Wednesday, December 28, 2011

Quotes of the day

...while it is certainly easier, and a lot more fun, to write about good news—as Buffett has been accustomed to doing over the years at Berkshire, in contrast to the kind of bad news that has issued forth from Lampert’s fading retail giant of late—there is, even so, a remarkable difference in both the substance and style of letters by two men who actually have a great deal in common.
...
For one thing, both started out as hedge fund managers. For another, both are without peer in their fields, and fabulously wealthy as a result. For a third, they each got into the position of writing annual shareholder letters as a result of taking control of a fading, once-giant, public company. Finally, they each spent years personally wrestling with how to turn the original business around.
...
In the end, of course, one (Buffett) decided the rational thing was to disinvest in the original business and re-create the company to his liking, while the other (Lampert) is still wrestling with Sears even as he extracts cash from “hidden” assets like real estate and minority-controlled subsidiaries.--Jeff Matthews

If only everyone would invest, there’s a pretty good chance that we’d all be better off, on average our investments would succeed. But if an individual invests while the rest of the world does not, the expected outcome is a loss. (Colored values wearing tilde hats represent stochastic payoffs whose expected value is the number shown.) There are two equilibria, a good one in the upper left corner where everyone invests and, on average, succeeds, and a bad one in the bottom right where everybody hoards and stays poor. If everyone is pessimistic, we can get stuck in the bad equilibrium. Animal spirits are game theory.
...
This is a core problem that finance in general and banks in particular have evolved to solve. A banking system is a superposition of fraud and genius that interposes itself between investors and entrepreneurs. It offers an alternative to risky direct investment and low return hoarding. Banks guarantee all investors a return better than hoarding, and they offer this return unconditionally, with certainty, without regard to whether other investors buy in or not.
...
Opacity and interconnectedness among major banks is nothing new. Banks and sovereigns have always mixed it up. When there has not been public deposit insurance there have been private deposit insurers as solid and reliable as our own recent “monolines”. “Shadow banks” are nothing new under the sun, just another way of rearranging the entities and guarantees so that almost nobody believes themselves to be on the hook.
...
This is the business of banking. Opacity is not something that can be reformed away, because it is essential to banks’ economic function of mobilizing the risk-bearing capacity of people who, if fully informed, wouldn’t bear the risk. Societies that lack opaque, faintly fraudulent, financial systems fail to develop and prosper. Insufficient economic risks are taken to sustain growth and development. You can have opacity and an industrial economy, or you can have transparency and herd goats.
...
A lamentable side effect of opacity, of course, is that it enables a great deal of theft by those placed at the center of the shell game. But surely that is a small price to pay for civilization itself. No?
...
Nick Rowe memorably described finance as magic. The analogy I would choose is finance as placebo. Financial systems are sugar pills by which we collectively embolden ourselves to bear economic risk. As with any good placebo, we must never understand that it is just a bit of sugar. We must believe the concoction we are taking to be the product of brilliant science, the details of which we could never understand. The financial placebo peddlers make it so.--Steve Randy Waldman

... the beautiful people of Malibu and La Jolla should be able install solar panels on their tile roofs, if that's what they want. But the people of Compton and Barrio Logan shouldn't be expected to subsidize them. More to the point, policymakers need to stop making feel-good policy by press release, and focus on the unfairness of the green energy subsidy game. If they don't, the public, which repeatedly has shown that it truly does want a clean environment, will turn, rightly so.--Dan Morain

What continues to amaze me is this: Japan’s current strategy of massive, unsustainable deficit spending in the hopes that this will somehow generate a self-sustained recovery is currently regarded as the orthodox, sensible thing to do – even though it can be justified only by exotic stories about multiple equilibria, the sort of thing you would imagine only a professor could believe. Meanwhile further steps on monetary policy – the sort of thing you would advocate if you believed in a more conventional, boring model, one in which the problem is simply a question of the savings-investment balance – are rejected as dangerously radical and unbecoming of a dignified economy.--Paul Krugman

Look, I'm not an expert. I'm just trying to get ready for Buffalo. I'm not trying to analyze the passing game of the last 20 years. That's for people a lot smarter than me. Like you guys.--Bill Belichick

The King James Bible, named for the English monarch who commissioned it, turned 400 years old this year. It was long the most widely read Bible in the English-speaking world and the best-selling Bible in the U.S., until it was surpassed by the New International Version in the mid-1980s. The archaic language and high style of the King James text has shaped the language of the pulpit and influenced generations of writers, including Herman Melville and William Faulkner.--Rebecca Rothbaum
Image links here, here, here, here and here.

Tuesday, December 27, 2011

Quotes of the day

What makes it so hard is not that you had it bad, but that you’re that pissed that so many others had it good.--Melvin Udall, in As Good As It Gets

FDR, it seems, was apparently dead wrong about the financial purpose of his Social Security system. He advocated it as an insurance system, in which the benefits paid to an individual were linked to the contributions paid by that individual. But today we are told that the funding side of Social Security is a “tax”—the “payroll tax.” We are also reminded that it’s a regressive tax—a larger burden to the middle class and poor than the rich—but we are not reminded that it is a “contribution” to a system that will eventually pay out benefits in proportion to each individual’s contribution.--Steve Conover

Resentment is a powerful, long-lasting emotion that usually is self-serving and dishonest (I have never heard a criminal complain that his defense lawyer is upper-class, as he often is), as well as useless. Resentment is undoubtedly part of everyone’s psychology, at least potentially, and few of us have never heeded its siren song. A population’s general level of resentment, however, is not a natural phenomenon that one can analyze in purely mechanical terms, as if it increased geometrically with the Gini coefficient. Britain itself has been far more unequal in the past without widespread riots’ breaking out, so it is clear that we cannot understand people’s behavior without referring to the meanings that they attach to things.--Theodore Dalrymple
Photo links here and here.

