tag:blogger.com,1999:blog-87450008214662506692012-01-27T08:00:16.348+11:00rognoreply@blogger.comBlogger20881100tag:blogger.com,1999:blog-8745000821466250669.post-15372738639618264972012-01-27T05:10:00.000+11:002012-01-27T05:10:22.817+11:00

Davos speech "...austerity does not deliver the rewards it is supposed to deliver," King said. "The consequence is that you are left with countries that have zero growth, possibly recession and interest rates which are painfully high and that combination is unsustainable." He said that the failure of austerity put fiscal transfer back to the top of the agenda. Germany has been vehemently

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-4409747199828017612012-01-26T22:52:00.001+11:002012-01-26T22:52:22.505+11:00

Professor Robert Shiller comments on the IMF study into "fiscal consolidation" There is no abstract theory that can predict how people will react to an austerity program. We have no alternative but to look at the historical evidence. And the evidence of Guajardo and his co-authors does show that deliberate government decisions to adopt austerity programs have tended to be followed by hard

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-49702791979966921342012-01-26T16:22:00.000+11:002012-01-26T16:22:10.179+11:00

According to the latest from Republican Presidential aspirant Newt Gingrich By the end of my second term, we will have the first permanent base on the moon and it will be American

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-24212539596614507052012-01-26T09:56:00.000+11:002012-01-26T09:56:53.326+11:00

The IMF have been long associated with the principles outlined in what has become to be known as the Washington Consensus which include but are not limited to reduction of govt spending and deficits, deregulation, privatisation of public assets and market based interest rates. "Fiscal consolidation" is defined as the reduction of government deficits and debt accumulation. Recently the IMF

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-21303074968890189552012-01-25T19:12:00.000+11:002012-01-25T19:12:18.652+11:00

Prof Bill Mitchell unwinds the latest thoughts from the IMF When I read the latest news from the IMF early this morning I sent out a tweet saying that it was the height of hypocrisy for the IMF now to be trying to reclaim the high ground in the current economic debate by lecturing nations about the dangers of fiscal austerity. The IMF will always be part of the problem rather than the solution.

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-79530856151097374752012-01-25T09:18:00.002+11:002012-01-25T09:18:14.556+11:00

For whatever reason the move by PM Gillard to not honour her agreement and proceed with poker machine reform has drawn stinging rebuke, Stephen Mayne tweets ALP Right told Gillard to sack Carr from Cabinet, ditch Jenkins as speaker and then dud Wilkie. In return they block Rudd challenge. Awful Putting up Craig Thompson to defend pokies backdown was crazy. Maybe pokies industry will now donate

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-31565610388305927652012-01-24T16:44:00.000+11:002012-01-24T16:44:04.423+11:00

Economists Paul de Grauwe and Yuemei Ji state the obvious Economists now agree that markets were wrong in placing the same risk premium on Greek bonds as on German bonds and then apply that same logic to the present today the same markets are also wrong in overestimating the risk that the periphery countries will default. And they have the evidence to prove it The systematic mispricing of

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-25739748537490154822012-01-23T11:40:00.000+11:002012-01-23T11:42:08.571+11:00

According to the Telegraph The three big credit rating agencies - Fitch, Moody's and Standard & Poor's - downgraded Greece in July after the debt swap plan was unveiled, assigning it "highly speculative" status and warning that losses for private creditors would imply a default.and S&P said in July it would revise Greece's sovereign rating to "selective default" when any debt restructuring is

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-62529184936215498782012-01-23T09:37:00.001+11:002012-01-23T09:37:53.291+11:00

According to a survey cited by The Economist Fully 71% of the businesspeople polled expected America’s competitiveness to decline over the next three years. The poll was conducted amongst nearly 10,000 Harvard Business School graduates over the US and 121 other countries and had some surprising outcomes Intriguingly, the Harvard alumni were gloomy about where America is headed, rather than how

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-63046796198848920232012-01-21T08:52:00.001+11:002012-01-21T08:53:30.677+11:00

From Bloomberg re Greece; surely it is the hedge funds problem if they don't hedge their bets? Hedge funds holding Greek bonds may resist the deal, seeking greater profit by getting paid in full, either by the Greek government or by triggering payouts from credit-default swaps. Winning support from banks seeking to limit their losses may be easier than including hedge funds and other speculators

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-75143694484266258982012-01-21T08:20:00.000+11:002012-01-21T08:20:26.280+11:00

Felix Salmon argues that collective action will spread oil on Greece's troubled waters. Most of the bondholders are European banks, and as Fidler says, European banks are subject to “moral suasion” — having their arms twisted by their national governments — which is much more likely to affect their final decision than the official judgment of Dallara. Meanwhile, an increasing proportion of the

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-20479945376993696702012-01-21T06:58:00.000+11:002012-01-21T06:58:43.507+11:00

Link "Even if they reach an agreement there are going to be so many holdouts that then they’ll have a problem. They’ll either pay the holdouts and that becomes expensive, or if they don’t pay them you’ll have a series of defaults, because they’re going to stop paying them. Or the way to avoid the holdouts from being holdouts is then to change domestic legislation, to cram down the terms of the

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-57678225099445130782012-01-21T06:39:00.001+11:002012-01-21T06:39:49.140+11:00

Now that is what I call a haircut It appeared that Greece had secured a deal to pay an interest rate of 3.1%, rising to 4.75%, on new 30-year bonds created from its outstanding €360bn (£300bn) debt burden. The effect would be for creditors to accept writedowns of up to 70% on many of their loans.

