Disqus - Latest Comments for wagthedog1

Re: The Sovereign Debt Crisis and Confirmation Bias

wagthedog1 — Sat, 14 Jan 2012 19:03:25 -0000

Likewise for all the Greeks I've known, though this has been limited to academia so standard disclaimers with respect to representative samples apply.

Re: The Sovereign Debt Crisis and Confirmation Bias

wagthedog1 — Fri, 13 Jan 2012 19:30:36 -0000

Like you I've given up fighting people's biases especially as evidence mounts that overconfidence and self-deception have their own built-in reward system, (Overconfidence, Self-deception, and Social Signaling), are a stable phenomena from an evolutionary game theory perspective, and that any "handicap" resulting from the downside risks are also seen by potential mates as indicative of strength.

Basically, you are fighting a losing battle on all fronts, which irrepressibly will include your own. The best one can hope to do is to minimise the damage.

Re: American Vs. International News: Time And Newsweek

wagthedog1 — Sat, 26 Nov 2011 08:55:15 -0000

Oh how little has changed since then http://bit.ly/tnu8Or

Re: Predicting the future of policy making

wagthedog1 — Tue, 22 Nov 2011 04:52:38 -0000

"society will systemically evolve..."

Society better hurry up with its evolving. Given an individual's propensity to brush aside one's better judgement in favor of groupthink and polarising ideology, the result is a society that is about as smart as a slime mold when it comes to avoiding disasters.

"Do not underestimate the resilience of people, adaptability of markets,
survival of the fittest and the general theory of evolution"

There is a problem with arguments that apply the same principle (evolutionary theory) to vast differences of scale (cell, organism, herd, society) in that there is always an implication, or even an assumption that improvement applies naturally to all levels of abstraction. What improves the cell, improves the organism, improves society. Anyone familiar with the problem posed by the evolution of altruism knows how dangerous it is to rely on such assumptions. A mutation that improves a predators ability to hunt will quickly spread to the rest of the herd through selection pressure, yet this doesn't guarantee against the eventual collapse of the herd as the improved hunting efficiency rapidly decimates the prey and results in a shortage of food. Successful multi-celled organisms outlive the cells of which they are constituted via a strategy that exploits survivorship bias -- continuous renewal by rapid cell replacement. The organism would hardly notice if both cell death and replication rates were to suddenly double. The fear is when a successful society deploys such a strategy against its own constituents. For instance, one guaranteed way to increase the average wage of the country is for the police to replace pepper spray with assault rifles in all subsequent encounters with unemployed Occupy movement participants.

Re: AIG chairman says that you just don’t get it

wagthedog1 — Sat, 19 Nov 2011 04:08:06 -0000

Excellent use of the false dichotomy - there are only two choices:

(a) bailout AIG in such a way that tax payers must suffer for any and all losses
(b) let AIG fail in such a way that causes financial Armageddon in a collapse so rapid that no government can respond quickly enough

All other options are off the table, because I say so. Since (b) is so horrible then (a) must be the right choice for everyone concerned. QED.

Re: News From The Future – How To Get $12 Billion Of Gold To Venezuela

wagthedog1 — Sat, 27 Aug 2011 05:11:05 -0000

Excellent idea. And they wouldn't even need to mail it. Recent video evidence shows that there are more than enough poor people already living in and around London who are more than willing to cart away heavy expensive items from secured locations.

Re: News From The Future – How To Get $12 Billion Of Gold To Venezuela

wagthedog1 — Sat, 27 Aug 2011 05:07:15 -0000

For this to work, the Atlantic ocean will need to be replaced with
http://en.wikipedia.org/wik...

Re: News From The Future – How To Get $12 Billion Of Gold To Venezuela

wagthedog1 — Sat, 27 Aug 2011 05:01:21 -0000

Wait for helicopter Ben Bernanke to start Quantitative Easing III. Wait for gold to sky rocket to US$4000 on ounce. This effectively halves the problem, as $12 billion dollars worth of gold now weighs less than half as much as before.

Re: A personal anecdote on why the facts don’t really matter

wagthedog1 — Mon, 06 Jun 2011 19:09:57 -0000

The graph looks about right given how the medical equipment market works globally:
http://www.npr.org/template...

My bias is that for MRI machine manufacturers to sell to Japan at such low prices and still be a viable business, they need to be able to over-charge the Americans -- in effect, the US is subsidising the rest of the developed world's healthcare. To ensure the NHS has a future, I hope America never gets true single-payer socialised healthcare.

Re: Consistency

wagthedog1 — Tue, 10 May 2011 14:26:31 -0000

"A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."
-- Ralph Waldo Emerson, Self-Reliance, US essayist & poet (1803 - 1882)

"Consistency is the last refuge of the unimaginative."
-- Oscar Wilde, Irish dramatist, novelist, & poet (1854 - 1900)

"What, then, is the true Gospel of consistency? Change. Who is the really consistent man? The man who changes. Since change is the law of his being, he cannot be consistent if he stick in a rut."
-- Mark Twain

"Consistency is contrary to nature, contrary to life. The only completely consistent people are dead."
-- Aldous Huxley

Re: Confirmation bias as a feature, not a bug: The facts don’t really matter

wagthedog1 — Fri, 06 May 2011 16:47:27 -0000

A companion "feature" to confirmation bias is what has been described as the backfire effect -- a sort of disconfirmation bias. When presented with evidence that contradicts our beliefs, we expend disproportionate efforts at attacking it, discrediting its source, and often end up more convinced that our beliefs are correct. This type of argumentation was quite common in the midst of credit bubbles.There's a whole deck of strategies that can be applied to dismiss any type of corrective facts.

