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Q. What do economists and computers have in common ??
A. You need to punch information into both of them.
Most Important Articles Of The Week !!
Vegas casino develops technique for unobtrusive radiofrequency ablation of the amygdala! – via Neurocritic – What was the inspiration for such ground-breaking technology?1 The revelation that two rare individuals with bilateral lesions of the amygdala2 did not care about losing large sums of money in a gambling task (De Martino et al., 2010).
RegInfo.gov – a tool to track legislative progress - via Nudge Blog – The site’s launch coincides with Nudge co-author Cass Sunstein’s first public remarks since taking over the Office of Information and Regulatory Affairs (OIRA), the office in charge of reviewing, developing, and overseeing regulations across the federal government. Speaking at an American University law school conference, Sunstein emphasized that OIRA’s goal is to create regulatory policy for Humans, not Econs; “homo sapiens rather than homo economicus,” he explained.
Why Poker Players Wear Sunglasses: Your eyes betray the timing of your decisions – via Science Blogs – When it comes to making decisions, timing can be everything, but it is often beneficial to conceal the decision that has been made. Take a game of poker, for instance: during each round, the player has to decide whether to bet, raise the stakes, or fold, depending on the hand they have been dealt. A good player will have perfected his “poker face”, the blank expression which conceals the emotions he feels and the decisions he makes from the other players sitting at the table. Increasing numbers of researchers are using brain scanning techniques to perform what is commonly referred to as “mind reading”. Their efforts have had limited success, however, and our decisions are still private mental events which are inaccessible to others. Until now, it was unclear whether there are outwardly visible physiological responses associated with the decision-making process. But a new study now shows that dilation of the pupils can predict when a decision has been made before an individual voluntarily reports making the decision.
The education of Nathan Myhrvold – Via Information Processing – I came across this long 1998 interview with Nathan Myhrvold, which covers his childhood, education as a physicist, brief postdoc with Hawking, software startup and its acquisition by Microsoft, subsequent role there including the creation of Microsoft Research.
Video: Elizabeth Warren On Commercial Real Estate - via Nick Gogerty – This is a summary of an excellent and clear report put out by Elizabeth Warren chair of the Congressional oversight panel. Warren is a refreshingly honest and clear voice among the politicking, greed and fear mongering that surrounds this historically defining issue. The report is a 190 page turner for me (under employed hedgie / consultant).
Mapping America’s Eating Habits – via Good – What state spends the most on fast food? Or drinks the most soda? Or eats its vegetables? Check out this fun set of maps from the Daily Yonder that show how our diets differ by state and county.
Miguel’s Weekly Favorites
Investing: Getting a grip on emotions - via FInance Professor – “Here’s a tip someone passed along during the financial crisis: If you find that emotions are taking over your investing decisions, deliberately enter the wrong password three times on your online brokerage account. That will block your access, and you’ll only go to the trouble of unlocking your account if you’re really, really sure you want to buy or sell something.
Wanna make a bet that women gamble? - via PhysOrg – Typical Australian gamblers are no longer just men playing poker, with more women becoming addicted, isolated and even suicidal, a researcher from The University of Queensland has warned.
Is Neuro-Linguistic Programming:Cargo Cult Psychology? - via Jarhe – NLP is a popular form of inter-personal skill and communication training. Originating in the 1970s, the technique made specific claims about the ways in which individuals processed the world about them, and quickly established itself, not only as an aid to communication, but as a form of psychotherapy in its own right. Today, NLP is big business with large numbers of training courses, personal development programmes, therapeutic and educational interventions purporting to be based on the principles of NLP. This paper explores what NLP is, the evidence for it, and issues related to its use. It concludes that after three decades, there is still no credible theoretical basis for NLP, researchers having failed to establish any evidence for its efficacy that is not anecdotal.
Happiness Is … Looking Forward to Your Vacation - via Science Daily – It takes more than a vacation to make people happy. Indeed, vacationers tend to be happier than non-vacationers in the lead up to their break, but once they are back, there is very little difference between the two groups’ levels of happiness.
