Market Outlook Is Confusing; Here It Is, Anyway: Opening Line

There was a time when Russia’s moves on Ukraine were being called an invasion and U.S. job growth, finally, was revving into a higher gear that would force Janet Yellen’s hand.

Yeah, we remember last Monday, too.

The whipsaw reversals in the seven days since then contribute to a confounding era for conventional wisdom and a growing sense that we’ve landed in a bizarro world.

How else to characterize an environment in which weaker-than-expected economic numbers move stocks higher rather than lower? That’s not supposed to happen. But neither is the prolonged vigil for movement in a federal funds rate that is close to zero.

What else but a bizarro world can explain how investors, who classically buy too late and hold too long, have somehow sat out, en masse, a five-year rally in U.S. Treasuries? Seems like while we were listening to critics of the Fed’s policy, buyers and holders of government bonds have enjoyed a cool $1 trillion in returns.

Ditto the case for U.S. stocks. “How do you make sense of lackluster flows into equity funds amid the longest outperformance for U.S. stocks since the presidency of Richard Nixon?” Lu Wang asks today in a story about how “investors have stayed skeptical about the five-year advance that created almost $16 trillion of share value.”

The uncertainties around us -- war or peace, growth or recession -- makes us appreciate the relatively more predictable world of sports. After all, even in a bizarro world there’s no way the 10th- and 14th- seeded men at the U.S. Open eliminate Nos. 1 and 2 on the same day, right? Or that the Buffalo Bills and Miami Dolphins could beat the Chicago Bears and New England Patriots on opening weekend, right?



On today’s economic calendar is consumer credit at 3 p.m. EDT.

Earnings get served up by Campbell Soup.


- U.S. faces challenge in getting Arab partners to join the fight against Islamic State militants. - Alibaba has made an average of two acquisitions a month this year. - Japan’s economy shrank an annualized 7.1 percent in the three months through June. - New Jersey lawmakers consider ending Atlantic City’s monopoly on gambling. - Harvard received a record $350 million donation for its public health school from the family behind Hong Kong-based Hang Lung Group. - Paul Tudor Jones’s 60th birthday party featured Jon Bon Jovi and John Fogerty. - Chick-fil-A founder S. Truett Cathy died at 93. - A small meteorite caused a crater in the Nicaraguan capital, Managua. - Politico Executive Editor Rick Berke resigned. - Republican Scott Brown uses awards to win female voters in New Hampshire Senate race. - Nobody went to the movies this weekend. - Serena Williams likes the U.S. Open.


Some 250 years ago, Great Britain was experiencing a wee bit of tension with subjects who had gone and colonized a new continent. Those subjects, taxed but not represented, would declare themselves independent in 1776, leading to … us.

Now another part of the erstwhile empire, Scotland, is nearing an historic referendum on independence, to be held Sept. 18. Polls are suddenly showing that independence might win majority support. Should Americans care?

Advocates on both sides think so. In an April speech at the Brookings Institution in Washington, George Robertson, a former U.K. defense minister, warned that breaking up the U.K. further would give “the dictators, the persecutors, the oppressors, the annex-ers, the aggressors and the adventurers across the planet the biggest pre-Christmas present of their lives.”

If Robertson aimed for our fear triggers, Scottish First Minister Alex Salmond appealed to our sentimental nature. “One of the first and most exciting tasks of an independent Scotland will be to devise a constitution for our new nation,” he said in an April speech in New York City. “And in doing that, we will undoubtedly look for inspiration to the U.S. Constitution -- still the supreme example of how such a document can embody a nation’s dearest and most enduring principles.”

Aww, Alex. You flatter us. But as the world seems to grow more and more dangerous by the day, we can’t help but feel an affinity for those Royal Navy Trident submarines based in Scotland that would become a bit of an issue if Scotland were to break away. We need those babies lubed up and ready to go on a moment’s notice, capisch?

Our president already weighed in on the side of keeping the United Kingdom united. (Of course, he was standing next to the U.K. prime minister at the time, so what else could he say?) Also hoping to keep the band together are Mick Jagger and Sting, and hey, they seem cool.

See, what some call independence, others call secession. And that’s an ugly word in the U.S., suggesting as it does the carnage of the Civil War and, much more recently and less gravely, the pettiness following the 2012 presidential election.

