Caveat Bettor

This isn't just a smoking gun

2009-11-25T16:47:00.002-05:00

it's a siege cannon with the barrel still hot:

From the CRU code file osborn-tree6/briffa_sep98_d.pro , used to prepare a graph purported to be of Northern Hemisphere temperatures and reconstructions.
;
; Apply a VERY ARTIFICAL correction for decline!!
;
yrloc=[1400,findgen(19)*5.+1904]
valadj=[0.,0.,0.,0.,0.,-0.1,-0.25,-0.3,0.,- 0.1,0.3,0.8,1.2,1.7,2.5,2.6,2.6,$
2.6,2.6,2.6]*0.75 ; fudge factor
if n_elements(yrloc) ne n_elements(valadj) then message,’Oooops!’
;
yearlyadj=interpol(valadj,yrloc,timey)
This, people, is blatant data-cooking, with no pretense otherwise. It flattens a period of warm temperatures in the 1940s -- see those negative coefficients? Then, later on, it applies a positive multiplier so you get a nice dramatic hockey stick at the end of the century.

Via Donald Sensing

Hide the decline (hide the decline, hide the decline)

2009-11-25T15:07:00.000-05:00

Via Don Surber

Robin Hanson on the folly of manipulating prediction markets

2009-11-25T14:26:00.000-05:00

Maybe we might, you know, actually try something before we conclude it doesn’t work.

If Al Gore likes it, I must worry

2009-11-25T13:18:00.008-05:00

People think about geothermal energy - when they think about it at all - in terms of the hot water bubbling up in some places, but two kilometers or so down in most places there are these incredibly hot rocks, 'cause the interior of the earth is extremely hot, several million degrees, and the crust of the earth is hot ...--Al Gore

Now the actual temperature of the earth's center ranges in the thousands of degrees (Celsius and Farenheit).

I'm not sure that geothermal energy is going to cool the surface temperatures of the earth. Let's say you've gone ice fishing, and set up your tent and sleeping bag for the night. The air in the tent is like the earth's atmosphere. The heat in the sleeping bag is like the hot interior of the earth. Now let's say you take some straws and stick them through various points of the sleeping bag, so you can harness the heat differential to generate power.

How does this make the air in the tent cooler? Not that global cooling isn't a real concern, as I pointed out a couple of years ago.

This reminds me of those 2007 fantasies of ethanol. And also Gore's footprint.

Quotes of the day

2009-11-25T11:43:00.010-05:00

Every generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it.--George Orwell

Apparently counting daisies while soldiers are pushing them up is deemed politically awkward.--Jules Crittenden

To have gone out in the early days and talked to people in such candid and stark terms about the advantages of free markets must have been difficult. I can just hear Rose [Friedman] encouraging Milton. Others might have said: "Do you have to stick your neck out so much, Milton? Can't you be more mainstream? What about our family?" And perhaps it was difficult with a young family. To us this is the inspiration from Rose that we will never forget. She was gregarious, strong, and loving.--John Taylor

Math skills are more the result of drill, whereas you have to learn how to love to read and much of that happens within the family, not at school. Math is therefore easier to "teach by central planning," so to speak.--Tyler Cowen

Macroeconomists do not have enough data to verify hypotheses. Climate science has even less data. Therefore, climate science is even less reliable.--Arnold Kling

I just read [Andrew Revkin's] blog and article about the CRU attack. I do entirely understand that in your role as a reporter you can’t editorialize and pass judgment about what happens in the world, but you do edge into value judgments in some of your blog pieces and so I found the general lack of indignation in your piece rather disconcerting. After all, this is a criminal act of vandalism and of harassment of a group of scientists that are only going about their business doing science.--Raymond Pierrehumbert

It is more in disappointment than anger that I am writing to you now. I am addressing this to you rather than your journalist-coauthor because one has become all too accustomed to tendentious screeds from media personalities (think Glenn Beck) with a reckless disregard for the truth.--Raymond Pierrehumbert, to Steve Levitt

