Who is going to win the election and will it affect job market for quants?

[quantie]

Do most people think that if Romney wins, there will be more jobs on Wall Street and more demand for quants?

 

[bigbadwolf]

I don't. The policies are more or less the same. For reasons difficult to put into words, I think the momentum of decline will pick up after the elections (could be wrong) because the powers-that-be have desperately tried to maintain a facade of normality for the last few months.

A German perspective:

http://www.spiegel.de/international...ism-and-the-downfall-of-america-a-865437.html

http://www.spiegel.de/international...n-the-decline-of-a-great-nation-a-865295.html

 

[Daniel Duffy]

Do most people think that if Romney wins, there will be more jobs on Wall Street and more demand for quants?

Unlikely.

 

[alain]

Do most people think that if Romney wins, there will be more jobs on Wall Street and more demand for quants?

if you were going to bet (put real money on the line), you will bet on Obama to win.

Nate Silver is being famous lately because of his model to predict outcomes of political events. I knew of him way before he went to be a political blogger but in baseball circles. He was very good at it so I don't doubt he is still good as an odds maker. A lot of people criticize him but that only shows a total lack of understanding of math.

 

[Andy Nguyen]

What will it mean for Wall Street?
http://dealbook.nytimes.com/2012/11/06/an-election-guide-for-wall-street/

 

[Junyeol Suh]

What do you think of this whole fuss about economy in past presidential debates?
There was a recent Bloomberg article about why these economic policy debates don't make any sense.
http://www.bloomberg.com/news/2012-07-23/the-u-s-economic-policy-debate-is-a-sham.html

Looking at comments in WSJ, I was really shocked to see some people actually believe that if the government didn't bail out the banks, the economy would've gotten much better...

 

[Daniel Duffy]

What do you think of this whole fuss about economy in past presidential debates?
There was a recent Bloomberg article about why these economic policy debates don't make any sense.
http://www.bloomberg.com/news/2012-07-23/the-u-s-economic-policy-debate-is-a-sham.html

Looking at comments in WSJ, I was really shocked to see some people actually believe that if the government didn't bail out the banks, the economy would've gotten much better...

In the 90's Sweden went through a housing crisis. It let a number of banks go bankrupt and did not 'save' them.

In Ireland the taxpayer is paying Euro 60 bn debt for the risks taken by Anglo Irish Bank. The profit was privatised while losses were socialised. The people have to pay to the last penny. Something wrong.

 

[bigbadwolf]

In the 90's Sweden went through a housing crisis. It let a number of banks go bankrupt and did not 'save' them.

In Ireland the taxpayer is paying Euro 60 bn debt for the risks taken by Anglo Irish Bank. The profit was privatised while losses were socialised. The people have to pay to the last penny. Something wrong.

In Europe in the '20s and '30s, European fascism (Italian and German) involved the takeover of the state by industrial capital, the state being used to keep industrial capitalism going in a time of crisis. Today it's the takeover of the state by finance, where "losses and costs get socialised and profits remain private." This reality can't be acknowledged by politicians and was of course missing from the worthless debates.

 

[Junyeol Suh]

I totally agree with Dr. Duffy that there is something wrong with big banks taking taxpayers as hostages.
However, if those banks actually failed during the crisis, wouldn't have it been devastating for recovery?
I thought the whole point of saving these big banks was to make sure that companies can have access to
the capital market, which is essential for companies to carry out business.

 

[bigbadwolf]

However, if those banks actually failed during the crisis, wouldn't have it been devastating for recovery?

What "recovery?" They are zombie institutions that are masquerading as living. The "big lie" (a la Hitler) of today is that the "recovery" would have been jeopardised if the large banks had been allowed to bite the dust.

I thought the whole point of saving these big banks was to make sure that companies can have access to
the capital market, which is essential for companies to carry out business.

They are not lending anyway. And the big companies are sitting on at least $2 trillion worth of cash reserves -- but it makes no sense to invest that money today. These companies have no need for access to capital. And the banks are unwilling to lend to small- and medium-sized companies. There is no "recovery." Just buying time, treading water.

 

[Daniel Duffy]

I totally agree with Dr. Duffy that there is something wrong with big banks taking taxpayers as hostages.
However, if those banks actually failed during the crisis, wouldn't have it been devastating for recovery?
I thought the whole point of saving these big banks was to make sure that companies can have access to
the capital market, which is essential for companies to carry out business.

