10 THINGS YOU SHOULD KNOW

1. Companies in the S&P 500 get 34% of their revenue outside US borders. 

2. Indexes tend to be overweighted in whatever’s been hot.

3. Parkinson said it all in his famous "Law": "Expenditures rise to meet income." 

4. Many studies, formal and informal, have been made of the record of forecasting by economists, and it has been consistently abysmal.

5. Inflation will be the path of least resistance politicians take in the end. It's part of their DNA.

6.  A 1776 quote from Adam Smith about what's notoriously known today as "kicking the can."

      

"To relieve the present exigency is always the object which principally interests those immediately concerned in the administration of publick affairs.  The future liberation of the publick revenue, they leave to the care of posterity.”

7. Stronger dollar will hurt multinational companies.

8. Offshoring to lower costs is over.

9. Employee compensation is around 55% of GDP, the lowest it's been in 60 years.

10. Earnings as a percent of sales, around 9%, are near 20 year highs.

              

THE FRENCH WAY

If you want an idea of where America is headed, read this article about where France is and has been.

Truth be told this is not just France; it's the entire European Union, a tax crazy, regulation-stagnant, bureaucratic-bloated, green-whipped pathetic mess. 

http://online.wsj.com/article/SB10001424127887323716304578482672751540706.html?mod=ITP_pageone_0

THURSDAY READS

Pass The Mayo http://blog.diynetwork.com/maderemade/2013/04/29/diy-mayonnaise-8-handy-uses-that-dont-involve-food/?affiliate=blocker&omnisource=SEM&c1=MadeRemade&c2=Outbrain&c3=RSS&c4=DIY-Mayonnaise-8-Handy-Uses-That-Don?t-I

Bubble Talk
http://www.businessweek.com/articles/2013-05-14/this-bull-is-like-the-tech-bubble-but-different#r=hpt-ls

Watch Junk Not Bouncing Ball http://online.barrons.com/article/SB50001424052748704551504578485360775930142.html?mod=BOL_hpp_highlight_bottom#articleTabs_article%3D0

Canadian House Bubble
http://www.creditwritedowns.com/#

Insanity Bureaucrat Style
http://www.fool.com/investing/general/2013/05/14/anatomy-of-the-worlds-most-insane-health-care-bill.aspx

Outcome Versus Association
http://www.reuters.com/article/2013/05/15/us-ovarian-cancer-idUSBRE94E0XB20130515

Name Your Fix
http://blogs.marketwatch.com/thetell/2013/05/15/central-bank-methadone-is-still-bad-for-capital-markets-black-rock/

Trust Your Bank. Really?
http://money.cnn.com/2013/05/15/technology/security/bank-heist/index.html

FAVORITISM

During the Bush years much was made of his friends in the oil business. 

The implication was always the same, favoritism.  And for every hydrocarbon accident one could expect to hear the shrill voice of environmentalists. 

Obama is surely a friend to green energy, in particular wind and solar. Solyndra should come to mind. But as the linked story below shows one man's favoritism doesn't necessarily equate to another's, president or not.

http://www.energytribune.com/76807/obama-administration-gives-pass-to-wind-energy-companies-on-eagle-deaths#sthash.BW34ISrW.dpbs

CONSIDER

Conspiracy is a term that gets tossed around freely today. It's a term you need to be mindful of especially in its now common context.

Most often it's used to neutralize or marginalize. That is, anyone who the questions the establishment can get labelled with it. It's a variation of the popular political technique damage control.

For openers check out the controversies now threatening to engulf President Obama and this administration. Collusion is suppose to a legal no-no. And that brings us to inflation and the bond market. 

