Tuesday, July 31, 2007
Dep't of Ouch
Some friends of ours from the Old Neighborhood Play Group had the distinction of being among Those People who brought early-bubble-period big city sales proceeds into the Madison market and thus helped price us out of certain neighborhoods. (Not that we're looking back; we love our now not-so-"new" house and neighbors.)
Putting our friends' many other virtues aside, I'd thought of them as having been fleeced thoroughly in the purchase of their house in the old 'hood. Since they recently moved to a larger house in Madison's '70s suburbia, I just got a chance to test my view over at the city assessor's website. It was confirmed. They bought in May 2003 for X. They sold in July 2007 for 0.945X. Their house was conventionally listed, so they probably paid 6% in commissions to real estate agents on the sale. Thus, net proceeds from the sale were about $48,000 less than the 5/03 purchase price. Solving for X is left as an exercise.
Some of you may consider X to be rounding error in prices in your home markets, but it's real money here in the upper-Midwest. OTOH, if you think X sounds like a lot of money relative to the price of houses in your area's nice older neighborhoods, then there's a decent chance the bubble never inflated in your area, in which case you may not need a hard hat so much as a parachute should a full-fledged credit crunch develop.
It's just one data point, for sure, but it goes to show that market softness isn't limited to condo flippers. Houses may be "fungible," but transaction costs are substantial and will wipe out gains in flat markets. And if you think that prices are now looking swell, caveat emptor!
Could It Get Any Worse?
The great final result was tarred so much there is little need of feathers.
The best that can be said about yesterday's announcement that pre-race favorite Iban Mayo, who finished 16th, tested positive for EPO on the second rest day is that it was underreported.
This, unfortunately, probably will not lack reporting:
[Werner] Franke said he has documents from last year's Operation Puerto doping investigation in Spain that show Contador, a Spaniard who won the doping-marred Tour on Sunday, had taken HMG-Lepori as a testosterone booster and an asthma product called TGN.
"We can confirm we have received the documents, and they will be incorporated into procedures of the district attorney's office," Christian Brockert, spokesman for Germany's Federal Criminal Police Office, told The Associated Press....
Contador, who rides for the Discovery Channel team, missed the 2006 Tour when his former team, Liberty, was disqualified because he and four other riders -- plus the team director and doctor -- were allegedly linked to Operation Puerto.
It's not necesarily as bad as it looks. But there were teams and riders excluded this year because of Operation Puerto allegations; Contador was not one of them.
Continuing the exploration of Rational Expectations at the link above, Vino's "B" (backup; second) sample also tested positive. Some remain convinced:
Officials with Kazakhstan's cycling federation on Tuesday expressed staunch support for Alexander Vinokourov who was excluded from the Tour de France following a positive test for blood doping.
"We are going to support the position that the results of the A and B samples were a direct result of the violent fall Alexander suffered during the fifth stage of the cycling race," said the executive director of the federation, Aleksandr Antychev.
Again, if there is a 100% chance you will be tested, why not at least use your own blood?
Quote of the Day
Lawrance G. Lux, friend of a gentleman farmer:
The multitude of Farmers confront a technologically controlled Market for their Needs; be it Equipment, Seed, Fertilizer, Transportation, or Finance. Farmers have for years called for more Fuel-efficient, smaller, less-Expensive equipment suited to their actual Needs. Check the Market for how closely the incorporated Suppliers have listened to their Demands. [emphasis mine]
Any resemblance to the general market for motorized vehicles is left as an Exercise to the Reader, who is advised to also click-through the link above to see the practical changes Lux suggested to the Farm Bill.
I Recognize These Words, Just Not in This Order
Spotted in the lunchroom freezer: Kangaroo [brand] Santa Fe Omelet Pita.
Apparently putting the omelet in the pita makes it easier to eat on the move. Why anyone would want to do such a thing is a mystery best left unexplored.
Labels: conspicuous consumption
Headline of the Day
Congress Crushes Flake’s Attempt To Kill Amtrak, Cripple Passenger RailThat's this Flake (*), not, oh, there are just too many other flakes to choose froom; see Destination: Freedom for the story, h/t Cold Spring Shops.
(*) "Hey, my congressman is a real Flake!" Sample policy that Rep. Flake's
Labels: Trains Planes and Automobiles
Harry Potter / Milton Friedman Birthday Bullets
- Caroline Spector tries Starbuck's coffee:
I met a friend at Starbucks the other day. I haven’t been in Starbucks since I quit drinking coffee. Not unlike the alcoholic who should stay away from bars, I found just being in a place so redolent of brewing Sweet Nectar of the Gods was more of a temptation than I could stand for the first year or so.
My friend arrives and gets an iced coffee. Being the shameless mooch I am, I ask if I can have a sip of her enticing cold beverage. (Mmmmm, caffeine.) She graciously obliged.
I take a sip. And then I have that moment we’ve all had, (girls more so than guys I suspect) the, “Do I spit or swallow?” dilemma. Because what I have in my mouth is not Sweet Nectar of the Gods, but rather Satan’s Piss.
You know: The Devil’s Urine. Beelzebub’s tee tee. Lucifer’s pee. Mephistopheles’s piddle. This stuff is so foul I’m pretty sure they must have an EPA permit to sell it.
And I realize why Starbucks sells all those Vente, Grande, Mocha Swirl with a Half-gainer concoctions. Because if anyone actually tasted the coffee in them, they would be convinced, as I am now, that Starbucks is actually in league with The Dark Lord (no, not Voldemort) to corrupt the taste buds of an entire generation.
and then she discusses Harry Potter and the Deathly Hallows in a manner that (though I disagree with her conclusion) at least makes it clear she has a basis in reality.
- Trying to find reality, Gavin Kennedy reviews Milton Friedman's "contribution" to Adam Smith's Legacy, finds he's the primary reason it is "lost":
In the meantime, I am savvy enough to know from long experience of this misattribution to Smith of a metamorphosis of a metaphor into a ‘concept’, which he never meant it to be read that way, as my regular reader will know, that I could assume what follows, but scholastic training, and the many occasions when in discourse I have seen people caught for doing just that before falling on their faces, I shall refrain from the temptation, and await some kindly person to send me the paragraph..
That Milton Friedman, of Chicago University fame, was behind the metamorphosis does not surprise me. ‘Chicago’ Adam Smith was created in Milton’s department and replaced the authentic ‘Kirkcaldy’ Adam Smith who wrote the Wealth Of Nations.
One of the many atrocities committed by Chicago and its graduates who spread the word across US campuses, was the myth of the ‘invisible hand’, which some variants transmuted into ‘as if led by an invisible hand’, and most of examples of the myth in currency assert it was, first a ‘concept’, then a ‘theory’ and finally Smith’s most ‘important idea’.
Should my reader wish to have an electronic copy of my recent paper, “Adam Smith’s Invisible Hand: from metaphor to myth”, he or she should let me know by arranging the following words into an address: ‘gavin’, ‘negweb’ and ‘com’ in the usual manner.
UPDATE: Kennedy gets the full quote, and goes full out.
- And—only somewhat related to either of the above but as a result of visiting a world more unreal than that of thestrals and Xenophilus Lovegood—Felix Salmon discovers that Punditry is for Professionals Only. Do not try this at home, especially if you are Sane:
Just some of the Cramer gems there:
"I'm looking for 100% default on the 2-and-28s. One hundred per cent. The bears are looking for 50%. I'm saying that they're foolish and that they're way too optimistic."
