Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy - Eric Janszen

[ze100]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy - Eric Janszen

I don't see why all types of analysis cannot be used to form a hypothesis. Certainly technical analysis can provide insights as can macro economic analysis, fundamental analysis or behavioural analysis.

Just take it all - put it together and at some stage you'll clear out the BS from the important.

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

Santafe2 -

I'm not some sort of rabid technical analysis aficionado. The spoof about my being some superman-warren buffet thanks to recognising the usefulness of support and resistance lines is frankly nonsense. I don't even have any huge interest in technical analysis. If one or two people were more alert to the wider issue that would never have even been your assumption.

What I object to is the occasional casually delivered, over-assertive throw-away iTulip claim, which suggests that about half the entire population of finance or economic analysts (or in other words, about one half of the professionals who maybe got a Phd in economics and are market watchers as is iTulip) is comprised merely of frauds because maybe they even just incorporate a "technical analysis" approach among theor various eclectic methods. Meanwhile iTulip barely wave a hand in the vaguest terms (other than ample ready caricature) to even define what "TA" is, yet there are dozens of ways this term may be construed. And I'm treated to the spectacle of the entire iTulip readership sitting there like so many marshmallows, not uttering the smallest peep. Not even something bland, like: "but Fred, wouldn't it be just a shade more prudent of iTulip, to assert that they distrust this technician's approach, as opposed to referring to it as fraudulent"?

I don't care so much about the technical analysis, nor have a huge fascination for it. What I do care about and object to, is editors being able to throw out brazen statements consigning half the market professionals out there (many quite smart, skeptical and discerning, even with doctorates) to the status of patsies and frauds while the readership sits here mutely, in uncritical and approving silence. Tell me, how would iTulip know that "beyond any doubt", exactly? Anybody ask? And what about that irksome WD Gann guy? Crack open a book of his essays on technical analysis and it's enough to give Fred dyspepsia over how inane Gann sounds with that "technical mumbo jumbo" while he was raking in 50 million dollars.

But the irksom fact is, the guy pulled more speculative money out of the market than you, I, Fred, EJ, the facilely doubting Spartacus and Metalman, and the whole fricking pile of people reading here will likely earn or speculatively win, collectively - in a lifetime.

No comment? No-one offers a murmur because this place is a place where you open the lid on the top of your head, and the editorial staff fill up the actionable-intelligence-pan underneath that lid, with their (occasionally overweening) opinions as to what's real and what's not in the world, and it would be terribly bad form for you to once in a while tell iTulip their summary dismissals of the life's work of people like WD Gann beg the question whether they've ever heard of the concept of an even perfunctory professional modesty (let alone courtesy). The guy ran circles around iTulip as far as outguessing the markets, and would likely have done so even with one hand tied behind his back and one leg in a cast. It is not technical analysis that I'm infatuated with at all. Rather, it is the overweening claims to have encompassed sufficient "absolute truth" to dismiss the other half of the professionals working around you beyond any possible appeal - that's what sticks in my throat like a chicken bone. Not your throat, apparently.

Um...I have an idea how you could invest just like Buffett...you could maybe buy BRKA? That would be exactly like investing just like Buffett and you could do it without any of the work or the staff. Then you could use MACD historgrams, 50 DMA and support and resistance just like Luke does to be like a super Buffett, (Luke, I'm being sure not to talk around your posts...is this sufficient homage?).

We have the same attitude about trading based on TA as we have toward casino gambling and state lotteries ... schemes designed to seperate people from their money based on marketing that selectively presents the product's or service's performance ....

... easy to debunk technical analysis. All you have to do is collect a series of forecasts that were based on technical analysis and compare them to actual results ... such is human nature and the dogged determination of the gambling mind to accept the fantasy ....

We make about ten cents every time a member buys the book, by the way. Not as good as the hundreds of dollars we'd make selling trading junk, but that's the difference between what you can make on get rich quick schemes versus cold, hard reality.

[santafe2]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

I've studied Graham and Buffet at length for years now, and I agree with you...[that investing like these two is no longer possible]

Um...I have an idea how you could invest just like Buffett...you could maybe buy BRKA? That would be exactly like investing just like Buffett and you could do it without any of the work or the staff.

Then you could use MACD historgrams, 50 DMA and support and resistance just like Luke does to be like a super Buffett, (Luke, I'm being sure not to talk around your posts...is this sufficient homage?).

