HS2 will damage the home counties

High-speed rail may hurt intermediate places: The role of long-haul economies.

This is a long-term study of the impact of the Shinkansen trains in Japan.

DeFi, or how to start your own crypto-currency bank

This is a great article. It goes through why lending …

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Chinese puzzle

This piece appeared in Grant’s Almost Daily Faulty Towers. You can subscribe for free via the main website. I enjoy Grant’s take on the market, but this daily letter is as much as I can get through.

Grant’s called out the craziness of the Global …

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The Efficient Market Hypothesis considered a source of cognitive dissonance

So nobody really believes the EMH. Everyone wants to feel good about spotting something that the rest of the market has overlooked.

Nobody wants to believe Cramer, or the dull analyst reports from the bulge bracket banks. But, on the …

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Wrap

The market was flat today. Bonds were unchanged; oil was flat, the dollar moved back up, but only to retrace it’s move of yesterday. EUR.USD is 1.22, pretty much where it was three months ago. US equities were up a bit, QQQ being ahead of the …

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George Stigler and regulatory capture

The Theory of Economic Regulation

George J. Stigler

The Bell Journal of Economics and Management Science

Vol. 2, No. 1 (Spring, 1971), pp. 3-21 (19 pages)

This article is fifty years old. I am not sure I’ve ever read the original, but the ideas …

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Australia-UK Trade deal

The UK has singularly failed to establish any trade deals which are materially better than they already had as members of the EU. The current great white hope is one with Australia. The problem seems to be that farmers object to having to face competition from …

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19 May 2021

Markets

The Fed finally moved. Some committee members whispered the possibility of reducing QE, or “tapering” in the jargon. This knocked 3.2% off the price of oil (but see the item about the China credit impulse below). The markets are fixated by the Fed, because it …

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The close of the day

Wrap

Odd day. Housing starts disappointing, although recent data has been very noisy. Explanations vary from shortage of labour to shortage of lumber. Weather is always a confounding factor. Not obviously risk on or risk off:

• Ponzi sector up, $ARKK up 1.43%,
• $DXY weaker …

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Wrap

Rotation into value, especially energy characterized today.

• precious metals up, oil up, agricultural commodities mixed,
• dollar weak, but not very, 0.15% decline against Yen,
• bond yields trending, but 10Y still only at 1.62%,
• bitcoin taking a beating, down to $44K,
• NDX weak, MSFT, DIS and CRM all …

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History of the Fed and what its expanded mandate will do to the price of crude

This is a brilliant summary.

History of the Fed’s Mandate:

• Maintain purchasing power of USD (1914);
• Reduce market volatility via monetary policy (added during WWI);
• Stand by and watch the crash they crated …

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