Pseudo-Econometrician John Williams

This is funny:

I don’t use this site, but I decided to pull it up, given frequent references to it by Austrian pseudo-economic types. While monetary base figures aren’t very relevant anyway, even this nutcase John Williams has the increases in his fantasy metrics at less than horrifying levels, and even shows an outright decline in the “M3 SGS” as recently as a year ago. Yet, he has a “hyperinflation watch” section on his homepage. lol

And apparently, he thinks these monetary base measures are pretty important:

So, this is just another demonstration of how the inflation sissies can’t even understand numbers they develop themselves. lmao

“Math is hard.”


Americans are Cowards

What else can we say about the citizens of a country that spend many hundreds of billions of dollars-per-year, kill untold multitudes of people overseas, wreck foreign countries, and surrender civil liberties to avoid attacks that each has only a one-in-some-number millions of times of suffering?

Published in: on February 3, 2010 at 6:48 pm  Leave a Comment  
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Blame Ourselves

The real  problem we face in this country is with ourselves.  We’re the ones that elect the politicians we hate, patronize the banks that cost us jobs and incredible financial losses, consume the media that keeps us ignorant, etc.  So, what is our problem? 

As the cliche goes, this all really goes back to education.  We can blame current pollticians in Washington all we like, but most education funding still comes from local and state taxes.  And what do we get for our money?  We get a population that overall knows little or nothing about the scientific method or areas it could be applied in such as economics and finance.  We get a country that fears only absolute levels of debt, ignoring the relative, only the latter of which is important.  We get people who think government finances work just like ours as individuals, completely ignoring and/or misunderstanding the paradox of thrift.  We the idea that anytime new money is created, it leads to inflation, no matter the circumstances.

So, it occurs to me that relatively free republics can have tremendous problems when their citizens become ignorant with regard to critical concepts and begin to behave accordingly.  Both politicians and the media do far more to meet the demand of the ill-informed than offering alternatives and so the ill-informed have their misconceptions reinforced.

This is the tragedy we face now and there are probably no rapid solutions. However, all this being said, a president with the courage and ability to communicate like FDR could help to at least start to send us in a better direction.

A Good Option is to Buy at Delta = 1

This will seem an obvious point to many, but going long or short with options is best done when delta is at or near 1.  It’s here when the rate of price increase starts to pick up dramatically, after a relatively slow rise pre-delta.  Being so far out of the money usually makes little sense, unless the market seriously undervalues such a position.  The risk clearly isn’t worth the reward.  See the figure I borrowed below:


Published in: on December 28, 2009 at 1:43 am  Leave a Comment  
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A Problem with Strong EMH

Strong versions of the efficient market hypothesis may have a problem with internal consistency.  

The theory requires and assumes successful securities trading strategies will quickly be mimicked, and hence moot.  Thus, an implication of the theory is that trying to pick individual securities to beat the market cannot be done consistently  It then follows, as many adherents to strong EMH claim, that only index funds can offer consistent positive returns.

Here’s the problem: If the most successful strategy is to invest in broad indexes, then why is this strategy not universal?  And if it were universal, then significant arbitrage opportunities would open up and many for some time.

This seems to suggest a more restrictive limit on the strength of EMH than adherents to strong versions claim.