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The Best of What They Said and I Read Week Ending 3/11/2018

Short excerpts from articles I found interesting.

I may not agree with the author and the following material is not intended as investment advice.

U.S. Global Investors – March 9, 2018 – Investor Alert – by Frank Holmes

  • “… Today marks the ninth anniversary of the stock bull market, the second longest since World War II following the spectacular run in the 1990s that finally met its match when the tech bubble burst in March 2000. The current expansion, which some consider the “most hated bull market in history,” has largely been fueled by extraordinarily accommodative monetary policy in the form of massive money printing and near-zero interest rates. It’s withstood a number of significant headwinds, including a relatively slow economic recovery, the collapse in the price of oil and other commodities, ongoing conflict in the Middle East and an especially nasty presidential campaign cycle. If it can avoid dropping more than 20 percent in the next six months, it will become the longest-lasting ever.”
  • “…The major market indices finished up this week. The Dow Jones Industrial Average gained 3.25 percent. The S&P 500 Stock Index rose 3.54 percent, while the Nasdaq Composite climbed 4.17 percent. The Russell 2000 small capitalization index gained 4.17 percent this week…The 10-year Treasury bond yield rose 3 basis points to 2.90 percent.”
  • “…The U.S. economy added 313,000 jobs in February, the most since mid-2016 and more than expected, Labor Department figures showed Friday. The jobless rate held steady at 4.1 percent for the fifth straight month…Americans’ sentiment rose last week to the second-highest level since 2001, as the benefits of increased take-home pay from tax cuts outweighed concerns about stock-market volatility, according to the weekly Bloomberg Consumer Comfort Index released Thursday.”

The Economist – March 3, 2018 – Who Is Behind the Wheel

  • "A new kind of vehicle is taking to the roads, and people are not sure what to make of it. Is it safe? How will it get along with other road users? Will it really shake up the way we travel? These questions are being asked today about autonomous vehicles (AVs). Exactly the same questions were posed when the first motor cars rumbled onto the roads. By granting drivers unprecedented freedom, automobiles changed the world. They also led to unforeseen harm, from strip malls and urban sprawl to road rage and climate change. Now AVs are poised to rewrite the rules of transport—and there is a danger that the same mistake will be made all over again.”
  • “…AVs will offer an extraordinarily subtle policy tool which can, in theory, be used to transform cities; but in the hands of authoritarian governments could also become a powerful means of social control.  For a start, AVs will record everything that happens in and around them…Fleet operators will know a great deal about their riders. In one infamous analysis of passenger data, Uber identified one-night stands. If, as seems likely, human-driven cars are gradually banned on safety grounds, passengers could lose the freedom to go anywhere they choose. The risk that not all robotaxis will serve all destinations could open the door to segregation and discrimination. In authoritarian countries, robotaxis could restrict people’s movements. If all this sounds implausible, recall that Robert Moses notoriously designed the Southern State Parkway, linking New York City to Long Island’s beaches, with low bridges to favour access by rich whites in cars, while discriminating against poor blacks in buses. And China’s “social credit” system, which awards points based on people’s behaviour, already restricts train travel for those who step out of line.”
  • “…A century ago cars were seized upon as a solution to the drawbacks of horses, which were clogging city streets with manure. The broader social consequences of cars, both good and bad, were entirely unforeseen. Today the danger is that AVs will be treated merely as a technological solution to the problems associated with cars and that, once again, the wider impacts will be overlooked.”

The Wall Street Journal – March 9, 2018 – Overheard:  The Market Alarm Bell That Wasn’t – by Spencer Jakab

  • “…JP Morgan Chase’s co-president Daniel Pinto predicted “a possible 40% correction” in stocks on Thursday according to a headline on Bloomberg News.  The story got plenty of attention, but the actual content of Mr. Pinto’s interview was pretty hum-drum. He said a 20% to 40% drop is possible in the next two to three years. Given the fact that a bear market with an average decline of 35% has occurred on average every three-and-a-half years since the 1920s, his prediction is that typical market behavior could repeat itself.”

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