Tweets for 23rd February, 2019

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Links for 22nd February, 2019

  1. “We seem somehow bored with thinking. We want to instantly know. There’s this epidemic of listicles. Why think about what constitutes a great work of art when you can skim “The 20 Most Expensive Paintings in History?”I’m very guided by this desire to counter that in myself because I am, like everybody else, a product of my time and my culture. I remember, there’s a really beautiful commencement address that Adrienne Rich gave in 1977 in which she said that an education is not something that you get but something that you claim.

    I think that’s very much true of knowledge itself. The reason we’re so increasingly intolerant of long articles and why we skim them, why we skip forward even in a short video that reduces a 300-page book into a three-minute animation — even in that we skip forward — is that we’ve been infected with this kind of pathological impatience that makes us want to have the knowledge but not do the work of claiming it.”
    Have you heard of Maria Popova? This interview helps you understand who she is, and her importance in combating what I linked to a couple of days ago – David Perell’s article about the Never Ending Now.

  2. “Thanks to government backing, the state-owned company building the bridge is unlikely to default or go bankrupt. But bridges like Chishi leave local governments and developers struggling with debt, and those who live below nonplused.“If you don’t build roads, there can’t be prosperity,” said Huang Sanliang, a 56-year-old farmer who lives under the bridge. “But this is an expressway, not a second- or third-grade road. One of those might be better for us here.””
    The New York Times on bridges in China – and how there might be one too many of them. Economists have worried for many years now about how China’s economy will slowdown in the years to come, and also about how China’s economy has masked it’s imminent slowdown by building bridges, roads and entire cities when the immediate need is not apparent.
  3. “Turns out the reason was likely the same as the one behind every one of my life choices: it involved the least effort. As Frankie Huang, a writer and strategist based in Shanghai, told me over email, numbers are far easier to type for purposes like websites’ names, as compared to pinyin, the Romanised system for Chinese characters.”
    …speaking of China, Mithila Phadka explains why the Chinese prefer using numbers evreywhere possible – even preferring to use numbers rather than text for URL’s. 12306.cn is preferred to ChinaRail.com, for example.
  4. “In Study the Great Nation, you can catch up on the latest state media reports on Mr. Xi’s decisions, savor a quote of the day from Mr. Xi or brush up on “Xi Jinping Thought.” You can quiz yourself on Mr. Xi’s policies and pronouncements, or take in a television show called “Xi Time,” which is … well, you get the picture.Doing each of these activities can reward users with “study points,” which can be redeemed for gifts in future versions of the app.”
    I worry that China won’t be the only country doing this for very long – far too many leaders in far too many countries are likely to be tempted to be, um, inspired.
  5. “This conclusion, if it withstands open-minded analysis in India, does not mean that India lacks ways to punish Pakistan and motivate it to demobilize groups that threaten to perpetrate terrorism in India. Rather, it suggests that more symmetrical and covert operations would yield a better ratio of risk to effectiveness for India. There are many ways to make Pakistani military leaders conclude that the cohesion, security, and progress of their own country will be further jeopardized if they fail to act vigorously to prevent terrorism against India. Limited, precision air strikes are not India’s best option now or for the foreseeable future.”
    This is from 2015 – but as of that point, this rather well researched article points out that India may not be able to carry out precision air strikes against Pakistan – because of the threat of escalation, because of the technology available with Pakistan today, and because other ground based options may be more operationally feasible.

