EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • naked capitalism

    The Real Problem with High Frequency Trading

    From Craig Heimark, a recovering derivatives trader, and Yves Smith The media firestorm over high frequency trading has flagged some legitimate concerns but misses the real issues. While Michael Lewis’ book Flash Boys is sensationalistic and simplistic, it may goad regulators into action, particular since many knowledgeable observers have been making similar arguments for years. At its foundation, high frequency trading is time-based arbitrage (which is different that statistical arbitrage which involves the real assumption of risk) and that is simply front running. It has become popular to demonize the high frequency trading crowd, but they aren’t the proper targets. The fact that high frequency trading exists at all is the result of poor regulation. Now so...more

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  • The Housing Bubble Blog

    Bits Bucket for April 21, 2014

    Post off-topic ideas, links, and Craigslist finds here.

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  • naked capitalism

    Ilargi: Ukraine – Part of United States’ Desperate Solutions For Not Sinking Alone?

    Yves here. While most of the commentary on the Ukraine has focused on geopolitical issues, and on the role of the neocons in the Obama Administration, this post looks at the Ukraine conflict from a different angle. It contends the drivers are actually economic (not that economics and politics are necessarily distinct). The source that Ilargi relies on is a bit screechy and appears to labor under the misapprehension that the US needs foreign lenders to finance its deficit spending. But if you can read past those shortcomings, I hope you’ll find it also raises some provocative issues. By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth LEAP2020 is a European political/economic research institute that doesn’t shy ...more

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  • Macro Man

    Counterfactuals

    The past week has been notable for the victory laps taken by central banks currently residing under the thumb of Professor Moriarty Woodford.  In last week's speech to the Economic Club of New York, Janet Yellen noted that forecasts for unemployment were largely proven correct- but only with a healthy dose of QE to grease the wheels.   Latterly, Martin Weale at the Bank of England has performed an exhaustive study suggesting that QE worked even better than originally thought.All of this is well and good, and the Weale paper is full of Bayesian vector autoregressive fun, if you're into that sort of thing.  The problem with these sentiments, of course, is that they are based in one way or another on the very types of econometric models that have faile...more

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  • naked capitalism

    Tom Engelhardt: Too Big to Jail? Why Kidnapping, Torture, Assassination, and Perjury Are No Longer Crimes in Washington

    By Tom Engelhardt, a co-founder of the American Empire Project and author of The United States of Fear as well as a history of the Cold War, The End of Victory Culture, runs the Nation Institute’s TomDispatch.com. His latest book, co-authored with Nick Turse, is Terminator Planet: The First History of Drone Warfare, 2001-2050. Originally posted at TomDispatch How the mighty have fallen.  Once known as “Obama’s favorite general,” James Cartwright will soon don a prison uniform and, thanks to a plea deal, spend 13 months behind bars.  Involved in setting up the earliest military cyberforce inside U.S. Strategic Command, which he led from 2004 to 2007, Cartwright also played a role in launching the first cyberwar in history — t...more

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  • The Skeptical Speculator

    China's home price inflation cools, Japan's trade deficit surges

    China's home prices continued to slow in March, according to a report on Friday. While data from the National Bureau of Statistics showed that home prices increased year-on-year in 69 of the 70 cities monitored, unchanged from February, calculations by Reuters showed that average new home prices in the 70 cities rose 7.7 percent in March from a year earlier, down from the previous month's 8.7 percent increase. From the previous month, prices rose 0.2 percent in March, slowing from the 0.3 percent increase in February. Meanwhile, a report on Monday showed that Japan's trade situation has continued to deteriorate. Its trade deficit quadrupled from a year ago to 1.45 trillion yen in March. While Japan's exports rose 1.8 percent, imports surged 18.1 percent as a result of h...more

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  • Real Time Economics

    Business Economists See Brighter Outlook for Job Growth

    Business economists’ outlook for near-term hiring strengthened this spring to the highest mark in nearly three years, a new survey found. The poll by the National Association for Business Economics said 43% of corporate economists expect hiring within their firm or industry to increase during the next six months. That was the most optimistic forecast since July 2011. The latest poll found that only 8% of economists expect businesses to cut payrolls over the next two quarters. A projected increase in hiring raises the prospect that the unemployment rate could inch down toward its historical average later this year. The unemployment rate — 6.7% in March — has fallen more than a percentage point since the start of last year, but remains elevated compared to the avera...more

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  • Steve Keen's Debtwatch

    A China Bubble?

    There is no end of commentary about China’s real estate bubble, with an even split between those who believe it may pop at any moment, and others who argue it never will. The alternative ploy — that it doesn’t exist — doesn’t get same airing that it did in the US before the subprime crash. Instead, the “it’s a bubble, but it won’t burst” case is that the bubble is too important to China’s continued growth to be allowed to burst, and — unlike the US — China has the wherewithal to keep it going, at least for a while. (See There will be no Minsky moment for China, March 25; China Can’t Afford to Let Its Housing Bubble Pop, January 30;Templeton Braving China’s Housing Bubble, February 28; Chinese Property Sector Will Not Implode Like Ame...more

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  • The Big Picture

    The Pay at the Top

    From the New York Times: Here are 100 of the highest-paid chief executives in American business. The list comes from the Equilar 100 C.E.O. Pay Study for 2013, which ranks the compensation of chief executives of the 100 largest publicly traded United States companies, based on revenue, that filed proxies by April 4. Click for an interactive chart. Source: NY Times ...more

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  • Calculated Risk

    Sunday Night Futures

    An article from Tim Logan at the LA Times on a subject I've discussed with several people via email: Student debt holds back many would-be home buyers Of the many factors holding back young home buyers — rising prices, tougher lending standards, a still-shaky job market — none looms larger than the recent explosion of college debt.The amount owed on student loans has tripled in a decade, to nearly $1.1 trillion, according to the Federal Reserve Bank of New York. People in their 20s and 30s — often the best-educated and highest-earning among them — owe most of that tab. That is keeping a crucial segment of home buyers on the sidelines, deferring one of the traditional markers of adult success.Monday:• At 8:30 AM ET, the Chicago Fed National Activity Index for M...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Pragmatic Foundations for an Austrian Home

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  • Dr. Housing Bubble Blog

    A mortuary of 7,000,000 foreclosures and counting: Nation still faces 9.1 million properties that are seriously underwater.

