Home → Fisher Investments MarketMinder Headlines → 04-2011 Archives

Market Misperceptions
By , CNN Money, 04/29/2011

MarketMinder's View: Q1 growth did slow from Q4—but the operative word here was “growth.” Economic growth rate variability is perfectly normal, even in expansion. For more, see today’s cover story, “Not Running on Empty.

Market Misperceptions
By , CNBC, 04/29/2011

MarketMinder's View: To get “stagflation” (a word with no official definition), you need slow or even declining growth and high inflation. We have neither. We have had one quarter of a slower growth rate off a quarter of strong growth and, still, very contained inflation overall.

Market Misperceptions
By , CNN Money, 04/29/2011

MarketMinder's View: It’s likely Congress will raise the US’ debt ceiling despite all the political posturing—as they’ve done exactly 75 times before this. For more, see our 02/02/2011 cover story, “That Four-Letter Word.” 

Market Misperceptions
By , The New York Times, 04/29/2011

MarketMinder's View: Unemployment, though still high, is slowly showing improvement. What’s more, employment improvements typically and normally lag economic recovery, sometimes by a lot.

Sensible Stories
By , The Motley Fool, 04/29/2011

MarketMinder's View: Here’s a great article explaining how to think about investing—know that “even the best investors are typically wrong four times out of 10.” No one is right 100% of the time. The goal is to be right more than wrong and learn from your mistakes, while knowing you will be wrong again in the future.

Sensible Stories
By , CNN Money, 04/29/2011

MarketMinder's View: As this article points out, higher demand—particular from China’s fast-growing economy—outstripping supply is a major driver for higheroil prices.

Sensible Stories
By , Fortune, 04/29/2011

MarketMinder's View: We don’t agree with every point of this. For example, it’s unclear how much impact on the dollar this has or if a strengthening dollar is even a goal. However, we’ll take a tax holiday no matter the reasoning behind it. Even better than a short-term holiday, if you want to spur economic activity, is permanently lower corporate rates. That would be some serious stimulus.

Sensible Stories
By , The Wall Street Journal, 04/29/2011

MarketMinder's View: More global trade sounds good to us. For more, see our 04/07/2011 cover story, “A Triumph for Trade.

Sensible Stories
By , Associated Press, 04/29/2011

MarketMinder's View: More evidence of economic resilience. Americans’ incomes rose overall last month—as did spending.

Market Misperceptions
By , Time, 04/28/2011

MarketMinder's View: We’re wondering what Q1 2011 GDP report this article supposedly analyzes—because it’s factually wrong. To start with, the recovery phase is over and has been—we’re in expansion. On top of that, consumer spending, exports, and business investment all grew in Q1—contrary to the article’s incorrect assertion of declines.

 

Market Misperceptions
By , Fortune, 04/28/2011

MarketMinder's View: As recent developments in natural gas exemplify, the world is not running out of commodities. Fact is, this kind of Malthusian belief that we’re running out of X or Y has been common for centuries—and consistently proven false. Ignore.

Market Misperceptions
By , Seeking Alpha, 04/28/2011

MarketMinder's View: 

First, this article overestimates the role of the Fed in the current bull market and economic expansion. Moreover, the 10 signs listed are either wrong (e.g., end of fiscal stimulus) or aren’t anywhere near alarming levels (e.g., IPO activity at a four-year high).

Market Misperceptions
By , MSN Money, 04/28/2011

MarketMinder's View: Wow. Here’s a collection of old news that didn’t impact markets much and was overstated, combined with some off-base economic analysis and the bizarre statement that “traders look antsy.” None of which are helpful in assessing market conditions ahead. And the recommendation at the end is equally bizarre—buy a 3x leveraged US Treasury bond ETF? That seems highly unwise at almost any point, but especially so early in an economic expansion.

Market Misperceptions
By , MarketWatch, 04/28/2011

MarketMinder's View: Yes, some prices have risen for food and commodities. But food and commodity inflation isn’t the same as inflation—which is a monetary phenomenon and would have a far broader reach than meat and fuel. Yes, consumers may feel these price changes—but they aren’t the same as broader inflation. For more, see our 02/18/2011 cover story, “Fearing Foodflation.”

Sensible Stories
By , The Wall Street Journal, 04/28/2011

MarketMinder's View: “The nearly 60-minute exchange with reporters turned out to be little more than a faster-paced version of a congressional hearing.” Exactly.

Sensible Stories
By , Washington Post, 04/28/2011

MarketMinder's View: “[Credit ratings] should not serve as a substitute for appropriate creditworthiness assessment.” We agree. Dodd-Frank’s regulatory attempt to reduce the influence of credit ratings agencies is a good idea, but whether it actually occurs remains to be seen. For more, see our 12/10/2010 cover story, “Dodd-Frank Says Ditch Fitch.”

Sensible Stories
By , EUBusiness, 04/28/2011

MarketMinder's View: While talk of a Greek restructuring has re-emerged lately, it remains highly unlikely any time soon. For more, see our 04/27/2011 cover story, “Greek Theater.”

Sensible Stories
By , The Wall Street Journal, 04/28/2011

MarketMinder's View: Here’s a sensible look at the debt ceiling that cuts away much of the hype surrounding politicians’ talk. For more, see our 04/11/2011 cover story, “Shutdown Charade.”

Sensible Stories
By , The Wall Street Journal, 04/28/2011

MarketMinder's View: The more free trade, the better. This is a solid look at South Korea’s push to expand free trade agreements. For more, see our 04/07/2011 cover story, “A Triumph for Trade.”

Sensible Stories
By , The Wall Street Journal, 04/28/2011

MarketMinder's View: The more free trade, the better. This is a solid look at South Korea’s push to expand free trade agreements. For more, see our 04/07/2011 cover story, “A Triumph for Trade.”

Market Misperceptions
By , Bloomberg, 04/27/2011

MarketMinder's View: Greece’s 2010 budget deficit was higher than expected, but restructuring of Greek debt, at least in the near term, looks unlikely. For more, see today’s cover story, “Greek Theater.”

