EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • Dealbreaker

    Write-Offs: 10.22.14

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  • DealBook

    In Turnabout, Former Regulators Assail Wall St. Watchdogs

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  • DealBook

    S.E.C. Rejects 2 Efforts to Create Actively Managed E.T.F.s

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  • Dealbreaker

    Goldman Sachs: Sex Discrimination Practices At The Bank Are A Lot More Nuanced Than Ex-Employees Are Making Them Out To Be

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  • The Big Picture

    10 Wednesday PM Reads

    My afternoon train reads: • The world’s best market timers: the Federal Reserve (Marketwatch) • Hedge Funds Take Another Hit as Spinoff Stocks Fizzle (WSJ) see also Misery Widespread at Hedge Funds (WSJ) • Swedroe: Valuations And Asset Allocation (ETF.com) • Yes, Market Volatility Is a Job-Killer (Real Time Economics) • New York Fed Caught Sight of London Whale and Let Him Go (Bloomberg View) see also New York Fed Faulted in ‘London Whale’ Case (WSJ) • Bloomberg Drops Huge Cash, Poaches Business Insider’s Joe Weisenthal To Host New TV Show (Business Insider) • Walmart Is Killing the Rest of Corporate America in Solar Power Adoption (Slate) • The Disruption Myth: The idea that businesses are more vulnerable to upstarts than ever is out-o...more

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  • Dealbreaker

    Every Sexual Harassment Allegation Against Fired Female HSBC Exec Is Worse Than The Last

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  • The Mises Economics Blog: The Circle Bastiat

    The End of QE3, Trouble Ahead for the Bulls?

    Austrian economist Micheal Pollaro writes that with the end of QE3 coming that stock market bulls need to take a note of caution because the Austrian measure of the money supply is already falling. This is typically a sign of trouble for stock markets. The Federal Reserve’s latest asset purchase program, QE3, is coming to an end. What was once an $85 billion a month program, one in which at its peak had been goosing the financial markets and economy at an annual rate of $1.0 trillion – and over its 27 month life will have pumped $1.7 trillion of money into the economy – is going to zero. Given the outsized impact QE has had on the growth of U.S. money supply and thus the U.S. economy, we say investors take note, especially those furthest out on the risk curve, b...more

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  • Real Time Economics

    U.K. Mortgage Holders So Far Unfazed By Prospect of Higher Rates

    Mortgage holders in the U.K. don’t appear to be losing sleep over fear that the Bank of England will increase interest rates soon, according to a survey released Thursday. The poll by research firm YouGov PLC in association with the Council of Mortgage Lenders found 60% of respondents believed they expected their finances to be the same or better in three years time, despite expecting interest rates to go up soon. Of those saying they have trouble paying their mortgage, 61% claim to be affected by the cost of living going up, 41% attributed it to minimal savings and 36% pointed to low or falling income. The survey was based on 2,314 respondents conducted between Aug. 22 and Aug. 26. It isn’t that mortgage owners are unaware that interest rates are likely to go up s...more

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  • Calculated Risk

    QE Timeline Update

    With QE3 expected to end next week, by request, here is an updated timeline of QE (and Twist operations):• November 25, 2008: Press Release: $100 Billion GSE direct obligations, $500 billion in MBS• December 16, 2008 FOMC Statement: Evaluating benefits of purchasing longer-term Treasury Securities• January 28, 2009: FOMC Statement: FOMC Stands Ready to expand program.• March 18, 2009: FOMC Statement: Expand MBS program to $1.25 trillion, buy up to $300 billion of longer-term Treasury securities• March 31, 2010: QE1 purchases were completed at the end of Q1 2010.• August 27, 2010: Fed Chairman Ben Bernanke hints at QE2: Analysis: Bernanke paves the way for QE2• November 3, 2010: FOMC Statement: $600 Billion QE2 announced.• June 30, 2011: QE2 purchases wer...more

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  • The Big Picture

    Asset Classes: Real 10-Year Expected Return

    Source: Research Affiliates   Rob Arnott of Research Affiliates writes: In a world of low bond yields and slow economic growth, historically realized 5-6% real (7-8% nominal) asset class returns may be unrealistic expectations for the future. In other words, assets with above-average valuations may not deliver the sort of returns people came to expect before the credit crisis. What’s an investor to do? Thankfully, we have a chart.   Continues here ...more

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  • DealBook

    How Quantitative Easing Contributed to the Nation’s Inequality Problem

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  • Real Time Economics

    Why Rising Rents Haven’t Pumped Up Inflation

    Policy makers and economy-watchers now seem more worried about disinflation rather than accelerating inflation. That wasn’t the expectation at the start of the year. In January, economists surveyed by The Wall Street Journal expected inflation–measured by the consumer price index–would end 2014 at a 2.3% annual rate, up from the 1.5% rate of 2013. Instead, inflation through September is running at a 1.7%, according to Wednesday’s CPI report. Core inflation, which excludes food and energy, also stands at just 1.7%. One reason that inflation was forecast to accelerate this year was the expected increases in the cost of putting a roof over one’s head. The Labor Department asks homeowners to estimate how much it would cost to rent their own homes. In a perio...more