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  • DealBook

    Italian Bank Increases Planned Share Sale to $6.9 Billion

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  • DealBook

    Airbnb Said to Close Fund-Raising Deal With Group Led by TPG

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  • The Mises Economics Blog: The Circle Bastiat

    Record Skyscrapers Planned

    Continental record high skyscrapers have occurred in Europe and more recently in China and North America. Such regional or continental records indicate looming economic crisis as did happen in Europe and seems to be unfolding in China and North America. More recently we have learned that world record setting skyscrapers are planned for China and Saudi Arabia. World record setting skyscrapers are a indication of a looming world economic crisis. The Telegraph reports: The Kingdom Tower in the coastal city of Jeddah will measure 3,280 feet (1km), some 568 feet (173 meters) taller than the current Guinness world record holder, Dubai’s Burj Khalifa, which stands at 2,716 feet (827 metres) . “Skyscrapers and Business Cycles” QJAE (2005) See also: “Paging...more

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  • A Fistful Of Euros

    Firmly Anchored Expectations, No Postponement of Purchases?

    This article from former European Central Bank board member Jürgen Stark (Doomsayers risk a self-fulfilling prophecy) has been occasioning a lot of commentary over the last week or so. According to Stark, the current deflation debate “lacks three important points: an in-depth analysis of the forces driving inflation down; a clear distinction between “benign disinflation” and “bad deflation”, with a spiral of decreasing prices, wages and output triggered by negative expectations; and a better understanding of the European Central Bank’s approach”. Perhaps the most cited extract is the following: “It is likely we are living in an extended period of price stability. This is good news. It boosts real disposable income and will eventually support...more

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  • The Housing Bubble Blog

    The Repetition Of Past Behaviour

    Readers suggested a topic on the current markets. “How will the (already started) decline play out this time? Jingle believes in some ungraphable pattern like a parabolic plateau, but things aren’t quite the same as last time. This crash seems more like squeezing out the investors and flippers and starting back with the decline on the regular owners that should have proceeded further 2 yrs ago. Not as many foreclosures, not the increasing unemployment?” “I’d be happy to see 2011 prices in my area again, but this time with houses you could actually buy rather than ones being held in reserve for some real estate investor group. Oxide thinks if this happens then the investors will come back.” One said, “More interest rate cuts ? Oh wait th...more

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  • Calculated Risk

    WSJ: Slight Easing of Mortgage Credit Standards

    From Nick Timiraos and AnnaMaria Andriotis at the WSJ: Mortgage Lenders Ease Rules for Home Buyers in Hunt for BusinessWhile standards remain tight by historical measures, lenders have started to accept lower credit scores and to reduce down-payment requirements....Another sign that banks could get less picky: Credit scores for borrowers seeking conventional mortgages also are easing. Scores on purchase mortgages stood at 755 in March, down from 761 a year earlier, according to data from Ellie Mae, a mortgage-software provider. Those on purchase loans backed by the FHA dropped to 684, compared with 696 one year earlier. ...Smaller lenders are accepting even lower scores. Average credit scores on purchase loans closed through a consortium called LendingTree fell to 679 i...more

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  • The Big Picture

    What Goes Up, Must Come Down?

    >   My Sunday Washington Post Business Section column is out. This morning, we look at What’s gone up won’t always come down. The print version had the headline You might think the markets are ready for a breather after last year’s gains, but . . . Here’s an excerpt from the column: “You might think that after such a strong year, the markets might be due to “take a breather.” Perhaps a flat year is in order so last year’s gains can be “digested” — or so goes the popular assumption. And indeed, markets this year have ranged from flat to down a few percent. Some would go further and, because of the “Gambler’s Fallacy,” assume that markets are bound to go the other way and sell off. Those assumptions would be wrong. The data st...more

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  • The Mises Economics Blog: The Circle Bastiat

    The Man Who Coined “Anarcho-Capitalism”

    Michael Oliver, the man who coined the term Anarcho-capitalism is interviewed on Jeff Berwick’s Anarchast. Oliver is now a market technician, but over 40 years ago he wrote a book: The New Libertarianism: Anarcho-Capitalism. In the book he shows that Ayn Rand’s objectivism needs the economics and political theory of Murray Rothbard. Oliver and Berwick talk about the history of the movement, the current state of the movement, the election of 2016 and optimistically conclude that it actually all began with Lew Rockwell! Correction: It is probably Rothbard who coined the label. ...more

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  • The Big Picture

    10 Sunday AM Reads

    Kick your feet up and relax a moment with these reads: • Don’t let market pundits lead you astray (MarketWatch) • Top hedge funds are taking a hit on the tech downturn. (WSJ) • Rogoff talks financial crisis (Yale Daily News) • The Rise and Fall of Gold (QuickTake) • Mutual funds are bypassing IPOs and going straight for the main course (Quartz) • Now is the time to rebuild our national infrastructure (Boston Globe) • Seasoned home buyers approach purchasing process much differently, survey shows (WSJ) • The complete guide to structuring your ideal work day (Quartz) • The Many Deceptions at the Heart of the Internet (New Yorker) • Why Yahoo’s Not Going To Steal The Search Default For iPhone Away From Google (Search Engine Land) He...more

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  • Abnormal Returns

    Sunday links: lucky or smart

    Quote of the day Ron Lieber, “As with any investor, we simply cannot know ahead of time whether a high-performing mutual fund manager or investment adviser is lucky or smart, let alone whose smarts and luck will last for the half-century or more that we all intend to be investors.”  (NYTimes) Chart of the day Breadth help up pretty well during the correction.  (StockCharts Blog) Smart beta debate Why smart beta funds are not a substitute for index funds.  (Burton Malkiel) All investors, despite their claims, are active to some degree.  (Pragmatic Capitalism) Four criteria by which you can evaluate any strategy: passive or active.  (Millenial Invest) Strategy Jeff Miller, “Investing is not like a poker game, where you go “all in” or co...more

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  • Abnormal Returns

    Top clicks this week on Abnormal Returns

    Thanks for checking in with us this weekend.  Here are the items our readers clicked most frequently on Abnormal Returns for the week ended Saturday, April 19th, 2014. The description reads as it does in the relevant linkfest: Remember the “Rule of 20“?  (Bloomberg) A sign that the robo-advisors are on to something.  (NYTimes) Great traders often have a “quirky” approach to markets.  (TraderFeed) If you know where the 10 year is going…. (Market Anthropology) “The tape is not well…”  (Phil Pearlman) Trading is a “team sport.” A list of worthwhile sites for traders.  (TraderFeed) On the high cost of procrastination.  (Dan Ariely) What a hedge fund failure looks like.  (All About Alpha) Four steps to avoid money losing behaviors.  (Chuck Jaffe...more

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  • The Housing Bubble Blog

    Bits Bucket for April 20, 2014

    Post off-topic ideas, links, and Craigslist finds here.

