Economist calls himself bizarre

Paul Krugman disagrees with himself. Ad hominem style -- which is his style.

Greece and Germany; Dubai and Abu Dhabi

What do you think? The Germans don't want to bail out profligate Greece. Is this anything like Abu Dhabi's reluctance to bail out Dubai? The logic of a bail out is that although it rewards behavior, the alternative of letting Greece, or Dubai -- or AIG to give an American example -- would be worse for both parties. Of course, Abu Dhabi was able to extract its pound of flesh.

Here's The Weekly Standard on Greece and Germany:

Opinion polls show that over two-thirds of Germans reject the idea of contributing to a Greek bailout, and the venom with which that opposition is expressed suggests that exasperation has drifted into contempt.

To give more money to the Greeks would be akin to giving schnapps to an alcoholic, argued Frank Schaeffler, deputy finance spokesman for the Free Democrats, the junior partner in Germany’s governing coalition. Focus magazine ran a cover story on “The Fraudster in the Euro-Family” (a reference to the more creative aspects of the Greek government’s accounting) and illustrated it with the Venus de Milo, one-armed and flipping the bird. The tabloid Bild raged at the “proud, cheating, profligate” Greeks. A writer for the rather more heavyweight Frankfurter Allgemeine Zeitung asked whether Germans should have to retire at 69 rather than 67 to pay for Greek workers striking against proposals to increase their retirement age from 61 to 63. The mood in Germany was not improved by Greece’s deputy prime minister. Stung by all the criticism of his country, he grumbled that, having made off with Greece’s gold during the war, the Germans were in no position to complain “about stealing and not being very specific about economic dealings.”

All of which reminds me. I don't recall the voters in Abu Dhabi complaining about a Dubai bailout.

Addendum. The first commenter says Greece hasn't defaulted, but Dubai has, so the comparison is a false to begin with. But, one of the reasons Greece has not defaulted is that it has continued to be able to borrow. Which raises the question, why? Is it because investors are more confident that Germany will save Greece from default than they were that Abu Dhabi would step in prevent the Dubai default? The commenter also mentions CDS rates -- i.e., the cost of insuring sovereign debt. This February 12th article about the high level of Greece's CDS also notes "the cost of insuring Dubai’s sovereign debt against default rose to its highest level since November as concerns resurfaced over the emirate’s large debt." Greek CDS rates have fallen with talk of an EU/German bailout. Is there similar talk that Abu Dhabi stands ready to continue to backstop Dubai?

Famous economics majors

Name this famous economics major.

Latest Wall Street binge: Curling

And, no, it's nothing like a hedge, a straddle, or a stripped mortage-backed security:

NYT:

This slow-poke game, which originated in 16th-century Scotland, has captivated the Type-A world of Wall Street almost by accident. CNBC, whose market chatter is the background music on trading floors, switches to curling from Vancouver shortly after the closing bell.

And so, after a day of braying for money in the markets, traders are winding down with curling. It is, fans say, a bit of after-market therapy. Curling is so slow and drawn out that it becomes mesmerizing.

...

Curling is like chess on ice, and that, Wall Streeters say, it part of its quiet appeal.

Slate explores parts of the allure that the New York Times seems to have missed:

Scales dropping from its eyes, a popular audience has begun to dig curling's mesmeric pace, soothing rhythms, and alluring intimacy. What other sport allows the home viewer so much time to study players' unguarded faces as they focus, fret, and scheme? It is possible to appreciate the sport's charms even while being ignorant of its intricacies, T.S. Eliot having articulated a truth: Genuine poetry can communicate before it is understood.