Chart of the day: The class warfare we need

Source here.

Friday, December 23, 2011

Chart of the day: As far as the North is from the South

Source here.

Quotes of the day

[Charles] Dickens knew what a nasty place, both literally and figuratively, the chimney was. He easily passed many a chimney sweep on the London streets, possibly as young as four years old – weary, sooted boys earning a dangerous, miserable, and likely short living, and reaping the contempt of London’s more civilized citizens. The wealthy of Victorian London looked upon the chimney sweeps and saw villains in the making. They depended on those blackened boys for household cleanliness and warmth and, above all, safety, but wouldn’t trust them farther than they could throw their stockings. ... There is no Santa Claus herein. There are only the chimneys themselves, bright symbols of the cheery, loving home and dark images the deepest filth the city – or the human soul – can scratch up. It might be said that Dickens’s fiction – holiday and otherwise – plumbs the blackened, sooty depths of human depravity to ultimately offer hope in visions bright as a blazing hearth. A different type of Christmas spirit, indeed.--Rebecca Martin

And I heard, “Merry Christmas! You still have a job!”--unattributed



... do 46 percent of Golden State voters really identify with drum circles, pot smoking, public urination, indecent exposure, violent brawling, and semi-literate rants against capitalism? And did I mention lice?--Joe Hicks

A Manhattan hedge-fund manager has stepped in to pay for the funeral for Delores Gillespie, the 73-year-old woman who was set on fire in the elevator of her Underhill Avenue apartment building,  ... He called the office of Councilwoman Letitia James, who had set up a fund to collect donations on Monday, and offered to pick up the entire bill. He has since been in touch with the family, said a spokeswoman for James' office.  Relatives and friends remember Gillespie as a warm-hearted, community-minded  woman who helped the down-and-out find jobs and laid out a feast for the homeless every Thanksgiving.--Amy Sara Clark

I thought about making an "every team HAS to have one white guy" rule just because it's fun to think of someone heading into the last round of the draft thinking, "Crap, I don't have a white guy yet — is Steve Blake still available?" But then that opens the door to the whole "Does someone like Gortat or Gasol count as a white guy or a foreigner?" debate which has never been solved. It's like the Roe v. Wade of basketball arguments.--Bill Simmons

[Greg Engert] left a Georgetown graduate literature program to dive into the beer world full-time, and he approaches it partly as a humanities professor might, if such professors were young, unpretentious, boundlessly energetic, fast-talking, and decked out in quietly stylish clothes. Get him going and out come elaborate, colorful tales about the evolution and history of a particular beer. It’s beer as narrative, and he’s an entertaining, passionate storyteller. Engert also displays a scientist’s pride as he shows off the elaborate system of climate control and piping, custom-built to guarantee every drop is served through clean lines at the temperature appropriate for each style.--Mark Garrison

Wednesday, December 21, 2011

Video of the day: Civil Unrest Legos


Via Joshua Brown.

Obama's relection odds stablizing

Source here.

I'm still mourning the Gingrich fade, the lost entertainment value of the debates.  If Obama can stomp Hillary, I predict he will liquify Romney.

Naughty Christmas card of the day

"Pride before a fall" comes to mind.

Image link here, via Henry Blodget.

Quotes of the day

Simply saying that you take allegations with misconduct seriously does not mean that you actually take the allegations of misconduct seriously. In other words, their response came only about three weeks after the presentation and there was an enormous amount of material that if somebody was going to take the material comment seriously, they would have to review. It doesn't seem to make a lot of sense to me -- or even be possible -- to think that somebody who took our concerns seriously would even be able to review it in three weeks. As a result, it kind of feels like a whitewash to me. The question at this point, since the company wasn't able to give any substantive answers to the most serious of the questions that were raised -- they instead deferred to a general statement from the audit committee -- the question now becomes whether the audit committee itself is part of the problem as opposed to being a part of the solution.--David Einhorn

Perhaps it is not ideal that so many of us go on to Wall Street, but targeting individuals looking at career options in this way is hardly the appropriate remedy. Many students who enter these fields are not the scions of banking families but rather hard-working students looking for a challenging job that lets them experience a newfound financial prosperity. To exhort students to consider their contribution to society when choosing a career is one thing but to target those who want to work for Goldman Sachs misses the point; whatever negative impact the company has on our economy is due to structural issues rather than questions of individual morality. Deterring a couple dozen Harvard students from working at Goldman will not change income inequality nor will it create a more equitable society. Goldman will just hire the next people in line. Occupy’s actions continue to erode whatever student support it gained on the heels of a successful janitorial contract. Pitching a simplistic conception of the financial crisis and targeting fellow students is not the way to have a successful movement. Occupy ought to refrain from such ill-conceived protests in the future.--Harvard Crimson

This will sound insane but I think this is Bill Belichick's best coaching job ever. Better than the Super Bowl years. Better than when Tom Brady was lost for the season and the Patriots still won 11 games. Best he's ever done.--Mike Freeman

I know there are people who think only first-ballot Hall of Famers should be Hall of Famers -- only the slam dunk choices, only the ones you just KNOW are Hall of Famers the way you know that the sky is blue, that every exotic meat tastes "a little bit like chicken" and that Parks and Recreation is on NBC on Thursday nights. But Yogi Berra wasn't a first-ballot Hall of Famer. Juan Marichal wasn't a first-ballot Hall of Famer. Larry Doby wasn't voted in at all by the writers, nor was Johnny Mize or Arky Vaughan, who was probably the greatest shortstop between Wagner and Ripken. I don't want a Hall of Fame without them. I'd rather have a Hall of Fame WITH Yogi Berra and Juan Marichal and Larry Doby than one WITHOUT Jim Rice and Bruce Sutter. That's not close for me. I am a Big Hall guy.
Photo links here, here and here.

