EconoMonitor

Economics Blog Aggregator

    Finance & Markets

  • Abnormal Returns

    Sunday links: low real returns

    MarketsMom and Pop have by all accounts done a better job post-crisis. (bloombergview.com)What (China-light) sectors are poised to outperform. (dashofinsight.com)Corrections are no fun but for this Portland man it meant a reprieve. (dealbreaker.com)StrategyDo you really need the stress of managing a portfolio of individual stocks? (washingtonpost.com)Why some investors should be wary of the idea of 'buying the dips.' (blogs.wsj.com)Adjust your portfolio when you can, not when you have to. (marketwatch.com)CompaniesWe are finally going to see what Apple ($AAPL) has in mind for television. (techcrunch.com)Symbols: $AAPL Berkshire Hathaway ($BRKB) is buying more Phillips 66 ($PSX). (nytimes.com)Symbols: $BRKB $PSX The energy sector is ripe with overleveraged companies. (a...more

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  • Abnormal Returns

    Top clicks this week on Abnormal Returns

    Top clicks this week on the siteA trick for dealing with gappy markets. (thereformedbroker.com)When to deploy capital. (alephblog.com)Waiting to see a bearish magazine cover? Click here. (ritholtz.com)In case you needed some signs of an oversold market. (disciplinedinvesting.blogspot.com)How the stock market performs before and after big drops and rallies. (crossingwallstreet.com)Yesterday was no Black Monday. (streetwiseprofessor.com)How long does it take the stock market to bottom after a $VIX spike? (shortsideoflong.com)The three legs of the August sell-off: oil, credit and momentum. (csen.tumblr.com)How to build a market strategy you can follow. (adamhgrimes.com)A dozen things learned from Charlie Munger about mental models. (25iq.com)What else you may have mis...more

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  • The Big Picture

    10 Sunday Reads

    Good Sunday morn. Pour yourself some Joe, and enjoy our morning reads: • 5 Days That Taught Investors All They Need to Know (WSJ) • A Tale of Two Liquidities (Bloomberg View) • U.S. In-Foreclosure Sales Drops to 15 Year Low in July (World Property Journal) • Even for Companies, the U.S. Is Split Between Haves and Have-Nots (Harvard Business Review) • The Secrets of Germany’s Success: What Europe’s Manufacturing Powerhouse Can Teach America (Foreign Affairs) see also Features of German Labor and Employment Law (WilmerHale) • Why Gogo’s Infuriatingly Expensive, Slow Internet Still Owns the Skies (Bloomberg) • Hacker Killed by Drone Was Islamic State’s ‘Secret Weapon’ (WSJ) • The Real Media Machine Behind Trump: Conservativ...more

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  • The Big Picture

    How to Become a Bank

    Source: Bloomberg

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  • naked capitalism

    Links 8/30/15

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  • The Housing Bubble Blog

    Bits Bucket for August 30, 2015

    Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here: http:tinyurl.com/http-hbb-com

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  • The Aleph Blog

    We Still Have a Buck in the Till; We’re Solvent!

    Photo Credit: Luz BratcherImagine that you are in the position of a high cost crude oil producer that has a lot of debt to service.  The price that you can sell your oil for is high enough that you make some cash over your variable cost.  The price is low enough that you are not recouping the cost of what you paid to buy the right to develop the oil, the development cost, and cost of equity capital employed.In this awkward situation you continue to produce oil, because it may keep you from defaulting on your debts, even though you are not earning what is needed to justify the GAAP book value of your firm.  You’re destroying value by producing, but because of the debt, you don’t have the option of waiting because not surviving loses more money than pumpi...more

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  • naked capitalism

    CalPERS’ Private Equity, Exposed: Executive Summary

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  • naked capitalism

    Perry Mehrling: Defending the RMB

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  • A Fistful Of Euros

    It’s not just the currency

    Paul Krugman writing in June 2012 on the UK-Spain interest differential, attributing it to the constraints of currency union - Then there’s the lender of last resort issue, which turns out to be broader than even those who knew their Bagehot realized. Credit for focusing on this issue goes to Paul DeGrauwe, who pointed out that national central banks are potentially crucial lenders of last resort to governments as well as private financial institutions. The British government basically can’t face a “rollover” crisis in which bond buyers refuse to purchase its debt, because the Bank of England can always step in as financier of last resort. The government of Spain, however, can face such a crisis – and there is always the risk that fears of such a crisis, leadi...more

