Saturday, June 11, 2016

Andrew Klavan..........................


.................................................................goes to the movies:

"a superhero extravaganza entitled Social Justice League of America: Age of Imaginary Problems."

If you can't explain it......................


When things go wrong, as in the crisis, the cause is not necessarily irrational behavior, nor an external shock, but possibly a mismatch between the chosen heuristic [aka "a rule of thumb"] and the environment...
     Two real-life examples from financial markets show what this abstract  description of decision-making means in practice.  The first concerns J. P. Morgan and its British-born banker Sir Dennis Weatherstone, who started as a bookkeeper at the age of sixteen and rose to become CEO in 1990.  The challenge was how to decide which of the many new and obscure financial products suggested by the traders and mathematicians on its staff the firm should sell to its clients.  With no past history for the performance of those products, there was no basis for judging which ones were likely to be effective.  The new products were an example of radical uncertainty.  The strategy Weatherstone employed was to make sure that any new product was understood by senior management.  The narrative underlying the strategy was that if the product could be explained in a conversation among senior managers then there was less risk that something might go badly wrong.  Weatherstone, I am told, would give the inventors three slots of fifteen minutes to explain the products to him.  If at the end of that he still did not understand the product, the firm would not sell it.  In 2008 there must have been many executives who wished they had followed Weaterstone's heuristic.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Friday, June 10, 2016

Life is just................................



...........................................better when Jeff is blogging.

Comments to this blog.......................



..............are few and far between.  The ones that do arrive tend to be words of encouragement from friends, but, I have spent enough time in the Intertunnel to know that the comment sections of many opinion blogs are more interesting then the original opinion being commented on. 
     Steven " I would actually argue with people who came to my door to spread their religion" Novella publishes the highly readable NeuroLogica blog.  In this recent post he seeks to improve the art of commenting.  We are all wishing him the best of luck tilting at that particular windmill.



Fiddling with the Constitution..........................



........................................has never been easy.   Passage of the first ten amendments, aka The Bill of Rights, was not even a sure thing.  To wit:

Madison, himself, in his election campaign against James Monroe for the new U.S. House, vowed to fight for a bill of rights. He informed the Congress on May 4, 1789, that he intended to introduce the topic formally on May 25; but on May 4, the Congress was embroiled in a lengthy debate on import duties, and when May 25 rolled around, the debate continued. He rose again on June 8 to introduce the subject, but he was blocked, with other members noting that the Congress had more pressing matters to attend to. Stifled, Madison rose again to say why he thought the time was right for the introduction of his list of amendments - and then presented them to the Congress anyway.



For a little slice of American history, here is James Madison, as excerpted from this speech before the House of Representatives on June 8, 1789:

"It cannot be a secret to the gentlemen in this House, that, notwithstanding the ratification of this system of Government by eleven of the thirteen United States, in some cases unanimously, in others by large majorities; yet still there is a great number of our constituents who are dissatisfied with it; among whom are many respectable for their talents and patriotism, and respectable for the jealousy they have for their liberty, which, though mistaken in its object, is honorable in its motive. There is a great body of the people falling under this description, who at present feel much inclined to join their support to the cause of Federalism, if they were satisfied on this one point. We ought not to disregard their inclination, but, on principles of amity and moderation, conform to their wishes and expressly declare the great rights of mankind secured under this constitution. The acceptance which our fellow-citizens show under the Government, calls upon us for a like return of moderation. But perhaps there is a stronger motive than this for our going into a consideration of the subject. It is to provide those securities for liberty which are required by a part of the community..."

A book list..............................


...............................................................for life on a deserted isle.

"once again in the presence of giants who had become my friends."

An interesting exercise.  I suspect my list would be quite different.

Just for today.........................


Hold on strong.....................


Hootie and the Blowfish...................................Hannah Jane


Back when gods walked the earth....


...............................................................Coming of age tale here.

It is the Earth I remember (except, we played wiffle ball in Brooks's backyard:  ball hit against the second story was a double, on the roof a homer).

Thursday, June 9, 2016

Fifty years ago..........................



