Just a couple of weeks in, and already I’m… leaving? True, unfortunately. As I said in my farewell post at ‘The Rogues Gallery’, there are times when circumstances demand that we make choices, and this is one of those times for me.
The short version is that the responsibiliities of my new job are in conflict with my desire to get out and randomly cast my pearls of wisdom before… wait, that’s a bad analogy. The truth is, I love blogging, and I’m grateful to everyone who visited The Long Run Blog in the short time I’ve been here. We’ve had some lively discussion, and I’ve had tremendous fund and learned an awful lot in a very short space of time. Read more »
The much-maligned ‘Efficient Market Hypothesis’ proposes that market prices already incorporate all known information, and that only new information can make prices change, other than in a completely random fashion. There are some problems with this idea, but in the very short term, market participants sure act like it’s true. That’s why they sit huddled in front of screens for every data release, and then furiously trade the market as soon as the data comes out. As a strategist, I always found the flurry to be pretty amusing – just look at how much data there is between this morning (August 26th, 2008) and next Friday’s employment report:
Working on a trading floor can be a lot of fun, not least because traders, marketers, researchers (economists, strategists, whatever) can have, shall we say, somewhat quirky personalities. Even in today’s politically correct HR-monitored environment, there is a constant flow of profanity-laced ‘stream of consciousness-type’ patter. Cliches are legion, with many floor denizens relfexively repeating their favorite Simpsons or South Park quotes. Or Animal House. Or Risky Business, or Wall Street – I once walked past a filing cabinet on which some of short-term financing guys had placed the remains of a couple of boxes of Italian Pastry. I said, to nobody in particular, “Leave the gun. Take the Cannoli.” They laughed way too loudly, and told me I was about the 50th person to say that. Here, in no particular order, are some of my favorites:
I had an exchange with a commenter in the thread after my post about the Fed. Seems he saw a video (the link is in the thread, I don’t really recommend that anyone waste 47 minutes of their valuable time watching the thing) called ‘Money as Debt’ by Paul Grignon, a Canadian gentleman who is all up in arms about the concept of fiat money, especially of the type known as credit money.
Hey! We got an e-mail:
Can you straighten me out on unemployment statistics. I dimly remember a commentary from someone about different versions of the unemployment statistics. The commentator seemed to imply that whatever administration was in charge always picked the version of the statistics that made them look best. Am I remembering this correctly? If we use a consistent measurement for the last 20 years, how does our current unemployment trend look?
Hey, what do you think of this new theme? The old one allowed us to use the lovely artwork created by my 15-year old son, Quinn, but this one is a little clearer and shows the author’s name even in the long version of the post. I’m just trying it out – we might switch back. Growing pains, you know.
In part I, we talked a little bit about what the Fed does, and how it tries to juggle its multiple mandate to safeguard the banking system, achieve the highest level of employment possible, and keep inflation under control.
How about ‘none of the above?’ Of course, there are many people who would pick both, and add a few choice words as well. It is true enough that the founding fathers were very suspicious of central banks, and worked hard to prevent the United States from having one. These days, though, a country without a central bank is like a hockey team without a goalie – it’s not against the rules, but it would lead to some wild action.
The press loves to talk about ‘derivatives’ as if all the evils of the world can be wrapped up in a single word. What’s wrong with Wall Street? Derivatives. Why did you lose your job? Derivatives. Why can’t the Mets bullpen get the job done? Okay, that one’s not about derivatives. I don’t think.
I’ve been asked about feeds… I have added the ‘meta’ widget, which has two feed links called ‘entries RSS’ and ‘comments RSS.’ Click there to subscribe. IE7 users should also have an RSS button on their toolbar, and I think Opera and Firefox users have something similar.
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