Jamesian Philosophy Refreshed

On November 7th, a US bankruptcy court judge, Steven Rhodes, approved Detroit's plan, allowing its exit from bankruptcy court protection. One of the remarkable subplots in Detroit's bankruptcy-court saga has been the availability of works of art as collateral. Rhodes' opinion described the Detroit Institute of Art as "an invaluable beacon of culture" and declared that the liquidate its assets, that is, to sell its artworks for the benefit of the creditors of the city, would be "to forfeit Detroit's future." I'm not sure I believe that. After all, the works themselves would have remained intact, surely? Unless we believe that the high bidder would be someone with a malicious design to destroy what he/she/it was buying. I think the reasonable guess is that the artworks involved would generally have ended up in the hands of other museums, or in a smattering of cases in the hands of wealthy collectors willing and in fact eager to take good c...

  Sometimes the debris or throwaway of one year is precisely the material that needs to be preserved or conserved in another. Trash becomes a nesting place, or the familiar terrain of wildlife. That was an insight neighbors of a vacant lot brought to the table at a public hearing of a certain Massachusetts' town's Conservation Commission on a recent Thursday. When the Commission came to the matter of a notice of intent on a certain property I'll call Fordham Place, it heard from an environmental consultant for the landowner, who made a  speaking of the landowner’s intent to put a single-family home on what is now a vacant lot within a buffer zone just outside a designated wetland. Consultant also said, as if to allay concerns, that this intent comes with a “detailed plan for restoring and re-vegetating the area.” Commission members agreed that the notice of intent didn’t apply to the actual wetland, rather, to a discretionary buffer zone outlying...

  Detroit filed for bankruptcy in July 2013. On December 3, a U.S. bankruptcy court ruled against parties who had challenged its eligibility for  chapter 9 protection. Since Detroit is the most populous city in the state of Michigan and is the center of a metropolitan region of 5.2 million, this event has attracted a lot of attention, inspiring different ‘takes,’ involving in each case a distinct ideological or psychological prism. For example, Detroit has long been the center of the American automobile industry, so much so that the word “Detroit” is used as a metonym for that industry, and that has inspired some commentators who have seen the failure of municipal finances as of a piece with the failure of that industry in the face of innovative overseas competitors and changing public tastes. This was the take for example, of Mohamed El-Erian, the CEO of PIMCO. This take is also broadly consistent with a mantra of Detroit’s emergency manager, Kevyn Orr, who ke...

In our last post devoted to the mathematics of finance, we mentioned that the standard deviation of a bell curve showing the range of possible returns from an asset can be employed as a surrogate for its risk. I'd like to pursue that point a bit. It is the chanciest corporations,  the ones that do have significant risk, that have to bribe you into buying their bonds with a higher return than their safer brethren need offer: thus, a trade-off. One way of looking at the trade-off is this: suppose I come into your neighborhood and offer to play a simple game. You will roll a pair of dice I provide and I will give you $1,000 times the number shown on the dice when they come to rest. I require only that you pay me $1,000 before we begin. The lowest possible score is 2, so the lowest possible pay-out is twice what you’ll pay me up front. This, then, (if I am honest and actually have the money I’m offering to pay) is a can’t-lose proposition for you. The worst outcome is ...