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  • The Aleph Blog

    Book Review: The Death of Money

    This is a hard book to review. I have respect for the author, and most of his opinions.  But extraordinary claims require extraordinary proof.  There is evidence here, but not extraordinary proof.  I agree that we are in a bad spot, and that there is reason to be cautious.  To claim that the current international monetary system will disappear by 2020 or so requires more than the book delivers.Let me begin by saying the book is worth buying.  It will make you think.  Thinking is a valuable exercise in which few engage.  Most of us imitate, which is far easier to do than thinking, and usually saves time on common issues.The author focuses on the weaknesses of US economic policy, but is less critical of bad economic policies being pursued around the world, with the...more

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  • A Dash of Insight

    Weighing the Week Ahead: Will Springtime Bring Some Optimism?

    Some weeks feature a contrast between past and future -- a possible inflection point. Here are the current elements: Important economic data with a forward look; Earnings news from major companies reporting on Q114; Corporate conference calls explaining the outlook for future earnings; and finally Economic implications for improved economic growth and business conditions worldwide. It is a big week for news and data. Prior Theme Recap Last week I expected the theme to emphasize volatility. The market was at interesting technical levels and there was plenty of news to push it one way or the other. In a sense I was right about the theme, since the talking heads made the moderate crossings of "unchanged" seem like big news. The volatility cocktail was more like a Shi...more

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  • Calculated Risk

    Unofficial Problem Bank list declines to 521 Institutions

    This is an unofficial list of Problem Banks compiled only from public sources.Here is the unofficial problem bank list for April 18, 2014. Changes and comments from surferdude808: An expected update from the OCC on its recent enforcement action activity contributed to a noticeable reduction in the Unofficial Problem Bank List this week. After nine removals, the list stands at 521 institutions with assets of $168.9 billion. A year ago, the list held 781 institutions with assets of $288.5 billion.Finding their way off the list through merger were National Bank of Earlville, Earlville, IL ($57 million) and Liberty Savings Bank, F.S.B., Pottsville, PA ($23 million). Actions were terminated against Eastern Savings Bank, FSB, Hunt Valley, MD ($425 million); Phoenixville Fe...more

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  • Abnormal Returns

    Saturday links: systems vs. goals

    The weekend is a great time to catch up on some posts that were either too long or simply didn’t fit in during the week. Hope you enjoy! Investing “Over the long term”; doesn’t mean “always.”  (Bason Asset) Things that matter to investors and things that don’t.  (A Wealth of Common Sense) When it comes to your finances you should focus on systems vs. goals.  (Morgan Housel) On the differences between professional and amateur investors.  (Above the Market) Eddy Elfenbein talks market history.  (Crossing Wall Street) Research Does rebalancing really pay off?  (Advisor Perspectives) The home bias phenomenon may slowly be ebbing.  (SSRN via @jasonzweigwsj) Two centuries of trend following.  (arXiv via @quantivity) Personal financ...more

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  • The Mises Economics Blog: The Circle Bastiat

    The Hidden Motive Behind Quantitative Easing

      Foreign individuals and businesses long ago cut back on their purchases of U.S. bonds. Their place was taken by foreign central banks. The central banks simply created money in their own currency and used it to buy our bonds. The Federal Reserve always knew that we couldn’t rely on foreign central banks to buy our bonds forever. This may be the main reason it began the program called quantitative easing, in which the Fed created money out of thin air specifically to buy back U.S. debt. Quantitative easing may have been intended to be a kind of insurance policy. If foreign central bank buying of U.S. bonds collapsed, the Fed would already have a program in place to buy them back itself. The Fed  said that quantitative easing was meant to create U.S. jobs, but t...more

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  • The Capital Spectator

    Book Bits | 4.19.14

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  • The Aleph Blog

    Sorted Weekly Tweets

    Stocks & IndustriesInvest In Stubs, Spin-Offs And Liquidations For Alternative Returns http://t.co/ccezep0K9Y Cites a Gabelli article http://t.co/xTrqEfmQeq $$ Apr 19, 2014Real Estate Management Better Than Owning Real Estate? http://t.co/IFaDLiwTRa Sometimes yes, sometimes no. Definitely adds more leverage $$ Apr 19, 2014Wells Fargo Securities Lending Lawsuit Ends in Settlement http://t.co/w3lSY4Cw8D Low margin business that can go badly wrong in a crisis $$ Apr 19, 2014Makani, a $GOOG subsidiary makes an airborne wind turbine that dramaticlly increases power generation efficiency http://t.co/0Fug49o7gC $$ Apr 18, 2014Google to Buy Titan Aerospace as Web Giants Battle for Air Superiority http://t.co/HjJ8wKtnjM Makes me think $GOOG has 2much $$ 2spend...more

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  • My voice and noise on subprime bank regulations

    There is, might really be unwittingly, a high treason going on, against the western world, against the Judeo Christian civilization.

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  • Real Time Economics

    Obama Aims to Energize Trade Talks in Japan Visit

    President Barack Obama’s visit to Japan and other Asian countries next week is intended to provide further impetus to Pacific trade negotiations that have bogged down over disagreements with Tokyo. U.S. President Barack Obama speaks with Japan’s Prime Minister Shinzo Abe in the Oval Office at the White House in February. AFP/Getty Images A senior administration official said Friday that talks with Japanese Economy Minister Akira Amari in Washington this week yielded some progress, but that considerable differences remain on the key outstanding issues including boosting access to Japan’s car and agricultural markets. Mr. Obama next week is visiting two countries — Japan and Malaysia — negotiating the Trans-Pacific Partnership with the U.S. and two countrie...more

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  • Real Time Economics

    Fed Bond-Buying Delivered ‘Significant’ Boost to U.S. Economy, IMF Researchers Say

    How much of a punch did the Federal Reserve’s easy-money policies pack? Quite a wallop, two economists say in a new paper published Friday by the International Monetary Fund. The U.S. Federal Reserve building in Washington AFP/Getty Images Former Fed Chairman Ben Bernanke famously quipped in his closing days that the problem with quantitative easing is that “it works in practice but it doesn’t work in theory.” Not all central bankers and economists have agreed, spurring a debate over the effectiveness of the Fed’s policies. Part of the problem was that it was difficult to determine the impact of bond-buying on borrowing costs. Some of the Fed’s own studies don’t find large gains from the central bank’s bond-buying programs. For example, San Francisc...more

