Archive
Housing bubble or predictable consequence of income inequality?
It’s Sunday, which for me is a day of whimsical smoke-blowing. To mark the day, I think I’ll assume a position about something I know very little about, namely real estate. Feel free to educate me if I’m saying something inaccurate!
There has been a flurry of recent articles warning us that we might be entering a new housing bubble, for example this Bloomberg article. But if you look closely, the examples they describe seem cherry picked:
An open house for a five-bedroom brownstone in Brooklyn, New York, priced at $949,000 drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for $2 million got six offers last month, including four from builders planning to tear it down to construct a bigger house. In south Florida, ground zero for the last building boom and bust, 3,300 new condominium units are under way, the most since 2007.
They mention later that Boston hasn’t risen so high as the others hot cities recently, but if you compare Boston to, say, Detroit on this useful Case-Schiller city graph, you’ll note that Boston never really went that far down in the first place.
When I read this kind of article, I can’t help but wonder how much of the signal they are seeing is explained by income inequality, combined with the increasing segregation of rich people in certain cities. New York City and Menlo Park are great examples of places where super rich people live, or want to live, and it’s well known that those buyers have totally recovered from the recession (see for example this article).
And it’s not even just American rich people investing in these cities. Judging from articles like this one in the New York Times, we’re now building luxury sky-scrapers just to attract rich Russians. The fatness of this real estate tail is extraordinary, and it makes me think that when we talk about real estate recoveries we should have different metrics than simply “average sell price”. We need to adjust our metrics to reflect the nature of the bifurcated market.
Now it’s also true that other cities, like Phoenix and Las Vegas are also gaining in the market. Many of the houses in these unsexier areas are being gobbled up by private equity firms investing in rental property. This is a huge part of the market right now in those places, and they buy whole swaths of houses at once. Note we’re not hearing about open houses with 300 buyers there.
Besides considering the scary consequences of a bunch of enormous profit-seeking management companies controlling our nation’s housing, and changing the terms of the rental agreements, I’ll just point out that these guys probably aren’t going to build too large a bubble, since their end-feeder is the renter, the average person who has a very limited income and ability to pay, unlike the Russians. On the other hand, they probably don’t know what they’re doing, so my error bars are large.
I’m not saying we don’t have a bubble, because I’d have to do a bunch of reckoning with actual numbers to understand stuff more. I’m just saying articles like the Bloomberg one don’t convince me of anything besides the fact that very rich people all want to live in the same place.
Star Trek is my religion
I was surprised and somewhat disappointed yesterday when I found this article about Star Trek in Slate, written by Matt Yglesias. He, like me, has recently been binging on Star Trek and has decided to explain “why Star Trek is great” – also my long-term plan. He stole my idea!
My disappointment turned to amazement and glee, however, when I realized that the episode he began his column with was the exact episode I’d just finished watching about 5 minutes before I’d found his article. What are the chances??
It must be fate. Me and Matt are forever linked, even if he doesn’t care (I’m pretty sure he cares though, Trekkies are bonded like that). Plus, I figured, now that he’s written a Star Trek post, I’ll do so as well and we can act like it’s totally normal. Where’s your Star Trek post?
Here’s his opening paragraph:
In the second episode of the seventh season of the fourth Star Trek television series, Icheb, an alien teenage civilian who’s been living aboard a Federation vessel for several months after having been rescued from both the Borg and abusive parents, issues a plaintive cry: “Isn’t that what people on this ship do? They help each other?”
That’s the thing about Star Trek. It’s utopian. There’s no money, partly because they have ways to make food and objects materialize on a whim. There’s no financial system of any kind that I’ve noticed, although there’s plenty of barter, mostly dealing in natural resources. And the crucial resource that characters are constantly seeking, that somehow make the ships fly through space, are called dilithium crystals. They’re rare but they also seem to be lying around on uninhabited planets, at least for now.
But it’s not my religion just because they’ve somehow evolved past too-big-to-fail banks. It’s that they have ethics, and those ethics are collaborative, and moreover are more basic and more important than the power of technology: the moral decisions that they are confronted with and that they make are, in fact, what Star Trek is about.
Each episode can be seen as a story from a nerd bible. Can machines have a soul? Do we care less about those souls than human (or Vulcan) souls? If we come across a civilization that seems to vitally need our wisdom or technology, when do we share it? And what are the consequences for them when we do or don’t?
In Star Trek, technology is not an unalloyed good: it’s morally neutral, and it could do evil or good, depending on the context. Or rather, people could do evil or good with it. This responsibility is not lost in some obfuscated surreality.
My sons and I have a game we play when we watch Star Trek, which we do pretty much any night we can, after all the homework is done and before bed-time. It’s kind of a “spot that issue” riddle, where we decide which progressive message is being sent to us through the lens of an alien civilization’s struggles and interactions with Captain Picard or Janeway.
Gay marriage!
Confronting sexism!
Overcoming our natural tendencies to hoard resources!
Some kids go to church, my kids watch Star Trek with me. I’m planning to do a second round when my 4-year-old turns 10. Maybe Deep Space 9. And yes, I know that “true scifi fans” don’t like Star Trek. My father, brother, and husband are all scifi fans, and none of them like Star Trek. I kind of know why, and it’s why I’m making my kids watch it with me before they get all judgy.
One complaint I’ve considered having about Star Trek is that there’s no road map to get there. After all, how are people convinced to go from a system in which we don’t share resources to one where we do? How do we get to the point where everyone’s fed and clothed and can concentrate on their natural curiosity and desire to explore? Where everyone gets a good education? How can we expect alien races to collaborate with us when we can’t even get along with people who disagree about taxation and the purpose of government?
I’ve gotten over it though, by thinking about it as an aspirational exercise. Not everything has to be pragmatic. And it probably helps to have goals that we can’t quite imagine reaching.
For those of you who are with me, and love everything about the Star Trek franchise, please consider joining me soon for the new Star Trek movie that’s coming out today. Showtimes in NYC are here. See you soon!
In defense of neglectful parenting
As I promised yesterday, I want to respond to this New Yorker article “The Child Trap: the rise of overparenting,” which my friend Chris Wiggins forwarded to me.
The premise of the article is that nowadays we spoil our kids, force them to do a bunch of adult-supervised after-school activities, and generally speaking hover over them, even once they’re adults, and it’s all the fault of technology and (who else?) guilty working mothers. In particular, it makes kids, especially college-age kids, incredibly selfish and emotionally weak.
They interview overparenting skeptics as well, who seem to be focused on the spoiling and indulgent side of overparenting:
As for the steamy devotion shown by later generations of parents, what it has produced are snotty little brats filled with “anger at such abstract enemies as The System,” and intellectual lightweights, certain (because their parents told them so) that their every thought is of great consequence. Epstein says that, when he was teaching, he was often tempted to write on his students’ papers: “D-. Too much love in the home.”
I’m basically in agreement with the article, although I’d go further at some moments and not as far at others.
For example, with spoiling: in my experience, “spoiled kids” is just a phrase people use to describe kids that have acclimated perfectly to their imperfect environments.
So if you train your kids to whine, by saying “no” but then giving in if they whine, then it’s on you, as a parent, to realize you’ve created a perverted environment. Your kid is essentially doing what they’re told. If a 15-year-old kid sitting next to the refrigerator yells for his mom across the living room to get him a glass of juice (I’ve seen this happen) and the mom in question does what she’s been told, then guess what? That kid has learned how to make juice appear.
When you eventually release a spoiled kid in the real world, where there’s nobody to get him juice when he demands it, and when things don’t magically happen because they whine, then all you’ve done is made their entry into that real world harder for them. And in that sense you’ve fucked up.
Because isn’t our main job as parents to make sure they can survive on their own as productive, kind, happy individuals?
On the separate subject of getting your kid to be super gifted through Baby Mozart CD’s and after-school activities (from the article: “You can’t smoke pot or lose your virginity at lacrosse practice.”), it’s an approach to parenting I find toxic, and here’s why.
I think the attention you give to your kids when you force them to practice violin or study for standardized tests is an anxious attention. And just as marriages break down when the majority of interactions between spouses consist of negotiating child pick-ups rather than exchanging ideas and affection, the relationship between parents and kids can similarly suck if you spend more time nagging and worrying about their externally perceived status than enjoying them as people.
And that’s just the day-to-day complaint I have. The larger complaint I have about all this overparenting is that the anxiety we have for our kids’ futures is being projected onto them, and it often translates as a lack of faith in their ability to make it on their own. So rather than preparing them to live independent lives, we’re undermining them from the get-go.
Actually, I’d go one step further. One thing I enjoyed as a latch-key kid of a working mother (who carried no guilt at all) was that, for most things, I was never under scrutiny. What I did with my time after school was up to me, although I wasn’t supposed to watch TV all the time (and I sometimes did anyway, of course – we should all be able to experiment with breaking rules). What I thought about and who I hung out with with were completely up to me – and by the time I was 17 and had my license and a crappy old car, I did some admittedly pretty outrageous things. My parents were so busy they often didn’t even look at my report card in a given year.
In other words, I had a kind of privacy and freedom that I don’t think many kids today can even imagine, although I do my best to provide my kids with a similar environment.
That’s not to say my childhood was perfect, nor were my parents totally neglectful – we had dinner together every night, they gave me a safe environment to roam around in, and I had a bedtime which was enforced. If I hadn’t been doing my homework, I’m pretty sure they would have been on top of me to do it, but I did it on my own. And I was under scrutiny for one thing, namely being mildly overweight, which caused me enough pain then that I understood scrutiny itself to be the source of insecurity.
