Financial Markets and Economy
The big puzzle in economics today: why is the economy growing so slowly? (Vox)
The growth of the US economy keeps falling short of expectations. On Friday, we learned that the US economy grew at an inflation-adjusted rate of 1 percent in the first half of 2016. That’s the slowest six-month growth rate since 2012, and it continues the slow growth that has characterized the recovery since 2009.
The Ratings Agencies Hate This About Bank of America (Fox Business)
When it comes to debt ratings, Bank of America isn't a star pupil. Its long-term debt rating, which influences a bank's cost of funds, is lower than many of its competitors, including JPMorgan Chase, Wells Fargo, and U.S. Bancorp.
Puerto Rico is the next Detroit (Economy & Markets)
The housing bust was awful, particularly in Florida and other "sand states." As the economy slowed, consumers lost their jobs, and when they couldn't pay their mortgages they then lost their homes.
Bank shares plunge across Europe as stress tests warn of contagion (The Guardian)
Bank shares across Europe have slumped, as investors digested the results of health checks on major lenders and the impact of low interest rates on their long-term health.
College Endowments Seen Posting Worst Returns Since 2009 (Bloomberg)
U.S. college endowments are poised to take the worst slide in performance since the 2009 recession.
More Cities Will Look Like Detroit If Property Taxes Are Used to Pay for Pension Promises (Mauldin Economics)
In the NIRP-heavy world I foresee, a portfolio balanced between major equity and fixed-income will be lucky to break even. Poor returns will be a thorny problem for anyone who is contractually obligated to use portfolio returns to pay certain amounts on certain dates but hasn’t set aside funds to do it.
Gold’s $50 Billion M&A Spree Builds as Rally Boosts Values (Bloomberg)
A $50 billion gold-industry deals spree is extending into its third year, even as a surging bullion price makes sealing transactions and valuing mines more difficult.
This one statistic will give Wall Street stock pickers nightmares (Business Insider)
There's a big shift underway in the money-management business.
Prime Minister Renzi tries to sound confident about Italian banking crisis (Euro News)
Italy’s Prime Minister Matteo Renzi has been talking up the country’s third largest bank, Banca Monte dei Paschi di Siena, even after it received the worst score in Europe-wide stress tests.
U.S. Economic Confidence Hits -10 in Final Week of July (Gallup)
The Gallup Economic Confidence Index rose sharply for the week of July 25-31, climbing to -10. This broke a six-week streak in which the index did not reach any higher than -15 — the average for July.
Which non-GAAP metrics will catch the SEC’s eye? (Market Watch)
The Securities and Exchange Commission and company auditors say scrutiny of companies’ use of financial metrics that don’t comply with generally accepted accounting standards is going to increase, especially if they mislead investors, but knowing when regulators might ask more questions can be tricky.
Abenomics Return to Fiscal Lever Shows Failure to Hit Goals (Bloomberg)
Prime Minister Shinzo Abe’s return to the fiscal-stimulus lever that he first pulled three years ago showed how far he remains from hitting ambitious targets for reviving Japan’s economy.
Japan’s Worst Bond Rout Since 2013 Feeds Anxiety BOJ Near Limits (Bloomberg)
Japanese government bonds’ steepest tumble in more than three years is feeding speculation that central-bank easing is nearing its limits.
Brexit Bounce Was Central Bank Orchestrated; Volatility To Rise (Value Walk)
With all the risks in the world, why is the stock market moving higher? JPMorgan’s Quantitative and Derivatives Strategy head Marko Kolanovic has the answers to this question, as well as a take on where volatility is headed and how CTA strategies are positioned. When looking at the Brexit “V” stock market crash and resulting recovery, in an August 2 report he pegged a controversial causation for the move: unreported central bank market intervention.
Why Comcast Is the Ultimate 'Forever' Stock (The Street)
The old mantra that "video streaming will kill cable" is a good example of why investors shouldn't follow catchphrases when picking stocks and how pushing against them often results in terrific buying opportunities.
Oil Bounces On Unexpected Cushing Inventory Draw (Zero Hedge)
Following last week's surprise build in overall crude inventories (after 9 weeks of draws), API reported a smaller than expected drawdown (-1.34mm vs -2mm exp). However, oil prices are extending late-day gains as Cushing reported a major 1.3mm draw (against expectations of a 1mm barrel build). Gasoline drew down but Distillates built.
Tech Companies Are Dominating the Stock Market as Never Before (Slate)
Most days, Exxon Mobil is one of the three or four most valuable companies in the world. But on Friday morning, something remarkable and perhaps unprecedented happened. Fresh from reporting blockbuster earnings this week, both Amazon and Facebook eclipsed the petroleum giant in market capitalization.