... in the context of the political battle over climate change, Pierrehumbert is making the wrong point. Who cares? The only meaningful response to this crisis is to get out in front, explain the context of each and every e-mail, and address forthrightly whatever improprieties may or may not exist. ... My own faith in climate science hasn't been shaken by this episode, but I'm pretty dumfounded at behavior that hands what Pierrehumbert calls the "inactivists" -- many of whom are working as fronts for the energy industry -- a big stick to clobber me with. Please don't hide behind invasion of privacy. It's only going to get hotter from here on out.--Andrew Leonard

Some have noted, and I agree that it’s a misnomer to call this “ClimateGate.” In addition to the fact that simply adding “Gate” to a scandal is so late twentieth century, calling it a “Gate” would imply that it’s something that the media will go into a frenzy over, because it’s a scandal about something politically incorrect (e.g., Nixon). No, a better name for it (again, not original with me — I think it showed up in comments at one of the PJM pieces) is “Climaquiddick.” In other words, expect the media to try to whitewash and minimize it.--Rand Simberg

The urge to save humanity is almost always a false front for the urge to rule.--H. L. Mencken

I'm the George W. Bush of love: I may not have anything to show for myself now, but history will prove me a hero.--John Mayer

I just realized that rampant speculation in gold fuels war

2009-11-25T11:07:00.002-05:00

in Africa, to be exact.

NASA being sued for failure to provide global warming data

2009-11-24T20:26:00.004-05:00

under the Freedom of Information Act (via Glenn Reynolds).

This is the same data source used for Intrade (real money) and for the Global Warming Exchange (play money) global warming futures.

Also, via Glenn, it looks like the software for processing the temperature data sets is pretty ugly:

One programmer highlighted the error of relying on computer code that, if it generates an error message, continues as if nothing untoward ever occurred. Another debugged the code by pointing out why the output of a calculation that should always generate a positive number was incorrectly generating a negative one. A third concluded: "I feel for this guy. He's obviously spent years trying to get data from undocumented and completely messy sources."

Programmer-written comments inserted into CRU's Fortran code have drawn fire as well. The file briffa_sep98_d.pro says: "Apply a VERY ARTIFICAL correction for decline!!" and "APPLY ARTIFICIAL CORRECTION." Another, quantify_tsdcal.pro, says: "Low pass filtering at century and longer time scales never gets rid of the trend - so eventually I start to scale down the 120-yr low pass time series to mimic the effect of removing/adding longer time scales!"

UPDATE: Megan McArdle's take:

The IPCC report, which is the most widely relied upon in policy circles, uses this model to estimate the costs of global warming. If those costs are unreliable, then any cost-benefit analysis is totally worthless. Obviously, this also casts their reluctance to conform with FOI requests in a slightly different light.

Quotes of the day

2009-11-24T09:16:00.009-05:00

Today, there is a name for the political doctrine that rejoices in scarcity of everything except government. The name is environmentalism. --George Will

I believe that the not-always-swift American voter in fact understands high deficits -- correctly -- in this light. They don't hold theories about "crowding out," rather they sense something in the house must be rotten. And so they rail against deficits, as do some of their elected representatives. It's a more justified reaction than the pure economics alone can illuminate. When water regularly overflows from your toilet, you want the toilet fixed, whether or not the water is doing harm.--Tyler Cowen
If Timothy Geithner were a Broadway show, the producers would shut it down.--Kevin Hassett
It's a good thing that Congress doesn't vote on whether to accept the logic of gravity.--Arnold Kling
I have to say, I'm woefully underimpressed with the argument that I am now hearing to the effect that "Medicare will bankrupt America anyway if we can't cut health care costs, so we might as well do health care reform." Anyone who has dated a manic-depressive has heard some version of this argument. "I can barely make ends meet now, so I might as well use my tax refund check to buy a boat! After all, if I can't figure out a way to fix my budget, I'm going to go bankrupt anyway." And anyone who has dated a manic-depressive knows where this ends.--Megan McArdle

But as Gregory Zuckerman details in The Greatest Trade Ever, Paulson remade his personality. He became a grump. ... Then we all know what happened. Paulson made a killing in the collapse of the housing market. While the rest of us were worried for our jobs, homes, and the future of the republic, he racked up a $20 billion profit over the last two years. And if new research is correct, his irritability had everything to do with it. According to a just-published study, a bad mood can be a competitive advantage.--Hugo Lindgren

