EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • Dealbreaker

    Outlook For Fannie, Freddie Fans Not Good

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  • The Big Picture

    The Strange Things People Google in Every State

    Source: WonkBlog

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  • Dealbreaker

    Who Wants To Work At A Hedge Fund?

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  • FT Alphaville

    Is Ukraine’s Russian bond ‘official’ debt or not?

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  • Dealbreaker

    Bonus Watch ’14: Bank of America CEOs (Make Less Than Their Underlings)

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  • Real Time Economics

    SNB’s Zurbruegg: Franc Remains Significantly Overvalued

    ZURICH–Negative interest rates implemented by the Swiss National Bank two months ago would require more time before they succeed in weakening the franc, a member of the bank’s governing board said on Thursday, adding that the currency remains “significantly overvalued.” SNB board member Fritz Zurbruegg said that the negative rates and a decision to scrap a cap on the value of the Swiss franc would pose a challenge for the country’s economy. But the rates, which are effectively a 0.75% charge on bank deposits, will help contain the strength of the franc and give the economy room to adjust, he said. Mr. Zurbruegg’s comments come two months after the SNB scrapped a 3 1/2-year-old policy, which capped the franc at 1.20 francs per euro, a move designed to bl...more

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  • Calculated Risk

    Freddie Mac: 30 Year Mortgage Rates decrease to 3.69% in Latest Weekly Survey

    From Freddie Mac today: Mortgage Rates Move Down AgainFreddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving down again across the board. Average fixed rates that continue to run below four percent will help keep affordability high for those in the market to buy a home as we head into the spring homebuying season. ...30-year fixed-rate mortgage (FRM) averaged 3.69 percent with an average 0.6 point for the week ending March 26, 2015, down from last week when it averaged 3.78 percent. A year ago at this time, the 30-year FRM averaged 4.40 percent. 15-year FRM this week averaged 2.97 percent with an average 0.6 point, down from last week when it averaged 3.06 percent. A year ago at this time, th...more

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  • naked capitalism

    2:00PM Water Cooler 3/26/15

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  • The Housing Bubble Blog

    HBB Fundraising Week

    Help The Housing Bubble Blog stay online! Please make contributions through the PayPal link or the mailing address in the sidebar.

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  • Real Time Economics

    Fed Shouldn’t Raise Rates Yet Because Job Market Still Ailing

    The Federal Reserve should be very cautious about raising interest rates just because the headline unemployment rate is falling, according to new research from two former central bank officials who are concerned the often-cited figure vastly overstates improvements in the job market. David Blanchflower, a Dartmouth College economics professor and former member of the Bank of England’s monetary policy committee, teams up with Andrew Levin, an ex-Fed board economist now at the International Monetary Fund, to argue that the U.S. employment outlook is much weaker than indicated by the 5.5% jobless rate registered in February. “Underemployment and hidden unemployment currently account for the bulk of the U.S. employment gap,” which the authors estimate to be around 3.3...more

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  • Abnormal Returns

    Thursday links: failing to deliver

    MarketsWhat happens after a big down day for stocks? (adamhgrimes.com)How expensive are tech stocks? (patrickoshag.tumblr.com)StrategySomeone, somewhere is outperforming your portfolio. (pragcap.com)New hedge funds with pedigree were able to raise capital in 2014. (cnbc.com)Robo-advisorsHow much tax savings can the robo-advisors generate for clients? (msantoli.tumblr.com)Vanguard has no need for outside funds in their Personal Advisor Services platform. (investmentnews.com)Northwestern Mutual to buy LearnVest. (bloombergview.com)Do individual investors really need access to hedge funds? (ftalphaville.ft.com)CompaniesThe Heinz-Kraft ($KRFT) is "really interesting." (brooklyninvestor.blogspot.com)Symbols: $KRFT Now matter how you slice it Berkshire Hathaway ($BRKB) has do...more

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  • My voice and noise on subprime bank regulations

    Financial regulations, if wrong, could destroy the economy of a nation, and is therefore an issue of utmost importance for national security.

