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
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.
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.
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
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
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