Monthly Archives: July 2007

Put another Aussie on the barbie, Bruce

Our 5 regular readers know this site irrationally hates white Australians  because they are all racists without exception. We had 6 readers before I, Baruch, published the post behind the link; erstwhile reader Proudly Arsetralian (that’s how they talk) took exception to our bigotry about his fellow-countryuntermenschen, and childishly (it’s just like them to act in this way) threatened to tear up his subscription or something.

Imagine my surprise at seeing this fascinating survey of levels of bigotry in western countries, in a sister site next to our friend Felix’s wildly successful econoblog. Australians, it turns out, are a lot less racist than almost everyone else; I note though that no-one asked them about Jews and Muslims (I bet because they hate Jews and Muslims), and they do seem to dislike gays more than most. I was troubled, if not surprised, to see that Greece comes off rather badly but I was surprised by Italy’s high levels of bigotry. Spain’s antisemitism is a very interesting phenomenon; an echo of the Inquisition that hounded Spinoza’s ancestors? Luckily for everyone we have the Northern Irish, who are reliably awful. Unluckily for them, northern Ireland is not in fact a country.

Suicide bombings not such a great idea after all

Baruch, Great news: The Pew Global Attitudes Project finds that

Of the 16 majority Muslim countries included in the survey, 15 have shown waning enthusiasm for terrorism in general and suicide terrorism in particular, it says.

The most striking declines are in Lebanon, where in 2007 34 per cent of people say suicide bombings are justified compared with 74 per cent in 2002. There has been a similar decline in Pakistan from 33 per cent to 9 per cent and in Jordan from 43 to 23 per cent. Only among Palestinians, where 70 per cent say suicide attacks are sometimes or often justified, do a majority continue to support it.

I still don’t understand why suicide attacks should engender stronger condemnation than plain vanilla non-suicidal terrorism. Doesn’t the former have the advantage of at least one less player on the other team? Or is that just the case from my perspective?

Oh DO let’s be beastly to the Germans

Cor Blimey, Bento, Leo Strauss is doing my head in. I made the mistake this weekend of starting his Spinoza’s Critique of Religion by reading the preface. What on earth do you think THIS means?

Every assertion about the absolute experience (of God) which says more than that what is experienced is the Presence or the Call, is not the experiencer, is not flesh and blood, is the wholly other, is death or nothingness, is an “image” or interpretation; that any one interpretation is the simply true interpretation is not known but “merely believed”. One cannot establish that any particular interpretation of the absolute experience is the most adequate interpretation on the ground that it alone agrees with all other experiences, for instance with the experienced mystery of the Jewish fate, for the Jewish fate is a mystery only on the basis of a particular interpretation of the absolute experience, or rather the Jewish fate is the outcome of one particular interpretation of the absolute experience.

I could go on. It just destroys thought. Also I have no idea when he is telling us stuff he thinks himself, or stuff others think, or stuff he thinks others think. There is no discernible Leo Strauss to be found in the preface, as far as I can see, just this absolute drivel of the sort above. Needless to say I don’t imagine I will finish the actual book even after hell has frozen over.

So I have been reading about Strauss, rather than reading Strauss; it is much easier, some of the words used even make sense. Turns out he rather likes Spinoza, only sort of though. Some people think he is a friend to liberal democracy, some think not. I’m not sure even his supporters know what the hell he’s on about. For another sort of mind-fuck check this out at Balkinization and go through the comments if you have a spare afternoon and unused mental capacity (I don’t). A vaguely amusing satire of Straussian argument can be found here.

Turns out many people think he actually meant to write like this; he favoured an “esoteric” style, according to his supporters, precisely so the unwashed would not be able to understand. My own experience is that thoughts which cannot be adequately expressed in a few simple phrases tend to be worthless. Strauss’ problem is that he is a German. He is precisely what Allan Bloom worries about in Closing of the American Mind when he writes of the disastrous influx of Jewish and refugee German writers and thinkers in the US in the 1930s and after, who more or less took over University life, crowding out the native empiricist (Spinozist) tradition that had hitherto prevailed, bringing with them their more classical, atavistic, irrational yet more regimented, revelatory types of thought, making their own tawdry concerns and cat fights the stuff of informed campus debate. One strand of the German school, it needs not be said but let’s say it anyway, also led inexorably to fellow-travelling with the NSDAP. Let’s face it; from Leibniz onward, the Germans have got philosophy frighteningly wrong. Their only saving grace was the ability to write such impressively turgid prose that even intelligent people have thought there must be something there, if only they could understand what it is.

