Gary Stix (Scientific American): The science of economic bubbles and busts
Matt Taibbi (Rolling Stone Magazine): The great American bubble machine
Bill Gross (Pimco - Investment Outlook): “Bon” or “non” appétit?
John Hussman (Hussman Funds): Green shoots and a grain of salt
Martin Feldstein (Financial Times): The Fed must reassure markets on inflation
Robert Samuelson (Washington Post): “Reforms” won’t prevent future crises
Martin Wolf (Financial Times): The cautious approach to fixing banks will not work
Brad Setser (Council on Foreign Relations): The savings glut. Controversy guaranteed
Anatole Kaletsky (Times Online): How the ECB’s fig leaf has completely withered away
Wolfgang Münchau (Financial Times): Germany and France need to sing in tune

Via The Deal: On the matter of the M.B.A. oath:

“Business” does not involve written texts and tested facts; it’s relative, changeable, elusive. If that’s the case in business, why are we assaulted every year by new management tomes claiming new approaches and new ideas for every new generation of managers? It’s a sign of how hazy all this is in business that the moral vision is based on whether shareholders own companies or whether the wealth gets more equitably shared by workers, communities, customers or Uncle Joe: that is between two competing ideas, dressed up in moral robes, about who gets the loot and who calls the shots.

But “management” as a set of skills lacks the “scientific” credentials of either the law or medicine. The real-life goal of management is to create wealth. Management lacks the distilled moral clarity of the law, serve the client (while hopefully not lying and cheating to do so), or medicine: treat the patient or at least don’t harm him.

Via Long or Short Capital: Tinderbox Capital LLC, an incendiary investment management firm announces its first fund,
Dangerous Fund I.

Dangerous Fund I will specialize in positions that lack
defensible absolute return theses. Assets will be allocated so as to
leverage Tinderbox Capital’s expertise in trades of which they have
little understanding, so-called “dangerous” trades. These trades will
include vega convergence bets, investments in opaque levered
pass-through instruments, naked red/black hedge trades, and proprietary
coin-in straddles. Their due diligence process will include a rigorous
“bottoms up” analysis that is comparable to the processes of Fairfield
Greenwich Group and other top investment management firms.

Via FT.com - Academics have more to declare than their genius

There is a good reason why the standards should be higher for academia: its members enjoy an increasingly rare privilege in having lifetime tenure. We may preach the virtues of labour market flexibility to governments and companies, but are rather wary in applying it to ourselves.

Akiyoshi Kitaoka’s incredible optical illusion website

From Rick Bookstaber: The 7 Habits of Highly Suspicious Hedge Funds

1. No independent risk reporting
2. A change for the worse in the critical risk numbers
3. Increased use of derivatives
4. High level of secrecy
5. Growth in headcount and lifestyle
6. Decline in assets under management
7. Lackluster recent performance

More here.

Great takedown of the MBA Oath by The Epicurean Dealmaker.

Put this way, you can see just how empty and/or disingenuous such pablum really is. Be good to whom? When? How? Under what circumstances? To whose detriment? Unlike loyalty to your comrades, artistic integrity, or even devotion to your neighborhood beanery, ethical behavior in a business context is never straightforward or simple. A businessman constantly makes decisions which harm some real or potential stakeholders, because business is composed of and affects a staggering number of people who have different and often competing interests. Business ethics are situational, which is merely to say that they depend most heavily on the particular set of circumstances and decisions at hand, rather than on some inflexible itemization of principles printed on a playing card. Often, a business decision which triggers ethical thinking is a choice among lesser evils, or one which minimizes harm, rather than maximizing good. And you have to pick and choose which oxen are going to get gored—shareholders, employees, taxpayers, etc.—because somebody has to take it in the neck.

There are no cookbook approaches to this kind of stuff. You either have ethical principles and try to apply them to the best of your ability, or you don’t. If you do, the most important resources you will need are integrity and courage. If you don’t, then, well, we’ll probably see you on the cover of Fortune magazine one of these years.²

Sadly, for your purposes, integrity and courage are not attributes that translate well to a resumé or a job interview. But realizing that they are what matter, and saying so honestly to whomever asks, will generate a hell of a lot more credibility than reciting a laundry list of politically correct business ethics bromides. It will be up to you to prove you have the stuff—both to yourself and others—when circumstances dictate.