Market Misperceptions
By , Associated Press, 04/27/2011

MarketMinder's View: Once again, the ratings agencies are telling us what we already know.

Market Misperceptions
By , Daily Finance , 04/27/2011

MarketMinder's View: We agree recent events have “reignited fear” among some stock investors, but betting on VIX futures is certainly advice to ignore. Few people can predict future volatility with accuracy.

Sensible Stories
By , The Wall Street Journal, 04/27/2011

MarketMinder's View: Here’s a brief history of the history of the debt ceiling, which Congress has voted to increase 75 times since 1962—and likely will again soon. For more, see our 02/02/2011 cover story, “That Four-Letter Word.”

Sensible Stories
By , The Australian, 04/27/2011

MarketMinder's View: Economic growth, not political policy, creates jobs over the long term. It’s as simple as that.

Sensible Stories
By , The Wall Street Journal, 04/27/2011

MarketMinder's View: “Orders for long-lasting US goods made a broad-based surge during March.” More evidence the economy is growing nicely. 

Sensible Stories
By , Real Clear Markets, 04/27/2011

MarketMinder's View: “The answer is: No. This natural cyclicality is far more powerful than the thousands or tens of thousands of pages of regulations, which will be the principal memorial of the act. The real name of the Dodd-Frank Act should be the ‘Faith in Bureaucracy Act.’ This is a faith I do not share.” For more, see our 04/22/2011 cover story, “The Dodd-Frank ‘Act’ Strikes Again?

Sensible Stories
By , Carpe Diem, 04/27/2011

MarketMinder's View: Leading indexes and shipping volumes on the rise are positives for the global economy.

Market Misperceptions
By , The Los Angeles Times, 04/26/2011

MarketMinder's View: This article goes directly after a number of straw man arguments, but misses that the US still has the deepest capital markets and the dollar is still considered the safest, most liquid reserve currency in the world. Likewise, America can easily afford its debt—borrowing costs relative to GDP remain historically low. And interest rates fell the day of S&P’s outlook revision. That should tell you the concerns highlighted here are likely overstated. For more, see our 04/19/2011 cover story, “The Scarlet Letter.”

Market Misperceptions
By , The Wall Street Journal, 04/26/2011

MarketMinder's View: There are multiple problems here. First, attempting to time a correction is folly—corrections are always possible and are wildly unpredictable. Second, this ascribes too much emphasis to Federal Reserve policies. Third, the Fed policies discussed are widely known—QE2’s end date was set at its inception. Fourth, whether your portfolio has recouped its losses from the bear market fully might be of interest to you, but it isn’t telling about stocks’ future direction or what allocation decisions an investor should make. That requires a far deeper analysis.

Market Misperceptions
By , The Associated Press, 04/26/2011

MarketMinder's View: Although the result is positive, we caution against reading too much into consumer confidence readings. They are largely lagging and the trend is hardly predictive of future results—for itself or markets.

Market Misperceptions
By , The Atlantic, 04/26/2011

MarketMinder's View: China’s ownership of US debt—and their future behavior in that regard—are a frequently discussed concern. But the market for US debt is vast—and there are far more buyers than one. If China stops buying our debt, maybe rates do incrementally rise (assuming no one else steps up). But even if one assumes rates double from here, our interest costs relative to GDP would be at levels last seen in the early 1990s—which wasn’t a dreadful decade for stocks at all. For more, see our 07/08/2010 cover story, “Still a Yuan for US Debt.”

Sensible Stories
By , Real Clear Markets, 04/26/2011

MarketMinder's View: "That US Treasury continues (sadly) to borrow large amounts of money, and that investors line up for the privilege to purchase the debt, tells us that those who regularly dine out on the bankruptcy concept should temper their rhetoric.” Precisely.

Sensible Stories
By , The Guardian, 04/26/2011

MarketMinder's View: China’s burgeoning middle and upper classes continue to drive spending and growth in the country. Despite attempts to cool inflation, China’s (and other countries around the world) economic growth persists—and seems likely to continue. That means more affluent Chinese consumers and a bigger market for companies to target.

Sensible Stories
By , Carpe Diem, 04/26/2011

MarketMinder's View: This article sheds light on the politically popular idea that the rich are getting richer, while the poor are…well, getting poorer. In fact, “accounting for income transfers and the value of fringe benefits, this research shows that the bottom 20 percent of households actually experienced after-tax income growth of more than 26 percent.”

Sensible Stories
By , Investors Business Daily, 04/26/2011

MarketMinder's View: True, there are many statistical errors with the IMF’s report. But even ignoring these errors, so what if China overtakes the US as the largest economy in the world? As the world becomes more interconnected, we see Chinese growth as a positive for everyone.

Market Misperceptions
By , Telegraph, 04/25/2011

MarketMinder's View: The fact US government interest rates fell following S&P’s announcement isn’t sign that the “world has gone mad”; it’s a sign many investors don’t believe US debt poses a likely pending “disaster.” This is a piece to ignore.

Market Misperceptions
By , The New York Post, 04/25/2011

MarketMinder's View: The demise of the American dream is greatly (and frequently) exaggerated. The studies cited here rely on surveys and twisted, relative views of the rate of average income growth—two rather bizarre ways to judge whether a generation is better off than the prior. Leaving data tweaking shows average incomes have grown in an absolute sense—which doesn’t support the article’s conclusion.

Market Misperceptions
By , Reuters, 04/25/2011

MarketMinder's View: This is a vast underestimation of the global economy’s strength.

Market Misperceptions
By , Barron’s, 04/25/2011

MarketMinder's View: While we agree the VIX is a flawed indicator regarding markets, we’d simply recommend ignoring it—not acting on it using options as the article concludes.

Sensible Stories
By , Seeking Alpha, 04/25/2011

MarketMinder's View: “The remarkable recovery in the global economy over the last few years is a testament to the ability of markets to recover from even a severe financial crisis and the worst economic slowdown in generations.”

