Category: finance

Aging and Asset Prices

An interesting Economics Focus column in this week’s Economist discusses the link between aging and asset prices. It says, in a nutshell, that aging depresses asset prices as the young buy more assets for retirement (driving prices up), and the old…

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GMAN 322: Efficient Markets Assignment

I have posted two videos below. One is of Benoit Mandelbrot, a mathematician who passed away not too long ago. Here is a brief bio (and there’s more in the video): Mandelbrot has been called a visionary[20] and a maverick.[21] His…

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Rate Hikes or No Rate Hikes?

Raghuram Rajan of the University of Chicago, along with William White, former head of the Bank for International Settlements’ monetary and economic department, are arguing for an increase in interest rates. Interest rates near zero risk fanning asset bubbles or propping…

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Bonds, Bonds, and Bonds

The bond market is booming, with investors (some say) diving into safe securities, driving bond prices up and yields down. In addition, the Fed has kept interest rates low for one of the longest periods in history. As a consequence,…

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Your Personal Discount Rate

Scientist Jeff Schweitzer has an interesting and unique, but disturbing (and very real) application of the time value of money concept. He says environments in developing countries are being destroyed because of the infinite discount rates of their starving populations.…

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Good New-Bad News

James Surowiecki (over at the New Yorker), wrote about financial illiteracy in the issue from a couple of weeks ago. The bad news is that we Americans are clueless about finance, and particularly, our personal finances: The depth of our…

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An Interesting Debate

I found this on Capital Gains and Games, but really, it is a debate (mostly) between Paul Krugman and Raghuram Rajan. Here is a brief synopsis: Of all the canards that have been offered about the financial crisis, few are…

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Banning Naked CDSs

A little late in the posting, but Brad Delong on banning naked CDSs: I say, narrowly, no–that if we can get proper clearing, transparency, and capital adequacy requirements in place banning naked CDOs would not do any good and would…

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Rated XXX

While the reform bill has gone through, there is still a lot of cleaning up to do. The WSJ talks about firms that can still shop around the ratings agencies, getting the best “deal” for themselves: In the wake of…

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