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Megalomaniac

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Many of us wonder what drives President Trump.  Or more uncharitably, what is the nature of his mental instability. The natural place to turn is the psychiatric community, but they have walled themselves off from the discussion because of the American Psychiatric Associations's Goldwater Rule, which prohibits them from diagnosing anyone they have not personally examined. Now a few people are peeking out from that wall.

In an Op-Ed piece yesterday in the New York Times, under the cover of a broad discussion of how decisions should be made on whether someone, say Trump, is unfit to govern, the authors, two psychiatrists, (one by the way a Democrat and the other a Republican), wrote this:

"Today, diagnosis is often linked to observable traits, making evaluation at a distance plausible. Even if Mr. Trump refused to cooperate, diagnosis might be the easy part — perhaps too easy. Whether or not they can say so, many experts believe that Mr. Trump has a narcissistic personality disorder." 

Starting with this opening, we have a comment from a reader, a professor emeritus of psychology, featured as one of the NYT picks, who wrote that "Donald Trump, in words and behavior, has every single symptom needed for an unequivocal diagnosis of Narcissistic Personality Disorder according to the latest diagnostic manual (DSM-V) of the American Psychiatric Association." 

I have heard people casually being described as narcissists, so I checked out what Narcissistic Personality Disorder really is. In the Wikipedia entry, the first thing I saw is a synonym: Megalomania. This does not bode well -- it is one thing call someone a narcissist, or to go further and have a serious clinical discussion a personality disorder.  It is another to be saying, in different words, that your country is run by a megalomaniac. 

Then I skipped down to the symptoms:

  1. Grandiosity with expectations of superior treatment from others
  2. Fixated on fantasies of power, success, intelligence, attractiveness, etc.
  3. Self-perception of being unique, superior and associated with high-status people and institutions
  4. Needing constant admiration from others
  5. Sense of entitlement to special treatment and to obedience from others
  6. Exploitative of others to achieve personal gain
  7. Unwilling to empathize with others' feelings, wishes, or needs
  8. Intensely envious of others and the belief that others are equally envious of them
  9. Pompous and arrogant demeanor

Reflecting on these symptoms, I would submit that there is more clarity for a diagnosis of President Trump based on his observed behavior over the course of his presidency than there would be by having a personal examination by a psychiatrist. Trump is mentally ill, the diagnosis is clear, and it is time for those in the psychiatric community to come forward. Literary, our country is being run by a megalomaniac. 

https://t.co/8WS35YWB0J

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How the Father of Arbitrage Pricing Theory Influenced Wall Street. Interview with the late Stephen A. Ross https://t.co/8WS35YWB0J — moneyscience…

Value-at-Risk and Expected Shortfall for the major digital currencies. (arXiv:1708.09343v1 [q-fin.RM])

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Digital currencies and cryptocurrencies have hesitantly started to penetrate the investors, and the next step will be the regulatory risk management framework. We examine the Value-at-Risk and Expected Shortfall properties for the major digital currencies, Bitcoin, Ethereum, Litecoin, and Ripple. The methodology used is GARCH modelling followed by Filtered Historical Simulation. We find that digital currencies are subject to a higher risk, therefore, to higher sufficient buffer and risk capital to cover potential losses.

Spontaneous Segregation of Agents Across Double Auction Markets. (arXiv:1708.09327v1 [q-fin.EC])

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In this paper we investigate the possibility of spontaneous segregation into groups of traders that have to choose among several markets. Even in the simplest case of two markets and Zero Intelligence traders, we are able to observe segregation effects below a critical value Tc of the temperature T; the latter regulates how strongly traders bias their decisions towards choices with large accumulated scores. It is notable that segregation occurs even though the traders are statistically homogeneous. Traders can in principle change their loyalty to a market, but the relevant persistence times become long below Tc.

The Joy of Leadership: How Positive Psychology Can Maximize Your Impact (and Make You Happier) in a Challenging World

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The difference between flourishing and floundering is 10X. The difference between quantity and quality is a factor of 10. The difference in levels of engagement is exponential. People functioning at the highest level are what the authors call 10x leaders. Research on these leaders consistently brought up five major strengths. This book teaches readers to become a 10x leader using these five key areas, the SHARP framework.

read more...

Effects of capital controls on foreign exchange liquidity

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The literature on capital controls has focused on their use as tools to manage capital and improve macroeconomic and financial stability. However, there is a lack of analysis of their effect on foreign exchange (FX) market liquidity. In particular, technological and regulatory changes in FX markets over the past decade have had an influence on the effect of capital controls on alternative indicators of FX liquidity ...

Informal one-sided target zone model and the Swiss franc

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This paper develops a new theoretical model with an asymmetric informal one-sided exchange rate target zone, with an application to the Swiss franc following the removal of the minimum exchange rate of CHF 1.20 per euro in January 2015. We extend and generalize the standard target zone model of Krugman (1991) by introducing perceived uncertainty about the lower edge of the band ...

Consultative document on the implications of fintech for banks and supervisors issued by the Basel Committee

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Press release about the Basel Committee issuing a consultative document on the implications of fintech for banks and supervisors (31 August 2017)

Implications of fintech developments for banks and bank supervisors - consultative document

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Base Committee document on "Implications of fintech developments for banks and bank supervisors - consultative document", August 2017.

How can financial modelling predict economic crises?