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  • naked capitalism

    2:00PM Water Cooler 10/22/14

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  • Calculated Risk

    Key Measures Show Low Inflation in September

    The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.8% annualized rate) in September. The 16% trimmed-mean Consumer Price Index also rose 0.1% (1.8% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report. Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.1% (1.0% annualized rate) in September. The CPI less food and energy also rose 0.1% (1.7% annualized rate) on a seasonally adjusted basis.Note: The Cleveland Fed has th...more

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  • The Mises Economics Blog: The Circle Bastiat

    I Only Read It for the Articles! Rothbard’s Penthouse Interview

    G-Rated (Almost) Edit of October 1976 Cover In the 1970s, Penthouse magazine had a reputation for featuring the ideas of unorthodox political thinkers and movements. That’s why in October 1976 it interviewed Murray Rothbard to ask about the rapidly-growing philosophy of libertarianism. This interview is now difficult to find, but was recently excavated from the archives at the Mises Institute. The article begins with an introduction that provides a great snapshot of both Rothbard’s work and personality: The Murray Rothbard wall poster depicts a graying professor pecking at a typewriter. His words rise magically from the machine and blend into a black flag of anarchy rippling above his head. Beneath the drawing is this caption: “Murray N. Rothbard—the greates...more

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  • Abnormal Returns

    Wednesday links: creative quants

    You can keep up with all of our posts by signing up for our daily e-mail. Thousands of other readers already have. Don’t miss out! Quote of the day John Chisolm, “Modern quantitative investing is creative.”  (Institutional Investor) Strategy Some common lies investors tell themselves.  (A Wealth of Common Sense) On the return of trend following strategies.  (Meb Faber) A summary of the stock picks from the 2014 Robin Hood Investors conference.  (Market Folly) Why managers try to copycat their competitors.  (FT) Companies Dan Loeb wants to break up Amgen ($AMGN).  (Dealbook, WSJ, MoneyBeat) On the Bill Ackman inspired turnaround at Canadian Pacific ($CP).  (Buzzfeed) Skepticism reigns about Yahoo’s ($YHOO) strategy.  (NYTimes, Recode, Wired) A...more

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  • Real Time Economics

    China Economy On Track For Sweeping Reform, Asia Society Report Finds

    A vendor displays a souvenir with pictures of Chinese President Xi Jinping, left, and the late Chinese Chairman Mao Zedong to visitors at the underpass outside the Great Hall of the People where the Communist Party’s 205-member Central Committee gathered for its third annual plenum on Nov. 12, 2013, in Beijing. Agence France-Presse/Getty Images China’s leadership is making real headway in an ambitious program to liberalize its economy and if all goes to plan it will maintain a respectable 6% growth rate in 2020, according to a new detailed analysis of the reform agenda laid out at last year’s third plenum of the Chinese Communist Party. The study by the Asia Society Policy Institute in collaboration with the Rhodium Group stands in contrast to a pessimistic t...more

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  • The Mises Economics Blog: The Circle Bastiat

    The Fed as Stock Market Manipulator

    The notion that the Federal Reserve has been acting to manipulate stock markets has been active for decades, but rarely has that notion been openly discussed in the mainstream media. In this article by Howard Gold the Fed is praised for its “market timing” as Fed official quickly responded to recent volatility in the stock market with promises of more quantitative easing if necessary. Investors got the message. The S&P 500 Index advanced for three straight days and the VIX fell under 20 again. Bullard was only the latest Fed official whose words or actions “just happened” to boost the stock market when it was down. “They are definitely in the market-manipulation business, and nothing has changed,” said James Bianco, president of Bianco Research...more

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  • The Big Picture

    You Are Worrying About the Wrong Things

    No, you are not going to die from Ebola. To quote a wag on Twitter, “More Americans have been married to Kim Kardashian than have died from Ebola.” But the latest scare does have a small positive: It provides me with yet another opportunity to lecture you about how incredibly dumb your lizard brain is. (It’s also an opportunity to castigate the media for turning a minuscule threat into a full-blown conflagration, but that’s shooting fish in a barrel). How serious is the danger of Ebola infection? Despite the nonstop media coverage, it’s important to note that this doesn’t matter to 99.999 percent of Americans. Back in May, we noted the things that are most likely to kill you — or your investments — are not the things most of us typica...more

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  • FT Alphaville

    Burn rates, oil sovereign edition

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  • The Capital Spectator

    Chicago Fed Nat’l Activity Index: Sep 2014 Preview

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  • Calculated Risk

    Cost of Living Adjustment: 1.7%, Contribution Base for 2015: $118,500

    With the release of the CPI report this morning, we now know the Cost of Living Adjustment (COLA), and the contribution base for 2015.Currently CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). Here is a discussion from Social Security on the current calculation (1.7% increase) and a list of previous Cost-of-Living Adjustments. Note: this is not the headline CPI-U.The contribution and benefit base will be $118,500 in 2015.The National Average Wage Index increased to $44,888.16 in 2013, up 1.28% from $44,321.67 in 2012 (used to calculated contribution base).  A very small increase ...SPECIAL NOTE on CPI-chained: There has been some discussion of switching from CPI-W to CPI-chained for COLA. This will not happen this year, but...more

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  • naked capitalism

    Matt Stoller: Why Is Alan Greenspan’s Lawyer, Scott Alvarez, Still Controlling the Federal Reserve? (AIG Bailout Trial)

