Archive | Politics

The Decline of Angry White Guys

Tuesday, November 6, 2012


This post discusses the election, what I expect to happen, and my views on fiscal and monetary policy. This is a normally politics-free blog, but economic policy impacts markets in a big way, and...

Hedging against an unclear election

Monday, November 5, 2012

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The election this week has sparked countless articles about the likely effects of an Obama or a Romney win on various sectors of the economy, but in the short term, traders should focus not on the effects of a win by one party, but on the effects of an unclear outcome for either party. The FX team at Citi recently called a disputed electoral outcome the “biggest political risk” facing markets right now: We view most of the…

Coal, Romney, and Market Noise

Wednesday, October 10, 2012


One of the stories traders have been telling each other recently is that the rally in coal stocks since last week’s first Presidential debate had to do with Governor Romney’s positive comments about coal and with the bounce that Romney saw in the polls after the debate. Similarly, a stall in the price of the Health Care SPDR ETF (XLV) is supposed to reflect lower odds that the Affordable Care Act will remain current law in a Romney administration, which…

Friedman Hearts Pinochet

Tuesday, July 31, 2012


Today would have been Milton Friedman’s 100th birthday and, predictably, people on the internet are stumbling over themselves to give rapturous applause.  In his Nobel lecture, Friedman famously claimed that it was possible to do value-free economics. However, Friedman’s own experience in the policy realm either disproves that claim, or shows Friedman to have had some truly perverse moral values. In “Friedman, Positive Economics, and the Chicago Boys,” Eric Schliesser (Gent) explains the problems with Friedman’s methodology, in part…

Trading the Politics of the Debt Ceiling Debate

Monday, April 11, 2011


I had a few quotes in a recent Reuters article on how to trade a government shutdown – the gist is that, while the shutdown news cycle hadn’t uniquely generated any trade opportunities, an actual shutdown was likely to do so. Of course, an agreement was reached late on Friday sufficient to avoid a shutdown, but last week’s confrontation was just a dress rehearsal anyway – the real drama will occur when the debt-ceiling limits are reached in…

Wasting a Good Society on Finance

Wednesday, August 25, 2010


This is one of those off-message rants that marks, I guess, one of the real differences between “blogs” and “old media,” and if you’re only here for the options stuff, you can skip this post. From 1990 to 2006, the GDP share of the financial sector in the broad sense increased in the United States from 23% to 31%. -Már Gudmundsson, Bank for International Settlements, 2008 This point has been made many times before – and…

Retail Vampirism

Thursday, January 7, 2010


Marco Arment comments smartly on this NYT story describing the arrangement among stores like H&M and Wal-Mart and their suppliers, whereby the suppliers give stores credit for unsold products and instruct stores to destroy the items instead of sending them back: It’s unfair to criticize these two companies for a practice that’s incredibly common in the entire industry, spanning nearly every product category and nearly every major retailer. The wastefulness of this is disgusting,…

Happy Labor Day

Monday, September 7, 2009


In American political discourse, it is permitted to speak about race, sex, gender, and religion. Class, however, is the one category about which we are not permitted to speak, or, increasingly, to think. Witness the speed with which any policy proposal with potentially egalitarian consequences is labeled “class warfare” in the press; if this epithet is becoming less common, that’s likely only because the category itself is less and less familiar in the public mind. And why admit the existence…

The Form of the Bond

Friday, April 17, 2009


Mike at Rortybomb captures the essence of the mark-to-market/mark-to-model debate nicely: At this point, I almost expected him to say “the problem is that all we can see is the shadow of the assets projected on a wall, not the real Form of a bond comprised of $500k loans to junkies. If only we could see the outside the limited cognition of our cave, see these mortgage-backed securities in the light of the actual Sun….”

Zombie Ideas

Thursday, February 5, 2009

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The casualties of the financial crisis aren’t just institutions, homeowners, and the newly unemployed: some ideas have taken a beating as well.  John Quiggin (Queensland) collects some of his work on refuted economic doctrines, and they’re really well executed (both the articles and the ideas, if you’ll pardon the pun): #1 The efficient markets hypothesis #2 The case for privatisation #3 The Great Moderation #4 Individual retirement accounts #5 Trickle


Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More


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