Slot-machine gamblers are hard to pin down - via Guardian – It’s hard to get good payoffs from slot machines, yes. But it’s also hard to get good information from slot-machine gamblers, and that made things awkward for psychologists Mark Griffiths, of Nottingham Trent University, and Jonathan Parke, of Salford University. They explained how, in a monograph called Slot Machine Gamblers – Why Are They So Hard to Study?
West Brain, East Brain: What a difference culture makes. - via Newsweek – By now, it should come as no surprise when scientists discover yet another case of experience changing the brain. From the sensory information we absorb to the movements we make, our lives leave footprints on the bumps and fissures of our cortex, so much so that experiences can alter “hard-wired” brain structures. Through rehab, stroke patients can coax a region of the motor cortex on the opposite side of the damaged region to pinch-hit, restoring lost mobility; volunteers who are blindfolded for just five days can reprogram their visual cortex to process sound and touch.
Exclusive Features (The Must Reads)
From shame to game in one hundred years: An economic model of the rise in premarital sex and its de-stigmatisation - via Voxeu – Attitudes to sex have changed dramatically over the last hundred years. This column presents a model where socialisation – the passing on of norms and ideologies by parents and institutions such as the church or state – is determined by the technological environment in which people live. Contraception has reduced the chance of unwanted pregnancies from premarital sex, and this in turn has changed social attitudes.
Wall Street’s Bailout Hustle - Via Matt Taibbi – Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash
The Dawn of ‘Neurocapitalism’ - via Nytimes – Today’s idea: We’re becoming a “neurocapitalist” world, an essay says. The demands of performance-driven, self-enhancing societies will expand markets for neuro-psychotropic drugs beyond those for depression, dementia and attention deficit disorder. And they will cost our health care systems dearly.
The Brainy Benefits of Being Fit - Via Good – Tonight, when you’re watching the ladies zip around the short track in Vancouver, some history to keep in mind. In the 1970s, Title IX allowed for greater numbers of high school and college-aged women to participate in sports. Six years after it was enacted, “the percentage of girls playing team sports had jumped sixfold, to 25 percent from about 4 percent,” reports today’s New York Times.
Imaginary Crime Rates - Via Boston.com – In 2009, crime went down. In fact it’s been going down for a decade. But more and more Americans believe it’s getting worse. Why do we refuse to believe the good news?
Currencies: Redemption or abstinence? – via Voxeu – Is “original sin”, a situation in which the domestic currency is not used to borrow abroad or to borrow long-term even domestically, no longer a problem? This column argues that, while original sin has diminished and countries are making greater use of their domestic bond market, foreign currency debt is still too risky to be sensible.
A midday nap markedly boosts the brain’s learning capacity – via Eureka alret – If you see a student dozing in the library or a co-worker catching 40 winks in her cubicle, don’t roll your eyes. New research from the University of California, Berkeley, shows that an hour’s nap can dramatically boost and restore your brain power. Indeed, the findings suggest that a biphasic sleep schedule not only refreshes the mind, but can make you smarter.
Finance & Investing
Tea Party U.S.A.: It’s Still the Economy, Stupid! - Via New Yorker – In the wake of yesterday’s fascinating report in the Times about sixty-something Tea Party activists bracing for a violent counter-revolution, several people have asked me why Americans are so angry. I am tempted to say that that is what age and a steady diet of Fox News does to people, but that can’t be the full story. (Roger Ailes and his gang have been on air since 1996.)
James Galbraith – We need jobs, not deficit cuts - via Guardian – Listen to Keynes and ignore those behind all the noise about deficits, who are simply looking to profit from private debt
Transactions Costs and Beating the Market - via Damodaran – One of my books, Investment Fables, is directed at answering one of the most puzzling questions in investments: How is that there seem to be so many ways to beat the market on paper but that so few money managers seem to do it in practice? A key reason, in my view, is that transactions costs have a much greater impact on returns than we realize.