The Walker Brothers..........The Sun Ain't Gonna Shine Anymore





Frankie Valli released this tune to little effect in 1965.  The Walker Brothers released it in 1966 and took it to the top of the UK charts and #13 on the US charts.

Living large......................


.........................................Some guys just know how to  vacation.

attention..............................




"The moment one gives close attention to any thing, even a blade of grass, it becomes a mysterious, awesome, indescribably magnificent world in itself."

-Henry Miller

Cultivation.......................


"True happiness comes from a sense of peace and contentment, which in turn must be achieved through the cultivation of altruism, of love, and compassion, and elimination of ignorance, selfishness, and greed."

-Tenzin Gyatso, the 14th Dalai Lama

I'm guessing Darwin would approve....


.......................after all, it was his sentiment that the most "adaptable", not the "fittest",  would survive.

"A coping strategy is a way of capturing that unfathomable mystery.  Humans are not pre-programmed to solve complex mathematical optimizing problems, because it is impossible to know in advance which problems they will need to solve.  But the are programmed to learn and to adapt.  Coping strategies are the natural, even perhaps genetic response to the need to adapt to an uncertain world.  The are, in Gigerenzer's phrase, 'ecologically rational';  that is, they are decision processes that are well suited to the environment in which they are used.  In that sense, in a world of radical uncertainty they are more rational that the economists' assumptions of optimising behavior."

-Mervyn King,   The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Boundaries....................



55.  The general wickedness of mankind cannot injure the universe;  nor can the particular wickedness of one man injure a fellow man.  It harms none but the culprit himself;  and he can free himself from it as soon as he so chooses.


56.  My neighbor's will is no greater concern to my will than his breath or his flesh.  No matter how much we are made for one another, still each man's self has its own sovereign rights.  Otherwise, my neighbor's wickedness would become my evil;  and God has not willed this, lest the ruin of my happiness should lie at another's disposal.


-Marcus Aurelius,  Meditations,  Book VIII

Even the "smart" people.......


The strength of economics as a social science is the belief that people will attempt to behave rationally.  The challenge is to work out how a rational person might cope with radical uncertainty.  People aren't dumb.  It is just that in a world of radical uncertainty even smart people do not find it easy to know what it means to behave in a smart manner.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Those darn airport bookshops.....


And despite Seneca's maxim that "luck never made a man wise", airport bookshops continue to stock titles on how to become rich written by successful investors and entrepreneurs who are confident that their success was the result of outstanding business acumen rather than good fortune.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Stuff happens...................


The lesson is that no amount of sophisticated statistical analysis is a match for the historical experience that "stuff happens".  At the heart of modern macroeconomics is the same illusion that uncertainty can be confined to the mathematical manipulation of known probability.  To understand and weather booms and slumps requires a different approach to thinking about uncertainty.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

On staying positive................


"But without wisdom, imagination is a cruel task-maker."
-William Paul Young

In order to..............


                         You say I am repeating
Something I have said before. I shall say it again,
Shall I say it again? In order to arrive there,
To arrive where you are, to get from where you are not,
   You must go by a way wherein there is no ecstasy.
In order to arrive at what you do not know
   You must go by a way which is the way of ignorance.
In order to possess what you do not possess
   You must go by the way of dispossession.
In order to arrive at what you are not
   You must go through the way in which you are not.
And what you do not know is the only thing you know
And what you own is what you do not own
And where you are is where you are not.


-T. S. Eliot, excerpted from "East Coker", The Four Quartets


 

Don't move it too fast..................



Bob & Earl.....................................................Harlem Shuffle





The wiki for Harlem Shuffle is here.  The dancers in the video are clearly not Bob & Earl, they likely are the wondrous Nicholas Brothers

Wednesday, June 8, 2016

Fifty years ago.............................



Ike & Tina Turner...........................River Deep Mountain High


The certainty of uncertainty...............


