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Sep
5th
Sun
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Tags: peter thiel   finance   economics   politics   hoover  
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Jul
15th
Thu
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Herd Behaviour in Financial Markets and Model Agencies

Great parallel between financial market and the modeling world on social / behavioral similarities: how supermodels are like toxic assets

In the face of complex decisions in a highly uncertain environment, modeling agency clients (and financial investors) pick what everybody else is choosing, triggering the social-induced feedback loop (“Matthew effect” or “the rich get richer”).

Tags: finance   social  
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Tags: finance   economics   google  
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Tags: finance   shadow banking   banks   deflation   deleverage  
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Jul
13th
Tue
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Tags: real estate   finance  
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Jul
8th
Thu
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In the figure below, I show two series. The red line (left scale) is nonresidential fixed investment spending – basically, business investment — as a percentage of GDP, from the BEA. The blue line (right scale) is the output gap — the percentage difference between real GDP and the CBO’s estimate of potential real GDP. (via Why Isn’t Investment Higher? - Paul Krugman Blog - NYTimes.com)

In the figure below, I show two series. The red line (left scale) is nonresidential fixed investment spending – basically, business investment — as a percentage of GDP, from the BEA. The blue line (right scale) is the output gap — the percentage difference between real GDP and the CBO’s estimate of potential real GDP. (via Why Isn’t Investment Higher? - Paul Krugman Blog - NYTimes.com)

Tags: business   finance   gdp   economics   investment   paul krugman  
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Economist and FT on Private Deleverage vs Public Borrowing

Martin Wolf explains why extra government borrowing will be met by increased private (mostly corporate) savings, à-la Japanese lost decade. In general it makes a lot of sense, even though it makes two strong assumptions:

  1. the somewhat paradoxical net flow of capital from developing to mature countries via reserve accumulation and currency manipulation will continue indefinitely
  2. dollars and pounds will still be considered a safe heaven

On private corporation deleverage, The Economist has a good article on this week print edition (“Show us the money”) on increased cash generation by US and UK companies, due to lower investments.

Tags: finance   economics   government debt   US   UK   japan   savings   investment   deflation   deleverage   FT   economist   martin wolf  
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Jul
4th
Sun
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Tags: finance   economics   history   dollar   gold   nixon   bretton woods   gold standard   US   france   UK  
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Jun
30th
Wed
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Our “New Normal” two-word duality seems to resonate more on the “normal” than the “new” to economists whose last names aren’t Roubini, Reinhart, Rogoff, or Rosenberg. It’s as if “R” has been eliminated from the financial alphabet, and “new” from investors’ dictionaries worldwide.
Tags: pimco   finance   new normal  
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Jun
27th
Sun
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The nation’s 13.6 trillion yuan ($2 trillion) of new loans in the past 17 months, bigger than the economies of South Korea, Taiwan and Hong Kong combined, is “unprecedented in 400 years of economic history,” said London-based hedge fund manager Hugh Hendry, co-founder of Eclectica Asset Management, which manages $420 million.
Tags: real estate   bubble   finance   china  
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