Readings in Economics

Weekly Reading, Listening and Viewing Experiences in Economics

[economicreading-blog]

Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement. It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.

Steve Bannon to the Hollywood Reporter

[economicreading-blog]

Trumpian influence on Europe. Dates to watch. All the potential political risks looming in Europe, in one chart http://on.mktw.net/2f9hcj1 via @marketwatch

[economicreading-blog]

Leaders find lessons in the most unexpected places. Adam Cooper, our Chief Legal Officer, is not only a lifelong Cubs fan, but also an admirer of how the team’s leaders have pulled off an historic turnaround in performance. As part of Citadel’s guest speaker series, which brings the firm’s team members face-to-face with icons in business, technology, and beyond, Adam sat down with Cubs’ President Theo Epstein and Manager Joe Maddon to learn how they transformed the team’s performance and how anyone can apply those lessons to their careers.

[economicreading-blog]

FOMC Announcement: 11.2.2016

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments. Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation. https://www.federalreserve.gov/newsevents/press/monetary/20161102a.htm

[economicreading-blog]

We talk about the addiction crisis, family breakdown, and all these other social indicators that don't look very good. I think that breeds a certain frustration both at yourself and at people who you perceive don't really care about your problems. So you think that your life isn't going especially well and your political elites, the people who should care, don't. Not only do they not care, there's a sense that they actually condescend, that they look down on people like you.

J.D. Vance author “Hillbilly Elegy” on Charlie Rose

[economicreading-blog]

Who’s afraid of the big, bad Deutsche Bank?

[economicreading-blog]

The yuan will become one of five global reserve currencies on Saturday, the culmination of several years of efforts by Chinese policy makers to gain such recognition.

[economicreading-blog]

Maybe we shouldn't be so concerned about fixing Washington (not doable) and more fixated on optimizing it while accepting current constraints. Yes? No?

Me. I'm tired of useless debate. And I'm tired of wasted time.

[economicreading-blog]

Our evolved intuitions do not necessarily give us the right or consistent answers to moral dilemmas. What was good for our ancestors may not be good today. But insights into the changing moral landscape, in which issues like animal rights, abortion, euthanasia, and international aid have come to the fore, have not come from religion, but from careful reflection on humanity and what we consider a life well lived.

Fascinating. Peter Singer opining in Project Syndicate on Godless Morality. http://www.project-syndicate.org/commentary/godless-morality#A55DPsj5wKITz2Bd.99

[economicreading-blog]

“There are two ways to live: you can live as if nothing is a miracle, or you can live as if everything is a miracle.”

Albert Einstein

[economicreading-blog]

Whether it is robots in manufacturing, automated check-out of retail establishments, e-shopping taking people out of distribution networks, information technology replacing what used to be done by low-level, white-collar managerial and clerical labor, the ability to take blood pressure and perform other medical tests with much less human labor input, automated call-center systems – it appears that technology is permitting very large-scale substitutions.

Larry Summers being interviewed by the Washington Post's Wonk Blog: http://larrysummers.com/2015/03/03/3977/

[economicreading-blog]

The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many think. We don’t know what the pathway from now until the end will look like, of course. It will probably be highly unstable and unsettled. But until the system begins to unravel in some obvious way, those inside of it will play along—thus contributing to the facade of stability.

Political Scientist and China Scholar David Shambaugh in the WSJ Saturday Essay http://www.wsj.com/articles/the-coming-chinese-crack-up-1425659198

[economicreading-blog]

If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it?

Mark Cuban: http://blogmaverick.com/2015/03/04/why-this-tech-bubble-is-worse-than-the-tech-bubble-of-2000/

[economicreading-blog]

We interpret this as evidence that HFT correlated trading is information-based; in other words, HFT firms appear to be reacting simultaneously and quickly to new information as it arrives at the market place, which makes prices more efficient

BOE Working Paper 523

[economicreading-blog]

Using unique transactions data for individual high-frequency trading (HFT) firms in the UK equity market, we examine if the trading activity of individual HFT firms is contemporaneously and dynamically correlated with each other, and what impact this has on price efficiency. We find that HFT order flow exhibits significantly higher commonality than the order flow of a control group of investment banks, both within and across stocks. However, intraday HFT order flow commonality is associated with a permanent price impact, suggesting that commonality in HFT activity is information-based and so does not generally contribute to undue price pressure and price dislocations.

[economicreading-blog]

A year after Michael Lewis’s book brought the supposed menace of high-frequency trading to public attention, researchers at the Old Lady of Threadneedle Street suggest speedy trading may not be so bad for markets after all.

Electronic trading makes stock markets more efficient by enabling them to react more quickly to new information, the Bank of England working paper concluded. The authors took the FTSE 100 Index’s 20 largest stocks and examined how they traded on the London Stock Exchange in the four months through the end of 2012. They compared the trades of 10 HFT firms with the orders placed by 10 investment banks.

[economicreading-blog]

The world's major central banks are currently obsessed with the goal of raising their national inflation rates to their common target of about 2% per year. This is true for the United States, where the annual inflation rate was -0.1% over the past 12 months; for the United Kingdom, where the most recent data show 0.3% price growth; and for the eurozone, where consumer prices fell 0.6%. But is this a real problem?