Murray Gleeson, former Chief Justice of the Australian High Court, was once reported as saying something that I thought was such a good summary of the proper role of courts that I want to repeat it here. (I can't seem to find the quote online, so I'm paraphrasing from memory - if it turns out he didn't say this, it's so good I don't want you to spoil my image)
He said that he was happy for anyone to offer any criticism they wanted of the High Court or any particular decisions. He only made the request that before they did so, they took the time to actually read the court's judgement.
Now, this isn't something that I think holds everywhere. I don't, for instance, think that one has to read Das Kapital to have an informed view that Communism is both wicked and stupid, nor do you have to pay Michael Moore to see Bowling for Columbine before one is allowed to venture the opinion the having a Lockheed Martin factory in Columbine was not the underlying reason for the massacre.
But the reason I think it's particularly valuable in the case of court opinions is that even a layman's reading through will quickly open your eyes to something very basic about the law: namely, that there is a difference between a good legal decision, and a desirable policy outcome.
This is almost never reflected in the popular reporting. It drives me batty that just about every report about court decisions on, say, gay marriage, focus entirely on whether it is desirable from a policy point of view, and whether this case has furthered it or not.
Just once, would it kill them to talk about how this decision fits into existing 14th Amendment jurisprudence? Would it kill them to briefly cite the arguments of the majority and minority?
There is a legal body that exists to decide what is the most desirable outcome to reflect social desires, and that body is the legislature. Now, even if you think that courts should have some role in this (and I don't), surely it's worth appreciating that they also have the role of accurately interpreting the law so that people live in a stable, predictable legal environment and can arrange their affairs accordingly? Surely the aim isn't just to arbitrarily do whatever the judge feels is just on that particular day?
And when you read the actual opinions, this perspective becomes apparent very quickly, even if you don't have a legal background. Because poorly-reasoned opinions make you cringe, even if you like the outcome. They make you realise that there's more to a court's job than just 'Do I want X to happen?'
Take the case of Atkins v. Virginia, in which the US Supreme Court held that allowing the death penalty for mentally retarded defendants was cruel and unusual punishment, and thus unconstitutional. Chief Justice Rehnquist and Justices Thomas and Scalia all dissented.
Now, in the mindset of the average person, what's the conclusion they draw?
OMG, SCALIA WANTS TO EXECUTE DISABLED PEOPLE!!!!11!!!!! WHAT A HORRIBLE HUMAN BEING!!!!
Reader, I challenge you to read through his opinion (it's not very long) and tell me that this is a fair reflection of what this case is about.
Instead of repeating that, as lots of clowns do, how about you read the damn opinion and find out what he says the reasons are for his decision? Here's a hot tip - it's not based on a personal love of his of executing retards.
Instead, you will find lots of very reasonable arguments about
-ambiguity in the definition of what constitutes being retarded
-the fact that legislatures have the option of repealing the law but haven't done so
-that juries represent the proper avenue for deciding these matters
-And lots and lots of stuff about the far more important question of how this fits into the existing precedents on the matter, which are the proper business of courts.
You may disagree with his opinion, and lots of reasonable people do. But I bet you this - out of all the turkeys that are sure that Clarence Thomas is an embarrassment to the Supreme Court, less than 1 in 20 has read a single opinion of his. The embarrassment lies entirely with the people who go around repeating this without ever reading a word the man has written. These people embarrass the ideals of a democratic society. If you read some of his work and still think he's an embarrassment, I will disagree with you, but won't begrudge you that viewpoint.
Do what I do - even if you're not a lawyer, if a newspaper reports a decision that gets you fired up, stop scrolling the New York Times website immediately, type the name of the case into Google, and read the damn opinions.
Murray Gleeson will give you a big thumbs up for doing so, and Murray Gleeson is a cool dude.
Sunday, August 14, 2011
Friday, August 12, 2011
Aesthetes vs. Sensualists
Among the myriad ways you can divide up the world to try to understand human behaviour, I think it's interesting to note the different attitudes (straight) men have towards women.
As I see it, the male world is roughly divided into two camps - the Aesthetes, and the Sensualists.
Both the Aesthetes and the Sensualists love sleeping with hot women. (The Couch: Duh! They also enjoy eating food and breathing oxygen). Let's assume they enjoy this equally.
But the difference comes in how they react to hot women that, for one reason or another, they can't sleep with.
Aesthetes are so-called because they love female beauty. They enjoy being surrounded by attractive women, even if nothing is going to happen. They enjoy having attractive female friends, partly for the validation of knowing that hot women enjoy their company, but partly just for the improvement in view. They see a pretty girl walk down the street, and reflect on how good it is to live in area with pretty girls around them. Sure they'd love to bang her, but the fact that they can't doesn't stop them enjoying seeing them.
Sensualists, on the other hand, are driven only by the sensual and carnal aspects of the opposite sex. For the sensualist, being around desirable girls is important mainly for the potential that he might one day be able to hook up with them, however remote that possibility is. If he can't, their attractiveness doesn't bring him any pleasure. Indeed, for the hardcore sensualist, being surrounded by attractive but taken women actually is a source of psychological discomfort - he can't stop being bothered by the fact that he'd like to sleep with them, but can't. Their beauty only serves to remind him of their unattainable nature. He wouldn't ever admit to himself that he might be happier if some of the women around him were less attractive (because he is likely to overestimate the probability that something might still happen), but it is nonetheless so.
The aesthetes I know are generally happier, as it's much easier to find someone attractive to merely look at rather to have sex with. But they are also less driven in their quest to actually sleep with the women they meet, because they derive more satisfaction without that, and hence the marginal change in happiness is smaller. The guys I know who sleep with lots of girls are, to a man, sensualists - beautiful women who they haven't hooked up with are a challenge and a torment, but not a source of pleasure.
On the other hand, the men I know who had any substantial number of female friends were all aesthetes. This isn't always just driven by the simplified logic of surrounding themselves with hot women - they are also more likely to appreciate the female sex for reasons other than just physical attractiveness, such as the different ways that women tend to view the world. Aesthetes are more broadly interested in eligible women, of which being young and physically attractive is a large part, but not the only part.*Aesthetes tend to objectify women less - not in the OMG SEXISM OBJECTIFICATION!!!11!! sense, but more broadly in terms of viewing the opposite sex mainly as a means to an end. I think this view tends to be more common among sensualists, and it makes friendship unlikely.
For the men, if you want to know which camp you fall into, there is an easy test. Suppose you're 45 and married with two young children. You're also a committed husband, and determined not to stray. In your job, you get assigned a super hot secretary with a huge rack and a penchant for wearing slightly too revealing clothes for an office setting.
How would you feel when you walked in each morning and saw her?
The first thought will probably be, 'Man, she's hot!'. But what's the second thought?
Your answer will tell you not only which side you fall on, but also tends to reveal quite a lot about how you think, which is why I think it's a useful categorisation.
If you have to judge whether someone else is an aesthete or a sensualist, here's a rule of thumb - men that are greedy in other aspects of their personality are more likely to be sensualists.
*If this post dwells on physical attractiveness as the main salient characteristic of women, it is from a conviction that this is a large component of how most men actually perceive them. A sad fact this may be, but it is a fact nonetheless.
Thursday, August 11, 2011
Backwards Induction
Thinking too much like an economist can sometimes get in the way of satisfying cathartic feelings of anger.
For instance, I ordered 4 USB flash drives, and as always they came in the infuriating clam-shell packaging. As I jammed the scissors through each one, it seemed that justice would require that there be a circle of hell for whoever designed this monstrosity, where they have a never ending pile clam-shell cases to open using only their hands, and on Christmas, a blunt pair of scissors.
But then you start thinking that these people are only responding to the demand of shop owners. And they in turn are responding to the actions numerous imbeciles that apparently view flash drives as such a designer item that they can't wait to steal them en masse.
From there, it's only a short step to wondering whether there actually is that much shoplifting to justify this stuff, and whether the Amazon campaign to get rid of them has had any effect, and whether its plausible for consumers to respond by only buying non-clam-shell devices...
And before you know it, you're still irritated, but can't decide at whom.
Bah.
For instance, I ordered 4 USB flash drives, and as always they came in the infuriating clam-shell packaging. As I jammed the scissors through each one, it seemed that justice would require that there be a circle of hell for whoever designed this monstrosity, where they have a never ending pile clam-shell cases to open using only their hands, and on Christmas, a blunt pair of scissors.
But then you start thinking that these people are only responding to the demand of shop owners. And they in turn are responding to the actions numerous imbeciles that apparently view flash drives as such a designer item that they can't wait to steal them en masse.
From there, it's only a short step to wondering whether there actually is that much shoplifting to justify this stuff, and whether the Amazon campaign to get rid of them has had any effect, and whether its plausible for consumers to respond by only buying non-clam-shell devices...
And before you know it, you're still irritated, but can't decide at whom.
Bah.
Wednesday, August 10, 2011
How do you get from there to here?
Do you wonder how end up with a society where you can get massive rioting for 4 days throughout the capital city?
The latest BBC reports provide a clue:
So water cannon is the "contingency plan", huh? What's Plan A then?
Or here?
When the whole edifice of civil society is collapsing around you, breaking a window is not an act of petty property crime like graffiti. And to treat it as such is to endanger far more lives, by encouraging events to spiral out of control, eventually requiring far more force to restore the order that you declined to enforce early on.
So according to the police, after 4 days the only answer is 'more of the same', combined with a dose of 'surely eventually we'll arrest them all'.
No, really. Listen to Greater Manchester Police's Assistant Chief Constable Garry Shewan:
How about some bluster? How about a threat that looters will be shot on sight? Do you think that announcement, even if not carried out, might have more of an effect?
They can't even bring themselves to threaten the use of actual violence! If plastic bullets aren't appropriate when dealing with an insurrection, even as a threat, when are they appropriate? These aren't nuclear weapons we're talking about.
The police have for several days now manifestly lost control of the streets. They are unable to protect citizens property. They are unable to protect citizens safety. They are barely able to even protect themselves.
And worse than that, they have done all this only after abrogating to themselves a monopoly on the use of force. Apart from the rioters, that is.
The British Police were famous for tending to eschew carrying guns themselves. The whole community policing ideal, and not encouraging criminals to become armed, and all that stuff.
Might I suggest that a riot is a pretty good time to rethink that policy, at least in the short term?
I do not advocate just firing into crowds, or firing on everyone carrying a TV in the streets.
But boy howdy, it sure might help if the police turned up with guns loaded with plastic bullets and ordered the looters to freeze or they would shoot. And maybe fire a few warning shots at people.
The way the police would, say, in any major US city if you started throwing rocks at store windows and then throwing them at the police when they arrived. Except they'd probably have live ammunition. Even if it happened outside of a riot.
The latest BBC reports provide a clue:
The prime minister has said the "fightback" is under way, after cities in England suffered a fourth night of violence and looting.
This will come as great news to the families of Haroon Jahan, Shahzad Ali, and Abdul Musavir, killed while trying to protect their property
David Cameron said every action would be taken to restore order, with contingency plans for water cannon to be available at 24 hours' notice.That's excellent! After 4 days of rioting, in only another 24 hours you'll think about dusting off the water cannons. As a backup plan, if you wait another 48 hours, there won't be much left to loot.
So water cannon is the "contingency plan", huh? What's Plan A then?
But Association of Chief Police Officers (Acpo) president Sir Hugh Orde ruled out using water cannon or baton rounds for now, saying the tactics were not suited to the current unrest.
"Water cannon are used to deal with fixed crowds to buy distance," he said.
"The evidence... is showing very clearly these are fast-moving crowds, where water cannon would not be appropriate."
Okay, I can buy that for water cannons. But what about baton rounds (i.e. plastic bullets)?
He added that baton rounds would only be deployed when his officers' lives were under serious threat.You mean like here?
Or here?
When the whole edifice of civil society is collapsing around you, breaking a window is not an act of petty property crime like graffiti. And to treat it as such is to endanger far more lives, by encouraging events to spiral out of control, eventually requiring far more force to restore the order that you declined to enforce early on.
So according to the police, after 4 days the only answer is 'more of the same', combined with a dose of 'surely eventually we'll arrest them all'.
No, really. Listen to Greater Manchester Police's Assistant Chief Constable Garry Shewan:
He said the force was "absolutely intent" on bringing the rioters to justice and his officers were already studying CCTV.
"Hundreds and hundreds of people, we have your image, we have your face, we have your acts of wanton criminality on film. We are coming for you, from today and no matter how long it takes, we will arrest those people responsible," he said.Buddy, let me give you the skinny on this: if you're in the middle of a riot, threatening that you'll arrest people 'eventually' is not an adequate response. If you don't have the manpower to do it, bring in the army. You might start by reassigning some of the cops 'studying CCTV' and putting them on the streets.
How about some bluster? How about a threat that looters will be shot on sight? Do you think that announcement, even if not carried out, might have more of an effect?
