Home → Fisher Investments MarketMinder Headlines → 06-2013 Archives

By , Der Spiegel, 06/28/2013

MarketMinder's View: Yes, there are provisions for EU member states to deviate from the new bank resolution deal in certain circumstances, but this piece overlooks a larger point. Because the rules don’t take effect for five years, and because depositors and creditors will understand the potential risks well in advance of any failure, they have ample time to adjust accordingly. While this could create some unintended consequences downstream, it does help reduce the likelihood of governments having to step in to keep depositors from getting wiped out. For more, see today’s cover story, “The EU-Turn on Banks.”

By , The Washington Post, 06/28/2013

MarketMinder's View: Rising mortgage rates aren’t automatically negative. Even with the uptick, rates are very affordable by historical standards. Plus, moderately higher rates likely increase banks’ potential operating profits, giving them more incentive to lend. For more, see our recent commentary on The Street.

By , Xinhua, 06/28/2013

MarketMinder's View: Consider this a policy statement from the China’s government and central bank. The bank took a tough line with lenders, allowing them to feel a funding squeeze in order to give them incentive to clean up their balance sheets, and then started easing once it got its point across. Looking ahead, China likely continues to support moderate credit growth in the real economy. For more, see our 6/25/2013 cover story, “China’s Liquidity Finger Trap.”

By , The Wall Street Journal, 06/28/2013

MarketMinder's View: A 6% leverage ratio (double Basel III’s minimum) doesn’t inherently guarantee bank safety or reduce bailout likelihood—but it probably does crimp bank lending and, potentially, require banks to issue new equity or cut dividend payments, which likely creates headwinds for Financials stocks.

By , Associated Press, 06/28/2013

MarketMinder's View: It is growing fast, but that doesn’t make it a viable industry or surefire investment—or even likely to supplant natural gas over the coming years. Wind and solar power aren’t economical—their growth comes largely from heavy subsidies. 

By , The Telegraph, 06/28/2013

MarketMinder's View: The re-privatization of nationalized RBS and Lloyds is an important step in the UK’s post-2008 progress.

By , Central News Agency, 06/28/2013

MarketMinder's View: As this shows, economic slowing in certain regions—even big ones like China—needn’t materially dampen global trade. Nations can simply establish trade relationships with new, faster-growing partners, just like Taiwan did here.

By , Reuters, 06/28/2013

MarketMinder's View: It’s important to enforce intellectual property rights. At the same time, if this impacts the US’s broader trade relationship with China and prompts broad protectionism, it could be a negative for markets—that’s not necessarily a probability, but it is perhaps possible.

By , The Korea Times, 06/27/2013

MarketMinder's View: Though this likely won’t be finalized for a while, a free trade agreement between two of the biggest economies in Asia would likely be an economic tailwind for the region and a positive for markets globally.

By , The New Zealand Herald, 06/27/2013

MarketMinder's View: Simply, the Fed’s potential tapering of quantitative easing (QE) doesn’t mean impending chaos for Emerging Markets. There’s scant evidence these nations have received much “hot money” from the US or other QE-practicing nations, where much of the new money is sitting idle as excess bank reserves.

By , Reuters, 06/27/2013

MarketMinder's View: Though housing is a relatively small part of the economy, its continued improvement likely provides a small tailwind. With borrowing rates still near historical lows (even with interest rates recent rise), continued improvement appears likely looking forward—which could be a positive surprise for markets.

By , The Wall Street Journal, 06/27/2013

MarketMinder's View: Short-term volatility can be uncomfortable, but it’s a normal and healthy part of any bull market—and provided long-term growth investors remain disciplined, even wild short-term swings shouldn’t keep them from reaching their goals over time.

By , The Telegraph, 06/27/2013

MarketMinder's View: Though the long-term predictions here are a touch speculative, it’s clear an ample supply of shale gas exists. Fracking could unlock tremendous energy and economic potential in the UK—just as it has in the US.

By , The Wall Street Journal, 06/27/2013

MarketMinder's View: Personal spending saw a slight boost in May, rising 0.3%, suggesting US consumers are doing just fine despite the widely feared payroll tax hike.

By , Bloomberg, 06/26/2013

MarketMinder's View: If and when the Fed “tapers,” that still doesn’t mean its balance sheet will shrink. For more, see “Debunking the ‘Fed-xit.’”

By , The New York Times, 06/26/2013

MarketMinder's View: As this correctly points out, poor regulation and heavy state control—not tighter central bank policy—are the biggest headwinds to China’s financial industry. What China really needs is a freer financial system that can lend freely to whomever needs and qualifies for financing—determined by markets, not the state. For more see our 06/25/2013 cover story, China’s Liquidity Finger Trap.”

By , Reuters , 06/26/2013

MarketMinder's View: First, growth is growth. Further, this revision is very backward-looking—stocks likely don’t care about what the economy did three months ago. They’re likely looking ahead, where most signs point to continued growth.

By , Bloomberg, 06/26/2013

MarketMinder's View: Though many were likely relieved to hear the ECB’s poised to act when needed, in our view, more important is this acknowledgement: “Monetary policy cannot create real economic growth. If growth is stalling because the economy is not producing enough or because firms have lost competitiveness, this is beyond the power of the central bank to fix.”

By , AEIdeas , 06/26/2013

MarketMinder's View: The US economy continues growing, perhaps slower than many prefer, but surely. For more positive recent US and global economic data see our 06/19/2013 cover story, “More Than Fed-side Chatter.”