Tuesday, December 20, 2011

Chart of the day: Healthcare spending for selected countries

Source here, via Tyler Cowen.

Quotes of the day

Public-sector unions and other interest groups wrap their causes in the rhetoric of equality. Often, what they’re really protecting are privileges that raise the cost of public services to everyone else — including citizens who earn a lot less than civil servants. Yes, Wall Street’s bonuses are stratospheric. But the New York Times recently reported that Medicaid was paying nine executives $500,000 or more per year to operate nonprofit homes for the mentally disabled. Okun’s message is that equality is a public good, whose benefits — social cohesion, political stability and the like — are worth paying for. The trick is not to overpay.--Charles Lane

I spent hours upon hours toiling away at a register, scanning, bagging, and dealing with questionable clientele. These were all expected parts of the job, and I was okay with it. What I didn’t expect to be part of my job at Wal-Mart was to witness massive amounts of welfare fraud and abuse.
...
I understand that sometimes, people are destitute. They need help, and they accept help from the state in order to feed their families. This is fine. It happens. I’m not against temporary aid helping those who truly need it. What I saw at Wal-Mart, however, was not temporary aid. I witnessed generations of families all relying on the state to buy food and other items. I literally witnessed small children asking their mothers if they could borrow their EBT cards. I once had a man show me his welfare card for an ID to buy alcohol. The man was from Massachusetts. Governor Michael Dukakis’ signature was on his welfare card. Dukakis’ last gubernatorial term ended in January of 1991. I was born in June of 1991. The man had been on welfare my entire life. That’s not how welfare was intended, but sadly, it is what it has become.
...
Other things witnessed while working as a cashier included people ignoring me on their iPhones while the state paid for their food. (For those of you keeping score at home, an iPhone is at least $200, and requires a data package of at least $25 a month. If a person can spend $25+ a month so they can watch YouTube 24/7, I don’t see why they can’t spend that money on food.)--Christine Rousselle

At 25 I made the naïve mistake of getting an MFA in Creative Writing at a private college in New York City.
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I hadn’t done any research on schools with funding or really given it much thought at all. I thought when I graduated I’d just sell my novel and pay my student loans with the book advance. Needless to say that didn’t happen and when I graduated in 2005, I had $37,000 to pay back. Not only that but the MFA program was super unsupportive—both the faculty and students. Despite doing well in the program and really trying to connect with people I finished feeling no better off than when I’d started. A few years later when applying to residencies and then PHD programs I couldn’t even get letters of recommendation from most of my former teachers.
... 
I felt like the school had taken advantage of my naiveté by charging all this money for essentially a useless degree.
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I started to realize the least common denominator in all of my problems was me and my thinking. I needed to stop feeling sorry for myself for all the things life wasn’t giving me and start being grateful for what I had. As for my job I was clearly in this dog walking profession for a reason and maybe instead of thinking it was beneath me, I’d just try to do the best at it I could. I finally grew up and accepted life on life’s terms and decided to go out there and do the best I could with what I had. This is when things really started to change for me.
...
When I’d have fear about money I’d pay more on my loans, or give an employee a raise, or contribute a little to a charity. I call this daring God to financially take care of me—faith in action. I wanted proof that I’d be taken care of. Initially, I’d do it and sort of cover my eyes afterwards waiting for the ceiling to fall in. It never did. Inevitably, I’d get a new client or business would pick up with training or pet sitting.--Susie DeFord

Occupy, are you listening to this?--Cav

Christopher Hitchens and I were friends for 40 years, plus another five when we were enemies. He took ideas so seriously that if he disagreed with you on a matter that he deemed important, he’d literally throw you in a ditch. It was 1972, the height of our mutual virility. He and I went to a pub to celebrate his most recent intellectual victory over the establishment press. I intimated that sometimes women could be funny on purpose. Even back then, the thought enraged him. Hitchens threw a drink in my face, pressed a lit cigarette into my neck, and hit me over the head with a barstool. The next thing I knew, it was two days later and I was lying hogtied and naked beside the M5. Hitch had already severely damaged my reputation in a vicious essay in the Guardian. But that’s how he operated, and that’s why we loved him.--Neal Pollack

Washington state’s creation of the ferry monopoly is what governments have increasingly done since courts misconstrued the Constitution in a way that licenses governments to dispense particular economic favors by restricting general economic liberty. It is now routine for government to have transactions with rent-seekers — private interests who want public power used to confer advantages on them, or disadvantages on competitors.--George Will

Even though the average congressperson might have more information than the average taxpayer...the cumulative information held by 150 million taxpayers far exceeds the cumulative information held by 538 congresspeople. When it comes to the efficient allocation of public goods...we need to consider sums...not averages. It's interesting to consider though just how many average taxpayers it would take to equal the amount of information held by the average congressperson.--Xerographica

In a market -- one of your beloved markets -- an entrepreneur who presents the same product over and over, deriding customers for not buying it, would be the real fool. You'd laugh at such a fellow and tell him he deserves what he gets -- bankruptcy. Yet, you never view your political program that way, do you?--David Brin

Behind Door #1 are people of extraordinary ability: scientists, artists, educators, business people and athletes. Behind Door #2 stand a random assortment of people. Which door should the United States open? In 2010, the United States more often chose Door #2, setting aside about 40,000 visas for people of extraordinary ability and 55,000 for people randomly chosen by lottery. It's just one small example of our bizarre U.S. policy toward high-skill immigrants.--Alex Tabarrok

We talk about the right to free speech, the right to bear arms, the right to assembly. The right to rise doesn't seem like something we should have to protect. But we do. We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.
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That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or nothing. People understand this. Freedom of speech, for example, means that we put up with a lot of verbal and visual garbage in order to make sure that individuals have the right to say what needs to be said, even when it is inconvenient or unpopular. We forgive the sacrifices of free speech because we value its blessings. But when it comes to economic freedom, we are less forgiving of the cycles of growth and loss, of trial and error, and of failure and success that are part of the realities of the marketplace and life itself.--Jeb Bush

Evaluate ideas by their consequences (consequentialism)
Be aware that your ideas may be wrong and may fail (fallibilism)
Don’t be hypercritical (anti-skepticism)
Try out, debate, and evaluate alternatives (experimentalism).--Elmar Wolfstetter

Monday, December 19, 2011

Last 6 months of Romney GOP nomination trading from Intrade

Source here.

