Handpicked to satisfy your intellectual curiosity!
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The Patriots Corner ( Inequality & Other Issues to Get Your Blood Boiling):
Court OKs immunity for telecoms in wiretap case – via Boston.com – A federal appeals court has ruled as constitutional a law giving telecommunications companies legal immunity for helping the government with its email and telephone eavesdropping program.
Drone-Ethics Briefing – via Longform.org – The transcript from an lecture presented by In-Q-Tel, the CIA’s venture-capital arm, on the ethics of drones, military robots, and cyborg soldiers.
SAT taker-for-hire Sam Eshaghoff tells “60 Minutes” it was easy to cheat – via NYPOST.com – With his business booming, Eshaghoff began to feel like he was performing a noble public service rather than a criminal act that would lead him into handcuffs. “I mean, a kid who has a horrible grade-point average, who no matter how much he studies is gonna totally bomb this test, by giving him an amazing score, I totally give him this . . . new lease on life. He’s gonna go to a totally new college. He’s gonna be bound for a totally new career and a totally new path on life.”
Gangs and Politicians in Chicago: An Unholy Alliance – via Longform.org – Inside the shadowy meetings between Chicago’s violent gang members and its elected officials.
How Money Is Corrupting Government – via Long Views: The Long Now Blog – A dazzlingly incisive presenter, Lawrence Lessig specializes in identifying deep systemic problems in public process (such as copyright malfunction and Congressional dysfunction) and then showing how they can be cured. Currently he is bearing down on the corruption of Congress by the practice of private funding for public elections through campaign contributions. He writes: “The dependency of modern campaign finance is the single most important cause of the bankruptcy of Congress. Fixing this bankruptcy is the single most important reform effort that Americans face just now.” As he did with helping fix copyright problems via Creative Commons, he has a plan for reforming elections to reestablish Congressional trust and effectiveness. (Public trust in Congress is currently at 12%.)
EU warns wasting environmental resources could spark new recession – via guardian.co.uk – Janez Potočnik, European Union commissoner for green affairs, says unless habits change scarcity could see prices spike
The Gross Illegality of MERS- – viaValue Investing World- This centralized database facilitated the buying and selling of mortgage debt at great speed and greatly reduced cost. It was a key innovation in expediting the packaging of mortgage-backed securities. Soon after the registry launched, in 1999, the Wall Street ratings agencies pronounced the system sound. “The legal mechanism set up to put creditors on notice of a mortgage is valid,” as was “the ability to foreclose,” assured Moody’s. That same year, Lehman Brothers issued the first AAA-rated mortgage-backed security built out of MERS mortgages. By the end of 2002, MERS was registering itself as the owner of 21,000 loans every day. Five years later, at the peak of the housing bubble, MERS registered some two thirds of all home loans in the United States. Without the efficiencies of MERS there probably would never have been a mortgage-finance bubble.
America’s Financial Leviathan – J. Bradford DeLong – via Project Syndicate – But if the US were getting good value from the extra 5.6% of GDP that it is now spending on finance and insurance – the extra $750 billion diverted annually from paying people who make directly useful goods and provide directly useful services – it would be obvious in the statistics. At a typical 5% annual real interest rate for risky cash flows, diverting that large a share of resources away from goods and services directly useful this year is a good bargain only if it boosts overall annual economic growth by 0.3% – or 6% per 25-year generation.
The Dumbest Idea In The World: Maximizing Shareholder Value – via Forbes – The “real market,” Martin explains, is the world in which factories are built, products are designed and produced, real products and services are bought and sold, revenues are earned, expenses are paid, and real dollars of profit show up on the bottom line. That is the world that executives control—at least to some extent. The expectations market is the world in which shares in companies are traded between investors—in other words, the stock market. In this market, investors assess the real market activities of a company today and, on the basis of that assessment, form expectations as to how the company is likely to perform in the future. The consensus view of all investors and potential investors as to expectations of future performance shapes the stock price of the company.
Used-car leases lucrative for dealers, but not customers – via latimes.com – Interest rate caps can be sidestepped, and there are fewer financial disclosure rules. Repossession is a snap, and lease terms can’t be reduced by a bankruptcy judge. Still, business is booming.
