|By David Böcking, Der Spiegel , 11/30/2011|
MarketMinder's View: A swift, disorderly euro breakup would indeed likely be problematic. Yet, in our view, a wealth of evidence suggests that’s highly unlikely in the near term. For more, see today’s cover story, “Fisher Investments: Is the Euro a Relic in the Making?”
|By Jim Saft, Reuters, 11/30/2011|
MarketMinder's View: Could Japan endure a debt crisis at some point? Sure—such things are always possible. However, in our view, this piece is long on opinion, speculation and ifs, and short on supporting data. We’ll take the market’s opinion over that, and Japan’s microscopic bond rates don’t seem to indicate a looming debt crisis. And while Japan has faced challenges in recent years, its economy resumed growing in Q3, and monthly indicators likely point to growth ahead. Continued growth, coupled with Japan’s low yields, would seem to mitigate the risks of a debt crisis in the near term.
|By Matthew Yglesias, Slate, 11/30/2011|
MarketMinder's View: Yes, the global financial system is interconnected, so if the eurozone suffered an extreme event, some effects would likely be felt here. But that’s far from a “terrifying new theory,” it’s what has been common media headline fodder for going on three years. But none of this addresses the likelihood it actually happens—which in our view remains small. What’s more, the article’s citation of a panicking Polish politician is somewhat ironic, considering the nation announced today Q3 GDP was a better-than-expected +4.2%.
|By Hibah Yousuf, CNNMoney, 11/30/2011|
MarketMinder's View: We continue to wonder why anyone pays attention to ratings agencies. For more, see our 11/28/2011 commentary on The Street, “The Trouble With Ratings Agencies.”
|By Martin Strydom, The Telegraph, 11/30/2011|
MarketMinder's View: The Fed, ECB, BOE, BOJ, Swiss and Canadian central banks took coordinated action to make it easier for eurozone commercial banks to access dollar funding. In our view, this seems a sensible step to incrementally aid European banks’ access to credit markets.
|By Tom Fairless, William Launder and Emese Bartha, The Wall Street Journal, 11/30/2011|
MarketMinder's View: While it’s true some recent data from the eurozone haven’t been stellar, October German retail sales and November German unemployment data weren’t among them.
|By Staff, Associated Press, 11/30/2011|
MarketMinder's View: Record-high post-Thanksgiving sales continued on Cyber Monday, when spending was up 22% over 2010—a sign dour sentiment remains detached from reality. For more, see our 11/29/2010 cover story, “Red Hot Black Friday.”
|By Joe McDonald, Associated Press, 11/30/2011|
MarketMinder's View: More signs of monetary loosening in China—further evidence its government is attempting to tee up a 2012 economic reacceleration. This is a story to follow, as China’s 2012 loan quotas—an indication of government policy toward economic growth and inflation—are due soon. For more, see our 10/19/2011 cover story, “No Chinese Hard Landing.”
|By Staff, Reuters, 11/30/2011|
MarketMinder's View: Though one month’s data don’t equal a trend, better-than-expected private sector job growth is more confirmation of ongoing economic growth.
|By Staff, EUbusiness, 11/30/2011|
MarketMinder's View: European banks are negotiating Greek debt haircuts with EU officials, and eurozone finance ministers have agreed to release their share of Greece’s long-delayed €8 billion aid tranche—incremental steps forward for the European periphery.
|By Peter Boone and Simon Johnson, Bloomberg, 11/29/2011|
MarketMinder's View: We don’t share this piece’s ominous outlook. Eurozone politicians have actually signaled they remain committed to keeping the euro intact. In fact, if anything they’ve postured for tighter integration and controls between countries. For more, see our 11/11/2011 cover story, “Political Turnover Thursday.”
|By Justin Lahart, The Wall Street Journal, 11/29/2011|
MarketMinder's View: Even with a lackluster recovery in the housing market, the US economy is back to all-time highs. A housing recovery would be a nice tailwind, but not entirely necessary for continued growth.
|By Staff, Associated Press, 11/29/2011|
MarketMinder's View: Fitch maintained its AAA rating of US debt but lowered its overall outlook. However, we caution against reading too far into ratings agencies’ prognostications.
|By Andrea Tse, MSN.com, 11/29/2011|
MarketMinder's View: Consumer confidence results are backward-looking and presage little about the future direction of markets or the economy.
|By Don Stammer, The Australian, 11/29/2011|
MarketMinder's View: A well-reasoned look at the state of the eurozone and some options available for them to find a way forward. For more, see our 10/20/2011 cover story, “From the Eurozone Department.”
|By Staff, BBC, 11/29/2011|
MarketMinder's View: A trade pact is still far from reality, but increased trade between these two regions would be a tremendous net benefit. For more, see our 10/04/2011 cover story, “Freeing Trade.”
|By Mark J. Perry, Carpe Diem, 11/29/2011|
MarketMinder's View: A sensible look at the real impact of tariffs on trade balances. “Even though we usually think of increasing exports as the route to increased domestic manufacturing output and employment, Canada's trade policy of reducing tariffs for its manufacturing sector highlights the important contribution of imports to domestic manufacturing.”
|By Justin Lahart, The Wall Street Journal, 11/29/2011|
MarketMinder's View: State and municipal governments’ finances are beginning to improve, thanks to the resurgent US economy and prudent fiscal measures—which typically happens at a delay after recessions end.
|By Paul Krugman, The New York Times, 11/28/2011|
MarketMinder's View: Well, we agree with the first part of the first sentence, “The supercommittee was a superdud.” Neither a Tobin Tax nor higher income tax rates is a great idea in our eyes—capital is best left in the hands of those who use it most efficiently. And in our view, that’s not Uncle Sam.
|By Damian Reece, The Telegraph, 11/28/2011|
MarketMinder's View: A few points: First, why anyone would attempt to forecast what a ratings agency might do—or why they pay attention to raters in the first place—is a bit beyond us. Second, using history to understand a range of possible outcomes is a fine enough thing, especially if what you’re assessing is how people react to a type of event. But thinking history provides a precise play-by-play of how events might unfold is to misuse history, in our view.
|By Staff, BBC, 11/28/2011|
MarketMinder's View: The US holiday retail season started off with a bang this past weekend—retailers tallied a record $52.4 billion in sales.
|By Mark J. Perry, Carpe Diem, 11/28/2011|
MarketMinder's View: “The fact that consumer loan and credit card delinquency rates are back to pre-recession levels and below historical averages is part of the ongoing de-leveraging of American households.” Data continue to show US consumers are neither dead nor massively over-indebted.
|By Nathan Myhrvold, Bloomberg, 11/28/2011|
MarketMinder's View: One of the counterintuitive things about capitalism and market-oriented economies is failure is generally a necessary precondition for successful innovation. And that’s something the government has often struggled with in its quest to foster the next great thing—be it in energy or elsewhere. In our view, the struggle to develop alternative energy that works well would be best done in the private marketplace without subsidy. Some would likely fail. Some wouldn’t. And that’s how sustainable technological advancement generally happens.
