This is all I want to add on "Izabella Kaminska’s counterintuitive model of the modern world" and it is just a quick note that is pretty funny. Here's one of the commenters on the Marginal Revolution post:
May 3, 2013 at 11:30 amA few hours before Mark A. Sadowski typed that and hit "post" I had said:
Sometime counterintuitiveness reveals deeper understanding. In Izabella Kaminska’s case it reveals deep, deep confusion.
1) In a deflationary environment money *is* a safe asset. Thus “printing” more of it helps to decrease the safe asset shortage problem. See David Beckworth for related commentary. 2) Kaminska has a highly idiosyncratic definition of deflation, in that she identifies it with negative interest rates. Thus in her world view, by definition, the best way to combat deflation is to raise interest rates. This is related to her pervasive confusion concerning causes and effects. 3) Kaminska’s religious faith in “global abundance” is completely unperturbed by the empirical reality of slowing rates of growth in global real GDP per capita and by slowing rates of TFP growth in the advanced countries over the past 40 years.
One has to wonder why FT employs Kaminska except as a freakshow curiosity to draw in the readership.
...In the comment section Marginal Revolution's usually perceptive, articulate and good looking commenters don't acquit themselves well on this post.After seeing his first comment (there's also a later one) I asked what we could find on Mark A. Sadowski without taking too much time. Here's some of his writing from Jan. 2, 2009:
For me, most of what Izabella is formulating makes sense at the empirical level, you won't construct an idiotic trade by following her precepts, and any differences I have are on the order of trifles.
I don't care how beautiful your equation or how elegant your model, if it leads you to results at variance with objective reality i.e. costs you money at the market, it is not worth a minute's thought.
Give me empirical every time.....
It goes on but there are enough falsifiable hypotheses for our purposes:2009 Predictions I Hope Are Dead Wrong [View article]I've been indulging in my own New Year predictions:
Ten year P/E averages typically fall to 6-7 during serious recessions so expect the Dow to fall to 3500-4000, the Nasdaq to fall to 600-700 and the S&P 500 to fall to 350-400. Oil falls to $25 as Russia, Iran and Venezuela cheat on their agreements to cut back on output because they are short on cash (a similar thing happened in the early 1980's)....
The S&P's P/E didn't fall, it skyrocketed in 2009 as earnings fell faster than stocks, see chart below.
The index itself bottomed at 666.79 on March 6th approximately 45% higher than Mark A. Sadowski's forecast two months prior. The DJIA intraday low was 6,469.95, likewise ~45% higher than the target.
Oil? WTI had already bottomed ($30.28 intraday Dec. 17, '08, $33.87 settle) and was heading up at the time Mark A. Sadowsky penned his missive. The price was $45.52 on March 6th when equities saw their intraday low prints and closed the year at $79.36.
Prognostication is hard.
But that is not the funny part.
The thing that tickled me is: it appears Mark A. Sadowski is a gadfly.
On just the first two pages of a Google search he shows up at
( economistsview, seekingalpha, theblaze, themoneyillusion, economist, pragcap, citizencam, consultingbyrpm, ritholtz, baselinescenario, thefaintofheart, marginalrevolution, angrybearblog)
That is someone who has a lot of time on his hands.
And the funny part?
One of the questions Izabella has been asking-out in public- is whether society is approaching Keynes' Leisure Society (she even named her Tumblr "Towards a Leisure Society") and questioning how will people fill their hours should we achieve the 15-hour work week Keynes forecast in "The Economic Possibilities for Our Grandchildren"
It appears our Mark A. Sadowski has empirically discovered his answer!
Spend your leisure time commenting on blogs!
And I don't care who you are, that's funny.
Mark A. Sadowski may have a PhD in economics.
Tyler Perry earned $130 million in Forbes year 2010-2011.
Previously:
UPDATED--Tyler Cowen on Izabella Kaminska's "Counterintuitive Model of the Modern World
My Second-to-Last Comment on Izabella Kaminska at Tyler Cowen's Marginal Revolution
Via Crossing Wall Street:
