Category: Macroeconomics

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

?Note: this is the 100th weekly edition of sorted weekly tweets.

Market Impact

?

  • Standing Out from the Crowd: Measuring Crowding in Quantitative Strategies http://t.co/MRjZ8d8GGL Overinvestment in strategy precedes losses Feb 08, 2014
  • Does Fair Value Accounting Contribute to Market Price Volatility? An Experimental Approach http://t.co/YQqQPrwMwr Short answer: no $$ $XLF Feb 08, 2014
  • The Deeper Causes of the Financial Crisis: Mortgages Alone Cannot Explain It http://t.co/0P7fMrQWKn But they were the leading cause $$ $XLF Feb 08, 2014
  • Contagion Rejected as Biggest Bond Buyers Double Down on Junk http://t.co/5wm1k4Ghlw Makes me think the correction will b another crisis $$ Feb 08, 2014
  • Hedge Funds Preparing for $1T Property Bill http://t.co/RRQN992uat Key Q: Will they limit their risks prior to the next commercl RE bust? $$ Feb 08, 2014
  • Apollo Credit Twice Size of LBOs Shows Private-Equity Shift http://t.co/J69eh3TPTn Not a good sign, nonstandard lenders r fragile $$ $APO Feb 07, 2014
  • Five Pointers on Floating-Rate Funds http://t.co/sV6JtizBlN Don’t chase performance, rates may not rise, nor yields, adds credit risk $$ Feb 05, 2014
  • Inverse VIX Fund Gets Record Cash on Calm Market Bet http://t.co/YSHGpON0DE Be careful to not hold it long $$ $VXX http://t.co/qGCycKbPsX Feb 05, 2014
  • World’s cheapest stock markets: Where are shares cheap? http://t.co/3Uvq1HZfSF Gives u a rough idea as 2 where values may b found $$ $SPY Feb 04, 2014
  • Gundlach Shows Why Betting Against Treasuries Is a Fool?s Game http://t.co/R0s4wQLcbu Interesting that he is in long Tsys $$ FD: + $TLT Feb 03, 2014
  • Monday?s Selloff, by the Numbers http://t.co/LseNtCUEXz That’s 2 large >2% down days in less than 2 weeks $$ $SPY Feb 03, 2014

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Companies & Industries

 

  • Big Pizza Chains Use Web to Slice Out Bigger Market Share http://t.co/C6xQeSWmlr Easier 4 large chains 2 implement online ordering $$ $PZZA Feb 08, 2014
  • SodaStream?s New Mainstream Rivals: Coke and Green Mountain http://t.co/zOkwpBpOiK All the more reason 4 $PEP 2 buy $SODA $$ Feb 07, 2014
  • Why Discount Airlines Draw Fewer Complaints (Hint: It’s Not Better Service) http://t.co/a8rzqrf0DU Friendlier attitudes r better service $$ Feb 07, 2014
  • Satyajit Das: The Truth About Bank Earnings http://t.co/9FzkPbbyIm Bank earnings r lower quality; getting harder to increase them $$ $XLF Feb 05, 2014
  • Experts testify on true cost of Target breach http://t.co/FGVRFBvc6K Magnetic stripes will go away, & chips &/or PINs will appear $$ $TGT Feb 05, 2014
  • Apple Quietly Builds New Networks http://t.co/bncx84P4RW $AAPL certainly has spare $$ to throw at it, enhancing service quality $NFLX $GOOG Feb 04, 2014
  • H-P Finds Accounting Errors at Autonomy Unit http://t.co/9cQFBamwpI We knew it was a dumb deal at the time, now $HPQ shows just how dumb $$ Feb 04, 2014
  • Prophet of No Profit: How Jeff Bezos won the faith of Wall Street. http://t.co/eaZmKgfnir Moats, operating leverage, pricing power $$ $AMZN Feb 01, 2014
  • Ask Buffett what he would be willing 2pay 4 $AMZN — after all, it has significant moats. I think he would put it in the “too hard” pile $$ Feb 01, 2014

 

Rest of the World

 

  • China, the Death Star of Emerging Markets http://t.co/zFmo0RkXva @williampesek points at financial bubble in China; what will make it pop $$ Feb 08, 2014
  • Scandal Tests Chinese President’s Standing With Military http://t.co/cHGvLtROFE Corruption is a major issue 4 China, between Party & Army $$ Feb 08, 2014
  • Saudi Twitter Debate as Citizens Criticize Government http://t.co/quwkxpkHDX Social media allows criticism tht would not b done in public $$ Feb 05, 2014
  • China Savers? Penchant for Property Magnifies Bust Danger http://t.co/yrfDYQK5KH Anytime a single investment strategy dominates -> worry $$ Feb 05, 2014
  • Pimco?s Bill Gross Says He Avoids China ?Mystery Meat? http://t.co/My6P5x1jE0 Great phrase as we do not know much about indebted China $$ Feb 05, 2014
  • Sao Paulo Biggest Water-Supply System May Run Dry Within 45 Days http://t.co/fEcioInfjX Many water systems r near their limits globally $$ Feb 05, 2014
  • Emerging Stocks Drop to 5-Month Low Led by China as Ruble Gains http://t.co/aWgDSdVBUt Not all emerging mkts r equal, some financed wrong $$ Feb 04, 2014
  • Japan Sees Worst Developed-Stock Rout as Nikkei 225 Drops http://t.co/UQDhX1a3XL Current mkt reveals weak underlying fundamentals $$ $FXY Feb 04, 2014
  • Dad Can?t Buy Daughter Shoes as Argentine Currency Falls http://t.co/WTnUn1Okf0 ?Do you know how I feel buying my daughter used shoes?? $$ Feb 04, 2014
  • Argentina Scrambles To Raise $10B, Avoid Reserve Collapse; BONARs Bidless http://t.co/Xx4t0dFqCk Only hold hard assets in Silverland $$ Feb 04, 2014
  • EM rout? Or Intervention Sunday? http://t.co/d54Qjj4X2S Difficult to tell what Developed Mkt policymakers will do, they r strapped @ home $$ Feb 04, 2014
  • Argentina Bust Lures Investors After 200 Years of Defaults http://t.co/YoWjotidcp Invest in the hard stuff, land does not depreciate $$ $IRS Feb 04, 2014
  • Emerging-Market Rout Seen Enduring on Low Real Rates http://t.co/RTxP6GjMVw Funding structures of some emerging markets fall, $$ goes 2 $TLT Feb 04, 2014
  • Canadian Oil Rises as California Ships in Record Amount by Rail http://t.co/CKvu4BEqJl Retweet after me: Pipelines r cleaner & safer $$ Feb 04, 2014
  • Analysis: Emerging markets outlook not rosy, but valuations tempt http://t.co/hADIRvUK5g This may b a time 2nibble, not a time 2gulp $$ $EEM Feb 04, 2014

 

US Politics & Policy

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  • AOL is leading the way to make 401(k)s worse for everyone http://t.co/AnlQ1Ud6Ds Meh; new employers will compensate workers that lose $$ Feb 08, 2014
  • ‘Six Californias’ plan difficult but doable, assessment shows http://t.co/nuw3S6rLVl Ideas like this come & go in a fragmented California $$ Feb 08, 2014
  • No, CBO did not say Obamacare will kill 2M jobs http://t.co/RHsSai7rwv Rather, will discourage 2M from working full-time; big deal $$ Feb 08, 2014
  • Ex-NSA Chief Details Snowden’s Hiring at Agency, Booz Allen http://t.co/EWRuqlViXW Snowden set back US intelligence by 20+ yrs. Good. $$ Feb 06, 2014
  • The Tyranny and Lethargy of the Times Editorial Page http://t.co/hbW20h6Vjn Inside baseball, picture sums up story http://t.co/USlMTh4Bm0 $$ Feb 05, 2014
  • Puerto Rico Has Credit Rating Cut One Step 2Junk by S&P http://t.co/4Av3ftwL8q also http://t.co/QkwCnXQdcy Well-deserved, default coming $$ Feb 05, 2014
  • Going on 30, Living With Mom and Dad http://t.co/Wo4YB74mKo Part is being slow 2 marry, then education, poor career choices, motivation $$ Feb 04, 2014
  • Crop Insurers Win as Congress is Poised to Pass Farm Law http://t.co/rFNrEDhYkZ If we can’t reduce ag subsidies when ag is healthy… $$ Feb 04, 2014
  • Obamacare Wonks Flunk Data Analysis http://t.co/Ss2Tc3q2e9 You can show lots of savings if u show your winners & hide your losers $$ $SPY Feb 04, 2014
  • CBO: Obamacare Will Lead To 2M Fewer Workers In Labor Force By 2017 http://t.co/OsCrQOUORb Unintended consequences; fix this, break that $$ Feb 04, 2014
  • Fed Presidents Say Stock Decline Unlikely to Derail QE Taper http://t.co/pdoloENc9L In the short-run true, but if the decline persists… $$ Feb 05, 2014
  • Investment Manager Explains Why 99.5% Of Americans Can Never Win http://t.co/MqngZy7zZW Tax code is cockeyed, wealthy can avoid taxation $$ Feb 04, 2014
  • How Feds? Double Standard Enables Bad Bankers http://t.co/AGok7eeqdU Simple: little bankers get prosecuted; big banks get fined $$ $BNK $XLF Feb 04, 2014
  • Early Drive for Hillary Clinton Unsettles Democrats http://t.co/Hb3lJnpnr6 Some Worry It Will Siphon $$ from Candidates in Midterm Elections Feb 04, 2014
  • You Can Thank or Blame Richard Stanger for Writing 401(k) http://t.co/wX38lGA4m4 Many important laws r accidental; killed DB pensions $$ Feb 04, 2014
  • ISM Miss Is Ugly All Around http://t.co/Px97nGSccl I’ve been arguing that the economy is weaker than it looks 4 a while; here’s a clue $$ Feb 04, 2014
  • US Banks Ease Loan Standards in Fed Survey as Demand Rises http://t.co/etkDJPLLhN Can inflation b far behind if this persists? $$ $TLT $TIP Feb 04, 2014
  • California Dries Up as Brown Pushes $15B Tunnel http://t.co/r4boO9Tzzo If u don’t allocate water economically, becomes a political fight $$ Feb 04, 2014

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Other

 

  • Financial Blogging: How to Write Powerful Posts That Attract Clients http://t.co/fxmxkLJKbS My longer review: http://t.co/lOqexXT7RO $$ Feb 08, 2014
  • Why I Did Not Go To Jail http://t.co/4EtyFFyTyg @bhorowitz good read on the importance of proper company, legal, & incentives structure $$ Feb 08, 2014
  • Daniel Suarez Sees Into the Future http://t.co/kkLkxcmvnv ‘Influx’ may propel sci-fi writer in2 void left by Tom Clancy &Michael Crichton $$ Feb 08, 2014
  • Why Melted Cheese Does the Trick http://t.co/ZACj1EaWKB Creaminess enhances the textures and flavors of other foods $$ $KFT $DF Feb 06, 2014
  • Deadly New Bird Flu Strain Spawned by Virus Behind H5N1 http://t.co/b0fLG89fkg This is overblown. People die from the flu each year $$ $SPY Feb 05, 2014
  • Young Bankers Seek ?Good Yield? With Their Own Nonprofits http://t.co/gJZVwJ5lse Wealthy & powerful like 2b thought benefactors $$ Lk 22:25 Feb 04, 2014
  • How the Seattle Seahawks solved Peyton Manning http://t.co/0P0kiHnddI Even if u r not into football, interesting 4 understanding strategy $$ Feb 04, 2014
  • Super Bowl Safety Is Blow for Broncos and Las Vegas Sportsbooks http://t.co/2vXpm4IRbl The odds r interesting to read 4 unusual bets $$ $SPY Feb 04, 2014
  • Microsoft Adds Momentum to ?Open Science? |http://t.co/Ar6WCDKNug Understand that scientists r not neutral observers; they have 2 publish $$ Feb 04, 2014
  • Carney leaving CNBC for WSJ?s ?Heard on the Street? |http://t.co/dRNtplkOQB @carney gets a significant promotion! Congrats! $$ $SPY $TLT $GE Feb 01, 2014

 

Other Economics

 

  • Free Checking Is Disappearing Perk http://t.co/pZwsA0u3sl Smaller banks often offer better deals than big banks on checking $$ $XLF $SPY Feb 08, 2014
  • More Men in Prime Working Ages Don’t Have Jobs http://t.co/YmAjNcQrc5 1 of the qualitative factors that show how punk the economy is $$ $SPY Feb 08, 2014
  • An International Gold Standard Beats The Rule Of The Governing Elite http://t.co/GoTHUVusXK Old, makes point gold standard was better $$ Feb 05, 2014

 

Wrong

  • Wrong: High unemployment putting the ECB in isolation http://t.co/wlBQOP7JqM Loose monetary policy doesn’t lower L-T unemployment $$ #global Feb 08, 2014
  • Wrong: America The Startup http://t.co/C0Rax7KPJP Worth a read, but the writer does not really understand the Pilgrims or the Puritans $$ Feb 04, 2014

?

Retweets, Replies, & Comments

  • @HistoryInPix Cemented the creation of the graphical user interface, buggy in prior versions, aside from pricey Macintosh ghetto Feb 06, 2014
  • ‘ @catofwallstreet the credit cards will have chips, not us- already have these in Europe. Also, consider amillenialism or postmillenialism. Feb 05, 2014
  • RT @PUMPSandDUMPS: This fan says it all http://t.co/MryfT9l04a #pennystocks Feb 05, 2014
  • Ice falling, branches too, west of Baltimore — kind of pretty $$ #weather Feb 05, 2014
  • @DavidSchawel The difference between dollar-weighted & Time-weighted returns is crucial but few get that. Good tweet on $DBLTX $$ Feb 05, 2014
  • RT @DavidSchawel: Retail psychology: chasing performance, then puking the bottom & missing the bounce-DBLTX Fund assets vs adjusted NAV htt? Feb 05, 2014
  • RT @cate_long: Cheers! “@carney: Thanks everyone! Very excited to be joining the @wsjheard team! Some details here http://t.co/sjLSyTMIEH Feb 01, 2014
  • @dpinsen not all, but a majority Feb 01, 2014

 

Differences in US States? Unemployment over the Last 36 Years

Differences in US States? Unemployment over the Last 36 Years

Posted on by David Merkel

I would encourage you to have a read of the 2014 Baltimore Business Review.? Produced by the CFA Institute? — Baltimore, and Towson University, it? is a great example of how academics and practitioners can work together.? Here is my article, reformatted so that it looks better on my blog:

Differences in US States? Unemployment over the Last 36 Years

Unemployment is often treated as a national issue, but unemployment is often driven by regional or industry sector issues. This article pries apart the causes of unemployment since 1976, state-by-state.

