EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • The Housing Bubble Blog

    Bits Bucket for June 30, 2015

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

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  • naked capitalism

    Ed Harrison: Some Thoughts on the Coming Defaults of Greece

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  • VIX and More

    Today’s 34% VIX Spike and What to Expect Going Forward

    One of the top posts of 2013 was All-Time VIX Spike #11 (and a treasure trove of VIX spike data), in which I sliced and diced the twenty largest one-day VIX spikes in the history of the VIX. Nineteen of those spikes were in excess of 30% and with all-time #5 arriving later in 2013 and all-time #15 and #16 following in 2014, I was compelled to comment that despite the seemingly low VIX and concerns about complacency, 2014 Had Third Highest Number of 20% VIX Spikes. Fast forward to the present and for all the talk of a low VIX, some forget that the second day of 2015 had a 28.1% VIX spike and then today, we saw a 34.5% VIX spike, the eleventh largest in the history of the VIX and enough to trigger an update to the table of largest one-day VIX spikes below. [source(s):...more

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  • Real Time Economics

    What Happens If Greece Defaults on Its Payment to the IMF?

    Demonstrators rally in Athens on Monday. Greek voters will decide in a referendum Sunday whether their government should accept an economic reform package put forth by Greece’s creditor. MILOS BICANSKI/GETTY IMAGES If Greece fails to pay the International Monetary Fund a $1.7 billion debt coming due at the close of business Tuesday—around 6 p.m. EDT—the country will immediately be in arrears to the fund, an event normally known in the financial world as a “default.” The default, which Greece has already warned will happen, would be the first by an advanced economy in the fund’s seven-decade history, as well as the largest single overdue payment. It would also put the new Athens government on a par with a small group of mostly conflict-ravaged debtors th...more

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  • Macro Man

    Getting the memo

    Macro Man 28 June 2015 at 20:58To: another old guy what odds eur trades 1.12 by 5pm ny tomorrow?Another Old Guy                   28 June 2015 at 21:21To: Macro Man Pretty high. I covered some of my shortSuch is life in the trenches of the FX market, where EUR/USD closes well up on a day when equities and bond yields plummet thanks to the possible fracturing of the...err...EUR.  Still, the screw job wasn't totally unexpected, as you can see from the dateline of the email conversation from Sunday night.  Forewarned, as they say, is forearmed. While the equity bounce off of the opening prints in Europe was also fairly predictable, you had to be quick as indices leaked badly...more

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  • naked capitalism

    Wolf Richter: Panicked Hedge Funds Now Praying for a Miracle in Greece

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  • Real Time Economics

    China, Greece and Puerto Rico: Sickly But Not Yet Contagious

    China’s stock market plunge in recent weeks has rattled nerves, but is hardly surprising given the prior year’s runup, Greg Ip says. ZHENGYI XIE/ZUMA PRESS Events scattered across three continents serve as a reminder that the global economy remains a treacherous place. A steepening stock market selloff prompted China’s central bank on Saturday to cut interest rates.  Greece closed its banks and imposed capital controls on Sunday when negotiations with its international creditors fell apart. And on Monday, Puerto Rico said it could not repay its debts. This is bad news for China, Greece and Puerto Rico. When it comes to the rest of the world, the good news is the channels of contagion are much weaker than when the U.S. mortgage bubble burst in 2007 and Euro...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Dead Hand Proxy Puts: A Case Study

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  • VIX and More

    Longest SPX Peak to Trough Pullback Since 2012

    I have been quiet in this space as of late, but there is nothing like a 34% one-day spike in the VIX to inspire me to dust of the cobwebs and get this place humming again. I will start by updating an old favorite table that invariably is the subject of many requests whenever stocks begin to show signs of a meaningful pullback, as is the case today. Note that the table below includes only pullbacks from all-time highs and only those that go back to the March 2009 bottom. Here 2.75% seems to be a natural cutoff, but I am more apt to include smaller numbers if it took a relatively large number of days to arrive at the bottom. Seen in this light, today’s 2.09% decline in the S&P 500 Index brings the aggregate peak-to-trough decline to 3.7%, but perhaps the most inter...more

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  • Dealbreaker

    Write-Offs: 6.29.15

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  • Dealbreaker

    Area Hedge Fund Manager Seemingly Unconcerned With Gaping Holes In High School Alma Mater’s Curriculum

