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July 30, 2009
How to get a cheap but great shave
The most economical option would be Bic single-edge disposables “for sensitive skin”. Some drugstore chains carry their own house version that seems to be identical and even cheaper. I get the best shaves from any disposable from these BICs, but you need to make sure they’re the single-edge razors, not the twin-blades. Those are pretty rough.Depression Shaving v2.0For lather, a bar of Dove soap is cheap, long lasting, and surprisingly good as a shaving soap. Not all bath soaps are. If you want to go with real shaving cream, Palmolive shave cream in the tube is really cheap and very good. Look for the red tube, not the green “brushless” tube, it’s garbage. Red tube’s much better. The scent’s not wonderful but the shave is.
Posted by OneEyedMan at 2:51 PM | Comments (0)
Ingenious
If you can show that you have family members somewhere else and are homeless, NYC will help provide you with the money you need to live with them instead of a shelter:
...all are families who have ended up homeless, and all the plane tickets are courtesy of the city of New York (one-way).The Bloomberg administration, which has struggled with a seemingly intractable problem of homelessness for years, has paid for more than 550 families to leave the city since 2007, as a way of keeping them out of the expensive shelter system, which costs $36,000 a year per family. All it takes is for a relative elsewhere to agree to take the family in.
City Aids Homeless With One-Way Tickets Home
I have long seen homeless people with signs showing that they just need a few bucks to get home to Michigan/Ohio/or someplace like that. It is nice to know that the city is watching its budget with enough savvy to realize that it can save money by sending those folks home.
Some cynical people think this moves the homeless problem around, but given what it is like to live in a shelter and that they are requiring that you have a family member host you, this has got to help more people than it hurts. Other cities with serious homeless problems should try it.
My sister once told me that state of the art addiction treatment programs cost less than imprisoning criminals, so we could treat all our drug addicts for less than it costs to treat them as criminals. This is a policy in a similar spirit, better to treat the homelessness problem (the lack of a local family support network) than to find an institutional problem that doesn't address the causes (shelters).
HT: Homeless? If You Can Prove There's A Relative Who'll Take You In, NYC Will Pay Your Way
Posted by OneEyedMan at 12:03 PM | Comments (0)
Systemic consequences of exotic trading strategies
It has been said that the October 1987 stock market crash was caused in part by something called dynamic portfolio insurance, another approach based on algorithms. Dynamic portfolio insurance is a way of protecting your portfolio of shares so that if the market falls you can limit your losses to an amount you stipulate in advance. As the market falls, you sell some shares. By the time the market falls by a certain amount, you will have closed all your positions so that you can lose no more money.Hurrying Into the Next Panic? By By Paul WilmottIt’s a nice idea, and to do it properly requires some knowledge of option theory as developed by the economists Fischer Black of Goldman Sachs, Myron S. Scholes of Stanford and Robert C. Merton of Harvard. You type into some formula the current stock price, and this tells you how many shares to hold. The market falls and you type the new price into the formula, which tells you how many to sell.
By 1987, however, the problem was the sheer number of people following the strategy and the market share that they collectively controlled. If a fall in the market leads to people selling according to some formula, and if there are enough of these people following the same algorithm, then it will lead to a further fall in the market, and a further wave of selling, and so on — until the Standard & Poor’s 500 index loses over 20 percent of its value in single day: Oct. 19, Black Monday. Dynamic portfolio insurance caused the very thing it was designed to protect against.
Many people have been discussing high frequency trading (HFT) over the last few days* and Wilmott's Op-Ed on the subject is one of the many critiques. My gut analysis of this issue, knowing only what I do from readings over the last few days, is that HFT is good, but that the Flash Orders are hideous front running and should be banned as soon as possible. But Wilmott's analogy is misleading, it suggests that eliminating HFT is important because it will protect the rest of us from systemic problems. But that's not the lesson it teaches. Instead it teaches us that those playing with risky and relatively untested strategies in the stock market can end up humiliated and broke.
His argument from analogy above doesn't work for me. When lots of people bought portfolio insurance, they lost a lot of money in October of 1987, and those were realized losses because they had to sell to make use of the insurance. Those who held there stock had recovered those losses within about a year and half. That period requires blaming the full collapse in share prices on portfolio insurance, which is likely unfair given the bullish performance of the stock market earlier that year. It is more likely that program trading compressed the time over which stock prices changes occurred rather than having any influence on their long term value.
*
How big is high-frequency trading?
Judging high-frequency trading
The Matrix, but with money: the world of high-speed trading
High frequency trading as a liquidity tax
High-Frequency Traders Say Speed Works for Everyone
High-Frequency Trading Faces Challenge From Schumer
Follow up on high frequency trading
High-frequency trading
Bloomberg’s Obvious High-Frequency Trading Story
The NYSE is building a special server building to charge higher fees to those interested in high speed trading (NYSE's Fast-Trade Hub Rises Up in New Jersey). I accept that what is good for the exchange need not be good for other market participants. But if it is as some articles indicate that the HFT are half the share volume on the exchanges, maybe they are the customers the markets should be catering to. However, I'm skeptical. HFT may be the average trader on the market, but they are not the marginal ones. If markets become inhospitable to those without high frequency technology, then the HFT guys will drive those slower participants out of the market. If that simply results in a technology arms race where everyone updates to faster and bigger servers and internet pipes, that a wasteful arms race. If it results in greater market liquidity and anonymity, it could be worth it.
Posted by OneEyedMan at 7:51 AM | Comments (0)
July 29, 2009
The difference that is culture
Police raided four flat-rate brothels in Germany on Sunday and closed two of them due to poor hygiene. The brothels, a new trend, are especially controversial because they offer unlimited sex for a flat rate of between €70 and €100. That breaches the prostitutes' right to dignity, say politicians.Germany Closes Two Flat-Rate Brothels
Astonishing. If I had to guess, I would have figured the Germans as one of the 20 or so countries closest to America in values. Yet this article suggests a humongous gulf in the state's attitude toward labor and trafficking in sexual services. Prostitutes have to pay income taxes and even have to charge VAT for their services. I bet a hundred years ago there was no difference at all in German and American values on labor or sexual service sales. I'm surprised at how far they have diverged.
Posted by OneEyedMan at 1:16 PM | Comments (0)
July 28, 2009
Feedback on your writing
What should you do when you ask someone to proof-read your work and instead they try to do a complete rewrite? On the one hand, it is certainly more work, and so a pretty generous thing to do with their time and energy. On the other hand, it is presumptuous and if you care for your own style more, a waste of time and effort.
Posted by OneEyedMan at 4:15 PM | Comments (1)
Megan McArdle
The other major reason that I am against national health care is the increasing license it gives elites to wrap their claws around every aspect of everyone's life. Look at the uptick in stories on obesity in the context of health care reform. Fat people are a problem! They're killing themselves, and our budget! We must stop them! And what if people won't do it voluntarily? Because let's face it, so far, they won't. Making information, or fresh vegetables, available, hasn't worked--every intervention you can imagine on the voluntary front, and several involuntary ones, has already been tried either in supermarkets or public schools. Americans are getting fat because they're eating fattening foods, and not exercising. How far are we willing to go beyond calorie labelling on menus to get people to slim down?A Long, Long Post About My Reasons For Opposing National Health CareThese aren't just a way to save on health care; they're a way to extend and expand the cultural hegemony of wealthy white elites. No, seriously. Living a fit, active life is correlated with being healthier. But then, as an economist recently pointed out to me, so is being religious, being married, and living in a small town; how come we don't have any programs to promote these "healthy lifestyles"?
I enjoyed her basic outline of why she is against national public health care. If you are a generally free market but left of center individual, you might find it persuasive or at least reduce your belief that national health care is a good idea.
However, she makes another point that I disagree with.
It's not that I think that private companies wouldn't like to cut innovation. But in the presence of even rudimentary competition, they can't. Monopolies are not innovative, whether they are public or private.
I'm pretty sure this is unsubstantiated by evidence. Because monopolies are in a position to capture 100% of the returns to innovation in their products, they have more reason to innovate than merchants operating under perfect competition. Now to the extent that monopolies cannot grow their market share or innovation would reduce their profits, they won't use that innovation. Oligopolies are somewhere in the middle, able to reap much of the profits of innovation, but facing enough competition that they cannot ignore innovation even if it reduces total industry profits.
Posted by OneEyedMan at 1:34 PM | Comments (0)
July 27, 2009
Now I'm almost certain that it was not a coup
In I don't think this qualifies as a coup, I mentioned an Op-Ed in the WSJ that provided evidence that the firing of the president of Honduras was not a coup. Now that I have read another Op-Ed in the WSJ by the current president of Honduras, The Path Forward for Honduras, I am nearly certain that it was not a coup. If the definition of a coup is broad enough to include the peaceful change of leadership of a country when the leaders are criminals removed with due process, then we need a new term for a special kind of illegal and amoral coup.