Though there is a national component to every US state?s unemployment level, it is notable that local factors often dominate national trends. Here are some examples:

  • North Dakota has an energy boom amid increasing unemployment following the housing bust in 2008.
  • Texas had increasing unemployment in the mid-1980s as energy prices fell dramatically, in the midst of an economic boom.
  • Coastal economies benefited during the housing boom (pre-2008), and were punished in the bust ? this is parallel to the US economy as a whole, but more severe.
  • The Rust Belt prospered slowly in the early 1980s as the rest of the nation began to prosper rapidly.

The rest of this article will explain the causes of unemployment over the last 36 years, related to how connected a state is to the rest of the US economy, and how well the industry mix in a given state is doing.

Data & Method

Unemployment data for each state and the US as a whole was obtained from the St. Louis Federal Reserve?s Federal Reserve Economic Data (FRED) database. The data covers the period from 1976 to August 2013. Ordinary least squares regression was used to calculate how sensitive unemployment rates were in each state relative to overall US unemployment rates. The equation looks like this:

Ustate,t = ?state + ?stateUUS,t + ?state,t

The intuition behind this equation is that the unemployment rate of a given state can be explained by the amount that it varies in proportion to the unemployment rate for the US as a whole (the beta term), a fixed difference (the alpha term), and the error term. Here were the results by State:

State Alpha Beta Alpha SD Beta SD R-squared Alpha T-stat Beta T-Stat Correlation Group
Michigan ???? (2.50) ?1.67 ??????? 0.25 ????? 0.04

81.46%

 ?????????? (9.98) ???????? 17.82

3
Nevada ???? (2.44) ?1.42 ??????? 0.22 ????? 0.03

80.77%

 ???????? (11.22) ???????? 12.80

2
Indiana ???? (2.47) ?1.35 ??????? 0.20 ????? 0.03

81.90%

 ???????? (12.42) ???????? 11.63

3
Alabama ???? (1.80) ?1.32 ??????? 0.23 ????? 0.03

75.95%

 ?????????? (7.72) ????????? 9.06

6
West Virginia ????? 0.28 ?1.24 ??????? 0.48 ????? 0.07

40.15%

 ??????????? 0.59* ????????? 3.42

6
Ohio ???? (1.10) ?1.23 ??????? 0.17 ????? 0.03

83.93%

 ?????????? (6.49) ????????? 9.21

3
Rhode Island ???? (1.03) ?1.17 ??????? 0.26 ????? 0.04

65.95%

 ?????????? (3.88) ????????? 4.33

5
Illinois ???? (0.51) ?1.17 ??????? 0.14 ????? 0.02

87.48%

 ?????????? (3.64) ????????? 8.08

3
Tennessee ???? (0.86) ?1.17 ??????? 0.15 ????? 0.02

85.25%

 ?????????? (5.65) ????????? 7.29

3
North Carolina ???? (1.44) ?1.14 ??????? 0.19 ????? 0.03

77.35%

 ?????????? (7.40) ????????? 4.85

2
Oregon ???? (0.00) ?1.13 ??????? 0.17 ????? 0.03

80.95%

 ?????????? (0.03)* ????????? 5.11

3
South Carolina ???? (0.72) ?1.13 ??????? 0.18 ????? 0.03

79.11%

 ?????????? (3.94) ????????? 4.69

2
California ????? 0.20 ?1.12 ??????? 0.18 ????? 0.03

79.43%

 ??????????? 1.14* ????????? 4.61

5
Washington ????? 0.07 ?1.09 ??????? 0.15 ????? 0.02

83.84%

 ??????????? 0.49* ????????? 3.98

6
Florida ???? (0.53) ?1.07 ??????? 0.18 ????? 0.03

78.09%

 ?????????? (2.93) ????????? 2.80

5
Pennsylvania ???? (0.33) ?1.07 ??????? 0.14 ????? 0.02

85.43%

 ?????????? (2.40) ????????? 3.52

6
Wisconsin ???? (1.30) ?1.07 ??????? 0.17 ????? 0.03

78.88%

 ?????????? (7.49) ????????? 2.57

3
Arizona ???? (0.50) ?1.06 ??????? 0.18 ????? 0.03

77.62%

 ?????????? (2.81) ????????? 2.28

2
Kentucky ????? 0.20 ?1.05 ??????? 0.20 ????? 0.03

72.97%

 ??????????? 1.00* ????????? 1.56*

3
New Jersey ???? (0.10) ?1.01 ??????? 0.21 ????? 0.03

68.87%

 ?????????? (0.47)* ????????? 0.32*

5
Mississippi ????? 1.57 ?0.99 ??????? 0.27 ????? 0.04

57.37%

 ??????????? 5.86 ???????? (0.29)*

3
Missouri ???? (0.28) ?0.97 ??????? 0.12 ????? 0.02

86.47%

 ?????????? (2.35) ???????? (1.54)*

4
Georgia ???? (0.22) ?0.96 ??????? 0.16 ????? 0.02

78.07%

 ?????????? (1.37)* ???????? (1.81)*

2
Delaware ???? (0.83) ?0.95 ??????? 0.20 ????? 0.03

67.93%

 ?????????? (4.05) ???????? (1.73)*

1
Connecticut ???? (0.41) ?0.91 ??????? 0.23 ????? 0.03

61.44%

 ?????????? (1.80)* ???????? (2.79)

5
Utah ???? (0.60) ?0.88 ??????? 0.15 ????? 0.02

76.69%

 ?????????? (3.91) ???????? (5.13)

3
Idaho ????? 0.36 ?0.88 ??????? 0.20 ????? 0.03

65.13%

 ??????????? 1.77* ???????? (4.09)

6
Colorado ???? (0.01) ?0.87 ??????? 0.17 ????? 0.03

71.86%

 ?????????? (0.04)* ???????? (5.06)

4
Maine ????? 0.31 ?0.87 ??????? 0.19 ????? 0.03

66.45%

 ??????????? 1.61* ???????? (4.49)

1
Massachusetts ????? 0.17 ?0.86 ??????? 0.24 ????? 0.04

55.28%

 ??????????? 0.72* ???????? (3.94)

5
Minnesota ???? (0.29) ?0.82 ??????? 0.12 ????? 0.02

82.17%

 ?????????? (2.43) ???????? (9.78)

3
District of Columbia ????? 2.45 ?0.81 ??????? 0.18 ????? 0.03

66.11%

 ????????? 13.40 ???????? (6.86)

1
New York ????? 1.48 ?0.81 ??????? 0.18 ????? 0.03

67.90%

 ??????????? 8.45 ???????? (7.28)

1
Arkansas ????? 1.46 ?0.79 ??????? 0.18 ????? 0.03

66.27%

 ??????????? 8.23 ???????? (7.87)

6
Virginia ???? (0.30) ?0.78 ??????? 0.08 ????? 0.01

90.79%

 ?????????? (3.84) ??????? (18.90)

1
Maryland ????? 0.31 ?0.78 ??????? 0.12 ????? 0.02

81.92%

 ??????????? 2.66 ??????? (12.83)

1
Iowa ???? (0.17) ?0.77 ??????? 0.19 ????? 0.03

61.15%

 ?????????? (0.86)* ???????? (7.98)

3
Vermont ????? 0.06 ?0.74 ??????? 0.19 ????? 0.03

60.28%

 ??????????? 0.34* ???????? (9.04)

1
Louisiana ????? 2.45 ?0.73 ??????? 0.38 ????? 0.06

26.41%

 ??????????? 6.40 ???????? (4.69)

6
New Hampshire ????? 0.12 ?0.68 ??????? 0.20 ????? 0.03

52.48%

 ??????????? 0.60* ??????? (10.73)

1
New Mexico ????? 2.67 ?0.64 ??????? 0.21 ????? 0.03

48.44%

 ????????? 12.78 ??????? (11.36)

6
Montana ????? 1.84 ?0.61 ??????? 0.21 ????? 0.03

45.25%

 ??????????? 8.65 ??????? (12.16)

6
Oklahoma ????? 1.49 ?0.59 ??????? 0.22 ????? 0.03

41.23%

 ??????????? 6.70 ??????? (12.25)

3
Wyoming ????? 1.48 ?0.56 ??????? 0.29 ????? 0.04

26.35%

 ??????????? 5.08 ??????? (10.17)

3
Alaska ????? 4.52 ?0.53 ??????? 0.28 ????? 0.04

25.87%

 ????????? 16.05 ??????? (11.13)

6
Hawaii ????? 1.46 ?0.52 ??????? 0.27 ????? 0.04

27.58%

 ??????????? 5.52 ??????? (12.07)

1
Texas ????? 2.89 ?0.52 ??????? 0.19 ????? 0.03

41.71%

 ????????? 15.10 ??????? (16.90)

4
Kansas ????? 1.68 ?0.48 ??????? 0.13 ????? 0.02

55.86%

 ????????? 12.53 ??????? (25.79)

4
Nebraska ????? 0.61 ?0.46 ??????? 0.13 ????? 0.02

54.10%

 ??????????? 4.62 ??????? (27.48)

3
South Dakota ????? 0.95 ?0.45 ??????? 0.11 ????? 0.02

63.95%

 ??????????? 8.93 ??????? (34.82)

3
North Dakota ????? 1.49 ?0.39 ??????? 0.18 ????? 0.03

31.54%

 ??????????? 8.14 ??????? (22.19)

6

* Indicates not statistically significant from zero for alpha, and one for beta at a 5% level.

The difference in sensitivity to the US unemployment rate is considerable by state. If the unemployment rate rose 1% in the US, Michigan?s unemployment rate would tend to rise 1.67%, while the North Dakota?s unemployment rate would only tend to rise 0.39%.

The states were then divided into five beta groups, symmetric around 1.0, with a width of 0.2 for the three middle groups. On a map, it looks like this:

one

 

The highest sensitivity states to US unemployment rates are largely found in states with high exposure to the Auto and Gambling industries. When times are bad, people shepherd their money more carefully. They cut back on buying new cars, and gambling. High sensitivity states tend to have a lot of gearing to industrial activity, which tends to be more boom-bust than other economic activity. Average sensitivity states tend to have balanced economies, reflecting a mix of business similar to that of the US as a whole. Low-sensitivity states tend to have a large amount agriculture, resource extraction, financial sector concentration, or Federal government work.

Note that the recent boom and bust would argue that financials are more cyclical than previously believed, but that was during a small period during the study period.? The same applies in reverse to agriculture and resource extraction, which benefited from increased demand for raw materials from the developing world, making these industries appear less cyclical than previously believed.

Betas reflect the overall sensitivity to moves in US unemployment rates from 1976 to 2013, but the correlation of the residuals of the states highlight hidden factors that were influential in unemployment rate movements.

Typically, the factors stemmed from the economic sectors prominent in each group of states, as their profitability waxed and waned.

Starting with ten groups of states randomly divided, the groups were iteratively adjusted, combining groups that were highly correlated with each other until there were no more improvements possible, ending with six groups. Here is the average correlation matrix:

 

Avg Corr

1

2

3

4

5

6
Group 1

40%
Group 2

-4%

43%
Group 3

-34%

-15%

43%
Group 4

-37%

12%

24%

36%
Group 5

41%

26%

-51%

-22%

61%
Group 6

-14%

-43%

30%

-5%

-46%

50%

And here is the map identifying the groups:

two

Groups 1, 2 and 5 correlate strongly internally and moderately among each other. The same is true for 3, 4 and 6. The rest of the group correlations are weak if not negative.

Groups 3, 4, and 6 cover the center of the US. They have proportionately more economic sectors in agriculture, energy, consumer cyclicals, and basic materials.? Much of the area is rural. Groups 1, 2 and 5 cover the coasts of the US and are more heavily urbanized. Their economic sectors have a greater proportion of finance, healthcare, and technology.? Post-2007 unemployment was relatively worse in groups 1, 2 and 5 versus the other groups, because they were part of the hot housing markets, and lost more construction jobs as a result.

Here is a graph of the average unemployment residuals for the six correlation groups over the 36-year study period:

three

Description of the Correlation Groups

Group 1 ? composed of Maryland, other Mid-Atlantic States, New England and Hawaii, this ? had high unemployment relative to the rest of the US in 1976 and 1997, and low unemployment in 1987. It has high relative exposure to the consumer noncyclicals and financials sectors, and low relative exposure to energy and technology. The high weight in financials helps explain the employment gains from 1976 to 1987, as financial companies benefited from falling interest rates, rising equity markets, and expanding product offerings.

Group 2 ? composed of the Carolinas, Georgia, Arizona and Nevada ? had high unemployment relative to the rest of the US in 2011, and low unemployment in 1984 and 1991. It has a lot of relative exposure to the consumer noncyclicals and utilities sectors, and low relative exposure to energy, financials, and technology.? During the mid-1980s to early 1990s, this group benefited from the growth in demand for noncyclical goods from the Baby Boomers. After the popping of the financial bubble in 2008, weakness in construction and gambling in Arizona and Nevada led to higher levels of unemployment.

Group 3 ? composed of the Midwest, parts of the South, Utah and Oregon ? had high unemployment relative to the rest of the US in 1976 and 1992, and low unemployment in 1986. It has high relative exposure to the consumer cyclicals and noncyclicals and basic materials sectors, and low relative exposure to energy and technology. The US economy as a whole peaked and troughed along with group 3, which makes sense given their relatively large exposure to cyclical sectors.

Group 4 ? composed of Texas, Missouri, Kansas and Colorado ? had high unemployment relative to the rest of the rest of the US in 1987 and 2003, and low unemployment in 1976. It has a lot of relative exposure to the energy and utilities sectors, and low relative exposure to financials and technology. Performance of the energy sector is the critical factor here ? it was relatively strong in the mid-to late 1970s, but weak after oil prices bottomed out in the mid-1980s and late 1990s.

