Rand & Business
A site called "DeadState" -- I am not familiar with it before today -- has a post claiming that Sears was destroyed because of a CEO who decided to run it according to what he saw as Ayn Rand's principles. I'm not sure they prove their case, though. It sounds like it may be at least as true that trying to run a real business according to Wall Street principles doesn't work: Wall Street may be good at obtaining investment for businesses, and it is certainly good at digesting and re-investing resources tied up in failing businesses. It may not be very good at the long-term outlook required to sustain a successful business.
In 1977, 95 percent of distributions to shareholders came in the form of dividend payments. Today, more than half of the cash returned to shareholders of S&P 500 companies comes from buybacks instead of dividends.Sounds like a decision that focused on the stock position rather than the stores -- killing the goose that lays the golden egg, as it were.
Fortune magazine, in a story about what happens when Wall Street jumps into the retail business, reports that under Lampert, Sears has gone on a stock buyback spree. Between 2005 and 2011, he took what was once the company’s strong cash flow and spent $6.1 billion of it on stock buybacks. During the same time period, only $3.6 billion was spent at Sears on capital improvements. Lampert told investors that upgrades and new stores were not an “efficient” use of capital.
He Was A Man You Ought To Have Known
In the last good movie but one, A Knight's Tale, a poor herald announces one of the competitors to the joust.
He, said to be the greatest philosopher of his age, wrote this:
Most likely he wasn't the greatest philosopher of that age, which produced many great names. But what have you done?
My Lord, the Count Adehmar, Son of Phillip DeVitry, son of Gilles... er... Master of the Free Companies, defender of his enormous manhood, a shining example of chivalry and champagne.But the father of the man he announced was a real man, one worthy of your knowledge.
He, said to be the greatest philosopher of his age, wrote this:
Most likely he wasn't the greatest philosopher of that age, which produced many great names. But what have you done?
Biography and Philosophy, or, Action and Thought
Is it important to consider the facts of the life of a man, or just what he said and did? Or perhaps, just what he did: Facta non verba, as Eric Blair sometimes phrases it?
The question is raised in reference to Derrida, but with a passing reference to Aristotle, whom Heidegger described thus: "He was born. He thought. He died." The point is that what he thought is divorced from time and space, and to a large degree it really is: we can evaluate him and his thoughts today, and we will in doing so find them highly relevant to our very different world.
Yet that is not the only model from the ancient world. Socrates is the clear counterexample. Plato took pains to establish that he had credentials to speak on matters of virtue such as courage, as he does in the Laches. Hannah Arendt, in the last century, singled Socrates out for special praise among philosophers because he was a man who not only contemplated but did.
What do you think?
The question is raised in reference to Derrida, but with a passing reference to Aristotle, whom Heidegger described thus: "He was born. He thought. He died." The point is that what he thought is divorced from time and space, and to a large degree it really is: we can evaluate him and his thoughts today, and we will in doing so find them highly relevant to our very different world.
Yet that is not the only model from the ancient world. Socrates is the clear counterexample. Plato took pains to establish that he had credentials to speak on matters of virtue such as courage, as he does in the Laches. Hannah Arendt, in the last century, singled Socrates out for special praise among philosophers because he was a man who not only contemplated but did.
What do you think?
Questions no one should be asking
If Detroit files the inevitable bankruptcy, how in the world will it ever get back into a position to borrow massively again in the future?
Its population has shrunk from 2 million to 700,000. It has no economic base. Its own inhabitants are burning it down much faster than it could be rebuilt even assuming someone were trying to rebuild it. Detroit's remaining inhabitants are refugees who just don't know it yet.
Its population has shrunk from 2 million to 700,000. It has no economic base. Its own inhabitants are burning it down much faster than it could be rebuilt even assuming someone were trying to rebuild it. Detroit's remaining inhabitants are refugees who just don't know it yet.
"I still don't understand what Trayvon Martin was supposed to do."
