EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • The Big Picture

    Random Thoughts for October

    Over the course of each month, I end up with quite a few random thoughts. They are the interesting tidbits that are not quite meaty enough to be worthy of a full column. But they often are interesting enough to stimulate thinking and provoke discussion. Rather than toss them out, I save them up over the course of each month. Here is what October’s random thoughts look like: • Americans spend more than $2 billion on Halloween candy each year; we spend even more than that on costumes. • The Bank of Japan surprised everyone by upping its stimulus to 80 trillion yen ($717 billion). Previously, it was more than 60 trillion yen. • Tomorrow begins the best six months of the year for stock markets. Since 1950, almost all of the market’s gains have come between Nov...more

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  • Abnormal Returns

    Friday links: solar returns

    Quote of the day Daniel Gross, “In fact, financial engineering has turned solar into a rather conservative, low-risk investment.”  (Slate) Chart of the day A big day for Japan ETFs.  (ETF) Markets QE may be done in the US, but overseas….  (The Reformed Broker) Don’t think the bear market in gold and silver is near done.  (Behavioral Macro) Market tops take time to form.  (Chris Perruna) Companies Starbucks ($SBUX) rules the mobile payments roost.  (FT) How Apple ($AAPL) Pay could transform in-app purchases.  (Pando Daily) How the market ruined Twitter ($TWTR).  (Justin Fox) How to make money off space exploration.  (Daniel Nadler) It’s a brave new world when a one-year old startup can capture a $1 billion valuation.  (Digits) Fin...more

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  • FT Alphaville

    The perpetual battle over War Loan

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  • Real Time Economics

    Senate Panel to Hold Hearing on Regulators’ Ties With Banks

    Sen. Tim Johnson (D., S.D.) Bloomberg News A U.S. Senate panel will hold a hearing on Nov. 21 over whether financial regulators are too close to or too soft on the banks they supervise. The announcement follows a report from investigative journalism website ProPublica and broadcast news program “This American Life,” using taped conversations from an ex-employee alleging the Federal Reserve Bank of New York, which is led by former Goldman Sachs partner William Dudley, went easy on Goldman in certain regulatory matters. Senators Tim Johnson, (D., S.D) and Sherrod Brown (D., Ohio) said Mr. Brown will chair a hearing of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection focused on the matter. “American taxpayers deserve regulators ...more

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  • FT Alphaville

    US wage and salary growth inching up, still very slowly

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  • The Mises Economics Blog: The Circle Bastiat

    The Olympics: The Biggest Corporatist Sports Scam of All

     The 2022 Olympics (i.e., the Winter Games) is now down to only two applicant nations: China and Kazakhstan. This follows the withdrawal of Norway after the taxpayers of Norway balked on ponying up the cash necessary to make the Olympics a playground for the world’s richest cronies and politicians. Theoretically, the Olympics are a private organization, but in practice, it is a corporatist organization run by plutocrats whose mission in life is apparently to squeeze as much tax revenue as possible out of the residents of the countries and cities that host the Olympics. This is done by demanding the usual brand-spanking new stadiums and facilities from the host cities that later become white elephants. But the IOC also demands countless perks, such as only the fin...more

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  • The Baseline Scenario

    A Conference On Finance For Everyone Else

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  • The Big Picture

    Halloween: The Chemistry of Candy

    Source: Compound Chem

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  • Calculated Risk

    Preliminary: 2015 Housing Forecasts

    The NAHB released their 2015 housing forecast today. Towards the end of each year I collect some housing forecasts for the following year, and it looks like most analysts are optimistic for 2015.Here is a summary of forecasts for 2014. In 2014, new home sales will be around 440 thousand, and total housing starts will be close to 1 million.  No one was close on New Home sales (all way too optimistic), and Michelle Meyer (Merrill Lynch) and Fannie Mae were the closest on housing starts (about 10% too high).In 2014, many analysts underestimated the impact of higher mortgage rates and higher new home prices on new home sales and starts. Note: Here is a summary of forecasts for 2013. In 2013, new home sales were 429 thousand, and total housing starts were 925 thousand....more

