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So the money managers heard \"Blah blah blah formula to make big bucks blah blah blah no blah risk blah blah simple blah blah suitable\"?
It's amazing what can be accomplished with selective hearing.
2 replies
So the money managers heard \"Blah blah blah formula to make big bucks blah blah blah no blah risk blah blah simple blah blah suitable\"?
It's amazing what can be accomplished with selective hearing.
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It's a good article, I find it interesting that Li now works in Beijing and he's not talking. But really, people saw something that looked good and, without fully understanding it, put it in place. Humanity is like that.
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@Islandkiwi: It reminds me exactly of something I was reading recently, about a 1990s superfund case in Ohio & other midwestern states. 6,000 homes were contaminated because an unlicensed exterminator thought it would be good business to spray inside residences & schools with an agricultural insecticide. On the face of it, a good idea since it's an incredibly potent pesticide, so you get rid of roaches. But it's actually a TERRIBLE idea since the chemical is designed to break down in sunlight, to decontaminate the area so workers can return. Indoors, it never degraded and there were health problems, 2 deaths, and $65 million spent for clean-up.
That's why there are regulations on these kinds of things - pesticides and financial systems. Regulations are supposed to stop things like this from happening - so that our shortcuts, faulty reasoning, or desire to ignore (or be ignorant of) potential downsides don't have catestrophic effects. There should have been more oversight on how the banks were applying the formulas and an aknowledgement of its weaknesses.
(for more on the story of methyl parathion - [www.ehponline.org])
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@oneandone: But. But. But. Companies will regulate themselves thru the magic of the marketplace. (pay no attention to the rotting child-corpses, kiddies!)
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ah GWB loving trolls. How quaint. Is it 2004? Did I step in a time machine? What color is the sky in your reality? Fail.
@GuinevereRucker: Heh (I think).
umm dreamsneverend: did you notice the trolling was based around a single party. No- well go look, I will wait. [taps foot] Ok, you're back. Feel a bit silly? That's ok, now you know- and knowing is half the battle!
@dreamsneverend: It's rather childish to petulantly blame ALL politicians for the sins of a subset. Unless you're on an island, you DO need a government, led by the critters.
Although, it does nicely dovetail with the Conservative, \"All gov't is evil\" mantra. Oh, I guess that's the \"childish\" part. :)
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@Trai_Dep: Get your philosophies straight. Libertarians and anarchists believe all government is evil. Conservatives understand the need for government, but think it should be kept to a minimum, as also desired by the founders of our country.
@Cattivella: Actually, I've found a pretty good way to state simply some of the fundamental differences between Democrats, Republicans, and Libertarians based on their attitudes toward economic issues (health care, free market, anything dealing with money) and social issues (abortion, crime, homosexuality, morals, etc).
Republicans tend to have a \"free\" attitude towards economic issues (Free market, deregulation, privatize everthing) and a \"controlling\" attitude towards social ones (homosexuality is a sin, marriage is defined as between only a man and a woman, abortion is wrong because the Bible said so, etc)
The Republican mentality can be thought of as believing that the government should play the role of a \"stern father\" for society.
Democrats are the exact opposite, having a \"controlling\" attitude towards the economy and a \"free\" attitude about society.
Democrats believe that government should be like a \"nurturing mother\".
Libertarians take \"free\" attitudes to both economic and social issues. Libertarians don't usually think that all government is \"evil\" but that its interference in society should be kept to an absolute minimum. Anarchy is just an extreme for of Libertarianism.
There was also a 4th ideology mentioned, I think it was called either Populism or Progressive (leaning towards the former). This ideology takes a \"controlling\" stance on economic and social issues. Communism is the extreme form of this ideology.
I describe myself as a Democrat with Libertarian leanings. I don't much like this \"stimulus\".
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@Cattivella: How convenient that all 'Conservative' presidents since Nixon have expanded government.
The truth is that politicians on both sides of the aisle are to blame. It's important to identify the real causes and apply them to those who are guilty for them.