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  • The Capital Spectator

    Markets Review | 22 October 2014

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  • naked capitalism

    Links 10/22/14

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  • FT Alphaville

    Markets Live: Wednesday, 22nd October, 2014

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  • FT Alphaville

    The (early) Lunch Wrap

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  • The Capital Spectator

    Initial Guidance | 22 October 2014

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  • The Housing Bubble Blog

    Bits Bucket for October 22, 2014

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

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  • The Skeptical Speculator

    Stocks jump as investors see central bank support

    Stocks rose on Tuesday. The S&P 500 jumped 2.0 percent while the STOXX Europe 600 surged 2.1 percent. Stocks rose amid reports that the European Central Bank is considering buying corporate bonds on the secondary market beginning early next year. Also boosting markets was a report that US existing home sales rose 2.4 percent to the highest level in a year. Nevertheless, many think that central bank actions -- or at least words -- remain key to market direction. From Bloomberg on Tuesday: The central-bank put lives on. Policy makers deny its existence, yet investors still reckon that whenever stocks and other risk assets take a tumble, the authorities will be there with calming words or economic stimulus to ensure the losses are limited... Last week as markets swooned ag...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Hedge Funds: Good Run for India, but Troubles in Brazil

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  • Dr. Housing Bubble Blog

    Time to make it easier for people to get loans with lower credit and lower down payments: FHFA looking seriously at making it easier for cash strapped Americans to take on mortgages.

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  • Abnormal Returns

    Tuesday links: gimmicky guidance

    Quote of the day Herb Greenberg, “I have no idea why companies give short-term guidance, let alone long-term guidance — let alone five-year forward guidance.”  (TheStreet) Strategy Why we can have wildly different sentiment measures.  (Humble Student) Why the low volatility anomaly should persist.  (Monevator) Why most finance-related research conclusions are false.  (NBER) Apple Apple ($AAPL) is increasingly becoming the iPhone company.  (WSJ, Quartz, Mashable, Business Insider) iPhone vs. Mac: how you think about the iPad business depends on perspective.  (Daring Fireball) How did Apple pull off Apple Pay?  (Quartz, NYTimes, Yahoo Finance, Total Return) Companies What Coca-Cola ($KO), McDonald’s ($MCD) and IBM have in common.  (The Refo...more

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  • The Housing Bubble Blog

    Until Buyers Like The Price, It’s Going To Sit

    The Palm Beach Daily News reports from Florida. “The number of demolition permits and new-home building permits issued by the town has soared over the past couple of years and most of those are for projects on the North End. The frenzy has left many would-be home buyers and spec developers struggling to find suitable properties. ‘I note that (tear-down houses in) the current spec inventory — few that there are — are priced at or above $1,200 per square foot. Some of the new ones already announced by other brokers are well above $ 1,300 per square foot,’ said the Corcoran Group’s Bill Yahn. ‘To reward the developer for his effort and risk, a finished home on a $3 million site would likely be priced approaching $7 million. New homes price...more

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  • The Housing Bubble Blog

    Bits Bucket for October 21, 2014

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

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  • Macro Man

    A Hobbesian correction?

    So now that the dust has settled (if only for the time being), what are we to make of it all?  Is there another sting in the tail for equities, or was this merely a Hobbesian correction (e.g., nasty, brutish, and short)?We may find out soon enough.  A few short days after the market was in abject panic, and we're already at the tell-tale 1900-1905 region on Spooz.  As a refresher, this is not only the region of the 200 day moving average (a break of which saw the downtrade accelerate), but also a level that has prompted a reaction on previous visits as well.Gun to the head, Macro Man would take the side of the market resolving higher over the next month or so.   While it's true that VIX has already fallen very sharply since it touched 30 (an "ol...more

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  • The Skeptical Speculator

    Stocks mixed, China's growth slowest since 2009

    Stocks were mixed on Monday. The STOXX Europe 600 fell 0.5 percent but the S&P 500 rose 0.9 percent to help push the MSCI All-Country World Index up 0.7 percent. Tuesday saw China report that its economy grew 7.3 percent in the third quarter from the previous year, down from 7.5 percent in the previous quarter and, indeed, the slowest pace since the first quarter of 2009 in the midst of the global financial crisis. For September data, industrial production rose 8 percent from the previous year, rebounding from a more than five year low of 6.9 percent in August. Retail sales rose 11.6 percent while fixed asset investment rose 16.1 percent in the first nine months of the year when compared to the same period last year....more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Detroit Bankruptcy: Foes Become Allies

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  • A Fistful Of Euros

    Does The Secular Stagnation Theory Have Any Sort of Validity?

