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Week of April 25, 2014

COMMENTARY

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Book Review: Flash Boys

By Elisabeth Dellinger, 04/24/2014
Michael Lewiss latest is proof good guys still exist on Wall Street,
but it doesnt quite capture the complex reality of high frequency
trading.

Targeting the Wrong Objective

04/23/2014
While the SEC mulls whether target-date funds require more
disclosure, there is a much bigger flaw in these investments.

Economies and Spaceships

04/22/2014
Some say the US has to achieve escape velocity for the
expansion and bull market to continue, but laws of astrophysics
dont apply to the economy (or stocks).

High Frequency Trade-Offs

04/21/2014
High frequency trading is back in the spotlight--how do its pros and
cons really weigh?

A Peek at 2014 Midterm Elections Potential Impact on

Your Portfolio
04/17/2014
Midterm elections are still roughly seven months away, but the
elections structure can hold clues to the potential outcome and
associated stock market impact.

HEADLINES

ECB Considers Possible Deflation Measures

By Christian Reiermann and Anne Seith, Der Spiegel, 04/24/2014

MarketMinder's View: In our view, this specter of deflation

looming over the eurozone is overwrought--meager bank lending,
caused by regulatory uncertainty, has been a primary culprit for the
disinflationary environment. But as the money supply increases and
the eurozones broadening recovery continues, the angst for
measures like quantitative easing or negative deposit rates will
likely decrease--a positive, since they may cause unnecessary
headwinds to bank lending. On the flipside, if the ECB decided to
pursue quantitative easing (QE), then deflation would become a
risk--QE caused the broad money supply to shrink in the US and
UK.

America Has Conquered Its Debt Crisis With Incredible

FI IN THE PRESS

How to Tell a Cassandra

From an Oracle
By Ken Fisher, Financial Times,
04/17/2014

ABOUT
MarketMinder provides a onestop source for critical and
unique financial information,
helping individuals stay current,
think ahead, and become better
investors. MarketMinder is
operated by the in-house
research staff of Fisher
Investments, a multi-billion
dollar independent money
management firm based in
Woodside, CA.

Speed
By Ambrose Evans-Pritchard, The Telegraph, 04/24/2014

MarketMinder's View: While this does present some oftoverlooked evidence of the USs recent economic growth, in our
view, it all underlies a faulty premise: that the US ever faced some
sort of debt crisis. Thats news to us--the US isnt and never was,
say, Greece (or Ireland, Portugal, Ukraine, Argentina, etc.). While
debt is up and deficits were high for a while, that isnt a debt crisis.
Debt crises happen when countries cant pay their debt. The USs
debt service burden relative to GDP and tax revenues at the height
of this supposed crisis was well below levels seen in the 1980s,
which were perfectly fine for the economy. Theyre even lower
today. For more, see our infographic, 4 Reasons US Debt is
Affordable.

US Leading Economic Index Rises 0.8% in March,

Slightly More Than Expected
By Staff, RTT News, 04/21/2014

MarketMinder's View: Driving the increase: a wide yield spread,

which over a century of economic theory and evidence suggest
supports higher growth. Slow-growth jitters persist, but it would be
exceedingly unusual for the economy to stall while LEI is high and
rising.

A Better Way to Run Rating Agencies

By Alan S. Blinder, The Wall Street Journal, 04/21/2014

MarketMinder's View: The aspects critiquing the ratings

agencies--particularly their issuer-pays business model--are spot
on, but in our view, a more beneficial, straightforward solution would
be to eliminate their status as nationally recognized statistical
ratings organizations. By gutting the law that gives the big-three
ratings agencies special status, the government would allow for
more competition and reduce the influence of agencies who base
their decisions on flawed opinions and backward-looking factors. If
equity markets can function fine without an official, quasigovernment sanctioned rating for every publicly traded stock, its
pretty likely fixed income markets can, too.