Good news on the corporate-bully front: Hertz, which was behaving abominably towards Audit Integrity, has utterly caved, dropping its libel suit on the grounds that it was “not worth pursuing now”. Or, one assumes, ever again. A small but important victory for freedom of speech in the financial markets.
Fama and French have a very long blog entry (over 5,000 words) about the latest version of their paper on mutual fund returns. As you might expect from research sponsored by an index-fund company, it shows that active mutual-fund managers fail to outperform the market. But at least it does so with pretty charts.
If a home is not an investment, what about a Treasury bond? In my comments, Dan responds forcefully to Urban Legend, who was trying to make the case that low interest rates do a lot of harm to those poor millionaires looking to live on their risk-free interest payments alone:
It seems the housing speculators are back, and Daniel Indiviglio is joining their ranks, now that mortgage rates are back at record lows. “If you’re in the market for a home as a long-term investment, say at least 10-15 years, it’s pretty hard to make an argument against buying now,” he says.
Back in April, Willem Buiter called Citigroup “a conglomeration of worst-practice from across the financial spectrum”; he followed up in June with a blog post entitled “Too big to fail is too big“, in which he likened Citi’s former chairman and CEO, Win Bischoff, to Ayatollah Ali Khamenei. Which maybe explains why there’s no quote from Buiter himself in the press release announcing his arrival at Citigroup. Maybe they just thought it would be better to have him inside the tent pissing out.
Willem Buiter is joining Citigroup as its chief economist. It’s an important role — so important, in fact, that Buiter should be able to demand that he be allowed to continue to write his rather fabulous blog, either in its current location at the FT or else somewhere on citigroup.com. A widely-read and widely-respected blog is a useful tool for any economist to have, and Citi should be encouraging Buiter to keep his.