There is a difference between bonds and money. Bonds cannot be used to buy goods and services, money can. Inflation comes from too much money chasing too few goods. This plan would borrow from the federal reserve and use money to pay off maturing bonds (instead of raising the debt ceiling and using new bonds). The net impact on the money supply would be $5 trillion higher than using bonds. Given that the current money supply is about $9 trillion, this would be problematic, to say the least.
Granted, but I think the writer was attempting (poorly) to celebrate the engineering marvel that is the shuttle. For me, I get it better from super-slow-mo video: http://www.youtube.com/watch?v=W2VygftZSCs
As a nerd that has a passion for finance, one thing worth considering is that the work of finance itself is tremendously fulfilling (outside of the demonizing that happens from some ill-informed quarters). The problems that you are presented with are fascinating, you are surrounded with motivated people of incredible ability, and have unbelievable responsibility at a young age - where else would I get to advise the CEO of a company on his strategy at age 25? If you have never helped a desperate company raise capital to avoid going bust by working consecutive 100 hour weeks, I suppose I can't really explain the feeling. Most of all, the work is just interesting. Or maybe I'm the devil.
Any link? I suspect that those cars had a negative average cost - taking into account fixed overhead, sales, general and administrative, depreciation, etc.
The difference here is that they are earning negative variable margin. In my world, there's a constant joke when you come across a product line with a negative variable margin: people like to joke, "yeah, but you make it up volume." Here, people don't have the same sense of irony.
Perhaps if we close our eyes and concentrate, we can wish it to be economically feasible.
My guess is that the company weighed the merits of continuing to exist against the issues of giving up control. They've lost over $250MM over the last few years and are probably still looking at a few years of losses ahead of them; that money has to come from somewhere. It might as well be public shareholders.
But why don't they just raise prices on mail? The amount of junk mail I get seems to indicate that the cost of mailing things to me is too low. I'd much rather get less mail, more reliably.
Indeed - long term investors should cheer market inefficiencies. No one forces me to buy an overvalued stock or sell an undervalued stock, and when prices are too low - that is a good thing for a buyer.
"Lagging" means that it is easily predicted by other variables - such as industrial production (see federal reserve website for all sorts of fun data). Industrial production is arguably the most important variable. Stock market tends to be correllated to it, and lead it by a month or two. The objective facts are that 1) the stock market is correllated with many things that will happen in the future and 2) unemployment ~1 year out is very easily predicted. If unemployment matters most, we should address policy using "leading indidicators" and "coincident indicators" (those that tend to predict unemployment) rather than addressing the lagging indicators. To do otherwise would be to drive using the rear view mirror.
...and just 10 years ago it was worth 14,000. The point is that the only valid way to value a company is based on its projected cash flows, discounted to the present. Reasons for changes in price include: changes in projected cash flows (looks like we are not heading for a great depression), low treasury interest rates and low expected inflation, and higher degree of risk tolerance. I must have missed the semester where you value a security based on what some idiot pays for it (actually I guess that is technically the price=value strong form market efficiency hypothesis, but no one actually buys into that).
Studies have shown that nearly all of people who contracted cancer had lived in a house within the past 5 years. I'm surprised there isnt more of an uproar.
I'm curious about whether the number of planets of the type that are detectable with current technology can provide us with estimates of total earth-like planets. For instance, if we know that we can only currently detect large mass planet orbiting quickly, and have found that X% of stars seem to have them, what does that imply for small rocky planets that are not close to their stars? As our technology improves and we expand the set of types of planets that we are able to observe, it seems like we should be able to refine our estimate of the fraction of stars that have earth-like planets.
Rhodes' "Making of the Atomic Bomb" has an excellent recap of the path the atomic physics took from discovery of atom to the atom bomb, with a strong focus on how the physical experiments were married to the theoretical. In fact, there are a number of examples of people uncovering results in physical experiments without realizing the implications. For instance, the Joliot-Curies ran experiments which demonstrated the existence of both the neutron and positron, without realizing it. Others came up with the theory, realized the Joliot-Curies misinterpreted their findings and achieved glory. Doesn't go too in-depth on some phenomena like the photoelectric effect, but I can highly recommend it for the path between the birth of quantum physics and the atomic bomb.
Re:Knuth didn't get it wrong
on
Knuth Got It Wrong
·
· Score: 5, Informative
How does one get from, "I have not found a systematic flaw in the quality of Knuth et al.'s reasoning" to "Knuth Got it Wrong"?
From my experience, the answer is likely vietnam or cambodia. I have seen a few firms considering pulling out of china due to rising wages/price inflation, and they were all looking at these two countries.
If memory serves, 19th century England had an interesting anomaly, in that during some period overall life expectancy declined, while life expectancy improved both for city-dwellers and non-city dwellers. The reason the overall statistic declined was the flood of the people to the city (where life expectancies were lower) had the effect of lowering the average.