    In a number of blog-posts (Paul Krugman’s Bicycling Problem, On Bubble Business Bound, The Expectations Fairy) I have examined some of the implications of the theory of secular stagnation. But I haven’t up to now argued why I think the hypothesis that Japan and some parts of Europe are suffering from some kind of secular stagnation could well be a valid one. Strangely, while I would suggest the most obviously affected countries are those mentioned above, most of the debate has centered around the US economy. Since it is not at all clear that the US economy is actually suffering from either a liquidity trap or secular stagnation at this point, this has lead many to question whether the idea might not be ill-founded. The Economist, for example, in a revue arti...more

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  • Abnormal Returns

    Monday links: global market turbulence

    Markets What is global market turbulence telling us?  (Gavyn Davies) Signs of an oversold stock market.  (The Short Side of Long) On the high yield-emerging market debt trade-off.  (Humble Student) Leverage kills: the UK retail forex edition.  (FT ALphaville) Finance Who’s to blame: IBM ($IBM) or Wall Street?  (Jeff Matthews also FT Alphaville) Bond trading is becoming increasingly automated.  (Dealbook) Structured notes. Ugh.  (MoneyBeat) Strategy Your favorite ‘factor’ is probably a mirage.  (Marginal Revolution) What happens when you test 13 AAII screens?  (Alpha Architect) Institutional investors Post-Calpers, pension funds are going to have to justify their hedge fund investments.  (WSJ) Why most institutional investors are so resistant ...more

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  • Ticker Sense

    October 20th Blogger Sentiment Poll

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

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  • Jeff Matthews Is Not Making This Up

    Don't Blame IBM. Blame Wall Street

     Well the biggest stock-market levitation act since HP under Mark Hurd is going the way of all levitation acts: IBM is throwing in the towel on its $20 EPS "roadmap" (reportedly mocked as "roadkill" in some internal IBM quarters) and admitting what anybody with a calculator and the IBM 10Ks before them has understood for some time--it is exceedingly difficult to grow earnings regularly, not to mention with to-the-penny precision, when your sales are falling, hard, nearly everywhere, quarter after quarter...no matter how many people you lay off, how many "one-time" charges you take, how many lagging businesses you sell at fire-sale prices, how many shares you buy back at whatever price, or how often you try to direct the gaze of Wall Street's Finest to shiny ne...more

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  • The Skeptical Speculator

    Stocks could fall another 50 percent or more

    Do stocks have much further to fall? The Wall Street Journal's Brett Arends asks that question. Despite Friday’s boomlet, the Dow Jones Industrial Average still closed the week down 1%, and the broader S&P 500-stock index ended also down 1%. The Dow and the S&P are down 5.2% and 6.2%, respectively, from their record highs... Overall, the MSCI World index has fallen 10% in just a few short weeks, after hitting a record on Sept. 2... So how much further might the market fall? If this is merely a regular correction in the course of a regular economic expansion, the answer may be: Not much further. Corrections of 5% to 20% are a normal part of the stock market... Still, there are reasons for concern based on trends prevailing even before the recent turmoil. If the global ...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Liquidity Makers and Takers: A Nobel Prize

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  • Dr. Housing Bubble Blog

    Rental fury: The trend for renting continues to grow stronger. Housing starts jump largely on the back of multi-family housing starts.

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  • My voice and noise on subprime bank regulations

    Janet Yellen, are you really so unaware you are also one of the equal opportunities killers?

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  • A Fistful Of Euros

    Open Letter to the Economist on Catalonia – J’accuse

    Those who have interest in neither Catalonia nor the issue of journalistic standards will probably find this posting long, tedious, and not especially interesting. Perhaps you might like to stop at this point. Those of you who are interested in one or other of these, well, I invite you to read on…..  To The Editors Of The Economist I am writing this missive addressed to you as I am outraged, nay scandalized, by the level of your reporting on the Catalan question. The source of my discontent are two recent pieces – both signed by one GT – the first of which appeared on the Charlemagne Blog (Getting to “sí”, 19 September 2014), while the second was published under the rubric The Economist Explains (Catalonia’s independence movement,14 Octobe...more

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: September 2014

    Today’s New Residential Construction Report showed mixed results with total permit activity and total start activity improving while single family permit activity declined since August.Single family housing permits, the most leading of indicators, declined 0.5% from August to 624K single family units (SAAR), but increased 1.1% above the level seen in September 2013 and still remained well below levels seen at the peak in September 2005. ...more

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  • The Aleph Blog » The Aleph Blog

    Meeting the “Bond King”

    Photo Credit: ~Sage~ || King of the Beasts, eh?It was winter in early 1995, and I was wondering if I still had a business selling Guaranteed Investment Contracts [GICs].  Confederation Life had gone insolvent the August prior, and I noticed that fewer and fewer stable value funds wanted to purchase my GICs, because our firm was small, and as such, did not get a good credit rating, despite excellent credit metrics.  The lack of a good rating kept buyers away.Still, I felt I needed to try my best for one more year or so, despite my feelings that the business was dying soon.  With that attitude, I headed off in January to sunny Southern California, to attend GICs ’95, something my opposite number at AIG referred to as a Schmoozathon.Schmoozathon?  Well, you too...more

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  • Dr. Housing Bubble Blog

    Home ATM is open for business again: Home equity lines of credit up 21 percent from last year. Up 55 percent in the Los Angeles and Orange County metro areas.