The broader issue of winning arguments has surprisingly little to do with having facts on your side. Robert Cialdini's, Psychology of Persausion, categorises the techniques used into six groups:

Reciprocation - make a small gesture that the other party feels they are obligated to return in kind. The "free" gift leads to all sorts of irrational decision making.

Consistency & commitment - small commitments can often be built upon toward a larger decision. 409 scams depend on this. People hold onto a shrinking investment far too long because of this.

Social proof - in an ambiguous situation, one looks to see what everyone else is doing. This can lead to highly correlated market behaviour.

Liking - we tend to agree with people we like. Charismatic people are highly persuasive.

Authority - appealing to authority is a common technique in debates. Having a Nobel Prize winner on your side is always a good thing. Each competing economic ideology has their own favoured authority figure.

Scarcity - I've lost count how many times the finite size of the British Isles has been used to justify why house prices must always go up.

Re: Do The Facts Really Matter?

wagthedog1 — Thu, 28 Apr 2011 19:59:33 -0000

The conspiratorial beliefs of the Birthers are further lubricated by two related effects:

1. Chaos and disorder causes predjudice

2. Lacking control leads to false conclusions, often through a process of over-eager apophenia

Very easy to see why the current environment is very favourable for both phenomena.

Also, humans not only prefer cockiness to expertise. Cockiness is often perceived as expertise, thanks to our strong tendency to (mistakenly) associate charismatic narcissistic traits with traits of cleverness and creativity. This is why rational caveat-ridden conditionally-probabilistic scientific argumentation will never gain any traction in the modern media world.

All of which begs the question, how on earth did such a flawed species ever produce this energy-intensive advanced technological civilization? We seem to be little better than Skinner's pigeons. My belief is that there is actually an evolutionary benefit for a socialised species adept at spreading irrational beliefs, as opposed to a purely rational thinking one. The environment that is favourable to the former is one in which there are many dangerous risks that can potentially yield huge societal rewards -- risks like drilling for highly lucrative but dangerously toxic petroleum, or going into debt to pay for biotech R&D that may never yield anything of value. The purely rational species would tend to err on the side of self-preservation by avoiding reckless ventures, but missing out on any of the huge rewards. This would be all well and good if such a society were the only one on the planet, however in the real world many societies are competing. In such an environment, the risk averse society seldom ends up on top. Rather it is the society that is most efficient at convincing its own members that a reckless risk with a huge payoff is a good idea, that will most likely dominate. It is also true that such a society may also end up impoverishing itself if not destroy itself entirely. But ultimately natural selection is a numbers game, and only one reckless irrational ideologically driven society needs to get lucky to ensure that the required human traits will be passed on to the next generation. If this theory holds, then irrationality is an evolutionary response to randomness, a disturbing thought indeed.

Re: Will Iceland Vote ‘No’ on April 9 or commit financial suicide?

wagthedog1 — Sun, 10 Apr 2011 19:23:10 -0000

By voting "no" Iceland may have called the ratings agencies "bluff" with regard to defaulting on their odious debts, however they must now risk being abused by the vulture funds. The road to credit worthiness is a long one indeed.

Re: Faber: The Fed will continue to be behind the curve

wagthedog1 — Sun, 10 Apr 2011 15:28:28 -0000

There was perhaps not enough time given to Faber for his explanation, such that his choice of language easily comes across sounding like emotive anti-welfare talking points with which we are all familiar. The single-mother generalizations on education with allusions to Jim Crow regarding voter representation certainly didn't help here. But what can one expect when an Austrian Economist is asked to explain a concept that is more familiar to behavioural economists?

Re: On Hyperinflation

wagthedog1 — Sun, 10 Apr 2011 13:52:28 -0000

It is interesting that this fiat currency discussion occurred after a segment on Zynga's virtual currency. One wonders what MK would make of BitCoin which uses rigorous mathematics to make it as impossible to inflate as gold. I get the feeling that his ideology only has room for gold, and perhaps silver, to be considered as real money. Virtual currencies, even those that are deflationary by design, are now probably too tainted by association with electronic fiat tricks of Goldman and the arbitrary credit systems of Farmville.

Re: Oil: Where is the spare capacity?

wagthedog1 — Mon, 28 Mar 2011 19:24:06 -0000

The adjustment can be viewed at two levels. The high level view is that decades from now most of the world's population will live their lives making do with far less fossil fuel energy. What is more worrying is what happens to make this transition come about when viewing at the low level. The utopian view is that most individuals will make the choice to give up an old way of life, and voluntarily derive happiness from an alternative way of living. The opposite extreme is that most individuals will cling to what they know, and then there will be a "selection process" whereby a lucky few will end up making it through "the adjustment" relatively unscathed -- The quoted terms being euphemisms for whatever horrific actions humans devise to inflict unto each other. At the high level, the end result is the same -- "We will adjust." but it is the lower level details that determine exactly how fresnodan's pronoun "We" will be defined.