Weekly Roundup 20: A Curated Linkfest For The Smartest People On The Web
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. Why a Woman’s Brain is Like an Avalanche, a Landslide, an Earthquake, or a Hurricane – Via Alfin Blog – Anyone who observes a woman quite closely will see that she is never the same person twice. Women are intrinsically changeable, and the reason for that is that a woman’s brain is exquisitely changeable. Have you ever wondered about the processes that lie behind a woman’s changeable brain? The answer resides in an obscure field of study known as “self organised criticality.” Self-organised criticality deals with systems that are able to balance on the razor’s edge between chaos and order. Such systems, like a woman’s brain, can tip in either direction — seemingly without warning.
2. Radio Show: Klein On Truth Bias & Disagreement – Via Library Of Econ – Dan Klein, of George Mason University, talks with EconTalk host Russ Roberts on truth in economics, bias, and groupthink in academic life. Along the way they discuss the Food and Drug Administration (and the drug approval process), the culture of academic life and the roles of empirical evidence and prediction markets in adjudicating academic disagreement. The conversation closes with a discussion of Econ Journal Watch–the watchdog journal Klein founded and edits–and an invitation to listeners to join a discussion of The Theory of Moral Sentiments by Adam Smith.
3. Video: Quantitative Easing Explained By Financial Times – Via FT – As the world suffers its worst recession since the second world war, policy makers are searching for the best tools to limit the downturn. Central banks have rapidly lowered interest rates in order to reduce the cost of borrowing. The hope is to stimulate spending in the economy now. So far, it has been to no avail. Confidence disappeared from banks, companies and households in the autumn of 2008 and unemployment is rising fast in 2009. Without an obvious source of fresh demand, central banks are moving to open the way to more unorthodox approaches to address the crisis. One of those is quantitative easing. Our interactive feature explains how quantitative easing works and how this policy may stimulate the economy.
4. Benoit Mandelbrot and the wildness of financial markets- Via Scientific American – In a lecture at Columbia University this week, famed fractal pioneer Benoit Mandelbrot once again inveighed against traditional economic theories, returning at a time of financial malaise to many of the points he raised in a 1999 Scientific American feature. (In September 2008, as the U.S. economy began to shake, editor Gary Stix provided a brief recap of Mandelbrot’s article and the ensuing response from readers in this blog post.) Mandelbrot, 84, spoke at the Festival della Matematica, or Mathematics Festival, an event produced jointly in Rome and New York City by a consortium of Italian governmental and cultural agencies.
5. Rethinking rent: Maybe we should stop trying to be a nation of homeowners – Via Boston Globe – IN THE SOUL-SEARCHING sparked by the financial meltdown, Americans have started to look askance at some of the habits and policies that had come to define our country. Excessive consumption and living on credit are no longer seen as acceptable, let alone possible. “Deregulation” is suddenly a dirty word.Yet despite the housing crisis, one value, more deeply entrenched, remains sacrosanct: homeownership. Irresponsible mortgages have been universally condemned, but it is still widely assumed that we all aspire to own homes – and that we all should aspire to own homes. Homeowners are thought to be more engaged in their communities and to take better care of their houses and neighborhoods. On a nearly subconscious level, buying a home is a central part of the American dream. A picket fence may now be dispensable, but a house of one’s own is seen as the proper place to raise an American family – a prerequisite for stability, security, and adult life. And for decades – but increasingly under the Clinton and Bush administrations – federal policies have encouraged citizens to achieve this goal.
6. Congress Is The Real Systemic Risk – Via WSJ – After their experience with Fannie Mae and Freddie Mac, you’d think that Congress would no longer be interested in creating companies seen by the market as backed by the government. Yet that is exactly what the relevant congressional committees — the Senate Banking Committee and the House Financial Services Committee — are now considering. In the wake of the financial crisis, the idea rapidly gaining strength in Washington is to create a systemic risk regulator. The principal sponsor of the plan is Barney Frank, the chair of the House Financial Services Committee. A recent report by the Group of Thirty (a private sector organization of financial regulation specialists), written by a subcommittee headed by Paul Volcker, also endorsed the idea, as has the U.S. Chamber of Commerce and the Securities Industry Financial Markets Association.
