EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • Calculated Risk

    Wednesday: New Home Sales, Personal Income, Durable Goods, Unemployment Claims, Pending Home sales

    Earlier the FDIC released the Quarterly Banking Profile for Q3 today. Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $38.7 billion in the third quarter of 2014, up $2.6 billion (7.3 percent) from earnings of $36.1 billion the industry reported a year earlier. The increase in earnings was mainly attributable to a $7.8 billion (4.8 percent) increase in net operating revenue (the sum of net interest income and total noninterest income), the biggest since the fourth quarter of 2009. ...The number of "problem banks" fell for the 14th consecutive quarter. The number of banks on the FDIC's "Problem List" declined from 354 to 329 during the quarter, the lowest since the 305 in the first quar...more

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  • Real Time Economics

    South Korean Firms Turn to China

    South Korean companies like Samsung Electronics are facing challenges in China from cheaper local rivals who are copying their technology. Samsung, for instance, has lost smartphone market share to Chinese producer Xiaomi Inc. Woohae Cho/Bloomberg News In the late 1950s, South Korea was a poor country emerging from a devastating three-year civil war. Within a generation, the nation entered the ranks of rich nations, forging homegrown champions like Samsung Electronics Co. and Hyundai Motor Co. The U.S. had backed South Korea in the war and afterward became its largest trading partner, taking in a fifth of South Korea’s $150 billion in exports by 2001. The situation changed as China’s economy bounded ahead in in the early 2000s. South Korean manufacturers set ...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    The Economics of Happiness

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  • Dealbreaker

    Write-Offs: 11.25.14

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  • Dealbreaker

    “Cliff Asness Or Teenage Twitter Rant?”

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  • The Big Picture

    10 Tuesday PM Reads

    My afternoon train reads: • Can Automakers Fix Themselves? (Bloomberg View) • Gross versus Gundlach: Who Has More Skill? (Advisor Perspectives) • How pensions make investing too complex (Fortune) • Millennial Investors Don’t Trust The Market – And They Shouldn’t (Meb Faber) but see The Market Is Your Friend. Really: One Millennial’s Advice to Peers (WSJ) • Hire An Advisor (Irrelevant Investor) • Bloviators vs. Experts (Kris Venne) • Are Low Interest Rates Responsible For High Stock Valuations? (The Fat Pitch) see also Low Inflation: Why It Will Persist (Barron’s) • A Persuasive Chart Showing How Persuasive Charts Are (The Upshot) • Why Uber Fights (Stratechery) • Taylor Swift says streaming is bad for artists. Is she right? (...more

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  • Dealbreaker

    SEC Apparently Spending A Small Fortune On Rule Requiring Companies To Do Two Very Simple Things

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  • Calculated Risk

    Freddie Mac: Mortgage Serious Delinquency rate declined in October, Lowest since December 2008

    Freddie Mac reported that the Single-Family serious delinquency rate declined in October to 1.91% from 1.96% in September. Freddie's rate is down from 2.28% in October 2013, and this is the lowest level since December 2008. Freddie's serious delinquency rate peaked in February 2010 at 4.20%. These are mortgage loans that are "three monthly payments or more past due or in foreclosure".  Note: Fannie Mae will report their Single-Family Serious Delinquency rate for October in a few days.Click on graph for larger imageAlthough this indicates progress, the "normal" serious delinquency rate is under 1%.  The serious delinquency rate has fallen 0.57 percentage points over the last year - and at that rate of improvement, the serious delinquency rate will no...more

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  • Jeff Matthews Is Not Making This Up

    Activist Targets IBM: “Bring Out the Belgian Waffle!”