Because of guilt over colonialism and the ugly nationalisms that led to World War II, it argues, Europe let in millions of Muslim immigrants but skipped the hard task of integrating them — because that would be pressing Western values on them. The result of these good intentions was an increasingly "angry and alienated religious minority." And the irony here is that France's politically incorrect ban on veils in schools turned out to be "an enormous success," decreasing radicalism by pressuring Muslims to assimilate.--John Richardson

Some of those mentioned in the [hacked climate scientists'] emails have responded to our requests for comment by saying they must first chat with their lawyers. Others have offered legal threats and personal invective. Still others have said nothing at all. Those who have responded have insisted that the emails reveal nothing more than trivial data discrepancies and procedural debates. Yet all of these nonresponses manage to underscore what may be the most revealing truth: That these scientists feel the public doesn't have a right to know the basis for their climate-change predictions, even as their governments prepare staggeringly expensive legislation in response to them. --WSJ Editorial Board

Year after year, the evidence keeps mounting that most climate research now being funded is for the purpose of supporting the IPCC’s politics, not to find out how nature works. The ‘data spin’ is increasingly difficult to ignore or to explain away as just sloppy science.--Roy Spencer

Academia vs. Business

2009-11-23T17:12:00.002-05:00

Source here, of course.

White on white

2009-11-23T15:31:00.002-05:00

unfriendly fire:

MSNBC host Chris Matthews, MSNBC reporter Norah O’Donnell, and MSNBC guest Joan Walsh shamelessly played the race card against Sarah Palin and her book-buying audience last week.
...
Ahem. Check out the masthead of MSNBC TV, “The Place for Politics.”

And there's some unwhite on unwhite, too:

Leave it to Jesse to do his part to make sure no blacks wander off the white liberal plantation. Imagine that, the black skin the good Lord gave you isn’t good enough unless you buy into socialized medicine. What a complete joke.

Via William Jacobson.

Will Obama be more like Bush or Carter

2009-11-23T15:20:00.004-05:00

since being like Obama is not working so well.

Here's my Carter-Obama musings from Feb 2008. And my Dubya-Obama musings from Nov 2008.

Scarcity of gold bears

2009-11-23T14:42:00.006-05:00

I am slightly bearish on gold, and am constantly looking for less lukewarm sellers.

Eddy Elfenbein notes that Roubini is a gold bear, and Schiff is a super bull.

I think that the "smart money" is:

seeing dollar devaluation and projecting significant future inflation in dollar denominated assets
finding gold to be the best pitstop to exchange dollars
hoping that gold does not crash as fast as inflation explodes

It feels too risky for me to jump on the bandwagon. Plus, I just found out today that some gold ETFs are taxed as collectibles (28% long term cap gains) vs. 15% on financial assets.

Chart of the day: US share of world GDP surprisingly resilient

2009-11-23T13:57:00.002-05:00

Source here.

Vince Veneziani with a nice roundup on some of the biggest winning trades in the last century

2009-11-23T13:00:00.000-05:00

here.

Quotes of the day

2009-11-23T12:31:00.018-05:00

To repeat what others have said requires education; to challenge it requires brains--Mary Pettibone Poole

If it is the thought that counts, a first step towards a happier Christmas is to spend less, and think more.--Tim Harford

I would point out that in an affluent society, there is a lot of consumption that is deferrable. If everyone scans the headlines and sees "Great Depression," that could very well cause a drop in consumption. And if everyone scans the headlines and sees "recovery," they might spend more.--Arnold Kling

We find that Protestantism increases contributions to the public good, and there is suggestive evidence that it increases reciprocity in the gift-exchange game—that is, the rate at which worker effort increases in response to higher wage offers by the manager. Catholicism decreases contributions to public goods, increases gift-exchange reciprocity, and decreases risk aversion. Judaism increases gift exchange reciprocity.--Daniel Benjamin, James Choi, and Geoffrey Fisher

More than two-thirds of illegal immigrants pay Social Security and income taxes.--Jeff Jacoby

The way Apple runs the App Store has harmed their reputation with programmers more than anything else they've ever done. Their reputation with programmers used to be great. It used to be the most common complaint you heard about Apple was that their fans admired them too uncritically. The App Store has changed that. Now a lot of programmers have started to see Apple as evil.--Paul Graham

