Wednesday, January 28, 2009
I'm tired of behavioral finance. It has become a sort of socio-psychological financial freakshow, the past decade's version of chaos theory. It can go away now.
Sure, we could tell lots of good stories – availability heuristic! hindsight bias! rational inattention ! etc. -- but what was the real and measurable contribution of behavioral finance to ameliorating the credit crisis. Tell me, because I don't know.
What happens? Well, it's not that we abandon the stuff. Some of behavioral finance gets pulled into finance (whatever that is anymore, and that's a bigger subject). And much of the "oooh, look at the silly humans" behavioral stuff finally bores enough people that it doesn't sell books or get articles published. Then that's it. We just have finance again -- and it's as ex post and generally useless as ever, but at least they can tell better stories.
Paul Kedrosky, ladies and gentlemen. If I ever get like that, I want someone to tell me.
For as much as we think of technological change as occurring at this breakneck pace, that was 1981, and we had already sniffed out the idea of transmitting content via computer. There were rotary phones involved, yes, but the concept was fully formed. But it wasn't until December 2008 that the internet finally surpassed the newspaper as our secondary source of news (after the TV).
The award for most prescient prediction goes to the newspaper representative who says that, as cool as the "electronic newspaper" may be, he doesn't expect they'll make much money on it.
Monday, January 26, 2009
Saturday, January 24, 2009
Gillibrand has described her own voting record as "one of the most conservative in the state." She opposes any path to citizenship for illegal immigrants, supports renewing the Bush tax cuts for individuals earning up to $1 million annually, and voted for the Bush-backed FISA bill that permits wiretapping of international calls. She was one of four Democratic freshmen in the country, and the only Democrat in the New York delegation, to vote for the Bush administration's bill to extend funding for the Iraq war shortly after she entered congress in 2007. While she now contends that she's always opposed the war and has voted for bills to end it, one upstate paper reported when she first ran for the seat: "She said she supports the war in Iraq."
The pick only makes sense in terms of cynical political calculation by Paterson. He flatters upstaters, women, and Republicans in one fell swoop, making his '10 campaign against Ghouliani or whomever that much easier. I don't generally have any problem with cynical political calculation, but I sure hope this particular call backfires on him.
Gillibrand comes from a Republican-leaning district, which she won because the incumbent John Sweeney imploded spectacularly in 2006, so, as an added bonus, her selection creates a nice pickup opportunity for the GOP.
It also probably means that she'll try to tack left as a senator, which she's already started doing with gay marriage. But what I'd like even more than a Blue Dog who makes insincere efforts to make herself palatable to actual Democrats is an actual Democrat, and I look forward to volunteering for whichever one primaries her in 2010.
In the meantime, we're just going to have to put up with this clown. Ugh.
Lawrence O'Donnell is also unimpressed: "This is the hack world producing the hack result that the hacks are happy with.”
Friday, January 23, 2009
Wednesday, January 21, 2009
I obviously don't have any idea whether the mistake was honest or not, but the "it was an obscure IMF-specific technicality" excuse should be completely off limits to him. If you can't figure out your tax liability, I would think you shouldn't be Treasury Secretary, no matter how complicated the rules may be.
The weird thing about the unpaid taxes is that Geithner seems to have spent his entire professional life in training for this job. You'd think that for an ambitious bank regulator, the cost-benefit analysis of cheating Uncle Sam out of $42k is about as unfavorable as it gets. Then again, he was caught and it's still not going to stop him from getting the job, so maybe it wasn't that unfavorable after all.
In any case I'll be interested to hear about his secret plan to save the banks.
Tuesday, January 20, 2009
The shots of the vast crowd were great. The shots of the Republican leadership were even better. Not so much in a "Yeah, that's right. Kiss the ring, motherfuckers!" sense, although there's some of that, but more from a profound sense of relief and almost bafflement at the peaceful transfer of power. I didn't actually expect John Boehner to bolt from his seat mid-oath and try to knock the Lincoln bible out of Michelle's hands or anything like that. Nonetheless, watching the Republicans not do so, and instead just sit there and smile and applaud, giving at least tacit assent to what was taking place right in front of them... well it felt good.
The speech was largely as expected, but I was pleasantly surprised by this hard-to-miss condemnation of his predecessor:
As for our common defense, we reject as false the choice between our safety and our ideals... Those ideals still light the world, and we will not give them up for expedience's sake. And so to all the other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.
Translation: "The thuggery ends with Bush."
I know it's not clear yet exactly what the Obama administration is going to do differently, and of course he's publicly opposed to any legal accountability for Bush administration officials. But the mushy, conservative-flattering Obama of my nightmares does not deliver this line, because if there's one thing wingnuts can't stand, it's the slightest regard for international public opinion. They deny that the Bush years are to be apologized for, but obviously they are and it was good to hear Obama do so in his inaugural speech.