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  • The Big Picture

    101 Best Wineries in America

    # 101 Trione Vineyards and Winery, Geyserville, Calif. # 100 Dolin Malibu Estate Vineyard, Malibu, Calif. # 99 Hope Family Wines, Paso Robles, Calif. # 98 Ste. Chapelle Winery, Caldwell, Idaho # 97 Broc Cellars, Berkeley, Calif. # 96 Cornerstone Cellars, Yountville, Calif. # 95 Gruet Winery, Albuquerque, New Mexico # 94 MacPhaill Family Wines, Healdsburg, Calif. # 93 Shinn Estate Vineyard and Farmhouse, Mattituck, N.Y. # 92 Bokisch Vineyards, Lodi, Calif. # 91 Allis Ranch Winery, Sedalia, Colorado # 90 Seven Hills Winery, Walla Walla, Wash. # 89 Frick Winery, Geyserville, Calif. # 88 Hermann J. Wiemer Winery, Dundee, N.Y. # 87 Neyers Vineyards, St. Helena, Calif. # 86 The Ojai Vineyard , Oak View, Calif. # 85 Va La Vineyards, Avondale, Pennsylvania # 84 Stony Hill Viney...more

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  • Calculated Risk

    August 2015: Unofficial Problem Bank list declines to 282 Institutions

    This is an unofficial list of Problem Banks compiled only from public sources.Here is the unofficial problem bank list for August 2015. Changes and comments from surferdude808: Update on the Unofficial Problem Bank List for August 2015. During the month, the list fell from 290 institutions to 282 after nine removals and one addition. Assets dropped by $1.2 billion to an aggregate $82.7 billion. The asset total was updated to reflect second quarter figures, which resulted in a small decline of $95 million. A year ago, the list held 439 institutions with assets of $139.97 billion. This week, we were anticipating for the FDIC to release second quarter industry results and an update on the Official Problem Bank List, but that will have to wait until next month's update...more

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  • The Housing Bubble Blog

    A Problem With The Great Monetary Experiment

    A weekend topic on recent financial markets and the housing bubble. The Los Angeles Times. “Seven years ago when the housing bubble burst, it nearly took down Wall Street and the entire U.S. economy. This week, the concern was the reverse: That the prospect of an extended dive in the stock market, or even continued volatility, might spook buyers and sellers in Southern California’s housing market. Christian Lander put an offer on a Glendale house last week, before the stock market started falling. He’s proceeding as planned, because he’s investing for the long term and doesn’t want to react to fluctuations in the market. But Lander worries that other buyers may take a different view — because he’s a seller too, looking to unload his...more

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  • Calculated Risk

    Schedule for Week of August 30, 2015

    The key report this week is the August employment report on Friday.Other key indicators include the August ISM manufacturing index and August vehicle sales, both on Tuesday, and the July Trade Deficit on Thursday.----- Monday, August 31st -----9:45 AM: Chicago Purchasing Managers Index for August. The consensus is for a reading of 54.9, up from 54.7 in July.10:30 AM: Dallas Fed Manufacturing Survey for August.----- Tuesday, September 1st -----10:00 AM: ISM Manufacturing Index for August. The consensus is for the ISM to be at 52.8, up from 52.7 in July.Here is a long term graph of the ISM manufacturing index. The ISM manufacturing index indicated expansion at 52.7% in July. The employment index was at 52.7%, and the new orders index was at 56.5%.10:00 AM: Construction ...more

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  • My voice and noise on subprime bank regulations

    Why does IMF never mention that credit-risk-weighted capital requirements for banks, is a potent inequality driver?