If there is one thing that the case of the hacked climate change e-mails proves, it is that scientists are human. And humans do stupid things. Because no matter what the context or motivation, some e-mails should never be written.--Andrew Leonard

The documents appear to have been acquired illegally and contain all manner of private information and statements that were never intended for the public eye, so they won’t be posted here.--Andrew Revkin of the New York Times

You know, unless doing so would hurt national security, or something.--Glenn Reynolds

If those climatologists at CRU were in a position to actually cause the earth to get warmer, don't you think they would have done so? --Tom Smith

It takes about 200 years to get to a world where this is considered smart rather than shameful.--Russ Roberts

I’m just about ready to hit the road. [Kenneth] Feinberg stabbed me in the back.--Robert Benmosche, CEO of AIG

By all accounts, President Obama's visit to China last week was pretty much a failure on all the major issues, which include China's contributions to climate change, nuclear weapons, and various aspects of the world economy.--Gary Becker

“Freshwater” and “saltwater” macroeconomists came to a “brackish” compromise known as the New Neoclassical Synthesis. The New Keynesians adopted the dynamic stochastic general equilibrium (DSGE) framework pioneered by the New Classicals while the latter accepted the market “frictions” and capital market “imperfections” long insisted upon by the former. This New Synthesis, like the Old Synthesis of fifty years ago, postulates that the economy behaves like a stable general equilibrium system whose equilibrating properties are somewhat hampered by frictions. Economists of this persuasion are now struggling to explain that what has just happened is actually logically possible. But the recent crisis will not fit.--Axel Leijonhufvud

Sarah Palin's book launch drew more media attention than mine. She was irrepressible, notwithstanding David Brooks calling her a "joke." Of course, Brooks praised Timothy Geithner. It is pretty easy to predict which side of the Insider/Outsider debate Brooks will take. The Insiders were on the defensive this week. Is it a blip, or the start of a trend?--Arnold Kling

... it would seem that girls are equally prepared, if not more prepared (more AP math classes), than boys for the SAT math test, and yet boys outperform girls measured both by the difference in mean scores (35 point difference in favor of boys) and the over-representation of boys for scores on the high end (2.22 to 1 ratio for perfect scores), and these differences persist over time.--Mark Perry

Bill Easterly is too funny

2009-11-23T12:27:00.002-05:00

An expert commission of African leaders today announced their plan for comprehensive reform of music band U2. Saying that U2’s rock had lost touch with its African roots, the commission called for urgent measures to halt U2’s slide towards impending crisis.

“Our youth today are imperiled by low quality music,” said Commission chairman Nelson Mandela. “We will be lending African musicians to U2 to try to refurbish their sound to satisfy the urgent and growing needs for diversionary entertainment at a time of crisis in the global music and financial sectors.”

Funny, honest (if somewhat economically naive) send up of US-China relations

2009-11-23T07:34:00.008-05:00

China is not lending us money out of the goodness of its heart, or even because its making a bet on our debt--buying treasuries is the best way for China to maintain its artificially low yuan peg to our dollar, which requires making the dollars we send them disappear. If they didn't control the supply of dollars relative to the supply of yuan in this way, the yuan would appreciate relative to the dollar, and China's labor cost advantage relative to the US would erode, which would create even more stress in China's economy, which is struggling with more unemployment and wealth disparity than the U.S.

China does not want the proverbial Tea Party to rear its head. Think about that next time you hear about "all the tea in China".

UPDATE: Gary Becker has much more, and he is much smarter. The fact that his partner-in-blog disagrees gives me even more confidence in Becker's thesis.

