Weekend Reading – Stuff we found interesting this week

August 6th 2011.

Welcome to our weekly roundup of the stuff we read that was interesting to us and hopefully to you.

Owe Dear! The Economist has an interesting intereactive graph and story abou the debt levels of the big global economies and a comparison. Here

2011 feels a lot like 2008, here is a piece from Gillian Tett in the FT

Even though it always seems to be the bond markets in some form that blow up markets generally I  think that bond markets lead equities more so than the other way around. Could it be that Bond MArkets are interested on the return OF their capital while Equity markets are interested in the return ON their capital? It’s when Bond investors start acting like equity investors that markets get ugly.

I saw this chart via Abnormal Returns during the week and thought it worth replicating. Here is the story that goes with it for those interested.  

Ken Rogoff and Carmen Reinhart have done some important work on the history of financial crises – here Ken Rogoff writes about the current economic environement.

Not everyone likes Rogoff though and I thought it important to give air to this rebuttal of the impact his and Reinharts work is having at the moment. I don’t the answer to this crisis but Rogoff and Reinhart have scared everyone with their analysis of debt levels and GDP. If you only read one thing this week have a look at this. 

Part of the legacy of Rogoff and reinhart is the concerns over debt to GDP as noted in the article above. Europe is still grappling with what to do and Italy has now decided to pass a balanced budget law. Keynes will be rolling in his grave. Here is a story from the BBC

Bill Evans is in my opinion the Senior Economist in the Australian Banks and having worked with him and got to know him I reckon he is both a good economist and a great bloke. Sometimes though he likes to make the huge calls which he did recently. The market is saying he’s right at the moment and here’s a piece I saw from Swittzer earlier this week on Bill.

 This article is a bit wonkish but very interesting for anyone who has to make projections of economic and financial impacts far into the future. Einstein on Wall Street

This is a seriously wonkish article put is important for one reason asks the question are active managers worth it? Unless you are a finance Major you can skip to the last paragraph.

Respecting risk is the key to long term survival in the markets. Here is a traders personal thoughts from this week. Profanity warning BTW. HT Abnormal Returns 

And of course the FT’s week in review

Have a great weekend

Greg McKenna

greg@lighthousesecurities.com.au

www.twitter.com/gregorymckenna

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