In the days after Obama won a second term, the White House received petitions proposing the secession of 23 states. Depressingly, eight of those proposals gathered more than 25,000 online signatures, the threshold (at the time) at which the White House responds as part of its “We the People” program.

In his reply, Jon Carson, director of the Office of Public Engagement noted that one thing America’s founders didn’t enshrine was “a right to walk away.”

A ninth petition that Carson included in his reply was titled, “Deport Everyone That Signed a Petition to Withdraw Their State From the United States of America.” It gathered more than 25,000 signatures as well.


As the first head of the Treasury Department’s Office of Financial Stability, Neel Kashkari oversaw the huge, unpopular (and probably heaven-sent) beast known as the Troubled Asset Relief Program.

To get a sense of the latest challenge Kashkari has taken on, see Michael Marois’s story today on the political force that is California Governor Jerry Brown, whose long and varied political resume has made him something of a Jedi master.

“Brown, who once trained to be a Jesuit priest, says he’s learned after four decades in political office to embrace pragmatism, anticipate challenges long in advance and accept that too many variables exist in any situation to try to ride any one to success,” Marois writes.

Where most American politicians strive relentlessly in one direction -- upward -- Brown has built one of the more curious resumes in government. After serving as California governor -- and running twice for U.S. president -- from 1975 to 1983, he was mayor of Oakland for eight years, then California attorney general for four more, before defeating Meg Whitman in 2010 to become governor again.

Brown says his politics have been influenced by his readings of Sun Tzu: “Win without fighting” and “Defeat your enemies with strategy.” In the latest Field Poll, Brown led Kashkari by 16 percentage points.

(Bonus: Try to find the words “Goldman Sachs” anywhere in Kashkari’s official campaign biography.)


With China online e-commerce colossus Alibaba set to begin a road show so widely anticipated that it would put rock bands to shame, Bloomberg Television tonight hosts the broadcast premiere of a film about its formative years, “Crocodile in the Yangtze: The Alibaba Story.”

“For nearly 10 years, I watched from the inside as the Internet brought China face-to-face with the West,” the director, Porter Erisman, writes on the film’s website. An American with degrees from Stanford University and Northwestern University’s Kellogg School of Management, Erisman worked as a vice president at Alibaba from 2000 to 2008.

His archival footage shows the early audacity of Alibaba founder Jack Ma as he set out to beat -- not just compete with -- his established Western counterparts.

“Our competitors are not in China, but in America’s Silicon Valley,” Ma says in one scene, shot in his apartment as he discusses his plans with friends. “So first, we should position Alibaba as a global website, not just a domestic website. Second, we need to learn the hard-working spirit of Silicon Valley. If we go to work at 8 a.m. and go home at 5 p.m., this is not a high-tech company and Alibaba will never be successful.”

In the field of information systems, he continues, “Chinese brains are better. All of our brains are better than theirs. That is the reason we dare compete with Americans. If we shows where Ma has gotten so far: 35th-richest man in the world, with a net worth of $21.9 billion.

The film airs on BTV at 9 p.m. EDT.


At first the hours seemed interminable. Amazingly, a full day passed with no answer, then two days.

A commercial jetliner filled with passengers had disappeared. No emergency radio call, no debris field, no flaming wreckage. We learned of radar pings and search arcs and fuel limits, and we weighed competing theories, all lacking evidence: the crew was involved, or terrorists had hijacked, landed and hidden the plane for future use.

Air and sea searches in the Indian Ocean yielded promising reports of floating objects, which only served to teach us how much unrelated junk is out there.

After three weeks, we were marveling at how long this was taking.

Our hope for answers lay in the black boxes and the race to find them before the batteries ran out for their locator “pings.” CNN even had a countdown clock on the estimated remaining battery life. That, too, came and went. And the debate began anew about whether the search zone was the right one after all.

Now -- achingly, uncannily -- it’s been six months since Malaysian Airlines Flight 370 went missing. And still, nothing.

“The science of air crash investigation -- and it is a very mature science -- abhors mystery,” aviation writer Clive Irving observes at the Daily Beast. “There were supposed to be no mysteries left. The passing of six months has more significance than simply a point on a calendar. It really is startling that not one fragment of an airplane that weighed 250 tons has yet turned up.”