Cut costs.
Collect all the data.
Control the universe - the Amazon way. PB
----
From Wired.com:
The steady march towards cheaper cloud storage has just turned into a sprint.
Rather than being merely competitive with leaders like Google Drive, Dropbox, and iCloud, Amazon has decided to undercut their pricing by more than half.
In some cases, much, much more.
Amazon’s Unlimited Everything plan means that you now can stash all of your digital stuff in your own private Amazon cloud locker for $60 per year.
That’s compared to the $100 per year that individual Dropbox users pay for a plan capped at 1TB (there’s also a $15 per month unlimited plan for business accounts), $120 per year for 1TB on Google Drive, and $240 for the same amount on iCloud.
Throw in Amazon’s three-month free trial offer—and consider that truly unlimited plans aren’t even an option for individual users on most rival services—and the unprecedented value of Amazon’s Unlimited Everything Plan comes more into focus...
----
Link: http://www.wired.com/2015/03/amazon-unlimited-everything-cloud-storage/
Friday, March 27, 2015
Middling along: U.S. economy
The economy is ok, not great.
Corporate profits look like Harry Reid's face.
You, the consumer, spend well. Happy Easter. PB
----
From Reuters.com:
U.S. economic growth cooled in the fourth quarter and after-tax corporate profits took a hit from a strong dollar, which could undermine future business spending.
Gross domestic product expanded at a 2.2 percent annual rate...
After-tax corporate profits declined at a 1.6 percent rate last quarter...
Multinationals such as technology giant IBM, semiconductor maker Intel Corp, industrial conglomerate Honeywell and Procter & Gamble, the world's largest household products maker, have warned that the dollar will hurt their profits this year...
For all of 2014, after-tax corporate profits fell 8.3 percent, the largest annual drop since 2008.
Economists had expected fourth-quarter GDP growth would be revised up to a 2.4 percent rate and after-tax corporate profits would rise at a 1 percent pace...
But consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 4.4 percent rate in the fourth quarter instead of the 4.2 percent rate reported last month.
It was the fastest pace since the first quarter of 2006.
Consumer spending, however, moderated early in the first quarter as cold and snowy weather kept shoppers at home.
Households also appear to have opted to save the bulk of their savings from lower gasoline prices.
----
Link: http://www.reuters.com/article/2015/03/27/us-usa-economy-idUSKBN0MN1H820150327
Corporate profits look like Harry Reid's face.
You, the consumer, spend well. Happy Easter. PB
----
From Reuters.com:
U.S. economic growth cooled in the fourth quarter and after-tax corporate profits took a hit from a strong dollar, which could undermine future business spending.
Gross domestic product expanded at a 2.2 percent annual rate...
After-tax corporate profits declined at a 1.6 percent rate last quarter...
Multinationals such as technology giant IBM, semiconductor maker Intel Corp, industrial conglomerate Honeywell and Procter & Gamble, the world's largest household products maker, have warned that the dollar will hurt their profits this year...
For all of 2014, after-tax corporate profits fell 8.3 percent, the largest annual drop since 2008.
Economists had expected fourth-quarter GDP growth would be revised up to a 2.4 percent rate and after-tax corporate profits would rise at a 1 percent pace...
But consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 4.4 percent rate in the fourth quarter instead of the 4.2 percent rate reported last month.
It was the fastest pace since the first quarter of 2006.
Consumer spending, however, moderated early in the first quarter as cold and snowy weather kept shoppers at home.
Households also appear to have opted to save the bulk of their savings from lower gasoline prices.
----
Link: http://www.reuters.com/article/2015/03/27/us-usa-economy-idUSKBN0MN1H820150327
Thursday, March 19, 2015
WSJ: Continuing Jobless Claims Near a Low, and That May Not Be Good
What has been obvious for over 6 years is now getting more attention. Really?
This economic recovery has been weak, selective, and punishing to many millions of Americans who for 6 years have remained painfully aware of what they have missed. They know what is happening and not happening.
Real economic challenges remain for those Americans out of the workforce who suffer primarily from two conditions:
1. Being poorly educated
2. Remaining left out after downsizing stopped and stayed stuck at lower downsized levels.
Imagine people who rode an elevator down that eventually stopped, but didn't go back up.