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  • Calculated Risk

    Duy: "Events Continue to Conspire Against the Fed"

    Tuesday:• At 9:00 AM ET, S&P/Case-Shiller House Price Index for April. Although this is the April report, it is really a 3 month average of February, March and April prices. The consensus is for a 5.4% year-over-year increase in the Comp 20 index for April. The Zillow forecast is for the National Index to increase 4.0% year-over-year in April, and for prices to be unchanged month-to-month seasonally adjusted.• At 9:45 AM, Chicago Purchasing Managers Index for June. The consensus is for a reading of 50.6, up from 46.2 in May.From Tim Duy: Events Continue to Conspire Against the Fed. Excerpts: Federal Reserve policymakers just can't catch a break lately. Riding on the back of strong data in the second half of last year, they were positioning themselves to decla...more

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  • Real Time Economics

    New U.K. Poll Shows Consumers Are More Upbeat

    British consumers are feeling more upbeat than they have in the last decade and a half, so concludes one new survey. The survey, due to be released Tuesday by market-research firm GfK Group, showed consumers were more optimistic about both their personal financial situation and the general economy in June than they had been since January 2000. It provides one of the first snapshots of consumer sentiment in the first month since the U.K.’s general election in May. If further data releases support the findings, it raises prospects the U.K. economy will grow at a faster pace during the remainder of the year. GfK’s index of consumer confidence in Britain jumped six points to 7, from a value of 1 in May. “We’re seeing a dramatic uptick in confidence this month, a rea...more

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  • The Big Picture

    Topics for the RWM Client Conference Call

    On June 30th, our investment firm will be holding its Q2 client conference call. Because we’ve got a clientele that spans the entire country, we’ve found that holding a call during which we address important topics and take questions from our investors is a really effective way to communicate. In the weeks leading up to these calls, our Certified Financial Planners field questions from clients for CIO Barry Ritholtz to address. Additionally, we put together a framework for the discussion that includes the things we feel are important right now – from macroeconomic conditions to portfolio construction. These events are for clients only, although occasionally some of the research we generate internally makes its way onto our blogs. Next week, our discussion will...more

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  • Dealbreaker

    SEC Would Like To Keep Its In-House Judges, Please

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  • Calculated Risk

    Forecast: Auto Sales above 17 Million SAAR in June

    Nothing to add on Greece right now, so here is another forecast for June auto sales.From WardsAuto: Forecast: SAAR Expected to Remain Above 17 Million in JuneA WardsAuto forecast calls for U.S. automakers to deliver 1.48 million light vehicles this month....The report puts the seasonally adjusted annual rate of sales for the month at 17.2 million units, shy of last month’s 17.7 million SAAR, but ahead of the current 3-month SAAR (17.1 million) and the year-to-date SAAR through May (16.8 million).The forecast reflects reports of very strong retail activity for most automakers continuing from May offset somewhat by a downturn in sales to fleets....Projected June LV sales would bring year-to-date deliveries to 8.5 million units, a 4.6% improvement from same-period 2014. ...more

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  • FT Alphaville

    BREAKING: Last minute Greek emergency session at Camp Alphaville

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  • The Big Picture

    The Wit, Wisdom, and Unapologetic Vitriol of Carl Icahn

    click through for full article Source: Bloomberg

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  • Calculated Risk

    Black Knight: House Price Index up 1.0% in April, 4.9% year-over-year

    Note: I follow several house price indexes (Case-Shiller, CoreLogic, Black Knight, Zillow, FHFA, FNC and more). Note: Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.From Black Knight: April Transactions U.S. Home Prices Up 1.0 Percent for the Month; Up 4.9 Percent Year-Over-YearToday, the Data and Analytics division of Black Knight Financial Services, Inc. (NYSE: BKFS) released its latest Home Price Index (HPI​) report, based on April 2015 residential real estate transactions. The Black Knight HPI combines the company’s extensive property and loan-level databases to produce a repeat sales analysis of home prices as of t...more