"I'm not distinguishing any more between subprime and prime. That's a meaningless distinction. When your house drops 20% in value, then it doesn't matter whether you're subprime or prime. It's better to walk away, even if you're wealthy, because you don't want to lose your credit card, and you don't want to lose your car. Your house is the one thing that's fungible. It's smart to walk away... If your home declines 20% in value, it's really important to walk away from it."
"I'm calling for a dramatic decline in home values... If the Federal Reserve were to cut rates by one full point, things would just reverse dramatically, and everything would go up in value... Until then, we're going to be in what I believe now is a total crisis."
Is it worth responding to this as though it's rational? Is this what passes for informed commentary on TV these days? I can see how it gets ratings, in a train-wreck kind of way – hell, I'm blogging it. But the idea that wealthy people will stop paying their mortgages because their houses are "fungible" (unless we get a 100bp cut in the Fed funds rate, of course) – it's like some kind of incredibly unfunny parody. Nouriel Roubini et al might be shrill, but at least there's coherent logic to their position.
Is it worth responding to Consummate Irrationality? Probably only at the margins, and there are days when the marginal return doesn't seem to be enough.
- Bryan Caplan says something sensible on this anniversary of Friedman's death. (Of course, he discovered it at Comic-Con):
My Comic-Con epiphany: Economics doesn't really have superstars. Even if Adam Smith himself showed up at the American Economic Association meetings, he wouldn't have thousands of economists fall on their knees in awe. But that's basically what happened at Comic-Con when Neil Gaiman held some public Q&A.
Just wait until after Stardust comes out at the end of next week.
- And, finally, from earlier this year, I honor The "Uncle Miltie" of Economics by referring you to Max's "discuss[ion of] Milton Friedman's leading contributions to economic thought" and its attendant links. So that his legacy may not be forgotten.
Eight Cents for the Stamp, $6 Million for the Transportation
Taking a break from his usual programming, Mark Thoma dug out this very cool piece of airmail (click to embiggen):
He says, "maybe someone will be interested." Well, for my money the XB-70 is the Coolest Real Plane Ever.
(Title note: The XB-70 program cost $1.48 billion [current dollars, I assume] and involved 252 hours, 38 minutes of flight time.)
Labels: Trains Planes and Automobiles
Sunday, July 29, 2007
Sunday Preschooler Extra: Butterflies!
Regarding the Blooming Butterflies extravaganza at local treasure Olbrich Botanical Gardens, Madison Guy says, "Be sure to bring a camera. You can't miss." It's true!
The kids did get into some butterfly-related program activities, though we thought it was pretty odd that this board makes it look like the Very Hungry Caterpillar is after Julia.
A few more pictures after the jump, or head on over to Flickr for even more.
Two sides of a Peruvian butterfly, still iridescent after 81 years:
Ready for takeoff:
On the Great Ice Cream Hunt (collect stamps in the outdoor gardens, get a cone of Michael's Frozen Custard):
Sylvia Beckman's bronze "Spring," now surrounded by peak summer vegetation:
The "look only with your eyes" message didn't quite stick (monster at the bridge to the Thai Garden):
Butterfly bush, minus the butterflies:
Post-butterfly treat — less of this was worn than you might think:
Back to the Marginal Utility main page.
Saturday, July 28, 2007
Or, now I really need to get rid of my car.
Into every cyclist's life comes a flat tire now and then, by which standard mine was charmed as my bike turned 12 before my first flat. More to the point, the previous two years of regular pounding (*) on the commute to work were trouble-free.
I was just about to cross into the territory where my avoided fuel purchases had paid for the bike's 2007 tune-up and the repair first flat and were starting to recover the cost of some durable accessories when one of my other bike-commuter colleagues broke the news of the second. There was no more denying that my tires were done for. So two Continental Contacts later, I might just re-reach the break-even point on consumables by mid-fall if the weather cooperates. Ah, well. I'm not in it for the money — yet.
(*) In particular, pavement quality in the Village of Shorewood Hills is as crappy as the village is property-rich.
"If it's any Consolation, though, the End Result's the Same"
I occasionally have thought about posting pictures of the inside of our house, especially last week when the reorganization began (five or so years after it should have).
Then I remind myself that (1) this is Tom's blog, (2) every picture he posts shows a clean house (see here, for instance), and (3) even if anyone wanted to know, Shira—if she ever found out, and some day she'll figure this blog this out—would kill me.
Fortunately, The Legendary Tedra appears to have gotten into our house, albeit with better lighting and a neater kitchen. Don't say you haven't Been Warned.
Labels: just life
Vino points out what I tried to say earlier
Down in this post, I footnoted:
No Mankiwian economist would assume Vinokourov is guilty, since the stage winner is automatically tested and the chance of getting caught would reasonably approximate 100%.
which resulting in some confusion in the comments.
Leave it to the rider to put it directly:
"I have been tested at least 100 times during my career. These test results simply make no sense. Given all the attention paid to doping offenses, you would have to be crazy to do what I have been accused of, and I am not crazy." [emphasis mine]
Precisely. If you're going to dope—with the purpose of winning the stage, and therefore the inevitability that you will be tested—you don't do it in such an obvious way.
Meanwhile, the battle between Leipheimer and Evans for second ends with a eight second difference overall, while Contador stays in first by 23 seconds (meaning there are 31 seconds between first and third place.)
The sprint time bonuses in Paris might make it an interesting final stage yet.
Friday, July 27, 2007
Because you liked "La Regle du jeu," try "The Rock"
With The Tour ending this weekend and only about
Still, the recommendations algorithm might need a bit of fine tuning:
Now, I would quite understand if this were a recommendation due to having rented Enron: The Smartest Guys in the Room or some other film about the failure of a non-monetizable idea. But I'm at a loss to figure out how Miyazaki, Kurosawa, and Terry Southern** lead you to a discussion of Peak Oil.
(Title inspired by Scott here and, especially, here.)
*Technically, Shira's account, but a list with Street Fight and Forgiving Dr. Mengele cannot realistically be described one that well-represens her interest.
**Or, if you prefer, Stanley Kubrick.
Friday Nonrandom 43
My iTunes library contains 3,423 songs, of which 1,828 have been played at least once. Of those, only these 43 have seen 10 (or more) spins on the computer or the 'Pod:
The first-ranked track is available as a free-as-in-beer MP3 download from the good folks at Teen Beat Records. What it means that on winter drives to work (*), I have some weird Japan/Roxy Music/Duran Duran thing going on, is left as an exercise for the reader.
For the whole library, the distribution of plays-vs-rank (**) doesn't quite follow a single-exponent power law, but there is a long tail:
(*) During the biking season, the iPod gets much less operating time. While it's easy to see the telltale white wires on campus-area cyclists — not to mention cellphone-talking, latte-drinking, etc. — my preference is to hear the bus before it hits me.
(**) Was I a little bored today? Why yes, I was, thanks for asking!
A Singer and a Guitarist
The only working astrophysicist/musician I know is Shira's cousin Jenny, who has the papers to prove the first and some great experience at the second.
Via Battlepanda, I see there will soon be another musician/astrophysicist, though I suspect he might spend more time with music:
Brian May is completing his doctorate in astrophysics, more than 30 years after he abandoned his studies to form the rock group Queen.
The 60-year-old guitarist and songwriter said he plans to submit his thesis, "Radial Velocities in the Zodiacal Dust Cloud," to supervisors at Imperial College London within the next two weeks....
He was due to finish carrying out astronomical observations at an observatory on the island of La Palma, in Spain's Canary Islands, on Tuesday, the observatory said.
May told the British Broadcasting Corp. that he had always wanted to complete his degree.
"It was unfinished business," he said. "I didn't want an honorary Ph.D. I wanted the real thing that I worked for."
