He's also currently ranked 2nd in PER right behind LeBron James who by most metrics is the most dominant player in the NBA. PER is a metric for player efficiency adjusted for pace and time played etc. Pretty nuts.
Arbitrage is technically a set of simultaneous transactions where you buy and sell at the same time. Purchasing something and reselling it later for a higher price is not arbitrage.
It is usually used to describe a riskless transaction.
I'm not sure I agree with the description of arbitrage as "riskless". The arbitrageur is accepting the risk that the arbitrage opportunity will go away in between the buy and the sell. This is true whether you're arbitraging salt via caravans across the Sahara or arbitraging currencies in millisecond trades.
It's the idea of simultaneous transactions that makes it riskless. Whether millisecond forex trades can be modeled as "simultaneous" is another question.
If you want to get more precise, the benefit of simultaneous or near simultaneous transactions is reduced risk that prices will fluctuate. Arb is just an exploitation of different prices in different markets.
I'm a huge fan, but professing total ignorance of all things technology reminds me of being in the fourth grade. Luckily for him doing an IAMA on Reddit doesn't involve performing sex acts on a donkey. Seriously, either he's become one of America's most successful standups in spite of his complete naivete, or he's a lot more shrewd than he's making out.
Actually, if I remember correctly from his interview on the WTF podcast, his father is a programmer and Louis was always pretty technologically adept. E.g. he edits his TV show himself on his MacBook.
Misleading intro to article. The expansion of credit was not due to over ambitious politicans who wanted homeownership for the poor. It was fueled by lax accounting and regulatory standards which expanded private securitizations of mortgages (did not involve freddie and fannie). This generated money which went into legislator pockets though.
It is true that subprime products gave politicians something good to speak to poor constituants about but credit standards were never allowed to drop very far for the federal agencies (other than FHA/VA etc) and their marketshare of mortgage bond issuance dropped as a result.
Despite being a highly regulated industry too little govt involvement in key spots was a primary cause of the bubble not too much.
I also am not entirely sure how swapping beer for mortgages makes the situation easier to digest.
Your article had a lot more credibility before you came up with this comment : The vast majority of RMBS and CDO-of-RMBS losses have nothing to do with the government.
Your story would have been even better if you included the necessary element of how the repayment characteristics of selling beer to unemployed people on credit were better than the interest rate they would pay. Because, as a foundation to these securities, the banks (based on flawed rating agency analysis) believed that the subprime mortgages would pay back.
If the banks had had a better understanding of how past performance (subprime mortgage payers in the 1990s) was no indicator of the future (people in 2005 buying investment properties to flip, based on the theory that property prices would increase at 4% p.a. forever), then they would have lost so much money that they required bailing out.
The major post-crash failure of government (IMHO) is that they didn't take large equity stakes in the banks, and prevent them from making obnoxious bonus announcements.
freddie and fannie started issuing "subprime" loans in the 90s, to lower income and minority borrowers with reasonable default rates. by the time the boom came around their marketshare in this market plummeted because everybody else dropped their standards (the garbage was to be somebody elses problem anyways) and their marketshare dropped. the growth in subprime during the bubble period had little to do with them.
they are currently the garbage bilge where junk loans are deposited, but that is by design to protect housing prices.
they were not a huge area of growth when housing overheated, subprime or otherwise.
Simply false. The garbage was usually your own problem, the AAA tranch was sold to someone else. This is what took down Lehman, for example. BNC Mortgage (owned by Lehman) made bad loans, Lehman sold off the AAA tranches while holding the riskier tranches for themselves.
Originators underwrote the mortgages who usually sold them to banks who packaged them into bonds. Later on to streamline this process the banks bought mortgage originators (lehman bought bnc) because their appetite for product was huge.
But originally the loans were passed onto somebody else (and most private label issuance by notional balance was in fact not held by either originator nor the underwriter/ibank). It was a method of breaking out credit risk (the borrower risk was separated from originator risk) and seen as a feature. Really it was the whole point of securitization -- to get bankruptcy remoteness for credit products.