@zark169: True, it's smoke and mirrors to focus too much on parties. The Free Market Jihadists, however, can take several steps forward and take their bow.
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The banks are to blame. They are the ones in control. The Fed Reserve is purposely pumping more fake money into the system and driving down the dollar. They are creating trillions of dollars creating a debt that is owed by future generations and keeping all the profits. We bail them out, they charge it to our kids and unborn kids, grandkids and they get rich as the dollar falls to near zero. Then after everyone goes of of business they buy up all the businesses and banks for pennies on the dollar. This BS math formula was created by those who are ruining our country on purpose.. it's smoke and mirrors!
@zark169: Sorry for the double post but my point above applies here as well:
I'm not convinced the politicians from any party can be blamed or praised for the economy, they are just puppets that sing and dance to distract us from the people holding their strings and making each other rich.
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@jscott73: Exactly. The banks used some dumb formula thinking it would bring them riches beyond the riches they already had. This is politicians fault how?
Oh wait, when the banks got a free pass and free money sent with love care of our politicians after the banks decided to blow it all on the roulette table with their \"system\".
Wait, wait, wait, wait... You mean a small formula that a child could calculate (if he were given the variables) couldn't be used to manage the trillions of dollars that make up the worldwide economy without some kind of mass implosion that sends once great institutions to the abyss and hundreds of thousands (maybe even millions when this is all said and done) of people to the unemployment line?!
Whoduhthunkit?
@Jason Schalz: @zark169: It's easy to criticize them now, but this is obviously an oversimplification. Chris apparently left out steps 2 and 3, \"???\" and \"Profit!\", respectively. How could any banker argue against that?
@Tiber: I think the sad part is this was probably their steps:
1) Throw money at equation
2) ??? (equation works its magic)
3) Profit!!!
@Jason Schalz: It makes me sad that these financial 'wizards' don't have the mathematical knowhow to recognize that.
...
re my own post:
I think I just got my answer. I can't believe you all fell for this.
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@SitDownNancy_GitEmSteveDave: lol, do you really think the market is that correlated to political speeches?
@johnva: Yes. Brokers are worse than fishermen when it comes to \"funny feelings\". They get worried, and it affects the entire market.
@HeartBurnKid, creepy morbid freak The day Bush took office, the market rose, not dropped like it did w/Barack. When he was elected again, the market rose. It did drop before he was sworn in again, but that day, it started a 600 point upswing.
@Snarkysnake: It also went from 7,000 up to 14,000 while he was in office. True, it has no religion, and possibly no politics, but as you pointed out, it's about $$$. So if this is such great news, why aren't they rejoicing? Why are people on the floor of the markets willing to have another \"tea party\" b/c of this new economic plan? I hate to say it, but if you look at the graph, and how it so quickly drops, it almost looks like the markets had an idea Barack would win, and got scared. Then he gets elected and they settle down some, but as soon as what he plans to do surfaces/gets announced, the markets drop like crazy in an almost fear like fashion.
@johnva: Yes, it is. Over the past few decades the stock market, and by extension the economy in general, have become entirely based on psychology. Brokers scared of something? The NYSE goes down 100 points. Brokers told they're getting free money wrapped in fried bacon? Up 100 points.
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@johnva: in an economy driven by 70% consumption, consumer confidence really is everything. if you're a journalist, you might want to rethink the next time you describe the crisis as 'the greatest depression.'
It seems like the problem was the idiot bankers' misuse of the formula to achieve their greedy ends, not the formula itself, that caused the problem.
@johnva: Good point. The academics were pointing out to whoever would listen the limitations of their model. But between greed (Wall Street) and blind ideology (Washington), these cries were ignored.
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@johnva: Actually the article says that it was the historical default correlations that the formula used that was flawed, because it used only a decade's worth of data- and that decade happened to be a boom time.
@Mad Dog McCree: Yes, but the bankers' whole job was to realize things like that. They were applying it improperly.
@Mad Dog McCree: because of deregulation? I mean, weren't there a few actions by Clinton, Bush 2 and possibly others that allowed the sort of environment where CDO's held so much sway?
