Home → Fisher Investments MarketMinder Headlines → 05-2011 Archives

Market Misperceptions
By , Associated Press, 05/31/2011

MarketMinder's View: Economic recoveries often don’t move in a straight line upward (or downward)—and that’s all this latest housing data tells us.  With housing in particular, it will take some time for supply and demand imbalances to self-correct and home prices to rebound.

Market Misperceptions
By , Associated Press, 05/31/2011

MarketMinder's View: As we’ve said numerous times before, consumer confidence results are backward looking and say nothing about the future direction of the market or economy. Ignore.

Market Misperceptions
By , The New York Times, 05/31/2011

MarketMinder's View: In our view, the author inappropriately compares tax revenues by showing them as a percent of each country’s GDP. Fact is, the United States has the highest corporate tax rates of any OECD country. Easing these tax burdens promotes repatriation of foreign holdings and more productive use of this capital—like greater business investment, new job opportunities and dividend paybacks for investors.

Sensible Stories
By , Bloomberg, 05/31/2011

MarketMinder's View: “Debt limit battles tend to be dangerous and demagogic. Mainly, though, they are unnecessary: The limit itself has no plausible rationale and should be done away with. At best, it’s an anachronistic contrivance; at worst, it’s a crude instrument for budgetary theatrics, which only hurt taxpayers in the end.” Well said. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”

Sensible Stories
By , The Wall Street Journal, 05/31/2011

MarketMinder's View: It’s true, many companies have sizeable amounts of cash on balance sheets. But at some point, these companies likely will want to do something with this currently unproductive capital—like hire, spend on new equipment, acquire competitors, launch new product lines, R&D, pay dividends, etc. All of this is ongoing fuel for rising stock prices.

Sensible Stories
By , BBC, 05/31/2011

MarketMinder's View: Europe’s two-speed recovery continues. Core Europe continues to post improving economic data, while the European periphery continues to show a sluggish economic recovery. Even within the weaker periphery, the issues aren’t uniform. Expect this to continue for some time to come.  For more, see our 05/24/2011 cover story, “Indebted Europe.”

Sensible Stories
By , The Economist, 05/31/2011

MarketMinder's View: Ignore the title—this looks at the options left for Greece. Something to take away: Greece does have options. For more, see our 05/10/2011 cover story, “Rumors and Bailouts.”

Market Misperceptions
By , The New York Times, 05/27/2011

MarketMinder's View: An overly dour take on current economic conditions. While some economic data have been showing moderating growth, positive growth doesn’t equal getting worse. Corporate profits and GDP growth have been positive for several quarters straight, and even the much-maligned job market has shown improvement.

Market Misperceptions
By , The Wall Street Journal, 05/27/2011

MarketMinder's View: It likely isn’t a good idea to give too much credit to month-to-month numbers—they fluctuate greatly. A more meaningful time frame shows the US economy has been doing fine, and consumer spending has also been on the uptrend overall.

Market Misperceptions
By , The New York Times, 05/27/2011

MarketMinder's View: The problem with analyses seeking to compare the effects of the 2001 and 2003 tax cuts on the deficit is it isn’t so simple as changing tax rates. Tax policy can and does influence broader economic activity—which comparisons like this can’t account for because there’s no comparative data set. Moreover, tax rates have historically fluctuated in the US, yet tax revenue is remarkably consistent. For more, see our 04/15/2011 cover story, “’Tis the Season.

Market Misperceptions
By , Time, 05/27/2011

MarketMinder's View: This seems mostly like an extension of banker bashing. Claims of a wave of deregulation leading to the 2008’s crisis—driven by lobbying—are largely overblown. It’s more accurate to say changing regulation contributed to the financial crisis. For more, see our 05/16/2011 cover story, “Marking to Footnote.”

Sensible Stories
By , CBS MoneyWatch, 05/27/2011

MarketMinder's View: Technical indicators and charts are a decent reflection of recent past market movement and can be helpful in illustrating a point, but aren’t very useful in making forecasts about market direction. For more, see our 10/18/2010 cover story, “A Recent History of Technical Analysis’ Recent History Lessons.

Sensible Stories
By , Financial Post, 05/27/2011

MarketMinder's View: “Human ingenuity is creating cheaper alternatives, or finding ways to increase the supply, both of which ease shortages.” A very sensible take explaining why fears of total resource depletion are quite overblown. For more, see our 05/05/2011 column, “A Common Thread Between Horse Manure and Peak Oil.”

Sensible Stories
By , Carpe Diem, 05/27/2011

MarketMinder's View:  An important data point illustrating improved bank health in recent quarters, the FDIC reported member-bank profits have rebounded nicely. That’s a plus economically—but for bank stocks specifically, it doesn’t tell the full story. For more, see our 05/04/2011 cover story, “Mending Lending.”

Market Misperceptions
By , The Wall Street Journal, 05/26/2011

MarketMinder's View: Yes, manufacturing growth has shown some slowing in recent data, but that needn’t spell economic doom for the US. Growth rates are hardly ever constant—frequently decelerating only to reaccelerate later. Moreover, whatever manufacturing is doing doesn’t prevent other industries from taking up the slack.

Market Misperceptions
By , Time, 05/26/2011

MarketMinder's View: We’d largely agree TARP wasn’t the best-informed policy and didn’t really address the true causes of 2008’s financial crisis. But we’d suggest the problem was with the idea as a whole, not just with its structure. Claims that TARP "definitely did make the financial crisis and the recession much less worse than it could have been" are a stretch. For starters, there’s no counterfactual, so how can you know? For more, see our 01/25/2011 cover story, "Not-So-Toxic TARP."

Market Misperceptions
By , The New York Times, 05/26/2011

MarketMinder's View: "…These estimates now suggest that we have now gone through a year and a half of 'recovery' that has failed to make any progress toward closing the gap between what the economy should be producing and what it’s actually producing." Forgive us, but we’re unaware of any figures indicating what the US should be producing. Moreover, we already went through recovery—the US is now in expansion. In Q1 2011, US and global economic growth continued—which doesn’t allude to the US being poised on brink of a depression.

