Public Policy – Page 22 – The Aleph Blog

Sorted Weekly Tweets

Posted on 4 January 2014 by David Merkel

Rest of the World

Aberdeen Buys Thailand?s Stocks Amid Worst First-Day Drop http://t.co/3W6F8v7APS Thailand is worth a look, the Army tends to stabilize $$ Jan 04, 2014
Rousseff Buoyed by Rising Poor as Brazil Rating Drop Looms http://t.co/u28ILaBsSe Y I sold all Brazil investments when Dilma was elected $$ Jan 04, 2014
Who Needs Bitcoin? Venezuela Has Its ‘Sucre’ http://t.co/mO29dvSb5Q Trade Bolivars @ official rate 4 Sucre 2 Dollars 2 black mkt Bolivars $$ Jan 04, 2014
JPMorgan Halts Latvia Dollar Deals After Probes, Group Says http://t.co/hrsCfHXxG1 Latvian banks do $$ laundering w/sloppy investment banks Jan 03, 2014
Cheaper Hanoi Pork Shows Crops Ease World Food Cost http://t.co/Lh7AJ0W4jX Bumper grain harvests in the US & India lower world food costs $$ Jan 02, 2014
Chinese Banks Eye Global Bond Market http://t.co/NWMZPwzggu B leery of Chinese bank subordinated debt convertible into equity in failure $$ Jan 01, 2014
Explaining Hybrid Securities to Chinese Investors http://t.co/PlNYC6iZ55 Think the Chinese will regret this financial innovation in time $$ Jan 01, 2014
Unusual Emerging-Market Bond Bet Pays Off http://t.co/9RDw5iKLnl W/lots of liquidity, this was a year 4 the trash 2 fly: Argentina/Greece $$ Jan 01, 2014
Israel’s Christian Awakening http://t.co/KnXrPhf9lp Arab Christians find common ground w/Israeli State vs Arab Muslims to defend Israel $$ Jan 01, 2014
Bank Borrowing From ECB Jumps http://t.co/LkOcZ9kn4c Every bank likes 2 look liquid at year end 4 the snapshot of its balance sheet $$ Jan 01, 2014
The unintended consequences of Abenomics http://t.co/iZkiKE1vWD @soberlook shows us how the poor & elderly r hurt by Abenomics $$ Jan 01, 2014
Repeated Liquidity Crunches Beg a Question: Where’d the Money Go? http://t.co/el0ITutTxc Provides liquidity 2 WMP Ponzi schemes of banks $$ Jan 01, 2014
The Rise and Fall of a Local Official Obsessed with GDP Growth http://t.co/rDltv3HwiV Statistics stretched2make things look better $$ Jan 01, 2014
Argentina?s socioeconomic statistics: Still lying after all these years http://t.co/UUCPLhqOY2 Official statistics r fudged 2help govt $$ Jan 01, 2014
Miss Japan Ikumi Yoshimatsu joins battle against mafia in the media http://t.co/riMMv8TSMd Can one beauty take on the Yakuza? She can try $$ Jan 01, 2014
It’s Official: Pope Has Not Abolished Sin, Says Vatican http://t.co/WBrqw5HJEn That may be, but he certainly downplays its importance $$ Jan 01, 2014
Turkey first of Fed Taper victims as political crisis scares investors http://t.co/wQssI4hIeO monetary policy tightening reveals weakness $$ Jan 01, 2014

US Politics & Policy

MIT Economist Seeks Facts in Health-Care Policy Debate http://t.co/yY96lxT5dJ Amy Finkelstein worth watching as she measures healthcare $$ Jan 04, 2014
Someone Please Help New York Times With Econ 101 http://t.co/yABRFhpHve I’m sorry @cabaum1 , but there is no hope 4 the NYT, e.g. Krugman $$ Jan 04, 2014
America Burning – The Yarnell Hill Fire Tragedy and the Nation’s Wildfire Crisis http://t.co/lE5bjUwbba Volunteer firefighters risk lives $$ Jan 03, 2014
Bakken Crude More Dangerous to Ship Than Other Oil http://t.co/v7w5NdaTDu Lighter hydrocarbons tend to b more flammable, need 2 test them $$ Jan 02, 2014
If 2013 Was Hard on Obamacare, Just Wait for 2014 http://t.co/VSkDtqznNR An actuarially unsound program will get worse over time $$ #watch Jan 01, 2014
Obamacare Enrollments Hit 1.1M W/December Surge http://t.co/cbZ2tjDZmD B interesting 2c how well the policy is liked as taxes/prems go up $$ Jan 01, 2014
Americans on Wrong Side of Pay Gap Run Out of Means to Cope http://t.co/ymB8hshL8L Labor is not scarce & QE inflates necessities & stocks $$ Jan 01, 2014
TRICKY DICK: Only Nixon less popular than President Obama in Year 5 http://t.co/ingFHQhzjt B interesting 2c if it affects 2014 elections $$ Jan 01, 2014
Portfolio Hedging Is Alive and Well Under Volcker http://t.co/72w48Apm4A The “London Whale trade” & things like it r legal w/Volcker Rule $$ Jan 01, 2014
Buffett’s year-end bet: Pipelines http://t.co/B4bjfvCNjN Fits in nicely w/Lubrizol & $BRK-B other chemical assets | FD: + $BRK-B & $PSX $$ Dec 31, 2013
Icahn to FT: Why Shouldn?t My Board Picks Share in Profits? http://t.co/exjNK6Mbk3 Company Sale not always S/H best interests in long run $$ Dec 31, 2013
North Dakota Train Fire Adds Fuel to Keystone XL Debate http://t.co/H60WTHlrB8 Pipelines r more reliable than trains on average $$ $SPY $TLT Dec 31, 2013
SEC pushes US insurers for details on ‘captives’ http://t.co/Q0Wiw3otmK Isn’t primarily a GAAP issue, so the SEC is on the wrong track $$ Dec 31, 2013
Acquisitions Continue to Support AJG http://t.co/Pb6iGPuMkb Zacks goofs again. Validus $VR isn’t an insurance broker, but a P&C reinsurer $$ Dec 31, 2013

Companies & Industries

Can’t Get Tenure? Then Get a Real Job by @asymmetricinfo http://t.co/E5mZEqxexH Professors are in ovversupply, look outside of academia $$ Jan 04, 2014
Yet Another Housing Cover Story From Barron’s http://t.co/2hv4FhM5Ft @ritholtz takes under on 5% growth in housing prices 4 next 3 yrs $$ +1 Jan 04, 2014
How Wall Street got snowed on weather derivatives http://t.co/3jDAqJ7dCi Weather is different everywhere; bespoke market can’t get volume $$ Jan 04, 2014
Cox to Buy Back Stake in AutoTrader http://t.co/R7EAcHANiM Who knew that AutoTrader was worth ~$7B; web middlemen can b worth a lot $$ $PCLN Jan 04, 2014
Berkshire Seen Failing Buffett 5-Year Test for First Time http://t.co/HUNer4hK0Y Had 2 happen sometime, amazing it went on4so long $$ $BRK-B Jan 02, 2014
Buffett?s Media General Deal Makes a Lot More Financial Sense Now http://t.co/YhI7BhxeFl Buffett has aready made what he put in in equity $$ Jan 02, 2014
The first 3D printed organ — a liver — is expected in 2014 http://t.co/jdOdK4MMwH If we can create native organs, impact will be huge $$ Jan 02, 2014
Stop Pouting About Tech’s Next Big Thing, It’s Here http://t.co/muEZd8l0lB We still haven’t maxed out utility of smartphones & tablets $$ Jan 02, 2014
Hertz Runs Over Activist Shareholders http://t.co/pTPzixT7Lc A strong poison pill; I’m surprised the price of Hertz went up on the news $$ Jan 02, 2014
Health: Scientists Look to Improve Cost and Time of Drug Trials http://t.co/xI21QAj5Ln Sounds promising, but will lose double blind rigor $$ Jan 01, 2014
Bitcoin Is a High-Tech Dinosaur Soon to Be Extinct http://t.co/OgVFDpcxmZ Bitcoin will die, but it is not right 4 governments 2monopolize $$ Jan 01, 2014
Home Prices Back at Peaks in Some Areas http://t.co/Z8WVCyff5i Most of it depends on how well the underlying local economies r doing $$ Jan 01, 2014

