The worm in the bud

John Quiggin62 Comments

I finally read Gillian Tett’s Fools Gold

, an account of the development of the derivatives industry centered on credit default swaps (CDS) and collateralised deposit obligation (CDOs) that collapsed so spectacularly last year. The discussion is excellent, but still, I think, too charitable to these instruments and their creators. Tett’s main source is the group at JP Morgan who pioneered many of these derivatives and, largely, got out before the crash. Their line, unsurprisingly, is that the problem was not with the concept as they developed, but its abuse by latecomers.

But a close reading of Tett’s account yields a different story. These innovations were defective from day one.

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Bookblogging & bookwiki

John Quiggin2 Comments

I’ve been moving slowly on the book for the last few weeks, but I have taken one positive step to encourage further discussion. In response to suggestions from readers, I’ve started a wiki site imaginatively named Zombiecon where my plan is to post draft chapters. The Efficient Markets Hypothesis is already up. In part, the idea is to provide a reference to avoid some of the problems that arise from blogging a section at a time. But, if someone wants to create one or more talk pages on the site itself, that would be great. I’m not really sure joint editing in the mode of Wikipedia, but if you have suggested minor changes, go ahead and make them – I may revert or partially adopt them. ????? ???? ? ????????? ????????

Some interesting quotes

John Quiggin119 Comments

Glenn Milne

Any other outcome than the endorsement of Dutton by the Gold Coast Liberals would render the party not worthy of a vote across the country.

(Dutton lost).

Tony Abbott

The argument [on climate change] is absolute crap. However, the politics of this are tough for us. Eighty per cent of people believe climate change is a real and present danger.”

Malcolm Turnbull

I am very committed to my service to the people of Wentworth and I’ve got no plans to leave,

(on this, see JK Galbraith)

Miranda Devine

the fact is that you can articulate a position on climate change that does not dispute man’s contribution without buying into a complicated ETS,

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Presentations in Adelaide

John Quiggin52 Comments

Despite strenuous efforts, it’s hard to avoid air travel in my line of work, and I’ve been doing more than usual lately. One strategy I use to reduce travel is to bundle multiple commitments into a single trip and I’ve done this reasonably effectively with my latest visit to Adelaide. I presented a paper at the Australian Conference of Economists, a public lecture for the Don Dunstan Foundation and an assessment of the economic outlook for the ACE Business Symposium as well as taking part in several meetings. (A couple of presentations are linked).

My presentations were mostly concerned with the financial crisis and its implications, but I also had meetings on water allocation in the Murray Darling Basin and on Internet access to public information and cultural assets such as image libraries. ???? ??????? 50 ???

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Oh noes! Teh Internets makez u gulible

John Quiggin48 Comments

Another “Internets makes you stupid story” from the Brisbane Courier-Mail (irony detector overload alert !!).

The original source is something called the Levitt Institute and the Courier-Mail story is a pretty fair summary of the Levitt Institute report, which is here (PDF). I’ll leave the deconstruction as an exercise for readers, with a bonus mark for the question “Which basic concept of classical hypothesis testing is ignored in this study of ‘ability to detect erroneous information'”

Update xxx ????? sex ????? ?? ??????? Sucked in! It turns out the whole thing is in fact a hoax by Andrew Denton’s new show.. Sad to say, with the irony detector already blown, it’s hard to tell the difference between genuine and fake stupid. ??????? ?????????

Text and writing

John Quiggin29 Comments

Tigtog at LP points to a study showing that involvement with Facebook, MSN and so on has increased the textual skills of young people, including not just “good writing” but the ability to adapt style to an imagined readership that varies in different context. I was banging on about this last millennium.

Tigtog finishes with a really last-millennium question? “Does anybody here still do lots of handwriting?”.

For those who don’t recall, “handwriting” was a method of producing text, popular in the second millennium, in which, rather than using a keyboard or pointer to produce letters, you used an ink-dispenser to draw each letter in succession. There was a version of this called “cursive” or “script” in which, rather than drawing the letters separately, they were all run together. This was much faster to produce, but, as I recall, almost impossible to read unless done by a real expert. I can still do a very inexpert version of the letter-by-letter method, which was called “printing” (nothing to do with real printing, but the result, done well, looked a bit like printed text).