Group 5 ? composed of the densely populated coastal states of California, Florida, New Jersey, Massachusetts, Connecticut and Rhode Island ? had high unemployment relative to the rest of the rest of the US in 1976, 1992 and 2012, and low unemployment in 1986. It has a lot of relative exposure to the healthcare and technology sectors, and low relative exposure to energy and consumer noncyclicals. In the early 1990s, the aerospace industry in California went bust while the commercial property markets were at the deepest point of their slump. Most of the rest of the unemployment cyclicality can be attributed to the more cyclical nature of the industries in this group ? an amplified version of the US economy.

Group 6 looks like a bunch of leftovers, but it is not.? Composed of states in the Northwest and Alaska, New Mexico, Louisiana, Arkansas and Alabama, West Virginia and Pennsylvania, this group had high unemployment relative to the rest of the rest of the US in 1987, and low unemployment in 1976 and 2009.? It has a lot of relative exposure to the agriculture and basic materials sectors, and low relative exposure to financials. The stagflation of the mid-1970s benefited agriculture and basic materials, as did growth in demand from emerging markets in 2009. Those factors were
absent in 1987, as financial firms were booming.

Maryland?s unemployment rates have held down well being next to Washington, DC. The growth in the US government during the last 10 years has supported employment in Maryland. The grand question to ponder is what would ever happen to Maryland, Washington, DC and Virginia if significant cuts were made to Federal payrolls?

Conclusion

There are two main conclusions:

1) State level unemployment is a result of sensitivity to US unemployment levels and the mix of local industries. Policymakers should know how sensitive their state is to the national economy, and what industries are doing well or poorly before taking credit for low unemployment rates. More often than not, the employment rates are low or high due to factors beyond the control of policymakers.

2) In general, greater employment stability exists when that industry mix is more diversified. This is something policymakers can limitedly affect. Most states have efforts to attract businesses to their states. If you want unemployment levels to be more stable, aim your efforts at attracting businesses that diversify your existing mix.

Fire and Ice

Fire and Ice

Posted on by David Merkel

This is a hard time to be managing fixed income.? Yes, if you are at a big shop with access to deal flow, not so bad — but when you are small like me and have limited tools for a small client base (less than 10% of my assets are fixed income… smart people, because I am better at equity investing) it is really difficult.

Everyone knows interest rates have to rise.? That is why I own long Treasuries.? If the certainty level were truly that high, we would have sold off a lot more by now.? As it is, oldsters, their intermediaries, and pension plans are investing in longer fixed income to provide long-term income.? The need for income, at least for now, holds rates down.? If price inflation kicks up, my view will change, and so might the view of millions of others.

I call that position “ice.”? What will do well if the global economy goes cold?? That’s 20% of the portfolio.

Then there is “fire,”? credit risk in mild and stronger forms.? 40% of assets in short investment grade bonds.? 20% in bank loans.? 20% in short-dated junk.? What will do well if the economy expands?? “Fire” will do well.

What I did wrong last year

My big mistake last year was owning emerging market bonds, both dollar-denominated, and local currency.? That market fell apart after Bernanke uttered the word “taper.”? I held, thinking there might be some recovery, only to sell in November, ahead of the first real taper.

I forgot what I knew, that immature/emerging financial markets are disproportionately sensitive to changes in monetary policy from developed markets.? Michael Pettis’ book, The Volatility Machine, makes that point ably.

On the bright side, maybe I missed the second half of the losses.? As for now, Fire and Ice is working, and providing returns to the small number of clients that use me for fixed income.

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

The Volatility Machine, or, Developed Markets Sneeze and Emerging Markets Catch a Cold

 

  • Record Cash Leaves Emerging Market ETFs on Lira Drop http://t.co/KSVS4qlrGb Sold mine b4 the 1st Fed taper; China’s fin’l sys vulnerable $$ Feb 01, 2014
  • Calm Broken in Markets Amid Concern of Emerging Contagion http://t.co/VnMtRrqXgs Emerging mkts decoupling from developed mkts wrong way $$ Feb 01, 2014
  • Basci No Rebel as Elections to Dictate Turkish Rate Moves http://t.co/EFVGB1LbMD Raise rates to defend the lira, watch exporters sag $$ Feb 01, 2014
  • Rajan Warns of Policy Breakdown as Emerging Markets Fall http://t.co/zW9QR49nRu Good guy, but fighting from a weak position $$ Feb 01, 2014
  • Argentina 105% Stock Return Proves Illusory as Peso Sinks http://t.co/4T0LdDhPM7 Make high returns in Arg pesos, but what can they buy? $$ Feb 01, 2014
  • Fragile-Five Selloff Cuts Rupee Issues to ?07 Low http://t.co/7anEAHc6Qd Volatility machine feeds tightening policy to weakest emerg mkts $$ Feb 01, 2014
  • The Price of Argentina’s Devaluation http://t.co/WwCrpf8urI More devaluation 2 come, black market price of $$ 50% above official price $IRS Jan 30, 2014
  • China Bank Regulator Said to Issue Alert on Coal Loans http://t.co/9w51A1v6RS Wealth management products embed significant credit risks $$ Jan 26, 2014
  • Fernandez Ditches Argentina for Cuba Summit Amid Crisis http://t.co/3nH9dIC0vT May what happened to Khrushchev happen to Fernandez $$ $IRS Jan 26, 2014

 

Companies & Industries

 

  • Amazon?s Boundless Spending Tested as Sales Growth Slows http://t.co/HPMVaVRDpV & http://t.co/ByiTZvlPLj $AMZN needs to raise its prices $$ Feb 01, 2014
  • How IKEA Protects the Environment and Sofa Margins http://t.co/x1rGegBzm5 IKEA is a very clever company that sells furniture cheaply $$ $FBN Jan 30, 2014
  • Walmart Expands Same-Day Grocery Delivery Test to Denver http://t.co/YrsuV006Zs Will b interesting 2c if this works profitably $$ $WMY $KR Jan 29, 2014
  • Billionaires Fuming Over Market Selloff That Sinks Magnit http://t.co/ZD1uUx0J0M Never confuse trading value w/intrinsic value $$ $SPY $TLT Jan 29, 2014
  • Branson?s Butanol Heading to U.S. as Ethanol Substitute http://t.co/8JAturnMXg I’ve been waiting for this; this is big & good. $$ $SPY $XLE Jan 29, 2014
  • Ethanol Exporters Search for a Port http://t.co/h9oUb7aRne Key Problem: Industry’s Distribution Network, Built Around Domestic Market $$ Jan 29, 2014
  • Apple’s $160B Mystery http://t.co/emZzU9mJ4d It is a mystery. What could you buy for $160B that would yield something like 10%? $AAPL $$ Jan 29, 2014
  • With a Shortage of STEM Graduates, Accenture Hopes to Grab Them Early http://t.co/lH3cam3h9U Clever idea by $ACN getting real thinkers $$ Jan 26, 2014

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Financial Sector

?

  • Mortgage Volumes Hit Five Year Low http://t.co/IdgUULArJf Once policy accommodation ebbs, the housing mkt normalizes. 2 many houses $$ Feb 01, 2014
  • Futures industry: A story of crisis and opportunity http://t.co/CGShQoC93M Interesting history of how the Chicago futures exchanges grew $$ Feb 01, 2014
  • Sudden Swings in HSBC, Diageo Spur Trading Error Concern http://t.co/1Krn50FkYx “Fat fingers” can be a problem in computerized markets $$ Jan 30, 2014
  • Wall Street Attracts Chop Shops 20 Years After ?Wolf? http://t.co/qkYgenUF49 This isn’t as large as it used 2b. Now more fraud online $$ Jan 30, 2014
  • Companies Shift Strategies as Pension Funding Improves http://t.co/MhGhBFABc6 Smart to immunize pension liabilities when fully funded $$ Jan 30, 2014
  • Friday Was a 90/90 Day and What It Means?http://t.co/lhm2LQeWN0 @Ritholtz tells us there has been a sea change & this is a correction $$ Jan 29, 2014
  • Delinquent Debt Seized by Lehman Alum Seeing Recovery http://t.co/SsbGLA5Lh2 Hedgefund doesn’t own homes, but owns debt interest on homes $$ Jan 29, 2014
  • The Hidden Risks of Bank Loan Funds http://t.co/AEe7kicHul A good piece by the estimable @davidschawel . U might need 2play defense $$ $BKLN Jan 29, 2014
  • How the Safe Havens Stack Up http://t.co/csOSokPPWR For now nothing beats long US Treasury bonds FD: Long $TLT Jan 29, 2014
  • SEC Accuses Legg Mason of Some Accidental Fraud http://t.co/5Gl2I0B0S9 Given the complexity of law, much fraud is boring $$ $LM $SPY $MDY Jan 29, 2014
  • Puzzle for CFOs: Fixed or Floating-Rate Debt? http://t.co/vWxLEq6k8d Here’s the easy answer, do half fixed & half floating. Easy. $$ $BKLN Jan 29, 2014
  • Mary Jo White Wants SEC to ?Rethink? Corporate Disclosures http://t.co/VFLKGGnTfM Overthinking it; many people don’t read risk factors $$ Jan 29, 2014
  • BlackRock?s Fink Warns of ?Too Much Optimism? in Markets http://t.co/lkZYCY32HQ Fink is on target, vs the wishful thinking of bureaucrats $$ Jan 26, 2014
  • Former Phone Psychic Fit Right in as a Quant Trader http://t.co/Eq8iyYE2Tv Very weird. Making money by selling illusions can b profitable $$ Jan 26, 2014
  • Gold Mint Runs Overtime in Race to Meet World Coin Demand http://t.co/R7tjxZfTU3 Notable demand 4 physical gold amid falling prices $$ $GLD Jan 25, 2014
  • Is Momentum on Your Side? http://t.co/x0Z3r64Lix This strategy works well, if u can handle the volatility. 2007-2008 flameout. $$ $SPY $MDY Jan 25, 2014
  • How to Fine-Tune Your 401(k) Account http://t.co/0Q6N5NG0JP Worth a read if u have a 401(k). Consolidate, review allocations & savings % $$ Jan 25, 2014
  • That last article is one reason interest rates should remain LOW. Retiring baby boomers turning assets into streams of income. $$ $TLT $TBT Jan 25, 2014
  • Two Words: Private Equity http://t.co/E485SlKnn1 Private equity is still a risk asset, and goes through booms & busts, stick w/quality $$ Jan 25, 2014

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US Politics & Policy

 

  • Christie Knew About Lane Closings on Bridge, Ex-Ally Says http://t.co/2YLuAOewGb If true, Chris Christie is toast, in the US & New Jersey $$ Feb 01, 2014
  • Meanwhile, Back in America… http://t.co/J8LsjPtWNw It feels more like grief, Like the loss of something you never thought you’d lose $$ Feb 01, 2014
  • The Republican Presidential Contender Everyone?s Overlooking http://t.co/FVMViawn5b I find John Kasich 2b unlikely, but so are the others $$ Jan 30, 2014
  • Only the Foolish Pay the 45% Estate Tax http://t.co/bnMuQp6P55 @ritholtz tells truth on estate tax, rewards accntnts, lawyers, actuaries $$ Jan 30, 2014
  • Minimum Wage Laws Kill Jobs http://t.co/Rfc8Ef174z Sad but true. From first principles this should be obvious 2 all $$ Jan 30, 2014
  • The Unspoken Reason Obama Can’t Raise the Minimum Wage http://t.co/WlqxZtBxK3 Public opinion does not think poverty is important $$ $SPY Jan 29, 2014
  • No Babies, No Stimulus http://t.co/4995BoqbER @asymmetricinfo says it well; if your population gets older, policy should be more austere $$ Jan 26, 2014
  • How the U.S. Helped Win World War I http://t.co/X4nLdNHZcj Intensified our bad habit of meddling in conflicts that are not ours $$ Jan 25, 2014

Rest of the World

 

  • For Europe?s Youth, Minimum Wages Mean Minimal Employment http://t.co/T9ZfsM8oGu Youth unemployment is higher in nations w/minimum wages $$ Feb 01, 2014
  • El Nino May Return as Models Signal Warming of Pacific Ocean http://t.co/YAbrSpm3Tx El Nino – the adult version of the boogeyman $$ $SPY Jan 29, 2014
  • Snowden Nominated by Norway Lawmakers for Nobel Peace Prize http://t.co/PShW1dmpv9 Well deserved. He ruined his life 4 the good of all $$ Jan 29, 2014
  • Slop-Bucket Reality for Aboriginals Missing Canada Boom http://t.co/pNftiUwjsZ Tribal cultures tend to fail in a capitalistic world $$ $SPY Jan 29, 2014
  • Japan Beyond Tokyo Luring BlackRock With Overseas Money http://t.co/r2YOyDyvMw Abenomics will fail, & Japan will b the first casualty $$ Jan 29, 2014
  • South Sudan Military Says Rebels Breach Cease-fire http://t.co/1YYa7rLVi7 After separating from the North, tribal animosities dominate $$ Jan 25, 2014

 

Other

 

  • Food Festival Pageants Open Up Competitions to Attract Candidates http://t.co/8Zcv61Znor Offering larger scholarships to food ambassadors $$ Feb 01, 2014
  • Why National Football League players go from rich to broke http://t.co/oIsMpnxgis Injuries shorten careers & fancy living depletes the $$ Feb 01, 2014
  • Super Bowl Prostitution Digitally Mapped by Data Trackers http://t.co/ivD5pKBVBM Wonder how many female slaves they can help to free? $$ Feb 01, 2014
  • The Employee of the Month Has a Battery http://t.co/zrmb0TgqS1 Minimum wage hikes r accelerating trend toward automation & fewer workers $$ Jan 30, 2014
  • Bitcoin Figure Is Accused of Conspiring to Launder Money http://t.co/MuFqZLMABH Governments care if u r trading w/evil people $$ $TLT $SPY Jan 29, 2014
  • Infertility, Diabetes, Obesity and the Mystery of PCOS http://t.co/tylcTdjKET Messy. Overweight & Diabetes correlated with infertility $$ Jan 29, 2014
  • How You Might Be Tracked for Ads in a Post-Cookie World http://t.co/cYhBKa5oS7 Worth a read. After all, you want to protect your privacy $$ Jan 29, 2014
  • Frigid Super Bowl Recalls Ref in Wet Suit With Few Penalties http://t.co/k9EeVc1WI3 When u r struggling 2 survive, few penalties issued $$ Jan 29, 2014
  • Burning Question: Does Rinsing Fruit Make a Difference? http://t.co/Xr4lNk8lCq If organic, YES! If not organic, yes. $$ #microorganisms Jan 29, 2014
  • 4 things to know about Warren Buffett adviser http://t.co/jRlt81kULk Tracy Britt Cool is slow beginning of more centralized operations $$ Jan 28, 2014
  • Pregnant Texas Woman, Marlise Mu?oz, Removed From Life Support http://t.co/esBxk1xLdz Many people would have adopted the child $$ Jan 27, 2014
  • Maryland Shopping Mall Shooting Leaves 3 Dead, Police Say http://t.co/FGcrU7q3sn Biggest Mall near me. I’ve shopped at the Sears there $$ Jan 25, 2014

 

Wrong

  • Wrong: China PMI Ascends as Global Barometer With Market Sway http://t.co/gSD8QQewZy Should examine China’s financial system soundness $$ Feb 01, 2014
  • Dumb: Obama Announces New Retirement Accounts http://t.co/E20AA2F3vX Providing investment options 2 those who don’t invest is a waste $$ Jan 30, 2014
  • Weak arg: Congress Has Never Allowed Unemployment Insurance Extensions 2Expire With Long-Term Unemployment So High http://t.co/2IVPLXTDKr $$ Jan 29, 2014
  • Wrong: Obama Offering Retirement-Savings Plan for Workers http://t.co/jpOEBTeT66 Getting poor people 2 invest in Treasuries is criminal $$ Jan 29, 2014
  • Wrong: Yellen Faces Test Bernanke Failed: Ease Bubbles http://t.co/ys4I4iOFWy That is not her inclination; she will inflate bubbles $$ $SPY Jan 29, 2014
  • Wrong: Senator Schumer pushes plan to undercut tea party http://t.co/cpN3PQKBid Far better to end gerrymandering http://t.co/uQx2ZdtSlF $$ Jan 27, 2014
  • Wrong: What?s Behind the Emerging-Market Meltdown http://t.co/FoG5yOAUpW Kooky Keynesian prescriptions: ruin long-run 2 help short-run $$ Jan 26, 2014

?

