Thursday links: the math of investing

21Feb08

Long TIPS, short Treasuries is a way to play higher than expected U.S. inflation. (WSJ.com)

How does inflation impact stock prices? (Crossing Wall Street)

“A simultaneous rise in unemployment and inflation poses a dilemma for Fed Chairman Ben Bernanke.” (WSJ.com)

(I)nflation is alive and well in the world, and that demand in the emerging world is very resilient.” (FT Alphaville)

Convergence stories: stocks vs. bonds, bonds vs. CDSs. (Market Movers, ibid)

“The ARS market does appear to be stabilizing, at least a bit, and some market watchers are hopeful this is the beginning of a broader thaw.” (DealBreaker.com)

The rogue trader’s real P&L illustrated. (Alea)

It is a mistake to think of the Fed as a “unitary actor.” (A Dash of Insight)

Are options traders to blame for volatility? (Daily Options Report)

Bill Gross and PIMCO can push the bond market around. (Infectious Greed, Market Movers)

Economic gloom has not stopped the surge in commodity prices. (Economist.com)

The agriculture sector, natural hedges and the BRIC phenomenon. (Abnormal Returns)

“Last year wasn’t a particularly strong showing for enhanced index mutual funds in the United States.” (IndexUniverse.com)

“(T)he Alternative Beta approach may sound better on paper than it does in practice. It confirms what econometricians have known for a long time: complex models often perform worse than simpler ones.” (All About Alpha)

Getting a better understanding of the Fundamental Law of Active Management. (Humble Student of the Markets)

(T)he math of investing is relentless.” (IndexUniverse.com)

“Properly defined position and portfolio rules for risk management are preventive tools with respect to anxiety and trauma.” (TraderFeed)

An eventful year in the life of the Aleph Blog. (Aleph Blog)

Expectations for a 20% drop, peak to trough, in home prices. (Calculated Risk)

Reaction to the new head of the National Bureau of Economic Research. (Real Time Economics)

What is the blogosphere saying about Abnormal Returns? Check out the reviews.

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