The document discusses signs that the current bull market may be entering a "blow-off" or melt-up phase, characterized by accelerating price increases similar to other historical bubbles. While stock prices are very high, the author notes that price alone is not sufficient to indicate an impending bubble break. Recent signs of modest price acceleration over the last six months could signal the beginning of a final price surge. The author presents models where a 9-18 month acceleration in stock prices reaching gains of 60% would resemble past bubbles. Other indicators like improving fundamentals and signs of investor euphoria, while still lacking, have begun developing in recent months. No two bubbles are exactly the same, so identifying a late-stage bubble requires reconc
This document analyzes historic turning points in real estate markets. It examines changes in market psychology and indicators at turning points in the US since the 1980s and compares them to more distant periods. Turning points are associated with changes in optimism about future home price trends, shifts in public interpretation of the market, and evidence of supply response to high prices. The document summarizes past real estate boom endings, including the 1990s US housing market downturn and stock market decline in 2000. It explores psychological factors like "uniqueness bias" that may cause investors to underestimate supply responses to price increases.
3 Jan 2009: a bottom in breakevens, commodities, and global yields?Laeeth Isharc
The response of the authorities has been without precedent - the US has a new president, and perhaps confidence in the new administration may stave off the worst consequences of the epidemic contagion of fear - for now, at least. It is certain that for the time being we shall avoid the 29-33 collapse that was associated with every sovereign issuer in Europe except Britain, and much of Latin America and Asia defaulting as well as large numbers of banks in the US (in the days before deposit insurance).
The US dollar may be bottoming based on several factors:
1) Valuation measures like the Big Mac Index and OECD measures imply the dollar is undervalued by 30-35%
2) Increases in US oil and gas production from shale could reduce US imports and improve the trade balance by a third
3) A turnaround in US economic confidence and growth could support a rise in the dollar through upward revisions to interest rate expectations
OXBOW ADVISORS APRIL 2017 MARKET COMMENTSKeys Oakley
The stock market’s movement in 2016 was most Unusual, Unpredictable, and downright Crazy compared to previous years. Between politics and economics, it was a classic case study of extremes...
C.A.R’s 2014 Housing Forecast - The Real Estate Report December/JanuaryAMSI, San Francisco
The Real Estate Report December/January, local market trends San Francisco: "C.A.R’s 2014 Housing Forecast" by AMSI's Real Estate Broker Robb Fleischer
This document is an NBER working paper that proposes an algorithm for defining recessions based on monthly US economic data. The algorithm nearly perfectly matches the official NBER recession dates, with the only disagreement being over the 1973 peak. The algorithm indicates that as of June 2008, the data do not meet the recession threshold and would need to worsen significantly. The paper argues for a clear, algorithmic definition of recessions in place of the current NBER committee approach. It also critiques alternative definitions like two consecutive quarters of GDP decline.
This document analyzes historic turning points in real estate markets. It examines changes in market psychology and indicators at turning points in the US since the 1980s and compares them to more distant periods. Turning points are associated with changes in optimism about future home price trends, shifts in public interpretation of the market, and evidence of supply response to high prices. The document summarizes past real estate boom endings, including the 1990s US housing market downturn and stock market decline in 2000. It explores psychological factors like "uniqueness bias" that may cause investors to underestimate supply responses to price increases.
3 Jan 2009: a bottom in breakevens, commodities, and global yields?Laeeth Isharc
The response of the authorities has been without precedent - the US has a new president, and perhaps confidence in the new administration may stave off the worst consequences of the epidemic contagion of fear - for now, at least. It is certain that for the time being we shall avoid the 29-33 collapse that was associated with every sovereign issuer in Europe except Britain, and much of Latin America and Asia defaulting as well as large numbers of banks in the US (in the days before deposit insurance).
The US dollar may be bottoming based on several factors:
1) Valuation measures like the Big Mac Index and OECD measures imply the dollar is undervalued by 30-35%
2) Increases in US oil and gas production from shale could reduce US imports and improve the trade balance by a third
3) A turnaround in US economic confidence and growth could support a rise in the dollar through upward revisions to interest rate expectations
OXBOW ADVISORS APRIL 2017 MARKET COMMENTSKeys Oakley
The stock market’s movement in 2016 was most Unusual, Unpredictable, and downright Crazy compared to previous years. Between politics and economics, it was a classic case study of extremes...
C.A.R’s 2014 Housing Forecast - The Real Estate Report December/JanuaryAMSI, San Francisco
The Real Estate Report December/January, local market trends San Francisco: "C.A.R’s 2014 Housing Forecast" by AMSI's Real Estate Broker Robb Fleischer
This document is an NBER working paper that proposes an algorithm for defining recessions based on monthly US economic data. The algorithm nearly perfectly matches the official NBER recession dates, with the only disagreement being over the 1973 peak. The algorithm indicates that as of June 2008, the data do not meet the recession threshold and would need to worsen significantly. The paper argues for a clear, algorithmic definition of recessions in place of the current NBER committee approach. It also critiques alternative definitions like two consecutive quarters of GDP decline.
- The US presidential election of Donald Trump was unexpected but may not lead to significant changes in policy due to constraints on implementing radical changes.
- Trump's economic proposals include tax cuts to boost growth, but the current global situation is different than in Reagan's time and tax cuts may not have the same effect.
- The world economy is now more complex and interconnected, influenced by events like conflicts in the Middle East, so outcomes are less predictable than in prior models and small decisions can have large impacts through amplification. Predicting the effects of Trump's policies is difficult in this new economic environment.
US mid-terms are a key volatility factor this weekHantec Markets
Key macro events are overbearing on markets into this week. The US mid-terms are a major near term volatility factor, along with the US/China trade dispute, FOMC monetary policy and as ever, Brexit. We look at the key factors to consider for forex, equity markets and commodities.
This document presents a new FIR filter method for dating US recessions in real time using unemployment rate and employment trend index data. The filter, called the M-Coppock curve, is a modified version of the Coppock curve commonly used in equity markets. It is shown to peak near economic troughs of post-WWII recessions, allowing recessions to be called in real time. While current models from the Federal Reserve banks forecast low recession probabilities, the author's M-Coppock curve has been trending upward since 2014, indicating weakening labor market strength despite falling unemployment levels. The simple and intuitive M-Coppock curve approach aims to address issues with instability in other predictive models.