    IBM trades to highs on activist related speculation  (161.85 +0.95)—Briefing.com, November 23, 2014IBM Chief Counsel: “Ginni?  Fred here.” IBM CEO Ginni Rometty:  “What’s wrong?”Chief Counsel: “Activists are circling.”Rometty: “Oh geez.”Chief Counsel: “Yeah.  I’ve got the biggest shark of all on hold.  He wants to talk.”Rometty: “Carl Icahn??”Chief Counsel:  “No.   Icahn watches Netflix and uses an iPhone.  He thinks we’re ‘old economy.’  Worse than Icahn.”Rometty: “Donald Trump?”Chief Counsel:  “No.   Even worse.”Rometty:  “Worse than Donald Trump?  How is that possible?”Chief Counsel:  “It’s possible.  It’s those guys...more

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  • Real Time Economics

    New Mortgage Lending Drops to 13-Year Low

    New figures released by the Federal Reserve Bank of New York on Tuesday show that mortgage lending is running at its lowest level in 13 years, with 2014 on pace to be the weakest for new loans since 2000. Mortgage lending has been weak since the housing bust hit in 2007, but it received a series of lifts over the past few years with each round of stimulus by the Federal Reserve. Those efforts brought mortgage rates to lower levels, unleashing bursts of refinancing. After mortgage rates jumped in the middle of last year, from around 3.6% in May to 4.6% in June for a 30-year, fixed-rate mortgage, refinancing withered. And it hasn’t returned. For the year ended in September, mortgage lending has averaged $357 billion per quarter over the prior four quarters, th...more

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  • Real Time Economics

    Why 4% Growth Doesn’t Feel That Hot

    The Commerce Department on Tuesday revised up the annual growth rate for third-quarter real gross domestic product to 3.9% from the advance reading of 3.5%. The upgrade was a surprise. Indeed, none of the 30 economists surveyed by the Wall Street Journal expected GDP to be revised up. The rate follows a 4.6% expansion in the second quarter, putting growth over those six months at a rapid 4.25%. So, why doesn’t the U.S. economy feel like it’s surging by 4%-plus? A key explanation is the lopsided distribution of gains from that 4% output pace. With more data in hand, Commerce revised down sharply wages and salaries over the last two quarters. The growth rate for compensation last quarter was revised down from 4.0% to 3.5% last quarter, and down from 5.3% to 2.8% in th...more

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  • naked capitalism

    2:00PM Water Cooler 11/5/14

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  • Abnormal Returns

    Tuesday links: investing jargon

    Quote of the day Ben Steverman, “Choosing a hedge fund requires expertise and a healthy appetite for investing jargon. Alternative funds are being marketed to people who have neither.”  (Bloomberg) Chart of the day Why everyone is feeling good: low volatility.  (A Wealth of Common Sense) Markets On the outperformance of defensive sectors YTD.  (Charlie Bilello) Jim Rogers is now hot on Russian stocks.  (FT Alphaville) The bear case for commodities is based in part on a disbelief in China.  (Market Anthropology) Strategy A primer on the Appraisal Ratio.  (Alpha Architect) The case for the profitability factor.  (Monevator) Books Tony Robbin’s Money – Master the Game: 7 Simple Steps to Financial Freedom “comes up short.”  (Pragmati...more

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  • Calculated Risk

    House Prices: Real Prices and Price-to-Rent Ratio in September

    The expected slowdown in year-over-year price increases is ongoing. In November 2013, the Comp 20 index was up 13.8% year-over-year (YoY). Now the index is only up 4.9% YoY. This is the smallest YoY increase since October 2012 (the National index was up 10.9% YoY in October 2013, is now up 4.8% - also the slowest YoY increase since October 2012.Looking forward, I expect the indexes to slow further on a YoY basis, however: 1) I don't expect the indexes to turn negative YoY (in 2015) , and 2) I think most of the slowdown on a YoY basis is now behind us.This slowdown was expected by several key analysts, and I think it is good news.  As Zillow chief economist Stan Humphries said today:“The days of double-digit home value appreciation continue to rapidly fade away...more

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  • The Big Picture

    Closer View of the Housing Boom

    Click to see the animated changes to the map. Source: Urban Institute

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  • FT Alphaville

    Baltia: the oldest, newest, airline that isn’t

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  • DRS » Blog

    FCA Legislation Update

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  • DRS » Blog

    FCA Legislation Update

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  • naked capitalism

    Who Will Wind Up Holding the Bag in the Shale Gas Bubble?

