“Reckless, booming anarchy,” in short, produced fundamental progress. It was not a stable system, racked as it was by bank failures and collapsed business ventures, outrageous speculation and defaulted loans. Yet it was also energetic and inventive, creating permanent economic growth that endured after the froth was blown away. This is Greider describing the 1830’s. […]
Hysteresisia
Surowiecki has an interesting take on the obvious up on his New Yorker blog. And I don’t mean that in a bad way: it seems economists could usefully spend much of their time reviewing the obvious and why it doesn’t fit our overly simplistic economic models. He notes the fact that when stock prices go […]
Low Probability Catastrophes
I was basically writing this exact same thing: economics as a science is a poor excuse for science (hat tip to Kedrosky… again.) Economics is fascinating, because no one knows anything. Greider, in his excellent Secrets of the Temple said, in 1987: The ultimate test for soundness for any science was the ability of its […]
A Bet on Red
Okay, last post for a while on the economy. Macroeconomics fascinates me, mainly because I think it’s about as well-developed as psychohistory, so Monday morning quarterbacking is possible as in no other discipline. But other commentators comment better; if you’re really interested, you’ve found them. This post is simply a long rant aimed at getting […]
Aieeee! Redux
I read today that the market is at its lowest level since 2003. As a percentage of GDP (which calculation has the benefits of automatically adjusting for inflation and actual economic growth) it’s at its lowest level since 1995. I’ve updated the graph to show today’s change as well as focus in on 1982 to […]
Investing in the Real Economy?
I thought this was going to be more comforting than it turned out to be. Although, I have to say that it’s a lot more comforting now that I’ve added today’s market close. GDP and Total Stock Market Capitalization in Real Billions of Dollars This is a lot less comforting. Total Stock Market Capitalization as […]
Output is Welfare
“The US average growth rate of real per capita incomes over the last 190 years has been 1.8% a year, and the same rate over the last 10 years has been…. 1.8% a year.“ (Hat tip to Chris Blattman.)
The Fundamental Impossibility of Banking
I was just reading Nassim Taleb’s claim that with … the costs of the 2007-2008 subprime crisis, the banking system seems to have lost more on risk taking (from the failures of quantitative risk management) than every penny banks ever earned taking risks. And it occurred to me that due to the no arbitrage condition […]
Start a Company. Now.
My fundamental strength as a venture investor is having a clear view of what the future will look like (at least as regards my little niche of the industry.) My fundamental weakness has always been not being entirely sure how we get from where we are today to that future. I suppose there’s a name […]
Spectrum Wants to be Free
You need to read today’s NYTimes Op-Ed by Tim Wu. AMERICANS today spend almost as much on bandwidth — the capacity to move information — as we do on energy. A family of four likely spends several hundred dollars a month on cellphones, cable television and Internet connections, which is about what we spend on […]