|By Bill Keller, The New York Times, 11/28/2011|
MarketMinder's View: We don’t really think the economic philosophy debate’s tenor is materially different than the past. Think of the debate between communists and capitalists, for example—that goes back over a century. But this article isn’t really documenting the debate either. “There really is a textbook way to fix our current mess. Short-term stimulus works to help an economy recover from recession.” We’re not sure what mess is being referred to or what recession. The US is in expansion. And the notion short-term stimulus definitively works is a bit of a stretch—that’s theory, not fact.
|By Fisher Investments MarketMinder Editorial Staff, The Street, 11/28/2011|
MarketMinder's View: Our latest contribution to The Street.
|By Nicholas Kulish and Steven Erlanger, The New York Times, 11/28/2011|
MarketMinder's View: Eurozone leaders are continuing to discuss deepening the monetary union’s interconnected nature, establishing greater fiscal oversight among member nations. This is far from done but is an interesting and potentially important story to watch.
|By Jeremy Warner, The Telegraph, 11/25/2011|
MarketMinder's View: Could the eurozone and single currency come to an end? Yes, that’s a possibility. But the suggestion “there’s no orderly way of doing this” is a stretch, in our view. Fact is, European leaders have a vested interest in doing what they can to ensure the currency either remains intact or dissolves in an orderly fashion.
MarketMinder's View: The vast majority of Japan’s debt is domestically owned—seemingly making the likelihood global fear of Japan’s overall indebtedness level collapses its economy. Plus, Japan’s notched some strong growth numbers recently, indicating it’s started recovering from this year’s natural disasters. And overall, Japan’s had a high debt-to-GDP level for many years without it causing major issues. This seems mostly a function of prevalent debt fears than anything.
|By Conor Dougherty, The Wall Street Journal, 11/25/2011|
MarketMinder's View: The theory there’s been some fundamental shift in consumers’ spending patterns may be intriguing, but it doesn’t hold much water looking at the data. At a macroeconomic level, the reality is what consumers spend money on just isn’t as important as the fact they’re spending money.
|By Michael W. Peregrine, New York Times, 11/25/2011|
MarketMinder's View: The intended consequences of SarbOx must be weighed against the unintended consequences, which are largely overlooked here. The reality is, the fraudulent actions SarbOx was aimed at were largely already covered in existing laws—making the cost seemingly outweigh the benefit.
|By Staff, Der Spiegel, 11/25/2011|
MarketMinder's View: Here’s an interesting look at the ins and outs of Germany’s opposition to euro bonds. While at this point, talk of a collective eurozone bond is just talk, developments are something to keep an eye on.
|By Muneeza Naqvi, Associated Press, 11/25/2011|
MarketMinder's View: Safeguards or not, more open borders bode well for the global economy and for Indian citizens as improved infrastructure makes food cheaper and other goods more available.
|By Allan S. Roth, Financial Planning, 11/25/2011|
MarketMinder's View: We’d object with some minor aspects of this, but overall, it’s a solid look at how investors’ brains can work against them. It’s a good read and one to truly consider and think through with respect to investment decision-making.
|By William Horobin, The Wall Street Journal, 11/25/2011|
MarketMinder's View: We don’t blame France for the sentiment—and we continue to wonder why people pay attention to credit ratings agencies since they’ve proved, time and again, they’re often late to the game and sometimes downright wrong. See our 11/14/2011 cover story, “This Week in Flubs,” for more.
|By Joh Gui Qing, The Globe and Mail, 11/23/2011|
MarketMinder's View: In our view, China’s recent deceleration is likely temporary—and primarily centrally planned. Other data, like a jump in October loan growth, suggest the government is likely gearing up for a 2012 reacceleration to coincide with the transfer of power from President Hu Jintao to a new government. For more, see our 10/19/2011 cover story, “No Chinese Hard Landing.”
|By Maya Jackson Randall, The Wall Street Journal, 11/23/2011|
MarketMinder's View: Looks like the Durbin Amendment’s made pretty much no one happy—which isn’t terribly surprising given government typically isn’t the best arbiter of bank fee minutiae. In our view, markets handle such decisions much better on their own.
|By Eric Morath and Tom Barkley, The Wall Street Journal, 11/23/2011|
MarketMinder's View: Yes, consumer spending growth slowed from September to October—but growth is growth. In our view, rising spending and incomes are another incremental positive for the US economy.
|By Aaron Smith, CNNMoney, 11/23/2011|
MarketMinder's View: We’d argue this news largely exemplifies how far removed eurozone sentiment is from fundamentals. Germany has a competitive economy, a lower debt load than most of the eurozone and its recent growth has been just fine.
|By Mike Hanson, Real Clear Markets, 11/23/2011|
MarketMinder's View: Our own Mike Hanson’s latest for Real Clear Markets.
|By David Boaz, Cato @ Liberty, 11/23/2011|
MarketMinder's View: An important reminder of the myriad reasons we have to be thankful, regardless of day-to-day concerns.
|By Dan Caplinger, The Motley Fool, 11/23/2011|
MarketMinder's View: “But the lesson you need to remember is that there’s no such thing as a free lunch, and if a yield looks too good to be true, you should dig deeper until you figure out how each investment produces the income it pays.” Indeed!
|By John Steele Gordon, Bloomberg, 11/23/2011|
MarketMinder's View: We’ve often said the Dow is a broken index, and this piece shows a few reasons why it doesn’t accurately reflect the broader markets.
|By Alkman Granitas, The Wall Street Journal, 11/23/2011|
MarketMinder's View: The New Democracy Party’s Antonis Samaras was hesitant to pledge support for austerity measures in writing, but he did reassure European leaders Greece is committed to making necessary changes to restore it to a sustainable economic path—which seemingly helps clear the way for Greece to receive its latest aid tranche.
|By Kathleen Madigan, The Wall Street Journal, 11/22/2011|
MarketMinder's View: One thing seems certain: Uncertainty always exists, to varying degrees. That Congress chooses to dither and politick is nothing new, in our view, and is about as much a certainty as anything. However, the economy continues to expand further and companies continue to post better-than-ever earnings and revenues. For more, see our 11/22/2011 cover story, “Super Stalemate.”
|By David Wessel, The Wall Street Journal, 11/22/2011|
MarketMinder's View: This article’s one-sided view of multinational employment is problematic. Consider: It states US multinationals employ 6.9 million US workers and 4.6 million abroad. However, it fails to mention foreign multinationals employ over 5.3 million Americans as well—an important point for balanced consideration. For more, see our 10/20/2011 column, “That (Non-Existent) Giant Sucking Sound.”
|By Jia Lynn Yang, The Washington Post, 11/22/2011|
MarketMinder's View: We’re all for lower taxes and allowing consumers and businesses to allocate more of their capital as they choose (though we’d quibble with the notion the economy needs this or any other government stimulus). But we’re unconvinced the supercommittee’s failure indicates much of anything, much less about one specific provision already slated to expire at year end. The supercommittee wasn’t formed to extend payroll tax cuts; it was formed to reduce expenditure growth over the next 10 years. So the two things seem quite independent of one another, and there’s no reason Congress couldn’t extend this—or any other measure, for that matter.
