Technical history

The history of technical analysis is the subject of my latest piece at Research magazine: "Just Technicalities?" Excerpt:

The late Nobel Prize-winning economist Paul Samuelson, key figure in his profession and author of its biggest-selling textbook, wrote scornfully about “gypsy tea-leaf readers, Wall Street soothsayers and chartist technicians.” He referred to technical analysts’ efforts to anticipate financial price moves based on charts of earlier market data as “esoteric,” and he did not mean that in a good way.

Technical analysis flew in the face of the efficient-markets hypothesis, which dominated late-20th-century academic finance, and which Samuelson helped develop. If markets rapidly assimilate information relevant to prices, as the hypothesis holds, then prices would move in a “random walk” based on unexpected events. Such randomness, in this view, would defeat any efforts to extrapolate the future by charting the past. 

The attitude of academic finance theorists toward technical analysis often has been likened to that of astronomers regarding astrology. But whereas astronomy Ph.D.s still show approximately zero interest in horoscopes, technical analysis increasingly has gotten some recognition — as at least worth discussing, if not embracing — from the academic world.

The article is currently located here.

Quick links

Recommended weekend reading at the intersection of lifestyle and politics:

"Thoughts from a Country Mouse," by Walter Russell Mead, The American Interest.

"No Free Locavore Lunch," by Virginia Postrel, the first of her new column in the Wall Street Journal.

Rhino calf

Given my affinities for rhinos, babies and RINOs, I should note this piece of good news from Nepal: a baby rhino was born in Nepal's Bardia National Park earlier this month. One of the best things about our trip to Chitwan National Park last year was the up-close views of the one-horned rhinos. (See pic to right below.)

Rand Paul's Hitler twaddle

Here's Rand Paul, demonstrating how ideology can imprison a mind and foster historical ignorance:

"In 1923, when they destroyed the currency, they elected Hitler. And so they elected somebody who vilified one group of people, but he promised them, 'I will give you security if you give me your liberty,' and they voted him in. And that's not to mean that anybody around is Hitler, but it's to mean that you don't want chaos in your country. And we could have chaos, not just because of the Democrats, but because the Democrats and the Republicans have all been spending us into oblivion."

Some problems:

1. Hitler did not come to power in 1923; rather it was 1933.
2. Hitler was never elected, though he was initially appointed by a democratically elected government.
3. When Hitler did come to power, the major economic problem in Germany was not destruction of the currency or hyperinflation but rather that the Depression had begun and unemployment was soaring.
4. Hitler has no particular relevance to the spending policies of the Democrats and Republicans.

UPDATE: This post was previously titled "Rand Paul's gibberish," but I felt that could refer to too many other things.

Presidential reading

I find this passage, from a National Review column by Tevi Troy that's excerpted on today's WSJ op-ed page, not very persuasive:

If you look at President Obama's reading list over the years, it has a clear ideological tilt. He has read a host of books by such liberal authors as Thomas Friedman, but precious few books by conservative ones. Bush, on the other hand, often mixed liberal authors, including Kurlansky and even Camus, in with his Natan Sharansky ("The Case for Democracy") and Eliot Cohen ("Supreme Command").

If Bush's "liberal authors" were Camus -- who wrote philosophical novels, was to the right of many French intellectuals of his time and is long dead -- and Kurlansky, who writes microhistories about subjects such as salt and codfish, then Bush was hardly immersing himself in liberal policy analysis. It doesn't seem to me that either Bush or Obama is very well-versed in writings that disagree with their own preconceptions -- but then, how many of us are nowadays?

Price of greatness

Thought for the day:

The price of greatness is responsibility. If the people of the United States had continued in a mediocre station, struggling with the wilderness, absorbed in their own affairs, and a factor of no consequence in the movement of the world, they might have remained forgotten and undisturbed beyond their protecting oceans: but one cannot rise to be in many ways the leading community in the civilised world without being involved in its problems, without being convulsed by its agonies and inspired by its causes.

-- Winston Churchill, 1943

Meanwhile in the multiverse

This just in from somewhere very far away: "GOP Gets It Right ... In Alternate Universe." My latest at FrumForum. Excerpt:

Following the recent GOP primary victories, the Responsibility Movement appears poised for further gains in the November elections. The grassroots movement has unified Republicans by emphasizing fiscal responsibility, personal responsibility, thoughtful rhetoric and sober policy analysis.

Meanwhile, Democrats are dismayed at public perceptions that they are the party of irresponsibility. The Obama administration is on the defensive against charges that its expansions of government spending and debt are reckless. Moderate Democratic voters increasingly are crossing party lines to join the Responsibles, as the movement’s activists are known.

Whole thing here.

