I don't believe in banning day trading, but let me take a stab at it:
A person is day trading iff he buys and then sells a stock or bond within a month, more than three times in a 12-month period. Since a long-term investor will rarely see a reason to "change course" so quickly three times in a year, this captures all people we'd consider day traders and only has a very small fraction of false positives on long-term investors.
Er, AC, when you start to time sectors and chase short-term returns like that, you're drifting away from index investing and into active management, defeating the purpose of an index fund. (ETF's are index funds that trade as regular stocks, for those who didn't know.)
Okay, but how do you know that printing the money puts you in 1) rather than 2)? And how do you know that not printing money would lead to 3)? Before you balk at the idea of a rigidly fixed money supply with increasing total wealth not increasing the value of a dollar, think about it this way:
If the number of gold dollars in existence becomes small relative to the instances of exchange, it becomes inconvenient to use it as money. (Think about what it would be like in the extreme case where, e.g., someone will ONLY accept rare baseball cards as payment.) That diminishes the network effect that makes something valuable as money, which in turn decreases the premium attaching to it due to its additional use as money. Thus, the money falls in value just the same relative to total wealth and people start trading in, e.g. tungsten.
So it's not obvious to me why you'd have the increasing wealth along with increasing dollar value (scenario 3).
I actually used to agree with all of that 100%, but over time, I've had to re-evaluate it based on new perspectives, so maybe you can help satisfy my concerns.
It's true that the Fed can print money without having extra assets to back it up, thus devaluing it. But as long as people *expect* this to happen, interest rates will be such that by holding your money in a money market account, it will grow and erase this effect, right?
And again, I'm not trying to justify government control of the money supply. I'm just saying: is what you're describing really one of the impacts of fiat currency?
The financial institutions (who you say will 'prop up' the dollar) always want more money pumped created so they can lend it out and make more money.
Well, I was saying the Fed, not financial institutions in general, does this. And it does it by having real assets to back the money. If its value falls farther than justified by the Fed's holdings, they can sell assets to restore its price. But the *expectation* that it will do this typcially suffices to prevent excessive inflation.
Moreover, I'm not sure financial institutions care one way or the other. They care about profit. Having more money to lend doesn't necessarily help them; keep in mind they have to pay more interest to depositors.
Finally, if the risk-free interest rate really does persistently stay below the "true" inflation rate, can't that be arbitraged away? Say, someone holds a basket of commodities that are "really" inflating instead of lending it out. That should keep the risk-free rate above inflation, yes yes?
I will agree with you that most of the "problems" with a gold standard are due more to stupid decisions people make while on a gold standard (fixed mortgages with no pre-payment option, anyone?), but I think you could say the same thing about fiat currency!
This article talks about "banks", which no real business should be touching as the are run by residents and are unofficial and unapproved.
Back in '03 when I played SL, I started an in-game "bank". I held people's money over the end of their week so that it looked like they were poor and the system would give them more in-game currency. (It always refills you up to a certain level.) I didn't pay interest, but at one point I considered doing it to build trust.
This is an important issue that's kept my attention. How do I know my dollar will keep any value? Why do people value dollars? I've spent a lot of time researching this question, and quite frankly, monetary theory will drive anyone insane because of the intricacies involved in thinking about money. There's no limit to the number of crank theories about money (social credit, Freigeld, bimetallism, gold bugs) that it's hard to even know if the Federal Reserve is not itself based on a shoddy theory.
You are correct in at least one respect: if you ask anyone why they accept dollars as payment, they answer is always: "because other people will take it as payment". But isn't this fundamentally a house of cards? ("I thought you were watching the kids." "But I thought you were watching the kids!") With no *separate* reason to value them, we're forever exposed to the risk of the value quickly evaporating (cf. hyperinflation).