I can’t help thinking that my childhood would have been a lot worse if my parents had fretted over how I spend my afternoons, even though it’s hard to imagine. It makes me wonder where I’d be now if I hadn’t had those afternoons to spend making unlikely friends, taking on jobs cleaning houses for cash, buying books to read, and generally speaking deciding who I was going to grow up to be.
Do what I want or do what I really want
I’m on my way out to a picnic in Central Park on this glorious Sunday morning, and I plan to write a much more thorough post in response to this New Yorker article on overparenting that my friend Chris Wiggins sent me, but today I just wanted to impart one idea I’ve developed as a mother of three boys.
Namely, kids don’t ever want to do what you want them to do, especially when they’re tired, and it’s awful to feel helpless to get them to something without ridiculous, possibly empty threats, or something worse.
What to do?
My solution is pretty simple, and it works great, at least in my experience. Namely, if I’m getting no response from a reasonable request from my, say, 4-year-old, then I form a separate request which is easier for me and less good for them. And then I offer him a choice between doing what I want or doing what I really want.
Example: it’s bedtime (i.e. 7pm, which we will come back to in further post, which I’m considering calling “In defense of neglectful parenting”) and my kid doesn’t want to stop watching Star Wars Lego movies on Youtube. I’ve asked repeatedly for him to pause the movie so he can brush his teeth, get into his pajamas, and have me read his favorite bedtime story (currently: “Peter and the Shadow Thieves”).
Instead of screaming, picking him up and dragging him to the bathroom, which is increasingly difficult since he’s the size of a 6-year-old, I simply make him an offer:
Either you come brush your teeth right now and I read to you, or you come brush your teeth now and I don’t read to you, and you’ll have to go to bed without a bedtime story. I’m going to count to five and if you don’t come to the bathroom to brush your teeth when I get to “5″ then no story.
Here’s the thing. It’s important that he knows I’m serious. I will actually not read to him if he doesn’t hurry up. To be fair, I only had to follow through with this exactly once for him to understand the seriousness of this kind of offer.
What I like about this is the avoidance of drama, empty threats, and physical coercion, or what’s just as annoying, a wasted evening of arguing with an exhausted child about “why there are bedtimes”, which happens so easily without a strategy in place.
What does it mean that our public square is a private place?
I just read this opinion piece written by Jillian York and published by Aljazeera.com. York discusses “How social network policies are changing speech and privacy norms” and she makes the point that there’s a big difference between our legal rights as citizens and the way Facebook has defined its policies, and by extension our “rights” inside Facebook.
So, for example, there’s the question of whether we can show pictures of breastfeeding our children on Facebook. The policy on this has changed – nowadays they say yes, but they used to remove such pictures.
Another example might be more important: whether you can be anonymous. As York points out, Facebook might have an opinion about this, and Zuckerberg seems to – she quotes him as having said ”having two identities for yourself is an example of a lack of integrity” – and yet their vested interest in this question is related to making sure they’ve accurately targeted you for advertisements.
I want to make the case that the “real-life” version of anonymity in Facebook is really just privacy in the simplest sense.
If I am even half-aware of the extent of the surveillance and tracking that goes on when I log into Facebook under my real name, which I don’t even think I am, then I’d tend to use a separate browser, with cleared cookies, and an anonymous Facebook account in order to do absolutely anything without it being tracked. In other words, anonymity is what it takes to do anything privately on Facebook.
Now, you might argue that I can just not go to Facebook at all if I want to do private things, and I’m sure that’s Facebook position as well. But the truth is, Facebook is the world’s public square. Some enormous fraction of the world visits Facebook at least once a week. Exclusion from this would be a big deal.
In any case, it’s weird that decisions like this, that affect our notions of privacy, are being decided by some dude who’s probably thinking more about ad revenue than anything else, under pressure from shareholders.
Not that it’s a new problem. When I was growing up in Lexington, MA, over the cold winters we’d hang out in the Burlington Mall. It was the public square of its time, and yes it was utterly commercial and private, and of course they excluded anyone who they didn’t like the looks of, with security guards. Even so, they didn’t check ID’s at the door.
Mathbabe, the book
Thanks to a certain friendly neighborhood mathbabe reader, I’ve created this mathbabe book, which is essentially all of my posts that I ever wrote (I think. Note sure about that.) bundled together mostly by date and stuck in a huge pdf. It comes to 1,243 pages.
I did it using leanpub.com, which charges $0.99 per person who downloads the pdf. I’m not charging anything over that, because the way I look at it, it’s already free.
Speaking of that, I can see why I’d want a copy of this stuff, since it’s the best way I can think of to have a local version of a bunch of writing I’ve done over the past couple of years, but I don’t actually see why anyone else would. So please don’t think I’m expecting you to go buy this book! Even so, more than one reader has requested this, so here it is.
And one strange thing: I don’t think it required my password on WordPress.com to do it, I just needed the url for the RSS feed. So if you want to avoid paying 99 cents, I’m pretty sure you can go to leanpub or one of its competitors and create another, identical book using that same feed.
And for that matter you can also go build your own book about anything using these tools, which is pretty cool when you think about it. Readers, please tell me if there’s a way to do this that’s open source and free.
Good news Sunday
Sunday mornings tend to provoke me to write the most whimsical posts of the week. I’ve usually gotten enough sleep for the first time in seven days, unless I’m hung over from Saturday late-night karaoke (but I usually like to do that on Fridays), and I can actually remember some of my dreams.
Especially on a glorious sunny Spring morning like today, I can’t abide any bad news or ranting. So today it’s only gonna be good news. Here goes.
1) Chocolate Fondue
Did you know that you can buy chocolate fondue machines for like $9.00? I found this out because at some point I realized my kids hadn’t had chocolate fondue in ages (trust me, it was all about the kids), and I wanted to find a place in New York City where we could go eat fondue, but the only places offering it were like $300 meals for a family of five. So I went on Amazon instead, and paid for the whole shebang for under $30, including the little sticks, and that silly little machine still works. It’s like a happiness machine.
2) Star Trek
There’s a new Star Trek movie, Into Darkness, coming out starting on May 15th. Do not beware the ides of May.
3) TBTF
Sherrod Brown and David Vitter introduced an “end too-big-to-fail” bill this week and they wrote about it in an Op-Ed for the New York Times. It doesn’t mean it’ll be passed, or that it’s perfect, but the momentum is gaining, which is good.
4) Knitting
This is in the category of “good news for me” and you might not care, but after years of worrying that it would be too twine-y, I’ve taken the plunge into knitting with linen and I love it. I’m making this sweater in black linen, and I’ve already finished the back panel:
How to reinvent yourself, nerd version
I wanted to give this advice today just in case it’s useful to someone. It’s basically the way I went about reinventing myself from being a quant in finance to being a data scientist in the tech scene.
In other words, many of the same skills but not all, and many of the same job description elements but not all.
The truth is, I didn’t even know the term “data scientist” when I started my job hunt, so for that reason I think it’s possibly good and useful advice: if you follow it, you may end up getting a great job you don’t even know exists right now.
Also, I used this advice yesterday on my friend who is trying to reinvent himself, and he seemed to find it useful, although time will tell how much – let’s see if he gets a new job soon!
Here goes.
- Write a list of things you like about jobs: learning technical stuff, managing people, whatever floats your boat.
- Next, write a list of things you don’t like: being secretive, no vacation, office politics, whatever. Some people hate working with “dumb people” but some people can’t stand “arrogant people”. It makes a huge difference actually.
- Next, write a list of skills you have: python, basic statistics, math, managing teams, smelling a bad deal, stuff like that. This is probably the most important list, so spend some serious time on it.
- Finally, write a list of skills you don’t have that you wish you did: hadoop, knowing when to stop talking, stuff like that.
Once you have your lists, start going through LinkedIn by cross-searching for your preferred city and a keyword from one of your lists (probably the “skills you have” list).
Every time you find a job that you think you’d like to have, take note of what skills it lists that you don’t have, the name of the company, and your guess on a scale of 1-10 of how much you’d like the job into a spreadsheet or at least a file. This last part is where you use the “stuff I like” and “stuff I don’t like” lists.
And when you’ve done this for a long time, like you made it your job for a few hours a day for at least a few weeks, then do some wordcounts on this file, preferably using a command line script to add to the nerdiness, to see which skills you’d need to get which jobs you’d really like.
Note LinkedIn is not an oracle: it doesn’t have every job in the world (although it might have most jobs you could ever get), and the descriptions aren’t always accurate.
For example, I think companies often need managers of software engineers, but they never advertise for managers of software engineers. They advertise for software engineers, and then let them manage if they have the ability to, and sometimes even if they don’t. But even in that case I think it makes sense: engineers don’t want to be managed by someone they think isn’t technical, and the best way to get someone who is definitely technical is just to get another engineer.
In other words, sometimes the “job requirements” data on LInkedIn dirty, but it’s still useful. And thank god for LinkedIn.
Next, make sure your LinkedIn profile is up-to-date and accurate, and that your ex-coworkers have written letters for you and endorsed you for your skills.
Finally, buy a book or two to learn the new skills you’ve decided to acquire based on your research. I remember bringing a book on Bayesian statistics to my interview for a data scientist. I wasn’t all the way through the book, and my boss didn’t even know enough to interview me on that subject, but it didn’t hurt him to see that I was independently learning stuff because I thought it would be useful, and it didn’t hurt to be on top of that stuff when I started my new job.
