This was a pretty interesting piece in NewScientist about the stock market and how the herding effect can lead to market bubbles and crashes. The article cites a study by European researchers who studied traders and found some empirical evidence that gives credence to the idea of bubbles. The piece says:
Today’s 4-1-1
Pretty much everything you need to know about the financial markets today.
Global Disinflation Strikes
The high inflation that was supposed to result from QE and global “money printing” never came. In fact, it’s looking like the entire globe is battling disinflation now….
Chart of the Day: Don’t Think Like a Drug Addict
Every time the market takes a tumble these days everyone seems to blame the “taper” or QE. I guess there’s always a need to apply a cause to every market gyration. But I wanted to bring some perspective back to this conversation …
Rail Traffic Rebounds
Rail traffic rebounded this week after a negative print last week. Intermodal traffic expanded at 7.2% which brings the 12 week moving average to 7.1%. This is an extremely healthy reading and not consistent with yesterday’s negative economic news.
Death to the Rentier! (or not)
Watch your back. Someone might extract some rents while you’re not looking!
Today’s 4-1-1: Weak Data Alert
4 items worth reading: Prasad vs Pettis on the Future of China’s Growth – Bloomberg Brief The bear thesis from two notable market bears – Advisor Perspectives Euthanasia of the [ … ]
Ray Dalio: “If we can agree on how it works then so many other things come from that”
I don’t think it’s a coincidence that Ray Dalio and I (both market practitioners – one far worse than the other) agree on the statement in the title of this post.
Today’s 4-1-1
4 Things worth reading: 4 Secular Investment Themes by Richard Bernstein (RBA) The Stock Market Hasn’t Had a Correction in 408 days (Business Insider) Rising Interest Rates can be Good for stocks [ … ]