Tuesday, 7 October 2008

Parlous plonkers right across the media

Penny Wise at NZBC deplores the local so-called news media; she compares the recent childish reactions of the two main channels to the global economic crisis, which they both treated with all the gravity you'd expect of a story about a cute cat stuck up a tree.

As she points out, the problem of flatulent content is exacerbated by the plonkers who regularly appear all over most of the media, spreading their expertise like manure across a parched paddock.

Plonkers like this muppet, a one-time senior political advisor with aspirations to that same job again, who in his most recent blog peddles this crap:  "that Franklin Roosevelt [led] the world out of the Great Depression in the 1930s."

This is bullshit on stilts upon Acrow props.  Allow me to recommend again to him, and to every other commentator who opens their mouth on this topic just to let the wind blow their tongue around, that they try to divest themselves of the many myths about the Great Depression and about how the world eventually escaped it.

On the former, Lawrence Reed's 'Great Myths of the Great Depression' is ideal reading.  And on the latter, Mark Skousen's 'Saving the Depression: A New Look at World War II' is the most succinct explanation.

Print them out and keep them by your phone so you have them to hand when the media come calling.


  1. 'Cullen's fiscal rectitute over the last nine years has been admirable'.

    Time for a Tui, eh?

  2. Whoops, make that rectitude.

  3. Hooton and others get xcalls because they have been working for some people or some outfit for so long they ingratiate themselves with the media. They, like NZ First voters, should have to pass an IQ test (as well as a history test obviously) before being allowed to talk to anyone who might repeat what they say.

  4. I watch the News and read the Herald but when they call in some experts, I flick to a different channel. Some are good, but most just babble garbage. I like Bernard Hickey and Gareth Morgan, Bryan Gaynor, but the rest are mostly commenting on things already known to the public.

    I subscribe to the FundSource newsletter and I have to say, that it's analysis of financial news is useless. Too much vague and generalization. Eg, sometime they say something like:

    The market has been volatile today.

    This is a generalization statement that is useless. They should give some analysis as to how much is the volaltility (quantify), how has it been changed in the last few days, weeks prior to volatility today. It is important to state these information, so that investors can have a rough guess on what might come. But none of those is given.

    The only reason I subscribed to FundSource is to keep track on upcoming events that might be of interest to me. Apart from that, I have to say that their analysis is all rubbish.

  5. FF

    Some while back you mentioned how some traders exploited math modeling to determine which trades to make in order to maximise their profits. Have you had the opportunity to check and review their progress recently? How are they doing? Did they safely negotiate their way through the mire of the "credit-crunch"? Did they successfully model it and make untold wealth by exploiting the information thus generated? Or are they getting wiped out like all the rest?


  6. Amazing. The first ever global depression will go down in history horribly misunderstood. What a pathetic bunch of ignorant fools we have become. Consumer junkie credit card morons. Perfect little victims. Say that reminds me.

    Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold ALMOST 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, offshore accounts, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST ONE PERCENT HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any ‘humanitarian’ progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. IF IT WEREN’T FOR THE OBSCENE, UNREASONABLE, AND UNJUST DISTRIBUTION OF UNITED STATES WEALTH, THERE NEVER WOULD HAVE BEEN SUCH A MARKET FOR SUB-PRIME AND THERE NEVER WOULD HAVE BEEN A COLLAPSE IN THE HOUSING MARKET. Sub-prime did not cause the problem. It only accelerated the outcome. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGeneres, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. In fact, they specifically endorsed Countrywide by name. The same Countrywide widely responsible for predatory adjustable rate sub-prime lending and the accelerated collapse of the housing market. ENDORSED BY OPRAH WINFREY, ELLEN DEGENERES, AND DR PHIL. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. It also drives up the cost for nearly every product and service on the market. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. We still are. Even now, they claim to be ‘hurting’ right along with the rest of us. As if gas prices actually effect the lifestyle of a millionaire. ITS A LIE. IN 2007, THE RICHEST 1% INCREASED THEIR AVERAGE BOTTOM LINE WEALTH AGAIN. On average, they are now worth over $4,000,000 each. Thats an all time high. As a group, they are now worth well over $17,000,000,000,000. THATS WELL OVER SEVENTEEN TRILLION DOLLARS. Another all time high. Which by the way, is much more than the entire middle and lower classes combined. Also more than enough to pay off our national debt, fund the Iraq war for a decade, repair our infrastructure, and bail out the US housing market. Still think that our biggest problem is China? Think again. Its the 1% club. That means every big name celebrity, athlete, executive, entrepreneur, developer, banker, and lottery winner. Along with many attorneys, doctors, and politicians. If they are rich, then they are part of the problem. Their incredible wealth was not ‘created’, ‘generated’, grown in their back yard, or printed up on their command. It was transfered FROM US TO THEM. Directly and indirectly. Its become near impossible to spend a dollar without making some greedy pig even richer. Don’t be fooled by the occasional loss of a millionaire’s fortune. Overall, they just keep getting richer. They absolutely will not stop. Still, they have the nerve to pretend as if they care about ordinary people. ITS A LIE. NOTHING BUT CALCULATED PR CRAP. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Oil ‘futures’. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. Excessive medical testing. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, medical testing, love-sick, celebrity junkie. Their idea. All of the above drive up the cost of living, shrink the middle class, concentrate the world’s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the ‘charitable’ contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and ‘good will’ all at once. Which is usually done just before or after the release of their latest commercial project. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to ‘federal tax revenue’. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN’T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can’t afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. Anyway, when you account for all federal, state, and local taxes, the middle class actually pay about the same rate as the rich. The devil is in the details. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, credit crunch, weak US dollar, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can’t even afford basic health care. ALL BECAUSE OF GREED. I really don’t blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can’t be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman. Of course, they will jump to small minded conclusions about ‘jealousy’, ‘envy’, or ’socialism’. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.