Scientists covering up data that discredits global warming

2009-11-20T15:40:00.005-05:00

Via Chris Masse, Ed Morrisey reports:

Controversy has exploded onto the Internet after a major global-warming advocacy center in the UK had its e-mail system hacked and the data published on line.
...
One of the most damning e-mails published comes from Dr. Jones himself. In an e-mail from almost exactly ten years ago, Jones appears to discuss a method of overlaying data of temperature declines with repetitive, false data of higher temperatures:

From: Phil Jones
To: ray bradley ,mann@[snipped], mhughes@
[snipped]
Subject: Diagram for WMO Statement
Date: Tue, 16 Nov 1999 13:31:15 +0000
Cc: k.briffa@[snipped],t.osborn@[snipped]
Dear Ray, Mike and Malcolm,
Once Tim’s got a diagram here we’ll send that either later today or first thing tomorrow. I’ve just completed Mike’s Nature trick of adding in the real temps to each series for the last 20 years (ie from 1981 onwards) amd [sic] from1961 for Keith’s to hide the decline.

James Delingpole has a nice roundup.

Steve McIntyre has more details on Mike's Nature Trick.

I am picturing Karl saying to Thomas, "Check".

Chart of the day: Presidential approval

2009-11-20T14:05:00.001-05:00

Source here.

Hollywood: Too many artists and not enough Wall Street hustlers

2009-11-20T11:54:00.009-05:00

Until now:

... Hollywood has long bought much more than it sells. Every year, the six major studios shell out for hundreds, if not thousands, of pitches, scripts, and books, sometimes for millions of dollars a throw; on average, each studio will turn only eleven of those ideas into movies. The rest of all that hope and capital ends up lining shelves and clogging hard drives. "There's no other industry where that kind of waste would be acceptable," [Ryan] Kavanaugh says. "I'm not in this for the art, you know? I don't care about awards. I want to make money. I want to own a business."
...
You can't think of it as money," Kavanaugh says, kicking those blue Converse All-Stars up onto the table in front of him. "You have to think of it as math.
...
Before Relativity commits to financing a particular movie — either through its slate deals with Sony and Universal or on its own — it's fed into an elaborate Monte Carlo simulation, a risk-assessment algorithm normally used to evaluate financial instruments based on the past performance of similar products. Enough variables are included in the Monte Carlo for Wilson and his team to have reached the limits of their Excel's sixty-five thousand rows of data: principal actor, director, genre, budget, release date, rating, and so on. After running the movie through ten thousand combinations of variables (in marathon overnight sessions), the computers will churn out a few hundred pages that culminate in two critical numbers: the percentage of time the movie will be profitable, and the average profit for each profitable run. The computers will also calculate the best weekend for the movie to be released, whether Russell Crowe will earn his salary or Sam Worthington will be good enough, and the box-office effect of an R rating versus PG-13. But for Kavanaugh, those are secondary considerations: Unless the movie shows the distinct probability of a return — no one at Relativity will reveal the precise green-light figure, but it's something like 70 percent — the script gets shredded. "Everything has to run on the principle of profit," Kavanaugh says. "We'll never let creative decisions rule our business decisions. If it doesn't fit the model, it doesn't get done."
...
"Giving actors $20 million for a movie that loses money is like giving bonuses to the CEOs of bankrupt companies," Kavanaugh says.
...
Some in Hollywood — even more than some — see Kavanaugh as this town's latest false prophet and his talk of regression analysis as so much mathematical flimflam. ("All he's built is a house of cards," says one rival producer.) They read through his catalog of misses and mostly modest hits — in the normal studio equation, a multitude of sin is covered up by a single gigantic success — and wonder how he keeps the money flowing. Kavanaugh says his critics are missing the point. His system is designed to eliminate the dice rolls that made legends and goats of the old moguls — it's designed especially to eliminate the calamitous, crippling flop. "Volatility is a bad thing in any business," he says. "We're just not going to take big risks. That means we'll probably never hit a home run, because the model makes it hard for us to swing for the fences. We wouldn't have made The Matrix. But we wouldn't have made Waterworld, either."
...
The computers have told him again and again that love is an outlier. This time, Kavanaugh has chosen not to believe them.

