PIMCO SPEAKS

This time it about the economy. Once a quarter the big firm gathers its big hitters to discuss what's up on a global scale. Here's the latest.
http://www.minyanville.com/business-news/markets/articles/Pimco-Cyclical-Outlook-for-the-Americas/3/31/2014/id/54398

STATINS

Who doesn't love a big market?

An article in today's WSJ, "New Drugs Emerge To Cut Cholesterol," states the size of that market: 50 million Americans.

What about them, what do they have in common? Well, they are all, according to some, candidates for the "most widely used and most lucrative drugs ever developed by the pharmaceutical industry," statins.

These are what some refer to as Wing-and-a-prayer announcements or priming the pump. To be sure, as one physician who was not connected with these new studies, noted: "There's not a shred of doubt that this is a very efficacious way to lower LDL (bad)" cholesterol.

But that's the wrong question getting answered. There is even less evidence that these findings will translate to preventing heart attacks and strokes, the so-called end point or reason for their existence.

With recent patent expirations popping up like spring flowers, a cynic might argue along with the aroma of spring flowers the odor of new patents is also in the air. And it's a very lucrative one.

http://online.wsj.com/news/articles/SB10001424052702303978304579471072404353460?mg=reno64-wsj

THE TWO BERNIES

Signs don't precede they follow.

Now that seems like a paradox if there ever was one. How many recognized the sub-prime mess after the fact? Or the dot.com bubble? Think tulip bulbs or a couple of generations ago the Nifty Fifty.

In the Good Book it says there's not much new if anything under the sun. What that means is there are only variations of past things or events. That doesn't make them new, only garbed in different clothing or packaging.

Investors usually learn this, if they learn it at all, over time. But by the time Hollywood gets around to parading it before the great unwashed masses it's older than all those glaciers climate-change folks worry so much about preserving.

 Bernie Madoff and Bernie Cornfeld shared more than just the same first name. Both sported a certain code, a DNA hardly unique to them. Some call it greed. Others humanness.  Being recent, the Madoff saga is still fairly fresh. Not so Cornfeld.

A former social worker, Cornfeld was a Columbia University product. The stars, however, seldom fall on social work. But mutual funds, we'll, that's a whole different stage. After some success selling mutual funds in the U.S. in the early '50s, a period when the investing public was finally warming up to them after a 25-year drought caused by the great 1929 Crash, Cornfield moved his stage to Paris where he sold shares, often going door to door, to American servicemen and anyone else who would buy.

Success breeds success. And by the early '60s during a bull market--who doesn't love them--he launched a new fund in new packaging called Fund of Funds, buying shares of other mutual funds inside his own.

Like all great pitchmen, Cornfeld had his own catchy oneliner: "Do you seriously want to be rich?" And he called it "people's capitalism."

His new fund was a trailblazer and he set out to find hot mutual fund managers to load up on to put the alpha in his new concoction. One of them was a guy named Fred Alger who became famous in his own right.

Cornfeld became rich himself and did his best to live up to the role, hanging out with celebrities and beautiful women and traveling the world. By 1969 his firm, Investors Overseas Services, Ltd. (IOS), employed 13,000 salesmen, had 750,000 clients in 110 countries and was called by one well-known magazine "the world's largest sales organization."

But, like an unwanted visitor, a bear market one day knocked at the investment door and his firm started losing capital. Three hundred employees filed a corruption complaint accusing him of pocketing money that belonged to them as shareholders. He was arrested and spent nearly a year in jail only to be acquitted a few years later.

By then, however, his best years of fame and fortune were behind him. Sooner or later everyone becomes prey including Cornfeld. Plagued by cries of wrongdoing, IRS woes and a flamboyant life style, he was forced to liquidate his fund. But that's another part of the story for another time.

Cornfeld died in London in 1995 at the age of 67. In his obituary the New York Times described him as "a Brooklyn-reared salesman who became one of the most flamboyant and controversial figures ever to streak through the American mutual fund industry..."

The key word here is streaked for, like it or otherwise, streaks can run both ways.

PIMCO PERFORMANCE BLUES

Most of us are familiar with the old saw about pouring rain once the clouds open up. That could easily be a description for Bill Gross and his flagship Pimco Total Return fund's first quarter results.

Though not bad, some things turn out that way only in comparison to something else. If anyone's laughing, it's still a bit early to determine who will get the last laugh.

http://blogs.barrons.com/focusonfunds/2014/03/28/pimco-total-return-a-quarter-to-forget/?mod=BOLBlog?mod=BOL_article_full_blog_etf

COST OF ATTENDING A KNOWLEDGE BOX

If  you're not familiar with the the high cost of a college education today, you probably been keeping your head somewhere where the Sun Goddess never shines.

