Squats the story - the Off Topic Thread...

itsallaboutheL

Hanley wrote: »

Is the Gaussian stuff not just mainly focused on normal distribution or is there more to it??

Like is it just down the misinterpretation of the results contained therein?? Like not accounting for fat tails and the probability the sh!t will hit the fan quite frequently?

I've always been a big fan of VAR. Such a brilliant concept. You have X% chance of losing no more than Y in a single day, BUT there's a chance you might lose an unquantified amount >Y too. It's another one of those systems that's nice in theory but can be crippling when you don't use a wide enough probability range.... As Merriweather et al found out at LTCM!!

Thats just too far off topic!!!!

brianthebard

Hanley wrote: »

Is the Gaussian stuff not just mainly focused on normal distribution or is there more to it??

Like is it just down the misinterpretation of the results contained therein?? Like not accounting for fat tails and the probability the sh!t will hit the fan quite frequently?

I've always been a big fan of VAR. Such a brilliant concept. You have X% chance of losing no more than Y in a single day, BUT there's a chance you might lose an unquantified amount >Y too. It's another one of those systems that's nice in theory but can be crippling when you don't use a wide enough probability range.... As Merriweather et al found out at LTCM!!

Are you the world's strongest accountant yet?

Hanley

itsallaboutheL wrote: »

Thats just too far off topic!!!!

*yawn*

brianthebard wrote: »

Are you the world's strongest accountant yet?

Hahaha I doubt it. Technically I'm not a "real" accountant. Still a trainee!

cardio,shoot me

Hanley wrote: »

Is the Gaussian stuff not just mainly focused on normal distribution or is there more to it??

Like is it just down the misinterpretation of the results contained therein?? Like not accounting for fat tails and the probability the sh!t will hit the fan quite frequently?

I've always been a big fan of VAR. Such a brilliant concept. You have X% chance of losing no more than Y in a single day, BUT there's a chance you might lose an unquantified amount >Y too. It's another one of those systems that's nice in theory but can be crippling when you don't use a wide enough probability range.... As Merriweather et al found out at LTCM!!

next time i hear someone say powerlifters are dumb meat heads, i will quote this

Hanley

cardio,shoot me wrote: »

next time i hear someone say powerlifters are dumb meat heads, i will quote this

Hahahaha amazing. Just don't quote it to anyone who knows what they're talking about!

cardio,shoot me

i just love the inside joke at the end as if everyone would get it

amacachi

Hanley wrote: »

Hahahaha amazing. Just don't quote it to anyone who knows what they're talking about!

Was hoping you'd say that. :P

Isn't misuse of Gaussian stuff one of the main things being blamed for the current problems? Spent a year in college doin it, glad I quit now. :P

Hanley

amacachi wrote: »

Was hoping you'd say that. :P

Isn't misuse of Gaussian stuff one of the main things being blamed for the current problems? Spent a year in college doin it, glad I quit now. :P

I dunno tbh.... From my reading of the Gaussian function it just deals with normal distribution? And the thing about normal distribution is that outliers and other "unlikely" events sit close to the end of the tails so there's only a minute chance of them happening (this would seem to be the common belief up to 18 months ago or so)

But of course all these minute probabilities have suddenly become a reality on a mass scale. Throwing liberal amount of sh!t against a fast moving fan!!

I think a big mistake that probably happened is that people didn't realise the correlation that existed between their positions. They thought they were diversified and hedged, but how can that be when markets pretty much totally collapses everything tumbles? Liek you can have you eggs in as many baskets as you like, but if there's a world wide earthquake you're still gonna end up with smashed eggs!!

It's funny, I was reading something from the NY Times a while back... the seeds of the collapse were sown a long time ago. Back in '97 the Clinton administration put pressure on Fannie Mae and Freddie Mac to relax the criteria by which they assessed and bought asset backed securities off banks (ie mortgages), so by becoming more liberal in what they bought, banks made riskier loans, passed the risk on to the FM's and the loans were subsquently bundled into marketable securities by them with AAA credit ratings because (afaik) they were essentially rubber stamped by the gov. They were sold to investors, CDS were used as insurance and everyone was happy.

Then all of a sudden people start to default.... CDS were called in which had woefully underestimated the risk and resulting premium.... They couldn't pay.... and then the house of cards came tumbling down. And once the investment banks started to suffer it spiralled.

At least that's my understanding of it from a very top level perspective. If anyone knows better or can correct anything I say, please do!!

cardio,shoot me

Lads, GTFO take this to teh business forum, your making me feel retarded.

itsallaboutheL

cardio,shoot me wrote: »

Lads, GTFO take this to teh business forum, your making me feel retarded.

