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Our popular course Introduction to QuantLib Development will be taking place June 18-20th, 2018.

 

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The Pips are Squeaking

May 16, 2018 Comments (0)

The Pips are SqueakingPhoto Credit: sid=================This should be a short post.  I just want to note the degree of stress that many emerging market countries are under.  The Fed raises rates, and something blows up.  That is often the class of debt that has grown the most in the bull phase of the cycle, or, the one that has financed with short-term debt.  This is the “volatility machine” that Michael Pettis…View On WordPress

The Pips are Squeaking

May 15, 2018 Comments (0)

Photo Credit: sid=================This should be a short post.  I just want to note the degree of stress that many emerging market countries are under.  The Fed raises rates, and something blows up.  That is often the class of debt that has grown the most in the bull phase of the cycle, or, the one that has financed with short-term debt.  This is the “volatility machine” that Michael Pettis wrote so well about.The Brazilian stocks I own have been falling.  A little lower, and I will...

Thoughts on Bank Debt

May 11, 2018 Comments (0)

Thoughts on Bank DebtPhoto Credit: Teemu008I have long said that until an asset class goes through a “failure cycle,” risk-based pricing will be weak toward the assets in question.  One asset class that has become popular of late is bank debt.  Bank debt is a loan to a corporation that typically has first priority to make claims on the company in bankruptcy, ahead of the bondholders, much less the preferred…View On WordPress

Thoughts on Bank Debt

May 11, 2018 Comments (0)

Photo Credit: Teemu008 I have long said that until an asset class goes through a “failure cycle,” risk-based pricing will be weak toward the assets in question.  One asset class that has become popular of late is bank debt.  Bank debt is a loan to a corporation that typically has first priority to make claims on the company in bankruptcy, ahead of the bondholders, much less the preferred stockholders and the common equity.Though it is called bank debt, often the loans are...

Why I Watch the Thirty

April 20, 2018 Comments (0)

Photo Credit: andy carter=============I like long bonds.  I am not saying that I like them as an investment.  I like them because they tell me about the economy.Though I argued to the Obama Administration that they should issue Fifties, Centuries and Perpetuals, the Thirty-year bond remains the longest bond issued.  I think its yield tells us a lot about the economy.How fast is nominal growth?  Look at the Thirty; it is highly correlated with that.What should the Fed use for its monetary...

Notes on the Fed Announcements

March 22, 2018 Comments (0)

Photo Credit: City of Boston Archives==========================Listening to the Fed Chair’s press conference, there was one thing where I disagreed with what Powell was saying.  He said a few times that they only made one decision at the FOMC meeting, that of raising the Fed Funds rate and the reverse repo rate by 0.25%.  They made another decision as well. The decided to raise the rate of quantitative tightening [QT] by increasing the rate of Treasury, MBS and agency bonds rolloff by...

Just Don’t Invert the Yield Curve

March 21, 2018 Comments (0)

Photo Credit: Brookings Institution================================Jerome Powell is not an economist, and as such, has the potential to try to remake the way the Fed does monetary policy.  Rather than hold onto outmoded ideas ideas like the Phillips Curve, which may have made sense when the US was a more insular economy, there are better ways to think of monetary policy from a structural standpoint of how financial firms work.(Note: the Phillips Curve relies on a very simple assumption that...

Why I Like Foreign Small Cap ETFs

March 15, 2018 Comments (0)

Photo Credit: amanda tipton || It may not be foreign, and not an ETF, but it IS a small cap======================This should be a short post.  When I like a foreign market because it seems cheap (blood running in the streets), I sometimes buy a small cap ETF or closed-end fund rather than the cheaper large cap version.  Why?They diversify a US-centric portfolio better.  There are several reasons for that:a) the large companies of many countries are often concentrated in the industries that the...

Estimating Future Stock Returns, December 2017 Update

March 14, 2018 Comments (0)

The future return keeps getting lower, as the market goes higher=================Jeff Bezos has a saying, “Your margin is my opportunity.”  He has found ways to eat the businesses of others by providing the same goods and services at a lower cost.  Now, that makes Amazon more productive and others less productive.  The same is true of other internet-related businesses like Google, Netflix, etc.And, there is a slight net benefit to the economy from the creative destruction.  Old...

Getting a Job in Insurance

March 7, 2018 Comments (0)

Photo Credit: Boston Public LibraryWell, I never thought I would get this question, but here it is:Thank you for your dedication to your blog.I was wondering if you have any skill development advice for recent graduates to gain a job in insurance – is technical or programming skills the most important or perhaps making business cases, or showing that you can make sound and reasonable conclusions?Thank you for your time.Kind regards,There are many things to do in insurance.  Some are...