How Financial Crises are Like Hurricanes

Felix Salmon opines on how financial crises are similar to huge storms, such as the impending Hurricane Sandy barreling down on New York and the rest of the East Coast:

Financial crises are similar to storms: they require humility, not hubris. Being prepared can be helpful at the margin, but ultimately it doesn’t matter how good your liquidity management teams and risk ledgers and counterparty hedging operations are: if everybody else is blown over by forces beyond their control, then you will be too.

That’s why skyscrapers always used to be built well above the water level, and that’s why we used to have dumb regulations like Glass-Steagal and Basel I, which weren’t very sophisticated, but which generally did the trick. Buildings like 200 West are a bit like Basel III: they’re built with models, so that they can withstand certain forces. But if an unprecedented storm arises, they’re still more at risk than, say, Trinity Church, built more than 150 years earlier. Sometimes, simple common sense (high ground is safer, huge books of complex derivatives can blow up in unpredictable ways) does a lot more good than any amount of sophisticated preparation.

The gist of Felix’s post relates to how Goldman Sachs is protecting its multi-millionaire dollar headquarters with sandstorms, but the analogy can be expanded to all the big banks.

The “I Don’t Have Time” Myth

Matt Swanson, with a few examples, highlights the notion that “slow and steady” is the path to getting things done, perhaps even reaching mastery of a skill or concept:

How do you get the inertia to start when the finish line seems so far away?

                   I’d like to write a book, but I don’t have time to do all that work.

But do you have an hour to outline a table of contents? Could you write 500 words today? How about emailing five bloggers that might be interested in reviewing your book this week?

Nathan Barry, a normal guy from Idaho with a wife and kid, found the time to write his book inthousand word chunks.

                      I’d really like to start drawing, but I’m no good and don’t have time to learn.

Do you have time to draw one sketch today? And again tomorrow? Could you steal enough time to read a chapter in a book every week? To visit an art museum once a month?

Jonathan Hardesty, an aspiring artist who started at “rock bottom”, did one sketch or painting every day. It took him years of work, but he went from untrained to professional artist.

You really should follow the links above for some perspective of those people were able to accomplish.

I don’t believe in the “I don’t have the time” mantra. We all have the same amount of time every day. It’s how we choose to allocate our time that matters. What you choose to do with the limited time you have speaks of your priorities in life.

On Milk, Lactose Intolerance, and Mutations

Benjamin Phelan writes about the “most spectacular mutation” in human history in this Slate piece. He begins:

To repurpose a handy metaphor, let’s call two of the first Homo sapiens Adam and Eve. By the time they welcomed their firstborn, that rascal Cain, into the world, 2 million centuries of evolution had established how his infancy would play out. For the first few years of his life, he would take his nourishment from Eve’s breast. Once he reached about 4 or 5 years old, his body would begin to slow its production of lactase, the enzyme that allows mammals to digest the lactose in milk. Thereafter, nursing or drinking another animal’s milk would have given the little hell-raiser stomach cramps and potentially life-threatening diarrhea; in the absence of lactase, lactose simply rots in the guts. With Cain weaned, Abel could claim more of his mother’s attention and all of her milk. This kept a lid on sibling rivalry—though it didn’t quell the animus between these particular sibs—while allowing women to bear more young. The pattern was the same for all mammals: At the end of infancy, we became lactose-intolerant for life.

Two hundred thousand years later, around 10,000 B.C., this began to change. A genetic mutation appeared, somewhere near modern-day Turkey, that jammed the lactase-production gene permanently in the “on” position. The original mutant was probably a male who passed the gene on to his children. People carrying the mutation could drink milk their entire lives. Genomic analyses have shown that within a few thousand years, at a rate that evolutionary biologists had thought impossibly rapid, this mutation spread throughout Eurasia, to Great Britain, Scandinavia, the Mediterranean, India and all points in between, stopping only at the Himalayas. Independently, other mutations for lactose tolerance arose in Africa and the Middle East, though not in the Americas, Australia, or the Far East.

