Instead of a full-blow linkfest today we just wanted to note some posts from some of favorite bloggers that touch on themes we have mentioned in the past few months.  We will get back to our normally scheduled programming in due course.  In no particular order.

Heidi Moore writing a the Street Sweep blog notes how commodities have “jumped the shark” of late.  Gold aside, prices are down and assets under management have shrunk.  She writes:

The commodities bull run was a beautiful thing. But investors have to wonder whether the best trades have already been done.

See our earlier post on  what the popularity of commodities index investing hath wrought or the: “financialization of commodities.”

Jeffrey Carter at Points and Figures talks about the idea “long haul investing.”  Carter an experienced traders notes how high frequency traders have taken over much of the market landscape making it difficult for individuals to compete.  He writes:

You will lose money if you try to trade this market day to day. No one can anticipate the wild swings. Trading sounds sexy. Some traders do make a lot of money. But the days of the guys on trading floors earning a huge buck are over. …This is why you cannot trade and win anymore. Only way to win is position trade over periods of time.

Long haul investing isn’t dead. It’s actually the best strategy for attacking the current market conditions. Especially for the average investor.

In an earlier piece on the forthcoming golden age of stock picking we noted that investors need to “play an entirely different game” than the computers.  Thankfully individuals do have some advantages over institutions.

We have avoided the debate over the Kartik Athreya piece on the challenge of economics and the blogosphere.  However David Merkel at the Aleph Blog ties the discussion back to the nature of the econoblogosphere itself.  He asks what drives the relative success of economics/finance bloggers?

Tough question.  Being an engaging writer helps in the intermediate-run, and being a scandalmonger helps in the short-run.  In the long-run, all that matters is that the writer is right frequently, makes sense to readers, and has the humility to admit errors.  The economics and finance blogosphere is highly competitive, and talent tends to prevail over long periods of time.  Blogging is more of a meritocracy than peer-reviewed journals.  It more closely resembles “perfect competition.”

Part of what drives success in the econoblogosphere is specialization.  In an earlier post we noted how in an increasingly complex world specialized knowledge and the ability to blog about it an increasingly valuable skill.

Per usual, there are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts, and Abnormal Returns TV.

Every so often you see a handful of news items that adds up to an interesting anecdote.  Whether it becomes something bigger down the road remains to be seen.  In the past few weeks there has been a handful of fund launches in the energy master limited partnership (or MLP) space.

• The Clearbridge Energy MLP Fund (CEM), a closed-end fund, came to market and raised over $1.2 billion in assets.  (Marketwatch, WSJ)
• The Alerian MLP ETF filed to launch.  Note that this is the first MLP ETF. (IndexUniverse)
• The Market Vectors MLP ETF soon followed.  (IndexUniverse)
• SteelPath Fund Advisors launched a family of open-end mutual funds providing access to MLPs.
• There are also a handful of MLP ETNs already trading:  the JP Morgan Alerian MLP Index ETN (AMJ), the UBS E-Tracs Alerian MLP Infrastructure ETN (MLPI) and the Credit Suisse Cushing 30 MLP Index ETN (MLPN).

This boom shouldn’t be all surprising. The chart below compares the performance of the JP Morgan Alerian MLP Index ETN against the S&P 500, the S&P Energy SPDR and the iShares Dow Jones Select Dividend ETF.  As you can see the MLPs have handily outperformed over this time period.

Source:  StockCharts.com

The case for energy MLPs is pretty simple:  yield.  MLPs have it in abundance, especially compared to traditional areas of fixed income.  That yield does come with some tax complications, so the form in which one might hold MLPs (direct, ETN, ETF, CEF) does matter.

So what’s the bottom line?  The point is not that MLPs are necessarily poised for a fall.  (Although that is always a possibility.)  This cluster of activity does indicate that interest in MLPs is pretty high.  You don’t launch a $1+ billion closed-end fund without a healthy bit of froth.  What it means is that you should be more discerning in your approach to MLPs now that they have been discovered by the crowd.

The yield on the 10 year note drops below 3.0%.  (Crossing Wall Street, MarketBeat, SurlyTrader, Barron’s, Credit Writedowns)

The flight-to-safety continues apace.  (VIX and More)

Question of the day: Would you rather own the 10 year T-note yielding 3.0% or Johnson & Johnson (JNJ) with a dividend yield of 3.7%?  (AR Screencast)

A “dead cross” is coming for the stock market.  (DJ Market Talk)

A look at the stock market at the halfway mark for the year.  (Bespoke, ibid)

Low interest rates and growing earnings equal an undervalued market.  (Trader’s Narrative, Pragmatic Capitalism)

Would a “double dip” really kill the stock market?  (Trader’s Narrative also Zero Beta)

Another sign of rising risk aversion:  investment grade bonds are outperforming junk.  (Bespoke)

Why are junk bond defaults so low?  (Street Sweep)

The focus on short-term investment results, is short-sighted at best.  (TheStreet)

Hedge funds are having a tough time of it lately.  (Curious Capitalist)

Historically July is a below average month for the stock market.  (MarketSci Blog)

The underlying dynamics of momentum investing.  (Ivanhoff Capital)

How stability of the future curve affects commodity returns.  (CXO Advisory Group)

Tesla (TSLA) launches the first US car maker IPO in 54 years.  (Bloomberg)

With Tesla is the age of the electric car now here?  (green skeptic)

How a takeover of BP (BP) could happen.  (FT Alphaville)

How the BP oil spill may affect Gulf coast muni bonds.  (BondSquawk)

Sarbox lives.  Long live Sarbox.  (Fortune)

Another financial crisis is coming.  Does finreg help?  (DealBook)

Too big to fail was not solved by finreg.  (The Reformed Broker)

The inflation-mongerers were wrong.   (MarketBeat, Capital Spectator)

The Case-Shiller data show a rise in home prices.  (Calculated Risk, Credit Writedowns)

First-time home buyers have disappeared.  (Big Picture)

Low mortgage rates are not all they are cracked up to be.  (Felix Salmon)

Consumer confidence plunges.  (EconomPic Data)

The Fed funds market has given up on rate hikes any time soon.  (Pragmatic Capitalism)

Three lies about the US economy.  (ROI)

The ECB is doing it all wrong.  (The Money Game, ibid)

The European banking system is simply not working.  (Prof. Pinch)

Sometimes default is the best solution for a country, i.e. Greece.  (Minyanville, FT)

More talk about deflation and default.  (BondSquawk, Zero Hedge)

Who knew putting together China’s LEI was so difficult?  (EconomPic Data)

A strong Yuan benefits China’s neighbors.  (beyondbrics)

“The next financial boom seems likely to be centered on lending to emerging markets.” (Baseline Scenario)

Google (GOOG) is trying to stick around in China.  (WSJ, FT, Ultimi Barbarorum)

More fallout from the idea that only the elite of the economics profession can talk about economics.  (Will Wilkinson, Street Sweep, Economics Intelligence, Economist’s View, Rortybomb)

Paul Kedrosky talks with Mark Cuban.  (Kauffman)

Chess vs. poker:  which is the better investing analogue?  (The Masked Financier)

Would you fly an airline with no pilot on board?  (New Scientist)

If you want to eat fish, get used to aquaculture.  (Minyanville)

The Best Blogs of 2010.  (Time)

Per usual, there are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts, and Abnormal Returns TV.