Posted by OneEyedMan at 8:47 AM | Comments (0)
Poor electoral systems and poor fixes
The city of 200,000, a Dallas suburb, was ordered to reorganize its municipal election system to give Hispanics more voting power. Irving had been choosing its council members through citywide "at large" elections, but U.S. District Judge Jorge A. Solis ruled that the system diluted the influence of Irving's fast-growing minority population, which is concentrated in the southern half of the city.Latino Activists Seize on Texas Ruling to Boost Voting PowerHe didn't impose a specific remedy but said any new system -- perhaps electing council members by district -- must allow "Hispanics to elect candidates of their own choosing."
With at-large systems, all voters can vote for all seats up for election (i.e. when electing five representatives, voters can vote for five candidates). Depending on the system, all candidates may run against one another, with the highest vote getters winning election, or candidates may run for individual, designated seats. ... At-large systems allow 50 percent of voters to control 100 percent of seats, and in consequence typically result in racially and politically homogenous elected bodies.At-large Election Systems
At large election systems make for poor democracy. The major purpose of electoral systems is to serve as an information gathering mechanism to aggregate voter preferences. If a simple majority chooses every Representative then minority opinion holders won't have anyone speaking for their views when it comes time to make decisions. Their absence may foreclose simple solutions that would make the minorities much better off at little cost to the majority.
That said, I see little need that Hispanics specifically should elect candidates of their own choosing. If 40% of a town is Hispanic and 40% are pro-gun-control, I see both minorities as equally entitled to representation in elected bodies.
Posted by OneEyedMan at 7:35 AM | Comments (0)
July 25, 2009
Varying sexual norms
Florentino, Chávez’s stand-in, appeared in a series of posters, a masculine rider on a tall horse, lance in hand, threatening a squeamish, stereotypically gay devil—an escuálido. Florentino’s lance points to the devil’s bottom in a gesture of penetration that Chávez has himself enacted verbally. On La Hojilla sodomy was Chávez’s metaphor for dominating the opposition—vamos a jugar el juego del rojo . . . . tu te agachas y yo te cojo; a non-rhyming translation is “let’s play the game of red . . . . ‚ you bend down and I fuck you.” The game does not jeopardize Chávez’s gender identity; in much of Latin America the male sodomizer is not regarded as a homosexual.United By Hate -- The uses of anti-Semitism in Chávez’s Venezuela I wonder how this norm got established.
Posted by OneEyedMan at 10:02 AM | Comments (0)
Yeah, he would say that
In the 17 months since the LZR Racer hit the market and spawned a host of imitators, more than 130 world records have fallen, including seven (in eight events) by Michael Phelps during the Beijing Olympics.Swimming Bans High-Tech Suits, Ending an EraPhelps, a 14-time Olympic gold medalist, applauded FINA’s proposal that racing suits be made of permeable materials and that there be limits to how much of a swimmer’s body could be covered. The motion must be approved by the FINA Bureau when it convenes Tuesday.
Maybe he really does think this will be a good idea, but he could think this is a terrible idea and still publicly support it. This rule is an anti-competitive measure, it means that his records will last a long time, maybe forever.
Posted by OneEyedMan at 1:29 AM | Comments (0)
July 23, 2009
Something ain't right in currant pricing
Mr. Quinn sells his own currants to restaurants and ice cream companies, including Van Leeuwen Artisan Ice Cream in Brooklyn, and he sells bags of frozen red and black currants by mail year-round from his Web site, currants.com. Five-pound bags are $15, and home winemakers can buy 50-pound bags for $275.A Tart Berry Reintroduces Itself So let me get this straight, in 5 pound bags the currents are $3 a pound, but if I am willing to buy them in bulk 50 pound bags, they are $5.5 a pound. I wonder if this is the real price or a error in the NY Times.
Posted by OneEyedMan at 1:28 PM | Comments (0)
Farming in a future California with less water
Drip irrigation, or micro-irrigation, is the most efficient way to get the maximum crop yield from a unit of water, the report says; flood irrigation — still the most common form -– is the least efficient; sprinkler systems are somewhere in between.Hot, Dry, Thriving? A Farm Plan for CaliforniaFor instance, the researchers suggest devoting less land to rice, cotton, alfalfa and other field crops, which now get 80 percent of their water from flooding. They recommend giving more to vegetables, vineyards and orchards, crops for which micro-irrigation is more common.
To promote such a shift, the researchers suggest that the capital cost of sprinkler or drip irrigation systems be defrayed by federal subsidies and property tax breaks from state and county governments. They also suggest creating legal mechanisms to let natural competitors for water allocations -– municipal water districts, say, or environmental organizations –- invest in the efficient irrigation systems in return for some of the water saved.
Or you could just make sure that the property rights on water are clear and that all users are charged a market price for the quantity they use. Then you could let people do whatever is economical.
Posted by OneEyedMan at 6:14 AM | Comments (0)
July 22, 2009
Why aren't green roofs more common?
Ever since I learned about green roofs, those amazing soil and plant colored roofs that reduce water runoff, cut energy bills and increased air quality, I wondered why they weren't more common. The NY Times explains why, cost:
But the high upfront costs of green roofs have put some people off from the installation. In particular, the soil for the plants, which is engineered to be lightweight and absorbent, is extremely expensive. While a cubic foot of normal soil might be $2 or $3, the cost of the engineered soil and its installation is about $120 per square foot, said Elizabeth Kennedy, the landscape architect who designed the postal roof’s landscaping.Postal Service Unveils Large ‘Green’ Roof
If we dig deep I imagine we'll find that the savings in reduced energy usage doesn't justify the installation costs on a net present value basis. If the savings from reducing the urban heat island effect, and waste water control were internalized, it is possible that they would be more economical to install.
I've covered green roofs once before in: What's the goal of this policy
Posted by OneEyedMan at 3:54 PM | Comments (0)
Senate narrowly avoids increasing our freedom to carry guns
The Senate on Wednesday turned aside the latest attempt by gun advocates to expand the rights of gun owners, narrowly voting down a provision that would have allowed gun owners with valid permits from one state to carry concealed weapons in other states. A group comprising mostly Republicans, along with some influential Democrats, had tried to attach the gun amendment to the annual defense authorization bill, a must-pass piece of legislation. But the provision got only 58 votes, two short of the 60 votes needed for passage under Senate rules.Measure to Expand Gun Rights Falls Short in Senate
I'm simply astonished how close this came to passing. That 58 senators would expand the right to carry a concealed weapon to anyone approved by any state is amazing. However, 39 states have a shall issue permit system (issuing officials may not arbitrarily deny a concealed-carry application), and if all the senators from those states had voted for the bill it would have passed. Why are gun rights good enough for law abiding residents but not law abiding visitors? Maybe I should be surprised if it failed.
Also, does anyone else see a sort of odd parallel to the defense of marriage act in this defeat?
Posted by OneEyedMan at 3:45 PM | Comments (0)
Seems like a good rule
H.R. 1503 would "require the principal campaign committee of a candidate for election to the office of president to include with the committee's statement of organization a copy of the candidate's birth certificate, together with such other documentation as may be necessary to establish that the candidate meets the qualifications for eligibility to the Office of President under the Constitution."Eligibility bill hits Congress Almost certainly this is motivated by nonsense-charges that Obama is foreign born. Nevertheless, this an eminently reasonable request of people seeking to be president of the United States. It is easy to imagine a near future where a popular presidential candidate emerges from a south-western state with illegal (nor simply non-citizen) immigrant parents and an ambiguous birth citizenship. Once elected it could cause a political crisis to remove such a person from office. Far better to head the problem off before the person has wrapped themselves with the power of the office of the president.
Hat Tip: ‘Birther’ Boom
Posted by OneEyedMan at 3:35 PM | Comments (0)
July 20, 2009
Construction permit bonds
I learn in today's WSJ (The Oldest Established Permanent Temporary Sheds of New York*) that builders sometimes leave their construction sheds (the scaffolding that protects those below from falling debris) in place when they go bankrupt during construction busts. This should be a simple thing to prevent. When you get your permits you have to put up a bond that covers the cost of taking them down. When you show you've taken them down you get the bond back. Otherwise the state takes the money and tears it down itself if they when the construction permits expire. Until then, the money is put into a FDIC insured asset or treasury bonds and the permit holder gets all interest net of inflation. The proposal would be administered by a independent body to prevent the city from using the money for unrelated purposes.