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  • Abnormal Returns

    Longform links: siren’s song

    Longform linksThe mirage that is alternative investments. (rpseawright.wordpress.com)Technology is set to make all manner of financial intermediaries obsolete. (institutionalinvestor.com)Will publishers be able to resist the siren's song of Facebook ($FB)? (stratechery.com)Symbols: $FB A profile of investor Chris Sacca. (forbes.com)A Q&A with Bob Bowman of MLB Advanced Media. (techcrunch.com)A profile of Damien Patton, CEO of Banjo the most important social media company you have not heard of....yet. (inc.com)...more

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  • My voice and noise on subprime bank regulations

    Current credit-risk-weighted capital (equity) requirements for banks, besides being stupid and dangerous, are immoral

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  • Real Time Economics

    Thomas Piketty Says Labor’s Share of Income Is Declining, But Is It?

    Two sorts of income inequality have preoccupied scholars in recent years. The first is the growing gap between top earners and those in the middle and at the bottom. The second  is the gap between all of labor on the one hand, and capital (such as profits, interest and rent) on the other. Between 1980 and 2014, for example, labor income (wages, salaries and compensation such as benefits) fell from 58.4% of gross domestic product in 1980 to 52.2%. The capital-labor split leaped to prominence when the French economist Thomas Piketty’s book Capital in the Twenty First Century became a surprise bestseller last year. He cited the rise in capital’s share of income in rich countries between 1970 and 2010 as proof of his thesis that rising wealth and inequality are inheren...more

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  • Calculated Risk

    Kansas City Fed: Regional Manufacturing Activity Declined in March

    From the Kansas City Fed: Tenth District Manufacturing Activity Declined The Federal Reserve Bank of Kansas City released the March Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity declined in March, and producers’ expectations moderated somewhat but remained slightly positive.“We saw our first monthly decline in regional factory activity in over a year," said Wilkerson. “Some firms blamed the West Coast port disruptions, while producers of oil and gas-related equipment blamed low oil prices.”Tenth District manufacturing activity declined in March, and producers’ expectations moderated somewhat but remained slightly po...more

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  • The Big Picture

    More Signs of Wage Inflation

    From Torsten Sløk of Deutsche Bank: The first chart below shows that over the past year employer costs have risen significantly. The second chart shows that the rise is driven partly by a significant increase in bonuses. The third chart shows that the uptrend in wages can been seen across all parts of the services sector. And the fourth chart shows that wages are rising faster for unionized workers. This data, the Employer Costs for Employee Compensation (ECEC), is created using the same raw data that goes into the Employment Cost Index (ECI). The difference between the ECI and the ECEC is that the ECI controls for changes in the industrial-occupational composition of jobs. In other words, the ECI is intended to indicate how the average compensation paid by employers w...more

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  • naked capitalism

    Mathew D. Rose: Greece – Plus ça change

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  • The Capital Spectator

    An Unexpected Drop For Jobless Claims

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  • Calculated Risk

    Weekly Initial Unemployment Claims decreased to 282,000

    The DOL reported:In the week ending March 21, the advance figure for seasonally adjusted initial claims was 282,000, a decrease of 9,000 from the previous week's unrevised level of 291,000. The 4-week moving average was 297,000, a decrease of 7,750 from the previous week's unrevised average of 304,750.There were no special factors impacting this week's initial claims. The previous week was unrevised.The following graph shows the 4-week moving average of weekly claims since January 2000.Click on graph for larger image.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 297,000.This was below the consensus forecast of 293,000, and the low level of the 4-week average suggests few layoffs....more

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  • The Big Picture

    10 Thursday AM Reads

    Hard to believe, but this is our first morning train reads of the post-Clarkson era: • Stock Market Downdraft Is a Buying Opportunity (Barron’s) but see Nasdaq Composite Falls Most Since April as Tech Shares Tumble (Bloomberg) • The biggest mistake investors are making right now (Fortune) • How Much Cash Is Too Much Cash for Your Portfolio? (US News) • Weak Demand? Strong Dollar? U.S. Businesses Aren’t Investing Much (Real Time Economics) but see Economist Says U.S. Consumer Spending Is About to ‘Surge’ (Bloomberg) • How China used more cement in 3 years than the U.S. did in the entire 20th Century (WonkBlog) Continues here     ...more