What should those people do who are left at a lower level, especially if the typical set of stairs is gone?
The way up is missing for millions of Americans in this economy!
Also, what has happened to small business formation these last few years?
It should be clear that more government is not an answer. And it should be clear that the poorly educated suffer because of an incompetent and politically motivated government that runs most schools. PB
----
From the Wall Street Journal online:
A historically low share of unemployed Americans is tapping unemployment benefits, a development that on its face seems good but one that may be masking the degree of slack in the labor market.
...even in an improving labor market—with the number of unemployed at the lowest level since the recession ended—an unusually large number of Americans are stuck in a rut of long-term unemployment that could derail their prospects to find new work.
“We’ve seen millions of Americans who want to work become discouraged and drop out of the labor force,” said Claire McKenna, policy analyst at the National Employment Law Project.
Indeed, many Americans have slipped off benefit rolls and stopped looking for work.
As a result, they may be missing from key gauges of joblessness.
That hole has drawn concern from Federal Reserve officials and other policy makers given the longer-term risks to the U.S. economy.
People who are unemployed and without benefits are increasingly likely to drop from the labor force entirely, research has shown, converting a potentially productive worker into one with limited capacity to contribute to economic output...
Whether people who lost jobs attempt to find new ones is a key consideration for Fed policy makers assessing the health of the labor market.
The unemployment rate fell to 5.5% in February, the lowest reading since May 2008. The data suggest the economy is moving closer to full employment, putting the Fed in position this year to raise short-term interest rates from near zero for the first time since 2008.
Some officials are worried that the share of Americans participating in the labor force remains near the lowest levels since the 1970s.
The low numbers could be a sign of deeper slack that limits stronger wage gains, keeping inflation below the Fed’s target even longer.
In addition, the share of Americans unemployed for more than six months or stuck in part-time jobs remains elevated.
The Fed this week showed it remained cautious about the health of the labor market. “Considerable progress clearly has been achieved, but room for further improvement in the labor market continues,” Fed Chairwoman Janet Yellen said Wednesday after a two-day meeting.
----
Link: http://www.wsj.com/articles/continuing-jobless-claims-near-a-low-and-that-may-not-be-good-1426793681
This economic recovery has been weak, selective, and punishing to many millions of Americans who for 6 years have remained painfully aware of what they have missed. They know what is happening and not happening.
Real economic challenges remain for those Americans out of the workforce who suffer primarily from two conditions:
1. Being poorly educated
2. Remaining left out after downsizing stopped and stayed stuck at lower downsized levels.
Imagine people who rode an elevator down that eventually stopped, but didn't go back up.
What should those people do who are left at a lower level, especially if the typical set of stairs is gone?
The way up is missing for millions of Americans in this economy!
Also, what has happened to small business formation these last few years?
It should be clear that more government is not an answer. And it should be clear that the poorly educated suffer because of an incompetent and politically motivated government that runs most schools. PB
----
From the Wall Street Journal online:
A historically low share of unemployed Americans is tapping unemployment benefits, a development that on its face seems good but one that may be masking the degree of slack in the labor market.
...even in an improving labor market—with the number of unemployed at the lowest level since the recession ended—an unusually large number of Americans are stuck in a rut of long-term unemployment that could derail their prospects to find new work.
“We’ve seen millions of Americans who want to work become discouraged and drop out of the labor force,” said Claire McKenna, policy analyst at the National Employment Law Project.
Indeed, many Americans have slipped off benefit rolls and stopped looking for work.
As a result, they may be missing from key gauges of joblessness.
That hole has drawn concern from Federal Reserve officials and other policy makers given the longer-term risks to the U.S. economy.
People who are unemployed and without benefits are increasingly likely to drop from the labor force entirely, research has shown, converting a potentially productive worker into one with limited capacity to contribute to economic output...
Whether people who lost jobs attempt to find new ones is a key consideration for Fed policy makers assessing the health of the labor market.
The unemployment rate fell to 5.5% in February, the lowest reading since May 2008. The data suggest the economy is moving closer to full employment, putting the Fed in position this year to raise short-term interest rates from near zero for the first time since 2008.
Some officials are worried that the share of Americans participating in the labor force remains near the lowest levels since the 1970s.
