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  1. "Rampant" is probably not correct. on Anonymous Anger Rampant On the Web · · Score: 2, Informative

    Unless people are posting at standing desks using some kind of gestural input, I doubt that much Internet rage takes place rampant.

    It's much more likely that most Internet rage takes place sejant erect .

  2. Re:Positive thing on Anonymous Anger Rampant On the Web · · Score: 5, Interesting

    I'd rather have someone rant about something online than go out and live out the murder they wished upon someone.

    Why in the world would you think that these are mutually exclusive alternatives?

    The "steam boiler" model of pop psychology has long been proven to be incorrect. Acting and speaking do not relieve pressure -- or at least very much pressure. Instead human emotions tend to follow feedback loops. Acting and speaking angrily lead to thinking angrily, which lead to further angry actions and speech.

    The word used by psychologists for this feedback phenomenon is "refractory". Anger is a refractory state precisely because angry thoughts and actions lead to further angry thoughts and actions. It is not relief that puts an end to it, it's fatigue.

    Look around at people who act or speak out their anger and those who try to moderate their anger. Who stays angry the longest? The next time you get angry, try to master that anger by thinking objective thoughts. Do you stay angry longer or less long?

  3. I'm against anonymous anger. on Anonymous Anger Rampant On the Web · · Score: 4, Funny

    It distracts from pseudonymous anger, and that makes me mad.

  4. Re:McCain... on Discuss the US Presidential Election & Education · · Score: 3, Insightful

    Well, in the only comprehensive, nation wide assesment of student achievement (not just self-selected college bound seniors), Massachusetts ranks #1 in both verbal and math.

    We rank in the top 10 for both teacher student ratio, as well as in teacher wages adjusted for local cost of living. So it is true that we throw money at the problem.

    The difference in the percentage of kids who are proficient on state standards vs. proficient according to the National Assessment of Educational Progress testing is a measure of how "tough" a standard is. Massachusetts has the lowest gap, only 5%. The next smallest gap is California, at 27%. So we also throw standards against the problem.

    The way I see it is that we treat education as important enough to spend money on, but also important enough to pay very close attention to what happens after that money is spent. As a result, we get the best results in the country. The teachers' unions aren't completely on board with every aspect of this, nor should they be. No program is perfect. But teaching is an honored and well compensated profession in my state, and it's probably not coincidental that teachers are not a significant barrier to progress here.

    Maybe not every state is willing to spend the money and effort on this that we do. Maybe there are other ways to get results. But I doubt looking for scapegoats helps as much as rolling up your sleeves and working on the problem.

  5. Re:Looking from afar... on Discuss the US Presidential Election & Education · · Score: 1

    Well, I'm not sure you can make such a distinction. The kind of literacy that is demanded by college level work emphasizes critical reasoning. And while theoretically you could teach students how to perform mathematical operations by rote algorithm, the students who retain the most and who are the best prepared know how to reason mathematically.

  6. Re:McCain... on Discuss the US Presidential Election & Education · · Score: 1

    MAYBE Obama will get rid of NCLB, but I don't see him getting away from the typical left position of supporting the teachers' unions goals and just throwing money at education without real standards.

    I live in Massachusetts, a union friendly blue state last time I checked. Massachusetts established tough, standards based education reform in 1993, nine years before No Child Left Behind. How tough? Well, my kids had homework in kindergarten. My third grader has over ninety minutes of homework every night. Pre-schools have math and science curricula to prepare toddlers for the rigors of kindergarten. When I entered first grade, I was unusual in that I could already read. Now it's expected, kids now enter first grade with most of the skills they used to leave it with.

    And the standards aren't tough because they are high. Any idiot can make a tough standard, just calibrate the test scores so a lot of students fail. What is difficult is to test more than mechanical recall and rote performance of algorithms. In math, for example, there is a tremendous emphasis on practical reasoning. There's plenty of drill still, but word problems are prominent as early as the first grade (since students are supposed to be able to read pretty well by mid year).

    So your theory that union friendly liberals stand in the way of establishing standards doesn't hold. It's more likely that in places where education reform is framed as sticking it to the teachers that teachers fight standards most strongly. I wonder why?

