Software Nerd

Friday, September 29, 2006

Saint Christopher is the God of Travel

In a recent thread on, someone asked if Christ was a real person, or whether he was a myth, perhaps even adopted from more ancient myths. [As i noted in the thread, some say Christ is a version of Krishna.] I have no idea, and don't really care; frankly I doubt that Christians really care one way or the other.

However, thinking about this, and about the church adopting the Winter festival as its own, another parallel struck me: the practice of the Catholic church in assigning special "roles" to various saints.

"Pray to St. Christopher for travel, and pray to ABC before launching a business,..." is exactly the type of advice that Hinduism gives, with its pantheon of Gods and the type of practice one might have found with respect to Roman or Greek gods. Therefore, I figure that this practice of the Catholic church might have been a way to adapt their monotheistic message for a population that was used to, and wanted, multiple Gods.

I can just picture the Chief Marketing Officer of the ancient church thinking up the scheme. Sure, we can give them that! They'll be like minor Gods. There are none in the bible, but we'll promote famous dead humans to semi-God status. That ought to work.

Friday, September 15, 2006

Immigration Laws hinder the Competent

Princeton's 2006 Salutatorian, Dan-el Padilla Perlata, was brought to the U.S. by his father, as an illegal immigrant. he was only four year old then. His family moved 13 times, he lived in homeless shelters, and his father abandoned him. His application for immigrant status has been pending with the INS despite letters written by Senators.

I'm pretty convinced that the government will give him some type of immigrant status in the end. However, the denial of immigrant status to competent people is something that gets to me more than most other topics.

Wednesday, September 06, 2006

Who is persecuting Grasso?

New York's AG, Spitzer, has learnt from Guliani's experience: prosecuting rich guys is a good route to political office. The typical "average-Joe" does not follow these cases very closely. He assumes that a sizable part of getting rich is that one scams other people, and is happy that the government goes after the worst "excesses".

Many of the cases that Spitzer is prosecuting involve the notion of "insider trading" or involve "false reporting". One would not expect "average Joe" to begin to understand why those notions are faulty. However, there is one case where the issues appear clearer: the case of Mr. Grasso, once the chairman of NYSE. This case is about whether a CEO was paid too much; surely the U.S. electorate can see that this is none of the government's business... I won't hold my breath.

Mr. Grasso is being asked to return bonuses paid to him by his employer, NYSE. This is not a case of a shyster CEO reaping a huge salary while running an organization to the ground. Grasso did a good job, the NYSE's board praised him repeatedly, and when he left the exchange was in good shape. The NYSE did well, but the case would have us believe that Grasso still did not deserve the salary.

What law, you may wonder, gives the government a say in Grasso's salary from a private organization? The basis for the case is a law that disallows unreasonable pay by non-profit organizations, which the NYSE was at the time. As happened with the recent opitons-backdating cases, a concept created for tax-law comes back to bite, allowing the government to meddle where it ought not to. [Aside: The government is using tax-law as a reason to have the IRS read Church sermons.] The argument seems to be: since we took away less of your money (as tax), we're going to tell you what to do.

There is, however, something I find more despicable than average Joe's complacency and also worse than Spitzer's relentless climb to governorship of NY on the backs of business-folk. It is this: the people who asked Spitzer to go after Grasso.

These were none other than the new management of the NYSE, in the form of Mr. Reed, once chairman Citigroup. (Aside: Reed was displaced at CitiGroup by a much abler Mr. Weill . Later Weill fell victim to Spitzer. No, I don't smell conspiracy; merely two different type of people with different ethical outlooks.) Businessmen like Mr. Reed -- often with motives they believe are ethical -- are responsible for sanctioning little bureaucrats like Spitzer. They bend over and ask to be whipped. For shame!

Updated (Nov 27th, 2007): There's a book out, with more details of Grasso's rise and fall. Here's a WSJ review.


Friday, September 01, 2006

Pure and Perfect Competition

Mark Cuban owns a web site called It's new. The idea is: a Cuban employee researches stocks that are "bad deals" and publishes the story on the site. Cuban actually shorts the stock as well. This (last) part has been the subject of controversy. (See related thread.)

An author named Gary Weiss was critical of Cuban's plans. Weiss has written some books whose titles suggest he is against fraud on Wall-Street. So I commented, on Cuban's blog, that
"From the titles of his books, this Wise guy ought to be on ShareSleuth's side. One can only assume that his books are not about real corruption, but the typical left-wing stuff aimed at anyone who wants to make money."

