"So there are Oliphaunts. But no one at home will ever believe me."
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Signal to noise ratio

Some worthwhile thoughts on the European bail-out. Well done, violent protestors!

1. The fundamental cause of the financial crisis has been people and institutions thinking they are more wealthy than they are; this spread to Europe as well and now we are seeing the comeuppance.

3. The major European powers would not have come up with a nearly $1 trillion bailout, also involving de facto loss of ECB independence, unless they were scared ****less.

4. They are trying to do a version of TARP-in-advance-of-the-panic and in my view that panic would have come today.

9. This doesn't solve any of the basic fiscal problems, so ultimately it raises the stakes and creates a chance of even greater financial failure.  Simon Johnson comments.

Read the whole thing. Obviously I don’t have access to news about the finanical system other than what is publicly available, so I have to wonder how the basic market signals about debt and borrowers were misread by so many, for so long. It seems like the system is so full of noise (bad data) that assessing the true value of anything is impossible. Good luck to those who make their living placing bets.

(From “Simple thoughts on Europe“, via Marginal Revolution.)

May 11, 2010   Comments Off

Unraveling

This reminds me of a short story by Italo Calvino, in which an aged accountant awaits the utter collapse of the bank where he has worked his entire life, waiting the entire time for the error of pennies he had made as a young man to multiply and compound until its magnitude dwarfed the holdings of the bank.

A bad day in the financial markets was made worse by an apparent trading glitch, leaving traders and investors nervous and scratching their heads over how a mistake could send the Dow Jones Industrial Average into a 1,000-point tailspin.

I strongly suspect that the true state of the market is more like something out of a Borges short story.

Hard to put my pessimism into words without sounding ridiculously melodramatic.

(From “Dow Takes a Harrowing 1,010.14-Point Trip – WSJ.com“)

May 7, 2010   Comments Off

Take Note

I’ve been experimenting with some neat apps for the Mac, iPhone/iPod and the iPad. These are apps that are designed to be “as simple as possible,” in opposition to the usual philosophy of “having as many features as possible.”

The following are two note taking apps that are designed to work together, both with and without the Internet. Yes, apps for note taking. Note taking is a big deal. Suppose you’re starting a new position you have to write down a lot of obscure facts. Or you might need to remember the correct temperature for poaching eggs or the name of a set of legos or the title of a book to give as a gift. The Mac has an actual stickies app, which uses a similar approach. The problem is that it does really scale well—you can only have as many notes as will physically fit on your screen.

The first application I started using, for the Mac, is Notational Velocity. This is a free application developed as a non-commercial endeavor by public spirited hackers. It’s tiny and unobtrusive so you can leave it running all day. When something pops into mind, you type a title, hit return, and type your note. As you are typing in your title, the app will also show you other notes you’ve entered that might be relevant.

The second, for the iPad and iPhone, is Simplenote. This is basically the same idea for the iPad and iPhone.

What’s great is that if you create an account at http://simplenoteapp.com/, then the notes that you take with Simplenote on your iDevice are synced automatically to the notes on your computer stored in Notational Velocity.

All free. (Okay, Simplenote has advertisements, and you can pay $8.99 to turn the ads off.)

The idea behind both of these is to make it ridiculously easy to record a short thought, and to make them always available in searchable, wherever you are. They share the idea that good notes do not need to be any longer than a sticky note—one or two sentences (although they certainly let you enter more). You never have to save the notes. Every key you type is recorded to the computer for you. They never get lost and the computer, or iPad, or iPhone, will find it for you.

Pretty cool.

May 4, 2010   1 Comment