The Mess That Greenspan Made - Part 21

With each passing year, the prospect of Federal Reserve rate hikes seem more and more like Charlie Brown trying to kick that football held in place by Lucy Van Pelt in one of the better known scenes from A Charlie Brown Thanksgiving.

That point should be pretty clear in the chart below that appears in this Bloomberg story.

“Ha! You’ll pull it away and I’ll land flat on my back and kill myself.”

Tuesday Morning Links

MUST READS
Asian shares rally to hit new highs – BBC
Dow, S&P 500 back in black for ‘15 … again – USA Today
Fed rate hike expectations shake up stocks, bonds and dollar – AP
BOJ maintains stimulus, keeps upbeat economic view – CNA
Lagarde: Emerging markets must prepare for US rate hike – Economic Times
More European countries to join Asian Infrastructure Investment Bank – China Daily
The UK must resist taking sides as US and China fight for financial supremacy – Telegraph
Restaurants in Seattle Going Dark as $15 an Hour Minimum Wage Looms – PJMedia
No, the minimum wage isn’t forcing these Seattle restaurants to close – LA Times
Russia says ready to use nuclear weapons in Ukraine conflict – euobserver
US and Russia remain world’s biggest arms exporters – study – RT News
China becomes the world’s third largest arms exporter – BBC

MARKETS/INVESTING
Stocks turn lower ahead of Fed policy meeting – AP
In Praise of Short Sellers – New Yorker
Brent crude slides as supply glut comes back to the fore – Reuters
The Dow we know and love, but don’t really use – Washington Post
Currency swings cost U.S. corporates $19B in the fourth quarter – Reuters
Gold treads water ahead of Fed; platinum near 5-1/2 yr low – Reuters
China, Gold, SDRs And The Future Of The International Monetary System – BullionStar
China Sells Treasuries, Yields Collapse… China Buys Gold, Prices Collapse – SRSrocco
Gold Speculative Short Positions Hit 3 Month High – CFTC – Kitco
Irish Finance Minister Dumps Stocks to Buy Gold – GoldCore

ECONOMY/WORLD/HOUSING/BANKING
Saudi Arabia Wooing Fired U.S. Shale Workers to ‘Join Our Team’ – Bloomberg
For first time in nearly four years, auto industry to drag on GDP – MarketWatch
U.K. to Raise Minimum Wage by 10 Times Current Rate of Inflation – Bloomberg
Gov’t Must Meet GDP Goal to Create Enough Jobs, Researchers Say – Caixin Online
China February FDI up 0.9 percent year on year, outbound flows leap 68 percent – CNA
Debunking $1.4 Trillion Europe Debt Myth in Post-Heta Age – Bloomberg
Fort McMurray housing sales plunge as low oil prices persist – Calgary Herald
Low mortgage rates, jobs creation still not boosting housing market – MarketWatch
The Last Time This Happened, The Fed Launched QE 2 – Zero Hedge
Wall Street begins 24/7 Fed ‘patient’ watch – USA Today

 

Trend Following and Investment Losses

Given the relationship of the two data sets shown in graphic below that depict the fortunes (or lack thereof) of John Hussman’s Strategic Growth Fund (HSGFX) in recent years, the accompanying Wall Street Journal story ($) by Morgan Housel is surprisingly kind.

Of course, the bigger story here is really how investors chase performance and how trend following can lead to investment losses. Another important point is that Hussman is not necessarily wrong to be so bearish over the last six years – he might just be early and, over the long-haul, his approach may end up looking pretty good, as it did a decade ago.

Monday Morning Links

MUST READS
Low wages, high dollar test Fed’s patience – Global Post
Brazil: hundreds of thousands of protesters call for Rouseff impeachment – Guardian
Ukraine’s president says truce not working, urges more Russia sanctions – Reuters
Vladimir Putin just made his first appearance after a mysterious absence – Quartz
U.S. Seeking Billions From Global Banks in Currency Manipulation Settlement – Bloomberg
California has about one year of water left. Will you ration now? – LA Times
Krugman Is Told to Read More, Write Less, by Swedish Riksbanker – Bloomberg
The next bailout will be with student loans – My Budget 360
Dollar Imperialism, 2015 Edition – counterpunch
Extremes in Every Pendulum – Hussman Funds
This Could Be Apple’s Secret Apple Watch Strategy – Time
The Coming Chinese Crackup – WSJ

MARKETS/INVESTING
China stocks jump, other markets await Fed – AP
The Smart Money Is Getting Smarter – Forbes
Stocks are the Most Expensive, Well, Ever – Meb Farber
Your Mutual Funds (Still) Suck – Pragmatic Capitalism
Germany’s DAX 30 just broke above 12,000, but it’s  not too late to buy – MarketWatch
Oil Slumps to Six-Year Low as U.S. Production Seen Filling Tanks – Bloomberg
Junk-Rated Oil & Gas Companies in a “Liquidity Death Spiral” – Wolf Street
How Scary Is the Bond Market? – Shiller, Project Syndicate
Gold above lowest in over three months, eyes on Fed meeting – Reuters
SGE Withdrawals 45t Week 9, YTD 456t – BullionStar

ECONOMY/WORLD/HOUSING/BANKING
Billion Prices Project Predicts Higher Inflation – WSJ
If Economists Were Right, You Would Have a Raise by Now – Bloomberg
Global recovery fragile, India a bright spot – Lagarde – Reuters
Is China’s growth slower than the 7% consensus? – Sober Look
China has become main banker in Latin America – Voltairenet
Why Venezuela is the world’s worst performing economy – Quartz
House asking prices near all-time high as ‘granlords’ size up the market – Guardian
The Federal Housing Administration, the next housing crisis? – The Hill
The End of “Patient” and Questions for Yellen – Fed Watch
Four Central Banks Meet but FOMC is the Key – Marc to Market

 
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