The Crimson Reach has a suggestion: don't punch a stranger on the street. It's not necessary to run away. Stand your ground, if you like. Call 911 with that phone you've been chattering into all evening. Just don't punch the stranger, straddle him, and pound his head into the pavement. Almost anything but that, and your chances of surviving a human contact in Racist America are excellent.
Even if you suspect he's a gay man trolling for partners, and that makes you mad.
Even if you suspect he's a gay man trolling for partners, and that makes you mad.
Through the looking glass
The President asserts executive authority he doesn't have to alter the terms of a bill that Congress passed, and that he himself signed into law. The House proposes a new bill to achieve exactly the same alteration (this time through incontestably legal means), and what does the President do?
Obviously, he threatens to veto it.
The bill, of course, is Obamacare (hey, even Harry Reid calls it that now), while the amendatory bill renders into constitutionally acceptable form the President's illegal unilateral attempt to delay the employer mandate for a year.
Nor is that all the House is up to today: it's also considering a companion bill to delay the individual mandate for the same period. House Democrats are working furiously to figure out how to avoid the consequences of voting either way on either bill.
Obviously, he threatens to veto it.
The bill, of course, is Obamacare (hey, even Harry Reid calls it that now), while the amendatory bill renders into constitutionally acceptable form the President's illegal unilateral attempt to delay the employer mandate for a year.
Nor is that all the House is up to today: it's also considering a companion bill to delay the individual mandate for the same period. House Democrats are working furiously to figure out how to avoid the consequences of voting either way on either bill.
Fantasy football on trial
The trial of the year for finance nerds isn't Zimmerman, it's the SEC vs. Fabrice Tourre, the young ex-Goldman Sachs rising star who had the misfortune to have used metaphors in emails to his girlfriend that were as vivid and comprehensible as the subject matter of his financial work was dull and impenetrable.
Before the Great Crash, Goldman not only traded in mortgage-backed securities but in investment vehicles called "synthetic" securities. The securities were called "collateralized debt obligations" or CDOs, an unhelpful name that actually refers to nothing more complicated than a grab-bag of jillions of ordinary mortgages. Packaging mortgages together like this is called "securitization," and it has the advantage of converting a pile of unique, individual, hard-to-trade mortgages into something homogeneous that can be split into standardized pieces that are more easily priced and sold. As this helpful site explains, it's like turning irregular piles of meat and mystery bits into standardized link sausages.
So what's a "synthetic" CDO? It bears the same relationship to an actual CDO that fantasy football bears to actual football players. It's a bet on the performance of a list of real CDOs. The gamblers don't buy the CDOs themselves; they simply bet on whether the whole list will increase or decrease in value. Like every bet, it requires matching up two willing participants: one to bet on one result, and one to bet on the opposite.
Tourre's alleged crime (actual a civil violation, which exposes him to fines and sanctions but not jail time) was to ask a hedge-fund trader to participate in the selection of the mortgage securities on which the synthetic-CDO participants would place their bets, and then fail to disclose the trader's role in the prospectus given to potential bettors. To make matters worse, the trader then placed his own bet on the synthetic CDO--gambling that they would decrease in value--and won big time. (Goldman itself bet on an increase in value and lost.)
It's never a good idea to fail to disclose the role of anyone involved in a deal, but I'm having real difficulty with the harm-causation theory here. I think the idea is that the trader was particularly good at spotting which mortgages were most likely to fail, which gave him an unfair advantage; other bettors might have been unwilling to place their own bets--or might have insisted on betting the opposite way--if they had known of his involvement and his bearish stance. On the other hand, to use the fantasy-football analogy, this was like asking a skillful scout or industry analyst to choose fantasy league players, and then allowing him to bet that the team would end up in the cellar. Is that unfair to other bettors? Should the other bettors be told who chose the players to include in the league, and that he intended to bet that those players would blow their season? It's not as though he has any power to affect their games. It's only a question of whether he's better than most at guessing how they'll play. Perhaps to be more precise, it's a worry that he has inside knowledge of which players have been hiding an incipient knee injury or drug problem.