Quotes of the day

2009-11-20T08:46:00.024-05:00

Men, it has been well said, think in herds; it will seem that they go mad in herds, while they only recover their senses slowly, and one by one.--Charles Mackay

I find it deliciously ironic that one of the top five results returned by Google for the search terms "corn stover removal soil fertility" turns out to be research paid for the company planning to do the removal.--Andrew Leonard

People seldom do what they believe in. They do what is convenient, then repent.--Bob Dylan

The beauty of errors of omission is that they they are largely undetectable by clients as long as they go unreported by managers. Because I believe that owning up to one's mistakes in a public fashion decreases the probability of those errors reoccurring, I do so here.--William Ackman

I love that as a six year old [my daughter] still believes in the concept of “too much” money. Those words are so foreign to me as an adult. There’s no such thing as “too much” money. That’s crazy talk. Have you ever heard someone at work say, “Yeah, my wife and I realized we have too much money so we’re trying to figure out how to do something with it before it does something with us.--Jon Acuff

Should Osama bin Laden be captured alive—and I imagine most Americans hope he won’t be captured alive. But if he is, it is ludicrous to suggest he should be tried in a Federal court on Center Street in Lower Manhattan.--Charles Schumer

On February 4, 2009, President Obama signed Public Law #111-3, the Children’s Health Insurance Program Reauthorization Act of 2009. §701 of this law increased tobacco taxes, effective April 1, 2009. Since most smokers have annual family income less than $250,000, this was a clear violation of the President’s pledge.--Keith Hennesey
As the dean of Harvard Medical School I am frequently asked to comment on the health-reform debate. I'd give it a failing grade. Instead of forthrightly dealing with the fundamental problems, discussion is dominated by rival factions struggling to enact or defeat President Barack Obama's agenda. The rhetoric on both sides is exaggerated and often deceptive. Those of us for whom the central issue is health—not politics—have been left in the lurch. And as controversy heads toward a conclusion in Washington, it appears that the people who favor the legislation are engaged in collective denial.--Jeffrey Flier
How much do you have to hate somebody to believe everlasting life is possible and not tell them that? I mean, if I believed, beyond the shadow of a doubt, that a truck was coming at you, and you didn’t believe that truck was bearing down on you, there is a certain point where I tackle you. And this is more important than that.--Penn Jillette
Aggregators, investment or otherwise, are not the cause of the downfall of traditional news gatherers like newspapers. They are simply a sign that people are hungry for information and analysis presented in an efficient manner. For better or worse, that instinct to seek out order in an increasingly complex world is here to stay.--Tadas Viskanta

... let's face it, the genre of the female political autobiography is itself in its infancy. It's like some 53rd state, housing at this moment in time only a handful of crude, wooden, lean-to outposts.--Sandra Tsing-Loh

In truth, we are forever innovating to stretch our resources. Transportation was one of the scarcest goods during the first half of America’s nineteenth century, but by the end of the century the railroads had made it so abundant that the face of America changed irreversibly. That could be said today about information. Innovation makes scarce goods abundant. This quest to do better, to go farther, to extend our reach is part of what makes us human. There is more to economics than the desire to consume and to avoid risk. ... Most observers now acknowledge that capitalism, even in the midst of the 1930s depression, has long been creating unprecedented, unimagined levels of productivity and wage rates—for the rest of the world as well as for the handful of capitalist economies themselves. Now, however, some philosophers and social critics are suggesting that even capitalism has outlived its usefulness—that pursuit of new goals requires another system. It must be clear by now that this analysis overlooks what has been the key dimension of capitalism from its first functioning early in the nineteenth century. This dimension is what capitalism’s dynamism offers to human experience and human benefit—the true moral dimension of economics, in other words. Well-functioning capitalism, where it is attainable, is of undimmed value because it allows human beings to realize their true nature as creators and innovators.--Edmund Phelps

Upon Singapore’s independence in 1965—three years after Jamaica’s own establishment as a nation—the two nations were about equal in wealth: the gross domestic product (in 2006 U.S. dollars) was $2,850 per person in Jamaica, slightly higher than Singapore’s $2,650. Both nations had a centrally located port, a tradition of British colonial rule, and governments with a strong capitalist orientation. (Jamaica, in addition, had plentiful natural resources and a robust tourist industry.) But four decades later, their standing was dramatically different: Singapore had climbed to a per capita GDP of $31,400 (2006 data, in current dollars), while Jamaica’s figure was only $4,800.--Josh Lerner

If the New England Patriots were allowed to spend $50 million more on players than any other team, they would go 15-1 or 16-0 every single year. And people would not stand for it. But in baseball, a great and dominant team might only win 95 out of 160, and it doesn’t seem so bad.--Joe Posnanski