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  • FT Alphaville

    Rocket from the shelf

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  • FT Alphaville

    Markets Live: Thursday, 26th March, 2015

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  • The Housing Bubble Blog

    People Just Don’t Want To Hang Onto Those Loans

    CBS Denver reports from Colorado. “Real estate brokers say year over year they’re seeing a lack of inventory in the Colorado housing market. Real estate agent Andrew Nagel says some of the brokers in his RE/MAX of Cherry Creek office are astonished by how many offers are going into some resale homes. Nagel says about 30 percent of his buyers are now choosing new construction, which also comes with some built-in perks. ‘In 6 or 9 months that pricing is going to go up and up and up, so by the time you close and move into your house you’ve built in some equity,’ he said.” The Journal Sentinel in Wisconsin. “With home prices slowly increasing, consumer confidence rising and interest rates still low, home equity lines of credit are making a ...more

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  • naked capitalism

    Links 3/26/15

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  • The Capital Spectator

    Managing Expectations Down

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  • The Capital Spectator

    Initial Guidance | 26 March 2015

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  • The Housing Bubble Blog

    Bits Bucket for March 26, 2015

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

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  • The Skeptical Speculator

    Stocks fall, oil rises

    Stocks fell sharply on Wednesday.The S&P 500 fell 1.5 percent while the Nasdaq Composite fell 2.4 percent.The STOXX Europe 600 fell 1.1 percent.However, oil rose to a two-week high on Wednesday.It rose further early on Thursday as Saudi Arabia and its Gulf Arab allies began a military operation in Yemen after Houthi rebels drove Yemen's president from his capital Sanaa....more

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  • Macro Man

    Running in place

    A 1.5% downday, and the SPX is basically unchanged on the year.   There's a reason that Macro Man hasn't written too much about equities recently, and that's it in a nutshell.  For the first three months of the year, US equities have been a bloke on a treadmill, running at a brisk pace simply to stay in place.Not that this has come as any great surprise.  In October, Macro Man noted that liquidity factors were the primary explanatory variable for the S&P's stellar run of performance over the past few years, and with the tap being turned off (in the US at least) there was naturally some reason for concern over future returns.Indeed, more than a year ago Macro Man performed an analysis of the SPX's return and vol by Fed policy regime; he thought th...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    The Fossil Fuel Divestment Debate for Fiduciaries: It’s the Portfolio….

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  • Steve Keen's Debtwatch

    1890s March of the unemployed on Washington

    During the 1890s Depression, the businessman Jacob Coxey developed the idea that the unemployed should be hired by the government to work on the badly dilapidated roads. His idea culminated in a march on Washington by over 10,000 people, and his arrest for trampling Congress’s lawns. This 1994 documentary by the Massillon Museum tells his story. Jacob Coxey was riding home one day and experienced the poor conditions of the road in the 1890s. He also saw many unemployed men walking the streets looking for work. He had the idea to put unemployed men to work towards problems like fixing roads. He took this idea and made the Good Roads Bill in 1892. He presented it to Congress, but that’s as far as it went. He teamed up with Carl Browne. To raise awareness and sup...more

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  • Abnormal Returns

    Wednesday links: substituting risks

    MarketsUS REITs lead major asset class performance over the past year. (capitalspectator.com)Sentiment is overwhelmingly in favor of the US dollar. (shortsideoflong.com)Chinese stocks have run pretty far, pretty fast. (ftalphaville.ft.com)StrategySmall cap quality is on sale. (blog.abglobal.com)Bonds are supposed to be boring. (awealthofcommonsense.com)Kraft-HeinzKraft ($KRFT) to merge with Heinz. (nytimes.com)Symbols: $KRFT Why is Warren Buffett swapping Heinz for Kraft? (kiddynamitesworld.com)Is Warren Buffett a hypocrite on private equity? (fortune.com)Corporate financeTraditional pensions are going away for the rank-and-file but not for the C-suite. (wsj.com)What constitutes 'corporate sustainability? Calpers wants to know. (nytimes.com)FinanceConcentration risk: v...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Intraday Momentum Confirmed: Day Traders Credited

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  • Dr. Housing Bubble Blog

    California rental rates based on counties and a trip into Huntington Park for real estate deals: When will the renting trend reverse?