Watsa’s Fairfax Agrees to Buy Insurer Zenith for $1.3 Billion - via Street Capitalist – When I saw the 13F for Fairfax Financial Holdings (TSE:FFH) come out, one of the things I wondered was when Prem Watsa would do another acquisition. With Fairfax’s success over the last few years and good financial shape, I thought the company would be poised for an acquisition. Watsa has publicly said that they are not interested in straying too far out of the insurance business when it comes to acquisitions. They don’t want to build another Berkshire Hathaway
Brookfield Asset Management (BAM) – Q4 2009 Letter To Shareholders - via Above Average odds – AAOI portfolio holding Brookfield Asset Management’s latest letter to shareholders is a worthwhile read (as usual). The letter discusses BAM’s (and fellow AAOI holding BIP’s) newly acquired assets from Babcock & Brown, a brief mention of their purchase of General Growth’s debt, and their thoughts on the past, present, and future for Brookfields shareholder’s. Enjoy!
Taking the ‘R’ out of BRIC: How the Economic Downturn Exposed Russia’s Weaknesses – Via Wharton – Last June, when Russia’s president, Dmitry Medvedev, gathered fellow BRIC heads of state — Brazil’s President Luiz Inácio Lula da Silva, India’s Prime Minister Manmohan Singh and China’s President Hu Jintao — in the central Russian city of Yekaterinburg for the group’s first-ever leaders summit, he called for those present to “create the conditions for a fairer world order … a multi-polar world order.”
‘Main Street’ economic conditions misread by GDP - via PHys Org – Traditional gauges of economic activity severely overstate the standard of living as experienced on ‘Main Street,’ say University of Maryland researchers, who have worked with their state officials to apply a more accurate and greener index.
In Defense of Much, But Not All, Financial Innovation - via Brookings – After decades of being celebrated as one of the hallmarks and virtues of American-style capitalism, “financial innovation” has come onto hard times. Soon after the financial crisis began in 2007 and 2008, certain instruments of recent high finance – the collateralized debt obligation (CDO) and the credit default swap (CDS), as leading examples – were blamed by the media, the public, many policymakers, and even by some top economists for nearly bringing the U.S. and global financial systems and their economies to their knees. It didn’t take long for financial innovation more broadly to be condemned.
How a New Jobless Era Will Transform America - via Huffington Post – The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.
Why Do Foreign Firms Leave U.S. Equity Markets? – via Harvard law – In our paper, which is forthcoming in the Journal of Finance, we analyze a sample of firms that voluntarily deregister from the SEC and leave the U.S. equity markets over the period from 2002 through 2008. Because it was extremely difficult to deregister before March 21, 2007 when the SEC adopted its new Exchange Act Rule 12h-6, foreign firms that wished to deregister most likely did not do so because they were unable to meet the necessary requirements. When Rule 12h-6 came into effect, deregistration became substantially easier and the change in the rules was followed by a large spike in the number of deregistrations. We investigate why foreign firms deregister, how the Rule change affected firms’ deregistration decisions, and what the economic consequences are of the decisions to deregister.
Videos & Media
Digital, Life, Design 2010 Conference on Disruptive Technology - Via Fora.tv – In a high-level session, four disruptive entrepreneurs discuss what disruption is all about: Mitchell Baker (Mozilla), Jimmy Wales (Wikipedia), Niklas Zennstrom (Atomico) and – also moderating the discussion – Yossi Vardi (DLD Co-Chairman) all have created organizations or products that disrupted their industries. It turns out there are a few things all of them have in common: Serving a huge user base with a very small organization; getting the users actively involved in the main business of your company; and an open mind to collaboration and partnership over competition.
The Placebo Effect Explained in a video - via Rothman -
Full Digital Reconstructions of Brains – Via BIL – The Knife Edge Scanning Microscope (KESM) is a tool that allows high-throughput digital microscopy. It can take an entire mouse brain (or human tumor) and digitize it at a sub-micron level. Originally developed for analyzing long neural paths, it’s also excellent at tracing microvasculature in a sample. This technology has been under development for 10 years at Texas A&M, and is now being commercialized by Todd Huffman and his company, 3Scan, for many different industries including cancer research (angiogenesis inhibitors).