According to some, college student loans have become modern day ATM cards for many of today's youth. Borrow the money, drop out and use the proceeds to get by. But that's only part of the story. Here's another part.
http://online.barrons.com/article/SB50001424053111903536004579465741592258398.html

A BRIEF COMMENT ON CORPORATE COMPENSATION

If you're a holder of Coca Cola stock you might want to join Dave Winters of Wintergreen Advisors who owns roughly 2.5 million shares. Winters is protesting Coke's new compensation package. Reason: excessive dilution of shares. Coke's performance the past two years, a proxy for management's performance, has been anything but stellar. So why is the company rewarding even less than mediocrity?

BANK ON THE ANECDOTAL

There's always a lot of market blabber about econometric models, quantitative versus qualitative data and plain old anecdotal stuff.

In medicine anytime the unexpected happens that the brains can't scientifically explain it's called benign remission.

In 2006 before the California real estate market started convulsing, we wrote a piece about seeing our first red-reduced-in-price sign on a tony lawn in a tony neighborhood near the beach 30 miles south of Los Angeles.

It was a familiar neighborhood, a spot where home prices went only one way--up. Here's a link to the article:
 http://www.safehaven.com/article/4545/the-love-song-of-the-us-home-owner.

So what's the point? Just this. If you talk to people and banks about their mortgage experiences, just everyday banks and everyday people, you'll appreciate this piece in this week's Barron's.

http://online.barrons.com/article/SB50001424053111904628504579419442285646018.html?mod=BOL_twm_fs

DON'T LOOK NOW

You can bet many of the climate-freaks won't like it.

Many of these same pristine loving folks didn't care much for a Japan's whale hunting ventures either.

And just when many of this same crowd thought coal was DOA, the anthracitic stuff is making an apparent comeback thanks to another favorite villain of this group, nuclear power. It's called Fukushima.
http://online.wsj.com/news/articles/SB10001424052702304688104579464942892719528?KEYWORDS=fukushima&mg=reno64-wsj

THE UNKNOWNS

Unknowns are are just another way of saying there might be something to lose here. It's a four-letter word people fear, Fear!  Talk about a motivator and that's what these folks are discussing.

http://www.bloomberg.com/news/2014-03-28/global-growth-at-risk-as-ukraine-adds-to-known-unknowns.html

NEXT MOVE UP TO MARKET

Speaking in Hong Kong today Chicago Federal Reserve President Charles Evans said he didn't expect an interest rate hike before second half of 2015 owing to low inflation and still too high unemployment.

http://www.marketwatch.com/story/feds-evans-sees-first-rate-hike-in-late-2015-2014-03-28

SIGNS

We're not sure what impending signs of an upcoming market sell-off look like and we're even less sure if anyone else does either. But here are some possible signs you might like to file away in your gray matter market data bank. http://blogs.wsj.com/moneybeat/2014/03/27/credit-suisse-weighs-in-as-permabear-warns-on-equities/

CORPORATE PHILOSOPHER

So what is a corporate philosopher? 

We'll, if you haven't been following UK banking you probably don't have an idea. If you have (There's probably a few lurking around the financial shadows here in the U.S. But we haven't seen one yet.), you're onto something.

 According to a WSJ, Barclays, the big British bank, rolled out recently new stationery embossed with the words: "Respect, Integrity and Stewardship."

Who would've thunk it anyone in the centuries-old banking industry would need to be reminded what those words mean?  Anyway, here's the link to the WSJ piece about an industry that never seems to tire of rigged bets, scandals and wayward stewards.

It makes one appreciate Voltaire's comment about bankers even more, that if you see a banker jump out of a window, it a good idea to follow 'cause there's probably a profit in it.

http://online.wsj.com/news/articles/SB10001424052702304418404579463122893382480?KEYWORDS=Uk+banks&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304418404579463122893382480.html%3FKEYWORDS%3DUk%2Bbanks

MORE ON THE STRESS TEST

Whenever you break down a story there are only a couple of plots. 

Most boil down to: man against the elements; man against man; man's inhumanity to man and man against himself which is just another way of saying man's stupidity or failure to learn.

Never make the mistake of limiting your definition of elements to things like waves, weather or storms. Greed is one of the most powerful elements man wages war against.

 And then there is fear. Read H.G. Wells' short story The Red Room.