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  • The Capital Spectator

    Personal Consumption Expenditures: October 2014 Preview

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  • DRS » Blog

    ESMA delays delivery of second EMIR clearing draft RTS

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  • DRS » Blog

    ESMA delays delivery of second EMIR clearing draft RTS

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  • The Big Picture

    Stop Making Intellectually Disingenuous Market Arguments

    The quality of our discourse is decaying. This was once a standard complaint about the tone and depth of our national political debate. Now it has spilled into the financial realm. Shall we blame Twitter, trolls or bloggers? I am unsure of the underlying reason. But as we have seen far too, financial discussions seem to entail people arguing at cross-purposes. Bull-bear debates devolve into winning the argument at any cost. Previously, we had a true competition of ideas in the marketplace. Now, we have discussions that range between disingenuous and useless. The hunt for the truth has been replaced by the search for bragging rights. Price discovery, like so many other things in our society, depends on a robust and open debate. The intellectual arguments can and do sway ...more

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  • naked capitalism

    Links 11/25/14

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  • FT Alphaville

    Crystal balls

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  • FT Alphaville

    FirstFT (the new Lunch Wrap)

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  • The Capital Spectator

    Q4:2014 US GDP Nowcast: +2.1% | 25 Nov 2014

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  • The Capital Spectator

    Initial Guidance | 25 November 2014

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  • The Housing Bubble Blog

    The Runaway Property Boom Looks To Be Over

    The Mirror reports from the UK. “Foreign buyers accounted for almost three-quarters of home purchases in central London in 2012, according to a report by one property group, and more than half were snapped up by buyers from Singapore, Hong Kong, China and Malaysia. But many of these high-end homes are bought by wealthy foreign-based investors and left empty. Labour MP Sadiq Khan said: ‘Londoners are being priced out of the housing market by an influx of foreign buyers, who see London property as an investment and in many cases leave properties sitting empty as ‘ghost homes’.” The Vancouver Sun in Canada. “Senior economist Robin Wiebe, a former analyst at the Canada Mortgage and Housing Corporation, says it’s true, Vancouver’s pric...more

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  • The Housing Bubble Blog

    Bits Bucket for November 25, 2014

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

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  • Dr. Housing Bubble Blog

    Real Homes of Genius: Bars on the window. Check. Garbage cans in the yard. Check. Bubblicious prices in Culver City. Check.

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    The Top 0.004%: The Wealth-X Report

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  • Macro Man

    Zzzzzz

    "Never short a quiet market," the saying goes.   Well, does it get any more quiet than 5 SPX handles for an entire day's range  (excluding the gap from Friday's close, of course)?This market strikes Macro Man as one in which it does not really pay to stare at screens all day, lest you see phantasms of opportunity that exist only in your mind.   As you can no doubt tell from the relative paucity of recent postings, your author is taking this belief to heart........more

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  • Abnormal Returns

    Monday links: valuation estimates

    Quote of the day Morgan Housel, “All valuation estimates are just that — estimates. They’re an attempt to predict a future that, in reality, cannot be known.̶1;  (Motley Fool) Markets 60 stocks have doubled in value so far in 2014.  (Ivanhoff Capital) Hedge funds are betting big against the coal miners.  (WSJ) Is the MLP IPO boom going to end badly?  (WSJ) Strategy Value traps and the arbitrary nature of looking at country-level valuations.  (Philosophical Economics) Are low interest rates responsible for the soaring stock market?  (The Fat Pitch) Starting valuations matter.  (Meb Faber) Are you riding in the back of the cab without your seat belt on?  (A Wealth of Common Sense) The too-big-to-fail effect on bank stock performance.  (Journ...more

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  • Ticker Sense

    November 24th 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 Elliot Wave Lives On (N) Fallond Stock Picks (+) Global Economic Intersection (-) GEI –... ...more

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  • My voice and noise on subprime bank regulations

    Bye bye Europe! Having introduced financial feudalism, Europe has gone back to the Middle Ages.

