A.K.A. Physics Envy

Wednesday, July 15, 2009

From Despair, Inc.

http://site.despair.com/blog/2009/06/03/two-timely-new-tees/

WASHINGTON (Reuters) - Former Treasury Secretary Henry Paulson says in prepared congressional testimony that he told Bank of America (NYSE:BAC - News) Chief Executive Kenneth Lewis the Federal Reserve could oust the bank's management and board if they walked away from a planned merger with Merrill Lynch.

Paulson also said in testimony prepared for delivery to the House Oversight and Government Reform panel on Thursday that he was never instructed by Fed Chairman Ben Bernanke to indicate to Lewis any actions the Fed might take.

Are you ready?

http://homequiz.net/index.asp

Proof-of-Global-Warming-Cools

Daniel Rice, manager of the BlackRock Energy & Resources Fund, is the best-performing U.S. equity fund manager of the past decade, according to Morningstar. He's also not afraid to speak his mind, especially when it comes to the subjects of global warming and alternative energy.Rice paints a "pretty dire picture" of the whole alternative energy industry, with the possible exception of wind, based on the following:

Global warming patterns have reversed in the past decade, Rice says, citing studies by meteorologist Dr. Judah Cohen, whom BlackRock has on retainer. Ten years is microscopic in geological terms but "you'd better hope global warming is caused by man-made [carbon dioxide] if you're investing in these sectors," he says. "I think that's a huge risk based on some of the evidence that's been coming out."
Alternative energies are not economical without major government subsidies or a large enough carbon tax. The cap and trade legislation currently being debated is "not enough to do anything," Rice says. "All it does is provide Obama a pass to Copenhagen" where the U.N. is hosting a climate change conference in December.

http://tinyurl.com/kq34mu

I bet typewriters are cheap.

from: gizmodo

NYPD officers are fed up! Their typewriters are broken down relics from a previous age, making police work more difficult, stressful and demoralizing. To remedy this, the city is spending close to a million dollars. On new typewriters.

It's easy to see what happened here: faced with a failing fleet of typewriters—used for property and evidence vouchers, and little else—the NYPD could either upgrade and computerize their entire system, possibly saving time, money and morale in the long run, or just fix and replace their existing equipment. For a variety of plausible and sympathetic reasons—upfront cost, time, lack of cooperation from the government, etc—they chose the latter route.

But don't let that tarnish the glorious absurdity of the situation for you. This a 21st-century big city police force, nearly all of whom own personal computers, that spends—and will continue to spend—its days slaving away in front of machines that the rest of the modern world only waxes nostalgic about.

risk and uncertainty

I was talking with a freind over lunch and was surprised that she had never heard of prospect theory:

Kahneman and Tversky's Prospect Theory

Daniel Kahneman and Amos Tversky called their studies of how people manage risk and uncertainty Prospect Theory for no other reason than that it is a catchy, attention-getting name.

Kahneman and Tversky started their research investigating apparent anomalies and contradictions in human behavior. Subjects when offered a choice formulated in one way might display risk-aversion but when offerred essentially the same choice formulated in a different way might display risk-seeking behavior. For example, as Kahneman says, people may drive across town to save $5 on a $15 calculator but not drive across town to save $5 on a $125 coat.

One very important result of Kahneman and Tversky work is demonstrating that people's attitudes toward risks concerning gains may be quite different from their attitudes toward risks concerning losses. For example, when given a choice between getting $1000 with certainty or having a 50% chance of getting $2500 they may well choose the certain $1000 in preference to the uncertain chance of getting $2500 even though the mathematical expectation of the uncertain option is $1250. This is a perfectly reasonable attitude that is described as risk-aversion. But Kahneman and Tversky found that the same people when confronted with a certain loss of $1000 versus a 50% chance of no loss or a $2500 loss do often choose the risky alternative. This is called risk-seeking behavior. This is not necessarily irrational but it is important for analysts to recognize the asymmetry of human choices.

