Month: July 2015

China fact of the day

Recent overweighting to stem A-share plunge has made China Securities Finance Corp (CSF), central bank-backed refinancing institution, among top 10 shareholders of many listed-firms, reported Securities Times on Wednesday.

Among all investments, eight firms have been confirmed of the CSF’s stake, which include property developer Dulexe Family, Hualan Biological Engineering, resource purifying developer SJ Environment Protection, Yunnan Tin Company Group, Fujian Cosunter Pharmaceutical Co, Hunan Er-Kang Pharmaceutical Co, digital map provider NavInfo Co, and retailer Friendship&Apollo.

The CSF has been listed as the second-largest holder of tradable shares at Cosunter Pharmaceutical, third largest at SJ Environment Protection, and fifth-largest shareholders at Yunnan Tin Company, according to the Times citing disclosures to Shanghai and Shenzhen stock exchanges.

There is more here, by ChinaDaily, via Patrick Chovanec.  I wonder how they are planning to unwind all of those share purchases?

Is there a great teen sex stagnation?

The share of teen girls who reported they’ve had sex at least once dropped from 51 percent in 1988 to 44 percent in 2013, they found. Abstinence was more pronounced among the guys: 60 percent of teen boys in 1988 said they’d had sex, compared to 47 percent in 2013.

That is from Paquette and Cai, the underlying CDC study is here.  One major hypothesis is that teen sex has declined because smart phone usage is up.  Teens are both better informed about the risks of sex and…they have something else to do.

Wednesday assorted links

Taylor Swift, Straussian?

Taylor

The singer is launching her own Taylor Swift-branded clothing line next month, on the platforms of local e-commerce giants JD.com and the Alibaba group, with t-shirts, dresses and sweatshirts featuring the politically charged date 1989.

The date – as well as being Swift’s year of birth – refers to her album and live tour of the same name, which she will perform in Shanghai in November.

But the date – and the initials TS – are particularly sensitive in China, as they signify the Tiananmen Square massace in 1989, when hundreds of students were killed in pro-democracy protests.

There is more here.  Here is a story on the map of China accompanying Dwyane Wade.

Patent Trawls and the Total Profit Rule

Patents should be made more difficult to obtain, say by raising the obviousness standard or more speculatively by requiring patent terms to vary with investment. Aside from these types of changes, however, damages for infringement can also be made more reasonable. The issue is especially pronounced for design patents.

In the recent Apple v. Samsung case, the infringement of a handful of “look and feel” design patents resulted in Apple being awarded Samsung’s total profits on the infringing devices. A friend of the court brief from industry heavyweights, Dell, eBay, Facebook, Google, Hewlett-Packard, Limelight Networks, Newegg, and SAS Institute explains:

In this closely watched case, the panel upheld a jury’s award of the entirety of Samsung’s profits on smartphones that were found to have infringed three Apple design patents relating to a portion of the iPhone’s outer shell and one graphical-user-interface screen. Although the design patents covered only minor features of those complex electronic devices, the panel rejected Samsung’s argument that damages must be limited to the profits made from those infringing features. See slip op. 25-28. It instead concluded that the relevant statute, 35 U.S.C. § 289, “explicitly authorizes the award of total profit from the article of manufacture bearing the patented design.” Id. at 26-27. Viewing the smartphone as a single “article of manufacture,” the panel held that the statute required it to award the total profit where the “innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.” Id. at 27-28.

A typical device might involve many design elements and what the total profit rule means is that a finding of infringement on any of these elements can get you all of the profits. The total profits rule is an invitation to rent seek. For a complex product, trawling the patent databases will almost always find some handful of patents that some court might rule were infringed. Defendants are put in the unenviable position of having to be right one hundred percent of the time while trawls need only be right once.

Do we really want to turn serifs into billion-dollar weapons of commercial war?

Hat tip: Mark Thorson.

Addendum: Keep in mind the general point: Patents are supposed to protect innovators but when weak claims of imitation are easily made and well-rewarded then patent law can harm innovators and reduce innovation, as the Tabarrok Curve illustrates.

What makes the Very Serious People so very serious?

I mean that question quite um…seriously.

Paul Krugman, who I believe originated the concept, recently defined it as follows: “…someone distinguished by his faith in received orthodoxy no matter the evidence.”  I would rather have something less normative and also more specific.

I think of it this way: the People are Very Serious if they realize that common sense morality must, to a considerable extent, rule politics.  At least if voters are watching.

So what is common sense morality in this context?  It embodies a number of propositions, including, for instance (with cultural variants across nations):

1. Political decisions should be based on what people and institutions deserve, based on their prior conduct and also on their contributions to the general good.

