Thursday, October 31, 2013

A Couple Quick Notes

First, it was Dora and Swiper.  Then, Mickey and Tinkerbell.  This year, Superman and Batman:

Also, while on the way to work, FLG was behind a car whose license plate frame read "I'd rather be driving a fleshlight."  He wishes he took a picture.

On a related note, while FLG was searching the web to see if he could find a picture of said the license plate frame, he learned that there is a shower mount for the fleshlight.  Object sex, the gift that keeps on giving.

Monday, October 28, 2013


On Saturday evening, FLG was standing near the salad bar at the Old Town Alexandria Whole Foods when he noticed that somebody was decked out head-to-toe in Auburn gear.   About half a second later, he realized that it was Robert Gibbs.  

Thursday, October 24, 2013

Time Horizons: Climate Edition

Climate change is, as far as FLG is concerned, the only outlier in his time horizons theory, which is why he found this article fascinating.

Volker Rule

Gensler and Stein say they are concerned that the latest draft of the [Volcker] rule wouldn’t prevent another episode like last year’s “London Whale” trades at JPMorgan Chase & Co. (JPM) that cost the bank more than $6.2 billion in losses, said one of the people, who spoke on condition of anonymity because the deliberations aren’t public.

FLG has said it before, the Volcker rule sounds great in theory or to a lawyer, but is basically impossible to implement in reality.  No regulator is going to be able to tell the difference between hedging and risk taking.   The only way to really implement it would be to forbid depository institutions from using derivatives at all, which, FLG would argue, make the system more, not less, risky.

This whole thing is a fucking fool's errand.

Wednesday, October 23, 2013

On Getting Fat

A few months ago, FLG watched the video below.  It shocked him because it was 1) contrary to what he thought/been told and 2) seemed so compelling.  (FLG is posting a condensed version, but longer versions are all over YouTube.)

FLG had a couple of questions.  First, what about Asians?  Don't Asian diets have a high rice component?  Second, how could the medical establishment have been so far off?

Turns out Asian diets are lower in sugar, which may be a catalyst for all carbohydrates becoming problematic.  Also, Asians have lower BMIs, but higher body fat percentages.  So, their level of leanness might be overstated in the data.

As far as the medical establishment being so far off, the best explanation is a donut.   Basically, if you see that people who eat more donuts have heart attacks and you are looking for a casual dietary factor, it could either be the fat or the carbs.  Back in the 50s, the fat hypothesis caught on and the carb hypothesis was ignored.

But there is a larger issue.  FLG remembers sitting in his econometrics class when the professor, in a bit of a digression, said that a lot of medical research has problems with the statistical analysis, particularly omitted variable bias.  But there is even a larger issue with correlation not equaling causation.  One example that comes to mind is the claim that flossing prevents heart disease.  FLG has seen several attempts to explain a causal link, but the most likely explanation, at least in FLG's opinion, is that people who floss are fundamentally different than non-flossers.  To use a Smithian term, they are more prudent.

As similar thing applies to donuts.  Maybe it's not the fat or the carbs, per se, but that people who eat lots of donuts are less concerned about their health than people who don't eat as many.  This creates a whole host of potential omitted variable problems

As FLG started looking at some of these studies himself, it became clear that Taubes was correct.  A lot of public health recommendations are based on very constrained or inconclusive findings extrapolated to far larger recommendations based upon assumptions and an overly precautionary stance by health experts, who seemed rather oblivious to potential unintended consequences.   It also turns out that recent clinical trials seem to support the claim that carb restriction appears to be the most effective.

This led FLG to reduce his sugar, flour, rice, and potato intake about a month or so ago, and sure enough he's been losing weight pretty steadily.  He still eats pizza and has beer on the weekends though.

Monday, October 21, 2013

Two Quick Notes

First, did anybody else find Sanjay Gupta's decision to turn an interview, ostensibly about how improvements in cardiac technology over the years have benefited Dick Cheney, into a pestering hit piece?  It was bizarre.

Second, FLG found this article listing the 21 inanimate objects that Miley Cyrus has violated, which he posts without further comment.

Wednesday, October 16, 2013

Data Pet Peeve & Words To Live By

One of FLG's biggest frustrations with the world is when people with high-level decision making authority, think corporate executives or government policy makers, believe that any data, even bad data, is better than no data.  He is doubly frustrated, and to be completely honest becomes damn near apoplectic, when they get blinded by statistical techniques.  Look, if you run a regression against a data set that either 1) doesn't actually measure what you care about or 2) is just a generally shitty data set all around, then the results of that regression are at least equally suspect.    Let's try not to lock onto those parameter estimates as being precise and accurate when making decisions.  Garbage in, garbage out, as they say.

