There is no generic risk.  There are many risks.  Are you getting fair compensation for the risks that you are taking?  If not, invest in other risks, or if there are few risks worth taking, invest in cash, TIPS, or foreign fixed income.”  (Aleph Blog)

“In a big systemic shock, which is what we had in 2008, it’s “fat tail risk.” We all know that eight asset classes can compress to two: risky and riskless.”  (Barron’s)

On the topic of asset allocation, a prior post on the need for adaptive asset allocation models.  (Abnormal Returns)

The Curse of Dow 10,000.  (The Money Game)

Steve Leuthold remains bullish.  (Fund My Mutual Fund, Trader’s Narrative)

The Halloween indicator isn’t dead…yet.  (Marketwatch)

By one measure the stock market is no longer cheap.  (dshort)

Quant models, which rely on a statistically “normal” market, are terminally broken, best visualized by YTD drubbing of traditional market natural and L/S indices.”  (Zero Hedge)

“But the best traders I know and those that seem to make the most money long-term can blend fresh with stale. They can look out and look back.”  (Howard Lindzon)

Markets trump strategies. No matter how clever the plan, you cannot raise all ships on an ebb tide.”  (Marketwatch)

DBA and DBC won’t look much like themselves anymore. They’ll look more like the more diversified commodity ETFs that are already on the market…”  (IndexUniverse)

“So far this year, nearly all of the earnings improvements have been achieved through major cost-cutting efforts.”  (NYTimes)

“So how bad is this recession turning out to be, in terms of job losses?”  (NYTimes)

The unemployment news in context.  (The Stash also Aiki14)

“Although I expect the GDP numbers later this month to show positive growth for the quarter, further deterioration on jobs is bad news for critical factors like loan defaults and total spending.”  (Econbrowser)

The many ways the government subsidizes the real estate-industrial complex.  (Time also Calculated Risk)

How do you hedge housing derivatives?  (Rortybomb)

“Why isn’t the government breaking up the giant, insolvent banks?”  (naked capitalism)

Greenspan, in other words, seems to have learned almost nothing from the crisis.”  (Felix Salmon)

“Where there are totally integrated global supply chains, I suspect that the definitions of “import” and “export” begin to lose meaning.”  (Ultimi Barbarorum)

Part two of an interview with distressed debt fund manager Peter Lupoff.  (Distressed Debt Investing)

Warren Buffett’s recommended reading list.  (market folly)

Sherlock Holmes on the delusion of active investing.  (The Psy-Fi Blog)

Sometimes the cheap and simple fix is the best fix.  (Freakonomics)

Abnormal Returns is a proud member of the StockTwits Network.