They can't even bring themselves to threaten the use of actual violence! If plastic bullets aren't appropriate when dealing with an insurrection, even as a threat, when are they appropriate? These aren't nuclear weapons we're talking about.
The police have for several days now manifestly lost control of the streets. They are unable to protect citizens property. They are unable to protect citizens safety. They are barely able to even protect themselves.
And worse than that, they have done all this only after abrogating to themselves a monopoly on the use of force. Apart from the rioters, that is.
The British Police were famous for tending to eschew carrying guns themselves. The whole community policing ideal, and not encouraging criminals to become armed, and all that stuff.
Might I suggest that a riot is a pretty good time to rethink that policy, at least in the short term?
I do not advocate just firing into crowds, or firing on everyone carrying a TV in the streets.
But boy howdy, it sure might help if the police turned up with guns loaded with plastic bullets and ordered the looters to freeze or they would shoot. And maybe fire a few warning shots at people.
The way the police would, say, in any major US city if you started throwing rocks at store windows and then throwing them at the police when they arrived. Except they'd probably have live ammunition. Even if it happened outside of a riot.
There is a principle older than due process at stake here, and that is this: if you gratuitously hurt somebody and break their shit, you deserve to get your ass beaten.
One way or another, it's about time this started getting enforced.
One way or another, it's about time this started getting enforced.
Update: Welcome, Blairites! So good to have you. Have a look at what the London Riots say about gun control, why computer programmers often don’t get economics, and why Standard and Poors is happy to give the middle finger to the US Government.
If you like what you see, add a bookmark or an RSS feed.
Tuesday, August 9, 2011
Thoughts on the London Rioting and Gun Control
For the third day in a row, thugs and hoodlums have been rioting and destroying London. Because some guy got shot by police. Or something. So in the mindset of this collective human scum, this justifies breaking into the Foot Locker to get some new shoes, or trying to swipe a Plasma TV. Or, you know, just torching some guy's store and not bothering to steal anything.
I am reasonably agnostic about gun control. Of all the viewpoints conservatives tend to endorse, opposition to gun control might be the one on which I'm most lukewarm, for reasons that I'll go into detail on at some other time.
But the 2nd Amendment crowd are 100% right about one thing, and it is this:
When the shit goes down, assume that the police will not be there to save you.
On average, they will not.
They will be there to investigate afterwards. They will be there to arrest and punish the perpetrators. And hopefully through all this, they will be able to deter enough other would-be thugs from breaking the law so that, in equilibrium, you are unlikely to be the victim of random violence.
But if it turns out that the world in your immediate vicinity is not in that equilibrium at that time, and someone is trying to mug you or beat you, you should assume that nobody else will come to rescue you. And you should plan accordingly.
Now there are lots of things you can do in response. Live in a safe area. Live in a high-rise with a doorman and multiple locked sections before you can enter.
Or carry a weapon.
Personally, I pick 1 and 2, but not 3. When the chips are down, I am not willing to shoot someone. And so I don't want to own a gun.
This decision has lots of consequences, some good, some bad. I am unlikely to have my kids accidentally shoot someone. I am unlikely to escalate a situation into a violent confrontation by pulling out a weapon when I could have just given them my wallet.
But I'm not kidding myself about the fact that I'm also going to be worse off if I'm confronted by someone who isn't interested in my wallet, but just wishes to do me harm. Or, hypothetically, a mob of rioters trying to burn down my store.
Make your choice, and live with the consequences.
I am reasonably agnostic about gun control. Of all the viewpoints conservatives tend to endorse, opposition to gun control might be the one on which I'm most lukewarm, for reasons that I'll go into detail on at some other time.
But the 2nd Amendment crowd are 100% right about one thing, and it is this:
When the shit goes down, assume that the police will not be there to save you.
On average, they will not.
They will be there to investigate afterwards. They will be there to arrest and punish the perpetrators. And hopefully through all this, they will be able to deter enough other would-be thugs from breaking the law so that, in equilibrium, you are unlikely to be the victim of random violence.
But if it turns out that the world in your immediate vicinity is not in that equilibrium at that time, and someone is trying to mug you or beat you, you should assume that nobody else will come to rescue you. And you should plan accordingly.
Now there are lots of things you can do in response. Live in a safe area. Live in a high-rise with a doorman and multiple locked sections before you can enter.
Or carry a weapon.
Personally, I pick 1 and 2, but not 3. When the chips are down, I am not willing to shoot someone. And so I don't want to own a gun.
This decision has lots of consequences, some good, some bad. I am unlikely to have my kids accidentally shoot someone. I am unlikely to escalate a situation into a violent confrontation by pulling out a weapon when I could have just given them my wallet.
But I'm not kidding myself about the fact that I'm also going to be worse off if I'm confronted by someone who isn't interested in my wallet, but just wishes to do me harm. Or, hypothetically, a mob of rioters trying to burn down my store.
Make your choice, and live with the consequences.
Monday, August 8, 2011
Dislike Immigration? You Probably Haven't Tried to Move Countries
Rationalists like myself tend to believe that they arrived at their beliefs by reason alone. And this is indeed the hope - if, like the Marxists believe, our world view is shaped only by social circumstances, then logical argument between different people is a hopeless ideal. Which would be a distressing thought. And while I don't tend to subscribe to this notion, still, it's hard to know how much your ideas about the world might change if you were in a different social position.
One example of this that I've found odd is that Australians in England share some resemblance in social position to Mexicans in the USA. Australia exports a lot of the backpacker crowd to the UK, and so most of the ones you meet tend to be poor, working unskilled jobs like bartending or manual labour jobs like construction. A lot of them have overstayed their visas, working on forged documents on a cash basis. There is a middle class, to be sure, but the popular perception among the English seems to be (correctly) of low-brow larrikins, tolerated by their hosts but somewhat outside polite society.
And here's where things get interesting.
Once, when I was in Honduras, I was talking with a bunch of Australians who were living in London, several of them having stayed there illegally. And when the subject came up, what was hilarious was hearing them recite every single argument traditionally given in favour of illegal immigration:
-Why won't they just let us stay? We're not doing anyone any harm
-The country would grind to a halt without the Australians to do the grunt work
-We pay taxes already, through them being withheld from our wages
etc.
What is even more funny is that Australia is not a country known for its embrace of immigration into its own country. Legal immigration is hard enough, and illegal immigration is strongly disapproved of. And I would bet that most of the people making these arguments if asked 10 years earlier would have been fairly unsympathetic to, say, an Iraqi making the same case as to why he should be allowed in Australia. Reader, I struggle to ever recall having heard any Australian advancing these arguments in favour of illegal immigration - even its supporters tend to promote it on a humanitarian basis ("we need to help the refugees", not "we should allow the free movement of cheap labour from India").
Now, I tend to think that allowing open borders is a very bad idea. As Milton Friedman noted long ago, open immigration is incompatible with a welfare state (which, like it or hate it, isn't about to disappear). And even without the welfare concern, I think the culture of the immigrants you're allowing matters a lot - even though it's terribly sad that there are a lot of child soldiers in a particular country, that doesn't mean it's a sound idea to let them move near you (for instance).
But still, if as they say, a conservative is a liberal who's been mugged, and a liberal is a conservative who's been arrested, then a pro-immigration person is an immigration restrictionist who tried to move countries without a job lined up in advance.
One example of this that I've found odd is that Australians in England share some resemblance in social position to Mexicans in the USA. Australia exports a lot of the backpacker crowd to the UK, and so most of the ones you meet tend to be poor, working unskilled jobs like bartending or manual labour jobs like construction. A lot of them have overstayed their visas, working on forged documents on a cash basis. There is a middle class, to be sure, but the popular perception among the English seems to be (correctly) of low-brow larrikins, tolerated by their hosts but somewhat outside polite society.
And here's where things get interesting.
Once, when I was in Honduras, I was talking with a bunch of Australians who were living in London, several of them having stayed there illegally. And when the subject came up, what was hilarious was hearing them recite every single argument traditionally given in favour of illegal immigration:
-Why won't they just let us stay? We're not doing anyone any harm
-The country would grind to a halt without the Australians to do the grunt work
-We pay taxes already, through them being withheld from our wages
etc.
What is even more funny is that Australia is not a country known for its embrace of immigration into its own country. Legal immigration is hard enough, and illegal immigration is strongly disapproved of. And I would bet that most of the people making these arguments if asked 10 years earlier would have been fairly unsympathetic to, say, an Iraqi making the same case as to why he should be allowed in Australia. Reader, I struggle to ever recall having heard any Australian advancing these arguments in favour of illegal immigration - even its supporters tend to promote it on a humanitarian basis ("we need to help the refugees", not "we should allow the free movement of cheap labour from India").
Now, I tend to think that allowing open borders is a very bad idea. As Milton Friedman noted long ago, open immigration is incompatible with a welfare state (which, like it or hate it, isn't about to disappear). And even without the welfare concern, I think the culture of the immigrants you're allowing matters a lot - even though it's terribly sad that there are a lot of child soldiers in a particular country, that doesn't mean it's a sound idea to let them move near you (for instance).
But still, if as they say, a conservative is a liberal who's been mugged, and a liberal is a conservative who's been arrested, then a pro-immigration person is an immigration restrictionist who tried to move countries without a job lined up in advance.
Saturday, August 6, 2011
How Do You Like Them Apples?
Congress, April 2011;
Congress must no doubt be thrilled.
Meanwhile, S&P are probably drinking a tasty glass of schadenfreude right about now, and cheerfully giving the US government this one:
Oh, so now you DO want us to be charitable in our ratings, huh?
(inspired by an observation of Coyote's)
"Moody's Corp and Standard and Poor's triggered the worst financial crisis in decades when they were forced to downgrade the inflated ratings they slapped on complex mortgage-backed securities, a U.S. congressional report concluded on Wednesday.Well, I guess we can consider this particular problem solved! Yessir, Standard and Poors have learned their lesson about the perils of letting risky, systematically important debt stay classified as riskless long after that has stopped being an appropriate description.
...
``The problem, however, was that neither company had a financial incentive to assign tougher credit ratings to the very securities that for a short while increased their revenues, boosted their stock prices, and expanded their executive compensation,'' the report said."
Congress must no doubt be thrilled.
Meanwhile, S&P are probably drinking a tasty glass of schadenfreude right about now, and cheerfully giving the US government this one:
Oh, so now you DO want us to be charitable in our ratings, huh?
(inspired by an observation of Coyote's)
Friday, August 5, 2011
Shooting the Messenger
There is no such thing as a riskless bond. Never was, never will be.
But if there were, it would not be issued by the United States Treasury. Today, S&P downgraded US sovereign debt from AAA to AA+.
Zero Hedge is having a field day with this. They linked to this piece noting that the White House challenged S&P's economic analysis, and that this was the thing that delayed the announcement slightly as S&P decided whether to sack up and call it the way they see it, or bend over and be the Government's toady.
The reaction of the administration is quite revealing. Because we all know that S&P is the real problem. S&P's models (and everyone else's) say that US debt is looking increasingly risky. The models must be wrong, because we at the Obama Administration just know that it's going to all be fine. Just ask Timmy 'TurboTax' Geithner, who as recently as April declared there was 'no risk' the US would be downgraded.
If you, like me, are tempted to conclude that he's a dumbass, (and you would not be short of evidence for this proposition), it's worth remembering that he might just be being dishonest as part of his job. In other words, he has to be the cheerleader for the US government, yelling furiously that the ship isn't sinking so that people don't get trampled on the way to the lifeboats.
The nature of the immediate problem, of course, is that things get a little tricky when US debt isn't considered risk-free, as a bunch of institutions are required to hold AAA securities as collateral for various reasons. And now they may have to start dumping treasuries, pushing yields up even further. Fun times!
The nature of the longer term problem, of course, is that S&P is exactly right - the debt ceiling debate is a mess, and nobody is interested in tackling the question of long-term "entitlements" (I dislike that word) in health spending and, to a lesser extent, social security. And S&P decided, again rightly, that since their job is to rate bonds, then by golly they're going to call a risky bond risky, because it's not their job to cover the government's ass for the government's own reckless behaviour.
It's exactly the same as with TARP. The banks yell and shout 'We're in a liquidity crisis, and need a temporary loan!'. Skeptics pointed out that what they actually had was a solvency crisis, which needs not a loan, but a giant equity infusion (i.e. a cheque they get to keep). Most of the banks were insolvent, and that was causing the liquidity crisis. You could throw liquidity at the problem (which is what TARP originally purported to do) , but until you made the politically unpalatable choice to actually bail them out (which is what TARP actually did), liquidity crises will keep returning.
It's the same now with the US government. Except they don't have anyone to bail them out, and so they're going with the only plan they seem to have, namely hoping that the inevitable market reaction happens later, rather than sooner. Ideally after they're out of office.