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  • naked capitalism

    2:00PM Water Cooler 6/29/15

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  • FT Alphaville

    Monday’s Greek bond yields charted and preserved for posterity

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  • Abnormal Returns

    Monday links: fearing what will happen

    MarketsHow equity markets react to crises. (disciplinedinvesting.blogspot.com)The S&P 500 is working its way towards oversold. (shortsideoflong.com)Ten spinoffs are occurring over the next two weeks. (stockspinoffs.com)MODERN TRADER Magazine—the essential journal for professional traders and active investors. Special Subscription Offer! (moderntrader.com)StrategyWhy do so many investors persist in trying to beat the market? (awealthofcommonsense.com)Brett Steenbarger, "The idiot trader has no sense of process. It's all seat of the pants and randomness." (traderfeed.blogspot.com)...more

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  • FT Alphaville

    El-Erian: The Graccident, as captured by the FT’s front page

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  • Abnormal Returns

    Research links: backtesting tales

    Research linksThe five phases of an investment idea. (thealephblog.tumblr.com)The equity risk premium puzzle may be a disaster risk premium. (bloombergview.com)Breaking down the components of ROE over time. (investorfieldguide.com)Clearing up some misconceptions about MPT. (cssanalytics.wordpress.com)Why are the returns on dividend strips so high? (papers.ssrn.com)A backtesting cautionary tale. (scottsinvestments.com)A beginner's guide to time-series analysis. (quantstart.com)MODERN TRADER Magazine—the essential journal for professional traders and active investors. Special Subscription Offer! (moderntrader.com)...more

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  • The Big Picture

    The Trouble with Macro

    Markets around the world start the week bracing for trouble as Greece spirals further into crisis. Can the country avoid a full-blown default? Will there be a Grexit? Will it stay in the euro zone and keep the single currency? It all looks like an unknowable gamble. Which leads us to this question: How big a challenge is it to make big bets about big macro questions at big hedge funds? Based on what we have seen so far, the short answer is: It is extremely challenging. Indeed, macro funds have been doing poorly throughout this recovery cycle, despite big events and broad trends. You might think this environment would be ideal for the sort of traders who make large bets on big macro events, but recent performance data suggests otherwise. It is especially fascinating ...more

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  • Macro Man

    What I'd be trumpeting if I were Tspiras

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  • Ticker Sense

    June 29th Blogger Sentiment Poll

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

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  • The Capital Spectator

    Backtesting With Synthetic and Resampled Market Histories

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  • The Skeptical Speculator

    Greece sends markets into turmoil, Chinese stocks plunge

    The decision by Greek Prime Minister Alexis Tsipras to put the bailout plan to a referendum has caught investors on the wrong foot. From Bloomberg: For Europe stock traders who went all-in last week speculating on a Greek resolution, it’s time to rethink the strategy. U.S. stock-index futures tumbled, and gains that pushed the Euro Stoxx 50 Index up 4.8 percent, including the largest one-day rally in three years, are at risk after Prime Minister Alexis Tsipras said he would put terms of the Greek bailout to voters. A Capital Markets Commission official said the Athens Stock Exchange will remain shut on Monday. It’s a measure of how rapidly sentiment has shifted that the latest breakdown followed a week in which Greek shares posted their biggest increase since 2008, ...more

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  • A Fistful Of Euros

    Greece and Iceland, controls and controls

    Now that Greece has controls on outtake from banks, capital controls, many commentators are comparing Greece to Iceland. There is little to compare regarding the nature of capital controls in these two countries. The controls are different in every respect except in the name. Iceland had, what I would call, real capital controls – Greece has control on outtake from banks. With the names changed, the difference is clear. Iceland – capital controls The controls in Iceland stem from the fact that with its own currency and a huge inflow of foreign funds seeking the high interest rates in Iceland in the years up to the collapse in October 2008, Iceland enjoyed – and then suffered – the consequences, as had emerging markets in Asia in the 1980s and 1990s. Enjoyed, be...more

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  • The Capital Spectator

    Initial Guidance | 29 June 2015

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  • The Housing Bubble Blog

    Cautious Buyers Are Willing To Walk Away

    The Memphis Daily News reports from Tennessee. “Hampered by a severe lot shortage, homebuilding activity in Memphis and Shelby County slowed considerably in May, with builders starting and selling fewer new homes than last year. Steady demand, coupled with low inventory, higher lot prices and escalating construction costs, has prompted builders to raise prices. The average sales price of a new home in Shelby County in May was $311,303, up a whopping 19 percent from $261,311 a year ago. ‘I cannot remember anytime dating back to the 1980s where this has occurred in the past,’ said Keith Grant, an owner of Grant & Co. ‘Even during 2005 and 2006 we were not even seeing increases of 10 percent in the market.’” “‘Everything...more

