Quotes of the day

We knew toil and hardship and hunger and thirst, and we saw men die violent deaths as they worked among the horses and the cattle, or fought in evil feuds with one another, but we felt the beat of hardy life in our veins, and ours was the glory of work and the joy of living.--Theodore Roosevelt

95% of individual traders lose money over ANY 10-year period.--Joe Fahmy

I am the 5%.--Cav

Majority of the money management industry believes through better study of the facts, the investor can beat the markets. Wisdom of Crowds disputes this generally held notion. The edge does not lie in superior information/higher intelligence alone. The game is won or lost elsewhere. Just ask Tebow’s critics.--Vedant Mimani

This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.—Western Union internal memo, 1876.

... the ranks of police officers have fallen by less than 1% after rising by 9% since 2000 alone. That, and the fact that America is a far safer place today than 10 or 20 years ago, suggests that Vice President Biden's claim that "the result [of police layoffs] has been—and it's not unique—murder rates are up, robberies are up, rapes are up," is simply, as the Washington Post observed, "absurd."

...

It's important to keep the long rise in local government employment in mind amid the debate over sending more federal aid to cities and states. Steadily increasing municipal-government payrolls, combined with sharply higher employment costs—including rich pension benefits and soaring health-care outlays—have made many local budgets unsustainable. The National Governors Association recognized as much last year when it issued a report predicting a long period of fiscal "austerity" that local governments must solve in part by better controlling personnel costs.

...

That almost certainly means that more layoffs are coming. But hyperbolic talk aside, local governments are well-staffed by historical standards and have the troops to do the job at hand.--Steven Malanga

We can agree at the injustice of transferring money from moderate-income pensioners to wealthy bondholders. But I think the even more important question is what makes the average Joe better off. And it's not clear to me that "stiffing the creditors" is the right answer.

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For starters, some of those creditors--maybe a lot of those creditors, depending on the country--are insurance companies and pension funds that serve the aforementioned Average Joes. But leave that aside. Europe is not, at least as I understand it, making the creditors whole because of their abiding love for foreign holders of European sovereign debt. They're stepping in and guaranteeing this debt in order to prevent a run on their banks and their bond markets.

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Runs on financial markets, as far as I can tell, do not righteously limit their damage to rich jerks who didn't need the money anyway. In fact, the people who suffer the worst from a rapid contraction of the credit markets are the poor. They're the ones who actually end up hungry and on the street when companies start failing and they can't get jobs.--Megan McArdle

To backtrack a couple thousand years, the general assumption regarding the fall of Rome is that the contemporary leadership was characterized by the same kind of ignorant as POTUS. The historical record, however, clearly displays that the intelligentsia of the time was well aware of Rome’s failings, they just couldn’t figure out a way to fix them. Pointedly, the corruption of the Senate and political control by wealthy elite paved the way for the dissolution of democracy and the onset of empire. They were not ignorant, contrary to popular belief, just overrun by socioeconomic trends too powerful to harness.

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Returning to modernity, it is clear from McArdle’s post that Netflix CEO Reed Hastings was, with the spin-off strategy, attempting to address very real structural issues within his firm. The plan clearly ended up as an online Bay of Pigs, but the drivers behind it are completely explicable with a modicum of research. I would argue that the behavior of politicians is similarly intelligible, with electoral money-raising, pandering to constituents and poll-watching replacing rising digital streaming rights as major motivational culprits.

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Labeling corporate or political celebrities “idiots” is to some extent to self-identify as part of the problem. Getting rid of these “idiots” will solve nothing, except to provide new vessels for sneering, self-congratulatory scorn. Focusing on the forces that makes these people appear to be morons, and widely publicizing these drivers to the point where they enter the general consciousness, actually provides an avenue for progress.--Interloper

Local McDonald's employees tell SF Weekly the company has devised a solution that appears to comply with San Francisco's "Healthy Meal Incentive Ordinance" that could actually make the company more money -- and necessitate toy-happy youngsters to buy more Happy Meals.--Joe Eskenazi

Photo links here and here.

