jplewicke

Eliezer Yudkowsky also suggested this, at least regarding this African myth: http://robinhanson.typepad.com/overcomingbias/2009/02/an-afr... .

I'm a little unsure about how much is the myths and how much is just survivorship bias. A lot of old gruesome European fairy tales stopped getting told after the rise of liberalism and the free market, so it may just be that the myths reflect the current status of society.

I'm not sure about field-wide RSS feeds, but SSRN does have author-specific RSS feeds like http://www.ssrn.com/rss/authors/1997/0701/998.rss for Eugene Fama.

So that the world will have more Perl hackers: http://www.csse.monash.edu.au/~damian/papers/HTML/Perligata.... .

I haven't used it myself, but you may want to take a look at Mike Perham's Phat. It modifies Rails to use asynchronous I/O and several cooperating Fibers per-thread/process to speed up Rails significantly.

http://www.mikeperham.com/2010/04/03/introducing-phat-an-asy...

http://news.ycombinator.com/item?id=1240609

It

http://seekingalpha.com/ syndicates a whole bunch of financial blogs. They don't have feeds for individual contributors and I'm not sure of the quality of their topics feeds, but if you crawl carefully you may be able to find your way to the original blogs of many of their contributors.

Sam Israel - pretended to jump off a bridge Markus Shrenker - pretended he'd crashed his airplane Marc Dreier Allen Stanford Arthur Nadel Nicholas Cosmo Joseph Forte

I could probably dredge up a few more -- it seemed like there was one every two weeks from July 2008 - Feb 2009, so these are just the few who were based in the US and who have Wikipedia articles.

While the financial reform is mainly being marketed as a fix for systemic risk, there's also a fairly strong contingent of people who want it to address various consumer protection issues such as predatory lending, failure to disclose fess, etc.(Mike Konczal has been following this carefully at http://rortybomb.wordpress.com/ ). While this effort is stalling, some of their suggestions will still probably make it into the bill. Basically, the politicians want to be in a place where they can say that only "the very rich" are in danger of getting ripped off by hedge fund scams.

The challenge here is that all issuance of securities is lumped into the same category of speculative investment by regulators. This might actually be a good time to try to break off a special category for investing in startups that is separate from the normal "accredited investor" requirements, perhaps by capping the amount anyone can buy as a percent of income(10%?) or assets(5%?). Since the main argument for these things is that each individual investment is too risky on its own, adding this sort of requirement for mandatory diversification might be good enough to get a regulatory carve-out for startups.

Please note that I personally oppose nearly all restrictions of these sorts -- I'm just trying to present the arguments of the regulators and to advance some plausible things to lobby for. It's worth keeping in the back of your head that if publicly-traded common stock was invented today as a novel financial instrument, it would be judged by regulators to have such an idiosyncratic cash flow profile that only financial institutions would be allowed to invest in it.

I think it's most likely an attempt to cut down on fraudulent hedge funds. Currently, having "accredited investor" status is sufficient and usually necessary to invest in hedge funds, prvate equity funds, and startups. During the dénouement of the financial crisis, many mini-Madoffs were discovered, usually in the $5-200 million range. Most of these were pyramid schemes dressed up as hedge funds, but a few were fraudulent startups as well.

I think the main reason they're changing the definition of "accredited investor" is because it also affects who can invest in hedge funds, not because they're trying to affect startups per se. This is probably classic "unintended consequences."

Thanks for pointing this out. Our problem now is that even with reserve requirements, banks can use securitization to expand the money supply infinitely: http://arxiv.org/abs/0904.1426 . Reserve requirement aren't normally the binding constraints on banks, but they might have helped prevent some pathological situations in the past. The rise of shadow banking has shown that they are no longer a sufficient constraint.

There are two different types of requirements that banks have to maintain: capital requirements and reserve requirements. They are very different things, and reserve requirements aren't the important or binding one.

Capital requirements mandate how many assets banks must have relative to their liabilities. If a bank has $100,000 in deposits(=liabilities), their capital requirements mean they must have around $105,000 in assets (bonds, mortgages, etc.). There are also additional requirements about how much must be held in cash equivalents(T-bills, etc.). If a bank becomes too leveraged, or its assets decline sufficiently in value, then the FDIC takes the bank over.

Reserve requirements relate to how much of one kind of asset banks must have relative to their liabilities -- "bank reserves". "Bank reserves" are a special kind of currency issued by the Fed that only are used for accounting between the Fed and banks. Banks that are short of reserves overnight(say, because they got a bunch of deposits that day), must borrow them from other banks that have too many to maintain their reserve requirements.

