Wednesday, April 2, 2014

Socially Responsible Investing: What Is Externally Imposed Morality Worth?

In the 50s, 60s and 70s we had stakeholder capitalism.  Company managements believed they had an obligation to their employees, customers, and communities. But, no way around it, this was in conflict with the objective of maximizing shareholder returns. In an environment of sharply greater competition (80s and 90s) a stakeholder focus was gradually viewed as an insupportable luxury. Shareholder activism enforced and accelerated this trend.

Today, as described in the journal article below, it's revenge of the "do-gooders".  The acronym in force used to be SRI, for socially responsible investing. Today the accepted jargon is "environmental, social, and governance" or ESG. While I'm sympathetic with some of their objectives, I question whether morality can be meaningfully imposed by external forces - however congenial the capitulation. Does any of this mean anything or is it all just a sophisticated branding exercise, ultimately in service to nothing more than higher returns for shareholders?

More Companies Bow to Investors With a Social Cause -

Tuesday, April 1, 2014

HFT Trading: It Doesn't Matter If It Does No Harm, Does It Do Any Good?

The reaction of financial market participants to Michael Lewis' new book, Flash Boys, is irritating in the extreme.  The  typical response is, yawn, nothing new here and I understand the plumbing better and all the outrage is overdone.  I'm so sophisticated and blase, tell me something really useful or important... etc., etc.

Is High Frequency Trading (HFT) evil?  I don't know.  Can I prove that it costs investors $X Billion dollars per year?  No.

But it doesn't matter.  All that matters is whether it fails the test of whether any particular financial innovation is in the public interest (remember that?).  There could be others but here are two simple ones:

Does HFT add complexity to systemically important markets? Yes, obviously
Does HFT decrease public confidence in the fairness of these markets? Yes, obviously

Have we all got attention spans so short we remember nothing about the causes of the financial crisis?  IMHO, a major takeaway should have been that the era of "if it isn't illegal, don't worry be happy" laissez-faire approach to financial regulation was a key culprit.  Allowing banks, Fan and Fred, and other financial players to "innovate" in the interests of "greater productivity" (after years of cheer leading by the likes of Greenspan and Robert Rubin), or letting them invent whatever new "markets" and sell whatever new "products" - just have well resourced and super competent regulators micro-regulate all these new things.  Didn't work out so well, did it?  Did we learn nothing!?

Remember that thing called the Great Recession that millions of Americans are still coping with everyday?  If you think "financial innovation" didn't directly contribute to the massive levering of America over the decades prior to the crisis, you're staring at trees and oblivious of the forest.

To put it very simply, just because it is legal and we can't prove definitively that elderly widows are losing big chunks of their nest eggs, doesn't mean it should be legal!  There are bigger and more important issues here, such as, is this a good thing for our nation or the world?  Does it make the system riskier, less predictable, and less trustworthy?  If there is an argument in favor of HFT against these criteria, I'm all ears.  But getting lost in the weeds as to who loses how many pennies and which exchange is plugged in to which HFT is completely missing the plot.  If Michael Lewis can get the attention of our famously shallow and inattentive government officials as well as the general public to have a genuine debate about adding complexity and further reducing Main Street's belief that the Wall Street is completely rigged...GOOD.

WSJ: Book Review: 'Flash Boys' by Michael Lewis

Monday, March 31, 2014

The Astonishing Rise of the Financial Sector Must Be Stopped

Below is a link to an excellent review of recent academic papers rebutting the notion that bigger and bigger financial sectors (typically meaning bigger and bigger firms) and "financial innovation" are somehow good for countries and good for the world. This idea, popularized by the likes of Greenspan and Rubin has turned out to be patently false. Yet this Godzilla continues to control much of the government via vast lobbying and contributions. Obama has failed most spectacularly here. He had the best opportunity since Glass-Steagall to enact real bi-partisan reforms, but instead of taking back the country and economy for its citizens, he fell into the same damn trap as hundreds of politicians before him: he couldn't resist the money. He thought, instead of rejecting this filthy lucre, I'll take it and use it against the real enemies of the country (Republicans).  When will another chance come along?