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  • DealBook

    Poison Pill’s Relevance in the Age of Shareholder Activism

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  • The Capital Spectator

    Chicago Fed Nat’l Activity Index: Mar 2014 Preview

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  • Economix

    Mortgage Reform Is Worth the Small Extra Cost to Borrowers

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  • Economix

    Mortgage Reform Is Worth the Small Extra Cost to Borrowers

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  • The Skeptical Speculator

    Japanese consumer confidence falls, economic assessment lowered

    Japan has been hit by bad news for its economy. On Thursday, the Cabinet Office reported that its consumer confidence index fell to 37.5 in March, the lowest level since August 2011, from 38.5 in February. On the same day, the government cut its assessment of the economy in April, the first lowering since November 2012. On Friday, the Ministry of Economy, Trade and Industry reported that its tertiary industry index fell 1.0 percent in February, more than reversing the 0.9 percent increase in January....more

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  • The Aleph Blog

    The Good ETF, Part 2 (sort of)

    About 4.5 years ago, I wrote a short piece called The Good ETF.  I’ll quote the summary:Good ETFs are:Small compared to the pool that they fish inFollow broad themesDo not rely on irreplicable assetsStorable, they do not require a “roll” or some replication strategy.Not affected by unexpected credit events.Liquid in terms of what they repesent, and liquid it what they hold.The last one is a good summary.  There are many ETFs that are Closed-end funds in disguise.  An ETF with liquid assets, following a theme that many will want to follow will never disappear, and will have a price that tracks its NAV.Though I said ETFs, I really meant ETPs, which included Exchange Traded Notes, and other structures.  I remain concerned that people get deluded by the idea ...more

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  • The Capital Spectator

    US Economic Profile | 4.18.14

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  • Economix

    In Europe, Auto Sales Are Still Low, But They Are Rising

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  • Economix

    In Europe, Auto Sales Are Still Low, But They Are Rising

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  • FT Alphaville

    The Closer

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  • Dealbreaker

    Write-Offs: 04.17.14

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  • Dealbreaker

    Banker Who Used TARP Funds To Buy Florida Condo Isn’t Allowed To Be A Banker Anymore

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  • Dealbreaker

    Balyasny Asset Management Analyst Needs A Couple of Days Off In August

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  • DRS » Blog

    EU Reporting: it’s not all about the money

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  • DRS » Blog

    EU Reporting: it’s not all about the money

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  • Paper Economy - A US Real Estate Bubble Blog

    Hong Kong Bubble?: Hong Kong Residential Property Prices January 2014

    The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in January, the price of residential properties declined 2.45% since December falling 1.30% below the level seen in January 2013. Clearly, the latest data is indicating a notable pullback in prices coming with the first year-on-year declines seen since 2009.  It will take some more data in order to see the extent of this pullback but with recent headlines indicating that China officials are loosening property and lending standards in order to control the downside risk, it appears that we may be seeing the beginnings of a notable pullback.The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale meth...more

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  • FT Alphaville

    Larry Summers on forwarding the Doozer economy

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  • FT Alphaville

    Bonds for the long run

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  • Macro Man

    Go on, you know you want to

    "Go on, you know you want to."How many times over the last few years have macro punters contemplating a sale of the euro heard that voice inside their heads?  From the sovereign crisis to Cyprus, from Fed tapering to ECB QE,  there have been a myriad of (apparently very good) reasons to sell EUR/USD, and yet here we are, knocking on the door of 1.40.  Like the devil on Larry Kroger's shoulder, the voice looks at the chart and says it again."Go on, you know you want to."It's a siren song that's hard to resist, particularly now that the ECB has joined the chorus.  In the absence of a ship-mast against which to lash themselves, punters would do well to examine some of the relevant narratives to determine whether it's a wise course to give in.1) The 'Jap...more

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  • The Skeptical Speculator

    US stocks rise for third day on positive economic data, China's economy slows

    US stocks rose on Wednesday, with the S&P 500 rising 1.1 percent to cap its best three-day rally in two months. The higher stock prices were supported by economic reports on Wednesday. The Federal Reserve's latest Beige Book released on Wednesday reported that the US economy continued to expand recently. Other US economic data on Wednesday supported that view. Factory production rose 0.5 percent in March, helping to push total industrial production up 0.7 percent. Housing starts rose 2.8 percent in March but building permits fell 2.4 percent. Earlier on Wednesday, China reported that its economy grew 7.4 percent in the first quarter from the previous year, down from 7.7 percent in the fourth quarter. However, March data showed that industrial production rose 8.8 percent...more

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  • Economix

    The End of Our Financial Illusions

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  • Economix

    The End of Our Financial Illusions

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    A Finalized Basel Rule: News and Views

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  • Dr. Housing Bubble Blog

    Mirror, mirror on the wall, tell me what two counties are the bubbliest of them all. Orange County and Los Angeles County. Southland homes sales reach 6 year low while median price hits 6 year high.

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  • DRS » Blog

    It’s a mad, mad world

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  • DRS » Blog

    It’s a mad, mad world

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  • DRS » Blog

    MiFiD II- the real work begins

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  • DRS » Blog

    MiFiD II- the real work begins

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  • The Baseline Scenario

    Rumsfeldian Journalism

    A

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  • A Fistful Of Euros

    It’s not like this was a surprise

    Or, why reading David Remnick is nearly always a good idea: I spoke with Georgy Kasianov, the head of the Academy of Science’s department of contemporary Ukrainian history and politics, in Kiev. “It’s a war,” he said. “The Russian troops are quite openly out on the streets [in Crimea], capturing public buildings and military outposts. And it’s likely all a part of a larger plan for other places: Odessa, Nikolayev, Kherson. And they’ll use the same technique. Some Russian-speaking citizens will appear, put up a Russian flag, and make appeals that they want help and referendums, and so on.” This is already happening in Donetsk and Kharkov. “They are doing this like it is a commonplace,” Kasianov went on. “I can’t speak for four million people, but ...more

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  • VIX and More

    The Correction As Seen in the ETP Landscape

    Since stocks bottomed in March 2009, I have periodically been publishing an SPX pullback table and occasionally a plot of all those pullbacks and their duration. The recent selloff in stocks, however, has been anything but an SPX pullback. I toyed with the idea of presenting comparable data for the NASDAQ Composite or NASDAQ-100 Index (NDX), but here again, the selling has been disproportionate in some areas of the NASDAQ universe, even though it has been hit harder than the SPX. This time around I have opted instead for a chart that shows the peak-to-trough drawdown across the equity ETP universe, focusing on sector groups that I believe are among the most important to watch. [source(s): Yahoo, VIX and More] The data above cover only 2014 and indicate the maximum...more

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  • Macro Man

    Holy Whiplash, Batman!