|By Daniel Woolls, Associated Press, 11/22/2011|
MarketMinder's View: Like Italy recently, rising Spanish yields aren’t great—but they’re not an immediate doom trigger either. Moreover, comparing what Spain pays on its debt and the IMF’s fixed rate on loans to Greece and Portugal is a faulty comparison to say the least. For more, see our 11/10/2011 cover story, “Italian Debt Perspective.”
|By Ben Casselman, Real Time Economics, 11/22/2011|
MarketMinder's View: “Each month brings new reports of Americans’ gloom — the major consumer sentiment indexes have been mired in recessionary territory for months—and yet actual spending has continued to rise.” Watch what people do, not what they say. For more, see our recent column at The Street, “Are People Lying in Consumer Confidence Surveys?”
|By Gideon Rachman, Financial Times, 11/22/2011|
MarketMinder's View: There’s been much rhetoric maligning the role of markets in the European debt situation. However, as this piece lays out, markets aren’t the enemy.
|By Staff, Associated Press, 11/22/2011|
MarketMinder's View: Despite all the consternation over banks’ health, earnings rose over the summer to their highest level in nearly four years. Of course, troubles in Europe could have an impact on US banks (though it’s unlikely in our view) and that makes it a story worth watching. But for now, US banking appears to have stabilized.
|By Hyung-jin Kim, The Globe and Mail, 11/22/2011|
MarketMinder's View: As fractious as US politics can be, no tear gas has been needed (at least thus far). But all scuffles aside, the result—South Korea’s approval of the US trade deal, with implementation scheduled for February 2012—is a positive for both economies as barriers to trade continue to fall around the world. For more, see our 11/07/2011 column, “Taxing Chickens (and Trucks).”
|By Lawrence Summers, Financial Times, 11/21/2011|
MarketMinder's View: In our view, the US doesn’t lack demand. Moreover, the size of the economic pie isn’t fixed—meaning growth in the top end’s income doesn’t detract from everyone else. Ultimately, income inequality is a political problem—often cited to curry voter favor—with next to no economic meaning.
|By Ambrose Evans-Pritchard, The Telegraph, 11/21/2011|
MarketMinder's View: First, the fact Spain has a new government isn’t new and surprising news. Socialist Former Prime Minister Zapatero had already announced he’d not run for reelection and the Socialist candidate was well behind in the polls from the get-go. Second, this article presumes Spain has equal problems driven by the same cause as Greece, Italy, et al. That’s far from the case—all have unique situations driven by country-specific factors. With all that said, current-account deficits and cross-border trade imbalances aren’t likely culprits for peripheral nations’ problems.
|By Tavia Grant, The Globe and Mail, 11/21/2011|
MarketMinder's View: It’s true unemployment is elevated in many parts of the developed world. But that it remains elevated two years after a recession has ended isn’t very unusual. Folks often struggle with this concept, but unemployment can remain elevated for very long periods after recessions. Extrapolating the past two years out to mean we face a decade of weak labor markets is a stretch.
|By Steven Russolillo, The Wall Street Journal, 11/21/2011|
MarketMinder's View: We’d use a different description: The super committee amounted to super-normal politics as usual. And claims a super committee failure will have a meaningful influence on investor
|By Natasha Brereton-Fukui, The Wall Street Journal, 11/21/2011|
MarketMinder's View: Once again: Why anyone pays much attention to ratings agencies is utterly beyond us.
|By Staff, Reuters, 11/21/2011|
MarketMinder's View: Forget the focus on the trade surplus or deficit. Instead, look at total trade. Adding Japanese exports and imports shows October trade rose materially—likely a sign of continued healthy overall global economic activity.
|By Staff, Fox News, 11/21/2011|
MarketMinder's View: Whether the super committee reaches an agreement or not isn’t very impactful for markets. In fact, it’s not even very impactful for the budget, considering all the legislative wrinkles Congress could work into the mix. A few of those are highlighted here.
|By Staff, BBC, 11/21/2011|
MarketMinder's View: Political turnover in the PIIGS is now officially complete, with Spain’s Socialist party taking a drubbing in Sunday’s election. New Prime Minister Mariano Rajoy seems poised to carry forward and implement reforms and austerity.
|By Staff, EUbusiness, 11/21/2011|
MarketMinder's View: Free-trade agreements have swept the globe the past few years, but there are still more in the pipeline at various stages of development. This isn’t a done deal, but it’s an interesting story to watch.
|By Mark J Perry, Carpe Diem, 11/21/2011|
MarketMinder's View: Recent economic data point to continued US economic growth ahead. This is one prime example. For more, see today’s cover story, “Earnings and Implications.”
|By Staff, Econbrowser, 11/18/2011|
MarketMinder's View: We’d argue economies have slowed in some areas and reaccelerated in others. Overall, the global economy does seem to have reaccelerated with pockets of weakness, which is normal. The world never moves in perfect lockstep.
|By Antonia van de Velde, CNBC, 11/18/2011|
MarketMinder's View: It’s much too soon to call the October deal a failure! None of it has even been implemented, and impacted nations (Italy, Greece, Spain) have governments in flux. What that deal did show, however, is eurozone leaders’ continued willingness to do whatever’s necessary to prevent a sudden, messy euro dissolution.
|By Dakin Campbell, Bloomberg Businessweek, 11/18/2011|
MarketMinder's View: What Fitch said was, if the PIIGS situation worsens, they may put US banks on watch. That’s a long leap to presuming “contagion.” At the same time, Fitch maintained its stable rating of the US banking industry.
|By Jeff Cox, CNBC.com, 11/18/2011|
MarketMinder's View: None of the reasons in this article are materially new. And some aren’t even inherently economical! Street protests may garner headlines, but they’re much more a political issue (if anything) than a material, long-term driver of capital markets.
|By Kathleen Madigan, The Wall Street Journal, 11/18/2011|
MarketMinder's View: We take the LEI with a heavy dose of skepticism always, but the underlying data in the index largely confirm our view that the US economy is accelerating.
|By Bernd Radowitz, The Wall Street Journal, 11/18/2011|
MarketMinder's View: In our view, it makes sense for the UK to act in its own best interest—and such a tax likely only incrementally diminishes competiveness of the financial sectors in those nations that adopt it. For more, see our 11/17/2011 cover story, “Taxation and Competitiveness 101.”
|By Elisabetta Povoledo and Rachel Donadio, The New York Times, 11/18/2011|
MarketMinder's View: Italy undoubtedly faces significant economic challenges. This plan is an aggressive move to labor market liberalization—something Italy does need. Whether it passes the political process remains to be seen. For more, see our 11/10/2011 cover story, “Italian Debt Perspective.”
|By Editorial Staff, The Economist, 11/18/2011|
MarketMinder's View: “By cutting barriers, strengthening intellectual-property protections and going beyond a web of existing trade deals, [the TPP] should boost world trade.” And that’s a good thing, in our view.
|By Atif Mian and Amir Sufi, Bloomberg, 11/17/2011|
MarketMinder's View: We’d quibble the US currently does not have an aggregate demand problem. Further, we’d suggest the recovery, growth and elevated unemployment we’ve seen since 2008’s financial crisis and ensuing recession are relatively similar to recent historical recoveries—and so not much in need of explanation.