Global trade is not growing slower – it's not growing at all, finds a new report (World Economic Forum)
Falling rates of global trade growth have attracted much comment by analysts and officials, giving rise to a literature on the ‘global trade slowdown’ (Hoekman 2015, Constantinescu et al. 2016). The term ‘slowdown’ gives the impression of world trade losing momentum, but growing nonetheless.
Sturm, Ruger & Co. reports a 19% jump in sales and greater demand for guns (Business Insider)
Sturm, Ruger & Co. reported a rise in second-quarter sales as demand for its firearms increased.
An Updated Look at the Buffett Valuation Indicator (Financial Sense)
Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001, he remarked in a Fortune Magazine interview that "it is probably the best single measure of where valuations stand at any given moment."
Why Goldman Is Shocked By What Bill Dudley Said: "This Can't Be In The Best Interest Of The US" (Zero Hedge)
One would expect anything that former Goldman managing director, and current head of the NY Fed, Bill Dudley says would not come as a surprise to Goldman Sachs, for obvious reasons. However, that was not the case when looking back at a speech delivered by Bill Dudley on Sunday night titled "The U.S. Economic Outlook and the Implications for Monetary Policy."
Renewables share of North America electricity mix expected to rise (Energy Information Administration)
Based on results from EIA's Annual Energy Outlook 2016 Reference case and International Energy Outlook 2016, EIA projects that the North American share of energy generation from renewable and nuclear energy sources will grow from 38% in 2015 to 45% in 2025. This projection assumes the Clean Power Plan (CPP) is upheld and takes effect in the United States.
Worst recovery in post-war era largely explained by cuts in government spending (Economic Policy Institute)
In a story in the Wall Street Journal last Friday, reporter Eric Morath notes that the recovery from the Great Recession has been historically slow. “In terms of average annual growth,” he writes, “the pace of this expansion has been by far the weakest of any since 1949.”
Politics
Obama Calls Trump 'Unfit' To Be President, Questions Why Republicans Still Endorsing (NPR)
President Obama reiterated that he believes Donald Trump is "unfit" to be president, issuing a sharp rebuke of the Republican nominee from the White House East Room on Tuesday.
Yes, the TPP agreement is over 5,000 pages long. Here’s why that’s a good thing. (Washington Post)
Donald Trump and Hillary Clinton don’t agree on much, but they seem to be in sync on trade. Each wants to address China’s alleged currency manipulation, both want more litigation at the World Trade Organization, and Trump has borrowed a page from Clinton’s 2008 playbook in promising to move unilaterally against foreign trade partners that Washington deems to be violating U.S. exporter rights.
Trump Promises To Double Clinton’s Infrastructure Spending, Can’t Say How He’d Pay For It (Think Progress)
Republican Presidential nominee Donald Trump claimed that he would “at least double” whatever Hillary Clinton plans to spend on repairing infrastructure in an August 2 appearance on Fox Business, but failed to coherently answer how he would implement and pay for his plan.
Technology
China Actually Built That Crazy Traffic-Straddling Bus (Gizmodo)
For years China’s been toying with the idea of building a massive bus that straddles multiple lanes of cars to move commuters without creating a traffic mess. To date, it’s only existed as fancy computer renders and animations. But starting today a real-life version starts testing in Qinhuangdao, China.
What We can Learn From Prisma about Viral marketing (Entrepreneur)
Every time something goers viral on the internet world, marketers frown, express awe and shock at how something so ingeniously simple can go so famous with little to no effort spent on making it that famous. This rule is especially applicable to apps going viral in download sales number. Just look at all the apps that have exceeded expectations in download numbers recently – including Pokemon Go, Angry Birds, Candy Crush, Temple Run, Flappy Birds, MSQRD and every other that’s en the world bys storm recently.
Health and Life Sciences
7 mental models you should know for smarter decision making (The Next Web)
Every one of us make dozens, if not hundreds of small to big decisions on a daily basis.
Some don’t impact our lives at all, while some can change the outcome of our entire lives.
How Einstein and Edison Solved Problems in Their Sleep (Inc.)
Eat. Sleep. Solve problems. Repeat. You probably spend a large part of your waking hours tackling challenges, especially when you're at work.
Life on the Home Planet
It’s amazing how much taller people are than 100 years ago (Tech Insider)
People in most of the world have gotten significantly taller in the past century.
A network of health scientists known as the Non-Communicable Diseases Risk Factor Collaboration (NCD-RisC), released a study ranking height around the world for men and women. The study looked at height differences for 18-year-olds born in 1896 versus 1996 in 187 countries.
Siberia is so warm frozen viruses are thawing and infecting people (Popular Science)
In Russia last week several cases of anthrax were reported in a nomadic reindeer herding community. Eight people have been formally diagnosed with the disease and one 12-year-old boy has died.
