MARKETS
Citi: Why Does The
Euro Refuse To Go Lower? – ZH
Stock market rigged,
says Michael Lewis in new book – CBS
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 HFT – Abnormal
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 implications – ECB
Working paper no. 1658 by Matthieu Bussière, Marie Hoerova and Benjamin
Klaus
The returns to
currency speculation: Evidence from Keynes the trader – voxeu.org
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 Knowledge – WSJ
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 Website – BB
ECONOMICS
IMF Launches New Tool
to Assess Public Debt in Market Access Countries – IMF
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
Cosmopolitans – Project
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 lands – FT
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.
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 die – Marginal
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.