Here are a few interesting articles to glance at this weekend.
Bill Gross – Pimco
- The New Normal, previously believed to be bell-shaped and thin-tailed in its depiction of growth probability and financial market outcomes, appears to be morphing into a world of fat-tailed, almost bimodal outcomes.
- A new duality – credit and zero-bound interest rate risk – characterizes the financial markets of 2012, offering the fat left-tailed possibility of unforeseen policy delevering or the fat right-tailed possibility of central bank inflationary expansion.
- Until the outcome becomes clear, investors should consider ways to hedge their bets, including: maximizing durations, U.S. Treasury bonds that may potentially offer capital gains, long-term Treasury Inflation Protected Securities (TIPS), high quality corporates and senior bank debt, and select U.S. municipal bonds.
Mark Cuban – Blog Maverick
So we know why every CEO claims that lower tax rates are critical. But does it really impact how their companies are run ?
1. Competition has a far greater impact on operating a business than the tax rate
2. Companies hire because they need people to compete and keep customers happy, not because of lower tax rates
3. Companies invest their cash because its strategic
4. The exception that proves the rule
Bottomline is that while CEOs of public companies and financial engineers have good reasons to ask for lower taxes, I don’t see lower taxes creating jobs. I am not suggesting that increasing taxes is a good thing for companies. That is a topic for another day.
Jack Shafer – Reuters
The campaign has to start somewhere and, for reasons too arbitrary to explore here, it starts in Iowa. We can thank the Iowa caucus for breaking in the candidates, for seasoning inexperienced reporters, and for conditioning press veterans for the coming long haul. But the dirty little secret is that even though 1,500 members of the press corps are there right now covering the story, Iowa hardly matters. If you blinked, you didn’t really miss it.
Have a nice weekend,