What is the bond market telling us with such low yields?  (MarketBeat)

The trading range illustrated.  (VIX and More)

Mixed indicators, time frames and the week ahead.  (A Dash of Insight)

More corporate bonds are trading at distressed levels.  (Bloomberg, naked capitalism)

Feedback cycles and the parallels between trading and poker.  (TraderFeed)

The power of indices:  the case of Berkshire Hathaway (BRKB).  (Street Sweep also AR Screencast)

Honesty and openness are rare qualities for a fund manager.  (Deus Ex Macchiato)

Investor motives seems to affect investment returns.  (CXO Advisory Group)

What the Tesla IPO means for the green car biz.  (earth2tech, WSJ, CNBC)

Another casualty of the BP oil spill, its energy trading unit.  (NYTimes)

It usually takes multiple tries for a relief well to work.  (FT, ibid)

The Chicago Fed National Activity Index shows a rise in May.  (Calculated Risk, Carpe Diem, Big Picture)

Personal income is higher, but not far above recession lows.  (Calculated Risk, WSJ, Carpe Diem, Atlantic Business)

What are we to make of the divergence in two leading economic indicators?  (Minyanville)

Is the double-dip already here?  (The Source, Free exchange, Minyanville)

Are home prices too high or too low?  (Big Picture)

What percentage of defaults are “strategic” in nature?  (Developments)

The unemployment situation is great for employers, not so hot for those without specialized skills.  (Bloomberg)

From the G20 Mohamed El-Erian sees “..reinforces the concern than we are in for a future of muted growth, deleveraging, periodic debt dislocations in some countries, and higher protectionist pressures.  (FT Alphaville also Curious Capitalist)

Can Europeans really handle austerity?  (The Money Game)

Russia’s imperialist urges contrast with its need for economic reform.  (Economist, beyondbrics)

A Fed economist thinks economic bloggers generate more noise than signal.  (FT Alphaville, Zero Hedge, The Money Illusion, EconLog, Free exchange)

Financial literacy is shockingly bad.  (New Yorker)

The Lenny Dykstra story keeps getting worse.  (The Daily Beast, Daily Options Report)

On the power of emerging network states.   (A VC)

Why does everyone feel the need to become an all-purpose “trading guru“?  (SMB Training)

Specialization and the evolving econoblogosphere.  (Abnormal Returns)

Alex Perry, “The ambition, speed and scale of Chinese involvement in Africa is extraordinary.”  (Time also TRB, Infectious Greed)

Apple (AAPL) blows past estimates for iPhone 4.0 sales.  (Digital Daily also Minyanville, Financial Adviser, Planet Money)

Per usual, there are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts, and Abnormal Returns TV.

Blogs are languishing.  So says The Economist.

According to research traffic to popular blogging sites has flattened out while traffic to social media sites like Twitter and Facebook continues to surge.  That doesn’t mean people have stopped communicating.  It just means they are communicating in different ways.

That jibes with our experience in the blogosphere and on StockTwits.  Nearly every blogger we follow has a social media presence.  Even if it is limited to noting their own posts.  What social media does is amplify and extend discussions started on blogs.  Just as those blog posts are often a reaction to stories originated in the mainstream media.  Social media helps amplify those stories and ideas that people find of interest.

The Economist notes that blogs still thrive in areas that involve “special-interest publishing” like economics.  The point being that in certain areas longer-form communication is necessary.  Trading and investments being another.  Mike Bellafiore at SMB Trading notes that it takes him time to properly outline a trade scenario.*  He continues (and we quote at length):

Maybe the future is individual commentators and traders developing a small loyal band of followers. These individuals have their genius and stick to this. For example, they do not make long term market calls if this is not their thing. They are who they are and accept their limited genius. They do not step outside their expertise to bring in a wider audience of followers. There will be respected networks that still work to ensure these individual are legitimate as best they can. Perhaps the future financial media model will look like this: many more “gurus”, with much smaller audiences, making much less money, offering much more awesome content to followers who derive substantial value. Maybe that is the best and worst of what financial media can be.

As noted and in our own experience the best bloggers have developed their own distinctive voice.  They do this by carving out a niche for themselves that is a function of both heir own professional experiences and their interests.  The vast majority don’t find that fame and fortune in their blog, but they may develop their own devoted following.  The new world of social media is particularly effective in finding these experts and bringing them to the fore.

That doesn’t mean there isn’t a whole class of people looking to bypass this vetting process.  Mike in his post highlights a prominent trading expert who, in fact, doesn’t trade at all.  Unfortunately our brains are putty in the face of these so-called experts.  Jonah Lehrer at The Frontal Cortex writes:

..even terrible expert advice can reliably tamp down activity in brain regions (like the anterior cingulate cortex) that are supposed to monitor mistakes and errors. It’s as if the brain is intimidated by credentials, bullied by bravado. The perverse result is that we fail to skeptically check the very people making mistakes with our money.

What are we to do?  Emerging networks are becoming increasingly powerful, and by extension useful.  In part they do this by aggregating information, but they also do this vetting and promoting those individuals who demonstrate true specialized expertise.  The (investment) world is an increasingly complex place where this expertise is of particular value.  What you need is to develop your own team of specialists to help combat the false promise of the superficial guru.  Thankfully the tools to do so are becoming increasingly available.

*Hat tip to The Reformed Broker.