    NCLB reminds me of the Neil Gaiman/Terry Pratchett noel "Good Omens", in which the demon Crowley remarks that while Hell is all for disobedience in general it is against it in specific cases (e.g. disobedience to the commands of Hell).

    Republicans are for "standards", so long as those standards don't have content. No mandating specific nationwide goals for math, history or God forbid (literally), biology.

    When NCLB was passed, it mandated that states (remember States' rights?) create standards, and then improve their score on standards. This is incredibly easy for states that don't value education. It's like asking each individual student to establish his own grading scale. All they have to do is set really easy standards, then meet them. It's the states that had already been serious about education reform that had it tough under NCLB. In fact, NCLB "standards" made things worse in many places which already had tough standards; there's such a thing as too much of a good thing.

    I live in a town with a high school that has accreditation problems. The reason isn't because the school is a bad one. It's cumulative ranking puts in in the top 20% of schools in the state. The problem is that the law requires schools to improve, and the plan for the school was ambitious. Therefore, a school at the 80th percentile could be considered "failing" while one at the 20th could be considered "passing".

  7. Re:Looking from afar... on Discuss the US Presidential Election & Education · · Score: 1

    You don't have to agree with somebody on everything to vote for him. It's pretty clear that Obama will "lose" the "evangelical vote", but evangelicals don't have any seats in the Electoral College. States do. Obama is going to win a lot more evangelicals than John Kerry, and that might tip the balance in some battleground states.

    The economy is, of course, is a big factor in this. But I think style counts for a lot too. Obama talks about his religion in a personal way, which is something evangelicals can relate to. It doesn't matter if this evokes a violent reaction among those who were never going to vote for him anyway, so long as it moves some into the persuadable category, which is the best a Democrat can hope to do by talking about religion to evangelicals.

    Presidential victories are built on persuading a small number of voters in tight races.

  8. Re:Global warming and not disease huh? on 1/3 of Amphibians Dying Out · · Score: 1

    It doesn't work like you think it does.

    The effect on climate change isn't like a bullet in the head to an animal. No animal dies of "climate change".

    It's more like repeated, low grade starvation. It makes the animal vulnerable to diseases, and ecologically diseases respond to vulnerable populations by becoming more virulent -- that's well established. Think 1918 flu -- all those weak, stressed, soldier huddled in trenches favors aggressive pathogen mutations.

    Climate change stresses populations, it also disrupts the boundaries of ecosystems, causing pathogens like West Nile or Ebola to spill out of their isolated reservoirs. It also increases the viable range of pathogens and disease vectors like the Anopheles mosquito.

    If you follow science news very much, one thing that is striking is the number of instances of emergent diseases over the last decade. For example, here in the Northeast, bat populations are dying off due to a new fungal disease, which will alter mosquito populations and possibly increase the number of mosquito transmitted diseases.

    Now, the Northeast is not going to become uninhabitable by any means. There are places in the world where fatal or crippling parasitic diseases are a daily concern, it's just that we're not accustomed to that sort of thing. It's just that we assume that we can take an important species like a key predator out of the picture and nothing particularly important will happen as a result. Emerging diseases are going to become a larger and larger concern, as this century progresses. Oh, its not going to be the end of humanity by any means. It's just going to be a premature end to a lot of individual lives; the loss of jobs based on ecological wealth; a diminution of those aspects of quality of life that depend on a diverse and benign environment.

    It's simplistic to lay this kind of thing at the feet of global warming. What's going on is habitat disruption on a large scale, consisting of many different factors. However: global warming is a trend that is reducing the margin of viability for many organisms, which means we'll see huge spikes in some organisms (weedy species, almost certainly quite a few pathogens and pathogen transmitters) and drops in others.

    The critical environmental news here isn't the loss of species, although that is important. The big news, of which species loss is a harbinger, is the shifting and breaking down of habitats.

  9. Re:Correlation does not imply causation... on 1/3 of Amphibians Dying Out · · Score: 1

    But correlation is necessary to validate findings of causation.

