News: 2013-11-20

By Edward Harrison On Nov 20, 2013

Markets

3 reasons Warren Buffett bought ExxonMobil

Short-seller Chanos says oil majors increasingly look like ‘value traps’

Grantham Guesses Stocks Work 20-30% Higher – Business Insider

GMO’s Inker Sees Stocks Losing Value in Next Seven Years – Businessweek

Junk Glistens Under ‘Bernankecare’ as Worst Stocks Win – Bloomberg

The Bubble in Bubbles – Bloomberg

The EM flow turnaround | FT Alphaville

Monetary Policy

Fed’s Yellen maintains dovish message in lawmaker letters | Reuters

Bernanke: Rates to Stay Low ‘Well After’ Jobless Rate Hits 6.5%

How Yellen Will Shape the Fed’s QE Exit Strategy | The Fiscal Times

About That Unemployment Threshold…. – Tim Duy’s Fed Watch

“The Fed’s cautious approach of thresholds reflects a very real concern about the message a change would send.”

Fed Effort to Boost Growth ‘Dangerous’ But Necessary – Real Time Economics – WSJ

Monetary Policy Will Never Be the Same | iMFdirect – The IMF Blog

Fictional Reserve Barking: On the (ir)relevance of the money multiplier model: The Fed view

Economics

Shiller vs. Fama vs. the Skeptics – NYTimes.com

“Martin Karplus, a Harvard University chemist, interjected, “ “What understanding of the stock market do you really have?”

Economics – “if one wants to call it a science” – seemed unable to explain the oscillations of the market, he said.

“I see these fluctuations and they make zero sense to me,” Professor Karplus declared. “Maybe they make sense to you.”

Professor Fama dismissed the question as unsophisticated, declaring its premise “factually incorrect.”

The hard scientists, more amused than chastened, turned to mocking the economists.”

Grantham: Emperor Fama Has No Clothes, Shiller Does

Economy

Roubini Global Economics – Sovereign Debt: Changing Attitudes Point to More Default and Restructuring, With Fewer Loose Ends

“The question of when and how a sovereign country should restructure its debt is back in the spotlight. Argentina’s protracted legal battle with holdout creditors and Greece’s sovereign debt restructuring (the world’s largest) have prompted proposals for a renewed effort to improve the way debt markets function both before and after a default or restructuring. Radical overhauls are being proposed, but RGE’s view remains that a new system is as unlikely as it is unnecessary.”

Households borrow while business stints: James Saft | Reuters

“Households are borrowing like it’s 2008 but businesses simply won’t play along.

That gap, between households which once again are taking on debt and businesses which can find nothing better to do with record profits than hand the money back to shareholders, is at the center of our economic malaise.”

Secular stagnation, bubbles & inequality | ToUChstone blog: A public policy blog from the TUC

North America

U.S. Satisfaction Back Up to 20%

Experiences of Uninsured With Exchanges Mostly Negative

Health Insurance Marketplace is Still About 40 Percent Incomplete | TIME.com

Baucus Proposes Minimum U.S. Tax on Foreign Earnings – Bloomberg

Consumer Price Index News Release

” The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.0 percent before seasonal adjustment.”

OECD Warns of U.S. Threat to Global Recovery – WSJ.com

OECD calls for Bank of Canada rate to more than double to 2.25% by end of 2015 | Financial Post

Mayor Rob Ford’s key staff jump ship amid swift transition at city hall | Toronto Star

ZCommunications | The Great Corporate Tax Shift: Part 1 by Jack Rasmus | ZSpace

“If corporate America can create and sell the idea that they pay more taxes than their offshore capitalist cousins, then they are half way home to getting their paid politicians to provide them still more corporate tax cuts—a proposal by the way that both Republicans and Obama are on record for, in their joint proposal to reduce the top corporate tax rate from 35% to 28% (Obama) or 25% (Republicans).”

Was Jack Welch right? Jobs numbers under fire