More Concealed Guns, and Some Are in the Wrong Hands – via NYTimes.com – Across the country, it is easier than ever to carry a handgun in public. Prodded by the gun lobby, most states, including North Carolina, now require only a basic background check, and perhaps a safety class, to obtain a permit.
Best Reads of The Week:
The Fat Trap – via NYTimes.com – While the findings from Proietto and colleagues, published this fall in The New England Journal of Medicine, are not conclusive — the study was small and the findings need to be replicated — the research has nonetheless caused a stir in the weight-loss community, adding to a growing body of evidence that challenges conventional thinking about obesity, weight loss and willpower. For years, the advice to the overweight and obese has been that we simply need to eat less and exercise more. While there is truth to this guidance, it fails to take into account that the human body continues to fight against weight loss long after dieting has stopped. This translates into a sobering reality: once we become fat, most of us, despite our best efforts, will probably stay fat.
Video: Ted Talk – The battle between your present and future self – via TED.com – Every day, we make decisions that have good or bad consequences for our future selves. (Can I skip flossing just this one time?) Daniel Goldstein makes tools that help us imagine ourselves over time, so that we make smart choices for Future Us.
Why Our Goals Are Best Achieved Indirectly – via Value Investing World – John Kay – Obliquity: Why our goals are best achieved indirectly
Advertisers Debate When to Use Scary Stats for Raising Awareness About Illness – via WSJ – The Ad Council usually avoids statistics in PSAs. “We know from our experience that effective advertising has to have an emotional component and statistics-based campaigns can be very rational,” Conlon said. “We’ve also found that people tend not to believe statistics.”And sometimes they just don’t care much about them. “When we were developing our underage drinking prevention campaign,” Conlon recalled, “we found that it doesn’t resonate with parents to learn about how many children are drinking underage. It’s too easy for them to say ‘it’s not my child.’ We found that it was much more compelling to include a statistic that was more about the consequences of underage drinking: Those who start drinking before age 15 are six times more likely to have alcohol problems as adults than those who start drinking at age 21 or older.”
THE GREATEST INVENTION IS THE SCIENTIFIC METHOD – via More Intelligent Life – Unlike a traditional invention, the scientific method did not come into being at a particular time: its history is complex and stretches back long before 1833, when the term “scientist” was coined by the English polymath William Whewell. The method is not a concrete gadget like Gutenberg’s press, the computer or the Pill. Nor is it a brainwave like the non-geocentric universe, the Indo-Arab counting system or the theory of evolution. It is a fecund way of thinking on which the modern world rests. In relatively few generations, the rigorous application of the method has bootstrapped modern society through a non-linear accumulation of both knowledge and technology. Its impact on everyday life is ubiquitous and indisputable, even though a surprising number of people, including some senior politicians, have only a feeble grasp of its significance.
What the Heck is Research Anyway?- via hardsci.wordpress.com – So what is research anyway? Let me answer a slightly different question that my wife’s aunt asked recently as it will help frame the answer. She asked, “What purpose does research serve?” Now there is probably less consensus on the answer to this question than I’d like, but ultimately, I think the answer is knowledge. Research is supposed to provide knowledge that can be used by others and hopefully the broader society. To illustrate, let me describe the number of ways in which the knowledge we generate might be used.
Father Wants To Teach Charlie Munger’s Lessons To Daughter- via bpsundar’s – I am a passionate father, all-right, Wanted to grow my daughter right, Borrowed ideas from the Bright, Made up parables for her to fight; This World, And be a leading light, Took the effort to write, And share with equal delight, To do well, is beyond my might, Forgive me for my plight.
Behavioral Economics, Complexity Research, Decision Making, Psychology, & Risk
Animation on Moral Persuasion – via Grey Matter – Applied social- and mediapsychology. We research, publish and consult about the application of scientific persuasion insights in marketing, sales and crossmedia campaigning.
The Science of Happiness, Part 3: What commuting, graduate degrees and being single have in common – via What Makes Them Click – The following discussion is about the correlation between happiness and many other factors. But it’s just correlation. The factors below are correlated with happiness, but that does not mean they CAUSE happiness. “Correlation does not imply causation”.
