Profit Economics

Monday, September 28, 2009

The Advisor Weblog

Majors’s sentiment for today

Posted: 28 Sep 2009 05:01 AM PDT

Here is majors sentiment for today:

Eur/Usd: Bearish

Gbp/Usd: Bearish

Usd/Chf: Bullish

Usd/Jpy: Bearish

Eur/Gbp: Bullish

Starting the day

Posted: 28 Sep 2009 04:54 AM PDT

Hi everybody and welcome! Monday again, and some risk aversion is seen since early Asian opening, with stocks down, losing some key level we are going to see in a few minutes, and gold contained under $ 1000/oz. Majors seem to have find a top against greenback, and movements are developing with different strength across the board. Mostly consolidating this morning, Yen strength, that reached the 88.20 zone early Asia, also points for more risk related movements. The currency has rose strongly against major rivals, reaching multi months lows, and rebounded quite strongly from there. Still not bottom seem at this point. Anyway, here is the link for today’s calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great day!

I will be one of the key speakers in Barcelona, October. Here is the link if you want to know more about it: http://www.traders-conference.com

Saturday, September 26, 2009

Details Matter

Any successful policy needs both strategy and tactics. From an interview with MIT Economists Esther Duflo and Abhijit Banerjee in Philanthropy Action:

Q: When you read about where most private philanthropic dollars and official aid go, a lot of it goes into health, education and other areas that Oxford economist Paul Collier refers to as ‘photogenic subjects.’ Do you think the money going to these sectors is being used well?

Banerjee: The real issue is often in program design. Our endlessly repeated line is that details matter infinitely. The difference between successful programs and unsuccessful programs is not the sector, it is how you do it. Has the implementer thought completely about the reasons why a program might not work? In my experience, even when you talk to very competent, well-meaning organizations, that is the step where you see the biggest gap.

This is why macro is so sterile. Details matter. Looking at aggregates, the sine qua non of macroeconomics, like 'investment' or the 'interest rate' obscures so many important variables. To think there is a profound causal relation between some aggregate quantity like 'consumption' or 'the savings rate' and future growth, assumes that all the little details don't matter, but they matter a great deal.