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  • The Housing Bubble Blog

    Bits Bucket for June 29, 2015

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

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    European Investor Satisfaction with Smart Beta ETFs

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  • Macro Man

    Slow motion chicken

    Macro Man's back from a family holiday in rural Texas, and lo and behold it looks like we're finally nearing the end of the world's longest, slowest game of chicken.  Some five and a half years after Greece's naughty public finances first came under the microscope, the endgame at last appears to be nigh."Who cares?!?!?!" shouts my 26-year old alter ego.   "Greece isn't Lehman!"Yes, it's true that Greece isn't Lehman.  Greece is not an intermediary to trillions of dollars worth of financial transactions across a myriad of counterparties, and issues of re-hypothecation of collateral and similar "oi, where's my money!" issues don't really exist.  (Unless, of course, you're the IMF or one of Greece's other official creditors, in which case you're pr...more

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  • Dr. Housing Bubble Blog

    California home prices plateau and sales fall: Inventory slowly rising in L.A. County and back in a big way for Orange County.

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  • Abnormal Returns

    Sunday links: behind the scenes

    Markets8 reasons to be bullish and 8 reasons to be bearish. (seeitmarket.com)How much of Greece is priced into the markets? (dashofinsight.com)Stop blaming Mom and Pop for market booms and busts. (awealthofcommonsense.com)We are going to need more than an overvalued market for a "crash." (capitalspectator.com)StrategyHow long do you need to wait to see the benefits from portfolio diversification? (theirrelevantinvestor.tumblr.com)7 investment lessons learned from Jurassic World. (fortune.com)On the relationship between cycling and investing. (sharpereturns.ca)Brett Steenbarger, "Solution-focused thinking, however, suggests that the path of our growth lies in understanding what we do well." (forbes.com)FinanceTechnology companies don't like to count stock in total compen...more

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  • Steve Keen's Debtwatch

    Bureaucrazies Versus Democracy

    The most recent of the almost daily “Greek Crises” has made one thing clear: the Troika of the IMF, the EU and the ECB is out to break the government of Greece. There is no other way to interpret their refusal to accept the Greek’s latest proposal, which accepted huge government surpluses of 1% of GDP in 2015 and 2% in 2016, imposed VAT increases, and further cut pensions which are already below the poverty line for almost half of Greece’s pensioners. Instead, though the Greeks offered cuts effectively worth €8 billion, they wanted different cuts worth €11 billion. Click here to read the rest of this post. ...more

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  • The Aleph Blog

    The Phases of an Investment Idea

    Photo Credit: David WarringtonInvesting ideas come in many forms:Factors like Valuation, Sentiment, Momentum, Size, Neglect…New technologiesNew financing methods and security typesChanges in government policies will have effects, cultural change, or other top-down macro ideasNew countries to invest inEvents where value might be discovered, like recapitalizations, mergers, acquisitions, spinoffs, etc.New asset classes or subclassesDurable competitive advantage of marketing, technology, cultural, or other corporate practicesNow, before an idea is discovered, the economics behind the idea still exist, but the returns happen in a way that no one yet perceives.  When an idea is discovered, the discovery might be made public early, or the discoverer might keep it to hi...more

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  • A Fistful Of Euros

    Club within a club

    Reuters – One official said Eurogroup chair Jeroen Dijsselbloem would make a statement following the meeting of the 19 before a further meeting of the 18 with creditor institutions, including the ECB and IMF. Greece is excluded from that latter meeting. Greece is a member of the IMF. The IMF’s Articles of Agreement give the first of its purposes as – To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. Is there a precedent for the IMF sitting in on a meeting of a currency union, minus one of its members, for the purposes of agreeing some kind of currency quarantine of that member? ...more

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  • The Capital Spectator

    Book Bits | 27 June 2015

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  • The Skeptical Speculator

    Morgan Stanley says Chinese stocks peaked amid plunge

    China's stock market plunged over 7 percent on Friday. Morgan Stanley thinks that more declines are likely. From Bloomberg: Morgan Stanley is calling the top of China’s stock rally. The brokerage predicts the Shanghai Composite Index will fall between 2 percent and 30 percent over the next 12 months, according to Jonathan Garner, Morgan Stanley’s chief Asia and emerging market strategist... The “balance of probabilities is that the top for the cycle on Shanghai, Shenzhen and ChiNext has now taken place,” Garner wrote in a note dated Friday. “This is probably not a dip to buy.”...more

