Economy Blog

addslashes(Real Story Wrap: January 9, 2008

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This morning, rumors were rampant that Countrywide was to declare bankruptcy sometime this week. The company denied the rumors, saying in an e-mail to major media outlets: “I feel happeeeeeee!”Here is what I find particularly interesting about today’s market.First, I’m not sure why a potential Countrywide bankruptcy should send the market reeling like this. You know when you and your friends start talking about old movies or old bands? I…
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Today we can see session again with high volatility. In contrast to previous days today it looks more in favour of bulls. If you look at the chart Nasdaq bottomed with similar candlestick as on August. If this is really short-term bottom we will see in following days. I think important is awaited earnings kick off which coming to the street today. After closing bell Alcoa (AA) releases earnings result….
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addslashes(Clinton Spinmeister McAuliffe Dissects the Race

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Daniel Gross : Why were the political futures markets so wrong about Obama and Clinton?
So, I’ve been watching the action in one of the political futures markets this evening, Intrade. And the action in this prediction market has reinforced my opinion that these are less futures markets than immediate-past markets.
Paul Krugman …
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Raghuran Rajan gets it absolutely right:
For example, an investment manager who bought AAA-rated tranches of collateralised debt obligations (CDO) in the past generated a return of 50 to 60 basis points higher than a similar AAA-rated corporate bond. That “excess” return was in fact compens­ation for the “tail” risk that the CDO would default, a risk that was no doubt perceived as small when the housing market was rollicking along, but which was not zero. If all the manager had disclosed was the high rating of his investment portfolio he would have looked like a genius, making money without additional risk, even more so if he multiplied his “excess” return by leverage. Similarly, the management of Northern Rock followed the old strategy of taking on tail risk, borrowing short and lending long and praying that the unlikely event of a liquidity shortage never materialised. …
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On the one hand:
Political Cycles and the Stock Market, Pedro Santa Clara and Rossen Valkanov

Contrary to the widespread opinion that “Republicans are good for business,” we find that the average excess returns in the stock market are higher under Democratic presidents. …
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addslashes(News You Need: Research In Motion, Target

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What categories of information are of broadest interest to readers of this web site, who might be characterized as fairly sophisticated investors and traders? Using a listing of the Top 50 most visited directories for all of 2007, we find that……
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“Winter, spring, summer or fall, all you have to do is call, and I’ll be there, you’ve got a friend …” These are the lyrics of Carol King’s song. Yes, as life swings from boom to gloom it is the support of friends that often provide the necessary solace.
It is unlikely that Mr Market will come [...]

Please visit my website (by clicking on the heading above) for the full article, as well as other interesting investment snippets.
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There is a lot of talk about how hedge fund returns can be “replicated” using liquid derivatives, swaps, futures, and “exotic beta”. But what about good old-fashioned ETFs?…
Original Source: allaboutalpha.com