The damned thing is that sometimes it really is different. Compare bond yields and stock dividend yields pre- and post- 1950s, for a dramatic instance. Many called bubble, but were in time proven incorrect. Many (legendary) investors scoffed at the high prices being paid for the "technology" stocks like American Telephone and Telegraph, Radio Corporation of America and International Business Machines in the 1930s. Central banking _has_ evolved such that we are able to prevent depressions, which has important implications for asset prices. The challenge in financial markets is trying to tease out the permanent from the temporary. Finance is not always as simple as saying "prices have increased, ergo bubble. qed."
Having read the paper, this is more ridiculous than I initially suspected. Of the four assets that they identified as being "bubbles", all four increased in price since they made the prediction! The only way to ultimately determine if a bubble is a bubble and not a rational increase in prices is by the subsequent collapse. They try to hedge themselves by saying that it changed into "some other sort of regime", ie non-hyper-exponential growth. So if it is flat, or down, or up they are correct. The only instance they claim to be able to predict is that the asset will not increase hyperexponentially. And they even fail at this, in the price of cotton. Sadly, can claim some knowledge in the realm of finance.
What was the criteria for evaluating success? TFA says that the impressive result by anyone's standards is that they predicted a crash in gold, which then was roughly flat for the next six months...
There is an entire industry of "quants" attempting to do things like this for banks and hedge funds. Of course, they do not publish their results. If you would like to see what a good classification of bubbles looks like, see: http://dealbook.blogs.nytimes.com/2010/01/27/schillers-list-how-to-diagnose-the-next-bubble/.
Note also that identifying a bubble is not always sufficient to profit. Julian Robertson of Tiger Fund famously identified the tech bubble - in '97. He subsequently lost billions betting against tech stocks that stubbornly refused to crash until after he had given up.
IANAL, but couldn't each of these individuals file a discovery motion that would be easy to put together but a complete pain for the lawyers to comply with? Surely each individual could find a way to generate 10-20 hours worth of work for those attorneys, at ~$350 per hour? That approach might make it uneconomical to pursue this behavior.
My point is simply that TFA has doomsday scenarios that in older times people speculated would result from a complete loss of fuel (ie wood), and asks us to draw a comparison to oil. For the examples TFA gives (Easter Island is not one of them), all of the worrying came to naught thanks to technological progress. There are many examples of the harm caused by natural resource depletion, but this article fails utterly to mention them. Not saying it always works out, but it sure did for all the examples and fears (loss of fuel) given.
Slashdot Mirror
There is a difference between bonds and money. Bonds cannot be used to buy goods and services, money can. Inflation comes from too much money chasing too few goods. This plan would borrow from the federal reserve and use money to pay off maturing bonds (instead of raising the debt ceiling and using new bonds). The net impact on the money supply would be $5 trillion higher than using bonds. Given that the current money supply is about $9 trillion, this would be problematic, to say the least.
Granted, but I think the writer was attempting (poorly) to celebrate the engineering marvel that is the shuttle. For me, I get it better from super-slow-mo video: http://www.youtube.com/watch?v=W2VygftZSCs
Phew. I was afraid they weren't going to discover that before the end of april.
Are you kidding? She can't even manage to send the simplest message to Bob without it getting intercepted.
As a nerd that has a passion for finance, one thing worth considering is that the work of finance itself is tremendously fulfilling (outside of the demonizing that happens from some ill-informed quarters). The problems that you are presented with are fascinating, you are surrounded with motivated people of incredible ability, and have unbelievable responsibility at a young age - where else would I get to advise the CEO of a company on his strategy at age 25? If you have never helped a desperate company raise capital to avoid going bust by working consecutive 100 hour weeks, I suppose I can't really explain the feeling. Most of all, the work is just interesting. Or maybe I'm the devil.
Any link? I suspect that those cars had a negative average cost - taking into account fixed overhead, sales, general and administrative, depreciation, etc. The difference here is that they are earning negative variable margin. In my world, there's a constant joke when you come across a product line with a negative variable margin: people like to joke, "yeah, but you make it up volume." Here, people don't have the same sense of irony. Perhaps if we close our eyes and concentrate, we can wish it to be economically feasible.
of electric sheep?
I wonder how many /.ers could balance a simple checkbook if they had to.
My guess is that the company weighed the merits of continuing to exist against the issues of giving up control. They've lost over $250MM over the last few years and are probably still looking at a few years of losses ahead of them; that money has to come from somewhere. It might as well be public shareholders.
But why don't they just raise prices on mail? The amount of junk mail I get seems to indicate that the cost of mailing things to me is too low. I'd much rather get less mail, more reliably.
Indeed - long term investors should cheer market inefficiencies. No one forces me to buy an overvalued stock or sell an undervalued stock, and when prices are too low - that is a good thing for a buyer.
