Jack’s Links

But the poorest 10% of consumers would lose 63% of their spending power, because they buy relatively more imported goods. The authors find a bias of trade in favour of poorer people in all 40 countries in their study, which included 13 developing countries.

They hired people–and, notice, more than one–to tell them that when you have a big loss in one year, you can use it to offset income

In many cases the requirements proposed by the department would require the university to implement extremely expensive measures to continue to make these resources available to the public for free.

  • Ben Carlson on Risk Taking: One point that is often lost on people is that years ‘far away’ from the mean are normal, not the other way around.


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Book Highlights: Antifragile

Antifragile: Things That Gain from Disorder (Incerto)
Nassim Nicholas Taleb

Antifragile: Things That Gain from Disorder (Incerto) by [Taleb, Nassim Nicholas]


  • I’d rather be dumb and antifragile than extremely smart and fragile, any time.


  • Which brings us to the largest fragilizer of society, and greatest generator of crises, absence of “skin in the game.”


  • Black Swans hijack our brains, making us feel we “sort of” or “almost” predicted them, because they are retrospectively explainable.


  • An annoying aspect of the Black Swan problem—in fact the central, and largely missed, point—is that the odds of rare events are simply not computable.


  • In short, the fragilista (medical, economic, social planning) is one who makes you engage in policies and actions, all artificial, in which the benefits are small and visible, and the side effects potentially severe and invisible.


  • no skill to understand it, mastery to write it.


  • To accord with the practitioner’s ethos, the rule in this book is as follows: I eat my own cooking.


  • philosophical notion of doxastic commitment, a class of beliefs that go beyond talk, and to which we are committed enough to take personal risks.


  • Hormesis, a word coined by pharmacologists, is when a small dose of a harmful substance is actually beneficial for the organism, acting as medicine.


  • I have called this mental defect the Lucretius problem, after the Latin poetic philosopher who wrote that the fool believes that the tallest mountain in the world will be equal to the tallest one he has observed.


  • You know, this economist had what is called a tête à baffe, a face that invites you to slap it, just like a cannoli invites you to bite into it.


  • Finally, a thought. He who has never sinned is less reliable than he who has only sinned once. And someone who has made plenty of errors—though never the same error more than once—is more reliable than someone who has never made any.


  • treating an organism like a simple machine is a kind of simplification or approximation or reduction that is exactly like a Procrustean bed.


  • employees, who have no volatility, but can be surprised to see their income going to zero after a phone call from the personnel department.


  • if you supply a typical copy editor with a text, he will propose a certain number of edits, say about five changes per page. Now accept his “corrections” and give this text to another copy editor who tends to have the same average rate of intervention (editors vary in interventionism), and you will see that he will suggest an equivalent number of edits, sometimes reversing changes made by the previous editor. Find a third editor, same.


  • Over my writing career I’ve noticed that those who overedit tend to miss the real typos (and vice versa). I once pulled an op-ed from The Washington Post owing to the abundance of completely unnecessary edits, as if every word had been replaced by a synonym from the thesaurus. I gave the article to the Financial Times instead. The editor there made one single correction: 1989 became 1990. The Washington Post had tried so hard that they missed the only relevant mistake.


  • Restaurants do not take your order, then cut the cake and the steak in small pieces and mix the whole thing together with those machines that produce a lot of noise. Activities “in the middle” are like such mashing.


  • “Provide for the worst; the best can take care of itself.”


  • people tend to provide for the best and hope that the worst will take care of itself.


  • I am fond of the brand of the unexpected one finds at parties (going to parties has optionality, perhaps the best advice for someone who wants to benefit from uncertainty with low downside).


  • For if you think that education causes wealth, rather than being a result of wealth, or that intelligent actions and discoveries are the result of intelligent ideas, you will be in for a surprise.


  • As per the Yiddish saying: “If the student is smart, the teacher takes the credit.” These illusions of contribution result largely from confirmation fallacies:


  • You would think that the people who specialized in foreign exchange understood economics, geopolitics, mathematics, the future price of currencies, differentials between prices in countries. Or that they read assiduously the economics reports published in glossy papers by various institutes. You might also imagine cosmopolitan fellows who wear ascots at the opera on Saturday night, make wine sommeliers nervous, and take tango lessons on Wednesday afternoons. Or spoke intelligible English. None of that.


  • Theory should stay independent from practice and vice versa—and we should not extract academic economists from their campuses and put them in positions of decision making. Economics is not a science and should not be there to advise policy.


  • As Yogi Berra said, “In theory there is no difference between theory and practice; in practice there is.”


  • the fragilista who mistakes what he does not understand for nonsense.


  • charlatans are recognizable in that they will give you positive advice, and only positive advice, exploiting our gullibility and sucker-proneness for recipes that hit you in a flash as just obvious, then evaporate later as you forget them. Just look at the “how to” books with, in their title, “Ten Steps for—” (fill in: enrichment, weight loss, making friends, innovation, getting elected, building muscles, finding a husband, running an orphanage, etc.). Yet in practice it is the negative that’s used by the pros,


  • For the Arab scholar and religious leader Ali Bin Abi-Taleb (no relation), keeping one’s distance from an ignorant person is equivalent to keeping company with a wise man.