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-48388203524416557412012-01-20T06:00:00.001+11:002012-01-20T06:00:11.314+11:00

"By taking bank funding risk off the table for a couple of years in Europe, the ECB has significantly reduced the risk of a systemic banking crisis, which we were highly concerned about in 2H 2011." Read more: http://www.businessinsider.com/the-biggest-reason-everyones-still-underestimating-the-ecb-2012-1#ixzz1jvr3iIzG

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-4386498898300040792012-01-19T20:01:00.000+11:002012-01-19T20:01:29.583+11:00

Stephen Koukoulas @TheKouk 8h unemployment down to 5.2% but this news swamped by job losses as sub trend growth continues   Part rate dives 0.3ppts to 65.2 - not a good sign

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-55750224465801330832012-01-19T07:23:00.000+11:002012-01-19T07:23:34.048+11:00

In an interview with the Financial Times unelected leader of Italy, Mario Monti, explained “I’m convinced, and the IMF is also convinced, that the more pledges are made [to the rescue fund], the higher the volume of pledges made, the smaller the probability that a single euro of cash will have to be disbursed.” US treasury spokesman Alaimo was clear on the matter "We have told our international

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-83718639585427994122012-01-19T06:03:00.001+11:002012-01-19T06:03:42.170+11:00

Nouriel Roubini : You have to assign probability to something disorderly happening in the Eurozone and you have to assign some probability to disorderly default and even a break up of the Eurozone not in the next six to eight months, but certainly over the next two or three years. If that break up of the Eurozone were to occur, the systemic effects of it could be much bigger than the disorderly

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-8246482098859041352012-01-19T05:26:00.000+11:002012-01-19T05:26:07.070+11:00

It seemed like a good idea at the time...So far, markets have barely reacted to the news. Plans to boost the capacity of the IMF have been fraught with rumors all day. Initially Bloomberg reported that the fund would attempt to raise $1 trillion. Enthusiasm faded after the initial number was cut in half. The fact that this money will come from European sovereigns themselves severely diminishes

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-19033435937272944042012-01-18T21:54:00.001+11:002012-01-18T21:54:12.828+11:00

Link The news excited Jim Cramer, who tweeted: "IMF just proposes $1 trillion increase in lending.. That's what's needed, IMF stepping up to the table. Real heat!" and "This is the kind of thing that keeps happening whenever it gets dark out. IMF boost--now we know why $FXE strong...bonds strong"

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-23899641104792869882012-01-18T20:55:00.000+11:002012-01-18T20:55:21.996+11:00

Roger Martin argues that speculators act to distract management from their task, At the very heart of the problem are two deeply flawed theories — first, that the obligation of management is to earn a return on the expectations of shareholders, however insanely high those expectations happen to be: and second, that stock-based compensation provides a useful motivation for management to take care

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-31624382631629211602012-01-17T19:11:00.000+11:002012-01-17T19:11:13.089+11:00

The Kouk Mr Robb's representation of the growth is debt is easily explained, which makes his alarmist "analysis" all the more contemptible.  The reporting of it, unquestioned, it just as extraordinary. I'll explain it this way. Think of two countries of similar size in terms of GDP. In time Period 1, Country One has net debt of $2 billion.  Country Two has net debt of $50 billion. In time

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-49662089203644374722012-01-17T17:16:00.002+11:002012-01-17T17:16:41.469+11:00

..telling them They must implement credible medium-term plans to put their budgets on a sustainable footing, because taxpayers rightly expect governments to manage their money prudently Peter Martin says  heaven knows why Shane Oliver says Fiscal austerity leads to economic deterioration and budget deficits blown out. It has the effect of worsening the economic outlook Joe Hockey said She

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-23921643708994314552012-01-17T08:18:00.000+11:002012-01-17T08:18:04.878+11:00

There are those that have argued that the role played by the ECB has created the today's scenario; Willem Buiter in October 2009 The euro has become a currency on steroids.  Its relentless nominal and real appreciation since the end of 2000 was briefly interrupted in the second half of 2008, but resumed with a vengeance during 2009.  The strength of the currency is hurting the exporting and

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-46796975899641941402012-01-17T06:46:00.005+11:002012-01-17T06:46:58.688+11:00

Rebecca Wilder Econ Monitor Ratings do matter for the EA countries. S&P’s action is a harbinger of bad economic and political things to come, not lower rates. Wolfgang Munchau FT The eurozone has fallen into a spiral of downgrades, falling economic output, rising debt and further downgrades. A recession has just started. Greece is now likely to default on most of its debts and may even have