Dividends are back.  (WSJ, NYTimes)

Equity market sentiment at week-end.  (Trader’s Narrative)

Sorting through some industry ranks for mean-reversion opportunities.  (Aleph Blog)

A closer look at value investing.  (Ivanhoff Capital)

On recognizing secular bull & bear phases.  (Trader’s Narrative)

What is a neutral allocation to emerging market equities?  (The Capital Spectator)

Why do investors give hedge fund managers another chance to bl0w-up?  (WSJ)

On the importance of patience in trading.  Especially in a “boring” market.  (Chicago Sean, Barron’s)

Skepticism abounds on the utility of finreg legislation.  (Big Picture, naked capitalism, NYTimes)

Winners (Citigroup) and losers (mortgage brokers) from finreg.  (Politico, WSJ)

Carried interest tax reform is still dead.  (peHUB)

JP Morgan (JPM) wants to become a “global megabank.”  (Baseline Scenario)

Andrew Hall and the Volcker Rule.  (Deal Journal)

Hedge funds lose out at the last minute.  A tax looms.  (Absolute Return+Alpha)

Why austerity talk is taking hold.  (NYTimes)

Dr. Copper got all optimistic this week.  (MarketBeat)

A closer look at identifying business cycle turns.  (Econbrowser)

The ECRI weekly leading indicators continue to fall.  (Pragmatic Capitalism)

One model is saying there is little risk of a double-dip recession.  (Barron’s)

An unemployment report preview.  (Calculated Risk)

Mortgage rates hit a low this week, but no one seems to care.  (Atlantic Business, MarketBeat)

A fight is brewing around public pension funds.  (NYTimes)

Do we really want the Chinese to adopt Western consumption patterns?  (Infectious Greed)

Physics envy and the failure of economic models.  (The Psy-Fi Blog)

A positive review for Sebastian Mallaby’s “More Money Than God.”  (NYTimes)

Super-seed investors are the new venture capitalists.  (Infectious Greed)

The IPO model is broken.  Can it be fixed?  (WSJ)

In defense of Microsoft (MSFT).  (TechCrunch)

The myth of the opinionless man.  (BuzzMachine, Atlantic Business)

At least some good will come from the BP (BP) oil spill.  (The Reformed Broker)

The comedy classic Airplane! is 30 years old.  (NYTimes)

Per usual, there are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts, and Abnormal Returns TV.

Thanks for checking in with us this weekend.  Here are the items our readers clicked most frequently on Abnormal Returns Now and Abnormal Returns Classic for the week ended Friday, June 25th.  Where applicable the description is as it reads in the relevant linkfest:

Abnormal Returns Now:

1. Doug Kass is having a hard time finding bulls these days.  (TheStreet)
2. Don’t be fooled.  Microsoft (MSFT) is at-risk.  (SAI)
3. Are you prepared for a prolonged period of little (or no) equity risk premium?  (Bucks Blog)
4. John Paulson is loading up on vacant land.  (The Money Game)
5. Hedge fund manager Ray Dalio’s philosophy of “hyper-realism.” (WSJ)
6. The Baltic Dry Index is on a 17 day losing streak.  (Bespoke)
7. Are we repeating the February 2010 pattern?  (Afraid to Trade)
8. Eight ways Doug Kass has adapted to this market.  (TheStreet)
9. Two 90% down days in one week.  (Quantifiable Edges)
10. The odds of a double-dip recession.  (Marketwatch)

Abnormal Returns Classic:

1. One of the few reasons to watch CNBC.  (CXO Advisory Group)
2. Hedge fund rising stars for 2010.  (Institutional Investor)
3. Doug Kass is having a hard time finding bulls these days.  (TheStreet)
4. Country “PEG” ratios.  (Bespoke)
5. Eight ways Doug Kass has adapted to this market.  (TheStreet)
6. Victor Niederhoffer on being wrong.  (Slate)
7. Is the market already overbought?  (Trader’s Narrative)
8. Everyone is now a macro “expert.” (The Reformed Broker)
9. In a world of highly correlated assets maybe all you need is one ETF.  (The Money Game)
10. Trading is a business, not a hobby.  (Joe Fahmy)

We also had a handful of posts over at Abnormal Returns Classic:

1. Incompetence, uncertainty and risk.  The case of the $BP analysts.  (Abnormal Returns)
2. Luck, persistence and fund performance.  Why actively managed ETFs are coming whether you like it or not..  (Abnormal Returns)
3. Abnormal Returns screencasts of the week.  (Abnormal Returns)

One last thing, if you missed it earlier this week check out the first edition of Abnormal Returns on StockTwits TV featuring a discussion between Gregor Macdonald and Chris Nelder on the BP oil disaster.  Definitely worth a viewing.

Per usual, there are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts, and Abnormal Returns TV.

Small caps are expensive relative to their big cap cousins.  (ROI)

First half market performance tells us little about the rest of the year.  (Marketwatch)

Share buybacks are back, but nowhere near where they were pre-crisis.  (Market Blog)

The S&P 500 Advance-Decline is mired in oversold territory.  (Trader’s Narrative)

Why did it take so long for the retail sector to crack?  (Pragmatic Capitalism)

Down 10% is a bad month for any one, especially Andrew Hall.  (Dealbreaker)

Maybe index investors didn’t cause in a boom in commodity prices.  (Economist)

How exactly does Renaissance Technologies make money?  (Felix Salmon also AR Screencast)

What does past return consistency tell us about future returns?  (CXO Advisory Group)

Short-sellers are everywhere and always a target.  (Felix Salmon, Kid Dynamite, market folly)

Luck, persistence and fund performance.  Why actively managed ETFs are coming whether you like it or not..  (Abnormal Returns)

The BOE scrutinizes ETFs for “complexity and lack of transparency.”  (FT Alphaville)

Glimmers of hope in the IPO market.  (NYTimes)

Was the flash crash caused by “quote stuffing“?  (Trader’s Narrative, Nanex)

A  financial reform bill emerges from conference.  (Politico, NYTimes, Bloomberg, WSJ, FT)

What’s in (and out) of the finreg bill.  (CNNMoney, Reuters)

How much bite does finreg really have?  (The Reformed Broker, 24/7 Wall St., Jeff Matthews, Planet Money, DJ Market Talk, Slate)

Giving a grade to financial reform.  (Big Picture)

Big hedge funds are going to pay for finreg.  (FT Alphaville also CNBC)

Your broker now has a higher standard to live up to.  (The Reformed Broker)

Are central clearing houses ground zero in the next financial crisis?  (FT Alphaville)

Using Gannett (GCI) as an economic bellwether.  (MarketBeat)

Where this economic recovery stands.  (VIX and More)

Rail traffic continues to rise.  (Pragmatic Capitalism)

