Another explanation as to why real time news is useless:
Mike Bloomberg became the richest man in New York by selling traders just fifteen seconds head start on the data they needed. Fifteen seconds costs thousands of dollars a month per trader. But in most cases, what we get online is not actually in real-time and it’s not news, either.
Getting ever closer to the first moment is expensive in other ways. It might cost you in boredom, because watching an entire event just to see the good parts takes time, particularly if there’s no guarantee that there will even be good parts.
It might cost you in filtering, because the less you’re willing to wait, the more likely it is that you’ll see news that’s incorrect, out of context or not nearly as valuable as it appears.
When journalists, analysts and pundits are all racing to bring you the ‘news’ first, you get less actual news and more reflexive noise. Go watch an hour of cable news from a year ago… what were they yelling about that we actually care about today? (more…)
Grade 3 Math Assignment
Tom has 1 apple.
Tom has promised to give Robbie, Jim, Anne and Mary, half an apple each.
How does Tom get 4 half apples from 1 apple?
While Robbie, Jim, Anne, and Mary are waiting for their half apple, Tom gets hungry and takes a couple bites out of the apple. How does Tom now turn a half eaten apple into 4 half apples?
And you aren’t allowed to call it an iApple and say it can do anything.
Here is the basic problem and why Italian and Spanish bonds are getting crushed again today (ignoring horrific unemployment data out of Spain).
If Italy defaults with a 40% recovery, there is 1.613 trillion euro of debt affected (that is up about 10 billion in about a month). That means creditors would lose 970 trbillion. Spain with 663 billion would cost almost 400 billion (its debt has shot up about 15 billion in a month).
The problem is that EFSF doesn’t take default off the table. It may delay the time to default (by helping roll debts as they mature), but all it mainly does is shift who would take the loss. The guarantors can’t handle losses that big. (more…)