photos of me, courtesy of lip

it was from the second coming, by yeats

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.


great to be back in singapore. good food and companionship. watched a pretty good film 爱情十八克 which michelle recommended, showing at sinema old school, on top of mt sophia. was surprised that it didn't have a commercial release as it seemed quite marketable. And I am always so surprised (I shouldn't be) at how much it costs even to make a simple film. The rest of my time was spent junking around watching various old films (sepet and troy) and reading.

finally finished my admin this week. well at least the marking and the term reports. i still have to update the website and put up answers but i think i'll peg that for later. i think everyone's enjoying christmas anyway.

so i can start on my own work now. i will spend these 2 days getting used to CES (constant elasticity of substitution) functions, which Dixit and Stiglitz used to model imperfect competition and seems to be the workhorse for any forms of economies of scale. Then I can finish up intermediate goods theory, and also the problem set on labour market flexibility and the associated gains from trade. I'll read the Schott paper on factor price equalization to see if there's anything there.


i happen to have a few moments to write today. gosh where do i start, it's been such a hectic week.

i think i'll start from yesterday. the impact of the moment has gone, but basically sky tv showed a person killing himself by sipping a cocktail of drugs, at a charity dignitas. this is basically a swiss charity designed to allow people to kill themselves before it becomes physically impossible to do so themselves. the cocktail is one of barbiturates, which basically send you to sleep and then stop your bodily functions. he chose to die to beethoven's ninth symphony. this person had motor neurone disease.

anyway, whatever you feel about whether such a moment should be private or public, he basically wanted to put this video out to remove such a stigma about death. i think it's pretty telling that this is really the first time i've seen a deathbed, with the person due to die in a few moments. i've been pretty insulated from that so far, as far as i know, people all die peacefully in their sleep. true, i don't know him, but i guess i have the capacity to imagine in a very abstract way. everything seemed so real, from him choking on the bitterness of the cocktail ("do i really have to finish it?") to the final i love you's. to me it still seems so tragic that someone can choose to die a moment earlier than they have to. but yet seeing this there is some socratic nobility in it. that he was able to make a rational decision that marked him out as man. "either i do this, and die now, or i don't have the strength to go through it, and then i suffer and put my family through suffering, and then die." that must mark someone out as human.

"i suppose i must feel like a pilgrim heading to america back in those days. i don't know what's on the other side, and i know i'm probably not coming back"

on the other hand, they also showed someone else registering for dignitas' service. this person was far more cavalier : "no more golf, no more wine" might as well go now.

and so the debate continues.


sometimes people randomly come up to ask me if i'm alright, such is my sulky image. i always tell them, i'm alright. i'm the happiest i've been in years. with that comes an implicit promise that i tell them whenever i'm unhappy.

i might be crossing that line now, so in many ways i might be in need of the break.

this is very strange, because every day i am doing what i like. there is a little stress, but not too much. i love standing up and being on my feet, and i like worrying over data.

but i think i'm putting a lot of pressure on myself. i am afraid of competence and i am afraid of mediocrity. but that might just be my fate. i'm afraid of my future. maybe i'm just doing what i should have been doing as a teenager, when i perhaps kicked my feet back too much. i worry about all this in the shower and i wonder whether the guy above accomplished what he wanted to. sorry, it's not my fault i'm born to worry about such things. i have to get up every day and think them, and then put them aside because they are not productive. but that doesn't mean i don't worry about them, and right now, if you ask me, those forces are stronger.



dignitas + assisted suicide

football players

on saving the world, and peter singer



revisiting the repugnant conclusion


i was thinking about the economic decision to have a baby, and it seems that derek parfit wants to come up with a theory which avoids a situation which ends up like figure 1, where we transition to a population with larger total utility but each with a very low positive quality of life. As utilitarians, then, it seems that the moral conclusion would be to sacrifice some of our present utility in order to have more babies who will all have shittier lives because the world is overcrowded. 

i just thought intuitively that the figure doesn't make sense, and i thought of a reason why. i realised it looks a lot like classical economic analysis. the repugnant conclusion is simply the same fallacy in economics that goes: if every good achieves some positive revenue by selling it, then the firm should maximise revenue by selling the good until the price is at 0, when we know that that is not true unless the marginal costs are 0. 

you see, you have to model the problem like this. intuitively, an extra baby imposes a negative externality (via the resource budget constraint) on EVERY single other person in the economy. Plot average utility (price) on the y-axis, and total population N on the x-axis, and draw a downward sloping average utility/population growth curve. then the total utility curve is equivalent to the total revenue/expenditure curve , and it is maximised when the average utility elasticity of population is 1. 

Also remember that population growth is an endogenous (private) choice. However, the philosopher wants to look at it from the social planner's point of view. So, if we were on the left of the e=1, then an increase in population would decrease average utility, but maximise total utility. So, the repugnant conclusion still holds for some extent. However, we avoid the conclusion mainly because after e=1, then it no longer makes sense to continue increasing population. If you were to increase it beyond that point, then the externality beyond that point matters (because the resource constraint bites harder, and because the externality hits more and more people as population increase) So, we will never end up at a point B where each person has miserable little utility but the total population is happier. I.E. you cannot compare 100 person each with 10 utility (total 1000) with 1001 people each with 1 utility (total 1001) because it is not possible to get to the second point moving along this utility schedule.  I.E, the repugnant conclusion's worst conclusions are impossible. 

To ensure that the demand curve I have propose is downward sloping, you go back to classic indifference curve analysis. This time, your indifference is between allocating your resource constraint between population (i.e. feeding/creating new members), and increasing your current population's consumption. The utility function for you would be biased towards yourself because people are selfish/impatient, but have reasons for having babies. If you did want the moral conclusion, you could choose the weight so it would be perfectly altruistic, giving them both equal weight. These are your two choice bundles, x1 and x2. an increase in average utility of the current population necessitates a fall in population, while an increase in population would necessitate a fall in average consumption. 

Ok, then how do you explain population growth. On this curve it would be like a shift in technology/tastes affecting the demand curve. It is a shift of the utility curve at every point. Intuitively this happens because you relax the resource constraint. So, a certain average utility is now compatible with a greater number of people because the economy grows. 

To model how exactly this changes, then you shift to the endogenous growth model with population choice. And come on, isn't it intuitively realistic. We are all impatient. And I look at the population growth data, it does seem that the growth so far has come because the resource constraint has been relaxed. I do think that the world might be able to support more people and a higher utility (we are on the left of e=1). But again, this is because now we are able to endogenously control our population choice through contraception, family planning etc. Therefore, because of our impatience in consumption, we do not achieve the social planner's optimal. That is why governments in developed countries are in fact so worried, and paying you to go for the repugnant conclusion. But at the same time they don't want you to reproduce too much. There is an optimal population growth rate implied by the model. 

It isn't a paradox to me anymore until someone points out what is wrong with my analysis. I always thought that the problem was that this was a utilitarian question at its heart, and so it lends itself to some form of analysis, which nobody has seemed to bothered to do. So you can confuse people by proposing unrealistic hypothetical scenarios in language, when the math doesn't allow for it. Then you have these identity arguments etc which just don't make so much sense.

Of course, other branches of moral philosophy, I still have immense respect for. Math touchest not thee. 


only connect!

the quote below has gathered new meaning as i struggled to connect to the internet today


confession: i used to mumble to myself in school. i used to think everyone did that, but now that i look back it does seem strange.

but, what a line:

only connect! that was the whole of the sermon. only connect the prose and the passion, and both will be exalted, and human love will be seen at its height. live in fragments no longer.

i don't care what it means! i don't care! it is just one of those lines that makes you feel like going out and shouting it into people's faces, whether they need it or not. it just...deserves to be shouted. it is shout-worthy.

i didn't attribute it because it's probably quite a familiar line.


"yes we can part I" - these crazy americans

the story that caught my eye the most in this week's issue of the economist was the story of gilbert kaplan, who started the magazine 'institutional investor' after he left grad school at nyu/duke. he gathered these stock market type people to basically write about the market. he was the editor in chief for a while and then sold it for $72 million.

but this was the stunning demonstration of chutzpah. he heard a performance of mahler's second symphony, the one called "resurrection". in line with the principles of specialization of labour, he became so obsessed with it that he attended every performance of it, "met his wife at one", studied the score intensely, bought it (it helped that he was rich) and now conducts this symphony. so this rank amateur was able to become the foremost authority on this particular piece of work.

