tag:blogger.com,1999:blog-11906042.post7156516883616920727..comments2024-03-29T10:51:27.752+13:00Comments on Not PC: Shock news: Humans don't act as economists say they should! (update 2)Peter Cresswellhttp://www.blogger.com/profile/10699845031503699181noreply@blogger.comBlogger40125tag:blogger.com,1999:blog-11906042.post-39520183517873226362008-03-31T17:43:00.000+13:002008-03-31T17:43:00.000+13:00as a non economist, my definition would include th...as a non economist, my definition would include the desire to explain human (primarily commercial) behaviour and the impact of that behaviour and systems on economies. <BR/><BR/>I think the point LGM was making at length is that economics is qualitative, trading models quantitative unless applied by a qualitative mind.<BR/><BR/>InsiderAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-27916426547524552392008-03-31T15:54:00.000+13:002008-03-31T15:54:00.000+13:00I'm not sure there really is a good definition of ...I'm not sure there really is a good definition of economics. See the examples below.<BR/><BR/>Most of economics can be summarized in four words: People respond to incentives. The rest is commentary <BR/> Steven E. Landsburg<BR/><BR/>My view of economics is that it is the study of the economic system, that it studies how people earn their incomes and how they spend them, and that it studies the institutions of the economic system, that is to say, banks,<BR/>markets, and firms, all influenced ... by the legal system.<BR/> Ronald Coase<BR/><BR/>... Economics is a study of mankind in the ordinary business of life; ...<BR/> Alfred Marshall<BR/><BR/>Economics is the science which studies human behavior as a relationship between scarce means which have alternative uses<BR/> Lionel C. Robbins<BR/><BR/>Economics is what economists do <BR/> Jacob Viner<BR/><BR/>The Viner one is the most honest! But if you look at any of them then microeconomics is covered by them. Econometrics (that is the use of stats in econ) is a tool that economists find useful so we teach and use it. I guess its not part of econ as such but it is used in both macro and micro to help understand whatever we are looking at.Paul Walkerhttps://www.blogger.com/profile/13731003529546075700noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-35001046986149407412008-03-31T02:38:00.000+13:002008-03-31T02:38:00.000+13:00Paul Walker, I am interested to hear your view on ...Paul Walker, I am interested to hear your view on the subject definition of economics. LGM & PC thinks that Econometric & Micro-economics are not economics at all. None of us has been formally trained in economics like yourself and it will be interesting to see some interpretation of the term from you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-63541465793369866262008-03-31T01:38:00.000+13:002008-03-31T01:38:00.000+13:00Ruth,Thanks for the info you have offered me and I...Ruth,<BR/><BR/>Thanks for the info you have offered me and I appreciated your effort. <BR/><BR/>I am known to all the Libertarianzs even though I am not Libertarianz. I was PC's neighbour at the castle years ago, and I happened to enjoy popping downstairs to join their regular BBQs & drinks (used to be last Friday of the month) outside in the garden.<BR/><BR/>I believe that everyone who is a reader of Not PC blog knows that Falafulu Fisi is a nom de plume and I am surprised that you didn't know that already. <BR/><BR/>It is good to use one, just the same as you do, because as we move in to more advanced intelligent computing (mathematical modeling) in information retrieval on the internet , I can tell you to be honest that it is quite frightening. Softwares would be able to figure out who is saying what & where, regarding similar concepts when we put those infos on the internet. Google is already using one and one can only estimate that it will get better over times. The conference at Stanford in 2006, <A HREF="http://www.stanford.edu/group/mmds/mmds2006.html" REL="nofollow">Workshop on Algorithms for Modern Massive Data Sets</A>, revealed some new techniques (algorithms) that are able to solve the limitation of current search engines such as Google, Yahoo or Microsoft are using. All current search engines use only 2 metrics, such that Google PageRank collects the outward links and inward links. New techniques can now do more than 2 metrics (unlimited). With this type of capability search engine's indexing accuracy will dramatically improve.<BR/><BR/>See, the Google placed advertisement in blogs are already deploying such application. No one, from Google is reading Not PC's blog (or million others) to determine its content beforehand, then deciding which items (books) to be placed in a specific blog post. The software scans the blog post try to understand its semantics & concepts then automatically match it to items (or books) that are similar or relevant. The placed ads is not static, it is dynamic. If one observes the items that are advertised on Not PC's blog, mostly they're different items for different posts. <BR/><BR/>I do also specializes in this area, algorithm development in search engine, text-mining, <A HREF="http://en.wikipedia.org/wiki/Sentiment_analysis" REL="nofollow">Sentiment Analysis</A> (SA) and as I said, it is only going to get better & better. And my software will include such capability to analyze financial news story in realtime so that users are made aware of the different possible scenarios that could take place in the market. <BR/><BR/>In fact Reuters and other commercial vendors are already doing it. There is a system called <A HREF="http://www.ri.cmu.edu/pub_files/pub4/seo_young_woo_2004_2/seo_young_woo_2004_2.pdf" REL="nofollow">Warren</A> developed at CMU, that it is quite effective in summrising facts from financial news and presenting them to users. Warren presented infos such as the following:<BR/><BR/><I>GOOD - News articles which explicitly show evidence of the company's healthy financial status.