"How can the world’s
second-largest economy function at all? Enter shadow bankers - broadly defined as lenders outside the formal banking system. They
include mom-and-pop lending operations, companies lending excess cash to each
other, pawnshops, and recently tech companies running money market funds.
Unlike shadow banking in the West, shadow banking in China is a necessity,
helping build factories, mines, infrastructure projects, and other activities,
and creating jobs."
Pokazywanie postów oznaczonych etykietą CFA Institute. Pokaż wszystkie posty
Pokazywanie postów oznaczonych etykietą CFA Institute. Pokaż wszystkie posty
The Financial Economists Roundtable Weighs in on Financial Transaction Taxes
"Many concerns motivate
these proposed taxes. Some people want the financial sector to pay for the
tremendous economic costs that they believe it imposed on everyone in the
global financial crisis of 2008. Others believe that the financial sector
should bear its “fair share” of taxes; such beliefs are particularly strong in
countries where financial transactions are exempt from value-added taxes and
therefore “escape” taxation. Still others simply want new revenues to support
additional government spending, reduce the deficit, or provide tax relief to
other sectors. Finally, some commentators believe that too much financial
activity focuses on short-term rather than long-term goals. They believe that a
transaction tax would force investors and businesses to focus more on long-term
values and less on short-term activities that they perceive to be wasteful."
"Not all taxes are
economically sensible, regardless of how desirable they may appear. A
transaction tax imposed at any economically meaningful rate by only some
countries would cause many transactions to be shifted to other countries,
resulting in far less revenue than a simple static analysis might suggest.
Furthermore, to the extent that a financial transaction tax would generate
substantial revenue, the tax and the associated reduction in liquidity would
lower asset prices. Lower asset prices would cause decreased corporate
investment, resulting in less capital per worker in the long run and thus lower
wages throughout the economy. Therefore, governments should be extremely wary
of introducing or increasing financial transaction taxes."
Top 20 Films about Finance: From Crisis to Con Men
Poniżej link do subiektywnego
zestawienia 20 najlepszych filmów dotyczących finansów. Między innymi: klasyka
w postaci Wall Street (1987), dokumenty lub firmy oparte na
faktach.
Getting Schooled in Risk: The Lessons of Poker
"Getting rich slowly in
the markets is simple. (...)
I said it’s simple, not easy. Winning the gold medal in the 100 meters or the marathon is simple: Just run faster than everyone else. In hindsight, superior investing strategies look simple. But they require preparation, discipline, and the ability to suffer pain in the short run. In fact, they work well in the long run precisely because they can hurt a great deal in the short run, so they are very hard to apply consistently.
I’m going to talk about poker as an analogy for risk in the market and about “good” risks versus “bad” risks.
Poker is a perfect laboratory of human risk taking. It teaches many lessons directly applicable to investing. Both are games of analysis and decision making under uncertainty, psychology and human emotion, and “luck,” which in the long run is variance — the winding road to the inevitable fate your skill, preparation, and mental toughness, or lack thereof, have destined you to."
I said it’s simple, not easy. Winning the gold medal in the 100 meters or the marathon is simple: Just run faster than everyone else. In hindsight, superior investing strategies look simple. But they require preparation, discipline, and the ability to suffer pain in the short run. In fact, they work well in the long run precisely because they can hurt a great deal in the short run, so they are very hard to apply consistently.
I’m going to talk about poker as an analogy for risk in the market and about “good” risks versus “bad” risks.
Poker is a perfect laboratory of human risk taking. It teaches many lessons directly applicable to investing. Both are games of analysis and decision making under uncertainty, psychology and human emotion, and “luck,” which in the long run is variance — the winding road to the inevitable fate your skill, preparation, and mental toughness, or lack thereof, have destined you to."
What Buffett Believes But Cannot Prove
"Most people think
Buffett is a perpetual bull on the stock market. This is not true. There have
been many occasions when he has been cautious about the stock market and even
times when he has forewarned of impending doom — 1969 and 1999. However, Buffett
is unabashedly bullish on the United States. He has never been shy to express
his belief that the United States offers tremendous opportunities to anyone who
is willing to work hard. He is upbeat, cheerful, and optimistic about life in
general.
Conventional wisdom holds that it is the young who are the eternal optimists and that as you get older, pessimism tilts the scale. But Buffett appears to be the exception to this maxim."
