Friday, December 28, 2012

Reconsidering Japan

"Yes, by conventional metrics, it looks as if Japan has experienced nothing but economic misery over the last 2 decades.

It has been taken for granted that Japan collapsed in the early 1990s after a spectacular property boom burst and has not really recovered since. The conservatives also claim that Japan shows that fiscal policy is ineffective because given its on-going budget deficits and record public debt to GDP ratios the place is still in shambles.

Not so fast. Look at it this way: In the midst of the Great Recession, the United States is suffering through nearly 10% unemployment and 50 million people without health insurance. A new report has found over 14% of Americans living below the poverty line, including 20% of children and 23% of seniors, the highest since President Lyndon Johnson’s War on Poverty. That’s in addition to declining prospects for the middle class, and a general increase in economic insecurity.

How, then, should we regard a country that has 5% unemployment, healthcare for all its people, the lowest income inequality and is one of the world’s leading exporters? This country also scores high on life expectancy, low on infant mortality, is at the top in literacy, and is low on crime, incarceration, homicides, mental illness and drug abuse. It also has a low rate of carbon emissions, doing its part to reduce global warming. In all these categories, this particular country beats both the U.S. and China by a country mile.

Hill documents why the “you don’t want to end up like Japan” syndrome is appealing to conservatives but missed the point entirely.

According to Hill, during the lost decade, Japan maintained:

  • An unemployment rate was about three percent and about half the US unemployment rate over the same period.
  • Universal healthcare.
  • Less income inequality than the US.
  • The highest life expectancy among the advanced nations.
  • Very low rates of infant mortality, crime and incarceration.

The obvious conclusion is that “Americans should be so lucky as to experience a Japanese-style lost decade”. I’m sure there’s a number of Greeks or Spaniards who would happen to agree with this assessment."

Let’s Cut the Crap About Japan’s ‘Lost Decade’ - Global Economic Intersection

Thursday, December 27, 2012

007 Riff

Wednesday, December 26, 2012

Police State

"In February of this year, Congress passed the FAA Reauthorization Act, with its provision to deploy fleets of drones domestically.

An unclassified US air force document reported by CBS (pdf) news expands on this unprecedented and unconstitutional step.

The air force document explains that the air force will be overseeing the deployment of its own military surveillance drones within the borders of the US; that it may keep video and other data it collects with these drones for 90 days without a warrant – and will then, retroactively, determine if the material can be retained – which does away for good with the fourth amendment in these cases.

In other words, the Pentagon can now send a domestic drone to hover outside your apartment window, collecting footage of you and your family, if the secretary of Defense approves it.

What can we do if we want to oppose this? According to Stanley, many states are passing legislation banning domestic drone use. Once again, in the fight to keep America a republic, grassroots activism is pitched in an unequal contest against a militarized federal government."

The coming drone attack on America - Guardian

I tend to zone out when I hear 'unconstitutional' - I think it is overused, and most do not know what the constitution says, but drones are going to be far more prolific and part of the skies above whether we like it or not. The first thought that comes to mind is if you've got nothing to hide, then who cares, safer right? As the movies and TV now show, surveillance is good for us because it helps the good-looking FBI agent track down the killer. So lead the lifestyle that the government would like you to have. That's ok right? Government has shown repeatedly its ability to make great choices. And as the article mentions, imagine how nice and comfortable you will feel when the domestic drones are weaponised. For our own safety of course.

War on Christmas

Tuesday, December 25, 2012

Monday, December 24, 2012

Friday, December 21, 2012



"A potential solution would be to have a gun-purchaser post collateral - several million dollars in assets - that could be confiscated in the event that the gun resulted in injury or loss of life. This has the added benefit of mitigating the moral hazard problem - the collateral is lost whether the damage is "accidental" or caused by, for example, someone who steals the gun."

Guns - Stephen Williamson

Austerity, stimulus and doing nothing

"The economics profession advances by one confusing financial disaster at a time. A series of 19th-century banking crises in England and the United States inspired policy makers to create the modern central bank. Then came the Great Depression, a period of economic misery that existing ideas could not explain. John Maynard Keynes and the far more libertarian Friedrich Hayek spent the 1930s trying to make sense of the inexplicable economic data. In the process, they developed the two schools of thought that still dominate economic arguments. The Keynesians overwhelmed public discussion in the United States and Britain until the 1970s, when Hayek, along with Milton Friedman and his Chicago school, became more popular.

By the 1990s, the debates between these two radically different theories seemed to have abated. Economists seemed to have accepted a consensus view of the world, one in which the profession would provide technocratic, nonideological solutions. It seemed like the fulfillment of Keynes’s dream that one day economists would be like dentists: boring practitioners of an uncontroversial and undeniably helpful science.