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  • The Housing Bubble Blog

    Hearing The Word Oversupply Just About Everywhere

    The Los Angeles Times reports from California. “By most measures, the housing market these days is a bit sluggish. But the high end is hopping. Luxury home sales in Southern California are hitting levels not seen in decades. Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble. The number of homes bought for $2 million or more in recent months is the highest on record. Sales have been brisk, said Joan Marcus Colvin, New Home’s senior VP of sales, marketing and design, especially at that Newport condo building, the Meridian, where 34 units have sold since February, at an average price of nearly $3 million.” “That’s without even having a model home to show customers — the site i...more

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  • The Skeptical Speculator

    US stocks hit record highs but outlook turning negative

    Stocks in the United States rose last week, their fifth consecutive weekly gain, with benchmark indices hitting new record highs. The Standard & Poor’s 500 Index rose 1.2 percent to 2,063.50. The Dow Jones Industrial Average rose 1.0 percent to 17,810.06. Elsewhere in the world, the STOXX Europe 600 Index rose 2.9 percent but the MSCI All-Country Asia Pacific Index fell 1.3 percent. Markets were boosted by actions by central banks last week. The People's Bank of China announced on Friday that it was cutting one-year benchmark lending rates by 40 basis points to 5.6 percent and one-year benchmark deposit rates by 25 basis points to 2.75 percent. Also on Friday, European Central Bank President Mario Draghi told an audience of bankers in Frankfurt that “we will...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Capital Markets, Derivatives and the Law

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  • A Fistful Of Euros

    Euro-nationalism is still a terrible idea.

    This piece about Catalan #indyref crystallises everything I hate about what I call Euro-nationalism. It’s wonderful that they’re all so engaged: Kilted men wearing saltire capes and foam fingers on both hands danced in the aisles as “The Red Hot Chilli Pipers” played a bagpipe version of Don’t Stop Believing. Sorry. That was the other lot. Let’s try that again. Clara, 20, a university student, is one of nearly fifty thousand volunteers who made Sunday’s vote on Catalan independence possible. I meet her sitting behind a ballot box in a school-turned-polling station in Barcelona, a big smile on her face… But what is it they actually want to do with independence? Well, stop paying into the Spanish government’s finances. What this means...more

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  • Abnormal Returns

    Sunday links: slow money

    Quote of the day As fan of CNBC, it’s definitely time for a show called “Slow Money”. Every episode: “Nothing much changed today. Holding same stocks.”; — Marc Andreessen (@pmarca) November 23, 2014 Chart of the day The case for a Euro stock bounce: rising forward economic expectations.  (BCA Research) Markets By this measure the US stock market is dramatically overvalued.  (Dana Lyons) It’s worth asking: are investors too complacent?  (A Dash of Insight) US states and municipalities are by and large on firm footing.  (Barron’s) Commodities Palladium is lone standout in the precious metals space.  (All Star Charts) Gold forward rates are now negative.  (ETF Trends) Why weather patterns matter for natural gas prices.  (...more

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  • The Aleph Blog » The Aleph Blog

    Lagging Long Yields

    I’m a very intellectually curious person — I could spend most of my time researching investing questions if I had the resources to do that and that alone.  This post at the blog will be a little more wonky than most.  If you don’t like reading about bonds, Fed Policy, etc., you can skip down to the conclusion and read that.This post stems from an investigation of mine, and two recent articles that made me say, “Okay, time to publish the investigation.”  The investigation in question was over whether yield curves move in parallel shifts or not, thus justifying traditional duration [bond price interest-rate sensitivity] statistics or not.  That answer is complicated, and will be explained below.  Before I go there, here are the two arti...more

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  • Dr. Housing Bubble Blog

    The middle class migration out of California: While domestic migration is up, foreign migration is filling the gap.