Links for 21st February, 2019

  1. “Premise 1: The only coherent way of characterizing monetary policy as being either too “easy” or “tight” is relative to the policy stance expected to achieve the central bank’s goals.Premise 2: “Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero.”
    Premise 3: After mid-2008, and especially in early October, the expected growth in the price level and nominal GDP fell increasingly far below the Fed’s implicit target.”
    Scott Sumner reviews a decade’s worth of blogging about one topic, and one topic only – his understanding of monetary theory. The three premises, and the conclusions, policies and problems that arise from there is what the next ten ears have been about. There are two reasons why reading this post is worthwhile. Number one, it helps you understand (I think) monetary policy better. This is true irrespective of whether or not you agree with him. Second, and perhaps more importantly, if you had to write down three ideas about which you could continue to write for the next decade – what would those ideas be? I’m still struggling to find an answer myself!
  2. “There’s a different thrill here for me which is actually the thrill of refutation of confirmation. With theory it’s almost like it emerges out of nothing. And really it’s only in our heads, it’s not something that we have seen before. It is a pure outcome of imagination and there’s a thrilling magnetism to that because that imagination might be right. For me that is the most amazing thing, being guided only by mathematics.”‘The correct analogy is that there’s this singular somewhere in the ocean and you don’t know where — there is only one giant white whale and you need to go kill it because it bit your leg off.””
    Longreads.com, if you are not aware of it already, is just a fantastic website, full of hidden and not-so-hidden treasures. This particular piece was commissioned by Long Reads itself, and is worth reading because of the search for the so called ninth planet, but also because it explains why you should read (and re-read) Moby Dick – because reading Moby Dick helps you understand the link between monetary policy and the hunt for a planet that should exist.
  3. “Solving problems of will requires giving the poorest citizens information and the political heft to hold their leaders accountable. That is best accomplished by strengthening democratic institutions. Poverty is political: Solving problems of will, like problems of capacity, requires rolling up our sleeves and working with the governments in the countries where the poor live to redistribute not only income, but also power.”
    There is much to ponder upon, and at least in my case, disagree with in this article. Read especially the part about India’s space program. But that being said, the article itself is worth reading because it highlights the problems of thinking about poverty – and doing the thinking across space and time. And that solving poverty requires institutional growth is a well understood concept in development economics – but not necessarily outside it.
  4. “It is true that most people are disengaged from serious news, and vote with their guts rather than their heads, or being guided by friends rather than a close reading of policy analysis. That does not make them fools.There is much to concern me in the current political information environment. I worry (partly selfishly) that it is harder than ever to sustain a business that provides serious journalism. I worry that politicians around the world are doing their best to politicise what should be apolitical, to smear independent analysis and demean expertise.I worry that there is far too little transparency over political advertising in the digital age: we don’t know who is paying for what message to be shown to whom.The free press — and healthy democratic discourse — faces some existential problems. Fake news ain’t one.”
    The always excellent Tim Harford on why we overrate Fake News, and should maybe not spend so much time worrying about it – and that the world is saner than it might appear…
  5. “Soon, I will experiment with “atemporality.” For days or weeks at a time, I will escape the present moment and only consume content published in a different decade. For example, if I want to learn about the 1970s, all my media consumption will consist of books, videos, and interviews published in the 1970s. By doing so, I’ll embody the mindset of people in a bygone era and gain new perspectives on the here and now.Everything has been said before. The big concepts aren’t new. You’ll find them in old works. Nassim Taleb calls this the Lindy Effect: “The longer something has been in print, the longer it will remain in print and the higher value it is.”

    With just a couple taps, we can transform our relationship with time, ignite our sense of history and escape the Never-Ending Now.”
    David Perell has some interesting ideas about how we might solve the problem Tim Harford speaks about above. One way of escaping Fake News, is to escape news itself. Maybe not for ever, and maybe not everyday – but escaping into the past by using the tools now available to us is a good idea.

Links for 20th February, 2019

  1. “There is no amount of growth that can’t be destroyed by an investor’s temptation to grab too much of it. And there is no opportunity so appealing that it will catch the eye of someone who refuses to look.But greed and fear aren’t always character flaws. People with the best intentions and ethics fall for their temptation. The two traits evolve from something innocent: the amount of confidence we have that our actions influence our outcomes.”
    I am currently teaching, at the Gokhale Institute, a course on Behavioral Finance. This blog post will be a part of the required reading when I teach the section on overconfidence (and it’s mirror image)
  2. “A Facebook press officer said, in a prepared statement: “This is one study of many on this topic, and it should be considered that way.” The statement quoted from the study itself, which noted that “Facebook produces large benefits for its users,” and that “any discussion of social media’s downsides should not obscure the fact that it fulfills deep and widespread needs.”
    What happens if you go cold turkey on Facebook? I haven’t read the paper itself, but this article from the NYT is a useful read – but not for the usual Facebook bashing reasons. There are benefits to using Facebook, for all of us. I myself no longer have the Facebook app on my phone, but freely admit to checking Facebook every now and then on the browser on my phone.
  3. “Mere hours into the first day of the Google block, my devices have tried to reach Google’s servers more often than the 15,000 times they tried to ping Facebook’s the entire week before. By the end of the week, my devices have tried to communicate with Google’s servers over 100,000 times, comparable to Amazon, at 293,000 times during its block. Most of Google’s pings seem to be in the form of trackers, ads, and resources built into websites. ”
    Speaking of which, what might life look like if you decided to go cold turkey on Google? Much worse, it turns out – your productivity takes a direct hit, as the article above makes clear.
  4. “We’ve made the case for the divergence among equipment manufacturers before: Ultimately robots and excavators aren’t dependent on the same business cycles. This is now playing out.”
    Partially because my own research during the PhD was on this topic, but also because it is a useful way to start thinking about which sectors in the economy tend to move together, and which don’t. More – does this relationship hold over time?
  5. “But the rental market is largely fragmented and unorganized. The build-to-rent model that has worked well globally in many countries hasn’t even scratched the surface here. It is a space ripe for disruption.And in the past 3-4 years, a slew of startups have begun to do just that, particularly targeting young adults and millennials (those in their 20s and early 30s) who need a place to stay when they move out of their parents’ nest or are moving to a new city.”
    This had to happen sooner or later in India – it was simply a function of the way the real estate market is, and has been in India for some time. Watch this space – I’d argue that future growth in India’s real estate sector will happen in this fashion.