That an unskilled dreamer could teach professionals how to bring off a masterpiece is a fantasy that many share but few presume to achieve. Mr Kaplan, after his first performance, said: “I had a feeling that people in the audience were urging me to fulfil my dream. They were up with me on the podium that night, playing baseball for the Yankees, writing the book they never wrote or getting the girl they never got.”


of course oliver stone's w. has w. dreaming of playing baseball for the yankees.

anyway, i wonder what it takes to do something like that. conducting, especially, involves imposing your will/ideas on professionals. so gaining their respect must not be easy, esp if you have little professional experience yourself. but i wonder if really the secret is that he is a good leader/communicator so that he gets his passion/ideas across effectively. but really. maybe all that is required is the guts to stand up and take responsibility for something that you like... it sounds easy, but i would find it very difficult and stressful, for example. i might be too accommodating of opposing viewpoints, especially those of trusted musicians, so i don't think i could force through a vision with special clarity. i wish i had that ability. in a way, i think he has to be rather blind to all the initial skepticism.

the other theory is that he is a rubbish conductor of mahler, but he has a lot of journalist friends who are willing to big him up, because everyone loves an underdog, especially the media. and the other conductors are too nice to say anything.

still, whatever, he gets to command an orchestra. and if it were rubbish, i'm sure he'd know by the people not turning up.

i've been listening to mahler. him, mendelssohn and schumann (it is also the time for the annual lse concert, they are repeating mendelssohn's violin concerto and also playing egmont's overture by beethoven). he comes from the only period in classical music that i can appreciate, mainly because it is either intensely sad or insanely happy. as you can see, i don't have much musical knowledge/vocabulary. but what the heck. 


a short history of typesetting


steve jobs makes a lot about the fact that the mac os looks so nice because he attended only one class in college, the one about fonts.

some of this stuff really sounds heroic. going through all previously typeset editions of journals which had typographical excellence, and then defining precisely the parameters needed to maintain proportional spacing which looks easy on the eye.

thank you.


anw, it seems like the new cool thing in IT is how we interact with our appliances. well, it's not that cool, i mean, it's out on the wii, say, and with the iphone/ipod touch.

but i notice that the tablet pc died out... i think it was not priced very well. but i know it's becoming mainstream because this year the election coverage, everyone was manipulating these screens dragging and dropping stuff with their fingers.

the real reason i was so lazy this morning

was because that I knew I would be utterly demoralized when i start on EC443. I'm 1 for 5 today, meaning that out of 5 questions, I am confident of the answers to only one of them. I think then that there is no point handing it in. I think I could get the answers to one more when I try again later, because it just looks tedious.

And the rest, not even halfway done. There are a lot of gaps in my knowledge and it will take time to climb the mountain. Especially linear algebra, which I thought I was pretty strong at but there are a lot of exotic things in there that I don't know of.

Asymptotic theory was shabbily done as well, have to catch up on that. Luckily the mocks are in January.

The only thing I am proud of is my knowledge of classical testing procedures (but who uses those?) I am always very good when the theory follows a story. I can totally understand Neyman-Pearson, for example, because they give reasons for why they do something and essentially say, yes, statistics is arbitrary... now let me tell you why it should be arbitrary our way. Decision theory, I totally understand.


why boris johnson is so popular --- what awesomely pompous language!

In a few weeks, we are all off skiing. I am much looking forward to it. Or at least I was, until I realised that we are going to France, where they use the euro - and in all the history of the single European currency, the pound has never, ever been so puny as a purchaser of euro-denominated assets.

If I buy a lunchtime tartiflette to be shared between my four famished children, I can now expect to pay 25 per cent more than last year. And if I try to drown my sorrows with a vin chaud, I will have to cope not only with the outrageous Alpine mark-up, but with the plummeting of our currency.

I will be forced to sip that drink miserably, nursing it in a corner, while all around me hearty red-faced skiers from euroland will be singing shanties and calling for more, slapping their relatively un-devalued banknotes on the counter.

If that isn’t the definition of national humiliation, I don’t know what is; and what has intensified my rage is the Government’s unbelievable suggestion that any further fall would have something to do with George Osborne and his decision to point out what is happening.



ok stress. to do list

1. need to look through dissertation shortlist and make decision. then read/find literature.
a. lecture notes. what needs calibration?
b. look through past projects to see depth required
c. need to find data. before holidays so i can make data requests in december. also possible need to go through intl' finance part of the course beforehand to see if there's anything interesting there. also better to be vetted earlier by supervisor. if possible finish melitz + krugman model by next week! so I know that they are talking about.

2. learning latex/scientific workplace. more progress on latter rather than former. can work on former at home. also need to start on matlab/stata by end of term, because computing resources not available at home. borrow manuals, after this week's practise maybe delay this till after mocks/dissertation planning, because it's meant for april. so week 10 probably, in addition to packing/cleaning up room for yvonne's stay.

3. week 9 mocks, only macro + micro. useful for funding references, but maybe not top priority. useful chance to revise.

4. msc work + mres work.
- weekly: ec443 to tang. must do unfortunately, time consuming. mocks in jan.
- micro: ok, only game theory + uncertainty left, need to catch up on reading and MWG, 441 if possible. 2 weeks left. see how it goes this week
- macro: lagging in growth theory. RBC theory and ramsey model coming up. Also lagging in 442. doesn't help that exercises not posted.
Maybe push 442/441 work into December, except those using computers. But 442/441 work overlapping MSc could be useful for mocks.

5. teaching + marking problem set 2, student evaluations. training for this + responding to student feedback next week apart from weekly lesson planning, save for holidays.


would like to do

1. westfield + christmas gifts
2. guitar
3. chelsea/arsenal with sunny
4. packing
5. hack iphone
6. meet up with zhengfei and alex
was woken up by a dream/nightmare. well, it was a real-life scenario which seemed plausible at the time, so i think it shares most aspects of reality in that there were good parts and bad parts.

couldn't get back to sleep, maybe because neurons firing very fast or something. after a few attempts thought it best not to waste the dream-like state that i have and just put it down, and usually it will be easier to go to bed.


for you masochists out there, sam mendes is coming out with a new film about suburbia and dysfunctional marriage consisting of disaffected parents. it's "revolutionary road", and i believe trailers are out. this one doesn't even try to be subtle, because it has people in gray suits walking about to represent the daily grind of walking to office. It's based on a by far more famous book, revolutionary road by richard yates.


so it's probably not going to be very subtle. but it actually could work. The problem is, I actually fear the stuff that's going to happen in that movie. I don't know why I fear it. i used to think that people were divided into two types, normal and not normal. indie films, especially american ones, encourage you to be not normal. they are typically suspicious of conformity. yet what do people conform to? it must have been much clearer in the 1950's, at least to them, which was why the liberal counterculture evolved. because i don't think it's the same in the 2000's, and I don't think you can pin down "normal" anymore, precisely because the world we inherited is nothing like the 1950s. but there the logic breaks down. what does a "normal" person then, who watch a film like that think? does he squirm uncomfortably because he has a "normal" life with enough to eat with an 18 hour job as a lawyer? no, i don't think so, i think if he watches the film, he will be afraid of the same thing as I am. to be second rate. or rather to be second rate having voluntarily given up the chance to be first rate. so all this "higher ideals" stuff, pfft, that's an optional extra. just don't be second rate. then again, if you have all these ideals, you are twice as likely to fail, given the standards you set yourself.

oh sam. american beauty was unconscionably depressing. why do you have to make another film like it. .


other movie news. lars von trier will finally finish his american trilogy next year. "wasington" is expected to be out 2009. if it's going to be anything as good as "dogville", i'll probably catch it just to see how it pans out.

frank miller is also releasing a new pic this year, the spirit. i love the comic-rl blend. cinematography looks good. plus, it has scarlett johansson (hot, real woman with curves) and samuel l. jackson as the badguy (again|boring!).

last on the upcoming films series, gus van sant is releasing "milk", based on the life and times of harvey milk, america's first openly gay elected official who was assassinated soon after.

oliver stone's W. when i walked out of the movie, the first lesson was. beware dreaming. dreams aren't just your standard if barack obama has a dream then it is good but if george w. has one then it isn't.

in the character study, he is generally very sympathetic, but i learn nothing much new about him then what is commonly portrayed in the media. that he is a rich kid who got couldn't hold down a proper job, kept getting bored and switching careers, and finally driven by an oedipal need to prove himself as well as finding the strength of religion to finally mend his life. it is a standard picture to portray, given that reading h.w's cv, you would think w. has a lot to do even to match up. jeb is the one that does all the matching up, and you can see the prodigal son dynamic when w. becomes governor of texas while jeb, the good guy, lost his own race in florida.

