Weekly Roundup 35: A Curated Linkfest For The Smartest People On The Web

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-Miguel Barbosa
Founder Of Simoleon Sense

Special Feature: USAspending.gov: Where Americans Can See where their Money Goes Via Infosthetics – USAspending.gov is a new US governmental website designed in accordance to the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act): it is a single searchable website, accessible by the public for free that includes for each Federal award:

1. the name of the entity receiving the award;
2. the amount of the award;
3. information on the award including transaction type, funding agency, etc;
4. the location of the entity receiving the award;
5. a unique identifier of the entity receiving the award.

Special Feature: What Did Einstein Know, And When Did He Know It? – Via Newsweek – On July 22 the Einstein Papers Project, located at the California Institute of Technology in Pasadena, will release the 12th volume of letters written or received by Albert Einstein—791 of them—plus transcripts of several notable lectures and interviews the physicist gave, covering the year 1921. It was a momentous 12 months. You might think there are no new revelations to be made about him, but for Einstein groupies the current volume addresses at least one key question: what did Einstein know about an 1887 experiment that discovered that the speed of light is invariant, regardless of the observer’s speed or direction of motion—an idea that forms the core of special relativity and that Einstein did not mention when he laid out the theory of special relativity in a 1905 paper?

Feature: James Chanos – Why the SEC should not further restrain short selling – Via Harvard Law School – The hedge fund coalition that I chair, the Coalition of Private Investment Companies (CPIC), recently submitted a comment letter to the Securities and Exchange Commission (SEC) in which we laid out our case for why the Commission should drop proposals to further restrain short selling. Under consideration by the regulator is a series of proposals that range from a “national bid test” to “circuit breakers,” which, if triggered, halt short selling transactions.

Feature: People Sometimes Seek The Truth, But Most Prefer Like-minded Views– Via ScienceDaily — We swim in a sea of information, but filter out most of what we see and hear. A new analysis of data from dozens of studies sheds new light on how we choose what we do and do not hear. The study found that while people tend to avoid information that contradicts what they already think or believe, certain factors can cause them to seek out, or at least consider, other points of view.

Feature: Depression may be linked to how willing someone is to give up his goals – Via Economist – Dr Nesse’s hypothesis is that, as pain stops you doing damaging physical things, so low mood stops you doing damaging mental ones—in particular, pursuing unreachable goals. Pursuing such goals is a waste of energy and resources. Therefore, he argues, there is likely to be an evolved mechanism that identifies certain goals as unattainable and inhibits their pursuit—and he believes that low mood is at least part of that mechanism.

Feature: The Problem With Self-help Books: The Negative Side To Positive Self-statements – Via ScienceDaily — In times of doubt and uncertainty, many Americans turn to self-help books in search of encouragement, guidance and self-affirmation. The positive self-statements suggested in these books, such as “I am a lovable person” or “I will succeed,” are designed to lift a person’s low self-esteem and push them into positive action.

Feature:  Everything You Need to Know About Gold – It will come as no surprise to you for us to state that Gold is money. Why? because it fulfills, to an extent unmatched by any other physical commodity (Silver comes closest), all the pre-requisites of a money. It was rare and prized long before the concept of “money” was ever discovered. It has many other unique uses, and always has had. But for nearly three thousand years (since the first Gold coins were struck in Lydia in 700 BC) Gold’s primary utility has been recognized as a MEDIUM OF EXCHANGE. The history of Gold as money in modern coin form spans 2630 years, from 700 BC to about 1930 AD. The history of nothing but paper and base metal and silver coin in circulation spans about 40 years from 1930 to 1970. And the history of paper and base metal coin as “money”, with no connection to Gold (or silver) anywhere on earth also spans a period now approaching 40 years – from 1970 to date.

Feature: Infographic – Iraq Oil – Via Chart Porn – Interactive map showing the results of recent oil and gas partnerships/negotiations/auctions. I found the map of the different oil fields interesting – considering how many maps of Iraq we’ve seen in the past 5 years, this is the first time I’ve seen this info. Will be updated over time.

