The Mess That Greenspan Made - Part 40

For the first time since before the financial crisis, more Americans think they’ll have enough money to be comfortable in retirement than not according to the latest Gallup survey.

On its face, this is not very surprising given the dramatic rise in stock prices and home prices over the last year or so, developments that are pretty hard not to notice if you’ve given retirement even a passing thought. The latter is probably more important since, for better or worse, housing plays an outsized role in the finances of most American families.

It would appear that, more than anything else, we’re confident that the Federal Reserve will be able to keep asset prices inflated and that confidence may be misplaced.

Not surprisingly, how people think about retirement is quite different depending on how close to it you are as confidence goes down in the survey as age goes up with only 45 percent of those aged 50 to 64 answering yes to the question while 48 percent said no.

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Monday Morning Links

MUST READS
Ukraine rebels claim victory – Reuters
Russia: Ukraine vote outcome must be applied – BBC
What Timothy Geithner Really Thinks – NY Times
Geithner’s Single Most Revealing Sentence – NEP
A Memoir From the Eye of a Financial Storm – NY Times
What Timothy Geithner’s New Book Won’t Tell You – Politico
Geithner: On landing a (financial) plane that’s on fire – USA Today
America Becomes a Stay-at-Home Nation for Millennials – Bloomberg
More Americans Think They Will Retire Comfortably – Gallup
Taking stock of Wall Street’s boom – Keen, Business Spectator
The Market’s Rough Rotation – WSJ
Setting the Record Straight – Hussman Funds
(No) Conundrum 2.0 – Noland, Produent Bear

MARKETS/INVESTING
Dow ready for another record? – CNN/Money
Ukraine jitters push oil above $100 – AP
Is the Dollar at a Turning Point? – Marc to Market
Four ways to spot an investing bubble – MarketWatch
China Stocks Surge on Market Access Measures – Businessweek
The Brutal, Beneath-the-Surface, Slo-Mo Crash of Stocks – Testosterone Pit
Treasuries Decline Before Retail-Sales Data This Week – Bloomberg
Gold price rises as tensions simmer in Ukraine – Reuters
Gold Neutral, Silver Fragile, Palladium Breakout – GoldSilverWorlds
Gold Bulls Bet Wrong on Fed Easing: Commodities – Bloomberg
India’s gold imports plunge in April – Mineweb

ECONOMY/WORLD/HOUSING/BANKING
The Bed-Pan Economy – aucontrarian
Piketty’s Wealth Tax Isn’t a Joke – Bloomberg
The Coming Shock of Rising Inflation – Fiscal Times
Hardship Makes a New Home in the Suburbs – NY Times
Draghi Drives ECB Toward Stimulus as Economy Grows – Bloomberg
Japan logs record low annual account surplus – CNA
President tells China to get used to slower growth – AP
Senior officials urge fixing excess financial innovations – China Daily
China’s housing sector to enter “autumn season”: expert – xinhuanet
UK property market – what will the Bank of England do next? – Guardian
What McMansions say about Americans: Stupid is as stupid does – LA Times
Lockhart: Economic strength may not be clear for months – Reuters
How QE may be doing more harm than good – CNBC

 

Is Sugar the New Tobacco?

My wife and I had our own personal revelation about diet a few years ago and will never go back to eating the way we once did, opting instead for a low-carb approach with virtually no sugar that is pretty easy to follow once you get the hang of it (Sucralose is a life-saver).

Here’s a story about sugar (the worst carb of them all) that seemed worth sharing:

Worldwide, 36 million people die of non-communicable (non-infectious, chronic) diseases. Some of those deaths are related to sugar. An increasing library of scientific evidence has linked sugar intake to caries, obesity and even cardiovascular diseases.

The evidence is clear: there is a direct association between sugar intake and death due to cardiovascular disease. As scientific and public knowledge on the effects of sugar increased, this led WHO (World Health Organization) to reconsider their recommendation for the amount of sugar that people should consume.

Previously thought of as an innoxiously sweet indulgence, some people are now asking whether in fact it is ‘the new tobacco’. Cigarettes were once considered a harmless pleasure and medical journals even carried advertisements for brands of cigarette with doctor’s endorsements or claims that they can cure a sore throat before the overwhelming array of research led to the unmistakable conclusion that cigarettes kill.

WHO experts say that together with high salt intake, not enough fruit and vegetables and lack of physical exercise, sugar is one of the main health risks and could become the ‘new tobacco’ because of its adverse impact on public health.

This is a pretty good article that covers a lot of issues beyond the basic message of sugar being bad for you. I”ve been making the comparison between sugar and tobacco for some time now – unfortunately, people look at you like you’re a little nuts when you do, though the 60 Minutes piece from last year – Is Sugar Toxic? – may have changed some minds.

Also, that HFCS (High Fructose Corn Syrup) curve should make people sick just looking at it.

The latest issue of the Iacono Research Weekend Update has been posted to the website and is now available for subscribers here.

There will be no changes to the model portfolio or the buy ratings this week, but possible early action for the covered call sales and the potential for another banking crisis are addressed in the following discussion topics:

The executive summary is as follows:

Amid ongoing tensions in Ukraine and mixed economic data from around the world – good news in Europe, not so good news in Asia – most asset classes were little changed. U.S. equity markets have become bifurcated with large-cap stocks reaching new record highs while technology shares continue to stumble. The recent drop in the trade-weighted dollar reversed course and Treasuries are still seeing strong demand as Fed Chair Janet Yellen reaffirmed the central bank’s plan to end its money printing this year.

The natural resource sector saw more selling and both commodity prices and related shares moved lower, the precious metals sector leading the way. REITs again saw gains when most other asset classes registered losses and the model portfolio fell 0.7 percent, now up 4.3 percent for the year.

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