Anti-mind, anti-man, anti-life
Curing disease is good, right? No. Jemima Lewis, writing in the Telegraph, says curing disease is a sickeningly bad idea:
…the Zuckerberg-Chans have the most ambitious vision yet: developing new technologies and medicines to tackle every disease ever invented.
We’d better hope they don’t succeed. What would it do to the human race if we were granted eternal health, and therefore life? Without any deaths to offset all the births, we would have to make room on earth for an extra 208,400 people a day, or 76,066,000 a year – and that’s before those babies grow old enough to reproduce themselves.
Within a month of Mr Zuckerberg curing mortality, the first wars over water resources would break out. Within a year, the World Health Organisation would be embarking on an emergency sterilisation programme. Give it a decade and we’d all be dead from starvation, apart from a handful of straggle-bearded tech billionaires, living in well-stocked bunkers under San Francisco.
I’m shocked that anyone can write such depraved things in a major newspaper. In a decent culture this kind of thing would be relegated to some sick corner of the dark web. I suppose I shouldn’t be surprised, however. Ayn Rand villains exist. Look around.
Stephen J. Entin on raising estate taxes
The transfer [estate] taxes are highly distortive of economic activity. In fact, they probably do the most damage to output and income per dollar of revenue raised of all the taxes in the U.S. tax system. There are two reasons. First, they are an additional layer of tax on saving and investment, activities that are highly sensitive to taxation and very likely to shrink in response to the tax. Second, the transfer taxes are levied at very high, steeply graduated marginal tax rates on a very narrow tax base. The high rates discourage saving and investment at the margin, while the average tax rate and tax revenues are held down by the credit. A tax that has a large differential between its average and marginal tax rates does far more damage per dollar of revenue raised than a flatter rate tax on a broader base.
Here is the full study and pdf. The pointer is from Alex T.
Quant trading economies of scale someone should give Doug his own blog
There are a few possible routes to establishing a monopoly in quant trading. Here’s one that seems to work really well. It’s kind of hard to explain, so bear with me. Many trading signals reliably predict prices, but not strongly enough to overcome transaction costs (i.e. exchange fees, clearing fees, liquidity costs, etc.). A stock can moves up or down $.01 in the next period, your trading signals predicts the right direction 60% of the time, and transaction costs average $.0025. Unfortunately after costs, you’ll end up losing $.0005 per trade, so it’s not a viable strategy.
But let’s say you’ve got three uncorrelated trading signals just like it. If you wait until all three point in the same direction, now there’s a 94% of the stock moving in your favor. You easily clear the transaction cost threshold and neatly make $.0063 per trade. When you gather together multiple uncorrelated signals, the whole becomes worth much more than the sum of the parts.
This is basically how a company like Renaissance Technologies operates. It has hundreds of people working in silo’d groups. Each group contributes to the overall fund’s strategy, but are largely unaware of what the others are doing. Alone any single group would probably not have a viable standalone strategy. That’s a big deterrent to people leaving, starting from scratch is really hard. And there’s only a few other major companies in Renaissance’s league, where they’re already strong enough to make money off of marginal signals. It’s a chicken-and-egg problem. To become viable in the space you need to accumulate a whole bunch of signals, but to attract a critical mass of talent with signals you need to already have a viable strategy running.
That one was “from the comments.“
The Decline of Car Culture
UMTRI: About 87 percent of 19-year-olds in 1983 had their licenses, but more than 30 years later, that percentage had dropped to 69 percent. Other teen driving groups have also declined: 18-year-olds fell from 80 percent in 1983 to 60 percent in 2014, 17-year-olds decreased from 69 percent to 45 percent, and 16-year-olds plummeted from 46 percent to 24 percent.
Cars used to represent freedom. Today WiFi does. The decline of young drivers is likely another reason the roads are getting safer.
Hat tip: @counternotions.
Addendum: Steven Kopits argues (youtube) that this has more to do with lack of employment of young people than with a change in culture.