Contrast this with our own dear philosopher, whose introduction to the Theological-Political Treatise is a model of pure prose clarity, and could have been written yesterday, it seems so fresh and relevant. “Strauss”, meanwhile, is also the word for “ostrich” in German.

The Book Fairy cometh!

Today in the post I got all at the same time:

  • The Threat to Reason, by Dan Hind. No idea whether this is going to be any good.
  • Spinoza’s Critique of Religion, by Leo Strauss
  • Theological-Political Treatise, by you-know-who, the “Cambridge Texts in the History of Philosophy” edition.

 Hee hee hee, I am going to read them all by the Thünersee this weekend, and you, Bento, will be left behind in my philosophical dust!

Did you know that every day, 150,000 people die?

OMG, Baruch — yes, weird evangelic preachers are a dime a dozen, but some are so much more entertaining than others. Via this interview with an ex-80s sitcom start I was led to The Way of the Master, which you really need to sit back and relax and enjoy — it’s aimed at people like us! Can I recommend their segment on evolution and atheism (option 2)?

(BTW, Mac users will have to go to Hell as these videos won’t run on that operating system.)

Questions for Taleb

Forget Empirica, say hello to Universa! Felix alerts me to this interesting little gemlet. Taleb, whose thoughts have provided a deal of material for this site, is back trading, or well, sort of not actually, with a new fund. Is it me, or do Taleb’s fund launches seem to coincide with his books? Another interesting take on the story here, from what seems like a (possibly ex-?) fund selector’s view.

The WSJ article spends some time discussing the main activity of Empirica, which was buying long dated out of the money options which should, if you know the arguments of the books, be mispriced. Not much new there. What caught my eye here was rather this:

 To generate short-term returns during times of low volatility, he also sells options very close to the current price of a security. Such options are pricier, since the odds that they will be cashed in are greater. They also can be risky for the seller during times of moderate volatility, when the underlying shares are more likely to punch through the strike price.

Uh?! What the fuck?! Did I completely misunderstand the whole book? Taleb endorses the writing of options at times of “low volatility”? How does this allow us to benefit from a Black Swan? How does this differentiate from a Niederhoffer-like approach? How in the world between Mediocristan and Extremistan can we have any idea whether we are in a time of low volatility or not? Is it the combination of writing close to the money options and buying well-out of the money ones that produces a secret sauce? Clearly, he is trying to make money out of the standard “low volatility” world we are supposed to live in  — according to everyone else, but if he hits a black swan, I would have thought his unlimited losses on one of these sold options wipe out any money he makes on the long dated ones he owns. I think this is what Mahalanobis in the link above is going on about when he talks about gamma and vega positioning. Wouldn’t it have been good to introduce this er, minor wrinkle into the book itself? I feel a bit like I have been taken for a ride. It’s sort of like a committed communist finding out Karl Marx owned a sweatshop. This is a complete non-sequitur for me.

Buttonwood regresses

Buttonwood (in a now regular, weekly fisking feature on Ultimi Barbarorum) gets it mildly wrong again, 3 times in the same article! It is as ever his choice of sources which let him down. First he quotes Dresdner Bank’s perma bearish (and like all perma-bear-losers they can turn a pretty phrase) strategists who say analysts have problems forecasting the future. Thanks for that breaking news. Then he quotes a portfolio manager who says stocks move on newsflow in exaggerated increments and you can make money on the reaction, ie betting against the first move. Actually, in my experience, you can if only you sell real quick once you have made a small profit; one of technical analysis’ staples (I hate technical analysis by the way) is that on a big intraday move there tends to be a retrenchment ahead of an equally likely massive multi-day continuation in the next sessions. Another less well-known reason for big stock moves on small bits of info is the magic of compounding: a small hit to this year’s earnings actually compounds through base effects through each of the out-years in a Discounted Cash Flow (I love DCFs) model. Wiping 5% off 07 EPS can mean taking a hit on 10-20% off your terminal value. If you can remember your corporate finance classes you may understand what that means, especially for growth stocks. A bit abstruse, perhaps. But trust me, I am right.

Lastly, he seems amazed that historical beta is completely useless as a measure predicting stock returns: of course it is useless, it is a) historical (past performance is no guarantee of future returns) and b) is based the fallacious concepts of standard deviation and regression. The inescapable conclusion is that large parts of the capital asset pricing model may be wrong. This would be news, you would have thought, and could even have started a useful discussion; but your correspondent has other fish to fry.

