Ownership and Governance of Critical Financial Infrastructure

SEBI has released the Bimal Jalan committee report about the ownership and governance of critical financial infrastructure. We’re going to need a similar report on the questions about entry into banking also.

200 Day Moving Average – The Pull Of Gravity

When allocating capital a successful method for increasing wealth is to buy cheap valuable assets and if you ever sell them then do so when the assets are expensive or very expensive. But how can one accurately perform mental calculations of value? I recommend using gold as the numeraire. This allows one to get . . . → Read More: 200 Day Moving Average – The Pull Of Gravity

No Massive Institutional Gold Market Change

Trace Mayer writes some good stuff, but his recent Massive Institutional Gold Market Change article hypes an midly interesting strategic development in the gold market. There are two statements he makes which are not correct.“gold demand that was previously satisfied with physical bullion through forward contracts between private parties can now be satisfied with . . . → Read More: No Massive Institutional Gold Market Change

Federal Reserve Eases On Interventions

On Thursday the Fed announced that it will end or significantly curb the use of three emergency programs that it had been using to provide cash to brokers and money-market funds.

The developments are additional signs that the Fed sees improving financial markets and that it will begin honoring its promise to back out . . . → Read More: Federal Reserve Eases On Interventions

What Do We Mean by Market Efficiency?

I ran into Jim again yesterday. Actually it would be more true to say that he ambushed me. I turned a corner and there he was. After the way he treated me in our first discussion reported here I was not particularly looking forward to talking to him again.

Jim said: “I enjoyed our . . . → Read More: What Do We Mean by Market Efficiency?

In Defense of Speculators, Part III: Credit-Default Swaps

Not so long ago, AIG was the world’s largest insurer. In the year 2000, its value peaked at over $265 billion, and just one year ago, the insurance giant was worth nearly $170 billion. But last month, facing bankruptcy, the once-proud AIG—now worth a mere $2.65 billion—became the largest welfare recipient in U.S. history, . . . → Read More: In Defense of Speculators, Part III: Credit-Default Swaps

SEC Bans Short Selling of 79 Financial Stocks (In Defense of Speculators, Part II)

When the Federal Reserve fronted $80 billion to insurance giant AIG last week, most people were blinded by the staggering size of the bailout. Few people took time to consider the fact that the Fed—a pseudo-private banking cartel with the government-granted monopoly power to create money out of thin air—made this purchase/loan with no . . . → Read More: SEC Bans Short Selling of 79 Financial Stocks (In Defense of Speculators, Part II)