By , Reuters, 06/26/2013

MarketMinder's View: Considering the UK’s “austerity pill” has long been a placebo (as far as spending cuts are concerned), we’re not sure why it’s suddenly being “sugared”—despite some targeted cuts, overall spending has increased every year, and that’s not projected to change looking ahead.

By , CNN Money, 06/26/2013

MarketMinder's View: This rests wholly on the assumption Fed hikes are automatically bearish—which history shows isn’t true. Moreover, the end of quantitative easing likely isn’t the negative this piece suggests. In fact, it could be a boon for Financials, as it would make lending more profitable. For more, see our 6/20/2013 cover story, “Fedishizing.”

By , The Telegraph, 06/26/2013

MarketMinder's View: Here’s a timely example of how bureaucratic overreach can stymie economic growth—cutting this and other red tape would likely be a boon to the UK economy and energy markets.

By , The St. Louis Beacon, 06/25/2013

MarketMinder's View: We agree: “… What would happen if rates rose to more traditional levels? For one, banks would start to lend more. That would help create the jobs everyone so desperately wants. Incomes would increase, and the economic recovery would more closely align with historical norms.”

By , The Wall Street Journal, 06/25/2013

MarketMinder's View: Here’s another example of the potential pitfalls of variable annuity contracts. Be aware of fine print as terms and conditions can change at the discretion of contract issuers—and as this development shows, guarantees aren’t ironclad. Learn more about annuities on UnderstandAnnuities.com.

By , Bloomberg, 06/25/2013

MarketMinder's View: As we expected, Chinese officials appear committed to maintaining financial stability—the central bank pledged to increase market liquidity to bring down interbank funding costs, which should help ease fears of a credit crunch. For more, see our 6/25/2013 cover story, “China’s Liquidity Finger Trap.”

By , The Globe and Mail, 06/25/2013

MarketMinder's View: This article—and the study it describes—miss two key points. First, although the public sector has shrunk since the financial crisis, the private sector has more than offset this. Second, higher employment wouldn’t help our economy grow faster—growth begets jobs, not the other way around.

By , The Korea Times, 06/25/2013

MarketMinder's View: Though details are scarce for now, it seems South Korea’s seeking to create a more business-friendly environment to spur growth—a notable moderation for the current administration, which talked tough on Korea’s big conglomerates during last year’s campaign.

By , Der Spiegel, 06/25/2013

MarketMinder's View: German Chancellor Angela Merkel’s apparent shift on European integration likely isn’t a game changer for the eurozone and shouldn’t increase the risk of a disorderly breakup. In our view, this is likely a political move to curry favor with euroskeptic Germans ahead of the autumn election.

By , The Wall Street Journal, 06/25/2013

MarketMinder's View: Delayed implementation of the financial transactions tax likely gives markets more time to adjust and politicians more time to water down the provisions—if they don’t scrap the tax altogether. For more, see our 3/8/2013 cover story, “Mulling a Mulligan on the Tobin Tax.”

By , Business Insider, 06/25/2013

MarketMinder's View: Yes, since every farm bill passed since the 1950s merely suspends temporarily the Agricultural Act of 1949, some quirky pricing mechanisms would technically kick in if Congress let the current bill lapse. But markets likely wouldn’t change immediately, giving Congress plenty of time to compromise and kick the can—just as they always have, despite some heated politicking. For more, see our 12/31/2012 cover story, “The Milkman Cometh.”

By , CNBC, 06/24/2013

MarketMinder's View: We’d suggest not placing too much emphasis on pre-announcements of earnings as actual earnings likely aren’t announced for some time. Further, over the past few quarters, many companies have been meeting and beating earnings expectations and, in our view, it’s likely that trend continues.

By , China Daily, 06/24/2013

MarketMinder's View: We agree: “Done right, financial liberalization would be the next big wave of reform that China needs. It could be as significant as the State-owned enterprise reform of the 1990s. Through financial liberalization, China would be able to make enormous gains in productivity and lay the foundation for continued strong growth in coming decades.”

By , Reuters, 06/24/2013

MarketMinder's View: We have quibbles with the idea the Fed’s loose monetary policy can “nurture the real economy”—in fact, we’d argue the opposite. When bond purchases push down long-term interest rates, banks have less of an incentive to lend as profit margins diminish. Evidence, in our view, the Fed’s policies are contractionary, not expansionary.

By , The Wall Street Journal, 06/24/2013

MarketMinder's View: We haven’t seen the full details, but if you want banks to lend more, allowing them more flexibility regarding debt and equity ratios would be one good step.

By , The Korea Times, 06/24/2013

MarketMinder's View: Limiting wages can limit incentives and lead to lower productivity. Furthermore, firms use competitive compensation packages to attract talent—if salaries are capped, they’ll likely have a harder time recruiting and hiring.

By , Free Exchange, 06/24/2013

MarketMinder's View: Though we don’t agree with all pieces of this, it highlights well the notion eurozone economies would benefit from structural changes, like labor market reforms, to boost long-term growth.

By , The New York Times, 06/21/2013

MarketMinder's View: There are a fair few points we’d disagree with here. (For example, earnings from a technology or service firm are just as legitimate as earnings from a manufacturing firm.) But another point that’s missed here: There has been massive investment in business during this cycle. Business spending is up hugely, as are profits.

