Sumner, Wilson, Harding, Keynes

why of course EMH worked fabulously well in the case of Citi, now didn't it... oops Citi stock dropped another cent, wonder what news the efficient market was reacting to!!

Spot the number of mistakes in the paragraph from Sumner's article
"I’d go to Vegas and put $5 million on numbers 1 through 34 on the roulette wheel. The odds are roughly 90% I’d win ... "

Can someone teach Sumner some probability please?

one-two punch indeed

On Wilson, lest we forget, in his last year, the man had (I think) two strokes. He then conspired with his wife, who became a de facto president. She would scribble notes from his bedroom and send them out as official statements and orders.

WIlson campaigned on peace in 1916 and gallantly entered war in 1917. A bureaucratic progressive, a racist, a xenophobe, intolerant of dissent (see Eugene Debs), he represents a watershed in modern politics: the intellectual mountebank.

don't agree with all he said but it was very thought-provoking - thanks for the lilnk.

Two blanks on a roulette wheel, so we have 34/38 = 89.5%.

I'd call 89.5% roughly 90%, so where's the mistake? I suppose he's ignoring taxes....

The roulette wheel analogy is stupid, but his entire post is excellent.

Let's also not forget that Wilson re-instituted slavery (a.k.a. conscription).

Don't know much about Wilson's economic policies, but Sumner's analysis on that point seems right. I'm puzzled by the foreign policy analysis. Sumner lays WWII at Wilson's feet but doesn't even bother with hand-waving about the counterfactual. Europe was a basket case (or powder keg, pick your favorite cliche) before and after WW I. It's not at all clear that the US's involvement changed the odds of a rematch.

As for efficient markets, come on. Isn't it more obvious now than ever that efficient markets theory is at best a very, very imprecise approximation of reality? Investors pay attention to market movements and other investors' actions, resulting in a feedback loop which can take the market very far from equilibrium. Maybe Sumner wants to claim that perfect competition exists, too? Silly.

Greg - Wilson's responsibility for WWII is probably right. Wilson brought the U.S. into WWI - the Germans would otherwise have won, or at least achieved a compromise peace. Don't forget that Russia had left the war around the time America got in - and Germany was bringing the 1/2 of their army that had been fighting in the eastern front to the west.

If Germany had won, there would certainly have been no Versailles Treaty, no Nazis, and no Hitler. Hitler and the Nazis pretty clearly started the second world war. It's always possible another war of some kind would have occurred in Europe following a German victory in WWI, but highly unlikely to have been on the scale and with the horrible consequences of WWII.

I printed out the Wilson part and put it up on the wall of my cube