Low mortgage rates are not inducing much new lending.  (WashingtonPost)

The housing market could go nowhere for a couple of more years.  (The Money Game)

Housing=Jobs.  (MarketBeat)

Why doesn’t the Fed care more about unemployment?  (Slate)

The BDI is falling, but how worried should we be?  (FT)

The austerity vs. growth debate is a false one according to Mohamed El-Erian.  (FT)

Is some ECB liquidity flowing back into the capital markets?  (Data Diary)

The European debt crisis is going to play out over years.  (China Financial Markets)

The Russian economy is at a fork in the road.  (beyondbrics)

The upshot of renminbi rate flexibility.  (FT, naked capitalism, beyondbrics)

Just how big is the Gulf (of Mexico) oil economy?  (Fortune, The Money Game)

BP (BP) project partners are re-thinking their deals.  (FT)

Natural gas is expected to take market share over the next several decades.  (NYTimes)

The state of venture capital in Chicago.  (peHUB)

The downside of share buybacks.  (A VC)

A talk from a Berkshire Hathaway CIO candidate.  (Street Capitalist)

What does the rise of Apple (AAPL) tell us about the economy of the future?  (Howard Lindzon)

iPhone 4 sales continue to surprise to the upside.  (Apple 2.0 also GigaOM)

Box office derivatives are dead.  (THR)

What soccer tells us about the new world economy.  (Infectious Greed)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

We hope you are enjoying our ongoing series of screencasts.  The Screenr functionality at Chart.ly is well worth a look for anyone looking to illustrate their investment ideas.

We have linked below to our screencasts from the week ended June 25th.  Below you can find our most recent screencast embedded.  Please feel free to contact us with questions and/or feedback.

Monday, June 21st:  MINT: Is $MINT the actively managed ETF that is going to launch a wave of new like-minded funds?

Tuesday, June 22nd:  HD:  Expectations for a stronger housing market this year have evaporated as weaker statistics roll in.

Wednesday, June 23rd:  QQQQ:  $AAPL now dominates the $QQQQ. On the importance of knowing what you own when it comes to ETFs.

Thursday, June 24th:  SPY:  Competition (Vanguard) continues to heat up for plain-vanilla ETFs like the S&P 500 ($SPY, $IVV).

Friday, June 25th:  NFLX:  Does your investment approach take into account situations like $NFLX? If not, it should.

About a year ago we wrote about the prospects for actively managed ETFs.  Now a year later it seems like we may be on the cusp of more active ETF launches.  For instance, couple of days ago we discussed the disproportionate success of the PIMCO Enhanced Short Maturity Strategy Fund (MINT).  We agree with Michael Johnston at ETFdb that the success of this money market fund-alternative is likely to lead to a number of copycat funds.

Where does that leave the rest of the actively managed ETF industry?  At the moment, pretty much nowhere.  Christopher Condon at Bloomberg notes that active ETFs remain but a sliver of the ETF market.  The big fund companies seem to be waiting on some regulatory relief from the SEC to allow them to use a mechanism so they would not have to disclose their actual holdings on a daily basis.  So as to avoid the risk of front-running.

Assuming more actively managed ETFs come to market en masse, what should we expect performance-wise?  The evidence from actively managed open-end funds is not all encouraging.  Richard A. Ferri at Forbes highlights the results from the most recent S&P Persistence Scorecard.   Ferri writes:

A person would have to be a very bad coin flipper to get results that are worse than those shown in the S&P study. Over multiyear periods, few top managers are able to stay on top than one might expect with a random distribution.

These findings are consistent with recent research by Fama and French.  They find that there should be more funds that outperform than implied in the underlying data.  Rob Silverblatt at US News talked with Ken French about their findings:

[Silverblatt] So just how lucky are fund managers?

[French] If you look at the top 10 percent, they’re [comfortably] outperforming their benchmarks. …Those are the people that people would write books about. But it turns out that if you look at the distribution that you’d expect by chance, you’d expect more of them out there.

The bottom line from both of these studies is that past performance provides little information about future returns.  Logically, a low cost, indexed approach provides investors the best opportunity to generate net returns.  However, don’t expect this data to stop fund sponsors from pushing ahead with their active ETF plans. Why?  In part, because hope springs eternal.  But the big reason is fees.

In a world where a plain vanilla S&P 500 ETF is going to have a 0.06% expense ratio there is always going to be a desire for firms to up-sell investors into an active vehicle that can better justify a higher price.  Some actively managed ETFs will succeed, however most will likely fail over time to outperform a reasonable benchmark.  Just don’t expect to pick which fund is which before hand.

Are we owed a summer rally?  (Trader’s Narrative)

Doug Kass is having a hard time finding bulls these days.  (TheStreet)

More evidence that every one is a macro trader these days.  (Bloomberg)

Have we given analysts an impossible task?  (the research puzzle)

Why high yield corporate bond spreads may have more room to come in.  (Prof. Pinch)

Vanguard has S&P 500 ETF envy.  Plans to join the fray with 20 new funds.  (IndexUniverse, ETFdb, M* also AR Screencast)

America loves free ETF trades.  (Dealbook)

The dangers of ETFs are becoming more apparent.  (Economist)

The SEC pushes back against actively managed ETFs that don’t disclose their holdings.  (BusinessWeek)

The Bill Miller bounce.  (Bespoke)

Market seasonality illustrated.  (MarketSci Blog)

How contango affects the iPath S&P 500 VIX Short-Term Futures ETN (VXX).  (Options Zone)

Are massive corporate cash hoards bullish or bearish?  (Trader’s Narrative)

Buying companies that invest in their brand has resulted in outperformance.  (Pragmatic Capitalism)

Is there a turnover factor that affects stock returns?  (CXO Advisory Group)

On the importance of accountability in trading.  (Attitrade)

Why you don’t want to be on the wrong side of a margin call. (Falkenblog also Finance Trends Matter)

For-profit colleges are in the spotlight.  (Dealbook, market folly)

The Options Clearing Corp. wants to have “emergency access” to the Fed window.  (BusinessWeek)

The government is trying to get out of the GM business.  (Bloomberg, 24/7 Wall St.)