    Holmes and Watson have repaired to Baker Street for a well-earned break, leaving Macro Man to confront the rather more prosaic task of making sense of this week's price action.  With school holidays on either side of the Atlantic and Easter coming this weekend, it's probably safe to say that neither staffing levels nor market liquidity are particularly high at the moment.Even with that qualification, Tuesday's price action was a little crazy.   The data, such as it were, was generally negative for liquidity (and therefore risk assets): a higher CPI and somewhat weaker Empire do not exactly scream "buy stocks!" do they, particularly when equities (and equity managers) have been on the back foot recently.   Yet buy stocks they did, at least until ...more

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  • Felix Salmon

    The problems of HFT, Joe Stiglitz edition

    Never mind Michael Lewis. The most interesting and provocative thing to be written of late about financial innovation in general, and high-frequency trading in particular, comes from Joe Stiglitz. The Nobel prize-winning economist delivered a wonderful and fascinating speech at the Atlanta Fed’s 2014 Financial Markets Conference today; here’s a shorter version of what Stiglitz is saying. Markets can be — and usually are — too active, and too volatile. This is an idea which goes back to Keynes, if not earlier. Stiglitz says that in the specific area of international capital flows, “there is now a broad consensus that unfettered markets are welfare decreasing” — and certainly you won’t get much argument on that front from, say, Iceland, or Malaysia, or eve...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    The Illusion of Conscious Investing Decisions

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  • The Baseline Scenario

    Defending Kickbacks

    A

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  • Paper Economy - A US Real Estate Bubble Blog

    Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings April 2014

    Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that assessments of housing activity went flat in April with the composite HMI index climbing to 47 from 46 the prior month while the "buyer traffic" index remained unchanged at a level of 32.The recent pullback has been notable and while many are suggesting that inclement weather is responsible, only time will tell if this is the beginning of an ongoing downtrend for new construction or just a momentary pause.Looking at the data, it is fairly clear that the last year of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced mon...more

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  • Piggington's Econo-Almanac

    March 2014 Housing Data Rodeo

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  • Felix Salmon

    Private equity math, Nuveen edition

    The WSJ has the details of today’s big asset-management news: TIAA-CREF is buying Nuveen Investments for $6.25 billion. The sale marks the end of an ill-fated acquisition by private equity shop Madison Dearborn in 2007, just before everything fell apart. Madison Dearborn paid a total of $5.75 billion for Nuveen — a premium of 20% to its market value. As the WSJ says, the buyers used $2.7 billion of their own money to pay for Nuveen, and then borrowed the other $3.05 billion. But then things got tough: Within a year, Nuveen’s borrowing costs had risen as the financial crisis set in. The company eventually refinanced most of its buyout debt, which now stands at $4.5 billion and will be absorbed by TIAA-CREF. With the TIAA-CREF deal, Madison Dearborn will have at...more

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  • Ticker Sense

    April 14th Blogger Sentiment Poll

    Blogger Sentiment Poll Participants: 24/7 Wall St (N) The Aleph Blog (-) Biiwii (-) BullBear Trading Carl Futia (-) Dash of Insight (N) Dividend Growth Investor (+) Elliot Wave Lives On (+) Fallond Stock Picks (+) Global Economic Intersection (-)... ...more

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  • Dr. Housing Bubble Blog

    Population growth, migration, and real estate: Los Angeles County had the highest number of international migrant growth between 2012 and 2013 while Texas boomed with domestic migration.

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  • My voice and noise on subprime bank regulations

    You the young in Europe, you don’t find jobs? Thank your sissy bank regulators for that!

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  • My voice and noise on subprime bank regulations

    Do you hold any views on the issue of risk aversion vs. willingness to take risks in the Judeo-Christian tradition?

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  • A Fistful Of Euros

    Overtaken by events

    The draft blog post said to watch out for funny business in Melitopol and Mariupol, Ukraine. Those are the largest settlements along the coast between Russia and the Crimean peninsula, and sit astride the road that runs from Rostov-on-the-Don and the Crimea. Mariupol is the second-largest city in the Donetsk region, with a population of nearly half a million. Melitopol is also a crossroads: east to Russia, south to the Crimea, north to Zaporizhia and west to Kherson. Radio Free Europe/Radio Liberty’s daily summary noted: By early evening there were reports of skirmishes between pro-Russia and pro-Ukraine groups in Kharkiv, a tense standoff in Zaporizhia, and the occupation by pro-Russian activists of local government buildings in Makiyivka and Mariupol. Pro-Russia...more

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  • A Dash of Insight

    Weighing the Week Ahead: A Volatility Cocktail!

    This week brings the makings of an explosive volatility cocktail: Important economic data; Key Q1 earnings reports; Options expiration; A short trading week; and An edgy market environment. This is a very unusual combination, and the various elements will compete for attention. Prior Theme Recap Last week I expected the theme to test the divergence between economic fundamentals and what I called "fluff." The latter term referring to the collection of top-calling, market-rigging, crash charts, and "This is the big one" stories. This was one of my better forecasts. The economic news was excellent. The market was terrible. Everyone had an explanation – all different, all dubious. This is another good illustration of the reason for my weekly post – planning f...more

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  • Jeff Matthews Is Not Making This Up

    The Easy Thing About “The Hard Thing About Hard Things”

     The easy thing about “The Hard Thing About Hard Things,” Andreessen Horowitz co-founder Ben Horowitz’s book about “Building a business when there are no easy answers,” is reading it.  That’s because it’s funny, to-the-point, and way more well-informed by real-world experience than most books that give advice ever are.    Like the secret to being a successful CEO: “Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves.” And, “Managers must lay off their own people.   They cannot pass the task to HR or to a more sadistic peer.” And, “The job of a big company executive is very different from the job...more

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  • The Baseline Scenario

    What Might Have Been . . .