Market Misperceptions
By , Moneynews.com, 05/26/2011

MarketMinder's View: We’d agree slowing the growth of deficits and debt isn’t a bad idea. But to suggest the US is in worse shape than Italy and Spain is quite a stretch. And we’re curious: Exactly what metrics are contained in the "new Comeback America index?"

Sensible Stories
By , The Wall Street Journal, 05/26/2011

MarketMinder's View: Recent economic data has shown some short-term moderation, but most indicators point to continued US economic growth. Aside from being slower than many would like, it’s hard to hate overall positive numbers. For more, see our 04/29/2011 cover story, "Not Running on Empty."

Sensible Stories
By , EUbusiness, 05/26/2011

MarketMinder's View: "The European Union and Japan look set to agree on the principle of negotiating a free trade deal linking the world’s third economy and the leading global market at a summit Saturday, diplomats say"—admittedly a far cry from an actual deal, but a step in the right direction nonetheless. For more, see our 05/06/2011 cover story, "A Torrent of Free Trade."

Sensible Stories
By , Carpe Diem, 05/26/2011

MarketMinder's View: As we’ve said before, tariffs typically create market distortions, which frequently harm those they were intended to protect. Though (as is somewhat common), markets can find a way around such limitations, in this case to US consumers’ benefit—the invisible hand at work.

Sensible Stories
By , The Washington Post, 05/26/2011

MarketMinder's View: An encouraging notion, and one we’d heartily support. But as we’ve said, when it comes to politicians, watch what they do, not what they say. 

Sensible Stories
By , The Wall Street Journal, 05/25/2011

MarketMinder's View: The much-hyped muni default debacle still hasn’t materialized (there were only 12 defaults in Q1—as opposed to the hundreds many feared). And with Q1 tax revenue growing 9.1% on average for the 47 states who’ve reported data, states look to continue the trend closing funding gaps. For more, see our 05/19/2011 cover story, “Attack of the Muni Monsters.”

Sensible Stories
By , Reuters , 05/25/2011

MarketMinder's View: Global growth should continue despite the threats cited by the OECD. And the US is likely to continue growing fine this year. Keep in mind, the OECD is not an infallible forecasting organization. But this underscores ongoing overall global economic health.

Sensible Stories
By , Associated Press, 05/25/2011

MarketMinder's View: Amid a fresh round of PIIGS fears, Greek PM George Papandreou reaffirmed his commitment to reforms. Greece faces some difficult decisions, and investors shouldn’t be surprised if this contributes to some market volatility in the near term. For more, see our 05/24/2011 cover story, “Indebted Europe.”

Sensible Stories
By , The Wall Street Journal, 05/25/2011

MarketMinder's View: Treasury Secretary Geithner correctly dismissed a House vote on the debt ceiling that is expected to fail as political theater. Congress has raised the debt ceiling more than 90 times before and likely will again later this summer. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”

Market Misperceptions
By , The New York Times, 05/25/2011

MarketMinder's View: Well, actually, so goes housing, doesn’t necessarily go the economy. A housing recovery would provide a nice boost to ongoing economic expansion, but it isn’t required. For more, see today’s cover story, “A Headache Over Housing?

Market Misperceptions
By , Associated Press, 05/25/2011

MarketMinder's View: As Japan recovers from the calamitous earthquake, investors should expect less-than-rosy Japanese economic data for a time. However, overall, the world is growing fine, and Japan’s struggles shouldn’t be a material headwind. For more, see our 05/23/2011 cover story, “A Bump in the Road.”

Market Misperceptions
By , CNN Money, 05/25/2011

MarketMinder's View: We disagree there is a Custer-like “overconfidence bias pervading the stock market due to the expedited two-year move off the bottom.” It seems to us like there are still plenty of dug-in bears out there right now.

Market Misperceptions
By , The Wall Street Journal, 05/24/2011

MarketMinder's View: Keep in mind, “stagflation”—which has no official definition—usually means high inflation coupled with slow growth and/or high unemployment. Although unemployment is still elevated above historical averages, inflation hasn’t been problematic yet and remains below long-term averages, and US economic growth has been just fine. For more, see our 05/03/2011 cover story, “No Stagflation Nation.”

Market Misperceptions
By , International Business Times, 05/24/2011

MarketMinder's View: At best, ratings agencies continue to merely confirm what markets already know. No doubt Japan has a rough road to recovery ahead of it. But we don’t need a credit agency to tell us that. For more, see our 03/15/2011 cover story, “Japan’s Impact.”

Market Misperceptions
By , Reuters, 05/24/2011

MarketMinder's View: While certainly possible, we see near-term default as unlikely because it could undermine the stability of the euro—something members of the currency union have shown they will protect against, at least for the next few years. For more, see our 04/27/2011 cover story “Greek Theater.”

Sensible Stories
By , The Christian Science Monitor, 05/24/2011

MarketMinder's View: The wave of free trade agreements is a positive development for continued global expansion. Freer trade helps lift aggregate global trade levels. For more, see our 05/18/2011 cover story, “Make a Trade for Trade.”

Sensible Stories
By , CNN Money, 05/24/2011

MarketMinder's View: Rising home sale data show a generally improving picture. However, it’s a mistake to think this makes a trend, that it will necessarily continue, or that improvement in the housing sector is necessary to sustain US economic growth.

Sensible Stories
By , Federal Reserve Board of San Francisco, 05/24/2011

MarketMinder's View: This article takes a sensible look at the disconnect between consumer’s future inflation expectations and reality.

Market Misperceptions
By , The Wall Street Journal , 05/23/2011

MarketMinder's View: 

Bickering over an arbitrary—yes, arbitrary—debt ceiling is simply political bluster. Congress will likely raise the debt ceiling as they’ve done over 90 times before. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”

Market Misperceptions
By , The Wall Street Journal, 05/23/2011

MarketMinder's View: A stable exchange rate? We’re not sure how you do that outside of a peg or a heavily managed currency—and neither in our mind is anything close to ideal for a major currency.