Sensible Stories
By , The Independent, 04/25/2011

MarketMinder's View: When the next bear market does arrive (unlikely in 2011, in our view), it probably won’t look exactly like 2008. And even then, putting faith in government’s ability to head off the next crisis is widely off the mark. For more, see our 04/21/2011 cover story, “The Dodd-Frank “Act” Strikes Again?”

Sensible Stories
By , The New York Times, 04/25/2011

MarketMinder's View: China’s fast economic growth has created an increasing number of wealthy Chinese consumers. These consumers (and the increasing income of those at lower income levels) provide a fast-growing market for a wide array of goods produced around the world.

Sensible Stories
By , SmartMoney, 04/25/2011

MarketMinder's View: While we’d stop short of saying there’s an overinflated asset bubble in gold and silver, this article does highlight a few points to contemplate for those considering speculating in these commodities.

Sensible Stories
By , SmartMoney, 04/25/2011

MarketMinder's View: “The remarkable recovery in the global economy over the last few years is a testament to the ability of markets to recover from even a severe financial crisis and the worst economic slowdown in generations.”

Sensible Stories
By , The New York Times, 04/25/2011

MarketMinder's View: This article is spot on. QE2 has likely had little actual effect beyond increasing bank reserves, which largely didn’t need to be increased when it was announced. For more, see our 12/06/2010 research analysis, “Q&A on QE2.”

Market Misperceptions
By , The New York Times, 04/21/2011

MarketMinder's View: Yes, the US has high corporate tax rates, and yes, there are loopholes and exemptions. But here’s a better question: Is it good policy to drive private companies to allocate capital (both human and other) to seek loopholes and exemptions, or would that capital be better used in other ways? If your answer is the latter, then reduce corporate tax rates and simplify the tax code.

Market Misperceptions
By , Reuters, 04/21/2011

MarketMinder's View: The influence of government policy and spending on the ongoing economic expansion is frequently overstated. This is another example.

Market Misperceptions
By , MSN Money, 04/21/2011

MarketMinder's View: Comparisons between the fiscal conditions of Greece and the US are sheer fantasy. Don’t believe us? Then take the market’s word for it: Greek 3-month bill yields are higher than US 30-year bond yields. Comparing similar maturities shows Greek yields are orders of magnitude greater than US yields. For more, see our 04/19/2011 cover story, “The Scarlet Letter.”

Market Misperceptions
By , The Independent, 04/21/2011

MarketMinder's View: It’s true unemployment in many countries remains elevated. But as we’ve said many times, unemployment typically takes years to return to pre-recession lows. Warnings of a “lost generation” ignore the fact it’s never happened before.

Sensible Stories
By , The New York Times, 04/21/2011

MarketMinder's View: This piece highlights an often-overlooked point. When the financial press reports on market movements, they frequently ascribe too much importance to one event or input—which fails to recognize market movements are dictated by many data points that are sometimes conflicting in nature.

Sensible Stories
By , The Wall Street Journal, 04/21/2011

MarketMinder's View: In the past two years, loans to small businesses have been constrained on both the supply and demand side. However, it appears the environment is beginning to improve—a plus for the US economy.

Sensible Stories
By , Associated Press, 04/21/2011

MarketMinder's View: Corporate earnings and revenue figures have been strong thus far in earnings season. While this is clearly important, it’s equally important to realize investors’ expectations have been ratcheted up from a low bar in prior quarters. For more, see our 04/20/2011 cover story, “Fisher Investments MarketMinder: Our Eye on Earnings.”

Sensible Stories
By , Bloomberg, 04/21/2011

MarketMinder's View: “The index of US leading indicators increased for a ninth month in March, signaling higher fuel costs will fail to derail the expansion.”

Sensible Stories
By , Truth on the Market, 04/21/2011

MarketMinder's View: This short article makes the point succinctly: Government regulation, however well-intended, is no panacea for preventing crises and risk. The market is, overall, far better at self-regulating than the efforts of lawmakers whose decisions are heavily influenced by the fact their livelihood is contingent on winning a popularity contest every two, four, or six years.

Sensible Stories
By , USA Today, 04/20/2011

MarketMinder's View: S&P’s negative US outlook may make some investors nervous, but it was based more on S&P’s assessment of the political process, not current economic fundamentals. In fact, we’re surprised anyone gives much credence to ratings agencies anymore. For more, see our 04/19/2011 cover story, “The Scarlet Letter.

Sensible Stories
By , The Wall Street Journal , 04/20/2011

MarketMinder's View: Spain successfully completed another bond auction, albeit at higher yields—showing little contagion from the fiscally weaker PIIGS.

Sensible Stories
By , The Wall Street Journal, 04/20/2011

MarketMinder's View: Amid high political drama, Portugal moved closer to finalizing terms of a bailout with EU and IMF officials, assuaging fears of a wider debt contagion for the time being. For more, see our 03/24/2011 cover story, “Portugal’s Socratic Method.

Market Misperceptions
By , Capital Gains and Games, 04/20/2011

MarketMinder's View: It wouldn’t surprise us to see a lot of partisan political jawboning over raising the debt ceiling, but an increase is very likely. For more, see our 02/02/2011 cover story, “That Four-Letter Word.

Market Misperceptions
By , CNN, 04/20/2011

MarketMinder's View: This isn’t such a shock, nor is it bad. Rebuilding, which is already underway, likely caused the spike.

Market Misperceptions
By , The Motley Fool, 04/20/2011

MarketMinder's View: Disastrous accounting rule FAS 157 (fair value) and schizophrenic government responses throughout 2008 were huge contributors to the financial panic—something completely ignored by the FDIC case study cited here.

Market Misperceptions
By , The Wall Street Journal, 04/20/2011

MarketMinder's View: The yuan has a long way to go before it’ll be a viable alternative to the US dollar as the global reserve currency. For more, see our 02/16/2011 cover story, “Dollar on the Decline?

Market Misperceptions
By , BBC, 04/20/2011

MarketMinder's View: Gold’s been grabbing a lot of headlines lately. So here’s our daily reminder: Gold is not the investing safe haven many wish it were. For more, see our 02/12/2010 cover story, “Gold’s Safety Blanket Myth.