Howard Marks provides a balanced discussion of the current market environment, covering both positives and negatives. On the positive side, the U.S. economy is growing and corporate profits are increasing. However, asset valuations are very high by historical standards and investor behavior has become increasingly risky. Given the high prices and uncertainties, Marks favors a cautious stance rather than aggressiveness. While not recommending getting out of the market, he advocates incorporating more defensiveness into portfolio management strategies.
- The document provides the monthly viewpoint from the Chief Investment Officer of ACPI Investments Ltd. discussing various investment topics and market outlook.
- It notes that while markets have rallied on hopes for pro-business policies under Trump, controversial statements threaten his agenda and markets may be overly optimistic given implementation risks and timelines.
- The global economy appears to be in a new investment cycle, but it is unclear if this will translate to sustained reflation or just a temporary boost. Central banks are beginning to tighten policies as growth improves.
- The document discusses the recent volatility in global stock markets and the fear that has gripped investors. While there are valid economic concerns, fear has become contagious and may be overstating the risks.
- The US economy has held up better than expected so far in 2016, with steady job growth and consumer spending. However, tightening financial conditions have led to declines in stock valuations.
- Central banks are again trying to ease financial conditions through further monetary stimulus in order to support the economy and stabilize markets, though investor faith in their actions may be waning.
The document summarizes the current state of the US economy and financial markets. It notes that most economic indicators point to a weak economy, with GDP growth collapsing in the fourth quarter. Fear and uncertainty in the markets have declined from their peaks but are still elevated. The author argues that in the short term, stimulus measures and increased certainty around political events will help reduce fear and support a stock market rally. Medium term, markets should return to fundamentals and valuation. Long term, inflation may rise again and further squeeze consumers, though recovery will be slow.
1) A Donald Trump presidency could provide an initial boost to the US economy through tax cuts, infrastructure spending, and reducing regulations. However, the effects may not be sustainable long-term.
2) Financing the increased spending through both tax cuts and infrastructure investment would significantly raise the federal budget deficit and national debt. The US debt could surpass $20 trillion.
3) Bond investors would likely still purchase the increased Treasury bonds to finance the spending, though yields on 10-year Treasuries could rise above 2% initially as supply increases. The demand for safe assets would continue long-term.
30638 tl bill gross investment outlook may 2015-exp 5.30.16_3Frank Ragol
Bill Gross provides a lengthy outlook on the current state of investment markets and the economy. He argues that after 35 years, the great bull market that began in 1981 is showing signs of ending, with asset prices reaching unsustainable levels. While declines may not be imminent, future returns will likely be low. Investors should recognize the current "sense of an ending" and shift to more defensive strategies focusing on income rather than capital gains to better weather the changing environment.
Fasanara Capital Investment Outlook | February 1st 2015
1. Seismic Activity On The Rise
2. No Volatility No Gain
3. The Role Of Optionality
4. Crystal Ball
5. Deflation Is A Multi-Year Process
6. Three Big Trades for 2015
Trump and Jackson Hole will be key for forex markets this weekRichard Perry
The political risk from Donald Trump's increasingly chaotic presidency continue to concern financial traders. Resignations and rumours of resignations have been pulling markets around recently amid concern over the impact it has on President Trump's ability to substantially achieve anything in the White House. Markets will continue to focus on this but also look towards the Jackson Hole Economic Symposium this week. We consider the outlook for forex, equities and commodities.
1) The US presidential election in November is causing some concern among clients about its potential impact on the economy and markets.
2) Historically, stock market returns in presidential election years have averaged 6.5% versus 7.9% in non-election years, though removing recession years like 2008 reduces the difference.
3) No single president has ever enacted all their proposed changes due to checks and balances, so markets are unlikely to change dramatically based on election outcomes alone. It's best for long-term investors to stay the course and not make decisions based on unknown potential outcomes.
Topics discussed by Dr. Peter Linneman:
- Does it all come to an end if interest rates rise?
- Is a recession just around the corner? What warning signs should we look for?
- What does the new Administration and Congress mean for real estate and the economy?
- Audience questions
- And more!
Rumpelstiltskin at the Fed by Harley Bassman, PIMCO, executive vice presiden...Nigel Mark Dias
Rumpelstiltskin at the Fed by Harley Bassman, PIMCO, executive vice president & portfolio manager
SUMMARY
Has the Federal Reserve reached the bottom of its policy toolkit? Many things are still possible, at least in theory, including negative interest rates (which we believe would be ineffective and potentially harmful) or a “helicopter drop” of money. Another option is to resurrect a successful plan from 83 years ago: Purchase a tremendous amount of gold at a price substantially higher than market levels.
A massive Fed gold purchase program might finally lift the anchor on inflationary expectations and consumers’ spending habits. It would increase the price of a globally recognized store of value. It almost sounds like a fairy tale – but it’s happened before.
Though it seems incredibly farfetched, a massive Fed gold purchase program could echo a Depression-era effort that effectively boosted the U.S. economy.
Warren Buffett famously railed against the shiny yellow metal in 2012 when he noted all the gold in the world could be swapped for the totality of U.S. cropland and seven ExxonMobils with $1 trillion left over for “walking-around money.” His point was that these assets can generate significant returns while owning gold produces no discernable cash flow.
While this observation is certainly true, the rub is that this is not a fair comparison since gold is not an asset; rather, it should be considered an alternate currency. Pundits often describe the five factors that define “money”:
Its supply is controlled or limited,
It is fungible/uniform – this is why diamonds cannot qualify,
It is portable – this is why land cannot qualify,
It is divisible – thus art cannot be money, and
It is liquid – this means people will readily accept it in exchange.
By this definition, gold is certainly a form of money, and to Mr. Buffett’s point, one also earns no cash flow on paper dollars, euros, yen or yuan.
Bordo and haubrich Predictive power of term structure of interest ratesAliya Urazaliyeva
This document analyzes the relationship between interest rate spreads and economic growth over the period from 1875 to 1997. It finds that spreads between corporate bond yields and commercial paper reliably predict future growth, with predictive ability varying across different monetary regimes. Regimes with less credible, more inflationary monetary policies tend to have spreads that are better predictors of growth. The document uses statistical methods like predictive regressions and stability tests to analyze this relationship over different sub-periods and monetary regimes.