What I like about this is that it looks for jobs based on what you want rather than what you already know you can do. It’s in some sense the dual method to what people usually do.
On being an alpha female, part 2
Almost a year ago now I wrote this post on being an alpha female. I had only recently understood that I was an alpha female, when I wrote it, and it was still kind of new and weird.
For whatever reason it’s been coming up a lot recently and I wanted to update that post with my observations.
Who’s burning which bridges?
Last week I wrote an outraged post about seeing Ina Drew at Barnard.
Mind you, I had anticipated I’d find the event objectionable. I had even polled my Occupy friends for prepared questions for her. But when I got there I realized pretty quickly that I wouldn’t be able to ask her anything. I was just too disgusted with the tone and conceit of the event to participate in it reasonably. Instead I live tweeted the event and seethed.
I lost sleep that night fuming about Drew-as-role-model, and I was grateful to be able to get some of my frustration out on my blog.
One of the first comments I received was this one, which said:
Boy Cathy, you sure do know how to burn bridges.
This was, for me, kind of a perfect alpha female moment. My immediate reaction was to think to myself,
They burned bridges with me, you mean.
Since that sounded too arrogant, at the moment anyway, I said something else just slightly less obnoxious. Three points to make here:
- Anyone who doesn’t agree with me about whether Ina Drew should be celebrated can go suck it.
- That post got linked to from Reuters, FT.com, and Naked Capitalism. Which doesn’t happen when you’re worrying about burning bridges.
- When I’m in a certain kind of mood, I’m simply not concerned with other people’s judgments. I think that’s just part of being an alpha female, and I’m grateful for it.
Why grateful? Because lots of shitty things happen when people go around worrying about “burning their bridges” instead of speaking up about bullshit or evil-doing. Or, as Felix Salmon tweeted recently:
Best point made on this #waronwhistleblowers panel: failure to leak has cost many more lives than leaking ever has.
— felix salmon (@felixsalmon) April 17, 2013
Taking notes from an uber alpha female
A few months ago I got an email inviting me to speak in a Python in Finance conference. The email was somewhat weird and kind of just came out and said they need women speakers. I was put in a position of being asked to be a token woman, which is a mindset I don’t enjoy.
I thought about it though, and although I use python, and I used to work in finance, I don’t work in finance any more, and I don’t really think about python too much, I just use it. So I said to the organizer, no thanks, I don’t have anything to say at that conference.
Fast forward to the week before the conference, when I got wind of the agenda. It turned out my friend Claudia Perlich, Chief Data Scientist at m6d and one of the contributors to my upcoming book with Rachel Schutt, was the keynote speaker. I decided to go to the conference essentially because I wanted to see her.
Well, it turned out Claudia had gotten a similar email, and she had accepted the invitation, even though she doesn’t work in finance and doesn’t even use python (she uses perl).
She gave a great talk about modeling blind spots, which everyone enjoyed. It was quite possibly the best talk of the day, in fact. Plus, she wasn’t at all token - having her on the schedule was what made me come to the conference, and I probably wasn’t the only one. And judging by the crowd at the Meetup I gave last night, I would have drawn my own crowd too, if I had been speaking.
I made an alpha female note to myself that day to accept any invitation to a conference that I’d enjoy, even if my expertise isn’t completely within the realm of the conference. I’m learning from Claudia, a master alpha female. Or is it mistress?
Alpha females and self-image
Chris Wiggins recently sent me this essay entitled “A Rant on Women” by Clay Shirky, a writer and professor who studies the social and economic effects of Internet technologies. Here’s the first paragraph:
So I get email from a good former student, applying for a job and asking for a recommendation. “Sure”, I say, “Tell me what you think I should say.” I then get a draft letter back in which the student has described their work and fitness for the job in terms so superlative it would make an Assistant Brand Manager blush.
Guess what? That student is male.
Shirky goes on to vent about how women don’t oversell themselves enough compared to men and how it’s a problem. An excerpt:
There is no upper limit to the risks men are willing to take in order to succeed, and if there is an upper limit for women, they will succeed less. They will also end up in jail less, but I don’t think we get the rewards without the risks.
This made me think about my experience. First, as a Barnard professor, I certainly saw this effect. I’d have men and women come talk to me about letters of recommendations, and not only would I prepare myself for the difference in posture, I’d try to address it directly, by encouraging women to learn how to brag about their accomplishments. I might have tried to convince men a couple of times to stop bragging quite so much, but quickly found that to be a huge waste of time.
But beyond corroborating that this is typical behavior, the essay made me remember myself as a college student.
When I met my thesis advisor, Barry Mazur, who was on sabbatical at UC Berkeley, I remember telling him a math problem I had worked on and solved. He expressed something about liking the problem and being impressed that I’d explained it so well, and I said back,
“Yeah, I’m awesome”
I remember this because of his reaction. At the time, the word “awesome” was widely used among teenagers, but evidently he hadn’t gotten the teenager memo, and he was taken aback by the way I used it. At least that’s what he said. But now that I think about it, maybe he was taken aback that I’d said it at all.
Alpha females and body image
My friend and guest poster Becky recently sent me this video:
It’s about how women have a biased view on their looks, or at least describe their looks to other people in a consistently negatively biased way.
There’s a great critique of this video here (hat tip Avani Patel), wherein fashion and style guru Jennifer Choy complains that the underlying message to the above video is that, in any case, beauty is about all women have going for them, so they should not underestimate their beauty. Plus that all the women in the video were skinny, young, and white.
Great points, but my take was somewhat different.
My immediate reaction to the video was to say, these women need to spend less time thinking about being fat or ugly, and more time thinking about what they think is sexy and attractive. Why is it always about finding flaws in ourselves? Why don’t we spend more time thinking about what turns us on or what we think is beautiful?
I’ll be honest: I think if I had been interviewed in that setting, I would have said something like, “Gorgeous and sexy as hell” and gone on to list my best features. I am not sure I’d have even been able to describe what I look like in any detail, with any accuracy. Most likely I would have just started bragging about my sexy grey streaks. Even more likely: I wouldn’t have had the time to sit down for this interview at all.
Don’t get me wrong, I’ve dabbled in being insecure in my looks: puberty sucked, as did all three post-natal periods until the baby was weaned*, in addition to any time I was ever on the pill**. I’ve concluded that my inherent arrogance is directly related to my hormones, which in turn makes it undeniably tied to my alpha femaleness.
Suffice it to say, when my hormones are not messed up I have “body eumorphia,” where I ignore or downplay any non-perfect parts of my body. It’s a nice feeling.
It kind of makes me want to develop an alpha female hormone treatment. Business model?
UPDATE: Please watch this new spoof video, it’s perfect (except it should be alpha females and men, not just men):
* It gets better when you know it’s going to go away. By the third kid I was like, “gonna cry every day at 3:00pm for the next six weeks. Must schedule that into my calendar.”
** Note to doctors: you need to tell women that the real reason birth control pills work so well is that you lose interest in sex when you’re on them!
War of the machines, college edition
A couple of people have sent me this recent essay (hat tip Leon Kautsky) written by Elijah Mayfield on the education technology blog e-Literate, described on their About page as “a hobby weblog about educational technology and related topics that is maintained by Michael Feldstein and written by Michael and some of his trusted colleagues in the field of educational technology.”
Mayfield’s essay is entitled “Six Ways the edX Announcement Gets Automated Essay Grading Wrong”. He’s referring to the recent announcement, which was written about in the New York Times last week, about how professors will soon be replaced by computers in grading essays. He claims they got it all wrong and there’s nothing to worry about.
I wrote about this idea too, in this post, and he hasn’t addressed my complaints at all.
First, Mayfield’s points:
- Journalists sensationalize things.
- The machine is identifying things in the essays that are associated with good writing vs. bad writing, much like it might learn to distinguish pictures of ducks from pictures of houses.
- It’s actually not that hard to find the duck and has nothing to do with “creativity” (look for webbed feet).
- If the machine isn’t sure it can spit back the essay to the professor to read (if the professor is still employed).
- The machine doesn’t necessarily reward big vocabulary words, except when it does.
- You’d need thousands of training examples (essays on a given subject) to make this actually work.
- What’s so really wonderful is that a student can get all his or her many drafts graded instantaneously, which no professor would be willing to do.
Here’s where I’ll start, with this excerpt from near the end:
“Can machine learning grade essays?” is a bad question. We know, statistically, that the algorithms we’ve trained work just as well as teachers for churning out a score on a 5-point scale. We know that occasionally it’ll make mistakes; however, more often than not, what the algorithms learn to do are reproduce the already questionable behavior of humans. If we’re relying on machine learning solely to automate the process of grading, to make it faster and cheaper and enable access, then sure. We can do that.
OK, so we know that the machine can grade essays written for human consumption pretty accurately. But it hasn’t had to deal with essays written for machine consumption yet. There’s major room for gaming here, and only a matter of time before there’s a competing algorithm to build a great essay. I even know how to train that algorithm. Email me privately and we can make a deal on profit-sharing.
And considering that students will be able to get their drafts graded as many times as they want, as Mayfield advertised, this will only be easier. If I build an essay that I think should game the machine, by putting in lots of (relevant) long vocabulary words and erudite phrases, then I can always double check by having the system give me a grade. If it doesn’t work, I’ll try again.
And the essays built this way won’t get caught via the fraud detection software that finds plagiarism, because any good essay-builder will only steal smallish phrases.
One final point. The fact that the machine-learning grading algorithm only works when it’s been trained on thousands of essays points to yet another depressing trend: large-scale classes with the same exact assignments every semester so last year’s algorithm can be used, in the name of efficiency.
