Nice article. I haven't yet read the S/S piece but I will (what's with the same initial economics papers anyway?).
I've often thought the V is low. QE creates large excess reserves. That is all 'outside' the real economy (outside money) and should be considered to have zero velocity. Thus average velocity is low.
"you could argue that stock prices are up because the discount interest rate is down" - I've had this thought for a while. I've seen one previous statement of it but doesn't appear much.
I think a better explanation of lack of inflation is that there isn't enough demand. If there was enough demand (people with jobs buying stuff, rather than excess reserves doing nothing) that would push for higher prices. With insufficient demand prices can't rise and wages can't rise, thus no inflation. If the central bank was spending all that printed money (say through fiscal stimulus) that could create inflation. But not only is it not spent, the government is cutting back.
Singapore Updates: Upsides And Downsides [View article]
I can confirm no withholding on Singapore dividends: "There is no need to withhold tax on dividend payments. Singapore currently does not have withholding tax on dividends" (http://bit.ly/13He3wC)
For REITs it looks like there is 10% withholding: "during the period from 18 February 2005 to 31 March 2015, the tax rate is reduced to 10%. The tax deducted at the reduced rate of 10% is a final tax" (http://bit.ly/10RoUzN) After that the rate is the prevailing corporate income tax - which is generally low.
Singapore Updates: Upsides And Downsides [View article]
Singapore is sufficiently developed that the 'catch-up' strategy (foreign direct investment, savings ploughed into capital stock, literacy drive) is all used up. Indonesia, Malaysia and Philippines are still 'developing' and can benefit from that strategy. Singapore now can only generate growth through productive and consumption (domestic or foreign). That puts Singapore on a developed nation growth trend of 2-4%.
As per tight labor market I'd look for industries with low labor needs - rental REITs particularly as I'm still nervous about a housing mini-crash.
Thanks. My take on the most important part of the article: "An extremely important issue here is whether Williams was kite flying For Chairman Bernanke and looking to cushion the market reaction when Bernanke himself adopts a more hawkish tone. The most likely scenario is that he is not voicing Bernanke's thoughts."
4 Scary Charts Warning Of The Next Financial Crisis [View article]
BOJ has been printing money for a decade, still no hyperinflation. They've doubled the monetary base repeated, still no hyperinflation (http://nyti.ms/14mdEPu). And of course there is that huge rise in bond yields! (to .6%...yawn)
Niekki has gone up...and down...and up... and down... -- plus and minus 50% several times in the last decade - still no crisis.
Dear Author, How about you put your money on it? Hyperinflation (>20%) in Japan in 5 years? Care for a bet?
Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. [View news story]
Commencement addresses have to be bullish; that's the point! No one goes to graduation to hear that the world is ending.
Are Focus Media's 'Going Private' Lenders Taking On Too Much Risk? [View article]
Good article and good points by nemesis.
The acquisitions do look highly questionable, but that was some time ago and have ceased. Much has been made of this, but no legal proceedings have occurred. I think FMCN stock got knocked for that and that put it at an attractive price for a buyout.
I think the JPM arrangement is typical. It certainly is not surprising; their job is to recommend a price that will close - high enough to get votes, low enough for the buyer to stay in. The consortium has a lot of the votes so if anything, this arrangement suggests JPM should low-ball the offer (which makes a deal close more likely!).
As for the SEC investigation ... this is the most risky outstanding issue. Still, they will have to do something very soon. On the analyst call management indicated that closing would take a few weeks -- probably 3-5 weeks -- and 2.5 of those have expired.
I think a change in price from the buyer side is extremely unlikely at this point. The only thing that will adjust it would be SEC or other 'external' factor.
The interesting part is that the market does seem to think there is about 1% of risk left. I was expecting the price would be within 5 or at most 10 cents of buyout by now, and it's stuck at around 25 cents off.
The distinction is more observable in commodity futures (ex: corn is in normal backwardation most of the time). As you point out, VIX futures are in normal contango most of the time. However, your point about black swan likelihoods implies contago in addition. If normal contango exists, then contango should also be observed. However it's possible to get contango without normal contango. If the market believes that the spot price at t2 will be higher then spot price at t1 (E[Vs2]>E[Vs1]) then contango will be observed, even if the front contract is calculated to spot price at expiration. The distinction is not easily observed for VIX, but is easy to explain for commodities. For example, in the spring, corn futures tend to be priced with some profit for the buyer even over expectated maturity spot price (since otherwise he'd just wait for the spot price) - this is normal backwardation. If corn prices are expected to rise over time, then November corn will be priced higher than October corn - contango.
