Free Republic

The premise is not true. If you look up the famous red-blue map (by counties or precincts) and compare the 2000 Presidential election results to the 2004 results, you’ll see blue moving in on the Vermont border, not the Massachusetts border.

Wrong, Crisco breath! Her “A Window Over the Kitchen Sink” is a wonderful memoir, and scarcely mentions cooking at all.

You all would enjoy reading “The Burglar Who Painted Like Mondrian,” by Lawrence Bloch. The burglar ends up with the real one.

“Anyways”?

Yes, the Orlando Sentinel has certainly drunk the Fred Kool-Aid.

North Andover is a very toney North Shore suburb of 33,000 people. I live there. Just looked up the address, and 93 Elm is in a somewhat ramshackle area of town, with lots of two-family houses.

I have been using a French press for the last several months, and I like it. You can find any number of coffee blogs that’ll go on at terrific length about how to use one. You get a little sediment in the bottom of the cup, but the coffee is perfectly hot, very good, never sour.

I’m glad to hear it. It’s just a feeling on my part.

My instinct tells me Snow is very sick, and may not be with us long.

Don’t perpetrate misinformation. The “3/5 of a person” was a compromise for the sake of proportional representation, struck between Northern states, which wanted not to count slaves for Congressional representation at all, and Southern states, who wanted to count slaves fully for the sake of representation in Congress, even though the slaves were not enfranchised citizens. The Constitution does not “regard” black people (or slaves) as 60 percent human.

Our local Red Sox broadcasters were recalling Rizzuto stories the day he died. Rizzuto apparently used to leave games before they were over. He had to get to the George Washington Bridge before the Yankee Stadium crowds. One 22 inning game in Detroit, Rizzuto bailed and got home to listen to the game’s ending at home in New Jersey.

In re the Derbyshire link: It was on The Corner yesterday.

I will point out as well that those “brick and mortar” assets, in a sense, don’t exist, either, because most loans, once made, are repackaged and securitized, then sold as collateralized mortgage obligations (CMOs).

In today's Radio Derb, I pass some remarks about "quants"—i.e. quantitative analysts, the guys who do the heavy number-crunching in Wall Street's back offices. These guys generally (though by no means always—it's pure meritocracy on the quant floor) have a Ph.D. or two in math and allied subjects. They are very smart:

IQs up around three sigmas from the mean for their population group.

(Above three sigmas, you're in the top one or two per thousand.)

Well, here is something on the recent market ructions from an actual quant—an exceptionally knowledgeable & accomplished one, who's been doing this stuff for 20 years. I've doctored it slightly to remove identifying traces, and to improve the English. (These guys tend to think too fast to be bothered with formal grammar, and are anyway often recent immigrants with a first language other than English.)

"On the off chance that you or the folks at NRO are interested, I thought I'd relate a few of the goings on from the quantitative space of the financial markets. ...

"The program trading systems known as 'statistical arbitrage' have been running for years now and have become very popular. Some of them have made billions of dollars by exploiting small statistical abnormalities in the relationships between various stocks. But the problem is that the vast majority of these programs work based on an assumption of eventual convergence, so as more people do the same thing, the spreads between instruments begin to close and more leverage is required to get the same level of absolute return on the investment. These days, many of these strategies run from 3 to 10 times leverage (I've even heard of one which runs at 12 times leverage) meaning for every dollar they have invested, they have borrowed an additional 3 to 10 dollars and invested that as well.

That causes you to accumulate something called 'liquidity risk', meaning it will take you something like 3 to 10 times as long to sell the position in an emergency.

"When the credit market had its crisis, it caused just such an emergency. Several large players needed capital to meet their margin, so they sold in the most liquid market they have which was the US equity stat-arb space. The problem is, there are only so many assets available in the US market, and only so many statistical abnormalities, so since many of these guys all had the same mathematical training, and were using the same data, they were all finding the same alpha. It's like 10 guys each digging a gold mine only to discover a mile below the earth that they were all mining the same vein, and now the ground above them is too weak to support the roof. The selling by the big players caused stop-loss limits to be triggered at other firms, so there was more selling which caused more triggers to be hit and so on, and so on.

"Ironically, it's the best companies (those with the best forward prospects) that are most aggressively being sold off, and the less healthy companies which are being bought up, so this liquidity crisis is actually causing a fairly large value inefficiency in the market, and if someone can figure out when to try to catch the falling knife, they are going to make a lot of money. The economy is still in pretty good shape in spite of this market issue, but their assets are being systematically mis-priced in the market anyway. That can only happen temporarily since the market is so naturally self-correcting, and on that correction someone is going to make a killing.

"As for my personal quantitative strategy, since it identifies value from a different basic operating paradigm than statistical arbitrage, I'm having a small loss (less than 2%) and a rise in volatility, but nothing outside the expectations of the model. In point of fact, my year is still going quite well, but that isn't the case with most of the industry. I was on a conference call yesterday with [name of a renowned quant], and of the [three-digit number] people on the call, I think I was the only one who was still at a healthy profit on the year."

08/10 10:28 AM

You’re the only sensible person here, flashbunny, and the only one who knows how the system actually works. ASCAP and BMI have been collecting royalties for performed music since at least the 1920s. There have always been shortcuts to the process, since those organizations can’t audit every playing of every song: for example, fakebooks, which would cost many thousands of dollars if the rights organizations didn’t overlook them. A restaurant can play the radio if it wants, and the radio station will take care of the royalties. Or it can buy any number of explicitly assembled CDs made for restaurants, that have all kinds of music on them, and will have the royalties included in the price tag.

The Last Straw [John Derbyshire]

An arresting sentence in this BBC report on Pakistan President Musharraf's latest troubles:

“‘The turning point clearly was the abduction of the Chinese massage parlour girls,' says a senior diplomat in Islamabad."

This is all to do with Musharraf having finally authorized an assault on the "Red Mosque" seminary in Pakistan's capital. It's a nest of radical jihadis, who have been making a nuisance of themselves going round the city imposing Islamic virtue, Taliban-style. One of those impositions somehow led to them kidnapping the madam of a Chinese-staffed brothel much frequented by Pakistan's movers and shakers (if you'll pardon the expression).

Musharraf has been loth to stomp on the jihadis for all the usual reasons—mainly, the Pak army's long, long record of using jihadis as proxy troops in various conflicts (Afghanistan, Kashmir,...). Those jih adis really come in handy. However, the kidnapping of the madam got the Chinese mad. Everybody else—including us—is chronically mad with Musharraf for foot-dragging over his country's jihadis, but China's too close (they share a 300-mile border) and too mean (WAY meaner than us), and the Pak-Chinese relationship goes too far back—all the way back to Cold War days, when the line-up was Russia with India, Pakistan with China (and then, after Nixon/Kissinger, with us).

To paraphrase Elvis Presley:

You can burn my house, steal my car
Drink my liquor from that old fruit jar
Do anything that you want to do
But kidnap my whores, and I’ll come down on you!

The Red Mosque is now under serious siege. The seminarians swear they will all be martyrs rather than surrender. Let's hope so.

07/06 03:16 PM

Saw one of those yesterday landing a Lawrence (Mass.) airport.

I’m here in Massachusetts where keeping a gun handy is almost impossible. But I know where my handle-less European rolling pin is, 1 1/2” thick, 18 inches long, and very hard.

One of the radio reports quote someone as saying the plane was “sputtering” and that “one wing dropped” and then it went down. The weather was filthy. She may have been trying to make a near-dead stick landing, and tried to execute a turn — low wing stalled, down she goes.