But that means last year’s essay-building algorithm can be used as well. Pretty soon it will just be a war of the machines.
Tweenage angst, RSS feeds, and upcoming talks
Tweenage angst
Do you remember when you were just entering puberty, and absolutely everything was embarrassing? Even your mere existence twisted you in agony?
Well, I just brought my nearly-11-year-old and just-barely-13-year-old sons to their yearly checkups, and let me tell you, it’s painful to be within 10 feet of such exquisite awkwardness: how can you poke and prod this body to some universal understanding of science if I don’t even know its functions or potential grace? If I can’t even imagine it ever being graceful??
RSS feeds
I deleted a post (“Papers I’ve been reading lately”) which had some offending unknown characters that WordPress couldn’t handle, and most people can now read mathbabe again on their readers, except for some reason for people who read mathbabe via WordPress itself. My advice to those people: start using some other reader. Maybe feedly?
Upcoming talks
I’m giving three talks in the next two weeks.
- The first one is this Thursday at the Cornell math department, where I’m once again talking about Weapons of Math Destruction.
- The second one is in Emanuel Derman’s Financial Engineering Practitioner’s Seminar next Monday at Columbia, where I’ll talk about recommendation systems and MapReduce, taking material from Doing Data Science, specifically the chapters contributed by Matt Gattis and David Crawshaw.
- Finally, I’ll be giving the NYC Machine Learning Meetup next Thursday. The announcement of this
is going to be posted some time later this morningis now up, and the content will be similar to the Columbia talk.
Intermezzo II
One of the saddest moments in my life is when they closed the Penn Station Borders book store to replace it with a store dedicated to the “new teen band” One Direction.
Aunt Orthoptera: Advice from an Arthropod
Greetings from Aunt Orthoptera!
(Photo by Becky Jaffe)
This week I am guest blogging for Aunt Pythia, answering all of your queries from the perspective of a variety of insect species, naturally.
——
Dear Aunt Orthoptera,
My friend just started an advice column. She says she only wants “real” questions. But the membrane between truth and falsity is, as we all know, much more porous and permeable than this reductive boolean schema. What should I do?
Sincerely,
Mergatroid
P.S. I have a friend who always shows up to dinner parties empty-handed. What should I do?
Dear Mergatroid,
As I grant your point entirely, I will address only your postscript. What should you do with a friend who shows up to dinner parties empty-handed? Fill her hands with food. As an ant, I have two stomachs: a “social stomach,” and a private stomach. When I pass one of my sisters on our path, we touch each other’s antennae and communicate our needs via pheromones. If she is hungry, we kiss, a process unimaginatively called “trophallaxis” by your scientists. I feed her from my social stomach, and I trust she will do the same for me later – or if not her, exactly, another sister in whom the twin hungers for self-interest and interdependence coexist.
Anatomy as metaphor,
Aunt Orthoptera aka Ms. Myrmecology
(Photo by Becky Jaffe)
——
Dear Aunt Orthoptera,
I am struggling with emotional loneliness. Do you think it is possible to be happy – or even just productive – in life without a stable romantic relationship? If so, how? I have a couple close friends I can talk with, but they are in their own relationships and they are often too busy to have time to talk. I am in my early thirties and never had a girlfriend despite trying for nearly a decade. I have tried speed-dating, been on eharmony, match, ok cupid, asked friends to set me up, asked out a classmate in grad school, joined meetup groups. I am a nice guy but I have my flaws (nothing horrible) – I am kind of introverted, somewhat boring, and am consumed with my career (I’m untenured). It is so hard to meet people that I am compatible with – especially since I am a shy guy (perhaps it’s not surprising I am a math professor – I LOVE my job, by the way). I found ok cupid to be useful for identifying possibly compatible women but most women don’t respond to my messages. I was lucky to manage to get to go on first (and last) dates with two women I messaged on ok cupid last year, and was interested in going on more dates with both, but both of them declined, even though they both told me I seemed like a good person – “you seem like one of the nicest guys I met” is a direct quote, but that they didn’t feel there was any “chemistry”. This month I have been heartbroken over one of them. All this has been affecting my productivity.
Sincerely,
Singleton
Dear Singleton,
In my anthropological studies of humans, I have observed that you are yearning creatures. Your inexorable primateness destines you to a life of longing for social contact. As a solitary insect, I both pity and admire this craving for connection with your kind. My advice to you is to have compassion for your fundamental humanness. Your yearning for pair bonding is normal; it’s in your nature to want to entangle yourself with another. As creatures born of DNA, pair bonding operates at both the molecular level (e.g. Cytosine pair-bonds with Guanine) and the organismal level (woman to man, man to man, woman to woman).
(Photo: Double Helix by Becky Jaffe)
I suspect there’s another lonely strand of DNA out there for you, worth waiting for.
(Photo by Becky Jaffe)
I hope you find your mate!
Flirting with Sociobiology,
Aunt Orthoptera
——
Dear Aunt Orthoptera,
Do you have any self-soothing advice for when self-doubt, lack of confidence, and depression begin to take over?
Sincerely,
Feeling Very Small
Dear FVS,
As a tiny butterfly, I can assure you that it is ok to feel small. Here is my advice to you when you feel this way: Don’t just stop and smell the flowers, nuzzle in them.
(Photo by Becky Jaffe)
Let your worries float away for a little while and drift toward the sweetest thing you can find. When viewed through a compound lens, the whole world can look like nectar.
Spring springs eternal,
Aunt Orthoptera aka Lady Lepidoptera
——
Dear Aunt Orthoptera,
How will you enquire into that which you do not know?
Meno
Excellent question, Musing Meno.
The answer is: with great patience, dear Grasshopper.
(Photo by Becky Jaffe)
Next week, the inimitable Aunt Pythia will return with human advice for you. You can use the form below to submit questions.
Wishing you harmony in your hive and honey to thrive,
Aunt Orthoptera
Guest Post SuperReview Part III of VI: The Occupy Handbook Part I and a little Part II: Where We Are Now
Whattup.
Moving on from Lewis’ cute Bloomberg column reprint, we come to the next essay in the series:
The Widening Gyre: Inequality, Polarization, and the Crisis by Paul Krugman and Robin Wells
Indefatigable pair Paul Krugman and Robin Wells (KW hereafter) contribute one of the several original essays in the book, but the content ought to be familiar if you read the New York Times, know something about economics or practice finance. Paul Krugman is prolific, and it isn’t hard to be prolific when you have to rewrite essentially the same column every week; question, are there other columnists who have been so consistently right yet have failed to propose anything that the polity would adopt? Political failure notwithstanding, Krugman leaves gems in every paragraph for the reader new to all this. The title “The Widening Gyre” comes from an apocalyptic William Yeats Butler poem. In this case, Krugman and Wells tackle the problem of why the government responded so poorly to the crisis. In their words:
By 2007, America was about as unequal as it had been on the eve of the Great Depression – and sure enough, just after hitting this milestone, we lunged into the worst slump since the Depression. This probably wasn’t a coincidence, although economists are still working on trying to understand the linkages between inequality and vulnerability to economic crisis.
Here, however, we want to focus on a different question: why has the response to crisis been so inadequate? Before financial crisis struck, we think it’s fair to say that most economists imagined that even if such a crisis were to happen, there would be a quick and effective policy response [editor's note: see Kautsky et al 2016 for a partial explanation]. In 2003 Robert Lucas, the Nobel laureate and then president of the American Economic Association, urged the profession to turn its attention away from recessions to issues of longer-term growth. Why? Because he declared, the “central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many decades.”
Famous last words from Professor Lucas. Nevertheless, the curious failure to apply what was once the conventional wisdom on a useful scale intrigues me for two reasons. First, most political scientists suggest that democracy, versus authoritarian system X, leads to better outcomes for two reasons.
1. Distributional – you get a nicer distribution of wealth (possibly more productivity for complicated macro reasons); economics suggests that since people are mostly envious and poor people have rapidly increasing utility in wealth, democracy’s tendency to share the wealth better maximizes some stupid social welfare criterion (typically, Kaldor-Hicks efficiency).
2. Information – democracy is a better information aggregation system than dictatorship and an expanded polity makes better decisions beyond allocation of produced resources. The polity must be capable of learning and intelligent OR vote randomly if uninformed for this to work. While this is the original rigorous justification for democracy (first formalized in the 1800s by French rationalists), almost no one who studies these issues today believes one-person one-vote democracy better aggregates information than all other systems at a national level. “Well Leon,” some knave comments, “we don’t live in a democracy, we live in a Republic with a president…so shouldn’t a small group of representatives better be able to make social-welfare maximizing decisions?” Short answer: strong no, and US Constitutionalism has some particularly nasty features when it comes to political decision-making.
Second, KW suggest that the presence of extreme wealth inequalities act like a democracy disabling virus at the national level. According to KW extreme wealth inequalities perpetuate themselves in a way that undermines both “nice” features of a democracy when it comes to making regulatory and budget decisions.* Thus, to get better economic decision-making from our elected officials, a good intermediate step would be to make our tax system more progressive or expand Medicare or Social Security or…Well, we have a lot of good options here. Of course, for mathematically minded thinkers, this begs the following question: if we could enact so-called progressive economic policies to cure our political crisis, why haven’t we done so already? What can/must change for us to do so in the future? While I believe that the answer to this question is provided by another essay in the book, let’s take a closer look at KW’s explanation at how wealth inequality throws sand into the gears of our polity. They propose four and the following number scheme is mine:
1. The most likely explanation of the relationship between inequality and polarization is that the increased income and wealth of a small minority has, in effect bought the allegiance of a major political party…Needless to say, this is not an environment conducive to political action.