[Sharky]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

IMHO, it's IMPOSSIBLE for a regular person today to be a Graham type "investor".

I've studied Graham and Buffet at length for years now, and I agree with you. However, the reasons why this is true point to much larger issues that I haven't heard much discussion about:

1. Financial accounting and reporting are no longer reliable
2. Financial analysts are not reliable
3. Ratings agencies are not reliable
4. Insurance companies are not reliable
5. Government economic statistics are not reliable
6. The people running most companies or the government can no longer be assumed to be telling the truth or providing the whole picture
7. The ongoing random government intervention in the markets (and the resulting side-effects) is impossible to predict. PPT, Fed, Congress, you name it and they love to intervene.

What's happened over the last 20 or 30 yrs is that the system has been increasingly gamed and manipulated. In spite of the oft-quoted disclaimer, it used to be that past performance was a good indication of future performance -- but that is no longer true. IMO, this is also a big reason why TA is not as useful as it perhaps once was. How can TA help you predict the next Black Swan?

Government loves the excuse that their deceptions are "for the public good." After all, "public confidence" is so important. And yet their lies and distortions undermine the very confidence that they think they are trying to support.

But the big, big problem here is not a short-term one. Capitalists (and even pseudo-Capitalists) require the ability to reasonably forecast the future in order to plan ahead: inventories, ordering, hiring, financing, manufacturing, etc. When the mechanisms for doing that are substantially damaged, as they have been, it also damages the very core of capitalism. Not only does that undermine the foundation of the capital markets, but it also presents huge societal risks; famine and mass shortages, for example, can easily result when predictability in certain sectors is lost or damaged.

Plus, who in their right mind would lend to or invest in a company when they can't trust the financial reports that the company produces or the ratings agencies that rate their debt, or the insurance companies that insure that debt? For example, the fact that banks were able to carry anything "off balance sheet" is absurd on the face of it from a pure accounting perspective. How much of the rest of the economy is "off the books"? My guess: much, much more than most people suspect!

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy - Eric Janszen

I have the curious sensation of getting "talked around" on this thread. Here I am explaining to these guys that they are making grandiose, absolutist, sweeping and highly generalized assertions about a whole host of market particpants, and generally carrying on like opinionated ninnys, and they are talking over my shoulder but replying to none of it. One could construe it as meaning my qualifiers were full of crap. Or one could construe it to mean that replying substantively is not nearly as much fun as the original haughty dismissals were. Screw that nutty Gann guy. The money he peeled out of the markets is likely a myth. Sweeping dismissals are lots of fun! Much more fun than actually figuring out who made the most money, and what exactly they were doing to get it. Eh. :p

[Spartacus]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

duplicate of the above post.
There should be a way to delete one's own posts.

[Spartacus]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

Agreed, on re-reading your post I realize I mistook your invocation[*] of Graham, and you did not take a stance on regular people being able to do Graham/Dodd.

Whoa, Spartacus. the inquiry was about gold. Gold, not Goldman. I was observing that there is investing and there is speculating. I wasn't suggesting that the game is run fairly or that anyone should be investing in stocks or bonds or... I hope it was obvious that I was even hinting that the only way I would buy gold is to scale in over time and not try to time entry points.

That said, I'm not buying today but if I was just getting started, I would buy today and begin to build the investment over time.

[*] hope you were sitting in a pentagram

[santafe2]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

why don't even well educated people understand that? have a friend who is dogmatic about elliot wave. i ask, 'have you ever counted up all of your trades and figured out if, minus what you spend in the wave stuff, trading costs, taxes, etc, you are making money?'

his answer... 'i don't need to. i know i'm making money!'

I made my case with regard to TA on iTulip a year ago so there's no reason to go into it again. I will say that EJ said something to the board with regard to TA that really struck me as true; how do you value your time doing all this work? And the answer for me was, I didn't. It's a hobby - I find it entertaining.

After I started my business last March, every day became a choice between business time, family/friends time and sleep. It was then I realized that I really had been spending a lot of time finding sets of mathmatical systems that would allow me to predict with some accuracy, short term market moves. Needless to say, I don't have time for any type of serious real time analysis but I've been very happy with the results following EJ's advice in 2007, (actually I didn't follow it until March when I noted it in one of my posts).