I began thinking about an idea like this when I read in the times about the bulldozing of america’s shrinking cities, where cities with falling populations are often beset with abandoned houses that attract all sorts of problems and so the cities work to tear down these abandoned houses. It shouldn't be hard to put together a financial product that provides cash to shrinking cities to tear down abandoned homes. Given that most cities have increasing populations because the human population has continued to expand, it isn't a significant problem that most cities will ever face. Most houses will either be repaired or torn down and replaced for as long as humanity sticks around. Tearing down a house costs about $8,000 a house. The cost of bulldozing a house 50 years after it is built would add between one and two thousand dollars to the cost of a house even if all houses were to be demolished with certainty, which it would not. We know that housing demolition is generally a counter cyclical phenomena, so construction resources are available and modestly priced. There are about 50 cities demolition on this sort of scale is being discussed and only a small fraction of the homes would be demolished even if they were free. There are something on the order of 500 cities in the USA (100k population or more). So at the very most it seems on the order of 5% of houses will eventually be abandoned and require the government to demolish them. So for about 50 bucks added to the price of a new home (and a one time levy on all existing homes) we could ensure that this isn't a problem ever again. Again, the independent body similar to the one discussed above would create standards to declare the house abandoned and keep the funds in safe reserve from tempting politicians who might use it to meet unrelated expenses.
*-I wonder if that title is a reference to The Oldest Established (Permanent Floating Crap Game In New York), a song from Guys and Dolls.
Posted by OneEyedMan at 5:27 PM | Comments (0)
Beautiful writing of the day
Wonder I regarded as my own property, the way authority was his.Alec Wilkinson: Over the Moon
Posted by OneEyedMan at 1:55 PM | Comments (0)
Where do counterfit drugs come from?
South-East Asia mostly.
Dallas C. Mildenhall, another scientist in the anti-counterfeit network, helps track fake drugs by analyzing the microscopic pollen grains embedded in the pills or packaging. Forensic investigators have used pollen grains for decades to help solve murders and other crimes, but Dr. Mildenhall pioneered using the tiny grains, which are ubiquitous in clothing, nostrils, hair, food and nearly everything exposed to air, to help combat counterfeiters.Using Scientific Tools in an International War on Fake DrugsBecause many plants are specific to certain parts of the world, pollen helps determine where the drugs were manufactured. “Pollen markers give you an idea of the environment,” Dr. Mildenhall said by telephone from his office in New Zealand, where he is a researcher at GNS Science, a government organization. “Is it wet, dry, hot, cold? Are the soils acidic or not?”
Dr. Mildenhall’s work has helped establish that many counterfeits come from the border area between China and Vietnam as well as the general vicinity of the Golden Triangle, the area famous for heroin production where the borders of Laos, Myanmar and Thailand meet.
Making and selling fake drugs is an evil way to make a living. It is no less than murder. It deserves the same punishment if done deliberately. This turns out to be important theme of the movie The Third Man, and the character that does it seems like a cold hearted killer.
Posted by OneEyedMan at 1:43 PM | Comments (0)
Walking on the moon
It seems everyone but me is misty eyed about the 40th anniversary on the moon. The American pursuit of manned space travel is has been a colossal waste of men and treasure. As neat as it is to see dashing men land on the moon, almost all the scientific value of the entire manned space program could have been archived with an unmanned space program for something like 10% of the price. It distracts thousands of talented people who could otherwise be designing less expensive automated space projects. In the process, 17 people have died.
The strongest argument for the manned space program is that it produces information on getting men into space. Even so, if the goal is to maximize what we learn about bringing men safely and cheaply into space, would our space program look anything like the one we have today? There is no innovation in price and little innovation in safety in the manned space program. If we could have the entire scientific output of experiments from the manned space program that do not relate to humans in space or we could have the output of the Hubble telescope, I doubt it would be a close comparison. Hubble would win by landslide.
Wait you say, the Hubble was broken and had to be fixed. By the time Hubble is retired in 2010, NASA and U.S. taxpayers will have invested $6 billion in the observatory. In contrast, Each shuttle launch costs around $1.3bn and for the next trip to the moon the cost of Constellation's Orion capsule, a more advanced and spacious version of the Apollo lunar module, and the Ares 1 and Ares V launchers needed to put it in orbit are 150 billion and 44 billion respectively. So if we messed up the first Hubble we could have sent up another one or invented a remote robotic repair ream rather than fix it for a lot less than maintaining an manned space program to repair it.
If we were serious about NASA as a scientific tool rather than a marketing one, our budget would look more like that of the ESA which spends only one eighth of its budget on manned space projects. Of course they free ride on our shuttle. Perhaps landing on the moon is so amazing that we should do it even if it has no scientific value. But then we should design it to go there cheaply and safely and not treat it as a substitute for real scientific work. When we think about putting men on the moon or mars, we should be framing that as winning gold metals in the Olympics, not being the first to decode the genome. The current setup of putting both the space propaganda and the space science under the same agency ensures that the ferociously compete for limited funds and staff.
Posted by OneEyedMan at 6:55 AM | Comments (0)
July 19, 2009
Is the death of the young more tragic than that of the old?
The death of a teenager is a greater tragedy than the death of an 85-year-old, and this should be reflected in our priorities. We can accommodate that difference by calculating the number of life-years saved, rather than simply the number of lives saved.Why We Must Ration Health Care
Our genes make us find tragedy in deaths where people are closer to their peak productivity. The deaths of 17 year old woman are more tragic than a 47 year old or 7 year old female. This instinct looks somewhat similar to the number of life years saved measure. However, the measure of life-years saved overvalues very young people. Which may make sense. Society has an enormous amount invested in those in their teens to late twenties and has received very little return on that investment. It is far from clear to me that just maximizing the number of years that people can live as a result of dollars of treatment makes sense. Maybe we need fertility or productivity enhanced life years.
What you scream, that's not just! But if a surgeon can work for another 10 years and does a million dollars worth of irreplaceable surgery in each of those years, and faces a 50% tax rate, then treating him better than others may easily be compatible with taking the best care of the least fortunate in our society. He's contributing on the order of five million in taxes and the sick get their surgery.
This measure if taken literally discriminated against men and probably against minorities who live shorter lives. Singer has probably addressed this elsewhere but I didn't see it in the article. That's going to persist even if you switch to quality adjusted life years as your measure. Switching to fertility or economic productivity adjusted years would put the decriminalization in favor of the high earning and double marriage having white men. I don't see a measure that doesn't capture an unfairness for one group or another.
Health care does more than save lives: it also reduces pain and suffering. How can we compare saving a person’s life with, say, making it possible for someone who was confined to bed to return to an active life? We can elicit people’s values on that too. One common method is to describe medical conditions to people — let’s say being a quadriplegic — and tell them that they can choose between 10 years in that condition or some smaller number of years without it. If most would prefer, say, 10 years as a quadriplegic to 4 years of nondisabled life, but would choose 6 years of nondisabled life over 10 with quadriplegia, but have difficulty deciding between 5 years of nondisabled life or 10 years with quadriplegia, then they are, in effect, assessing life with quadriplegia as half as good as nondisabled life. (These are hypothetical figures, chosen to keep the math simple, and not based on any actual surveys.) If that judgment represents a rough average across the population, we might conclude that restoring to nondisabled life two people who would otherwise be quadriplegics is equivalent in value to saving the life of one person, provided the life expectancies of all involved are similar.This is not a sound way of evoking quality adjusted life year valuations. You cannot ask the non-disabled to rate how they would rate their lives while disabled while making public policy. They have no idea what it is like to live with a disability and may well not know anyone who does. They also may not be seriously thinking about the alternative of a painful death. The disabled rate their lives much higher than we might be inclined to. For example, [c]hildren with cerebral palsy rate their quality of life similar to that of children in the general population..
Posted by OneEyedMan at 9:32 AM | Comments (0)
I have no idea how Atkins works
Giblfiz points out that he once saw an Atkins dieter eat 2 pounds of bacon, and so digestion issues cannot explain the weight loss. I'm not by any means an expert, but I once heard someone say that the Atkins diet worked by killing your desire to eat. Not through any fancy bio-feedback method but simply because only being able to eat from two isles of the supermarket made your food boring and therefore limited how much you ate.
The prodigious protein portions of Atkins dieters are notorious, but we don't see all the sugar soda they aren't drinking, the candy bars they skip, the white bread with brie that the have with wine and so on.
Bacon loses 71% of weight when cooked (http://www.unu.edu/Unupress/unupbooks/80772e/80772E05.htm) That's 907 grams raw into 263 grams cooked at 200 calories per 34 grams (http://www.wisegeek.com/what-does-200-calories-look-like.htm), that makes for 1,547 calories.