  • Urban planning, incidentally, demonstrates the central property of the so-called top-down effect: top-down is usually irreversible, so mistakes tend to stick, whereas bottom-up is gradual and incremental, with creation and destruction along the way, though presumably with a positive slope.


  • “do you have evidence that this is harmful?” (the same type of response as “is there evidence that polluting is harmful?”). As usual, the solution is simple, an extension of via negativa and Fat Tony’s don’t-be-a-sucker rule: the non-natural needs to prove its benefits, not the natural—


  • Second principle of iatrogenics: it is not linear. We should not take risks with near-healthy people; but we should take a lot, a lot more risks with those deemed in danger.


  • Religion has invisible purposes beyond what the literal-minded scientistic-scientifiers identify—one of which is to protect us from scientism, that is, them. We can see in the corpus of inscriptions (on graves) accounts of people erecting fountains or even temples to their favorite gods after these succeeded where doctors failed.


  • I believe in the heuristics of religion and blindly accommodate its rules (as an Orthodox Christian, I can cheat once in a while, as it is part of the game).


  • For the Romans, engineers needed to spend some time under the bridge they built—something that should be required of financial engineers today.


  • Words are dangerous: postdictors, who explain things after the fact—because they are in the business of talking—always look smarter than predictors.


  • Anything one needs to market heavily is necessarily either an inferior product or an evil one.


  • my experience is that most journalists, professional academics, and other in similar phony professions don’t read original sources, but each other, largely because they need to figure out the consensus before making a pronouncement.


  • First, the more complicated the regulation, the more prone to arbitrages by insiders. This is another argument in favor of heuristics.


  • Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty.

Jack’s Links

Back at it again with the fresh links:

A twenty punch card investment portfolio is – by its nature – a concentrated investment portfolio. If I had run my portfolio like that I would have come out of the crisis with maybe six stocks, turfed one or two by now and added a single stock in 2012.

1.   The Fed raised rates last December, and just a week ago indicated that it is likely to raise rates again later this year.  Is that doing your best to inflate?

2.  The ECB and the BOJ have mostly disappointed markets this year, offering up one announcement after another that was less expansionary than markets expected.

So no, they are not doing their best.  If at some point they do in fact do their best, and still come up short, then by all means given them help.

I continue to be a reviewer on failed replications and re-analyses of the data — signing my reviews as I did in the Ranehill et al. (2015) case — almost always in favor of publication (I was strongly in favor in the Ranehill case). More failed replications are making their way through the publication process. We will see them soon. The evidence against the existence of power poses is undeniable.

A poster child for this problem is China and its narrowly pegged currency. In a world of freely floating currencies, the US dollar would weaken and the Chinese yuan would strengthen because the US runs a large trade deficit with China and the rest of the world.

Where does one start? No, China is not intervening to lower the value of the yuan; they are intervening to raise its value. And no, textbook theory does not say that exchange rates should adjust in the long run to balance trade in goods and services, unless long run means 1,000,000,000 years, in present value terms. But in that case the current US deficit presents no puzzle; it hasn’t lasted for a billion years.

Notice the schoolmarmy “And Trump still has not apologized to the president of the United States for an effort that many African-Americans saw as an effort to delegitimize the first black president.” As if that is relevant to a fact check.

Our findings provide empirical evidence that ride-sharing services such as Uber significantly decrease the traffic congestion after entering an urban area.


In other words, she would prefer to purposely make some other people worse off with higher taxes on what they buy (sales taxes) or earn (income taxes) than to raise the same amount of revenue by raising no taxes but instead legalizing a good so that the revenues are taken from people who are better off paying the revenues than buying in an illegal world.

That’s either ignorant or cruel, or both.

Books: I read a bunch of these little time sinks recently:

Get A Grip: One of a seemingly endless stream of fable-centric business management books. This one is about the “Entrepreneurial Operating System” that comes from an eponymous consulting group. Seems to be in the zeitgeist. More concrete than most other fabley books, and interesting take on the really popular notion of getting the right people on the bus then finding their seat later — basically defines seats on the bus first and then goes to fill them.

Get A Grip: An Entrepreneurial Fable . . . Your Journey to Get Real, Get Simple, and Get Results by [Wickman, Gino, Paton, Mike]

Antifragile:  Classic Taleb book, I’m thinking of doing a new kind of post on this one.

Antifragile: Things That Gain from Disorder (Incerto) by [Taleb, Nassim Nicholas]

The Ideal Team Player: Another business fable, this one from the Table Group, all about their three ‘virtues’, being humble, hungry, and smart. It may be because I haven’t read any of the other books in the series for a while, but I was more impressed than I thought I would be with their definitions of the virtues.

Humble is about not being arrogant, but also not being over-modest. Subtle distinction that I was surprised they made.

Hungry is pretty straight forward, and I liked that they mentioned that a candidate mentioning ‘work-life balance’ too many times is a red flag. All businesses want to think they let their employees find balance, but hiring someone who is focused on how much they won’t have to work is questionable.

Smart is focused on being people-smart, and people who can’t take social cues are undesirable as teammates.

As per usual for Lencioni, there were about a dozen awkward references to prayer, completely unrelated to the story, which I could have done without.

The Ideal Team Player: How to Recognize and Cultivate The Three Essential Virtues by [Lencioni, Patrick M.]

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