Who should I follow on Twitter?
Please let me know, comments are open. If you don't have a mental model of my intellectual tastes by now, let the heavens fall. And if you can, please give their Twitter handle.
Why are some CDs longer than others?
Adam Smith, a loyal MR reader (yes that is his name), writes to me:
I had a very MResque thought today I wanted to share with you. Why are the typical lengths of albums across different music genres so different? In particular, I was thinking most of my rap albums are at least over the hour mark and many run all the way up to the 80-minute maximum. They're usually packed with intros, skits, and lots of 5 minute tracks that have extended intro and outro instrumental beat only sequences. My metal albums, on the other hand, have an average run length of no more than 40 mins. Most albums are between 8 and 10 tracks with little in the way of tangential material. These different run-times show up in other places too. For example, my older jazz albums (i.e. Kind of Blue, Time Out, Blue Train) typically run around 45 mins with a half dozen or so tracks yet my newer jazz albums like MMW's The Dropper run almost the whole 80 mins. Also, prog. rock bands tend to produce much longer albums than garage rock bands. Even adjusting for the fact that prog bands emphasize longer musical passages, they could compensate by just having fewer songs or garage rock bands could just have twice as many (like the White Stripes did on their first album).
Is there a relative price argument for these differences? Or even signaling? Perhaps there is a rat race among rappers to signal they're capable of coming up with enough material to fill out the maximum length, even if it includes lots of filler. Perhaps the recording costs are lower as instrumentation relies so heavily on sampling. Maybe metal runs into diminishing returns after 30 mins or so where the listener becomes numb to the intensity.
I'll offer a few points:
1. The average career of a rapper is short. A long CD increases the chance that something will "stick" and the rapper won't get too many other chances to try.
2. Some metal bands develop great loyalty among their followers and achieve durable franchises. That gives them a lower discount rate and they are more inclined to save up material for the future. Plus they are marketing an overall sound — rather than clever particular innovations — and if the first forty (five?) minutes don't convince you nothing will. Rap songs probably have a higher individual variance.
3. Many older albums are short for technological reasons, plus the albums were due in relatively rapid succession for contractual reasons. In the 1960s there was lots of technological advance in music, so if you sat on the sidelines for a few years you could become obsolete.
4. It is relatively easy for a contemporary jazz artist to tack on additional improvisations and he can choose standard compositions if necessary. Other forms of popular music cannot expand quantity so easily without hitting a wall in terms of quality. One prediction here is that "compositional jazz" albums should be shorter in average length than albums of jazz improvisation, contemporary that is.
5. If you wanted a somewhat strained explanation, you could argue that the longer CD is a more bundled product and it will make economic sense as a form of price discrimination, the more varied the valuations of the audience. This would require that rap CD buyers have a higher variance of marginal valuation.
The Stiglitz-Prescott View
Here is Nobel prize-winner Joseph Stiglitz quoted by Free Exchange:
We’ve really extended the safety net beyond to big to fail, and my view is that there’s been no convincing argument that any of this was ever needed. It was based on the notion of fear – that if you didn’t do it, the whole financial set of markets would fail. Economics would have suggested that if you did a debt to equity conversion, converting long-term debt into equity, the financial institution would be well capitalized, there would be no reason to panic, and there would be more confidence in the market. But those who saw an opportunity to use scare tactics to get what they wanted did use those scare tactics, and it worked.
Here is Nobel prize-winner Ed Prescott quoted by Brad DeLong:
[P]eople got scared…. The press scared people. People running for office scared people. Bernanke scared people; Paulson scared people…. [P]eople began not to know what was going to happen. Then they stopped investing–by investing, I mean getting a new car or fixing up your house. And that led to the economy–it was depressed a bit that fourth quarter of last year…[With] benign neglect the economy would have come roaring back quite quickly…
Free Exchange says that Joseph Stiglitz's views are "insane" and Brad DeLong says that Prescott "does not live in the consensus reality with the rest of us." I am not sure why they are so confident.