On the domestic front, the speech offered some promising evidence for the theory that "bipartisanship" is, for Obama, just another word for Republican capitulation:
Now, there are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done...
Casting the opposition to the Keynesian stimulus plan as a bunch of cynics who think America just isn't up to the task of massive deficit spending is a pretty tough line. Those who oppose the plan in good faith may have a right to cry foul, but I don't think the GOP caucus is reading from the same hymnal because they've all been convinced by Peter Schiff. In any case, the line suggests that Obama sees getting to his goal of 80 votes in the Senate as more a matter of shaming the Hooverites than accomodating them.
... What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply.
That's right, and what a lot of the commentariat still fails to understand is that Obama's repudiation of "stale political arguments" is not a matter of splitting the difference in the interest of comity. It's a matter of his agenda, which is moderate but decidedly liberal, being so popular as to render the argument effectively over.
The real legislative work is yet to be done, and there is no numerical advantage so large or political tailwind so strong that I'd completely trust Harry Reid or the Blue Dogs not to screw it up, but I feel more confident in Obama's commitment than I did yesterday.
Plus, he's actually president now, instead of that disgrace. So we've got that going for us, which is nice.
Friday, January 16, 2009
Thursday, January 15, 2009
2. The Clear was legal and not a steroid, which seems to exonerate Barry Bonds of perjury.
3. Bonds will remain a pariah while Clemens's steroid use and subsequent lying will not significantly damage his legacy.
Wednesday, January 14, 2009
It feels a little weird railing about our guy's reluctance to go a fourth year at more money for a 35 year-old starter who doesn't really strike people out, but Lowe was a special case, especially for a Mets rotation that's shallower than daytime TV.
Now he's offering Oliver Perez 3 yrs/$30 million. That's a figure which is unlikely to make Scott Boras's heart go pitter-patter, especially compared to what he just got Lowe, so hopefully there aren't any other serious suitors still out there.
It puts the starting pitching in the basket!
Sunday, January 11, 2009
It's a great story both because the protagonist seems to fit exactly what you would expect from a movie version of events (he's a semi-paranoid Rain Man with pit bull tenacity) and because it strips the the SEC of any remaining fig leaf of credibility. I mean jeebus. How do they prevent anything whatsoever if they got a 19-page memo about Bernie Madoff entitled "The World's Largest Hedge Fund is a Fraud" and he still had to turn himself in three years later?
I had assumed that Markopolis was just dismissed by the SEC as some crank who maybe lost money or something, but apparently he had a regular contact there named Ed Manion, who the Globe story says "encouraged" him to pursue Madoff. The story does not specify why Manion himself did not also pursue Madoff, being, between the two of them, the one who works (still!) for the SEC.
It's too bad Markopolos seems so publicity-shy, because he should really get a little something for the effort. A fat book deal or high-paid consulting gig or something. He started putting the case together in 1999. It wasn't his fault the regulators are morons or don't care. He did what he could, and it was an awful lot. You don't even need to speak financial jargon to understand a lot of his memo. It's a pretty amazing document if you ask me.
Still, he's not good. His absolute ceiling is a #4-type starter. We need one more good pitcher to make Pelfrey our #4 and make Redding/Niese/Parnell/whoever compete for the 5th/spot positions.
One more reason to get Derek Lowe: the Mets have to play the Braves 18 times a season, and the Bravos have already signed Javier Vazquez, who has become badly underrated (did you know he struck out 200 last year?). So, if they added Lowe their rotation would be Hudson-Vazquez-Lowe-Jurrjens-Campillo. Yes, the Philles would have to deal with it, too, but the Wild Card, God forbid, is not adjusted for strength of schedule.
Thursday, January 08, 2009
Jon Niese and Bobby Parnell look like nice enough prospects, but if they're both fixtures in the 2009 rotation, it's going to be trouble. The Mets are too good in other areas, too likely to make the playoffs, to let that happen. So, more than any other team, the Mets could use a guy who is an incredibly safe bet for 200 innings of sub-4.00 ERA ball.
Derek Lowe is the only pitcher available who fits that bill (Tim Redding does not, no matter what MLB's subheadline writers may think). Paul DePodesta was questioned if not vilified for signing him to a 4yr/$36 million deal in the '04-'05 offseason, but that turned out to be a fantastic investment for the Dodgers.
Now it turns out the Braves are going to get in on the bidding. If the Mets end up getting outbid on Lowe by Atlanta, either Omar needs to go or the Wilpons lost more money to Bernie Madoff than they let on.