Books

Incentives

Posted in Books, Investing on September 8th, 2010 by samkoritz – Be the first to comment

From the time Bear Stearns’s subprime hedge funds had collapsed, in June 2007, the market was asking questions about the rest of Bear Stearns. Over the past decade, like every other Wall Street firm, Bear Stearns had increased the size of the bets it made with every dollar of its capital. In just the past five years, Bear Stearns’s leverage had gone from 20:1 to 40:1. Merrill Lynch’s had gone from 16:1 in 2001 to 32:1 in 2007. Morgan Stanley and Citigroup were now at 33:1, Goldman Sachs looked conservative at 25:1, but then Goldman had a gift for disguising how leveraged it actually was. To bankrupt any of these firms, all that was required was a very slight decline in the value of their assets. …

Greed on Wall Street was a given – almost an obligation. The problem was the system of incentives that channeled the greed. …

 Howie Hubler lost more money than any single trader in the history of Wall Street – and yet he was permitted to keep the tens of millions of dollars he made. The CEOs of every major Wall Street firm were also on the wrong end of the gamble. All of them, without exception, either ran their public corporations into bankruptcy or were saved from bankruptcy by the US government. They all got rich, too. …

 “There’s no limit to the risk in the market…. A bank with a market capitalization of one billion dollars might have on trillion dollars’ worth of credit default swaps outstanding. No one knows how many there are! And no one knows where they are!”

The Big ShortMichael Lewis

Too Much Bowing II

Posted in Antiwar, Books on September 8th, 2007 by samkoritz – Be the first to comment

I just finished Brad Warner’s Sit Down & Shut Up. I enjoyed it, as I did Warner’s first book, Harcore Zen. Warner is a Zen Buddhist monk who played bass in a hardcore punk band in the early ’80s, then released 5 neo-psych solo albums, moved to Japan, and worked in the Japanese monster movie industry. Now he’s living & working in LA, & teaching zazen, Zen meditation.

Warner is a Zen Buddhist monk who played bass in a hardcore punk band in the early ’80s, then released 5 neo-psych solo albums, moved to Japan, and worked in the Japanese monster movie industry. Now he’s living & working in LA, & teaching zazen, Zen meditation.

I do have some criticism. Warner likes to make blanket statements (that are wrong or only partially right): Buddhists believe such-and-such, people always suffer when they harm others, every time someone gets angry it’s because he enjoys getting angry, individual people don’t really exist, etc. He also claims repeatedly that Zen meditation leads to increased insight (though not Enlightenment). There’s probably something to this, but in a limited way. When I read Shoes Outside the Door, about the abuse of power by the leaders of the San Francisco Zen Center, it seemed to me that the champion meditators had less than average ability to detect and resist predatory behavior. Roshi Richard Baker’s sex and money controversies were followed by the weird behavior of his successor, Reb Anderson. Police caught him waving an unregistered handgun in a housing project. The gun had killed a man in Golden Gate Park a few years earlier. Anderson claimed to have found the gun near the corpse, taken the gun from the crime-scene, never reported the corpse, & carried the gun around with him for years. The police eventually “lost” their records regarding the politically-connected sect’s leader.

Baker was chosen to be the SFZC’s leader by the Center’s founder, Shunryu Suzuki (author of the influential Zen Mind, Beginner’s Mind). I read Crooked Cucumber, a biography of Suzuki, written by David Chadwick. Though Chadwick defends the SFZC and Baker, and admired and, it seems, loved Suzuki, he’s admirably honest. We learn, for example, that Suzuki allowed Baker to inaccurately describe him, in print, as an opponent of Japan’s aggression during WWII. Suzuki’s teacher is described as a hard-drinking philanderer who engaged in what would currently be considered illegal child abuse.

And speaking of WWII, there’s Zen at War. Turns out that a whole organization full of meditators didn’t include even a visible minority of war opponents, and, on the contrary, actively supported military aggression.