Goldman Sachs (GS) likes you, they really do.  (Dealbreaker)

America hates BP more than Goldman Sachs.  (Felix Salmon)

Is BP (BP) too big to fail?  (Zero Hedge, Bloomberg, BusinessWeek)

The legal consequences of the BP spill is going to play out over years.  (Tech Ticker)

The economic gangs of New York.  (The Reformed Broker)

Thirty year mortgage rates keep heading lower.  (Bespoke, Calculated Risk)

A look at the second leg down in housing.  (Big Picture also Maoxian, The Macro Trader)

The ratio of existing to new home sales is all out of whack.  (Calculated Risk)

Austerity is the new growth policy.  (Fortune, FT, Credit Writedowns)

Initial claims decline.  (Calculated Risk)

Comparing Fed statements.  (Market Rewind, Aleph Blog)

Signs of economic life:   steel imports, tourism, miles driven.  (Pragmatic Capitalism, EconomPic Data, Calculated Risk)

Europe is going to need a bigger TARP.  (FT Alphaville)

Swiss banks (and the franc) are enjoying a mini-revival.  (Bloomberg)

With the Euro down American companies may do some shopping.  (DealBook)

Why hasn’t protectionism reared its ugly head.  (Free exchange)

The natural gas transition is not a done deal.  (Gregor Macdonald, The Money Game)

High profile VC firm Elevation Partners hits “pause.”  (Fortune)

Google (GOOG) wins an important copyright ruling.  (WSJ also A VC)

Making the case for hedge funds as risk managers.  (Newsweek, Economist)

Jeff Miller, “If you do not know the answers, why are you so confident?”  (A Dash of Insight)

Pine beetles are a real danger for the lumber supply.  (Minyanville)

Sound like we need to start paying more attention to space weather forecasts.  (New Scientist)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

A preview of Q2 earnings.  (MarketBeat)

A bid still remains under the Treasury market.  (FT Alphaville, Bespoke)

Hedge funds are covering their Euro shorts.  (market folly)

Rydex market timers hate energy services.  (Trader’s Narrative)

Gold market timers are “unexpectedly cautious.”  (Marketwatch)

Trading profits have hit an “airpocket.”  (Street Sweep)

Investors are increasingly bypassing hedge fund of funds.  (FT)

Momentum rocks.  (Crossing Wall Street)

Everyone is now a macro “expert.” (The Reformed Broker)

How fundamentals and technicals interact:  leverage.  (CSS Analytics, IWO)

Are there predictable patterns of return continuation in equities?  (SSRN)

Junk bonds are the new sovereigns.  (Infectious Greed, FT Alphaville)

What is a PCF or portfolio composition file and how does it matter for your ETF?  (FT Alphaville)

ETF MLPs are tricker than they look.  (Morningstar also 24/7 Wall St.)

For all you value hounds a media stock trading at 2x cash.  (Financial Adviser)

“Sometimes it’s not enough to have a good strategy, you also need to understand why it’s a good strategy in order to profit in the long term. “  (The Psy-Fi Blog)

The Gulf drilling moratorium is lifted, for now.  (Bloomberg)

What is private equity going to do with all that cash?  (WSJ)

The FDIC:  Congress continues to be generous with your money.  (Street Sweep)

New home sales collapse.  (Calculated Risk, Bespoke, Big Picture, Curious Capitalist, Atlantic Business, EconomPic Data)

Lakshman Achuthan and Anirvan Banerji, “A slowdown in U.S. economic growth is imminent, but a new recession is not.”  (Big Picture)

The Baltic Dry Index is on a 17 day losing streak.  (Bespoke also Data Diary, The Source)

What’s next for the Fed?  (Pragmatic Capitalism)

Should we fear a little bit of inflation?  (Economix)

Suburban population growth has slowed.  (Real Time Economics)

Europe is not homogenous.  Nor will the effects of a weaker Europe be. (EconomPic Data, FT Alphaville)

Skepticism that the IPO of Booz Allen Hamilton will actually make for a better company.  (WashingtonPost)

Is Apple now “too big to succeed“?  (Bloomberg also Minyanville)

It is Apple (AAPL) and everyone else in the Nasdaq 100 (QQQQ).  (Bespoke also AR Screencast)

The new iPhone rocks.  (WSJ, NYTimes)

Apple has sold 3 million iPads to-date.  (Apple 2.0, ibid)

Microsoft (MSFT) is languishing.  (FT)

The story surrounding the Tesla IPO keeps on getting more interesting.  (DealBook also earth2tech)

Jeff Miller, “A valuable investor skill is identifying the real experts.  Hardly anyone can do this.  Evaluating expertise is difficult.”  (A Dash of Insight)

What you can learn from Victor Niederhoffer’s blow-ups.  (VIX and More, Random Roger)

How are people spending their time these days?  (EconomPic Data)

The bluefin tuna is at risk from overfishing.  (NYTimes, Economist)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

Country “PEG” ratios.  (Bespoke also dshort)

Is the market already overbought?  (Trader’s Narrative)

Eight ways Doug Kass has adapted to this market.  (TheStreet)

Are you prepared for a prolonged period of little (or no) equity risk premium?  (Bucks Blog, Capital Spectator)

Adam Warner, “In real life, not every day of an option’s life is equal. The simplest example is that a day has less value for an option if the market is closed.”  (Options Zone)

The continuing economic shift from developed to emerging markets.  (Trader’s Narrative)

One of the few reasons to watch CNBC.  (CXO Advisory Group)

When a reverse split is a positive:  the case of ETFs.  (WSJ)

In a world of highly correlated assets maybe all you need is one ETF.  (The Money Game)

Hedge fund rising stars for 2010.  (Institutional Investor)

Trading is a business, not a hobby.  (Joe Fahmy)

Home improvement stocks have been notable laggards of late.  (Barron’s also WSJ, AR Screencast)

Incompetence, uncertainty and risk.  The case of the $BP analysts.  (Abnormal Returns)

Socially responsible investors were onto BP (BP) for some time now.  (Guardian)

Anadarko Petroleum (APC) debt is viewed as increasingly risky.  (WSJ also Barron’s)

Are Vanguard’s ETFs cannibalizing the firm’s index funds?  (SSRN)

A sign of things to come:  weakness in Ford (F) stock?  (The Stock Bandit)

Dow Chemical (DOW) is adding capacity.  (Value Plays also The Money Game)

Commercial real estate prices are bouncing along the bottom.  (Calculated Risk)

More weakness in existing home sales.  (Calculated Risk, EconomPic Data)

The odds of a double-dip recession.  (Marketwatch, Pragmatic Capitalism)

Bad unemployment statistics are no longer news.  (The Macro Trader)

Can bond auctions actually fail?  (Pragmatic Capitalism)

Why is Germany so interested in fiscal austerity?  (Marginal Revolution, EconomPic Data)