If you're having trouble following this scenario, you're not alone. Apparently the judge, jury, lawyers, and witnesses are confused, too. The SEC started out with a reasonably helpful analogy to a ship that takes on water and then sinks. The equity investors are in the bilges. Mezzanine investors are in steerage. First-class passengers have the nice cabins with portholes. When the water pours in, equity is submerged first, but if things get bad enough they are soon joined in their misery by mezzanine investors and even the masters of the universe sunning in their deck chairs. Eventually the whole ship plunges to Davy Jones's Locker. But then the judge, trying to be helpful, butted in with the opposite aquatic metaphor, a "waterfall." In complex financial deals, the "waterfall" or "cascade" refers to the detailed directions for the application of income streams. Favored investors get the first dollars, followed by junior debt, and equity gets whatever is left over. This, of course, is the exact reverse of the doomed-ship scenario. In the midst of this confusion, the judge reportedly asked why the prosecution's first witness had to go over the 90 minutes originally slated for his testimony, especially in view of the pole-axed expressions of the jurors.
I'm no litigation ace--much more of a back-office toiler--but even I know it's a bad idea to bore the beans out of the trier of fact. One way or another, the prosecution and the defense had better find a way to connect all this law and evidence to something the jurors can evaluate in their guts. The prosecution starts with an advantage, of course: they can just keep repeating "rich people bad." I'm guessing that the defense's best hope is for the presence of some sophisticated gamblers in the jury box.
H/t Rhymes with Cars & Girls
Before the Great Crash, Goldman not only traded in mortgage-backed securities but in investment vehicles called "synthetic" securities. The securities were called "collateralized debt obligations" or CDOs, an unhelpful name that actually refers to nothing more complicated than a grab-bag of jillions of ordinary mortgages. Packaging mortgages together like this is called "securitization," and it has the advantage of converting a pile of unique, individual, hard-to-trade mortgages into something homogeneous that can be split into standardized pieces that are more easily priced and sold. As this helpful site explains, it's like turning irregular piles of meat and mystery bits into standardized link sausages.
So what's a "synthetic" CDO? It bears the same relationship to an actual CDO that fantasy football bears to actual football players. It's a bet on the performance of a list of real CDOs. The gamblers don't buy the CDOs themselves; they simply bet on whether the whole list will increase or decrease in value. Like every bet, it requires matching up two willing participants: one to bet on one result, and one to bet on the opposite.
Tourre's alleged crime (actual a civil violation, which exposes him to fines and sanctions but not jail time) was to ask a hedge-fund trader to participate in the selection of the mortgage securities on which the synthetic-CDO participants would place their bets, and then fail to disclose the trader's role in the prospectus given to potential bettors. To make matters worse, the trader then placed his own bet on the synthetic CDO--gambling that they would decrease in value--and won big time. (Goldman itself bet on an increase in value and lost.)
It's never a good idea to fail to disclose the role of anyone involved in a deal, but I'm having real difficulty with the harm-causation theory here. I think the idea is that the trader was particularly good at spotting which mortgages were most likely to fail, which gave him an unfair advantage; other bettors might have been unwilling to place their own bets--or might have insisted on betting the opposite way--if they had known of his involvement and his bearish stance. On the other hand, to use the fantasy-football analogy, this was like asking a skillful scout or industry analyst to choose fantasy league players, and then allowing him to bet that the team would end up in the cellar. Is that unfair to other bettors? Should the other bettors be told who chose the players to include in the league, and that he intended to bet that those players would blow their season? It's not as though he has any power to affect their games. It's only a question of whether he's better than most at guessing how they'll play. Perhaps to be more precise, it's a worry that he has inside knowledge of which players have been hiding an incipient knee injury or drug problem.