|By David Lynch, Bloomberg Businessweek, 11/17/2011|
MarketMinder's View: We’d argue that while the gap between the top and the bottom may have grown, the reality is, over time, the rising tide has lifted all boats—those in the middle and bottom income-earning groups have better access to countless higher quality goods and services. Not only that, there’s significant evidence those in the top income group don’t stay there indefinitely—meaning income mobility is alive and well. For more, see our recent piece on Real Clear Markets.
|By Jennifer Liberto, CNN Money, 11/17/2011|
MarketMinder's View: Well, anyone who feels they pay less than they’d like or should in taxes is welcome to make a donation anytime here.
|By Anna-Louise Jackson and Anthony Feld, Bloomberg, 11/17/2011|
MarketMinder's View: The key words in this article are “may,” “might” and “could.” Which shows you’re about to read a tour de force of the possible—not the probable. For one thing, conjecturing what already volatile data points like consumer spending, personal savings and the stock market could do seems of dubious value. In reality, consumer spending has remained fairly robust and has recently been notching new all-time highs.
|By Bill McGuire, ABC News, 11/17/2011|
MarketMinder's View: As we’ve said before, the ratings agencies very rarely provide information of much value—and this seemingly falls into that category, considering almost none of the information in the report here was new.
|By Anthony Faiola and Michael Birnbaum, The Washington Post, 11/17/2011|
MarketMinder's View: The case shouldn’t be overstated—European officials still seem largely devoted to maintaining the eurozone—but this is an interesting look at France and Germany’s individual prejudices and motivations when it comes to the various options for backstopping struggling countries.
|By Simon Moore, The Wall Street Journal, 11/17/2011|
MarketMinder's View: “Centralizing decision-making in such circumstances, therefore, is asking for trouble. Central planners have less information and poorer incentives to get decisions right than do market actors. They are also bad at correcting mistakes quickly.” We wholeheartedly agree. For more, see our 11/14/2011 column, “Supply-Side Schooling from Shale.”
|By Lucia Mutikani, Reuters, 11/17/2011|
MarketMinder's View: While the fact unemployment’s lagged other economic data hasn’t much surprised us, the reality is it’s continued showing slow improvement in recent months.
|By Andre Da Loba, Bloomberg Businessweek, 11/17/2011|
MarketMinder's View: An interesting look at one of Italy’s biggest challenges—the inflexibility of its labor force—and its deleterious effects on their economy.
|By Don Boudreaux, Cafe Hayek, 11/17/2011|
MarketMinder's View: And an interesting rhetorical question from Dr. Boudreaux.
|By Anthony Faiola and Michael Birnbaum, The Washington Post, 11/17/2011|
MarketMinder's View: The case shouldn’t be overstated—European officials still seem largely devoted to maintaining the eurozone—but this is an interesting look at France and Germany’s individual prejudices and motivations when it comes to the various options for backstopping struggling countries.
|By Julia Werdigier, The New York Times, 11/17/2011|
MarketMinder's View: The sale of the British government’s stake in the formerly nationalized lender reduces government involvement in the banking business—a sensible move seemingly underscoring the improved overall health of Britain’s financial sector.
|By Robert Winnett, The Telegraph, 11/16/2011|
MarketMinder's View: EU officials continue to rake Britain over the coals for blocking the financial transactions tax. Said one high-ranking German: “Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we’re letting the British get away with.” We fail to see why Britain, or any country, should be forced to adopt policies it feels aren’t in its best interests.
|By Staff, Reuters, 11/16/2011|
MarketMinder's View: Yes, Italy will need to roll over a good amount of debt early next year. However, that’s likely not as costly as this piece suggests. If rates stay around 7% from February through April (the heavier funding months—and, in our view, unlikely), the net interest cost increase is likely €5.6 billion over current payments—no small amount, but also not insurmountable. For more, see our 11/10/2011 cover story, “Italian Debt Perspective.”
|By Mark Gongloff, The Wall Street Journal, 11/16/2011|
MarketMinder's View: We have no quibble with the author’s bullishness—we think stocks are the right place to be now, too! But there’s a wealth of data suggesting technical analysis, on its own, isn’t a useful investing tool. In our view, basing investing decisions solely on what’s happened in the past, without consideration of present and forward-looking fundamentals, is a lot like driving while looking only in the rearview mirror.
|By Ben Levisohn, The Wall Street Journal, 11/16/2011|
MarketMinder's View: Seasonal investing maxims like the “January Effect” and “Sell in May” have largely proven empty over time.
|By Hyung-Jin Kim, Associated Press, 11/16/2011|
MarketMinder's View: The US has ratified its free trade deal with South Korea, but now it’s held up in South Korea’s parliament. The main opposition party has said it won’t support the deal unless the provision on trade dispute arbitrations is renegotiated. Ratifying the deal would be beneficial for both countries, but unfortunately, it appears politicking may delay it still longer.
|By Andrew Lilico, The Telegraph, 11/16/2011|
MarketMinder's View: Though Italy certainly has its issues, it’s worth noting the country has historically borne high debt-to-GDP ratios without defaulting, most recently in the 1990s. “This doesn’t in itself prove that the Italians will not default this time. But it is one very important way in which Italy is totally unlike Greece.”
|By Philip Levy, Real Clear Markets, 11/16/2011|
MarketMinder's View: Japan’s potential accession to the Trans-Pacific Partnership is the subject of heated debate there. Joining the Pacific Rim would likely be a net positive for Japan, though as this piece explains, it’s too early to handicap whether that actually happens. For more, see today’s Research Analysis, “Japan Enters Trans-Pacific Partnership Conversations.”
|By Richard Guylas, The Australian, 11/16/2011|
MarketMinder's View: A look at some of the potential unintended consequences of the new Basel banking reforms—namely, less bank lending and increased costs to consumers. How banks and financial institutions respond to regulatory changes is important to keep an eye on.
|By Nick Squires, The Telegraph, 11/16/2011|
MarketMinder's View: Prime Minister Mario Monti has picked Italy’s new technocratic government, which is expected to be confirmed in Parliament by week’s end. For now, Monti appears to have broad parliamentary support, but various factions have already indicated they may not support any reforms they view as overly harsh, like a wealth tax. Italy’s political situation thus bears watching. For more, see our 11/15/2011 cover story, “Molto Mario?”
|By Travis Berge, Early Elias and Oscar Jordan, Federal Reserve Bank of San Francisco, 11/15/2011|
MarketMinder's View: The world economy has never been subject to a period where some great challenge or story hasn’t been a threat to growth. Yes, the eurozone has its fair share of problems to fix, but that doesn’t necessarily portend a recession for the US should things not work out perfectly. Assigning probability to that outcome, especially using the methodology here, is purely academic and serves little real-world use. For more, see our 10/28/2011 cover story, “A Dash of Growth and a Pinch of a Plan.”
|By Henry Nothhaft, Bloomberg, 11/15/2011|
MarketMinder's View: We disagree with the notion the US has lost its clout as a global manufacturer or even that more manufacturing jobs are needed to stymie the unemployment rate. In fact, although we find some of the policy predictions noted here particularly sensible, they’re predicated on false premises.
