You didn’t think I forgot to post this did you. No, I just has some minor set backs on Sunday.
Here are some links to articles that didn’t make our front page. Several of the articles are very insightful I highly recommend reading them. As always, the articles are from different fields but should make you a more well rounded investor. Take Care. (Click on the titles to access the articles)
1. Mega Video Collection Of Psychology Related Topics - Via Stanford - I highly recommend this especially for Joe Koster –
2. Uncommon Knowledge With Peter Robinson – Via Hoover Institution - Uncommon Knowledge™ is now an exclusive on the web, giving viewers immediate access to all the videos and transcripts from the Uncommon Knowledge television series (1997 – 2005) as well as the current Webcasts (2006 – present). The series features Hoover fellow Peter Robinson interviewing political leaders, distinguished scholars, and leading journalists. The unedited Webcasts, which go upon the website promptly after the interview, feature exchanges of ideas and informed discussions about important issues of the day. Choose any Uncommon Knowledge video below to get fresh ideas and up-to-date commentary about contemporary issues.
3.The Road Often Less Traveled – Via Political Calculations – When it comes to mobility, people are creatures of habit. Most people spend about 40% of their time in just two places with much of their remaining time spent visiting anywhere from 5 to 50 other places, which they visit with diminishing regularity. What’s more, we can predict the likelihood that an individual is a certain distance away from their preferred two places. We know this because the typical daily travel of a large sample of people was tracked and analyzed by Marta C. González, César A. Hidalgo and Albert-László Barabási, who studied the trajectory of 100,000 anonymous mobile phone users over a six-month period of time and found that when it comes to mobility patterns, the distance humans travel is remarkably predictable.
4. Short History Of US Debt - Via WSJ – When President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law yesterday, he was adding to what is already almost guaranteed to be the largest deficit in American history. In January, the Congressional Budget Office projected that the deficit this year would be $1.2 trillion before the stimulus package. That’s more than twice the deficit in fiscal 2008, more than the entire GDP of all but a handful of countries, and more, in nominal dollars, than the entire United States national debt in 1982.
5. The Trials Of Publishing Shiller’s Animal Spirits - Via Princeton – Our Director Peter Dougherty was invited by the Seminary Co-op bookstores in Chicago to write about our new book ANIMAL SPIRITS: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism in their “Editors Speak” forum, and for your reading pleasure, here it is! According to their website, “Editors Speak” will present a rare opportunity to literary and university press editors to discuss and explain the books they have published. While serving on one hand as a review of the book, we also hope this will offer a unique insight into the publishing process and the choices made before a book goes to press. You should check out their site regularly to see what’s cooking over there. But I digress…. Peter shines a light on the fascinating back story of how ANIMAL SPIRITS came to be, and its role not only in this current financial disaster but for economists and public policy folks of the future.
6. No Reason For Non Recourse Debt - Via Interfluidity – Does your head spin, acronym upon acronym, non-recourse, warranties, and covenants? Well, unspin it. The New York Fed is telling us, in plain and simple legalese, that it is planning to make a very generous gift to investors that participate in this program (and indirectly to the banks that sell assets to them). A non-recourse loan bundles an ordinary loan with an option to “put” the collateral back to the lender instead of paying off the loan. Sometimes this is not much of a gift: When a pawnbroker lends you half of what your Fender Stratocaster is worth, and the fact that you can surrender the guitar rather than pay off the loan is cold comfort. But if someone fronts you substantially all of what an asset is worth, and the value of that asset is uncertain and volatile, then the put option bundled into the “loan” becomes extraordinarily valuable. If the asset appreciates, you take the profits and “ka-ching!”. If the asset falls in value, the lender takes the trash and eats the loss.
7. Rich States Poor States - Via Cafe Hayek - Here’s an important report from the American Legislative Exchange Council on the relationship — at the individual U.S. state level — between economic freedom and economic prosperity.
8. Percentage Of Students As Engineers - Via Captain Capitalism – Part of a larger study to ascertain which countries may have a brighter and better future than the US, I found data that allowed me to calculate what percent of students were majoring in engineering or the sciences. The point being of course that “sociology” majors or “journalism” majors don’t really advance society or technology at all and are basically hobbies rich, spoiled suburbanite Americans like to major in thinking somehow they’ll produce the wealth necessary to support themselves throughout their lives (which they won’t). Alas a good metric to gauge the future productivity of a nation is to measure what percent of the students major in something worthwhile, and thus these statistics from the OECD (2006)
9. Lecture On Intertemporal Choice - Via Geary Behaviour Center – Below is a link to the lecture on intertemporal choice. Decisions that deliver benefits and costs over different time periods are central to the study of economics and a key area of interaction between economics, psychology and policy. This lecture reviews the basic discounted utility model. It examines hyperbolic discounting and dual-process accounts of intertemporal choice. The lecture reviews domain specific discounting, children’s discounting, preferences for sequences, heuristics employed in judging future utility, evidence on the power of defaults. It then examines recent evidence on neurological mechanisms involved in time preferences. The lecture concludes with a discussion of the policy issues at stake, in particular the implications for regulation of financial markets.