Feature:The Curse of the Talking Heads: Where’s Humility and a Sense of Fallibility – Via Britannica Blog – As we all take our daily dose of the ceaseless media-borne battle and prattle among liberals and conservatives and their several subsects (their labels beginning with “paleo-“ or “neo-“ or, more often, and depending on which media outlet you favor, some execration or profanity), a whiff of sanity becomes ever more a precious respite. One of the sanest men of the past century or so was Reinhold Niebuhr, who published a little book in 1952 called The Irony of American History. In a chapter titled “The Triumph of Experience Over Dogma,” he wrote this:

0. Why Asians Can’t Think (Outside the Box) – Via Alfin – The higher average intelligence of East Asians compared to Europeans is well documented. The question is: why do East Asians — despite their intelligence — lag behind Europeans in measures of creativity, particularly over the past millenium? Dennis Mangan recently looked at differences between thought styles of Asians and Europeans in this posting. Satoshi Kanazawa of the London School of Economics and Political Science provides the grist for discussion:

1. The Good News in Short Interest(s): – Via Science Daily – We study the information content in monthly short interest using NYSE-, AMEX-, and NASDAQ-listed stocks from 1988 to 2005. We show that stocks with relatively high short interest subsequently experience negative abnormal returns, but the effect can be transient and of debatable economic significance. In contrast, we find that relatively heavily traded stocks with low short interest experience both statistically and economically significant positive abnormal returns. These positive returns are often larger (in absolute value) than the negative returns observed for heavily shorted stocks. Because stocks with greater short interest are priced more accurately, our results suggest that short selling promotes market efficiency. However, we show that positive information associated with low short interest, which is publicly available, is only slowly incorporated into prices, which raises a broader market efficiency issue. Our results also cast doubt on existing theories of the impact of short sale constraints.

2.Video: The Second Law and Energy – Via MIT – This Nobel Prize-winning scientist admits to staying up late the night before his talk to bone up on thermodynamics. He puts his research to good use, discussing the history and application of the laws of thermodynamics, which have served as “the scientific foundation of how we harness energy, and the basis of the industrial revolution, the wealth of nations.” Taking Watt’s 1765 steam engine, Stephen Chu illustrates basic principles of thermodynamics — that energy is conserved, that you can do work from heat, especially when you maximize the difference in temperature in the system and minimize heat dissipation from friction. Chu offers another form of the laws: You can’t win; you can’t break even; and you can’t leave the game.

3. Video: Biological Principles of Swarm Intelligence Via Video Lects

4. Caveat Mortgagor – Via New Yorker – That’s typical of regulation in the U.S.: it often takes a public crisis for things to change. In 1906, Upton Sinclair’s exposé, in “The Jungle,” of grim conditions at meatpacking plants led directly to the Meat Inspection and the Pure Food and Drugs Acts. In the early sixties, news of birth defects caused by the drug thalidomide helped the passage of a bill requiring drug companies to prove the safety and efficacy of their products and to disclose potential side effects. And now the fallout from the credit bubble has led the Obama Administration to propose a Consumer Financial Protection Agency, to regulate financial products much the way the Consumer Product Safety Commission regulates bicycles and bedspreads.

5. The Dark Theorem Of Economics: The Resolution of many, if not all, “Paradoxes” in Economics (PDF)- Via Marginal Revolution – I begin by proving the “Dark Theorem of Economics,” from which it follows that the foundations of economic theory rely on the Axiom of Choice (AC). All current solution concepts in game theory also require the theorems implied by AC. In particular, lexicographic utility, lexicographic probability, the real line being well-ordered, and the existence of a universal space are all equivalent to AC; therefore any argument to disprove their existence must be false. Any proofs using properties that fail under AC must be redone. The concept of Nash Equilibrium becomes either a tautology (in the absence of AC) or violates rationality (in the presence of AC); we provide an example demonstrating this. Knowledge, Common Knowledge, Epistemics, Game Theory, and Macroeconomics (through the failure of Rational Expectations) must be rebuilt. Any economics …eld or concept re- lying on these must also be rebuilt. I begin this process with the defi…nition of “Fundamental Game.”

6. When Our Brain’s Short Circuit – Via NYT – Our political system sometimes produces such skewed results that it’s difficult not to blame bloviating politicians. But maybe the deeper problem lies in our brains. Evidence is accumulating that the human brain systematically misjudges certain kinds of risks. In effect, evolution has programmed us to be alert for snakes and enemies with clubs, but we aren’t well prepared to respond to dangers that require forethought.

7.Can the “Mimetic Effect” Explain Speculative Bubbles? – Via Mises.Org – For the enemies of freedom in general , and of the economy in particular, the recent crash has been the occasion to re-assert that markets in general, and financial ones in particular, are inherently unstable — and thus dangerous — because they are driven by irrational behaviors such as the “mimetic effect,” which, according to many experts and politicians, explains how Wall Street booms and then busts.