The Causal Analysis of the Relationship between Inflation and Output Gap in T...inventionjournals
The purpose of the paper is to study dynamic relationships between the inflation and output gap by using Granger causality, Impulse response and variance decompositions analysis within VECM framework for the quarterly data over the first period of 2003 and second period of 2016. The results of the study indicate that the output gap Granger cause the inflation in Turkey both in short-and long-runs. Also, sign of the causality is negative and same causal relationships between two variables hold beyond the sample period. The results should be taken as an evidence of the conclusion that the output gap has important implications for the CBRT's monetary policy.
The document summarizes a real estate market update seminar presented by Joshua Wilton of Weichert Realtors Princeton. It provides analysis of the local real estate markets through metrics like inventory levels, absorption rates, pending sales and price ranges. Town-by-town statistics on listings, pending sales and absorption rates are presented to give a picture of current market conditions locally.
Lattice Energy LLC-Larsen Memo re Stock Indexes vs Gold Price Ratios-August 1...Lewis Larsen
Memo prompted by anomalies in price of Gold versus price of stocks (DJIA/Gold ratio) that occurred in August 2011. Quoting: “Gold is not presently expensive because of a soon-to-be rapid acceleration in overall rate of inflation. In my view, that scenario is very unlikely, especially given the reduction in government fiscal stimulus now starting in the U.S. and Europe. Recent behavior of U.S. Treasury securities supports that notion --- yields on the long-end of the debt markets (which Fed has very little direct control over) have actually gone down significantly since the latest market break began. As of mid-session this morning, the 30-year US Treasury bond was being priced to yield 3.53%; if a pending inflationary surge were the underlying factor spooking today’s equity markets, long bond yields would be going up not down. Three-month T-bill rates are within a rounding-error of zero %; no hints of inflationary pressures there either. The fact is that the U.S. economy is still quite weak and there is little demand for short-term credit --- U.S. consumers aren't in good enough financial shape to help run-up hard asset prices and create inflationary pressures.”
- The US presidential election of Donald Trump was unexpected but may not lead to significant changes in policy due to constraints on implementing radical changes.
- Trump's economic proposals include tax cuts to boost growth, but the current global situation is different than in Reagan's time and tax cuts may not have the same effect.
- The world economy is now more complex and interconnected, influenced by events like conflicts in the Middle East, so outcomes are less predictable than in prior models and small decisions can have large impacts through amplification. Predicting the effects of Trump's policies is difficult in this new economic environment.
US mid-terms are a key volatility factor this weekHantec Markets
Key macro events are overbearing on markets into this week. The US mid-terms are a major near term volatility factor, along with the US/China trade dispute, FOMC monetary policy and as ever, Brexit. We look at the key factors to consider for forex, equity markets and commodities.
This document presents a new FIR filter method for dating US recessions in real time using unemployment rate and employment trend index data. The filter, called the M-Coppock curve, is a modified version of the Coppock curve commonly used in equity markets. It is shown to peak near economic troughs of post-WWII recessions, allowing recessions to be called in real time. While current models from the Federal Reserve banks forecast low recession probabilities, the author's M-Coppock curve has been trending upward since 2014, indicating weakening labor market strength despite falling unemployment levels. The simple and intuitive M-Coppock curve approach aims to address issues with instability in other predictive models.
Howard Marks provides a balanced discussion of the current market environment, covering both positives and negatives. On the positive side, the U.S. economy is growing and corporate profits are increasing. However, asset valuations are very high by historical standards and investor behavior has become increasingly risky. Given the high prices and uncertainties, Marks favors a cautious stance rather than aggressiveness. While not recommending getting out of the market, he advocates incorporating more defensiveness into portfolio management strategies.
- The document provides the monthly viewpoint from the Chief Investment Officer of ACPI Investments Ltd. discussing various investment topics and market outlook.
- It notes that while markets have rallied on hopes for pro-business policies under Trump, controversial statements threaten his agenda and markets may be overly optimistic given implementation risks and timelines.
- The global economy appears to be in a new investment cycle, but it is unclear if this will translate to sustained reflation or just a temporary boost. Central banks are beginning to tighten policies as growth improves.
- The document discusses the recent volatility in global stock markets and the fear that has gripped investors. While there are valid economic concerns, fear has become contagious and may be overstating the risks.
- The US economy has held up better than expected so far in 2016, with steady job growth and consumer spending. However, tightening financial conditions have led to declines in stock valuations.
- Central banks are again trying to ease financial conditions through further monetary stimulus in order to support the economy and stabilize markets, though investor faith in their actions may be waning.
The document summarizes the current state of the US economy and financial markets. It notes that most economic indicators point to a weak economy, with GDP growth collapsing in the fourth quarter. Fear and uncertainty in the markets have declined from their peaks but are still elevated. The author argues that in the short term, stimulus measures and increased certainty around political events will help reduce fear and support a stock market rally. Medium term, markets should return to fundamentals and valuation. Long term, inflation may rise again and further squeeze consumers, though recovery will be slow.
1) A Donald Trump presidency could provide an initial boost to the US economy through tax cuts, infrastructure spending, and reducing regulations. However, the effects may not be sustainable long-term.
2) Financing the increased spending through both tax cuts and infrastructure investment would significantly raise the federal budget deficit and national debt. The US debt could surpass $20 trillion.
3) Bond investors would likely still purchase the increased Treasury bonds to finance the spending, though yields on 10-year Treasuries could rise above 2% initially as supply increases. The demand for safe assets would continue long-term.
30638 tl bill gross investment outlook may 2015-exp 5.30.16_3Frank Ragol
Bill Gross provides a lengthy outlook on the current state of investment markets and the economy. He argues that after 35 years, the great bull market that began in 1981 is showing signs of ending, with asset prices reaching unsustainable levels. While declines may not be imminent, future returns will likely be low. Investors should recognize the current "sense of an ending" and shift to more defensive strategies focusing on income rather than capital gains to better weather the changing environment.
Fasanara Capital Investment Outlook | February 1st 2015
1. Seismic Activity On The Rise
2. No Volatility No Gain
3. The Role Of Optionality
4. Crystal Ball
5. Deflation Is A Multi-Year Process
6. Three Big Trades for 2015
Trump and Jackson Hole will be key for forex markets this weekRichard Perry
The political risk from Donald Trump's increasingly chaotic presidency continue to concern financial traders. Resignations and rumours of resignations have been pulling markets around recently amid concern over the impact it has on President Trump's ability to substantially achieve anything in the White House. Markets will continue to focus on this but also look towards the Jackson Hole Economic Symposium this week. We consider the outlook for forex, equities and commodities.
