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Birds, Boats, Bonds, Venice
Birds, Boats, and Bonds in Venice: The First AAA Government Issue | The Big Picture: "Venice never recovered from the devastating war with the Turks, not only because of the loss of its colonies in the Mediterranean, but because Portugal’s discovery of a sea route to India and Christopher Columbus’s discovery of America shifted the locus of economic power from the Mediterranean to the Atlantic. The ocean-faring sailing ships of France, England and the Dutch Republic replaced Venice’s oared galleys. Amsterdam replaced Venice as the financial center of Europe, and during the 1600s and 1700s the East India Company dominated the oceans around Asia the way Venice had dominated the Mediterranean until then. On May 12, 1797, Napoleon Bonaparte brought an end to the Venetian Republic. Though Venice is no longer a city-state, it has left us a beautiful city which tourists cherish. It also leaves us an important financial legacy: a record of the first international government bonds which were used throughout Medieval Europe by investors who wanted a safe place to store their wealth. Today, U.S. Government Bonds play the same role in the twenty-first century that prestiti played in the fourteenth century. Let’s hope U.S. Government Bonds can continue to pay that role for the century to come."
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Contrarian Caveat, The Crowd Is The Market
Knowing when to bet against the crowd is key --
Greenspan 3.0 and Other Random End-of-Year Thoughts - Bloomberg: "The death of contrarians has been greatly exaggerated. The reason is that the crowd is the market for most of any cycle. You cannot be contrarian all the time, otherwise you end up simply fighting the tape the whole way up (or down), therefore being wildly wrong. That said, there are small moments of intense uniformity of thought and widespread agreement in markets. That is when contrarians get fed. This is a state of mind that is exceedingly difficult for you social herd animals to inhabit. If it feels good and right, it's probably not that terribly uncomfortable contrarian moment."
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Greenspan 3.0 and Other Random End-of-Year Thoughts - Bloomberg: "The death of contrarians has been greatly exaggerated. The reason is that the crowd is the market for most of any cycle. You cannot be contrarian all the time, otherwise you end up simply fighting the tape the whole way up (or down), therefore being wildly wrong. That said, there are small moments of intense uniformity of thought and widespread agreement in markets. That is when contrarians get fed. This is a state of mind that is exceedingly difficult for you social herd animals to inhabit. If it feels good and right, it's probably not that terribly uncomfortable contrarian moment."
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Individual bonds, an investment
Bond investing? -- it depends --
Individual bonds are an investment, not an Ark | Reuters: " . . . As Toby Nangle, of Threadneedle Investments, pointed out earlier this year, no-one buys bonds because they actually think they are going to outperform other assets over the longer-term ( here ) The data is clear, over the longer term bonds underperform equities. Instead you own bonds because, when combined with equities in a portfolio, they are a complementary asset. Both long-dated US Treasuries and equities are about equal in volatility. But, if you own government bonds and equities together your portfolio volatility will be greatly reduced. And, as volatility is risky (after all, you may one day want access to your money) that complementary nature is extremely important. . . ." (read more at link above)
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Individual bonds are an investment, not an Ark | Reuters: " . . . As Toby Nangle, of Threadneedle Investments, pointed out earlier this year, no-one buys bonds because they actually think they are going to outperform other assets over the longer-term ( here ) The data is clear, over the longer term bonds underperform equities. Instead you own bonds because, when combined with equities in a portfolio, they are a complementary asset. Both long-dated US Treasuries and equities are about equal in volatility. But, if you own government bonds and equities together your portfolio volatility will be greatly reduced. And, as volatility is risky (after all, you may one day want access to your money) that complementary nature is extremely important. . . ." (read more at link above)
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Online financial advice, lower fees, team investing
Disintermediation and disruption in the world of financial advice --
The brave new world of online financial advice – lower fees and team investing | Money | theguardian.com:
" . . . Here are some names to scribble down, or better yet, tap into the closest note-taking app: Betterment, LearnVest, FutureAdvisor, Wealthfront, Jemstep. These are some of the frontrunners in a high-stakes race now underway on Wall Street: the battle to deliver investment advice and other financial planning services to ordinary Americans like you and me – not in person, but online. They're already attracting money, from Silicon Valley at least. Venture capitalists love the idea, since the low costs of providing online financial advice mean these businesses may prove very profitable. LearnVest, which wants financial advice portals to be as easy to use as your Tumblr account, has attracted $41.5m in startup funding in the last four years. Rival Betterment is getting $13m from bluechip backers like Bessemer Venture Partners and Menlo Ventures..." (read more at link above)
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The brave new world of online financial advice – lower fees and team investing | Money | theguardian.com:
" . . . Here are some names to scribble down, or better yet, tap into the closest note-taking app: Betterment, LearnVest, FutureAdvisor, Wealthfront, Jemstep. These are some of the frontrunners in a high-stakes race now underway on Wall Street: the battle to deliver investment advice and other financial planning services to ordinary Americans like you and me – not in person, but online. They're already attracting money, from Silicon Valley at least. Venture capitalists love the idea, since the low costs of providing online financial advice mean these businesses may prove very profitable. LearnVest, which wants financial advice portals to be as easy to use as your Tumblr account, has attracted $41.5m in startup funding in the last four years. Rival Betterment is getting $13m from bluechip backers like Bessemer Venture Partners and Menlo Ventures..." (read more at link above)
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US mortgage troubles, pending wave of disaster
The US mortgage market never really completely cleared --
Insight: A new wave of U.S. mortgage trouble threatens | Reuters: "... some regulators, rating agencies, and analysts are alarmed. The U.S. Office of the Comptroller of the Currency, a regulator overseeing national banks, has been warning banks about the risk of home equity lines since the spring of 2012. It is pressing banks to quantify their risks and minimize them where possible. At a conference last month in Washington, DC, Amy Crews Cutts, the chief economist at consumer credit agency Equifax, told mortgage bankers that an increase in tens of thousands of homeowners' monthly payments on these home equity lines is a pending "wave of disaster."..."