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Profile: Nobel Laureate Robert F. Engle III - Can we avoid financial crises in the future? https://t.co/VHBhskcDzT — moneyscience (@moneyscience) August 31,…

Day Trading in Wall Street’s Complex ‘Fear Gauge’ Proliferates

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Day Trading in Wall Street’s Complex ‘Fear Gauge’ Proliferates https://t.co/VG2eBRC9EY — moneyscience (@moneyscience) August 31, 2017

How important is the Global Financial Cycle? Evidence from capital flows

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This study quantifies the importance of a Global Financial Cycle (GFCy) for capital flows. We use capital flow data disaggregated by direction and type between Q1 1990 and Q4 2015 for 85 countries, and conventional techniques, models and metrics. Since the GFCy is an unobservable concept, ...

ASA on Twitter

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The Journal of Business & Economic #Statistics special issue looks at regime switching and threshold models. https://t.co/J9WtRuY5gO…

CFTC Orders Ikon Global Markets, Inc. to Pay $200,000 for Recordkeeping Violations

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The U.S. Commodity Futures Trading Commission (CFTC) issued an Order filing and simultaneously settling charges against Ikon Global Markets, Inc. for failing to keep and promptly produce documentation for thousands of gold Exchange for Physical (EFP) trades, in violation of the Commodity Exchange Act and CFTC Regulations.


Multilayer Aggregation of Investor Trading Networks. (arXiv:1708.09850v1 [q-fin.TR])

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Investor trading networks are gaining rapid interest in financial market studies. In this paper, we propose three improvements for investor trading network analyses: investor categorization, transaction bootstrapping and information aggregation. Each of these components can be used individually or in combination. We introduce a tractable multilayer aggregation procedure to summarize security-wise and time-wise information integration of investor category trading networks. As an application, we analyze the unique dataset of Finnish shareholders throughout 2004-2009. We find that households play a central role in investor networks, having the most synchronized trading. Furthermore, we observe that the window size used for averaging has a substantial effect on the number of inferred relationships. However, the relative node centrality in the networks is rather stable. We would like to note that the use of our proposed aggregation framework is not limited to the field of investor trading networks. It can be used for different non-financial applications, with both observable and inferred relationships, that span over a number of different information layers.


Extending Yagil exchange ratio determination model to the case of stochastic dividends. (arXiv:1708.09810v1 [q-fin.RM])

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This article extends, in a stochastic environment, the Yagil (1987) model which establishes, in a deterministic dividend discount model, a range for the exchange ratio in a stock-for-stock merger agreement. Here, we generalize Yagil's work letting both pre- and post-merger dividends grow randomly over time. If Yagil focuses only on changes in stock prices before and after the merger, our stochastic environment allows to keep in account both shares' expected values and variance, letting us to identify a more complex bargaining region whose shape depends on mean and standard deviation of the dividends' growth rate.

Dynamic Asset Price Jumps and the Performance of High Frequency Tests and Measures. (arXiv:1708.09520v1 [q-fin.ST])

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This paper provides an extensive evaluation of high frequency jump tests and measures, in the context of dynamic models for asset price jumps. Specifically, we investigate: i) the power of alternative tests to detect individual price jumps, including in the presence of volatility jumps; ii) the frequency with which sequences of dynamic jumps are identified; iii) the accuracy with which the magnitude and sign of sequential jumps are estimated; and iv) the robustness of inference about dynamic jumps to test and measure design. Substantial differences are discerned in the performance of alternative methods in certain dimensions, with inference being sensitive to these differences in some cases. Accounting for measurement error when using measures constructed from high frequency data to conduct inference on dynamic jump models would appear to be advisable.

The YAHOO! Case Study, 2016, Another Great Study in Strategy

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The Yahoo Case Study ... How the battle was lost before Marissa Mayer arrived https://t.co/fZyWWXYIYO http://pic.twitter.com/Lr7QH8Qs1o — John Ashcroft…

Avoiding Analysis Paralysis

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University of Chicago Professor Sanjog Misra commented to the business school's magazine about the problem of analysis paralysis.  Professor Misra offered an interesting perspective on how to avoid this classic decision trap.  He teaches a class focused on the use of algorithms and data analysis in marketing.  Misra argued that you have to be very clear about the question you are trying to answer BEFORE you begin your analysis.   Moreover, he advocated for more clarity about the answer you are trying to achieve.  Misra recommended trying to sketch out the parameters of an idea answer before you start evaluating the data.  He explained:

This isn’t a totally new idea, just new to analytics. In the business world, one wouldn’t want to put out a call for proposals with no details about what he or she is looking for. We wouldn’t want to wade through a million proposals to decide what suits our needs. That would be silly. Instead, when you put out a call for proposals or a purchase order, you typically outline a very detailed specification of what you want. Similarly, it’s worthwhile speccing out the “answer” you are looking to find. You don’t go around aimlessly.  One of my interpretations of Peter Kennedy’s 10 commandments about data analysis is, “Thou Shall Not Fish.” That’s something I emphasize in my classes. Of course, sometimes mining for data is actually what’s required. So if the objective is to fish, then you should be fishing. If it isn’t, the commandment applies.

Homes for our Troops

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Exactly one month from today, I'll be running the Twin Cities Marathon (October 1st).  The marathon represents one of my goals during this sabbatical year from Bryant University.  I'm running to raise funds for an organization called Homes for our Troops, an amazing and well-managed charity that helps build specially adapted homes for severely disabled veterans.  I hope you will join me in support of this incredible organization, rated four out of four stars by Charity Navigator.   You can donate by clicking here.  Thanks so much for your support!  




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