Jan 15 2008
The Probability of Odds
Quote of the day:
“The probability is 50% and possibly higher …”
–Interview with Alan Greenspan by WSJ Real Time Economics
What is the probable target of a probability? Doesn’t that sound like a derivative of some sort?
Greenspan was talking about recession. A few very interesting points:
1. At age of 80, he is still doing research on economic issues, “I’ve put together a data system in which I analyze both new and existing home sales by means of financing.”
2. Sub-prime mortgage is completely out of the market. Hence, Greenspan sees the bottom of subprime-trigger mortgage crisis.
3. “Recessions don’t happen smoothly. They are usually signaled by a discontinuity in the market place, and the data of recent weeks could very well be characterized in that manner.”