John Hempton swats Felix Salmon's derrière

here.

As with all else on this blog, most safe for work.

Quotes of the day

... Mr. Buffett didn’t build his $10 billion-plus stake in I.B.M. overnight. He started buying eight months ago, beginning in March. You wouldn’t have known that if you had been studiously reading Berkshire Hathaway’s filings — known as 13Fs — in which companies must disclose stock holdings. There was no mention of I.B.M. in Berkshire’s quarterly filing in April, nor in August. Instead, if you were looking carefully, you might have found an odd footnote that said: “Confidential information has been omitted from the form 13F and filed separately with the commission.”
...
Translation: Mr. Buffett received special permission from the S.E.C. to keep secret his investment in I.B.M. — and possibly keep secret stakes in other companies that he is building positions in that we have yet to learn about. Mr. Buffett’s special treatment from the S.E.C. is not new — he has long taken advantage of an obscure rule to avoid disclosing his bets to the public before he is good and ready. Mr. Buffett — and other billionaire investors like Carl Icahn, Bill Ackman and Nelson Peltz — essentially argue that the simple disclosure of an investment would cause the price to rise so much as to scuttle their strategy.
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The rule says that the S.E.C. “may prevent or delay public disclosure of form 13F information for public interest reasons or the protection of investors.” In this case, the rule is clearly meant to protect the investor — Mr. Buffett — not the public.--ANDREW ROSS SORKIN

As a general rule, you can usually assume that someone is trying to screw someone else whenever you find these two elements working together:

Complexity
Money

Complexity is how evil schemes are hidden from the public. Complexity is what caused so many people to get mortgages they couldn't afford. Complexity is how hedge funds hide their treachery. Complexity is how the derivatives debacle was possible. Complexity is how your financial manager can get away with charging you for doing nothing. Complexity is why you don't know if you can get a better deal with another phone carrier.--Scott Adams

I’ve always been curious about successful men, leaders, and what they know that the rest of us don’t. This book was entertaining because Eisenhower was a character, nearly getting himself kicked out of West Point, causing a lot of trouble. But always there was in him a sense of confidence, a sense he would become somebody important. And more than this, he believed the world needed him — that if he didn’t exist, things would fall apart. He believed he was called to be a great man. I wondered, as I read, where he got this confidence.  I found the reason for Eisenhower’s confidence early on in [ At Ease: Stories I Tell to Friends.], in a chapter in which he discussed his childhood. Dwight Eisenhower said that from the beginning, his mother and father operated on an assumption that set the course for his life: that the world could be fixed of its problems if every child understood the necessity of their existence. Eisenhower’s parents assumed, and taught their children, that if their children weren’t alive, their family couldn’t function.--Don Miller

Plans are nothing. Planning is everything.--Dwight Eisenhower

... because Oscar campaigns are always based in part on the terrified certainty that the performance in itself cannot possibly be enough, all three men also come equipped with prepackaged narratives. DiCaprio’s, unveiled in a New York Times "Arts & Leisure" cover story simply headlined “Risk Taker,” is just that: I’m a hard worker who challenges myself with transformative roles for serious directors, and you’re never going to see me sell myself out for Pirates of the Caribbean 5: Shitload of Doubloons. Clooney’s narrative goes something like: I use my star power to get small and worthy movies greenlit, the clear implication being that the difference between The Descendants with Clooney and The Descendants with someone else is the difference between a movie you get to see and a movie you don’t. And Pitt’s, tailored to the tortuous history of Moneyball, is: I stick with projects I believe in for years until they get made. All three of these premises have enough truth in them to be legitimately deployed. But there’s a problem: They all fall into an awards-narrative category that Movieline’s Oscar guy, Stu Van Airsdale, astutely identified a couple of weeks ago “It’s a nice story. It’s just not … charming.”  Academy voters like to be seduced by a narrative, not simply persuaded by it, and a Clooney vs. Pitt vs. DiCaprio contest has a slight whiff of “Which of the three richest, handsomest, most popular boys in the school are we going to choose as class president?” They are, in short, the 1 percent — and this is not an ideal year to be in that category.--Mark Harris