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3X2(9YZ)4A
X = mass of bank CEO cock
Y = volume of bank customer anus
Z = speed of penetration
A = force applied to anus
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@FuryOfFirestorm: That reminds me. Have there been any economy-themed cheesy pornos yet? I don't like porn, but I'd watch for the social commentary.
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\"Li's approach made no allowance for unpredictability: It assumed that correlation was a constant rather than something mercurial.\"
\"Banks dismissed them, partly because the managers empowered to apply the brakes didn't understand the arguments between various arms of the quant universe.\"
Classic example of GIGO: Garbage In, Garbage Out. They thought that they were so smart that they didn't think the worst (unpredictability) could happen, so they neglected to account for it in their calculations. What would you think would happen if an aircraft design engineer or a meteorologist worked that way?
Then the worst happened.
Moral: Thou shalt not use tools thou does not understand, lest they rise up and smite thee.
@Urgleglurk: I wonder if those managers didn't understand because they were from the traditional banks that now could dabble in the stock market due to deregulation...
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@Urgleglurk: Nobody expects unpredictability!@#
Its chief weapon is surprise... surprise and fear! Its TWO chief weapons are surprise, and fear... and massive third-quarter losses.
To a certain degree, blaming this equation for the economic problems we are experiencing today is like citing the detonation of stored munitions the weapons magazine aboard the USS Arizona as the reason it sank. Yes, it's true, but is highly deceptive absent any mention of why they detonated.
This article is akin to this:
12-07-1941: The USS Arizona sank to the bottom of Pearl Harbor today after high explosives on board detonated, blasting a hole in the ship and killing hundreds of sailors instantly, and dooming hundreds more to drowning despite furious attempts at rescue by navy divers.
Experts contacted by Wired are calling for an investigation into the methods of storing munitions, appropriate handling procedures, thickness of deck armor, and ensuring sufficient buoyancy to prevent this sort of disaster in the future.
The article above alludes to this problem, \"And then the housing market imploded\". The deck armor was intact, and then an air dropped anti-ship weapon smacked into it...
@bloatboy: Ingenious and amusing analogy. Bravo!
Although, for a better fit, it would have had to have turned out that the Arizona was fitted with a large funnel leading to its munitions stores, painted with a target, with an insulting caricature of Tojo raping Emperor Hirohito painted on the deck. And placed in the Bay of Tokyo. By US admirals confident that, since Japan had never attacked the US ever, it was literally impossible to happen now.
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@HIV 2 Elway Resurrected: Thing is, when the sink is draining and almost out of water, and you dump a buckets worth in, it stays for a bit, and the water level is higher. Give it a couple of minutes, and it's gone. I like that he is focusing on restoring confidence, but I think if we're going to spend the money that could rebuild the entire continent of Africa, we should think about it longer than a week.
Don't even get me started on how this whole crisis reminds me of African politics. The only difference is that our sinks have running water when you need it, in more ways than one.
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It's ironic that Li now lives in China and Hillary was just there kissing their asses so that they will fund this current \"stimulus\" (and every \"stimulus\" to follow [Reid wants a high-speed rail to Orlando, FL next]).
The key part of the article for me is that they really couldn't model how these \"assets\" (CDO's etc.) would behave if housing prices went down because they hadn't gone down during the 10 year period from which they pulled the financial data that created the model. They bet trillions using an equation that was built using 10 years of sampling data and which, by definition, assumed that realestate prices never went down.
Brilliant.
This is just further support for my general theory that this was all caused by people who figured that they had figured out how to remove risk from the equation. Once that happened, it didn't matter who you gave a loan to, how much you gave them, or on what shitty terms. And hey, why not leverage your bank up to 40:1 and make even more money? It's risk free, after all.
Idiots.
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I seem to recall a guy who won the Nobel Prize for the The Black-Scholes equation running a company that lost billions using his equation. There are too many variables people.
@pschroeter: That was Long Term Capital Management.