That sounds like a lot. Except, a Big Mac value meal has 1170 calories (http://www.associatedcontent.com/article/68145/trade_in_your_big_mac_value_meal.html?cat=51) and the salmon at the Cheescake factory is more than 1600 calories. Bacon is pretty chewy compared with a Big Mac or restaurant salmon, so it could cut back somewhat on the calorie bill. Since you skip the sugar soda, the snacks, and dessert on Atkins, maybe this isn't as gluttonous as it sounds.
Posted by OneEyedMan at 9:27 AM | Comments (1)
July 18, 2009
It is amazing how norms change
DESCENT INTO CHESS— “A pernicious excitement to learn and play chess has spread all over the country, and numerous clubs for practicing this game have been formed in cities and villages. Why should we regret this? It may be asked. We answer, chess is a mere amusement of a very inferior character, which robs the mind of valuable time that might be devoted to nobler acquirements, while it affords no benefit whatever to the body. Chess has acquired a high reputation as being a means to discipline the mind, but persons engaged in sedentary occupations should never practice this cheerless game; they require out-door exercises—not this sort of mental gladiatorship.”100 Years Ago: Baseball's First Night Games
Posted by OneEyedMan at 9:14 PM | Comments (0)
July 17, 2009
Forget going back to the future
Check out creators.rockband.com, a website devoted to getting musicians to make music with real instruments to sell though internet connected video consoles, so that the rest of us can recreate their music using fake instruments that are really controllers connected to those same consoles. I hope cheap and high quality haptics stuff isn't too far off.
I'm with Tycho, this means we are ...all of us, now - living in the Goddamned future.
Posted by OneEyedMan at 3:56 PM | Comments (0)
The costs of digestion
New Scientist has a fascinating article on the energy in food from digestion rather than the energy from incineration which is what is on food labels: The calorie delusion: Why food labels are wrong.
It taught me two cool facts and reminded me of one on the difference between the calories in food and the calories we get out of food:
And digestion - from chewing food to moving it through the gut and chemically breaking it down along the way - takes a different amount of energy for different foods. According to Geoffrey Livesey, an independent nutritionist based in Norfolk, UK, this can lower the number of calories your body extracts from a meal by anywhere between 5 and 25 per cent depending on the food eaten
...
Dietary fibre is one example. As well as being more resistant to mechanical and chemical digestion than other forms of carbohydrate, dietary fibre provides energy for gut microbes, and they take their cut before we get our share. Livesey has calculated that all these factors reduce the energy derived from dietary fibre by 25 per cent - down from the current estimate of 2 kcal per gram to 1.5 kcal per gram (The American Journal of Clinical Nutrition, vol 51, p 617).Similarly, the number of calories attributed to protein should be reduced from 4 kcal per gram to 3.2 kcal per gram, a 20 per cent decrease, Livesey says. That's because it takes energy to convert ammonia to urea when protein is broken down into its constituent amino acids (British Journal of Nutrition, vol 85, p 271).
...
n a study published in 2003, for example, a team led by Kyoko Oka at Kyushu University in Fukuoka, Japan, investigated the effect of food texture on weight gain. They fed one group of rats their usual hard food pellets, while a second group received a softer version. Both pellets had exactly the same calorie content and flavour. The only difference was that softer ones were easier to chew. After 22 weeks, the rats on the soft food diet were obese and had more abdominal fat. "Food texture might be as important a factor for preventing obesity as taste or food nutrients," Oka and his colleagues concluded (Journal of Dental Research, vol 82, p 491).
Which suggests an alternative explanation for a couple of different weight loss methods. Instead of the ketosis hypothesis, perhaps the Atkins diet makes followers loose weight by replacing 4 calorie a gram carbohydrates with 3.2 calorie a gram protein and increasing the average toughness of the food you eat.
It also suggests that traditional healthy diets high in fiber and lean protein work not so much by preventing hunger by improving blood chemistry, but instead by giving us lower energy foods that are also harder to digest.
Posted by OneEyedMan at 11:17 AM | Comments (1)
That's neat
Successful predictions about the moon date back at least to Jules Verne and his 1865 novel From the Earth to the Moon. Here Verne correctly anticipated that the United States would be the country to launch the first lunar mission, and also pinpointed that Florida would make the best launch site. He guessed the right crew size -- three astronauts -- and also came very close to the truth in his descriptions of the dimensions of the space capsule and the duration of the voyage to the moon. Few science fiction works have been more prescient in their anticipation of later history.Curse You, Neil Armstrong
I don't really care if this is an example of brilliant anticipation or just if you write enough science fiction you are bound to right about something.
Posted by OneEyedMan at 10:28 AM | Comments (0)
Rights in conflict
I know many pro-choice people who believe that a pregnant woman has an unlimited moral right to abort a fetus up until the very moment before it is delivered. My understanding is that with the exception of using the partial birth abortion technique, this is also the law in the United States. Therefore, I was surprised to hear about a court case where a woman refused to consent to a Cesarean section and once the baby was successfully delivered naturally this refusal was used as evidence of child neglect and the child taken out of the woman's care. Refusal to Consent to Cesarean Section as Neglect of the Child?.
If a fetus has no rights, how can a harm done to (or behavior with the potential for harming) it while a fetus have any bearing on the placement of a child, a person for whom there are real legal obligations? Maybe that is a comment on how ridiculous it is to treat a fetus about to be born as anything other than a baby. I just don't see how anyone could hold that there is both an absolute right to an abortion and that this is child abuse.
Posted by OneEyedMan at 8:49 AM | Comments (0)
July 16, 2009
When we say a bank is too big to fail, do we really mean it is too big?
Felix Salmon (Bair wants a bank-size tax) discusses the growing momentum to tax large banks on the basis of their size. This might be a decent way to control everyone's behavior. We can't stop them from taking too much risk, nor ourselves from bailing them out when they blow up, so this at least ensures that the public would be somewhat compensated for it. If this happens, I would like to see the proceeds held in TIPS (the inflation protected treasury bonds) and held by the FDIC in a special systemic bailout fund.* The money would be released when a committee of five people unanimously voted in favor of releasing the money. I'd structure that committee like the FCC:
...five Commissioners appointed by the President and confirmed by the Senate for 5-year terms, except when filling an unexpired term. The President designates one of the Commissioners to serve as Chairperson. Only three Commissioners may be members of the same political party. None of them can have a financial interest in any Commission-related business.About the FCC
Perhaps we should make the chairman of the Federal reserve the chairman of this committee as well.
What should be the size at which systemic risk becomes important? Perhaps anti-trust offer a lesson here. One standard could be that if we wouldn't let the firm get much bigger through mergers then we shouldn't let them fail either and they should be subject to the size tax. However, a merger happens with certainty while a default with systemic consequences happens rarely, so me may well be willing to tolerate greater concentration after default then after a merger.
However, this is a rather crude tool. Big really doesn't mean too big to fail, and small doesn't mean it isn't too big to fail. Size is a highly imperfect metric of systemic importance. For example, if we awoke tomorrow to learn that Visa had gone bankrupt, we'd have lost a massive market participant with 44% of the credit card market. We'd all believe that the market could pick up the slack. Master Card, Discover, and American Express could all step into the void. Visa itself would be likely to emerge from bankruptcy in an orderly way.
Now imagine that The Depository Trust & Clearing Corporation (DTCC) went bankrupt. They have just about 700 million in revenue to Visa's 6.26 billion or AIG's 100 billion. Yet if the DTCC stopped working then the stock market would shut down because no one could settle any trades. New settlement systems would be needed in many debt products, ADRs, ETS, and investment trusts. The American financial markets would grind to a halt until these substitutes were found. It would be calamitous.
If we were really taxing systemic importance then the DTCC deserves a hefty tax while Visa should escape lightly.
Similarly, diversification of the financial system is important. If the financial system consisted of 10 firms each holding identical portfolios of assets and liabilities , then when one firm fails they all will do so. Splitting the economy up into 100 small firms with the identical holdings would still mean that when one goes belly up they all would. To have size reductions create bite, we need to encourage heterogeneity among financial service firms across customers, assets, liabilities, lending standards, geography, and products and services.
It is also worth noting that too small is bad as well. Small firms are more likely to fail because of idiosyncratic factors rather than because they have bad business models. Canada had only ten large banks during the 1930s in a period when 9,000 banks failed in the USA because American banks were much more vulnerable to local economic conditions. Of course bankruptcy plays an important role in capital allocation but the process consumes time and resources. If larger firms are more diversified then this helps prevent systemic risk. Combine this with the greater economies of scale of larger firms and the general case for smaller financial services firms is weakened.
Is there a cleaner way to deal with systemic risk than to just tax size? In the credit default swap space, I advocate eliminating systemic risk by trading them on an exchange and requiring fully collateralized positions. A fixed fraction the fees charged by the exchange would go to purchasing protection against default by these companies. Then if the firms defaulted money would rush into the exchange and ensure that there was enough money to pay off those buying protection. I'd rather see other systemic risks addressed this way, where there is an objective link between the size of the risk posed and the fee charged for that service.
