Saturday, February 28, 2009

John McCain can't manage a beaver


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Not having ever worked in beaver management before, I couldn’t say in detail how a beaver-management program would work. But again the basic concept here is really pretty clear. But if McCain is really confused, he could look it up. Brendan Nyhan suggests that we may need to let the GOP know about Let Me Google That For You.

Here you are, John. Can you manage this?

Posted via web from Mhm.

Friday, February 27, 2009

I love you, Buster


Posted via web from Mhm.

BEA: News Release: Gross Domestic Product


GROSS DOMESTIC PRODUCT: FOURTH QUARTER 2008 (PRELIMINARY)

Real gross domestic product -- the output of goods and services produced by labor and property  located in the United States -- decreased at an annual rate of 6.2 percent in the fourth quarter of 2008,  (that is, from the third quarter to the fourth quarter), according to preliminary estimates released by the  Bureau of Economic Analysis.  In the third quarter, real GDP decreased 0.5 percent.    	The GDP estimates released today are based on more complete source data than were available for  the advance estimates issued last month.  In the advance estimates, the decrease in real GDP was 3.8  percent (see "Revisions" on page 3).    	The decrease in real GDP in the fourth quarter primarily reflected negative contributions from  exports, personal consumption expenditures, equipment and software, and residential fixed investment  that were partly offset by a positive contribution from federal government spending.  Imports, which are  a subtraction in the calculation of GDP, decreased.    	Most of the major components contributed to the much larger decrease in real GDP in the fourth  quarter than in the third.  The largest contributors were a downturn in exports and a much larger  decrease in equipment and software.  The most notable offset was a much larger decrease in imports.    	Final sales of computers subtracted 0.01 percentage point from the fourth-quarter change in real  GDP, the same contribution as in the third quarter.  Motor vehicle output subtracted 2.04 percentage  points from the fourth-quarter change in real GDP after adding 0.16 percentage point to the third-quarter  change.  

So things were actually 40% worse than they looked a few months ago. And goodness knows how bad they really are now. Down towards the bottom of the press release, not excerpted here, is a note about GDP growth in 2008 (1.0% for those keeping track). The biggest contributors were personal consumption, exports, federal government spending, and state and local government spending. Okay, so, three out of the four elements that allowed us to grow at a whopping 1.0% last year (PCE, exports and state and local spending) are taking a huge hit. And the Republicans want to kick the last leg out from the stool.

Posted via web from Mhm.

Tuesday, February 24, 2009

Untitled


Bobby Jindal: charismatic Republican FAIL

Posted via email from Mhm.

Straw man? Nope, Republican Party


NPR commentator: When Obama says we have to stop pretending our problems will solve themselves, he's grappling with a straw man. 

Sadly, no, that's the approach to fiscal policy of the Republican Party; cut taxes and all your problems will be solved, even revenue shortfalls. Lower revenue = higher revenue; problems = solutions.


Posted via email from Mhm.

Copula-tion


When the price of a credit default swap goes up, that indicates that default risk has risen. Li's breakthrough was that instead of waiting to assemble enough historical data about actual defaults, which are rare in the real world, he used historical prices from the CDS market. It's hard to build a historical model to predict Alice's or Britney's behavior, but anybody could see whether the price of credit default swaps on Britney tended to move in the same direction as that on Alice. If it did, then there was a strong correlation between Alice's and Britney's default risks, as priced by the market. Li wrote a model that used price rather than real-world default data as a shortcut (making an implicit assumption that financial markets in general, and CDS markets in particular, can price default risk correctly).

... "making an implicit assumption that financial markets in general, and CDS markets in particular, can price default risk correctly." Isn't it even worse than this? If I'm a CDS trader making a buy/sell decision about Alice (a decision that will help set the price of the CDS), I am most likely trying to use all available information, including Britney's behavior, into account when deciding whether to transact at a given price. Critical to my accurately pricing the risk would be the correlation between Alice's and Britney's default risks. If I'm going to price the default risk correctly, I must have a good way of coming up with this correlation.

But if I have a good way of accurately determining this correlation, why in the world did we need Li's copula formula? It's circular: I need accurate correlations to correctly price default risk, and Li's formula needs accurately priced default risk to back out the correlations. How could the financial services industry rely on a method that required accurate correlation estimates to determine accurate correlation estimates? Is this as monumentally stupid as it sounds, or am I missing something?

Posted via web from Sitings and Soundings

The mysterious "Wall Street"


Trying to Break Cycle, Wall Street Opens Higher

What? Who is trying to break the cycle? Why? This headline is totally meaningless. As the market has become more volatile, we are trying to assign its actions more meaning, now going so far as to personify it. Clear evidence that we're totally irrational -- the less information the market's movements provide, the more information we ascribe to them.

Posted via web from Sitings and Soundings

Clustered friends


12 o'clock: Pittsford Mendon HIgh School
3 o'clock: Yale University/Calhoun College
6 o'clock: Yale School of Management
9 o'clock: Katzenbach

Go business school networking -- look how dense that cluster is.

Posted via web from Sitings and Soundings

Monday, February 23, 2009

Clap your hands


At this point our economy is Tinkerbell. Let's all clap our hands to show that we do believe in wealth!

Posted via web from Sitings and Soundings

Dr. Manhattan's Empire State Building


Outrage: Watchmen Movie’s Doctor Manhattan to Have Large Penis

2/19/09 at 6:00 PM

Comment 9Comment 9Comments
Outrage: Watchmen Movie’s Doctor Manhattan to Have Large Penis

Photo: Courtesy of DC Comics

If you cried sacrilege when you found out that Watchmen director, Zack Snyder, had altered the ending of Alan Moore's graphic novel, just wait until you hear what else he's changed. The film screened for press in Los Angeles last night, and a source tells Defamer that the faraway glimpse of pantsless superhero Doctor Manhattan's blue wiener in an early preview has indeed made the final cut. In fact, the movie contains several shots of said wang — not that fans of the original comic would ever recognize it.

Says Defamer's tipster:

There is indeed shitloads of blue wang. And it's huge. In the comic book, it's very average, and uncut, but the film is completely the opposite. Massive and circumcised. Given that it's digital, was it [Billy] Crudup or his agent that insisted on the impressive cut cock?


In the graphic novel, Doctor Manhattan's peen is modest and understated (do a Google Image Search), symbolizing the character's impotence in the face of human evil. Adding inches to its length or circumference undermines everything Alan Moore was trying to say about politics, society, and the human condition. At this point, the best we can hope for is that Snyder was more faithful with respect to testicle size.

He could presumably take any physical form he'd like ... be happy it wasn't the World Trade Center.

Posted via web from Sitings and Soundings