Dr. Keynes Was Right

It's the Distribution, Stupid
NOVEMBER 19, 2014 8:49AM

A Dirty Little Secret [update]

The quants operate, oft times unknown to themselves, based on a dirty little secret.  "What might that be", called from the Peanut Gallery??  The notion that the risk-free, inflation-free interest rate is equal to homo economicus' "rate of time preference", i.e. homo econ will lend you one… Read full post »

NOVEMBER 18, 2014 12:22PM

Make It a Double

When I was growing up there were three categories of lushes:  the crude drank bourbon, the smooth drank scotch, and the sissies drank screwdrivers (so Mom couldn't tell; she still could, of course).  Seems to be still the case.

There's been a push, and some pushback, for artisinal bourbons.&… Read full post »

NOVEMBER 13, 2014 12:39PM


It appears to be an article of faith, among the New Age capitalists such as Jobs/Cook of Apple fame, that one need only target the few, at a high price, to be success in business (without, of course, really trying).  In other words, as you learned in Econ. 101, demand is… Read full post »

NOVEMBER 12, 2014 7:49PM

What Are The Odds?

The initial title was going to be something like, "Marty McFly is Grounded", since the subject is Matt Martoma, and yes, it's a bit of a stretch for an allusive pun.

Mathew Martoma, a former portfolio manager at billionaire Steven A. Cohen's SAC Capital Advisors LP hedge fund, on Wednesday lost… Read full post »
NOVEMBER 7, 2014 1:56PM

Just A Taste

One of the continuing themes of these endeavors is that quant isn't always the best guide to the future; moreover, the data which is ground, finely, through the mill stones isn't always understood for what it is.  This is particularly vexing for the macros in the crowd.  The micro folks ten… Read full post »

NOVEMBER 1, 2014 1:13PM

Time Loves a Hero

Well they say time loves a hero
But only time will tell
If he's real, he's a legend from heaven
If he ain't he was sent here from hell
-- Barrere, Payne, Gradney (from "Time Loves A Hero", Little Feat)

Yesterday was a bit different, schedule wise, in that this is deemed to be a Windy… Read full post »

OCTOBER 26, 2014 11:39AM

You Don't Have to Believe Me

Recent musings, motivated by continued discontinuity between real world finance time series and micros/quants insistence on predicting past the data, have been devoted to this problem.  The world is not linear (Dr. McElhone), and is mostly driven by incentive modifications rather than historical… Read full post »

OCTOBER 16, 2014 9:07PM

One Life to Live

It was raining cats and dogs this morning here in South Fireplug, CT (although not nearly what my beloved, yet benighted, Bermuda faces tomorrow), so I postponed my daily stroll to get the dead trees NYT and a cuppa joe until it let up.  In the meantime, I spent some time… Read full post »

OCTOBER 11, 2014 10:22PM

I Have No Interest in You, Anymore

Regular reader should recall that I've been pestering the macros, micros, and quants (especially those who're in love with time series) about The Giant Pool of Money, corporate moolah hoards, the limits of knowledge (once you know the Laws of Nature, there's little left to discover), and such. … Read full post »

With its usual panache`, the Sunday NYT has more on-point material for the macros, micros, and quants than one short blog can reasonably deal with.  I'll limit myself to two pieces, which share a minor thread.

First, is the situation with container ships.  This a full page and a half on the… Read full post »

OCTOBER 1, 2014 2:02PM

Birds of a Feather, And All That

Steven Davidoff Solomon makes a run at corporate boards in his piece on Darden Restaurants, today.  He closes the piece with:

Absent a last-minute, face-saving compromise, the likelihood of a full-scale ouster raises the glaring question: Why would the board pointlessly and perhaps foolishly inv… Read full post »
SEPTEMBER 24, 2014 9:52AM

Welcome Back Gumby

Some time back, I predicted that the flip phone would rise, Phoenix like, from the mire of smartphone muck.  These 5+ inch behemoths just won't work very well.  Some curved screens have appeared, but now we get word that the 6/6+ are spontaneously bending.  I told you so.  There a… Read full post »

