Monday, December 04, 2006

Blog roll...

While waiting for a meeting to start, I found two great blog posts worth sharing.

First is David Andrew Taylor from Dismally wrote a detailed response to a question yours truly posed to him. David does great work at his blog, which I read daily. Most blogs run by real traders are focused on stocks or commodities which are all fine and good but don't have a lot to do with my area of focus. Currencies, which is what Dismally is all about, have a lot to do with interest rates and inflation. So David's blog and my blog might seem to be worlds apart, but we actually deal in the same topics quite often. David also has more of a Keynesian viewpoint, which serves as a check on my own monetarist views.

Second is a post from Econbrowser on how much foreign flows might be impacting interest rates. The research quoted claims the 10-year is 100bps lower than it would be with zero net foreign purchases. The problem with this kind of research is that zero net purchases isn't too realistic. So the headline of 100bps is a little misleading. For what its worth, I believe that the foreign purchase effect is quite large, I just don't think foreigners are going anywhere anytime soon.