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Insight: A new wave of U.S. mortgage trouble threatens | Reuters: "... some regulators, rating agencies, and analysts are alarmed. The U.S. Office of the Comptroller of the Currency, a regulator overseeing national banks, has been warning banks about the risk of home equity lines since the spring of 2012. It is pressing banks to quantify their risks and minimize them where possible. At a conference last month in Washington, DC, Amy Crews Cutts, the chief economist at consumer credit agency Equifax, told mortgage bankers that an increase in tens of thousands of homeowners' monthly payments on these home equity lines is a pending "wave of disaster."..."
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Bill Gross, Federal Reserve, Quantitative Easing (video)
Gross Says Fed `Wants Out' of Quantitative Easing: Video - Bloomberg: "Bill Gross, co-chief investment officer at Pacific Investment Management Co., talks about the outlook for the Federal Reserve's program of quantitative easing, the state of the credit markets, investment strategy and the future of the City of Detroit following its bankruptcy. Gross speaks with Stephanie Ruhle and Erik Schatzker on Bloomberg Television's "Market Makers.” (Source: Bloomberg)"
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Nobel prize economist warns of US stock market bubble
Nobel prize economist warns of US stock market bubble | Business | The Guardian: "Robert Shiller, who won the award with Eugene Fama and Lars Peter Hansen for research into market prices and asset bubbles, pinpointed the US stock market and Brazilian property market as areas of concern.
"I am not yet sounding the alarm. But in many countries stock exchanges are at a high level and prices have risen sharply in some property markets," Shiller told Der Spiegel magazine. "That could end badly," he said."
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"I am not yet sounding the alarm. But in many countries stock exchanges are at a high level and prices have risen sharply in some property markets," Shiller told Der Spiegel magazine. "That could end badly," he said."
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China In Peril
For China, no easy way out from hereon in --
RealClearMarkets - China's Growth Is In Peril, As Is Its Economy: "....Here's the dilemma: The old model may not be sustainable, but getting to a new model may be painful. Higher interest rates could bankrupt some firms dependent on cheap credit. A revalued renminbi could close some export companies. Stronger consumption might not instantly fill the void. Naturally, those benefiting from the status quo will fight to preserve it. This defines China's predicament. In 2012, its economy grew a respectable 7.7 percent. With good policies, Lardy thinks something like this could continue. Pettis sees a harder transition. At best, growth will average 3 percent to 4 percent . That's not much higher than the United States'. China remains a colossus, but its future is increasingly clouded."
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RealClearMarkets - China's Growth Is In Peril, As Is Its Economy: "....Here's the dilemma: The old model may not be sustainable, but getting to a new model may be painful. Higher interest rates could bankrupt some firms dependent on cheap credit. A revalued renminbi could close some export companies. Stronger consumption might not instantly fill the void. Naturally, those benefiting from the status quo will fight to preserve it. This defines China's predicament. In 2012, its economy grew a respectable 7.7 percent. With good policies, Lardy thinks something like this could continue. Pettis sees a harder transition. At best, growth will average 3 percent to 4 percent . That's not much higher than the United States'. China remains a colossus, but its future is increasingly clouded."
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Digital Assets, Estate Planning Questions
Digital Assets Raise Estate Planning Questions | Chambliss, Bahner & Stophel, P.C. - JDSupra: " . . . States are beginning to grapple with these issues. A few states have enacted laws, giving executors access to online accounts. In addition, every Internet provider has its own rules about access to user accounts, and generally users have agreed to these rules when they first enrolled, whether they actually read the service agreement or not. In April 2013, Google introduced the concept of an Inactive Account Manager who Google users can name to receive notice when a Google user has not accessed her account for a long period of time. The Inactive Account Manager has access to Google accounts designated by the user and can take whatever action is necessary to access them or shut them down. . . ." (read more at link above)
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India, growth model (video)
Toward a uniquely Indian growth model | McKinsey & Company: For India’s economy to expand as rapidly and yet more sustainably than China’s, we need to make our differences into virtues rather than vulnerabilities. For too long we have clung to a mind-set shaped by the early independence years, when the areas in the northwest and northeast had become Pakistan, and India’s first government was struggling to weave a patchwork of provinces and maharaja-run kingdoms into a nation. In those days, the risk that India might break apart was very real. One of India’s great accomplishments is that no one worries about that anymore. Indeed, the idea of a united India runs so broad and deep that it allows us to consider a counterintuitive way of thinking about growth—that the best way to propel the economy may be to encourage different parts of the country to go their own way.
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Investment bubbles
The next 10 investment bubbles - Slide Show - MarketWatch: " “Financial bubbles are not a purely psychological phenomenon. They have two components: a trend that prevails in reality and a misinterpretation of that trend. “ And he added: “I treat bubbles as largely unpredictable.”"
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Twitter, a Risky Investment? (video)
Twitter, a Risky Investment - Video - NYTimes.com: "Twitter, a Risky Investment
BY DAVID GILLEN AND EMILY B. HAGER - November 6th, 2013
Twitter began trading on the New York Stock Exchange on Thursday, November 7. Here are three reasons the company may be a risky investment."
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