Every article you’ve seen that reports that somebody won a Nobel Prize of Economics is 100% propaganda. Did you know that there’s NO SUCH THING AS A NOBEL PRIZE FOR ECONOMICS.
Your Deep Trader’s Thought of the Day is that economics, in all its versions, is more of a religion than an art or a science. You have to take all kinds of leaps of faith about either the market’s or the government’s ability to allocate resources in a society. I’m pretty sure that personal, individual and economic freedom leads to macro economic prosperity and I can point to all kinds of proof of that, but it ain’t like proving gravity and it likely never will be.
So we should probably look at most economists as preachers rather than scientists. Maybe calling them artists is closer to the truth than scientists. Economics is not a a science, not even a so-called “social science”. And yes, I have a degree in economics. From wikipedia:
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an award for outstanding contributions to the field of economics. Although not one of the Nobel Prizes established by the will of Alfred Nobel in 1895, it is consistently identified with them. The Prize in Economics, as it is referred to by the Nobel Foundation, was established and endowed by Sweden’s central bank Sveriges Riksbank, in 1968 on the occasion of the bank’s 300th anniversary, in memory of Alfred Nobel. It was first awarded in 1969 to the Dutch and Norwegian economists Jan Tinbergen and Ragnar Frisch, “for having developed and applied dynamic models for the analysis of economic processes.”
Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy. Among them is the Swedish human rights lawyer Peter Nobel, a great-grandson of Ludvig Nobel. Nobel criticizes the awarding institution of misusing his family’s name, and states that no member of the Nobel family has ever had the intention of establishing a prize in economics.
In his speech at the 1974 Nobel Banquet Friedrich Hayek stated that if he had been consulted whether to establish a Nobel Prize in economics he would “have decidedly advised against it” primarily because “the Nobel Prize confers on an individual an authority which in economics no man ought to possess… This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.”
As for the markets, it’s mostly flat on the screens for the broader indices this morning, with S’s over N’s, meaning that the S&P 500 is up and stronger than the Nasdaq, which itself is actually slightly down on the day. So too is Apple, as the pullback from its highs is now a full 10% in magnitude. I nibbled on some calls April 2012 $700ish strike price calls last week after having trimmed down those calls at much higher levels near the highs and I’ll sit tight for now and wait for the stock to get below $620 or so before my next tranche buy.
I remain hedged and high on cash and the path of least resistance to the markets remains lower for the near-term. And I can say that with all the scientific authority of an Economist with a capital E. Ha.