    So what can we do about it? Well, not much. Unfortunately, we are stuck on a runaway train. The problem has gone unchecked for too many years. The US/global depression is comming thanks to the 1% club. It would take a massive effort by the vast majority to prevent it. Along with a voluntary sacrifice by the rich. THATS NOT GOING TO HAPPEN. But if you believe in miracles, then spend your money as wisely as possible. Especially in middle and lower class communities. Check the Fortune 500 list and limit your support of high profit/low labor industries (Hollywood, pro sports, energy, credit, pharmaceutical, cable, satelite, internet advertising, cell phone, high fashion, jewelry, ect.). Cancel all but one credit card for emergencies only. If you need a cell phone, then do your homework and find the best deal on a local pre-pay. If you want home internet access, then use the least expensive provider, and share accounts whenever possible. If you need to search, then use the less popular search engines. They usually produce the same results anyway. Don’t click on any internet ad. If you need the product or service, then look up the phone number or address and contact that business directly. Don’t pay to see any blockbuster movie. Instead, wait a few months and rent the DVD from a local store or buy it USED. If you want to see a big name game or event, then watch it in a local bar, club, or at home on network TV. Don’t buy any high end official merchendise and don’t support the high end sponsors. If its endorsed by a big name celebrity, then don’t buy it. If you can afford a new car, then make an exception for GM, Ford, and Dodge. If they don’t increase their market share soon, then a lot more people are going to get screwed out of their pensions and/or benefits. Of course, you must know by now to avoid those big trucks and SUVs unless you truly need one for its intended purpose. Don’t be ashamed to buy a foreign car if you prefer it. Afterall, those with the most fuel efficient vehicles consume a lot less foreign oil. Which accounts for a pretty big chunk of our trade deficit. Anyway, the global economy is worth supporting to some extent. Its the obscene profit margins, trade deficits, and BS from OPEC that get us into trouble. Otherwise, the global economy would be a good thing for everyone. Just keep in mind that the big 3 are struggling and they do produce a few smaller reliable cars. Don’t frequent any high end department store or any business in a newly developed upper class community. By doing so, you make developers richer and draw support away from industrial areas and away from the middle class communities. Instead, support the local retailer and the less popular shopping centers. Especially in lower or middle class communities. If you can afford to buy a home, then do so. But go smaller and less expensive. Don’t get yourself in too deep and don’t buy into the newly developed condos or gated communities. Instead, find a modest home in a building or neighborhood at least 20 years old. If you live in one of the poorer states, then try to support its economy first and foremost. Be on the lookout for commercial brainwash plots on TV. They are written into nearly every scene of nearly every show. Most cater to network sponsors and parent companies. Especially commercial health care. Big business is fine on occasion depending on the profit margins and profit sharing. Do your homework. If you want to support any legitimate charity, then do so directly. Never support any celebrity foundation. They spend most of their funding on PR campaigns, travel, and high end accomodations for themselves. Instead, go to Charitywatch.org and look up a top rated charity to support your favorite cause. In general, support the little guy as much as possible and the big guy as little as possible. Do your part to reverse the transfer of wealth away from the rich and back to the middle and lower classes. Unfortunately, there is no perfect answer. Jobs will be lost either way. Innocent children will starve and die either way. But we need to support the largest group of workers with the most reasonable profit margins. We also need to support LEGITIMATE charities (Check that list at Charitywatch.org). This is our only chance to limit the severity and/or duration of the comming US/global depression. In the meantime, don’t listen to Bernanke, Paulson, Bartiromo, Orman, Dobbs, Kramer, OReiley, or any other public figure with regard to the economy. They are all plenty smart but I swear to you that they will lie right through their rotten teeth. IT MAKES THEM RICHER. These people work for big business. The ‘experts’ they cite also work for big business. They are all motivated by their desire to accumulate more wealth. THEY WILL LIE RIGHT THROUGH THEIR ROTTEN TEETH. So don’t fall for their tricks. Instead, look at the big picture. The economic problems we face have been mounting for well over 20 years. All of them caused or aggrivated by a constant transfer of wealth from poorer to richer. Soon, it will cause the first ever GLOBAL DEPRESION. Its not brain surgery. Its simple math. Like I said, you are welcome to run this by any professor of economics or socio-economics. If thats not good enough, then look up what Einstein had to say about greed, extreme wealth, and its horrible concequences. I speak the truth. GREED KILLS. IT WILL BE OUR DOWNFALL.

