Abenomics is meant to resolve Japan’s macroeconomic problems. It consists of monetary policy, fiscal policy, and economic growth strategies to encourage private investment. The detailed policies includes inflation targeting at a 2% annual rate, correction of the excessive yen appreciation, setting negative interest rates, radical quantitative easing, expansion of public investment, buying operations of construction bonds by Bank of Japan (BOJ), and revision of the Bank of Japan Act. (source: wikipedia>
AAII Investor Sentiment
The AAII Investor Sentiment Survey offers an insight into the mood of its members, who are individual investors. AAII is conducing it since 1987. Click here for the latest survey result.
It states the bullish and bearish sentiments of investors in percentage terms. At extreme readings, AAII Investor Sentiment works as a contrarian indicator but at other times, it provides signs for future direction of the market..
Here is John C. Williams, President and CEO, Federal Reserve Bank of San Francisco, in a 2012 speech about full employment.
“In considering what maximum employment is, economists look at the unemployment rate. We tend to think of maximum employment as the level of unemployment that pushes inflation neither up nor down. This is the so-called natural rate of unemployment. It is a moving target that depends on how efficient the labor market is at matching workers with jobs. Although we can’t know exactly what the natural rate of unemployment is at any point in time, a reasonable estimate is that it is currently a little over 6 percent. In other words, right now, an unemployment rate of about 6 percent would be consistent with the Fed’s goal of maximum employment.”
Emerging Markets (Or Economies)
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. A nation’s economy that is progressing toward becoming advanced, as shown by some liquidity in local debt and equity markets and the existence of some form of market exchange and regulatory body. (source: Wikipedia, Investopedia)
Frontier Markets (Or Economies)
Frontier markets could also be termed ‘pre-emerging’ markets. These countries are distinguished by capital markets that are underdeveloped compared to emerging markets. Their stock markets are investable but less established than those in the emerging markets. (source: Business Insider, Investopedia)
JGB – Japanese Government Bond
A bond issued by the government of Japan. The government pays interest on the bond until the maturity date. At the maturity date, the full price of the bond is returned to the bondholder. Japanese government bonds play a key role in the financial securities market in Japan. (source: Investopedia)
The term “macro tourist” refers to someone who is not a traditional macro expert stepping out of one’s comfort zone to make big bets based on one’s own (often flawed) notion of economics. (source: Business Insider)
A Minsky Moment is a sudden collapse of asset values which is part of the credit cycle or business cycle. It was coined by Paul McCulley of PIMCO in 1998 to describe the Russian Financial Crisis. It is named after economist Hyman Minsky, who said, “stability ultimately leads to instability”. This moment occurs after a long period of prosperity and speculation fueled by high leverage. It gained more prominence after the Lehman Brother’s collapse in 2008. (source: Wikipedia)
A word about PowerPoint. PowerPoint was released by Microsoft in 1990 as a way to euthanize cattle using a method less cruel than hitting them over the head with iron mallets. After PETA successfully argued in court that PowerPoint actually was more cruel than iron mallets, the program was adopted by corporations for slide show presentations.
Conducting a PowerPoint presentation is a lot like smoking a cigar. Only the person doing it likes it. The people around him want to hit him with a chair.
Note: If you really believed this then it may be time for you to stop trading your own money. Trading someone else’s money (if you can get them to give it to you) is a different ball game.
Quantitative Easing (QE) has been shaping the global economy for quite some time. Willem Buiter, Chief Economist of Citigroup (formerly Professor of European Political Economy, London School of Economics) proposed some terminology for QE.
“Quantitative easing is an increase in the size of the balance sheet of the central bank through an increase it is monetary liabilities (base money), holding constant the composition of its assets. Asset composition can be defined as the proportional shares of the different financial instruments held by the central bank in the total value of its assets. An almost equivalent definition would be that quantitative easing is an increase in the size of the balance sheet of the central bank through an increase in its monetary liabilities that holds constant the (average) liquidity and riskiness of its asset portfolio.”
Triple Witching Day
On the third Friday of the quarter ending month – March, June, September and December – multiple contracts expire. This day, when the contracts for stock index futures, stock index options and stock options expire, is called Triple Witching days. Triple witching hour is the last hour of the trading session (3:00-4:00 P.M., New York Time).