DUI & Effective laws

ThinkProgress has kind of a strange post today about alcohol related automotive fatalities.  It includes some speculation on possible legal changes to reduce those numbers.

Researchers found that just three percent of death certificates for traffic fatalities between 1999 and 2009 listed alcohol as a contributing factor. However, according to data from the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System, 21 percent of people killed in car crashes over that same period were legally drunk — seven times as much as what gets reported on death certificates.

Wait, what?  If a passenger is killed, and is legally drunk, are they saying that the accident should count as alcohol related?  Shouldn’t it only be alcohol related if the driver (of any vehicle involved) has a detectable amount of alcohol in his/her system?

Then they add this:

the National Transportation Safety Board is recommending lowering the legal blood alcohol limit from .08 to .05.

Well then, isn’t that really a case of doing something without any data?  The next quote from the NTSB guy seems to pretty much sum it up:

“We need to have a handle on what’s contributing to the leading cause of death among young people,” Hingson said. “You want to know how big the problem is, and if we can track it. Is it going up, or going down? And what policy measures are working?”

If you don’t know what policy measures are working, then why would you just randomly change them?  This reduction is nowhere on MADD’s list of priorities:

• Support our heroes. Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start. Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future. Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk

The NTSB also made other recommendations along with .05 BAC, and the other recommendations are more common sense:

…the safety board also championed laws allowing police to confiscate a motorist’s license at the time of arrest if the driver exceeds a BAC limit, or refuses to take the BAC test.

Some 40 states already use the administrative tool, which the NTSB believes is effective because it is swift and immediate.

And the board recommended more widespread use of passive alcohol sensors, which police can use to “sniff” the air during a traffic stop to determine the presence of alcohol.

The sensor is capable of detecting alcohol even in cases where the driver has attempted to disguise his breathe with gum or mints. If the sensor alerts, it is grounds for more thorough testing.

The NTSB recommended last December that states require ignition interlocks for all DUI offenders and said states should improve interlock compliance.

They then conflated the .05 argument with these facts:

For some, the vote struck close to home.

NTSB board member Robert Sumwalt noted that one of his relatives had been killed by a drunk driver and another is serving a 15-year sentence in a related death.

Many of the recommendations “are going to be unpopular,” Sumwalt said. “But if we keep doing what we’re doing, we’re not going to make any difference.”

I’m sorry for his loss.  But if the relative was killed by a drunk driver, and another is in jail, then they were above .08, by definition.  I’m not sure changing the legal limit would have made a difference.

And the NTSB cites this event in every press conference about DUI:

On May 14, 1988, a drunk driver drove his pickup the wrong way on Interstate 71 near Carrollton, Kentucky. The truck hit a school bus, killing 24 children and three adults. More than 30 others were hurt.

According to Wikipedia, the driver in that accident had a BAC of .24, and he had previously been arrested for DUI.  The other provisions listed above would have prevented that accident if in effect at that time.

DUIs ruin lives, too, by limiting the future prospects of the driver. (In fact, DUI laws kill people, but that’s another story.)  .05 is very low.  It’s one drink for a normal sized woman.  Is it worth limiting a person’s future to save a life?  Sure, of course.  Is it worth limiting 10 people’s futures to save a life?  How many?  I would just like to see real data on .05 vs. .08 BAC of the drivers involved in fatal accidents.  I hope that they are able to improve the data on alcohol levels and fatal accidents, which was really the point of the study cited in the first article.

We will probably have self driving cars before we get enough good data, though.  Which might eliminate the issue entirely.

• Support our heroes.  Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start.  Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future.  Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk.

– See more at: http://www.madd.org/drunk-driving/campaign/?print=t#sthash.GQK5e6xu.dpuf

• Support our heroes.  Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start.  Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future.  Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk.

– See more at: http://www.madd.org/drunk-driving/campaign/?print=t#sthash.GQK5e6xu.dpuf

• Support our heroes.  Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start.  Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future.  Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk.

– See more at: http://www.madd.org/drunk-driving/campaign/?print=t#sthash.GQK5e6xu.dpuf

• Support our heroes.  Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start.  Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future.  Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk.

– See more at: http://www.madd.org/drunk-driving/campaign/#sthash.LPDkvV2x.dpuf

• Support our heroes.  Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start.  Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future.  Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk.