1) The US presidential election in November is causing some concern among clients about its potential impact on the economy and markets.
2) Historically, stock market returns in presidential election years have averaged 6.5% versus 7.9% in non-election years, though removing recession years like 2008 reduces the difference.
3) No single president has ever enacted all their proposed changes due to checks and balances, so markets are unlikely to change dramatically based on election outcomes alone. It's best for long-term investors to stay the course and not make decisions based on unknown potential outcomes.
Topics discussed by Dr. Peter Linneman:
- Does it all come to an end if interest rates rise?
- Is a recession just around the corner? What warning signs should we look for?
- What does the new Administration and Congress mean for real estate and the economy?
- Audience questions
- And more!
Rumpelstiltskin at the Fed by Harley Bassman, PIMCO, executive vice presiden...Nigel Mark Dias
Rumpelstiltskin at the Fed by Harley Bassman, PIMCO, executive vice president & portfolio manager
SUMMARY
Has the Federal Reserve reached the bottom of its policy toolkit? Many things are still possible, at least in theory, including negative interest rates (which we believe would be ineffective and potentially harmful) or a “helicopter drop” of money. Another option is to resurrect a successful plan from 83 years ago: Purchase a tremendous amount of gold at a price substantially higher than market levels.
A massive Fed gold purchase program might finally lift the anchor on inflationary expectations and consumers’ spending habits. It would increase the price of a globally recognized store of value. It almost sounds like a fairy tale – but it’s happened before.
Though it seems incredibly farfetched, a massive Fed gold purchase program could echo a Depression-era effort that effectively boosted the U.S. economy.
Warren Buffett famously railed against the shiny yellow metal in 2012 when he noted all the gold in the world could be swapped for the totality of U.S. cropland and seven ExxonMobils with $1 trillion left over for “walking-around money.” His point was that these assets can generate significant returns while owning gold produces no discernable cash flow.
While this observation is certainly true, the rub is that this is not a fair comparison since gold is not an asset; rather, it should be considered an alternate currency. Pundits often describe the five factors that define “money”:
Its supply is controlled or limited,
It is fungible/uniform – this is why diamonds cannot qualify,
It is portable – this is why land cannot qualify,
It is divisible – thus art cannot be money, and
It is liquid – this means people will readily accept it in exchange.
By this definition, gold is certainly a form of money, and to Mr. Buffett’s point, one also earns no cash flow on paper dollars, euros, yen or yuan.
Bordo and haubrich Predictive power of term structure of interest ratesAliya Urazaliyeva
This document analyzes the relationship between interest rate spreads and economic growth over the period from 1875 to 1997. It finds that spreads between corporate bond yields and commercial paper reliably predict future growth, with predictive ability varying across different monetary regimes. Regimes with less credible, more inflationary monetary policies tend to have spreads that are better predictors of growth. The document uses statistical methods like predictive regressions and stability tests to analyze this relationship over different sub-periods and monetary regimes.
The Causal Analysis of the Relationship between Inflation and Output Gap in T...inventionjournals
The purpose of the paper is to study dynamic relationships between the inflation and output gap by using Granger causality, Impulse response and variance decompositions analysis within VECM framework for the quarterly data over the first period of 2003 and second period of 2016. The results of the study indicate that the output gap Granger cause the inflation in Turkey both in short-and long-runs. Also, sign of the causality is negative and same causal relationships between two variables hold beyond the sample period. The results should be taken as an evidence of the conclusion that the output gap has important implications for the CBRT's monetary policy.
The document summarizes a real estate market update seminar presented by Joshua Wilton of Weichert Realtors Princeton. It provides analysis of the local real estate markets through metrics like inventory levels, absorption rates, pending sales and price ranges. Town-by-town statistics on listings, pending sales and absorption rates are presented to give a picture of current market conditions locally.
Lattice Energy LLC-Larsen Memo re Stock Indexes vs Gold Price Ratios-August 1...Lewis Larsen
Memo prompted by anomalies in price of Gold versus price of stocks (DJIA/Gold ratio) that occurred in August 2011. Quoting: “Gold is not presently expensive because of a soon-to-be rapid acceleration in overall rate of inflation. In my view, that scenario is very unlikely, especially given the reduction in government fiscal stimulus now starting in the U.S. and Europe. Recent behavior of U.S. Treasury securities supports that notion --- yields on the long-end of the debt markets (which Fed has very little direct control over) have actually gone down significantly since the latest market break began. As of mid-session this morning, the 30-year US Treasury bond was being priced to yield 3.53%; if a pending inflationary surge were the underlying factor spooking today’s equity markets, long bond yields would be going up not down. Three-month T-bill rates are within a rounding-error of zero %; no hints of inflationary pressures there either. The fact is that the U.S. economy is still quite weak and there is little demand for short-term credit --- U.S. consumers aren't in good enough financial shape to help run-up hard asset prices and create inflationary pressures.”
Novel-tsotsi essays - Grade: A+ - Identify the positive and negative .... Tsotsi essay - In Athol Fugard’s tragic novel, “Tsotsi”, the theme of .... Review of the film "Tsotsi". - GCSE English - Marked by Teachers.com. The dramatic film ‘Tsotsi’ Free Essay Example. Tsotsi. Character Identity In Tsotsi | English - Year 11 WACE | Thinkswap. Write an Analysis of the cover of Tsotsi Free Essay Example. Literary essay - Tsotsi. Tsotsi Book Summary Essay Example. Eng HL Gr 11 NOTES - NOVEL - TSOTSI. Teaching Tsotsi: Notes. Tsotsi essay - thesistemplate.web.fc2.com. Tsotsi Study Guide Secondary - INTRODUCTION It is important to remember .... Literary essay - Tsotsi | PPT. Morris Tshabalala Character Analysis in Tsotsi | LitCharts. Tsotsi Essays. (PDF) Style, Tsotsi-style and Tsotsitaal | Rosalind Morris - Academia.edu. Tsotsi movie essay. tsotsi vrae.pdf - Identify the positive and negative occurrences that .... Tsotsi – Chapter 10 summary & analysis - YouTube. Tsotsi Book Summary - Tsosti is a grade 11 novel done during their .... AWESOME Tsotsi Essay Example copy - EXAMPLE ESSAY: SOOOO MUCH GOOD .... Fugard's Tsotsi: The missing novel | English in Africa. Tsotsi essay ideas. NB Publishers | Study Work Guide: Tsotsi Grade 11 Home Language. Tsotsi (Grade 11) Tsotsi Essay
Vikram Mansharamani is an expert on financial bubbles who authored the book "Boombustology". He believes it is possible to identify bubbles before they burst by analyzing multiple factors, including macroeconomics, microeconomics, psychology, politics, and ecology. While impossible to time exactly when a bubble will pop, this "boombustology" approach helps gauge risk. Mansharamani remains concerned about the risks of bubbles in areas like Chinese real estate and corporate debt, and believes a crisis in China could significantly impact the global economy and commodity markets.