Four years ago, discussing the Torino games with me, Seth Stevenson neatly defined curling's appeal: "It features the collision physics of billiards mixed with the spin-heavy, long-distance shot-making of golf." Further, he and I bonded in crushing on its ice princesses. The ranks of the besotted grow daily: NBC has ogled the curling-stone tattoo on Nicole Joraanstad's lower belly. John Doyle, a TV critic at The Globe and Mail, is taking heat for deeming the women's game "the sexiest thing at the Olympics." And then there is the fact that, in the matter of exhibitionism, the curl girls make Lindsey Vonn look like an Amish agoraphobe. Once again, Ana Arce—a photographer and a former member of the Andorran team—has shot a calendar that captures these lovely and talented women in poses ranging from the artistic to the sultry to the very sultry to the not at all safe for work in a Helmut Newton kind of way. Is it self-exploitative? Is it self-empowering? Are those categories mutually exclusive? Isn't it good for the sport that the curling stone has gathered some gloss?

Videos: Which way do curling stones curl?; How curling stones are made;
Bikini curling

IMF report on UAE is out

February 18, 2010 --Transcript of a Press Briefing on the 2009 Article IV Consultation with the United Arab Emirates by Masood Ahmed, Director of the International Monetary Fund’s Middle East and Central Asia Department

February 18, 2010 -- United Arab Emirates: 2009 Article IV Consultation - Staff Report; Public Information Notice; and Statement by the Executive Director for United Arab Emirates Series: Country Report No. 10/42

February 17, 2010 -- Public Information Notice: IMF Executive Board Concludes 2009 Article IV Consultation with United Arab Emirates Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.

There's plenty to read. Here's something from the Staff Report:

While there are widely accepted principles for sovereign and corporate debt restructurings, specific best practices for the restructuring of state-owned entities are less clear. Nonetheless, an over-arching principle is that such entities should be subject to the regular corporate insolvency law as far as possible.

And, then later:

Neither DW nor Dubai Inc. discloses consolidated balance sheet or debt information. There are no official statistics, and it is difficult to build them from company financials because the majority of Dubai Inc. entities do not disclose financials, except to their bankers. Documentation in the public domain covers only syndicated loans and bonds as captured by various data providers, and analysts’ estimates are based on these sources. As such, the estimates are of publicly-held debt and therefore exclude (i) syndicated loans for which documentation is incomplete; (ii) bilateral loans (from global or local banks); (iii) accounts payables/suppliers’ credits; and (iv) derivatives, credit commitments, and other liabilities.

Finally, from the Public Information Notice assessment:

Directors stressed the need for increased transparency of economic and financial data, including financial accounts and business strategies for GREs. Together with improved corporate governance, Directors concluded that these steps would contribute to facilitating access of viable GREs to capital markets.

Directors viewed the adoption of the Federal Statistics Law and the establishment of the National Bureau of Statistics as important steps toward developing capacity at the federal level. They stressed the need to develop an action plan including the issuance of implementing regulations and a strengthening of the Board’s operational independence. Directors also welcomed the authorities’ efforts to compile consolidated fiscal statistics and encouraged them to pursue plans to develop leading indicators and the U.A.E’s international investment position, in line with initiatives under the General Data Dissemination System.

The message is clear: the UAE may be modern in many ways, but not in terms of government data collection.

Previous IMF reports can be found at its UAE page.

Emergency shipment of condoms headed to Olympic athletes - Post Sports

Vancouver Now - Emergency shipment of condoms headed to Olympic athletes - Post Sports

Lights out for Chavez

Hugo Chavez has a power failure:

Power failures have become a fact of life in Venezuela, but the energy problems have not affected the presidential palace - until now.

President Hugo Chavez was giving a televised address Thursday when the broadcast on state TV was suddenly interrupted. TV screens went fuzzy for a couple of seconds, then the channel switched to a spot urging Venezuelans to save electricity.

Chavez is known for giving long speeches. In his Sunday program, "Hello President", he speaks for four to six hours.

He has banned singing in the shower:

Despite its huge crude oil reserves, Venezuela relies on hydroelectricity for 70 percent of its power, and a drought has affected power supplies since late last year. “We are ready to decree the electricity emergency because it really is an emergency,” Mr. Chávez said in the first edition of “Suddenly Chávez,” on state radio.

