Überreicht: Das Otaku


These (
↲-anyone want to translate the Spanish for me?,) guys (along with the Craigslist posters) may be the manifestation of some sort of twisted Malthusian population equilibrator:  

“Naruse is part of a mushrooming fantasy world in the city’s Akihabara district, where make-believe maids are spilling out from their original novelty cafes to lure mostly male customers to reflexology centers and souvenir stalls.

…The widening popularity of the phenomenon is causing some researchers to warn about a growing pool of introverted faddists unable to engage with real people. Akihabara is home to about 60 stores where “maids” greet “masters” known as otaku — Japanese for geeks.

The shops allow otaku obsessed with video games, animated films known as anime, manga comics and action figures to sidestep contact with mainstream society, says Keiichi Kashiwabara, a philosophy professor at University of the Air, a government- subsidized school open to all high school graduates.

`Many young people are wrapped up in their own fantasy worlds,’ says Kashiwabara…. `The fact that maid shops are spreading means that people are becoming socially inept all over Japan.’

`In the past, people used to go to pubs [and those of us who will pass on our genes still do on occasion],’ Amemiya says. `But people who grew up playing video games don’t really know how to relate to others.’” [Bloomberg]

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Kahneman, On thinking


Lots of very very good people went on with the missing parameter for three hundred years—theory has the blinding effect that you don’t even see the problem, because you are so used to thinking in its terms. There is a way it’s always done, and it takes somebody who is naïve, as I was, to see that there is something very odd, and it’s because I didn’t know this theory that I was in fact able to see that.”

—Daniel Kahneman [link]

Stephen Roach Op-Ed Piece


Roach reminds readers (ahem, the FOMC) that altruism is not the impetus driving foreign entities to fund our nation’s debt, and that
no nation has ever devalued its way into prosperity.” [NYT]

Genius factory: On sperm banking, nature v. nurture, & evolutionary psychology


About two years ago David Plotz’s Genius Factory: The Curious History of the Nobel Prize Sperm Bank was published. I was reviewing books for an online A&E city guide at the time and pitched the book to my editor, who instead saddled me with the novel of one of her friends or acquaintances or something of the similar sort. So, it was with pent up anticipation and (after canvassing some of the recent literature on evolutionary psychology) much interest that I began reading this book after a fortuitous reminder of its existence landed in my inbox. This isn’t a review, but rather I’ll lay out the interesting points I encountered while reading.

First, background: In the book, Plotz chronicles the birth, life and subsequent demise of The Repository for Germinal Choice, a sperm bank started by millionaire tinkerer Robert Graham (famous for inventing plastic-frames for eyeglasses just in time for the 60’s when glasses covering half of one’s face was all the rage). Graham, whose name was later tarnished somewhat through the bank’s association with eccentric Nobel laureate William Shockley (who publicly shared his beliefs that the poor and ‘dim-witted’ shouldn’t be allowed to procreate: “The government, he said, should pay anyone with an IQ of less than 100 to be permanently sterilized -$1000 for every IQ point under 100”), launched The Repository for Germinal Choice in a crusade to

save mankind from genetic catastrophe. In modern America, the millionaire complained, cradle-to-grave social welfare programs paid incompetents and imbeciles to reproduce. As a result, ‘retrograde humans’ were swamping the intelligent minority. This ‘dysgenic’ crisis would soon cause the evolutionary regression of mankind, as well as global communism.

And he believed that the only way to stop his fears from seeing the light of day was to help disseminate the sperm of, in his opinion, superior men. Graham’s intentions were fundamentally benevolent, he wrote:

The disappearance of genes for high intelligence is a defeat for the uniqueness of man, an erosion of the essence of the human condition. The childlessness of Isaac Newton or a George Washington, the extinction of the Lincoln family, the spinsterhood of the brightest girl in the class, are great biological tragedies. As a result, mankind is deprived of some of that essential quality which separates him from the apes.

