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Sunday, August 24

24th Aug - W/E: Markets & Economics

Previously on MoreLiver’s:

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Twelve Lessons: What I’ve Learned About Fund InvestingBarron’s

Russia and Europe: Time to trade what no-one else dares?TradingFloor
Use the tools that aren't distracted by newsflow * Should peace break out, the DAX—S&P 500 gap could evaporate * Nobody wins a trade war and trading opportunities therefore exist

Treasury Curve Collapses To Flattest Since Jan 2009ZH

Can Momentum Be Arbitraged Away?Systematic Relative Strength

The 1990s, the 2000s and the 2010sPrice Action Lab

The dark side of technical analysisAdam Grimes
Some challenges for technical analysisAdam Grimes
Five things we can do with charts… that workAdam Grimes

Rethinking Buffett's "favorite" valuation metricHumble Student

When “Process” Meets the Real WorldThe Reformed Broker
Mindfulness, intuition and intentional tradingAbnormal Returns

Your Weekend Reading on the CAPEBB

Daily Macro [Friday] WSJ
On the one hand, the economic context in which this year’s central bank confab in Jackson Hole, Wyo., kicks off today is a much calmer one than in the past. There is no euro crisis to talk of, no “taper tantrum” fears coursing through emerging markets about a forthcoming end to Federal Reserve liquidity, and there are general signs that the U.S. and U.K. economies are growing and creating jobs. But on the other hand, there must be a sense of déjà vu for the central bankers present.

Daily Central Banks [Friday] WSJ
Hilsenrath’s Take: In Rainy Jackson Hole, Yellen Ponders Labor Market Mojo * Central Bankers Wrestle With Easy Money Amid Uneven Global Recovery * Despite Retreat, Fed to Keep Bond Buys in Policy Toolkit * Private Bankers Notably Absent From Jackson Hole Conference This Year * Banks Told Fed Ahead of July Meeting They Expected 3Q 2015 Rate Hike

The rules of central banking are made to be brokenFT
Barry Eichengreen: Central bankers should draw line on past

Nobel guru fears it may be nigh impossible to stop deflationThe Telegraph
If Abenomics fails to generate inflation/recovery in Japan, we will have very compelling evidence that even extreme monetary policy cannot arrest entrenched deflation in ageing societies. If so, we will have to come up with another plan. Perhaps we can dust off the Chicago Plan and nationalise credit. None of these challenges are beyond the wit of man.

Buiter on helicopter dropsFT
There always exists – even in a permanent liquidity trap – a combined monetary and fiscal policy action that boosts private demand – in principle without limit. Deflation, ‘lowflation’ and secular stagnation are therefore unnecessary. They are policy choices.

Land vs HelicoptersWorthwhile
Is it possible that a central bank that was allowed to buy land would ever need to use helicopter money to prevent aggregate demand falling below target? Would it ever be desirable for central banks to issue helicopter money rather than buying land?

On wages and inflation: jeers for fearsFT
We live in disinflationary times, at least in the developed world. This doesn’t mean that monetary and fiscal policies lack the potency to offset disinflation or deflation. What it means is that holding policy constant across time, non-policy economic forces have become less and less inflationary in recent years.

Macro-Prudential Policies to Mitigate Financial System VulnerabilitiesIMF
Measures aimed at borrowers––caps on debt-to-income and loan-to-value ratios––and at financial institutions––limits on credit growth and foreign currency lending––are effective in reducing asset growth. Countercyclical buffers are little effective through the cycle, and some measures are even counterproductive during downswings, serving to aggravate declines, consistent with the ex-ante nature of macro-prudential tools.

Capital flows and macroprudential policiesECB
A multilateral assessment of effectiveness and externalities, by John Beirne, Christian Friedrich

Identifying excessive credit growth and leverageECB
By using credit to GDP gaps, credit to GDP ratios and credit growth rates, as well as real estate variables in addition to a set of other conditioning variables, the model is designed to not only predict banking crises, but also to give an indication on which macro-prudential policy instrument would be best suited to address specific vulnerabilities.

Using product- and labour-market tightness to understand
Types of unemploymentMainly Macro

The Closing Of The Austrian School's Economic MindForbes
Idiot's Guide to Austrian EconomicsMish’s

Abenomics – What Could Possibly Go Wrong?Edward Hugh
Don’t talk about wages and incomesThe Money Illusion

Lesson From Old India: When an Economy Just Doesn’t Get BetterNYT
For all the talk of the Great Depression, we might look at a different exemplar for modern times, 18th- and 19th-century economic history  India. That country’s economic retrogression during that era may help us understand the quandary that some parts of the world face today.