Not surprising, but I was really hoping for the entertainment value of Obama-Gingrich debates.

I've stopped hoping for much leadership from the White House.

Quotes of the day

Ludwig van Beethoven, widely considered one of the greatest composers in history, died on this day in 1827. Beethoven moved to Vienna from Germany in his early twenties where he became a virtuoso pianist, before beginning to lose his hearing. Some attributed his loss of hearing to his habit of lowering his head into ice-cold water in order to stay awake and continue practicing, though today this theory is dismissed. Despite the composers failed hearing, Beethoven remained committed to the creation of his art. He stayed sane, and even warded off thoughts of suicide, through devotion to virtue and to becoming accepted as an artist amongst the other musical craftsman of his day. It is widely believed that in the age of television and consumer distractions, another Ludwig van Beethoven will not develop.--Don Miller
Smart lad to slip betimes away
From fields where glory does not stay,
And early though the laurel grows
It withers quicker than the rose.--A.E. Housman
I try not to lose too many yards on sacks. When you realize that you don’t run very well, you try to get the ball out of your hands as fast as you can. Because when the ball’s in my hands, nothing good is happening. But other players have different strengths.--Tom Brady

"Jesus got up, left the house and went off to a solitary place, where he prayed. Simon and his companions went to look for him, and when they found him, they exclaimed: 'Everyone is looking for you!' Jesus replied, 'Let us go somewhere else — to the nearby villages — so I can preach there also. That is why I have come.'"--Mark 1:35-38

In other words, sooner or later, everyone gets tired of his own hype.--Charles P. Pierce

I can't begin to tell you the impact [Tebow]'s had on my daughter [Kelly Faughnan, who has a brain tumor]. She's very positive, and she tries so hard, but she's had a struggle. Tim Tebow has built her self-confidence up so much -- taught her to believe in herself -- that when I see people criticize him, I'm just dumbfounded. I don't get it. It's almost incomprehensible to me. I don't understand why anyone wouldn't want to see an athlete use his position and platform to do good for people.--Kelly's dad

Mrs. Thatcher was the first and only woman ever to have led a major British political party, and remains so to this day. She was the first woman prime minister in the English-speaking world and the longest-serving British prime minister of either sex since universal suffrage.
...
Even in 2011, only one important Western country—Germany—is led by a woman. Whatever the sterling qualities of Chancellor Angela Merkel, one must judge it highly unlikely that she will be the subject of a major feature film 20 years after she retires. Mrs. Thatcher was, in effect, the one and only woman. That unique status still fascinates.
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And this Lady was first called "Iron" not by her admirers but by her enemies. After becoming leader of the Conservative Party in 1975, Mrs. Thatcher opened a new, controversial front in the Cold War with the Soviet Union. She questioned the then fashionable idea of "detente." Soviet communism, she argued, should not be accommodated. It should be overcome—by repairing the defensive military strength of the NATO alliance and by holding out to the subjugated peoples of the Soviet bloc the promise of Western liberty.
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Not many people in the West agreed with her at the time, except one Ronald Reagan, and he was just an ex-governor of California with a dream of running for president.
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After Mrs. Thatcher had made a couple of stirring speeches on this theme, the Soviet Red Army newspaper Red Star christened her "The Iron Lady." In doing so, it intended to make a satirical comparison with Otto von Bismarck, the 19th-century "Iron Chancellor" of Germany and to paint her as rigid and harsh.
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And since 2010, as the debt problem gradually mutated from individuals to banks to entire countries, one of Margaret Thatcher's loneliest battles—her effort in the late 1980s to stop the integration of the European Community (subsequently given the grander title of the European Union)—has begun belatedly to win respect.
...
Indeed, it was Mrs. Thatcher herself, a couple of years after she left office, who identified the problem with European construction. It was, she said, "infused with the spirit of yesterday's future." It made the "central intellectual mistake" of assuming that "the model for future government was that of a centralized bureaucracy." As she concluded, "The day of the artificially constructed megastate is gone."
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There is precious little sign that today's European leaders want to listen to what Mrs. Thatcher said. The manic building of a continental megastate continues apace. But Margaret Thatcher's legacy will never be one of elite consensus. As the Western world sinks deeper into obfuscation, it is her habit of tackling the hard bit of every question that continues to look good and to seem more relevant than ever.--Charles Moore

In my opinion, they’ve turned the NYU graduate film degree into swag for James Franco’s purposes, a possession, something you can buy.--Professor José Angel Santana, who gave Franco a 'D' and then was fired

[Homeless couple Scott and Whitney] have the spending power of a couple earning nearly $50,000 each year, without the burden of having to work. They wake up around 9 a.m. each day, an hour when most New Yorkers are at their desks after a long commute over the subways. In short, this is not a sad story about an impoverished duo. It’s the romantic story of a couple who have figured out that they can live quite well without jobs or a home.--John Carney

Wilpon asked Selig to strike the provision requiring him to enable and assist David Einhorn in his pursuit of majority ownership, if Wilpon couldn’t repay him. The idea would be that Selig would play the bad cop. When Major League Baseball put the kibosh on Einhorn, Wilpon would have plausible deniability, and could throw up his hands and say, ‘What can I do? This is how MLB works.'--Howard Megdal