blah blah. basically age old stories. we will never know if they are true and maybe i am able to be more skeptical given that i did see this president in action. it finally portrays him as not so much malevolent as full of hubris and blind spots, and not realizing the extent to which he has screwed up. the film is full of make-believe white house decision making sessions based on media reports, and does satirize them to some extent. h.w's loss to clinton, and w's own loss in his first congressional seat were seen as a dramatic moment where w's zero-sum instincts decide that winning is more important than anything else.

that said, i wonder how much you can trust this movie. we don't know about w's legacy because we don't have the benefit of hindsight. we see cheney making a presentation of why one should invade iraq. h.w. stayed out because he spent years in the intelligence services and knew that to be an occupying power in the arab world was fraught with danger. but w. is portrayed as a dreamer. and to be fair, we haven't seen how the dream has panned out. there's a lot of treasure lost so far, and it looks like it's going to be vietnam rather than gulf war i. but we don't know, and we should reserve judgement on the man.


o2 millennium dome. beautiful place, large, new, mega -mall proportions. almost empty. either bad location, or british people are suspicious of shiny new things or huge shopping centres. it's just not very them. but then again, westfield has been a success so far.

the greenwich peninsula is actually really new. it feels like america, because they have these huge sainsbury's, comet built to sprawl with huge carparks, and things are actually new and not grimy. i guess i did have a mental picture of london over the last 3 years and this happens to be a different part of it. even my place is what, no more than 5 years old.

caught arsenal's kids last week. they were a beauty to watch. carlos vela is so fast! and the emirates stadium is nice and shiny too.


the election coverage i deserved



this has got to be the cheapest windows emulator option out there for my mac. it's based on wine, which is the open source implementation of the windows app programming interface.

so i don't have to get a separate microsoft OS, which was the largest cost involved.



london has a slice of home

they finally have a spanking, brand new, clean megamall with high street shops and even !food courts!

i think it is the size of 3 vivocities. come on london! think big!



joke of the day is from felipe massa, which i obtained courtesy of bbc radio 4

felipe massa: "today i am wearing my lucky pants. it has been with me through 10 victories and 14 pole positions."


and so the song for the day is...

so obama has won 300 + electoral votes and the most important job on the planet

but the big question of my immortal friend and colleague remains. if he can be that electric to crowds of 70,000, and half of the american electorate, what were his teaching evaluations at the university of chicago law school? did he blow the scale?

not too bad, apparently.



wow! those are some TQAROs! so these are the kinds of people you are up against.


am also seized by a sudden desire to be on the road. somewhere. preferably in america.

also: forget all the rubbish graphics you see on tv.

THIS, is the geek's guide to the american general election in numbers. they did simulations!

i swear to god

i bought a juice yesterday which was pressed apples, strawberries and lychee.

lychee. imagine that. when i tasted it it took me away to another place. so that's how memories work. i mean why... why do we remember taste?
ec443 worries me. the first 5 weeks seems to take for granted that you already know a first year graduate sequence in probability and statistics, either that, or they just expect me to learn everything in a cookbook way. i think it is too much material to work through and learn properly in 5 weeks, because it is a few textbooks worth.

this week especially was asymptotic analysis. my emotions range from joy at actually solving something, to plenty of hours just staring into blank space and trying to pick something that works from the many things in the textbooks which i haven't worked through and thus don't know well. analysis is always like that. and watching tv. it is not efficient at all.


Classic Short Squeeze

I thought this was amazing. Actually I don't know where I stand on this. In many ways, I don't think it's exactly fair that hedge funds get a free play on reverse risk arb. So this turns out to be more like poker. But then again, we probably WANT reverse risk arb because of the usual arbitrage is good arguments.

But to be fair, on this issue, I thought that Porsche played within the rules. No doubt the rules would have to be changed, I guess.


tough week. let's get the bad news out of the way first.

it's been absolutely cold and wet the whole of this week. it snowed on tuesday. they turned the clocks back last saturday, which sets the stage nicely for seasonal affective disorder. also, 188 recently has been running infrequently 5-6pm.

news. was especially depressed when i saw an report on old age people who don't go out of their houses or don't meet anybody for a long period of time. it coincided with someone telling me about their parents and how they don't see eye to eye. i'm wondering how many of these people are abandoned because they have been total pricks before, but it does appear harsh when you see them 70+ and pottering about. i think, by definition, almost 50% of us are worse than average. and that applies to relationships and people. so sometimes i wish people would bite their lip and get on with it.

report on the democratic republic of congo. i am usually not affected by pictures of famine. this wasn't really. this was a picture of sheer will to live, of a mass of people crushing each other to get into a refugee camp where they were giving out biscuits to children. my god if you were there helping, can anything upset you more than the fact that there are simply too many people out there?

on school "socialist workers" have been going on along houghton street. i see some profs in the union with "solidarity" on their doors. i don't join unions, i am suspicious of them. i worry that the backlash against the bankers will go too far. i do not know if this will be a winter of discontent, but it's already started very cold. but it's a great time for the resurgence of british humour.

on a personal level, i may be a little guilty of over-reach. could create political problems for me. do not wish to elaborate here.

the 1 key on my macbook is coming off. shoddy workmanship

liverpool hit the bar umpteenth times and lost to spurs. charlton (local team) got beat 3-1. stoke city have a guy who does ridiculous throw ins and scores from them. one of the players i like the most now is a man united player, dimitar berbatov, because he sulks and doesn't celebrate but his touch on the ball is like zidane. zen, and in his own world, takes his time.


john prescott makes a documentary on class in britain. he goes to see a bunch of chavs in council flats. he asks them what class they think they are. they reply, probably middle class. he argues, hmm, i think you'd probably be the first real people on this documentary i've met who are working class (john prescott comes from a working class background). they then reply, that can't be, because i don't work.

i swear that is only so funny because a bunch of real people said it.


so the weather and clocks shifting plus political discouragement are getting to me. i wonder about the entire us election system and the marathon that it is, and how these people wake up every day. i guess it's the prospect of leading the free world. but to be so scrutinized, not to screw up, to say the right things. takes a lot of discipline.

so in that context, getting the pile of laundry done, homesickness, cold and a little spot of bother are nothing. learn to laugh at yourself. and to bite your lip.



i just saw this guy on CBS. 94 years old, trading stocks since the great depression.

he's a survivor! his advice on how to get through a recession: pick the right stocks.

no shit!


we moved on to game theory and information economics this week, which caused a visible buzz in the lecture theatre. we covered lemons, hawks vs doves and other standard problems. So, here is the famous monty hall problem which we opened up for discussion, and since answers to that are readily available,

enter the extremely cunning (and much more subtler variant), the Terminator Question.

"In the 1984 movie, The Terminator, a robotic killer is sent back through time to present day Los Angeles to kill Sarah Connor, who will one day give birth to John Connor, a hero who will lead humans to victory in a future war against machines.

After the Terminator is sent back through time by the machines to change history, John Connor sends a dedicated soldier, Kyle Reese, back through time to defend Sarah Connor.

The situation is as follows (details do not follow the movie precisely):

There are 3 Sarah Connors in L.A. Neither the Terminator nor Reese knows which is the “correct” Sarah Connor.
In any round, the Terminator can choose to target one Sarah Conner, and Reese can choose to defend one Sarah Connor.
Any undefended Sarah Connor who is targeted by the Terminator is killed. If the Terminator encounters Reese, both the Terminator and Reese are destroyed (Connor survives).
If, at any point, the Terminator successfully kills the true Sarah Connor, Reese will disappear as there will be no John Connor to send him back in time (there will be no need for a Terminator to go back in time either, but let’s forget the usual time paradoxes and just allow me this assumption).

What is Reese's optimal strategy?"

all the world wants to do

despite all that has happened....

is to lend the us govt money to bail out its banks.


america.... america....


wow stephen fry in america is one of the most stunning travel documentary series i have seen. some of the footage they have is absolutely amazing. the smoky mountains look beautiful in autumn.

give it to me!!!

have i written about the guy who jumped in front of the train tracks during peak hour?
anyway, he's decided to go jump, and in tube parlance, this is known as a passenger incident.
so in exasperation some people go, couldn't he have chosen a better time to jump?

well, no. i think if he wanted to go kill himself he might just want to do it at the busiest, most annoying time to maximise impact and point 2 fingers at the rush hour crowd who have driven him to his doom.

baiters. social phenomenon. about people who want to jump off bridges and the ensuing commotion which results, causing a traffic jam. sometimes the crowd breaks up into spontaneous honking and go "jump already bitch, so that we can all get to work"

so yeah, these can be heartless cities to be in.




what i learnt


bbc 3 psychological training of spendaholics

daniel kahneman on praise/reward

on regression to the mean and implications for human behaviour. remember attending a lecture on behavioural rewards and it's interesting how we can understand things in large samples but are always misled in the small, which influence our attitude towards rewards/witholding:

i read this because i was trying to find something on regression to the mean which might affect income distribution, mainly that regression to the mean DOES not mean that income will become more equal over time, which is not really related to the point here.