Market Impact

Why ‘Wildly Overvalued’ Stocks May Keep Rising http://t.co/wT6vprAEAl @ritholtz Low short rates, steep yield curve good 4 PE multiples $$ Jan 02, 2014
Pension Funding Levels Surged in 2013 http://t.co/zOSFbl18vY If a Defined Benefit plan is not fully funded now, likely it never will be $$ Jan 02, 2014
Finra to Crack Down on Brokers With High Number of Complaints http://t.co/mCzrlW71Jv If FINRA is prioritizing now, y didn’t they do it b4 $$ Jan 02, 2014
Amid Record Rally, Stock Picker Keeps Focus on the Basics http://t.co/pIO25JTQOa Sam Eisenstadt, a Pioneer at Value Line, Remains Bullish $$ Jan 01, 2014
Private Equity Enjoys a Record Year http://t.co/eRdqannfjW Firms That Buy & Sell Companies Are Set to Return >$120B to Investors for 2013 $$ Jan 01, 2014
Paulson Gets $490 Million as ?Mooch? Rotates to Equities http://t.co/btjTtZ0gIR Not sure y an action of Scarmucci’s firm gets such play $$ Jan 01, 2014
Persistence is a Killer http://t.co/U8HtQzBBje @reformedbroker points out how hard it is 2 keep outperforming; as AUM rises harder still $$ Jan 01, 2014
Stocks $3.7T Year Beats Bonds Most Ever on Funds http://t.co/2DHvPluCO8 What a year; I’m glad I limit my ability2b bearish w/my portfolio $$ Jan 01, 2014
S&P 500 Price to Book Value http://t.co/YGJJ7aDpjz Worth a look- P/B is around 2.7 at present up from 1.8 at the beginning of 2009 $$ $SPY Jan 01, 2014
Guess which hedge funds beat the roaring S&P 500? http://t.co/9286hLNy40 Robbins, Paulson, Loeb, Peltz, Tepper, Pucillo $$ $SPY Dec 31, 2013

Other

Green Bay Cold Threatens to Outfreeze NFL Ice Bowl Record http://t.co/aEZ7QK3JEA Cheeseheads will watch&freeze as 49ers go to their knees $$ Jan 04, 2014
Plosser: May Need to Employ Aggressive Tightening Campaign http://t.co/hIdwcS1ijH Fed doesn’t know what will happen & can’t control it $$ Jan 04, 2014
Auburn-Alabama: Inside the Greatest Play of All http://t.co/NK5tiEQTV4 Interesting details on the strategies employed by the two coaches $$ Jan 04, 2014
Business Buzzwords Generator http://t.co/e8E1MBN1ph Generate random buzzword phrases for cheap fun $$ Jan 02, 2014
Which Buzzwords Would U Ban? http://t.co/TswImvO8mc Going Forward, Low-Hanging Fruit, Disrupt, Epic, Incentivize, Game Change, Reach Out $$ Jan 02, 2014
Apple, Jacob Appelbaum and the National Security Agency http://t.co/vJrTmaKlHm Scary article & video of NSA projects by a security expert $$ Jan 02, 2014
Scott Yancey – FREE Live Real Estate Income Event http://t.co/85hnNPy2PP For losers only; learn how to attempt flipping property & lose $$ Jan 01, 2014
The Ride-Sharing, Handbag-Borrowing Productivity Revival http://t.co/E7orfPRiAW The internet allows people 2 share capital goods easily $$ Jan 01, 2014
Say Goodbye to the Same Old Steakhouse http://t.co/5A6cjn4E4L That most hidebound of dining institutions is long overdue for an update $$ Jan 01, 2014
2014 Resolution: This Year, I Will Blog http://t.co/UuaIej3QIw Easy 2 say, hard 2do. Tonight, Aleph Blog will give pointers on how 2do it $$ Jan 01, 2014
2013 Year in Review by David Collum http://t.co/PF4HnO2aWA “Austerity is not a policy; it is a consequence of bad policy” Bad year 4 him $$ Dec 31, 2013

Wolf of Wall Street

How the “Wolf of Wall Street” Is Still Screwing His Real-Life Victims http://t.co/ziYCK3MAoY 20% restitution made to victims. Not enough $$ Jan 01, 2014
An Open Letter to the Makers of The Wolf of Wall Street, and the Wolf Himself http://t.co/8PnIZp2Azy Daughter of a scammer critcizes film $$ Jan 01, 2014
Daughter of the Boiler Room http://t.co/7ajMRjN2mv What would it b like2b daughter of Jordan Belfort’s associate? Lots of $$ -> lots of debt Jan 01, 2014
My ?Wolf of Wall Street? Review http://t.co/sFFcCqeGte @reformedbroker validates much of the tale from his own early experiences $$ Jan 01, 2014

Wrong

Wrong: The Pope Is Right: Inequality Is Unjust http://t.co/0ZelLyi3V6 God is Sovereign & gives different people differing abilities $$ Jan 04, 2014
Wrong: Homebuyers Missing Housing Rebound Depend on Yellen http://t.co/uNmbAFB3S5 Too optimistic; Fed no longer controls long rates $$ $TLT Jan 03, 2014
Wrong: In Search of the Perfect Portfolio http://t.co/dOil5koE8p A fool’s errand. Environments change & no simple universal method $$ Jan 01, 2014

Comments, Replies & Retweets

@groditi For you, I think it would be worth $50+ to review what someone who used 2do it at Credit Suisse thinks. Get the company to pay $$ Jan 03, 2014
Commented on StockTwits: First time I have heard of Perceptron, thanks for introducing me to it. No, I don’t know… http://t.co/d2EtHTLFFi Jan 03, 2014
Commented on StockTwits: Also be aware that distributions from $AMLP have been somewhat irregular in the past:… http://t.co/Utul6cspT6 Jan 01, 2014
Commented on StockTwits: Just be aware that you have a concentrated position in an income vehicle. If interest ra… http://t.co/RDgBeiecyq Jan 01, 2014
Commented on StockTwits: What proportion of your investable assets is held in it? http://t.co/x6MUov551z Jan 01, 2014
@maoxian @randomroger But I’m glad you like it. I got the idea from @historysquared but realized it could be better 4 readers if I sorted Dec 31, 2013
@maoxian @randomroger I use “Allmytweets” http://t.co/xiSnKRldBe & since I do it weekly, search the word “sorted” to find where I left off Dec 31, 2013
@dpinsen @PortfolioArmor Go for it! Dec 28, 2013

There’s No Tiger in the Tank

Posted on 31 December 2013 by David Merkel

Okay, time to roll the promoted stocks scoreboard:

Ticker	Date of Article	Price @ Article	Price @ 12/30/13	Decline	Annualized	Splits
GTXO	5/27/2008	2.45	0.009	-99.6%	-63.2%
BONZ	10/22/2009	0.35	0.001	-99.7%	-74.2%
BONU	10/22/2009	0.89	0.001	-99.8%	-78.6%
UTOG	3/30/2011	1.55	0.002	-99.9%	-91.1%
OBJE	4/29/2011	116.00	0.230	-99.8%	-90.3%	1:40
LSTG	10/5/2011	1.12	0.012	-98.9%	-86.9%
AERN	10/5/2011	0.0770	0.0001	-99.9%	-94.9%
IRYS	3/15/2012	0.261	0.000	-100.0%	-100.0%	Dead
RCGP	3/22/2012	1.47	0.140	-90.5%	-73.4%
STVF	3/28/2012	3.24	0.430	-86.7%	-68.3%
CRCL	5/1/2012	2.22	0.024	-98.9%	-93.5%
ORYN	5/30/2012	0.93	0.030	-96.8%	-88.5%
BRFH	5/30/2012	1.16	0.610	-47.4%	-33.3%
LUXR	6/12/2012	1.59	0.012	-99.2%	-95.7%
IMSC	7/9/2012	1.5	0.850	-43.3%	-31.9%
DIDG	7/18/2012	0.65	0.053	-91.8%	-82.2%
GRPH	11/30/2012	0.8715	0.024	-97.3%	-96.4%
IMNG	12/4/2012	0.76	0.050	-93.4%	-92.1%
ECAU	1/24/2013	1.42	0.248	-82.5%	-84.7%
DPHS	6/3/2013	0.59	0.006	-99.0%	-100.0%
POLR	6/10/2013	5.75	0.050	-99.1%	-100.0%
NORX	6/11/2013	0.91	0.096	-89.5%	-98.3%
ARTH	7/11/2013	1.24	0.290	-76.6%	-95.4%
NAMG	7/25/2013	0.85	0.290	-65.9%	-91.7%
MDDD	12/9/2013	0.79	0.480	-39.2%	-100.0%

	12/30/2013		Median	-97.3%	-91.1%

Before I talk about tonight’s loser-in-waiting, let me tell you what happened to Makism3D, the last company I reviewed.? Four days after I reviewed it, the SEC suspended trading, and it reopened on 12/30, falling 49% on the day.? Dig the price graph:

The SEC is getting more aggressive about suspending trading in companies that are being promoted.? Some suggest that publishing pieces like this, or others at Seeking Alpha, is encouraging the SEC to be more bold.? If true, that is good.

Now for our loser-in-waiting — Tiger Oil & Gas [TGRO].? I ran into TGRO via an ad on Bloomberg.com.? It led me to this spammy article, which led me to this even more spammy article.? If I were invests.com, I would be more protective of my reputation.? I get all sorts of requests to publish low quality articles at Aleph Blog, maybe 50 per month.? You can make money doing that in the short run, but I never want to treat my readers in such a bad way.

And if I were Bloomberg.com, I would not let them advertise.? Because I write these articles, sadly, I get ads for them, but if I see those ads, I tell my ad network to stop running them.

