Thursday, October 28, 2010

Haiku - I Have a Bad Feeling About This

I Have a Bad Feeling About This
Bullish sentiment
highest in last three years
a contra signal.
The haiku is original, but the source of the information is Pragmatic Capitalism and the title is from Star Wars.

Wednesday, October 27, 2010

Diversification, in Sweaters

Today's [humorous] lesson in diversification comes from from today's Shoebox » Ask a shoebox writer:
"Q:What’s a safe investment in this troubled economy?

A: No matter the economic outlook, I like to put my money into a nice consignment store sweater. Not only does it cozy out the chill, but it’s also like a nice hug from the guy who died in it. And during the toughest of times, it can be reconsigned back to the store. And that’s cash in your pocket, my friend! I won’t go into detail here because the reconsignment math gets complicated by “animal damage” and “a smell” that was totally there already. But here is the cornerstone of the financial plan: remain a dependant of your parents, at least legally, and financially and literally, for as long as possible. But like any business relationship, you must distance yourself emotionally. The more you rely on your mother’s noisy coin purse and stingy thermostat, the less you must care about her constant eviscerations of disapproval. And you don’t have to worry about your plan falling apart in the long run, because she’ll no doubt feel obligated to leave you her stuff in her will. And besides, good ol’ Mom doesn’t seem to be going anywhere anytime soon because apparently intense negativity is the cure for a hundred million cigarettes and counting."

Friday, October 15, 2010

Haiku - Vacation

No work and all play
on my week-long vacation,
improves my morale.

Wednesday, October 13, 2010

Dilbert pokes fun at internet privacy

In some ways, I really object to the sale of people's [you can read my] information that they willingly share under the premise of noncommerciality. In other ways, I understand that it is a burgeoning industry that can lead to growth of the marketing industry and their effectiveness. And that effect could lead to lower search costs as people are matched up more easily with the products they want, or didn't know they wanted.

Friday, October 8, 2010

The saddest graph you will see all day

(Click on graph to embiggen)

There is a lot of human misery in this graph. I see too many broken dreams when I look at this.
Source: Calculated Risk

Wednesday, October 6, 2010

Haiku - Bureaucratic Doctors

This gives you some idea of how my day is going. I wrote this when I was thinking about how hospitals might run if bureaucrats actually took over ALL of medicine, including delivery. Unfortunately it turned out to have a very Sarah Palin, death panel tone to it. Maybe that's just the reality or maybe it's my own convoluted preconceptions about what government medicine would be like. Or maybe it's the fact that I work for the largest government-run healthcare network and I know how it is, or just how I perceive it to be. Anyway, I have my doubts.

Bureaucratic Doctors
I'm sorry sir,
but your request has been denied
due to budget cuts.

Tuesday, October 5, 2010

Nobel Prize Prediction - 2010

Last year, I tried [and failed] to predict the winner for the Nobel Prize in Economics. I predicted John Taylor, who is most famous for his rule for approximating the short-term Fed funds rate, and Martin Weitzman, who is a luminary in environmental economics but his earlier work included studies of price vs. quantity controls and profit-sharing firms.
For reference, the Thomson-Reuters annual picks are out. I don't like them, because they are a particularly focused bet - the two halves of the Kiyotaki-Moore model represent two of the four picks. I bet that is unlikely that the University of Chicago's Freakonomics clan will receive another Nobel for Kevin Murphy's work. For reference, Gary Becker was the original Freakonomist, who pioneered the introduction of econometric techniques to other fields like sociology. He used them to study drug addiction, racial discrimination, and crime as well as more familiar economic topics like utility maximization.
OK, so my pick for this year is Robert Shiller from Yale University. Last year's pick kept a considerably safe distance from the financial crisis. I consider it a reasonably good bet that the Nobel committee won't strive so hard to keep away from macroeconomists who were right throughout the crisis. Besides the development of the famous Case-Shiller real estate indices and the dire warnings of the housing price bubble, his "pioneering research in the field of financial economics, relating to the dynamics of asset prices, such as fixed income, equities, and real estate, and their metrics. His contributions on risk sharing, financial market volatility, bubbles and crises, have received widespread attention among academics, practitioners and policy makers alike." (Wikipedia) His well-rounded and widely-received body of work is on par with past winners like Robert Lucas.
And if you haven't read his opus-extraordinaire, Irrational Exuberance, you should because it is fantastic. Also, his other book, Animal Spirits, is also quite good.
Considerable hat tip to Marginal Revolution for the inspiration and information that contributed to this post.

Monday, October 4, 2010

Haiku - Tariffs Aren't All Good

Tariffs Aren't All Good
doesn't just hurt foreign firms.
Trade wars make things worse.