economics

police responding to N Yale/Macrum - report of a “Beer Olympics” taking place - participants urinating on cars

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A 2013 study published in the journal Circulation found that men who skipped breakfast had a significantly higher risk of coronary heart disease than men who ate breakfast. But, like almost all studies of breakfast, this is an association, not causation. […]

In a paper published in The American Journal of Clinical Nutrition in 2013, researchers reviewed the literature on the effect of breakfast on obesity to look specifically at this issue. They first noted that nutrition researchers love to publish results showing a correlation between skipping breakfast and obesity. […] They also found major flaws in the reporting of findings. People were consistently biased in interpreting their results in favor of a relationship between skipping breakfast and obesity. […]

Further confusing the field is a 2014 study that found that getting breakfast skippers to eat breakfast, and getting breakfast eaters to skip breakfast, made no difference with respect to weight loss. […]

Many of the studies are funded by the food industry, which has a clear bias. Kellogg funded a highly cited article that found that cereal for breakfast is associated with being thinner. The Quaker Oats Center of Excellence (part of PepsiCo) financed a trial that showed that eating oatmeal or frosted cornflakes reduces weight and cholesterol.

{ NY Times | Continue reading }

oil on canvas { Jeff Koons, Hair, 1999 }

related { Corn Flake Portraits of Pop Stars }

Holzwege proved a disarmingly difficult title to translate, or even understand: Holz means “wood,” and were means “paths.” Thus: “Paths in the Forest”—but Holzwege are not just any paths. They are paths made not for the forest but the trees; paths for finding and carrying wood (back to your hut), not for getting from point A to B. And when you are on one, you are, proverbially, on the wrong path.

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The mantra of Wall St hedge funds was once “only the strongest will survive”. It may now have to change to “the geeks will inherit the earth.”

Hedge fund “quants” who use computer systems to trade financial markets earned more money than some of the industry’s most famous stockpickers, who posted large losses in 2015.

The most prominent among the quants was string theory expert and former code breaker James Simons of Renaissance Technologies, who earned $1.7bn, putting him in joint first place.

He was joined in the top 10 earners by former Columbia University computer science professor David Shaw of DE Shaw who made $750m and John Overdeck and David Siegel of Two Sigma who made $500m each.

Their success came in stark contrast to some of the biggest names on Wall Street who rely on human investment judgment rather than lines of computer code.

{ FT | Continue reading }

quote { Cabinet magazine | full story }

Turn all the lights up 2 10

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{ Tokyo 2020 Olympics logo, designed by Asao Tokolo — he will be awarded ¥1 million ($8,250) and a free ticket to the opening ceremonies of the 2020 Olympics and Paralympics. }

‘And may I thank the Prime Minister for the advance sight of his statement, it is absolutely a masterclass in the art of distraction.’ —Jeremy Corbyn

Almost Nothing About the ‘Apple Harvests Gold From iPhones’ Story Is True

‘I wonder if Superman ever put glasses on Lois Lane’s dog & she was like, “I’ve never seen this dog before. Is this a new dog?’ —Rob Fee

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Katy Perry, Billy Joel and Rod Stewart are asking the U.S. government to reform provisions of copyright law that they say enrich large technology companies at their expense.

The three are among the more than 100 artists and managers who have filed petitions asking the U.S. Copyright Office to amend parts of the 1998 Digital Millennium Copyright Act. The office has said it will study the effects of so-called safe harbor provisions in the law, which shield services such as YouTube from liability when users upload copyrighted material without permission. […]

The industry is stepping up its fight as streaming becomes a more significant source of sales. Revenue from such services increased 29 percent last year, according to the Recording Industry Association of America, with most of that growth coming from paid subscription services that license music. Sales of CDs, along with online purchases of music, are shrinking.