     Despite the repeated inability of economic forecasting models to predict accurately, there is a persistent belief that there is, if only we could find it, a "model" of the economy that will produce forecasts that are exactly right.  When giving evidence to the Treasury Select Committee in the House of Commons, I would sometimes respond to questions by saying, "I don't know, I don't have a crystal ball."  Such an answer outraged many Members of Parliament.  They thought it was my job to have an official crystal ball in order to tell them what the future held.  Any attempt to explain that not only could I not forecast the future, but neither could they, and nor for that matter could anyone else, was regarded with disbelief.  Down the ages, quack doctors selling patent medicines and astrologers selling predictions have been in strong demand.  Added to their number today are economists selling forecasts, reflecting a desire for certainty that is as irrational as it is understandable.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Remembering...............


........................................................................our Voltaire:

"Doubt is not a pleasant condition, but certainty is an absurd one."

I wonder what Marcus Aurelius...............


....................................would make of this train of thought?

"emotion exists to help economic human actors when reason alone is insufficient."
-as culled from David Tuckett's, Minding The Markets:  An Emotional Finance View Of Financial Instability

Opening paragraphs......................



From the Prologue:


     The Pilgrims landed the Mayflower at Cape Cod, Massachusetts on a cold November day in 1620 because they were running out of beer.  Their legal charter from King James was for a grant of land in Northern Virginia, but instead they anchored illegally and carved their first community from the sand, laying the foundation of the American character:  flinty, rebellious, and inspired by adversity.


From Chapter 1:


     Even before the supporting beam at the front of the main mast was shattered by a powerful wave in the middle of the stormy North Atlantic, the voyage of the creaky old Mayflower seemed cursed.  She was a sweet ship, so called because she smelled of her previous cargo of wine, which she had carried from Spain to England up the Atlantic Coast of Europe for decades.  When a group of exiled English separatists living in Holland stepped in to buy her, the sweetness evaporated.  The voyage to the New World was a bitter version of Calvinist Hell.  When the Pilgrims finally arrived at their destination, their leader, historian William Bradford, who loved biblical parallels, wrote that what they found was far from a new Eden but "a hideous and desolate wilderness full of wild beasts and wild men."


-Susan Cheever,  Drinking In America:  Our Secret History

Working at it................................







via



Before I die...............................



........................I'd like to be able to have naming rights for one of these nebula things.  Here is how APOD describes this one:  "Cataloged as IC 2944, the Running Chicken Nebula spans about 100 light years and lies about 6,000 light years away toward the constellation of the Centaur (Centaurus)."  "Running Chicken"?   If you asked me, I'd say it looks more like Mr. Krabs from SpongeBob SquarePants.







Transpartisanship....................................?

Another reason the environment is more favorable to transpartisanship is that people are increasingly doubting the wisdom of what Walter Russell Mead has called “the American Establishment, the Great and the Good of both parties,” which “has worked its way into a dead end of ideas that don’t work and values that can’t save us.” An infusion of intellectual energy from the Left and Right can sometimes be more productive than continued adherence to the same old centrist pablum.


-as excerpted from here

Wisdom........................................



"Get to work. Keep the jungle at bay. Always be learning."


Full story here.

Frisky.........................


The Rivieras......................................................California Sun


Fifty-seven years ago.........


Johnny & The Hurricanes..............................Red River Rock


Tuesday, June 7, 2016

Noah overlooks........................


...............the fact that the main purpose of buying a house is to have your own place to live.  Shelter that you control.  The fact that occasionally it  can become a storehouse of equity is a nice side benefit, but not the reason to buy.

Speaking of Gary Johnson..................


.....................here is a scenario you probably haven't envisioned yet.

Thinking about free will and the Clock Maker...



The concept of free will can be confusing.


  Stuart Schneiderman reports:  "Apparently, neuroscience has looked into the workings of the brain and has not seen anything that looks like free will. That is, scientists do not see a mental action preceding the brain function that directs a physical action."  


He quotes Stephen Cave as saying, "The sciences have grown steadily bolder in their claim that all human behavior can be explained through the clockwork laws of cause and effect..."  "


Actually, Cave's essay in The Atlantic seems more nuanced than Schneiderman gives him credit for,  As they say in the neighborhood.  Read the whole thing.