In other news, it's bullish for equities!
But if there were, it would not be issued by the United States Treasury. Today, S&P downgraded US sovereign debt from AAA to AA+.
Zero Hedge is having a field day with this. They linked to this piece noting that the White House challenged S&P's economic analysis, and that this was the thing that delayed the announcement slightly as S&P decided whether to sack up and call it the way they see it, or bend over and be the Government's toady.
The reaction of the administration is quite revealing. Because we all know that S&P is the real problem. S&P's models (and everyone else's) say that US debt is looking increasingly risky. The models must be wrong, because we at the Obama Administration just know that it's going to all be fine. Just ask Timmy 'TurboTax' Geithner, who as recently as April declared there was 'no risk' the US would be downgraded.
If you, like me, are tempted to conclude that he's a dumbass, (and you would not be short of evidence for this proposition), it's worth remembering that he might just be being dishonest as part of his job. In other words, he has to be the cheerleader for the US government, yelling furiously that the ship isn't sinking so that people don't get trampled on the way to the lifeboats.
The nature of the immediate problem, of course, is that things get a little tricky when US debt isn't considered risk-free, as a bunch of institutions are required to hold AAA securities as collateral for various reasons. And now they may have to start dumping treasuries, pushing yields up even further. Fun times!
The nature of the longer term problem, of course, is that S&P is exactly right - the debt ceiling debate is a mess, and nobody is interested in tackling the question of long-term "entitlements" (I dislike that word) in health spending and, to a lesser extent, social security. And S&P decided, again rightly, that since their job is to rate bonds, then by golly they're going to call a risky bond risky, because it's not their job to cover the government's ass for the government's own reckless behaviour.
It's exactly the same as with TARP. The banks yell and shout 'We're in a liquidity crisis, and need a temporary loan!'. Skeptics pointed out that what they actually had was a solvency crisis, which needs not a loan, but a giant equity infusion (i.e. a cheque they get to keep). Most of the banks were insolvent, and that was causing the liquidity crisis. You could throw liquidity at the problem (which is what TARP originally purported to do) , but until you made the politically unpalatable choice to actually bail them out (which is what TARP actually did), liquidity crises will keep returning.
It's the same now with the US government. Except they don't have anyone to bail them out, and so they're going with the only plan they seem to have, namely hoping that the inevitable market reaction happens later, rather than sooner. Ideally after they're out of office.
In other news, it's bullish for equities!
'Nice Shirt'
It is my rough experience that when people say 'Nice Shirt/Tie/Jumper', at least half the time what they actually mean is 'That shirt is ugly, but distinctive'. They first register the need to comment on the odd-looking thing, and since 'your shirt is crap' is not polite, you end up with 'nice shirt'.
For some reason, the expression 'I like that shirt on you' doesn't ring quite as false. It may well be motivated by the desire for false flattery, but that is a much easier problem to deal with. For starters, it's unlikely to lead me to wear an ugly shirt too often because someone once said something nice about it.
For some reason, the expression 'I like that shirt on you' doesn't ring quite as false. It may well be motivated by the desire for false flattery, but that is a much easier problem to deal with. For starters, it's unlikely to lead me to wear an ugly shirt too often because someone once said something nice about it.
Thursday, August 4, 2011
Samuel Johnson on Blogging
"No man but a blockhead ever wrote, except for money."
(source)
Ha!
I'm guessing Google Adsense, even were I to have it, would not be sufficient to alter the opinion of the great Dr Johnson on this current writing enterprise.
The Most Frustrating Local Monopoly
Economists typically have an ambiguous attitude towards monopolies. When the monopoly arises because one company is providing the single most popular good or service, opinions often differ between educated and well-meaning people as to what to do. Some people worry about the potential for predatory pricing and other schemes to shut down new entrants, and want the government to step in. Others figure that the the market will eventually take care of it - you can sue Microsoft for bundling Internet Explorer with Windows to shut down Netscape, but eventually IE will be replaced by Chrome and Firefox anyway.
But the worst kinds of monopoly are those granted by government fiat. Because then there is little possibility of new entrants displacing the artificial monopoly.
My entry for the category of 'most frustrating and insidious government-granted monopoly' that I've come across is currency exchanges at airports.
At certain airports (Sydney being one that comes to mind), the government allows only one company to be the exclusive currency exchange for the whole airport. I think in Sydney it's Travelex. So you can walk around and find multiple currency exchanges, but they're all Travelex.
And this is an incredibly devious thing to do. Travelex makes extra money by charging a higher spread (buying at lower prices and selling at higher prices) than they could sustain if they had competition two metres away.
The reason they can get away with this is twofold. Firstly, most people need foreign exchange pretty soon after leaving the airport. But even more tricky is the fact that most people have very little idea what is a competitive exchange rate at any point in time. Even if you check the exchange rate on the internet, this will tell you the midpoint. But what's a reasonable spread if you want to exchange $200? Unless you've been paying attention to what other places in previous airports were offering that day, it's not at all clear.
And this is how Travelex launders its monopoly profits. It's one of the few cases where most people don't have a strong sense of the fact that they're being ripped off.
So why does the government do this?
Simple - they charge Travelex higher rents in order to be the monopoly provider for the airport. In essence, they split the monopoly rents with Travelex. If they're auctioning off the right to be the monopoly provider, my guess is that the government ends up getting most of the rents.
So here's a hearty up yours to the Government of New South Wales for ripping off citizens. Again.
[Update]: Loyal reader BW pointed out to me that Sydney airport is actually owned by MAp Airports, a subsidiary of Macquarie Bank. In addition, some reading around informed me that this privatisation was carried out by the Australian Federal Government, not the NSW Government. So the main post unfairly besmirches the reputation of the New South Wales Government, which is deeply dysfunctional for a number of reasons, but this is not one of them.
BW is quite right, of course. Monopoly pricing is not any more appealing when carried out by a private corporation (especially in an arena, like airports, where there's not exactly a viable threat of competition).
It turns out I'm not the only person to notice this trend at Sydney Airport. According to Wikipedia:
But the worst kinds of monopoly are those granted by government fiat. Because then there is little possibility of new entrants displacing the artificial monopoly.
My entry for the category of 'most frustrating and insidious government-granted monopoly' that I've come across is currency exchanges at airports.
At certain airports (Sydney being one that comes to mind), the government allows only one company to be the exclusive currency exchange for the whole airport. I think in Sydney it's Travelex. So you can walk around and find multiple currency exchanges, but they're all Travelex.
And this is an incredibly devious thing to do. Travelex makes extra money by charging a higher spread (buying at lower prices and selling at higher prices) than they could sustain if they had competition two metres away.
The reason they can get away with this is twofold. Firstly, most people need foreign exchange pretty soon after leaving the airport. But even more tricky is the fact that most people have very little idea what is a competitive exchange rate at any point in time. Even if you check the exchange rate on the internet, this will tell you the midpoint. But what's a reasonable spread if you want to exchange $200? Unless you've been paying attention to what other places in previous airports were offering that day, it's not at all clear.
And this is how Travelex launders its monopoly profits. It's one of the few cases where most people don't have a strong sense of the fact that they're being ripped off.
So why does the government do this?
Simple - they charge Travelex higher rents in order to be the monopoly provider for the airport. In essence, they split the monopoly rents with Travelex. If they're auctioning off the right to be the monopoly provider, my guess is that the government ends up getting most of the rents.
So here's a hearty up yours to the Government of New South Wales for ripping off citizens. Again.
[Update]: Loyal reader BW pointed out to me that Sydney airport is actually owned by MAp Airports, a subsidiary of Macquarie Bank. In addition, some reading around informed me that this privatisation was carried out by the Australian Federal Government, not the NSW Government. So the main post unfairly besmirches the reputation of the New South Wales Government, which is deeply dysfunctional for a number of reasons, but this is not one of them.
BW is quite right, of course. Monopoly pricing is not any more appealing when carried out by a private corporation (especially in an arena, like airports, where there's not exactly a viable threat of competition).
It turns out I'm not the only person to notice this trend at Sydney Airport. According to Wikipedia:
In March 2010 the Australian Competition and Consumer Commission released a report sharply critical of price gouging at Sydney airport, ranking it fifth out of five airports. The report noted Sydney Airport recorded the highest average prices at $13.63 per passenger, compared to the lowest of $7.96 at Melbourne Airport, while the price of short-term parking had almost doubled in the 2008–09 financial year, from $28 to $50 for four hours. The report also accused the airport of abusing its monopoly power.Let the record stand corrected - up yours, MAp Airports!
Tuesday, August 2, 2011
Best 'First Dance' song ever
Everyone always picks boring songs for their first dance at a wedding.
If I were getting married, you know what I'd pick? Mike Oldfield's Tubular Bells. Think about it, how awesome would that be? There's so much to recommend.
For starters, the music begins sounding sufficiently creepy that they made it the theme to the movie 'The Exorcist'. Whatever dance you choose to do will seem hilarious inappropriate no matter what you pick.
Secondly, it's so damn long - the two sides between them take up 48 minutes and 18 seconds. You can find parts 2 and 3 here and here. People who didn't know the song would be wondering what the hell was going on. People who did know the song would find themselves thinking 'surely they're not going to dance to the whole thing?'. Only slowly would the horrifying realisation dawn upon them.
Musically, it goes through all sorts of odd bits, including the booming voice announcing the musical instruments, and the strange growling demonic sound at another part. And finally, the piece ends with 1:45 of the sailor's hornpipe, a piece only marginally less suited to the first dance at a wedding than the Exorcist theme beginning.
Face it, everyone would hate you, but it would be the funniest prank ever. Which, I assume, is what you really want in a wedding.
If I were getting married, you know what I'd pick? Mike Oldfield's Tubular Bells. Think about it, how awesome would that be? There's so much to recommend.
For starters, the music begins sounding sufficiently creepy that they made it the theme to the movie 'The Exorcist'. Whatever dance you choose to do will seem hilarious inappropriate no matter what you pick.
Secondly, it's so damn long - the two sides between them take up 48 minutes and 18 seconds. You can find parts 2 and 3 here and here. People who didn't know the song would be wondering what the hell was going on. People who did know the song would find themselves thinking 'surely they're not going to dance to the whole thing?'. Only slowly would the horrifying realisation dawn upon them.
Musically, it goes through all sorts of odd bits, including the booming voice announcing the musical instruments, and the strange growling demonic sound at another part. And finally, the piece ends with 1:45 of the sailor's hornpipe, a piece only marginally less suited to the first dance at a wedding than the Exorcist theme beginning.
Face it, everyone would hate you, but it would be the funniest prank ever. Which, I assume, is what you really want in a wedding.
Sunday, July 31, 2011
Being a brilliant coder does not one a philosopher king make
I am periodically given cause to reflect on the bizarre attitudes that quite a lot of science and computer science types have towards finance.
There is a thread on slashdot where a programmer at a high frequency trading finance firm explains what he does:
blah blah blah technical details to show I'm really good at what I do.
And then, of course, the punch line
My response? Good for you, mate. I have very little basis to distinguish whether you're actually as good as you say you are, or whether you just have a very inflated opinion of yourself. Frankly, I doubt anyone else does either. Not that it matters, really. Your employers feel that you earn your salary, and the rest is nobody else's business.
But witness the strange and impotent rage that this fairly innocuous post generates. Let's start with the merely stupid:
Thank you, patriotic comrade! The Party has determined that your skills are not being allocated in a way most beneficial to the glorious People's Republic of San Francisco. Under the new 5 year plan, you will report to your new assigned socially optimal task, or will be transported to the Gulag.
This turkey just can't wait to unleash his inner totalitarian. If what you are doing is judged to not be socially optimal by some nebulous calculus, then it is to be outlawed, even if someone else was freely willing to pay you for it and there was no obvious social harm. Coming soon, a ban on Playstations, gossip magazines, and movies over 90 minutes long!
Also witness the complete lack of understanding of how markets work. Person A has an outstanding order to sell IBM stock for $80. Person B has an order to buy at $78. Person C comes along, more anxious to sell, and places an order to sell at $78.20. Along comes a high frequency trading firm, and 2 microseconds later agrees to buy the share at $78.20 off Person C. This is clearly exploitative, how? Oh, presumably because the HFT firm might sell the share a minute later for $78.22. According to this nitwit, the HFT firm is 'skimming something off the top'. So what? Your supermarket buys apples in bulk at $1 per kilo, and sells them at retail for $2 per kilo, 'skimming something off the top'. Your antiques dealer buys a nightstand at $100, and sells it a week later at $150, 'skimming something off the top'. Do you rage against them too? And you, noble untainted computer programmer, will hire out your underlings at $200 per hour, while only paying them $100. You know why? Because the alternative to people 'skimming something off the top' is the 'All Good Must Be Sold At Cost Act of 2011', also known as 'shutting down all business immediately by mandating profits to be at most zero, and negative if you can't actually sell the item you bought'.
