Friday links: major financial instability

29Feb08

Strong commodities and a weak dollar are front page news today. (WSJ.com, ibid)

Money has been gushing into currency ETFs. (IndexUniverse.com)

Fund management, the “perfect business,” is in the midst of historic changes. (Economist.com)

“(M)ore diversification benefits equals more to lose when those benefits evaporate.” (All About Alpha)

“The American householder is at war with the financial services industry.” (Financial Crookery)

“The Bernanke conundrum: In the short term, the more he cuts short rates, the more certain long rates may rise.” (Calculated Risk)

“The Fed chief must be worried that a recession in the present instance would precipitate major financial instability, in which case perhaps the choice between paying now and paying later argues in favor of latter.” (Econbrowser)

What role has mark-to-market accounting played in the credit bubble? (naked capitalism)

“Chief risk officers need to spend much more time away from the trading desk, hanging out with bankers, and worrying about all the tail risk which bankers are particularly bad at worrying about.” (Market Movers)

Deal activity is “sliding toward zero.” (FT Alphaville)

A look at stock-bond rotation. (Bespoke Investment Group)

Some contrarian trades that will make your stomach turn. (Humble Student of the Markets)

Are tighter lending standards to blame for the most recent hedge fund blowup? (Alea)

Simpler is better. Simple companies get better valuations, and the managers are sharper at financial controls, because they don’t have to cover as much ground. They can focus.” (Aleph Blog)

“It seemed like a good idea at the time.” (Jeff Matthews)

The best traders don’t have a need to be right, and in fact they readily admit that there’s many times they’re wrong.” (TraderFeed)

Why aren’t housing futures more popular? (Odd Numbers)

“Let’s face it — it’s a great time to earn a living through the power of ideas.” (Daniel Drezner)

“The United Nations has declared 2008 the International Year of the Potato.” (Economist.com)

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