Comments for The Aleph Blog

Comment on It Takes Two to Tango by q

Sun, 05 Jul 2009 19:47:37 +0000

yup.

Comment on It Takes Two to Tango by Eddy Elfenbein

Eddy Elfenbein — Sun, 05 Jul 2009 17:24:31 +0000

Bravo!

Comment on Book Review: The Guru Investor by BamBam

BamBam — Thu, 02 Jul 2009 18:56:48 +0000

Thanks for that mention of the AAII screening program. I’d find it interesting if you evaluated some of the commercial stock screening tools available to the individual investor. I considered several a few years ago and came away disappointed that I couldn’t even duplicate fairly simple valuation measures, for example those in Greenblatt’s magic formula.

Comment on Correlation Does Not Imply Causation; A Study of Sector Correlations by David Merkel

David Merkel — Thu, 02 Jul 2009 15:54:10 +0000

I tried. Weekly and monthly smoothing did not materially change the graph.

Comment on Correlation Does Not Imply Causation; A Study of Sector Correlations by q

Thu, 02 Jul 2009 11:17:25 +0000

can you smooth out the bottom graph?

Comment on The Benefits of Dumb Regulation by But What do I Know?

But What do I Know? — Tue, 30 Jun 2009 13:05:54 +0000

Great points, David–I think sometimes the importance of a margin of error, the utility of building an modestly inefficient system is overlooked. Putting some slop into the design is necessary if, as you say, the people regulating it aren’t always the brightest bulbs on the shelf. You have to design a system that even an idiot can run because sooner or later one is going to come along.

In evolutionary terms, the cockroach is an amazingly successful species, but it only knows how to do one thing (or so I’ve read)–flee when it senses air currents. This dumb system has been around for quite awhile. . .

Comment on The Benefits of Dumb Regulation by Steven Milos

Steven Milos — Tue, 30 Jun 2009 11:33:38 +0000

Welcome back David…there’s no place like home!

Steve

Comment on Stating the Case; No State Prosperity, and National Prosperity is Questionable by Greg Feirman

Greg Feirman — Tue, 23 Jun 2009 04:35:18 +0000

I agree that the state tax revenue statistics are very revealing about what’s really going on. I wrote about this last month:

http://www.topgunfp.com/state-tax-receipts-plummetting/

The New York Times had a good front page article on the state budgets today:

http://www.nytimes.com/2009/06/22/us/22states.html?ref=todayspaper

Comment on Stating the Case; No State Prosperity, and National Prosperity is Questionable by David Merkel

David Merkel — Tue, 23 Jun 2009 00:26:22 +0000

Good point, Greg. I have mentioned the political advantage before, but not here. The point bears repeating.

Comment on Stating the Case; No State Prosperity, and National Prosperity is Questionable by Greg

Greg — Mon, 22 Jun 2009 17:17:56 +0000

I think California should be a wake up call to everyone, especially those who favor a larger government.

David neglected to mention there is a HUGE advantage to delaying pension payments. As the first commenter noted — the advantage is political, not economic.

Lots of ink has been spilled about the “incentives problem” in financial companies — investment bankers getting paid to take outsized risks because they get a nice piece of any upside, but essentially no downside.

Government bureaucrats also have major incentives problems. They benefit from oversized budgets. A few of the perks available to members of Congress have made the news, but most of the public is still unaware of just how many things are paid for by lobbyists seeking to gain access. Essentially, Congress’s paycheck is 100% revenue — they have no expenses since everything is paid for by lobbyists or taxpayers (or both)

One might ask why anyone would spend tens of millions to get a job that pays $180K for 6 years (in the House). The answer is the perks far exceed the stated paycheck.

In the 1800s, a bank robber named Willie Sutton was asked, “how come you rob banks?”. Sutton is reported to have replied, “because that is where the money is!”

Why do crooks — sorry politicians– run for office? Because that is where the money is. The biggest industry in our “free market economy” is government. Local, State and Federal government was 31% of GDP as of 2008 (before Obama’s massive expansion). Back in the days of JFK, it was 16% of GDP. Government has grown twice as fast as the economy as a whole.

The bigger government gets, the more opportunity for corruption.

California’s bureaucrats — elected and not elected– now run the state for their own benefit. Anyone who has walked into a DMV knows the headcount is off the charts. Government employee productivity is a oxymoron. Adjusted for productivity (or lack thereof), government employees make far more than anyone in the private sector including CEOs.

The U.S. taxpayer is going to have to start looking out for him/her self, because these bureaucrats no longer even pretend to represent us.