It’s time for OpenAI to enter financial markets

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Source: Cineramble

Robinhood started with noble intentions. To steal from the rich and give to the poor. Unfortunately, like many tales of good intentions, the truth isn’t as appealing as myth. I’m talking, of course, about the trading app, not the historical figure.

Ultimately, however, Robin Hood was quite possibly used as a stock alias for thieves. The moral of the story is that we shouldn’t allow names, myths, and folklore to distort the underlying reality. In this case, that thieves can pretend to be men of the people.

And Robinhood is certainly a financial thief, of the legal sort.

Robinhood started…


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Source: Shall we kill the fat man?

TLDR: Strict utilitarianism would be a dangerous ethical code for an artificial intelligence to follow based on uncertainty alone. Weighted utilitarianism, where utilitarianism is combined with deontological systems, would be a preferable, although imperfect, alternative.

Utilitarianism is a moral theory that posits what is good is what maximizes collective happiness/well-being. This is often contrasted with “deontological” ethical theories where an action is intrinsically right or wrong based on broader ethical principles rather than on the consequences of the action.

For example, a deontological moral principle may be that it is wrong to lie, steal, or murder under any and all…


Recent research suggests containing a superintelligent AI is incomputable

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Source: Bits and Atoms

A Brief History of AI
The history of artificial intelligence is littered with promise, hype, under-delivery, and breakthroughs. As early as the advent of computers, the idea of a machine more intelligent than its creators sparked imagination of doom and utopia alike.

At first, hardware was much too slow and expensive, software was nascent, and data nearly non-existent. Initial predictions were that it would take a team of a couple of dozen engineers a summer to crack human level intelligence. That was back in the 60s.

Some of the first AI systems used symbolic logic, or hard coded rules to…


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Source: Multpl, Shiller Cape PE

Robert Shiller is a Yale economist who won the Nobel Prize in 2013 for his empirical work on asset pricing. He’s pioneered work in behavioral finance and narrative economics and is well renowned for correctly predicting the stock market crash of 2008.

The above chart is based on Shiller’s CAPE price earnings ratio. This ratio adjusts for inflation and business cycle variations. According to the CAPE ratio, the market is currently more highly valued than during Black Tuesday. The only time the market has been more highly valued was during the dot com boom. …


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Thanks to J.J. Pryor for the inspiration.

What is the economic theory of everything?

Is it too simple to call it ‘transactions costs’? Not at all. Think of the following simple example. I promise you that even the most skilful and manipulative salesperson is unlikely to convert every person to their product. Let’s say that 100 people buy the good but only 100 people decide to buy the right. How is that possible? All the ‘close’ meetings and persuading of the majority of the buying population just cost too much and eventually the project is not launched.

Not a bad…


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Individuals will generally vary from one another in many attributes, not just income. Let us suppose that individuals are generally heterogeneous in their inclinations, complex in their motivations, occasionally whimsical in their choices, and susceptible to a variety of social influences.

— Anwar Shaikh, Rethinking Microeconomics: A Proposed Reconstruction

Typically in an economics course, one starts with a utility maximization individual, then derives a market demand curve by aggregating, sometimes even using an “representative agent”.

However, as Anwar Shaikh points out, “But it does not follow that individual decision making is characterized by the rules of so-called rational choice and…


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Source: Britannica

Economics is traditionally defined as the study of the allocation of scarce resources which have alternative uses. Microeconomics is further defined as the study of individual decision making, or of supply and demand, price theory, market design, and so on. Macroeconomics is defined as the study of aggregative economic phenomenon, national accounts, GDP, fiscal and monetary policy.

In some sense, economics can be called the science of scarcity. …


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TLDR: There are three ways to get some extra trades in. 1. Trade in a cash account. 2. Trade the VXX and other hedges (like GLD and BND) and hold overnight. And 3. Trade options and quasi-close out same day.

According to the SEC, “FINRA rules define a pattern day trader as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period.”

So, one way to avoid day trading…


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(November 1st, 2020 10:30PM) Our first chart goes back to 2012. From 2012 to 2016, there’s a support/resistance channel that, extended to today, would give a fair value range for the Dow Jones of 21250 to 27250. For reference, the Dow currently sits at 26445.

There’s nothing objective about this range that really makes it a “fair value”, other than it was a strong range for 4–6 years and much of 2018–2019 was spent overvalued relative to it.

Reasons for bearishness include election uncertainty, potential tax hikes from a Biden administration, a resurgence of Covid cases, a potential lockdown, and…


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William Poundstone has an excellent book called The Doomsday Calculation, where he discusses various versions of the doomsday argument. However, in his book, he claims that the doomsday argument is incompatible with the simulation hypothesis. I believe he is incorrect, and hence the purpose of this post is to argue that the doomsday argument and the simulation hypothesis are not mutually exclusive.

Let’s start with the doomsday argument (DA). DA is based on something called the Lindy effect. “The Lindy effect is a theory that the future life expectancy of some non-perishable things like a technology or an idea is…

The Moral Economist

Thoughts on Economics, Politics, Philosophy, Ethics, and Computing by Adam Smith Reincarnated as Walter Morawa

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