The core problem with their strategy is that their models only took a ten-year retroactive look, since otherwise their model delivered \"odd\" results.
Sigh.
The more things change...
@Trai_Dep: Oh, you mean the \"grown-ups\" who don't take any responsibility for their part in the mess we're in? Because, last I checked, refusing to take responsibility for your actions and blaming everything on someone else is pretty childish and sounds just like my friend's toddler and Frank/Dodd/Pelosi/et.al.?
Or maybe the \"grown-ups\" who want something to be done NOW, NOW, NOW without sitting down to even read through an entire gigantic bill to understand what's in it or the consequences of what's in it? Because that reminds me of an immature child who wants what they want now, damn the consequences (and every person who voted for the \"stimulus bill\" that needed to be passed so quickly there was no time for proper review, much less the 48 hours promised by Pelosi, despite a good chunk of its provisions not taking effect until 2010 or later).
Or maybe you mean the \"grown-ups\" who have basically said \"we won, get over it, shut up and sit down, we don't need or want your input\" while claiming a desire for renewed bipartisanship?
Those \"grown-ups\"? Because I fail to see how they're anything more than spoiled children playing a game of dress up.
@Cattivella, HIV 2 Elway Resurrected: The sad thing is, Americans are truly suffering - as is our nation - while you're parsing with an electron microscope to try splitting the blame for this.
The Free Market Fundamentalists started this fiasco, and it was a long-running, twenty-year campaign that reached its fruition last year. The names change, but fundamentally, taken as a whole, it's the core underpinning of the Republican platform.
Now that your policy of using jet fuel to clean kindergartens resulted in massive, juvenile fatalities, it's unseemly to mention that one of the truck drivers delivering the fuel was a union driver or voted Democrat.
Take a bow boys, and stoke up the BBQ: there's a LOT of tender delicious meat for you to finish!
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@Trai_Dep: I understand that American's are suffering but unlike our current administration, I'd like to see them get help. Unfortunately for all of us, the recent stimulus plan will do nothing.
@HIV 2 Elway Resurrected: Other than damage the upper and middle class, of course. And take us closer to Obama the Magnificent's goal of socialism.
@HIV 2 Elway Resurrected: Exactly. His spending isn't meant to fix the economy, it's meant to shift it to socialism.
@deleteboy: Insane taxes + no war + boom times = reduction in debt.
@Ubik2501: Because anything against Bush was applauded, anything against Obama the magnificent is partisan. NOTE: I do think Bush was horrible, but Obama so far is worse. BS policies, no experience, bad cabinet picks, Socialist agenda plain as day, etc...
@Trai_Dep: Yes, because a true economic stimulus abuses the shit out of business owners and those with any money to give it to the poor who won't invest it, just spend it off creating minor growth for a short period rather than sustained, long term growth like we saw when the approach of tax breaks for the people who are likely to invest pulled us out of the last recession, back in the early 2000s, which the type of thinking we have now did nothing to stop. The way to defibrillate an economy is not to shock it on the thumb...
@lonestarbl: Obama is the path to make this worse, from what I've seen of his policies. Who controlled congress for the years this collapse went down? And this crisis has been in the pipes since Regan's administration, both parties are to blame. The dam just broke under the second worst president we've ever had, Bush. The worst, from what I can tell, will be PresB.O.
@zark169: Yeah, that was was a bad call, but we're kind of stuck in that now... And in any case, we're on the way out of it, thanks to the troop surge.
@zark169: Which year, the start was most likely a decent bit pricier, just because of having to invade and establish bases.
@Trai_Dep: And now that that ideology has had it's inevitable problems, which happen and then recover, we've switch to the other end of the spectrum that will make the problem worse.
@johnva: It kind of is...investor confidence and all that jazz...
@Snarkysnake: And while the Democrats controlled the Congress...
@picardia: Deregulated markets have high highs and low lows. Also, Clinton(D) had en economic disaster right as he left office, it just wasn't as deep. The Democrats controlled Congress when this all went to hell in a handbasket, they still do as it keeps on that track.
