Big Bubbles

It is always a disaster when a bubble bursts. After what happen today, I'm really scared. I'm afraid that the next bubble is close and this time, it will be huge.
[Yes, I think that FED might be able to prevent the burst of this bubble from lasting long and from being too painful, but at a significant costs. These could be either much bigger next bubble, or as Paul Krugman thinks, inflation, or both. Be scared, be prepared.]

US. Election

Everybody talks about it, everybody thinks about it, so am I. Anyway, just for future record, my prediction is that Democrats will loose (yeah, again) and the new president will be Republican.

Presidential Economics

Our current and probably also future president considers himself a professor of economics. Yet, he does not really have any significant publication. His first attempt in recent issue of "Politicka ekonomie (Policial Economics)" gives you some idea how a presidential economics looks like.
P.S.I do not mean to criticize the fact that our president is not a good economists - many presidents are not. I'm making fun of the difference between his self-perception and reality.

Why Czech Blogs suck 2 - an answer

I asked the question why so many well-known Czech Blogs suck (IMHO), especially in contrast to English language blogs.I did not have an answer that time, but I think I might now. It came to me while reading this post.
Some background first. The author is one of the IT businessman in Czech Republic. He did not create anything really interesting, but he was first to enter the market with IT literature, created couple of magazines (see, for example Zive.cz ) and probably made a fortune on that. It does not matter that the quality of products is not appalling (I was working in his firm for a short time, so I have pretty much good idea why). Anyway, the point is that he is a guy who knows IT and made some money.
So he thinks he is smart and understands everything. And he is arrogant (maybe this is necessary for the success, who knows?). In some cases, he is right, his posts are informed (and informative) - when he write about IT. Since he worked in that area for long time, he is likely to know much more than his readers. This is the good part.
The bad part is that he (and other Czech bloggers) think that they understand much more than just IT. Take the post I referred to above. For example, he claims that the governmental revenues are fixed. He clearly has no idea how volatile governmental revenues are, he most likely never saw any statistics. Probably from the fact that taxes are known and fixed, it somewhat magically follows that revenues are fixed, while in fact, they are not. I'm not sure how recent losses at Citi and other banks fit into his mental model - they probably were expected (haha).
Moreover, he criticizes contract he never read. He confuses one-shot bonus for a mutli-year contract with yearly bonuses. I could go on...
The point is not that he makes mistakes - we all do. The point is that he writes arrogantly about something he has no idea about. The reason probably is that most Czech bloggers are coming from IT field. Their advantage is probable longer presence on the "market", which allowed them to establish reputation others have yet to reach (see, for example, usually much better informed blog from Pavel Kohout, unfortunately not working anymore). I hope that in the future, one will have a choice from blogs written by experts (or at least informed enthusiasts in the field), not by random guys who offer interesting insight into their field mixed with pure nonsense.

Real world...

Steven Levitt is a big star. Among his famous articles are those analyzing gang members selling drugs and cheating among Sumo wrestlers. See his list of papers for much more.
One would expect that you cannot get more astounding. Well, you would be wrong. His latest paper analyzes prostitution in Chicago. Results are, as usual, surprising. Condoms are rarely used (25%), yearly wage is about $20,000 (I guess they should have a union to reduce supply) and pimps are, in fact, a good thing for the prostitutes. Police seems to look away if you give them a freebie. But the craziest part is at the very end. I have to quote, because this is just unbelievable.
Last client's report "revenue $200, father & son; inside client's house while mother watched and masturbated".
Well, Levitt may be a superstar, but I have serious doubts about his data. Or about this world.

Question of the Day

Why are people concerned about Google "lock-in", when one of the products when Google could enforce lock-in (Gmail), all possible forms of access are available (POP3, IMAP and forwarding). Contrast this to Yahoo and Microsoft, who do not offer forwarding (which means you are stuck with them for the rest of your life, in one way or the other.) Yahoo at least allows you to forward you messages for a fee ($20/year). Still, Google wins in terms of quality, so he does not need lock-in.

The truth in the credit crisis (UK version)

Watch this:

It is funny. And true.

Hard to believe

When bubbles burst (like the one with real estate), you will find many people surprised. Most often than not, even the "experts" are surprised. In fact, some of them made predictions 1 year ago so poorly that you can hardly believe it.
Most people do not watch "old news", but "old predictions" are much more fun. Invest 5 minutes to see the second video on this webpage TigerHawk. In the first part (1 year old), the only guy who had an idea what is about to happen was yelled at by jerks repeating the same old mantra "prices will go up", while he identified correct trends and reasons behind them. In the second part (current), those guys who were wrong try to cover it up.
This suggest what is wrong with current media and their "advices". People who know (and think) rarely go there and even if they do, they are yelled at by people who are loud, but do not think.
So if you cannot tell who is expert and who is not, listen to Dilbert. He may be sometimes wrong, but at least he is funny.

What defines Google?

I think nothing does it better than this:

"What sets Google apart, Schmidt told me in another conversation, is that although people like him always assumed that 'Google would be an important company, the founders always assumed that Google would be a defining company.' He remembers a day in 2002 when he walked into Page's office and Page started to show off a book scanner he had built. 'What are you going to do with that, Larry?' Schmidt recalls asking. 'We're going to scan all the books in the world,' Page replied. Eventually, Google began to do just that."

Hat tip to Google System and New Yorker

Two Economists

Once upon a time, there was a little country with its little problems and little fights. In that country, presidential elections were coming. Two (not-so)-little economists wanted to become a presidents.
And after you wake up, you may realize, that one of them is not an economist. He is a professor alright, he even has two publications in the SSRN. Yet, no dwarf would be surprised to find out that nobody has ever downloaded either of them. (Last accessed: January 7th, 2008).
[Not being an economist would not be a disadvantage in the presidential elections. Not being and economist and calling yourself such is. ]
[For a probably more relevant summary of one's work, check Scholar.google.com and compare the types of publications.]