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Wednesday, March 25, 2015

Some noontime noos


Here's some news from IKN's favourite evarrr blog:


Bespoke - big fat 0 for CPI. Shit or get off the pot, guys: either core is important or it's not.


Medium - shut up about bubbles in the bond market, you know-nothing white-ass honky crackers. Here is the central quote that each of you should burn onto your forearm with a soldering iron:
But does holding bonds entail accepting large long- and fat-tailed risks? Only if you must sell your bonds in the future. If you have the option to hold them to maturity, your risks are bounded and very small. What you are complaining about is not risk, but rather lousy expected return. And even if you cannot hold them to maturity, the fact that others can hold them to maturity provides a pool of demand that limits how far bond prices can crash.
To sum: a bond guarantees your capital and pays you a coupon. It is not an equity.


Brad Delong - the assumptions behind the Fed's 2% inflation target are erroneous. Very good point - always check under the hood to see why anything is the way it is. Um, Brad... should you perhaps email your post to Janet Yellen? Y'know, in case she's a dumbass who doesn't know anything about inflation targets?


Bonddad - has the EU finally turned the corner? If so, dude, I'm sure the Germans will find a way to fuck it up for everyone else. Oh and quote:
Although recent news releases point to better growth in the year ahead, we still only have a few months of positive data, which isn’t enough on which to base a long-term projection. But, there has been sufficient positive news to state that a real turnaround may be in the works.
Or, Hale, whatever small turnaround happened was due to the USD-EUR move, which is probably over by now. Remember, there's never been an EU stock worth owning over the past twenty years save Nokia for a while.


FT Alphaville - this is nuts, Chinese equities edition. If you're saying it's nuts, Keohane, then it's not a bubble. Quote:
The reality is that there’s simply quite a bit of money in China and a limited number of places for it to go. Particularly with the property market suffering. In fact, while the stock surge is a product of a very mechanic process, there is an argument that the Chinese government potentially sees (saw?) the stock market as a way to replace the wealth being lost in the property market.
Or, it sees capital invested in business equity as being much more economically productive than capital invested in real estate. Did you think of that? Meanwhile, have you checked China's equity P/Es to see if they're really "nuts"?


IKN - Iwnattos is the most amazing person ever, PS buy Dalradian. Quote:
After following the dude's blog for many moons I can say that some of his stuff I agree with, some leaves me agnostic, other times I think he's spouting pure crap and gets me wondering what he'd been smoking just before hitting send. But he never fails to get me thinking, which is the number one thing I want from any regular reading material. His viewpoint of the market isn't just different from mine, it's different from just about anyone I've come across and that's the reason above all others that he's nothing short of must-read material in my working life. You can read all the bias-confirming cookie-cutter market prose and commentary that you want, I'll go with the original brainwork every time no matter if I agree with the specific daily content on show or not.
Since when am I ever full of crap? You're full of crap, Mickey.


Polemic's Pains - yet another goddamn stream of consciousness. Haven't managed to make it through yet, but maybe it's vaguely useful to someone.

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