Sweden became a "constitutional monarchy". i.e. like the UK. Then, like many countries in the early part of the century, "socialist democrats" gained more power, but through the regular political process.
This paper this is structured finance and has nothing to do with the validity or "behavioral" (math illiterate) economists "argument".
The assumption is a correlation of default rates. The Copula used by Li is a Gaussian distribution function. Copula models, by using them and claiming it was valid (when it wasn't), it was by this modeling structure which allowed "assessment" of mortgage default rates to be reduced. This is the fundamental issue, residential mortgage default rates do not conform to Guassian distributions or even uniform distributions. See Copula and please click the link. I think once one sees this is actually a mathematical formula, a model, it becomes clear Li's model in in the realm of advanced mathematics and has little to do with "data points" (which are assuredly misunderstood in the first place, it's really regions of convergence) of "equilibrium". This is advanced statistics, mathematical modeling and has zero to do with some absurd argument about the realities of equilibrium versus mathematical models used by economists.
It is even worse that Li chose to use as gamma in his formula CDS data but the Copula itself, assumption a simplistic uniform joint probability is not valid.
But this is not a matter of "market's know all that's needed to be known" issue...
The formulation of a mathematical model, especially in this case does not even have any "data" in it initially.
the issue is the Copula itself based on a Gaussian distribution model in addition to a simple joint cross correlation probability model.
In other words, the model itself is simply not valid. One cannot break down to a scalar through this method the probability of Bob defaulting given that Betty Joe defaulted. It simply is not a Gaussian distribution.
I wrote about this earlier but this is frankly advanced probability distributing modeling that is used in structured finance as well as actuarial science and in this case...well, his assumptions are obviously not valid.
I seem to remember reading about the King of Sweden sending loggers to the Pacific Northwest as late as the 1870s. Which would kind of indicate they still had feudalism at that point.
Looks like the infamous Nordic/Swedish capitalism is actually a post-WWII construct.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
The efficient market hypothesis is not sufficient for the assumptions required to collapse a copula to a scalr ... but in this context, it is necessary. Fail to assume the efficient market hypothesis, and there is no way to meet the assumptions.
That does not, of course, imply that the efficient market hypothesis on its own is enough to get you there ... there are additional heroic leaps of faith required.
I've been trying to get him out of office for years. The guy is a worthless corporate panderer. I'll never understand why he has been re-elected so much but hopefully this will be his last term.
He signifies everything that is wrong with this country.
but it needs to be said. Common, when you see high quality "good brains" on blogs like that which may not have the readership of EP, invite them to come over and even cross post. There are a lot of people out there, with very good minds, with a financial education as well, trying to write about this but due to the "architecture" of the blogs, sometimes they do not get the readers they deserve or get the interaction they deserve.
I was just reading this article 1/2 hour ago. Nice charts too. I especially like the description of the OGSGS Team's Keynesian dilemma of continuing to pour in trillions to save the financial sector from its own perfidy.
Meanwhile there are various reports surfacing that 17 regional banks plus (no surprise here) Citigroup and BoA need "more capital".
They are just blood sucking the U.S. taxpayer for these friggin' banks while the real economy is still clearly going down.
Usually unemployment is a lagging indicator but we need to do an analysis on this because of this super high unemployment rates. I am suspecting this will be a vortex of economic malaise for the middle class has already been sucked dry.
I feel like the United States has blood sucking spiders all over it.
How old is the Nordic/Swedish form of capitalism? It is very different than "American" capitalism. A focus on standard of living and focus on making money. Obviously, I am oversimplifying it.
Do you know off-hand? Otherwise I could look it up.
Nothing has been done to this point to indicate that policy makers understand that we have to change our economy. We cannot protect the financial oligarch and expect to change the system after they have been strengthened with taxpayer dollars.
They are getting taxpayer money through the front door and back door. We are people going to wake up to this huge transfer of wealth.
legislative regulatory proposal. It certainly won't do anything from preventing "too big to fail" institutions. It addresses monitoring risk but that is a joke considering the fallibility or potential ideology of regulators.
The Obama Administration is fighting re-establish the status quo.
I'm not sure if the term regulatorycaptures what is happening.
These people are simply doing exactly what the Zombie banks, power elite want, so they are assuredly captured as in puppet masters of an inane mentality, not based in what is best for the nation, the taxpayer, the economy.
But regulatory? That seems to imply they would be interested in putting some serious regulation in place and from what I can tell to date, it appears all policies are about feeding every last dime to these various financial institutions and people who are really running the nation and anything in the national interest be damned.