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  • The Capital Spectator

    Book Bits | 29 August 2015

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  • The Housing Bubble Blog

    Bits Bucket for August 29, 2015

    Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here: http:tinyurl.com/http-hbb-com

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  • The Aleph Blog

    The Importance of Your Time Horizon

    Photo Credit: Dr. Wendy Longo || This horizon is distant…I ran across two interesting articles today:Volatility Doesn’t Equal Loss—Unless You Sell from Oppenheimer Funds, andBuying the Dips Doesn’t Work for Everyone by the estimable Jason Zweig.Both articles are exercises in understanding the time horizon over which you invest.  If you are older, you may not have the time to recover from market shortfalls, so advice to buy dips may sound hollow when you are nearer to drawing on your assets.Thus the idea that volatility, presumably negative, doesn’t hurt unless you sell.  Some people don’t have much choice in the matter.  They have retired, and they have a lump sum of money that they are managing for long-term income.  No more money is g...more

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  • Calculated Risk

    Fed's Vice Chair Fischer: “When the case is overwhelming, if you wait that long, then you’ve waited too long.”

    Note: Tomorrow, Saturday, at 12:25 PM ET, Fed Vice Chairman Stanley Fischer will speak at the Jackson Hole Symposium on "U.S. Inflation Developments"A couple of quotes from earlier today ...From Binyamin Appelbaum at the NY Times: Fed Official Fischer Leaves Door Open for September Rate IncreaseMr. Fischer said the Fed was preparing to raise interest rates soon because of the “impressive” growth of the domestic economy. He suggested that the recent volatility of global financial markets could cause the Fed to hesitate, but only if it persisted.“We haven’t made a decision yet, and I don’t think we should,” Mr. Fischer said in an interview with the cable network CNBC. “We’ve got time to wait and see,” because the Fed’s policy-making committee does not ...more

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  • Abnormal Returns

    Saturday links: increasingly meaningless work

    EngineeringThe shift away from oil and coal will take time and energy. (wsj.com)How to build industrial robots that don't kill humans. (bloomberg.com)Flightradar24 hopes to be able to track commercial flights all over the world. (wsj.com)ClimateThe American West is burning due in part to a lack of firefighters. (bloomberg.com)Why didn't New Orlean's footprint shrink post-Katrina? (fivethirtyeight.com)AutosHow electric drives change how you think about cars. (ben-evans.com)The connected car is here but is it that much of an upgrade? (wsj.com)HealthIs the FDA too conservative or too aggressive? (marginalrevolution.com)You do not need to drink 8 glasses of water a day. (nytimes.com)How to treat lower back pain. (vox.com)Why eating late at night is so bad for you. (washingt...more

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  • Dealbreaker

    Write-Offs: 8.28.15

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  • Dealbreaker

    Nassim Taleb’s Black Swans Earned Their Keep This Week

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  • Dealbreaker

    Portland Man’s Beard Is Victim Of Stock Market Slide

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  • Real Time Economics

    After Two Weeks of Market Turmoil, What’s Changed? Not Much

    Economic indicators that typically pick up the first signs of trouble, such as first-time claims for unemployment insurance, are steady or improving.  CHARLIE RIEDEL/ASSOCIATED PRESS A wild, two-week ride in the markets has left some investors poorer and nerves in tatters. Other than that, what have we learned? First: The U.S. economy is fine, emerging markets are not, and the rest of the world is somewhere in between. Those trends were evident two weeks ago; they now have an exclamation point after them. Secondly, the Federal Reserve’s job is getting harder. The arguments both for and against raising interest rates have become stronger, creating tension and uncertainty that is rattling markets. It’s easy to conflate market events with economic events; a 1,00...more

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  • FT Alphaville

    The peer-to-peer scaling, matching and pricing fallacy

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  • Real Time Economics

    5 Things to Watch on the Economic Calendar

    The Labor Department’s August employment report offers the last broad snapshot of hiring before the Federal Reserve’s Sept. 16-17 policy meeting. The nonfarm payroll and unemployment numbers, as well as reports on factory activity, trade, productivity and regional economic conditions, will be scrutinized for clues on the economy’s health....more

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  • FT Alphaville

    Slater & Gordon: complicated, indebted and yet to be audited

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  • Steve Keen's Debtwatch

    Why I Support Corbyn For UK Labour Leader

    There was a time when most educated people knew that the Earth was the center of the universe. There was a sophisticated “Geocentric” model, known as the “Ptolemaic system”, that predicted to very high accuracy the observed movement of all the objects in the Heavens, as they purportedly orbited the Earth on perfect crystalline spheres. 500 years ago, anyone who proposed an alternative model—in which the Sun was the center and the Earth was just another planet orbiting it—was derided as a heretic and a madman. Click here to read the rest of this post.   ...more