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  • VIX and More

    Fear Poll: Fed/QE, Ebola and Technicals Top Worry List

    Stocks may be in the process of putting in a bottom, but with the VIX hitting 31.06 yesterday at the same time VIX futures were setting new volume records, investor fear and anxiety is as high as it has been since the 2011 European sovereign debt crisis. As the VIX and More Fear Poll results reflect, the current situation is particularly difficult for investors to grapple with because there is so much disagreement about what the biggest worry is and how some of these fears may be connected. In the chart below, I have summarized the almost 400 votes from some 35 countries, with the U.S. accounting for 65% of all respondents. It is worth noting that the responses appear to be somewhat headline driven, as yesterday Ebola topped the list of worries, only to be supplanted...more

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  • Macro Man

    A Fed poll

    Well, that was...exciting.  The long-awaited return of volatility has arrived with quite a fanfare (or is that a requiem?), with yesterday's whip-saw price action unlike anything observed since the US downgrade furore in 2011.How crazy was it?  Macro Man got one of those "eurodollars screaming higher, no offers in sight" texts from one of his brokers yesterday morning, even though neither of us are currently in a seat.   One can only presume that plenty of punters who are in seats got similar messages, if not shoulder taps from risk managers.Indeed, the late-session selling that has characterized so much of this "meltdown" in stocks is highly symptomatic of both margin call-related selling and rebalancing from the uber-leveraged-ETF-that-separates-th...more

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  • The Baseline Scenario

    No, You Can’t Get a Drink at 5 AM

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  • DRS » Blog

    The Extraterrestrial nature of the Extraterritoriality rules

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  • DRS » Blog

    The Extraterrestrial nature of the Extraterritoriality rules

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  • The Aleph Blog » The Aleph Blog

    Mantra: Interest Rates Have to Rise, Interest Rates Have to…

    Photo Credit: Beto Vilaboim || No, you are not crazy — it *is* hopelessI thought of structuring this post like a fictional story, but I couldn’t figure out how to make it good enough for publication.  Well, truth is often stranger than fiction, so have a look at this Bloomberg article pointing at a 37% loss in the ProShares UltraShort 20+ Year Treasury (TBT).A few points to start with: shorting is hard.  Leveraged shorting is harder.  I think I have reasonable expertise in much though not all of investing, and I put most shorts in the “too hard pile.”That said, I have taken issue with the “interest rates can only go up” trade for 8-9 years now.  It is not a major theme of mine, but I remember a disagreement that I had with Cramer...more

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  • My voice and noise on subprime bank regulations

    How could our bank regulators have fallen for our bankers’ so childish and selfish arguments?

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  • The Aleph Blog » The Aleph Blog

    Even with Good Managers, Volatility Matters

    Photo Credit: sea turtleThis is another episode in my continuing saga on dollar-weighted returns. We eat dollar-weighted returns.  Dollar-weighted returns are the returns investors actually receive in a open-end mutual fund or an ETF, which includes their timing decisions, as opposed to the way that performance statistics are ordinarily stated, which assumes that investors buy-and-hold.In order for active managers to have a reasonable chance of beating the market, they have to have portfolios that are significantly different than the market.  As a result, their portfolios will not behave like the market, and if they are good stockpickers, they will beat the market.Now, many of the active managers that have beaten the market run concentrated portfolios, with relativel...more

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  • VIX and More

    VIX and More Fear Poll

    Which of the following makes you most fearful, anxious or uncertain about the stock market?

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  • DRS » Blog

    UK-US bigwigs meet for G-SIB resolution

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  • DRS » Blog

    UK-US bigwigs meet for G-SIB resolution

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  • Paper Economy - A US Real Estate Bubble Blog

    Retail Sales: September 2014

    Today, the U.S. Census Bureau released its latest nominal read of retail sales showing mixed results in September with sales dropping 0.3% from August but rising 4.3% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services. Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales declined slightly, falling 0.14% from August but rising 2.16% above the level seen in September 2013 while, adjusting for inflation, “real” discretionary retail sales declined 0.38% on the month but rising 0.33% since September 2013. ...more

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  • Macro Man

    Fixed income gets medieval

    Although the equity guys get the headlines, given that that this month's Spooz Swoon has taken the index back to "barely up on the year" territory (oh, the humanity!), spare a thought for those poor souls toiling in the classic macro crucible of short-end fixed income.For today that market has well and truly gone medieval, sending EDZ5 shorts (including your correspondent) to the rack:Note, gentle readers, that today EDZ5 has made an all time contract high.    Consider the panic button pushed, the stop losses executed, and the market's tail tucked firmly between its legs.  That 10 year yields printed on a 1.80 handle raises the question of what the Fed might hope to accomplish by re-introducing QE (as hinted by Williams the other day- that didn't tak...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – October 15 2014

    The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications. The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases. The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) decreased 9 basis points to 4.08% since last week while the purchase application volume decreased 1% and the refinance application volume ...more

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  • DRS » Blog

    Forward FX now definitely not decided

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  • DRS » Blog

    Forward FX now definitely not decided

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  • My voice and noise on subprime bank regulations

    Why Europe should be scared having the ECB, under Mario Draghi, being the supervisor of its 120 most significant banks.