However, based on what I've learned about the Fed, large financial institutions expect it to sell its assets for dollars if the dollar drops too low, in effect, propping it up that way. It's like this: let's say I get investors to give me 100 silver ounces and I issue them 100 notes redeemable for a silver ounce (ozAg). But then, let's assume I suspend convertibility on demand. Can the notes still have value? Yes, if people expect me to buy them back. Let's say on the market, merchants start demanding more than one note for an ozAg. Well, then I can dump my ozAg's on the market at the prevailing price. If the price of an ozAg on the market stubbornly refuses to return to exactly one note, then I can buy back all the notes, and keep the extra silver as a profit. And merchants won't let that happen.
So yes, it's possible for dollars to have value, even if they're "unbacked" like in the above, as long as people expect the central bank to do what's necessary to keep its value up. Once that stops... well, then we're screwed.
On the other hand, if you do your research, long term investing in well run businesses with good financials has far less risk and higher return than almost anything else you can do with your money.
Actually, that's about as wasteful as day trading. Don't bother figuring out which company is good or bad. Other people are already doing that in an attempt to appropriate value the stocks. It's not enough to know which businesses are good; you have to know which ones are good relative to the price their stock is selling for, which is a much, much, much more difficult problem.
The alternative? Buy an index fund. They simply track the relevant broad market (large cap, small cap, foreign, bond, whatever). They don't have to pay for research and they don't rely on a manager's hunches.
No, this isn't sarcasm. Anyone not trying to sell you on a manager's stock picking ability will tell you the exact same thing. Slate has a great series going on now detailing this: see here.
No, it doesn't. From what I've heard from the people in London, it's basically, "the roads are still clogged, but now we pay". If the roads are still congested, you didn't set the price high enough, i.e. "appropriate for peak hours" as I defined it in the journal entry.
The disingenuity is on the side of those who use the term "cause" sloppily. The study at most shows that sprawls causes one less required exercise during the day. One must further not fill that in with exercise, and one must eat a poor diet, to get the obesity. It's completely the wrong way to view this kind of "cause". It's like the scientists are saying:
"Yes, when there is a high degree of urban sprawlus, that causes the fat cells to be increasingly retained, which then contributes to lardus assus."
Why do people care about obesity studies? Well, some people like to use them to absolve the resposibility of the obese. When you come right out and say "urban sprawl causes obesity", well, you're inviting misinterpretation. Let's look at your example: when you say "cigarettes kill people", it's understood to mean the *consumption* of those cigarettes. But when you say urban sprawl causes obesity, is the meaning so clear?
Yeah, that sounds really market-driven, with none of that tedious regulation, government-run services, and invasive control over people's lives.
Yes, it does.
It contrasts with the usual government solution: tell people how much space they can use, when they can start building, what kinds of cars they can drive, who can provide bus transportation, how much of each plot they may develop, when they may use the roads, how much they can build along the outside of the city.
My proposal is just: "Here's how much the road costs to use. You decide if it's still worth it."
Market driven mass transit has been successful nowhere.
And market pricing of road use appropriate for peak hours has been tried nowhere. (I know, I know. "LA has $20 for tolls in..." Does the freeway traffic still stop? Okay, then the price wasn't high enough.)
Transport infrastucture is (or should be) a government problem.
In some places, it has to be. But it should certainly involve as much entrepreneurialism as possible. The infrastructure for e.g. a train will have to require government somewhere, for the simple reason that it will have to cross many properties. But discovering and pricing the appropriate depots and stops people are willing to use when traveling long distances within cities is certainly something markets should do. Once it's revealed that people have planned their lives based around point B to point E having a quick journey -- hey, now you know a good place for the train to go.
YES, not having to walk around very much will make it more likely you won't get the exercise necessary not to be fat.
NO, it does not "cause" it (in the sense they want you to take it); you can still make the choice to exercise on your own, irrespective of how much you need to walk in a day for other purposes.
YES, there's probably a correlation between "how much people in this city have to walk" and "how fat they generally are" that persists after the appropriate controls.
NO, that's a bad, ad-hoc reason to fix urban sprawl. Urban sprawl is bad because it leads to time-wasting congestion and forces people to have to use cars, which sucks for anyone who can't or doesn't like to drive, and exposes people to the risk of energy price fluctuations unnecessarily. It also contributes to pollution. There, I just made a strong case why sprawl is bad, without resorting to being a health Nazi.