Bt believe it or not, that' not the worst comment of the thread. That honor goes to clown #2:
I would be intrigued to hear you flesh out the details of how exactly you came to this conclusion.
No shit, eh? Perhaps that's because you're working in a job that DOESN'T REQUIRE THINGS TO BE DEBUGGED IN MINUTES. If you were, and you decided that you just couldn't in good conscience debug something in 5 minutes, then you'd be COMPLETELY FUCKING USELESS IF THEY ACTUALLY NEEDED THE TASK FINISHED IN 5 MINUTES TIME.
Well, bully for you.
To which I keep asking, so what? Nobody's taking pot shots at what you do. But as long as you're up on your high horse, making audio software and doing a bit of open source doesn't exactly make you Mother Theresa. Johnny Totalitarian in the first quote may well decide that the world has quite enough audio software already, and you'd be better off cleaning garbage. And when he did, I'd tell him to piss off them as well. Your employer pays you good money for what you do, and the other guy's employer pays him for what he does. Good. If you want to take a lower paying job that gives you more satisfaction, because you produce something tangible, I applaud that choice. If the other guy doesn't, I'm fine with that too.
And so from this carefully constructed argument, comes the obvious conclusion:
I'm going to assume that you're just throwing this out there as a gratuitous insult, not as something that readers should be concluding based on the premises you've laid out.
You work as a programmer for a finance firm, ergo you should die in a fire.
You, sir, are a pompous fuckwit. You rage against an industry you don't understand, and against the fact that the world does not accord you the income and status that you feel is your right. But unfortunately for you, the finance industry doesn't actually give a rat's ass what you think of it. There is not a single employee at a finance firm that is going to lose a minute's sleep because you happen to not approve of their vocation, and your fury is all the more fierce because you know this is true.
George Bernard Shaw was a brilliant writer.He was also a Communist who liked eugenics and star chamber executions of people who couldn't prove their social worth. Being smart doesn't stop you believing stupid things.
[Edit]: Clown #2 uses his real name as his post, but on reflection I decided not to post it. If you, like me, don't like the trend of personalising internet attacks, you need to resist the urge to take part. If he changes his mind, his dumbass earlier comments should haunt his reputation.
There is a thread on slashdot where a programmer at a high frequency trading finance firm explains what he does:
I work on the algo and core infrastructure. I wrote price feeds that take 1/5th of a microsecond in C++ and (a little slower) in Java. I understand in fine detail how cache and the the PCI-e bus works.
blah blah blah technical details to show I'm really good at what I do.
And then, of course, the punch line
I also hope to make $500,000 this year.
You always hear about Google programmers being the best in the industry, but I've been to a couple Google interviews and turned them down both times because the engineering quality just isn't there. I'd put the average HFT programmer up against the best in Google anyday.
My response? Good for you, mate. I have very little basis to distinguish whether you're actually as good as you say you are, or whether you just have a very inflated opinion of yourself. Frankly, I doubt anyone else does either. Not that it matters, really. Your employers feel that you earn your salary, and the rest is nobody else's business.
But witness the strange and impotent rage that this fairly innocuous post generates. Let's start with the merely stupid:
What could possibly change in the underlying value of a corporation made up of flesh and blood humans and capital with decades of depreciation in a fucking microsecond? Here's a hint: nothing. You are not investing, or trading, but simply racing other gamblers. Investing doesn't benefit from microsecond response times, and trading doesn't need it either. People could buy IPO shares just fine over the phone. Nobody ever needed a microsecond response time to buy a thousand bushels of wheat, and never will, because bread is baked daily, not a million times a fucking second.
If politicians had two braincells to rub together, they'd enact a law to prevent trades faster than some tick, say, an hour. Your 'trading' company would go out of business in a week, and nobody would care. Farmers would still sell their wheat, and bakers would still buy it, but without you leeches skimming off the top.
Thank you, patriotic comrade! The Party has determined that your skills are not being allocated in a way most beneficial to the glorious People's Republic of San Francisco. Under the new 5 year plan, you will report to your new assigned socially optimal task, or will be transported to the Gulag.
This turkey just can't wait to unleash his inner totalitarian. If what you are doing is judged to not be socially optimal by some nebulous calculus, then it is to be outlawed, even if someone else was freely willing to pay you for it and there was no obvious social harm. Coming soon, a ban on Playstations, gossip magazines, and movies over 90 minutes long!
Also witness the complete lack of understanding of how markets work. Person A has an outstanding order to sell IBM stock for $80. Person B has an order to buy at $78. Person C comes along, more anxious to sell, and places an order to sell at $78.20. Along comes a high frequency trading firm, and 2 microseconds later agrees to buy the share at $78.20 off Person C. This is clearly exploitative, how? Oh, presumably because the HFT firm might sell the share a minute later for $78.22. According to this nitwit, the HFT firm is 'skimming something off the top'. So what? Your supermarket buys apples in bulk at $1 per kilo, and sells them at retail for $2 per kilo, 'skimming something off the top'. Your antiques dealer buys a nightstand at $100, and sells it a week later at $150, 'skimming something off the top'. Do you rage against them too? And you, noble untainted computer programmer, will hire out your underlings at $200 per hour, while only paying them $100. You know why? Because the alternative to people 'skimming something off the top' is the 'All Good Must Be Sold At Cost Act of 2011', also known as 'shutting down all business immediately by mandating profits to be at most zero, and negative if you can't actually sell the item you bought'.
Bt believe it or not, that' not the worst comment of the thread. That honor goes to clown #2:
I am most likely better than you at each and every aspect of software (and HDL) development you have mentioned.
I would be intrigued to hear you flesh out the details of how exactly you came to this conclusion.
Except, of course, "debugging in minutes" -- that kind of irresponsibility would get me fired.
No shit, eh? Perhaps that's because you're working in a job that DOESN'T REQUIRE THINGS TO BE DEBUGGED IN MINUTES. If you were, and you decided that you just couldn't in good conscience debug something in 5 minutes, then you'd be COMPLETELY FUCKING USELESS IF THEY ACTUALLY NEEDED THE TASK FINISHED IN 5 MINUTES TIME.
I also have to work long hours, and have to have clear understanding of complex issues unrelated to software.
Well, bully for you.
Except I do embedded software and FPGA development for professional audio equipment. Each device I worked on, each firmware release, each line of code, does something useful for many, many people. Some of those people don't even know that audio equipment, leave alone software, is involved with what they are hearing. Large fraction of my work ends up being free/open source, too -- platform, drivers, etc.
To which I keep asking, so what? Nobody's taking pot shots at what you do. But as long as you're up on your high horse, making audio software and doing a bit of open source doesn't exactly make you Mother Theresa. Johnny Totalitarian in the first quote may well decide that the world has quite enough audio software already, and you'd be better off cleaning garbage. And when he did, I'd tell him to piss off them as well. Your employer pays you good money for what you do, and the other guy's employer pays him for what he does. Good. If you want to take a lower paying job that gives you more satisfaction, because you produce something tangible, I applaud that choice. If the other guy doesn't, I'm fine with that too.
And so from this carefully constructed argument, comes the obvious conclusion:
I also don't have any problems with posting here under my real name. Or with telling you, and people like you, to die in a fire.
I'm going to assume that you're just throwing this out there as a gratuitous insult, not as something that readers should be concluding based on the premises you've laid out.
You work as a programmer for a finance firm, ergo you should die in a fire.
You, sir, are a pompous fuckwit. You rage against an industry you don't understand, and against the fact that the world does not accord you the income and status that you feel is your right. But unfortunately for you, the finance industry doesn't actually give a rat's ass what you think of it. There is not a single employee at a finance firm that is going to lose a minute's sleep because you happen to not approve of their vocation, and your fury is all the more fierce because you know this is true.
George Bernard Shaw was a brilliant writer.He was also a Communist who liked eugenics and star chamber executions of people who couldn't prove their social worth. Being smart doesn't stop you believing stupid things.
[Edit]: Clown #2 uses his real name as his post, but on reflection I decided not to post it. If you, like me, don't like the trend of personalising internet attacks, you need to resist the urge to take part. If he changes his mind, his dumbass earlier comments should haunt his reputation.
Thursday, July 28, 2011
Shylock Holmes on Greg House vs Sherlock Holmes
File this in the category of 'Things that lots of people have figured out before me, but I still thought of independently'.
I'm a fan of the TV show 'House'. The character Greg House is one of the more compelling and interesting to grace TV screens in recent memory - brilliant at diagnosing medical ailments, socially distant, sarcastic to all around him, but deeply appealing.
It took me a while to realise exactly what it was about the show that made it so enjoyable. And I finally figured it out - they've essentially re-written the Sherlock Holmes series as a medical show.
The plot twists are those of a mystery novel - diseases are not what they seem, people are hiding their true motivations and lying, the doctors need to dig around to find out what's going on. And in the same way, the true diagnosis is only ever revealed at the end, requiring ingenuity to decipher.
There are also lots of references to the Sherlock Holmes series. For a start, the character names are an homage: House is Holmes (a pun on house/home, since 'House' is an otherwise very odd surname). House, like Holmes, also takes narcotics - Holmes takes heroin when he is bored from not having a case, and House (because the former seemed a little unpalatable for TV) is addicted to Vicodin for his crippling leg pain. Wilson is his sidekick, playing the role of Watson.
And the show works, because they copied enough of a truly brilliant series to capture the appeal in a TV setting. But there are differences.
One difference is that House is much more character driven than Sherlock Holmes. This is partly necessary for TV. House himself is much more funny and sarcastic than Holmes, with the latter being generally portrayed as brilliant but somewhat cold and monomaniacal in his pursuit of crime. House also has more people around him - the supporting cast of doctors to riff on, and Cuddy as his boss/love interest. The last point is a distinct departure, as Holmes showed no interest in women at all. House, they compromise by making his relationships destructive. It's no surprise that the episodes that sucked the most were when House was happily dating Cuddy, as they rang false.
But perhaps the most important difference (related to the first) is that Sherlock Holmes was fundamentally about the mystery. Sir Arthur Conan Doyle said that his big departure from previous mystery writers was that Holmes didn't have any special magic intuition - everything he deduced, the reader could have conceivably deduced too, if only they had been sharp enough. As such, the stories were appealing because of the challenge of trying (and in my case, usually failing) to figure out who the culprit would be.
House, of course, can't do this. Even if the medical insights are all correct (and given it's TV, that may well be questionable), the reader can't be expected to figure it out himself. And that, in the end, is why it has to be a character-based show - we can live vicariously through House's genius insights, but they have to fall into the magical intuition that Sir Conan Doyle sought to avoid. And that is why, at the end of it, Sherlock Holmes is about the brilliance of Sir Arthur Conan Doyle, but House is about the brilliance of Hugh Laurie. Give the same show with a less compelling actor, and it wouldn't work.
I'm a fan of the TV show 'House'. The character Greg House is one of the more compelling and interesting to grace TV screens in recent memory - brilliant at diagnosing medical ailments, socially distant, sarcastic to all around him, but deeply appealing.
It took me a while to realise exactly what it was about the show that made it so enjoyable. And I finally figured it out - they've essentially re-written the Sherlock Holmes series as a medical show.
The plot twists are those of a mystery novel - diseases are not what they seem, people are hiding their true motivations and lying, the doctors need to dig around to find out what's going on. And in the same way, the true diagnosis is only ever revealed at the end, requiring ingenuity to decipher.
There are also lots of references to the Sherlock Holmes series. For a start, the character names are an homage: House is Holmes (a pun on house/home, since 'House' is an otherwise very odd surname). House, like Holmes, also takes narcotics - Holmes takes heroin when he is bored from not having a case, and House (because the former seemed a little unpalatable for TV) is addicted to Vicodin for his crippling leg pain. Wilson is his sidekick, playing the role of Watson.
And the show works, because they copied enough of a truly brilliant series to capture the appeal in a TV setting. But there are differences.
One difference is that House is much more character driven than Sherlock Holmes. This is partly necessary for TV. House himself is much more funny and sarcastic than Holmes, with the latter being generally portrayed as brilliant but somewhat cold and monomaniacal in his pursuit of crime. House also has more people around him - the supporting cast of doctors to riff on, and Cuddy as his boss/love interest. The last point is a distinct departure, as Holmes showed no interest in women at all. House, they compromise by making his relationships destructive. It's no surprise that the episodes that sucked the most were when House was happily dating Cuddy, as they rang false.
But perhaps the most important difference (related to the first) is that Sherlock Holmes was fundamentally about the mystery. Sir Arthur Conan Doyle said that his big departure from previous mystery writers was that Holmes didn't have any special magic intuition - everything he deduced, the reader could have conceivably deduced too, if only they had been sharp enough. As such, the stories were appealing because of the challenge of trying (and in my case, usually failing) to figure out who the culprit would be.