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  • A Fistful Of Euros

    Eurocrisis Round Two, Blame the Germans Edition

    “What strikes me, also, is the extent of intellectual confusion that remains.” – Paul Krugman, Europanic 2.0 “The problem is that Germany has continued to maintain highly competitive labor costs and run huge surpluses since the bubble burst — and that in a depressed world economy, this makes Germany a significant part of the problem.” – Paul Krugman, German Surpluses: This Time Is Different According to one fairly widespread (and recently much in vogue) theory about the Euro crisis, Germany bears a large part of the responsibility for the current mess. The view is met with a variety of responses inside the country, ranging from horror to amazement. Naturally, if the argument were simply about the way Angela Merkel has handled the crisis – no...more

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  • Steve Keen's Debtwatch

    About $7500 raised thus far for Standish-Minsky

    Russell Standish asked me to thank those who have donated to keep him available for the Minsky project: A total of about $7500 has been raised to date. I have set up the payments now so that they go straight to Russell’s PayPal account. One user did ask about alternative payment methods; Russell’s comment was that bank fees make a direct bank account transfer only worthwhile either for an Australian donation, or for a very large sum from a non-Australian bank account. I am continuing to explore other potential funding options–and there are a couple of promising leads. But until they come through, continuing support from the community would be most welcome. ...more

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  • VIX and More

    Largest SPX Pullback of 2014 Hits 6.4%

    Every time there is a pullback, it seems as if I receive multiple requests for an updated version of the table below. With the S&P 500 index reeling and still trying to find a bottom, this looks like a good time to put the current pullback in the context of the 27 most significant peak-to-trough declines from new highs since the SPX bottomed in March 2009. Note that the current 6.4% decline from the September 19th high of 2019 is roughly average in terms of duration, but makes it the second largest pullback in percentage terms since 2012, just eclipsing the January-February 2014 pullback, when emerging markets (EEM) and Crimea were weighing heavily on the minds of investors. Keep in mind that as ugly has things have been in the SPX, the Russell 2000 small cap inde...more

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  • Ticker Sense

    October 13th Blogger Sentiment Poll

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

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  • Piggington's Econo-Almanac

    September 2014 Housing Data Rodeo

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  • footnoted*

    GT Technologies warned in August

    There’s been a lot of hand-wringing over the past few days about GT Technologies, which as most people know, filed for bankruptcy earlier this week. In the press release, CEO Tom Guttierez said that “today’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.” Investors didn’t quite see things that way. The stock declined over 90% on Monday and has spent the past few days gyrating wildly (up about 50% on Tuesday, down 40% so far on Friday). What’s really interesting here are the number of people who have expressed shock — shock — over what...more

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  • Emerging markets

    Malaysia mega-merger seeks central-bank approval

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  • FinanceProfessor.com

    Dark pools in the news: looks at Wall Street's secret trading exchanges (Dark Pools)

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  • Emerging markets

    IMF struggles for relevance

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  • The Baseline Scenario

    Cultural Capture and the Financial Crisis

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  • Emerging markets

    Asian bankers bathe in Alibaba afterglow

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  • Ticker Sense

    October 6th Blogger Sentiment Poll

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

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  • Steve Keen's Debtwatch

    $1700 raised for Standish-Minsky so far

    Thanks to all those who have chipped in to help keep Russell Standish available for coding Minsky. The proverbial person with deep pockets hasn’t yet materialized, but about 25 people with shallower ones but generous souls have chipped in a total of just under $2000. Keep Russell Standish on the Minsky ProjectLevel 1 - $10Level 2 - $50Level 3 - $100Level 4 - $500Level 5 - $1000Level 6 - $5000Other Amount: Your Email Address (and comment if you wish to add one) : I’ve now altered the Paypal link on my site so that the payments go directly to Russell’s Paypal account. Please keep the donations coming, and encourage others to help out as well. ...more

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  • Steve Keen's Debtwatch

    Assistance for Minsky required

    To anyone out there with deep pockets–or to lots of people with shallower ones–I need financial assistance for the Minsky program. I have been waiting for funding from a source that I’ll reveal once it finally comes through, but it has now been delayed for over six months from when it was first mooted to arrive. If I am lucky, it will come through in January–another 4 months away. The problem is that I may lose my programmer by then to the vicissitudes of having to earn a living. I have been the architect of Minsky, but Russell Standish has been the builder, and I was incredibly lucky to secure his services when the project began 3 years ago. Now he has gone over 6 months without an income, partly because he has not marketed his skills to other potential emplo...more

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  • FinanceProfessor.com

    So what is the CEO to average worker ratio? 511 or 4? Depends on what you report.

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  • The Baseline Scenario

    Game of Thrones, The Wire, and the New York Fed

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  • footnoted*

    Comment letter ahead of BofA’s $8M Fine

    Yesterday, the SEC announced a $7.65m fine for Bank of America Corp. related to internal controls deficiencies and regulatory capital misstatements related to complex securities it bought as part of its acquisition of Merrill Lynch in 2009. What’s surprising is that a comment letter that was made public earlier this month previewed this. In that letter, the SEC said it was concerned with the company’s disclosure about revisions to regulatory capital amounts and ratios in its first-quarter report, which we flagged for footnotedPro subscribers on May 1. We thought it was interesting to highlight this not just because of yesterday’s news, but because it’s rare to see that sort of quick cause and effect when it comes to comment letters. Now, obvio...more

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  • Richard's Real Estate and Urban Economics Blog