<BR/>e.g.) … Shares of ABC Company rose 1=2 or 2 percent on the Nasdaq to $24-<BR/>15/16. …<BR/><BR/>GOOD, UNCERTAIN - News articles which refer to predictions of future profitability, and forecasts.<BR/>e.g.) … ABC Company predicts fourth-quarter earnings will be high. …<BR/><BR/>NEUTRAL - News articles which mention financial facts but do not provide good or<BR/>bad aspects.<BR/>e.g.) … ABC contributes $ 700 million in stock to its pension plan …<BR/><BR/>BAD, UNCERTAIN - News articles which refer to predictions of future losses, or no profitability.<BR/>e.g.) … ABC (Nasdaq: ABC) warned on Tuesday that Fourth-quarter results<BR/>could fall short of expectations. …<BR/><BR/>BAD - News articles which explicitly show evidence of the company's bad financial status.<BR/>e.g.) … Shares of ABC (ABC: down $0.54 to $49.37) fell in early New York<BR/>trading. …</I><BR/><BR/>Here is another interesting article on using text-mining in the financial market analysis:<BR/><BR/><A HREF="http://www.cs.aau.dk/~gyg/docs/financial-prediction.pdf" REL="nofollow">Using News articles to predict Stock Price Movements</A><BR/><BR/>I do test my text mining algorithm on the <A HREF="http://people.csail.mit.edu/jrennie/20Newsgroups/" REL="nofollow">20 Newsgroups</A>, and recently, I've just set my crawler to scan the Not PC blog and cluster it by topics, by post, by user, etc,... and this was how I noted the similarity between the LGM, Abdul, Roger Rogerson, because they all lumped up together. I will continue to test its accuracy on Not PC's blog and I will include other financial news sites for the crawler to index .<BR/><BR/>If you're interested in such software capability for your industry & Forex trading, then take a look at this commercial vendor, perhaps you might want to subscribe to their service: <A HREF="http://www.understandmarket.com/index.php?categoryid=64" REL="nofollow">Forex News and Sentiment Analysis | Economics News Alert</A><BR/><BR/>Forget about Falafulu Fisi's as a name, you want best performing algorithm that is going to give good return then your organisation should look no further than my software. It is likely that you won't be dealings with me, I believe that there will be a sales person or whoever that is going to promote it on behalf of my startup, since it would be better for me to do what I am good at, and that is researching the literatures such as my favorites (<A HREF="http://repec.org/" REL="nofollow">RePEC - Research Papers in Economics</A>) to find best performing algorithms & techniques to adopt and leave the admin or sales site of the business to someone else. So, in that way it is purely professional relationship because your organisation will not be dealing directly with me. <BR/><BR/>Here is a general hint about its capability:<BR/><BR/><A>A rocket scientist from NASA or an Electrical Engineer from Motorolla might confuse my software as design tool that they could use in their work.</A><BR/><BR/>Yep, Signal Processing algorithms, feedback control theory algorithms (yes, feedback mechanisms do exist in the market) are included (not one, but many different types).<BR/><BR/>I have started informal inquiries to venture capitalists such as Jenny Morel and others, so that I can present my ideas in the prototype that I am writing at the moment. I am confident that they will come in and take a chunk of my startup and become shareholders. There is no guarantee that Jenny will come in, but if it is not her, then it may be someone else (there are a few of those in NZ). All startups that Jenny's company involve in, she is also a director. This is what is likely to be the case. If an external investor becomes involve in what I am doing, then corporate dealings would be done with that person and not with Falafulu. And as this local <A HREF="http://www.drury.net.nz/2007/07/11/software-research-and-development/" REL="nofollow">millionare business man</A> who is a huge fan of Falafulu Fisi where I have met him a few times has advised startups in his Herald article to take the money when seeking venture funds even if it is a big chunk of your business that they want to invest in. This is true, it is better to own a small piece of a big pie than a big piece of a small one. <BR/><BR/>I am well connected to University researchers (Mathematics, Physics, Statistics, Artificial Intelligence) both local and from offshore, and for a high-end product that target international market of the likes that I am developing, one needs to keep innovating and this can only be achieved by collaborating or funding Unversity researchers. The day when one stops innovating, is the day, that the competitors perhaps overtake you.<BR/><BR/>The man from the island (me) wants to get involve in <I>algorithm wars</I> as stated by Andrew Lo, director of the Massachusetts Institute of Technology’s Laboratory for Financial Engineering in this article: <A HREF="http://www.iht.com/articles/2006/11/23/business/trading.php?page=1" REL="nofollow">Artificial intelligence applied heavily to picking stocks</A> <BR/><BR/><I>"Now it’s an arms race,Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits"</I><BR/><BR/>Falafulu Fisi is confident that his product can compete in international market with billionare fund managers as Kenneth Griffin and James Simon who are developing & using similar systems. My only limitation to take the product internationally is the funding. If funding is available, then I am able to recruit more programmers.