NDD, your call out made me think we should do a new series....
maybe too "Bill O" but I sift through idiotic, corporate press kit, or politically motivated rewritten not factual garbage every week in the MSM.
Maybe we need a weekly call out for being an idiot on some of these articles.
I seriously believe alot of journals cannot or will not do their own homework and considering the state of media these days (I think they are not making a hell of a lot of money perhaps?) maybe that's the reason.
Or maybe it's that the sense of ethics so ingrained in some of us older folk are just thrown out the window.
We actually studied "Limits to Growth" in a college class for engineers called "Ethics of Engineering"- a required course for any engineering degree at OIT. That and the Tacoma Narrows were pounded into our heads as why good mathematics and good engineering always needs to consider *all* the evidence- not just the limited objective evidence scientists use to produce their theories, because you never know when something like wind harmonics is going to blow down your bridge.
Part of the reason I'm here is an attempt to figure out why bankers don't seem to have the same level of ethics as are required of engineers.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
I see you posting here quite a bit. I hope you will create an account (right hand column) and join us. When you create an account all sorts of features appear and the "typing of the letters to prove you are a human" disappear. All contributions can be instantly posted. (i.e. it's all way easier).
On Japan with negative interest rates, even a blog post on those events with some details and the consequence would make an incredible blog post.
It sure does appear the Obama administration/Federal Reserve is not interested in the least about learning lessons from the past.
and we probably need to do some site promotion. Seems like suddenly in the last 7 days readers have dropped.
I tried to warn people during the primaries about Obama's policies and ties and at that time, you risked getting "troll rated" off of the boards (didn't happen to me but then I stayed out of the weeds).
But the fact the New York Times wrote up such an expose, with multimedia to boot, someone there is trying to do their job, I'd claim.
Sweden became a "constitutional monarchy". i.e. like the UK. Then, like many countries in the early part of the century, "socialist democrats" gained more power, but through the regular political process.
This paper this is structured finance and has nothing to do with the validity or "behavioral" (math illiterate) economists "argument".
The assumption is a correlation of default rates. The Copula used by Li is a Gaussian distribution function. Copula models, by using them and claiming it was valid (when it wasn't), it was by this modeling structure which allowed "assessment" of mortgage default rates to be reduced. This is the fundamental issue, residential mortgage default rates do not conform to Guassian distributions or even uniform distributions. See Copula and please click the link. I think once one sees this is actually a mathematical formula, a model, it becomes clear Li's model in in the realm of advanced mathematics and has little to do with "data points" (which are assuredly misunderstood in the first place, it's really regions of convergence) of "equilibrium". This is advanced statistics, mathematical modeling and has zero to do with some absurd argument about the realities of equilibrium versus mathematical models used by economists.
It is even worse that Li chose to use as gamma in his formula CDS data but the Copula itself, assumption a simplistic uniform joint probability is not valid.
But this is not a matter of "market's know all that's needed to be known" issue...
The formulation of a mathematical model, especially in this case does not even have any "data" in it initially.
the issue is the Copula itself based on a Gaussian distribution model in addition to a simple joint cross correlation probability model.
In other words, the model itself is simply not valid. One cannot break down to a scalar through this method the probability of Bob defaulting given that Betty Joe defaulted. It simply is not a Gaussian distribution.
I wrote about this earlier but this is frankly advanced probability distributing modeling that is used in structured finance as well as actuarial science and in this case...well, his assumptions are obviously not valid.
I seem to remember reading about the King of Sweden sending loggers to the Pacific Northwest as late as the 1870s. Which would kind of indicate they still had feudalism at that point.
Looks like the infamous Nordic/Swedish capitalism is actually a post-WWII construct.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
The efficient market hypothesis is not sufficient for the assumptions required to collapse a copula to a scalr ... but in this context, it is necessary. Fail to assume the efficient market hypothesis, and there is no way to meet the assumptions.
That does not, of course, imply that the efficient market hypothesis on its own is enough to get you there ... there are additional heroic leaps of faith required.
I've been trying to get him out of office for years. The guy is a worthless corporate panderer. I'll never understand why he has been re-elected so much but hopefully this will be his last term.
He signifies everything that is wrong with this country.
but it needs to be said. Common, when you see high quality "good brains" on blogs like that which may not have the readership of EP, invite them to come over and even cross post. There are a lot of people out there, with very good minds, with a financial education as well, trying to write about this but due to the "architecture" of the blogs, sometimes they do not get the readers they deserve or get the interaction they deserve.
