Weekend Reading – Stuff we found interesting this week

October 29, 2011

Interesting Links

October 29th 2011.

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

What a week hey both at home and in interenational markets. At home we had Ric Battellino from the RBA sounding like he was in no hurry to cut rates only to be trumped by a very low core CPI reading building market expectations of cuts only to have that trumped by a super charged global equity rally. Lots of bets to be placed on Melbourne Cup day and the RBA decision is just one more – I think the economy needs it so I’m saying Yes, they’ll cut because the economy needs it.

Offshore the Euro package seems to have broken the dam wall of relief. Markets are clearly overbought in the short term and October has been an amazing month. A pessimistic crescendo in the early part of the month followed by one of the biggest 1 month rallies of all time. Where are we now? Still in a secular bear market but with room for relief to fuel the move higher in risk assets for a little longer. Don’t fall in love with it though.

Here is our weekly list.

The Ipod is 10 this week and I saw this article from the New York Times run again from the original launch.

Everything Andrew Haldane writes I read here is something on the History and future of banking. There is an embedded link to the full paper which is worth the time.  

Ray Dalio runs the biggest hedge fund in the world – so he gets to see plenty of things and has interesting thoughts worth listening to. Here is a piece on the malaise that faces us because politicians arent leading anymore.  Here is the transcript from last week’s video.

 This is a great piece on how World power is swinging back to America by Ambrose Evans Pritchard of the UK Telegraph.  

I am a housing bear, insofar as I think prices will fall on average around 10% nominal and 20% real before they bottom out. there are many however who reckon the boomers are going to make things worse for us Xers and give Y’s a good opportunity to get into the market. Here is a piece by my colleague over at MacroBusiness Leith. It is an excerpt from the full repoprt which can be gained by signing up at MacroBusiness at no cost. 

 Here is Ric battellino’s speech from earlier in the week – all Australians should read to get to know what the RBA actually thinks.

 And here is a piece from the Wall Street Journal  on the difficulty facing the RBA in managing this economy.

Some hurdles for Europe in the long run http://www.economist.com/blogs/democracyinamerica/2011/10/too-big-fail?fsrc=scn/tw/te/bl/avoidingregionalresentment

 The rich getting richer the poor get the picture…so went the Midight Oil song from the 80’s…it hasn’t stopped. Here is a piece on the US income gap. And here’s is the you tube link for the nostalgists of Midnight Oil singing read about it. Don’t you just think that Midnight Oil would resonate with the “Occupy” crowd. I’m pretty sure “power and the passion” would…here’s that link too  

Technicals are fundamental when it comes to trading, here is a paper that proves it.  

When you are trading you probably make more money running with the trend in the long run than you do by being a contrarian. Often I naturally want to go the other when we have big moves like we are having this month but here is a piece that suggests perhaps we should not. And here is a related piecc 

 

Now off course there are too many pieces we could link on Europe but here is a piece from the Economist magazine this morning saying that the Euro deal is “no big bazooka”. There is no argument there in the longer term but the resolve is really important. Ultimately Europe slow growth future wont change but for now the market runs. As we have said a few times rides this wave but be ready to hop off quick.

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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