I am experimenting with covering blog debates.
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MARKETS
The Illustrated Guide
To 4 Years Of Currency Wars – ZH
Global Central Bank
Focus: Coal in the Fed’s Stock-ing – PIMCO
Forward guidance has become an increasingly common practice among global
central banks. Communicating a possible change in the policy rate could have a
large effect on long-term interest rates. * Capital has moved literally around
the globe as a result of central bank activism in developed countries. * Looking
ahead, we expect 2014 to be a year of increased differentiation across emerging
markets in terms of economic fundamentals, policy reactions and market
outcomes.
Investors should
abandon long-term commodity bets – alphaville
/ FT
The assumption is that commodities diversify portfolios, hedge against
inflation, and, in the case of gold, offer a safe store of value. But our
research suggests these justifications for long-term bets on commodities are
illusory.
Asset Class
Performance For The Cycle – Short
Side of Long
Since majority of assets bottom between late 2008 and early 2009, the
chart above also shows how they have performed for the overall investment cycle.
The most important charts
of the year – BI
Secret Currency
Traders’ Club Devised Biggest Market’s Rates – BB
The global economy in
2014 – Heading towards trend growth – DB
Research
Saxo Bank's 10
Outrageous Predictions For 2014 – ZH
10 Lessons To Learn
From Poker – STA
Man Who Said No to
Soros Builds BlueCrest Into Empire – BB
How do Hedge Fund
"Stars" Create Value? Evidence from Their Daily Trades – Russel Jame
Trading profits of the top 10% of hedge funds cannot be explained by
luck. Similarly, superior performance persists. Outperforming hedge funds tend
to be short-term contrarians with small price impacts…liquidity provision is an
important channel through which outperforming hedge funds persistently create
value
The Single Greatest
Predictor of Future Stock Market Returns – Philosophical
Economics
Accounting, Dividends, and the Permanently High Plateau -
ECONOMICS
Sovereign Debt
Restructuring: Red Herrings Swimming in a Sea of Confusion – PIIE
Debates over the place of sovereign debt restructuring in a financial
crisis are getting more muddled and acrimonious, in no small part because no
one wants to face the underlying governance challenge: political pressure to
lend public money to contain the crisis, even if it means paying private
creditors in full and adding to a sky-high pile of sovereign debt.
Investors' new
challenge: Deciphering central bank 'guidance' – Reuters
The gradual withdrawal of unprecedented stimulus by the world's big
central banks is officially underway, posing a new challenge to investors: how
to decipher monetary policy that will increasingly amount to not much more than
words.
Alan Greenspan Is
Still Trying to Justify His Bad Decisions – The
New Republic
What the maestro doesn't understand
The Facebooking of
Economics – Krugman
/ NYT
Don’t feel nostalgic for the days of authority figures dominating the
discourse. Intellectually, in economics at least, these are the good old days.
Top 200 Influential
Economics Blogs: Aug 2013 – Onalytica
DEBATE: MONEY SYSTEM
The repo market as a
form of free banking – alphaville
/ FT
An interesting byproduct of both the “Is QE deflationary?” and “Does
Bitcoin have value?” debates is that many things that have previously been
taken for granted are being questioned, re-evaluated or, more pertinently
still, remembered. Chief among them is the question of how our money system
really operates.
The theory of money
entanglement (Part 1) – alphaville
/ FT
While it may appear on
the surface that fiat money reigns supreme, all money is neutral and that
central banks have ultimate control over money supply — in reality the system
represents an entangled money web.
The theory of money
entanglement (Part 2) – alphaville
/ FT
There are a number of reasons why banks choose to voluntarily fund and
capitalise themselves when — thanks to the power of their own seigniorage —
they don’t have to.
Getting qualitative
with monetary policy – alphaville
/ FT
It may be better to judge qualitative easing as the free market forcing
state ownership of ever more assets — especially inferior ones from a capital
return perspective — rather than the central bank forcing the market to hand
over assets to the state involuntarily.
DEBATE: PHILLIPS CURVE
Phillips Curve
Nonlinearities in the Data – Econbrowser
Over the period of the
Great Moderation, has inflation responded linearly to the output gap?
Phillips Curves and
Fisher Relations – New
Monetarism
What if we got the
sign wrong on monetary policy? – John
Cochrane
Getting the right
sign on the nominal interest rate signal – Worthwhile
Some initial thoughts
on John Cochrane – The Money Illusion
DEBATE: SCHOOLS OF THOUGHT
The shakeup at the
Minneapolis Fed is a battle for the soul of macroeconomics—again – Quartz
The shakeup may be a part of big changes that are happening at the Fed,
as well as a tectonic shift in the field of economics itself.
Freshwater and
Saltwater Economists: A Creation Story – Conversable
Economist
Back in the late 1970s, when I was first shaking hands with economics,
the standard dividing line in macroeconomics was phrased as
"monetarists" vs. "Keynesians." But that distinction was
already becoming obsolete.
Is Economics a House
Divided? Analysis of Citation Networks – Aalto
The strongest division is much stronger than could be expected to be found
under idiosyncratic citation patterns, and is consistent with the reputed freshwater/saltwater
division in macroeconomics. The division is stable over time, but varies across
the fields of economics.
"Freshwater vs.
Saltwater" divides macro, but not finance – Noahpinion
There's an easy explanation for why finance is the least divided: It has
the best data
Is finance guided by
good science or convincing magic? – Magic,
Maths, Money
Finance is actually more committed to 'rituals' around risk management
than the 'science' of risk management, and this seems to be facilitated by
mathematics.
DEBATE: MICROFOUNDATIONS
Exchanges on the
merits of microfoundations – Storify
Why microfoundations
have merit – Long
and Variable
Microfoundations -
the illusion of necessary superiority – mainly
macro
Usual comment on
Wren-Lewis – Robert’s
Stochastic Thought
I love
microfoundations. Just not yours. – Noahpinion
Simon Wren Lewis on
‘mainly microfounded macro’ – Long
and Variable
More on the illusion
of superiority – mainly
macro
Does finance need
money/macrofoundations? – Worthwhile
Microfoundations and
the Parting of the Waters – Krugman
/ NYT
Uber and the Macro
Wars
– Krugman
/ NYT