By , The Wall Street Journal, 06/21/2013

MarketMinder's View: In our view, this article misses the central point. In the two 30-year periods, the US grew at near identical annualized rates, despite debt growing at different rates. There’s no evidence the size of debt is problematic at this point, particularly since debt interest costs are currently historically low. Moreover, it’s a bit of a fallacy to point to total debt levels. For one example as to why, consider banks: Their debt is actually, in part, the public’s aggregated deposits. Further, the take on Fed policy here presumes QE money has leaked into the economy, but it’s mostly made a big U-turn and sits idly on deposit as excess reserves at the Fed. This theory is far too surface level to be of any real, material value.

By , Reuters, 06/21/2013

MarketMinder's View: EU-wide legislation forcing a failing bank’s losses on big savers likely creates more problems than it solves. First, it overlooks—hence, can’t address—the varying causes of bank failures. Remember, Spain’s and Cyprus’s banking systems failed for very different reasons. Further, it disincentivizes saving: For example, big depositors likely move funds elsewhere if the risk of losing their savings rises—potentially hurting countries’ (and the EU’s) overall financial sector more.

By , USA Today, 06/21/2013

MarketMinder's View: That more than half of states’ unemployment decreased or stayed the same in May is in line with unemployment’s overall downward trend.

By , The Wall Street Journal, 06/21/2013

MarketMinder's View: This likely doesn’t impact the current government much, which still has cobbled together enough support from other parties. Plus, it’s not like Greece is making gangbusters headway on beefing up competitiveness, anyway.

By , Financial Times, 06/21/2013

MarketMinder's View: With so many investors expecting a “turbulent” QE exit, our view is unwinding QE (whenever it happens) likely won’t be as rough as people expect, and that will be an additional bullish surprise.

By , The Wall Street Journal, 06/21/2013

MarketMinder's View: While not exactly surprising news, it’s worth noting the EU approved extended the maturity of bailout loans for both Ireland and Portugal by seven years. This is a step that likely eases both nations’ road to fully financing themselves via the bond market.

By , The Telegraph, 06/21/2013

MarketMinder's View: In our view, investors have been ignoring ratings agencies’ downgrades (surprise or otherwise) for some time now. That they’ll now have to advise governments of their announcement ahead of time likely has little to no market impact.

By , The Wall Street Journal, 06/21/2013

MarketMinder's View: Positive news for Slovenia as they’ll avoid receiving bailout funds for now. Events here bear watching as the country will attempt to sell a majority of their 100+ state-owned enterprises.

By , Time, 06/20/2013

MarketMinder's View: We think belief in the Fed’s market-moving power is rather misplaced—from the US to Japan and everything in between, the Fed isn’t the sole (or even a big) market driver. Yes, jitters over QE tapering may cause some short-term volatility, but long-term, we think markets should move forward on the strength of solid fundamentals. For more, see our 06/19/2013 cover story, “More than Fed-side Chatter.

By , The Wall Street Journal , 06/20/2013

MarketMinder's View: Sure, all is not rosy in the eurozone, but as this piece highlights, some economic data are showing tentative signs of stabilization—a far better outcome than most seemingly expect. Continued improvement could provide a small sentiment tailwind looking forward.

By , Project Syndicate, 06/20/2013

MarketMinder's View: In our view, this overstates the potential impact of Germany’s Constitutional Court hearing on the legality of the ECB’s Outright Monetary Transactions policy. For one, the court has overwhelmingly supported eurozone bailout mechanisms at every turn. Should that change this time, considering German courts have no jurisdiction over the ECB, the verdict shouldn’t much alter the eurozone’s present course. For more, see our 06/11/2013 cover story, “Germany Takes the OMT to Court.

By , The Wall Street Journal, 06/20/2013

MarketMinder's View: Further evidence of the (underappreciated) strength of the US housing market—a slight economic tailwind and, perhaps, positive driver of investor sentiment looking ahead.

By , The Wall Street Journal, 06/20/2013

MarketMinder's View: “Cummins built its engines without a penny of government support—a reminder that free markets can solve problems that politicians argued about for decades but failed to fix.” A valuable lesson from the recent fracking boom, and one that should benefit the entire economy courtesy of abundant, cheaper energy.   


By , The Wall Street Journal, 06/20/2013

MarketMinder's View: “Cummins built its engines without a penny of government support—a reminder that free markets can solve problems that politicians argued about for decades but failed to fix.” A valuable lesson from the recent fracking boom, and one that should benefit the entire economy courtesy of abundant, cheaper energy.   

By , China Daily, 06/20/2013

MarketMinder's View: This is an encouraging development as protectionist measures hurt both sides, and defusing the solar spat should decrease the likelihood of a tit-for-tat trade tiff escalating into full-blown protectionism. How talks go, though, remains to be seen. For more see our 05/22/2013 cover story, “Solar Wars: A (Un)Renewable Hope?

By , Slate, 06/19/2013

MarketMinder's View: Continuing–or increasing—QE until inflation hits 2% seems very misguided to us, considering QE is a big reason inflation isn’t rising. By flattening the yield curve, it’s created a disincentive to lend, which has pushed down the velocity of money. And while the US economy is actually doing well despite too-much QE, tapering would likely enable money to circulate more quickly and aid higher growth.