Fasanara Capital | Investment Outlook
1. The Future Is Wide Open: Avoid The ‘Illusion Of Knowledge’ Trap
The single most dangerous thinking trap / optical illusion for investors today is to look at Trump, Brexit and Italy Referendum as non-events, buried in the past. We believe that 2017 may likely be driven by the same factors that failed to shape 2016. The non-events of 2016 are likely to be the drivers of 2017. Finally, we will get to find out if Brexit means Brexit, if Trump means Trump, if a failed Italian referendum means early elections and a membership of the EMU in jeopardy down the line.
2. Structural Shift: These Are Transformational Times
The macro outlook of the next years will be influenced the most by these structural trends:
› Protectionism, De-Globalization & De-Dollarization. In Pursuit of Inclusive Growth
› End of ‘Pax Americana’. The ascent of China. Geopolitical risks on the rise
› End of ‘Pax QE’. Markets without steroids, but still delusional.
› 4th Industrial Revolution: labor participation rate falling from 63% to 40% in 10 years?
3. Our Baseline Scenario: Bubble Unwind, Equities and Bonds Down
Starting this 2017, our major macro convictions are as follows:
› Global Tapering to progress
› US Dollar to keep grinding higher
› European Political Instability to worsen
› US Equities to weaken
This document analyzes whether there is evidence of an irrational bubble in the US farmland market. It begins with an introduction discussing Robert Shiller's warnings about a potential farmland bubble in 2011. It then reviews the historical 1980s farmland bubble crash and compares factors like interest rates, leverage levels, and insurance coverage between then and now. While farmland prices have risen steadily, current conditions do not closely resemble the 1980s in terms of these risk factors. The document goes on to discuss models for farmland valuation and categories of bubbles/fads. It concludes that while prices are supported by economic fundamentals currently, regulators should still monitor the market closely given its importance to many farmers' livelihoods
The document discusses economic bubbles, defining them as situations where asset prices exceed their fundamental value due to speculative demand. It then provides examples of different types of bubbles like market, commodity, and stock bubbles. The causes of bubbles are explained as irrational exuberance, herding behavior, short-termism, and monetary policy issues. Finally, the 5 stages of bubbles are outlined as displacement, boom, euphoria, profit-taking, and panic.
Housing Bubbles: A Survey by Christopher Mayer.
Columbia Business School, Columbia University, New York, NY 10027; NBER,
Cambridge, Massachusetts 02138; and Visiting Scholar, Federal Reserve Bank of New
York, New York, NY 10005
- The document discusses whether the current stock market is in a bubble. It notes that by some measures like price-to-earnings ratios, stocks are not yet in bubble territory as they were in 2000.
- It provides several facts to counter the "hair on fire" media coverage of the stock market: there are no true market gurus, markets tend to rise over time, trying to time the market often fails, and cash is not king compared to long term investing in stocks.
- Even if a bubble forms, bubbles always burst eventually but stocks recover over time, so investors should stick to their plan and not panic during downturns.
The document summarizes an article by Jeffrey Saut discussing the behavior of retail investors over the course of bull markets. It notes that retail investors tend to sell stocks too early after price increases, repurchase the same stocks at even higher prices, and hold on too long during market declines. The article cites a 1917 book that documented this behavior and concludes it still persists today. It warns that with the current bull market in its mature stage, retail investors following these typical patterns could see their stocks continue rising in the short term but face losses if the market declines.
The document discusses strategies for investing in different asset classes as the global economy transitions out of recession. It finds that:
1) Equity markets typically bottom out around three-quarters of the way through a recession and then rally in the following months, outperforming credit for around six months as the recession ends.
2) Once the recession has ended, credit typically outperforms equities for an average of 21 months as equities underperform.
3) Government bond yields typically continue falling for around two years after a recession ends, providing opportunities to benefit from holding bonds even after the recession.
The financial crisis was caused by a combination of deregulation of the banking sector, lack of adequate supervision, and the application of flawed economic theories. Banks took on increasingly risky assets due to moral hazard from government guarantees. Their balance sheets became tightly linked to asset bubbles like the housing bubble. When the bubbles burst, banks' balance sheets crashed, threatening the financial system. To address the crisis, governments need Keynesian policies to sustain demand while banks deleverage by shrinking their inflated balance sheets. Recapitalizing banks will substitute government debt for private debt.
I had heard that, at the start of the Great Depression, JP Morgan an.pdfamiteksecurity
I had heard that, at the start of the Great Depression, JP Morgan and other bankers attempted to
prevent the depression by purchasing some of the overpriced stock.
Did the actions of JP Morgan and the other bankers have any effect on the US economy at the
time? Were the effects of the Great Depression mitigated by their actions?
Solution
Not really. While it\'s possible that the Morgan intervention softened the initial stock market
decline, the vast majority of the ultimate collapse in securities prices, commodity prices,
industrial production, and the banking sector took place after the purchases had been liquidated.
First some history: the bankers\' pool intended to lift the stock market was assembled at the J.P.
Morgan & Co. offices on October 24, 1929, \"Black Thursday\", the initial day of market chaos.
They pooled their resources and directed broker Richard Whitney to place high bids on blue chip
stocks at the NYSE to lift the confidence of the markets. This stemmed the crash on Thursday
and led to a rally that continued the next two days. Indeed, the following Sunday\'s New York
Times lauded the \"carefully arranged\" plan to boost the market, and mentioned that the
inclusion of the First National Bank in the buyers\' pool the next day confirmed to Wall Street
that \"the danger of panic had been averted\". Some history of these events is provided in the
Wikipedia article on the crash.