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  • Real Time Economics

    Deflation Hit More Eurozone Products in October

    The European Central Bank’s worry is that if prices fall, consumers might be inclined to wait on purchases, removing even more momentum from the economy. Bloomberg News The pickup in the eurozone’s annual rate of inflation in October may ease some immediate pressure on the European Central Bank to provide more stimulus. But the rise in the headline rate to 0.4% from 0.3% doesn’t tell the whole story. Looked at another way, prices of a larger array of goods were lower than a year earlier. Energy accounts for 10.8% of the eurozone inflation basket, and energy prices have been lower than in the same month a year earlier since July. Unprocessed food makes up another 7.5% of the basket, and prices have also been falling in recent months. In September, that left 18...more

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  • Real Time Economics

    One Reason for Inflation Softness Might Be the Season, Fed Research Suggests

    Inflation tends to be a little higher in the first six months of the year and a little lower in July through December. Agence France-Presse/Getty Images Consumer prices might look soft in part because it’s the second half of the year. Inflation has been subdued across developed economies for the last few years. In the U.S., prices rose a sluggish 1.4% in September from a year earlier  and remained below the Federal Reserve’s 2% target for a 29th consecutive month, the Commerce Department said Friday. But be cautious about reading too much into month-to-month movements. Even after adjustment for seasonal variations, “the past 10 years have typically seen a pattern in which consumer price inflation has tended to be higher in the first half of the year than in ...more

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  • The Capital Spectator

    US Consumption Declined In September

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  • FT Alphaville

    Your extended Abe put

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  • Calculated Risk

    Final October Consumer Sentiment at 86.9, Chicago PMI increases to 66.2

    Click on graph for larger image.The final Reuters / University of Michigan consumer sentiment index for October was at 86.9, up from the preliminary reading of 86.4, and up from 84.6 in September.This was slightly above the consensus forecast of 86.4. Sentiment has generally been improving following the recession - with plenty of ups and downs - and a big spike down when Congress threatened to "not pay the bills" in 2011.This was the highest level since 2007.Chicago PMI October 2014: Chicago Business Barometer Up 5.7 Points to 66.2 in October, New Orders Rise Sharply to the Highest Since October 2013 The Chicago Business Barometer rose 5.7 points to a one year high of 66.2 in October, fuelled by a double digit gain in New Orders. ... New Orders was the strongest compo...more

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  • naked capitalism

    Slugfest Over Taibbi Exodus From First Look Fails to Address Editorial Meddling Doubts

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  • Abnormal Returns

    Podcast Friday: taking on Google

    Every week brings a slew of new podcasts and videos. Meb Faber argues that podcasts are the perfect medium for discussions about finance and investing. You can also check out last week’s links. Tell us if there is anything we missed. News What’s behind the great podcast renaissance?  (NYMag) Podcasts so good you want to binge listen.  (The Atlantic) Episodes Michael Covel talks trend following with Alex Greyserman co-author of Trend Following with Managed Futures: The Search for Crisis Alpha.  (Trend Following Radio) Larry Cunningham author of Berkshire Beyond Buffett: The Enduring Value of Values talks Authors@Google. (YouTube) The conclusion to How to Win the Loser’s Game.  (Sensible Investing) Barry Ritholtz talks with Paul Krugman.  (Big Pictur...more

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  • Calculated Risk

    BEA: Personal Income increased 0.2% in September, Core PCE prices up 1.5% year-over-year

    The BEA released the Personal Income and Outlays report for September: Personal income increased $22.7 billion, or 0.2 percent ... in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $19.0 billion, or 0.2 percent....Real PCE -- PCE adjusted to remove price changes -- decreased 0.2 percent in September, in contrast to an increase of 0.5 percent in August. ... The price index for PCE increased 0.1 percent in September, in contrast to a decrease of 0.1 percent in August. The PCE price index, excluding food and energy, increased 0.1 percent in September, the same increase as in August. ...Personal saving -- DPI less personal outlays -- was $732.2 billion in September, compared with $702.0 billion in August. The per...more

