Tuesday, March 7, 2017

Quit leaving your overflow on the dock

If you do that you get lower prices and a recession. Then the Overtock guy buys up the excess at a discount.

This chart shows the probability that a distribution of prices has shifted down. The chart courtesy of .

How is that computed? The distribution of prices have to be well rounded if they ae computing conditionals on he mean.  When the model breaks down, deflation appears.  So, not having read the article, I can guess they did this right because the deflations happened at the crash, as it should be.

I am interested in  the spikes to the right, deflation probabilities have gone up, as have recession probabilities. The deflation events ate spread abut, like a random walk. I consider that normal.   The economy should be experiences a random walk of price hikes and decreases, as that is the only way to force the total distribution to be well rounded. Well rounded distribution of prices, but chaos in the bit error flow.

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