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WOWS full issue, February 10, 2017
An Alternative Way To View Or Print The Entire Current Issue As A Single Document
2/10/17 4:00 AM
Attention Paid-Up Subscribers: To read or print the entire current issue as a single document, use the "easyprint" feature in the "Nav bar" to the right to open it, or any of WOWS' individual features, as an Adobe PDF file, and then print it. Alternatively, you can click "more" at the bottom of this paragraph and then click the red Adobe icon that appears. Your second click will download the full issue .pdf file of WOWS' latest issue to your computer, a process that -- depending on the file size and your connection speed -- might take more than the blink of an eye. Then, depending on preferences you've set on your device, it will either open automatically or show up in your downloads folder, waiting to be opened. [More]
FPA Capital Fund's Value Sleuths
Dennis Bryan & Arik Ahitov Stick With Solid But Unloved Companies
2/10/17 6:00 AM
As co-portfolio managers of First Pacific Advisors’ storied FPA Capital Fund, Dennis Bryan and Arik Ahitov have some mighty big shoes to fill. Robert Rodriguez’s. 

Bob, who built the fund from humble beginnings in 1984 into a deep value mutal fund powerhouse before stepping back into an advisory role in 2010, has just officially retired, becoming FPA’s first “partner emeritus.” 

Dennis, who has an MBA from the University of Southern California, was writing spreadsheets as a financial analyst at Kemper Securities Group before joining Bob at the Capital Fund. Arik picked up his MBA?at UCLA and worked as portfolio manager of Shamrock Capital Advisors’ Absolute Value Fund before signing on with FPA in 2010. [More]
Malls Are Vulnerable
Amazon Effect Puts Developers, REITs, Creditors, Cities At Risk
2/10/17 8:00 AM
By A Gary Shilling
E-commerce is eating the lunch, breakfast and dinner of bricks-and-mortar retailers (Chart 1). In the five-day kick-off to last year’s Christmas shopping season from Thanksgiving Day through Cyber Monday, e-commerce sales jumped 15% from a year earlier. On Black Friday, the day after Thanksgiving, they leaped 22% and of that, orders from mobile devices climbed 33%. [More]
Evolution Of Competition
Cooperation Is Out; Zero Sum Is In; Resolve Not To Be The Sucker
2/10/17 7:00 AM
By Ben Hunt
Over the past few weeks, I’ve had a fight with my wife, spoiling an otherwise wonderful night out, and email spats with two of my best and oldest friends. It was about Trump, of course. Not directly, but always on some silly tangential issue like “Should Sally Yates have resigned instead of countermanded an executive order on the basis of her personal beliefs?” or, better yet, “Is Lady Gaga authentic?”

In each case, I didn’t recognize that we weren’t really talking about what I thought we were talking about, and by the time I did recognize the real issues, I was already too far down the path of combative Ben (think Bruce Banner but without the green skin) to care. [More]
Shades Of 1937
Slowing Growth Of Thin-Air Credit Endangers Investor Hopes
2/10/17 6:00 AM
By Paul Kasriel
As a result of some Fed actions taken in 1936 and 1937, the U.S. economy, after experiencing a robust economic recovery starting in early 1934, slipped back into a recession midyear 1937, which lasted through midyear 1938. Based on the recent slowdown in thin-air credit growth,  I believe that a significant slowdown in the growth of nominal and real U.S. [More]
Monsoons And Droughts
HFT Provides Some Liquidity, Except When It’s Needed Most
2/10/17 5:00 AM
By Joe Saluzzi
The folks over at Modern Markets (the HFT lobby) are always quick to point out any academic studies that might support HFT claims that they add liquidity and shrink spreads.  But for some reason we have yet to hear them squawk about a new study produced by the French regulator Autorité des Marchés Financiers (AMF). Maybe it’s because the results of the study do not go along with the Modern Markets propaganda. [More]
Answer These Questions
To Get A Feel For Financial Crisis’ Complex, Interrelated Causes
2/10/17 4:00 AM
By Barry Ritholtz
Sometimes, when you lose a debate, you have to just let it go. That seems to be a problem for those who are unwilling to accept the complex realities of what actually caused the financial crisis.

