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• Credit Default Swaps: Proudly the Tool of the Devil Again
• Protectionism and the Chinese Box of the Renminbi
• QOTD: John McCain’s 15% U.S. GDP Cut
• Who Files for Bankruptcies?
• Books of the Week

 

Persistence Running, Bourgeoisie Survivalists, and Toes & Things

What is the current preoccupation with barefoot running? Is this some sort of burbling bourgeoisie survivalist movement? Inquiring minds want to know why so many people are talking about wimpish current runners, persistence hunting, Vibram shoes, being born to run, etc.

Heck, even Google's Sergey Brin has been absorbed into this running/toes/shoe stuff. What is going on out there? Why does it feel like the world newly revolves around public displays of toes?

I'll confess upfront to finding the whole thing fascinating -- it crosses my fondness for geek sports with my love of running tech, so I'm all for the change - but the bourgeoisie survivalist thing just keeps come back to me. Mind you, the thought of hordes of people in Pearl Izumi and Vibram shoes chasing rogue sheep across a post-apocalyptic Cormac-ian landscape is just surreal enough to be intriguing.  

Readings

• Amazon breaks its dot-com record price, a decade later (Bloomberg)
• U.S. Risks Japan-Like ‘Lost Decade’ on Stimulus Exit, Koo Says (Bloomberg)
• Why Canada's Housing Bubble Will Burst (Tyee)
• Calpers Bets $1 Billion Bush Aide Can Exploit Health Changes (Bloomberg)
• Rally fuelled by cheap money brings a sense of foreboding (FT)
• Tracking of the NWA flight that overshot Minneapolis by 150 miles (FlightAware)

 

Arbitrage in Baseball: Did Moneyball Not Work, or Work Too Well?

Did Moneyball work – the idea that you could exploit inefficiencies in baseball long-timers’ approach to buying and selling players? And, to the extent it did, has its advantage been blunted by publicity? In other words, perhaps the Moneyball edge has been arbitraged away.

That is the argument in a new TNR piece “Against Moneyball”. The author, a longtime critic, argues that whatever advantage thinking in sabermetric sorts of ways may have had, those advantages have now been competed away, much like what happens in over-loved trading strategies.

Here is an excerpt:

Except it just hasn't proven itself to work consistently. His theory that only college pitchers should be drafted over high school ones because of their experience sounded plausible. But it flew in the face of the Atlanta Braves, who won their division 14 years in a row from 1991 to 2005, and relied on pitchers drafted straight out of high school all the while. Beane was also flippant, especially to the ears of anyone who'd ever faced the Yankees' Mariano Rivera in the postseason, about how there was no need to pay exorbitantly for a closer because just about anyone could close--but then he traded away one of his vaunted draft picks for a reliever who turned out to be lousy anyway.

And yet, Billy Beane will always be something of a patron saint in baseball. Within the endless repository of the Internet, there are still dozens of studies extolling his virtues even now. They conveniently avoid the fact that Beane has never won the World Series, or even got to it. His teams have only made it to the playoffs in two of the last seven seasons. The last was in 2006. Since then the team has never been above .500, including a particularly dismal 75 wins and 87 losses this season.

More here.

 

Robert Allen on Why the Industrial Revolution Was in Britain

Great Oxford talk from one of my favorite economic historians, Robert Allen, on why the Industrial Revolution was in Britain:

[via Yada-Yada]

 

TwitterCrunch? Company Value vs. Story Frequency on TechCrunch

Some think that the popular TechCrunch site is dominated by stories about Twitter. Is that true, however? While the site is unabashedly about early-stage and emerging companies in technology, so stories about Twitter are to be expected, I thought it would be fun to see whether stories there are as dominated by Twitter as some think.

The following figure compares company value and TechCrunch mentions (from the site’s API) for various companies. Value is either public market value, or a best estimate from recent funding rounds/acquisitions.

So, Twitter comes up much more often than you would expect given its value, that shouldn’t be too surprising given the TechCrunch focus on emerging companies. I was somewhat surprised to see Apple show up less often than you might expect, while Google was the focus somewhat more than its value/size would suggest.

Should we rename TechCrunch to TwitterCrunch though? No. It looks more like Mike & Co. are actually fairly democratic in what they write about, from Twitter to Google, and everything inbetween.

 

Readings: $20, Globalization, Industrial Revolution, China, Groups, etc.