The Iceland experience is interesting, how they tackled the banking crisis. Seemingly the economy is doing well.

The banks in Ireland have been 'saved' but they are NOT lending to companies...

 

[DanM]

What "recovery?" They are zombie institutions that are masquerading as living. The "big lie" (a la Hitler) of today is that the "recovery" would have been jeopardised if the large banks had been allowed to bite the dust.



They are not lending anyway. And the big companies are sitting on at least $2 trillion worth of cash reserves -- but it makes no sense to invest that money today. These companies have no need for access to capital. And the banks are unwilling to lend to small- and medium-sized companies. There is no "recovery." Just buying time, treading water.

I agree 100% with this.

The ideal situtation would have been for failing institutions to file for Chapter 7 bankruptcy, liquidate their debt, and possibly allow other firms to purchase certain segments, assets, or business operations of those institutions. The following weeks or months may have been somewhat more volatile, but the recovery (an actual recovery) would have come much sooner.

 

[Junyeol Suh]

Good points!
I was wondering then why would economists generally think positively about bailouts and stimulus?
And can anyone explain what happened to Iceland?

Oh and here is a link to an interview with Michael Spence for those interested
http://live.wsj.com/video/spence-ob...D3.html#!8C9233EE-E887-4486-8CA8-5DA83D51F9D3

 

[Daniel Duffy]

Good points!
I was wondering then why would economists generally think positively about bailouts and stimulus?
And can anyone explain what happened to Iceland?

Oh and here is a link to an interview with Michael Spence for those interested
http://live.wsj.com/video/spence-ob...D3.html#!8C9233EE-E887-4486-8CA8-5DA83D51F9D3

http://en.wikipedia.org/wiki/2008–2012_Icelandic_financial_crisis


//

By mid-2012 Iceland is regarded as one of Europe's recovery success stories. It has had two years of economic growth. Unemployment is down to 6.3% and Iceland is attracting immigrants to fill jobs. Currency devaluation has effectively reduced wages by 50% making exports more competitive and imports more expensive. Ten year government bonds are issued below 6%, lower than some of the PIIGS nations in the EU. Tryggvi Thor Herbertsson, a member of parliament, notes that adjustments via currency devaluations are less painful than government labor policies and negotiations. Nevertheless, while EU fervor has cooled the government continues to pursue membership

 

[DanM]

Good points!
I was wondering then why would economists generally think positively about bailouts and stimulus?

Economics today is dominated by Keynesians (unfortunately.) Their track record over the years has been less than stellar. It shouldn't surprise anyone that their solution to the problem is to throw money at it.

 

[Zeuge]

Economics today is dominated by Keynesians (unfortunately.)

This is not true for academic economics -- the top departments are overwhelmingly neoclassical. New Keynesianism is a fringe paradigm.

 

[bigbadwolf]

This is not true for academic economics -- the top departments are overwhelmingly neoclassical. New Keynesianism is a fringe paradigm.

Yes, and Keynesianism as policy has been out for, oh, between 35 and 40 years (ironically it's Nixon claiming that "we're all Keynesians now" that sounded the death knell for it). Keynesianism was realised to be a spent force by the last '60s, when it was realised it was having unwanted side-effects (stagnation and creeping inflation, with ever-larger doses of stimulus required after each new downturn). It took about a decade for its replacement -- neoliberalism (deregulation, jettisoning full employment, unfettered capital flows, etc.) -- to be accepted and established as the new orthodoxy. This in turn led to the enduring crisis that started in 2007.

 

[Andy Nguyen]

Nate Silver is being famous lately because of his model to predict outcomes of political events.

http://blogs.reuters.com/felix-salmon/2012/11/07/when-quants-tell-stories/
The dominant narrative, the day after the presidential election, is the triumph of the quants. As Simon Jackman notes, essentially every single poll-averaging quant — Jackman himself, Drew Linzer, Sam Wang, you name it — managed to call every single state plus the presidential election: an astonishing 51/51 success rate.

That was part skill and part luck, as all such things are. Here’s the final electoral-vote probability distribution from Nate Silver, the most famous of the quants: