Echoing Charlie Munger, Oaktree's Howard Marks warns today's institutional and retail investors that "everything that’s important in investing is counterintuitive, and everything that’s obvious is wrong." These words seem critically important at a time when the world and his pet rabbit is a self-proclaimed stock-picking export. Be "uncomfortably idiosyncratic," Marks advises, noting thaty most great investments begin in discomfort as "non-conformists don’t enjoy the warmth that comes with being at the center of the herd." Dare to be different is his message, "dare to be wrong," or as Charlie Munger told him, "it’s not supposed to be easy. Anyone who finds it easy is stupid." While Marks philosophically adds that "being too far ahead of your time is indistinguishable from being wrong," he warns the lulled masses that "you can’t take the same actions as everyone else and expect to outperform."
Having warned just 6 weeks ago that high-yield credit and small high-tech firms may be in a bubble, Fed Governor Tarullo, ironically speaking at the Hyman Minsky Financial Instability Conference, suggested that the recuction in share of national income for "workers" (i.e. income inequality) is troubling. Furthermore, he added, "changes reflect serious challenges not only to the functioning of the American economy over the coming decades, but also to some of the ideals that undergird the nation's democratic heritage." His speech, below, adds that since there has been only slow growth so far, expectations for a growth spurt are misplaced and that the Fed-policy-driven recovery has "benefited high-earners disproportionately."
Are you saying it took the highbrow economist cadre five years to figure out and agree with what we first said in 2009, and for which we received endless ridicule, abuse and accusations of fringe insanity? Yes. We are saying that.
Angry Germany Asks "Is It Time For A Formal Espionage Investigation?" After Latest NSA Spying RevelationsSubmitted by Tyler Durden on 03/29/2014 11:56 -0400
February 2013 saw Russian visitors spend 16% more than in 2012 as "investor" visas flowed, property soared, and hot money slooshed into the UK recovery. However, as AFP reports, Russian spending in British shops fell by 17 percent last month compared to February 2013 as the "unstable situation in Russia has shown its effect on tourism spend this year," already. Shoppers from the Middle East (up 31%) and China (up 23%) continue to represent the highest proportion of international sales in Britain, but it is clear, as The Economist points out, Russian wealth has permeated the upper reaches of society in Britain more completely than in any other Western country, with the health of "Londongrad" now at stake if sanctions are extended.
We knew that the legal market was in bad shape last summer when we came across the story that top law firm Weil, Gotshal & Manges announced its first mass layoffs in 82 years, but I had no idea it was this bad. As most will be aware, U.S. News & World Report publishes a widely anticipated ranking of undergraduate as well as graduate schools. It appears law schools are so consumed with performing well in these rankings that they are going to outrageous lengths to make it look like their students are performing better financially after graduation than they actually are. One of the most ridiculous ways they achieve this is by paying the salaries of their graduates upon graduation.
Thank your lucky stars that you don’t live in some places around the world. If you think you are having a rough time getting by, finding enough money to make ends meet and you constantly talk over the increase in prices, then think again. You probably don’t live in one of the most expensive cities in the world.
Following yesterday's admission by the new head of Ukraine's central bank of the considerable bank runs in recent days and the rapid dwindling of central bank reserves, Sergiy Kruglik - the director of international affairs for the bank - announced this morning that Ukraine has adandoned the dollar peg and will adopt a flexible exchange rate. The Hyrvnia collapsed through 10.00 on the news and is now trading 10.40 at record lows against the USD.
It would indeed be supremely ironic if the "strong" foreign law bond indenture would be tested, and breached, not by Greek bonds, as so many expected in late 2011 and early 2012, but by one of the last contries in Europe which is still AAA-rated. We would find it less ironic if the next leg of the global financial crisis was once again unleashed by an Austrian bank: after all history does rhyme...
Everybody knows of the light-heartened Big Mac index that the boys at The Economist thought up in 1986 in an idle moment as a yard stick for comparisons between countries around the world.
The world may have been crashing and burning, and as Bernanke admitted in March 2008, "At some point, of course, either things will stabilize or there will be some kind of massive governmental intervention, but I just don’t have much confidence about the timing of that" (guess which one it was), but at least the Fed ended the catastrophic 2008 yeat on a high note. The chart below shows the number of the time the FOMC committee had an moment of levity as captured by [Laughter] in the FOMC transcripts. Perhaps not surprisingly, the December 2008 meeting, when the market was in free fall, saw the biggest number of laugh lines in the entire year.
For the first time ever, the majority of Americans are scared of their own federal government. A Pew Research poll found that 53% of Americans think the government threatens their personal rights and freedoms. Americans aren't wild about the government's currency either. Instead of holding dollars and other financial assets, investors are storing wealth in art, wine, and antique cars. The Economist reported in November, "This buying binge… is growing distrust of financial assets." Every central banker on earth has sworn an oath to Keynesian money creation, yet the yellow metal has retraced nearly $700 from its $1,895 high. The only limits to fiat money creation are the imagination of central bankers and the willingness of commercial bankers to lend. That being the case, the main culprit for gold's lackluster performance over the past two years is something else... It won't be inflation that drives up the gold price but the unwinding of massive amounts of leverage.
For a few brief weeks, there was hope among the millions of Japanese that do not love Shinzo Abe as two former premiers entered the race for governor of Tokyo on a zero nuclear-power platform. Today, as The Economist notes, those hopes melted away as quickly as the snow which had blanketed Tokyo on the eve of the vote. The race was won handily by Yoichi Masuzoe - the "women are abnormal during their periods" pro-nuclear, Abe-apologist that personifies Japan’s gender gap. Perhaps Subculturist sums it up best: once again, Japan has shown us that with enough voter apathy (3rd lowest turnout on record), a compliant media, and the connections and funding of the nuclear industry, that any middle-aged asshole guy can be the leader of one of Japan’s largest city-states.
Further protests and a plethora of headlines this morning from both sides in the troubled European (for now) nation. The Ukrainian foreign minister begins by noting that "its impossible to take Ukraine away from Russia," that Ukraine was "right to take attractive Russia offer," and that protests aren't peaceful. Opposition leader Klitschko responded that "Ukrainians dream of a stable, modern country," and that a majority of Ukrainians want "European values," and asks for "international help." Romania's Basescu is concerned and urges the Ukrainian army to stay out of the conflict. But, as Martin Armstrong notes below, according to a former adviser to Vladimir Putin, the economist Andrei Illarionov, the Kremlin will take one of three possible scenarios with respect to the Ukraine problem to "assert a lot of pressure on Kiev."
The US wants its dollar system to prevail for as long as possible. It therefore has every interest in preventing a ‘rush out of dollars into gold’. By selling (paper) gold, bankers have been trying in the last few decades to keep the price of gold under control. This war on gold has been going on for almost one hundred years, but it gained traction in the 1960's with the forming of the London Gold Pool. Just like the London Gold Pool failed in 1969, the current manipulation scheme of gold (and silver prices) cannot be maintained for much longer.