Comments, Replies & Retweets

  • Reading: Whatever happened to the feature which allowed us to customize news sources for stock portfolios? http://t.co/8sdnIF0FeS $$ $YHOO Feb 01, 2014
  • Whatever happened to the feature which allowed us to customize news sources for stock portfolios? http://t.co/vnmO5Hlhnt #YahooAnswers $$ Jan 31, 2014
  • Commented on StockTwits: Clever, thanks. http://t.co/YweRBtoTe8 Jan 29, 2014
  • RT @Pawelmorski: Financial media basically rubbish at covering EM. Jan 29, 2014
  • Commented on StockTwits: The word was “tend” not “must? http://t.co/r11cBZsTRp Jan 29, 2014
  • @TTownsend4969 Blessed are you, Tina Townsend. May you always be grateful for the work that Jesus has done in you. Jan 29, 2014
  • RT @M_C_Klein: .@mark_dow on EM: “Don?t try and fight the old school and their anachronistic biases. They are bigger than you are.” http://? Jan 28, 2014
  • @pdacosta @bySamRo Grateful I exited my closed-end EM funds in November prior to the first taper. Michael Pettis’ volatility machine runs $$ Jan 26, 2014
  • RT @StephenKing: Memo to Justin Bieber: For the young celeb, life is a banquet of free food. What they don’t tell you is that you are often? Jan 26, 2014

?

Equality, and its After-Effects

Equality, and its After-Effects

Posted on by David Merkel

There are many in the US troubled over a number of problems:

  • Why are wages not rising faster, particularly on the low end?
  • Why isn’t the middle class doing better?

I may get a lot of flak over this post, similar to my post Rethinking Comparable Worth, but I think it is better that people understand what is happening, even if they don’t like it.

The world as a whole is getting better, bit-by-bit.? But that includes some places that prosper dramatically, while others sag.

Free trade is a good thing, and I think that free trade agreements should be sought globally.? It helps grow the global economy.? Those benefits are not evenly distributed.? Those whose wages are low relative to others who do the same thing are going to benefit disproportionately.? Those whose wages are high relative to others who do the same thing are going to lose disproportionately.

Here’s the simple way to put it.? If you do the same thing as a guy in China, or any other place, why should you earn something different than him?? What is happening to the lower classes in the US is pressure from the global economy.? There are a lot of people who find the work previously done by those in the US desirable, and at lower prices.? The forces making the world as a whole better off are making the low-skill portions of the US labor force conform to the pay that they get in the rest of the world.

I realize that this is not pleasant, and I spend time helping friends of mine who are affected by this.? But the global move to capitalism has had positive and negative effects on the US — positive for capital, negative for labor.

Some will be offended at this, but you might ask, why should we prevent companies in the US from contracting with foreign workers to do work more cheaply than in the US?? Is there a moral basis to do this?? I don’t think so, as people should be free to have legitimate contracts with those they wish to deal with. (Excluding things in wartime, that is different.)

People outside the US need to be able to improve their well-being.? Same for those in the US.? But what that means is that those wanting to improve their well-being must put a lot of effort forth:

  • Be zealous to improve your skills
  • Market yourself to many companies
  • Start your own company

I know it is tough to do this.? I was unemployed for a short period in 2003, and I put 40+ hours per week into seeking employment.? Seeking a job is a job, you are a one-man firm seeking to sell one unique product one time.? It is tough to do this, but it is the only way to do it.

What you have to understand is that the world is far more competitive than is was before the Cold War ended.? Fifty years from now, the world will be far more equal, and poverty will be far lower than it is today.? (That is, assuming there are no significant wars.)

What I say to my readers is be intelligent,? and seek productive niches in the economy that have some lasting potential.? That’s not true of most of the economy.

Younger people have to get the idea that they need to focus on how their careers will support them economically.

More generally, almost everyone needs to think on a long-term basis.? If you are going to college, aim for things that have the the possibility of giving you a good life over the long haul.? Don’t seek your bliss.? It is rare that your bliss will reward you in the long run.? Don’t seek what makes you happy.? Seek what makes others happy.? That is the true understanding of the golden rule — sacrifice yourself for the good of others, and you will be happy.

That is the secret to economic success — seek what makes others happy, not just yourself.? If you follow this, you will do well enough.? Capitalism exists to make the most people happy.? Other systems exist to control for those who are privileged.

My summary is this: seek the good of others, and look at where demand may growing, and you will do well.

Hoping that you will do well,

David

Redacted Version of the January 2014 FOMC Statement

Redacted Version of the January 2014 FOMC Statement

Posted on by David Merkel
December 2013 January 2014 Comments
Information received since the Federal Open Market Committee met in October indicates that economic activity is expanding at a moderate pace. Information received since the Federal Open Market Committee met in December indicates that growth in economic activity picked up in recent quarters. Shades their view up, but I don?t see much to support it.? Most of the growth is inventories.
Labor market conditions have shown further improvement; the unemployment rate has declined but remains elevated. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate declined but remains elevated. Shows less confidence as labor force participation falls.
Household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Household spending and business fixed investment advanced more quickly in recent months, while the recovery in the housing sector slowed somewhat. Shades their views of household spending and business fixed investment up.
Fiscal policy is restraining economic growth, although the extent of restraint may be diminishing. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. No change.? Funny that they don?t call their tapering a ?restraint.?
Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable. Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable. No change.? TIPS are showing slightly lower inflation expectations since the last meeting. 5y forward 5y inflation implied from TIPS is near 2.54%, down 0.10% from December.? Treasuries have rallied versus TIPS since the emerging markets crashed partially due to the taper.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.

 

 No change. Any time they mention the ?statutory mandate,? it is to excuse bad policy.
The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. No change. ?Monetary policy is omnipotent on the asset side, right?
The Committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced. The Committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced. No change.
The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term. No change.? CPI is at 1.5% now, yoy.
Taking into account the extent of federal fiscal retrenchment since the inception of its current asset purchase program, the Committee sees the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy. Taking into account the extent of federal fiscal retrenchment since the inception of its current asset purchase program, the Committee continues to see the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy. No change.? They have a deficient model of what deficit spending does for the economy.
In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to modestly reduce the pace of its asset purchases. Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in February, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $30 billion per month rather than $35 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $35 billion per month rather than $40 billion per month. Reduces the purchase rate by $5 billion each on Treasuries and MBS

 
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. No change
The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate. No change.? But it has little impact on interest rates on the long end, which are rallying into a weakening global economy.
The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. No change. Useless paragraph.
If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. Says that purchases will likely continue to decline if the economy continues to improve.
However, asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases. However, asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases. No change.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. No change.
The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. Not a time limit but economic limits from inflation and employment.

Just ran the calculation ? TIPS implied forward inflation one year forward for one year ? i.e., a rough forecast for 2015, is currently 1.80%, up 8 bps since the last meeting.? Here?s the graph.? The FOMC has less than 1% of margin in their calculation.
In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. No change.
The Committee now anticipates, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal. No change. Repetitive.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. No change.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Charles L. Evans; Esther L. George; Jerome H. Powell; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Richard W. Fisher; Narayana Kocherlakota; Sandra Pianalto; Charles I. Plosser; Jerome H. Powell; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen.

 

 The names change, but the vote is largely the same ? why no hawks urging for a faster end to QE?
Voting against the action was Eric S. Rosengren, who believes that, with the unemployment rate still elevated and the inflation rate well below the target, changes in the purchase program are premature until incoming data more clearly indicate that economic growth is likely to be sustained above its potential rate.   Rosengren is no longer a voting member.? Good.

?

Comments

  • Small $10 B/month taper.? Equities flat and long bonds rise.? Commodities do nothing.? The FOMC says that any future change to policy is contingent on almost everything.
  • Shades their views of GDP household spending and business fixed investment up, and their views on labor force participation down.
  • They think that if they use more words, they will be clearer.? Longer statements are harder to parse and understand.? They need to clean up the statement.? There are many sentences that could be eliminated with no loss of meaning.
  • Current proposed policy is an exercise in wishful thinking.? Monetary policy does not work in reducing unemployment, and I think we should end the charade.
  • In the past I have said, ?When [holding down longer-term rates on the highest-quality debt] doesn?t work, what will they do?? I have to imagine that they are wondering whether QE works at all, given the recent rise and fall in long rates.? The Fed is playing with forces bigger than themselves, and it isn?t dawning on them yet.
  • The key variables on Fed Policy are capacity utilization, unemployment, inflation trends, and inflation expectations.? As a result, the FOMC ain?t moving rates up, absent increases in employment, or a US Dollar crisis.? Labor employment is the key metric.
  • GDP growth is not improving much if at all, and much of the unemployment rate improvement comes more from discouraged workers, and part-time workers.
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Emerging Markets Submerge

 

  • Argentina to Ease Currency Controls After Devaluation http://t.co/pnDs7kHHDb Argentina finally does something smart that will stabilize $$ Jan 25, 2014
  • Contagion Spreads in Emerging Markets as Crises Grow http://t.co/8tQg0o3wEA The Volatility Machine amplifies the tightening of the Fed $$ Jan 25, 2014
  • Traders watching for signs to see if this sell off is the big one http://t.co/EujnhyTV3z Feels like Shanghai Feb2007, market up&then died $$ Jan 25, 2014
  • Stocks Slide Toward Biggest Weekly Drop Since May http://t.co/AJ8JGDmZNl Volatility Machine kicks in, as emerging markets get hammered $$ Jan 25, 2014
  • China Moves to Avert Shadow Lender’s Default http://t.co/X6UnupKats China wants 2 avoid defaults, but what will they do when too big? $$ Jan 25, 2014
  • China Trust Products Gone Awry Evoke Soros Crisis Echoes http://t.co/sMEaYwiS61 Really sounds like China has a lot of Ponzi schemes going $$ Jan 25, 2014
  • China-Dumps-Dollars Hoax Not So Funny http://t.co/nvNpEgGK42 Remember the mercantilists lost. The neomercantilistic Chinese will lose big $$ Jan 25, 2014
  • Argentine Default Chaos Relived as Blackouts Follow Looting http://t.co/EW7kZrzbOa & Argentine Peso Drops http://t.co/nD9qMSJxla A mess $$ Jan 24, 2014
  • Fool’s Gold: Behind Nu Skin’s Chinese Subculture http://t.co/FiwozVHn6y What does the party think about a business that sounds cult-like? $$ Jan 24, 2014
  • Rousseff Debuts at Davos to Assure Investors She Had Spurned http://t.co/YTr84l0eTg Shortly after Dilma elected, I sold Brazilian stocks $$ Jan 22, 2014

 

Energy

 

  • You can?t be sure of Shell ? or shale http://t.co/5n1PLW2msn Behemoth oil companies are like utilities &pay good dividends, meh cap gains $$ Jan 25, 2014
  • Steady oil market at risk from sabotage, instability http://t.co/zHMkSoGlsD This is normal 4 the oil market; no reason to worry $$ Jan 25, 2014
  • Dunno: Polar Pig Deserves Little Blame for Propane Shortage? http://t.co/ehK6qV9cRl I think corporations & individuals should stockpile $$ Jan 24, 2014
  • Quoting Bible, using Joseph stockpiling grain in Egypt, neglects an interpretation rule: u can’t get doctrine from a historical passage $$ Jan 24, 2014
  • Energy is gradually decoupling from economic growth http://t.co/gn09N1yIJH What is really meant is that we continue to get more efficient $$ Jan 24, 2014
  • Valero forecasts 4Q results above expectations http://t.co/NIOthsoMsl Well run company has a surprise beat FD: + $VLO $$ Jan 24, 2014
  • European businesses rushing to find Iran bonanza http://t.co/2258VWxDG9 Greed of businesses overcoming ideology of political allies $$ Jan 24, 2014
  • Megaprojects a megaheadache for oil bosses http://t.co/X3IXqYAVDa Big projects almost always tend to lose $$ Jan 23, 2014
  • How America?s Fracking Boom Helps 2Boost Treasuries Demand http://t.co/lyAXsrmTUo Funny, but when we ran deficits, foreigners bot r bonds $$ Jan 22, 2014

 

