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Showing posts from July, 2013

Remembering the New Realists

In epistemology, the term "new realism" often refers to a school of thought that was prominent a century ago now. Here's a link to the new realist manifesto, published in 1912.

Who were they? Key figures in the movement included Edwin Holt and Ralph Barton Perry. Their thoughts owed a lot to William James' idea of "pure experience" and something to Bertrand Russell's notion of "neutral monism."

What was their distinctive view?

Recall, before we answer this, that two of the key epistemological questions in modern philosophy have been: do I know in a strong sense of the word "know" that there is an external world? and (if one answers that in the affirmative) how?

The new realists, simply by virtue of the fact that they were realists, answered the first of those questions with a Yes. The answer to the "how?" is that my sense perception constitutes direct information about the outside world. Sense perception sometimes prov…

Accounting Basics: Part Two

Continuing down the list of assets on a balance sheet (beyond those described in our last discussion of such a sheet), we come to a line for prepaid expenses. If our business has paid $1,800 for a year of insurance coverage, it will own something, a claim against the insurance company. This may not sound like an “asset” in a rough commonsensical sense of the world but … hey … the common sense cookie often crumbles. We have to recognize this as an asset in order to convey fairly the economic realities our books are designed to describe.
We’ll move now to tools & equipment. Perhaps our business involves a conveyer belt, which we use to move a product from the back room to the front, where it is shown to the customers and, with luck, purchased. The conveyor belt is a fixed asset or, in less formal parlance, it’s part of our “overhead.”When we bought the conveyor belt and had it installed (for, we will say, $500) we might have paid $100 cash, charging the other $400 to our credit acco…

Even the Fabulous Fab

... looks fabulous.

For a story on the opening of the trial, go here:


By the way, if you already know the basics of the Tourre trial, if you make a point of following such things, you are excused. because I don't plan on getting very deeply into this today.

For those of you still with me then, the central figure in the photo nearby is Fabrice Tourre, who was famous not too long ago. Indeed, one might have thought that his trial would be a major circus.  But the circuses are elsewhere just now. What with Zimmerman's acquittal, a new royal baby, the latest news about Mr. Weiner, and the bankruptcy of Detroit, the Tourre trial is passing under the radar.

Tourre was a mid-level trader at Goldman Sachs who was involved in some of the Abacus trades.

He and Goldman have gone their separate ways. But Goldman Sachs is still paying for his defense costs. This sounds awkward. What if his best defense is to pass the buck upward?

At any rate, Tourre certainly can write an enter…

Expanding City Boundaries

I suspect that the state of Michigan, perhaps with a sharp push from a federal bankruptcy court, will eventually expand the  borders of the city of Detroit.

They can't expand them southward -- that's an international border after all. But I can see Detroit, with the authorization of the federal bankruptcy court, and its state capital, grabbing some of those ["white suburbs"] to the north and west. Rochester Hills, Eastpointe, Voila! wider tax base, solvency (at least for awhile), and public service ads about how "we're back!"

Just to be clear I'M NOT ADVOCATING THAT! This is a reflection about what will be, not what ought to be. I remember New York scraping along at something akin to insolvency, without the help of the bankruptcy courts, in the mid 1970s. There was a good deal of talk about extending the definition of the city into Westchester and Long Island. Nothing came of it. The people in those places would have raised a stink had such a bill…

Three Books with Religious Themes

I've recently received the Midsummer catalog for Daedalus Books.

Here are three of the offerings the especially caught my eye. There is a common theme to them, as indicated by the headline above. I'll just present the bibliographic particulars here without further comment.

1) Thomas de Wesselow, THE SIGN: The Shroud of Turin and the Secret of the Resurrection
Dutton 2013.

De Wesselow, an art historian by trade, contends that the famous shroud is not a work of art or a fraud but an authentic burial cloth from first century Palestine. Also, he contends that the shroud was central to the origins of Christianity.

He seems not to believe in the orthodox Christian account of events -- he is skeptical that the tomb was found empty or that Jesus later appeared to his disciples and ascended into heaven, etc. But he does believe that the early Christians believed in the resurrection with sufficient ardor to be martyred for it. So ... what convinced them? A mysterious piece of cloth.