– See more at: http://www.madd.org/drunk-driving/campaign/#sthash.LPDkvV2x.dpuf

• Support our heroes.  Support high-visibility law enforcement to catch drunk drivers and discourage others from driving drunk.
• Sober to start.  Require ignition interlock devices, or in-car breathalyzers, for all drunk drivers, to prove they are sober before their car will start.
• Secure the future.  Support the development of technology to determine automatically whether or not the driver is above the legal limit of .08 and failing to operate if the driver is drunk.

– See more at: http://www.madd.org/drunk-driving/campaign/#sthash.LPDkvV2x.dpuf

Avoiding Drama

There is a difference between problems and drama.  Problems exist in the real world.  You can see them or otherwise determine whether or not they exist.  Problems have a resolution.  People may or may not be able to choose or affect the resolution, but a resolution WILL occur.   Examples:  Cancer.  Foreclosure.  Dog poop on the floor.

Drama exists in people’s minds and/or emotions.  They may consist of old resentments or memories, and they may be made new each day by something newly perceived in the mind and/or emotions.  Drama may not have any resolution.   Examples:  “You don’t like her.”  “He rejected every nice thing she ever did.”   “I can’t stand to live in this place.”

What is drama, really?  Is it hate?  Fear?  Insecurity?  Miniature war?  It certainly seems evil, in the sense that it serves no positive purpose and harms everyone in its path.  Every writing I have seen on the opposites of drama (and happiness and peace) seem to focus on purposefully ridding your mind of all drama-like thoughts, and replacing them with other thoughts.

Here’s a nice FB post on the topic.  I don’t think the mother/child thing will work for me.  Maybe another substitute pretend relationship would work better.

James Altucher

10 WAYS YOU CAN BE MORE LIKE THE DALAI LAMA

A friend of mine is friends with the Dalai Lama. My first thought while she was telling me this in the “Peace World Cafe” is this: I am two degrees of separation from the Dalai Lama.

Then she said what she felt was special about the Dalai Lama. “When you are with him, you feel that he loves you the the way a mother would love a newborn baby.”

My mother dropped me when I was a newborn but I’m sure it was an accident.

But I thought about what Patty told me. I try to do it. When I meet people I try to imagine that I am their mother (very difficult) and that I care for them the way a loving mother would care for them.

And then I usually hate them again. But I keep trying to get back to mother. Mother / Hate. Mother / Hate.

The Dalai Lama also supposedly does not use the word “I” a lot.

I use the word “I” a lot, perhaps demonstrating a lack of compassion. All of my blogs are about “I”. I screwed up badly, I lost my family, I lost all my money, my home, my jobs, my my I I me me…

Often when I wrote a story about myself that I think is really good it gets much less clicks and shares than when I write “10 Things…”, etc .

Nothing wrong with that. The reality is that everyone, including me, is motivated by self-interest.

But who is smart enough to improve others? It takes years of effort for me to even improve myself. And often I slip. I might get angry. Or scared. Or stop exercising for awhile.

Many times I can use the techniques I describe in my blog (“the daily practice”) to quickly recover. But sometimes it takes longer.

It’s unavoidable to slip. It’s what being human is about.

So I’m going to do a list.

10 Ways to Be Like the Dalai Lama

A) IMAGINE EVERYONE YOU MEET IS YOUR CHILD and you want the best for them in life, even if they are crying and screaming and being annoying.

It’s ok if it doesn’t work. You can’t be everyone’s mother. But I have found that I see people a little differently when I use this technique and it works.

I always remind myself, “it’s just practice”.

B) TRY TO LEARN ONE THING.

Sergey Brin, co-founder of Google, does this technique when interviewing someone for a job. If he knows he’s not going to hire them he tries to find one thing he can learn from them so “this way the meeting is not a total waste of my time”.

C) GET THE STORY.

Everyone has a story locked inside of them. Be a detective. Get the story. This helps to focus so you can do “B” above.

People ask me, “how can I find a mentor”. Your mentor is everyone around you. Without a single exception. Find out what each person is meant to mentor you about. Even your children.

D) The ONE Technique YOU NEED TO KNOW to Listen. (see, I used “You”).

When someone is finished speaking, wait two seconds before “taking your turn”.

Most people jump right in, or even interrupt. But sometimes people talk, then gather their thoughts, and have more to say.