Market Impact

  • Gundlach Counting Rotting Homes Makes Subprime Bear http://t.co/SXM2uwxd0Z Gundlach moves on anticipating a bearish housing situation $$ Jan 25, 2014
  • One in Three Audits Fail, PCAOB Chief Auditor Says http://t.co/FCZMp7tGfF No surprise. Some accounting requires intelligence of actuaries $$ Jan 25, 2014
  • How to invest in the hottest stock sectors http://t.co/ZIaKwXmdma I’ve written about this b4. It works, but it flames out occasionally $$ Jan 25, 2014
  • 6 reasons your investments stink http://t.co/4NfbdyIMsm Good asset allocation considers time horizon, & asset class relative valuations $$ Jan 25, 2014
  • 6 flawed rules of personal finance http://t.co/nO5kOsmVsb Generally right, except you shouldn’t spend >4% of your lump sum per year $$ Jan 25, 2014
  • Hard-to-Sell Junk Debt Lures Oaktree to JPMorgan http://t.co/MyJdNpw4Fo I respect Marks; there r no absolute values 2b had in junk debt $$ Jan 24, 2014
  • The mountain without Mohamed http://t.co/joadD6Wp2D Pimco is a “quant shop” which grew too large for the markets that it exploits $$ $TLT Jan 24, 2014
  • Goldman Stocks Strategist Fends Off ?Barrage? After Valuation Call http://t.co/nNCz1syP8m No one ever gets popular opposing a boom. $$ $SPY Jan 24, 2014
  • Bubbles as a deflationary escape chute http://t.co/hiDhyar3aD There are simpler & safer ways to run economic policy. Regulate banks hard $$ Jan 23, 2014
  • Pressure mounts for corporates? cash piles to be put to work http://t.co/WBdUF52rz2 1 corporation’s cash is another corps short-term debt $$ Jan 23, 2014
  • Floating Notes Debut in US as Cash Chases Fewer Securities http://t.co/9On051rHUu This will be good 4 money market funds in the short-run $$ Jan 23, 2014
  • Why IBM Should Stop Buying Its Stock http://t.co/1gsVe7tLpS If you have highest price in the Dow Jones Industrial Avg u get more scrutiny $$ Jan 23, 2014
  • Buffett Makes Millions Selling 500:1 Monkey-Linked Derivs http://t.co/6juOLsh2m3 @matt_levine Wrote about this 2 http://t.co/D3sirU5yWN $$ Jan 22, 2014
  • Buffett Backs $1B NCAA Hoops Tournament Prize http://t.co/MLvgHtx7NX Almost no way that Buffett can lose here; perfect bracket impossible $$ Jan 22, 2014
  • US Bank Risk Guidelines Would ?Accelerate? Enforcement http://t.co/DaeYf9zoje I’m not sure this will work, but it will bulk up compliance $$ Jan 22, 2014
  • CFOs Use Face Time, Plant Tours to Court Shareholders http://t.co/7CHts6TqdO This isn’t new, but it is wise to build goodwill w/investors $$ Jan 22, 2014
  • Why earnings could grow http://t.co/Zmwatc3v87 h/t: @ritholtz rising profitability, overseas biz, wise cap allocation, reasonable val’ns $$ Jan 22, 2014
  • Why ‘Peak-Earnings Models’ Are Nonsense http://t.co/Sa3uAci0pj Let’s see where actual unadjusted earnings are, & see if they are growing $$ Jan 22, 2014
  • Pimco CEO El-Erian Resigns http://t.co/Bl05w8h5Tn U have 2 remember that Pimco is a “quant shop.” They follow their models, not people $$ Jan 22, 2014
  • Gold-Price Banks Meet Amid Regulatory Pressure http://t.co/2W5hTdfKpm Post-LIBOR probe it’s in their interest to solve it quietly if poss $$ Jan 22, 2014

?

Rest of the World

 

  • Iceland Traps Hedge Funds in Refusal to Discuss Bank Claims http://t.co/kVUcp2fXvf Iceland delays claims from the crisis, cares 4 people $$ Jan 24, 2014
  • Merger Bonanza Hits Finland as Economic Pain Becomes Asset http://t.co/FXCOFmQABx Finnish assets r cheap, & other firms buy them up $$ Jan 24, 2014
  • Sochi Security Slalom Shows Terror Risk With Putin on Guard http://t.co/ij243mnvCN Russia will try hard, but will they prevent terrorism? $$ Jan 24, 2014
  • Investors Seek Yields in Europe, but Analysts Warn of Risk http://t.co/a3eXCJjgqc Seek a margin of safety & don’t reach 4 yield anywhere $$ Jan 24, 2014
  • Europe, Facing Economic Pain, May Ease Climate Rules http://t.co/2aK9oLpKg6 What a hoot! The Eurocrats turn their back on global warming $$ Jan 24, 2014
  • West Explores Plan B for Forces in Afghanistan http://t.co/9cKJcmzbyt If Afghans don’t want the US, we should leave; fractious place $$ $TLT Jan 24, 2014
  • Can Rising Property Values Spur Wary Japanese to Spend? http://t.co/fsrr5ArGtP Dangerous game, at the end 2much debt & 2 little cash flow $$ Jan 24, 2014
  • Israeli Ultra-Orthodox Do the Math in Bid to Enter Workforce http://t.co/afrV0U0fd4 Think of Dark Ages where 25% were supported by others $$ Jan 23, 2014
  • Olympics host Sochi remains a volatile region http://t.co/B8gwlvHrOR A great test 4 Russia; how well can u protect a perfect target $$ $SPY Jan 22, 2014
  • Abe Eyes Land-Price Reflation to Spur Construction Boom http://t.co/1QMMntydBq But Abe thinks he will succeed in creating property bubble $$ Jan 22, 2014
  • Pimco Dropping Linkers Calls Time on Abenomics Inflation Target http://t.co/r37SBu12G5 Pimco doesn’t believe Abenomics will inflate much $$ Jan 22, 2014

 

Companies & Industries


?? Fed May Protect Warren Buffett as a National Treasure http://t.co/zTdv5t6tTz Unlike most, Buffett has more than enough cash 2 survive $$ Jan 25, 2014

  • T-Mobile Answers Call of Underbanked as Banks Fail to Pick Up http://t.co/sAl7vhJJlP New cheap way 2do payments w/o a bank account $$ $TMUS Jan 24, 2014
  • eBay CEO Says Icahn PayPal Spinoff Makes No Sense http://t.co/4bKyeBMODa Then rename the company Paypal,& spin off $EBAY . $$ Jan 24, 2014
  • What Bankers Need to Know About the Target Breach http://t.co/L6XXJaFmVY Detailed; explains how credit data captured, stored & sent $$ $TGT Jan 24, 2014
  • Pinterest CEO Ben Silbermann on Being a Dad &Running a Company http://t.co/exLTi0CLyi The “Glass Ceiiing” Means u care about your family $$ Jan 23, 2014
  • Madoff Haunts Yeshiva as University Slides to Junk http://t.co/ZbNeoudT1k Wise 2 avoid board conflicts where board member invests 4 board $$ Jan 23, 2014
  • Diamond Foods CFO on Recovering From a Crisis http://t.co/aVFn9zioB9 America offers unlimited second chances, but clean things up or else $$ Jan 23, 2014
  • Dan Loeb’s Third Point Discloses Stake in Dow Chemical http://t.co/2RuMuNEKjK Separate petrochemicals from specialty chemicals $$ $DOW #easy Jan 22, 2014
  • Buffett Leans on 29-Year-Old Cool to Oversee Problems http://t.co/NfABsLkBzD The start of a gradual centralization of $BRK-B businesses $$ Jan 21, 2014

?

US Politics & Policy

 

  • Thrill of Obama Home Visits Fades for Americans Cited at Events http://t.co/x0aWw6ddia Change seems like spare change or loose change now $$ Jan 25, 2014
  • Why Uncle Sam Can’t Guarantee College Grads a Job http://t.co/oM0htsJcLk College is debauchery, not job preparation; end the subsidies $$ Jan 25, 2014
  • Tor Anonymity Software vs. the National Security Agency http://t.co/mhBGgZPZyS Very cool, let TOR hide private communications from Gov’t $$ Jan 25, 2014
  • The Sleepiness of a Hollow Legend http://t.co/d2NRpymDBP Peggy Noonan on State of the Union Address. I never listen to them; not worth it $$ Jan 25, 2014
  • Davos pusillanimity watch, LGBT rights edition http://t.co/5BkuxGdANL vs Romans 1:28-32 http://t.co/jFOUPLWLgF Jan 24, 2014
  • Resolved: Obamacare Is Now Beyond Rescue http://t.co/SXiG685Z2r Idea is most of the improvements won’t survive the necessary cost cuts $$ Jan 24, 2014
  • NSA?s Spying on Phone Calls Illegal: US Privacy Board http://t.co/ZStT1WAiwT Should not be written off; this aids a healthy debate $$ $SPY Jan 24, 2014

 

US Healthcare

 

  • More Women Seeking Medical Help to Get Pregnant http://t.co/8ICRmFNKx3 Natural result of delaying marriage, or not marrying at all $$ Jan 24, 2014
  • Where Have All the Uninsured Gone? http://t.co/0jlpsHORUj They don’t want insurance. They will take their risks & pay as they need to $$ Jan 23, 2014
  • How Qualified Is Your Doctor? http://t.co/XkAxYmjsA6 Hard 2 tell, is certification busy work or real testing? $$ Jan 23, 2014
  • Circumcision Coverage Comes Into Focus http://t.co/rZ24KWxvGb One of those issues where if someone has a view, it tends 2b polarized $$ Jan 22, 2014

 

Other

 

  • How Real is Spike Jonze’s ‘Her’? Stephen Wolfram and Peter Norvig Weigh In http://t.co/IgJG3bdrYr AI will not get self referential ideas $$ Jan 25, 2014
  • New York Officials Arrest Man in Lufthansa Heist http://t.co/toMAGIz5ck It took 35 years, but finally an arrest 4 the ’78 heist & others $$ Jan 24, 2014
  • Card-Theft Software Grew in Internet’s Dark Alleys http://t.co/cvTgCMC0lA The losses occurred from Target missing hacks of credit cards $$ Jan 23, 2014
  • Give the guy a second chance. Yes he blew it once b4, but he is smart and now knows what the limitations r http://t.co/6Fbp1jc6EJ $$ Jan 23, 2014
  • Can a Disgraced Trader Get a Job in Academia? http://t.co/qjoP4duPQL He deserves a second chance; that is what makes America great $$ Jan 23, 2014
  • Vital Signs: More Households Don?t Own a Car http://t.co/HBlc8L9z1V More options available 4 getting around & owning a car is costly $$ Jan 22, 2014
  • Top employers for flexible and work-at-home jobs http://t.co/UGz6F2XMae Home work getting more common, challenges managing the dispersed $$ Jan 21, 2014

Wrong

  • Wrong: This 100-year-old idea could end San Francisco?s class war http://t.co/Wtxk7wwsvH Sorry, land tax would get passed to renters $$ Jan 24, 2014
  • Dunno: Don’t Care About Deficits? Vote Republican http://t.co/1BKNS2m80j The t-party cares about deficits & they r growing in the GOP $$ Jan 24, 2014
  • Wrong: Huge cash pile puts recovery in hands of the few http://t.co/8rRHHFpZJN Most of the cash collateralizes derivatives, etc. Not free $$ Jan 24, 2014

?

Comments, Replies, Retweets

  • Roddy Boyd finds alleged Ponzi schemer http://t.co/GRBY0dqLqv What a guy, Roddy Boyd. $$ Jan 24, 2014
  • @footnoted @theofrancis @BoydRoddy His skills r considerable, as r his ethics. $$ Jan 24, 2014
  • @pmarca I’ve said that, but less colorfully; the market reflects all information acted upon, including errors. $$ Jan 23, 2014
  • @maoxian Good point, will have to consider that. But board should not have members investing for them $$ Jan 23, 2014
  • Wrong: UBS Tells Davos Leverage Ratio Over-Reliance Threatens Stability http://t.co/DZ5gfHmXXK After a crisis from overleveraged banks? $$ Jan 22, 2014

?

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Rest of the World

 

  • Crunch Escalates as Money Funds Rival Shadow Banks http://t.co/JVU1w5ipZc Money funds in China suck liquidity away from wealth mgmt prods $$ Jan 20, 2014
  • Spain?s Worst Year for Work Leaves Rajoy Counting Cost http://t.co/KlaAGab4kY Private debts r not economically neutral. Large -> unstable $$ Jan 20, 2014
  • Richest Scandinavian Nation Extends Its Junk Boom http://t.co/ZVwwxEAdIa Norwegian financial institutions have hunger for yield in kronor $$ Jan 20, 2014
  • Bird Flu Kills Health Worker, Stokes Transmission Concern http://t.co/FVcxVhaH4L Would not b concerned, seems difficult to transmit virus $$ Jan 20, 2014
  • Rise of ‘Common Man’ in India Threatens Stability of Government Coalition http://t.co/vke6lnqM3s Things get squishy if no majority win $$ Jan 20, 2014
  • German Economic Growth Fails to Gain Impetus http://t.co/g9EQLN5HNg Depends on on the strength of those that import German goods $$ $SPY Jan 20, 2014
  • French First Lady Leaves Hospital http://t.co/hnnrYJwE2q At least *one* person cared about the behavior of Francois Hollande $$ #sad Jan 20, 2014
  • Solar Beats Gas Unlocking Middle East?s Heavy Oil, Report Says http://t.co/dmyDla2t7R Fascinating, using cheap solar energy 2 produce oil $$ Jan 20, 2014
  • Hot Demand for Emerging-Market Bonds http://t.co/LLZPDt4iyT This is puzzling , I don’t get how emerging markets r well financed $$ Jan 19, 2014
  • China encroaching on U.S. military dominance in Pacific, says top admiral http://t.co/h152VrhcEg So we can’t be global cop, good thing $$ Jan 19, 2014
  • Mobius Placing Biggest Wagers on Nigeria for Frontier Rally http://t.co/dsxt8Fft6e It is difficult to make $$ when there is a quiet war Jan 19, 2014
  • BENGHAZI WAS PREVENTABLE: Hillary Clinton cited for major security lapses http://t.co/5oCpBVlbdK Hillary will have a lot to answer for $$ Jan 19, 2014
  • Saudi King Sees Egypt Too Big to Fail Under Friendly General http://t.co/oIHo5fae5s Saudi Arabia gets pragmatic, supports Egyptian Army $$ Jan 19, 2014
  • The West Is Losing Ukraine http://t.co/GWCNb322Ss Ukraine is losing the West, as its leader strips freedoms, & fights protesters $$ $SPY Jan 19, 2014
  • Hollande?s Tryst and the End of Marriage http://t.co/EUGztMAKnq Secretly, even the French care about the stability of their leaders $$ $FXE Jan 19, 2014
  • Baltic Homes That Singed Scandinavia Banks Heating Up: Mortgages http://t.co/3KHcPllcKZ Beware large increases in indebtedness $$ $TLT $SPY Jan 19, 2014
  • China’s Indie Rockers Get Boost From Online Music Platforms http://t.co/MSbdnGFzRI Note the prominence of our friend Michael Pettis $$ $FXI Jan 19, 2014
  • Venezuela Post-Ch?vez: Hustlers’ Paradise http://t.co/ROstARpBkc Thugs run govt. Some people get cheap goods, while others get shortages $$ Jan 19, 2014