The Banks that Ate the Economy by Howard Davies

Sunday, March 30, 2014

Abe Is Failing, What Next For Japan?

Japan shifts agenda as Abe's arrows miss -

During New Year's week in Tokyo, workers carefully penned their wishes for salary hikes in 2014 and tied the small pieces of paper on which they wrote to trees in the grounds of the city's many temples. Meanwhile, their bosses dug up records going back almost two decades for information on formulas governing any potential increase in wages.

It has been that long since workers received more than token increases in their remuneration.

Wages have been falling in real terms since the late 1990s. Masaaki Kanno, JPMorgan's chief economist in Japan, predicts that real wage income will drop 1.4 per cent in 2014, the largest annual drop outside recessions since 1980, when records first were kept.

Yet if Prime Minister Shinzo Abe is to succeed in revitalising Japan, boosting domestic incomes is a vital part of the process. The test will come in a few weeks. March is when the annual ritual of wage negotiations takes place. Optimism is not warranted, however. The talk is more of one-time bonus payments than of meaningful, lasting hikes in wages. Moreover, 40 per cent of the labour force is temporary or part time, and those workers are unlikely to see any gain at all. Their hourly pay is already less than half that of full-time workers.

Abenomics flagging

It is clear that Abenomics is running out of steam. Indeed, most analysts believe one reason for this is Mr Abe's apparently waning commitment to his own reform programme. Ministry of Finance bureaucrats recently presented a former US Federal Reserve official visiting the capital with a list of 30 reforms they claimed were in the works. None of them was significant, or even memorable. JPMorgan's Mr Kanno recently noted that reform on the three core issues of agriculture, medicine and labour has failed to show any real progress.

Data in the past few weeks have not been exactly upbeat. After surging 4.4 per cent annualised in the first half of last year, GDP decelerated sharply to a more trend-like 1 per cent gain in both the third and fourth quarters, JPMorgan economists noted. Both the private consumption index and core machine orders fell in December, the latter almost 17 per cent. GDP figures are being revised down and the trade deficit has dramatically worsened.

There will probably be worse in store come April. It is typical of Japan's bureaucrats that they plan to raise the consumption tax at that time from 5 per cent to 8 per cent and simultaneously to introduce yet another fiscal stimulus package to offset the contractionary impact of the tax just as the economy softens. It would have been far better to put more money in the hands of the people than in the hands of the government.

The country's numerous – though intermittent – fiscal packages have had virtually no multiplier effects over the past two decades. They are more a resource transfer to the bloated, inefficient construction sector than a catalyst for sustained growth.

Moreover, given the government's determination to drive down the yen, the cost of imported energy is going up, which means people's purchasing power is being eroded. Meanwhile, exports have been weak while imports have surged.

Nationalist agenda

The Bank of Japan is likely to ratchet up its easy money policies and purchase ever more securities. But the effect is more likely to push up asset prices (especially Tokyo property prices) than to boost the real economy.

It is therefore little wonder that the Topix index is down more than 6 per cent in the year to date, the worst performance of any of the major asset classes JPMorgan monitors.

More worrying, though, is that Mr Abe appears more committed these days to his nationalist agenda than to his economic programme, given his visit to Yasakuni shrine, his efforts to redefine the constitutional limits on military activity and his preoccupation with a new national security law. He has already increased the budget for the self defence forces, Japan's closet army, after 11 years. Some historians say that since the Meiji era back in the 1860s, Japan has never recovered from recessions except through war (preferably other peoples' such as the Korean war and the Vietnam war).

On Christmas Eve, the Nikkei newspaper asked whether Japan's supply of ammunition to a UN peacekeeping mission in South Sudan "could pave the way for broader weapons exports". Meanwhile, Japan's relations with its neighbours continue to deteriorate both because of those nationalistic policies and its cheap-yen policy.