Once they gather their thoughts, the next thing they say might be the gem you were waiting for. So give the courtesy of two seconds. Wait.

E) WHEN YOU’RE ANGRY, BE QUIET.

When a cat is not feeling well, it often finds its little hiding place and then stays still and quiet until it’s feeling better.

Doing this, as opposed to reacting to the anger, might save you and all of your relationships a lot of grief. For me, this is very hard: anger is like smoking a massive dose of crack. It floods your body and comes out like a fire hose out of control.

Here’s one way I try to do this:

Anger is really a form of fear. You get angry at someone because you are afraid they are stealing, or rejecting you, or they’ve touched on some insecurity you have.

Like, if someone honks at me, I might get angry, but the reality is I’m such a bad driver I don’t even have a license (suspended) and I shouldn’t be in a car anyway.

So when I get angry, I ask first, “what am I afraid of”. If I’m angry at Claudia, for instance, it might be because I’m afraid (my insecure self comes out) that she doesn’t like me anymore.

This helps me to be quiet and think a bit rather than stupidly fuel flames. Or not think at all! Since over-thinking is what got me angry.

F) AVOID FEAR OF GOING BROKE.

I’ve been broke. Not once. Not twice. Not three times. But many times. I’ve lost two homes. Blah blah. I’ve written about all this before.

This will sound totally stupid and I’m almost embarrassed to say it.

But let’s say something bad happens with my finances now. Suddenly I get into that post-traumatic stress thing where the trauma of going broke floods back into me. “I’m GOING TO GO BROKE AGAIN!” I suddenly think even though it might be totally irrational.

Here’s what I do. I hit myself. I hit myself right in the chest and say “Abundance!” I don’t say it in a law of attraction sort of way. I think the Law of Attraction have cost people a lot more money than it has attracted.

But I do it to remind myself of two things:

– out of the past 1000 times I’ve predicted poverty for myself, it’s never really come true. Even my worst case scenarios (losing a home) turned out to be ok for me.

– saying “Abundance” reminds me to be grateful of things in my life. A lot of articles talk about the benefit of gratitude. I will add just one thing that most articles don’t mention.

Don’t be grateful for the same things each day.

Practice creativity with your gratitude. I’m grateful for the black hole at the center of the universe that created it and still left a tiny piece of itself deep inside of me, in all of the empty spaces. Thank you Black Hole.

Someone asked me, “do you put a number to it when you shout ‘Abundance’?”

And the answer: never. Because money is just a side effect of Abundance and not true Abundance. There are many side effects to Abundance.

G) USEFUL / NOT USEFUL

When someone writes a bad comment about me, on very rare occasions, I respond. Has anyone ever responded back – “you are totally right, I am sorry.” ?

Never.

In the history of the Universe. So my initial response back was almost never useful.

And yet, most of the day, we fill it up with not useful activity (news, bad TV, gossip magazines, negative chatter, etc).

We can’t help it. There are actually many evolutionary reasons that we are attracted to gossip, to scary situations, to bad story telling, to anger, to fear.

But evolution is over. This sounds like a stupid thing to say. But a mere 10,000 years ago we were running from lions. Now we aren’t. But nobody has told our DNA that yet.

So all day long we sit and stare at a computer screen and we go through a thousand iterations of fight-or-flight (and then the resulting adrenaline spikes) without even moving. And then…heart disease.

It’s like we are mugged all day long and we don’t move.

Some study has said that the average human thinks 50,000-60,000 thoughts a day. I don’t know how they measure this.

But let’s assume the 80/20 rule holds here. That means, 10,000 thoughts are actually useful and have a positive impact on your life and the other 40,000 thoughts are not useful. Practice noticing which thoughts are useful and which aren’t.

The Dalai Lama is an expert at meditation. But meditation is practice for Useful / Not Useful. He is probably very good at it. For instance, he has said that he forgives China for invading his homeland. Why does he do this? Shouldn’t he hate China with all his heart?

No, because that would not be useful. Useful is trying to find a common ground to have conversations with China so Tibet can start to have more open communications with the outside world.

H) BE STUPID

Someone the other day asked me how I invest. I don’t invest. I look for people smarter than me and see how they invest and sometimes I piggyback.

I said, “everytime I thought I was smart, I lost money.” When I predict things and they come true it’s usually because I was lucky.