Then the financial crisis ripped this consensus apart. When Cameron’s government began its austerity program, many of the world’s leading policy makers were behind him. That September, the International Monetary Fund formally endorsed his spending cuts, stating that “the plan greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery.” The British Office of Budget Responsibility also signaled that Cameron’s austerity approach would bring economic growth and reduce unemployment. In the 2010 midterm elections, U.S. voters flooded Congress with Tea Party-friendly candidates. Many carried the mandate to halt further government stimulus.

Since then, though, an increasing number of global economic policy leaders have turned on austerity. Earlier this year, in a remarkable joint statement, the I.M.F., along with the World Bank, World Trade Organization and eight other major economic institutions, warned that austerity was hurting global growth and raising unemployment. They asked the world’s major economies to embrace stimulus. Over the past few months, the I.M.F. and its deputy director, David Lipton, also have issued several suggestions that the British government soften its austerity program. Mervyn King hasn’t entirely disowned his earlier pro-austerity views, but he is no longer the policy’s enthusiastic booster. Toward the end of 2011, Posen finally persuaded the M.P.C., in a unanimous vote, to increase its bond-buying program by 75 billion pounds (about $120 billion at the time). Even King supported him.

Cameron and his chief financial-policy minister, Osborne, say they have only deepened their commitment to austerity. Osborne recently announced that while he had hoped austerity could end by 2015, it now looks as if the policy will continue until at least 2018. That is, if the Tories are in power. Recent opinion polls show that after years in a dead heat, the Labour Party now has a solid lead in popularity, though elections are more than two years away.

As long as it continues, this experiment offers some crucial lessons for the United States. So far, austerity has not significantly improved economic health. The plan to shrink the size of government did not generate a sudden surge of private-sector confidence and investment. For all its differences, Britain is similar enough to the United States to suggest that severely cutting government spending in America wouldn’t be enough to quickly speed up our own frustratingly slow recovery either. Advocates for greater stimulus in the United States frequently point to Britain’s dismal experience as proof that unemployment will fall and economic activity will rise if the government spends considerably more money. But demonstrating that austerity has failed does not prove that stimulus fixes everything. After a few years of growth, Japan’s economy has found itself back in a period of stagnation.

Adam Posen says that the challenge of economic policy at a time when the economic data are so unlike anything that has come before is that no one can be sure what will work. But he says that’s no reason for inaction. Our options, he argues, can be divided into three general categories: austerity, stimulus and doing nothing. He, like an increasing number of mainstream economists, believes we can now scratch austerity off the list. Doing neither stimulus nor austerity — which is basically what’s happening in the United States — isn’t working, either. So, he says, let’s try stimulus, even if we don’t know for sure it’ll do the job. Now he wants to persuade America that it’s the best shot it’s got."

God Save the British Economy - NYT


"We think it is poor form for a politician or a special interest group to try to push a legislative agenda on the back of any tragedy."
-- NRA, after 2008 Northern Illinois shootings

"Now is not the time to debate politics or discuss policy."
-- NRA, after 2009 Binghampton massacre

"At this time, anything other than prayers for the victims and their families would be inappropriate."
-- NRA, after 2011 shooting spree that wounded Gabrielle Giffords

"There will be an appropriate time down the road to engage in political and policy discussions."
-- NRA, after 2012 Aurora massacre

"NRA will not have any comment."
-- NRA, after 2012 Newtown massacre


Thursday, December 20, 2012

British Problems

'I live outside the UK so when I say "With all due respect" nobody realises I'm insulting them.'

'I accidentally said hello to someone I walk past every morning on my way to work. Now I'll have to change to a longer route, or quit my job. Or kill them.'

'My sarcasm is so dry foreigners think I'm an arsehole.'

'A woman walking ahead of me swung her arm into my balls as I walked past - I apologised.'


Twitter has started rolling out the option to download all your tweets


Wednesday, December 19, 2012


Ten Arguments Gun Advocates Make, and Why They're Wrong - American Prospect

"A guide to the debate we'll be having, or at least we ought to have."

"2. Guns don't kill people, people kill people.
But there aren't mass shootings every few weeks in England or Costa Rica or Japan, and the reason is that people in those places who have these impulses don't have an easy way to access lethal weapons and unlimited ammunition.

3. If only everybody around was armed, an ordinary civilian could take out a mass killer before he got too far.
The truth is that in a chaotic situation, even highly trained police officers often kill bystanders. The idea that some accountant who spent a few hours at the range would suddenly turn into Jason Bourne and take out the killer without doing more harm than good has no basis in reality.

