Kids Prefer Cheese
Credibly promising to be irresponsible...since 2004!
Thursday, December 31, 2009
Shareholder Value Destruction
Shareholder Value Destruction following the Tiger Woods Scandal
Christopher Knittel & Victor Stango, University of California Working Paper, December 2009
Abstract: We estimate that in the days beginning with Tiger Woods' recent car accident and ending with his announced "indefinite leave" from golf, shareholders of
companies that Mr. Woods endorses lost $5-12 billion in wealth. We measure the losses relative to both the entire stock market and a set of competitor firms. Because most of the firms that Mr. Woods endorses are either large or owned by large parent companies, the losses are extremely widespread. Mr. Woods' top five sponsors (Accenture, Nike, Gillette, Electronic Arts and Gatorade) lost 2-3 percent of their aggregate market value after the accident, and his core sports-related sponsors EA, Nike and PepsiCo (Gatorade) lost over four percent. The pace of losses slowed by December 11, the date on which Mr. Woods announced his leave from golf, but as late as December 17 shareholders had not recovered their losses.
Labels: articles to read
The LMM Dances with Neanderbill
Rowland S. Howard has died!
People it has been a very bad week for the music world. On the heels of Vic Chesnutt, Rowland Howard has died of liver cancer.
Stupid Human Tricks
Article from the Wilmington Star News (I was in Wilmington to do a radio interview on THE BIG TALKER)
Man arrested day after leading Wilmington PD on chase through town
A man was arrested Tuesday night after he led police on a chase in Wilmington the night before, officials said. Johnnie Mack Shingler, 23, faces charges including speeding to elude arrest, driving the wrong way on a divided highway and driving without a license, according to Sgt. Matt Hardee of N.C. Highway Patrol.
Shingler is from the state of New York.
On Monday, Hardee said, troopers joined a pursuit, which was started around midnight Monday by Wilmington police who spotted a 1972 Plymouth Valiant driving without a license plate, Hardee said. The chase went from Wilmington, down Carolina Beach Road and toward Monkey Junction. At one point, Hardee said, the fleeing driver drove north in the southbound lanes of College Road. Rather than following, troopers tracked the driver from the other side of the road. Eventually, the driver ditched his car off of Trombay Drive, ran into the woods and escaped.
Authorities found pictures of Shingler and his birth certificate in the car, Hardee said. – David Reynolds
1. A 1972 Plymouth Valiant? REALLY?
2. The guy left his picture and birth certificate in the car. IN. THE. CAR.
3. Monkey Junction?
Wednesday, December 30, 2009
Gas Me With a Spoon: Three Articles....
Pain at the Pump: The Differential Effect of Gasoline Prices on New and Used Automobile Markets
Meghan Busse, Christopher Knittel & Florian Zettelmeyer, NBER Working Paper, December 2009
Abstract: The dramatic increase in gasoline prices from close to $1 in 1999 to $4 at their peak in 2008 made it much more expensive for consumers to operate an automobile. In this paper we investigate whether consumers have adjusted to gasoline price changes by altering what automobiles they purchase and what prices they pay. We investigate these effects in both new and used car markets. We find that a $1 increase in gasoline price changes the market shares of the most and least fuel-efficient quartiles of new cars by +20% and -24%, respectively. In contrast, the same gasoline price increase changes the market shares of the most and least fuel-efficient quartiles of used cars by only +3% and -7%, respectively. We find that changes in gasoline prices also change the relative prices of cars in the most fuel-efficient quartile and cars in the least fuel-efficient quartile: for new cars the relative price increase for fuel-efficient cars is $363 for a $1 increase in gas prices; for used cars it is $2839. Hence the adjustment of equilibrium market shares and prices in response to changes in usage cost varies dramatically between new and used markets. In the new car market, the adjustment is primarily in market shares, while in the used car market, the adjustment is primarily in prices. We argue that the difference in how gasoline costs affect new and used automobile markets can be explained by differences in the supply characteristics of new and used cars.
Qualitative Effects of Cash-for-Clunkers Programs
Eugenio Miravete & Maria Moral Rincón
University of Texas Working Paper, October 2009
We document how automobile scrappage incentives similar to the '2009 Car Allowance Rebate System' (CARS) may influence drivers' tastes in favor of fuel-efficient automobiles. Between 1994 and 2000 the market share of diesel automobiles doubled after Spanish government sponsored two scrappage programs. We show that demand for diesel automobiles was not driven only by better mileage; that gasoline and diesel models became closer substitutes over time; and that automobile manufacturers reduced their markups on gasoline automobiles as their demand decreased. These programs simply accelerated a change of preference that was already on its way when they were implemented.
Malapportionment, Gasoline Taxes, and the United Nations Framework Convention on Climate Change
Lawrence Broz & Daniel Maliniak
University of California Working Paper, November 2009
Gasoline taxes vary widely among industrialized countries, as does support for the United Nations’ effort to curtail the use of fossil fuels to address the climate change problem. We argue that malapportionment of the electoral system affects both the rate at which governments tax gasoline and the extent to which governments participate in global efforts to ameliorate climate change. Malapportionment results in a “rural bias” such that the political system disproportionately represents rural voters. Since rural voters in industrialized countries rely more heavily on fossil fuels than urban voters, our prediction is that malapportioned political systems will have lower gasoline taxes, and less commitment to climate change amelioration, than systems with equitable representation of constituents. We find that malapportionment is negatively related to both gasoline taxes and support for the Kyoto Protocol to the United Nations Framework Convention on Climate Change (where “support” is measured as the duration of the spell between the signing of the Protocol and ratification by the domestic legislature).
Nod to Kevin L, who walks)
Labels: articles to read
Sneak peek at Andy Roddick's tennis wardrobe for 2010
Izod has really outdone themselves!!
Labels: I love Twitter
Flip Saunders has had enough!