Market Misperceptions
By , Reuters, 05/23/2011

MarketMinder's View: Make no mistake—the eurozone has work to do. But the risks to the euro are well known at this point. Plus, thanks to the sizable bailout in place, a disorderly dismantling of the euro just isn’t likely in 2011. For more, see our 05/10/2011 cover story, “Rumors and Bailouts.”

Sensible Stories
By , Carpe Diem, 05/23/2011

MarketMinder's View: Though we still face many economic uncertainties moving forward, the strong economic recovery to date for world trade and world output is encouraging and hopeful.  The fact that both world trade and world output are now 3-4% above their early recession peaks is clear evidence that the world economy has fully recovered from the Great Recession and financial crisis of 2008.” Too true.  

Sensible Stories
By , The Wall Street Journal, 05/23/2011

MarketMinder's View: Talks of a potential trade pact are on the table—while the details remain murky, this is a step in the right direction and shows the countries’ willingness to achieve closer economic ties.

Sensible Stories
By , The Motley Fool, 05/23/2011

MarketMinder's View: It’s true and we’ve said it here before: Far too many investors let their emotions get the best of them. History shows keeping emotions in check will, over time, lead to better results.

Sensible Stories
By , The Washington Post, 05/23/2011

MarketMinder's View: While we may not agree with everything here, the overall message is a correct one as “the recovery seems increasingly self-propelled.”

Sensible Stories
By , Associated Press, 05/23/2011

MarketMinder's View: Coming off another downgrade, Greece is looking to increase cuts even more as pressures mount, urging more steps be taken to overcome its deficit. Greece does have an ample backstop in place from the EU/IMF/ECB bailout, but it must get its house in order longer term.

Market Misperceptions
By , CNN Money, 05/20/2011

MarketMinder's View: Not even just a few weeks ago, fears were too-high gas prices would stall the economic recovery and plunge it back into recession. Now, falling gas prices might mean we’re fast heading toward another recession? This is whip-lash inducing.

Market Misperceptions
By , The Economist, 05/20/2011

MarketMinder's View: Bubbles are devilishly tough to forecast. But on Tech, this one seems a bit far-fetched at the moment, since the firms folks are worried about being overvalued are mostly not even public yet! See today’s cover story, “What Bubble Hunters Miss,” for more.

Market Misperceptions
By , Reuters, 05/20/2011

MarketMinder's View: Another day, another rating cut. As we’ve said before, credit ratings agencies merely confirm what the markets mostly already know. No doubt, Greece faces a rough road. But we don’t need a credit agency to tell us that. For more, see our 12/10/2010 cover story, “Dodd-Frank Says Ditch Fitch.”

Sensible Stories
By , Carpe Diem, 05/20/2011

MarketMinder's View: This article shows clearly the benefits of global trade—we Americans have “probably saved many millions, if not billions of dollars.”

Sensible Stories
By , The Wall Street Journal, 05/20/2011

MarketMinder's View: While recovery (economic and otherwise) doesn’t happen in lockstep, the positive news is that jobs numbers are slowly improving—as expected, since unemployment numbers typically lag stock market and economic recoveries.

Sensible Stories
By , Associated Press, 05/20/2011

MarketMinder's View: Given Japan’s slow growth prospects, this seems like no surprise. Though nations moved in lockstep to flood the world with liquidity during the 2008 credit crisis and after, the exits will depend very much on more local conditions.

Market Misperceptions
By , The Christian Science Monitor, 05/19/2011

MarketMinder's View: US history is filled with changing rates on the top bracket (and lower levels), yet tax revenue is a remarkably constant figure hovering around 19% of GDP. Taxes do seem to change behavior, which can impact taxable activity. That means higher rates do not necessarily equate to higher tax revenues.

Market Misperceptions
By , MarketWatch, 05/19/2011

MarketMinder's View: “Sell in May and go away is sort of underway. I hate these old adages, because I look at fundamentals, but when hedge funds are up 8% to 9% in April, maybe it makes sense to take the summer off and come back in the fall.” Well, we beg to differ. For more, see our 05/02/2011 cover story, “April Showers Bring May Myths.

Market Misperceptions
By , The Wall Street Journal, 05/19/2011

MarketMinder's View: Pssst: We already have it—without government’s heavy hand.

Market Misperceptions
By , Associated Press, 05/19/2011

MarketMinder's View: Yes, Japan has faced tumultuous times of late, and its economy took a hit. But, though a decent-sized single economy, its impact on global growth is rather small. Further, Japan has experienced slow growth for years without much harming the world. For more, see our 03/15/2011 cover story, “Japan’s Impact.”

Sensible Stories
By , Reuters, 05/19/2011

MarketMinder's View: Eurozone nations continue to work toward preventing outright default in its weaker members.

Sensible Stories
By , Bloomberg, 05/19/2011

MarketMinder's View: Jobless claims dipped more than expected—more evidence of ongoing recovery bleeding eventually into job growth.

Sensible Stories
By , Carpe Diem, 05/19/2011

MarketMinder's View: Why does corn matter so much? Because frequently, pundits panic that some finite resource will become scarce in the future, imperiling the economy, humanity, etc. But this frequently ignores the impact of increasing productivity and human ingenuity.

Sensible Stories
By , The Telegraph , 05/19/2011

MarketMinder's View: UK retail sales are up—part of a global trend of rising consumer spending.

Market Misperceptions
By , Associated Press, 05/18/2011

MarketMinder's View: Drama surrounding the debt ceiling—which is a more a political than fiscal issue—is in full swing. But despite all the hot air coming from both sides of the aisle, Congress will likely raise the debt ceiling, something it’s done more than 90 times previously. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”

Market Misperceptions
By , Time, 05/18/2011

MarketMinder's View: Dramatic perp walk and tales of having his own wing at Rikers Island aside, the DSK mess should have no impact on the dollar or global capital markets.

