Friday links: optimism and hubris

24Apr09

“Optimism is one thing, but hubris that the world economy is returning to normal could hinder recovery and block policies to protect against a further plunge into the depths.”  (Economist.com also Market Movers)

“Once we accept that economic progress is largely a matter of trial and error, with accidental successes catching on and bad ideas failing really fast, the financial crisis itself looks very different.”  (Forbes.com)

Is it hubris for America to ignore the “examples of economic crisis in recent history“?  (Ultimi Barbarorum)

“As the bubble has burst, the prices of other assets, such as corporate bonds and equities, have been driven down to below historic averages. Why should housing be any exception?”(Economist.com also Big Picture)

Why housing is not coming back.  In part, because “bubbles do not re-inflate in the asset class that popped.”  (Clusterstock)

Two economic forecasters see an end to the recession on the horizon.  (Curious Capitalist)

Absolute performance is great, but a good system must avoid “human risk.” (greenfaucet.com)

The “home bias puzzle” even exists at the hometown level.  (Nudge Blog)

An analysis of RSI(2) shows that over time the market has become more contrarian in the short-term.  (Trading the Odds)

Is the VIX trying to enter a new phase of its long term macro cycle?  (VIX and More)

What’s not to like?  Timber (as an asset class) is both “green” and non-correlated.  (All About Alpha)

“If faith in peak oil crumbles further, or financing tightens again, lower demand for futures would reduce the steepness of the forward curve.”  (WSJ.com)

Hard to pay traders in this environment.  Morgan Stanley (MS) is looking to restructure its proprietary trading group.  (WSJ.com)

Questions are raised about the management of Harvard Management Company.  (Dealbreaker)

With CLOs out of the picture who is left to buy corporate loans?  (NYTimes.com)

On the prospects of the largest state defaulting on its debt.  (Felix Salmon)

Build America Bonds are not for you, unless you are an institution with long-dated liabilities.  (Accrued Interest)

Let’s hope some one at the Treasury knows how to value warrants.  (Epicurean Dealmaker, Clusterstock)

The results of the stress test are less important than what the Feds “rolls out as a solution.”  (Market Movers)

“Whether in private or in public hands, the big, broken banks are simply too compromised to lend.”  (Interfluidity)

Is “desecuritization” the solution to the complexity of mortgage-backed securities?  (Curious Capitalist)

The FDIC is going to have to restock its coffers soon.  (Finance Trends Matter)

Money managers are reluctant to sign up for the PPIP due to government oversight.  (Atlantic Business)

Throw some doubts on the validity of the Case-Shiller indices into the house price debate.  (WSJ.com, Value Plays)

Are banks using too low a “cap rate” for commercial real estate?  (WSJ.com)

A key Madoff lieutenant is cooperating with the Feds.  (Fortune.com)

Lenny Dykstra is out at TheStreet.com.  (Daily Options Report)

Have we overlooked an interesting post in the investment blogosphere? If so, feel free to drop Abnormal Returns a line.

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