TGRO is another company that has no revenues, negative income, and negative net worth.? Sound familiar?? Maybe Congress should ban “development stage companies.”? I’ve never seen one that was worth anything.

Here is the beginning of the disclaimer:

This report is for informational purposes only, and does not represent a solicitation to buy or sell the profiled company?s securities, which trade under the symbol TGRO, nor any other securities. StockTips.com is operated by Amerada Corp. (AC). Neither AC nor its employees are certified financial analysts or licensed in the securities industry in any manner. The information in this marketing piece and any accompanying information is subjective opinion and may not be complete, accurate or current and was paid for directly or indirectly by shareholders of the profiled company who may or will profit as a result of the preparation, publication and distribution of this marketing piece and accompanying information. AC expects to receive $2,500,000.00 (TWO MILLION FIVE HUNDRED THOUSAND DOLLARS) as a marketing budget for production and distribution of TGRO marketing material from an unaffiliated 3rd party, Laluna Services, Inc.

And that is what paid Bloomberg.com to give them the top link on a box to the side.? The amount paid is 5% of the present market cap, but 30% of the market cap prior to the promotion.? Look at the price graph:

I should add that this was a operating chemicals company 2007-2010, and another development stage company prior to that.? Such behavior where a company is in the development stage indicates that there is little if any underlying business, and that it is merely a machine to suck money out of the pockets of naive investors, and into the pockets of promoters and insiders.

As I often say, “Don’t buy what someone wants to sell you.? Buy what you have researched and think is valuable.”? Particularly with intangible items like stocks, those who are directly paid to promote stocks are almost always scammers.

Avoid promoted stocks.

Sorted Weekly Tweets

Posted on 28 December 2013 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

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

Sorted Weekly Tweets

Posted on 21 December 201322 December 2013 by David Merkel

Monetary Policy

The theory of money entanglement (Part 1) http://t.co/zfCM2rPxBx The effects of monetary policy vary w/finl institutions need for credit $$ Dec 20, 2013
Repo market as a form of free banking http://t.co/4m3PSuFViG? @isakaminska describes a hybrid credit system where central banks r weak $$ Dec 20, 2013
Why Do So Many People Hate QE? http://t.co/ZpcQhSrSpH Basic reason is fairness. Y can the Fed create credit out of thin air, & we can’t? $$ Dec 19, 2013
Visualizing the Fed | The Big Picture http://t.co/J7K15MIDdZ @ritholtz shares a cool interactive graphic on the Fed’s Balance Sheet $$ $TLT Dec 19, 2013
‘Was The Fed A Good Idea?’ How Cato Cleans Keynesian Clock http://t.co/qaalFGBvML Economies grow faster when currency stores real value $$ Dec 17, 2013

?? TIPS Wipeout Signals Fed Losing Fight Against Disinflation http://t.co/3GeeSDpZAv Implied inflation rising across TIPS curve $$ $TIP $TLT Dec 17, 2013

FOMC & Data

Fed Seen Tapering QE in $10B Steps in Next Seven Meetings http://t.co/gvmopTBufm Y do economists assume that things follow a simple path? $$ Dec 20, 2013
Fascinating Bernanke can call Fiscal policy restrictive when deficit huge & shrinking a little, doesn’t apply same logic 2 LSAP shrinking $$ Dec 18, 2013
FOMC Central Tendency for Fed funds rate 2013-6 &long-run 0.25%, 0.34%, 1.06%, 2.18%, 3.88% Change 0.00%, -0.06%, -0.19%, -0.09%, -0.04% $$ Dec 18, 2013
FOMC Central Tendency for Fed Tightening — January 2016, 25 months away vs 27 last September, one month further out $$ Dec 18, 2013
FOMC Central Tendency for PCE Inflation 2013-6 & long-run 0.99%,1.52%, 1.79%, 1.87%, 2.00% Change -0.21%, -0.01%, -0.10%, 0.00%, 0.00% $$ Dec 18, 2013
FOMC Central Tendency for Unemployment 2013-6 & long-run 7.05%, 6.45%, 5.91%, 5.53%, 5.54% Change -0.11%, -0.13%, -0.12%, -0.10%, 0.04% $$ Dec 18, 2013
FOMC Central Tendency for real GDP 2013-6 & long-run 2.27%, 2.91%, 3.09%, 2.83%, 2.25% Change 0.14%, 0.00%, -0.07%, -0.05%, -0.09% $$ Dec 18, 2013
Someone ask Ben Bernanke if they would issue fed funds at longer terms/tenors Dec 18, 2013
@AlephBlog wrong again, David — decrease of $10B, $5B each of Treasuries and MBS Dec 18, 2013
@AlephBlog sorry — $5b/month change Dec 18, 2013
RT @NickTimiraos: MBS issuance has plunged since Sept, so a $5 billion taper of MBS doesn’t mean the Fed will decrease its *share* of MBS p? Dec 18, 2013
Statement Regarding Purchases of Treasury Securities &Agency Mortgage-Backed Securities http://t.co/97DNRGXJFQ Pares MBS buys by $10B/mo $$ Dec 18, 2013
An Opiate for Underachievement: Bernanke Says Fed in ?Finest Hours? Stood Up to Pressure http://t.co/soQDjBHZea Rather, they caved & hid $$ Dec 17, 2013
The One Thing Bernanke Must Not Do Tomorrow http://t.co/AvDcElOHTY Saying & not doing loses credibility 4the Fed. Don’t say wut u wont do $$ Dec 17, 2013

Companies & Industries

The Buffett difference, derivatives edition http://t.co/5VUI7WxOUB Soft collateral reqs, tolerated earnings vol, bot in size w/variety $$ Dec 20, 2013
Target Data Breach Has Become a Card Data Fire Sale http://t.co/jUxgOpv7SP B especially wary here because it can b used as a debit card $$ Dec 20, 2013
Buffett’s massive wind-power order shows wind energy becoming cheaper http://t.co/0lOSGp3NQi Wind power becomes economical, end subsidies $$ Dec 20, 2013
Facebook Is Selling Stock For Some Reason http://t.co/x9LsnLUMNb $FB makes it easier 4 index buyers to get shares as it enters the S&P500 $$ Dec 19, 2013
Facebook, Zuckerberg to Sell Stock Worth Nearly $4 Billion http://t.co/B4joZJZYR9 Note $FB compny selling shares; not usually a good sign $$ Dec 19, 2013
Regional Shippers Pose New Threat to UPS, FedEx http://t.co/RNUpcBrL3Y And USPS too. Regionals can get it there the next day $$ $FDX $UPS Dec 19, 2013
AT&T Sells Wireline Assets To Frontier Communications http://t.co/or1n1lWqbD Interesting 2c $T sell off rural wireline customers 2 $FTR $$ Dec 18, 2013
Gold Town Turns to Dust as Metal Decline Shutters Mines http://t.co/unN2Mi97A3 Life at high-cost mines is very cyclical. Boom-bust $$ $GLD Dec 18, 2013
Dodge CVT Animation http://t.co/cfEWG0Y9jQ Cool 82-second video of how a continuously variable transmission works $$ $GM $F $TM $HMC Dec 18, 2013
How Good Old Car Engines Got So Efficient http://t.co/hM5ZmjdXpK Most progress w/energy has come by using hydrocarbons more efficiently $$ Dec 18, 2013
Delta Battles Tiny Upstart Airport http://t.co/HbalfXKYc3 B careful of small airports near big cities, u don’t want 2create the next $LUV $$ Dec 18, 2013
Poor Americans Lead Movement to Abandon Landlines http://t.co/MmUfqiljPa Landlines r dying; I’m thinking of getting rid of mine $$ $SPY $VZ Dec 18, 2013
Pizzerias Try to Apply Chipotle Formula http://t.co/afyCN5xi2u Creating Fast, Custom & Inexpensive 4 pizza; many r trying, who will win? $$ Dec 18, 2013
Campbell Seen as Next Buffett Target Post-Heinz http://t.co/zryODDWpRs Likely wishful thinking; soup shrinking; PE high, no growth $$ $CPB Dec 17, 2013
Wind Power Rivals Coal With $1B Order From Buffett http://t.co/WXJfEAHmrn Wind power gets competitive on price; can we end the subsidies? $$ Dec 17, 2013
Google Just Bought a Mechinized Cheetah and Other Military Robots http://t.co/5ZO3XXzcNF 1st internet search now robotic world domination $$ Dec 17, 2013
Google, Facebook Push to Control Web’s Pipes http://t.co/nmDzeospON Content companies want more control over their delivery over the web $$ Dec 17, 2013