Market Misperceptions
By , The New York Times, 05/18/2011

MarketMinder's View: A housing turnaround would provide a nice tailwind for continued economic expansion, but it’s not a necessary ingredient. For more, see our 01/20/2011 cover story, “Ho Hum Housing.”

Market Misperceptions
By , The Chicago Tribune , 05/18/2011

MarketMinder's View: There’s always worry about what’ll be next to tank markets. But investors waiting for a mythical “all clear” signal risk missing the upside of stock investing—which is historically stronger and more lasting than negativity. For more, see our 10/27/2010 cover story, “All Is Never Well.”

Sensible Stories
By , The Street, 05/18/2011

MarketMinder's View: “Banks continue to be a lovely target for a political class that blames everyone but themselves for the financial crisis.” Then the same blame-shunning politicians try to “fix” things by enacting poorly conceived legislation. For more, see our 04/14/2011 cover story, “A Lesson in the Law of Unintended Consequences.”

Sensible Stories
By , The Telegraph , 05/18/2011

MarketMinder's View: Amid “mixed signals from indicators,” the BOE kept interest rates unchanged—a stance that seems reasonable to us for now, but could easily change in the months ahead. 

Sensible Stories
By , The Wall Street Journal, 05/18/2011

MarketMinder's View: “The Securities and Exchange Commission is set to propose a package of regulations on Wednesday that proponents say would stop credit-rating firms from providing inflated opinions to get repeat business.” Well, this sounds good in theory. But the proof is in the pudding: How will they effectuate such a thing and will it have negative unintended consequences?

Sensible Stories
By , Bloomberg, 05/18/2011

MarketMinder's View: Chile is proving nations and markets are more resilient than many believe after a natural disaster: “Chile’s economy expanded the most in 15 years in the first quarter, outpacing other major Latin American economies as consumer spending jumped and manufacturing recovered from the biggest earthquake in half a century.”

Sensible Stories
By , Café Hayek, 05/18/2011

MarketMinder's View: “Fact is, the only thing unique about international trade is its ability to be demagogued by politicians seeking votes from the economically uninformed.” We couldn’t agree more. For more, see today’s cover story, “Make a Trade for Trade.

Market Misperceptions
By , The Washington Post, 05/17/2011

MarketMinder's View: In the history of the debt ceiling, Congress has never once declined to lift it. Expect political posturing, which is overwhelmingly likely to be followed by a higher ceiling. Moreover, claims of a US default if it isn’t lifted are likely overstating the case. For more, see today’s cover story, “Breaking the Debt Ceiling.”

Market Misperceptions
By , Associated Press, 05/17/2011

MarketMinder's View: Housing continues to be a weak spot in the US economy, but that isn’t new news, and housing’s influence on the economy and markets isn’t nearly so big as many believe.

Market Misperceptions
By , The Associated Press, 05/17/2011

MarketMinder's View: Yes, shortages in Japanese auto parts weighed on US industrial production. But despite the headline’s claim of a “drop,” US industrial production grew in April—just at a slower rate than in March. As for Japan’s impact, that’s likely temporary.

Market Misperceptions
By , MarketWatch, 05/17/2011

MarketMinder's View: This article disregards two years of bull market and multiple quarters of positive economic data (which continue today) and chooses to focus on recent, fleeting events. Yes, “the scares keep coming”—which is typical of a bull market (thus the old adage that “bull markets climb a wall of worry”). The issues the author calls “panics” are really more like transitory bricks in the wall that likely lack the power to derail the strong global expansion.

Sensible Stories
By , Seeking Alpha, 05/17/2011

MarketMinder's View: Quantitative easing may have had some spillover effects for markets short term, but those who believe QE2 is solely responsible for the upturn in stocks since its announcement are missing some very important points. This article lays out one to consider.

Sensible Stories
By , American Thinker, 05/17/2011

MarketMinder's View: “The senators standing in front of the gas station would have you think (oil companies’) profit is the biggest chunk of your purchase price—but it isn't even close. The taxes on gasoline at retail amount to a national average of 47 cents per gallon (including federal taxes of 18 cents, state and local taxes of 18 cents, and sales/other taxes at retail of more than 10 cents).”

Sensible Stories
By , The Washington Post, 05/17/2011

MarketMinder's View: While we don’t fully agree with this article, the author’s discussion of the emotional tie between folks’ perception of what a “strong dollar” or “weak dollar” implies is on target. Currency market movements don’t mean a country with a “strong” currency is better than one with a “weak” currency.

Sensible Stories
By , The Wall Street Journal, 05/17/2011

MarketMinder's View: Recent widely discussed fears about a slew of municipal bond defaults have thus far proven less than accurate.

By , The Wall Street Journal, 05/17/2011

MarketMinder's View: 

Market Misperceptions
By , MoneyWatch, 05/16/2011

MarketMinder's View: This piece is based on a significant underlying assumptionthat whatever the debt ceiling debate’s outcome, economic growth depends on the government. We disagree. Political machinations over the debt ceiling could generate volatility in the near term, but economic growth ultimately lies primarily in private businesses’ hands, not the government’s.

Market Misperceptions
By , The Wall Street Journal, 05/16/2011

MarketMinder's View: Growth is rarely—if ever—uniform. That it’s currently slowed doesn’t tell you what it does next month, next quarter, or next year.

Market Misperceptions
By , The Christian Science Monitor, 05/16/2011

MarketMinder's View: Actually, Japan’s already recovering from its earthquake. While there may be bumps in the road, there’s little reason at this point to believe they’re headed for economic doom.

Market Misperceptions
By , Gold Scents, 05/16/2011

MarketMinder's View: Technical analysis + "secular" market theory = a story to ignore. If you’re an equity investor, waiting for all sectors to "confirm new highs" is a clear strategy for intentionally missing opportunity.  

Sensible Stories
By , 05/16/2011

MarketMinder's View: "Yields on 10-year Treasury notes have fallen from more than 3.7% in early February—when Fed officials and others began warning of catastrophic consequences if the debt limit was breached—to below 3.2%." These lower yields don’t seem to indicate panicked bond investors. In fact, they seem far more indicative that debt-ceiling disaster talk is overblown.

