Could it be possible that WWI and all the tragedies it spawned hinged on a sandwich? Maybe not.
In the category of “beating a dead horse” we suggest once again that Corporate Profits Estimates Are Too High.
Hmmmm…I can’t remember, did we tell you earnings estimates are too high?
If I borrow £1,000 from you and then, because of spectacular bad luck cannot pay it back, but I come to you and say, “here is £750, can we call it quits?” – that is a controlled default.
If I borrow £1,000 from you and you ring me up and you get directory inquiries in the Dominican Republic – that is an uncontrolled default.
Right now, Greece’s fate hangs in the balance somewhere between these two
Hear ye, hear ye! Comparing dividend yields to 10 year treasury yields to determine how cheap the market is has never made sense, nor empirically has it worked historically to do so. However, if you insist on comparing dividend yields to a government bond yield, it should be 30 year treasuries to get a somewhat similar duration. Better yet, compare dividends to corporate bond yields! Oh, and earnings estimates and corporate profits are too high!
Italy has been downgraded by S&P.
It is actually illegal to send children by mail. One might think such a law would be unnecessary, but that would not be as interesting as the truth.
You know things in Europe are getting tough when beer consumption is heading down.
On the list of men (or women) who changed the world in enormously important ways, but are little known, people should add Keith Tantlinger. He built a box, a particularly important box.
On the question of whether Europe’s issue is a sovereign fiscal crisis or not, Tyler Cowen nails it.
Speaking of Tyler, he favors a carbon tax. He then gives us 11 good reasons why someone might disagree. Unlike most of us, Tyler doesn’t cheat and make his opponents look silly, uninformed or illogical.
- “Our culture encodes a strong bias either to neglect or ignore variation. We tend to focus instead on measures of central tendency, and as a result we make some terrible mistakes, often with considerable practical import.” (Stephen Jay Gould, cited p. 11)
- “Plans based on average assumptions are wrong on average.” (Savage, p. 11)
- “Far better an approximate answer to the right question, which is often vague, than the exact answer to the wrong question, which can always be made precise.” (John W. Tukey, cited p. 38)
- “I have found that teaching probability and statistics is easy. The hard part is getting people to learn the stuff.” (Savage, p. 49)
- “Statisticians often describe a numerical uncertainty using the Red Words, RANDOM VARIABLE, but I will stick with ‘uncertain number.’ …. [S]top thinking of uncertainties as single numbers and begin thinking of them as shapes, or distributions. …. If you think of an uncertain number as a bar graph, you will not be seriously misled.” (Savage, p. 59ff)
- “Joe Berkson, a statistician at the Mayo Clinic, developed his own criterion, which he termed the IOT Test, or Inter Ocular Trauma Test, requiring a graph that hit you between the eyes.” (Savage, p. 325)
I am really looking forward to Ken Burns’ Prohibition