Here's some intelligent comments about the folly of the Fed's newest toy, the financial stress test for banks. Part of this story centers on man against the elements, building the unsinkable Titanic. Another part is more about the DNA of bankers, do-gooders and politicians. 

http://www.dailyspeculations.com/wordpress/?p=9213

RESEARCH UPDATE

Here's an update to our recent blurb about big pharmaceuticals and their research. We're not implying anything about the researchers in this study, just getting the information to you. As always you decide for yourself.
http://www.marketwatch.com/story/do-you-take-statins-if-not-you-may-have-to-2014-03-27

OXY UPDATE

When one insider purchases shares it's usually insignificant.

What most followers look for is several insiders stepping up to buy window. And we don't have a problem with that. But all insider data should be placed in context and Occidental has been much in the news lately for what many believe (including us) are positives: exiting California and breaking the behemoth up. 

http://www.minyanville.com/trading-and-investing/stocks/articles/Insiders-Buy-at-Opko-Health-Occidental/3/27/2014/id/54356

RESEARCH

There's research. Then there is research. We've mentioned before how big pharmaceutical pays researchers to produce the research the big boys crave. It's neither new nor uncommon. If anything, it's much more widespread than the mesmerizing media reveals.
http://www.propublica.org/article/double-dip-doctors-paid-to-advise-promote-drug-companies-that-fund-research

BRACE YOURSELF

US NUCLEAR PLANTS

Higher utility prices on the way?

With all the ballyhoo about energy independence and abundant natural gas supplies and the ranting against the evil duo, coal and nuclear power, one might postulate: why higher energy or utility bills on the horizon?
http://www.bloomberg.com/news/2014-03-26/high-utility-costs-to-linger-after-winter-s-chill-fades-energy.html

TWO SIDES OF STORY

Normally we'd post this under Voices. But this is an important read because you get the chance to decide for yourself and, as such, deserves broader exposure.

In the end, that's what investing comes down to, deciding for yourself and accepting the consequences without bickering. Some people call it doing your homework. But even that term has its oxymoron qualities: too complicated for some, too simple for others.

http://www.minyanville.com/sectors/global-markets/articles/will-China-Debt-Bomb-Trigger-US/3/26/2014/id/54329

GETTING THE MESSAGE: MORE CHINA?
http://www.reuters.com/article/2014/03/26/us-china-debt-idUSBREA2P07Q20140326

SO FAR SO GOOD

Commodities Up So Far In 2014

We talked about commodities earlier, specifically beef and hogs and grains and cocoa. Much is being made about the China perfect slowdown that many fear will turn out not so perfect. But 2014 so far has been so good if you owned some commodities.
http://www.cnbc.com/id/101523319

A LITTLE BUFFETTOLOGY

The 10 worst places to retire included Mr. Buffett's beloved Nebraska. How Mr. B gets remunerated, you can be sure most of these tax bites don't bite him.

Buffett pays himself a pittance of a salary and takes most of his billions in capital gains taxes, taking further advantage of the state being the second least expensive place to retire.

So The B man profits two ways.
http://www.topretirements.com/blog/great-towns/10-worst-states-for-retirement-for-2014.html/

BANKS WILL BE BANKS

Run on banks not new in most places. But this is China where things for many are beginning to appear grim. Despite all claims to the contrary, the last word is perception rules. http://www.reuters.com/article/2014/03/25/us-china-banking-yancheng-idUSBREA2O0R520140325

OXY FOLLOW UP

Though this story first ran a little over a month ago, it's very much center stage. A growth-by-shrinking trend is afoot not just in the energy business. It's too bad that most governments don't take the hint.

http://www.energytribune.com/80345/will-oxys-divorce-spur-the-break-up-of-big-oil#sthash.DVFHaVvK.dpbs

QUICK MARKET WRAP

When you go swimming you never know what lurks just below the surface.

What with the all the current market jitters the real trouble might lay just below the rumblings and not in some far off place like next year when most expect the Fed to be well into its projected QE weening. http://www.fxstreet.com/analysis/daily-forex-market-wraps/2014/03/24/

QUACKING DUCKS

.

There's an old Wall Street bromide quacking ducks get fed. Initial public offerings frequently attract the fast-buck crowd. They also often accompany a feeding frenzy.
http://money.cnn.com/2014/03/24/investing/premarkets/index.html

PMI TEA LEAVES

If you're a PMI fan you might find this update http://www.marctomarket.com useful. We don't put much stock in purchasing manager stuff. But along with March Madness it can lend to glancing water cooler one-up man-ship.

On the cosmic scale of importance they're about the same.

THE MARKET RUNS THE SHOW

In a recent post, Dial Up Your Counter-Intuitive Intuitive Barometer, we stated the market, not the Fed, runs the show.

Well, here's a piece from The Big Picture that makes the case quite plainly. Check out the charts. In all the clamoring, jockeying for position and media mesmerizing it's almost always the one hardly anyone saw coming.

