Embedded option valuation... "Difficult to see. Always in motion is the future.” – Yoda (Star Wars). Models by nature are "accurate" when looking at the data from the past. The assumption that future data will conform to and repeat the patterns of the past is what modeling stands upon. As a friend once said to me after a painful lesson in life, we assume, and that makes an ass of u and me. Thank you for the reminder.
A broad thoughtful perspective from a dizzying height and viewpoint. Sometimes things are different until we finally realize they are not. Live and learn. Or not. Thanks.
Curtis Yarvin (aka Mencius Moldbug) shares your view that fiat currency is more akin to sovereign stock/equity issuance than a zero coupon perpetual bond. This has fascinating ramifications far beyond MMT. https://youtu.be/61emb86-740
Michael, I really want to thank you for putting out such thoughtful observations and commentary, and making it all available to the public at large. Who said there is no genuine altruism in this world?
I enjoy your new Substack newsletter, Simplify podcasts and Twitter views (Spaces or otherwise). I am a young engineer/investor trying to figure "stuff" out and enjoying the journey along the way. I look forward to the Richard Duncan author discussion. I'd love to see you chat with Mark Spitznagel or Taleb about their books. If you've already done this or written about their work, then please send me a link pointing me the way. Thanks for reading this (if you do) and I consider you signal in a sea of noise.
Execution of a particular corporate option can detract from value and certainly does not necessarily increase future value . A more levered capital structure of a firm which buys back enough stock to tip the firm into eventual failure in some possible buy improbable set of economic circumstances has not added value to that firm . In the end it is hard to distinguish "options" from "managerial decisions".
MMT is not a useful model on which to base public finance strategy. It implies an ability to predict intermediate term macroeconomic developments , and especially inflation, with a relatively high degree of accuracy. It then further presupposes a political system which will regularly adjust the levels and forms of taxation in a timely manner so as to optimally offset accelerating inflation. This is a fantastic - in every sense- assumption in modern democratic states. There is also a central planning delusion in ignoring, as just too hard, the extensive feedback loops which would develop among taxpayers, savers and foreign actors in currency and capital markets in response to the frenetic tweaking applying MMT to keep the economy close to some economic "red line" would require.
Mr Green - thank you for starting this substack... while twitter is fine and I feel the para-social buzz of listening to you for years on GWP, RV and eventually Doomberg, I'm thinking that a bright fella like yourself might need some mores space to essay larger concepts.
As you've told us a bit about your growing kid(s) on twitter, let me comment on luck as another Dad (and indeed granddad these days).
When speaking to young people about what I describe as an extraordinarily Lucky Life, I might use an aphorism that holds a bit of water IMO. "Luck can be a situation where preparation meets opportunity"..
... and while I downplay the preparation, people know me as the guy who says "the 5am club is for wimps!".. there's a tongue in my cheek when I say that, but nevertheless.
Today, as I read "well now you're just making stuff up" I thought - "Alright... I might already be in subscriptions, but, I'll upgrade to paid as this will be extremely valuable and I'd like to show my support".
Oddly, despite crawling all over substack to find a way of upgrading to paid, I don't see that option, short of cancelling and trying again. I'm not sure if that's a change you might have made (removing a paid option) or, maybe I imagined that I saw such an option when I 'lucked' into your substack.
Thank you for sharing your thoughts! You're in my highly curated 'always read' Twitter list and I so appreciate the work you're doing. Keep it up!
Embedded option valuation... "Difficult to see. Always in motion is the future.” – Yoda (Star Wars). Models by nature are "accurate" when looking at the data from the past. The assumption that future data will conform to and repeat the patterns of the past is what modeling stands upon. As a friend once said to me after a painful lesson in life, we assume, and that makes an ass of u and me. Thank you for the reminder.
A broad thoughtful perspective from a dizzying height and viewpoint. Sometimes things are different until we finally realize they are not. Live and learn. Or not. Thanks.
Curtis Yarvin (aka Mencius Moldbug) shares your view that fiat currency is more akin to sovereign stock/equity issuance than a zero coupon perpetual bond. This has fascinating ramifications far beyond MMT. https://youtu.be/61emb86-740
Michael, I really want to thank you for putting out such thoughtful observations and commentary, and making it all available to the public at large. Who said there is no genuine altruism in this world?
Yuki in Tokyo
It's not easy being Green. Thank you for sharing some early days.
Ribbit.
I enjoy your new Substack newsletter, Simplify podcasts and Twitter views (Spaces or otherwise). I am a young engineer/investor trying to figure "stuff" out and enjoying the journey along the way. I look forward to the Richard Duncan author discussion. I'd love to see you chat with Mark Spitznagel or Taleb about their books. If you've already done this or written about their work, then please send me a link pointing me the way. Thanks for reading this (if you do) and I consider you signal in a sea of noise.
Execution of a particular corporate option can detract from value and certainly does not necessarily increase future value . A more levered capital structure of a firm which buys back enough stock to tip the firm into eventual failure in some possible buy improbable set of economic circumstances has not added value to that firm . In the end it is hard to distinguish "options" from "managerial decisions".
MMT is not a useful model on which to base public finance strategy. It implies an ability to predict intermediate term macroeconomic developments , and especially inflation, with a relatively high degree of accuracy. It then further presupposes a political system which will regularly adjust the levels and forms of taxation in a timely manner so as to optimally offset accelerating inflation. This is a fantastic - in every sense- assumption in modern democratic states. There is also a central planning delusion in ignoring, as just too hard, the extensive feedback loops which would develop among taxpayers, savers and foreign actors in currency and capital markets in response to the frenetic tweaking applying MMT to keep the economy close to some economic "red line" would require.
Mr Green - thank you for starting this substack... while twitter is fine and I feel the para-social buzz of listening to you for years on GWP, RV and eventually Doomberg, I'm thinking that a bright fella like yourself might need some mores space to essay larger concepts.
As you've told us a bit about your growing kid(s) on twitter, let me comment on luck as another Dad (and indeed granddad these days).
When speaking to young people about what I describe as an extraordinarily Lucky Life, I might use an aphorism that holds a bit of water IMO. "Luck can be a situation where preparation meets opportunity"..
... and while I downplay the preparation, people know me as the guy who says "the 5am club is for wimps!".. there's a tongue in my cheek when I say that, but nevertheless.
Today, as I read "well now you're just making stuff up" I thought - "Alright... I might already be in subscriptions, but, I'll upgrade to paid as this will be extremely valuable and I'd like to show my support".
Oddly, despite crawling all over substack to find a way of upgrading to paid, I don't see that option, short of cancelling and trying again. I'm not sure if that's a change you might have made (removing a paid option) or, maybe I imagined that I saw such an option when I 'lucked' into your substack.
All the best to you and your family.