Economics and similar, for the sleep-deprived

A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?

Update: seemingly not

Update: Oh yeah!


Tuesday, September 26, 2006

 
Skive of the week

The Financial Services Authority is going to be carrying out a "six week simulation exercise of an Asian flu pandemic". That's pretty impressive; two weeks of malingering was my personal best when I was a civil servant.
2 comments this item posted by the management 9/26/2006 11:19:00 PM

Tuesday, September 19, 2006

 
Our long dark night of competent local administration is coming to an end

Check it out, Camdenites. I was more or less resigned to this sort of crap when I made my protest vote earlier in the year. Ah well. It is not as if this sort of thing was completely unknown in Camden under Labour; there was a famous incident in which a meeting held to congratulate local Asian youth for putting an end to nasty gang violence broke up in riots, after the assembled youths were forced to sit through four hours of speeches and starting taunting one another to ease the boredom.
0 comments this item posted by the management 9/19/2006 12:39:00 AM

Monday, September 18, 2006

 
"Tail events" : phrase considered harmful

I'll hopefully have something to say later about this intelligent but in my opinion rather wrongheaded speech (via Felix Salmon). In the meantime, just a brief linguistic quibble.

Crashes, defaults and such like should not be referred to as "tail events". I prefer "large loss events" or "large events". Even "rare events" is much better, although it brings out into the open the hidden assumption that events of this sort are rare, which could be controversial in some instances.

However, "tail events" is much worse. It makes the implicit claim that not only are these events rare (which is a factual and falsifiable statement), but that there is some probability distribution whose tails describe them. This is a statement that is in the worst scientific standing possible; it is not falsifiable by experiment, but there is good reason to believe that it is nonetheless false. The conditional likelihood of something like World War 2, the invention of the Internet or the 1970s oil shocks is not something that is determined by a single underlying data-generating process, and the fact that you can massage the data to kindasorta fit some kind of power law does not change this. Even though I am not as much of a fan of Paul Davidson as I was when I started this blog, some things are nonergodic; there are "crucial experiments" which change the nature of the world. There is no immutable underlying reality for these large events to be "tail events" of.

In any case, it isn't a sensible way to think about big events as outliers from the standard mean-variance paradigm. They're historical, unique events with specific causes and effects. As I regularly find myself having to remind cadet risk managers with newly-minted PhDs in financial econometrics, the Great Depression did actually happen; it wasn't just a particularly innaccurate observation of the underlying 4% rate of return on equities.
0 comments this item posted by the management 9/18/2006 01:35:00 AM

Friday, September 15, 2006

 
Strange bedfellows

Check it out. In the name of supporting the Darfur protests at the Sudanese embassy, I am signed up to a group letter, featuring a number of names in whose company I would normally not care to be seen. You want to know how important Darfur is? It's more important than my vanity and petty blog feuds, that's how important it is. (Update: I seem to remember that something similar was among George Galloway's post hoc excuses for visiting Saddam Hussein. I hereby admire Alan "Not the Minister" Johnson's indefatigability, courage etc)

Brian Brivati drafted the letter, and it is about right as a general, minimal statement with no specific Decent content. If one takes seriously the fact that Darfur is facing immediate humanitarian crisis, then the only priority at the moment has to be to get some sort of peacekeeping force in there which is sufficient to allow the aid agencies to work. The Sudanese government definitely ought to let UNMIS in, and their attempt to run out the clock on AMIS definitely ought to count against them (in hell if not in the ICC, as I have said before). I frankly consider the UN's behaviour with respect to AMIS to be absolutely scandalous and would vastly rather see a credible African mission being funded, but this does not look politically possible at present, so UNMIS it is, although not at the expense of war.

Here's a good article on the great power angle in Darfur, via Jamie. I don't agree with their analysis of the DPA, which appears to be straight outta Maynooth, and I think they are quite confused on the subject of John Garang, but they have the big picture particularly right. In particular, they are right on the money with their assessment of al-Bashir's current position; friendless, up against the wall and running out of options. It's for this reason that I'm pessimistic about the ability of demonstrations to move the Sudanese government, but that's no reason not to try.
1 comments this item posted by the management 9/15/2006 05:22:00 AM

