EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • Real Time Economics

    A Fresh Look at the Building Blocks of Economic Growth

    The Commerce Department on Friday will unveil a new quarterly report to provide a new way of gauging the composition and growth of the U.S. economy. The new report will show a quarterly breakdown of GDP by industries. And we don’t have to wait until Friday to get an idea what the data will look like and what can be done with it, because the Commerce Department has published some prototypes and Carol Moylan, the economist who sees industry-wide stats has given a presentation on the data. The current report divides the economy into categories of consumption, investment, government spending and imports and exports. The new report breaks it down by industry.     Here’s a look at what data from the prototype showed in the fourth quarter of 2009 (the prototype didn...more

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  • DealBook

    Case Closed in Securities Dispute, Until New Evidence Is Uncovered

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  • DealBook

    Warburg Pincus to Invest in PayScale, a Compensation Data Firm

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  • Dealbreaker

    Write-Offs: 04.24.14

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  • The Big Picture

    10 Thursday PM Reads

    My afternoon train reading: • The Richer You Are the Older You’ll Get (Real Time Economics) • Mom and pop are stepping up their trading. (WSJ) • Checklist: How to Spot a Bubble in Real Time (TBP) see also Americans Are Still Idiots When It Comes to Investing (Fiscal Times) • Mobile tie-ups hit right note for music streaming services (FT) • Einhorn’s Greenlight Lost 1.5% in 1Q, Warns of ‘Tech Bubble’ (MoneyBeat) see also Bill Ackman Gets into the Hostile Takeover Business (Bloomberg View) • Want to reboot civilization? What you’ll need (The Boston Globe) • Does Putin Want a War? (National Interest) • The Real IRS Scandal That’s Costing Uncle Sam Trillions (Perrspectives) • Studies of Bloated CEO Pay Miss the Fattest Cats in Amer...more

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  • Real Time Economics

    ECB Constancio: Considering All Options To Stem Risks From Low Inflation

    The European Central Bank is considering non-conventional instruments, including asset purchases, to stem a prolonged period of low inflation, Vice President Vitor Constancio said Thursday. The logo of the European currency Euro is pictured in front of the European Central Bank in Frankfurt am Main, western Germany. AFP/Getty Images “We are concerned about that, and we will see if indeed the developments of inflation in the euro area justify that preemptively we will have to do something,” he said at a conference in Madrid, adding that no concrete decision has been made by the ECB’s governing board. “We are looking into all instruments, including non-conventional instruments such as asset purchases… in order to respond to risks that come from a very prolo...more

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  • FT Alphaville

    When corporate credits fall out of the sky

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  • The Mises Economics Blog: The Circle Bastiat

    National Popular Vote Nonsense

    New York has just joined the national popular vote (NPV) compact. In the name of democracy, it would pledge each adopting state’s electoral votes to whoever received the largest national vote, if enough other states do the same. It brings adopters to 165 out of 270 state electoral votes necessary to impose their agreement. Unfortunately, NPV fails to achieve its core rationale–fixing supposed disenfranchisement of voters in “safe” states. And beyond sidestepping the Constitution, it would undermine, rather than enhance, the perceived legitimacy of a close election victor. There would always be plausible claims that close races were stolen, since fraud or cheating or other forms of running up the vote anywhere could swing such an election. It could create the...more

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  • Calculated Risk

    Lawler: More Builder Results, Summary of Q1 Results so far

    D.R. Horton, the nation’s largest home builder, reported that net home orders in the quarter ended March 31, 2014 totaled 8,569, up 8.8% from the comparable quarter of 2013. Horton’s average community count last quarter was up 11% from a year ago. The company’s sales cancellation rate, expressed as a % of gross orders, was 19%, unchanged from a year ago. Home deliveries totaled 6,194 last quarter, up 13.4% from the comparable quarter, at an average sales price of $271,230, up 11.8% from a year ago. The company’s order backlog at the end of March was 10,059, up 5.3% from last March.In response to overall weak demand from first-time home buyer, partly attributable in home price increases over the past two years, Horton announced in its conference call that is i...more

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  • DealBook

    Investors Enthusiastic About Zimmer’s Deal for Rival

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  • Dealbreaker

    Bonus Watch ’14: Directors of Publicly-Listed British Companies

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  • The Baseline Scenario

    I’m Shocked, Shocked!

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  • Calculated Risk

    Hotels: Occupancy Rate, RevPAR decrease in latest weekly survey

    From HotelNewsNow.com: US hotels report occupancy, RevPAR decreases The U.S. hotel industry reported occupancy and revenue-per-available-room decreases during the week of 13-19 April 2014, according to data from STR, parent company of Hotel News Now.Overall, in year-over-year measurements, the industry’s occupancy decreased 2.7% to 62.8%. RevPAR decreased 0.3% to $70.58. Average daily rate increased 2.5% to $112.37.emphasis addedNote: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.The weekly decline was probably related to the timing of Easter, however the 4-week average of the occupancy rate is solidly above the median for 2000-2007, and is at the highest level since 2000.  The following graph shows the seasonal pattern for the hotel occupancy rate ...more

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  • Dealbreaker

    Barclays Chief Needs Shareholders To Just Calm Down And Give Him Some Breathing Room While He Puts The Finishing Touches On Massive Layoff Plan

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  • Real Time Economics

    Senate Banking Committee to Vote on Fed Nominees on April 29

    WASHINGTON–The Senate Banking Committee will vote next Tuesday on three of President Barack Obama‘s nominees for the Federal Reserve Board of Governors, including Stanley Fischer, his choice for vice chairman. The committee will vote April 29, on the nominations of Mr. Fischer, Jerome Powell and Lael Brainard, the panel said Thursday in a press release. Mr. Powell is a current member of the Fed board who has been nominated for another term. Ms. Brainard is a former Treasury official. Mr. Fischer is the former head of the Israeli central bank. Mr. Obama nominated the three for the Fed in January and the committee held a hearing on their nominations in March. If the committee votes to approve their nominations, they would proceed to the Senate floor for final confirma...more

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  • The Big Picture

    Space-based Solar Power Transmission

      click for ginormous interactive graphic Source: Visual.ly

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  • The Mises Economics Blog: The Circle Bastiat

    Our Oligarchs Can Thank James Madison

    Ryan McMaken writes in today’s Mises Daily:  A recent study from Princeton and Northwestern concluded that the United States is an “oligarchy” ruled by a small group of wealthy elites and interest groups. According to authors Martin Gilens and Benjamin Page: The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Are interest groups and wealthy elites more powerful than the average American? Certainly evidence of that is all around us. ...more

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  • The Mises Economics Blog: The Circle Bastiat

    How Terrible Are Some Scientific Journals?

