Stilltitled

The fact that the group who read the absurd story identified more letter strings suggests that they were more motivated to look for patterns than the others. And the fact that they were more accurate means, we think, that they’re forming new patterns they wouldn’t be able to form otherwise.
—Steven J. Heine, a professor of psychology at the University of British Columbia, via NYT

The real economy is barely recovering while markets are going this way. I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U-shaped. That might be in the fourth quarter or the first quarter of next year.

In the short run we need monetary and fiscal stimulus to avoid another tipping point and to avoid deflation, but now this easy money has already started to create asset bubbles in equities, commodities, credit and emerging markets. For the sake of achieving growth stability again and avoiding deflation, we may be planting the seeds of the next cycle of financial instability.

—Nouriel Roubini

Talk from John Temple @ the Berkeley conference on News

We are in a recovery, the recession does seem to be ending, and there’s a ton of cash on the sidelines getting a zero percent return

—Robert Doll, CIO at BlackRock, via USA Today

entrepreneurs: Entrepreneurs are people who take risks and, by and large, don’t know they are taking them. This happens with mergers and acquisitions, but it also happens at the level of small-scale entrepreneurs. In the United States, a third of small businesses fail within five years, but when you interview those people, they individually think they have between 80 percent and 100 percent chance of success. They just don’t know.

Greenspan’s admission to congress: He basically said that the framework within which we had been operating was false, and coming from Greenspan, that was impressive

[that financial institutions are rational agents.] That seemed to me to be ignoring not only psychology but also economics. He appeared to have a belief in the magic power of the market to discipline itself and yield good outcomes.

delusional optimism: The people who took on subprime mortgages were thoroughly deluded. One of the main ideas in behavioral economics that is borrowed from psychology is the prevalence of overconfidence. People do things they have no business doing because they believe they’ll be successful.

prospect theory: People [are] willing to gamble on in the hope of recovering their losses.

—Daniel Kahneman, interview in Finance & Development for the IMF

Thanks, xxxx! Great seeing you on Sunday, too. I’ll count on being there at 4:30 for the rehearsal, and I’m thrilled to be reading. What time does the dinner start?

Weddings go haywire? C’mon. No way. It’s going to be perfect.

My one requirement is that I must be suspended from the rafters by durable elastic rope, so I can rise and fall with the tempo of my voice. It’s really the only way I can fulfill my duties as a reader. Don’t worry, though. This is fairly standard. Be assured that St. Jude and I have a long history in this capacity.

I have found a supplier in East Dundee, Illinois (http://www.theecwcorp.com/cord.html). We will need two (2) fifty (50) foot lengths of “elastic shock cord” with torque balanced braids around respective galvanized steel thimble end-points for termination at the rafters. These will couple with the existing anchor-points at St. Jude. ECW can handle the customization, but be sure about the braids. Those are important. I will bring my own harness.

Expect ECW to drop-ship these items at St. Jude on Thursday. Joseph will store them in the nave-locker for Friday’s rehearsal and will have everything in place for the 4:30 start-time.

I’m really looking forward to this. See you soon!