I just looked up moral hazard in the dictionary...

and it said "See Freddie Mac":

http://www.propublica.org/article/freddy-mac-mortgage-eisinger-arnold

I'm sure a lot of the folks doing these Freddie Mac deals are the same geniuses that traded CDOs 5 years ago. And I'm not using genius ironically here, they are actually very smart people who know how to take advantage of the system. The problem is (and has been for the past decade) that legal and moral aren't necessarily the same. Traders at Freddie Mac stand to gain billions if homeowners who are stuck in high interest rate mortgages are unable to refinance their mortgages. If a hedge fund made this trade I'd have no problem with it - its a perfectly legal transaction and helps the market price mortgage securities. My problem is that Freddie Mac determines whether these borrowers qualify to refinance or not. That completely messes up the incentives, this trade lets Freddie Mac profit by excessively tightening its refinancing standards. If that weren't bad enough Freddie Mac is now owned by taxpayers. Think about this for a second, our own government is giving Freddie Mac about $2 billion per month so that they can force thousands of homeowners to pay above market rates and collect bonuses. I'm less offended by the people doing this than the legal system that allows this to happen.

Antitrust laws that kill

Only an economist could make this argument:

http://econlog.econlib.org/archives/2012/01/antitrust_kills.html

Of course Bryan's ignoring the fact that the money didn't just disappear, I'm sure a good portion of it found other ways to save lives - perhaps even more effectively than Gates' $5000 per life.

Which presidential candidate is right for you?

This quiz asks a series of questions about your political views and matches them with the remaining presidential candidates. Maybe this type of thing should be mandatory before voting?

http://www.usatoday.com/news/politics/candidate-match-game?

I was a bit surprised by my results:

1. Newt Gingrich
2. Mitt Romney
3. Ron Paul

Thankfully I only agree with Newt on 56% of the issues - the whole constitutional ban on gay marriage isn't exactly something I can get behind.

Senator Mark Kirk suffers a stroke

Scary stuff, he's only 52 and according to this article in excellent health.

http://libertyville.suntimes.com/news/10185178-418/sen-mark-kirk-has-surgery-after-a-stroke.html

I wish him a speedy recovery.

I've written to Senator Kirk more than any other person in government. Over the past few months I've even written to praise his votes on certain issues - specifically against SOPA/PIPA, against the payroll tax cut, against the defense authorization act.

Starbucks will start selling beer and wine

The article names Chicago as one of the cities where Starbucks will start selling beer, wine and cheese platters at select locations to lure evening customers. I'm so there.

http://www.businessweek.com/news/2012-01-23/starbucks-to-add-alcohol-at-more-cafes-to-lure-evening-customers.html

My 11 favorite songs of 2011

1. Rolling in the Deep ~ Adele
2. Till The World Ends ~ Britney Spears
3. Pumped Up Kicks ~ Foster the People
4. These Days ~ Foo Fighters
5. Midnight City ~ M83
6. Don't Carry It All ~ Decemberists
7. Niggas in Paris ~ Jay-Z & Kanye
8. Need You Now ~ Cut Copy
9. Get Some ~ Lykke Li
10. Its Real ~ Real Estate
11. Turn Me On ~ David Guetta

Beauty / Most runway models qualify as anorexic

Note: Most links here are NSFW.

Friend of mine posted this link of Facebook (thanks Chris):

http://www.pajiba.com/trade_news/sidebyside-comparison-of-averagesized-woman-with-a-supermodel-will-blow-out-your-mindhole.php

And it got me thinking, in the Middle Ages / Renaissance model thin women were not considered the most beautiful. See Rembrandt's most famous nude painting:

http://en.wikipedia.org/wiki/Bathsheba_at_Her_Bath

But that was probably because the majority of people during that era were malnourished peasants who were dangerously thin. Now we have a society with the opposite problem where food is plentiful and the majority of people are probably over-nourished and the super-thin runway models are considered most beautiful. Does that mean beauty just defined as what most people are not? Like the trend in Japan now for women to have crooked teeth.

http://www.nytimes.com/2011/10/23/fashion/in-japan-a-trend-to-make-straight-teeth-crooked-noticed.html

Throughout history certain features are almost universally considered beautiful - i.e. certain face shapes / symmetries. But some aspects of beauty do seem to change over time. So I wonder how much of our conception of beauty is driven by society and how much by human nature?

War and Piece

Two weeks ago I saw the end of a fight outside of Piece in Wicker Park. As far as I could tell the fight was about nothing, it wasn't because of an insult, a girl or a robbery - just three drunk guys who decide its time to throw punches. One guy ends up knocked out in the middle of the street, a second guy gets knocked out lands face first into the pavement and the third guy runs for it. They bring ambulances, at least 5 cop cars and get statements from a few people who were outside smoking when this all happened. It was hard to tell whether these guys couldn't get up because of the fight or because they were drunk - either way it has certainly reinforced my month of not drinking.

The whole incident is still bugging me. Its one aspect of human nature that I've never really understood - this random desire for destruction. I wonder how many wars have been started this way - a few guys get bored and decide to make trouble? I understand the desire to fight for something but just for the sake of fighting? Maybe I just need to watch Fight Club again.

1% Majors

Interesting data on which majors are most correlated with being the 1% - or equivalently having at least $350k annual household income:

http://economix.blogs.nytimes.com/2012/01/18/what-the-top-1-of-earners-majored-in/?ref=business

Lots of usual suspects on the list - majors that are often chosen by lawyers, doctors and bankers. But art history makes the top 10 with 5.9% and philosophy / religious studies is in the top 20 with 4.3%.

