What's Noise, What's News: Tuesday August 21
Foreclosures in July rose 93% year to year. And people are surprised by this… how? (Highest rates were in Nevada, Georgia, and Michigan, by the way. And Capital One is shuttering its mortgage unit — 1900 jobs vaporized.) Meanwhile, the Washington Post treats its readers to the front-page revelation that all the fancy math quant fund wizardry somehow doesn't always add up, especially in a market downturn. You think? At least the reporter has the good sense to quote Friend-of-DR Nassim Nicholas Taleb, who patiently reminds those with short memories that we saw this same phenomenon less than ten years ago with the LTCM debacle. (For some less-obvious insights from Taleb and a host of superstars, pick up a copy of the Agora Financial Investment Symposium CDs, still available).
Good lord, where to begin: Americans' inflation-adjusted annual income in 2005 is down compared to five years earlier. Meanwhile, Washington's getting itchy about sovereign wealth funds, proving once again that the only thing scarier than a new and unfamiliar phenomenon is how government will react to it. Amazingly, the reporter writes an exhaustive article without once using the word "protectionism." And if you missed it yesterday, check out the 5 Min. Forecast for a chart that proves the Fed has already cut the fed funds rate, official figures notwithstanding.