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  • The Capital Spectator

    US Consumer Spending & Income Rises At Moderate Pace In July

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  • Real Time Economics

    The Glass Half-Full Economy

    Wall Street racked up its biggest one-day gain in four years on Aug. 26, after a rout earlier this week. Reuters In a note to clients this week, J.P. Morgan offered a fine illustration of the many forces–some positive, some negative–now buffeting the U.S. economy. Yes, sharp falls in domestic equity markets “have shaved about $2 trillion of wealth off of household balance sheets,” wrote the bank’s chief U.S. economist, Michael Feroli, before the market made a comeback midweek. That could reduce consumer spending by $30 billion a year over the next two years. But at the same time, he said, a 20-cent a gallon drop in gas prices over the past week should increase household disposable income by about the same amount, “much of which will likely be spent.” ...more

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  • The Capital Spectator

    A Fed Rate Hike In September? No…Yes…Maybe?

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  • FT Alphaville

    Markets Live: Friday, 28th August, 2015

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  • Macro Man

    Gushing

    All of a sudden, the world looks pretty good, doesn't it?  Spooz are up on the week (raise your hand if you saw that one coming 48 hours ago), Q2 GDP was revised waaaaay up, and even crude oil broke its steep downtrend with its best day in about 6 years.   The good news is positively gushing!The GDP figures will no doubt come as a comfort to the Fed, and take some of the edge off of the recent worries about a corrosive deflationary episode.   Not only did the quarterly real growth figure come in at a handsome 3.7%, but the deflator also spiked above 2%.  As it is now, the Q2 figure is shaping up as one of the better ones of the post-crisis era.Of course, we'll still have the usual hand-wringing about underused labour, a remaining o...more

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  • FinanceProfessor.com

    Scientists Replicated 100 Psychology Studies, and Fewer Than Half Got the Same Results | Science | Smithsonian

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  • FinanceProfessor.com

    Bankrupt Family Firms by Massimo Massa, Alminas Zaldokas :: SSRN

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  • The Skeptical Speculator

    Markets rally after stocks become cheaper

    The Shanghai Composite Index jumped 5.3 percent on Thursday. Government buying was suspected to have been behind the rally. The market rally in China helped shares gain elsewhere as well. In the US, the S&P 500 jumped 2.4 percent, capping a two-day gain of 6.4 percent, the best since the bull market began more than six years ago. Some analysts think there could be more volatility ahead. JPMorgan Chase & Co. derivatives strategist Marko Kolanovic warned that “price insensitive” program traders are likely to cause repeated selloffs in coming days. However, other analysts think the worst may be over. “We got our pullback, and now we’re going to focus on U.S. things like GDP and the Fed,” said John Canally, chief economic strategist at LPL Financial Corp. in Bosto...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    Cause and Effect: Or, Shooting the Messenger

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  • The Aleph Blog

    When to Deploy Capital

    Photo Credit: edkohler || Buy Now and smile!One of my clients asked me what I think is a hard question: When should I deploy capital?  I’ll try to answer that here.There are three main things to consider in using cash to buy or sell assets:What is your time horizon?  When will you likely need the money for spending purposes?How promising is the asset in question?  What do you think it might return vs alternatives, including holding cash?How safe is the asset in question?  Will it survive to the end of your time horizon under almost all circumstances and at least preserve value while you wait?Other questions like “Should I dollar cost average, or invest the lump?” are lesser questions, because what will make the most difference in ultimate returns comes from ...more

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  • Dr. Housing Bubble Blog

    Torrance child care and odd pricing action: Torrance home sells for $27,000 and is immediately listed for $485,000.