@HIV 2 Elway Resurrected: THIS.
@SacraBos: Obama means somewhat well, though he hasn't the first idea of how to get us there. Bush meant well, and he wasn't ready to do it, either. He just didn't take hasty action that fucked it up 10x worse, other than the bailout packages that I could go on about at length...
@Faust: Stereotypes the Democrat...
@Faust: Tax cuts let the people with money and financial knowledge invest their money.
@Con Seannery tells the Facebook haters to badge up!: I wasn't decrying anybody for criticizing Obama - I'm doing plenty of that myself these days. I'm pissed off because people are doing it in such a bullshit, slapdash, ad hominem fashion (like your smarmy \"Obama the Magnificent\" bullshit). Why is it impossible for you people to make an intelligent comment without cutting it off at the knees with childish comments like \"Obama the Magnificent,\" \"rethuglicans,\" and the rest?
I see all this talk about politicians being \"grown-ups,\" how about the rest of us give it a shot as well?
@Ubik2501: I just pull that Obama the Magnificent bullshit to piss off the blind supporters, as well as show the view many have of him, as an inerrant being created by the hands of God and sent to earth in a burst of heavenly light.
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@HIV 2 Elway Resurrected: Heh, I'm thinking that unless you're from the future and you can prove this - this will have to be a 'get in action and see' kind thing, there HIV.
As you prove here - it's easy to 'arm chair' the whole Obama Recovery Plan... what's that? O 'Recovery Plan' - it means recovery from the last 8 years. Y'see, when President Clinton has left office in 2000, they'd turned off the 'counting up debt clock' in Times Square. Contrast that, pls, with in 2008 on W.'s exit, they had to add 2 or 3 more digits. To acount. For the extra trillions. Of debt. That we're now recovering from.
Now would you be so kind as to enlighten us with an equation for that?
@deleteboy: When Clinton left office, who held a majority in Congress? When Bush left office, who held a majority in Congress? Obama's gross incompetence is going to lead to the biggest GOP revival any of us have ever seen. Luckily for all of us, last time we had a GOP controlled Congress and a Dem in the White House we had a balanced budget.
@HIV 2 Elway Resurrected + almost everybody else in this thread: And here's the attitude and partisan bitching that ruined America!
You all need to go to your corners until you can carry on a conversation without hysterically pointing fingers, parroting oversimplified catchphrases or demonizing people who disagree with you. You're part of the problem, not the solution. God, I am fucking SICK of the state of politics today.
@Ubik2501: Heart click for you.
I am impressed that we got through the thread without somebody dropping \"mouth-breather,\" my least favorite insult ever.
obligatory comment: well when a black man gets elected president, you have to expect one hell of a bbq.
@HIV 2 Elway Resurrected: Keep yapping. None of us are going to forget which party (REPUBLICANS) and which theory (DEREGULATION) got us into this mess. I'm sick and tired of right-wing whining about this, which would be funny if it wasn't PEOPLE LIKE YOU TO BLAME.
@picardia: What is this deregulation you speak of? There have been more banking regulations passed since 1980 than in the rest of the history of the United States.
@HIV 2 Elway Resurrected: I like how rethuglicans find it so easy to ignore their mantra of, \"if you're not with the president, you're against America,\" now.
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@CMU_Bueller: Pot, meet Kettle. I mean that both ways, since I've many Democrats that went into apoplectic fits talking about Bush. Now, if anyone even disagrees with Obama, they bring this quote out. Don't like it when the shoe is on the other foot, do we.
In any case, I'm not against Obama. He is a very good orator, and I don't think he's intrinsically evil. He just has never really done anything in State or Federal office that's especially noteworthy, never run a business, or ever governed at any level of government.
I do think the \"stimulus\" is ineffective, since it was packaged, voted on, House/Senate merged, voted on again, and signed without anyone in DC reading the whole bill - and in far too much of a panicked rush.
And the #1 reason why I know the bill is not going to be especially effective - they are already crafting additional stimulus bills/bailouts to help out the economy. #2 is that some of the items in the bill won't be effective until 2010 - so if such a rush was needed, why wait?
