Implied Volitility Reflects Risk Premium

Implied volitility is typically greater than historical volitility. Why is that?

I suggest that reflects the value of a reduction of risk. 

What is worth more, a ticket for a 1 in 10 chance to earn $10, or a single dollar bill? It depends on how much money you have. If you have an un-ending money supply, you could buy an infinate number of tickets, and the value would be equal to the same number of dollar bills. 

But if you have a limited money supply, you might not want to take the risk. The value of risk reduction has evidence in insurance. If someone has an infinate money supply, insurance only makes sense if the insurance company has access to cheaper resources than you do; the reducion in risk is of no value. 

Similarly, stock option prices should incorporate the value of risk reduction whenever money supply is limited. In fact, the variance between historical and implied volititliy may be used to gauge the money supply.

Minumum Wage = Price Fixing

Minimum wage is price fixing. This price fixing hurts the American ecomony by preventing the meeting of supply to demand.

Protenctionist employment policies also hurt America. The demand that Mexicans exhibit for American jobs indicates a disequilibrim. 

In other words, Amarican un-skilled labor is over-priced. Minimum wage and closing the labor market to foreign competition artificially keep these prices to high. 

Here are the consequences:

1. Outsourcing: Many are moving their factories and services off-shore. This reduces demand for labor and makes the American economy less efficient.

2. High cost of living: Because unskilled labor is expensive, living in America is expensive. In the end, the high minimum wage is self perpetuating. If it were eliminated, the cost of living would go down, making the lower wage suitable.

In order for the labor market to be flexible and competitive, it needs to have artificial protection and price fixing removed from it.

Cloud computing Privacy Solution

The problem with google style cloud computing is the lack of privacy.

A solution would involve the separation of the data hosting and ap hosting. 

The ap would be downloaded onto the personal computer, and the data would be accessed using a private key that only the user has. The ap manipulates the data, and is uploaded and encryped so that the data center can't access the data either. 

The problem is that google style content based ads won't be possible, and gmail style indexing won't be available either.

Energy, Water & Transortation Solution

Here is an idea for a combined solution to global warming, fresh water and transportation.

Instread of traveling around the planet, we should travel through it. This would be done in subterranian vacume tubes. 

The tubes must be cooled with sea water in order to prevent the tubes from melting from the subterranian heat. 

The sea water becomes stream, and powers turbines that supplye electricity. The steam is sterile and desalinated.

Random Walk & Business

Here's a speculation: Proponents of the efficient market hypothosis are bright but unsucsessful busimessmen.

They have be bright in order to understand the theory behind it. However, business suceed when there is a discrepancy between the theory and the actual. Business thrives on finding inefficiency, and taking advantage of it.

That's how the financial world makes its money as well. 

Someone who doesn't belive that there is a discrepancy between the theory and the actual must not be able to detect it well, and therefore can't do well in business.

Corporate vs. Gov't Services.

Many government services are being replaced by private corporations. For example, security firms, private schools, and insurance companies are taking over where the government leaves off.

In the future, the domain of private corporations will expand, as the scale and power of those corporations increase. The gov't services will be minimized.

Public Participation In Gov't Decision Making

Why do we have reprisentatives in government?

In the old days, it was impractical to ask every citizen what they thought about the issue. However, modern technology renders this reason void.

The assumption is that the reprisentative knows better than you. Howver, many citizens are well informed about the issues at hand. Much more so than in the "old days"

I suggest that citizens be given a greater part in government decision making, in correlation with the ease of communication, and greater knowledge of citizens.