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31 August 2006

Careers Day

The went to the Economics Society careers day today. Everyone was obviously keen to work at Macquarie, but apart from the money I have no idea why they would want to. It sounded like an awful machine. I've heard it's actually a good place to work from someone who did work there, but the whole graduate pulper they have going sounds pretty unpleasant.

I also listened to some Ellis chap from the Reserve Bank talk about that. He thoroughly quashed any aspirations I had to work there. Which I guess is fortunate, because at the end he suggested getting first-class honours if you wanted a job there. I don't even know what first-class honours are, so I don't like my chances of getting some. If it's something to do with get high distinctions, then I want no part of it.

But there was a company called BIS Shrapnel that I liked. Mostly because of their name, but also because the guy was the only one who really made sense to me. I think I would like to work somewhere like that for a little while. They are economists who don't like economic models. And that is exactly the sort of economist I want to be.

30 August 2006

Capital Chicken

I've had another thought about how an ethical super fund could be used to save the world. It goes a little like this.

Ageing hippies and other good sorts put all their super money into this ethical super fund. It's an international fund and it gets a few billion dollars (or something) from peace-loving retirees. Its charter is to make money for its investors and use its resources to improve the world. Perhaps it guarantees to return at least the rate of inflation, or perhaps it offers a little more than that. But it's free to pursue strategies that don't maximise financial return.

This company invests a chunk of its money in normal ethical investments. The rest it uses as a cycling takeover fund. It takes over large companies and then reforms them. The "company" declares that it will behave ethically from then on. It signs contracts with various organisations vouching that it will fulfill various criteria. The company improves. The share price probably drops. The hippy fund sells for a loss, and goes off to do the same thing for some other company. Maybe the company will revert, but I imagine it could be quite difficult. You'll have other ethical investing companies who'll buy shares in it when they drop, and they'll have some influence and probably make loud noises when the company changes tack. It's also embarassing to suddenly change your mind, and might make shareholders even more flighty. People like the idea of acting ethically, even if they don't put their money where their rhetoric is. So I'm betting that if some of these companies were given a nudge, they might realise it's not as bad as they think.

But the fun bit comes in after the hippy fund has demonstrated that it's willing to lose money pursuing its hippy ends. After a while of that, merely the threat of being taken over, will make both the management and the shareholders at unethical companies freak out. The management doesn't want to be replaced and the shareholders don't want their share price to go down. So they'll reform themselves until they're no longer the least ethical company in an industry. Then the company that becomes the least ethical will freak out, and start reforming themselves. And so on, until all our nasty selfish unethical companies frighten themselves into creating a hippy utopia.

Even if the management wants to hold on and refuses to change, the threat of takeover (and the drop in the share price that would follow) will cause the share price to drop anyway. The hippy fund will get a bargain, and the share price won't drop any more once they take over, so they won't even lose any money.

The whole lovely scam makes me all happy with hope. I'm trying to think of the holes in it. The main one is that you need a whole lot of hippies who are willing to make less money than they could, at least in the short-term. But ethical companies have already found those sorts of people, so they definitely exist. The other risk is that nice ethical manager actually can't run a company to save themselves, so it's possible that the hippy fund will bring in some hippy managers to manage their company and they'll run it into the ground. The one thing you can say for the selfish, unethical arsemunchers, is that they are good at not running companies into the ground.

I just had an extra thought. While it's in charge, the hippy fund could issue a whole lot of options to itself, that it can only exercise if the company starts being naughty again. That will reduce the resale price a little, because potential shareholders will know they can't play up once they've rid themselves of the hippies, but I don't think it will by that much. And how cool would it be to have all these options floating around, that give hippies control of the unethical companies as soon as they become too unethical. Way cool. You could have an index of ethicalness, and companies who underperform the index just get taken over by hippies.

Electrical Sparking

Just below my floor, there is some electrical fault, and there is loud sporadic sparking. We only just worked out it was electrical because I saw the sparks through a crack in the roof downstairs. They are such big sparks that my room vibrates when they happen. It's pretty cool.

So Tiny

My new bedroom is so small that it only takes about 15 minutes for it to heat up to full toastiness.

29 August 2006

Justice must be done

Apparently just because there isn't any evidence that this guy killed a young girl they aren't going to prosecute him. But I say that justice must be done. She was a young, innocent girl after all. How can we set this man free?

Fat Controller

I'm a bit freaked out by those control orders Phillip Ruddock has got himself. I want to know who gave those to him and when. They suddenly whip out this new device which has nothing to do with our existing system of justice, and act like everything is life as usual.