As for the Noah reference, he was given instructions. And the road to hell is paved with good intentions.
@SacraBos: The most awesome thing? In 3 years, when the economy is humming along and things are back on track, all the little \"rethuglican's\" are going to be pointing and saying - no, Bush and the GOP congress set this up! Or my favorite - it's due the tax cuts! Just like the economic conditions under Clinton were set up by Bush 1, and the downturn we have now is because of what Clinton did in '98...
Cuz tax cuts are ALWAYS the answer. I bet we could cure cancer with a tax cut. Probably not AIDS though. You know why....
@Faust:
You know what? You are 100% correct. In fact, when the Economy is humming along in three years, we will all agree on one reason for how it was fixed
Obama touched it.
And we all know why tax cuts can't cure AIDS, because only Obama's tears can do that.
You see what I did there? Did you see that? Yep, that just happened.
@CMU_Bueller: Just how democrats now ignore their \"Dissent is patriotic\" mantra? Please, this can go both ways and labeling republicans \"rethuglicans\" takes away your credibility and makes it doubtful that you could carry on an informed and civil conversation on the topic at hand.
@Cattivella: Ha, \"informed and civil\"? With a Republican. No, that hasn't been possible in about 15 years. They are neither.
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@Oranges w/ Cheese: While it's a lot, the cost of the wars (Iraq & Afghansitan) since 2002 is less than that of this single stimulus package put forward.
@Oranges w/ Cheese: It might have changed, but I remember hearing that even after one year in Iraq the war was costing approximately 100B/year.
(admittedly the article I read may have been exagerating, but from what I know it seems fairly accurate)
@HIV 2 Elway Resurrected: I love how people are trying to blame Obama for this...
Obama is your hope in this matter, the republicans with their heads so far up their asses counting $$$ and crusading against \"terrorists\" were the straw that broke the camels back. Not to mention how conveneintly everything fell apart just in time for it to be handed off without making one ounce of effort in attempting to create a solution.
True the new \"stimulus\" has plenty of ridiculous factors to it, but it is at least something.
Everyone laughed at Noah when he was building an ark... (And I'm not even a heavily religious person...)
@lonestarbl: Not to mention how conveneintly everything fell apart just in time for it to be handed off without making one ounce of effort in attempting to create a solution.
Couldn't you say the same thing of the falling economy that was handed to Bush in 2000? People seem to forget that the dotcom bubble was bursting/deflating at the end of Clinton, and Bush inherited it.
I really don't care who's in charge as long as it turns around. But I notice that the highest market we had in the past four months was 11/4/08, and it dropped from there. It also seems that whenever Barack talks, the market drops. Yesterday the market rose over 250 points. Barack talked, and it's currently down over 75 points.
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\"I notice that the highest market we had in the past four months was 11/4/08, and it dropped from there. It also seems that whenever Barack talks, the market drops@
Wait a minute. If we're going to play that game,I'll point out that the DJIA went from 14,000 to about 8,000 while GWB was in office.
The stock market has no political party. It has no religion. It has no patriotism. It is about $$$ first,last and always.
@Snarkysnake: You're wrong. I've done analysis that, while controlling for everything else, isolate significant political events. Markets responded favorably to Bush's election and reelection while responding unfavorably to the Dem's gaining control of the House in 2006. They're called event studies, a basic financial tool. I'd be happy to share the report with anyone who suffers from insomnia.
\"I've done analysis that, while controlling for everything else, isolate significant political events. Markets responded favorably to Bush's election and reelection while responding unfavorably to the Dem's gaining control of the House in 2006. They're called event studies, a basic financial tool. I'd be happy to share the report with anyone who suffers from insomnia.\"
This is the dumbest thing I've ever read on this website (and the competition is ungodly).
You're just about one step away from saying that God is a Republican.There are any number of resons that markets go up (or down) but mostly,it has to do with business fundamentals.Investors assume that whoever is in the oval office is an idiot (R) or (D) .