The [Stereotype Threat] study investigated the applicability of previous experimental research on stereotype threat to operational Graduate Record Examinations® (GRE®) General Test testing centers. The goal was to document any relationships between features of the testing environment that might cue stereotype threat as well as any impact on GRE test scores among African American, Hispanic, Asian American, and female test-takers. Among such features were the gender and ethnicity of test proctors and more general factors, such as the size, activity level, and social atmosphere of test centers. Our analyses revealed several relationships among environmental factors and several variations in test performance for all groups. However, we found no direct support for stereotype threat and, in fact, found some effects for proctor ethnicity that ran counter to a stereotype-threat explanation.--Walters, Lee, and Trapani

These angry women have even less of a leg to stand on, now. Ding dong, the Sterotype Witch is dead, at least when it comes to race and gender in GRE performance (unless someone has another study with the same scientific credibility they can point me to).--Cav

Photo link here.

Quotes of the day

Ben, those silver bullets that you and Mike are looking for are fine and good, but our web server is five times slower. There is no silver bullet that’s going to fix that. No, we are going to have to use a lot of lead bullets.--Bill Turpin

JoePa said that with the benefit of hindsight, he wished he had done more, which begged the question: What words, what regrets, what sorrows and devastations are left to Victims 1-8, who must wonder how life might have been different if JoePa had acted in accordance with his lovingly bestowed nickname?--Jane Leavy

... I will say that I am sickened, absolutely sickened, that some of those people whose lives were fundamentally inspired and galvanized by Joe Paterno have not stepped forward to stand up for him this week, have stood back and allowed him to be painted as an inhuman monster who was only interested in his legacy, even at the cost of the most heinous crimes against children imaginable.
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Shame on them. And why? I’ll tell you my opinion: Because they were afraid. And I understand that. A kind word for Joe Paterno in this storm is taken by many as a pro vote for a child molester. A quick, “Wait a minute, Joe Paterno is a good man. Let’s see what happened here” is translated as an attempt to minimize the horror of what Jerry Sandusky is charged with doing. It takes courage to stand behind someone you believe in when it’s this bad outside. It takes courage to stand up for a man in peril, even if he stood up for you. And that’s shameful. I have not wanted to speak because it’s not my place to speak. I’m Joe Paterno’s biographer. I’m here to write about the man. I’m not here to write a fairy tale, and I’m not here to write a hit job, and I hope to be nowhere near either extreme. I’m here to write a whole story. I’ve had people ask me: “Will you include all this in the book?” Well, OF COURSE I will — this is the tragic ending of a legendary career. I’m going to wait for evidence, and if it turns out that Joe Paterno knowingly covered this up, then I will write that with all the power and fury I have in me.--Joe Posnanski

As defenses get more complex, the answer isn't always to get more complex on offense; sometimes, it's the opposite. By making the game easier, Harbaugh has turned Smith into one of the league leaders in interceptions per pass attempt. Football is a game of intelligent compromises under constraints such as time, ability, and the raw physics of the game. And right now, at 7-1, Harbaugh's 49ers seem to have found the right mix.--Chris Brown

Can't we just call Andy Dalton "Shawshank"? It's right in front of us: Red and Andy.--Joe

