Excellent Video On The Health Care Debate

I try not to post too many political things on the blog because 1) I have a mostly finance readership, and 2) It brings out the moonbats (from both sides). But sometimes you find something too good to pass up.

Recently Will Ferrell put up a video of celebrities chiming in on the health care debate. It was a masterpiece of typical Hollywood arrogance. As an aside, I often find myself upset when I hear some celebrity preaching to us normal mortals on one topic or another. Just remember - in reality, these are people whose main claim to fame is that they can convincingly read lines written by someone else (can you tell I don't care for celebrity "messages"?).

Well, here's the rejoinder to Ferrell's piece. Whichever side of the debate you fall on, you have to appreciate the level of snark that they use to lampoon the celebrities (or maybe not - but I liked it, and it's my blog).

There Shall Be Only One (Bank, that is)

It's too early for March Madness, but here's a pool you can play if you're in the financial services industry - September Madness (click here for a larger version):



HT: Barry Ritholtx

A Guide To The Economic Meltdown For Grad Students

If you're a graduate student and worried about how the recent economic turbulence effects you, fear not. The good folks at PhdComics.com have put together a handy guide (click on the picture for a larger version).

New $700 Billion Hedge Fund

Just to show that not everything in the financial markets is doom and gloom, it turns out that a very large new hedge fund just opened its doors.

HT: one of my readers.

Flaming Wheelchairs

This has nothing to do with finance. Absolutely nothing.

But it caught my eye, and I thought making a blog post with that title would be kind of fun. In addition (as Dave Barry would say), it would make a good name for a rock bank.

Enough bloggery. Time to torture some data.

How The Financial World Views Itself

A former student of mine who works at a hedge fund just sent me this. For what it's worth, he says it's pretty accurate

My favorite is how the traders view sales. Note: the image originally came from MacroMan.

How Professors Spend Their Time

I'm in the midst of filling out my annual report (we do one every year to show the powers that be what we did over the previous year). I've got several attachments, to my report, but I'm debating adding this as one more:

Maybe after I'm tenured...

Conference Presentations By the Numbers

Once you've gone to a half dozen academic presentations, you begin to notece the same comments appearing over and over. Along those lines, here's a classic piece from George Stigler's in the 1977 Journal of Political Economy — “The Conference Handbook.” Stigler suggested that econ seminar participants could speed things up by making objections to the speaker's presentation using the following numbered list:

1. Adam Smith said that.
2. Unfortunately, there is an identification problem which is not dealt with adequately in the paper.
3. The residuals are clearly non-normal, and the specification of the model is incorrect.
4. Theorizing is not fruitful at this stage; we need a series of case studies.
5. Case studies are a clue, but no real progress can be made until a model of the process is constructed.
6. The second-best consideration would, of course, vitiate the argument.
7. That is an index number problem (obs., except in Cambridge).
8. Have you tried two-stage least squares?
9. The conclusions change if you introduce uncertainty.
10. You didn’t use probit analysis?
11. I proved the main results in a paper published years ago.
12. The analysis is marred by a failure to distinguish transitory and permanent components.
13. The market cannot, of course, deal satisfactorily with that externality.
14. But what if transaction costs are not zero?
15. That follows from the Coase Theorem.
16. Of course, if you allow for the investment in human capital, the entire picture changes.
17. Of course, the demand function is quite inelastic.
18. Of course, the supply function is highly inelastic.
19. The author uses a sledgehammer to crack a peanut.
20. What empirical finding would contradict your theory?
21. The central argument is not only a tautology, it is false.
22. What happens when you extend the analysis to the later (or earlier) period?
23. The motivation of the agents in this theory is so narrowly egotistic that it cannot possibly explain the behavior of real people.
24. The flabby economic actor in this impressionistic model should be replaced by the utility-maximizing individual.
25. Did you have any trouble in inverting the singular matrix?
26. It is unfortunate that the wrong choice was made between M1 and M2.
27. That is alright in theory, but it doesn’t work out in practice (use sparingly).
28. The speaker apparently believes that there is still one free lunch.
29. The problem cannot be dealt with by partial equilibrium methods; it requires a general equilibrium formulation.
30. The paper is rigidly confined by the paradigm of neoclassical economics, so large parts of urgent reality are outside its comprehension.
31. The conclusion rests on the assumption of fixed tastes, but (of course) tastes have surely changed.
32. The trouble with the present situation is that the property rights have not been fully assigned.

HT: The Freakonomics blog.

Some of the commenters on the piece added more options. Here are some of the better ones:

1. How did you handle endogeneity problem?” (Note: this almost always works well at finance conferences, particularly for corporate finance pieces)
2. Your standard errors are too small because you failed to cluster (or clustered at the improper level).
3. At Fed banks, certainly one of the items for this list would be, “How is this of any relevance to monetary policy?”
4. The results are driven by unobserved heterogeneity.
5. Did you try using a Difference-in-Difference technique? Did you try using a non-parametric estimation?
6. Experiments conducted by Kahnmen and Tversky have clearly demonstrated that people do NOT choose rationally under those conditions.
7. Is there a weak instruments problem?
8. But what if the actors aren’t rational?
9. Isn’t this just Modigliani-Miller?
   
