Traditionally, finance quants bleat that government bonds "drive out" private (physical?) investment, and are therefore, ipso facto, bad.  Bad for everyone, not just the coupon clipping class.  The traditionalists miss the point, of course.  As one of my econ professors pointed out:&nb… Read full post »

What happens to an economy when the payback period of real, physical investment no longer meets the product life cycles that investment is built to support?  That is, when payback is longer than life cycle?  Who invests in such a circumstance?

The rational answer:  monopolists who can,… Read full post »

Much bytes have been devoted here to Apple's woes of late.  And to whether, or not, these woes have any macro implications.  Evidence is mounting that there are.

About a year ago, some opined that prepaids are cheaper, but:

Prepaid phone plans, where you pay the full price for a cellphone an… Read full post »

(What follows started out as a comment to a blog post, but growed like topsy, so it's ended up here.  I've edited it, and added some additional context so that it stands alone.)

Here is the blog post on "claims inflation"
Here is the paper by the blog author
Here is the 2005 paper… Read full post »

Well, here we go again.  The import/export prices are out, again.  And, again, DEflation is the rule of the day.  We're going Japanese.  All you folks that been stuffing your moolah in the mattress, you win for the rest of us losing. Read full post »

My hometown, Springfield, MA was the subject of a good news/bad news piece on "60 Minutes" last Sunday.  The bad news:  it's a city with assault rifle toting drug dealers.  The good news:  a counter-insurgency program appears to be working.  Social Darwinism meets police with… Read full post »

LinkedIn fell into its potty on Friday, and the post-mortems proliferate.  Is there anything to be learned, beyond the certainty that LinkedIn is wildly overpriced at the moment?

From the quants' point of view (those that labour on Wall Street and The City), LinkedIn is yet another social media p… Read full post »

As chronicled in earlier musings, the downside to the various exotic (that is to say, more than lifting it out of the ground) hydrocarbon extraction regimes is water.  You need a bunch of it.  In case anyone's not noticed, a report today (I couldn't get through to Quartz, for the original)… Read full post »

Sorry for the delay; I missed my Saturday Times.  Here's Shiller's third part.  It's largely, surprise, a re-hash of much of what I've been scribbling about:  housing isn't an investment, as that word is generally connoted.  The vig comes from the mortgagee's real income, not from… Read full post »

Trifecta.  Three's a crowd.  Win, place, and show.  Three strikes, and you're out.  Could be worse; there's a fourth item I'm too lazy to delve into.

So soon, you forget, eh?  Today's reporting demonstrates that The Powers That Be still don't get it.  All their quants doi… Read full post »

Turns out, I'm not the only blatherer addicted to quotes; both prophetic and profane.

This first is found on the R-blogger page.

While this is the first's inspiration.

I think it safe to say that both are willing to cast a jaundiced eye at econometrics in the field.  Early on in my professional exi… Read full post »

Here's the link for Shiller's second column on the housing problem.

I find, on the whole, the column both irrelevant and wrong headed.  Irrelevant to explaining the motivation for the Great Recession, which was the flood of The Giant Pool of Money to "risk free" returns into "nearly risk free" ho… Read full post »

In my younger years, when free love was pretty much free, there was the adage:  "Herpes, the gift that keeps on giving".  Well, our friends R&R have become an economic herpes virus.  I love it!  While it isn't a Liberal Attitude to pile on simpletons, this is one case where I'… Read full post »

The broohaha over the Reinhart & Rogoff paper impelled me to look for better stats and economics applied to the question of debt and growth.  The graphs in the HAP critique showed clearly that the data as presented by R&R isn't quite right.  What struck me from the beginning is that… Read full post »

The other big news of the day is that Apple is bobbing under $400, and Mr. Market seems irritated.  Mr. Market will, eventually, figure out that Apple stopped being a computer company years ago.  Today, they're a toy company, just like Mattel, although it's P/E is more than twice Apple as… Read full post »

If you're a policy wonk, or a regular reader of comprehensive newspapers, you're likely aware of the Reinhart & Rogoff controversy.  Fact is, I hadn't been paying attention until today's reporting.  The deja vu experience is charming; when I was at UMass, there was only Amherst a… Read full post »

Once again, the Right Wingnuts, gold bugs, supply siders, and monetarists all; are wrong.  CPI is deflationary this past month, -0.2%.

The moolah that the Fed is "printing" (it isn't, it's just exchanging bonds for cash; assets don't change) stays with the Morgans, Carnegies, Rockefellers, Chases… Read full post »

A comment on one of these missives, led me to comment serially.  This is the part of the comment which motivated this missive:

The only way to increase the demand for stick built single family housing is to drop the price a lot. Not to mention that boomers will be dieing… Read full post »

This endeavor began in the idleness resulting from The Great Recession, and took square aim at the silliness of the housing market.  In particular the notion the a home mortgage is an investment, whether from the point of view of the homeowner or the buyer of MBSs or CDOs and the… Read full post »

It must be vexing to be a quant in the financial services industries.  On the one hand, you're in the Next Sexy Career:  data science.  On the other hand, Greenspan and Bernanke and yourselves have shoved a 20 inch long 4 inch wide dildo up your yahoo.  That's got to hurt.

What… Read full post »

We live in schizoid Times, New York edition.  It appears that, once again, the Editors don't talk with each other.  Texas arrogance has been a bete noir since the days of the first OPEC oil embargo, and Texans' display of the "Let the Yankee Bastards Freeze" bumper stickers.  Today, it… Read full post »

Another day, more data.  Floyd Norris has more on falling interest rates in today's NY Times.  Yet more pretty graphs, detailing that it's getting harder to earn money by doing nothing.  When I was growing up in a poor but unhappy white trash housing project, the epithet "coupon clippe… Read full post »

One of the driving themes of this endeavor is that technological change, and financialization activities in "post-industrial" economies, has led to a long-term, if not permanent, decline in the real rate of return on physical investment.  Whatever the finance zealots may say, earnings are ultima… Read full post »

"I know the vibration was not normal."
-- Jack Godell/1979

Guess what else isn't normal?  Chinese are indulging in interest rate inflation the same way we did, by bidding up housing with a flood of moolah.  Since the collapse of the US bubble, the Chinese are left to create their own bubble.&… Read full post »

(One of the, occasional, techy posts from elsewhere.)

Insanity:  doing the same thing over and over, yet expecting a different result.

"Sherman, set the WABAC for 1964".  

The mid-60s to the end of the decade were a watershed period in the computer world.  1964 saw the announcement of S… Read full post »