As someone (Suzuki’s wife, I think) said in Cucumber, Suzuki supported the war but so did all of Japanese society. But that’s just the point, the Zennists did no better than anyone else. Bringing it up-to-date (and not to pick on Warner, who seems like a sincere guy, and who’s probably an excellent meditation instructor), look at Warner’s most recent Suicide Girls column, “Buddhism Through Violence.” Warner argues that Buddhists should reconsider their pacifism, which is fine, but also their opposition to Bush wars. He seems to be oblivious to the difference between aggression and defense, writing, for example, that Buddhists “need a big bully on our side.” It may (or may not, considering retaliation) be useful to have a bully’s support but it’s unethical to support a bully.

Also, I recently read 4-Hour Workweek (previously mentioned here). Some of Timothy Ferris’s advice seems ethically questionable but the book strikes me as a good step-by-step primer if you’re interested in setting up an online sales company, test-marketing online cheaply before investing much in the project, & then offshoring and outsourcing the business, & then offshoring your life.

Darwinian Politics

Posted in Antiwar, Books, Science on July 23rd, 2007 by samkoritz – Be the first to comment

Ever wonder why people are not entirely rational about economics & politics?

Bryan Caplan has written about how the average person’s beliefs about economics differ from the beliefs of people who’ve studied the subject. The differences are not random. To paraphrase:

The Survey of Americans and Economists on the Economy finds that, compared to the experts, laymen are much more skeptical of markets, especially international and labor markets, and much more pessimistic about the past, present, and future of the economy. When laymen see business conspiracies, economists see supply-and-demand. When laymen see ruinous competition from foreigners, economists see the wonder of comparative advantage. When laymen see dangerous downsizing, economists see wealth-enhancing reallocation of labor. When laymen see decline, economists see progress.

Paul H. Rubin explains (I’m paraphrasing from “‘Folk’ International Economics“):

Part of the reason for the relative success of protectionist arguments has to do with evolution. We have certain tendencies and beliefs that may have been useful in evolutionary times, but they are now counterproductive. This evolved belief easily translates into a fear of loss of jobs.

The human evolutionary environment was approximately “zero sum” — resources and incomes were fixed, and more for one person meant less for another.

If Mexicans are finding jobs in the United States, then it “must” be that American citizens are finding fewer jobs because, in a zero sum world, the number of jobs is fixed. Similarly, if we are importing goods from China, or outsourcing tasks to India, then the Americans who would otherwise make those goods or perform those tasks must be losing jobs.

Our ancestors were quite warlike. Our close relatives, chimpanzees, engage in genocidal behavior when possible. Humans have evolved to be adapted to this level of warfare. This high level of conflict has led to strong, evolved, in-group and out-group preferences.

Those individuals who lose from international competition can harness innate beliefs to create obstacles to competition, such as by keeping out products made by foreigners (in the case of tariffs) or keeping out the foreigners themselves (in the case of immigration). Anti-foreigner arguments resonate because they fit into evolved mental compartments.

Understanding economics is like reading, which must be taught, not like speech, which we acquire naturally with no instruction.

I recently read Rubin’s Darwinian Politics. I think he over-reached a little in trying to make policy recommendations but otherwise made a strong argument, with page after page of references to scientific studies.

Bryan Caplan has a similarly-themed book, The Myth of the Rational Voter, but I haven’t gotten around to reading it yet, so can’t comment. Yet.

Everything You Know is Wrong

Posted in Books on July 20th, 2007 by samkoritz – Be the first to comment

The Only Three Questions That Count: Investing by Knowing What Others Don’t, by Kenneth L. Fisher

Worth reading if you’re interested in stock market investing. Fisher researches widely held beliefs regarding what moves market prices, & finds that most of them are bunk, or at least not exploitable.

GTD

Posted in Books, Science on June 11th, 2007 by samkoritz – Be the first to comment

I commented on Annalee Newitz’s “Stop Getting Things Done.” An example of an intelligent person (AN) using “folk economics,” as far as I can tell. If AN does understand comparative advantage & still doesn’t want to outsource/offshore her life she should explain why — that would make for a more interesting column.

Us & Them

Posted in Books on May 3rd, 2007 by samkoritz – Be the first to comment

I’m removing another good book from my ProgressDaily list: David Berreby’s Us and Them: Understanding Your Tribal Mind. Buy it, read it — I’m just removing it because I want a small number of the most relevant titles only.

And Survival of the Prettiest: The Science of Beauty. Ditto.

And Influence: The Psychology of Persuasion.

And The Little Book That Beats the Market.

Pruning the Books

Posted in Books on April 20th, 2007 by samkoritz – Be the first to comment

I’m pulling a few books off of the Progress Daily Books list. They’re good books – check’em out — but I want to limit the list to the few most relevant titles.

Goodbye to:

1491

Happiness

Satisfaction

A Whole New Mind

Fooled By Randomness

The War of the World

The Future of Freedom

What’s Going on in There?

The Age of Spiritual Machines

The End of History and the Last Man

 

A Spot of Bother

Posted in Books, Music, Poetry on October 5th, 2006 by samkoritz – Be the first to comment

 

 

I’ve been reading some fiction, which is fairly unusual for me. I just finished Mark Haddon’s A Spot of Bother. JR recommended Haddon’s The Curious Incident of the Dog in the Night-Time, about an autistic savant, & I really enjoyed that so I gave ASoB a try. I liked Curious Incident better; unlike ASoB it had a single narrative perspective & a mystery to drive the plot. ASoB had its moments, though, & without spoiling the plot too much I can say that it’s a celebration of love, marriage, family (even dysfunctional family), & community. (It would make a good movie.) That might seem conservative but one of the couples portrayed is gay & the only religious characters are unflatteringly portrayed. 

Haddon has a great website — http://www.markhaddon.com – divided into two sections, Art & Life. Which reminds me of a song that proves that not everything can be googled. I think it’s called “Art & Life,” from defunct SF band The Furies’ album Fun Around the World. The lyrics are not Google-able. Something like:

What’s the difference between art & life?
One’s full of struggle & one’s full of strife.

Art has life; they call it passion.
Life has art; they call it fashion.

Sometimes it’s really hard to tell them apart
Because there is no difference between life & art.

Let’s bury Andy Warhol & get on with it.

Investment Valuation

Posted in Books on October 2nd, 2006 by samkoritz – Be the first to comment

 

I just finished the most comprehensive investment analysis book I’ve seen, Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, by Aswath Damodaran.  

Damodaran’s website is a treasure trove of investment analysis info as well: http://pages.stern.nyu.edu/~adamodar/. They could’ve used him at LTCM.

—-

Also, Parents & Income

Memoirs

Posted in Books, Music, The Old Days on September 29th, 2006 by samkoritz – Be the first to comment

 

I just finished reading Lisa Carver’s Drugs Are Nice: A Post-Punk Memoir. If the names Costes, GG Allin, Smog, & Suckdog mean anything to you, it’s worth reading, otherwise probably not. There seems to be a trend of 30-something women writing about their youthful sex, drugs, & music/writing shenanigans. The best of these that I’ve read, imo, is Michelle Tea’s Chelsea Whistle: blue collar Massachusetts, divorced parents, weird stepdad, lesbianism, prostitution, San Francisco, spoken word, creative writing. Drugs Are Nice: “white trash” New Hampshire, divorced parents, criminal dad, performance art, Paris, music, San Francisco, prostitution, drugs, s&m, marriage, divorce, motherhood. Beth Lisick’s Everybody in the Pool: intact family, suburban California, attempted bi-sexuality, San Francisco, M. Tea’s spoken word group, creative writing, music, marriage, motherhood.