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Showing posts from September, 2014

Murray Rothbard

Some words today from the great anarcho-capitalist historian, Murray Rothbard:

A radical libertarian, MR said, is not only an abolitionist, but also refuses to think in such terms as a Four Year Plan for some sort of stately and measured procedure for reducing the State. The radical – whether he be anarchist or laissez-faire – cannot think in such terms as, e.g.: Well, the first year, we'll cut the income tax by 2%, abolish the ICC, and cut the minimum wage; the second year we'll abolish the minimum wage, cut the income tax by another 2%, and reduce welfare payments by 3%, etc. The radical cannot think in such terms, because the radical regards the State as our mortal enemy, which must be hacked away at wherever and whenever we can.

About Time

I watched a boring movie recently.

Through DVD sent through the snail mail by Netflix (by now a very old-school system) I watched a fantasy about time travel.

There is nothing wrong with fantasies about time travel. H.G. Wells', THE TIME MACHINE is a classic novel and gave rise to an equally classic movie of the same name. More recently, the Harry Potter novels/movies had time travel elements, as did the Terminator films, etc.

The movie I saw last night, ABOUT TIME (2013) was an effort to do something different from all of that, to make time travel a plot device within a romantic comedy.

The closest analog would be THE BUTTERFLY EFFECT (2004). There too, the story was about the multiple paths possible in the life of an apparently ordinary person who can travel back in time to correct what he sees in retrospect as his mistakes. But in BUTTERFLY, the emphasis is on how efforts to fix the mistakes of the past keep backfiring, so each time line seems worse than the one before, an…

Quote for the day; on time travel

This is from a review of new books, contributed to the October HARPER'S Magazine by Joshua Cohen.

"Fiction is one of two ways we currently have of traveling through time. The other is to travel from South to North Korea: from Samsung-sponsored clamor to a dictatorship of barbed-wire penal camps with nary a bar of WiFi. It's nearly as difficult for an American to obtain a visa to the SPRK as it is to obtain copies of the hundred books its government has approved for reading."

That's a nice passage, and allows Cohen a segue between the sci-fi novels he had just been talking about, into a Korean-American publishing project, Dalkey's Library of Korean Literature.

Just Dust, Guys

The supposed "gravitational waves" created by the Big Bang, a "cosmic signature" of that Bang, may have been something a good deal less dramatic.

The Guardian.

A mission of the European Space Agency has found that the findings attributed to the 'waves' could in fact be due to ... dust.

There seems to be a collective will-to-believe in the Big Bang, to rush to give it a mantle of accepted scientific facts. This incident is part of a broader pattern.

But since the notion of a "signature" of the Big Bang has come unraveled, maybe some hard core steady-staters are planning a comeback.

On Break

As regular readers of this blog know, I typically post four times a week: Thursday through Sunday.

This weekend, I will not be posting here. I'll be traveling, and recent events have been too hectic to allow my to stockpile posts here 'pre-trip' as has been my usual custom.

So we'll have to get by without each other for a bit dear readers, but I expect to restore normalcy soon.

As compensation, enjoy the pic of cute pups, above.

Apple and the Mobile Wallet

I don't like the term "mobile wallet" in its digital-world significance. The term refers (and I'm quoting from a banking-industry website here) to a smartphone feature that is linked to a user's credit or debit cards "to make payments in person at a physical point of sale." Got it. Not a very complicated idea.

What I don't like about it is the implication that wallets had to become digital in order to be "mobile." Haven't wallets always been mobile? Hasn't that always been the point? A wallet [an "analog wallet" if I need to say that -- a wallet sans phrase] is to be carried, in a woman's purse or a man's pocket.  A mobile wallet is now "in" your phone, in some sense of that flexible preposition. I don't really see a significant gain in mobility there.

Anyway, the reason for bringing it up is that Apple has now jumped on the mobile-wallet bandwagon.

The iPay system, the new mobile phone app for th…

Krugman and the UK

In June of this year, Paul Krugman wrote a sort of humblebrag column admitting to certain errors that have accumulated in his columns.