And how the hell can Phillip Ruddock spout sewage like "Control orders are about protecting the Australian community" without falling into spasms of self-disgust? Every shitty injust "control" type bollocks that any government has ever used at any time in any country has been to "protect the community". Why would he want to associate himself with those wackos? Or does he pride himself on his impersonation of that pig in Animal Farm?

28 August 2006

Miami Vice

Tom and I went to see Miami Vice on Saturday. I don't think I've been to a film with Tom since The Three Burials of Melquiades Estrada, even though we've been living together virtually forever.

Tom was doubtful of Miami Vice because Dark Horizons didn't like it (he thinks), but I was confident and peppy. Michael Mann has always been a champ, and he was again. I thought everything about it was well done. Tom wasn't sure he liked the mood - he would have preferred more jokes by the black character. But I was all like the superficial black comic character is so overdone and those sorts of characters oppress the entire black community and make true reconciliation even more unlikely. Or something like that. Or maybe I didn't say that at all, but now I think about it, I should have said it. But mostly I disagreed it was because I like serious films with guns. I think guns are at their best when no one is being stupid with them, because they are only cool while you remember that they are deadly, awful inventions. I've never actually thought about this, but perhaps humour is one of the ways we glamorise violence in films. Maybe Pulp Fiction is let off the hook, because it's satire. I'm not really sure why some scarcely violent films make me squirm while other much more violent films are fine. I could just be an arbitrary sort of snob. There wasn't any glamour in Miami Vice. But it was very good.

Smart Fish

There's an article about the cleverness of fish and how good they are at mazes and the like. The introduction said the findings could have an important impact on the way fishermen work. I was excited because I thought it might mean that fishermen would be kinder to fish. The whole fishing process horrifies me. The least bad way I've seen of killing fish is spear-fishing, and according to a spear fisherperson I know spear-fishing it isn't that good. Whether you're being dragged through the water by a hook through the most sensitive part of your body, or slowly suffocating on the deck of some trawler, I can't imagine the final moments of most tinned fishes is particularly fun.

So I read the article, and it turns out that the tests of intelligence will provide fisherman with a way of catching fish more effectively. They found out that fish have really long memories and can find holes in nets and work out how to escape from other situations. I thought that was really cool. The journalist reckons that means fishermen have to mend the holes in their nets. Stupid journalists. Stupid fishermen.

27 August 2006


I've installed Beatrix on my laptop and it's fully noice. I've always had problems getting Ubuntu to run happily because 256MB just doesn't cut it anymore. Beatrix is part Knoppix, part Ubuntu, part custom-Beatrix fun. It's very fast. From the command line vi now opens in a snap. Opening vi had become a little ridiculous on Dapper.

So I get all the niceness and convenience of special, modern things like Ubuntu, and the speediness of those other distros like arch and Gentoo, that rather frighten me. Yay for that Watsky fellow.

lighttpd brokness

There are issues with lighttpd1.4.11-3ubuntu1 and I'm guessing lighttpd1.4.11-3 in general. I had some weird experiences with PHP CGI, and the FastCGI instances freezing up and the webserver becoming unusable. Overall lighty is tops, but I've had odd instability problems with both Ruby and PHP on it now. Although it may be because FastCGI is still a bit fresh, and not a problem with lighty itself.

To create the bug I hit a WordPress homepage with ab -n50 -c10 It would reliably fail, although -c1 (no concurrency) seemed to work. Restarting always fixed the problem. I used top to monitor the php4-cgi processes, and they'd start out with activity and then every one would drop to zero CPU activity. Eventually ab would timeout.

I'm running Ubuntu 5.10 Breezy. The lighttpd package that failed was an Ubuntu package, but the hoary package I have now (1.4.8-4hoary1) seems to be stable.

Update: It wasn't that stable. So I upgraded to a specially compiled breezy package. It was less stable. So I have gone back again. I'd go back to Apache, but I've become seriously addicted to lighttpd's configuration and speediness. So much better.

26 August 2006


We have all moved. Our new address is There will almost certainly be many problems. Let me know.

25 August 2006

SBS Commie Bastards

We watched a nifty documentary on Cuba last night. Emily thought it would be really depressing and sad. But it was totally the opposite. SBS didn't manage to find any of the people who were really opposed to the government. It was mostly just about people who loved their country but were finding it tough going. No one seriously discussed leaving, although one of the Cuban intellectuals said he thought there were lots that wanted to leave.

Watching it has reinspired me to trot out into the world and be an economist. I've developed a pattern of being invigorated by badly shot documentaries on Latin America in the 80s and 90s.

