tag:blogger.com,1999:blog-7905515.post198888263696860392..comments2024-03-14T11:09:32.759-05:00Comments on Falkenblog: The Value of The Efficient Market TheoryEric Falkensteinhttp://www.blogger.com/profile/07243687157322033496noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-7905515.post-84486390503660122172009-08-12T19:48:50.326-05:002009-08-12T19:48:50.326-05:00Re: Inflation or Deflation --
Anonymous economist...Re: Inflation or Deflation --<br />Anonymous economist agrees with Eric. There's been a change in psychology towards consumption that will persist for a few years. That's going to mean some excess capacity for the next few years and weak prices. But then it will be forgotten, and the cycle will start all over again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-75193735516887461452009-08-12T12:32:54.852-05:002009-08-12T12:32:54.852-05:00http://www.ritholtz.com/blog/2009/08/six-impossibl...http://www.ritholtz.com/blog/2009/08/six-impossible-things-before-breakfast/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-76412446295407672282009-08-12T09:54:53.568-05:002009-08-12T09:54:53.568-05:00By setting short-term interest rates and/or buying...By setting short-term interest rates and/or buying assets is not a Central Bank simply saying it is smarter than the market. If the short-term interest rate is always "less good" than a market-produced rate shouldn't that produce all sorts of negative outcomes?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-81691343888432024432009-08-12T09:28:26.926-05:002009-08-12T09:28:26.926-05:00"A large amount of management time was spent ..."A large amount of management time was spent discussing something where they had no value as management."<br /><br />Not only do the best mind have little predictive powers, the majority of analysts are going with the flow or concocting their own stories. <br /><br />One solution, is to hedge against what you don't know (interest swap).<br /><br />A very long term solution is to teach to recognize one's cognitive biases in our education system.cityislandernoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-16782324055482191922009-08-12T08:32:59.553-05:002009-08-12T08:32:59.553-05:00I don't see why that follows? A clearinghouse...I don't see why that follows? A clearinghouse of some type is needed for the big banks. If they target a Taylor rule, I don't think that is inconsistent with the EMH.Eric Falkensteinhttps://www.blogger.com/profile/07243687157322033496noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-51036938529096699652009-08-12T08:30:56.826-05:002009-08-12T08:30:56.826-05:00So then I assume you are also against the notion o...So then I assume you are also against the notion of a Central Bank?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-40105489487131177702009-08-12T08:21:31.057-05:002009-08-12T08:21:31.057-05:00I don't see any reference for Smithers presump...I don't see any reference for Smithers presumption that EMH has been proven to have a negative autocorrelation inconsistent with the EMH. I know markets have negative autocorrelation at longer frequencies (3-5 years), but it is extremely weak, not statistically significant. <br /><br />Ivo Welch did a neat out-of-sample test of aggregate stock market predictors, and they did horribly. Hindsight is 20-20.Eric Falkensteinhttps://www.blogger.com/profile/07243687157322033496noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-6968231934994256172009-08-12T06:59:44.746-05:002009-08-12T06:59:44.746-05:00Someone please share this with CongressSomeone please share this with CongressAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-49439508690531047702009-08-11T21:24:10.029-05:002009-08-11T21:24:10.029-05:00Since you frequently have something to say about E...Since you frequently have something to say about EMH, I humbly ask you to comment on this: http://www.economist.com/blogs/freeexchange/2009/08/lucas_roundtable_the_emh_must.cfm. Are you familiar with this literature?jsalvatihttps://www.blogger.com/profile/16509764680257537430noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-70433456355734540012009-08-11T20:11:24.062-05:002009-08-11T20:11:24.062-05:00Heh. I don't advise on such matters, because ...Heh. I don't advise on such matters, because I don't know. I guess like most economists, I think inflation will be very low for the next couple years, but could be very high after that.Eric Falkensteinhttps://www.blogger.com/profile/07243687157322033496noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-58562453302081635332009-08-11T19:21:37.072-05:002009-08-11T19:21:37.072-05:00well, what do you tell your clients now, inflation...well, what do you tell your clients now, inflation or deflation?Anonymousnoreply@blogger.com