Markets have no party. Their religion is money.
Sweet Jesus ,can people be this stupid ?
@Snarkysnake:
statistically supported argument does not equal esoteric argument about deity
instead of weakly attempting character assassinations, you could ask for the report, compare it with known data, research it, then point out his and its flaws.
markets have no specific party and aren't driven purely by money. there is a lot more psychology involved
@Snarkysnake: You can statistically control for other variables to isolate events. I control for the overall temperature of the markets. I can calculate a stock, group or stocks, alpha and beta and use that to predict its response to the overall market. Knowing that I can look back at the abnormal returns surrounding an event. For the events I mentioned, yes, the markets settled back to normal after around 30 days but there was an undeniable response, either favorable or unfavorable, to political events. Send me your email address through my profile page, I'll send you the report which also explains the methodology in great detail. You can use the same methodology to see share price response to things like recalls or other public announcements. Dr Steven Pruitt used it extensively to quantitatively show the positive correlation between corporation's share price and announcement of NASCAR sponsorship. But what do I know? I'm that stupid.
No.No. NO!
You found a conclusion that you wanted to find and then found the data that would \"prove\" that conclusion and lied to yourself that you found the cause (One Mr. \"Barack Obama\") and are trying to pass this off as scholarly work. I call bullshit and more bullshit,metaphysical bullshit .I base THIS conclusion on the fact that you are not one of the world's wealtiest men,thus having plenty of time to spread nonsense in places like here.If this system really had any basis in fact,you would not even mention it's existence,much less describe it here.
Run this through the RNC and see what they think: I am an investor. Have been since I was old enough to save money from my two jobs. I don't give a purple shit who's in the White House,Congress or the Illuminati. I just want to put my money to work and earn a decent (sustainable) return so that I can have a better life than my parents,grandparents etc,and have some to leave to my kids as well as do some good in my community, free of red tape (I am currently raising and donating for a badly needed library). But I can see that the last 28 years have produced a mountain of debt that will have to be paid off either through higher taxes (likely), a weaker economy (happening now) or wild,out of control inflation (certainly).All of which will leave this country in much worse shape than we found it.
It's this dangerous \"free lunch\"mentality that has us in deep shit right now.
@Snarkysnake: I don't think you are understanding the methodology. I have to use past data to quantify an event. I'm not predicting the future, I'm going back and looking specific events. You can take past data for groups of stocks and compare them to the S&P. Using that you can model how a group of stocks should respond to overall market trends. You can then look at the dates surrounding the event of interest to see if there was an abnormal deviation in share price.
Its not a long term study, its an event study. Want to see what the short term impact of firing a CEO was? We can quantify that. I'm not saying that markets respond favorable to elections won by the GOP, there are far too many factors to try and say that. I'm saying there is a short term (0-20 days) positive correlation between share price and the GOP winning an election.
I found NO flaws in his report,thank you. But I didn't find any flaws in this months Klan newsletter either,because I won't dignify pseudoscience with my attention.
See,they can statistically \"prove\" that some races are genetically inferior to others.
Statistics are like political prisoners-torture them enough and they will confess to anything.
If Obama is bad for investors,then vote him out in '12. If he is good for investors,then I am happy. But the regime that just left office has been really bad for our future and the piling up of debt will wreck this country .It's a mathematical certainty.
okay okay, i get it now. you think statistics is more akin to crystallometry than calculus.
@SitDownNancy_GitEmSteveDave: You do realize that the same thing happened every time Bush talked too, don't you?
Correlation != causation.
Well, except, Noah built the Ark, BEFORE the flood, not at it's peak.
Also, this DO something mantra that has been reverberating in the echo chamber, is silly. Maybe Nero fiddled because he knew he was just going to make things worse.
I am not saying anyone should fiddle, I am just saying that to give credence to ideas (good or bad) by simply saying, \"Well, at least he did something\" is silly.
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@lonestarbl: Anybody who thinks the the woes of the economoy or the salvation of it can be pinned on one political party is an idiot.
