WEEKEND BRIEFS

It's everywhere. Can it be stopped? Should it be stopped? Is it just another form of Big Brother?

The WSJ recently ran a piece about companies tracking kid apps. When children use their parents' phone to play games or go to some innocent-sounding site like "How to Draw," there are companies that track and collect and share data. 

http://online.wsj.com/article/SB10001424127887324520904578553662943430052.html?KEYWORDS=Apps+for+kids

Here's one more example.
http://www.testosteronepit.com/home/2013/6/29/surveillance-society-if-you-drive-you-get-tracked.html

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The US might be seen by investors as a safe haven for investing or as a beacon of hope in a much-needed global economic recovery, but given the recent revelations about its spying activities, it now surely one of the most hated countries on the planet.

Here's the latest from a Google story.

http://www.guardian.co.uk/world/2013/jun/30/nsa-leaks-us-bugging-european-allies
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What a difference a fortnight makes.

Now it's one big happy Federal Reserve family after Big Ben ruffled investor psyches 10 days ago and the market went semi-ballistic. Fed members mysteriously seemed to circle their monetary policy wagons.

All's well that ends in agreement. And the latest from those boys and girls implies that they all said one thing and we investors heard another. They were misunderstood. Some of them weren't calling for an end to QE. Or higher interest rates for that matter.

Despite claims that Fed member comments this past week were not coordinated, the denial speaks for itself. It was coordinated. Jittery markets and blame are bureaucratic nightmares.

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                                Have An Escape Route

Follow the news. Just make sure you have an escape route marked off when you need it.

Bond investors are panicking. Big mutual funds and other institutional bond runners are being inundated with calls and redemptions from investors. As one fund manger put it: "It's uncharted territory for a lot of people."

And that's the point. Wall Street preens investors for stability not the unexpected. Putting specific numbers on things may be welcome and praised by some, but it also leaves one wide open. In boxing it's the one you didn't see that does the damage.

That's what happened to more than one big-time bond fund manager from Bill Gross to Jeff Gundlach in the recent interest rate-QE turmoil.  Most spent the last week wiping scrambled bond prices off their faces.

"I am wrong 30% of the time and right 70% of the the time, and this was one that was wrong," Gundlach was quoted in Friday's WSJ.

Big egos are to big fund managers as salt is to pepper. When you see one you'll most likely find the other.

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                        The Heroin Ain't Free

The clarion call by central bankers that they ain't going to take away the monetary heroin anytime soon reminds one of all those historic examples of various governments claiming they weren't going to devaluate their currencies or default on their bonds.

And they did.

Some pundits say falling bond prices will trigger the long anticipated rush of money from bonds to equities. Could happen. But that puppy's been in the market for longer than it takes a friend to grow a chest-length beard.

And if it doesn't? Historically, the Fed has less wiggle room than ever. Times have changed and historical comparisons to 1994 are off base. Back then stocks held up while bonds went south. Bach then the Fed was trying to cut off inflation at the pass.

This time, if one believes the official numbers, there isn't any inflation, Just an unraveling of an unprecedented monetary stimulus package that's longer in the tooth than a pack ancient tigers.

Addiction to the heroin is not any different from global governments' addiction to fiscal irresponsibility. Once it gets going it's hard to give it up.

In either case, like fiscal irresponsibility, this heroin comes with a price.
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