Conventional wisdom holds that it is the young who are the eternal optimists and that as you get older, pessimism tilts the scale. But Buffett appears to be the exception to this maxim."
JPMorgan Chase and the London Whale: Understanding the Hedge That Wasn’t
Gdyby ktoś chciał sobie przypomnieć za
co JP Morgan dostał teraz prawie miliard dolarów kary.
"The London Whale is a trader by the name of Bruno Iksil, who earned his nickname by betting huge sums of money in the derivatives markets from his home base in London. As one hedge fund manager recently quipped, “Bernanke is to Treasuries what the London Whale is to derivatives.” But to point out that the London Whale jumped the shark with these trades would be an understatement (he is now expected to leave the bank).
Let’s digest what we know thus far about the trade. Iksil had three discrete components to his trading strategy, which I will call packages A, B, and C as follows:
(A) JPM purchased credit default swaps (CDS) on high-yield bonds in which JPM would make money if high-yield bonds went down.
(B) JPM wrote substantial amounts of CDX.NA.IG.9, which is a basket of CDS on investment-grade bonds from 121 different issuers.
(C) JPM bought CDS on investment-grade bonds."
Currency Wars: “The Fed is Playing with a Nuclear Reactor”
"(...) we are
well into the third currency war of the past 100 years. President Obama fired
the first salvo during his 2010 State of the Union address, when he announced
the launch of the National Export Initiative and said the goal was to double
exports over the next five years. The easiest way to do that, of course, is to
cheapen the US dollar. But that is only part of the explanation, Rickards said.
To really understand
what is going on, you have to start with the quantity theory of money, or MV =
PQ. (Quick refresher: PQ = nominal GDP, Q = real GDP, P = inflation/deflation,
M = money supply, and V = velocity of money.) The issue here is that the theory
doesn’t hold up in the real world because velocity — the number of times money
changes hands, or turns over — is not constant. ”Velocity is collapsing,”
Rickards said. “You can think of monetary policy as a desperate race between
increasing money supply and decreasing velocity, and the Fed is printing money
to offset the decline in velocity. . . . So the Fed’s problem is best
understood as one of
trying to bend this velocity curve.”
How exactly does Fed do
this? Through “propaganda” and a mix of “carrots and sticks,” according to
Rickards.
The carrot is negative
real rates, and the stick “is to shock you with inflation.” Here is how it
plays out: the negative real rates incent you to borrow, an inflation shock
makes you want to spend, the ”lending and spending machine” gets going again,
and nominal GDP starts increasing. Then, real GDP gets back to trend and becomes
self-sustaining, and “we all live happily ever after.”"
http://blogs.cfainstitute.org/
http://blogs.cfainstitute.org/
Did the Gold Standard Work? Economics Before and After Fiat Money
"Suddenly gold is
being proposed as a cure-all for the weakening dollar, allowing it to retain
its place as the international reserve currency — a trophy taken, not without a
fight, from the British pound at the Bretton Woods conference in 1944.
Predictably, many commentators are reducing the most sophisticated, technical
economic issues to a paella of nationalism, confusion about basic economic
facts, and old-fashioned avarice.
To help throw up some light, let’s start with the simple questions: How is a classical gold standard supposed to work? How did it actually work out in the past? Why did previous versions of the international reserve currency lose their mantle? What is the record of the fiat currency version of the dollar as an international reserve currency? And why is it now rather than some other moment that gold is so much discussed?"
http://blogs.cfainstitute.org/
To help throw up some light, let’s start with the simple questions: How is a classical gold standard supposed to work? How did it actually work out in the past? Why did previous versions of the international reserve currency lose their mantle? What is the record of the fiat currency version of the dollar as an international reserve currency? And why is it now rather than some other moment that gold is so much discussed?"
http://blogs.cfainstitute.org/
Bitcoins: New Gold or Fool’s Gold?
"How does it work?
As with any foreign exchange transaction, a person holding local currency must
first buy a foreign currency to transact in that currency. Bitcoin is foreign
to everyone, so everyone must trade their local currency for Bitcoins through
several Bitcoin exchanges that have cropped up around the world. These
exchanges purchase Bitcoins, hold them in inventory, and sell them in exchange
for the currencies of the world. In order to proliferate the system, new users
download software onto their computers, enabling them to act as a node on the
Bitcoin platform. In a process known as “hashing,” users’ computers compete to
solve the mathematics of each transaction and thereby earn new Bitcoins..
