This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Jason Clenfield and Norihiko Kosaka (Bloomberg): US risks Japan-like “lost decade” on stimulus exit, Koo says, October 23, 2009. US officials contemplating an exit from record fiscal stimulus are in danger of repeating mistakes that plunged Japan into its lost decade of stagnant growth, according to Richard Koo of Nomura Research Institute. “This isn’t a cold, its more like pneumonia,” said Koo, author of “Balance Sheet Recession,” a 2003 book about the malaise that hit Japan after its stock and real-estate markets crashed in 1990. “We still need more government spending,” he said, adding it could take “three to five years to get out of this mess, even under the best of circumstances.”

• Brad DeLong (Caijing.com.cn): A moment too soon after the

This post provides links to a number of thought-provoking articles I have read over the past few days that you may also find of interest.

• Andy Kessler (The Wall Street Journal): The Bernanke market, July 16, 2009, We won’t get real growth until Congress and Treasury get policy right.

• Irwin Stelzer (Times Online): American account: Barack Obama’s cures may just kill any recovery, July 12, 2009.

• Paul McCulley (Pimco - Global Central Bank Focus): What if?, So what should Washington do, if and when - and I stress “if and when”; I’m not making a forecast here! - private sector aggregate (nominal) demand growth looks like it’s going to languish in Japan style for the indefinite future? The answer: Take one cup of Krugman’s advice for Japan and two cups of Bernanke’s advice for Japan - responsibly

This post provides links to a number of interesting articles I have read over the past few days (while touring through Europe) that you may also enjoy.

• William Pasek (Bloomberg): “Buy China” pesticide withers those green shoots, July 3, 2009. So you think China’s 6% growth will power a global recovery. Think again.

• Nouriel Roubini (Forbes): Will the global warming bill cool the global economy? July 2, 2009. Assessing the effects of cap-and-trade.

• Paul Krugman (The New York Times): That ’30s show, July 2, 2009. O.K., Thursday’s jobs report settles it. We’re going to need a bigger stimulus. But does the president know that?

• Mohamed El-Erian (Financial Times): American jobs data are worse than we think, July 2, 2009. What if the US unemployment rate rises above 10% and stays there for an extended

After pointing individual investors to all-bond portfolios for 25 years, adviser and author views new research by Rob Arnott as ground-breaking. 

Stan Richelson and his wife, Hildy, run Scarsdale Investment Group Ltd. The Blue Bell, Penn.-based firm oversees about $130 million in U.S. bond portfolios for individual investors. The pair has written four books on the topic of investing in bonds. For the past 25 years, they've been advocating the case for bonds versus stocks as core holdings.

IndexUniverse.com's Murray Coleman recently caught up with Stan Richelson to discuss prospects for bonds going forward and their proper place in long-term portfolios.

IU: Did Rob Arnott's recent article in the Journal of Indexes validate work you've been doing for years?

Richelson: It was the best article I've ever read. It has not only validated our approach, but it has improved my life immensely.

IU: How so?

Richelson: When clients of ours used

Research Affiliates' Rob Arnott follows up the article 'Bonds: Why Bother' by answering audience questions from his recent webinar. 

In a follow-up to his popular JoI article 'Bonds: Why Bother?,' Research Affiliates founder Rob Arnott partnered with the Journal of Indexes for a live webinar examining where investors should be looking for opportunity today.

As a bonus, Arnott has provided written responses to all the questions that were asked by the audience during the webinar. His answers follow below. (In some cases, for efficiency's sake, multiple similar questions on a single topic have been condensed into a single question.)

Audience Question: Given the prospect of heavy or hyper-inflation, how do you find a reasonable return that can keep pace? Do you have any expectations on how this may play itself out in the coming few years?

Rob Arnott: TIPS provide protection against inflation; as

BGI Sale Would Provide Big Boost To BlackRock, BNY Mellon

As negotiations continue on the sale of Barclays Global Investors, the two most widely discussed potential bidders—BlackRock Inc. and the Bank of New York Mellon—stand to gain a large immediate boost in assets if either one wins.

This Bloomberg News analysis pinpoints just how big each would become in terms of assets and the potential impact on the exchange-traded funds marketplace.

You can read the story here.

Arnott Article On Bonds Stirring Debate

In today's Wall Street Journal, John Spence explores the debate stirred by Rob Arnott in his recent Journal of Indexes story about the long-term benefits of bonds as opposed to stocks.

The story, which originally appeared at MarketWatch.com, talks to others who take the opposing side.

If you're a subscriber to the WSJ, that story can be found here. If you're not, a free version at

In a follow-up to his ground-breaking JoI article, 'Bonds: Why Bother?,' Research Affiliates founder Rob Arnott discusses the best asset allocation mix for investors today.

In a follow-up to his ground-breaking JoI article, 'Bonds: Why Bother?,' Research Affiliates founder Rob Arnott partnered with the Journal of Indexes for a live webinar examining where investors should be looking for opportunity today.

IndexUniverse.com is proud to present a  full, recorded video version of the webinar here.

A PDF of Arnott's Arnott's Powerpoint presentation is also available. 

In a follow-up to his JoI article 'Bonds: Why Bother?,' Research Affiliates founder Rob Arnott discusses the best asset allocation mix for investors today.

In a follow-up to his ground-breaking JoI article 'Bonds: Why Bother?,' Research Affiliates founder Rob Arnott partnered with the Journal of Indexes for a live webinar examining where investors should be looking for opportunity today.

A PDF of Arnott's PowerPoint presentation is also available. 

Here are five reasons I don't believe this rally has legs ... and why I find XLF's 10% run today rather incredible.

Well, Matt—if your research holds any water, today must have been a BOOM day for the (RAFI) fundamentalists out there. And this huge rally for XLF? I don't believe it for a second. In fact, the same dangerous impulses that led me to buy XLF at $15.07 (and see it promptly drop to below $6) are urging me to sell now that we're almost touching $12. After all, in that October binge of ETF buying (heavy on XLF and FXI—that would be the SPDRs Financials and the FTSE/Xinhua iShares for the less-ETF-focused among you), I'm actually AHEAD right now ... after a disastrous start.

In this environment, I'm looking forward to talking to Rob Arnott this Thursday at 1:00 p.m., where he'll be doing a webinar

Well done, Jim: Rob Arnott invites you to his board meeting, and you call him out for under-performance.

(See Jim's blog about the Research Affiliates board meeting here.)

Remind me not to invite you over to dinner anytime soon.

I'm kidding, of course: Rob can take it, and there's no getting around the terrible performance of the RAFI indexes in 2008. The indexes made a big bet on financials, and we all know how that turned out.

Recently, however, that relative performance has reversed. Over the past month, the fundamentally weighted PowerShares FTSE RAFI US 1000 ETF (NYSEArca: PRF) is up more than 20%, while the cap-weighted iShares S&P 500 ETF (NYSEArca: IVV) is up just 11%. That's a huge performance gap for a single month.

What's driving the outperformance? If you approach it from a sector level, you can see that PRF is making a few concentrated bets.