 

US Politics & Policy

 

  • Stop Obamacare?s Outrageous Bailouts http://t.co/uHYJvyRcM7 Once losses exceed 8% of premiums, taxpayers pay for 75% of excess losses $$ Jan 20, 2014
  • Questionable: Robert Gates?s Dishonorable Act http://t.co/bIEGf7o57k There r too many bad secrets in DC that we ought to know about $$ $SPY Jan 20, 2014
  • Which Fed Guidance Should We Believe? http://t.co/yqjOZX5AX6 As FOMC uses more & more words 2explain what they r doing we understand less $$ Jan 20, 2014
  • When Low Unemployment Is Bad News http://t.co/QLiWV8ocV5 Labor force participation rate continues 2 fall as punk economy creates few jobs $$ Jan 20, 2014
  • NSA Data Have No Impact on Terrorism: Report http://t.co/ug8GtnLjqz NSA is not worth the privacy risk, nor what we pay to employ them $$ Jan 20, 2014
  • Ari Fleischer: How to Fight Income Inequality: Get Married http://t.co/zz6lbDWiku Poverty rate falls 4 those who can make a marriage work $$ Jan 20, 2014
  • Obama’s Constitutional Education http://t.co/bH4jfr1rro & http://t.co/hdzNe1Blo4 Should consider unilateral actions modifying PPACA also $$ Jan 20, 2014
  • How the crash of safe assets fueled the financial crisis http://t.co/4Vlfxp7PUj When “safe” assets r found to have credit risk -> bust $$ Jan 20, 2014
  • Congress split over NSA’s domestic spying program, could just let laws expire http://t.co/mCD2pIbSl1 Divisive: left & right vs center $$ Jan 20, 2014
  • Young enrollees of Obamacare fall well short of goal http://t.co/VokUg0XFP6 When premiums rise as a result, people will b unhappy $$ $SPY Jan 20, 2014
  • Spy court judge slams proposed privacy advocate http://t.co/vkz4SyY5li We need someone arguing against spying on average people $$ $SPY $TLT Jan 19, 2014
  • What?s Net Neutrality? What Happened to Net Neutrality Yesterday? What Happens Next? A Q&A for the Rest of Us. http://t.co/xQACJvW8UC Read Jan 19, 2014
  • Volcker Rule Fix Will Aid Large and Small Banks http://t.co/nGv1TXtLT5 This is a lousy rule that allows banks to bury Trup CDO losses $$ Jan 19, 2014
  • Hillary Clinton’s political hit list of top betrayers includes Kerry, Kennedy http://t.co/33RFv63nKz This reminds me of the Nixon enemies $$ Jan 19, 2014
  • Judge Disallows Plan by Detroit to Pay Off Banks http://t.co/XQ6f1E2EZM Detroit should aim for the bast long-run outcome $$ $MUB $SPY $TLT Jan 19, 2014
  • Is Your Abortion My Free Speech?? http://t.co/kUA2XLRPB9 This is where constitutions fall apart, b/c they are limited documents $$ Jan 19, 2014
  • Reid Gives Landrieu VIP Treatment to Tip Election Odds http://t.co/UhQFIcPVt9 Democrats desperate to retain power, aid marginal members $$ Jan 19, 2014
  • Where Are the U.S.?s Millionaires? http://t.co/c8fXDEPD5S Alas, but Maryland sucks the blood of America, & creates millionaires $$ $SPY $TLT Jan 19, 2014
  • I Spent Two Hours Talking With the NSA’s Bigwigs. Here’s What Has Them Mad http://t.co/UrXexYR07k They hate Snowden’s guts $$ $thatsimple Jan 19, 2014
  • How the NSA Almost Killed the Internet | Threat Level http://t.co/1SLDuNq93O Sowing distrust in major internet utilities on privacy $$ $GOOG Jan 19, 2014
  • To enforce net neutrality, the FCC has to decide that Verizon is a common carrier http://t.co/WRb6VestAF Simple idea, simple solution $$ $VZ Jan 19, 2014
  • Student Loans, the Next Big Threat to the US Economy? http://t.co/5hXsK5SIFn Rule of Thumb: avoid lending in area w/greatest debt growth $$ Jan 19, 2014
  • ISS Open to Activists Paying Bonuses to Directors http://t.co/R1nNEkokg4 Carl Icahn wins a small victory; broader implications unclear $$ Jan 19, 2014
  • ?Wolf of Wall Street? Offspring Never Quite Die http://t.co/oXkGDZQ1Ml It’s a revolving door & FINRA doesn’t provide real access 2 data $$ Jan 19, 2014

 

Market Impact

 

  • Investor Animal Spirits Spread to Companies Worldwide http://t.co/e8pKcudzhR No such thing as animal spirits, only pursuing opportunity $$ Jan 20, 2014
  • JPMorgan Says BVG Owes $200 Million Over ?Unfortunate? CDS http://t.co/coJQm6dpD5 What’s worse is trifling yield prompting BVG’s greed $$ Jan 20, 2014
  • Hedge Funds Raise Gold Wagers as Goldman Sees Drop http://t.co/7dc9dGCUCA Hedge funds 2short-term could b forced sellers on weakness $$ $GLD Jan 20, 2014
  • Even money market funds in a crisis would have a hard time delivering a >2% loss, which would b borne by investors, & not systemic $$ Jan 20, 2014
  • How You Can Survive a New Era in the Bond Market http://t.co/BvSkibWANR Too many people banging the drum 4 higher interest rates $$ $IEF Jan 20, 2014
  • From the prior tweet, Central Bankers have drawn wrong conclusion: You can fix a bust by issuing lots of credit. $$ Jan 20, 2014
  • The correct answer is that you can avoid a bust by not running loose monetary policy as in the ’20s & ’00s. We still have pain to come $$ Jan 20, 2014
  • Where Have All the Star Fund Managers Gone? http://t.co/qwbpDyDlkU Focus on low fees, long track record, low assets & not index-like $$ $SPY Jan 20, 2014
  • Reinsurers face ratings cuts, S&P warns http://t.co/70dK590OCG Too much surplus chasing reinsurance biz; I’ve been lightening the boat $$ Jan 20, 2014
  • Interest rates don’t matter? Federal Reserve paper says so http://t.co/guAPSQ05II Sad but true, monetary policy is weaker than most think $$ Jan 19, 2014
  • Professor Puts Ideas in Practice as Reverse-Mortgage CEO http://t.co/T3Kt0cNQtc As w/most complex financial agreements, this will fail $$ Jan 19, 2014
  • Metals, Currency Rigging Is Worse Than Libor, Bafin Says http://t.co/KjDNrRVR7m Impossible 2 create benchmarks free of human gaming $$ $SPY Jan 19, 2014
  • Nobody Likes Bonds!: by @ritholtz http://t.co/FuYachZ58I But *I* like bonds, particularly short corporates, loans, & $TLT FD: + $TLT $$ Jan 18, 2014

 

Other

 

  • Comet-Chasing Spacecraft Sends First Signal in 31 Months http://t.co/mZB62QnIYm Satellite to hitch ride on Churyumov-Gerasimenko comet $$ Jan 20, 2014
  • The ‘Sharing Economy’ and Its Enemies http://t.co/Qnc4YyZrOh How Airbnb steps on the toes of hoteliers, regulators & the tax man $$ $SPY Jan 20, 2014
  • Device Thefts Fueling Rise In Larcenies http://t.co/ohZZt8q2Qh NYC larcenies fall if you exclude theft of Apple-branded devices $$ $AAPL Jan 20, 2014
  • The Right Way to Go After Big Clients http://t.co/J6hoSbcHVX Can waste a lot of time & find margins squeezed in the end $$ Jan 20, 2014
  • What Secrets Your Phone Is Sharing About You http://t.co/u7wv29tyMG Many hack your phone datato get insights into how you shop $$ $SPY $TLT Jan 19, 2014
  • Moms in ?Survival Mode? as US Trails World on Benefits http://t.co/uSPuVZztqV We can argue over any benefit, but what when US is broke $$ Jan 19, 2014
  • Tennis Quant?s System Doubles Money Without Knowing Players http://t.co/sAS5Xug7DN Small markets r often inefficient, allow 4 small wins $$ Jan 19, 2014
  • Miners Chopping $10B Search Bodes Next Price Boom http://t.co/6X7H0KAivX Miners cut exploration budgets, should lead to higher prices $$ Jan 19, 2014
  • How the Target Hackers Did It http://t.co/Z8Jc5WuBQQ Scraped RAM in POS machines grabbing all manner of data on card users $$ $TGT $SPY $TLT Jan 19, 2014
  • Another Bad Year for Religious Freedom http://t.co/3C3C5lrjCo Religion by its nature tends to invite constraint as it is a threat 2 govts $$ Jan 19, 2014
  • If Google Is a Guy, DuckDuckGo Is a Ghost http://t.co/rk9o0I3Uwx Want privacy for your searches? Consider DuckDuckGo $$ Jan 19, 2014
  • http://t.co/uPsFzsm1Tn How an intelligent lady managed to wrongfoot & destroy a website engaged in “revenge porn.” $$ Jan 19, 2014

 

Wrong

?

  • Likely Wrong: A New Asset-Allocation Strategy for Investing in Retirement http://t.co/eDqaDxhFuH Stocks r risky over intermediate periods $$ Jan 20, 2014
  • Wrong: Bonds Captivate $16T of Pensions http://t.co/NEpJSjCD7p Bonds have 2 go somewhere & defined benefit pensions have long liabilities $$ Jan 20, 2014
  • Wrong: Bailout Risk, Far Beyond the Banks http://t.co/iv5eT6lhea! Asset mgmt companies can go bust, & they pose no systemic risk $$ Jan 20, 2014
  • Wrong: Stanley Fischer saved Israel from the Great Recession. Now Janet Yellen wants him to help save the US http://t.co/CPMUggr3CA $$ $TLT Jan 20, 2014
  • Wrong: Ten quotes on the question of financial bubbles http://t.co/MNwr543Vsf No one focuses on the effect of borrowing money in bubbles $$ Jan 19, 2014
  • Wrong: Wealthy CEO Is Deeply Concerned About Budget Deficits http://t.co/gTGUwSF3hS Biased article doesn’t factor in entitlements $$ $TLT Jan 19, 2014

?

 

Replies, Retweets, and Comments

 

  • @DavidBCollum Look here: http://t.co/VaqQESCdCu Value Line has a chart that goes back to the 20s though… Jan 17, 2014
  • RT @cate_long: Please add http://t.co/QHQiCxYopc RT @researchpuzzler: a guide to finding data on the cheap from @AlephBlog http://t.co/mb? Jan 15, 2014
  • RT @Pawelmorski: Great spot @toby_n : DB’s Slok quantifies how difficult the Fed finds explaining itself. http://t.co/1quahXrnJD Jan 14, 2014
Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Rest of the World

 

  • Iraq Is New Schism for Saudis in Strained Alliance With West http://t.co/WiNnlXIhzI This piles on top of Iran & Syria; Sunni-Shi’a divide $$ Jan 11, 2014
  • Hollande Deplores Magazine Splash of Affair With Actress http://t.co/xVSPTk9f3r Many enjoy scandals, even if they say nothing is wrong $$ Jan 11, 2014
  • Surprise drop in euro zone inflation shows deflation risk http://t.co/BE8iIa4ENn Economic conditions are so weak, should we b surprised $$ Jan 09, 2014
  • Area Evacuated After Fiery Derailment in Canada http://t.co/fYOHtW5ZOy Pipelines are environmentally safer; send the memo to Obama $$ $XLE Jan 09, 2014
  • South Sudan Peace Talks Falter http://t.co/OVw1hj1fuM Africa is essentially tribal, which does not mix well w/democracy, most of the time $$ Jan 09, 2014
  • Good News and Bad News About Global Inequality http://t.co/t01kegmAL3 Many non-economic indicators show inequality is declining $$ Jan 09, 2014
  • Rich Danes Face Benefit Cuts as Universal Welfare Abandoned http://t.co/6k9Y0HJukb Non-universal entitlements tend2get viewed as welfare $$ Jan 08, 2014
  • Bond Tab for Biggest Economies Seen at $7.43T in ?14 http://t.co/Zq3VTSJAKi The debts will roll over, the only question is the yield $$ $TLT Jan 06, 2014
  • Euro Jobless Scourge Seen Defying Leaders? Growth Pledge http://t.co/32L7Hx2qsQ 12%+ unemployment &little improvement, makes US look good $$ Jan 06, 2014
  • Dirtiest Coal?s Rebirth in Europe Flattens Medieval Towns http://t.co/w6KWbpzzLr Trading nuclear power for lignite seems a bad trade $$ Jan 06, 2014
  • Shadow Banking Risks Exposed by Local Debt Audit http://t.co/KzlEW24cbH The problem is that it is tough to count all the opaque debts $$ Jan 06, 2014
  • China?s Runaway Train Is Running Out of Track http://t.co/IAHF6JCUta! The Chinese debt bubble nears its demise, what will Chinese govt do $$ Jan 06, 2014
  • South Sudan Peace Talks Start as Army Pushes Back Rebel Assault http://t.co/aqwnwYxEhX Hard to have peace talks while pushing back rebels $$ Jan 05, 2014

 

Companies & Industries

 