Here feck off and colour this in like a good boy....

brianthebard

Hanley wrote: »

It's funny, I was reading something from the NY Times a while back... the seeds of the collapse were sown a long time ago. Back in '97 the Clinton administration put pressure on Fannie Mae and Freddie Mac to relax the criteria by which they assessed and bought asset backed securities off banks (ie mortgages), so by becoming more liberal in what they bought, banks made riskier loans, passed the risk on to the FM's and the loans were subsquently bundled into marketable securities by them with AAA credit ratings because (afaik) they were essentially rubber stamped by the gov. They were sold to investors, CDS were used as insurance and everyone was happy.

Then all of a sudden people start to default.... CDS were called in which had woefully underestimated the risk and resulting premium.... They couldn't pay.... and then the house of cards came tumbling down. And once the investment banks started to suffer it spiralled.

At least that's my understanding of it from a very top level perspective. If anyone knows better or can correct anything I say, please do!!

That's the standard republican reasoning why the whole bubble happened. However it doesn't take account of the 11 times Bush allowed the Fed to cut interest rates to the lowest levels since the 60s. Under Clinton these had gone up after that relaxing of the criteria required to receive a loan.

http://news.cnet.com/Fed-cuts-rates-ninth-time-this-year/2100-1017_3-273808.html

Cheap credit imo fuelled the bubble much more than slightly lowered loan application criteria, especially if that was offset by increased interest rates post-97.
Just some of my thoughts on the matter, by no means definitive.

the drifter

ya well ill take your Gaussian function and tell you that V/I is futile

itsallaboutheL

the drifter wrote: »

ya well ill take your Gaussian function and tell you that V/I is futile

if anyone else mentions physics there will be WAR............


you have been warned:)

Hanley

brianthebard wrote: »

That's the standard republican reasoning why the whole bubble happened. However it doesn't take account of the 11 times Bush allowed the Fed to cut interest rates to the lowest levels since the 60s. Under Clinton these had gone up after that relaxing of the criteria required to receive a loan.

http://news.cnet.com/Fed-cuts-rates-ninth-time-this-year/2100-1017_3-273808.html

Cheap credit imo fuelled the bubble much more than slightly lowered loan application criteria, especially if that was offset by increased interest rates post-97.
Just some of my thoughts on the matter, by no means definitive.

Heh.... I never realised the Republican's used that argument!

Lowering interest rates definitely was a major contributing factor... like who can resist cheap credit?? It's just a case of supply and demand really imo.... People can afford to spend more (thanks Mr. Bank Manager), more demand = increased prices. Demand outstrips supply.... prices climb further. Eventually supply catches up, but only when people have no jobs and can't borrow money any more!! You're left with an oversupply, prices plummet...

I honestly think if banks had been more prudent a lot of this wouldn't have happend, but the fees and profits to be made on mortgages, business loans and particularly derivative trades were just too good to resist. And if one bank did resist another wouldn't.... the prudent bank sees their share price suffer... public don't realise the potential pit falls and the prudent bank is forced to go to the dark side.

Like there's no reason for a small bank in Ireland to have a rapidly escalating share price. The "best" way of valuing a company is to discount present value of all it's future cash flows, so the only reason for a huge spike in share price is if the future earning potential increases, and lets face it, banks aren't exactly a revolutionary or innovative business. They shouldn't strictly be seeing massive increases in profits year on year unless the profits are being made in an unsustainable manner.

It's just like Tulip Mania (funny read, look it up if ya haven't heard of it!!)... The price goes up because everyone's dying to get their hands on something that they perceive to be of great value, and as more people get on the bandwagon the price climbs further, then people realise they were wrong and the thing they valued so highly (say property in Ireland) is worth only a fraction of the price they paid. Some cop on sooner than others and rush to liquidate, supply jumps and again, price falls!!

Not even really addressing you on this Brian, just thinking outloud!!

amacachi

Hanley wrote: »

I dunno tbh.... From my reading of the Gaussian function it just deals with normal distribution? And the thing about normal distribution is that outliers and other "unlikely" events sit close to the end of the tails so there's only a minute chance of them happening (this would seem to be the common belief up to 18 months ago or so)

But of course all these minute probabilities have suddenly become a reality on a mass scale. Throwing liberal amount of sh!t against a fast moving fan!!

I think a big mistake that probably happened is that people didn't realise the correlation that existed between their positions. They thought they were diversified and hedged, but how can that be when markets pretty much totally collapses everything tumbles? Liek you can have you eggs in as many baskets as you like, but if there's a world wide earthquake you're still gonna end up with smashed eggs!!

