iPhone autocorrect

When I first heard about the website “Damn you, autocorrect,” I was convinced all the unfortunately corrected misspellings were fake.

After two months of having an iPhone, I am no longer so certain. Just during the past week I have managed to appear like an idiot when corresponding with two of my professors. With a bit of imagination “by and hands” may mean the same as “by and chance,” but it’s a stretch.

Thesis progress

It seems as though some of my firms have become Gogolian: like in Dead Souls, they employ people who no longer exist.

On the flip side, at least I’m already in the debugging stage.

Currently “reading”: Confidence Men by Ron Suskind

The word reading is in quotes because I am not actually reading this book at the moment. It’s resting on my Kindle, waiting for a slot of free time in my planner to appear again.

Truth to be told, I’m mostly interested in only reading about Larry Summers. Suskin made him the main villain of the book — the cause of everything that went bad with Obama’s administration — and I’m curious what he’s saying about one of my most favorite economists and personalities.

Matlab on Mac

How can I make any progress on my thesis when Matlab crashes every five minutes? Mind you, I own an official copy.

Update: still crashing when rendering graphs, probably because they got less complicated. Overall, my progress can be summarized by the title of Lenin’s 1904 pamphlet, “one step forward, two steps back.”

Currently not reading anymore: Virtue of Selfishness by Ayn Rand

Briefly:

Does a book have a right to its own life? A right to liberty, property and pursuit of happiness? Is its ownership a form of slavery? Is it morally just for it to leap for freedom?

Last week I finally bought a book by Ayn Rand. Though I had been vaguely familiar with her philosophy, I had never read anything besides a few articles in magazines. The Virtue of Selfishness looked like a good, succinct introduction to objectivism. I was nearly done with it when accidentally I left it on a couch in the base area of the Big Sky ski resort this afternoon. Too bad.

I cannot say my views are often aligned with Rand’s, particularly on the subject of societal rights, but it sure as been an enlightening read.

The book is a collection of essays of Rand and Nathaniel Branden and it’s Branden’s writings that are closer to me. A trained psychotherapist, he approaches philosophical questions with self-esteem serving as determinant of values. I recommend On Pleasure.

Currently reading: Money: A Suicide Note by Martin Amis

John Self arrived to New York in a bad mood. Fearing flying, the film director obliterated himself before heading to Heathrow to catch a standby flight across the Atlantic. The airplane’s cramped seat made his body, devastated by heavy drinking and smoking and downing of junk food, sore.

In a cab to his hotel on 2nd and 45th, splintering headache from hangover heightened his normal rudeness and made him tell the cabdriver that in his company he finally realized why cabdrivers are called scumbags. Finally in his hotel room, Self habitually downed a bottle of duty-free whisky and drifted to sleep to be fresh for days of absolute Manhattan misery.

He lost — terribly — in tennis, was spied upon, paid for a prostitute who happened to be pregnant. All that in pursuit of his first feature movie. But the film was not occupying his mind: rather he contemplated where his girlfriend Selena was and who were the people she had been fucking. Conversation with his friend did not bring him closer to her whereabouts: “I don’t know where she is,’ said Alec. ‘Lying in a pile of cocks somewhere. Wiggling her bum in some penthouse. Take your pick.”

——

Since early July, when I read for the second time the Hitchhiker’s Guide to the Galaxy series, all my readings have been been non-fiction. Nothing wrong with that — they all have been highly engaging and informative, but they did not tell a story.

Last week I finished Christopher Hitchens’s memoirs, Hitch-22. Mid-way through the book, just after he finishes recollecting his Oxford years, I fell into mild  depression — his life has been far more interesting than mine.

Known for dropping names, Hitchens devotes a few chapters to his closest friends. Salman Rushdie and James Fenton get their dedicated pages and so does Martin Amis, a son of Kingley Amis who authored the next book on my reading list Everyday Drinking. Amis is regarded as one of the best British writers of the 20th century and Hitchens’s accolades persuaded me to venture back into novels and pick up his Money: A Suicide Note.

After two chapters I must admit Amis’s fame is deserved. Thus far everything about the book has been superb. It has been a welcomed distraction from grad school applications and, however infrequent, thesis work.

Currently reading

On Friday I finished First-Rate Madness, an analysis by Nassir Ghaemi of how mental health or illness affected decision-making abilities of generals or statesmen. Ghaemi’s thesis can be summarized as follows: “during normal times mentally healthy leaders do just fine. In times of crises, they fail miserably and mentally ill leaders do better.” He looks through psychiatric at an eclectic mix of persons, ranging from Sherman to Gandhi to Hitler, and explains how their abnormal states of mind helped them (or harmed them) in conducting their business. Bi-polar disorder is unusually common in his sample. Ghaemi credits the manic phases of the illness for the levels of creativity you’d find in, say, Kennedy, and the depressive phases for, eg, Churchill’s ability to pessimistically — though correctly — foresee Hitler’s intentions. He contrasts their accomplishments with those of Chamberlain or Bush, who he finds mentally healthy but bad bad leaders in uncertain times.

