A Stiglitz Anecdote



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 Joseph Stiglitz, who shared the 2001 Nobel Prize with George A. Akerlof and A. Michael Spence, had once served as President Clinton’s Chair of the Council of Economic Advisers. In this capacity, he was privileged to have joined cabinet meetings where he often found himself torn between "the ideals of economic theory and the compromises of practical political economy." See how these conflicts are worked out at the policy level in the following anecdote, taken from J. Barkley Rosser, Jr.'s Abstract on "A Nobel Prize for Asymmetric Information: The Economic Contributions of George Akerlof,Michael Spence, and Joseph Stiglitz":

During an episode of high oil prices that would lead President Clinton to decide to release oil from the Strategic Petroleum Reserve into the market, Stiglitz met with Clinton and Chief of Staff Leon Panetta to discuss the matter. Stiglitz advised against releasing the oil on the grounds that doing so would have no effect on the market and that the price of oil would come down on its own fairly soon anyway. Panetta responded to this argument by declaring that Clinton should therefore go ahead and release the oil anyway because “it won’t cause any harm and we’ll get the credit for the drop in the price of oil.” Panetta’s argument carried the day.

How Bad Is The Economy?

Let me share another good one from a Casey Research's Daily Dispatch:

The economy is so bad that…

I got a pre-declined credit card in the mail.

I ordered a burger at McDonald's, and the kid behind the counter asked, "Can you afford fries with that?"

CEOs are now playing miniature golf.

If the bank returns your check marked "Insufficient Funds," you have to call them and ask if they mean you or them.

Hot Wheels and Matchbox stocks are trading higher than GM.

Parents in Beverly Hills and Malibu are firing their nannies and learning their children's names.

A truckload of Americans were caught sneaking into Mexico.

Motel Six won't leave the light on anymore.

The Mafia is laying off judges.

BP Oil laid off 25 congressmen.

Congress says they are looking into the Bernard Madoff scandal. Oh great! The guy who made $50 billion disappear is being investigated by the people who made $1.5 trillion disappear!

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The Danger With October

Here's a funny (but true) quote I picked up from one of Casey Research's daily newsletter:

“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” –Mark Twain

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Amusing Management Mottos to Live By

Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.

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If you can stay calm, while all around you is chaos...then you probably haven't have no idea of what the problem is.

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Doing a job right the first time gets the job done. Doing the job wrong fourteen times gives you job security.

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Eagles may soar, but weasels don't get sucked into jet engines.

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Artificial Intelligence is no match for Natural Stupidity

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A person who smiles in the face of adversity...probably has a scapegoat.

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Plagiarism saves time.

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If at first you don't succeed, try management.

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Never put off until tomorrow what you can avoid altogether.

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Teamwork...means never having to take all the blame yourself.

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Never underestimate the power of very stupid people in large groups.

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We waste time, so you don't have to.

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Hang in there, retirement is only thirty years away!

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Go the extra mile. It makes your boss look like an incompetent slacker.

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When the going gets tough, the tough takes a coffee break.

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Indecision is the key to flexibility.

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Succeed in spite of management.
 
 
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Joke About Traders

I've got something funny here from AnalyticalQ.com:

A man in a hot air balloon realised he was lost.
He reduced his altitude and saw a man below.
"Excuse me, but can you help me?
I promised a friend I would meet him an hour ago but
I don't know where I am," he said.

The man below replied: "You are in a hot air balloon
hovering approximately 30 ft above the ground.
You are between 40 and 41 degrees North latitude and
between 56 and 57 degrees West longitude."

To which the balloonist replied:
"You must be a broker." To which the man on the ground said:
"I am, but how did you know?"

The reply came from above: "Everything you told me is
technically correct but I have no idea what to make of your
information, and the fact is I'm still lost.
Frankly, you've not been much help so far."

The man below responded: "You must be a trader."
To which the balloonist replied: "Yes, I am, but how did you know?"

To which the man on the ground said: "You don't know where you
are or where you are going. You have risen to your current position
due to a large quantity of hot air. You made a promise which you have
no idea how to keep and you expect me to solve your problem.
The fact is, you are in exactly the same position you were in
before we met, but now, somehow, it's my fault."

Biblical Humor

Q. Who was the greatest financier in the Bible?

A. Noah. He was floating his stock while everyone else was in liquidation.

Q. Who was the greatest female financier in the Bible?


A. The Pharaoh's daughter. She went down to the bank of the Nile and drew out a Little prophet.

Q. Which area of Palestine was especially wealthy?


A. The area around Jordan. The banks were always overflowing.

Cheat Sheet

This is an accountant joke, but since it is part of an i-banker's job to work with financial statements, I thought I could post this here as well:

“A very respected accountant was facing retirement. He had served loyally for 40 years, and in that long and distinguished career never misplaced or misreported a single penny. However, early in his career colleagues had noticed a foible.”

“Every morning when he arrived at work, the gentleman opened his top desk drawer, lowered his head over the drawer, and mediated for a full two minutes. Then he closed the drawer and started the day.”

“After celebrating the retirement of this beloved friend, his coworkers were sad to start a new week without him. But many decades of curiosity could now be satisfied, what accounting secret was hidden is in that drawer?”

“A large assemblage of accountants crowded around his desk early that Monday morning while the head of accounting opened his desk drawer to see what accounting mystery it held. The group listened with rapt attention as she read the small note taped inside his top drawer!”

“Debits on the left, Credits on the right.”

Always Count Your Fingers

A financier had a wide reputation as a man difficult to separate from his money. A couple of promoters approached him one day and tried to sell him on a scheme they had.

The financier talked with them  for a while but said he could give them no definite answer as yet. Telling them that he would communicate with them in a few days, he showed them out of the office.

One of the promoters seemed quite optimistic and voiced the opinion to his partner that he thought the financier was pretty well sold on their proposition.

"I don't know," replied the other skeptically. "He seemed too suspicious to me. Didn't you notice that, after shaking hands with me, he started to count his fingers?"

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The Legendary J.P. Morgan

A legend of doubtful authenticity has it that J.P. Morgan was once present with a group of men at a bar in the financial district. Beckoning to the waiter, he ordered a beer; at the same time, saying, "When Morgan drinks, everybody drinks." Everybody had a beer and when Morgan had finished, he slapped a dime upon the table, saying, "When Morgan pays, everybody pays."