If you're having trouble following this scenario, you're not alone. Apparently the judge, jury, lawyers, and witnesses are confused, too. The SEC started out with a reasonably helpful analogy to a ship that takes on water and then sinks. The equity investors are in the bilges. Mezzanine investors are in steerage. First-class passengers have the nice cabins with portholes. When the water pours in, equity is submerged first, but if things get bad enough they are soon joined in their misery by mezzanine investors and even the masters of the universe sunning in their deck chairs. Eventually the whole ship plunges to Davy Jones's Locker. But then the judge, trying to be helpful, butted in with the opposite aquatic metaphor, a "waterfall." In complex financial deals, the "waterfall" or "cascade" refers to the detailed directions for the application of income streams. Favored investors get the first dollars, followed by junior debt, and equity gets whatever is left over. This, of course, is the exact reverse of the doomed-ship scenario. In the midst of this confusion, the judge reportedly asked why the prosecution's first witness had to go over the 90 minutes originally slated for his testimony, especially in view of the pole-axed expressions of the jurors.
I'm no litigation ace--much more of a back-office toiler--but even I know it's a bad idea to bore the beans out of the trier of fact. One way or another, the prosecution and the defense had better find a way to connect all this law and evidence to something the jurors can evaluate in their guts. The prosecution starts with an advantage, of course: they can just keep repeating "rich people bad." I'm guessing that the defense's best hope is for the presence of some sophisticated gamblers in the jury box.
H/t Rhymes with Cars & Girls
Fear The Gray Chili
I was amused to see the Daily Caller invoking the lair of the chili pepper. RateMyProfessors is a social media site that allows students to post comments and ratings on professors and teaching assistants at their various colleges. One of the ratings students apparently give is whether the professor is hot or not. The hot ones get red chili peppers by their ratings.
It's also worth viewing the videos at the Professors Strike Back page. Some of them are humorless, but not all.
UPDATE: "I don't like to think of myself as cruel and mean..."
It's also worth viewing the videos at the Professors Strike Back page. Some of them are humorless, but not all.
UPDATE: "I don't like to think of myself as cruel and mean..."
Get More:
www.mtvu.com
Math is harrrrrd
An amusing story about outrage based in math confusion. How can North Carolina be 39th in wealth and 12th in child poverty? Ummmmm. . . .
Perhaps even more interesting to me is the dim woman's initial question. "How can it be legal to have so much poverty in such a wealthy state?" asks the financially comfortable commentator flying home to her comfortable home and job. Oh, I don't know: the same way it's legal for you not to have given 90% of your income to those poor kids? The same reason Massachusetts and Connecticut (fourth and fifth in income and famously liberal) don't voluntarily send foreign aid to North Carolina?
It's a strange way to think about "poverty" and "legality." It's always someone else's responsibility to help. Bad, politically incorrect someone elses! What can account for them?
Perhaps even more interesting to me is the dim woman's initial question. "How can it be legal to have so much poverty in such a wealthy state?" asks the financially comfortable commentator flying home to her comfortable home and job. Oh, I don't know: the same way it's legal for you not to have given 90% of your income to those poor kids? The same reason Massachusetts and Connecticut (fourth and fifth in income and famously liberal) don't voluntarily send foreign aid to North Carolina?
It's a strange way to think about "poverty" and "legality." It's always someone else's responsibility to help. Bad, politically incorrect someone elses! What can account for them?
'Swords Against Death!', Or, 'Humanities Against the Academy!'
I don't know if they read Fritz Leiber in the English Department, but he was one of the better writers of the last century -- if you like writers who spin a good tale, have deep roots in classical and romantic material, and can build worlds and images that you will not forget. Perhaps it is better if they don't, the Wall Street Journal suggests.
Every other academic subject requires specialized knowledge and a mastery of skills and methods. Literature requires only that you be human. It does not have to be taught any more than dreaming has to be taught. Why does Hector's infant son, Astyanax, cry when he sees his father put on his helmet? All you need to understand that is a heart.Why does Hector's son cry?