By , Slate, 06/19/2013

MarketMinder's View: Continuing–or increasing—QE until inflation hits 2% seems very misguided to us, considering QE is a big reason inflation isn’t rising. By flattening the yield curve, it’s created a disincentive to lend, which has pushed down the velocity of money. And while the US economy is actually doing well despite too-much QE, tapering would likely enable money to circulate more quickly and aid higher growth.

By , Slate, 06/19/2013

MarketMinder's View: Continuing–or increasing—QE until inflation hits 2% seems very misguided to us, considering QE is a big reason inflation isn’t rising. By flattening the yield curve, it’s created a disincentive to lend, which has pushed down the velocity of money. And while the US economy is actually doing well despite too-much QE, tapering would likely enable money to circulate more quickly and aid higher growth.

By , Bloomberg, 06/19/2013

MarketMinder's View: Export values surged, which is largely due to a weak yen and not necessarily positive moving forward—export volume fell 4.8%. That firms are selling fewer goods abroad isn’t great news and is further evidence a weaker yen isn’t a net benefit. A weak yen also means imports, like much-needed energy, are more expensive.

By , Bloomberg, 06/19/2013

MarketMinder's View: In arguing freer trade between US and EU banks automatically increases US banks’ counterparty risk, this misses a key point: Banks can and likely will evaluate counterparties’ solvency before entering swaps contracts—and those evaluations could very well use more sensible methodologies than those described here. Freer trade in financial services simply gives US and EU banks more options, which isn’t a bad thing.

By , Time, 06/19/2013

MarketMinder's View: As this piece correctly concludes, freedom, well-enforced property rights and the rule of law are vital for sustainable economic growth. When individuals are able to make their own choices, own property, start businesses and the like, society benefits overall—as China likely does should it reform its urban migration system.

By , Bloomberg, 06/19/2013

MarketMinder's View: In our view, delaying bonuses bankers receive for 10 years and criminalizing “reckless” behavior—which, notably, isn’t defined—likely creates unintended consequences like higher salaries (i.e., less performance-based compensation) or a talent drain, which likely doesn’t improve the industry.

By , Reuters, 06/19/2013

MarketMinder's View: Though Ireland’s not out of the woods yet, its return to growth and overall progress since its 2010 bailout is yet another example of better-than-expected conditions in the eurozone.

By , Bloomberg, 06/19/2013

MarketMinder's View: Though the change is small and certainly not a panacea, a lower corporate tax rate likely does help improve Vietnam’s business landscape some.

By , Investor’s Business Daily, 06/18/2013

MarketMinder's View: “By lifting the ban on U.S. crude exports, we have the opportunity not only to encourage domestic production and reap its economic rewards but to shape the global oil market. That's a position of strength we should seize.” If supply growth continues, domestic crude prices likely fall—reducing incentive to drill and explore. Exporting oil is a potentially important step in maintaining the growth of US domestic energy production.

By , The Wall Street Journal, 06/18/2013

MarketMinder's View: Sugar prices, like everything else, are a product of supply and demand. Rather than having the government intervene to decrease supply and push prices up, we’d suggest allowing prices to fluctuate with the market. Furthermore, increasing prices likely incrementally decrease consumers’ incentive to buy sugar, detracting from higher revenues the government is seeking to create.

By , The Economist, 06/18/2013

MarketMinder's View: We agree: “With a public debt of 240% of GDP, printing money and public works spending can only go so far. Most of what ails Japan, from its insider-dominated labour market to excessive regulation and poor corporate governance, is structural.” Events here bear watching as Japan looks to Prime Minister Shinzo Abe’s government to revive its stagnant economy.

By , The Wall Street Journal, 06/18/2013

MarketMinder's View: The notion the market is singularly focused on quantitative easing, to the point corporate earnings don’t matter, seems a bizarre theory to us. In fact, earnings have surged about as much as stocks throughout the present bull market. And is it really so surprising that over the course of a bull market most stocks have risen?

By , Bloomberg, 06/18/2013

MarketMinder's View: Opening Mexico’s petroleum industry to competition would be a boon for economic growth and likely increase overall production.

By , Project Syndicate, 06/17/2013

MarketMinder's View: “The Limits of Growth got it so wrong because its authors overlooked the greatest resource of all: our own resourcefulness.”

By , The Wall Street Journal, 06/17/2013

MarketMinder's View: An interesting look at how Germany’s rising relative energy costs (largely due to renewable energy subsidies and an unwillingness to utilize fracking) are causing companies to go abroad for energy resources.

By , EUbusiness, 06/17/2013

MarketMinder's View: Though we disagree with the notion trade deficits are generally bad and surpluses are generally good, the year-over-data show the eurozone trade is perhaps not as bad as some presume—seasonally adjusted exports and imports are both up over the period (9% and 1%, respectively).

By , The Telegraph, 06/17/2013

MarketMinder's View: The EU’s financial transaction tax continues to meet opposition—this time from financial risk managers—citing negative industry-wide consequences: The tax likely diminishes investors’ incentive to trade stocks, bonds and other securities in the eleven nations seeking to adopt the tax. For more, see our 3/8/2013 cover story, “Mulling a Mulligan on the Tobin Tax.”

By , The Detroit News, 06/17/2013

MarketMinder's View: A point rarely considered: Automobile innovations don’t necessarily have to come from hybrid technology alone—the internal combustion engine still has myriad possibilities for advancement.  

