    3 Feb 2013, 10:28 PM Reply Like
  • Papaswamp
    , contributor
    Comments (2198) | Send Message
     
    Got to love that 110% increase M/M in defense aircraft and parts.
    28 Jan 2013, 10:10 AM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    "but I see rates going higher."
    Be careful what you wish for, I quote from Zerohedge:

     

    "...fourth, interest rates are rising and simultaneously refinances have plunged - hurting the 'housing recovery' meme which has been the driver of a lot of euphoria (be careful what you wish for)."
    28 Jan 2013, 05:41 PM Reply Like
  • Tack
    , contributor
    Comments (13230) | Send Message
     
    fil:

     

    Thanks for citing ZeroHedge. That makes me feel better already. They're never right about anything and are perpetual gloomers.
    28 Jan 2013, 05:46 PM Reply Like
  • filipo
    , contributor
    Comments (3292) | Send Message
     
    Tack,
    Strange it's my only link you comment on.
    Nothing about that equally gloomy Bloomberg note about exponentially rising Chinese corporate debt.

     

    But I'll cheer you up: there is also excellent news that I'm delighted to share with you:
    http://bit.ly/TO8ESt
    In case you don't understand: Flemish beer Westfleteren XII has been nominated best beer of the year 2013, second year in a row.

     

    Proof in English version:
    http://bit.ly/Yd3BIW

     

    Cheers !
    28 Jan 2013, 06:18 PM Reply Like
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