House, of course, can't do this. Even if the medical insights are all correct (and given it's TV, that may well be questionable), the reader can't be expected to figure it out himself. And that, in the end, is why it has to be a character-based show - we can live vicariously through House's genius insights, but they have to fall into the magical intuition that Sir Conan Doyle sought to avoid. And that is why, at the end of it, Sherlock Holmes is about the brilliance of Sir Arthur Conan Doyle, but House is about the brilliance of Hugh Laurie. Give the same show with a less compelling actor, and it wouldn't work.
Wednesday, July 27, 2011
Rage against the Abstract
For the last few weeks I have been largely disconnected from the internet. I've been in places or situations without a connection, and when I have been, I haven't felt the desire to catch up in detail on all the usual blogs and websites. I scribble a bit on this blog because I love all my readers dearly, but I have been, in short, with my 'stories'.
One of the realisations that this tends to produce is just how much of your existence is spent thinking about things that, for all intents and purposes, are entirely abstract. The stories in the newspaper are real, of course, but virtually none of them would have a noticeable impact on your life if you didn't read about them. A terrorist attack in Norway, an unjust prosecution of a guy in Australia, haggling over the long-term debt level of the USA - be honest, if you were in a country cottage, would you even know it was happening?
And yet that's what people get worried about, spending their days raging and celebrating over things that matter to them in the aggregate, but not that much individually.
Once upon a time, this wasn't the case. Go back a couple of hundred years, and the only news was local news. If Betty was involved in a scandal, she wasn't a movie star but someone you knew personally. If there was political upheaval, it wasn't that the House of Representatives was controlled by a different party, but that the Vikings were raping and pillaging a town 5 miles away, and heading to you next. It's not that the news was always more important, as local news can get very parochial and gossip driven. But it definitely was a lot more likely to affect you directly.
So what these ways would actually affect you? Economic events you might still notice, but probably only when it affected your company or business. When you get laid off, or your cousin gets laid off, that's a big deal. In this sense, it probably makes sense for people to vote for or against incumbents based largely on how the economy is doing (as they seem to). But if you kept your job and were in a fairly stable business, it would be a lot harder to know exactly what constituted a recession.
The biggest political event of the past decade was easily September 11. If you lived in New York, you'd better believe you would have noticed it even without the newspapers. If you were a member of the military (or knew someone who was), you'd be aware of the fact that you'd been shipped off to Afghanistan.
But if you were just a regular guy living in Detroit who never read the paper? Broadly speaking, the only change you would have noticed would have been a bit more hassle at airport security.
The part that is odd, though, is that it's very difficult to keep this perspective while reading the news every day. People just aren't wired that way - news always interests them, even if it is unlikely to affect them much. The only way to get there is to actually stop reading for a while.
Strange times.
One of the realisations that this tends to produce is just how much of your existence is spent thinking about things that, for all intents and purposes, are entirely abstract. The stories in the newspaper are real, of course, but virtually none of them would have a noticeable impact on your life if you didn't read about them. A terrorist attack in Norway, an unjust prosecution of a guy in Australia, haggling over the long-term debt level of the USA - be honest, if you were in a country cottage, would you even know it was happening?
And yet that's what people get worried about, spending their days raging and celebrating over things that matter to them in the aggregate, but not that much individually.
Once upon a time, this wasn't the case. Go back a couple of hundred years, and the only news was local news. If Betty was involved in a scandal, she wasn't a movie star but someone you knew personally. If there was political upheaval, it wasn't that the House of Representatives was controlled by a different party, but that the Vikings were raping and pillaging a town 5 miles away, and heading to you next. It's not that the news was always more important, as local news can get very parochial and gossip driven. But it definitely was a lot more likely to affect you directly.
So what these ways would actually affect you? Economic events you might still notice, but probably only when it affected your company or business. When you get laid off, or your cousin gets laid off, that's a big deal. In this sense, it probably makes sense for people to vote for or against incumbents based largely on how the economy is doing (as they seem to). But if you kept your job and were in a fairly stable business, it would be a lot harder to know exactly what constituted a recession.
The biggest political event of the past decade was easily September 11. If you lived in New York, you'd better believe you would have noticed it even without the newspapers. If you were a member of the military (or knew someone who was), you'd be aware of the fact that you'd been shipped off to Afghanistan.
But if you were just a regular guy living in Detroit who never read the paper? Broadly speaking, the only change you would have noticed would have been a bit more hassle at airport security.
The part that is odd, though, is that it's very difficult to keep this perspective while reading the news every day. People just aren't wired that way - news always interests them, even if it is unlikely to affect them much. The only way to get there is to actually stop reading for a while.
Strange times.
Tuesday, July 26, 2011
Future Mensa Chapter Presidents Try Their Hands At Blackmail
Via Hector Lopez comes a story that is full of so much fail it's hard to know where to start.
Two teenagers in Sydney somehow manage to get a nude photograph of the wife of lawyer. Rather than just get their jollies looking at it or send it to their friends, they hit upon the idea of trying to blackmail the wife into paying $15,000 for it.
No, really.
But the hilarity is only getting started.
By all accounts, the kids had given virtually no thought to the possibility that the woman might contact the police. Which, of course, she did.
The boy and girl allegedly demanded the woman leave $15,000 in a toilet cistern at a Hunters Hill hotel or they would make the photo public.
They arranged a meeting place in a hotel bathroom. You know, because if there's one thing about a money pickup location that you really really want, it's having only a single possible entrance and exit that's easily monitored from lots of locations, where lots of people are guaranteed to be milling around so you'll have no idea if you're being watched.
They were arrested after the woman's husband reported the demand to police and a covert operation was set up to catch the youths. The girl was arrested by plainclothes officers on May 30 after she walked out of the unisex bathroom of the hotel's gaming room empty handed.
Having set up this wicked location, they then decided to pick it up themselves immediately. Genius! What could possibly go wrong?
Okay, so maybe they didn't think about it ahead of time, but what about when they already realized the police were involved? Surely they tried to cover their tracks then?
About an hour after the girl was arrested the woman's husband received a call from the offenders, the court was told.
The caller said: "You used undercover cops, f ... you, f ... you. You tell (name of woman) she is dead".
Hmmm, strangely they decided to double down on their jail time by making telephone death threats to a number that SURELY was going to be monitored by the cops. An intriguing gambit!
Alright give them some credit, it's hard to think clearly when you're panicking. And frankly it's not clear how to pick a location to get the cash that would be able to foil all police efforts. Maybe that's a reason not to do it in the first place, but let's give them some leeway.
What about the basics? Surely they covered their tracks even a little?
A copy of the extortion letter received by the victim on May 29 was allegedly found by police on an Apple laptop used by the siblings. ...
The letter was allegedly saved in a file titled "threat letter MILF" less than five hours before a copy was allegedly slid under the front door of the victim's mansion in an envelope addressed to the victim and labelled "private".
Okay, this raises at least two questions.
1. Why would you save the letter? Why not just press delete? Are you trying to create a paper trail for the cops?
2. WHY, IN THE NAME OF ALL THAT IS HOLY WOULD YOU CALL THE FILE 'threat letter MILF'? HAVE YOU COMPLETELY LOST YOUR MINDS???
But I haven't even gotten to the finishing touch of the story:
The teens' mother told police the laptop was used by both her children.
Thanks Mum!!!
So your children are being investigated for crimes that would put them in prison for a long time, and you're PROVIDING MATERIAL EVIDENCE TO THE POLICE TO HELP ENSURE THEIR CONVICTION! When they come asking questions, tell them to get the hell out of your house if they don't have a warrant! I guess stupid runs in the family.
I hereby sentence you both to 20 years to life for being gigantic dumbasses who are too stupid to be left to roam free in society.
Two teenagers in Sydney somehow manage to get a nude photograph of the wife of lawyer. Rather than just get their jollies looking at it or send it to their friends, they hit upon the idea of trying to blackmail the wife into paying $15,000 for it.
No, really.
But the hilarity is only getting started.
By all accounts, the kids had given virtually no thought to the possibility that the woman might contact the police. Which, of course, she did.
The boy and girl allegedly demanded the woman leave $15,000 in a toilet cistern at a Hunters Hill hotel or they would make the photo public.
They arranged a meeting place in a hotel bathroom. You know, because if there's one thing about a money pickup location that you really really want, it's having only a single possible entrance and exit that's easily monitored from lots of locations, where lots of people are guaranteed to be milling around so you'll have no idea if you're being watched.
They were arrested after the woman's husband reported the demand to police and a covert operation was set up to catch the youths. The girl was arrested by plainclothes officers on May 30 after she walked out of the unisex bathroom of the hotel's gaming room empty handed.
Having set up this wicked location, they then decided to pick it up themselves immediately. Genius! What could possibly go wrong?
Okay, so maybe they didn't think about it ahead of time, but what about when they already realized the police were involved? Surely they tried to cover their tracks then?
About an hour after the girl was arrested the woman's husband received a call from the offenders, the court was told.
The caller said: "You used undercover cops, f ... you, f ... you. You tell (name of woman) she is dead".
Hmmm, strangely they decided to double down on their jail time by making telephone death threats to a number that SURELY was going to be monitored by the cops. An intriguing gambit!
Alright give them some credit, it's hard to think clearly when you're panicking. And frankly it's not clear how to pick a location to get the cash that would be able to foil all police efforts. Maybe that's a reason not to do it in the first place, but let's give them some leeway.
What about the basics? Surely they covered their tracks even a little?
A copy of the extortion letter received by the victim on May 29 was allegedly found by police on an Apple laptop used by the siblings. ...
The letter was allegedly saved in a file titled "threat letter MILF" less than five hours before a copy was allegedly slid under the front door of the victim's mansion in an envelope addressed to the victim and labelled "private".
Okay, this raises at least two questions.
1. Why would you save the letter? Why not just press delete? Are you trying to create a paper trail for the cops?
2. WHY, IN THE NAME OF ALL THAT IS HOLY WOULD YOU CALL THE FILE 'threat letter MILF'? HAVE YOU COMPLETELY LOST YOUR MINDS???
But I haven't even gotten to the finishing touch of the story:
The teens' mother told police the laptop was used by both her children.
Thanks Mum!!!
So your children are being investigated for crimes that would put them in prison for a long time, and you're PROVIDING MATERIAL EVIDENCE TO THE POLICE TO HELP ENSURE THEIR CONVICTION! When they come asking questions, tell them to get the hell out of your house if they don't have a warrant! I guess stupid runs in the family.
I hereby sentence you both to 20 years to life for being gigantic dumbasses who are too stupid to be left to roam free in society.
Monday, July 25, 2011
Upward-Sloping Demand Curves for Classical Music Concerts
There are some instances in life where your demand curve slopes upwards - the higher the price, the more you want to buy. Even where this occurs, it is of course a local effect - you may buy fewer Louis Vuitton handbags if the general price were $5 instead of $500, but you'd surely buy ever fewer if the price were $500,000. So the usual caveats apply.
But one case where this happens to me is classical music concerts.
To me, the absolute worst price that can be set for such an event is $0, especially for any event held outdoors.
Outdoor concerts evoke a picnic-type atmosphere. Wouldn't it be lovely if we got some wine and cheese and sat on a rug and listened to classical music. The easier-listening the better! It's a triple-header of Eine Kleine Nacht Musik, Pachelbel's Canon and Vivaldi's 'The Four Seasons'? That sounds perfect!
Now, this is actually fine, as it goes. Classical music is like poetry - given it's rarefied enough, there's no need to ramp up the snobbery.
But what I can't stand is that this kind of event attracts people who want to use the occasion of a concert with real-life musicians as if it were a CD on in the background - merely an aid to conversation.
This is infuriating on at least two levels.
Firstly, it shows a great disrespect to the performers, who can see and hear you nattering away to your friends about how lovely the Napa valley was last weekend.
More importantly, it's incredibly annoying to everyone around you who is then faced with the difficult task of trying to filter out your conversational drivel and focus on enjoying the music. To me, at least, this is nigh on impossible. It's like trying to not listen to a screaming child. The people involved yabber away, usually oblivious to the fact that they're imposing a huge negative externality on lots of people around them. But it's not just obliviousness that drives it. I've even seen people get angsty when other good citizens finally tire of it and tell them to shush. They'll often start up again within a few minutes, daring you to call them out twice (which, of course, will work no better the second time than the first).
Free concerts are the worst, because when you shift your price from $10 per person to $0 per person, the marginal change in audience members is those whose willingness to pay was necessarily in single digits. These bogans are amongst the most likely to have no sense of propriety or consideration for people who want to actually listen to the music. Some of them will be fine, but it doesn't take many loud-talking losers to spoil the pool for everyone.
From long, sad experience, I now avoid any outdoor classical concerts at all. I prefer to have tickets costing at least $40 per person, and events held in big sombre concert halls which attract regular orchestra patrons.
The difference in my utility is much, much more than $40.