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-66583309749042818382012-01-16T10:29:00.002+11:002012-01-16T10:29:42.581+11:00

ex Chris Joye "While S&P's assessments for each individual economy varied, there was one consistent thread in them all, and that was a judgement that there was an undue focus on fiscal austerity to the exclusion of growth-supportive measures. In essence, S&P was saying that the prevailing fiscal stance in these economies was making things worse rather than better. Interestingly enough, this also

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-6723258884489091772012-01-16T07:03:00.000+11:002012-01-16T07:03:24.160+11:00

That takes us to known unknowns, and they are consequential. It is unclear the extent to which the downgrades will alter the function of the international monetary system over time. It is also unclear how material the incremental headwinds blowing out of Europe will be for countries already facing internal fragilities. It is unclear the extent to which the downgrades will materially impact the

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-59765525257541932102012-01-16T06:50:00.000+11:002012-01-16T06:50:00.388+11:00

In truth, there is no new information in the downgrades. Do not look to S&P for contrarian thinking: the rationale for demoting France and the rest is both cogent and unsurprising. Link

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-73508217310228027742012-01-15T07:15:00.000+11:002012-01-15T07:15:40.268+11:00

Nouriel Roubini looks at signs of a growing economy and wonders why growth will be below trend. Considering the risks, and there are more than just a few, he believes that businesses, consumers, and investors have a strong incentive to wait and do little. The problem, of course, is that when enough people wait and don’t act, they heighten the very risks that they are trying to avoid.

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-41783829960566426302012-01-15T06:49:00.000+11:002012-01-15T06:49:10.680+11:00

S&P reveal their Factors Behind Our Rating Actions On Eurozone Sovereign Governments and it must not an easy read for political economists. Regarding the popular concept that government spending was entirely to blame It is our view that the currently experienced financial stress does not in the first instance result from fiscal mismanagement. In fact they argue that the problem is structural

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-88028447476496047612012-01-15T04:38:00.000+11:002012-01-15T04:38:39.017+11:00

Writing in Business Insider Henty Blodgett repeats the startling observation DAVID FRUM: It's Time We Republicans Finally Admitted That Paul Krugman Might Be Right Frum goes further Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-87941133586678544132012-01-13T18:56:00.000+11:002012-01-13T18:56:44.387+11:00

Link I don’t think civil­ian soci­ety under­stands what the mind of the war­rior is, what the cul­ture of the war­rior is. When you are cre­at­ed as a sol­dier or a war­rior, you are seg­re­gat­ed from the rest of civil­ian soci­ety, you see your­self as quite dif­fer­ent. There is the Churchill say­ing: “We sleep safe­ly in our beds because rough men are will­ing to do vio­lence …” Sol­diers

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-81860270433433657292012-01-12T06:15:00.000+11:002012-01-12T06:15:19.172+11:00

David AtkinsRomney talks about paying for health insurance as if it were the same as getting a pedicure, hiring an escort or getting the fancy wax at a car wash. It’s a luxury service being provided to him, and he doesn’t like it, he can take his business elsewhere. Romney’s is the language of a man who has never wanted for anything, never worried about where his next paycheck would come from,

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-68705095957200081182012-01-12T05:17:00.000+11:002012-01-12T05:17:54.176+11:00

Writing for Bloomberg ex IAEA operative Robert Kelley reviews events leading up to Iraq I regret now that ElBaradei did not speak out more vehemently, before the U.S. went to war, about the 1995 faked documents, additional forgeries provided to the agency in 2003 and other falsifications. A good man, he had been an international lawyer with years of experience dealing with half- truths and

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-38501194115021327742012-01-11T22:21:00.000+11:002012-01-11T22:21:09.923+11:00

This article had even the Republicans in a lather over inequality Former Senator Rick Santorum of Pennsylvania, a Republican candidate for president, warned this fall that movement “up into the middle income is actually greater, the mobility in Europe, than it is in America.” National Review, a conservative thought leader, wrote that “most Western European and English-speaking nations have higher

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-90383864833035475812012-01-11T22:06:00.001+11:002012-01-11T22:06:54.640+11:00

While I remain a euro-skeptic, I believe that the political will to advance European integration will prevail. Consequently, I attach a low probability to the currency union’s disintegration. Barring such a worst-case outcome for Europe, the odds of a hard landing in either India or China should remain low. Link

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-45434147634583398472012-01-10T19:23:00.000+11:002012-01-10T19:23:42.636+11:00

Link It’s sort of common knowledge that private investors generally lose by over-trading; invariably individuals think this only applies to other people and not to themselves, but you're just Bamboozled by Your Bias Blind Spot. The question remains, however, just how much do private investors lose by this behaviorally challenged frenzy of trading? . Figures are hard to come by, but one rule of

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-10933358158957439962012-01-09T23:01:00.000+11:002012-01-09T23:04:29.039+11:00