    A

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  • Felix Salmon

    Five explanations for Greece’s bond yield

    The biggest news in the sovereign debt world this week has come from Greece, which managed to sell some €3 billion in new 5-year bonds at a yield of just 4.95%. This is not what you might expect, given the macroeconomic situation: Greece’s debt currently stands at about 320 billion euros, or 175 percent of GDP. It is rated nine notches below investment grade at Caa3 by Moody’s. Standard and Poor’s and Fitch rank Greece six notches below investment grade at B-. So, how does one explain investors’ appetite to buy this debt at such low yields? Here are the top five reasons: 1. This is just part of a momentum trade. The Greece trade has been astonishingly lucrative for the past two years. Here’s the chart, from the WSJ: You could have bough...more

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  • footnoted*

    Hertz CFO being paid twice for one job

    We’re always fascinated by the revolving door — and how some executives seem to make money both coming and going. One of our favorite examples was back in 2011 when Synthes CEO Michel Orsinger was hired by Johnson & Johnson. We saw fresh evidence of that earlier this week when Hilton Worldwide filed its proxy. As most people know, Hilton went public in Dec. 2013. By the time the company filed its S-1 on Sept. 12, its CFO, Thomas Kennedy, had already been gone for a month. While his separation agreement was attached to an S-1/A that the company filed on Nov. 8, we doubt that most people picked up on it. Which brings us back to the proxy, which disclosed that Kennedy’s separation agreement tops out at $16.06m. That includes a payment of $1.06m for t...more

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  • A Dash of Insight

    Strategy in the Face of Volatility

    I planned to take tonight off since it is my Birthday and Mrs. OldProf is preparing my favorite dinner. On the other hand, I like to post whenever there is a market development that will get a lot of media buzz and contribute to investors being Scared Witless (TM OldProf). Please check out last year's post on this theme and remember how it played out. Here is the brief message: This is exactly what I said would be the theme of the week: Fluff or Fundamentals. If you have a list of stocks that you like, with appropriate price targets, you are happy to go shopping when the market provides the opportunity. It is a classic example of fundamental value stock analysis. If you have been following us with the Enhanced Yield approach – buying reasonable dividend stocks and...more

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  • Institutional Economics

    ECB to Adopt QE in H2 2014

    I have an op-ed in Business Spectator arguing that the ECB will likely resort to QE in the second half of this year. This will be a vindication of the long-standing criticisms of ECB monetary policy made by the new market monetarists. Inflation outcomes, nominal GDP and the euro exchange rate are all consistent with monetary policy having been too tight rather than too easy. The emerging divergence between ECB/BoJ and Fed monetary policy should set the stage for broad-based USD outperformance....more

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  • Emerging markets

    Capital controls in China are broken; Beijing faces a new 'impossible trinity'

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  • Steve Keen's Debtwatch

    A sudden conversion of property bubble doubts

    Back in the Olde Days, before the global financial crisis, when I was one of a handful raising the alarm, some of the most strident opposition to my opinion about what this might mean for housing in Australia came from Christopher Joye (who was then a Director at Rismark). We went head to head on many occasions, with me arguing that our prices were a debt-fuelled bubble, and Joye arguing that rising house prices simply reflected rising household incomes. Fast forward to today, and though house prices have not done what I expected (see I will be wrong on house prices, November 12, 2013), one of the most prominent commentators asserting that there is a dangerous house price bubble in Australia is… Chris Joye (who is now a writer for The Australian Financial Revi...more

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  • Ticker Sense

    April 7th Blogger Sentiment Poll

    Blogger Sentiment Poll Participants: 24/7 Wall St (N) The Aleph Blog (-) Biiwii (N) BullBear Trading Carl Futia (+) Dash of Insight (N) Dividend Growth Investor (+) Elliot Wave Lives On (+) Fallond Stock Picks (+) Global Economic Intersection (-)... ...more

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  • footnoted*

    Proxy madness: mystery fees at Google

    We’re deep in the midst of proxy season. Last week, for example there were 440 proxies filed. While we don’t read all of them, we continue to view proxies as important insight into how a company — and its board — thinks. As with most filings, this requires a fair amount of reading between the lines. So when we came across an odd disclosure in the proxy that Google filed shortly after 4 pm on March 28 — that’s the beginning of Friday Night Dump time as footnoted regulars know — we were a bit puzzled. For one, as we tweeted that evening, Google filed its proxy nearly a month earlier than it normally does. We assumed that was related to the long-planned stock split that took place last Thursday, April 3. But within that proxy was a...more

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  • Steve Keen's Debtwatch

    Vale Ted Wilshire

    There are very few people who qualify as unforgettable in your life, and Ted Wilshire was one of those for me. A larger than life character in every sense of the word, Ted was best known as the Research Officer for the Australian Metal Workers Union (AMWU) who penned the then-influential pamphlets Australia Ripped Off and Australia Uprooted in the days prior to The Accord under the Hawke and Keating Governments. He passed away on Wednesday last week during an operation in Brisbane, and there will be a wake to celebrate his life at the Bayview Bar, 1st floor Woolloomooloo Bay Hotel, at 4pm this Thursday. If you knew Ted and you’d like to join the celebration, please let Alan Anderson know by sending an email to (spelling it out to avoid spambots) alananderson209 AT b...more

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  • Institutional Economics

    Do Financial Markets Care About the G20?

    An ECB Working Paper looks at the impact of G20 meetings on financial markets: In this paper we run an event study to test whether G20 meetings at ministerial and Leaders level have had an impact on global financial markets. We focus on the period from 2007 to 2013, looking at equity returns, bond yields and measures of market risk such as implied volatility, skewness and kurtosis. Our main finding is that G20 summits have not had a strong, consistent and durable effect on any of the markets that we consider, suggesting that the information and decision content of G20 summits is of limited relevance for market participants. That won’t stop the Australian federal government spending $500 million on a process markets have deemed an irrelevance....more

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  • Jeff Matthews Is Not Making This Up

    Ebay’s Got the Guy Who Helped Pioneer the World Wide Web, the Guy Who Created the Online Auctions Business, the Guy Who Helped Steve Jobs Save Apple, the Guy Who Dreamed Up Quicken, and the Guy Who Turned Around eBay on its Board; Who’s Icahn Enterprises L.P. Got?

     Carl Icahn is—and he likes to be told this—a great investor. Billions of dollars of value—literally, billions—have materialized not just in Carl’s own pocket and those of his fellow investors in Icahn Enterprises L.P., but also in the Charles Schwab and Fidelity Investment accounts of investors across America, thanks to Carl’s prodding, poking and pushing around of companies that show up on his value screen. They can be great companies with enormous cash piles and technology smarts such as Apple, which Wall Street suddenly worries will become a has-been like, say, Motorola; and they can be once-great companies like Motorola itself.  And they can be companies like eBay that are still growing, still generating new users every day, an...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Envisioning Employment: Employment Situation March 2014

    The latest Employment Situation Report indicated that in March, net non-farm payrolls increased by 192,000 jobs overall with the private non-farm payrolls sub-component adding 192,000 jobs while the civilian unemployment rate went flat at 6.7% over the same period.It's important to note that with today's release (and revisions), the private non-farm payroll level has risen to the highest level seen in over six years and finally climbed higher then the level seen before the start of the Great Recession. Net private sector jobs increased 0.17% since last month climbing 1.99% above the level seen a year ago and climbing 0.36% above the peak level of employment seen in December 2007 prior to the Great Recession. ...more

