There seems to be a move to make the Lehman Brothers’ collapse the central turning point in the whole financial and economic crisis.  But this is what Nouriel Roubini thinks:-

Some people suggest that letting Lehman go in this way was a mistake and if we had just bailed out Lehman everything would have been fine. We would have avoided this global meltdown, this global recession. I believe this interpretation of history is totally incorrect, because by the time Lehman had collapsed the housing recession had already started two years ago and was getting worse. So the idea that the crisis started with the collapse of Lehman and if we had only bailed out Lehman everything would have been OK in my view is just total nonsense.  We were already in the middle of a severe economic and financial crisis, and a mortgage problem and a greater credit crunch that had been developing and worsening step by step for almost two years.

Why might it be attractive at this stage in the crisis to draw attention to Lehman as a key turning point? I wonder if such a simplified narrative, and one that hinges on a relatively recent policy error (if that is what Lehman’s collapse was), lets a lot more of us off the hook. If you did not appreciate the enormity of what was happening before Lehman collapsed and weren’t prepared — whether in business, journalism or just in your own household — you can draw a line under your ignorance and apportion blame more specifically. I suspect for journalists, analysts, investors and executives who found themselves adrift as events started turning sour post-February 2007, it allows them to reinvent themselves as more knowledgeable than they in fact were.

It must be some kind of memory bias at work.  But which one to choose?

More from Roubini and the notion that we may still face death by a thousand cuts:-

Related Posts

1. black swan/white face
2. the 11th chapter of napoleonic hubris
3. magoo finance iv

Related posts brought to you by Yet Another Related Posts Plugin.

On Friday I had a NASA scientist lying around the house, so I encouraged the youngest Chip off the Old Hack to take him into class for a bit of show and tell. There was a moment of struggle, with some muttering about being an engineer and not a scientist. But through my finely calibrated manoeuvring of a Ford Galaxy, the Eagle landed at T minus 10 mins, with USB memory stick in pocket, loaded with images for an estimated 15-minute presentation. Eager questioning from 32 curious nine-year-olds turned this into more than an hour. One small step…

In my capacity as taxi-driver and provider of rocket fuel, I facilitated a prime-time public service. What goes around doesn’t necessarily come around, however; searching the TV schedules yesterday for child-friendly space programmage led into the void.

Perhaps it doesn’t matter any more. You should just record stuff. Later in the evening the documentary/drama Moonshot: The Flight of Apollo 11 came on, but this overlapped later on and after midnight with In The Shadow Of The Moon. This I managed to record to PC, along with two mistaken hours of “live” Big Brother and a Whoopi Goldberg movie. There goes the hard drive. But, if it was worth putting a man on the moon, forty years later you might reasonably expect the public service broadcasters to do a better job, particularly to inspire kids on the road to knowledge acquisition.

But don’t despair. Sometimes that which is lost and broken resurfaces. The BBC did perform its civic duty on Saturday morning by interviewing film director Theo Kamecke. He had been invited by NASA to make a so-called time-capsule documentary of the Apollo 11 mission. Even NASA’s PR seemed to understand that it would get ignored once it appeared, because the public would by then be all mooned out. And so it was. Languishing for nearly four decades, Moonwalk One was rediscovered by the makers of In The Shadow Of The Moon. It has been given a digital dusting off and released on a collectable DVD.

CNN provides three minutes with Kamecke here, where he talks about the smell of fear and the contribution of little old ladies to the space race:-

[16.01.10 Addendum: the video above  seems to have been withdrawn, but a full video of Moonwalk One looks  like it was made available in the past 10 days, and so is now pasted below.]

Related Posts

1. feynman’s bananas
2. harry potter and the messed-up circadian rhythms
3. 66 characters in search of a story

Related posts brought to you by Yet Another Related Posts Plugin.

The idea of the egg and spoon race was, I’m guessing, to teach children balance, poise and concentration versus speed. Handicap all participants with a brittle object so that they develop a skill other than moving fast; break the egg and, as the computer says, Game Over. Heuristically speaking, slow and steady wins the race.

But various concerns, such as the risk of salmonella, forced the real egg in the egg-and-spoon race to withdraw. Its place was taken by the hard-boiled, ceramic or wooden egg, even the surrogate potato or stone. Casting notions of fragility aside, winning now depends on the participant navigating the course fastest with only the closest approximation to following the rules whilst under observation: a very different competition, more akin to modern banking.

Perhaps educationalists should think twice (another heuristic?) before deciding to dilute an educational activity to the point where its original purpose is lost. There may be another post on this subject in which we will investigate together a new sports day phenomenon: the synthetic sack race, where you find that the winner, in a surprise turn of events, is your local supermarket.

Back in the classroom, sheltering from the rain, other rules of thumb are sitting in the corner with the dunce’s hat on.  Michael Quinion, who runs the site and email list World Wide Words and has just published Why is Q Always Followed by U?: Word-Perfect Answers to the Most-Asked Questions About Language, points to a recent document sent to all primary schools in which the government is now recommending that the spelling rule “i before e except after c” no longer be taught because it doesn’t work. Quinion takes exception for pragmatic reasons, rather than bemoaning a fall in standards as the Opposition has. He says that, while not universal, it is a small, useful aid on the journey to good spelling. In fact, he notes from the document itself that there is a refined definition of the rule that delivers even fewer exceptions: “i before e except after c when the sound is ee”. The point is that the rule is approximate, and there is a subsidiary learning process in absorbing the exceptions to the rule.

I’ll take Quinion’s word for it on its value in spelling: it helped me. But there may be another reason not to drop so readily a rule of thumb that has proven its worth to so many generations of children, whether you are in the business of advocating spelling reform or not. The teaching to children of how to apply rules of thumb may itself be a useful pedagogical exercise for our modern times, and perhaps is even a first order imperative; the kids would be better equipped to face a complex future than we turned out to be. If I have this right, rules of thumb can work very well for those who will never master quantitative methods. Moreover, rules of thumb can operate as an antidote for those whose mastery of the quantitative, or dependence on the technological, makes them slaves to the same; something liable to get them, and the rest of us, into trouble.

Maybe schools are doing this anyway, and it’s just that I’m not seeing it yet. My gut feeling is that they are not.

Well, even from the giddiest of academic heights there does seem to be a problem according heuristics the respect they deserve. This is what Dan Goldstein at Decision Science News wrote recently:-

All smart statisticians use rules of thumb. DSN has noticed that as soon as one statistician codifies or pronounces a rule of thumb, smart alecs come along with special cases that violate the rule thereby “proving” the rule and the person who articulated it “wrong”. (Smart alecs love to pretend that those who impart rules of thumb are so dumb as to believe that the rules work in all circumstances).

This leads me, if not you, back to Quinion, and an entry in his earlier book Port Out, Starboard Home: And Other Language Myths on the subject of the phrase “the exception that proves the rule,” a phrase often uttered by smart alecs in the corollary to Dan’s example i.e. when they themselves might have been otherwise proved wrong. Quinion shows how this is a corruption of its original meaning, wrapped as it is in heuristic value.  The phrase really comes from a medieval Latin legal principle:-

exceptio probat regulam in casibus non exceptis

Which Quinion translates for me as:-

the exception confirms the rule in the cases not excepted

In practice, what this means is that when you see a sign “Parking prohibited on Saturdays” you are seeing an exception to a rule which can be inferred as “parking is allowed at all other times”.

In the meantime, I note that the heuristics literature has always had its skeptics:-

Related Posts

1. why the rich get richer – read all about it

Related posts brought to you by Yet Another Related Posts Plugin.

Since I heard about social proof, and more specifically Joshua Bell’s famous busking experiment, I’ve wondered what in fact determines my own musical taste: how independent is it of others?  Like anyone, I want to think I’m a free spirit.

This may not be helpful, but the only sure example I have where I responded independently to a piece of music was Michael Jackson‘s Billie Jean.  I really did not like his music in the period up to 1983 for very particular reasons: Off the Wall had been played in our house for several years till it drove me up the wall.

