Month: August 2013
Handbag-backed loans
Say hello to the handbag-backed loan, a unique Hong Kong phenomenon. While money lenders typically ask for cars and homes as collateral, Hong Kong’s Yes Lady Finance Co. seeks its customers’ beloved handbags.
The four-year-old company accepts handbags on the spot, assesses them for their condition and authenticity and then procures loans within half an hour, as long as the bags are Gucci, Chanel, Hermès or Louis Vuitton. Occasionally, they’ll consider a Prada.
Until you repay, you have to give up the bag:
One customer, Ms. Chu recalls, brought in 40 or 50 Gucci purses at once. The client received an advance of roughly US$38,000, and later returned to reclaim the bags which he sold in his own store.
Almost all clients at Yes Lady pay the loan back quickly and reclaim their bags, Ms. Chu says.
Here is more, Google “Riva Gold handbag-backed loans Hong Kong” if need be for an open link.
Addendum: Izabella Kaminska offers comment.
Assorted links
2. Do measures of policy uncertainty have predictive value?
3. Ricardo Reis endorses a version of Austro-Portuguese business cycle theory (pdf).
4. Good and bad pragmatism, by Scott Sumner.
5. 1946 Alcatraz menu. I liked the second comment too.
Great Economists class
We now have up all the videos and also the final exam for our class on The Great Economists. The class includes coverage of the entire Wealth of Nations, as well as a section on economic history, which covers the Bullionist debates, the Irish famine, the debt and sinking fund controversies, living standards in the Industrial Revolution, and other topics from economic history which influenced the classical economists.
You can find the iTunes downloads here.
Our next class will be International Trade and it will be available late August/very early September.
Norwegian markets in everything
The multiple layers of deceit in this Shakespearean story are becoming increasingly strange:
Norwegian prime minister defends cab stunt as it emerges passengers were paid
An audacious election stunt where Norway’s Prime Minister worked undercover as a cab driver has backfired after it emerged that five of his passengers had been vetted and paid.
Here is more, via Yannikouts.
A Puzzle in Divorce Law
It’s easy to see why a divorce law might arise that allows men relatively easy divorce, as in the Old Testament which lets men divorce almost at will (as written, interpretations differ) but gives women no right to divorce at all. It is also easy to see why a society might adopt mutual consent under which both parties must agree in order to get a divorce or no-fault unilateral rules in which either party can get a divorce without the consent of the other. What is difficult to understand, however, is why a society would adopt divorce laws that make it difficult to get a divorce even when both parties want a divorce. Who benefits from such rules? And yet this was the common situation in England and the United States up until say the end of the 19th century. In England, for example, it took an Act of Parliament to get a divorce. One might argue that such rules benefit children but aside from the questionability of the premise this view would also have to answer how it is that children have political power?
Hat tip to Sasha Volokh for bringing the question to mind with an apropos quote on divorce from a 19th century British judge.
How much does bad Chinese data on real estate prices matter?
The excellent Christopher Balding has the scoop:
Baseline Chinese economic data is unreliable. Taking published National Bureau of Statistics China data on the components of consumer price inflation, I attempt to reconcile the official data to third party data. Three problems are apparent in official NBSC data on inflation. First, the base data on housing price inflation is manipulated. According to the NBSC, urban private housing occupants enjoyed a total price increase of only 6% between 2000 and 2011. Second, while renters faced cumulative price increases in excess of 50% during the same period, the NBSC classifies most Chinese households has private housing occupants making them subject to the significantly lower inflation rate. Third, despite beginning in the year 2000 with nearly two-thirds of Chinese households in rural areas, the NSBC applies a straight 80/20 urban/rural private housing weighting throughout our time sample. This further skews the accuracy of the final data. To correct for these manipulative practices, I use third party and related NBSC data to better estimate the change in consumer prices in China between 2000 and 2011. I find that using conservative assumptions about price increases the annual CPI in China by approximately 1%. This reduces real Chinese GDP by 8-12% or more than $1 trillion in PPP terms.
If you would like to hear what is wrong encapsulated in a nutshell, try this:
According to [official] NBSC data, the food component of the CPI in China as responsible for 99% of inflation between 2003 and 2011. Thinking of this another way, this implies that the NBSC is claiming that the only prices to rise in china between 2003 and 2011 were food prices.
Canine markets in everything
At a recent class in New York City on how to use iPads, an instructor had a remedy ready for distracted students: She smeared the screen with peanut butter.
One student, a Hungarian hunting dog named DJ Sam, ate it up.
Dog trainer Anna Jane Grossman began providing private iPad lessons to dogs last year. About 25 of her clients have signed up, and she is planning a 90-minute iPad clinic for dogs later this month, where they will learn to nose the screen to activate apps.
“People always say, ‘Oh, can you have my dog do my online banking?’ ” Ms. Grossman says. In reality, dogs don’t “necessarily do very useful things on the iPad,” she adds. “But I don’t necessarily do very useful things on the iPad either.”
Ms. Grossman is part of a nascent but growing group touting the use of apps for pets. They say the apps can entertain pets stranded alone at home, teach valuable motor skills and even promote social behavior by engaging loner animals.
Felines are involved too:
Brooklyn cat owner David Snetman intended to let his cat, Pickle, play with his iPad until he tired of it. An hour later, Pickle was still whacking at the screen. Although Pickle’s interest never flagged, Mr. Snetman hasn’t let him play again since. “It seems very frustrating for him,” Mr. Snetman says.
