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This is mostly an artifact of the different capital structures for home ownership vs. company equity share ownership. Moreover, if you look at the capital structure of home ownership, the crash is much worse than it seems from the price declines. In the case of stock market shares, the...

Nice chart! You might get some interesting insights if you do the following. 1. Find the median return on the SPY. 2. Pull the data for all the days when SPY produced above median returns and create a version of this chart. 3. Pull the data for all the days when SPY produced below median...

You are correct. If the goal is to go from long to neutral. But if you want to swing all the way from long to short, then using one big short sale has less commissions than a regular sale + a short sale (plus a covering buying and a long buy if you want to swing all the back form short to...

Yes, if you are flipping between being net long and net short then this would be a good way to go -- I.e., if you hold 1000 RIMM long for the trend and want to flip to 1000 RIMM short for a temporary reversal, then SS 2000 RIMM is cost and time efficient. But it has no advantage for...

Exactly! It has no legal tax benefits. You can't even short the stock in another account under US tax law without triggering a so-called "constructive sale" of the long position. Shorting against the box also carries some added risk if your broker demands that you return the borrowed...

Credit boosting is a dangerous scam and should be outlawed. It does not improve either the ability or the likelihood of the 600-score person repaying the loan. All it does is make 700-score people look more likely to default. The problem isn't that people have too little access to credit...

That Matrox solution is nice for adding 2 or 3 small monitors to a laptop, but it won't support multiple large monitors (e.g., 2 or more 30" displays). The Matrox beastie is limited to the total number of pixels supported by the laptop's graphics card. If you want to support multiple large...

Exactly. And when lenders get repaid in inflated currency, they have that much less to lend in the future which is not good for an economy based on perpetually rolling debt. The lenders that really get screwed are those that borrowed at variable rates or borrowed short-term but lent at low...

Exactly! And the situation is worse than it seems because the "lost" consumer demand will never return because it was created by people suck money from home equity and spending it. It's not that demand for cars is too low right now, its that demand for cars was too high a few years back. My...

If capital preservation is the #1 priority, then CDs are a good alternative. But why only a 6mo term? Does she really plan to spend the entire amount in 6mo? If not, then you might want to consider laddering the maturity dates. Thus you might put 30k each into a 1 yr, 2yr, 3yr, 4yr, and...

Although you can't produce accurate risk models with statistics based on the normal distribution, you can if you use other distributions (e.g. Cauchy, Power-Law, etc.). Whereas the Normal distribution gave the academic idiots at LTCM the false confidence that a blow-up is a 1-in-100,000,000...

I wonder if this is really true outside the tech-obsessed power-user community. The bigger challenge, for both Intel and AMD, is the steady shift in the PC market from being dominated by the latest, greatest tech to being a matured commodity. Over the last 25 years, the average...

Sure. Its http://www.sec.gov/spotlight/regnms/companalysis121504.pdf The document is a bit dense at times, but has some really interesting data on spreads, price impact, execution times, etc. for a range of order sizes for large cap, mid cap, and small cap issues on both the NYSE & NASDAQ.

Those are very big trades that will face significant slippage regardless of broker. The data I've seen (from 2004) suggests that a 5k to 10k share market order for a large cap stock sees about 7 cents (0.2%) effective spread on the NASDAQ and a 10.9 cent (0.3%) effective spread on the NYSE...

This is exactly why some people say that economics is rubbish. What happened to LTCM was NOT a 1-in-100,000,000 fluke. These types of events happen all the time. Any cursory analysis of historical price action will prove that big moves happen more often that expected under simplistic...

Interesting graphs. Some ideas include: 1) stack the graphs so that the price ranges line up on all of them. That makes it more obvious if the price action is rising, falling, retracing, etc. If needed, you might re-scale and clip the graphs to show a "reasonable" width of prices...

That's not good is it! Bernanke needs to cultivate Greenspan's emotionless academic monotone that puts people to sleep before they can all hit the SELL button.

I'd argue that doublespeak is the best policy for a Fed Chairman (or other major economic policy official). Ambiguous statements let both the bulls and the bears confirm their beliefs and leads to a muted response in the market. Unambiguously bullish or bearish statements lead to stampedes...

"Slowing growth" is bullish if: 1) everyone expected no growth at all. 2) people feared that too much growth would trigger inflation and higher interest rates

MA's forget the past price action more abruptly than EMAs. The bar-to-bar change in an n-bar MA is only a function of the most recent bar and the bar n-bar ago. Thus a 17 MA will jump up significantly on the 18th day after a major spike. Some people see that as an undesirable artifact that...