Friday Highlights

Good morning.

  1. East coast academia where diversity means people with differing backgrounds submit to conformity.
  2. Imagine publishing in academia redux.
  3. Occupy Oakland and the consequences of rioting for a populist movement.
  4. My daughter liked this clip.
  5. And a very clever two y/old.
  6. Cain’s problems viewed from the middle.
  7. Obamacare and Mr Obama’s compliance.
  8. A Berber’s thoughts on the Arab Spring.
  9. Mr Corzine and the no-skin in the game problem.

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One comment

  1. Boonton says:

    9.Mr Corzine and the no-skin in the game problem

    He probably had some skin in the game but in the end that’s not really the problem. The problem is that the financial industry defines talent by misreading probability.

    If I took your mortgage payment and bet it on black at Atlantic City and lost it, you’d probably send me to jail. If I won, though, you might forgive me if I share some of the gain with you. But win or loose its a stupid thing to do. The financial industry, though, views the winners on ‘stupid bets’ as smart and the losers as dumb when in fact the laws of probability say both bets are equally wise (or unwise).

    Since we have a consistent bias against an efficient outcome, the best bet here is regulation. Namely the regulation that segregates clients funds, which this firm may have violated, is one good thing. Another important regulation which has been hampered has been restricting the ability of financial firms to write ‘insurance’ against default unless they have enough capital to actually pay off the policy if default happens. If you’re going to collect $5B as a ‘fee’ to ‘insure’ against Greece defaulting on $50B of debt, then you should be able to show you can produce $50B should Greece actually default!