“Being good…is not good enough! Everyone must be connected to our strategy, or we will find you, and weed you out! Information arbitrage is our business. If you don’t know what an information curve is, then find out! Position yourself in an information curve. Dominate the curve! Nick Leeson, who most of you know and all of you have heard of, runs our operation in Singapore, which l want all of you to try to emulate.” — Ron Baker, in Rogue Trader (1999)

So, the Obama Administration is ‘all-in’ on Summers, despite nearly everyone who hasn’t worked for him (and a number who have) thinking he’s not the best candidate.

When I was young people called me a gambler. As the scale of my operations grew, I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time. - Ernest Cassel

To win, you must understand the game, you must understand the players, and above all you must understand yourself. - Source unknown

Here is the long-awaited conclusion to the wonky 4-part discussion of safe retirement spending. We went pretty far down the rabbit hole, and I think the conclusions are useful.

In the last part of our look at dynamic rules for spending in retirement, we discussed how changing the allocation between stocks and bonds affects the maximum sustainable spending rate. We can summarize this relationship by plotting the highest feasible initial spending rate for any acceptable shortfall level.¹

The last post discussed a framework for evaluating simple dynamic spending rules.

How much can you safely spend out of a portfolio in retirement? Spend conservatively and you may be unnecessarily curbing the lifestyle and aspirations of you and your loved ones. Overspend and risk a shortfall and painful adjustment - in the extreme, the (hopefully apocryphal) “cat food” diet.

It’s not whether you get knocked down, it’s whether you get up. Vince Lombardi

If ‘The Graduate’ were made today, Benjamin Braddock might hear a well-meaning uncle stage-whisper ‘Big Data’ instead of ‘Plastics.’ (Runners-up: ‘The Cloud’, ‘Social Discovery’, ‘Gamification’, the list goes on.) ‘Big data’ is a buzzword that people throw around a lot. What does it mean? Large data sets are not new. The IRS, the Census, Walmart, money center banks have always had big data sets. What’s changed?

I didn’t really post as much as I would have liked this year.

Everybody talkin’ to their pockets / Everybody wants a box of chocolates / And a long-stemmed rose - Leonard Cohen

So, some people are talking about Hurricane Sandy putting people back to work, and others are pointing out that this is the ‘broken windows fallacy.’ True, a massive superstorm is usually not a good thing. Nevertheless, three quick points.

The Paul Ryan plan ‘Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax.’

There has been a lot of controversy about this process, and the notion that Germany will get stuck with massive losses if, following massive capital flight now in progress to Germany, the peripheral countries leave the euro.

“The crisis takes a much longer time coming than you think and then it happens much faster than you would have thought.” Rudiger Dornbusch.