Readings: Richard Russell, Taleb @ FT, Yuan valuation
- MarketWatch: ‘The bull never left’
Believe it or not, those announcements in effect were made earlier this week by Richard Russell, editor of the Dow Theory Letters newsletter. He says he now believes the stock market has been in a primary bull market since the early 1980s.
. . . “the major stock averages have been building huge bases,” and therefore appear ready to move much higher — to new all-time highs, in fact. The second factor is that, at the market’s low earlier this year, just as was the case at the October 2002 bottom, stocks were not even close to being as cheap as they were at the major bear market bottoms of the past.
Interesting thought. That means there’s another up-move due soon, followed by a much bigger down-move to take stocks down to severely undervalued levels.
- Financial Times: Lunch with the FT: Nassim Nicholas Taleb (a bit dated)
The real villains are those whose refusal to admit the limits of their knowledge can cause serious damage. These include economists “predicting 30 years of social security deficits when we don’t know what we are going to have for lunch tomorrow” and the doctors who thought they knew more than they did and killed their patients. “Until the 20th century, the risk of dying was increased by going to a doctor, particularly in a hospital.”
Taleb is conducting experiments to test his theory that we can only cope with so much scepticism and that people who are sceptical about religion are gullible in other ways. “Most people are sceptical about the wrong things and gullible about the wrong things.” He admits his extreme scepticism can lead to extreme conservatism. “I believe it is dangerous to mess with complex systems and traditional things, such as religion or the environment.”
Love him or hate him, Taleb & his ideas always manage to evoke a strong response!
Responding to rising commodities prices — especially the intolerable surge in the cost of imported food — the Monetary Authority of Singapore last week signaled its preference for a stronger home currency.
Can China use a stronger currency to tame the intolerable 23 percent pace at which its food prices rose in February from a year earlier? It can, but only if the appreciation in the yuan takes the form of a large, one-off revaluation.
For the moment, though, it looks like agricultural commodity prices will remain uncomfortably elevated unless there’s a large deceleration in biofuel demand or an end to the growing hunger for protein in China and India.
Rupee:Dollar rate going to 35?!
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