Richard Dawkins on our “queer” universe

My most favorite TED talk. Staggering.

21

The Thinker

Currently cursing:

IS-LM model. Not fun.

Mathematics

My two favorite math jokes:

A mathematician walks into a bar and asks for ten times the normal number of drinks anyone else has. “Wow,” says the barkeep, “That’s an order of magnitude.”
—-
“What do you do with that math degree?” “I use it to park my SUV. You see, if I roll up the windows, then the SUV is a closed and bounded subset of Euclidean space and therefore compact.”

This is when the things went bad

Requested page at Rhapsody.com

This is what interests me

Today was generally a very good. With the exception of my history class where my enjoyment of two interesting movies about Stalin and Hitler was diminished because of the girl who sat behind me and horribly smelled after previous night’s cheap beer, the day went really well.

It turns out that my general frustration from ES can be alleviated if one makes a strong case for himself.  On Monday I went to talk to the El Professore to voice my concerns about the class as such, specifically about the faulty method of testing, and while I did not manage to persuade him to change it, articulating my determination clearly affected the test and assignment grades. So once again I’m on the road towards 4.0.

And then I picked up the latest issue of Wired. Normally I would pass this magazine due to lack of free time (I generally only read economic magazines and American Scientist or New Scientist, if either features anything about genetics or evolution in general), but this time the cover drew my attention. The main story of the issue is “Recipe for Disaster: The Formula That Killed Wall Street” (available online here) and it explains what went wrong with the risk assertion.

In late 1990s a new formula for determining probability of default was created; it is called Gaussian copula and looks like this:

The explanation of individual parts is available in the article.

The formula became revolutionary because it was based on correlation of default values of the two securities based on current prices at the CDS (Credit Default Swap, an insurance against default) market. So instead of looking up and analyzing decades’ worth of empirical data, the security could be priced almost instantly based on the current market price.

Unfortunately, the model is flawed. By bundling various types of underlying assets into one security (CDO, Collateralized Debt Obligation), the probabilities became distorted, and for simplicity only the promising were taken into consideration. And then everything went sour.

Anyways, the mix of computer science and math that turns out to be finance (or just economics) is what I immensely enjoy. Last night I finished a critique for my Microeconomics class, and I was almost mesmerized by the analysis and conclusions of my underlying article on the price sensitivity of Dutch health insurance.

I cannot wait for this semester to be over. Not because I did not enjoy my classes (CS and Econ are great and so is History and Math, ES is a different story), but I feel that I spend most of my time and effort on classes that are of marginal importance to me (Hist and ES), and that prevents me from going deeper into CS and Econ. But next semester will be different — I am currently aiming to take two CS classes and Intermediate Macroeconomics and Finance. If only I could squeeze a class on probability in there…

Exhausted

Albeit getting a plenty of sleep during the weekend and even last night (roughly eight hours each weekend night and five the past one), I feel extremely tired. I might be starting to develop a burnout syndrome, as most of the school work I have been lately doing was tedious, uninteresting, and irrelevant to my major — I am talking about you, damn Environmental Sciences.

I have never thought the idea of throwing a shoe at someone might appeal to me. Today I daydream about throwing my shoe at the person who signs his emails El Professore.

How business should be done: Politico

The New Republic featured a story on Politico.com, a “hyper-caffeinated Washington news source.” The more I was reading the more I was concurring its business model built on speed and activity — no opportunity can be missed.

Most metropolitan newsrooms wake up slowly. Not Politico, where speed rules. Reporters are expected to post items by the time congressional aides and White House staffers have their morning meetings. VandeHei has been known to e-mail staffers at 5:30 a.m., and reporters are posting items by 8. Almost all Politico staffers are given laptops and wireless modems so they can work anywhere. (They are also permitted to file news on any subject–including on anyone else’s beat–if they have the goods, which has led some staff to complain about the free-for-all.)

TNR: The Scoop Factory

Currently writing an essay on: Burmese Days

[Westfield: ] “Reminds me of the old colonel who used to sleep without a mosquito net. They asked his servant why and the servant said: ‘At night, master too drunk to notice mosquitoes; in the morning, mosquitoes too drunk to notice master.’”