    Recently, a reporter for the Ottawa Citizen wrote a completely fabricated and incoherent paper on soils, cancer treatment, and Mars. Its full title? “Acidity and aridity: Soil inorganic carbon storage exhibits complex relationship with low-pH soils and myeloablation followed by autologous PBSC infusion.” The paper, comprised solely of unrelated phrases lifted from existing research, was then submitted to 18 low-level, for-profit journals that cater to the segment of the academic market comprised of individuals willing to pay for publication and, by extension, their own tenure and promotion. The result? Eight quickly responded with offers to publish the work for payments between $1000 and $5000. ...more

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  • Abnormal Returns

    Thursday links: fair returns

    Quote of the day Scott Krisiloff, “If we are leaving the 20th century behind, then maybe we have to leave behind our concept of fair returns on investment.  Dividends are one signal telling us to lower our expectations.”  (Avondale Asset) Chart of the day Apple is now the world’s biggest dividend payer.  (Quartz) Markets David Einhorn’s bubble call is premature.  (Barry Ritholtz, Random Roger) Mom and pop are once again trading stocks.  (WSJ) Bullish sentiment is ticking back up.  (Bespoke) Commidities Pension funds are sniffing around commodities again.  (FT) Why there are no liquid milk futures.  (Attain Capital) How El Niño affects certain commodities markets.  (MoneyBeat) Strategy Andrew Thrasher, “Many traders that I know an...more

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  • The Big Picture

    To Whom Does the U.S. Government Owe Money?

    Over at Political Calculations, they have updated an excellent graphic showing the various folsk Uncle Sam owes money to: click for larger graphic Source: Political Calculations   ...more

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  • FT Alphaville

    “A complete and absolute violation of our rules”

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  • Calculated Risk

    Kansas City Fed: Regional Manufacturing "Activity Moderated Slightly" in April

    From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Moderated Slightly The Federal Reserve Bank of Kansas City released the April Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity moderated slightly after rising to a two-year high in March, but producers’ expectations for future factory activity climbed higher.“Regional factory expansion was not quite as strong in April as in March, when better weather provided a boost”, said Wilkerson. “But April’s numbers were otherwise the best in nearly two years, and firms were generally optimistic.”The month-over-month composite index was 7 in Apr...more

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  • FT Alphaville

    Denmark: don’t be so negative

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  • The Capital Spectator

    Will The Weak Housing Market Pinch The Economy?

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  • naked capitalism

    Links 4/24/14

    If you are in New York City, be sure to drop by our meetup this Friday, from 5:00 to 8:00 PM at Sláinte at 304 Bowery (map with nearby train stops here). Be there or be square! Massive new fraud coverup: How banks are pillaging homes — while the government watches David Dayen, Salon. Obama never prosecuted the crooks, so they came back for a second helping. Seven Takeaways for Banks from Warren’s New Memoir WSJ. Pecora didn’t write a memoir. He ran a Commission. Exclusive: White House considers former banking lawyer for Fed board – sources Reuters Housing Rebound in U.S. Losing Steam as Prices Rise: Economy Bloomberg Obama starts Asia tour with a message to China McClatchy Q&A: Japan’s Yomiuri Shimbun interviews President Obama WaPo. Obama: &#...more

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  • naked capitalism

    Earth Day: Can We Grow Enough Food, Without Oil, to Avoid a Human Dieback?

    By Lambert Strether of Corrente. The future is already here — it’s just not very evenly distributed. — William Gibson This is a two days-late Earth Day post. I’ve been thinking about this comment from lorrie: The real problem is that there are too many people on the planet right now. All these people need to eat and sleep somewhere and all want to use energy and aspire to have a great lifestyle. So to me the solution would be that people should decide to have fewer children. This is the only long term solution that is going to work. To which commenter banger responds: Since I have lived in places where there is very low energy consumption I don’t agree that there are too many people–there are too many Americans. It is possible to live in a sustai...more

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  • naked capitalism

    Matt Stoller: No, America Is Not an Oligarchy

    By Matt Stoller, who writes for Salon and has contributed to Politico, Alternet, Salon, The Nation and Reuters. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Originally published at Observations on Credit and Surveillance The rich have been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn’t allow unions. – Martin Sheen in the movie Wall Street A lot of people are misreading this Princeton study on the political influence of the wealthy and business groups versus ordinary citizens. The study does not say that the US is an oligarchy, wherein the wealthy control politics with an iron fist. If it were, then things like Social Se...more

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  • The Housing Bubble Blog

    Bits Bucket for April 24, 2014

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

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  • Macro Man

    A Trip to the Cinema

    Macro Man recently finished reading Flash Boys, which was certainly entertaining if somewhat incomplete.  While some of the other explorations of high-frequency trading are evidently more thorough, Michael Lewis is close to unparalleled in his ability to craft a storyline from specialist arcana that can appeal to the layman.  Who could have imagined, for example, that Moneyball (a book about quantitative analysis in baseball) would turn into a film featuring Brad Pitt?As his mind wandered the other day, Macro Man found himself wondering who might play the relevant characters in a film version of Flash Boys.  Lost in thought, it occurred to him that in some ways, the film had already been made.   For what better description of Lewis's book could ...more