• Stephen Roach on China’s puzzling economic data (CFR)
• The $20 Theory of the Universe (Esquire)
• The Stock Market Has Never Been This (Intermediate-Term) Overbought (Hussman)
• Why was the Industrial Revolution in Britain? (Tawney Lecture)
• China must keep its eyes fixed on the exit (FT)
• Has the world economy reached its globalization limit? (Arxiv)
• PopTech live (PopTech)
• A Group Is Its Own Worst Enemy (Shirky)
• Which tells us more: The last 7 at bats or 7 at bats against this pitcher?  (BeyondBoxScore)

 

Hiding on a Vermont Hillside From H1N1

Good talk from John Barry at MIT about H1N1 influenza:

 

Munchau on Minsky: Things are Worser

Good column from Wolfgang Munchau in the FT glossing Hyman Minsky to argue that we've made an unstable system less stable:

Our present situation can give rise to two scenarios - or some combination of the two. The first is that central banks start exiting at some point in 2010, triggering another fall in the prices of risky assets. In the UK, for example, any return to a normal monetary policy will almost inevitably imply another fall in the housing market, which is currently propped up by ultra-cheap mortgages.

Alternatively, central banks might prioritize financial stability over price stability and keep the monetary floodgates open for as long as possible. This, I believe, would cause the mother of all financial market crises - a bond market crash - to be followed by depression and deflation.

In other words, there is danger no matter how the central banks react. Successful monetary policy could be like walking along a perilous ridge, on either side of which lies a precipice of instability.

For all we know, there may not be a safe way down.

More here.

 

Hand Sanitizers Uber Alles: Doubling in 12 Months

In case you were ever doubtful that H1N1 flu fears wouldn't cause sanitizer sales to spiker higher -- something I"ve written about here a number of times -- here is some data making the point fairly convincingly. According to Panjiva, hand sanitizer shipments to the U.S. have doubled year-over-year. Too bad Purell is such a teensy part of J&J sales.



 

Martin Wolf: When Banks Attack

Good Martin Wolf column im the FT on the largely spurious protests being made by banks in the face of calls for serious reform:

In an interview with the FT, Marcus Agius, chairman of Barclays, indicates perfectly what the backers of regulation are up against. His attack starts by insisting upon a "level playing field" across jurisdictions. He also argues against excessive capital requirements, since "the next time the banking system wants capital, it won't be supplied [if] the potential new investors [don't] see the [attraction]". Moreover, "one of the other consequences will be that credit will become more expensive and [that] is not conducive to a return to economic growth around the world." He also insists that "banks should not be vilified for taking risks".

...We must not get diverted by the financial sector's opposition or by populist rage. We must focus, instead, on the core issue. Trying to make financial systems safer has made them more perilous. Today, as a result, neither market discipline nor regulation is effective. There is a danger, therefore, that this rescue will lead to still greater risk-taking and an even worse crisis at some point in the not too distant future.

Either we impose a credible threat of bankruptcy, or institutions we have to support are made safer, or, better, we have both of these.

More here.
 

Readings: Yuan, Pie, Storms, Oil, Web 2, and Carbon/GDP

• Beggar Thy Neighbor? Ironies in China's currency policy (World Bank)
• American Pie (Quinn)
• Despite Heavy Losses, Finance Industry Stays Intact (fins)
• In a Quiet Storm Season, State Debates Insurance (Ledger)
• 'Four Saudi Arabias' Needed to Maintain Oil-Guzzling Ways (Epoch)
• Web Squared: Web 2.0 Five Years On (O'Reilly)
• World carbon emission intensity is declining (DLC)

 

Frontline: The Warning

Frontline's latest on the financial crisis -- The Warning -- is must-see web TV. Watch it now.


 

Cash vs Cash: Apple, Microsoft and Google

Just because a few people asked, here is a cash comparison over the last few years at Microsoft, Google and Apple. (Again, this is via Gridstone.)


 

Readings: Android, Collapse, Distance, Worst Man, Gladwell, etc.

• U.S. collapse is imminent (Farrell/Marketwatch)
• The impending Android avalanche (TechCrunch)
• Third-quarter VC funding may have ticked higher (TechCrunch)
• Defining too big to fail in practical terms (Morningstar)
  
• Distance Is Not Dead: Social Interaction and Geographical Distance in the Internet Era (Arxiv)
• "If you're reading this...then you are the worst man in history" (Source)
• Gladwell's new book: What the Dog Saw: And Other Adventures (Amazon)

 

Apple Does the Smaug Thing

Lots of chatter this morning about the increasing size of the Apple (AAPL) cash hoard, at least as measured by cash and marketable securities. Here is a graph of Apple's Smaug-esque hoard's growth over the last six years (via Gridstone):