Michael Pettis sees trade as being critical to the euro mess The real problem with Europe is the huge divergence in costs between the core and the periphery – in the past decade costs between Germany and some of the peripheral countries have diverged by anywhere from 20% to 40%.  This divergence has made the latter uncompetitive and has resulted in the massive trade imbalances within Europe. The

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-69132549876266600102012-01-07T08:18:00.000+11:002012-01-07T08:18:23.187+11:00

David Glasner despairs at the sentiments expressed by Jeffrey Lacker it is just astonishing that, at a time when inflation is at its lowest rate in a half century, Lacker could offer as an implied rationale for his opposition to using monetary policy to reduce unemployment: “monetary policy will have difficulty making meaningful inroads into the job problem without increasing inflation,” as

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-89841192527519906462012-01-07T07:15:00.000+11:002012-01-07T07:58:20.378+11:00

Something is seriously amiss when the former prime minister, John Howard, asserts that parents should be concerned about "one-sided science" being taught in our schools. Leave aside that Howard was endorsing a new children's book on climate change by Professor Ian Plimer, a geologist whose sceptical representations of climate science for adults seem driven more by a

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-28417227510569922342012-01-06T07:59:00.001+11:002012-01-06T08:10:20.701+11:00

Our resident head doctors take a look at traders In 1985 Fischer Black published a paper entitled “Noise”.  In this he argued that much of the irrationality in financial markets could be explained by people trading without information: essentially using various spurious signals to decide when to buy or sell. In fact there’s an argument that without such people markets couldn’t work at all. The

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-12306870135484246852012-01-06T07:50:00.000+11:002012-01-06T07:50:56.986+11:00

I always had my suspicions “We establish that stock micro blog with its succinctness, high volume and real-time features do have predictive power over future stock price movements.” The research indicates that reason has no value in the market “Noise traders have the ability to affect stock prices whenever information can be shared among investors and spread quickly through web channels …

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-59000467490632083222012-01-06T00:05:00.000+11:002012-01-06T00:05:28.315+11:00

US Federal Reserve Release Date: December 13, 2011  For immediate release  Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated. Household

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-18861480565547523902012-01-04T19:53:00.000+11:002012-01-04T19:53:44.613+11:00

Martin Wolf on an austere 2012 the fragility of the eurozone is far greater. The Organisation for Economic Co-operation and Development forecasts a reduction in the underlying fiscal deficit of the eurozone by 1.4 per cent of GDP between 2011 and 2012, against just 0.2 per cent of GDP in the US. Yet the big danger for the eurozone’s weaker economies is that public and private sectors will seek

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-50968273836327895782012-01-04T18:32:00.000+11:002012-01-04T18:32:04.690+11:00

Available from Amazon in the very near future Book Description Publication Date: April 2, 2012 Over the next 25 years global economic growth will come overwhelmingly from previously poor countries like China, India, and Brazil. In rich countries this "rise of the rest" scenario strikes fear into the many observers who see as its primary consequence a dangerous combination of

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-9054881245547842212012-01-03T18:15:00.002+11:002012-01-03T18:15:34.590+11:00

Here is Rupert all a twitter over Rick Santorum @rupertmurdoch Rupert Murdoch Can't resist this tweet, but all Iowans think about Rick Santorum. Only candidate with genuine big vision for country.  Santorum has had a vision and it's a big one SANTORUM: “One of the things I will talk about, that no president has talked

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-89605049401589863142012-01-03T09:33:00.000+11:002012-01-03T09:33:02.376+11:00

Stephen Koukoulas wonders who if anyone checks the facts in the editorial at the Australian Australia is part way through the most rapid fiscal consolidation ever recorded. For The Australian to suggest that Australia has "loose fiscal policy" is clearly not supported by the facts. The general call for further policy reform while entirely valid, looses something with emotive comments on

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-2315623415080357342012-01-03T06:02:00.000+11:002012-01-03T06:28:17.261+11:00

Matt Yglesias ponders on the efficiency of markets Still, as a point about language and values I would say that an "efficient" capital market would not be prone to these constant bouts of excessive optimism and panic. This doesn't look like an especially efficient way to conduct the socially important function of pricing and allocating capital.

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-59582785842080564452012-01-02T22:54:00.001+11:002012-01-02T22:54:35.139+11:00

Link here New to Twitter: the tweet Murdoch took down ... fast January 2, 2012 - 3:31PM "Either @rupertmurdoch is genuinely now on Twitter, or some disgruntled ex-NOTW journo just won the hacking Olympics." Less than two days after joining Twitter, media mogul Rupert Murdoch appears to have had his first brush with tweeting-before-thinking, after suggesting that the British have too

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-10464620401146576352012-01-02T15:34:00.001+11:002012-01-02T15:37:14.788+11:00

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments. This is, however, a really bad analogy in at least two ways. First, families have to pay back their debt. Governments don’t — all they need to do is

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-7254338281599717632012-01-02T07:37:00.000+11:002012-01-02T07:37:14.039+11:00