Furious that I didn't think of that first.--Bill Simmons

America's monetary problem however is that they are in a liquidity trap. Six or seven years of 6 percent inflation, 2 percent interest rates and to stick the losses to the Chinese who (in their mercantilist fashion) own the debt would be a wonderful way out of America's malaise. And you would think you could induce 5 percent inflation by printing money. You would think the option is open. Indeed you would swear given how much money the Fed has printed that it would have happened. But it has not happened. Sure the Fed has printed money. And when it finished that it printed some more. Soon we will get to QE4 and yet another round of "quantitative easing" and we will still not manage to induce 5-7 percent inflation, 2 percent interest rates and to stick the losses to the Chinese.
...
If you had - without any understanding of monetary theory - been told that the Fed could increase money stock from say $800 billion to $3 trillion and not result in an inflationary torrent you would not have believed it. It would have sounded like nonsense. But you better believe it because it happened. And that requires an explanation.
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The explanation is simple enough. The Federal Reserve has too much credibility. Each time it increases the money supply it buys some asset (say a government bond or even a foreign security) and issues cash. And people hold the cash because it is a reasonable store of value. And it is a reasonable store of value because they trust - at the end of this cycle - that the Federal Reserve will eventually take its vault full of assets, sell the assets for hard cash (which it will destroy) and will thus suck the excess liquidity out of the system.
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If people really believed the cash was trash they would all try to get rid of it (ie buy something) but collectively they could not get rid of it (every time they buy something it would have a new owner) and the result would be inflation. Inflation would then reduce the real value of the money stock to a level where people were comfortable holding it.--John Hempton

The Greek debt crisis that has roiled world markets for weeks was resolved today when Greece agreed to marry TV reality star Kim Kardashian for 72 days. The marriage, believed to be the first ever between a sovereign nation and a television personality, is expected to net billions of dollars for Greece’s debt-strapped economy. The wedding between Ms. Kardashian and Greece will generate cash via a People magazine pictorial, an E! Entertainment reality series, and a bond offering backed by the International Monetary Fund.--Borowitz Report

Showing the resiliency that has frustrated foes throughout his storied career, Silvio Berlusconi today stepped down as Italian Prime Minister and assumed the helm of the National Restaurant Association. “This is a dream job for me,” Mr. Berlusconi told reporters as he settled into his new offices in Washington. “I love working with people and I intend to be very hands-on.”
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Mr. Berlusconi won the coveted position after beating out several rivals, including former International Monetary Fund chief Dominique Strauss-Kahn. “I must admit I am envious of Silvio,” Mr. Strauss-Kahn said. “There isn’t a red-blooded man alive who wouldn’t want to run the National Restaurant Association.”--Borowitz Report

The companies want to retain their favorite loopholes. For the heck of it I include the wish list below this piece. It’s endless. It’s a joke. It proves that American industry’s interests are not at all aligned with the American citizens. This list will insure that the likes of GE never pay their share of US taxes.  I don’t have a problem when US industry lobbies congress for what they want. That’s the system we signed up for. But I do have a problem when the company that has the most to gain from the tax code is also advising the Administration on economic policy.   Obama has made a bunch of dumb mistakes. His getting into bed with Jeff Immelt is high on the list.--Bruce Krasting

In a competitive, low-margin, high-hustle retail business, Ed wanted to project Bloomingdales with a Wal-Mart budget. The showroom had to be beautiful, spotless—just perfect to look the part. Customer service was paramount. In order to be successful, every employee had to have this mentality. Although we didn’t call it that then, I’ve come to believe that Ed was creating a company culture. We often get wrapped up in Silicon Valley with the “new-new” way that we can forget many times we’re simply rediscovering well worn lessons that date back to the beginnings of commerce.--Scott Weiss

Quotes of the day

Dirty tricks were not invented by Nixon; they stretch back to the Fall. Blessed is the Christian whose life is so transparent, who is “trustworthy and neither corrupt nor negligent” (Dan. 6:4), so that the only way he or she can be destroyed is by making Christian conduct and conviction a crime. ... no legal system can ensure consistent justice. Corrupt people will always find ways of exploiting the system to oppress others and advance themselves. Hidden behind the slogan is a deeper issue. Historically there has long been a tension between positive law theory, in which the only law to be obeyed is that enacted by government, and natural law theory, in which some fundamentals are thought to be discoverable by human beings. In the name of equity and justice, British courts, until fairly recently, would sometimes set aside positive law in favor of natural law where it was pretty obvious an injustice was otherwise being committed. Both in Britain and in the United States, such considerations are now rare. In Britain, what must be obeyed is what Parliament says; in the United States, what must be obeyed is what the Supreme Court says. In both instances, positive law largely prevails, as in ancient Persia. The matter has become increasingly difficult here since Western states have come to think they have a therapeutic role in society, defining the “illnesses” that must be confronted and the “therapies” that must be imposed as they go along. The potential for injustice and inequity multiplies.--Don Carson

