30 January 2011

The powerful anti-takeover effect of staggered boards

Bebchuk et al show (1) there's an antitakeover effect and (2) there's
reduced shareholder returns in companies with staggered boards:
http://bit.ly/eaURWE .


Skill or Luck?

http://bit.ly/h1jpcZ . van den Steen says this in the abstract: "This
paper shows why... rational agents tend to
attribute their own success more to skill, and their failure more to
bad luck than an outsider." So, rational agents have biases? Isn't
this like saying rational people are irrational?

He also states that if 2 people do a job and you ask each what their
contribution was in percent., the sum is greater than 100%.

My father, who has high blood triglycerides, and my mother visited a
dietician to figure out a diet to decrease triglycerides. The
dieticians asked my dad what percent. of the meals he made. He said
50%. My dad never made a meal in his life. When they left the
dietician's office, my mother asked for an explanation. He said he
made all his breakfasts (cereal and milk) and half of his lunches (a

So this is what I think of when when someone says the sum will be
greater than 100%, and no one in my family would claim my father is


Kellaway on business principles

http://bit.ly/fQYjAa .


Micro and Macro

he meant that macro is a trivial extension of micro. It is the
Austrian economists who are well-known for emphasizing micro:

Here's the economist Bernard Guerrien on micro ("Is there anything
worth keeping in micro?"): http://ping.fm/uCeOR .

You can't really say that Guerrien and the Austrian economists are
opposed 180 degrees, since both dislike the emphasis on mathematics,
which they think encourages people to accept ideas uncritically mainly
in the form of the assumptions that are made when making the



Depression is common. You'll probably deal with someone, perhaps even
yourself, who gets depressed.

Medicine often doesn't work, unfortunately.

There's some evidence that depressed people develop a rut in their

Here's a categorization of the cognitive distortions, which is like a
set of cognitive biases, that depressed people develop and use,
consistently and wrongly: http://bit.ly/dZMijx .

One form of treatment is to train people's thinking to aboid these
forms of thinking. It works about as well as medicine.


Martin Luther King Day

Here's his famous Letter from a Birmingham Jail:
http://ping.fm/1Ejul .


Who's got the worst Gini coefficient?

USA, Tunisia, Yemen, Egypt?

The Answer is here: http://bit.ly/fmjtSy .


Jack Trout and brand diffusion

Here's Jack Trout on brand diffusion, first at GM (http://bit.ly/
ewjh2L ), then diffusion between brands of different companies (http://
bit.ly/g8CHry ).

His points are:

1) brand diffusion is common
2) it's due to muddled marketing thinking
3) it's bad for the company


Ira Glass and the art of storytelling

here: http://ping.fm/RPVJo .

Ira Glass does the radio show "This American Life," which is very very
good. He majored in college in semiotics, whatever that is.


SOTU news: Obama team gets infographic wrong

SOTU is State of the Union, which is an important annual address the
President of the US makes.

Article here: http://bit.ly/dJvpUI .

The main point is that the Obama team was comparing diameters, but
since they depicted circles, it was wrong or misleading. In the
comments, someone writes, "Hey, I think those are spheres, not


25 January 2011

Electronic Medical Records (EMRs)

EMRs are the big thing now in US medical care. President Obama wants
medical care computerized. Some see this as increasing efficiency and
quality; some as another step forward on the primrose path to

Until recently, everyone saw this as costing a lot of money. Companies
selling EMRs basically had a tricked-up billing system. These
companies bundled their software with hardware and on-site training,
then sold the package at a big mark-up. Each practice was looking at
spending $75-80 thousand.

I kept saying, what about SaaS and cloud computing? (thank you, Prof
Esteves and fellow IXMBAers). Well, EMRs as SaaS and data storage via
cloud computing is becoming available. There is training online.
Companies are competing, and...

The price is dropping. Iinstead of paying upfront for software, you
rent it. Now the best deal is $500/month, which is about what I pay
for billing anyhow.

Here is a blog on EMRs and quality: http://bit.ly/i92N6L. I don't
think the blogger has discovered SaaS and cloud computing options


15 January 2011

Does a hospice have negative externality?

Some people think so: http://bit.ly/gyHJ9W.

What exactly is a negative externality and what is not?


I guess we should all pay attention to

catastrophe theory. Tim Harford on why bankers should have paid
attention to Charles Perrow: http://bit.ly/gaC0pn.


The first time I plugged my computer

in in my Spanish hotel, I blew a fuse and lost power for the floor I
was on.

So I was jumpy about plugging my computer in.

Here's an article on different plugs, from Gizmodo: http://gizmo.do/fBeoew.


14 January 2011

Baby Boomer Demographics

In the US at least, we have the demographic phenomenon of the baby-
boomers, born from 1946-1964. In the US, people born in this era will
have a big economic and business impact.

Here is an article: http://n.pr/euaTS2.


First Amendment

I like US First Amendment issues.

Here is good news, bad news: http://ping.fm/7yMoL

"Muslims are frequent targets today, but in the past Quakers were
lynched, Baptists jailed, Catholic institutions burned, Jews
ostracized, Mormons attacked, Jehovah’s Witnesses tarred and feathered
— and the list goes on.

We have learned the hard way that constitutional guarantees of
religious freedom mean little when the majority succeeds in demonizing
a minority and public officials are either complicit or turn a blind

The bad news is that it's happened before, it'll happen again.

The good news is that we got out of it before, we'll get out of it


More economic videos

here: http://bit.ly/dZW1Qb.


Republican report on the financial crisis

Is it biased? http://bit.ly/hNomac.