Sensible Stories
By , Carpe Diem, 05/16/2011

MarketMinder's View: A sound explanation of speculators’ role in smoothing markets. To accuse them of making money at the price of extreme market volatility is a dubious claim.

Sensible Stories
By , Bloomberg, 05/16/2011

MarketMinder's View: Japan’s economy has displayed remarkable resilience—speaking to both the flexibility of markets and to Japan’s preparedness ahead of just such an event. For more, see our 03/15/2011 cover story, "Japan’s Impact."

Sensible Stories
By , Carpe Diem, 05/16/2011

MarketMinder's View: "The fact that world stock markets achieved the same $32.5 trillion increase in equity value in about half that time between 2009 and 2011 demonstrates the incredible resiliency of economies and financial markets to recover, even following the worst financial crisis in generations." Hear, hear!

Market Misperceptions
By , Los Angeles Times, 05/13/2011

MarketMinder's View: We’ve said it before: Jobs typically lag stock market and economic recoveries. Jobs numbers are slowly but surely improving—as is normal. There’s no evidence our trade deficit is responsible for the “slow” job recovery. For more, see our 03/03/2011 cover story, “Help Wanted?

Market Misperceptions
By , The Australian, 05/13/2011

MarketMinder's View: None of these “ominous signs” are new—they are the same fears that have been plaguing investors, in some cases, for decades. Remember, it’s what’s fundamental but largely unknown that tends to move markets, not those things that are well hashed over.

Market Misperceptions
By , The Wall Street Journal, 05/13/2011

MarketMinder's View: The economic recovery has been (and will continue to be) just fine despite negative consumer sentiment. Remember, consumer sentiment is typically a lagging or coincident indicator and tells nothing about the future direction of the economy (or stocks, for that matter).

Sensible Stories
By , The New York Times, 05/13/2011

MarketMinder's View: The stronger EU countries continue to grow healthily despite the troubled periphery—more evidence of overall global economic vibrancy.

Sensible Stories
By , Bloomberg Businessweek, 05/13/2011

MarketMinder's View: It’s human nature to want to point fingers, but the 2008 credit crisis was simply not the fault of a few, greedy folks with bad intent. This article doesn’t mention the deleterious effects of FAS 157, but does a good job explaining why witch hunts are usually far wide of the mark.

Sensible Stories
By , Associated Press, 05/13/2011

MarketMinder's View: The EU moves one step closer to approving bailout funds for Portugal, as expected. For more, see our 05/10/2011 cover story, “Rumors and Bailouts.

Sensible Stories
By , The Wall Street Journal, 05/13/2011

MarketMinder's View: If these rules are adopted, it’s a welcome, sensible way to deal with disclosing values of more illiquid assets and effectively defangs what was most devastating about accounting rule FAS 157 (fair-value accounting.) We’re all for mark-to-market accounting—for those assets that have deep, liquid markets. For more, see our 03/11/2009 cover story, “Fahrenheit 157.

Market Misperceptions
By , USA Today, 05/12/2011

MarketMinder's View: The parade of “Sell in May” articles continues. But keep in mind, markets move cyclically, not because we’ve turned the page on our calendars. For more, see our 05/02/2011 cover story, “April Showers Bring May Myths.

Market Misperceptions
By , Seeking Alpha, 05/12/2011

MarketMinder's View: There is correlation between any two items, but that doesn’t imply causation or that one is a good way to forecast the other. Using a flawed survey of how consumers say they feel isn’t helpful in forecasting corporate hiring patterns. In fact, one can reasonably assume better hiring statistics would make many people feel better about economic conditions. But in reality, neither are useful for forecasting markets or the economy.

Market Misperceptions
By , The New York Times, 05/12/2011

MarketMinder's View: About the only thing we’d agree with was the questionable necessity of TARP. But aside from that, this strikes us as an overly emotional attempt to exact revenge and ignores the true causes of 2008’s financial crisis. For more, see our 03/11/2009 cover story,   Fahrenheit 157.

Market Misperceptions
By , The Christian Science Monitor, 05/12/2011

MarketMinder's View: Pricing stocks in terms of gold is entirely absurd. Flip this on its head—if you priced gold in stocks over the past 30 years, gold would be so far from all-time highs, it’s likely few would consider it much. But that’s absurd too. Moreover, looking at the current equity bull market since its start, stocks have outperformed gold—not the other way around.

Sensible Stories
By , The Wall Street Journal, 05/12/2011

MarketMinder's View: A sensible and spot-on look at how the US benefits from Chinese investment. Rather than reject Chinese investment in America as some kind of hostile takeover, we should embrace their continued domestic investment.

Sensible Stories
By , Carpe Diem, 05/12/2011

MarketMinder's View: Oil executives are testifying today before the Senate—and are frequently widely condemned for earning allegedly egregious profits on the backs of hard-working Americans. But the numbers seemingly indicate otherwise.

Sensible Stories
By , The Wall Street Journal, 05/12/2011

MarketMinder's View: Investors can be tricked by their own brains into making investing mistakes—the report discussed here contains some enlightening data. For more, see our 03/29/2010 cover story, “Feelings and Other Tragedies.

            

Sensible Stories
By , The New York Times, 05/12/2011

MarketMinder's View: An interesting and different way to look at inflation—which shows it’s likely not understated and at this point is still in hand.

Sensible Stories
By , Carpe Diem, 05/12/2011

MarketMinder's View: “Job openings typically lead actual hiring by several months, and therefore provide an accurate leading indicator of future job growth.” Positive news showing a likely continuation in employment improvements. For more, see today’s cover story, “WPA, Reductio Ad Absurdum.

Sensible Stories
By , Fox Business, 05/11/2011

MarketMinder's View: Ignore dour sentiment about the decline of America manufacturing. US manufacturing has been a bright spot through recovery and into expansion. “Manufacturing payrolls rose by 29,000 during April and 141,000 so far this year,” and the ISM’s Index of Manufacturing Activity showed the sector expanded for the 21st consecutive month in April. For more, see our 05/11/2011 cover story, “Dawn of the Not So Dead.”