In the meantime, if you want my advice, here it is: Leave the Oath, take the cannoli.

Zero Hedge: The Confidence Game In Quotes

Austrian Filter concludes correctly: “If Bernanke and Paulson were
doctors, and our economy was the patient, they would be in jail for
malpractice.”

Pimco Credit May 27 2009

Via Swan Song: … Nassim Taleb is still wrong.

….because it shows that neither consistently discounting the chance of unforeseen risks, as AIG did with such gusto, nor betting day after day on unforeseen catastrophes is a reliable way to make money.

Via Bedlam Asset Management:

We use an average price of $850 per ounce in 2010 when valuing gold shares, as that is prudent, yet our damp rabbit’s foot hints at a much higher price before the end of 2010 because the triggers are already in place: the absence of meaningful new mine supply, the cessation of central bank sales, explosive growth in money supply and of course, rising political uncertainty, which is the Siamese twin of recessions. Top economic schools used to train their pupils to sneer at little old ladies who kept their savings in gold coins in a sock rather than trusting national banks. Today it is clear which group are the financial dimwits; perhaps an inherent understanding of cycles can only be learned through longevity. We subscribe to the little old lady school of applied economics. We are therefore certain that central bankers’ nightmares will worsen as their paper currencies devalue against the most trusted store of value, and in bed, the thing they secretly lust after.

Paul Tudor Jones - Failure Speech June 2009

Via The Epicurean Dealmaker: A Mighty Wind
.. if you want to regulate financial geniuses, you had better employ some of your own. It’ll cost you, but it will work. Otherwise, you are stuck with trying to control international drug dealers with helicopters, numbered Swiss bank accounts, and high-powered machine guns by using broken-down beat cops with bad knees and rusty six shooters. Law enforcement and the military have figured it out: you need elite units with state-of-the-art training, weapons, and esprit de corps to tackle the nastiest, smartest villains. When will it occur to the dim bulbs charged with supervising our financial system that they need the same set-up?

An Interview With Paul Samuelson, Part One - Conor Clarke

Hyperinflation: The Story of 9 Failed Currencies | Mint.com Blog | Personal Finance News & Advice

Dexia AM - Globalised Finance

List of books that profiles Fund Managers – Hat Tip: Mebane

* Hedge Hunters by Katherine Burton
* 20/20 Vision by Harry Liem
* The New Investment Superstars by Lois Peltz
* Market Wizards, The New Market Wizards, and Stock Market Wizards by Jack Schwager
* Inside the House of Money by Stephen Drobny
* Way of the Turtle by Curtis Faith & The Complete TurtleTrader by Michael W. Covel
* Extreme Value Hedging by Ronald D. Orol
* When Genius Failed by Roger Lowenstein
* No Bull by Michael Steinhardt
* Soros on Soros by George Soros
* The Snowball by Alice Schroeder
* How I Became a Quant by Richard R. Lindsey
* Fortune’s Formula by William Poundstone
* Value Investing by Bruce C. N. Greenwald
* Investment Gurus by Peter J. Tanous
* Money Masters, The New Money Masters, and Money Masters of Our Time – Train
* The Global Investor Book of Investing Rules – Jenks
* Julian Robertson – Strachman
* Hedgehogging – Barton Biggs
* When Supertraders Meet Kryptonite -Art Collins
* New Market Mavericks-Cutmore
* Investing With Young Guns-Morton
* The Best:Conversations With Top Traders-Marder
* Investment All Stars-Stern
* Confessions of a Street Addict-Cramer
* Education of a Speculator-Niederhoffer
* The Mind of Wall Street-Levy
* John Neff on Investing-Neff
* The Lion of Wall Street-Dreyfus
* Trading the Worlds Markets-Gough
* Value Investing with the Masters-Kazanjian
* Wizards of Wall Street-Kazanjian
* The Bond King-Middleton
* Pit Bull – Martin Schwartz
* John Neff on Investing – Neff and Mintz
* Running Money by Andy Kessler
* Barnard Baruch – The Adventures of a Wall St Legend
* Charlie D – The Story of the Legendary Bond Trader – William Falloon
* Education of a Speculator – Vic Niederhoffer
* What I Learned Losing a Million Dollars – Jim Paul & Brendan Moynihan