I'd like to plug my latest joural entry, which describes a way cities could transition gradually to less sprawl, without tedious regulation, government-run services, and invasive control over people's lives. In short: put up tolls heavy enough to clear congestion. This creates the financial incentives necessary for market-driven mass transit, which in turn makes denser development more economical and desirable to live in.
Well, for the computer to be open source, you'd have to be able to access all the documents necessary to build all of its subcomponents. (And for the computer to be free as in speech, nothing in it could be patented.) The story shouldn't have called the computers open source, just the OS.... or non-OS.
I wasn't referring to the criminal side; I meant: they dont' investigate the unions' impact on education quality and cost, and report it to Congress or prosecutors, even though that would be a significant factor to consider.
I heard that for the initial launch of a product, the manufacturer bears part of the risk by promising to buy back some number of unsold units. Is there any truth to this at all? And if so, wouldn't a retailer exercise these options before taking a loss like that?
Oh, I almost forgot: here's my reaction to the story:
AI: Todd... Kid: Yes, ComputerKat? AI: Are you surfing a smutty web site? Purr..... Kid: Nooooooooooo... I'm just going to a site about the *pig* named Babe. AI: Hm... it *looks* like a smutty website. Kid: Come on, ComputerKat, give me a little credit. If I were going to a smutty website, I wouldn't go to one that *looked* like a smutty website. I'd go to one that I could pass off as being related to a kiddie movie! AI: Oh, okay... just checking. Purrrr..... Kid: *stupid AI...*
I'm also quite confused about all of this. How would an animal use a fixed-wing design, as a biplane does? The fixed wing design requires a continuous, strong airflow coming toward it in the horizontal direction. This is what creates the lift and allows the wing to keep it in the air. What's providing the forward motion that allows for air to flow that direction?
Re:Unfortunatly it is the only way to go.
on
MySpace Sues Spam King
·
· Score: 5, Interesting
Well, you know how it is... government agencies lose their effectiveness the moment they would be useful: the SEC won't pursue pump-and-dump spam, the military won't go after real terrorists, police won't enter a school to stop a shooter until it's "safe" (!), NASA won't let rich people fund space exploration in exchange for tiny favors, INS won't investigate H1-B circumvention, the Department of Education won't investigate teachers' union corruption...
No. Just like how you can have a ductile material that shatters at failure, or a fat that your body won't absorb AND won't mess up your digestive system, you can have an industructible material that quickly decays.
Yes, I understand you feel the need to show everyone how well-read you are, but this:
To imply that Rand "placed a low value on altruism" without noting the context in which she wrote is arguably to fall prey to the very doublespeak she and Orwell decried.
doesn't follow. It only "falls prey" to assuming people know what I'm talking about and that I chose not to rehash it in the interest of saving time. For whatever definition of "altruism" you want to use, my claim holds true as long as you carry the same meaning through.
If it makes you feel any better: "Gosh, you sure have a big dick."
I know this isn't XP/Vista, but Magic:the Gathering (the single player one that was released in 94 and 95, not the modern online one) worked in Windows 95 and Windows 98 but specfically refuses to work in XP:-(
So anyone who says it has full backwards compability is wrong.
Actually, the stuff in the iPhone was well-documented in radio waves, software, and sound encoding long before Apple. While credit should be delivered for implementing this scheme in a world of already-entrenched smartphones, it falls into the category of age-old telephony. This same scheme is used in the N-Gage -- a product at least 3 or 4 years old.
In a nutshell: cramming a bunch of functions onto one device.
Actually, I'm just implying that Ayn Rand, rightly or wrongly, placed a low value on altruism, and therefore, if propensity for altruism is reflected in something that appears in a brain scan, whatever the most striking difference between her brain scan and the average is the place where altruism would manifest. (And Rand's promotion of her philosophy was not necessarily itself altruistic.)