With electricity cuts weighing on Mr. Chávez’s popularity and important legislative elections scheduled for September, the government says the shortages are a result of the drought and soaring demand during years of economic growth, until 2008.

But critics say poor management and underinvestment were responsible for undermining the power grid, and they contend that this has exposed the failings of Mr. Chávez’s policies during his 11 years in office.

Addendum:

President Hugo Chavez said Thursday that Venezuela should boycott the Organization of American States' human rights body, saying the panel wrongly accused his government of political repression.

Chavez took issue with a report issued this week by the Inter-American Commission on Human Rights, which cited widespread human rights violations in Venezuela. The socialist leader called the 300-page report ''pure garbage'' and described the commission's president, Santiago Canton, as ''excrement.''

''We should prepare to denounce the agreement in which Venezuela joined ... this terrible Inter-American Commission on Human Rights and leave it,'' Chavez said during a televised address.

Markets in everything

What happens to those pre-printed t-shirts for championship games, the ones where the team loses?

Our job on Saturday was to pack boxes for the Haitian relief effort – boxes of hats and shirts. We were all arrayed at our folding and packing tables, staring at a seeming mountain of broken-down boxes spewing these articles of clothing. And for some reason lost on us, every single box was labeled in huge block letters with “LOSER”.

You see – these boxes were all full of t-shirts and hats printed for major championship sporting events of the past few years. And at every one of those events, both teams are presented with boxes and boxes of celebratory gear before the game – gear proclaiming them the champions so they can wear them for television as soon as the game ends. I guess I’d never thought about all of those boxes of paraphernalia with the wrong winning team on them. It turns out they get donated to charity – like the mountain of clothing we were about to ship to Haiti.

As I worked on preparing all of this stuff, my mind wandered all over the place. I folded t-shirts proclaiming the Texas Longhorns the NCAA Football champs from the recent game in the Rose Bowl – and wondered again if the Horns would have beat Alabama if Colt McCoy could have played that whole game.

Pigeon beats man....

...in the Monty Hall Problem:

Are birds smarter than mathematicians? Pigeons (Columba livia) perform optimally on a version of the Monty Hall Dilemma

Walter Herbranson & Julia Schroeder
Journal of Comparative Psychology, February 2010, Pages 1-13

Abstract: The “Monty Hall Dilemma” (MHD) is a well known probability puzzle in which a player tries to guess which of three doors conceals a desirable prize. After an initial choice is made, one of the remaining doors is opened, revealing no prize. The player is then given the option of staying with their initial guess or switching to the other unopened door. Most people opt to stay with their initial guess, despite the fact that switching doubles the probability of winning. A series of experiments investigated whether pigeons (Columba livia), like most humans, would fail to maximize their expected winnings in a version of the MHD. Birds completed multiple trials of a standard MHD, with the three response keys in an operant chamber serving as the three doors and access to mixed grain as the prize. Across experiments, the probability of gaining reinforcement for switching and staying was manipulated, and birds adjusted their probability of switching and staying to approximate the optimal strategy. Replication of the procedure with human participants showed that humans failed to adopt optimal strategies, even with extensive training.

For more see our previous posts on the Monty Hall problem.

Isn't this a good signal, not a bad one?

Q : I WENT OUT FOR DINNER WITH THIS GUY, and it was great — we got along well, and there was a definite spark. But when it came time to pay, he pulled out a coupon. I'm hardly a princess, but that totally killed it for me. Am I being too hard on him?

A: Here's my little theory. It's a good signal if you're interested in a committed relationship and you want someone who is financially responsible. It's a bad signal if you want someone to pamper you and you're not looking to join your life and back accounts.

Sentence of the day

Inherited family-owned firms who appoint a family member (especially the eldest son) as chief executive officer are very badly managed on average.

That's Robin Hanson summarizing some conclusions from the paper "Why Do Management Practices Differ across Firms and Countries?" by Nicholas Bloom and John Van Reenen.

Drone on

Israeli drone airplane can reach Gulf.

I guess it doesn't matter if it can fly back.