FLG also has a long-standing rule of thumb that the more meaningful the data the more costly it is to gather.   Consequently, people often end up using less meaningful, but easier to gather data for the sake of using data because any data is better than no data.   To be fair, even bad or imperfect data can provide something, but there is something about people, especially decision makers, who are otherwise intelligent completely losing sight of the inherent weakness of the underlying data and incorrectly assuming a false precision of the resulting analysis, as if the particular number was somehow magic.

Anyway, thinking of this rule of thumb led FLG to begin listing out some broad guidelines, often cribbed from famous quotes, he tries to live his life by. FLG has even added a couple from The Black Swan, which express rules he's had for a while, but more elegantly:
Better to be broadly right than precisely wrong.
Never run for trains.
Always wear a pocket square.
Always be polite to waiters / waitresses.
Always say 'Please' and 'Thank You.'
Hold the door for people.
If you can't spot the sucker in the first half hour at the table, then you ARE the sucker.
Better to keep your mouth shut and be thought a fool than to open it and remove all doubt.
Try never to hurt anyone's feelings unintentionally.
If you don't make yourself laugh, then who will?

He's sure there are more, but that's it for now...

Tuesday, October 15, 2013

Platonic Form Of Lunch

FLG went down today to the Port of Piraeus, that he might eat some lunch. Glaucon the son of Ariston was nowhere to be found.

Seriously, how could FLG not stop in when he sees a place named Piraeus?

Monday, October 14, 2013

Time Horizons

For those of you wondering, FLG does still maintain that the relative importance a person gives to the future versus the present is what determines their political views.  Consequently, this blog post by a visiting Georgetown professor is right up his alley, even if the writer is quite obviously on the other side of the political spectrum from FLG.

Higher Ed

FLG read this article about higher ed with interest.  There's lots that FLG agrees with.  He is on-board with concerns about using graduates' earnings to determine the quality of a college degree because, as that article states, "Setting students up for immediate careers and giving them the intellectual tools that will serve them best over a lifetime aren’t necessarily one and the same."   In fact, if FLG were ruler of the world, then he'd seriously consider eliminating all undergraduate business schools.  (He's conflicted on undergraduate engineering schools.  On one hand, he wishes engineering schools had more liberal arts requirements.  On the other hand, he wants the people designing our bridges, buildings, and planes to have the knowledge necessary to do it well and that means a lot of technical course requirements.)

But Whoa, Nelly! here:
"The notion is, let’s transform higher education into job training,” Bruce Ackerman, a professor of law and political science at Yale, told me disapprovingly. That sort of sentiment, he said, was detectable in President Obama’s recent remark that it might be wise to shorten law school from three years to two.

Um, uh, FLG might be confused, but law school is a professional school, which wikipedia defines as "a graduate school level institution that prepares students for careers in specific fields."   Sounds pretty much like job training to FLG.  Granted, it's very high-level job training, but fundamentally job training.

FLG must admit that he considers law schools a special case, for the worse.   Medical schools teach future doctors.  Dental schools future dentists.   Law schools often operate under the conceit that they don't train future lawyers so much as teach students how to think.  An advanced, glorified continuation of undergrad for really smart students, which to some extent is true, but FLG also believes the model would fail if it were for the self-selection of students.   Take the entering class at any top law school, lock them in a room for three years, and when they come out they'd still be successful in most any field that requires thinking.  But if it were about just training future lawyers, which is what it really should be, FLG seriously doubts three years would be required.

Takeways here:

  1. Concerns about measuring college effectiveness based on salaries is a concern.
  2. Law school is job training.
  3. Professors are a deeply interested party whose opinions should be taken accordingly.

Sunday, October 13, 2013

More Coursera

FLG signed up for Søren Kierkegaard - Subjectivity, Irony and the Crisis of Modernity.    He's making good use of his Metro riding time to watch and read the materials for these Coursera courses.  FLG wishes there were an easier way to get them downloaded onto his phone.  He hasn't found a good app for that yet.

Thursday, October 10, 2013

Made FLG's Day

This did.

And, The Ancient, FLG assumes that you knew about this immediately and didn't let him know.


In this case, FLG is referring to finance, not menswear.

FLG read an article recommending that people concerned about the looming debt issue use a collar to hedge.  FLG has never really understood the point of a collar.  He's sure there's some circumstance when it would make sense, but he's never thought of one.

For those of you who don't know what a collar is, here's a stylized example.
Imagine you own $100,000 worth of a stock.  Let's say 1,000 shares that cost $100 per share.  You are worried about it falling.  You need to get somebody else to agree that come hell or high water, they'll buy your shares at some price, let's say $90.  So, you buy a put option.  In this example, you buy the option to sell your stock for $90 at anytime during the next three months.  This is the floor of how much you can lose.  It's very much like insurance.  And like an insurance policy, it costs money.  You need to pay the insurance premium.  Where do you get the money?