By , The New York Times, 06/14/2013

MarketMinder's View: Progress and innovation have always caused displacements—often painful ones. But would we really want to halt progress? And who decides which innovations are ok and which aren’t? Over time, society has progressed and has become overall richer and healthier. One could argue “it’s different this time,” but folks who argue that have been proved wrong over time.

By , EU Business, 06/14/2013

MarketMinder's View: France’s stalling on an EU-US free-trade agreement (FTA) might be a politically smart near-term move, but ultimately, the FTA will benefit all involved. France has watched her exports fall during the eurozone’s contraction and likely will make the wisest move in the end—increasing the free flow of trade.

By , The Wall Street Journal, 06/14/2013

MarketMinder's View: In our view, recent bond volatility is normal and even expected. That rates tick up from generational lows shouldn’t surprise anyone. (See our cover story, “Interst-ingly Rising Rates.”) Further, it’s no surprise the eurozone’s woes aren’t over. Many nations have a long way to go to increase competitiveness—that can’t be solved overnight.

By , Fox Business, 06/14/2013

MarketMinder's View: Consumer sentiment is coincident at best—and mostly backward-looking. It tells you how folks feel about what just happened, and it says nothing about future economic or market direction.

By , The New York Times, 06/14/2013

MarketMinder's View: We believe more transparency is better, and “going dark” can increase risk to shareholders. But we suggest there is a much easier solution here: Sell the shares. If you aren’t comfortable with the level of corporate governance, that’s a great time to sell and move on.

By , BBC News, 06/14/2013

MarketMinder's View: We have a suggestion for G8 nations unhappy with so-called tax havens. Why not make your tax rates more competitive? That’ll show ‘em.

By , Financial Times, 06/14/2013

MarketMinder's View: We’re plenty skeptical of fiscal policy ourselves, but the IMF seems to be confused about the impact of the sequester. Total government spending doesn’t fall under the sequester. The reverse! It’s projected to increase.

By , Yahoo! Finance, 06/14/2013

MarketMinder's View: We suppose governments could budget over an infinite time horizon. But we rather fail to see the point. Politicians can’t stick to their annual budgets, nevermind 10-year projections. This seems like an exercise in futility and one likely fraught with politicking.

By , Reuters, 06/13/2013

MarketMinder's View: The increase in retail sales last month—led by big ticket items—suggest consumer spending is healthy. And overall, it’s just another sign of the US’s economic strength

By , CNBC, 06/13/2013

MarketMinder's View: We think concerns about the Fed tapering back its quantitative easing program are overstated. QE has largely been deflationary and contractionary, so if the Fed decided to slow down QE (not a certainty at this point), it would likely be an unanticipated positive for stocks.

By , Financial Times, 06/13/2013

MarketMinder's View: Here’s a sensible take about the moves PM Shinzo Abe should make to loosen up the Japanese economy. Unless real plans—and not vague and hopeful goals—for economic and labor reform are made and implemented, Japan’s competitiveness on the global market likely continues to stagnate.

By , EUbusiness, 06/13/2013

MarketMinder's View: France’s insistence for special status in the trade talks between the US and EU is a disappointing development. Obstructions to freer, more open trade channels hurt all trade partners involved and have the potential to damage relations in other industries. For more see our 05/22/2013 cover story, “Solar Wars: A (Un)Renewable Hope?

By , The Wall Street Journal, 06/13/2013

MarketMinder's View: The recent shale boom and fracking bonanza shows fears energy supplies are dangerously limited were misplaced.

By , The Telegraph, 06/13/2013

MarketMinder's View: “For every job cut in the public sector, at least two have been created in the private.” An important message to remember, as the current expansion (like most expansions) has largely been driven by private sector strength.

By , The New York Times, 06/12/2013

MarketMinder's View: There are a number of economic misperceptions here, like fixed-pie theories of scarcity. In fact, a bigger Finance industry can imply greater abundance of capital (as in capitalism). But more importantly, this overlooks the fact developed economies are more service-oriented than goods-producing—across the globe. And that isn’t bad, it’s just how economies develop and overall grow wealthier.

By , Bloomberg, 06/12/2013

MarketMinder's View: Ultimately, MSCI’s re-categorizing Greece reflects widely acknowledged economic issues. Greece has been struggling for quite a while and faces new challenges still. And, though some market/index calculations may be affected, overall, the changes are likely small overall.

By , Bloomberg, 06/12/2013

MarketMinder's View: Clean-energy Master Limited Partnerships (MLPs) are a fine idea, but it’s important to remember clean energies, like solar and wind, haven’t received much private-sector support because they largely aren’t yet economically viable. Since MLPs distribute profits, it’s unclear how many investors would actually target them.

By , CNN Money, 06/12/2013

MarketMinder's View: As we’ve written, this is largely where QE funds are parked—back at the Fed—due to a flatter yield curve. Incentives matter. But as long as the Fed slows bond purchases and QE in a measured manner, banks will likely increase lending as interest rates rise.

By , Bloomberg, 06/12/2013

MarketMinder's View: Another small, but notable, improvement in the eurozone shows the area’s economic picture isn’t as bleak as once feared.

By , Reuters, 06/12/2013

MarketMinder's View: Implementing more protectionism won’t stop other countries from doing the same and is a net negative for everyone involved. While the scope of the China/EU trade spat is small presently, it’s worth watching. For more see our 05/22/2013 cover story, “Solar Wars: An (Un)Renewable Hope?