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  • Emerging markets

    Mongolia: Golomt battles to restore its reputation

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  • Emerging markets

    China’s banks shake off fear of foreign climes

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  • Ticker Sense

    March 31st Blogger Sentiment Poll

    Blogger Sentiment Poll Participants: 24/7 Wall St (+) The Aleph Blog (-) Biiwii (N) BullBear Trading (+) Carl Futia (+) Dash of Insight (N) Dividend Growth Investor (-) Elliot Wave Lives On (+) Fallond Stock Picks (+) Global Economic Intersection... ...more

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  • VIX and More

    CBOE RMC 2014: A Retrospective

    Earlier this month, I had the pleasure of attending the CBOE Risk Management Conference (RMC) in Bonita Springs, Florida. Now that the conference is over and the CBOE has posted most of the presentations, I thought I would take a little time and offer a retrospective look at some of the content that caught my attention. Before I do that, I am compelled to tip my cap to Russell Rhoads, whose indefatigable and prolific efforts were responsible for capturing many of the details of the conference. Russell’s posts and those of Matt Moran made it possible for anyone to have a virtual front-row seat throughout the proceedings. Their efforts in conjunction with the RMC are archived at the CBOE Options Hub with the CBOERMC tag. From my vantage point, I thought it particularl...more

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  • Jeff Matthews Is Not Making This Up

    The Revolution Will Proceed, With or Without Holman Jenkins Jr.

     Once again, Holman Jenkins Jr. is defending the bad guy, this time in “Tesla Seeks Loophole, Not a Revolution” (see herefor our previous beef with the Wall Street Journal op-ed page writer). The “bad guy” Jenkins sticks up for in this weekend’s op-ed is not an individual, however, but rather the system of entrenched car dealers who have tried to shut out Tesla from selling its cars direct to consumers, with no “franchisee” in between, in various states around the country. What’s wrong with selling cars direct?  According to Jenkins, nothing, really.   He agrees the dealers are only “protecting their anticompetitive interests” by shutting down Tesla-owned outlets. But the way Jenkins sees it, Tesla CEO Elon Mu...more

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  • VIX and More

    The Turnaround in Emerging Markets and VXEEM

    While I have a long way to go before I become the next Manny Mota, yesterday I was delighted to be able to pinch hit for Steve Sears of Barron’s for the twelfth time, when I penned Emerging Market Stocks: Have They Hit Bottom? as a guest columnist for The Striking Price. In the Barron’s article I talk about how rapidly increasing uncertainty and risk in emerging markets during January was largely responsible for the 31.7% VIX spike on January 24, but was nowhere near the levels of June 2013, at least as measured by the CBOE Emerging Markets Volatility Index (VXEEM). I also used the VXEEM:VIX ratio and some other data to support the idea that emerging markets have likely bottomed and are poised for a bounce. I concluded the Barron’s column with a couple of option...more

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  • footnoted*

    Advanced Micro Devices execs say game on!

    Now that the 10-Ks are largely behind us, proxy statements are rolling in at a good and steady clip. Which means only one thing: it’s silly season for perks. To be sure, after 10-plus years of digging through SEC filings and finding all sorts of crazy things — from executive fish camps to highly valuable antique map collections — the bar for silly perks is pretty high. But when a friend of footnoted alerted us to a disclosure in Advanced Micro Devices Inc’s proxy filed yesterday, we just had to check it out for ourselves. There, on page 52 in footnote 13 to the “all other compensation” disclosure in the summary compensation table was this helpful footnote: “This amount represents the direct costs for Sony PlayStation and/or Micr...more

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  • Institutional Economics

    Bob Shiller, Ex-Ante and Ex-Post

    Scott Sumner has a nice comparison of Robert Shiller’s investment advice with that from one of my favourite supply-side economists, Alan Reynolds. Loyal readers of this blog will not be surprised to see that Scott’s post has my name all over it. Scott asks, ‘Can people find me the dates where Shiller recommended people buy stocks?’ Sure. In his 2009 book with George Ackerlof, Shiller wrote: ‘there has been one way, at least in the past, in which almost everyone could become at least moderately rich … Invest it for the long term in the stock market, where the rate of return after adjustment for inflation has been 7% per year’ (p. 117). Unfortunately, Shiller’s ex-post observations on stock market returns in 2009 do not sit well with his ex-ante pred...more

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  • FinanceProfessor.com

    Behavioral finance and investment from Berkely

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  • FinanceProfessor.com

    Fama on the history of Market Efficiency--MUST WATCH!

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  • Piggington's Econo-Almanac

    February 2014 Housing Data Rodeo

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  • Piggington's Econo-Almanac

    Case-Shiller Index: Cheaper Homes Still Rebounding Fastest

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  • Stan Collender's Capital Gains and Games

    Capital Gains And Games Now Being Published By Forbes

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  • Stan Collender's Capital Gains and Games

    Big Changes Are Coming To Capital Gains And Games

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  • Stan Collender's Capital Gains and Games

    Camp Plan Puts Nail In Tax Reform Coffin For This Year, And Next, And...

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  • The Prudent Investor

    30,000 Protesters Take To The Streets in Nantes, France

    While the world is glued to Youtube live feeds in HD quality to the bonfires in Kiev where one corrupt regime is about to be replaced by another, the economic crisis erupts into fire in the heartland of the Eurozone.30,000 protesters took to the streets in Nantes, France on Saturday, in an ongoing struggle to prevent the building of a new airport.Due to the language barrier and a blackout in EU media this report for the BBC from 2012 shows that fronts are pretty hardened. Protesters claim that the Notre-Dame-des-Landes airport in the west of the country is unnecessary and would damage the enviroment while the local government just wants to press on with an agenda obviously abhorred in this town of 900,000.We miss the uproar in the EU about the deployment of pepper spray...more

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  • The Prudent Investor

    You Have No Deposits at the Bank but Only an IOU in Your Hands

    A nice reminder that once you deposit mony at the bank it is not yours anymore. Simply said your deposit is a – currently no interest paying – loan to the bank with little paperwork. Better get it before the bank runs begin. Click here to go to the The Prudent Investor homepage for more interesting posts. ...more

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  • The Prudent Investor

    Will Austrian Bank Woes Be Again the Catalyst for a European Kondratieff Winter?

