Salient to Investors:

Steve Hanke at Johns Hopkins University said inflation is always and everywhere a monetary phenomenon, but hyperinflation is always and everywhere a political phenomenon.

Ricardo Hausmann at Harvard says the Fed’s planned tapering is not the only reason why emerging-market stocks and bonds are down. Hausmann said for most emerging markets, economic growth from 2003 to 2011 was caused by terms-of-trade improvements, capital inflows, and real appreciation, and these mean-reverting processes are reverting and the buoyant performance of the recent past is unlikely to return any time soon.

Gillian Tett at the Financial Times said most hedge fund leaders have done a dismal job of orderly succession.

Yves Mersch at ECB said investor confidence has been damaged by the perception that some supervisors have not been tough enough with their domestic banks. Mersch said the average price-to-book ratio of large and complex banking groups in the euro area is only 0.5, which implies that investors think banks are overvaluing their assets, will not meet their required rates of return, or will require new capital.

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