    The findings are there, they're just published in places that don't make the six O'Clock news. When some nuts (er... like me) go out on a number of spring nights to try to catch the annual salamander spawning, and don't see it, or see only a handful of animals instead of hundreds of thousands that used to come to a particular pond, it isn't news. When a local ecologist studing a handful of sites amounting to a hundred or so acres publishes a paper saying that weather in the last three decades as become statistically unfavorable to the populations that once inhabited those sites, it is not a global story. It's also not going to get picked up even in the local papers, although it ought to be.

    The findings are there. It's "correlation" onl because now people are putting those stories into a global picture.

  10. Re:Bullshit! on 1/3 of Amphibians Dying Out · · Score: 2, Insightful

    Well, that's a classic example of missing the point.

    What is a species after all? Depending on how you define it you can manipulate the numbers. A species by itself isn't very important.

    What is going on is a loss of genetic information in the natural world. Does it matter? Depends on your timeframe. Over the long term, of course it doesn't matter, where the long term is on the million year scale. Over the short term, say the next thousand years, it will matter a great deal.

    Why does diversity matter?

    You don't get an efficient, flexible ecosystem by stocking it with aggressive, weedy species. Even if the individual species is flexible, the system becomes less flexible. The net genetic information in a place represents the ability of the system to adapt. I remember a study described in Science News a few years back that showed diverse patches of prairie adapted more efficiently to annual variations in temperature and rainfall than less diverse patches.

    Diversity is information and information is wealth. It's just wealth we take for granted, and therefore we don't bother to count it. It therefore doesn't show up on corporate balance sheets and GDP calculations, but that doesn't mean it isn't wealth.

    We could dam the Merced and turn Yosemite into a reservoir; we could turn the Grand Canyon into an endless trash pit for the refuse of the nation. These moves would probably give us a net gain in GDP, because the kind of wealth these places represent is not tracked by standard accounting.

  11. Re:The real question... on 1/3 of Amphibians Dying Out · · Score: 1

    So far, what I see in the media isn't really convincing.

    Perhaps you should read ... ok, watch different media?

  12. Re:Cloudy on Space Litter To Hit Earth Tomorrow · · Score: 1

    Well, I chose 50m of injury (not "wipe out" as you suggest -- I deliberately stipulated "injury") as a round number. You could go with 10m if you like, and we'd be talking 1/250 -- still a significant chance.

    There's lots of situations where something 40lb object hitting the ground at 100mph would endanger people in more than 314 sq m. For example, if it doesn't come straight down, it could tumble along the ground at a considerable distance, or ricochet. If it fell in a densely populated area, the numbers could be much, much higher in any number of ways. This asymmetry should be taken into account if you are seriously interested in a precise estimate of risk. In the right circumstances, an object like this could kill scores of people -- not necessarily just those who are directly struck by debris.

    In any case, you're missing my point. My point is what is reasonable for an individual to ignore as a negligible risk is not a negligible risk for somebody.

  13. Re:Cloudy on Space Litter To Hit Earth Tomorrow · · Score: 1

    I should make an important point here, which is the difference between how a statistical event looks from an individual perspective and how it appears from a public perspective.

    Let's suppose that the piece of junk has an injury radius of 50m, or 8000 sq m. There's 510 million sq m of surface area on the earth, so the chance that it will fall within 50m of me is 8,000::510,000,000 or 1 in 63,750. You're roughly 10x as likely to die in a car accident in any give year. That actually is much closer to significant than I thought it might be before I did the calculation. We do take steps to alter our risks of vehicular death: we use seat belts,we drive cautiously etc. But we don't take further steps, like installing a racing seat with a five point harness. Arguably, then, further marginal reductions in our death risk are not that meaningful to us, and we would very likely do nothing to reduce a risk that is already 1/10 as great as the point of diminishing returns for car risk.

    On the other hand, let's consider any single 50m circle on the Earth. How many people are in that 8000 sq m circle? Well, there are currently 6.7 billion people spread out over 510,000,000 sq km. That is roughly 13 people per km, or 0.000013 persons per meter, so on average 1/10 of a person will be in the injury radius.

