Category Archives: Economics

Streamlining Tax Rates with Z-Statistics

We ask a lot of our federal income tax system. Its stated purpose is to fund the government, but we also expect it to do something about income inequality. The system redistributes income, implicitly or explicitly, through tax preferences and … Continue reading

Posted in Economics | Tagged , , , | Leave a comment

QE Bulls Are Back

If you follow the market every day, as I do, you can observe two distinct groups of bullish investors.  This is hard to depict on a chart, but I am going to try.  One group responds normally to economic news, … Continue reading

Posted in Economics, Indicators | Tagged , , , , | Leave a comment

Correlation with Bond Yields

Hat tip to Gökhan Kula for sending this along.  For the few years I have been trading, bond yields have been strongly correlated with stocks.  Stocks go up when bonds go down, so much so that I regard SPY and … Continue reading

Posted in Economics | Tagged , , | Leave a comment

For Canadians Only

In addition to system trading, I like to keep part of my capital in a “macro” trade.  This is some perversity of having read too much economics at business school.  Last summer, I went short U.S. bonds.  This returned 5% … Continue reading

Posted in Economics | Tagged , , | Leave a comment

Understanding House Prices

It’s hard to know if the housing situation is really improving.  Prices go up, but then units go down.  Classically, you can think of the equilibrium price vacillating around $200K, while the supply and demand curves do their dance.  Here … Continue reading

Posted in Economics | Tagged , , , , | Leave a comment

POMO Calendar

In case you were curious, here is a breakdown of the Desk’s agency purchases for the month ending November 13, 2013.  Units in millions.  Data from the Federal Reserve Bank of New York. Agency purchases are pretty steady throughout the … Continue reading

Posted in Economics, Indicators | Tagged , | Leave a comment

Negative Feedback Gauges and Gates

I read someone today who said that we are all wrong about rising rates being bad for housing.  Everyone else is worried that if the Fed tapers, mortgage rates will rise and choke off the housing rebound.  As of today, … Continue reading

Posted in Economics | Tagged , , , | Leave a comment