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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (117468)	1/3/2009 7:31:25 PM
From: GuinnessGuy	Read Replies (1) \| Respond to of 132070

Mike, I don't remember you ever characterizing a piece as "outstanding writing" but obviously some others agreed with you. That Michael Lewis piece that was posted here by someone has won top honors by receiving the Sydney award. To be honest, I had never heard of the award before - but since it was pointed out in a NY Times op-ed piece the other day I suppose it's big deal. Here's the link to the original article: portfolio.com Here's a link to another winner that also talks about the financial crisis but more in a historical sense: weeklystandard.com That one definitely brings up some ideas I never gave much conscience thoughts to. Here's the first paragraph to whet the appetite: Neither Barack Obama nor John McCain had much of value to say about the financial crisis as it raged through the headlines this fall. Rather than shred their campaign strategies, they played it safe, as most politicians would have. But in the name of justice we ought to recall that there was one candidate who did foresee our predicament with considerable accuracy when it still lay far in the future. Ron Paul, in almost every speech he made during the Republican primaries, spoke of bubbles, reckless credit growth, and the "unsustainability" of present policy. So why isn't there more demand for the common-sense solutions he put forward? Because common sense is not much use in a financial panic. What's your spin on it? craig

To: Knighty Tin who wrote (117468)	1/4/2009 11:40:20 AM
From: Tommaso	Read Replies (3) \| Respond to of 132070

I was already going to ask you something. I find that my mind closes up when I try to figure probabilities. Suppose the following. There are three stocks, each of which has a 1/3 probability of becoming worthless, and a 2/3 probability of tripling. If you just own one, obviously (and your estimates of the probabilities are correct), you know what chances are for either outcome. If you divide your money equally among all three, you would have a 1/27 chance of losing all your money, which is fairly low. How do you calculate the probability of tripling your money on all three? Is it 8/27, or not quite 1/3? Does this mean that in this situation you are 8 times more likely to triple your money than to lose it all? Whereas if you only buy one stock, you are only twice as likely to triple your money as to lose it all. I realize that there are all sorts of intermediate outcomes with different probabilities. But I don't have a clue how to calculate those. For example, I would like to know the probability of just breaking even. So, just in case probability calculation is right up your alley, or up someone else's, I thought I would ask. I fear I am too old to agitate my remaining neurons by studying this seriously.