That is one reason why shares like those of Mitsubishi Heavy Industries, a defence play, have been among the stronger performers. But does that rising stock price reflect the restored animal spirits of the Japanese or something more worrying?

Friday, March 28, 2014

Economic consequences of income inequality

This is quite a long piece and non-students of economics may find it tough slogging. However, I think it's extremely significant because it provides the first strong argument I have heard of for why inequality (or the Middle Class Cull, as I call it) has significant negative consequences for countries and for the world.

Sent from my iPad

Justice Department Gives Green Light To White Collar Crooks

One of the most disappointing failures of the Obama administration is their rolling over for the financial industry: big banks are bigger than ever and precious few of the gangsters who helped cause the global financial crisis have been prosecuted.  There WAS the political will and popular support for doing this, across the spectrum from the Tea Party to progressives.  He had other priorities I suppose. 

A Loan Fraud War That's Short on Combat -

Wednesday, March 26, 2014

Crowdfunding, I Still Don't Get It: Oculus Sells Out To Facebook for $2 Billion, Kickstarter "investors" Get Nothing

In late 2012, Oculus raised $2.4 million on Kickstarter (as well as VC money).  The company was sold a year and a half later for $2 Billion.  What did the 9,500 Kickstarter “contributors” receive?  Zip.

I get why startup companies want free money.  I don’t get why people give dollars in return for… updates? T-shirts?  Who are these numskulls?!


Tuesday, March 25, 2014

Tools To Fight Back: Regain Some Privacy From Big Tech & NSA

This is an excellent summary of some of the new tools developed to meet the surging demand for online privacy.  Browsers and search engines that don't snoop/sell your data, cookie trackers, social site analyzers (how much are you really sharing) and more.  This is just the beginning (hopefully) to restoring the internet to a neutral highway of discovery, commerce, etc., instead of a creepy place where your every move is monitored and monitized for the benefit of Google before being handed over the snoops at the NSA.

Big Tech Guilty of Collusion, Systematically Screwing Employees

Revealed: Apple and Google's wage-fixing cartel involved dozens more companies, over one million employees | PandoDaily

Thursday, March 13, 2014

What's Going On In China? Recent Events and Their Significance Within Context of Key LT Trends

Is China slowing NOW?  Is the big collapse predicted for years by US hedge fund managers actually happening NOW?
"This is terrible," said Liu Li-Gang, a Hong Kong-based economist at ANZ Bank. "I wasn't expecting high figures, but this is worse than I thought."
Industrial output rose 8.6% year-over-year in the January-February period, down from a 9.7% increase in December, data from the National Bureau of Statistics showed Thursday. The rise in the two months—combined to adjust for distortions from the Chinese Lunar New Year holiday—is the slowest since 2009.
Growth in fixed-asset investment also eased to 17.9% year-over-year, the weakest pace since 2002, down from 19.6% last year as a whole. While activity continues to expand, the pace of growth is poor by Chinese standards. It now seems unlikely that economic growth in the first quarter of this year will match the 7.7% year-over-year rate logged in 2013.
Shortly before the data were released, Chinese Premier Li Keqiang expressed confidence that the nation would reach its economic targets for the year, brushing aside doubts from some foreign economists.
"Currently we see more difficulties (than last year)…but the Chinese economy has great potential and resilience," Mr. Li said, adding that he was confident Beijing could keep growth in a reasonable range.
Beijing has set an economic growth target of about 7.5% this year, unchanged from the 2013 target, though down from the actual growth recorded last year.
Despite the fact that data were combined for the two months, analysts say the economic figures so far this year may still include distortions from the period when many factories close down and migrant workers return to distant villages for the new year celebration. "Usually the March data would be slightly better than the first two months," said Ma Xiaoping, an economist at HSBC in Beijing.The median forecast of 13 economists surveyed by The Wall Street Journal was for industrial production to grow by 9.5%, much faster than the actual growth seen.
Markets turned southward after the unexpectedly weak figures, but the reaction was muted as traders weighed the possible holiday effect. Hong Kong's benchmark Hang Seng Index was down 0.4% within minutes of the release, and the Australian dollar fell less than 0.2%.
Other indicators, released together on Thursday, pointed to weakness elsewhere in the economy. Retail sales rose 11.8% year-over-year in the January-February period, down from 13.6% year-over-year growth in December. Construction starts, a key driver of growth in recent years, fell by 27% in area terms.
The key point is that growth must and will slow from here. Half of China's 7.5% growth today is coming from debt financed investment in property, infrastructure and factories - 3 sectors with huge excess capacity. If Chinese GDP is slowing sharply in 2014, that is positive for china longer term. If Bejing reacts to slower growth with fresh stimulus, the inevitable day of reckoning will be that much worse. Even if they continue to remove stimulus and follow through on critical reforms (interest rates, banks, SOEs, property taxes, just to name a few), the probability of an accident, a bank run, a systemic freeze-up of some kind, in this very large and complex country, is, IMHO, more than 50%. 

