I would very much like to go back in time and try that on Dr. Fontenot, my calc professor. Then again, I took the class pass/fail, and did pass (barely).

Maybe a better analogy for the current trend is to a bungee jumper. They hit the end of the bungee – looks like the bottom, but they continue to decelerate until they hit the literal bottom. Then they spring back upwards a short distance and then fall again. And again. And again….until they reach zero.

The problem with the parachute analogy is once the chute is deployed the ride to the bottom is usually steerable into a smooth glide patch until the bottom is found. I don’t think the economic recovery programs and policies are going to qualify as a parachute. A bungee chord, on the other hand……

1. this winter heating complaints were up well over 100%. Many small landlords, those who rent out two and three family houses were having problems with heating cost. Many of these same landlords can’t pay mortgages because their tenants can’t pay rent.

2. It looks like the Bronx is burning again. Commercial real estate that hasn’t been renting seems to be catching on fire. It might be coincedence that around the corner from me, on one block, both sides of the street have had three fires in about six weeks. Two land lords own either side of the street.For rent signs have been on some of the units for close to a year.

This happened in the Bronx years ago with residential real estate. Much of the south Bronx was burned down only later did people realize (admit) the landlords had something to do with it. The motive a falling real estate market.

Just an observation.

Splat.

A parachute opening would increase the upward force of air drag, causing temporary deceleration until equilibrium between the air drag force and gravitational force restabilizes at a resultant lower constant (terminal) velocity, resulting in no Splat.

Regardless, Newtonian physics does not apply to markets (and in fact have been usurped by Einstein’s theories in the real world for that matter). I don’t know why I am bothering to point this out since it’s all moot, just bored I suppose.

see: http://www.law.cornell.edu/constitution/constitution.billofrights.html

http://www.tenthamendmentcenter.com/

LSS: the more hands your $ goes thru, the fewer pennies you wind up with..

Hmmm maybe it is accurate…

Air resistance causes an increasing decrease (due to air resistance being due to velocity squared) in acceleration until acceleration ceases at terminal velocity.

However at terminal velocity the first derivative and the second derivative are zero. The rate of change has stopped there is no change. Velocity is not zero however that is not the same as acceleration.

Thanks for the reply. Normally, I just read the posts, but I’ve about had it with “quantabes” — that’s my term for quantitative wannabes!

Done a lot of mathematical modeling over the years, and, INVARIABLY, the client/end user either just didn’t understand the “initial & boundary” conditions — aka caveats stating the limitations of the model — or they simply chose to ignore them.

Recently, I ran across a link to “Naked Shorts” (url: http://nakedshorts.typepad.com/nakedshorts/2005/09/the_li_model_so.html) from 2005 titled “The Li model sometimes lies.” A brief quote follows:

“Most significant are cautionary remarks by David Li, a Chinese-born New York banker, currently with Barclays plc, who is credited with developing the basic model – the Gaussian cupola – used for pricing credit derivatives. Some quotes of note (but I do strongly urge you to read the entire article) with emphasis added:”

“The most dangerous part,” Mr. Li himself says of the model, “is when people believe everything coming out of it.” Investors who put too much trust in it or don’t understand all its subtleties may think they’ve eliminated their risks when they haven’t.”

” Much of that money is riding on Mr. Li’s idea, which he freely concedes has important flaws. For one, it merely relies on a snapshot of current credit curves, rather than taking into account the way they move. The result: Actual prices in the market often differ from what the model indicates they should be.”

” As with any model, forecasts investors make by using the model are only as good as the inputs. Someone asking the model to indicate how CDO prices will act in the future, for example, must first offer a guess about what will happen to the underlying credit curves – that is, to the market’s perception of the riskiness of individual bonds over several years. Trouble awaits those who blindly trust the model’s output instead of recognizing that they are making a bet based partly on what they told the model they think will happen. Mr. Li worries that “very few people understand the essence of the model.”

To all of the “investors” who either didn’t understand the essence of the model, or who chose to ignore its stated limitations, we have only one thing to say (loosely paraphrasing Oliver Hardy):

Here’s another fine mess you’ve gotten us into!