Suffering From Decision Fatigue? The Downside of Abundance – via Why We Reason – Afterward, Twenge tested their self-control by having them hold their hands in ice water for as long as they could. She found that the first group gave up much sooner than the second group. “Making all those choices,” Baumeister concludes in his recent book Willpower, “had apparently sapped their willpower, and the effect showed up again in other decision-making exercises.”
What Americans Keep Ignoring About Finland’s School Success - via The Atlantic – Compared with the stereotype of the East Asian model — long hours of exhaustive cramming and rote memorization — Finland’s success is especially intriguing because Finnish schools assign less homework and engage children in more creative play. All this has led to a continuous stream of foreign delegations making the pilgrimage to Finland to visit schools and talk with the nation’s education experts, and constant coverage in the worldwide media marveling at the Finnish miracle.
Christmas Shopping, Credit Cards, and Layaway – via www.newyorker.com – The return of layaway makes historical sense, since it first became widespread during the Great Depression, when the country, just as it is now, was dealing with the hangover from a colossal credit binge. During the nineteen-twenties, the vast majority of consumer durables, like refrigerators, washing machines, and furniture, had been purchased on installment. But credit dried up during the Depression. Similarly, one reason for layaway’s resurgent popularity is that credit, for many Americans, is much harder to come by these days. Credit-card companies have tightened their standards, dropped customers, and shrunk credit lines. But consumers aren’t using layaway just because they don’t have other options. They’re using it as a way to manage their money better. It’s a question not necessarily of spending less but of learning how to spend smarter.
Why We Don’t See Lions, Bombs and Breast Cancers – via www.scientificamerican.com – Let’s imagine that I suggest you look for lions while we are strolling through the park. For most people reading this, the local park will be an unlikely place to find a lion. If you take my request seriously, you might look around but you would not spend vast amounts of time on the search. If you saw something of a light brown color out of the corner of your eye, you would probably be reluctant to jump up and down, shouting, “I saw one.” Now let us suppose that we are on safari in Kenya, strolling through the Serengeti and I suggest that you look for lions. In this case, you might spend the whole day on this search and you might well jump up and down, shouting, “I saw one!” as that light brown, furry something disappeared from sight.
Trials and Errors: Why Science Is Failing Us – via Magazine – Back pain is an epidemic. The numbers are sobering: There’s an 80 percent chance that, at some point in your life, you’ll suffer from it. At any given time, about 10 percent of Americans are completely incapacitated by their lumbar regions, which is why back pain is the second most frequent reason people seek medical care, after general checkups. And all this treatment is expensive: According to a recent study in The Journal of the American Medical Association, Americans spend nearly $90 billion every year treating back pain, which is roughly equivalent to what we spend on cancer.
New Rationally Speaking podcast: neurobabble – via rationallyspeaking.blogspot.com – The media is increasingly bombarding us with reports of advances in neuroscience which claim all sorts of amazing feats, like allowing us to read our thoughts and intentions. It sounds like neurobabble. Most of these reports though are either based on bad science, reach false conclusion, or are based on conceptual misunderstanding of how our psychology works. To be fair, much of this is manufactured by the popular media but, unfortunately, some of it comes from the neuroscience community itself. So, what information can we really get from fMRIs? As with the misunderstanding of what genes are (like whether there is a God or a conservative gene), are there really parts of the brain dedicated to categories of thoughts like some of these reports claim? And, perhaps more importantly, what are the ethical implications of this neurobabble, should we arrest people who we can tell, based on this research, will be committing a crime?
“Illusions in Regression Analysis” - via organizationsandmarkets.com – This illusion [that correlation implies causality] has led people to make poor decisions about such things as what to eat (e.g., coffee, once bad,is now good for health), what medical procedures to use (e.g., the frequently recommended PSA test for prostate cancer has now been shown to be harmful), and what economic policies the government should adopt in recessions (e.g., trusting the government to be more efficient than the market).
Doctors diagnose diseases as if recognising objects | Mo Costandi | Science – via guardian.co.uk – Diagnosing disease is a specialized type of problem-solving, which is believed to require little or no analytical reasoning. Instead, it is likely based on the rapid retrieval of similar cases from memory and, as such, has been likened to pattern recognition. A new study now provides evidence that medical diagnoses involve the same brain systems that are required for recognizing and naming everyday objects.
