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I do believe the American people are different from Europeans. That is why in my view there is hope in America and Europe is in for a lot of trouble. I am not saying there are no serious issues to be resolved or that the solution will be painless and quick. Look at the recent subprime issues...

Wasn't Keynes chosen and supported over a number of other options because his philosophy justified what they wanted to do? They could have chosen Mises for example. After all, in the long run we are all dead!

How about this as another WAG potential solution. You receive at birth a fixed amount of government services that you can draw on (pension, healthcare, unemployment etc). That would have to be balanced out to be sustainable forever without borrowing based on citizen population. For every...

I do agree with you. Democracy doesn't work (IMO) because there is no voter tie to input and output and no consequences for individual voters (Tragedy of the commons again) for voting "wrong". Survival of the fittest works because there is. Some interesting ideas in this thread. Suppose...

"Nope, monopolies and cartels are almost always the result of regulatory capture, not laissez faire capitalism. " A very interesting comment and thought. Is the same concept true for big unions? I note a serious political divide with one side 100% with one view and the other side 100% an...

To add to what Plyka says and to help me think about the future I make the following gross over-simplifications: Government AKA democracy is socialism by another name. If government shrinks, socialism shrinks and vice versa. The middle class is essentially the worker class (including...

"I would strongly disagree with this if you are referring to the U.SA. In the US., capitalism has been perfected to a greater extent then in any other country in the history of the world. If there is a failure, it is the failure of democracy, not of capitalism. The U.S. is a thoroughly...

It is a failure of capitalism within a democracy. As I posted before: Someone once said "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the...

"Ask yourself (stated in this thread frequently) how you would derive the premium on a bespoke (OTC) contract w/o a volatility figure. Ask yourself where you would get it." Atticus raises an excellent point here. Almost all my comments are for "liquid" options markets and from the retail...

"You're wrong and I have already explained why..." Fair enough.

Interesting comments on informed simplicity. I will do some investigation into this when I have more time. My investment has paid off. Thanks for the contributions. Dolamite - no stupid questions, we learn by asking them. A good question, I suspect that the bookies are struggling just like...

"On the topic: Ask yourself why OTC dealing always involves quoting the market in vol and not premium." I have already answered but here it is again - because the bookies already know how you trade and they have a different objective.

"WTF are you babbling about? I think it's pretty clear who's side I am on. You admonish me as a disciple and then ask me to "take a side"? I generally side with those who know of wtf they speak. Those who live by the sword die by the sword. Tell me how your previous posts contributed to our...

"The real question is - how do you discover that the current implied is rich or cheap?" Point 3: I like questions, especially quality ones like this one. Given my beliefs let's substitute price for current implied volatility. (Over a longer period other things drive the BS equation. There...

"I found a breakthrough 2 1/2 years ago .......... Liquid options are more or less fairly priced. It is not so much their pricing that matters as is what you do with them and to them. Remember, Black Scholes is limited. It is an accommodation. Think outside the box. " Superb comments...

"Yes, of course. Implied volatility is a characteristic of an option that has a one-to-one relationship with a particular price. However, while the price of an option is not a particularly useful measure, IV allows you to perform some analysis. At the very least, it allows you to compare two...

LOL +++1

Part of the confusion could come about because the described MM (or specialist) process stops too early. For an initial guess, the market makers probably do guess but it is what they do afterward in price discovery mode that causes fluctuations. The game of the market maker is not to...

"I'd say that if someone on this board should not be accused of "not owning a pair" its atticus - check out the thread about selling index strangles (whatever the name of it was) a little while ago." Amen to that! :)

"1) Implied volatility isn't quite the same thing as price. 2) What else can your rich/cheap indicators be based on, if it's not price? 3) I think you misunderstood the point of using implied vol." 1) OK, please help with with the difference. (Let's try and discuss it as equals.) 2)...