[santafe2]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

It's fine for Buffett to be a Graham type investor. He can afford private investigations and interviews with auditors and so on ..

You and I CANNOT.
You and I CANNOT see beyond the shoddy accounting that's available to us.

IMHO, it's IMPOSSIBLE for a regular person today to be a Graham type "investor".

Whoa, Spartacus. the inquiry was about gold. Gold, not Goldman. I was observing that there is investing and there is speculating. I wasn't suggesting that the game is run fairly or that anyone should be investing in stocks or bonds or... I hope it was obvious that I was even hinting that the only way I would buy gold is to scale in over time and not try to time entry points.

That said, I'm not buying today but if I was just getting started, I would buy today and begin to build the investment over time.

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

Dear Spartacus and Metalman -

One good exercise would be to avoid the stark bias of citing only examples of the dumbest 90% of this technically oriented interest in the markets. This technical approach to reading market action, in case it escaped you, is a rather large area, in which a very large number of people have brought varying degrees of talent over the past 100 years. We've been here before, haven't we?

Rather than display bravado knocking down straw men, why don't you take on "technicians" like WD Gann, who took 50 million dollars in winnings out of the markets using *a lot* of technical analysis? He devoted his entire life to technical analysis "navel gazing" and is one of perhaps the top 3-5 top market speculators of all time. You got the chops to convincingly debunk the results of his work? In a previous round of specious dismissals, when WD Gann's jaw dropping record was pointed out, objectors sort of shuffled off mumbling into their shirts.

Try putting up intelligent critiques of that far more intelligent remaining 10%. such as WD Gann, and argue convincingly that his vast winnings were produced entirely in spite of his lifelong fascination with technical factors. That would be a more interesting exercise on your part. If one reads debunks of "technical analysis" which frolic around describing what the stupidest third rate proponents do it does not do much more than reward your own comfortable preconceptions with a pat on the back.

You can take even iTulip's serious and hard probing macro-economics driven methodology and by rummaging around, find some exceptionally wooden and stupid proponents of this "methodology" too. Or is such a notion anathema to you? The point is, there is no such thing as a "methodology". There is most certainly no such thing as an easily delimited "mass herd of deluded pseudo-technical-analysts" although I see you apparently yearning to affix this caricature upon some donkey's rear end.

That homogenous whole does not exist. There are only large numbers of individuals, a decent number of whom are reasonably intelligent, upon whom you wish to pin this donkey's tail.

There is no such thing as a "tribe of deluded tecnical analysts" to debunk. That assertion is brazen, and I'm saying it's bunk - (for lack of any other dissenting voices here - everyone seems willing to get their porridge spoon fed on this topic). It is a large canard. There are only individual analysts, and they are of many, many subtly different stripes. A few of them, like WD Gann, are at the forefront of "technical analysis navel gazing" and they took more hard cash money out of the markets than this entire community combined likely will in the next three to five years.

50 Million dollars. iTulipers are going to clean up in the markets between now and 2014 to the tune of this sum? Wakey wakey?

The presumption of summarily lumping "all technical analysis" into one big ball of easy to skewer play-dough, to then be "witheringly debunked" in the sort of easy sport you are indulging in, is a large presumption.

My opinion of your dismissive exercises this far"? Rampant, superficially argued dogma on full display here. Forget Prechter and Elliott Wave. He never took 50 million dollars out of the market. Try sounding convincing here explaining to everyone that WD Gann was a deluded fraud and charlatan (because he was dumb enough to devote time to "technical analysis"). Methinks you will stumble trying to evidence this guy as a fool, and appear to be flailing at arguments, in short order.

why don't even well educated people understand that? have a friend who is dogmatic about elliot wave. i ask, 'have you ever counted up all of your trades and figured out if, minus what you spend in the wave stuff, trading costs, taxes, etc, you are making money?'

his answer... 'i don't need to. i know i'm making money!'

[metalman]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

The sales pitch
i. is SALES - plays to greed & other emotions. Side-steps reason for a lot of people
1. uses data-mined data sets
2. is SALES - plays to greed & other emotions
3. EXCLUDES transaction costs
4. EXCLUDES missed fills
5. OMITS reasonable tax assumptions (as one example, massive profits on one transaction don't get taxed and carried over for hundreds of future trades ... not realistic)

basically excludes everything that reduces profit and includes friendly data sets.

why don't even well educated people understand that? have a friend who is dogmatic about elliot wave. i ask, 'have you ever counted up all of your trades and figured out if, minus what you spend in the wave stuff, trading costs, taxes, etc, you are making money?'

his answer... 'i don't need to. i know i'm making money!'