Market Impact

Three things long/short hedge funds cannot do (well) http://t.co/zyiE65FcAZ Manage risk, Short stocks on a systematic basis &stop trading $$ Dec 20, 2013
Investors should abandon long-term commodity bets http://t.co/5rGgYXj5fy End of supercycle, no income, correlated w/equity returns $$ $GLD Dec 20, 2013
DJIA Rises to Inflation-Adjusted Record High http://t.co/nseI2H9eF4 Closes at 16,221. Guess I have 2 eat my words: http://t.co/A6kJoniqG5 $$ Dec 20, 2013
The FOMC- SCR Factors- Bullish SP500? http://t.co/pI3A04XM71 The TINA effect: TINA stands 4 There Is No Alternative.(to Stock investing) $$ Dec 19, 2013
Investor Hunger 4US Corporate Bonds Signals Confidence http://t.co/PsCIMa25A9 Retweet after me:Credit spreads r free $$, credit spreads r… Dec 17, 2013
Want to invest like Buffett? Here?s how http://t.co/3CIqNByFVU Focus on cheap, high-quality stocks w/moats, lever using ins float $$ $BRK-B Dec 17, 2013
Corn Plummeting Spurs Talk of ?80s US Farmland Bust http://t.co/QoO5lVTXSx Will b interesting 2c how many recent buyers get inverted $$ $SPY Dec 17, 2013

Financial Sector

US Credit Markets: US Lite Covenant: Freshness without Protection ? http://t.co/F2HguklHFM Credit protections getting worse 4 bank debt $$ Dec 20, 2013
OCC believes banks might be gambling again http://t.co/lMG9YG24dj The OCC is seeing looser underwriting, reminds them of 2007 $$ #toosevere Dec 20, 2013
Man Who Said No to Soros Builds BlueCrest Into Empire http://t.co/UNksM1mSvl Borrowed $750M to hire 25 equity mgrs 4 his hedge funds $$ $SPY Dec 20, 2013
Secret Currency Traders? Club Devised Biggest Market?s Rates http://t.co/dtBfuqR48w There is no human system that cannot b gamed $$ $SPY Dec 19, 2013
New Mortgages to Get Pricier Next Year http://t.co/oNfGLJeZCC About time F&F raised fees; dodgy mtges have much higher loss rates $$ $FNMA Dec 18, 2013
Volcker Rule Shows Its Wide Reach http://t.co/MOZMjUFoj8 Securitized assets, when they default, most frequently default w/zero recovery $$ Dec 17, 2013
First Volcker Victim? Zions Dumping Its Hedge Funds http://t.co/Kj8uYfltTn $ZION cleans up the trash w/now-sufficient capital $$ Dec 17, 2013

PPACA / Obamacare

Obamacare Initiates Self-Destruction Sequence http://t.co/VkbqqPzMYb @asymmeticinfo asks what will Obama do next year on indiv mandate? $$ Dec 20, 2013
Obama Lifts Health Mandate for Those With Canceled Plans http://t.co/aCYJLzaOZz Must b nice 2b able 2alter laws by presidential fiat $$ Dec 20, 2013
More Obamacare Delays. Surprised? http://t.co/keWUsmLvay @asymmetricinfo thinks the law will survive b/c insurers benefit in long-run $$ Dec 19, 2013
A Medicaid Bet in Wisconsin http://t.co/Ejgbmbd61B Scott Walker Says He Wants to Protect the Poorest; Critics Assail 4Not Taking US Funds $$ Dec 19, 2013
National Lampoon’s ObamaCare Vacation http://t.co/Vzp636uMCW Interesting to hear how poorly Maryland is doing w/its healthcare website $$ Dec 19, 2013
Half of Uninsured Say Health Law Is Bad Idea http://t.co/BEWOeZg1gK When those that u r trying 2 benefit don’t like it, u know it is bad $$ Dec 18, 2013
Is Obamacare Really an Improvement on the Status Quo? http://t.co/Zc1umGhp1l More people lose insurance than gain it; status quo better $$ Dec 18, 2013
Insurers Fight Hospitals’ Paying Premiums for Poor http://t.co/WnuoAo481T Hospitals pay to get sick people insured, so they can make $$ $SPY Dec 17, 2013
Errors Continue 2Plague Government Health Site http://t.co/5j6OZRqkqZ Flaws Include Missing Customers & Erring Eligibility Determinations $$ Dec 14, 2013

Rest of the World

Putin Bets $15B to Capture Junk-Rated Ukraine Vassal http://t.co/vjxhVcT8gv Rebuilding the USSR is tough work for a tough man to do $$ Dec 19, 2013
South Sudan Rebels Take Key Town of Bor http://t.co/MMQumSSIHZ It’s in the center of the country, kind of a crossroads 4 commerce/travel $$ Dec 19, 2013
Vatican Hires Global Firms to Modernize Communications, Accounting http://t.co/1CRwzMDbs8 Humility arrives at the Vatican, expertise 2 $$ Dec 19, 2013
Russian Amnesty Includes Greenpeace as Well as Pussy Riot http://t.co/b8FNVgaQx6 Is Russia getting soft? 😉 Courting international favor $$ Dec 18, 2013
Mom Can?t Visit Daughter as Airlines Shun Venezuela Cash http://t.co/1uds13LW3t Such is life 4those under currency controls; freedom goes $$ Dec 18, 2013
North America to Drown in Oil as Mexico Ends Monopoly http://t.co/5bV35xIc7o Oil is no good to Mexico if can’t get it out of ground $$ #tech Dec 18, 2013
South Sudan Puts Down ‘Attempted Coup’ http://t.co/19KfhoRdVJ A young nation, very experienced in corruption; attempted coup unsurprising $$ Dec 17, 2013

China

China s Stealth Tightening? http://t.co/tuW7JvVhFI A new squeeze hits the China Interbank market & the authorities aren’t doing much $$ $FXI Dec 20, 2013
Why Are the Chinese Scared of American Corn?? http://t.co/lEGbWgh2r4 Probably some Party bigwig who sells domestic corn complaining $$ Dec 19, 2013
Can China Teach North Korea to Grow Up? http://t.co/J6Ba2jpzVz If N Koreans had as much freedom as the Chinese do, Kim would b overthrown $$ Dec 17, 2013
China’s Cities Chop Down Hills for Industrial Land http://t.co/KTpYOwgXNK Wonder what the secondary effect will b from this terraforming? $$ Dec 17, 2013

US Politics & Policy

The Trouble With Populism? It Isn?t That Popular http://t.co/RXSmHLDWTu All sorts of extreme positions, mine included, r never popular $$ Dec 19, 2013
Republicans Block Symbolic Step to Extend Tax Breaks http://t.co/mxUZ31R7GZ Rationality. Maybe temporary tax breaks will b temporary? $$ Dec 19, 2013
Obama?s own panel rips NSA spying on phone calls of Americans http://t.co/QYx1lJXLfc The consensus is that the NSA has gone too far $$ Dec 19, 2013
John Podesta eats crow: ?I apologize to Speaker Boehner? http://t.co/XyCLBNrjWs Don’t blame Podesta, he just drank his own Kool-aid $$ 😉 Dec 19, 2013
At 61 She Lives in Basement While 87-Year-Old Dad Travels http://t.co/KTF0YCOpWx Each generation does successively less well on average $$ Dec 18, 2013
That’s the nature of all of the fixed payment plans devised by the “Greatest Generation.” They borrowed from children & grandchildren $$ Dec 18, 2013
Top Democrats reject court ruling over NSA spying on Americans http://t.co/wnNGQmJwys Interesting 2c varying opinions in both parties $$ Dec 18, 2013
Unmasking the Mortgage Interest Deduction: Who Benefits and by How Much? http://t.co/4PzAbpa7rs Benefits the well-off; end & balance bdgt $$ Dec 18, 2013
Hidden Danger in Public Pension Funds http://t.co/lBgACsI12P Low Funded status, high amounts in risky assets, bonds offer little yield $$ Dec 18, 2013
Disarming Surveillance http://t.co/70nAEtNTJA The opposite danger is that by snooping on others intensively they grow to resent the US $$ Dec 17, 2013
NSA Phone Spying ‘Almost Certainly’ Unconstitutional, Judge Says http://t.co/cnqxDbGXrW Probably won’t b upheld, good 2try overturning $$ Dec 17, 2013
The truth about the NSA’s bogus malware apocalypse http://t.co/nJ3hMCrcwq Most mass attacks r hard 2pull off w/any significant force $$ $TLT Dec 17, 2013
In Bankrupt Detroit, the Bills Are Piling Up http://t.co/eJrX6tgIgO One tough part of a muni b/k – who gets paid & what r reasonable fees $$ Dec 17, 2013
Accidental Tax Break Saves Wealthiest Americans $100B http://t.co/RU6y8vCNZc ?I?ve done a lot4 Democratic contributors,? he sez w/a smile $$ Dec 17, 2013
Look How Easy It Is 2 Game Estate Taxes http://t.co/u3YGvZ491l Y the estate tax needs 2b replaced & income taxes disallow income deferral $$ Dec 17, 2013

US Economics

GDP Grows 4.1% in Third Quarter, Biggest Gain Since 2011 http://t.co/tUCz0bQViw Guess I have to eat more of my words, US looks good 4 now $$ Dec 20, 2013
Boomers as Retail Clerks Shows Y Greenspan Saw Low Growth Era http://t.co/phoiELeks2 Long good article how aging populace changes economy $$ Dec 19, 2013

