Comments on: Greg Ip’s risk hairball

By: TFF

TFF — Tue, 05 Jun 2012 16:24:26 +0000

“So what assets, exactly, are risk-free at this point?”

Stocks of multinational consumer staples companies. Short of a true apocalypse, they will stay in business and continue to profitably supply our daily needs.

Maybe not completely risk-free, especially over shorter periods of time, but then nothing is truly risk-free these days.

By: dWj

dWj — Mon, 04 Jun 2012 22:56:47 +0000

So what assets, exactly, are risk-free at this point? What are the relative costs of carry of ammunition versus canned food?

By: Frank0570618

Frank0570618 — Mon, 04 Jun 2012 20:11:19 +0000

Agreed. I’m still trying to figure out how the failures of mutually interdependent trading partners can somehow lead to a series of statistically independent outcomes.

By: TFF

TFF — Mon, 04 Jun 2012 19:49:44 +0000

They aren’t even remotely independent. The Eurozone falling off could easily be a trigger of a Chinese hard landing, though the fiscal cliff is more political than economic (and thus harder to analyze the dependencies).

Also suspect the “Apocalypse” is an exaggeration. Would be global hard times, but then misery loves company.

By: TomWest

TomWest — Mon, 04 Jun 2012 19:26:55 +0000

But make the reasonable assumption that they’re independent variables

That would require a different definition of the term “reasonable” than I am familiar with.

Perhaps “For the sake of our model, let’s assume…”

By: FifthDecade

FifthDecade — Mon, 04 Jun 2012 18:54:23 +0000

Once you’ve made up a number it’s really easy to make it look pretty…

By: MorgantownJoe

MorgantownJoe — Mon, 04 Jun 2012 18:39:00 +0000

Felix,

the smile for China in the 5th row should be a frown.