But one case where this happens to me is classical music concerts.
To me, the absolute worst price that can be set for such an event is $0, especially for any event held outdoors.
Outdoor concerts evoke a picnic-type atmosphere. Wouldn't it be lovely if we got some wine and cheese and sat on a rug and listened to classical music. The easier-listening the better! It's a triple-header of Eine Kleine Nacht Musik, Pachelbel's Canon and Vivaldi's 'The Four Seasons'? That sounds perfect!
Now, this is actually fine, as it goes. Classical music is like poetry - given it's rarefied enough, there's no need to ramp up the snobbery.
But what I can't stand is that this kind of event attracts people who want to use the occasion of a concert with real-life musicians as if it were a CD on in the background - merely an aid to conversation.
This is infuriating on at least two levels.
Firstly, it shows a great disrespect to the performers, who can see and hear you nattering away to your friends about how lovely the Napa valley was last weekend.
More importantly, it's incredibly annoying to everyone around you who is then faced with the difficult task of trying to filter out your conversational drivel and focus on enjoying the music. To me, at least, this is nigh on impossible. It's like trying to not listen to a screaming child. The people involved yabber away, usually oblivious to the fact that they're imposing a huge negative externality on lots of people around them. But it's not just obliviousness that drives it. I've even seen people get angsty when other good citizens finally tire of it and tell them to shush. They'll often start up again within a few minutes, daring you to call them out twice (which, of course, will work no better the second time than the first).
Free concerts are the worst, because when you shift your price from $10 per person to $0 per person, the marginal change in audience members is those whose willingness to pay was necessarily in single digits. These bogans are amongst the most likely to have no sense of propriety or consideration for people who want to actually listen to the music. Some of them will be fine, but it doesn't take many loud-talking losers to spoil the pool for everyone.
From long, sad experience, I now avoid any outdoor classical concerts at all. I prefer to have tickets costing at least $40 per person, and events held in big sombre concert halls which attract regular orchestra patrons.
The difference in my utility is much, much more than $40.
Sunday, July 24, 2011
Ye Gads!
Tail Risk - doing 120 miles per hour in a Ferrari Sessanta down a fairly narrow English country road.
For any English law enforcement officials reading this, I am of course speaking entirely hypothetically.
Hypothetically, I imagine you might be pushed back into your chair, clutching the Jesus bar on the door, and hoping to high heaven that your friend knows what he's doing, but with a huge grin on your face nonetheless.
A Whoooooo woo!
For any English law enforcement officials reading this, I am of course speaking entirely hypothetically.
Hypothetically, I imagine you might be pushed back into your chair, clutching the Jesus bar on the door, and hoping to high heaven that your friend knows what he's doing, but with a huge grin on your face nonetheless.
A Whoooooo woo!
Friday, July 22, 2011
Great news for German taxpayers!
So the big economic news of the day is that Greece is going to default, and that the ECB and the IMF are going to bail them out. The first part was a virtual certainty sooner or later, the second part less so.
European politicians being who they are, there is never a single problem for which the solution is not 'more powers for the EU, more centralised government!'. True to form, they've done it again:
Well that's great! Now that they've solved the problem with the level of debt (sort of), I'm sure the problem of the first derivative of debt (I.e. the ongoing Greek budget deficit that they still can't close, and keep getting riots whenever they try) will just take care of itself, right?
Ha ha ha! Yeeeeah. About that...
In much better news, Ireland, Portugal, Spain and Italy all solemnly announced that they really truly ruly aren't going to default as well:
And that's a guarantee you can take to the bank! Probably not a European bank, mind you, as they've got quite enough debt from these governments already, thanks very much, and are busy dusting off their 'How to respond to a bank run' manuals.
Let me translate all this for German taxpayers:
The good news is, you're going to have to pay for all those Greek civil servants!
The better news is, it's incredibly unlikely that this is the last time you're going to have to reach for your wallet.
European politicians being who they are, there is never a single problem for which the solution is not 'more powers for the EU, more centralised government!'. True to form, they've done it again:
Euro zone leaders were set to give their financial rescue fund sweeping new powers to prevent contagion and help Greece overcome its debt crisis, according to the draft conclusions of an emergency summit on Thursday.
...
The leaders were also set to promise a "Marshall Plan" of European public investment to help revive the Greek economy, in a deep recession due to draconian EU/IMF-imposed austerity."
Well that's great! Now that they've solved the problem with the level of debt (sort of), I'm sure the problem of the first derivative of debt (I.e. the ongoing Greek budget deficit that they still can't close, and keep getting riots whenever they try) will just take care of itself, right?
Ha ha ha! Yeeeeah. About that...
In much better news, Ireland, Portugal, Spain and Italy all solemnly announced that they really truly ruly aren't going to default as well:
In Brussels, the governments insisted that Greece was "a uniquely grave situation in the Euro area". In the draft agreement, the 17 leaders agreed that "all other euro countries solemnly reaffirm their inflexible determination" not to default.
And that's a guarantee you can take to the bank! Probably not a European bank, mind you, as they've got quite enough debt from these governments already, thanks very much, and are busy dusting off their 'How to respond to a bank run' manuals.
Let me translate all this for German taxpayers:
The good news is, you're going to have to pay for all those Greek civil servants!
The better news is, it's incredibly unlikely that this is the last time you're going to have to reach for your wallet.
Thursday, July 21, 2011
Same Same, but Different
Wednesday, July 20, 2011
Cute ~= Small
Cuteness in animals is largely a matter of scale.
A kitten is cute.
A sparrow is also cute.
But a kitten is not at all cute if you're a sparrow. It's the equivalent (to us) of a man-eating tiger the size of an elephant. And if you're an earthworm, a sparrow is like Jaws, but a Jaws that comes crashing through your living room wall and eats you as you're minding your business one day.
Bear this in mind next time a butterfly seems reluctant to land on your finger. After all, to it you are the Death Star.
Some people do not adhere to this idea of cute. To them, a tiger is just as cute as a kitten. It's just a big, cuddly kitten!
Those people, however, tend to get eaten. And thus evolution once again forces the rough definition that cuteness can only be perceived in things much smaller than you.
A kitten is cute.
A sparrow is also cute.
But a kitten is not at all cute if you're a sparrow. It's the equivalent (to us) of a man-eating tiger the size of an elephant. And if you're an earthworm, a sparrow is like Jaws, but a Jaws that comes crashing through your living room wall and eats you as you're minding your business one day.
Bear this in mind next time a butterfly seems reluctant to land on your finger. After all, to it you are the Death Star.
Some people do not adhere to this idea of cute. To them, a tiger is just as cute as a kitten. It's just a big, cuddly kitten!
Those people, however, tend to get eaten. And thus evolution once again forces the rough definition that cuteness can only be perceived in things much smaller than you.
Monday, July 18, 2011
Zero Punctuation on Mortal Kombat
It's rare that a review of a video game is entertaining at all, let alone entertaining if you haven't actually played the game. But Ben 'Yahtzee' Croshaw, of 'Zero Punctuation', meets that unusual threshold of video reviews that are comedy classics in themselves, regardless of whether you know or like the game. Here's his take on Mortal Kombat, a game I used to play the original version of, many moons ago.
If you like it, you should check out his reviews of L.A. Noire and Duke Nukem.
As the man said, comedy gold!
If you like it, you should check out his reviews of L.A. Noire and Duke Nukem.
As the man said, comedy gold!
Friday, July 15, 2011
A Guide for Cyclists
You are on a bike, and someone in a car is yelling at you. Here's a classic guide to why they might be doing so.
Tuesday, July 12, 2011
Rhyme Schemes that Show a Song's Age
Take the song 'Ditty', by one-hit-wonder 'Paperboy'.
Let's assume you didn't know when the song was released, watch the video and see if you can ballpark when it must have been by the lyrics alone:
My suggested answer is below:
It must have been before 1998.
Consider the following lines from the first verse:
If you wrote the first line in that quote today, it is inconceivable that you would rhyme 'Niagra' with 'Stag Ya' instead of 'Viagra'. 'Niagra' is a word that doesn't really rhyme with much, and rappers being lazy and sexual innuendo being a popular theme, it is the obvious choice. 'Stag ya', on the other hand, means nothing - urban dictionary lists definitions of 'stag' mainly as nouns and adjectives, not verbs. Primary definitions are about going solo to an event, and some secondary definitions list 'stag' as slang for an erection. Either way, it's a weird line to put in there. The only conclusion is that the song was written before Viagra existed.
Sure enough, the song was released in 1993, and Viagra was available from 1998.
I mean sure, you could just look up the release date, but where's the fun in that? It doesn't make you feel like Sherlock (or even Shylock) Holmes.
Let's assume you didn't know when the song was released, watch the video and see if you can ballpark when it must have been by the lyrics alone:
My suggested answer is below:
It must have been before 1998.
Consider the following lines from the first verse:
And ah, you just watch a brother flowin' like Niagra,So here's the basis of my claim.
Think before you step, because these niggas might just stag ya
If you wrote the first line in that quote today, it is inconceivable that you would rhyme 'Niagra' with 'Stag Ya' instead of 'Viagra'. 'Niagra' is a word that doesn't really rhyme with much, and rappers being lazy and sexual innuendo being a popular theme, it is the obvious choice. 'Stag ya', on the other hand, means nothing - urban dictionary lists definitions of 'stag' mainly as nouns and adjectives, not verbs. Primary definitions are about going solo to an event, and some secondary definitions list 'stag' as slang for an erection. Either way, it's a weird line to put in there. The only conclusion is that the song was written before Viagra existed.
Sure enough, the song was released in 1993, and Viagra was available from 1998.
I mean sure, you could just look up the release date, but where's the fun in that? It doesn't make you feel like Sherlock (or even Shylock) Holmes.
Friday, July 8, 2011
Holidays!
In the spirit of disclosure, I will be wandering abroad for most of July, going wherever the four winds shall take me. As a result, I will have scant access to blog-related chicanery. The spirit will be willing, dear reader, but the technology will be weak. So expect only periodic posting until the start of August, when the full dose of Holmes will be back.
Tuesday, July 5, 2011
What would I know...
The 50 most googled women. Well, that's the title anyway - they actually mean the 50 women that return the most hits on Google, but pedantry aside, it's interesting. As you'd expect, it's heavily weighted towards young attractive pop stars, with a small mix of noteworthy older (and one dead!) women.
Personally, there were 11 I'd never heard of. Usually I'm proud of my ignorance of deadbeat celebrities - I remember seeing a gossip magazine at a supermarket checkout about a year ago, and being quite happy when I realised I had no idea who the people on the front were. In this case, however, some of the photos suggest a certain compelling logic to the interest these women hold for the average person (or at least the average male).
Personally, there were 11 I'd never heard of. Usually I'm proud of my ignorance of deadbeat celebrities - I remember seeing a gossip magazine at a supermarket checkout about a year ago, and being quite happy when I realised I had no idea who the people on the front were. In this case, however, some of the photos suggest a certain compelling logic to the interest these women hold for the average person (or at least the average male).
Monday, July 4, 2011
Big Mistakes to Avoid
Ace of Spades links to this excellent Guardian piece about a guy in a mental institution who is thought to be a psychopath, and the difficulty he has in convincing them that he's not.
While it makes a very good point about the shades of grey in what constitutes psychopathy, I thought the most telling point was actually at the start:
Because even if you win, you lose.
The biggest problem is that you can easily be held in the loony bin for substantially longer than your original prison sentence would have been. Not only that, but they're not under any obligation to let you out, ever. You have to convince various psychiatrists and tribunals. And guess what? It's going to be their ass on the line if you go out and murder someone after being certified as sane. So whaddaya know, they tend to be somewhat conservative in recommending release!
It also shows a real failure of imagination. Because what's your plan once you get into the mental institution? "Easy. I'll just tell them that I faked my mental illness to escape prison, they'll realise what a miscarriage of justice it is to keep a lying violent perjurer in an institution for a second longer, and I'll walk free."
Yeah, not so much.
"Okay, fine, I won't tell them I was faking it, I'll just fake a recovery from whatever disease they think I have, even though I won't know exactly what they're looking for as signs of improvement, other than just acting nice and sane."
Are you starting to see why good lawyers don't often recommend that you plead insanity if you're not, in fact, insane?
While it makes a very good point about the shades of grey in what constitutes psychopathy, I thought the most telling point was actually at the start:
"I'd committed GBH [Grievous Bodily Harm]," he said. "After they arrested me, I sat in my cell and I thought, 'I'm looking at five to seven years.' So I asked the other prisoners what to do. They said, 'Easy! Tell them you're mad! They'll put you in a county hospital. You'll have Sky TV and a PlayStation. Nurses will bring you pizzas.'"This is old, old news to lawyers, but for some reason always comes as a surprise to the average person - unless you're facing the death penalty and are very clearly guilty, it's probably not a good idea to plead insanity.