Congratulations, Mr. May. And if you need a mezzo-soprano and Joan Morris isn't available, you won't have to look too far afield.
Greg Mankiw Jumps the Shark
More in sorrow than in anger, I note that Greg Mankiw has read David Brooks's column of a few days ago. His conclusion:
While not quite as magical as the story of Harry, Ron, and Hermione, the Brooks piece is well worth reading. It is far more informed by cutting-edge economic research than most things you find on the op-ed pages.
I await Brad DeLong's reaction. Now, back to the Battle of Hogwarts.
UPDATE: Lawrance G. Lux joins the previous barrage of Brooks-destruction, suggesting studies that could be done. Is that the "cutting-edge economic research" of Mankiw's imagination? If so, some sources would have been appropriate.
UPDATE II: DeLong delivers.
Random Bullets of A Grand Evening Out
We've heard Overture Hall's concert organ (shown, in part, above) in a supporting role with the Madison Symphony, but I was curious to hear it front and center, and got my wish with a recital by the Cathedral of Notre Dame organist Olivier Latry last night, at $15 a super-duper bargain. Some thoughts:
- The hall and organ are gifts of local super-rich people Jerome Frautschi and Pleasant Rowland. She made her fortune with the upscale and pricey American Girl dolls (esp. selling the line to Mattel). He invested in his wife's business. They deserve much credit for holding the line on the corporatization of public buildings, and not giving Madison an American Girl Hall, or even the American Girl Organ at Overture Hall. The program had noted that Latry recently christened the organ at Philadelphia's Verizon Hall.
- Attendance was good. Why no refreshments at intermission? (There were Issues with the implosion of the firm that had the concession, but that really should have been ironed out.)
- One point from the introduction of the artist was that Latry spends about 250 nights a year on the road. That did a lot to suspend my usual thoughts that it would be really cool to be a top-tier touring musician.
- Latry's dismount from the organ bench was so jaunty it did not fail to put a smile on my face. I suppose successful concert organists must work on that.
- For my money, the most impressive feat of musicianship, not to mention coordination, was a "Trio" movement from Balbastre's Livre d'orgue de Dijon. It made my brain hurt just thinking about trying to have my right hand, left hand, and feet engaged simultaneously at independent tasks.
- Latry was also reported in the program to have recorded the organ works of Messiaen, which would have been more interesting to hear from than some of the works on the program, but I'm not sure if it wouldn't have set the audience fleeing.
- The program seemed pretty secular as the organ repertoire goes, actually. It was, at times, very loud — even to my slightly rock-n-roll damaged hearing — but maybe not so much to attendees past the seemingly rather advanced median age of the crowd.
- One of Latry's claims to fame is as an improvisateur. Among three themes he was tasked to improvise on at the end of the concert was a bit of "America the Beautiful" (through "amber waves of grain." The resulting improvisation evoked the Nautilus at flank speed, getting ready to send some unsuspecting man-o'-war to the bottom. A message, perhaps?
- The encore, an improvisation on the chimes of Big Ben [MP3], didn't seem to be quite so loaded.
Thursday, July 26, 2007
Children of Military Families Are Not Welcome
Via Dr. Black:
Join Unity08 leadership in studying cultural opinions at a series of unique research sessions. These sessions will use a divergent approach that lasts three hours, so all participants will need to confirm they can meet the following six criteria:
I agree to participate as a volunteer;
I confirm I will be able to stay for the full three hours and not leave the session early;
I have not, nor has anyone in my household or immediate family, worked in advertising or market research;
My mother was born in the United States;
I was born in the United States and lived in the US until at least the age of 15; and,
Both my mother and I spoke in American English when I was growing up.
So if your family was stationed overseas because you had a parent or two serving in the military, forget it.
This is a study of our politics, leadership and government, and it's larger than any one campaign!
A serial-comma killing, anti-immigrant party that disrespects military service. Don't we already have one of those?
Coming Tonight on Kudlow and Company
"The Dow was down 200 points at mid-day, mostly due to the Democrats asking for a Special Prosecutor to investigate the Attorney General!"
UPDATE: Capital Chronicle puts the U.S. markets in context, and even references another blogged matter (now with three updates!).
Why, I Thought I Felt a Disturbance in the Force
Maybe now we'll actually get some rain. Via Instaputz.
Update! Argh, just a few sprinkles so far. Stupid visiting appointment.
Yet Another Press Corpse
UPDATE III: The Freaks go all Marley on us, suggesting the Tour just"Legalise It."
I spent most of yesterday waiting for a story about the withdrawl of the Astana team (in the wake of the strange test result of Alexandre Vinokourov*) to mention Andreas Kloden, then fifth overall and a strong contender for a podium spot, if not the maillot jaune (yellow jersey), coming into today's stage.
It never happened. The "story" was solely Drugs in Bicycling.
So on the day when Michael Rasmussen put in a marvelous ride—winning the stage late and all but clinching the maillot jaune—the "news" is that
Christopher Moreni (one of the riders tested randomly during Stage 11) tested positive for non-natural testosterone.
Moreni was in 54th place overall at the end of Wednesday's stage, 1 hour, 56 minutes and 11 seconds behind Rasmussen.
Not exactly a major story.**
And so the "news" situation has become absurd:
One of Switzerland's largest daily newspapers, Tages-Anzeiger, is stopping race coverage from the Tour de France immediately and will only report doping-related stories, an editor said on Wednesday....
Buechi said the Zurich newspaper's editors had decided just to give the stage and overall standings on the sports pages, alongside stories from their reporter following the Tour on the latest developments in the doping affairs.
If we want to stop pretending that sports is news, I'm all for it. But if all you want to report is the salacious and the absurd, just stay on the Washington, D.C., beat with the rest of the Press Corpse.
UPDATE: Courtesy of My Loyal Reader. It appears there will be two Discovery Channel riders on the podium, and the Swiss can probably cover this:
Michael Rasmussen, the leader of the Tour de France, was withdrawn from the race and dismissed by his sponsor, Rabobank, late last night after the doubts over his ethical credibility reached a head with accusations of lying to his team....
“Rasmussen has violated the rules of the team,” a Rabobank team spokesman said. “It is not sure if the team will continue in the race.” ...
His dismissal ended a torrid day that also saw the withdrawal of the Cofidis team of Bradley Wiggins, the British rider, in the aftermath of the failed drugs test of Cristian Moreni. The team’s Italian rider tested positive for testosterone after the eleventh stage to Montpellier.
UPDATE II: And so today, again, is a sad one.
*No Mankiwian economist would assume Vinokourov is guilty, since the stage winner is automatically tested and the chance of getting caught would reasonably approximate 100%.
**Need proof? Quick, name the last three players suspended for violating MLB's steroids policy.
Wednesday, July 25, 2007
Wednesday Preschooler Extra: No Nap 'Til Brooklyn Edition
Julia has been without nap for three days. Suzanne reports that this has made her, far from a 2-3/4-year-old terror, "manically adorable." She broke out a Carole King songbook this afternoon, and the kids spent much of it in the a/c doing The Loco-Motion.
Later, I got home and broke out the 45 of the 1988 Kylie Minogue cover, produced by the notorious Stock Aitken & Waterman. (Whatever happened to them? I assume The Wonder Stuff didn't get their way...)
Here's Julia on the new, er, dance floor downstairs.
"The thing about science fiction, though, is that you don't bet against it"
The Snark Darn Near Writes Itself
1. Sen. Kohl and Alberto Gonzales:
"Would you please explain to us why the administration of justice and the American people would not be better served by somebody sitting in the office who does not have all of the problems that you possess with respect to believability, credibility, confidence, trust?" asked, D-Wis.