From what may have been the very first UK airplay of Billie Jean, I immediately went out and ordered the 12″ version, making the record an outlier in an LP collection of otherwise orthodox neurotic-boy-outsider (NBO) teenage angst music. That’s if you exclude the bootleg Buddy Guy album that found its way to small-town Lincolnshire by some miracle or another.  Much is made of the revolutionary impact the accompanying video had on the success of Billie Jean, and that may all be true, but I know that did not influence me.

It didn’t stop there.  Soon after, and in a similar fashion, I heard the roughly contemporaneous Walk Right Now, penned and performed by Jackson and brothers.

Walk Right Now certainly does illustrate my early experiences of social proof in action.  I upset and embarrassed a good many of my adolescent chums with this one, particularly one who was a dyed-in-the-wool Joy Division and Morrissey fan. He loathed it, until his big brother (whom he worshipped) returned from Cambridge porting it in his own diminutive singles collection.  Things were crossing over fast in 1983 for those of us with parochial musical tastes and where the only good record shop occupied the tiniest of former corner stores.  Within a few months of Billie Jean’s release, my friend found his erstwhile NBOs, New Order, going all techno-dance on him, creating a yet more legendary 12-inch.

It seems impossible to know the truth about Michael Jackson.  Maybe, with Billie Jean, he flew too close to the sun.  I understand New Order, meanwhile, retired and went yachting.

And here, as promised, we cross over from maudlin to up-tempo.

Related Posts

1. everything is jumpin’
2. how to sing bach
3. bovine scatology

Related posts brought to you by Yet Another Related Posts Plugin.

There is now a cloud appreciation society. You may have heard about it on the radio a few weeks ago. They have named a new cloud — undulus asperatus — from the Latin, which roughly translates as “agitated waves“. And the roughness is what matters. They are highly disturbed, heralding a storm, and yet tend to disperse without one. The pictures above are nothing of the sort: just cumulus or perhaps nearer cumulonimbus.

I’ve looked at clouds from both sides now, and it is true what they say: that some clouds do have a silver lining, though I’m hesitant to agree yet that every one does. More research is needed.

It was sports day when these photos were taken earlier this week, and for the first time in a while it was not rained off, not even just the once. So these clouds were silver-lined if you were the harassed head teacher. But the sun did not shine for the smaller Chip off the Hack who came away with no honours. Last year, if memory serves, he won the egg and spoon race. This year, although the video evidence is incomplete, it does look like he finished the course without dropping the egg once, compared with his fellow competitors who all seemed to have at least one upset. Had the eggs been real, this would have been a feat in itself, but that day it was not the one being measured. Shall I add that the spoons were not institutional dessert spoons of yore, but wooden spoons with barely any dish? Ah well. He is his father’s son.

Related Posts

1. friday fractal vi
2. friday fractal iv
3. friday fractal II

Related posts brought to you by Yet Another Related Posts Plugin.

One of the most unanswerable questions you’re likely to be asked in a job interview is “Do you think you’re tough enough to stand up to Piers Morgan?” Unfortunately I’ve had that question put to me.

Several years ago, by dint of having the two words “managing” and “editor” next to one another on my CV, Trinity Mirror called me in to see them in the possibly mistaken belief that I could help dig them out of a very big hole. I was pretty sure I could help in some way, but I think we had a different view of what type of hole they were dealing with. Given Piers Morgan‘s inexorable rise on two continents as the mean-spirited arbiter of folksy talent, might I humbly propose that this is the mother of all interview posers? Top it if you can.

To be sure, I was in the wrong place at the wrong time, as usual. There was a small coda to this interview conversation which involved another legendary Fleet Street figure: an experience which finally persuaded me it was time to steer a reciprocal course to the one Fleet Street was headed down and, boat-hook in hand, retrieve my bedraggled dignity. As tabloid journalists allegedly say in potentially compromising situations: “I made my excuses and left.”