One of my strongest beliefs about the financial crisis is that the narrative that we come to accept about it will matter much more than the crisis itself. I see a strong parallel between the narrative "TARP prevented a Great Depression" with the narrative "The New Deal ended the Great Depression." The latter narrative has very little economic support, even among economists who avidly support the New Deal. However, it is the dominant narrative because it supports progressive ideology. --Arnold Kling

So, phrasing it as "the top 5% of earners pay 60% of the taxes," while comparing apples to oranges, sounds a lot more "unfair" to the wealthy than "the group that earns 37% of the income pays roughly 60% of the taxes."--Kid Dynamite
In his classic book “Famine Crimes” Alex De Waal observes that NGOs make “habitual inflation of estimates of expected deaths.” De Waal notes that during the pre-Christmas prime fundraising season, ‘One million dead by Christmas’… has been heard every year since 1968 and has never been remotely close to the truth.” Put into the current mix a credulous Western media that is happy to check the box “Ethiopia = famine,” and is unable to handle subtleties like chronic food insecurity and chronic malnutrition vs. emergency famine. Between unreliable media, NGOs, and government, it is tragically difficult to know when tragedy is happening.--William Easterly

There's no doubt that erasing global inequality, which has been with us for millennia and has expanded to unprecedented levels over the past century and a half, won't be easy. But by accepting the role of failed governments and institutions in causing poverty, we have a fighting chance of reversing it.--Daron Acemoglu

Some people are calling what I did an act of civil disobedience. I don’t know much about that, but if civil is what the government is, then call my part savage disobedience.--Wayne Johnson
Most pundits, professional and amateur, consider a genius as someone who can effectively articulate one's platform more efficiently than themself. An idiot is someone who effectively articulates the other side.--Eric Falkenstein

Similar skill sets required for poker and trading on Wall Street

2009-11-20T08:06:00.003-05:00

Brandon Adams, a professor of behavioral finance at Harvard, says:

[Professional online poker players] essentially been the survivors in the system, a very difficult system where 95 percent of people lose money. Anyone smart enough and disciplined enough to survive that system is probably going to do very well in the trading world.

I used to reflect about gambling frequently at the onset of this blog, but have not done so as much. Here is the last substantive post from almost 2 years ago.

Quotes of the day

2009-11-19T16:21:00.008-05:00

[America has] the kind of culture that can tolerate rap music and extreme sports that can also create space for guys like Page and Brin and Google. That's one of our hidden strengths.--Paul Romer

... if an attractive woman tells you "You don't want to go out with me" do you believe her and act on that?--Megan McArdle

Palinoia: when you think people are out to get you, and then they do their best to justify your erroneous belief. --Megan McArdle

Americans aren’t going to fix our national financial problems until a lot more people decide to drop out of the “normal” competition to see who can borrow the most money in order to bid on a fixed number of homes in affluent school districts and places at selective colleges. You don’t need to be a Christian to look for a better way. Even an unbeliever knew enough to listen up when he saw the bright light on the road to Damascus.--Megan McArdle

I'd never done a detailed budget before, much less written it down, and forced myself to stick to it by doling out all the payments in cash. It sounds unbearably tedious. But it's actually incredibly freeing. I have never before felt like I had total control over my money. And given all the economic gyrations, it would be awfully nice to know that I was on the road to a paid off house, and could cut my expenses to the bare bones if needed.--Megan McArdle

Saddam was well aware of the “who monitors the monitor problem” – what is the head of the Special Guard mounted a coup himself? Saddam’s solution was not original: appoint a relative. Make sure the appointee is a coward so he would not dream of mounting a coup. Just in case he is tougher than you might think, choose someone stupid so he cannot mount a successful coup and is too stupid to recognize someone else’s good ideas for a coup. ... It is very hard for one player to communicate his strategic intent to the other indirectly: presumably Big Bush thought it was obvious which side had defeated the other and could not imagine that Saddam would even consider Gulf War I a win for the Iraqi regime! This leads the players to have two quite different interpretations of the same event and creates room for future errors.--Sandeep Baliga

He is about winning the game without passion or prejudice. He doesn’t give a damn if there were some hurt feelings on his defense. As we used to say in the old days: Tough noogies. He had no faith in his defense stopping Manning. And he coaches to win. And come to think of it: Wasn’t he showing MORE faith in his defense by thinking they could stop Peyton Manning’s Colts from the 30-yard line?--Joe Posnanski

Securities and Exchange Commission cannot practice what it regulates

2009-11-19T10:40:00.002-05:00

GAO says it noted in last year’s report that the SEC relies too heavily on processes and systems that are not designed to give accurate, complete, reliable information. This year, GAO adds it appears the SEC was not able to commit the amount of effort and resources necessary to compensate for its deficient systems and processes.

