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links for 2008-10-08

08 Oct
  • I'm sure the basics could fill a book, but here are a few to get you started. All of these are things that certain friends, family or coworkers, over the years, did *not* know. Clip, save and pass along to…well, you know who they are.
  • Despite the shortcomings of the bell curve, reliance on it is accelerating, and widening the gap between reality and standard tools of measurement. The consensus seems to be that any number is better than no number – even if it is wrong. Finance academia is too entrenched in the paradigm to stop calling it “an acceptable approximation”.
    Any attempts to refine the tools of modern portfolio theory by relaxing the bell curve assumptions, or by “fudging” and adding the occasional “jumps” will not be sufficient. We live in a world primarily driven by random jumps, and tools designed for random walks address the wrong problem. It would be like tinkering with models of gases in an attempt to characterise them as solids and call them “a good approximation”.
  • On foreign policy, Joe Biden killed her. It was a thing of beauty and pathos. Palin didn't say a single thing we haven't already heard said a million times on television. If a 5 month old baby were allowed to watch CNN an hour everyday for a week, he would have done a better job than did Ms. Palin and would have been cuter. Joe, on the other hand, was informative, confident and detailed. Sarah Palin was reduced to throwing names around, names Americans are afraid of and that haunt them in their dreams. Ahmedinejad, Kim Jong Il, Castro. Ahmedinejad, Kim Jong Il, Castro. In response to the question whether a nuclear Pakistan was worse or a nuclear Iran, Joe Biden took two hundred and sixty three words to reply. Palin's answer? "Both are extremely dangerous, of course." Really Sarah? You think so?
  • When government takes over the responsibility from citizens, the citizens can’t develop their own values anymore,” he told me. “So when you want people to develop their own values in how to cope with social interactions between people, you have to give them freedom.” But his philosophy consisted of more than a simple dislike of constraints. He was questioning the entire way we think about traffic and its place in the ­landscape.
  • Q. Was there a Noah, and did he have an Ark?
    A. Certainly. There are many unverified reports of a massive wooden vessel on Mount Ararat. The Arc contained eight people, from whom we are all descended. It also contained two of each kind of animal. Since living species were obviously not created through an evolutionary process, every surviving land-based mammal species (about 5,400) had both ancestors on the Arc.
  • To sense the irony, you have to sense the invisible quotation marks. I suspect quotation marks may be growing imperceptible to us. We may be leaving an age of irony and entering an age of credulity. In a time of shortened attention spans and instant gratification, trained by web surfing and movies with an average shot length of seconds, we absorb rather than contemplate. We want to gobble all the food on the plate, instead of considering each bite. We accept rather than select.
  • The notion that the poor are too stupid to know what is good for them may or may not be true. To argue from there that those who are more enlightened have a duty to coerce them into doing good things is a very slippery slope. Already the health fascists are marking out obesity as the next big thing. Alcohol, too, is in their sights. In Scotland, where proposals are being debated to ban under-21 year olds from purchasing alcohol in shops, the debate has been couched almost entirely in terms of health. Would this measure prevent illness or accident? The notion that 18 year olds, as adults, should be able to do whatever other adults do, regardless of the consequences to their health, hasn't merely been rejected, it has scarcely even been addressed. Once an expert comes forward to assert that such and such a measure is essential for promoting "health", everything else goes by default.
  • To an extraordinary degree, investment banks depend for their survival on trust — from lenders and investors, from hedge funds and other big clients, and especially from other large banks that are their trading partners. Their businesses are so complex, their balance sheets so massive and opaque, that hardly anyone outside the tent can know for sure how much trouble a firm is in. When outsiders sense weakness, they are quick to bail out.
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Posted by on October 8, 2008 in Links

 

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