    How the price of a Martini reveals the property value of a city

    A Hendricks Gibson is basically a commodity (although the bartender does need to know what she is doing). But a good Gibson at the Starlight Lounge in LaCrosse, Wisconsin is $8; at the Roof Garden at the Peninsula Hotel in Beverly Hills is $16; at the King Cole Bar of the St. Regis Hotel in New York is $22. Let's say the cost of the cocktail, including labor, but exclusive of real estate, is $7. Then the implicit rent you are paying for sitting in a bar in LaCrosse is $1; in Beverly Hills on a rooftop is $9; and in NYC is $15. If one consults Zillow, one will find that this ratio of 1:9:15 for real estate in LaCrosse, BH and Manhattan is pretty close to the truth.One key thing--all these drinks are served in competitive markets--there is true thickness in bars in t...more

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  • Richard's Real Estate and Urban Economics Blog

    How Piketty's care with language can improve economics

    When I was a freshman in college, I read Fogel and Engerman's Time on the Cross.  I loathed the book, because it implicitly endorsed the idea that it is OK, "in the interested of science," to dehumanize those African-Americans that were placed in bondage by viewing them as capital (I loathed it for other reasons as well, but that is for another time.) It also contributed to the broad view currently within much of mainstream economics that it is (1) acceptable to treat human beings as objects, and (2) that it is embarrassing to embrace humanity.  I was embarrassed that the book helped Fogel ultimately won the Nobel Prize in economics.I thought of Fogel and Engerman again when a recent review in the Economist of Edward Bishop's The Half Has Never Been Told compl...more

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  • FinanceProfessor.com

    Active vs. Passive in Global Investing | Financial Planning

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  • footnoted*

    An unusually special award at Sigma-Aldrich

    Earlier this week, there was big news in big-pharma when the German pharmaceutical giant Merck KGaA announced plans to buy Sigma-Aldrich Corp. for $17 billion. The $140 a share price represented a 37% premium to Sigma-Aldrich’s closing price. Since that announcement on Monday, Sigma-Aldrich has filed 16 separate documents with the SEC, or somewhere north of 400 pages — from the transcript of the post-announcement call to the Powerpoint presentation to something called employee talking points, which was presumably designed by HR-types to reassure employees that they still have a job, at least for now. But it was this 8-K filed late on Thursday that really jumped out at us: in the filing, Sigma-Aldrich says it is making a “special award” of $500,00...more

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  • Piggington's Econo-Almanac

    August 2014 Housing Data Rodeo

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  • Jeff Matthews Is Not Making This Up

    Berkshire Hathaway: Wholesaler of Death?

     Now that we have your attention with that admittedly provocative title, we are going to kill two birds with one stone here. Bird One is the fact that we haven’t posted anything in two months, mainly because whatever odd silliness visible in the darker corners of Wall Street seems irrelevant in a world where Vladimir Putin can invade his neighbors, take territory and shoot passenger planes from the sky while the civilized world sputters about such things not being fit for 21stCentury-type behavior before moving onto actual 21st Century-type behavior like Tweeting about how sad it is that Joan Rivers died. Bird Two is something I’ve always wondered about when it comes to Berkshire Hathaway. But before getting to that, let me repeat...more

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  • Institutional Economics

    I am leaving CIS and returning to financial markets

    This is my last week at CIS. I will be returning to financial markets from whence I came back in 2008. Thanks to Greg Lindsay for giving me a platform to participate in the public policy debate over the last few years. Thanks also to those who contributed to Policy while I was editor over the last 18 months. Policy will continue under a new editor. My new employer won’t be paying me to blog or tweet during business hours, so you will be hearing even less from me on what is already a very low frequency blog. I will still post material here from time to time and link to what I am doing when appropriate. Needless to say, nothing on this web site should be attributed to current or previous employers. This blog has followed me around in various roles since 2003, back whe...more

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  • Institutional Economics

    Wayne Swan on Monetary Offset and the GFC

    Former Treasurer Wayne Swan is releasing some of his briefing notes from the GFC ahead of the launch of his upcoming memoir, The Good Fight. The first instalment from a meeting at the Prime Minister’s residence with the Prime Minister, Treasury Secretary and other senior officials on 4 August 2008 is remarkable for its acknowledgement of monetary offset. Indeed, the notes could just as easily have been written by Scott Sumner: There are three broad considerations the Government would need to keep in mind in taking a decision to engage in discretionary [fiscal] action: • The Reserve Bank through its control over interest rates, determines the overall level of aggregate demand in the economy, and the Bank would likely take account of any fiscal stimulus in its monet...more

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  • Piggington's Econo-Almanac

    July 2014 Housing Data Rodeo

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  • The Prudent Investor

    The Coming Silver Shortage

    Click here to go to the The Prudent Investor homepage for more interesting posts.

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  • Institutional Economics

    The Financial System Inquiry and Macro-Pru

    I have an op-ed in Business Spectator endorsing the sceptical approach to macro-prudential regulation taken in the Murray inquiry’s interim report: Macro-prudential policies are seen as providing policymakers with a more targeted set of policy instruments that might complement or even substitute for changes in official interest rates. However, these instruments also implicate policymakers in making much finer judgements about risks to financial stability as well as the more traditional concern of monetary policy with price stability. A blunt instrument like monetary policy encourages caution in making such judgements. By contrast, more targeted counter-cyclical quantitative controls are a standing invitation to micro-manage credit allocation, but do not in thems...more

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  • Jeff Matthews Is Not Making This Up

    Okay FINRA, Who Had The Call From The FHFA?

