Comments on: Shiller’s underwhelming innovations http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: different classes of microsd cards http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-53317 Sun, 28 Sep 2014 22:16:42 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-53317 Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.

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By: Tom Doak http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7533 Sun, 04 Oct 2009 06:56:31 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7533 I am thinking there IS one way that selling a lifetime monthly annuity including health insurance could be very profitable for the financial institutions: what if they sold a bunch of them on the assumption that eventually the government will have to take over these costs, at which time the “health care” portion of your annuity became a freebie to the financial companies?

THEY have the power to get a public health care passed if it’s in their interests.

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By: csodak http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7423 Thu, 01 Oct 2009 19:21:16 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7423 I’m not arguing that financial innovation is bad per se. I am claiming that instruments created through financial innovation can be healthy or unhealthy for the economy. It seems to me that it would make sense to create an independant body who determines the social benefit from the marketing of these instruments as well as the the ‘institutional character’ of the organizations marketing these products (the gun scenario applies here. this goes into corporate rights…a whole different animal).

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By: jdor http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7334 Wed, 30 Sep 2009 21:56:40 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7334 Just remember that congressman John Dingell wanted to shut down the commodity exchanges in the 80’s because he didn’t see any use for pork bellies. The innovation that followed, like portfolio insurance, bond and eurodollar futures might not exist today if everyone took your attitude toward financial innovation.

Spreads on the SPY are a penny wide due to these innovations and ECN’s that link to them.

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By: csodak http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7323 Wed, 30 Sep 2009 20:32:16 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7323 I think in fact that most everyone can understand these instruments provided they are given the equivalent education just as most everyone is capable of shooting a gun but I wouldn’t give someone who is either deranged or incompetent or a thief a gun. Market technocrats have proven to be deranged (Madoff, Sanford etc..), incompetent or thieves (any wall street exec/trader etc…)

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By: dWj http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7317 Wed, 30 Sep 2009 18:08:08 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7317 Complete markets would solve some information problems, and perhaps expose and burst some inconsistent assumptions; markets will never be complete, and the second best may not be the first best. I have some sympathy for Shiller’s views, and I expect if everyone in the market were as smart as Shiller they would work better than in the world we live in, but there’s something about this that kind of smacks of “Perfectability of Man”. The government is administered by humans, and empowering government technocrats to run the world tends not to work as well as might be hoped; letting market technocrats run the world is subject to the same failures. A system that assumes everyone is capable of understanding even fairly simple instruments like MBS tranches (or even just credit default swaps!) is built on a false assumption.

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By: csodak http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7313 Wed, 30 Sep 2009 17:15:16 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7313 Joe S…that is what duration projections are for.

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By: csodak http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7312 Wed, 30 Sep 2009 17:12:02 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7312 Per El Erian’s recent article all this bs needs to stop and soon before it’s to late. Its the level stupid, not the 2nd derivative.

Real estate for the MAJORITY…not speculators but the MAJORITY OF AMERICANS is their PRIMARY investment and its where they live ie: security. Residential real estate should always be viewed as a long term investment providing perhaps a return equal to inflation. Throwing off risk to another party ultimately invites speculation and creates price volatility in the underlying asset class and all the disasters that follow.

Was it not enough to see the 30 year mortgage rate stick to high levels while a perverse amount of capital ran to short term mortgage options that were thrown into cmo’s to hide the underlying risk, driving down the short rates and keeping the long rates artificially high??? Apparently not.

Watching this crisis unfold and how the worlds politicians, business men and woment and market particiapants deal with its challenges is like watching the insatiable apetite of the fat man in Monty Python’s movie ‘The Meaning of Life” which captures perfectly the current state of capitalism…we can only hope the outcome is not the same.

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By: Joe S. http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7306 Wed, 30 Sep 2009 15:29:49 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7306 btw, plain-vanilla mortgages are hellishly complex: prepayment risk. This is very difficult to model, and very difficult to lay off. Apart perhaps from discount instruments and bullet bonds, there are no simple investment products. Although straight bonds are a lot simpler than mortgages.

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By: paul http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/comment-page-1/#comment-7304 Wed, 30 Sep 2009 14:44:19 +0000 http://blogs.reuters.com/felix-salmon/2009/09/30/shillers-underwhelming-innovations/#comment-7304 It’s not just a matter of pricing such products appropriately, it’s a matter of making sure that the reserves actually get put away, and get put in things that don’t have the same damn risks as the ones you’re trying to hedge.

And of course what we’ve learned in the recent crisis (we have learned this, haven’t we?) is that zero-sum is the best outcome for a derivative. There are plenty of worse ones as well.

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