6. The Constitution says I have a right to own guns.
Yes it does, but for some reason gun advocates think that the right to bear arms is the only constitutional right that is virtually without limit. You have the right to practice your religion, but not if your religion involves human sacrifice. You have the right to free speech, but you can still be prosecuted for incitement or conspiracy, and you can be sued for libel. Every right is subject to limitation when it begins to threaten others, and the Supreme Court has affirmed that even though there is an individual right to gun ownership, the government can put reasonable restrictions on that right.

8. Guns are a part of American culture.
Indeed they are, but so are a lot of things, and that tells us nothing about whether they're good or bad and how we want to treat them going forward. Slavery was a part of American culture for a couple of hundred years, but eventually we decided it had to go."

I say, keep your guns, ban the ammunition.

Tuesday, December 18, 2012


Monday, December 17, 2012

Friday, December 14, 2012

Thursday, December 13, 2012


"MOSCOW — After 20 years of opining on weighty bilateral issues like NATO expansion and ballistic missile defense, the political analyst Nikolai V. Zlobin recently found himself trying to explain, for an uncomprehending Russian readership, the American phenomenon of the teenage baby sitter.

In Russia, children are raised by their grandmothers, or, if their grandmothers are not available, by women of the same generation in a similar state of unremitting vigilance against the hazards — like weather — that arise in everyday life. An average Russian mother would no sooner entrust her children’s upbringing to a local teenager than to a pack of wild dogs.

Mr. Zlobin is rather withering about drinking vodka with Americans, recalling an occasion when he split a bottle with a friend and did not see him sober for four days. (He makes exceptions for Americans of Irish and Scottish extraction, as well as certain impressive young women, “as a result of emancipation.”) Though Americans are slovenly in their outward appearance, he said, it is “completely unacceptable” to show up at work in the same outfit two days in a row. They are amazingly loud in everyday activities, but muted in their expressions of joy and grief.

“You can’t suddenly show up at a friend’s house in the middle of the night with a bottle of vodka, to talk over your problems and seek support,” he writes. “Russians solve problems when they reach a critical point — that is our national style. Americans try to keep things from getting to a critical point.”"

A Hunger for Tales of Life in the American Cul-de-Sac - NYT

Wednesday, December 12, 2012

The more welfare, the less well-being

"In practice, France’s welfare system is a failure, and there is an economic explanation for this. Welfareship does not create wealth; there are no incentives to create wealth. Despite its good intentions, welfareship has created a “poverty trap.” Consider:

Let’s take an unemployed mother living alone with two children between six and 10 years old. In 2010, there were 284,445 French families in this situation that were on welfare.

This mother will be given the “Active Solidarity Income.” Since she has two children, the amount will be $1,100. If she is renting an apartment with a $650 rent, she will be given the “Housing Customized Aid,” amounting to $620. Then she will receive “Family Allowances,” which amounts to another $160. Finally, let’s add the payment known as “Allowance for the start of the school year,” which is $750 once a year, or $62.50 per month. (She might even benefit from other aids, but these are the most common.) She will be given a total of $1,942.50 per month.

Now imagine that this mother has found work and will be paid the “legal minimum wage,” which amounts to $1,820 gross—or $1,430 after taxes. Since she would be earning $1,430, she will no longer receive the “Active Solidarity income.” Her “Housing Customized Aid” will be lowered to $460, but she will still be given “Family Allowances” and the “Allowance for the start of the school year.” Therefore, her total income will amount to $2,112.50. She will then belong to the 50 percent of French workers earning $1,960 per month.

For this mother of two, working again will bring her family an additional income of only $170. Moreover, this $170 is likely to be lost in the cost of transportation to work, since the cost of gas in France is $7 per gallon. In any case, such a small amount of money is not an incentive to go back to work. Between staying home and working, the choice is simple: welfare is a better deal."

In France's Welfare State Status Quo, Are We Seeing America's Future? - Forbes

Tuesday, December 11, 2012

Naturally short shelter

"Your house is not an asset. It is a hedge.

You are born with a natural short housing position. For the rest of your life, you will need somewhere to live. Ideally, somewhere with a roof. To use a (slightly tortured) trading analogy, you are born with a short housing position.

There are several ways to cover this short. In the beginning, your parents usually pay it for you. Once you are on your own, you have various options that can generally be divided up into two categories:

A floating rate (e.g. a short-term lease)

A fixed rate (e.g. a long-term lease or a house purchase)

The best option for you will depend on many things e.g. the relative cost of renting v. owning, your need to be geographically flexible (i.e. your liquidity requirement), your ability to obtain credit etc. There is not necessarily a “correct” answer. I have done both at various times of my life.

