ironphoenix: (academia)
( Jul. 30th, 2014 12:34 pm)
This article illustrates core problems with corporate personhood pretty well.
ironphoenix: (so deep)
( Dec. 12th, 2010 11:01 am)
The Globe and Mail published an interesting article in which the author advances a proposal to "guarantee everyone in Canada $20,000 a year." There are a lot of good reasons for this kind of approach, not least being that for at least some people, it would cost us less overall. Admittedly, certain people would require additional help in managing this money; there is a small proportion of people who, for one reason or another, really can't handle their own finances, and who would benefit from more structured programs, but the second link shows pretty clearly just how tiny a minority that is. The stereotype of welfare and other aid recipients being guzzlers at the governmental teat is by and large just plain wrong, and the obstacles put in their way by both procedures and attitudes do little more than discourage and demean people and use up time and energy they could put to better use gaining skills and taking care of themselves and their families.

If we try this guaranteed income idea, though, a tricky and possibly unexpected problem rears its head. Fortunately, I think it may be solvable: read on! The details are devilish! )

Overall, it seems to me that a guaranteed income is probably possible, and even worth trying. Integration of federal and provincial planning would be immensely useful in making it happen, which sadly makes it much harder to achieve in practice. Nevertheless, I can hope that someday, when Harper's Conservatives get replaced by a government that cares about Canadians, we may find someone with the political guts to give it a go.
From The Economist:
Between 1974 and 1996, Bangladesh turned a district ... into a giant demographic experiment: some villages and households got family planning, others did not. According to one study of the results, fertility in the areas that received help declined by around 15% more than in those that did not. And over the two decades of the experiment, indicators of the well-being of women and their chidren--health, earnings, household assets and so on--were all higher in the villages that got the planning.
The name of the district? Matlab.

Yes, they did a MATLAB simulation in demographics, for real.
ironphoenix: (I love my work)
( Sep. 7th, 2009 11:18 am)
Remember those securitized subprime mortgages?

Well, here's a contender for the Next Big Thing: securitized life settlements.

The core idea (from the linked article) is this:
The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.
There are a few significant problems with this.

First, and most frightening, there is now a business case to be made for shortening people's lifespans, as if corporations and individuals haven't shown themselves willing to do some pretty dirty things (preferably using cat's paws) already to augment their profits. The conflict of interests this can raise is not reassuring. Insider trading can take an even more sinister turn, too.

Even without the incentive to stack the deck, this would be problematic: insurance companies will have to roll this into their calculations for premiums, and I think it will push the cost of insurance up. I predict that we'll start seeing non-transferability options in insurance contracts, with pre-specified cashout benefits if customers are savvy enough to demand them, in exchange for a discount on premiums.

The NY Times article emphasizes the risk that overall life expectancy increases could cause highly correlated losses on these investments, which could in turn precipitate another financial collapse: the bankers are tossing around numbers like $500 billion, and if an appreciable part of that abruptly goes missing, the collateral crisis of late '08 could jump right back out again.

In any case, as a rule, when money is being made, it's a good idea to ask where the value is coming from. In this case, it's being cored out out the profits of insurance companies, and you can bet that they won't take it lying down. It'll be interesting to see how the regulatory agencies handle this one!
ironphoenix: (gear)
( Jan. 11th, 2009 09:05 am)
It may not answer quite as much as it purports to, but Dan Gilbert's talk on probability and value is something anyone wanting to make decisions that are at all rational should consider. (Video, about 22 minutes plus a few questions from the audience at the end for a total of half an hour.)
ironphoenix: (I love my work)
( Sep. 25th, 2008 05:39 pm)
Complex numbers have a real and an imaginary part. Complex finance leads to people having real and imaginary dollars, and as [ profile] metahacker eloquently expresses it, the imaginary dollars are a con game which is running out.
ironphoenix: (gear)
( Nov. 27th, 2007 02:38 pm)
M. King Hubbert on energy, growth, and sustainability, in 1974.

I believe that the fundamental assumption of unbounded economic growth will break down within my natural lifetime; I just got sent this, and it's someone with pretty good credentials saying something disturbingly similar a year after I was born.
ironphoenix: (oh no)
( Aug. 17th, 2007 01:39 pm)
Well, it looks like some is happening. [ profile] itlandm brought my attention to a fairly important harbinger of an economic crash: the banks don't trust each other to stay solvent. For details, see these three articles from The Economist.

ETA: This is looking serious. Here are a few more references from other sources:ETA some more: The Canadian situation is summed up in this article from The Globe and Mail.

ETA one (last?) time: The US Federal Reserve dropped its preferred rate by 0.5%. This is stabilizing markets, but I expect it to pull the US dollar down. This is, I think, a painful but prudent and necessary move on their part: the greenback is overvalued, and this will help adjust it without catastrophic consequences.


ironphoenix: Raven flying (Default)


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