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  • DRS » Blog

    Pivoting

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  • DRS » Blog

    Pivoting

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  • The Aleph Blog

    Miscellaneous Notes

    When I was writing at RealMoney.com, I would often do little posts in the Columnists Conversation, and title them “Notes and Comments,” or something like that.  I don’t normally do that here, but I would like to tie up some loose ends.1) I received the following e-mail six weeks ago, and I feel it is worthy to be shared with readers:Hi David,I follow the Aleph blog from time to time. I run value and special situations oriented hedge fund whose goal is to purchase businesses that sell for at least 50 cents on the dollar. It seems that we are like minded in investment terms. I have an extensive investment checklist which that I believe can add value to investors. It took me a few years and I derived it by reading stacks of annual reports from Buffett, ...more

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  • The Skeptical Speculator

    US stocks fall with new home sales, eurozone composite PMI at 3-year high

    After six days of gains, US stocks ended their rally on Wednesday, with the S&P 500 falling 0.2 percent. The decline in stocks came as a report on Wednesday showed that new US home sales fell 14.5 percent in March. It was the second consecutive monthly decline and the biggest since July. The pace of US manufacturing expansion was little changed in April though. A preliminary reading of Markit's US manufacturing PMI for April came out at 55.4, slightly down from 55.5 in March. The euro area economy showed improvement in April though. A preliminary reading of Markit's composite PMI showed a jump to 54.0 in April, its highest reading since May 2011, from 53.1 in March. The services index rose to 53.1 in April from 52.2 in March while the manufacturing index rose to 53.3 fr...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Einhorn Letter: Sunshine and the New Tech Bubble

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Shattering the Myth of the Emerging Manager

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  • Ticker Sense

    25% Discount on Reminiscences Newsletter

    We are currently offering a one year subscription to our Reminiscences newsletter for $168.75 or 25% off!* Get access to our monthly commentary along with our three recommended portfolios: Conservative, Growth and Trading. For more information or to subscribe to... ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    New Home Sales: March 2014

    Today, the U.S. Census Department released its monthly New Residential Home Sales Report for March showing a notable decline with sales falling a whopping 14.5% from February dropping 13.3% below the level seen in March 2013 and remaining at an historically low level of 384K SAAR units. The monthly supply increased to 6.0 months (considered fairly balanced between buyers and sellers) while the median selling price jumped 12.62% and the average selling price increased 11.33% from the year ago level. The following chart show the extent of sales decline to date (click for full-larger version). ...more

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  • Abnormal Returns

    Wednesday links: a deliberate bet

    You can keep up with all of our posts by signing up for our daily e-mail. Thousands of other readers already have. Don’t miss out! Quote of the day Cam Hui, “The moral of this story is, if you were to engage in factor investing, whether indirectly through “smart beta” concepts or directly in an active or semi-active fashion, you are making a deliberate bet against the market portfolio.”  (Humble Student of the Markets) Chart of the day After a rough period coffee is having a strong 2014.  (ETF) Markets Where’d all the cheap stocks go?  (Millenial Invest) David Einhorn has a basket of “cool kid stocks” he is shorting.  (The Reformed Broker, SL Advisors) Why Americans are biased towards real estate: they can’t calcula...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – April 23 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) increased 3 basis points to 4.37% since last week while the purchase application volume declined 3% and the refinance application volume d...more

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  • Dr. Housing Bubble Blog

    The façade of a recovering housing market: New home sales collapse and supply of inventory finally reaches six months.

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  • Ticker Sense

    April 21st Blogger Sentiment Poll

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

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  • DRS » Blog

    CFTC MTF no action- a long and complex answer to a question no-one is asking anymore

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  • DRS » Blog

    CFTC MTF no action- a long and complex answer to a question no-one is asking anymore

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  • DRS » Blog

    Collateral Managers Weep, Lawyers Rejoice: EU Consults on non-cleared OTC derivatives

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  • DRS » Blog

    Collateral Managers Weep, Lawyers Rejoice: EU Consults on non-cleared OTC derivatives

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  • Macro Man

    Testing Tuesdays

    Bob Geldof famously doesn't like Mondays, a sentiment which is likely shared amongst wide swathes of the population.    He presumably has no beef with Tuesdays, and if the populace at large is fairly neutral on the second day of the workweek, the same can probably not be said for equity punters.  For as Citi's Brent Donnelly pointed out yesterday, the stock market's performance on Tuesday has been nothing short of spectacular.Perhaps it's mere coincidence or a statistical quirk.   Maybe it's the sign of dark forces at work.  Frankly, Macro Man doesn't know.  All he can say is that thus far in 2014, the SPX has rallied an impressive 8.75% on Tuesdays....and dropped a cumulative 6% on the other four days of the week.Now, when Macro Man w...more

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  • The Housing Bubble Blog

    A Feeding Frenzy, Then Everything Sort Of Stopped

    The Orange County Register reports from California. “OK, now I’m a bit worried. The local homebuying slump extended itself into the start of the traditional house-shopping season – and Southern Californians certainly can’t blame ‘bad winter weather’ for the sluggishness. DataQuick reported that it was the slowest-selling March in six years, but there’s also more to be nervous about: While March’s sales count is up 26 percent from February, that’s limited oomph for the unofficial opening of the prime house-hunting period. February-to-March sales have averaged a 36 percent increase since 1988.” “March sales were off 14 percent in a year, the sixth consecutive year-over-year drop. The five previous six-month dips were tied to t...more

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  • The Capital Spectator

    Manufacturing Employment Signals Economic Growth

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  • The Housing Bubble Blog

    Bits Bucket for April 23, 2014

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

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  • The Aleph Blog

    An Idea for When the Market is High

    Last night I was at the Towson University International Markets Summit.  I’m grateful to the students for inviting me, as it is an honor.  During the presentation, I mentioned the book “Accounting for Value” by Stephen Penman.  I reviewed the book two years ago.  A great book, and one that should lead readers to modify their views on value investing.But one aspect of the book was easy to implement, he cited his paper that you can read here, Returns to Buying Earnings and Book Value: Accounting for Growth and Risk.  Buy the stocks that are the cheapest as measured by the highest quintiles of book value to price, and trailing twelve month earnings per share to price.I ran this analysis for all US-traded stocks with over $100 million of market capi...more