What's key to remember is those officials who really think they're running things really think they're running things. It's their gray matter, manipulations and presence. They are the light and the way.

http://t.ritholtz.com/bigpicture/#!/entry/the-fed-and-hyperinflation,532ea2ca025312186ce846d8/3%

DON'T FALL ASLEEP AT THE TAX SWITCH

If you like annually visiting your friendly proctologist, you'll love this bipartisan proposal.

It's another classic example of the camel getting its nose under the edge of the tent. The first step came several years ago when Congress cut the mortgage interest deduction for homes priced at one million or more. The latest proposal suggests cutting it to $500,000.

But that's not the funny part. One elected wag had the contempt to play the analogy card, suggesting in these difficult economic times the government could put those usurped funds to "good use." That's what we now know they did with all the money they garnered from the first restriction.

Not that long ago one could deduct the interest one paid on new car loans, credit cards and the like. They confiscated those deductions in 1987. This is the slippery slope of dangerous stuff. Get this in your head and keep it straight: deductions are anathema to all governments.

Fall asleep on this one and, like the line in country song about the guy's girl, "You won't even know she's gone."


http://www.marketwatch.com/story/should-congress-limit-mortgage-deduction-2014-03-22?link=MW_popular

FED SPEAK

Question: What's the difference between voodoo and Fed speak?
Answer: Nothing.

That's what the newly released 'passing grade' the Fed stamped 29 of the 30 largest banks with in their so-called stress test is, Fed Speak. Quite often government makes its net bigger under the guise of the so-called fees. The term tax is too harsh, so we'll call it fees. Big pharmaceutical does it a bit differently; they just pay researchers to produce the results they want to spread a bigger net so more patients will require their drugs. It's a great gig if one can get it.

The idea that these bankers are not savvy enough to keep certain assets in certain dark places is hardly a new one apparently to all but the Fed. And that's just the tip of the full disclosure financial treadmill test.  Once again the public remains mesmerized by the media coverage.

CONTRARIAN INDICATORS

Sentiment should come to mind. As market jitters about a looming correction crank ever higher along with the Dow, here are some to consider, according to a recent Barron's piece.

But buy recommendations from analysts for U.S. Stocks compared to those for the remaining global markets are pushing 10-year highs. And roughly 85% of economists look for U.S. growth to weigh in around 2.5% to 3.2% this year. 

And again, per Barron's, 21 of 21 strategists ( Yes, that's 100 %!  Will someone please definitively define that term?) look for the S&P 500 to close 2014 at 1850. Low hurdles and even lower hanging fruit are Wall Street products--picked, packaged and pushed.

DIAL UP YOUR COUNTER-INTUITIVE BAROMETER

Things get tweaked. That's pretty straight forward. But how about your counter-intuitive intuition.

We'll, one Wall Street maven seems to agree with us: the market not the Fed runs things.

http://blogs.marketwatch.com/capitolreport/2014/03/21/goldmans-hatzius-yellen-made-a-mistake-and-the-fed-is-on-hold-until-2016/

BE CAREFUL WHAT YOU TELL

Mark Twain noted that there are lies, damn lies and statistics. And there are ordinary folks like you and me. A harsh but important truism is everybody lies. So here is an interesting read. It's about lying.

Read it and see what you think or, if you're not into introspection, don't bother and just tell everyone you did.

http://boss.blogs.nytimes.com/2014/03/11/the-surprisingly-large-cost-of-telling-small-lies/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1

WEEKEND READS

Going into the weekend we're written before about behavior; it a simple matter about choice. And everybody makes one. With the Federal Reserve and its incestuous cronies with their ties to Wall Street the choice is always the same: bail out the banking system.

Period. Pure fact. Doesn't matter who gets trampled in the process. This last time around it was those living on fixed incomes, retirees and the working stiffs. Job creation is an oxymoron. Job destruction is a more accurate term.

http://www.testosteronepit.com/home/2014/3/22/this-chart-is-a-true-picture-of-the-unemployment-crisis-in-a.html

THE PIMCO BREAKUP STORY MARCHES ON

Break-ups are a lot like true loves: They never go smooth.

And apparently that's the path things took at Pimco, the fund group run by it legendary leader Bill Gross, who has tried to put this baby to bed more than once.


http://blogs.marketwatch.com/thetell/2014/03/20/more-troubles-for-pimco-in-wake-of-el-erian-exit/

DON'T DOUBT THE DROUGHT

The Ukraine is the sixth largest grain exporter in the world. At least that is what the market expected for this year. But given the current turmoil there now that remains to be seen.
But that's not the only possible headwind grains may face; dry weather in the Midwest, lower crop yields forecast for soybeans in Brazil might be just the tip of what could be much higher prices. Corn, beans and wheat prices are already up.

