1) The Foolishness of Me; 2) Yeo-Yek and Constraints
1) Funny that Justin talks about my negligence just when I'm about to make my contribution. Anyway I was cooking spaghetti and sardines (huh? what kind of recipe is that, you say? I dunno either...but it tastes like spaghetti with sardines and I like both so it's not that bad I suppose) and I went to my com to check some stuff and when I returned I found that my friend Chew Xiang's plastic chopping board upon which I had been chopping onions was on the stove (which is this hi-tech looking thing where you touch this touchpad thingy and a red circle lights up or something). Obviously it'd been burnt slightly so I'm gonna buy him a new one. I wasn't feeling very good to begin with and this has gotten me down even more.
Going back a little, on Friday I was cycling when my nalgene water bottle which I love very much slipped out of my bag and crashed onto the road. I stopped the bike and picked it up and water was running down my fingers. In that instant my heart sank and I knew my nalgene was no more. True enough, I flipped it over and water began dripping profusely onto the pavement, like my life's blood seeping away into this harsh capitalist world. I opened the cap and saw a small crack running down the mouth, much like the ulcerous crack running down my mouth due to my heatiness as well.
I suppose my problem is that I become too affixed to material things, one of which obviously is money. Well if I were filthy rich I wouldn't really care, apart from the sentimental value of items (in light of the maths that has been going on here, I'll say that nalgene could have been just sentimental feelings but correcting for that, a regression involving both nalgene incident and the burnt cook-board reveals a non-insignificant correlation between feeling of loss and material damage, thus proving that it's not just sentimental feeling but material loss that hurts me as well). But the thing is that I'm running down my savings very quickly and there are some liquidity constraint problems so I can't easily buy everything again.
2) So when you guys talk about investments and stuff I really wonder if this is applicable to Singaporean undergrads in imperfect (even wholly unresponsive) capital markets or if it's just talking about New Classical type models that don't have much relevance to us rigid and sticky common-folk. (And by rigid and sticky I clearly mean in terms of market responsiveness, not whatever nonsense you might be thinking about.) Furthermore I propose that using such models obscures the fact that some investors have little liquidity constraint. A Singaporean firm, let's call D for example, in true Singaporean fashion, chooses to rely on internal financing for safety reasons (perhaps its risk aversion has increased from recent investment failure, or banks are unwilling to lend on account of a poor track record); meanwhile, some swanky Wall Street gig has the willingness and ability to access large flows of external finance that seem to fall from the sky and just eats up whatever assets are available, perhaps even pushing the stock price beyond our D's reach. D is reduced to looking for cheaper assets which may not yield that good a return while W (for our Wall St firm) gets to build on the borrowed finance, return the loans (or even not return and borrow further!) and still have a lot more than D to spare. This is akin to insider-outsider explanations for hysteresis effects, and I'm certainly going hysterescal now.
Well, this is my contribution to the Yeo-Yek hypothesis (2006). I suggest that grounding our theories on real-world imperfections may better aid us in understanding current phenomena such as D-type firms' inability to make headway with other assets (a possible after-effect of an initial bubble-burst); the importance of liquidity constraints also leads me to propose the possible solution of forming 'clubs' where finance and even information that bears on expectations can be pooled.
Going back a little, on Friday I was cycling when my nalgene water bottle which I love very much slipped out of my bag and crashed onto the road. I stopped the bike and picked it up and water was running down my fingers. In that instant my heart sank and I knew my nalgene was no more. True enough, I flipped it over and water began dripping profusely onto the pavement, like my life's blood seeping away into this harsh capitalist world. I opened the cap and saw a small crack running down the mouth, much like the ulcerous crack running down my mouth due to my heatiness as well.
I suppose my problem is that I become too affixed to material things, one of which obviously is money. Well if I were filthy rich I wouldn't really care, apart from the sentimental value of items (in light of the maths that has been going on here, I'll say that nalgene could have been just sentimental feelings but correcting for that, a regression involving both nalgene incident and the burnt cook-board reveals a non-insignificant correlation between feeling of loss and material damage, thus proving that it's not just sentimental feeling but material loss that hurts me as well). But the thing is that I'm running down my savings very quickly and there are some liquidity constraint problems so I can't easily buy everything again.
2) So when you guys talk about investments and stuff I really wonder if this is applicable to Singaporean undergrads in imperfect (even wholly unresponsive) capital markets or if it's just talking about New Classical type models that don't have much relevance to us rigid and sticky common-folk. (And by rigid and sticky I clearly mean in terms of market responsiveness, not whatever nonsense you might be thinking about.) Furthermore I propose that using such models obscures the fact that some investors have little liquidity constraint. A Singaporean firm, let's call D for example, in true Singaporean fashion, chooses to rely on internal financing for safety reasons (perhaps its risk aversion has increased from recent investment failure, or banks are unwilling to lend on account of a poor track record); meanwhile, some swanky Wall Street gig has the willingness and ability to access large flows of external finance that seem to fall from the sky and just eats up whatever assets are available, perhaps even pushing the stock price beyond our D's reach. D is reduced to looking for cheaper assets which may not yield that good a return while W (for our Wall St firm) gets to build on the borrowed finance, return the loans (or even not return and borrow further!) and still have a lot more than D to spare. This is akin to insider-outsider explanations for hysteresis effects, and I'm certainly going hysterescal now.
Well, this is my contribution to the Yeo-Yek hypothesis (2006). I suggest that grounding our theories on real-world imperfections may better aid us in understanding current phenomena such as D-type firms' inability to make headway with other assets (a possible after-effect of an initial bubble-burst); the importance of liquidity constraints also leads me to propose the possible solution of forming 'clubs' where finance and even information that bears on expectations can be pooled.
posted by Anonymous at 2:46 AM
0 Comments:
Post a Comment
<< Home