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August 2011

Search engine data a useful predictor of stock returns

August 31, 2011 Comments (0)

Those looking for stock tips around the water cooler or on the golf course might try one more source ― online search engine data.
New research by a team of researchers at the KU School of Business demonstrates that online ticker searches – for example, "XOM" for Exxon Mobil – can predict abnormal stock returns and trading volumes during the subsequent week. The research also shows that highly volatile stocks will be more sensitive to online search intensity than less volatile...

Guest Post - Lunatix Two: A European Stabilisation Bank & the Dysfunctional European Commission Economic Policy development process

August 30, 2011 Comments (0)

Thanks go to risk consultancy Asymptotix for this working whitepaper. Updates can be found here.

Getting the European response to this financial crisis right is the responsibility of the European Commission and arguably it is the failure of Europe to position itself in a credible manner to world capital markets which is the main cause of the latest stochastics in bond yields and the Euro. The root is internal politics in the European Commission & resultant weakness in...

If banks should act as utilities, why not treat them as such?

August 30, 2011 Comments (0)

Charles A.E. Goodhart 30 August 2011
The calls for better bank regulation are many. This column argues that regulators have the concepts right, but the mechanisms are in need of repair.
Nobody thinks that utility-operating companies – whether in transport, such as railways, in energy, such as electricity, or telephone or water – are too big to fail. If they lose enough money and go bust, then, if another company cannot be found to take over the franchise, the government steps in...

Hedge Funds Sold Stocks Quickly During Financial Crisis - Leaving Mutual Fund Investors to Suffer Larger losses

August 26, 2011 Comments (0)

A new study of stock trading during the financial crisis of 2007 to 2009 found that hedge funds sold their stocks much more aggressively than mutual funds at the first signs of poor performance.These selloffs occurred in response to falling stock values, the study found.  Hedge fund investors withdrew almost three times as much of the money they invested as compared to mutual fund investors.As a result, the total returns of mutual funds were much worse during the crisis than were those of...

MoneyScience Monster Miscellany - 26/08/11

August 26, 2011 Comments (0)


Machine Learning Markets -
Simoleon Sense:- Weekly Roundup 141: A Curated Linkfest For The Smartest People On The Web #linkfest
The Man who Coined 'Econophysics' - Scientific American interview with H. Eugene Stanley -
Via @EmpiricalBlog - The Price of Street Friends: Social Networks, Informed Trading, and Shareholder Costs
Brilliant - xkcd: "I've always had trouble with the size of clouds" -
2 more Free...

Circuit Breakers and Financial Markets

August 24, 2011 Comments (0)

Via Patrick Burn's excellent Protfolio Probe blog, come this facinating article by By Bill Alpert and Lisa Stryjewski from Barron's:

Just in the nick of time, it seems, stock exchanges have expanded a key safety mechanism aimed at preventing swoons like the May 2010 "flash crash," when the Dow bizarrely dropped almost 1,000 points in 20 minutes, then snapped back on extraordinary volume. As of last Monday, every stock listed in the U.S. is covered by its own circuit breaker designed to pause...

Interview with Yves Smith: Should Banks be a Public Utility?

August 24, 2011 Comments (0)

Yves Smith runs the Naked Capitalism blog and is the author of ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.

Eurobonds: Wrong solution for legal, political, and economic reasons

August 24, 2011 Comments (0)

Daniel GrosDirector of the Centre for European Policy Studies, Brussels
Eurobonds are being touted as the silver bullet to resolve the Eurozone crisis. This column over at argues that the Eurobonds proposal fails on legal, political, and economic grounds. It says that, whatever the variant, Eurobonds only make sense in a political union - and given the vast differences in national political systems and their quality of governance, any political union created on paper will not work in...

2 more Free Stanford Classes in Computer Science: 'Introduction to Artificial Intelligence' and 'Introduction to Databases'

August 22, 2011 Comments (0)

Since we mentioned a 'bold experiment in distributed education', the Stanford Machine Learning Course that has already attracted more than 30,000 participants, it appears that 2 more courses are being offered on the same model:
Introduction to Artificial Intelligence:
"Introduction to Artificial Intelligence" will be offered free and online to students worldwide during the fall of 2011. The course will include feedback on progress and a statement of accomplishment. Taught by Sebastian Thrun...

Department for International Development Report: UK Priorities for the World Bank

August 22, 2011 Comments (0)

The World Bank has had a bad couple of decades. It was central to one of the biggest development disasters in history, forcing structural adjustment on aid-dependent countries. Other sins include insisting that countries impose user fees on the world's poorest people to access basic health and education. This policy, like much of the structural adjustment doctrine, caused increased poverty and is now discredited.But we should not overlook the contribution made by the bank in many parts of the...