The limited impact of the Yuan revaluation.  (NYTimes, beyondbrics, MarketBeat)

Why was everyone so excited by the Yuan news?  (FT, Macro Man also Free exchange)

Which is it:  yuan or renminbi?  (MarketBeat)

In case you didn’t believe it, more evidence that China is not a free market economy.  (The Money Game)

Looking for growth in China.  (Leigh Drogen)

Economic growth solves a lot of problems.  (Free exchange)

Roger Lowenstein, “Opportunities for financial reform don’t arise very often.”  (Bloomberg)

The Obama administration has fumbled the opportunity in regards to the Gulf oil spill.  (Big Picture)

Think the Deepwater Horizon disaster is going to stop deep water drilling?  Think again.  (WashingtonPost)

Are Android+Nokia an inevitability?  (Ultimi Barbarorum)

Don’t be fooled.  Microsoft (MSFT) is at-risk.  (SAI contra All Things D)

Google and Twitter go to bat for TheFlyontheWall.  (NYTimes)

Who is going to win the e-book wars?  (GigaOM, Minyanville)

Firms like Quora are fighting over the space not filled by Google (GOOG).  (WSJ)

More on the use of “text mining” to trade stocks.  (Digits)

Victor Niederhoffer on being wrong.  (Slate)

Another area where the emerging markets rule:  football.  (EconomPic Data)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

Aaron Pressman at Reuters had a piece last week that looked at how to a man the analysts covering BP (BP) in the aftermath of the Deepwater Horizon disaster could have gotten things so wrong.  As oil spilled into the Gulf and the company’s stock continued to plummet the vast majority of analysts continued to rate the company a “Buy.”  It wasn’t until June that many analysts began downgrading the stock.  Pressman writes:

How could so many analysts have gotten the call so wrong? Of course, to err is human. And Wall Street is also prone to herd-like tendencies. But some experts say the unanimity of error around the BP blow-up also has exposed — yet again — the conflicts and weaknesses that still bedevil the sell-side analyst community, despite a decade of much-heralded reform.

Then again, we probably shouldn’t be all that surprised by this.  The sell-side has been a topic of derision ever since the bursting of the Internet bubble.  Felix Salmon also at Reuters writes:

Sell-side analysts live in mediocristan, and are prone to being blindsided by the unexpected; they almost never, for instance, recommend negative-carry trades. Investors, if they’re any good, know this. No one ever made money by blindly following sell-side advice, and so we should hardly be surprised that people whose position coincided with the sell-side consensus ended up losing a lot.

However this case is a good illustration of something else:  the Dunning-Kruger effect.*  To wit:

When people are incompetent in the strategies they adopt to achieve success and satisfaction, they suffer a dual burden: Not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to realize it.

Errol Morris writing at the New York Times has a piece well worth reading exploring this effect, including an interview with David Dunning.  The idea that there are “known unknowns” and “unknown unknowns” runs throughout the piece.  This is not entirely dissimilar from the idea of “risk and uncertainty.”  There are ideas and information that are so far removed from our normal state of awareness that we are left completely unaware of them until they pop up.  Morris writes:

Put simply, people tend to do what they know and fail to do that which they have no conception of.  In that way, ignorance profoundly channels the course we take in life.  And unknown unknowns constitute a grand swath of everybody’s field of ignorance.

Coming back to how this relates to the topic at hand.  The fact is that deep water drilling is a novel technology that heretofore had not experienced a catastrophic failure.  Therefore trying to estimate the potential damages from this accident at that early date was at best an exercise in dart-throwing.  Joshua Brown at The Reformed Broker has it about right:

So now you take a scenario like BP where, in truth, no one has any clue what the damage could be, how much the disaster may cost, who is on the hook for the cleanup, etc.  It’s all unprecedented.  For a fundamental analyst to step up in the midst of all the uncertainty and pretend like their “models” have an answer is the height of slapstick-comedy-masquerading-as-research.

There is nothing wrong with saying you don’t know something.  After a reading of Dunning-Kruger one could argue that acknowledging one’s lack of knowledge is in fact a sign of intelligence.   This is not just a BP issue.  It pervades the modern world and the world of finance as well.  There is simply too much out there that we don’t know to state with confidence what is at best conjecture.

*Hat tip to Jason Kottke for pointing us to the Errol Morris piece.

Where has all the volume gone?  (Trader’s Narrative)

A long term look at the CAPE.  (EconomPic Data)

What does the market typically do around July 4th?  (CXO Advisory Group)

A look at the dip in the VIX.  (Daily Options Report)

Is it time to bottom fish in the homebuilders? Nope.  (Big Picture)

Where Mark Mobius is seeing opportunities.  (beyondbrics)

Grains are in wicked surplus.  (WSJ)

Commodities will see little impact from the rise in the Yuan. (Market Blog, ibid)

On the parallels between winning golf and winning trading.  (VIX and More)

Distress does not seem to be priced in the cross-section of equity returns.  (SSRN)

More on the drop in the Baltic Dry Index.  (FT Alphaville)

Schwab (SCHW) makes inroads into the ETF business by being a low-cost provider.  (Morningstar)

The ETF industry is going to continue pushing the envelope.  (Bloomberg Magazine)

Why the Pimco Enhanced Short Maturity Strategy (MINT) is changing the active ETF equation.  (IndexUniverse also AR Screencast)

Just how on the hook is Anadarko Petroleum (APC) for clean-up costs?  (Fortune)

Should we bee all that surprised that sell-side analysts misplayed the BP news?  (Felix Salmon)

China didn’t have many options in regards to a revaluation of the Yuan. (FT, WSJ, Free exchange)

The moves in the Yuan are really not all that big.  (EconomPic Data, WSJ, BondSquawk)

A really long term look at where the Yuan may be going.  (Maoxian)

Will the Euro benefit from the move in the Yuan?  (MarketBeat)

Is China now at risk of a “tidal wave” of capital inflows?  (beyondbrics)

An interesting look at currency trade weights over time.  (Minyanville)

China’s move signals a more normal global economy.  (MarketBeat, ibid)

Deflationary risks followed by inflationary risks.  (Econbrowser)

Some Eurozone companies are thriving in this environment.  (NYTimes)

Andy Kessler on the parallels between bailing out the banks and bailout out Europe.  (The Daily Beast)

Even China recognizes that natural gas is a better bet than coal.  (The Reformed Broker)

Shale gas discovery is not without its risks.  (Bloomberg Magazine)