Links for 19th February, 2019

  1. “…granted, most supply has moved to Facebook and other social networks; it is no longer possible to build a viable web business with display ads. At the same time, the web is still as open as can be, which means there is room for new business models like subscriptions, a model that has only gotten started and is already producing far better content than the old mass market media model every (sic) did”
    The always excellent Stratechery blog on Spotify moving into the podcasting business. Read this to understand how pricing works in the world of the internet, and how an ad-based business is going to be difficult to sustain.
  2. “Goodhart’s law states that once a social or economic measure is turned into a target for policy, it will lose any information content that had qualified it to play such a role in the first place.”
    A current favorite of mine as an example: students must attend at least 75% of all classes in a semester assumes that a student will auto-magically learn once in class – for that is the reason behind the 75% attendance requirement. Do read, though. I’m sure you can think of a million different applications.
  3. “The constitution ensured that the Senate could protect the people against themselves, and simultaneously ensured that the Framers armored the Senate against the people. Should America be too Democratic, and grant too much power to the House, Madison worried that government would have a propensity “to yield to the impulse of sudden and violent passions, and to be seduced by factitious leaders into intemperate and pernicious resolutions.””
    As an Indian, I enjoyed reading this as a reminder of the thinking behind the Rajya Sabha and the Lok Sabha. And which is why I’d recommend you read it too!
  4. “What these results suggest is the headline inflation – expected to be in the 3% handle in the near future – will eventually start converging, over a 12-month period, towards core inflation which is currently running above 5%. If this were to come to pass, space for any monetary policy easing cycle – notwithstanding a one-off cute in February or April this year – would virtually evaporate.”
    Expect there to be an intense discussion about the differences between headline (overall) and core (overall minus fuel and food) inflation. This article is a decent analysis of the link between the two in the past, and today.
  5. “Consider Ms. Nishimasa’s daily routine. The preschool her two youngest children attend requires the family to keep daily journals recording their temperatures and what they eat twice a day, along with descriptions of their moods, sleeping hours and playtime. On top of that, her 8-year-old son’s elementary school and after-school tutoring class require that a parent personally signs off on every homework assignment.”
    A fascinating read from the NYT, to help us better understand the culture that is Japan.