Slashdot Mirror
I don't believe in banning day trading, but let me take a stab at it:
A person is day trading iff he buys and then sells a stock or bond within a month, more than three times in a 12-month period. Since a long-term investor will rarely see a reason to "change course" so quickly three times in a year, this captures all people we'd consider day traders and only has a very small fraction of false positives on long-term investors.
Er, AC, when you start to time sectors and chase short-term returns like that, you're drifting away from index investing and into active management, defeating the purpose of an index fund. (ETF's are index funds that trade as regular stocks, for those who didn't know.)
Okay, but how do you know that printing the money puts you in 1) rather than 2)? And how do you know that not printing money would lead to 3)? Before you balk at the idea of a rigidly fixed money supply with increasing total wealth not increasing the value of a dollar, think about it this way:
If the number of gold dollars in existence becomes small relative to the instances of exchange, it becomes inconvenient to use it as money. (Think about what it would be like in the extreme case where, e.g., someone will ONLY accept rare baseball cards as payment.) That diminishes the network effect that makes something valuable as money, which in turn decreases the premium attaching to it due to its additional use as money. Thus, the money falls in value just the same relative to total wealth and people start trading in, e.g. tungsten.
So it's not obvious to me why you'd have the increasing wealth along with increasing dollar value (scenario 3).
I actually used to agree with all of that 100%, but over time, I've had to re-evaluate it based on new perspectives, so maybe you can help satisfy my concerns.
It's true that the Fed can print money without having extra assets to back it up, thus devaluing it. But as long as people *expect* this to happen, interest rates will be such that by holding your money in a money market account, it will grow and erase this effect, right?
And again, I'm not trying to justify government control of the money supply. I'm just saying: is what you're describing really one of the impacts of fiat currency?
The financial institutions (who you say will 'prop up' the dollar) always want more money pumped created so they can lend it out and make more money.
Well, I was saying the Fed, not financial institutions in general, does this. And it does it by having real assets to back the money. If its value falls farther than justified by the Fed's holdings, they can sell assets to restore its price. But the *expectation* that it will do this typcially suffices to prevent excessive inflation.
Moreover, I'm not sure financial institutions care one way or the other. They care about profit. Having more money to lend doesn't necessarily help them; keep in mind they have to pay more interest to depositors.
Finally, if the risk-free interest rate really does persistently stay below the "true" inflation rate, can't that be arbitraged away? Say, someone holds a basket of commodities that are "really" inflating instead of lending it out. That should keep the risk-free rate above inflation, yes yes?
I will agree with you that most of the "problems" with a gold standard are due more to stupid decisions people make while on a gold standard (fixed mortgages with no pre-payment option, anyone?), but I think you could say the same thing about fiat currency!
This article talks about "banks", which no real business should be touching as the are run by residents and are unofficial and unapproved.
Back in '03 when I played SL, I started an in-game "bank". I held people's money over the end of their week so that it looked like they were poor and the system would give them more in-game currency. (It always refills you up to a certain level.) I didn't pay interest, but at one point I considered doing it to build trust.
This is an important issue that's kept my attention. How do I know my dollar will keep any value? Why do people value dollars? I've spent a lot of time researching this question, and quite frankly, monetary theory will drive anyone insane because of the intricacies involved in thinking about money. There's no limit to the number of crank theories about money (social credit, Freigeld, bimetallism, gold bugs) that it's hard to even know if the Federal Reserve is not itself based on a shoddy theory.
... well, then we're screwed.
You are correct in at least one respect: if you ask anyone why they accept dollars as payment, they answer is always: "because other people will take it as payment". But isn't this fundamentally a house of cards? ("I thought you were watching the kids." "But I thought you were watching the kids!") With no *separate* reason to value them, we're forever exposed to the risk of the value quickly evaporating (cf. hyperinflation).
However, based on what I've learned about the Fed, large financial institutions expect it to sell its assets for dollars if the dollar drops too low, in effect, propping it up that way. It's like this: let's say I get investors to give me 100 silver ounces and I issue them 100 notes redeemable for a silver ounce (ozAg). But then, let's assume I suspend convertibility on demand. Can the notes still have value? Yes, if people expect me to buy them back. Let's say on the market, merchants start demanding more than one note for an ozAg. Well, then I can dump my ozAg's on the market at the prevailing price. If the price of an ozAg on the market stubbornly refuses to return to exactly one note, then I can buy back all the notes, and keep the extra silver as a profit. And merchants won't let that happen.