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  • The Aleph Blog

    Opinions on the Market

    I was on RT Boom/Bust yesterday with Erin Ade, and got to talk about:AppleThe “Tech Bubble”The “Bond Bubble”Different sectors of the stock market, and their prospects.This was the first half of the interview.  If they run the second half, I will post it.  Note my modest confusion on the tech bubble as I forget the second thing and try to recall it, while vamping for time.  I don’t often glitch under pressure, but this was a bad time to have a foggy memory (on something that I wrote myself).  Sigh. Full disclosure: positions in sectors mentioned, but no positions in any specific securities mentioned ...more

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  • The Skeptical Speculator

    Stock market looking like 1931?

    US stocks are currently trading near record highs. However, history shows that the trading pattern so far in 2015 may not bode well for stock market returns going forward.An article in The Wall Street Journal last week reported that analysis by Bespoke Investment Group showed that closing stock prices so far in 2015 were most similar to the closing prices in 1931. That year, the stock market posted its worst yearly return on record, falling 54 percent from 19 March.Other similar years have not been so bad though. In fact, in computing the 10 years with the highest stock-market correlations to 2015, Bespoke found that the market rose from here on out in every year but 1931, averaging a gain of 8.1 percent. That is better than the average gain for all years since 1928 of ...more

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  • Macro Man

    Not much to say

    Apologies for the radio silence over the last few days, but Macro Man hasn't really got a lot to say.  Illiquid market churn is not "macro"; your author has historically performed best while looking through the noise, so that's what he's trying to do at the moment.One interesting observation is that this little correction in EUR/USD, some 6 big figures peak to trough, represents the largest retracement of the entire downdraft off of the peak.  Classic Fibonacci retracement levels remain quite far away.That the Fed now feels comfortable talking about the dollar is certainly interesting to note, though at this juncture Macro Man remains of the view that they view it as an input to the decision-making process rather than a policy goal in and of itself.  Neve...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    More Global Mandates, Fewer EM Mandates, and Other Changes

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  • Steve Keen's Debtwatch

    Science Versus Pseudoscience

    I participated in a very enjoyable discussion with philosopher Ken Gemes and science author David Bodanis (author of e=mc2: A Biography of the world’s most famous equation) on science versus non-science–with particular attention to economics. You can listen to the hour-long discussion by clicking on this link: Philosofa Podcast. The full episode details (including the podcast and a downloadable MP3 file) are available here: The Philosofa Episode 2: Science Versus Pseudoscience. ...more

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  • Emerging markets

    Asia: Patience pays off as Citic/CLSA makes its mark

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  • Emerging markets

    The battle to bank Asia’s next corporate champions

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  • Ticker Sense

    March 23rd Blogger Sentiment Poll

    Blogger Sentiment Poll Participants: 24/7 Wall St (-) 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 (-) GEI... ...more

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  • The Skeptical Speculator

    Stocks surge while investors turn to junk bonds

    Markets rose last week. The MSCI All-Country World Index surged 3.2 percent as several major stock market indices broke or came close to all-time highs. The FTSE 100 Index soared 4.2 percent to close at a record high. The Russell 2000 Index rose 2.8 percent to an all-time high. The Nasdaq Composite Index soared 3.2 percent, the Standard & Poor’s 500 Index jumped 2.7 percent and the STOXX Europe 600 Index rose 1.9 percent. The three indices are now around 0.4 percent off their respective record highs. Stocks rose last week as the Federal Reserve indicated after its monetary policy meeting on Wednesday that it was not in a hurry to raise interest rates. Bonds also rose last week. The yield on the United States 10-year Treasury note fell 18 basis points to 1.93 percent. ...more

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  • Piggington's Econo-Almanac

    February 2015 Housing Data Rodeo

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  • The Aleph Blog

    Two Warning Signs

    Photo Credit: Kevin TrotmanBefore I write this evening, I have updated the blog’s theme so that it is more readable on mobile devices.  I’ve tried to preserve most of the best of the former design.  Let me know what you think.  Also, I have tried to get commenting to work using Jetpack.  For those that want to comment, if you can’t, drop me an email, and I will try to work it out.  I prefer more interaction than less, even if I can’t always get around to responding.On to the two warning signs: the first article is The Fuzzy, Insane Math That’s Creating So Many Billion-Dollar Tech Companies.  This is about the terms that some private equity investors are getting that help to support current valuations of companies.  Here are a few ex...more

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  • My voice and noise on subprime bank regulations

    Our economies, bloated by QEs and low interest gases, and the lack of real risk-taking, need to fart… urgently!

