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re: What is your outlook on the economy?
Posted on 9/12/14 at 4:52 pm to Doc Fenton
Posted on 9/12/14 at 4:52 pm to Doc Fenton
quote:Agree. Just think your post (and Benny's) could form basis of a decent PTB discussion re:GWB's efforts. (Admittedly, it most likely would degenerate into malignant poo-slinging
Seriously though, I have mostly given up on the political process for domestic economic policies for at least the next 30 years or so
) Would you mind if I copy-paste-quoted them there though?
This post was edited on 9/12/14 at 4:59 pm
1
Posted on 9/12/14 at 5:02 pm to BennyAndTheInkJets
quote:
Why don't you come to the MT anymore Fenton?
I have been preoccupied with a lot of other things the last couple of years, but now I'm at a new job trying to write programs to simulate copula dependence structures to model risk, so it's likely I will get pulled back over here soon.
Posted on 9/12/14 at 5:16 pm to NC_Tigah
quote:
Would you mind if I copy-paste-quoted them there though?
Go ahead.
And since other people are talking about the Fed in here, I guess I'll go ahead and summarize my basic view on that from past debates with B&tIJ and others, even though I don't really have anything new to add:
(1) Regarding my response to the mainstream consensus, I still believe that the Fed gets too much blame for the real estate bubble that I think was started by domestic policies around 1997 or so.
(2) I supported TARP and the immediate actions of Bernanke in 2008, and I still consider him the best Fed chairman ever because of that. Regarding financial crises, I still adhere to the classical view that the best course of action is to simply be decisive about where to draw a line in the sand early in the process. If you dither about where to draw that line, you risk a deflationary cycle that keeps going and going and feeding on itself. If you try to draw the line too widely, you risk a calamitous situation like in Iceland or Ireland. I am worried about current asset levels, but I do not foresee any major financial stability problems in the near-term future.
(3) Regarding my old debates with Benny, I still think that the Fed has been too cautious since 2011, and as a result is risking backing the economy into a sort of Venus-fly trap type of situation where escape velocity will never arrive. That doesn't mean that the Fed is to blame for being the source of the problems. It surely is not. But I would like to see more help from the Fed in terms of taking training wheels off policymakers who are content to continue making bad policies.
Posted on 9/12/14 at 5:23 pm to Doc Fenton
quote:Sounds fascinating, Doc. Though it may not jibe with current goals, that program could be a fantastic aid to individual investors. If you can preserve your rights to the code, very large marketability short/intermediate term in that application. The eventual challenge, especially as applied to an investment firm, is the relationship to a broad market of similarly equipped investors.
copula dependence structures to model risk
Posted on 9/12/14 at 5:30 pm to NC_Tigah
Ironically, I have a really good job right now that was probably created as a direct result of Dodd-Frank legislation being passed, which was a law I opposed.
Yeah, that's the idea. By my nature, I'm not really well suited to being tasked with managing risk, since I'm more of a put-it-all-on-the-line and swing-for-the-fences type of guy. However, if I can get some experience and move into some little niche sector in the hedge fund world, I think that's the move I would like to make in a couple of years.
I am thinking about making a thread on the MT board this weekend about prime brokerage services and getting established as a hedge fund.
quote:
Though it may not jibe with current goals, that program could be a fantastic aid to individual investors.
Yeah, that's the idea. By my nature, I'm not really well suited to being tasked with managing risk, since I'm more of a put-it-all-on-the-line and swing-for-the-fences type of guy. However, if I can get some experience and move into some little niche sector in the hedge fund world, I think that's the move I would like to make in a couple of years.
I am thinking about making a thread on the MT board this weekend about prime brokerage services and getting established as a hedge fund.
This post was edited on 9/12/14 at 5:35 pm
Posted on 9/12/14 at 5:49 pm to BennyAndTheInkJets
quote:
I'm referring primarily to the 2005 DRA
Now that is something you don't hear about very often. Pretty obscure stuff there.
quote:
... Glenn Hubbard was speaking fairly candidly, but apparently the original drafts of this had several cuts to eligibility that would put back of the napkin absolute nominal cuts in the trillions over the decade. ... Extensive eligibility requirements, much more mandatory personal expensing, real cold-hearted shite that is actually needed to make a true dent here. ...
quote:
this really was our only shot during our lifetime.
Yeah, I just don't look at these types of reforms the same way. Austerity style cuts and eligibility changes can't ever work in my view, (1) because they will never pass, and (2) even if they did, they wouldn't really solve the fundamental structural problem of how the programs are designed--i.e., any such cuts will only last as long as it takes for the next politician to come along and reverse them.