<BR/><BR/>This software will give you good return Ruth and forget about internet pseudonyms because everyone has one.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-25641029656940415842008-03-30T16:31:00.000+13:002008-03-30T16:31:00.000+13:00In light of the last few posts I am going to have ...In light of the last few posts I am going to have to retract my corporate offer to you FF. <BR/><BR/>Looking back on my files I note you forewarded my email to the xtra address that was supplied to me to a pseudonynmous web based address, and replied under that pseudonym. I had told the respective bank that your name was falafulu fisi. 'LGM''s post confirms that it is not.<BR/><BR/>This is highly unprofessional and we want no part in it.<BR/><BR/>All the best for the future.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-76783136831866536042008-03-29T13:49:00.000+13:002008-03-29T13:49:00.000+13:00As I said in a previous post that quantitative eco...As I said in a previous post that quantitative economics (in which you and PC don't like) where pioneers like Sharpe, Markowitz and others is a sub-discipline of economics (Microeconomics & Econometrics ). What Mises , Reisman and others do, is another sub-discipline, exactly as Physics or Engineering discipline for instance (or other fields). There is Civil, Mechanical, Electrical & Electronic, Chemical, Engineering Science, Software Engineering, and no doubt that there will be new sub-disciplines emerging in the future.<BR/><BR/>I do understand economics, from the perspective of the sub-disciplines I have quoted above. I don't know other sub-disciplines of economics (Macroeconomics and others), but it doesn't mean that it is something that is totally unknowable or hard for me to grasp if I choose to be self-taught in those areas. It is that I just read what is relevant to what I am doing and that is computational finance/economic models. The point is, that it doesn't mean that Mises know his sub-discipline quite well, and all of a sudden, he is expertise in other economics sub-disciplines and I suspect that this is what you and PC think. Mises & Reisman are always right and everyone else is wrong. Just the same as an engineer who has been trained Civil, can't be expected to know Electrical & Electronic, Mechanical, etc. It doesn't mean that one can't, but you find those experts in their respective sub-disciplines don't try to dismiss others from other sub-disciplines . I've never heard of an Electrical Engineer who had criticized a Chemical Engineer because the Electrical guy thinks that what Chemical Engineers do are all bollocks. Economics is no different. When a guy from one sub-discipline takes a snipe attack on another guy from another sub-discipline (where he has no knowledge about the subject except his uninformed opinions and not based on verifiable facts) with no justification at all because of what he perceived to be impossible, then the attacker needs to be attacked back. <BR/><BR/>See, the attacker offered no evidence (none) except his/her opinions and the person being attacked could only point to evidence that has been verifiably observed and been published in the literatures. Again don't confuse static models with dynamic models.<BR/><BR/>I do like Mises & Reisman's philosophies from reading Not PC's blog (even though I have'nt read their books). It itches me, that PC (supported by you) is very dismissive about concepts that doesn't suit him (or doesn't support Mises philosophies), but stealthily used those same concepts that he dismissed to support his views on other unrelated subjects or topics.<BR/> <BR/><BR/>LGM said...<BR/><I>But I have 100% knowledge of the fact that Falafulu Fisi is also S - - - e. Understand the difference? </I><BR/><BR/>But I also have 100% knowledge of the fact that LGM is G..... R...<BR/><BR/>Anyway, how is your boat? Have you sold it or you still have it in your possession. I remembered going for a boat ride (with you & your wife) over at the Hauraki Gulf a few years back and the engine stopped. If you didn't manage to restart it, I would have jumped and swam back to the Auckland Harbour, because it looked like that the boat was drifting further & further away. You didn't know what the weather was gong to be like, when you mentioned to your wife, that she should have tuned in to the forecast for that afternoon.<BR/><BR/>See, you need to listen to weather forecast (even though the models are not perfect) because it gives you a rough guide of what the weather is going to be like if you plan on taking that boat out frequently.<BR/><BR/>Finally, your book "Schrodingers Cat", that I borrowed was returned to PC a few years back to give it back to you. I think that it is still sitting at the PC's collection at the Castle. I haven't seen you at the Castle since you've been back.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-70122921886890587632008-03-29T11:33:00.000+13:002008-03-29T11:33:00.000+13:00CraigYou wrote, "This is not a blog for debate".Ac...Craig<BR/><BR/>You wrote, "This is not a blog for debate".