So don't doubt the drought

BUYING OPPORTUNITY

California needs Occidental much more than Oxy needs California; they just don't know it yet. These are the kinds of environmental lunacies that drive good businesses elsewhere. We view this bad news as good news; first off, it's temporary and, second, it's a buying opportunity in our view.    

Finally, in the interest of full disclosure: we own Oxy and continue to add to it on
weakness.
.http://www.bloomberg.com/news/2014-03-19/california-city-s-drilling-ban-slows-occidental-s-plan.html

FURTHER YUAN WEAKNESS?

Unlike Las Vegas what happens in China doesn't necessarily stay there.

That may be the fate of the Chinese currency if it weakens further. Concerns in the region about other currencies following suite to maintain their nation's export markets continue to trouble many in Asia.

So far this week the yuan has declined 1.2%, the biggest weekly drop since 1992.

http://www.reuters.com/article/2014/03/21/us-markets-global-idUSBRE96S00E20140321

EUROPE'S NEW ENERGY CRISIS

Last year around this time the Cyprus crisis hit the headlines. Much of it focused on the financial aspect of the trouble. But on the back burner lurked an energy issue, Europe's heavy reliance on Russian energy.
:/www.futuresmag.com/2014/03/20/europe-needs-a-new-energy-supplier

MARKET WRAP

What a difference a day makes. Interest rate-sensitive real estate and utilities ended down while the rising short end of the interest rate curve buoyed bank stocks as investors apparently tossed off concerns from yesterday's Fed speak.

The US dollar hit a three week high while UK 30-year debts gets dinged. Brent crude oil rose 60 cents to close at $106.45 a barrel. The S&P financial sector index finished up 1.7% and JP Morgan breached the $60 mark for the first time since early 2000 in an apparent case of how-quickly-they forget. Gold took its lead from the dollar closing slightly down at $1320, it's lowest level in three weeks.

THE HYPOCRITE SPEAKS

No, it's not an ancient oracle, though he is getting on in years. He is Mr. Warren Buffett, the Omaha Hypocrite of Hypocrites.

He is at it again, cutting his taxes and telling the rest of us to: "Suck it up, cupcakes!"

You have to adore their terminology "efficient tax" moves. Buffett admits he prefers to own companies rather than invest in equities. What does that mean and how many of you can do that? And we thought that's what all America's small business owners who have to yearly visit the their tax proctologist do--own their business.

Though they may be hanging a bit lower at this stage of his life, one has to give him credit; he's got a pair and he doesn't mind putting them in your face. Russia has It Vladimir and we our Hypocrite of Omaha.

http://www.bloomberg.com/news/2014-03-19/buffett-graham-swap-is-latest-deal-to-limit-u-s-tax-take.html

PUTIN THE INVESTOR

Russian President Valadimir Putin just might have taken a page from the denizens of Wall Street, welcoming a rise in energy prices. According to Bloomberg, the Russian leader might looking after his own investments.

Expect the spin doctors from both sides to crank up their spinning presses.

http://www.bloomberg.com/news/2014-03-20/putin-is-investor-in-swiss-oil-trader-gunvor-u-s-treasury-says.html

NEW COLD WAR?

If it gets much colder a new East-West Cold War could grab center stage. The Berlin Wall crumpled more than a generation ago, easing tension and proffering what was supposed to be a freer, gentler, kinder world.

Given the current impasse over the Crimea situation investors need never lose sight of the old maxim: What goes around comes around. If so, what are some of the economic consequences of such a new cold spell?

http://www.marketwatch.com/story/6-economic-consequences-of-a-new-cold-war-2014-03-19?pagenumber=2

FAKE IT 'TILL

Fake it until you make it is a saying nearly as old as what goes about comes about. And that--given it's new emphasis on qualitative rather than quantitative policy from the Federal Reserve-- roiled markets yesterday.

After all, so the assumption goes, quantitative numbers can be somewhat measured. But what's up with qualitative anything? The problem here is the quantative worshippers might be fooling themselves, believing their benchmark is the more objective of the two. It's also become the familiar beaten-down path.

Either way, investors' safest bet remains: the Fed is where it's always been--behind rather than out front of the curve. That's about as quantative and qualitative as it gets.

http://blogs.wsj.com/moneybeat/2014/03/19/analysts-react-you-have-to-read-this-statement-as-risk-off/

JANET DISAPPOINTS

Apparently, new Fed Chairwoman Janet Yellen's first appearance with the market disappointed investors as they push their sell buttons after hearing her remarks.

http://money.cnn.com/2014/03/19/investing/stocks-markets/index.html?iid=HP_LN

THE WEEK AHEAD

Here's a decent rundown of the week ahead.  
http://www.marctomarket.com

DRAGHI AND THE EURO

There's an old declaration when talk gets fast and frequent: "Put your money where your mouth is."