Accounting Basics: Part One

Entities large enough to hire accountants tend to keep a different set of books for each of three purposes:
1) Dealing with the tax authorities,
2) Communicating with their own investors and creditors, and
3) Allowing their managers to engage in informed internal deliberations about mergers, spin-offs, prices, wages, and so forth. That is to say, there are three sorts of accounting: tax, financial, managerial.
The two sets of books thatare designed for external communication, the tax and financial accounting books have a fascinating off-setting feature. The normal temptation in financial accounting will be to overstate revenue, and the normal temptation in tax accounting will be to understate it.If you are a potential investor, and if you suspect the books they’re showing you are a bit too rosy, you’ll want to see the books they show the tax authorities.
At any rate, in what follows we will chiefly discuss financial accounting. There is a good deal of drama here: a company’s obligatio…

Jay Leno

Leno's been mocking the NFL of late, only in part because of the lengthening rap of the league's players.

A sample of his material:

It's now 32 NFL players that have been arrested since the Super Bowl. To give you an idea of how bad it's gotten, now when a team says they've hired a new defensive coordinator, they're talking about a lawyer.

The latest NFL player to get arrested is New York Giants linebacker Dan Connor. He was arrested at the Philadelphia airport for carrying a switchblade. Experts say it’s the first time anyone in Philly has been able to stop a New York Giant in three years.

A lifelong Cleveland Browns fan, a man 55 years old, recently passed away and for his last request he wanted six Cleveland Browns as pallbearers so the Browns can let him down one last time.

That’s what he said. The bad news? They fumbled the coffin five yards from the grave.

James on the nature and value of philosophy

"By its poetry it appeals to literary minds; but its logic stiffens them up and remedies their softness. By its logic it appeals to the scientific; but softens them by its other aspects, and saves them from too dry a technicality."

So it mediates between Spock and McCoy?

The truth about the Roswell alien

Unless memory fails me, we have never before discussed on this blog the crash of something-or-other at a ranch near Roswell, New Mexico on July 7, 1947.

I bring it up now only to say that Roswell, and the much-discussed theory that the crash was of an alien flying saucer, makes a brief appearance in the recent book by Guy Lawson: Octopus: Sam Israel, the Secret Market, and Wall Street's Wildest Con.

The gist of Lawson's book is difficult to explain, but I'll dive in anyway. Sam Israel was one of the three principals of a high-flying hedge fund in the early years of the 21st century, a hedge fund called Bayou Capital, though it was run out of Fairfield County, Connecticut. It was called Bayou in recognition of Israel's renown Louisianan family.

In 2005, CNN Money described Bayou's collapse as "one of the most bizarre hedge fund blowups in recent years."

But they didn't know the half of it.

What Lawson focuses on is the strange confidence that prevai…

Mohamed ElBaradei

For three days last week the new prime minister of Egypt was the fellow named in the headline of this entry.

ElBaradei was appointed to that post by the interim president, Adly Mansour, who until quite recently was  Chief Justice of the Supreme Judicial Court. But on Tuesday, President Mansour shuffled the playing cards of his very new and tenuous government. It appears ElBaradei is now going to be vice president (and it isn't at all clear what that title is going to mean), and the new prime minister designate is the former finance minister Hazem el-Beblawi.

Anyway, the significance of ElBaradei's involvement, whatever exactly its contours, is that he is the former head of the International Atomic Energy Agency. In that capacity he was skeptical of US (Bush administration) claims about weapons of mass destruction in either Iraq or Iran, but he took a hard line on the subject of North Korea, saying "I see a very serious crisis -- a country that's completely defying …

Black-Scholes-Merton as Beachhead

The above graph is a visual representation of the Black-Scholes model. Or Black-Scholes-Merton if you want credit shared equitably and "you're not into the whole brevity thing," Mr Lebowski. As you can see, there are three axes. The x axis (the width of the box) is the price of the underlying asset, the stock price, treating the strike price in the center as 1. The y axis (the height of the box) is the volatility of that option. The z axis (the depth of the box) is the time to maturity [and either exercise or expiration].
As you can see, the plane of various shades of blue (the darker the blue, the higher) has a sharp crease at the front/center/bottom of the box, where the sharp difference between winners and losers on the lottery’s drawing date is indicated.
We should also mention that the volatility that goes into the calculations as we’ve described them above is historical volatility. One of the assumptions of the BSM model is constant volatility. This is a counter-fa…

Sybil Exposed III

In January I wrote two posts here summarizing the book Sybil Exposed, by Debbie Nathan.

