What is the Carry Trade?

I recently mentioned the Carry Trade, and it wasn't obvious what i was talking about, so here's a short description. The Carry Trad...

What's with the US Dollar/Equity Market Correlation?

Lately, the US dollar and the US stock market have been in lock-step. Below are the S&P500 and the US currency ETF "DBV". Yo...

Conventional Wisdom in 2003

Head of failed mortgage bubble bank CountryWide, Angelo Mozillo at Harvard : While the number of minority homeowners has advanced recently, ...

Small Banks Wary of 'Help'

Obama's weekly $30B expenditure last week was directed at small banks. The idea was to give banks more 'capital', so they would...

Minimum Variance and Beta Portfolio Data

I created indices based on the idea that since risk is not positively related to return, it is pretty straightforward to dominate the indice...

Two Shoes are Enough

Anyone who works with a Bloomberg terminal, and knows how much they are paying per month, knows Mayor Bloomberg is a very wealthy man. Yet,...

Low Volatility and Beta 1.0 Portfolios

A low volatility portfolio targets the lowest volatility, or beta stocks. I have found that using a 3-4 factor model to minimize variance g...

Beta 1.0: A New Low Cost Indexing Strategy

In have argued that people pay for hope--lottery tickets, Black Swans--and this shows up as lower returns for highly volatile assets of all...

The Sad Life of a 12-Year-Old Existentialist

Socrates, clearly one to see the glass half full, noted that, "If you get a good wife, you will become very happy; if you get a bad one...

Never Enough Data

One problem you discover very quickly in macro is there isn't enough data to distinguish between many competiing theories. 100 years is ...

America and Haiti

Haiti is very instructive to the US. First, when listening to economists remember they have no consensus on the seemingly straightforward qu...

Is Capital a Cushion for Bad Times?

Recent capital regulation has moved various capital ratios up from about 5% to 8%--depending how you calculate capital. I think raising th...

Is Levitt's Abortion Study as Good as it Gets?

When someone questioned the value of economics, Tim Harford tried to counter with an example of an abstruse economic result that was importa...

A Fatal Conceit

I was watching BloggingHeads, and this week's liberal vs. libertarian banter included Ann Lowrey, who basically argues we should spend ...

Theories that Explain Everything

Stephen Hawking has a new book out, and he gives his great credibility to "M-Theory", which is another name for the 11-dimensional...

Was Friedman Right on Markowitz?

Harry Markowitz’s 1950 dissertation on the portfolio mathematics was to become the basis for his Nobel Prize in 1990. At the time the subje...