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i heard joe biden is going transsexual ...

hm. thnx for the patience. i struggle with this: "A hint: Number 2 and 3 result in "0" loss/gain. So you can reduce the problem to this 3 outcomes: gain, loss, break even with 33% probability each." i simply think this is wrong. i have four end states, each of them equally likely: +1...

i do not see how the result 0 can have 1/3 probability with two paths from four leading there. in my eyes 0 has 50% chance, the others 25%. you have four outcomes, not three. since it is about conditional probs you cannot aggregate 2 and 3.

my point is: since your assumption cancels out 50% of the paths you CANNOT throw cases 2 and 3 in one basket.

and the comparison to the twins does not hold water, since you cancel out not only Girl Girl but Girl Boy either. your assumption is that the first child is a Boy. and your question is: is the next child a boy. and the clear answer (here order matters) is: 1/2. IMHO.

"... If you knew that this stock has in fact gained $1 a share (moderator affect) what is the probability that this stock will gain another $1 a share?" that was your initial question. i stick to my answer of 1/2, since it is repetition independent trials. i see no way how this could go to...

well, if your losing systems have streaks, meaning they show significant positive auto correlation, then you might be able to build a positive strategy out of two of which both are not be able to make it on their own as a stand alone. the point is that the P()s deviate from 50% once you...

and: NO way of capitalizing on it. random in random out. no moderator know how entering on any level, no shift of any odds.

all prior and conditional likelihoods are 50%, so the final conditional is 50% as well. it is like coin tossing. there is no probability different from random. there is no sequence ... it is repetition of identical trials. or i am really missing something here ... but i have no math...

my point is that if you have an effect on a stock that as forecasting quality, be it from the stock itself or from exogenous data, you have a tradeable edge. but out of randomness comes only randomness. systems without edge cannot be combined to produce edge. unless (which is a big, big...

even two thousand emails from traders all over the world are nill compared to the voters who cry for security. don't waste your time. nil influence. nil.

there is a funny thing about this. overall you are right. the vehicle as such cannot create value. but what is interesting is the fact that the different tranches sold to customers have different value ... and here is money to be made. having said that buyers are usually not aware of the...

hmm. the best explanation i ever heard is this. when you have three doors in the beginning and you pick one, then the likelihood of having the car is 1/3 and the likelihood of having not (=it is in one of the two others) is 2/3. what happens when the moderator opens one of the two that...

don't know how to write this. i have seen many people with great runs. your biggest enemy right now is your belief of invincibility. self confidence is a great asset if you know how to treat it. advice: stick to your rules. especially to everything concerning risk appetite. don't...

i bet some smart trader at one of these banks that "changed their business model" is right now making a fortune. just imagine the insider talk going on. if you just know who is desperate enough ... it is such a weird situation. for example, AIG crashed from a AAA or AA to default and back...

the real problem with CDS is that their birth happened before regulators and risk managers became aware of what is going on. many swaps require no down payment whatsoever. this spells infinite leverage. i am quite sure that in the CDO arena, people, even at the risk management centers of...

even if they are not allowed to do certain things, i doubt that the regulations become effective overnight. i mean assume half of the big shops are closing their positions at the same day. paulson ain't that stupid.

good post. the banks often argue that by creating cds and having them traded they create liquidity for the debt of the underlying company. i always found that hard to believe. to me a buying a loan is going long the balance sheet while receiving a fixed premium. cds is the same, just the...

i don't know either, i am just guessing. if, as in "B", the bank has less pressure, so it has all the interest that the guys stay in and continue paying. at least i would guess so. that would mean that everybody in the change is supported.

the banks created their own hedge fund like vehicles called CDOs and alikes and sold it to customers who need a rating and think in basispoints. they created their own hedging vehicles in form of tranched credit indices like CDX and Itraxx. question: after the business model has been...