David Brooks on why Hillary Clinton isn’t winning by more
Here is one bit from a very good column:
She’s always been the duller, unfashionable foil.
Her donor base and fund-raising style is out of another era. Obama and Sanders tapped into the energized populist base, but Clinton has Barbra Streisand, Cher and a cast of Wall Street plutocrats. Her campaign proposals sidestep the cutting issues that have driven Trump, Sanders, Brexit and the other key movements of modern politics. Her ideas for reducing poverty are fine, but they are circa Ed Muskie: more public works jobs, housing tax credits, more money for Head Start.
Interesting throughout. Here were my earlier thoughts on the matter, cited by David too. Here are thoughts from John Judis.
Friday assorted links
1. Father knows best infrastructure.
2. Why is milk in the back of the supermarket?
3. Rolling drone delivery is coming to D.C.
4. China and Japan, “In fact, when staying in Japanese hotels, I turn on all the faucets as a way to relieve my anger! But it is of no use! We must do better in all ways! Let’s go!” Most polled Chinese disapprove, although eight percent expressed a desire to do the exact same thing.
Is China’s anti-corruption drive sincere?
Or just a way to get rid of political opponents? The news on this front is by no means entirely bad. Xi Lu and Peter L. Lorentzen report:
In order to maintain popular support or at least acquiescence, autocrats must control the rapacious tendencies of other members of the governing elite. At the same time, the support of this elite is at least as important as the support of the broader population. This creates difficult tradeoffs and limits the autocrat’s ability to enforce discipline. We explore this issue in the context of Chinese leader Xi Jinping’s ongoing anti-corruption campaign. There have been two schools of thought about this campaign. One holds that it is nothing but a cover for intra-elite struggle and a purge of Xi’s opponents, while the other finds more credibility in the CCP’s claim that the movement is sincere. In this article, we demonstrate three facts, using a new dataset we have created. First, we use the political connections revealed by legal documents and media reports to visualize the corruption network. We demonstrate that although many of the corrupt officials are connected, Xi’s most prominent political opponent, Bo Xilai, is less central by any network measure than other officials who were not viewed as challenging Xi’s leadership. Second, we use a recursive selection model to analyze who the campaign has targeted, providing evidence that even personal ties to top leaders provided little protection. Finally, using another comprehensive dataset on the prefectural-city level, we show that the provinces later targeted by the corruption campaign differed from the rest in important ways. In particular, it appears that promotion patterns departed from the growth-oriented meritocratic selection procedures evidence in other provinces. Overall, our findings contradict the factional purge view and are more consistent with the view that the campaign is indeed primarily an attempt to root out systemic corruption problems.
The pointer is from the excellent Kevin Lewis.
From the comments, how to hit it big?
I am not endorsing these claims, but I do enjoy a good rant. It is an object lesson in showing how (some) people think about jobs, status, rivalry, and money.
First venture capital is generally consider where washed-out Wall Streeters go, when they can’t cut it in real finance. Very few b-school students start out trying to get into VC. And no, generally Silicon Valley people are not nearly as smart as HFT/algo quants. The type of kids who go to Google or Facebook are generally the Ivy CS students from the upper half of their class who are good at white-boarding problems (e.g. reverse a linked list). The truly brilliant kids, Putnam winners, math olympiads, core kernel contributors, etc. disproportionately go the quant route. (In which at least half will wind up in Chicago).
SV is generally a worse deal than HFT or quant trading. Starting comp is at least 50% higher than the big five tech firms, and goes up at a much faster rate. And definitely way higher than startups, which nearly always under-pay. It’s true in tech you can become a multibillionaire, but that’s extremely unlikely even for the most talented. In general SV is a bad deal for everyone except the small set of people lucky or connected enough to be at the top. Outside founder level, virtually no one gets rich from startups anymore. The equity and options comp is pathetic at best, if not outright fraudulent. (“You’ll be getting 1% of outstanding shares… from this round…”). Even founders have to live on 70k salaries in the Bay Area, then are frequently screwed over or cliff’d by their VCs. For every Google, heck for every Apigee, there’s a thousand no-name flame-outs, where no one but the VCs walk away with a dime.
