Tuesday, April 22, 2008

Peja Face

I'm watching the NO-Dallas playoffs game right now and I managed to catch some spectacular: someone in the Hornets organization is paid to run around with a huge blow-up picture of Peja Stojakovic's face. It's not surprise though, the man is incredibly dreamy and I'm sure the women of New Orleans love seeing his Eastern European mug every night.

Of course, why would Peja ever stray form this?

That's right, this entire post was an excuse to post pictures of a hot NBA wife. And did you know: Adriana Lima is going out with backup point guard Marko Jaric of the Minnesota Timberwolves. If only I was an Eastern European basketball player

Monday, April 21, 2008

History Rhymes

Here's a summary http://www.voxeu.org/index.php?q=node/1067 and here's the full 120 page beast: http://www.economics.harvard.edu/faculty/rogoff/files/This_Time_Is_Different.pdf

These guys look through almost 800 years of data, tracking default episodes and periods of financial crises. The stylized facts they've found are pretty eye-opening and really put the period that we're in right now into context.

Two especially important results:
"Serial default on external debt—that is, repeated sovereign default—is the norm throughout nearly every region in the world, including Asia and Europe.


Another regularity found in the literature on modern financial crises is that countries experiencing large capital inflows are at high risk of having a debt crisis. Default is likely to be accompanied by a currency crash and a spurt of inflation. The evidence here suggests the same to be true over a much broader sweep of history, with surges in capital inflows often preceding external debt crises at the country, regional, and global level since 1800, if not before."

"Also consonant with the modern theory of crises is the striking correlation between freer capital mobility and the incidence of banking crises, as shown in Figure 2. Periods of high international capital mobility have repeatedly produced international banking crises, not only famously as they did in the 1990s, but historically."

These two quotes offer an interesting look at the US's current situation: namely, are we going to enter a period of international debt defaults? Further, it offers an interesting look at globalization. It's interesting to think about this in terms of the LTCM collapse. Sure they help geographically diverse assets that should be uncorrelated, except as financial barriers fall, increasingly many disparate assets are held by the same people, thus when things go to hell, there's still going to be correlation as those holders are forced to liquidate their assets. It seems this provides historical evidence for that idea: perhaps as capital mobility rises,the concept of diversification goes hay-wire because there's this latent correlation between assets.


Monday, April 14, 2008

Help Me to Help You

Make more money by giving me money to buy steroids


According to new research from the University of Cambridge, a male trader's daily testosterone level is higher on days when he makes more than he would in an average day. What's more, the higher a trader's morning testosterone level, the more money he'll likely have netted before the close of business that day. Testosterone, in other words, can be good for business.

Tuesday, April 8, 2008

Credit Crisis My Ass

With all the attention lately on the credit markets, it's nice to take a step back and look at the commodities market. Two articles from Bloomberg highlight the run up in food prices:



It's interesting thinking about the implications, namely that this is something going on in the financial markets that will affect the poorest of people even more than the rich.

Monday, April 7, 2008

Hate Thy Neighbor

What's the most racist country in the Western industrialized world?

According to this study, Northern Ireland, although Greece is a close second with Italy rounding out the top 3.

Not surprising that the top two countries have been party to religious/ethnic violence.

Sex and Risk


A new brain-scan study may help explain what's going on in the minds of financial titans when they take risky monetary gambles _ sex. When young men were shown erotic pictures, they were more likely to make a larger financial gamble than if they were shown a picture of something scary, such a snake, or something neutral, such as a stapler, university researchers reported.
This is a really cool study that's actually pretty intuitive. Why else do casino's have attractive servers walking around? And what about CNBC and Fox Business News? If Erin Burnett was naked, would markets fluctuate wildly?

Sunday, April 6, 2008

Sherron Collins

Posted without any presumption of truthfulness:

Someone from my dorm last year had a class with Sherron Collins and a few other basketball players (Darrell Arthur, Brady Morningstar, maybe someone else) and they always sit next to each other and cheat on tests and such.

Sherron enters class on a test day and immediately goes and sits right next to the other players, and of course you're supposed to have a seat between you and the closest person. The teacher tells Sherron to sit in the front of the class, where there are five or six completely empty rows. Sherron doesn't even look up and just yells 'AIN'T NO SEATS' and proceeds to continue in his studious ways and miraculously gets an A on the test while sitting next to the basketball players
This becomes a catchphrase on my floor of the dorm last year and we named our basketball ticket camping group after it.

