Comments on: Of markets and weather http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/ Random samplings from a universe of ideas. Sun, 08 Nov 2009 21:31:31 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: Slawomir Piatek http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-62004 Slawomir Piatek Fri, 30 Jan 2009 15:43:21 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-62004 To Neal J. King: tax cut = money NOT taken from those who earned it. Dig? To Neal J. King: tax cut = money NOT taken from those who earned it. Dig?

]]> By: harshpotatoes http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61552 harshpotatoes Wed, 28 Jan 2009 02:36:09 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61552 Ah yes. Thanks Daniel. I missed that table the first round. Excellent. I heard that blip from a poli sci major once but never found the sources to back it or to argue it. Nice to know i have something to back up an argument against him now. :) Ah yes. Thanks Daniel. I missed that table the first round. Excellent. I heard that blip from a poli sci major once but never found the sources to back it or to argue it. Nice to know i have something to back up an argument against him now. :)

]]> By: Toiski http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61533 Toiski Tue, 27 Jan 2009 23:22:21 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61533 tacitus: What is the significance of the S&P index? What do similar comparisons for other indices look like? Averages of indices? From a layman's point of view, that chart is not very helpful at all. tacitus: What is the significance of the S&P index? What do similar comparisons for other indices look like? Averages of indices? From a layman’s point of view, that chart is not very helpful at all.

]]> By: tacitus http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61502 tacitus Tue, 27 Jan 2009 19:32:45 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61502 harsh, if you compare overall market performance under Democratic presidents with that under Republican presidents since 1929 -- 40 years for both parties -- the Democrats win hands down. Just take a look at this chart: http://www.nytimes.com/interactive/2008/10/14/opinion/20081014_OPCHART.html Rather stunning really, and surprises a lot of people. harsh, if you compare overall market performance under Democratic presidents with that under Republican presidents since 1929 — 40 years for both parties — the Democrats win hands down.

Just take a look at this chart:

http://www.nytimes.com/interactive/2008/10/14/opinion/20081014_OPCHART.html

Rather stunning really, and surprises a lot of people.

]]> By: daniel http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61500 daniel Tue, 27 Jan 2009 19:18:57 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61500 as outlined by many commenters, there are lots of reasons the market tanked (and recovered). and they don't have anything to do with it happening to be inauguration day. vocabulary cop, i use the term 'apocryphal' in direct reference to the claim that the cold caused his death. this is the way the story is usually presented, e.g., the <a href="http://www.erh.noaa.gov/lwx/Historic_Events/Inauguration/Inauguration.html" rel="nofollow">NOAA page</a>. and he was apparently trying to show how tough he was by not wearing a coat. harshpotatoes, i don't see any sort of trend between market and presidential party (either at inauguration, or a year later) in the data presented in the table linked in the post above. as outlined by many commenters, there are lots of reasons the market tanked (and recovered). and they don’t have anything to do with it happening to be inauguration day.

vocabulary cop, i use the term ‘apocryphal’ in direct reference to the claim that the cold caused his death. this is the way the story is usually presented, e.g., the NOAA page. and he was apparently trying to show how tough he was by not wearing a coat.

harshpotatoes, i don’t see any sort of trend between market and presidential party (either at inauguration, or a year later) in the data presented in the table linked in the post above.

]]> By: harshpotatoes http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61497 harshpotatoes Tue, 27 Jan 2009 19:01:16 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61497 although i seem to remember somewhere that in general markets drop after the election of a democratic president, and that markets will rise after the election of a republican president. anybody else remember hearing something like this? although i seem to remember somewhere that in general markets drop after the election of a democratic president, and that markets will rise after the election of a republican president. anybody else remember hearing something like this?

]]> By: Mike http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61491 Mike Tue, 27 Jan 2009 18:04:30 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61491 The commentaries linking market performance to Obama have been annoying me too. They started with the terrible week the markets had following Obama's election. What is not mentioned in these commentaries is that investment banks and financiers gave overwhelmingly to Obama over McCain. Either they support Obama's politics over its effect on markets (in which case, perhaps we should take that as a cue) or they didn't think Obama's presidency would be relatively bad for markets or they wanted to donate to a winner, in which case markets shouldn't have fallen after the election because they all thought he was going to win anyway as indicated by the fact that they gave him much more money. The commentaries linking market performance to Obama have been annoying me too.