Flip went medieval on his team's sorry ass after the Wizards lost to my Thunder last night. Here are some selected quotes:
Spots will be open. If guys don’t like it, that’s fine but that’s the way it’s going to be,”
“Guys want to come out of the zone and play man-to-man, but they can’t guard anybody. I can go out there on that floor and take anybody on our team on one-on-one at 52 years old and drive right around them,” Saunders said. “We’ve got to wake up. As I told them: Don’t think it can’t get any worse, because it can. There’s no question it can. We’ve got to have a sense of urgency.”
Montesquieu famously had this amazingly racist explanation of the different "characters" of nations. And it was based on....weather! Weather causes "certain" people (for the racist M, that would be "dark" people) to be lazy and no 'count. Check this:
Spirit of the Laws: Book XIV. Of Laws in Relation to the Nature of the Climate
1. General Idea. If it be true that the temper of the mind and the passions of the heart are extremely different in different climates, the laws ought to be in relation both to the variety of those passions and to the variety of those tempers.
2. Of the Difference of Men in different Climates. Cold air constringes the extremities of the external fibres of the body; this increases their elasticity, and favours the return of the blood from the extreme parts to the heart. It contracts those very fibres; consequently it increases also their force. On the contrary, warm air relaxes and lengthens the extremes of the fibres; of course it diminishes their force and elasticity.
People are therefore more vigorous in cold climates. Here the action of the heart and the reaction of the extremities of the fibres are better performed, the temperature of the humours is greater, the blood moves more freely towards the heart, and reciprocally the heart has more power. This superiority of strength must produce various effects; for instance, a greater boldness, that is, more courage; a greater sense of superiority, that is, less desire of revenge; a greater opinion of security, that is, more frankness, less suspicion, policy, and cunning.
In short, this must be productive of very different tempers. Put a man into a close, warm place, and for the reasons above given he will feel a great faintness. If under this circumstance you propose a bold enterprise to him, I believe you will find him very little disposed towards it; his present weakness will throw him into despondency; he will be afraid of everything, being in a state of total incapacity. The inhabitants of warm countries are, like old men, timorous; the people in cold countries are, like young men, brave.
Now, unbelievably, check this!
The Income–Temperature Relationship in a Cross-Section of Countries and its Implications for Predicting the Effects of Global Warming
John Horowitz, Environmental and Resource Economics, December 2009, Pages 475-493
Abstract: Hotter countries are poorer on average. This paper attempts to separate the historical and contemporaneous components of this income–temperature relationship. Following ideas by Acemoglu et al., we use colonial mortality data to account for the historical role of temperature since colonial mortality was highly correlated with countries’ average temperatures. The remaining income–temperature gradient, after colonial mortality is accounted for, is most likely contemporaneous. This contemporaneous effect can be used to estimate the consequences of global warming. We predict that a 1°C temperature increase across all countries will cause a decrease of 3.8% in world GDP. This prediction is robust across functional forms and an alternative method for separating historical effects.
Wow! Global warming allows lefties to be racists! Yikes!
Tuesday, December 29, 2009
Doing the least with the most
Quien es lo mas Loco?
People, who the craziest? Janet Napolitano or Al Queda?
Monday, December 28, 2009
Starry, Starry Bush Roads
Anonyman writes, "They followed a forest road for 35 miles?!? GPS doesn't seem like their biggest problem."
About this, I mean.
What's your favorite thing about this incident? Here are two of MY favorite things:
1. Thinking about the conversation the LMM and I would have if I got us that lost in the mountains, for three days, using GPS. "STOP and ask for directions!" "Ask WHO? Besides, I know where we are. Look at this map!" "I told you not to...." and "I think there are some lights up ahead," and so on.
2. The woman's name is Starry Bush-Rhoads. No, really. They got lost for three nights in the mountains on bush roads, and her name is....well, you see my point.
Labels: We get letters
The Grand Game!
Sometimes here at KPC someone sends a link that is just SO sweet that we have to examine it, savor it, and then leave it by the side of the road to rot.
While Sweden has a large state and well developed public services, in Japan government social expenditure makes up an unusually small part (compared to other OECD countries) of its Gross National Income. The same contrast exists among US states - even between neighbouring states like Vermont and New Hampshire. Vermont takes the big government route and New Hampshire the small. But despite the contrast in how greater equality is achieved, Sweden, Japan, Vermont and New Hampshire all enjoy good health, lower rates of most social problems - i.e. all the benefits of greater equality.
Here is just such a link, a set of "studies" so noisome, so nonsensical... well, enjoy. Here is the "evidence" page. This is a rare combination of almost painful self-importance and bad social science.
J. Gruber joins the dark side
People, did you know that any money you actually get to keep is simply a temporary tax break generously allowed to you by a beneficent and magnanimous government?
"So in the end, we have a policy that provides the necessary financing to pay for subsidies to low-income families; induces employers to buy more cost-effective health insurance, lowering U.S. health-care spending; offsets a bias in our tax system that favors more expensive insurance; and raises wages by $223 billion over 10 years."
Sunday, December 27, 2009
I have written about nachas before. But about sports.
Today, I had to take the YYM down to the Urgent Care Clinic, because he had pink eye, and we needed some antibiotic eyedrops.
On the way home, we were talking about theories of the origin of the moon, and the problem of caclulating mass, and LaGrangian points (I had not heard of these...)
The YYM is quiet for a minute, and then says, "I was wondering the other day about kinetic energy of a bullet. So I calculated the kinetic energy of a .50 caliber bullet from a M-82".
(I'm thinking, okay, not so hard, you just need estimates of the mass of the bullet, and the muzzle velocity....Still, very cool that he would actually try to calculate it!)
He goes on, "And I wondered how fast a small car, say a Smart Car, would have to be going to have the same kinetic energy."
He looks over. "About 16 miles per hour. A .50 caliber round from an M-82 sniper rifle has the same kinetic energy, at least when it leaves the barrel, as an empty Smart Car traveling at 16 miles per hour."