If Mario Draghi, the European Central Bank's president, hasn't heard it yet, but depending on how the leaves twist in the current economic breeze, he soon might.

http://online.wsj.com/news/articles/SB10001424052702303730804579437393310878278?KEYWORDS=Mario+draghi&mg=reno64-wsj

ANOTHER VIEW OF UKRAINIAN DIVISIVENESS

These divisions are hardly isolated to the Ukraine.

They exist in many if not in fact most countries. And the US is no exception.

http://www.spiegel.de/international/europe/residents-in-provincial-southern-ukraine-defend-a-lenin-statue-a-958294.html

WHERE ARE WE?

"Bonds, including government bonds, are a lot more dangerous than people imagine."
                            Jeremy Grantham

The above quote appears in the latest issue of Barron's.

http://online.barrons.com/article/SB50001424053111904628504579431002134993072.html?mod=BOL_hp_mag#articleTabs_article%3D1

END WEEK MARKET WRAP

Techs and financials led the S&P 500 down for the week's final session. But 7 of the 10 sectors were up as news continues to be mixed. China and the Ukraine remain on investor's minds. Not to mention Crimea where the vote there is set for early next week. Evidence that insiders are more bearish than they've been in years also clouded the market for many. All this just a week after the index closed at a record high closing today at 1841. 

Over in the commodities bin the inflation-fear indicators, gold and silver, finish up for the week with gold 3% higher and silver up 2.3% while crude oil backed off 3.6% and copper fell 4.2%, most likely owing to China worries. Gold gained traction for the 5th straight session. Natural gas backed off 4.2%.

Stocks in the EU fell for the 3rd day and UK equities suffered worst performance since late 2011.

So besides the Crimea vote several other things are on tap for next week. But perhaps none is more interesting than Fed Chairwoman  Janet Yellen's first FOMC meeting. Here's one observer's take on that.

http://www.marketwatch.com/story/bill-gross-fed-to-reassure-market-on-zero-rate-policy-2014-03-13

THE CHINA PROBLEM

As the chart in this article shows concern about whether China's once robust growth will turn into a paper tiger grows.

http://blogs.marketwatch.com/capitolreport/2014/03/14/another-worrying-chart-on-china/

ECONOMIC MUSICAL CHAIRS

Is it 4% or 6% or 7.2%?

Just what is it? That's right, we're talking about the big C, China, and it's projected growth for this year.

The sure thing is there are many predictions. Does it really matter? Yea, it does because perception rules on Wall Street.  Well, in this case the perception of central bankers in the US and UK, to name a couple. And it matter to the ECB.
http://blogs.marketwatch.com/thetell/2014/03/13/faber-sees-china-growth-at-4-good-news-for-its-gigantic-bubble/

ONLY WHERE?

And a lot of readers think this is only happening in America.

Not so fast. These are not-so-subtle pleas on the one hand for sovereignty and on the other for one world government.

http://www.spiegel.de/international/germany/the-eu-critical-course-of-the-german-high-court-a-958018.html

KEEP YOUR EYE ON

A couple of important reads from the WSJ to digest and then watch the developments.

The odds of any of these central bankers getting it exactly correct are slim, slimmer and slimmest.

http://blogs.wsj.com/moneybeat/2014/03/13/the-feds-age-of-inflation/?mod=WSJBlog&mod=MarketsMain

http://blogs.wsj.com/moneybeat/2014/03/11/is-the-boe-determined-to-be-behind-the-curve/

TRANSPARENCY

Despite what those T-shirts say, old men don't rule. It's the pharmaceutical and banking industries that rule. http://www.bloombergview.com/articles/2014-03-06/spare-me-your-transparency-please

And it's not just New York surgeons picking the healthier candidates to keep their mortality and mistake rates low; it's medical practitioners across the board everywhere. How many practitioners you think look forward to treating diabetics, many who are on three or four diabetic medicines a day?

Diabetics heal slower, get infections easier and often suffer amputations. DM is a nasty vascular-neuro-toxic disease. Listing calories on labels is akin to the seat belt law. Yea, it saves a few more lives, but studies show people because they feel safer drive more recklessly or, to put it kinder, spend more time driving beyond their actual driving skill.

And then there's the running-a-red-light-camera-at-every intersection fiasco. In California where violators can opt for traffic school to show their contrition, it became common price for offenders to compare their fines. The variation in those prices exceeded what one often sees on a slow day at NYSE.