The low numbers could be a sign of deeper slack that limits stronger wage gains, keeping inflation below the Fed’s target even longer.
In addition, the share of Americans unemployed for more than six months or stuck in part-time jobs remains elevated.
The Fed this week showed it remained cautious about the health of the labor market. “Considerable progress clearly has been achieved, but room for further improvement in the labor market continues,” Fed Chairwoman Janet Yellen said Wednesday after a two-day meeting.
----
Link: http://www.wsj.com/articles/continuing-jobless-claims-near-a-low-and-that-may-not-be-good-1426793681
Sunday, March 15, 2015
Good! The U.S. Dollar: Larry Kudlow
From Larry Kudlow at RealClearMarkets.com:
----
A strong greenback is a very good thing indeed
Despite the conventional criticisms of the financial commentariat, both theory and evidence argue for a strong, stable, and reliable currency as a crucial channel to prosperity.
Just think of the reverse: If you could devalue your way into prosperity, Argentina would be the center of the world economy...
Wall Street insists that King Dollar is bad. It is wrong.
This falsehood is a near cousin to the idea that falling energy prices will wreck the economy. Also wrong.
Energy will slow, but the rest of the economy will benefit.
In fact, the rising dollar, a key factor in the oil-price plunge, provides a double tax cut for the economy. Both will also promote world recovery.
Over the past year, the dollar has appreciated about 20 percent.
So what happened?
The S&P 500 is up 11 percent and the American economy has actually improved...
And the inflation rate is nil. The consumer price deflator is flat...
What's happening?
The dollar is up and oil prices are down. The economy, jobs, and stocks are up, and inflation is down.
How could this be bad?
So let me dust off some of my golden oldies: King Dollar is a very good thing.
King Dollar has far-reaching benefits that way offset any temporary small costs.
King Dollar is pro-growth...
In fact, the King Dollar/plunging-energy-price combination has substantially reduced the cost structure of American businesses, making them more competitive.
And at the same time, the buying power of consumer incomes is significantly increased as prices for energy, food, and virtually all goods and services have dropped...
How about some more history?
Between 1982 and 2000, as the dollar increased 178 percent, King Dollar (with lower tax rates and lighter regulation) presided over a stock market gain of 1,099 percent, a jobs increase near 40 million, and 3.5 percent average annual real GDP.
During the recent dollar decline period, from 2001 to 2011, as the dollar fell 25 percent, jobs increased a paltry 2.3 million, real GDP growth averaged less than 2 percent, and the S&P gained a measly 15 percent.
And don't forget the dreadful 1970s: The dollar plunged, the economy suffered through years of stagflation, and the real value of stocks fell significantly...
In any event, as the Fed slows its accommodation, and while pro-growth corporate tax reform is in the air, King Dollar is on the rise.
Stop whining, folks. It's a good thing.
----
Link: http://www.realclearmarkets.com/articles/2015/03/14/king_dollar_naysayer_nonsense_101580.html
----
A strong greenback is a very good thing indeed
Despite the conventional criticisms of the financial commentariat, both theory and evidence argue for a strong, stable, and reliable currency as a crucial channel to prosperity.
Just think of the reverse: If you could devalue your way into prosperity, Argentina would be the center of the world economy...
Wall Street insists that King Dollar is bad. It is wrong.
This falsehood is a near cousin to the idea that falling energy prices will wreck the economy. Also wrong.
Energy will slow, but the rest of the economy will benefit.
In fact, the rising dollar, a key factor in the oil-price plunge, provides a double tax cut for the economy. Both will also promote world recovery.
Over the past year, the dollar has appreciated about 20 percent.
So what happened?
The S&P 500 is up 11 percent and the American economy has actually improved...
And the inflation rate is nil. The consumer price deflator is flat...
What's happening?
The dollar is up and oil prices are down. The economy, jobs, and stocks are up, and inflation is down.
How could this be bad?
So let me dust off some of my golden oldies: King Dollar is a very good thing.
King Dollar has far-reaching benefits that way offset any temporary small costs.
King Dollar is pro-growth...
In fact, the King Dollar/plunging-energy-price combination has substantially reduced the cost structure of American businesses, making them more competitive.