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  • The Big Picture

    10 Friday Reads

    Japan is sending us a treat – or is it a trick? Its Halloween, and here are my morning train reads: • The U.S. recovery is frustrating — but it’s the envy of the advanced world (Wonkblog) see also U.S. Economy Up 3.5% in 3rd Quarter, Capping Best 6 Months in Over a Decade (Bloomberg) • How this Investment Firm Hopes to Revolutionize Litigation in America (Mimesis Law) •  Value Trap Underneath Gold Miner Fund GDX (ETF) see also Charts Suggest Gold Will Keep On Falling (Barron’s) • Solar Flair: How do you make ray-soaking roof panels a hot investment? By making them a boring one (Slate) • How Long Can The Shale Revolution Last? (Oil Price)  Continues here           ...more

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  • Macro Man

    Boom goes the dynamite

    No Fed LSAPs?  No problem!  Team Japan delivered a double-barreled assault on the nattering nabobs of negativity last night, with an aggressive expansion of the BOJ's QQE program and the long-awaited announced of the new GPIF model portfolio.Unsurprisingly, the Nikkei went doo-lolly last night, with futures now at new cyclical highs.  So too did the yen, with USD/JPY at its highest level in nearly seven years.Naturally, Japan's domestic financial asset developments have resonated throughout the globe, dragging global equities higher and EUR/USD very slightly lower.  Curiously, given the generally close ties between fixed income and the yen (as well as portfolio shifts vis-a-vis equities), Treasuries are only slightly down today (and German bonds are ...more

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  • Dealbreaker

    Opening Bell: 10.31.14

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  • naked capitalism

    Links 10/31/14

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  • DRS » Blog

    First CCP equivalencies- US still barred from the club

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  • DRS » Blog

    First CCP equivalencies- US still barred from the club

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  • The Housing Bubble Blog

    The Risks You Think You Have Seen Before

    It’s Friday desk clearing time for this blogger. “Changing market dynamics put more power in the hands of buyers than sellers, says Stan Humphries, Zillow’s chief economist. At the end of September, there were almost 19 percent more homes on the market than last year. Nearly 37 percent of listed homes on Zillow had at least one price cut in the past month, up from 33.6 percent in September 2013. ‘Sellers have had their day in the sun for several years in a row now. It’s time to get back to a balanced market and for buyers to have their day,’ Humphries says.” “Brian Walters, a Redfin real estate agent who works in Alexandria, Virginia, has seen changing dynamics among his clients, too. ‘It seems like buyers have definitely pi...more

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  • The Capital Spectator

    Initial Guidance | 31 October 2014

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  • Dr. Housing Bubble Blog

    Blame the fall in homeownership on Generation X: Why did the homeownership rate fall so dramatically for those 35 to 44?

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  • naked capitalism

    Fed Needs to Stop Asset Acquisitions for a Generation or So

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  • The Mises Economics Blog: The Circle Bastiat

    The Housing Boom Returns

    For the last decade (or more), Canadians have been ebullient about their home-grown housing boom. Home prices in Toronto have grown by leaps and bounds over the past decade. New homeowners have rushed in to take advantage of what seems like a surefire path to riches. Unfortunately while your home might be an asset if you own it outright, for the vast majority increasing housing prices have meant higher mortgage or rent payments. Associated home-ownership fees have also risen steeply. Property taxes are a percentage of assessed value, so they have also risen over the boom. Utility expenses have gone up, as have general maintenance costs. In short, it’s not cheap owning a home. Apparently Canadians now spend more income on housing then almost anywhere else on the planet...more

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  • The Housing Bubble Blog

    Bits Bucket for October 31, 2014

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

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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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  • Steve Keen's Debtwatch

    Crash! Boom! Pop! On Boom! Bust!

    The wonderful team of Erin Ade, Ed Harrison and friends at Boom Bust did a fantastic item on the Crash! Boom! Pop! project. Check out the interview and the brilliant graphics they put together to showcase Miguel Guerra’s artistic talents. And then pop over to Kickstarter or Startjoin to help bring this project to life. The whole program is worth watching, but the item on Crash! Boom! Pop! begins halfway through the show (14 minutes & 50 seconds in). If you want to get straight to the item, click on the link: https://www.youtube.com/watch?v=O-AFmeP19mE#t=889 ...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Thoughts about Latest Insider-Trading Scandal

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  • The Mises Economics Blog: The Circle Bastiat

