Friday, March 21, 2008

Universities and bureaucrats

Some of the reasons why I'm considering business career instead of academic one is the bureaucracy I found so far in every university (UCSD has a b., but it seems to work better than usual). Most of the bureaucracy is self-inflected (ie., created by the institution itself), but not all. The sheer stupidity of most administrative workers, though, is clearly not necessary and drives me crazy. I will give you an example based on a real story - my first grant.
My boss told me to apply for a GAUK grant (Charles University grant agency, grants for its students). I did not need the money - I'm doing theory, I need a pan and paper (or steamy bathroom with mirrors). Yet, it is good to have a grant on your CV, especially if you apply for a grant, and one needs to start somewhere.
I really did not need the money, so I wrote it carelessly. My colleagues needed the money, so they wrote it carefully. I won. I got the money for calendar year 2007, and they were available in June 2007. Quite late for summers school of summer conference, especially because I was leaving to San Diego in September and had to be present in Prague in August for visa and (an)other paperwork.
Nevertheless, I was able to use the money. The thing is that there are always strings attached to the grants, so you can't really use the money the way you want (or you consider moral). But you certainly have to use it all, no matter what.
The "fun" part comes now. I have to write final report (which I knew) and so I did. The deadline set by university is April 1, by faculty March 25th and I was informed about the latter. However, the CERGE-EI decided that it's students are stupid and thus they need to submit the final report a week earlier to CERGE-EI (it's not a faculty). It did not really tell anybody - they posted information about new round of grants (for 2008) in October 2007 (five months ago!), to which they attached a Word document, at the end of which they posted one line saying that the deadline for final reports of the previous round is March 17.
In contrast to the faculty (FSV), they did not bothered to send an email about that. Instead, they waited till the deadline was over and then they sent a threating email to us who missed the deadline (AFAIK, all of us).
Moreover, they required that we submit three copies in print and a CD/floppy disk in person. This is not only impossible (I'm in San Diego, and I really don't have $2,5000 to spare to get right now to Prague), but utterly ridiculous. The report for faculty and university is to be submitted via very simple web form, it is about 2 pages of text. If you send it by email, they can print it by pressing "Print", they don't really need you to bring it.
So I'm supposed to fulfill deadline I wasn't told about, that has no standing in the grant contract, that is utterly stupid and I'm being threatened that if I don't do it, something bad happens.
I don't want to be bothered in my life with things like this. I will have to deal with government, which is equally stupid and similarly inefficient, I don't need to meet another group of useless people (ineffective administrative workers) and their stupid rules.
P.S. Why am I so sensitive about a missed deadline? I don't know. I probably think that the world would be a better place if all people did the things they are supposed to do in time. I certainly try hard to do that. But it requires that I'm told about the deadline.

Thursday, March 20, 2008

Number of the day

The number is 900,000. It's the estimate of the number of US citizens on the "US Terror Watch list." Source: ACLU.

The Crisis

It keeps getting better and better. First reports of negative repo rates, today. Another good question by Paul Krugman.

On more optimistic side (with a inflation warning), Jeremy Siegel, via Megan McArdle :

Wednesday, March 19, 2008


The USA is infamously known for its love of litigation. The reason obviously is that there is no rule "the loser pays" which we have in Czech Republic (probably EU in general). Moreover, if you are poor enough and cannot afford a lawyer in a civil suit, well, bad luck, you lost. It is easy for a corporation to threaten you, because they can have 15 lawyers for a few hundred thousand of dollars. Your only "protection" is that there is no reason why they should do it.

It reaches levels I could not possibly ever imagine. Read this:

"Voting machine manufacturer Sequoia has sent well-known Princeton professor Ed Felten and his colleague Andrew Appel a letter threatening to sue if New Jersey sends them a machine to evaluate. It's not clear from the letter Sequoia sent whether they intend to sue the professors or the state — presumably that ambiguity was deliberate on Sequoia's part. Put another clipping in your scrapbook of cases of companies invoking 'intellectual property rights' for bogus reasons." Sequoia seems to be claiming that no one can make a "report" regarding their "software" without their permission.

