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Despite being dead wrong on Europe, China, the U.S. economy, earnings, and the how the market would perform in 2013, the bear camp remains largely undeterred. Instead of admitting defeat, the current battle cry is that stocks are overvalued and as such, will soon succumb to an episode of mean reversion akin to what was seen in 2000-02.

State of the markets: Are stocks overvalued yet?

This larger crisis is the extraordinary degree of spending-side austerity undertaken by the public sector since the Great Recession officially ended in 2009. The figure below shows growth in real (i.e., inflation-adjusted) spending by federal, state and local governments in the years before and after recessions. It shows clearly that public spending following the Great Recession is the slowest on record, and as of the second quarter of 2013 stood roughly 15 percent below what it would have been had it simply matched historical averages.

Deal or No Deal on Shutdown and Debt Ceiling, Biggest Fiscal Policy Crisis Remains Unaddressed | Economic Policy Institute

“There’s going to be more of this to come,” Cohan says, suggesting the JPMorgan settlement will be the “template for other banks” that were big players in the mortgage-backed securities market, including Citigroup (C), Deutsche Bank (DB) and Royal Bank of Scotland (RBS).

JPMorgan “Just the First Domino”: Bill Cohan | Daily Ticker – Yahoo Finance

We measure the effect of an anti-predatory pilot program (Chicago, 2006) on mortgage default rates to test whether predatory lending was a key element in fueling the subprime crisis. Under the program, risky borrowers and/or risky mortgage contracts triggered review sessions by housing counselors who shared their findings with the state regulator. The pilot cut market activity in half, largely through the exit of lenders specializing in risky loans and through decline in the share of subprime borrowers. Our results suggest that predatory lending practices contributed to high mortgage default rates among subprime borrowers, raising them by about a third.

Economist’s View: Predatory Lending and the Subprime Crisis

It’s particularly hard for foreigners with whom I’ve interacted in recent months to grasp the idea that Obamacare is somehow implicated in this latest round of dysfunction. They view our health reform much as I do, as I wrote a few weeks ago: a technical solution to a hybrid public/private good problem, about as interesting and subversive as a utility company. How could this set of arcane changes to our health care delivery system possibly lead politicians to willingly default on our debt?

What’s Wrong with America? | Jared Bernstein | On the Economy

Despite having the highest wealth per adult in the world and a fairly even wealth distribution, according to the Credit Suisse Global Wealth Report, Switzerland is still seeing a growing wave of discontent over income inequality and executive pay.

$2,800 a month for every Swiss person …even if you’re in work

Funny: Japan didn’t seem to think that China was doing it a favor by buying its debt, even though Japan has a much higher debt ratio than we do.

Bowleseconomics versus Abeconomics by Paul Krugman

Typically absent from the claims about many “alternative treatments” are their risks. The significant harms that they can pose form the fabric of Paul Offit’s important and timely book.

Paul A. Offit’s Do You Believe in Magic, Reviewed: The Dangers | New Republic

Within six months on the market, the iPad started making serious inroads into hundreds of businesses and IT departments. In fact, in the iPad’s first year SAP purchased as many as 10,000 iPads for deployment in its IT programs and CEO Marc Benioff made the iPad the standard tablet in the company.

Why Microsoft’s Surface Pro 2 Should Make Apple Sweat | Tim Bajarin |

Emerging markets may have dodged a liquidity draining bullet with the U.S. Federal Reserve delaying its asset-purchase tapering plans, but the reprieve is only temporary according to Pimco’s Ramin Toloui.

Emerging market reprieve is only temporary: Pimco

A Seattle company called ClearSign Combustion has developed a trick that it says could nearly eliminate key pollutants from power plants and refineries, and make such installations much more efficient. The technique involves electric fields to control the combustion of fuel by manipulating the shape and brightness of flames.

Electric Fields Could Clean Up Power Plants | MIT Technology Review

We still do not know all the details of the tentative settlement or the evidence the government has against the bank. But the initial outburst of horror at the $13 billion figure is very likely unwarranted and appears to be based on a fundamental misunderstanding of how damages should be assessed in cases of financial wrongdoing.

The truth about that awful JPMorgan settlement – Yahoo Finance

Coordinated austerity in euro-area countries has stifled economic recovery and deepened the crisis across the currency bloc, according to a new technical paper prepared by an economist at the European Commission.

Paper by EU Economist Backs Austerity’s Critics – Real Time Economics – WSJ

The risk from saturated fat in foods such as butter, cakes and fatty meat is being overstated and demonised, according to a cardiologist.

BBC News – Saturated fat heart disease ‘myth’

Are China and Europe worried about overheating already? This rally’s been based on the two pillars of Europe and China getting better, along with the U.S. muddling along in a way that’s neither good enough to get revenue going nor bad enough to cause tightening.

Jim Cramer: Dark Clouds on the Horizon – TheStreet

“I’m finding out that a lot of my loyal readers were never really interested in my analysis,” he said in an interview. “I spent over 10 years battling the reputation of being a radical permabear. Now I make a subtle shift and I’m fighting the perception that I’m a permabull,” or an analyst who maintains a positive stance in every market.

World War Zirp | FT Alphaville