I was going to post on forecasting in general and the success of previous predictions somehow validating those made for 2012...but I realised that I would then be making my own predictions on the success or failure of others predictions and end up like Rupert Murdoch, being consumed by a monster of my own creation. Here is "reformed broker" Josh Brown who twits his wrap up of 2011 tweets.. In

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-2568969450224430042011-12-29T19:43:00.001+11:002011-12-29T20:51:38.956+11:00

Richard Koo (Nomura Research Institute, Tokyo) warns about misdiagnosing the complaint and prescribing an inappropriate therapy. H/T Bill Mitchell It is laudable for policy makers to shun fiscal profligacy and aim for self-reliance on the part of the private sector. But every several decades, the private sector loses its self- control in a bubble and sustains heavy financial injuries when the

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-14716244534620047032011-12-27T06:56:00.001+11:002011-12-27T07:01:57.315+11:00

The idea that markets are somehow forward looking needs to be investigated, This idea that people change their behaviour when their situation changes is known as reflexivity and because stock markets are really only the sum of people’s behaviour if that behaviour changes so does the markets. This leads to feedback, because as markets adapt to new behaviour so they present participants with a new

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-17500322551409365412011-12-24T08:05:00.001+11:002011-12-24T08:05:53.612+11:00

For those that like to stay on track, US rail data An overall increase in traffic with a shift to commodities, draw your own conclusions, Fourteen of the 20 carload commodity groups posted increases compared with the same week in 2010, including: metallic ores, up 57.1 percent; nonmetallic minerals, up 38 percent, and crushed stone, sand and gravel, up 29 percent. The groups showing a decrease

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-14995417720392411332011-12-24T07:52:00.001+11:002011-12-24T07:55:49.722+11:00

Making sense of it is another matter. http://dallasfed.org/data/data/us-charts.pdf

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-20387605819840277182011-12-23T18:49:00.000+11:002011-12-23T20:11:42.988+11:00

In 2010 the IMF admitted that the 2008 crisis has exposed flaws in the precrisis policy framework, forced policymakers to explore new policies during the crisis, and forces us to think about the architecture of postcrisis macroeconomic policy. Sounded like an admission of guilt, sort of. It is worth remembering that the IMF's primary purpose is to ensure the stability of the international

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-30568704711466711822011-12-22T08:46:00.001+11:002011-12-22T08:46:24.907+11:00

The walkout farce by the Republicans even had the WSJ in dismay GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-75033309888690812732011-12-22T07:42:00.000+11:002011-12-22T07:59:58.764+11:00

JPMorgan head honcho Jamie Dimon complained about the bad rap bankers are currently copping “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” Joshua Brown, a NYC investment advisor, has offered to help Mr Dimon "understand it" Dear Jamie Dimon,I hope this note finds you well.I am writing to profess my utter disbelief at how little

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-51184681345575717162011-12-22T06:52:00.000+11:002011-12-22T07:28:50.609+11:00

According to the expert analysis The initial years of Ireland’s recovery rely greatly on net exports, but threats to global growth have escalated, especially in relation to the unresolved crisis in the euro area. These "unresolved crises" include, according to ECB president Draghi, anunavoidable short-term contraction The IMF recommend a shift from low productivity sectors, such as construction,

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-53174980794504390022011-12-21T06:32:00.002+11:002011-12-21T06:48:34.336+11:00

Following the Vickers' banking report and suggestions from the Independent Commission on Banking the the UK chancellor of the exchequer George Osbourne announced reforms to the banking industry "Our objective is clear. We want to separate high street banking from investment banking, to protect the British economy, protect British taxpayers and make sure that nothing is too big too fail. Already

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-80474324058679069942011-12-21T06:16:00.000+11:002011-12-21T06:27:52.206+11:00

Various billionaires collectively whinge in this piece from Bloomberg. Well, almost all of them "Rich businesspeople like me don’t create jobs,” Nick Hanauer, co-founder of aQuantive Inc., an online advertising company he sold to Microsoft Corp. for about $6 billion, wrote in a Dec. 1 Bloomberg View article. “Let’s tax the rich like we once did and use that money to spur growth.” Apart from the

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-69531358982838092072011-12-20T17:01:00.002+11:002011-12-20T17:01:34.884+11:00

Eureka alert Chestnut Hill, MA – Armed with insider knowledge, managers of share-restricted hedge funds sell off their own holdings ahead of their investors in order to avoid low returns produced by an outflow of shareholder dollars, according to a new study by researchers from Boston College and EDHEC Business School in France. ..