By , Fox Business, 06/12/2013

MarketMinder's View: Fewer underwater mortgages due to higher home prices are just another sign of housing’s rebound.

By , The New York Times, 06/11/2013

MarketMinder's View: This piece is spot on, in our view. Because of behavioral finance concepts like prospect theory—humans tend to fear losses much more than they appreciate gains—investors tend to make quick, emotional decisions which are often quite detrimental in the longer term.

By , The Wall Street Journal, 06/11/2013

MarketMinder's View: We agree with the notion investors have basically discounted ratings agencies’ often late-to-the-game proclamations, and markets have largely brushed off their actions over the past few years. The fact regulations still rely on them isn’t a great reason to pay them much heed.

By , CNBC, 06/11/2013

MarketMinder's View: Events here bear watching as Germany’s Constitutional Court will hear testimony regarding the constitutionality of the ECB’s controversial bond-buying program. For more, see our 6/11/2013 cover story “Germany Takes the OMT to Court.”


By , Slate, 06/11/2013

MarketMinder's View: In our view, this greatly overstates the government’s role in the economy—both QE’s tailwind and the sequester’s headwind. As we’ve written, QE’s bond buying discourages lending by flattening the yield curve—hence, it’s more likely contractionary than stimulative. Furthermore, there’s ample evidence the sequester has had a minimal impact on growth. For more on the sequester, see our 4/3/2013 cover story, “Seq-Watered Down.”

By , Bloomberg, 06/11/2013

MarketMinder's View: Incentives matter. If bonuses are capped, some financial firms will likely increase salaries to keep wages competitive and attract talent.

By , Financial Times, 06/11/2013

MarketMinder's View: Due to quibbles over meeting protocol, North and South Korea are cancelling talks—a less than ideal development, in our view. Both countries would greatly benefit from agreements on topics like freer borders for the flow of goods, services and tourism, for example. But also, increased tensions are a sentiment factor potentially weighing on stocks in the region.

By , The Telegraph, 06/11/2013

MarketMinder's View: More positive news for the UK economy as overall industrial output increased in April.

By , The New York Times, 06/10/2013

MarketMinder's View: Job growth is directly tied to US (usually private) economic growth, not last week’s, month’s or year’s jobs data—or even long-term averages of them.

By , The Wall Street Journal, 06/10/2013

MarketMinder's View: There are some aspects of this we clearly agree with—a simpler, less bureaucratic regulatory code would be a boon to the US economy. And we agree complicated legislation isn’t a great idea. But we find the case here to be quite overstated. Simply, the US is actually near the top of developed-world economic growth in the past few years, above the UK, Europe, Japan and many other parts of the globe.

By , Café Hayek, 06/10/2013

MarketMinder's View: Mistaking money for wealth is a common misperception held by many—and is in many economic policies, like the trade deficit. But, while money can be a means to create/receive wealth, wealth encompasses much more than money, including actual life-improving items like food, clothing and shelter.

By , The Wall Street Journal, 06/10/2013

MarketMinder's View: For markets, this is basically a non-event. Even when S&P downgraded the US’s credit rating, the bond market didn’t miss a beat—in fact, Treasury interest rates fell.

By , The Wall Street Journal, 06/10/2013

MarketMinder's View: Current and past volatility aren't predictive of future volatility. As we’ve written, we think there’s a pervasive tendency among many incorrectly crediting the Fed for the current bull markets’ gains. Further—though it can wrack nerves—volatility tends to have more short-term impact than long.

By , Agence France Presse, 06/10/2013

MarketMinder's View: Faster-than-expected GDP growth is a positive for Japan. However, if Abe doesn’t implement promised (needed) reform measures, it likely isn’t indicative of the country’s economy moving forward, nor of Abenomics’ actual impact. For more, see our 6/6/2013 cover story, “Abe Releases the Third Arrow.”

By , CNBC, 06/10/2013

MarketMinder's View: In our view, there are a number of good points raised here—most notably, former Fed Chairman Alan Greenspan’s comment that central bank intervention is holding back stocks, not boosting them. We’d add another reason beyond sentiment explaining this: QE flattens the yield curve and, hence, is contractionary.

By , The Telegraph, 06/07/2013

MarketMinder's View: “Goldilocks?” Well, maybe—the US economy’s in an enviable stretch of not-too-fast, not-too-slow growth with tame inflation. But in our view, the reason to cheer this isn’t because it may prompt the Fed to keep quantitative easing intact—we’d welcome the end of QE. Instead, a growing but not overheating economy is a nice backdrop for continued corporate profitability—and, likely, rising markets.

By , CNNMoney, 06/07/2013

MarketMinder's View: Behold, what a favorable business environment and a vibrant industry—shale fracking—can do! And shale’s benefits extend beyond North Dakota as firms nationwide likely benefit from cheaper natural gas, which reduces operating costs and helps boost profits—good for stocks.

By , The Wall Street Journal, 06/07/2013

MarketMinder's View: Though the corporate bonds aren’t without risk, the near-term risks appear rather overstated here. Historically, when interest rates rise, Treasury rates tend to rise more quickly than corporate rates, and credit spreads narrow—and corporates typically hold up relatively better.

By , China Daily, 06/07/2013

MarketMinder's View: Sure, it’s possible China’s economy could be bigger than the US and EU combined in 2030—but possible isn’t probable. And this possibility seems awfully far-fetched given China’s many challenges and the US’s many strengths. Plus, any number of unknown variables will impact all three areas between now and then—long-term forecasts are folly.

