Lehman’s Lessons

The tenth anniversary this past September of the collapse of Lehman Brothers inspired a blizzard of commentary, including some deeply misguided observations. One misunderstanding is that Lehman’s demise caused the Great Recession. In fact, the downturn started months earlier in the US, as NBER’s recession dates show. But there’s room for debate on the question of whether the government’s decision to let economic gravity have its way with Lehman turned what might have been a moderate downturn into the deepest contraction since the Great Depression.
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Macro Briefing: 13 December 2018

Pelosi secures deal to be next Speaker of the House: Slate
Developments in Mueller probe whip up impeachment talk among Dems: Fox
UK prime minister survives leadership vote: CNBC
Britain’s weakened prime minister heads to Brussels for help: Reuters
IEA: US influence in global oil market set to rise: CNBC
Rising US-China tensions over South China Sea stocking fears of clash: SCMP
Criticism of indexing (still) falls flat: Barry Ritholtz
US consumer inflation (headline) slowed to 2.2% annual rate in Nov: MW

Macro Briefing: 12 December 2018

Trump says he’ll consider shutting gov’t over border wall: Bloomberg
CFO of China’s tech giant Huawei released on bail in Canada: CNN
China detains former Canadian diplomat: SCMP
Trump says Fed rate hike ‘would be foolish’: Reuters
Vanguard founder Bogle: buy bonds to hedge ‘unstable’ US gov’t and Brexit: FN
Global equity valuations at 5-year lows: WSJ
UK Prime Minister Theresa May faces no-confidence vote today: WSJ
Protests in France threaten to undermine Macron’s economic reforms: NY Times
US small business optimism remains high but outlook turns cautious: CNBC

Macro Briefing: 11 December 2018

Impeachment risk is rising for Trump: Bloomberg
US and China start new round of trade talks: WSJ
White House plans to roll back clean water rules: Axios
Trump administration promotes fossil fuels at climate change meeting: Time
UK’s May heads to Europe to salvage her crumbling Brexit deal: Guardian
Macron offers to raise minimum wages after French protests: BBC
US sanctions North Korean officials amid stalled nuclear talks: ABC
Former Fed Chair Yellen is worried about excessive corporate debt: CNBC
US job openings rebounded in Oct, near record high: CNBC

Macro Briefing: 10 December 2018

China summons US envoy over Huawei CFO’s arrest in Canada: Bloomberg
Europe’s top court rules UK can unilaterally halt Brexit process: CNN
Wall Street banks pore over data in search of business-cycle clues: Bloomberg
UK Prime Minister May must decide today on putting Brexit deal to a vote: Time
Familiar risks await US economy in 2019: NY Times
Eurozone GDP growth in Q3 dipped to slowest pace in four years: RTE
US hiring slowed in Nov; wage growth at highest rate in nearly a decade: WSJ
Consumer debt posted biggest gain in 11 months in Oct: Bloomberg
Wholesale trade sales in US up 6.8% for year through Oct: MDM
US Consumer Sentiment Index unchanged at elevated level in Dec: MW

Book Bits | 8 December 2018

Delivering Alpha: Lessons from 30 Years of Outperforming Investment Benchmarks
By Hilda Ochoa-Brillembourg
Summary via Amazon
From a former World Bank Executive and renowned investor―a detailed roadmap to adding consistent, sustainable value to globally diversified portfolios. For many investors, alpha is akin to the Holy Grail. Risk-adjusted returns above benchmarks―alpha―are particularly challenging to achieve even with a sound strategy. Hilda Ochoa-Brillembourg is an expert on alpha. Over the past four decades, she and her team consistently exceeded benchmarks and delivered appreciable value added on their investments. In Delivering Alpha, she reveals the principles and methods employed in her investment strategies, along with insights drawn from her personal life. She shows how timing, market awareness, price, and relative value to the investor are critical drivers of effective investment decisions. Ochoa-Brillembourg also debunks common investment myths that often trip up both new and experienced investors.
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