Quote of the day

David Graeber, “In fact, if we count the Third World debt crisis, which did after all affect most human beings on the planet, the world has been in a continual series of debt crises since the ‘70s.”  (Speakeasy)

Chart of the day

Quite a shift in the VIX futures term structure over the past two weeks.  (VIX and More)

Markets

The worst start to August ever.  (Bespoke)

Dow Theory is unequivocally on a sell signal.  (StockCharts Blog)

No matter how you measure it “a concerted and exhaustive selling wave has taken place.”  (Pragmatic Capitalism)

“Very slow growth” and “plenty of fear” are priced into the stock market.  (Barron’s)

Junk bonds are moving the opposite direction as Treasurys.  (StockCharts Blog)

Investor psychology changed for the worse last week.  (WashingtonPost)

Traders are reflexively using 2008 as their model for market volatility.  (NYTimes)

There is a pent up desire on the part of institutions to sell US equities.  (WSJ)

Earnings season has not been kind to stocks.  (Bespoke)

If the markets don’t stop falling this may be in our future.  (Phil Pearlman)

Strategy

It was a tough week for everyone, stay focused.  (Dynamic Hedge)

On the optionality of cash.  (Free exchange)

Home bias affects us all.  (NYTimes)

Periods of market volatility are a time for introspection.  (Phil Pearlman)

Companies

Is it time for Pepsi ($PEP) to “pull a Kraft”?  (Barron’s)

What is weighing on Ford ($F) shares?  (WSJ)

Get ready for a prepaid iPhone that is an “innovative, category killer.”  (SAI)

Finance

The active ETF space is getting crowded.  (IndexUniverse)

The increasing small world of short-selling hedge funds had a good week last week.  (MarketBeat)

Talk about the hot IPO market has dried up.  (Dealbook)

Global

Don’t forget about Italy.  (Money Game)

Investors have already been looking at emerging market bonds in a new light.  (beyondbrics)

S&P downgrade

Check out the spread on sovereign bonds rated AAA by S&P.  (Baseline Scenario also SurlyTrader)

S&P will likely face a backlash due to their decision.  (A Dash of Insight)

It is time to remove the central role of NSRSOs in the financial system.  (Rajiv Sethi)

Sovereign defaults are ultimately political decisions, not economic ones.  (Felix Salmon)

Character has long since dropped out the ‘5 C’s of credit.’  (Interfluidity)

How should ratings agencies react to novel credit structures?  (Aleph Blog)

What would happen to the ratings agencies if they lost their regulatory clout?  (Crooked Timber)

Economy

Bond holders shouldn’t necessarily cheer a return of QE. (WSJ)

Good luck trying figure out the influence of index funds on commodity prices.  (Econbrowser)

Rail traffic was soft in July.  (Calculated Risk)

Just how much pent demand for housing is there?  (Economist)

Three things the Fed could do right now.  (Real Time Economics)

Earlier on Abnormal Returns

What you missed in our Saturday long form linkfest.  (Abnormal Returns)

What everyone else was reading this week on Abnormal Returns.  (Abnormal Returns)

The ultimate USA downgrade linkfest.  (Abnormal Returns)

Mixed media

The neuroscience of success and the important role of self-control.  (Big Think)

As great as the social web is, it is no substitute for face-to-face interactions.  (The Frontal Cortex)

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