Rightly or wrongly, and with rare exceptions, my approach to news management had been unusually low-key: a function of personality combined with the demands of real-time, I think.  I was always more interested in process than result. That’s what I offered in that interview, and I suspect that it was mistaken for weakness and (worse still) inexperience, whereas for them it should have represented a diverse perspective. My interviewer, I could tell, was not convinced.

Mercifully one of us escaped. I think it was probably me, though maybe it was Piers. So, in my sotto voce way, this  knackered hack is finally taking a hyper-linked opportunity to stand up to Piers Morgan: something that in real life only a handful of people seem ever to have done, and the Fates denied me the opportunity to chance my arm at.

Morgan was honoured this week with a slot on the BBC radio show Desert Island Discs: the longest-running music programme in the history of radio. It is the mama of all mixtapes: you get to choose the records that define your experience and broadcast them to the nation. Although Bob Geldof famously said that it is only a radio show, I reckon an invitation to appear is greeted by most in the same way as being tapped by Buckingham Palace for the Queen’s birthday honours.

Piers Morgan’s life is a catalogue of rather ghastly errors, none of which seems to have been a setback to his advances to fame and fortune: a modern day Bel Ami, perhaps?  So it seems like a category error for our public service broadcaster to accord him such high-quality attention. But hey, there goes the neighbourhood. For those who want to see if theirs is a match for his musical taste, this link should do it. Me, I’m averting my eyes.

In at least one of those counter-factual universes of infinite mathematical possibility, the Knackered Hack has himself been granted the honour of discussing his own desert island discs before an eager nation. In this same universe, Piers Morgan blogs and nobody reads.

Here’s a small taste of what my list contains. Until a few weeks ago Haydn would not have been on my modest mixtape.  For undisclosable reasons he has now hopped in.  The words, courtesy of the ChoralWiki, are below.  And for those who read me for stuff on decision-making, Haydn seems to have been on to heuristics and biases long before any of us.  You may have to think about this one a little bit.

Insanae et vanae curae invadunt mentes nostras,
saepe furore replent corda, privata spe,
Quid prodest O mortalis conari pro mundanis,
si coelos negligas,
Sunt fausta tibi cuncta, si Deus est pro te.

Vain and raging cares invade our minds,
Madness often fills the heart, robbed of hope,
O mortal man, what does it profit to endeavour at worldly things,
if you should neglect the heavens?
If God is for you, all things are favorable for you.

Related Posts

1. public disservice broadcasting
2. bovine scatology
3. a generational write-off

Related posts brought to you by Yet Another Related Posts Plugin.

Across Fleet Street from the Tipperary and up a narrow alley is Ye Olde Cheshire Cheese. I’ve been set up in that pub before now too.

I’m old enough to remember it as a somewhat run-down labyrinth haunted by the last remaining hacks, before Fleet St was repopulated by accountants and bankers.  The Cheese was refurbished.  After that it was a principal hang-out for Goldman Sachs, whose European headquarters stands more or less next door.  Don’t get me wrong: I still liked it.

But my fondest memory of the Cheese is the first time I drank a porter beer: Samuel Smiths’ Taddy Porter, if I recall correctly, though it could easily have been their Imperial Stout. Just a half, mind you, with the Knackered Hackette, near the roaring fire in the quiet snug bar on the right, within sight of Dr Johnson’s favoured seat. We were on our way to see Jane Campion‘s film The Piano.  It must have been 1993 when I was Knight-Ridder‘s much-too-young London bureau chief. It was a dark winter’s evening, and somehow the beer, the pub, the piano, the days of print: everything was a kind of black and white.

Michael Nyman may not please everyone, but I liked the music to that film.  I have been flipping past the CD for the best part of 20 years until 12 months ago, when I started to listen to it again, and with enthusiasm.

Yesterday, courtesy of the independent journalism site Frontline via Twitter, I came across the following short film at the composer’s homepage.  Nyman is offering film-makers free music to accompany their creative efforts as part of a competition being run by Shooting People.  The prize is £750 of video training with Frontline.