Two stories from the irreplaceable Caixin touching on the one area where china is undertaking dram if reform: the financial system. Specifically, the entry of Alibaba and Tencent, two tech giants that rank as among the best managed companies in china, into the business of accepting consumer d"deposits", on-line and earning interbank interest rates far above what the big ugly stupid SOE banks are permitted to pay (in rough terms 5% versus 1%). These two upstarts have raised in excess of $100 billion dollars in about half a year.  The Bejing authorities have said public ally they like what they see. But sucking out all the deposits from the traditional banks will expose their ginormous non-performing loans and force the government to once again bail out the banks. Is Beijing prepared for this? This all bears a vague resemblance to the end of Reg Q in the US in the mid-eighties.  Reg Q set a maximum savings account interest rate. The entry of aggressive S&Ls, willing and legally permitted to pay higher rates, sucked deposits from banks and forced the end of Reg Q. 

Rate liberalization driven by tech, approved by BJ
5 new private (I.e, not state-owned), one each for alibaba and tencent, are I final stages of winning approval. 

Buyer Beware!  China has a big risky macro story but investors cannot lose sight of the fact that there's still a morass of fraudulent companies (became clear to all in the 2011 reverse merger US listed china frauds), and that china still lacks rule of law with regard to corporate theft, and still lacks a transparent and rules based resolution process. Instead, politically well-connected PRC promoters are untouched whilst politically connected PRC creditors often get paid back partly with company assets - while US/offshore investors get nothing. Don't forgot this! China is a large stock market with a small % of investible companies. Most large cap stocks are low quality SOEs, and many small cap are either frauds or low quality bizs. Stocking picking in China remains a minefield, regardless of what happens on macro/reform. This piece from Caixin tells a tale of woe all too common for foreign investors into Chinese stocks. 

George Soros agrees with me. I've been saying this for a year but Soros' view probably carries more weight! Europe will survive and the periphery will stay in the Euro.  The US will continue to show mediocre, disappointing growth - but with de minimus risk of recession. The biggest risk to global risk assets is a step-wise drop in Chinese growth. 

Monday, March 10, 2014

Seth Klarman Cries Wolf, Talks Up Own Book

Seth Klarman, a truly great investor who thinks markets are complacent about 90% of the time! is warning in his most recent quarterly letter of how crazy valuations are for risk assets and how a crash is inevitable. The FT chooses to make this "front page" news today. Only one thing - Seth has been saying the same thing in every quarterly letter for the last four years. Worse, Klarman's Baupost fund generates essentially all it's great long term performance during and after market crashes. Yes, signs of excess are growing and yes, stocks don't look cheap but Klarman is the last guy to listen to for asset allocation advice.

One of the world’s most respected investors has raised the alarm over a looming asset price bubble, calling out “nosebleed valuations” in technology shares like Netflix and Tesla Motors and warning of the potential for a brutal correction across financial markets.

Seth Klarman, the publicity-shy head of the $27bn Baupost Group whose investment opinions have attracted almost a cult-like following, said that investors were underplaying risk and were not prepared for an end to central banks reversing a five-year experiment in ultra-loose money.

