Weekend Reading – Stuff we found interesting this week

July 16th 2011.

Welcome to our weekly roundup of the stuff we read that was interesting to us and hopefully to you.

Here is Westpac’s Weekly (wkly20110718) which has their call that rates are going down. You heard it here first at Lighthouse since we started. Good to see Bill has come around. 

Financial Markets are all about risk. If you are a trader or investor you need to understand how to manage and think about risk. Here is a piece by Thomas Sowell that reprises Donald Rumsfeld’s great quote about “unknown unknowns” in teh context of the US at the moment.

Here is a YouTube clip (35 secs) of what Rumsfeld said in 2003…It seems off handed and not too smart at first but listen and think about what he said. For me as a markets guy I thought it was a brilliant representation of the world we face. It is another way of saying the “absence of evidence is not evidence of absence”. He was talking about Black Swans way before Taleb.

Not trying to scare anyone but a nice summation of where we are in the sovereign debt crisis from Deutsche bank via FT Alphaville. Adult beverage required.

Project Syndicate is a must follow, as much as I want you to read my stuff the intellectual firepower on this site is unmatched anywhere in cyberspace. Here is an interesting piece by George Soros from earlier in the week about the need for a Plan B for Europe.

Also over at Project Syndicate Jonathan Scheel has a piece of the Murdoch saga and says “too many people want what the News Corporation has been offering. And what too many people want can be dangerous to a civilized, law-based society.” Interesting take – worth a look.

A good representation of what is happening in the Anglo Saxon developed markets and why consumption is so weak (particularly poignant in Australia). People just don’t feel as wealthy as they did. This from the Atlantic via Abnormal Returns.

Reinhart and Rogoff are the gurus of explaining why this crisis is going to be a long one, even though we are already past the 4 year anniversary of the start. Here is an article from Bloomberg that I referred to in a post during the week which is worth another look.

I know that often this blog has a negative bias sometimes with regard to the equity outlook but the work of Reinhart and Rogoff along with the history of economies as told by David Hackett Fischer has been telling us that this crisis is far from over. We will always seek to look for the lining in the cloud but if the macro settings are parlous we have to reflect that.

BUT mindful of this we are still aware that we and clients have risks when the sun shines again. Here is an interesting article worth reading on “upside risk”.

And of course the FT’s week in review

Have a great weekend

Greg McKenna

greg@lighthousesecurities.com.au

www.twitter.com/gregorymckenna

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One Comment on “Weekend Reading – Stuff we found interesting this week”

  1. Mr Editor Says:

    Loved the red, it is certainly the case here.

    Reply

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