Monday, December 23, 2013

some pre-holiday news

And here's probably the last bunch of interesting news that I'll be coming across til next year.

Don't worry, I'm sure I'll have other things to foam at the mouth about over the next few days.

Philosophical Economics - the single greatest predictor of future stock market returns. Wow. This guy boils it all down to supply and demand. This is very freaky. Better wear a helmet when reading it, cos I don't want it to make a mess when it blows your mind.

Reformed Borker (Bork Bork Bork!) - what could go very right in Europe? Dude, you don't have a clue about Europe. The Germans are always going to be sabotaging it. It's their race's moral imperative. There will be no stimulus, there will be no sensible banking union.

CNBC - cut your EM exposure by a third. Quote:
Goldman Sachs used the 59-page report to argue that growth in emerging markets from 2003 to 2007 was a result of specific economic circumstances that aren't likely to be repeated; the political and economic reforms needed to improve growth are too painful to undertake.

There has also been a "seismic shift" in investor sentiment on emerging markets for the worse. "The returns were not as attractive as expected, the economic growth rates were not as sustainable as imagined, and the countries were not as stable as believed," the report said.

Krugman - bits and barbarism. Strangely, he thinks gold is as worthless as Bitcoin. He starts with Keynes' story about burying money in disused coal mines so businesses could dig it up again, and then says this:
Clever stuff — but Keynes wasn’t finished. He went on to point out that the real-life activity of gold mining was a lot like his thought experiment. Gold miners were, after all, going to great lengths to dig cash out of the ground, even though unlimited amounts of cash could be created at essentially no cost with the printing press. And no sooner was gold dug up than much of it was buried again, in places like the gold vault of the Federal Reserve Bank of New York, where hundreds of thousands of gold bars sit, doing nothing in particular.
Because... um... one point two billion Indians have no reason to own gold? Because Paul's wife has a pull-tab from a beercan for a wedding ring? Gold does nothing, Perfesser? What is the point of a reserve? Gold has no insurance value?

You know I'm not an anti-Krugmanite at all. But god, he's really talking out his ass here.

Safe Haven - the time value of gold. I dunno, this guys sounds like a goldbug, but the article seemed very interesting when I read it.


  1. The "Single Greatest..." link is very interesting (and long: read once, will read it over again later) but ultimately, it's a backwards-looking relationship. The key phrase, or at least the one that jumped out at me in the conclusion setcion, is "Investors have done their jobs properly, leaving no easy arbitrages to exploit." There you go, it's not really a source of potential alpha.

    1. It's a source of alpha, sure. You need to allocate before the crowd to win.