Let's make a bet

[Whomp]

What a great website and idea.
Longbets.org is a site where some interesting people have made long term bets, argue their case and have someone challenge that bet by countering with their case. The winner of the bet has money go to their favorite charity.

Here are a few examples of bets people are currently making.

• "By 2029 no computer - or "machine intelligence" - will have passed the Turing Test.
• “The universe will eventually stop expanding.”
• “At least one human alive in the year 2000 will still be alive in 2150.”
• “Evidence of extraterrestrial intelligence within the solar system will be confirmed before evidence from several light-years away.”
• Warren Buffet's $1 million dollar bet that was accepted where he said--“Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S & P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”

I have two thoughts here...
One let's make short term bets against each other so we can boast our winnings faster.

I would start with some of Longbets rules.

Spoiler :

• The subject of the Prediction or Bet must be societally or scientifically important. Bets are not guesses. Each predictor has a theory of how the world will proceed, and that theory is made explicit.
• Predictors and Bettors have to make the offer and be accepted by another CFC user. Maybe even start a separate thread for discussion of the bet when accepted. Odds are always even, and the result is always win/lose (no partial wins).
• Predictors and Bettors must provide an argument explaining why the subject of their prediction is important and why they think they will be proved right.

I'll start...I'm willing to bet that the euro will be lower versus the dollar within the next six months and would be willing to change avatar to whomever is willing to bet me on this.

Two, I'm willing to bet real money against a consortium of CFC'ers on oil consumption in 2030 on the longbets website and I'm willing to make the bet on long bets. My charity is "room to read" versus yours. $1000 wager.

Here's the bet...The International Energy Agency (IEA) estimates that the global stock of light-duty vehicles will increase from 707 million in 2002 to 1,289 million in 2030. Reasonable enough. However, the IEA’s estimate of oil use by light-duty vehicles of 18.0 million barrels per day in 2002 will be ~32.1 million barrels per day in 2030.

I would suggest that global oil demand for light-duty vehicles will actually decline to 16 million in 2030 (50%) lower and will make that case if someone's willing to bet.

Any takers or new bets you'd like to offer?

 

[cubsfan6506]

Sounds interesting, I would take your first bet just for the hilarity of having you have a cubs avatar, but I agree with your statement.

 

[Narz]

Do they allow bets in silver?

 

[JerichoHill]

See Whomp, I can't bet against you because I believe youre right!

 

[Gigaz]

I bet that Riemanns Zeta-function has at least one non-trivial zero that is not on the line 1/2+it and we will find it until 2020.

I bet we will proof the existence of an biosphere outside the solar system before we find extraterrestric intelligences and it will happen before 2030.

I bet there will be at least one war were nuclear weapons are used until 2050.

 

[Beaver Cleaver]

Any takers or new bets you'd like to offer?

I got a new bet. I bet that some day discussions about moderator actions will be openly allowed. The wager is in the amount of 23 cents and a piece of lint.

 

[Whomp]

Sounds interesting, I would take your first bet just for the hilarity of having you have a cubs avatar, but I agree with your statement.

Oh crap...didn't think about you. OK you're done.
The Euro is 1.5393 and this bet will end 12/15/08. I'll make my case over the next couple of days (can't today or tomorrow) so be prepared why you feel the opposite.

Do they allow bets in silver?

Make the bet. I'm sure someone will take you up on it. It might be me.

See Whomp, I can't bet against you because I believe youre right!

Interesting. On both bets? Maybe I should just post it on long bets and see who accepts.

I bet that Riemanns Zeta-function has at least one non-trivial zero that is not on the line 1/2+it and we will find it until 2020.

I bet we will proof the existence of an biosphere outside the solar system before we find extraterrestric intelligences and it will happen before 2030.

I bet there will be at least one war were nuclear weapons are used until 2050.

Cool bets. Problem is you'd have to post those at long bets since this thread is about short bets (I'd say less than a year)

I got a new bet. I bet that some day discussions about moderator actions will be openly allowed. The wager is in the amount of 23 cents and a piece of lint.