     Last night at 4:05 PM E.S.T. the news hit Bloomberg that the Federal Housing Financing Agency was proposing an astoundingly, stupidly strict set of standards for private mortgage insurers who do business with Fannie Mae and Freddie Mac, the net effect of which would be to reduce the availability of credit for home buyers at the very time that credit is needed to keep our economic recovery going. We are not here to explain the issue, only to point out to FINRA, the self-policing body in charge of sniffing out strange behavior in the public markets, the enormous--nay, ginormous--option trades in the two publicly traded stocks most affected by the proposed standards just hours before the news hit the tape, betting on a drop in those stocks. Those two stocks...more

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  • A Dash of Insight

    Weighing the Week Ahead: More Clarity from the Market Message?

    Do you have an opinion about stocks or bonds or foreign exchange? If so, it is easy to find a market message that will support (or contradict) your viewpoint. The "message" of the market has rarely been this confused. With plenty of important news and data this week, the theme will be: Can we find clarity in the market message? Prior Theme RecapLast week I expected a focus on housing. The short trading week would start with Prof. Shiller (that was right) and end with discussion of pending home sales (also right). In between, there was plenty of filler because nothing much seemed to be happening. I lost count of the number of stories about the driverless Google car – interesting, but not very relevant for the markets. Forecasting the theme is an exercise in plann...more

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  • A Dash of Insight

    Weighing the Week Ahead: Will a Sluggish Housing Sector Derail the Economy?

    In a holiday-shortened week, there is plenty of data. The Case-Shiller home-price index will set the tone on Tuesday morning. After last week's soft housing reports, many will be asking, Will housing weakness undermine economic growth? Prior Theme RecapLast week I expected a focus on bonds versus stocks. It was a light week for data and the bond market rally was an ongoing mystery. That theme was as good as any, but nothing really stood out. The appetite for content created many "fluff" pieces and trading was very quiet. As long as you did not take small moves seriously, there was an opportunity to do some buying at mid-week. Forecasting the theme is an exercise in planning and being prepared. Readers are invited to play along with the "theme forecast." I spend a l...more

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  • A Dash of Insight

    The Sound of Silence

    The insightful investor develops solid indicators and then follows the data. This may seem obvious, but instead…. Many pundits start with the conclusion and then search for evidence.  [For complete appreciation of today's post, follow the links for the relevant music.] There are a number of interesting current examples. In various prior posts I have suggested that these were not really important leading indicators, so I am not flip-flopping by drawing inferences from improved conditions. Others will do that via their silence. I suggest that you recall the scary recent warnings on these themes – now all showing improvement – and note the sound of silence:  Margin debt. Remember how you were supposed to be scared witless (TM OldProf) by this event? It appea...more

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  • Felix Salmon

    Post Felix

    By Shane Ferro Today is Felix’s last day at Reuters. Here's the link to his mega-million word blog archive (start from the beginning, in March 2009, if you like). Because we’re source-agnostic, you can also find some of his best stuff from the Reuters era at Wired, Slate, the Atlantic, News Genius, CJR, the NYT, and NY Mag. There’s also Felix TV, his personal site, his Tumblr, his Medium archive, and, of course, the Twitter feed we all aspire to. Counterparties may have been the brainchild of Felix and the recently departed Ryan McCarthy, but the blog, site, newsletter, and Twitter feed will continue to exist in their absence. It will be run by Ben Walsh and Shane Ferro, with some non-trivial amount of snark. Today we focus on the reason Felix started Counterparti...more

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  • Felix Salmon

    The Piketty pessimist

    By Felix Salmon This chart comes from the World Economic Forum’s 2014 Global Risks Report, which came out just before Thomas Piketty’s book started becoming the topic of discussion in economic and plutocratic circles.* You can clearly see what you might call the rise of inequality-as-an issue: before 2012 it’s nowhere to be found, but since then it’s been consistently in the top spot. My prediction is that in 2015, thanks to Piketty, the WEF will start talking less about income inequality, and more about wealth inequality. The big question, though, is whether inequality is really much of a risk at all. After all, from the point of view of the average billionaire WEF delegate, inequality would seem to look much more like a reward. Chrystia Freeland has a hopeful...more

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  • Economix

    Economix Meets the Gales of Change

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  • Economix

    Economix Meets the Gales of Change

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  • Felix Salmon

    The most expensive lottery ticket in the world

    By Felix Salmon No Exit, the new book from Gideon Lewis-Kraus, should be required reading for anybody who thinks it might be a good idea to found a startup in Silicon Valley. It shows just how miserable the startup founder’s life is, and raises the question of why anybody would voluntarily subject themselves to such a thing. A large part of the answer is that Silicon Valley is gripped by a mass delusion, compounded by a deep “fake it til you make it” attitude toward success. Why do so many people in Silicon Valley want to be founders? Because every founder they meet is always killing it, crushing it, having massive success, just about to close a huge round, etc etc. At some level, they must know this is impossible: if 90% of startups fail, it simply can’t be the...more

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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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  • 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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  • 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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  • 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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  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

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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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