"Ultimately I have to decide whether or not it would be better for me to leave or just stay and try to fix the problems," Gonzales said with a rueful smile. "I've decided to stay and fix the problems." [emphasis added]
Uh, who's that "Decider" again?
That's incumbent loser to Debbie Stabenow Spencer "Senator Lunkhead" Abraham to you. I await news that one of the GOP hopefuls has hired Bob Shrum.
[H]is presidential operation will be run by the duo of former senator and energy secretary Spencer Abraham and a Florida GOP strategist, Randy Enright, according to Rozett.
Some Firms Deserve to be Liquidated (Northwest Airlines Edition)
- Delayed arrival rate of a shocking 29% (up 10 percentage points year over year) even by the fake official statistics that don't count delays due to missed connections.
- Labor relations so bad that many rank-and-file employees no longer bother to conceal the fact that they're pissed off.
- Various indications that the above items are symptomatic of trying to run the airline with fewer people than are actually needed to run it in a way that doesn't make customers want to march on Eagan, Minnesota bearing torches and pitchforks.
- Seating accommodations on domestic flights that are barely tolerable at NWA's break-even load factor.
- Belief of some customer service executive that packaging a few on- and off-brand snacks in a box and selling the bundle for $5 is a good idea.
- Belief of some customer service executive that charging a premium for aisle seats that are totally ordinary (except for being in the forward economy-class cabin) is a good idea.
- Meal service on international flights that makes one nostalgic for the comforting pretensions of BA's "World Traveller" marketing schtick.
Labels: Trains Planes and Automobiles
Tuesday, July 24, 2007
Car Divorce Update
As a recovering car nut, I've been mulling whether to extract myself from the upper-middle tier of the car market (thereby returning a Lot of Money to the household budget) or to ditch the second car altogether (increasing the savings to a Heck of a Lot of Money). I'm still not completely decided, but I'm leaning towards the latter. At a minimum, I expect to avoid some welfare losses associated with positional externalities (PDF).
In one corner, we have the well-regarded Honda Fit (a/k/a Jazz in Europe), which I've decided is cute as a bug, and not just a bug. (The tall packaging emblematic of modern minicars is practical but loses something in my SUV-loathing eyes to the sainted if very small Honda CRX.) Adjusted for eighteen years of CPI-measured inflation, the Fit (about $16,600 MSRP delivered for a loaded model) is no more expensive than my 1989 Isuzu, which stickered just a hair under $10,000 at the time. Skeptics of "hedonic" adjustment of price indexes (e.g.) might note that the 1989 car lacked an array of features standard even on the base Fit — power windows, remote locks, CD player, anti-lock brakes — not to mention the ability to score anything close to four stars in the EuroNCAP crash testing. Indeed, the base Fit adjusted for 22 years of inflation costs less than my first car with even fewer creature comforts and which the Fit could drive circles around.
In the opposite corner, there is the realization that — mirabile dictu! — Madison's bus system can deliver me to work much faster than I'd thought. The catalyst was Suzanne adding to the adventure of taking John to TtFTE: Teh Musical Extravamaganza on Saturday by taking the bus. Since we live a block off of one of the system's spokes radiating from the Capitol Square (and passing Overture Center), the ride was immaterially longer than a car trip with parking, and less expensive at the roundtrip cash fare. My office is not so located, but it turns out that since the route pieces together segments on two high-frequency spoke routes, the bus travel time is 20-25 minutes, which is comparable to my typical time by bike. Now if only the Madison Apple Store had been located at Hilldale... darn you, Steve Jobs!
And thinking about hedonics, having the ability to get most places I'd routinely visit without maintaining a second car in the household touches on a good point Dean Baker recently made, which is that CPI without adjustment understates inflation in the face of quality deterioration. It may have been a bit too easy to forget during the late era of cheap motoring that "being convenient to places" is an important quality of housing.
Monday, July 23, 2007
What was the Value Proposition of HMOs again?
I'm late to the party, so I just want to do this short and simple*. George W. Bush, quoted here:
Bush spent a fair amount of time talking about health care yesterday, as well.
"The immediate goal is to make sure there are more people on private insurance plans. I mean, people have access to health care in America," he said. "After all, you just go to an emergency room."
If you want long and
I want a return on my health care dollar. I want the money I pay in to come out in benefits to me, not in checks made out to stockholders.
It's that stockholders thing I want to think about.
Let's stipulate that Lewis Thomas was correct in this book. The phenomenon of doctors getting rich was not ceteris paribus in the late 1920s, or any time before the end of World War II. It is basically a two-generation phenomenon. Ask any doctor who has been practicing for more than 20 years and they can tell you exactly the year it changed.
1994. The Rise of the HMO, coincident with the death of the Clinton Health Care Initiative.
Now, if we assume the HMO has a viable value proposition,** then surely that value was in the stated mission of having patients more able to take control of their health and treatments. Indeed, it would be slicing the pie so that there were more pieces—maintenance steps taken by the insured—and that would balance any decline in revenues to the provider.***
So instead of waiting until one has a heart attack, people would take an aspirin every day if they were in a high-risk group. And they would go to the doctor early in their sickness, before a cold became a flu, before they made others ill, or when cancer treatment would still be highly effective, or at least before someone decides it's not cost-effective that you live.
So when we see this report note:
The area where the U.S. health care system performs best is preventive care, an area that has been monitored closely for over a decade by managed care plans. Nonetheless, the U.S. scores particularly poorly on its ability to promote healthy lives, and on the provision of care that is safe and coordinated, as well as accessible, efficient, and equitable.
we might be forgiven for being encouraged. Until:
On each of these indicators [not visiting a physician when sick, not getting a recommended test, treatment or follow-up care, not filling a prescription, or not seeing a dentist], more than two-fifths of lower-income adults in the U.S. said they went without needed care because of costs in the past year.
So it appears that the utility of the HMO is on a lower utility curve than the emergency room. And, according to George W. Bush, that's the way it should be.
If the President of the United States—remember, he's a Harvard MBA—doesn't see any value in HMOs, why did anyone else?
*Well, I wanted to be short.
**It must be so, or the market would not have developed. (Why are you laughing?)
***Note that in this model, consumer surplus should have increased due to the reduced payments to doctors and competition amongst the HMOs and insurance companies. If this didn't happen, we must assume there is some inefficiency in the system that, of course, the free market will correct.
Roots of Conservative Punditocracy/ Celebrity Endorsements
There is some justifiable high dudgeon on the Tubes regarding the likes of Michael Gerson and David Broder, who appear to have made careers out of Always Being Wrong.
So it was with some interest that I found (at the NYPL for the Performing Arts in Lincoln Center, before seeing OOP in IMAX/3-D*) a couple of Folkways discs of Presidential Election songs, including this Oscar Brand recording.
Included is a track called "If He's Good Enough for Lindy" (track 209; sample audio available at the link above) from 1928.** "Lindy" is, of course, Charles Lindbergh, best remembered these days (politically speaking, that is) for his isolationism and the America First Committee (b. 1940). In another universe—an ill-conceived one of Philip Roth, for instance—he might have been President.
So it's interesting to find him as the prominent endorser of a candidate in 1928. And what a candidate. And what a use of Celebrity Capital.
*If you can, do it. Well worth the incremental cost.
