had a whale of a time at dr leunig's lecture today. this thin, gaunt bespectacled man started talking about why people wore poppies on their right breast ("because remembrance day for the Great War is coming, not that anything was Great about it, but I happen to be grateful for those who fought in it."), and how the British government hadn't had a pension scheme then, so they got all the veterans to start selling poppies. How itv was going to reconstruct guy fawkes day by attempting to blow up a scale model of parliament as it was in 1605, and how wrong it was because we're actually celebrating the FAILURE of his plot. He then spoke about someone he knew who was jumping off plans at the age of 80 and how he could never jump off a plane himself, let alone when his friend told him "that was nothing, you should try it over enemy fire over arnhem."

after barely-concealed snipes at students who chose to take something not-so-interesting as accounting 100 (more to that later), and even at us for deigning to want to earn tons of money upon graduation, ('yes, the famed services sector of britain, the numerous "quasi-financial" institutions in the city which many of you will end up earning loads of money in')he proceeded apace with the greatness of britain (the period when britannia ruled the waves). never one to call a spade a heart.

after the minute's break he explained to us the concept of variety in well-being by saying clothes could never be cleaned in the 19th century because there wasn't any persil. he then remarked how he could never sit still through all those wonderfully lovely period shows because he'd pick out all the impossible bits and very soon those around him gave up watching period shows when he was around. and the next bit of the lecture was america was great too! except for the civil war which cost 6.5 billion for the both sides, with the South in the red to the tune of 3.25 billion with which, he said, you could buy every slave's freedom in the South, equip them with a 62 hectares of land and a mule. The mule thing just cracked me up. He also said, to those proponents that "sometimes the economy needs a war, or maybe to lose one. look at how well Germany and Japan did after WWII", and he said well the best way to do that is to start civil wars, which no one wins, for it's always in the interest of the losing side simply to sell out at the start and pay settlements, but of course no one knows who's going to lose and that's the point of a war. many countries in africa has been one the major proponents of this growth strategy but they seem to be failing, again, demonstrating the great witchery of picking examples to substantiate a theory.

anyway. it is just my opinion that there is a lot of academic posturing in the school. i mean, there's always this tension isn't it? there will be people taking history and IR who go "everyone takes the same thing, accounting or whatsoever", but of course i'm judging from an ex-post sample because having taken history and IR, they would naturally be more inclined to frown upon taking accounting, and anyone remotely associated to it by association. Likewise, the mathematicians taking abstract mathematics are probably wondering how impure all these historians or political scientists or lawyers are, always debating in fields where charm wins over logic. and it goes on...

i mean, what is the point of a statement like "why does everyone take accounting and finance"?
(i need to clarify, i'm not taking it. but i feel sorry for the chaps.) if you have the foresight/wisdom/passion/interest/good sense/stupidity to take whichever most-interesting subject in the world you're taking, it's definitely interesting! there's no need to put down other subjects. it's so insecure! what's wrong with them wanting to earn loads after graduating? sure your values may not click with them... but. hmm.

i thought like this because i went for a finance talk today. it was one credit debt obligations, n-credit debt obligations, credit default swaps and all manner of exotic derivatives. exotic is the word, probably only exist in the freest markets of the world, and trades less than 500 million a year. i sat through the talk, and i came out of it not wanting to emulate these whiz traders and make tons of money. i was amazed though at the mathematics that went into some of the models, although the lecturer appeared to be a practical person who'd disdain how these abstract model works. but throughout the talk, i really did get this feeling that derivatives are really gambling. i can understand default insurance, but when you go to n-CDOs you'e not talking about insurance, really. well maybe it's a clever way to mop up unclean positions on tranches. (actually maybe i don't know what i'm talking about). but it's as if there's this dynamic, exciting world, which doesn't care what all these numbers actually mean. or, more specifically, treat money as a scorecard on which you play this game of probability and expectation (sounds like gambling?). i mean, clearly, we're not in a "inflation is sin! it's stealing from savers and giving to borrowers" world anymore, but the people that do these things do it because it's exciting and fun to them and not because they want to give people additional security. and it's really funny. because everyone wants to beat the market. and if you think about it there is no phantom money being created (you hear about people making tons of money on these things). but the rules of physics apply. no-arbitrage still applies. total amount paid for protection = total amount paid out during default. clearly, the world doesn't function without finance (ask the farmers, farmers eat the crop they grow, meaning they have a year of forgone income in their start-up year, and the same applies to most other companies). but to say that i understand or approve of all these exotic things is just stretching it. investors live in their own world. it's not a criticism because it's clearly fun and dynamic and i can clearly see how it could be itneresting.

because clearly. if you wanted a ferrari, or a good life for your family. who could fault you? (the person who doesn't have a ferrari, or that believes the ferrari is polluting the air). and i think it's fascinating just thinking about needs, wants and choices, and how they interact, and psychology is a really important part of economics.

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