It's funny, I was reading something from the NY Times a while back... the seeds of the collapse were sown a long time ago. Back in '97 the Clinton administration put pressure on Fannie Mae and Freddie Mac to relax the criteria by which they assessed and bought asset backed securities off banks (ie mortgages), so by becoming more liberal in what they bought, banks made riskier loans, passed the risk on to the FM's and the loans were subsquently bundled into marketable securities by them with AAA credit ratings because (afaik) they were essentially rubber stamped by the gov. They were sold to investors, CDS were used as insurance and everyone was happy.

Then all of a sudden people start to default.... CDS were called in which had woefully underestimated the risk and resulting premium.... They couldn't pay.... and then the house of cards came tumbling down. And once the investment banks started to suffer it spiralled.

At least that's my understanding of it from a very top level perspective. If anyone knows better or can correct anything I say, please do!!

The trouble with diversifying is that almost every bundle ends up with a part of the same thing. Once say a set of mortgages was divvied up and shared around it ended up in a load of different funds, so once it went tits up it dragged all those funds down. That happening a few times started that amazing chain reaction last year. Ah well, at least it's not 1929. :P
I'm sure you know more than I do about what went wrong but I'd tend to agree with the cheap money idea. Things were looking almost ready for a slowdown around 9/11 and those events gave governments free reign to throw money around etc., which as far as I'm concerned just delayed a downturn and made it much worse in the end.

http://news.slashdot.org/story/09/03/03/036223/The-Formula-That-Killed-Wall-Street?art_pos=2 Is where I read it, it's actually Gaussian stuff taking a bit further from what I can tell. Everyone building on other people's buildings ain't ever gonna end well. :P

brianthebard

I think you're both correct. Its my opinion that capitalism is terminally predisposed to boom bust cycles of this type. There were contributing factors like deregulation and cheap credit, but bubbles are inflated and burst as part of natural business life, something to be expected (by some at least). Its pretty irrational imo.

Have either of you accountants come across Kondratieff cycles? I dunno if they're just something sociologists picked up on cause they're easy to understand or whether they are taught across disciplines. I found it interesting anyways...

http://www.kwaves.com/kond_overview.htm

amacachi

Hanley wrote: »

Heh.... I never realised the Republican's used that argument!

Lowering interest rates definitely was a major contributing factor... like who can resist cheap credit?? It's just a case of supply and demand really imo.... People can afford to spend more (thanks Mr. Bank Manager), more demand = increased prices. Demand outstrips supply.... prices climb further. Eventually supply catches up, but only when people have no jobs and can't borrow money any more!! You're left with an oversupply, prices plummet...

I honestly think if banks had been more prudent a lot of this wouldn't have happend, but the fees and profits to be made on mortgages, business loans and particularly derivative trades were just too good to resist. And if one bank did resist another wouldn't.... the prudent bank sees their share price suffer... public don't realise the potential pit falls and the prudent bank is forced to go to the dark side.

Like there's no reason for a small bank in Ireland to have a rapidly escalating share price. The "best" way of valuing a company is to discount present value of all it's future cash flows, so the only reason for a huge spike in share price is if the future earning potential increases, and lets face it, banks aren't exactly a revolutionary or innovative business. They shouldn't strictly be seeing massive increases in profits year on year unless the profits are being made in an unsustainable manner.

It's just like Tulip Mania (funny read, look it up if ya haven't heard of it!!)... The price goes up because everyone's dying to get their hands on something that they perceive to be of great value, and as more people get on the bandwagon the price climbs further, then people realise they were wrong and the thing they valued so highly (say property in Ireland) is worth only a fraction of the price they paid. Some cop on sooner than others and rush to liquidate, supply jumps and again, price falls!!

Not even really addressing you on this Brian, just thinking outloud!!

Aye, the Tulip Mania was mental. Was looking up random stuff on Wikipedia last week and came across it. Also came across the Panic of 1907. I love how J.P. Morgan pretty much saved the whole of America's economy and almost straightaway people were criticising him. :pac:

amacachi

brianthebard wrote: »

I think you're correct. Its my opinion that capitalism is terminally predisposed to boom bust cycles of this type. There were contributing factors like deregulation and cheap credit, but bubbles are inflated and burst as part of natural business life, something to be expected (by some at least). Its pretty irrational imo.