2. It seems likely that this persistence [of financial deregulation] despite repeated disasters had a lot do with rising inequality, with the causation running in both directions. On the one side the explosive growth of the financial sector was a major source of soaring incomes at the very top of the income distribution. On the other side, the fact that the very rich were the prime beneficiaries of deregulation meant that as this group gained power- simply because of its rising wealth- the push for deregulation intensified. These impacts of inequality on ideology did not in 2008…[they] left us incapacitated in the face of crisis.
3. Conservatives have always seen seen [Keynesian economics] as the thin edge of the wedge: concede that the government can play a useful role in fighting slumps, and the next thing you know we’ll be living under socialism.
4. [Krugman paraphrasing Kalecki] Every widening of state activity is looked upon by business with suspicion, but the creation of employment by government spending has a special aspect which makes the opposition particularly intense. Under a laissez-faire system the level of employment to a great extend on the so-called state of confidence….This gives capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be avoided because it would cause an economic crisis.
All of these are true to an extent. Two are related to the features of a particular policy position that conservatives don’t like (countercyclical spending) and their cost will dissipate if the economy improves. Isn’t it the case that most proponents and beneficiaries of financial liberalization are Democrats? (Wall Street mostly supported Obama in 08 and barely supported Romney in 12 despite Romney giving the house away). In any case, while KW aren’t big on solutions they certainly have a strong grasp of the problem.
Take a Stand: Sit In by Phillip Dray
As the railroad strike of 1877 had led eventually to expanded workers’ rights, so the Greensboro sit-in of February 1, 1960, helped pave the way for passage of the Civil Rights Act of 1964 and the Voting Rights Act of 1965. Both movements remind us that not all successful protests are explicit in their message and purpose; they rely instead on the participants’ intuitive sense of justice. [28]
I’m not the only author to have taken note of this passage as particularly important, but I am the only author who found the passage significant and did not start ranting about so-called “natural law.” Chronicling the (hitherto unknown-to-me) history of the Great Upheaval, Dray does a great job relating some important moments in left protest history to the OWS history. This is actually an extremely important essay and I haven’t given it the time it deserves. If you read three essays in this book, include this in your list.
Inequality and Intemperate Policy by Raghuram Rajan (no URL, you’ll have to buy the book)
Rajan’s basic ideas are the following: inequality has gotten out of control:
Deepening income inequality has been brought to the forefront of discussion in the United States. The discussion tends to center on the Croesus-like income of John Paulson, the hedge fund manager who made a killing in 2008 betting on a financial collapse and netted over $3 billion, about seventy-five-thousand times the average household income. Yet a more worrying, everyday phenomenon that confronts most Americans is the disparity in income growth rates between a manager at the local supermarket and the factory worker or office assistant. Since the 1970s, the wages of the former, typically workers at the ninetieth percentile of the wage distribution in the United States, have grown much faster than the wages of the latter, the typical median worker.
But American political ideologies typically rule out the most direct responses to inequality (i.e. redistribution). The result is a series of stop-gap measures that do long-run damage to the economy (as defined by sustainable and rising income levels and full employment), but temporarily boost the consumption level of lower classes:
It is not surprising then, that a policy response to rising inequality in the United States in the 1990s and 200s – whether carefully planned or chosen as the path of least resistance – was to encourage lending to households, especially but not exclusively low-income ones, with the government push given to housing credit just the most egregious example. The benefit – higher consumption – was immediate, whereas paying the inevitable bill could be postponed into the future. Indeed, consumption inequality did not grow nearly as much as income inequality before the crisis. The difference was bridged by debt. Cynical as it may seem, easy credit has been used as a palliative success administrations that been unable to address the deeper anxieties of the middle class directly. As I argue in my book Fault Lines, “Let them eat credit” could well summarize the mantra of the political establishment in the go-go years before the crisis.
Why should you believe Raghuram Rajan? Because he’s one of the few guys who called the first crisis and tried to warn the Fed.
A solid essay providing a more direct link between income inequality and bad policy than KW do.
The 5 Percent by Michael Hiltzik
The 5 percent’s [consisting of the seven million Americans who, in 1934, were sixty-five and older] protests coalesced as the Townsend movement, launched by a sinewy midwestern farmer’s son and farm laborer turned California physician. Francis Townsend was a World War I veteran who had served in the Army Medical Corps. He had an ambitious, and impractical plan for a federal pension program. Although during its heyday in the 1930s the movement failed to win enactment of its [editor's note: insane] program, it did play a critical role in contemporary politics. Before Townsend, America understood the destitution of its older generations only in abstract terms; Townsend’s movement made it tangible. “It is no small achievment to have opened the eyes of even a few million Americans to these facts,” Bruce Bliven, editor of the New Republic observed. “If the Townsend Plan were to die tomorrow and be completely forgotten as miniature golf, mah-jongg, or flinch [editor's note: everything old is new again], it would still have left some sedimented flood marks on the national consciousness.” Indeed, the Townsend movement became the catalyst for the New Deal’s signal achievement, the old-age program of Social Security. The history of its rise offers a lesson for the Occupy movement in how to convert grassroots enthusiasm into a potent political force – and a warning about the limitations of even a nationwide movement.
Does the author live up to the promises of this paragraph? Is the whole essay worth reading? Does FDR give in to the people’s demands and pass Social Security?!
Yes to all. Read it.
Hidden in Plain Sight by Gillian Tett (no URL, you’ll have to buy the book)
This is a great essay. I’m going to outsource the review and analysis to:
http://beyoubesure.com/2012/10/13/generation-lost-lazy-afraid/
because it basically sums up my thoughts. You all, go read it.
What Good is Wall Street? by John Cassidy
If you know nothing about Wall Street, then the essay is worth reading, otherwise skip it. There are two common ways to write a bad article in financial journalism. First, you can try to explain tiny index price movements via news articles from that day/week/month. “Shares in the S&P moved up on good news in Taiwan today,” that kind of nonsense. While the news and price movements might be worth knowing for their own sake, these articles are usually worthless because no journalist really knows who traded and why (theorists might point out even if the journalists did know who traded to generate the movement and why, it’s not clear these articles would add value – theorists are correct).
The other way, the Cassidy! way is to ask some subgroup of American finance what they think about other subgroups in finance. High frequency traders think iBankers are dumb and overpaid, but HFT on the other hand, provides an extremely valuable service – keeping ETFs cheap, providing liquidity and keeping shares the right level. iBankers think prop-traders add no value, but that without iBanking M&A services, American manufacturing/farmers/whatever would cease functioning. Low speed prop-traders think that HFT just extracts cash from dumb money, but prop-traders are reddest blooded American capitalists, taking the right risks and bringing knowledge into the markets. Insurance hates hedge funds, hedge funds hate the bulge bracket, the bulge bracket hates the ratings agencies, who hate insurance and on and on.
You can spit out dozens of articles about these catty and tedious rivalries (invariably claiming that financial sector X, rivals for institutional cash with Y, “adds no value”) and learn nothing about finance. Cassidy writes the article taking the iBankers side and surprises no one (this was originally published as an article in The New Yorker).
Your House as an ATM by Bethany McLean
Ms. McLean holds immense talent. It was always pretty obvious that the bottom twenty-percent, i.e. the vast majority of subprime loan recipients, who are generally poor at planning, were using mortgages to get quick cash rather than buy houses. Regulators and high finance, after resisting for a good twenty years, gave in for reasons explained in Rajan’s essay.
Against Political Capture by Daron Acemoglu and James A. Robinson (sorry I couldn’t find a URL, for this original essay you’ll have to buy the book).
A legit essay by a future Nobelist in Econ. Read it.
A Nation of Business Junkies by Arjun Appadurai
Anthro-hack Appadurai writes:
I first came to this country in 1967. I have been either a crypto-anthropologist or professional anthropologist for most of the intervening years. Still, because I came here with an interest in India and took the path of least resistance in choosing to retain India as my principal ethnographic referent, I have always been reluctant to offer opinions about life in these United States.
His instincts were correct. The essay reads like an old man complaining about how bad the weather is these days. Skip it.
Causes of Financial Crises Past and Present: The Role of This-Time-Is-Different Syndrome by Carmen M. Reinhart and Kenneth S. Rogoff
Editor Byrne has amazing powers of persuasion or, a lot of authors have had some essays in the desk-drawer they were waiting for an opportunity to publish. In any case, Rogoff and Reinhart (RR hereafter) have summed up a couple hundred studies and two of their books in a single executive summary and given it to whoever buys The Occupy Handbook. Value. RR are Republicans and the essay appears to be written in good faith (unlike some people *cough* Tyler Cowen and Veronique de Rugy *cough*). RR do a great job discovering and presenting stylized facts about financial crises past and present. What to expect next? A couple national defaults and maybe a hyperinflation or two.
Government As Tough Love by Robert Shiller as interviewed by Brandon Adams (buy the book)!
