Archive for July, 2009

CFA

July 28, 2009

Thank god it’s over, at least for now. I’m glad to see that the months spent preparing for this thing and living like a hermit in all of May paid off. The pass rate for the June exam was an astoundingly high 46%, compared to previous years when it hovered in the ~35% range. I won’t start studying for the level II until October-ish. The level II is supposed to be a real bitch, but at least it covers some interesting topics like econometrics, Miller-Modigliani and Black-Scholes-Merton. Too bad all have very severe practical limitations.
Level 1: Pass

The table below illustrates your subject matter strengths and weaknesses.   The three columns on the right are marked with asterisks to indicate your performance on each question or topic area.

Multiple Choice

Q# Topic Max Pts <=50% 51%-70% >70%
Alternative Investments 8 *
Corporate Finance 20 *
Derivatives 12 *
Economics 24 *
Equity Investments 24 *
Ethical & Professional Standards 36 *
Financial Reporting & Analysis 48 *
Fixed Income Investments 28 *
Portfolio Management 12 *
Quantitative Methods 28 *

What if half of humanity were sterilized?

July 28, 2009

Tyler Cowen entertains that question here. As an admirer of Burke I enjoyed David Brooks’ response (second link, below the text block):

http://www.marginalrevolution.com/marginalrevolution/2009/07/mass-sterilization.html

The mass sterilization of half of humanity

Bill, a loyal MR reader, asks:

A freak solar event “sterilizes” the half of the planet (people, animals, etc) facing the sun. What happens?

Putting aside, the “which half” question, I would predict the collapse of many fiat currencies and the immediate insolvency of most financial institutions.  Who could meet all those margin calls?  Unemployment would exceed 20 percent and martial law would be declared, food rationing and guys with rifles on street corners.  The affected countries would take in larger numbers of immigrants, especially young immigrants from poorer countries, to keep their societies going and to use and maintain the still-standing capital stock.  Many of those immigrants might be better off in the longer run, especially if they could internalize the norms of the host country by the time the original inhabitants perished.  If you let me “cheat,” I’ll postulate that genetic engineering is used to perpetuate the genes of the original inhabitants.

If a poor country were hit by this blast the eventual result probably would be mass starvation.  There is a chance that social order would collapse across the entire globe, due mostly to contagion effects, multiple equilibria, and bad expectations.

To some of you these mental exercises may seem silly.  Indeed they are silly.  But what’s wrong with silly?  Such questions get at the stability of social order, the sources of that stability, and the general importance of demography and intergenerational relations.  Those are all topics we don’t think enough about.  Because we’re not silly enough.

Further discussion here:

http://www.marginalrevolution.com/marginalrevolution/2009/07/hail-david-brooks.html

Whatever (doesn’t?) Work

July 27, 2009

After much anticipation I checked out the new Woody Allen / Larry David film Whatever Works. Summary: moderately entertaining, but ultimately disappointing. David and Allen are two of my favorite comedians, so perhaps my expectations were unrealistically high, but this movie still fails on several levels. Not only was the film was a re-hash of older Woody Allen clichés, but most of the humor seemed forced. This must have taken real effort considering it starred Larry David.

Let’s make a list of Woody Allen movie clichés:
– Completely filmed in Manhattan
– Laughably implausible older man / younger woman love affair
– Lots of artists and intellectuals who are invariably English/Philosophy professors at NYU or Columbia
– A surprising lack of people who might actually be able to afford to live in Manhattan (lawyers, investment bankers)
– Neurotic Jews
– Obsession with death
– Lack of any music that is not a.) Jazz and b.) Produced after 1940
– Regarding any non-liberal Manhattanite as an otherworldy, half man-creature

Each of these themes also features prominently in Whatever Works. This isn’t necessarily a bad thing, since it’s a formula that has worked well in the past. The setup fails here, however, because nothing seems genuine or particularly unique, and Larry David isn’t enough to help it along. It really feels more like someone decided to create a parody of a Woody Allen movie—maybe this is Woody’s idea of some sort of meta joke? I don’t know. To make matters worse, it really drags in places, which is bad for any film and inexcusable in one that’s only 90 minutes long.