They started with the terrible week the markets had following Obama’s election. What is not mentioned in these commentaries is that investment banks and financiers gave overwhelmingly to Obama over McCain. Either they support Obama’s politics over its effect on markets (in which case, perhaps we should take that as a cue) or they didn’t think Obama’s presidency would be relatively bad for markets or they wanted to donate to a winner, in which case markets shouldn’t have fallen after the election because they all thought he was going to win anyway as indicated by the fact that they gave him much more money.

]]> By: Ja Muller http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61490 Ja Muller Tue, 27 Jan 2009 17:37:18 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61490 The major reasons the market tanked on Jan. 20 was because British banks had to be bailed out again so everything fell in Europe and Asia for 2 days in a row while US markets had been closed on Monday(MLK) so it was two days of bad trading condensed into 1. The major reasons the market tanked on Jan. 20 was because British banks had to be bailed out again so everything fell in Europe and Asia for 2 days in a row while US markets had been closed on Monday(MLK) so it was two days of bad trading condensed into 1.

]]> By: lisleman http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61483 lisleman Tue, 27 Jan 2009 16:34:15 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61483 Thanks, but the media reporting and solid factual news are typically mutually exclusive. I'm always amazed of the reporting of a big number change in the DOW30 instead of the percentage change. Just basic math has a hard time in the media. Thinking of math - is this false correlation a "Black Swan" thing? I have tried reading that book but to be honest I gave up. Is there another explanation of the "Black Swan" concept/theory you could recommend? Thanks, but the media reporting and solid factual news are typically mutually exclusive. I’m always amazed of the reporting of a big number change in the DOW30 instead of the percentage change. Just basic math has a hard time in the media.

Thinking of math – is this false correlation a “Black Swan” thing? I have tried reading that book but to be honest I gave up. Is there another explanation of the “Black Swan” concept/theory you could recommend?

]]> By: Neal J. King http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/comment-page-1/#comment-61476 Neal J. King Tue, 27 Jan 2009 14:31:16 +0000 http://blogs.discovermagazine.com/cosmicvariance/2009/01/26/of-markets-and-weather/#comment-61476 Whoever links stock-market jumps to Obama's day of inauguration must think that stock traders are really stupid: The game is to <i>anticipate</i> how other people will react, and "get there first," not to wait until it's happening and then act. I'm also not thrilled with the tax cuts, as we seem to have learned from recent experience that monies given by tax cut go into saving rather than spending. But if this is what it takes to get a bit of Republican cover for the bill... that's a political decision, and I assume Obama is better at those than me. Otherwise, if Republicans just won't get with the program at all, and choose to try to make Obama (and America) fail instead of succeed, the alternative course of action will be to point out how busy they were tying together the shoelaces of the two feet instead of helping with useful ideas. If that message comes across, the Republicans will be in even a worse shape than before. It could go that way: with the Republicans led by Rush Limbaugh circling the wagons and shooting into the night. If so, it could go either way, but, as a non-fan of R, I suspect the probability is slightly greater that it will be Limbaugh's balloon that leaks and sags into the swamp. Whoever links stock-market jumps to Obama’s day of inauguration must think that stock traders are really stupid: The game is to anticipate how other people will react, and “get there first,” not to wait until it’s happening and then act.

I’m also not thrilled with the tax cuts, as we seem to have learned from recent experience that monies given by tax cut go into saving rather than spending. But if this is what it takes to get a bit of Republican cover for the bill… that’s a political decision, and I assume Obama is better at those than me.

Otherwise, if Republicans just won’t get with the program at all, and choose to try to make Obama (and America) fail instead of succeed, the alternative course of action will be to point out how busy they were tying together the shoelaces of the two feet instead of helping with useful ideas. If that message comes across, the Republicans will be in even a worse shape than before.

It could go that way: with the Republicans led by Rush Limbaugh circling the wagons and shooting into the night. If so, it could go either way, but, as a non-fan of R, I suspect the probability is slightly greater that it will be Limbaugh’s balloon that leaks and sags into the swamp.

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