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  • Steve Keen's Debtwatch

    Should governments run surpluses?

    My talk at the “‘Economics With Justice” seminar series at the The School of Economic Science in Mandeville Place, London. I cover where the argument for austerity came from, a thought experiment about what will happen when a government runs a sustained surplus, and a model showing what happens when the government does run a surplus. 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) : ...more

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  • Dr. Housing Bubble Blog

    The return of risky loans: Freddie Mac offering a 3 percent down loan called Home Possible Advantage targeted to cash strapped buyers. FHA loans and interest only loans also permeate market.

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  • DRS » Blog

    The ISDA 2014 Collateral Agreement Negative Interest Protocol is so 2015

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  • DRS » Blog

    The ISDA 2014 Collateral Agreement Negative Interest Protocol is so 2015

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  • DRS » Blog

    Swap margin delay non-shock

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  • DRS » Blog

    Swap margin delay non-shock

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  • The Aleph Blog

    Deeds, not Words? Or, Say Less and Mean More

    Crawling to the first tightening moveThere was a lot of hoopla yesterday over the FOMC removing the word “patient” from its statement.  But when you read the sentence that replaced the sentence containing the word patient, you shouldn’t think that much has changed:Consistent with its previous statement, the Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. This change in the forward guidance does not indicate th...more

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  • DRS » Blog

    EBA Demands Insight into Financial Contracts

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  • DRS » Blog

    EBA Demands Insight into Financial Contracts

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  • Macro Man

    Dot-dot-dot, dash-dash-dash, dot-dot-dot

    Well, that was....intense.The Fed dropped the word "patient" and explicitly left the door ajar for a move in June should circumstances warrant.   However, the real sting in the tail was in the SEP, where the infamous dot-plot ratcheted lower in response to downgrades to the growth and inflation forecasts.The end-2015 median is now at its lowest level since before the Taper Tantrum.Market reaction was swift, and Yellen's press conference did little to dissuade the participants from buying securities and selling the dollar.  For today at least, score this one in favour of the monetary heroin addicts.Probably unsurprisingly, the most vicious price action took place in the most-positioned market, EUR/USD.  Pre-Fed short covering evolved into post-Fed sto...more

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  • footnoted*

    Hunting for Perks in Proxy Season

    Proxy season is heating up, and every year we come across perks that don’t quite fit the mold. Once upon a time, we used to write about these sorts of perks more regularly. But lately, to borrow a line from the hit movie, Frozen, we tend to “Let it Go.” Still, one of those unusual perks remains close to our heart: the company-owned sports lodge. That’s because back in 2008, we discovered  A. Schulman’s fish camp, which won Footnoted’s “Worst Footnote of 2008.” There was also the  executive dude ranch that we wrote about in 2012. We suppose that reasonable people might disagree on the need for this type of thing. After all, when it comes to perks and the “business reasons” for doling them out, there’s probably n...more

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  • A Fistful Of Euros

    When Will The ECB Start To Taper?

    What matters isn’t what you think should happen, it’s what others think will happen that counts. Funny days these, the world seems to be constantly turning upside down. I could be talking about the arrival of negative interest rates in many European economies, but I’m not. What I have in mind is the crossover that seems to be taking place in the perceived fortunes of the US and the Euro Area economies. At the end of 2014 it was all “Europe bad, USA good” to the point that most observers were expecting an imminent rate rise from  the Federal Reserve, even while the Euro was in such a bad state that ECB was being steadily pushed – kicking and screaming – towards a full blown programme of sovereign bond buying QE. But now, onl...more

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  • Dr. Housing Bubble Blog

    The housing crunch with a taste of rental squeeze: Incomes down and home prices up. Los Angeles families took a hit to their household incomes yet home prices soared.

