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Heads or Tails - The 2013 Coin Toss

edited January 2013 in Off-Topic
FWIW which should be at least a few minutes of your time:


  • Hi Mark,

    I like the analysis of risk management. Huge issue and so important. So many folks don't even think about it. It's not only the probabilities of various outcomes but the results of each of those outcomes.

    So many folks ignore the anticipated payout. If I buy a lotto ticket for $1 with a chance to win the big kahuna - my downside risk is fixed at $1 and my upside potential is huge even though my changes are miniscule. How about if I have the one extra drink at the bar before driving home? What is the payout vs. what is the possible cost if I get pulled over?

    And that brings up our present macroeconomic situation with the CBs rushing to monetize as much of everything as they can. Even though the probability of a complete and total meltdown of our financial system is very small, the consequences should it occur are so dire, that one simply has to take some precautions against it. Anything else is myopic and foolish.

    and so it goes,



  • edited January 2013
    Liked rono's remarks. Mine somewhat different - but on same topic of risk. Human nature being what it us, now that equity markets have risen what?- 100-150% in under 4 years - fund inflows appear to have gone positive. Probably a good time to grow cautious - but human nature is to chase. And, tellin folk to exercise caution is like the preacher poking a head in the door just as the party's gettin really heated. He can suggest cranking down the boombox and puttin away the hundred-proof. But - ya gonna listen?
  • That was an excellent post, Mark. I really appreciated Lance's writing as an sober economist.

    It was instructive that he underlined that our biggest macro challenge is austerity-driven fiscal policy rather than the Fed's reluctantly step up to the plate and trying to compensation for that. Good, too, to see him say that markets are less prone to panic over debt-ceiling blackmail than they were in 2011.

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