tag:blogger.com,1999:blog-1905686568472747305.post8211429250795858035..comments2024-03-22T06:22:08.010+00:00Comments on Stephen Law: Economic quackery: the entirely illusory "skill" of the tradersStephen Lawhttp://www.blogger.com/profile/02167317543994731177noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1905686568472747305.post-26693700397541201292011-11-05T15:09:37.693+00:002011-11-05T15:09:37.693+00:00“Of all the ways of organising banking, the worst ...“Of all the ways of organising banking, the worst is the one we have today. ...eliminating fractional reserve banking explicitly recognizes that the pretence that risk-free deposits can be supported by risky assets is alchemy. To work, financial alchemy requires the implicit support of the tax payer...For a society to base its financial system on alchemy is a poor advertisement for its rationality.”<br />(Mervyn King, 2010, p17)<br /><br />PositiveMoney.org.uk are an organisation worth looking at. They have serious proposals for monetary reformJames Dunnenoreply@blogger.comtag:blogger.com,1999:blog-1905686568472747305.post-40101742126661451712011-11-04T15:38:14.060+00:002011-11-04T15:38:14.060+00:00Interesting article. For a more in-depth look at E...Interesting article. For a more in-depth look at EMH and its relation to overconfident trading gusto, you should read the book Confidence Games, by Mark C. Taylor.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1905686568472747305.post-90242094178704936752011-11-03T16:58:39.923+00:002011-11-03T16:58:39.923+00:00great job! If income correlates so well with prod...great job! If income correlates so well with productivity, then how does society or a specific firm deal with lurking variables such as these?Joseph Wardhttp://makingofaneconomist.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-1905686568472747305.post-88110995152745648482011-10-31T12:07:24.110+00:002011-10-31T12:07:24.110+00:00oops yes. spelling checked.oops yes. spelling checked.Stephen Lawhttps://www.blogger.com/profile/02167317543994731177noreply@blogger.comtag:blogger.com,1999:blog-1905686568472747305.post-4823783859590585572011-10-31T12:05:47.303+00:002011-10-31T12:05:47.303+00:00That's not to say that no one can make money o...That's not to say that no one can make money out of the market. What the EMH says is that any new information about the 'right' level of the market will quickly be picked up, usually by wholesale investors, and the market level will adjust accordingly. By the time the price reaches the person in the street, the retail investor, all the information has been 'discounted'. <br /><br />Thus the market is 'random' to the end-user. This requires a definition of 'randomness' which relative to the information available. Given all the information we have about the FTSE today, i.e. excluding anything that might be future news, there is nothing there that allows us to predict the future direction of the market. What pushes the market is news, and news, by that definition, is random. (If we knew what the news was going to be, it wouldn't be news. A solar eclipse is not news. e.g.).<br /><br />It's actually a very beautiful theory.Edward Ockhamhttps://www.blogger.com/profile/07583379503310147119noreply@blogger.comtag:blogger.com,1999:blog-1905686568472747305.post-42079175111964106862011-10-31T12:03:55.487+00:002011-10-31T12:03:55.487+00:00"Quakery"? Unless you mean to blame econ..."Quakery"? Unless you mean to blame economic ills on the Society of Friends, I think you should correct your spelling.Miles Rindhttps://www.blogger.com/profile/03733605717776262840noreply@blogger.comtag:blogger.com,1999:blog-1905686568472747305.post-73571005344841248642011-10-31T11:58:43.467+00:002011-10-31T11:58:43.467+00:00This has been known for years, and is part of mode...This has been known for years, and is part of modern financial theory. Bachelier first proposed it (in his doctoral thesis) in the early 1900s). The idea was picked up in the 1960s and became the 'efficient market hypothesis'. It has three forms. Probably best to read the Wikipedia article on EMH, which is a reasonable introduction.Edward Ockhamhttps://www.blogger.com/profile/07583379503310147119noreply@blogger.com