The following passage from Cave's essay raises a much more important question:  is Cave channeling Dilbert, or is Dilbert channeling Cave?:


"Philosophers and theologians are used to talking about free will as if it is either on or off; as if our consciousness floats, like a ghost, entirely above the causal chain, or as if we roll through life like a rock down a hill. But there might be another way of looking at human agency."






The perils of fiddling with the language............



"The traditional restraints on malicious imbecility have been systematically removed."


If you enjoy a good writer who says what he means and means what he says, then do check out David Warren

Relationships......................



26.  A man's true delight is to do the things he was made for.  He was made to show goodwill to his kind, to rise above the promptings of his senses, to distinguish appearances from realities, and to pursue the study of universal Nature and her works.


27.  We have three relationships:  one to this bodily shell which envelops us, one to the divine Cause which is the source of everything in all things, and one to our fellow-mortals around us.


-Marcus Aurelius,  Meditations,  Book VIII

John E. Smith.........................



.......................................................on overcoming dragons.

He leads you...........................


Traffic..............................................................Freedom Rider


Contradictions unbalanceable......


"Monroe found that he could rely on Adams' nonpartisan judgment and deep knowledge of foreign affairs, as well as his gift for foreseeing even remote consequences of present actions."

"Clay was what we would call today a foreign policy idealist, demanding the America act abroad according to its values at home, rather than according to a strict calculus of its interests."

"And, like many other leading figures of the time, Clay viewed (Andrew) Jackson as a genuinely dangerous man, a Caesar in waiting."

"But America's expansion produced internal contradictions that finally became too acute to be ignored, for the incorporation of each new state from annexed territory forced the dreaded question of slavery.  Would the new state be slave or free?"

"What were his views?  Until that time, Adams had held two contradictory ideas in his mind - that slavery was an unmitigated evil and that the wishes of slave owners ought to be accommodated in the name of more pressing matters."

"The debate over Missouri forced Adams for the first time to acknowledge slavery as a calamitous evil that could not simply be placed in balance with other wrongs."

-James Traub, a few excerpts from  John Quincy Adams:  Militant Spirit

Fifty years ago......................


Spencer Davis Group..................................Somebody Help Me


Monday, June 6, 2016

Untenable and personal...................


As the nation rapidly expanded and diversified, the Founding Fathers ideal of a single patriotic national interest became increasingly untenable.  Sectional interests had long pitted the manufacturers and traders of New England against the agriculturists of the South.  But now the nation's center of gravity was shifting as settlers poured into the west.  Between 1810 and 1820 the number of Americans living beyond the Appalachians doubled from one to two million.  Between 1816 and 1821, five new Western states were admitted to the union - Indiana, Mississippi, Illinois, Alabama, and Missouri.  (Maine was also admitted in 1820.)  The absence of organized parties meant that interests gathered around individuals and thus that the inevitable clash of interest and ideology would be intensely, and often brutally, personal.  It was not, of course, in John Quincy Adams' nature to minimize conflict.  The seven years he would spend in President Monroe's cabinet would be a period of fierce rivalry, rising suspicion, and, finally, open political warfare.

-James Traub,  John Quincy Adams:  Militant Spirit

Commonality....................


.................................A list of "things the world's most and least privileged people say".  

When my blog grows up..................


...............................................I hope it's as good as this one.

Seriously............................




"The one important thing I have learned over the years is the difference between taking one's work seriously and taking one's self seriously.  The first is imperative and the second is disastrous."

-Margot Fonteyn

Is there an Amen out there anywhere................?


In the same issue of the WaPo, there are many opinion pieces fretting over Donald Trump’s potential abuse of power. Although I disagree with Trump on many substantive issues, I am not going to get on the bandwagon of attacking his authoritarian personality.


I do not doubt that Trump has authoritarian tendencies. Or that he is a narcissist. Or that he is overconfident in his own views. But all of those qualities are present in Barack Obama. And yet when he acts on these authoritarian tendencies, the narrative becomes “vigorous use of executive orders.”


I have not changed my views from a few weeks ago. I will vote for Gary Johnson. But if the media continue to ignore the most respectable ticket on the ballot, then I hope Trump wins. Again, this is not because I agree with him on substance. It is because I believe that as long as we are going to have an arrogant, over-confident, self-centered President, I would rather have the institutional forces of the left arrayed against executive power than in support of it.


