Saturday, January 31, 2015

Virtual firms

David Morris – Aeon speaks about virtual firms:

"Imagine, for instance, a bike-rental system administered by a DAC hosted across hundreds or thousands of different computers in its home city. The DAC would handle the day-to-day management of bikes and payments, following parameters laid down by a group of founders. Those hosting the management programme would be paid in the system’s own cryptocurrency – let’s call it BikeCoin. That currency could be used to rent bikes – in fact, it would be required to, and would derive its value on exchanges such as BitShares from the demand for local bike rentals."

The firms manage themselves and optimise their performance.  I need to understand more about biitcoin to understand this. This is the management in bunny slippers.

Friday, January 30, 2015

“Microfoundations” ain’t so microfounded

Bull Market and microfoundations:  fundamental right but does he miss the fact that these are supposed to be simplifying models?  The multiple layers of agency may be impossible to model.  Then you are left with a story.

 "And that tractable composite of all the principal and agent problems in the whole economy — what’s it going to look like? Well, it’s going to look like an “animal spirits”, from a classic Keynesian model, or one of Roger Farmer’s. We know that all the different levels of game theory interactions do sort of work out in the real economy, because investment behaviour does take place. But we also know that they’re subject to fairly wide swings and overreactions."

'via Blog this'

Monday, January 19, 2015

The eurozone: A strained bond -

The eurozone: A strained bond - The opposition to ECB policy in Germany.

"The German media are likely to be hostile. Commentators tend to criticise the ECB, sometimes virulently, with the financial weekly WirtschaftsWoche condemning low interest rates as a “diktat from a new Banca d’Italia, based in Frankfurt” — a reference to Mr Draghi’s Italian citizenship.
An ECB charm offensive has seen the usually media-shy president give interviews to German media. But PR will not win the day just yet. Marcel Fratzscher, head of the DIW think-tank and a former ECB official, says: “ A big majority of economists and journalists won’t like [QE]. Very few will support it.”"

'via Blog this'

Saturday, January 17, 2015

Background on technical analysis and technical trading

Scan for chart patterns software - Quantitative Finance Stack Exchange:

"Is there any software out there that currently would allow you to scan historical charts and look for a specific pattern and then show you that pattern for a list of stocks. Google finance and yahoo finance have all the charting data needed to visually detect certain patterns, but I was wondering if there was software out that I could define a particular pattern and then it would show me a bunch of real world examples of that pattern by scanning a dump of symbols. Does any such software exist or something to do something similar to this? I actually have a custom pattern I want to scan (that or I do not yet know the name of it) Not really sure how to word this but I am thinking of having it scan the recent behavior of a stock and then to scan a list of symbols for that pattern but historically back in time, not the present."

There are a lot of links to web sites, blogs and papers that will seek to find some quantitative trading techniques.

Tuesday, January 13, 2015

Heat Death: Venture Capital in the 1980s

Heat Death: Venture Capital in the 1980s: The importance of credit.

"The history repeats itself crowd thinks that that there must be a bubble sooner or later. “Now?” they constantly ask, “Is it a bubble now?” as if history has to repeat whatever was most memorable about the last time. History may repeat itself, but there’s an awful lot of history that this particular venture capital cycle could repeat. Below is a short history of venture capital in the 1980s, my interpretation and comparison to the ’90s and today, and some thoughts about what that means. It’s long. If you’re attention-deprived, skip to ‘1980s v. 1990s’, about four-fifths of the way down."

Inflation is always and everywhere a monetary phenomenon.  Not  just in the price of goods and services but also in assets.  This also affects the performance of financial services companies.  With more credits, the companies have an easier time.   Venture capital and private equity are a big beneficiary of that.

Friday, January 09, 2015

Uncertainty and disagreement

Liberty Street Economics (US Fed research blog) examines the difference between uncertainty and disagreement.

"Uncertainty is of considerable interest for understanding the behavior of individuals as well as the movements in key macroeconomic and financial variables. Despite its importance, direct measures of uncertainty aren’t widely available. Because of this data limitation, a common practice is to use survey-based measures of forecast dispersion—reflecting disagreement among respondents—to proxy for uncertainty. Is this a reliable practice? Here, we review the distinction between disagreement and uncertainty as concepts, and show that this conceptual distinction carries over to their empirical counterparts, suggesting that disagreement is not generally a good proxy for uncertainty. "