It took a lot of people to get us where we are today and will take a lot to get us out.
@darkjedi26: But it can be pinned down to an ideology: the Conservative, Free Market Fundamentalist one. And they should be pilloried every time they duck their heads up long enough to parrot Rush talking points blaming the people trying to fix the mess they created in the first place.
@Trai_Dep: It CAN be pinned down to the bastardization of that philosophy and continual government intervention in the markets. We do not have a truly free market in this country, so obviously this crisis cannot be blamed on sticking to a truly free market.
And piling more debt on top of debt isn't the way to get out of debt, so it's not much of a fix. I hope it works so people can get back to work and the country can get back to being prosperous, but I'm skeptical.
@Cattivella: Like Communism, a truly free market is an invention belonging next to unicorns and Santa Claus. Unlike your average nine-year-old girl, however, Conservatives continue to insist this isn't the case. Indeed, they keep doubling down.
You guys had a great, eight-year run. Now get out of the way and let the grownups fix the mess you created, mmmmkay?
@Trai_Dep: you could say the same of all the market's great successes.
there were also thoughts that the extension of loans to those of poorer credit was a form of social service. and the current economic crisis is directly traceable to that, without conjecture.
but again, there wasn't one single factor that caused this.
@DaoKaioshin: Note I didn't say the free market was to blame, just the jihadists pushing the Chicago School frame of mind.
Ironically, their largest boosters will probably not even realize the reference I just made...
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@darkjedi26: The blame falls squarely on the shoulders of the industries that have been looting this country for years.
@darkjedi26: I'm not convinced the politicians from any party can be blamed or praised for the economy, they are just puppets that sing and dance to distract us from the people holding their strings and making each other rich.
@darkjedi26: Sorry about that, that was kind of my point, just went about it in the wrong way. I totally agree with you, it's a team effort. I was aiming for \"We at least have a plan, no lets do our best to support it and make it work\"
@lonestarbl: Want a plan? Eliminate capital gains tax. That would generate real investment. What was passed is a load of shit that will do nothing.
@lonestarbl: You misunderestimated the cost of the war.
Try $650B a year, plus increased costs to the VA to treat soliders with injuries and PTSD.
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@HIV 2 Elway Resurrected: I can't see how $800B of bacon, ham, sausage and roast could possibly be a nightmare.
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Am I the only person who looked at the formula and read a leet form of \"Oh, Baby\".
Someone should have seen that a long time ago and realized it meant \"You are going to be so screwed\".
Don't blame me; I was an English major.
@undefined: We're not attempting to assign blame because we like to see people suffer and enjoy prolonging pain (as much as you might believe that to be true), but the reality is that republicans aren't 100% responsible, just like democrats aren't 100% responsible. The problem is that I have yet to see a democrat politician own up to their part of the crisis and until they do they will not see the mistakes they've made and are doomed to repeat them. They need to be held accountable.
I guess Consumerist is going to start getting all their news ideas from Wired now.
@oneandone-Based on what you said the free market was not the cause of the poison outbreak. Some idiots looking for a cheep exterminator over looked the fact that the guy was unlicensed. There is a reason for licensing; you learn what type of poisons to use. The free markets took care of the unlicensed exterminator by forcing him into bankruptcy. If it was criminal then the courts take care of that issue too.
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Does this remind anyone else of the movie \"Pi\"?
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The forgot to read the disclaimer on the formula.
\"Past Performance is No Guarantee of Future Results\"
Or couldn't we use it as an excuse to not learn Math?
Why don't they teach math in school anymore Daddy?
Well son, if people get to good at math they can create forumlas that will single-handedly bring the world's economy to it's knees.
wow, what a gross over simplification by Wired. Nevermind the capital requirements required by rating agencies, the Basel ii requirements, the Monte Carlo simulations, etc that is actually done. -quant
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Classic misuse of math like E=MC^2.
@qwijybo:
I think you miss the point e=mc^2 is true and works, Li's formula is wrong and doesn't.
@qwijybo: Or miscalculating pi.