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<p>In today’s exploration of economic insights, we delve into two intriguing books and address pressing market issues. This overview will enhance your understanding of both current economic conditions and key literature shaping our financial landscape.</p>
<p>● <a href="http://www.amazon.com/gp/product/1610393112/ref=as_li_tf_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1610393112&linkCode=as2&tag=thecapitalspe-20">The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life</a><img decoding="async" src="http://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=as2&o=1&a=1610393112" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;"/><br/>By Uri Gneezy and John List<br/><a href="http://www.publishersweekly.com/978-1-61039-311-9"><strong>Review</strong></a> via Publishers Weekly<br/>Gneezy and List, economists from U.C. San Diego and the University of Chicago, excel in conducting innovative "field experiments" that illuminate social psychology and decision-making processes. Their research covers a wide array of topics, such as a ball-tossing game that reveals social pressures making women hesitant to compete, and role-playing exercises that expose subtle forms of discrimination at car dealerships. While some findings are predictable—like men being more generous to attractive female fundraisers—others defy expectations. For instance, sales of a wine can be heightened by increasing its price, charitable contributions can rise by allowing potential donors to opt out of solicitations, and even profits can be enhanced by allowing customers to choose their own price for a product. Echoing the engaging style of *Freakonomics* (with a foreword by Steven Levitt), Gneezy and List argue that "self-interest lies at the root of human motivation," which they define in a broader sense to include the satisfying nature of altruistic actions and the influence of gentle policy nudges.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/book-bits-10-12-13/" title="4:03 am" rel="bookmark"><time class="entry-date" datetime="2013-10-12T04:03:02-04:00">October 12, 2013</time></a>
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<p>Meb Faber <a href="http://www.mebanefaber.com/2013/10/10/the-biggest-problem-with-buy-and-hold/">points out</a> that a buy-and-hold strategy closely resembles market-cap weighting. In the long run, both approaches converge, absent any intervention. However, as Faber highlights, the downside of buy-and-hold is that it increasingly favors overvalued assets and underrepresents those assets trading at more appealing valuations, which are often associated with better expected returns. “That, to me, is the biggest failing of buy and hold,” he contends. “It ignores common sense.”</p>
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By James Picerno | <a href="https://www.capitalspectator.com/pick-your-risk-factors-carefully/" title="8:50 am" rel="bookmark"><time class="entry-date" datetime="2013-10-11T08:50:41-04:00">October 11, 2013</time></a>
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<p>The political stalemate over the Treasury default continues, inching closer to a critical moment. What are the potential risks? The discussion is vast and, frankly, uncertain as we navigate uncharted territory regarding Treasury defaults. Donald Marron from the Tax Policy Center notes a brief instance of default in the U.S. in 1979 concerning certain T-bills in his article, <a href="http://taxvox.taxpolicycenter.org/2013/10/04/actually-the-united-states-has-defaulted/">“Actually, the United States Has Defaulted.”</a> In the meantime, what emphasizes your concerns regarding the current crisis? Pundits have generated a plethora of doomsday scenarios. Should we be alarmed? Absolutely. The unfolding situation highlights ineffective leadership that has created an unnecessary crisis endangering the U.S. economy. How can we expect constructive leadership to emerge in the near future? Consider riding in a vehicle with an unsteady driver; it’s wise to remain cautious about the outcome of the journey. Regarding worst-case scenarios, here's a brief list of considerations for the unforeseen future:</p>
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By James Picerno | <a href="https://www.capitalspectator.com/default-lines/" title="4:42 am" rel="bookmark"><time class="entry-date" datetime="2013-10-11T04:42:52-04:00">October 11, 2013</time></a>
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<p>A dramatic turnaround is in the spotlight! <a href="http://www.dol.gov/opa/media/press/eta/ui/eta20132031.htm">Recent filings</a> for new jobless claims surged by 66,000, reaching a seasonally adjusted total of 374,000, marking the highest weekly count since March, according to a division of the Labor Department still issuing economic reports. A number of factors attributed to this increase relate to a backlog stemming from a computer glitch affecting various states. <a href=" http://www.bloomberg.com/news/2013-10-10/jobless-claims-surge-on-california-switch-u-s-federal-shutdown.html">Bloomberg reports</a> that “Issues in California contributed to approximately half of the rise in applications last week, along with about 15,000 claims related to the furlough of non-federal employees due to Congress's failure to reach budget consensus.”</p>
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By James Picerno | <a href="https://www.capitalspectator.com/jobless-claims-surge-on-the-blowback-from-the-backlog/" title="9:15 am" rel="bookmark"><time class="entry-date" datetime="2013-10-10T09:15:58-04:00">October 10, 2013</time></a>
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<p>The upcoming retail sales report for September will be delayed due to the government shutdown. When (or if) we receive this update, it is anticipated that U.S. retail sales will increase by 0.3%, according to an average econometric forecast from The Capital Spectator. This estimation is limited, as it excludes new data from the R-2 model, which partially relies on the latest payroll figures to forecast retail sales. Unfortunately, the previous employment report remains unavailable due to the ongoing budget deadlock in Congress. Based on the data currently on hand, the forecast indicates a slight rise from August's previously reported gain of 0.2%. Interestingly, this projection slightly surpasses several consensus forecasts gathered from recent economist surveys.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/us-retail-sales-september-2013-preview/" title="6:11 am" rel="bookmark"><time class="entry-date" datetime="2013-10-10T06:11:02-04:00">October 10, 2013</time></a>