Our union members and staff have participated in many OWS actions, and we have endorsed OWS’ important message that corporate greed and economic inequality are wrong. So we were disappointed to learn that last week people associated with Occupy Wall Street disrupted the set of an episode of Law & Order: SVU, written and produced by members of the WGAE, and crewed by other entertainment industry union members. The demonstrators’ actions were as misguided and inappropriate as the City of New York’s response – revoking Law & Order’s permit for the shoot and directing the dismantling of its set. Presumably the protesters and police did not set out to achieve a common end but together they prevented the scene from being filmed and the story from being told. Freedom of speech is freedom of speech, whether it is the OWS demonstrators’ right to peacefully assemble and protest without fear of retribution or Law & Order’s ability to film in the streets of New York and tell its stories without fear of vandalism from protesters or overreaction by the police.--The Writers Guild of America

Even before the protesters were displaced on Nov. 15, Trinity gave many of them hot chocolate, blankets and a place to rest at a space owned by the church. But when the Occupy movement expressed an interest in setting up an organizing camp on vacant Trinity property at Canal Street and Avenue of the Americas, the church said no. The Occupy Wall Street forces then directed their skills at the church: They took their arguments to the streets. In familiar fashion, police officers converged on the area, standing around the perimeter. A flier distributed by protesters summed up their mood: “While the event may include a reoccupation, the event itself is a broader celebration and expansion of Occupy Wall Street,” it said. It also advised people to bring backpacks, warm clothes and sleeping bags. About 3 p.m., several hundred people began to slowly march along the blocks around the park. They went about five blocks north, then circled back. They were carrying homemade wooden ladders, draped with yellow banners. At Grand Street, the protesters made a move: They threw a ladder fashioned into a portable staircase against a chain-link fence separating the sidewalk from the church’s property. Many people went over the fence that way. Others lifted the fence from the bottom, allowing protesters to squeeze into the space.--AL BAKER and COLIN MOYNIHAN

[If you want to benefit from the seven fat years] you must suffer the seven lean years too, even the catastrophically lean ones. We need free markets, but we need them to be principled.--Emanuel Derman

And now nobody remembers from where Christmas comes
All the festivals and cultures and praise for the sun
Or the charity or giving, how it spread through the land
Then was rightly taken up by our Lord, the Son of Man
Now it’s all about the Benjamins, Bentleys, and bling
And how much in revenues each store can bring.--J.G.C. Wise
Image links here, here, here, here, here, here and here.

Friday, December 16, 2011

Quotes of the day

From 3 to 12, kids are mainly animals.  Their humanity and social nature still aren't complete. So you have to use Pavlovian methods to educate them.--Wolf Dad

... we do tend to grind a big star into the ground and get sick of him pretty quickly.--Peter King

As a born-and-bred Hoosier, believe me when I say that there are only four things people do in Indiana: play/watch basketball, watch auto racing, get drunk, and wonder why they still live in Indiana.--Mark Titus

Ten Year Lag of the day

Data from ESPN Stats & Information's Jeremy Lundblad.

It's not surprising that the New England Patriots offense is putting up 10 points more per game than the Denver Bronco offense.  What is surprising is that the porous injury-depleted Patriots defense is allowing 2 points less per game than Denver's more respected defense.

Adding it all up, that's a two-touchdown edge.  Every week.

Thursday, December 15, 2011

Quotes of the day

There’s No ‘I’ In Teamwork But There’s Something That Looks Like An ‘I’ In “WWIII”--Bess Levin

This summer, [Derek Jeter] ended up hooking up with a girl who he had hooked up with once before, but Jeter seemed to have forgotten about the first time and gave her the same identical parting gift, a gift basket with a signed Derek Jeter baseball. He basically gave her the same gift twice because he’d forgotten hooking up with her the first time!--pal of Derek Jeter

I hope I don't have any pals like this one.--Cav

If, say, Portugal had borrowed lots of money in the last decade and invested it in gold, it really wouldn't have a problem at all. It would have a huge debt burden but also a corresponding asset that is liquid enough to allow it to service the debt. This is small example of a problem overlooked by a lot of macroeconomic types who focus on "aggregate demand," as if the actual things produced through government sponsored demand didn't matter. But they do matter, a lot. This one of the reasons that government spending can slow the economy. It misdirects spending to political ends, rather than economic ends.--John Carney

What if the entire restaurant industry actually began to look forward to working Sunday lunch? If they said amongst themselves, "I love the church crowd. They are kind, patient and very generous. It's my favorite part of the week waiting on Christians." How might such a change affect the way the world sees us? Think about it. Just being a decent human being for one hour each Sunday and the world sees us in a whole new way.--Richard Beck
Photo links here, here, and here.

Wednesday, December 14, 2011

Quotes of the day

There was no point to continue to support an institution [SUNY] that the state was backing away from. Inexpensive access to mediocrity is not doing anyone such a favor.--Jim Simons

No child was ever born without having been conceived.--Filipino

For all of [Jerry] Jones' Hall of Fame accomplishments, his inability to replace Jimmy Johnson remains his greatest flaw. Since Barry Switzer's tenure ended in 1997, a run that included a championship won with Johnson's players, the Cowboys have won only a single playoff game.--Mike Freeman

[Phil] Jackson's NBA impact has been massive, but his ongoing influence will be muted. It appears that he will not be remembered as the NBA coach who ran the Triangle best; in all likelihood, he will be remembered as the only NBA coach who ran it at all. If the Triangle truly dies, it dies with him.--Chuck Klosterman

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought. The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.--Reuters