Our tax dollars at work… a half-billion dollar loan (actually $529 million) from the U.S. Department of Energy to develop a hybrid toy for the wealthy and/or celebri-licious (like Leonardo DiCaprio, one of the first customers) that, in real world driving, won’t get much better mileage than your average crossover utility vehicle. Not only that, but the cars are manufactured in Finland — that’s right, Finland – and shipped here for sale, where their purchasers will then receive a $7,500 tax credit for buying one (the “cheap” base model starts at $96,895, with the full-zoot Eco Chic model going for a bargain $108,900). ... Those Occupy Wall Street-types in their tents at MacPherson Square? If they really, truly are bugged by corporate welfare, they need to schlep their signs and their chants and their anger over to the Mandarin Oriental Hotel. Right now. Because the Fisker Karma is where the rubber meets the road when it comes to corporate welfare. I have no problem with a group of entrepreneurs raising money from private investors to build a hundred thousand dollar toy for rich folks who want to flaunt their eco-consciousness. When and if that’s the case, may they have all the mazel in the world. But damn, it steams me up when my family and every family in America are forced to pay for it.--Andrew Fox

The more people helping each other out, the better.--Pietro Poggi-Corradini

Earlier this year, a report from Standard and Poor’s indicated that of the 1,485 stocks making up the S&P 1500 index, not a single one had a consensus sell recommendation from Wall Street analysts. That doesn’t mean there wasn’t the odd sell recommendation, it just means that there were no stocks that most analysts agreed had less than rosy prospects. Meanwhile, the S&P 1500 is down 2.77 per cent including dividends to Oct. 19, with the financials sector down 19.97 per cent. --Preet Banerjee

One of the running jokes of Mr. Chandor’s [Margin Call] script  is that the higher a person’s [corporate] rank, the less he is likely to understand what the firm is actually doing. This ignorance is almost a point of pride. “I don’t get any of this stuff” — this line is repeated about Peter’s discovery by Will, then Sam, then Sam’s boss, Jared Cohen (Simon Baker) and then Tuld. In a further absurdity, one person who does get it, Peter’s mentor, Eric Dale (Stanley Tucci) has just been downsized out of the company. As a security measure his cellphone has been disconnected, which means that his increasingly desperate former colleagues are unable to find him when he might be of most use.--A. O. SCOTT

I thought, This is a very dangerous person.--Sidney Lumet, on meeting Pauline Kael

Parents, you may be onto something: A small new study suggests that teens' intelligence, as measured by the IQ test, may fluctuate throughout adolescence. The changes -- in both verbal and nonverbal IQ -- ranged to as much as 20 points and were correlated with specific brain areas. IQ has long been thought to remain stable over a person's lifetime.--Amanda Gardner

[Steve Jobs] tries to treat [his pancreatic cancer] with diet. He goes to spiritualists. He goes to various ways of doing it macrobiotically and he doesn't get an operation. ... I think that he kind of felt that if you ignore something, if you don't want something to exist, you can have magical thinking .... We talked about this a lot.--Walter Isaacson, Jobs' authorized biographer

Ohhhh. That cake looks so good.--Kim Kardashian

Italy is house rich, somewhat cash poor, and has a miserable recent history of growth. If you look at the wealth side of the balance sheet, you can easily work up a heady optimism for Italy. If you study public choice theory, it is harder to do so. How many people in that country are either paid to do the wrong thing, or paid to do not so much at all? [The Great Stagnation] reigns. Italy’s privileges and distortions are so often so local, and so concentrated in inefficient professional services, that it is hard to imagine clearing them up quickly in the form of a big bang, in the way that say New Zealand or Chile or Thatcher’s England did. And even those successes took some time to pay off and underperformed for years. Note that if Italy could credibly be expected to grow a mere 2 pct. a year — maybe less — the entire eurozone crisis probably would be messy but manageable. It’s not.--Tyler Cowen