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  • The Aleph Blog » The Aleph Blog

    It’s Their Money

    Photo Credit: Richard.AsiaRecently, I had a client leave me.  I’m not sure why he did — I didn’t ask, because that’s his business.  It *is* his money, after all, not mine.  After deducting the accrued fee, I thanked him for his business, and wished him well.I try to be low pressure in my work.  I also try to discourage the idea that if someone uses my services, they will do better than the average, much less phenomenally.  I remind potential clients of what happened to stocks in the Great Depression (down almost 90% during a period in 1929-1932).  I ask potential clients to stick with me through a full cycle of the market, but I don’t require it because:It’s their money.One thing I do promise them is that my money is on the line...more

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  • Mises Institute

    From Aristocracy to Monarchy to Democracy

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  • Mises Institute

    Secrets About Money That Put You at Risk

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  • My voice and noise on subprime bank regulations

    The tragic and not understood reality of a Mario Draghi ECB/SSM speech

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  • Steve Keen's Debtwatch

    Launching Kingston’s Rethinking Economics Group

    Reposted from the Rethinking Economics website Students at Kingston University kicked off a campaign for a new approach to economics with the successful launch of new society Rethinking Economics Kingston this week. Almost 100 people squeezed in to hear Professor Steve Keen – newly appointed head of the School of Economics, Politics and History – launch the new society with a speech on what’s wrong with mainstream economics and how students should change it. Professor Keen — author of Debunking Economics and well-known critic of mainstream economics – described how theories taught in most economic classes were unable to predict, understand or even take on board the recent financial crisis. Keen set out his vision for Kingston’s economics department as a be...more

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  • Macro Man

    Number crunching

    26.1% :  The amount that retail gasoline margins expanded in the United States last month, even as prices dropped $0.34/gallon.    (Hat tip: Anony from the comments section.)202,000:  Number of Google results for "FX price fixing"542,000:  Number of Google results for "Gas Station price fixing"$500,000,000:  Average annual cost to the world if one assumes a daily FX fixing volume of $10 billion and that each rate was wrong by an average of 2 bps (bear in mind that those orders against the main direction of the fix receive a windfall, not a cost!) $1.34 billion:  Average annual cost to just US consumers if we assume price gouging of $0.01 per gallon$4.3 billion:  Amount of FX-related fines levied thus far$41 billion:  Amo...more

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  • Steve Keen's Debtwatch

    Hard Evidence: is the UK facing another financial crisis?

    Taken at face value, David Cameron’s warning this week about risks in the global economy sounds like it might be wonderfully prescient. Here’s the country’s economic chauffeur, carefully checking his instrument gauges, and sure enough, sees the same signs today that should have given us warning of the crisis of 2007-08. Time to apply the brakes. There’s only one problem: the economic dashboard that Cameron relies upon did not warn of the crisis before it happened. Instead, that dashboard advised Cameron and other leaders around the world that everything was looking rosy, and that going full throttle was entirely safe. The OECD’s Economic Outlook, published in May 2007, stated that its “central forecast remains indeed quite benign” as it predicted “a stro...more

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  • My voice and noise on subprime bank regulations

    Current capital (meaning equity) requirements for banks are unethical, regressive, dangerous, stupid and promote inequality

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: October 2014

    Today’s New Residential Construction Report showed mixed results with total permit activity improving while total start activity declined since September.Single family housing permits, the most leading of indicators, increased 1.4% from September to 640K single family units (SAAR), and increased 2.4% above the level seen in October 2013 but still remained well below levels seen at the peak in September 2005. ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – November 19 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 3 basis points to 4.04% since last week while the purchase application volume increased 12% and the refinance application volume...more