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  • Steve Keen's Debtwatch

    More Effective Remedies for Inequality than Piketty’s

    I will launch Sack the Economists, by Geoff Davies, on Sunday 4 May (3:30pm for a 4pm start) at Gleebooks, 49 Glebe Point Road Glebe NSW 2037 Sydney.  The event is free, but an RSVP is required here or via phone at 02 9660 2333.  Following is an edited extract pertaining to Thomas Piketty’s recent best-seller.  I hope to see Sydney-side readers of this blog at the launch.] This is a guest post from Geoff Davies  I have read only reviews of Thomas Piketty’s Capital in the Twenty-First Century, but clearly it is valuable for documenting the nature and history of inequality over the past century or three, and for highlighting the excessive political power that flows from super-wealth.  Yet he frames it in terms of capital and capitalism and, for all the...more

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  • The Skeptical Speculator

    US stocks rise amid signs of tech bubble

    US stocks rose for a sixth day on Tuesday. The S&P 500 rose 0.4 percent while the Nasdaq Composite rose 1.0 percent. Despite the recent recovery in the Nasdaq, one prominent hedge fund is betting against technology stocks. From Bloomberg: Greenlight Capital Inc., the $10.3 billion hedge-fund firm run by David Einhorn, said it was betting against a group of technology stocks as evidence grows of a bubble. “There is a clear consensus that we are witnessing our second tech bubble in 15 years,” the New York-based firm said in a quarterly letter to clients today. Greenlight said that companies it’s betting against may fall by at least 90 percent “if and when the market reapplies traditional valuations,” according to the letter, a copy of which was obtained by Bloo...more

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  • My voice and noise on subprime bank regulations

    If I knew absolutely nothing about bank regulations, I might also think like Thomas Piketty does in “Capital”

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    ‘Prediction is Tricky, Especially about the Future’

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  • My voice and noise on subprime bank regulations

    Could Thomas Piketty´s tax on 1% wealth, be a Trojan horse for Chrystia Freeland’s 0.01% Plutocrats to capture more wealth?

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  • Paper Economy - A US Real Estate Bubble Blog

    Existing Home Sales Report: March 2014

    Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for March showing weak sales with total home sales falling 0.2% since February dropping 7.5% below the level seen in March 2013. Single family home sales also remained weak with sales staying flat from February and falling a notable 7.3% below the level seen in March 2013 while the median selling price increased 7.4% above the level seen a year earlier. Inventory of single family homes increased from February to 1.74 million units and climbed 5.5% above the level seen in March 2013 which, along with the sales pace, resulted in a monthly supply of 6.1 months. The following charts (click for full-screen dynamic version) shows national existing single family home sales, median ...more

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  • The Baseline Scenario

    Where Do You Want to Be Born?

    A

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  • Abnormal Returns

    Tuesday links: bullish on hedge funds

    Quote of the day Marlin Nadoo, “Across the spectrum, investors continue to be bullish on hedge funds..Even on the back of what was a pretty difficult March, we are definitely seeing people look to increase their hedge-fund allocations.”  (WSJ) Chart of the day Energy stocks have broken out on a relative basis.  (The Reformed Broker) Yields Long Treasuries are having a great year.  (Bonddad Blog, FT) The long end of the yield curve is flattening.  (Crossing Wall Street) Markets A look at some breadth divergences.  (The Short Side of Long) Revisiting the disparity between large and small cap valuations.  (Dr. Ed’s Blog) Don’t trade biotechs if you don’t like gaps.  (Focus on Funds) The real estate dream is still alive.  (Washington P...more

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  • Economix

    Economix Meets the Gales of Change

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  • The Capital Spectator

    Is US Inflation Headed Higher?

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  • Economix

    Economix Meets the Gales of Change

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  • Macro Man

    A Market Vignette

    In the absence of anything interesting to say about a drearily dull start to the week, Macro Man thought he would share a small vignette of what the market was like two decades ago.Macro Man's very first job upon graduation from university was in Chicago, working for a very well-known option market-making firm.  Having acquired an interest in foreign exchange while studying abroad during the '92 ERM crisis, he was assigned to work at the currency options pit of the Chicago Mercantile Exchange as a trading assistant.Before arriving in Chicago in July of 1993, he wasn't really sure what to expect.  Having attended a liberal arts university, he had taken no finance courses; as such, the only options knowledge he possessed was what he'd crammed for the interview t...more

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  • The Aleph Blog

    Why Indexes are Capitalization-Weighted

    Are index funds that are capitalization-weighted the best funds to invest in?  No.  So why do we talk about index funds so much?  Because they represent the average dollar in the market.  In principle, everyone could invest in a comprehensive index fund, and there would be no effects on the market.But indexes can be enhanced.  Tilt your investments to:Avoid the biggest firms, their growth opportunities are limited.Buy cheap stocks, they out-earn growthier stocks, and have fewer disappointmentsBuy quality stocks, again, fewer disappointments.Buy stocks that have been running, they tend to do well in the future.Buy stocks with conservative accounting, they tend to outperform.But the moment you do that, you are an active manager, because not everyone can do what you a...more

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  • The Skeptical Speculator

    US stocks rise amid positive economic data, US household deleveraging completed

    US stocks rose for the fifth consecutive day on Monday. The S&P 500 rose 0.4 percent to complete a five-day advance, its longest rising streak since October, of 3.1 percent. US stocks rose amid positive economic data on Monday. The Chicago Federal Reserve's national activity index fell to +0.20 in March from +0.53 in February. However, the three-month moving average rose to 0.00 from -0.14. The outlook for the US economy is also positive. The Conference Board reported on Monday that its US index of leading indicators rose 0.8 percent in March, the most since November, after rising 0.5 percent in February. Monday also brought possibly good news for the US economy for the longer term. A study by Bruno Albuquerque, Ursel Baumann and Georgi Krustev, economists at the Euro...more

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  • Felix Salmon

    The most expensive lottery ticket in the world

    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 case that all o...more

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  • Steve Keen's Debtwatch

    A China Bubble?