I was just reading this article 1/2 hour ago. Nice charts too. I especially like the description of the OGSGS Team's Keynesian dilemma of continuing to pour in trillions to save the financial sector from its own perfidy.
end of the semester, and I really want to look through the year of year changes in sectoral employment at the state level.
The numbers are interesting.
Look at New York. Despite the dire warnings about the collapse of the financial markets, employment in that sector is only down 2.8% or 19,800 jobs.
Compare this to Michigan, where manufacturing employment has dropped by 66,600, or 11.9% since October 2008.
Something seems seriously wrong here.
Government aid needs to be directed to the sectors of the economy most seriously affected by the downturn.
Meanwhile there are various reports surfacing that 17 regional banks plus (no surprise here) Citigroup and BoA need "more capital".
They are just blood sucking the U.S. taxpayer for these friggin' banks while the real economy is still clearly going down.
Usually unemployment is a lagging indicator but we need to do an analysis on this because of this super high unemployment rates. I am suspecting this will be a vortex of economic malaise for the middle class has already been sucked dry.
I feel like the United States has blood sucking spiders all over it.
How old is the Nordic/Swedish form of capitalism? It is very different than "American" capitalism. A focus on standard of living and focus on making money. Obviously, I am oversimplifying it.
Do you know off-hand? Otherwise I could look it up.
And that's feudalism with a healthy dose of religious belief in noblese oblige.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
Nothing has been done to this point to indicate that policy makers understand that we have to change our economy. We cannot protect the financial oligarch and expect to change the system after they have been strengthened with taxpayer dollars.
They are getting taxpayer money through the front door and back door. We are people going to wake up to this huge transfer of wealth.
legislative regulatory proposal. It certainly won't do anything from preventing "too big to fail" institutions. It addresses monitoring risk but that is a joke considering the fallibility or potential ideology of regulators.
The Obama Administration is fighting re-establish the status quo.
I'm not sure if the term regulatory captures what is happening.
These people are simply doing exactly what the Zombie banks, power elite want, so they are assuredly captured as in puppet masters of an inane mentality, not based in what is best for the nation, the taxpayer, the economy.
But regulatory? That seems to imply they would be interested in putting some serious regulation in place and from what I can tell to date, it appears all policies are about feeding every last dime to these various financial institutions and people who are really running the nation and anything in the national interest be damned.
NDD, your call out made me think we should do a new series....
maybe too "Bill O" but I sift through idiotic, corporate press kit, or politically motivated rewritten not factual garbage every week in the MSM.
Maybe we need a weekly call out for being an idiot on some of these articles.
I seriously believe alot of journals cannot or will not do their own homework and considering the state of media these days (I think they are not making a hell of a lot of money perhaps?) maybe that's the reason.
Or maybe it's that the sense of ethics so ingrained in some of us older folk are just thrown out the window.
That is one hell of a coincidence if you ask me!
So far it seems that the Zombie banks are just telling what they want...and plain getting it.
We actually studied "Limits to Growth" in a college class for engineers called "Ethics of Engineering"- a required course for any engineering degree at OIT. That and the Tacoma Narrows were pounded into our heads as why good mathematics and good engineering always needs to consider *all* the evidence- not just the limited objective evidence scientists use to produce their theories, because you never know when something like wind harmonics is going to blow down your bridge.
Part of the reason I'm here is an attempt to figure out why bankers don't seem to have the same level of ethics as are required of engineers.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
I see you posting here quite a bit. I hope you will create an account (right hand column) and join us. When you create an account all sorts of features appear and the "typing of the letters to prove you are a human" disappear. All contributions can be instantly posted. (i.e. it's all way easier).
On Japan with negative interest rates, even a blog post on those events with some details and the consequence would make an incredible blog post.
It sure does appear the Obama administration/Federal Reserve is not interested in the least about learning lessons from the past.
argument of the deflation side when the FED is going to create/lend money at -5% interest.
It has always been about class warfare.
and we probably need to do some site promotion. Seems like suddenly in the last 7 days readers have dropped.
I tried to warn people during the primaries about Obama's policies and ties and at that time, you risked getting "troll rated" off of the boards (didn't happen to me but then I stayed out of the weeds).
But the fact the New York Times wrote up such an expose, with multimedia to boot, someone there is trying to do their job, I'd claim.
Looks like Geithner is the new Rumsfeld.
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