<BR/><BR/>Actually it is. It's just that you've not contributed anything of value or worth to the debate. That's likely because you have nothing. What a worthless toady you are! <BR/><BR/>LGMAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-10717928365476027322008-03-29T11:26:00.000+13:002008-03-29T11:26:00.000+13:00Falafulu FisiTry this. Falafulu Fisi is S - - - e...Falafulu Fisi<BR/><BR/>Try this. <BR/><BR/>Falafulu Fisi is S - - - e. No maths necessary. No maths model or tricky software required. It's a 100% fact of reality. Cast iron guaranteed. How about that! <BR/><BR/>There have been a number of points raised for your consideration and response. You fail to directly address them, instead dragging along any old red herring you can find in order to obscure the issues to hand. It is now obvious that you don't have a clue about the subject of economics (and certainly not about philosophy of science- you'd do well to check out Harriman's "Philosophic Corruption of Physics").<BR/><BR/>Actually, the point about the model being 100% wrong is important. Consider it. <BR/><BR/>It is not a matter of being 1% incorrect. The modellers were completely incorrect and the model did not reflect reality. It never did correspond. Not even when they first developed it. They had not a clue. The model was worse than useless. How many people were deceived? How much wealth was malinvested? Who is still fooled by it? <BR/><BR/>Yes, it is possible to make all sorts of excuses, including the 1% one. That does nothing to alter the fact that the modellers were not aware of the real situation. Instead what they did was construct a model in spite of it. They were ignorant. <BR/><BR/>The point is not that all models are invalid. It is that unless the modeller actually knows (that is, he holds specific knowledge of reality) about what it is he wants to model, then the model is a little fiction or worse, a deceptive lie. It is a seductive one, but remains false nonetheless. They may as well have thrown dice or cast horoscopes.<BR/><BR/>This is important as it means that the idea of setting up a model (or a mathematical equation such as Schroedinger's) on the basis of arbitrary notions (as you previously have claimed) is wrong; doomed to deceive. <BR/>[BTW your previous characterisation of Scroedinger's approach is not factual. Perhaps you should read his correspondence.] <BR/><BR/>In order to successfully model something, one must know about the attributes of the entities that one would like to model. Understand that the maths is nothing more than a descriptive language. If one want's the model to work out (or to have a reasonable chance of actually being useful), then the description must be of reality, of that which exists. In other words, possession of real knowledge is a necessity, not arbitrary notions. <BR/><BR/>You must know about the real entities before you abstract certain of their attributes into your model. You must know about the real entities in order to determine which attributes are key and must be taken into account as opposed to those which are not significant for the purposes of your particular model. You must know about the real entities before you make your assumptions. You must understand the significance of the assumptions you make and why they are valid to make. You must know what your techniques are and what the nature of those actually is, including the shortcomings and limitations. You must already know quite a lot about the reality of the situation. (One reason none of the climate models get it right is because they do not incorporate sufficient knowledge about the Earth's atmosphere and what drives its weather systems and so forth.) <BR/><BR/>This brings us back to the topic of economics. Economics is a study of the actions of volitional individuals and the results. It is a study of how individuals should be allowed to act and WHY they should be allowed to act. It is a study of what occurs when they are restricted from acting and what results. It is a study that relies on key understandings regarding volitional people. That is the issue all the maths in the world cannot obscure or overcome. <BR/><BR/>An objection to the notion of "mathematical" modelling in economics is that the practioners loudly proclaiming their technical skills have not got a fundamental understanding or knowledge of economics. They assume individual people as mindless particles, described by a few lines of code, some letters and numbers. That is not going to work out as it does not correspond with reality. "I am not a number", as the quote goes. Just as the climate modellers have not got the knowledge (and hence their models are unsuccessful in describing reality), so too with the mathematical "economists" and their castings. See again PC's essay and that interesting table he reproduces. <BR/><BR/>In the material you have presented a glaring omission exists; the fundamental of economics- individuals and their actions. Auto-trading software and the development thereof is not nearly the same topic. <BR/><BR/>And now we come to this. You have an 87% confidence in a claim you make, on the basis of someone else's software, that I am Roger Rogerson. Fair enough. But I have 100% knowledge of the fact that Falafulu Fisi is also S - - - e. Understand the difference? <BR/><BR/>So now, how about admitting that mathematics does not define economics.<BR/><BR/>LGMAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-1351851260262892322008-03-29T11:03:00.000+13:002008-03-29T11:03:00.000+13:00I'm pleased he joined in - this thread has been th...I'm pleased he joined in - this thread has been the best so far this year. And a couple of people got pwned. Lineberry is probably at this very moment phoning his broker b4 he runs off to wire the money to pay for the trade - hilariously out of date nonsense.