Like Bernanke said, this overnight borrowing was a major issue during the crisis. Since any bank that was borrowing was at risk for going bankrupt overnight, there was immense counterparty risk generated by what was supposed to be payment clearing mechanism. The Fed wants to move towards having banks borrow from them overnight, instead of from other banks.

http://en.wikipedia.org/wiki/Federal_funds , http://en.wikipedia.org/wiki/Bank_reserves , http://en.wikipedia.org/wiki/Excess_reserves , and http://www.winterspeak.com/2009/12/banks-are-even-more-super... may be informative.

Because time and again, things that the entire mathematical community believe to be obviously true turn out to be completely false, and vice versa. One's intuitions about what is hard and what is easy don't count for much until you've spent some time actually trying to prove it.

I think the most important thing you can do to make exercise a persistent part of your life is to make it a social activity. At this point, I don't run to stay fit. I do it because it's a great way to hang out with my friends while doing something fun. Physical activity doesn't have to be medicalized or mandatory -- it's actually much more enjoyable as an activity you share with others. Going for a comfortable run with a few friends or going rock climbing with a buddy is addictively fun -- I just wish I had the time to meet up for it daily instead of only 1-3 times per week.

If you're in Boston and thinking about starting to run, I've had a great time running with The Most Informal Running Club Ever on Saturday mornings -- http://informalrunning.com . Nothing beats getting together with 30-60 new and old friends, running by the Charles at a distance and pace of your choosing, and then hanging out with them all for a potluck breakfast.

Our culture for some reason thinks exercise is prescription medicine that should be taken in secret. It turns out that exercise is just like food -- best enjoyed in a convivial group.

If I have closed timelike curves, an oracle for the halting problem, or the ability to perform arbitrary computations on real numbers in my brain, I would certainly like to know how to use them.

I might be as well.

There wasn't any need, but they did it anyway. I'm subscribed to the Ebay feed for the Free 3.0 in the hope that more of the old style will turn up, but the supply's been running low lately. Hopefully they'll see the error of their ways and start making the older style again.

There's a component that has some weighted shortest-path algorithms: http://wiki.neo4j.org/content/Graph-algo

Please let me know if you find anything that can handle negative edge weights well while efficiently tracking shortest paths. I've found some papers with efficient implementations for frequently updated edge weights, but haven't found anything implemented or accessible.

That's definitely true. It's only a counterproof to some extremely strong versions of the EMH that assume that you can buy any possible asset or derivative. http://en.wikipedia.org/wiki/Complete_market

Buffett has been more prudent than much of the rest of the financial industry, and he should be commended for that. However, the primary business for Berkshire Hathaway is reinsurance. As such, other insurers pay them to take on the risk that claims will exceed a certain level. If New York got nuked, the reinsurance contracts that Berkshire has written with the property and casualty insurers of the area would be invoked and Berkshire would be forced to assume the bulk of their obligations.

The "money you don't have" part of the definition of leverage isn't necessarily money that you must pay back like a loan or bonds; it can also be money that you may have to pay under certain conditions. Writing naked puts and selling reinsurance is the latter.

From http://community.reinsurance.org/Data/Leverage/Und%20Lvg%202... , we can see that Berkshire's 2005 leverage ratio was 143%. That's fairly low for a reinsurance company, and Berkshire is not highly leveraged.

However, I'm still going to maintain that the marginal increase in leverage from the specific derivatives deal I mentioned was rather high. Most insurance companies have noncyclical liabilities (e.g. the mortality rate doesn't increase in recessions) and procyclical assets(e.g. stocks and bonds that fall in recessions). The sale of puts added a procyclical liability, increasing Berkshire's leverage at the margin.

When I first saw the headline, I assumed it was going to be about the CDO packing problem discussed at http://rjlipton.wordpress.com/2009/10/22/helping-wall-street... . The basic idea is that if you're buying a Collateralized Debt Obligation, you can't tell whether the people structuring the deal have intentionally given you an unfair share of bad loans, even when you know a lot about each of the loans in particular.

There's also a fairly trivial argument for the incomputability of the EMH: for each Turing machine, issue bonds that compound interest in perpetuity and pay it off if the Turing machine halts. Since the value of the bond is positive if the Turing machine halts and zero if it doesn't, in an efficient market investors will price the bonds in a way that solves the halting problem.

It's also worth noting that Buffett occasionally likes to take a turn at being the house. Between 2005 and 2008, he sold a notional $40 billion of puts on various equity indexes. This is basically a highly leveraged bet that the market would go up 5% a year for the next 15-20 years, entered into at the height of a bull market.