This, for a father, produces a flood of pure hormonal nachas. To think that this is an interesting question is pretty great. To be able to solve for it is a sign that he actually has learned something in physics. And to bring it up in casual conversation, as a random factoid, ensures his admission to the club of geek-nerds.
I'm so proud....
(UPDATE: I haven't checked the algebra. He may have gotten it wrong. But it SOUNDS about right, in order of magnitude)
Vic Chesnutt, R. I. P.
American poet/songwriter Vic Chesnutt is dead.
Saturday, December 26, 2009
Beginners' Guide to Liberty
Registration Map of NC
Thanks to the good work of Ray U., we can construct the following registration map of NC. As the legend suggests, the GREEN counties are those with Libertarian regisration proportions (as % of registered voters) greater than 0.11%. And the YELLOW are counties with registration proportions of 0.09% to 0.109%. And that's about half the counties. The RED counties are those with the lowest percentages, below 0.03%. The counties left white, then, are those between 0.03% and 0.089%.
Overall, only 1 in 1,000 registered North Carolinians are L's.
Labels: Libertarian Party
Republicans are Hypocrites
Remarkable that the best defense the Dems can come up with for their "sell your children" deficit is "The Republicans did it!"
I thought that the Dems, and Obama in particular, had promised to make DIFFERENT mistakes. So far, foreign / military policy is Bush III. And, since the Republican fiscal policy was "run up the deficit, and pay off Goldman Sachs," and the Dem policy is "run up the deficit much faster, and pay off Goldman Sachs,"...well, I don't see much to pick from here.
Still, sure, for the record, the Republicans are stone liars. I agree.
Six years ago, "it was standard practice not to pay for things," said Sen. Orrin Hatch, R-Utah. "We were concerned about it, because it certainly added to the deficit, no question." His 2003 vote has been vindicated, Hatch said, because the prescription drug benefit "has done a lot of good."
"Standard practice not to pay for things"? Only if you are a Senator, Orrin. And the idea that spending "does a lot of good" is amazing. Clearly, if I take money from A at gunpoint, and give some of it to B (keeping the rest to pay my expenses), then B is, in terms of that one program, better off. That is NOT the same as "does a lot of good," even if there are many people in the B category.
And the prescription drug benefit, since it was paid for with deficit, actually takes money from B's grandchildren in the future, and gives it to B NOW. B likely would not do that straight up, but give B the smoke-screen of this being a "government program," and it DOES A LOT OF GOOD!
(Nod to Anonyman, who never lies. Just ask him.)
Friday, December 25, 2009
Thursday, December 24, 2009
Op Ed in Durham Herald
Sing it Bing!
Labels: that explains everything
Labels: I guess they're on to us
Wednesday, December 23, 2009
The Cutest Darned Baby Panda
To each according to their needs
Seth Roberts great post about appreciative thinking (link is here, it's well worth reading) got me thinking about my own career teaching grad students. I realized that, in alternating waves, I've dealt with students who needed to learn appreciative thinking and students who needed to learn Cowen's Law.
Tuesday, December 22, 2009
Lazy Students, or Just Clueless?
There is an interesting divide. Some of my students work, and some don't. Most of the ones who work, do well. (They got into Duke, so they have SOMETHING going for them)
And some of the ones who DON'T work much, still do well, at least in the B+ range. To be honest, Poli Sci is just not that hard. If you are smart and write well, you can write a perfectly acceptable paper in four days. Even just crunched in at the end of the semester.
An interesting article, on working and time management. The amazing thing is that you just need to work a little, every day, to succeed.
Same thing for faculty: 3 hours actual work, writing, every day and you will be pretty successful.
Happy Solstice from Angus & Mungowitz!
Back From NYC, and Rapping It Down
So, I'm back from NYC, and have finished my (truly trivial, probably will die on cutting room floor) role in the rap video. It was SO great to watch the film crew in action, though. Very, very cool. Also colder than heck in NYC, post-blizzard.
For more info on the video, and the rap song, and the people who actually matter, check this video....
Monday, December 21, 2009
Spanish is so great
One of my favorite dichos (sayings) in Spanish is "salir de Guatemala y llegar a Guatepeor" which is in the same spirit as "out of the frying pan and into the fire" only much much funnier.
Labels: Doin' It Wrong
The EYM Comes Home
The Elder Younger Munger returned home from UNC, resplendent. He pulled the intermediate microecon and macroecon courses out. He had skipped the intro courses (which are always dreadful) and the second level courses (which are only slightly less so). But it does help to know the definitions. Still, he got through them both, with just enough for the "gentleman's A-" that is what the "gentleman's C+" has turned into at American universities. Two anecdotes of the return.
1. In the car, he was describing a friend of his. The EYM has a great deadpan, which drives the LMM a little nuts. EYM: "I have a friend. He just got his nipples pierced. His first piercing experience."
LMM: "Why? And YOU had better not do that."
EYM: "Whimsicality. He got curved barbells inserted into his nipples. But invisible to others, most of the time. Whimsicality."
LMM: "And he's better now, somehow?"
EYM: "Well, he is considerably more sensitive to temperature changes...."
2. Then, the EYM noted that he is in a "band," THE PRETENSE. They have "tracks" up on MYSPACE, at http://www.myspace.com/thepretensemakesense
They are, as you will hear if you listen, a noise rock band. Three tracks have particular historic value, I think:
"Exams at 8 and 12, Featuring 'The Neighbor'" (listen at the end; that's an actual neighbor coming in and telling them to STFU)
"Stupidly Hot Shower" (just because)
"Kentucky" (this track was of course much too commercial and calculated for the band's core fans. It has, after all, both something like a melody and something like lyrics. NOT those things, but something like them. So the band broke up over creative differences, but reformed after promising NEVER to "sell out" with any commercial pandering like this again. A turning point, I predict.)
Finally, I should point out that they are playing a gig January 18, at Elon, as a warmup band. I predict injuries, inflicted by the audience, and inflicted on "The Pretense."