"I had the most satisfying Eureka experience of my career while attempting to teach flight instructors that praise is more effective than punishment for promoting skill-learning. When I had finished my enthusiastic speech, one of the most seasoned instructors in the audience raised his hand and made his own short speech, which began by conceding that positive reinforcement might be good for the birds, but went on to deny that it was optimal for flight cadets. He said, "On many occasions I have praised flight cadets for clean execution of some aerobatic maneuver, and in general when they try it again, they do worse. On the other hand, I have often screamed at cadets for bad execution, and in general they do better the next time. So please don't tell us that reinforcement works and punishment does not, because the opposite is the case." This was a joyous moment, in which I understood an important truth about the world: because we tend to reward others when they do well and punish them when they do badly, and because there is regression to the mean, it is part of the human condition that we are statistically punished for rewarding others and rewarded for punishing them. I immediately arranged a demonstration in which each participant tossed two coins at a target behind his back, without any feedback. We measured the distances from the target and could see that those who had done best the first time had mostly deteriorated on their second try, and vice versa. But I knew that this demonstration would not undo the effects of lifelong exposure to a perverse contingency."
i just had this idea before bed today. maybe this is nothing interesting and new, and really it isn't, but i guess i was impressed by the sudden clarity of it.

i am going to make a controversial and bold assertion. i believe that there will be 2 major political parties in singapore by the end of the next 20 years. maybe 30. not because singapore needs it, not because it is good for singapore, not for any normative reason.

i think there exists a basic tension in societies between redistributive justice and the sort of justice which believes it is fair for those who earn to keep their earnings, because they have deserved it.

it is increasing simply because of the dynamics of income inequality. what i am really impressed with is that we have achieved growth over the last 30 years without a significant increase in inequality. did we see a rise in inequality and then a subsequent fall?

this distribution is not stable. i'm just jotting down the idea but we need data. we need ginis (which we have, but need to check reliability), but also we can expect an increasing twin-peakedness in the distribution,

come to a point. which tradeoffs do you make. you must lurch in one direction or another, especially. then you leave a gap to exploit.

better economics than to split on another issue.

to be continued/elaborated. tbc.


today's family guy has stewie, the maniacal young genius maturing into a sensible old man as he travels into the future. no world domination, no statues to his greatness. so sad!
the first scissor cut into a fresh piece of construction paper

- things which make us happy according to stewie

what i learnt in economics: tbc
in terms of learning much about the economy, how to make money, predict bubbles, even analyze news, not much. but what i learnt... next episode

a very very early call on the housing bubble.


nassim taleb may seem like a lunatic when you watch him ranting and raving, especially when many of the points he makes have been made by some of the financial economists that he so derides. but he did popularize the theory of black swans and i love his memorable picture of one of the fallacies of induction. a chicken assumes reasonably that it is going to be fed every day of the year and if it plots its utility, it thinks things are going to go smoothly. problem of induction. you do need an inductive hypothesis to create knowledge. but relying on such a hypothesis places limits on your "knowledge"

bear markets are not quite as dramatic. but you can understand why it is difficult to call one. let me even call attention to something closer to home.

as a hypothetical example, if a company or a country grows at 8% a year for 30 years, one would be reasonable confident it is a good country or company, and you should buy stock in it. however, anytime you see something wrong, and you point it out, it is always tempting to be rebutted by the argument : hey look, we've been growing for 8% for the past 30 years. we have a great track record, don't worry. then start worrying. it is alright to buy into growth, but don't put all your eggs in that basket. there is nothing more dangerous than buying into the apex of a curve. this is my argument against CAGR (Compound Annual Growth Rate) type arguments for picking industries which I was subjected to a lot in the summer.

for some things, this can be remedied by taking an even longer time series. for big things such as how well a country will do, i think it is best to be humble and probably rely on our intuition on its vision for the future and more qualitative considerations. (which are unfortunately derailed by our psychology).

so, this "knowledge based economy" is important. it is a vision of the future which relies less on accumulating factors.
there is an atheist bus ad campaign here: "there probably is no god. so quit worrying and now go enjoy your life." richard dawkins has contributed £5,000 himself, no surprise.

when asked, the person responsible (who seems like quite a cheerful young girl) said that this was a response to bus ads preaching apocalypse and the church as a shelter from doom.

i leave judgement to the reader.


job cuts seem to be getting worse in singapore. several plants are closing down, intel & motorola. in a controversial statement, manufacturing will go the way of agriculture. both high productivity sectors, great success stories but also tradable and subject to full market competition. thus the industry revenues as share of GDP will compete itself to irrelevance compared to non-tradables like services or tradables such as commodities in which productivity gains are slight. it's still a big pie, but it's not going to be a growing one

this of course doesn't apply to all manufacturing. when you have nice shiny growing industries, you're actually really unproductive! and you earn lots of money. of course, such as clean tech are subject to a critical productivity threshold which is at least slightly inferior to the current one (then we can justify it with the superior environmental performance). hmm, next bubble?

it almost seems like a paradox of productivity until you consider that all the gains are passed on to us in the form of lower prices.


speaking of lower prices, economies of scale: on slate, article detailing that the budget for outfitting sarah palin and making her look photogenic is $150,000. it sounds a lot, until you realize it's really very little per voting audience. of course, that budget is probably higher for celebrities. when your job is looking good, some of those clothing companies want to claim those returns.

(this is a joke)
spotted on the FT: "Ford Motor was hit by a fresh blow as the investor Kirk Kerkorian began to sell his stake in the lossmaking US carmaker, saying he saw more value in his gambling and other interests. Ford shares fell 6.9%"

Now I thought this meant that he would rather take his money to a casino and blow it in vegas because it would make more sense than blowing it on ford, which would be funny and ironic. unfortunately, it turns out he has "investments" in these las vegas gaming businesses.


from dani rodrik's page: fed data shows that non-borrowed reserves of banks are close to -$200 billion.! which means that without government money, banks actually owe us money and have negative leverage. the fact that money still comes out of the ATM is testament to the fact that we have learnt a lot.


macroeconomics = "stochastic calculus porn"
if done wrongly, totally agree


research assistance:
algebra porn which masquerades as theory
lots of stata and excel

no good. boo.

keynes vs ohlin:

keynes : "transfers from germany are going to cause all of us to suffer"
ohlin: "no it's not, it's just a transfer of purchasing power"

20 years later, world war ii happens. nothing in the theory then could explain why indeed there was a transfer problem which led to a fall in global aggregate demand.

turns out keynes was right and probably he had some intuition (but no theory). but it's amazing because the actual theory isn't trivial. the distribution of world income has an effect on world expenditure when there are transport costs and real barriers to trade.

and the point today is: world distribution of income matters. the net position of countries deficits and surpluses matters. so we should worry about them.


the power of hunger, part 2

hunger is a very powerful thing. it can lead you to hoard, in the hope you will never be hungry again.

i bought myself a mountain of food. i wish to surround myself in the comfort of carbohydrates and the security of snacks. and none of that mars bars stuff. in comes milk, cereal, bread, fruits, pasta, tea and other fine products of the agricultural revolution from all across the empire.

i shall never go hungry again.
i have reached a new low in life.

i have managed to deplete my larders and my fridge of everything that is edible, and it is now late at night, with the nearest 24 hour shop.... far away. the local vending machine has decided to expire.

i have bars of mars and cans of red bull left. i can't have any more of them or i will fall ill. and red bull only makes me hungrier.

sadness. must raid stores tomorrow. meanwhile, i will tighten my belt and drink water.
there is a certain kind of freedom in knowing that in the short run, you only have a year to take a tilt at things. you don't have to be afraid of burnout.

went hillwalking 2 weekends ago at the trossachs, because it's probably the only long weekend i would have had the whole year. i don't see myself having many more free weekends anytime soon.

last week! spent a bit on time on my personal web page, and was also getting used to typesetting. i am glad that typesetting mathematical equations no longer involves complex lines of code in LaTex and Scientific Workplace has made things a lot more easier. LaTex does strike me as being very last generation. But who knows, I may need it when I start desiring a certain degree of flexibility (which i'm glad I don't need for now)

Anyway, it also means that my documents are starting to look very homogenous and very much like your average JSTOR article.