In an evolutionary eye-blink, 80 percent of Europeans became milk-drinkers; in some populations, the proportion is close to 100 percent. (Though globally, lactose intolerance is the norm; around two-thirds of humans cannot drink milk in adulthood.) The speed of this transformation is one of the weirder mysteries in the story of human evolution, more so because it’s not clear why anybody needed the mutation to begin with. Through their cleverness, our lactose-intolerant forebears had already found a way to consume dairy without getting sick, irrespective of genetics.

Why do humans keep drinking milk? And why is it such a mystery why the lactose-tolerance mutation has propagated?

Analysis of potsherds from Eurasia and parts of Africa have shown that humans were fermenting the lactose out of dairy for thousands of years before lactose tolerance was widespread. Here is the heart of the mystery: If we could consume dairy by simply letting it sit around for a few hours or days, it doesn’t appear to make much sense for evolution to have propagated the lactose-tolerance mutation at all, much less as vigorously as it did. Culture had already found a way around our biology. Various ideas are being kicked around to explain why natural selection promoted milk-drinking, but evolutionary biologists are still puzzled.


Did Geoffrey Chaucer Coin the Word Twitter?

The Oxford English Online tweeted the word cloud below to showcase a few of Geoffrey Chaucer’s contributions to the English language, among them, womanhood, fattish, caterwaul, sluttish, poppet, dotard, and crude. But also, the word twitter:

Chaucer word cloud

The Atlantic Wire summarizes:

Chaucer provides our earliest ex. of twitter, verb: of a bird: to utter a succession of light tremulous notes; to chirp continuously.” On their Oxford Words blog they add that though Chaucer is frequently considered “the venerable but crude uncle of English poetry, always ready with an inappropriate story, quite likely, even when it seems as if his tale can’t get any funnier or more scurrilous”—that bawdy poet our high school English teachers assigned us to read—he was much more.

Dryden dubbed him ‘the Father of English Poetry,’ and while it’s debatable whether he really did invent English poetry as we know it, Chaucer remains considered one of the formidable, formative masters of English language and literature. He’s the man behind expressions like “Love is blind,” “Love conquers all,” “Time and tide wait for no man,” and “shaking like a leaf” or, Right as an aspen lefe she gan to quake. Also, “Marriage is a wonderful invention; but, then again, so is a bicycle repair kit.” Like Shakespeare, he was unafraid to play with words, and to create new ones: “There are around 2,000 words for which the works of Chaucer currently provide evidence of first use in the Oxford English Dictionary. Just over half of these borrowings are from French or Latin roots (mostly French), almost all the rest are new formations based on existing English words,” they write. We still use quite a lot of those words today, tweeting or not, and others are just kind of great: messagery, mishappy, whippletree, corny, poop, Martian, bodkin, bragget, vulgar, snort, scissors, and more.


You should follow me on Twitter here.

Felix Baumgartner: The Mathematics of Falling Faster than the Speed of Sound

Earlier this month, Felix Baumgartner jumped from 39,045 meters, or 24.26 miles, above the Earth from a capsule lifted by a 334-foot-tall helium filled balloon (twice the height of Nelson’s column and 2.5 times the diameter of the Hindenberg). The jump was equivalent to a fall from 4.4 Mount Everests stacked on top of each other, or falling 93% of the length of a marathon.

At 24.26 miles above the Earth, the atmosphere is very thin and cold, only about -14 degrees Fahrenheit on average. The temperature, unlike air pressure, does not change linearly with altitude at such heights. Jason Martinez, a programmer at Wolfram|Alpha, did a number of calculations to see how Felix’s record-setting jump came to be. It’s a very math-heavy post, but something I have been looking forward to!


Felix Baumgartner’s mach speed at various portions of his free fall.

If you’re into the nitty-gritty mathematical computations, I suggest reading the whole blog post.

Emily Witt on Online Dating

In this London Review of Books piece, Emily Witt shares her thoughts on online dating. It’s an interesting read:

Like most people I had started internet dating out of loneliness. I soon discovered, as most do, that it can only speed up the rate and increase the number of encounters with other single people, where each encounter is still a chance encounter. Internet dating destroyed my sense of myself as someone I both know and understand and can also put into words. It had a similarly harmful effect on my sense that other people can accurately know and describe themselves. It left me irritated with the whole field of psychology. I began responding only to people with very short profiles, then began forgoing the profiles altogether, using them only to see that people on OK Cupid Locals had a moderate grasp of the English language and didn’t profess rabidly right-wing politics.