"How long ago was this?" I asked.
"Twelve years ago," Tony said.
Because even if you win, you lose.
The biggest problem is that you can easily be held in the loony bin for substantially longer than your original prison sentence would have been. Not only that, but they're not under any obligation to let you out, ever. You have to convince various psychiatrists and tribunals. And guess what? It's going to be their ass on the line if you go out and murder someone after being certified as sane. So whaddaya know, they tend to be somewhat conservative in recommending release!
It also shows a real failure of imagination. Because what's your plan once you get into the mental institution? "Easy. I'll just tell them that I faked my mental illness to escape prison, they'll realise what a miscarriage of justice it is to keep a lying violent perjurer in an institution for a second longer, and I'll walk free."
Yeah, not so much.
"Okay, fine, I won't tell them I was faking it, I'll just fake a recovery from whatever disease they think I have, even though I won't know exactly what they're looking for as signs of improvement, other than just acting nice and sane."
Are you starting to see why good lawyers don't often recommend that you plead insanity if you're not, in fact, insane?
Saturday, July 2, 2011
A short fictional dialogue I enjoyed
[Some dude]: Hey man, you should get a tattoo of an eagle on your shoulder / drink that bottle of vodka / [insert stupid $#** here]
[Shylock]: Sorry dude, no can do. I'm addicted to good decisions. I started making them, and it felt really good, and now I just can't stop. Seriously, you should try a hit of it.
[Shylock]: Sorry dude, no can do. I'm addicted to good decisions. I started making them, and it felt really good, and now I just can't stop. Seriously, you should try a hit of it.
Friday, July 1, 2011
Things I should have done a long time ago
So yesterday I purchased a new bed. Queen size, pillow-top, the works. It's pretty sweet, but that's not important right now.
What's amazing is that I put up with my double bed for so many years. I bought a double instead of a queen because once upon a time, when I first moved to these shores, I was staying in a tiny room. I wanted the length of a queen - the double bed was 6 feet long, which would fit me as long as my head was within about half an inch of the top edge of the bed. Which, as you can imagine, is not exactly where one typically tends to place one's head on a pillow.
The reason I got the smaller bed was actually because I couldn't afford the extra width. My desk was jammed right next to my bed, and the extra four inches was in fact the entire distance that my desk chair could move in or out. Deciding that I was going to spend more hours at my desk than my bed (and probably being right), I went for the chair space.
The bed also had numerous other quirks. Some of the sheets I had were for a queen bed, and hence kept getting pulled off the bed in the night. They always managed to bunch up in a ball somewhere underneath my lower back, which was convenient, since the mild back pain would let me know where to find them.
The reality, dear reader, is that I would/could/should have replaced my bed years ago. I was only in my tiny apartment for two years, and then in places that would support a bigger bed. I easily blew the cost of the new bed on all sorts of stupid junk.
"Sensible" procrastination (if there exists such a thing) involves doing something really fun now and putting off something necessary but unpleasant. The worst kind of stupid hyperbolic discounting is putting off something that will bring long-lasting benefit, while instead doing something that's not even that fun. Like, you know, wasting months of my life on the internet instead of buying a new bed.
I leave it to the imagination of the reader how many years of poor decisions this has constituted, and how many of those I can claim the fig leaf of income constraints versus pure procrastination.
What's amazing is that I put up with my double bed for so many years. I bought a double instead of a queen because once upon a time, when I first moved to these shores, I was staying in a tiny room. I wanted the length of a queen - the double bed was 6 feet long, which would fit me as long as my head was within about half an inch of the top edge of the bed. Which, as you can imagine, is not exactly where one typically tends to place one's head on a pillow.
The reason I got the smaller bed was actually because I couldn't afford the extra width. My desk was jammed right next to my bed, and the extra four inches was in fact the entire distance that my desk chair could move in or out. Deciding that I was going to spend more hours at my desk than my bed (and probably being right), I went for the chair space.
The bed also had numerous other quirks. Some of the sheets I had were for a queen bed, and hence kept getting pulled off the bed in the night. They always managed to bunch up in a ball somewhere underneath my lower back, which was convenient, since the mild back pain would let me know where to find them.
The reality, dear reader, is that I would/could/should have replaced my bed years ago. I was only in my tiny apartment for two years, and then in places that would support a bigger bed. I easily blew the cost of the new bed on all sorts of stupid junk.
"Sensible" procrastination (if there exists such a thing) involves doing something really fun now and putting off something necessary but unpleasant. The worst kind of stupid hyperbolic discounting is putting off something that will bring long-lasting benefit, while instead doing something that's not even that fun. Like, you know, wasting months of my life on the internet instead of buying a new bed.
I leave it to the imagination of the reader how many years of poor decisions this has constituted, and how many of those I can claim the fig leaf of income constraints versus pure procrastination.
Thursday, June 30, 2011
Negative Knowledge
To my mind, one of the most useful functions of the internet is vastly simplifying the search for negative knowledge. How do you verify that something doesn't exist? Obviously in the full philosophical sense, this is quite difficult to do (outside of mathematics). This is related to the problem of induction. David Hume captured this with the example of black swans - the fact that all the swans found so far are white is not proof that all swans are white (an example made more poignant by the fact that black swans do indeed exist, but Hume didn't know this at the time). The question 'Are all swans white' is essentially the question 'Are there any black swans?'. Because we can't prove the first proposition, we can't definitively prove that there aren't any black swans.
Consider the example of the great song 'You Found Me', by The Fray.
The opening lines are:
I found God,On the corner of First and Amistad
The question occurred to me 'I wonder if that's a real place, and if so, where it is?'
Now, go back 30 years and this would be a very hard problem to solve. How do I search all the cities of the world (or just the US) for '1st and Amistad'. Even worse, what if there is no '1st and Amistad'? How do I ever verify that I've checked everywhere and that it actually doesn't exist?
Today, I just type in '1st and Amistad', and google maps directs me to an intersection in Quernado, Texas (which is the only suggested location). I'm also directed to Yahoo Answers, where some mentions that lead singer Isaac Slade actually made up the name, not knowing about the place in Texas.
It works, because I'm harnessing the power of the thousands of other people who've wondered the same question, thankfully some of them much more dedicated and knowledgeable than me. If all of them have searched and found nothing and written as much on the internet, it's not proof that the thing doesn't actually exist, but it makes for a reasonably good assumption.
I wonder if somewhere Zombie David Hume is reprising his argument about the problem of induction, while some Zombie modern teenager killed in a car crash is responding 'No, you just google "Are all Swans White", and it tells you the answer".'
Interesting times we live in.
Wednesday, June 29, 2011
Adventures in Big Government
1. Courtesy of the Greek, comes pictures of the latest rioting in Greece.
I had previously described these people as being on strike against double-entry accounting, but the Greek had an even better description - the 'Time Machine Enthusiasts'. They don't know what policy they want exactly, they just know that they want things to go back to the way they were in 2007. How that's meant to happen, who knows? If the government can't deliver, they must be crooked or evil.
Yeeaaah. Great plan. The Government may well be crooked and evil, but the straightest, most benevolent government isn't going to be able to put the Greek Fiscal Humpty Dumpty back together to 2007 days.
2. Still on the topic of Big Government, Mark Steyn eviscerates Michael Bloomberg's tendency to be enthusiastic for nanny-state policies, but less so for ordinary tasks of local government like clearing the streets of snow:
3. Meanwhile in California, regulation shuts down startup businesses and benefits incumbents! Well, sometimes. Sometimes it benefits nobody. Pundits astounded! News at 11!
I had previously described these people as being on strike against double-entry accounting, but the Greek had an even better description - the 'Time Machine Enthusiasts'. They don't know what policy they want exactly, they just know that they want things to go back to the way they were in 2007. How that's meant to happen, who knows? If the government can't deliver, they must be crooked or evil.
Yeeaaah. Great plan. The Government may well be crooked and evil, but the straightest, most benevolent government isn't going to be able to put the Greek Fiscal Humpty Dumpty back together to 2007 days.
2. Still on the topic of Big Government, Mark Steyn eviscerates Michael Bloomberg's tendency to be enthusiastic for nanny-state policies, but less so for ordinary tasks of local government like clearing the streets of snow:
That’s the very model of a can-do technocrat in the age of Big Government: He can regulate the salt out of your cheeseburger but he can’t regulate it on to Seventh Avenue.Oooh, the burn!
3. Meanwhile in California, regulation shuts down startup businesses and benefits incumbents! Well, sometimes. Sometimes it benefits nobody. Pundits astounded! News at 11!
Tuesday, June 28, 2011
X-Men and Foreign Policy
There is little doubt in my mind that the X-Men series of movies is far and away the best of the comic book movie adaptions.
Not because mutants are awesome, although they are.
No, the reason is that the X-Men is the only series where everybody, heroes and villains, has a believable motivation. And this is because it is ultimately a study in foreign policy.
Think about it. In nearly every comic movie, the plotline relies on some sort of villain who just loves evil for the sake of evil. Sometimes, this can be done in a very compelling way, like the Joker in the new Batman movies. More often it's not, like the Green Goblin in the Spiderman movie. But either way, the characters are never quite plausible, because the bad guys usually relish their nasty actions without any covering narrative. In real life, however, nobody is the villain in their own tale.
X-Men works very well, however, because the groups closely resemble the different attitudes of foreign policy groups, and end up capturing competing and incompatible views that are still internally reasonable.
The audience is positioned to sympathise with Professor X, who is the foreign policy dove. He is pro-mutant, but sympathetic to humans. He believes that humans and mutants can get along, and is always working to defuse conflict between the two groups. The recent movie explores this idea well - Charles Xavier is the liberal son of privilege, the deserving aristocrat working towards the betterment of human/mutant relations. He believes that people can get along because he himself is such a genial and reasonable character - if the world were filled with more people like Charles Xavier, they would all get along! By the end of the movie, he recognises the need for mutants to stay mostly hidden, but always maintains an optimism that by setting a better example, mutants and humans can coexist.
Magneto, on the other hand, is the foreign policy hawk. He, too, is pro-mutant, but believes that mutants and humans will inevitably be in existential conflict - humans will never accept mutants, and battle between them can only be delayed (to the advantage of humans) but not avoided. In the movie, Magneto is a Polish Jew captured by the Nazis during the Holocaust. This is his introduction to the dark side of human nature, and the willingness of humans to be xenophobic and cruel, or to simply go along with leaders who think this way.
But where the movies actually get interesting is the interplay with the third group, namely the humans. In the movies, humans are usually portrayed quite negatively. There are some who are willing to co-exist with mutants, but a deep undercurrent of suspicion and mistrust characterises the general attitude towards mutants. And even when the humans are co-operating, there is always a group with a tendency to view the wholesale killing of all mutants as the most expedient solution to make the whole problem go away.
And this is the real genius of the series. The audience is drawn to sympathise with the dove viewpoint and mutants in general (and interestingly, not with the humans in the movie). And so while watching it, you want the doves to be right. You keep thinking 'But I like the mutants! Why can't everybody get along? If only the humans understood the doves better! If only the hawks could be made into doves'.
But the ways the humans are portrayed, there is lots of evidence that perhaps the hawks are right - the average person won't ever really accept mutants, and will eventually want to kill them all, or round them up and keep them in prisons. In other words, the Holocaust. This problem, of course, gets exacerbated by the hawks, who attack the humans, thereby increasing the dislike of mutants, and making it harder for an uninformed human to make a 'good mutants / bad mutants' distinction.
And this is why you get the most interesting interplay of all, between Professor X and Magneto. They both want to help mutants, but have irreconcilable views on how this should be done. As a result, they find themselves drawn into conflict with each other, but reluctantly so, and always with an eye towards their mutual need to protect themselves from human anger. And ultimately, Professor X and Magneto are genuinely old friends who understand each other's position.
The fact that this is done so successfully is far more impressive writing feat than Marvel is normally given credit for. But doubt not that this interplay is deliberate and very cleverly thought out.
I recommend the new X-Men movie highly.
Not because mutants are awesome, although they are.
No, the reason is that the X-Men is the only series where everybody, heroes and villains, has a believable motivation. And this is because it is ultimately a study in foreign policy.
Think about it. In nearly every comic movie, the plotline relies on some sort of villain who just loves evil for the sake of evil. Sometimes, this can be done in a very compelling way, like the Joker in the new Batman movies. More often it's not, like the Green Goblin in the Spiderman movie. But either way, the characters are never quite plausible, because the bad guys usually relish their nasty actions without any covering narrative. In real life, however, nobody is the villain in their own tale.
X-Men works very well, however, because the groups closely resemble the different attitudes of foreign policy groups, and end up capturing competing and incompatible views that are still internally reasonable.