…He and business partner Nate Murray developed it after an app they designed for children flopped. They now have three cat iPad apps, including one that allows cats to paint on a screen and “Game for Cats,” which encourages cats to swat a laser dot, mouse or moth scurrying across the screen. Mr. Murray says the apps have been downloaded more than one million times. The basic version of the original is free; others sell for $1.99.
There is more here, interesting throughout. At first I thought this was a kind of novelty item, but there is a good deal of evidence that many of the pets are quite absorbed in these games or perhaps even obsessed with them. Is it wrong for me to think that some of these games are, using behavioral inducements, actually torturing the pet, a bit like perpetual catnip?
*Mass Flourishing*
The author is Edmund Phelps and the subtitle is How Grassroots Innovation Created Jobs, Challenge, and Change.
The book’s home page is here.
Assorted links
1. Are hedge funds actually about, believe it or not…hedging?
3. Interesting Noah Milliman piece on Bezos and WaPo.
4. Critical review of Reza Aslan.
5. It is cheaper to fly in the German orchestra than to pay the Australian musicians.
6. Details for my August 23rd lecture in Singapore, do come and introduce yourself. Note that while the talk is free, you must register in advance and there is a penalty charge for no-shows. The time for the talk is missing on the announcement and that is 3-5.
The Great Reset, labor market edition
Fabio Rojas on Twitter as an electoral predictor
It turns out that what people say on Twitter or Facebook is a very good indicator of how they will vote.
How good? In a paper to be presented Monday, co-authors Joseph DiGrazia, Karissa McKelvey, Johan Bollen and I show that Twitter discussions are an unusually good predictor of U.S. House elections. Using a massive archive of billions of randomly sampled tweets stored at Indiana University, we extracted 542,969 tweets that mention a Democratic or Republican candidate for Congress in 2010. For each congressional district, we computed the percentage of tweets that mentioned these candidates. We found a strong correlation between a candidate’s “tweet share” and the final two-party vote share, especially when we account for a district’s economic, racial and gender profile. In the 2010 data, our Twitter data predicted the winner in 404 out of 406 competitive races.
There is more here.
Facts about the minimum wage
…the minimum wage is very much a bottom latter rung for the labor market, which you can see in Meer and West’s evidence that workers frequently transition out of the minimum wage. In their data 59% of workers who earn the minimum wage in one year earn more than it in the next year if they remain employed (5.8% are unemployed and 16.8% have left the labor force). The median wage increase they get is $0.90 per hour, which is a 23% raise. The 75th percentile raise is $2.45 per hour.
That is from Adam Ozimek.
The airline culture that is China
This undated photo shows two Xiamen Airlines stewardesses kneel in prayer at a shrine dedicated to being “on time”.
Here is more. By the way, this is part of the problem:
The latest statistics shows that the flow of air traffic accounts for as high as 40 percent of the total number of flight delays during the first half of this year. And whether the flight could take off in time or not, it depends on the fellowship with the air traffic controller.
Captain Wang Hai said that as long as one crew member on a flight personally knows the air traffic controller, the flight would be given priority to take off in time.
But some air traffic controllers explain that queue-jumping contributes to flights unpunctuality.
“International flights and those carrying important passengers, such as government officials, business tycoons and senior officials in civil aviation, do not have to wait in long queues to take off”, an air traffic controller in south China’s Guangzhou said.
Here is related coverage from The Economist, excerpt:
The first and oldest problem is that China’s armed forces control most of the nation’s airspace—perhaps 70-80% of it. This is especially the case above and around cities, leaving very narrow corridors for aeroplanes to take off, land and navigate nasty weather.
I will once again recommend to you the James Fallows book on aviation in China.
For the pointer I thank D.
Assorted links
Is Emile Simpson the new Clausewitz?
The new (November 2012) book is War From the Ground Up: Twenty-First Century Combat as Politics, and yes it is an important work. It is also difficult to excerpt. Nonetheless I especially liked these two sentences about Afghanistan:
This kind of situation, where sides argue tooth and nail over the meaning of every point or action, is typical of unstable interpretative environments, and those environments are in turn produced when people are insecure about who they are, and what they are about. Returning to the analogy of sixteenth-century England, we find that a parallel situation would be the debate over the interpretation of the English translation of the Bible in the 1520s and 1530s.
It is in general extremely insightful on the conflict in Afghanistan, where the author has had three tours of duty. The chapter on the British military campaign in Borneo in the mid-1960s (an oddly neglected historical episode) is also especially good.
Here is FT lunch with Emile Simpson, possibly gated for you. Excerpt:
In Simpson’s view, one of the biggest mistakes the US has made has been to talk about a “global war on terror”, a phrase he describes as silly because it raises expectations that can never be met. “If you elevate this to a global concept, to the level of grand strategy, that is profoundly dangerous,” he says. “If you want stability in the world you have to have clear strategic boundaries that seek to compartmentalise conflicts, and not aggregate them. The reason is that if you don’t box in your conflicts with clear strategic boundaries, chronological, conceptual, geographical, legal, then you experience a proliferation of violence.”
Here is a very positive TLS review of Simpson’s book., where it is described as one of the half dozen essential works on military strategy since World War II.
Dense reading, but definitely recommended.