Monthly Archives: November 2014

Karl Denninger is Just Another Doom and Gloom Liberal

Karl Denninger, like Nicolas Nassim Taleb and Peter Schiff, is yet another habitually wrong doom and gloom liberal. Until now, I haven’t written anything about Denninger – one of a handful of leftist, anti-fed pundits who rose to prominence during and after the 2008 financial problem.

How is he liberal you ask? It’s simple. By attacking the fed he’s indirectly advocating the destruction of wealth. Raising interest rates too soon would have the same wealth destroying effects – if not more – as raising taxes and excess regulation. Not only does he advocate wealth destroying ‘end the fed’ policy, he whines about ‘banksters’, blaming them for wealth inequality – as any Huffington Post or New York Times liberal would do. He also denies biological determinism, blaming society’s ills on a handful of targets (Wall St, the fed, rich people, and neocons) versus the other possibility that millions of people are unable to thrive in today’s hyper-competitive economy because they simply aren’t smart enough, not because of a nefarious plot by the rich to keep the little guy down.

Karl is also an inveterate doom and gloomer; like many libs, he believes the world is doomed unless society conforms to his unrealistic, economically destructive wishes. Unlike Steven Pinker, he has no faith in America’s institutions run by smart people, or the free market. Libs seek crisis because they cannot create, and hence accrete inner-strength through the failings of the successful. They, the left, are a misanthropic people.

Karl took credit for creating the Tea Party, only to defect when it began advocating – gasp – Republican values. The Tea Party knows that ending the debt binge and ending the fed are losing issues, so they regurgitate the pro-growth GOP agenda that has proven successful since Reagan: low taxes, free markets and deregulation.

In response to Karl’s article “Your Wealth Was STOLEN” , how would he explain the trillions of dollars of real wealth created in stocks, real estate, and business activity since the market bottom of 2009? Are all the gains in my trading account since 2009 just a hoax? How about Facebook, Ali Baba, the Silicon Valley web 2.0 boom and dozens of other examples of wealth creation and prosperity? Or maybe Karl is just another lib trying to pretend he’s looking out for the best interests of average Americans when, in fact, he’s a pissant who revels in the failure of America and its institutions.

Quasi Barrier Options

Quasi barrier options are used to model how stock and option prices react to announced price floors and ceilings. There is surprisingly little literature about this, so I decided to take matters into my own hands and try to develop the options pricing formulas myself.

Progress thus far

Dealing with the put call parity violation is tricky. For a lower barrier, this can be handled by introducing ‘drift’ to make long term puts worthless, but is a lower barrier the same as risk-free drift? The put call parity for an upper barrier an be handled by introducing a hard to borrow fee.

Slow News Cycle

15 Reasons Why Americans Think We’re Still in a Recession

Some of this sounds like cry me a river. We have to come to terms that in America’s post-2008 hyper-meritocracy a lot of people will be left behind, and there’s nothing we can or should do about it . Stocks will keep going up with no end in sight even as millions of people fall between the cracks.

Until something happens, there will likely be less blogging. In the past two week or so coinciding with the ignominious failings of the administration during America’s Ebola outbreak , the news cycle has pretty much dried up, and we predict the news cycle will remain quiescent until a month or so into the new year. In 2013 we had the IQ wars, the fiscal cliff and the debt ceiling, the former and later which I correctly predicted would be a good buying opportunity for stocks. What we need is for a major intellectual or other public figure outside of sports to make some sort of bold, controversial statement or proclamation that we, as bloggers, can sink our teeth into such as during the IQ wars.