My morning reads:

• Stock Markets That Flummox Masses Do No One Any Good (Bloomberg)
• Some Analysts Doubt Dire Predictions on Tax Increase Fallout (NYT) see also Absolutely everything you could possibly need to know about the Fiscal Cliff in one FAQ (Wonkblog)
• No Easy Money in Munis (WSJ)
• The Infamous Chart Of Corporate Profits Vs. Total Wages (Business Insider) see also Record Corporate Profits (Economix)
• The Insourcing Boom (The Atlantic)
• Is it Europe’s turn to laugh at the United States? (Wonkblog)
• Gamblers Take Note: The Odds in a Coin Flip Aren’t Quite 50/50 (Smithsonian Magazine) see also Cost of Pennies (What If)
• As Companies Seek Tax Deals, Governments Pay High Price (NYT)
• The Surface: I Came, I Saw, I Left (Jeff Matthews Is Not Making This Up) see also Miscellaneous Thoughts and Observations on iTunes 11 (Daring Fireball)
• Michael Jackson’s ‘Thriller’ at 30: How One Album Changed the World (Billboard)

What are you reading?

Special Dividends Through Year End

Source: Bespoke Investment Group

Category: Financial Press


12 Responses to “10 Monday AM Reads”

  1. 4whatitsworth says:


    Let’s hope this is just Obama indigestion and the fog of indecision. We will know in the next few months..

    BR, any thoughts or data regarding housing expansion as manufacturing shrinks?

  2. rd says:

    Re: Profits vs Wages

    I have found it interesting over the past decade that the US government policy leaders and Corporate America keep looking to the consumer to spend more and the same unwashed masses to purchase more equities to provide them with more revenue, fees, and profits. Where do they think the consumers’ money is going to come from?

  3. rd says:

    Re: Profits vs Wages

    I have found it interesting over the past decade that the US government policy leaders and Corporate America keep looking to the consumer to spend more and the same unwashed masses to purchase more equities and houses to provide them with more revenue, fees, and profits. Where do they think the consumers’ money is going to come from?

  4. 4whatitsworth says:

    @RD, money is simply a proxy for work and risk taking (AKA investments). One could make the case that if the work is good and the organizational profit is excessively high that there will be new organizations formed that will better compensate for the good work. My question at the moment (viewing the graph) is why isn’t that happening?

  5. ConscienceofaConservative says:

    Wall Street finds a foreign detour around U.S. derivative rules

  6. VennData says:

    Fiscal cliff talks in standoff.

    Well then, it’s time for the GOP to offer a vote on middle class 98% tax cut staying in place. Right folks?

    Wait a minute, you’re NOT going to vote on the GOP? Oh… my…

    I see a permanent shift to MSNBC after this one. Boehner, McConnell, enjoy retirement.

  7. Jojo says:

    December 01, 2012

    I grew up in a car family. Not car enthusiasts; car makers. My grandfather worked for General Motors in Detroit on the assembly line beginning in the 1940s. My mother was a middle manager at Ford’s Chicago assembly plant in the ’70s. I worked at the same plant during summers in the ’90s. Today, one of my cousins works for Chrysler and another works for an auto supplier.

    Like millions of other African-American families, my family went from being small-town subsistence farmers to being middle- and upper-class workers thanks to the U.S. auto industry. For my family, “buying American” has been a manifestation of not only patriotism but racial pride.





  8. “Prohibition is an awful flop. We like it.
    It’s left a trail of graft and slime,
    It don’t prohibit worth a dime,
    It’s filled our land with vice and crime.
    Nevertheless, we’re for it.”
    – Franklin P. Adams

    to either his own devices or his own thoughts.”
    – H. L. Mencken

    and, yon’ QOTD..


  9. VennData says:

    House GOP Makes Budget Counteroffer

    “…The proposal represents an effort to strike a middle ground after the White House last week infuriated Republicans…”

    And these guys know a thing are too about getting infuriated.

  10. VennData says:

    Do arbitrage possibilites in in prediction markets invalidate their assured accuracy?

    Suppose CappedEx, a futures exchange that limits each user to betting $500, is publishing 4:1 odds of an Obama victory. If you bet $40 that Obama will win and he wins, you get paid $10 (from other users on the exchange), but if he loses, you pay out $40. Meanwhile FreedomEx, an exchange that has no betting limit for any user, is publishing 6:1 odds for Obama winning. Bet $60 on Obama, and you get $10 if he wins, but pay $60 if he loses. On both markets, of course you can bet in the other direction as well.

