Lentils.

 Lentils are pretty quick and easy. 

After washing them, I put them in water with a few wedges of squash, slices of red bell pepper, a wedge of onion, and a few pieces of garlic. You can also put in celery. 

For spices, I put in salt and ground thyme.  You can also put in garlic powder and ground pepper. 

Squash is not fun to chop, so I usually chop up a whole squash, and freeze what I don’t use for the next batch. 

You bring it to a boil and then let it simmer for about half an hour, 

I serve it over rice with a veggie on the side. 

-B.H,

Apple Joins the Streaming Mélange

Profitable days are ahead for Hollywood types who can survive the #MeToo purge.

There Are Five Different Races in Streaming TV. Here’s Where Apple Fits In.

In the U.S., Silicon Valley and media titans are competing in categories from subscription entertainment to hardware to online-TV bundles

From 2019

WSJ: How the Permian Basin Became North America’s Hottest Oilfield

6/27/2019 11:06AM     

How the Permian Basin Became North America’s Hottest Oilfield

The U.S. has more than doubled its crude output over the last decade. Much of the growth is due to the Permian Basin of West Texas and New Mexico. WSJ traces the hotspot of North America’s crude oil boom, with a look at challenges that producers in the region face.

In the Elevator With Away CEO Steph Korey

In the Elevator With Away CEO Steph Korey

Is there a new business model and or an unsatisfied niche in luggage?  The founders of Away thought so.  Joanna Stern interviews CEO Steph Kore & Cofounder of Away WSJ 4/2/2019

Housing is the Business Cycle

Connor Dougherty, a New York Times economics journalist, does a good job analyzing the role housing has played in past recessions and why it may not be so crucial in the next.  He writes that housing declines presaged all but two of the last eleven recessions.  

Housing starts are one of our best leading indicators.  Even in one of his two exceptions (the recessions of 1953-54 and 2001), housing starts did a credible job of predicting one, 1953-54, leaving only only 2001 as a real anomaly.  Starts led the 1953-54 recession by nine months and fell 11.3% peak to trough.  In 2001 housing starts peaked a month after the economy and led by a month at the trough.  Peak to trough they fell a mere 6.6%.

The "Greenspan put" did not save Dot.Com investors or IT workers, but did provide a soft landing for housing in 2001.   An Austrian might argue that simply made the ultimate housing bust worse six years later. 

Dougherty bases his anlysis on contributions to GDP from the the work of Edward Leamer.  The latter's prescient 2007 Jackson Hole address, "Housing is the Business Cycle," which emphasizes the importance of housing in recessions. 

A Minsky Moment?

John Plender wrote in yesterday's Financial Times,  "Complacent investors face prospect of a Minsky moment."  

One observation is hard to quarrel with, to wit,  "It is historically atypical in that the central banks have been encouraging market participants through quantitative easing to take on more risk to help stave off a perceived deflationary threat. This was, in a sense, a perpetuation of the asymmetric policy pursued by the Federal Reserve before the crisis." we have seen the Greenspan Put on the stock market, the Bernanke Put on the housing market, and are we now seeing the Powell Put on the current bubbles?

Financial assets have grown rapidly relative to the stock of physical capital and certainly some bubbles have been inflated, most notably the growth of unicorns.

On the the hand, he claims hat that "Since the Trump tax changes (sic) are unlikely to have more than a modest impact on potential output, the economy, already close to full employment, could run into capacity constraints."  This is unduly pessimistic.  The Paul Ryan/ GOP/Trump tax cuts have dramatically reduced the cost of equity and, for well capitalized companies, for corporate investment in real capital.  Reducing marginal individual tax rates improves incentives to work.  The limit on state and local tax deductions reduces the tax incentive to drive prices up in the most expensive markets in the nation.

The supply side tax changes combined with the administration's deregulation initiatives has accelerated economic growth after the slowest economic recovery in a century.  Growth, the first real wage rate rises since the 1990s, and the improved incentives have increased labor force participation by attracting workers who have given up or face disincentives to taking paying employment.  Workers on disability have reentered the workforce.  Yes the unemployment rate is the lowest in forty-nine years, but the prime age employment ratio is still below its level at the beginning of the 2007-9 recession even though it is eleven years later.

Not only did the 2017 tax act create supply side incentives for the real economy (which Mr. Plender judges too weak), but it also reduced the tax incentive to over lever.  It limited corporations' ability to deduct interest expense and the lower corporate marginal corporate tax rates reduce debt's tax subsidy.  The debt binges by Netflix and Amazon among others is their last hurray.  

Citing Dr. Doom (Henry Kaufman), Plender worries that "the 10 largest financial institutions held about 10 per cent of US financial assets. Today the figure is about 80 per cent."  While that may reduce the liquidity of financial markets, but it also makes the banking sector more stable.  Canada with similar concentration for a century or more has not had a banking crisis since the 1840s.  A shift of capital raising from the financial markets to the commercial banks by itself would increase the potential for economic growth.  A key initiative by the Republicans with some bipartisan support is to reduce the regulatory burden of smaller banks that are not a systemic threat and shifting the emphasis from regulation to capital.

A Mellienial Job Interview

An enjoyable way to learn what not to do in a job interview or just laugh at the gap between generations.



Beware: Boomers in positions of authority have longer job longevity that millennials  would think just.