Whatever option you choose, however, you need to understand that you are only covering a short position. If you choose to buy a house, you are not going long the housing market. You are going flat the housing market using a fixed rate product to lock in your exposure.

If house prices rise, the value of your house (the hedge) increases but so does the cost of shelter, which you are always going to need. If house prices fall, your home loses value, but the cost of shelter falls.

Why does this distinction matter? Because if you purchase a house, you should not fall into the trap of getting excited when house prices rise. You should especially not fall into the trap of borrowing against the rising value of your house (your hedge) to fund increased consumption."

You Are Naturally Short Housing - The Zikomoletter

Friday, December 07, 2012

Lay off the dictionary

"Citigroup today announced a series of repositioning actions that will further reduce expenses and improve efficiency across the company while maintaining Citi's unique capabilities to serve clients, especially in the emerging markets. These actions will result in increased business efficiency, streamlined operations and an optimized consumer footprint across geographies."

In other words:

Citigroup today announced [lay offs]. These actions will [save money]."

Citigroup Eliminates 11,000 Jobs in History's Most Corporate-Jargony Paragraph Ever

Thursday, December 06, 2012

The Fiscal Cliff

What you believe is irrelevant

Francisco Dao, “The only thing that matters is what you accomplish. Everything else is bullshit…The only the consistent characteristic of successful entrepreneurs is the ability to get things done.” (Pando Daily)


Many more here

“Homicide Victims Rarely Talk to Police,” and Other Horrible Headlines - Freakonomics

Wednesday, December 05, 2012

The Happiness Advantage

"The path to happiness and the path to being an expert overlap.

Studies have found that American teenagers are two and a half times more likely to experience elevated enjoyment when engaged in a hobby than when watching TV, and three times more likely when playing a sport. And yet here’s the paradox: These same teenagers spend four times as many hours watching TV as they do engaging in sports or hobbies. So what gives? Or, as psychologist Mihaly Csikszentmihalyi put it more eloquently, “Why would we spend four times more time doing something that has less than half the chance of making us feel good?” The answer is that we are drawn—powerfully, magnetically—to those things that are easy, convenient, and habitual, and it is incredibly difficult to overcome this inertia. Active leisure is more enjoyable, but it almost always requires more initial effort—getting the bike out of the garage, driving to the museum, tuning the guitar, and so on.

You are happier when you are busy and often have more fun at work than at home.

How is that possible? You spend a lot more time in high-challenge, high-skill situations that encourage flow states during work hours. You’re more likely to feel apathy during leisure time at home.

Think about the best possible version of yourself and move toward that."

Why aren’t you doing what really makes you happy? - Barking Up The Wrong Tree

Tuesday, December 04, 2012

Leonard Spencer

"In the aftermath of World War II, the socialists in Great Britain are ascendant, promising everything to everyone.

One day Winston Churchill walks into the men's room outside the House of Commons. At the first stall he sees the leader of the Labour Party and he saunters all the way to the last one at the far end of the room.

"Feeling standoffish, are we Winston?"

"That's right," Churchill says. "Because every time you see something big you want to nationalize it!"

True story."

True story. - The Reformed Broker

Monday, December 03, 2012

Going Up

"You press a button and wait for your elevator. How long before you get impatient and agitated? Theresa Christy says 20 seconds.

As a mathematician steeped in the theories of vertical transportation at Otis Elevator Co., Ms. Christy, 55, has spent a quarter-century developing systems that make elevators run as perfectly as possible—which means getting most riders into a car in less than 20 seconds.

Ms. Christy strikes down one common myth—that "door close" buttons don't work. Sometimes they do, sometimes they don't, she says. It depends on the building's owner.

The challenges she deals with depend on the place. At a hotel in the holy city of Mecca in Saudi Arabia, she has to make sure that the elevators can clear a building quickly enough to get most people out five times a day for prayer.

In Japan, riders immediately want to know which car will serve them—indicated by a light and the sound of a gong—even if the elevator won't arrive for 30 seconds. That way, people can line up in front of the correct elevator.

Japan also boasts, in Ms. Christy's opinion, the smoothest, best-riding elevators. "When you get into an elevator there, you sometimes think you are 'stuck' in the elevator because the motion is so smooth and quiet," she says. But that service comes with extra costs and slower speeds.

"We are constantly seeking the magic balance," says the Wellesley math major. "Sometimes what is good for the individual person isn't good for the rest."

The Ups and Downs of Making Elevators Go - WSJ

The 'Door Close' button on the elevators at TAC definitely DO NOT work though.