Internet dating alerted me to the fact that our notions of human behaviour and achievement, expressed in the agglomerative text of hundreds of internet dating profiles, are all much the same and therefore boring and not a good way to attract other people. The body, I also learned, is not a secondary entity. The mind contains very few truths that the body withholds. There is little of import in an encounter between two bodies that would fail to be revealed rather quickly. Until the bodies are introduced, seduction is only provisional.

In the depths of loneliness, however, internet dating provided me with a lot of opportunities to go to a bar and have a drink with a stranger on nights that would otherwise have been spent unhappy and alone. I met all kinds of people: an X-ray technician, a green tech entrepreneur, a Polish computer programmer with whom I enjoyed a sort of chaste fondness over the course of several weeks. We were both shy and my feelings were tepid (as, I gathered, were his), but we went to the beach, he told me all about mushroom foraging in Poland, he ordered his vegetarian burritos in Spanish, and we shared many mutual dislikes.

It is interesting how we tend to characterize the online vs. “real” worlds as such disparate entities…

Snap, Crackle, Pop: Sounds that Sell

If you’ve ever opened a Snapple bottle, you’re no doubt familiar with the “pop” (or “click”) sound the cap makes when opened. The Wall Street Journal, in this piece, investigates how firms are doing research for pleasing sounds. Turns out, product noises are a big deal in market research.

The most interesting bit was about Mascara making a sound:

Last month, Clinique introduced High Impact Extreme Volume mascara, which produces a soft, crisp click when the top is twisted shut. The click reassures users that the package is closed and the liquid mascara won’t dry out. But more subtly, Mr. Owen says, the click conveys the elegance of the $19.50 formula.

Mr. Owen and his team fiddled with some 40 prototypes of inner parts of the mascara tube, paying particular attention to the tiny, curved plastic tab, called a “nib,” that emits the click when the top twists over it. By adjusting the slope of the curve and a corresponding tab located inside the top, designers could alter the click’s tone. A steep curve made a high-pitched click, which the team thought sounded cheap. A flatter curve made a dull sound. “We sweated that detail,” Mr. Owen says. “You have to pay attention to it and manage it through all the materials you consider and all the manufacturing steps to be sure you get it right.”

One of the largest companies in the United States, General Electric,

[W]orked with a sound designer who composed a “soundtrack” for each of its four major brands. Instead of beeps, rings and buzzes, the appliances play snippets of their song. Turn on a machine and hear the music crescendo; turn it off, and the same snippet decrescendos. For time-sensitive alerts, like a timer, the music becomes increasingly urgent.

Each brand’s music is meant to appeal to the target customer. Hotpoint, a budget-friendly line, will have a grunge-rock tune. The Monogram line, GE’s priciest, will feature light piano music. “This is more Aaron Copland,” says David Bingham, GE Appliances’ senior interaction designer. “Very forward-looking and elegant-feeling.”

Interesting throughout.

The Worst Sound in the World

What is the most annoying sound in the world? If you answered “nails on a chalkboard,” your emotional response doesn’t stand up to the science. According to Smithsonian:

[W]hen a group of neuroscientists decided to test which sounds most upset the human brain, they discovered that fingernails on a chalkboard isn’t number one. It’s not even number two. As part of their research, published last week in the Journal of Neuroscience, they put 16 participants in an MRI machine, played them a range of 74 different sounds and asked them to rate which were most annoying. Their top ten most irritating sounds, with links to audio files for the worst five (although we can’t imagine why you’d want to listen):

1. A knife on a bottle
2. A fork on a glass
3. Chalk on a blackboard
4. A ruler on a bottle
5. Nails on a blackboard

6. A female scream
7. An anglegrinder (a power tool)
8. Squealing brakes on a bicycle
9. A baby crying
10. An electric drill

I’ve never heard of a knife scraping a bottle, but I guess I can be glad of that.