William Safire quotations
Knowing how things work is the basis for appreciation, and is thus a source of civilized delight.
And:
The right to do something does not mean that doing it is right.
I also like this one:
Never assume the obvious is true.
Here are more.
Assorted links
1. Interview with Daniel Kahneman.
2. More on why executive compensation was not the problem.
3. The Irish pint isn't actually that traditional after all.
4. Hair dye as a countercyclical indicator.
5. "The true number may be lower" — you don't hear that one so much.
The McFarthest spot
Strange Maps reports:
Somewhere in South Dakota is the McFarthest Spot, the place in
the US geographically most removed from the nearest McD’s…If you
started out from this location, a few miles north of State Highway 20
(which runs latitudinally between Highways 73 in the west and 65 in the
east), you’d have to drive 145 miles to get your Big Mac (if you could
fly, however, it’d be only 107 miles).
They have a good map to go with it; I believe, by the way, that he means the continental U.S. and thus he is excluding Alaska. I would have expected the Nevada desert to win out.
*Too Big to Save*, by Robert Pozen
For the last two years I've been receiving requests — email and otherwise — for a readable, educating book on the financial crisis. And while various books on the crisis have had their merits, no one of them has fit that bill. Until now.
Robert Pozen's Too Big to Save: How to Fix the U.S. Financial System is the single best source for figuring out what happened. It is the go-to book if you are a non-specialist and want to understand: how credit default swaps work, the significance of Basel II, mark-to-market, how the various Fed bailouts operated, the meaning of the toxic asset plans, and many other matters.
This is not so much a presentation of a macro narrative on the crisis as an education manual on the moving parts. Its value stands above and beyond any particular partisan view. Pozen, by the way, offers policy recommendations at the rough rate of about one a page and most of them are quite micro. Even if I do not agree with everything he says, his proposals are unfailingly reasonable and well-argued and grounded in fact in some manner.
You can pre-order the book here.
Here is my previous post on the book.
By the way, Pozen does refer to blogs and he even cites blog posts.
The Danish mortgage model
The Danish model has another critical and innovative feature. Holders can retire their own mortgages by purchasing the same face amount of mortgage bonds at the prevailing market price. To prepay a mortgage by purchasing bonds, the home owner must give advance notice of several weeks to the MCI [mortgage credit institutions], which designates by lottery the specific bonds to be purchased. Thus, if rising interest rates or other factors cause mortgage bonds to trade at a discount, home owners can reduce the principal or retire the whole mortgage by purchasing an appropriate mortgage bond at a discount.
That passage is from Robert Pozen's new and notable Too Big to Save? How to Fix the U.S. Financial System.
You can't do this in the United States. You can pay off your mortgage but the "face value" of that transaction does not vary with market conditions. In essence the Danish system creates a new contingent claims market for homeowners who do not understand how to use interest rate futures and options. De facto, the homeowner receives some implicit insurance against the prospect of negative equity in the home.
Here is The Economist on the Danish model. Denmark also allows for speedy repossession of property, in case of default. Here is a more general discussion of the Danish model, which emphasizes transparency. Mortgage finance is conducted by explicitly designated institutions and originators retain a financial interest in the loan, even following securitization. The emphasis is on plain vanilla products. Here is Wikipedia on the Danish mortgage model. Here is a longer study.
“I like your lunatic”
Speaking of dinner, when the German naturalist Alexander von Humboldt
told a friend, a Parisian doctor, that he wanted to meet a certifiable
lunatic, he was invited to the doctor’s home for supper. A few days
later, Humboldt found himself placed at the dinner table between two
men. One was polite, somewhat reserved, and didn’t go in for small
talk. The other, dressed in ill-matched clothes, chattered away on
every subject under the sun, gesticulating wildly, while making
horrible faces. When the meal was over, Humboldt turned to his host. “I
like your lunatic,” he whispered, indicating the talkative man. The
host frowned. “But it’s the other one who’s the lunatic. The man you’re
pointing to is Monsieur Honoré de Balzac.”