  • Who Wins, Who Loses if the U.S. Starts Exporting Oil? http://t.co/vN2BTl7kwE Missed the effect on the commodity petrochemical industry $$ Jan 11, 2014
  • Dish Seeks to End $2.2B Bid for LightSquared Asset http://t.co/VjxnNgBsTV Ergen wants to end the deal b/c LightSquared missed milestones $$ Jan 11, 2014
  • Target Data Breach Much Worse Than First Thought http://t.co/GnaR3VwHeu 70M customers had home & email addresses & phone #s stolen $TGT $$ Jan 11, 2014
  • Intel Has Its Eyes Fixed on Networking http://t.co/AGlmAad3rY Intel thinks they have 4 openings 4 networks to aid the telecom companies $$ Jan 11, 2014
  • Lenovo Dominated Worst-Ever World PC Market in 2013 http://t.co/GhmqSwuIGf Lenovo has the lead in a big but shrinking business $$ $HPQ $SPT Jan 11, 2014
  • IBM Doubles Down on Watson http://t.co/op7SD7gIiS Watson is a genius, but it takes lots of effort to make the four areas of strength work $$ Jan 11, 2014
  • Wells Fargo Creates SWAT Team to Keep Loans In-House http://t.co/xxyrsqJcr6 Putting loans on the balance sheet? How quaint. $$ FD: + $WFC Jan 09, 2014
  • Americans Are Eating More Velveeta, and Now There’s Not Enough http://t.co/1fqq5dxvgC As a cook, contemplating this makes me queasy $$ $KFT Jan 08, 2014
  • How Companies Face Up to Human Trafficking Risk http://t.co/qE4zzQ8bve Very difficult to get all slave labor out of int’l supply chains $$ Jan 08, 2014
  • Why business schools charge so much and pay their teachers so little http://t.co/dBepTcQ2ba They’re amoral bastards w/a profit motive $$ Jan 11, 2014
  • Bank of America ramps up credit card loans http://t.co/UXRDzeM4Xp If the big banks r starting to open the lending spigots — inflation? $$ Jan 08, 2014

 

US Politics & Policy

 

  • Taxes Have Congress Avoiding Roads Bill as Money Runs Low http://t.co/x2UDQbheq7 Let the states prioritize their road construction/repair $$ Jan 11, 2014
  • What Liberals Don?t Get About Single Payer http://t.co/MaQQZQh2kM Insurers a small part of costs, Drugs, Medical equipment & Doctors big $$ Jan 11, 2014
  • Christie and the IRS http://t.co/dWHZskMLHU Contrast the Governor’s contrition with Obama’s lack thereof; tho if Christie lied he is dead $$ Jan 11, 2014
  • HARP: How the Mortgage Program Has Panned Out http://t.co/ZDN94uFdsg It does leave the taxpayer w/a contingent liability 4 defaults $$ Jan 11, 2014
  • Puerto Ricans Flock North Away From Battered Economy http://t.co/LhchTMo3Q0 Self-reinforcing cycle as better off Puerto Ricans come to US $$ Jan 11, 2014
  • How the War on Poverty Was Lost http://t.co/uujlzrRkDp Goal was give fellow citizens a fair chance to develop their own capacities $$ #fail Jan 11, 2014
  • Chris Christie Is Not a Bully. These Guys Were http://t.co/pxYg6RBYCs John Adams, RFK, LBJ, Andrew Jackson, Nixon hurt political enemies $$ Jan 11, 2014
  • Millionaires’ Club: For First Time, Most Lawmakers are Worth $1 Million-Plus http://t.co/PMBoM3NyJA A million ain’t worth what it used 2b $$ Jan 11, 2014
  • Clickable Consent at Risk in Internet Privacy Lawsuits http://t.co/KFghV2XJ4s How much do u give away accepting information use policy? $$ Jan 09, 2014
  • Poverty level under Obama breaks 50-year record http://t.co/87feDKj7SN Be sure & give Congress, Bureaucracy & the Federal Reserve blame 2 $$ Jan 09, 2014
  • How Not to Regulate http://t.co/isrkmSd0l4 Good regulations r holistic & ignore special pleading from politically connected entities $$ $SPY Jan 08, 2014
  • Congress Makes NASA Finish Useless $350 Million Structure http://t.co/QlvScdhRab If we can’t make easy cuts, hard cuts will never b made $$ Jan 08, 2014
  • Cull the Stupid Tax Breaks http://t.co/j2UWBPZkwe Mostly we need to eliminate tax breaks that are not generally available to all business $$ Jan 06, 2014
  • Study Shows Fracking Is Bad for Babies http://t.co/i8KWfQpO5t Studies shouldn’t be released until peer review complete; statistics abuse $$ Jan 05, 2014
  • Darrell Issa’s Mischievous Postal Reform Bill http://t.co/YtisT8Yjey Eliminates Saturday delivery to restore COLAs for military retirees $$ Jan 05, 2014

 

US Economics

 

  • Is Jobless Rate Really Falling? http://t.co/pF2yH72N2B I find it dubious that falling labor participation rate is due to natural reasons $$ Jan 11, 2014
  • Payrolls Rise Less Than Forecast; US Jobless Rate at 6.7% http://t.co/ux3LHxbobh We need to have a different H/L #, U-3 is 2 unreliable $$ Jan 11, 2014
  • Highlights From the December Jobs Report http://t.co/3ZGjwho4Pv The December civilian labor force participation rate was a low 62.8% $$ $TLT Jan 11, 2014
  • Best Year Since 2007, Even Better 2014 http://t.co/CKxqxhYHbd Still haven’t made it back to 2000-2007 levels, projects better 2014 $$ Jan 06, 2014
  • What Do You Call 12,000 Economists Trudging Through Snow? http://t.co/xX7zlqcMne Not enough snow 😉 $$ Jan 05, 2014
  • Arthur Laffer Interview http://t.co/pKFx0aTPFV Difficult 2 deal w/a paradigm shift; inflation not realistic during deleveraging $$ Jan 04, 2014

 

Market Impact

 

  • When Does A Bubble Spell Trouble? http://t.co/pq9hFV9ywz Many transformative technologies get overvalued b4 producing real cash returns $$ Jan 11, 2014
  • Looking for Alternatives to Bonds http://t.co/2n1ehNPQgu Until negative part of the credit cycle bites it works; keep one eye on the exit $$ Jan 11, 2014
  • Skagen Says Ignore Wall Street, Bet on Emerging Markets http://t.co/pYIwqoL7kD Alternative POV, but emerging mkts do bad amid $$ tightening Jan 11, 2014
  • 10 Reasons the Gold Bugs Lost Their Shirts http://t.co/MroSlPib0A @ritholtz writes a great piece on investing in an mistitled article $$ Jan 09, 2014
  • Older Americans Shun Retirement at 65 for Risky Startups http://t.co/cvhiw8zRZC I’ve run into these in PE, the desperation can be felt $$ Jan 08, 2014
  • Bull Market Has Years Left for Shaoul on S&P 500 Values http://t.co/pOWNFznDSG Argument is that breadth leads to long market rallies $$ Jan 06, 2014
  • Wall Street’s Reading List http://t.co/jvhIzbPtLC Great list, but add in Michael Pettis’ The Great Rebalancing http://t.co/C4jKcrUNHV $$ Jan 06, 2014

 

Other

?

  • Marriage Makes You Rich and Stupid http://t.co/9mIBOTCz44 Another factor here is that the productivity of stay-at-home spouse isn’t taxed $$ Jan 11, 2014
  • The Open-Office Trap http://t.co/nnjZnr8ycb Open offices promote distraction, which reduces productivity; it takes courage to resist it $$ Jan 11, 2014
  • To Stop Procrastinating, Look to Science of Mood Repair http://t.co/Ruw3YnrcvW Just get started, avoid a pity party, look to the future $$ Jan 09, 2014
  • Website helps students find freelance gigs, avoid unpaid internships http://t.co/NYbdKlHHJs Interesting stuff, sent it to my college kids $$ Jan 08, 2014
  • Payout May Come for an ABA Team That Is Long Gone http://t.co/qs8Fb6yl8v Half Billion comes 37 years later 2 owners of marginal ABA team $$ Jan 08, 2014
  • Frigid Air Threatens Coldest US Weather in Two Decades http://t.co/7xtE649g4l Things are extra cold in the Northern Hemisphere on average $$ Jan 06, 2014
  • Noah?s Ark Risks Collapse Without Bond Buyers by February http://t.co/0eBaSP8x1I It would be sad to see Noah’s Ark underwater 😉 $$ Jan 05, 2014
  • The Scandal Bowl: Tar Heels Football, Academic Fraud, and Implicit Racism http://t.co/J2CERTqxYa Phony classes &grades 4 football players $$ Jan 05, 2014

 

Information Security

 

  • Security Experts Pull Out of RSA Conference in NSA Protest http://t.co/Cyk8yREEVU & they should, y support those who compromise security? $$ Jan 11, 2014
  • Is the NSA spying on Congress? http://t.co/FIeYlyIVUV Not long, worth a read; NSA responses to Sanders and Grayson indicate yes. $$ Jan 04, 2014

?

Wrong

  • Wrong: Federal Probe Targets Banks Over Bonds http://t.co/ODCDpENNQo Vacuous, the bond market requires that you research what u buy $$ $AGG Jan 09, 2014
  • Wrong: Why great CEOs ignore their stock price http://t.co/MrxV9cKI6N Great CEOs use their stock price to guide buybacks & acquisitions $$ Jan 09, 2014
  • Wrong: Is China Losing Hong Kong? http://t.co/ZOtl520jK9 I don’t think the Party cares much over whether those in Hong Kong are happy $$ Jan 06, 2014

?

Comments, Replies & Retweets

  • RT @MacFarlaneNews: EPIC FAILURE- U.S. Navy accidentally sends reporter its strategy memo for dodging his FOIA request cc: @gregorykorte ht? Jan 08, 2014
  • RT @OracleofWallSt: @MatthewPhillips Myth: companies investing more cash in buybacks and not reinvesting. This chart debunks this view. htt? Jan 08, 2014
  • @hblodget @MatthewPhillips How much of the cash is collateral for derivatives, and other lending agreements? Different world today. Jan 08, 2014
  • @Mr_Berman Brainy, and cool-looking for his era. We all age. 🙂 Jan 07, 2014
  • I review more books than the above personalities. I nominate The Great Rebalancing by Michael Pettis…. http://t.co/4zknuYQS16 Jan 06, 2014
  • Bitcoin, like a promoted penny stock, is easily manipulated, because there is little intrinsic value http://t.co/5qyxzDVU68 Jan 06, 2014
  • The big question is when deleveraging stops, and individuals and banks start borrowing… http://t.co/ZQLyY5kc4L Jan 04, 2014

?

Sorted Weekly Tweets

Sorted Weekly Tweets

Posted on by David Merkel

Japan

?

  • Japan World-Beating Stocks Seen Repeating Gains in 2014 http://t.co/v5QR4nVKd3 Analysts follow trends; they r wrong at turning points $$ Dec 28, 2013
  • Abenomics Drives Japan Hedge Funds to World?s Top Performers http://t.co/fDmMBWIxgL Let’s c if Japan can survive the increase in debts $$ Dec 28, 2013
  • Asia: From baby boom to bust http://t.co/eaDLDS3oAL Watch Japan 4a preview of what will happen across all of Asia; it won’t b pretty $$ Dec 28, 2013

?

China

 

  • China Confronts Workforce Drop With Retirement-Age Delay http://t.co/TdsDKG1p5u China gets to the problem very late & way too small $$ $FXI Dec 26, 2013
  • China is so worried about its cash crunch that it banned the term http://t.co/y0eN3A58iB Worry when central bankers care about language $$ Dec 26, 2013
  • China Credit Squeeze Eases as Central Bank Resumes Using Regular Cash-Injection Tool http://t.co/D5UNiQuQSv Papers over solvency issues $$ Dec 26, 2013
  • China’s Pain Points http://t.co/Ry2XaZHYT8 underfunded health&pension systems; environment probs; water shortages; corruption; rigged courts Dec 26, 2013
  • China Promise Clashes With Clampdown on Foreign Business http://t.co/ycKPAWqGa2 They want the best of both worlds, and can’t get both $$ Dec 26, 2013
  • PBOC?s Opacity Leaves Markets Guessing Amid Cash Crunch http://t.co/TsgynBHdo6 No guess what PBOC policy will b, makin’ it up as they go $$ Dec 26, 2013
  • China Cash Crunch Pushes Up Short-Term Rates http://t.co/MgWmHwdQuC The fragility of the Chinese financial system comes into view $$ $FXI Dec 23, 2013
  • Was 2013 the Year We Lost China? http://t.co/Fmz3RixLW7 It’s difficult 2 say whether we ever “had” China, it pursues its own goals $$ $FXI Dec 23, 2013

 

PPACA / Obamacare

?

  • Obamacare Hits Snag in States as US Site Finds Footing http://t.co/3q1SnLxu59 Surprised that some of the states would do worse than Feds $$ Dec 28, 2013
  • Obamacare’s Web site Exchange Woes Trace to Cato’s Michael Cannon http://t.co/SDhb9sdATZ One Q is whether the natl exchange can subsidize $$ Dec 26, 2013
  • What to Do When ObamaCare Unravels http://t.co/w2iNS1HhWd Cute alternative 2 PPACA, but I think it could b even more expensive than PPACA $$ Dec 26, 2013
  • Rule Change on Health Insurance Rattles Industry http://t.co/Fyntbs0rjS The lowball estimate of what Obamacare would cost comes back2bite $$ Dec 23, 2013
  • Obama Repeals ObamaCare http://t.co/0RerlzDqA2 It was bad enough under Bush, y does Congress tolerate a president behaving like a king? $$ Dec 23, 2013

?

Rest of the World

?

