Results for “from the comments”
2066 found

Bernard Guerrero, from the comments

by  Tyler Cowen in

Sub-prime delinquency has increased drastically in period-to-period % terms, but from an unnaturally low base. What has driven the current crisis is the extreme effective leverage applied by some of the ABS buyers. You can make a AAA tranche out of sub-prime paper, but only by putting it in a last-loss position vis-a-vis a first-loss "equity" tranche. Buy that equity tranche and you’ve already applied leverage. Buy it on deep margin and you’ve got a lever big enough to shift the Moon. And the slightest bump wipes you out. This has very little to do with work-out difficulties (and work-outs often don’t, um, work out anyway) or less info on the part of new-style lenders (they have less info, to be sure, but it shows in pricing differentials; I regularly see us undercut by credit unions that know their customers well). It has to do with the risk that must exist if you’re getting outsized returns, even if you don’t see it.

Here is the original post.

Pulled from the comments on Alex

by  Tyler Cowen in

The Bartels result may be just showing that in an economy when
average incomes are are rising rapidly, the low income groups benefit
more than the higher income groups.  Since WWII, with the exception of
Eisenhower, no Republican was president when the average income was
rising rapidly.

Here is the link for a relevant graph.  Here is a graph of the Bartels result.  And here is Greg Mankiw on inequality and unions, in case you missed it, perhaps Greg’s best post so far.

Monday assorted links, comments, and jabs

by  Tyler Cowen

1. A claim that we are in a new world of RBC theory.

2. Orson Welles on Woody Allen.

3. Indian books published in English translation in 2023.

4. By the way, the strongest movie actor GOAT contenders from abroad are Chow Yun-Fat, Jackie Chan, Mifune, Juliette Binoche, Isabel Huppert, Marcello Mastroianni, Klaus Kinski, and Max von Sydow.  Chow Yun-Fat and Max von Sydow are my personal favorites, though I am not sure they are foreign winners in more objective terms.  British people don’t count for this designation, though Charlie Chaplin is a good dark horse pick (though not the winner) for the broader designation.  I can’t bring myself to mention the Putin lover from France.  Mel Gibson is higher in the rankings than many people wish to admit, and he is Australian, sort of, though most of all a creature of Hollywood.  Bollywood is a whole separate thing, but they have some definite contenders.  As for Marlon Brando, I think too many of his performances now come across as excessively mannered.  Where is his cult following?  Somewhere in Osaka?  He was very talented but seems of the past.

5. Any “very heavy” reliance on real shocks to explain the macro of the last two years has to account for why 2021 had high growth rates, in spite of supply chains then being quite tangled.  And why prices haven’t gone back down to their original levels?  And what happened to aggregate demand, once the Fed turned its attention to the problem?  There simply was a huge, negative AD shock in recent times, at least under any non-tautological definition of aggregate demand.  Why didn’t that crush us?  Any account needs to address these issues.

6. The labor market DNUs from Argentina.

Tyrone, your local Straussian, comments on “Trap House”

by  Tyler Cowen in

I took it to refer to a place where drugs are sold, but you might be trapped either by the police or by the attendant lifestyle and its appeals.  The Yale Federalist Society was proclaming itself comparable to such a trap house, and thus at the same time broadcasting both its appeal and its potential danger.

By calling itself such a trap house, in a funny self-referring way it became one.  A kind of opposite to the Liar’s Paradox.  How many other claims become true by the mere act of making them?  “I am making a claim now” would be one of them.

Tyler: So says Tyrone.  But he is very consistently wrong.  And if you don’t know what Tyrone is talking about in this incoherent, philosophically naive missive, it is not worth trying to find out.

A quiet war, with mutual option values on both escalation and further Clubhouse comments

by  Tyler Cowen in

‘Neither Israel nor Iran want to publicly take responsibility for the attacks because doing so would be an act of war with military consequences,’ Hossein Dalirian, a military analyst affiliated with Iran’s Islamic Revolutionary Guards Corps, told The New York Times in a Clubhouse discussion on Thursday.

Here is the full NYT article.

From the AstraZeneca comments

by  Tyler Cowen in

Transverse Myletitis has a background incidence of 4/million in the US. Currently there are 2 cases reported out of 18,000 people who have already been administered the vaccine. Of those two, one was diagnosed with concurrent MS (another neurodegenerative autoimmune condition known to cause TM and whose population has a 2000% relative risk increase in developing TM depending on criteria used) and one has not had details released.

