What a fabulous anacdote


But in the case the Supreme Court is deciding today, Ricci v. DeStefano, the idea is that the test is inherently “biased” against black people because black people haven’t been doing well on it. In 2003, the highest a black candidate scored for a captaincy was 16th place, behind twelve whites and three Latinos. New Haven’s city service board refused to certify the results, and now 18 candidates are suing on the basis of, for one, the Civil Rights Act of 1964–the very set of laws that transformed life for black Americans not so long ago. … Plaintiff Frank Ricci understood this. He’s dyslexic. Instead of doing poorly on the test and charging discrimination, he had textbooks read onto tape, worked with a study group, and practiced hard. He placed sixth out of 77. Any notion that this is too much to ask of someone with more melanin–or even with a different “racial history”–is nonsensical at best and gruesome at worst.

Moving Beyond Bias What a wonder example of the triumph of will over biological limitations.”

Upgrading Nspluginwrapper

“Nspluginwrapper is a program that let’s you use Flash plug-in and other video stuff on 64-bit Linux even though many of those plug-ins are only written to run on 32 bit systems. It tuns out that the libraries make this complicated. I’d been having problems with Pandora, and I thought upgrading from version 0.9.91.5 to 1.2.2 would help (it didn’t). Here is what I had to do to make that happen I had to download the file: 1.2.2-0ubuntu5 Then install several additional libraries: libcurl4-gnutls-dev The multilib library for gcc or g++ then the usual ./configure make sudo make install I thought all this might help someone else. ___________________________ Update: Once I did the above and then followed the directions at How to Install Adobe Flash Player 64-bit on Ubuntu 8.10 I was able to eliminate the gray screen problem.”

What a weird and interesting idea

“Hence, Limited Purpose Banking can accommodate credit default swaps (CDS) as well as any other risk product. But what Limited Purpose Banking won’t do is leave any bank exposed to CDS risk since people, not banks, would own the CDS mutual funds. If such mutual funds sound revolutionary, they’re not. Funds of this kind have been around for centuries. They go by the name “tontines,” or systems of “pari-mutuel betting.”

A Banking System We Can Trust This is interesting, and perhaps better than our current regime. It amounts to replacing all the financial assets of the household with equity. That may reduce systemic risks quite a lot because all capital structures are flat. However, no longer can you tailor your asset portfolio of stocks, bonds, and derivatives to meet your particular needs. In this regime you’d just hold shares of these different vehicles, and you’d purchase your insurance from these various funds. In some frictionless setting this wouldn’t matter. You’d have the Modigliani-Miller theorem holding and enough Arrow – Debru securities that this would give you the same insurance as before. But in our messy world of agency problems, transaction costs, and incomplete markets, surely many would be worse off. Kotlikoff and Leamer are wrong that this would eliminate systemic liquidity risk. Perhaps much reduce it, but not eliminate it. Reducing banking system leverage to 1 removes most of the systemic risk. Financial market makers have to hold cash and shares in all these closed end funds in order to make a market in them. They can still go belly up or mess up trading, leaving assets without market makers. Further, by structuring these vehicles as closed end funds you eliminate a lot of liquidation risk, but at the price of vastly increasing the costs of changing the number of units in the fund. But that’s something that happens all the time in credit default and other derivative markets. That’s an example of how this would significantly increase the average cost of financial overhead to reduce the costs when things get really bad. These may be trades-off worth making, However, their piece doesn’t make it seem as though there are any downsides to this approach.”

In case you were ever wondering

“I’ve been thinking about the Sharp Ratio, the ratio of E{asset return -risk free return] / [Standard Deviation of asset return. It usually is better to use the geometric mean because it is resistant to the effects of outliers. But what should we use for the standard deviation? The variance is calculated from the arithmetic mean, so using that messes up the ratio. However, just like there is a geometric mean, so too is there a geometric variance. I was surprised to see that there was no Wikipedia page for this concept.”

What’s the goal of this policy


Many countries like Germany (pictured) and Switzerland are now mandating that all new buildings with flat roofs must plant a garden on them….In Tokyo, where the “urban heat island” phenomenon has raised local temperatures by several degrees, city officials are mandating green roofs like this one to make buildings more efficient and bring temperatures down.

Under the New Gaian Regime, No Roof May Lie Fallow I’m sure there are many good reasons for flat roofs. However, since building a green roof isn’t free, it is easy to imagine the unintended consequences of these laws, far fewer buildings with flat roofs.”

Will we reduce our carbon emissions?

“Peter W. Huber, in Bound to Burn says that the low price of carbon and high price of green alternatives means that most proposals for carbon emission reduction won’t work. Fascinating and eye opening. I’m not as convinced as he is that we cannot pay the poor to keep their trees, but the logic of continued coal based power production seems ironclad.”