  • Thai General Refuses to Rule Out Coup as Unrest Drags On http://t.co/PfqhKwIpSD A Thai friend of mine said military is needed in politics $$ Dec 28, 2013
  • BlackRock Buys Turkey Shares After Turmoil Spooks Markets http://t.co/bbcxmWIXHM $TUR down >26% in 2013 http://t.co/cHkL6E2TUd; $$ Dec 26, 2013
  • Iranians Pile Into Stocks as Nuclear Deal Spurs 133% Gain http://t.co/mZ7J47vnPp Wall Street getting slow; no $IRAN ETF available yet $$ Dec 26, 2013
  • Even in Straitened Times, Portugal Loves Its Bimby Cooking Robots http://t.co/j8a732IuKA Y isn’t this sold in the US? It does it all $$ $SPY Dec 26, 2013
  • Jihadists in Syria Draw Children of Muslims Who Settled in Europe http://t.co/r5suj7cZ6l Romantic youths want their lives 2b more than $$ Dec 26, 2013
  • UN to nearly double peace-keepers in South Sudan as violence explodes http://t.co/X9Z94O0mXF UN always increases malfeasance, bad 4 all $$ Dec 26, 2013
  • Ukraine Upheaval Spurred by 28% Rates Limiting Buyers http://t.co/5VFiYvnpRk Capital flees when civil disturbances arise, thus high rates $$ Dec 26, 2013
  • US Plans to Ask UN for More Troops in Turbulent South Sudan http://t.co/I60iRC1Nmb UN is not a lot of help in situations like this $$ Dec 26, 2013
  • Swiss Banks Employ Army of Advisers for US Amnesty Plan http://t.co/qRLXTt1JS7 Differing strategies as US exposure & reporting varies $$ Dec 26, 2013
  • South Sudan Refugees Swell As Americans Are Evacuated http://t.co/Iq2VxuFYNz Throw a bunch of warlords together, call it a govt & u get? $$ Dec 23, 2013
  • Russia Crisis Haunts Deutsche Bank?s Smith Seeing China Bust http://t.co/nRm4PPTlvA Suspect a China debt crisis would not affect US $$ Dec 23, 2013
  • Venezuela Devalues Bolivar for Tourist Dollars by 44% http://t.co/rOdpVu4xRd Almost 2 the point where the dollar will replace the bolivar $$ Dec 23, 2013

?

NSA

 

  • Report on NSA ‘secret’ payments to RSA fuels encryption controversy http://t.co/1YTaHu4mfK Put in a backdoor so that NSA could access $$ Dec 28, 2013
  • Edward Snowden, after months of NSA revelations, says his mission?s accomplished http://t.co/MdMFbSKaYK His life’s work is complete @ 29 $$ Dec 26, 2013
  • The One Big Question About RSA and Its Relationship With the NSA http://t.co/vR7GCsCa38 RSA builds “backdoor” 4 NSA 2 use, gets secret $$ Dec 26, 2013
  • NSA Struggles to Make Sense of Flood of Surveillance Data http://t.co/0gjztWYMSM Inside look at how data surveillance got out of control $$ Dec 26, 2013
  • Finnish Security Researcher Cancels RSA Talk in Protest http://t.co/v0hsM2y548 RSA deliberately built faulty random number generator 4NSA $$ Dec 26, 2013
  • Snowden Criticizes US Panel Overseeing Surveillance http://t.co/kLI7XmeKlN Panel exists 2whitewash bad behavior of intelgnc establishment $$ Dec 23, 2013

 

Market Impact

?

  • A Fund That Invests Like Buffett http://t.co/u9duSaR9oA I’m impressed; I’m putting their firm on my 13F list to track them quarterly $$ $SPY Dec 28, 2013
  • Our Outlook for the Stock Market http://t.co/N1IV6w32dj Morningstar gives their relatively bullish view of what 2014 will hold 4 stocks $$ Dec 28, 2013
  • Muniland?s ?Best of 2013? http://t.co/KhaiAVmjzg @catelong is one of the best on municipal bonds & here is her summary of 2013 $$ $MUB Dec 28, 2013
  • 40% of fund managers surveyed r overweight euro-area equities http://t.co/vPYGQFvagC Bull Calls United in Europe, Strategists C 12% Gain $$ Dec 26, 2013
  • So, I’m skeptical of the article in the last tweet, unless the managers r long term investors & value players b/c flexible $$ runs in crises Dec 26, 2013
  • Half & Half: Why Rowing Works http://t.co/h46bRNMLAR A 50-50 mix of stocks & bonds w/rebalancing outperforms 100% stocks in choppy mkts $$ Dec 26, 2013
  • You Too Can Invest Like Warren Buffett?Maybe http://t.co/FU6MZzsmyj U would have to able to predict moats & not lever up too much $$ #tricky Dec 26, 2013
  • Investment Strategy Rises From Obscurity http://t.co/O8yIIqjTpZ US Govt loses $7B/yr on MLPs; Article features $IEP $CVR $CVRR $KMP $ETP $$ Dec 26, 2013
  • Wall Street Landlord Loses Round 1 in Ohio School Tax Fight http://t.co/FgKOrnq283 Maybe school district should pass landlord profits tax $$ Dec 26, 2013
  • Companies Binge on Share Buybacks http://t.co/JyW5QaRRP4 2% divs +3% buybacks ~5% shareholder yield. Is that enough reward 4 equity risk? $$ Dec 26, 2013
  • The TSC Streetside Chat: Robert Wilson, Part 2 http://t.co/IzzNlzE776 13 years old but prescient; he died in a suicide yesterday $$ Dec 26, 2013
  • Financial Scammers Increasingly Target Elderly Americans http://t.co/raIvTr0B9a Tonight’s topic @ Aleph Blog – watch out 4 older friends $$ Dec 26, 2013
  • How Investigators Untangled the ‘Wolf of Wall Street’ Scandal http://t.co/AJwcx4XONC Penny stocks, overtrading, market manipulation $$ Dec 26, 2013
  • The Buyback Rally http://t.co/ZkBJsWBpe4 From @eddyelfenbein : 2% dividend yield + 3% buyback yield = 5% total yield on the market $$ Dec 26, 2013
  • Hunt for Returns Prompts IPO Renaissance as US Leads Way http://t.co/dVURwoYGkn Capital will b deployed unproductively as the rally ends $$ Dec 26, 2013
  • Secret Handshakes Greet Frat Brothers on Wall Street http://t.co/0t2zWLzL1A Part of what led to the crisis- connections&no smarts $$ $MS $GS Dec 23, 2013
  • Junk Loans Top ?08 Record as Safeguards Stripped http://t.co/9uZAwYeEaN Amazing how much biz u can do if u just leave aside risk control $$ Dec 23, 2013
  • The lavish lifestyles of placement agents http://t.co/0NU8cD5yl0 With pension monies, there is almost never a reason to pay commissions $$ Dec 22, 2013

?

Companies & Industries

 

  • Twitter Posts Biggest-Ever Decline After Macquarie Downgrade http://t.co/zopyq0AKeb $TWTR needs 2show real income to validate valuation $$ Dec 28, 2013
  • Twitter?s Ballooning Market Cap http://t.co/vm1xl8MRwb Every sell is a good sell. At worst, wait for relative strength to shift $TWTR $$ Dec 27, 2013
  • GM Robo-Glove to Meat Hook Smooth Human-Machine Teamwork http://t.co/G0dbUgbXIc The future of manufacturing: human-robot teams $$ $SPY $TLT Dec 26, 2013
  • $AMZN Makes Up to Customers After Backup Hits $UPS http://t.co/UUNGKJVJvI It is possible to overload the shipping system; $20 giftcards $$ Dec 26, 2013
  • Panasonic Debt Goes to First From Worst on Revamp http://t.co/MsBhqKmMee Amazing what can happen when a mgmt team rationalizes businesses $$ Dec 26, 2013
  • Bug Bites Cut Florida Orange Crop to Lowest in 2 Decades http://t.co/0muOIlUFmI Fortunately Brazil is having a good crop; citrus greening $$ Dec 26, 2013
  • Reactors on Slow Road to Demolition http://t.co/jd3sbJiMHk Much hangs on creating a long-term site for storing nuclear waste $$ $D $EXC $ETR Dec 26, 2013
  • Twitter?s Ballooning Market Cap http://t.co/mhik2Xp8Nn The price discounts more than the future, it discounts the hereafter $$ $TWTR $SPY Dec 26, 2013
  • If Cadillac Keeps Growing Like This, It’ll Be America’s Bestselling Luxury Car http://t.co/YnijUf5SiC We r talking $GM; they will fail $$ Dec 26, 2013
  • Wind Farms in Maine Stir a Power Struggle http://t.co/lhpmyeD75l I’m sorry, most people know that they don’t own their view, give it up $$ Dec 26, 2013
  • V.F. Corporation Common Stock Stock Chart http://t.co/5zEipUBEWf; Interesting 2c @Bloomberg & @yahoofinance mess up on $VFC ‘s 4 for 1 split $$ Dec 23, 2013

 

Financial Sector

 

  • Banking Needs a New Regulatory Structure http://t.co/tgx7X4lSrq Rather, end interstate branching, & hand bank regulation back2 the states $$ Dec 28, 2013
  • Will the Regulatory Screws Loosen in 2014? http://t.co/vxkuqAUCe9 Both sides r dreaming. Neither the regulators or banks r giving up $$ Dec 28, 2013
  • FDIC Recommendations to Curb Interest Rate Risk http://t.co/uRJw5tTcNS But will they bifurcate repo 2reveal the interest rate risk inside $$ Dec 28, 2013
  • Examiners-in-Residence Should Be Pulled Out of Megabanks http://t.co/UcrvNoAmzu They will resist pressure better if they work together $$ Dec 26, 2013
  • How Thomas Curry Is Trying to Redeem the OCC http://t.co/iIbFR7Lqqv U can get a lot done in DC if u don’t care who gets the credit $$ $TLT Dec 26, 2013
  • Target?s Redcard Proves Less Vulnerable to Data Breach Than Bank Cards http://t.co/GDBN5KHvsK Added security makes the card harder2hack $$ Dec 26, 2013
  • Angry Bart Takes His Parting Shot http://t.co/Wi5YChLExh How Wall St fights regulation: Direct kill; defund; exemptions; litigate $$ $GS $MS Dec 26, 2013
  • Why the US Leaves Its Credit-Card System Vulnerable to Fraud http://t.co/QN4egphZ8c Expensive to add more security & change hardware $$ Dec 23, 2013

 

Politics & Policy

 

  • Deaton on US inequality and the Pareto criterion http://t.co/pdhMXzehju Hard to equalize; rich families have more resources 4 their kids $$ Dec 28, 2013
  • Moguls Rent South Dakota Addresses to Dodge Taxes Forever http://t.co/4IYvqqrr66 Our own tax haven in Black Hills; set up a trust in SD $$ Dec 28, 2013
  • Government Pulls in Reins On Disability Judges http://t.co/psmXNK7fXZ Disability Trust fund goes bust in 2016, judges urged 2b stricter $$ Dec 28, 2013
  • Five Lessons of 2013, Guaranteed to Be Forgotten http://t.co/dCXEniOv8U I like # 3. The law of the land is subject to executive action. $$ Dec 26, 2013

 

Other

  • The marriage gap: Think again, men http://t.co/T45sDRYDFC People who r single rely on government more, v. married who rely on each other $$ Dec 28, 2013
  • Two trends I’m watching next year http://t.co/Cx1gKdLaSR Cultural changes may limit HH formation & much capital formation is intangible $$ Dec 28, 2013
  • Detroit Wins $55M in Concessions From 2 Banks http://t.co/wOEsceACAR Derivatives around munis usually have something crooked w/them $$ $MUB Dec 26, 2013
  • The LEET Pure PC – A PS4 And Xbox One Killer For Your Entertainment Room http://t.co/3mDBrtTHb0 Pretty cool. Powerful, flexible & stylish $$ Dec 26, 2013
  • White Chocolate, a Blank Slate for Flavor, Wins Converts http://t.co/WflwRKYYJg A platform to allow other flavors to show their stuff $$ Dec 26, 2013
  • Colleges Trim Staffing Bloat http://t.co/bRtEMsnfqG Finally the bloat of making college into “country clubs” starts to decline $$ Dec 26, 2013
  • Most Twitter User Have Few Followers – Study http://t.co/ghZfDqVjUJ U have 2get2 over 2000 followers b4u can b certain that any1 listens $$ Dec 26, 2013
  • A Pill to Cure Addiction? http://t.co/ORYsOeoNXN “huge amount of progress understanding what drives alcoholism & makes it difficult2stop” $$ Dec 26, 2013
  • Are Cranberries a Better Way to Long Life? http://t.co/o0YJDa0Uhy The antioxidants in cranberries may prolong your life $$ Dec 26, 2013
  • Fake Knee Surgery as Good as Real Procedure Study Finds http://t.co/Ucvi50nsqW Result Likely2Fuel Debate Over Common Orthopedic Operation $$ Dec 26, 2013
  • Study: Eating Nuts in Pregnancy May Lower Child’s Allergy Risk http://t.co/X2IQwj1QfN Something new 4 children 2 blame their mothers over $$ Dec 24, 2013
  • Almond Spike Hits Germany’s Markets http://t.co/DpEJXxwWir Bad weather in California & Spain & demand in China push prices 2 record highs $$ Dec 23, 2013
  • Unwanted Memories Erased in Electroconvulsive Therapy Experiment http://t.co/nfo3lDmHDH Great. Another way to remove humanity from people $$ Dec 23, 2013

 

Wrong, Etc.

?

  • Wrong: The Air of Unreality in NSA Reform http://t.co/8psN0iSI1r Being a free country means we have 2 allow 4 possibility of bad events $$ Dec 26, 2013
  • Disagree:Snowden Says Surveillance Is Worse Than Orwell Envisioned http://t.co/2AEb3tNk0G It may b more pervasive but it is low intensity $$ Dec 26, 2013
  • Central Error: that inflation & real growth are positively correlated [1970s] http://t.co/yLXk2UnQWu Dec 23, 2013
  • Wrong: GOP lawmaker: NSA spying in US could have prevented 9/11 http://t.co/cHAnKSOsqY At best, fighting the last war; live free or die $$ Dec 23, 2013

?

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Comments, Retweets & Replies

 

  • Commented on The Economist | The 2016 election: Flight of the Huckabees http://t.co/Yh3tym96OO Dec 27, 2013
  • ‘ @SonofGodMovie The 2nd Commandment says it’s wrong to portray God. Your movie makes Jesus a mere man; you can’t portray his divinity $$ Dec 26, 2013
  • @ReformedBroker Nailed it. Dec 25, 2013
  • RT @minefornothing: The economy of Cyprus is now also experiencing a major credit crunch http://t.co/uRMUjaUCyf Dec 24, 2013
  • http://t.co/60MjQwGbNz “It’s the thought that counts, which is worth more than money.” ? David_Merkel http://t.co/Ij9Ttfesye $$ Dec 24, 2013
  • RT @michaelsantoli: Trust me, in Dec ’87 no one said “Only 1/3 done” RT @CiovaccoCapital: Bull Markets can last a long time – see 82-’00 h? Dec 24, 2013

 

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