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Seven Cups of Coffee a Day May Lead to Hallucinations
Those who consume this volume in a day are three times more likely to have hallucinations than those who consumed 10 mg a day.
Seven cups contains 330 mg of caffeine. This is also known as one 16 ounce cup of Starbucks drip coffee.
Driving us crazy, one grande at a time.
- Lost $350b in 2008, 90% of which was lost in Q4
- Shrank by 20% to $1.5t, from a peak of $1.9t
- Lost 12.3%, according to Eurekahedge, compared to a 13% gain in 2007
- Rose 1% in December
Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system. More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.
[…and further to the position of Hedge Funds and their brethren at the banks…]
Financial firms of any type whose failure would pose a systemic risk must accept especially close regulatory scrutiny of their risk-taking. It is unacceptable that large firms that the government is now compelled to support to preserve financial stability were among the greatest risk-takers during the boom period.
—Ben Bernanke at the London School of Economics – link
Ayn Rand lives on in an ideology that, given the circumstances, refuses to meet with the facts.
Political Expertise – Krosnick
The Nature of Expertise – Robert Glaser
- AI + Expertise and Expert Systems – Luc Steels
- Inference Structures – Heuristics, screening for necessary information
- deep vs surface knowledge – surface knowledge and the advantage of screening but the disadvantage of brittleness and weak explanation and unclear boundaries
- problem solving methods – knowledge-use-level characterization
- generic tasks
A Model of Expertise – Vijay Krishna, John Morgan
- If experts have problems
- Experts are interested and have objectives
- Experts are prevalent and often conflicting
- Then how does one choose a cabinet?
- Incongruent incentives always leads to a withholding of information on the part of the experts
- Advice does not have any direct economic effect; at best it only influences economically relevant decisions. Thus experts’ advice has the nature of cheap talk
- Crawford & Sobel (1982) and strategic information transmission
- Ottaviani and Sorensen (1997) – “being on the mark.”
- experts may well neglect their own information in order to appear correct
- Bannerjee & Somanthan (1997) Friedman (1998) – continuum of potential experts
The art of conversation: eliciting information from experts – Vijay Krishna
- “Cheap talk games” in which communication is costless and non binding;
- and “persuasion games,” in which information becomes certifiable
- We can find these in lobbying, delegation, buyer-seller relationships, oligopolies
Cheap Talk – Joseph Farrell; Matthew Rabin
Cheap Talk Reputation and Coordination of Differentiated Experts – In-Uck Park
- Fully Honest advice may not be sustained if the profitability of service provision varies widely across problems
- As the number of experts increases due to a higher degree of specialization, the maximum equilibrium honesty level deteriorates
- Nonetheless, the equilibiria that pass a certain credibilitiy check on their punishment phases, implement the same (unique) honesty level regardless of the number of experts
- the customer can extract this honesty level by appointing a panel of only one or two (but no more) experts and “trusting” them all the time.
- ‘ Cheap Talk Referrals of Differentiated Experts in Repeated Relationship’, RAND Journal of Economics, 36, 391-411 (2005)
- Hedge fund performance: down 18.3% percent in 2008, their worst year on record.
- Fund closures
- 693 funds closed in the first nine months of 2008, 6.9% of the industry
- 920 funds may have been shut, through all of 2008, exceeding the all-time high of 848 in 2005
—Hedge Fund Research
shake hands with the government; make them your partner by acknowledging that their checkbook represents the largest and most potent source of buying power in 2009 and beyond. Anticipate, then buy what they buy, only do it first: agency-backed mortgages, bank preferred stocks, and senior bank debt; Aaa asset-backed securities such as credit card, student loan, and auto receivables.
—Bill Gross, PIMCO
You don’t have it in strong hands, you have flippers. These speculators are preventing the market from crashing now, and when they get out it could fall again.
We’re creating a shadow inventory of homes that will be right back on the market as soon as the economy and the housing market begin to improve. We could see a double-dip in the housing recession if that happens. Assuming we don’t overshoot, we could be back at equilibrium in 12 to 18 months, but there are reasons to believe we might overshoot. In past housing recessions, we didn’t see as many mortgages under water, so it didn’t matter if the focus was on speed and not on maximizing value. Now, the same banks that created the problems by mismanaging their risk are mismanaging the disposal of their assets.
PennyMac buys $558mm in home loans at 30-50 cents on the dollar from the FDIC that were acquired when First National Bank of Nevada collapsed.
Recovery rate of Tribue Co. is 1.5 cents on the dollar.
Reinhart + Rogoff – Aftermath
Wow…emerging and developed economies share common features following a banking crisis:
- Asset market collapses: real housing pricing decline 35% over six years; equity price collapses average 55% over three and a half years
- Profound declines in output and employment: unemployment goes up 7% on average over four years; and output falls (from peak to trough) an average of 9% over two years.
- Real value of government debt explodes: up an average of 86% in major post WW-II episodes. This is typicall associated with a collapse in tax revenues.
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