We'll suffer the risk of ire from the name-callers to bring you another viewpoint. We don't claim to be correct. But we do claim to consider. And if you want to be successful in this economic jungle, that's what you need to do. 

http://blog.milesfranklin.com/can-gold-rise-during-deflation

WEDNESDAY READS

A Pimco View
http://online.barrons.com/article/SB50001424052748704551504578482793093148444.html?mod=BOL_hps_oe#articleTabs_article%3D0

Sync Or No Sync
http://www.cnbc.com/id/100736820

Follow The Indifference
http://blogs.wsj.com/totalreturn/2013/05/14/markets-and-memory-banks/

Offshore No More? http://www.testosteronepit.com/home/2013/5/14/the-hollowing-out-of-chinese-manufacturing.html

US Stocks And Aussie Dollar http://blogs.marketwatch.com/thetell/2013/05/14/is-tumbling-australian-dollar-canary-in-coal-mine-for-u-s-stocks/

Stronger Dollar Good Or Bad?
http://investorplace.com/2013/05/stronger-dollar-spells-bad-news-for-stocks-oil-gold/

Breakout Or Flop?
http://news.investors.com/investing-international-leaders/051413-656014-michael-kors-forming-stock-base.htm?ref=HPLNews

US Oil And Future Demand
http://money.cnn.com/2013/05/14/news/world/oil-iea-demand/index.html

BRIEFS

It's not the air. And it's not about slow growth or deflation despite what MSM may tell you. And it's not about inflation. There's plenty of that around. It's just not the kind these people want.

It's about currency debasing. The latest to join the crowd since Japan kicked off the party in April is Israel whose economy is "heavily dependent on exports, and a strong shekel weakens the competitiveness Israeli products abroad."   

In the last few weeks several countries have lowed their interest rates. Competitive advantage is what economists call it. And that's the current worry-wart facing most of these countries. 

The fear is the age-old one: Don't let the other guy get one up on you.

http://online.wsj.com/article/SB10001424127887324216004578481283977918230.html?KEYWORDS=banks+rush

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Don't worry is a popular saying. Not too long ago it was a catch line of a popular song. Now Moody's the bond rating agency recently advised us all to stop the economic hand ringing: there's no bond bubble.

So we can all breathe a sigh of relief, here's a quote from the same agency that gave all those subprime mortgage beauties a triple A rating before the curtain got pulled.

"Recent concerns about a 'bubble' in corporate bond markets look overstated… Overall, drivers of demand and supply offer no strong evidence that recent issuance levels presage a damaging correction......"
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TUESDAY READS

Second Leg Up?
http://www.usatoday.com/story/money/markets/2013/05/13/is-stock-market-breakout-sign-of-new-upleg/2142561/

Import Prices Down
http://www.reuters.com/article/2013/05/14/us-usa-economy-prices-idUSBRE94D0GU20130514

Rate Cut
http://online.wsj.com/article/SB10001424127887324216004578481283977918230.html?mod=ITP_pageone_

Some Of  EU Shine Gone http://online.wsj.com/article/SB10001424127887324031404578481272902309736.html?mod=ITP_pageone_2

Spying The New Fashion Way
http://www.minyanville.com/sectors/technology/articles/Bloomberg-data-privacy-internet-privacy-consumer/5/14/2013/id/49800


The Japanese Situation
lhttp://www.creditwritedowns.com/2013/05/the-real-experiment-that-is-being-carried-out-in-japan.html


More Spying
http://www.marketwatch.com/story/ap-says-doj-secretly-obtained-phone-records-2013-05-13?dist=beforebell

ENERGY

We've mentioned energy before. 

We think there's value there, despite the hydrocarbon haters. Energy demands will only grow. In the short run it's doubtful alternative energy will make much of an impact. 

Opposing forces will see to that. Like the Washington bureaucrats, agreement is hardly a given. And leaving it up to those same bureaucrats will devolve into one of mankind's greatest errors.

So own some energy and that includes water.

http://blogs.marketwatch.com/thetell/2013/05/13/blackrock-avoid-utilities-buy-tech-and-energy/

A RELATED PIECE

Chinese solar panel imports are everywhere.

Yet the world's largest solar panel producer by volume resides in Merkel Land, Germany. Slapping tariffs on imports is a form of currency debasing dressed up in patriotic garb. 

And it can be dangerous. But the next to last paragraph in this story is the most important to us because it relates to our Dirty Word piece.

http://online.wsj.com/article/SB10001424127887324059704578475300172707498.html?KEYWORDS=The+cloudy+logic
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