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<p>The bond market is garnering attention recently, albeit not for positive reasons. With the looming threat of rising interest rates and the potential for a Treasury default in the United States, the concept of fixed-income securities as a safe haven is coming under scrutiny. However, it is essential to recognize that the bond market is far from monolithic. If someone were to share their perspective on "the bond market," your first question should be: Which segment are you referring to?</p>
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By James Picerno | <a href="https://www.capitalspectator.com/the-wide-wide-world-of-bond-etfs/" title="9:13 am" rel="bookmark"><time class="entry-date" datetime="2013-10-09T09:13:07-04:00">October 9, 2013</time></a>
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<p>Today, President Obama is <a href="http://www.usatoday.com/story/money/business/2013/10/08/obama-chooses-yellen-to-chair-fed/2823219/">expected</a> to nominate <a href="http://en.wikipedia.org/wiki/Janet_Yellen">Janet Yellen</a>, currently serving as the vice chair of the Federal Reserve, to take over from Fed Chairman Ben Bernanke, whose term concludes in January. The Senate confirmation hearings might present challenges, especially given her critics among more hawkish members. Some may view her as more dovish than Bernanke. Nonetheless, her candidacy is a relatively safe choice in light of the uncertainty looming over the economy from budgetary disputes in Washington and the potential for a Treasury default this month if Congress does not raise the debt ceiling. Notably, she has the highest accuracy rate among Fed forecasters, as highlighted in a recent study by The Wall Street Journal (<a href="http://online.wsj.com/news/articles/SB10001424127887324144304578624033540135700">“Federal Reserve ‘Doves’ Beat ‘Hawks’ in Economic Prognosticating”</a>).</p>
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By James Picerno | <a href="https://www.capitalspectator.com/janet-yellen-in-her-own-words/" title="5:18 am" rel="bookmark"><time class="entry-date" datetime="2013-10-09T05:18:11-04:00">October 9, 2013</time></a>
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<p>What are the economic implications of the persisting budget conflict in Washington? Currently, the situation is ambiguous, although signs indicate a weakening macro trend, as reflected in a recent profile of U.S. economic conditions. The Macro-Markets Risk Index (MMRI) closed at 8.7% on October 7. While this level suggests a relatively low business cycle risk, the declining trend is concerning given the current circumstances. The MMRI is nearing its lowest value of the year. If the Congressional deadlock continues and leads to a Treasury default, the MMRI might drop even further. A reading below 0% would signal elevated recession risks, while values above 0% indicate a bias toward economic growth.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-markets-risk-index-8-7-10-8-2013/" title="5:41 am" rel="bookmark"><time class="entry-date" datetime="2013-10-08T05:41:41-04:00">October 8, 2013</time></a>
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<p>The partial shutdown of the federal government remains unresolved, but so far, markets appear relatively unfazed by Washington's fiscal deadlock. Whether this calm will persist under the risk of a self-induced default remains to be seen. “On October 17th, our capacity to borrow will end, and Congress is toying with danger,” <a href="http://www.bloomberg.com/news/2013-10-06/u-s-to-default-if-debt-ceiling-not-raised-lew-says.html">warns</a> Treasury Secretary Jacob Lew. “If they don’t raise the debt limit soon, we have a very, very limited timeframe before troubling scenarios unfold.”</p>
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By James Picerno | <a href="https://www.capitalspectator.com/asset-allocation-rebalancing-review-7-oct-2013/" title="4:22 am" rel="bookmark"><time class="entry-date" datetime="2013-10-07T04:22:26-04:00">October 7, 2013</time></a>
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<p>● <a href="http://www.amazon.com/gp/product/007183057X/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=007183057X&linkCode=as2&tag=thecapitalspe-20">The Fall of the Euro: Reinventing the Eurozone and the Future of Global Investing</a><img decoding="async" src="http://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&l=as2&o=1&a=007183057X" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;"/><br/>By Jens Nordvig<br/><a href="http://www.mcgrawhill.ca/professional/products/9780071830577/"><strong>Summary</strong></a> via publisher, McGraw-Hill<br/>The euro began with tremendous promise, yet it has faced significant challenges in recent years. What could occur if Germany decides to abandon the euro? What about Greece or Italy? How will your investments be impacted? The financial crisis of 2007-2008, while centered in the U.S., revealed vulnerabilities in the euro. Some of these vulnerabilities have manifested as crises in Greece, Spain, Ireland, Cyprus, and various other European nations. Yet if corrective measures are not implemented promptly, Europe risks facing a financial breakdown unprecedented in history. Jens Nordvig refers to this possible outcome as “financial anarchy.” *The Fall of the Euro* provides a comprehensive analysis of this critical situation. As Nomura's global head of currency strategy, Nordvig offers invaluable insights, information, and expert analysis necessary for making informed investment decisions.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/book-bits-10-05-13/" title="4:20 am" rel="bookmark"><time class="entry-date" datetime="2013-10-05T04:20:24-04:00">October 5, 2013</time></a>
</footer><!-- .entry-meta -->In summary, the current economic landscape is marked by significant shifts and uncertainties. From the insights provided by thought leaders like Gneezy, List, and Nordvig, to the pressing concerns of bond markets and ongoing governmental struggles, it’s crucial to stay informed and make sound decisions in these challenging times. Understanding the intricacies of these dynamics is vital for both individual investors and the broader financial community.
