Ray Dalio & Larry Summers: An Examination of How the Economic Machine Works

This is a slightly older video from this summer, but it's still worth watching.  Larry Summers sat down with Bridgewater Associates' founder Ray Dalio at Harvard in a presentation entitled: An Examination of How the Economic Machine Works.

Embedded below is the video of the conversation between Summers and Dalio:



For more from Bridgewater, we've previously posted up lessons from Ray Dalio as well as Bridgewater on economic principles.

George Soros on Why We Need to Rethink Economics (Video)

Today we're posting a short interview with legendary investor George Soros.  He's also the co-founder of the Institute for New Economic Thinking and he tackles the question of what's wrong with economics and what can we do to change it?

Embedded below is the video of George Soros on why we need to rethink economics:



While Soros is not involved in the day-to-day affairs, we've posted some of the recent portfolio activity from his family office, Soros Fund Management.

Jeff Saut, Scott Brown & Art Huprich on Current Economic and Technical Takeaways

Market Strategist Jeff Saut, along with technician Art Huprich and economist Scott Brown have put out an interesting compilation of data/charts entitled 'Gleanings.'  In it, they incorporate economics, fundamentals, technical analysis, and quantitative analysis. 

Overall, they see equity optimism due to the "open-ended central bank's 'put option,' QE3."  Here are some of the macro and technical highlights from what they're seeing:


Key Economic Takeaways

- Fed is targeting mortgage rates and 30-year rates recently hit a generational low (3.38%)

- "Good time to buy a house" helps housing as prices are improving

- Financials have traded higher & they think that continues due to low valuation, balance sheet clean-up, and housing's stabilization

- Inflation-adjusted consumer spending continues to trend at moderate pace

- Aging fleet of autos have supported improving trend in auto sales

- Home sales & construction activity are up double digit percentages since last year

- PCE Price Index is trending below Fed's 2% target (other core inflation measures have been drifting lower as well)

- Economic wildcards: gasoline and the election

- Economic risks: Europe, fiscal cliff, and debt ceiling.  (We recently highlighted Kyle Bass' thoughts on Europe and also presented Ray Dalio's interview on macro topics).


What The Technicals Say

- "Bernanke put" backed by Quantitative Easing

- Favorable 'seasonal' market & election cycle historical trends should backstop any declines into year-end

- Charts suggest having exposure to financials via selective exposure.  (We've noted how many hedge funds have bet on AIG this year).

- Charts are bullish for Homebuilders ETF (XHB) and Home Construction ETF (ITB) over the long-term, though a mid-term pullback would be healthy

- Bullishly configured price trend in S&P Consumer Discretionary sector


Embedded below is their presentation 'Gleanings' full of charts:




For more from Jeff Saut,this week we posted up his commentary examining how many investors are underperforming this year.

Lectures on Financial Economics by Antonio Mele (Swiss Finance Institute)

Continuing the series of educational articles on Market Folly, today we present Lectures on Financial Economics by Antonio Mele. Published in March 2012, it comes from the University of Lugano and the Swiss Finance Institute.

In the publication, Mele addresses:

Part I "Foundations": Fundamental tools of analysis such as classical portfolio selection, dynamic consumption- and production- based asset pricing.

Part II "Applied asset pricing theory": Excess price volatility, countercyclical stock market volatility, and value premium.

Part III "Asset pricing and reality": Option pricing and trading, interest rate modeling, credit risk, and derivatives.

Embedded below is Antonio Mele's Lectures on Financial Economics (email readers click the link to come read it):



For more of our educational posts, head to:

- Notes from Seth Klarman's Margin of Safety

- The 3 sources of Alpha

- Common sense investing: collection of Ben Graham's papers

Carl Icahn Guest Lecture At Yale University

In a recent video courtesy of AcademicEarth, Yale University's renowned Professor of Economics Robert Shiller welcomed Carl Icahn to his classroom for a guest lecture.

Embedded below is the video of Carl Icahn's lecture on his career in finance, shareholder activism, and the economies and markets of today. RSS & Email readers come to the blog to view the video:

Carl Icahn runs hedge fund Icahn Partners and focuses on activist investing where he seeks to implement change at various companies. We've covered his movements in-depth here on the blog and in October he laid out the idea to short real estate. In addition, we've also detailed some of his portfolio activity. There have been some recent developments out of the Icahn camp and we'll present those in a separate post shortly.