-Arnold S. Kling. as excerpted from here


I like Johnson, just not sure I will vote for him

Yeow........................................



...........One would expect that this trend is not sustainable:
























via (also a more readable version)

Expecting a correction, any year now..................



............but for now, we're still opting for wide open spaces:






Larger graph and back story are here.

Fifty years ago.........................


Spencer Davis Group....................................Somebody Help Me


Sunday, June 5, 2016

Calling your name.........................


Classics IV....................................................................Stormy


Strong is the desire to believe...................




cartoon via

Fifty years ago...............................


Frankie Valli &The Four Seasons/I've Got You Under My Skin


"inconceivable stupidity"...................Part one


     In his account of the origins of the First World War, the historian Max Hastings quotes an exchange that took place in 1910 between a student and the commandant of the British Army staff college.  Surely, the student suggested, only "inconceivable stupidity on the part of statesmen" could precipitate a general European war.  Brigadier-General Henry Wilson replied, "Inconceivable stupidity is just what you're going to get."

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

"inconceivable stupidity"..................Part two


     No doubt there were bankers who were indeed wicked and central bankers who were incompetent, though the vast majority of both whom I met during the crisis were neither.  It would be both arrogant and complacent to assume all the problems generated in money and banking arose because our predecessors, let alone our contemporaries, fell prey to "inconceivable stupidity".  Rather, like everyone else, they naturally responded to the incentives they faced.  As individuals, they tried to behave in what they saw as a rational manner, but the collective outcome was disastrous.  Because they could not affect the behavior of others, all the key actors in the drama were understandably acting in their own self-interest  ... After the event it may seem easy to see how the crisis could have been avoided by some set of actions, but no one at the time had any incentive to take them.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Apocalypse deferred.....................


Almost 80 percent of Swiss voters rejected a guaranteed monthly income Sunday.
 
Under the proposal, Swiss adults would receive a government check of 2,500 Swiss francs ($2,563) each month, and children under the age of 18 would receive a check worth 625 francs. Although the proposal had almost no political support, it gathered more than 100,000 signatures, so it was put to a public vote under Switzerland’s popular initiative political system.
 
 

Balance.................................


     A century is an invented unit, as manmade as a mobile phone, as artificial as a Big Mac, and yet it's a useful marker for all that.  We don't know if our great-grandchildren will regard this one as the Asian Century, but it will be far more Asian than the twentieth century was, when poverty and isolation kept Asian countries and especially China largely sidelined from global influence.  That period is ending, and you can see its end in China's struggle to balance opening and closing down, as its most successful new firms turn global.  We don't know what the result of all this new connectivity will be, for China or for the world, but we can at least say, "We don't know when the old model ended, but we can now see that it's gone."

-Clay Shirky,   Little Rice:  Smartphones, Xiaomi, and The Chinese Dream

Soar..............................





"No bird soars too high, if he soars with his own wings."

-William Blake

photo via

A likely outcome....................


Trust..........................


     Since the Civil War, dollar coins in the United States have exhibited the words "In God We Trust", and the motto has appeared on dollar bills since 1957.  Trust is fundamental to the acceptability, and so the value, of money.  But it is trust not in God but in the issuer of money, usually governments, that determines its value.  And that trust has been sorely tried over the centuries.

-Mervyn King,   The End of Alchemy:  Money, Banking, and the Future of the Global Economy

Somebody else's favorite song.......


Steely Dan......................................................................FM


A few simple rules..................


5.  The first rule is, to keep an untroubled spirit;  for all things must bow to Nature's law, and soon enough you must vanish into nothingness, like Hadrian and Augustus.  The second is to look things in the face and know them for what they are, remembering that it is your duty to be a good man.  Do without flinching what man's nature demands;  say what seems to you most just - though with courtesy, modesty, and sincerity.

-Marcus Aurelius,  Meditations,  Book VIII

Fifty years ago...............................


The Seekers...........................................................Walk With Me