"Lagging" means that it is easily predicted by other variables - such as industrial production (see federal reserve website for all sorts of fun data). Industrial production is arguably the most important variable. Stock market tends to be correllated to it, and lead it by a month or two. The objective facts are that 1) the stock market is correllated with many things that will happen in the future and 2) unemployment ~1 year out is very easily predicted. If unemployment matters most, we should address policy using "leading indidicators" and "coincident indicators" (those that tend to predict unemployment) rather than addressing the lagging indicators. To do otherwise would be to drive using the rear view mirror.
...and just 10 years ago it was worth 14,000. The point is that the only valid way to value a company is based on its projected cash flows, discounted to the present. Reasons for changes in price include: changes in projected cash flows (looks like we are not heading for a great depression), low treasury interest rates and low expected inflation, and higher degree of risk tolerance. I must have missed the semester where you value a security based on what some idiot pays for it (actually I guess that is technically the price=value strong form market efficiency hypothesis, but no one actually buys into that).
You have much to learn.
Studies have shown that nearly all of people who contracted cancer had lived in a house within the past 5 years. I'm surprised there isnt more of an uproar.
I'm curious about whether the number of planets of the type that are detectable with current technology can provide us with estimates of total earth-like planets. For instance, if we know that we can only currently detect large mass planet orbiting quickly, and have found that X% of stars seem to have them, what does that imply for small rocky planets that are not close to their stars? As our technology improves and we expand the set of types of planets that we are able to observe, it seems like we should be able to refine our estimate of the fraction of stars that have earth-like planets.
Rhodes' "Making of the Atomic Bomb" has an excellent recap of the path the atomic physics took from discovery of atom to the atom bomb, with a strong focus on how the physical experiments were married to the theoretical. In fact, there are a number of examples of people uncovering results in physical experiments without realizing the implications. For instance, the Joliot-Curies ran experiments which demonstrated the existence of both the neutron and positron, without realizing it. Others came up with the theory, realized the Joliot-Curies misinterpreted their findings and achieved glory. Doesn't go too in-depth on some phenomena like the photoelectric effect, but I can highly recommend it for the path between the birth of quantum physics and the atomic bomb.
How does one get from, "I have not found a systematic flaw in the quality of Knuth et al.'s reasoning" to "Knuth Got it Wrong"?
From my experience, the answer is likely vietnam or cambodia. I have seen a few firms considering pulling out of china due to rising wages/price inflation, and they were all looking at these two countries.
If memory serves, 19th century England had an interesting anomaly, in that during some period overall life expectancy declined, while life expectancy improved both for city-dwellers and non-city dwellers. The reason the overall statistic declined was the flood of the people to the city (where life expectancies were lower) had the effect of lowering the average.
The damned thing is that sometimes it really is different. Compare bond yields and stock dividend yields pre- and post- 1950s, for a dramatic instance. Many called bubble, but were in time proven incorrect. Many (legendary) investors scoffed at the high prices being paid for the "technology" stocks like American Telephone and Telegraph, Radio Corporation of America and International Business Machines in the 1930s. Central banking _has_ evolved such that we are able to prevent depressions, which has important implications for asset prices. The challenge in financial markets is trying to tease out the permanent from the temporary. Finance is not always as simple as saying "prices have increased, ergo bubble. qed."
Having read the paper, this is more ridiculous than I initially suspected. Of the four assets that they identified as being "bubbles", all four increased in price since they made the prediction! The only way to ultimately determine if a bubble is a bubble and not a rational increase in prices is by the subsequent collapse. They try to hedge themselves by saying that it changed into "some other sort of regime", ie non-hyper-exponential growth. So if it is flat, or down, or up they are correct. The only instance they claim to be able to predict is that the asset will not increase hyperexponentially. And they even fail at this, in the price of cotton. Sadly, can claim some knowledge in the realm of finance.
What was the criteria for evaluating success? TFA says that the impressive result by anyone's standards is that they predicted a crash in gold, which then was roughly flat for the next six months... There is an entire industry of "quants" attempting to do things like this for banks and hedge funds. Of course, they do not publish their results. If you would like to see what a good classification of bubbles looks like, see: http://dealbook.blogs.nytimes.com/2010/01/27/schillers-list-how-to-diagnose-the-next-bubble/. Note also that identifying a bubble is not always sufficient to profit. Julian Robertson of Tiger Fund famously identified the tech bubble - in '97. He subsequently lost billions betting against tech stocks that stubbornly refused to crash until after he had given up.
IANAL, but couldn't each of these individuals file a discovery motion that would be easy to put together but a complete pain for the lawyers to comply with? Surely each individual could find a way to generate 10-20 hours worth of work for those attorneys, at ~$350 per hour? That approach might make it uneconomical to pursue this behavior.
My point is simply that TFA has doomsday scenarios that in older times people speculated would result from a complete loss of fuel (ie wood), and asks us to draw a comparison to oil. For the examples TFA gives (Easter Island is not one of them), all of the worrying came to naught thanks to technological progress. There are many examples of the harm caused by natural resource depletion, but this article fails utterly to mention them. Not saying it always works out, but it sure did for all the examples and fears (loss of fuel) given.