Brian Moynihan is here tonight. He’s the C.E.O. of Bank of America. As many of you know, Brian’s brother Patrick runs a Catholic boarding school in Haiti. Their parents must be so proud to see two of their boys running an underfunded, nonprofit organization.--Steve Schwartzman

Quotes of the day

No joke: Presidential candidate Rick Perry and comedian Stephen Colbert, who last week barraged Iowa voters with advertisements urging voters to support “Rick Parry,” shared the same political committee treasurer – until they didn’t. Salvatore Purpura, who has represented numerous political committees as treasurer over the years, told POLITICO that he resigned on Thursday as treasurer of Colbert’s super PAC, Americans for a Better Tomorrow, Tomorrow.--DAVE LEVINTHAL

So, no disrespect Gov [Perry], but when you’re getting your Keynes on like that, no need to hide it behind all that anti-gov’t rhetoric.--Jared Bernstein

Would Keynesian stimulus spending work only when it came as a surprise? Or only when the spending was outside the range of prior business experience? Keynesian economists have not even begun to answer these questions. For now, Keynesian theory has so many exceptions that we might as well discard it.--Casey Mulligan

It sounds like this time the [People's Bank of China] might be pretty serious about diversifying their risk away from USG bonds, right? Let’s leave aside the fact that every six months we have heard the same thing for the past several years, and nothing has happened, shouldn’t we nonetheless be worried? Won’t reduced PBoC purchases be hugely disruptive to the US economy and to the US Treasury markets? No, they won’t. There is so much nonsense still being said about this, even by economist who should know better, that I thought I would try to address what it would mean if the PBoC were actually serious and not simply making noises aimed at domestic political constituents. First of all, remember that the PBoC does not purchase huge amounts of USG bonds because it has a lot of money lying around and doesn’t know what to do with it. Its purchase of USG bonds is simply a function of its trade policy. You cannot run a current account surplus unless you are also a net exporter of capital, and since the rest of China is actually a net importer of capital, the PBoC must export huge amounts of capital in order to maintain China’s trade surplus. In order the keep the RMB from appreciating, the PBoC must be willing to purchase as many dollars as the market offers at the price it sets. It pays for those dollars in RMB. It is able to do so by borrowing RMB in the domestic markets, or by forcing banks to put up minimum reserves on deposit. What does the PBoC do with the dollars it purchases? Because it is such a large buyer of dollars, it must put them in a market that is large enough to absorb the money and – and this is the crucial point – whose economy is willing and able to run a large enough trade deficit.--Michael Pettis

If you look at the box score from last night’s baseball game, there’s a lot of risk in concluding which player is the best hitter on the team based on what you find in that one box score. We’re very used to seeing, say, player performance vary from game to game and making conclusions about the most productive player based on a large sample of observations, likewise with the stock market. We know that the stock market varies not only day-to-day, but hour-to-hour and minute-to-minute, and we can watch that variation online almost in real-time…. There is a lot of risk in drawing conclusions about what the Dow Jones industrial average index value will be 10 years from now based on what happened yesterday… So again, the current state, or the most recent departure, is not a rational basis for making conclusions about the long-term trend or the long-term state of a system that’s noisy.--Noah Diffenbaugh

Enumerating a long list of disparate things that may happen, without any probabilities, may work for Nouriel Roubini, but he's a charlatan: here he is last week taking credit for his client switching to cash a couple months ago, he doesn't mention he has been suggesting investors go to cash since 1990, always for a slew of reasons (though Lawrence Summers is here giving props to Roub for calling the housing crisis). I have seen reports that endlessly enumerate risks many times in large corporations, and they are highly correlated with people who either are too afraid to make a mistake, or profoundly do not understand their job.--Eric Falkenstein

As expected, the group members rated the most narcissistic leaders as most effective. But they were wrong. In fact, the groups led by the greatest egotists chose the worse candidate for the job. Says Nevicka, “The narcissistic leaders had a very negative effect on their performance. They inhibited the communication because of self-centeredness and authoritarianism.”--Association for Psychological Science