    Mark Thornton on the European Debt Crisis

    PressTV Reports: Over the past several years, most of the attention of the eurozone debt crisis has been focused on the economic struggles of Greece, Spain and Portugal and without a doubt things will continue to get even worse in those nations. However, the predictions have been that in 2014 and 2015, Italy and France will start to take center stage in eurozone debt crisis. France has the fifth largest economy on the planet, and Italy has the 9th largest economy on the planet, and at this point both of those economies are rapidly contracting. See Mark’s analysis at the 12:12 mark and again at the 20:45 mark. ...more

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  • Dealbreaker

    Write-Offs: 10.30.14

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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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  • Dealbreaker

    SEC Might, Might Not Be Doing Its Job Vis-à-Vis Bitcoin

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  • DealBook

    Praise for Coming Out From Someone Who Did

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  • Abnormal Returns

    Thursday links: averaging in and out

    Quote of the day Fred Wilson, “It goes back to optimizing versus satisficing. If you want to find the optimal entry price or the optimal exit price, you will drive yourself crazy. I prefer to find an acceptable price. And I think that averaging in and averaging out does that for you.”  (A VC) Chart of the day Where various sectors sit relative to their 52-week highs.  (Bespoke) Commodities The case for corn.  (Andrew Thrasher) Are gold miners a value trap?  (ETF) Natural gas liquid (NGL) trading volume is picking up.  (WSJ) Strategy Bond markets are a lot smarter than equity markets.  (Alpha Architect) Why high yield bond investors should pay attention to the stock market.  (CSSA) Is factor investing useless?  (Pragmatic Capitalism) Why we shouldn&#...more

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  • The Capital Spectator

    Personal Consumption Expenditures: September 2014 Preview

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  • The Housing Bubble Blog

    When Appreciation Slows, There’s No Call To Action

    The Merced Sun Star reports from California. “Merced County’s property value increase of 9.3 percent to $19.5 billion ranked as the second highest increase in California from the same time last year. Stanislaus County property values had the highest year-over-year increase, rising 11.4 percent to $39.7 billion for the 2014-15 tax year, and San Joaquin County’s 8.8 percent increase to $61 billion was the fourth highest percentage gain among California’s 58 counties. Terry Ruscoe, owner of Merced Yosemite Realty in Merced, said Merced’s property values are being pushed up by continued interest from Bay Area investors and having many more homes in escrow compared to a year ago. ‘The market’s moving and the market’s pushing prices up,’ he said....more

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  • DRS » Blog

    FSB on Structural Reform- too early to tell, may be trouble ahead

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  • DRS » Blog

    FSB on Structural Reform- too early to tell, may be trouble ahead

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Central Clearing and the Bank of England

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  • The Aleph Blog » The Aleph Blog

    Redacted Version of the October 2014 FOMC Statement

    Photo Credit: DonkeyHoteySeptember 2014October 2014CommentsInformation received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace.Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace.No change. This is another overestimate by the FOMC.On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources.Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that...more

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  • Macro Man

    Get in there

    "Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year."If the put fly mentioned in today's earlier piece is ever gonna work, this should do it.  Other than Kocherlakota's preference for ZIRP on a Buzz Lightyear timescale, the statement was about as un-dovish as could reasonably have been expected.Get in there!  ...more

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  • DRS » Blog

    EU on benchmarks – L’Enfer, c’est les autres

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  • DRS » Blog

    EU on benchmarks – L’Enfer, c’est les autres

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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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  • Macro Man

    It's all about inflation

    So.  Today's the day when markets will, presumably, be freed from the yoke of Fed QE for the first time in two years.  After the judders of a couple of weeks ago, equities now seem relatively sanguine about the prospect; could you have envisaged 10 trading days ago that the VIX would be below 15?What's interesting to note is that while Spooz have roared back nearly to their highs, US fixed income has trod a decidedly more careful path.  Indeed, overlaying a chart of SPX futures with EDZ5 illustrates how resilient rates have been; simply eyeballing the chart suggests that EDZ5 "should" be 30 ticks lower.Of course, a few things have changed in the interim.   James "5 Minute Macro" Bullard suggested during the equity sell-off that the Fed could def...more

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  • The Aleph Blog » The Aleph Blog