So yes, it's possible for dollars to have value, even if they're "unbacked" like in the above, as long as people expect the central bank to do what's necessary to keep its value up. Once that stops
On the other hand, if you do your research, long term investing in well run businesses with good financials has far less risk and higher return than almost anything else you can do with your money.
Actually, that's about as wasteful as day trading. Don't bother figuring out which company is good or bad. Other people are already doing that in an attempt to appropriate value the stocks. It's not enough to know which businesses are good; you have to know which ones are good relative to the price their stock is selling for, which is a much, much, much more difficult problem.
The alternative? Buy an index fund. They simply track the relevant broad market (large cap, small cap, foreign, bond, whatever). They don't have to pay for research and they don't rely on a manager's hunches.
No, this isn't sarcasm. Anyone not trying to sell you on a manager's stock picking ability will tell you the exact same thing. Slate has a great series going on now detailing this: see here.
No, it doesn't. From what I've heard from the people in London, it's basically, "the roads are still clogged, but now we pay". If the roads are still congested, you didn't set the price high enough, i.e. "appropriate for peak hours" as I defined it in the journal entry.
The disingenuity is on the side of those who use the term "cause" sloppily. The study at most shows that sprawls causes one less required exercise during the day. One must further not fill that in with exercise, and one must eat a poor diet, to get the obesity. It's completely the wrong way to view this kind of "cause". It's like the scientists are saying:
"Yes, when there is a high degree of urban sprawlus, that causes the fat cells to be increasingly retained, which then contributes to lardus assus."
Why do people care about obesity studies? Well, some people like to use them to absolve the resposibility of the obese. When you come right out and say "urban sprawl causes obesity", well, you're inviting misinterpretation. Let's look at your example: when you say "cigarettes kill people", it's understood to mean the *consumption* of those cigarettes. But when you say urban sprawl causes obesity, is the meaning so clear?
Yeah, that sounds really market-driven, with none of that tedious regulation, government-run services, and invasive control over people's lives.
Yes, it does.
It contrasts with the usual government solution: tell people how much space they can use, when they can start building, what kinds of cars they can drive, who can provide bus transportation, how much of each plot they may develop, when they may use the roads, how much they can build along the outside of the city.
My proposal is just: "Here's how much the road costs to use. You decide if it's still worth it."
Market driven mass transit has been successful nowhere.
..." Does the freeway traffic still stop? Okay, then the price wasn't high enough.)
And market pricing of road use appropriate for peak hours has been tried nowhere. (I know, I know. "LA has $20 for tolls in
Transport infrastucture is (or should be) a government problem.
In some places, it has to be. But it should certainly involve as much entrepreneurialism as possible. The infrastructure for e.g. a train will have to require government somewhere, for the simple reason that it will have to cross many properties. But discovering and pricing the appropriate depots and stops people are willing to use when traveling long distances within cities is certainly something markets should do. Once it's revealed that people have planned their lives based around point B to point E having a quick journey -- hey, now you know a good place for the train to go.
Let me try to sort this out:
YES, not having to walk around very much will make it more likely you won't get the exercise necessary not to be fat.
NO, it does not "cause" it (in the sense they want you to take it); you can still make the choice to exercise on your own, irrespective of how much you need to walk in a day for other purposes.
YES, there's probably a correlation between "how much people in this city have to walk" and "how fat they generally are" that persists after the appropriate controls.
NO, that's a bad, ad-hoc reason to fix urban sprawl. Urban sprawl is bad because it leads to time-wasting congestion and forces people to have to use cars, which sucks for anyone who can't or doesn't like to drive, and exposes people to the risk of energy price fluctuations unnecessarily. It also contributes to pollution. There, I just made a strong case why sprawl is bad, without resorting to being a health Nazi.