10. How is your model identified?
11. Have you included fixed effects?
12. That’s ok in practice, but it won’t work in theory.
13. This theory is only valid in the static case and won’t work in the dynamic one.
14. Why do we care about this? or “Why is this question important anyway?"
15. That’s true, but not very interesting
16. That’s not a large effect you’ve found, it’s a small effect.
17. That’s not a small effect you’ve dismissed, it’s a large effect.
18. Did you try first-differencing?
19. What happens if you estimate it by GMM?
20. You just ran a bunch of regressions. What have we learned from your analysis?
21. Here's a popular one, in the “I did this back in..” vein:“I was troubled that you didn’t cite my work in the field.”
22. Your empirical results are obviously biased by a troubling sample selection issue.
23. But what if we view this as a 2-stage game?.
24. ‘In an efficient market, that type of arbitrage isn’t possible’.
25. I believe your correlation is a spurious one unless you convince me you checked for co-integration.

If you can think of others to add to the list, feel free to put them in the comments section.

Obama Gets RickRolled

I try to avoid politics on this blog, because it brings out the moonbats at both ends of the political spectrum. But this was pretty clever.

I wondered if someone could do a similar one for McCain, but I don't think he's got the moves...

HT: Ace of Spades

What Do Incoming Freshmen Know?

Every year, Beloit College publishes "a look at the cultural touchstones that shape the lives of students entering college". They just published their 11th "Mindset List." Here are a few tidbits:

• Harry Potter could be a classmate, playing on their Quidditch team
• GPS satellite navigation systems have always been available.
• Gas stations have never fixed flats, but most serve cappuccino.
• All have had a relative--or known about a friend's relative--who died comfortably at home with Hospice.
• WWW has never stood for World Wide Wrestling.
• Clarence Thomas has always sat on the Supreme Court.
• Schools have always been concerned about multiculturalism.
• There have always been gay rabbis.
• Roseanne Barr has never been invited to sing the National Anthem again. (a good thing, IMO)
  
• Their parents may have watched The American Gladiators on TV the day they were born.
• They never heard an attendant ask “Want me to check under the hood?”
• They have never known life without Seinfeld references from a show about “nothing.”
• There have always been charter schools.

Read the whole thing here.

Hospital Slang

A comprehensive list

Things You Wish You Could Write On Students' Papers

Here's a pretty good list of things I wish I could write on some students' papers, from Sapience Speaks. #6, while harsh even for this list, is my favorite. Feel free to add your own in the comments.

1. "You certainly have a way with words. A long, long way."
2. "You seem to be attempting a very delicate approach to the assignment--so delicate, in fact, that you fail to touch on it at all."
3. "Every one of the words in this sentence is utterly devoid of meaning."
4. "I can't help feeling that you treat the ideas in your paper much as a black hole treats its neighboring star systems: forcefully and vigorously synthesizing them, you condense them beyond recognition, leading to utter destruction and chaos."
5. "like the broad swift stream / a thesaurus will go far / but yields no great depth."
6. "This paper isn't even bulls*&t. Bulls*&t has substance. This is diarrhea."
7. "I find your rhetorical strategy in this expository to be similar to that of a rhinoceros in extracting a tooth: large, blunt, and wholly ineffective."
8. "This entire page says exactly NOTHING."
9. "Every teacher wishes she could read a paper like this one. It makes the rest of her life so much brighter by contrast."
10. "As I was reading, I felt that you were trying to include in your paper every type of fallacy possible. If so, you only missed one."
11. "The level of disorganization in your paper suggests that your true topic must be chaos theory, not, as your title implied, Wordsworth."
12. "the wind speaks all day / yet with only empty breath: / you have no thesis"
13. "I'm not sure even you believe this sentence."

We Produce Thecal Matter

Some are just better at piling it.

Your Daily Dose of Patriotism

I'm a big Muppets fan, so I thought this was hilarious. My favorite part is around 1:12 (I always had a soft spot for Animal...).

HT: Neal Boortz

South Park On Risky Banks

This will end up in my classes this fall.

Annnd poof! It's gone.

I Didn't Know Godzilla Managed A Private Equity Fund

You're gotta love an ad that uses old Godzilla footage to slam PE firms - if just for the sheer shlock factor (say that three times fast...).

I was curious about the McCain reference in the video (it seemed to come out of nowhere). Then I checked and found out that the ad was paid for by the Service Employees International Union. Like most other unions, they're big Obama supporters. In fact, they were just mentioned in Wednesday's Wall Street Journal (unfortunately, I can't find a link to the piece just yet).

It's a pretty interesting mishmash of messages with a populist slant. It starts off with the obligatory gas pump picture (the economy is hard, and it's the fault of the eeeeeevil buyout firms) , and then shifts to say that there's a group of people who make millions and slash jobs. And worse yet, /sarcasm on/ they get tax breaks for doing it! /sarcasm off/

So, I guess the message to take from this is that gas prices are high, the economy is tanking, and it's all the fault of buyout firms with tax breaks.

But at least it was educational - I didn't realize John McCain and people at PE firms could breathe fire. That alone would be enough to get them my vote (if just for the coolness factor). Hey - if the Presidential campaign doesn't work out and McCain gets tired of the Senate, he could get a job in commercials.

The Professors, They Are Sneaky!

Here's the latest piece for my door. It doesn't really fit me (I'm in my office a lot), but it did fit MY advisor in grad school.

RIP George Carlin

George Carlin went into St. John's Health Center on Sunday afternoon, complaining of chest pain. He died at 5:55 p.m. PT.

Carlin was one of the icons of my generation. He constantly pushed the edge, and his routines contained some of the best social commentary around. While one of his pithier ones, his best known routine is Seven Words You Can Never Say On Television

(caution: definitely not safe for work), which my classmates had memorized shortly after it came out.

However, if you want more Carlin, there are a lot of other routines linked to the YouTube piece.

Investment Advice

Here's a classic

"I appreciate your honesty"

Lower Interest Rates

This NY Times cartoon is from the early 80's, but it plays just as well today:

HT: The Big Picture