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-89764162132362898872011-12-20T08:23:00.000+11:002011-12-20T08:23:52.355+11:00

Mark Boslough reports on the Third Santa Fe Conference on Global and Regional Climate Change After three years of convening climate-related sessions at AGU, I have yet to receive an abstract that argues against anthropogenic global warming. He spoke with "skeptic" Christopher Monckton He has no understanding of science or the scientific method, and when I asked him about scientific prediction

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-66242547610942867492011-12-20T06:31:00.001+11:002011-12-20T07:31:00.032+11:00

 The IMF know what to do in a crisis expansionary fiscal policy seems particularly effective in shortening recessions associated with financial crises and boosting recoveries. They have already hit the panic button BRUSSELS — The International Monetary Fund, known throughout its history for urging governments to slash their budgets, is now worried that a global round of austerity may trigger a

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-11713335807345703322011-12-19T17:11:00.000+11:002011-12-19T17:11:37.014+11:00

Václav Havel on the now dead Kim Jong-il Today, the testimony of thousands of North Korean refugees, who have survived the miserable journey through Communist China to free South Korea, tell of the criminal nature of the North Korean dictatorship. Accounts of repression are supported and verified by modern satellite images, and clearly illustrate that North Korea has a functioning system

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-84722352510899353032011-12-19T07:52:00.000+11:002011-12-19T07:52:27.528+11:00

An extreme state of inequality is slavery; this paper from South Africa describes the consequences to the economy of such inequality The use of slaves as a substitute for wage labour or other capital investments allowed farmers to prosper, but it also resulted in severe inequality. It was this high inequality that drove the growth- debilitating institutions posited by Engerman and Sokoloff (2000)

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-89235522717088696722011-12-19T06:30:00.001+11:002011-12-19T06:41:34.865+11:00

An interview with Amir Sufi (University of Chicago Booth School of Business) and Atif Mian (University of California, Berkeley)The distribution of net wealth matters a lot. Let’s suppose there’s $100 of wealth in the economy and there’s a hundred people. If everybody had $1 of wealth, and then there’s a massive drop in house prices, my argument is that this recession wouldn’t have been nearly as

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-82704181676759606562011-12-17T09:42:00.002+11:002011-12-17T09:42:41.660+11:00

In response to the announcement and subsequent market downgrade of JB Hi-fi Roger Montgomery posted this response, including the following the only thing that was going for JB Hi-Fi was its discount to intrinsic value.  Many investors believe that a stock I mention is below intrinsic value is a “darling’ of mine.  It isn’t.   A company must meet all of our criteria and it will only be held for

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-38290397203475003182011-12-16T12:59:00.000+11:002011-12-16T13:23:26.968+11:00

In his article excoriating fund managers Peter Martin quoted Daniel Kahneman Kahneman won the 2002 economics Nobel for groundbreaking research into the way we make decisions. He saves a special place in his new book Thinking, Fast and Slow for “stock pickers”, who he says attempt to make much of their money buying and selling from each other. “Most of the buyers and sellers know that they

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-24419122074757952412011-12-16T08:47:00.000+11:002011-12-16T08:47:39.200+11:00

Editorial in the Australian Iraq as a cradle of democracy

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-39828331248532097112011-12-16T08:14:00.001+11:002011-12-16T08:14:34.449+11:00

Presidential hopeful Newt Gingrich signed the National Organization for Marriage (NOM) pledge committing himself to play a leadership role as president to preserve marriage as the union of one man and one woman This action promoted the following billboard from dating agency Ashley Madison (motto: life is short have an affair)   At first glance, seems like a slam job. At

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-17341400156131172752011-12-14T17:33:00.000+11:002011-12-14T17:33:18.930+11:00

That once great paper, the Australian, struggles to invent more news JULIA Gillard has refused to say whether or not she likes Kevin Rudd

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-14638168779186370792011-12-14T17:24:00.000+11:002011-12-14T17:24:14.171+11:00

I remain confident that Australia, with its strong government finances, resilient banking system, relatively low exposures to the troubled countries and strong links to the dynamic Asian region, is well placed to deal with events that may unfold. Link here

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-75722793727237691202011-12-14T12:53:00.001+11:002011-12-14T13:12:04.061+11:00

Back in November Peter Martin wrote Super is a con, perpetrated by people who con themselves In particular he singled out the managers Rewarded with generous fees and a leglislatively-directed (increasing) flow of our money into their hands regardless of performance it would be reasonable to imagine fund managers had something special. They do. Nobel Prize winning psychologist Daniel Kahneman

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-5764332920610298512011-12-14T07:56:00.001+11:002011-12-14T08:12:15.620+11:00

Link here Europe Given the delays in crafting a Euro-wide credible policy response, and the fiscal contractions now underway in many Euro-zone members, Europe will almost certainly return to recession next year, with the potential for it to be deep and drawn out. USA the US economy is now on the path to a recovery — albeit a slow, and tentative one. However, the US’ public balance sheet

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-43016033527427060372011-12-14T07:37:00.000+11:002011-12-14T07:48:59.737+11:00

Link here Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. The fear of inflation

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-71214500239307804202011-12-13T16:16:00.000+11:002011-12-13T16:31:51.416+11:00

The UK’s Economic Research Council invited me to represent LSE in a panel discussion on near-term prospects for the UK economy. Lord Norman Lamont, 1990-1993 Chancellor of the Exchequer, chaired. The other panelists were Prof John Muellbauer from Oxford and Prof Hashem Pesaran from Cambridge. The venue? The Royal Institution of Great Britain’s Faraday Lecture Theatre, where in 1825 the first of