I have been saying for a long time that many elements contributed to the global financial meltdown. [More]
Volatility Comeback?
Taking Industrials, Materials Back Down To Market Weights
2/10/17 7:01 AM
By Andrew Addison
Make the stock market volatile again!  After an 8-year bull market, valuations are no longer inexpensive. [More]

Get Ready To Ruummble
Investors Aren’t Watching PBS Anymore...
2/10/17 6:01 AM
By Paul C Westhead
Growing up as a teenager in the 1980s, I was a fan of the over-the-top antics of professional wrestling, which featured characters like Hulk Hogan, “Rowdy” Roddy Piper, and Jesse “the Body” Ventura.

Invariably, the pre-match festivities and antics would drag on, but you always knew things were getting close to starting when Mr. [More]

Two Big Myths Debunked
Global Trade Amps Global Growth; More Immigrants Goose Growth
2/10/17 5:01 AM
By Dave Rosenberg
Oops. Or do we mean “alternative facts”?  

Here is the reality for the xenophobe nationalists out there. [More]

2 Charts, 1 Message
All Is Not Well In Markets
2/10/17 4:01 AM
By Tracy Alloway and Isobel Finkel
Price of plunge protection
One theory as to why the VIX has been muted recently is that stocks are increasingly moving in different directions under President Trump, suppressing realized correlation and with it, index volatility. Those looking for evidence of market nervousness must look at the CBOE Skew Index, which measures the price of buying protection against more dramatic moves in the S&P 500. [More]

Oracle Of Boston Writes
The Baupost Group’s January 2017 Letter To Investors
2/10/17 8:00 AM
By Seth Klarman
In The Baupost Group 2016 Year-End Letter to investors, Seth Klarman writes:
2016 was decidedly a tale of “Before” and “After.” The first 44 weeks of 2016 — “Before” the presidential election — amounted to a continuation of the prevailing trends: tepid economic growth, absurdly low interest rates, Washington in gridlock, and a long-in-the-tooth bull market characterized by rich valuations and relatively low volatility. [More]

SNAP Isn’t Into Sharing
Large Pension Funds Object To Offer With Zero Voting Rights
2/10/17 7:00 AM
By Kenneth A Bertsch
In a letter to Snap Inc. [More]

Constitutional Divide
Tech Industry’s Filing Against Trump’s Travel Ban
2/10/17 6:00 AM
Nearly 100 technology companies said that President Trump’s temporary ban on all visitors from seven predominantly Muslim countries would violate both immigration law and the United States Constitution. [More]
HFTs Eat Liquidity
French Securities Regulator’s Study of HFTs and Market Stress
2/10/17 5:00 AM
By Autorité des Marchés Financiers
This study presents a descriptive summary of the trading behaviour of High Frequency Traders and liquidity providers on the most liquid stocks on Euronext Paris during a 9 months’ time period from November 2015 to August 2016. [More]

Full Employment:
Are We There Yet? Not Even Close!
2/10/17 4:00 AM
By Flavia Dantas and L Randall Wray
Almost a decade after the Great Recession began, and with unemployment now at 4.7 percent, many policymakers and commentators are beginning to lean toward the view that we have finally reached “full employment”; that any further significant improvement in the unemployment rate would lead to unacceptable increases in inflation. [More]

Acute Observations, week ending February 10, 2017
Perceptive Commentary from February 1-10, 2017
2/10/17 8:00 AM
A Throwback Acute Observation, c. 1996
Louise Yamada
We now have totally new emerging technologies transforming the world — perhaps in ways totally different than in previous cycles — because today’s new technologies are not as capital-intensive, or labor-intensive, or heavily industrial as ones we have known previously. It’s also a wave that is unemploying people in traditional industries, as they’re being supplanted by the new. [More]

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