7. Global imbalances and the crisis: A solution in search of a problem – Via Voxeu – This column argues that current account imbalances, easy US monetary policy, and financial innovation are not the causes to blame for the global crisis. It says that attacking Bretton Woods II as a major cause of the crisis is an attack on the world trading system and a sure way to metastasise the crisis in the global financial system into a crisis of the global economic system. The current crisis is likely to be one of the most costly in our history, and the desire to reform the system so that it will not happen again is overwhelming. Our fear is that almost all this effort will be misdirected and unnecessarily costly. Three important misconceptions could lead to a disastrous reform agenda:
8. James K. Galbraith Says: No Return To Normal Times:Why the economic crisis, and its solution,
are bigger than you think– Via Wash Monthly – Barack Obama’s presidency began in hope and goodwill, but its test will be its success or failure on the economics. Did the president and his team correctly diagnose the problem? Did they act with sufficient imagination and force? And did they prevail against the political obstacles—and not only that, but also against the procedures and the habits of thought to which official Washington is addicted? The president has an economic program. But there is, so far, no clear statement of the thinking behind that program, and there may not be one, until the first report of the new Council of Economic Advisers appears next year. We therefore resort to what we know about the economists: the chair of the National Economic Council, Lawrence Summers; the CEA chair, Christina Romer; the budget director, Peter Orszag; and their titular head, Treasury Secretary Timothy Geithner. This is plainly a capable, close-knit group, acting with energy and commitment. Deficiencies of their program cannot, therefore, be blamed on incompetence. Rather, if deficiencies exist, they probably result from their shared background and creed—in short, from the limitations of their ideas.
9. Cool Graphic: Unemployment, County by County – Via NYT – Our graphics team has updated the interactive map of county-by-county unemployment rates to reflect January conditions. Unemployment rates were generally higher across the country in January from December, and as a result, the graphics editors decided to add a new color category to the map key: one for counties with unemployment rates of 20 percent or higher. As of January, there were 19 such counties, with six of them in Michigan. In December, only nine counties had jobless rates this high. (Keep in mind, though, that the county-level unemployment numbers are unfortunately not adjusted for seasonality, so good month-over-month comparisons are hard.)
10. IMF says first global contraction in 60 years! – Via Mostly Economics – IMF Graphic…implies first global contraction since world war II. The forecasts have been revised severely for major economies. Towards the end, the note also has an excellent analysis on the fiscal policy during the crisis. It breaks the fiscal stimulus into two types- automatic and discretionary. It presents these figures for G-20 economies and shows the impact of stimulus on output, deficit, debt etc.
11. Read This If Your A Student Or Instructor-Outside Edge: An easy answer to grade inflation – Via FT – he news that Cambridge university is to demand A* rather than A grades at A-level has provoked yet another frenzy of concern about grade inflation – the name normally given to the process by which C grades become B grades and then A grades and, before you know it, all shall have prizes. Grade inflation, like real inflation, seems widespread, afflicting not just UK schools but the Ivy League. Stuart Rojstaczer, who maintains GradeInflation.com, reckons that grades at US private universities have risen from an average of 2.3 out of 4.0 in the 1930s to 3.3 today. That rate of inflation, by itself, would be manageable – 22-year-olds do not need to compare grades with 92-year-olds. (Grade hyperinflation would be another matter entirely: students would have to take examinations, be awarded marks and then apply for jobs or university places within a matter of hours, before their grades were devalued.)
12. Video: Housing Prices Heat Map 1975 – 2008 – Via Visualizing Econ
13. Complete back content for History of Political Economy now available online – Viaduke University Press- Is pleased to announce that more than forty years of content for History of Political Economy is now available online for the first time at hope.dukejournals.org. Individuals and institutions with current electronic subscriptions can access more than 200 issues–from the first issue of the journal, published in 1969, to the most recent issue–as part of their paid subscription. Subscribers who have already activated their online access can immediately view the newly posted back content; subscribers who have not yet activated their online access can find instructions on how to do so at dukejournals.org/subscriptions.
14. SSRN-Fair Disclosure and Investor Asymmetric Awareness in Stock Markets by Zhen Liu – Via Finance Professor – This one needs to be sold just a little, but then is a really cool insight. It deals with Reg FD. The “if I tell anyone, I have to tell everyone” rule. But first imagine you are a student in a class that is reviewing for a test. You are aware of a great way to ask a question for the test, but are a bit unclear about it. However, you know you are ahead of the rest of the class on the topic and doubt the rest of the class has even considered it (so in effect you asking the teacher would be also ‘tipping them off’). What do you do? A. Ask the teacher and while gaining total information, lose some of your competitive advantage. B. Sit there quietly so as not to tip off the rest of the class and then research it more on your own. If you chose B, you will totally understand this next paper!
15. Graphic: Green Phosphor: Integrating Complex Datasets with 3D Virtual Worlds – Via Information Aesthetics -Green Phosphor [greenphosphor.com] aims to helps businesses obtain the inherent value from 3D virtual worlds by integrating complex datasets with 3D virtual world platforms. Ultimately, the combination of data visualizations and users within virtual worlds should enable geographically dispersed teams to analyze collaboratively, or present findings and insights in new compelling and interactive ways. The developers seem to be inspired by William Gibson’s original description of “cyberspace” in the book “Neuromancer”, as they proudly state “Data comes alive in this world, it is like we are exploring a cityscape.” Microsoft Excel spreadsheets can be uploaded via a web interface. A public demo, called Second Life Glasshouse, is currently available for online perusal. According to this Powerpoint presentation, in the near future, the virtual world will be able to source data from IBM Many Eyes, Swivel or the UN Database. If you want to spare yourself downloading the demo, there is always a promotional video below.
