Posts filed under “Really, really bad calls”
“If the current betting trends are to be believed, it now seems certain that a recall is in the cards”
-Paddy Power, Irelands Biggest Bookmaker
July 14, 2010 press release
Speaking of dumb bets: Its time to revisit a recent prediction market “winner,” and review the strengths and weaknesses of these markets:
Recall this Bloomberg article:
Apple Inc. is increasingly likely to recall its iPhone 4 after complaints about poor reception and a critical review from Consumer Reports, according to a betting company that tracks odds for such events.
Paddy Power Plc, Ireland’s biggest bookmaker, said the chances that Apple will ultimately recall the phone have increased following what it described a “betting frenzy” after the Consumer Reports review. The consumer organization said on July 12 it wouldn’t recommend the phone because of its tendency to lose signal strength when held in a certain way.
Only, not so much.
We have a long history of criticizing so-called prediction markets. There is no “wisdom of the crowd” unless the prediction markets has a similar demographic profile to whatever group is being forecast (or polled). When their community of voters are similar to an electorate, they act as a deeper polling mechanism. When they try to forecast the decision making processes of dissimilar bodies — Juries, Boards of Directors, or in this instance, corporate management — they stink the joint up.
Apple IPhone 4 Recall Odds Increasing, Irish Bookmaker Says
Bloomberg, July 14 2010
As a follow up to yesterday’s look at Time magazine’s Housing covers, Paul Macrae Montgomery of Universal Economics was kind enough to share this report from 1992. In that research piece, Paul had made mention of an October 1st, 1990 cover story in Newsweek: The Real Estate BUST. > > How well did that cover…Read More
I have a commentary on the Time Magazine article coming this week — I find it is both inaccurate and misleading — but meanwhile, here is Jim Bianco’s take on it: ~~~ 1. Time Magazine – The Case Against Homeownership September 6, 2010 -Time: Homeownership has let us down. For generations, Americans believed that owning…Read More
Each year, I try to avoid writing anything about 9/11. But I had some issues to work through this year, and I find jotting a few notes down helps me. My personal experience on 9/11 was secondhand. I was in the LI office of the firm where I was Market Strategist. Our HQ and trading…Read More
We at the Big Picture have never been fans of economist Michael Boskin. The infamous Boskin commission was an intellectually dishonest exercise in clever ways to understate inflation, thus lowering Social Security obligations. (I found that approach cowardly, and instead offered up some SS truths). His commission helped the BLS to habitually understate inflation, the…Read More
> Martin Wolf, who has been more right during the period leading up to the crisis, and thereafter, than anyone else I can think of, blames the present economic malaise on political timidity: Obama was too cautious in fearful times: “Suppose that the US presidential election of 1932 had, in fact, taken place in 1930,…Read More
Invictus here. Been a while. Been a bit busy and, frankly, not much to say of late. As a general rule, I’d say that folks should refrain from posting on things they know nothing about. The old saying (Abraham Lincoln, I believe, Mark Twain, according to commenters’ citations, attribution in dispute) comes to mind, “Better…Read More
In this morning’s NYT column — Lehman’s Last Hours — Andrew Ross Sorkin wrote: “But what is clear is that the politics of the moment played a factor — or at least was discussed among senior and junior staff — in the decision not to lend to Lehman Brothers, perhaps the greatest mistake of the…Read More
Amongst the items coming out of the FCIC hearings last week were new docs that revealed exactly how over-reliant LEH was on daily, short term funding to cover their longer terms costs. It was a recipe for disaster, a trailer park in search of a tornado. Here is the WSJ: “In looking last week at…Read More
I have been arguing for the government to step away from propping up the housing market for several years now. It seems that economists are finally catching up with the idea. Today’s NYT has an article, titled Housing Woes Bring New Cry: Let Market Fall. Only I would argue its not new at all, and…Read More