Ehh?

 

[raketooy]

See Whomp, I can't bet against you because I believe youre right!

After this nobody will bet.

How long does the loser of the bet have the avatar of the winner?

 

[cubsfan6506]

Oh crap...didn't think about you. OK you're done.
The Euro is 1.5393 and this bet will end 12/15/08. I'll make my case over the next couple of days (can't today or tomorrow) so be prepared why you feel the opposite.

Does that statement mean I'll be able to trade in my dollars for more then one euro, because I can definitly disagree with that.

 

[MrCynical]

“At least one human alive in the year 2000 will still be alive in 2150.”

I have to feel that the challenger on this bet is kind of screwed by basic logic. Unless they were under two years old when they made the bet they'd have to die to win it, which is going to make collecting the winnings a bit tricky.

 

[Whomp]

Does that statement mean I'll be able to trade in my dollars for more then one euro, because I can definitly disagree with that.

It means either the Euro trades at 1.5393 or above and you win or it trades 1.5393 or below and you wear a White Sox avatar. The avatar switch will be for 2 weeks.

I have to feel that the challenger on this bet is kind of screwed by basic logic. Unless they were under two years old when they made the bet they'd have to die to win it, which is going to make collecting the winnings a bit tricky.

The longbets organization is perpetual so both the bettor and the person contesting it put money up right away and it's invested till the time when the bet comes to fruition.

Spoiler :

The bet money, treated as a donation to the The Long Now Foundation, must be paid at the time the Bet is made, and is tax-deductible immediately. The entire amount goes into a long-term investment portfolio called the Farsight Fund --- its assets are in "Endowments", a mutual fund managed by Capital Research and Management Company. Half of the growth of that fund is drawn off to The Long Now Foundation, which maintains the Long Bets service; the other half accrues so that the eventual payment to the winner's preferred charity may be significantly larger than the original bet stakes. The original Predictor pays $50 less into the stakes than the Challenger, because of already having paid the original $50 publication fee.

 

[Dabur]

no bets for money , ....

it has to be for something real , something tangible , ....

 

[Whomp]

no bets for money , ....

it has to be for something real , something tangible , ....

It's not legal to bet everywhere in the world but charity is. Around OT betting and winning is gigantic enough. A cubs fan wearing a white sox logo? It's worth more than anything I could possibly want tangibly.

 

[cubsfan6506]

Alright I'll take that I'll post my argument tommorow.

 

[Dabur]

It's not legal to bet everywhere in the world but charity is. Around OT betting and winning is gigantic enough. A cubs fan wearing a white sox logo? It's worth more than anything I could possibly want tangibly.

sure , and the charity makes it nice

 

[cubsfan6506]

Alright I have to post my argument next tuesday as i'm going to florida tommorow, unless you post your argument today.

 

[Whomp]

No problem since I'm struggling to post mine as well. Women...
Anyhow, bets down and my story won't change for a long time so next Tuesday works.

 

[cubsfan6506]

The longer the better for me actually

 

[Whomp]

Milton Friedman said years ago..."It seems to me that Europe, especially with the addition of more countries, is becoming ever-more susceptible to any asymmetric shock. Sooner or later, when the global economy hits a real bump, Europe's internal contradictions will tear it apart."

The question is the euro at the same great divide as to what just happened in the US?
My contention would be very possibly and if not then a lot of cooperation will be necessary.

For western economies the decade long collapse in interest rates should have given great growth opportunities which would allow the US consumer and European governments amongst the more indebted EMU countries to tighten their belts and clean up their financial house.

Problem is the clean-up in fiscal houses did not occur for the US consumer nor the weaker European governments. Using France as an example, they cashed in the lower rates by voting in greater benefits like the 35 hour work week. So today you have a country that's debt to GDP has moved from 35% in French Franc (i.e.: a currency they could print and listening to Sarkozy and Trichet's battles something Sarkozy almost wishes for) versus 65% in Euros (a currency that only the ECB can print). As Francois Fillon, recently said "I run a state which now stands in a situation of financial bankruptcy, which has known deteriorating deficits for fifteen straight years and which has not voted a balanced budget for twenty-five years. This cannot last."