Alas, the Monday and Tuesday immediately following this confident appraisal - October 28 and
29, 1929 - are known as Black Monday and Tuesday, respectively. They experienced the second
and fourth largest daily percentage DJIA declines in history, combining for easily the largest
two-day percentage decline in history. Most newspapers at the time described the bankers\' pool
as waiting to intervene until late Tuesday, when they cut margin requirements and placed buying
orders (see AP article). An AP article describing the crash on Monday opened with \"powerful
financial interests stepped aside today and let the stock market drop...\". Finally, on Wednesday
the bankers\' pool entered with strong buying orders, leading to the third highest daily percentage
DJIA increase in history. The next day the pool apparently stepped away from the markets once
more.
It kept going like this for a little while, with some more volatility in markets over the next few
weeks but eventual stabilization and partial recovery. Finally, the banking group quietly wrapped
up its activities in February 1930, with press accounts mentioning that it \"come out about
even\".
Given all this, it\'s possible that the bankers\' pool offered some initial stabilization of the
markets. (Although even that\'s not clear: from press accounts, it seems just as likely that
volatility was increased by the erratic day-to-day decisions of the pool.) But again, any
significant effect seems unlikely, because the vast majority of the carnage in the Great
Depression took place after the pool had been liquid.
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The ebb and flow of financial markets brings with it a shift in focus from one theme to another, often amplifying the different factors affecting the market. As discussed in our latest issues of Monthly Perspectives, risk has moved to the forefront for investors. Most recently, the unexpected outcome of the Brexit vote brought a wave of political uncertainty and with it, an increased focus on a broader theme: geopolitical risk.
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Ethical Ideas in Indian Philosophical Tradition 4.1–4.28 Hinduism 4.1 Four Principal Moral Ends 4.1 Varnashrama Dharma 4.2 Contents xi Bhagavat Gita 4.3 Main Message 4.3 Paths to Salvation 4.3 Virtues 4.4 Action without Craving 4.4 Positive and negative emotions 4.5 Comparison with Western Moral Ideals 4.5 Other Aspects of Gita’s Moral Message 4.6 Moral Criteria and Concepts 4.6 Law of Karma 4.7 Manu’s Ideas 4.7 Mahabharata 4.8 Samyama 4.8 Jainism 4.9 Ahimsa 4.9 Path to Salvation 4.10 Five Moral Principles 4.10 Pride 4.10 Buddhism 4.11 Life of Buddha 4.11 Conceptual framework of Buddhist thought 4.11 Truth of Dukkha 4.12 Origin of Dukkha 4.12 Cessation of Dukkha 4.13 Path Leading to the Cessation of Dukkha 4.13 Prescriptions for Family and Society 4.14 Non-Violence and Peace 4.14 Middle Course 4.15 Altruism 4.15 Gandhian Ethics 4.15 Faith in God 4.16 Ethical Conduct 4.16 Truth 4.17 Service to Society 4.17 Purity of Heart 4.18 Ends and Means 4.18 Human Nature 4.18 xii Contents Ahimsa 1.19 Non-violent Non-cooperation 4.20 Qualities of a Satyagrahi 4.20 Gandhi’s Economic Ideas 4.21 Summary 4.22 Practice Questions 4.27 References 4.28 5. Lessons From The Lives Of Great Indian Leaders, Reformers And Administrators 5.1–5.39 Introduction and Approach 5.1 Human Values 5.2 Vivekananda 5.4 Discovery of Real India 5.4 Awakening his Countrymen 5.5 His Spiritual Thoughts 5.5 His Contributions to India 5.6 His Contributions to Hinduism 5.7 Some Famous Sayings of Vivekananda 5.7 Ramakrishna Paramahamsa 5.8 Intense Spiritual Practices 5.8 Contributions of Sri Ramakrishna to World Culture 5.9 Other Contributions 5.10 Sri Aurobindo 5.10 The Patriot 5.11 A Divine Life 5.11 A Great Litterateur 5.11 Five Dreams 5.12 Raja Ram Mohan Roy 5.13 Religious Reforms 5.14 Social Reforms 5.14 Education 5.15 Journalism 5.15 Religious Catholicity 5.15 Dayananda Saraswati 5.15 Transformative Event 5.16 Spiritual Search 5.16 Basic Doctrine 5.16 Contents xiii Practical Reformer 5.17 Opposition to Obscurantism 5.17 Assessment 5.18 Narayana Guru 5.18 Education 5.18 Marriage 5.19 Spiritual Wanderings 5.19 Religious Mission 5.19 Opposition to Old Customs 5.19 Commandments 5.20 Tolerance and Catholicity 5.20 Sir Rabindranath Tagore 5.21 Nobel Prize 5.21 Poetic Vision of India
The document outlines Joe Kostner's final decision checklist that he uses before making an investment. It contains 8 items that evaluate whether the decision maker is tired, has done sufficient research, understands the business, has conservative balance sheet and good management, provides value to customers, has downside protection from a moat or assets, and has significantly more upside than downside potential. The checklist is meant to help stay disciplined and avoid mistakes by fully understanding a business before investment.
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Sumantra Ghoshal discusses how the context or "smell" of a company's culture can profoundly impact employee behaviors and performance. Specifically, he contrasts a culture of "constraint, compliance, control, and contract" which feels oppressive like the summer heat of Calcutta, versus one of "stretch, discipline, trust and support" which feels invigorating like the forest in Fontainebleau. Ghoshal's research found that high-performing companies are able to intentionally cultivate a culture characterized by the latter dimensions, and that with determination a company can shift its cultural context over time.
Jim Chanos is the founder of Kynikos Associates, one of the largest fundamental short selling hedge funds. He became involved in short selling after correctly identifying a fraud as an analyst in the 1980s. Chanos believes short selling provides an important check on markets and enables long investors to take on more risk. Rather than viewing his fund as benefiting from market declines, Chanos sees it as providing "insurance" to investors by hedging downside risk and allowing clients to increase their long exposure. He manages risk by operating different funds, including a market neutral long/short fund and a fund that maintains a net long position despite holding significant short positions.
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Companies need a strategy that fits the predictability and malleability of their sector. With an increasing amount of industries being subject to disruption it’s a fair bet that the strategic adaptability needs to increase.
