As usual, I can’t find much new to say in response to the latest terror attack, this time in London. Our thoughts will be with those killed and injured, and their families and friends.
Crowds and market caps (crossposted at CT)
I happened to reread a passage from James Surowiecki’s “The Wisdom of Crowds in which he discusses the stock market’s reaction to the Challenger disaster, the crucial point being
Did you know that within minutes of the January 28, 1986 space shuttle, Challenger, disaster, investors started dumping the stocks of four major contractors, Rockwell International, Lockheed, Martin Marietta, and Morton Thiokol, who had participated in its launch? Morton Thiokol’s stock was hit hardest of all … the market was right. Six months after the explosion, the Presidential Commission on the Challenger revealed that the O-ring seals on the booster rockets made by Thiokol became less resilient in the cold weather, creating gaps that allowed the gases to leak out.”
It struck me reading this, that I’d heard of Rockwell, Lockheed and MM in many contexts, but I’d never heard of Morton Thiokol. It turns out that they are a specialist builder of booster rockets and similar items (they’re now a division of ATK).
This seems to suggest a prosaic explanation of the market reaction. Whatever the cause, the space shuttle program was going to be shut for a long time. This would do a bit of damage to everyone involved, but much more to the rocket specialist Thiokol than to the other three big diversified companies.
The ATK website indicates that they still have plenty of shuttle contracts, so it seems as if the faulty O-rings didn’t do them much long-term damage over and above the effect on the shuttle program.
I haven’t got the full book or the study cited there, so it may be that this explanation has already been ruled out in some way, but I thought the easiest way to find it was to post and see what response I got.
Urgent WordPress upgrade
Nicholas Gruen kindly alerted me to a security hole affecting all WordPress blogs, and Tim Lambert’s post reminds me that I should spread the word about the need to upgrade to version 1.5.1.3. My experience and Flute’s commenting at Tim’s is that it’s a very simple job (10 minutes or so) and if you’re starting at 1.5 there should be some additional stability benefits
Anonymous comment in peril ?
I’ve just come back from an appearance before the Parliamentary Electoral Matters Committee Inquiry into the Conduct of the 2004 Federal Election and Matters
Related Thereto, where I presented a submission arguing that blogs, and commenters, should not be required to identify themselves when commenting during an election campaign. It was a pretty vigorous session, and some members of the Committee were clearly not convinced. So I wouldn’t be surprised to see an attempt to restrict anonymous Internet comment coming out of the Committee’s report.
My immediate analysis is that, if anonymous comments were prohibited, the only way to be safe would be to close down comments during election campaigns. Even if people gave full names and addresses, I don’t have the resources to verify them.
Anyway, it would be good to hear other views: I’ll need to think more about my own views.
My submission (PDF file) is over the fold
Read More »
Elasticity and progress
The question of whether technological progress is slowing down has been around for a fair while, and is up for discussion again (hat-tip Jack Strocch(. In many sectors of the economy, notably transport, the answer is very clearly “Yes”.
On the other hand, Moore’s Law (speed doubling every 18 months) still seems to hold for computer chips and they are playing an increasingly important role in the economy. So although progress in most areas is slower than the historical average, progress in this central area is faster.
In the end, it all comes down to the long-run price elasticity of demand for computation. If this is less than one, total revenue from the sale of computational services will eventually decline relative to national income, and the ultimate situation will be one where computation is effectively free, but no longer an important source of progress. If the elasticity is greater than one, the computation-based share of GDP will rise over time, as previously separate sectors like music, video and so on are computerised.
My reading of the evidence is that the value so far is very close to one, which accounts for some of the ambiguity surrounding this question
Squaring the circle (crossposted at CT)
Reading John and Belle’s blog, not the place I would usually look for unfamiliar maths results, I discovered that the circle can be squared in Gauss-Bolyai-Lobachevsky space . Checking a bit further, I found this was not a new result but was shown by Bolyai back in C19.
I haven’t found a link that shows how the construction was achieved, though. Can someone point me in the right direction, please?
A blog without comments is like …
… a club with one member.
The winner of the impromptu contest is my old friend Jim Birch. People naturally tried for a risqué analogy and that would have been my first thought, but none of them quite worked. Jim’s entry is simple but hits the nail on the head, I think.
Assume we have a can-opener
A lot of my work at the moment is bound up with a model of the Murray-Darling River system. As all students of economic methodology know, such models involve more or less unrealistic assumptions designed to allow us to calculate some results while maintaining some connection with reality. One tricky issue in the model, and in reality, is what to do about demand for water for residential use in Adelaide. A member of my research team (who shall remain nameless) has proposed a drastic simplifying assumption, with a very pleasing implication
Here are the model results excluding Adelaide.
I have assumed that Adelaide doesn’t exist.
Therefore the Lions actually won 4 straight.
if only!
Monday message board
As usual on Monday, you are invited to post your thoughts on any topic. Civilised discussion and no coarse language, please.
Withholding witnesses
This NYT report on the Italian case in which a number of CIA agents have been indicted for kidnapping a cleric suspected of involvement in terrorism has one item of particular relevance to Australia.
In addition to their objections to the American rendition policy [sending suspects overseas for torture], European counterterrorism officials also partly blame a lack of access to terrorism suspects and information held by the United States for their failure to convict a number of their own high-profile terrorism suspects.
The acquittal on most serious charges of Abu Bashir, spiritual leader of the Indonesian terrorists responsible for the Bali bombing was due primarily to the fact that the operational chief Hambali was not a witness, since the US Administration which holds him would not hand him over, even temporarily.
The Hambali case completely undermines for the official rationale for the US policy of rendition. In theory, the claim is that terrorists suspects, wanted in their own countries, are transferred there. But here’s a case of a leading Indonesian terrorist, wanted by Indonesia for crimes committed in Indonesia, and the US Administration won’t hand him over.
The demands of justice in relation to the Australian victims of the Bali bombing were similarly ignored.
It seems likely that Bashir will be released soon, and the operation of the rendition policy is largely to blame for this travesty of justice.
John Quiggin 