The Mess That Greenspan Made - Part 32

Wednesday Morning Links

MUST READS
5 Things to Watch in the Fed’s March Meeting – WSJ
Protesters, police clash near European bank HQ in Frankfurt – Reuters
IMF Considers Greece Its Most Unhelpful Client Ever – Bloomberg
Greece rejects ‘blackmail’, seeks meeting with top EU leaders – Reuters
BOE director: ‘Greece will not in any realistic scenario repay its debts’ – Telegraph
U.S. urges allies to think twice before joining China-led bank – Reuters
Why Elizabeth Warren Is A Threat to America’s Growth – Fiscal Times
Looks like Donald Trump might actually run for president this time – Vox
The dollar is rising faster than any time in the last 40 years – Washington Post
Are Americans Over Their Economic Anxiety Yet? – Atlantic
The oil price: So much for the rally – Economist
Texting Off in Class – Inside Higher Ed

MARKETS/INVESTING
Stock futures slip ahead of Fed – Reuters
Everyone Hates U.S. Stocks – Bloomberg
Risks Lurk Beneath a QE-led Bonanza in World Stocks – WSJ
The World’s Most Popular Trade May Soon Explode – Growth Stock Wire
The Insane Math Behind So Many Billion-Dollar Tech Companies – Bloomberg
Euro Fetching Less Than $1 Becomes Hot Call for Options Traders – Bloomberg
Gold slips to near 4-month low as Fed seen readying rate hike path – Reuters
RBI decides to futher restrict gold imports, retracts a day later – Business Standard
How top gold producers margins are being squeezed – Mining.com
SGE Withdrawals In Perspective – BullionStar

ECONOMY/WORLD/HOUSING/BANKING
The U.S. Economy Just Keeps Disappointing – Bloomberg
Bank of International Settlements Questions Deflation Threat – WSJ
Japan’s Businesses Respond to Abe’s Push for Higher Wages – NY Times
Slammed by oil crash, Canada takes major hit in new OECD forecast – Globe & Mail
Housing market recovery is limping along – MarketPlace
Southern California home prices rise, sales fall in February – LA Times
Hedge Funder Dalio Thinks the Fed Can Repeat 1937 All Over Again – Bloomberg
It Will Take a Long Time for Central Banks to Return to Normal – NewsMax
The Fed Is Raising the Price Of a Free Lunch – RCM
A World Without the Federal Reserve – Pragmatic Capitalism

 

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.

© 2010-2011 The Mess That Greenspan Made