Something puzzling

about the real estate bubble narrative:
I also am unsure how Shiller’s concept of real estate price bubbles in “superstar” cities is to be reconciled with the fact that the problems with mortgage defaults initially proved to be most serious in rustbelt areas where there had been very little real estate price inflation.
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via: Econbrowser: Report [...]

You can add LOL Cats to your RSS feeds!

I haven’t tried it you, but I will. 
(scroll to the bottom to add a RSS feed)
LOL Feeds
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We are without water for a while,

so I am feeling a bit grumpy and sweaty. A nontrivial portion of our city is now without water pressure.
One of the weird things about science is how much it depends on being able to convince others you are correct. The scientific method is powerful because it is a good way to convince [...]

Good quote

“Its not even the number of deviations any more”, said one trader, “its that the deviations aren’t standard”
via: RGE – Reverse engineering financial engineering
Here’s the conundrum in economics: looking at historical data to ‘test’ models is tricky, because things are too complex.  And no model is perfect, anyway.  Instead a model is a metaphor, a [...]

Lyrics that tickled my fancy

‘Love is like a bottle of gin, but a bottle of gin is not like love.’
from the song : Love is like a bottle of gin by Magnetic Fields (link to google music).
The more I listen to the CDs in that album, the more I like it. The delivery is great.
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I forgot

what a great blog Good Math, Bad Math really is.
Good Math, Bad Math : The Sierpinski Gasket by Affine
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The power of prices

Max Roach, a Founder of Modern Jazz, Dies at 83 – New York Times
I listened to an interview with Max Roach this afternoon on NPR. His hypothesis about how jazz musicians became such good players was based on taxes.  In the 40s, nightclubs paid extra taxes if people danced, or there we singers, or the [...]

These people all need to read Fooled by Randomness

Proof M.B.A.s Are Overrated, by 20 People Who Are Smarter and Richer than Your Professors – Inside CRM
Fooled by Randomness – Wikipedia, the free encyclopedia

An interesting sounding paper

Here is the abstract:
In two laboratory experiments, we examine whether norms associated with one’s social identity affect time and risk preferences. When we make ethnic identity salient to Asian-American subjects, they make more patient choices. When we make race salient to black subjects, non-immigrant blacks (but not immigrant blacks) make more risk-averse choices. Making gender [...]

No risk, no return

One of the basic ideas in finance is ‘no free lunch’—you don’t get something for nothing.  All those people making high returns by investing in complicated bonds were taking the risk of the defaults.  Now it’s happening,  but they did earn money for taking the risk.  The interesting question is:  Will financial contagion mean that [...]