Monday, February 29, 2016

Leap Day, 2016

Moral: Wherein we stop to look at the passing of time.

We started this blog in August 2009. So, this will be our second Leap Day. However, it might be interesting to see what was going during each of those earlier times.
    2009 A year into the 4-year cycle. We started out by looking at basics (such as, Money). We also were making use of earlier posts about Ben's panic. One of our most-read posts was titled "Computation, finance, and engineering" and dealt with important issues that are still needful of attention.

    2012 By now, everyone (of rational age) was looking for some remission of low interest. We got our surprise, as Ben unleashed QE (infinity, some said). Then, he did his lectures (which we started to watch real time; but, it is more fun to do it later, with a pause button). 
As said, lots pending more attention. Too, all of this is coherent over time. We'll persist in laying down new tracks as well as spend some effort in pulling together themes, appropriately.

Remarks: Modified: 03/01/2016

02/29/2016 --

Thursday, February 4, 2016

Cause and effect

Moral: Wherein we start a process of analysis and reconstruction, from a new viewpoint.

In SV (south of SF - coddled lot with starry eyes), we see a growing emphasis on causation. Why? At the same time, one hears a lot of the usefulness of econometrics. That esteemed field is quite careful about using the "cause" word. What gives?

Not only do we hear of causation, as if infinite correlative associations are observed, we see a great emphasis on modeling. But, then, SV is about computers albeit one would hope that some wisdom would arise there.

For instance, what about being a little sensitive to issues related to causation? One example would be the triad of qualification, frame, and ramification that came out of advanced logic. That is, pre-conditions, event, post-conditions are still a gnarly group of things despite the seemingly magical nature related to our displays of prowess.

The Fed has its head in the STEM-sand. So, the analysis would have to pair our predilection to think that silicone reigns.

Now, to the interest rate. The Fed and its ilk need to agree on some floor for interest. It is not zero. Japan's penetration of that (following talks in Europe of the same thing) is wrong for several reasons.

One thing that we could do then, with such a floor, is study liquidity issues. I mean in the sense associated with the analysis of Keynes and others. Elsewhere(What-is-negative-interest-rate-adopted-by-bank-of-Japan), I suggested that we need to identify two groups: gamers and savers. The former are running things (into the ground). The latter are really interested in long-term issues of which a big factor is investment.

Somehow, some (Nash, et al) have caused (there I go - causation is a multi-faceted affair of which we never remove the residue - except via chimeric means) a descent toward perdition, as measured by turbulence.  

How this all works out (Janet's unwinding from Ben's positions) will be something to watch. But, the underlying models and methods are worthy of attention from a different angle. This work is imperatively important.


Disclosure: My degrees in Economics had a focus on Econometrics and the underlying discplines of Mathematics and Statistics. However, I spent my career working real problems in the areas supported by Engineering Computing. Now, I am getting back to the dismal-ness of Economics.

Remarks: Modified: 02/04/2016

02/04/2016 --