The Role of Information Technology in Improving Transit Systems - via MIT World – “Punch brothers! Punch with care! Punch in the presence of the passenjare!…” This ditty about tram car ticketing made famous by Mark Twain might spring to mind during Nigel Wilson’s talk. Technology unimaginable in Twain’s day is spurring a global shift in urban transit, Wilson says, from manual to automatic systems. Ticket punching by conductors has given way to fare cards swiped through machines — not to mention real-time GPS tracking of trains and buses, and network monitoring via computers. As part of MIT’s Transit Research Program, Wilson and colleagues have been taking advantage of a trove of data resulting from this digital transformation, working in London, Chicago, Puerto Rico, and Boston on ways to improve urban public transport.
Why So Cynical?: Asymmetric Feedback Underlies Misguided Skepticism Regarding the Trustworthiness of Others - via APS – People tend to grossly underestimate the trustworthiness of other people. We tested whether this cynicism grows out of an asymmetry in the feedback people receive when they decide to trust others. When people trust others, they painfully learn when other people prove to be untrustworthy; however, when people refrain from trusting others, they fail to learn of instances when the other person would have honored their trust. Participants saw short videos of other people and had to decide whether to trust each person in an economic game. Participants overall underestimated the trustworthiness of the people they viewed, regardless of whether they were given financial incentives to provide accurate estimates. However, people who received symmetric feedback about the trustworthiness of others (i.e., who received feedback regardless of their own decision to trust) exhibited reduced cynicism relative to those who received no feedback or asymmetric feedback (i.e., who received feedback only after they trusted the other person).
Other Very Interesting Articles
Real Housewives of Gomorrah! - Via Boston.com – The phenomenon of reality television, in which ordinary people are shown in unscripted dramatic situations, is generally assumed to have begun in earnest in the late 1990s. However, a deluge of recent findings is forcing scholars in the field of Reality Studies to push their timelines back hundreds if not thousands of years. Dr. Arvid Jokum of Helsinki University has recently published a groundbreaking work entitled “Virkeligheten Ytelse Gjennom det Historie” (“Reality Performance through History”) that traces the historical antecedents of today’s modern reality television shows. The evidence in Jokum’s account is convincing, from his unique interpretation of hieroglyphics (Jokum asserts they are actually show reels) to his painstaking examination of the architectural record (he theorizes that the numerous bedrooms, ornate finishings, and exaggerated size of Versailles indicate it was clearly built as a set for a “Real World”-like ensemble show). Below, some of the ancient programming he has discovered:
Mind Power: Harvard professor Ellen Langer’s research transformed psychology. Now she wants it to transform you. - Via Boston.com – Langer is a famous psychologist poised to get much more famous, but not in the ways most researchers do. She is best known for two things: her concept of mindlessness – the idea that much of what we believe to be rational thought is in fact just our brains on autopilot – and her concept of mindfulness, the idea that simply paying attention to our everyday lives can make us happier and healthier. She was Harvard’s first tenured woman professor of psychology, and her discoveries helped trigger, among other things, the burgeoning positive-psychology movement. Her 1989 book, “Mindfulness,” was an international bestseller, and she remains in high demand as a speaker everywhere from New York’s 92d Street Y to the leadership guru Tony Robbins’s Fiji resort. And now a movie about her life is in development with Jennifer Aniston signed on to star as Langer.
Overruled: What language experts don’t care about - via Boston.com – If you care about how to use language – and if you’re reading this column, it’s a safe bet that you do – then you care about language rules. There are basic rules that everyone agrees with – for example, that the word moon has exactly two o’s, no more and no less – and then there are slightly more arcane rules (such as when to use “such as” and when to use “like”) that are subtle signals to other literate people that you, too, know your way around what’s “right.”
Can You Trust a Facebook Profile? – via Psyblog – Do people display their actual or idealised personalities on social networking sites?
How to Change A Skin Cell Into A Nerve Cell or Cellular Anarchy & The Great Leap Sideways - via H+ – Eyeballs just don’t become toenails — even though the same genome sits in the nucleus of every cell. The difference is in the parts of the genome that are expressed — a cell’s identity is determined by the specific genes that are active within that cell. The differentiation of a cell, and a cell’s commitment to become a particular type, have been long considered irreversible processes.