From: Vincenzo lozzo
Sent: Sunday, August 17, 2014 2:21 PM
To: jeffrey E.
Subject: Re: Taxes

Sorry for the email flood but one inte=esting side effect of a public digital currency is that your trading strate=y can be 'anomaly detection on executives spending habits' - which is an ar=itrage as long as you know more identities (wallets) than anybody else play=ng the same game

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=br>On 17/ago/2014, at 09:09, "jeffrey E." <jeevacation@gmail.com <mailto:jeevacation=gmail.com> > wrote:

risk tolerance, can be accomplished by der=vatices. , arbitraged for mis pricing, risk is never really red=ced without a corresponding reward adjustment, howevr, tax allo=s certain arbitrage, for ex gains at 20 -losses at 30 Percent .=nbsp; review monte carlo simulations, need resource , bank, fri=tion charges. read fooled by randomness.

On Sun, A=g 17, 2014 at 9:02 AM, Vincenzo lozzo w=ote:

Can you let me know if y=u are? I'd be helpful if we can meet up - I'm trying to look at derivatives=through my lens.

What is somewhat striking is that it seems like all they=are is a programming language whose goal is to minimize risks (with the sid= effect of creating arbitrage and speculation opportunities).

What I am is if you interpret trading as an optimization=problem of: given a belief(stock X will outperform the market, etc etc) max=mize returns and minimize risks. Then all derivatives are is 'functions' to=go from a risky bet to a less risky one - now you can go to riskier ones bu= that's an 'anomaly'

Anyhow if this parallel somehow holds there are interest=ng questions that come up, for example: what is a Turing machine in this wo=ld? Which would be a fancy way to answer the questions: what derivatives ar= missing? Also since you can stack up multiple 'functions' (eg: combine a f=rward with an interest float-to-fixed swap to make a riskless arbitrage) th=t leads to complexity and hence to bugs

But I'm not sure if this is me going insane/trying to fo=cefully fit one thing into the other or if there's actually something there=/div>

One of the reason why meeting up would be useful :=)

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wrote:

jeevacation@gmail.com&g=; wrote:

taxes are variable friciton

On Sat, Aug 16, 2014 at 4:36 PM, Vincenzo lozzo wrote:

## So quick question for you: are taxes a trick?<=r>

Here's what I mean, I think (gut feeling - no proof) that there are potentia=ly a number of arbitrage/risk-free opportunities that are not tackled by an=body because when you add in taxes you don't actually make money.

Is 'hacking' taxes a strategy? It seems like all the academic texts leave th=t part for the reader which makes me think there's something there.

Also I was reading a while ago that rentech was using a weird structure with=Credit Suisse (iirc) where they were taxed on their profits as if it w=s long-term capital gains instead of short-term.

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## So quick question for you: are taxes a trick?<=r> (cont.)

please note

=div>The information contained in this communication is confidential, may=be attorney-client privileged, may constitute inside information, and is intended only for the use of the ad=ressee. It is the property of JEE

Unauthorized use, disclosure or cop=ing of this communication or any part thereof is strictly prohibited = and may be unlawful. If you have received this communication in error, pl=ase notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com, and=br> destroy this communication and all

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please note

=div>The information contained in this communication is confidential, may=be attorney-client privileged, may constitute inside information, and is intended only for the use of the ad=ressee. It is the property of JEE

Unauthorized use, disclosure or cop=ing of this
communication or any part thereof is strictly prohibited
=and may be unlawful. If you have received this
communication in error, pl=ase notify us immediately by

return e-mail or by e-mail to jeevacation@gmail.com, and=br> destroy this communication and all copies thereof,

including all attachme=ts. copyright -all rights reserved