Posts Tagged ‘economics profession’

How Did Economists Blow It?

Here’s an insightful article by Mark Sunshine in which he identifies the assumption of fair, free and open markets as a reason that economists blew it. I have less trust than him in the notion that people act rationally and would add the "people act rationally" belief to the flaws of models. A must-read article to read along with this one is Ryan Grim’s Priceless: How The Federal Reserve Bought The Economics Profession.  "Priceless" explains why not only are the markets not free, fair and open, but neither is the economic profession.  – Ilene

How Did Economists Blow It? Part 3 – The Assumed Markets Theory

Courtesy of Mark Sunshine’s The Sunshine Report

economistTwo weekends ago Paul Krugman explained in a New York Times Magazine article that many economists can’t forecast the economy because they have a cultish belief in the nearly always wrong efficient market theory. Mr. Krugman’s solution, an academic exorcism where economists renounce their loyalty to the efficient market theory and swear allegiance to neo-Keynesianism, has created quite a stir in the profession and prompted a number of personal and professional attacks on Mr. Krugman. Unfortunately, both Mr. Krugman and the efficient markets believers are both wrong. The theory is correct but the conditions necessary for the efficient markets theory to work don’t exist. 

Mr. Krugman suggests that economists missed the Great Recession because they relied upon mathematical models that assume the economy is a series of free and efficient markets and therefore a self correcting predictable economic organism. Mr. Krugman proposes “economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly”. Instead, Mr. Krugman’s solution is to substitute Keynesian models for efficient markets models when he states that “Keynesian economics remains the best framework we have for making sense of recessions and depressions”. 

Unfortunately, the usually smart and intuitive Mr. Krugman forgot that for the efficient market theory to work its primary assumption must be true; that the markets are free, fair and open, and that is simply not the case.

Mr. Krugman isn’t alone in assuming and forecasting based upon markets that don’t exist, and then not understanding why forecasting don’t work. Pretty much the entire economics profession plays a game of pretend when they write about markets without checking the most basic real world underlying operational and functional assumptions. 

Economists assume that the U.S. markets are free, fair
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Phil's Favorites

Axie Infinity: online games where people earn as they play are transforming gaming

 

Axie Infinity: online games where people earn as they play are transforming gaming

Welcome to the latest craze in gaming. ira Lichi

Courtesy of Drew Cattanach, University of Westminster

The ultimate point of playing video games has always been to have fun. Whether it’s Space Invaders or Sonic or Red Dead Redemption, you hit the start button and do your thing until game over – and then you probably wipe the sweat off your hands and do it again.

But a new class of games is emerging where playing is an investment opport...



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Zero Hedge

Evacuations Underway As California's Largest Wildfire Spreads 

Courtesy of ZeroHedge View original post here.

California's largest wildfire, the Dixie fire in Butte County, north of Sacramento, has burned more than 192,000 acres as of early Monday after it merged with a smaller blaze, forcing evacuations in several communities, according to the California Department of Forestry and Fire Protection.

So far, 67 homes, mainly log cabins, were burned, and around 2,000 homes were under emergency evacuation orders.

With the Dixie fire quickly spreading, Plumas County Sheriff's Office issued evacuation orders fo...



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Digital Currencies

Is Amazon About To Start Accepting Crypto?

Courtesy of ZeroHedge

For the first time ever, Amazon has shown itself to be interested in crypto with a new major hire within its payments-focused team.

Posted on Thursday, the new role seeks an experienced product leader with expertise in blockchain, central bank digital currencies and cryptocurrencies to “develop the case for the capabilities which should be developed” and drive overall product vision.

The Payments Acceptance & Experience team is seeking an experienced product leader to develop Amazon’s Digital Currency and Blockchain strategy and product roadmap

The Amazon Payment Acceptance & Experie...



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Biotech/COVID-19

US is split between the vaccinated and unvaccinated - and deaths and hospitalizations reflect this divide

 

US is split between the vaccinated and unvaccinated – and deaths and hospitalizations reflect this divide

As coronavirus cases surge, unvaccinated people are accounting for nearly all hospitalizations and deaths. Fat Camera/E+ via Getty Images

Courtesy of Rodney E. Rohde, Texas State University and Ryan McNamara, University of North Carolina at Chapel Hill ...



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Chart School

Investing with Channels - Review

Courtesy of Read the Ticker

The US has a lot of debt, to sell more units of the debt to non US buyers the FED and Treasury must get the unit price of the debt down.

This video assumes a 'risk on' bullish bias into the Nov 2022 US mid terms. The bias assumes a US dollar trending down from it current high price of $93 on the DXY.






Chart 1 - US Dollar Channels


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Chart 2 - Ethereum/USD


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Politics

New York defines illegal firearms use as a 'public nuisance' in bid to pierce gun industry's powerful liability shield

 

New York defines illegal firearms use as a ‘public nuisance’ in bid to pierce gun industry’s powerful liability shield

Illegal gun use is now a public nuisance in New York. AP Photo/Bebeto Matthews

Courtesy of Timothy D. Lytton, Georgia State University

Could calling the illegal use of firearms a “public nuisance” bring an end to the gun industry’s immunity from civil lawsuits? ...



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Promotions

Free Webinar Wednesday: July 7, 1:00 pm EST

 

Don't miss Phil's Webinar on July 7 at 1:00 pm EST. It's FREE and open to all who wish to join.

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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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