Phishing attacks

There has been a huge wave of phishing attacks again the largest bank in Czech Republic. I'm on the list and it certainly interesting to monitor them. Some of them are in English and thus doomed to failure. Others are written in perfect Czech and their content makes them appealing. For example, their warn against other attacks (yes, I know that this is not an official message).
But the best are translated by machine. Note that Czech is very difficult and machine translations are ridiculously funny. The latest email is probably the best

"Drahoušek Zákazník,

Ceska Sporitelna docasný prerušit tvuj úcet."

Which is something like

"Sweetheart customer

We temporary account yours suspend" (hard to translate, I exaggerate).
I have to say that I'm still looking for a bank to call me sweetheart in a mass email.

Tuesday, March 18, 2008

Krugman Story

Paul Krugman, in an old article talks about a beautiful (for an economist) story (originally published by Joan and Richard Sweeney in the Journal of Money, Credit, and Banking in 1978).

The Sweeneys tell the story of--you guessed it--a baby-sitting co-op, one to which they belonged in the early 1970s. Such co-ops are quite common: A group of people (in this case about 150 young couples with congressional connections) agrees to baby-sit for one another, obviating the need for cash payments to adolescents. It's a mutually beneficial arrangement: A couple that already has children around may find that watching another couple's kids for an evening is not that much of an additional burden, certainly compared with the benefit of receiving the same service some other evening. But there must be a system for making sure each couple does its fair share.
The Capitol Hill co-op adopted one fairly natural solution. It issued scrip--pieces of paper equivalent to one hour of baby-sitting time. Baby sitters would receive the appropriate number of coupons directly from the baby sittees. This made the system self-enforcing: Over time, each couple would automatically do as much baby-sitting as it received in return. As long as the people were reliable--and these young professionals certainly were--what could go wrong?

Well, it turned out that there was a small technical problem. Think about the coupon holdings of a typical couple. During periods when it had few occasions to go out, a couple would probably try to build up a reserve--then run that reserve down when the occasions arose. There would be an averaging out of these demands. One couple would be going out when another was staying at home. But since many couples would be holding reserves of coupons at any given time, the co-op needed to have a fairly large amount of scrip in circulation.
Now what happened in the Sweeneys' co-op was that, for complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple's decision to go out was another's chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.

In short, the co-op had fallen into a recession. Since most of the co-op's members were lawyers, it was difficult to convince them the problem was monetary. They tried to legislate recovery--passing a rule requiring each couple to go out at least twice a month. But eventually the economists prevailed. More coupons were issued, couples became more willing to go out, opportunities to baby-sit multiplied, and everyone was happy. Eventually, of course, the co-op issued too much scrip, leading to different problems ...

The story is interesting on so many levels, so reading the whole article is probably a good idea. You can probably use the story to defend the idea that all current problems are monetary and that issuing more coupons would help. Since the story is so cute, someone might buy it.

But I won't. The current problem is not that we all have too much money we prefer to hold. As far as US citizens are concerned, it is exactly the opposite. Let's continue with the babysitting story: there are two groups of people. One of them (US) spent all their coupons and borrowed some more and spent those, too. The other group of people took this coupons and baby-sit for them. What the second group now wants is the opportunity to make the first group baby-sit. Printing more coupons and giving them to that group won't solve the problem, it will merely postpone it. Without coupons, first group cannot trade inside (monetary problem), so more coupons help them. But most of all, they will eventually need to repay the second group. Pilling some more debt may make things go smoothly for a while, but will also make the hangover much worse.
I think USA is looking for a big crisis. Fed may postpone it for a few years, but when it comes, it will big. It will be needed to teach Americans that savings account is not a joke.
P.S. I'm probably wrong. Maybe Americans consume appropriately (based on their expected life-time income), in which case it should be OK. Maybe weak(er) dollar will help the export and industry in the US so that no big crash will be needed. Maybe

Monday, March 17, 2008

Bear Sterns and JPMorgan

For those who don't want to read all the details, here is the picture that summarizes what probably happened:

Notice two things. First is the green little text in the left upper corner (yeah, 10% is nice) and the jump in the graph. Well, this happens if you buy what cost $170 two month ago for $2.