|By Jared Bernstein, Christian Science Monitor, 11/15/2011|
MarketMinder's View: Yes, regulation can create and destroy jobs. But the real question isn’t the short-run direct effect, but rather the broader impact. So while heavy-handed regulation may well create some jobs in compliance or bringing factories up to code, the long-run costs and effects hamper growth—which is the ultimate job creator in the long run. To claim regulation doesn’t impact job creation is to argue the capital used in rule compliance wouldn’t be used to expand, grow, increase production and more. To not address this is a major omission—and to claim anyone is arguing we should “deregulate everything” is to slay a straw man.
|By David Jolly, The New York Times, 11/15/2011|
MarketMinder's View: Despite the ongoing debt situation and political turmoil in Europe, the region still managed to grow in the second and third quarters—anemic growth, to be sure, but still growth—predominantly concentrated in the stronger core nations. That said, real GDP is only 1.5% below its 2008 peak.
|By Guy Dinmore and Giulia Segreti, Financial Times, 11/15/2011|
MarketMinder's View: It seems new Italian PM Mario Monti is making headway toward forming a new government to implement reforms. With that said, much work remains to be completed. For more, see today’s cover story “Molto Mario.”
|By Staff, RTTNews, 11/15/2011|
MarketMinder's View: New York area manufacturing activity grew more than expected in November’s survey, providing further evidence economic conditions are better than many appreciate.
|By Chris Isidore, CNN Money, 11/15/2011|
MarketMinder's View: Despite dour consumer confidence surveys and the best-laid economist forecasts, consumers kept spending in October. This emphasizes a view we’ve long held—consumer spending is more resilient than many believe. For more, see our 11/01/2011 cover story, “County Candy (and Earnings).”
|By Staff, Reuters , 11/14/2011|
MarketMinder's View: Strip away the interpretation and opinion here to see the facts: The OECD, not known for being an outrageously bullish body, projects continued US growth in 2012, and its composite leading indicator showed developed world growth continued in September, albeit at a slightly slower pace. Oh, and it’s the slowest pace since December 2009, a period of growth and right before acceleration. The headline could easily read, “Nobody Will Escape Volatility in Some Econometrics.”
|By Ian Bremmer and Nouriel Roubini, The Wall Street Journal, 11/14/2011|
MarketMinder's View: This is an overly bearish slant that all too liberally bandies about the term “crisis,” posing the supposedly “real question” of which economy stumbles first. But looking at data, it appears to us a hard landing isn’t likely in China and US growth accelerated in Q3—all while Europe’s debt saga has continued. So maybe the real question isn’t who stumbles first, but rather, how much and how long does economic growth continue before another recession? Only problem is, the article makes no attempt to tackle that question.
|By Stephen Gandel, Time, 11/14/2011|
MarketMinder's View: That creditors didn’t want to restructure Jefferson County’s debt after it defaulted isn’t the driver of their financial woes. It’s the aftermath of financial woes driven largely by graft and corruption involved in a costly overhaul of the sewer system to meet federal mandates. This seems mostly like banker bashing to us.
|By Josh Mitchell, The Wall Street Journal, 11/14/2011|
MarketMinder's View: Maybe the super committee will impact consumer sentiment. But then again, consumer sentiment has proven time after time a fairly unreliable indicator regarding future consumer behavior. For more, see our 11/10/2011 column, “The Not-So-Super Committee.”
|By Gobby Wang, Taiwan News, 11/14/2011|
MarketMinder's View: Talks on the Trans-Pacific Partnership, a vast project involving lowering barriers to trade on both sides of the Pacific, seem to be getting more and more participation. This is a long way from complete, but it’s an interesting and potentially important story to watch.
|By Matt Stichnoth, Bankstocks.com, 11/14/2011|
MarketMinder's View: We continue to scratch our heads, wondering why anyone pays ratings agencies much attention. For more, see today’s cover story, “This Week in Flubs.”
|By John Tamny, Forbes, 11/14/2011|
MarketMinder's View: As we’ve said, the idea Greece can simply leave the euro and devalue its way back to prosperity is probably quite unrealistic at this point.
|By Mark J. Perry, Carpe Diem, 11/14/2011|
MarketMinder's View: Supply-side economics at work. The development of shale gas resources has been a boon to regional economies, like Pennsylvania’s Marcellus Shale region—creating jobs both directly in extracting gas and indirectly meeting needs and wants of companies and workers. For more, see our column, “Supply-Side Schooling from Shale.”
|By Staff, RTT News, 11/14/2011|
MarketMinder's View: Japan’s GDP grew 6% y/y in Q3, showing the recovery from March’s earthquake and tsunami is proceeding.
|By Staff, Associated Press, 11/11/2011|
MarketMinder's View: This article claims two consecutive quarters of GDP contraction are a recession, and that’s occurred in Hong Kong. Later, the article says Hong Kong grew +4.3% Q3 after growing 5.1% in Q2. That’s not contraction or a recession—it’s growth rate deceleration, which is still growth and not a recession.
|By Dmitri Smirnov, Seeking Alpha, 11/11/2011|
MarketMinder's View: Similarities between the eurozone now and the financial crisis in 2007 are tenuous at best. Eurozone banks are much better capitalized now, and a key factor not in play today is deleterious impact of the new abandoned FASB 157 “fair value” rule.
|By Robert Tracinski, Real Clear Markets, 11/11/2011|
MarketMinder's View: “Capitalism is how human beings live and function. The alternative, as history shows, is not some other system but the collapse of all economic activity.” Too true.
|By Anna-Louise Jackson and Anthony Feld, Bloomberg, 11/11/2011|
MarketMinder's View: US manufacturing is still growing—further evidence supporting continued economic growth.
|By William Boston, Andreas Kisslers and Matthias Rieker , The Wall Street Journal, 11/11/2011|
MarketMinder's View: Is Germany taking a page out of Ireland’s book? Germany, in much better fiscal shape than many of its euro neighbors, is making an effort to be more competitive with lower tax rates.
|By Laurence Norman, The Wall Street Journal, 11/11/2011|
MarketMinder's View: Can’t say we blame them. The ratings agencies have proven themselves as Johnny-come-lately inefficient government-approved oligopolies. Whether the proposed rules will be adopted—or prove any better—remains to be seen.
|By Staff, Associated Press, 11/11/2011|
MarketMinder's View: More free trade is a global incremental positive. For more, see our 06/29/2011 cover story, “Spend and Trade.”
|By Nouriel Roubini, Financial Times, 11/10/2011|
MarketMinder's View: Yes, Italy’s yields have gone up recently, but that doesn’t necessarily mean they stay there indefinitely—as indicated in part by Thursday’s very successful debt auction. And even if they do remain elevated temporarily, that needn’t spell Italy’s (or the eurozone’s) doom, given the structure of debt coming due in the near term. For more, see today’s cover story, “Italian Debt Perspective.”
|By Liz Rappaport, The Wall Street Journal, 11/10/2011|
MarketMinder's View: Our quibble with this is the suggestion mark-to-market accounting helped mitigate the severity of 2008’s financial panic. On the contrary: In our view, it was precisely rules like FAS 157 and mark-to-market accounting standards that exacerbated 2008’s severity. For more, see our 05/16/2011 cover story, “Marking to Footnote.”
