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How Game Theory Solved The 2011 Debt Ceiling Debacle
As we count down to doomsday or not (and equity investors pile their last cash on the sidelines into stocks), we thought some reflection on an interesting analysis of the last debt ceiling debacle was worthwhile. In a few brief minutes, William Spaniel shows the payoffs and decision trees that led to the decision to compromise on what was close to the Gang-of-Six middle ground when the stuff hit the fan last time.
2011 Preferences
Crucially, while the process is similar this time, it appears to us that the lack of middle-ground this time shifts the optimal path increasingly to a 14th Amendment possibility. Nevertheless, his process may provoke some thoughts on just how this "game" is played even as Boehner exclaims "this ain't no game."
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THIS GAME IS LOST
Game over, man. Game over!
https://www.youtube.com/watch?v=np9tBI7_nq8
WOULDN'T YOU PREFER A GOOD GAME OF CHESS?
http://www.youtube.com/watch?v=ecPeSmF_ikc
its no game...its a gong show. Boehner has a fuckin pussy, thats all i know.
So, if I eat healthy, exercise and avoid dangerous situations I can live longer and experience more life has to offer.
More of this - no thanks, bring on the MSG, transfats and booze!
Would you like to play Global Thermonuclear War instead?
Great presentation! But... Politicians defy gravity, logic and expect different results
Why people in the public and MSM accept the premise of the 14th amendment as stated is insane to me. The ONLY reason it was passed, was to say that the US government will only honor ITS OWN DEBT and not that of the Confederacy. That was the entire fucking point of the amendment. Now, with our excellent revisionist historian ivory tower scholars, we understand it to mean that it's unconstitutional to default.
I mean, it's fucking OK to shred the constiution at every turn, but when it comes to defaulting (which would ONLY happen if the government said, fuck you bondholders) we can't possibly do it because it's unconstitutional. Ridiculous.
Pussies are things of beauty and joy - if Boehner has one it's the only part of him that is a thing of beauty or joy.
DavidC
BB, lemme guess... Final score = 99:1
FUCK YOU BUDDY!
Game Theory: A Boehner in the hand is better than a Boehner in the bush
Not shorting any index below ES 1750 at this point.
@Bearwagon: "THIS GAME IS LOST".
Define "Lost". ;-) Every game has winners and loosers.
That's not exactly correct. Game Theory knows "lose - no deal" and "lose - lose" games, which have no winner, ever. ;-)
Modern day game theory means that if you are playing the game you lose. And if you are not playing you have no chance to win.
<Unless of course you are co-located next to a government cash register.>
Yellow flags went off in my mind at the 0:10 mark, when he said "...the US will soon be unable to pay its debts".
Look, Spaniel, as long as the USD is the GRC* (Global Reserve Currency), they can print till the cows come home -- and thus always "pay their bills". It'll just be with devalued currency, but "paid" they will be. Technically this is a form of default, but the fucking lawyers would not call it that.
GIGO.
* You can have a Regional Reserve Currency (RRC). E.g. The Euro is used as such in non-EU countries, the DM was used as such during the war days in Yugoslavia in the 90s, and the Ruble can/is used as a RRC by some countries bordering with Russia. In fact, if the USD loses its GRC status, it is quite possible/likely that we may have a transition period of several RRCs, before one becomes the new GRC.
LMFAO! I wonder how game theory is going to solve the calorie or collateral crisis?
That's easy: Win-lose
protein moves on two feet, beware the "dog" stew > pro tip: 2045
Exactly, both sides of the Board of Directors of the Bankrupt US Corp of course would 'reach compromise'...it was a done deal from the start!
Hey dipshit when you have to borrow money to pay back money, you are already bankrupt. For cripes sakes where do they get these idiots?
Boeing, possibly
it seems they have an over supply of idiots
It's not a game, it's a fucking circus
On your left we have Assad demanding a nobel prize, on your right we got an egg with wings selling us how cute radioactive poisoning is, and in the center we got King Bernie and Obozo prancing around in the spot light distracting you while the bankers under the bleachers pick your pockets.
WHAT THE FUCK IS GOING ON!? I DIDNT BUY TICKETS TO THIS SHITSHOW
WHAT THE FUCK IS GOING ON!? I DIDNT BUY TICKETS TO THIS SHITSHOW
I am sure the feudal serfs of long ago thought the same thing.
Only John Nash can walk them through another scenerio of alternatives. Game Theory is commonly referred to as 'FUCK YOU Buddy.'
So this means increases in future taxes and cuts to already taxed promises.
Sounds about right for CONgress.
Follow up article - "
How Lame Theory Solved The 2013 Debt Ceiling DebacleOT: Oops! http://bloomberg.econoday.com/byshoweventfull.asp?fid=456085&cust=bloomberg-us&year=2013&lid=0&prev=/byweek.asp#top
Hey, look what the cat just dragged in. :-)
BitCoin Last price:$156.38190
As China and Germany now accepting BitCoin
Soon -- early next year -- Ben Shalom Bernanke will also accept BitCoin.
You can bank on it. So will he. ;-)
My theory ended with the game board being flipped over. They blamed each other for awhile, and then fifteen minutes later they were both taking credit for it.
Who the Fuck in in charge here ??
Tilt
Pareto suboptimal.
How does the president "invoke the 14th amendment?" Wouldn't he have to break other laws in order to do so? Meaning probable impeachment, correct?
By completely twisting the plain language of the text: "The validity of the public debt of the United States, authorized by law, ... shall not be questioned." See, they just change the meaning of the "authorized by law" portion to whatever they want, a la Humpty Dumpty, and the 14th amendment can mean whatever they like.
and
Humpty Dumpy had a great fall.
"Shall we play a game?"
http://www.youtube.com/watch?v=ecPeSmF_ikc
Lets play T H E R M O N U C L E A R W A R
I laughed at his section 1:25-1:30 where he says "the Constitution supersedes any law".
Judging by what we've seen in the US since 2001, the Constitution has the same quaint status as Gold: It's a "Relic". /s
difference is obama has no preference to the gang of 6 compromise as he's not running for office,
now that he is in the 2nd term, he is pushing to do whatever maximizes his power.
The "game" isn't over. State legislatures can invoke nullification of many Federal impositions, including ACA/Obamacare, if they were serious about it. The problem is that the welfare, subsidy and entitlement state is a powerful tide that must be reigned in, but as long as most everyone is getting something out the system and eschews real reform there won't be any progress and default is just a matter of time.