Linkfest: Good inflation news; Hedge fund and HFT tax dodges; Less cooperation, more risk in global finance

Categories: Linkfest

Today’s most shared:

  • Inflation fails to rear its head.
  • Senate inquiry says hedge funds and HFTs dodged taxes by claiming fast trades were done within a basket structure that turned short-term trading profits into long-term gains; Renaissance alone accused of dodging $6b in taxes.
  • Argentina ruling means countries and debtors who need to restructure, and would be made better off by restructuring, will be unable to restructure.
  • The global financial system is increasingly about power and national interest, not rules and cooperation.
  • Covenant-light junk loans are the new normal as the Fed has been unsuccessful in attempts to limit risky bank lending.
  • Deficit scolds would be more credible if they weren’t the same people who think high financial sector leverage and risk is fine, even with high complexity and opacity.
  • People who focus on the past tend to be too risk-averse, those who focus on the present spend too much. And those who look to the future often pick bad investments.
  • Humans are hard-wired to trust stories over data.
  • Americans cash balances hit new high.
  • Rise of big-box retailers found to increase productivity, wages.

Inflation: mismeasurement, irrational expectations, and reality.
shared by @MarkThoma, @EconBrothers, @Noahpinion, @ModeledBehavior
Senate Inquiry Faults Hedge Funds’ Tax Strategy
New York Times
Hedge funds have claimed billions of dollars in tax savings through complex financial structures created by Barclays and Deutsche Bank, a Senate inquiry has found.
shared by @ritholtz, @hedge_funds, @JohnLothian, Reformed Broker, @MattGoldstein26
Subcommittee finds “basket options” misused to dodge billions in taxes and bypass federal leverage limits
Subcommittee finds “basket options” misused to dodge billions in taxes and bypass federal leverage limits.
shared by @matt_levine, @pdacosta, @tomkeene
Long-term damage of the US court’s Argentinian debt ruling
The US court ruling forcing Argentina to pay its hold-out creditors has big implications. In the future, it will not be not enough for the debtor and 92% of creditors to reach an agreement, if holdouts and a New York judge can block it. This will make both debtors and creditors worse-off.
shared by @MarkThoma, reddit/Economics, @FGoria
The unravelling of the global financial system
The international financial system is part of international power politics.
shared by Credit Writedowns, @edwardnh, @TimHarford
An Imaginary Budget and Debt Crisis
New York Times
The deficit scolds are still going at it, even though the whole panic turned out to be a false alarm.
shared by @ModeledBehavior, reddit/Economics, @ritholtz, @FGoria, @rjocean, @MarkThoma
China debt tops 250% of national income
Financial Times
China’s total debt load has climbed to more than two and a half times the size of its economy, underscoring the difficult challenge facing Beijing as it seeks to spur growth without sowing the seeds of a financial crisis.
shared by Marginal Revolution, @mhewson_CMC, Business Insider, @FGoria
Fed’s Junk Loan Bubble-Busting Faces Trouble as Sales Jump
One of the Federal Reserve’s first post-crisis tests of its ability to quash excessive risk-taking using regulatory tools is so far looking like a failure.
shared by @pdacosta, @Convertbond, @Dvolatility, @eisingerj, @AmyResnick
An Eye to the Past Can Help Guide the Future
New York Times
A survey finds financial health is higher among those who dwell on the past, compared with those who live in the moment or even plan for the future.
shared by @ritholtz, @ReformedBroker
The Psy-Fi Blog: Mistrust the Financial Storytellers
The Psy-Fi Blog
We’re inclined to favor people who tell stories over those who crunch data.
shared by @jasonzweigwsj, @MichaelKitces, @TheIntuitInvest
Let them eat cosmopolitanism
The Economist
The more pleased globally minded egalitarians are with emerging-market trends over the past generation, the more concerned they ought to be with national income inequality.
shared by Marginal Revolution, reddit/Economics, @Noahpinion
Americans’ checking accounts are filling with cash, but they’re afraid to spend it
Washington Post
Average checking account balances hit a new high, a according to a new study.
shared by @davidmwessel, @hblodget, @TheArmoTrader
Do Large Modern Retailers Pay Premium Wages?
Big box retailers pay higher wages than mom-and-pop stores, attract better workers, and promote from within.
shared by reddit/Economics, Marginal Revolution, @Richard_Florida
Wall Street Cut From Guest List for Jackson Hole Fed Meeting
Wall Street’s invitations to Federal Reserve’s Jackson Hole gathering get lost in the mail.
shared by @LaurenLaCapra, NYT Dealbook, @mhewson_CMC, Business Insider follows the best ‘curators’ on the web and social media, and finds all the top financial news right now, as voted by you.

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