The title of the film — We Are What We Lost – struck me hard; how better to define the process of delivery that is grief? When young, if we are lucky, we tend to think we are defined by our accomplishments or their symbols; when older, if we are lucky, we will eventually be disabused of such notions.

It’s an affecting film, so perhaps something really for home viewing, not the office.

The filmmaker, Srdjan Mitrovic, describes it thus:-

This short film is moving reconstruction of a specific personal experience within a given tradition to remind us of the constant interconnection between life, food and death.

Cheese sign photo credit teamaskins

Related Posts

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

In the middle of that 2001 Chapter 11 process, I was being primed for information in the Tipperary pub in Fleet Street. The “Tip” is the oldest Irish pub in England and the first ever to sell Guinness here, or so the free information on the internet tells me today. I did not know that then. There was plenty of free information available in 2001 despite a relative shortage of comprehensive pub histories. All the same,  you still had to pay for the Guinness. And that’s invariably the case today.

I was with a very senior colleague who was plying me with the black stuff; I think he’d been asked to keep an eye on me and my rank-breaking entrepreneurship. I said to him that I thought part of the problem for even highly specialized subscription content businesses, like the one we were proposing to launch out of the bankruptcy, was that so much generic news was then free on the internet. This factor perhaps had already tipped investor sentiment away from the concept of proprietary news content. I suggested that one of the principal reasons for this may have been the example set by our competitor, the news agency Reuters, in selling its news feed to search engine/portal Yahoo!, without obvious limitations on what could be published.

“Oh, I did that deal!” said the executive. Imagine the Knackered Hack coughing into his artisan-poured pint, spraying his “mentor” with white foam. [For sure, that's not what happened exactly, but I'm not a factual journalist any more; I don't carry an NUJ card these days and even my poetic licence is provisional.]

Some of us had known for a long while that the value proposition of unbundled real-time news was not what it once was. It wasn’t a good time to be giving so much of it away. Reuters seem to have wised up a couple of years ago because they no longer operate that Yahoo! deal.

But I still wonder, in my counter-factual way, if such a vast organization as Reuters had not taken that fork in the road so prominently would other news media have felt so compelled to provide so much stuff for nothing? And thence GoogleNews. Would a viable subscription model not have been built by now to get the more innovative news organizations [oxymoron warning] cleanly out of the ink-on-dead-trees business? Perhaps not.

There may be more lessons from the real-time news industry of the ‘80s and ‘90s for today’s media to illustrate the tragedy/farce heuristic. Anyone interested in another chapter on that soon?

Photo credit tricky

Related Posts

1. the 11th chapter of napoleonic hubris
2. it was 20 years ago today…
3. the maverick’s story

Related posts brought to you by Yet Another Related Posts Plugin.

As heuristics go, just as the most expensive wine on the wine list is not to be trusted, writers should be given a wide berth if they quote the first lines of books, especially if they are quoting Marx paraphrasing Hegel.

At the start of The Eighteenth Brumaire of Louis Napoleon, a book which I probably have read in its entirety (but don’t quote me), the bearded one says this:-

Hegel remarks somewhere^[*] that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.

Chevy Tahoe, first a gas-guzzler, then a hybrid?

I risk getting into even deeper water with the mathematicians for suggesting there is something of the self-similar in Marx’s statement, and then with historians for invoking the idea that history repeats itself.  Perhaps I’d be safe with Yogi Berra: “It’s like déjà vu all over again”.

Yesterday General Motors announced it had filed for Chapter 11 bankruptcy.  This is on a grand, publicly-listed, credit-fuelled scale (GMs’ annual revenue was $149 billion last year, and it’s lost more than $80 billion in the past four years, its market capitalization collapsing from a surprising $26 billion in October 2007, when the credit crisis was well underway, to next to nothing.)  The German and US governments have intervened to save jobs.

My own experience of Chapter 11 in 2001 was a less remarked upon affair (less than $1billion in revenue).  But at their respective times, within their respective universes, the two Chapter 11 incidents share significance: the words “too big to fail” were uttered in both instances.

