Year: 2016
Facts about Aramco
Aramco is worth, officials say, “trillions of dollars”, making it easily the world’s biggest company. It says it has hydrocarbon reserves of 261 billion barrels, more than ten times those of ExxonMobil, the largest private oil firm, which is worth $323 billion. It pumps more oil than the whole of America, about 10.2m barrels a day (b/d), giving it unparalleled sway over prices. If just a sliver of its shares were placed on the Saudi stock exchange, which currently has a total market value of about $400 billion, they could greatly increase its size.
That is from The Economist. The talk is of starting with the sale of a 5% share, but that is still an enormous offering.
Amazon eBook questions that are rarely asked
Why are Amazon ebook reviews from US readers more important than reviews from international readers?
Have you noticed that reviews from Amazon.com are aggregated across all other international Amazon sites, but that the reverse is not true? If someone kindly posts a review of a book on Amazon.co.uk, it is stuck there, and not aggregated to Amazon.com. Why? Is a UK review less valuable than a US review? Are reviews from Canadians, Australians or India inferior to US reviews?
Source here, via Sofia Tania.
Tuesday assorted links
2. “What I really wanted was every kind of life, and the writer’s life seemed the most inclusive.” That is from Susan Sontag. And a kind of theological interview with David Brooks.
3. “Then, there’s the ultra-premium options, like the $50 Iluliaq or the $99 Beverly Hills 9OH20 ‘Master Crafted Water,’ created by water sommelier Martin Riese.” Link here.
4. “Before I knew northern Virginia as the heart of the Internet, I knew it as spook country…”
5. Scott Sumner’s cinematic 2015, recommended.
6. A brief business history of David Bowie. And David Bowie’s favorite books list. Ziggy Stardust was my favorite Bowie album.
This Haitian worker is not paid his marginal revenue product
New York City’s top traffic agent is a relentless, ruthless street-sweeper who slings summonses at a rate of one every 9 minutes, 45 seconds.
South Brooklyn’s orange tsunami, Arnous Morin, 53, wrote nearly 19,000 parking tickets in fiscal year 2015, an average of 76 per day he worked, city records analyzed by The Post and AAA Northeast show.
The one-man ticket blitz dished out 4,000 more summonses than the city’s No. 2 traffic cop.
And Morin’s base pay of $36,000 was eclipsed 33 times over by the amount of fines he generated for city coffers — $1.2 million.
Morin, who was a Catholic-school principal in his native Haiti, is unapologetic about his lack of mercy for motorists.
“Never, never. It’s never OK to break the law,” he told The Post at his Canarsie home. “The law is hard, but it’s the law. You can’t break the law for any reason.”
He is in fact paid about 63k a year with overtime. And he has been ticketed three times himself, though I believe not by himself. He claims to hold a knowledge of the entirety of South Brooklyn in his head.
The story is here, with other interesting points, via Jordan Schneider.
*Norwegian Wood*, the book
The author is Lars Mytting, and the subtitle is Chopping, Stacking, and Drying Wood the Scandinavian Way. If only every book could be this good and to the point! Here is your Norway fact of the day:
Even in oil-rich Norway, as astonishing 25 percent of the energy used to heat private homes comes from wood, and half of that is wood chopped by private individuals.
In per capita terms, however, Bhutan is number one for wood chopping. Yet in the 1960s, the government of Norway had its own advisory body for the burning of wood chips.
I enjoyed this segue:
Although it may seem strange today, chain saws were regarded with suspicion at that time and there was much resistance to their use…
There were quite a few colorful players in the early days of the chain-saw industry in the 1950s. The competition was hard and the business attracted people with a fiery temperament. One legendary character was John Svensson (alias Chain Saw Svensson), who imported saws made by the Canadian firm Beaver. He had been arrested and tortured during the war and for the rest of his life suffered pains in his arms and joints; when demonstrating the Beaver saws he always made a point of stressing how the vibrations that passed up through the handle brought a welcome relief to his aching joints.
Svensson was not a man to take professional disappointments lying down. On one occasion he was so annoyed when a visiting government delegation refused to let him demonstrate his chain saw to them that he felled five trees across the road to stop them from leaving.
The interest of a Norwegian man in his firewood often rises sharply in his sixties. Perhaps this sentence from the book says it all:
It took a while, but that didn’t bother them, as long as it turned out the way they wanted.
You can order the book here, recommended.