Sensible Stories
By , The Washington Post , 05/11/2011

MarketMinder's View: Greater economic cooperation between the US and China is a positive move—something we heartily endorse. For more, see our 04/18/2011 cover story, “Global-phobia.”

Sensible Stories
By , Bloomberg, 05/11/2011

MarketMinder's View: “The Suez Canal, which opened in 1869, handled an average of 54.5 million tons of cargo a month in the first four months of 2011, 7.3 percent more than a year earlier.” Despite political tensions in the Middle East, trade continues through many key MENA ports. For more, see our 04/04/2011 cover story, “Checking the Inner Gut Strategist.”

Sensible Stories
By , Bloomberg, 05/11/2011

MarketMinder's View: Well, we shall see. Spain has every reason to try to calm markets to keep rates relatively in check. It is true, however, that thus far Spain has proven to be one of the fiscally healthier members of the PIIGS.

Market Misperceptions
By , Bloomberg, 05/11/2011

MarketMinder's View: Trade deficits aren’t a particularly accurate gauge of economic health. Overall total trade says a lot more about economic health than just imports and exports. For more, see our 04/12/2011 cover story, “The Totality of Trade.”

Market Misperceptions
By , The Telegraph , 05/11/2011

MarketMinder's View: Rumors continue to swirl around Greece’s future, but Greece exiting the EU remains a remote possibility—at least for the next few years. For more, see our 05/10/2011 cover story, “Rumors and Bailouts.”

Market Misperceptions
By , CNN Money, 05/11/2011

MarketMinder's View: History proves a housing recovery would be a nice economic boost, but it's not required for continued economic expansion. For more, see our 01/20/2011 cover story, “Ho Hum Housing.”

Market Misperceptions
By , The New York Times, 05/11/2011

MarketMinder's View: Economies and capital markets are more resilient than people believe (or remember). While Japan may continue to have slower growth relative to other developed nations (or may not!), it’s likely more a result of their economic policy, not any natural disaster.

Market Misperceptions
By , MarketWatch, 05/11/2011

MarketMinder's View: We disagree this constitutes “a clear and present danger on the inflation front.” The price of imported fuel, which is notoriously volatile, accounted for 80% of the April gain in US import prices.

Market Misperceptions
By , The Telegraph, 05/10/2011

MarketMinder's View: Greece’s S&P rating cut shouldn’t take anyone by surprise. Greece has problems that will likely take some time to work out. However, the key here is eurozone politicians have created appropriate entities to prevent near-term debt restructuring (like the European Financial Stability Facility)—thus buying needed time for potential Greek reforms.  For more, see today’s cover story, “Rumors and Bailouts.”

Market Misperceptions
By , Reuters, 05/10/2011

MarketMinder's View: China’s trade surplus, which rose in April, is the source of much political rhetoric. But what’s more important to all is the totality of global trade—and China’s imports and exports grew nicely in April. That’s a plus for the global economy. For more, see our 04/18/2011 cover story, “Global-phobia.”

Market Misperceptions
By , The Wall Street Journal, 05/10/2011

MarketMinder's View: As we’ve said before, the eurozone economy has some material issues to confront. But thus far, European politicians have taken steps to backstop the weaker periphery nations and confirm their support for the euro.

Sensible Stories
By , Bloomberg, 05/10/2011

MarketMinder's View: An interesting take on the imperfections of GDP calculations—helping show why we shouldn’t extrapolate the first quarter’s supposedly anemic 1.8% GDP growth rate into long-term economic stagnation. For more, see our 04/29/2011 cover story, “Not Running on Empty.”

Sensible Stories
By , Carpe Diem, 05/10/2011

MarketMinder's View: For all the consternation about the “death of US manufacturing,” recent data show US manufacturing is actually very much alive and doing quite well.

Sensible Stories
By , Reuters, 05/10/2011

MarketMinder's View: Surging sales and wholesale inventory levels allude to continued US economic growth.

Sensible Stories
By , Calafia Beach Pundit, 05/10/2011

MarketMinder's View: This is a sensible look at the potential effects of QE2’s scheduled end in June. While we don’t entirely agree  with the author’s commentary, the general gist seems accurate to us—QE2 was largely unnecessary, mostly boosted bank reserves that didn’t much need a boost, and its end is unlikely to derail the economy or bull market.

Market Misperceptions
By , The Wall Street Journal, 05/09/2011

MarketMinder's View: Using a computer program to stress test your portfolio is fine. Using one that mechanically recommends a heavy fixed income allocation based solely on the fact you’re retiring is flawed. There are many, many more factors to consider when determining a portfolio strategy.

Market Misperceptions
By , The Christian Science Monitor, 05/09/2011

MarketMinder's View: A collection of misperceptions all rolled into one article! First, the importance of quantitative easing to market direction is overstated. Second, the article contradicts itself by claiming deflation is the overarching trend (wrong) but households’ “costs are rising.” And above all else, it assumes markets move in secular patterns lasting a decade or more. Folks, markets are cyclical, not secular. And we’ve been in a bull market for over two years.

Market Misperceptions
By , Slate, 05/09/2011

MarketMinder's View: "The crisis showed that free and unfettered markets are neither efficient nor stable." We disagree. Moreover, claims widespread deregulation occurred during the last few decades are hard to square with facts—the passage of Sarbanes-Oxley is one example. 

Market Misperceptions
By , Pragmatic Capitalism, 05/09/2011

MarketMinder's View: Technical analysis + short-term timing + gold investing = A story to ignore.

Market Misperceptions
By , CNN Money, 05/09/2011

MarketMinder's View: Don’t put too much emphasis on weekly reports—they tend to ebb and flow. Unemployment statistics have been gradually and unevenly improving well after the economy resumed growing—which is entirely normal.

