Over My Shoulder | Mauldin Economics

Over My Shoulder

Alexander Ineichen: IR&M Momentum Monitor, August 18

August 20, 2014

It has been awhile since we have stepped back and taken in the global view that Alexander Eneichen provides.

Momentum monitor summary

Main take-away

Long-term momentum in equities and bonds is mostly positive.

Equities

Negative European bias remains.  

Bonds

Overall momentum remains mostly positive. Correlation equities / corporate HY is high.

Sectors

Long-term momentum in ten world as well as US sectors are all positive.

Earnings estimates

Generally, earnings momentum is positive and improving.

Download - IRM_Momentum_Monitor_2014_Aug_18.pdf

Barry Ritholtz: Help Wanted: Humans Need Not Apply

August 17, 2014

I seldom post a video as I know most of us prefer to get our information in written form. It's generally faster. But this video deserves 15 minutes of your attention. It is a fairly sobering look at automation and robotics and the future loss of jobs.

Bill Dunkelberg (chief economist for the National Federation of Independent Business) is coming to visit me later this week, and we’ll spend a day talking about whether or not we want to do a book on the future of work.

We were supposed to be writing one on what government policies we need to see enacted in order to improve the employment situation; but as I began to research the entire work and employment world, I started to see that book as being rather limited in value. The far deeper question is, what is the future of work? Not just for the next few years but for the next few decades.

Bill and I have been going back and forth on this and look forward to sitting down with each other. I'll let you know what we do. Now here's the video.

(NO PDF)

Jared Dillian: the daily dirtnap

August 16, 2014

I read all sorts of interesting letters and lately have caught on to Jared Dillian. This is a good update of the new money market rules, and it's one that I basically agree with. The last page is his Friday stream of consciousness “speed round” section which, if you haven't read his daily letters for a few months, can seem odd. Just two pages I think you should read.

Download - TDDV6N152%2815AUG14%29.pdf

Lunch with the FT: Raghuram Rajan

August 16, 2014

This interview with Rajan is so spot on. Rajan just revealed in an FT interview that his goal late last year and this spring was to “change the conversation away from the rupee.” In other words, we were DEAD RIGHT about his true intentions… and the story’s not over.

Also, I never knew that Rajan’s father was a BRITISH SPY. Imagine he picked up a set of subversive skills that are particularly useful for a central banker.

“Central bankers have had enormous responsibilities thrust on them to compensate, essentially, for the failings of the political system. And my worry is we don’t have sufficient tools to do that, but we’re not willing to say it. And, as a result, we push as hard as we can on the existing tools, and they may create more risk in the system.”

Download - Lunch_with_Rajan.pdf

Robert Kaplan: Nationalism and Imperialism

July 30, 2014

This post from Robert Kaplan of Stratfor has nothing to do with markets. Total philosophical analysis, but one that hit a chord or two with me. George Friedman scored a major coup in getting Kaplan to come to Stratfor a few years ago. He is a brilliant writer and thinker, most provocative; and while no one of course agrees with anyone all the time, he does make me think. This is not a long piece, but it does offer perspective.

Download - 140730_Kaplan.pdf

The GDP number

July 30, 2014

My early take on GDP was WTF? Where? When Durable Goods has been up a lousy 0.1% for the quarter and somehow contributes 1.7% to growth, based on some assumptions? And they assumed another 1.7% of inventory growth, but when you look at the report, they assumed the largest inventory build in quite a long time, based on VERY little. This one will get revised down. It'll still be in solid growth territory, though, so it confirms that the GO we saw for the period was not a fluke. Maybe they are looking at that and assuming the inventory builds. Hope they are right, but don't trade on this number.  NOTHING ATTACHED, just my thoughts from 35,000 feet on the way to Maine.