So you see, I am not making a brief against reading the classics of Western literature. Far from it.
The Problem With Rewarding Novelty in Scholarship
If you want to get hired or tenure, you have to get published. If you want to get published, you need to say something novel. Thus:
No art historian has ever put forward an alchemical interpretation to the representation of St George slaying the dragon...Indeed, I imagine not.
Less research is needed
In which a health blogger gets dangerously close to putting her finger on what's wrong with climate science, but pulls back and zings several sacred cows in health research instead:
On my first day in (laboratory) research, I was told that if there is a genuine and important phenomenon to be detected, it will become evident after taking no more than six readings from the instrument. If after ten readings, my supervisor warned, your data have not reached statistical significance, you should [a] ask a different question; [b] design a radically different study; or [c] change the assumptions on which your hypothesis was based.H/t Rocket Science.
The internal nose
Saturday mornings bring the Not Exactly Rocket Science linkfest. Some good ones today. A kidney researcher complained to her advisor about some bad data she was getting from a kidney gene experiment. It almost seemed as if there were scent receptors in the kidney.
A breakdown in one kind of scent receptor may explain why some people have recurrent sinus infections that don't respond to the usual surgical fix.
He kind of looked at me for a second, and he was like "Scent receptors in the kidney. That would be cool though, right?" At that point we both still thought it was one of those crazy, stupid ideas you laugh about later.It turns out that we have scent/taste receptors all over our bodies, in the kidney, in the bronchial tubes, in the sinuses, and in fact anywhere it would be helpful to switch a process off or on upon the detection of a particular molecule. It's possible that scent receptors started in our ancestors' internal organs and migrated to the external sensory organs fairly late in the evolutionary process.
A breakdown in one kind of scent receptor may explain why some people have recurrent sinus infections that don't respond to the usual surgical fix.
An Introduction
Some of you know me as the commenter Tom, and please feel free to continue calling me that. Grim invited me to post here as part of working on two projects in particular which might be of interest to the Hall.
The first is solving The Knowledge Problem: We have very short lives, and many demands on our time, both duties and desires; we must make vital decisions about how to spend those lives; we need reliable information to make good decisions. How can we sift through the oceans of conflicting information out there to find the best information for the decisions we need to make? How can we sort reliable information from un? How can we focus information to solve the riddles we face? And how can we do all this while giving life's many other claims their due as well?
The second project is gaining a fundamental understanding of Aristotle, in which Grim has generously offered to act as tutor. Why Aristotle? Over the last six or eight years I have become convinced that it is impossible to understand the history of the West without at least a basic understanding of The Philosopher's ideas. After Aristotle, the intellectual history of the West is filled with two millennia of attempts to understand, define, modify, challenge, support, extend, apply, and refute his ideas. If we compare intellectual history to a dinner party, not knowing Aristotle leaves you out of the conversation.
I look forward to being part of the crew here, and thanks for inviting me, Grim.
The first is solving The Knowledge Problem: We have very short lives, and many demands on our time, both duties and desires; we must make vital decisions about how to spend those lives; we need reliable information to make good decisions. How can we sift through the oceans of conflicting information out there to find the best information for the decisions we need to make? How can we sort reliable information from un? How can we focus information to solve the riddles we face? And how can we do all this while giving life's many other claims their due as well?
The second project is gaining a fundamental understanding of Aristotle, in which Grim has generously offered to act as tutor. Why Aristotle? Over the last six or eight years I have become convinced that it is impossible to understand the history of the West without at least a basic understanding of The Philosopher's ideas. After Aristotle, the intellectual history of the West is filled with two millennia of attempts to understand, define, modify, challenge, support, extend, apply, and refute his ideas. If we compare intellectual history to a dinner party, not knowing Aristotle leaves you out of the conversation.
I look forward to being part of the crew here, and thanks for inviting me, Grim.
Sum Ting Wong
Apparently the San Francisco local TV news anchors will read anything they see on the teleprompter.
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