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: February 2015

    Today’s New Residential Construction Report showed mixed results with total permit activity increasing 3% since January while total starts dropped a whopping 17.0% over the same period.Single family housing permits, the most leading of indicators, declined 6.2% from January to 620K single family units (SAAR), and rose 2.8% above the level seen a year earlier but still remained well below levels seen at the peak in September 2005. ...more

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  • Ticker Sense

    March 2nd Blogger Sentiment Poll

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

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  • Paper Economy - A US Real Estate Bubble Blog

    NAHB/Wells Fargo Home Builder Sentiment: March 2015

    Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that overall assessments of housing activity declined in March with the composite HMI index falling to 53 while the "buyer traffic" index declined to a level of 37 from 39 in the prior month.Overall, conditions for new home construction appear to have softened some recently and still remain below the peak assessments see prior to the Great Recession. ...more

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  • Mises Institute

    The Next Generation of Austrian Economics: Essays in Honor of Joseph T. Salerno

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  • Richard's Real Estate and Urban Economics Blog

    LA has zoned itself out of the ability to house its residents (h/t Matthew Glesne)

    Once upon a time, the zoning in Los Angeles would have allowed for 10 million residents to live within its municipal boundaries.  Greg Morrow, in his UCLA dissertation, "Homeowner Revolution: Democracy, Land Use and the Los Angeles Slow Growth Movement 1965-1992," documents how this was eroded over time:So LA really did create a moat around itself and pulled up the drawbridge.  For those of us who think the blessings of cities should be shared widely, this is a shame....more

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  • Emerging markets

    Indian ECM volumes set to rise, while fees stay low

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  • A Fistful Of Euros

    Why Is Spain’s Population Loss An Economic Problem?

    “Growth theory was invented to provide a systematic way to talk about and to compare equilibrium paths for the economy. In that task it succeeded reasonably well. In doing so, however, it failed to come to grips adequately with an equally important and interesting problem: the right way to deal with deviations from equilibrium growth……..if one looks at substantial more-than-quarterly departures from equilibrium growth……….. it is impossible to believe that the equilibrium growth path itself is unaffected by the short- to medium-run experience…….So a simultaneous analysis of trend and fluctuations really does involve an integration of long-run and short-run, or equilibrium and disequilibrium. “ Robert Solow, Nobel Acceptance Speech When the IMF ...more

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  • A Fistful Of Euros

    Cyprus and Iceland: a tale of two capital controls

    Both in Cyprus and Iceland foreign funds flowed into the islands, in the end forcing the government to make use of extreme measures when the tide turned. These measures are normally called ‘capital controls’ which in these two cases hides the fact that the measures used are fundamentally different in all but name. In Iceland, the controls contain the effect of lacking foreign currency, effectively a balance of payment problem – in Cyprus, the controls were a way of defending banks against bank run, i.e. preventing depositors to move funds freely. It is a sobering thought that two European countries now have capital controls: Iceland and Cyprus; sobering for those who think that in modern times capital controls are only ever used by emerging markets and other immat...more

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  • Mises Institute

    A Short History of Man: Progress and Decline

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  • Paper Economy - A US Real Estate Bubble Blog

    Weekly Unemployment Claims: Initial and Continued March 05 2015

    Today’s jobless claims report showed a an increase to both initial and insured unemployment claims as seasonally adjusted initial claims remained above the 300K level. Seasonally adjusted “initial” unemployment claims increased 7,000 to 320,000 claims while seasonally adjusted “insured” claims increased by 17,000 to 2.421 million resulting in an “insured” unemployment rate of 1.8%. ...more

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  • Jeff Matthews Is Not Making This Up

    Charlie Named Name

    Ned Isakoff: “You got me blacklisted from Hop Sing’s?”Delivery Man:  “She named name!”—Seinfeld, “The Race”  Like Elaine Benes in that Seinfeld episode, Charlie Munger named name. Two names, in fact: Greg Abel and Ajit Jain. Unlike Elaine Benes’s name-naming, however, the two named by Munger have nothing to do with Communist agitation and the destruction of capitalism as we know it—far from it.   Rather, they have everything to do with Capitalist orthodoxy in its purest, most meritocratic form: who might succeed Warren Buffett as CEO of Berkshire Hathaway under the scenario, as Munger puts it, “Buffett left tomorrow.” Here’s the direct quote from Munger’s comments written for the 2014 Chairman’s Lette...more

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  • The Baseline Scenario

    “Middle-Class Economics”

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  • Richard's Real Estate and Urban Economics Blog

    It is hard to feel urban form sometimes.