Turns out that Weiss may not be a left-wing statist after all. A helpful commenter aprised me of this by posting a comment to an unrelated post on my blog. So, I decided to create this post as a collection of his comments and my reply.

Christopher said...

Hi. I'm writing to respond to a comment of yours that I saw on Mark Cuban's board.

"From the titles of his books, this Wise guy ought to be on ShareSleuth's side. One can only assume that his books are not about real corruption, but the typical left-wing stuff aimed at anyone who wants to make money."

I've read one of those books, and I think I know Weiss' general POV.

He isn't left-wing. In fact, he is a fervent believer in the efficient capital markets hypothesis and its annex, the random-walk hypothesis. These, as you probably know, are ideas often associated with laissez-faire thinkers.

In Weiss' case, his belief in ECMH leads him to the conclusion that just about any actively-managed investment fund, whether it puts the word "mutual" or the word "hedge" in front of the noun "fund," is a fraud. If it's actively managed, then managers are charging (more than adequately) on the presumption that they can beat the market, whereas in fact they can't. Almost all investors would be better off in passively-managed funds.

That is Weiss' general bias. He's against the anti-nakedness crusaders because he believes the sort of reforms they propose would undermine the efficiency of markets that he takes as a premise, and because he believes they're often just using their crusade as a cover for their own pump-and-dump schemes. Hence his term, "the baloney brigade" for Bob O'Brien, Faulk, and that crowd.

In this context you can perhaps understand his position on sharesleuth. He's happy to see Cuban short sell -- that's part of what makes markets efficient. He's also happy to have Cuban publicize the reasons for his short selling. His problem is with calling it "journalism," which blurs lines he'd rather leave unblurred and gives ammunition to the baloney brigade, which is always trying to discredit short-sellers by charging that they all do covertly what Cuban is now bragging about doing -- i.e. they buy reporters to badmouth their target stocks.

And no, I'm not Weiss. Nor do I agree with everything he writes on these matters. I do think he has a coherent and important point of view, and of course if you want to discuss his -- or for that matter my -- views on these matters I'm easy to find.

I replied,...

Thanks for the info; I really appreciate you taking the time to provide a detailed explanation.

From what you write, I slot Weiss into the set of economists who want what's called "pure and perfect competition" or something close to it.

For starters, the concept is an imaginary figment not tied to reality. Worse still, its political implementations -- like antitrust law -- try to force people to be free.

The biggest problem is that the "perfect competition" school pretends to be friends of Capitalism, saying that Capitalism is based on perfect competition. This is false: Capitalism is based on the concept of individual rights. Having an economics czar telling us we must be free, and telling us that he is not going to let Mark Cuban influence our little minds is worse than patronizing and presumtious. It is dictatorship with the garb of Capitalism.

To which, Christopher responded..

That's a bit of a stretch, SN. Leaving aside the differences between the ECMH on one hand and the "perfect competition" models for products and services to which you're alluding on the other ... Weiss isn't an official of the state. He isn't threatening to put Cuban in prison.

At most, he is suggesting that people voluntarily engage in a sort of shunning, leaving Cuban's sharesleuth unread. Which is very different. He is exercising his freedom in a way that constrains Cuban's not at all, since clearly Cuban has no right to expect an audience for sharesleuth.

I think you are right, though, to imply that Weiss' understanding of ECMH may be a bit mechanical. I said as much in a review I wrote of his second book. I'll send you a copy of the review if you're interested.

I did not say Weiss was a government official. However, the philosophy he espouses comes from the same economic ideas that the government officials have used repeatedly to throw businessmen into prison. I fully support Weiss' right to say what he likes. As for private shunning of, I disagree; but people are free to shun it if they like... so much the better for the ones who don't!

Chris alludes to the difference between the threories of ECMH and "pure/perfect-competition". In fact, they share a genus; any attempt to ditinguish between them is not relevant to the context at hand. Further, these rationalistic economic theories have the following life-cycle in our modern-day mixed-economy:
  • their early proponents start as "positive theories" (i.e. descriptions of reality), even though they actually do not reflect reality. Their proponents instead insist that the theories represent some type of platonic essence of reality.
  • next, they begin to morph into "normative theories" in an ethical sense: where people start to claim: this is how these markets ought to behave
  • finally, someone suggests this "good" market behavior should be made into law. Worse still, some prosecutor claims that it already is law, and goes after some target

Here are two articles by George Reisman, discussing the ides of platonic competition: Part 1 and Part 2