    Its already underway. A massive campaign to divert our attention. Trump, Buffet, OReiley, Dobbs, Pickens, Norris, and several other well known filthy rich public figures have been running their mouths about the economy. Finally admitting a hint of severity after almost 2 years of denial. They even have the nerve to acknowledge the possibility of a US/global depression. Still, they refuse to acknowledge the single greatest underlying cause. Instead, they focus on policies and procedures that we born from the underlying cause. Dancing their way around the big picture. DON'T FALL FOR IT. Remember: Our national debt was way up BEFORE sub-prime. Consumer debt was way up BEFORE sub-prime. The cost of living was up BEFORE sub-prime. Wall Street profits were obscene BEFORE sub-prime. The middle class were loosing free and clear assets BEFORE sub-prime. Our infrastructure was in bad shape BEFORE sub-prime. Loans from China were taken out BEFORE sub-prime. The dollar was loosing value BEFORE sub-prime. So don’t let these cowardly filthy rich public figures divert your attention or limit your range of thought. THE CURRENT ECONOMIC CRISIS WAS NOT CAUSED BY A SINGLE POLICY OR PROCEDURE. IT WAS CAUSED PRIMARILY BY A MASSIVE TRANSFER OF WEALTH FROM POOR TO RICH. THIS ALSO REPRESENTS A MASSIVE CONCENTRATION OF CAPITAL WORLDWIDE. OTHERWISE, THERE WOULD NOT HAVE BEEN SUCH A MARKET FOR SUB-PRIME AND THERE WOULD NOT HAVE BEEN A GLOBAL CREDIT CRUNCH. MONEY DOES NOT GROW ON TREES AND IT DOES NOT JUST FLOAT AWAY. IT ONLY TRANSFERS FROM ONE PARTY TO ANOTHER. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. GREED KILLS. IT WILL BE OUR DOWNFALL.

    A word for those who respond with the usual ‘I know more than you. Look how smart, knowledgable, and articulate I am’ crap. Let me say this in advance. I don’t claim to be an expert in this field. But I did go on record with these predictions long before any public figure uttered the word ‘recession’. If you search long enough, you will find my early postings from ‘05′ and ‘06′. Including the first draft of this rant. Since then, I’ve gone on record against people like Greenspan, Bernanke, and Paulson. So far, my predictions have been accurate. Like I said. This is not brain surgery. For the mostpart, its simple math. When you concentrate the world’s wealth, you also concentrate its capital and shrink the middle class along with the potential market for every major industry. Homes go unsold. Bills go unpaid. Banks fail. More products go unsold. Jobs are lost. More banks fail. and so on. and so on. It happened 80 years ago. It will happen again. This time on a global scale. Throughout the cycle, the rich will tighten their grip. Concentrating the world’s wealth and resources even further and ensuring the collapse of every major economy worldwide. Think it can’t happen? Think again. GREED KILLS. IT WILL BE OUR DOWNFALL.

    Another thing. I don’t want credit for any of this. Otherwise, I would have given my full name a long time ago. As far as I’m concerned, you can put this rant in your own words and take credit for all of it. I don’t care. Just spread the word. Otherwise, the greatest injustice of all time will go down in history unchecked.

    By the way. The bailout won’t work. IT WON’T WORK. The plan fails to address the fundamental problem. The middle class don’t need more credit. They need a reasonable share of the economic pie. They also need a lower cost of living and a chance to catch their breath. They need a break from all of the psychological marketing tricks and mass market BS. Most of all, they need to wake up and see the truth. GREED KILLS. IT WILL BE OUR DOWNFALL.

