Assorted links


1. Gross gets the narrative wrong, and he gets it wrong because he attempts to make a narrative out of a set of facts which can't be narrated. He says QE2 was to "lower interest rates on intermediate and long-term mortgages/Treasury bonds and in the process flush money into risk assets – most visibly the stock market". Why would the bond king say that when he knows well that yields went up not down? He's missing the forest for the trees. The increase in demand for bonds created by QE2 was way overshadowed by the increase in the money supply, pushing yields up not down.

He says the next step was: "forecast publically then hope that higher stock prices would lead to a wealth effect, and in turn generate new private sector lending, job creation and a virtuous circle of economic expansion"

No, the higher stock prices were the effect of higher earnings expectations, and so far those expectations have been met if not exceeded. His analysis might make sense if PE's were ridiculously high, but they aren't. The virtuous cycle of the wealth effect is a 2nd order effect, the stock market doesn't go up on sheer hopes of a 2nd order effect. Gross seems to believe the stock market "pulls itself up into existence by the hair, out of the slough of nothingness".

Gross should stick to his mathematical models of bond prices and stay away from telling stories.

"McKinsey" productivity study

"No, the higher stock prices were the effect of higher earnings expectations, and so far those expectations have been met if not exceeded."

Do you see those higher earnings as at all related to the flood in money supply? Surely you'll give me bank profits ...

Does 'Pay the Homeless' belong in 'Markets in Everything'?

Arnold Kling's post explores the intersection of Tyler's TGS and the "Manning Up" shame campaign currently being led by Kay Hymowitz.

I hate to be one of those self-promoting bloggers, but I wrote a little bit about that earlier this week. Men - more than women - are finding a lot of value in the internet. I think Tyler touched on that when he said something about people spending more time devoted to Twitter and leisure than to "shopping for diamonds".

Men have been marginally interested in succeeding in the economic realm because of how that success translates into the sexual realm. But as sex becomes cheaper men can make more leisurely life choices. They can choose part time jobs that don't require "take home work" and pursue other satisfying interests (for me it is blogging).

It strikes me that the chorus of man shamers out there - like Kay Hymowitz - are merely struggling to deal with a new economic model in which men are marginally less interested in jobs just for money and more for their creative/personal returns.

4. Disbelieve.

Many "homeless" aren't homeless.

Many "homeless" had the choice to live indoors somewhere and chose not to.

Many homeless are mentally ill, and won't do anything productive with $1200.

Many homeless are drug and alcohol abusers who will waste it.

Many homeless already make $1200 a month shaking a cup, and that hasn't changed their living conditions.

People become homeless because they had serially poor judgment. It's ridiculous to think a small windfall is going to instill instant wisdom.

I don't buy the results for a minute.

Aside from that, the city of San Francisco was giving free bus tickets to the homeless provided they could find someone willing to take them in. The program was hailed as a success. But the homeless population was still growing, even before the recession.

Subsidize something, you get more of it.

I think the people who come up with these schemes for the homeless never actually knew anyone who's ever been homeless. They haven't been homeless themselves.

With millions of square feet of government owned REO, one would think the problem of lacking a roof over one's head would be easily solved by now.

Why aren't Buffett, Gates, Soros, and Lewis buying up foreclosures and giving them away as gifts to tiny communes of friendly neighborhood streetsleepers? It would save Jimmy Carter the effort of building homes from the ground up.

The human echolocation story deserves to be much, much better known. It's practically the equivalent of discovering a new human sense.

The effort to create technology-enhanced batlike sonar capabilities deserves to be attempted seriously; the DoD has funded wackier and less-feasible things. Or, you know, maybe a really, really big Kickstarter project?

I wonder if it would work for sighted people, or perhaps the blind-from-infancy have had more of their cortex repurposed towards processing sound and they're just inherently more capable of this?

One practical and inexpensive idea would be a click-noisemaker for blind infants to wear as a necklace, so they can train on echolocation in the crucial early months before they're capable of producing click noises on their own.

Do you think Lehrer sees the irony of his piece?

He suggests that if something feels difficult then people draw the reverse inference that it is important. Isn't that exactly the trap that people like Lehrer (and lurkers on blogs like this) fall into, namely worrying about hard to answer questions that we mistakenly think are thus important?

And as to the conclusion of his piece, is it really anything new? i.e. to oversimplify, people spend too much time worrying about stuff that doesn't matter.

I'm sighted, so I haven't really focused on echolocation, but I have been struck by how paying attention to both the sound and feel of air rushing about you can tell you quite a bit about your immediate environment (say, about a meter from your head). I bet I could learn more, if I had whiskers.

McKinsey (& Company) not "McKenzie". Common mistake, but would have expected someone like you to know better.

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