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Financial Market Outlook for 2013
Goldman Sachs CEO Lloyd Blankfein has just bought a second home, this one in the Hamptons, the fabled playground for New York’s bankers and hedge fund managers. It was on the market for $33 million , and its sale in December contributed to a splurge of estate buying last year that saw record prices being set for country manors in the Hamptons. The luxury segment of the real estate market in the US had a very good year, and not just in New York. California mansions which would have sat idle two or three years ago were being snapped up in weeks, with multiple bidders pushing offers up well beyond the asking price. Nor were expensive properties subject to a buyers’ frenzy. All throughout the US, once-devastated real estate markets saw a remarkable recovery in sales volume.
dShort
Gauging Investor Sentiment with Twitter: New Update Apr 01, 2013 Blair Jensen The Downside Hedge Twitter sentiment indicator for the S&P 500 Index (SPX) is starting to show some strength but without much enthusiasm. Although daily sentiment is painting higher lows and has a good uptrend line, it isn’t acting like it should when price breaks out to new highs. Thursday’s move came with a higher intensity of tweets (volume and scores), but the aggregated score for the day was only +10. More... Two Measures of Inflation: New Update Mar 31, 2013 Doug ShortInsights and Research
Earlier in the week I outlined the relationship between gold and collateralized liquidity in the banking system. In a second post, I put together the pieces of what may currently be driving growing illiquidity, with particularly emphasis on Europe. This post intends on adding detail and evidence to this cumulative analysis. First, we need to .. read more In yesterday’s post on the price of gold and its direct relation to collateralized liquidity I linked the shortage of collateral to QE.
The new deal on Cyprus does not only have the right intentions, but averts the two major flaws of the previous deal : It fully protects insured deposits up to the €100,000 amount guaranteed by deposit insurance in all banks, and It bails-in all bondholders and shareholders. The deal has other remarkable elements as well: Marfin Laiki Popular Bank (the second biggest bank accounting for about one-third of banking assets in Cyprus), the most troubled bank, will be closed down immediately with full contribution of shareholders, bondholders and uninsured depositors.
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ppola Comment: A central bank crisis
Vox has an excellent article by the LSE's De Grauwe about the austerity measures in the Eurozone periphery that were imposed by policymakers in response to a buyer's strike among sovereign bond investors. As yields soared, particularly in Greece, there was a growing belief that the cause was high levels of public debt and structural inefficiencies, and that to bring yields down it was necessary to slash public borrowing and make structural reforms. There was also concern about the lack of competitiveness of periphery economies and their high unit labour costs: had they had their own currencies, devaluation would have been the corrective for this problem, but because of the Euro this was not possible and the only solution was to force down wages.
Visited with my good friend Mike Iscovitz at Fox26 yesterday to discuss investing in the markets, what is happening with Cyprus and what investors should be looking at in the months ahead. It is always interesting that comments such as "you should be cautious here due to the extreme overbought condition of the market" is somehow misconstrued as meaning be "all in cash." That is not the case at all. The goal for investors is to "buy low and sell high."
Economics
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Teach/Me Data Analysis
Scaling of data may be useful and/or necessary under certain circumstances (e.g. when variables span different ranges). There are several different versions of scaling, the most important of which are listed below. Scaling procedures may be applied to the full data matrix, or to parts of the matrix only (e.g. columnwise). Range Scaling Range scaling transforms the values to another range which usually includes both a shift and a change of the scale (magnification, or reduction). The data samples are transformed according to the following equation:
Research | Artemis Capital Management
The following is an excerpt from the research article “Volatility of an Impossible Object: Risk, Fear, and Safety in Games of Perception” from Artemis Capital Management LLC. Click for PDF Download The global financial markets walk on the razors edge of empiricism and what you see is not what you think, and what you think may very well be impossible anyway.
Taming the Five Dragons? China Consolidates its Maritime Law Enforcement Agencies March 28, 2013 China's new leadership recently announced its intention to reorganize its separate maritime law enforcement agencies under one governing body. State Council Secretary General Ma Kai announced the changes on March 10 at the 12th...
JamesTown Foundation
Bernanke Breaks Down: "This Whole Thing Is a Kleptocracy" April 1, 2013 Our April Fool's wish: someone in the inner circle of power would finally tell the truth. In an unprecedented abandonment of his carefully scripted responses to Congressional questions, Federal Reserve Chairman Ben Bernanke unleashed what appeared to be a heart-felt and spontaneous disavowal of the financial and political systems of the United States. Asked a question about the wealth effect, Bernanke paused and said, "The wealth effect.
Weblog and Essays
Cyprus – Greece or Iceland? Obvious It is a public holiday in Australia today like everywhere. So this is a relatively short blog.
Bill Mitchell Blog
oisington Investment Management has been conducting research into estimating the risk premium of stocks over long term Treasury rates. The results of this research were published in The Journal of Portfolio Management (Winter 2003 vol. 29, #2*). The study observes that most research has overstated the advantages of stocks over bonds.