... very vague.--Steven Cohen, on insider trading rules

Conspiracy theories abound with Bernanke, and I’m sure somebody somewhere really thinks that Ben Bernanke intentionally put the U.S. on a path to the Weimar-style hyperinflation that is coming any day now just to save a hundred bucks a month on his mortgage payments, but…I’m with her that it’s an amusing coincidence.
...
If you like a slightly different flavor of conspiracy, though, you might ask: why wasn’t Bernanke refinancing in, say, July or August? Sure, maybe he was busy with the whole stewardship of the economy and/or after-dinner Kindle reading. Or maybe he knew that the Fed was going to move to lower long-term rates and so abstained from trading based on that. Maybe he was taking advantage of his insider knowledge to make a personal profit, or at least avoid a loss.
...
Or not, whatever, what a stupid thing to think. But I thought of it again when I read Mr. Steven A. Cohen’s cogent argument that insider trading rules are somewhat more ambiguous than the proper form of address for him.--Matt Levine

If Sarbanes-Oxley did not deter MF Global, did it deter anyone? Or is this a case of a law which obtained compliance (at great cost in terms of scarce executives' time) from honest firms, while doing nothing to deter dishonest ones?--Arnold Kling

So [Donald Trump] was more upset at the Chinese government for giving American consumers a low price than at OPEC for charging Americans too high a price.--David Henderson

Two politicians — President Obama and former New Jersey Gov. Jon Corzine — made pronouncements last week about financial failures. One of them was hiding something, or just didn't understand much about the job that he was supposed to do. The other one was Jon Corzine.
...
Obama, too, may be clueless rather than disingenuous. In his Kansas speech last Tuesday, Obama had this to say about the Dodd-Frank financial-regulation law: "Now, unless you're a financial institution whose business model is built on breaking the law, cheating consumers and making risky bets that could damage the entire economy, you should have nothing to fear from these new rules."
...
To the contrary, Americans have plenty to fear. Dodd-Frank took the fatal errors that American politicians and regulators made in their stance toward the financial industry in the years leading up to 2008 — and wrote them all down as a model.
...
Dodd-Frank's biggest problem is that it treats big, complicated financial firms differently from how it treats littler, simpler firms.--Nicole Gelinas

So why did 6.3 million jobs disappear between September of 2008 and June of 2009?--Russ Roberts

Liberals often point out that public employment has been declining in 2010 and 2011, partly offsetting job growth in the private sector. They bemoan budget cuts that lead to shrinking headcounts. But then they — including President Obama — defend a public-sector collective-bargaining regime that takes non-layoff savings options off the table. If liberals really want state and local governments to be able to maintain their headcounts, they should push to end collective bargaining for public employees, not to strengthen it.--Josh Barro

Graduate from high school, get married before you have children, work at any kind of job, even one that starts out paying the minimum wage. Fewer than 10 percent of families that follow his blueprint live in poverty, while 79 percent of those who don't follow the three-step plan end up poor. There is no redistribution scheme imaginable close to this in reducing poverty.--Eric Falkenstein

We were in New York this weekend, and we took an architectural tour of some recent skyscrapers. The tour guide said that the way to get rich is to be a zoning lawyer. He also said that a lot of zoning issues end up being resolved politically, that is by developers buying off politicians. The result is to make real estate in New York a field for crony capitalism. And it is not surprising that any attempt by anyone to try genuine capitalism is likely to run afoul of the law.--Arnold Kling

"Protesters" named Time Magazine Persons of the Year; SEAL Team 6 not available for comment--Iowahawk
Photo links here, here, here and here.

Chart of the day: Japan getting more acquisitive

Source here.

Tuesday, December 13, 2011

New study shows no gender differences in math abilities

here.

I believe that gender differences exist, because (among other things) I believe in Darwin's sexual selection theory.

I wonder why Morocco and Tunisia are the best counterfactuals that authors can trot out.  For one thing, they are rather distinctively different in culture from much of the educated world.  For another, they only achieve approximately 5% and 10% the GDP per capita of the U.S.

I have a theory that math abilities can converge in lower socioeconomic subcultures, and diverge in higher socioeconomic cohorts. The findings of this study would seem to support that theory.

I think there's some more wood to chop here.  But I am ready to eliminate math ability as a gender difference.

Rodney Harrison was right

The Patriots secondary is awful this year.

But Vince Wilfork was right, too, the Patriots are still winning.

Statistics are like a bikini. What they present is suggestive, but what they conceal is vital.--Aaron Levenstein

Would love to get Paul Krugman and his favorite politicians response to this



Via Russ Roberts.

Quotes of the day

Today's young women make $1.17 for every $1 their moms earned back in 1980. Young men, however, are earning 10 cents per dollar less than their fathers did 30 years ago, new research shows.--Annalyn Censky

Big losers had to have been small losers first. You have to be down 2% before you can be down 5% before you can get down 10% and so on. Cut your losers at the knees before they cut your throat.--Michael Martin

It's a cliche to say risk management is the combination of art and science. You need to know something about history, statistics, and programming to be useful as a risk manager. You also need common sense, and that is best informed by experience ...--Eric Falkenstein

... now it’s looking increasingly as though Corzine demonstrated virtually all of the pathologies of the rogue trader more generally. Lots of financial firms make big bets and blow up. But what we saw at MF Global was much more than that. In fact, as Corzine detailed at great length in his prepared testimony last week, his big sovereign-debt bet didn’t actually lose money at all. But MF Global died all the same, because the bet was so large and risky that it caused a fatal cascade of downgrades and margin calls.--Felix Salmon

In a democracy people are free to express and debate their opinions. This is valuable in itself. But it has also been held to be instrumentally important because it is claimed that through open free debate true ideas will conquer false ones by their merit. Democracy thus has an epistemic value as a kind of truth machine. In a democracy therefore there should be no dogma, no knowledge that cannot be questioned. Not only is this view mistaken, but it is so obviously wrong that it is astonishing that it has ever been taken seriously.--Philosopher's Beard

