## Prediction Markets and the Kelly Criterion, Part 5

Perhaps the most famous proponent of the Kelly Criterion is Edward Thorp. He founded the M.I.T. Blackjack Club, published various papers on gambling and investing, and became both a professor of mathematics and a billionaire investor. The Kelly Criterion played a key role in most of these; he dubbed it “Fortune’s Formula”.

Thorp has authored […]

## Prediction Markets and the Kelly Criterion, Part 4

I changed my mind; I want to stick with my toy example just a little bit longer.

## Yes, Virginia, the Bitcoin contango is a mystery

Lots of people are saying that massive contango in the Bitcoin futures is no surprise, because the contracts are cash settled.

For example:

“If you’re doing a cash-settled future, it’s just a bet,” said Aaron Brown, a former managing director at quant hedge fund AQR Capital Management who invests in the cryptocurrency and writes […]

## Bitcoin futures

I hope I am not too immodest if I feel like my Bitcoin series has aged pretty well.

I do have a long-ish follow-up post percolating in my head, but I need some time to pull it together and research a few questions first (e.g. did anyone at the FT ever manage to make a […]

## Bitcoin pieces

It has been a volatile month for the world’s most popular experimental currency:

As you can see(1), the U.S. dollar — measured in milli-bitcoins — has been highly unstable. In Felix Salmon’s words:

[The dollar] is clearly not an effective store of wealth â€” just look at how quickly that wealth can be evaporated. […]

## What happens if a Eurozone NCB goes rogue?

I have a question.

But first, here is a good round-up from the NYT:

After a hastily convened evening meeting to assess the situation, the group of 17 finance ministers whose countries use the euro issued a statement declaring themselves â€œconditionally satisfiedâ€ with most of the new proposal, which the so-called troika of lenders â€” […]

## Press release of the day

From the ECB:

The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.

Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.

Cyprus’s banks are […]