<BR/><BR/>People's minds are set in concrete about modelling - for finance anyway - and no amount of debate or evidence will break the concrete. <BR/><BR/>It would be good if people got this riled about about things that REALLY matter in this country, instead of this bullshit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-82451876019881739352008-03-29T08:16:00.000+13:002008-03-29T08:16:00.000+13:00Falafulu, don't you have better things to do than ...Falafulu, don't you have better things to do than argue with these pompous blowhards? For instance, punching yourself in the face for a couple of hours might be more fun.<BR/><BR/>This is not a blog for debate, its purpose is simply to espouse the immutable views of PC and his ilk.<BR/>If you are trading and doing well, I would just leave Elijah to his fantasy world.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-24042994477579153122008-03-28T20:43:00.000+13:002008-03-28T20:43:00.000+13:00Well done FF.Someone get a horse head.Well done FF.<BR/><BR/>Someone get a horse head.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-72009634073008364442008-03-28T20:04:00.000+13:002008-03-28T20:04:00.000+13:00Also the name Cleetus comes up very close to the c...Also the name <B>Cleetus</B> comes up very close to the <A HREF="http://en.wikipedia.org/wiki/Data_clustering" REL="nofollow">clusters</A> that formed by users, Abdul, Banker, LGM, including the <I>Roger Rogerson</I> who had just posted above.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-46714730582226463042008-03-28T19:31:00.000+13:002008-03-28T19:31:00.000+13:00Roger Rogerson said...Falafulu Fisi you is taking ...Roger Rogerson said...<BR/><I>Falafulu Fisi you is taking the piss man</I><BR/><BR/>LGM, are you resurrecting as Roger Rogerson now?<BR/><BR/>You can hide your name, but man I do use mathematical modeling to <A HREF="http://en.wikipedia.org/wiki/Text_mining" REL="nofollow">text-mine</A> most of the posts here at Not PC to <A HREF="http://en.wikipedia.org/wiki/Latent_semantic_analysis" REL="nofollow">recognize patterns</A> that belong to a specific name or pseudonyms. The text of your last post matches pseudonyms as Abdul, Banker, LGM, with a confidence of 87% probability.<BR/><BR/>I hope that my model is wrong, but as whoever is the person that is frothing above, as you said, the model was just 100% wrong.<BR/><BR/>If you doubt, then I am willing to show PC how the pattern recognition software works, because it is what I do everyday, mathematical modeling and algorithm development, be it economics/finance, spam detection, face/image recognition, speech recognition or whatever anything in this world that could be mathematically modeled. <BR/><BR/>BTW, text-mining and text-classification is not new, they've been around for a few years. Spam detection is text-classification ,ie, binary classification (2 class) an email is either spam or no_spam. What I do use in mining the Not PC blog is multi-class, ie, many users with their corresponding many messages.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-61627209436675374492008-03-28T18:33:00.000+13:002008-03-28T18:33:00.000+13:00Falafulu Fisi you is taking the piss man. You're ...Falafulu Fisi you is taking the piss man. You're a bit of a dude eh? Having a laugh because you can't really be serious. A bit of a joke eh?. <BR/><BR/>You reckon that some physicis wallah (Professor Lord Doctor Witch-Doctor Mullah Ayatollah Seriouslydunno was it?) from Oxford said that the demise of LTCM didn't mean that the models were useless, "because 99% of the time it is correct, however its the 1% chance that it could fail just happened to occur."<BR/><BR/>Nope. <BR/><BR/>Buddy, it's 100%, not 1%.<BR/><BR/>The model regarding LTCP was dead wrong. Completely flawed and as false as a false thing can be. That's 100% dead wrong. Fake. <BR/><BR/>That leaves what? Model was accurate exactly no percent. Zero percent. Nadah! Nil! Zip! never got it right or even a little bit right at all. Did not know what was happening. had not got a tiny wee clue. 0% correct. <BR/><BR/>The physics guy stuffed up big time. His model was 100% wrong and it 100% failed to correspond with the reality of LTCM. It failed 100%, not 1%.<BR/><BR/>And today there is no LTCM around any more. <BR/><BR/>And that modle is still dead completely fake wrong.<BR/><BR/>Or mebbe it was a furphy all along. <BR/><BR/>Guess the physics wallah what made the model failed to notice some really important stuff. Like his modle was 100% w-r-o-n-g.<BR/><BR/>100% failure. <BR/><BR/>He asked whether you would "use horoscopes to guide your portfolio management, perhaps just stick to your best judgment or use models?"<BR/><BR/>Answer: Horoscopes may have been more accurate. Let's say that would be about 50% of the time. What means that they are a lot better than 100% dead freaking fake and flat bluddy wrong.<BR/><BR/>LTCP scores. Horoscopes score 50%. Models score............ 0%.<BR/> <BR/><BR/><BR/><BR/>Your best judgement would likely have been much better than the model if you bothered to do some background research into the company and its dealings and who key management and staff were. What is called due diligence. That's the ticket to knowing about where your investment is going.<BR/><BR/>Model? With the startling lack of knowledge about the specifics about the company that the physics wallah suffered from his model was 100% useless. It was a 100% misleading. A waste of time it was. <BR/><BR/><BR/><BR/><BR/>100%<BR/><BR/><BR/>Got it 100% fucked up the bottom wrong.