16. Graphic: Coming and Going: State and Regional U.S. Migration Flows – Via Information Aesthetics – “Who Moves? Who Stays Put? Where’s Home?” [pewsocialtrends.org] is a set of geographical data visualizations that display patterns of domestic migration, that is movement of people among the nation’s regions and states. They show gains and losses only from people who move from one state to another. The maps use estimates from the American Community Survey for 2005-2007, and from the American census from the 1980, 1990 and 2000 census. These maps seem unique in their neat design and minimal but effective use of animation and stylized graphics. Arrows “flow” from one side to another. The thicknesses of the arrows reflect the size of the flows. Nicely ordered data simply adapts while hovering the mouse. 2 simple columns of ranked “magnet” and “sticky” states invites for exploration.
17. HR 1586: Not a good tax clawback – Via Interfluidity – The most troubling thing about trying to tax back jackpots paid by firms that are now on public assistance is that an effective measure would have to apply retrospectively. That is, the people who are responsible for the terrible decisions made at systemically important financial institutions have already been handsomely paid for their mistakes. Nearly all of them were paid well before December 31, 2008. A measure that only interferes with current and future pay would simply teach the next generation of “rational agents” that if they cash out fast and early, nothing can be done to them. That was precisely what the current crop of malefactors expected. The whole point of a tax clawback would be to violate that expectation, and to eliminate it going forward.
18. Video: Krugman at the 2009 Forum on the Future of Agriculture – Via Calculated Risk –
19. AIG Bailout: Where $173 billion Went – Via Flowing Data – Nicolas Rapp and Damiko Morris of Associated Press delve into the AIG bailout. Six months ago, AIG received $173 billion from the government. They have about $50 billion left while the rest has gone to bonds, securities, credit default swap, and some other stuff. I wonder where the other $50 billion will go.
20.Which Hedge Funds Are Collecting Under the AIG Bailout? – Via Pro Publica – Hedge funds are the hidden recipients of the taxpayer dollars flowing through AIG. The unregulated and exclusive trading houses bet against the housing market , reaping billions as that market tanked. But because they did the deals through the banks, there is still almost no transparency about which funds were involved, or how much money they could receive.
21. How we perceive others influences our sense of touch – Via Neuro Philosophy – The way we perceive other people has a big influence on how we interact with them. For example, attractive people are more likely to be perceived as talented than less attractive people, and this so-called “halo effect” is often reflected in our behaviour towards them. Similarly, we tend to favour people perceived to be like us over people who are perceived to be different (“in-group bias”).It turns out that the way we perceive others can also influence our own sense of touch. In a new study published in the open access journal PLoS One, researchers from the University of Bologna report that looking at photos of faces being touched strongly enhances the perception of touch on the observer’s face when the photos are of people who belong the same ethnic or political group
22. Are We Losing Our Memory? – Via Long Now Blog – The solid line–representing the life-expectancy in years of each recording medium–declines through the years. Tim O’Reilly pointed me to this digital loss piece in Lost Magazine by Alexander Stille. And Paul Saffo sent me the referred to Yale article AS WELL AS this amazing update on the recovery NASAs moon exploration photos. Here is an excerpt from the Stille article: In fact, there appears to be a direct relationship between the newness of technology and its fragility. A librarian at Yale University, Paul Conway, has created a graph going back to ancient Mesopotamia that shows that while the quantity of information being saved has increased exponentially, the durability of media has decreased almost as dramatically.
23.Eidetic Memory: Is It Real? – Via Hubpages – We have all heard stories about people who have an eidetic memory (known more commonly as a photographic memory). These are people who remember extreme details of something even if they have only looked at it for a short period of time, read it through once or experienced it only briefly. Is it true that these people exist? There is a lot of controversy around the eidetic memory. Some people say that the photographic memory is entirely a myth. They believe that those people who claim to have an eidetic memory actually simply have a close attention to detail, an ability to recall things more vividly than others and a set of tricks that increases their ability to remember things. Others insist that there is such a thing as the photographic memory – that they or someone they know is capable of looking at something for just a short period of time and memorizing in such close detail that it is as if their brain has taken a photograph of it which they can then recall at will.
Relevant to Eidetic Memory: Video:The Real Rain Man (On the Most popular Savant Kim ) or Watch below