Sperm banking: When suppliers refuse to cooperate
However, the problem was that in his quest for Nobel-laureate-quality sperm, Graham found few men of qualifying substance willing to donate. In the end, this lack of product led to lax requirements of specimen donors and weak, and in some cases no concern with fact-checking, so that a donor’s self reported history was taken as fact on his word of honor alone. Men whose IQs were unknown were passed off as men with IQs of 160, etc. Of the 200+ babies born from The Repository for Germinal Choice, none descended from Nobel-laureates. Nonetheless, most of the kids grew to be gifted, and if not, extremely well-rounded and well-adjusted individuals, which is no surprise considering they were raised by a self-selected sample of attentive women, all concerned with bringing up children with such qualities. Plotz notes that the mothers he met with all took an active interest in their children’s lives and provided stimulating environments to cater to the concert pianists and accomplished scientist’s written into their children’s genes at conception. Read the rest of this entry »

Now online: Your general practitioner


As the sibling of a surgeon, and having been forced into relations with other ‘doctors’ by the big black box in the sky, I often find myself in the middle of conversations about how tough it is to make a living these days. This group is invariably, in my experience, the one amongst the graduate/professionally-educated bunch that does the most complaining. The problem is not that a quarter million annual salary used to be a princely sum, but is now paltry in the neighborhood circles they’ve grown accustomed to but that are now populated with financiers and their peripheral support staffs (even the women employed solely for the purpose of answering phones and setting up conference calls in ‘these neighborhoods’ are better compensated than many a general practitioner –year-end bonus included, of course). Rather, the problem lies in the fact that this self-selected group (more often than not, and of course there are exceptions, those choosing this path do so because of the ease in which the life unfolds once accepted to a medical school –as in, life becomes about getting into medical school, every decision after that is determined by a lottery system or similar, and provided you don’t fall asleep during your boards and are open to changing to an easier specialty, your future can be set without your having to make decisions or exert much initiative), has never experienced the challenge of having to produce an original thought, which also applies to task of earning their living. You go where the system puts you. Period. But, if you’re one of those on the cultural fringe, you say ‘fuck the system’ and you make your own way; case in point: Jay Parkinson, M.D. Instead of complaining about the wealth being made from web revolutions, simply chocking it up to the stilted nature of medicine in the world upon us, and trudging back to his private practice in some New York suburb with his tail between his legs, Mr. Parkinson put his private practice online

Strange. How does this work?
According to Dr. Parkinson’s website, patients sign up to receive his services by paying an annual fee (currently $500/annum). Dr. Parkinson then contacts the patient, and the two chat about the patient’s medical history. After that, you contact him (via phone, email, IM, or video chat) when you need him and he will respond by ‘getting you exactly what you need.’  Hypotheticals exhibiting how he might service you range from sprains requiring the assistance of specialist to the more frivolous.

Good for patients, bad for Dr. Parkinson?
This system provides obvious benefits to patients. First, care isn’t restricted to an eight-hour window –a window observed by most business, thereby increasing the opportunity cost of spending time in your physician’s office (lost wages, etc…). Second, the time normally lost to patients waiting around for the doctor to finish up with the last guy is reduced, or at least more pleasurable. Imagine you fracture your wrist in the park. You email Parkinson on your Blackberry, he texts you saying he’s busy, but can come down in a half hour. In the meantime, you take a picture of your arm and send it to Parkinson, then duck into a coffee shop. A quick look at the picture and he texts back saying you’ll need to do x, y and z, and he sends you along to a specialist who he has just called…

But, in order for Dr. Parkinson to make ends meet in the village, he’s going to need at least 200 patients (give or take some). With this business model, the doctor has every incentive to increase either the number of patients or the annual service fee…which raises a fundamental issue: moral hazard. When people pay a flat fee for a service, they tend feel the need to abuse it. Dr. Parkinson’s ‘examples’ includes a case in which he provides services to a woman who enlists his help because her boyfriend calls her fat. Patients might be more likely to bombard poor Dr. Parkinson with such requests than they would if they were forced to walk into an office or pay a premium for that visit. Does the service really allow Parkinson to service more patients if he’s receiving more requests but the marginal savings to time expended per patient is minimal? At some point, I imagine Parkinson will raise his fee in order to better serve patients if requests get out of hand. He might even apply a small premium per call received, so as to combat the frivolous requests that would never illicit demand for institutionalized medical services otherwise. The beauty of this business model is that Dr. Parkinson is in control of his fee structure, and can change it to meet his own and his patient demographics’ changing demands without the constraint of hefty fixed costs associated with the traditional system. HT: [Gawker]

I like Jim Rogers, and not just because of this

Jim Rogers [video and text] says [Stephen] Roachcouldn’t even spell ‘commodities’ two years ago.” Roach wearily responds that, yes, he used to write “commodities” with one “m” before Rogers kindly set him straight. [vintage Forbes]

Charlotte, NC: Sometimes life calls for sacrifice, but this is not the place to do it