“Public choice” economics explores the problems of concentrated interests. There are fewer corn farmers than taxpayers, and the gains from ethanol subsidies are large for each corn farmer, while the costs per taxpayer are quite small. The costs of coordination and the financial incentives mean the farmers will get their way so long as the government has the power to subsidize or penalize. This simple dynamic explains much of how our government allocates resources.
...
And, unlike Marx or Citizens United, it is something the Tea Party and Occupy can agree upon. Although it may seem far-fetched at first glance, if Occupy found common ground with the Tea Party or the sentiments behind it, much could be done politically. After all, there are many 99 percents. But so far, Occupy has absorbed or been co-opted by various one percents.
...
For example, in education policy, teachers are the one percent, while students and parents are the 99 percent. But it is generally the power of the concentrated teachers’ unions that drives decisions about education spending and policy. The fact that teachers unions support Occupy undermines its power. A true movement of the 99 percents would be on the side of students, not teachers.
...
Examples abound that cut across typical ideological lines. For instance, military contractors are the one percent, while soldiers and the citizens they defend are the 99 percent. It is for this reason that in the recent census, 7 out of the 10 richest counties surround Washington, D.C.--M. Todd Henderson

Any time someone gets fired, a manager has failed. He or she hired the wrong person, moved someone into the wrong job, or screwed up in some other way. When it’s necessary to show an employee the door, it’s going to be because we’ve tried and failed to fix whatever in the relationship and the structure wasn’t working. It’s never going to be because the person fits a category that someone has outlined for us. That, in fact, is the opposite of leadership.--Liz Ryan

Fail a lot before you are paying for the failure….I got fired or asked to leave from all my jobs.--Mark Pincus, CEO of Zynga

In 2002, a schoolteacher with previously normal sexual desire began experiencing sexual desires that he was not used to. He began looking at child pornography and engaging in sexual activity that was not common to him before this point. Little did he know, he had an egg-shaped tumor in the orb frontal cortex of his brain, and when he had the tumor removed his sexual desires stopped. A little while later the desires reappeared, so he went back to the doctor’s office. Lo and behold, the tumor had returned to the same region of his brain.--Mike Friesen

... changing your offense makes all your seniors freshmen.--unattributed

In the same way that there are people who never thought they'd see a black American president, there are also people who never thought they'd see a black basketball star dressed like a nerd.  ... If you happen to be someone who looks at Durant, James, or Amar'e Stoudemire's Foot Locker commercials — in which he stalks along a perilously lit basketball court wearing a letterman's cardigan, a skinny tie, and giant black glasses (his are prescription) — and wonders how the NBA got this way, how it turned into Happy Days, you're really wondering the same thing about the rest of mainstream black culture. When did everything turn upside down? Who relaxed the rules? Is it really safe to look like Carlton Banks?--Wesley Morris

On Dec. 12, 1991, [Paul] Kunz set up a Web interface based on a Web server to search a popular database of particle physics literature at Stanford, and sent an email to Tim Berners-Lee about it. It was the first Web site in North America and one of the first dozen in the world.--Liz Gannes

The smartest worriers are learning to code or marrying a developer.--Howard Lindzon

By virtue of its size, business model and popularity, Facebook is the rare company that doesn't need Wall Street to go public. It should press home the advantage and blaze a trail for others to follow.
...
Mr. Zuckerberg's has two options: a traditional IPO, in which banks distribute shares to investors in exchange for a percentage of total proceeds; and the little-used "Dutch auction" that cuts out the Wall Street middlemen by making the allocation of shares dependent on prices bid by each investor.
...
The biggest difference between the two systems, apart from the lower fees paid by companies in auctions, is that when IPOs go Dutch, banks don't choose who gets shares, giving all investors a fair shake and avoiding potential conflicts of interests.
...
This is particularly important for "hot" IPOs, like Facebook. Since these deals often record sharp rises in the first days of trading, there is a temptation for banks to dole out shares to their favorite investor clients, who stand to profit if they get in early.
...
Wall Street's penchant for being both poacher and gamekeeper has left banks with conflicted loyalties; they take companies public while at the same time trying to keep hedge funds and other high-paying customers satisfied.--FRANCESCO GUERRERA
Image links here, here, here, here and here.

Monday, December 12, 2011

The real reason why Warren Buffett wants to raise income tax rates

To fund his enormous special tax deals:
Yesterday, First Solar (FSLR) announced that it had sold its interests in a big solar project called Topaz. The buyer was MidAmerican Energy Holdings, a subsidiary of Berkshire Hathaway.
...
-PGE gets a long-term supply of alternative energy that allows them to grow for a few more decades.

-First Solar gets out of a huge headache. It gets get to sell solar panels to Topaz.

-The citizens of California that will use this power will get nothing. They will continue to pay the highest rates for electricity in the country.

-The US tax payers foot the bill for another $600 - $700mm. That's the "Vig" for Warren. Those taxpayers also get nothing in return.
How about a 2% wealth tax for those who have net worths above $25 million?

Time lapse video of the day

"Hierbas Buenas" Valley Petroglyphs (Night Time Lapse Movie) from Stéphane Guisard on Vimeo.


Via Kate Rinsema.