    There is no end of commentary about China’s real estate bubble, with an even split between those who believe it may pop at any moment, and others who argue it never will. The alternative ploy — that it doesn’t exist — doesn’t get same airing that it did in the US before the subprime crash. Instead, the “it’s a bubble, but it won’t burst” case is that the bubble is too important to China’s continued growth to be allowed to burst, and — unlike the US — China has the wherewithal to keep it going, at least for a while. (See There will be no Minsky moment for China, March 25; China Can’t Afford to Let Its Housing Bubble Pop, January 30;Templeton Braving China’s Housing Bubble, February 28; Chinese Property Sector Will Not Implode Like Ame...more

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  • Dr. Housing Bubble Blog

    A mortuary of 7,000,000 foreclosures and counting: Nation still faces 9.1 million properties that are seriously underwater.

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  • A Fistful Of Euros

    Firmly Anchored Expectations, No Postponement of Purchases?

    This article from former European Central Bank board member Jürgen Stark (Doomsayers risk a self-fulfilling prophecy) has been occasioning a lot of commentary over the last week or so. According to Stark, the current deflation debate “lacks three important points: an in-depth analysis of the forces driving inflation down; a clear distinction between “benign disinflation” and “bad deflation”, with a spiral of decreasing prices, wages and output triggered by negative expectations; and a better understanding of the European Central Bank’s approach”. Perhaps the most cited extract is the following: “It is likely we are living in an extended period of price stability. This is good news. It boosts real disposable income and will eventually support...more

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  • A Dash of Insight

    Weighing the Week Ahead: Will Springtime Bring Some Optimism?

    Some weeks feature a contrast between past and future -- a possible inflection point. Here are the current elements: Important economic data with a forward look; Earnings news from major companies reporting on Q114; Corporate conference calls explaining the outlook for future earnings; and finally Economic implications for improved economic growth and business conditions worldwide. It is a big week for news and data. Prior Theme Recap Last week I expected the theme to emphasize volatility. The market was at interesting technical levels and there was plenty of news to push it one way or the other. In a sense I was right about the theme, since the talking heads made the moderate crossings of "unchanged" seem like big news. The volatility cocktail was more like a Shi...more

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  • My voice and noise on subprime bank regulations

    There is, might really be unwittingly, a high treason going on, against the western world, against the Judeo Christian civilization.

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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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  • Dr. Housing Bubble Blog

    Mirror, mirror on the wall, tell me what two counties are the bubbliest of them all. Orange County and Los Angeles County. Southland homes sales reach 6 year low while median price hits 6 year high.

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  • The Baseline Scenario

    Rumsfeldian Journalism

    A

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  • A Fistful Of Euros

    It’s not like this was a surprise

    Or, why reading David Remnick is nearly always a good idea: I spoke with Georgy Kasianov, the head of the Academy of Science’s department of contemporary Ukrainian history and politics, in Kiev. “It’s a war,” he said. “The Russian troops are quite openly out on the streets [in Crimea], capturing public buildings and military outposts. And it’s likely all a part of a larger plan for other places: Odessa, Nikolayev, Kherson. And they’ll use the same technique. Some Russian-speaking citizens will appear, put up a Russian flag, and make appeals that they want help and referendums, and so on.” This is already happening in Donetsk and Kharkov. “They are doing this like it is a commonplace,” Kasianov went on. “I can’t speak for four million people, but ...more

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  • VIX and More

    The Correction As Seen in the ETP Landscape

    Since stocks bottomed in March 2009, I have periodically been publishing an SPX pullback table and occasionally a plot of all those pullbacks and their duration. The recent selloff in stocks, however, has been anything but an SPX pullback. I toyed with the idea of presenting comparable data for the NASDAQ Composite or NASDAQ-100 Index (NDX), but here again, the selling has been disproportionate in some areas of the NASDAQ universe, even though it has been hit harder than the SPX. This time around I have opted instead for a chart that shows the peak-to-trough drawdown across the equity ETP universe, focusing on sector groups that I believe are among the most important to watch. [source(s): Yahoo, VIX and More] The data above cover only 2014 and indicate the maximum...more

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  • Felix Salmon

    The problems of HFT, Joe Stiglitz edition

    Never mind Michael Lewis. The most interesting and provocative thing to be written of late about financial innovation in general, and high-frequency trading in particular, comes from Joe Stiglitz. The Nobel prize-winning economist delivered a wonderful and fascinating speech at the Atlanta Fed’s 2014 Financial Markets Conference today; here’s a shorter version of what Stiglitz is saying. Markets can be — and usually are — too active, and too volatile. This is an idea which goes back to Keynes, if not earlier. Stiglitz says that in the specific area of international capital flows, “there is now a broad consensus that unfettered markets are welfare decreasing” — and certainly you won’t get much argument on that front from, say, Iceland, or Malaysia, or eve...more

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  • Emerging markets

    Could the rise of ‘original sin’ condemn African governments once more?

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  • Piggington's Econo-Almanac

    March 2014 Housing Data Rodeo

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  • Felix Salmon

    Private equity math, Nuveen edition

    The WSJ has the details of today’s big asset-management news: TIAA-CREF is buying Nuveen Investments for $6.25 billion. The sale marks the end of an ill-fated acquisition by private equity shop Madison Dearborn in 2007, just before everything fell apart. Madison Dearborn paid a total of $5.75 billion for Nuveen — a premium of 20% to its market value. As the WSJ says, the buyers used $2.7 billion of their own money to pay for Nuveen, and then borrowed the other $3.05 billion. But then things got tough: Within a year, Nuveen’s borrowing costs had risen as the financial crisis set in. The company eventually refinanced most of its buyout debt, which now stands at $4.5 billion and will be absorbed by TIAA-CREF. With the TIAA-CREF deal, Madison Dearborn will have at...more

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  • Ticker Sense

    April 14th Blogger Sentiment Poll

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

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  • A Fistful Of Euros

    Overtaken by events

    The draft blog post said to watch out for funny business in Melitopol and Mariupol, Ukraine. Those are the largest settlements along the coast between Russia and the Crimean peninsula, and sit astride the road that runs from Rostov-on-the-Don and the Crimea. Mariupol is the second-largest city in the Donetsk region, with a population of nearly half a million. Melitopol is also a crossroads: east to Russia, south to the Crimea, north to Zaporizhia and west to Kherson. Radio Free Europe/Radio Liberty’s daily summary noted: By early evening there were reports of skirmishes between pro-Russia and pro-Ukraine groups in Kharkiv, a tense standoff in Zaporizhia, and the occupation by pro-Russian activists of local government buildings in Makiyivka and Mariupol. Pro-Russia...more

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  • A Dash of Insight

    Weighing the Week Ahead: A Volatility Cocktail!