In Rethinking Capital Regulation, Drs. Kashyap, Rajan, and Stein explore contingent capital as another way of dealing with systemic risk. Contingent capital is special bonds issued by the firm that inject capital into the firm when certain systemic problems occur. This doesn't solve the pricing of the systemic risk of a given firm but at least allows the pricing of the aggregate systemic risk of the industry. This is imperfect too, but at least has the benefit of being a partially market based system that tries to put a market price on risk.
Size remains a muddy measure of systemic risk. It may be better than nothing, but as Ms. McArdle says, the "mediocre can also be the enemy of the good". I'd rather us not settle on size as the measure of systemic importance without a greater effort to find solutions that tie the systemic risk tax to the cost of the risk the firm imposes.
*- One would think that the government could purchase credit default swaps in the name of the too big to fail entities. Then they would have an asset that appreciated exactly when the too big to fail entities were going to fail. However, knowing that they were too big to fail, the CDS markets would be all messed up and the pricing mechanism could easily not work properly. Another possibility is investing the tax proceeds in rolling catastrophe bonds. The tax revenues would pay a premium for the coming year (or 3 or 5 or whatever) on a series of bonds. In the event that the the committee votes to inject the capital into the firms the bonds would surrender their principal and all future interest. If this didn't happen in the term then investors get their principal back. The proceeds of the bond sales could either be used for general revenue purposes or better yet be put into TIPS. Why TIPS here and above? Because as Dr. Hamilton says, "...TIPS represent an asset that would gain in value at a time the Fed needs to sell them, meaning that the logistical ability of the Fed to drain reserves quickly in such circumstances is without question."
Posted by OneEyedMan at 12:50 PM | Comments (0)
While on the subject of rights for higher animals
The other day I argued for special treatment for the more intelligent members of the animal kingdom (Are we 98% chimpanzee? Does it Matter?). Those ideas were firmly in mind when I read Watching Whales Watching Us in the NY Times magazine last weekend. I've rarely read a non-fiction essay this good. If I can convince you to read one thing this month I hope you will read this piece. I dare not excerpt it because the stories within work so well in context. It begins with a heartbreaking summary of our appalling cruelty to the social and intelligent whales and ends with a hopeful tale of all that we've learned about them, attempts by both species to communicate, and some reasons for hope in the future.
Again, of course I would kill a whale if it meant the alternative was my family starving. But I'd feel similarly (though more strongly) about eating you if my family's survival depended on it. If the world had a just immigration policy then that wouldn't even be an issue. No one need starve nor eat whales in a world where honest folks are permitted to earn a living in a country of their choosing.
Posted by OneEyedMan at 11:31 AM | Comments (0)
Disliking the "# people liked this" feature
This morning I awake to a new and horrible feature on Google Reader, the ability to indicate that you "like" an article, which is then aggregated into the news feed and shown in the post between the post title and the post body.
I dislike this for two reasons. First, knowing how many other people (mostly total strangers!) like an article I am reading colors the way that I read the article needlessly. I prefer to form my own opinions on what I read without being gently and unconsciously persuaded by the preferences of others. Second, the UI choices put a piece of information I care about smack down into the middle of the information I do care about. It means more scrolling to read the old information and and less information dense interface.
I went looking on the internet for tips on how to disable this feature without luck.
The best thing I found was a group of people with similar preferences griping about how annoying it was over at Google Reader help (How do I remove "people liked this" messages?).
If you find it annoying as well then I hope you'll complain there.
Posted by OneEyedMan at 7:19 AM | Comments (0)
July 15, 2009
Making use of hatered
We have discussed on at least two occasions (A dark and fascinating* gedankexperiment & Don't count on it ) on this blog that hatred is an evolved, adaptive tool for controlling our actions and those of our friends, family, and tribesmen.
As Satoshi Kanazawa has pointed out, hatred is in decline in the West.
It seems to me that there is one resource that our enemies have in abundance but we don’t: hate. We don’t hate our enemies nearly as much as they hate us. They are consumed in pure and intense hatred of us, while we appear to have PC’ed hatred out of our lexicon and emotional repertoire. We are not even allowed to call our enemies for who they are, and must instead use euphemisms like “terrorists.” (As I explain elsewhere, we are not really fighting terrorists.) We may be losing this war because our enemies have a full range of human emotions while we don’t.This has never been the case in our previous wars. We have always hated our enemies purely and intensely. They were “Japs,” they were “Krauts,” they were “Gooks.” And we didn’t think twice about dropping bombs on them, to kill them and their wives and children. (As many commentators have pointed out, the distinction between combatants and civilians does not make sense in World War III, and the Geneva Convention -- an agreement among nations -- is no longer applicable, because our enemies are not nation states.) Hatred of enemies has always been a proximate emotional motive for war throughout human evolutionary history. Until now.
And that is why we see strange articles like Isn’t It Outrageous? by cartoonist Tim Kreider. In this article he lays out the joy he experienced when feeling hatred and the shame he felt afterwards.
A couple of years ago, while meditating, I learned something kind of embarrassing: anger feels good. Although we may consciously experience it as upsetting, somatically it feels a lot like the first rush of an opiate — a tingling warmth on the insides of your elbows and wrists, in the back of your knees. Realizing that anger was a physical pleasure explained some of the perverse obstinancy with which my mind kept returning to it despite the fact that, intellectually, I knew it was pointless self-torture.
...
Outrage is like a lot of other things that feel good but over time devour us from the inside out. And it’s even more insidious than most vices because we don’t even consciously acknowledge that it’s a pleasure.
...
Afterward I was ashamed of my reaction [to draw any cartoons about fundamentalist Islam], not because I’d offended anyone’s religious sensibilities or been roused to xenophobic outrage or made a tool of the Imperialist propaganda machine, but simply because it had worked on me; I’d been taken in.
...
My reasons for despising the Bush administration were sane and moral and patriotic. Outrage is healthy to the extent that it causes us to act against injustice. But in my passionate loathing for the Taliban or the Republican party, I’m really not much different from the kinds of housewives who write hate mail to the Machiavellian villainess of their favorite soap opera.
He is wrong, passionate loathing can be both purposeful and useful. Being very angry with your government when the people running it behave like criminals is both purposeful and useful. That is very different from writing angry letters to pretend people. Mr. Kreider holds hatred to a standard that he doesn't hold any of his other emotions to.
He is not ashamed to feel sadness though he shares that emotion with the mothers of deceased Taliban warriors. He isn't ashamed of mirth even though others laugh at racist and sexist jokes. He isn't ashamed of being aroused, though some are aroused at corpses and children.
Villainizing hatred, outrage, or similar emotions is foolish. Once may criticize the purpose of a particular emotional expression, but not the emotion in its entirety. Hatred is simply a feelings, a bit of software running on our nervous and endocrine systems. Like all feelings it is good when it allows us to marshal our resources to peruse our objectives. It is likewise bad when it obstructs us from our true aims.
As modern inhabitants of the west, we often find traditional religious values concerning lust to be unfathomable. How could someone willing subvert their sexual interests the way priests and monks are expected to do by their faith? Nevertheless, we happily and naively accept the expulsion of anger and rage from our emotional repertoire. Why would we do that?
Posted by OneEyedMan at 4:37 PM | Comments (0)
July 9, 2009
Sleep posture
So which is the best position to sleep in? On your side, knees bent, pillow between the knees and your head resting on a single pillow. Or if you prefer, on your back with a pillow under your knees, sheets loose, and again, a single pillow for the head.Pain and Posture: The Basics
As if we didn't have enough to worry about. I'd be interested in if this works as an intervention. If you can only easily sleep on your stomach and you force yourself to sleep another way, does your back physiology and additional sleep ailments conspire to deprive you of the benefits of sleeping in a more ergonomic position.
Hat tip to Life Hacker: Improve Your Sleep Posture
Posted by OneEyedMan at 2:40 PM | Comments (0)
July 8, 2009
Has there ever been a day where this COULDN'T have been the headline?
From today's NY Times: Wall Street Ends the Day Mixed
I suspect that on every day in at least the last hundred years whenever the market has been open at least one stock closed up and one closed down.
Posted by OneEyedMan at 5:11 PM | Comments (0)
Song Lyrics
Ever listen to a song a hundred times and suddenly figure out what it is about?