Sexy is scary I

Butterwood argues in the Economist that the U.S. stock market is overvalued.  At 32.8, the Cyclically adjusted price earnings ratio (CAPE) is certainly pricey.  Perhaps that is one reason investors have backed off some of their love affair with FAANG stocks.

Buttonwood cites research by Research Affiliates, a fund-management group.
You can hear the authors of the research ("Cape Fear: Why CAPE Naysayers Are Wrong"), Rob Arnott Vitali Kalesnik Jim Masturzo, explain their thesis in in this video.

James Grant And Nouriel Roubini on Macro Risk

James Grant and Nouriel Roubini square off at the Octavian Institute:

GE Cuts Its Dividend and Its Stock Price Drops 7 1/2 %

GE has been much in the news.  It announced that it would cut its dividend in half.  While that would seem to have been much anticipated, the stock nevertheless dropped seven and a half percent.  Thomas Gryta reports in the Wall Street Journal:

"General Electric Cuts Dividend by Half and Slashes Profit Goals
Industrial giant to revamp board as new CEO pursues restructuring"

New SEC rules will make GE look worse still according to Tomi Kilgore on Market Watch,
"GE’s stock suffers worst day in 8 1/2-years after transformation plan unveiled," Nov 13, 2017

What Happens to Tesla, If It Can Not Produce a Half Million Electric Cars Next Year?

In the Wall Street Journal (10/6/2017), we fin that "Tesla Needs to Pick Up the Pace of Production:" 7:00AM

Tesla's super automated car factory had to finish its cars by hand.  It produced 70% less than target. Elon Musk's electric-car company fell short of its third-quarter production goals. Is it too ambitious?

Is Amazon Vulnerable?

Amazon is the FENG Powerhouse. To avoid a regulatory crackdown, NYU's Scott Galloway says the e-commerce giant must take this defensive measure.

What is The Millennials' Biggest Investment Mistake?

Liz Ann Sonders of Charles Schwab speaks to Barrons about "The Biggest Mistake Millennial Investors Make." Gunshy from two grand bear markets, they fail to see that a market crash is not their only risk. Here's how to protect against other risks as well:

Sam Sdams Makes a Comeback

Barrons: "A New Twist for Boston Beer," 10/2/2017 8:11AM. After a 30-month slide, Boston Beer shares have staged a surprising turnaround.

Amazon Doesn't Want to Make Money

In Barrons: "What Amazon Will Destroy Next?"9/30/2017,NYU's Scott Galloway talks with Barron's about the future of Prime shopping, and why Netflix should be worried. Also, hope for Wal-Mart.  

There is a certain insanity about a firm that has a market capitalization of $460 billion and does its best not to make money.  What are investors valuing?

Who Is Pro-Business? Steve Bannon or the Financial-Media-Tech Complex?

Steve Bannon has left the White House. Various ways can characterize it. He left as planned, he was ousted, Chief of Staff John Kelly is trying to create some order. 

Courtney Weaver and Shawn Daonnan write in the Financial Times, "Bannon goes on offensive after White House ousting." What they write exemplifies the disconnect between the elite and the reality on the ground. I will focus on one particular statement:

They characterize Mr. Bannon as having "clashed with pro-business moderates within the administration." The Goldman Sachs troika and their allies are "pro-business" only in the sense of being for large multi-nationals, investment bankers and their allies in the financial-media-tech complex that prospers at the expense of small businesses and ordinary Americans. 

The financial-media-tech complex destroys jobs, while the little guys have always been the source of 80% of America's job growth. Even here in Kansas, Republican Brownback subsidizes Amazon while the Seattle Goliath drives community building small books stores out of business. 

Why has job growth slowed? Why have we had the slowest economic recovery in a hundred years? The "reforms" of the last eight years have stifled the little guys while protecting the big guys. Is it any surprise we have had increased income inequality and slower growth? The elites get fatter, while Everyman and the community he or she lives in dies.

How the iPhone Was Born: Inside Stories of Missteps and Triumphs

How the iPhone Was Born: WSJ 6/25/2017 9:00AM 

On the iPhone’s 10th birthday, former Apple executives Scott Forstall, Tony Fadell and Greg Christie recount the arduous process of turning Steve Jobs’s vision into one of the best-selling products ever made.

Tesla

How does Tesla wind up having a stock market valuation greater than Ford or GM?

MLPs

MLP is short for Master Limited Partnership.  These are taxed like a partnership, but are traded much as common stocks are traded.  There will be a general partner, typically a corporation, that assumes the general risk so the unit holders have a limited liability just as shareholders in a corporation.

Marcus McGregor and High Quality MLPs
 Marcus McGregor is a MLP Equity Strategist with Conning Asset Management tells Barron's senior editor Jack Hough investors should buy high-quality MLPs for income and stability because they have stronger balance sheets and less regulation. He says their average yields around 7% look sustainable.

Libby Toudouze Sees a Sideways for MLPs

Jack Hough interviews Portfolio Manager Libby Toudouze of Cushing Asset Management. She suggests three for growth and yield.




4/1/2017

The Wall Street Journal: Carlos Ghosn

Nissan CEO Carlos Ghosn spoke to Journal about "How I Work:" the true automobile of the future, the toughest period in his career, and whether he'd rather go on a road trip with Elon Musk or Mary Barra. The Wall Street Journal, 3/14/2017, Photo: Robert Libetti