UPDATE: Old KPC friend Martin comes home for Froehliche Weihnachten, and sends warm props to the EYM. Thanks, Martin. And of course I will elevate your suggested link to the front page. That's amazing.
As for Principles of Econ, Patrick, you MAY be right. But the EYM read Hazlitt, Hayek, and Heilbroner, Read and Rand before he was 12. He is almost finished with a math major in college. I don't see why memorizing the definition of "elasticity" in a large principles class is going to help. Having me as a dad has many obvious drawbacks. Why not acknowledge the one benefit: He has had "Principles" shoved down his throat since birth?
Go Josef, it's your birthday
We gonna party like it's your birthday, sip Bacardi like it's your birthday and, for at least one day, no one in Russia is gonna badmouth you!
Despite overseeing political purges and widespread famine that killed millions of Soviet citizens, Stalin is still embraced by many Russians nostalgic for Soviet times.
His popularity has even risen in recent years amid a Kremlin-backed campaign to burnish his image as the man who led the nation to victory in World War II.
"We would very much like for any discussion of the mistakes of the Stalin epoch to be silenced today, so that people could reflect on Stalin's personality as a creator, a thinker and a patriot," Communist deputy parliament speaker Ivan Melnikov said on the party's Web site. The Communists represent the country's second most powerful political party after Prime Minister Vladimir Putin's United Russia.
You got it Ivan!!
Labels: Biden Please Shut Up
Don't walk him, but don't give him anything good to hit
As a mere lad, pre Mrs. Angus and digital cable, I followed baseball. At one point in this (admittedly low) stage of my life, I recall watching a show about the Atlanta Braves on the "Superstation" where the pitching coach came out to the mound and offered up the zen koan of unhelpful advice that comprises the title of this post.
President Nicolas Sarkozy has ordered the head of the French train authority to get Eurostar traffic moving again by Tuesday.
Eurostar has suspended traffic between Paris and London pending tests to determine what caused five trains to get stuck inside the Channel Tunnel late Friday, trapping more than 2,000 people for hours.
Sunday, December 20, 2009
Markets in one less thing
Reuters informs us that Horse is "falling off restaurant menus" in France:
"Many people love horses and traditionally, many French people have loved them even more with a side of salad. That passion, however, has slowed to a trickle in the last couple of years as crisis-hit French consumers buy less meat and years of campaigning by animal rights groups take effect.
Consumption of horse meat has fallen 12 percent in the last two years and currently makes up less than 1 percent of all meat consumed in France, the ministry said in a report.
"Horse is indeed a French dish, but you'd be very hard-pressed to find it in any restaurants now," said the chef at restaurant Le Central in Paris, adding: "There's so much publicity against it.""
Labels: the sausage factory
Good Books, Bad Books
On the "good" side of the ledger:
Saturday, December 19, 2009
Incontrovertible proof that Economics is a Science!
Twitter Experiment: Avatar today, Rap Video Tomorrow!
So, I'll try out this whole TWEET thing.
Today, going to see 3D Avatar.
Tomorrow, flying to New York to play the role of "The Bouncer" in Russ Roberts' rap video production. I can't post details, but the Wall Street atmospherics should be worth something.
So, follow if you will....
Just too obvious
Friday, December 18, 2009
Anonyman sends this link, noting that the LMM and Anonyspouse have similar views on Tiger-Edwards-Spitzer-Sanford. (My wife has made it clear that if I dillied or dallied, she would leave. But she would not leave empty-handed. She would be carrying with her the official "Lorena Bobbitt" souvenir edition portion of me, as a keepsake. Since I would not be needing it any more.)
Why is it, then, that Hillary Clinton gets so much respect? Remember that extraordinarily condescending interview, where she said she would NEVER bake cookies and stand by her man? And then she did EXACTLY that, like a whipped dog? Sure, she made Bill miserable, for more than a year. But she stayed with him, as a calculation of her own interests, in effect selling and demeaning herself. She did "make" him sleep on a couch. That is a little funny, because they already had separate bedrooms!
Why would any woman with independent financial means stay around to be humiliated?
You go, girl. Go out the door. Leave. You are better than that.
UPDATE: I have to add this. Here is the treatment the Hill had to endure after the scandal, and Bill fessed up. WHY did she stay?
The big story continues to be President Clinton's best selling book. On the
news tonight they interviewed Clinton's editor. Editor? The book is 957
pages long! What the hell did he edit?
The book is huge. And actually, it folds out into a bed.
The "New York Post" is reporting today that Clinton now feels he has two more autobiographies left to write. That's what I love about Clinton. He's the only guy in the world who has three different versions of his life story. One for him, one for Hillary, one for the grand jury.
In the book, Clinton says that "in politics, if you don't toot your own horn, it usually stays untooted." And if you get someone else to toot your horn, you get impeached.
In his book, Bill Clinton talks about the point where Hillary started to laugh again. It was when he told her "Look, I'll never cheat on you again. I promise." Apparently she got hysterical.
It's only been out a day, Bill Clinton's book is already number one on the
"New York Times" bestseller list. The book is called, "My Life...As A Dog."
It's a fascinating read, this Clinton book, in the book he claims he led a double life. There were 2 Bill Clintons. Bill Clinton claims he led a double life. He was kind of like Dr. Jeckyl and Mister Hyde the salami!
In the book, Clinton reveals one night when he was five or six years old back in Arkansas. His step dad fired a gun in the house but it didn't hit him or his mother. So it looks like this bad aim thing runs in the family.
The most quoted thing in the book is where Clinton talks about after the Monica Lewinsky scandal broke, he slept on the couch for two months. That's how you know Hillary was mad, they had separate bedrooms and she still made him sleep on the couch!
Today Monica Lewinsky was not sympathetic. She said if Bill thought the couch was uncomfortable, he should try getting under that little desk.
Bill Clinton is really busy right now. He's so busy signing books that he had to cancel his 3 o'clock intern.
I went to the book signing and I was surprised the book was already 30 percent off. Just like his pants.