<BR/><BR/>Ouch!<BR/><BR/><BR/>Roger and out!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-29936614269263862462008-03-28T17:21:00.000+13:002008-03-28T17:21:00.000+13:00PC said...I'll even take advice from Hayek and Mil...PC said...<BR/><I>I'll even take advice from Hayek and Milton Friedman and James Buchanan when I have too - and even from Rothbard when he's rational.<BR/><BR/>How 'bout you?</I><BR/><BR/>Economics has many sub-disciplines similar to Engineering/Physics/Psychology/Mathematics, etc, and you've quoted some , which they do belong to one category.<BR/><BR/>Here are some that I followed their work, and again they're from a different discipline in economics. I bet that you think that economics is only a one unified discipline?<BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/William_Forsyth_Sharpe" REL="nofollow">William Sharpe</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Harry_Markowitz" REL="nofollow">Harry Markowitz</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Merton_Miller" REL="nofollow">Merton Miller</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Franco_Modigliani" REL="nofollow">Franco Modigliani</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Myron_Scholes" REL="nofollow">Myron Scholes</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Eugene_Fama" REL="nofollow">Eugene Fama</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Robert_F._Engle" REL="nofollow">Robert Engle</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Robert_A._Jarrow" REL="nofollow">Robert A. Jarrow</A><BR/><BR/>- <A HREF="http://en.wikipedia.org/wiki/Emanuel_Derman" REL="nofollow">Emanuel Derman</A><BR/><BR/>and many others.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-86509518224477943482008-03-28T16:22:00.000+13:002008-03-28T16:22:00.000+13:00The previous message was mine, forgot to click the...The previous message was mine, forgot to click the choice <I>name</I> selection radio button.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-4559551534378507422008-03-28T15:44:00.000+13:002008-03-28T15:44:00.000+13:00PC, I noted that you haven't responded to my messa...PC, I noted that you haven't responded to my message on that thread : <A HREF="http://pc.blogspot.com/2008/03/failing-policies-of-present.html" REL="nofollow">failing policies of present</A>, where I pointed out your contradicting argument about mathematical economics. Is there a reason why? Perhaps LukeH is correct when he quoted this from the other <A HREF="https://www.blogger.com/comment.g?blogID=11906042&postID=2835319872007686239" REL="nofollow">thread</A>:<BR/><BR/><I>Ah I see - refer to Wiki articles when you like and agree with the subject, but make it "off-limits" when the content of the article doesn't suit your purpose.<BR/><BR/>As long as we've got that clear ...</I><BR/><BR/>You dismissed mathematical economics when it suits you (because Almighty Mises said that mathematical economics should be dismissed), but happily quoted <A HREF="http://en.wikipedia.org/wiki/Multifactor_productivity" REL="nofollow">Economic Multi-factor Productivity</A> , which obvious that it is quantitative , which is against what Almighty Mises had preached.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-89267921282282299682008-03-28T12:37:00.000+13:002008-03-28T12:37:00.000+13:00So have we worked out who has the biggest ham yet?...So have we worked out who has the biggest ham yet?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-56444027478086176702008-03-28T11:36:00.000+13:002008-03-28T11:36:00.000+13:00Just to add to that list of economists from whom I...Just to add to that list of economists from whom I'm happy to take advice, there are some local luminaries I neglected to mention -- but who if they tell me to jump economically, you'll generally find me asking how high. The list includes Paul Walker, Greg Balle, Tony Endres, Ian Hunter, Eric Crampton, Julian Darby & Ashley Chan.<BR/><BR/>Heroes all, in my book.Peter Cresswellhttps://www.blogger.com/profile/10699845031503699181noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-17062674271799540952008-03-28T11:04:00.000+13:002008-03-28T11:04:00.000+13:00Falufulu Fisi, vous accussez "everything that does...Falufulu Fisi, vous accussez "everything that doesn't suit your preconceived ideas must be dismissed since it doesn't fit in with Heiress Ayn Rand or Almighty Mises."<BR/><BR/>Not true. In the field of economics I have many more heroes than just those two luminaries and Professor Reisman.<BR/><BR/>I'm happy to take advice and wisdom from Adam Smith and David Ricardo, from James and John Stuart Mill, from Carl Menger, Eugen von Bohm-Bawerk, and Henry Hazlitt; from Israel Kirzner, Bernard Siegan and Mark Skousen; fronm Jean-Baptiste Say and Frederic Bastiat and Nassau Senior; from Larry Sechrest and Kevin Dowd and Frank Shostak; from John Ridpath, Yaron Brook, Richard Salsman, Walter Williams and Thomas Sowell.<BR/><BR/>I'll take economic advice from all of these and more. How 'bout you?<BR/><BR/>I'll even take advice from Hayek and Milton Friedman and James Buchanan when I have too - and even from Rothbard when he's rational.<BR/><BR/>How 'bout you?<BR/><BR/>I'm also aware of causality -- on which the science of the production of wealth rests -- and also of the multiple complexities of markets and human choice, and especially I'm aware of <I>the free will of human beings</I>, something no mathematical model can <I>ever</I> account for.