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  • Macro Man

    A head-scratcher

    Bloomberg is running a story entitled "Yellen Inherits Greenspan's Conundrum as Long rates Sink", noting the apparently inexorable yield decline at the back end of the curve and bemoaning the possibility of curve inversion when (if?) short rates rise, thereby threatening credit expansion.Macro Man is left scratching his head.Oh, if only Yellen (or Bloomberg) could identify some institution that holds, say, $2.4 trillion of Treasury bonds.  Perhaps they could be persuaded to sell a few if yield curve inversion were truly problematic.   If only.....  ...more

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  • DRS » Blog

    Industry split on EMIR clearing of FX NDF

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  • DRS » Blog

    Industry split on EMIR clearing of FX NDF

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  • The Aleph Blog » The Aleph Blog

    The No-Lose Line

    How long can you hold a Treasury Note or Bond, and not suffer a loss in total return terms, if yields rise from where they are today?  Maybe the answer will surprise you, and maybe not — it depends on how fixed-income literate you are.Okay, here’s the scenario: I start off with the current yield curve for 2-, 5-, 10-, and 30-year Treasuries (0.51%, 1.61%, 2.32% and 3.04%).  I make the following assumptions:Annual Coupon Payment at the end of the year (at the current bond equivalent yield)The bonds are priced at par, so they are current coupon bonds.They are new bonds with the full maturity to go.Each year, the coupon payment is reinvested in bonds of the same type.Each scenario is run until there is one year left to go.  The rate in the last year is the t...more

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  • Dr. Housing Bubble Blog

    You can’t afford to live in California: Only 30 percent of families can afford to purchase a home in California. Over 80 percent of California unaffordable on a teacher’s salary.

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  • Emerging markets

    China: Stock Connect through train steams ahead

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  • The Skeptical Speculator

    Nikkei 225 falls as Japanese economy contracts

    The Nikkei 225 plunged 3.0 percent on Monday after the Japanese government reported that the economy contracted 0.4 percent in the third quarter, the second consecutive quarterly contraction. However, US investors shrugged off the news. The S&P 500 rose 0.1 percent on Monday to close at another record high....more

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  • Jeff Matthews Is Not Making This Up

    Now That's An Idea That Would Never Fly

     Former BB&T* CEO John Allison has written a book about, well, about his time at BB&T, during which it grew from $275 million in assets to $152 billion (profitably) and some lessons learned along the way. American Banker, one of the publications Warren Buffett reads every day, is publishing excerpts from the book, covering everything from how BB&T got into the subprime auto lending business to how it looks for acquisitions (100 and counting during Allison's 35 years at the bank). And while Warren Buffett has long lambasted American CEOs for not providing shareholders with honest post-mortems about acquisitions where big things were promised but not delivered, Allison makes Buffett look like a piker when it comes to the notion that deals ought ...more

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  • The Baseline Scenario

    Obamacare, Taxes, United Airlines, and My Tea Infuser

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  • Ticker Sense

    November 17th Blogger Sentiment Poll

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

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  • A Fistful Of Euros

    Abenomics 2.0 – Just What Are They Trying To Achieve?

    The recent move by the Bank of Japan to take further measures to accelerate the rate at which it ramps up its balance sheet took almost everyone – market watchers included – completely by surprise. The consequence was reasonably predictable – the yen has once more fallen strongly against almost all major currencies – and most notably against the USD – and Japan’s main stock indexes are sharply up. On the other side of the balance sheet the cost of imported goods – and especially energy – is expected to rise, real wages are likely to continue to fall, and ex-tax inflation looks set to remain moderate, possibly around 1% – short of the 2% objective but comfortably away from deflation. Meantime this week’s GD...more

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  • footnoted*

    Is Actavis’ new CFO Really worth $22 Million?