By , Bloomberg, 06/07/2013

MarketMinder's View: Ordinarily we’d cheer this news, but Brazil tends to play games with foreign investment taxes, hiking and abandoning them when they need the currency to weaken or strengthen. Such jiggery-pokery likely does nothing to encourage investment and growth over time, which is what Brazil needs.

By , The Washington Post, 06/07/2013

MarketMinder's View: It sure isn’t—many rules remain unwritten. But that doesn’t “put the entire economy at risk” from potential big bank failures, in our view—Dodd-Frank’s efficacy at limiting financial sector risk has been widely overestimated. More importantly, banks have substantially rebuilt balance sheets and are far healthier today than at many points in recent years.

By , EUbusiness, 06/07/2013

MarketMinder's View: Markets likely don’t much care about whether the IMF participates in potential future eurozone bailouts—with or without the IMF, backstops exist to limit the risk of contagion. That’s likely one reason investor confidence has improved.

By , EUbusiness, 06/07/2013

MarketMinder's View: Another sign of resilience in the eurozone core—exports and imports both rose.

By , Project Syndicate, 06/06/2013

MarketMinder's View: While this overstates the US economy’s issues, in our view, it does provide a sensible take on the effects of quantitative easing (QE) in the United States—most of the QE funds are idling at the Fed as excess bank reserves. That helps keep inflation tame, and the US economy has done fine despite QE’s fecklessness, but tapering the program likely unleashes additional economic momentum—which may give investors a positive surprise.

By , BusinessWeek, 06/06/2013

MarketMinder's View: While we largely agree investors’ newfound optimism over Japan is likely unwarranted, it’s not for the reasons described here. In our view, it’s entirely possible Japan could rediscover long-term economic vigor and health, with the right reforms in place. The long-term demographics issues widely forecasted today needn’t necessarily doom Japan to long-term decline—any number of things could change between now and 2060, like productivity, immigration policy or birth rates. For more on Abenomics, see today’s cover story, “Abe Releases the Third Arrow.”

By , The Wall Street Journal, 06/06/2013

MarketMinder's View: Reopened communications suggest the heightened tensions between North and South Korea are calming down a bit. Though North Korea has acted unpredictably in the past and will likely do so in the future—leading to short-term uncertainty and volatility—global markets have largely shrugged off the sabre rattling and likely keep doing so.

By , The Telegraph, 06/06/2013

MarketMinder's View: While Emerging Markets (EM) are an important contributor to global growth, the risks surrounding them seem overstated here. While foreign investment has underpinned a good chunk of recent EM growth, that’s not a byproduct of quantitative easing. We agree EM nations have various issues to work through (financial liberalization in China, protectionism and supply chain bottlenecks in Brazil), but these are neither acute nor insurmountable.

By , BBC News, 06/06/2013

MarketMinder's View: Heightened foreign investor interest in Greece speaks to how much investor confidence has improved in the eurozone periphery. Though Greece is a tiny part of the eurozone and global economies, its continued progress may further boost general sentiment about the region, giving stocks an additional tailwind. 

By , Financial Times, 06/06/2013

MarketMinder's View: While we always take long-term forecasts like this with a healthy dose of skepticism, feeding its huge population likely will require China to import more food over time. Producing, transporting, marketing and selling the final product (and everything in between) means many opportunities for agribusiness firms globally to capitalize—a potential boon for global markets.

By , The Wall Street Journal, 06/06/2013

MarketMinder's View: So far, reality has indeed proven the sequester’s widely feared consequences were greatly overblown, and US markets have noticed—they haven’t missed a beat this year, despite the sequester-dread headlines. But we don’t think the pain gets significantly worse from here. Government agencies have had time to make the necessary adjustments, and many are shifting spending around—getting more efficient—instead of cutting essential services, and private-sector payroll gains more than offset government cuts.

By , Reuters, 06/05/2013

MarketMinder's View: Private sector job growth may have missed expectations, but longer-term trends suggest the job market’s improving. Further, jobs data are generally backward looking and lagging. Hence, future weakness is far from guaranteed.

By , China Daily, 06/05/2013

MarketMinder's View: This shows a couple of economic fallacies at work. One, price controls don’t necessarily lead to lower prices—in fact they often lead to higher prices overall, shortages, rationing, etc. Two, while more property taxes and fewer development loans could reduce some home buying, they would also restrict future housing supply, likely driving prices higher.

By , Financial Times, 06/05/2013

MarketMinder's View: Regardless why the tax was reduced, effectively removing its financial transaction tax creates potential for more foreign investment and economic activity for Brazil, which likely only benefits the country’s economy.

By , Bloomberg, 06/05/2013

MarketMinder's View: Latvia’s probable entry to the eurozone suggests using the euro can carry economic benefits (for some) often overlooked in the hubbub surrounding struggling peripheral countries. For more, see our 05/14/2103 cover story, Latvia Likes the Euro (Lats).

By , CNN Money, 06/05/2013

MarketMinder's View: Here’s an example of trade tiffs’ abilities to spread from one industry to another. While we don’t believe anything like a trade war is in the works, we do think both economies would benefit from moving toward freer trade. 

By , Japan Times, 06/05/2013

MarketMinder's View: Abe’s “Third Arrow” announcement included some goals we’d like to see (deregulation and much higher growth), but how Abe plans to achieve them remains unclear. In our view, this ambiguity’s likely more a political move than a meaningful indicator of future action.

