2 ms·

On Goldman Sachs let's agree, to disagree. I'll just post a couple of links which will enhance my conspiracy theories: [1] How Paulson Gave Goldman the Lehman

by atmosx 13y ago

On Goldman Sachs let's agree, to disagree. I'll just post a couple of links which will enhance my conspiracy theories: [1] How Paulson Gave Goldman the Lehman Heads-Up [2] The Great American Bubble Machine [3] The Joy of Sachs - P. Krugman (Stiglitz has also commented on this) You are confusing finance with economics (in general) here but even in finance the entire establishment is based in some kind of universal rationality and auto-regulation when clearly that's not the case. Moody's should be out of business (along with the other 2 rating agencies) for giving triple A's to Lehman a couple of minutes before the collapse went public. Why are they still in business? The market apparently didn't hammer them :-) ... Can you give a sample of a pure economic theory applied in any section of finance? I see pure math there, and a lot of inside trading and not economic theories... [1] http://economistsview.typepad.com/economistsview/2009/10/how-paulson-gave-goldman-the-lehman-headsup.html http://economistsview.typepad.com/economistsview/2009/10/how... [2] http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405 http://www.rollingstone.com/politics/news/the-great-american... [3] http://www.nytimes.com/2009/07/17/opinion/17krugman.html?_r=2&partner=rssnyt&emc=rss& http://www.nytimes.com/2009/07/17/opinion/17krugman.html?_r=...

Mikeb85 13y ago
Finance relates to economics the same way consumer behaviour relates to investing. I'm not talking about abuse of the system, or trading. I know HN likes to talk about HFT (understandably so, lots of math and technology) and finance conspiracies and inside trading, but those are relatively minor in the grand scheme of things. Steven A Cohen's firm is getting dismantled, and life goes on. How economics relates is this: where I decide to put my money (and I DO invest my personal funds) depends on what's happening in the world at large. Do I invest on the HKSE, or in Tokyo, the NYSE or the Bourse de Paris? Do I invest in bonds, equities, or hold cash? Do I buy commodities, and if so, what? Do I want to bother with physical commodities, or futures? Etc... Deciding where to put money requires us to build a coherent model of what's going on in the world. What is household debt, what is GDP growth, what are interest rates and inflation likely to move to? What is the prospect for firms in the US vs. China vs. Africa? What are the prospects for consumer spending? This is all economics. After forming that view, then you can look at financial details. Valuations, company balances, technical indicators, etc... I could go on, but needless to say, anyone who ever allocates capital anywhere should have, if not an understanding of economics, at the very least an economic model of their market/the world... BTW, here's a job posting list from the American Economic Association. http://www.aeaweb.org/joe/listings.php http://www.aeaweb.org/joe/listings.php You'll see alot of job postings for banks and commercial enterprises (Amazon is looking for an economist!).

by atmosx 13y ago

Mikeb85 13y ago

Finance relates to economics the same way consumer behaviour relates to investing. I'm not talking about abuse of the system, or trading. I know HN likes to talk about HFT (understandably so, lots of math and technology) and finance conspiracies and inside trading, but those are relatively minor in the grand scheme of things. Steven A Cohen's firm is getting dismantled, and life goes on. How economics relates is this: where I decide to put my money (and I DO invest my personal funds) depends on what's happening in the world at large. Do I invest on the HKSE, or in Tokyo, the NYSE or the Bourse de Paris? Do I invest in bonds, equities, or hold cash? Do I buy commodities, and if so, what? Do I want to bother with physical commodities, or futures? Etc... Deciding where to put money requires us to build a coherent model of what's going on in the world. What is household debt, what is GDP growth, what are interest rates and inflation likely to move to? What is the prospect for firms in the US vs. China vs. Africa? What are the prospects for consumer spending? This is all economics. After forming that view, then you can look at financial details. Valuations, company balances, technical indicators, etc... I could go on, but needless to say, anyone who ever allocates capital anywhere should have, if not an understanding of economics, at the very least an economic model of their market/the world... BTW, here's a job posting list from the American Economic Association. http://www.aeaweb.org/joe/listings.php http://www.aeaweb.org/joe/listings.php You'll see alot of job postings for banks and commercial enterprises (Amazon is looking for an economist!).