And at the same time, the buying power of consumer incomes is significantly increased as prices for energy, food, and virtually all goods and services have dropped...
How about some more history?
Between 1982 and 2000, as the dollar increased 178 percent, King Dollar (with lower tax rates and lighter regulation) presided over a stock market gain of 1,099 percent, a jobs increase near 40 million, and 3.5 percent average annual real GDP.
During the recent dollar decline period, from 2001 to 2011, as the dollar fell 25 percent, jobs increased a paltry 2.3 million, real GDP growth averaged less than 2 percent, and the S&P gained a measly 15 percent.
And don't forget the dreadful 1970s: The dollar plunged, the economy suffered through years of stagflation, and the real value of stocks fell significantly...
In any event, as the Fed slows its accommodation, and while pro-growth corporate tax reform is in the air, King Dollar is on the rise.
Stop whining, folks. It's a good thing.
----
Link: http://www.realclearmarkets.com/articles/2015/03/14/king_dollar_naysayer_nonsense_101580.html
Bad! The U.S. Dollar: David Stockman (Yes, Bad! but not just yet...)
From David Stockman's Contra Corner:
----
Why The Dollar Is Rising As The Global Monetary Bubble Craters
Contra Corner is not about investment advice, but its unstinting critique of the current malignant monetary regime does not merely imply that the Wall Street casino is a dangerous place for your money.
No, it screams get out of harms’ way. Now!
Yet I am constantly braced with questions about the US dollar and its impending demise.
The reasoning seems to be that if America is a debt addicted dystopia— and it surely is— won’t the US dollar sooner or later go down in flames as the day of reckoning materializes?
Won’t you make money shorting the doomed dollar?
Heavens no! At least not any time soon.
The reason is simply that the other three big economies of the world—Japan, China and Europe—are in even more disastrous condition...
Wall Street analysts and economists tell it, Japan, China and Europe are just variants of the US economy with different mixes of pluses and minuses, experiencing somewhat different stages of the economic cycle and obviously shaped by their own diverse brands of domestic politics and economic governance...
Actually, not so.
Japan is a bankrupt old age colony.
China is the most monumental credit and construction Ponzi in human history.
Europe is a terminal victim of socialist welfare and statist dirigisme.
All three are attempting to defer the day of reckoning via resorting to a final spasm of money printing and central bank manipulation that is so desperate and crazy that it can only end in disaster.
So there is no global convoy of inexorable economic growth and progress.
Instead, we are entering a new era of spectacular financial disorder and credit fueled booms turning into unprecedented deflationary busts.
And it is the three big economies outside the US which will hit the wall first, causing the US dollar to thrive on a relative basis...
----
Link: http://davidstockmanscontracorner.com/why-the-dollar-is-rising-as-the-global-monetary-bubble-craters/
----
Why The Dollar Is Rising As The Global Monetary Bubble Craters
Contra Corner is not about investment advice, but its unstinting critique of the current malignant monetary regime does not merely imply that the Wall Street casino is a dangerous place for your money.
No, it screams get out of harms’ way. Now!
Yet I am constantly braced with questions about the US dollar and its impending demise.
The reasoning seems to be that if America is a debt addicted dystopia— and it surely is— won’t the US dollar sooner or later go down in flames as the day of reckoning materializes?
Won’t you make money shorting the doomed dollar?
Heavens no! At least not any time soon.
The reason is simply that the other three big economies of the world—Japan, China and Europe—are in even more disastrous condition...
Wall Street analysts and economists tell it, Japan, China and Europe are just variants of the US economy with different mixes of pluses and minuses, experiencing somewhat different stages of the economic cycle and obviously shaped by their own diverse brands of domestic politics and economic governance...
Actually, not so.
Japan is a bankrupt old age colony.
China is the most monumental credit and construction Ponzi in human history.
Europe is a terminal victim of socialist welfare and statist dirigisme.
All three are attempting to defer the day of reckoning via resorting to a final spasm of money printing and central bank manipulation that is so desperate and crazy that it can only end in disaster.
So there is no global convoy of inexorable economic growth and progress.
Instead, we are entering a new era of spectacular financial disorder and credit fueled booms turning into unprecedented deflationary busts.
And it is the three big economies outside the US which will hit the wall first, causing the US dollar to thrive on a relative basis...