Angus's favorite music of 2009
To me, there was one release that stands above all others this year. "Bitte Orca" by Dirty Projectors totally knocked my socks off. It's just so f-ing triumphant! Here is a song from the album called "Cannibal Resource"
Here's a sample:
Thursday, December 17, 2009
App State is HOT HOT HOT
Episode II: The Women Strike Back
Wow. One can't condone the violence.
But sports trophy wifes are saying, "Enough!"
Elin beat Tiger like a punk.
And now Chris Henry has actually died being thrown out of a truck. Mr. Henry's fiancee was upset at him, and basically killed him. The description was that "he came out of the truck." Sure he did. Because she was swerving around and screaming at him.
Hell hath no fury.....
On Dancer! On Prancer!
What kind of sick person would do this?
What kind of sick person would put it on their blog?
Banks Not Lending?
I have been struggling with figuring out where the banks are getting money to pay back the TARP loans with all the bad loans they have on books and the fact that they are not lending money. I do not see where they are making money suddenly to pay off TARP and pay bonuses!
Thank goodness you got to KPC in time, where ALL can be explained!
The banks are getting money from two sources:
1. The Federal Reserve System, through the its Open Market Desk in NY, and through other outlets, is POURING money into the system, in the form of reserves. Banks, as a result, have an extraordinary amount of cash.
How does the Fed do that? They buy long-term Treasury bonds. Banks can hold reserves in cash or bonds. Many were holding bonds, because there is an inverse relation between interest rates and the value of bonds. If interest rates fall, bond owners take a capital gain. Rates have fallen a lot over the past 14 months. But now rates are near zero. So banks are happy to sell bonds.
When the Fed buys t-bonds, it takes money out of its account at the Treasury (and that account is NOT part of the money supply) and transfers it to the accounts of banks and other entities. Say Fed buys a $1 million dollar bond from Bank of America. BoA has no more wealth than before, but it suddenly has an extra $1 million in cash it needs to invest. The Fed has been increasing the money supply in just this way for the past year or more, at a rate of 10% per month. (I didn't stutter, 10% per month, biggest sustained increase ever, in absolute terms).
2. The assets (collateralized debt obligations and other mortgage-backed securities) have become a little less illiquid. A year ago, nobody would buy CDOs at any price. Now, that part of the credit market has unfrozen a little bit. Banks may still be bankrupt, on their balance sheets, but they can get their hands on some cash, lots of it, by selling off CDOs and other assets.
So, why aren't we seeing the RETAIL credit market unfreeze, since the WHOLESALE credit market, described above, has plenty of cash?
Again, two reasons. First, banks are still trying to avoid risk. And it is not clear that recession is over, in the real world. So banks are borrowing money from the government, at 0%, and then buying NEW federal debt, which pays 3%. That's a guaranteed 3% real return, with no risk. So the Fed buys up debt to increase the money supply, to get the banks to lend. But the banks just buy more government debt, lending to the government instead of lending to small businesses or even large businesses.
And the government is having to borrow more and more to finance the deficit being used to bail out the banks. But the banks are just using the bail-out money to buy more of the debt being used to finance the bail-out! From the taxpayer's perspective, you'd be better off playing the "3-card monte" games in Times Square.
Second, the rush of cash is causing an "asset inflation" which I had always thought was just a wild hypothesis, something that could never happen in the real world. But it IS happening. We aren't getting broad inflation (though the Producer Price Index has been up at a nearly 6% annual rate the last two months!). But the stock market is looking pretty good. But it may simply be because the Austrian Econ prediction of an asset inflation is correct.
Wednesday, December 16, 2009
A bad day to be in Copenhagen
Consummate statesmen Robert Mugabe and Hugo Chavez addressed the climate change conference.
"Why is the guilty north not showing the same fundamentalist spirit it exhibits in our developing countries on human rights matters on this more menacing threat of climate change?"
And Chavez too got right to the heart of the matter:
"If the climate was a bank, they would have already saved it."
Now that things have devolved to a circus, why not go all the way and have Ahmadinejad say a few words?
What's that? He's on the schedule for tomorrow?
Two quite useful posts
and on the "carry trade" argument we have argued about before. Angus has noted a weak dollar is not a problem, and of course that's right. But a strong dollar is also not a problem. That's why, as Angus put it, using technical economics language, "Who gives a crap about the dollar?"
This Math is Hard to Understand
The problem, I think is obvious. If you add up the percentages, you get 193%. This is obviously wrong, since even Rachel Maddow knows that a circle has 360%. And a pie chart is a circle. Therefore, a duck is made out of wood, just like a witch.
Thus, we all want to know about the missing 167% has gone to. That is too big to be reporting error.
Perhaps the explanation is that the source is "Opinions Dynamic." Dynamic, indeed.
(Nod to RL, who is only partly made out of wood, and even then only after a glass of wine)
Best. Samuelson. Quote. Ever.
Tuesday, December 15, 2009
A bad week for Icons
UNC Library, Midnight Flash Rave
Labels: people and places
The culture that is Germany: Polar bear edition
Remember Knut? The polar bear cub rejected by his mom and hand raised by keepers in the Berlin zoo? Well he just turned 3 and is doing well, having avoided being banished to a lesser zoo, and even gaining a temporary "girlfriend" that his fans hope to make permanent.
A way out for Eldrick
People, Tiger's cone of silence plan is not working. Accenture has dropped him, Gillette has de facto dropped him, Tag Heuer is thinking about dropping him, Gatorade has de facto dropped him, and Elin is rumoured to be dropping him, even though he's promised muchos Benjamins for her to stick around.
He needs a game changing play.
My advice? Medicalize it!
That's right, "my name is Eldrick Woods and I am a sex addict". People, it's perfect. Release a statement, go into rehab and come out at the end of 3 months or so magically transformed into the sympathetic figure in the play.
How can a sponsor drop him for having an illness? Jeez, even Elin would seem unsympathetic if she followed through and divorced him or even ratcheted up the pre-nup.
Think about it Tiger, I want to see you play all four slams this year!
