- “The key to a sustainable recovery and robust economic growth is to get companies to start investing in America,” a recent Washington Post op-ed says. But Big Picture blogger Barry Ritholtz disagrees with that premise. “Since we know that personal consumption expenditures comprise 70% of GDP, I’m not sure why ‘getting companies to start investing’ would be considered the key,” Ritholtz writes. “The demand problem we have on our hands is what is keeping companies’ spigots closed.”
- S&P 500′s 5% gain last week comes on the heels of a 5% drop the week before, highlighting “one more example of how sentiment in this market turns on a dime,” Bespoke Investment Group says. “Sentiment heading into the current earnings season is certainly a lot less positive than it was last quarter.”
- Google (GOOG) launches App Inventor for Android, a do-it-yourself tool that makes it easy for anyone – programmers and non-programmers — to create mobile applications for Android-powered smartphones. App Inventor should make Android more accessible — and useful — to more developers, a key constituency as Google vies with Apple (AAPL) for dominance in the emerging smartphone market.
- Deflation chatter seems to be ramping up of late, especially as worries over a double-dip gain steam. “If you have loads of cash and no debt, falling prices sound wonderful,” Tom Petruno writes at LA Times’ Money & Co blog. “But the danger is that a broad deflation could cause many people to stop spending and hoard cash, figuring that they could get whatever they wanted for less if they just waited.”
- Amid all the banter between bulls and bears, it seems like both parties have actually been right in 2010, Joshua Brown notes at The Reformed Broker. Bulls are right because stocks are still in the same bull market since March 2009, he says. But bears are also correct because everything’s down year-to-date except gold, silver, treasurys and the yen. Calls for more stimulus make sense, but concerns about deficit-spending are also justified. “Only the future can serve as judge.”
- Flight to safety and quality is the biggest reason foreigners, mutual funds, banks and households keep increasing their Treasury holdings. “But, unless financial conditions deteriorate further, I wonder why there would be a similar increase in demand for Treasury debt over the next two years,” James Hamilton writes at Econbrowser. “What I’m having more trouble seeing is who is going to buy the additional $8 trillion in net new debt that would be issued over the next decade under the CBO’s alternative fiscal scenario.”
- “There’s an old adage that tapes that are oversold are bought on bad (but not horrid) news while tapes that are overbought are sold on good (but not great) news,” Minyanville’s Todd Harrison says. “Through that lens, last week’s rally made the upcoming earnings entirely more difficult to game.”
- Google (GOOG) has secretly invested $100M-$200M in social gaming behemoth Zynga, TechCrunch reports, which will be the cornerstone of a new Google games service that will launch later this year. TechCrunch points out Google has posted a job opening for a product manager who will be responsible for developing Google’s games commerce product strategy. Both companies declined comment.
- “As we evaluate financial reform and political change, we should keep in mind that it is not 2008 that we must struggle to prevent,” Steve Randy Waldman writes at Interfluidity. “It’s 2006 that was the worst of times, the piranha were feeding while we splashed and giggled in our water wings.”
- “Many individual investors were tiptoeing back into stocks in the spring,” WSJ says. “Now, they’re running for cover again.”