    To my surprise, two public figures have found the courage to acknowledge this problem to some degree. On 11.07.07 former presidential candidate Ron Paul mentioned the massive transfer of wealth from poor to rich. He also hinted at the possibility of economic collapse. He did so on 'Face the Nation'. He was blacklisted almost immediately for doing so. On 9.28.08 former secretary of labor Robert Reich refered to the obscene levels of income inequality as part of a "recipe for disaster". He mentioned the richest one percent in particular. He did so on 'Late Night With Conan OBrien'. As far as I know, Albert Einstein was the first to explain the link between extreme wealth and economic instability. He did so in 1949. He explained how the first Great Depression was actually caused by a massive transfer of wealth from poor to rich. He predicted that it would happen again. We are about to witness the first ever GLOBAL DEPRESSION. Amazing. The prosperity of an entire world is about to be compromised. Almost entirely because of greed. IT WILL BE OUR DOWNFALL.

    The point about our government printing up more money was that it can't be done "on a whim" and that there are serious concequences for doing so (weak dollar, higher gas prices, inflation). I never said that it can't be or hasn't been done at all. Afterall, those loans from china weren't infused in the form of Chinese currency. They were infused in the form of our own. Not given to the middle class but instead to the banks in the form of credit. Its done nothing but perpetuate the problem. It never has been and never will be the answer. Sorry if I wasn't explicit enough the first time. The original draft was written 2 years ago and intended to fit within 300 characters. Anyway, I'm no English major. So if any of you want to re-word this post, feel free to do so. Whatever it takes to make people understand.

  7. D'you feel better after that filthy, rich cut-and-paste?

  8. I was waiting for him to write Seig Heil!

    What a load of rot he submitted. He's just another socialist wanting to gain the benefits of other people's wealth for free.


  9. LGM said...
    Or are they getting wiped out like all the rest?

    I don't know, since these trading systems are proprietary, where they don't announce their losses or gains, because it would attract attention from their competitors.

    I think you got confused about numerical financial modeling where you think that you always win. If you search the Not PC blog, to see that what I stated that the models are always (undeniable fact) protected against market movement, whether it is a disaster or not. This doesn't mean that they're shielded from disaster, but when disaster hits, their loss is minimal and when it is going well their gain is maximal compared to the same portfolio that is composed of exactly the same assets but not optimized and that is what portfolio insurance is all about.

    I have quoted to you many papers in the past to read about, since you're quite dismissive about modeling and it seems to me that you haven't had a looked at them, if you had, then you wouldn't ask what you've just stated above. Modeling is an approximation to reality but not reality itself.

    BTW, the Cullen Funds needs a fund manager or an economist to run their investment program and since they made a loss of ~$800 million this year, perhaps you might want to apply for the top job there, see they're not into financial numerical modeling. I am sure that your Mises'/Reisman's skills would be very handy for them, in that you will have the ability to turn them around into making profits.

    Here is a fact, had they use portfolio insurance modeling (weight efficient allocations) , the loss would be minimal (perhaps 600 mil, 400 mil or 200 mil, etc...) compared to their currently non-optimized portfolios. Now, do you see some advantages of modeling here or not?

  10. In other words your heroes took a bath and now they are begging to be bailed out.

    Math models do not provide you with a fundamental understanding of economics. You need to obtain that understanding well prior to building a model.


  11. LGM said...
    Math models do not provide you with a fundamental understanding of economics. You need to obtain that understanding well prior to building a model.

    The fundamental analysis type models are built on economic principles (equilibrium is the name of the game) and technical analysis is based on historical patterns (not on economic principles). Quantitative analysis (more advanced) is the combination of the two.

    Whether there is government interference in the market place (Socialism as you might like to call it) or not, it doesn't change the fact that there is ALWAYS interactions amongst the agents in an economic system (the individuals).

    These interactions (of agents) whether they're taken place in a non-government interference environment(Mises/Reissman Libertarianz ideal world) or not will always involve a near/perfect equilibrium. This is a fundamental nature of dynamical complex systems, which human economy is one.

    I like what Mises/Reisman say about less or no regulation at all in the market place, but even with such a system, there will always be interactions. Models are approximation and not the ultimate reality.

    A deaf who has an enhancement hearing device will always respond better than the another deaf who doesn't have one. The device is only an enabler, and it can't be claimed that the device is better than the real thing. If it is , then we would have all booked at our local clinics to replace our ears with artificial hearing devices. Models are exactly the same. There are useless models and there are useful ones.

  12. As someone who is 'literally' doing this as we speak...

    Markets operate on emotional and irrational factors; along with a dollop of hope or fear.