Sensible Stories
By , CNN Money, 05/09/2011

MarketMinder's View: As credit markets continue easing, banks are more willing to offer credit and consumers are becoming less apprehensive to borrow. A win-win for both sides and the economy. For more see our 05/04/2011 cover story, "Mending Lending."

Sensible Stories
By , Bloomberg, 05/09/2011

MarketMinder's View: "German exports surged in March to the highest monthly value ever recorded, boosting growth in Europe’s largest economy." An economic bump worth noting.

Sensible Stories
By , The Wall Street Journal, 05/09/2011

MarketMinder's View: Rising tax receipts signal a growing economy—a good thing.

Sensible Stories
By , Carpe Diem, 05/09/2011

MarketMinder's View: "With Chinese wages rising at about 17 percent per year and the value of the yuan continuing to increase, the gap between US and Chinese wages is narrowing rapidly." Further proof US manufacturing isn’t dying and a handful of states are becoming competition for China.

Sensible Stories
By , Reuters, 05/09/2011

MarketMinder's View: Some potential bailout loan rate cuts could be on the horizon for Greece and Ireland, but getting all EU members to agree could prove difficult.

Market Misperceptions
By , The New York Times, 05/06/2011

MarketMinder's View: The flash crash lasted about 40 minutes—and markets moved well beyond that point in the subsequent year, showing it wasn’t a real threat to the functioning of markets. A more realistic threat to the efficient functioning of markets? Misguided attempts to regulate away everything that catches politicians’ ire.

Market Misperceptions
By , The New York Times, 05/06/2011

MarketMinder's View: We agree Greece’s prospects beyond 2013 are uncertain. But assuming a default is inevitable is obscuring the fact the debate is largely about choices. Greece and other European nations likely have time to make the hard choices necessary to possibly avoid this outcome.

Market Misperceptions
By , The Telegraph, 05/06/2011

MarketMinder's View: Half the reasons listed here aren’t even negative—like UK services PMI that, while decelerating in April, remained expansionary. Much of the rest is either wrong or sheer speculation about unproven relationships (for example, silver to stocks). Ignore.

Sensible Stories
By , CNN Money, 05/06/2011

MarketMinder's View: As we’ve said, unemployment typically improves well after stocks and the economy. And as for April’s unemployment rate rising while hiring increased? “The rate often increases as the job market improves and previously discouraged workers return to the labor force.”

Sensible Stories
By , Seeking Alpha, 05/06/2011

MarketMinder's View: “Volatility simply means that stocks will bounce around a lot from day to day. The best cure for high volatility is patience.” Exactly.

Sensible Stories
By , The Daily Caller, 05/06/2011

MarketMinder's View: Here’s a cogent look at free trade and the false perception that it’s bad for domestic jobs.

Market Misperceptions
By , The New York Times, 05/05/2011

MarketMinder's View: Debt ceiling machinations are rather like a political game of chicken—both parties are attempting to stay on top the longest, but at the end of the day, they’ll most likely increase the debt ceiling rather than face the political ramifications of failing to do so. For more, see our 04/11/2011 cover story, "Shutdown Charade."

Market Misperceptions
By , Reuters, 05/05/2011

MarketMinder's View: The end result of attempting to regulate every possible scenario is ultimately overregulation and choking of markets. The flash crash was just that—and markets have moved on and then some since, so regulatory overreactions seem unwarranted.

Market Misperceptions
By , CNBC, 05/05/2011

MarketMinder's View: We agree with the suggestion that bearishness around the dollar is likely overblown. But assuming anything related to killing Osama bin Laden translates to relative currency strength is very likely an overstatement to say the least.

Market Misperceptions
By , The Motley Fool, 05/05/2011

MarketMinder's View: The signs listed in this piece aren’t very useful tools for assessing future stock market direction. But what’s more striking is the suggestion markets have been irrationally exuberant for over two years…during which markets have almost uniformly risen. It’s easy to perpetually cry wolf—you’ll probably be right someday—but what about the rest of the time?

Sensible Stories
By , Bloomberg, 05/05/2011

MarketMinder's View: "No one’s interests are served by the imposition of ineffective or burdensome rules that lead to excessive increases in costs or unnecessary restrictions in the supply of credit." We couldn’t agree more—now, if only legislators and regulators will follow through. For more, see our 04/21/2011 cover story, "The Dodd-Frank ‘Act’ Strikes Again?"

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

MarketMinder's View: Spain sold €3.35 billion of five-year debt at an average yield of 4.549% as budget deficits continue to fall—positive signs showing Spain continues to prove its creditworthiness to investors and the likelihood of a wider eurozone debt contagion remains fairly low.

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

MarketMinder's View: Free trade helps American businesses remain competitive in an increasingly globalized marketplace—especially as others like South Korea and the EU are inking their own deals. For more, see our 04/07/2011 cover story, "A Triumph for Trade."

Sensible Stories
By , Real Clear Politics, 05/05/2011

MarketMinder's View: Blaming "speculators" for rising oil prices is a commonly heard refrain from politicians. Here’s an interesting thought experiment to help show why this is frequently overstated.

Market Misperceptions
By , Reuters, 05/04/2011

MarketMinder's View: The US services sector continued expanding in April, just at a slower pace than March. One shouldn’t expect any sector to perpetually expand by increasing amounts each month, even in a normal growth cycle.

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

MarketMinder's View: Talk of the dollar’s demise makes for great headlines, but it’s largely off base. For more, see our 03/23/2011 cover story, “Top Dollar.”

Market Misperceptions
By , USA Today, 05/04/2011

MarketMinder's View: While mining social media sentiment data is certainly interesting theory and largely academic thus far, acting on “unstructured data” seems like it could be fraught with risks and misinterpretations to us.

Market Misperceptions
By , MarketWatch, 05/04/2011

MarketMinder's View: It’s impossible to say when a correction in equity prices will happen. But investors should be aware they can happen at any time and are perfectly normal, healthy occurrences in an ongoing bull market. And the worries alluded to here are not truly new, they’ve existed for some time—which doesn’t indicate cracks in the “wall of worries” it indicates more bricks.

