As John Lennon forewarned, it is getting harder to be someone, and harder to maintain the economic growth that investors have become accustomed to. The New Normal, like Strawberry Fields will “take you down” and lower your expectation of future asset returns. It may not last “forever” but it will be with us for a long, long time.
Category: Macro
Beware the Smart Money: Hedge Funds Issue Sell Signal
So, what is the moral here? It may be that hedge fund money — the so-called smart money — is not as smart as it’s cracked up to be. This contrarian indicator is not so different from those that track individual investors. Many market pros like to say when individuals become more bullish or confident, it signals a market top.
Stimulus vs. austerity: Getting it just right
The impending fiscal cliff could disrupt the post-financial-crisis adjustment process and benign pattern of gradual transition in the U.S. economy, however. The cases of Japan in the 1990s, and Spain more recently, demonstrate that if economies are not sufficiently advanced in their private-sector recoveries and deleveraging processes, an excessive emphasis on near-term fiscal austerity may ultimately be counterproductive.
It’s Time To Make Taxes Non-Toxic
Conducting complicated, high-stakes budget negotiations on live television is a terrible idea — it’ll lead to preening and posturing and push negotiators toward oversimplified fixed positions rather than nuance or compromise. But the deeper problem is that it incentivizes negotiators to propose only safe and popular ideas, allowing both politicians and the people to shirk their core responsibilities.
Mitigating Market Abuse
Those looking to find any unfair advantage and exploit markets are investing heavily in technology, so it is critical that regulators partner with industry solutions that have the resources to continue to innovate and take advantage of new technology such as big data, cloud computing, social media and sentiment analysis.
Abnormal Capitalist 