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Sunday, March 30

30th Mar - W/E: Markets & Economics

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Citi: Why Does The Euro Refuse To Go Lower?ZH

Stock market rigged, says Michael Lewis in new bookCBS
Michael Lewis' "Flash Boys" reveals how a group of unlikely characters discovered how some high speed traders work the stock market to their advantage

Flash Boys and the future of HFTAbnormal Returns
This is a big week for Michael Lewis and fans of his work. First it was reported that his book The Big Short is going to be made into a feature film by Adam McKay of Anchorman fame. We noted the reaction to the book when it came out in 2010. On Monday his latest book Flash Boys: A Wall Street Revolt will be released.

Technical Analysis and Individual Investors SSRN
Arvid O. I. Hoffmann, Hersh Shefrin: We find that individual investors who use technical analysis and trade options frequently make poor portfolio decisions, resulting in dramatically lower returns

Commonality in hedge fund returns: driving factors and implicationsECB
Working paper no. 1658 by Matthieu Bussière, Marie Hoerova and Benjamin Klaus

The returns to currency speculation: Evidence from Keynes the
Olivier Accominotti, David Chambers: Keynes traded currencies using a discretionary and fundamentals-based strategy. This column shows that he underperformed rules-based carry, momentum and value strategies. The returns to these strategies in the 1920s and 1930s were time-varying and are in part explained by the contemporary limits to arbitrage. The excess returns might also represent compensation for exposure to the considerable macroeconomic volatility of the time.

Robert Shiller's Nobel KnowledgeWSJ
Yale University economics professor and Nobel laureate, Robert Shiller on the art of stock-picking and the complex psychology of investors

Bugatti-Driving 26-Year-Old Tied to Penny-Stock WebsiteBB

IMF Launches New Tool to Assess Public Debt in Market Access CountriesIMF
New approach takes holistic view of debt sustainability * Tool evaluates realism of economic projections, potential vulnerabilities * Visual summaries highlight risks that are comparable across countries

The Monetary CosmopolitansProject Syndicate
Richard S. Grossman: In recent years, countries have increasingly turned to foreigners and people with considerable foreign experience to assume top positions at their central banks. In doing so, they are combating the "groupthink" that has long impeded policymakers' ability to develop innovative responses to new challenges.

Sovereign rating bias, a clanging gauntlet landsFT
Unicredit: We suggest that credit rating agencies should be stripped of their regulatory powers and these transferred to an international body. Failing that, the ratings agencies should be forced to substantially increase transparency, including publishing a separate breakdown of the objective and subjective components of ratings, the minutes of the rating committees, and the voting records.

Why Minsky MattersBBC
His key idea is simple enough to be a t-shirt slogan: "Stability is destabilising". While the mainstream view has been that markets tend towards equilibrium and the role of banks and finance can largely be ignored, Minsky argued that in the good times the seeds of the next crisis are sown as the financial sector engages in riskier and riskier lending in pursuit of profit.

Coming into econ from physics (and other fields) Noahpinion

Austrian business cycle theory refuses to dieMarginal Revolution
Austrian approaches still need more Hyman Minsky and should cease putting all of the “blame” — causal, moral, or otherwise — on the monetary expansion of the central bank.