The digital currency
was created by an anonymous programmer, code name Satoshi Nakamoto. Bitcoins
are remarkably sophisticated, both technically and financially. However, in
order to assess Nakamoto’s creation, we must first consider what gives a
currency its value. Currencies must be: a medium of exchange; durable and
evenly divisible such that the quality of one unit is just as good as another;
scarce such that they cannot be created at will; widely acceptable as payment
to all participants for their goods or services; and used as a standard of
market value, thereby enabling users of the currency to save money for later
use."
http://blogs.cfainstitute.org/
http://blogs.cfainstitute.org/
What Is the Difference between Investing and Speculation?
"What is the difference
between investing and speculation? At first, you think the answer is simple
because the distinction is obvious — that is, until you actually put pen to
paper and try to answer the question.
Go ahead; take a few seconds
and think about it. Write down “investing.” Now write the definition. Do the
same for “speculation.” If you are like me, frustration quickly builds because
the answers do not come quickly or easily, and they should. After all, these
terms have been a part of the financial lexicon since Joseph de la Vega
wroteConfusion of Confusions in 1688, the oldest book ever written on the stock
exchange business. In his famous dialogues, de la Vega observed three classes
of men. The princes of business, called “financial lords,” were the wealthy
investors. The merchants, the occasional speculators, were the second class.
The last class was called the “persistent speculators” or the “gamblers.”
(...)"
Demographic Changes, Financial Markets, and the Economy
"Using a large sample of countries and 60 years
of data, the authors found a strong and intuitive link between demographic
transitions and both GDP growth and capital market returns. Unlike previous
researchers, who used ad hoc and restrictive demographic variables, the authors
imposed a smooth and parsimonious polynomial curve across all age groups. They
also performed robustness checks and produced forecasts for the coming decade,
with all the necessary caveats."
Exchange-Traded Funds, Market Structure, and the Flash Crash
“Exchange-Traded Funds,
Market Structure, and the Flash Crash” by Ananth Madhavan.
The author analyzes the
relationship between market structure and the flash crash. The proliferation of
trading venues has resulted in a market that is more fragmented than ever. The
author constructs measures to capture fragmentation and shows that they are
important in explaining extreme price movements. New market structure reforms
should help mitigate such market disruptions in the future but have not
eliminated the possibility of another flash crash, albeit with a different
catalyst
Is Japan the Canary in the Keynesian Coal Mine?
"(...) I have been following the events in Japan
with great interest. This is partly
out of the desire to understand how a large, modern economy can be moribund for
23 years and counting. But I’m also interested because the policies that Japan
has utilized for so long are now being emulated by many countries around the world.
Japanese policy is the avant-garde of economics — or, perhaps, the canary
in the coal mine. And since the financial crisis of 2008, the United States and
Europe are following a very similar path. Of course, every country has
unique characteristics and is comprised of its own social customs, values,
demographics, and history. However, the approach these countries are
using — and which Japan is using with gusto — can generally be traced back
to the same philosophical source: John Maynard Keynes. Moreover, because Japan
has been using these policies and approaches for so long — and because it
has a very insular culture — we have a rich laboratory with which to make
observations about the efficacy of monetary policy, fiscal stimulus, debt
issuance, monetization of debt, and so forth."
What to Do about High-Frequency Trading
Polecam bardzo tekst o HFT opisujący
zarówno pozytywne i negatywne skutki działalności HFT oraz dodatkowo
zawierający parę sugestii odnośnie zmian w sferze regulacyjnej.
"Many people believe that restrictions on HFT
cannot harm the markets because investment decisions are not made over
one-second intervals, much less over millisecond intervals. The premise of this
argument is right, but the conclusion is wrong. HFT promotes markets by making
them more liquid and thus ultimately lowers corporate costs of capital.
High-frequency traders need to submit and cancel their orders quickly to
provide liquidity cheaply.
The most pressing danger that the markets face from
HFT is least recognized: High-frequency traders are engaged in a costly
technology arms race that will not end well for investors if regulators do not
act soon. Fortunately, a simple change in order-handling procedures—described
herein—can sensibly stop this race.
Identifying what regulators should and should not do
about HFT requires some understanding about what high-frequency traders
do."
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