Below are my full notes and highlights from the Wall Street Journal, January 7-8, 2017.

1. Examples of Standard Causes of Human Misjudgment: VW, Wells Fargo, and Theranos have each exhibited;

• Incentive Causes Bias
• Consistency and Commitment
• Reinforcements
• Is it possible Social Proof is also involved?

2. Very few funds put their money where their mouth is.  The Fulcrum Fee: “Fewer than one in 36 funds and less than $1 out of every $14 in total assets charges performance based fees.”

3. Trump Tax Plan could lead to significant inflationary pressures on consumer retail.  “Consumer apparel prices could rise as much as 15% from the tax plan”

4. Boeing: Prolonged boom since 2010 has stalled.  “Airline profits and jet purchases are closely tied to global economic growth.”

5. There’s a big increase in demand for missiles as a result of 1) ISIS 2) A reluctance to put men in the field 3) The increased precision of modern day missiles.

 The military will pay any price for extra precision: “Extreme accuracy is the difference ‘between hero and zero’ and a matter of American values. ‘You either get it exactly right, or you get it exactly wrong,’ he said. ‘In the business of modern warfare, the expectation is precision on every strike.  So through that lens, the cost factor is less of an issue.'”

6. Brokers are acting more like financial advisers: “The value-add isn’t ‘I bought a great investment’ anymore,”…”Its ‘I’m going to be your personal CFO, your adviser, and look at everything I can offer you.”

7. Extreme times call for extreme measures? To fight currency short-sellers: “Hong Kong’s overnight lending market for the Yuan jumped to 61.3% on Friday, the highest in a year and the second highest level on record.”

P.S. Why does China’s monetary policy remind me of Teddy KGB from Rounders?

“I will not be pushed around!”

“I bet it all…”

8. China takes a bite out of Apple: Apple posted its first annual revenue decline in 15 years, largely as a result of a sharp slowdown in China sales.  “Revenue in greater China, fell 17% in the fiscal year, compared with growth of 84% the prior year.”

9. Don’t find yourself in a Brazilian prison.  You won’t like it.

10. Afghanistan: Insurgents now control more territory than at any time since 2001.

11. Gen. Michael Flynn said he was fired for “speaking truth to power about the inadequacies of the nation’s national security preparedness.”

12. Standard Causes of Human Misjudgment: Government deregulation of the energy sector has led to a 20% increase in oil prices.   This has sparked Riots in Mexico resulting in 2 dead and 300 stores looted, Rioters are exhibiting cases of;

• Deprival Super-reaction syndrome
• Social Proof

13. Standard Causes of Human Misjudgment: Hikers are destroying cages meant to exterminate non-native predators of New Zealand birds.  These (presumably) nature-loving hikers are exhibiting;

• Pavlovian association
• Disliking distortion
• Over-influence from extra-vivid evidence.
• Poor ability to weight positives and negatives.

14. Bootleg version of Fentanyl (50 times the potency of heroin) is commonly made in China.  Leading to increase in opiod-related deaths.