Other

Finished the #GoogleCrossword http://t.co/VtaoYkaQdt Haven’t done a crossword in years $GOOG #fun Dec 21, 2013
Why Successful CEOs Get Fired http://t.co/KehYfcljKv Founding CEOs get fired when tasks get larger than them, &the board loses confidence $$ Dec 19, 2013
Doctors Eye Cancer Risk in Uterine Procedure http://t.co/CD5OKwWs2I Grinding up fibroid in the uterus may increase the risk of cancer $$ Dec 18, 2013
Top Products in Two Decades of Tech Reviews http://t.co/GQjGsMR1Xz Walter Mossberg’s last column @ WSJ; a joy 2 read, will still b on web $$ Dec 18, 2013
Youthful Migrants Lured by Perks to Shrinking US Areas http://t.co/jxFNa41ftZ Promising idea to create urban jobs in rural areas $$ #winwin Dec 18, 2013
How Dogs Might Protect Kids Against Asthma: Gut Bacteria http://t.co/HaWa0goqdn Fascinating that dogs may aid kids w/immunity to asthma $$ Dec 17, 2013
Multivitamins Found to Have Little Benefit http://t.co/5o8jUZGkYc The controversy will continue; nothing this profitable ever dies $$ $SPY Dec 17, 2013
Vonn Rivals Schuss From Slope to Boardroom for Funding http://t.co/GaJHLVAyob Olympians r little corporations seeking sponsors, donations $$ Dec 17, 2013
Stocks That Still Have Perks http://t.co/k93IaeQlgl From discounts on cars&computers 2cruise bounty, here’s where 2find shareholder perks $$ Dec 14, 2013
The Tsarnaevs and the Boston Bombing http://t.co/Pz8MxYQXEf A decade ago, WSJ reporter happened to befriend the Tsarnaevs- an inside view $$ Dec 14, 2013
Mike Tyson Explores Kierkegaard http://t.co/n2mrAx1KuW Philosophy is a dead end; no truth to their views of existence, knowledge &ethics $$ Dec 14, 2013

Wrong

Wrong: Bernanke: More Financial Reform May Be Needed http://t.co/gxitPtPQxb Dumb

comment from a guy who doesn’t understand how banks work $$ Dec 19, 2013

What Bible is Pope Francis reading? http://t.co/EvnvIDNZlo Jesus never questioned property rights in his teaching, w/charity voluntary $$ Dec 19, 2013
How Pope Francis Misunderstands the Free Market http://t.co/Ksmn5DzS0O Simpler than that; he is unstudied, engages in wishful thinking $$ Dec 18, 2013
Wrong: Technology Adoption Discrepancy Btw Individuals & Institutions http://t.co/YkLJscgP7S Tries 2 connect falling ROA & Social Media $$ Dec 14, 2013

Comments

“Artificially forcing down Treasury yields via QE has 4 major bad effects?” ? David_Merkel http://t.co/z9nLhQSknr $$ $TLT $IEF $SHY Dec 19, 2013
Commented on StockTwits: but the company is selling; it needs cash more than shares — good companies typically s… http://t.co/AkpvtYiijw Dec 19, 2013
Commented on The Economist | Daily chart: Doomsdays http://t.co/21NoGGuzuD Dec 18, 2013
“I analyzed TRUP CDOs 4a bank in 2008 and 2009 — built a special model that could dig into the?” ? David_Merkel http://t.co/tRm5NtJ0mk $$ Dec 17, 2013
Commented on StockTwits: ‘ @MMula534 A lot. Most of the best investors r lifelong learners, & they c patterns whe… http://t.co/5pQzWca6Nm Dec 17, 2013

Give Them a Small Bank

Posted on 20 December 2013 by David Merkel

It takes a thief to catch a thief. ?Thus I have a modest proposal for bank regulation. ?This could be applied more broadly to other forms of financial regulation also.

Why not require that all regulators spend time managing banks before they are appointed to be regulators? ?I think this would be very instructive to those who would become regulators, because they would see how issues at banks appear from the other side.

I am not suggesting that potential regulators “go native” and become sympathetic to banks. ?Working inside a financial institution can do the very opposite, and inform a regulator on what to be careful about. ?I want regulators to have the smarts that an insider perspective gives.

Think of me for a moment. ?I am not a fan of the insurance industry; I also don’t hate it, but I know it well. ?I know where the warts are. ?If I were a regulator, I would be feared by the industry, because there is almost nothing that I don’t know about insurance in broad. ?(I.e., I am not trying to brag, but I think that I am competent in analyzing insurers.)

My point is that we want intelligent regulators that cannot be bamboozled. ?That only comes with significant industry experience.

But industry experience isn’t enough. ?You want people who are intelligent critics, who can look at the industry and say that certain practices are wrong from a solvency or market conduct standpoint.

And thus I say, “Give them a small bank.” ?Let the Federal Government set up a bunch of small banks for prospective regulators to help manage for a few years. ?Being part of a senior management team would cue them into a wide number of problems as they try to make money in a competitive market. ?Let them interact with their regulators as well.

I write this because when I read what most broad bank regulators at the highest levels say, I think, “All you can do is suggest things should be tighter, but you have no good reasoning for what or why. ?Would that you understood the industry you are regulating.”

In general, it is a bad idea to have academic economists in regulatory positions, because they do not understand what they are doing, but merely follow their ideology. ?Far better to have practitioners that are skeptics be regulators, because they really know what is going on, and will not spare the industry over abuses.

As a dear friend of mine once said, “To truly loathe the public schools, you have to be one of the teachers.” ?In the same way, I say make the regulators work for the banks before they regulate them, so that they can properly loathe them.

Movie Review: Money for Nothing

Posted on 19 December 2013 by David Merkel

Movie Review: Money for Nothing

Why will you like this film?

You get to meet clever traders, investors, and business thinkers, policymakers, historians, and Fed Governors ? some who have doubts, and many that are still true believers.? The contrasts are considerable.

Here is the cast list, shamelessly copied from Wikipedia:

Federal Reserve Officials

Paul Volcker – Chairman of the Federal Reserve (1979?1987)
Janet Yellen – Vice Chair of the Federal Reserve (2010?Present), President, Federal Reserve Bank of San Francisco (2004?2010)
Alice Rivlin – Vice Chair of the Federal Reserve (1996?1999)
Alan Blinder – Vice Chairman of the Federal Reserve (1994?1996)
Peter Fisher – Undersecretary of the Treasury (2001?2003), Executive V.P. of the New York Fed (1994?2001)
Richard Fisher – President, Federal Reserve Bank of Dallas (2005?Present)
Thomas Hoenig – President, Federal Reserve Bank of Kansas City (1991?2011)
Jeffrey Lacker – President, Federal Reserve Bank of Richmond (2004?Present)
Charles Plosser – President, Federal Reserve Bank of Philadelphia (2006?Present)
William Poole – Economist, President, Federal Reserve Bank of St. Louis (1998?2008)
Laurence Meyer – Economist, Governor of the Federal Reserve Board (1996?2002)
Marvin Goodfriend – Senior V.P., Federal Reserve Bank of Richmond (1993?2005)

Economists and Financial Historians

Michael Bordo – Economist, Rutgers University Professor, Director, Center for Monetary and Financial History
David Colander – Economist, Middlebury College Professor
James Grant – Economist, Editor – Grant’s Interest Rate Observer
Martin Mayer – Scholar – The Brookings Institution, Author – The Fed
Allan Meltzer – Economist, Author of “A History of the Federal Reserve”, Carnegie-Mellon University Professor
Raghuram Rajan – Chief Economist – International Monetary Fund(2003 ? 2007), University of Chicago Professor
Richard Sylla – Economist, New York University Professor, Chairman – Museum of American Finance
Bill White – Chief Economist, Bank for International Settlements, (B.I.S.) (1995 ? 2008)

Traders and Investors

Peter Atwater – President and CEO – Financial Insyghts, LLC, Former Head of Asset Finance – J.P. Morgan
Tony Boeckh – Economist, Chairman – B.C.A. Research (1968?2002), Founder – The Boeckh Investment Letter
Jeremy Grantham – Investor, Financial Historian, Chairman – Grantham, Mayo Van Otterloo
Todd Harrison – Derivatives Trader, Hedge Fund Manager, Founder and CEO – Minyanville.com
John Mauldin – President – Millennium Wave Advisors, Author ? Endgame
Barry Ritholtz – Washington Post columnist, Author – Bailout Nation, CEO – Fusion IQ
Gary Shilling – Economist, Forbes columnist, Author, President – A. Gary Shilling & Co.
John Succo – Derivatives Expert, Hedge Fund Manager

A Rough Outline of the Film

Why is the Fed controversial?

It?s controversial because those who run it are appointed rather than elected, and so their actions are shielded from direct action by voters.? It is also a secretive institution, which does not reveal its actions/discussions rapidly.

Why was the Fed created?