Quotes of the day

You've probably seen the headlines about a new experimental treatment for leukemia. For once, the excitement seems justified - this is a remarkable and very promising result, and it's worth taking a close look at it. ... It's important to note, though, that in one way this experiment did something quite strange: it worked much better than anyone expected. The dose of engineered T cells was much smaller than used in previous trials, and was deliberately chosen to be on the low side because no one was quite sure what to expect. Given the response, that was certainly a good move. I've no idea what would have happened if the therapy had been more aggressive, but it couldn't have been good. I hope, though, that everyone involved is enjoying this as much as possible, because this is a rare event indeed. Having things go suddenly, crazily right in a clinical trial is a once-in-a-career thing, if ever. The field of immunological cancer therapy has been given a huge boost, and now all the other groups working in the area have a huge motivation to spur them on. This is potentially some of the best oncology news in years, so let's hope that it continues to work out.--Derek Lowe

The Fed has picked such a bizarre and convoluted strategy that it is difficult for markets to predict which way the economy will go. Under interest rate pegging, NGDP can either fall or rise at an accelerating rate, depending on tiny differences in initial conditions. (Think about those saddle-point graphs you studied in math.) Fortunately, they only committed to this idiotic policy for two years, and hence it’s unlikely we’ll see explosive moves in either direction. But it would have been much simpler if the Fed has just TOLD US WHERE IT WANTS TO GO.--Scott Sumner

So if you're scoring at home, we just free-falled from Rita Hayworth to Marilyn Monroe to Raquel Welch to Farrah Fawcett to Madonna to Pam Anderson to Britney Spears to Kim Kardashian. And you wonder why our country's credit is dropping.--Bill Simmons

... the architecture of the military has become increasingly computer-based, with online communications, information storage, and other essential components that use cyberspace, or can be disrupted through attacks from cyberspace. Countries at war would gain an enormous military advantage if they could shut down the computer-networks of their adversaries for even a few hours.--Gary Becker

Once upon a time, the evil ogres of the military-industrial complex spawned a mutant flying machine, a freakish helicopter-airplane hybrid so dangerous and costly it deserved to die. Yet tribes of pork-addicted toadies and blind intellectual dwarfs shielded the beast from knights in shining armor who sallied forth tirelessly -- heavily armed with GAO reports -- to slay it. That's the fairy tale the V-22 Osprey's bitterest critics like to believe, but the facts about the tiltrotor transport, which the Marines fought a quarter of a century to get into service, tell a far happier story. This ugly duckling is turning out to be a swan. ... By the time the Marines first put the Osprey into service in Iraq in 2007, though, it had cost more time, money and lives than any other piece of equipment the Corps has ever bought -- 25 years, $22 billion and 30 deaths in crashes during its development. The Osprey was a very ugly duckling. Since then, the saga has taken a very different turn, but many of the Osprey's loudest critics – notable among them the New York Times editorial page – went to sleep in the middle of the story. ... Since Dec. 11, 2000, the Osprey has suffered one fatal accident – one in 11 years.--Richard Whittle

A White House photographer was allowed to take and widely distribute a photo from the ceremony Tuesday for the return of the remains of 30 American troops killed in a weekend helicopter crash in Afghanistan despite the Pentagon's claim that any public depiction of the scene would violate the wishes of bereaved families.--LOLITA C. BALDOR

I never knew an admiral I respected more as a man than a second class petty officer SEAL. I believed that if I had played the game the way it was meant to be played, and caught a few lucky breaks, I might have made flag rank. I know that I do not have now, and never did have, what it takes to be a Navy SEAL. The selection process is rigorous, the training syllabus withering. You may think you have what it makes to be a member of the teams. But if the instructional staff has doubts about your intelligence, your dedication, your ability to work as a member of a team, your physical stamina and endurance, you are done. There is no court of secondary appeal. And when they have decided that you do not have what it takes to make the grade, to fight alongside their beloved brothers in arms, you will leave thinking it was your decision. You will ring the bell and be grateful. For those few who make the cut, those who get to wear the Budweiser, the real challenges are yet to come. The challenge now is not to make the cut, it is not to grasp the intricacies of advanced training. The challenge is to go to places so utterly foreign, and fight foes so thoroughly implacable that to take the mission is to willingly part with all that you have, and all that you love, and place everything in the balance in a desperate gamble.--Neptunus Lex

For those who know, no explanation is necessary. For those who don’t, no explanation is possible.--unnamed TOPGUN instructor

Slide link here.  Photo links here, here and here.