The audience is positioned to sympathise with Professor X, who is the foreign policy dove. He is pro-mutant, but sympathetic to humans. He believes that humans and mutants can get along, and is always working to defuse conflict between the two groups. The recent movie explores this idea well - Charles Xavier is the liberal son of privilege, the deserving aristocrat working towards the betterment of human/mutant relations. He believes that people can get along because he himself is such a genial and reasonable character - if the world were filled with more people like Charles Xavier, they would all get along! By the end of the movie, he recognises the need for mutants to stay mostly hidden, but always maintains an optimism that by setting a better example, mutants and humans can coexist.
Magneto, on the other hand, is the foreign policy hawk. He, too, is pro-mutant, but believes that mutants and humans will inevitably be in existential conflict - humans will never accept mutants, and battle between them can only be delayed (to the advantage of humans) but not avoided. In the movie, Magneto is a Polish Jew captured by the Nazis during the Holocaust. This is his introduction to the dark side of human nature, and the willingness of humans to be xenophobic and cruel, or to simply go along with leaders who think this way.
But where the movies actually get interesting is the interplay with the third group, namely the humans. In the movies, humans are usually portrayed quite negatively. There are some who are willing to co-exist with mutants, but a deep undercurrent of suspicion and mistrust characterises the general attitude towards mutants. And even when the humans are co-operating, there is always a group with a tendency to view the wholesale killing of all mutants as the most expedient solution to make the whole problem go away.
And this is the real genius of the series. The audience is drawn to sympathise with the dove viewpoint and mutants in general (and interestingly, not with the humans in the movie). And so while watching it, you want the doves to be right. You keep thinking 'But I like the mutants! Why can't everybody get along? If only the humans understood the doves better! If only the hawks could be made into doves'.
But the ways the humans are portrayed, there is lots of evidence that perhaps the hawks are right - the average person won't ever really accept mutants, and will eventually want to kill them all, or round them up and keep them in prisons. In other words, the Holocaust. This problem, of course, gets exacerbated by the hawks, who attack the humans, thereby increasing the dislike of mutants, and making it harder for an uninformed human to make a 'good mutants / bad mutants' distinction.
And this is why you get the most interesting interplay of all, between Professor X and Magneto. They both want to help mutants, but have irreconcilable views on how this should be done. As a result, they find themselves drawn into conflict with each other, but reluctantly so, and always with an eye towards their mutual need to protect themselves from human anger. And ultimately, Professor X and Magneto are genuinely old friends who understand each other's position.
The fact that this is done so successfully is far more impressive writing feat than Marvel is normally given credit for. But doubt not that this interplay is deliberate and very cleverly thought out.
I recommend the new X-Men movie highly.
Monday, June 27, 2011
Metaphor of the Day
From Peter Gabriel's excellent song, Biko.
The subject matter is the death of anti-apartheid activist Steve Biko, beaten to death by South African police.
Sadly the removal of apartheid didn't turn out to herald a panacea for South Africa. But it's probably asking a bit much of a single metaphor to capture that too, so good work Peter Gabriel.
The subject matter is the death of anti-apartheid activist Steve Biko, beaten to death by South African police.
"You can blow out a candle,A wonderful metaphor. And he was right, of course.
But you can't blow out a fire.
Once the flame begins to catch,
The wind will blow it higher."
Sadly the removal of apartheid didn't turn out to herald a panacea for South Africa. But it's probably asking a bit much of a single metaphor to capture that too, so good work Peter Gabriel.
Sunday, June 26, 2011
Starbucks is in the Sanctimony Business
I remember when I used to enjoy Starbucks coffee cups. They had a series called 'The Way I See It', which would feature interesting quotes from various people. There was a lot of modish lefty claptrap, to be sure, but it was usually of the mild and inoffensive kind. And I would actually enjoy seeing what they had.
This was in part designed to appeal to snobbish sensibilities - look at us, identifying with educated thinkers of acceptable elite opinion! But they disguised this well, and it was generally a nice touch.
But sooner or later, they ran into the H.L. Mencken (or P.T. Barnum, depending on which website you believe) dictum that nobody ever went broke underestimating the taste of the American public. The message of sanctimony was a bit too subtle. How to jazz it up? The answer, of course, was this monstrosity:
Got that? YOU SHOULD FEEL GOOD ABOUT YOURSELF BECAUSE YOU BOUGHT THIS COFFEE, YOU ENLIGHTENED BEING!
That's right, apparently buying your $4 coffee makes you a regular Mother Theresa for the word's poor. Never mind the acres of newsprint devoted to exposing what a sham "fair trade" coffee is. (If it was purchased consensually and not taken at the point of a gun, that's fair trade enough in my opinion).
No, what is hilarious is how blatant they are in trying to make you feel puffed up and proud for your role in helping the poor. They've reached the reductio ad absurdum of anti-poverty campaigners - no need to change your behaviour, just feel good about the things you were doing anyway! Could they make it any more explicit that this campaign has absolutely nothing to do with third world coffee farmers and everything to do with how you feel about how special you are for helping out third world coffee farmers? Don't be surprised when marketers see through this sham and react to the incentives that customers are providing - helping poor people is expensive but making people feel self-righteous is cheap! Let's increase the amount of self-righteousness per unit of help to poor people!
I can't decide what is more depressing - the fact that Starbucks thinks their customers are this hollow and conceited, or that they're probably right.
This was in part designed to appeal to snobbish sensibilities - look at us, identifying with educated thinkers of acceptable elite opinion! But they disguised this well, and it was generally a nice touch.
But sooner or later, they ran into the H.L. Mencken (or P.T. Barnum, depending on which website you believe) dictum that nobody ever went broke underestimating the taste of the American public. The message of sanctimony was a bit too subtle. How to jazz it up? The answer, of course, was this monstrosity:
Got that? YOU SHOULD FEEL GOOD ABOUT YOURSELF BECAUSE YOU BOUGHT THIS COFFEE, YOU ENLIGHTENED BEING!
That's right, apparently buying your $4 coffee makes you a regular Mother Theresa for the word's poor. Never mind the acres of newsprint devoted to exposing what a sham "fair trade" coffee is. (If it was purchased consensually and not taken at the point of a gun, that's fair trade enough in my opinion).
No, what is hilarious is how blatant they are in trying to make you feel puffed up and proud for your role in helping the poor. They've reached the reductio ad absurdum of anti-poverty campaigners - no need to change your behaviour, just feel good about the things you were doing anyway! Could they make it any more explicit that this campaign has absolutely nothing to do with third world coffee farmers and everything to do with how you feel about how special you are for helping out third world coffee farmers? Don't be surprised when marketers see through this sham and react to the incentives that customers are providing - helping poor people is expensive but making people feel self-righteous is cheap! Let's increase the amount of self-righteousness per unit of help to poor people!
I can't decide what is more depressing - the fact that Starbucks thinks their customers are this hollow and conceited, or that they're probably right.
Saturday, June 25, 2011
Casinos - A Moneymaking Machine!
One of the things I find interesting about casinos is how they expose people's odd ideas about what makes a good stock purchase.
In popular conception, the casino is the ultimate licence to print money. You can't fail! The house always wins! Suckers come in, spend money on gambling, suckers walk out, profit!
Because of this, so the reasoning goes, you should always want to own the casino. The best approximation is to own the casino's stock.
For some reason, people don't think this way about, say, the box factory. The reasoning, however, is just as (in)applicable. Wood pulp comes in, boxes get made, suckers come in, spend money on boxes, suckers walk out, profit!
The reality is that casinos are a business, just like any other. Sure, once you get people playing, the odds are in favour of the house. But if there's free entry into the casino market, there's going to be a lot of casinos cropping up to compete for gamblers. And to get them to come to you, you have to spend money - on subsidised hotel rooms and buffets, on lavish decoration, on complimentary drinks etc. All of these things cost money. And as long as you're making abnormal profits, new casinos are likely to keep entering until you're only making normal profits.
To give you a sense of this, let's compare some real casinos and box factorys. Let's start with the most basic measures of profitability. We'll compare a typical Casino (Las Vegas Sands corporation (LVS) with a typical box factory (International Paper (IP).
According to Yahoo, the box factory had a return on assets of 5.34%, and a return on equity of 16.38%. The Casino, by contrast, had a return of assets of 4.78%, and a return on equity of 13.55%.
Not exactly a slam dunk for the casino, is it?
But there's a bigger misconception here - most people don't make a distinction between a good company and a good stock. In the language of the common man, you're better off buying a crappy but underpriced company than a solid but overpriced company. Stock prices only react to news. If everyone already knows that Google is going to be an awesome company in the future, you'll have to pay extra for that fact now. And when it in fact becomes awesome, your stock price won't go up, because people had already taken that into account. The stock price will only go up if Google turns out to be an even better company than people thought.
In finance, one way to think about this idea is comparisons of price and asset value. Price-to-Book Value of Equity measures the ratio of the share price to the accounting value of equity. Price-to-Earnings measures the ratio of the share price to the previous year's earnings. Both of these capture a rough sense of how "cheap" or "expensive" the company is.* (I hope finance students will forgive my hand-waving here)
By this measure, our box factory has a price-to-book ratio of 1.73, and a price-to-earnings ratio of 10.94. The casino has a price-to-book ratio of 4.20, and a price-to-earnings ratio of 49.48. By both measures , the box factory is cheap and the casino is expensive.
According to no less an authority than Fama and French (1992) , this predicts that the box factory will also have higher stock returns in the future.
And this is in part due to the basic point at the start. Precisely because everyone thinks that casinos are a money-making machine, they bid up the stock price, making them a lousy purchase and forecasting low stock returns. And because the box factory isn't exciting to people, it has a lower price, making it a better purchase and forecasting high stock returns.
The moral of the story is that you should be wary of pop-culture perceptions of what makes a good stock purchase. And if you need a rule of thumb, boring is better.
*Fama and French claim that book-to-market could also be a measure of risk, and it might be. In my anecdotal experience, if there's someone other than Fama or French who deep-down truly believes this, I'm yet to meet them.
In popular conception, the casino is the ultimate licence to print money. You can't fail! The house always wins! Suckers come in, spend money on gambling, suckers walk out, profit!
Because of this, so the reasoning goes, you should always want to own the casino. The best approximation is to own the casino's stock.
For some reason, people don't think this way about, say, the box factory. The reasoning, however, is just as (in)applicable. Wood pulp comes in, boxes get made, suckers come in, spend money on boxes, suckers walk out, profit!
The reality is that casinos are a business, just like any other. Sure, once you get people playing, the odds are in favour of the house. But if there's free entry into the casino market, there's going to be a lot of casinos cropping up to compete for gamblers. And to get them to come to you, you have to spend money - on subsidised hotel rooms and buffets, on lavish decoration, on complimentary drinks etc. All of these things cost money. And as long as you're making abnormal profits, new casinos are likely to keep entering until you're only making normal profits.
To give you a sense of this, let's compare some real casinos and box factorys. Let's start with the most basic measures of profitability. We'll compare a typical Casino (Las Vegas Sands corporation (LVS) with a typical box factory (International Paper (IP).
According to Yahoo, the box factory had a return on assets of 5.34%, and a return on equity of 16.38%. The Casino, by contrast, had a return of assets of 4.78%, and a return on equity of 13.55%.
Not exactly a slam dunk for the casino, is it?
But there's a bigger misconception here - most people don't make a distinction between a good company and a good stock. In the language of the common man, you're better off buying a crappy but underpriced company than a solid but overpriced company. Stock prices only react to news. If everyone already knows that Google is going to be an awesome company in the future, you'll have to pay extra for that fact now. And when it in fact becomes awesome, your stock price won't go up, because people had already taken that into account. The stock price will only go up if Google turns out to be an even better company than people thought.
In finance, one way to think about this idea is comparisons of price and asset value. Price-to-Book Value of Equity measures the ratio of the share price to the accounting value of equity. Price-to-Earnings measures the ratio of the share price to the previous year's earnings. Both of these capture a rough sense of how "cheap" or "expensive" the company is.* (I hope finance students will forgive my hand-waving here)
By this measure, our box factory has a price-to-book ratio of 1.73, and a price-to-earnings ratio of 10.94. The casino has a price-to-book ratio of 4.20, and a price-to-earnings ratio of 49.48. By both measures , the box factory is cheap and the casino is expensive.
According to no less an authority than Fama and French (1992) , this predicts that the box factory will also have higher stock returns in the future.
And this is in part due to the basic point at the start. Precisely because everyone thinks that casinos are a money-making machine, they bid up the stock price, making them a lousy purchase and forecasting low stock returns. And because the box factory isn't exciting to people, it has a lower price, making it a better purchase and forecasting high stock returns.
The moral of the story is that you should be wary of pop-culture perceptions of what makes a good stock purchase. And if you need a rule of thumb, boring is better.
*Fama and French claim that book-to-market could also be a measure of risk, and it might be. In my anecdotal experience, if there's someone other than Fama or French who deep-down truly believes this, I'm yet to meet them.
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