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-20092710811193537992011-12-13T08:41:00.001+11:002011-12-13T08:41:37.725+11:00

Another presidential hopeful finds out just how hard it is to use discrimination as a policy toolMitt Romney found out today that it's a little bit more difficult to tell a gay person you believe in repealing their rights when you're sitting with them face-to-face, and that person happens to be a veteran. It's relatively easy to give interviews and send out mailers telling people you don't

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-87819225735755099942011-12-11T08:51:00.000+11:002011-12-11T09:13:08.711+11:00

Conservative presidential hopeful Rick Perry was keen to play the wedge game Promoting special rights for gays in foreign countries is not in America’s interests and not worth a dime of taxpayers’ money...President Obama has again mistaken America’s tolerance for different lifestyles with an endorsement of those lifestyles. I will not make that mistake.” In an ad he expands on his zero

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-25704916704802024402011-12-08T22:57:00.001+11:002011-12-08T22:57:21.077+11:00

It appears likely that official statistics overstate the financial sector’s contribution to GDP, and we now have evidence that this is indeed the case. Boston Fed

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-10883648300162347442011-12-08T09:15:00.001+11:002011-12-08T09:37:59.602+11:00

NYT on the first campaign speech Mr. Obama correctly framed the choice for voters: The country can return to policies that stacked the deck for the wealthy and left everyone else to fend for themselves, creating what he called “you’re on your own economics.” Or elected officials can step in to keep competition fair and ensure the government has enough money to protect the vulnerable and invest in

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-47947333298875739942011-12-08T09:05:00.001+11:002011-12-08T09:08:30.584+11:00

There has been plenty of anguish expressed by the apparent failure of the banks to pass on the reduced RBA lending rate. The Kouk was unimpressed Frankly, it matters little if banks do or don't pass it on because it will be the behaviour of the economy which is determined by much much more than interest rates and bank margins that will determine future monetary policy moves. If banks don't pass

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-40120469340998287212011-12-07T19:47:00.001+11:002011-12-07T19:52:21.868+11:00

After losing 9% I guess things could be worse (there's still plenty of opportunity to do so)Some fund managers privately confess that they wish they could move entirely into cash and sit out the market turmoil. But they feel pressure to continue trading to justify the steep fees they charge for managing investors’ assets.

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-37407971115366006222011-12-07T11:46:00.001+11:002011-12-07T11:51:57.523+11:00

Physicist Mark Buchanan looks at research conducted by IBM where traders pitted their skills against algorithms (The robots always out-performed the humans) and comments there's really no reason to think the markets should become more mechanical as they become more algorithmic. They've probably been quite mechanical all along, and algorithmic too -- it's just that non-rational zero intelligence

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-67326709204155172542011-12-07T09:46:00.001+11:002011-12-07T09:48:29.752+11:00

..say the very rich. Growing numbers of millionaires and billionaires have gone on record as favoring higher taxes on the rich, because they can afford them and think they’re necessary to deal with our nation’s fiscal problem, which is largely due to historically low revenues. These include Warren Buffett, Carlos Slim, Mark Cuban and Nick Hanauer, among others. The group Patriotic

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-50188094831207535022011-12-07T09:33:00.001+11:002011-12-07T09:40:17.034+11:00

..they have more money. Speculation abounds on the size of the now very ex Reuter Thompson chief 'golden handshake' While the group would not reveal the details of any payoff, it confirmed its outlook for the full year 2011 yesterday adding that there would be ‘one-time charges’ related to the ‘restructuring’. He took home £6m in pay and bonuses last year. Under the terms of a historic service

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-23751223029342032092011-12-06T06:28:00.001+11:002011-12-06T10:07:45.552+11:00

Much has been made on the current credit crisis - that it is a failure of capitalism/socialism, the welfare state/american dream, fiat money, globalisation, privatisation, corporatisation, democratisation, taxation - on it goes. Joseph Stiglitz reviews past and present global fiscal and monetary crises for a common thread and found that financial sectors behaved badly and failed to assess

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-15077863770788715152011-12-05T17:05:00.001+11:002011-12-05T17:09:08.646+11:00

Why the Right Keeps Winning Left Behind | Peter Hartcher | The MonthlyIt was Carnegie, son of the arch-establishment businessman Sir Rod Carnegie, who emerged as the media star of the Gillard government’s tax forum in October with his call for the wealthiest 15% of income earners to pay 15% more in income tax. “What I am saying is that the economic rents of capitalism are disproportionately

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-32668694534129733022011-12-05T09:47:00.001+11:002011-12-05T09:51:10.508+11:00

Link Pursuit of the Great Australian Dream -- ownership of a stand-alone house on a quarter-acre piece of land -- has seen households double their debt load as a proportion of disposable income in the past 15 years to 154 percent in the quarter ended June 30, according to central bank figures. That’s higher than the 133 percent ratio Americans accumulated at the height of the U.S. sub

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-5647216729239536792011-12-05T08:15:00.001+11:002011-12-05T09:41:20.425+11:00