While noting that he could not predict exactly when a significant market correction would occur, Mr Klarman wrote in a private letter to clients: “When the markets reverse, everything investors thought they knew will be turned upside down and inside out. ‘Buy the dips’ will be replaced with ‘what was I thinking?’ . . .  Anyone who is poorly positioned and ill-prepared will find there’s a long way to fall. Few, if any, will escape unscathed.”

Sunday, March 2, 2014

Poster Child for Lunacy of African Frontier Market Bullishness: Ghana

Don't worry about China or Brazil, don't worry about a "flattening out" of the commodity supercycle, "Frontier Markets" offer consumer-driven, reform-driven, sustainable growth - with no correlation to BRICs, EMs, or any global equities!  This was the story among the smart money endowment and foundation investors a few years ago.  This was always rubbish and is becoming increasingly obvious to the poor folks who fell for it. 

Now you might say, "oh Ghana, there just one of those tiny African countries, there are so many of them, some of them will always be struggling" but Ghana's economy is bigger than those of Uganda and Kenya and it was important enough for Emerging Market Debt investors to buy $750 million of USD bonds last year at the astonishing rate of 8% (thus demonstrating the close contest between EME and EMD investors for who is the most gullible). 

Well Ghana has fallen on hard times.  This is a horrible thing for it's people and the suffering of institutional investors in Ghana is nothing to that of the Ghanians.  But... these well paid, so called "smart money" investors are learning that Africa is absolutely connected to the global economy and to global financial markets.  The fall in commodity prices (gold and cocoa in this case) has had a crushing effect.  Twin current account and budget deficits have gapped out and the currency is plummeting.  Inflation is in double-digits and interest rates are almost 20%.  Here's all the gory details:

Why is Ghana's currency collapsing?

Monday, February 24, 2014

Brazil enters recession: the great EM mirage now obvious

There used to be serious debate about how dependent Brazil is to rising commodity prices. Now we have the answer: completely. 

Brazil's economy seen in a major downturn

(via Instapaper)

Sent from my iPad

Wednesday, February 19, 2014

C'est Le Catastrophe!

Three equal partners?  One a Chines SOE, one the French government, the third a French aristocratic family?  Making cars in Europe? Starting as #7 or 8? What insanity!

Dongfeng, French State to Take Minority Stakes in Peugeot -

Sent from my iPhone

Sunday, February 16, 2014

Africa Launches State-Sanctioned Pogram of Gays

Nigeria and Uganda enacting laws making gays illegal, whipping up deep cultural and religious hatred of gays for political gain. Where is the condemnation and threat of sanctions from Kerry and Obama about this abomination?

Mob Attacks More Than a Dozen Gay Men in Nigeria's Capital

DAKAR, Senegal — A mob attacked gay people in a neighborhood in Abuja, the capital of Nigeria, dragging young men from their homes, beating them with nail-studded clubs and whips, and shouting that they were "cleansing the community" of gays, several Nigerian activists and a witness said Saturday.

The attack took place late Wednesday night in the Gishiri neighborhood, and one victim was beaten nearly to death, the witness said. Afterward, the mob of about 50 young men dragged four of the victims to a nearby police station, where the police further beat and insulted them, said the witness, who gave his name as John. His last name is being withheld for his safety.

The attack came in the wake of a new law signed by President Goodluck Jonathan prescribing prison sentences of up to 14 years for gay people. There have been recent episodes of similar mob violence in the Muslim-dominated north of Nigeria.

In Abuja, the witness and the activists said, some in the mob were shouting, "We are working for Jonathan!"

About 14 young men were assaulted, the activists said, and no members of the mob were arrested.

"They all had weapons," John said. "Some were having wires, whips. Some had broken furniture. They said they wanted to kill. They were moving around from one person's house to another."

John said he was cowering in his apartment, extinguishing his candle and hiding as the mob tried to break down his door.