Why Inflation Never Came [View article]
I've often thought the V is low. QE creates large excess reserves. That is all 'outside' the real economy (outside money) and should be considered to have zero velocity. Thus average velocity is low.
"you could argue that stock prices are up because the discount interest rate is down" - I've had this thought for a while. I've seen one previous statement of it but doesn't appear much.
I think a better explanation of lack of inflation is that there isn't enough demand. If there was enough demand (people with jobs buying stuff, rather than excess reserves doing nothing) that would push for higher prices. With insufficient demand prices can't rise and wages can't rise, thus no inflation. If the central bank was spending all that printed money (say through fiscal stimulus) that could create inflation. But not only is it not spent, the government is cutting back.
Singapore Updates: Upsides And Downsides [View article]
Singapore Updates: Upsides And Downsides [View article]
"There is no need to withhold tax on dividend payments. Singapore currently does not have withholding tax on dividends" (http://bit.ly/13He3wC)
For REITs it looks like there is 10% withholding: "during the period from 18 February 2005 to 31 March 2015, the tax rate is reduced to 10%. The tax deducted at the reduced rate of 10% is a final tax" (http://bit.ly/10RoUzN) After that the rate is the prevailing corporate income tax - which is generally low.
Singapore Updates: Upsides And Downsides [View article]
As per tight labor market I'd look for industries with low labor needs - rental REITs particularly as I'm still nervous about a housing mini-crash.
btw: nice photo of marina bay.
Waiting For The Dollar Correction [View article]
4 Scary Charts Warning Of The Next Financial Crisis [View article]
Niekki has gone up...and down...and up... and down... -- plus and minus 50% several times in the last decade - still no crisis.
Dear Author, How about you put your money on it? Hyperinflation (>20%) in Japan in 5 years? Care for a bet?
My "inflation, but no doom in Japan" article (http://seekingalpha.co...)
Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. [View news story]
Singapore Updates: Upsides And Downsides [View article]
For the record I'm a Keppel Land customer.
Are Focus Media's 'Going Private' Lenders Taking On Too Much Risk? [View article]
The acquisitions do look highly questionable, but that was some time ago and have ceased. Much has been made of this, but no legal proceedings have occurred. I think FMCN stock got knocked for that and that put it at an attractive price for a buyout.
I think the JPM arrangement is typical. It certainly is not surprising; their job is to recommend a price that will close - high enough to get votes, low enough for the buyer to stay in. The consortium has a lot of the votes so if anything, this arrangement suggests JPM should low-ball the offer (which makes a deal close more likely!).
As for the SEC investigation ... this is the most risky outstanding issue. Still, they will have to do something very soon. On the analyst call management indicated that closing would take a few weeks -- probably 3-5 weeks -- and 2.5 of those have expired.
I think a change in price from the buyer side is extremely unlikely at this point. The only thing that will adjust it would be SEC or other 'external' factor.
The interesting part is that the market does seem to think there is about 1% of risk left. I was expecting the price would be within 5 or at most 10 cents of buyout by now, and it's stuck at around 25 cents off.
You can see the rest of my thoughts on closing here: http://seekingalpha.co...
Moody's: High Yield Bonds Are Mispriced [View article]
Investing In The Asian Century [View article]
Housing Stocks Overvalued, Lennar Looks To Have Topped [View article]
Investing In The Asian Century [View article]
Investing In The Asian Century [View article]
SEA association - http://bit.ly/17Piq9K
SMU center - http://bit.ly/13kPJjK
NUS center - http://bit.ly/17PiohZ
NTU does not have a separate center for social entrepreneurship.
Unraveling The VXX Roll Yield Riddle [View article]
There is one term you are missing which would be useful in your discussion -
V2 > V1 = contango (V1 < V2 = backwardation)
V1 > E[Vs] = *normal* contango
The distinction is more observable in commodity futures (ex: corn is in normal backwardation most of the time). As you point out, VIX futures are in normal contango most of the time. However, your point about black swan likelihoods implies contago in addition. If normal contango exists, then contango should also be observed. However it's possible to get contango without normal contango. If the market believes that the spot price at t2 will be higher then spot price at t1 (E[Vs2]>E[Vs1]) then contango will be observed, even if the front contract is calculated to spot price at expiration. The distinction is not easily observed for VIX, but is easy to explain for commodities. For example, in the spring, corn futures tend to be priced with some profit for the buyer even over expectated maturity spot price (since otherwise he'd just wait for the spot price) - this is normal backwardation. If corn prices are expected to rise over time, then November corn will be priced higher than October corn - contango.