Monday, September 11, 2006

 
Public service announcement

"Gaddafi: The Myth" is currently playing at the ENO; I think there are a few performances left this week. It has got the most unbelievably stinking reviews, all of them from opera bores who hate it because there's no singing, or from theatre critics who feel that they ought to call anything that deals with current events "simplistic", because of course the theatre critic of Metro is a fucking expert on African politics of the 1970s. The reviews are bullshit. Go and see it, it is awesome. I would agree that the Asian Dub Foundation's soundtrack is a little bit relentless (a lot of the problem is AFAICS that the Coloseum sound system was very rudimentary, with all of the amplified music coming from two big stacks of speakers on the left and right hand side of the stage; this means the sound is really flat and exhausting to listen to compared to a cinema-style four-speaker mix). But what nobody has mentioned in any review I've read is the staging; there are some truly extraordinary coups of physical theatre in there - I won't spoil anything but there are about a dozen "gasp out loud" moments. It is very definitely worth a watch.
0 comments this item posted by the management 9/11/2006 12:45:00 AM

Thursday, September 07, 2006

 
No Riff-Raff

Entering into the Brad DeLong Eat The Rich Controversy, I offer this observation:

If it is not the case "that the rich are spiteful--that they enjoy the envy of the poor", then why is the word "exclusive" so popular in the marketing material for hotels, nightclubs, holiday resorts and residential property developments.

"Exclusive" is probably these days an advertising man's synonym for "nice", but it also has a clear and specific literal meaning. It means that the hotel, nightclub, resort etc is providing a bundled service; partly, the provision of a normal hotel or nightclub, and partly the service of excluding a segment of the population from that service. One pays extra to go to a health club whose swimming pool is not polluted by the greasy, hairy polloi.

The reason that this service is valuable is that those who consume it get utility from a) dividing society into two groups, rich and poor, b) creating institutions which physically and socially segregate these two groups and c) them being in the "rich" group.

Nobody would apply for membership of Bouji's or the Bucks if it was just a matter of waiting your turn and paying your fee. This would completely defeat the point of the exercise and destroy the value proposition. The point is that in order to attract a better class of customer, you have to keep the riff-raff out. Basil Fawlty understood this; why doesn't the blogosphere?
1 comments this item posted by the management 9/07/2006 03:19:00 AM

Wednesday, September 06, 2006

 
Comments test

comment away, if this works
1 comments this item posted by the management 9/06/2006 01:48:00 PM
 
The conflict in Darfur, Maynooth branch

Someone was asking in the comments below if it wasn't all a bit silly and self-important for me to be pretending that the ins and outs of left wing blogs and the Comment Is Free website were potentially having an effect on outcomes in Darfur. Check this out, via Sudan Watch. It's an Open Letter from the JEM/NRF, which is the rebel movement responsible for breaking the ceasefire in Darfur and undermining the US-led peace agreement. (The guy says that "Minnawi�s forces have melted down" implying that they have disbanded due to lack of popular support, but actually his lot killed them). Obviously I do not exculpate the Khartoum regime for whatever they are doing behind the news blackout in North Darfur, and their operation in el-Fasher is a breach of the peace agreement too, but it is pretty definite that the peace was holding until the faction of which Dr. Abdullahi Osman El-Tom is a representative broke it. (One interesting detail in this open letter is that El-Tom does not accuse SLA/Minnawi forces of having started the violence).

And it turns out that Dr El-Tom is a lecturer in Anthropology at the National University of Ireland, Maynooth. His research interests are in Development, Globalization and Political Conflicts. And he is apparently empowered to speak on behalf of the JEM/NRF (the NRF is the JEM plus SLA/G19, plus, in the opinion of Jan Pronk, a lot of Middle Eastern money and weapons).

I don't doubt that this guy is sincere in his views and has the best interests of Darfur at heart. I suspect that he is the contact that "Faycan" in the CiF Darfur discussion threads refers to having spoken too. However, he is clearly involved in the decision-making process of the JEM, which means that when they are deciding whether to accept a peace deal or to reject it, it will be Abdullahi Osman el-Tom's view of how likely they are to get a UN force backing them up that they will be considering.
1 comments this item posted by the management 9/06/2006 05:24:00 AM

Monday, September 04, 2006

 
Why did I think this was a good idea?

(NB: this is a duplicate post due to comments troll issues. The original comments, minus the one in which somebody tried to "out" somebody which is not allowed, are here. In my opinion you are not missing much)

While my readers are helping me with things, here's another one: I said here that I was going to try to go along to the Euston Manifesto Group's meeting on Darfur. They were all very nice about sorting me out a ticket at late notice and I was quite looking forward to it.

On the other hand, take a look at this. (For readers not au fait with UK inside blogsball stuff, the "Drink Soaked Popinjays For War" blog are basically Decentists whose main distinguishing characteristic is that they can't stand me).