This is where the collar part comes in.  You don't want to pay the insurance premium out of pocket.  Instead, you sell, to somebody completely different, the right to buy your 1,000 shares at $110 at anytime during the next three months.   And let's say this selling of the right to buy your shares at $110 brings in exactly the same amount of money as it costs to get somebody else to agree to buy your shares for $90 at anytime during the next three months.

A shocking number of people think of this having paid out no money to hedge the downside risk.  No matter what happens, you'll never lose more than $10,000.  But you also traded the upside, as in you'll never make more than $10,000 either.   So, for the next three months you are collared between a $10,000 loss and a $10,000 gain.

Here's what FLG does not get.  When would you want to do this?

If you think the stock is going up, then why limit your upside to $10,000 and why hedge the downside?
If you think the stock is going down, then isn't it better just to sell the stock, get out now, and have $100,000 rather than $90,000?
If simply don't know what it is going to do over the next three months, but want to hold it long-term, then FLG asks why you'd even worry about the next 90 days at all?  Just hold it for the long-term.  Why hedge short-term volatility?
If you want to get out within 90 days, but don't know what's going to happen.  Then, again, just get out now.

FLG can't see a reason to collar any single position.  He could see, maybe, where if you had, say 100 different stocks and knew that you'd have to exit some positions in the next three months, but didn't know which ones in advance, that you might hedge against short-term volatility across the entire portfolio.  Might make sense.

One other argument FLG has heard, is that you might want to make a bet on a stock, but that it's very speculative.  It could swing really up or really down.  You might win or lose big, so you collar to manage the risk.   Here's the thing though.  You could do the exact same thing by making a smaller bet.  Instead of $100,000, do $10,000 or $1,000.  Why put in a large bet, but then collar it?

FLG still doesn't get the collar thing.

Wednesday, October 9, 2013

Suit Buttons

Every single day FLG sees somebody whose bottom suit button is fastened.  If you're in your late teens or early twenties, then FLG'll give you a pass.  But when you are in your 50s there's no excuse.

Monday, October 7, 2013

Discourses On Livy

Out of the blue on the metro today, FLG decided that he'd feel a bit better about the Ted Cruz wing of the party if they had read the first few chapters of Book III of Discourses on Livy.  FLG is on his phone, so you'll need to find the link on your own. But in order, titles paraphrased:
It is necessary to return a republic to its principles
It is sometimes wise to feign madness
Newly acquired liberty required the deaths of the sons of Brutus

Sunday, October 6, 2013

Haberdasheral Question

FLG peruses Mr. Porter about once a month.  This is primarily because of his weakness for Charvet ties. Not that FLG buys a tie each month, but he does look.

Now, FLG fully realizes that a price north of $200 for a tie is downright crazy for some people.  Here's the thing though, while not all of them are to FLG's taste, the vast majority of Charvet ties are aesthetically pleasing.  Likewise, if he won the lottery, then he'd be buying a bunch of Loro Piana stuff.  And these George Cleverley and John Lobb shoes cost a fucking fortune, but are fucking gorgeous.  In these cases, FLG can understand asking whether the stuff is worth the price, but it's all classy, nice stuff.

But a lot of this high-end designer shit, FLG just does not get:
$1,100 for moonboot looking sneakers?
$600 baggy sweatpants?
$1000 boots that look like they've been dipped in acid?
$2300 for boots that FLG can't even describe?
$765 T-shirt with a picture of a dog on it?
$330 for one with a lobster?

Who buys this shit?  Rappers and rockstars?  FLG really wants to know who is willing and able to pay for these things.

Thursday, October 3, 2013

Why Are You Asking Them?

FLG saw an article yesterday that said that a poll of economists put the changes of failing to reach a debt ceiling agreement before default at some low percentage.  He forgets the number exactly.

And there's a reason he forgot the number.   A potential default would have financial and economic consequences, but the process for reaching an agreement on the debt ceiling is a political one.  In what world are economists experts on the intricacies of current political issues and wrangling?   Who the fuck cares what economists think on that point?  Might as well have asked movie theater attendants or heart surgeons or professional gamblers.

Wednesday, October 2, 2013


FLG is pretty sure, almost positive, that he saw Yuval Levin waiting for his food at the Shake Shack in Dupont today.

FLG also saw Ross Douthat at BlackFinn not too long ago.

In both cases, FLG said nothing.  A lesson taught to him by Paul Newman.

Current Reading

While it's been on his current reading list for years, FLG is finally just getting around to reading, rather than just skimming, The Black Swan.  He wishes he'd done so earlier.

Only issue FLG has so far is that Taleb has a serious hate on for Plato, whom he sets up as the antithesis of empiricism.  As regular readers will probably remember, FLG has a somewhat unorthodox reading of and a special place in his heart for Plato.  Oddly, at least in FLG's eyes, is that Taleb has some complimentary things to say about Cicero, who FLG would argue was strongly influenced by Plato.
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