    I have spent a fair amount of time in Sao Paulo over the past 3-4 years, and always thought it sprawled more than LA, because it takes forever to get from one side of the place to the other.  So was I surprised when I went to Google Earth and looked at both of them from the same elevation. Here is LA:Now here is SP:It is far more compact.  Metro LA has about 18 million people; SP has about 20 million. But it takes about 2 hours to get from Santa Clarita in the west to San Bernardino in the east--the distance between the two is 85 miles; it can take four hours to go just 30 kilometers in SP.  Sao Paulo feels much larger to me....more

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  • footnoted*

    Goldman Sachs says “People are People”

    Buried in the 405-page tome that Goldman Sachs filed at 9:44 pm last Friday — several hours after the SEC closed its electronic window, which means the filing did not become publicly available until Monday morning — was a very interesting (and new) disclosure that provided some insight into the company’s view of the world and should be welcome news to Goldman’s 34,000 employees. In an age of high frequency trading and big data, the company said that human beings are the company’s greatest resource. This disclosure came buried at the bottom of a 1,500 word risk factor on cyber-security attacks — a risk factor that has grown significantly at many companies this 10-K season, mostly because of the growing number of high-profile attacks on...more

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  • Ticker Sense

    February 23rd Blogger Sentiment Poll

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

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  • footnoted*

    A very good deal at Ross Dress for Less

    Anyone who’s ever shopped at a Ross Dress for Less knows what to expect: fluorescent lights highlighting piles of off-price clothes and shoes. Shopping there is more about the hunt for a good deal than anything else. Judging by this 8-K filed earlier today, a former Ross executive has found an unusually good deal — one most Ross shoppers could only fantasize about. For the next two years, Doug Baker, the former chief merchandising officer at Ross’ dd’s DISCOUNTS, will collect his regular base salary of $960,000. He’ll also get bonuses — up to 75% of his base salary — and accelerated vesting in stock. All told, it works out to just over $7 million. In a curt, one-sentence filing back on Jan. 28, the company disclosed that Baker&#...more

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  • Richard's Real Estate and Urban Economics Blog

    Should Finance Departments Pay Pigou Taxes?

    The Economist leads me to an article by Stephen G Cecchetti and Enisse Kharroubi: The purpose of this paper is to examine why financial sector growth harms real growth. We begin by constructing a model in which financial and real growth interact, and then turn to empirical evidence. In our model, we first show how an exogenous increase in financial sector growth can reduce total factor productivity growth.2 This is a consequence of the fact that financial sector growth benefits disproportionately high collateral/low productivity projects. This mechanism reflects the fact that periods of high financial sector growth often coincide with the strong development in sectors like construction, where returns on projects are relatively easy to pledge as collateral but prod...more

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  • The Baseline Scenario

    What Is Citigroup Hiding From Its Shareholders Now?

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  • Piggington's Econo-Almanac

    January 2015 Housing Data Rodeo

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  • The Baseline Scenario

    Tax Breaks (for the Rich) Are Forever

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  • VIX and More

    Average Annual Normalized VIX Futures Term Structure, 2004-2014

    One graphic I post periodically that never fails to generate a great deal of interest among traders, strategists and other volatility aficionados is my normalized VIX futures term structure graph. From 2008 – 2013, the annual normalized term structure was notable in that almost every year was an outlier in one way or another. For instance, 2012 and 2013 were the two years with the steepest contango in history, while 2008, 2009 and 2011 represent three of the four years (2007 being the fourth) with the flattest term structure. And 2014? It could not have been more average. If one combines all the years from 2004 to 2014 and creates an “average year” (i.e., the wide gray line on the chart) then 2014 (double blue line) comes closest to that average. [source(s): ...more

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  • VIX and More

    The Year in VIX and Volatility (2014)

    This is the seventh year in a row I have offered a retrospective look at the year in VIX and Volatility, which is my attempt to cram some of the highlights of the year in volatility onto one eye chart graphic with a (somewhat) manageable number of annotations. In aggregate, 2014 was a very quiet year for the VIX, with a mean close of just 14.19 for the year, which is the lowest the VIX has been since 2006 and third lowest since 1995. On the other hand, as I recently documented, VIX spikes were common last year, with 2014 registering the third highest number of 20% VIX spikes since the beginning of VIX data, in 1990. In short, the VIX was susceptible to large spikes, but these were typically followed by strong mean-reverting declines. For example, the peak VIX of 31.06 ...more