Thus, the only reforms that really show up on my radar are those that deal with tax incentives, medical pricing freedom / transparency, or voucherization type policies that spawn whole new cottage industries geared around competing for individual contracts.
But the window of opportunity has likely closed on either set of reforms in any case.
quote:
frick it, markets closed, I'm going to drink.
Good enough. Me too!
Posted on 9/12/14 at 7:30 pm to Doc Fenton
quote:Just a matter of discipline and altering the premise.
I'm more of a put-it-all-on-the-line and swing-for-the-fences type of guy
E.g., envision yourself as a 60-65yr old investor with associated risk tolerances.
No more complicated than that
Posted on 9/14/14 at 4:17 pm to wdhalgren
quote:
Gradual economic recovery.
I'm in this camp.
Posted on 9/15/14 at 11:21 am to Doc Fenton
quote:
(1) because they will never pass, and (2) even if they did, they wouldn't really solve the fundamental structural problem of how the programs are designed--i.e., any such cuts will only last as long as it takes for the next politician to come along and reverse them.
These are both true.
quote:
Thus, the only reforms that really show up on my radar are those that deal with tax incentives, medical pricing freedom / transparency, or voucherization type policies that spawn whole new cottage industries geared around competing for individual contracts.
I agree with you full-heartedly here on every single issue... except the one we're talking about. Not because I don't believe that incentivizing is a better solution than any sort of austere action, but because I believe we were past the window that incentives/privatizations/transparency were possible closed in the 90's. In the late 90's we had budget surpluses yet entitlement spending still increased as a % of the budget and GDP. That was when I gave up hope that we could reform our way out of this the "correct" way. Then we had the very, very slim opportunity with Bush in '05 I referred to that didn't even get started. This is why this is one of the only issues I get irrationally emotional about, because that was likely our last chance at either type of reform that could make a dent.
Unfortunately now, I fear that the below is completely accurate.
quote:
But the window of opportunity has likely closed on either set of reforms in any case.
Posted on 9/15/14 at 11:36 am to Doc Fenton
quote:
That doesn't mean that the Fed is to blame for being the source of the problems. It surely is not.
I missed the last few pages, so I apologize if already stated, but what do you see as the source of the problems? I'll say in advance, that I see the current situation (which I obviously consider perilous from my earlier comments) as having many contributing factors over a long period of time, but I don't see how the federal reserve can be considered blameless.
Posted on 9/17/14 at 10:10 pm to wdhalgren
To make a clumsy and simplistic analogy, monetary policy is like the economy's rudder to prevent it from steering into traps, and all other economic policy is like the economy's motor that does the actual generation of productive growth.
As to what is hindering growth, that is inherently a political question, so without going into too much detail, I will just give a few bullet points:
* minimum wage laws (much more harmful than is commonly realized)
* the system of corporate health care benefits (which is related to minimum wage laws in a broad sense)
* family laws, child support laws, and cultural attitudes regarding children of non-married mothers that give incentives for single-parent households
* high levels of taxation (historically high when combined with state & local taxes) & federal regulation (very high, especially when taking health care costs into account)
* overly strict & burdensome immigration laws, particularly for highly skilled professionals
* an extremely inefficient undergraduate education system for ranking the best prospective entry-level hires
(Note that this is related to the minimum wage laws, and the lack of a good German-style apprentice system in the U.S., meaning that corporations are unwilling to pull their weight when it comes to training workers, since to stay competitive they must now outsource that task to the state, which is a very bad idea.)
As to what is hindering growth, that is inherently a political question, so without going into too much detail, I will just give a few bullet points:
* minimum wage laws (much more harmful than is commonly realized)
* the system of corporate health care benefits (which is related to minimum wage laws in a broad sense)
* family laws, child support laws, and cultural attitudes regarding children of non-married mothers that give incentives for single-parent households
* high levels of taxation (historically high when combined with state & local taxes) & federal regulation (very high, especially when taking health care costs into account)
* overly strict & burdensome immigration laws, particularly for highly skilled professionals
* an extremely inefficient undergraduate education system for ranking the best prospective entry-level hires
(Note that this is related to the minimum wage laws, and the lack of a good German-style apprentice system in the U.S., meaning that corporations are unwilling to pull their weight when it comes to training workers, since to stay competitive they must now outsource that task to the state, which is a very bad idea.)
Posted on 9/17/14 at 10:17 pm to BennyAndTheInkJets
quote:
but because I believe we were past the window
Yeah. Politically speaking, I just want to go to war with Iran, kill Khamenei, and destroy his whole regime, before it's too late and we end up entering a 2nd cold war that will be much more horrific than the first one from 1948-1989. I barely even care about domestic politics anymore.
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