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!

Thursday, November 24, 2011

Stylebook again

People who are "rapidly aging":

Bilbo Baggins in Lord of the Rings
Dorian Gray when his portrait is destroyed
The twin brother of a spaceman travelling at 99% of the speed of light, from the spaceman's frame of reference.

People who are not "rapidly aging":

The population of Europe
The population of Japan

Every hack writer on demographics commits this solecism, but that doesn't make it OK.
4 comments this item posted by the management 11/24/2011 06:11:00 AM

Wednesday, November 16, 2011

What would happen if people moved from banking and consultancy into more "productive" sectors?

You'd get a lot more of this kind of behaviour. I suspect.

Not really. This guy was a banker out of university, but never rose above VP level and has been a "technology entrepreneur" since 1995. He's one of yours, not one of ours. In general, the one constant refrain I hear from colleagues who have the misfortune of dealing with them is that the general ethical standards and basic managerial competence of technology industry executives is incredibly low[1], only football clubs are more reviled. This may be because lots of the really good tech administrators have been in banking for the last ten years (building what amounts to a quite large, very fast, very very reliable and very very very secure telecoms network; this is what most of "algorithmic trading" is about, the actual algorithms are often surprisingly nugatory). But I think not.

The Guardian (and its comments section) has a fine line in saying that what the financial crisis shows us is that the people who claimed to be the best candidates to run the world economy because of their superior skills, were lying and were no better than the general population. I think we also have to consider the frightening possibility that they were.

[1] Media industry people, on the other hand - very high. Which is odd, since Zygna is by any sensible classification a media company.
14 comments this item posted by the management 11/16/2011 11:22:00 PM

Tuesday, November 15, 2011

The "Economic Naturalist" series are actually the least annoying pop-econ books by a long way

... an economist writes:

This, from Dawkins, would be fair enough if he and his daughter had been hiking in Snowdonia, or across some tundra somewhere. But the "English Countryside" (Oxfordshire, I suppose?) is pretty much as man made as a landscape can get. If there is a wild flower growing there, it is growing because somebody has made a more or less conscious decision not to put weedkiller on it or plough it into a field. Particularly if it is "by the wayside", ie next to a road, or in a hedgerow (a hedgerow also being an entirely man made environment).

See also; the "intelligent design" of dogs. There was once an ur-dog, wolflike ancestor, and the process by which that ur-dog has Paris Hilton's handbag poodle as a descendant did, in a strict sense, operate by environmental selection on random genetic variation. But if some burst of radiation were to obliterate humanity and leave dogs, then the alien invasion which followed it would have a very odd theory of the development of dogs if it didn't posit an intelligent designer.

Actually, most of the stuff that people dislike about "Richard Dawkins in the 1990s" is attributable to Dennett.
1 comments this item posted by the management 11/15/2011 10:27:00 AM
Things I bet you didn't know

That the most credible estimate of the real-economy cost of bank capital regulation, forming the basis of UK and to a large extent global policy at present ... was produced by the Baptist pastor of Penge.

There's actually quite a significant crossover between financial market regulation and Nonconformism. It's like the well-known nexus between twee pop and competition regulation
0 comments this item posted by the management 11/15/2011 01:18:00 AM

Monday, November 14, 2011

Economics as she ought to be done

I am filled with a certain degree of probably unjustified optimism by this from Claudio Borio at the BIS. I don't agree with the central argument, I think (in particular, I really don't like the way that Borio dismisses the accounting identities and insists that the gross financing flows are what matter - surely if what you're interested in is the effect on securities and real estate prices, the net demand is exactly what you want to know, not the gross). But he is totally, totally addressing the right questions, and as a statement of the opposite case to my argument on the "global bezzle" below, it's basically the only one I've seen that I really think I need to take seriously. It bears slow, careful, repeated reading I think - if you can't be arsed with that, Borio ends up concluding that the problem wasn't the flows themselves, it was an excessively accomodative policy stance toward the flows, with an excess of what he calls "elasticity" in the system.

So basically his view is that between the bankers and the central bankers, they created too much credit; my view is that they created a lot of credit because they had a big imbalance to intermediate. Both of us agree that the key decision made was the decision to accomodate the monetary consequences of international savings flows, and we disagree about the importance of internal feedback effects within the system.

