So as I previously mention, I’ve gotten my domain set up to properly work (thanks Rapha!)
Please direct yourselves (all three of you) to roguelynn.com 
I know that I’ve moved around a bit, but I’m permanently there now. Well, because it’s my own domain and all.
This past week I’ve had a slough of inspiration from women that I didn’t realize I admired so much. While it’s not much about economics, I feel like sharing
” It’s four o’clock, do you know where your money is?”
-Maria Bartiromo (she’s on my desktop right now!)
You can’t help but be mesmerized by her presence on CNBC, where she’s worked since 1993.
Erin Burnett, the other “money honey”
Graduated Williams College, worked at Goldman Sachs, then made her path through different media outlets to finally being a rather newbie to CNBC.
Anna Schwartz, somewhat lost under the shadow of Milton Friedman
Received her master’s in economics at the age of 19 from Columbia University, it wasn’t long before she joined the National Bureau of Economc Research; she joined Milton Friedman in writing ”A Monetary History of the United States,” which I’ll soon be getting to reading (it’s making for nice decoration on my desk!).
I swear I had more women I looked up to. I think I’m just forcing it too much. There are people in my life daily that I admire, but I’ll keep that to myself
Who gives you inspiration?
“Should we fear a trade backlash?” – Trade & Immigration – Mark Thoma, Economist’s View
“Wine as an economic indicator” – Catherine Rampell, Economix
“Is this where the $700 billion is going?” – Stephen J. Dubner, Freakonomics
Pretty weak list. Everyone’s on vacation
The new year brings hope for bigger and better things, and I am no different!
My new years resolution is to write everyday. Well, at least 6 of the 7 days a week. Decent enough, right? Also – I’m attempting to get a domain name for this, as I’d like to have more control over the look and feel of my presentation.
Let’s start off -
Some ideas I would like to explore:
Anyone else have any suggestions?
Also – a little FYI for my reader(s), another personal new years resolution is to get into a PhD program (or, the very least, a master’s) in economics. I’ve signed up for the GRE exam for the end of February, as well as linear algebra (beyond calculus) at Harvard (extension school, mind you) to firm up my application. I plan on refreshing my stats and calculus as well, and hopefully do another research project, like that of the FHLB exploration. Schools I’m looking at are University of Washington, Suffolk University, Goethe University in Frankfurt, CERGE in Prague, University of Chicago (a reach, I know), and maybe UC San Diego, MIT (streeeetttcchhh) and another safety and/or international school. Anyone know of any other good schools for economics?
Cheers!
Wow – for god’s sake – wow.
One reason I lose my patience so quickly is because of close-minded people.
I do not believe in protectionism. I do not want to be lectured in the need for protectionism. I do not need to hear that what happened in Mumbai was “small potatoes”, that rather they, as well as other major Indian cities, should be nuked. What the FUCK.
Only those who are threatened by losing their jobs are for protectionism. Rightfully so. But immigration into this country has led to many advances, made our lives easier, and has been the foundation of our history. Immigrants have enriched all of our lives, their lives, and their families. Social economics deems that overall productive. You lose your job to an immigrant? Damn right you can be mad, you just lost your job to someone who is more competent, who most likely will work for cheaper. Yea it sucks, but it only gives you the opportunity to pursue something different, something greater. The immigrant has something that he wants, and you are entitled to happiness as well.
Bitterness about losing a job to someone who will accept less pay is legitimate. But think of it this way – these jobs that are already being done allows for more innovation, higher learning, and a greater entrepreneurial spirit. Homegrown businesses thrive here in this country (and with the right fiscal policy, will continue to grow).
Protectionism as a policy will only lead to overpaid workers, higher expenses for businesses, and will hurt overall innovation of thought.
If it’s not evident that I’m a free market follower, I don’t know what is.
There’s nothing like blogging on a 6 hour delayed flight with the only TV on the plane that doesn’t work. Mind you, it’s JetBlue – I’ve sat on the plan an hour and a half before it took off.
This lends great time to actually getting some work done. Finally – can sit down and thoroughly think through what I’ve been wanting to write for a while.
In continuing this Friendman talk in his Selected Papers, there maintains this prudent versus reckless utility in the next chapter. He describes a person’s marginal utility to, in essence, gamble. Whether it be purchasing homeowner’s insurance, or buying a lottery ticket. A person is being charged a premium for the opportunity to ‘cash in.’ Unfortunately odds are against most.
But I’d like to take this a step in a different direction along with the perception of ‘prudent’ and ‘reckless’ behaviors, particularly pertaining to the financial markets. It is a strong belief of mine that going to Vegas and working in the stock exchange is one in the same. Granted, odds are different, but buying or shorting stock is placing your bets on personal profitability from a loss of the dealer (or company, security, or …government…). But there is a gamble, as there is a chance to profit, and a possibility of loss. Why is stock trading as a profession okay, but weekly trips to a casino seen as a personal problem?
Anyways – drawing that back with utility. Friedman quotes Vickrey saying:
“There is abundant evidence that individual decisions in situations involving risk are not always made in ways that are compatible with the assumption that the decisions are made rationally with a view to maximize the mathematical expectation of a utility function” (Friedman 28).