|By Ambrose Evans-Pritchard, The Telegraph, 11/10/2011|
MarketMinder's View: It’s important to consider the (in our view, likely sizeable) role politics are playing in the latest eurozone developments. Consider how many times since the spring officials have seemingly dug in and reached an impasse, only to ultimately resolve the disagreement of the day and continue their plodding progress. The likelihood that changes now, when all parties stand to lose quite a bit should progress stop or reverse, seems fairly slim, in our view.
|By Stergios Skaperdas, The New York Times, 11/10/2011|
MarketMinder's View: Reviving the drachma and devaluing have become increasingly common suggestions for helping Greece resolve its woes. Trouble is, it’s oversimplified: Replacing a viable currency folks do have confidence in with one they know will probably be devalued likely causes vast short-term pain in Greece—and likely isn’t a panacea to cure Greek ills.
|By Suzanne Daley and Niki Kitsantonis, The New York Times, 11/10/2011|
MarketMinder's View: A step in the right direction for Greece. Maybe now that they have a new leader, they can agree to the EFSF expansion and help ease some of the tension elsewhere in the periphery. For more, see our 11/08/2011 cover story, “Mediterranean Musical Chairs.”
|By Giada Zampano, The Wall Street Journal, 11/10/2011|
MarketMinder's View: It seems Italy is making political progress as well. While it no doubt takes some time to address the various eurozone concerns, the fact individual countries as well as supranational organizations continue to hammer away decreases the likelihood of a sudden eurozone implosion.
|By Cartherine Rampell, The New York Times, 11/10/2011|
MarketMinder's View: An interesting, slightly different take on jobs data—as we’ve said, unemployment historically recovers after the economy and markets, and recent signs of some thawing in employment mobility may point to more improvement ahead.
|By Staff, EUbusiness, 11/10/2011|
MarketMinder's View: Increasing global trade openness benefits all parties involved—and organizations like the WTO are a means to that end. For more, see our 11/03/2011 cover story, “Promoting Peace and Prosperity.”
|By Mark J. Perry, Carpe Diem, 11/10/2011|
MarketMinder's View: “The September volume of exports ($180.3 billion) was the highest monthly export volume in history . . . a further sign that a recovery in worldwide economic conditions has increased demand for US products.”
|By John Stossel, Reason, 11/10/2011|
MarketMinder's View: Melodramatic title aside, this is a sound look at the impact onerous regulation can have on potentially life-saving products.
|By Louise Armistead, The Telegraph, 11/09/2011|
MarketMinder's View: That Greece, Portugal and Ireland sought bailouts when their sovereign yields hit 7%, in our view, seems more coincident than causal. Each of those nations had unique structural issues that rendered open-market funding exceedingly difficult, but Italy’s situation is different. Its large economy is still growing, it runs a primary surplus, several austerity measures and state asset sales are already in progress and it boasts more efficient tax collection than Greece. That’s not to say Italy won’t need help of some form, but we’d caution against lending the 7% threshold much significance.
|By Derek Thompson, The Atlantic, 11/09/2011|
MarketMinder's View: We’re frankly not sure why it’s news there’s a wealth gap between younger folks—who are likely just starting out—and older folks, who’ve likely been accumulating wealth for decades. It shouldn’t exactly be a shock older, more experienced workers are generally paid commensurate with that resume.
|By Staff, Bloomberg, 11/09/2011|
MarketMinder's View: As we often say, such long-term forecasts tend to be futile. Extrapolating today’s problems over time, without accounting for all of the unknown innovations and developments that can and likely will arise between now and then, seems unlikely to yield accurate results.
|By Jamie Grierson, The Independent, 11/09/2011|
MarketMinder's View: In our view, using Britain’s widening trade gap to argue its economy is “suffering” is off base. Total trade is a more meaningful metric, and that exports grew modestly while imports rose more indicates healthy trade and domestic demand.
|By Alex Kowalski, Bloomberg Businessweek, 11/09/2011|
MarketMinder's View: The inventory-to-sales ratio remains super low, which could buoy production and output as demand increases. For more, see our 10/17/2011 Research Analysis, “US Economic Update.”
|By Neelabh Chaturvedi, The Wall Street Journal, 11/09/2011|
MarketMinder's View: This article has good and bad points to it, like the fact it seemingly stresses what appears to us a highly arbitrary level of rates and speculation regarding the future. But it also sensibly points out not all Italy’s debt comes due at once and the higher level of rates, while not great, isn’t necessarily a game-changer.
|By Aaron Back and Tom Orlik, The Wall Street Journal, 11/09/2011|
MarketMinder's View: China seems increasingly likely to loosen loan quotas when they reset at yearend—one of several reasons we believe a Chinese hard landing is unlikely. For more, see our 10/19/2011 cover story, “No Chinese Hard Landing.”
|By Frank Dohmen and Barbara Schmid, Spiegel, 11/09/2011|
MarketMinder's View: As this piece illustrates, removing subsidies that prop up industries can allow innovation and creative destruction to take their natural courses—likely net positives for society and the economy over time.
|By Nassim Nicholas Taleb, The New York Times, 11/08/2011|
MarketMinder's View: There are myriad things wrong with this piece. It all starts from a central premise: Bankers are greedy, and if left to their own devices, they’ll take massive risks in search of huge bonuses. Now, without question, some banks probably did take excessive risk. But the cause of 2008’s financial panic wasn’t excessive greed, it was misguided regulatory actions like FAS 157 and later, poor steps taken by government regulators. Moreover, is all risk taken by a bank bad? What about loans small businesses looking for capital to hire new employees? Risky! Would we want to curtail that too? A world without risk and reward isn’t one we want to live in, and thinking the government knows exactly where to draw that line is folly.
|By Staff, Reuters, 11/08/2011|
MarketMinder's View: Retail sales may have slowed a bit in South Korea, but they were still positive at 3.8% year over year. As we often say, slower growth is still growth.
|By Gideon Rachman, Financial Times, 11/08/2011|
MarketMinder's View: At this juncture, European politicians have recognized a closer fiscal union between member countries is the only workable solution to their troubles. A sudden, disorderly breakup of the union would be a sizeable negative for markets, in our view. Nor is it likely abandoning the euro would make all peripheral Europe’s woes disappear.
|By Kathleen Madigan, The Wall Street Journal, 11/08/2011|
MarketMinder's View: We’d argue it’s impossible to forecast the distant future since there are so many unknown variables. There’s little chance anyone’s methodology—no matter how smart they are—can account for all the innovations, political and regulatory changes, trade agreements and other developments that could arise between now and then.
|By Fisher Investments Editorial Staff, The Street, 11/08/2011|
MarketMinder's View: Our latest contribution to The Street.
|By Elisabetta Povoledo, The New York Times, 11/08/2011|
MarketMinder's View: Italy’s beleaguered prime minster won a confidence vote on austerity measures, but it may prove a pyrrhic victory as he fell short of the 316 votes required for a true majority. One coalition partner is urging him to resign, and it seems Berlusconi has acquiesced. For more on Italy’s political uncertainty, see today’s cover story, “Mediterranean Musical Chairs.”