"I heard them beating one guy up," he said. "The guy was pleading with them and begging them. They beat until he could not fight back."

The violence continued at the police station. "The police were calling them names, saying, 'You guys are the ones spreading H.I.V.,' " John said. "They were slapping them and beating them."

When the attack was over, the attackers wrote on the walls of the houses that were stormed, "Homosexuals, pack and leave," according to an activist, Ifeanyi Kelly Orazulike, who went to help rescue some of the victims.

Activists said the mob violence was a sign that the new law appeared to have given mobs license to act on widespread antigay sentiment in Nigeria.

"The government has given a go-ahead authority to mob jungle justice," said Mr. Orazulike of the International Center for Advocacy on the Right to Health. "This is unacceptable. You can't attack people violently because of whom they choose to love."

Another activist, Dorothy Aken'Ova, accused the government of tacit complicity. "The leaders are just watching, and now the Nigerian social fabric is being disintegrated by acts of mob violence," she said. "Now we have this new category as a result of the new law. And the government is quiet."

(via Instapaper)

Sent from my iPad

Saturday, February 15, 2014

The Middle Class Cull = Greater Economic Cyclicality

Interesting stats in this New York Times piece showing that 60% of consumption is made by the highest 20% in income.  So the top 20% generate more consumer spending than everyone else combined – by a wide margin.  The top 5% in income generate almost 40% of consumption!

Obviously, spending for the top 5% is basically all discretionary whereas spending for the bottom 80% is majority non-discretionary.  So the wealth effect has become magnified and economic growth should experience greater variability.

Also, of course, as the article lays out, any businesses targeting the middle class are getting crushed.


Wednesday, February 12, 2014

Conservatives, Repeat after me: It's not Obama's fault!

This piece by William Galston in the Wall Street Journal is a terrific review of the most important issue facing this country and the world: the gutting of the middle class (what I refer to as the Second Gilded Age).  It calls for a drastic response by both conservatives and liberals.  Most of the old ideas have been rendered irrelevant by the new world order where capital and a few lucky and/or brilliant folks get all the wealth and where the "low income" category becomes the great majority of workers.  We need new ideas - but first there has to be an appreciation of the scale and importance of the issue. I appreciate his unwillingness to even mention Obama.  Yes, ACA is likely to have made things a tiny bit worse but otherwise what Obama has done or not done has had very little impact on this.

The biggest economic story of this era is the Great Decoupling of wages and benefits from economic productivity. There has been a massive shift of national output from labor to capital. With it have come stagnating household incomes and a creeping loss of confidence. Translating productivity gains into rising living standards for average families is the country's central economic challenge.

Galston points out the fact that labor recieved 2/3 of national income in 1947 and 1973 but now the figure is below 60%.  And he recognizes that this is a global issue.

Since 1990, labor's share of total output has declined in almost every country. In half of them, the decline began in the 1970s and amounts to 10 percentage points or more. The U.S. is anything but an outlier. Summarizing a large body of research, a 2012 report for the Organization for Economic Cooperation and Development (with 34 member countries) attributes this development to three principal factors: the worsening position of low-education workers, changes in technology, and the globalization of production, competition and capital flows.

This great hollowing out has been masked by two trends since 1990: rising debt and the entrance of China, India, Russia, and other EMs into the global economy.

But U.S. household debt reached unsustainable levels by 2007, and the boom in developing countries—especially China, India, Brazil, South Africa and Turkey—appears to have peaked. As both Europe and the U.S. are discovering, the domestic market still matters, and weak gains in household income are bound to retard economic growth.

He discusses infrastructure spending, increasing the minimum wage, and improving public schools as things that would help but only at the margin.
But the facts push me to a more radical conclusion: We cannot expect robust, sustainable economic growth unless we can figure out how average households can participate in the fruits of that growth, as they did in the postwar period. We need nothing less than a new norm—a revised social contract—that links compensation to productivity. And because we cannot return to the conditions that once sustained that link, we need new policies to bring it about. Neither political party has come close to proposing anything of the sort, and the American people know it.