The IPO market waits on a bellwether tech IPO.  (TechCrunch)

What is the third largest Internet company in the world?  The answer may surprise you.  (TechCrunch)

Some thoughts on herding.  (Zero Beta)

A Warren Buffett reading list.  (market folly)

Aggressive math-focused players are dominating tournament poker.  (Time)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

Doug Kass fears a continued contraction in P/E multiples.  (TheStreet)

Equity market sentiment at week-end. (Trader’s Narrative also Attitrade)

A look at market breadth by sector.  (StockCharts Blog)

Why investing with the herd feels so good.  (WSJ)

Corporate cash continues to grow.  (Horan Capital Advisors)

The move in natural gas has caught many unawares.  (WSJ)

The CBOE (CBOE) makes for a tempting target.  (Barron’s)

Is Google (GOOG) cheap?  (Market Blog)

Is it a good time to bet against Apple (AAPL) stock?  (Apple 2.0)

Why are these warrants so cheap?  (Aleph Blog)

Negative carry and the need for investment flexibility.  (Abnormal Returns)

Let the debate about ethanol begin again.  (24/7 Wall St.)

Wall Street analysts completely misplayed the BP (BP) oil spill.  (Reuters, TRB)

Anadarko Petroleum (APC) is trying to distance itself from BP.  (Bloomberg, CNNMoney)

BP is going to sue Anadarako Petroleum and try and raise some serious cash.  (Telegraph, The Money Game, Guardian)

Are BP bonds a bargain?  (Barron’s)

The vultures are circling BP.  (Deal Journal)

How herding behavior can occur.  (Economist’s View)

How dark pools adversely affect liquidity and price discovery.  (The Psy-Fi Blog)

Lumber prices are off 30% since April.  (Calculated Risk)

The costs to fix Fannie and Freddie keep going higher.  (NYTimes, Calculated Risk)

Public pensions are unsustainable at current rates.  (NYTimes)

Who loses (and how much) in financial regulatory reform?  (Huffington Post)

Lakshman Achuthan at the Economic Cycle Research Institute (ECRI) on the value of leading economic indicators to forecast the stock market.  (Tech Ticker)

Why does anyone still listen to Alan Greenspan?  (Big Picture)

Is hyperinflation even possible?  (Data Diary)

On the relationship between new housing starts and unemployment.  (Calculated Risk)

On the role consumer sentiment measures play in forecasting economic activity.  (macroblog)

China talks “gradual” currency appreciation.  (NYTimes, Bloomberg, naked capitalism, Street Sweep)

Is the Canadian dollar a “petro currency”?  (The Buzz)

Let’s end the carried interest debate once and for all.  (Infectious Greed)

The IPO market shows some signs of life.  (Dealbook)

A successful via IPO is a rarity these days.  (A VC)

A review of Sebastian Mallaby’s “More Money Than God.”  (FT)

Hedge fund manager Ray Dalio’s philosophy of “hyper-realism.” (WSJ)

A strategy session with Adam Warner and Charles Kirk.  (Kirk Report)

In defense of Business Insider.  (Zero Beta)

Abnormal Returns screencasts of the week.  (Abnormal Returns)

Happy Fathers Day.  (The Reformed Broker, A VC)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

Thanks for checking in with us this weekend.  Here are the items our readers clicked most frequently on Abnormal Returns Now and Abnormal Returns Classic for the week ended Friday, June 18th.  Where applicable the description is as it reads in the relevant linkfest:

Abnormal Returns Now:

1. Jim Chanos is reportedly short Exxon Mobil (XOM).  (Clusterstock)
2. Is the market on the verge of another rally?  (Minyanville)
3. Emerging markets as the engines of global growth.  (Trader’s Narrative)
4. Doug Kass, “The world is interconnected, interlinked and increasingly complex.”  (TheStreet)
5. TED spread sees the largest decline since March.  (Bespoke)
6. Two 90% up days in one week.  (Quantifiable Edges)
7. Bearish sentiment has increased “convincingly” since the start of the correction.  (Bespoke)
8. The gold/stock ratio says stay long gold, short equities.  (Pragmatic Capitalism)
9. The stocks high frequency traders love to trade.  (Zero Hedge)
10. The put-call ratio is poised to provide a market signal.  (Barron’s)

Abnormal Returns Classic:

1. The put-call ratio is poised to provide a market signal.  (Barron’s)
2. A look at market valuations.  (MarketBeat)
3. 50% emerging markets is the new normal.  (Infectious Greed)
4. What you can learn from Seth Klarman.  (the research puzzle)
5. What the misreading of a popular economic indicator tells us about market sentiment.  (A Dash of Insight)
6. The Big Mac vs. the Chipotle burrito.  A tale of the nutritional tape.  (The Atlantic)
7. Why this market correction shocked people:  the speed.  (WSJ)
8. The battle between fundamentals and technicals.  (Trader’s Narrative)
9. Keeping an eye on some recent market leaders.  (Barron’s)
10. The stocks high frequency traders love to trade.  (Zero Hedge)

We also had a handful of posts over at Abnormal Returns Classic:

1. Individuals vs. institutions.   What advantages do individuals have?  (Abnormal Returns)
2. Abnormal Returns screencasts of the week.  (Abnormal Returns)
3. Negative carry and the need for investment flexibility.  (Abnormal Returns)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

In an earlier post we talked about the advantages (and disadvantages) of being an individual investor versus an institutional investor.  One way in which the individual investor often has an advantage is flexibility.  Michael Arold at Holistic Swing Trading left a comment on the post noting the following:

There is a law in mathematical optimization theory saying “the fewer constraints are put on a optimization problem, the better the optimum”. Since individuals have clearly fewer constraints in their investment process, they should outperform (just theoretically).

This point was driven home in Gregory Zuckerman’s book “The Greatest Trade Ever” which documents how John Paulson was able to suss out and profit greatly from the subprime/mortgage bubble. We would recommend the book as a companion piece to Michael Lewis’ “The Big Short” which we also enjoyed.  (Only hardcore investors need both, however.)