**It is also on this Brand disc.
A Face for Radio, a Voice for Text, A Pending Podcast to Bookmark
As noted previously, I spent the post-July 4th weekend at Readercon in Burlington, MA. And while the panel discussing Karen Joy Fowler's work was adequate (as noted below, this is mainly due to Maureen of EOB fame, the other panelists, and the participation of Ms. Fowler herself), I can honestly say that the other panel I moderated, "See It Like Saruman: Reconciling Fantasy and Progress" was well worth hearing. And you may well get a chance, as it is one of two panels of which the convention team plans to post an audio recording.
The panel participants were Judith Berman, John Crowley, James Morrow, and Michael Swanwick. (The panel begins with my reading an excerpt from this essay (PDF), so it also included a de facto cameo by The Most Dangerous Perfesser.)
It was, in part, an economics panel, and—though I managed not to use the phrase "creative destruction"*—the sense of utility leading to choices, and the overriding theme of changing perspectives due to the Enlightenment, development, and the categorization of Karl Marx's work as "a Utopian Fantasy" probably makes it worth your attention from that perspective.
The Megan McArdles among H. economus will be horrified that we "didn't think everything through."** The rest of the world knows that Tolkien didn't either:
History is written by the winners. That explains why Tolkien never mentions that the destruction of Fangorn Forest and other efforts towards industrialization by Saruman significantly raised the standard of living for the wild men of Dunland, in fact creating (for the first time in Middle Earth) a comfortable middle class. While there is a natural opposition between the romantic and pastoral ideal embodied in traditional fantasy and the Enlightenment ideal of progress (especially in its modern industrial and technological modes), we don't believe they are completely incompatible. What works of fantasy have attempted to accommodate both? What interesting new direction might the heroic fantasy novel be taken if the true positive effects of modernization were acknowledged?
Anyone else wonder why the ten rules of Heterodoxy *** (see Figure 2 at bottom) are essential, especially when discussing Macroeconomic issues?****
*This is not really a Good Thing.
**English translation: share her obsessions. What is the price of eggs in Bolivia, again?
***Max presents a, er, more effusive version here.
****I personally don't consider it coincident that the Nation piece on Heterdoxy closes with George Akerlof's AEA keynote address, since it is Akerlof's discussion of the effect of informational asymmetries that is given short shrift in introductory Economics courses, despite having occurred a couple of generations ago.
Shorter Stanley Fish
My columns would go over better with the Washington Times readership.(Times Select link, a column responding to readers who gave Fish what-for after a column praising Clarence Thomas's opinion that students have no free speech rights.)
At the very bottom of the column, the Nutty Perfesser — in contrast to his previous vagueness with respect to atheists and evolution — assures everyone that his affection for Thomas's opinion is not Swiftian satire or a pomo mind game. Thanks for clearing that up, Stanley, but did we really need to see directly into that corner of your mind?
But as a lack-of-self-awareness bonus, Fish offers this among potshots taken at various commenters (*) to the original column:
Krista Kerber believes that my columns are themselves “a perfect illustration of 1st amendment rights.” No, they are an example of rights granted, not possessed. The New York Times can always decline to print what I write, although if you are reading this, it hasn’t done so yet.Hope springs eternal (though we appreciate the source of blogging material, Times Select editors). But is our Perfesser reading? She said,
[F]or Fish to hold this opinion and express it is a perfect illustration of 1st amendment rights.Ms. Kerber doesn't claim that Fish or anyone has a right to expression at nytimes.com. The only fair reading of the comment's plain language is that what Fish has is a right to express himself whether in major media, at stanleyfish.blogspot.com, or handing out flyers on the Florida International University campus. Kerber 1, Fish 0.
(*) Some of whom make elementary mistakes like assuming there may be no limits to free speech rights.
Sunday, July 22, 2007
For Jeremy, and those like him
When Goblet of Fire came out, Shira read it on Saturday. That Sunday, we went to David Hartwell's birthday party, where Teresa told me in no uncertain terms that she would "kill me" if I told her who died in it.
Clearly, she has either read Deathly Hallows, or this thread is unmoderated. Either way, those of you who have read the book—I get it tomorrow night—can go there and dish with impunity.
Labels: Harry Potter
Saturday, July 21, 2007
Tom Toles is a Priceless National Treasure, Volume 6
At Dr. DeLong's place.
Volumes 5, 4 (includes Mark Thoma), 3, 2, and 1.
Friday, July 20, 2007
My Last Jeremy-Safe Post (but DO NOT CLICK THE LINK BEFORE READING)
Avoiding the spoilers of Laura Miller's Salon review of That Book (WARNING: Link is to SPOILER page):
- Your mileage may vary, but is Rowling really a poorer prose stylist than C. S. Lewis? Especially if you are willing to make the argument that "[Rowling's auctorial] voice, tone and imagination are rooted in social comedy and observation, not in the metaphysical and transcendent...."* (which is what Byatt couldn't Get Over, as Michael Berube noted [PDF]).
- "people expect something epic, momentous, archetypal. So it's no surprise that the closer Rowling gets to that confrontation, the more heavily she relies on borrowings from writers with a natural gift for that sort of thing: Tolkien, Lewis, even Philip Pullman." I might yield (or at least can understand) the first two, but Philip Pullman? The man who admits—nay, declares—that His Dark Materials is based on Milton. You know, the Milton taught in the British school system? An author—along with the Shakespeare or Spenser or Hooker or Apuleius or countless others—to whose work Rowling likely was exposed directly, and therefore would hardly require secondary sourcing. (JRRT is, of course, a Secondary Source.)
- The rest of the paragraph cited above lists archetypes, but makes them appear as if JRRT or Lewis invented them. Only in Laura Miller's mind is that so.**
- After three paragraphs of that, "None of this is meant as a detraction -- the writers Rowling borrows from in turn gleaned parts of their fiction from even older works." No, really? You mean works that you, Laura Miller, read but ones that Joanne Katherine Rowling assuredly has never heard of?
- "That 'shiver of awe' Byatt wrote about happens when you feel the boundaries between the inner and outer worlds dissolve, if only for a moment. Given that this isn't the register that Rowling usually works in, it's impressive how well she pulls it off when she has to.
Yes, folks, the above is the last sentence of that "not-a-detraction" paragraph.
All in all, this looks like an "I'm smarter than the author" review that presents no evidence of same.
*And most especially if you later note:
You could even say that Lewis and Tolkien didn't write novels at all (they called their fiction "fairy tales" or "romance," citing much earlier literary forms).
There's not much Lewis-defense room left.
**It also includes descriptions of events in Book Seven, so it is not quoted here, nor are antecedents cited. As will become apparent momentarily, they are not difficult to list.
Friday Preschooler Extra: Progress Edition
This was a "look what John's doing" moment. Fortunately the camera was handy and the batteries were charged:
The source of inspiration? Trader Joe's juice boxes.
Cross-Promotion Anomie of the Day
I am involuntarily (but not objectionably) off work today and yesterday, so posting will be light as household reorganization and paperwork happens. (Infrastructure remains essential.) Fortunately, Tom has three marvelous posts to keep you interested.
Phil Liggett, with one of the great graceful voices in sports reporting, reading the promotion for the upcoming Versus (nee OLN) broadcast of a World Extreme Cage Fighting on August 5th between "The Natural Born Killer Carlos Condit" and someone named Brock Larson (roughly):
You don't watch this show unless you're fond of seeing blood.
Somewhere, the ghost of Fabio Casartelli is crying.
Labels: bicycle racing
Detroit Extinction Watch?
It's hard to believe, after the recent Senate vote to increase U.S. automobile fuel economy standards, that there might be an uphill fight in the House to incorporate a similar provision in the House energy bill. However, an NYT editorial observes, Michigan's John Dingell remains staunchly opposed (*), as do some other House Democrats. The history of previous attempts to raise the standards supports the Times editors' concern, though on the plus side the Senate vote last month (at 65-27) was not as close as I might have expected.