Compare to quant trading. Compensation is cold hard cash, usually paid out annually, if not quarterly. Not lottery ticket equity with four year cliffs, unlimited dilution and byzantine share classes. Most comp is directly tied to individual trading performance, with clear results from trading everyday. No politics, extremely meritocratic, no being at the random whims of whether your app takes off fast enough to overcome your burn rate. Firms actually compete for talent and pay accordingly, instead of colluding to keep wages suppressed. Unless your ambition is to top the Forbes list, HFT’s a much better deal for someone extremely intelligent like a Math Olympiad. The probability of making “f-you money” before 40 is at least an order of magnitude higher as a prop quant than in the Valley.
That is from Doug.
The concept of equilibrium (temporary?)
That is Carmela Uranga.
Londonderry Derry
The city’s name is a point of political dispute, with unionists advocating the longer name, and nationalists advocating the shorter. A common attempt at compromise is to refer to the county as “Londonderry” and the city as “Derry”, but this is by no means universally accepted. Because of this, a peculiar situation arises as there is no common consensus either in politics or elsewhere as to which name is preferred; the city council is officially known as “Derry”, but the city is officially recognised as “Londonderry” by the Northern Ireland Executive and the UK government. Whilst road signs in the Republic of Ireland use “Derry”, alongside the Irish language translation “Doire”, road signs in Northern Ireland will always read (unless vandalised) “Londonderry”.
Here is the link. I hope someday to go.
Thursday assorted links
1. 16 economists on Brexit (videos).
2. My post on Romneycare, from ten years ago.
3. Does inequality lead to credit growth? Testing the Rajan hypothesis.
4. Maybe Fitbit doesn’t work? And the NYT version.
5. I don’t agree with everything in this Zero Hedge post, and some of it is flat out wrong, but it does cast serious doubt on the new, happy median income growth figures: “the Census Bureau’s own report shows that the median nominal earnings of full-time male workers in 2015 grew by 1.6% and for full-time female workers by 2.8%. That hardly squares with 5.7% average aggregate growth of incomes for all workers—unless main street households was suddenly showered with windfalls from stock dividends they don’t own, bank accounts that pay no interest or rental incomes from properties registered in someone else’s name.”
Gelman on the Replication Crisis and Social Media
This Andrew Gelman post on the replication crisis and the role that blogs have played in generating that crisis starts off slow but just builds and builds until by the end it’s like holy rolling thunder. Here is just one bit:
Fiske is annoyed with social media, and I can understand that. She’s sitting at the top of traditional media. She can publish an article in the APS Observer and get all this discussion without having to go through peer review; she has the power to approve articles for the prestigious Proceedings of the National Academy of Sciences; work by herself and har colleagues is featured in national newspapers, TV, radio, and even Ted talks, or so I’ve heard. Top-down media are Susan Fiske’s friend. Social media, though, she has no control over. That’s must be frustrating, and as a successful practioner of traditional media myself (yes, I too have published in scholarly journals), I too can get annoyed when newcomers circumvent the traditional channels of publication. People such as Fiske and myself spend our professional lives building up a small fortune of coin in the form of publications and citations, and it’s painful to see that devalued, or to think that there’s another sort of scrip in circulation that can buy things that our old-school money cannot.
But let’s forget about careers for a moment and instead talk science.
When it comes to pointing out errors in published work, social media have been necessary. There just has been no reasonable alternative. Yes, it’s sometimes possible to publish peer-reviewed letters in journals criticizing published work, but it can be a huge amount of effort. Journals and authors often apply massive resistance to bury criticisms.
If you are interested in the replication crisis or the practice of science read the whole thing.
Aside from the content, I also love Gelman’s post for brilliantly mirroring its metaphor in its structure. Very meta.