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  • Macro Man

    The best-laid plans

    But Mousie, thou art no they lane,In proving foresight may be vain;The best-laid schemes o' mice an' menGang aft agley.-Robert Burns, To a Mouse Well, Macro Man had the right idea to get long yesterday, but apparently so did everyone else, as equities were bid when he woke up and only briefly threatened to tickle negative territory in the morning before ripping in the afternoon.   You know what they say about the best-laid plans...well, you do if you can read Scots, at least.That's alright, at least his short-end trade came good, right?   Err....no.   The Dudley comments that the case for a September lift-off being less compelling than a few weeks ago were not particularly surprising- one might have thought that the recent 14-tick rally in EDZ5 was pricin...more

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  • The Skeptical Speculator

    Chinese stocks fall again but US stocks rebound

    Chinese stocks fell again on Wednesday, the Shanghai Composite Index ending down 1.3 percent after a rocky session. However, US stocks finally halted its decline on Wednesday. The S&P 500 jumped 3.9 percent to end its six-day slide. The rebound came as New York Fed Bank President William Dudley said on Wednesday that the market upheaval has reduced the case for raising rates in September. Still, the market may face more turbulence ahead. Tom Manning, chief investment officer at Boston Private Wealth, was quoted by Bloomberg as saying: “I don’t know that we found the bottom. I’m not convinced we don’t have more negative days to follow. We’re not likely to go from extreme volatility to extreme calm overnight.”...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    An Overview of Real Asset Investing

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  • Steve Keen's Debtwatch

    Breaking the Bad Habits of Economics: put that “equilibrium” out!

    This is a talk I gave to undergraduate students at Cartanega University in Colombia last week, comparing the insistence on equilibrium modelling by economists to the bad habit of smoking. ...more

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  • Steve Keen's Debtwatch

    Why China Had To Crash Part 1

    In this post I consider the economy in general: I’ll cover asset markets in particular in the next column, but you’ll need to understand today’s post to comprehend the stock and property market dynamics at play. Having said that, the Shanghai Index fell another 7.5% on Tuesday, after losing 8.5% on Monday, and is now down over 45% from its peak—so I’ll try to write the stock-market-specific post by tomorrow. In this post I’ll show, very simply, why a slowdown in the rate of growth of private debt will cause a crisis, if both the level and the rate of change of debt are high at the time of the slowdown. Click here to read the rest of this post. ...more

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  • Macro Man

    Achtung, Kapitan!

    Just when you thought the good ship S.S. Spoo had righted itself after a couple of nasty rogue waves, it went and hit a bit of uncharted reef late in Tuesday's session.  Morning ecstasy turned to afternoon despair, and you can just envisage a scene similar to that from a black and white WWII movie in which the German seaman shouts "Achtung, Kapitan!" when spotting Allied torpedoes approaching.Let's get one thing clear: this is not 2008 redux, for the simple reason that the underlying stress in the real economy of most of the world is not nearly as significant as it was 8 years ago.  That having been said, there are pockets in which the current environment is worse than the GFC:* China's real economy and shadow banking system are in worse shape.   Wit...more

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  • The Skeptical Speculator

    Chinese stocks plunge again, US rebound fails

    Market turbulence continued on Tuesday. Chinese stocks plunged again. The Shanghai Composite Index tumbled 7.6 percent on Tuesday, falling below the 3,000 level for the first time in eight months and extending the decline over the past four days to 22 percent. In response, China is cutting interest rates. The People's Bank of China announced that it will cut the one-year lending rate by 25 basis points to 4.6 percent effective Wednesday and the one-year deposit rate also by 25 basis points to 1.75 percent. The required reserve ratio will be lowered by 50 basis points. The move helped boost European stocks. The STOXX Europe 600 jumped 4.2 percent on Tuesday, the biggest gain in four years. The PBC's move also initially boosted US stocks. The S&P 500 was up 2.9 percent at...more

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  • AllAboutAlpha: Hedge Fund Trends & Alternative Investment Analysis

    CFTC Exempts ASX Clear from DCO Registration

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  • My voice and noise on subprime bank regulations

    One of Basel Committee’s many monstrous regulatory mistakes made easy. The expected and the unexpected mix up.