<BR/><BR/>Mathematics is silent on causality, just as mathematical economics is silent on free will. It's this last that is most violated by the claims of mathematical economics to be "scientific" -- after all, without experimental proof, where is the science? Without control groups and experimentation and the like, where is the derivation of all the functions that mathematical economists dream up and then insist (without experimental proof) that human beings follow? <BR/><BR/>Free will indicates nothing more than that man acts, and generally acts to move from a less satisfactory situation to a more satisfactory situation.<BR/><BR/>We can derive this 'action principle' simply by observation and induction, but it's more than enough from which to found the science that studies the creation of human wealth (in other words, economics).<BR/><BR/>The chief problem with mathematical economics (and I'm talking here not of short-term aids to technical analysis and trend-spotting, but of all the many formulae used purportedly to describe and predict human action) is not just that the mathematics needed to describe accurately the behaviour of the thousands of interlocking markets and millions of thinking, choosing acting human beings is even more complicated than the close-coupled equations needed to describe the mechanics of global warming -- it's more problematic even than that. <BR/><BR/>You see, while molecules and mathematics are deterministic, human behaviour is not.<BR/><BR/>Mathematical economics seeks at root to either to force human beings and human choices into the Procrustean bed of their formulae, and (by citing "market failure" if human beings remain recalcitrantly unforced) seek the government's help to do so.<BR/><BR/>I'm against that. How 'bout you?Peter Cresswellhttps://www.blogger.com/profile/10699845031503699181noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-45174467657699184852008-03-28T09:41:00.000+13:002008-03-28T09:41:00.000+13:00Oswald, you said, "People- leave the long, overlon...Oswald, you said, <I>"People- leave the long, overlong posts to the left!<BR/><BR/>If you can't sell the idea in a couple of hundred words- we have lost!"</I><BR/><BR/>Well, ridicule takes only a sentence or two, whereas persuasion usually takes a sentence or two longer.<BR/><BR/>I fear however that length is not synonymous with persuasion. As evidence to this end I offer our friends Falufulu Fisi and Mr Wikiriwhi, whose persuasive powers lie in inverse proportion to the length of their posts.Peter Cresswellhttps://www.blogger.com/profile/10699845031503699181noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-46331401951922832542008-03-28T08:13:00.000+13:002008-03-28T08:13:00.000+13:00LGM makes an excellent point that profits would st...LGM makes an excellent point that profits would start to decline if everything moved to automated trading.<BR/><BR/>The entire premise of automated trading is illogical, as if you can somehow 'turn on the washing machine' and come back later and find you have made millions.<BR/><BR/>Most profits are made through instinct, experience, emotion and timing...a computer programme cannot do that.<BR/><BR/>I often feel sorry for new chums who are told how much money they can make by clicking a couple of buttons on a computer, rather than the more logical training method of 'trial and error', and getting a feel for market trends, and experience.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-63856167175623236222008-03-28T07:29:00.000+13:002008-03-28T07:29:00.000+13:00FFHow about you calm down? No need for the histro...FF<BR/><BR/>How about you calm down? No need for the histronics.<BR/><BR/>For the last two PC posts regarding economics you've raved ad nauseum about "mathematical" modelling for the purpose of auto-trading. There is one big problem; the elephant in the room. In all the raving you fail to seriously discuss economics or demonstrate even a basic understanding of that subject. Sure, you've linked, cut and pasted some interesting articles written by OTHERS. What you have not understood is what they are reporting about. Also, didn't you notice that the warnings regarding limitations and the dangers of the activity you are fixated upon? No? Oh? Guess you missed those bits then. <BR/><BR/>Had you considered YOUR approach to "mathmatical" modelling is really based on a blind faith? It is merely your personal religion and just as misleading as the more conventional variety. <BR/><BR/>Check your premise. Mathematics does not define, control or predict what occurs in reality, just as surely as tea leaves don't. You need to understand the attributes of the entities you are dealing with in order to attempt understanding or forecasting. In this case, you need to sit down and learn about what economics actually is and what it means. All the magic numbers and computers will not help you achieve that.