|By Staff, EU Business, 11/08/2011|
MarketMinder's View: The so-called Tobin tax could have knock-on effects on Europe’s economic growth and capital markets activity, so Britain’s effort to block it seem sensible to us.
|By Staff, RTT News, 11/08/2011|
MarketMinder's View: Indian trade posted a solid month in October, with both imports and exports sharply rising—a good sign the global economic expansion likely continues.
|By Shahien Nasiripour, Michael Mackenzie and Nicole Bullock, Financial Times, 11/07/2011|
MarketMinder's View: Housing has indeed been a weak spot. But keep in mind, that’s been true for the past nine consecutive quarters of economic growth. While a rebound in housing would be a nice additive to growth, it’s not required. Continued housing weakness, which should be expected, doesn’t portend weak overall economic growth ahead.
|By Brad Plumer, The Washington Post, 11/07/2011|
MarketMinder's View: Yes, unemployment is still weak, but that says more about past economic weakness than where the economy is headed. For more, see today’s cover story, “20 Numbers to Help Illustrate Unemployment.”
|By Ambrose Evans-Pritchard, The Telegraph, 11/07/2011|
MarketMinder's View: This piece largely ignores the improvements, though incremental, Italy has made in the past few months. Eurozone officials have also shown a steadfast resolve to preserve the euro (and its membership).
|By Nate Silver, The New York Times, 11/07/2011|
MarketMinder's View: As always, we are politically unbiased and favor neither. But we’d quibble with the basis for this study. General elections are won on a number of variables not considered here. What’s more, some of the factors included here are inherently arbitrary. And either way, we believe 2012 is uniquely situated to be a positive year for stocks. For more, see our 08/11/2011 column, “How Will The Election Year Impact Your Portfolio?”
|By Mark J. Perry, Carpe Diem, 11/07/2011|
MarketMinder's View: “In addition to the increase in economic activity that results directly from increased domestic energy production, there are additional increases in jobs, output and economic activity that result indirectly from increased oil and gas production, with increases in rail traffic being just one of many examples.”
|By Thomas Black, Bloomberg, 11/07/2011|
MarketMinder's View: Ignore the sensationalized title. The real story is companies are investing to expand output and production—which should underpin ongoing economic growth.
|By Daniel J. Mitchell, Cato @ Liberty, 11/07/2011|
MarketMinder's View: It’s perhaps not as simple as this, but it is clear Greece doesn’t have a debt problem so much as it has a socialism problem.
|By George Melloan, The Wall Street Journal, 11/07/2011|
MarketMinder's View: A sensible piece on creating a trans-pacific free trade zone. For more, see our 11/03/2011 cover story, “Promoting Peace and Prosperity.”
|By Robert Samuelson, Real Clear Politics, 11/04/2011|
MarketMinder's View: The analogy used here that Greece somehow represents the world economy is, in our view, a massive stretch. The thought process is political leadership to drive the global economy to growth is somehow missing. Yet the world economy is growing. Beyond that, much of this article is speculation and contrary to facts on the ground, like the fear protectionism is rising globally—all while we’ve had myriad free trade agreements signed year to date and scant few protectionist measures adopted.
|By Rex Nutting, MarketWatch, 11/04/2011|
MarketMinder's View: Yes, job growth hasn’t come as fast as many hope. But even the author admits the fallacy of the story, saying, “This is not a prediction, it’s simply an extrapolation of current trends.” That’s spot on—but then why use this in the end to call for more government action?
|By Chris Farrell, Bloomberg Businessweek, 11/04/2011|
|By Jeff Tjornehoj, Financial Planning, 11/04/2011|
MarketMinder's View: This might be tautological, but it’s true: Volatility is high until it isn’t. The point is volatility isn’t predictive of anything—direction, magnitude or even of itself. So it’s a fallacy to attempt to construct a portfolio solely to avoid it. And the prescriptions and evidence here are faulty to say the least.
|By John Tamny, Real Clear Markets, 11/04/2011|
MarketMinder's View: “The definition of productivity is reducing costs without reducing output, and American manufacturers have done just that. But as evidenced by the rise of better paying managerial and professional work, Americans have hardly suffered this increase in productivity.”
|By Staff, BBC News, 11/04/2011|
MarketMinder's View: Political leaders continue to show their willingness to work together to maintain stability in the global economy.
|By Brian Blackstone, The Wall Street Journal, 11/04/2011|
MarketMinder's View: The ECB cut rates by 25 basis points yesterday. It was unexpected, but ultimately not hugely surprising—officials continue to take steps to bolster the eurozone as necessary. For more, see today’s cover story, “24 Hours in the Eurozone.”
|By David Brooks, The New York Times, 11/04/2011|
MarketMinder's View: “Already, shale gas has produced more than half a million new jobs…. If current trends continue, there are hundreds of thousands of new jobs to come.” Fracking, like many new industries or technologies, has its detractors (largely on the grounds of environmental concerns). But in our view, this innovation has enormous benefits we’ve likely only begun to reap. And ultimately, if concerns are proven valid, technology can likely alleviate them through time. For more, see our 07/29/2011 cover story, “The American Energy Revolution.”
|By Damien Cave, The New York Times, 11/04/2011|
MarketMinder's View: Far be it from us to suggest this has a potentially big market impact—not much in Cuba would, considering its size and lack of openness. But we include this article because we find it interesting. Cuba could do with a massive, market-oriented overhaul of its economy—this is only one minor aspect.
|By Mark Calabria, Cato @ Liberty, 11/04/2011|
MarketMinder's View: This is another article discussing a topic that likely doesn’t have a huge impact on stocks or the economy. But it is an interesting look at some options that could potentially help housing—not by “bailing out” anyone, really, but by speeding up the market adjustment process, which is an interesting thought.
|By Daniel Indiviglio, The Atlantic, 11/03/2011|
MarketMinder's View: Well, we’d quibble with just about all of this. Sure, we’d all prefer faster growth and improvement in employment, etc.—but growth is still growth, and the reality is there’s not a single recession or depression in history we haven’t recovered from. So the chances this one’s different seem inordinately low.
|By Frank Aquila, Bloomberg Businessweek, 11/03/2011|
MarketMinder's View: Housing’s undoubtedly lagged other areas of the economy when it comes to recovering from the recent bear market and recession—but housing makes up a small portion of the overall economy, so the likelihood it’s the silver bullet the economy’s waiting for to kick in gangbusters growth is slim at best.
|By Stephanie Clifford, The New York Times, 11/03/2011|
MarketMinder's View: Same-store sales at big retail chains rose +3.4% in October. Sure, that’s slower than August’s and September’s hotter rates. But just as it was apparently a mistake to extrapolate October’s number from August and September’s sequential acceleration, it’s equally mistaken to extrapolate November and December from October. Economic statistics, as we’ve often said, are variable and volatile.
|By Chris Arnold, NPR, 11/03/2011|
MarketMinder's View: We agree mostly with the “other economists” (whoever they are) who say “innovation will save the day: New industries and new technologies will spring up with new kinds of jobs for people that we can’t yet anticipate.” Yes, technology can be disruptive in the near term, and that can be painful for workers. But the fact is, we’ve innovated new, more efficient ways to do things since the wheel’s discovery—so the vast majority of folks displaced have ultimately found new jobs in new (or the same) industries.