Links for 18th February, 2019

  1. “That’s a tenet of progressivism: that progress is inevitable. So if you get something designated as progress, then your party, which was responsible for it, will get the credit for it, will always get to attack the other party for opposing it, and will find a continual source of votes in future elections by defending it. And that assumes that people will passively accept this narrowing of the range of political controversy and enjoy the individual relationship that each person has with this huge government that sends checks in the mail.”
    A rather old interview (from 2012), but the article I linked to yesterday about dole outs in India induced some additional research that helped me land up on this article – and it makes some interesting points, none of which is more interesting than the one quoted above.
  2. “The case of these surviving princes in our socialist republic is, in some ways, reflective of the countless ironies that make up Indian democracy. India remains, in many ways, a marriage of awkward histories and feudal legacies with the idealism of liberal thought and constitutional values. They do not sit easily with each other always, and sometimes jostle with force to make their presence felt. And yet the enterprise moves forward, one way or another: which perhaps explains why, even as we celebrate a Dalit president, newspapers descend into a frenzy at the advent of babies to freshly adopted maharajas; how even as a “chaiwallah” rises against the odds to become prime minister, there are princes and rajas to whom his government still owes a royal pension.”
    Manu S. Pillai on the wonder that is India today – its many contradictions and confusions. This one happens to be about how we still pay out pensions to princes and zamorins.
  3. “In short, what happened since September 2018 was the trifecta of trade tariffs, inadequate fiscal firepower from the Ministry of Finance (MoF), and a consistently hawkish PBOC. The 10% tariff on $250 billion of Chinese exports weakened domestic demand more than fiscal support was able to offset, which was reflected in both slower growth and lower inflation. And as inflation fell, the PBOC chose not to adjust the nominal interest rate, so the real interest rate effectively rose as a result. This confluence of factors put significant downward pressure on economic growth.”
    The article contains some forecasts as well – make what you will of them. But the analysis of why China did not use either fiscal or monetary tools is worth reading.
  4. “One story I’ve found myself revisiting over and over again is Asimov’s ‘Franchise,’ published as a short story in the August 1955 edition of If magazine. In it, a future America (2008), decides to reduce voting to a statistical model that extrapolates the outcomes of all elections based on a set of questions answered by one, extremely representative person.”
    The Verge has put together a list of books you might want to read to understand AI better. I am delighted to say that I haven’t read a single one of these, and therefore have a lot of reading to do.
  5. “The supporters are known as ‘Umans’ and control the team using the free United Managers’ app – a start-up which began working with the club in 2017.Before the game Umans can decide on the starting line-up, substitutes, the formation, set-pieces and communicate with staff and players.They vote using coins that they receive by using the app, or they can purchase a premium subscription. The more a Uman plays the game, the more weight their vote is worth.”
    What a fascinating experiment. A football club that is run, on the fly, by the fans. With the advent of technology, what else might be run this way in the future? With what consequences?

Links for 15th February, 2019

  1. “This sounds boring, you might conclude. It sounds like work, and it sounds like life. Perhaps we should get used to it again, and use it to our benefit. Perhaps in an incessant, up-the-ante world, we could do with a little less excitement.”
    And also…
    “In a much-read story in The Times, “The Relentlessness of Modern Parenting,” Claire Cain Miller cited a recent study that found that regardless of class, income or race, parents believed that “children who were bored after school should be enrolled in extracurricular activities, and that parents who were busy should stop their task and draw with their children if asked.”
    An article written in praise of boredom, and I couldn’t agree more. Every now and then, it makes sense to get a little (or plenty) bored.
  2. “Back in November, Instacart changed how it paid its delivery workers, saying that it would provide them with an “earnings estimate, and a minimum $10 payment for their work. The controversy arose when it became clear that part of that $10 minimum payment was coming from tips that customers left for their Shoppers, allowing the company to pay less towards that minimum payment. Faced with lower weekly earnings, Shoppers complained, and the company said that it would keep tips separate from that minimum payment.Amazon and DoorDash have similar policies, and despite that outcry at Instacart, they have indicated that they’re sticking with them.”
    Not only a PR disaster, which it is. But also a great way to work through your understanding of elasticities of supply and demand.
  3. “More to the point, having big aircraft puts downward pressure on ticket prices. Carriers typically like to fill up at least four-fifths of their seats to maximize the revenue on each flight. The bigger the aircraft, the more discounting and promotions sales teams need to do to hit this target — one reason that the trend elsewhere in the industry has been away from the A380 and Boeing 747.”
    And if the second link above whetted your appetite about using concepts of elasticity in the world outside – then this article about large airplanes, availability of alternatives and changing partnerships will be quite useful.
  4. “The economy of favours that he describes in long, carefully researched chapters on the genesis of the Genco Pura Olive Oil company was familiar, too, because that was how much of New Delhi and north India’s business clans worked and still work, stepping in to dispense justice, protection, retribution where the government either failed or was absent.”
    There is always a rule of law in society – that may well be a definition of society. That law need not always come from government – where governments are weak, other institutions will step in to form, change and enforce the law. That’s the Godfather, and that’s why it is such a great read.
  5. “A welfare state makes sense if it means the state providing education and health care for all. Alternatively, handouts are affordable in a lower-middle income economy if you divert money from the less deserving, or if the promised benefits are not open-ended so that you don’t get a runaway bill. Without any of these, the old question begs an answer: Should you give a man fish, or teach him how to fish? Lurking hidden in the new bout of welfarism seems to be an admission that the state can’t deliver for the poor anything other than cash.”
    The earlier part of the article points out statistics that show how much India has grown over the past decade and a half. But competitive politics and botched policies mean that we’re once again in dole-out season. The more things change…