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.

Markets in everything

Google makes 1/2 billion dollars a years off of your typos. A typosquatter might register "emiratseconomist.com" in the hope of getting visits from people who meant to type "emirateseconomist.com".

Moore and Edelman started by using common spelling mistakes to create a list of possible typo domains for the 3264 most popular .com websites, as determined by Alexa.com rankings. They estimate that each of the 3264 top sites is targeted by around 280 typo domains.

They then used software to crawl 285,000 of these 900,000-odd sites to determine what revenue the typo domains might be generating.

If the top 100,000 websites suffer the same typosquatting rate as the sites Moore and Edelman studied, up to 68 million people a day could visit a typo site, they say. They estimate that almost 60 per cent of typo sites could have adverts supplied by Google.

If the company earns as much per visitor from ads on typo sites as it reportedly does from ads alongside search results, it could potentially earn $497 million a year in revenue from typo domains, they conclude.

Moore and Edelman's papers Measuring the Perpetrators and Funders of Typosquatting and Measuring the Perpetrators and Funders of Typosquatting.

The financial bubble burst, but the infrastructure is still there.

Dubai has built the infrastructure investments that many developing countries so desperately need–a well-maintained network of roads, a large air terminal with another under construction, and a port that is among the best in the world. Along with the skilled labor that it attracts from all corners of the world, Dubai has positioned itself as a global leader in trans-shipment, services and logistics systems. Will these investments will be enough to offset its current woes? Whatever the answer, there is no doubt that Dubai’s infrastructure investments are a key ingredient to future growth, not just in the Emirate but in the wider region in which it is located.

That's Vijaya Ramachandran's postcard from Dubai. Ramachandran is an expert at the Center for Global Development.

Paragraph of the day

I was thinking about close-knit communities built on trust and how they are prone to abuse. Think of the abuse scandals in the Catholic Church for example. Or how Bernie Madoff was able to so easily manipulate the Jewish community. So I went look for some research that I thought be out there. Instead I found this:

The full toll that Madoff took on golf may never be known. The tally so far registers in grim estates: a staggering $1 billion-plus purportedly swindled from the membership of Palm Beach CC; a reported $100 million from those at Hillcrest and Oak Ridge country clubs in Minnesota; and on. But the damage to the game can't be measured in dollars alone. In his wide-ranging betrayal, Madoff not only stole a fortune, he frayed the social fabric from which golf is stitched. His still-unraveling scheme has left some players questioning the sense of trust supposedly inherent among golfers, and others contemplating the cruel irony of having joined clubs that were built to keep the riffraff out, only to discover that the worst kind of riffraff was already in.

Read more: Golf.com

Why are there no Arab democracies?

Second paragraph:

The continuing absence of even a single democratic regime in the Arab world is a striking anomaly—the principal exception to the globalization of democracy. Why is there no Arab democracy? Indeed, why is it the case that among the sixteen independent Arab states of the Middle East and coastal North Africa, Lebanon is the only one to have ever been a democracy?

Last sentence:

When the global revolution in energy technology hits with full force, finally breaking the oil cartel, it will bring a decisive end to Arab political exceptionalism.

Larry Diamond, Journal of Democracy, January 2010.

Dubai World may offer 60% on money owed

Dubai stocks fell again, though only slightly, and the price of insuring against a default in the city-state rose on Monday, on the second day of market upheaval following news that flagship corporation Dubai World may offer creditors just 60% of the money they are owed as part of a deal to reschedule $22 billion in debt.

Full article at the WSJ.

More:

The wider spread [r.e. credit default swap insurance] reflects "a combination of…a massive debt buildup, overreliance on short-term debt of variable quality and help by a wealthy neighbor," said credit strategists at BNP Paribas SA in a note to clients. "While all eyes are on Greece, it is worth keeping an eye on the situation in Dubai where considerable uncertainty prevails."

