Passive Design Exploits Rare Shifts in Equity Premium
Coimbra et al. Pension plan design augmented by passive. Many misinterpret the equity risk premium as stable. We benefitted from two "once in a lifetime" changes. https://t.co/eUzA2WGus1
Powell’s Reactive Rate Moves Fueled Inflation, Hurt Jobs
I disagree with @mark_dow on his conclusion, even as I share his frustration with many critics. Powell was a terrible Fed Chair, but he was not responsible for the Covid inflation. He was responsible for an entirely REACTIVE Fed policy that...
Beware: @Teasri Hacked, Fraudulent DM Links Circulating
New scam underway. Unfortunately @teasri appears to have been hacked. DMs are being sent with a link that certainly appears fraudulent. Be on guard.
Employers Retain Workers Amid Downturn: Power or Hoarding?
This can be interpreted in two ways: (1) good news interpretation suggests in pockets of the economy, labor has enough negotiation power that employers find it more profitable to retain existing workers through a profit downturn than to fire and...
Rethinking Inflation: Ratios, Income Gaps, Price Levels
Enjoyed @mtkonczal latest piece. Exciting to see people seriously considering differing rates of inflation, ratios vs differences in income & wealth, and price levels. https://t.co/4nbD049Wvh
SBF's Genius Picks Wasted by Panic Selling
"SBF was a genius at picking generational winners and a criminal at managing their money." Really only one of these should matter. And it's at the end of the sentence.
China’s Real Challenge: Weak Domestic Consumption, Not US Asset Harvest
Agree it's an interesting paper, but largely because it is based on a false premise. China's core strategic challenge is NOT "how to 'harvest' US relinquishing assets." China's core strategic challenge is how to address inadequate (and falling) domestic consumption...
China’s Decade-Long Goal: Avert Global Economic Catastrophe
Oh, Rudy... I'm so saddened by this line: "China is clearly intervening to get the Iranians to open the strait to prevent a global economic catastrophe." @RudyHavenstein Yes... it has been shown over the last decade that China's primary objective...
Labor Market Narrative Misleading; Data Stale Since September
It IS a remarkable collapse and strengthening of the labor market narrative… unfortunately it’s likely untrue. September is the last date updated for the QCEW revisions. https://t.co/7r6efCCpeo
1970s Fed Hikes Sparked Credit Crunch, Causing Stagflation
What a surprise (/s)… the Fed hiking rates in 1970s caused supply contraction and price increases… One funeral at a time…
Trend Following Mirrors Delta Hedging, Yields ~8% Floor
Trend following is ~delta hedging. No surprise the payoff looks like a long straddle. Note the min PNL appears to be ~the expected annual return to equities at ~8%. Nice report from @larryswedroe, btw
Claim: US Entrepreneurial Dynamism Still Outpaces Pre‑2020 (Sarcastic)
Fortunately, you are probably not aware that the (assumed) level of entrepreneurial dynamism in the US labor market continues to exceed all periods prior to 2020... /s https://t.co/pbpkvBkZ3D
AI Shifts Firm: Seniors Rise, Juniors Fall
Deeply misunderstood. Within firm behavior has shifted dramatically due to AI/LLM implementation. Senior employee value up, junior employee value negative. No fire, no hire… for now.
CPI Overstates Inflation; Truflation Reveals Gas‑Driven Deflation
Remember the CPI is a one year fixed basket, which by definition ignores demand destruction in categories that rise in price (gasoline) and demand substitution in areas with falling prices. By definition this leads to an overstated CPI vs actual...
Supply Boost Beats Demand Subsidies in German Price Control
In a shocking turn of events, German economists discover that govt policy of increasing supply more effective than subsidizing demand at controlling prices.