Quote of the day

“Models have their place in proper risk management processes but solely blaming them when trouble strikes occurs is, at best, ignorance.”  (The Psy-Fi Blog)

Chart of the day

Long term real growth in US GDP from 1871.  (Visualizing Economics)

Markets

A Dow Theory buy signal awaits.  (The Reformed Broker)

Cyclicals remain elevated relative to the rest of the market.  (Crossing Wall Street)

How long can the S&P 500 ignore the rise in the VIX?  (FT Alphaville, Pragmatic Capitalism, Daily Options Report)

What happens after an oil golden cross?  (Bespoke also Money Game)

Record high sugar prices may be here to stay.  (The Source)

One measure of investor sentiment remains below Spring highs.  (Bespoke)

Making the valuation case for emerging markets.  (Money Game also Bespoke)

Are we out of ETF ideas?  (ETFdb)

Strategy and Tactics

Leigh Drogen, “One aspect of my strategy that I believe is very important, is that I manage risk more tightly as the trend progresses.”  (Leigh Drogen)

In the search for yield many investors have things backwards.  (A Dash of Insight)

The value of stock replacement strategies.  (SurlyTrader)

Will adding quantitative factors enhance socially responsible investment returns?  (WSJ)

Part three of an interview with Buffett-biographer Alice Schroeder.  (Simoleon Sense)

Mind and Markets

How a belief in mean reversion leads many traders astray.  (Phil Pearlman)

Co-fund managers that need to agree on each stock pick.  (WSJ)

After good (or bad) events, people forget how they thought they would feel.  (Farnam Street)

Wall Street

Eli Radke, “The biggest change from the past is that the major American exchanges are now corporations.  Their motivation is to profit, they do this by increasing volume. ”  (Stone Street Advisors)

CNBC ratings continue to fall and the death of retail trading.  (Street Insider via Behind the Headlines)

Have bank investors overreacted to the mortgage mess?  (Street Sweep)

Why Wall Street abandoned partnerships, a history.  (NetNet)

GM will be able to retain its loss carryforwards for tax purposes.  (WSJ also NYTimes, Atlantic Business, WashingtonPost)

Technology

Why tech investors should care about what is happening in the venture capital (and start-up) world.  (AR Screencast)

Is Netflix (NFLX) going to break the Internet?  (Slate)

Economics

ISM Non-manufacturing data supports further economic growth, but does it matter for the stock market?  (Calculated Risk, Atlantic Business also CXO Advisory Group)

ADP shows a rise in employment.  (Calculated Risk, Bloomberg)

Corporate downsizing is essentially over.  (Calafia Beach Pundit)

When are the issues in the PIIGs going to matter again?  (FT Alphaville also Free exchange)

“Hong Kong is an odd market because thanks to the USD peg it is basically a China fundamentals story powered by USD liquidity dynamics. ”  (Macro Man)

The Australian central bank has no simple task in trying to slow the housing bubble.  (Lex, The Source)

India is rapidly running out of unused arable land.  (Gregor Macdonald)

A QE2 Q&A.  (Real Time Economics)

Does the Fed really know what it is doing?  (Aleph Blog)

Bob Rubin:  not helpful on many counts.  (Felix Salmon, Big Picture)

Just because

Al Pacino is set to star in a new financial thriller ‘Arbitrage.’  (Variety)

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