From Steve Earle's Copperhead Road Lyrics from the last stanza I just realized that the song is about his decision that there is more money in growing cannabis than moonshine:
I volunteered for the Army on my birthday
They draft the white trash first,'round here anyway
I done two tours of duty in Vietnam
And I came home with a brand new plan
I take the seed from Colombia and Mexico
I plant it up the holler down Copperhead Road
Well the D.E.A.'s got a chopper in the air
I wake up screaming like I'm back over there
I learned a thing or two from ol' Charlie don't you know
You better stay away from Copperhead Road
It is a great song if you've never heard it.
Posted by OneEyedMan at 4:01 PM | Comments (0)
How does one get a domain name that is expiring?
There is a domain name that I've been interested in for a few years that I'd like to won. Unfortunately, it is owned by someone else. Happily, their registration expired yesterday, so I thought that I'd be able to register it today. How naive I was. It it seems that getting an expiring domain is actually a complicated and sometimes expensive process. The short of it is that if you have a domain expiring today, it is usually 75 days later that it enters the registration pool between 11 and 2 pm Pacific time. If you are interested in learning more about the process or the various services that help you snag one of these domains when they come up for re-registration, I enjoyed the article How to Snatch an Expiring Domain by Mike Industries.
Posted by OneEyedMan at 8:02 AM | Comments (0)
July 7, 2009
More from the majesty of creation
I present to you the Prince Rupert's Drop. Made by heating glass until it melts and dribbling a glob of it into cold water. It looks a bit like a comet, with a bulbous front and slender tail. The head is enormously strong, the trail heartbreaking fragile and Achilles heel to the object. See it in action:
The better demo (watch first)
The better explanation:
Thanks to As Unbreakable as ... Glass? at the NY Times for the tip.
Posted by OneEyedMan at 3:44 PM | Comments (0)
A long road trip
In college I had a few friends that drove pretty much non-stop over spring break to visit what they called the biggest Jeep Cherokee in the world (if I recall correctly) but I cannot find it on the internet. After stopping at it in Texas or Arizona or someplace similar they decided on a whim to drive to the Pacific Ocean, dip their feet in and drive all the way home.
When it comes to long distance driving, I have almost no experience, my longest driving stint is the four hour one from Sequoia & Kings Canyon National Parks. But I was discussing the idea of the driving almost non-stop (stopping for bathrooms, stretches, and groceries but not sleep. This permits one to chew up an enormous amount of highway. Google maps indicates I could drive to my familial home on the other coast in less than two full days of driving. That means that with breaks you can get pretty much anywhere you'd care to in two days. But how should one allocate the driving to make it as bearable as possible?
I wanted a simple plan where all drivers got to sleep 8 hours in a row, no one drove more than four hours in a row nor sleep at odd hours. This is a first pass as to what I came up with
. Any thoughts?
Posted by OneEyedMan at 1:27 PM | Comments (1)
What to do with your California IOUs
California is out of money. State leaders need to raise taxes or lower spending so that incoming revenues for the rest of the year are less than outlays. What they have done instead is issue IOUs that pay 3.75% interest. Unfortunately, Big Banks Don't Want California's IOUs, although it seems that many smaller banks will take them. The IOUs act like municipal bonds lasting until October (The state set a redemption date of Oct. 2 for the IOUs, although it said it might redeem them before then if it has the cash.) and paying 3.75% interest. In contrast, the Fidelity California Short-Intermediate Tax-Free Bond Fund (FCSTX) is yielding 2.53%. Assuming they have similar probabilities of being paid out and share tax-exemption with other municipal bonds (Seeking alpha says they are short-term tax-free bills) This is actually a pretty attractive deal in comparison. Converting it to a taxable yield of 6.43% when other short term California debt is trading at a 4.34% equivalent yield. Using those numbers on the Smart Money Bond Calculator suggests that the IOUs should trade at 100.51% of par.
Of course, California may default on their debt (though they cannot actually declare bankruptcy) and Fitch has already downgraded the state's debt to BBB. Roy Kaye LA says in California IOU Online Market: Cashing in on Fear that there is already a speculative market for the IOUs forming on Craig's list. Given the interest rate premium discussed above, perhaps it is a surprise that offers for the bonds are trading at a discount. That may just reflect a liquidity premium. Unlike an ordinary municipal bond you cannot simply buy and sell these using your broker. Taking cash from strangers on Craig's list is riskier and slower. They might also repay the IOUs early, making it difficult for investors to make their money back.
I see two clear ways that California could improve the IOU process to make them more widely excepted. They both stem from the lesson that uncertainty of value is a bad feature of a currency. The first is to make it clear that repaying the bonds early will be optional. Anyone who wants to hold the bonds until October 2nd and collect the full accrued interest will be able to do so. That will allow investors to more clearly understand what they are buying from the state. Second, the banks should make it clear that now and forever, people can repay their California tax debts (of all kinds) with the IOUs. As Dror Goldberg laid out in Famous Myths of “Fiat Money”, there never has been a pure fiat money, and a major way that countries empower their "fiat" currencies is by making them redeemable for tax obligations. Making it clear that California will accept these obligations will clear the way for everyone who expects to pay taxes to accept the IOUs.
Posted by OneEyedMan at 8:03 AM | Comments (0)
July 6, 2009
A link for Monday
In Defense of Palin and Sanford by Stanley Fish is by far the best thing I've read about recent behavior of these two Republican governors.
Posted by OneEyedMan at 5:00 PM | Comments (0)
Does personal liberty cause development?
In Fourth of July Edition, Aid Watch says:
“Created equal” is a principle yet to be accepted in most of the world, which perhaps has a lot to do with why most of the world is still not developed. Inequality of rights between elites and majorities, between ethnic and religious groups, between men and women is pervasive. But perhaps we can hope that this ideal still serves as a beacon that crusaders continue to cite in their ongoing struggle for the dignity and rights of every man and woman.
Isn't pretty much every country on earth today richer and more developed than the USA was 233 years ago?
Per capita income in the USA in 1776 was equivalent to $919 in 1996 dollars. There were 114 countries with a higher GDP in 1996. I am skeptical that there are any countries that are as free today as America was in 1776 or at least was in 1790. The increase in personal freedom in poor countries since 1776 seems much smaller than the increase in their life expectancies and and wealth. I hope to one day live in a world where every man can be free, but I skeptical that that freedom will cause development. It seems that the same institutions that make equality before the law it and limited government possible also make development possible.
Posted by OneEyedMan at 9:57 AM | Comments (0)
July 5, 2009
I love when scientists change their minds
"Are parasites sufficient to cause extra limbs?," he asks. "Yes. Is selective predation by dragonfly nymphs sufficient to cause loss or reduction of limbs. Yes. Are chemical pollutants necessary to understand either of these phenomena? No."
Though it may be a decent null hypothesis, not all environmental problems are caused by humans.
Posted by OneEyedMan at 10:55 AM | Comments (0)
Money in politics
On the subject of allowing corporations to spend money on political campaigns:
The Supreme Court rightly pointed out that corporations, as opposed to individuals, benefit from special laws, including tax advantages, that assist them in accumulating large amounts of money. The ban on their spending is needed to prevent the political process from being overwhelmed and corrupted. The Supreme Court has upheld the restriction repeatedly.Pure Overreach
...
The most troubling part of the court’s action is the brave new world of politics it could usher in. Auto companies that receive multibillion-dollar bailouts could spend vast sums to re-elect the same officials who hand them the money. If Exxon Mobil or Wal-Mart wants something from a member of Congress, it could threaten to spend as much as it takes to defeat him or her in the next election.
This is nonsense. Steve Forbes was unable to buy himself the presidential election with his billions. Corzine and Bloomberg not withstanding, rich people are unable to systematically buy themselves elected office. Therefore, why would we expect corporate spending to do so? People do have tastes and preferences, and the ability of money and advertising to change those preferences is limited. I once read that the difference between a fabulously run campaign and a poor one (controlling for gerrymandering and candidate quality) is about 4% of the vote. Vast corporate spending may make a difference in tight elections but won't be able to influence the outcome in the large number of land-slide elections.
Posted by OneEyedMan at 10:45 AM | Comments (1)
Raise the price of vanilla enough and everyone will order the rocky-road
For mortgages, the specific plan proposed by the administration appears to be strongly influenced by Michael S. Barr, an assistant Treasury secretary. Mr. Barr is a former law professor at the University of Michigan who wrote an important article sketching out these ideas with Sendhil Mullainathan, an economist at Harvard, and Eldar Shafir, a professor of psychology and public affairs at Princeton. As the administration plan describes it, lenders could be required to offer some mortgages they call “plain vanilla,” with uniform terms. There might be one vanilla 30-year, fixed-rate mortgage and one five-year, adjustable-rate mortgage. The features of these plain mortgages would be uniform, much as in a standard lease used in most rental agreements.Mortgages Made Simplerby Dick Thaler.Lenders would also be free to offer other exotic mortgages — perhaps called “rocky road” mortgages? — along with the vanilla variety, but these offerings would receive more intense scrutiny from regulators.
