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market anomalies

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Deleted by topic administrator 04-30-2010 08:00 AM
09:45 PM ET (US)
Hello moder!
  Messages 53-48 deleted by author between 07-23-2006 02:06 AM and 07-21-2006 09:00 AM
Jonathan Vos Post
01:45 PM ET (US)
I mostly agree with Mr. Stross and daen. First, universal free public primary education was a triumph specifically of the Scottish Enlightenment, which other countries following that lead in mutated ways. Second, not all social evolution is progress, with the Stross example being on-target, and the American paradox of the best colleges being all but 3 of the top 20 worldwide by one recent metric, while the mean American higher education quality has plummeted towards bankruptcy-equivalent. Third, I have seen at least the USA figures for the expected increase in future earnings for given levels of higher education. Fourth, some specific schools actually publish the figures for their own alumni. Fifth, to the extent that there is a difference between a prior expected future income and Bayesian expectation given attainment of a given degree and/or from a particular institution, there should be room for arbitrage. Sixth: the present value argument is absolutely correct. Seventh: the David Bowie and Rod Stewart examples were known to me; I am wondering how to generalize this to, say, winners of prizes that are good predictors of future Nobel prizes, or the MacArthur fellowships, or the Field Medal. Eighth, how to combine Black-Scholes with social network theory? Ninth, Mr.Stross is one one the leading explorers of the dotcom business model paradigm to futurism, science fiction, and Fantasy, and I appreciate his indulgence in allowing this subthread.
01:21 PM ET (US)
Students should be allowed to sell Futures in their career earnings
All sorts of weird problems and possibilities arise from this. First, do you really mean "futures"? More likely you mean the net present value of future expected income and cumulative asset value of the individual. This gives you a nice figure to conjure with. Musicians like David Bowie and Rod Stewart have created a new class of bond, the "Bowie Bond" (http://www.bowiewonderworld.com/bowienews/news0399.htm), but these bonds commoditise the known value of an existing back catalogue. Closer to the concept is some kind of swap, but the problem here is that pricing swaps relies on having a very tight (and calculable) arbitrage relationship with the forward and forward forward markets (or having a proxy equivalent which you can calculate forward/forward forward rates from, like FRAs for interest rate/currency swaps), something which I can't quite see how you'd construct around an individual's future income.
Edited 10-09-2005 01:21 PM
Charlie StrossPerson was signed in when posted
06:31 PM ET (US)
... And I believe in unlimited higher education, free at the point of delivery, which is how the UK system used to work before Thatcher sodomized it. (Hint: with progressive income tax, and higher earnings for graduates, they eventually pay for it.)
Jonathan Vos Post
05:20 PM ET (US)
Students should be allowed to sell Futures in their career earnings, to finance education and personal infrastructure. If they do well, they can buy back shares in their own futures. Otherwise, they remain answerable to their stockholders. This gets government out of the education business, which they have botched in many countries. I wrote a draft SF story about a grad student on the moon doing crummy work at the behest of her stockholders. I believe in stock markets, for very complicated reasons, yet: "trust, but verify."
Charlie StrossPerson was signed in when posted
04:09 PM ET (US)
Martyn: I resent you associating the name of an innocent science fiction convention with that bunch of scam artists!

So how'd you go about re-arranging capitalism to work better -- ban public share issues but permit companies to issue interest-bearing bonds to raise capital?

Me, I'm beginning to think that the pursuit of efficiency as a social goal is not only orthogonal to the pursuit of happiness -- it may be actively detrimental. But that's another argument.
Martyn Taylor
03:53 PM ET (US)
I could talk/write for ever about the movement of service provision over the last 20 years or so, but I think you go into such a discussion ignoring the effect of stock markets at the peril of coming to a realistic conclusion.

As someone who used to be there and do investment, as well as offshore banking, I see no utility in stock markets. They are institutions for gambling on second hand shares using other people's money, and the insiders ALWAYS take their handful off the top (spot the music quote), and they always have more than one place to go (there's another), while their brothers and their cousins . . . oh, stop, this is getting silly . . . in government protect them because they are given a little taste, thereby binding them into the conspiracy ('cos that's what it is) And these are the same men in expensive suits who demand ever increasing profits from the people who actually make things and provide services people want so the share price can be kept up (the thrust behind the just in time philosophy)

Want an illustriation. Worldcon (such an appropriate term, 'cos that's what it was once the moneymen and the share options took over) and Enron. The two biggest thefts of all time (other than the theft of the North American continent, but that's a whole other can of worms) The collapse of the American stockmarket caused by the collapse of 2 - count them 2 - companies that didn't amount to very much at all in the 'real' world of telecommunications is what has sharpened the minds of politicians all over the world, who now recognise the term 'pension crisis'. Even Dubya thinks its real, so it must be. Think back. Which notable politician freely admitted shredding documents vital to the Enron investigation? Dick Cheney. He of Halliburton. Dubya's minder. You think he invaded Iraq to get rid of a dictator? You must be simple. Think of the special prosecutors they sicced on the last guy for nothing at all, and here you have involvement in the biggest theft of all time that has taken money out of the pockets of millions (and some of them must have been registered Republican voters), but who will feel the collar of the Vice (such an appropriate word) President when the company is at war.

Rant over.
James Nicoll
10:55 AM ET (US)
" [...] the move by the big US oil companies to shut excess oil refinery capacity in the 1990s and move to a just in time model has given us the first real large-scale demonstration that just-in-time logistic systems are very brittle and can be broken by relatively predictable spikes in demand or once-a-decade problems."

9/11 demonstrated that to every company relying on moving stuff across the US/Canadian border quickly. Of course, that complication probably didn't make the world press.
10:22 AM ET (US)
The question is, how many industries and organizations learned their lessons from Katrina and Rita? Form surveying the media, none.
I suspect one more big disaster and the phrase "just in time inventory" will become a curse on everyone's lips.
05:25 AM ET (US)
Sumitomo lost a resin plant in the eighties. Screwed up the DRAM business because it made eighty percent of the low alpha emission resin (you don't want to know) so the DRAM makers had to switch from 1 megabit to 4 megabit chips to stretch out the DRAM and there was both higher prices and lower profits at once.
Something like that can happen again, but not in the semiconductor business because they learned their lesson and won't get caught like that again.
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