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  • The Skeptical Speculator

    Finishing line to Greek debt deal now visible

    It looks like Greece will be able to avert default for the time being. From Bloomberg: Euro-area finance ministers will meet for the third time in a week on Wednesday to try to secure an agreement to avert a default in Greece. With a week to go before the country’s bailout expires, a deal appeared within reach after Greek Prime Minister Alexis Tsipras signaled he was ready to end a bitter five-month standoff and reach agreement with creditors to unlock aid... “We have now seen enough progress for the finishing line to have become visible,” Erik Nielsen, a Unicredit SpA economist in London, wrote in a note to clients. “Failure from here is difficult to envisage...” “I am absolutely convinced that in a few days an agreement will be reached,” Spanish Prime M...more

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  • DRS » Blog

    Singapore Fleshes Out RRP Early Termination Regime

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  • DRS » Blog

    Singapore Fleshes Out RRP Early Termination Regime

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    The Core Satellite Model: How to Cut Hedge Fund Fees in Half Part II

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  • My voice and noise on subprime bank regulations

    Bank regulators… dare to answer this single question

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  • footnoted*

    A very good thing for Martha Stewart!

    By now, you’ve undoubtedly read about Sequential Brands’ offer to buy Martha Stewart Omnimedia. Rumors that a deal was in the works sent Martha Stewart stock up above $7 a share last week for the first time 2010. But when the $353 million deal was announced on Monday at $6.15 a share, the stock began falling and the lawsuits and investigations started picking up (see here and here, for example). But Martha Stewart Omnimedia’s largest shareholder — that would be Martha Stewart, who according to this NY Post article stands to make $167 million on the deal based on her stock holdings — seems to have made out fine, judging by filings made by both Sequential and Martha Stewart Omnimedia over the past 24 hours. Late yesterday (the time stamp was ...more

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  • Dr. Housing Bubble Blog

    Are foreign buyers driving up the price of real estate? A new record in dollar amount spent by foreign buyers on US real estate.

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  • DRS » Blog

    Bye-Bye Bonus

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  • DRS » Blog

    Bye-Bye Bonus

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  • Ticker Sense

    June 22nd Blogger Sentiment Poll

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

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  • FinanceProfessor.com

    Top-CEO Pay Isn’t Driven By Talent, New Study Says - Real Time Economics - WSJ

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  • My voice and noise on subprime bank regulations

    If the US stops distorting the allocation of bank credit to the real economy… does Europe dare to be left behind?

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  • Paper Economy - A US Real Estate Bubble Blog

    The Chicago Fed National Activity Index: May 2015

    The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that the national economic activity remained weak in May with the index rising slightly to a level of -0.17 from a level of -0.19 in April while the three month moving average also improved slightly to a tepid level of -0.16. The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”. The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Existing Home Sales Report: May 2015

    Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for May showing strong sales with total home sales rising 5.1% since April and climbing 9.2% above the level seen in May 2014. Single family home sales also increased with sales rising 5.6 from April but and climbing 9.7% above the level seen in May 2014 while the median selling price increased 8.6% above the level seen a year earlier. Inventory of single family homes increased from April to 2.03 million units rising 1.5% above the level seen in May 2014 which, along with the sales pace, resulted in a monthly supply of 5.2 months. The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and m...more

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  • My voice and noise on subprime bank regulations

    Suppose a dictator decided on bank regulations.

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  • The Aleph Blog

    Stocks or Bonds?

    I was writing to potential clients when I realized that I don’t have so much to write about my bond track record as I do my track record with stocks.  I jotted down a note to formalize what I say about my bond portfolios.One person I was writing to asked some detailed questions, and I told him that the stock market was likely to return about 4.5%/yr (not adjusted for inflation) over the next ten years.  The model I use is the same one as this one used by pseudonymous Philosophical Economist.  I don’t always agree with him, but he’s a bright guy, what can I say?  That’s not a very high return — the historical average is around 9.5%.  The market is in the 85th-90th percentiles of valuation, which is pretty high.  That said, I am not tak...more

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  • Dr. Housing Bubble Blog

    Southern California takes the trophy for most overvalued real estate in the nation: Austin Texas now home to inflated real estate as well.