Market Misperceptions
By , The Street.com , 04/19/2011

MarketMinder's View: So far off the mark, we just couldn’t ignore it. However, we recommend you do.

Market Misperceptions
By , CNBC, 04/19/2011

MarketMinder's View: Watch what investors do, not what ratings agencies say. And yesterday, while S&P adjusted their outlook on US government debt (treasury bonds), interest rates on government bonds fell—indicating investors’ actions differed entirely from S&P’s words.

Market Misperceptions
By , The Motely Fool, 04/19/2011

MarketMinder's View: Clearly, ratings agencies played a role in 2008’s financial crisis. But this is vastly overstating the case and is overly reductionist.

Market Misperceptions
By , The Independent, 04/19/2011

MarketMinder's View: Believe it or not, the date of this story actually is April 19, 2011—not 2010. And fear of a eurozone debt “contagion” was overstated even then.

Sensible Stories
By , The New York Times, 04/19/2011

MarketMinder's View: “Standards & Poor's rating firm downgraded US debt to negative from stable. Yes, the raters who blessed virtually every toxic waste subprime security they saw with AAA ratings now see problems with sovereign government debt.” For more, see today’s cover story, “The Scarlet Letter.”

Sensible Stories
By , Bloomberg, 04/19/2011

MarketMinder's View: Employment figures have long been a lagging indicator. As the US moves farther into expansion, look for employment figures to continue their gradual and uneven improvement.

Sensible Stories
By , Carpe Diem, 04/19/2011

MarketMinder's View: “The World Federation of Exchanges recently released data on world stock market capitalization, which increased to $57.8 trillion in March. That was a 39-month high for world equity values and the highest level since December 2007, when the US recession started. Compared to the cyclical low of $26.6 trillion two years ago in February 2009, the total world stock market capitalization has more than doubled.” The title summarizes our sentiments exactly.

Sensible Stories
By , The Australian, 04/19/2011

MarketMinder's View: This article states the fundamental case well for global equities. While we think this year is likely a muted one for index returns, these are a few of the forces that allude to a continuation of the bull market ahead.

Market Misperceptions
By , The New York Times, 04/18/2011

MarketMinder's View: S&P "cut the long-term United States debt rating to negative from stable. S&P also affirmed the government’s AAA rating." So really, nothing changed. Ratings agencies aren’t known for being terrifically accurate forecasters. And if the US isn’t AAA-worthy, who is? For more, see our 12/10/2010 cover story, "Dodd-Frank Says Ditch Fitch."

Market Misperceptions
By , The Washington Post, 04/18/2011

MarketMinder's View: We’d certainly agree society benefits when the path to prosperity is clear for all willing to take the risks necessary to achieve greater economic success. But then doesn’t raising tax rates on higher income brackets directly contradict and close off that accessibility? For more, see our 04/15/2011 cover story, "’Tis the Season."

Market Misperceptions
By , Reuters, 04/18/2011

MarketMinder's View: As we’ve said, free trade is a tremendous net benefit to all participants and has historically improved standards of living. France should be considering just the opposite of the ideas in this piece. For more, see our 04/07/2011 cover story, "A Triumph for Trade."

Market Misperceptions
By , The Christian Science Monitor, 04/18/2011

MarketMinder's View: While we agree a budget based on a 12-year plan is rather odd considering budgets are debated annually, that’s about where our agreement with this piece ends. We aren’t, in fact, in a recession anymore, and economic indicators globally remain overall expansionary.

Sensible Stories
By , The Wall Street Journal, 04/18/2011

MarketMinder's View: This examines an aspect of the tax system rarely considered: opportunity cost. Americans spend quite a bit of time and money attempting to lower their tax burden—resources undoubtedly better spent in more economically productive ways.

Sensible Stories
By , Barron’s, 04/18/2011

MarketMinder's View: We’re number two! In corporate tax rates, that is. This is an area where we wish we were ranked lower. Historically, it’s easy to see lower corporate tax rates are an incremental boost to competitiveness.

Sensible Stories
By , The New York Times, 04/18/2011

MarketMinder's View: This highly interesting graphic displays the rebound in global trade following the end of recession. While this is far from a complete view, the piece does highlight the recovery in world trade has been strong in many corners of the world.

Sensible Stories
By , Real Clear Markets, 04/18/2011

MarketMinder's View: "As policymakers rush to squeeze risk out of the market, they are squeezing the life out of the risk-takers—something no dynamic economy can do without." We disagree we’re at that point yet—far from it. But this is certainly the danger of over-regulation. Risk isn’t necessarily bad. Many folks are willing to take risk to get more return down the road. Remove all risk, and you remove all incentive to invest in innovation.

Market Misperceptions
By , MarketWatch, 04/15/2011

MarketMinder's View: First, market corrections are perfectly normal and to be expected during a bull market. Second, though there is a rational recognition of today’s positive fundamentals, this article also espouses some common market misperceptions—like looking toward technical analysis or calendar months for investing counsel.

Market Misperceptions
By , The Independent, 04/15/2011

MarketMinder's View: Sure, stock buybacks can improve the earnings-per-share ratio. But this isn’t a mystery. Firms have many legitimate reasons why they’d want to buy back shares. Banning share buybacks doesn’t seem like a wise course of action.

Market Misperceptions
By , Bloomberg, 04/15/2011

MarketMinder's View: Another credit rating agency confirming what the market already knows. For more, see our 12/10/2010 cover story, “Dodd-Frank Says Ditch Fitch.

Sensible Stories
By , The New York Times, 04/15/2011

MarketMinder's View: Tax reform will likely always remain political fodder. For more on taxes and politics, see today’s cover story, “’Tis the Season.

Sensible Stories
By , Bloomberg, 04/15/2011

MarketMinder's View: Runaway inflation is not yet a worry: Excluding increasing food and fuel prices (which are notoriously volatile anyway), CPI rose 0.1%—very tame.

Sensible Stories
By , Associated Press, 04/15/2011

MarketMinder's View: US manufacturing health continues to underpin economic growth.

Sensible Stories
By , Associated Press, 04/15/2011

MarketMinder's View: Portugal has sufficient funds to finance debt payments until June, when a bailout will likely be finalized.