    That's enough that anybody who is responsible for de-orbiting something with that kind of potential for injury would be very concerned. If I handed you a gun, assured you that there was only a 10% chance it was loaded and that the ammunition was small enough in any case that anybody you managed to shoot would probably recover, you'd still be reluctant to point it at somebody and pull the trigger. That's because you can see the person; you've picked them out.

    Is that morally worse than de-orbiting a piece of space junk where the net probabilities of injuring or killing were the same? I actually think it is, but the argument is subtle. It's still a very serious think to do if you are responsible for the results.

  14. Re:No money? Just use a credit card! on Low-Income Users Latch On To iPhone · · Score: 1

    Perhaps. Perhaps this is an example about how new technology appeals to younger people.

    Younger people have less income, but also fewer financial responsibilities. It's a lot easier being 25 years old on $30,000 than it is to be 45 with three kids and a mortgage. When you're twenty-five years old and run out of cash, you go to your parent's house for a meal. If you can't, you go on short rations until payday. When you're forty five, it's your kids who go on short rations. Sending a kid to school hungry is a parent's nightmare.

    Also consumer debt is a very different thing when you have forty years of earning ahead of you than when you have only twenty, and you're on the up curve of earning. A twenty five year old making $30,000 will probably be making more in ten years. A forty five year old is less likely to be making more in ten years he is now.

    This doesn't make splurging on an expensive phone virtuous for a twenty-five year old. Yegads, I wish I'd taken some of the money I wasted when I was 25 and put it in the stock market. But I didn't, so I don't expect most people who are that age today to be any more responsible than was.

  15. Re:Faster than Vista! on Ubuntu 8.10 Outperforms Windows Vista · · Score: 2, Insightful

    "It depends" is a good answer for this kind of situation.

    What operating systems do, primarily, is manage hardware resources. So things don't get interesting until you don't have enough resources. In most situations, there should be no perceptible difference between operating systems, it's when you begin to push your luck that you start to see differences. And then it depends on exactly how you are pushing your luck: too big a working set, allocating huge chunks of virtual memory, intensive disk I/O, the kind of disk I/O, etc.

    Startup is a remarkably resource intensive process in a modern operating system. Back in the day "bootstrapping" an operating system was loading in a short machine language program via the front panel switches, the result of which was the machine was ready to read a program from some device. And today ... the process of startup is not much faster. It just does inconceivably more.

    The operating system, of course, also uses resources for various purposes. Vista's aggressive disk caching scheme is an example. If (a) you have plenty of resources to boot the system and (b) Vista guesses right about what you're going to need off disk, life is good. if either or both of these is wrong, life gets miserable. I do most of my work on virtual machines, and Vista is about the worst possible platform to do that with, at least factory configured.

    In general, Vista comes with lots of bells and whistles turned on by default. That means push comes to shove a bit sooner. Throw enough hardware at it, or turn off all the features you don't need, and it doesn't look so bad. Seriously, Aero isn't worth having your system not work smoothly because it keeps deciding it needs a bunch of memory pages that have been swapped out.

  16. Actually on Fraud Threat Halts Knuth's Hexadecimal-Dollar Checks · · Score: 4, Interesting

    a check doesn't legally have to have your account or bank routing number on it. It certainly doesn't have to be printed by your bank.

    The numbers are there to make it convenient for banks to move money around. A bank can refuse to honor such a check, but a bank can refuse to honor any check. There's no legal obligation to honor any check.

    The numbers don't turn an ordinary piece of paper into a check. What does that is your signature.

    I once knew a guy who wrote out a check to another guy on a napkin. He then went over to his bank branch with the other guy and made sure they honored the "check", which after some discussion they did. He could have just withdrawn money, but he wanted to prove it could be done, and he did.

  17. Re:This may be just the beginning of this stuff... on Sprint Cuts Cogent Off the Internet · · Score: 1

    There is contract law. There are consumer protection laws.

    Sprint may have a legitimate beef with Cogeent, but it's actions affect customers and partners that are not a party to that dispute.

  18. Re:Guess what? on Sprint Cuts Cogent Off the Internet · · Score: 1

    Well, you're missing a point. A lawyer acts as a proxy for his clients. It's unfortunate, but every other alternative would be worse.