The Panic of 1907 unnerved people, and led politicians to argue for a central bank.? It would have been smarter to tighten regulation of banks, but that is water under the bridge.? Most crises are due to misregulation of banks ? too much leverage, bad credit risks, and borrowing short to lend long.

What was the initial impact of the Fed?

Not much impact in WWI. When the Roaring ?20s came into existence, it was driven by loose monetary policy from the Fed, which led to?

The Great Depression

When debt grows rapidly, an eventual correction will come ? this one was sharp.? Like today, not sure the Fed could do anything to make things better, aside from not having been loose previously.

WWII to the End of the Gold Standard

The Bretton Woods conference linked the currencies of the developed world to the Dollar, which in turn was linked to gold.? Sadly, the Fed adopted a dual mandate, which said it must focus on consumer price inflation, and labor unemployment.? It didn?t work well then, and it works less well now ? the link between goods price and wage inflation is a weak one.

The link of the US Dollar to Gold worked will until the mid-?60s, when the pressures from fighting in Vietnam plus trying to create the Great Society stretched resources too thin.? William McChesney Martin caved when LBJ pushed him (perhaps beat him physically), and lowered rates in 1965, leading to inflation.

Over the ?60s and into the very early ?70s, as inflation in the US rose, foreign central banks, particularly the French, began to request gold rather than dollars.? Eventually in 1971 Nixon ended Bretton Woods, ceasing redemption of US Dollars for gold internationally.? And all of this led to?

The Great Inflation

Nixon leaned on the Fed to be loose, and Arthur Burns facilitated it.? William Miller continued it in the Carter Administration, leading to higher inflation.? Volcker was appointed by Carter, and as he pointed out in the movie, what he would do would be painful.? He resisted pressures to be easy and started inflation on a downward course by reducing growth of the money supply.? (Do you remember the news networks flashing the M-numbers on the screen each week, and the newspapers featuring them near the top of the business section?? You are old, like me.)? Volcker was not reappointed by Reagan in 1986 because he was viewed as an independent player (good), and not submissive to the administration.? Thus we got the toady Greenspan, who led to?

The Great Moderation

No one could have predicted that Greenspan would be such a political compromiser. But in 1987, after the crash, he assured liquidity to financial firms that might have been impaired from a 22% drop in the Dow.? This led to the concept of the Greenspan put.? Bad news?? Greenspan has your back, willing to inject liquidity when times are bad.

You can look at the pattern of interest rates over the period of his chairmanship.? Rates kept making lower lows, amid rapidly growing private debts.

Then we had a series of crises: Long Term Capital Management, where Lehman also almost went under.? The NASDAQ soared and fell hard 1998-2002.? Low interest/mortgage rates from 2002-2007 further encouraged a Debt/Housing Bubble.? ?The Fed was never a great regulator of the banks or mortgages.? They assumed the lesser regulators would do the job. But deregulation gutted the regulators, particularly because banks could choose their own regulators.? Hubris permeated the Fed, and Mortgage Equity Withdrawal fueled consumers, until there was nothing more to borrow against, leading to?

The Great Recession

Why did the Fed act as they did once the crisis broke?? Part of it was due to the dual mandate.? Another part was that Fed models were weak because they did not model the financial sector.? As James Grant would point out they were fixing prices via interest rates.? Once they started QE the Fed pushed the private sector to take risk because of a lack of safe assets with decent yield.? Other points:

Inflation is difficult to measure
Hubris
Insufficient skepticism, according to Hoenig

Hoenig comes off as an honest dealer versus the rest of the Fed, suggesting that many errors were made under pressure.

My Disagreements with the Movie

1) Bailouts were not needed in the way they were done

We could have rescued the operating subsidiaries that matter to average people, and let the holding companies fail.? Instead, we did the worst thing, and bought the equity of firms that were bankrupt.

2) Derivatives played no role in 1987

Unless you are willing to call futures derivatives, then derivatives played no role in the 1987 crash.

3) The net capital rule really wasn?t an issue.

4) Yes, the Fed has been monetizing the debt, and it will bite us eventually, when the demographics shift from saving to spending.? It will come in the next ten years.

Would you like the Movie?

I think most people would like the movie.? It gives the establishment sorts enough room to defend their actions, while offering wiser men the ability to say that the Fed was utterly wrong, and obviously so.

Twice before in our republic, we have eliminated a central bank.? Let us have the courage of our predecessors and eliminate the Fed.? It would be hard to do worse than the Fed did; they amplified economic shocks ? they did not mute them.

Redacted Version of the December 2013 FOMC Statement

Posted on 18 December 201319 December 2013 by David Merkel

Comments

Small $10 B/month taper.? Equities rise, and long bonds fall.? Commodities do nothing.? The FOMC says that any future change to policy is contingent on almost everything.
Shades their views of GDP up and Inflation and fiscal drag down.
They think that if they use more words, they will be clearer.? Longer statements are harder to parse and understand.
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 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.

Book Review: Kentucky Fried Pensions

Posted on 17 December 2013 by David Merkel

This book takes you through the corruption in the Kentucky Retirement System. ?It has the dubious distinction of being the worst-funded municipal pension system in the US, leaving aside Puerto Rico.

This book is very well-researched for three?reasons:

1) The author served one four-year term on the board of the Kentucky Retirement System, so he has insider knowledge.

2) The author is an expert on pensions — he has worked in this area for over 25 years. ?He also holds a CFA Charter, which demonstrates his knowledge in investments, and his commitment to ethics in investing.

3) The author extensively cites his findings, giving nearly 600 endnotes in an otherwise 256-page book.

The Kentucky Retirement System is not a victim of incompetence alone, but of fraud, political favoritism, and structured neglect. ?The structured neglect is probably the most serious matter.

For years, Kentucky would not pay its full actuarially required contribution to the retirement system. ?Now, you can’t argue with the math, though you can argue with assumptions. ?Not making the full payment persistently will leave a pension plan weakly funded. ? As the author points out, it is a quiet means of borrowing against the future, and at a far higher rate than Kentucky could borrow in the municipal bond market.

This is the product of a broken political culture that only cared about the present:

1) Keeping current taxes low

2) Spending more than taxes

3) Politicians accepting ~~bribes~~ campaign contributions from those gaining pension business from the State of Kentucky.

4) Board members that would not enforce thorough audits.

5) Board members that would not seek out investment experts for their board.

6) Politicians that would appoint weak board members that were political cronies.

7) Awarding investment mandates to political cronies, where placement agents would earn disproportionate sums.

8 ) And more…

If you read this, you will wonder how a municipal pension plan could get screwed up so badly. ?My answer is this — the political culture of the state tolerates corruption, so it grows like a weed in obscure places like the Kentucky Retirement System.

On the Rating Agencies, Etc.

The book asks the question as to why the rating agencies were complicit on municipal pensions, waking up late to the problems. ?My answer is simple. ?The rating agencies have never hired many actuaries, and as such did not consider what is obvious to any actuary that I know. ?They came to the game late, and that is normal for the rating agencies — if there has not been a failure from a given factor, their models will not have that factor. ?That’s normal for most of us, because few of us can envision failures that have never happened before.

Few are like Buffett, who said, “We’re paid to think about things that can’t happen.” ?That is the sound of one hand clapping, and few can hear it.

Never allege conspiracy, when mere incompetence will do. ?Few saw the housing bubble, and many denied it, including the present and incoming Fed Chairmen. ?Incompetence is pervasive; we should be surprised when things go well.

On Pension Obligation Bonds, we should note that they are a dumb idea, and that every municipality that has tried it ended up regretting it. ?It is hard enough to fund pensions without borrowing money; it is much harder to do after borrowing money.

Quibbles

The main problem with the book is that it needed a better editor. ?It reads like a series of essays that are self-contained, because much material is repeated that could have been eliminated.

Secondarily, the book takes a position that pension benefits can’t be cut. ?That is not true. ?It may take constitutional changes to do so, but in a democracy, anything can be done. ?We could repeal the prohibition against ex post facto laws on a basis limited to pensions.

I say this because many municipal unions pressed for pensions far beyond what was warranted, in exchange for lower salary increases. ?It appealed to venal politicians, because increasing pensions usually had no current cash cost.

Eventually, municipalities will be forced to cut pensions, even for those that have retired. ?There will be no other choice.

Who would benefit from this book:?If you want to know the depths of depravity in municipal pensions, this is the book for you. ?If you want to, you can buy it here:?Kentucky Fried Pensions: Worse Than Detroit Edition.

Full disclosure: The author sent me the book after I asked for a review copy.

If you enter Amazon through my site, and you buy anything, I get a small commission.? This is my main source of blog revenue.? I prefer this to a ?tip jar? because I want you to get something you want, rather than merely giving me a tip.? Book reviews take time, particularly with the reading, which most book reviewers don?t do in full, and I typically do. (When I don?t, I mention that I scanned the book.? Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.? Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.? Whether you buy at Amazon directly or enter via my site, your prices don?t change.