Market Misperceptions
By , International Business Times, 04/14/2011

MarketMinder's View: The US dollar’s status asthe world’s dominant reserve currency won’t change any time soon, despite some folks’ fears the US’strade and budget deficits will debase the dollar. For more, see our 03/23/2011 cover story, “Top Dollar.”

Market Misperceptions
By , The New York Times, 04/14/2011

MarketMinder's View: Aaah! Just in time for tax day. Fact is, politicians seem to understand well that higher taxes are a disincentive when it comes to soda, gasoline, and cigarettes. Why don’t they get they’re also a disincentive on income-producing activity? Still, they can raise taxes all they want—it will never stop politicians from bickering over the budget.

Market Misperceptions
By , Reuters, 04/14/2011

MarketMinder's View: The wake of a catastrophe probably isn’t an ideal time for political posturing. But prime minister turnover in Japan is a relatively frequent event and won’t knock stocks. For more, see our 06/02/2010 cover story, “The Land of the Revolving Door.”

Market Misperceptions
By , The Telegraph, 04/14/2011

MarketMinder's View: The eurozone does have some issues to iron out. But at this point, weakness in Greece, Portugal, and Ireland are well documented. Any impending debt “maelstrom,” if it occurs at all, likely won’t surprise global stock markets in 2011. 

Market Misperceptions
By , Financial Times, 04/14/2011

MarketMinder's View: Investors should expect unemployment figures to continue to grab headlines, but shouldn’t expect weekly tallies to move continuously in one direction. Fluctuations are normal, and backward-looking unemployment tells little about the future direction of economies globally. For more, see our 03/03/2011 cover story, “Help Wanted?

Sensible Stories
By , Reuters, 04/14/2011

MarketMinder's View: We’d agree overstated inflation fears and the tragedy in Japan likely won’t stall the global economy. But we caution investors that a strong economy doesn’t always translate directly to strong broad index returns. For more on how headline-grabbing crises impact world stocks, see our 04/01/2011 cover story, “Don’t Fool Yourself.”

Sensible Stories
By , Reuters, 04/14/2011

MarketMinder's View: Inflation is likely to tick up slightly in the near term, but with ample economic slack—capacity not maxed out and unemployment elevated—inflation isn’t likely to be the headwind many fear in 2011.

Sensible Stories
By , The Wall Street Journal , 04/14/2011

MarketMinder's View: Based on the latest beige book, it appears likely the Fed will maintain its accommodative monetary policies—a positive for stocks. 

Sensible Stories
By , Associated Press, 04/14/2011

MarketMinder's View: The March increase in the Producer Price Index is likely a normal monthly fluctuation. With volatile energy costs stripped out, US wholesale prices rose just 0.3%—certainly not a harbinger of runaway prices.

Sensible Stories
By , Compliance Week, 04/14/2011

MarketMinder's View: The ramifications of the unwieldy Dodd-Frank act are yet to be fully understood; as such, several implementation deadlines have slid to December 2011. For more, see today’s cover story, “A Lesson in the Law of Unintended Consequences.”

Sensible Stories
By , Bloomberg, 04/13/2011

MarketMinder's View: “Sales at US retailers rose in March for a ninth consecutive month, easing concern that the jump in food and fuel costs would cause consumers to retrench.”

Sensible Stories
By , Café Hayek, 04/13/2011

MarketMinder's View: A sound look at the numbers behind the so-called wealth gap. The fact is, when you follow the same people over time as opposed to looking statically at income brackets, folks’ incomes are growing, and subsequent generations are experiencing higher living standards than their parents.

Sensible Stories
By , The Wall Street Journal, 04/13/2011

MarketMinder's View: This highlights well the unintended consequences misguided regulation can have on Main Street’s day-to-day operations: “If end users aren’t shielded, the rules ‘would have a very harmful effect on our risk-management of the business and for that matter ultimately the cost of a six-pack of beer.’”

Sensible Stories
By , The Wall Street Journal, 04/13/2011

MarketMinder's View: While many enjoy citing America’s decline based on a selective view of their favorite statistic (GDP, demographics, military spending, etc.), the reality is the picture’s much more complex than that. When viewed in total, America’s decline is not only not imminent, it isn’t happening.

Sensible Stories
By , The Australian, 04/13/2011

MarketMinder's View: Just as in the US, the effects of massive Australian government spending are debatable. And given the huge mining boom has been tied more to the effects of Emerging Markets’ demand than government spending, the need for such spending is also questionable.

Market Misperceptions
By , The Washington Post, 04/13/2011

MarketMinder's View: First, we’re already in expansion and past recovery. Second, given retail sales recently rose for the ninth straight month, extending those fears to decreased consumption is likely misguided.

Market Misperceptions
By , BNet, 04/13/2011

MarketMinder's View: Plans like these have multiple problems, including the likelihood the number of millionaires suddenly and significantly drops the year following the tax increases’ imposition. Moreover, discouraging high earners from producing hardly seems a long-term solution to the government’s budget shortfall.

Market Misperceptions
By , The New York Times, 04/13/2011

MarketMinder's View: Allowing government agencies to “recover the last two years of compensation from any ‘current or former senior executive or director substantially responsible for the failed condition’ of the institution” strikes us as a terribly slippery slope. Who determines “substantial responsibility”? Who sets the level of “requisite skill and care required”? Why not instead allow the free market to operate and doom unprofitable or unscrupulous businesses to failure on its own?

Market Misperceptions
By , The New York Times, 04/13/2011

MarketMinder's View: Attempting to fine foreign financial institutions is hardly likely to garner international goodwill toward US customers. Here’s a better idea: Reform the US tax code such that domestic high earners and corporations are incentivized to keep funds in the US instead.

Market Misperceptions
By , The Independent, 04/12/2011

MarketMinder's View: Default fears aren’t terribly valid—especially when they’re underpinned by ridiculously long-term projections of debt performance that isn’t even really debt, like unfunded (or underfunded) liabilities.

