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Noteworthy News – December 15, 2013

Economy:

Why Are Americans Staying Put? – New York Times

Minimum wages: The logical floor – Economist

America’s Wealth Is Staggeringly Concentrated in the Northeast Corridor – The Wire

Haircut Deficit: Kids Living in Basements a Drag on U.S. Services Spending – Bloomberg

Nobel economics winner Fama says risk of global recession in 2014 – Reuters

The Most Important Economic Stories of 2013—in 44 Graphs – Atlantic

Markets:

Bitcoin should not be seen as a currency, warns Ernst & Young – Guardian

Hedge Funds Trail Stocks by the Widest Margin Since 2005 – Bloomberg

Wall St. drops on taper anxiety; Facebook rallies – Reuters

Politics:

Euro Pacific Capital’s Peter Schiff Defends His Tax Protesting Father Irwin Schiff – Forbes

Banks:

Visa, MasterCard $5.7 Billion Swipe Fee Accord Approved – Bloomberg

 Swedes set for cashless future – The Local

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Posted in Economics, Markets, Media, Politics.

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By SurlyTrader – December 15, 2013

Inflation Adjusted Life

Reddit had an interesting post that took 1938 prices from an unknown source and inflation adjusted them.

CostOfLivingThe results make you wonder how accurate CPI really is:

Inflation Vs Actual

Posted in Economics, Markets.

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By SurlyTrader – December 15, 2013

Noteworthy News – December 9, 2013

Economy:

How Much Is a Life Worth? – BigThink

Pushed Out of a Job Early – New York Times

Bargain-hunting dents U.S. retailers’ November sales – Reuters

Lowest Jobless Rate in 5 Years Raises Odds of a Fed Move – New York Times

Gross Says Job Gains Mean 50% Odds of December Fed Taper – Bloomberg

The US job market in five charts: November’s jobs report – Reuters

Markets:

Redfin Real-Estate Firm Gets Cold Shoulder in Silicon Valley – Wall Street Journal

Why do we value gold? – BBC

Hendry: Equity Market Fundamentals Don’t Matter, Bitcoin to $1MLN – Yield Game

Mike Rowe, the former host of the cable show Dirty Jobs, makes a compelling case against college – Profoundly Disconnected

Politics:

Detroit ruling opens door to pension cuts across the nation – LA Times

Romain Hatchuel: The Coming Global Wealth Tax – Wall Street Journal

Banks:

Deutsche Bank to RBS Fined by EU for Rate Rigging – Bloomberg

 

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Posted in Economics, Markets, Media, Politics.

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By SurlyTrader – December 8, 2013

REIT’s: The Unloved Asset Class

Market reactions always seem overdone. Jump on one side of the boat, then when it is about to tip over everyone jumps on the other side of the boat.  The last guy to jump ends up getting wet.

In May, when the Bernank started talking about “tapering”, the dividend paying stocks took a large shock.  In particular, Real Estate Investment Trusts (REIT’s) were thrown out the window.  If you look at the S&P 500 and REIT’s, there is a 28% YTD differential:

reitsvsspy

Neck and neck till May 21st

The fear is that interest rates will rise (rapidly) and REIT’s will get squeezed by higher funding costs on the real estate AND bonds will look more attractive versus real estate investments.  My guess is that rates will not rise as rapidly as what the market is pricing in.  My guess is that REIT’s will do better than the S&P 500 in the next 12 months.

Posted in Markets.

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By SurlyTrader – December 6, 2013

Beanie Babies Vs Bitcoins

The comparison between Bitcoins and Beanie Babies has already been made.  My question to you is how bad do you think it could possible get?

Unfortunately, those who truly believe in Beanie Babies lost a fortune.  In one particular case, the couple lost everything and went bankrupt.

 

 

My belief is that the psychology high is infectious.  Part of the lust has to do with rising prices and the allure of becoming rich from the “market”.  I would argue that the bigger part of the lust has to do with the feeling of being part of something bigger.  The once in a lifetime opportunity to be a participant in something massive and historic.

You end up doing nothing in life. You wake up, go to school, go to work, get married, make children, pay for college – then you die. Big deal. What a life.  – Fight Club

This I can say: Beanie Babies were not the answer

This I will say: Bitcoins were not the answer

Posted in Markets.

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By SurlyTrader – December 5, 2013

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