8. The Welfare Consequences of Monetary Policy (PDF) – Via San Francisco Fed – We explore the distortions in business cycle models arising from inefficiencies in price setting and in the search process matching firms to unemployed workers, and the implications of these distortions for monetary policy. To this end, we characterize the tax instruments that would implement the first best equilibrium allocations and then examine the trade-offs faced by monetary policy when these tax instruments are unavailable. Our findings are that the welfare cost of search inefficiency can be large, but the incentive for policy to deviate from the inefficient flexible-price allocation is in general small. Sizable welfare gains are available if the steady state of the economy is inefficient, and these gains do not depend on the existence of an inefficient dispersion of wages. Finally, the gains from deviating from price stability are larger in economies with more volatile labor flows, as in the U.S.

9. The geeks shall not inherit the earth (Via PDF)- Via The Price Of Everything – The brief of Eric Beinhocker‟s outstanding „The Origin of Wealth‟ (Random House, 2007) is to address the questions: what is wealth ? How is it created ? And how can we create more of it ? But it also, almost incidentally, explains how the current banking crisis happened. The answer comes on page 30, and the culprit is traditional economics, and more specifically, the French serial failure Léon Walras. Having been twice rejected from the École Polytechnique, Walras went on to fail as an engineer and then as a novelist. But his real legacy is the damage he wrought upon economics as a serious discipline. Living in an era of great scientific progress, Walras sought to bring to the study of economics some of the disciplines of mathematics and physics. But in doing so, and imposing equilibrium theory from physics onto economics, Walras vastly oversimplified economics‟ modelling of the real world.

10. Rush Of Blood To The Head: Anger Increases Blood Flow – Via ScienceDaily — Mental stress causes carotid artery dilation and increases brain blood flow. A series of ultrasound experiments also found that this dilatory reflex was absent in people with high blood pressure.

11. Marriage Begins To Stand Up For Itself Via TampaBay-  Despite strong social riptides working against it — the liberalization of divorce laws, the vanishing stigma of divorce, the continual online temptations of social sites like MySpace or Facebook — the marriage bond is far stronger in 21st century America than many may assume. Infidelity is one of the most common reasons cited by people who divorce. But surveys find the majority of people who discover a cheating spouse remain married to that person for years afterward. Many millions more shrug off, or work through, strong suspicions or evidence of infidelity. And recent trends in marriage suggest that the institution itself has become more resilient in recent years, not less so.

12. Take a break from being lazy – your health depends on it! – Via Obesity Panacea – Not that long ago, Travis posted a great discussion of a recent study by Peter Katzmarzyk (whose graduate course in health epidemiology Travis and I have both taken) and colleagues from Pennington Biomedical Research Center which showed that increased time spent sitting was associated with greater risk of death from all causes and cardiovascular diseases. The most interesting aspect of this finding was that sitting time predicted mortality even when obesity and physical activity levels were considered. Thus, as Travis then stated, “This suggests that all things being equal (body weight, physical activity levels, smoking, alcohol intake, age, and sex) the person who sits more is at a higher risk of death than the person who sits less.”

13. Freemium and Freeconomics – Via A VC – Now let’s talk about freeconomics. I don’t believe everything will be free on the Internet. There will be plenty of paid business models. For example, if you want to watch Major League Baseball games live over the Internet, you’ll pay for that. If you want to use services like the FT and the WSJ frequently (more than 10x per month), you’ll pay for that. If you want to watch HBO over the Internet, you’ll pay for that. If you want a Twitter desktop or mobile client, you might pay for that too.

14. Moral Sentiments in the Brain – Via Psychology Today – Adam Smith, the father of modern economics, is best known for the idea in his 1776 The Wealth of Nations that self-interested behavior leads to the best outcome for society as if through the working of an invisible hand. But Smith was an intellectual rock star before The Wealth of Nations. His 1759 book The Theory of Moral Sentiments catapulted him to fame by presenting what philosophers and theologians had always wanted: An explanation of good and evil.

15. Who Is Shaping Your Health Care Coverage? – Via Good – It’s these people. But who are they? That is what NPR wants to know. They have a photo taken at the Senate hearing where 22 senators were working through the new health care bill. It shows everyone in the audience—people with enough stake in this cause to sit through the laborious process. So, who are these people? Lobbyists, mostly, but lobbyists aren’t usually recognizable by face. So, NPR has asked us to help them figure out who they are.

16. How a Loophole Benefits General Electric in Bank Rescue Via Pro Publica – General Electric, the world’s largest industrial company, has quietly become the biggest beneficiary of one of the government’s key rescue programs for banks. At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government. The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

About Miguel Barbosa

I run this site.

05. July 2003 by Miguel Barbosa
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