Monday, December 14, 2009
A Tiger Documentary
Whole Foods Republicans
Words Fail Me
The Liberal Surge was actually a High Water Mark
Just one year ago, the chattering-battering class was thumping its thin little chest and whooping it up for the new liberal takeover of the world.
Well, how do you like us, now? Germany has selected a surprisingly conservative government. Chile appears to be well on its way to electing a VERY conservative fellow (though with some social liberal stands, bless his heart!)
Fact is, Obamamania was not the return of the left to American, or world, politics. It was the reaction against an unresponsive and tin-eared militarist and corporatist regime called Bush.
Obama even won a Nobel Prize for not being Bush 43. Although Bush 41 could easily have given the same speech that Obama gave when Obama got the Nobel for not being Bush 43. Obama may be trying to centerize himself, in spite of his instincts for lunacy, and his surprising inability to understand even basic economics.
But the deficit, the mishandling of TARP, and unbelievable mishandling of health care by the left (again) have all combined to make the alternatives look pretty strong.
I still wonder if the Republicans aren't going to snatch defeat from the jaws of victory, by "New York 23rding" themselves into irrelevance.
Many voters seem to prefer to vote for a loser they really like, rather than reduce the majority Nancy P and Harry R need to do their dirty work. And so the dirty work will go on.
My own view is that if you are going to do a protest vote, then do the principled thing. Don't go halfway, and vote for a RINO. Vote Libertarian!
Poison Can Quench Your Thirst
That Ben B. He really is putting us in a bad spot.
Federal Reserve Chairman Ben S. Bernanke is prescribing “poison” to the U.S. economy by keeping interest rates near zero and fueling a wave of speculative capital that may cause the next global crisis, former Morgan Stanley chief Asian economist Andy Xie said.
Bernanke is making decisions based on “marginal considerations” that will help short-term growth and employment, instead of focusing on the “soundness of the system,” Xie wrote in an e-mailed note today. The next worldwide crisis will probably strike in 2012, driven by inflation as the low cost of borrowing spurs increases in asset prices, he said.
“There is a Chinese saying that one could quench the thirst by drinking poison,” said Xie, who predicted in September 2006 that the U.S. economy would fall into a recession in 2008. “Bernanke seems to be prescribing exactly this to the U.S. economy. The slower Bernanke raises interest rates, the bigger the next crisis.”
Sunday, December 13, 2009
Deny Me Three Times, Before the Cock Crows
It turns out that NC has a law that outlaws public officials who deny the existence of God. (It's in Article VI, Section 8, by the way. I had assumed that officials just ignored that article, the same way that they ignore most of the U.S. Constitution).
So, this guy is going to get hassled.
(Nod to Anonyman)
A boy and his flagpole
So, a kid actually did it. He put his tongue on a cold flagpole.
And it (his tongue) froze there. And the kid is dancing around, tongue-tied to the flagpole, yelling "Geh ah hung ah uf hag hole! OWWW!"
And so they called the fire department!
Because the firemen, understanding fire and its uses, would know to use WARM water. (It helps to be trained....)
Apparently, the kid was "triple dog dared" to do the tonguey thing. (For the REAL "Tonguey thing," you will need to rent "Kung Pow! Enter the Fist!")
(If you simply must see "Toungey," then it is in this trailer, the sign of being the "Chosen One"...)
Paul Samuelson: RIP
Paul Samuelson died today at the age of 94. He won the Nobel prize in Economics in 1970. He had a huge influence on the profession both as a researcher and as a textbook author.
Markets in everything: Santeria edition
Looking for a great investment vehicle? Consider the human skull.
Saturday, December 12, 2009
England is SO SCREWED
Sorry to have been so obsessed about England lately.
But what a seriously messed up place.
Here is a guy who is being fined (a LOT) for....not producing enough garbage! I have blogged before about the government claiming to own your garbage, but....wow!
(Nod to Reason Daily Brickbats)
The Latest Insult
The latest insult on the interwebs, just in time for the holiday season!
The easy version: GIYF---"Google is your friend!"
The smackdown version: LMGTFY--- "Let me google that for you!"
fill in the search field in this URL: http://www.lmgtfy.com/?q=_____.
Suppose someone in comments says, "Neil Young! Who is Neil Young?" You would say, condescendingly, "GIYF!" (In other words, the doofus should use Google, not use you as a research assistant.)
But you could also just give them, http://www.lmgtfy.com/?q=Neil+Young" (TRY IT!)
The implied insult is even clearer, and LOTS more fun. Try it at Christmas parties. Family members LOVE being condescended to by a geek!
Sphinctered by the man
Friday, December 11, 2009
A Town Called Sue: You Are Libel to Lose!
Amazing, again, how messed up England is. Interesting article with clear discussion of the problem of assignment of burden of proof.
English libel law is the opposite of America’s in many ways. In the United States, the plaintiff, or accuser, must prove that the statement in question was false; public officials must also prove that it was made maliciously, with “reckless disregard” for the truth.
In England (Scotland has its own system), the burden of proof rests on the defendant, whose statements are presumed false and who has to establish that they are true.
It is not only news organizations that are running afoul of the law. Environmentalists, anticorruption campaigners, medical researchers and soccer fans posting criticisms of their teams on blogs have all been sued or threatened with legal action in recent years.
What is Central Bank independence in a dollarized economy?
I must confess upfront that I find this story confusing. The president of Ecuador's allegedly independent Central Bank resigned under pressure yesterday because he didn't transfer a portion of the Central Bank's reserves to public sector banks quickly enough.
Thursday, December 10, 2009
Duke Faculty Prom Tonight!
No, I'm not kidding. The faculty "dinner dance" (clearly a prom, with a band, and hot women like the LMM) goes down this evening.
Me? I'll be wearing the black tux.....
Clean shirt, new shoes
And I don't know where I am goin' to.
black tux, black tie,
I don't need a reason why.
They come runnin' just as fast as they can
Coz every girl crazy 'bout a sharp dressed man.