Market Misperceptions
By , Reuters, 04/12/2011

MarketMinder's View: Trade data, like any other statistic, can vary from month-to-month. The overall trade picture is one of improvement—especially when looking at global trade levels. For more, see today’s cover story, “The Totality of Trade.

Market Misperceptions
By , Zero Hedge, 04/12/2011

MarketMinder's View:  The article claims China is abandoning the US dollar in favor of buying Spanish debt. However, China continues to be a major consumer of US debt. And the fact they are also interested in Spanish debt is good, not bad. Shows not all is problematic for the PIIGS.

Market Misperceptions
By , The Wall Street Journal , 04/12/2011

MarketMinder's View: Confidence and optimism indexes are typically backward-looking and not useful in shaping forward-looking expectations. For example, although the optimism index fell in March, the report also showed small business owners still plan to add jobs and increase prices on account of depleting inventory levels (showing strong consumer demand).

Sensible Stories
By , International Business Times, 04/12/2011

MarketMinder's View: Employment gains historically lag economic recovery, but expect data to improve as we continue further into expansion. For more, see our 01/10/2011 cover story, “A Tale of Two Unemployment Rates.”

Sensible Stories
By , Bloomberg, 04/12/2011

MarketMinder's View: Transportation indexes reflect economic strength as businesses seek to move goods in response to rising demand and production.

Sensible Stories
By , Associated Press, 04/12/2011

MarketMinder's View: Emerging Markets central banks continue to demonstrate measured monetary policy.

Sensible Stories
By , Associated Press, 04/12/2011

MarketMinder's View: From an economic standpoint, the impact of the Japanese disasters is likely to be mostly localized and fleeting. Further, though IMF forecasts should be taken with a grain of salt, projections still call for economic growth.

Sensible Stories
By , Associated Press, 04/12/2011

MarketMinder's View: From an economic standpoint, the impact of the Japanese disasters is likely to be mostly localized and fleeting. Further, though IMF forecasts should be taken with a grain of salt, projections still call for economic growth.

Market Misperceptions
By , The Wall Street Journal, 04/11/2011

MarketMinder's View: P/E ratios alone aren’t terribly predictive of future market direction. Additionally, discussion of Shiller’s smoothed P/E ratio layers a misperception on a misperception. The flaw with Shiller’s method is its core: It attempts to smooth earnings (which, by their very nature, aren’t smooth) by blending earnings from years ago with current data. But what a company earned 10 years ago has absolutely no bearing on current earnings, stock prices, revenues—or anything else, for that matter.

Market Misperceptions
By , The Wall Street Journal, 04/11/2011

MarketMinder's View: Again, trade surpluses or deficits aren’t very telling about economic health. More important is total trade—and in March, China’s exports rose 35.8% year-over-year and imports rose 27.3%, which shows rapidly growing total trade.

Market Misperceptions
By , Fox Business, 04/11/2011

MarketMinder's View: The US trade deficit isn’t squeezing anything. Imports do not detract from true economic activity, and focusing on relative trade levels (imports vs. exports) is a flawed measure of economic health.

Market Misperceptions
By , Dr. Ed’s Blog, 04/11/2011

MarketMinder's View: While we agree investors are more bullish today than they were in the past two years, we’re a far cry from being at the worrisome point where bullish sentiment euphorically overlooks fundamentals.

Market Misperceptions
By , The New Republic, 04/11/2011

MarketMinder's View: The wealth gap might be a big story politically (because it’s a political invention), but it has little (if any) meaning in a truly economic sense.

Sensible Stories
By , The Economist, 04/11/2011

MarketMinder's View: "At the eleventh hour (literally)," Congress struck a deal to avert a government shutdown. While this debate is now over, it seems we have more heated rhetoric ahead involving broader budget issues and the debt ceiling. For more, see today’s cover story, "Shutdown Charade."

Sensible Stories
By , The Independent, 04/11/2011

MarketMinder's View: Regulatory headwinds continue to blow against the financial sector. While UK regulators will apparently stop short of recommending splitting investment banking from retail banking, they are proposing more stringent capital buffers and other regulatory tweaks.

Sensible Stories
By , The Los Angeles Times, 04/11/2011

MarketMinder's View: While economic fundamentals remain strong in the Emerging Markets as a whole, this fact is becoming far more widely known, and thus, already reflected in stock prices. Emerging Markets’ expansion likely continues strongly ahead, but don’t be surprised if this doesn’t translate to blanket category outperformance.

Sensible Stories
By , The Wall Street Journal, 04/11/2011

MarketMinder's View: While we don’t agree with this article in its entirety, the author’s discussion of age-based allocation’s flaws is quite sensible. For more, see our 03/28/2011 cover story, “A Long Road Gets Longer.”

Sensible Stories
By , The Wall Street Journal, 04/11/2011

MarketMinder's View: The market for much-maligned securitized mortgage debt has improved in recent quarters, highlighting the fact “toxic” assets were not nearly as poisonous as thought in 2008. For more, see our 03/22/2011 cover story, “Who Loves Toxic Waste?”

Market Misperceptions
By , Fortune, 04/08/2011

MarketMinder's View: Au contraire. As businesses save money in taxes, their capital is frequently freed to be spent elsewhere—be it jobs, IT improvements, M&A, etc.—which can benefit the economy overall.

Market Misperceptions
By , CNBC, 04/08/2011

MarketMinder's View: It seems gold bugs always think gold is cheap, no matter the price. Simply, though, gold is a commodity—no different than oil or soy—and the metal’s long-term return has lagged that of stocks over time.

Market Misperceptions
By , The New York Times, 04/08/2011

MarketMinder's View: Actually, more than just companies stand to gain. There’s a reason why states offer incentives to businesses—they generate jobs, tax revenue, and can add to consumption. We fail to see how this is bad.

Sensible Stories
By , CNN Money, 04/08/2011

MarketMinder's View: Politicians are doing what they do best—grandstanding and saber-rattling. In the meantime, investors needn’t worry about a government shutdown—it’s happened before and markets did just fine. For more, see our 04/06/2011 cover story, “An Impasse Comes to Pass.