Quotes of the day

Stille Nacht, heilige Nacht,
Alles schläft; einsam wacht--Joseph Mohr

In the beginning God disclosed himself, and that self-disclosure was with God, and that self-disclosure was God.--Don Carson of John 1:1

If you believe, then unbelievable things can sometimes be possible.--Tim Tebow

Tebow. TEE-bow. Verb. To defeat an opponent while overcoming a major impediment. Ex.: Despite having a 102-degree fever, Lucy managed to Tebow her competition for the Miss America pageant through her great determination.--Peter King

Corn grits, cocoa, condensed milk, white bread and sugar. This was America's menu for the starving millions in Soviet Russia during the 1921-23 famine – one of the greatest human disasters in Europe since the Black Death. The famine relief was spearheaded by Herbert Hoover, whose biographers credited him with saving more lives than any person who has ever lived.--CYNTHIA HAVEN

... to the extent you measure poverty as a relative concept, you ensure that no public policy can eliminate what you call poverty.--Arnold Kling

So much for Obama's endlessly repeated promise that if you like the health insurance you have, you can keep it.--David Henderson

We have 37 Christmas trees here at the White House--37! That's a lot, right? Yes, that's a lot of trees. And we also have a 400-pound White House gingerbread house.--Michelle Obama

There is surely no such gulf between Marx and Keynes as there was between Marx and Marshall or Wicksell. Both the Marxist doctrine and its non-Marxist counterpart are well expressed by the self-explanatory phrase that we shall use: the theory of vanishing investment opportunity.--Joseph Schumpeter

North Korea has warned South Korea of "unexpected consequences" if it lights up a Christmas tree-shaped tower near their tense border.--BBC News

Many [New York Times reporters] them seem to have a congenital inability, or, at least, unwillingness, to distinguish between libertarians and conservatives. The differences are not small.--David Henderson

Everybody was laughing because when I signed my tax returns this year I had to get completely wasted.--Lady Gaga

Liberals are inclined to see progressive policies as the solution to family breakdown. Conservatives are inclined to see progressive policies as the cause of family breakdown. I think that the reaction of libertarians is to squirm with discomfort. You think that the liberals are in a bad position intellectually, but you are reluctant to affiliate with conservatives on an issue where they are so. . .umm. . .conservative.--Arnold Kling

Undergraduate tuition at New York University is around $41,000, but parents can be assured their bright young things are still getting The People’s Education, reports the student newspaper The Washington Square News. NYU plans to offer not one, but two classes on the burgeoning social movement known as Occupy Wall Street, so that the 1 percent may study the 99 at both the undergraduate and graduate levels.--Adrianne Jeffries

... the current price of a college degree is not just the balance of four years’ tuition; one must also consider the cost, to students and employers, of the ambiguity hanging over what the degree actually means.
...
One root of the problem is the fact that the college degree is issued by the same institution that is in charge of setting, and enforcing, the standards of that credential, says [Salman] Khan, who holds four degrees himself. This is tantamount to investment banks rating their own securities, he says. Meanwhile, the accrediting agencies that are in charge of making sure those “ratings” are legitimate do not currently focus on what students coming out of those institutions measurably know.--Steve Kolowich

I heard this morning that the non-euro members who did go along [with the new rules giving the EU greater power] did so mostly because they hope to join the euro. Talk about the triumph of hope over experience! This is like supporting the death penalty because you're hoping to end up on death row.--Megan McArdle

What “Anglo-Saxon economists” are doing is confusing their own ideology with reality. Economists tend to look at economic problems as involving incentives. Align incentives properly, and problems are easily solved. The tricky part is all in the figuring out how to get incentives properly aligned.
...
This turns a blind eye, however, to the role of ideological commitment. The strong commitment on the part of European central bankers to austerity may make the incentives irrelevant. All the incentives in the world might not matter because at some level the central bankers believe that the necessity for expansionary monetary policy is incommensurable with their other ideas about how the world works.
...
To put it differently, the monetary experts in Europe may just be too ignorant of the peril they are in thanks to their world view. We cannot count on Draghi and others suddenly taking a more rational approach to monetary policy. They can remain irrational longer than Europe can remain solvent.--John Carney

Over all the notion that the path to safety for banks is to turn them into a service business seems misguided, coming from a place of consumer-finance rhetoric rather than serious thinking about the purposes of a financial industry. The point of a bank is not to reduce credit card fees and clearly disclose mortgage terms, but to provide credit. And the idea that “focusing on the underlying economics of a transaction” can distinguish between a loan and a bond – or a residential mortgage and an RMBS – severely undersells the ingenuity of the financial sector.
...
Bair is probably right that the distinction between “prop trading” and useful activity drawn by the Volcker Rule does not prevent banks from doing all manner of risky things. It wasn’t really intended to: “prop trading” sounded sort of nasty, and people made money doing it, and we’d had a financial crisis, and a futile and stupid gesture was required, so presto, Volcker Rule. But that’s because clearly drawing that line is really hard, and replacing the line drawn by the Volcker Rule – in one sentence (“no prop trading”) or 300 pages – with another arbitrary one-sentence definition is equally unlikely to work.--Matt Levine

Players of an online video game called Foldit have helped researchers discover the structure of an protein-cutting enzyme produced by an AIDS-like virus found in monkeys. Scientists have struggled with the problem for a decade, but the gamers helped crack it in just three weeks.--Jacob Aron

... the bottom line is the bottom line, and the best way to get your boss to appreciate you more is to help him make more money for the firm.--Eric Falkenstein

In whatever it is that we try to do, grow trees, cure the ill, distribute food, keep the lights on or build houses, we would always prefer to do this in whatever manner it is that uses the least resources.
...
We don't say that using 5 tonnes of copper to wire a house is better than using 500 kg to do the same job. Well, we don't say it is better just because we're using more copper that is. So why would we say that having a retail sector that employed more rather than fewer people would be a good idea?
...
Quite, we shouldn't, for the claim is a claim that we should be using more of a scarce resource, labor, to get a job done, the distribution of consumer items. We should no more want to use more labor here than we should use more copper in wiring a house.--Tim Worstall
Image links here, here, here and here.

Chart of the day: Baby Boomers kill me not only with their entitlement programs

but also their musical preferences:

Source here.