Revolving Door

I shouldn't be surprised by public servants who aren't serving the public interest. But I just hoped that a man's price would be higher. Chris "I will never be a lobbyist" Dodd is now chairman and CEO of the MPAA, earning $1.2 million per year and a key supporter of SOPA. Chris "I'm a devout supporter of freedom" Dodd has argued that we should use the Chinese as a model for how intellectual property can be guarded on the internet. Last I checked I thought Chinese IP theft was part of the problem?

http://www.salon.com/2012/01/18/chris_dodds_paid_sopa_crusading/singleton/

Writing to Congress

For a long time I rarely voted and I certainly never wrote to my Congressmen. I figured, what's the point? Each member of Congress serves so many people that my individual opinion surely won't matter. But a couple of years ago I realized that's a really stupid opinion. Looking around the world today and back through history we are so lucky to live in a (reasonably) functional democracy. But if we take it for granted we will lose it. Perhaps not to communists and tyrants but to greedy corporations or war-mongering politicians. There are plenty of people who stand to gain a lot by encroaching on democracy. Now I see the only way to overcome their lobbyists and super-PACs is to be part of an engaged electorate. They may have the money but we're the ones who vote for our leaders and we're the ones who can vote them out. So in the meantime we need to remind our elected officials that they serve their constituents not their campaign donors.

[Shameless plug] I just wrote to my Congressmen to vote against SOPA, I encourage you to do the same.

https://wfc2.wiredforchange.com/o/9042/p/dia/action/public/?action_KEY=8173

Dangerous time to be an Iranian nuclear scientist

3 Iranian nuclear scientists have already been killed by car bombs and a fourth narrowly escaped assassination. The question is - who's killing them? The US or Israel? A nuclear Iran massively shifts the balance of power in the Middle East and makes it harder for us to accomplish whatever happens to be our interventionist goal du jour. That said if we don't police the world who will? China? As much skepticism as I have about the success of our past interventions I'd rather live in a world where we're bossing people around instead of China.

http://articles.cnn.com/2012-01-11/middleeast/world_meast_iran-who-kills-scientists_1_iranian-nuclear-scientists-iranian-regime-natanz?_s=PM:MIDDLEEAST

I found one of the best explanations of Iran and its goals in this podcast:

http://www.econtalk.org/archives/2008/08/bueno_de_mesqui_1.html

Liberals vs. Conservatives

The debate between the two groups seems to have been going on since... well since debates have existed. Article in HuffPo discusses some interesting research into the psychological basis for the divide. Its titled "Why Republicans Deny Science: The Quest for a Scientific Explanation." Of course if conservatives just deny the validity of this research it won't do them much good.

http://www.huffingtonpost.com/chris-mooney/why-republicans-deny-scie_b_1196823.html

The value of teachers

Interesting op-ed in the NYT yesterday about how valuable a good fourth grade teacher is:

http://www.nytimes.com/2012/01/12/opinion/kristof-the-value-of-teachers.html

I find it interesting how teacher's unions argue that its parents have a far greater influence on students outcomes than teachers. They're essentially arguing that their profession isn't important? Who does that?

How To Live

Just started reading this book, How to Live Or A Life of Montaigne. The concept of the book is interesting, it describes Montaigne's writings and philosophy using examples from his life. After the first two chapters, titled Don't worry about death and Pay attention, I'm very excited to read the rest - I just wanted to take a few moments to reflect on what I've read. Montaigne started writing to reflect on ancient philosophy but also everyday life around him. In the process learned a lot about himself and life in general. One line that really struck me "Learning to die was learning to let go; learning to live was learning to hang on." I figure people have been living for millennia, someone must have figured out how to do it right.

The remaining chapters are titled:

Be born
Read a lot, forgot most of what you read
Survive love and loss
Use little tricks
Question everything
Keep a private room behind the shop
Be convivial: live with others
Wake from the sleep of habit
Live temperately
Guard your humanity
Do something no one has done before
See the world
Do a good job, but not too good a job
Philosophize only by accident
Reflect on everything; regret nothing
Give up control
Be ordinary and imperfect
Let life be its own answer

Party animal in a wheelchair

Fascinating stuff about Stephen Hawking that I didn't know before. Apparently his disease only affects "voluntary muscles." Dude's had 3 kids, well done Hawking.

http://cosmiclog.msnbc.msn.com/_news/2012/01/05/9981931-what-mystifies-dr-hawking-women

Matt Taibbi

I can't decide whether this guy just wants attention or whether he actually believes the stuff he writes. At one point he described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." But in his blog this week he makes a good point, when Goldman tells you to buy, more often than not you should sell.

http://www.rollingstone.com/politics/blogs/taibblog/goldmans-latest-boiler-room-stock-america-20120102

SOPA

The Stop Online Piracy Act has a lot of people up in arms. This bill will allow courts to issue injunctions against companies whose websites could potentially be used to facilitate piracy (regardless of what anti-piracy measures they're taking.) That includes many companies like Google, Amazon, Facebook and Paypal. If the bill passes these companies will almost immediately be forced to shut down by court order. In fact the situation is so dire that these companies are planning to shut down their websites for a day:

http://www.extremetech.com/computing/111543-google-amazon-facebook-and-twitter-considering-nuclear-option-to-protest-sopa

And if anyone needs more reason to oppose this bill, the biggest supporters are the RIAA and the MPAA. I think that says it all.

http://en.wikipedia.org/wiki/Stop_Online_Piracy_Act

Happy New Year

Should old acquaintance be forgot,
and never brought to mind?
Should old acquaintance be forgot,
and auld lang syne?

For auld lang syne, my dear,
for auld lang syne,
we'll take a cup of kindness yet,
for auld lang syne.

~Robert Burns