I happen to think I am a very lucky person because I hang out with people who are smarter than me and kind enough to share their wisdom with me.

I don’t think I am the only one who is stupid. I think just about everyone is smart at one or two things, but thinks they are smart at 1000 things. This is why I don’t argue with people about politics. I might have my opinions. But I know when they argue with me, it’s just a waste of time. One of us, and I don’t know who, is incredibly stupid on the matter.

If I always take the view “You’re Right”, it saves me a lot of grief.

There’s a superhero in the “Legion of Substitute Heroes” called Kid Psycho. He can move things with his mind. But everytime he does so he loses a year of his life. This is why he is only a substitute hero. Only for emergencies.

I know the more tense or useless thoughts I think (“I’m SMART so I’m going to argue about this!”) the more I will age.

In fact, you can measure age not by years but by the number of useless thoughts you think. We only have so many in a lifetime, and then we die when we hit that number.

I figure I can add a good ten to twenty years of my life just by reminding myself that I am stupid most of the time.

I) DON’T CREATE PROBLEMS FOR YOURSELF

Pick the list of your top ten problems in life. Maybe you are overweight. Or addicted to drugs (or a person). Or afraid to ask for a raise.

It’s very very hard to solve a problem. To go on a diet. Or to get over an addiction. We don’t really know how to do it. “It’s our best thinking that got us here” goes the saying.

That means all of your thoughts that you have had from your birth until now has gotten you to this very point – the point where you have all these problems.

For me, that’s 46 years of thought. It’s too much to change. So today I look at what my little problems are. I list them and try to solve them. It’s a little easier that way. I get back to thinking useful/not useful. I assume I’m stupid.

It’s hard to solve the big problems because you think, “well, what’s one more donut? It won’t kill me!” And you are right. But one more donut will cause a little problem later when you think, “ugh, why’d I eat that donut”.

So I focus on the little problems that are easy to solve. The big problems will work themselves out.

J) DON’T TRY TO BE SOMEONE YOU AREN’T.

When I try the Dalai Lama technique my friend Patty mentioned, (Picturing everyone like a mother might picture a baby child) usually it’s too hard for me.

That’s ok. I tried. I’m not the Dalai Lama. Far from it. I’m not even Bill Clinton. I’m James (honorary Colonel of Kentucky) Altucher.

I’m trying to do my best.

Someone yesterday asked me how I want to be remembered 100 years from now. And I think she thought it flippant when I said I don’t want to be remembered.

Many people are remembered for the horror they caused future humans. I’m fine living today and enjoying it if I can.

I honestly hope 100 years from now I’m just gone from the dream/nightmare of living in this world.

Maybe I will be on another planet where I finally get born from the test tube they created me in.

 

Wildlife Management

It’s not that easy for humans to determine how to manage the living wild environment, including both plants and animals.  Lots of unintended consequences in every action.

This article describes a study that shows how deer populations interact with invasive species.  This post has a positive take on multiflora roses, but be sure to read the comments.  PA game commission has successfully reintroduced elk (starting in 1913), fishers (starting in 1994), and peregrine falcons (in the 70’s).  The fishers are just now starting to be prevalent near here.  They are nasty animals and I worry about my little dog.

Out west, we have the demise of the transplanted bighorn sheep (can’t you just imagine the mountain lions watching them being brought in and thinking “Snacks!  Thanks!”).  The success of the wolves in Yellowstone has led to a hunt, described here in most fatalistic terms.  Of course, introduction of the wolves has resulted in a change in the way the elk are killed – less from human hunting, more from wolf hunting (22 per wolf per year!!).  See this post.  And this.

Wages vs. Compensation

Pet peeve alert.  Today, via Mark Thoma:

The Most Important Economic Chart, by Atif Mian and Amir Sufi: If you must know only one fact about the U.S. economy, it should be this chart:

….

So where are all of the gains in productivity going? Two places: First,… the share of profits has risen faster than wages. Second, the highest paid workers are getting a bigger share of the wages that go to labor. …

The gains in productivity are going to those places.  But they are also going to pay for worker benefits, like healthcare.  And 401ks.  And Medicare and Social Security (including the employer share).  The data I got doesn’t go back quite as far, but you can see the productivity and income graphs have the same information as on the chart shown above.  The total compensation includes “Wages and salaries of employees plus employers’ contributions for social insurance and private benefit plans. Except for nonfinancial corporations, where there are no self-employed, data also include an estimate of wages, salaries, and supplemental payments for the self- employed,” per BLS.

