Re: [Fwd: a non-profit oddity]
This is a multi-part message in MIME format.
Re: Employment Index Derivatives
It's a good idea. Not much exists yet but Robert Shiller has been actively promoting similar ideas for some time. A good introduction is his paper with co-authors in the volume I edited called Entrepreneurial Economics: Bright Ideas from the Dismal Science, see www.EntrepreneurialEconomics.org Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
Re: [Fwd: a non-profit oddity]
Jim said: >Opera houses have felt the pinch of a weakened economy. A significant >number of them have canceled works with the explanation that they were >substituting obscure works with more popular ones to increase ticket >sales. I don't think that opera ticket revenue is actually counter >cyclical, but I still think the phenomenon is pretty funny. Imagine >Warner finding out the economy is bad so they greenlight more summer >blockbusters. This isn't odd at all - artistic institutions subsidize less popular work all the time with profits made from "blockbusters." If the profits on blockbusters are not enough to cover these productions, then you might as well produce another blockbuster and not go into the red. Movie studios owners only care about profits, while opera owners consume both money and art. Fabio
Re: FW: History shows paths to market crashes, but lessons seem forgotten
Alypius Skinner wrote: > People aren't always alive in the long-term! Lots of baby boomers are > approaching retirement when they will begin to draw down their savings. If > their savings are being decimated by a bear market at the same time, they > may not have enough to last them until they die. People retiring today can expect to live another 20 years or so. So even there it's not clear that heavy equity investment isn't the smart choice. As far as I understand the literature on the equity premium puzzle, this explanation doesn't really work. And is % of assets in equity really tightly linked to age anyway? I suspect that people who avoid equity when old also avoided when young, and vice versa, but maybe I'm wrong. For people who have > already accumulated a nest egg and may not be young enough to start over, > capital preservation is rule number one. So it may be a wise precaution for > these people to move their wealth into save havens, mainly bonds. In a few > years, this movement of baby boomer money into safe havens should drive down > both the price of stocks and the yield on bonds. > > ~Alypius Skinner -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] Mr. Banks: Will you be good enough to explain all this?! Mary Poppins: First of all I would like to make one thing perfectly clear. Banks: Yes? Poppins: I never explain *anything*. *Mary Poppins*
[Fwd: a non-profit oddity]
An interesting observation by my friend Jim. -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] Mr. Banks: Will you be good enough to explain all this?! Mary Poppins: First of all I would like to make one thing perfectly clear. Banks: Yes? Poppins: I never explain *anything*. *Mary Poppins* --- Begin Message --- Opera houses have felt the pinch of a weakened economy. A significant number of them have canceled works with the explanation that they were substituting obscure works with more popular ones to increase ticket sales. I don't think that opera ticket revenue is actually counter cyclical, but I still think the phenomenon is pretty funny. Imagine Warner finding out the economy is bad so they greenlight more summer block busters. --- End Message ---
Re: FW: History shows paths to market crashes, but lessons seem forgotten
In a message dated 1/7/03 11:58:51 AM, [EMAIL PROTECTED] writes: << > If one had a cynical bent one might suggest that the predominance of > stories about the small bubbles in the huge cake batter of the miracle of modern economic growth stems from a prevalence of statists in the news media.< > David Levenstam What about the large bubbles? Fred Foldvary >> Compared to the factor of 25 by which real per capita incomes have grown since the Industrial Revolution, there ARE no large bubbles. David Levenstam
Employment Index Derivatives
I've been reading about weather derivatives at http://www.weatherderivs.com/ and was curious if anyone knew of an existence of other kinds of derivatives, on things like labor market size, unemployment rate, CPI, inflation rate, cost of gas at the pump, etc? Is anyone interested in working on something like this together? I'm completely self-educated without so much as a bachelor's degree, but if there's some PhD out there who's interested in listening to my ideas, I think this idea could be publishable, and could be an amazing way for corporations to hedge against fluctuations in availability of product as well as availability of labor. Forgive my narrow mind if something like this has already been invented, but if not I have some ideas as to how to structure put/call contracts to make sense. I'm also a licensed NASD rep and can do the nasty research side of how to make something like this legal and tradable on places like the CBOE, PCX, and other exchanges. Who knows? We might be able to invent a new kind of financial instrument and maybe win the nobel prize. Again, I'm a naive college dropout so please forgive my earnestness. jonathan
Re: FW: History shows paths to market crashes, but lessons seem forgotten
The average > investor would be far better off if they did think that enormous returns > could continue forever because, in a deep though less dramatic way, they > DO. I suspect that a lot of people have been turned off to stock > ownership for decades in spite of the fact that they are the smart > long-term bet. > -- People aren't always alive in the long-term! Lots of baby boomers are approaching retirement when they will begin to draw down their savings. If their savings are being decimated by a bear market at the same time, they may not have enough to last them until they die. For people who have already accumulated a nest egg and may not be young enough to start over, capital preservation is rule number one. So it may be a wise precaution for these people to move their wealth into save havens, mainly bonds. In a few years, this movement of baby boomer money into safe havens should drive down both the price of stocks and the yield on bonds. ~Alypius Skinner
Re: FW: History shows paths to market crashes, but lessons seem forgotten
--- Bryan D Caplan <[EMAIL PROTECTED]> wrote: > I find it interesting that there are so many more articles about bubbles > than about the underlying reality of the equity premium puzzle. This is > a nice case where a little knowledge is a dangerous thing. The average > investor would be far better off if they did think that enormous returns > could continue forever because, in a deep though less dramatic way, they > DO. I suspect that a lot of people have been turned off to stock > ownership for decades in spite of the fact that they are the smart > long-term bet. Two reason for owning bonds in addition to stocks are: 1) the long run for stocks can be a very long run, so short-term bonds are used for funds that need to be available sooner. 2) what counts is returns after tax, and the double-taxation of dividends plus the taxation of nominal rather than real gains reduces the compounding gain. For a 50% marginal tax rate, the real wealth return on the DJIA is only about 2.5%, relative to an untaxed rate of 6.7%. Thus, a high-income person may be better off in tax-free municipal bonds after having maxed out his tax-free retirement accounts. Fred Foldvary = [EMAIL PROTECTED]
Re: FW: History shows paths to market crashes, but lessons seem forgotten
> If one had a cynical bent one might suggest that the predominance of > stories about the small bubbles in the huge cake batter of the miracle of modern economic growth stems from a prevalence of statists in the news media.< > David Levenstam What about the large bubbles? Fred Foldvary = [EMAIL PROTECTED]
Re: FW: History shows paths to market crashes, but lessons seem forgotten
In a message dated 1/7/03 12:53:47 AM, [EMAIL PROTECTED] writes: << I find it interesting that there are so many more articles about bubbles than about the underlying reality of the equity premium puzzle. This is a nice case where a little knowledge is a dangerous thing. The average investor would be far better off if they did think that enormous returns could continue forever because, in a deep though less dramatic way, they DO. I suspect that a lot of people have been turned off to stock ownership for decades in spite of the fact that they are the smart long-term bet. -- Prof. Bryan Caplan Department of Economics George Mason University >> If one had a cynical bent one might suggest that the predominance of stories about the small bubbles in the huge cake batter of the miracle of modern economic growth stems from a prevalence of statists in the news media. David Levenstam