Modeling North Korean negotiators
Joel S. Wit, who has negotiated with North Koreans for over twenty years, has a very interesting NYT piece on that topic, here is one excerpt:
The North Koreans may know a lot about the outside world, but they don’t know everything, even about the United States, their main adversary. In one meeting, an official asked, “Why do the president and secretary of state keep saying that the United States will not allow North Korea to have nuclear weapons when in fact you are not doing much to stop us?” He deduced that there must be a hidden agenda. “It’s because you want us to have nuclear weapons as an excuse to tighten your grip on South Korea and Japan, your two allies.” We responded that there was no hidden agenda and that the United States really did not want the North to have those weapons. I’m not sure we convinced him.
The piece is interesting throughout, most of all Wit stresses their realism and sophistication as negotiators, and urges us not to think of them as lunatics.
Monday assorted links
2. Who needs the FCC? (pdf). Brent Skorup doesn’t.
3. What goods can you not buy with median income?, by Chris Dillow: “…most “libertarians” are hypocrites and it is we Marxists who are the true lovers of freedom.” And a Martin Sandbu FT piece on the same.
5. Jessica Crispin in NYT on the single life for a woman.
6. Louis Armstrong and Maxine Sullivan (and others) video, it becomes an ensemble piece after the horse goes away, my favorite parts are in the second half but all of it is fantastic.
What is going on in China right now?
Given all of the recent publicity, I thought I would re-up on my China video, The Rise and Fall of the Chinese Economy. This is a recent addition to our Everyday Economics series from MRUniversity, and it also will be part of our in-progress macroeconomics course.
The Learn More page features additional resources about this topic. As I say in the video, the key variable to track for whether things get really bad is capital flight. In other words, recent developments have indeed been unsettling.
What we’ve seen is the central government spending down reserves at a much higher pace than virtually anyone had expected…except perhaps the central government. The response to falling stock prices has been to make it legally harder and harder to sell — what do the prices even mean at this point? A barometer of which kind of PR hit the government feels like taking on a given day? And perhaps most importantly of all, more and more people, both in and outside of China, are questioning whether the government really has matters under control. It seems not.
By the way, here is your China fact of the day, Larry Summers informs us:
Over the past year, about 20 per cent of China’s growth as reported in its official statistics has come from its financial services sector, which is now about as large relative to gross domestic product as in Britain, and Chinese debt levels are extraordinarily high. This is hardly a case of healthy or sustainable growth.
That said, China will do everything possible to prevent a financial crisis.
On the (somewhat) cheerier side: “Film market analysts have pointed out that the biggest films have performed similarly in China and the US in recent years.” Star Wars: The Force Awakens had the biggest single-day opener in Chinese history (FT link), let’s see how well the future installments do.
Why is it hard to measure the value of soccer players?
Max Mendez Beck emails me:
Given the advent of statistics in sports that occurred in the last five years, I am struck by how well soccer works as a metaphor for current epistemological debates regarding the use (and primacy) of quantitative versus qualitative data in social science research. While the three major American sports (football, basketball, and baseball) have been overtaken by a quantitative obsession (count how many tables and numbers you see on an average ESPN show), soccer is emblematic of a sport that is quite difficult to measure quantitatively.
Consider how easy it is to determine who did well in an average NBA game without needing to even watch it. You can just look at points, assists, rebounds, steals, turnovers, etc. In soccer, individual statistics are almost nonexistent. Even as major sports channels have attempted to incorporate quantitative measures into their soccer broadcasts–for example, by showing the number of kilometers a player has covered when he gets subbed out (a pretty uninformative statistic on its own)–these numbers have not caught on with the regular fan.
While in basketball everyone debates about who “the best ever” is by referring to their career averages in points, field goal percentage, PER, etc. In soccer the only statistic that is ever used is goals scores, and goals scored is only one small dimension of a player, even smaller if he is not a striker. It would be silly to judge Andrés Iniesta or Zinedine Zidane on how many goals they scored in a season.
So what is it about soccer that makes it so hard to quantify? Or what makes American sports so easy to measure? One obvious answer is the length of the units that can be easily separated and analyzed. In basketball its a maximum of 24 seconds, in baseball its essentially a pitch (or an at bat), and in football its each snap. For soccer, the only apparent unit to separate out is the 45 minute halftime mark. Changes in possession could be another measure, but even then a team’s single possession could be several minutes long.
However, the real challenge comes in measuring individual accomplishments. Just recently I was watching a Barcelona game and Iniesta clearly was having an amazing game (as was mentioned several times by the announcer), and yet the things that made him have a great game were only describable in words and not numbers. There was a beautiful and sudden “regate” or dribble around a defender before he passed it on to a teammate for a quick counter attack. There was the beautiful pass between defenders that led to an assist for the first goal. There was the sudden change in direction and over the top pass to the other side of the field that put the defenders on their heels. Many of these moves are incredibly situational; they have to do with the rhythm of the game and the need to speed it up or slow it down. Nothing in the boxscore could truly capture these attributes.
