● The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
By Brink Lindsey and Steven Teles
Summary via publisher (Oxford University Press)
For years, America has been plagued by slow economic growth and increasing inequality. Yet economists have long taught that there is a tradeoff between equity and efficiency-that is, between making a bigger pie and dividing it more fairly. That is why our current predicament is so puzzling: today, we are faced with both a stagnating economy and sky-high inequality. In The Captured Economy , Brink Lindsey and Steven M. Teles identify a common factor behind these twin ills: breakdowns in democratic governance that allow wealthy special interests to capture the policymaking process for their own benefit.
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The Most Dangerous (and Ubiquitous) Shortcut in Financial Planning
John West and Amie Ko (Research Affiliates)
September 2017
Using historical returns to forecast the future is one of the most common shortcuts in financial planning. Investment advisors who use only past returns to forecast future returns may well be creating unrealistic expectations and poor investment outcomes for their clients. Our online Asset Allocation Interactive, which uses starting yields to forecast future long-term returns, gives advisors a rich toolkit with which to construct portfolios most likely to achieve their clients’ financial goals.
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Trump is expected to decertify Iran nuclear deal: BBC
House Speaker Paul Ryan says tax reform is a priority: RTT
Jobless claims continue to fall as hurricanes influence fades: Reuters
A rebound in energy prices lifts producer price index for Sep: USA Today
Fed Gov. Brainard says soft inflation’s explanaion is unclear: MarketWatch
Fed’s Powell: rate hikes will be “gradual”: MNI
Bitcoin rises above $5800 — a new record: CoinDesk
Big banks project rising deliquency rate for consumer loans: Bloomberg

Inflation has been trending lower this year, but the Federal Reserve still appears on track to hike rates again before the year is out.
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Spain issues ultimatum to Catalonia on independence vote: Reuters
North American Free Trade Agreement’s days appear numbered: NY Times
Fed minutes point to rate hike in December: CNBC
US job openings edged down in Aug, but still near record high: USA Today
SF Fed’s Williams: “banks need to plan for lower rates”: SF Fed
Is Stanford U’s John Taylor on short list to become next Fed chair? Bloomberg
New poll shows Americans favor higher taxes on wealthy: Reuters
Is the rise of hedging (Skew Index) a warning sign for S&P 500? CityIndex

A bull market prevails across all the major US factor strategies led by momentum, based on one-year returns via a set of proxy ETFs.
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Catalonia declares independence from Spain… sort of: NY Times
IMF trims US economic forecast: Washington Post
IMF projects Eurozone economic recovery will strengthen: MNI
US Small Business Optimism Index falls in Sep to lowest level this year: NFIB
A bit more pessimism shows up for US consumer expectations in Sep: NY Fed
Krugman: Warsh, who may run the Fed, is “wrong about everything”: BBG
Global economic activity picked up in 2017’s first half: IMF

In the quest for clarity in portfolio analytics, Professor Bill Sharpe’s introduction of returns-based style analysis was a revelation. By applying statistical techniques to reverse engineer investment strategies using historical performance data, style analysis offers a powerful, practical tool for understanding the source of risk and return in portfolios. The same analytical framework can be used to replicate indexes with ETFs and other securities, providing an intriguing way to invest in strategies that may otherwise be unavailable.
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Raging wildfires destroy thousands of Northern California homes: USA Today
Richard Thaler wins Nobel for behavioral economics research: The Atlantic
EPA chief says wind and solar tax credits should be eliminated: The Hill
Turkey-US diplomatic crisis deepens: Bloomberg
Is Spain’s Catalonia crisis an investment opportunity? Bloomberg
German industrial output in Aug posts the strongest  rise in 6 years: RTT

Equities in emerging markets posted a solid gain in the first week of October, marking the strongest weekly advance among the major asset classes, based on a set of exchange-traded products.
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