Archive for June, 2011

NATE SILVER: More Libertarians out there

June 21, 2011

CHANGE: Poll Finds a Shift Toward More Libertarian Views. “Libertarianism has been touted as the wave of America’s political future for many years, generally with more enthusiasm than evidence. But there are some tangible signs that Americans’ attitudes are in fact moving in that direction.” Well, as the political class gets more obviously inept, people’s faith in them is bound to gradually dry up.

When Nate Silver admits to something he doesn’t like, there’s a good chance it’s true.

Journalists vs. Robert Henlein on “Bad Economic Luck”

June 4, 2011

Journalists have been using the word ““unexpected”” to describe the bad economic news and the Washington Post all but calls it bad luck.

Here’s what Robert A. Heinlein felt about bad economic luck:

“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded- here and there, now and then- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.This is known as ‘bad luck.’.”

Yale Professor Stephen L. Carter agrees:

The man in the aisle seat is trying to tell me why he refuses to hire anybody. His business is successful, he says, as the 737 cruises smoothly eastward. Demand for his product is up. But he still won’t hire.

“Why not?”

“Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”

He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost.

The Suprising Frequency of Economics “Unthinkables”

June 4, 2011

Megan McArdle:

“I’ve only been writing about finance for seven years, and I’ve already watched a bunch of ‘unthinkable’ and ‘impossible’ actions, from Argentina’s devaluation and serial defaults, to my own government nationalizing GM. The unthinkable gets thunk surprisingly often.”

TODO: Dig up Rajan’s quote on 1,000 year events becoming 10 year events. Also, tail risk event frequencies.

The Atlantic, What a Greek Default Looks Like, Jun 3 2011, 9:19 AM ET

China Dumps US-Treasury Bills

June 4, 2011

“China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury. . . . China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.”

China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills, Friday, June 03, 2011, Terence P. Jeffrey