    Book Review: Berkshire Beyond Buffett

    It’s time to change what Warren Buffett supposedly said about his mentors:“I’m 85% Ben Graham, and 15% Phil Fisher.”For those who don’t know, Ben Graham is regarded to be the father of value investing, and Phil Fisher the father of growth investing.  Trouble is, Warren Buffett changed in his career such that this is no longer accurate.  Most of Buffett’s economic activity does not stem from buying and selling portions of public companies, but by buying and managing whole companies.  Buffett is the manager of a conglomerate that uses insurance reserves as a funding vehicle.As a result, this would be more accurate about the modern Buffett:Buffett is 70% Henry Singleton, 15% Ben Graham, and 15% Phil Fisher.Henry Singleton was the C...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Hedge vs. Mutual Funds and the ‘Timing of Information Acquisition’

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  • Steve Keen's Debtwatch

    Support Crash! Boom! Pop! on Kickstarter & Startjoin

    A brilliant team of graphic artist Miguel Guerra, layout artist Suzy Dias, and writer Genevieve Tran have combined to produce what I can describe as a “cartoon version of Debunking Economics”. They plan to produce up to six graphic novels around the theme of “M” (Money, Mayhem–the Financial Crisis–Method, Macro and Micro), to use visual media to take the mickey out of economics for those who don’t want to wade through a 500 page book. They’re running a Kickstarter campaign now–starting on the 85th anniversary of Black Tuesday 1929. The product will be brilliant. Miguel’s cartoons are Marvel Comic standard, and the text from gonzo-blogger Genevieve Tran will be sharp and modern. It will put the message that mainstream economics is seriously ill in a ...more

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  • The Aleph Blog » The Aleph Blog

    Waiting to Buy

    Photo Credit: Brett Davies || Waiting, but to what end?When I worked in the investment department of a number of life insurers, every now and then I would hear one of the portfolio managers say, “We know that the rating agencies are going to downgrade the bonds of XYZ Corp, but we like the story.  We’re just waiting until after the downgrade, and then we will buy, because they will be cheaper then.”And, sometimes it would work.  Other times, nothing would happen at the downgrade, and they would buy at the same price.  But more interesting and frequent were the times when the bonds would rally after the downgrade, which would make the portfolio managers wince and say, “Guess everyone else was waiting to buy also.”Now, there was a point i...more

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  • Dr. Housing Bubble Blog

    Rental rates are outpacing wage growth: What are the implications of rising rents when wages are simply not keeping up?

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  • Ticker Sense

    October 27th Blogger Sentiment Poll

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

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  • The Skeptical Speculator

    Blog announcement

    This is just to announce that there will be minimal blogging over the next week or two. Thank you.

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  • My voice and noise on subprime bank regulations

    The Basel Committee's Bank Stability Decree (scary eh?)

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  • My voice and noise on subprime bank regulations

    I am sure that for Europe’s young unemployed, all 123 European banks failed EBA’s and ECB’s stress tests… dramatically.

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  • My voice and noise on subprime bank regulations

    What "market triumphalism" are you referring to Professor Michael Sandel?

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  • The Skeptical Speculator

    Markets mixed, UK economy decelerates, US and Chinese home prices fall

    Markets were mixed on Friday. The S&P 500 rose 0.7 percent to extend its gain for the week to 4.1 percent, the best since January 2013. However, the STOXX Europe 600 fell 0.3 percent to trim its weekly gain to 2.7 percent, still the best this year. Economic data on Friday were also mixed. The UK economy decelerated in the third quarter, growing by 0.7 percent compared with 0.9 percent in the second quarter. The services industry grew 0.7 percent in the third quarter, down from 1.1 percent in the previous quarter, while manufacturing output grew 0.4 percent, down from 0.5 percent. In the US, new home sales rose 0.2 percent in September but data for prior months were revised down. The median sales prices fell 4 percent in September from a year ago, the first decline since...more

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  • A Fistful Of Euros

    Confidence to spend

    This slide is from Mario Draghi’s presentation to the European Union council today. As the caption states, he says it shows that investment is suffering from a lack of confidence. But it perhaps more clearly shows that private investment has suffered as public investment has been slashed. And public investment is nothing to do with mercurial confidence — it’s something governments control! A “you first” approach to investment is not going to get us very far. ...more

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  • Dr. Housing Bubble Blog

    The myth of buying a home and staying put: Tiny home in Pasadena reaching peak prices as square footage decreases.

