Do not make any travel plans based on what you read here.
There's an interesting op-ed in the WSJ today: it looks like Congress is looking at "taxing" mutual funds, which could cost investors up to 25% of their gains over the lifetime of their investment. This has the hands of Pocahontas all over it. The editorial:
An open letter to all mutual-fund investors:
You may be subject to a new “tax,” and it has nothing to do with the presidential election cycle. Rather, the levy would be decided by a consortium of financial regulators who can designate your mutual fund or mutual-fund firm as posing a “systemic risk” to the financial system.
In the years since the global financial crisis, lawmakers and regulators have worked to stabilize the markets and economy. They identified risks to the financial system and took steps to ensure that Main Street would not be on the hook—again—for bad bets placed by Wall Street. Now regulators might place that burden squarely back on Main Street mutual-fund investors without any solid evidence that the funds or their managers could bring on another panic.
Under the 2010 Dodd-Frank Act, all banks with more than $50 billion in assets are designated as systemically important financial institutions (SIFIs). If one fails, all other SIFIs will be responsible for bailing it out. The U.S. Financial Stability Oversight Council and the global Financial Stability Board are considering measures to designate mutual funds as SIFIs, which would impose the same bailout obligations on their investors. If that happens, the 90 million Americans invested in mutual funds for retirement, education or a new home could be forced to once again bail out “too big to fail” Wall Street firms.More at the link.
The market was up nicely yesterday until Ms Yellen spoke, suggesting the market was over-valued. Then the computers took over and the market fell. Right now, the market is up nicely; let's hope Ms Yellen doesn't have another speech planned.
21st Century: It Will Be All About Energy And Water
Today's RBN Energy post on South Korea and Japan is very, very interesting. Both are considering increasing their use of coal to supply their energy needs. Going to coal is the option of last resort in today's "political correctness" climate. This speaks volumes about the insatiable need for energy worldwide, but especially in China, India, South Korea, and Japan.
Today's "Energy Cookie"
From the EIA:
In all cases considered, higher domestic crude oil production leads to a decline in crude oil imports, an increase in refinery runs, new investments to expand processing capacity, and higher crude oil and petroleum product exports.
However, the magnitude of the changes and the complexity of the new processing units added vary across the scenarios….While most of the ultimate uses of increased production are similar in the two cases developed using the higher domestic crude oil production path, there is one key difference. Under current policy, where U.S. crude oil exports are restricted, a significant amount of new refining capacity is built. However, if export policy restrictions were relaxed, almost 2.3 million barrels of crude oil could be exported by 2025. --- EIAI think that's pretty profound: "Higher domestic crude oil production leads to a decline in crude oil imports, an increase in refinery runs, new investments to expand processing capacity, and higher crude oil and petroleum product exports."
No Smiles On Shoppers' Faces
No Smiles On Investors' Faces
Warren Buffett noted that he saw no smiling faces on folks shopping at Whole Foods. I assume he would see no smiling faces on those who invested in Whole Foods recently. The shares are down 10% in recent trading despite record 2Q sales and EPS.