2. Economic nationalism.

3. Traditional morality, based on respect for authority, repayment of debts, savings, and hard work.

4. Inflation is bad, in part because it violates #1 and #3, and in the case of the eurozone it often violates #2 as well.

5. “I don’t care what you all say, the government should be able to find some way of arranging things so that I don’t have to suffer too badly from this.”

Now here’s the thing: common sense morality very often is wrong, or when it is right that is often with qualifications.

Therefore at the margin there is almost always a way to improve on what the Very Serious People are pushing for.  The Very Serious People realize this themselves, though not usually to the full extent, because they have been cognitively captured by their situations.  They see themselves as “a wee bit off due to political constraints,” instead of “a fair amount off due to political constraints.”  So there is usually some quite justified criticism of the Very Serious People.  Common sense morality is needed at some level, but still at the margin we wish to deviate from it.

That said, it is a big mistake to try to throw the Very Serious People under the bus.  The Very Serious People understand pretty well how to deal with a public which believes in some version of 1-5, and furthermore they often know that such public beliefs, whatever their limitations, are useful too.  Anyone else trying to manage the situation may come up with some favorable breakthroughs, but also may make a total hash of it, as was the case with Syriza.  Syriza failed to realize the import of 1-5 for both domestic and foreign politics,and so they drove the Greek economy to the point of total desperation.  There is a nested game going on, where the public has a big say on the heavily publicized issues, and the politicians must in some way heed that.

If you want to try the “replace the Very Serious People” game, and assume the subsequent risks, that is a judgment which can be made.  The mistake is to think that the partial wrongness of the Very Serious People is necessarily a reason to take matters out of their hands.

Addendum: Via Tim, here is the entry on Very Serious People on RationalWiki, it seems Atrios first put forward the concept.  And here are the remarks of Tsipras.

Yes, there is a great Singaporean novel

Or is it a novella?  The Widower, by Mohamed Latiff Mohamed, was not recommended to me by anyone, but I found it during my recent browse in Singapore Kinokuniya.  It starts with the meditations of a man whose wife has passed away and who then delves into his obsessions.

Although the book was published in the 1990s, it was translated into English only this year; I hope Michael Orthofer at Literary Saloon is paying attention.  But alas it is not for sale on U.S. Amazon.

Here is a recent article about the hand-wringing of Singaporeans over their failure to win major literary prizes.  Not long ago, Mohamed moved to Australia, proclaiming “Singapore is still my home.”

Here is my earlier post on what are the Singaporean literary classics, there were a few good answers in the comments.

*Phishing for Phools*

The authors are Nobel Laureates George A. Akerlof and Robert J. Shiller and the subtitle is The Economics of Manipulation and Deception.  It’s a popular take on how markets trap you and your preferences in places you don’t want to be.  Self-recommending of course.

There are chapters on advertising, tobacco, alcohol, junk bonds, credit cards, pharmaceuticals (some), and yes government.  My main complaint about the book is that its chooses easy targets and doesn’t puncture enough sacred cows.  For instance the chapter on government criticizes spending money on lobbying, whereas I would have preferred an attempt to show that an apparently beneficial and popular institution is in fact bad and appealing to the weaker elements in our preferences.  I wonder to what extent what the authors call “The Resistance and its Heroes” is in fact another example of…phishing for phools.  In other words, I wish this book were more Hansonian.

By the way, I have never eaten too much ice cream.

Modern German nationalism

There are plans to legally restrict the export of some paintings from Germany, and so far the proposed policy is not working out well.  Collectors are rushing to take their loans off museum walls and get them out of the country, or hold them incognito.

The law would apply to works of historical importance more than fifty years old, worth more than 150,000 euros, and judged by regional boards to be of historic importance.  It is interesting which works may fall under this designation:

In one interview, she [Germany’s culture minister] raised the prospect that foreign works could be classified as national treasures. For example, she said the Warhol silk-screens of Elvis Presley and Marlon Brando that were sold by the state-owned casino were “emblematic” of the collecting history of the Rhineland.

Apparently Gerhardt Richter is a hard-core libertarian, like most other painters, because he asserted: “No one has the right to tell me what I do with my images.”

For the pointer I thank Cyril Morong, a loyal MR reader.

*The Economics of Inequality*

That is the new — well sort of new — Thomas Piketty book.  It was first published in France in 1997 and then updated several times through 2014, though we are told most of the book has kept its original structure.  It is a good, short read and will appeal to anyone with an interest in Piketty and “that sort of thing.”  The full-blown g > r model is not here, but you can see Piketty edging into being Piketty, with plenty of talk about capital-labor substitutability.