Quotes Entirely Relevant to Investing 11-02-2008

by Mr Juggles

“Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets. Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”
-Alan Greenspan

[Ed note: As frequent critics of Greenspan over the years, we feel comfortable saying that this time he’s right.]

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    November 2nd, 2008 | 1:14 pm

    Speak for yourself. The market has been great these last two months and I lever up a little more everyday. I don’t even have to think about it anymore, all those years of reading Taleb and this year Roubini have really paid off. I think I might send them a check.

    P.S. Greenspan still doesn’t get it, the “flaw” in his model, is the whole model. His presumption that firms would act to preserve their capital presumed that the firms could evaluate the risk they were taking in the first place. Both mr. greenspan and the banks are using the same shit mean variance markowitz-> capm-> black-scholes-> stochastic normal / A.R. models.

    Until they stop, this shit is just going to get intermitently worse. Everyone’s bullish again now… a few hundred corporate defaults should, beat it out of them. As soon as the Fed stops buying CP the jig is up. Unless we’re going to outlaw failures.

    The other shoe hasn’t dropped, the first shoe isn’t even done dropping… and neither is the DOW.

  2. Hans Moleman
    November 2nd, 2008 | 8:27 pm

    “The world always makes the assumption that the exposure of an error is identical with the discovery of truth–that the error and truth are simply opposite. They are nothing of the sort. What the world turns to, when it is cured of one error, is usually simply another error, and maybe one worse than the first one.”
    -H.L. Mencken