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  • Steve Keen's Debtwatch

    Are Surpluses Normal?

    England’s Chancellor George Osborne took the Conservative Party’s claim to fiscal responsibility one step higher last week when he announced that they will enact a law which will require British governments to run surpluses “in normal times”: “in normal times, governments of the left as well as the right should run a budget surplus to bear down on debt and prepare for an uncertain future.” (“Mansion House 2015: Speech by the Chancellor of the Exchequer”) Click here to read the rest of this post. ...more

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  • Steve Keen's Debtwatch

    How rising debt causes inequality and crisis

    In a (for me!) brief presentation with 7 slides, I explain why rising private debt necessarily causes increased inequality, and leads to an economic crisis when the rate of growth of debt exceeds the rate of decline of wages as a share of national income. Crucially, the actual breakdown is preceded by an apparent period of tranquility–a “Great Moderation”. This was a short talk to a public audience at ESCP Europe in Paris, which was presented in English and also translated into French by Gael Giraud, Chief Economist of the French Development Agency and the translator of Debunking Economics (so the soundtrack is in both English and French). Click here for the Powerpoint file Right-click here to download a Minsky file that has controls for (a) linear or nonlinear f...more

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  • The Aleph Blog

    Redacted Version of the June 2015 FOMC Statement

    Photo credit: jonesylife || Oh look, a dozen doves flying at the FOMC! April 2015June 2015CommentsInformation received since the Federal Open Market Committee met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors.Information received since the Federal Open Market Committee met in April suggests that economic activity has been expanding moderately after having changed little during the first quarter.Shades GDP up.  Why can’t the FOMC accept that the economy is structurally weak?The pace of job gains moderated, and the unemployment rate remained steady. A range of labor market indicators suggests that underutilization of labor resources was little changed.The pace of job gains picked up while the unemploy...more

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  • Piggington's Econo-Almanac

    May 2015 Housing Data Rodeo

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: May 2015

    Today’s New Residential Construction Report showed mixed results with total permit activity increasing 11.8% since April while total starts declined 11.1% over the same period.Single family housing permits, the most leading of indicators, increased 2.6% from April to 683K single family units (SAAR), and rose 9.1% 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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  • DRS » Blog

    CFTC scales new no-action heights

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  • DRS » Blog

    CFTC scales new no-action heights

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  • Ticker Sense

    June 15th Blogger Sentiment Poll

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

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  • The Baseline Scenario

    I Agree with Milton Friedman!

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  • A Fistful Of Euros

    Very, very foolish words.

    This FAZ story, suggesting that Angela Merkel and Wolfgang Schäuble are not on the best of terms over negotiations with Greece and that Wolfi might even resign, should be read in the context of Merkel’s past career. Schäuble wiederum habe nur zufällig von dem Treffen vorab erfahren und zwar nicht von der Kanzlerin, sondern weil ihm Lagarde davon erzählte, berichtet die „Bild“-Zeitung. Und zitiert einen anonym gebliebenen Berater Schäubles mit den Worten (über Merkel): „Das war eine Solo-Nummer von der Dame.“ Außerdem habe der Beamte in Schäubles Ministerium noch hinterher geschickt: „Merkel lässt sich gerade über den Tisch ziehen.“ So the Bild reckons Wolfi wasn’t invited to the meeting in Berlin where Hollande, Merkel, Juncker, Draghi,...more

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  • The Baseline Scenario

    What Is the Trans-Pacific Partnership (TPP) Really All About?

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  • Emerging markets

    Asia: More inbound Japan M&A questioned

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  • Emerging markets

    Chinese corporates question value of advice

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  • FinanceProfessor.com

    Women On Wall Street: Just A Tiny Portion Of Mutual Fund Managers Are Women

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  • The Baseline Scenario

    Over at Medium: Geo-Engineering Doesn’t Reduce Long-Term Risk

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  • Emerging markets

    Sri Lanka: Finance minister embarks on ‘repair job’

