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Sunday, November 18

18th Nov - Weekender - Economics & Trading

Before my usual linkcollection, I would like to point out the following gems that you might have missed: 


Bernanke's College Lecture Series:The Federal Reserve and the Financial Crisis: Part 1, Part 2, Part 3, Part 4 (youtube videos, approximately 60-70 mins each)
 
George Soros: Open Society, the Financial Crisis, and the Way Ahead – Open Society (links to youtube videos, excellent, including Q&A clips)
 
Previously on MoreLiver’s:

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ECONOMICS
Current Thinking on the Financial Crisis and the Way Forward – CFA Institute

Cato Institute 30th Annual Monetary Conference – The Aleph Blog
Quick summaries – five minutes to read them all:

Monetary policy: Will next time be different? – Free exchange / The Economist
A report from the 30th Cato monetary conference

(audio) How the clash between John Maynard Keynes and Friedrich Hayek continues to define the difference between left and right today  – LSE
Eighty years ago at the LSE, Friedrich Hayek launched an assault upon the new economic thinking of John Maynard Keynes. The clash was so bitter and vituperative that it scandalized the cloistered world of academia. Eighty years on, the differences between the two men have still not been finally resolved and their conflicting approaches to the economy continue to define the profound chasm between politicians of left and right. (direct mp3-link)

Ultimate Limits to Growth – The Physics of Finance
The conclusion is that continued exponential growth in energy use -- which we've experienced over the past few centuries (and possibly much longer) -- cannot last for much more than a century or so. What about economic growth? We don't know.

Resolving The Crisis And Restoring Healthy Growth: Why Deleveraging Matters? – IMF

Why the Chicago Plan is flawed reasoning and would fail – A View from the Trenches

Determinants of TARGET2 imbalances – Bank of Italy (pdf)

Italian household debt after the 2008 crisis – Bank of Italy (pdf)

Time-Consistent Rules in Monetary and Fiscal Policy – The Big Picture

Solving the too big to fail problem – BIS (pdf)

International monetary policy interactions: challenges and prospects – BIS

The euro as a trusted means of payment – BIS (pdf)

The monetary policy of the ECB and its transmission in the euro area – ECB (pdf)

Monetary policy in the financial crisis - measures, effects, risks – BIS (pdf)

The Lender of Last Resort: Lessons from the Fed’s First 100 Years – The Big Picture

Missing Growth Multipliers – Project Syndicate
In its April 2010 World Economic Outlook, the IMF predicted that global GDP growth would exceed 4% in 2010, with a steady annual growth rate of 4.5% maintained through 2015. But the forecast seriously underestimated the tax and world-trade multipliers, resulting in much lower growth than expected.

Blogs review: Empirical and theoretical multiplier uncertainty – bruegel
The debate over whether austerity measures imposed on struggling eurozone countries has contributed to a deepening recession. On Wednesday, the European Commission responded with its own “box” pointing to the importance of distinguishing permanent from temporary fiscal adjustments. Contrary to what the battle of the boxes suggests, if there is multiplier uncertainty, it is very unlikely to come from the empirical front. Rather, it may come from recent challenges to previously accepted theoretical results.

Where has all the Risk gone? – Golem XIV
People always say Follow the Money.  You might do better to Follow the Risk. Risk is the pollution created by the process of making money. So where you find people making one you will surely find them hiding the other. You’ll find both at the banks.

Production Sags, and Even Germany Is Affected – NYT
Excellent graph on the left side of the margin!

Converging world – The Economist
Countries’ fiscal policies are becoming more similar

Daily Quickie – HistorySquared
Turbulence as an Early Warning Sign; Strategas says not Enough Fear for a Bottom; Emotion Not Welcome in the Chinese Party

Daily Quickie2 – HistorySquared
Interest Rates Greater than Growth Foreshadow Trouble


MARKETS & TRADING
An Experienced View on Markets and Investing – FAJ (pdf)
At the 65th CFA Institute Annual Conference in Chicago (held 6–9 May 2012), Robert Litterman interviewed Eugene F. Fama to elicit his views on financial markets and investing.

Mr. Market Smells A Rat – The Capital Spectator
Risky assets taking it on the chin and a new round of disinflation/deflationary winds are blowing. There's still time to short-circuit this train wreck, but time is running short.

Are 'Equity' Vigilantes Keeping The Press Honest On The Fiscal Cliff? – ZH
BofAML’s note.

Schwager, Market Sense and Nonsense – Reading the Markets

DeMark Fibonacci Charts Embraced by Cohen Lure Investors – BB

The Emergent Rationality of Markets – The Psy-Fi Blog

The guts of a statistical factor model – Portfolio Probe

50 Unfortunate Truths About Investing – The Motley Fool

Factbox: Banking job cuts near 160,000 – Reuters
Banks worldwide are shedding jobs as stricter regulations and euro zone worries take their toll on trading income and investment banking units.

Interdealer brokers: At the sharp end – The Economist
The firms that connect buyers and sellers in wholesale markets are under the cosh

The Emergent Rationality of Markets – The Psy-Fi Blog
the possibility of new properties emerging from systems made up of complex component parts isn’t new, although it does serve to make a lot of scientists and philosophers extremely annoyed.  Which is a good reason for pursuing the idea, is it not?

Financial Cartography – Soramäki /slideshare

This is what happens when regulators don't understand the market place – Sober Look
So while the small French investors are paying these new taxes, the institutional "speculators" that use leverage, active trading, and shorting, have a loophole that would be quite difficult for French regulators to close. Well done, Mr. Hollande.

On technical analysis, algos, and others – ASA

  MF GLOBAL
Treating bonos as Treasuries – alphaville / FT
Congressional Report Blames Corzine for Collapse – DealBook / NYT


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