Afterward, we drove out Orange Plank Road, east of Grant’s path as he marched toward Richmond; we turned onto Route 3, and after a few miles saw an assortment of big-box stores blooming out of the horizon. We grumbled some about the spoilage of development—and then stopped at Cracker Barrel for breakfast.
This is from Ta-Nehishi Coates.
Wednesday, March 31, 2010
Tuesday, March 30, 2010
Bureaucrat-speak
Giovannini describes today’s next step as developing “a framework that at least lists the domains that outline what this project should look like.”
This is from Megan McArdle on how a measure of well-being besides GDP is being constructed - or at least according to the article it is being studied on how to plan to construct a measure using various bullet points that highlight what needs to be discussed.
Update: Lant Pritchett (HT: Chris Blattman) says the Human Development Index is a victim of its own success:
The Human Development Index (HDI) has been a politically and rhetorically powerful counter-point to measures of “development” that focus exclusively on economic indicators, such as Gross Domestic Product per capita or household consumption expenditures. However, the relevance of the HDI is increasingly challenged by success.
For instance, by pitching the education component of the HDI at a very low level (literacy and gross enrollment) which has an upper bound, as more and more countries attain near 100 percent literacy and 100 percent gross enrollment of the young the education component ceases to contribute to progress in the HDI.
For countries above the low educational thresholds this implies that more progress in education (e.g. expanding tertiary enrollment, improving quality of learning outcomes in primary school) does not raise the HDI while increases in GDP per capita do raise the HDI.
As Megan McArdle points out, the weights in the HDI are somewhat arbitrary. Perhaps a reweighting of the index is needed.
This is from Megan McArdle on how a measure of well-being besides GDP is being constructed - or at least according to the article it is being studied on how to plan to construct a measure using various bullet points that highlight what needs to be discussed.
Update: Lant Pritchett (HT: Chris Blattman) says the Human Development Index is a victim of its own success:
The Human Development Index (HDI) has been a politically and rhetorically powerful counter-point to measures of “development” that focus exclusively on economic indicators, such as Gross Domestic Product per capita or household consumption expenditures. However, the relevance of the HDI is increasingly challenged by success.
For instance, by pitching the education component of the HDI at a very low level (literacy and gross enrollment) which has an upper bound, as more and more countries attain near 100 percent literacy and 100 percent gross enrollment of the young the education component ceases to contribute to progress in the HDI.
For countries above the low educational thresholds this implies that more progress in education (e.g. expanding tertiary enrollment, improving quality of learning outcomes in primary school) does not raise the HDI while increases in GDP per capita do raise the HDI.
As Megan McArdle points out, the weights in the HDI are somewhat arbitrary. Perhaps a reweighting of the index is needed.
Congress debates relativity
As in The Theory of.
After three weeks of lectures and receptions in New York, Einstein paid a visit to Washington. For reasons fathomable only to those who live in that city, the Senate decided to debate the theory of relativity. On the House side of the Capitol, Representative J. J. Kindred of New York proposed placing an explanation of Einstein’s theories in the Congressional Record. David Walsh of Massachusetts rose to object. Did Kindred understand the theory? “I have been earnestly busy with this theory for three weeks,” Kindred replied, “and am beginning to see some light.” But what relevance, he was asked, did it have to the business of Congress? “It may bear upon the legislation of the future as to general relations with the cosmos.”
From here?.
After three weeks of lectures and receptions in New York, Einstein paid a visit to Washington. For reasons fathomable only to those who live in that city, the Senate decided to debate the theory of relativity. On the House side of the Capitol, Representative J. J. Kindred of New York proposed placing an explanation of Einstein’s theories in the Congressional Record. David Walsh of Massachusetts rose to object. Did Kindred understand the theory? “I have been earnestly busy with this theory for three weeks,” Kindred replied, “and am beginning to see some light.” But what relevance, he was asked, did it have to the business of Congress? “It may bear upon the legislation of the future as to general relations with the cosmos.”
From here?.
Regulating leverage
Does regulating leverage have a future even when value investors believe its the only way to make a decent return?