    The ASX, for instance, has had a roller coaster ride today...up/down/up/down/up/up/down/up...and it is hard to see how this had anything to do with interest rates, or the currency, or economic factors, or mathematical models, or anything else other than irrational behaviour! ha ha!

    As I write this the ASX is standing still...you have half the chaps trying to decide if it will rally, and the other half trying to decide if it will fall....and whatever happens is not the result of anything other than one group of chaps blinking first.

  13. Matt Nolan from Invisible Hand has a take on this same issue (see link below). I totally agree with Matt's last comment on his article.

    Matt quoted:
    Otherwise you end up randomly attacking people for developing economic models - where model development a process which makes the positivist process more transparent and more useful!

    Fundamentalists vs Realists: The gap in economics

    I agree with Matt's comment.

  14. Phew! Never thought Anon's rant would end - but I was interested to see where it would go, so persevered.

    Anon, you weren't all wrong. You're quite right to point the finger at govt and central bankers. (Some of us have been doing that for a long time, too). But rather than rail against "unbridled" capitalism, I urge you to have a think about the consequences of "crony" capitalism.

    I think you'll find that it's the constant interference with the relatively simple system of supply and demand that upsets the applecart.

  15. Elijah said...
    Markets operate on emotional and irrational factors; along with a dollop of hope or fear.

    Redundant argument. That is a widely known fact, so nothing new here.

    Elijah said...
    and it is hard to see how this had anything to do with... or mathematical models...

    Mathematical models is descriptive tool only. The fact one can see a rugby ball flies up high and then descends has got nothing to do with mathematical models, but yes, you can apply Newton Laws (which is mathematical) to describe the ball's motion and its dynamics. The ball's motion wasn't caused by some equations that popped into existence from somewhere, but it was caused by a Dan Carter's drop goal. The ASX, roller coaster ride yesterday wasn't caused by some equations. It was caused by free agents who participate in an evolving dynamical market systems. Whatever drove those agents to act in the way they did, cannot be known for certainty (unless you're into psychics). Models can only approximate or speculate what are the likely causes that drove those agents to act in the way they did.

    Can you differentiate mind-reading (psychics) and approximations based on axioms/postulations based on some known facts? I thought that Libz/Objectivists are heavily into to forming a set of axioms to start with. Objectivist is not my domain, but formulating a set of axioms is something heavily applied in mathematics.

    Here is a challenge. The challenge is to compare your day to day skills in market trading (non-optimized) with the popular optimized asset allocation model that I mentioned in my previous message. The task is to prove that optimized asset allocations will always do better than non-optimized asset allocations which you're currently doing. The always do better here means that when things are going bad, your loss is minimal and when it is going well your gain is maximal, it is not to mean that you will always win/gain.

    Are you up to it? If you are, then you can supply PC with your portfolio trading data for any specific time period in the past. Example, your trading data for September or first week of October or 7th and 8th of October, etc... You choose the time period, because the model doesn't care whether the market is up or down, all it does is minimized portfolio risk and maximize return when it is going well. I will run the model in your exact same portfolio but optimized it, and then test it against the last day of that data. That is in the last trading day of the data you provided the model will clearly showed that it has outperformed your non-optimized allocations. If you made a loss, the model will be shown to have made a smaller loss than you. If you had made a gain, the model will be shown to have made more profit/gain than you? This is what you call portfolio insurances and I am surprised that seasoned market traders like you hadn't heard of it. Perhaps you're using a wrong software.

    Perhaps we can bet for money in that if you proven that you have outperformed the model, then I pay you, and if the model outperformed you , then you pay me?

  16. Falafulu, I am inclined to accept your challenge, but for the first week of November.

    The current market conditions and activity are somewhat outside of normality, and due to enormous volatility (and the ban on short selling in Australia still in force) I have been watching rather than participating for much of the time lately, with only a handful of trades to 'keep my hand in' this week.

    (e.g When you have the ASX200 index soaring 25 points, dropping 30, rising 20 and dropping 18 points in a 15 minute period as has happened in the last 15 minutes ...I am staying well clear! ha ha!)

    But yes, first week of November things should have calmed down a bit and happy to have a challenge...(but no need to pay me any money if I win, it is all for fun! ha ha!)


1. Commenters are welcome and invited.
2. All comments are moderated. Off-topic grandstanding, spam, and gibberish will be ignored. Tu quoque will be moderated.
3. Read the post before you comment. Challenge facts, but don't simply ignore them.
4. Use a name. If it's important enough to say, it's important enough to put a name to.
5. Above all: Act with honour. Say what you mean, and mean what you say.