It also backfired on him at the height of the credit crunch. While he was smart enough to write the contracts in such a way that he didn't need to post collateral, he didn't account for the way that someone looking to hedge their counterparty risk with him would behave. When the market collapsed, the buyers of the puts proceeded to short both the equity and debt of Berkshire to protect their investment. http://crookery.blogspot.com/2008/11/valuing-large-options-i... and http://crookery.blogspot.com/2008/05/warren-buffetts-vega-ga... have some of the technical details, and http://www.portfolio.com/views/blogs/market-movers/2008/11/2... has a good general explanation of what went wrong.

Buffett may not have been in the casino all the time, but he had plenty of side bets that could have wiped him out.

China also really can't afford to lose its accumulated savings, since they'll need every saved dollar to deal with the massive demographic problems caused by the one child policy.

While the U.S. short term demographic issues will be bad when the baby boomers retire, the changes are going to be even more extreme in China. When their population ages enough, those accumulated savings will be absolutely critical: http://brontecapital.blogspot.com/2010/02/globalizing-austra... .

It should be some measure of market-relative total return, including dividend yield, etc. As far as I can tell from the paper, they don't even adjust for market-relative returns, so if a bunch of unpronounceable companies got launched at the peak of the Internet bubble and proceeded to perform exactly in-line with the market, this would still be counted as underperformance even though it is completely untradeable.

Alternatively, you can have a market where the prices fluctuates but no one ever trades. See http://en.wikipedia.org/wiki/No-trade_theorem .

I think my ideal chair would be a treadmill: http://en.wikipedia.org/wiki/Treadmill_Desk . Being able to walk a couple miles every hour would definitely increase my energy level and focus.

It's apparently very hard to scale any exchange system to exclude fraud and prevent false positives in a humane manner. AdSense, Paypal, Google Checkout, eGold, and Prosper.com have all failed to figure out how to do it reliably. You can throw fancy machine-learning techniques at the problem and isolate most of the unusual activity, but the problem then is how you filter that between fraudsters and the genuine good guys.

The basic problem is that if you're a low-margin Internet-scale transactional business, the marginal cost of distinguishing fraud from unusual non-fraud is higher than the marginal benefit from letting the transactions through. And if you're Paypal and you get the float on a bunch of locked funds without the need to following banking regulations, it's definitely not in your best interest to do.

They used to be called "Computer Literacy", which was so un-memorable that half their customers couldn't remember buying stuff there.

http://www.computeractive.co.uk/information-world-review/new...

This actually happened in Iraq after the first Gulf War: http://en.wikipedia.org/wiki/Iraqi_Swiss_dinar . Since the government was no longer printing the older currency, it was then immune to inflation by Saddam's government. The old currency appreciated against the newer, inflated currency until we deposed Saddam. It's amazing how little you need to back a currency, and how unbacked ones can be stronger than fiat currency.

Another possible reason for tuition increases is Baumol's Cost Disease ( http://en.wikipedia.org/wiki/Baumols_cost_disease ), in which the relative cost of providing a service grows rapidly because it hasn't had productivity improvements. When the amount of time needed to teach someone how to compose an essay hasn't changed since before 1960, it's not surprising that it's gotten more expensive compared to the price of microwave ovens.

Since most of our economic activities experience greater productivity growth than we've seen in education, it's not surprising that educational expenditures are growing faster than inflation. I'm hopeful that this will change as web-based education goes mainstream.

You can definitely shorten your overall foot length. I've dropped one shoe size over the past two years since starting to run semi-compettively, mostly due to stronger foot muscles pulling my arch higher.

She has bipartite sesamoids, which happens when they don't fuse together correctly. That unfortunately means that it's highly likely to happen again. On the positive side, it's something that proper orthotics or padding should let her fix.

I started to get a little plantar fasciitis from too much mileage in my racing flats and excessive downhill running, but was able to fix that by rotating my shoes more and sticking to the flats.

My girlfriend had some significant issues with an attempted transition towards Nike Frees. The higher impact on the foot gave her sesamoiditis and a stress fracture near the big toe. If you have a foot structure that's not the norm, it's worth thinking twice about these.

Rotating your shoes is one of the best ways to prevent injuries if you're trying to move towards more lightweight shoes. I try to use a combination of racing flats, Nike Free 3.0s, and trail flats, and variety really does help cut overuse injuries. If you intend to run fast on trails, you can get many of the benefits(e.g. low weight, flexibility, and a more responsive foot feel) with a trail flat like the inov-8 X-Talon 212, while avoiding a lot of the catastrophic injury possibilities.

One final note: although I love my pair of Five Fingers KSO, they smell really bad very quickly. If you get a slightly larger size, some people have luck using the Injinji toe socks with them.