Howard Marks Sounds The Alarm On ETFs And Passive Investing, Again
Back in March 2015, Howard Marks was among the first to sound the alarm on the encroaching danger posed by both ETFs in particular, and passive investing in general, when he memorably asked (rhetorically, for now), “what would happen, for example, if a large number of holders decided to sell a high yield bond ETF all at once?” and answered his own question……
The Myth of India’s Information Technology Industry
Even within India, the IT industry is not what many people believe it to be. The IT sector accounts for 9.3% of the country’s GDP, or about $150 billion. While the Indian IT industry looks big from an Indian perspective, it is miniscule even in comparison with China, let alone the US. In total, a mere 3.7 million out of India’s population of 1,350 million people are employed in the IT industry. Again, most of them are working as better-paid sweat-labor, forever ready to jump to a slightly better job offer. Creative, innovative work is almost never sent to India.
The Four D’s Of Investing—-A Dissenting View
By claiming a “lower for longer” result, aren’t they assuming that both monetary and fiscal policy are impotent? Aren’t they concluding that regardless of where the Federal Reserve sets monetary policy, or how much the US government spends and borrows, officials are powerless to change this destiny? I don’t buy it. I don’t think governments and Central Banks are irrelevant by any means. And in fact, I would argue that their response to these three D’s are what will determine the destiny, not the other way round.
Crony capitalism against the Real Thing
The opponents of capitalism have succeeded in clouding the minds of many, by failing to distinguish between free-market capitalism and crony capitalism. Crony capitalism exists when politicians and government bureaucrats collude with business people to restrict competition and obtain monopoly advantages. Examples abound with everything from sole source government contracts and special tax treatments to restricting the number of taxicabs through the sale of “medallions.”
Civil Forfeiture—-The Government Fraud That Won’t Die
That Attorney General Jeff Sessions would resurrect a controversial federal program for civil asset forfeiture isn’t surprising……..But his announcement last week that the Justice Department was expanding the practice nonetheless perfectly illustrates the stubborn persistence of civil asset forfeiture. Liberals and conservatives alike despise it: Both the American Civil Liberties Union and the Charles Koch Institute have lobbied against it, achieving legitimate success at both the federal and state levels. Meanwhile, supporters of civil forfeiture — almost exclusively from the law enforcement community — are few and far between.
Our Doom Index Is Heating Up
We’re no better than anyone else – and perhaps worse – at telling you when the next crash will come. Or even how. But that it will happen… we have no doubt…..But wait; there’s something fishy here. Since 2009, earnings per share for U.S. companies have increased a spectacular 265%. Sales, however, have gone up only 32%. How is that possible? Another miracle?
Kors’ Splurge on Jimmy Choo Won’t Save Them from Retail’s Ice Age
On the surface, it looks like a smart acquisition to add the high-profile, high-heeled fashion darling to the Kors stable of upscale offerings. But there’s a lot more to it. The acquisition is a huge gamble on a new old strategy that Kors initially succeeded in executing… then royally screwed up.
Hyundai-Kia Brutally Crushed in China, Mauled in the US
Hyundai Motor Group is getting brutally crushed in its largest market, China, where it is, or rather was, the third largest automaker behind GM and Volkswagen. And it is getting mauled in its second largest market, the US, where it is the seventh largest automaker behind the Big Three US automakers and the Big Three Japanese automakers.
The Real Cost Of The Warfare State—-$1 Trillion Per Year
You wouldn’t know it, based on the endless cries for more money coming from the military, politicians, and the president, but these are the best of times for the Pentagon. Spending on the Department of Defense alone is already well in excess of half a trillion dollars a year and counting. Adjusted for inflation, that means it’s higher than at the height of President Ronald Reagan’s massive buildup of the 1980s and is now nearing the post-World War II funding peak. And yet that’s barely half the story. There are hundreds of billions of dollars in “defense” spending that aren’t even counted in the Pentagon budget.
House Passes New Russia Sanctions, Pumps Adrenaline Into Cold War 2.0
Late Tuesday afternoon the US House of Representatives overwhelmingly passed HR 3364, the “Countering America’s Adversaries Through Sanctions Act.” The vote was 419-3, with the only nays coming from Republicans Justin Amash (R-MI), John Duncan (R-TN), and Thomas Massie (R-KY). The bill adds additional sanctions on Russia as punishment for the as-yet-unproven claims that Moscow somehow interfered in US elections to help secure a victory for Donald Trump. It also seeks to punish Russia for its supposed involvement in Ukraine – ignoring that unrest in Ukraine stems from the US-initiated coup against the democratically elected government of Viktor Yanukovich in 2014.
The Root Cause Of America’s Dysfunctional Health Care System
Largely absent from the vigorous debate over reforming the nation’s health care laws is the understanding that simply being covered by health insurance does not reduce health care costs. Before the Affordable Care Act (ACA) passed in March 2010, President Obama repeatedly promised that the typical family’s health premiums would go down by (sometimes “up to” but frequently “on average”) $2,500. That decline did not occur because the ACA strengthened the control that insurance companies—as opposed to patients—have over health care spending. In fact, Americans’ increasing dependence on health insurance over the last seven decades has been a major contributor to exploding health costs.
