<t>I am VERY sceptical about the ability of the West to continue exchanging "high technologies" for the goods produced with these technologies. The early warning here is the percentage of PhD students of Chinese and Indian origin in physics, math and engineering: as far as I know, it's already very ...

"All millions in the world are acquired in a dishonest way"Ostap Bender,a.k.a. "The Great Contriver"

<t>In my view, vol surface is just a way to fit a wrong model to reality. Therefore, to construct a historic vol surface without observed option prices, you need:1) build an option pricing model more realistic than BS2) calculate option prices for a range of tenors and strikes with this model3) deri...

<t>Traden4Alpha, strictly speaking, you do not aqlways need to know the true value to be able to estimate its measurement error. (For example, consider a physical experiment where you may estimate precision of your measurement tools before running the experiment). The problem with economic measureme...

Interesting opinion, thanks for the lead. Is the author questioning the social value of economic growth?

I do not believe in the global economy reaching an equilibrium in forseeable future. Some nations will fall while others will rise till last differences between them disappear completely (I do not believe this might happen any time soon despite all globalization we see).

The quickest way to make money is to take a big knife and walk along the Wall street asking passers-by to give you their money... Books are more for hungry minds than for hungry pockets, in my view. And Cohrane's book is not the least interesting.

<t>My point was not to express support to Krugman but rather to draw your attention to what may be the new trend in markets regulation. Krugman is not alone. In my previous post, I mentioned an article by FSA Chairman, and today I have read another article by another person, Harvard professor Benjam...

<t>johntsai90,I cannot see the picture you say you have attached but my understanding of what they did is:on each date of their history they (1) calculated implied vol for ATM options of all maturities quoted, and then (2) interpolated the resulting curve to obtain values for T=1m and T=3m, which ga...

Making bonuses transparent and fairly risk-adjusted would revolutionize the whole industry. But such system would be extremely difficult to develop and even more difficult to implement consistently... Like socialism, probably

Then they differ so much that have little in common. BS vol is not really a volatility -- it's just a parameter to be fed to the BS formula to get the observed option price.

Bubbles cannot be stable: they can only grow or burst. If a bubble is not growing quickly enough, it maybe about to burst, which definitely worries its inflators.

<t>QuoteOriginally posted by: hamsterChina and Russia want IMF's SDRs (Dollar, Euro, Yen, Pound Basket) to be the US Dollar substitute as new world reserve currency. The IMF would do it but want a central bank upgrade, look here Bloomberg interview , videoI am not sure about the impact on fx markets...

As I understand, China both gets a discount and will pay in the currency convennient to it (which seems to be USD: they do need a drain to all their USD revenues)

<t>Regarding Fed Manipulation: As far as I remember from macroeconomics course, no country can have the following 3 things simultaneously:1) controlled FX rate2) free capital markets3) free monetary policy.Since Fed already uses interest rates (item 3 in the list) to stimulate economic growth, it ca...