    Take criminal law. People hate the idea that lawyers represent guilty criminals. However if they didn't then you'd have conviction without a trial, at the hands of your lawyer. Civil law is, of course different, but not entirely. It is not the job of the lawyer to be the final arbiter of his client's case. He is supposed to present his client's argument as the client would himself, if he had the expertise, subject to the ethical rules of the profession.

    That's not to say that there aren't abuses, like using the economic threat of litigation to win extra-legal benefits for clients. That should be grounds for disbarment, but it's hard to enforce, and the lines can be fuzzy in places.

    The reason there are too many unethical lawyers is probably that there are too many lawyers altogether trying to make a living at the profession; more than can be supported ethically. On the other hand, there probably aren't enough really good lawyers. Somebody with the legal acumen and rhetorical abilities of an Alan Dershowitz or Johnnie Cochran is not going to starve in any kind of legal system. If you're just mediocre, then bending ethical standards is one way to make a living.

  19. Re:So what is Sprint providing its customers? on Sprint Cuts Cogent Off the Internet · · Score: 1

    From a consumer's point of view, he puts gas in his car's tank, then when he steps on the accelerator, his car engine goes faster. But in fact this is dependent on the fact that gasoline wants to follow a pressure gradient from the tank to the fuel injectors.

    Now imagine you don't own "your" car. You lease it. Furthermore the car company doesn't own the pieces of the car, they lease them. So the fuel pump is legally owned by one company (A) and the fuel tank is legally owned by another (B), and those companies have a dispute.

    Now imagine that company A can say, "OK, until company B accedes to our demands, our pumps are not going to pump any gas that comes out of a tank owned by company B."

  20. Re:No Barr in CT on Paper Ballots Will Return In MD and VA · · Score: 1

    No, just the opposite. If you wait until the last minute, your options become limited. That's what makes it the last minute.

  21. Re:One of the better ideas to fix health care... on Discuss the US Presidential Election & Health Care · · Score: 5, Insightful

    The plan you link to is not really all that different from the Obama plan, except that Obama's plan tries to make it possible for private insurance companies to survive.

    Basically, Obama's plan gives individuals the ability to either (a) buy into a public plan if they aren't covered by any other insurance; (b) purchase private insurance through the kind of group insurance commission that would aggregate their buying power to lower prices or (c) continue to get health care through their employer.

    Since many small employers will choose to offer insurance through the government program, and many individuals will buy insurance at group rates, Obama's plan keep the insurance industry viable by having the government take over insuring catastrophic health care. This of course, is a budget buster.

    McCain's strategy is quite interesting. He wants to move away from employer supported health care, encouraging individuals to pay for their own insurance. He creates tax based disincentives for receiving employer supported health care, and gives tax breaks for seeking privately purchased health care. The idea is that people will make shrewder decisions if they have the money in their own hands, which is true. Unfortunately what seems shrewd for the individual is not necessarily shrewd for society. Nobody is going to opt for a plan without catastrophic care, so the cheapest plans will skimp on routine care, Nobody wants to get sick, but an individual might find a bet that he won't need care until his insurance kicks in favorable. The cumulative cost of those bets would be staggering and, of course, drive the cost of health insurance and care up for everybody. This, of course, is a budget buster; not for the federal government, but every household that has to buy insurance.

    It's not as simple as saying "McCain wants to tax health care benefits", which while technically true is really a clever fib. The problem is that McCain's plan doesn't believe that there is a shared interest in this problem that is distinguishable from the net effect of individuals pursuing their self interest. This is what Republicans mean when they talk about "freedom", and in fact, this kind of shared pursuit of individual gain is often for the best. But the logical end point of the view that this is best in every case is not a program of government incentives and disincentives. It's for the government to have no health policy at all. Introducing a government health policy is tacit admission that cumulative self-interest is not optimal in this case. This is not to say his plan can't work, but you can't argue it has to work from the ideological standpoint that pure market solutions are always best.