    Sad affairs have been heating up in the tiny Alpine republic in the center of the European Union. While Austria experiences record unemployment at record growth rates and tax revenues  have fallen behind optimistic projections, the looming bankruptcy of a mid-sized regional bank, Hypo Group Alpe Adria (HGAA), may propel the country to the disdained position of being the catalyst for a new round of bank failures due to interwoven banks risks on both the domestic and the international level.Austrian politicians are up in arms since a third-party expert opinion that recommends to wind down the bank at a cost of €18 billion has been leaked to the media, but keep on marching on the most fatal route that will not dissolve the problems: They keep flogging the dead horse...more

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  • Richard's Real Estate and Urban Economics Blog

    Hannah Harris Green in The Guardian on Race, Crime and Television

    She writes:The First 48 is an A&E true crime reality show that documents real police investigations for the first 48 hours after a homicide report, including what happens inside interrogation rooms. If this sounds dangerous and ethically questionable, that's because it is. Police accidentally killed a child as A&E's cameras rolled, and a legally innocent man came to beknown as a murderer after of his appearance on the show. Catastrophes like these have led to lawsuits, and now many cities refuse to work with The First 48.......This portrayal is not representative of American crime statistics. Although homicide arrests are disproportionately high among African Americans, about the same total number of white people are arrested i...more

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  • FinanceProfessor.com

    Blackstone Unit Wins in No-Lose Codere Trade: Corporate Finance - Bloomberg

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  • Richard's Real Estate and Urban Economics Blog

    UW-La Crosse Chancellor Joe Gow has issues with sifting and winnowing.

    A geography professor at the University of Wisconsin-La Crosse, Rachel Slocum, made the mildly controversial point in an email to her students that Republicans in the House of Representatives had brought about the partial closure of the US government, and had therefore brought about the closure of the US Census web site.  This closure prevented her students from completing their assignments.  She never used abusive or offensive language.Her point raised howls among the conservative blogasphere and media; when confronted with this, her boss, UW-La Crosse Chancellor Joe Gow, publicly reprimanded her for expressing a factually based opinion to her class.  In my view, it was his job to back her--not to agree with her opinion, but rather to defend he...more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

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  • Richard's Real Estate and Urban Economics Blog

    The Windy City and The Foggy City

    Hannah Green writes:ERNEST HEMINGWAY famously wrote of Paris, “If you are lucky enough to have lived in Paris as a young man, then wherever you go for the rest of your life, it stays with you, for Paris is a moveable feast." For half a century, Hemingway’s nostalgic vision of the city of lights has made undiscovered literary geniuses wish that they could be unemployed in Paris in the 1920s instead of unemployed wherever they live, now. Last year, Teju Cole’s debut novel, Open City, offered a different kind of literary city. The main character, Julius, who resembles Cole, wanders the streets of New York, conversing with the city’s residents and falling into reveries about music, history, and literature. Most of the people he speaks with are immigrants, ...more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Last Post

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  • The Oil Drum - Discussions about Energy and Our Future

    The House That Randy Built

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  • Accrued Interest

    IS HALLIBURTON A BUY?

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  • Accrued Interest

    Is it Time to Sell Blackberry?

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  • Accrued Interest

    Three Oil Stocks to Consider

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

    To me, the central issue raised by this week's Cyprus debacle is how it has affected confidence across the eurozone.  To what degree has the possibility of insured depositors at a eurozone bank losing a portion of their deposits affected the mindset of depositors?  To what degree has ECB acquiescence to this possibility undermined the notion that deposit insurance in the eurozone means the same thing in all countries?  And to what degree has the ECB's direct threat to end support for Cyprus's banking system in the event that the government of Cyprus can not arrange sufficient funds to meet its conditions made a farce of its earlier promise to "do whatever it takes to preserve the euro"?These, to me, are the interesting questions prompted by this week's ev...more

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  • London Banker

    Chop Off Their Hands . . .

    President Truman famously called for a one handed economist. The Carolingian kings of France would have accommodated him. They realised that a kingdom required a common currency under the control of the king and well regulated markets to sustain the confidence of the people. At first mints were established widely, spread across the kingdom. Local barons began to profit from debasing the coinage, undermining confidence in the monetary system. So Charles the Bald established mints under his direct control and regulated the issue of coins: C.12. Following the custom of our predecessors, just as it is found in their capitularies, we decree that in no other place in all our kingdom shall money be made except in our palace, and in St. Josse and Rouen, which right in th...more

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  • The Street Light

    When the Fed Chair is an Academic

    The big economic news of the week was, in fact, big economic news: the Fed's announcement of significant changes from past practice in the the quantity of its next round of large scale asset purchases ("unlimited"), and in the timing of any future reversal of this expansionary policy ("a considerable time after the economic recovery strengthens").I view this as a pretty fundamental shift in how the Fed hopes to affect the economy.  Rather than trying to push economic activity one way or the other through its management of interest rates (which can alter economic activity through its portfolio-rebalancing and wealth effects, for example), the Fed is now quite explicitly trying to affect economic activity by altering interest rate and inflation expectations.  As...more

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  • London Banker

    For Want of a Nail, the Ship Was Lost

    Imagine a great ship dominating the skyline on a distant sea. Imagine the complexity of that ship: keel, ribs, planks, masts, spars, and an infinite number of less readily named components. Each component was hand-crafted by a craftsman skilled in his trade, to precise requirements, and secured in position to take the stress and strain of a life at sea.Now imagine a crew. They didn't build the ship. The crew are told that the one and only purpose of the ship is to realise a profit for every man jack aboard. Any hand not contributing a profit will be turned ashore. Down below in the ship are nails. Thousands and thousands of nails. Nails are useful. Nails are much sought after in every port the ship enters. Nails can be readily sold and never traced. The crew h...more

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  • London Banker

    Lies, Damn Lies and LIBOR

    I've been hesitant to write about the LIBOR scandal because what I want to say goes so much further. We now know that Barclays and other major global banks have been manipulating the calculation of LIBOR through the quotation data they provided to the British Bankers Association. What I suspect is that this is not a flaw but a feature of modern financial markets. And if it was happening in LIBOR for between 5 and 15 years, then the business model has been profitably replicated to many other quotation-based reference prices.Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole. If price discovery is compr...more

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  • The Street Light

    Government Job Destruction

    Another jobs report in the US, another month where part of the private sector's job creation was undone by continued job destruction by the government sector. The 15,000 additional jobs lost in April brings total job losses in the government sector since January 2010 to over 500,000. While the US has not quite been experiencing European-style austerity over the past two years, that's still a pretty tough headwind to fight as it emerges from recession. ...more

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Dan Steinbock

Dr Dan Steinbock is a recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond). In addition to his advisory activities (www.differencegroup.net), he is affiliated with major US universities as well as international think-tanks, such as India China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore).

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