*A Notable Woman*
The descriptive subtitle is The romantic journals of Jean Lucey Pratt. She was a British woman who started keeping a journal in 1925 at the age of fifteen, and continued until her death in 1986. Usually books like this bore me after fifty pages (or less), but this one I am finding consistently entertaining. Here is one bit from her cruise ship voyage at age 23:
My physical needs as a normal woman are badly wanting fulfillment. I’ve got to somehow make them understand that I have no anchor; that an ordinary and full-sexed woman must centre her interests on one man, otherwise she must inevitably go to pieces.
I’ve learnt a lot from this voyage, and one thing from Nev which is forceful and important — that platonic friendships are impossible. To show my trust in my little boyfriends I left my door unbolted; although they had drunk too much, I knew I could trust them. But I’ve bolted it again.
She lost her virginity eight years later, at age 31:
When he had played with me in the French manner (too long I think) to work me up to the Crisis, the Big Moment Passionate and so on, I left him to make my preparations and then lay back on the bed and said in a sepulchral voice, “Now I’m ready for the worst!” Well, it was damned painful, though I didn’t know it was going to be.
I have quite recovered from my pain in the stomach and am in a rare good humour, have been all day. It is such a relief to feel one is no longer completely ignorant.
Here is one good review of the book, with a photo of the diarist as well. Here is another review.
Why do people play chess again?
According to Donner: “The whole point of the game [is] to prevent an artistic performance.” The former world champion Garry Kasparov makes the same point. “The highest art of the chess player,” he says, “lies in not allowing your opponent to show you what he can do.” Always the other player is there trying to wreck your masterpiece. Chess, Donner insists, is a struggle, a fight to the death. “When one of the two players has imposed his will on the other and can at last begin to be freely creative, the game is over. That is the moment when, among masters, the opponent resigns. That is why chess is not art. No, chess cannot be compared with anything. Many things can be compared with chess, but chess is only chess.”
That is Stephen Moss at The Guardian. Along related lines, I very much enjoyed Daniel Gormally’s Insanity, Passion, and Addiction: A Year Inside the Chess World. It’s one of my favorite books of the year so far, but it’s so miserable I can’t recommend it to anyone. It’s a book about chess, and it doesn’t even focus on the great players. It’s about the players who are good enough to make a living — ever so barely — but not do any better. It serves up sentences such as:
Surely the money in chess is so bad that this can’t be all you do for a living? But in fact in my experience, the majority of chess players rated over 2400 tend to just do chess. If not playing, then something related to it, like coaching or DVDs. That’s because we’re lazy, so making the monumental effort of a complete change in career is just too frightening a prospect. So we stick with chess, even though the pay tends to be lousy, because most of our friends and contacts are chess players. Our life is chess. As a rough estimate, I would say there are as many 2600 players making less than £20,000 a year.
And:
Stability. I had this conversation with German number one Arkadij Naidisch at a blitz tournament in Scotland about a year ago. (there I go, name-dropping again.) He suggested that a lot of people don’t achieve their goals because they just aren’t stable enough. They’ll have a fantastic result somewhere, but then that’ll be let down by a terrible tournament somewhere else.
…The problem is it’s hard to break out of the habits of a lifetime. Many times at home I’ve said to myself while sitting around depressed about my future and where my chess is going, “tomorrow will be different. I’ll get up and study six-eight hours studying chess.” But it never happens.
Overall biography and autobiography are far too specialized in the lives of the famous and successful.
Scientists are gushing too much
Equally, in a world where academics are obliged to offer up each piece of work to be evaluated as internationally significant, world leading etc., they will seek to signal such a rating discursively. A study by Vinkers et al. in the British Medical Journal uncovered a new tendency towards hyperbole in scientific reports. They found the absolute frequency of positive words increased from 2.0% (1974-80) to 17.5% (2014), which amounts to a relative increase of 880% over four decades. 25 individual positive words contributed to the increase, particularly the words “robust,” “novel,” “innovative,” and “unprecedented,” which increased in relative frequency up to 15 000%”). The authors comment upon an apparent evolution in scientific writing to ‘look on the bright side of life’.
That is by Liz Morrish, via Mark Carrigan.