    McCain is right on this at least: it makes sense to take health care out of the hands of employers. Obama plan flirts with single payer, but doesn't go all the way. It wouldn't want to get a reputation as a hussy ... er... socialist. I think Obama's plan is over complicated. A straightforward offer of government backed health insurance would be simpler and get the job done. However, as you point out, the insurance companies would go ape-shit over single payer, which would be a death sentence for them. It isn't enough for the President to stand up against the lobbyists, congress will have to also. This introduces ... complications.

  22. Re:Making money on How To Make Money With Free Software · · Score: 3, Insightful

    Printing too much money is a metaphor for creating too much one through one means or another.

    Well, one should be careful of believing metaphors too much. It is possible to make your metaphor work, but only through considerable twists of logic. The question you have to ask whenever you do that: is it worth the effort? Does the metaphor tell you anything worth knowing? The GP is precisely right: people don't know how much risk they've undertaken, so they don't know how many of their assets are, in accounting terms, "cash equivalents". So what has happened is that the flow of money through the economy has been gummed up. This is exactly the opposite immediate effect from what you'd get "printing more money" (actually extending more credit). People would not be able to get rid of their dollars fast enough, lest they be inflated away.

    Here's a metaphor that is much better than the printing one, a metaphor that derives from accounting but draws upon physics: anti-money. The way you get a certain number of dollars into circulation is to create an equal number of anti-dollars. Eventually, the dollars return to annihilate and be annihilated by anti-dollars.

    The process of creating money and anti-money is called "credit".

    Every dollar borrowed by a big bank from the Fed is balanced by an anti-dollar on the Fed's books. When the Fed reduces interest rates, then banks borrow more cheap dollars from it, putting more dollars into circulation, balanced by anti-dollars on the Fed's ledgers. However: while the Fed influences the money supply, it's not the only or main creator of money. Anybody can create money, perfectly legally by extending credit. A dollar exists if an only if everyone believes it is there..

    If I were Warren Buffet, I could write on a piece of paper, "Pay to the bearer one million dollars. Signed, Warren Buffet" then hand you that piece of paper, writing "one million anti-dollars" on my ledgers. You could go out and spend that "million dollars" as if it were a bundle of 50,000 $20 bills. As long as that paper was absolutely convincing, as long as everybody agreed that note was worth a million dollars, it would be a million dollars.

    You could deposit it in a bank, which put it in its vault. Since the note can't be conveniently divvied up, what they do in effect is create a million dollars of money and a million dollars of anti-money, securing the promise represented by that creation to their ability to demand a million dollars from me. That's very important. The promises represented by money form a kind of chain of obligations, ultimately anchored to the Treasury's endless ability to create dollars. When financial transactions occur, the chain is reconfigured. When I issue the note I forge a ring in the chain and link that to my upstream debtors. When your bank redeems the note, I take my ring out of the chain and splice them directly to my upstream debtors.

    That's where printing comes in. Nobody wants a lot of physical dollars; they don't want tens of thousands of dollars in their wallets, or billions of dollars in bills in their vaults. But they want to know that if they yank on their end of the chain, the Treasury will respond by printing a dollar. That's what the full faith and credit of the United States amounts to: a promise to print as many dollars as the Fed says exists. In practice the amount of physical dollars is an infinitesimal fraction of the total dollars in circulation; the capacity to supply virtual demand is transmutes credit into money. If any upstream link in the chain is questionable, all the downstream credit ceases to be money and becomes investment.

    The source of the current problem is that the financial system has attempted the equivalent of pulling itself up by the bootstraps. Individual institutions discovered that they could insure securities with things like credit default swaps. That means instead of carefully

  23. Re:No Barr in CT on Paper Ballots Will Return In MD and VA · · Score: 1

    Oh, that's a simple ... but it's not a remedy.

    It's not clear that Barr would prevail in a challenge, but he waited three weeks to contest the invalidation of five thousand signatures.

    There have to be rules, and there has to be somebody judging whether the rules have been followed, and it ought to be possible to contest that ruling. At some point, however, you lose your right to challenge the ruling. The Barr campaign waited until the last minute to submit the petition, and after the signatures were invalidated they did nothing for three weeks.

