The Daily View: Never Take Financial Advice From Zerohedge

Why you shouldn’t take financial advice from Zer0hedge:

This is the 3rd-longest bull market in US history, and by my assessment it has much further to go. Zerohedge have been bearish since the bull market began six years ago, and anyone who heeded their warnings to stay out would have missed some incredible gains. Interest rates haven’t budged and valuations are not high. Pretty much all the economic conditions that were in place in 2009 when the bull market began are still here, albeit with much higher prices & earnings. All the important data (consumer spending, exports, profits & earnings) remains strong. Although interest rates are low, this is still a rally driven by fundamentals. Multinational companies like Google and Disney keep reporting blowout numbers every quarter. The M2 money velocity is still stuck, indicating that all the fed intervention hasn’t created inflation despite all the predictions on zer0hedge and elsewhere that it would. Deflation is still a bigger concern than inflation – however- I will note that this is monetary/employment-based deflation, which is separate from the trend of inflation for services like tuition, healthcare, daycare, cable bill, and insurance, for example. We’re in a sweet spot where the data that influences fed policy is deflationary, even if there is inflation elsewhere.

HBD also plays a role in my bullish thesis, knowing that social Darwinism means that the smart will continue to be rewarded with more, including higher stock and home prices. The market is rising because of the economic contributions of the cognitive and financial elite, as much the left wishes that the useless ‘black lives matter’ did matter. More like ‘smart/economically productive lives matter’. Creative people creating economic value.

The Silicon Valley Suicides

In these days of assumed meritocracy, where children can be turned into anything, we admire them as displays of remarkable engineering, to be tweaked and fine-tuned into bilingual perfection. What we’ve lost, perhaps, is a sense that there may be things about them we can’t know or understand, and that that mysterious quality, separate from us, is what we should marvel at.

For better or worse, that’s not true. The growing importance of IQ in the 21st century economy means some some people may have more potential to succeed than others, and the problem is when these children become older they come to the shocking realization that their parents and teachers who coddled them were wrong and that the meritocracy, even if we don’t fully understand it, rules. That means smarter people, who tend to produce more ‘merit’, get further ahead in life.

The ramifications of individual cognitive differences have become magnified in that the difference between a 100 vs. 120 IQ is much more important today than , say, a couple generations ago when the economy was less automated.

Some also blame misandry and the feminist school environment for the suicides. Hard to point point the cause.

Finances are an important factor:

$34,000 is the misery line. If earning $75,000 annually is the benchmark for financial happiness –– earnings over that amount haven’t been shown to increase happiness in the long-term –– then consider $34,000 the new tipping point for financial misery. People who earned less than $34,000 were 50 percent more likely to commit suicide, researchers found. People who earned between $34,000 and $102,000 increased their risk for suicide by only 10 percent.

iSteve lists the latest list of the names of all the National Merit Scholars in California by high school:

http://www.mercurynews.com/education/ci_28780350/list-california-national-merit-scholar-semifinalists-2015-2016

Gunn H.S. in Palo Alto, the subject of the article, has 46 putting in the top few in California.

These are the people who are the most likely to succeed in our increasingly technological, winner-take-all economy.