Although the details of this dual ice-cream approach have not been fully specified, the concept has two main selling points.
First, inexperienced borrowers are steered toward the vanilla mortgages, the terms of which are chosen to be easy to understand. Vanilla mortgages would be the equivalent to the green runs at ski resorts that are intended for novices. The rocky-road mortgages would at least come with warning labels (“Don’t even think about going down this run unless you are an expert skier, or have a trusted professional instructor by your side”), and it is possible that for very exotic mortgages, borrowers might have to demonstrate that they understand the risks or have been aided by a certified mortgage planner.
Second, because the terms of the vanilla mortgages are all the same, they are more easily comparable; just as in the good old days, the A.P.R. will be a good basis for assessing the cost of the mortgage.
Dr. Thaler is a brilliant economist, but I doubt that this proposal will solve the problem. My understanding is that it is already the law in many (all?) states that insurers must quote a price of insurance for everyone who asks. This is an attempt to prevent insurers from targeting only a particular demographic. It doesn't work. You can force everyone to charge a price, but you cannot force anyone to quote an attractive price. It is easy for insurers to quote horrible prices to dissuade interest from groups that do not interest them. Similarly here, if mortgage issuers feel that ambiguity in mortgage terms is profitable, they will likely quote terms on simple mortgages that make them unattractive relative to the more complex products they offer.
The hope here is to either shift the mortgage market to a new equilibrium of simpler mortgages or shift consumer behavior to recognize mortgage complexity and become more sophisticated. But is any intervention required at all? We are already seeing a massive shift out of more complex mortgage products:
Traditional fixed-rate loans fell out of favor during the housing boom. They dropped from a 75 percent market share in 2002 and 2003 to around 50 percent in 2004 and 2005, according to Inside Mortgage Finance. But with the housing bubble burst and mortgage rates near historic lows, fixed-rate loans -- 30-year, 15-year and other types -- now account for about 95 percent of the market.'Vanilla' home loans could benefit borrowers
An alternative explanation is that once burned twice shy, and current borrowers may have learned a lot from the mistakes of others taking more complex mortgages in years past. One also has to worry about the composition effect. Current borrowers are likely higher quality on average than those back in 2007.
Posted by OneEyedMan at 8:49 AM | Comments (0)
July 3, 2009
Getting data out of PDF files is hard
I was helping a friend get data out of PDF files with limited tools yesterday. Your best bet is to use the text select tool while holding the ALT key, so you can select a column at a time. I use OCR software that came with my scanner, OmniPage, and in general I find it pretty easy to get data out. When I used to work in banking I didn't have access to such software and I used to dread extracting such data. My friend writes me this morning to mention he discovered PDF to Excel, which he really liked. I haven't tried it yet but I will give it a shot on my next data extraction project. Fingers crossed that it can do something intelligent with foot notes and Greek symbols.
Posted by OneEyedMan at 8:20 AM | Comments (0)
Economics link roundup
In U.S. Shifts Strategy on Illicit Work by Immigrants, the NY Times reports that our immigration policy has improved from plain to evil to merely insane. It seems we've moved from treating undocumented workers as violent criminals to white collar ones or drug addicts. Thanks for small blessings I guess.
In New Evidence on the Foreclosure Crisis at the WSJ, Dr. Stan Liebowitz reports that the primary cause of home foreclosure was negative home equity, i.e. owing the bank more than your home is worth. He says that
...only 12% of homes had negative equity, they comprised 47% of all foreclosures
.... Only 8% of foreclosures had an interest rate increase of that much. Thus the overall impact of upward interest rate resets is much smaller than the impact from equity.
...To be sure, many other variables -- such as FICO scores (a measure of creditworthiness), income levels, unemployment rates and whether the house was purchased for speculation -- are related to foreclosures. But liar loans and loans with initial teaser rates had virtually no impact on foreclosures, in spite of the dubious nature of these financial instruments.
This makes sense to me from a single cause explanation. If you have positive equity in your home you will find a way to hold on to it. If you cannot borrow money to refinance you will scrimp and save to hold on to your valuable asset, even if you are a liar or have a ballooning loan. However, there maybe be a lot of overlap in these categories. I suspect that a substantial number of those foreclosed houses with negative equity were also liar loans or balloons.
That is:
P(Default | negative equity) < P(Default | negative equity and balloon/ARM mortgage)
P(Default | negative equity) < P(Default | negative equity and liar loan)
and of course
P(Default | negative equity and neither a liar loan nor a balloon/ARM mortgage) < P(Default | negative equity)
I'm also concerned about the use of this in inference. Many home fell much in value precisely because other people who lived in the area depended on liar loans and balloon/ARM mortgages. When that demand dried up with changes in the financing supply, prices fell, some people had negative equity, and they defaulted.
Posted by OneEyedMan at 8:02 AM | Comments (0)
July 2, 2009
Why has congressional trip spending increased?
Congress's Travel Tab Swells: Spending on Taxpayer-Funded Trips Rises Tenfold (WSJ)
My guess is that spending has gone up because lobbyist spending on jaunts has fallen significantly due to growing restrictions on gift giving to politicians.
Posted by OneEyedMan at 3:04 PM | Comments (0)
Optimal contracting and book advances
I came across the following discussion of the optimal royalty structure for an author.
The agent is really high on The Unicornians. She thinks it's the next Twilight. So she submits it to several editors at once. Editor 1 comes back offering $300,000 for three books. Editor 2 offers $30,000 for three books but with a significantly better hardcover royalty. (Say, 20% instead of 10%.)Really Long & Boring Post about Book Advances and Publishing and also see Book Advances and Marketing and the Cart and the HorsePutting aside the (very important) questions of which editor would be a better fit and which publisher is doing a better job with Unicornian-esque books, I would argue that the author of The Unicornians is always better off signing with Editor 2.
Let's say that The Unicornians is not a tremendous success. The first book in the trilogy sells 8,000 copies in hardcover; the second two sell 6,000*. With Editor 1, the author gets her $300,000^^, but The Unicornians comes up $240,000 short^^^ of earning out. With Editor 2, the author only makes $80,000 on the series, but $50,000 of that is royalty, and the publisher has also made a (modest) profit. The publisher will likely ask the author for another series, perhaps something focused in on the werewolf dude...
Okay, so now let's say The Unicornians IS successful. Let's say the first book sells 250,000 copies in hardcover**, because they make a movie, and teens squeal about how hot the unicornian boy's horn looks. The second and third books also sell 250,000.*** With Editor 1's deal, the author earns back her advance and makes $1.2 million, for a total of 1.5 million dollars. With Editor 2's deal, the author earns out and makes $2.7 million in royalties, for a total of $3 million.****
A few comments. First, if an author has some indication that his book will sell as in the first example, he will make much more money. In fact, it would take five trilogies to earn this much money. Even if that publisher is made at you, the author proved he could sell 14,000 books, and so the next publisher should be interested in giving them another contract, even if it is at the much lower advance level. You also could take the money and give away your next book series on your website. This probably is not an important strategic situation because publishers have more expertise in understanding the commercial viability of the books than their authors do. After all, the authors specialize in writing books while publishers specialize in publishing and marketing them.
Another comment is that economists have discussed optimal contracting. It comes up in labor economics, game theory, and IO at a minimum. The optimal way to split uncertain revenues depends primarily on two factors, the relative risk aversion of the participants and the way that work quality can be observed. A few examples will help.
Let's say that you sew buttons onto suits. Since that can be observed perfectly the optimal contract is simply to pay a flat fee, say a $1 for each one you sew. When you work harder you make more. Slack off and make less. The lesson here is when you can contract over observable quality and productivity it makes sense to have employees bear the risk.
Now say you have a job where no amount of testing will predict how good you are at it, just that experience shows that 50% of people selected will be good at it. Presume also that your effort doesn't matter either. If the employer can employ hold a large number of such employees, then they can diversify all their risk, having little or no risk in aggregate production. In this situation it is optimal to pay employees a flat rate. Employees have to take a single job, so they can't diversify away from the risk of being bad at the job they take. The employer has no aggregate risk. If employees are risk neutral or risk loving, they'd take high pay if they are revealed to be of high quality and low pay if of low quality, but that doesn't describe most people. The lesson here is that when there is uncertainty in the productivity because effort cannot be clearly observed or there are sources of risk outside of the employee's control, those risks are best born by the people who either do not mind risk or can diversify that risk, which is usually the employer.