Originate to securatize is now seen as a problem because it does not give the originator an incentive to make good, proper loans (which is already tough to do). We dont know if credit standards and checking would have become so lax without the securtization machine during 1998-2007 but it seems unlikely.
Just to be clear. I think you're arguing that it was failures in both policies (government backed loan programs that made money cheap) and oversight (no one was properly overseeing the whole mess).
If that's what your saying.. I would completely agree. There were so many moving parts in this and we needed ALL of them to fail for catastrophe.
because private label mortgage issuance shut down. over 90 pct of mortgage origination are now agency. this includes all refis which rolls crap out of private label onto the govt sheets. we went from investors loaning money to the taxpayer and this is a subtle method of bailing out the fin industry. no way fin instutions would have paid back any govt loans without this help and its a convenient place to sweep away the losses.
also prime mortgages from the bubble years got hammered and of course that hurt them.
because private label mortgage issuance shut down. over 90 pct of mortgage origination are now agency.
Interesting - it's as if the private sector has figured out that maybe fewer mortgages should be issued until we come up with better underwriting standards.
Fannie/Freddie are now taking taxpayer dollars to continue issuing mortgages that the private sector considers too risky.
Clearly, Fannie/Freddie are paragons of underwriting and would never issue bad loans.
also prime mortgages from the bubble years got hammered and of course that hurt them.
Wait, Fannie/Freddie made bad loans and assigned them the label "prime"? They clearly had nothing to do with the mortgage mess whatsoever.
Well, without them to pick up the slack we would have almost NO mortgages issued in this country, which some of us might think is bad. The alternative would be for rates to rise (some of us might think this is a good thing, which it might be) and to allow housing prices to fall. This has many knock on effects like crippling pension funds and banks and insurance companies etc etc.
I find it horrible that guilty parties profited/are profiting from their mistakes. But its a complicated problem which is why we are going to go through hell to fix it.
FWIW I this does not excuse govt behavior, which leans far far too much in the way of banker cronyism, which might have been the original point of the article. I am just pointing out that its a complicated situation that is a mess to sort out.
Also I never stated that fre/frn never made bad loans and were not players in this whole debacle. I just stated that they were not the main engine of horrific growth and the "cause" of all of these problems.
This is completely wrong. Credit standards not only dropped dramatically at Freddie/Fannie, but they drove the decline elsewhere. Causality is clear: Private banks issued loans that they knew that Freddie/Fannie would securitized; as the government agencies decided they'd buy crap, the private banks provided it. (For crying out loud, the government agencies CREATED the subprime market.)
In actuality, about half the bubble has been directly traced to the lowering of underwriting standards by Fannie/Freddie, which in turn was directly caused by....a desire to provide home ownership for the poor.
It would be sort of sad for programmers to not know who Drucker was, since he's the guy who coined the term "knowledge worker" to name the class of job roles that encompasses programmers (and also a large percentage of the people who use computers and software in the business world).
Aside from being a guy who played fast and loose with facts and was awarded a medal by a president who couldn't be bothered with facts, what solid contribution did this Drucker guy make to the art and science of programming?
Public institutions generate revenue from patents as well. All in all not a bad system as long as the revenue flows to more research. A cut is taken along the way usually so that private business expertise can help the sales & marketing process.
A friend tells me that for PDFs, the way to go is a Nook Color, which can be rooted to run Android, which has a good PDF reader. New it's $250 (which is what he has), refurbs are available for $180 from Barnes & Noble:
The total direct and indirect cost of CVD and stroke in the
United States for 2009 is estimated at $475.3 billion. This figure includes health expenditures (direct costs, which include the cost of physicians and other professionals, hospital and nursing home services, prescribed medications, home health care, and other medical durables) and lost productivity resulting from morbidity and mortality (indirect costs). Total hospital costs (inpatients, outpatients, and emergency department patients) projected forthe year 2009 are estimated to be $150.1 billion. ... CVD costs more than any other diagnostic group.
They wait until late friday to make big changes to give the officaldom/industry a weekend to scramble/grab parachutes. They actually didnt release today until after the SPY stopped trading.
http://insider.espn.go.com/nba/hollinger/statistics?&act...