I’m not saying this chart looks great.  I’m just saying that talking about wages alone is very misleading.

Update:  The above was published in March 2014.  John Mauldin has just published this chart from Doug Short, in August 2016:

To which I would update, although not exactly the same data:

Mauldin on Income Inequality

John Mauldin is has posted on inequality again, and this week’s is really a good one.  He answered the question I had about why is saving a bad thing.  IT’S NOT.

At any rate, he is dissecting a paper, “Inequality, the Great Recession, and Slow Recovery,” by Barry Z. Cynamon and Steven M. Fazzari.  It’s fortuitous that these guys managed to write a paper espousing all of these questionable ideas – how inequality causes bad economic outcomes, how consumer spending is the only thing that matters, saving is bad, etc.   Mr. Mauldin, as usual, writes an understandable and common sense critique.

Can’t wait for part 2 next week.

Thank you, Barry Ritholtz

Once again, big shout out to Barry Ritholtz.  He is one of very few voices heard and broadcast in the mainstream, who also is willing to keep hammering away at the wholesale purchase of the American government by corporate interests.

Today’s installment, a post by Washington Blog.  Not that I agree with everything in this article or all of its conclusions, and probably Mr. Ritholtz doesn’t either, but the main themes are what’s important here.

But I’m still wondering about inequality.  This article, like many about inequality, includes a lot of statements that I find distracting or not informative on the topic.  When you state that inequality is worse now than in 1774, even including slavery, I’m not sure what that means.  The original article cited, from the Atlantic, is also not so certain that this is a bad thing.  They counted food and shelter as wages for slaves, and apparently some slaves also received small wages.  I don’t know how they estimated work hours, but that average slave wage may have ended up calculating out to higher than the amounts people working part time or even full time minimum wage today might earn.  I don’t think that means that slaves were better off.  I think the real conclusion of less inequality in 1774 is just that everyone was awfully poor.  Especially compared to today.  That doesn’t mean that inequality today isn’t a problem.  Just that comparing to 1774 is not really relevant.

And the charts showing net worth by income distribution are also confusing to me.  I thought economists agreed that credit expansion among consumers is a good thing.  Lower net worth for lower income people might imply that there is more credit available at lower incomes than before.  More credit = more spending = economic growth, right?

At any rate, all of that aside, the parts about the government and corporate handouts, etc., are really worthwhile.

You guys keep up the good work!

Also related:

Many of the largest corporations pay little, no, or even NEGATIVE taxes.

Private equity business (that of Mitt Romney and the very, very low tax rate) now trying to get into the too big to jail club, like the big banks.  That is, feel free to commit felonies, small fines may be imposed.  No one will go to jail.

How to be an Index Investor, by Rick Ferri, or The Value of an Advisor

I’m very excited to read this as it is blog-published:  http://www.rickferri.com/blog/strategy/how-to-be-an-index-investor/

He has identified this as a 3 step process:  Philosophy, Strategy, and Discipline.  Hopefully he will also include a “check your assumptions” list of skills or habits required to even attempt this do-it-yourself investment approach.

All of our clients are on board with the Philosophy and have a strong commitment to the idea that although there may be ways to “beat” the market, the cost of these methods generally match or exceed the alpha generated.  Many of our clients understand and agree with the logic behind the Strategy we employ, and some even have the capacity to work through this themselves and develop similar portfolios.  However, I doubt that any of them have all of those skills and capabilities, along with the Discipline to do the saving, investing, rebalancing, and most of all, to stick with it through ups and downs.   I don’t mean to insult anyone.  I’m saying, I could not do it all by myself either.

The “check your assumptions” list of personal skills and traits would include:

• A lot of time and energy available to devote to this effort.
• Data analysis skills to understand the philosophy at its core, not just hear the argument and say, sure, sounds good.
• Analytical skills to determine what Strategy you want to follow.  There are many ways to set up an index portfolio.  What is “the market”?  What is the ideal stock/bond/alternative mix, and why?  Lots of conflicting research out there to dig through, and lots of due diligence, even on the research itself.  Then you have to pick the investment vehicles.  More analysis and due diligence.
• Discipline.  This really cannot be over emphasized.  It includes the Discipline to stick with the Strategy (no “tactical” adjustments!!), which is the hardest part, and also the Discipline to rebalance.  It includes the Discipline to budget and save per plan.  I think he is including the saving and rebalancing under Strategy, but to me Strategy is just a plan.  Discipline is what makes a plan happen.  There are a lot of Disciplines here, and the weight of them accumulates.