Now back to authors and publishers. Having a large advance provides a smaller incentive to write a better book than a larger royalty does. Once they give you your advance only your artistic integrity, reputation, and desire to be given more work in the future motivate you to write the best book possible. Your advance size shouldn't motivate you because it is a sunk benefit. That is, it is fixed based on your effort. On the other hand, a larger royalty provides less of an incentive for publishers to promote your book because they get a smaller share of the upside. There is residual risk that is born by the publishers because they front all the money to print and market the books. Giving them less of the upside but leaving the costs the same means that they should be less willing to take a risk on publishing your books.
This doesn't have a clear general solution. You want the most upside to write the best book possible, but you want to leave as much upside as possible to the publisher to ensure that they sell as many of your books a possible. A publishing house is diversified, so they are in a natural position to bear more risk than you are. That suggests that they take more royalties and you take a larger advance. However, we know it cannot be optimal to give the author no upside, because the advance alone would provide limited motivation to write a good book.
Publishers seem to distribute their marketing budgets in a lumpy way. That is, some books with small advances get large marketing budgets. This suggests that publishers can (or believe they can) distinguish much more about commercial viability after the book is written. That alone may be enough to motivate authors if they have a utilitarian value from seeing their book sell well. Alternatively, if they have at least some royalty payments then writing a good book means making more money even though the advance is a fixed payment because it raises the likelihood that publishers will promote your book. That suggests a compensation structure like the one we observe in publishing business, a combination of effort monitoring and risk sharing in the form of advances and royalties. Economics doesn't have anything obvious to say about the relative sizes of these parts without knowing more about risk preferences, the probability of commercial success, and the role of marketing in book promotion. It is however a tractable problem. If we knew the odds of a book being a commercial success dependent on author effort and publisher's marketing budget then we could solve for the optimal contract of profit sharing.
Hat Tip to Boing Boing at Proposal to raise book royalties, lower advances
Posted by OneEyedMan at 7:13 AM | Comments (0)
July 1, 2009
Another skeptic on Chinese growth
Is China Really an ‘East Asian success story’? by John Lee
Posted by OneEyedMan at 11:32 PM | Comments (0)
Surprisingly nasty
But even sealed windows don’t solve the soot problem entirely. Mr. Nelson and others said that gases created by basement heating systems often rise through buildings’ interiors.Soil in the CityBecause the gases tend to follow load-bearing walls, which are continuous, they concentrate around the edges of rooms, he said.
The gases leave oily deposits as they pass through carpets, which are really room-size filters.
And when dirt hits those deposits, it sticks. One result can be a dark line around the perimeter of the room, known as filtration soiling.
As if there weren't enough problems to worry about, now I have to worry about greasy invisible gases causing dirt to stick to my carpets. I guess it isn't too bad since I've never noticed it before, but it certainly sounds awful.
Posted by OneEyedMan at 4:52 PM | Comments (0)
Fact of the day
The brain is a very expensive organ in metabolic terms. Each unit of brain tissue requires over 22 times the amount of metabolic energy as an equivalent unit of muscle tissue.Brains and guts in human evolution: The Expensive Tissue Hypothesis*
Posted by OneEyedMan at 2:25 PM | Comments (0)
Will fixing global warming be good for us?
Does the G.O.P. want to be the party of sex scandals and polluters or does it want to be a partner in helping America dominate the next great global industry: E.T. -- energy technology?Just Do It by Thomas Friedman
Isn't it a nice coincidence that what is best for the planet is also best for economically and as a matter of international relations.
I am deeply skeptical. Why should the economic benefits of being a C02 cleanup first-mover are anywhere close to the costs? It is also important to remember that jobs spent cleaning up the environment are COSTS not BENEFITS of cleanup programs. Their labor is spent cleaning up waste not building things and delivering services we want.
Consider the major environmental cleanup legislation in the last hundred years. Taking lead out of gas, building nuclear plants, reducing DDT usage, CFC reduction to heal the ozone, particulate emission reductions, cleaning up our rivers, and building wildlife refuges. Not a single one of these policies produced enough growth to offset their costs. The argument for these cleanups was that there were aesthetic, health, and consumption benefits that made them worth their enormous costs. I can't help that feel that those trying to persuade us that this global warming prevention stuff is good for the economy are selling us a bill of goods. Preventing global warming may well be worth doing. But we need to be grownups and admit that fixing the problem will be expensive. There may be enormous economic advantages to not being a first mover.
From an international relations perspective, I think there are very few people who care about the US position on global warming issues. I suspect no meaningful CO2 reductions will occur until the BRIC countries get on board anyway, so this is all environmentalism theater anyway. One possibility there is conditional carbon tax. In the last election Maryland passed a bill (Dropping out of the electoral college) that said that the winner of the national popular vote would get all of Maryland's electoral votes, but only if enough states had done so to ensure that the winner of the popular vote also won the presidency. Until then, Maryland continued to issue their electoral votes to the party that won the most votes in Maryland. We could easily say that we will impose a carbon tax that binds the US, but only when a certain number of the large countries have a system in place that makes the other major producers do so too. That costs us nothing, and also makes us part of the solution.
Posted by OneEyedMan at 11:29 AM | Comments (0)
Does information really want to be free?
Malcolm Gladwell says there is no iron law of information's price falling to zero in Priced to Sell. That reminded me of a major issue I had with Cory Doctorow's science fiction novel Down and Out in the Magic Kingdom, where free energy and immortality (the ability to be reincarnated from software) had combined to eliminate all other scarcity on earth. In reading the book I couldn't escape that land and information need not be free in such a world. In fact, just as cheap food has made other things like acting and teaching much more expensive, Doctorow's hypothesis that free energy and long life expectancy would lead to the end of scarcity seems backwards. I expect that such a situation would cause the remaining scarce goods to become much more expensive. A sort of Baumol's cost disease on steroids.
It is impossible to know how the death of newspapers and the growth of electronic books will change the face of information distribution. Perhaps the price of information and entrainment will fall to zero, and only non-profits and volunteers will create any. That's the story that the futurists seem to like, but that is hardly the only possible one. Maybe that was clearly the right narrative for music, but I'm skeptical that is the right model for video and print.
Posted by OneEyedMan at 8:47 AM | Comments (0)
Animal rights stuff I don't get
Why is it that many people can be happy with the mass killing of geese, chickens, pigs, horses, cows, goats, and sheep, but it bothers them when we kill seals?
A NY Times article, Canadian Chefs Serve Seal, With a Side of Controversy, discusses a flourishing restaurant trade in seal meat in Canada, despite bans in Europe and the USA. It seems that the fur as waste can't be the real issue, because if fur is cruel and leather is not, then eating seal makes things less cruel, not more:
Canada allows two distinct hunts each year: a small one by Inuits in the Arctic, mainly a subsistence hunt for food, and the much larger Gulf of St. Lawrence hunt on the Atlantic coast, driven primarily by the fur trade.In the latter hunt, which has been the focus of protests by animal rights groups, fishermen are allowed to kill 280,000 seals out of a herd that Canadian officials estimate at 5.6 million. About 15,800 Canadians hold seal hunting licenses.
...
Christian Archambault, a second-generation fishmonger at the Atwater Market in Montreal, flatly refuses to stock seal, but he acknowledged a distinction between urban diners simply exploring a new trend and Inuits following a tradition. “They have a right to eat it locally,” Mr. Archambault said.The Canadian humane society also does not oppose the small hunt in the far north. Its main objection to seal dishes in restaurants, it says, is that the cuisine deflects attention from the bigger hunt, which the society has been working to end. “If they’re selling meat, they’re promoting the commercial seal hunt,” said Rebecca Aldworth, a director of the Canadian Branch of Humane Society International. “The restaurants aren’t the story here. The seal hunt is the story.”
Ms. Aldworth added: “If the restaurants believe the hunt should end, they should not be serving seal meat. Most countries are taking steps to end the hunt, not promote it.”
I also don't understand why indigenous consumers deserve special rights. Perhaps for limited resources like whales, we can give any limited hunting rights to those who hold the most long established rights to do so, which in this case would be the Inuit. However, there are plenty of Canadian seals. If killing them for their food and skin is wrong for white Canadians, it should also be wrong for Inuit ones.
I'm really having trouble seeing the difference between the seal hunt and the American deer hunt, and that comparison makes me less sympathetic with the seals. Public opinion on this matter could just come down to Denis Leary's bit:
What are you?
I'm an otter.
And what do you do?
I swim around on my back and do cute little human things with my hands.
You're free to go.
And what are you?
I'm a cow.
Get in the fucking truck, ok pal!
But I'm an animal.
You're a baseball glove! Get on that truck!
I'm an animal, I have rights!
Yeah, here's yer fucking cousin, get on the fucking truck, pal! We kill the cows to make jackets out of them and then we kill each other for the jackets we made out of the cows.
Posted by OneEyedMan at 8:26 AM | Comments (0)