50 economics twitter feeds

The list is entitled "the best to follow the economy". Not sure about that, but it's a list worth perusing.

Annals of false advertising, through the hour-glass

Here, using fMRI, we found that males show activation in brain reward centers in response to naked female bodies when surgically altered to express an optimal (~0.7) WHR [waist to hip ratio] with redistributed body fat, but relatively unaffected body mass index (BMI). Relative to presurgical bodies, brain activation to postsurgical bodies was observed in bilateral orbital frontal cortex. While changes in BMI only revealed activation in visual brain substrates, changes in WHR revealed activation in the anterior cingulate cortex, an area associated with reward processing and decision-making.

Read it all here.

The study used images that were used in an earlier study, Beauty is in the Eye of the Plastic Surgeon:

To evaluate the role of WHR, independent of BMI, we secured photographs of pre- and post-operative women who have undergone micro-fat grafting surgery. In this surgery, surgeons harvest fat tissue from the waist region and implant it on the buttocks. Post-operatively, all women have a lower WHR but some gain weight whereas others lose body weight. Results indicate that participants judge post-operative photographs as more attractive than pre-operative photographs, independent of post-operative changes in body weight or BMI. These results indicate that WHR is a key feature of women’s attractiveness.

The Economics of University e-Libraries

Inside Higher Ed:

E-books are cheaper across the board — most notably in space and maintenance. Courant and Nielsen don’t get into precise modeling for e-book storage, but they note that the digital media repository Hathi Trust stores five million copies at $0.15 per volume, per year (that cost could rise to $0.40 for color volumes). Not only can e-book databases put many more books at scholars’ fingertips, but the medium seems intuitively suited for long-term storage: “While [print] books deteriorate with use, the reliability of e-books tends to be improved with use,” Courant and Nielsen write. (Though, as Henry and Spiro note, as technology evolves preservationists face a challenge in making sure e-books remain compatible with the hardware used to access them.)

“Where it is legally and functionally possible to make the move to electronic storage and use of the working copies of academic materials, there is substantial economic gain,” Courant and Nielsen add.

But not everybody is happy.

More: The New York Times recently featured a debate, Do school libraries need books?

Sentence of the day

Merit is intrinsic, concentrated, and atomistic; value is relational, decentralized, and social.

That's Shikha Dalmia writing about meritocracy at reason.com.

Good work if you can get it

LA Times

In the past decade, LAUSD officials spent $3.5 million trying to fire just seven of the district's 33,000 teachers for poor classroom performance — and only four were fired, during legal struggles that wore on, on average, for five years each. Two of the three others were paid large settlements, and one was reinstated. The average cost of each battle is $500,000.

During our investigation, in which we obtained hundreds of documents using the California Public Records Act, we also discovered that 32 underperforming teachers were initially recommended for firing, but then secretly paid $50,000 by the district, on average, to leave without a fight.

First floor: Ladies lingerie -- and male sales clerks

In Saudi Arabia, except for a few renegades, lingerie is sold to women by male sales clerks. And the sales clerks are not from Saudi Arabia. The Emirate Economist has covered this story for several years; the posts can be found under the lingerie label.

Here, is the latest report from the BBC:

Reem Asaad, an economics professor from Jeddah, organised the boycott through her Facebook page, as public protests are illegal in Saudi Arabia.
...
Parts of Saudi society are still very traditional and do not like the idea of women working - even if they are just selling underwear to each other.

Because of the strict segregation laws barring physical contact between the sexes, women also cannot be properly measured for their underwear.

Other reports:

Saudi women to boycott lingerie shops with male staff
AFP - ‎JEDDAH, Saudi Arabia — Saudi women angry at being forced to buy intimate clothes from male sales clerks were urged on Saturday to begin a two-week boycott ...

Saudi campaign against 'manned' lingerie shops - paper
ArabianBusiness.com - ‎BOYCOTT CAMPAIGN: The campaigners expect a minimum of 40000 women participating in the boycott. A fresh ...