Our practice is built not only on the process Mr. Ferri has laid out here, but also on the knowledge that it is nearly impossible to carry out single-handedly.  We have always helped each other and our clients with all of these steps.

 

Stocks only go up.

Josh Brown has another good post today.  He explains that an additional factor in the stock market’s continued rise is more passive money management by brokers and RIAs:

Wells Fargo brokerage account AUM is now 27% fee-based, Morgan Stanley’s is 37% and 44% of Merrill’s Thundering Herd has more than half its assets oriented that way. The nation’s largest traditional advisory firms have accelerated their push toward fee-based management and away from transactional brokerage. This has a huge impact on how the money itself is managed and this in turn greatly affects the behavior of the stock market.

These wirehouses, along with JPMorgan and UBS, have slightly less than half of the wealth management pie in America. Registered Investment Advisories (RIAs) have almost another 25% (the fastest growing channel by far) and they are almost completely fee-based – with the exception of some hybrid brokers-and-advisors. That’s 75% of the wealth business in this country being largely driven toward fee-based strategies and accounts.

In 2005, fee-based accounts directly managed by financial advisors and brokers totaled $198 billion. As of year-end 2013, that figure had soared to over $1.29 trillion – more than a sextupling in under a decade. It is safe to say that, while some of these fee-based accounts are managed actively (brokers picking stocks, selling options and whatnot), the vast majority are not. Most of this money is being run more passively – in the absence of a transactional commission incentive for the advisor to trade, why else would he? Edge? LOL.

Josh argues that this shift from churning accounts to actual long term investing is also leading to lower trading volumes:

For one, the lighter volume on the NYSE in recent years – trades are only taking place at the margin and about half of it is ETF creation-redemption related. Most of what’s invested in the market doesn’t move an inch.

This is really good news for everyone except those still paid by the trade.  It is great for all the investors who are no longer being sold one piece of crap after another.  They are now instead just holding the crap along with the good investments, as part of an index, which is an improvement, because at least you aren’t paying to keep buying and selling the crap.  It is great for mutual funds, who should be able to much more easily find and exploit mispriced assets, which should exist in greater volume, frequency, and duration because of the lower level of scrutiny.  It is also great for momentum and other quant based traders, as those trades will have an even larger impact on the market and tend to reinforce their own effects.

I think that it is likely that there is some equilibrium state to be reached here, where those who can find and exploit inefficiencies and mispricing will be able to do so, and charge a fair price for it, and at the same time the overall market level and movements will also retain the characteristics of EMH to the extent that not all theory will need to be thrown out the window, and just leave trading to the market psychologists.

MOOCs vs. Research

mathbabe is concerned that MOOCs will eliminate enough revenue from universities that research will suffer.  This is a legitimate concern, I think.  Just like any kind of automation or disruptive technology, there will be dislocations.

Having (poorly) taught one semester of statistics myself, I don’t think that removing professors, or even TAs, from this process, is going to be harmful to the research that they perform.  As she states, it is the reduced income that would be the problem.

We will just have to figure out ways to compensate.  MOOCs are not going away, and really, have the potential to be a huge improvement in education.  I suspect my students would have been better served by seeing videos of the very best teacher.  Maybe with a professor or TA available in person to answer questions?

Also, the learning may be done via MOOC, but that does not mean the credentials need to be given away for free.  i.e. if you want to graduate from University of Whatever, you have to pay full or at least some substantial tuition, and show up in person to take the finals.  So it doesn’t have to destroy the current system completely.   The only constant is change.

Chicken eyes and mantis shrimp.

Science news.  From Fox News.  Seriously.  The article discusses how the cones are arranged within the eye of a chicken.  Humans have 3 cones, so we see 3 colors, and the combinations of those.  Chickens have 5 cones.  The article says one type is for detecting light levels, but even so, they see many more colors than we do.  But not as many as the mantis shrimp.  Best creature ever.