Paul Krugman represents IMF data pictorially to demonstrate debt/GDP ratio for the UK While it is not unusual for a government to run up debt more recently government debt had become a political issue, in 2008 the then shadow chancellor George Osborne warned of excessive debt "We are in danger, if the government is not careful, of having a proper sterling collapse, a run on the pound." This

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-50622887037580110752011-12-04T08:33:00.001+11:002011-12-04T08:33:22.375+11:00

http://mpegmedia.abc.net.au/rn/podcast/2011/11/bdn_20111130_1525.mp3

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-28967069317753313252011-12-03T07:36:00.002+11:002011-12-03T07:36:44.188+11:00

Polish Foreign Minister Radoslaw Sikorski resorted to dramatic rhetoric on Monday evening when he appealed to Germany to avert the collapse of the euro zone. "There is nothing inevitable about Europe's decline. But we are standing on the edge of a precipice. This is the scariest moment of my ministerial life but therefore also the most sublime," Radoslaw Sikorski said in a speech in Berlin on

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-49598691626128556492011-12-01T16:38:00.001+11:002011-12-01T16:53:17.481+11:00

Jeremy Clarkson on striking health care workers "I'd have them all shot. I would take them outside and execute them in front of their families. To some it comes as no surprise that Clarkson was quoted in serial killer Breivik 1,500 page 'manifesto' he also quoted both Melanie Phillips of the Daily Mail (often and at length) and from Jeremy Clarkson's Sunday Times column. Breivik was recently

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-51311707275441544852011-12-01T09:45:00.000+11:002011-12-01T09:46:05.292+11:00

Mr Hockey should stick to opening fetes instead of tempting fate THE federal Coalition's economic credibility has been dealt a blow after a tribunal found that two accountants who costed its 2010 election policies had breached professional standardsThe ruling is an embarrassment to shadow treasurer Joe Hockey, who wrongly insisted during the campaign that the accountants' policy costings had been

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-88670243029956538962011-12-01T09:01:00.001+11:002011-12-01T09:14:36.892+11:00

Mark Thoma did a Q&A on the latest development note that while this move can ease financial market conditions, it does nothing to address the underlying problems creating those conditions. So this is no substitute for the difficult decisions that Europe must make to overcome its troubles. The Kouk is similarly unmoved This may fix the global ills but it seems more likely that the move, while a

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-39280096503630205322011-12-01T07:46:00.000+11:002011-12-01T07:46:42.533+11:00

As explained by the FEDWhat is the purpose of the foreign currency liquidity swap lines?  The foreign currency liquidity swap lines are designed to provide the Federal Reserve with the capacity to offer liquidity in foreign currencies to U.S. financial institutions should the Federal Reserve judge that such actions are appropriate.

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-75075391486949759782011-11-30T22:42:00.002+11:002011-11-30T22:42:57.241+11:00

FT's Neil Hume has some GRIM newsMorgan Stanley’s Graham Secker makes some interesting observations in his 2012 outlook report. Chief among them is that the investment framework of the last 25 years is increasingly irrelevant and that Japan offers the best guide to what might happen in the equity market over the next decade. And that’s important because a lot of people are still living in the

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-78912829076511486902011-11-30T16:38:00.001+11:002011-11-30T16:55:52.080+11:00

Chris Joye shows us how, despite the much feared resources rent tax, Capex spending is blowing out in Australia (ex NAB) RBA shows that housing has the lowest growth in 34 years. RBA maintains that Capex is driving inflation and will use interest rates as a tool to slow down overall spending Historically it is unlikely that the RBA will come to the aid of the consumer who appears

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-75811483264971920252011-11-30T07:46:00.001+11:002011-11-30T07:52:59.847+11:00

Stephen Koukoulas (worked in Treasury, was Chief Economist (Australia) at Citibank, was advisor to the Prime Minister, wrote for the Australian Financial Review and led the global research team for TD Securities from London) casts his eye over the midterm budget -Total government receipts (tax, dividends, fees and the like) was 21.6% of GDP in 2010-11, the lowest level since 1973-74 when Frank

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-71860346866274180572011-11-30T05:49:00.000+11:002011-11-30T05:49:10.502+11:00

The Economist looks at how IT has turbo charged financial markets In theory all this activity ought to lead to more accurate pricing of stocks and more efficient allocation of capital. In practice there is a lot of tail-chasing going on. That has led to calls for a tax on financial transactions, the Tobin tax, which advocates argue would be a painless way of boosting government finances

rognoreply@blogger.comtag:blogger.com,1999:blog-8745000821466250669.post-84583170419265892242011-11-28T19:03:00.000+11:002011-11-28T19:03:08.129+11:00

Mr Denmore casts a weary over the latest Kyle Sandilands tantrum If you want further evidence of the desperation of the mainstream media money mandarins for manufactured  controversy, look at the Ten Network's recent hiring for $NZ1 million of "controversial" Kiwi breakfast broadcaster Paul Henry, whose claim to fame was being sacked by NZ network TV3 for wetting himself on air about the name of

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