{ Bloomberg | Continue reading }

painting { Dan Witz }

89 flowers on their back… inventors of the Accu-jack

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MasterCard and Visa didn’t make, or even look, for profits for decades. MasterCard started as a not-for-profit membership association, in 1966, and Visa did the same, in 1971. Both associations managed their brands and ran the clearing and settlement systems for banks that issued cards or helped merchants accept cards. These card networks were allowed to charge their members just enough to cover cost and provide working capital. […]

Then the banks decided to turn the associations into for-profit companies, IPO them, and cash out. MasterCard IPO’d in 2006, and Visa followed two years later. Now they are very focused on making money. […]

Many other multisided platforms haven’t made the leap to making money. […] Standard Setting Organizations (SSOs) are multisided platforms that help members reach agreements over a standard (For example, mobile carriers, handset makers, chip providers and many others have to agree on a common standard — like 4G — for what they do to work together.) The SSO usually publishes a standard and disseminates it at low cost or even for free. That standard may then become a platform for many firms that produce complementary products and their customers.

{ Harvard Business Review | Continue reading }

Where would an investigator look for control hairs in a missing person’s case?

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Piper Jaffray analyst Stan Meyers said animated films generally cost about $100 million to make, as well as an additional $150 million to promote.

An executive producer who wants to drastically cut costs traditionally has two choices: water and hair. Those are the most expensive things to replicate accurately via animation. It’s no mistake that the characters in Minions, the most profitable movie ever made by Universal, are virtually bald and don’t seem to spend much time in the ocean.

{ Bloomberg | Continue reading }

‘This life is a hospital where each patient is possessed by the desire to change his bed.’ –Beaudelaire

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For three years, she has calculated the cost of being different—that is, how much harder do you have to work as a woman, or as a gay man, to get the same jobs and the promotions as a straight, white man? […]

[S]he built models to measure how good people were at jobs they never had. This gave her the cost, or tax, in terms of the lifetime opportunity cost of lost work, the bill for extra degrees, or the extra experience needed to have the same opportunities as men from the dominant demographic group.

These are the results a few of her calculations: it costs about £38,000 ($54,000) to be a gay man in England; women in the US tech industry pay a tax of between $100,000 and $300,000; and women in tech in Hong Kong or Singapore face an even steeper $800,000 to $1.5 million.

{ Quartz | Continue reading }

photo { Chip Litherland, using expired film }

‘I gave up caring about anything, and all the problems disappeared.’ –Dostoevsky

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There are 30 US $100 bills in circulation for every man, woman and child, and more than 300 billion euro in 500 euro notes. As Peter’s paper documents, the vast majority of this currency is involved with activity that is at a minimum problematic, and often criminal.

{ Larry Summers | Continue reading }

related { With fraud getting more expensive, startups are taking a new look at ways to shore up the security of ATM networks and other card transactions — cards are optional. | The Security Ledger }

related { China has become the billionaire capital of the world, with a total of 100 to the Big Apple’s 95. China’s growing clout in the rankings is even starker in the world of female “self-made” billionaires, according to Hurun, where the country dominates with 93 of the global total of 124. | Financial Times }

photo { Twiggy & Justin de Villeneuve }

‘Nothingness haunts being.’ –Jean-Paul Sartre

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It was an invitation-only party (crabs, cocktails and a D.J. on a moonlit dock) thrown by Jane Street, a secretive E.T.F. trading firm that, after years of minting money in the shadows of Wall Street, is now pitching itself to some of the largest institutional investors in the world.

And the message was clear: Jane Street, which barely existed 15 years ago and now trades more than $1 trillion a year, was ready to take on the big boys.

Much of what Jane Street, which occupies two floors of an office building at the southern tip of Manhattan, does is not known. That is by design, as the firm deploys specialized trading strategies to capture arbitrage profits by buying and selling (using its own capital) large amounts of E.T.F. shares.

It’s a risky business.

