Still wondering why Ant was so abruptly pulled? The paper highlighted today provides essential-reading on what may have been a major component of the regulatory authorities’ thinking. Zhengyang Bao and Difang Huang, both from Australia’s Monash University have produced the first paper, probably anywhere in the world*, that looks at how the exogenous shock of […]
Category: Sunday Papers
If you’re not a stock analyst, or a manager of such, there’s not much here for you today. If you’re either of the above though the paper highlighted adds usefully to the debate about whether or not company visits are worth the effort. To recap; there are two schools of thought on this. Some argue […]
Cryptocurrencies get all the headlines but the real interest of late, which COVID-19 appears to have intensified, is with Central Bank Digital Currencies or CBDCs. In the ‘Working Paper’ highlighted today Raphael Auer (Et al.) of the Bank for International Settlements surveys the current development landscape and (sort-of, seems-to) concludes nobody is ready, yet, to […]
From other studies we know that rising and high home prices lead to related social problems, in China and elsewhere. Here’s a brief list: higher savings ratios, lower household consumption, reduced female labor force participation, higher marriage ages, increased inter-generational cohabitation, reduced innovation at the firm level and a crowding-out of fixed capital investment. So […]
To find the world’s cheapest market relative to it’s long-term average look below for the biggest distance between the green dot (the September valuation) and the red square (the long-term average). The cheapest market, according to this analysis, is therefore Japan. In terms of absolute cheapness the UK (at the time of this analysis) held […]
That Chinese parents want ‘Dragon’ babies i.e. children to be born if possible in the zodiacal year associated with the Dragon, is an observable fact. Marriages rise in the two years prior to a Dragon year and births increase in these years (this effect is also in evidence elsewhere in Asia). Writing in a Discussion […]
Let’s get straight to it. The effects of COVID-19 on the world’s major economies will be significant and long lasting. That’s according to Alexander Chudik of the Federal Reserve Bank of Dallas (et. al.) writing in a CESifo (a Munich based organization) Working Paper. Below is the key figure from their work and the straight […]
Value investors understand better than many that differences between ‘should-be’ and ‘are’ stock prices can be large and persist for very long periods, Keynes noting famously in the 1930s ‘The market can stay irrational longer than you can stay solvent”. The solve-for-y of these discrepancies is flows. With this in mind researchers Xavier Gabaix and […]
Previous studies have highlighted negative effects of the growth of passive investment, especially index tracking ETFs, in recent years. In addition to increasing market volatility ETFs have been shown to lead to lower price efficiency, higher return synchronicity and less analyst coverage of securities in underlying baskets. Researchers from the University of Utah wanted to […]
[A quick tutorial for lay readers. ‘Smart-beta’ is the idea there are recurring patterns in markets, or factors, that professionals use to gain advantage. By automating the application of these factors passive investors, perhaps via an ETF, can obtain some of the same advantage when investing. For example: growth, value or momentum. Just let machines […]
We all know the story. America allowed China Permanent Normal Trade Relations (PNTR) status in 2000 which in turn led to China’s accession to the WTO. This in turn led to a ‘China Shock’ to American manufacturing destroying millions of blue-collar jobs whilst the Washington elites and their friends reaped the benefits. This then led […]
The housing market in the U.S. is in rude good health as figures released last week show U.S. housing market. This may have something to do with government transfers in recent months? This is almost certainly not an outcome planners were aiming for. The paper highlighted today reminds policymakers there’s a more effective way to […]
Pity regulators. Well, not so much perhaps. When markets are volatile, especially when they’re going down, a notion develops that ‘authorities should ‘do’ something’ and governments are often persuaded to step in. In many cases this has meant to either halt trading or slow it down. The academic literature is divided on whether this is […]
Dan Ciuriak writing in a Policy Brief for the Asia Pacific Foundation of Canada makes three important points about the early onset of the COVID-19 pandemic: There was no global information asymmetry as early as December 31st 2019. The world knew as much as China did at that point Information available on that date was […]
Mr. Jack Ma has form in terms of rearranging parts of his empire on terms not wholly to the liking of other interested parties Yahoo 2011 Spat; but investors seem not to care about past events, especially if they believe they’re still on a profitability-rocket-ship-to-God. The paper highlighted today is a detailed study that every […]
In the United States there’s been an escalation of hate crimes directed at Asians during the course of the COVID-19 pandemic. Runjing Lu and Yanying Shen from the universities of Alberta and California San Diego respectively have analyzed Google searches and Twitter posts to see if an increase in the use of a certain racial […]
[The work in the paper highlighted today from Huanchang Du (et. al.) of Princeton is important for practitioners but, for the sake of brevity, I’ll address only the laity in the summary. There’s a link at the bottom if you need the deeper dive.] If a stock is priced at $100 and has a dividend […]
Writing in a regular publication of the Centre For Economic Policy Research Muhammad A. Cheema (et. al.) of the University of Waikato, N.Z. took a look at the performance of so-called ‘safe haven assets’ over the recent COVID-19 (C-19) related stock market kerfuffle(s). Others have done similar analysis but what makes this work different is […]
The study in the paper linked to at the bottom of this note claims to be the only one of its kind to longitudinally study the Chinese public’s approval over time (since 2003) of the Chinese Communist Party (CCP). It came out in July this year and got respectable coverage from China-centric news-mongers but received […]
A quick history lesson if you’re unfamiliar with Baoneng or Vanke. In 2015 Baoneng, a Chinese insurance company of dubious pedigree controlled by Mr. Yao Zhenhua, began buying shares in one of China’s largest property companies Vanke. The company at the time was de facto controlled by China Resources and Vanke’s then Chairman Mr. Wang […]