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Observations Lab

Non-Linear Views on Financial Markets and the Economy, based on Friedrich Hayek's paper on decentralized knowledge, "The Use of Knowledge in Society".

Dr. Brian Taylor, Chief Economist
Global Financial Data, February 27 2020
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Tony Coniaris, Portfolio Manager
Harris Associates, September 5, 2019
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By Daisuke Ikeda, Toan Phan, and Tim Sablik
Federal Reserve Bank of Richmond, Economic Brief, No. 20-01, January 2020
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Mark Robertson
Aviva Investors,  30 September 2019
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Dr. Brian Taylor
Global Financial Data, Aug 14 2019
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Latest Observations
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Liminal Spaces in Financial Markets

Liminal spaces are understood as physical locations that are transitional in nature, somewhere between origin and destination. Their aesthetics is associated with feelings of eeriness, apprehension, and nostalgia. Now, what would be its equivalent in financial markets?

Investment Office, January 2023

Long-term Returns to Dutch and Indonesian stocks

The Netherlands has more stock market history than any other country. Trading in shares of the East India Company began trading in Amsterdam in 1601 and continued to trade until the company went bankrupt in 1794.

Dr. Brian Taylor, Chief Economist
Global Financial Data, December 21, 2022

“In economics, things take longer to happen than you think they will, and they happen faster than you thought they could.”

Quote

Rudiger Dornbusch (1942–2002)
German economist, who subsequently moved to the United States, where he obtained his Ph.D. in economics from the University of Chicago

Market chaos as major players call the biggest bluff.

The FOMC met today and hiked rates. More than that, they set course for more to come and policymakers holding those up for a longer period. And the markets completely, totally, utterly rejected the "almighty" Fed. This is why.

Jeffrey Snider
Eurodollar University, 15 December 2022

Les devins, ou, commentaire des principales sortes de devinations :

"distingué en quinze livres, esquels les ruses et impostures de Satan sont descouvertes, solidement refutées, et separées d'avec les sainctes propheties et d'avec les predictions naturelles."

Caspar Peucer
Heudrik Connix, Anvers, 1584

''Twitter is both a social media company and a crime scene''

Quote

Elon Musk
Twitter, 10 December 2022

Banks aren't what you think they are which has become a huge, huge problem.

The world and the US$ in particular has operated on a virtual currency basis for decades. Without realizing it, most people have participated in this radical shift in money therefore banking. If currency is virtual, then what is it that banks actually do? Most people don't know or don't realize what banks really are and the world-altering consequences of this.

Jeffrey Snider
Eurodollar University, 10 December 2022

''Clarity in the stock market is always expensive to buy!''

Quote

Ken Fisher, Founder and Executive Chairman of Fisher Investments
Fisher Investments, Ken Fisher Debunks: “Don’t Buy In Until There is Clarity That You’re in a Bull Market”, 9 December 2022

Ken Fisher Debunks:

“Don’t Buy In Until There is Clarity That You’re in a Bull Market”,

Ken Fisher, Founder and Executive Chairman of Fisher Investments
Fisher Investments, 9 December 2022

“The markets lead the policymakers in the direction the markets believe are the greatest risks, because those risks become reality!”

Quote

Jeff Snider
Eurodollar University, "There is no mistaking these signals; that's the bad news", 8 December 2022

"Diversity is just another word for conformity. It’s the new way of saying conformity, diversity".

Excerpt

Steven Patrick Morrissey, also known as Morrissey, solo artist, and former frontman of The Smiths.
Morrissey Interview, The London Palladium, October 2022

On Paul Volcker’s Policy ‘Moments’:

"I think there was a second Volcker moment that gets less publicity but is also important, and that occurred in the summer and fall of 1982."

Enrique Martínez-García, "Monetary Policy at a Crossroads: Donald Kohn on Controlling Inflation, Ukraine Effects, Volcker-Era Lessons", 
Federal Reserve Bank of Dallas, Dallas Fed Economics, July 05, 2022

''Mapping the model to the estimated transfers, we find that the main purpose of the outsized Greek bailout was to prevent an exit from the eurozone and possible contagion.''

"Bailouts to avoid sovereign default were comparatively modest."

Pierre-Olivier Gourinchas, Philippe Martin, Todd Messer; The Economics of Sovereign Debt, Bailouts and the Eurozone Crisis
Board of Governors of the Federal Reserve System, International Finance Discussion Papers 1351, August 2022

The Bear Facts: Major U.S. Equity Sell‑Offs Since 1928

Historical drawdowns of 15% or more in the S&P 500 Index*

Sebastien Page CFA,Head of Global Multi‑Asset ; Som Priestley CFA,Multi‑Asset Solutions Strategist
T. Rowe Price,  September 2022

Singled Out: Historical Performance of Individual Stocks

Bryan Ting, PhD, Researcher; Wes Crill, PhD, Head of Investment Strategists and Vice President
Dimensional, Insights, May 11, 2022

The More Things Change…

I stopped in a local antique shop over the weekend. The owner is retiring and trying to clear out as much as she can before they close the doors so I paid a mere $3 for the Life magazine above. I think it might be worth many multiples of that price for investors who think our situation today is somehow uniquely bad. The cover headline could just as easily be describing today as 1970.

Joseph Y. Calhoun III
Alhambra Investments, Weekly Market Pulse: The More Things Change… September 5th, 2022

Powell’s White Whale

The lagged effect of inflation.

Douglas R. Terry, CFA
Alhambra Investments, September 1st, 2022

''The rise of Greta Thunberg will be looked back on as one of the most bizarre periods in our civilisation’s history...

...and will most surely be seen as one of the most ridiculous, and, sadly, destructive liberal media creations ever concocted."

Dr Steve Turley
Turley Talks, Where’s Greta?Thunberg’s DOOMSDAY Cult Has GONE BUST!!!, August 29, 2022

A guide to substitution in a high inflation world

A sideways look at economics

Kevin Loane
Fathom Consulting, 19 August 2022

''La Suisse est libre, et semble placée au milieu de l’Europe, comme la lumière sur le chandelier, tout exprès pour nous embarrasser.''

Quote from "Guerre aux Chaires d’Économie Politique."

Frédéric Bastiat
Libre-Échange, 13 juin 1847
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