So, why is Larry David not funny? Probably because none of this movie was ad-libbed. He had a few nice one-liners, but 20 minutes into the movie you realize that he’s making literally the same joke over and over again.

Despite all my criticisms, this was still somewhat entertaining. And if you’re a big fan of Woody Allen or Larry David, you’ll probably see it anyway. This would make a decent date movie, just—keep your expectations low.

Larry David, in funnier times:

Art

July 27, 2009

I made the best of last month’s torrential downpours to go with my brother to explore the Whitney museum on the Upper East Side. I had never been to the Whitney before, so I was glad to be able to check another museum off of my list.

My trip there was educational, but mostly in that it made me realize that I really don’t care for at least 75% of modern art (does this make me a philistine?) This isn’t my first experience with contemporary art; I’ve been to the MOMA, the Institute of Contemporary Art in Boston, and the (late?) Rose Art Museum at Brandeis. During each visit, I think I allotted my time as follows:

50%: Trying hard to appreciate the exhibits. Generally Failing.
25%: Shake head; wonder why exhibit x is considered Art. Ask self if I need to take some more art history classes.
25%: Find something novel and somewhat thought provoking., such as this fellow:

http://en.wikipedia.org/wiki/Tehching_Hsieh

Even though I’m a non-artist, I can still appreciate the uplifting and motivational power of going to a place like the Met and seeing paintings form Remington, Homer, etc. They always make me feel glad to be a part of a species that can create something so beautiful. For the most part, I can’t say that my trips to these contemporary art museums have made me feel particularly uplifted or invigorated. Occasionally entertained, but not much more than that.

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Match.com Adventures

July 24, 2009

90% of the profiles on Match.com look like this:

I just graduated from [UVA/W&M/Virginia Tech/JMU/UMD] and work for [a Congressman/an HR Firm/Political Organization]. I’m a fun loving girl who like to try new things and go on adventures, but sometimes I also really enjoy just staying in and watching American Idol. My family and friends are my life! I love my girls so much! I”m spiritual but not necessarily religious.

Charity

July 23, 2009

I stumbled across two routine DC sights in Dupont Circle yesterday – a couple of impossibly cheerful liberal do-gooders who asked if I had time to hear about their global anti-poverty organization, and a homeless person who asked for change.

What was interesting about these encounters is that both occurred within 30 feet of each other. It’s as if a team of sociologists put them there to examine how responsive I would be to helping the homeless person at my feet or the poverty stricken person 6,000 miles away.

I very often feel guilty about not giving change to homeless people, at least on those rare instances when I have loose change in my pocket. Sure, the person may use that money to buy malt liquor and crack, though even if he only uses 50% of his money on food, I still have the satisfaction of knowing that I’m helping to provide that person with sustenance. That’s more bang for my charitable buck than I would get had I given that quarter to the New York Public Library or some other organization. For all the good work that museums and non-profits do, most are not in the business of keeping people alive.

On the other hand, I never stop to talk to people who “Want just a minute of [my] time to hear about [ACLU/Poverty/OXFAM/etc]!!!!” It always strikes me as very intrusive. Why should I be made to feel guilty about living in America every time I step outside of work to go to Cosi?

Am I justified in giving loose change to homeless people but not listening to people who want me to donate money to Africa? Probably not. As is often the case, my moral intuition here is likely the opposite of what I “should” do from a strictly utilitarian perspective. The people living in mud huts thousands of miles away die of diseases that can be prevented by mosquito netting and penicillin. They also suffer from poor nutrition that can be made better for pennies. As bad as many homeless people have it in DC, they at least have access to a wide variety of social services and people like me, who occasionally hand over a nickel. Plus, giving money to a charity (hopefully) guarantees that none of my money will go to malt liquor and crack—no deadweight loss!

Adam Smith had it right in the Theory of Moral Sentiments:

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an       earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment…And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened…If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.

Will I change my attitude towards the two groups of people who ask me for money on the street? Probably not soon: it’s difficult to rehabilitate moral intuitions. I may be more inclined to make donations to such organizations online, though.

Hello world!

July 18, 2009

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