According to the SEC Flash Crash report 86% of securities traded 10% lower during the May 6th flash crash with some shares trading down to $.01 (see page 26 of SEC report). The US Equity market is valued at roughly $15 trillion. The Flash crash was a temporary $1.0 trillion accident.
1. In complex systems "more" is different
A single share's transaction & →…read more
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 trillion normal accident: flash crash">Leave a comment  Finance & Economics, Technology  Finance & Economics, Technology  This is a summary of an excellent and clear report put out by Elizabeth Warren chair of the Congressional oversight panel. Warren is a refreshingly honest and clear voice among the politicking, greed and fear mongering that surrounds this historically defining issue. The report is a 190 page turner for me (under employed hedgie / consultant). Here is a video highlighting what →…read more A lot of systems get out of hand due to feedback loops, whereby the inputs of something end up getting amplified by a system and then increase the input again. Biology, finance and other complex system fail when a system goes haywire and self amplifies exponentially. There isn’t a good language for graphic feedback story telling outside of the systems thinking world. →…read more I will let the pictures do the talking, fiscal reality meets physical realty. My opinions on why this is happening and how much farther it could go. Price declines 10-18%, Sales Declines of $+6 billion, listing discounts increasing to greater than +10%, average days on the market increasing over 175 days, you get the picture and with Job losses increasing →…read more Anthropomorphizing things is an innate human trait. Here is a comic from the Abstruse Goose comic site. If you liked math and science in school, you will probably enjoy →…read more Arguably the world's most successful and well known short seller, Jim Chanos has some strong opinions on China's urban real estate bubble. Regardless of your opinion on the matter, his debate and argument is worthwhile watching in regards to macro China. In regards to China, I have deep concerns and am nervous about the global ramifications of a half awakened giant →…read more Checklists are not sexy, but their results are. I just finished the Checklist Manifesto by Atul Gawande. I am sold and you should be as well. Checklists save lives, make money and make life less stressful. Outperformance seems to be associated with repeat process and efficient group communication. Checklists allow for managing individual and team processes for better outcomes. The book gives →…read more
Leapfrog delivers financial products to the bottom of the pyramid. Disclosure, Andy used to work in the same office I did in New York. I think and hope he is onto something big. Being able to believe, act and live long term are some of the keys to sustained development. Insurance allows for more →…read more Farnam street may be the best econoblog you never heard of. Farnam Street's emphasis on common sense, ethics and behaviour is fantastic and highly educational. Here is the latest find, see video below. For the record, I am a bigger fan of Hayek, but both are more schools of philosphy than arbiters of a true science. Keynes stimulus is nice in theory →…read more I believe efficient and recognized property rights to land etc. are one of the keys to sustainable economic development. Hernando de Soto puts forth the case for property rights very well and has aided in the registration of hundreds of thousands if not million of homes that were dead capital. I put de Soto as an odds on favorite for a →…read more |
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