Sensible Stories
By , Carpe Diem, 04/08/2011

MarketMinder's View: Data continue to point to US economic growth.

Sensible Stories
By , The Wall Street Journal, 04/08/2011

MarketMinder's View: Though the PIIGS continue to struggle (and make headlines), Germany—Europe’s largest economy—continues to grow economically.

Sensible Stories
By , Real Clear Markets, 04/08/2011

MarketMinder's View: Here’s a good look at why economic statistics are often flawed—and should be treated with a critical eye.

Sensible Stories
By , Reuters, 04/08/2011

MarketMinder's View: In the long term, the eurozone still has real issues to resolve. But for now, EU leaders are doing what’s necessary to underpin the stability of the euro and eurozone members. For more, see today’s cover story, “Iberian Bailout.

Market Misperceptions
By , CNBC, 04/07/2011

MarketMinder's View: While most can agree entitlement reform’s necessary long term, we’re hardly destined to become the next PIIGS member without it. For more, see our 02/02/2011 cover story, “That Four-Letter Word.

Market Misperceptions
By , Reuters, 04/07/2011

MarketMinder's View: “It is a simple fact that every dollar less in government expenditure is a dollar less received by the private sector.” Maybe, but to arrive at that conclusion requires some serious mental acrobatics. We’d propose an alternative: Let people keep their dollar in the first place, and they can spend it as they choose.

Market Misperceptions
By , Bloomberg, 04/07/2011

MarketMinder's View: Contrary to what many believe, US federal debt levels, though elevated, aren’t currently problematic—because the cost to pay for that debt is so low. For more, see our 03/07/2011 cover story, “A Welcome, Yet Flawed Addition.”

Market Misperceptions
By , Associated Press, 04/07/2011

MarketMinder's View: With all the recent strong data on the US economy, we’re puzzled by the conclusions reached here. Oil prices alone seem quite unlikely to outweigh other extant positives.

Sensible Stories
By , Time, 04/07/2011

MarketMinder's View: This is a sensible look at potential economic and market impacts of a government shutdown—which, if it occurs, seems unlikely to move markets much. For more, see our 04/06/2011 cover story, “An Impasse Comes to Pass.

      

Sensible Stories
By , The Wall Street Journal, 04/07/2011

MarketMinder's View: “Spain successfully sold €4.13 billion ($5.92 billion) of a new three-year bond offering at an auction Thursday, in another indication that the country is dodging contagion from the financially-stressed eurozone countries.”

Sensible Stories
By , Washington Post, 04/07/2011

MarketMinder's View: Freer trade is beneficial to both American businesses and consumers. For more, see today’s cover story, “A Triumph for Trade.

Sensible Stories
By , American Thinker, 04/07/2011

MarketMinder's View: “Businesses should follow the rules, but the rules must make sense.” Exactly. And needless regulation can add unnecessary and costly burdens to businesses, hampering their ability to compete both domestically and globally.

Sensible Stories
By , Associated Press, 04/07/2011

MarketMinder's View: “Global markets were unfazed Thursday by the European Central Bank’s first interest rate increase in nearly three years and Portugal’s request for a bailout”—because both were largely expected. Markets are discounters of widely known information—it’s the big surprises that move them more.

Market Misperceptions
By , The Wall Street Journal , 04/06/2011

MarketMinder's View: Amid high political drama, Portugal met funding needs in the near term, though at elevated rates. Portugal’s troubles are real, but likely won’t kindle a wider debt contagion in the near term, thanks to the massive eurozone bailout in place. For more, see our 03/24/2011 cover story, “Portugal’s Socratic Method.”

Market Misperceptions
By , The Telegraph , 04/06/2011

MarketMinder's View: Many believe gold is an investing safe haven, but in fact it’s just a commodity like soybean oil, lean hogs, or coffee—whose prices are all driven by supply and demand. For more, see our 01/14/2011 column, “An Overview of Gold.”

Market Misperceptions
By , CNBC, 04/06/2011

MarketMinder's View: Anything’s possible, but strong first quarters tend to lead to positive years for stocks—heightening the probability 2011 won’t be worse than 2008.

Market Misperceptions
By , The Christian Science Monitor, 04/06/2011

MarketMinder's View: We beg to differ. Vast data show raising taxes actually reduces tax receipts as folks find ways to keep more money in their pockets and out of the government’s.

Market Misperceptions
By , Bloomberg, 04/06/2011

MarketMinder's View: Ignore the forbidding headline. It would be impossible for UK manufacturing to maintain a blistering pace indefinitely. This likely reflects normal month-to-month volatility.

Sensible Stories
By , Reuters, 04/06/2011

MarketMinder's View: US politicians will likely come to an agreement about the federal budget, but if they don’t, it wouldn’t be the first time. The US government shut down in 1995 and 1996, and both were fine years for stocks and the economy. For more, see today’s cover story, “An Impasse Comes to Pass.”

Sensible Stories
By , The Wall Street Journal , 04/06/2011

MarketMinder's View: The US and Colombia are set to finalize details of a long-awaited trade agreement—moving forward with approving FTAs is a positive for both nations.

Sensible Stories
By , BBC, 04/06/2011

MarketMinder's View: It’s not all bad news on the Iberian Peninsula: “Spain has no need of an international financial rescue,” according the head of the International Monetary Fund.

Market Misperceptions
By , The Christian Science Monitor, 04/05/2011

MarketMinder's View: The five “shocks” listed here hardly have much shock value anymore. Mainstream media has underscored most of these fears for several quarters running now. Absent materially new developments, markets have largely priced in these risks. For more, see our 04/01/2011 cover story, “Don’t Fool Yourself.”

Market Misperceptions
By , The Guardian, 04/05/2011

MarketMinder's View: This article is fine—it’s the commentary of Dominique Strauss-Kahn, the IMF chief, quoted in this piece that’s likely vastly over done. For more, see our 03/17/2010 cover story, “Black Swans or Gray Pigeons?”

Market Misperceptions
By , The Washington Post, 04/05/2011

MarketMinder's View: Signs of inflation this year are due more to volatile commodities prices than to broader price pressures. Further, this article also understates the current strength of the US economy.