The book is highly engaging and I’m glad I read it. Much like first-year med school students,  I occasionally self-diagnosed myself with an illnesses and cured myself as soon as I learnt its effects were not always positive. The book, however, is not perfect. For one it tends to repeat itself. Many of the portrayed personalities seem to have suffered from an almost identical type of abnormality (eg, Roosevelt and Kennedy). This leads to a second point: selection bias. Ghaemi partially acknowledged this problem, claiming that these were the leaders who faced major crises. A definition of major crisis is never provided. Crises like Korean War would surely qualify. Thus Ghaemi provides an well-researched and entertaining read, but fails, in my eyes, to convince me his thesis is correct.

Another book I just finished is Walter Badgehot’s Lombard Street A Description of the Money Market. Written in 1873, it explains how a central bank should behave in a crisis. Badgehot was a Britton (and the first editor of The Economist, no less!) and the book is centered around the events and actions of Bank of England. He draws lessons from recent crises and shows what the Bank could have done better. He offers advice on the government of the bank, as well as on the structure of private and joint-stock banks, which were being founded at rapid pace.

I assume many of Badgehot’s ideas have been tested in practice since the publication of this guidebook. I can’t be more specific for I’m not too familiar with the Bank of England, and Amazon does not carry a book on the topic that wouldn’t a reprint from 1900. The book’s central messages (in times of crises, lend freely, at high interest, against sound collateral) nonetheless remains valid.

With these books finished, I must focus on my grad school applications. I’m entering a period of self-imposed moratorium on purchases of further texts until Sunday (an exception may be the MWG’s Microeconomic Theory, which I may need for my work).  Next on my shopping list are Hitch-22 (Hitchens), Keynes Hayek: The Clash that Defined Modern Economics (Wapshott) and Essays in Persuasion (Keynes).

Elitism

Rarely, if ever, have I had to sit through something as stupid as an episode of Discovery’s Gold Rush.

The TV show follows two groups of true Americans heroes who, with god’s blessing, drive heavy machinery into Alaskan nature in futile, overly dramatic, attempts to find gold. Over and over again.

Prussian financial crisis of 1873

One of my applications requires me to submit two writing samples of 2,000 words. The choice of the first one is simple — I will just rewrite the draft of my thesis in a more concise way. Selecting the second piece has been more difficult, because I haven’t produced any long writings recently. Last year’s 350 paper would qualify, but frankly it’s not very good. The History of Economic Thought final is good, but cannot be cut by the necessary two thirds.

Finally I remembered the five page essay I wrote as a part of one of my seminar assignments this fall. It applies the Kindleberger/Minsky six-step theory of financial crises on the Prussian crash in 1873. At 1,200 it is too short, but I had a couple of history books shipped to my place in Ohio and after going skimming a few relevant chapters, I am elated. By the end of the week the paper will be much great!

Personally, I find the 1873 crisis extremely interesting. Brief overview: it occurred because the Prussian government was able to pay off all of its public debt as a result of the French indemnities after the Franko-Prussian war. The lack of low-yielding but safe investment opportunities pushed Prussian financiers — both professional and amateur, ie, households — into riskier assets.  The stock market boomed and hundreds of companies filed for IPO during the final months before the crisis (as a consequence of a new law that made incorporation easier). Henry B. Strousberg, a prominent industrialist, grew fantastically rich during the boom — his holding company’s stock would not cease to rise. Unfortunately, it was discovered that he was cooking the books. Market suffered a confidence shock and began to fall, soon being joined by other stock exchanges throughout Europe.

That all seems fairly mundane (apart from the reparations bit). The most curious aspect of the 1873 crisis is the transmission mechanism that brought it to the U.S..

United States were at that time in the middle of their own financial problems. Stock markets were soaring uncontrollably, as were real estate prices in New York and Chicago. Significant portion of U.S. exports was in form of silver.

Europe at that time relied on a silver standard, ie, each country’s money was backed by its physical holdings of silver (or also on bimetallic standard). The precious metal ensured stable prices for trading, particularly with the East. Its commercial importance, however, had been waning. Bismarck, who was awash with gold received form the French, decided to switch entirely to gold standard. He began dumping Prussian silver to the market, where the French had to purchase it to maintain their bimetallic standard. To pay for it, they began selling their gold. Bismarck thus got rid of his silver at artificially high prices, acquired more gold at artificially low prices, and established Prussia’s position in international trade. As soon as the French realized they are not behaving ideally, they stopped purchasing silver and the whole market for the commodity froze. The U.S. exports of silver came to a halt, and so did the economic growth. Recession followed. Some world economies recovered relatively quickly — Prussia in about five years — but growth of others remained retarded for more than two decade. Hence the name Long Recession.

Thrilling, isn’t it? Can’t wait to read and write about it more.

McEwan on Hitchens

NYT Op-ed

and a Vanity Fair video.