It got me thinking and downloading Excel spreadsheets again. I was curious to know, of all those Latin American countries with a GDP higher than Cuba, how many actually give the money to their poor and middle class. So I found some data on income deciles across the world, and worked out the GDP per capita for everyone but the 30% wealthiest. Which is a far more interesting statistic than the normal GDP per capita. Invariably, the wealthiest people in a country are OK. GDP per capita is supposed to be a blunt measure of "wellbeing". One person with a lot of money and one person with no money doesn't really give you an average wellbeing of "pretty good". The maths does give you that though. The people economists are interested in are the bottom 50% or the bottom 90%. But, in general, not the bottom 100%. So I set about making my own measure of GDP per unrich capita.

The results were very interesting. I'll clean them up some time and post them. But basically, Cuban GDP per capita (for the poorest 100%) is between $3500 and $6000 (US) depending who you ask. If you assume that this is pretty evenly distributed (which may not be reasonable, because there isn't information on it), but if you did then Cuba beats every non-OECD country in the world. And it beats them all by a hefty margin. The only country that comes close is Slovenia with a figure of $2084. So if you're in the bottom 70% of the world (which a good majority are), and you have to pick a non-OECD country to live in, then Cuba would be a pretty good place. And that's purely on wealth terms. I haven't attempted to factor in their excellent rum or cigars. Or their catchy musical numbers.

So to all the poor out there, if you fancy a pay rise and want good schools for you kids and like good rum, you know where to go. Or alternatively, you know which socialist revolution to emulate should you wish to have one of those. Although I have to say, I think the Nicaraguans did a far better job of their revolution than Cuba has. Which may partly explain why America was so keen to stomp on it.

24 August 2006

Amazon Elastic Compute Cloud

Oh my word. Amazon is so cool. They've built an elastic compute cloud, and it rocks I reckon. The sort of thing you might use to take over the world if you had a mind.

Telstra shares

If I had any money I'd sure be buying some Telstra shares right now. Sol seems like a pretty clever chap after all.

23 August 2006

Speaking of lame

Macroeconomics is also really lame. 90% of it is just trivial algebra, and the other 10% is just broad generalisations and assumptions needed to make the algebra simpler. But it's all good stuff to learn. At least I'm finding out all the stuff I'm not missing.

On the other hand econometrics is ultra cool. We're doing all this trippy matrix stuff, which I barely understand at all, but really enjoy. And not just because we have a cool lecturer who speaks in this laid-back, exaggerated Jamaican accent. What a champ.

Finance is lame

I'm enjoying finance, because I'm learning about a whole lot of stuff that I've never understood. But even so, a lot of it is really lame. We learnt about share price valuations yesterday. The way you work out how much a share should be worth is by putting into Excel how much all the future earnings of the company are going to be, and then pulling out of your arse how much you think the company should return in profits (like 5% a year or 15% if you feel like it). Then you divide something by something else and what you get a that is the "value" of the share. Pretty damn lame.

Washing Up

Just then, I almost didn't do the washing up, even though I had time to do it. But I decided it would have been a bad precedent to start, so I did it.

22 August 2006


Always remember to disconnect your electricity when you move out. The women who moved into our unit managed to use an enormous amount of electricity in the two weeks I was paying for her. A little more than triple what we had been using. I can't imagine what she must have been doing. Maybe she had several heaters on in both rooms of the house or something.

20 August 2006


I feel like I want a non-capitalist economist mentor. None of the jobs on the trajectory I seem to be currently on will be happy anything less than pretty intense commitment to capitalism. I wonder if applying for a job with the Reserve Bank would be like someone applying for a job at the CIA thinking that maybe the US should give Texas back to Mexico.

It really worried me when Ben Thurley said something about national economic coordination that I think I disagreed with. If I think TEAR is too economically fundamentalist, then where the hell am I going to go?

Super Pooper

I reckon superannuation should be mandatory and set at 15% or 20% with no tax-deductions, but all the tax earned goes to funding the age pension for the generation that pays it. I don't really understand why the government should use subsidies to encourage people to leave their children a sustainable pension system. If what Ross Gittins claims about the cost of income tax forgone is true, then the current system isn't really increasing the sustainability of our pension system at all. In fact the system stores up large amounts of wealth in private accounts, that will only be used for benefit of a small number of people. The main problem is that my generation won't be able to generate enough wealth to keep both my generation and the next generation at a happy level of wealth (whatever level that is). If some of the wealth stored up in super accounts was spread around more thinly as an age pension then that problem would be less severe. We need to be saving as a society, not as individuals. The age pension is very low, but the majority of old people currently live on it.

I don't really think there is a problem at all. I wonder if the whole crisis has been invented to let the government give more wealth to rich people - who realistically would have saved for retirement anyway. It's all based on the old fallacy that any money given to the government disappears into a bottomless pit, which means that if we can achieve a little by depriving the government of a lot then it looks like a bargain. Stiglitz wrote and interesting paper on it. I would like to be more like that fellow. Indeed I would.

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