Gold watch, diamond ring,
I ain't missin' not a single thing.
And cufflinks, stick pin,
When I step out I'm gonna do you in.
They come runnin' just as fast as they can
Coz every girl crazy 'bout a sharp dressed man.
Top coat, top hat,
I don't worry coz my wallet's fat.
Black shades, white gloves,
Lookin' sharp and lookin' for love.
They come runnin' just as fast as they can
Coz every girl grazy 'bout a sharp dressed man.
Raleigh Charter Rulz!
Both my sons went/are going to RCHS. (School site)
US News just came out with high school rankings. RCHS is 24th nationally. And it is a charter school, like many of the schools in the ranking.
AND....admission is by lottery. AND the school is in downtown Raleigh.
Why is the minority enrollment so low? (It's not THAT low, it's 10%)
Remember, admission is by lottery, the school is in an urban area where the minority population is 25% or more, and the school has enormous value-added (class size 12, teachers with PhDs, etc).
Overall, NC does reasonably well.
Some people have called RCHS a "segregation academy." That doesn't make sense to me. Why don't more minorities apply? The lottery, after all, ensures that the proportion that apply will be the proportion accepted.
And your final score is Angels 55 - AGW 36
Here is the full scoreboard from Foreign Policy:
Percentage of Americans who believe in angels: 55
Percentage of Americans who believe in evolution: 39
Percentage of Americans who believe in anthropogenic global warming: 36
Percentage of Americans who believe in ghosts: 34
Percentage of Americans who believe in UFOs: 34
Go to the link for sources. We are a wild and wacky bunch, aren't we?
Wednesday, December 09, 2009
The Tetris God: Job
Mungowitz Joins the Angus Party; STILL Not a Republican
Full disclosure: Angus has never, ever been a Republican. Not even close, really.
Me? I was.
People ask me why I am not a Republican, and I stumble for an answer. To paraphrase Jimmy Buffet, the answer is so simple it's like the Charleston, it plumb evaded me.
I do have a pretty good answer, now. It was sent to me by Anonyman. But it was written by Andrew Sullivan, who has always been one of my favorite conservatives.
For these reasons, I found it intolerable after 2003 to support the movement that goes by the name "conservative" in America. I still do, even though I am much more of a limited government type than almost any Democrat and cannot bring myself to call myself a liberal (because I'm not). My reasons were not dissimilar to Charles Johnson, who, like me, was horrified by 9/11, loathes Jihadism, and wants to defeat it as effectively as possible. And his little manifesto prompts me to write my own (the full version is in "The Conservative Soul"). Here goes:
I cannot support a movement that claims to believe in limited government but backed an unlimited domestic and foreign policy presidency that assumed illegal, extra-constitutional dictatorial powers until forced by the system to return to the rule of law.
I cannot support a movement that exploded spending and borrowing and blames its successor for the debt....
I cannot support a movement that refuses ever to raise taxes, while proposing no meaningful reductions in government spending.
There's more. It's good. And he's right.
Shine on you crazy diamond
Did you guys catch Jared Diamond in Sunday's NY Times? Ouch.
The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image — one attained by, say, avoiding oil spills and other environmental disasters — reduces criticism from employees, consumers and government.
But somehow ends up in Thomas Friedman crazyland:
While the United States is dithering about long-distance energy transmission from our rural areas with the highest potential for wind energy generation to our urban areas with the highest need for energy, China is far ahead of us. It is developing ultra-high-voltage transmission lines from wind and solar generation sites in rural western China to cities in eastern China. If America doesn’t act to develop innovative energy technology, we will lose the green jobs competition not only to Finland and Germany (as we are now) but also to China.
Class, repeat after me:
(1). Green jobs are NOT a zero sum game where nations are competing for a fixed number of them.
(2). If China or Germany or anyone develops "innovative energy technology", that is NOT bad for us. It is in fact *awesome* for us, as we can then adopt it and use it.
People, ideas are public goods. That is the whole basis of new growth theory. If China is now doing cutting edge R&D, that is an unmitigated blessing for everyone on the planet.
WE WANT OUR CHANGE BACK!
Suppose I go to a baseball game, with my teen-age son. I've just been to the bank, and the smallest bill I have is a $100.
I send my son up to get two hot dogs, some peanuts, and two diet sodas. I know that costs maybe $18.
He comes back with the stuff and sits down. I ask him for the change. He looks at me like I'm crazy. "That money is going to be spent on other things! That's leftover money!"
What would I do? I'd grab him by the belt, and shake the money out of his pockets! That's my money! I want my change back. I WANT MY CHANGE BACK!
That's what we should be telling President Obama about the TARP money. I WANT MY CHANGE BACK! Obama and his bunch of geniuses in Congress said they needed our money, that there would be a DISASTER unless we gave them a $1 Trillion bill. Maybe that was true, maybe it wasn't.
But we gave them the trillion dollar bill. AND THEY DIDN'T NEED IT ALL.
WE WANT OUR CHANGE BACK! It is outrageous that they are keeping the change, just so they can spend it on something else.
Tell the President: WE....WANT....OUR.....CHANGE...BACK! Apply the money back toward the deficit, don't treat it like a high school kid at a baseball game, on the equivalent of cotton candy and corn dogs.
Tuesday, December 08, 2009
The Culture that is Germany VII
Or Saw -1?
Here it is, direct from der Spiegel:
Was it mass cannibalism, ritual slaughter or both? Archaeologists who unearthed the remains of 500 Stone Age corpses in the German town of Herxheim say the meat was cut off their bones as if they were livestock. One conclusion is that the people were eaten -- after volunteering to be sacrificed.
Drug war over: We win!!
Part of the VANGuard
An Email Exchange
A delightful email exchange.
From: Simon Edhouse
Date: Tuesday 17 November 2009 11.07am
To: David Thorne
Subject: Re: Re: Re: Re: Logo Design
You just crossed the line. You have no idea about the potential this project has. The technology allows users to network peer to peer, add contacts, share information and is potentially worth many millions of dollars and your short sightedness just cost you any chance of being involved.