10. Who Are Macro Experts – Via Overcoming Bias - I never learned much macro-econ; they didn’t respect it at Caltech where I got my Ph.D. So while my econ colleagues blog 24/7 about the macro crisis, I’ve mostly kept quiet. But I can speak on this issue: who are the real “experts”? During this crisis, politicians and reporters have been eager to cite “economists” in support of their causes. For example, What I’ve said is what other economists have said across the political spectrum, which is that, if you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of.
11. What Makes You Happier Stuff Or Experience – Via Neuro Narrative – According to a study conducted at San Francisco State Univeristy, the things you own can’t make you as happy as the things you do. One reason is adaptation: we adapt to all things material in our lives in a matter of weeks, no matter how infatuated we were with the much-coveted possession the day we got it. Another is that experience, unlike possession, generally involves other people, and fosters or strengthens relationships that are more edifying over time than owning something
12. Persistence Of Intuitive & Erroneous Beliefs - Via Cognition & Culture – My motivation for posting this blog is simple: I am wondering whether it is possible for humans to ever truly internalize counterintuitive scientific principles like evolutionary theory or Newtonian (let alone Einsteinian) physics. According to developmental psychologists like Elizabeth Spelke or Susan Carey, and cognitive anthropologists like Pascal Boyer and Dan Sperber, humans are endowed with inference mechanisms that enable them to acquire knowledge of the world (these inference mechanisms are known by several terms, such as core knowledge, conceptual modules or intuitive ontologies). Sometimes these inference mechanisms are at odds with scientific principles. A well-studied example is impetus physics, the view that inanimate objects, in order to be propelled, have to be laden with a force (impetus) by an agent or another object in order to be set in motion. This impetus physics yields a lot of imprecise predictions: for example, over 50% of adults believe that a ball, being launched by a sling, will continue in a curvilinear path, or that a ball dropped by a running person will fall straight down instead of describing a parabolic path. Newtonian physics, in contrast, predicts a parabolic path, a prediction only consistently made by people with a college training in physics (see McCloskey’s 1983 review in Scientific American to get an idea).
13. Book: So Damn Much Money: Triumph Of Lobby & Corrupting Of Govt – The startling story of the monumental growth of lobbying in Washington, D.C., and how it undermines effective government and pollutes our politics.
A true insider, Robert G. Kaiser has monitored American politics for The Washington Post for nearly half a century. In this sometimes shocking and always riveting book, he explains how and why, over the last four decades, Washington became a dysfunctional capital. At the heart of his story is money–money made by special interests using campaign contributions and lobbyists to influence government decisions, and money demanded by congressional candidates to pay for their increasingly expensive campaigns, which can cost a staggering sum. In 1974, the average winning campaign for the Senate cost $437,000; by 2006, that number had grown to $7.92 million. The cost of winning House campaigns grew comparably: $56,500 in 1974, $1.3 million in 2006.
Politicians’ need for money and the willingness, even eagerness, of special interests and lobbyists to provide it explain much of what has gone wrong in Washington. They have created a mutually beneficial, mutually reinforcing relationship between special interests and elected representatives, and they have created a new class in Washington, wealthy lobbyists whose careers often begin in public service. Kaiser shows us how behavior by public officials that was once considered corrupt or improper became commonplace, how special interests became the principal funders of elections, and how our biggest national problems–health care, global warming, and the looming crises of Medicare and Social Security, among others–have been ignored as a result.
14. The Porn Belt – Via Gene Expression – Here’s an interesting map which shows states with high and low porn subscription rates (dark = high, light = low).
15. Podcast: The Venturesome Economy – Via VOX.eu- Amar Bhidé of Columbia University talks to Romesh Vaitilingam about his new book, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. He explains why know-how developed abroad enhances prosperity at home, and why trying to maintain the US lead by subsidising more research or training more scientists will do more harm than good. The interview was recorded in London in November 2008.
16. We Judge Our Leaders On Looks Not Performance – Via BPS – Imagine if the leaders of the free world were chosen not based on their actual competence but on how competent they look. Such a scenario could be worryingly close to the truth. John Antonakis and Olaf Dalgas presented photos of pairs of competing candidates in the 2002 French parliamentary elections to hundreds of Swiss undergrads, who had no idea who the politicians were. The students were asked to indicate which candidate in each pair was the most competent, and for about 70 per cent of the pairs, the candidate rated as looking most competent was the candidate who had actually won the election. The startling implication is that the real-life voters must also have based their choice of candidate on looks, at least in part.
Moreover, a second experiment asked children aged 5 to 13 years to make the same choice, but in the context of a game in which they needed to select who they would like to captain their ship sailing from Troy to Ithaca. They tended to select for captain those candidates rated earlier as most competent by the udergrads, and again the children’s choices tended to retrospectively predict which candidates went on to be victorious in the real election.