Daily Reading – Monday, May 2, 2011

FT Alphaville: El-Erian: Implications for global markets of Bin Laden’s death

Markets will see the news as implying an overall reduction in terrorist threats, the elimination of a specific security risk and, as such, a lowering in the risk premia. In the very short term, it could also involve the possibility of isolated disturbances in some parts of the Middle East and Asia.

FT Gideon Rachman’s blog: Conspiracy theories about Osama’s death

A bit of an embarrassment for Pakistan that Osama bin Laden should finally be found, living within minutes of Pakistan’s equivalent of West Point. Although President Obama was too tactful to say it, this cannot but raise the question of whether bin Laden was enjoying the protection of the top ranks of the Pakistani army. Or to put it another way, the Pakistani top brass is either exceptionally dozy or exceptionally duplicitous.

The Big Picture: The Destruction of Economic Facts

As we have discussed previously (here and here), de Soto has identified the property record keeping — he calls them “public memory systems” — as one of the major advantages of Western Capitalism. The recording, rule-bound, certified, and publicly accessible registries, titles, balance sheets, and statements of accounts, especially for land and houses — is how our system creates “economic facts.”

The Big Picture: Uh-Oh: Is Shiller Defending the Failures of Economists?

Was it the hammers or the carpenters?

That is the question alluded to this morning by Yale Professor Robert Shiller in the NYT. Shiller is one of my favorite academics working in the field of finance. He tries to (diplomatically) argue we can prevent future crises if only we had better econometric tools. I would counter that future crises could be avoided if only we had less economists who were fools.

JESSE’S CAFÉ AMÉRICAIN: Portrait of Desperation

Shock and awe in the thin Sunday night trade, running the stops of the new futures holders whose options were filled. Even more heavy handed and blatant than usual.

JESSE’S CAFÉ AMÉRICAIN: Open Letter From Ted Butler to Custodian of SLV Silver ETF

I think his faith in the custodians, the ETF, and in the past, the CFTC and SEC, to do the right thing is probably misplaced. So far they have done nothing but extend and pretend.

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