From: David Thorne
Date: Tuesday 17 November 2009 1.36pm
To: Simon Edhouse
Subject: Re: Re: Re: Re: Re: Logo Design
So you have invented Twitter. Congratulations. This is where that time machine would definitely have come in quite handy.
When I was about twelve, I read that time slows down when approaching the speed of light so I constructed a time machine by securing my father's portable generator to the back of my mini-bike with rope and attaching the drive belt to the back wheel. Unfortunately, instead of traveling through time and finding myself in the future, I traveled about fifty metres along the footpath at 200mph before finding myself in a bush. When asked by the nurse filling out the hospital accident report "Cause of accident?" I stated 'time travel attempt' but she wrote down 'stupidity'.
If I did have a working time machine, the first thing I would do is go back four days and tell myself to read the warning on the hair removal cream packaging where it recommends not using on sensitive areas. I would then travel several months back to warn myself against agreeing to do copious amounts of design work for an old man wielding the business plan equivalent of a retarded child poking itself in the eye with a spoon, before finally traveling back to 1982 and explaining to myself the long term photographic repercussions of going to the hairdresser and asking for a haircut exactly like Simon LeBon's the day before a large family gathering.
(Nod to Prabhu)
Monday, December 07, 2009
The never ending temporary tax?
In 1993, my northern neighbors in OKC voted to add one cent to their sales tax to fund something called MAPS. This tax was sold as temporary and the revenues were used to (among other things) help get the Ford Center (where my beloved Thunder play) built. The tax expired in 2001, but was replaced by an equivalent tax to fund "MAPS for kids" which spent money on school renovations or new school construction. When that tax expired, an extension was sold the the OKC-ites to help get the Seattle Supersonics to come to OKC by funding renovations of the Ford Center.
Now THAT tax is set to expire and sure enough, voters are being asked tomorrow to approve yet another extension for "MAPS 3", which is supposed to last for 9 years, and to fund a laundry list of projects such as:
- A new, approximately 70-acre central park linking the core of downtown with the Oklahoma River. The park would include a restaurant, lake, amphitheater, dog park, skating rink and other amenities. ($130 million)
- A new rail-based streetcar system of 5 to 6 miles downtown, a downtown transit hub to link streetcar, commuter rail and bus systems, and possibly increased funding for the building of commuter rail lines. ($130 million)
- A new downtown convention center on the south edge of downtown near the proposed park. ($280 million)
- Sidewalks to be placed on major streets and near facilities used by the public throughout the city. ($10 million)
- 57 miles of new public bicycling and walking trails throughout the City. ($40 million)
- Improvements to the Oklahoma River, including a public whitewater kayaking facility and upgrades intended to achieve the finest rowing racecourse in the world. ($60 million)
- State-of-the-art health and wellness aquatic centers throughout the city designed for senior citizens. ($50 million)
- Improvements to the State Fair Park public buildings, meeting halls and exhibit spaces. ($60 million)
- Contingency funds to cover unforeseen costs ($17 million)
So maybe in a few years I can take a streetcar to the senior aquatic center and then walk a luxury trail down to the Oklahoma "river" to see some white water kayaking! And after that, who knows? Maybe MAPS 4 could build a ski resort in south OKC!
More reasons to not worry about the demise of newspapers
People, you don't need newspapers, you got KPC for FREE! But (as our beloved president loves to say) some would argue that newspapers serve an essential role in a democracy by influencing the electoral process.
We use new data on entries and exits of US daily newspapers from 1869 to 2004 to estimate effects on political participation, party vote shares, and electoral competitiveness. Our identification strategy exploits the precise timing of these events and allows for the possibility of confounding trends. We find that newspapers have a robust positive effect on political participation, with one additional newspaper increasing both presidential and congressional turnout by approximately 0.3 percentage points. Newspaper competition is not a key driver of turnout: our effect is driven mainly by the first newspaper in a market, and the effect of a second or third paper is significantly smaller. The effect on presidential turnout diminishes after the introduction of radio and television, while the estimated effect on congressional turnout remains similar up to recent years. We find no evidence that partisan newspapers affect party vote shares, with confidence intervals that rule out even moderate-sized effects. We find no clear evidence that newspapers systematically help or hurt incumbents.
So to sum up, newspapers don't affect the composition of the vote and since the introduction of radio and then television (i.e. for a long, long time) have only a very small influence on the size of the vote.
OH VER RAY TED
Sunday, December 06, 2009
Wow! Great Britain is Messed Up!
two stories that caught my eye:
1. A guy found a "shorn-off" shotgun in his garden, with two live shells.
He goes to turn it over to the police. And is arrested. And was convicted. And will be sent to jail (!). For "possession of a fire arm"! The law is "strict liability." Just amazing. This man will go to jail for five years.
My gosh, even the Canadians think the Brits are a bunch of jack-booted thug boys.
Sentencing for the vicious criminal Paul Clarke will take place on December 11. And let me state some sympathy for the police, here. IT'S THE LAW that's stupid. How could you enforce a law where turning in a gun is a crime that carries a five year prison sentence?
2. A guy in Wales was cleaning up his yard. By law, the People's Democratic Republic of Wales has dictated that you MUST put yard waste in the special yard waste containers so that paid goons can suck down taxpayer money to go around and collect it for "composting."
So, our sturdy lad did as he was told. But he also raked up some sticks and apples that had fallen from his apple tree. Apple tree is in the yard, and when it drops sticks, leaves, and apples that might well seem like yard waste.
The crew of cretinous sinecurists refused in horror to collect this dangerous waste, and slapped a "CONTAMINATED!" sign on the bin.
As for me, I'd say the Brits have gone ROUND the bin. One thing occurs to me: would it okay if the first guy had put the shorn-off shotgun in his yard waste? If he had, then the cops would have been forced to arrest the collectors, right? Zero tolerance on gun possession.