LA prosecutors meet with another Roman Polanski victim. She’s 42 now, but was raped by the son of a bitch when she was 16. Polanski was, and probably still is, a serial rapist of young girls. The French consider him an artistic genius who should be forgiven his foibles ( a French word, no?). We don’t have to agree with that, and I hope he’s brought back and jailed, forever.
Daily Archives: May 15, 2010
I get the most interesting emails and comments from readers who know so much more than I do (okay, low hurdle). It’s fascinating, and as a philosophy student turned real estate agent, I’m starved for intellectual stimulus. Here’s one from a reader who wishes to remain anonymous. I don’t know if he’s right – I’d bet he is – but I guarantee you that he’s smarter than this dummy, and worth reading and considering. And I keep saying this, but again – if you’re not reading the comments, you’re missing the best part of this blog – all the intelligence is over there! (Not Walt’s of course, but ,,,)
Dear Mr. Fountain,
I am a long time reader and I have very much enjoyed your thoughts (both on real estate and other topics).
There is one area where I’d like to offer a correction. In a recent post you suggest that an excess of housing supply in Las Vegas somehow goes against the Efficient Markets Hypothesis (EMH). This view reveals a common misunderstanding of the EMH. Wikipedia defines the EMH as follows:
one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis.
So, simply using hindsight to point out that a certain price (in this case housing in Vegas) was “too high” says nothing about the EMH. On the other hand, if you were able to create a portfolio of Vegas real estate that consistently out performed the Vegas real estate index (taking a similar amount of risk as the index), then you could reasonably claim that the EMH did not hold. (Note that you have to do this without using the benefit of 20/20 hindsight).
Also, simply pointing out that billionaire XYZ made a ton of money in market X tells us nothing. (Make a 100 people flip a coin 10 times in a row. One of them will come up 10 heads, purely by chance. That does not make him a coin flipping genius).
The role of the EMH is commonly misunderstood by those who criticize it. (Some people take this criticism to absurd lengths: they blame the financial crisis on EMH.) The EMH is not meant to be a “law of nature”, but a helpful way to think about the markets. Think of EMH as a very powerful “null hypothesis”. i.e., This must be your starting point unless you obtain convincing evidence against it. A sort of Occam’s razor for thinking about the markets. Putting it another way, if a market price looks “irrational” to you, 9 times out of 10 you are probably missing something. That’s not to say that markets are some kind of omniscient magic that can never be beaten, but using an “irrational” market as a starting point leads to sloppy thinking.
A more general observation: Elites naturally take the position that people don’t know what’s good for them, and they can do better. Indeed it seems “obvious” to them. Most of these people tend to be university professors or politicians. Professions where you do not have to deal with the strict discipline of the market. To such people, the notion that wisdom of the market is superior their own is anathema. No wonder these people love ranting about the EMH.
Thank you for your entertaining and thought provoking blog.
This guy claims the cops are buying up all our ammunition. I guess it depends on exactly how much ammo you’re looking for. I’m a hunter and an armed homeowner, not a survivalist, and have no problem finding cartridges for my various weapons but then again, I don’t need all that much. Maybe one .270 rifle cartridge a year for a deer, perhaps ten more just for sighting-in purposes (although one or at most, two usually serve the purpose) , a single box of .45 caliber, lifetime, to keep that pistol operating, and a handful of slugs for the old home defense shotgun and tons of .22 stuff for target shooting practice. I’m as susceptible as the next fruitcake to conspiracy theories, but I’m not buying into this particular one.
Heinz gives up, and will cut salt content in its catsup 25% to satisfy the Mad Mayor of New York. We’ve gone completely, friggin’ nuts.
In addition to my grievance committee – mandated “ethics” class imposed as punishment for running this blog, I also am required, as are all real estate agents, to take 12 hours of continuing education every two years. In the past, I’ve taken advantage of the alternative, a fifteen minute test that’s administered via computer up in Norwalk. Fifteen minutes vs. 12 hours? No contest.
But two years ago, when I took the test, I flunked the”Fair Housing” section. Unlike questions about contracts, or ethics or anything else involving real law, there is no logic to the fair housing laws: can you discriminate against a strip-tease dancer in deciding whether to rent her an apartment? (that’s an actual question) Beats the F*** out of me, but you are required to know the answer. Because, like all agents, I’d delayed until the last minute to deal with the test/continuing ed requirement, I had to scurry around, borrow brother Gideon’s course material on the subject, study it and race back to Norwalk two days later to retest.
I passed, but this time around, as I was required to sit through three hours of ethics class anyway, I decided to avoid the drama and just be bored. To be fair, the instructor, from West Hartford, is an excellent teacher and I didn’t really suffer last week or today – he’s a good egg, and does a good job of making entertaining some awfully dull subjects.
That said, I think I’ll go back to the fifteen minute test next cycle.