    This week brings the makings of an explosive volatility cocktail: Important economic data; Key Q1 earnings reports; Options expiration; A short trading week; and An edgy market environment. This is a very unusual combination, and the various elements will compete for attention. Prior Theme Recap Last week I expected the theme to test the divergence between economic fundamentals and what I called "fluff." The latter term referring to the collection of top-calling, market-rigging, crash charts, and "This is the big one" stories. This was one of my better forecasts. The economic news was excellent. The market was terrible. Everyone had an explanation – all different, all dubious. This is another good illustration of the reason for my weekly post – planning f...more

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  • Jeff Matthews Is Not Making This Up

    The Easy Thing About “The Hard Thing About Hard Things”

     The easy thing about “The Hard Thing About Hard Things,” Andreessen Horowitz co-founder Ben Horowitz’s book about “Building a business when there are no easy answers,” is reading it.  That’s because it’s funny, to-the-point, and way more well-informed by real-world experience than most books that give advice ever are.    Like the secret to being a successful CEO: “Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves.” And, “Managers must lay off their own people.   They cannot pass the task to HR or to a more sadistic peer.” And, “The job of a big company executive is very different from the job...more

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  • footnoted*

    Hertz CFO being paid twice for one job

    We’re always fascinated by the revolving door — and how some executives seem to make money both coming and going. One of our favorite examples was back in 2011 when Synthes CEO Michel Orsinger was hired by Johnson & Johnson. We saw fresh evidence of that earlier this week when Hilton Worldwide filed its proxy. As most people know, Hilton went public in Dec. 2013. By the time the company filed its S-1 on Sept. 12, its CFO, Thomas Kennedy, had already been gone for a month. While his separation agreement was attached to an S-1/A that the company filed on Nov. 8, we doubt that most people picked up on it. Which brings us back to the proxy, which disclosed that Kennedy’s separation agreement tops out at $16.06m. That includes a payment of $1.06m for t...more

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  • A Dash of Insight

    Strategy in the Face of Volatility

    I planned to take tonight off since it is my Birthday and Mrs. OldProf is preparing my favorite dinner. On the other hand, I like to post whenever there is a market development that will get a lot of media buzz and contribute to investors being Scared Witless (TM OldProf). Please check out last year's post on this theme and remember how it played out. Here is the brief message: This is exactly what I said would be the theme of the week: Fluff or Fundamentals. If you have a list of stocks that you like, with appropriate price targets, you are happy to go shopping when the market provides the opportunity. It is a classic example of fundamental value stock analysis. If you have been following us with the Enhanced Yield approach – buying reasonable dividend stocks and...more

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  • Institutional Economics

    ECB to Adopt QE in H2 2014

    I have an op-ed in Business Spectator arguing that the ECB will likely resort to QE in the second half of this year. This will be a vindication of the long-standing criticisms of ECB monetary policy made by the new market monetarists. Inflation outcomes, nominal GDP and the euro exchange rate are all consistent with monetary policy having been too tight rather than too easy. The emerging divergence between ECB/BoJ and Fed monetary policy should set the stage for broad-based USD outperformance....more

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  • Steve Keen's Debtwatch

    A sudden conversion of property bubble doubts

    Back in the Olde Days, before the global financial crisis, when I was one of a handful raising the alarm, some of the most strident opposition to my opinion about what this might mean for housing in Australia came from Christopher Joye (who was then a Director at Rismark). We went head to head on many occasions, with me arguing that our prices were a debt-fuelled bubble, and Joye arguing that rising house prices simply reflected rising household incomes. Fast forward to today, and though house prices have not done what I expected (see I will be wrong on house prices, November 12, 2013), one of the most prominent commentators asserting that there is a dangerous house price bubble in Australia is… Chris Joye (who is now a writer for The Australian Financial Revi...more

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  • footnoted*

    Proxy madness: mystery fees at Google

    We’re deep in the midst of proxy season. Last week, for example there were 440 proxies filed. While we don’t read all of them, we continue to view proxies as important insight into how a company — and its board — thinks. As with most filings, this requires a fair amount of reading between the lines. So when we came across an odd disclosure in the proxy that Google filed shortly after 4 pm on March 28 — that’s the beginning of Friday Night Dump time as footnoted regulars know — we were a bit puzzled. For one, as we tweeted that evening, Google filed its proxy nearly a month earlier than it normally does. We assumed that was related to the long-planned stock split that took place last Thursday, April 3. But within that proxy was a...more

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  • Institutional Economics

    Do Financial Markets Care About the G20?

    An ECB Working Paper looks at the impact of G20 meetings on financial markets: In this paper we run an event study to test whether G20 meetings at ministerial and Leaders level have had an impact on global financial markets. We focus on the period from 2007 to 2013, looking at equity returns, bond yields and measures of market risk such as implied volatility, skewness and kurtosis. Our main finding is that G20 summits have not had a strong, consistent and durable effect on any of the markets that we consider, suggesting that the information and decision content of G20 summits is of limited relevance for market participants. That won’t stop the Australian federal government spending $500 million on a process markets have deemed an irrelevance....more

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  • Jeff Matthews Is Not Making This Up

    Ebay’s Got the Guy Who Helped Pioneer the World Wide Web, the Guy Who Created the Online Auctions Business, the Guy Who Helped Steve Jobs Save Apple, the Guy Who Dreamed Up Quicken, and the Guy Who Turned Around eBay on its Board; Who’s Icahn Enterprises L.P. Got?