Indeed, Buttonwood seems to think that the lack of impact subprime has had so far on the market is not because of the small sums involved nor the irrelevance of the issue in the face of larger forced such as huge liquidity, lower stock supply and rising earnings. No, it is because of “information overload”. Apparently Buttonwood thinks they were too distracted to do the right thing in the face of a subprime “crisis”. Investors should have freaked out, you see. Buttonwood and all his smart, bearish sources were fact right, and still will be, it is the market which doesn’t understand. It’s enough, ha ha, to almost make you think maybe it’s possible to make money in stocks! So Buttonwood perorates, bitterly, with the plaintive cry of the mystified ivnestment amateur who just got his butt kicked; it’s all too darned hard.

 All this confirms what most investors who lived through the dotcom bubble must feel: investors are not always rational and markets are not always efficient. But, judging by the subprime saga, spotting those irrational moments is no easier than it ever was.

Thanks.

Is competition good for God?

Baruch, something you must read: A big piece in the Wall Street Journal today documents a purported recent rise in Christian religiosity in Europe, and explores a “controversial” explanation: That Europe has long been subject to state monopolies for religion, and that this has made official churches lazy. Now that these monopolies have been dismantled, more charismatic religious movements are gaining ground, goes the theory, and these are more appealing to people, ergo overal religiosity is on the rise.

But what constitutes a state monopoly on religion? Certainly not a legal proscription against other forms of worship — Spinoza himself is early and fine proof of the European tradition of toleration. (Russia and the Orthodox Church, on the other hand, collaborate to legally deter proselytizing, so you could argue that religion indeed does enjoy a form of state monopoly in Russia.)

Instead, by “monopoly” what we really have had in Europe is preferential treatment for a national religious champion via two economic mechanisms: State subsidies, which amount to protectionism against competition by allowing the production of cheaper but lower-quality God products, and the state-sponsored default option for such things as marriage and burial, much in the same way you will likely use Internet Explorer if you use Windows.

The real question, in my mind, is whether the dismantling of subsidies and the removal of the default option for life’s big rituals is just leading to a diminution of the market share for ex-state religions, or to an expansion of the overall market. I can certainly see the reasonableness for a redistribution of religious affiliation among existing credulists, but is it also sufficient to support the claim that overall Christian religiosity is on the rise in Europe?

First off, I’m not sure if the decline of religious belief in Europe has been reversed. But let us assume for the sake of argument that it has.

In classical economic models, if you can make the supply of a good better and cheaper, then even against a static demand curve overall consumption will increase. Is that what is going on here? Can we assume that the demand curve slopes downward to the right when it comes to religion? I.e., if the God product comes to provide better salvation for the money invested (or prayer time, as time = money), will more people buy into it, even if they were previously never in the market for God?

Perhaps they will. The article posits that the rise of religiosity is seen mainly among the young, and it is clear that the minds of children are particularly susceptible to advertising campaigns. In a sense, everyone is potentially in the market for God when they are forming their world view. Those who emerge from this phase as secularists are in the main safe from a late bout of religion, so for older age cohorts the size of the God market is relatively fixed, with competing religions fighting over a fixed-size pie, while in younger age cohorts the size of the pie has not yet been determined.

In other words, these new religious revivalists see as their main competitor not other religious strains but a lack of belief in general. They are not targeting those for whom the default option was sufficient, but those who aren’t enthused by the default option and who previously would have become apatheists.

One wholly ironic aspect to this debate is that the truth or otherwise about the existence of God does not even figure in it. God’s success in Europe (and by implication in the US) all comes down to better marketing, according to God’s own boosters. Perhaps that’s because priests and pastors are really just glorified marketers, and like all marketers they like to pat themselves on the back for their superior marketing skills — though to be fair, believing in your product and using it yourself is bound to make you a better marketer.

Michael Jackson is their lovechild

Bento, this is seriously whacked out.

A Boy called Hell

This made me laugh at first, then made me unaccountably depressed. A 5-year old boy, Max, bullied at his present school in Australia, is denied admission to an Catholic school due to his surname — Hell. Anyone with a smattering of German would find it a perfectly good name.

I don’t know which I despise more. The doctrinaire religious, or Australians. I dislike Australians a lot. They are the only people I am racist about — not the aboriginals, clearly, the white ones. I decided this after having discovered through conversations with many of them that Australians are the most ignorant and racist people in the world, so I thought I would let them know in my own small way how that feels. My anti-Australianism is in fact the only racism I know of based in fact and grounded on good science; of course, they are selected from the criminal rejects of the UK’s own gene pool, sent abroad, deselected, if you will, for their various failings. I fel sure that Spinoza, had he met any Australians, would have agreed.

SO my question for you, Bento: did the school authorities act so inhumanely and ignorantly because they were religious or because they were Australian?