Mystery Economic Theatre 2013

[Batalov]

A statistician to another statistician:
-- Does this assumption make my posterior look too large?

.

[kladner]

Originally Posted by Batalov

A statistician to another statistician:
-- Does this assumption make my posterior look too large?.

ROFL!!!!! (Well, a genuine LOL anyway!)

[cheesehead]

Jason, I'm sorry I didn't notice this sooner:

Originally Posted by jasong

Did you know Republicans are more likely to laugh at stuff that parodies their point of view than Democrats in a similar situation?

There's "laugh at" and then there's "learn from".

[kladner]

Originally Posted by ewmayer

Don't know to what extent such self-flattery extends to other aspects of life. Perhaps analogously with driverdom, "90% of people believe they have a sold grasp of statistics"?

Most people think that they are really great in bed. Of course, this is really annoying to those of us who really are. (H/T to Only Human, I think.)

[chalsall]

Originally Posted by ewmayer

A reader - we'll just refer to him as "A reader" - just asked me about the recent wild run-up in share price of Tesla motors.

In your opinion...

Is the ability to "short" a stock or a currency a good thing?

Or a bad thing?

[chalsall]

Originally Posted by ewmayer

Good, because it allows price-skepticism to be explicitly expressed (by way of contrast to the "this thing is overpriced - so I simply won't buy it" choice which would be the only one, absent options).

A classic "The Economist" response.

Now, how does one who owns shares (or currency) stop shorting?

[chalsall]

Originally Posted by ewmayer

The free-market (that is, strictly hypothetical, since there ain't no semblance of such a thing anymore) way of doing that is to prove the shorters wrong about the stock and cause them to lose their money. I know, it sounds crazy...

Theoretically, a "shorter" could lose an infinite amount of money.

Somehow, they never do....

[chalsall]

Originally Posted by ewmayer

Last fiddled with by ewmayer on 29 May 13 at 22:39 Reason: No, they can only have their puts expire worthless ... 100% < oo

Could I please ask that the "supermods" not do tricks like this?

If you have something to say, say it in a manner which everyone is alerted to.

[cheesehead]

{OT}

Originally Posted by chalsall

Theoretically, a "shorter" could lose an infinite amount of money.

Somehow, they never do....

... in real life.

But Hollywood Stock Exchange (hsx.com) implemented a version of shorting that does allow the shorter to lose more than 100% (though still not infinite). In such a case, the shorted security, when covered (forced at expiration, or voluntarily earlier), returns a negative amount of "HSX money" to the holder, reducing his/her net worth.

[chalsall]

Originally Posted by cheesehead

But Hollywood Stock Exchange (hsx.com) implemented a version of shorting that does allow the shorter to lose more than 100% (though still not infinite).

Sorry.

Too much BS. And a "ticker tape" at the bottom of the screen is so, like, yesteryear. That's what 'bots are for.

[kladner]

Short Futures or Options: These are really for sophisticated investors. In the case of futures, you can lose more than your initial investment. Something else: if you do not offset your contract, you will get actual delivery of the commodity. So what can you do with 5,000 ounces of silver?

My partner worked for a commodities broker for more than 20 years. I was always intensely confused by acrobatics like the above. However, I have always been delighted by some of the proverbs I heard of from that line of business. To wit-

He who sells what isn't his'n
Must buy it back or go to prison.

I only wish that this was truly the case with these high rollers, especially when the "commodities" are bizarre financial instruments which have the potential for crashing the economy, as well as chiseling hundreds of billions out of the taxpayers.

EDIT: Source for opening quote: http://investorplace.com/2011/05/3-w...t-commodities/
I have no idea of the reliability of this source, but it provided a reasonably pithy description.