The Big Picture

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• Does Financial Connectedness Predict Crises?
• 10 Monday PM Reads
• Tax-Friendly South Dakota Shelters Out-of-State Billions
• Mapping Poverty in America
• 10 Monday AM Reads
• Happy 100th Birthday, Mother Merrill. We Miss You

Does Financial Connectedness Predict Crises? Posted: 07 Jan 2014 02:00 AM PST

10 Monday PM Reads Posted: 06 Jan 2014 01:30 PM PST Here is my afternoon train reading: • How to Invest as Interest Rates Rise (WSJ) • Why 2014 could be the most interesting year in technology in a long time (Quartz) see also Q&A with Marc Andreessen: Bubble Believers ‘Don’t Know What They’re Talking About’ (WSJ) • Investors grow confident — or is it overconfident? — as stocks hit record highs (Yahoo Finance) • Dr. Doomlove, or How Nouriel Roubini Learned to Stop Worrying (Businessweek) • Hilsenrath's Takeaways: Highlights From Bernanke's Speech (WSJ) see also A Weekend of Fedspeak (Tim Duy’s Fed Watch) • 30 Under 30 (Forbes) • MIT Economist Seeks Facts in Health-Care Policy Debate (Bloomberg) • Ronald Rubin: How the ‘Wolf of Wall Street’ Really Did It (WSJ) see also Leonardo DiCaprio Addresses ‘Wolf’ Controversy: ‘We’re Not Condoning This Behavior’ (Variety) • This is Your Brain on Religion: Uncovering the science of belief (Salon) • How Nobel-Winning Economic Theories Can Help Your Online Dating (WSJ) What are you reading?   Millions See No Benefit From Soaring Stock Prices Source: CNN

Tax-Friendly South Dakota Shelters Out-of-State Billions Posted: 06 Jan 2014 11:30 AM PST From Bloomberg: South Dakota legislators have loosened the state’s laws to encourage wealthy out-of-staters to set up trusts there, often for tax reasons. The families needn’t move to the state or even invest there. In the past four years, the amount of money administered by South Dakota trust companies has tripled to $121 billion, almost all of it from out of state. Source: Bloomberg

Mapping Poverty in America Posted: 06 Jan 2014 09:00 AM PST Click for an interactive graphic. Source: NY Times   If you missed it over the weekend, Sunday's New York Times had an amazing interactive graphic on where poverty is in the U.S. Over the past 50 years, the poverty rate in the nation has fallen from 19 percent to 15 percent in essentially two generations.   Continues here

10 Monday AM Reads Posted: 06 Jan 2014 07:30 AM PST Welcome back to the first full work week of the new year. Back to work! • You Are HERE (Reformed Broker) • Wall Street is finally acknowledging that bogus trades are a problem … (Quartz) see also HFT Madness: Nasdaq Spoofing, HBAN, Google Options (Value Walk) • ‘Value’ managers are finding few cheap stocks. Is that a warning sign for the rest of us? (WSJ)   Continues here

Happy 100th Birthday, Mother Merrill. We Miss You Posted: 06 Jan 2014 05:00 AM PST click for bigger graphic Source: Bank America     Merrill Lynch Pierce Fenner & Smith turns 100 today. At least, she would have been, if she was a standalone entity, and not a government rescued TBTF entity, forced into a shot-gun wedding with Bank of America. I have a warm place in my heart for the firm once referred to as Mother Merrill. As a young trader, I interviewed for an entry-level position. Right there on the main trading floor, a cavernous affair the size of several football fields in the downtown office. It was unlike any place I had ever been in before. I had plenty of friends who worked on desks there, and eventually came to know many folks in their research department. There was at one time a sense of camaraderie at Merrill, a real feeling that everyone was rowing in unison. In my experience, it was a unique place, with a sense of passion and purpose. And even though I never worked there, I was mentored by a number of traders who did. It was that sort of place. The idea of democratizing finance for the middle class was novel. So too was the Cash Management Account (CMA), allowing brokerage customers to combine money market, check-writing and credit card all in one account. Win Smith, son of founding partner (yes, that "Smith") details this history in Catching Lightning in a Bottle: How Merrill Lynch Revolutionized the Financial World.   Continues here   Continues here

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