So the question is: Is soccer something that can’t be measured in numbers?
Here are various readings on the topic.
Nudge plus vouchers = “Nanny state”?
Do you like or dislike this mix?:
The prime minister [of the UK] will call for a revolution in child rearing this weekend by suggesting that all parents should attend classes on how to discipline their children.
In a move likely to enrage those fearful of an encroaching “nanny state”, David Cameron will say that it should be the norm for parents to receive instruction on how to behave around their offspring.
As part of a speech on the family, Cameron will announce plans for a parenting classes voucher scheme, claiming that all parents need help and that there is too little state-sponsored guidance on offer.
I believe most Americans at least do not find this an intuitively appealing combination of policies. It seems to “insult” the poor at the same time that it brings the state into what for conservatives is the sacred realm of the family.
I wish I could say a policy which irritates so many people is likely to be a good thing, yet I can’t quite see this one working out for the better. And yes I do know the RCT evidence that personal trainers and coaches can improve the lives of the poor in the developing world.
Sunday assorted links
1. Chickens prefer beautiful humans.
2. Distilling microeconomic research for public debate.
4. Which side of this debate is “the culture that is Australia”?
5. Louis Vuitton Final Fantasy bag, yes those two brands are paired together.
6. Blind hiring.
7. Is the theory of secular stagnation simply about negative supply shocks?
State-contingent markets in everything
Someone is betting $40,026 on the life of a 73-year-old lottery winner in Michigan.
That amount was the highest bid Thursday in an online auction for a lottery prize that pays $1,000 a month, before taxes. But here’s the hitch: The money is paid only as long as Donald Magett stays alive.
The Portage man won the “Cash for Life” game back in 1984, although the winnings lately have been going to bankruptcy trustee Tom Richardson to pay Magett’s debts.
Richardson auctioned the lottery prize — the last main asset — in an effort to close the bankruptcy case. The auction house, repocast.com, said the top bid was $40,026. At that price, Magett would need to live a few more years for the winner to at least break even.
The winner soon will get the first annual payment of $12,000.
Richardson said he doesn’t know the details about Magett’s health.
“All I know is his lawyer tells me his health is good,” Richardson said.
According to the Social Security Administration, a 73-year-old man can be expected to live another 13 years.
The story is here, via Mohamed Rayman.
2016 Law and Literature reading list
The New English Bible, Oxford Study Edition
Guantanamo Diary, by Mohamedou Ould Slahi
Albert Camus, The Stranger
Kamel Daoud, The Meursault Investigation
Janet Malcolm, The Crime of Sheila McGough
Njal’s Saga (on-line version is fine)
Glaspell’s Trifles, available on-line
Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer, used or Kindle edition is recommended
The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka, edited and translated by Joachim Neugroschel
In the Belly of the Beast, by Jack Henry Abbott
Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1, also on-line
I, Robot, by Isaac Asimov
Moby Dick, by Hermann Melville, excerpts, chapters 89 and 90, available on-line
Death and the Maiden, Ariel Dorfman
The Pledge, Friedrich Durrenmatt
Ian McEwan, The Children Act
We also will see some films and cover some very short on-line readings, as I will distribute at the appropriate times; your papers may draw on these as well.
Saturday assorted links
Powerball
Today’s Powerball lottery offers a prize of $800 million. Is the prize high enough to make it worth playing for an economist? In other words, is the prize high enough to be a net gain in expected value terms? Almost!
The odds of winning are 1 in 292.2 million. So the expected value of a ticket is $800*1/292.2=$2.73. A ticket only costs $2 so that’s a positive expected value purchase! We do have to make a few adjustments, however. The $800 million is paid out over 30 years while the $2 is paid out today. The instant payout is about $496 million so that makes the expected value 496*1/292.2=$1.70. We also have to adjust for the possibility that more than one person wins the prize. If you play variants of your birthday or “lucky” numbers that’s a strong possibility. If you let the computer choose your chances are better but with so many people playing it wouldn’t be surprising if two people had the same number–I give it at least 25%. So that knocks your winnings down to $372 million in expectation.
Finally the government will take at least 40% of your winnings, leaving you with $223 million in expectation. At a net $223 million the expected value of a $2 ticket is about 75 cents. Thus, a Powerball ticket doesn’t have positive net expected value but the net price of $1.25 is significantly less than the sticker price of $2. $1.25 is not much but to get your money’s worth buy early to extend the pleasure of anticipation.