"Dallas Buyer's Club," the movie two actors won academy awards for, had it correct: the FDA and big-pharma are two of your worst nightmares. Transparency is just another ploy to keep the rabble from getting too restive.

Now that's your real nightmare.

LONG OR SHORT IN THE TOOTH?

As always it's a personal decision.

http://money.cnn.com/2014/03/06/investing/bull-market-five-years/index.html?iid=Lead

JAPANESE CONSUMPTION TAX

The land of the rising sun is soon to become the land of rising consumer taxes. Everyone knows what the annouced consequences are suppose to be, cut national debt and create a surplus. That only leaves the un-intended ones. The future of Abernomics could rest in the balance. 

http://www.bondvigilantes.com/blog/2014/03/04/japan-hikes-consumption-tax-in-april-will-retail-sales-spike-in-march-only-to-collapse-afterwards/

WASHINGTON-WALL STREET WAY

A lot of people either missed or ignored it. But here's a person who apparently didn't, a leading WSJ article recently about Freddie and Fannie, two government rip offs, politicians, bankers and their ilk refuse to let endure the ignoble death it so justly deserves.

Forget mom, apple pie, dyslexic children and Roth IRAs. This is a good old fashion example of American business done the Washington-Wall Street way.

http://davidstockmanscontracorner.com/2014/03/05/bruce-berkowitzs-bogus-bombast/

A QUICK LOOK

A quick, precise look at the European Central Bank and its meeting later today and how the euro might respond to any changes.

http://www.marctomarket.com

A FOLLOW UP ON ECB MEETING

What did and didn't happen.

http://www.fxstreet.com/analysis/daily-market-recaps/2014/03/06/

A DISSENTING VOICE

A voting member of Federal Reserve raises concern about stock values. http://www.marketwatch.com/story/feds-fisher-raises-concern-over-stock-values-2014-03-05?link=mw_storieslike

THE ONE YOU DON'T SEE COMING

Most of us being of presumed sound mind and wearing life jackets realize the danger of getting too many folks on one side of the boat.

This may not be the best of the best analogies, but the constant deflation banter is sorta like if I hear about one more silly Kardashian episode, I am going to take a laxative.

You may not associate reflation with cathartics. But there's more than one way to get cleaned out. And for many investors reflation may just be the elixir nobody wants to swallow.

http://www.minyanville.com/business-news/markets/articles/Michael-Gayed-Oversold-Deflation-May-Mean/3/5/2014/id/54043

TALKS ON UKRAINE SITUATION

It will most likely take a while if not even longer than most think for any real progress between the differing sides in Paris now discussing the Ukraine crisis.

At some point if the talks drag on the market will find something else to trigger on. Think the EU debt crisis a few years back. Diddle and fiddle should come to mind here.

http://www.reuters.com/article/2014/03/05/us-ukraine-crisis-idUSBREA1Q1E820140305

MORE JELLING WITH YELLEN

Get prepared for more of what we call the Yellen Effect.

Judging from her recent remarks look for a few clouds but mostly clear skies for the stock market. Overall, the market isn't crazy-over valued here. Not yet. But keep your helmet handy. 

And as difficult as it might be to believe, unfortunately there's plenty of time and room for offically-scanctioned screw ups. Yellen talks about meeting Congress' mandate for the economy. This is the same crowd who pushed for homeownership for one and all, creating along with their friendly banker colleagues in their obtuse zeal the subprime mess. 

These are the same boys and girls who put a put option under the banking industry as part of the deal. 

http://www.bloomberg.com/news/2014-03-05/yellen-says-economy-falling-short-of-congress-mandated-goals.html

GROWTH OUTLOOK

China set to take the higher path to growth by focusing on the cleaner and leaner.
http://www.reuters.com/article/2014/03/05/us-china-parliament-idUSBREA2320S20140305

Australia's GDP quarter over quarter bumped up 0.8%, the fastest rate in a year, surprising many. Consensus sentiment called 0.7% quarter over quarter growth. Much of the drag in the economy down under stems from decreased mining which has weighed heavily on the economy.
http://www.fxstreet.com/analysis/indices-insider/2014/03/05/02/

LOSERS AND LAGGARDS

A lot of money mangers balance up their portfolios each year by selling some winners and loading up on the year's losers or laggards. With tons of eyes focused on China and the problems there, one of those laggards has been steel. And there others like mining.

http://online.wsj.com/news/articles/SB20001424052702304585004579419413143143546?mod=ITP_moneyandinvesting_8&mg=reno64-wsj

AROUND THE WEB

                                                                        LESSONS

Some things withstand the test of time. Here's a read on investing rules that reside in that area.

