Daily Reading – Thursday, September 22, 2011
The Big Picture: Look Out Below, Post FOMC Version
With the Fed out of bullets, traders are now left to their own devices. That means decelerating growth, little in the way of new hiring, and peak profits retreating 15-25%. There is no cavalry coming over the hill, traders are on their own.
Next stop SPX 1100,with 950 as a realistic downside target . . .
FT Alphaville: Chinese exporters starting to do it tough
HSBC/Markit Economics’ Flash China PMIs came in at 49.4 for August — suggesting it will be the third month in a row of contractionary indicators.
It’s lower than the July’s 49.9, but slightly higher than the June final figure of 49.3.
However the export orders component of the index showed an accelerating contraction (only a minor one, however – from 49.6 to 49.5, according to Market Economics). The export orders index turned negative last month in both the flash and official PMIs.
FT Alphaville: US unemployment is, well, not so bad!
The Oregon Office of Economic Analysis has ventured an update to Carmen Reinhart and Ken Rogoff’s ‘This Time it’s Different‘, the seminal work on financial crises of the past – and their related analysis on the aftermath of financial crises.
The OOEA* uses both updated and revised data and, mostly, confirm that while things have of course gotten worse, they’re still inside the historical norms.
MarketWatch: Grantham: ‘No market for young men’
Listen to Jeremy Grantham, chairman of Boston-based investment manager GMO LLC: You can’t handle the truth.
Jeremy Grantham.“This is no market for young men,” Grantham said. “At least us old men remember what a real bear market is like, and the young men haven’t got a clue.”
SFGate: BlackRock Buys Junk Debt at Spreads Exceeding Bearish Scenarios
BlackRock Inc., the world’s biggest money manager, is buying junk bonds after relative yields widened to levels that signal default rates more than three times the current pace and in excess of Wall Street’s most bearish outlooks for the economy.
DealB%k: New Buffett Manager Gets Higher Taxes and Less Pay, by Choice
How would you feel about taking a pay cut and paying more in taxes?
Meet Ted Weschler. He just did both. And he’s happy about it.
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Here is a quick measure of his wealth: he paid $2,626,311 in a charity auction to have lunch with Mr. Buffett in 2010. That’s how they met. A year later, Mr. Weschler paid $2,626,411 to dine with him again.