Shiller has always been ahead of the curve. In 1981, he wrote a cornerstone paper in behavioral finance at a time when the field was in its embryonic stages. In the early 1990s, he noticed insufficient attention was paid to real estate values, despite their overwhelming importance to personal wealth levels; this led him to create, along with Karl E. Case, the Case-Shiller index – now the Case-Shiller Home Prices Indices. In March 2000**, Shiller published Irrational Exuberance, arguing that U.S. stocks were substantially overvalued and due for a tumble. [Editor's note: what Brandon Adams fails to mention, but what's surely relevant is that Shiller also called the subprime bubble and re-released Irrational Exuberance in 2005 to sound the alarms a full three years before The Subprime Solution]. In 2008, he published The Subprime Solution, which detailed the origins of the housing crisis and suggested innovative policy responses for dealing with the fallout. These days, one of his primary interests is neuroeconomics, a field that relates economic decision-making to brain function as measured by fMRIs.
Shiller is basically a champ and you should listen to him.
Shiller was disappointed but not surprised when governments bailed out banks in extreme fashion while leaving the contracts between banks and homeowners unchanged. He said, of Hank Paulson, “As Treasury secretary, he presented himself in a very sober and collected way…he did some bailouts that benefited Goldman Sachs, among others. And I can imagine that they were well-meaning, but I don’t know that they were totally well-meaning, because the sense of self-interest is hard to clean out of your mind.”
Shiller understates everything.
Verdict: Read it.
And so, we close our discussion of part I. Moving on to part II:
In Ms. Byrne’s own words:
Part 2, “Where We Are Now,” which covers the present, both in the United States and abroad, opens with a piece by the anthropologist David Graeber. The world of Madison Avenue is far from the beliefs of Graeber, an anarchist, but it’s Graeber who arguably (he says he didn’t do it alone) came up with the phrase “We Are the 99 percent.” As Bloomberg Businessweek pointed out in October 2011, during month two of the Occupy encampments that Graeber helped initiate and three moths after the publication of his Debt: The First 5,000 Years, “David Graeber likes to say that he had three goals for the year: promote his book, learn to drive, and launch a worldwide revolution. The first is going well, the second has proven challenging and the third is looking up.” Graeber’s counterpart in Chile can loosely be said to be Camila Vallejo, the college undergraduate, pictured on page 219, who, at twenty-three, brought the country to a standstill. The novelist and playwright Ariel Dorfman writes about her and about his own self-imposed exile from Chile, and his piece is followed by an entirely different, more quantitative treatment of the subject. This part of the book also covers the indignados in Spain, who before Occupy began, “occupied” the public squares of Madrid and other cities – using, as the basis for their claim on the parks could be legally be slept in, a thirteenth-century right granted to shepherds who moved, and still move, their flocks annually.
In other words, we’re in occupy is the hero we deserve, but not the hero we need territory here.
*Addendum 1: Some have suggested that it’s not the wealth inequality that ought to be reduced, but the democratic elements of our system. California’s terrible decision-making resulting from its experiments with direct democracy notwithstanding, I would like to stay in the realm of the sane.
**Addendum 2: Yes, Shiller managed to get the book published the week before the crash. Talk about market timing.
Guest Post SuperReview Part II of VI: The Occupy Handbook Part I: How We Got Here
Whatsup.
This is a review of Part I of The Occupy Handbook. Part I consists of twelve pieces ranging in quality from excellent to awful. But enough from me, in Janet Byrne’s own words:
Part 1, “How We Got Here,” takes a look at events that may be considered precursors of OWS: the stories of a brakeman in 1877 who went up against the railroads; of the four men from an all-black college in North Carolina who staged the first lunch counter sit-in of the 1960s; of the out-of-work doctor whose nationwide, bizarrely personal Townsend Club movement led to the passage of Social Security. We go back to the 1930s and the New Deal and, in Carmen M. Reinhart and Kenneth S. Rogoff‘s “nutshell” version of their book This Time Is Different: Eight Centuries of Financial Folly, even further.
Ms. Byrne did a bang-up job getting one Nobel Prize Winner in economics (Paul Krugman), two future Economics Nobel Prize winners (Robert Shiller, Daron Acemoglu) and two maybes (sorry Raghuram Rajan and Kenneth Rogoff) to contribute excellent essays to this section alone. Powerhouse financial journalists Gillian Tett, Michael Hilztik, John Cassidy, Bethany McLean and the prolific Michael Lewis all drop important and poignant pieces into this section. Arrogant yet angry anthropologist Arjun Appadurai writes one of the worst essays I’ve ever had the misfortune of reading and the ubiquitous Brandon Adams make his first of many mediocre appearances interviewing Robert Shiller. Clocking in at 135 pages, this is the shortest section of the book yet varies the most in quality. You can skip Professor Appadurai and Cassidy’s essays, but the rest are worth reading.
Advice from the 1 Percent: Lever Up, Drop Out by Michael Lewis
Framed as a strategy memo circulated among one-percenters, Lewis’ satirical piece written after the clearing of Zucotti Park begins with a bang.
The rabble has been driven from the public parks. Our adversaries, now defined by the freaks and criminals among them, have demonstrated only that they have no idea what they are doing. They have failed to identify a single achievable goal.
Indeed, the absurd fixation on holding Zuccotti Park and refusal to issue demands because doing so “would validate the system” crippled Occupy Wall Street (OWS). So far OWS has had a single, but massive success: it shifted the conversation back to the United States’ out of control wealth inequality managed to do so in time for the election, sealing the deal on Romney. In this manner, OWS functioned as a holding action by the 99% in the interests of the 99%.
We have identified two looming threats: the first is the shifting relationship between ambitious young people and money. There’s a reason the Lower 99 currently lack leadership: anyone with the ability to organize large numbers of unsuccessful people has been diverted into Wall Street jobs, mainly in the analyst programs at Morgan Stanley and Goldman Sachs. Those jobs no longer exist, at least not in the quantities sufficient to distract an entire generation from examining the meaning of their lives. Our Wall Street friends, wounded and weakened, can no longer pick up the tab for sucking the idealism out of America’s youth.We on the committee are resigned to all elite universities becoming breeding grounds for insurrection, with the possible exception of Princeton.
Michael Lewis speaks from experience; he is a Princeton alum and a 1 percenter himself. More than that however, he is also a Wall Street alum from Salomon Brothers during the 1980s snafu and wrote about it in the original guide to Wall Street, Liar’s Poker. Perhaps because of his atypicality (and dash of solipsism), he does not have a strong handle on human(s) nature(s). By the time of his next column in Bloomberg, protests had broken out at Princeton.
Ultimately ineffectual, but still better than…
Lewis was right in the end, but more than anyone sympathetic to the movement might like. OccupyPrinceton now consists of only two bloggers, one of which has graduated and deleted all his work from an already quiet site and another who is a senior this year. OccupyHarvard contains a single poorly written essay on the front page. Although OccupyNewHaven outlasted the original Occupation, Occupy Yale no longer exists. Occupy Dartmouth hasn’t been active for over a year, although it has a rather pathetic Twitter feed here. Occupy Cornell, Brown, Caltech, MIT and Columbia don’t exist, but some have active facebook pages. Occupy Michigan State, Rutgers and NYU appear to have had active branches as recently as eight months ago, but have gone silent since. Functionally, Occupy Berkeley and its equivalents at UCBerkeley predate the Occupy movement and continue but Occupy Stanford hasn’t been active for over a year. Anecdotally, I recall my friends expressing some skepticism that any cells of the Occupy movement still existed.
As for Lewis’ other points, I’m extremely skeptical about “examined lives” being undermined by Wall Street. As someone who started in math and slowly worked his way into finance, I can safely say that I’ve been excited by many of the computing, economic, and theoretical problems quants face in their day-to-day work and I’m typical. I, and everyone who has lived long-enough, knows a handful of geniuses who have thought long and hard about the kinds of lives they want to lead and realized that A. there is no point to life unless you make one and B. making money is as good a point as any. I know one individual, after working as a professional chemist prior to college,who decided to in his words, “fuck it and be an iBanker.” He’s an associate at DB. At elite schools, my friend’s decision is the rule rather than the exception, roughly half of Harvard will take jobs in finance and consulting (for finance) this year. Another friend, an exception, quit a promising career in operations research to travel the world as a pick-up artist. Could one really say that either the operations researcher or the chemist failed to examine their lives or that with further examinations they would have come up with something more “meaningful”?
One of the social hacks to give lie to Lewis-style idealism-emerging-from-an attempt-to-examine-ones-life is to ask freshpeople at Ivy League schools what they’d like to do when they graduate and observe their choices four years later. The optimal solution for a sociopath just admitted to a top school might be to claim they’d like to do something in the peace corp, science or volunteering for the social status. Then go on to work in academia, finance, law or tech or marriage and household formation with someone who works in the former. This path is functionally similar to what many “average” elite college students will do, sociopathic or not. Lewis appears to be sincere in his misunderstanding of human(s) nature(s). In another book he reveals that he was surprised at the reaction to Liar’s Poker – most students who had read the book “treated it as a how-to manual” and cynically asked him for tips on how to land analyst jobs in the bulge bracket. It’s true that there might be some things money can’t buy, but an immensely pleasurable, meaningful life do not seem to be one of them. Today for the vast majority of humans in the Western world, expectations of sufficient levels of cold hard cash are necessary conditions for happiness.
