The Best of the Aleph Blog, Part 9

This era covered February-April 2009, the nadir and the recovery.  What a time.

Financial Versus Actuarial Models of Risk

Cashflow-based models are superior to complex models relying on unstable correlations.

Who Do You Work For?

Do you act on what gives you immediate advantage, or do you try to act on what is best for all?

On Animal Spririts

An essay on Keynes lame idea that businessmen are irrational, when it is reasonable to assume that they take risk when it is warranted, and they don’t when it is not.

The Bane of Broken Balance Sheets

An essay at the nadir of the crisis trying to point out the problems when so many entities have borrowed too much.

They Voted For Change, They Got Bush-Plus

A simple summary of the Obama Administration.  Still true today.

Translation: We Really, REALLY, Hate You Guys!!

Explains why China can’t destroy the US, but the US could harm China.

Sell Stocks, Buy Corporate Bonds (II)

Good timing for anyone that wanted to buy high yield bonds, though it was a great time to buy stocks also.

Nonidentical Twins: Solvency and Liquidity, Redux

Points out why solvency and liquidity are closely related, and why we should be doubtful when someone says, “This is a liquidity problem, not a solvency problem.”

Ancient and Modern: The Retirement Tripod

Explains why we should be distrusting of modern retirement systems.

“Do Half”

Explains how to mange assets wisely when one is less than certain.

Book Review: Trend Following

I lock horns with Michael Covel, and much as I try to be reasonable over five articles, he treats me as a Cramer-wannabe.

This was the paper that had me talk before the SIGTARP staff.  Buffett read it, and from reports, liked it.  The New York Times commented on it.