5 ms·
As the article makes a point of mentioning Angela Merkel... > All this is true. Yet Mrs Merkel seems to lack a sense of urgency. Despite the world’s calls for
by harryf 15y ago
As the article makes a point of mentioning Angela Merkel...
> All this is true. Yet Mrs Merkel seems to lack a sense of urgency. Despite the world’s calls for action, she does not believe in bold strokes—be it letting Greece default, or issuing Eurobonds to mutualise governments’ debt. Only a slow, step-by-step approach will work. In other words, the pain, austerity and market turmoil will go on for the foreseeable future.
...it's worth pointing out, by comparison to other world leaders, Angela Merkel has a PhD in Physics (Quantum Chemistry in fact). In other words she's more than capable to grasping the complexities of financial markets.
Much as it annoys Anglo-Saxons, Mrs Merkel might be right.
- athoma 15y agoCompletely agree. There is a step by step process that must occur.
- zerostar07 15y agoOthers will jump in to say that markets are not predictable like chemical bonds, but i would counter-argue that they should be more predictable and less fear-and-rumour-driven
- yequalsx 15y agoA great quote from Galbraith is appropriate here. "The markets can stay irrational a lot longer than you can stay solvent." I don't know exactly what you mean by should but whether or not fear and rumor should drive markets the fact remains that they do sometimes drive markets.
- gahahaha 15y agoThe quote is not by Galbraith but Lord Keynes. Still true, tho'.
- harryf 15y agoWell quantum physics has this at it's core - http://en.wikipedia.org/wiki/Uncertainty_principle http://en.wikipedia.org/wiki/Uncertainty_principle I'm not saying it's directly applicable but the anyone who has grasped it, should be capable of understanding market effects as well.
- zerostar07 15y agoThe uncertainty principle results in indeterminacy, not unpredictability. You still have an expected outcome.
- Uchikoma 15y agoYou also have an expected outcome with Greece: Either it will default or not. I think your point sound clever but is not. Either the cat is dead or it isn't. Or was it Greece?
- zerostar07 15y agoThe consensus is that greece will default, the time is uncertain though
- Uchikoma 15y agoThen I don't understand your comment above.
- HSO 15y agoI have no doubt she is intelligent, experienced, and has good intentions. But to make the simple connection from physics background, decades away, to today's financial markets and economies strikes me as rather bold. You need to have thought about things, and you can't (unfortunately) just read a couple of books or articles to "learn" this subject. You are aware how the economics profession as a whole performed over the last few decades? EDIT: Just recently, I was complaining to a friend that I am thinking about markets and economics now for almost ten years, one way or another, and I am still just speechless sometimes, asking myself wtf is going on or what does this mean etc. I feel there are many things that I still don't seem to get on a deeper, fundamental level. And I like to think I'm not so stupid either. So, I can fully imagine how tough it must be to get into a situation where you actually need to make a call with real consequences for millions of people, for many years to come, on the basis of very, very limited information. Frankly, I feel a sense of history might be of more help to someone in this position than a physics background.
- harryf 15y agoAgreed. But to me she doesn't need to be a subject expect on financial markets. My point was her education has trained to be able to understand models of complex environments. I'd argue that gives her better chance of actually understanding what her financial experts are telling her.
- onemoreact 15y agoEconomics and Quantum Chemistry accually have a lot in common. They are both looking for mathematical shortcuts / models for highly complex systems and use similar tools. So sure reading a few book is not going to give you an in depth understanding of economics, but being able to look at the math and call Bull !@#$ is invaluable. EX: It is generally accepted that money is created when a bank creates a loan, however, you can make also make a similar argument that it's only when banks fail that new money is created. Both are in some ways true, but the second is actually a more useful when looking at what happens when the economy takes a real dip, because the banks created IOU's not money, but the FED get's to create money to replace those IOU's. That's not to say Economics is easy, lacks depth, or had no concrete progress. However, there is a wide range of models out there and evaluating there relative merits in the short and long term during such complex times takes deep analytic insight.
- hugh3 15y agoit's worth pointing out, by comparison to other world leaders, Angela Merkel has a PhD in Physics (Quantum Chemistry in fact). In other words she's more than capable to grasping the complexities of financial markets. I also have a PhD in quantum chemistry, and I don't think this in itself qualifies me to understand economics any better than anyone else. Actually there was an interesting article on the subject of why smart people so often make really bad politicians. The tldr: "So why do intelligent people consistently make such a hash of things? Because they are smart enough to talk themselves into anything. Ordinary mortals don’t engage in fancy mental gymnastics to reach conclusions that defy common sense. But intellectuals are particularly prone to this." http://reason.com/archives/2011/10/04/why-smart-presidents-do-stupid http://reason.com/archives/2011/10/04/why-smart-presidents-d...
- morsch 15y agoBecause they are smart enough to talk themselves into anything. Ordinary mortals don’t engage in fancy mental gymnastics to reach conclusions that defy common sense. But intellectuals are particularly prone to this. Huh? Citation needed. For both of those claims. Actually, three claims: 1) Intelligent people talk themselves into anything. 2) That is why they make a hash of things. 3) Ordinary people do not engage in mental gymnastics to reach conclusions that defy common sense. Also, which is it, intellectuals or intelligent people?
- Confusion 15y agoNobody grasps the complexities of financial markets. Everyone is just along for the ride. If anyone grasped the complexities, they would either be able to solve the current mess or be able to tell it is unsolvable. Instead, everyone is handwaving, guessing and trying whatever ridiculous thing they can to keep the system from collapsing. There are a few that have found how to profit from what's going on: not because they understand how the system in general works, but because they understand some minor parts a bit better than others.