    When it comes to executive compensation, do the board members and compensation consultants who dole it out ever think there’s such a thing as too much of a good thing? That’s the question we found ourselves asking after reading the 8-K that Actavis plc filed late Wednesday. If you are a footnoted regular, you would know that we pay close attention to filings that come in after the close of the markets, especially on Fridays. So when Actavis, the Ireland-based pharmaceutical giant Actavis arrived a little after 5 p.m. on Wednesday, we sent out a quick note to our subscribers, highlighting what seems like incredibly generous compensation for incoming CFO Maria Teresa Hilado. In fact, we were pretty surprised that this wasn’t filed late on a Friday, given...more

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  • Steve Keen's Debtwatch

    Crash Boom Pop in the Wall Street Journal

    The Crash Boom Pop! cartoon book version of Debunking Economics has just been covered in the Wall Street Journal: Overheard: Pow! Zap! Wham! Get Ready For Comic Book Economics So Wall Street Journal readers, if you’d like to pay back those mainstream economists who forced you to suffer through classes on the “Efficient Markets Hypothesis”, or worse yet, assured you that the economy was fine in June 2007, head over to Kickstarter and fund a cartoon that will take the mickey out of them. Click here to go to the Crash Boom Pop! Kickstarter page But hey, what’s that about being “more Clark Kent than Superman”? ...more

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  • Ticker Sense

    November 10th 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 (N) Elliot Wave Lives On (N) Fallond Stock Picks (-) Global Economic Intersection (-) GEI... ...more

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  • A Fistful Of Euros

    I saw the wall Mr Gorbachev tore down.

    In October 1989, I was in Berlin for the first time. Small town boy, big city lights. We flew with Pan-Am back then. The airline also doesn’t exist anymore. I caught about the last possible glimpse at the wall in its concrete dividing brutality, looking eastward from the visitor platform at the Brandenburg gate. The next time I experienced a similar feeling was in 2008, on the UN premises in Panmunjom, South Korea, looking north. And in 2012, in the Banksy gift shop, right next to the wall in Bethlehem. West-Berlin was an oasis of calm before the storm. On October 18th, my mother, who hails from East Germany, my sister and I were having lunch at the famous Kaffee Kranzler on the Ku’Damm, at the time West Berlin’s main shopping street. I was facing a bi...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Employment Situation: Nonfarm Payrolls and Civilian Unemployment October 2014

    Today's Employment Situation Report indicated that in October, net non-farm payrolls increased by 214,000 jobs overall with the private non-farm payrolls sub-component adding 209,000 jobs while the civilian unemployment rate declined declined to 5.8% over the same period.Net private sector jobs increased 0.18% since last month climbing 2.24% above the level seen a year ago and climbing 1.82% above the peak level of employment seen in December 2007 prior to the Great Recession. ...more

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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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  • Emerging markets

    Japanese portfolio flows support weaker yen but raise default risk

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  • Richard's Real Estate and Urban Economics Blog

    Jung Hyun Choi and I write about Income Inequality across Cities.

    We will be presenting at APPAM:This paper investigates why the level of income inequality differs across U.S. cites. We alsoexplore why some cities experienced faster increases in the level of inequality than others.Using the Decennial Census and the American Community Survey (ACS) from 1980 to 2011,we explore whether the disparities in the level and the changes in the level of inequality canbe explained by MSA characteristics, including labor market conditions, skill distribution,residential mobility, racial concentration, industrial composition and unionization. We alsoexamine how state level policies such as unemployment insurance benefits and minimumwage level is associated with income inequality.Our findings hows that negative labor market conditions, concentration...more

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  • Emerging markets

    HFT: Flash boys come to Asia

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  • The Skeptical Speculator