Maybe even Fox can come around to the idea that lower taxes and smaller government are pathetic responses to this ugly new paradigm.

Tuesday, February 11, 2014

Bitcoin is not a currency

Bitcoin is a commodity, not a currency.  It has some similarities to gold.  Forget all the technobabble and central bank wonky-talk.  It's not a currency because a currency is a store of value.  Does this look like a store of value?

No, it does not.  It looks rather like an old fashioned bubble.  The Finns have come to the same conclusion.

Ivy League: Built with slave money

US academia founded and built with money from slave traders and owners.  Not only that, but were often actively hostile to abolitionists!  Fascinating and previously little known story.  Excellent review in (ironically) Columbia Magazine, the monthly magazine for Columbia University alum.

Saturday, February 8, 2014

Too Many Young Black Men Are Locked Up

I'm a conservative and have been most of my adult life.  I don't believe in racial quotas and I don't believe that many Republicans are racists.  However, the War on Drugs plus grossly inequitable and manaditory sentences for drug possession (crack vs cocaine, etc.) are doing as much or more damage to low income, inner-city, largely minority communities than any other favorite cause of conservatives such as "decaying social mores", single mothers, welfare dependency, etc., etc.  It isn't possible to build stable lives and stable communities when YOUNG MEN ARE ABSENT and when they return they've been "schooled" in prison.  The idea that locking up millions of people in order to prevent crime is awesomely short-sighted.  Why?  Duh - THEY GET OUT SOMEDAY.  Ex-cons, by and large, have no future.  Having already received little education, their chances of getting a decent job are miniscule.  The cycle repeats.  When will this crime against humanity end?

What set me off were two recent stories.  One in yesterday's New York Times

As 2 Go Free, Brooklyn Conviction Challenges Keep Pouring In

And this in MarginalRevolution:

Exonerations with not even a crime: how many more should there be? - See more at:

Exonerations with not even a crime: how many more should there be? - See more at:
Exonerations with not even a crime: how many more should there be? - See more at:

Friday, February 7, 2014

Emerging Markets: Mobius says sell - so it must be time to buy!

Subject: Bloomberg: Mobius Says Emerging-Market Selloff to Deepen on Outflows


From Bloomberg, Feb 7, 2014, 9:47:24 AM

The worst isn't over for emerging markets after the benchmark stock index sank to a five-month low and the nations' currencies tumbled, said Templeton Emerging Markets Group's Mark Mobius.

To read the entire article, go to

Thursday, February 6, 2014

The Wolf of Wall Street: not just wrong, BAD

Wolf of Wall Street - The Worst

This review takes the film to task for glorifying an animal who did serious harm to many people. Fair enough. But my review is simpler: Scorsese has made a monumentally boring, pointless, and LONG movie. Simply dreadful .

Internet Robber Barons

How Silicon Valley's most celebrated CEOs conspired to drive down 100,000 tech engineers' wages

Suppressing the wages of engineers in order to earn extra billions - the largest personal fortunes ever in human history. Appalling.

Just say no! (to world domination by Big Data)

This piece is a great reminder - that Facebook account I never check anymore?  This afternoon it's going bye bye.

I AM A complicated-private-notwhollycommercial human entity, HEAR ME NOT ROAR!!!

Wednesday, January 29, 2014

This Time Is Different:

More Money Was Invested in Emerging Markets from 2005-2013 than in the Rest of Recorded Time Combined

Chart from NY Times

This shows that those who think this is "just another EM cycle", you buy 'em when they're out of favor and beaten up and sell them when they're rich is missing the big picture.  The flood of money into EM in 2005-07, taking a break during the GFC, then picking up where they left off in 2010 through 2013, was multiples of anything ever seen before.  Public equity, private equity, RE, debt and FDI gushed in EM on a massive scale.  Which is why I'm not bucking consensus and looking for "entry points" to jump back in.  For various reasons but also simply because the size of investment was so astonishing, I'm guessing we're in the early innings of an EM downcycle.