With about 5% of the city’s workforce propped up by two large, national banks, Charlotte is all the rage for single-family housing speculators and metropolitan transplants. Data from MacroMarkets’ Case/Schiller Index series shows that the trend in home prices in Charlotte has opted for a steadier sloping linear growth path versus the steeper S-curve of the national index (see chart) and other flipper-happy metro areas. Of course, office and residential developers are excited to capitalize on this anomaly.

untitled-truecolor-011.jpg

“Both Bank of America and Wachovia are building downtown office towers more than 30 stories high to provide space for their work forces to grow (About supply gluts in ‘sleepy’ towns deemed by developers as major metropolises waiting to happen…The last firm I worked for rented 3,000-ish square feet of office space on the 19th floor of a Dallas high rise…in order to store old files…for less than my monthly SF rent).

…The banks `are a magnet,’ said Robert Eisenbeis, former head of research at the Atlanta Fed… `Charlotte has become a financial center. Charlotte is an example of a community focused on services with a well-defined focus (…until some foreign bank comes along and buys Wachovia).’

Some transplants find the average-middle-America-suburbia lifestyle to be an adjustment tolerable with offsetting concessions, namely cheap housing. Of the move, transplants commented,

“We can get a house we really want in Charlotte, and I think if we make the right decision, we’ll be sitting on a lot more equity in 10 years.”

“It takes about two Top-40 songs and I’m pulling into my parking lot”

Bargain, or the national pastime of settling? Trading ten years of life for a ‘decent’ return on an equity investment doesn’t seem as rational as Russian agro-bonds and living in an international city promising a relatively greater proportion of thoughtful and interesting residents.

Karla Knotts (president, Charlotte research firm): We don’t do anything flashy or showy around here
ES: So, here in Charlotte, you live to work? Is that how you’d describe the lifestyle?
KK: [no response]
ES: So, bondage…would you call it that?
KK: We call it plodding. This is not Vegas or Florida.
[Banks Help Charlotte, North Carolina, Buck Housing Downturn, Bloomberg]

This guy knows


A
wise man who drives a yellow Porsche –but refuses to buy the stock on the basis that the approx. third of revenues from the U.S, renders Porsche “too dependent on debt-ridden Americans”–once said: “U.S. consumers won’t benefit much from cheaper loans if their bank is too worried about liquidity to give them one.” [Germany’s Ehrhardt Drives Porsche, Shuns Its Stock on U.S. Link, Bloomberg]

Consider the following, a hypothetical…hypothetically posed in your upper division Macroeconomics course in undergrad, lower division where I come from, but hey each economics department has it’s own virtues:


untitled-truecolor-01.jpgThe introduction of a seductive new credit tool and homeownership promotion by the central bank of Country X has led to an age of irrational homeownership (see chart, source: US Census). A few years and a peak in single-family home sales later, talk of defaults and spiking foreclosure rates populate the pages of most mainstream national newspapers. In response, there’s a threat of some irresponsible homebuilders and mortgage lenders seeing bankruptcy [for the 101B folks (who can handle noise for what it is): investment entities holding assets packaged with home loans cannot calculate returns for anal investors b/c the terror -and subsequent downgrades by credit rating agencies that should have been doing their jobs- has eliminated demand for said assets, thus wiping out the semblance of any functioning, liquid market for the things and rendering their values unknown –this forces a few investment managers into selling boats, helicopters and vacation homes]. You are primarily worried about inflation and preserving what little value your currency maintains against those of robust economies around the globe. At the moment, gold, oil, wheat, and other commodities are at multi-year highs. Your currency is about as valuable as baby wipes bought with ₤s. Oh, and a newscaster has a breakdown on network television (he yells at you, are you going to take that?)
Q: You sit on the FOMC, and for the purpose of this exercise your vote is the only one that matters, how should you enact monetary policy to best respond?

I’m almost certain that if I had answered with ‘lower both the discount and federal funds rates by 50bps’ the GSI grading my exam for Janet Yellen would not have even offered partial credit. But, anyway thank you for the rally –great opportunity to dump US equities and move cash offshore.