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  • VIX and More

    Top Posts of 2014

    Since I launched VIX and More some eight plus years ago, I have devoted one post to highlighting the top 25 most-read posts of each year. I do this in part for archival purposes: to see what is important to readers and how their interest in various issues changes over time. I also hope that these aggregations of most-read posts will serve as relatively easily accessible repositories of high-quality material for the benefit of new readers and long-term readers alike. During 2014, the blog saw an extended hiatus for the first time in its history, largely due to events arising from the passing of my father. For this reason, I am limiting the number of top posts for the year to thirteen, largely because Song for My Father* ended the year in the #13 slot. Looking ahead, vo...more

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  • Jeff Matthews Is Not Making This Up

    From Cleaning Harbors to Feeding Roughnecks: “Next Year in Jerusalem!”

     The Canadian tar sands have been very good to Clean Harbors, a perennial Wall Street favorite that evolved from a disaster cleanup business (for which the company’s web pages still carry a plug at the bottom: “For 24-Hour Emergency Response, call 800.OIL.TANK”) into a diversified industrial service company through 35-plus acquisitions costing about $2 billion over 25 years. The tar sands business came with the 2009 acquisition of Eveready, and so swiftly did CLH expand deeper into so-called unconventional energy (everything from feeding and housing roughnecks in lodges to hauling out drilling waste) that oil and gas exploration and production services went from 0% of the company’s total business in 2008 to 27% in 2012, before the $1.25 billion acquisi...more

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  • Jeff Matthews Is Not Making This Up

    The NotMakingThisUp Book Review: The Best Least Looked-Forward-To Book I Have Ever Received, John Cleese's "So, Anyway..."

     I received for Christmas the least looked-forward-to book I have ever received: John Cleese’s “So, Anyway…”.   Cleese, of course, is a founder of Monty Python, the wildly successful British comedy group that took male teenagers by storm in the early 1970s and was considered inheritor to The Beatles’ mantle as conquerors of America by none other than George Harrison (according to his friend Eric Idle, another Python).  Cleese is also co-creator, co-writer, producer and star of what has been called the best TV sitcom ever created, Fawlty Towers.   Thus, for a certain generation—i.e. male baby-boomers who came of age when Monty Python was laying waste to all previous notions of what was funny—a book, any book, by John Clees...more

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  • FinanceProfessor.com

    For investors, it’s a perfect time to go back to the basics - The Washington Post

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  • Piggington's Econo-Almanac

    November 2014 Housing Data Rodeo

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  • Mises Institute

    Secession, State, and Liberty

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  • Institutional Economics

    Capital Gains Tax Reform in Canada: Lessons from Abroad

    The Fraser Institute has released a new volume on international experience with capital gains taxes. I wrote the chapter on New Zealand, with some reference to Australia. Australia was deemed too similar to Canada to warrant a chapter in its own right....more

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  • The Street Light

    Transfer Pricing Economics

    I'd like to announce that after a long hiatus from blogging, I'm taking it up again in a new forum.  The new blog, Transfer Pricing Economics, is primarily devoted to exploring my particular area of professional specialty, namely "transfer pricing".  If that term doesn't mean anything to you, then feel free to check out my brief explanation of transfer pricing. My aim is to expose and analyze the connections between the arcane world of transfer pricing and broader developments in the economic and financial world. And the connections are significant: the rules and economic logic of transfer pricing have a direct impact on trillions of dollars of international trade every year. So please feel free to check in on and contribute to the discussions about these...more

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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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  • FinanceProfessor.com

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

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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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  • 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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  • 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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  • Accrued Interest

    Getting Involved in Bitcoin

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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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  • Accrued Interest

    Why You Should Dump Those Shares of Tesla Now

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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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  • Accrued Interest

    HOW CAN THE MARKET REACTION TO THE GOVERNMENT SHUTDOWN AND DEBT CEILING DEBATE BE A GOOD THING FOR INVESTORS?

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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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  • 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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Richard Wood Richard Wood

Richard has published papers on wages policy, the taxation of financial arrangements and macroeconomic issues in Pacific island countries. Views expressed in these articles are his own and may not be shared by his employing agency. He is the author of How to Solve the European Economic Crisis: Challenging orthodoxy and creating new policy paradigms