|By Rachel Donadio and Niki Kitsantonis, The New York Times, 11/03/2011|
MarketMinder's View: A concise look at the current status of the ever-shifting Greek political situation.
|By John Stossel, Reason, 11/03/2011|
MarketMinder's View: “Anytime we can use fewer resources and less labor to produce one thing, that leaves more for other things we can’t afford. If we save money buying abroad, we can make and buy other products.” Exactly. For more, see our 10/20/2011 column, “That (Non-Existent) Giant Sucking Sound.”
|By Chris Edwards, Cato @ Liberty, 11/03/2011|
MarketMinder's View: Some enlightening examples of why the government is quite often a less efficient spender than the private sector.
|By Geoffrey Smith and Ainsley Thomson, The Wall Street Journal, 11/03/2011|
MarketMinder's View: “The more complex and specific regulation gets, he said, the more lawgivers play in the hands of banks and their lawyers, who merely invent new products enabling them to get around the new regulations.” We largely agree—whenever possible, regulations should be straightforward as opposed to onerous and complex because it increases the likelihood they accomplish their goal with fewer negative unintended consequences.
|By Sudeep Reddy, The Wall Street Journal, 11/03/2011|
MarketMinder's View: And we shouldn’t—potential unintended consequences aside, fact is, taxes like this are mostly likely to encourage consumers to look for a cheaper alternative. And in a fully global market, there are myriad alternatives.
|By Staff, Central News Agency, 11/03/2011|
MarketMinder's View: Free trade has been expanding for much of the last few years, and it shows few signs of slowing. And we agree this would be another beneficial agreement to add to the growing list. For more, see today’s cover story, “Promoting Peace and Prosperity.”
|By Ralph Nader, The Wall Street Journal, 11/02/2011|
MarketMinder's View: Setting aside the fact this piece doesn’t quite get around to defining “speculation,” we think it’s a solution in search of a problem. What many consider “speculative” trading—think options, futures contracts and the like—generally bring more liquidity, transparency and more efficient price discovery, which can actually help institutions and individual investors mitigate risk. In our view, levying a surtax on these instruments would interfere with a vital function of free markets.
|By William Pesek, Bloomberg, 11/02/2011|
MarketMinder's View: Yes, it’s quite likely China tries to use their potential contribution to the EFSF as a political bargaining chip. But bear in mind, the fact China owns a chunk of US Treasurys hasn’t stopped the US government from taking Beijing to task for human rights, the yuan’s artificially low value or anything else. Thus, in our view, it seems unlikely Europe will pay a great (or any) political price for Chinese EFSF participation.
|By Kevin Carmichael, The Globe and Mail, 11/02/2011|
MarketMinder's View: We’d argue this article has it just backwards. Eurozone politicians have increasingly shown they have the will to do what’s necessary to backstop Europe’s periphery and maintain the monetary union.
|By Staff, EU Business, 11/02/2011|
MarketMinder's View: A rundown of the latest political back-and-forth over Greece and its pending referendum on last week’s eurozone agreement. Expect more and more politicking as the saga continues. For more, see today’s cover story, “Greek Curve-Ball.”
|By Giada Zampano and Stacy Meichtry, The Wall Street Journal, 11/02/2011|
MarketMinder's View: Italian austerity efforts continue—a positive step forward in that country’s efforts to tackle its high outstanding debt. Though, it remains to be seen whether Prime Minister Berlusconi has enough remaining political capital to push needed reforms through Parliament.
|By David Harsanyi, Real Clear Politics, 11/02/2011|
MarketMinder's View: “If the wealthy get wealthier, no one has to become one penny poorer.” Indeed! And in fact, as this piece shows, society is largely getting wealthier top to bottom, and opportunities for economic mobility abound. There’s simply no need for top-down wealth redistribution—capitalism has worked just fine.
|By Shannon Bond, Financial Times, 11/02/2011|
MarketMinder's View: Though unemployment is a lagging indicator, this is nonetheless another sign the US economy is healthier than many think. For more, see our 10/21/2011 cover story, “A Preponderance of the Evidence: Growth.”
|By Staff, Central News Agency, 11/02/2011|
MarketMinder's View: Spurred on by the US’s newly ratified free trade agreement with South Korea, Taiwan is trying to free trade with several nations. If they’re successful, it would likely promote competition and increased activity on both sides of the Pacific—positives for all involved. For more on the global push for freer trade, see our 10/17/2011 cover story, “Racing Towards Zero.”
|By Niki Kitsantonis and Rachel Donadio, The New York Times, 11/01/2011|
MarketMinder's View: Greece is calling for a national referendum on the newly designed bailout plan—a move dripping with political motivations. There are certainly issues of major concern out of Europe, but the politicking in Greece today seems mostly like another round of gamesmanship—realistic options are few for Greek leaders at this point. For more, see our 10/28/2011 cover story, “A Dash of Growth and a Pinch of a Plan.”
|By Catherine Boyle, CNBC, 11/01/2011|
MarketMinder's View: This article says a lot about media reporting: The same analyst whose (in our view, overly dramatized) quote was the source of the title continues to say, “We don’t believe the world is going into global recession.” Why wasn’t that the article’s title? We’ll let you draw your own conclusions.
|By Angela Monaghan, The Telegraph, 11/01/2011|
MarketMinder's View: Although the UK’s third quarter result was less than robust, growth is growth. As we’ve said many times, economic growth rates frequently fluctuate, and it’s a mistake to read too much into any one quarterly statistic.
|By Thomas H. Kee Jr., MarketWatch, 11/01/2011|
MarketMinder's View: There’s little here we agree with: Swing trading, technical analysis and leveraged ETFs are unlikely to generate long-term and repeatable successes. Folks don’t seem to like this, but there is no one with a proven, public history of repeatably timing the short-term ups and downs of the market. For more, see our 10/27/2011 cover story, “Costly Clarity.”
|By Lucy Nicholsen, Reuters, 11/01/2011|
MarketMinder's View: Although growth in the US manufacturing sector slowed in line with trends elsewhere, it still reflected growth and expansion—as did China’s. These measures don’t always move up in a perfectly straight line. They’re subject to some slowing followed by some reacceleration—all perfectly normal.
|By Don Boudreaux, Café Hayek, 11/01/2011|
MarketMinder's View: As Dr. Boudreaux points out, contrary to what some would have you believe, Americans still spend the vast majority of their expenditures on goods and services made right here in the USA.
|By Charles Lane, The Washington Post, 11/01/2011|
MarketMinder's View: An interesting take on the debate over US infrastructure.
|By Thom Lambert, Truth on the Market, 11/01/2011|
MarketMinder's View: An entertaining and on-point take on the arrival of the world’s seven billionth resident. For more, see MarketMinder editor Lara Hoffmans' Forbes blog post, “7 Billion Reasons Malthus Was Wrong.”
|By Adam Shell, USA Today, 11/01/2011|
MarketMinder's View: Ignore the somewhat sensationalized title and the backward-looking reflections on a good October. This is a largely sensible piece on some of the factors that could contribute to a strong run for stocks ahead. This is not all-inclusive, of course, but it’s an interesting glimpse.