I can't find other name than "theft", but opinions obviously differ.

P.S. I accept that it is very hard to know what to do, given the "success" of Northern Rock. So maybe this is not that bad after all. Yet it still looks like JPM get itself a pretty good deal.

Dog's life

Simple hearing test reveals what I knew all along:

Or maybe you are a mosquito, you certainly can't be human.

The highest pitched ultrasonic mosquito ringtone that I can hear is 21.1kHz
Find out which ultrasonic ringtones you can hear!

Well, either that, or there is something wrong with my computer/headphones.

Sunday, March 16, 2008


If you visit Prague, this is the most important information you will need:

Sanity Check

Writing a dissertation is difficult for many reasons. Primarily, it is very independent, very long-term work with uncertain outcome. It is very hard to evaluate progress or lack thereof. And even if you notice lack of the progress, it is hard to really know why.
You may be doing progress faster then usual yet fail to notice, you may be working on the wrong idea/topic, or you may be simply too stupid to produce anything original and useful.
I wasn't happy with my progress from the very beginning and it was driving me crazy for a long time. I'm still not happy, but finally I found a way how to keep myself sane. Here it how it works. Remind yourself that

1. You are (among) the best. Yes, you are - no matter how do you feel about it, you are easily in top 1% of the world population in terms of education, intellectual ability, knowledge and/or future income.

2. You can do it. Seriously, most people finish and you probably know plenty of those whose research is appalling by your standards. No matter what you produce it will be better than that, which is more than enough.

3. End is close (this helps if you are at least in the middle). It does not seems so right now, but you can probably think of steps you need to take to finish. Split the task into small pieces, make sure that the timing is reasonable and get to work. It will be over sooner than you think. Remember, the time is running faster in the second half.

4. Quality matters, but you need to choose the right scale. You have read hundreds of papers, most of them published in the best journals or written by the "gurus" of your niche. Don't expect that your first paper will be as good or produced as fast as papers written with 20 years of experience. Strive for quality, make sure that your work makes basic sense, but remember that most than 1/2 of the publish research is never referred to.

5. You are living the worst and the best time of your life. On one hand, you are totally independent. If you take a day off, most likely (depends on your field) nobody notices. Even if you take a week of, it would be OK. On the other hand, you are your own boss and you can be pretty tough, can't you? Also, you don't have any money. Don't worry, there is probably plenty of money waiting for you in the future, but you will have no time to enjoy them.

6. It is enough to finish just this part and the rest will be easy. Choose a specific goal, finish it and then choose another one. It will be getting easier and easier. First paper is the most difficult.

7. Find a co-author, ideally not your adviser. Dissertation committees don't like papers co-authored by your adviser, but other students as co-authors are welcomed. Find one for at least one paper, possibly (depends on your school and your job market goals) two. If you get stuck, they will help you to move along and produce something. If they are more experienced than you, even better. You will learn by doing and finish a part of your dissertation along the way.

8. Visit presentation by other graduate students. It helps to keep you informed how they are doing and you never know when you meet even bigger looser than yourself and thus improve your self-esteem.

Thing I did not do but that can help a lot.

9. Finish first paper as soon as possible. Nothing helps more than to know that 1/3 is over. Seriously. If you have 3 papers in various stages of progress, but none of them published, it feels like you have nothing! (I know, I live it every day). Focus on publishing one paper, if it is possible (and makes sense).

Repeat the previous points to yourself as often as needed, focus on those that help you most. And relax, it's fun. Or perhaps, it will look like fun when you will be 60 years old.