The ostensible goal for the Democrats is to preserve the Domestic Three's rapidly shrinking auto manufacturing employment. However, it would be laughable to suggest that Michigan's auto employment problem is that too many fuel-efficient, marketable cars are being made there. And I'm sure Dingell et al. are not sitting on super-secret memos to the effect of abundant cheap fuels (whether in the pump price or environmental impact senses) being just around the corner.
The Domestic Three's complaint is that meeting the standards will require enormous investments and changes to their product mixes. This is a lousy argument against the change. By 2020, every model of automobile currently sold in the U.S. will have been substantially redesigned, probably twice, even with the domestics' long product cycles. This would, itself, require lots of investment simply to maintain the status quo. Moreover, GM and Ford both have extensive European operations that already produce far more efficient vehicle mixes. So I doubt that the the true marginal investment really would be that large. In any case, it's been the lack of investment in marketable models while the truck craze was milked, though, that's killing them.
If high fuel prices persist, and "Romani ite domum" is written on the wall in large print, the market will provide more efficient cars. Until those prices reflect the full cost of the fuel, it'll underprovide them to the general detriment. It's more than past time for action.
(*) Apparently Dingell has backed carbon taxation, which some economists would view as doing the Lord's work. Until there's the least chance of enacting a carbon tax, though, it appears to be more a way of maintaining the appearance of environmental realism over the substance thereof.
Thursday, July 19, 2007
Oh Joy, Another 'Copernican Principle' Post
As a follow-up from the earlier post on the topic, in the Crooked Timber thread following Quiggin's post, commenter RB points to a letter to Nature's editor from 1994 by Johns Hopkins biostatistician Steven Goodman making the case that Gott's reasoning is an example of an old statistical fallacy. (Goodman posted it as a comment to Tierney's NYT blog.) Goodman's general thrust — 'lies, damn lies, statistics' — is correct, but he maybe goes a bit too far in deploying the f-word.
Simply put, the principle of indifference [i.e., the fallacy] says that it you know nothing about a specified number of possible outcomes, you can assign them equal probability. This is exactly what Dr. Gott does when he assigns a probability of 2.5% to each of the 40 segments of a hypothetical lifetime. There are many problems with this seductively simple logic. The most fundamental one is that, as Keynes said, this procedure creates knowledge (specific probability statements) out of complete ignorance.Actually, there is a more charitable version than this, which is how I'd previously set up the problem, and how Monton and Kierland characterize Gott's original argument. In my account, the uniform distribution of the observation point is explicitly part of the (assumed) information set; I've packed my free lunch as it were. If that doesn't sound like much, it's not. However, I would submit that the more useful thing to argue over is whether the uniform distribution assumption is warranted. As it happens, I said before that the assumption is strong before, and what I mean is that in practice it seems unwarranted for the array of amusing social applications that Gott can't seem to resist.
But for a little more damnation by faint praise, let's just remember what's being promised by the method: a prediction within a factor of 39 of the start-to-present interval. As a practical matter, the real problem in many cases is not that too much fabricated information is being brought to bear, especially at the upper bound.
Jeremy Can Safely Click the Link
Via The Borjas Blog, Michiko Kakutani "reviews" HPatDH.
It appears that Russell Arben Fox came close, judging by this non-spoiler:
at least a half-dozen characters we have come to know die in these pages, and many others are wounded or tortured.
Kakutani tells us nothing that Russell Arben Fox didn't limn out almost nine months ago (and realise almost a year before that), save confirming that There Is An Epilogue. Except that she managed to cadge a copy from a NYC bookseller, which I suppose is better than reading it on the Internet Tubes.
Not Necessarily the Doomsday Clock
Just going to show what happens when you drop off even the post-paywall NYT op-ed page, reaction to John Tierney's report that we have 46 years to colonize Mars Or Else Civilization is Dooooomed has been relatively muted over the Intertubes. Prof. Bainbridge quotes the Ole Perfesser without comment (see Roy at Alicublog for the omitted analysis) but also Charlie Stross's excellent post on the grim case for space colonization.
So how do you get that 46 years?
Suppose you're observing an Event that occurs during a fixed time interval (potentially a strong assumption). Suppose also that Baldrick is flying your space-time conveyance and drops you at a random point in the interval (potentially a very strong assumption). Suppose third that you know nothing else about the event. Your "best guess" as to where you've landed, in the expected value sense, is the midpoint of the interval. So if you then get your bearings and figure out how long ago the event started, which is all the information you have, your best guess is that the event will end the same amount of time in the future. That isn't a very good guess, though, in the sense that there's a 50% chance that the "true" end will be sooner or later than that.
Applied to the human spaceflight program, dated to 1961 (questionable [*]), then by advanced mathematics about 46 years have elapsed since then and the information you have and the assumptions above lead to the result. QED.
What the astrophysicist J. Richard Gott did, in a short paper, was to construct interval estimates with high confidence levels -- statements that the unknown end date for the event should fall between A and B 95 percent of the time. For the spaceflight case, A is 2008 (next year) and B is AD 3,801. But saying that you're 97.5 percent confident that the human spaceflight program will end in the next 1,800 years or so doesn't have the same sense of urgency. More generally, 95 percent confidence results in a range from 1/39th the age of the event on the low side to 39 times the age of the event on the high side. Call this the "Copernican formula" if you will. The proof methodology (see this paper [PDF], helpfully linked by Tierney) uses only undergraduate-level mathematical statistics, so read it yourself if you're so inclined.
This leads me to strongly endorse John Quiggin's conclusion:
The real lesson from Bayesian inference is that, with little or no sample data, even limited prior information will have a big influence on the posterior distribution. That is, if you are dealing with the kinds of cases Gott is talking about, you’re better off thinking about the problem than relying on an almost valueless statistical inference.Indeed, if observing the passage of a year and nothing else, the upper bound of the interval moves out 39 years. That can be a big deal in many applied circumstances! For example, here's Gott himself writing in the New Scientist in 1997. A subhead of "Living proof" suggests he isn't engaged in deliberate leg-pulling as he recounts:
As another test, I used my formula on the day my "Nature" paper was published to predict the future longevities of the 44 Broadway and off-Broadway plays and musicals then running in New York; 36 have now closed - all in agreement with the predictions. The "Will Rogers Follies", which had been open for 757 days, closed after another 101 days, and the "Kiss of the Spider Woman", open for 24 days, closed after another 765 days. In each case the future longevity was within a factor of 39 of the past longevity, as predicted.In this application, a prediction within a factor of 39 of past longevity conceivably covers the range from total flops to huge hits to productions that will eventually be performed by automata in Wisconsin Dells. The "prediction" for the "Will Rogers Follies" is that it will (likely) close within the next 82 years. That's out on a limb. (And certain philosophers inclined to bash social scientists for theories with weak predictive value might put this in their pipe and smoke it.)
Reinforcing Quiggins's point on how posterior distributions may be influenced, had Gott's paper appeared a week earlier, he'd have missed on "Kiss" to the tune of 100 days, since the previous week of running time adds some 9 months to the prediction's upper bound. If it matters whether the production runs another week or another year, searching for information is not unlikely to be rewarded.
Meanwhile, if you wanted to make some inference on whether both "Kiss" and "Will" would be playing at some future date, forget about it. The most interesting contribution comes from Brian Weatherson (at CT and Thoughts, Arguments, and Rants), who derives a neat result showing that if you infer the probability of both plays running at a future date based solely on the length of time they've run together (the information the method admits), it follows that if "Kiss" (the shorter-duration event) is still playing at that date, then "Will" (the longer-running event) will also be playing with probability 1. Weatherson concludes that there must be "something deeply mistaken with the Copernican formula."