Another story is Sherron was sleeping around with girls on the floor above me last year (he already has had two kids and supposedly has a girlfriend he's serious with). The people who were in the next room over from the one Sherron was in hear the girl let out a high pitched scream and then yell "NOT IN THE BUTT, SHERRON!"

Saturday, April 5, 2008

BSG is back

Last night, after a year long hiatus, Battlestar Galactica finally came back. In honor of the last season of the best show on TV right now (unfortunately The Wire is done), I give you a list of reasons to watch.

-Edward James Olmos: Whether as the creepy police officer that knew Deckard was a replicant in Blade Runner or as an inner-city calculus teacher in Stand and Deliver, Edward James Olmos has always been the man. Plus he's one-fourth Hungarian and married to a woman 30 years younger than him. He's amazing in his role as the commander of Battlestar Galactica and if in the future humanity ever engages in a brutal war against our former robotic slaves, I'd want Edward James Olmos leading us to glory.

-Timely social commentary: Thought that television was going to provide respite from constant news about Iraq, Abu Ghraib, or a populace on edge about terrorists from within? Well too bad. Battlestar Galactica does a great job of having our heroes be both insurgents and the authority. You'll have to watch to see what I mean.

-It's entertaining and is an interesting story.

Thursday, April 3, 2008


Saw 21 tonight and it was a very enjoyable movie. Gotta love the nerd name-dropping, for example: the Monty Hall problem, Jedi mind tricks, self-aware robotics, Cauchy, Newton, and of course Kate Bosworth. If you enjoyed Ocean's 11 but thought that instead Danny Ocean should've been a much bigger asshole, you'll like 21. Definitely makes Vegas a lot more appealing, especially the FOXX club, which sadly, according to a quick Google search, does not exist.

Plus, I also learned that the original MIT Blackjack team was mostly Asian, which gives me hope that one day I too can have Laurence Fishburne kick my ass. Speaking of whom, it's a real mindfuck seeing him in Apocalypse Now.

And now for some good news:

AT LAST, one of the world's worst rulers may be on his way out. As The Economist went to press, Robert Mugabe was hanging on by his fingertips.

Wednesday, April 2, 2008

Poor people are different

As an econ student, it's interesting when an idea puts everything you know into contention. For example:

In the community of people dedicated to analyzing poverty, one of the sharpest debates is over why some poor people act in ways that ensure their continued indigence. Compared with the middle class or the wealthy, the poor are disproportionately likely to drop out of school, to have children while in their teens, to abuse drugs, to commit crimes, to not save when extra money comes their way, to not work.

To an economist, this is irrational behavior. It might make sense for a wealthy person to quit his job, or to eschew education or develop a costly drug habit. But a poor person, having little money, would seem to have the strongest incentive to subscribe to the Puritan work ethic, since each dollar earned would be worth more to him than to someone higher on the income scale. Social conservatives have tended to argue that poor people lack the smarts or willpower to make the right choices. Social liberals have countered by blaming racial prejudice and the crippling conditions of the ghetto for denying the poor any choice in their fate. Neoconservatives have argued that antipoverty programs themselves are to blame for essentially bribing people to stay poor.

Karelis, a professor at George Washington University, has a simpler but far more radical argument to make: traditional economics just doesn't apply to the poor. When we're poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated. This is where the bee stings come in: A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems.

Poverty and wealth, by this logic, don't just fall along a continuum the way hot and cold or short and tall do. They are instead fundamentally different experiences, each working on the human psyche in its own way. At some point between the two, people stop thinking in terms of goods and start thinking in terms of problems, and that shift has enormous consequences. Perhaps because economists, by and large, are well-off, he suggests, they've failed to see the shift at all.
Still, there's little to no data to support his assertions, but fundamentally to call into question the law of marginal utility is an interesting view. There's untold of cases of poor people working hard, so it's hard to take his view at face value.

Tuesday, April 1, 2008

Other potential names

Also thought about naming this blog after the aleph numbers, or numbers that represent the number of elements of an infinite set. Aleph-zero is the cardinality of the natural numbers, that is, how many elements are in the set of natural numbers (integers, fractions,algebraic numbers). So aleph-zero is the smallest possible infinite number ... which is kinda mindblowing that there's multiple infinite numbers.

What up

Every makes one at some point, right?

For my first post, I'll just straight into the geekiness: Battlestar Galactica is coming back this Friday. I am quivering in anticipation. If you haven't checked out the show yet, give it a chance, it's the best show currently on television and there's only one season left.

For anyone who has forgotten season 3:

Last two minutes of the second video are pretty much the best trailer for ths show.