Quote of the day

I believe you're going to see a very great NFL over the next decade and I hope we gave a little lesson to the people in Washington because the debt crisis is a lot easier to fix than this deal was. Thank you.--Robert Kraft

We haven't cracked growth; we haven't cracked the business cycle

The Story of Economics, via Tyler Cowen.

The Story of Economics from Kate Burn on Vimeo.

Quotes of the day

It’s funny to me that honesty turns one into a dissident in global development.--Jessica Mack

One of the most unfortunate (and surprising) side-effects of the triumph of computer-generated animation was the death of the female protagonist in children’s movies. Think of all the female protagonists in Disney musicals. There are quite a number, almost as many as there are males—Cinderella, Belle, Ariel, Pocahontas, Mulan… the list goes on. Now think of female protagonists in Pixar movies. There aren’t any. Not a single one.--Stefan

I don’t look at [high frequency algorithmic trading] it as in any way evil … I don’t think the guy who’s trying to hide the supply-demand imbalance [by using an execution algorithm] is any better a human being than the person trying to discover the true supply-demand. I don’t know why … someone who runs an algo-sniffing strategy is bad … he’s trying to discover the guy who has a million shares [to sell] and the price then should readjust to the fact that there’s a million shares to buy.--unnamed New York broker

Whatever view one takes on its ethics, algo-sniffing is indisputably legal. More dubious in that respect is a set of strategies that seek deliberately to fool other algorithms. ... Systems that are both tightly coupled and highly complex, Perrow argues in Normal Accidents (1984), are inherently dangerous. Crudely put, high complexity in a system means that if something goes wrong it takes time to work out what has happened and to act appropriately. Tight coupling means that one doesn’t have that time. Moreover, he suggests, a tightly coupled system needs centralised management, but a highly complex system can’t be managed effectively in a centralized way because we simply don’t understand it well enough; therefore its organization must be decentralized.--Donald MacKenzie

In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. ... Invoking the Ellis Act would also mean that any new tenant to the unit, should Murphy decline the chance to return, would also be entitled to Murphy's old rent amount for many years to come. So the Koniuks would likely opt to just leave it vacant. Increasingly, small-time landlords ... are just giving up. ... Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.--Elizabeth Lesly Stevens

[Mayor Bloomberg's] strategy adds up to one thing: twisting himself in knots to acknowledge the city's untenable fiscal situation while avoiding a head-on fight with labor. But sometimes peace -- and cognitive dissonance -- is unaffordable.--Nicole Gelinas

My gripe is with the Universe. If I were running the Universe, there’d be some level of accomplishment that confers immunity from death, deterioration and obscurity. I’m not sure exactly where I’d set that bar, but I’m sure Dan Quillen would have cleared it.--Steve Landsburg

The more dogmatic and determined the leader, the less likely it is that they’ll face any opposition. Leaders who quash dissent are virtually certain to be able to make any decision they feel like virtually unopposed. ... The danger of the fundamental attribution effect when applied to CEOs or securities analysts or investment gurus or the apparent internet insider with the hot tip is that they’re as mentally hamstrung as we are. If we have to lose money on the markets we can at least do it through our own errors, rather than at second hand.--timarr

... [F.A.] Hayek’s skepticism about government was NOT based on his certainty, as [Francis] Fukuyama would have it, but on his awareness of his ignorance. (and everyone else’s) We public intellectuals who are communicating ideas of Hayek to a broader public are NOT fond of ideas that highlight our own ignorance, so one prediction that can be made with a higher degree of certainty than usual is that Hayek will continue to be misunderstood.--William Easterly

World population grew by almost 300% during the twentieth century; over the same time period, world per capita incomes grew by about 400%.--Gary Becker

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