As surprising as it is in hindsight, Paulson had a great deal of difficulty attracting investors for his Paulson Credit Opportunities Fund that was dedicated to shorting the subprime market.  One big reason why many investors balked was the fact that the fund would have “negative carry.”  Zuckerman writes:

A key reason even experienced investors resisted buying mortgage protection:  CDS contacts were a classic example of a “negative-carry” trade, a maneuver that investment pros detest almost as much as high taxes and coach-class seating.  In a negative-carry trade, an investor commits to paying a certain cost for an investment with the hope of untold riches down the line.  In the case of CDS contracts, purchasers usually agree to make an up-front payment, and to shell out annual insurance premiums, both of which bake in a sure cost.*

Many investors were unwilling to take on the ongoing costs of trades.  In so doing they missed out on untold profits that Paulson was able to reap.  This institutional mindset did not allow for this type of risk-reward situation where relatively small costs could yield huge profits, especially in the world of mortgage bonds.

That is not to say there are not plenty of cases were positive carry, the flip side of negative carry, works out for investors.  Indeed on area we touched in our earlier posts, distressed debt, has this characteristic.  Investors who buy beaten down debt, provided it is still current, have both the opportunity to earn a high current yield and profit from a re-pricing of the debt instrument.  Indeed, the best of both possible worlds.

However some investors focus exclusively on negative carry trades.  Investors who follow a strategy popularized by Nassim Taleb purchasing (far) out-of-the-money option contracts in anticipation of greater than expected market moves.  This strategy requires a steady stream of option purchases, many of which will finish out-of-the-money.

The bottom line is that investors need to remain flexible in their approach to the market.  Sometimes that means positive carry trades make sense.  Other times negative carry trades are necessary to capture sharp market moves.  Some institutional investors recognize this, but many are hamstrung both by their investment mandates and their by-the-book thinking.  Chalk one up for investment flexibility.

*p. 119, Gregory Zuckerman, “The Greatest Trade Ever”, Broadway Books, New York, NY, 2009.

Please note:  We purchased our own copy of “The Greatest Trade Ever” and were in no way compensated for this post.

How HFT machines have fundamentally changed the way markets operate.  (The Atlantic via Clusterstock)

“It’s difficult to see what news might kick off a big upward surge, but it’s easy to identify things that could send things down.”  (Free exchange)

Investor sentiment remains somewhat mixed.  (Pragmatic Capitalism)

What are Rydex market timers up to?  (The Technical Take)

Money seems to be flowing into North American assets.  (Derek Hernquist)

Gold vs. gold mining stocks.  (market folly)

Buy corn.  (Zero Hedge)

How realistic is all this Treasury bubble talk?  (Big Picture)

The ETN comeback.  (ETF Trends)

iShares is getting into the active ETF business.  (IndexUniverse, ETFdb)

How should you trade the open?  (CXO Advisory Group)

In search of a standard for “erroneous trades.”  (Bloomberg)

What is the copper/gold ratio telling us?  (Trader’s Narrative)

What Caterpillar (CAT) is telling us about global growth.  (Value Plays)

A look at the relative strength of the energy sector.  (Trader’s Narrative)

Citigroup (C) does not seem to be very concerned with financial reform.  (Clusterstock)

How to put on a “disaster trade” using options.  (VIX and More)

Who should we believe in the muni default debate?  (Deal Journal)

Credit ratings may soon be liable for bum ratings.  (Big Picture)

BP bond risk illustrated.  (Morningstar)

Have Americans fallen back in love with natural gas?  (The Money Game)

Jim Chanos is reportedly short Exxon Mobil (XOM).  (Clusterstock)

Dividend cut aside, can BP bear the costs of the oil spill?  (FT Alphaville, Breakingviews)

“..for 99.9 percent of investors, there is no reason to do involve yourself with the company (BP) other than to send money to the clean-up efforts”  (Howard Lindzon)

What are high yield bond spreads telling us about the state of the economy?  (WSJ)

Core CPI is at its lowest levels since 1966.  (Bespoke)

Quantifying the double dip.  (Macro Musings)

The ECRI WLI continues to decline.  (Pragmatic Capitalism)

“Feels like a normal recovery to us.”  (Jeff Matthews also Economix, AR Screencast)

To what degree is the rise in leading economic indicators due to easy money?  (EconomPic Data)

“Economic choices are not scalar.”  (Interfluidity)

Like it or not, retirement ages are going higher around the world.  (FT)

The north-south divide in Europe could continue for awhile.  (FT Alphaville)

The Swiss franc continues to rally against the Euro.  (MarketBeat)

European bond spreads continue to widen out.  (Calculated Risk)

Russia looks to take advantage of the BP oil spill.  (beyondbrics, The Money Game)

Hungary is the Switzerland of Central Europe.  (beyondbrics)

China as a “stealth buyer” of gold.  (CNNMoney, TRB)

“Has Vietnam’s moment finally arrived?”  (BusinessWeek)

The “long-term supercycle for coal” continues unabated.  (Dot Earth)

What a true oil man looks like.  (The Reformed Broker)

Individuals vs. institutions.   What advantages do individuals have?  (Abnormal Returns)

Merrill Lynch is getting into the online brokerage business.  (WSJ)

How big a deal (or not) is the Kindle to Amazon (AMZN)?  (CNBC)

Quotes of the day.  (The Reformed Broker)

Horse racing continues it slow slide into obscurity.  (SportsBiz)

There are now a number of ways to follow Abnormal Returns including:  @ARupdates, free e-mails:  AR Classic,  AR Energy, AR Options, the Abnormal Returns widget, our daily screencasts.

We have been experimenting with a new screencasting feature here at Abnormal Returns.  The Screenr function at Chart.ly allows anyone to record and upload a screencast of up to five minutes.  We have been using this feature to offer a little bit more explanation on some of the links in our daily linkfest.  As you can see it is not limited to technicians. Below you can see our screencast from earlier today talking about the state of the economy.  In it we walk through some posts in today’s linkfest that discuss signs of economic weakness (and strength).  In addition we have listed the other screencasts we recorded during the past week.

• Sunday, June 13th:  NFLX:  An Abnormal Returns screencast. Stock buybacks are a sideshow at this point for $NFLX shareholders.
• Monday, June 14th:  SBUX:  Should Starbucks shareholders care all that much about the surge in coffee prices ($KC_F)?
• Tuesday, June 15th:  CBOE:  The CBOE IPO may strike some as pricey, but can you truly put a price on scarcity value?
• Wednesday, June 16th:  FDX:  FedEx, the effect of the BP oil spill on Russia ($RSX) and a cool infographic in today’s screencast.
• Thursday, June 17th:  BP:  More on BP as a battleground stock. Investors now focusing on BP bonds and related stocks.
• Friday, June 18th:  CAT:  Caterpillar vs. the ECRI: who should we believe on the state of the economic recovery? If you have any questions or comments about this new feature please feel free to contact us.