'Manned' lingerie shops targeted
Arab News - Abdul Ghafour I - ‎Feb 12, 2010‎
JEDDAH: The second phase of a yearlong campaign to get rid of men who work as sales clerks in lingerie shops has commenced with activists calling for a ...

The Takeaway interviewed Professor Asaad. So does the BBC. Rana Jad is a 20-year-old student at Dar al-Hikma Women's College, and one of Reem Asaad's finance students:

"Girls don't feel very comfortable when males are selling them lingerie, telling them what size they need, and saying 'I think this is small on you, I think this is large on you'. He's totally checking the girls out!"

Maybe the pope is on to something

Is this something like the law of diminishing marginal utility?

Six studies demonstrate that interrupting a consumption experience can make pleasant experiences more enjoyable and unpleasant experiences more irritating, even though consumers avoid breaks in pleasant experiences and choose breaks in unpleasant experiences. Across a variety of hedonic experiences (e.g., listening to noises or songs, sitting in a massage chair), the authors observe that breaks disrupt hedonic adaptation and, as a result, intensify the subsequent experience.

Don't put off 'til tomorrow what you can do today. Unless it's pleasure. Source: Barking Up the Wrong Tree, who is quoting Nelson and Meyvis.

Toyota sales sped out of control

Question of the day: If Toyota's sales were speeding out of control causing quality to suffer why didn't they raise the price?

For the context watch Jon Stewart, where he shows the head of Toyota USA, Jim Lentz, saying that quality may have suffered because their cars were so popular.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Toyotathon of Death
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Annals of customer service

The taxi driver who finally chauffeured me home was pleasant enough, although a stark notice on the back of the seat reminded me that it would not be wise to push my luck.

"Do not use your mobile phone in this cab," warned the hand-written sticker, "it annoys your driver."

Under the circumstances, even though I was paying for this ride, I felt unable to ask this clearly sensitive man to turn down his deafening rap music.

Guess which country before following the link.

Sentence of the day

"The state was too intrusive in Brasília and almost non-existent in Dubai." - economist Paul Romer.

That's from his article in Prospect Magazine in which he is explaining his big idea of charter cities.

Context of the sentence:

Other urban economists fear new cities will repeat the unimpressive history of government-planned ones like Brasília, or Dubai’s recent bust. But these are both extreme examples. The state was too intrusive in Brasília and almost non-existent in Dubai. Hong Kong is the middle ground, a state ruled by laws not men, but one that leaves competition and individual initiative to decide the details.

Translation: Government was very much involved in Dubai's development but rather than over planning, there was under planning. And great uncertainty about law, especially property law.

Nonetheless, too much is made of Dubai's faults. After all, the expatriates came to Dubai by choice. And the vast bulk of these are coming from countries where economic prospects are dim because government incompetence and corruption.

Crossposted to UAE Community Blog.

You might be an economist if you ....

... you adamently refuse to sell your children ....


... because you think they might be worth more later.

Revisions in the Sponsorship Law

Seabee has a great post on employee sponsorship law in the UAE. Read it here.

He begins by noting a Gulf News reports that Dubai is thinking of revising its law. But what is more interesting to me is another article in The National about New York University and Abu Dhabi. NYU is demanding certain labor conditions for workers building its Saadiyat Island campus. NYU and Abu Dhabi have agreed to a charter of rights.

What Seabee notes is that these rights are no different from current law. In short, Abu Dhabi is agreeing that it will enforce its own laws on the companies building the campus. Abu Dhabi is funding the construction.

Follow the link to Seabee's post for links to the news articles, and to current law.

keYne$ and Hayek

"It's like legit. It's really good rapping," Ke$ha told NPR.

Top economics bloggers grade U.S. institutions that influence economy

Watch for complete results tomorrow of the first 'Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers'. Here's Kauffman's preview of the results.

I was privileged to be asked to participate in this survey.

Name this economics major