Graphs are still a pain though. Not data plots, I mean those graphs that you draw because you want to make some conceptual point. These things handle data plots well but not concepts.


i wanted to write about current account imbalances. will just jot down main points
- why do east asian countries save so much?
- bernanke thinks that this is a "savings shock". there is also a thinking that "cultural factors" have a lot to do with saving.
- high saving = prudence. not optimal. but who can blame asian economies? when they run out of money something like the AFC happens and the suffer a loss of a certain degree of economic independence.
- could this be the reason for high S in E Asia? true, artificially depreciated currencies may be a cause but I think that this is a result of a fear of 1997 happening again.
- why is so much of our K locked up in low-yielding treasuries? K could be deployed elsewhere.
infrastructure, and shouldn't domestic return on K be higher than foreign return on K in a less-developed economy. unless we have already over-accumulated and what we really need is TFP growth.
- to be fair, asian swfs were changing their asset portfolio. but then this risk environment arrives again.
- are we over-accumulating capital?

- history: debate on sources of east asian growth : krugman article in foreign affairs (who refers to this )

i wouldn't be surprised if people started sitting down again to discuss a real Bretton Woods ii soon. there are some huge imbalances on the global scale.


song i've been playing this weekend... michael jackson!

been interested in political interviewing after hearing ken livingstone being interviewed on bbc recently. at the london film festival they've been showing frost/nixon which is a highly dramatized version of the following interviews, 4 years after he resigned:

nixon getting philosphical. he looks crushed at two points: "no purpose", and at the end, when asked when it was punishment enough: "oh probably not".

it's always interesting to listen to politicians once they have nothing to lose, looking at today's us election coverage, nobody knows what these people's characters really are.

and this is the famous: "if the president does it, it isn't illegal". which is right, by definition, but has been famously taken out of context many times. minute 2:40 onwards

and this is my writeup of nixon price controls for my 1st class

wage price spiral?

last month's cpi was 5%, which was the highest in some time. it co-incided with the renewal of most inflation-linked contracts, which includes mine. so i got a 5% pay rise in a falling inflation environment.

so it is true that there is some price rigidity in the market and wages and prices don't adjust perfectly. they should, but it's hard to make contracts contingent on future prices, unless we index it to some measure of future expected inflation.


and the winner is... paul krugman.

well done
i was made to feel very mediocre today by a song.

1000 oceans has been on my ipod playlist forever. i liked it a while when i was still in school, but then my mind filed it away as a general "sad song, never to be played again" when i got over it and i was sick of listening to melancholic songs on journeys in the belief that it generally made me a very unpleasant person.

of course i listened to the song one full run today instead of skipping past it. (i was also listening to take that). my first thoughts were, ok geez, this sounds quite nice. how do you write something that nice? and i thought that it must be a lot of trouble to compose something which sounds nice enough and put it out to the world. then i had a very randian thought about how most of us associate ourselves with mediocrity and like to hum along to other people's songs. and i felt sad, as i guess the song was meant to make me feel.

then i read how she came up with the song. if it's real, it's certainly very enviable. oh yes, "home had to be in G" and an "african woman was singing to me at 5.30 am in the morning"


gifts. what most of us would kill to have.

yay! 24 and an emo post.

hot nobel favourites



this is beyond annoying. i set up a stylesheet for my page, and it appears 3 different ways on 3 different browsers, none of which is remotely what i want.

i need help from someone who knows how to use css


"as protection against financial illusion, memory is better than law"
j.k. galbraith, the great crash of 1929.

we forgot dynamism and growth, we had thatcher and reagan. and we forgot prudence, and we have... fdr?

also on tv: "politics is nothing but the pursuit of power. i was ruthless with getting rid of people."
- ken livingstone, on why he bears no grudges against people like peter mandelson

wow, what honesty!


authoritarian pointers i have picked up

1. my classroom is not a democracy
2. act like you're paid to be there

Why we do this: we want people to believe that the front of the class is your rightful place. We want nervous students to feel assured that in your able hands, they will accomplish whatever targets they have set themselves out on the course.

the best thing you can do at the start of your class is to look at the blinds. if they are shut, get someone to open them. if they are open, get someone to shut them.

start off by dividing your board into 3 columns. before even starting, this tells everyone. "this is my board, and i know what i am going to do with it. i have a plan", even though you may not have one. use 4 different pen colours. anyone with 4 pens is impressive and worth their

don't dress like a student on your first lesson. keep up the lies, especially to those paying £12,000 a year

don't preface requests with "could we please", like "could we please turn to the board." say "now, let's look at the board". likewise, if you want a response, name + question, and not question to the general spirit in the air dwelling in the classroom.

when passing a question over for unmoderated group discussion, first start to look busy. this is their cue that they can no longer look to you for answers. then walk around to assert authority and keep an eye on what they are doing.

speaking without notes is impressive. so is laying out the entire course in context.

easier to go from authority to conviviality than vice versa.


the british solution.... clean and elegant

here's a bunch of taxpayer's money. i'm going to lend it to you. if you take it you have restrictions on executive compensation and dividend payouts. so please take it only if you really need it. oh, by the way, it also counts as tier 1 capital. pay it back when times are better.

direct recapitalization. no need to design some half-assed auction scheme for mortgage backed seurities.
ec102 lecture reminded me of a macworld conference. about a 1000 people, into this theatre, two huge projector screens projecting whatever models are meant to learnt on the day. a lecturer with pressed shirt, jeans and trainers enthusiastically bundling up and down stage, speaking with loads of energy. everything struck me as pretty american... much more american than i've experienced in my 3 years in london.

well, it extends to the course as well. no more relying on past exam papers. everything's going to be theoretically more tractable (less technical), but the questions are going to be different every year. better for creative and critical thinking, they say.

meanwhile, stephen fry has gone on the record as saying he's migrating to america. he thinks europeans make fun of midwestern americans too much without going over and really understanding what they're like in the country (generally nice, according to him).

at the same time, @ leveragedsellout.com comments you see some of the most hilarious comments imaginable. it reminds me of the comments you get when you've been playing starcraft over the internet when you're 13.


have had a little more time recently after the mad rush that was the september course.

for lse alumni, they'll be interested to know that the new academic building is indeed very new, and is one of those buildings which actually looks up to par with a modern city campus building, ala SMU. gated entry etc... looks fantastic.

in an older corner of the school, brunch bowl has been rather stunningly revamped. very beautiful, clean place, same food though. there are also two rooms in the old building where there is a touch screen whiteboard. you project the stuff onto the whiteboard, the grid on the whiteboard figures what you're touching and clicks accordingly.

Will be doing MRes Metrics this year, the lecturer graciously agreed that I might be bored with the regular Methods of Economic Investigation. Well, the first five weeks are not as important to me, it's basically probability and mathematical statistics built up more rigorously using set and measure theory (like learning grammar). But I'm glad I get to learn different estimation methods, particularly methods which are more amenable to computation.


wall street vs main street?

wall street values. very creative, though=p. also realized most of this shit comes from leveragedsellout.com as in the video. very funny reading


had a great birthday!

but back to work. as you may notice from my reading list, it's mainly international trade which is (pretty boring) and (outdated), judging by the age of some of the textbooks.

well, it's good to know the basics, but this stuff is ripe for some change. also, i hope the US doesn't shut in on itself after this crisis.


"can we go back to the days the dow was strong
can you tell me how a subprime loan goes wrong
can somebody tell me how banks lend with no credit history
hubbard you know the reason... the market crashed on me"

columbia business school is at it again... this is sung to the tune of "on bended knee" by boyz ii men

soundtrack... go scotland!


advert for new york bagels

How do I love thee? Let me count the ways.
I love thee to the depth and breadth and height
My soul can reach, when feeling out of sight
For the ends of Being and ideal Grace.
I love thee to the level of everyday's
Most quiet need, by sun and candle-light.