Big problems with this line of reasoning


There are hundreds of young men just like him all along the Somali coastline, calling themselves “coast guards” who protect Somali waters and “tax” foreign shipping to compensate for the fact that foreign fishing fleets, unmolested by any Somali state authority, annually plunder hundreds of millions of dollars of fish from Somali waters

Hostile takeovers

“I learned this morning about Aware, an organization acting as advocates for a gender equality in Singapore. From the little that I saw on their positions, they are similar to NOW and other similar organizations here in the America, that is governed from a generally left of center ideological perspective. It seems that recently that changed. A group of about 80 members of a conservative Christian church joined the organization and then took over all the committees and sub-committees. Only the new president represented the old-guard, and she resigned a few days later. You can read more details at WHAT HAPPENED over at Save Aware Which is all sad for the old members and happy for the new ones, who cheaply took over an established lobbying and good works organization. As a financial economist, I’m curious why this doesn’t happen more often. The NRA has way more members (4 million) than than the Brady Campaign to Prevent Gun Violence (1.7 million in dues at $25 dollars in dues is 68,000 members). Why haven’t they showed up en mass to join the Brady organization and shut it down with a major contribution to the NRA of money and strategy documents and then firing all its employees? Corporate takeovers used to be pretty common, it was only when states changed their corporate laws to allow a variety of anti-takeover measures (poison pills, staggered board of directors, golden parachutes, and dead hand rules) that they became more rare. I’m not sure that non-profits are constrained by the fiduciary duty the prevents the most extreme anti-takeover measures. Non-profits may be able to pass anti-takeover rules without the concern faced by corporate boards that doing so prevents the firm from fetching the highest price. I few thousand highly motivated and united people of even modest means could take over practically any major non-profit with a voting membership and bend it to their policy ends. When you consider the massive endowments and other assets of these organizations, this could be far more valuable than the money that group could raise on their own. I think you’d have to strike in rapid succession because after a short period you’d see anti-takeover policies snapping into place.”

To liquidate or not to liquidate

“On intransigent creditors unwilling to cave to government demands on Chrysler:

From a public relations perspective, however, gratuitously driving a company as storied and economically important as Chrysler into bankruptcy is generally not the kind of thing that any bank wants to do. Unless, that is, banks in general have already hit the zero bound in terms of reputation. Call it the Ticketmaster strategy: you can do anything you like once everybody hates you.

When banks have no reputation left to lose I don’t expect we’ll see the liquidation of Chrysler because the government will cave. However, if they did, that would be a great contribution to reestablishing that: 1) The banking system is independent from the government 2) This is the sort of economy where poorly run firms fail 3) Small creditors won’t be pushed around by the government”

Condemned to repeat it

None of this information had the comment “classified” on it. It wasn’t secret, top secret, or even confidential. At least, none of the files carried those labels. Now, no military computer on the Milnet is allowed to carry classified information. There’s another computer network, completely separate, that handles classified data. So in one sense, the Systems Command’s Space Division had nothing to lose: its computer is unclassified.But there’s a deeper problem. Individually, public documents don’t contain classified information. But once you gather many documents together, they may reveal secrets. An order from an aircraft manufacturer for a load of titanium sure isn’t secret. Nor is the fact that they’re building a new bomber. But taken together, there’s a strong indicator that Boeing’s new bomber is made of titanium, and therefore must fly at supersonic speeds (since ordinary aluminum can’t resist
high temperatures).

In the past, to pull together information from diverse sources you’d spend weeks in a library. Now, with computers and networks, you can match up data sets in minutes— look at how I manipulated Mitre’s long-distance phone bills to find where the hacker had visited. By analyzing public data with the help of computers, people can uncover secrets without ever seeing a classified database.

Back in 1985 Vice Admiral John Poindexter worried about just this problem. He tried to create a new classification of information, “Sensitive but unclassified.” Such information fit below the usual levels of Top Secret, Secret, and Confidential; but access to it was to be denied to certain foreigners. Poindexter clumsily tried to apply this to academic research—naturally, the
universities refused, and the idea died. Now, standing in front of my monitor, watching the hacker prowl through the Space Command’s system, I realized his meaning. Air Force SDI projects might not be top secret, but they sure were sensitive.

The Cuckoo’s Egg: Tracking a Spy Through the Maze of Computer Espionage circa 1990

Computer Spies Breach Fighter-Jet Project in today’s WSJ:

Computer spies have broken into the Pentagon’s $300 billion Joint Strike Fighter project — the Defense Department’s costliest weapons program ever — according to current and former government officials familiar with the attacks.Similar incidents have also breached the Air Force’s air-traffic-control system in recent months, these people say. In the case of the fighter-jet program, the intruders were able to copy and siphon off several terabytes of data related to design and electronics systems, officials say, potentially making it easier to defend against the craft.


Many details couldn’t be learned, including the specific identity of the attackers, and the scope of the damage to the U.S. defense program, either in financial or security terms. In addition, while the spies were able to download sizable amounts of data related to the jet-fighter, they weren’t able to access the most sensitive material, which is stored on computers not connected to the Internet.

Former U.S. officials say the attacks appear to have originated in China. However it can be extremely difficult to determine the true origin because it is easy to mask identities online.

I hope our information security people designed this system in a way that what the hackers got isn’t worth much without the information on the secure network. If we see some of our next generation technology showing up in Russia or China, I guess we’ll know.

It seems like our enemies are getting better at stealing our data faster than we are at keeping them from doing so.