You think anyone is going on trial, or before a congressional oversight panel for this? Me neither.

(Via Bess Levin)

Quotes of the day

2009-11-18T11:22:00.017-05:00

When a hedge fund puts a value on a position, first we have to get some highly regarded independent verification that we really do hold that position somewhere, then we have to get independent verification of the value of that position. Why do I feel like Rodney Dangerfield? ... I like to make money, of course, but I really don't like to lose it. ... Watch out for style drift. Like a lot of people, we'd been guilty of it--not much, but a little bit. Now, we pretty much try to invest 100% the way we really know what we're doing. Every successful manager has some kind of an edge. That's how you get to be a successful manager. It's important to remain completely focused on taking advantage of that edge, and maintaining discipline. ... As Michael Jordan proved, just because you're a great basketball player doesn't mean you can be a great baseball player.--Israel Englander

We participated in things that were clearly wrong and have reason to regret. We apologize.--Lloyd Blankfein

Yale had accidentally reported the full amount of the holdings and then attached the one thousand multiplier to them, overstating its holdings by a factor of 1000.--Courtney Comstock and John Carney

Thanks Microsoft [Outlook, Office, Mobile, and Explorer] but I'm going to Google [Gmail, Google Docs, Android, and Chrome].--Don Dodge

I think where markets were allowed to work freely, they worked, and hedge funds were prevented from taking on excessive leverage. Where there was failure was in the institutions that were deeply involved in a regulatory environment. How the politicians take those facts and weave them into a demand for more hedge fund regulation, I don't understand, but that is what we see happening.--Israel Englander

There are, de facto, death panels. Alarmist terminology aside, in a single-payer, public system, the state will decide how to mete out finite resources. Of course, with private healthcare there are also “death panels.” But at least you can shop around for an insurer who will be generously inclined towards your various ailments.--Rondi Adamson

A pair of Harvard researchers recently examined 40 years of data from dozens of countries, trying to sort out the economic impact of religious beliefs or practices. They found that religion has a measurable effect on developing economies - and the most powerful influence relates to how strongly people believe in hell.--Michael Fitzgerald

First, the New York Fed, led by our current Secretary of the Treasury, botched the rescue of AIG so completely and so pathetically that it does border, as Yves says, on criminal incompetence. Second, the Fed had enough negotiating leverage in the entire affair to have substantially lessened the amount of taxpayer funds it ending up paying to AIG's counterparties, to the tune of billions and billions of dollars. A competent and motivated negotiator could have extracted billions of dollars in concessions with little else. But the Fed squandered that leverage, and it explicitly renounced several situational and structural advantages it possessed that contributed to that leverage, in the service of ... what, exactly? Certainly not in the service of its fiduciary duty to the American people, which cannot and should not be limited simply to the ad hoc preservation of a bunch of systemically important financial institutions.--Epicurean Dealmaker

It’s a shame that we've empowered municipal unions to the point that they can threaten their employers -- that's you, the taxpayer -- if citizens volunteer. Union officials should spend less time stopping others' work and more time, well, working.--John Stossel

Urban families live more compactly, do less damage to fragile ecosystems, burn less fuel, enjoy stronger social ties to larger numbers of people, and, most significantly, produce fewer children, since large families have less economic utility in densely settled areas than they do in marginal agricultural areas.--David Owen

The best defenses against terrorism are largely invisible: investigation, intelligence, and emergency response. But even these are less effective at keeping us safe than our social and political policies, both at home and abroad. However, our elected leaders don't think this way: they are far more likely to implement security theater against movie-plot threats.--Bruce Schneier