[Spartacus]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

why don't people understand this?

The sales pitch
i. is SALES - plays to greed & other emotions. Side-steps reason for a lot of people
1. uses data-mined data sets
2. is SALES - plays to greed & other emotions
3. EXCLUDES transaction costs
4. EXCLUDES missed fills
5. OMITS reasonable tax assumptions[*] (as one example, massive profits on one transaction don't get taxed and carried over for hundreds of future trades ... not realistic)

basically excludes everything that reduces profit and includes friendly data sets.
[*] you'll see every couple of years, regular as clockwork, if one follows the TA sales pitches for long enough, someone will go through and evaluate a bunch of systems on actual profits and realize no system is profitable over the long haul with real assumptions. For years and years, every few years an article would come out running the numbers and showing the muni market funds consistently beat everything else because of the tax considerations, but no system, ABSOLUTELY NONE ever recommended munis.

[Spartacus]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

Hey FRED ...

curious if your circle has been through this

https://www.cia.gov/library/center-f...sis/index.html

He recommends that whatever position you normally champion, turn it off for a while and IN GOOD FAITH, do the opposite analysis.

Hmm... I've never added that to educational resources list ...

For the record, our policy is so strongly anti-technical analysis (TA) that we have spurned no fewer 50 attempts over the last two years by Elliot Wave and others to resell their products and services, despite a persistent and well organized marketing and sales effort, and by conservative estimates we forgone at least one hundred thousand dollars in revenue by sticking to this policy.

[metalman]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

And the only time TA is useful is
1. in hindsight
2. if enough people have been lured into using it that it affects the markets

why don't people understand this?

in case 2., if you're using the same system as all the others who've bought into that system, you and all the other users of one system will buy at the same time & sell at the same time. It's unlikely the majority will make money (be able to get in before the artificial TA inspired price rise, get out before the TA inspired price drop, and taking slippage and transaction costs into account)

wonder if it is possible to catch that peak stupid among ta traders when they are all following the same bullshit idea... and trade against them?

A lot of quants have been through a lot of strategies ... check out some of the stuff on Wilmott. Back when you and I could afford a 286 and excel, Wall Street had Cray X-MPs and Macsyma.

oh yeh? why with my new/exclusive/etc. system from joe chartmonger i can beat 'em all... and his newsletter is a bargain at only $2000 a year!

One of my classmates that got a PhD in Chemical Engineering, thesis on oil resevoir modeling (solving 5th order PDEs) went to Wall St and told me years later one of the first things he did was run TA systems through the paces with data sets that the public will never get.

Any that made money did it for a short time & then failed.

of course. if a trading scheme works it gets arbitraged away in days if not hours.

[Spartacus]

Re: Timmy Geithner the debt serf: Out of the pan and into the FIRE Economy

It's fine for Buffett to be a Graham type investor. He can afford private investigations and interviews with auditors and so on ..

You and I CANNOT.
You and I CANNOT see beyond the shoddy accounting that's available to us.

IMHO, it's IMPOSSIBLE for a regular person today to be a Graham type "investor".

Here's some advice from a much better investor than I. Benjamin Graham offers the following: "The speculator's primary interest lies in anticipating and profiting from market fluctuations. The investor's primary interest lies in acquiring and holding suitable securities at suitable prices."

And the only time TA is useful is
1. in hindsight
2. if enough people have been lured into using it that it affects the markets

in case 2., if you're using the same system as all the others who've bought into that system, you and all the other users of one system will buy at the same time & sell at the same time. It's unlikely the majority will make money (be able to get in before the artificial TA inspired price rise, get out before the TA inspired price drop, and taking slippage and transaction costs into account)

A lot of quants have been through a lot of strategies ... check out some of the stuff on Wilmott. Back when you and I could afford a 286 and excel, Wall Street had Cray X-MPs and Macsyma.

One of my classmates that got a PhD in Chemical Engineering, thesis on oil resevoir modeling (solving 5th order PDEs) went to Wall St and told me years later one of the first things he did was run TA systems through the paces with data sets that the public will never get.

Any that made money did it for a short time & then failed.