In the news Tuesday: Carbon credits


Vatican Penance: Forgive Us Our Carbon Output
[NYT]
Upon receiving a donation amounting to about 37-acres worth of forest generated carbon credits, the Vatican will become the globe’s first carbon-neutral state (in addition to holding its throne as the world’s only non-commercial economy). The donation comes from eco-restoration start-up KlimFa (subsidiary of Planktos (PLKT.OB) –the parent company is not yet profitable [2Q07 10Q], which hasn’t stopped  its stock from erratic rallying at the announcement of private funding; up 75-ish% YTD). KlimFa, headquartered in Foster City, CA despite being based in Hungary and dedicated to restoration projects in the EU (since the US is not yet on board w/ cap and trade), acts as a third party forest restorer to owners of dilapidated forestlands. The company takes a portion of its fees, presumably, in the form of carbon credits which poses issues such as how one should value the restoration efforts, the explicit fruits of which are simply saplings which may or may not capture the credits agreed upon over the contractual timeframe for which the owners are being billed. The evolution of this industry will be interesting to watch, especially as/if/when the US follows the EU’s lead with cap-and-trade. 

Lights Go Out for Carbon Credit Scheme [The West, Australia]
When it’s Too Hard Being Green [The Age, Australia]
Australia’s The Age is claiming that the recent collapse in the price of carbon credits in Australia (now $6 after a fall from $12) has forced Easy Being Green out of business. The company’s website makes no mention of the insolvency, but simply notes that their good Samaritan efforts –installing energy efficient light globes and showerheads at no cost to homeowners–have been placed on indefinite hold, and that they plan to lay-off 240 employees (a sum that represents about a quarter of Australia’s carbon market labour force). According to Easy Being Green, “the carbon industry looks almost certain to go under” as long as “finger pointing…between the State and Federal Governments” prevents a bailout (which ranges from establishing lower thresholds for emissions limits to ceasing to make comments alluding to the fact that they may scrap the entire cap-and-trade program altogether).  

Other links:
Freight and carbon credits help hedge funds [FT]

Children are smarter than you think, especially those in post-communist Russia


In the spirit of running experiments that explore the evolution of capitalist systems on children [Why We Banned Legos, 2006], consider a Russian version:

Nikolaevena had run the Krupskaya Camp since 1969… Despite her obvious misgivings about the new order, Nikolaevna was an indoctrinator by profession and said it was now her duty to prepare children for the coming times. ‘We have to teach the young what a free-market system is’…In this remote region, they recreated the prevailing market conditions of any big Western city…‘Just like in New York. If you didn’t work, you didn’t eat.’  

For five days, the camp’s Red Square parade ground was transformed into a capitalist labor exchange where the 413 campers bid on work assignments. The children were paid in the camp’s own currency [ecus], redeemable at the cafeteria, confectionery, and entertainment center. Nikolaevna played mayor while Anrei put his economics training to use as head of the central bank. The remainder of the staff and counselors ran the labor shop. The oldest campers were appointed police officers…

On the second day of the exercise, Andrei noticed that there was more money in circulation than had originally been printed. After some inquiry, he discovered that a few of the kids had taken it upon themselves to set up their own little printing press and crank out ecus to satisfy their sweet tooth. The camp police were dispatched to apprehend the culprits, but the kids bought off the lawmen with a case of chocolate bars and continued to operate with impunity. Some other policemen, lured by the promise of Pepsi and chewing gum, threw in their lot with the counterfeits. This prepubescent mafia began to bully other campers and exacted payments for such offenses as profanity –either fifty ecus or two waffles.

Taking one counselor’s words (‘there is no higher law than money’) to heart, a group of overly enthusiastic kid-capitalists stormed Andrei’s office (the central bank), and in the ensuing melee made off with the labor exchange’s payroll. Andrei was forced to print extra money, which caused the campers to increase the price of chocolates and services. Just as in the real post-Soviet world, hyperinflation was born…

On the third day of the Economic Game, the Krupskaya camp suffered a spectacular bankruptcy. A would be Donald Trump had bought the rights to the dormitory and demanded rent from all the campers. Unfortunately, the kids started sneaking in through the back window to sleep, and the budding landlord ended up owing more ecus to the labor exchange for rental rights than he was receiving from the campers. He abandoned his property deal and joined the police-force-cum-mafia.

By the afternoon of the fourth day, chaos reigned. Zhanna Nikolaevna, in her role as mayor, called a general meeting to resore order. When she proposed firing the corrupt police force and replacing it with a newly formed ‘national guard’ composed of camp counselors, the police staged a coup d’état and threatened to hold her for ransom. The coup d’état proved to be the coup de grace. The game was called off…

‘If this is how people act in capitalism,’ [Zhanna Nikolaevna] said softly, ‘then I fear for the future of Russia.’

Casino Moscow, Matthew Brzezinski