Take what it has to offer and move forward.

http://contrarianedge.com/2011/10/26/a-few-simple-rules-for-money-managers/

FOTRY-NINTH TIME

The S&P 500 closed today at a new high for the 49th time in the last 12 months as the situation in the Ukraine cooled a bit. It might be only one day, but it was enough to cool off at least for the nonce rising oil and gold prices.
.ttp://www.marketwatch.com/story/us-stocks-rally-sp-500-hits-intraday-record-2014-03-04?
pagenumber=1

Global equities rebounded strongly on the news that the conflict in Ukraine was simmering. The Russian MICEX index bounced back 5.28% in today's session after losing 10.68% yesterday and is now down 6.11% from last Friday's close. US and European stocks also reacted positively. The US S&P 500 (INDEXSP:.INX) gained 1.52%, and the German DAX (INDEXDB:DAX) gained 2.46%. The US small-cap Russell 2000 (INDEXRUSSELL:RUT) rose to a new record high today, up 2.92% for the day.

All 10 basic S&P sectors were in the green today, led by the health-care, financials, and industrial sectors. President Obama released his 2015 budget proposal, which included a record $3.9 trillion in spending. Additionally, the inherent growth forecasts within the proposal reveal expectations that the US will experience the strongest growth in the next fiscal year since 2005.

http://www.minyanville.com/business-news/markets/articles/ukraine-russia-vladimir-putin-crimea-armed/3/4/2014/id/54018

WHAT SHOULD AN INVESTOR DO?

What to do if the unthinkable becomes what it is, thinkable. How to play the markets if war does breakout in the Ukraine? Here's one investor's take.

http://www.marketwatch.com/story/where-to-put-your-money-if-war-breaks-out-2014-03-03?dist=tcountdown

ANOTHER MARKET VIEW OF UKRAINE DRAMA

Recently, we posted a quote from El-Erian the now lame duck former CEO and CIO at Pimco about volatility and human reactions in our Behavior page. 

Well, here's his apparent view on the Ukraine situation and markets.

http://finance.fortune.cnn.com/2014/03/03/how-the-markets-should-read-ukraines-crisis/

MARKET RAMIFICATIONS

Will it or won't it? 

That's the big question on the minds of many investors, the true impact of the tension in the Ukraine. While the Ukraine steals most of the attention right now there are certainly other hotspots hovering around. 

So is it just the Ukraine or what could develop into some kind of cumulative effect that spooks this market, Venezuela, Libya, Uganda, to name but a few? Protestors and protesting appear the flavor de jour these days. 

A wall of worry is one thing, reality another.

 http://money.cnn.com/2014/03/03/investing/ukraine-bull-market/index.html?iid=lead2

MARKETS RATTLED OVER UKRAINE

Monday morning came somewhat gloomy for investors as the fallout from the Ukraine pushed oil and gold prices higher and so-called safe have bond yields lower.

 Stocks took a hit too as the scene turned more bellicose when Russian President Vladimir Putin declared his right to invade his neighbor.

http://www.reuters.com/article/2014/03/03/us-markets-global-idUSBRE96S00E20140303

SURPRISE, SURPRISE

Some people are not surprised by what's going on in the Ukraine.

One of those not caught off guard is Brett Arends, a columnist for the website Market Watch. Given a closer look, about the only ones caught off guard is the gaggle Western politicians who now appear to be scrambling around trying to figure it all out as in what to do next.

http://www.marketwatch.com/story/the-red-flags-the-west-ignored-about-putins-russia-2014-03-02?link=MW_story_popular

MORE ON THE UKRAINE

It may not be paradise, but there's trouble afoot in the Ukraine. And that could turn an already unsteady global economy sour. 

Given the Federal Reserve's recent inclination to further ease it's foot off the QE accelerator, emerging market economies and their once plentiful foreign investors are beginning to look a little peaked.  And it may be a bit too early for the congrarian crowd to have much if any impact.

http://money.cnn.com/2014/03/02/news/economy/ukraine-economy/index.html?iid=HP_MPM

HOUSING OUTLOOK

Citing the Standard & Poor's/ Case-Shiller index' the recent issue of Barron's noted home prices jumped 11.3% in 2013. The index tracts home prices in 20 major metropolitan areas. Offsetting what some view as good news is the specter of spiking mortgage rates and the big overhang of existing homes still on the market.

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AROUND THE WEB

Stress is a brief, six-letter word. Yet it manages to ensnare most of us one way or another at times. 

Bull run or otherwise, there can be lots of stress related to the market. So here's some good advice. Give it a whirl or three and see what happens next time you find yourself entering the Stress Zone.

http://zenhabits.net/switching/