When to Worry — An Asset-Liability Management Perspective on Financial Macroeconomics

Posted on 13 December 2013 by David Merkel

At the end of the day, the world is net flat.? Every asset is owned 100%; every liability is someone else’s asset.

If everything is 100% owned, why are there ever crises?? Financial companies owning illiquid assets financed by short, liquid liabilities.? Liquidity crises are credit crises; a company going through a liquidity crisis did not do sufficient stress testing to realize that they were weakly financed.

Crises are never accidents, aside from things like Hurricane Katrina and Superstorm Sandy.? And guess what?? How many insurers failed from those two events?? None.

Crises happen because things are inverted.? Under ordinary circumstances, prudence dictates that long-term assets be financed by equity or long-term debt.? Before a crisis, long-term assets are owned with short-term debt, and wealthy guys like Buffett and Klarman hold cash and shun long-term assets.? That’s inverted.? Those that should not be bearing risk are bearing risk, and those the could bear risk aren’t.? Why?? Because the prices on risk assets are high, and smart investors lighten the boat as the envious buy into momentum at the end of a doomed rally.? Ben Graham’s weighing machine takes over from the voting machine.

So what are reasons to worry?? Here are a dozen, not in any order:

The combined balance sheets of investment banks grow, and the complexity of their assets rises.
The repo market grows, as less liquid assets are financed by very liquid liabilities.
Poor-to-middle class people begin taking risk by buying homes, or speculating in stocks.? These people have weak liability structures, because they live paycheck to paycheck.
Mortgage finance moves to ARMs or even more exotic loans.
Downpayments on homes get low.
Rich hold more cash while the poor and middle-class borrow.? The rich can take losses — they have long time horizons.? When they play defense, it is a time to be concerned.
In a given sector there has been a large increase in debt, and there are concerns over ability to repay.
Shadow banking has increased dramatically.
Financial commercial paper issuance has increased dramatically.
People rely on certain large financial firms to not default, even if they have taken on too much credit risk relative to their capital.? (Think of Fannie and Freddie.)
Increased financial complexity makes everything opaque.? Bad things happen in the dark.
The credit cycle gets long in the tooth, and credit spreads/yields tighten to levels that are far too low for the risk taken on.

Now, I leave aside pure macroeconomic concerns like the possibility that the Fed might face a greater problem with stagflation than it did in the ’70s.? When long illiquid assets are financed by short liabilities, all sorts of bad things can happen.? Keep your eyes open.? Hey, aren’t Buffett and Klarman letting cash levels rise?

Sorted Weekly Tweets

Posted on 7 December 2013 by David Merkel

Rest of the World

Ghana Farms Miss Out on Oil-Fueled Middle Class Food Demand http://t.co/IwEsoXVy20 Middle classes introduce changes into societies $$ $SPY Dec 07, 2013
Are the Baltic Dry Index Telling Us to Expect a Stronger Economic Activity? http://t.co/aqnFaUuGkg Could be, but only in exports $$ Dec 07, 2013
Yuan Passes Euro as 2nd-Most Used Trade-Finance Currency http://t.co/yeNQzNYLWD If China’s banks were exposed 2 market, would b impressed $$ Dec 07, 2013
Big Oil to Get Brazil-Like Terms in Plan to End Mexico Monopoly http://t.co/SWqSEyVnU0 Maybe Mexico can gain the technical help it needs $$ Dec 07, 2013
Panasonic in Deal Talks With Auto Parts Makers for Expansion http://t.co/vjECK9hnD5 Desperation drives the company 2 seek more markets $$ Dec 07, 2013
Pirates Wielding Grenades Spur Japan to Ease Samurai-Era Gun Ban http://t.co/jsOtaI0J7c Force must b opposed by force; no other way $$ $SPY Dec 07, 2013
Rich Kazakhs Revive Polygamy as Women Seek Poverty Escape http://t.co/vTn2h9eSZx Young Kazakh women would rather b second wives than poor $$ Dec 07, 2013
Iran Wants US Companies to Develop Oil Fields http://t.co/E1NUUEo5t4 The Great Satan is quite useful under the right conditions $$ $SPY $TLT Dec 07, 2013
China Cinda Attracts $65B in Orders for Up to $2.5B IPO http://t.co/6i5nvsWhSD Those are bubbly conditions; 2 much $$ 2 put 2 work $SPY $TLT Dec 07, 2013
Wrong: OECD Warns Riksbank Against Obsessing Over Record Debt http://t.co/fYu3CcY31M OECD should learn excessive debt harms $$ $TLT $SPY Dec 07, 2013
Banks in Safest Euro Nation See Credit Drought as Finns Save http://t.co/HZ6IDctQzk Many want to save; few want to borrow. Rational $$ Dec 07, 2013
Spain Credit Falls to ?05 Shadow After Price Collapse http://t.co/y9VUnLcszp Even that is too much credit. Wait 4 hard money buyers $$ Dec 06, 2013
China Bans Financial Companies From Bitcoin Transactions http://t.co/i8yhbAcKAW Wealthy Chinese want to get value out of China $$ $SPY $TLT Dec 06, 2013
“Wealthy Chinese could use it to funnel flight capital out of China” ? David_Merkel http://t.co/XRD6rOfsGg How Bitcoin functions in China $$ Dec 02, 2013
China?s Largest Bitcoin Exchange Seeks Recognition for Currency http://t.co/hNtBu9e2MU Communist Party will eventually ban Bitcoin $$ $SPY Dec 02, 2013

PPACA/Obamacare

Obamacare’s New Goal: Stay Alive Until 2015 http://t.co/tJpT20oW6K The idea is 2 survive until 2015, so the law can’t b destroyed in 2017 $$ Dec 07, 2013
How Much More Will Smokers Pay for Obamacare? http://t.co/Rd3eWeVynR Answer: not much more & no, it will have little effect on quitting $$ Dec 04, 2013
Obamacare Website Repair Goals Reached, Administration Says http://t.co/PfJ5tgLrSu Big Problem: the insurers are not getting the data $$ Dec 03, 2013
Deep Inside The Hot Mess Called Obamacare: It’s Time For Honesty http://t.co/uY6P8JnakO Sophomoric, doing a dumb thing, calling it wise $$ Dec 01, 2013
Obamacare Payment System to Insurers Changed in Setback http://t.co/0d26PCyQh6 Complex law, difficult to change w/o affecting other parts $$ Nov 30, 2013
Inside the Company That Bungled Obamacare http://t.co/EbcR6VQ3rs B wary of companies that grow 2 fast w/shaky revenue recognition $$ $GIB Nov 30, 2013

Pensions

Change Illinois’ pension benefits to match the Social Security system http://t.co/LuA3nkw50C The bill passed will harm Illinois long-run $$ Dec 07, 2013
The Best and Worst Run States in America: A Survey of All 50 ? http://t.co/Kq5ElC567u You might be surprised by the rankings $$ $SPY $TLT Dec 07, 2013
Pension Threats in Illinois, Detroit Rattle Government Workers http://t.co/t2rqvoK3cl If the local government can’t pay, it won’t $$ Dec 07, 2013
Pension Threats in Illinois, Detroit Rattle Government Workers http://t.co/Hd0Wr0TL0b Blame Union strategy of extracting pension gains $$ Dec 06, 2013
Illinois Passes Pension Overhaul http://t.co/8svwzeiTuK Fake overhaul that leaves Illinois taxpayers worse off, will go to court & die $$ Dec 05, 2013
Detroit Retirees Got Extra Interest After Guaranteed 7.9% http://t.co/WmvpH4PHWI What Detroit did w/”excess” pension earnings was evil $$ Dec 03, 2013
Illinois Legislative Leaders Try to Sell Pension Agreement http://t.co/vU1O1qKSO6 Dreamland vs Hard Choices. So far Dreamland is winning $$ Nov 30, 2013

US Politics & Policy

Gun Patents Set 35-Year Record as Limits on Sales Fail http://t.co/lZKuBqkheu When GOP has Presidency sales will fall $$ Dec 07, 2013
What You Don?t Know About Mortgages http://t.co/dmKPgFMAqL! Mortgage documents don’t reflect the full cost of getting the mortgage $$ $TLT Dec 07, 2013
Obama war chiefs widen drone death zones http://t.co/E47ZKFgBex If we want to make the US odious to the rest of the world, use drones $$ Dec 07, 2013
Paul Krugman Consigns To Hell An Economic Slump Of His Own Devise http://t.co/qgrKFSBG8W We have 2 turn the lights off near Krugman $$ Dec 07, 2013
The Fed Must Inflate http://t.co/nBKutizEDw I think this is the most likely conclusion, but not certain $$ Dec 07, 2013
Is the Fed increasingly monetizing government debt? http://t.co/1I3twSCfaY Yes, Fed is monetizing government debt, get ready 4 inflation $$ Dec 07, 2013
Angry Self-Insured Voters Dim Democratic Takeover Plans http://t.co/MMjVZi16LU Many feel robbed by the loss of choice in healthcare $$ $SPY Dec 06, 2013
Henninger: Obama’s Red-Line Presidency http://t.co/tOjc5UV88s What doe the US stand for? What will we defend? Who r our allies? Confusing $$ Dec 06, 2013
“You can’t regulate what you don’t understand. The SEC looked in on it several times, with more?” ? David_Merkel http://t.co/g9jqwD0En1 $$ Dec 03, 2013
Uninsured-Driver Dilemma http://t.co/DSBWcNLyMk Have Assurant track non-payment at the insurers, & inform the MVAs of lapsation $$ $AIZ Dec 03, 2013
Magic Johnson, Tom Hanks Join Obama on Cash-Grabbing Trip http://t.co/z2AOd9C8yC Cash works in the short run, voters decide the long run $$ Dec 03, 2013