SEPTEMBER 15, 2014 4:05PM

Up The Down Staircase

I'm not a fan of David Stockman, to say the least.  But recent punditry on the subject of interest rates, asset prices, and bubbles led me to the obvious question:  is it true, as it appears, and in the data; that corporations (that is to say, their capital allocators) are executing… Read full post »

SEPTEMBER 5, 2014 12:41PM

Alice In Wall Street

Financial engineers, despite their pronouncements of math/stat/coding wizardry, are really just some truffle pigs and cockroaches.  The truffle pigs snuffle in the ground, generally around trees in deep parts of the forest, for the scent of the black truffle.  A valuable fungus, that black… Read full post »

AUGUST 28, 2014 12:51PM

Reservations for ... 8 billion??

Quite recently, in various versions of these endeavors, there was an essay dealing with the Old Gold vs. New Gold situation.  Not for the first time.

The hidden truth:  the country with the reserve currency of the global economy will always, in fact must, run trade deficits.  Think abo… Read full post »
AUGUST 24, 2014 5:31PM

The Poor Will Always Be Us

The environs of Washington, DC are widely excoriated by The Right as being the bastion of Liberal Evil.  Not least, the disparity of median income there being higher than most, if not all depending on the year measured, of the rest of the country.  Having lived there for the better part… Read full post »

AUGUST 21, 2014 12:41PM

Peter, Peter Pumpkin Eater

I've never been a fan of the Austrian schools, just because they're by, for, and of the .1%.  There's not much good for an entire economy in that.  In looking for data to confirm, or refute, the notion that the Captains of Industry are just playing financial engineering games with all… Read full post »

AUGUST 19, 2014 2:30PM

Between Roxbury, CT and a Hard Place

Ah, to be a Googler (or spend enough time there to know about all of its nooks and crannies):  Google Correlate powers a lengthy (the summer long?) analysis by David Leonhardt, et al of searches by the rich and the poor.  Rich and poor, in this instance, being a bespoke index.

The… Read full post »

AUGUST 17, 2014 12:49PM

An Open Letter to Dr. Shiller [update]

In today's Times Business section, Robert Shiller gives his take on stocks, specifically the question:  are they priced too high?  He titles the piece (dead trees version), "The Mystery of Lofty Elevations".  The web title is similar.

Note, of course the use of the word 'mystery'. … Read full post »

AUGUST 7, 2014 2:23PM

Sovaldi Sings Iago

For those who aren't up on Shakespeare and Rossini, Iago is a bad guy.  A really bad guy.  Sovaldi, according to some (and a growing count, by most accounts), is the archetype of Big Pharma profiteering; taking money from the many to give to the few for little or no real… Read full post »

AUGUST 6, 2014 3:26PM

Big Fish, Little Fish

The NYT DealB%k has an interesting piece from one of the regulars on the Big Fish eating the Little Fish in the cloistered world of the innterTubes.  But Solomon leaves out the lede, as they say in the pubbiz:  these Big Fish ain't really conglomerates.

The paradox is that conglomerates out… Read full post »
JULY 25, 2014 12:15PM

If It's Friday, This Must Be Krugman

Well, not this time.  He's needling the right wingnuts about various chimera, as usual.  No, but today's Business Section of the Times is full of belly laugh quotes, many of the subjects chronicled here in past missives.

Let's start with Amazon's stool dump.  As opined here in the past,… Read full post »

JULY 22, 2014 2:11PM

I Still Hate Neil Irwin

The morning, during the week, begins with a reading of briefing.com, via Yahoo! Finance, then a toddle off to the newstand for The Times and thence to the coffee place to inhale both.  Most often, these toddles involve creating the rough draft of one of these missives.  Since I don't put… Read full post »

JULY 22, 2014 12:31PM

They're Still Freedom Fries

The missives in these endeavors generally aren't reactionary to other posts out in the blogosphere; that behavior is mostly directed to news organs (I'm talking to you, Irwin).  But today brings a reference post to a post, on the subject of income inequality.  In this case, Tour de France w… Read full post »

By now y'all have heard about the Yellen remark that small cap biotech is over-valued:

Valuation metrics in some sectors do appear substantially stretched -- particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such fir… Read full post »