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100 traders, 100 boxes, part deux

So, where were we? Ah yes, yesterday we posed a math conundrum: A hedge fund manager puts 100 traders in a room and instructs them: “On the trading desk, there are 100 boxes. Each box has one of your names. You can go [one at a time] onto the trading desk and open any 50 […]

100 traders, 100 boxes

A math/probability problem I think is awesome and counterintuitive, and may be instructive about financial markets: A hedge fund manager puts 100 traders in a room and instructs them: “On the trading desk, there are 100 boxes. Each box has one of your names. You can go onto the trading desk and open any 50 […]

We make our tools, and then our tools make us

Image via Wikipedia You didn’t change the game, the game changed you. – Niko Bellic, Grand Theft Auto IV Everything that’s already in the world when you’re born is just normal; Anything that gets invented between then and before you turn thirty is incredibly exciting and creative and with any luck you can make a […]

The bottom is always at least 10% below your worst case expectation

Image via Wikipedia ‘Black swan’ is a term which is overused and under-understood. 1) Evolutionary psychology: Humans aren’t very good at math, but especially intuitions about probability, and improbable things happen more often than we expect. 2) Behavioral economics (or evolutionary psychology part deux) – we feel worse about negative outcomes – a small negative […]

What is money?

Cover of Plato As far as the laws of mathematics refer to reality, they are not certain, as far as they are certain, they do not refer to reality. – Albert Einstein This is all Plato’s fault – he founded Western philosophy on a theory of absolute reality, which humans vainly attempt to discern, like […]

6 Reasons Why There Will Be No Chinese Jasmine Revolution

Image via Wikipedia The Chinese government has taken insecurity and paranoia up a notch in the wake of the Jasmine uprisings in the Arab world. They have ‘disappeared’ dissident artist Ai Weiwei and cracked down hard on human rights activists, meddlesome lawyers, and dissidents. That is reason number one there will be no revolution in […]

Questions for Gentle Ben

Image via Wikipedia A question for Ben Bernanke at today’s press conference: • In 2005 at your confirmation hearings, you said there was no housing bubble. • In 2007, you said the subprime fallout was likely to be contained. • In 2008, you said you didn’t expect a recession. • In 2009, you said the […]

Can the US default on its debt?

The S&P rating downgrade was deservedly greeted as a big joke. Can the US default? Technically, the US defaulted twice in the 20th century, when it devalued the dollar against gold in 1933 and when it went off the gold standard completely and officially in 1971. But can a sovereign nation default on domestic fiat […]

From the unthinkable to the inevitable: why the Euro is doomed

Image via Wikipedia The brilliant, provocative, and slightly mad GMU economist and blogger Tyler Cowen wrote his New York Times column about why the Euro zone is headed for breakup. I get the sense an editor read the column, spit out his coffee, and smacked a headline on it that buried the sensational implications, which may […]

Why I am not a libertarian

Image via Wikipedia I have been reading the poor reviews of Atlas Shrugged. I feel almost disappointed that it is by collective consensus a steaming turd. I would welcome a thoughtful movie about an interesting thought experiment, and I think the country could use a rare substantive debate about the size and role of government. […]


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