MisTimed

C'mon Time magazine. I open the Sept. 20 issue looking for something to read over breakfast and there's a history (mostly not online) of book burnings that includes this:

1650 A subversive theological text written by William Pynchon is torched in Boston Common--the U.S.'s first known book burning.

Why didn't they respect the First Amendment back in 1650?

How to really save the moon

Science writer Alan Burdick wants to "Save the Moon." Excerpt:

The moon, already busy with probes and satellites, will surely get busier. At least five countries aim to send astronauts there in the next 10 to 20 years. Valuable minerals, including helium-3 and perhaps uranium, await exploitation. Lately when the moon hits my eye, it looks the way Antarctica looked not so long ago: like both a natural marvel and a tantalizing morsel, rich with subsurface resources -- if only we could easily extract them. So I'm thinking: what the moon needs is its own Antarctic Treaty. Make it off-limits to everyone but scientists. Let's save the moon, before it's too late.

In other words, "save the moon" so it can be the exclusive province of a tiny handful of scientists. This is grossly inequitable (what about the rest of humanity and the moon's many possible uses?) and also ultimately self-defeating. It would leave the moon subject to the Tragedy of the Commons where the lack of ownership provides incentives to misuse and abuse assets. In fact, such problems have been manifest in Antarctica, as well as in the oceans, in the atmosphere and in debris-cluttered low-Earth orbit.

A better approach: allow property rights on the moon (as I discuss here and here). Yes, there should be nature reserves, parks and heritage sites (and a thriving ecotourism industry to support them). But there should also be areas open for mining helium-3, digging up material for solar arrays -- make the moon part of an extraterrestrial clean-energy industry -- and more. Save the moon by regulating its uses and by making it economically valuable.

RINO reflections

My exercise in political autobiography: "How I Joined the Vast RINO Conspiracy." Excerpt:

I don’t recall any secret initiation rites or mysterious handshakes, but I once was a member in good standing of the Vast Right-Wing Conspiracy. How then did I become a so-called Republican in Name Only — a dreaded RINO, by the right’s current lights?

Having been involved in political journalism (as well as economic journalism and science journalism) for about two decades, I’m inclined to look back and try to figure out what’s changed in the last couple of years. Is it me, the right, or both?

Whole thing at FrumForum.

Park Place addendum

Cathy Young, whom I'm delighted to see writing for FrumForum, provides what strikes me as an eminently fair-minded analysis of Imam Rauf, the founder of the much-debated mosque/Islamic center that may or may not ever come into existence: "Who is this Imam Fooling?"

The upshot, as I see it: no "stealth jihadi" but not a clearly appealing figure either. And this ambiguity makes me think a little more about the anti-mosque campaign: The campaigners don't like or trust Rauf, but they're appealing to him to move the planned project, and if he builds it there anyway, apparently that will be a "defeat" for the United States. Thus, the anti-mosque campaigners have given Rauf a degree of power he certainly never would have had were it not for the massive publicity stirred up by the anti-mosque campaign.

UPDATE: And a very good piece at RealClearMarkets by Steven Malanga: "The Real Debacle at Ground Zero." Upshot: "Twelve years is a long time to bring back to the site what was its essential component when it was attacked: commerce."

Space talk

My August 31 interview on the Gabe Wisdom Show about space commerce, including the prospects for doing business on the moon and asteroids, is temporarily available here and will soon join the podcasts here.

A tradition with a bad track record

Ron Paul:

A return to the traditional U.S. foreign policy of active private engagement but government noninterventionism is the only alternative that can restore our moral and fiscal health.

Sure, because it worked so well in the run-up to World War II.

Hello readers

Greetings to the hundreds of people who came to this blog from FrumForum yesterday (and especially to those of you who are back today), along with all others. Quicksilber is updated reasonably regularly, albeit not with the compulsive frequency that makes top bloggers what they are. There are also links, to the right, of some of my published work, including at FrumForum where I hope to keep up a decent pace in the coming months. In addition, I maintain a Twitter feed. Many thanks for reading.

Geography books

Review copy received: The World in 2050: Four Forces Shaping Civilization's Northern Future, by Laurence C. Smith. The thesis evidently involves global warming making the Arctic more important in geopolitics. Interestingly, I recently saw Robert Kaplan on Fareed Zakaria's excellent new show GPS, discussing his book Monsoon: The Indian Ocean and the Future of American Power (of which I've also requested a review copy) and making a case that Russia willl be a lesser power than China because the latter has a long warm-water coastline and the former is stuck up there in the Arctic. They can't both be right.

UPDATE 9/20: Actually, the Smith book suggests that China eventually might buy -- or even just take -- thinly populated sections of Russia for itself, so maybe the two books are not so contradictory. Monsoon publisher, am still waiting for my review copy.