Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
With Earth Day as a backdrop to the concern about use of fossil fuels, Sen. Dianne Feinstein (D. Calif.), said that “until we build the replacements for gasoline…there ought to be a prohibition on market speculation.”
(Source: “US Senators Grow Louder In Call For Oil-Market Probe”, Dow Jones Newswires, 4/23/2008)
UPDATE: Fixed the link. Note that the subtly different WSJ title for this article is, “Democrats Demand Probe Of Oil-Market Speculation”.
Presidential campaign contributions by the executives of some major investment banks.
(via Big Picture)
A fascinating post by Wretchard on the dynamics of public events in the Internet age, and on the ways in which such events are now subject to quantitative analysis of the type that has previously been reserved for quantum systems and securities markets:
Internet storms are emergent events which are difficult to predict. They are like rogue waves on the ocean, arising from the complex interaction between many factors, none in themselves particularly threatening. Yet combined they can suddenly throw up a devastating phenomenon, able to sweep all before it. About all people can do to gain a semblance of influence over emergent events is to shorten their reaction times to events. In the jargon of the trade they must increase the speed of their feedback loops to have any hope of evading the avalanche or deflecting it decisively. Because there is no easy way to predict what direction emergent events will take, the prudent manager must do all he can to detect them while they are building up. A number of methodologies exist to do this. But perhaps the most simple consists of an analyst trained to look at prediction markets, aggregators and sentiment analysis software in ways designed to detect the edge of the storm.
Obama is currently the presidential frontrunner. Note that, on Intrade, the market odds of an economic recession in 2008 are rising in tandem with the odds that Obama will be elected President. Correlation does not prove causation but this correlation is worrisome.
UPDATE: It may not be clear what I mean, since even if Obama were elected he would not take office until 2009, and Intrade’s recession prediction refers to 2008. The point is that the prospect of a President with Obama’s stated values would raise expectations of tax increases and of other economically destructive measures, and such expectations would lead to reduced investment and hiring.
UPDATE 2 (Jan. 9): A rejoinder by Barry Ritholtz is here.
(This blog is an Intrade affiliate.)
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Related: Obama-McCain: Political Inertia Coupling?
Inertia coupling is a phenomenon of high-speed flight in which aircraft control input in one direction leads to unexpected movement in another direction.
McCain is now, per Intrade, the Republican frontrunner, having eclipsed Giuliani and Romney over the past couple of days.
I wonder if his current popularity is in part a function of Obama’s rise in the Iowa caucuses.