Salient to Investors: The wealth effect from rising house prices may no longer be as effective in spurring the US economy as homeowners increasingly pay down mortgage principal and shorten maturities. Freddie Mac said cash-in refinancings outnumbered cash-outs by more than 2-to-1 in Q4 2012. Amir Sufi at the University of Chicago said the
READ MORE... →Salient to Investors: Fareed Zakaria said: A recent Pew survey found that only 51 percent of Americans think it’s essential to act on immigration reform this year, versus 70 percent who demand a deficit reduction deal this year, despite the wealth of data that shows that immigration reform will lead
READ MORE... →Salient to Investors: Mohamed El-Erian at Pimco said the inherent momentum of the US economy is still weak so the Fed may increase its efforts to support the economy following a meeting tomorrow by changing the narrative away from the Fed taking its foot off the accelerator. Kei Katayama at Daiwa SB Investments is below
READ MORE... →Salient to Investors: Jeremy Grantham at GMO says: The global economy is reckless in its use of all resources and natural systems and is showing many of the indicators of potential failure that brought down so many civilizations. Civilizations have an average lifespan of around 250 years. Failing civilizations suffered
READ MORE... →Salient to Investors: Tech, energy and financial stocks are the most inexpensive industries in the S&P 500 with multiples of less than 14 times earnings. US tech stocks, the second-best industry of the past decade, are at 13 times projected earnings, the lowest level versus the S&P 500 in at least 7 years. Analysts
READ MORE... →Salient to Investors: Fareed Zakaria said: The World Bank says that in 1981 nearly half the world’s citizens were poor, while today, less than a fifth lives in poverty – from 2 billion to 1.2 billion people. Chinese poor declined by nearly 680 million people in the last three decades,
READ MORE... →Salient to Investors: Carmen Reinhart and Kenneth Rogoff at Harvard acknowledged on April 17 that they had inadvertently left some data out of their calculations in “Growth in a Time of Debt”, but the error did not change their basic findings that countries with public debt in excess of 90 percent of GDP suffered measurably
READ MORE... →Salient to Investors: Ben Inker writes: Capitalism should cause the return on capital to be in line with the cost of capital, and assets with similar risks should offer similar long-term returns. Equities should trade at replacement cost, and the long-term return to equities should be approximately the same as
READ MORE... →Salient to Investors: Jeremy Grantham writes: The world, in its reckless use of resources and natural systems, shows many of the indicators of potential failure that brought down many prior civilizations. However, we have two saving graces that may save us – declining fertility rates and progress in alternative energy.
READ MORE... →Salient to Investors: Brett Arends writes: It is not clear if high debt levels lead to slower growth, or result from slower growth, or that the two have only a loose connection, but we cannot borrow and print money indefinitely with no consequences whatsoever. Rogoff and Reinhart got their math
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