----
Link: http://davidstockmanscontracorner.com/why-the-dollar-is-rising-as-the-global-monetary-bubble-craters/
Saturday, March 14, 2015
10 year results for active managers: pretty terrible
This was obvious ten years ago.
Buy ETF index funds. Pay total annual fees of 0.2% or less.
Keep them for life.
ETFs now have $2 Trillion invested in them. That should double in size. PB
----
From CNBC.com:
Fewer than 1 in 4 active managers have outperformed market benchmarks over the past 10 years and only about 4 percent of large-cap growth fund pros did so in 2014, according to a sweeping new study released Thursday by S&P Dow Jones Indices.
At a time when the broader market has been on a tear, posting double-digit percentage increases over each of the last three years and with the S&P 500 up about 210 percent from its lows six years ago, stock pickers have lagged well behind.
More than 86 percent of large-cap managers overall lagged basic indexes in 2014, and more than 82 percent fell into the same boat over the past three-, five- and 10-year periods...
Following indexes, which is at the core of passive management, has surged in popularity over the past several years, with the exchange-traded fund industry swelling to more than $2 trillion in total assets.
ETFs trade like stocks but almost all of them follow indexes like the S&P 500 and Nasdaq, or sectors within them...
Indeed, ETFs come with much lower fees than actively managed mutual funds and carry tax advantages while being easier to trade.
With the continued level of underperformance and the other advantages index-based investing has provided, it's a tough hill to climb for active managers.
----
Link: http://www.cnbc.com/id/102500216
Buy ETF index funds. Pay total annual fees of 0.2% or less.
Keep them for life.
ETFs now have $2 Trillion invested in them. That should double in size. PB
----
From CNBC.com:
Fewer than 1 in 4 active managers have outperformed market benchmarks over the past 10 years and only about 4 percent of large-cap growth fund pros did so in 2014, according to a sweeping new study released Thursday by S&P Dow Jones Indices.
At a time when the broader market has been on a tear, posting double-digit percentage increases over each of the last three years and with the S&P 500 up about 210 percent from its lows six years ago, stock pickers have lagged well behind.
More than 86 percent of large-cap managers overall lagged basic indexes in 2014, and more than 82 percent fell into the same boat over the past three-, five- and 10-year periods...
Following indexes, which is at the core of passive management, has surged in popularity over the past several years, with the exchange-traded fund industry swelling to more than $2 trillion in total assets.
ETFs trade like stocks but almost all of them follow indexes like the S&P 500 and Nasdaq, or sectors within them...
Indeed, ETFs come with much lower fees than actively managed mutual funds and carry tax advantages while being easier to trade.
With the continued level of underperformance and the other advantages index-based investing has provided, it's a tough hill to climb for active managers.
----
Link: http://www.cnbc.com/id/102500216
Monday, March 9, 2015
Hedge Funds: Where the Smart Money Invests?
From the sketch guy at the NYTimes.com:
1. Hedge fund performance has been terrible.
2. Hedge fund expenses are insane.
3. People continue to invest in hedge funds anyway.
Investors sank more than $88 billion into hedge funds in 2014.
Why do people keep doing this?
One assumption might be that they don’t know that hedge funds are just really expensive, underperforming mutual funds for rich people...
Maybe hedge funds give people something to talk about at parties...
The attraction could also be in the pure entertainment value...
Or the reason could be more subtle.
Americans have a hard time admitting they’re average.
Hedge funds have gone out of their way to push the idea that they are better than average.
For wealthier people, the desire to claim that golden ticket, to be better than average, may be worth every penny of the insane fees they pay...
----
Link: http://www.nytimes.com/2015/03/09/your-money/a-mystery-in-hedge-fund-investing.html
1. Hedge fund performance has been terrible.
2. Hedge fund expenses are insane.
3. People continue to invest in hedge funds anyway.
Investors sank more than $88 billion into hedge funds in 2014.
Why do people keep doing this?
One assumption might be that they don’t know that hedge funds are just really expensive, underperforming mutual funds for rich people...
Maybe hedge funds give people something to talk about at parties...
The attraction could also be in the pure entertainment value...
Or the reason could be more subtle.
Americans have a hard time admitting they’re average.