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  • VIX and More

    Third Biggest and Second Longest SPX Peak to Trough Pullback Since March 2009

    Nary a pullback goes by without at least a handful of requests to update my pullback table to help put the current pullback in perspective. Whether the current market action is best described as a pullback, correction or even bear market, I am happy to oblige. For those who may new to this graphic, note that the table below includes only S&P 500 Index pullbacks from all-time highs and only those that go back to the March 2009 bottom. (Due to the all-time high requirement, I count back to the May 20th intraday high of 2134.72, even though almost all of the damage has been done in the past three days.) In terms of defining the minimum pullback for the table, here 2.75% seems to be a natural cutoff, but I am more apt to include smaller numbers if it took a relatively ...more

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  • VIX and More

    Last Two Days Are #5 and #6 One-Day VIX Spikes in History

    Many readers have commented that one of their favorite of my regular graphics is the table of VIX spikes of 30% or more that I update periodically in this space, along with the subsequent performance in the S&P 500 Index following these spikes. This time around I have elected to add an additional column that identifies the catalysts involved (necessarily a subjective process) in each instance. When thinking about these catalysts, it might be helpful to compare the nature of the threat and the size of the VIX spike to changes in volatility during various high-profile historical events, an analysis I captured in Volatility During Crises. Another useful exercise is to think about the fundamental factors influencing each VIX spike in the context of A Conceptual Framewo...more

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  • Ticker Sense

    August 24th Blogger Sentiment Poll

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

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  • DRS » Blog

    FCA finds oversights in benchmark oversight

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  • DRS » Blog

    FCA finds oversights in benchmark oversight

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  • Dr. Housing Bubble Blog

    When housing becomes unaffordable for the young: The crushing burden of rents and student debt on future home buying.

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  • My voice and noise on subprime bank regulations

    World Bank, before Public Credit Guarantee Schemes (CGSs) help removing the obstacles to bank lending to SMEs

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  • Dr. Housing Bubble Blog

    Orange County home prices near all-time high levels: Inventory rising and looking at inflection points.

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  • Ticker Sense

    August 17th Blogger Sentiment Poll

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

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  • Richard's Real Estate and Urban Economics Blog

    Apartments, Energy and Bad Incentives

    I am spending this academic year working in Washington working at HUD, so I am renting an apartment here.  When I signed the lease, I understood that I would pay utilities; what I didn't understand, because I did not read the lease carefully enough, is how I would be charged for utilities.Even though I live in a professionally managed building that has something like 400 units, and even though each unit has its own circuit breaker the units are not metered individually.  Instead, utility costs are allocated on a pro rate basis based on unit square footage and number of residents in the unit.Since moving into this place, I have been very conscientious about setting the air conditioner at 80 degrees F. before leaving the apartment for the day.  I will do my...more

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  • A Fistful Of Euros

    Burden sharing

    Eurogroup statement on Greece – Once approved, the full re-engagement of the IMF is expected to reduce subsequently the ESM financing envelope accordingly. Is the Eurozone generally so transparent that the reason to have the IMF on board is to lesson the amount that a group of the world’s richest countries have to put on the table to sustain one of their own?   ...more

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  • Ticker Sense

    August 10th Blogger Sentiment Poll

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

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – August 12 2015

    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 1 basis point to 4.05% since last week while the purchase application volume decreased 4% and the refinance application volume i...more

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  • The Baseline Scenario

    Alphabet: Less Than Meets the Eye

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  • A Fistful Of Euros

    Growth is a driver of migration. Get used to it.

    A seriously important blog post. Migration is a problem of success, not failure. As sub-Saharan Africa increasingly rises out of deep poverty, more people can afford to emigrate and are aware that life might be better somewhere else. The propensity to migrate is positively correlated with real per-capita GDP. In Latin America, however, the correlation is negative. Potential migrants are likely to be better off at home, except the poorest of the poor. The conclusions we can draw from this are salutary. First of all, they’re not going away. The development train has left the station, and one of its effects is that migration has become an option. Perhaps the pressure will reduce as more countries reach the middle-income level, but it’s not as if there arenR...more

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  • DRS » Blog

    EU Commission Approves IRS Clearing Under EMIR

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  • DRS » Blog

    EU Commission Approves IRS Clearing Under EMIR

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  • The Baseline Scenario

    So Tom Hayes Is Guilty. Who Else Is?