There is no shortage of animal spirits evident in either, some interesting uses of expenses, and for those observing closely (perhaps that’s just me in my Chief Brody hat ) the one may have heralded the other. Did the one in fact scale into the other?  GM is now perhaps the most iconic victim of the credit crunch, which through my long-path-dependent-tinted spectacles was hinted at way back when, in the perennial struggle between debt and equity.

The Chapter 11 that dissolved the news organization I worked for merited very little press comment; ironic  given that 600 global journalism jobs disappeared more or less overnight. Almost without exception those jobs were engaged in purely factual reporting: the scrutinizing of financial markets, banking and economic and monetary policy.  Instructive perhaps, given the current collapse of news businesses the world over, that they were entirely online, publishing by corporate subscription, and over internet protocol for several years already.  They could not be saved because the consensus then was that this market was already oversupplied.  News was a commodity, and only so much was necessary to lubricate the inner workings of global financial markets.

I’ve long since given up the conceit that the factual information output of my professional career met some fundamental human need (except the feeding of my family).  This was a way that I used to comfort myself: as a journalistic form, economic and financial newswire reporting could legitimately claim a fourth-estate function of representing important facts about the world, even if it was bounded in its day-to-day ability to call policy-makers and financiers fully to account.  It was not the sharpest instrument, but it was probably a lot sharper than print journalism which in effect fed off some of its by-products.

I’ve already described how, in my own attempts to refinance this organization — as I moulted my middle-management plumage and temporarily tried on the peacock feathers of the imagined future CEO — I submitted with my colleagues a restructuring that would focus news reporting resources on the growing and mostly under-reported market in credit derivatives.  That market was the one that made sense to my diverse rescue task force: whether their personal focus was Whitehall, currencies, commodities or companies, Essex-boy, anarchist or Etonian.  In retrospect, it is clear that transparency and scrutiny of those complex markets would have been useful in the post-9/11 world.  But in the summer of 2001, investors came there none.  The lesson, as ever, seems to be: if you’re going to fail, fail big. Don’t pin your hopes for rescue on a knackered hack, but a newly minted Barack.

This takes us back to Robert Shiller and George Akerlof’s qualification of capitalism: “It does not automatically produce what people really need; it produces what they think they need, and are willing to pay for.”  Since 2001, it is clear that a great many people, and at the same time too few, thought they needed GM’s Chevy Tahoe SUV.  President Obama agrees that they need more.  Me? I’m not so sure.

Photo credit Chevy Tahoe: anthonares

Related Posts

1. pure genius?
2. no dice
3. it was 20 years ago today…

Related posts brought to you by Yet Another Related Posts Plugin.

Down in the comments of an earlier music post I dug up a seminal BBC documentary about Richard Feynman.  I must have seen it when it first came out.  I recommend you plug your computer into the TV, sit down and watch it with any children, grandchildren, nephews, nieces or godchildren; there may be no greater gift.  A few minutes in he says this:

When you are thinking about something that you don’t understand you have a terrible, uncomfortable feeling called ‘confusion’. It’s a very difficult and unhappy business.  So, most of the time you are rather unhappy, actually, with this confusion.  You can’t penetrate this thing.  Now, is the confusion… is it because we are all some kind of apes that are kind of stupid working against this? Trying to figure out to put the two sticks together to reach the banana and we can’t quite make it? …the idea ? And I get that feeling all the time: that I am an ape trying to put two sticks together.  So I always feel stupid. Once in a while, though, everything — the sticks — go together on me and I reach the banana.”

Last Journey of a Genius

When it came to deciding on a business card for the blog, there must have been some spooky action operating at a distance, for this is what we came up with.

Long-time readers will remember my own grappling with bananas only to find that, as usual, I was thwarted. Parce que…

banana photo credit -eko-

Related Posts

1. something to read when the sport is on
2. reasons to cheer the underdog
3. nothing compares

Related posts brought to you by Yet Another Related Posts Plugin.