Hedge funds have gone out of their way to push the idea that they are better than average.
For wealthier people, the desire to claim that golden ticket, to be better than average, may be worth every penny of the insane fees they pay...
----
Link: http://www.nytimes.com/2015/03/09/your-money/a-mystery-in-hedge-fund-investing.html
Smart Money Leaving Bill Gross?
From Morningstar.com:
Investors pulled money from Bill Gross's new mutual fund in February for the first time since the star bond investor moved to his new home at Janus Capital Group Inc.
The Janus Global Unconstrained Bond fund saw a net $18.5 million in withdrawals from investors last month, and its assets under management sank to $1.45 billion from about $1.5 billion at the end of January...
The outflows in Mr. Gross's fund reflect a reversal from his first three months at the helm, when Mr. Gross saw his fund jump from about $12 million in assets when he took over to more than $1 billion in assets under management.
However, Janus said in January that Mr. Gross had invested "more than $700 million" into the fund himself...
Analysts and industry observers have been watching to see how much of the more than $190 billion that left Pimco in the last four months of 2014 would end up with Mr. Gross.
----
Link: http://news.morningstar.com/all/dow-jones/us-markets/201503097337/bill-grosss-fund-at-janus-logs-first-monthly-outflow.aspx
Investors pulled money from Bill Gross's new mutual fund in February for the first time since the star bond investor moved to his new home at Janus Capital Group Inc.
The Janus Global Unconstrained Bond fund saw a net $18.5 million in withdrawals from investors last month, and its assets under management sank to $1.45 billion from about $1.5 billion at the end of January...
The outflows in Mr. Gross's fund reflect a reversal from his first three months at the helm, when Mr. Gross saw his fund jump from about $12 million in assets when he took over to more than $1 billion in assets under management.
However, Janus said in January that Mr. Gross had invested "more than $700 million" into the fund himself...
Analysts and industry observers have been watching to see how much of the more than $190 billion that left Pimco in the last four months of 2014 would end up with Mr. Gross.
----
Link: http://news.morningstar.com/all/dow-jones/us-markets/201503097337/bill-grosss-fund-at-janus-logs-first-monthly-outflow.aspx
Tuesday, March 3, 2015
PIMCO: another $8.6 billion of outflows in February from the Pimco Total Return Fund
From Reuters.com:
Pimco's top investment officer said on Tuesday that "late decision makers" are largely behind a rush of withdrawals from its flagship bond fund some five months after the departure of longtime manager Bill Gross, but the outflows should taper off before long...
...the firm reported another $8.6 billion of outflows in February from the Pimco Total Return Fund, bringing withdrawals to $76.6 billion since Gross moved from Pimco to Janus Capital Group Inc...
The $124.7 billion fund is now fraction of its size nearly two years ago, when under Gross it ranked as the world's largest mutual fund, with $292.9 billion in assets in April 2013...
It is not just the total return fund that has suffered: Investors pulled $150 billion from Pimco's U.S. open-end mutual funds last year, according to Morningstar data...
Pacific Investment Management Co, a unit of Allianz SE, had $1.68 trillion in assets under management as of Dec. 31.
----
Link: http://www.reuters.com/article/2015/03/03/us-investing-pimco-ivascyn-idUSKBN0LZ2JK20150303
Pimco's top investment officer said on Tuesday that "late decision makers" are largely behind a rush of withdrawals from its flagship bond fund some five months after the departure of longtime manager Bill Gross, but the outflows should taper off before long...
...the firm reported another $8.6 billion of outflows in February from the Pimco Total Return Fund, bringing withdrawals to $76.6 billion since Gross moved from Pimco to Janus Capital Group Inc...
The $124.7 billion fund is now fraction of its size nearly two years ago, when under Gross it ranked as the world's largest mutual fund, with $292.9 billion in assets in April 2013...
It is not just the total return fund that has suffered: Investors pulled $150 billion from Pimco's U.S. open-end mutual funds last year, according to Morningstar data...
Pacific Investment Management Co, a unit of Allianz SE, had $1.68 trillion in assets under management as of Dec. 31.
----
Link: http://www.reuters.com/article/2015/03/03/us-investing-pimco-ivascyn-idUSKBN0LZ2JK20150303
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