In the US, as the credit crisis became reality as risk from one borrower to another widened rapidly and the credit crisis ran throughout the whole economy.

So what does one do when you have this type of credit crisis?
1. reduce the value of the currency (to make one's assets and goods more attractive to foreign capital and invite inward capital flows...hello Budweiser!). 2. Recapitalize the banks(if the market can not do it, then the banks need to be nationalized ala Bear Stearns). 3. put in place a very steep yield curve (very low short term interest rates but higher long rates) in order to force the banks to start lending again and the private sector to take risk again.

Structurally, what do financial instituions do?
In the US, FASB 157 requires US banks to mark to market their securities. Financial institutions adjusted their books to reflect the higher risk and write off the lower values. Whereas, with Basel II a bank can sell a credit default swap (CDS) on sovereign debt and this swap does not have to be marked to market since it is assumed that a country will not default on its debt. This means that a selling bank does not need to put aside any capital on its balance sheet. Nada. Rien. Nichts. Niets.

Though the sovereign debts converged towards the rates the Germans borrowed at throughout the last 10 years that trend has changed rapidly over the last couple months so divergence and the great divide has occured. Widening bonds spreads between the stronger economies (Germany, Holland, Austria, Finland, Ireland) and the weaker economies (Portugal, Italy, Greece, Spain, Belgium, France, Latvia, Romania, Hungary, Poland. So one thing is for sure...selling the bonds of Europe's weakest bonds and buying protection on Europe's weaker banks continues to make sense. For instance, as the spreads between Italy and Germany started to widen the unexpected happens. A credit default swap (CDS) will tend to reflect the spread between the issuer's debt and risk free debt of the same maturity. Otherwise an arbitrage could be made. If Italy's debt traded at 1% (100bp) over Germany and a CDS on Italy only cost 20bp, one could buy the Italian bond and buy the CDS and capture a "free" 80bp. All the sudden it's been recognized that different borrowers have different degrees of risks to their debt.

So what we have today is a diverging European Sovereign debt situation, vigiliant ECB and economic slowdown...Germany just announced a 0.8 per cent drop in annual industrial production (a sector that has helped its economy stay quite strong). Euro retail sales are 2.9% lower than a year ago (the weakest performance since 1996). And the region's exporters are weakening. The trade balance has swung from surplus to deficit in March, as exports slumped 2.9%. France is set to grow ~2% this year and Italy possibly not at all. The credit crunch has sent Spain into a tailspin. In the meantime, the vigilant ECB is set on maintaining price stability.

France moves into a power position in July but it seems unlikley Trichet will change his broad EU stance of price stability. This means the best thing for Europe's governments would be to start keeping the promises that were made ten years ago. But the problem with that solution is that it implies that Europe's governments will have to tighten their belts over the coming quarters, i.e.: at the worst possible time in the cycle. After all, it is always hard for a government to pull back and shrink its size of the GDP cake... but in an economic slowdown, it is close to impossible.

How does the ECB respond? Do we get bitter infighting like we saw in Japan? Will Trichet give us currency devaluation, bank recap, steep yield curve? Considering the numbers of countries involved in the EU policy paralysis seems to be more likely (see Ireland). So with the recent breakdown in debt spreads that has now started will prove to have marked the start of a trend in financial markets. The end of the convergence trades and the start of the divergence trades. The market is telling you it's not a foregone conclusion that all countries will weather this storm.

Sell euros, buy dollars and in particular Asian currencies.
So far the cubs are not only winning at Wrigley but on the euros 1.5614 vs. 1.5393. But this game is not over.

 

[nonconformist]

One I've been mulling around for about a month and that upon seeing this thread I've adapted:

I wager that within 100 years, there will be an international convention in the same vein as the Geneva conventions outlawing nanotechnology warfare