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  • Paper Economy - A US Real Estate Bubble Blog

    Construction Spending: June 2015

    Today, the U.S. Census Bureau released their latest read of construction spending showing weakening results for June with total private construction spending, single family construction spending and non-residential construction spending all declining over the month. On a month-to-month basis, total residential spending declined 0.5% from May but remained 13.7% above the level seen in June 2014 and remained well below the peak level seen in 2006.Single family construction spending declined 0.3% from May and rose 12.8% since June 2014 but remaining well below it's peak level reached in 2006.Non-residential construction spending declined 1.3% from May and rose 14.6% above the level seen in June 2014 but remaining a well below the peak level reached in October 200...more

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  • FinanceProfessor.com

    More than Money: Venture Capitalists on Boards by Natee Amornsiripanitch, Paul A. Gompers, Yuhai Xuan :: SSRN

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  • footnoted*

    And now: the game changer bonus

    Quick: what do you think about when you hear the words “game changer”? We doubt that it’s a hefty bonus for tobacco industry executives. And yet, judging by this 8-K filed by Reynolds American Inc. yesterday, that’s exactly what it is. Needless to say it was buried in a lot of legalese (read: boring language). But the words “game changer” were actually used to describe the bonus, which is a first when it comes to SEC filings. Based on yesterday’s filing, the new bonus was designed as a “one-time performance-based cash awards to all employees of RAI and its subsidiaries designed to maintain focus on the successful integration of the recently completed acquisition of Lorillard, Inc.” The company closed its $27 billion...more

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  • Mises Institute

    Business-Cycle Theory in the United States, 1860–1900

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  • Emerging markets

    SWF: Temasek rides China wave to near 20% return

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  • Emerging markets

    China: Stock meltdown prompts market intervention

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  • Piggington's Econo-Almanac

    Shambling Towards Affordability, Mid-Year 2015

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  • Mises Institute

    Business Cycles

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  • Mises Institute

    Money

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  • DRS » Blog

    BRRD Labyrinth Roadmap

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  • DRS » Blog

    BRRD Labyrinth Roadmap

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  • The Baseline Scenario

    More Misinformation about Banking Regulation

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  • Jeff Matthews Is Not Making This Up

    Fact-Checking William D. Cohan; Or, Paul Is Not Dead

     TV personality, author and commentator William D. Cohan is grumpy about a lot of things. There’s the Duke lacrosse scandal, for one, about which he’s just publish a “shocking, thought-provoking new book”—according to the description on his own web page. And for another there’s Wall Street, from whence he came, and about which he’s written plenty of grumpy, conspiracy-minded books. Hence it’s no surprise to find Cohan invited to speak at the Sun Valley Writer’s Conference, whose attendees tend to be wealthy, Wall Street-leery arts supporters from L.A. It’s even less surprising that one of the talks he gave to those same attendees was entitled “Who Has the Real Power Now on Wall Street?”—actually, less of a talk and more...more

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  • Emerging markets

    China stocks: turning a crisis into a catastrophe

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  • footnoted*

    Will Hertz’ former CEO wind up having to clawback?

    You’ve probably already seen the news about Hertz Global Holdings finally filing its much delayed earnings. Yesterday, after the markets closed, the company filed its delayed 10-K for 2014, which included restated results for 2012 and 2013 and its first quarter 10-Q for 2015, bringing the company up-to-date in its filings. The news sent the stock, which had dropped over 30% since the beginning of the year, up about 12% on the news. The company’s CEO, John Tague, said yesterday that “Today’s filings are an important step forward, and our attention is now on realizing Hertz’s full potential.” But buried in the nearly 400 pages filed yesterday was this disclosure, which we first highlighted for footnotedPro subscribers yesterday: “Our former C...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Hong Kong Residential Property Prices: HKU-REIS March 2015

    The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in March, the price of residential properties declined 1.06% since February but still remained 16.57% above the level seen in March 2014. The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market. ...more

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  • Piggington's Econo-Almanac

    June 2015 Housing Data Rodeo

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  • VIX and More

    Seizing Opportunity From Stock Market Volatility (Guest Columnist at Barron’s)

    Steve Sears and I have a running joke that whenever I am tapped as a guest columnist for The Striking Price at Barron’s, we should both start buying VIX calls as inevitably something is going to come along and cause a volatility spike just in time to give me something topical to discuss. This time around I thought China might be the culprit or Greece or Puerto Rico or the Fed or maybe even the NYSE. In fact, it was a cocktail of everything that has turned a relatively quiet Q2 into a much more menacing volatility environment in Q3. In Seizing Opportunity From Stock Market Volatility, which appears today in Barron’s, I turn my attention to small caps (RUT, IWM) and use IWM vs. SPY as a way to think about relative volatility in the context of exposure to China, the e...more

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  • footnoted*

    A very good thing for Martha Stewart!

