A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
European gross domestic product results released Thursday morning did not involve a lot of good news. Overall first quarter economic growth for the euro zone was reported at 0.2 per cent, when analysts expected 0.4 per cent.
Germany, buoyed by a currency kept relatively low by the sluggish economies of other member nations, saw stable growth of 0.8 per cent. France saw no growth at all and Italy's economy crumbled by an annualized -0.5 per cent per cent.
Inflation remains extremely low in the region and the spectre of a deflationary spiral is the focus of economists' this morning. University of California economics professor Barry Eichengreen's latest for Project Syndicate addresses Europe's ongoing struggles.
Former U.S. Treasury Secretary and almost-Fed chairman Larry Summers has his detractors, but no one ever said he wasn't smart. Mr. Summers' extended review of Thomas Piketty's Capital in the 21st Century is being lauded as the definitive take by Bloomberg's Tom Keene, among others.
The review is extremely positive, but the one central criticism reflects my main question with Piketty's thesis, namely whether capital is able to generate sustained, high returns when it is abundant. In short, when the moneyed class, including corporations, has more cash than they know what to do with, eventually the opportunities for profitable investment should decline.
Mr. Summers' paper also includes a stunning fact about U.S. unemployment. "There are more American men on disability insurance than doing production work in manufacturing," he writes. The explosion in the number of Americans on disability was covered brilliantly in National Public Radio's "Unfit for Work" series last year.
Modern Portfolio Theory took a thrashing from Institutional Investor magazine, which compares its adherents to The Flat Earth Society:
"The central flaw of [Modern Portfolio Theory] is that it's a theory with few practical applications. This analytical portfolio framework is used not by analysts or portfolio managers but only by academics and an army of consultants, (neither group invests for a living)."
Diversion: A lot of people are struggling, and it's easy to forget there are amazing, potentially transformational scientific studies being done at the same time. Here's one suggesting the U.S. Interstate highways can be paved with solar panels.
Follow Scott Barlow on Twitter at @SBarlow_ROB.
Scott Barlow