Robert Sapolsky Talks About the Biology of Human Behavior – via knowledgeisnecessity.blogspot.com – The speaker was leading neuroscientist Robert Sapolsky addressing a 2010 class in human biological behavior at Stanford. Dr Sapolsky is a leading researcher into how stress influences behavior, an endeavor that ranges from tracking brain circuitry in lab animals to studying baboons in the wild. He also possesses that rare gift of being able to communicate complex topics to the general public, with a number of highly readable mainstream books to his credit, including “Why Zebras Don’t Get Ulcers.”
Using Ratio of Males to Females To Understand Behavior – via Psych Net – The ratio of males to females in a population is an important factor in determining behavior in animals. We propose that sex ratio also has pervasive effects in humans, such as by influencing economic decisions. Using both historical data and experiments, we examined how sex ratio influences saving, borrowing, and spending in the United States. Findings show that male-biased sex ratios (an abundance of men) lead men to discount the future and desire immediate rewards. Male-biased sex ratios decreased men’s desire to save for the future and increased their willingness to incur debt for immediate expenditures. Sex ratio appears to influence behavior by increasing the intensity of same-sex competition for mates. Accordingly, a scarcity of women led people to expect men to spend more money during courtship, such as by paying more for engagement rings. These findings demonstrate experimentally that sex ratio influences human decision making in ways consistent with evolutionary biological theory. Implications for sex ratio effects across cultures are discussed.
Nick Crocker: Floss the Teeth You Want To Keep – via Quantified Self – Nick Crocker‘s QS journey started with his dentist telling him, “Floss the teeth you want to keep!” Nick tells the story below of how he spent five years figuring out how to implement changes in his life, and how hard it was to add this habit to his routine. He also shares, Ignite-style, ten lessons he learned to make change easier.
Great apes make sophisticated decisions - via www.mpi.nl – Chimpanzees, orangutans, gorillas and bonobos make more sophisticated decisions than was previously thought. Great apes weigh their chances of success, based on what they know and the likelihood to succeed when guessing, according to a study of MPI researcher Daniel Haun, published on December 21 in the online journal PLoS ONE. The findings may provide insight into human decision-making as well.
Business, Economics, Entrepreneurship, Finance:
The Physics of Finance: The Higgs Boson – via and the value of money – The value of money represents a “continuous symmetry”. If, at some point, the value of money was globally redefined by a certain factor, this would have no consequences whatsoever. Thus, in order to arrive at a specific value of money, the continuous symmetry must be broken.
The New Dealers – via Longform.org – The unlikely people who’ve turned to selling weed in the recession.
Why is finance so complex? – via www.interfluidity.com – Finance has always been complex. More precisely it has always been opaque, and complexity is a means of rationalizing opacity in societies that pretend to transparency. Opacity is absolutely essential to modern finance. It is a feature not a bug until we radically change the way we mobilize economic risk-bearing. The core purpose of status quo finance is to coax people into accepting risks that they would not, if fully informed, consent to bear.
Derman, Rodrik and the nature of statistical models – via Numbers Rule Your World – Rodrik does not believe that the economics profession needs better models. He claims “Macroeconomics and finance did not lack the tools needed to understand how the crisis arose and unfolded.” The fault of the profession was to have trusted the wrong models (ones assuming efficient and self-correcting markets). He believes that this bad choice of models is facilitated by “excessive confidence in particular remedies – often those that best accord with their own personal ideologies.”
Banker’s wife: ‘I knew what I was getting into’ - via guardian.co.uk – “The world of finance is a way of life. I also know men in corporate law who were in a conference call when their wives went into labour. And trust me, they did not come out of that call until they had finished. That sort of thing happens in finance too, you either play the game or you sit on the sidelines. Nobody at my husband’s bank with a certain level of responsibility knows how many days’ leave they have for the rest of the year; nobody uses them anyway. There’s no such thing as ‘today, closed for business’, and using an ‘out of office’ is not done.