    Normally, I'm sympathetic to third party candidates, but Barr's CT operation screwed this up. Barr had no chance of affecting the outcome, so getting on the ballot is a name recognition and party building exercise. From a practical standpoint, nobody has been disenfrachied, Barr has got his name in the news, and the party has learned an important lesson: don't leave things to the last minute.

  24. Re:You make a good point... on TWiki.net Kicks Out All TWiki Contributors · · Score: 2, Interesting

    Isn't the whole point of free software to limit the impact of this kind of decision? Part of the maximization of freedom is the freedom to stop working with other developers, both the freedom to fork, and the freedom to force others to fork.

    If the core developers have the source code, and rights to that source code we are talking about, potentially, three things of value: (1) the project name and (2) access to the source code server and by extension (3) access to the source archives. Of these, the only serious blow is loss of access to the archives.

    If the person who organizes a project decides to kick everyone else out, that's his right, so long as he honors any agreements made with the other contributors, such as honoring terms for files they have contributed. Things get most tricky when it comes to patches that have been submitted, but the honorable thing is clear: make the source available for every binary version ever distributed.

  25. Re:any evidence on Discuss the US Presidential Election & the Economy · · Score: 2, Informative

    John Maynard Keynes was an economist who used his understanding of economics to make himself wealthy. He spent a couple of hours a day on his investments, leaving himself the rest of the day to amuse himself. He lost most of his money in the 1929 crash, but quickly recouped his losses. I'd say that the fact that Keynes found making a fortune fairly easy by putting is economic ideas into practice (as opposed to making a fortune by selling the ideas) probably counts as reasonable evidence that he understood how the economy of his day worked. Naturally, nobody can predict everything; there is a degree of randomness and chaos.

    I think the key is that the randomness and chaos is most powerful over the short term. Over the long term, various economic parameters like stock market indices tend to be fractal: the closer you look, the more detail there is to see. This means nobody is ever fully the master of their economic fate. However, by investing in a way that offsets the variability in various indices, you can "understand" the economy quite well. David Swenson, who manages Yale's endowment, has a very simple system: you just keep rebalancing your portfolio regularly. When stocks are up and bonds are down, you take money out of stocks and put it into bonds and vice versa. What this means is that you are continually buying low and selling high.

    Does this confer on him the ability to predict something like the credit crisis that plays bloody hell with everything? No. But that certainly wasn't beyond human reason. What it was, was beyond human emotion to accept. Consider this timeline of articles:

    2002, September: Housing Bubble Lurks Among the Levered:"The people who say that the housing market can't be seeing a bubble argue that it's more heterogeneous, whereas the equity market is more homogeneous, in terms of money flowing back between different securities. ... It is true that real estate is more of a regional market, but it can still turn into a bubble."

    Could this be that this is the classic glass half empty/half full dichotomy? I don't think so; the glass half full people are saying that empty space cannot exist in the glass, which doesn't seem right...

    2002 October Housing boom breeds new mortgage deals:"Jennifer Scutti, a mortgage industry analyst at CIBC World Markets, wonders about the impact on delinquencies when some of the back-loaded costs of the new flexible mortgage deals hit home."

    Looks like Ms. Scutti was right. Just how right? She goes on to say there might be problems in "three to five years"...

    2002 October Where the Risk Went: With respect to credit default swaps, "[The banks] have shifted the risks to institutions that are less-equipped to handle them--from insurers to highly leveraged hedge funds. And because disclosure is limited, it's not always clear just who is exposed. ... Who's bearing the risk that has been redistributed by all of those securitizations and derivatives? Surprisingly, some of it has stayed in the banking system. ... The danger is that if the financial system's health is impaired, consumers and businesses will be starved of credit, and the economy will slump."

    OK, so mortgage practices are getting dangerous... at the same time the banking system is overextending itself by insuring securities, risking a complete collapse. What does that mean with respect to mortgage backed securities?

    2003, January: How TCW Galileo Gets Stellar Returns: how? "In general, mortgage-backed securities funds are much less volatile than other types of bond funds because they're less sensitive to changes in interest rates." Hmm. Just thr