Where do bad ideas come from?

This is a foreign policy-oriented article and I don't think it exactly
answers the question, but he does ask an important question, I think:

Walt is a professor of international affairs at Harvard.

He also talks about the "domino theory," which I mentioned a while
ago. It's a simple easily-visualized theory, which is why it sticks
around. It has a record of being seriously wrong several times in
recent history. If fact, if you have a bad idea, then you realize it,
you can always say, "Well, at least it's not the domino theory."


The rich get richer

also known as the Mathew effect: http://bit.ly/ftL47t. The article the
blog refers to is gated.


Newspaper death watch dot com

here: http://ping.fm/1U7Wm I think this is US newspapers


13 January 2011

Who's afraid of the Hubbert's Peak?



What's up with Professor Fernandez Cantelli?

Article here: http://bit.ly/dN0izC.

Video here: http://ping.fm/7gckY


What's up with CHINT?

Newletter here: http://bit.ly/hGcyz5.


Visual Illusion

Silencing: http://ping.fm/afHd9


Business Models

This is from Ramon Casadesus-Masanell: http://bit.ly/eVi2c5. His main
point is that a business model may work well in the lab or in the
abstract, but not work well in real life. He also emphasizes the
winner-take-all model.

The picture the editors chose for the article is great, but I can't
make it fit the article. Here is what the picture makes me think of
("Things fall apart, the centre cannot hold"):


Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.
The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

WB Yeats



Their logo has changed: http://ping.fm/49Oy4


Grameen Bank Update

and analysis by Eric Falkenstein: http://ping.fm/oiVha


Chronic Fatigue Syndrome

There was a report in Science suggesting that a retrovirus, XMRV, was
the cause of chronic fatigue syndrome. It was cultured from some
patients with the condition.

Now, further studies have cast doubt on that hypothesis (http://bit.ly/

This happens a lot-ideas that look promising in early studies fail in
subsequent studies.

If I weren't a born cynic, I'm sure that being in medicine would have
made me one.


Corporate Guff

If you are not a native English-speaker, you may worry that, by
speaking and writing, you butcher the language. Anything you do is
small compared to what corporate executives do every day. There is
also the suspicion that their output is the result of confused
thinking. Here is my favorite, Lucy Kellaway, on her corporate guff
awards for 2010: http://bit.ly/fOeHaP.


Economics and Partying

They are not mutually exclusive: http://gaw.kr/i2ZaqM.

More, this time on real estate, economics and partying: http://gaw.kr/eTTGwQ.

Who knew economists lead such full and interesting lives?

I got all this from Jodi Beggs's blog: http://bit.ly/h9g4OW. And
Gawker of course.


Publish and Perish

Let's say that you DO discover something and publish it. What happens?

The graph here shows that there's interest initially, then it dies
out: http://bit.ly/fYvBit.


Drinking and grades


More study in this area is needed. Extraordinary claims require
extraordinary evidence.


Transparency International's Corruption

Perception Index (CPI)

is here: http://bit.ly/gKDzTq.

They use "corruption perception" measurements because corruption is
too hard to measure.

Still, Zimbabwe scores better than Russia. To me, that means their
measures are at least a little flawed. I read an economic analysis
that stated that, when corruption is high, voters, if they are
allowed, will tend to vote for smaller government. I assume the
reverse is true, if corruption perception is low, voters will tend to
agree to expand government. If and when I find that link, I will send

I wouldn't advise, though, blogging about corruption in state-owned
companies if the perception is that corruption is high: http://bit.ly/h9vEA1.


FCPA Enforcement Action List

here: http://bit.ly/guJtzu.

Not just US companies.


How to Fix a Broken Marketplace



Housing Bubbles

The implication is that governments in general are pursuing policies
to encourage home ownership. This leads to an increase in house
prices, a bubble.

No word on how to figure out when the bubble will pop.

They present housing prices over time in kroner and house prices over
time in gold. (http://ping.fm/yY1UI
I would lilke to see house prices compared to rental costs, since this
is the economic decision people have to make.



The last paragraph of this blog (http://bit.ly/dHPzem) is an economic
analysis explaining why companies use Robo-Signers.


Spanish economy

Here is a report on the Spanish economy from NPR (National Public
Radio): http://n.pr/gAbQIB.

The journalist talks to Santiago Carbo Valverde (http://www.ugr.es/
~scarbo/), who is a professor of Economic Theory at Universidad de
Grenada and is a Valencia fan (if that explains anything).

His theory is like a domino theory.


Improved MIT OpenCourseWare



Customer Service in Banking



Margaret Whiting

sings: http://n.pr/fzkRDo.


News from Romania

You may be amused at what the news reports here in the US about your

From Romania, there's news of drunk birds falling dead from the sky
(http://n.pr/gw8nwS) and witches putting a hex on government as their
earnings will now be taxed (http://bit.ly/ffFb4Z).

To be fair, dead birds falling from the sky is a popular story now.
There were a lot of dead birds in Arkansas, and the cause was not
known. I don't know if they checked blood alcohol levels.

By the way, if you're in the US and felt to be possibly driving drunk,
you don't have the protection of the 4th or 5th amendments. Mothers
Against Drunk Driving (MADD) has pushed through legislation that
eliminates the protection afforded by these amendments in regards to
drunk driving. These amendments are in regards to self-incrimination,
and search and seizure.

Nothing in the law about birds. They still fly free. If a dead bird
falls from the sky and hits a schoolchild, probably there'll be some


What is each state known for?

Michigan=freshwater shoreline, golf courses. (They were kind to us)
West Virginia=toothlessness.