The immediate effect of management skill might be larger in a turn-around candidate but it also requires skill to fortify the moats that long term keep competitors at bay.
The document discusses how difficult it is for people to accurately predict how they will respond to future risks and challenges. It provides the example of a friend who achieved his goal of becoming a doctor against all odds, but is now disappointed in his career. People are poor forecasters of their future selves and tend to ignore important context when anticipating future situations. Investors in particular struggle to predict how fearful or greedy they will feel during market downturns or surges. The best approach is to use past behavior as a guide rather than trying to envision hypothetical future responses.
The document discusses the concept of the Ouroboros, a snake eating its own tail, as a metaphor for the current financial environment where low volatility is feeding into even lower volatility. It argues that the multi-trillion dollar short volatility trade exposes the global financial system to potentially violent increases in volatility if interest rates rise or a shock occurs. Central bank stimulus and share buybacks have contributed to unprecedented demand for yield assets and a giant short volatility position incorporated in various investment strategies, setting the stage for a sharp rise in volatility.
This document discusses the problems with how people consume news today. It argues that news is quickly outdated, news producers have incentives to prioritize quantity over quality, and consuming too much news can hijack people's attention and prevent deeper thinking. It recommends being more selective with news by focusing on publications that add long-term value and reading fewer articles and more books over time.
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Bill Ackman, the founder of Pershing Square Capital Management, has experienced significant losses in recent years totaling billions of dollars. This has led to redemptions by investors totaling $2 billion and a halving of assets under management to $9.5 billion. Ackman's most recent defeat was losing a proxy battle for board seats at ADP in November. The article discusses Ackman's past successes, recent failures including Valeant and Herbalife short positions, as well as his outlook going forward as he works to recover investor capital and confidence.
This document discusses the growing consensus among lawmakers that large technology companies like Google, Facebook, and Amazon have become too powerful and need to be reigned in through increased regulation. It outlines several regulatory strategies being considered, including narrowly targeting specific problems, restricting mergers and acquisitions, enforcing existing laws by classifying tech companies under categories like media or utilities, giving users ownership of their own data to allow portability between platforms, and breaking up the largest companies. Each strategy comes with concerns about impacts on innovation, consumer benefits, and the ability of US companies to compete internationally.
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1. 1
Viewpoints January 3, 2018
Bracing Yourself for a Possible Near-Term Melt-Up
(A Very Personal View)1
Jeremy Grantham
Ifind myself in an interesting position for an investor from the value school. I recognize on one
hand that this is one of the highest-priced markets in US history. On the other hand, as a historian
of the great equity bubbles, I also recognize that we are currently showing signs of entering the
blow-off or melt-up phase of this very long bull market. The data on the high price of the market
is clean and factual. We can be as certain as we ever get in stock market analysis that the current
price is exceptionally high. In contrast, my judgment on the melt-up is based on a mish-mash of
statistical and psychological factors based on previous eras, each one very different, so that much of
the information available is not easily comparable. It also leans very heavily on a few US examples.
Yet, strangely, I find the less statistical data more compelling in this bubble context than the simple
fact of overpricing. Whether you will also, dear reader, remains to be seen. In any case, my task in
this note is to present the evidence, both statistical and touchy-feely, as clearly as I can.
So let’s start by looking very hard at all the great bubbles of the past, searching for useful guides to
the future. The classic examples are not just characterized by higher-than-average prices. Price alone
seems to me now to be by no means a sufficient sign of an impending bubble break. Among other
factors, indicators of extremes of euphoria seem much more important than price. Ben Graham, as
quoted two quarterly letters ago, said that as far as he could see no bubble had ever broken (by 1963)
without being accompanied by signs of real excess such as those found in 1929. Two months ago,
Robert Shiller also made the point (in the Sunday New York Times) – as I will do – that not nearly
enough signs of euphoria were yet present to make this look like a late-stage bubble. (Although in
my opinion they have finally begun to pick up in the last two or three months.) And Robert Shiller
was one of a very small group predicting a future market collapse in 1999, and one of a few handfuls
with us in 2006 focusing on the future risks from an unprecedented US housing bubble breaking
due to vulnerable mortgages. So when he held his fire this time on the issues of a market crash, as I
have done, waiting for more evidence, I took considerable comfort. After all, for a major investment
bubble to burst it must first form, and this one has been very slow to do that, at least until recently.
1
My job at GMO is an enviable one: to comment on any broad issue that might affect the market. My views are not
always closely aligned with those of our various investment teams at GMO, including Asset Allocation, the group to
which I belong.
10. 10 Bracing Yourself for a Possible Near-Term Melt-Up
January 3, 2018
The Fed’s role in recent bubbles
Taking a different tack, we should look at the policy of what I call the Greenspan-Bernanke-Yellen
Fed. This policy of pushing down generally on rates – lower highs and lower lows – over 25 years,
accompanied by a lot of moral hazard, has very probably helped push asset prices higher. All three
Chairmen at some time have specifically taken credit for helping the economy by generating a wealth
effect from a higher market. Over the years we have come to believe that moral hazard is more
important in raising asset price levels than the interest rate level and availability of credit, although
they may also help. The moral hazard – the asymmetric promise to help if times get tough but to leave
you alone when times are rolling – had become increasingly well-understood, particularly during
Greenspan’s first 15 years. It seems likely that such a policy as the Greenspan Put might culminate
periodically in investment bubbles of the type it did indeed generate in the 2000 TMT bubble and the
2006 housing bubble. And the likelihood of bubbles forming no doubt increased because all three Fed
bosses outspokenly denied that such bubbles were occurring even as they passed through 2-sigma
levels. Greenspan poetically argued in 1999 that the internet was driving away the dark clouds of
ignorance and was issuing in a new era of permanently higher productivity. Think how encouraging
this was to the bulls as the market in 1998 went past the 21x peak of 1929 and climbed remorselessly
(and at an accelerating rate!) to 35x. Even more statistically remarkable was Bernanke’s dismissal of a
clear 3-sigma US housing market – a one in a thousand event normally – as “merely a reflection of a
strong US economy,” and that “US house prices had never declined!” That was accurate enough, but
what it really meant – and was interpreted as meaning – was that US housing prices would not decline
in the future. But, of course, the US housing market had never been tested by a 3-sigma bubble before!
And the rest is history.
