psychology

By Niels Jensen The Absolute Return Letter, April 2011 “When models turn on, brains turn off.” Til Schulman I have been thinking a great deal about risk over the past couple of years. The depth of the financial crisis…

In a recent post I discuss the limitations of neoclassical economics and the strain of behavioral economics that remains tethered to it. I argue that they fail because the market is inhabited by people, heterogeneous and context-sensitive,…

In my previous missive I concluded that investors should stay true to the principles that have always guided (and should always guide) sensible investment, but I left readers hanging as to what I believe those principles might actually be.…

The last time Ray Dalio conducted a major interview, the global economy seemed to be headed toward a major depression. This was in February 2009 when Barron's had a conversation with Bridgewater Associates' Ray Dalio. For his part, Dalio…

By Rick Bookstaber In a recent post I laid the blame for the inadequacies of neoclassical economics and behavioral economics on the failure to take into account human context. By context I mean that humans make decisions that are colored…

The real question is whether the inflation that bondholders are expecting will actually lead to rate rises. Bond vigilantes can sell Treasuries in expectation of future rate hikes. (Remember, long rates are simply a chain of expected…

You have to watch this video to believe it. The speculation in the commodities market is well out of hand. Cotton futures are at a record high on speculation that demand in China will continue to increase, as China is the world’s largest…

By Marshall Auerback Yesterday, Ed wrote a good piece on consumer spending and the return of the economy to the status quo ante. I think it's a little bit more malign than that. There has been a real positive change in the underpinnings…

By Rick Bookstaber A few months ago I discussed the failing of econophysics, and more generally, the economic paradigm that treats people like computers and views economic dynamics like physics. The natural follow up question is, “What can…

Here is my mantra regarding so-called 'unsustainable' debt levels. I feel strongly about this topic so I'll repeat it and show you a few statistics on consumer debt from the recent US government data: oor quality growth can continue…