In short and contra Lewis, little has changed. As of this moment, Occupy has proven so harmless to existing institutions that during her opening address Princeton University’s president Shirley Tilghman called on the freshmen in the class of 2016 to “Occupy” Princeton. No freshpeople have taken up her injunction. (Most?) parts of Occupy’s failure to make a lasting impact on college campuses appear to be structural; Occupy might not have succeeded even with better strategy. As the Ivy League became more and more meritocratic and better at discovering talent, many of the brilliant minds that would have fallen into the 99% and become its most effective advocates have been extracted and reached their so-called career potential, typically defined by income or status level. More meritocratic systems undermine instability by making the most talented individuals part of the class-to-be-overthrown, rather than the over throwers of that system. In an even somewhat meritocratic system, minor injustices can be tolerated: Asians and poor rural whites are classes where there is obvious evidence of discrimination relative to “merit and the decision to apply” in elite gatekeeper college admissions (and thus, life outcomes generally) and neither group expresses revolutionary sentiment on a system-threatening scale, even as the latter group’s life expectancy has begun to decline from its already low levels. In the contemporary United States it appears that even as people’s expectations of material security evaporate, the mere possibility of wealth bolsters and helps to secure inequities in existing institutions.
Lewis continues:
Hence our committee’s conclusion: we must be able to quit American society altogether, and they must know it.The modern Greeks offer the example in the world today that is, the committee has determined, best in class. Ordinary Greeks seldom harass their rich, for the simple reason that they have no idea where to find them. To a member of the Greek Lower 99 a Greek Upper One is as good as invisible.
He pays no taxes, lives no place and bears no relationship to his fellow citizens. As the public expects nothing of him, he always meets, and sometimes even exceeds, their expectations. As a result, the chief concern of the ordinary Greek about the rich Greek is that he will cease to pay the occasional visit.
Michael Lewis is a wise man.
I can recall a conversation with one of my Professors; an expert on Democratic Kampuchea (American: Khmer Rouge), she explained that for a long time the identity of the oligarchy ruling the country was kept secret from its citizens. She identified this obvious subversion of republican principles (how can you have control over your future when you don’t even know who runs your region?) as a weakness of the regime. Au contraire, I suggested, once you realize your masters are not gods, but merely humans with human characteristics, that they: eat, sleep, think, dream, have sex, recreate, poop and die – all their mystique, their claims to superior knowledge divine or earthly are instantly undermined. De facto segregation has made upper classes in the nation more secure by allowing them to hide their day-to-day opulence from people who have lost their homes, job and medical care because of that opulence. Neuroscience will eventually reveal that being mysterious makes you appear more sexy, socially dominant, and powerful, thus making your claims to power and dominance more secure (Kautsky et. al. 2018).*
If the majority of Americans manage to recognize that our two tiered legal system has created a class whose actual claim to the US immense wealth stems from, for the most part, a toxic combination of Congressional pork, regulatory and enforcement agency capture and inheritance rather than merit, there will be hell to pay. Meanwhile, resentment continues to grow. Even on the extreme right one can now regularly read things like:
Now, I think I’d be downright happy to vote for the first politician to run on a policy of sending killer drones after every single banker who has received a post-2007 bonus from a bank that received bailout money. And I’m a freaking libertarian; imagine how those who support bombing Iraqi children because they hate us for our freedoms are going to react once they finally begin to grasp how badly they’ve been screwed over by the bankers. The irony is that a banker-assassination policy would be entirely constitutional according to the current administration; it is very easy to prove that the bankers are much more serious enemies of the state than al Qaeda. They’ve certainly done considerably more damage.
Wise financiers know when it’s time to cash in their chips and disappear. Rarely, they can even pull it off with class.
The rest of part I reviewed tomorrow. Hang in there people.
Addendum 1: If your comment amounts to something like “the Nobel Prize in Economics is actually called the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” and thus “not a real Nobel Prize” you are correct, yet I will still delete your comment and ban your IP.
*Addendum 2: More on this will come when we talk about the Saez-Delong discussion in part III.
Guest Post SuperReview Part I of VI: The Occupy Handbook
Whassup.
It has become a truism that as the amount of news and information generated per moment continues to grow, so too does the value of aggregation, curation and editing. A point less commonly made is that these aggregators are often limited by time in the sense, whatever the topic, the value of news for the median reader decays extremely rapidly. Some extremists even claim that it’s useless to read the newspaper, so rapidly do things change. The forty eight hours news cycle, in addition to destroying context, has made it impossible for both reporters and viewers to learn from history. See “Is News Memoryless?” (Kautsky et. al. 2014).
A more promising approach to news aggregation (for those who read the news with purpose) is to organize pieces by subject and publish those articles in a book. Paul Krugman did this for himself in The Great Unraveling, bundling selected columns from 1999 to 2003 into a single book, with chapters organized by subject and proceeding chronologically. While the rise and rise of Krumgan’s real-time blogging virtually guarantees he’ll never make such an effort again, a more recent try came from uber-journalist Michael Lewis in Panic!: The Story of Modern Financial Insanity. Financial journalists’ myopic perspective at any given point in time make financial column compilations of years past particularly fun(ny) to read.
Nothing is staler than yesterday’s Wall Street journal (financial news spoils quickly) and reading WSJ or Barron’s pieces from 10 to 20 years ago is just painful.
The title PANIC: The story of modern financial insanity led me to believe the book was about the current crises. The book does say, in very, very fine print “Edited by” Michael Lewis.
-Fritz Krieger, Amazon Reviewer and chief scientist at ISIS
Unfortunately, some philistines became angry in 2008 when they insta-purchased a book called Panic! by Michael Lewis and to their horror, discovered that it contained information about prior financial crises, the nerve of the author to bring us historical perspective, even worse…some of that perspective relating to nations other than the ole’ US of A.
As the more alert readers have noted, almost nothing in the book concerns the 2008 Credit Meltdown, but instead this is merely a collection of news clippings and old magazine articles about past financial crises. You might as well visit a chiropodist’s office and offer them a couple of bucks for their old magazines.
Granted, the articles are by some of today’s finest and most celebrated journalists (although some of the news clippings are unsigned), but do you really want to read more about the 1987 crash or the 1997 collapse of the Thai Baht?
Perhaps you do, but whoever threw this book together wasn’t very particular about the articles chosen. Page 193 reprints an article from “Barron’s” of March, 2000 in which Jack Willoughby presents a long list of Internet companies that he considered likely to run out of cash by 2001. “Some can raise more funds through stock and bond offerings,” he warns. “Others will be forced to go out of business. It’s Darwinian capitalism at work.” True, many of the companies he listed did go belly-up, but on his list of the doomed are
[..]Amazon.com- Someone named Keith Otis Edwards
Perhaps because I was abroad for both the initial disaster and the entire Occupation of Zucotti Park, both events have held my attention. So it is with a mixture of hope and apprehension that I picked up Princeton alum Janet Byrne’s The Occupy Handbook from the public library. The Occupy Handbook is a collection of essays written from 2010 to 2011 by an assortment of first and second-rate authors that attempt to: show what Wall Street does and what it did that led to the most recent crash, explain why our policy apparatus was paralyzed in response to the crash, describe how OWS arose and how it compared with concurrent international movements and prior social movements in the US, and perhaps most importantly, provide policy solutions for the 99% in finance and economics. Janet Byrne begins with a heartfelt introduction:
One fall morning I stood outside the Princeton Club, on West 43rd Street in Manhattan. Occupy Wall Street, which I had visited several times as a sympathetic outsider, has passed its one month anniversary, and I thought the movement might be usefully analyzed by economists and financial writers whose pieces I would commission and assemble into a book that was analytical and- this was what really interested me – prescriptive. I’d been invited to breakfast to talk about the idea with a Princeton Club member and had arrived early out of nervousness.
It seemed a strange place to be discussing the book. I tried the idea out on a young bellhop…
And so it continues. The book is divided into three parts. Part I, broadly speaking, tries to give some economic background on the crash and the ensuing political instability that the crash engendered, up to the first occupation of Zuccotti Park. Part II, broadly speaking, describes the events in Zuccotti Park and around the world as they were in those critical months of fall 2011. Part III, broadly speaking, prescribes solutions to current depression. I say broadly speaking because, as you will see, several essays appear to be in the wrong part and in the worst cases, in the wrong book.
“The problem here is not the message. The problem is the messenger.”
Today’s post is basically going to consist of me wishing I’d written this Gawker piece which was actually written by Hamilton Nolan and was entitled “It Would Be Great if Millionaires Would Not Lecture Us on ‘Living With Less’”.
To enjoy it as much as I did, you’d have to read this New York Times Opinion piece first, in which Graham Hill, who made a bajillion dollars in the dot com era, realizes he had too much stuff and now has less stuff and is telling us how great it is. Most cloying line: “the things I consumed ended up consuming me.”
At the risk of quoting Nolan’s entire article (the title of my post is his), let me start you with this:
There is something about achieving great financial success that seduces people into believing that they are life coaches. This problem seems particularly endemic to the tech millionaire set. You are not simply Some Fucking Guy Who Sold Your Internet Company For a Lot of Money; you are a lifestyle guru, with many important and penetrating insight about How to Live that must be shared with the common people.
We would humbly request that this stop.
I’ll skip over some parts and get to where he talks about Amanda Palmer:
The problem here is not the message. The problem is the messenger. More specifically, it is the messenger using his own life as supporting evidence for the message. Were Graham Hill to simply write a fact-based essay arguing that Americans should cut down on material possessions in order to save the environment and gain peace of mind, he would doubtless hear a chorus of support. But for Graham Hill, a young millionaire who was fortunate enough to sell his “pre-Netscape browser” at the high point of the internet bubble, to say to the average American, “My journey through the perils of great wealth has bestowed me with wisdom that is directly applicable to you” is simply false. It is no wonder that Hill loved the recent TED talk by millionaire musician Amanda Palmer, in which she argued that it was perfectly fair for her to, for example, accept a free night of lodging in the home of poor Honduran immigrants and not pay them for it, because the beauty of her music is payment enough. Both are insulated enough from the realities of personal finance to forget about them entirely.