Value investors love to deride academics and the efficient-market hypothesis, but they can’t deny that stock-screening tools and other analytics have taken away many of the best bargains. At least some managers have lost the will to wait patiently for superdeals and have taken on more risk to get more return. As we walked to dinner through the soft Omaha twilight, a fund manager I had encountered at a “meet and greet” suddenly said, “The only way to make money these days is leverage.”
We had been discussing Mohnish Pabrai, a famous value-fund manager and author, whose portfolio had reportedly declined severely in 2008. Pabrai’s apparent willingness to invest in leveraged situations where a major loss is possible has caused some to argue that he isn’t really a value investor. But here was another Buffett follower essentially defending leveraged investing, because only leverage generates the kind of returns we’ve all come to expect. Investing in a highly leveraged company, or in a bunch of them, exposes you to many of the same risks as taking on leverage yourself. And my dinner companion seemed to be saying that value managers couldn’t compete with other funds without taking at least some of those bets.
This is a controversial position. Yet arguably, even Warren Buffett himself profits from substantial financial leverage. Like banking, insurance is in some sense a leveraged bet. Companies take on large deferred liabilities, in the form of future claims or account withdrawals, in exchange for payment now. They make their money by investing most of the proceeds from the deposits or premiums and keeping a moderate cash reserve, relying on the pooling of many accounts to ensure that at any one time, the demands on their assets will be smaller than the reserves set aside to cover them. Like banks, insurance companies are therefore vulnerable to a sudden mismatch between claims and underlying assets.
Value investors love to deride academics and the efficient-market hypothesis, but they can’t deny that stock-screening tools and other analytics have taken away many of the best bargains. At least some managers have lost the will to wait patiently for superdeals and have taken on more risk to get more return. As we walked to dinner through the soft Omaha twilight, a fund manager I had encountered at a “meet and greet” suddenly said, “The only way to make money these days is leverage.”
We had been discussing Mohnish Pabrai, a famous value-fund manager and author, whose portfolio had reportedly declined severely in 2008. Pabrai’s apparent willingness to invest in leveraged situations where a major loss is possible has caused some to argue that he isn’t really a value investor. But here was another Buffett follower essentially defending leveraged investing, because only leverage generates the kind of returns we’ve all come to expect. Investing in a highly leveraged company, or in a bunch of them, exposes you to many of the same risks as taking on leverage yourself. And my dinner companion seemed to be saying that value managers couldn’t compete with other funds without taking at least some of those bets.
This is a controversial position. Yet arguably, even Warren Buffett himself profits from substantial financial leverage. Like banking, insurance is in some sense a leveraged bet. Companies take on large deferred liabilities, in the form of future claims or account withdrawals, in exchange for payment now. They make their money by investing most of the proceeds from the deposits or premiums and keeping a moderate cash reserve, relying on the pooling of many accounts to ensure that at any one time, the demands on their assets will be smaller than the reserves set aside to cover them. Like banks, insurance companies are therefore vulnerable to a sudden mismatch between claims and underlying assets.
Sea level rise and investment
First there's this from LA Times:
An island midway between India and Bangladesh that became a catalyst for military threats in the 1980s is now submerged under the rising sea.The Bay of Bengal island, which India called New Moore Island and Bangladesh referred to as South Talpatti, has ceased to exist, the Jadavpur University's School of Oceanic Studies declared this week.
Some also think that the Maldives will also be a victime of sea level rise in the future. So what does it mean when I read the following:
The just-opened Shangri-La Villingili in the Maldives, with overwater bungalows (my dream accommodation), postcard-perfect powder white sand, and crystal-clear water. There's also a spa with a yoga pavilion overlooking the Indian Ocean--yoga with a view is, naturally, more conducive to a deep meditational state. I also like the idea of the 11-mile bike path that leads across five islands past villages and lush jungle.
In fact, several resorts are either in the pipeline or are already opened.