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  • footnoted*

    A very expensive year for Hertz

    How much is a year of, presumably, hard work worth? At Hertz Global Holdings, the answer is north of $8 million. Last week, Hertz filed this 8-K disclosing severance details for Hertz Equipment Rental Corp. (HERC) CEO Brian MacDonald. As both this press release and the filing noted, MacDonald stepped down on May 20. Unlike similar announcements and 8-Ks, the “personal reasons” or “more time with the family” language wasn’t trotted out. Ditto for the language about “no disagreements” that is standard fare in most 8Ks announcing a sudden departure. Indeed the press release, didn’t even have the perfunctory quote from the company’s CEO praising MacDonald. Instead, CEO John Tague was quoted as saying that newly appointed...more

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  • FinanceProfessor.com

    Malkiel: Smart Beta = Smart Marketing Doesn't Equal Smart Investing

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  • Piggington's Econo-Almanac

    March -- April 2015 Housing Data Rodeo

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  • footnoted*

    Herbalife v. Ackman: Who’s manipulating whom?

    It’s been nearly 2 1/2 years since Pershing Square’s Bill Ackman made a 300-page presentation outlining his short position in Herbalife. Since then, countless pixels (not to mention video footage and actual ink) has been devoted to the seemingly never-ending battle, complete with dueling websites (see this company site and this anti-Herbalife site). Here at footnoted, we haven’t really spent too much time on the back-and-forth volleying. Still, a disclosure in the 10-Q that Herbalife filed yesterday afternoon — the same day it reported better-than-expected results that are causing the stock to surge today — caught our attention. Although the disclosure didn’t mention Ackman by name, it’s hard to imagine who else the company coul...more

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  • Jeff Matthews Is Not Making This Up

    Sgt. Pepper! Joe Cocker! Jimmy Page! Oh, and Warren and Charlie...

                      The best part of this year’s Berkshire meeting—except seeing Charlie Munger in good form, which we’ll get to in a bit—was the movie.            Not the movie itself, but the end of the movie, when the sing-along tribute to Berkshire’s managers, which always used to be set to the tune of “My Favorite Things,” turned out to use “Sgt. Pepper” instead.            That’s some good taste there.    But, actually, the best part of the Beatles-themed piece of the movie came as it died out and, miraculously, the “Sgt. Pepper Reprise”—the best two minutes of The Bea...more

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  • Richard's Real Estate and Urban Economics Blog

    Is Free Trade Good for Everyone?

    Greg Mankiw implies that it is, and that all economists agree that it is.  But it actually isn't.  Who says so?  Economists.In particular, the workhorse theory of International Trade, the Hecksher-Ohlin Theorem, leads to the Stolper-Samuleson Theorem, which shows that when countries start trading with each other, the relatively abundant factor of production in each country becomes better off, while the relatively scarce factor becomes worse off.   In the US context, this implies that opening up trade will leave capital better off relative to labor, and skilled labor better off relative to unskilled labor.Does trade increase the total size of economies?  Yes--this is something that economists do agree on. But in the absence of redistribution--som...more

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  • Jeff Matthews Is Not Making This Up

    Messi Announces Retirement, Reporter Asks About Half-Time Score

     Tom Prescott announced his retirement last night.   You may not have heard of him, but as CEO of Align Technologies (the inventors of Invisalign “invisible braces”) Prescott helped turn a $70 million revenue company with 35% gross margins, negative operating margins and a $127 million market value into a near-$800 million revenue company with near-80% gross margins and 25% operating margins. Oh, yeah, and a $4.5 billion market value, last we checked. More than that, Tom Prescott helped Invisalign develop from a niche product not much liked by the orthodontists who were supposed to use it (it’s far more expensive to them than the old-fashioned wires and brackets, plus, in the early days, before Prescott, the Invisalign treatment was far mo...more

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  • Piggington's Econo-Almanac

    February 2015 Housing Data Rodeo

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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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  • Mises Institute

    A Short History of Man: Progress and Decline

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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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  • 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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  • 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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  • Mises Institute

    Human Action: A Treatise on Economics

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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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  • 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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Aaron Menenberg Policies of Scale

Aaron Menenberg is Foreign Policy and Energy analyst, and a Future Leader with Foreign Policy Initiative. He also co-hosts Podlitical Risk (@podliticalrisk). He is a graduate student in international relations at The Maxwell School of Syracuse University. Previously he has worked at Praescient Analytics, The Hudson Institute, for the Israeli Ministry of Defense, and at the IBM Corporation. The views expressed are his own, and you can follow him on Twitter @AaronMenenberg. He welcomes questions and comments at menenbergaaron@gmail.com.