{"id":31313,"date":"2015-11-21T02:12:52","date_gmt":"2015-11-21T07:12:52","guid":{"rendered":"http:\/\/prefblog.com\/?p=31313"},"modified":"2015-11-21T02:12:52","modified_gmt":"2015-11-21T07:12:52","slug":"november-20-2015","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=31313","title":{"rendered":"November 20, 2015"},"content":{"rendered":"

There were no surprises with Canadian inflation<\/a>:<\/p>\n

Statistics Canada reported Friday that the country\u2019s inflation rate, as measured by the year-over-year change in the CPI, held steady at 1 per cent in October, as slumping energy costs continued to suppress an otherwise generally rising tide for consumer prices. The CPI edged up a thin 0.1 per cent in October over September, despite gains in most major categories, including a 0.4-per-cent rise in food prices and a 0.3-per-cent increase in shelter costs. But gasoline prices slid 2 per cent month over month, leaving them down 17 per cent compared with a year earlier.<\/p>\n

Excluding the energy sector, CPI was up 0.2 per cent month over month, and 2.1 per cent year over year, the statistical agency said.
…<\/b>
But economists noted that the days of below-normal inflation rates are numbered \u2013 simply because the plunge in energy prices is about to drop out of the year-to-year price comparisons.<\/p><\/blockquote>\n

The BoC has published a working paper by Celso Brunetti, Bahattin Buyuksahin, Jeffrey H. Harris titled Speculators, Prices and Market Volatility<\/a>:<\/p>\n

We analyze data from 2005 through 2009 that uniquely identify categories of traders to assess how speculators such as hedge funds and swap dealers relate to volatility and price changes. Examining various subperiods where price trends are strong, we find little evidence that speculators destabilize financial markets. To the contrary, hedge funds facilitate price discovery by trading with contemporaneous returns while serving to reduce volatility. Swap dealer activity, however, is largely unrelated to both contemporaneous returns and volatility. Our evidence is consistent with the hypothesis that hedge funds provide valuable liquidity and largely serve to stabilize futures markets.
…<\/b>
We also examine whether the \u201cfinancialization\u201d of futures markets (as represented by the changing mix of participant positions) has affected the functioning of the futures markets. In every instance, we find that speculative position changes do not amplify volatility during the crisis and so do not impede the functioning of futures markets. Conversely, in each market we find that macroeconomic conditions are significantly related to futures market volatility, with the strongest link from 2006 through July 2008. In fact, during the heart of the financial crisis after July 2008, volatility is strongly related to macroeconomic uncertainty (rather than market conditions or financialization).<\/p>\n

Although our tests do not examine positions, prices or volatility over short intervals (such as a few hours or days), we find no systematic, deleterious link between the trades of hedge funds or swap dealers and either returns or volatility. To the contrary, hedge fund trading, although positively correlated with price changes, is negatively related to volatility both contemporaneously and with a one-day lead. Hedge funds commonly provided liquidity in futures markets and improved price efficiency during the recent financial crisis. We conclude that speculators such as hedge funds and swap dealers should not be viewed as adversarial agents in financial markets, but rather as important liquidity providers to hedgers that enhance the proper functioning of financial markets.<\/p><\/blockquote>\n

It seems that all the downtown development that Toronto is seeing is not an isolated phenomenon<\/a>:<\/p>\n

Lena Edlund and Michaela Sviatchi of Columbia University and Cecilia Machado of the Getulio Vargas Foundation wondered why the relationship between housing prices and distance from the center of major U.S. cities has reversed since 1980. That year, prices were higher in the suburbs, and urban centers were going to seed. In the next 30 years, prices within three miles of the central business districts of the 27 biggest cities in the U.S. more than doubled. Within a radius of three to 10 miles, they increased by 60 percent. Further out, they only grew by 6 to 10 percent.<\/p>\n

“The price profile flips,” the economists wrote in a recent paper. “In 1980, prices in the periphery are 50 percent higher than in the center. By 2010, prices in the center are 40 percent higher than in the periphery.”<\/p><\/blockquote>\n

The original paper<\/a> also notes:<\/p>\n

Between 1965 and 2005, leisure grew but not for the college educated. In the 1985-2005 period, the contraction in leisure among college men was substantial enough to result in an overall reduction for men (leisure grew among non-college men); for women, leisure contracted across the board but at the twice the rate for college women compared to non-college women [Aguiar and Hurst, 2009, table 2-2].<\/p>\n

Aguiar and Hurst [2007, 2009] identified rising labor supply of the skilled to lie at the core of this development. Census data bear this out. The fraction college graduates who worked full time started to rise in the 1970s after three decades of barely moving, Figures 2 and 3. Unsurprisingly, the increase was more pronounced for women. Since 1990, there has also been a notable increase in the fraction (men and women) working 50+ hours per week (or \u201clong hours\u201d to use the terminology of Kuhn and Lozano [2006]).<\/p><\/blockquote>\n

I sneered at the Capital Power note exchange offer yesterday<\/a> – the information circular has now been released on SEDAR<\/a> although I am not permitted to link to it directly<\/a> as this would make access to public documents too convenient for mere retail scum. The company states:<\/p>\n

CPLP believes the Note Exchange Transaction may have the following benefits for the CPLP Noteholders, and that CPLP Noteholders should consider the following factors, among others, in making a decision whether to vote in favour of the Note Exchange Resolution:<\/p>\n