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

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  • Piggington's Econo-Almanac

    May 2015 Housing Data Rodeo

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  • Jeff Matthews Is Not Making This Up

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

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

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  • Richard's Real Estate and Urban Economics Blog

    Is Free Trade Good for Everyone?

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

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  • Jeff Matthews Is Not Making This Up

    Messi Announces Retirement, Reporter Asks About Half-Time Score

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

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  • Richard's Real Estate and Urban Economics Blog

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

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

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  • Institutional Economics

    Capital Gains Tax Reform in Canada: Lessons from Abroad

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

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  • The Street Light

    Transfer Pricing Economics

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

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  • Institutional Economics

    I am leaving CIS and returning to financial markets

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

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  • Institutional Economics

    Wayne Swan on Monetary Offset and the GFC

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

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  • The Prudent Investor

    The Coming Silver Shortage

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

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  • A Dash of Insight

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

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

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  • A Dash of Insight

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

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

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  • A Dash of Insight

    The Sound of Silence

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

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  • Felix Salmon

    Post Felix

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

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  • Felix Salmon

    The Piketty pessimist

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

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  • Economix

    Economix Meets the Gales of Change

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  • Economix

    Economix Meets the Gales of Change

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  • Felix Salmon

    The most expensive lottery ticket in the world

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

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  • Economix

    Mortgage Reform Is Worth the Small Extra Cost to Borrowers

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  • Economix

    Mortgage Reform Is Worth the Small Extra Cost to Borrowers

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  • Economix

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

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  • Economix

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

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  • Accrued Interest

    Getting Involved in Bitcoin

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  • Stan Collender's Capital Gains and Games

    Capital Gains And Games Now Being Published By Forbes

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  • Stan Collender's Capital Gains and Games

    Big Changes Are Coming To Capital Gains And Games

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  • Stan Collender's Capital Gains and Games

    Camp Plan Puts Nail In Tax Reform Coffin For This Year, And Next, And...

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  • The Prudent Investor

    30,000 Protesters Take To The Streets in Nantes, France

    While the world is glued to Youtube live feeds in HD quality to the bonfires in Kiev where one corrupt regime is about to be replaced by another, the economic crisis erupts into fire in the heartland of the Eurozone.30,000 protesters took to the streets in Nantes, France on Saturday, in an ongoing struggle to prevent the building of a new airport.Due to the language barrier and a blackout in EU media this report for the BBC from 2012 shows that fronts are pretty hardened. Protesters claim that the Notre-Dame-des-Landes airport in the west of the country is unnecessary and would damage the enviroment while the local government just wants to press on with an agenda obviously abhorred in this town of 900,000.We miss the uproar in the EU about the deployment of pepper spray...more

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  • The Prudent Investor

    You Have No Deposits at the Bank but Only an IOU in Your Hands

    A nice reminder that once you deposit mony at the bank it is not yours anymore. Simply said your deposit is a – currently no interest paying – loan to the bank with little paperwork. Better get it before the bank runs begin. Click here to go to the The Prudent Investor homepage for more interesting posts. ...more

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  • Accrued Interest

    Why You Should Dump Those Shares of Tesla Now

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  • The Oil Drum - Discussions about Energy and Our Future

    The Oil Drum writers: Where are they now?

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  • Accrued Interest

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

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  • The Oil Drum - Discussions about Energy and Our Future

    The Last Post

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  • The Oil Drum - Discussions about Energy and Our Future

    The House That Randy Built

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

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

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  • London Banker

    Chop Off Their Hands . . .

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

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  • The Street Light

    When the Fed Chair is an Academic

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

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  • London Banker

    For Want of a Nail, the Ship Was Lost

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

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  • London Banker

    Lies, Damn Lies and LIBOR

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

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Aaron Menenberg Policies of Scale

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