In unrelated news, I think I am going to call up everyone I know who is involved in political activism and blame them for the Iraq War. I am not proposing to ask whether they were actually responsible for it, or indeed to cut them any slack for having opposed it. I'm just going to declare that they are all part of the same system, and that they haven't suffered enough compared to the Iraqi people. The bloody arrogance of those Greens and Trotskyists, trying to pretend that it was nothing to do with them! They're all just politicsters and their claims that their kind of "politics" aren't the same kind of "politics" that gave us Guantanamo Bay are just more evidence that the whole system needs to be torn apart and reformed, in some way which I don't propose to specify or indeed learn the first thing about. I don't want to hear about any historical or systematic explanations; the Iraq War happened because some politicians ordered it, and this proves that all politicians of any type are corrupt and awful people. Yes I am still bitter.
5 comments this item posted by the management 11/14/2011 11:17:00 PM

Friday, November 04, 2011

The economic equivalent of war humanitarian intervention

I was joking about this on Twitter last night but I've looked it up and I think that it would work, legally and economically. The idea is that the USA doesn't actually have to restrict itself to moaning from the sidelines about Europe's inability to get its act together.

The ECB and Fed have mutual, unlimited currency swap arrangements in place. These were intended to be used for alleviating European banks' shortages of dollar liquidity, but there's nothing legally mandating that they can only be used for that purpose.

So, the Fed could carry out, under its programme of quantitative easing, an operation whereby it created US$500bn of new money, swapped it with the ECB for EUR300bn, used the EUR300bn to buy the entire outstanding debt of Greece and then tendered it back to Greece at a 99% haircut.

The only reason this can't be carried out is that it would represent an absolutely massive unilateral trampling over the Eurozone's national sovereignty. But the USA explicitly maintains a foreign policy doctrine under which it is allowed to intervene anywhere, at any time, unilaterally, in defence of what it considers to be its vital national interests. Doesn't it?
10 comments this item posted by the management 11/04/2011 07:43:00 AM
A useful piece of perspective

From the ISDA blog

SwapClear has quietly worked at another project – compression. In this effort they work closely with TriOptima, which has a long track record of compressing cleared and non-cleared swaps. This past week, they were able to cancel nearly $26 trillion of contracts. Since this program started, SwapClear has torn up $89 trillion of contracts. TriOptima has compressed a total of $158 trillion, including $74 trillion of uncleared trades since 2003. Compression will work even better as more dealers join SwapClear and participate in the compression process. It is a great way to ensure volumes at clearinghouses do not grow excessively large.

"Compression" is the business of doing the admin work to get all the trades into a database, so that you can run an SQL command to find all the pairs of trades which are perfect negatives of each other. Then "tearing up contracts" is basically what it says; unlike in securities business, a buy followed by a sell don't cancel each other out unless somebody does the work of matching the two up, but once you have done so, you can cancel the two contracts out.

It is worth keeping this in mind when people are chucking round mega-numbers for the size of the derivatives market - any time anyone fancies taking on the work of checking how many of them are economic nullities, they typically find that you can ex out $29 trillion in a week.
0 comments this item posted by the management 11/04/2011 03:24:00 AM
The most consistently hilarious biweekly publication in the UK

... is, of course, OfCom Broadcast Bulletin.

We noted Channel 4‟s submission that it considered the ice sculpture to be an "an abstraction of a phallic image that is made of ice, rather than a facsimile of an 'erect' penis". We disagreed. In our view, the appearance and relative dimensions of the penis and scrotum depicted in the ice sculpture were highly likely to mean the ice sculpture would be perceived by members of the audience as being a depiction of an erect penis.

Also, equally and beautifully dry attempts to seriously consider the question of whether a general audience would expect the word "fuck" to be broadcast 41 times in six minutes at 0730, and whether Amanda Holden's involvement in a quality assurance scheme for solicitors might be other than purely promotional.

There's a sitcom here.
2 comments this item posted by the management 11/04/2011 02:13:00 AM

Thursday, November 03, 2011

I don't think misogyny is a type of trolling

... I think they're largely separate hobbies. Data point with respect to this post - how many abusive emails do you think I got for the famous rageboy banker post? None. One of my mates emailed me to say he thought I was probably in the wrong, but that's it. How many in the total history of D^2 Digest? Also none. How many through the entire operating period of, a site specifically dedicated to provoking them? One (and this was actually from someone who I had been arguing with in the comments section, not related to a front page post). Email threats (as opposed to comments section bullshit) are a specifically female function.

Currently, in the history of D^2D I have only ever felt motivated to ban commenters on three occasions; Dan Hardie twice (since rescinded), and the entire world once (still current).
1 comments this item posted by the management 11/03/2011 09:34:00 AM

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