Previously
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MARKETS
Citi: Fair Value Of Rates Maybe Lower Than We Thought
Earlier – ZH
Consensus called for a
3% growth year. Despite improving growth data, it remains to be seen whether we
can actually sustain those growth rates over successive quarters. If growth
does not sustain well above trend levels, the market would need to reassess
fair value of long-term rates.
Groupthink 101: What All Goldman Sachs Clients
Believe Will Happen – ZH
Goldman's David Kostin:
"Almost all clients have the same outlook: 3% economic growth, rising
earnings, rising bond yields, and a rising equity market."
Market Tranquility Is Sowing The Seeds Of Its
Own Demise – ZH
Market tranquility
tends to sow the seeds of its own demise and the longer the period of calm, the
worse the eventual whiplash. That pattern played out back in 2007. There are
good reasons to suspect it will recur, if this pattern continues, particularly
given the scale of bubbles now emerging in some asset classes.
The fragile carry trade: will it last? – TradingFloor
A few months ago,
fixed income investors couldn’t get out of Brazil, South Africa and Turkey quickly enough. The rump trio of the so-called
‘fragile five’ emerging market economies were at the eye of a storm that roiled
financial markets in January and pummelled their currencies as weaknesses in
their economies were exposed. But things have changed.
Opportunities and Challenges for Hedge Funds
in the Coming Era of Optimization – Citi
Part 1: Changes Driven
by the Investor Audience
Hedge Fund Investors Aren't as Dumb as They
Look – View
/ BB
This week Citi
released a report on hedge funds in which they interviewed 138 investors, hedge
fund managers, consultants and others, and answers -- and much else in this
report -- are fascinating.
This is your brain on stocks – The
Big Picture
Behavioral economics,
neurofinance, risk aversion: why you are not wired to make intelligent
financial decisions
Investment management: Beyond "He's a
terrific stock picker!" –
Humble
Student
Putting the investment
process under a microscope * Risk control and portfolio construction * Portfolio
implementation * Review and control * Beyond "he`s a terrific stock
picker!"
Warren Buffett: These were my biggest early
mistakes – The
Reformed Broker
My Unusual Career Path in Finance – The
Big Picture
To Make a Killing on Wall Street, Start
Meditating – BB
ECONOMICS
Reconciling Hayek's and Keynes' views of
recessions – VoxEU.org
The views of Hayek and
Keynes about the causes and consequences of recessions are often presented as
opposing. According to Hayek, recessions are working out excessive investments,
whereas Keynes regarded them as demand shortages. This column argues that these
perspectives are not mutually exclusive. Recessions may reflect periods of
liquidation but this could be associated with inefficient adjustment involving
unemployment and precautionary savings. Stimulative policy may be desirable
even if it delays the full recovery.
Exchange-rate flexibility and capital flow
reversals – voxeu.org
Expansionary monetary
policy in advanced economies have created capital inflow booms in emerging
markets. This column analyses the effect of exchange rate flexibility on credit
markets during capital inflow booms. In economies with less flexible exchange rate
regimes, credit grows faster and more towards foreign currency. These countries
may benefit the most from regulatory policies.
Larry Summers: “Robots are already taking your
jobs” – FT
“We are seeing less
and less opportunity for what average people – people lacking in certain skills
– are going to be able to do.”
A Bond Manager Thinks about the Equity Premium – Aleph
blog
One of the things that
annoys me about the concept of the equity premium is that it is an academic
creation that does not grasp the structures of the markets.
The Great Backlash – Project
Syndicate
Nouriel Roubini: In
the aftermath of the 2008 global financial crisis, policymakers’ success in
preventing the Great Recession from turning into Great Depression II held in
check demands for protectionist measures. But now the backlash against
globalization has arrived, and we know from bitter experience what could come
next.
Are banks too large? – voxeu.org
Large banks have grown
and become more involved in market-based activities since the late 1990s. This
column presents evidence that large banks receive too-big-to-fail subsidies and
create systemic risk, whereas economies of scale in banking are modest. Hence,
some large banks may be ‘too large’ from a social perspective. Since the
optimal bank size is unknown, the best policies are capital surcharges and
better bank resolution and governance.
An astonishing record – of complete failure – FT
‘In 2008, the
consensus from forecasters was that not a single economy would fall into
recession in 2009’
Financial Hazards of the Fugitive Life – NYT
A fascinating and
disturbing portrait of the economic constraints and incentives faced by a large
subset of Americans: those who are hiding from the law.
PIKETTY
Piketty's Capital: An
Economist's Inequality Ideas Are All the Rage – BB
Piketty’s Missing
Knowhow – Project Syndicate
What the Financial
Times got (very) wrong – mainly
macro
Piketty’s Response to
FT – voxeu.org
Piketty’s ‘errors’
aren’t mistakes: They’re questions, and he answered them – WaPo
Capital in the 21st
Century – a response – FT
Thomas Piketty
Responds to Criticism of His Data – NYT
FAQ Thomas Piketty vs.
The Financial Times – NYT
Thomas Doubting
Refuted – Krugman
/ NYT
That Old-Time
Inequality Denial – Krugman
/ NYT