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Falkenblog's Blog

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Median Anonymous Crypto Exchange Costs 1.5%, Sometimes 100%

June 2, 2019 Comments (0)

Gemini's Order GUIMany of the big exchanges like Gemini or Coinbase do not have lots of alt-coins, and if you don't have an account the process of creating one can take days if not weeks. They also can make it hard to place orders, as Gemini's default trade mode is incredibly infantile. Further, these exchanges put up significant hurdles for market makers, and the only thing that prevents collusive tactics is free entry. Regulators are happy to prevent competition if they can make sure they...

Convexity Explains the High BitMEX ETH Funding Rate

April 30, 2019 Comments (0)

BitMEX offers swaps that make it easy to lever a long or short bitcoin (BTC) and ether (ETH). The main reason it trades so much is that they are based outside of US or EU control in the little archipelago-nation of Seychelles, and also that it transacts only in Bitcoin. This combination makes it difficult for regulators to attack.Their swap contracts are like futures contracts without expiry dates. A futures market trades off of a futures price, which is different than the spot price...

Why Taleb's Antifragile Book is a Fraud

April 29, 2019 Comments (0)

In Nassim Taleb’ book Antifragile he emphasizes that ‘if you see a fraud and do not say fraud, you are a fraud,’ I am thus compelled to note that Antifragile is a fraud because its theme is based on intentional misdirection. The most conspicuous and popular examples he presents are also explicitly mentioned as not the essence of antifragility. Indeed, incoherence is Taleb’s explicit strategy, as the Wikipedia entry on Antifragility notes Taleb presents his book in a way to make it...

Robeco's Concise Financial History of Europe

July 22, 2018 Comments (0)

If you like finance and history, you'll love Robeco's "A Concise Financial History of Europe," written by Jan Sytze Mosselaar A lot of financial firms provide books to clients, and I bet if you visit Robeco in Rotterdam they'll give you one for your plane ride home, which is more than enough time to read it (100 pages, lots of pictures).It starts with Fibonacci introducing the Arabic number system in 1202, but interestingly the Florentine bankers prevented anything but Roman numerals...

Centralized vs. Decentralized Social Welfare Maximizers

May 17, 2018 Comments (0)

Faith in a select group of public servants to maximize social welfare is no better founded than the belief in the supernatural gifts of kings or noblemen. Just as misguided is the idea that good things, as decided by a majority, should be mandated. It should be remembered that our current prosperity and freedom have resulted from unwanted gradual changes in mores related to property rights, which when firmly established sparked the Industrial Revolution. Nobody planned that. Property rights...

The History of Individual Property Rights

May 10, 2018 Comments (0)

John LockeIt is important to understand that property rights are not grounded on logic, but no right is.The liberal ideas that gave rise to the Enlightenment are generally thought (eg, Steven Pinker) to be a break from a religious thinking. Yet the key liberal idea, individual rights, especially property rights, are an axiom with little justification outside Christian theology. As Feynman noted with regards to scientific laws, the process of finding new ones is not deriving them via logic, but...

Why My 1994 Low-Vol Dissertation Didn't Make Impact

April 16, 2018 Comments (0)

Pim van Vliet posted a link to my 1994 dissertation, noting it was an early documentation of the low-vol effect. One may wonder, why did this early evidence fall flat? Clearly, lots of things, but I'll try to highlight the keys.Here's my lead paragraph, which makes clear I saw the low vol effect before most everyone:This paper documents two new facts. First, over the past 30 years variance has been negatively correlated with expected return for NYSE&AMEX stocks and this relationship is...

How to Set Up Your Own Bitcoin/Ethereum IRA

August 20, 2017 Comments (0)

For the past couple of centuries technology empowered the state, put more things under its control. They have ultimate custody of all your financial assets, and custody is nine-tenths of the law. You simply can't hold $1M in financial assets in a form where 'The Man' can't grab it if he finds you an enemy of the state, which in many states includes righteous men.But like so many things the effect is not linear, in that now technology is putting power back in individuals. We can now...

Maxims

June 25, 2017 Comments (0)

My son is going to college this fall, and I wanted to give him a set of my favorite quotations. As his name is Max, I titled the book 'Maxims.' With only a little work in formatting, I was able to create a paperback and ebook on Amazon, so that I basically did this for the price of the New York Times.  I made it for him, but you can buy it on Amazon for $5, or $3 for the Kindle version (see here).Obviously, we want our kids to appreciate the things we think are really important. Whether...

Jordan Peterson's Business Cycle Theory

April 11, 2017 Comments (0)

University of Toronto psychologist Jordan Peterson has gained YouTube notoriety recently for speaking out against social justice warrior lunacy. However, it should be noted that his book, Maps of Meaning, is a very profound one. I heard him give a talk in which he mentioned initially that he was interested in economics, but was put off by the undefended assumption that people want to maximize their wealth. Most people want to be wealthy, of course, but they also want to have a fulfilling life,...