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Politics : Bush-The Mastermind behind 9/11? -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (10049)	2/17/2005 7:18:38 PM
From: LPS5	Read Replies (1) \| Respond to of 20039

The sort of common sense that most humans develop by the age of 10. Evidently not, at least to the extent that your line contains the words "most" and, indeed, the clause "by the age of 10." Message 21056754 Now: in the party of whose intellectual company do you think I'd rather be included - yours, or Dr. Eagar's? I'll give you three guesses. It's hard to understand how you can be so articulate and so completely dense at the same time. Is it still difficult to understand if, subject to that same dichotomy, you consider yourself? Unless there is some duplicity involved in your antics. And thus, in keeping with the finest tradition of conspiracy theories, the theory grows to engulf yet another element that it cannot, or cares not to, explain away. And the beat goes on. :-) ***** In reflecting upon the last X years on Wall Street from the introspective precipice afforded by my new situation, there are perhaps two major lessons, among many, that stand out in my mind. The first is the veracity of what is, in my experience, the only universal law in the financial markets, the informally-recognized law of one price. It essentially states that any two securities with equal payoff structures over a like period of time (whether to expiry, maturity, term, knockout, what have you) should have the same fair value, properly calibrated. Yes; as counterintuitive as it may seem, considering every possible financial product ranging from lowly common stocks to, say, a lookback quanto volatility swaption: if over the same period of time their cashflows are alike, they should be - or will over time mean-revert to - similar valuations. The second, and far more important lesson, has been demonstrated often on SI, but nowhere (inasmuch as memory serves) as profoundly as it has in this forum. It has more far-reaching implications and is more widely applicable than the previous item, accounting for my mentioning it here. That truism is, quite simply, that where a shortage of facts leaves a vacuum, personalities and emotions quickly rush in to fill the void. That, and a hardened skeptical bent, are the wellsprings of my confidence in considering the "theories" presented here. e or if you prefer, LPS5