The Eclectic Mix:
What is it like to have an understanding of very advanced mathematics? – via Quora – You can answer many seemingly difficult questions quickly. But you are not very impressed by what can look like magic, because you know the trick. The trick is that your brain can quickly decide if question is answerable by one of a few powerful general purpose “machines” (e.g., continuity arguments, the correspondences between geometric and algebraic objects, linear algebra, ways to reduce the infinite to the finite through various forms of compactness) combined with specific facts you have learned about your area. The number of fundamental ideas and techniques that people use to solve problems is, perhaps surprisingly, pretty small
Between the Lines – Features – via Los Angeles magazine – That prized garage space or curbside spot you’ve been yearning for may be costing you—and the city—in ways you never realized. A journey into the world of parking, where meter maids are under siege, everybody’s on the take, and the tickets keep on coming
Value Investing World: Problem Solving: Complexity, History, Sustainability – via By Joseph Tainter – Sustainability or collapse follow from the success or failure of problem-solving institutions. The factors that lead to long-term success or failure in problem solving have received little attention, so that this fundamental activity is poorly understood. The capacity of institutions to solve problems changes over time, suggesting that a science of problem solving, and thus a science of sustainability, must be historical. Complexity is a primary problem-solving strategy, which is often successful in the short-term, but cumulatively may become detrimental to sustainability. Historical case studies illustrate different outcomes to long-term development of complexity in problem solving. These cases clarify future options for contemporary societies: collapse, simplification, or increasing complexity based on increasing energy subsidies.
What It Looks Like Inside Amazon.com - via Crafts for Men « Keywords: shop, education, books, holiday – Over the holiday season, economists guessed that among folks who did any online shopping, more than 85% of them ordered at least one shipment from Amazon.com. In fact, the company hired 15,000 temporary employees, just to help with increased orders in November and December. Seeing as they employ around 31,200 folks during the rest of the year, that’s a whole buncha jobs. And orders.
Master Manipulators of the Micro-World – via Guest Blog, Scientific American Blog Network – Parasites are perhaps the greatest master manipulators out there in nature. Even though they are tiny, their numbers are mighty and they have a huge impact on individuals and even entire ecosystems. For a parasite the primary objective is to increase its numbers and successfully manipulate its host to help it accomplish this goal. One of the easiest ways to do this is to induce changes that increase transmission of the parasite between hosts. In this sense, the manipulation can be thought of as a characteristic of some parasites and, unbeknownst to the host, the end result can be some very odd behaviors indeed.
New Cambridge study measures countries’ well-being – via University of Cambridge – The key message is that the UK government, like many around the world, now recognises that economic measures such as GDP do not provide adequate information about a society’s progress.
The End of the Web? Don’t Bet on It. Here’s Why – via www.bothsidesofthetable.com – In it he asserts that the web is dying and in its ashes will see the rise of the “App Internet.” The App Internet is different than the HTML Internet (aka The Web, WWW and in the mobile arena “The Mobile Internet” or short-hand HTML5) because the “presentation layer” and “client side” functionality are defined by applications that run on your mobile device and connect into the open Internet back-end to exchange information with other web services.
Taxes Matter: Corporate Taxes Key Facts – via Visual.ly – This infographic provides information about corporate taxes in the United States. It shows how much of corporate taxes are the percentage of GDP as compared to individual taxes and compares the corporate tax rate in the U.S to other countries to show that in the U.S are lower than in other countries.
The American Debt Crisis – via Visual.ly – This infogrpahic provides data about the American debt crisis. It states the current debt, how much we owe each country, and if Americans and the American government can afford this debt
College Bowl Games – How Much of a Big (Money) Deal Are They? – via Visual.ly – This infographic takes a look at some of the stats of this season’s biggest games to get a glimpse at just how big of a deal bowl season is.
Beauty’s Benefits – via Visual.ly – Beauty may seem like enough of a reward in and of itself, but a wealth of research reveals it comes with extra perks.
Interest Rates (1831-2011) – via Chart Porn – An interesting long term perspective.
Washington’s Revolving Door – via Chart Porn – Each pair of circles shows people who left government service to work/lobby for major corporate interests.
Amanda Cox Talks about Developing Infographics at the New York Times – via information aesthetics – We know that The New York Times graphics department produces some of the best visualizations in the world. We have seen its director, Steve Duenes, give a talk about some of their best works and provide some answers on their internal approach.