Financial Sector

Why FDIC is Running Out of Time for Resolution Planning http://t.co/5PTdNU6LPb As w/all complex laws, things move slowly, no surprise. $$ Dec 07, 2013
Why Capital Is Key Battleground in GSE Reform Debate http://t.co/21pFcfRhfU Appropriate capital 4 new system:a political &technical issue $$ Dec 07, 2013
Penny Pricing for US Stocks Said to Get Scrutinized http://t.co/grStNTieJR I don’t think this is a big problem, helps small investors $$ Dec 07, 2013
Examiners-in-Residence Should Be Pulled Out of Megabanks: OCC Report http://t.co/QGyvc9RkDz Familiarity breeds acquiescence, not contempt $$ Dec 07, 2013
Buyers Give Up Their Names to Seal Merger Deals http://t.co/zmAgQ2J5Zo Who cares what a bank is named, so long as you have control? $$ $FXF Dec 07, 2013
Volcker Rule to Force Banks to Comply With Five Regimes http://t.co/7H0s7dhCnm Recipe 4 disaster. When many r responsible, no one is $$ Dec 07, 2013
Slate Writer Is Dead Wrong to Root Against Community Banks http://t.co/TAL566KB0n Getting banks is tough 4 neophytes like Matty Yglesias $$ Dec 06, 2013
Private equity firms brace for ?mafia? style scrutiny http://t.co/dRaXIvfztv This looks a lot more difficult than the article indicates $$ Dec 03, 2013
Fed Eyes Financial System’s Weak Link http://t.co/ShsZIBcWT4 Solution is simple; bifurcate repo acctg 4 statutory cash flow testing $$ $XLF Dec 03, 2013
Creating a Black Swan http://t.co/wMnfc81Ai0 Attempts 2 explain how negative black swan events get created in financial markets $$ $SPY $TLT Nov 30, 2013
The Black Swan http://t.co/IBQL7AG4XJ A good piece that explains positive & negative “Black Swan” events, & how 2 thus position for them $$ Nov 30, 2013

Companies & Industries

Crude Oil Refiners Are In A Sweet Spot | Commodities http://t.co/HjtUJOe0gZ Because crude oil can’t b exported, refiners benefit $$ $SPY Dec 07, 2013
Retailers Are in a Deflated Holiday Mood http://t.co/Rd7JLXlRj8 One reason why I rarely invest in retailers, aside from grocery $$ $SPY $TLT Dec 07, 2013
Heavy Inventories Threaten to Squeeze Clothing Stores http://t.co/t542Zlltcf That said, clothing is dirt cheap, so why worry much? $$ $SPY Dec 07, 2013
Hidden U-Haul Billionaire Emerges With Storage Empire http://t.co/YRE2pc6Tf4 Fascinating tale of how brothers rescued the family business $$ Dec 06, 2013
UnitedHealth Projects 2014 Results Below Analysts’ Estimates http://t.co/c9fGK1QUzp Health Insurers take one for Obama’s errors $$ #FTL Dec 03, 2013
Olin Corporation Common Stock up 9% today http://t.co/HwlrL4TD9z Something is happening w/OLN today. Anyone know what? FD: + $OLN $$ $SPY Dec 02, 2013
Microsoft, Yahoo Upgrades Shows Snowden Won, Obama Failed http://t.co/sqzBmoIY8n Encryption keys double, squaring time needed to crack $$ Nov 30, 2013
Fair-Weather Friends or Raining on Your Parade http://t.co/uVksfLp84u Good snarky post. Time to lighten up on property-centric reinsurers $$ Nov 30, 2013

Market Dynamics

Gen Re?s Gilbert Says Fed Sets Up Stocks for a Decline http://t.co/o28udyUMGC The Fed will learn the limits of its power in a few years $$ Dec 07, 2013
The Blessing of a Declining Stock Price http://t.co/Ta2eE12QW7 This is how I do it; I buy companies that have moved against me $$ $SPY $TLT Dec 07, 2013
The Stock Market Is ‘Shrinking,’ Despite Record-High Indexes http://t.co/cj6YcrhBYL Interesting argument of stock scarcity pushing prices $$ Dec 07, 2013
Buffett’s Alpha http://t.co/D3UrTxePlp Finally a paper from academics that gives Buffett the credit he deserves. Efficient markets? No. $$ Dec 07, 2013
Gross to Run Pimco Unconstrained as Dialynas Takes Leave http://t.co/rgLxxVp3Xj Unconstrained is no guarantee of good performance $$ $TLT Dec 06, 2013
?Quant? hedge funds: Computer says no http://t.co/ZCXplVsnnA Runs in cycles as more or less focus on anomalies in investing $$ $SPY $TLT Dec 01, 2013
Don?t Ignore Doctor Copper http://t.co/JYw6XNcR5z Copper is indicating a punk economy $$ $SPY $TLT Dec 01, 2013
Howard Marks: Too Cute for His own Good? http://t.co/BWZ2bDD0xP Unfair. Marks says that the opportunity set is small, get it? $$ $SPY $TLT Dec 01, 2013

Other

Fixing What’s Wrong With Economics 101 http://t.co/BR8Lt8Z19H We need 2 scrap neoclassical economics, and move economics away from math $$ Dec 07, 2013
Madoff Behaved Like a Lunatic Over Fund Probe, Jury Told http://t.co/CUfV17a9tA Seems like Madoff employees kept their heads down $$ Dec 07, 2013
CS50, a computer science course, breaks stereotypes and fills halls at Harvard http://t.co/wnc2WYQbpo Making IT relevant across cultures $$ Dec 01, 2013
Caveat Emptor: Lovers of Latin Try to Sell a Dead Tongue http://t.co/d5YuHQQZtd Looks like wishful thinking 2me. Esperanto, anyone? $$ Nov 30, 2013
Why Taylor Swift Is the Reigning Queen of Pop http://t.co/sTEJPtyp66 Swift’s popularity secret? My take:she appears more humble than most $$ Nov 30, 2013
Build a Better Turkey Sandwich http://t.co/mM42sClsuL Thanksgiving keeps on giving in six inspired takes on the leftover-turkey sandwich $$ Nov 30, 2013

October 2013	December 2013	Comments
Information received since the Federal Open Market Committee met in September generally suggests that economic activity has continued to expand at a moderate pace.	Information received since the Federal Open Market Committee met in October indicates that economic activity is expanding at a moderate pace.	Shades their view up, but I don?t see much to support it.
Indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated.	Labor market conditions have shown further improvement; the unemployment rate has declined but remains elevated.	Weasel words because the participation rate is falling, and wages are stagnant.
Available data suggest that 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, while the recovery in the housing sector slowed somewhat in recent months.	No real change.? Language clearer.
Fiscal policy is restraining economic growth.	Fiscal policy is restraining economic growth, although the extent of restraint may be diminishing.	Shades fiscal drag down, but the deficit is shrinking, so where do they get this?
Apart from fluctuations due to changes in energy prices, 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.	Calls energy special, but it plays into all we do.? TIPS are showing slightly higher inflation expectations since the last meeting. 5y forward 5y inflation implied from TIPS is near 2.65%, up 0.08% from September.
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 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.	No change. ?Monetary policy is omnipotent on the asset side, right?
The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall.	The Committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced.	Financial conditions are looser.? That?s largely due to the loose monetary policy globally.
The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates 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.	Shades their view on inflation down.? CPI is at 1.2% now, yoy.
Taking into account the extent of federal fiscal retrenchment over the past year, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program 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 sees the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy.	No significant change, but switches the spotlight to the asset purchase program, suggesting that it has helped.
However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.		Worthless sentence eliminated.
Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $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 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.	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
Taken together, these actions 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 real change.
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.
In judging when to moderate the pace of asset purchases, the Committee will, at its coming meetings, assess whether incoming information continues to support the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective.	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.
Asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s economic outlook 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.Promises that they won?t change until the economy strengthens.? Good luck with that.
In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate 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 1.72%, down 6 bps since the last meeting.? Here?s the graph.? The FOMC has only ~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.	New sentence.? 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; Jerome H. Powell; Eric S. Rosengren; 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; James Bullard; Charles L. Evans; Esther L. George; Jerome H. Powell; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen.	No change
Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.	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.	George in, Rosengren out.? Rosengren thinks any tapering is premature.