     Carl Icahn is—and he likes to be told this—a great investor. Billions of dollars of value—literally, billions—have materialized not just in Carl’s own pocket and those of his fellow investors in Icahn Enterprises L.P., but also in the Charles Schwab and Fidelity Investment accounts of investors across America, thanks to Carl’s prodding, poking and pushing around of companies that show up on his value screen. They can be great companies with enormous cash piles and technology smarts such as Apple, which Wall Street suddenly worries will become a has-been like, say, Motorola; and they can be once-great companies like Motorola itself.  And they can be companies like eBay that are still growing, still generating new users every day, an...more

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  • Emerging markets

    Uruguay: UAG waits for valuation rebound before IPO

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  • Emerging markets

    Funding Asean’s infrastructure demand

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  • VIX and More

    CBOE RMC 2014: A Retrospective

    Earlier this month, I had the pleasure of attending the CBOE Risk Management Conference (RMC) in Bonita Springs, Florida. Now that the conference is over and the CBOE has posted most of the presentations, I thought I would take a little time and offer a retrospective look at some of the content that caught my attention. Before I do that, I am compelled to tip my cap to Russell Rhoads, whose indefatigable and prolific efforts were responsible for capturing many of the details of the conference. Russell’s posts and those of Matt Moran made it possible for anyone to have a virtual front-row seat throughout the proceedings. Their efforts in conjunction with the RMC are archived at the CBOE Options Hub with the CBOERMC tag. From my vantage point, I thought it particularl...more

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  • Jeff Matthews Is Not Making This Up

    The Revolution Will Proceed, With or Without Holman Jenkins Jr.

     Once again, Holman Jenkins Jr. is defending the bad guy, this time in “Tesla Seeks Loophole, Not a Revolution” (see herefor our previous beef with the Wall Street Journal op-ed page writer). The “bad guy” Jenkins sticks up for in this weekend’s op-ed is not an individual, however, but rather the system of entrenched car dealers who have tried to shut out Tesla from selling its cars direct to consumers, with no “franchisee” in between, in various states around the country. What’s wrong with selling cars direct?  According to Jenkins, nothing, really.   He agrees the dealers are only “protecting their anticompetitive interests” by shutting down Tesla-owned outlets. But the way Jenkins sees it, Tesla CEO Elon Mu...more

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  • VIX and More

    The Turnaround in Emerging Markets and VXEEM

    While I have a long way to go before I become the next Manny Mota, yesterday I was delighted to be able to pinch hit for Steve Sears of Barron’s for the twelfth time, when I penned Emerging Market Stocks: Have They Hit Bottom? as a guest columnist for The Striking Price. In the Barron’s article I talk about how rapidly increasing uncertainty and risk in emerging markets during January was largely responsible for the 31.7% VIX spike on January 24, but was nowhere near the levels of June 2013, at least as measured by the CBOE Emerging Markets Volatility Index (VXEEM). I also used the VXEEM:VIX ratio and some other data to support the idea that emerging markets have likely bottomed and are poised for a bounce. I concluded the Barron’s column with a couple of option...more

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  • footnoted*

    Advanced Micro Devices execs say game on!

    Now that the 10-Ks are largely behind us, proxy statements are rolling in at a good and steady clip. Which means only one thing: it’s silly season for perks. To be sure, after 10-plus years of digging through SEC filings and finding all sorts of crazy things — from executive fish camps to highly valuable antique map collections — the bar for silly perks is pretty high. But when a friend of footnoted alerted us to a disclosure in Advanced Micro Devices Inc’s proxy filed yesterday, we just had to check it out for ourselves. There, on page 52 in footnote 13 to the “all other compensation” disclosure in the summary compensation table was this helpful footnote: “This amount represents the direct costs for Sony PlayStation and/or Micr...more

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  • Institutional Economics

    Bob Shiller, Ex-Ante and Ex-Post

    Scott Sumner has a nice comparison of Robert Shiller’s investment advice with that from one of my favourite supply-side economists, Alan Reynolds. Loyal readers of this blog will not be surprised to see that Scott’s post has my name all over it. Scott asks, ‘Can people find me the dates where Shiller recommended people buy stocks?’ Sure. In his 2009 book with George Ackerlof, Shiller wrote: ‘there has been one way, at least in the past, in which almost everyone could become at least moderately rich … Invest it for the long term in the stock market, where the rate of return after adjustment for inflation has been 7% per year’ (p. 117). Unfortunately, Shiller’s ex-post observations on stock market returns in 2009 do not sit well with his ex-ante pred...more

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  • FinanceProfessor.com

    Behavioral finance and investment from Berkely

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  • FinanceProfessor.com

    Fama on the history of Market Efficiency--MUST WATCH!

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  • Piggington's Econo-Almanac

    February 2014 Housing Data Rodeo

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  • Piggington's Econo-Almanac

    Case-Shiller Index: Cheaper Homes Still Rebounding Fastest

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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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  • The Prudent Investor

    Will Austrian Bank Woes Be Again the Catalyst for a European Kondratieff Winter?

    Sad affairs have been heating up in the tiny Alpine republic in the center of the European Union. While Austria experiences record unemployment at record growth rates and tax revenues  have fallen behind optimistic projections, the looming bankruptcy of a mid-sized regional bank, Hypo Group Alpe Adria (HGAA), may propel the country to the disdained position of being the catalyst for a new round of bank failures due to interwoven banks risks on both the domestic and the international level.Austrian politicians are up in arms since a third-party expert opinion that recommends to wind down the bank at a cost of €18 billion has been leaked to the media, but keep on marching on the most fatal route that will not dissolve the problems: They keep flogging the dead horse...more

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  • Richard's Real Estate and Urban Economics Blog

    Hannah Harris Green in The Guardian on Race, Crime and Television

    She writes:The First 48 is an A&E true crime reality show that documents real police investigations for the first 48 hours after a homicide report, including what happens inside interrogation rooms. If this sounds dangerous and ethically questionable, that's because it is. Police accidentally killed a child as A&E's cameras rolled, and a legally innocent man came to beknown as a murderer after of his appearance on the show. Catastrophes like these have led to lawsuits, and now many cities refuse to work with The First 48.......This portrayal is not representative of American crime statistics. Although homicide arrests are disproportionately high among African Americans, about the same total number of white people are arrested i...more

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  • FinanceProfessor.com

    Blackstone Unit Wins in No-Lose Codere Trade: Corporate Finance - Bloomberg

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  • Richard's Real Estate and Urban Economics Blog

    UW-La Crosse Chancellor Joe Gow has issues with sifting and winnowing.

