Readers & Thinkers: Ronald Coase Dies.
Dear Readers & Thinkers, As most of you know, Ronald Coase, passed away this week on September 2, 2013. I still remember my undergraduate Law & Economics class and the wide application of the Coase Theorem. Some thoughts about Coase: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/04/the-coase-theorem-is-widely-cited-in-economics-ronald-coase-hated-it/ http://legacy.suntimes.com/obituaries/chicagosuntimes/obituary.aspx?n=ronald-coase&pid=166781771#fbLoggedOut http://www.law.uchicago.edu/faculty/coase The Simple Coase...
read moreReaders & Thinkers: The Paul Samuelson Memorial
Dear All- This past weekend, I flew to Boston to go to Paul Samuelson’s memorial. Here is a brief summary of the events. First, there were lots of cool characters there, like Solow, Larry Summers, Paul Krugman, Jim Poterba, Larry Samuelson, Ed Phelps, Stan Fischer, Ricardo Cabellero, Amarta Sen, Olivier Blanchard, Robert Merton, Richard Zeckhauser, Stephen Ross, Greg Mankiw, Robert Mundell, and a few others. From some of the conversations and speeches I learned more about discovery and progress and about the great Paul Samuelson. Larry...
read moreReaders & Thinkers: The 1970 Nobel Dies
Dear All- On December 13, 2009, Paul Samuelson died in Massachusetts. Paul was the second Nobel Laureate in economics and a giant in the field. I knew something was not quite right when his secretary told me last week that the interview that we had planned could not be held. This made me sad. I had planned to interview Paul at MIT this semester, but I waited too long. I wanted to ask Paul so many things. For one, I wanted to ask him what he thought of the new developments in economics, and in particular, what he thought was missing from a...
read moreReaders & Thinkers: A Nobel Knight Dies
Dear All- Sir Clive Granger died this week at the age of 74. He was known as an econometrician and wrote many wonderful papers to help economists understand the world better. One of his most important pieces was the “Granger-Causality” test. This was very useful to help economists determine if one variable that was correlated with another variable might also cause this variable to occur. Statistically, it tried to determine if one variable preceded another variable in time to infer statistical causation. He also worked on a...
read moreReaders & Thinkers: Say It Isn’t So!
Dear All, Looks like after all that fuss over the bill, it didn’t do much for our financial markets. In my last email on September 19, 2008, I said the best thing you could do is get your kids a short in consumer stocks for Christmas and so far had you short something like XLY (an ETF you can short, but actually is long the consumer retail stocks), you would have made 17% through today. How has history treated investors in “similar circumstances”? If your investment horizon is longer than 7 years, it has been better to hold on to...
read moreReaders & Thinkers: 228 Wasted Resources
Dear All- On Monday, I was shocked and appalled by the House rejection of a bill to support America’s financial system. These people do virtually nothing all year round and the one time they have to do something useful, they blow it. Here are the names of 228 people that you should consider not reelecting (http://www.nytimes.com/ref/washington/ROLLCALL.html?currentChamber=house¤tSession=2¤tCongress=110¤tRoll=674). These 228 people need to get a Starbucks coffee and sniff really really hard before going back to...
read moreReaders & Thinkers: Caveat Emptor
Dear All- The steps the United States take in the coming weeks are very important in a number of ways. I cannot begin to stress that Congress should be very careful. Some very broad rules that might help Congress with their decisions. (1) Do not give Paulson a blank check. He is a former Goldman partner with most likely some restricted Goldman shares in a blind trust (according to limited the information I have, he sold most of his GS shares worth around $500M and diversified his holdings). He has a strong conflict of interest regardless of...
read moreReaders & Thinkers: The New Third World
Dear All- Welcome to the United States first steps towards becoming a third world country (aka emerging economy). The SEC has banned short trading on 799 financial stocks. Does this remind you of the Malaysian prime minister that everyone called crazy? And now they are going to rescue all of the banks that have bad loans by creating a special fund that could require purchasing up to $2Trillion in dirty mortgages. And just wait until we get some more sassy inflation to go with it. MY BASIC REACTIONS (1) Overall, halting trading until they...
read more