    Stock markets survive turbulent October

    Stocks rose last week, with stock indices in the United States in particular hitting new all-time highs. The Standard & Poor's 500 Index rose 2.7 percent last week to 2,018.05 while the Dow Jones Industrial Average jumped 3.5 percent to 17,390.52, both achieving new record highs. The STOXX Europe 600 Index rose 2.9 percent while the MSCI All-Country Asia Pacific Index rose 3.1 percent. Stock markets slipped on Wednesday after the Federal Reserve announced the end of its bond-buying programme but this event was offset by the announcement from the Bank of Japan on Friday that it was raising its annual target for asset purchases to around 80 trillion yen from 60-70 trillion yen, which helped boost stocks at the end of the week. The diverging moves from the US and Japanese ...more

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  • The Baseline Scenario

    A Conference On Finance For Everyone Else

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  • DealBook

    Investigation Causes Citigroup to Cut Profit

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  • DealBook

    Judge Approves Bankruptcy Exit for Stockton, Calif.

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  • Richard's Real Estate and Urban Economics Blog

    How people who can't do math get shafted.

    I have a car (an Accord, if you must know) that is 17 months old.  When I bought the car, the dealer offered me a car loan at 0 percent interest for 36 months, so I took it.  Even in the world of very low discount rates, accepting the loan allowed me to get a further small effective discount on the car.The dealer called me today, saying I could trade the car in for a new car and not increase my payment; the payment would simply reset for 36 months.  I told him I needed to do a little math before calling him back.  The math I did was as follows:Value of Old Car from Kelly Blue Book + PV of 36 months of payments = Cost of New Car.Cost of New Car - Edmunds Value of New Car = $6000.Yes, the dealer was trying to fool me into paying $6000 for...nothin...more

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  • DealBook

    Praise for Coming Out From Someone Who Did

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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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  • Mises Institute

    American Liberalism and World Politics: 1931-1941

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  • footnoted*

    What’s $8m to Google?

    For most of us, $8 million is a lot of money. But for a company the size of Google, it’s probably safe to say that it’s the equivalent of sofa change. Still, even we were surprised by this exhibit attached to the 10-Q that Google filed yesterday. In the letter, which was dated July 18, 2014, Google agreed to forgive an $8m cash award that former Chief Business Officer Nikesh Arora was supposed to pay back within 30 days if he left the company prior to April 25, 2015. The condition was spelled out pretty clearly in this letter dated April 27, 2012. In that letter, the company said it made the $8m award to Arora “after discussion with Nikesh and in light of his personal circumstances”. Arora’s last day at the company was Sept. 7, which seems to i...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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  • 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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  • The Baseline Scenario

    No, You Can’t Get a Drink at 5 AM

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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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  • 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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  • FinanceProfessor.com

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

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  • VIX and More

    Song for My Father*

    My father passed away this summer and in the intervening period I set aside my media hat. Before I formally return to the media space, I want to use this space to talk a little bit about my father. My father was an eccentric man and sometimes a complete enigma even to those who were closest to him. For instance, while we share the same name, he insists that I was named not after him but his uncle Bill, who was a baseball player in his earlier years and later became coach, attorney and a judge. My father followed his uncle into the legal field, with his own twist, carving out his own niche as a modern-day country lawyer and advisor. Outside of family and work matters, sailing, quantum physics and jazz were the three things my father was most passionate about. While par...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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  • 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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  • FinanceProfessor.com

    Active vs. Passive in Global Investing | Financial Planning

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  • Piggington's Econo-Almanac

    August 2014 Housing Data Rodeo

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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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  • 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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Emre Deliveli The Kapali Carsi

Emre Deliveli is a freelance consultant, part-time lecturer in economics and columnist. Previously, Emre worked as economist for Citi Istanbul, covering Turkey and the Balkans. He was previously Director of Economic Studies at the Economic Policy Research Foundation of Turkey in Ankara and has has also worked at the World Bank, OECD, McKinsey and the Central Bank of Turkey. Emre holds a B.A., summa cum laude, from Yale University and undertook his PhD studies at Harvard University, in Economics.

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