With 18,000 data points, a “1%” risk would require there to be 178 missed cases. Odds of that are astronomically low. Much more likely, if there were any real correlation (which again seems rather unlikely) we are looking at something 80+) and would STILL result in fewer deaths than waiting. If the choice were this or letting Covid become endemic with just an influenza fatality rate, this would again be the more ethical choice. Economically 1.1 million being totally disabled would be somewhere around $3 trillion, which again would be vastly cheaper than ending transmission through current social policies. In terms of raw lives lost, a 1% incidence would easily be less than letting Covid run.

People say we need more numbers, but funny enough their doom and gloom scenarios invariably involve scenarios that are necessarily imply that all the trial data to date is spurious and/or that even if true are less deadly than waiting.

And note that this argument has no justification for pausing the trial. With 2 data points, 1 of which is almost certainly spurious for the general population, the solution is to keep administering it.

Reality is that regulators and drug companies are simply not doing a cost benefit calculation that weights the currently dying at all in the US. I am hoping that the drug companies are being amoral profit seekers and are hoping to just browbeat the FDA once the Brits get things settled and the US policy scene (one way or the other) stops being about Mr. Trump.

That is from MR commentator Sure.  And also from him:

The other thing to remember is that a lot of pharma’s actual business is not as much discovery of new entities, rather they buy up rights to a lot of those and then take somebody else’s work through the years long process of approval. For big pharma much of their comparative advantage is in navigating an expensive, byzantine approval process. Take that away and they might face far more competition from smaller firms and potentially foreign firms that can manage the new landscape better.

Lastly, pharma lives in fear of the regulators while trying to suborn them. Going against them FDA bureaucrats (who are unlikely to want to de facto kill their own jobs) risks one of them grinding an axe and slow walking a blockbuster approval or fast walking a biosimilar approval. Either of those actions will easily change the net profit for a pharma firm by more than they could possibly make off a Covid vaccine.

Currently, faster has very little upside for them. They have pre-commitment so they are going to get paid even if they are slow. There are dozen odd vaccines coming down the pike and one, maybe two, will take the lion’s share of the market once the immediate crisis is over. They are mostly doing this to win goodwill and being the guy whose vaccine kills 2,000 people is bad if your competitors kill only 5. From a public health perspective, we would be better with the less safe vaccine a month sooner than the safer vaccine a month later (and ideally we would get both and swap promptly). For the pharma firms, the calculus just goes towards being as slow as the rest of pack and being ungodly thorough.

Perhaps things will improve in a few weeks’ time.

How should the Fed respond to Trump’s comments?

by  Tyler Cowen in

The president tempered his criticism by saying that Chairman Jerome Powell — his own appointee — is a “very good man.” He also stopped short of directly calling on the Fed to stop raising interest rates.

“I’m not thrilled,” he said. “Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time, I’m letting them do what they feel is best.”

Here is the story.

It is probably best for the Fed to simply pretend he did not say this.  Trying to respond simply escalates the dispute and risks a repeat comment.  That said, the Fed may make its future plans concerning interest rates hazier, thereby offering less forward guidance.  That will give Trump less of a target in the short run, and furthermore “the market,” with fuzzier expectations to begin with, won’t be able to estimate whether the Fed was swayed by Trump or not.

In any case, the end result will be a modest increase in economic uncertainty.

I would stress, however, that we do not have a politically independent Fed to begin with.  Such an arrangement is impossible in a democracy, given that current institutional protections for the Fed always can be taken away by Congress and the president.  What we do have is bounds for independence, and those bounds just narrowed, and not for the better.  If I were going to narrow the political independence of the Fed (and I am not advocating this), interest rates are not even the correct variable to choose.  Why not some measure of how much the Fed is aiding the economy in a downturn?  Interest rates may or may not be the most powerful tool there.

The White House itself is trying to pretend the event didn’t happen:

Shortly afterward, the White House issued a statement saying Trump’s comments were merely a “reiteration” of his “long-held positions,” and that his “views on interest rates are well known.”

“Of course the President respects the independence of the Fed,” it said. “He is not interfering with Fed policy decisions.“

And here is another recent remark by Trump, or was it?

