Here is the equity premium chart from David Tepper.

This is Joan McCullough at her best, responding to the interview of David Tepper on CNBC this morning. Funny as hell and a good antidote to mainstream nonsense. And in the following OMS I'll post a chart from Tepper showing the equity premium at an all-time high.

Ian Bremmer runs one of the largest geopolitical services in the world. He spoke at my conference last year. I want to introduce the weekly piece he does (rather high-end and private) as a way of alerting you to him as one of my regular sources. I hope to find some way to get more of his work to you, but for now read and pay attention to the middle section on France.

David Zervos is an unabashed fan of Ben Bernanke and easy money, but he has lots of street cred and a Fed pedigree. Whether or not you agree with him, he represents a view that is accepted wisdom in central bank circles, and we need to remain aware of this. On top of that, he can actually write in clear terms. Here he notes a few connections not totally obvious and one lesson from history. Japan has done this type of easing before. The resulting impacts on a number of countries were not pretty.

This is something we must follow: the possible demise of austerity in Europe. Of course, if austerity is a consequence (as opposed to a punishment), then reducing or eliminating it will create more issues later. This is a story from El Pais, in which they note hopefully that Spain will shortly be released from the woes of German-mandated austerity, which is to be replaced by "reforms." That massive reform is needed is not in doubt, but if austerity is politically difficult, then reform is even more so. The status quo can remain neither status nor quo (making a bad grammatical point). Things will change for the worse as a consequence of doing nothing.

John Hussman is one of the better market macro guys around and a favorite read. His latest is worth your attention.

“A practical note – as of Friday, our estimate of prospective 10-year S&P 500 total returns (nominal) has dropped to just 3.3%. With the exception of 1929, this level of estimated returns was never observed in historical data prior to the late-1990’s market bubble. Rich valuation is not a rally-stopper in itself, and we’ve certainly narrowed our defensive criteria enough to entertain a more constructive stance under some conditions without a steep market decline first. But the end-game here is still most likely a 30-50% market decline over the next 2-3 years, which would be far more than enough to wipe out any interim market gains. To dismiss that likelihood is to ignore predictable experience since 2000, as the bubble-bust cycle of easy money has repeatedly interacted with rich valuations to produce gleeful roller-coaster rides with very bad endings."

I found this piece from some of Roubini’s researchers well-reasoned:

"The current low inflation in the eurozone (EZ) is mainly caused by large output gaps, a narrow focus on headline inflation, deleveraging in the aftermath of the crisis and unwarranted optimism in the past. The future does not bode well for inflation in the EZ either: The fiscal drag will ease but not reverse in order to support growth; high unemployment will exert pressure on wages for years to come; the world economy does not look strong going into 2014; structural issues in part prevent the high growth necessary to reduce unemployment; and disinflation is a phenomenon that feeds on itself, especially in a monetary union. The ECB will become increasingly desperate to ignite inflation: Household and corporate deleveraging is far from over; a deposit rate cut will have only a limited impact; the exchange rate mechanism may work to some extent, but depends also on the actions of other more dovish central banks; and it is politically difficult for the ECB to find consensus on unconventional measures in time."

Japan was a hot topic at the conference. This is a piece by Mohamed El-Erian that he posted off the PIMCO site, so not many of you are likely to find it. Solid analysis.

A follow-up to the Kotok piece by Bob Eisenbeis, Fed-watcher extraordinaire. This is absolute must-read.

I have been away from OMS duties for a few days during my conference but am now back and going through my reading, so expect a few more posts than normal as I “catch up” and go through some recommended reading I picked up at the conference.

This piece from David Kotok talks about how US treasury issuance is slowing down and, in combination with Fed policy, is driving rates down in a different manner than most assume. The piece also argues there will be more problems when QE ceases.