The remainder of the article, which concerns why good writers are not always good speakers, is interesting as well.
Amazon reviews of milk
Here is a positive (five star) review:
At first, the idea of buying this milk online for hundreds of dollars
seemed absurd. Then I started thinking about the Romans. What would the
Romans think of this? Never mind the milk – the milk is common,
pedestrian, it's just milk. Even Romans had milk. No, it's the plastic
packaging. It is transparent, flexible, seals tightly and lasts
forever. The Romans would have never seen anything like it. So based on
this, I decided to buy something that the Romans would have paid any
amount for. Compared to Romans, I got it for a steal.
The Romans had legions and controlled a wide swath of the Earth.
They were the foundation of western civilization. But they never had a
Tuscan milk jug.
Here is a negative (one star) review:
If you have no weapons, I don't recommend Tuscan Milk. Instead, I
recommend getting a set of nunchucks or a club. A broom stick or a
brick are good too. If you can't find anything at all, you can buy the
book Combat Without Weapons available on Amazon. Tuscan Milk does not
work well as a weapon because it is hard to swing and difficult to
throw. It also can't be used to stop any bullets. I read on a website
that it can stop a knife, once. That's not really worth it to me.
Unless you are attacked by cats, and need a distraction, you probably
don't need Tuscan Milk. I wish someone had written a review like this
before I bought the milk. I hope this review is helpful.
The gallon costs $69.99 on Amazon. I thank Eric H for the pointer.
Addendum: Eric also points me to this review:
"Pros: Inexpensive, easy set up.
Cons: Short product lifecycle. No instruction manual. No optical/coax sound
output."
Assorted links
1. Why is tennis less competitive than golf?
2. Is time-space synaethesia useful? Yes. It's also pretty common.
3. Luis Goytisolo: next Nobel Laureate? Who's he? Here are the odds on the literature Prize.
5. Interview with Duflo and Banerjee: what works in the fight against poverty?
What I’ve been reading
1. Arvind Panagariya, India: The Emerging Giant. Why didn't this book get more attention? It's by far the best treatment of the economics of contemporary India.
2. Dancing in the Dark: A Cultural History of the Great Depression, by Morris Dickstein. I put it down. I care about the topic but so much of the content is going through the motions rather than framing the argument around the author's original insights.
3. To Serve God and Wal-Mart: The Making of Christian Free Enterprise, by Bethany Moreton. It sounds like one of those whiny books on Wal-Mart. But I found it insightful throughout and also well-written; the main point is that Wal-Mart can be understood as driven by a Christian service ethos. Parts of it serve as a good economic history of the South and of chain stores and big box stores.
4. Ben Casnocha summarizing The Time Paradox.
5. Nicholson Baker, The Anthologist. Sometimes Baker hits the spot, but this one didn't hold my interest. Poets might like it.
In the pile is Robert Service's Trotsky, which is self-recommending. On DVD, I very much enjoyed watching Tyson, which is chockful of social science in narrative form.
If air travel worked like health care
By the excellent Jonathan Rauch, this unexcerptable piece is very funny (and sad).
I wonder what it would be like to extend this series: if Whole Foods worked like health care, if the internet worked like health care, if higher education worked like health care…wait…higher education does work a bit like health care.
Portfolio theory, part II
With most infectious diseases, reducing everyone’s risk by a third would make
quite a difference across a whole population. But the problem with HIV is
that it is both an infectious disease and a behavioural one. I can get it by
sharing needles with other drug injectors, I can avoid it by using condoms
every time I have sex. If I know I have been vaccinated, will that make me
more likely to share needles, or less likely to use condoms? And if it does,
will that change outweigh the 30 per cent reduction in risk that comes with
the vaccine?
That is Elizabeth Pisani, here is more.
Assorted links
1. Russ Roberts on Masonomics.
2. The walking bratwurst restaurant.
4. Via Chris Masse, Google lets you vote for the idea that will help the most people.
5. Jim Olds lunches with Tyler. We ate at Masala Wok, a new Fairfax Indian restaurant which I like.