A long post - but you don't have to read everything, so take your time and choose wisely. If this is not enough, see last weekend’s
Markets
and Economics
Previously on MoreLiver’s:
ECONOMICS
(audio) Masters
of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics – LSE
How did
American and British policymakers become so enamoured with free markets,
deregulation, and limited government? Based on archival research and interviews
with leading participants in the movement, Daniel Stedman Jones has traced the
ascendancy of neoliberalism from the academy of interwar Europe to supremacy under Reagan and
Thatcher and in the decades since. He contends that there was nothing
inevitable about the victory of free-market politics.
McKinsey: World needs
$57 trillion in infrastructure by 2030. Yes, trillion with a 't' – Wonkblog
/ WP
The incoherence of risk coherence – Portfolio
Probe
What
coherent risk measures are, why some people think coherence is important, and
why I don’t.
Some small thoughts –
On the power-struggle between ‘money’ and debt – Golem
XIV
Deep Dive: Financial Repression Reconsidered – Marc
to Market
Great Graphic: New
Insight into Global Trade – Marc
to Market
Blocking a Bad Idea That Enriches the Rich – EconoMonitor
Peterson,
Austerity, and the Washington Consensus
A Comment on What’s Causing the Rise in
Inequality – Econospeak
The End of Labor: How to Protect Workers From
the Rise of Robots
– The
Atlantic
Technology
used to make us better at our jobs. Now it's making many of us obsolete, as the
share of income going to workers is crashing, all over the world. What do we do
now?
Our correspondents ask whether the capacity for
technological innovation to drive growth is slackening – Free
exchange / The Economist
Unlimited growth... why the idea is just silly – The
Physics of Finance
MONETARY
& FISCAL
Two extreme fiscal/monetary worlds – Worthwhile
The real
world lies somewhere between those two extremes, because most governments have
both money and bonds as liabilities.
Once you turn base
money into short-term debt, can you go back? – alphaville
/ FT
The most exciting wonky discussion being had right now
is between Steve Randy Waldman and Paul Krugman over whether “base money” and
short-term debt are perfectly substitutable or not, and what that may or may
not mean for central bank policy.
Monetary Policy: From
Managing the Monetary Base to Setting an Interest Rate Floor – Econospeak
REGULATION
High-speed Trading: Is It Time to Apply the
Brakes? – Knowledge@Wharton
Short Selling Bans
Generally Don’t Work! – Turnkey
Analyst
Have we solved 'too
big to fail'? – voxeu.org
The Subprime Crisis became the Global Crisis when one
too-big-to-fail bank was allowed to fail. This column argues that too-big-to-fail
is far from gone despite years of reform efforts. It is important that it not
be forgotten. Further analytical work, weighing the costs and benefits of
different structural reform proposals, would help keep memories fresh and
policies on the right track.
A better way to design global financial
regulation – voxeu.org
Internationally
prominent economists and politicians have been pushing for effective implementation
and better coordination of the new financial regulations currently under
construction across the globe. This columns argues that at a time of crisis,
financial regulators were forced to act on systemically important assets and
liabilities, rather than just on the individual financial institutions holding
them. A key turning point towards better regulation will be when we recognise
the need for such action ahead of time, building the essential infrastructure
that ensures excessive risk-taking is discouraged.
BANKS
Ending 'Too Big to Fail': A Proposal for Reform
Before It's Too Late
– FED
(With
Reference to Patrick Henry, Complexity and Reality), Remarks before the
Committee for the Republic, Washington, D.C. · January 16,
2013
Snakes and Ladders: Investment Banking on the
Brink – Spiegel
For
decades, investment bankers have held the key to untold riches -- but now
they're being laid off by the tens of thousands. As the crisis forces the
industry to search for a new identity, is it ready to mend its ways?
Footnote 74: FACEPALM
– alphaville
/ FT
Oh, my, my, my. From JPMorgan’s Task Force Report into
the London Whale with its billions of losses in synthetic credit, this
footnote:
More Ideological
Excuse Making for Bad Banks – The
Big Picture
Deutsche Bank
Derivative Helped Monte Paschi Mask Losses – BB
Bank capital
requirements: Are they costly? – voxeu.org
There is a view that banks are using more equity
capital – and relatively less debt – to finance the assets they hold, creating
substantial costs so great as to make more capital unfeasible. This column
argues that these costs are exaggerated, but that the benefits of having banks
that are far more robust are likely to be large.
A tempest in a spreadsheet – alphaville
/ FT
The Task Force Report into the billions of dollars of
losses racked up by JPMorgan’s Chief Investment Office has revealed a number of
things, not least of which are some impressive spreadsheet errors.
MARKETS & TRADING
Book Bits – The
Capital Spectator
Amazingly, 89% of
bull market performance can be explained by time – Lighthouse
IM
Research Review:
Asset Allocation – The
Capital Spectator
Getting on with life
after the “policy vol crunch” – alphaville
/ FT
Benjamin Graham’s “Foolproof Method of
Systematic Investment” – Greenbackd
Irrationality, trend-following, and cats – Free
exchange / The Economist
10 Trends to Watch in Finance for 2013 – The
Big Picture
Founding Father of
the Quants Was Revolutionary Marxist – BB
Jacob Marschak may not be a household name today, but
he inspired a number of financial practitioners and thinkers, from Milton
Friedman to Harry Markowitz, and his insights are now the backbone of trading
strategies and computer algorithms worldwide.
The Trading Profits
of High Frequency Traders – The
Big Picture
How Bucket Shops Lured the Masses Into the
Market – BB
Daily Quickie – HistorySquared
A Quick
Look at Global Real Estate Bubbles For Hints of Bank Risks
FUNDS
Credit hedge funds will continue to demand
appropriate liquidity terms from investors – Sober
Look
On the Trail of SAC Capital's Steven Cohen – Businessweek
How Vanguard amassed $2 trillion – MarketWatch
What
investors can learn from the fund giant’s success