Suppose an investor commits $100 million to a new resort with an annual operating cost of $1 million per year. What does this imply about:
1. Expectation of sea-level rise (in terms of years in the future that it will happen)
2. Discount rate assuming that sea-level rise is imminent in 10 years?
An island midway between India and Bangladesh that became a catalyst for military threats in the 1980s is now submerged under the rising sea.The Bay of Bengal island, which India called New Moore Island and Bangladesh referred to as South Talpatti, has ceased to exist, the Jadavpur University's School of Oceanic Studies declared this week.
Some also think that the Maldives will also be a victime of sea level rise in the future. So what does it mean when I read the following:
The just-opened Shangri-La Villingili in the Maldives, with overwater bungalows (my dream accommodation), postcard-perfect powder white sand, and crystal-clear water. There's also a spa with a yoga pavilion overlooking the Indian Ocean--yoga with a view is, naturally, more conducive to a deep meditational state. I also like the idea of the 11-mile bike path that leads across five islands past villages and lush jungle.
In fact, several resorts are either in the pipeline or are already opened.
Suppose an investor commits $100 million to a new resort with an annual operating cost of $1 million per year. What does this imply about:
1. Expectation of sea-level rise (in terms of years in the future that it will happen)
2. Discount rate assuming that sea-level rise is imminent in 10 years?
Is Brad Pitt a public good
This thought occurred to me when I read about his Make It Right foundation which is trying to rebuild New Orleans (emphasis mine):
Green high-design utopianism is virulent at Make It Right, as at Global Green, and all the houses feature sophisticated systems to achieve net-zero energy use. At an open house last year, a Make It Right organizer insisted that I go down and watch the electric meter running backward as solar energy coursed back into the grid. I stood around with a few others, murmuring appreciatively, as if witnessing a high-tech voodoo ceremony.
New residents undergo training on the operation of their homes, and receive a thick technical notebook and a smaller user’s manual. They also get a dedicated phone number to call with problems; at the other end, a staffer will troubleshoot or send out a technician. I suggested to Tom Darden, the project’s executive director, that this didn’t seem to have much in the way of real-world application. But he shrugged and said it was part of the plan. Make It Right’s mission includes testing new approaches and discarding those that fail, a luxury few for-profit developers can afford.
For-profit developers under the pressure of competition does not engage in R&D to make a better product? Hmm...
Green high-design utopianism is virulent at Make It Right, as at Global Green, and all the houses feature sophisticated systems to achieve net-zero energy use. At an open house last year, a Make It Right organizer insisted that I go down and watch the electric meter running backward as solar energy coursed back into the grid. I stood around with a few others, murmuring appreciatively, as if witnessing a high-tech voodoo ceremony.
New residents undergo training on the operation of their homes, and receive a thick technical notebook and a smaller user’s manual. They also get a dedicated phone number to call with problems; at the other end, a staffer will troubleshoot or send out a technician. I suggested to Tom Darden, the project’s executive director, that this didn’t seem to have much in the way of real-world application. But he shrugged and said it was part of the plan. Make It Right’s mission includes testing new approaches and discarding those that fail, a luxury few for-profit developers can afford.
For-profit developers under the pressure of competition does not engage in R&D to make a better product? Hmm...
Lice
Was sympathetic when I read of HCW's experience in a blog post of the same title. We had this problem twice (though not in the past 2 or 3 years, thankfully!). The first time, we literally went all out with the lice shampoo (which we still have some and I really should get around to throwing it out), daily vacuuming, washing and putting away all brushes and toys. The second time, we just did the nit picking with the metal comb which after the first experience we decided was what worked best.
After all, if the lice and nits are so hard to come off the hair how can they stick so easily to pillows and sheets. I'd seriously like to see a randomized control trial of how effective daily washing and vacuuming plus nit-picking is compared to just nit-picking. From our experience, all the other activities were just time consuming, stressful and pretty much useless.
After all, if the lice and nits are so hard to come off the hair how can they stick so easily to pillows and sheets. I'd seriously like to see a randomized control trial of how effective daily washing and vacuuming plus nit-picking is compared to just nit-picking. From our experience, all the other activities were just time consuming, stressful and pretty much useless.
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