E.B Browning

nothing you confess can make me love you less - the pretenders
i just had my video-recorded training teaching session today, about which i was nervous as hell preparing for it. i chose to present a simple wage search model that they will cover later on in term, which wouldn't be as boring to me or the other economics phds who would form the audience. but it was slightly more difficult because this is not a topic that i deal with every day.

and it was sort of in reverse order, there were 2 of us who came for the session having not been to the theory sessions, which will be next week. so we had to do our own reading up.

basically it was 4 people going at it and then indulging in mutual and self criticism. my initial fear was that i would think i was teaching fine and then cringe when i saw the video. on the contrary, it was a good day for me because i thought watching the video that i was pretty alright, and it felt less like that as i was teaching.

my main weakness was with precision. as i was going through the motivation and exposition i didn't do some simple things like making sure the axes were labelled, or to mention the proper units of measurement. i also had to wing it when i elicited a question for which i expected a certain response which wasn't relevant. but it turned out that simply pointing out that the suggestion was not what you had in mind is a sensible way of dealing with those things.

picked up a few skills. how to partition the board. confirmed my distrust of projector-based methods of teaching quantitative subjects. linking the topic of the day to the previous lesson and to subsequent work. and they were really really sharp, although we were mostly presenting different courses they could pick up little mistakes in the content although we weren't meant to be prepared. then again this is undergraduate economics work.

but it was a good day. got through a session and i feel more prepared and optimistic about my abilities. and i thought the video was pretty entertaining in the end actually. damnit, i'd pay to watch myself.


had pretty little sleep preparing for the session today... perhaps i was little over-enthusiastic in trying to impress.

anyway, after some swimming i had a bus ride back and there's this magnificent version of sleep where you're listening to music and you just drift off to sleep. you don't fuss about being tired, you don't worry about whether you can get to sleep or what you have to do for the rest of the day. friday afternoon, work done, just sleep. reminds me of someone who told me once that the greatest joy in the world is to be able to tire yourself out and then fall into the most blissful sleep imaginable.
mick jagger was quoted after edmund burke today in the house of rep debates. he was introduced as a "great british philosopher"

"you can't always get what you want, but you get what you need"

the traders are gathering like vultures around the tv screens. seriously, this is the first time i've seen the nyse resemble a betting parlour broadcasting the horse races, as they watch the numbers blink on the screen.

and the thing about this crisis is that the economist has finally gone back to writing about economics again, instead of foreign policy

it looks like it's passed. the republicans are still split, and this only passed because the democrats got their party disciplined (albeit with all sorts of sweeteners)

the problem has spread

in the short term, it is no longer a mortgage securities problem.

i was surprised by how many european banks needed help. it turns out that this is because in terms of loan/deposit ratio, european banks actually lend an average of 1.4 € to the €, compared to 96 cents to $1 of deposits for US main street banks (that is why US regional bank share prices are still holding fairly steady).

banks have been used to liquidity provided by short term money market funds and institutional investors which issue 3, 6 and 9 month paper. in effect there is a run on this shadow banking system, and so banks have to borrow overnight from one another. this leads to a bidding up of overnight rates to crazy levels of 6.88%, and 11% to borrow dollars from the ECB (The Economist). Banks seem to want to hoard cash even though they can earn more lending to each other. So this will affect your run of the mill lending rates which affect the economy.

there are arguments that the paulson plan will not solve the crisis, because if the crisis is in the money markets now, then the problem is no longer the value of MBS. to fund the plan, they need to sell T-bills, but in the current climate, people prefer to hoard cash and pile into T-bills. So there is no net credit creation and still a drying up of credit lines to private businesses, and this represents a liquidity trap. (naked capitalism) In simple terms, this is a crowding out. Given uncertainty, I would rather lend to the government than to private firms/banks, as T-bills are less risky. This will drive yield down on these things, but if the fed keeps issuing, the yield will not fall as fast, so it still makes sense given the risk environment to just keep your money in them.

the view that a recapitalization of the banking system is what is truly needed now appears to be a consensus view among economists.

regarding the strength of the euro, marginal revolution puts forth the argument that the chinese now trust the us$ as a "battle-tested" currency, as the us has never tried to wipe out the chinese. he also mentions that european banks are now facing bigger problems and their problems will be a larger share of european gdp.

capital needs to flow back into the system. i think this needs a global solution, given that there is a global imbalance in capital concentration and capital flows which is not making this any easier.

i guess i'll be taking international economics. one of the lecturers is just back from a stint at the new york fed, so i hope to be hearing more about this soon.

nation building

what i learnt from miguel today

do you know what the five stars on your country's flag means?

uhmmm... i'm not sure... i think i used to know

what does the sun in the middle of the argentinian flag mean? is it some incan sun god?

no. it's a freemason symbol. josé de san martin who liberated argentina was a freemason. apparently he met up with simon bolivar who was the liberator of most of north america and had to give up his army to him because he was lower in rank


well i was stunned, and i went to check it out. but i went to check it out and it looks like manuel belgrano was the guy who designed the flag, and he was indeed a freemason.

well, they have plenty of history and wars of independence, and singapore may have a populace who doesn't know what their flag means, but we don't have tinpot governments that fire the entire statistics office for reporting proper inflation figures and run enough inflation to fuel 5% price increases per month while keeping the peso at a fixed rate to the dollar.
very happy with the micro syllabus that i have to teach for ec102. some of this stuff is even new to me!

that means that i did not cover them when i was taking ec102 here all those years ago. the micro course now feels more modern. search theory. adverse selection. some introductory game theory. of course there are your staples such as price and production theory, monopoly and industrial structure. i would say that there is a departure from classical utility theory, in the sense that the price theory portion does not go into detail with utility functions, indifference curves and the like, and that has been culled to deal with more interesting subjects.

so less rigour on that part, but a more engaging course overall, because many of these new things are less abstract and more amenable to real life experience and examples.

last year's exam was also reputedly hard, as there was a section with "more challenging questions" and a unique "MCQ" section, and MCQ sections can be really devillish.
the options market today shows the importance of incentives.

most of the lecturers today were pretty much on form. they were trying to pitch and sell their course and were very attentive to the needs of their audience, handouts and all. i would say it was more inspiring than most of my undergraduate lectures.

also, the number of people attending the capital markets brief was supposedly a 40% drop from last year. well, you have good times, you have bad times.

the msc options courses are their bread and butter. they are the most advanced taught courses they offer, and the less people take their course, the less they can justify the number of specialists they have in that particular subfield.

monetary - interesting techniques, handles asset pricing bubbles as well. unfortunately, deals with a closed economy

industrial economics - plenty of case studies and statistical analysis. very charming case put forward by a professor whose textbook is standard in the field.

international - open economy macro, but i have to sit through half a year of intellectual masturbation which is trade theory. trade theory has interesting questions but uninteresting answers.

political economy surprised me. but a little too abstract for my liking. i may also turn up for a few development and growth lectures

and i was surprised to see euro-usd at 1.38. the gut instinct was "wow, what an opportunity". i guess they are reacting to the contagion to the european economy, the european bailout plan and the fact that the ECB will finally lower rates. but if you asked me to trust the value of european money vs the value of american money i would choose european money any day. crisis in europe is oversold.


sudhir venkatesh always spends time with interesting people to retrieve data. shining example of a data-driven sociologist

first it was going undercover with a gang, and now it's prostitutes. he was the guy who did the work which was highlighted in freakonomics. steven levitt just did the regressions.

this is my contention:

men don't need to have their problems solved. men just need to be told (or feel) they're great.



a shining example of pro-active central bank policy

from the ft today:

santander in spain is the big winner of the financial crisis, now having 3 of the british commercial banks.

regulation from madrid was responsible in reining in banks when they were on an acquisition spree in mexico, and they also demanded a higher regulatory capital ratio than required by the EU. the actions seemed odd at a time, but spain has learnt the lessons of a previous financial crisis. it shows that people who have experienced shocks tend to have the most sensible attitudes towards regulation.

this is all the more remarkable, considering that there has also been a property bubble in spain


this is an old classic from columbia business school

ben bernanke has spent much of his adult life studying the great depression. he will keep throwing money at the markets anyway, it was $650 billion today, although admittedly those are short term loans backed by less than perfect collateral.

i don't think we have a return to andrew mellon's 1929 policy. "liquidate! squeeze the bad out of the system" as much as people would like to see that happen, the effects would just be too disastrous. before the great depression, ben strong, who was fed chairman for 14 years had recently passed away, and nobody had a strong relationship with europe to co-ordinate policy with them. well, now i am waiting for my old books to be delivered to my place on my birthday. my great depression history books are in there.

the belgian government just bailed out fortis ag today. i didn't know a country like belgium could be affected. dexia, french-belgian is in trouble. hypo in germany needs emergency short term funding. glitnir in iceland has been nationalized

dow ended at 10,365. largest intraday points loss in absolute terms. but nowhere near 10% circuit breaker territory.

there is one view. TED spread spiked today to 3.5+%. 350 basis points is the highest TED spread in history. 3-Month London interbank offer rate is 3.76%. So that is the price of money right now. If that looks low, well it is usually about 0.20%, and technically getting to 3.5% is a 6 sigma event (and last year when it first blew up it was a 9 sigma event). which shows how wrong all the models are. It is still a price, and markets are functioning. But it reflects a huge pricing of risk and also a sign that the Fed could be running out of ammo.
i am watching the craziest selling frenzy in some time. do you think we might get to 10,300 by the end of today?

tribute to an unknown cyclist

they're putting up bicycles painted in white chained to railings today to remember all the cyclists that have lost their lives.