Peter Bernstein cites an experiment by Richard Thaler in which student were told to assume they had just won $30 and were offered a coin-fip upon which they would win or lose $9. Seventy percent of the students opted for the coin-flip. When other students were offered $30 for certain versus a coin-flip in which they got either $21 or $39 a much smaller proportion, 43%, opted for the coin-flip.

Source: Peter Bernstein, Against the Gods: The Remarkable Story of Risk, John Wiley & Sons, New York, 1996.

Tuesday, July 14, 2009

Confused about Religion?

Santa Dreidel

Celebrate both Christmas and Hanukkah with this 2-3/4" tall wooden
Santa Dreidel. Imagine the fun you’ll have playing the dreidel
game by the light of the menorah while you wait for Santa to climb down
the chimney with his sack full of gifts! Each side features a different
Christmas symbol (Santa, Christmas tree, candy cane, reindeer). Sure to
confound and confuse both Jews and Gentiles!

Santa Dreidel

item 11880

$4.95 ea.

“Maybe Spain just remembered what to do when other people forgot.”

July 14 (Bloomberg) -- Luis Angel Rojo, the man behind Spanish rules that force lenders to build reserves in good times to cover future losses, has a warning for regulators who may adopt the standards: They won’t stop the excesses of bankers.

“Spanish banks did all kinds of crazy things, even with this model,” Rojo, Spain’s central bank governor from 1992 to 2000, said in an interview. Nevertheless, Rojo supported extending the plan to other countries, “not just because it’s our system, but because I think it will work out well.”

Spain required banks to make provisions for losses when loans were granted, rather than waiting for them to go sour, giving them 23 billion euros ($32 billion) of reserves to draw on as boom turned to bust. The rules are credited with helping Spanish lenders avoid the worst of the writedowns and credit losses that have cost European banks $457 billion since 2007.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aCtbBofkvyW0

Monday, July 13, 2009

No Brew

Sunday, July 12, 2009

Remember The 40-Hour Work Week?

"Last week it was revealed that the average work week of non-farm workers had dropped to an all-time low of 33 hours. It's a worrisome sign that even with all the layoffs, employers aren't making their existing employees work more. So what happened to the 40-hour work week? Turns out, that's a distant memory."

Saturday, July 11, 2009

outsource-for-leisure

From http://theincidentaleconomist.com/outsourcing-home-production/:

Adults in the U.S. spend an average of almost 4 hours per day on home production (unpaid housework and errands). Every so often I hear someone justify the outsourcing of such work (i.e., the hiring of domestic assistance) with an economic-sounding argument. The individual says something like, “Since my wage rate is higher than the wage I pay my housekeeper [or landscaper or whomever] it is cost-effective.” The speaker is arguing that his time is worth too much to be spent on chores. More concretely, suppose for example he makes $20/hour (after taxes) and he can hire help for, say, $10/hour. Therefore, for every hour he outsources and works, he nets $10/hour.
This argument could be valid but isn’t necessarily so for two reasons. First of all, it is important to identify what one really does with the time made available by outsourcing home production. If it is used for leisure then one is not making money by outsourcing, one is buying leisure time.

Painful Journey To The New Normal

The Housing Bubble Blog » This Bumpy And Painful Journey To The New Normal: "“Is it time to pull the plug on some of these wonderful sounding, and frankly pathetically ineffective, mortgage rescue efforts? A recent Fed study, detailed in the Globe, raises some serious questions about whether the Obama effort and the myriad of other programs like it stand much chance of even putting a dent in sky-high foreclosure rates.”

“After tracking hundreds of thousands of loans over a two year period, it found that only 3 percent of ’seriously delinquent’ homeowners were able to lower their monthly payments through loan modifications. And nearly half of borrowers who received some sort of help – 45 percent – ended up in trouble again down the line.”

“Did all the economists inside and outside the government get their diplomas off the Internet or from the back of a comic book? Friday’s newspapers were filled with stories about how surprised everyone was about the country’s latest unemployment numbers. And the smart economists didn’t see this coming? Huge jumps in housing prices, no consumer saving, consumer debt constantly rising. But no one thought that was a problem.”

“If we continue to rely on the people who got us here, we better expect to simply get more of what we’ve already gotten: trouble.”"