    A geography professor at the University of Wisconsin-La Crosse, Rachel Slocum, made the mildly controversial point in an email to her students that Republicans in the House of Representatives had brought about the partial closure of the US government, and had therefore brought about the closure of the US Census web site.  This closure prevented her students from completing their assignments.  She never used abusive or offensive language.Her point raised howls among the conservative blogasphere and media; when confronted with this, her boss, UW-La Crosse Chancellor Joe Gow, publicly reprimanded her for expressing a factually based opinion to her class.  In my view, it was his job to back her--not to agree with her opinion, but rather to defend he...more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

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  • Richard's Real Estate and Urban Economics Blog

    The Windy City and The Foggy City

    Hannah Green writes:ERNEST HEMINGWAY famously wrote of Paris, “If you are lucky enough to have lived in Paris as a young man, then wherever you go for the rest of your life, it stays with you, for Paris is a moveable feast." For half a century, Hemingway’s nostalgic vision of the city of lights has made undiscovered literary geniuses wish that they could be unemployed in Paris in the 1920s instead of unemployed wherever they live, now. Last year, Teju Cole’s debut novel, Open City, offered a different kind of literary city. The main character, Julius, who resembles Cole, wanders the streets of New York, conversing with the city’s residents and falling into reveries about music, history, and literature. Most of the people he speaks with are immigrants, ...more

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  • The Oil Drum - Discussions about Energy and Our Future

    The Last Post

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  • The Oil Drum - Discussions about Energy and Our Future

    The House That Randy Built

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  • Accrued Interest

    IS HALLIBURTON A BUY?

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  • Accrued Interest

    Is it Time to Sell Blackberry?

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  • Accrued Interest

    Three Oil Stocks to Consider

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

    To me, the central issue raised by this week's Cyprus debacle is how it has affected confidence across the eurozone.  To what degree has the possibility of insured depositors at a eurozone bank losing a portion of their deposits affected the mindset of depositors?  To what degree has ECB acquiescence to this possibility undermined the notion that deposit insurance in the eurozone means the same thing in all countries?  And to what degree has the ECB's direct threat to end support for Cyprus's banking system in the event that the government of Cyprus can not arrange sufficient funds to meet its conditions made a farce of its earlier promise to "do whatever it takes to preserve the euro"?These, to me, are the interesting questions prompted by this week's ev...more

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  • London Banker

    Chop Off Their Hands . . .

    President Truman famously called for a one handed economist. The Carolingian kings of France would have accommodated him. They realised that a kingdom required a common currency under the control of the king and well regulated markets to sustain the confidence of the people. At first mints were established widely, spread across the kingdom. Local barons began to profit from debasing the coinage, undermining confidence in the monetary system. So Charles the Bald established mints under his direct control and regulated the issue of coins: C.12. Following the custom of our predecessors, just as it is found in their capitularies, we decree that in no other place in all our kingdom shall money be made except in our palace, and in St. Josse and Rouen, which right in th...more

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  • The Street Light

    When the Fed Chair is an Academic

    The big economic news of the week was, in fact, big economic news: the Fed's announcement of significant changes from past practice in the the quantity of its next round of large scale asset purchases ("unlimited"), and in the timing of any future reversal of this expansionary policy ("a considerable time after the economic recovery strengthens").I view this as a pretty fundamental shift in how the Fed hopes to affect the economy.  Rather than trying to push economic activity one way or the other through its management of interest rates (which can alter economic activity through its portfolio-rebalancing and wealth effects, for example), the Fed is now quite explicitly trying to affect economic activity by altering interest rate and inflation expectations.  As...more

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  • London Banker

    For Want of a Nail, the Ship Was Lost

    Imagine a great ship dominating the skyline on a distant sea. Imagine the complexity of that ship: keel, ribs, planks, masts, spars, and an infinite number of less readily named components. Each component was hand-crafted by a craftsman skilled in his trade, to precise requirements, and secured in position to take the stress and strain of a life at sea.Now imagine a crew. They didn't build the ship. The crew are told that the one and only purpose of the ship is to realise a profit for every man jack aboard. Any hand not contributing a profit will be turned ashore. Down below in the ship are nails. Thousands and thousands of nails. Nails are useful. Nails are much sought after in every port the ship enters. Nails can be readily sold and never traced. The crew h...more

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  • London Banker

    Lies, Damn Lies and LIBOR

    I've been hesitant to write about the LIBOR scandal because what I want to say goes so much further. We now know that Barclays and other major global banks have been manipulating the calculation of LIBOR through the quotation data they provided to the British Bankers Association. What I suspect is that this is not a flaw but a feature of modern financial markets. And if it was happening in LIBOR for between 5 and 15 years, then the business model has been profitably replicated to many other quotation-based reference prices.Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole. If price discovery is compr...more

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  • The Street Light

    Government Job Destruction

    Another jobs report in the US, another month where part of the private sector's job creation was undone by continued job destruction by the government sector. The 15,000 additional jobs lost in April brings total job losses in the government sector since January 2010 to over 500,000. While the US has not quite been experiencing European-style austerity over the past two years, that's still a pretty tough headwind to fight as it emerges from recession. ...more

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Dan Steinbock

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). In addition to his advisory activities (www.differencegroup.net), he is affiliated with major US universities as well as international think-tanks, such as India China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore).

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