For the past several months I have been making efforts to sharpen my economic reading. I feel pretty good about the effort. So I summarize.
Blogs
The first stop on the road to enlightenment is the blogosphere. So I've added and subtracted and aded blogs to my RSS aggregator, Google Reader. The survivors are as follows:
- Cafe Hayek
- Econbrowser
- Inner Workings
- Becker Posner
- RGE Global Monitor
- Marginal Revolution
Honorable mention goes to Brad De Long and Dan Dresner, who I used to read all the time but don't any longer.
I had a subscription to The Economist but I let it lapse. I found that it wouldn't say what the blogs were saying in the sort of analytical language I was looking for. Plus their classified ads are very depressing for people like me with no MBA.
Heads
I've got access to a blizzard stream of economic news by listening to Bloomberg podcasts. Every day I listen to at least three podcasts. Some days three hours of commuting and lunch would be filled with economic news and reviews. Through the efforts of two of the three finest journalists working today**, Ken Prewitt and Tom Keene really know their subjects and their topics. When it comes to getting up close to people who know, Blomberg Surveillance is unmatched. There is a raft of folks with exemplary insights into the financial industry and they include:
- Robert Shiller
- Barry Eichengreen
- David Greenlaw
- Steve Hanke
- John Casesa
- Charles Colomiris
- Arthur Levitt
- David Goldman
- Richard Clarida
- Maryann Keller
- Mohammed El-Erian
- Tyler Cowen
Firms
I have only come to really think about two companies in all of this. Well maybe three. The first is Sanford Bernstein. If I had moola, I'd have them watch my moola. The second is Pimco. They know bonds, period. I am really fascinated by the bond industry and hope that as I get through Knuth I can build my own models and come to understand it a bit. The maybe third firm is Hambrecht & Quist, because they are a small venture capital firm and was always a sound player in my industry. Now that mega venture capital firms are shutting down, the cycle comes back to places like H&Q. I like that.
Ideas
There aren't major theories that I have learned so much over these past few months. I haven't approached it like that - so much as to become more familiar with the territory. I think I am coming to understand more about how folks make their money in the finance industry and even what I am not doing in my own corner of my industry that the big boys are actually doing. I'm a bit astonished to discover how little what my class of customers have been doing with regard to what can actually be done.
But there is one big thing I think I have learned which is the extent to which credit and banking fuels growth and how much working saved and leveraged money does in the American system.
Mysteries
I still don't understand how it is that businesses get to manage assets off their balance sheets, what those assets are and how they move. I don't understand all of the implications of the Federal Reserve printing money and the Treasury buying it up. Or is it the other way around? I don't understand how frequently ratings agencies get to do what they do and how material their judgments are in markets and if it makes a difference to them how a security is structured.
Interests
I am interested to understand the bond market with more clarity. I want to know how bond auctions work, how liquid bond markets are and where currency arbitrage fits into the equation. I want to know how bond traders and investors read the motions in their markets and what makes the difference - what the key spreads are and how folks make money, where the volume is blah blah.
What I See
What I see is a stronger America at the end of this crisis and recession. I see a chance to inflate safely out of it, but some really hard edges in the bond market emerging so that if they get past a certain tolerance truly drastic actions will have to be taken, and that depends on who defaults on what big obligations and when. I see most stocks going sideways for period of years - kinda like me working at Xerox in the 80s, and companies really boring and afraid to take risks with American employment consolidating into fewer, more giant and stagnant firms. Except for biotech as soon as it does what research says it might.
**The other journalist is Peter Windsor who is brilliant for the Speed Channel.
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