And the role of governments is more and more going to be to sweep away the messes when the bust happens. Like with the value written off the world's assets in the last year it's a miracle we're not all out with shotguns. Suppose it's a good thing that all that money was made up and only existed on a coupla servers in London and New York eh? :P

amacachi

brianthebard wrote: »

Have either of you accountants come across Kondratieff cycles? I dunno if they're just something sociologists picked up on cause they're easy to understand or whether they are taught across disciplines. I found it interesting anyways...

http://www.kwaves.com/kond_overview.htm

Did you do economics in school? That's one of the first things we did, it's all about cycles etc. Just had a quick look at that site (got maths in the morning and I've done 3 days of studying for it after being out of school 2 years so I've to tip on) and it's accurate to a certain extent, but it looks at things too long-term IMO. In the table it ignores the booms and busts within those cycles.
Without government interference I think that the boom and bust cycles would be a lot closer together than they historically were, thanks to better communication etc., but it's all hypothetical and even if something's an accepted economic theory, I don't accept it as fact. :P

I was against Obama's stimulus plan, yes, I was hoping for armageddon:P, but it looks to be working. If it doesn't though we're going to probably be a lot worse off than if the economy had been left to collapse.

brianthebard

amacachi wrote: »

Did you do economics in school? That's one of the first things we did, it's all about cycles etc. Just had a quick look at that site (got maths in the morning and I've done 3 days of studying for it after being out of school 2 years so I've to tip on) and it's accurate to a certain extent, but it looks at things too long-term IMO. In the table it ignores the booms and busts within those cycles.
Without government interference I think that the boom and bust cycles would be a lot closer together than they historically were, thanks to better communication etc., but it's all hypothetical and even if something's an accepted economic theory, I don't accept it as fact. :P

I was against Obama's stimulus plan, yes, I was hoping for armageddon:P, but it looks to be working. If it doesn't though we're going to probably be a lot worse off than if the economy had been left to collapse.

No I did English and History, now I'm doing a multidisciplinary MA. Not meaning to be rude but the point of Kondratieff waves is that they are very long term. I'm not sure it necessarily ignores boom busts within a cycle, its just an attempt at a bigger picture.
Tbh I don't think its totally accepted/mainstream-I agree that you shouldn't accept it as fact. Just found it an interesting theory that doesn't get much attention.
Good luck in the exams.

amacachi

brianthebard wrote: »

No I did English and History, now I'm doing a multidisciplinary MA. Not meaning to be rude but the point of Kondratieff waves is that they are very long term. I'm not sure it necessarily ignores boom busts within a cycle, its just an attempt at a bigger picture.
Tbh I don't think its totally accepted/mainstream-I agree that you shouldn't accept it as fact. Just found it an interesting theory that doesn't get much attention.
Good luck in the exams.

No offence whatsoever taken. The trouble for me with retrospective economics is that the numbers and time periods etc. can be moulded a bit too much just to make it all fit. I don't know enough history to know what wars were going on at what point, but I'm sure there were plenty of wars not mentioned which would detract from his theory. I'm not saying he's wrong, probably just not as right as someone could make it seem. :P

I'm going to need luck, I'm fine with all my algebra and ****, calculus is really kicking my ass right now though. Starting to look like no chance of medicine next year. Ah well, should've started studying more than a week before the exams eh? :P

cardio,shoot me

FunkZ

cardio,shoot me wrote: »

I was afraid to post last night

amacachi

25+1=24. That's correct yeah? I didn't make a stupid mistake did I?:(

kevpants

FunkZ wrote: »

I was afraid to post last night

Ah I wouldn't worry about it. It all sounds very intellectual but guess what, these geniuses like this Gaussian chap are the reason my apartment is worth approximately the same price as sherbert dip and a copy of the beano in 1986.

gnolan

Thought i'd post this question here as i don't think it warrants a thread of it's own.

If i am consistently making gains, be it one or two reps a week, or 2.5kg every fortnight, is it safe to say that i am eating enough?

Which i suppose leads to the question - is it possible to make gains on a calorie defecit? As far as i'm concerned the answer would be no but looking for other people's opinions.

brianthebard

Yeah it totally is Gnolan, as you've seen yourself from your training. But if you feel its not happening fast enough or you're being held back by the diet, you could try carb cycling as a means of maximising the potential for gains while keeping your calorie intakes/carb intake under control over the week.

Hanley

amacachi wrote: »

25+1=24. That's correct yeah? I didn't make a stupid mistake did I?:(

That's right. And 2+2 does in fact equal 5. It's a case of synergy really :D

brianthebard

cardio,shoot me wrote: »

Shouldn't you be studying for your Junior Cert?

amacachi

Hanley wrote: »

That's right. And 2+2 does in fact equal 5. It's a case of synergy really :D

The stupid bloody things that are cost me the A. That and not drawing the graph when the question finished with "...and draw the graph."