Here is one link, and here is the other.

Today I'd like to go back to that book, and to the question of the truth about "Sybil," the multiple personalities case immortalized in a 1973 book and 1976 movie.

I've given the gist of Nathan's take on this story in the earlier two entries. What I'd like to ask today is this: how did the world come to know that the real 'Sybil' was Shirley Mason of  Dodge Center, Minnesota. Nathan doesn't claim to any originality in this.

As I noted in one of those earlier posts, "anyone who had been in the Mason family's social circles during Shirley's childhood and who read the book ... could make a fairly confident guess about who the book was about, and it seems at least a few did so."

But for the broader world, the disclosure came due to work by Mikkel Borch-Jacobsen and Peter Swales in the 1990s. Here's …

Existential America

I've recently come across a book, Existential America (2005) by George Cotkin, a professor of history at CalPoly. A book note here may be a fitting wrap-up for the July 4th weekend.

The focus of the book is the big splash that the existentialist movement made as a high-prestige European import right after the war, in the middle of the last century. The people exporting that product were rather disdainful of what they saw as American superficiality and probably thought they were just a fad here -- though a fad they were happy enough to ride in terms of book sales etc.

In 1950, Jean-Paul Sartre wrote that Americans don't have a concept of evil. "There is no pessimism in America regarding human nature and social organization," -- which was bad news for us.

Simone de Beauvoir, similarly, said Americans have no "feeling for sin and for remorse."

But, Cotkin thinks, they misunderstood us and misunderstood their own reception.

You can read in the book here.

Defining DiaMat

Somebody at Yahoo!Answers asks what is "dialectical materialism."

When answering such a question I try to abstract from the whole question of my personal reaction to the thing to be defined and just ... well ... answer the question.  Regular readers of this blog will know perfectly well that my reaction to DiaMat is negative. But that wasn't asked!  So I went with this:


 Dialectical materialism is the metaphysical side of Marxism.

On the one hand there is Hegel, the Towering Figure of mid 19th century German thought. Hegel developed a system sometimes known as "dialectical idealism" which says that the world moves in zig-zags, and that the ultimate goal of the movement is an Absolute Idea that knows itself and is all in all. God, then, is not the Creator of the world but its summation and Judge, and the world moves in its zig zag (back-and-forth among contraries, but nonetheles…

The Mathematics of Stock Options

You’ll remember that in earlier posts I've discussed a hypothetical widget-making company, XYZ, and said that we could enter various reasonable assumptions about this company’s stock in a calculator available in any of several websites, and receive for our troubles the value of a proposed put or call.
How does the calculator do that?A skeptic may sneer at the whole idea and say, “only supply and demand determine the value of a financial instrument. The demand for an option on a particular stock may change from day to day – as may the supply, as new writers enter or leave the market – so surely no formula or algorithm can tell us in advance what the value is.”
That’s a plausible response, but it is in error. The value of stock options can be defined mathematically in ways that the value of the underlying stocks cannot. After all, we know intuitively what the value of a stock option is on the expiration date. If it has expired worthless, we know the value is $0. If it hasn’t, we kno…

Animal Farm: An Exchange

In a recent issue of The New York Review of Books I discovered the following.

George Orwell and Dwight Macdonald exchanged letters in December 1946 about the meaning of Orwell's fable, Animal Farm.

Macdonald wrote that some people have been citing the book as an argument that revolutions always end badly, "hence to hell with it and hail the status quo."

Macdonald himself didn't take the book as having any such broad a meaning, he took it as specifically applying to the history of Russia and the failure of its revolution. But he had been surprised by the prevalence of the other view and was asking Orwell for guidance.

Orwell replied:
"Of course I intended it primarily as a satire on the Russian revolution. But I did mean it to have a      wider application in so much that I meant that that kind of revolution (violent conspiratorial revolution, led by unconsciously power-hungry people) can only lead to a change of masters. I meant the moral to be that revolutio…