My own little gloss, pending peer review in the self-correcting blogithingy, is here in the CT comments. What seems to be happening in this case is that (1) Gott's method throws away the information on how long "Will" has been running, and (2) sneaks in an additional assumption that the "Kiss" and "Will" events must be dependent or correlated. There may be circumstances under which these extremely strong assumptions may be justified, Weatherson maybe goes a bit too far in suggesting that these but they strike me as implying more than diffuse information on anything other than the elapsed times of the events.
Last, since you are by definition still with me here in the unlikely event you are reading this, here's the brief rant portion of the post: How the frack did Gott get 5 frackin' pages in Nature for this, which looks a lot more like it merits a paragraph of Mathematical News of the Weird?! I've been turned down cold — not even this 'reject and resubmit' stuff Drek writes about for stuff a hundred times harder and at least somewhat more relevant, if I don't say so myself. (If you really have time to kill, you may note that part of what I'm talking about eventually came out via other researchers' efforts as part of this IIASA working paper a few years later.) And if that's happened to me, then so too must everyone except Nick Bostrom, as I infer from Tom's Anti-Copernican Principle. W. T. F.
And BTW, Nature, what's up with US$30 for an e-print? Surely the revenue-maximizing price — which given the approximately $0 marginal cost, is also profit-maximizing — is not set at levels that make the likes of me think about sending junior staff to the library (were there a business case for actually obtaining the paper). Just saying.
[*] It's not like Yuri Gagarin's rocket just materialized on the pad and blasted off. And remember, going back even a few years into the preflight stages of human space programs puts a century or two on the upper bound.
Wednesday, July 18, 2007
Half an Hour in the Life
Hubris is still followed by ate, and the exception proves the rule:
Ca. 5:55 pm: The sound of rocks hitting a window is distracting in the best of times. When the rocks are coming up and hitting a seventh floor window, distraction is the least of the possible worries.
Ca. 5:56 pm: The dust is coming higher as well. The sixty-some people who are on the floor are all headed for the fire exit. The one that goes onto the street. I suggest this is not the best of all ideas as I grab the laptop and follow the crowd.
Ca. 5:58 pm: We are outside, with hundreds of others dong the same. The building is presumably North and East of us. I move South and West.
Interlude: When I walked into work on 11 Sep 2001 (a Disaster Recovery project started the day before), my cohorts said that a plane had hit the World Trade Center. A B-25 once hit the Empire State Building. Once is an accident.
Ca. 6:01 pm – I’m walked several blocks away; others doing the same. There is a large cloud of dust obscuring the Pan Am Building.* Otherwise, the rain has cleared the air fairly well. The dust is white.
My mobile finally gets a signal through. I tell Shira to turn on the television to find out what is happening. Four channels of news later (CBS, ABC, NBC, and Fox), there is nothing being reported but the earlier flooding. This is reassuring. Fire trucks are moving up Park Avenue.
The woman next to me on the street is covered with dust and dirt.
Ca. 6:03 pm By coincidence, I meet two others from my building, from higher floors. None of us is inclined to go back; the smoke frames our building, and several people on the street have said that they assumed it was our building that had the problem.
Interlude: I presume our building is very safe. Not only was it recently built, but the owner of the property lives on the two floors above. I don’t know if his pool is directly above my head, but it could be.
Ca. 6:05pm: Another block or two. A man with a Blackberry has found out that it was a transformer and a gas explosion. We understand why the smoke is white.
Ca. 6:06 pm. Shira calls to tell me what I have just found out. I think she says something about having scared them, but there are a lot of people and noise and cameras and fire trucks, so I’m probably wrong.
6:15ish, walking across 32nd Street. Young woman on her mobile, talking to someone, clearly Very Worried. At her third panic, two of us interrupt her to reassure her that it was Con Edison- not al Queda, related.
6:22 Greeley Square. A man with a microphone is asking passers-by, “Are you ready to meet G-d?” Clearly, it is a canned schpiel. He wants to talk fire and brimstone; I’m thinking more about asbestos.
6:25: Almost at Penn Station. Stop to ask the Q32 bus driver if he is still taking the bus's regular route, up Madison Avenue from 32nd to the mid-50s. He clearly knows what has happened, and confirms that everything is normal as far as the MTA is concerned.
I end up on the 6:43 train, by coincidence sitting next to John Schwartz, a Science writer for the NYT. By the time I get off the train (having left the car keys at the office, along with my coat), I have been interviewed, edited, and quoted.
From the comfort of home, it is much easier to read:
The authorities have established a “frozen zone” between 40th and 43rd Streets, from Vanderbilt to Third Avenues.**and wonder whether it will be possible to enter the building tomorrow, face mask and all.
Tom's PPS: Big Media Ken is quoted here. As glad as I am to read that this was apparently an accident, I'm not sure how reassuring Michael Bloomberg is in saying (per the NYT), “There is no reason to believe this is anything other than a failure of our infrastructure.”
*All right, it's now the MetLife, building (200 Park). But it's still best known as the home of Quetlzalcoatl.
**Vanderbilt, of course, starts on 42nd Street. But I suspect it means that the Pershing Square Restaurant so beloved by Little Blue PD will be closed for a while.
Proof-positive I'm an Ancestral Republican
An Update on the Mega-IPO Success Rate
I posted a while back that there were arguably three successes in the top ten IPO issuances of all time (pre-Blackstone). It was arguable because:
the weakest of which—CIT Group—has a market cap about about twice its IPO
That may not be true for long (h/t comments at Calculated Risk):
CIT Group Inc., the largest independent commercial finance company in the U.S., reported an unexpected second-quarter loss and said it's getting out of home lending. The shares had their biggest drop in almost five years....
Chief Executive Officer Jeffrey Peek decided to quit the home-loan business, which accounts for about 10 percent of CIT's income, after losses rose more than expected and investor demand for mortgages waned. The unit focused on "subprime" borrowers with weak credit or heavy debts, a category where loans are souring nationwide at the fastest pace since 2002.
The loss "blindsided the market," said a report by Royal Bank of Scotland credit analysts including Corinne Cunningham. "CIT has until now claimed to have a subprime book that was better than average."
That claim, of course, may still be true.
MSFT Snark of the Day
I recently re-programmed the touchpad of my laptop for left-handedness. (The right click is virtually dead; it's a useful and fairly straightforward workaround.)
So why is it that when the house is over the Wireless Network Connection it still tells me to RIGHT-click for more options?
Astroturf, Here We Go/ Will you find Friend or Foe?
As inspiring as Tom's tales of cycling or Parke Wilde's liebenswagen* over at U.S. Food Policy are, I was pleased, momentarily, to learn that today is "Ride to Work Day" (h/t The Freaky Ones).
Until, of course, I clicked the link and discovered it's a motorcycle advocacy group.
Take all the cattiness in the first 'graf of this post at Environmental and Urban Economics and multiply it by four to gauge my current attitude toward the group.
(Title reference; yes, I am from the B&W days.)
*German not guaranteed accurate.
The Onion: Still a Priceless National Treasure
Business headline (*):
Acquisition Of 3-Hole Punch Triples Intern's ProductivityInfographic bonus! Workplace Productivity Falling
(*) W/o story, natch; usually the best kind.
Is Our Assembly Learning?
