pushing chips all in

European QE Is Moving Chips

George Soros and others are shifting into international equities.  Leon Cooperman remains “bullish on the U.S., while predicting bigger gains elsewhere.”  Robert Shiller told CNBC he’s “thinking about getting out of the United States somewhat,” and he ain’t talkin’ bout a vacation! (ba-doom-pah!).  Meanwhile, “given the barren bond yield environment, perhaps the new ‘great rotation’ in 2015 will be out of domestic equities into higher yielding international equity markets.”  Also, Jason Bachman says “in the 45 years since the MSCI EAFE index was created, stocks finished the year down twenty percent or more four times, or just under nine percent of the time.  Stocks were up twenty percent 18 out of the 45 years, forty percent of the time.”  Meanwhile, “automation in the investment process is all about making level-headed decisions ahead of time.  If you’re able to create if/then rules to guide your actions you can systematically keep overconfidence and overreactions out of your investment decisions during difficult market environments…Taking emotions out of the decision-making process will almost always be the right move because most of the time it’s difficult to see our own behavioral biases.”  


Don’t Worry, This Ain’t THAT Kind Of Boom

New research from the Bank for International Settlements says “productivity growth in the rich world started slowing down around the same time that the financial sector’s share of economic activity started rising rapidly.”  They attribute this to (1) high financial sector salaries attract talent away from innovative companies, and (2) financial sector growth = mortgage lending growth = construction activity growth = lower productivity.  Meanwhile, “for the first time in decades, New York is proving that it can grow at a rapid pace without leaning on Wall Street.  The city has added about 425,000 jobs since the end of 2009;” Wall Street’s contribution has been “less than 1 percent.”  “It isn’t that kind of boom…It isn’t ‘Bonfire of the Vanities.’  It’s a wide variety of firms in different industries that are contributing to a more diversified job growth.’”


Still Praying For The Oil Dividend

“Economists have been wondering why the plunge in gasoline prices has not translated into a strong gain in retail shopping…consumers may be holding off from spending the pump windfall on big-ticket items until they are convinced that cheap gas will hang around for a long time.”  Also, “with winter storms continuing to batter broad parts of the U.S., demand for heat should continue to rise this month…consumers may well have to use the money saved from cheaper gasoline.”  Meanwhile, here’s a good way to summarize the “financialization of oil” theory: “Everything takes a long time in the oil industry…Unlike finance, oil extraction is done with heavy equipment and in constant combat with the forces of nature.  In the oil market, by contrast, nothing takes a long time.  It’s a financial market in which the only things that really matter are the dance of digits on a computer screen and the quick minds of people watching them.”


USA: Atlanta Fed Researchers Don’t See Much Wage Growth Recovery Happening Anywhere


USA: Close To Half Of ETF Inflows This Year Have Been Currency-Hedged Products


WM: Investors Are Not Always Rational: Dem Furreners Er Takin’ Er Jobs Edition


What: The Bard Bond Guru


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