from a wiser head

"there was a certain distance from economic reality which allowed some of this bubble in my view, and that is why your take (or mine) is as good as those who got too lost in the beauty of these deliberately opaque financial instruments. and the question really is, what has all this got to do with the real economy? anybody who has clear answers to that is probably a charlatan.

in the middle of all this, an ec400 exam must seem odd. i find it interesting how the world goes on now -- although my experience with other historic events is that most ordinary people do just get on with their lives"

it fits my intuition. things are not going to be good, but i doubt we will have to push apple carts on the streets, if we are sensible and avoid hyperinflation and commercial bank runs. i think our generation simply has to get used to the fact that growth cannot be taken for granted, and we are not all going to get rich quickly and painlessly.

by the way... push email. pros and cons. i now reply to emails INSANELY quickly, because it is like text messaging and having a conversation. but it is rather distracting to have something beep everytime you get a message. it steals time away from you, slowly, despite the trappings of convenience it provides. i think perhaps it is better to get all the email writing done at once, although it is nice to read emails as soon as they are sent (so you can reply if they are urgent, or you can mull over them on your bus ride back)

you know what else is killing me? freeview. 40 free digital channels.

the rational vote

is it possible to be for the iraq war or against the iraq war?

is it possible to be for the paulson plan or against the paulson plan?

i think all of us have our opinions on such issues, and perhaps, as voters, one is supposed to pick leaders who we trust can share the same opinions as we do. yet most of us have never had the relevant experience in the policy or environment of a given issue
so is it possible to be against a plan in principle? one could object to the iraq war, but there was always the chance that there really could have been weapons of mass destruction, which could have been a material threat. and us, not having been privy to such intelligence shouldn't try to second guess.

yet, after the fact, it appears it may have been wrong to go in in the first place. i personally did not even think that WMD was best contained by a land invasion (i think that WMDs are countered by classic mutual deterrence, using your own WMDs and SDI), so that as a justification didn't fly. Yet, at that time, with the fog of war, it would have been presumptuous to say I knew better.

So, perhaps we can only punish people after the fact.

With the Paulson plan, it is clear that it is not the best plan in principle. Yet, again, I do not have enough experience and intuition honed by years in the markets or policymaking. I do not know for sure that if the plan does not pass, the markets will collapse. So a quick response may very well be necessary. We may never know the counterfactual, or it could be too risky. Still, I always noted that Keynes came to the right conclusion vs the other classical economists of the time because of his greater practical policymaking experience.

That is why there is a certain dilemma on my behalf. I've been invited to a debate on the credit crunch, and while I've generally been trying to keep on top of it, I don't think I have any credibility or special information which would inform my opinions.

Yet, this reminds me that many of the decisions which affect the world are basically down to trust that politicians, managers, CEOs and people who are privy to those important pieces of information are working on our behalf. I am not sure that that is the case or we can ever have a world that will be like that, anyway.

So how do voters pick leaders? Should voters even pick leaders?
1. push email. i've never had push email before, so despite my old phone having email capability it was just so annoying to check things manually. now it comes up as an sms beep and if only a short reply is required i can effectively text message back. attachments actually download really really quickly (previously i was only using GPRS, this is my first 3G experience).

2. the typing is easier than i anticipated. the screen is really big, my fingers are pretty small. stuff like blogging and surfing the net are actually more pleasant with the screen mileage. and it's FAST.

3. jury's out on the battery life. especially if it's an integrated phone you could end up doing too much with it. imagine watching a video and then trying to make a call after that. let's see how long this baby can last.


wow the presidential debate was so civil and intellectual

guys, come on... take off your gloves, insult one another! i don't want a policy debate. i want fistfights and gripping television, not a lecture on international relations! what? you guys can pronounce world leaders? i don't care! call the other person names!

seriously though, the tenor of the debates i guess reflects the gravity of the problems surrounding the united states right now.



look, i am no fan of racing, but i must admit the singapore gp track looked really amazing when i was watching the highlights on itv today... there's something about racing at night which reminds me of a videogame, like need for speed or project gotham racing.

it looked marvellous, especially with the normal cars buzzing along on benjamin sheares bridge. so this is one of those things our country can be proud of. quick countrymen... more celluloid moments!
working on my lse site now...

a day ago i was still contemplating crazy spending decisions because i was bored and i thought i may need to get a pc, as my software usage is becoming increasingly windows intensive.

oh well, i've decided against it. in the meantime, remote desktop is my saviour... it's a pretty amazing thing. it's basically like getting parallels for free, it emulates the school windows desktop on my computer, allowing me remote access to my school web server and storage page. so at least i can edit it from home. unfortunately, the coolness doesn't extend to the LSE web server, where they don't support FTP and the other stuff, like Movable Type or Wordpress

first insomnia post in a while

it's the last day of math camp tomorrow, after 3 weeks! i've managed to clear all my work, and i just have to do some revision for the exams next week... to be fair, i've covered most of the stuff before, differential equations, hamiltonians, bellman equations, markov processes, statistics, constrained optimization... just that the notation is slightly different and they added a few bells and whistles.

exams are next week, and i suspect that they won't be as crazy as past years. i think they learnt that trying to cram stuff down in 3 weeks and then setting a very hard exam is not very fair. it's pretty crazy, because if you're in school from 9 to 5 of course you're going to fall asleep during lecture, especially if most of the stuff is already in your lecture notes.

but i think it's been good for camaraderie and class banter. i've also learnt a lot from classmates who have come from other academic backgrounds.

in other news, i have been assigned all of my classes on friday. unfortunately i'm also assigned the last class of the week, friday 5-6 pm and that will really be a challenge because seriously, everyone is just waiting for the weekend. i also got 9-10 am and 12-1 (earliest class and lunchtime? i feel bullied), so they've given me these annoying blocks of free time which i hope they'll fill with my own classes. otherwise that la fitness gym membership is going to start being worth it.



I got my teaching position!

I will be teaching EC102 this year, which is the introductory course for students in the Economics department (and actuarial science, etc)


new home

McMillan Student Village
Creek Road

Moving here after Holborn was really really nice... big room, having my own kitchen, dining table and bathroom. Everything's a lot newer and there's a proper courtyard (just like Lilian Knowles!) It's wider than the Lilian Knowles room though. 3! bookshelves, all the wood is pretty sturdy.

It's by the river, and faces canary wharf. now i just need to get over the commute to school

and i get 4 free cans of red bull, which is stuff which takes sleepy time and turns it into wakey time in the short run.


today's soundtrack

of special note... reading the subprime solution by robert shiller. i notice that this is what obama intends to do when elected (mccain wants to set up a commission so i don't know his plan yet) but, think about it, when he gets elected, implementation lag, we are already halfway into '09. if they wanted to do it, they should have done it much earlier. not sure if it will help much next year, by which time housing prices may have stabilized.


i submitted my teaching application yesterday for ec102 and ec100. let's hope all goes well. then i won't be able to complain about the teaching anymore, i'll have a few extra bucks to spend and i'll feel more productive. i met up with dr shapiro again and discussion about the credit crunch aside, i always enjoy being regaled with stories of how chicago, being able to take a cab to work on a TA allowance then, and stories of the great depression. to be fair, crises like these have me reaching out for the econ history books more than the models.

prison break episode 4, sarah is in the bar drowning her sorrows and asks, "is all life a tragedy?" sarah and michael have something on about getting together "one day", and michael says "one day is today!"

if i've felt a little uptight recently or keep railing or moaning more than i need to, it's because i see where i need to be and getting there seems a little difficult. having something in the future to hold on to, to work towards, has undoubtedly been better for me in terms of being more serious in my work. but it generally makes me an unhappy person. i need to swing back towards some of that "it's today, you're alive" thinking. especially in the midst of all this worry and panic, it is worth noting that thus far things have held up very well. if the world is paralysed by fear, it is important to keep your head. the markets have solved many things but not human psychology. the AIG ad wasn't sarcasm. i thought it was quite good.

p/s spurs are rubbish. and i have a special place in my heart for liverpool street station. it reminds me of all the trips i had to make there. really, london is special to me.

cheer up guys

i think it was an ogilvy ad, based on the love song of j alfred prufrock.

talked about this with my lecturer today as we drifted off topic. i disagree with her on some points and none of us are big experts in this area. but a few key points i took out.

1. watch russia. the signs are the same, country risk, fall in oil prices, capital flight. what will russia's impact be on wall street? it was masive in 1998.

2. helicopter drops are a good thing if credit is contracting, you want to keep M2/M3 up so you can print what you like without it being inflationary. anyway, i don't think they've resorted to the printing presses, the treasury is basically depositing more money in the fed through sale of securities allowing it to lend more. this has pushed t-bills down to 0.01% occassionally on wednesday.

