Jim Grant on manipulated markets

Key quotes: “The Great Sedation” and “Low interest rates flatter projected future cash flows.”

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Quote of the day

“Your honor, everyone in the industry was doing the same thing” is an actual defense, even if you bankrupted your client.

Brett Arends

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Shiller: This isn’t news; valuations have been high

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Weekend Reads

Sunday

Gretchen Morgenson on bad disclosure by bank loan funds

Bloomberg piece on Brad Katsuyama

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Henry Blodget says market-timing is hard, but stocks are expensive, so you should prepare for 7-10 years of subpar returns.

Brett Arends also says stocks are expensive, and a more significant drop (even Dow 5000) is not out of the question.

Neil Irwin says it’s about time for the selloff in stocks. And if you can’t handle a 6% decline in a week, you don’t belong in the stock market.

ZeroHedge asks (and answers) whether the oil price rout results from oversupply or lack of demand.

Jason Zweig on handling market volatility in stride.

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Most recent Marketwatch piece: Don’t count on Buffett-like market returns

Click on the pic below to read the piece.

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Should university endowments spend 8% per year?

This is an interesting piece on university endowments and the fees they pay to private equity managers — often more than they spend on students. But the proposal to spend 8% seems dangerous to me, given that we’re in such a low return environment.

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Quotes of the day

These people who wander around saying that the economy is picking up steam are living in this weird kind of academic, inflation-adjusted world because nominal GDP has not been gaining traction.”

The people saying that interest rates won’t matter – maybe they’re right, I hope they’re right. But hope isn’t the basis for a risk-management strategy.”

— Jeffrey Gundlach, Interview with Barron’s

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Any bullets left in the gun?

Good WSJ piece on how the government might (or might not) respond to another crisis or bout of deflation.

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Monday Reads

The rent is too high, says this article, and going higher for midtier apartments, says this one.

Gretchen Morgenson on market jitters.

Josh Brown on substituting stocks (or MLPs) for bonds.

S&P 500 revenues are down year-over-year for the second straight quarter. Earnings are flat.

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John Authers interviews Rob Arnott on Fundamental Indexing

This is from June 2014, but worth watching.

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