One of the more peculiar stories of late in these times of turbulent financial markets is how, briefly, Volkswagen became the biggest company in the world. In the process, hedge funds around the world suffered losses estimated at over US$35 billion.
Over the last few years, Porsche has been building a stake in Volkswagen. By November 2007, the size of their stake had reached 31%, much of which was achieved by means of share options* rather than direct share purchases. Significant increases in the Volkwagen share price meant that these options delivered large profits for Porsche, prompting criticism that the company was acting more like a hedge fund than a car manufacturer.
On the eve of the US election, occasional commenter here at the Stubborn Mule, Michael Michael, sent me links to a couple of articles on Slate on the merits of voting. Of course, as an Australian citizen, I don’t have the option of voting in the US election, but the issues raised are relevant to democracies around the world.
In the first, Don’t vote, Steven E. Landsburg argued that the chances of your vote determining the result of the election are so slim that it would make more sense to play the lottery. In the second, Vote!, Jordan Ellenberg responds with a detailed mathematical analysis (including a dose of Bayesian inference) to argue that the odds of affecting the result, while long, are better than winning the lottery.