Market Misperceptions
By , BBC, 04/05/2011

MarketMinder's View: We’ve said it before and we’ll say it again: Ratings agencies continue to play catch-up and have simply confirmed what is already well known. For more, see our 03/21/2011 cover story, “Portugal’s Socratic Method.”

Sensible Stories
By , The New York Times, 04/05/2011

MarketMinder's View: Economic forecasts are starting to catch up to what the market, a discounter of future economic conditions, already forecast some time ago. For more, see our 03/02/2011 cover story, “America Express.”

Sensible Stories
By , Café Hayek, 04/05/2011

MarketMinder's View: Freer trade is always good, but it should be measured in the aggregate consumption of goods across economies, not simply by looking to exports.

Sensible Stories
By , The Wall Street Journal, 04/05/2011

MarketMinder's View: Mergers and acquisitions activity has increased lately—speaking to increased business confidence in the economic recovery. This is just one of many ways corporations are putting huge cash reserves to work.

Sensible Stories
By , Bloomberg, 04/05/2011

MarketMinder's View: China’s rate increase today is another example of the prudent actions taken by their central bank in an attempt to stymie inflation.

Market Misperceptions
By , Vanity Fair, 04/04/2011

MarketMinder's View: Discussion of the US "wealth gap" is an entirely political invention with little real economic meaning. Few people make economic decisions (whether to buy product X or not) based on a relative assessment of their wealth versus the top 1% in the country, and the composition of those at the upper end of the US income spectrum isn’t set in stone—it’s fluid. And please—comparing the US to Egypt, Tunisia, Libya, Yemen, and Bahrain? That’s simply absurd.

Market Misperceptions
By , The Telegraph, 04/04/2011

MarketMinder's View: While one might argue US central bank policy has been a tailwind to growth the past few years, this alone doesn’t account for the massive growth in corporate profits, world trade at an all-time high, US GDP that has fully recovered, and many more facts. This is far too simplistic and narrow a view of the world.

Market Misperceptions
By , The New York Times, 04/04/2011

MarketMinder's View: "It stands to reason that government spending, job-creation programs and regulations to ensure that there isn’t another crash would help the economy and lead to more jobs." We have only one question: When has the government alone created enough jobs to bring about full employment? And moreover, those who are confident the government can regulate risk out of the economy are simply fooling themselves—and misunderstanding the role government played in 2008’s financial crisis. 

Market Misperceptions
By , The Wall Street Journal, 04/04/2011

MarketMinder's View: While we certainly feel for those negatively impacted by the current low yields of CDs and savings accounts, we must say this seems more like a misdiagnosis. The problems here weren’t and aren’t being created by the Fed; rather, they’re more likely generated through asset allocation errors.

Sensible Stories
By , Bloomberg, 04/04/2011

MarketMinder's View: This is an interesting look at recent US corporate profit growth. US stocks had an excellent run since March 9, 2009, but corporate profits have recovered far stronger. While it would not be surprising to see the rate of profit growth cool ahead, this is one of many data points that helps put the market recovery thus far into context.

Sensible Stories
By , The Christian Science Monitor, 04/04/2011

MarketMinder's View: We usually object to oversimplified, rule-based methods of examining the economy. But the two points highlighted here provide a sensible view of the government’s interaction with the broader economy.

Sensible Stories
By , The Wall Street Journal, 04/04/2011

MarketMinder's View: Mutual funds are a fine choice for some investors, but they have their drawbacks too. Here’s a sensible look at five things investors should learn if considering using mutual funds.

Sensible Stories
By , Carpe Diem, 04/04/2011

MarketMinder's View: "As a direct consequence of our current account deficits, the US economy has been the beneficiary of more than $8 trillion worth of capital inflows from foreigners since 1980." Exactly. And another reason not to fret the US "trade deficit."

Sensible Stories
By , Bloomberg, 04/04/2011

MarketMinder's View: While the title of this story is rather befuddling, the article itself is a sensible take on foreign investment in US government bonds.

Market Misperceptions
By , Bloomberg, 04/01/2011

MarketMinder's View: As we’ve said, unemployment is typically a lagging indicator and shouldn’t forestall growth. The US economy has been recovering steadily and is now in growth mode—all while unemployment has been elevated. For more, see our 01/10/2011 cover story, “A Tale of Two Unemployment Rates.

Market Misperceptions
By , The Atlantic, 04/01/2011

MarketMinder's View:  While no one likes paying higher prices at the pump, the US economy has grown just fine amid elevated gas prices. For more, see our 02/24/2011 cover story, “Oil’s Ominous Overhang.

Market Misperceptions
By , The New York Times, 04/01/2011

MarketMinder's View: Housing played less of a role in the last recession than this article would have you believe—the misguided financial rule FAS 157 was actually more of a problem. For more, see our 03/17/2010 cover story, “On the Watch.

Market Misperceptions
By , Reuters, 04/01/2011

MarketMinder's View: The ratings agencies are playing catch-up again, simply confirming what is already well known. The eurozone will likely continue to see weaker nations struggling aside stronger ones for the near term. For more, see our 12/10/2010 cover story, “Dodd-Frank Says Ditch Fitch.” 

Sensible Stories
By , Associated Press, 04/01/2011

MarketMinder's View:  With firms reporting healthy profits for several quarters and sitting on huge stockpiles of cash, it’s not too surprising they’re starting to spend it—and dividends are just one way of putting that money to use. For more, see our 03/29/2011 cover story, “Profits Prove Positive.

Sensible Stories
By , Associated Press, 04/01/2011

MarketMinder's View: Employment numbers, a lagging economic indicator, continue to show steady improvement.

Sensible Stories
By , The Wall Street Journal, 04/01/2011

MarketMinder's View:  Emerging markets led the way out of the global recession and continue to show strong growth despite fears inflation-fighting measures would curb growth—good news for the global economy.

Sensible Stories
By , Bloomberg, 04/01/2011

MarketMinder's View: Another sign the US economy is growing quite nicely.