3. this could get really messy, e.g. japan asset price bubble mark 2. i disagree because it seems there isn't anything so far much wrong with the rest of the economy, bank runs, etc. My worry though is that if they try to engineer a solution where they take bad balance sheets and add them to adequate ones through takeovers, and these adequate ones belong to commercial banks, then you lose the firewall between the financial maelstrom and the consumer's deposits. then you could have a problem.

4. economics is a countercyclical profession.


This reminds me of my mom. She was an immigrant, small businesswoman who was always complaining about how "big" business used its power to take advantage of the "little" people. When I told her I was going to Wharton, she said, "What's that?" I said, that's where one trains to become one of the exploiters. "Oh, that's great," she replied. "If you have the choice, why choose to remain small?" I miss her.

Quote by MHodak on marginal revolution
vix up 24% in a day!

the most hilarious thing today was banking haikus

Run fast to big bank
Take out all of your money
Hide it somewhere safe

to be fair though i thought this episode has been handled very well so far


great weekend

liverpool beat man utd 2-1

sunny weather for the first time in a week. made the soccer at regent's park less of a mudfest

thames river festival! live music, fireworks!

also. i was just telling a friend of mine who was preparing for next week that i didn't think the lehman deal would be settled this weekend. lehman is not quasi-public and doesn't deal in anything as important as the mortgage market. so i said the bailout was just a rumour. but we'll see how next week unfolds. whoever was long on vix must be smiling today.

next week ramps up to 9 to 5 everyday with concurrent micro and stats classes and lectures, so that's another step busier than this week. luckily, have done problem sets in advance.
temporary address:

room 221, high holborn residence, 178 high holborn, london wc1v 7aa



haven't had much sleep recently... some nights it's because i've a sinus problem so i have a blocked nose and i can't sleep. no choice but to stay awake and work at reduced efficiency. on a positive note i have chewed through most of the math for micro and stats tutorials, as it's mostly revision.

back to macro now, which i love. but while i enjoy it there's a thought in the back of my mind that i may never work in any central bank anyway, so i may never use this stuff.


current address (until 20 September)

Room 221, High Holborn Residence, 178 High Holborn

too small, and no en-suite bathroom! cannot walk around naked in my room.


fear of death makes men want to have more children

falling ill...


had an introductory soccer game today at hyde park. many south americans. but my hypothesis was true in general. if you're on a postgraduate degree in economics, then your soccer can't be that good. they were decent, not great, which is why we're all studying economics rather than doing something more fun. was the only asian there though. hypothesis 2: skinnier than average people have a comparative advantage in soccer, although maradona is the exception which disproves the rule.

i don't think peak oil will come in my generation. i think peak "spring from the ground" at $1 per barrel or less extraction cost oil has come... but look at all those unconventional sources! plus, i think the british may be pissed off enough to start up more nuclear plants.

next week's schedule

First week... not too busy, still have time to skype

All Lectures at Old Theatre

Monday 8 September

10.00 - 12.00 Revision Maths Lecture
16.30 - 20.30 Induction + Welcome Reception, Senior Dining Room

Tuesday 9 September

11.00 - 12.00 Revision Maths Lecture
14.00 - 15.30 Revision Maths Classes (either of the 2)
15.30 - 17.00

Wednesday 10 September

11.00 - 12.00 Revision Maths Lecture
14.00 - 15.30 Revision Maths Classes
15.30 - 17.00

Thursday 11 September

10.00 - 11.00 Math for Micro Lecture
14.00 - 15.30 Revision Maths Classes
15.30 - 17.00

Friday 12 September

10.00 - 11.00 Probability and Statistics Lecture
11.00 - 12.00 Math for Micro Lecture
14.00 - 15.30 Math for Micro Classes
15.30 - 17.00

return to tory boom and bust

austerity britain. times are bad in the uk. apart from the autumnal storm, times are so bad that gordon brown is telling everybody to save food, because we throw out so much food every year. this is what happens when you have an economy built on finance and very little else.

the pound has given up most of its gains against the us dollar and is performing abysmally against the sgd.

meanwhile, fannie and freddie are going to be nationalized. to be fair, these GSEs were FDR creations, so you can't blame the current administration for "nationalizing" them. they get preferred stock anyway, so there's some taxpayer protection. and the suspected endgame is not to keep them nationalized. it's to split them up into smaller organizations with more manageable risks (which makes sense). if mccain wins this should happen, i'm not so sure what obama has to say about this.

but there is a little spot of prosperity in the uk. the blue side of manchester. £900 billion!

bumper cars

seriously, without traction control and the rain, the belgian grand prix was like bumper cars...but there was a fantastic manoeuver (seriously, i used to be good at writing, i can't understand why spelling such words is so difficult nowadays) which ultimately hamilton got docked 25 seconds for.


for once in my life....

i have a toasty jacket.

what do you have today?
back in london... holborn is not quite bankside... at bankside i had a fantastic room facing out... now i have a lovely view of the courtyard... i always prefer facing a road, i like noise and bustle. there also isn't an ensuite bathroom. not for me guys... for me facilities >> location.

but it's good to be back and in my own independent dwelling. it sharpens my territorial instincts... on the first day, was welcomed by a traditional autumn storm and a file which said: some of this material is not lectured. please finish over the weekend.

so, lot's of stuff to do but it isn't really that difficult. will be heading to bicester to do some shopping.


just as i returned, there was an england u21 - portugal u21 match that they were struggling to sell tickets for, so they had one of those offers like our national stadium where you could go in for £10. i thought it was a pretty good offer for a match at wembley with quite a few premiership players on show and something to play for (a euro 2009 playoff place).

if the match is any indication, we shouldn't expect portugal's future to be bright. although it may very well be the case that they graduate many of their junior players to the senior squad already. england u21 appear to be trying to pass the ball, which they can do quite well. however, in pace, power and physique off the ball they seem to be that much stronger... agbonlahor was single-handedly owning the entire portuguese defence. so the temptation is there to just keep lofting it to chase. but well portuguese guys, that's why you should stop diving and learn to bulk up like a certain c. ronaldo.


childhood dreams

reading bill bryson's short history of almost everything, i'm reminded of one of my childhood dreams. i wanted to be a geologist and collect rocks in remote corners in the world... i used to be able to be identify rocks with a stamp collecting kind of obsession, and be excited by the words moho discontinuity.


just took my super high-tech ippt on saturday, the one with all the bells and whistles and electronic counters... my weakness was standing broadjump!

i missed the singapore bay run this year because i was too lazy to get up... i've submitted a ballot to run for the london marathon to make up for it


ippt's coming up in 2 days. i've been running a route which i've crafted since my jc days... it goes by chinese high, goes into namly avenue, passed by the hwa chong boarding school and SIM which is wonderfully lighted, some MP's (or is it the SM's) house past the guards, down into the playground where there are some maids usually having a quiet prayer sessions... there's a cafe set in an old row of shops there called la roma which is lit very well, and it reminds me of a restaurant we ate at at louang prabang (was reminded of it because someone i know is going to work there). i would love to have a cafe just opposite my place which opens till 10. i do like to read and talk outside my home.

the whole place still feels the same from when i was training for an ippt gold to get a 3 month exemption from NS fitness training. i even remember the walk back when i would think of all my crushes and be really sad about them. heh.
i cannot do something that bill clinton is a master at:

speak slowly in clear simply language, framing things into good and bad while explaining economic issues, and most importantly, sound enthusiastic and passionate without coming across as scarily so like joe biden... look at the body language...always laughing, shifting his shoulders, looking relaxed... you want to be his friend. when biden points, it looks like a headmaster doing it, while bill clinton speaks at a slower cadence, so when he moves his finger to the words, it looks like a conductor. his head rolls from side to side, and having a voice and a southern accent doesn't hurt as well. he did a fantastic job explaining why the other party shouldn't be voted for, while always smiling and speaking like it's nothing personal except that their policies happened to suck. i love people who attack behind a smile!


i watched obama's DNC 04 speech, which was hailed as a masterclass. probably for the content, not the delivery. i realized that these things come with practice. obama's delivery now is x times better than he was then... he still spoke a little too quickly and didn't play to the crowd, his voice doesn't have the same tenor it has now. you can see the nerves and the urge to just get through his content, such that he talks over applause. so you see, american campaign speech training is the best in the world. although PM's Questions in the UK and Boris Johnson take the prizes for wittiest speeches.

and especially for bill clinton and obama, it helps when you're winning, have a track record and a favourable audience. after all, you can take as much time as you like when you're the big shot.