UPDATE: By the way, as far as I can determine, neither the National Association of Realtors nor Connecticut’s own association have even begun to address the question of real estate blogs. I’m hopeful that they won’t get around to it for another decade or so because when they do, they’ll probably outlaw what I and other real estate bloggers do. When it comes down to it, these people side with listing agents and sellers – who, after all, pay the bills.
They’re still commies, and 300 men rule a billion people. Really interesting read in the WSJ.
None can hold a candle to the Chinese Communist Party, which takes ruling-class networking to an entirely new level. The red machine gives the party apparatus a hotline into multiple arms of the state, including the government-owned companies that China promotes around the world these days as independent commercial entities. As a political machine alone, the Party is a phenomenon of awesome and unique dimensions. By mid-2009, its membership stood at 76 million, equal to about one in 12 adult Chinese.
China’s post-Maoist governing model, launched by Deng Xiaoping in the late 1970s, has endured many attempts to explain it. Is it a benevolent, Singapore-style autocracy? A capitalist development state, as many described Japan? Neo-Confucianism mixed with market economics? A slow-motion version of post-Soviet Russia, in which the elite grabbed productive public assets for private gain? Robber-baron socialism? Or is it something different altogether, an entirely new model, a “Beijing Consensus,” according to the fashionable phrase, built around practical, problem-solving policies and technological innovation?
Few describe the model as communist anymore, often not even the ruling Chinese Communist Party itself.
How communism came to be air-brushed out of the rise of the world’s greatest communist state is no mystery on one level. The multiple, head-spinning contradictions about modern China can throw anyone off the scent. What was once a revolutionary party is now firmly the establishment. The communists rode to power on popular revulsion against corruption but have become riddled by the same cancer themselves. Top leaders adhere to Marxism in their public statements, even as they depend on a ruthless private sector to create jobs. The Party preaches equality, while presiding over incomes as unequal as anywhere in Asia.
The gap between the fiction of the Party’s rhetoric (“China is a socialist country”) and the reality of everyday life grows larger every year. But the Party must defend the fiction nonetheless, because it represents the political status quo.
The Party’s defense of power is also, by extension, a defense of the existing system. In the words of Dai Bingguo, China’s most senior foreign policy official, China’s “number one core interest is to maintain its fundamental system and state security.” State sovereignty, territorial integrity and economic development, the priorities of any state, all are subordinate to the need to keep the Party in power.
Pessimist! I fear he may be right, though.
A LESSON FOR OBAMA FROM SPAIN: Cut federal salaries? Yes, we can. “Mr. Zapatero will now impose a 5-percent across-the-board reduction in government salaries. Ministers will take a more substantial, but mostly symbolic, 15-percent cut. More importantly, the government will freeze pension benefits and eliminate a number of non-essential benefits. A total of 13,000 unnecessary government employees will be cut loose.”
Is there any other kind?
On the other hand, my beloved, adored daughter Sarah graduates from the University of the Pacific today, thereby enabling her to get out of one of the worst cities on earth (Stockton, California) and her dad to at least stop digging the tuition hole deeper. I’m extremely proud of her, and I think she benefitted hugely from her college experience.
But college is certainly not for every kid, especially as the logical next step to graduating high school. Sarah took a year off to wander around Central America and was the better for that break. As was I when I bummed around Crete and western Europe in 1972.
Well, what’s the point of running the Demmerkrat Party if you can’t get a bailout? We are now on target for our debt to exceed 100% of our GDP by 2015. Anything Greeks can do, we can do better, we can do anything better than them. (they?)
Interesting article on the SEC’s head’s attempt to bring some legitimacy back to the institution after Madoff. Back in the days when I represented public investors against the firms, most of us on the public side considered Schapiro, then head of NASDAQ enforcement, to be firmly tucked into the industry’s pocket. The WSJ seems to agree with that assessment:
Ms. Schapiro—never before known as a hard-nosed enforcer during her long career as a Wall Street regulator—is gambling that she can at least extract a humbling, costly settlement from Goldman, which denies it duped investors.
But the agency had to do something or it was toast. Here’s an “ouch” moment.
The SEC’s willingness to challenge Goldman represents a big shift for the agency. In recent years, it has pursued investigations that were controversial or that sought large fines only if there was consensus among its five commissioners. Some current and former SEC lawyers say employees in the trenches took this to mean that there was little appetite for tough cases.
Morale plunged when the Madoff fraud was exposed in December 2008. One ex-SEC lawyer was asked at his mother’s birthday party: “How does it make you feel that your agency is absolutely incompetent?”
A bill’s being proposed (admittedly a long way from being passed, I hope) that would require doctors to report the weight of all their patients aged 2-18 so that the states, in turn, can turn that data over to the feds. Regardless of your feelings towards obesity (I’m against it, myself) how do you feel about the right of privacy?
There’s some crazy-assed stuff being pushed around these days.
Study: likelihood of death increases 21% for drivers wearing seat belts. Turns out, the new, federally mandated “smart” air bags favor unbelted drivers. Bad news for the 80% of drivers who use seat belts, good news for those who don’t.