True! And I’d add more in the Amanda Palmer case. She and I went to the same high school and I have known her since she was in 7th grade.
I’ll tell you what. She’s not your average artist. She’s hugely exhibitionist. This has worked great for her, but is not a typical artistic personality. In fact she’s essentially a cult leader. So yes, when you’re an artist/ cult leader, it makes sense to “let your fans pay you”. But if you’re a typical starving, introverted, sensitive soul, then not so much. How can she speak for all artists and ask them to do stuff just like her? Or rather, why does she think it would scale?
Mind you, I’m guilty of this problem too. When I give advice, which I do all the time, I pretty much always tell people what works for me. But my evidence that the same approach would work for them is slight.
That begs the question, how do we do better than this? How do we tailor our advice to make it useful?
A blogging parliament
Last night I found myself watching Steve Waldman’s talk at the 2011 Economic Bloggers Forum at the Kaufman Foundation. I’m a big fan of Waldman’s blog Interfluidity. His talk was interesting and thought-provoking, like his writing. I suggest you watch it.
After expressing outrage at the failure of control systems and the political system after the financial crisis, Waldman asks the question, why are we where we are? His answer: there’s a monopoly of power in this country even as information itself is increasingly available. The monopoly of power is extremely correlated, of course, to the rising wealth inequality, beautifully visualized in this recent video (h/t Leon Kautsky, Debika Shome) by Politizane.
The solution, he hopes, may include the blogosphere (although it’s not a perfect place either, with its own revolving doors, weird incentives and possibly conflicts of interest). The work of bloggers is valuable social capital, Steve argues, so how do we deploy it?
Steve introduced the concept of policy entrepreneurs, which have three characteristics:
- They are sources of information in the form policy ideas. They possible even write laws.
- They have some kind of certification in order to cover the policy maker’s ass.
- They exert some kind of influence on policy makers, to create incentives for their policy goals.
In other words, a policy entrepreneur is someone in the business of shaping policy makers’ agendas.
If you stop there, you might think “lobbyist,” and you’d be right. But the problem with our current lobbyist system is not the above three characteristics, but rather that it’s a such a closed system. In other words, you essentially need to be rich to be an influential lobbyist (or at least, as an influential lobbyist, you are backed by enormous wealth), but then that increases the monopolistic nature of political power. It doesn’t solve our “monopoly of power” problem.
The question becomes, is there a way for normal people, or groups of people, to be policy entrepreneurs?
One possible solution, Waldman suggests, is to from a parliament of bloggers. Since groups are taken seriously, can bloggers form official groups in which they gain consensus around a topic and issue policy?
An intriguing idea, and I like it because it’s not really abstract: if bloggers decided to try this, they could literally just form a group, call ourselves a name, and start issuing policy proposals. Of course they’d probably not get anywhere unless we had influence or leverage.
Does something like this already exist? The closest thing I can think of is the hacker group Anonymous - although they might not be bloggers, they might be. They’re anonymous. I’m going to guess they are active on the web even if they don’t specifically blog. In any case, let’s see if they qualify as policy entrepreneurs in the above sense.
- They don’t issue specific policy proposals, but they certainly object clearly to policies they don’t like.
- Their credentials lie in their unparalleled ability to take control of information systems.
- Likewise, their leverage is fierce in this domain.
In all, I don’t think Anonymous fits the bill – they’re too devoted to anarchy to deliver policy in the sense that Waldman suggests, and their tools are too crude to make fine points. This might have to do with the nature of hackers in general (keeping in mind that Anonymous stand for something far more extreme than the average hacker), which I read about in an essay by Paul Graham yesterday (h/t Chris Wiggins):
Here’s another problem: aren’t bloggers in general kind of their own 1%? Is policy via a “parliament of bloggers” not enough of an improvement to the current system of insiders?
What about if Occupy got into the idea of being a vehicle of policy entrepreneurship? Even though we tend not to support specific political candidates in Occupy, we do consistently think about policy and decide whether to endorse a given bill or policy proposal. Could we, instead of commenting on existing policy, start thinking about proposing new policy, even to the point of writing new laws?
On the one hand such work requires enormously long discussions and difficult-to-obtain consensus, but on the other hand we have the knowledge, the abilities, and the moral persuasion. Do we have the influence? And would Occupiers think exerting influence on policy in the current corrupt system tantamount to selling out?
Nasty reader comments and blogging
I’m pretty sure you guys know this already, but I love my regular readers and commenters. It’s a large part of why I blog – I feel like I’m having a super interesting cocktail party every morning in my underwear. I’m investing in the quality of the rest of my day, stealing a moment before my family wakes up so I can articulate one single idea. The payoff is, most of the time, dependably good conversation that lasts all day, or even more than a day, as your comments and emails come in.
Of course, there are sometimes nasty people and comments in addition to thoughtful ones. Not everyone interprets me as trying to figure stuff out, they think I’m being intentionally asinine or manipulative. Or sometimes they just don’t agree with me, and instead of explaining their reasoning they just yell. Or sometimes they are just jerks, getting out their aggression on a stranger.
My first rule is to allow comments that disagree with me, as long as the reasons are articulated and as long as the comment isn’t abusive. Rude is ok, “you are stupid” is not ok.
My second rule is to have a thick skin. I can completely ignore the sentiment of an abusive commenter calling me names, because first of all I’ve heard it all before and second I’m pretty sure it’s not about me.
I’m not saying it doesn’t bother me at all, because obviously it’s a pain to have to go through my email and make sure people are being civil.
For example, whenever I get onto the top 10 of Hacker News, which has been a few times now, I’ve noticed a huge wave of nasty comments. Of course this could be a direct result of how many people I get (thousands per hour), but I don’t think so – the ratio of interesting to abusive comments coming from Hacker News traffic is tiny. It creates nasty work for me, which I feel compelled to do because letting nasty comments stay on my blog makes me feel violated and intentionally misunderstood.
This morning I found this article via Naked Capitalism regarding reader comments, and how nasty ones make subsequent readers evaluate the message differently, and in particular, more negatively. In other words, my intuition was right – it’s super important to curate comments.
My experience with Hacker News has also given me sympathy for Izabella Laba‘s position that she doesn’t accept comments on her blog (read this post for example). She puts herself out there, with strong opinions, and many of her posts are important and thought-provoking. And by the same token people can get pretty threatened by what she has to say. I can well imagine what her experience has been. What if every day was a Hacker News day? What if a majority of comments contained ridiculous and personal attacks? Yuck.
Makes me even more grateful to have you guys.
Prices in the junk bond market
There are various ways of deciding how valuable something is. People spend some amount of time talking about “the current value of future earnings til the end of time” as a rule-of-thumb measurement. That sometimes works (i.e. jives with what the selling price is), but it’s certainly not robust – in a given case, plenty of people think there’s a good reason a stock should be worth more than that, if their personal growth projections are rosy (you could argue that they are still valuing future earnings, but they’ve got a different projection than, say, the current dividends continued as is. Another possibility is that they’re simply valuing future values coming from other people). Similarly, some stocks are underpriced with respect to this baseline. Could it be that they’re cooking their books? If they don’t last til the end of time then they could hardly be making earnings til then (Groupon).
Of course when you go down that road, nothing lasts til the end of time. Never mind companies, the industry in which the company sits will be dead before too long unless it’s food or cosmetics.
Anyway, throw out the future earnings price for a moment, and replace it by something else entirely: there’s a certain amount of money invested in the (international) market at a given moment, and it has to go somewhere. I think of it as a big pot that sloshes around and achieves equilibrium depending on various things like relative interest rates in different countries, and to a lesser extent, regulation in different countries and access to markets. Like, the carry trade is kind of a big deal, and depends almost entirely on the Japanese interest rate being tiny.
Of course it’s not really that simple, since people can and do remove money from the market at certain times – it’s not a closed system. But not as much money is removed as you might think, because if you think about it, lots of people have set up their livelihoods to be investing large pots of money, so they need to appear busy.
Articles like this one from Bloomberg make me think about the “where should we put our money that we need to invest somewhere?” effect is particularly strong right now. We see people “chasing yield” in the junk bond market, buying junk bonds that have positive yields because their options are limited while the Fed keeps the rates really low (this is not a side-effect of the Fed’s keeping the rates low, it’s their goal. They want people to invest in financing businesses, which is what buying junk bonds is).
But they (the investors) all want the same stuff, so the prices are too low high, which is another way of saying the yields are a lot lower than they’d otherwise be if there were other things to buy. This might be a good example of where the price of junk debt is not particularly good at exposing the actual risk of default. Well, it might be an ok indicator of the very short-term default rate, but that’s just because money is so cheap right now, businesses in trouble can just borrow more. It’s kind of a set-up for a bubble.
The article makes the point that once the Fed raises rates, people will flee this market, since they will actually be able to make money again with less risky bonds. The slower actors will be left with much-reduced-in-value junk debt. The big pot of money which is the market will have an entirely new equilibrium point, and there will be lots of death and destruction in the transition. It’s become even more crucial than usual to time the Fed’s moves, but keep in mind money managers are going to stay in there as long as they possibly can because they don’t want to miss yield while their bonuses depend on it (“opportunity costs”). It’s a game of chicken.
Staying with the meta-analysis, can someone do a back-of-the-envelope estimate of how much built-in interest rate risk we’ve taken on by the issuance of so much junk debt in the overall international portfolio? Is it sizeable?
52 Shades of Greed card decks now available for purchase!