Individual decisions of risk are not exactly rational. Yeah we get that. Why pay a dollar every day for two weeks for the impossible chance of winning millions of dollars (only to be grossly over taxed)? Why not save that dollar and buy some hot tamales. That’s some utility I could actually enjoy. And it’s a safe bet – I will enjoy it. (I know – not apples to apples). My point is the dollar could be invested in something with guaranteed return, or at least return of more favorable odds.
But what if irrationality of the decision making wasn’t known to the decision maker? What if the gambler, or investor, believes that he’s making a sound decision based on his rationality?
One assumption that capitalism is based on is perfect knowledge. The markets are ‘perfect’ since knowledge is free flowing (granted if you lose based on stupidity and lack of research, that’s you’re own damned fault) and available. But not all knowledge is out there, not everything is known. Hence the purpose of the SEC, laws of insider trading, the growing graduate degree market for quantitative finance.
But seriously, if all entities acted perfectly – how could there possibly be perfection in knowledge? Seeing the current state of the markets, really, is there even the ability to fully research and anticipate investments? Who knew that you’d be paying the government to hold their debt?
Is there really rationality to analyzing a person’s own marginal utility curve towards gambling or investments? I don’t think so.
Why don’t phone pads and calculators/number pads on key boards match up? Why in descending order for the phone, ascending for a calc/number pad?
I feel like this is a question easily answered, perhaps it’s just convention.
A quick post before a night out:
To balance out all the Keynesian reading, I’ve picked up a quick read: Milton Friedman on Economics: Selected Papers
This quote particularly jumped out on me on inflation:
“The tendency for inflation that is high on the average to be highly variable is reinforced by the effect of inflation on the political cohesiveness of a country in which institutional arrangements and financial contracts have been adjusted to a long-tern “normal” price level. Some groups gain (e.g., homeowners); others lose (e.g., owners of savings accounts and fixed-interest securities). “Prudent” behavior becomes in fact reckless, and “reckless” behavior in fact prudent. The society is polarized; one group is set against another. Political unrest increases. The capacity of any government to govern is reduced at the same time that the pressure for strong action grows” (Friedman 16).
Interesting view back in 1977, huh? While talking about the risk of high inflation, he writes as if we’ve gone through this ish already. Currently, risky behavior – subprime borrowers, mortgage owners in general mind you, auto makers, investment banks – is getting assistance! Rewarded, even. Homeowners are now more apt to walk away (hell – I’m tempted to not pay my debts too!) thinking the TARP money will save their asses in the view of the bank. Auto makers are possibly dipping their hand in the cookie jar. Man, and now prudent investors are getting screwed! With their faith placed into the hands of the government, no longer are they worried about minimal interest baring investments. They want safety! (ahem – check with your bank – your money may be fully insured). Prudent investors are in theory paying the government for it to borrow their money.
Does anyone see something a bit frightening? The government borrowing free money to lend failed concepts. Ecuador has defaulted, California nearly bankrupt. Does anyone remember that there were budget issues with New York and Massachusetts? These states that are looked to as leaders in the union. Mind you, states can not go into debt, they must balance their books, but the federal government has that freedom. These states though are just an indication of what’s going on in the local level that may affect the federal level – that may affect these prudent investors.
My advice – if concerned with safety, don’t give the government your money right now. if concerned with returns, well stay away from Hedge funds. Faith in those should no longer exist.
This is an ingenious idea! Thanks to Tyler Cowen at Marginal Revolution for starting a book club via his blog. I intend on following his ideas, as well as come up with my own, while reading The General Theory of Employment, Interest, and Money (Great Minds Series)
I got some more books in my back pocket, so-to-speak. But if you have any suggestions, feel free. I plan on adding this book blogging club aspect to here, on top of normal posts. Because, seriously, this is a fantastic idea!
~house of cards ~ radiohead ~
I spend a lot of time watching the news, both at work and at home. We all know what’s going on with our economy, how the fed and treasury are trying to help the financial system out, trying to help consumers out. And then we see retailers increasing discounts during this time of looming depression to lure customers into relaxing their white knuckles on their cash.
But how has this economy really affected consumers?
Here’s how I see it so far – the banking system has crashed and is evolving into something never seen before. The financial system is wiping out. No longer do 150 year old companies exist. More and more the sector is becoming an oligarchy.
And the news is reporting that it’s all about the credit markets. Yes – well, it’s what caused it. But it’s the banks’ problem. I don’t really see it affecting consumers. Their reaction to save more may be because of a perceived personal credit crunch. But how many have you actually experienced a bank withdrawing your credit line on your card?
I realize two separate points that go against this argument: 1) people are being denied new credit and loans, which cultivate growth in our economy and 2) people are losing jobs.
But for those not employed by the financial sector (about 94% I believe) – there’s still income. Propensity to save is due to the fact that we see 6% of the job force is losing their jobs. That we see foreclosures increasing. That we hear banks not lending anymore.
Maybe I’m not making my point clear – consumers have money. They have income. They may not be able to move into a home – but they can still spend. We still have credit, just not new credit.
Am I insane? I just saw someone on CNN saying they are choosing to use cash over their credit card. But that means they have the ability to use credit. I just think that the propensity to save and to spend shouldn’t be affected if you have a job. You just can’t buy a house right now.
This point is not very refined – I just had to get it out there.
The Big Picture The Economist’s View LOLfed Naked Capitalism Raphael Lullis’ blog