Skjellifetti

Wall Street: Dumb as It Ever Was

The old formulas were based on linear approximations of non-linear phenomena. We simply don't consume the same basket of goods over time and measures of inflation, etc. have to reflect that.

On Nov 06 02:40 PM JeffDB wrote:

> So how exactly does Shadow Stats get things wrong? From their page explaining some of the issues they have with the official government figures, they don't mention sampling errors, or math errors etc. Their contention is that the government, over a number of different administrations has deliberately revamped the formulas themselves to make the numbers look better. Do you dispute this? If so, on what basis? Do you have any hard evidence to back up your contention?

Wall Street: Dumb as It Ever Was

I completely agree. The "I read it on shadowstats so its gotta be true" crowd is getting tiresome.

On Nov 06 10:20 AM American in Paris wrote:

> Shadow Statistics is a bunch of rubbish. I have a background in statistics and am intimately acquainted with how the government samples populations to to form estimates. It's quite solid.

> Shadow Statistics is just one notch above the Conspiracy Theorists.
> Just one short step ....

Charlie Gasparino: Another Crash 'Has to Happen Again'

Calvinist financial prudes are just as obnoxious as the shop 'til you drop crowd. There is nothing wrong with using debt in your personal financial picture. But you do need to know where the sensible limits are.

On Nov 06 12:21 PM Michael Clark wrote:

> Spending money you don't have is immoral and leads to an Armageddon. If you ignore this truth, then the punishment will be even worse the next time.

Why There Can't Be a Cap on Bank Capital Ratios

For someone who is as disparaging of economics as Taleb is, that sure looks a lot like a rather ordinary application of standard economic maximization. Seems like "Risk Engineering" is just economics dressed up in new clothes.

The DJIA's Dangerous Indexing Philosophy

The Fine Print: As Registered Investment Advisors ...

And you just now figured this out?

The Roots of the Coming Crash

Its when you're following the herd that the rattlers are most dangerous. Its the leader that wakes the rattler up. The second guy in line riles him up. The third guy is the one that gets bit.

On Nov 04 05:13 PM Mad Hedge Fund Trader wrote:

> zxb I almost stepped on a rattlesnake last night.

America, The Nanny State

On Nov 02 08:50 AM O-B-WON wrote:

> If only all of the citizens of the United States of America would read and comprehend the above information, we might have a chance to turn "things" around.

We The People have read this kind of diatribe before and We The People have rejected it. You are in the minority. Get over it.

Arianna Huffington: New Media Outlets Must Prove Commitment to Truth

We need both HuffPost and Fox for the simple reason that most of the mainstream journalists have become too lazy to do anything more than simply reprint whatever was in the press releases the politicians and businesses hand out. Did any of the mainstream press do any real digging about, say, the WMDs that the Bush admin claimed were in Iraq before we went to war? Where was the mainstream business press when AIG was buying and selling swaps like they were baseball cards?

Forecaster Gerald Celente: 'There Is No Economic Recovery'

Food riots? Obamageddon? Facism in the U.S.? HAHAHAHAHAHAHAH! The fringe element on the right is certainly good for some laughs!

This article just put M. Prieur du Plessis on the "Not Worth Taking Seriously" list.

The Intrinsic Value of Nothing, Part 1

On Oct 27 12:50 PM jeffgroove wrote:

> The problem with other schools of economic thought is that they assume good intentions on behalf of the people in charge ...

Bzzzt. No school of economics assumes anything of the sort.

The Intrinsic Value of Nothing, Part 1

The Labor Theory of Value was actually first espoused by none other than Adam Smith and is associated with a whole host of early classical economists (Smith, Malthus, and Ricardo) as well as Marx.

"The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people."

-- Wealth of Nations Book 1, chapter V

"The value of any commodity, ... to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities."

-- Wealth of Nations Book 1, chapter V

Most economists today start with utility theory which basically says that individuals have a set of preferences where a larger quantity of a good is preferred to lesser quantities of the same good and preferences are transitive so that if a bundle of goods (A) is preferred to another bundle (B) and B is preferred to still another bundle (C), then A will be preferred to C.

Because people have preferences, goods have value to them even in the absence of exchange because a person can always state whether they prefer one bundle of goods over another (i.e. they value one set of goods over another). In fact, it is downright inane to argue that something has value to you only because someone else finds it valuable as well. This is one of the traps that caused the labor theory of value to be abandoned because they could never quite reconcile the concepts of value in use and value in exchange. Today we do that via supply and demand curves derived from costs of production on the one side and utility theory on the other.

"The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called 'value in use ;' the other, 'value in exchange.' The things which have the greatest value in use have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it."

-- Wealth of Nations Book 1, chapter IV

Real Cause of This Financial Crisis? Global Hunger for Savings Instruments

>Every sort of idiotic expanation is offered by academic economists for the financial crisis. Explaining the crisis has become a major industry. The academics by and large haven’t a clue. Grass might as well grow where their classrooms now stand.

I call shenanigans. Warning about the probable consequences of the structural imbalances caused by Asian's high savings rate has been a cottage industry in academia for years. As Herbert Stein once said: "If something cannot go on forever, it will stop." Too bad that the financial industry refused to listen.

Niall Ferguson: Dollar Is Doomed, U.S. Empire Over

On Oct 21 10:43 AM enigmaman wrote:

>Why are they pushing for Obamacare so strongly when so many questions remain and in spite of the resistance by the populace,

Because the polls show that most of us want health care reform which includes a public option. CNN has the public option at 61% favorable, ABC-WPost has it at 57% favorable.

The Greatest Depression Is Coming

Shadowstats needs to rename itself. I suggest "NonLinear Trends Extrapolated Linearly Forever .com"

On Oct 17 08:33 AM VennData wrote:

> "Shadowstats.com estimates unemployment is above 20%" Oh, I see.
> Than it must be over 20% All those BLS statisticians toiling under
> administration after administration are engaged in one huge conspiracy
> and only one guy at Shadowstats has all the answers.
>
> And you're really collecting some great data to support your "The
> Middle Class is holding on for dear life." meme.
>
> Put the tin foil hat down.

Jim Rogers on the Next 10 Years

On Oct 11 12:06 PM Albertarocks wrote:

> But now for the first time in literally centuries, hegemony is being transferred to a country that is clearly and undoubtedly going to emerge as the leader of the world for the next few centuries.

Yawn. That is exactly what was being said about Japan in the 1980s. Look where they are now. Give it 20 years and we'll be saying the same thing about India.

Doesn't Rogers have a conflict of interest yammering about the virtues of commodities all the time given that he owns one of the indexes? I don't disagree that commodities belong in a diversified portfolio, but only at about the 5% level. Just like everything else, commodities have a tendency to regularly crash and burn and its usually just when you need their diversification benefits the most.