Wednesday, June 01, 2011

Quotes of the day

Put a frog in a kettle of boiling water and he’ll jump out faster and further than any of those blue ribbon winners at the Calaveras County jumping frog contest. Put him in a pot at room temperature, however, slowly turn up the temperature to boiling, and you’ll have frog legs for dinner. This latter, more unfortunate toad temporarily adapted to his external environment, which seemed like a practical thing to do, until – well, until he reached 212° at which point he was cooked. Today’s bond investors are experiencing a similar fate with nary a “ribbet” of complaint. ... There was this other frog who instead of being tossed into a pot of hot water was left to cool its heels in a pitcher of cold milk. Unable to jump out, he churned and churned those frog legs until eventually the milk turned into butter and the hardened butter allowed him the platform to leap to froggy freedom! Well, let’s get churnin’, fellow frogs. If the U.S. or the U.K. or any other government is going to attempt to boil us alive, let’s make butter! Butter in this instance is what PIMCO characterizes as “cheap bonds.” ... Journalists, financial advisors, and perhaps even some clients marvel at how PIMCO can be doing so well in 2011 while being underweight the Treasury/durational component of the bond market. Folks – we’re making butter. If you’re being repressed, our strategy is to churn those legs, get out of the pitcher, and above all stay away from boiling pots of water.--Bill Gross

Immigration is a boon to American science and math, a new report asserts, noting that 70 percent of the finalists in a recent prestigious science competition are the children of immigrants. ... children of immigrants took 70 percent of the finalist slots in the 2011 Intel Science Talent Search Competition, an original-research competition for high school seniors. Of the 40 finalists, 28 had parents born in other countries: 16 from China, 10 from India, one from South Korea and one from Iran. ... Still, children of immigrants face barriers outside of the education system. According to the Georgetown report, racial disparities in pay persist even within science fields. Whites with an undergraduate major in engineering out-earn Asians with the same degree by about $8,000 a year. African-American and Hispanic engineering graduates fare worse, making about $60,000 and $56,000 per year, respectively, compared with whites' $80,000. Asians out-earn whites in the fields of health, law and public policy; psychology and social work; and biology and life sciences.--Stephanie Pappas

When less legal work is available, more illegal "work" takes place. The economist Gary Becker of the University of Chicago, a Nobel laureate, gave the standard view its classic formulation in the 1960s. He argued that crime is a rational act, committed when the criminal's "expected utility" exceeds that of using his time and other resources in pursuit of alternative activities, such as leisure or legitimate work. Observation may appear to bear this theory out. After all, neighborhoods with elevated crime rates tend to be those where poverty and unemployment are high as well. But there have long been difficulties with the notion that unemployment causes crime. For one thing, the 1960s, a period of rising crime, had essentially the same unemployment rate as the late 1990s and early 2000s, a period when crime fell. And during the Great Depression, when unemployment hit 25%, the crime rate in many cities went down. ... Culture creates a problem for social scientists like me, however. We do not know how to study it in a way that produces hard numbers and testable theories. Culture is the realm of novelists and biographers, not of data-driven social scientists. But we can take some comfort, perhaps, in reflecting that identifying the likely causes of the crime decline is even more important than precisely measuring it.--JAMES Q. WILSON

The current National Football League labor dispute is sometimes characterized as a battle between billionaire team owners and millionaire players. What's often left out, however, is the role that the American taxpayer is playing in this dispute. Through rich stadium subsidies and cartel powers granted to professional football by our representatives in Congress, we have helped to bankroll the gains in revenues that are now at issue in this clash. ... if these telecasts don't interest you much, then the next time some member of Congress complains about spiraling cable TV fees and vows to hold hearings on the subject, you might shoot him an e-mail asking if he plans to introduce legislation repealing the 1961 Sports Broadcasting Act. While you are at it, you might raise questions about the tax-free status of municipal debt that governments often float to build stadiums for professional teams, stadiums that might be empty this fall.--Steven Malanga

If the Chinese economy is really so strong, why are Chinese regulators preparing a bailout of bad loans made to local governments that may amount to almost a half trillion dollars?--John Carney

In the wake of the Dominique Strauss-Kahn scandal, as more Frenchwomen venture sexual harassment charges against elite men, the capital of seduction is reeling at the abrupt shift from can-can to can’t-can’t.--Maureen Dowd

I just quoted Maureen Dowd. Hell freezes over.--Cav
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