A simple coordination game for the coffee breaks that can easily break your nervesAudio session of investor George Soros on the credit crisis of 2008 and what it means
Thursday, 17 April 2008
Friday Special 50
A simple coordination game for the coffee breaks that can easily break your nervesAudio session of investor George Soros on the credit crisis of 2008 and what it means
Monday, 14 April 2008
Bear Stearns and the mob
How much is Bear Stearns worth? Last time I checked, JP Morgan was paying 10 dollars a share, but only after the Fed agreed to provide a number of taxpayer-funded goodies to make it worth for the good bankers at J to the P to take the plunge.
The value of these goodies easily runs to plenty of times 10$ a share, which places the social value of Bear Stearns in solid red territory. Yet it still makes sense for the taxpayer to fund this deal, and to compensate Bear shareholders for being such bloody fools. Bear Stearns can't fail, as it will take the entire banking system and the 'real economy' with it.
This would never (well, almost never) happen with, say, a steelmaker or software company of similar size. That's why banks are not, and cannot, be plc's in the same way that other companies are. The social value of a steelmaker can only fall as far down as zero, while the social value of a bank can be much, much lower than that.
Failing banks are in many ways similar to the mob: not offering anything useful to anyone other than themselves, but having such ability to cause trouble that it makes sense to give them money simply to avoid the worst.
With the mob, local businessmen and residents pay the price. With banks, this is the job of the taxpayer.
The value of these goodies easily runs to plenty of times 10$ a share, which places the social value of Bear Stearns in solid red territory. Yet it still makes sense for the taxpayer to fund this deal, and to compensate Bear shareholders for being such bloody fools. Bear Stearns can't fail, as it will take the entire banking system and the 'real economy' with it.
This would never (well, almost never) happen with, say, a steelmaker or software company of similar size. That's why banks are not, and cannot, be plc's in the same way that other companies are. The social value of a steelmaker can only fall as far down as zero, while the social value of a bank can be much, much lower than that.
Failing banks are in many ways similar to the mob: not offering anything useful to anyone other than themselves, but having such ability to cause trouble that it makes sense to give them money simply to avoid the worst.
With the mob, local businessmen and residents pay the price. With banks, this is the job of the taxpayer.
Thursday, 10 April 2008
Friday Special 49
Global warming is by far an absolute truth as illustrated by a DailyTech articleThe heart of the award-winning hybrid Toyota Prius: Power Split Device
Google's environmental efforts with their Solar Panel project
On the 53 major events in A Briefer History of Time (PDF)
Creepy girl from MotionPortrait
Monday, 7 April 2008
Thursday, 3 April 2008
Friday Special 48
2008 Olympic Torch Relay Route
Enjoy speculating with technical stock analysis on Inspected
Ever wondered what Europe has ever done for us?
Watch the Frontline special series online: Bush's war
Tuesday, 1 April 2008
I hate seasonally adjusted series
To all data providers, wherever they may be:
Please, please stop seasonally adjusting the series you give me. I can run a regression with seasonal dummies myself, thank you very much. So can everyone else. The difficult thing is to get from the seasonally adjusted series to the original one, and I don't see why you should deprive me of the privilege.
Yes, I know I shouldn't want to in most cases, but let me be the judge of that, OK? What's your problem anyway, what is it to you? Please, just do me this favour.
Please, please stop seasonally adjusting the series you give me. I can run a regression with seasonal dummies myself, thank you very much. So can everyone else. The difficult thing is to get from the seasonally adjusted series to the original one, and I don't see why you should deprive me of the privilege.
Yes, I know I shouldn't want to in most cases, but let me be the judge of that, OK? What's your problem anyway, what is it to you? Please, just do me this favour.
Honey, I shrunk the sample covariance matrix
What a title! The paper starts:
...so you know whether it's worth reading it. Personally, I don't find that type of thing a turn-on.
The central message of this paper is that nobody should be using the sample covariance matrix for the purpose of portfolio optimization.
...so you know whether it's worth reading it. Personally, I don't find that type of thing a turn-on.
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