Features of the week

We've got some great items for you on the economic recovery, the story of the Weimar hyperinflation, strategies and outlook of top-performing hedge funds, and more in this Friday's "Features". Enjoy the links.

1. Top performing hedge funds that dodged the crash & rode market rally back turn gloomy - Bloomberg.

2. BBC interviews Adam Fergusson, author of When Money Dies.

3. Read Adam Fergusson's history of the Weimar hyperinflation, When Money Dies, along with Jens O. Parsson's Dying of Money online for free - Prudent Investor.

4. Anthony Boeckh on The Artificial Recovery (pdf) - Financial Sense.

5. The Ruling Elite Called... (James Quinn) - Financial Sense.

6. AR TV on the state of the financial world - Abnormal Returns.

7. Breaking down 2Q earnings season - WSJ Marketbeat.

8. Humans are "slightly smarter, pants-wearing primates": Monkey Economics - Big Picture.

9. Why America locks up too many people - The Economist.

10. Geoff Gannon interviews Jon Heller of the Cheap Stocks blog - Controlled Greed.

Have a great weekend and stop back soon!

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Victor Sperandeo warns of hyperinflation

"Trader Vic" Sperandeo is on CNBC describing the historical pattern for the onset of hyperinflation, and says the conditions for such a runaway inflation are now here in the US.

We're getting more familiar with these types of extreme forecasts as our economy drifts into unchartered territory. It seems market watchers are almost growing accustomed to hearing predictions about a coming hyperinflation or a looming deflationary depression.

Still, it should be noted that Sperandeo is a serious guy and a very serious researcher (my observations based on reading his work and listening to his interviews). His knowledge of economic history and the nature of money creation and business cycles is profound. So while the forecasted event is an extreme and rare event, don't dismiss Vic as "just another scaremonger".

It is striking to note that while Vic is arguing his case for the likelihood of hyperinflation, in effect the spiralling collapse of a society and an economy, he is interrupted by the CNBC girl who wants to know "what the trade is" in this scenario. Cable TV never ceases to amaze.

Related articles and posts:

1. Dying of Money: causes of inflation - FSN broadcasts via Finance Trends.

2. Interview: Victor Sperandeo on hyperinflation - Tischendorf.com.

The History of Economic Cycles

Just a cool video I found on YouTube.

A short, "History of Economic Cycles" from 1800-2000, focusing on the contributions of Sir Willilam Herschel, Clement Juglar, William Stanley Jevons, Simon Kuznets, W.D. Gann, J.M. Hurst, R.N. Elliott, Joseph Schumpeter, and more.

Enjoy the clip!

Matt Simmons interview on BP Gulf disaster

King World News recently interviewed Matthew Simmons for his latest take on the BP Gulf disaster.

You can hear Matt's alarming warnings about the coming fallout from this environmental catastrophe, along with his view of what's really happening in the Gulf and the region, in the interview linked above.

In addition, we also want to examine some of Matt Simmons' claims and his motives for speaking out on this disaster. There's been a lot of talk about Simmons' short position in BP stock (which Matt spoke about in a recent Bloomberg TV interview), along with some questions (including my own) about any conflicts of interest he might have as founder of the Ocean Energy Institute, "a think-tank and venture capital fund addressing the challenges of U.S. offshore renewable energy".

Earlier today, Chris Nelder pointed to this Robert Rapier piece entitled, "Is Matt Simmons Credible?". Rapier outlines what he feels are some of Simmons' more outlandish or incorrect claims regarding the BP disaster and why Simmons may not be the authority on the spill that he presents himself to be.

While I have respect for Simmons and am always interested to hear his views on energy matters, the Rapier post does provide some useful food for thought, especially given the more uncritical questioning Simmons has encountered from many interviewers who are not energy specialists, to say the least.

Wealth effect explained: Adam Sandler in "Big Daddy"

Wealth effect explained in 21 seconds, via Adam Sandler & Co. in the 1999 comedy, Big Daddy.

Interview with Jack Schwager at CIO

Aiki14 points us to this excellent interview with Jack Schwager at Capital Ideas Online.

If you're a fan of The Market Wizards book series and the trader interviews Schwager has compiled over the years, you'll definitely want to check out the distilled wisdom in this piece. Here's an excerpt from the discussion:

"CIO: Thank you Mr. Schwager for taking out time and talking to us. Over your long career in the markets you have interacted with some of the greatest traders. Could you share with us what you perceive are the qualities of great traders?

Jack Schwager: There are really very many. I will give you a few key ones. First on the list would be discipline. I can't think of anybody I have interviewed or met as a trader who has been very successful but has not been disciplined. I think that's probably an absolute essential.

Secondly, money management and risk control is certainly critical in one form or another. Most of the traders that I have interviewed will be the first to acknowledge that they consider money management actually more important than the methodology.

The other thing that is definitely worth mentioning is that successful traders find an approach that fits their personality. Time and time again, I see that the method that a trader is using very much reflects that person's characteristics or natural tendency.

For example, when I interviewed Paul Tudor Jones, he set a time that was during market hours. At the same time I was interviewing him, phones were ringing, people were coming in with messages, and he was watching multiple monitors around his office and yelling out orders on open phone lines to a number of different floors. It was almost complete bedlam, but he actually thrived in that type of atmosphere. That's the way he traded..."

There are some very fine insights on risk management and trading discipline here, along with some discussion on the efficiency of markets and the role human behavior has in shaping market conditions and individual returns. Certainly a worthwhile read; check it out.

Features of the week: Finreg+ edition

As you all know, the Dodd-Frank financial reform bill passed the Senate on Thursday and is set to be signed into law by President Obama next week.

What will the future hold for us as a result of finreg, and how will we live in the months and years ahead? Let's look at the week's events and the shape of weeks to come in our, "Features of the week".

1. Senate passes landmark financial reform bill - US News & World Report.

2. The best financial reform? Let bankers fail - Jim Grant.

3. Stocks tumble, yen, treasuries advance on recovery concern - Bloomberg.

4. Jim Grant confident QE 2.0 is just around the corner - Zero Hedge.

5. Goldman Sachs' $550 million SEC settlement summarized in 140.

6. Barry Ritholtz feels SEC case is "a painful loss for Goldman Sachs, with expensive repercussions" - Big Picture.

7. The $4 Trillion Question: Dhaval Joshi provides an illuminating look at housing supply and strategic default - Big Picture.

8. Fed gets more power, responsibility from Finreg - WSJ.com

9. Jeffrey Tucker's new book, Bourbon for Breakfast: Living Outside the Statist Quo is available in hardcopy and free PDF download at Mises.org.

10. Lessons from Irwin Yamamoto - The Kirk Report.

Have a nice weekend, and remember, you can tune in with all our updates and posts via Twitter and our RSS feed.