The point here is that Yellen, too, sees no signs of dangerous stock prices and in general continues
with the program of moral hazard. Yes, rates will rise, just as they rose from 2003 to 2006, but it is
considered, quite rightly, to be cyclically normal in a tightening economy and so does not constitute
a breach of contract. (The recent rate rises, just like the 400-basis-point rise from 2003 to 2006, did
not at all get in the way of rising stock prices any more consequently than the two recent rises of
this cycle have.) So why would the Fed stop its general asymmetric support before we reach a third
bubble? Nothing is certain in life, but I would bet that a Yellen-like successor of the lower-rates-are-
helpful variety will get the job done (Mr. Powell should fit the bill) and deliver a third in their series of
Great Bubbles. A major shift in style of the Fed, on the other hand, based on an accumulation of new
appointees who would turn away from the accommodating style of the last 30 years, would reduce the
chances of a well-behaved classic bubble forming in the next year or two. But if we have a strong head
of steam up by next February, it might well happen anyway. We’ll deal with that when we get there.
The bottom-line question is probably this: Will this administration, when faced with either a market
break or unexpected economic weakness, not push the completely independent Fed committee for
lenient, lower-rate policies? Surely it will. (The Presidential Cycle of a very strong pre-election effect
and a compensating weak “recycling” in post-election years one and two that existed in earlier Fed
regimes did not come out of thin air, but presumably from deliberate influence. Since Greenspan was
appointed, though, we seem to have lived, at least most of the time, stuck in a year-three phase of
stimulus.)
11. 11 Bracing Yourself for a Possible Near-Term Melt-Up
January 3, 2018
The most difficult call: Are the more touchy-feely measures of market excess falling
into place?
Anyone around in 1999 and early 2000 has had a classic primer in these signs. We know we’re not
there yet, but we can perhaps see some early movement: increasing vindictiveness to the bears for
costing investors money; the crazy Bitcoins of the world (this is a true, crazy mini-bubble of its own I
expect – it has certainly passed my “nephew test” of his obsessing about buying or not); and Amazon
and the other handful of current heroes – here and globally – taking over more of the press coverage
and a growing percentage of total market gains (Amazon +13%, the day before I started to write this,
and Tencent doubling this year to a $500 billion market cap). The increasingly optimistic tone of press
and TV coverage is also important. A mere six months ago, new market highs were hardly mentioned
and learned bears were featured everywhere. Now, the newspaper and TV coverage is considerably
more interested in market events. (This last comment reminds me of some advice for contrarians:
There is usually a phase or two in each cycle where most investors expect a market gain or loss and
it actually happens. The mass of investors usually ends up wrong in the end, but not all the time, for
Heaven’s sake!)
Other items worth mentioning are IPO windows and new record highs for corporate deals. We can
have a satisfactory melt-up without them, but still one or the other is likely and both together are quite
possible. I believe their presence would make a spectacular bust that much more likely.
Finally, my favorite advice once again: Keep an eye on what the TVs at lunchtime eateries are showing.
When most have talking heads yammering about Amazon, Tencent, and Bitcoin and not Patriot
replays – just as late 1999 featured the latest in Pets.com – we are probably down to the last few
months. Good luck. We’ll all need some.
Bitcoin: The Essence of a Bubble
As you can see, Bitcoin dwarfs even the legendary South Sea Bubble! Having no clear fundamental
value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur,
makes this more than anything we can find in the history books the very essence of a bubble.
Historical analogy suggests this junior bubble, by size, may well crash and burn even before the broad
market peaks.
Work and data from my colleague Philip Pilkington.
0
200
400
600
800
1000
1200
1400
1600
1800
-11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4
Index(t-11=100)
Dutch Tulip Mania
1636 – 1637
S&P 500
1928 – 1929
South Sea Company
1719 – 1720
Bitcoin
2016 – 2017
12. 12 Bracing Yourself for a Possible Near-Term Melt-Up
January 3, 2018
Summary of my guesses (absolutely my personal views)
■■ A melt-up or end-phase of a bubble within the next 6 months to 2 years is likely, i.e.,
over 50%.
■■ If there is a melt-up, then the odds of a subsequent bubble break or melt-down are
very, very high, i.e., over 90%.
■■ If there is a market decline following a melt-up, it is quite likely to be a decline of some
50% (see Appendix).
■■ If such a decline takes place, I believe the market is very likely (over 2:1) to bounce
back up way over the pre 1998 level of 15x, but likely a bit below the average trend of
the last 20 years, as the trend slowly works its way back toward the old normal on my
“Not with a Bang but a Whimper” flight path.4
A. Suggested action plan for everyone
■■ What I would own is as much Emerging Market Equity as your career or business risk
can tolerate, and some EAFE. I believe each of these, especially Emerging, has more
potential than most think (as noted in my recent piece in GMO’s 3Q 2017 Letter).
B. For those individual investors willing to speculate5
■■ Consider a small hedge of some high-momentum stocks primarily in the US and
possibly including a few of the obvious candidates in China. In previous great bubbles
we have ended with sensational gains, both in speed and extent, from a decreasing
number of favorites. This is the best possible hedge against the underperformance you
will suffer if invested in a sensible relative-value portfolio in the event of a melt-up.
■■ As is also true in Case A, if we have the accelerating rally that has typified previous
blow-off phases, you should be ready to reduce equity exposure, ideally by a lot if
you can stand it, when either the psychological signs become extreme, or when, after
further considerable gain, the market convincingly stumbles. If you can’t cope with
this thought and can’t develop and execute an exit strategy, then sit tight and ignore all
this advice, except for an overweighting of Emerging. I certainly recognize that leaping
out of declining markets is a completely unrealistic idea for large, illiquid institutions
and nerve-wracking enough for even the toughest-minded individuals. In this sense
you can treat this paper as an academic exercise… the musings of an old student of
the market, who thinks he sees the signs of an impending melt-up that will be painful
for value investors. Is it better to be warned and suffer than be surprised and suffer? At
least when warned you can brace yourselves.
Postscript: Possible Political Consequences
Living in a hyper-political era, I should mention that if my best guesses are correct, a near-term melt-
up would obviously help the current administration at mid-term, just as the subsequent and highly
probable melt-down would seriously hurt it.
4
GMO Quarterly Letter, 3Q 2016.
5
That is to say, willing to invest in an asset with an unusually low long-term return, an expectation of a shorter-term price
game.