I'd like to plug my latest joural entry, which describes a way cities could transition gradually to less sprawl, without tedious regulation, government-run services, and invasive control over people's lives. In short: put up tolls heavy enough to clear congestion. This creates the financial incentives necessary for market-driven mass transit, which in turn makes denser development more economical and desirable to live in.
Well, for the computer to be open source, you'd have to be able to access all the documents necessary to build all of its subcomponents. (And for the computer to be free as in speech, nothing in it could be patented.) The story shouldn't have called the computers open source, just the OS. ... or non-OS.
I wasn't referring to the criminal side; I meant: they dont' investigate the unions' impact on education quality and cost, and report it to Congress or prosecutors, even though that would be a significant factor to consider.
I heard that for the initial launch of a product, the manufacturer bears part of the risk by promising to buy back some number of unsold units. Is there any truth to this at all? And if so, wouldn't a retailer exercise these options before taking a loss like that?
Oh, I almost forgot: here's my reaction to the story:
HAHAHAHAHAHAHAHAHAHAHAHA! oh man.... HAHAHAAHAHAHAAHAHAHAAH!!!! ahh....
(See also: Rush Limbaugh drug arrest.)
AI: Todd ... ... it *looks* like a smutty website. ... just checking. Purrrr.....
Kid: Yes, ComputerKat?
AI: Are you surfing a smutty web site? Purr.....
Kid: Nooooooooooo... I'm just going to a site about the *pig* named Babe.
AI: Hm
Kid: Come on, ComputerKat, give me a little credit. If I were going to a smutty website, I wouldn't go to one that *looked* like a smutty website. I'd go to one that I could pass off as being related to a kiddie movie!
AI: Oh, okay
Kid: *stupid AI...*
(courtesy South Park ladder-to-heaven episode)
I'm also quite confused about all of this. How would an animal use a fixed-wing design, as a biplane does? The fixed wing design requires a continuous, strong airflow coming toward it in the horizontal direction. This is what creates the lift and allows the wing to keep it in the air. What's providing the forward motion that allows for air to flow that direction?
Well, you know how it is... government agencies lose their effectiveness the moment they would be useful: the SEC won't pursue pump-and-dump spam, the military won't go after real terrorists, police won't enter a school to stop a shooter until it's "safe" (!), NASA won't let rich people fund space exploration in exchange for tiny favors, INS won't investigate H1-B circumvention, the Department of Education won't investigate teachers' union corruption ...
did I miss anything?
To the people who modded this post down: please make sure your satirometer is turned on, properly calibrated, and set on "high sensitivity".
No. Just like how you can have a ductile material that shatters at failure, or a fat that your body won't absorb AND won't mess up your digestive system, you can have an industructible material that quickly decays.
doesn't follow. It only "falls prey" to assuming people know what I'm talking about and that I chose not to rehash it in the interest of saving time. For whatever definition of "altruism" you want to use, my claim holds true as long as you carry the same meaning through.
If it makes you feel any better: "Gosh, you sure have a big dick."
I know this isn't XP/Vista, but Magic:the Gathering (the single player one that was released in 94 and 95, not the modern online one) worked in Windows 95 and Windows 98 but specfically refuses to work in XP :-(
So anyone who says it has full backwards compability is wrong.
That observation triggered the holocaust denial reflex big time... The only way to get more incoherent hate mail is to criticise Apple.
Oh really? Have you ever tried criticizing Ubuntu?
Actually, the stuff in the iPhone was well-documented in radio waves, software, and sound encoding long before Apple. While credit should be delivered for implementing this scheme in a world of already-entrenched smartphones, it falls into the category of age-old telephony. This same scheme is used in the N-Gage -- a product at least 3 or 4 years old.
In a nutshell: cramming a bunch of functions onto one device.
Actually, I'm just implying that Ayn Rand, rightly or wrongly, placed a low value on altruism, and therefore, if propensity for altruism is reflected in something that appears in a brain scan, whatever the most striking difference between her brain scan and the average is the place where altruism would manifest. (And Rand's promotion of her philosophy was not necessarily itself altruistic.)
Would you agree with that?