Speaking of area Republicans who are embarassments to their districts, it would be remiss to fail to mention perennial University of Wisconsin system critic Rep. Steve Nass. He discovered that a couple of UW-Madison professors were studying fantasy sports leagues — can't they just stand around the water cooler like everyone else? — and the Pol-O-Matic 2000 (R edition) spat out (via the Cap Times):
That's telling 'em, Steve. Uh, wait, HQ asks what actual researcher Eric Halverson says:
"On the same day that system leaders are trying to convey a message of doom and gloom over a 3 percent increase in state funding, the folks over at UW-Madison promote the concept of sifting and winnowing' by announcing research into one of the greatest dilemmas of our time -- fantasy baseball," Nass said in a written statement.
"The people running the UW System really ought to consider taking some of this material and piloting a television sitcom."
Tuition and taxes should not be raised to fund "intellectual farces," Nass added.
Noting the state legislator's criticism, Halverson pointed out that the fantasy league research is not funded by taxpayers. It is financed with part of a $1.8 million grant from the prestigious MacArthur Foundation for a group of UW-Madison digital literacy researchers organized through the UW System's Academic Advanced Distributed Learning Co-Lab.Oh, so that's the kind of "intellectual farce" that brings big chunks of non-taxpayer money into the university system to (partly) offset funding cuts pushed by punk-ass Republicans! In fact, it turns out that you can learn from fantasy sports leagues:
"My son learned about sample size and statistical formulas, but did not know how to apply that outside statistics class. With fantasy baseball, he had to calculate the impact of any given player on a team's performance. A guy could have really good statistics, but if he doesn't play that much, he is not that valuable," Halverson said.Yeah, but surely spending valuable class time on fantasy football is stoopid, eh? (*)
The researchers don't want kids to play fantasy sports in school, he stressed, but they do want to help transfer the same type of engagement and interaction that happens in the leagues to math classes in middle school, high school and college nationally.
"The commitment you see in these virtual spaces is noticeably absent from most middle schools," Halverson commented.
Well, never mind.
I hope the Republicans who control the state Assembly were just playing silly political games last week when they voted to slash a host of state programs for the most vulnerable among us and then lopped off a crippling $120 million from the University of Wisconsin budget.Well, some of them probably are serious, since the likes of Nass who get half of their votes from famously wingnutty Waukesha County (**) have safe seats until they tell someone that collecting taxes may be justified for some public purposes and get drubbed out of the service from the right. Still, Zweifel is right on in pointing out, on a level even George W. Bush (or, rather, his advisors) would be smart enough to at least pay lip-service to, that a healthy university system is good for the business climate.
Don't these Republican representatives read newspapers or listen to the news? Don't they know that the University of Wisconsin is one of the state's biggest economic engines? Are they oblivious to the Madison campus positioning itself to be a national center of the biotech industry? Can't they see that, as a result of the UW's activities, more businesses are being started that promise to bring more tax revenue and higher salaried workers to Wisconsin? Don't they know that to cut vital funding at this time will deliver a body blow to all of that?Zweifel suggests the answer is no, but the better question is, "Do they care?" If we're no dumber than Minnesotans, maybe they should.
Also: Paul Soglin explains why employers maybe shouldn't be so quick to say "get back to work" to their fantasy sports leaguers. (Though a back-door Excel training argument wouldn't cut it in our shop.) Thanks to Barry in the comments.
(*) Though there may have been a missed opportunity to brand this research in a manner that exploits local Packers fandom for a more positive reaction.
(**) And hey, the new Madison Apple Store means one less reason to drive through y'all's exurban hell-on-earth.
Tuesday, July 17, 2007
Wisconsin Republicans: Not After the Family Pet Vote
Paul Soglin picks up an LA Times story about Wisconsin Rep. Sheryl Albers's (R-50th district) effort to provide for pet custody in state divorce law. Paul, alas, misses the best part of the story, which is that the legislation was inspired by the pet custody issue that Rep. Albers's (new) husband had thanks to a "messy" divorce in 2003. Here's family values for you:
Albers said her husband and his ex-wife bitterly fought over who should care for the family's Labrador, Sammi. The kids wanted to keep Sammi, who was aging and incontinent. Neither parent, however, was clamoring to house the dog full time, Albers said. (*)So what happens when the parents aren't "clamoring"? Sorry, kids, here's the relevant part of proposed section 767.49(2) of the Wisconsin Code:
According to Albers and Dane County Circuit Court documents, a judge ordered that as the three children split their time between Mom and Dad, so too should Sammi.
"The dog did not travel well. It shed. It would get sick in the car," said Albers, an attorney. "It was not easy dealing with that dog."
PLACEMENT OF PET IF NO STIPULATION. If a party to an annulment, divorce, or legal separation action requests the court to determine placement of a pet of the parties and the parties are unable to stipulate as to the pet’s placement or sub. (4) (a) applies, the court may order placement with one of the parties or may order that the pet be surrendered to a local humane society or other similar animal care facility designated by the court.In other words, bye bye Sammi (**). I'll tell ya, ol' Mitt doesn't have anything on Rep. Albers. Meanwhile, we see that the good kind of judicial activism for some Republicans is that which uses statutory discretion to get rid of unwanted family pets.
Meanwhile the LAT publishes a picture of Rep. Albers in a fractionally more fashionable haircut and considerably more fashionable glasses than are shown on the 50th district home page (***) and points out her history of "spearheading unusual legislation" — including the designation of the Wisconsin State Ballad in 2001. (****) That is "Oh Wisconsin, Land of My Dreams" and you can here it right here (MP3) if after the above you dare. If I could remember the tune, I might need to get it out of my head, but instead I think we should just find a legislative sponsor for the Wisconsin State Power Ballad. Sweet
(*) Which is to say, they fought over who would have to take care of Sammi.
(**) Who actually died of non-legislative causes at age 17.
(***) I am outraged that my tax money is being used to support that typography!
(****) The same legislation also designated the State Waltz. Or, "don't say nothing got done during the Scott McCallum administration (motto: 'Tommy G. Thompsonism without the evil genius')".
(*****) I didn't check Dan's criteria to see if this would count as a proper power ballad.
All Right, I Give Up: Rating Agencies cannot find barn door to close
I'm disinclined to blame rating agencies, who are explicitly not fiduciaries, for delays in downgrading, largely because they will not have updated information so quickly as, say, the service provider or the owner of the securities.
However, closing the barn door after the horses escape is one thing; not knowing how to tell if the horses have escaped, or where the door is, is another.
Via Naked Capitalism, the FT discusses rating agency mis- or nonfeasance:
[Josh] Rosner [a consultant at research firm Graham Fisher} points to an April report from Moody's that showed the rating agency did not consider debt-to-income ratios as a primary piece of data in their mortgage models, although this is generally considered as one of the three key predictors of mortgage default.
In the same report Moody's said it would for the first time request loan level data detailing the structure of adjustable-rate mortgages, the servicer, the month of the first interest rate adjustment and other data that would allow them to analyse risks. S&P admitted this week that it does not receive this kind of granular data on performance of individual loans within the mortgage pools backing the bonds that it rates.[emphasis mine]
Anyone interviewing for a job as an MBS analyst who didn't mention most of the above would not get a second interview. Except, apparently, at Moody's.
There still should be other agents acting first. (The most reasonable argument against regulation is that, by the time regulators have the information, the problem may be being solved.) But rating agencies are at worst the last resort of the small investor.
One revelation that analysts have described as "extraordinary" this week is that S&P has no specific estimate of how much turmoil in the housing market would be needed to force downgrades of the AAA and AA ratings that have been left untouched in this round of downgrades and constitute the bulk of the principal value of most mortgage-backed deals. Moody's also said in an interview that it had no such estimate.
Oh, well. So much for that theory?