    What do you conclude from this? That the un-capped FreedomEx probably has more accurate odds, and that as James Surowiecki (author of The Wisdom of Crowds) said, betting limits “make [the markets] less accurate” and “real money is what makes it work”? Or that CappedEx, with its safeguards against manipulation, is more reliable, and FreedomEx is being manipulated by someone trying to change the reported odds of their favored candidate winning? Or that there is simply some random fluctuation in the odds as reported by various markets, so they’ll naturally diverge at times?

    The correct answer is: you should stop wasting time “concluding” things, and get online as soon as possible and make bets in both markets, because if they’re allowing bets to be placed at different odds, you can guarantee yourself a profit.

    Make a $50 bet in CappedEx on Obama to win (4:1 odds), and a $10 bet in FreedomEx on Romney to win (1:6 odds). If Obama wins, you win $12.50 in the CappedEx market and lose your $10 in FreedomEx, for a $2.50 profit. If Romney wins, you lose $50 in the CappedEx market but win $60 in FreedomEx, for a $10 profit. With a little algebra, you can show that any time the two markets allow you to place bets at different odds ratios, you can make a guaranteed profit by picking a ratio somewhere in the middle (in this case, the two ratios were 1:4 and 1:6, so we picked 1:5) and making separate bets in the two markets in opposite directions, for amounts in that ratio. (A commenter on the Marginal Revolution blog describes exactly how he made an almost risk-free profit through this kind of “pure arbitrage play”. He said it was “almost” risk free because of other factors like currency conversion fluctuations.)

    Now, any time a good is trading for a lower price in market A than it is in market B, and the costs of shifting the good between the two markets is negligible, traders will start to buy the good in market A and re-sell it for a profit in market B (the traditional definition of “arbitrage”). This increases demand in market A (driving the price up) and increases supply in market B (driving the price down) until the price difference disappears. In the same way, any time two prediction markets have different “market odds” for the same event, as arbitrage players lock in guaranteed profits by placing opposite bets in the two markets, the market odds in the two markets will converge toward each other until the gap is negligible. This is true even if one of the markets has a cap on what people can invest or how much they can stake on any particular outcome.

    For Intrade, there couldn’t be a worse time for someone to be pointing this out, but it seems logically inescapable: As long as there is a prediction market anywhere in the world that allows unlimited wagering on a particular outcome, all other prediction markets (whether they are capped or not) can be manipulated indirectly, by playing a large wager in the non-capped market. I was wrong to say that you would have to “enlist your friends” to place bets in the capped market, building a large coalition of market-manipulators (and hoping that none of them would rat you out for using them to circumvent wager-limiting rules). By placing a large wager in the non-capped market, and shifting the market odds there so that they’re different from the odds in the capped market, you can indirectly “enlist” all the users in the capped market, to place arbitrage bets and make a guaranteed profit. When this happens, the odds in both the capped market and the non-capped market will shift, as the gap between them narrows — which means you have manipulated the market odds in the capped market, without ever going near it yourself.

  11. Iamthe50percent says:

    Re Toyota Avalon. No, I won’t say made in Kentucky by scabs. I should, but I won’t. My Impala has an engine made in Mexico and a transmission made in Canada. The rest of it is US. Isn’t that how NAFTA was supposed to work?

    OK, I will say the Avalon is made in the CSA by religious zealots.

  12. neddyj says:

    lots of media coverage on the ‘special dividend’ plays out there…this would lead the common investor to believe that they should buy stock in a company that is preparing to pay a special dividend and that this would be a good investment. Since there are seemingly fewer stock splits happening out there (just my impression, don’t have a data point to share) – a special dividend seems to be the new stock split.

    It may be a good investment based on the simple fact that companies who are able to pay special dividends are in decent financial shape – but it is NOT good to buy it for the dividend itself. Particularly in a taxable account….since you’re taking after tax money, purchasing a stock before it trades ‘ex’ dividend so that you are entitled to said dividend, and then receiving – as a taxable dividend – said dividend, which when the stock removes the value of the dividend when it trades ‘ex’ – means that you just get your own money back, taxed. It seems odd to me that the special dividend gets so much fanfare.

    buy it after it goes ex-dividend, and i’m on board.

    is there something i’m missing here? doesn’t this really just help those who can’t easily sell their positions (insiders) extract some cash from their investment?