As the popularity of E.T.F.s has soared — exchange-traded funds now account for a third of all publicly traded equities — the spreads, or margins, have narrowed substantially, making it harder to profit from the difference.
And in many cases, some of the most popular E.T.F.s track hard-to-trade securities like junk bonds, emerging-market stocks and a variety of derivative products, adding an extra layer of risk. […]

While traders at large investment banks watched their screens in horror, at Jane Street, a bunch of Harvard Ph.D.s wearing flip-flops, shorts and hoodies, swung into action with a wave of buy orders. By the end of the day, the E.T.F. shares had retraced their sharp falls.

It is not only Jane Street, of course. Cantor Fitzgerald, the Knight Capital Group and the Susquehanna International Group have all capitalized on the E.T.F. explosion.

And as these firms have grown, so has the demand for a new breed of Wall Street trader — one who can build financial models and write computer code but who also has the guts to spot a market anomaly and bet big with the firm’s capital. […]

Here is a small sample of Jane Street’s main traders: Tao Wang (doctorate in philosophy and finance from the National University of Singapore), Min Zhu (master’s in chemistry, Columbia), Brett Harrison (master’s in computer science with a focus in artificial intelligence, Harvard) and Srihari Seshadri (bachelor’s in computer science, Carnegie Mellon).

{ NY Times | Continue reading }

oil on Masonite { Grant Wood, Birthplace of Herbert Hoover, 1931 }

Disorderly houses. Lord knows where they are gone.

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The war against cocaine rests on a simple idea: If you restrict its supply, you force up its price, and fewer people will buy it. Andean governments have thus deployed their armies to uproot the coca bushes that provide cocaine’s raw ingredient. Each year, they eradicate coca plants covering an area 14 times the size of Manhattan, depriving the cartels of about half their harvest. But despite the slashing and burning, the price of cocaine in the U.S. has hardly budged, bobbing between $150 and $200 per pure gram for most of the past 20 years. How have the cartels done it?

In part, with a tactic that resembles Wal-Mart’s. The world’s biggest retailer has sometimes seemed similarly immune to the laws of supply and demand, keeping prices low regardless of shortages and surpluses. Wal-Mart’s critics say that it can do this in some markets because its vast size makes it a “monopsony,” or a monopoly buyer. Just as a monopolist can dictate prices to its consumers, who have no one else to buy from, a monopsonist can dictate prices to its suppliers, who have no one else to sell to. If a harvest fails, the argument goes, the cost is borne by the farmers, not Wal-Mart or its customers. […]

The raw leaf needed to make one kilogram of cocaine powder costs about $400 in Colombia; in the U.S., that kilogram retails for around $150,000, once divided into one-gram portions. So even if governments doubled the price of coca leaf, from $400 to $800, cocaine’s retail price would at most rise from $150,000 to $150,400 per kilogram. The price of a $150 gram would go up by 40 cents—not much of a return on the billions invested in destroying crops. Consider trying to raise the price of art by driving up the cost of paint. […]

A dollar spent on drug education in U.S. schools cuts cocaine consumption by twice as much as spending that dollar on reducing supply in South America; spending it on treatment for addicts reduces it by 10 times as much.

{ Wall Street Journal | Continue reading }

photo { Robert Frank, Bar, New York City, 1955-56 }

Die Feldgleichungen der Gravitation

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We investigate the role of networks of alliances in preventing (multilateral) interstate wars. We first show that, in the absence of international trade, no network of alliances is peaceful and stable. We then show that international trade induces peaceful and stable networks: Trade increases the density of alliances so that countries are less vulnerable to attack and also reduces countries’ incentives to attack an ally.

We present historical data on wars and trade showing that the dramatic drop in interstate wars since 1950 is paralleled by a densification and stabilization of trading relationships and alliances.

Based on the model we also examine some specific relationships, finding that countries with high levels of trade with their allies are less likely to be involved in wars with any other countries (including allies and nonallies), and that an increase in trade between two countries correlates with a lower chance that they will go to war with each other.

{ Proceedings of the National Academy of Sciences | Continue reading }

photo { Mark Cohen, Girl Holding Blackberries, 1975 }