The tone was, "yes I've gotten things wrong, but none of these examples reflects any very deep mistakes in my assumptions, and since I'm owning up to my errors, all is good."

The most intriguing of the admissions, to me, involved the economy of the United Kingdom. Krugman has been using "austerity" as a whipping boy for years now. Every impulse toward hardening the money supply or cutting public expenditures, in any country toward which he turns his gaze, is "austerity" or the cult of the "austerians" and a bad thing.

One sometimes gets the impression that Krugman coined "austerians" to pun on "Austrians," and to try to use the failures (as he sees them) of austerity policies as arguments against Austrian economics. A silly pun, if that is what is intended.  

Anyway: the U.K. under…

Sovereign Debt and Drive-In Movies, Part II

As Anna Gelpern observes on The Credit Slips blog, there is no real political support for an international bankruptcy court for sovereigns.

What less daunting solutions might there be?

The obvious one is that bond-issuing sovereigns can change the language of their issuing documents. Couldn't they simply stop using the pari passu language that the holdouts have been employing in the New York courts? 

Well, yes, although something more than simply deleting that Latin phrase will be necessary. Fortunately, some very bright legal minds have given a lot of thought to the draftsmanship involved.

Most bonds issued by sovereigns nowadays have collective action clauses. These explicitly allow for a restructuring in which some supermajority of the creditors can vote to accept a "haircut," as it is called, and holdouts will then be stuck receiving the same payments with the same haircut, too.

Without a CAC, the situation is as if a drive-in movie theatre were prohibited from …

Sovereign Debt and Drive-In Movies, Part I

In Eco 101 you probably learned that one of the big issues that arises whenever there is an effort at collective action in the absence of a central authority is the free-rider problem, otherwise known as "positive externalities."

Let's go over it again, because some of us (myself included) have allowed our memories of Eco 101 lessons to become ... less than fresh.

Textbook analogy: An entrepreneur creates a drive-in movie theatre, because it is cheaper just to put up a screen than to build a whole building. At first things work fine but over time cinephiles discover that they don’t have to drive into the entrepreneur’s lot and pay him in order to watch the movie: they can enjoy the same movie for free by parking on the opposite side of the street. The entrepreneur either internalizes the benefit (puts up walls) or he goes out of business.

So external benefits, that is, benefits available to freeloaders, threaten the viability of the whole enterprise.

That is one view…

More From and about Andrew Lo

Sunday and again yesterday I wrote posts here about the biomedical world. Yesterday's, you may recall, I summarized a paper by Andrew Lo and two other scholars, proposing a new system for the private financing of biomedical research.

Today I'd like to say something about another recent paper by Lo [well, not so recent -- I'm behind the curve -- this goes back to 2011], that is the other sign of the coin of Lo's own versatility. The paper offers a neuroscientific look at the impulses of traders and investors.

In both cases, the paper I summarized yesterday and this one, Lo occupies the borderland between biology and finance. But he faces in opposite directions: in the one case discussing the best ways to finance biology, in the other case discussing the biological bases of finance.

Now: isn't that a neat symmetry?

So who is Lo? He's the possessor of a Ph.D. in economics from Harvard University (1984). He has been on the MIT finance faculty since 1988, and ta…

Financing Biomedical Research

Since I commented briefly on the pseudo-science of the anti-vaccine folks Sunday, I thought I would stay on a biomedical kick today, and perhaps tomorrow. Though the subject of today's post is, aside from the applicability of that broad label, very different from Sunday's. As for tomorrow ... tomorrow only knows.

Today, I'm looking at an article by Jose-Maria Fernandez, Roger M. Stein, and Andrew W. Lo, "Commercializing Biomedical Research Through Securitization Techniques." You can access it here.
The idea is that biomedical innovation is getting more expensive and riskier. Upon whom shall that risk fall? Well, securitization is the obvious method of spreading the risk around, although the word "securitization" acquired rather a bad odor from its connection with the pre-2007 housing market.
Anyway, the authors are undaunted by that odor. They propose securitizing megafunds of $5 to $15 billion that could yield a floor of 8.9% for equity investors. T…