<BR/><BR/>A few simple points:<BR/><BR/>1/. You need to understand at least some economics to undertake the modelling of an economic system. Clearly you do not have this type of fundamental insight. Skills in maths will not compensate for that lack. <BR/><BR/>2/. A model is of limited capability in forecasting what is going to happen in the future when dealing with a social system. Economics is about a society of individual humans. It is a result of applied politics... <BR/><BR/>3/. What your activity is really directed at seeking, is a ticket clipping of existing revenue streams. This is what is known as a "scheme". In this case it is thought worthwhile to seek profits from multiple trading transactions, automatically executed in fractions of a second and intended to exploit small time lags and small price differentials. That is a different proposition from understanding economics or even of economic forecasting. <BR/><BR/>4/. The rise of the auto-trading activity can be expected to see the profits from that activity decline. The reasons range from regulation to attraction of new competition and eventually some spectacular melt-downs (some biggies yet to come). <BR/><BR/>5/. The best definition of what economics actually is was given by Prof George Reisman in the book, Capitalism. You'd do well to read the whole of it in order to strainghten yourself out.<BR/><BR/>6/. You need to learn to read and comprehend what is being pointed out to you. In your hurry to defend your self-worth (as a practioner of mathematics and software development) you are failing to consider what PC and others, including me, are telling you about. So far you have not addressed ANY of the fundamental points raised. <BR/><BR/>7/. Unfortunately you have already been caught in a lie. Von Mises did not alter his views regarding the casting of numbers as a substitute to possession of a real understanding of the subject of economics. Wishing he did does not alter the fact that he didn't. Claiming he did does not alter the fact that he didn't. Building a mathematical model to pretend that he did will not alter the facts either. Think on that.<BR/><BR/><BR/> <BR/>There is more, but this'll do for now. <BR/><BR/>LGM<BR/><BR/><BR/>PS Yes, I have scorn for hucksters promoting their self-perceived cleverness, especially when they posses limited understanding of what they are actually doing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-4570091674160771782008-03-27T20:38:00.000+13:002008-03-27T20:38:00.000+13:00LGM said...Meanwhile, if it is economics you seek ...LGM said...<BR/><I>Meanwhile, if it is economics you seek to understand, then it is important to avoid confusing the subject with trading stocks, bonds, comodities, derivatives or whathaveyou.</I><BR/><BR/>What is your definition of economics that is different from this <A HREF="http://en.wikipedia.org/wiki/Economics" REL="nofollow">economics</A> definition?<BR/><BR/>Is it the definition of Lord Almighty Mises that you adopt? Doesn't it occur to you that economics is a huge field? What I have been describing here on this thread is economics.<BR/><BR/>It seems that you just can't get your head around it. Some disciplines of economics is quantitative and you can spin all you like but that is fact.<BR/><BR/>You're doing wordsmithing again. I think that you have a problem with trying to apply logical deduction & induction too much, that everything that doesn't suit your preconceived ideas must be dismissed since it doesn't fit in with Heiress AynRand or Almighty Mises. <BR/><BR/>you said...<BR/><I>All it'll need to bring in a much more restricted finance and investment climate will be one or two spectacular trading collapses.</I><BR/><BR/>No, this has happened already in 2000 with <A HREF="http://en.wikipedia.org/wiki/Long-Term_Capital_Management" REL="nofollow">Long-Term Capital Management</A>. But as a Physicist from Oxford who quoted that the demise of LTCM doesn't mean that the models are useless, because 99% of the time it is correct, however its the 1% chance that it could fail just happened to occur. The point is, would you use horoscopes to guide your portfolio management, perhaps just stick to your best judgment or use models? <BR/><BR/>you said...<BR/><I>The machines do not really KNOW what is going on just as surely as the geeks who wrote the software don't have a clue about the future either.</I><BR/><BR/>I think that your understanding is fucked. No, one is going to know what's gonna happen tomorrow. Unless you can show me, where in the publications related to market modeling that says that. However a model could only give a rough guide to what will happen. This is not psychic or fortune teller. You're so hooked up in semantics of such words as <I>prediction</I>, <I>forecasting</I>, <I>future projections</I> that you equate them to an ability to see what is going to happen tomorrow, which is completely wrong. In your confusion on word semantics, you might as well tell your accountant at your work to eliminate terms such as sales forecast from his/her monthly financial statements as this might imply that your company foresees the future sales figures? Do you see how fucked is your reasoning is? But I know that you would have no problem with the term <I>forecast</I> being used by your firm's accountant, but you will dismiss it if it is used by financial market quantitative traders.<BR/><BR/>you said...<BR/><I>Astrophysics majors and mathematics puzzlers will continue to proclaim their cleverness. </I><BR/><BR/>Do you have a problem with that? Obviously you do, or perhaps you want them to proclaim that they're dumb?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-85047481290992587902008-03-27T20:11:00.000+13:002008-03-27T20:11:00.000+13:00Lineberry you said it after your meeting at the Bi...Lineberry you said it after your meeting at the Birdcage or something.<BR/><BR/>Remember the NZ trading community is very small. You have shown your ass and lack of understanding of trading on this thread and I hope Libz notice it.<BR/><BR/>Oh and no one phones brokers anymore. They process deals online.Anonymousnoreply@blogger.com