Market Misperceptions
By , Associated Press, 05/04/2011

MarketMinder's View: Please ignore. Whether positive or negative, sentiment surveys like this offer little insight into the health of capital markets going forward.

Sensible Stories
By , CNN Money, 05/04/2011

MarketMinder's View: Wednesday’s ADP and Challenger, Gray, & Christmas reports brought positive news, with private hiring up and planned layoffs down, respectively. While the ADP report somewhat missed estimates, it still showed improvement. Better employment data typically follow economic growth—which we are continuing to see.

Sensible Stories
By , Bloomberg, 05/04/2011

MarketMinder's View: The Portuguese bailout was met with little fanfare, proving PIIGS’ problems remain mitigated by EU/IMF support. But questions about the long-term operations of the eurozone still remain until more agreements are reached. For more, see our 04/08/2011 cover story, “Iberian Bailout.”

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

MarketMinder's View: Despite a recent strong run, investors shouldn’t ignore the mountain of proof silver is a poor inflation hedge and an underperforming long-term investment. For more, see our 04/28/2011 cover story, “Not So Sterling Silver.”

Market Misperceptions
By , Reuters, 05/03/2011

MarketMinder's View: Food and gas actually make up a relatively low percentage of discretionary income for most Americans. Although food and gas prices are rising, far bigger stuff—like housing costs—has fallen.

Market Misperceptions
By , Reuters, 05/03/2011

MarketMinder's View: While it’s true the UK manufacturing PMI’s growth rate slowed in April, it still indicated growth. Monthly economic statistics frequently show volatility. We’d caution against drawing an overly negative conclusion from a growth rate that’s still positive.

Market Misperceptions
By , Seeking Alpha, 05/03/2011

MarketMinder's View: Claims of imminent stagflation now seem off target considering our economy is growing (i.e., not stagnant) and inflation is relatively benign. For more, see today’s cover story, “No Stagflation Nation.” 

Market Misperceptions
By , Project Syndicate, 05/03/2011

MarketMinder's View: “Left to its own devices, America’s unemployment problem will deepen. This will widen the already-large gap between the country’s haves and have-nots. It will undermine labor’s skills and productivity … The US government has little time to waste if it is to avoid an even more protracted and entrenched unemployment problem.” We couldn’t disagree more. History shows employment gains (which are improving, albeit slower than some would like) follow economic growth. Likewise, productivity gains continue to mount as US businesses harness new efficiencies.

Sensible Stories
By , Associated Press, 05/03/2011

MarketMinder's View: To meet rising demand, manufacturers are investing in new factory machinery to ramp up production and increase efficiencies—a sign the US economy appears poised to continue expanding.

Sensible Stories
By , MoneyWatch, 05/03/2011

MarketMinder's View: Ignore the title. This is a sensible discussion of why the US is very unlikely to default on its debt: “First, we have plenty of money to pay the debt. Interest payments on US debt are only about 6% of the budget.”

Sensible Stories
By , Calculated Risk, 05/03/2011

MarketMinder's View: This short and to-the-point article hits the nail on the head: Raising the debt ceiling is far more about political dramatics than anything else.

Sensible Stories
By , Associated Press, 05/03/2011

MarketMinder's View: Emerging Markets central banks continue to gradually tighten monetary policy to confront elevated inflation resulting from fast economic growth. This seems largely appropriate to us.

Market Misperceptions
By , The New York Times, 05/02/2011

MarketMinder's View: Sure, some parts of the economy are lagging others—but that’s always been true. Neither recovery nor expansionary periods will be uniform, but that doesn’t mean they’re not overall positive. For more, see our 04/29/2011 cover story, "Not Running on Empty."

Market Misperceptions
By , The New York Times, 05/02/2011

MarketMinder's View: While there’s always room for improvement in measuring and monitoring the economy, it’s unlikely some magic number alone will help avoid the next crisis. There will always be uncertainty and unforeseen events—but markets have continued to operate despite them and will likely continue to.

Market Misperceptions
By , USA Today, 05/02/2011

MarketMinder's View: This seems to us like comparing apples and oranges, and doing so based on rather odd methodology. For example, why compare debt to revenue? On a balance sheet, one should compare debt to assets, or debt service costs to revenues. And the suggestion the US government doesn’t have assets backing its liabilities just like corporations do is misleading. Consider: Who’s the largest landowner in the United States? That’s right, the US government.

Market Misperceptions
By , The New York Times, 05/02/2011

MarketMinder's View: This piece is long on conclusions and short on supporting evidence, not to mention alternatives.  The unemployment rate is simply doing what it’s always done—lagging economic growth, sometimes by a long time. There’s nothing new or different about that. And jobless recovery arguments, however they’re supported, aren’t new or different either.

Market Misperceptions
By , The Sydney Morning Herald, 05/02/2011

MarketMinder's View: The reality is as resources become scarce and prices consequently increase, so do incentives to discover and develop new energy sources. The likelihood we completely run out of oil in the foreseeable future is extremely low.

Sensible Stories
By , MoneyWatch, 05/02/2011

MarketMinder's View: Headlines are meant to grab attention, not necessarily convey investing information worthy of action—especially when that information is often already priced into markets.

Sensible Stories
By , The Wall Street Journal, 05/02/2011

MarketMinder's View: A sensible debunking of stagflation based on the current outlook for inflation.

Sensible Stories
By , The New York Times, 05/02/2011

MarketMinder's View: There’s no doubt Japan faces challenges in its disaster recovery, but they’re not insurmountable given private enterprises’ initiative and ingenuity.

Sensible Stories
By , The Washington Post, 05/02/2011

MarketMinder's View: Evidence continues to mount that punitive state tax structures are encouraging businesses to relocate domestically. And the same applies at all levels—state, federal, or international. Taxes generally discourage production and shift resources toward efforts to either avoid them or relocate. For more, see our 04/15/2011 cover story, "’Tis the Season."