Basically, did it ever make sense to go along to a Euston Manifesto meeting? I was all full of the well-known solidarity and such like (I'd basically decided not to say anything at the meeting and to try and talk to a couple of them afterwards). But I have zero interest in wasting an evening's babysitting on getting collared and harangued by a couple of bores who don't like me. And I doubt that the Euston Manifesto Group wants an unedifying and nasty argument hanging around their Darfur meeting. Fuck that; if someone wants to score points off me I have a blog for that purpose. Am I wrong, or was trying to play nice with the Decent Left always a dumb idea?

In related news, the African Union troops are shipping out precisely because they have had their funding (which the UN promised but never paid), their mandate (which has been allowed to time out because people were anticipating a UN force) and their legitimacy (by irresponsible commentators who allowed Nur and JEM to push the disgusting lie that AMIS were in league with the Khartoum government) systematically undermined by the fucking pro-intervention lobby. Congratulations, guys, you wanted the AU out and they are now leaving. Now let's see all those other peacekeepers you were going to provide. What - there isn't really any plan to get hold of them? Wouldn't it have been a good idea to fucking check that before you started flapping your gums?

No, of course, this is all the UN's fault for not being able to pull magic armies out of its arse. Well, this certainly advances your case for a strengthened mandate, NATO leadership and a "responsibility to protect", although it does seem rather a shame that you had to build it on the backs of the poor old fucking Darfurians.
0 comments this item posted by the management 9/04/2006 12:45:00 AM
 
Martin Amis: a philosophical conundrum

After reading this piece in my Sunday newspaper, an interesting question occurred to me which I wonder if readers could help me with.

What would Martin Amis have to do in order to lose his reputation as a "major" or "important" writer? Is there literally anything that he could write which might make literary editors and critics say "actually this man is really rather untalented"? Or has he achieved a sort of event horizon of writerliness, at which his seriousness and density have become so great that there can be no escape? I suspect the latter; surely a reputation that has survived "Koba the Dread", survived "Yellow Dog" and now survived this, must be indestructible. Long after the nuclear holocaust when we are all dead, the cockroaches that crawl through the ashes of Western civilisation will still take Martin Amis seriously, although none of them will know why.
0 comments this item posted by the management 9/04/2006 12:18:00 AM

Friday, September 01, 2006

 
Good god, this bloke's pathological

He's having a go at the fish now
0 comments this item posted by the management 9/01/2006 10:21:00 AM
 
Why don't payday lenders own the entire world?

Lots of stories about the blogosphere about payday lenders working at military bases. It does really suck to be poor, and I would not want to disagree with the general tenor of the stories that this is a nasty state of affairs, but I have always disliked a particular way of presenting shock-horror numbers in coverage of the small-ticket lending sector and this is as good a hook to hang it on as any.

The story I've linked to refers to a "780% interest rate". Jeepers! That's dot com money! What happens to money if you are earning compound interest on it at 780 per cent?

I've just opened up a spreadsheet and found out. If you invest $1000 at 780% compound, then in five years it has grown to $52m, and in eight years it is $35trn, which is roughly the GDP of the entire world. After ten years you have $2.75 quadrillion, which is enough to buy the world five times over assuming a PER of 15.

Clearly this is not the case; payday lenders do not own the entire world, so we can assume that they are not getting 780%. So what's happening?

You might think it's something to do with loan defaults but it isn't, not really. It's an artifact of the mathematics of compounding. Say I lend you $30 until payday in ten days' time, and my administrative costs of doing this are $1.71 (ie, twenty minutes' time for a clerk on minimum wage) . If I'm going to cover my costs, then that's a 5.7% charge per ten day loan. To convert this to an annual percentage rate, take 1.057^(365/10)-1, which is 656%! What's at work here is that, if there is any element of fixed costs, then it is very inefficient indeed to borrow small amounts of money for short periods of time.

I don't think it makes sense, therefore, to think about payday loans in terms of APRs. Sure, it would be cheaper for the clients of payday lenders to borrow at credit card rates of 17.9% APR, but this is just saying that it would be cheaper for them not to be poor.

(I think that this is why "microfinance" was a silly idea too, btw, and note that almost everything carried out under that name today is just perfectly straightforward banking in the Third World. Lending to a farmer to buy a tractor is a fine thing to do, but it isn't microfinance).
2 comments this item posted by the management 9/01/2006 04:53:00 AM


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