By , The Wall Street Journal, 06/05/2013

MarketMinder's View: Trade negotiations between Mexico and China would be a boon to each country’s economy—as well as the world’s. More, freer trade generally brings more economic opportunities for everyone involved.

By , The Globe and Mail, 06/05/2013

MarketMinder's View: Actually, we disagree. Yes, a lower currency can make exports cheaper and possibly more desirable to other countries. But a lower currency also makes imports (that likely contribute to creation of exported items) more expensive—a negative considering our global supply chain. A cheaper currency isn’t a net benefit, overall.

By , CNBC, 06/04/2013

MarketMinder's View: Three years after its passing, many of Dodd-Frank’s rules have yet to be written—but many of those that have been written are at least somewhat watered down from their original proposals. In our view, that’s a more positive development than this piece suggests—giving firms more flexibility should allow them to manage risk in a market-friendlier manner, which likely better supports economic growth. Less onerous regulation also tends to be a positive for stocks. For more, see our 10/12/2012 cover story, “Dodd-Frankly, That’s Dumb.”

By , Xinhua, 06/04/2013

MarketMinder's View: An interesting look at how insufficient intellectual property rights—and weak enforcement of the few laws that do exist—are affecting innovation in China. As innovation is, in our view, one of the driving factors behind capital markets growth, improved intellectual property rights would benefit companies and investors. That’s one more reason why economic reform is likely a key driver for Chinese stocks looking ahead.

By , Fox Business, 06/04/2013

MarketMinder's View: On balance, this highlights how the sequester has largely proved less impactful than many expected—the economy is still growing thanks to the robust private sector, and markets have performed nicely (as we expected, considering the budget cuts had been widely discussed for some time).

By , The Telegraph, 06/04/2013

MarketMinder's View: Whether the Fed eases off QE in the near term remains to be seen, but in our view, markets likely would react much better to QE’s slowing or end than posited here. As we’ve written before, QE is actually contractionary, pushing down the yield curve and removing banks’ incentive to lend—ending QE could very well aid growth by helping banks lend more freely. That would be a positive surprise for investors, as would the eventual realization fundamentals, not QE, have underpinned the ongoing market rally. For more, see our 6/3/2013 cover story, “Excess Fed Fears.”

By , Bloomberg, 06/04/2013

MarketMinder's View: While Spain remains in recession, Spanish exports have reached record levels recently, which provides an interesting counterpoint to the oft-repeated mantra that peripheral eurozone states need a cheaper currency to buoy exports. That said, while the immediate crisis has eased a bit, long-term growth investors should be aware challenges remain.

By , The Telegraph, 06/04/2013

MarketMinder's View: We agree France would likely benefit from labor reforms, but that the country would be “left behind” by Greece seems a bit overwrought in our view. Though economic growth hasn’t been stellar, France isn’t Greece or Portugal (or any other troubled peripheral country)—it’s more competitive, has a strong industrial base and robust services sector and remains a vital piece of Europe’s core. Plus, its large multinationals likely benefit from continued global growth—domestic competitiveness issues aren’t the sole driver for stocks.

By , BBC News, 06/04/2013

MarketMinder's View: Chinese solar panel duties come as no surprise as talk of imposing tariffs has been ongoing for some time, so this likely isn’t a huge game changer for markets—but it’s also not good news. Trade disputes could escalate into full-blown protectionism, which markets don’t like, as it disrupts the free flow of goods and services globally. At the moment however, that risk appears low as both sides have incentive to keep trade flowing, and global trade is trending freer on balance. For more, see our 5/22/2013 cover story, “Solar Wars: A (Un)Renewable Hope.”

By , Bloomberg, 06/03/2013

MarketMinder's View: Denmark’s regulators are the latest to give banks a bit of Basel III implementation wiggle room. Similar moves globally should help ease some of the lingering regulatory uncertainty that’s plagued Financials in recent years.

By , Bloomberg, 06/03/2013

MarketMinder's View: Monthly data like these are quite variable, and manufacturing isn’t a leading economic indicator—it’s also a tiny share of the US economy. Other, broader metrics suggest our economy remains a source of underappreciated strength.

By , The Yomiuri Shimbun, 06/03/2013

MarketMinder's View: The impact of the weaker yen—a byproduct of Japanese Prime Minister Shinzo Abe’s aggressive monetary stimulus—on Japanese importers is a big reason arrows one and two of Abenomics aren’t sufficient. Japan’s longer-term success—and likely the sustainability of its recent stock rally—will depend on the still-unspecified third arrow of structural reform.

By , The Washington Post, 06/03/2013

MarketMinder's View: More evidence of solar’s apparent dependence on subsidies and handouts like the Business Energy Investment Tax, which strongly suggests it’s not yet economically viable. Until the industry can survive and profit without government assistance, investors will likely find better opportunities elsewhere. 

By , The Wall Street Journal, 06/03/2013

MarketMinder's View: That one of Greece’s largest banks was able to raise enough private capital to avoid a state takeover speaks to how far the eurozone has come and how investor confidence in the region has improved.

By , The Wall Street Journal, 06/03/2013

MarketMinder's View: Indeed, Congress may not agree on a budget, but capital markets impact is likely minimal—Congress hasn’t passed a budget in four years, and stocks have done fine as investors have largely come to expect budgetary bickering and stalemate.