(hat tip: Andrew Sullivan)

How to Read Like a Skeptic

Ryan Holiday offers some advice on how to skeptically read a blog or news article in his book Trust Me, I’m LyingHoliday writes that he is “tired of a world where blogs take indirect bribes, marketers help write the news, reckless journalists spread lies, and no one is accountable for any of it.”

When you see a blog being with “According to a tipster… ,” know that the tipster was someone like me tricking the blogger into writing what I wanted.

When you see “We’re hearing reports,” know that reports could mean anything from random mentions on Twitter to message board posts, or worse.

When you see “leaked” or “official documents,” know that the leak really meant someone just emailed a blogger, and that the documents are almost certainly not official and are usually fake or fabricated for the purpose of making desired information public.

When you see “breaking” or “We’ll have more details as the story develops,” know that what you’re reading reached you too soon. There was no wait-and-see, no attempt at confirmation, no internal debate over whether the importance of the story necessitated abandoning caution. The protocol is going to press early, publishing before the basics facts are confirmed, and not caring whether it causes problem for people.

When you see “Updated” on a story or article, know that no one actually bothered to rework the story in light of the new facts — they just copied and pasted some shit at the bottom of the

When you see “Sources tell us… ,” know that these sources are not vetted, they are rarely corroborated, and they are desperate for attention.

When you see a story tagged with “exclusive,” know that it means the blog and the source worked out an arrangement that included favorable coverage. Know that in many cases the source gave this exclusive to multiple sites at the same time or that the site is just taking ownership of a story they stole from a lesser-known site.

When you see “said in a press release,” know that it probably wasn’t even actually a release the company paid to officially put out over the wire. They just spammed a bunch of blogs and journalists via email.

When you see “According to a report by,” know that the writer summarizing this report from another outlet has but the basest abilities in reading comprehension, little time to spend doing it, and every incentive to simplify and exaggerate.

When you see “We’ve reached out to So-and-So for comment,” know that they sent an email two minutes before hitting “publish” at 4:00 a.m., long after they’d written the story and closed their mind, making absolutely no effort to get to the truth before passing it off to you as the news.

When you see an attributed quote or a “said So-and-So,” know that the blogger didn’t actually talk to that person but probably just stole the quote from somewhere else, and per the rules of the link economy, they can claim it as their own so long as there is a tiny link to the original buried in the post somewhere.

When you see “which means” or “meaning that” or “will result in” or any other kind of interpretation or analysis, know that the blogger who did it likely has absolutely zero training or expertise in the field they are opining about. Nor did they have the time or motivation to learn. Nor do they mind being wildly, wildly off the mark, because there aren’t any consequences.

When you hear a friend say in conversation “I was reading that… ,” know that today the sad fact is that they probably just glanced at something on a blog.

A classic that I’ve read that relates to this topic is Noam Chomsky’s Manufacturing Consent: The Political Economy of the Mass MediaIt will make you a more skeptical reader of the news.


(hat tip: Farnam Street)

Write More. Write To Your Friends.

James Somers has an idea: more people should write. He explains in his blog post:

When I have a piece of writing in mind, what I have, in fact, is a mental bucket: an attractor for and generator of thought. It’s like a thematic gravity well, a magnet for what would otherwise be a mess of iron filings. I’ll read books differently and listen differently in conversations. In particular I’ll remember everything better; everything will mean more to me. That’s because everything I perceive will unconsciously engage on its way in with the substance of my preoccupation. A preoccupation, in that sense, is a hell of a useful thing for a mind.

Writing needn’t be a formal enterprise to have this effect. You don’t have to write well. You don’t even have to “write,” exactly — you can just talk onto the page.

But this was the most interesting idea. Any takers?

I suggest writing emails to your friends. Writing with an audience in mind makes the writing better, and writing to a friend means you won’t get hung up on how you sound. You’ll become closer, too, to whoever you share your thoughts with, and odds are you’ll draw the same thoughtfulness out of them. Your inbox will become less of a place for coupons and bullshit than for the thoughts of humans you like.

I like it.