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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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  • The Skeptical Speculator

    Markets rally amid positive economic data

    Markets resumed their rally on Thursday. The S&P 500 rose 1.2 percent and the STOXX Europe 600 rose 0.7 percent. The US 10-year Treasury yield rose six basis points to 2.27 percent. Oil and copper also rose. Positive economic data on Thursday helped boost markets. In the US, Markit's preliminary manufacturing PMI for October showed a fall to 56.2 in from 57.5 in September but remained well in expansion territory while the Chicago Federal Reserve's national activity index jumped to +0.47 in September from -0.25 in August. US economic growth is likely to be maintained after the Conference Board's US index of leading indicators rose 0.8 percent in September. Economic data for the euro area on Thursday were also positive. Markit's preliminary composite PMI for the region f...more

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  • A Fistful Of Euros

    Does The Secular Stagnation Theory Have Any Sort of Validity?

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

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  • Ticker Sense

    October 20th Blogger Sentiment Poll

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

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  • Jeff Matthews Is Not Making This Up

    Don't Blame IBM. Blame Wall Street

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

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  • A Fistful Of Euros

    Open Letter to the Economist on Catalonia – J’accuse

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

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: September 2014

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

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  • 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

    VIX and More Fear Poll

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

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  • Paper Economy - A US Real Estate Bubble Blog

    Retail Sales: September 2014

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

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – October 15 2014

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

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  • Steve Keen's Debtwatch

    About $7500 raised thus far for Standish-Minsky

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

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  • VIX and More

    Largest SPX Pullback of 2014 Hits 6.4%

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

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  • Ticker Sense

    October 13th Blogger Sentiment Poll

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

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  • Piggington's Econo-Almanac

    September 2014 Housing Data Rodeo

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  • footnoted*

    GT Technologies warned in August

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

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  • Emerging markets

    Malaysia mega-merger seeks central-bank approval

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  • FinanceProfessor.com

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

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  • Emerging markets

    IMF struggles for relevance

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  • The Baseline Scenario

    Cultural Capture and the Financial Crisis

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  • Emerging markets

    Asian bankers bathe in Alibaba afterglow

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  • FinanceProfessor.com

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

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  • footnoted*

    Comment letter ahead of BofA’s $8M Fine

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

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  • Richard's Real Estate and Urban Economics Blog

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

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

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  • Richard's Real Estate and Urban Economics Blog

    How Piketty's care with language can improve economics

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

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  • FinanceProfessor.com

    Active vs. Passive in Global Investing | Financial Planning

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  • Piggington's Econo-Almanac

    August 2014 Housing Data Rodeo

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  • Jeff Matthews Is Not Making This Up

    Berkshire Hathaway: Wholesaler of Death?

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

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  • Institutional Economics

    I am leaving CIS and returning to financial markets

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

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  • Institutional Economics

    Wayne Swan on Monetary Offset and the GFC

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

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  • Piggington's Econo-Almanac

    July 2014 Housing Data Rodeo

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  • The Prudent Investor

    The Coming Silver Shortage

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

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  • Institutional Economics

    The Financial System Inquiry and Macro-Pru

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

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  • Jeff Matthews Is Not Making This Up

    Okay FINRA, Who Had The Call From The FHFA?

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

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  • A Dash of Insight

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

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

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  • A Dash of Insight

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

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

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  • A Dash of Insight

    The Sound of Silence

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

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  • Felix Salmon

    Post Felix

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

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  • Felix Salmon

    The Piketty pessimist

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

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  • Economix

    Economix Meets the Gales of Change

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  • Economix

    Economix Meets the Gales of Change

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  • Felix Salmon

    The most expensive lottery ticket in the world

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

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  • Economix

    Mortgage Reform Is Worth the Small Extra Cost to Borrowers

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  • Economix

    Mortgage Reform Is Worth the Small Extra Cost to Borrowers

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  • Economix

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

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  • Economix

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

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  • 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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Dr Dan Steinbock is a recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond).

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