Internet comments, before the internet

by  Tyler Cowen in

In the four years that Ayanna Chisholm has worked collecting tolls out of tiny glass booths at the Holland Tunnel and elsewhere in New Jersey, there have been several constants. There are familiar commuters, malfunctioning toll arms, occasional scofflaws — and an incessant barrage of come-ons, sexual comments, lecherous stares and crude gestures from male motorists.

Some of Ms. Chisholm’s colleagues say they have been subjected to drivers exposing themselves. The fusillade is especially menacing because it is inescapable, the workers confined to small hutches on the highway.

Like other women in her profession, Ms. Chisholm, who works for the Port Authority of New York and New Jersey, has learned to wear little makeup, crack her booth’s window open as little as possible, and drop change into waiting hands to avoid drivers who try to stroke her palm.

That is from the NYT, and of course the same was true decades ago.  No one from New Jersey should be surprised at how most internet comments have turned out.

Sentences to ponder, MR fact of the day — who leaves on-line comments?

by  Tyler Cowen in

Americans who leave news comments, who read news comments, and who do neither are demographically distinct. News commenters are more male, have lower levels of education, and have lower incomes compared to those who read news comments.

That is from Dr. Natalie (Talia), Jomini Stroud, Cynthia Peacock, and Emily Van Duyn, via the excellent Laura Miller.

Comments are open on this one, people…

What kind of blog post produces the most comments?

by  Tyler Cowen in

Imagine if I wrote a post that just served up a list like this:

The people who deserve to be raised in status:

Norman Borlaug, Jon Huntsman, female Catholics from Croatia, Scottie Pippen, Yoko Ono, Gordon Tullock, Uber drivers, and Arnold Schoenberg,

And

The people who deserve to be lowered in status:

Donald Trump, Harper Lee, inhabitants of the province Presidente Hayes, in Paraguay, doctors, Jacques Derrida, Indira Gandhi, and Art Garfunkel

You might get a kick out of it the first time, but quickly you would grow tired of the lack of substance and indeed the sheer prejudice of the exercise.

Yet, ultimately, the topic so appeals to you all.  So much of debate, including political and economic debate, is about which groups and individuals deserve higher or lower status.  It’s pretty easy — too easy in fact — to dissect most Paul Krugman blog posts along these lines.  It’s also why a lot of blog posts about foreign countries don’t generate visceral reactions, unless of course it is the Greeks and the Germans, or some other set of stand-ins for disputes closer to home (or maybe that is your home).  Chinese goings on are especially tough to parse into comparable American disputes over the status of one group vs. another.

I hypothesize that an MR blog post attracts more comments when it a) has implications for who should be raised and lowered in status, and b) has some framework in place which allows you to make analytical points, but points which ultimately translate into a conclusion about a).

Posts about immigration, the minimum wage, Greece and Germany, the worthiness of entrepreneurs vs. workers, and the rankings of different schools of thought or economists all seem to fit this bill.

Sometimes I am tempted to simply serve up the list and skip the analytics.

Addendum: Arnold Kling comments.

Banksy Comments on the Nobel Prize?

by  Alex Tabarrok in

Mashable: Street artist Banksy set up a stall in New York’s Central Park Saturday, selling his original pieces — worth tens of thousands of dollars each — for $60.

The event was documented on video and posted on Banksy’s website. It took several hours for the first artwork to be sold, to a lady who managed to negotiate a 50% discount for two small canvases. There were only two more buyers, and by 6 p.m. the stall was closed with total earnings of $420.

For comparison, in 2007 Banksy’s work “Space Girl & Bird” was purchased for $578,000, and in 2008 his canvas “Keep it Spotless” was sold for $1,870,000.

What would Fama, Shiller and Hansen say about these asset prices?

Maximizing revenue for non-reproducible art is a matching process, the artist must find the handful of buyers in the world willing to pay the most (see An Economic Theory of Avant-Garde and Popular Art) so perhaps one can explain this as a failure of marketing.

An alternative explanation is that modern art is a bubble, people buy only because they expect to sell to others–take away this expectation and the art doesn’t sell. (Fashions and fads can help the latter explanation a long but there still needs to be an expectation of a future sucker buyer.)

Or perhaps Banksy is commenting on an earlier Nobel winner.