Here’s my short take, following on Barbara’s post Wednesday, on economists:
The comments to my post here last week on Benoit Mandelbrot were for the most part significantly more sophisticated than the post itself. So, since my days at Chez Felix are numbered, I thought I should avail myself of the brilliance of his commenters while I still can to ask a very basic question: Is the practice of quantitative financial risk management one big con job?
New York Times business columnist Gretchen Morgenson is Terry Gross’s guest on Fresh Air today. I caught about ten minutes of the conversation while out driving this afternoon, and it reminded me of why I’m not a big fan of Gretchen Morgenson’s work. She’s just not very interesting to listen to, or read: Too flat, too broad-brush, too predictable, lacking in cleverness and nuance and curiosity. That’s why I’d take a Joe Nocera column (or a Felix Salmon blog post) any day over a Morgenson offering.
The Treasury Department reported on Oct. 15 that the deficit in fiscal 2010, which ended Sept. 30, was $1.294 trillion. That’s less than FY 2009′s $1.416 trillion, but it’s still really really big. Why is it so big, though? Is it because of all that stimulus and bailout spending? Or is something else going on?
Tim Geithner has proposed to his fellow G-20 finance ministers that trade surpluses and deficits be capped at 4% of GDP. The idea is already running into criticism from countries that run big trade surpluses. German Economy Minister Rainer Brüderle warned against “planned economy thinking,” according to Reuters, and “makroökonomische Feinsteuerung und quantitative Zielsetzungen” (macro-economic fine-tuning and quantitative target-setting), according to Reuters Deutschland. “We doubt whether rigid numerical targets should be set,” said Japanese Finance Minister Yoshiko Noda.
I’m going to a book party at a bar in Newton, Mass. tonight (yes, life here in metropolitan Boston is unspeakably glamorous) for Sam Howe Verhovek’s Jet Age: The Comet, the 707, and the Race to Shrink the World. It’s a great little book—and I don’t think the fact that Verhovek’s brother is a friend of one my wife’s best friends from high school (the reason I was invited to the book party) invalidates my positive opinion. I brought a galley along on a flight West a couple months ago and, despite being alarmed by Verhovek’s accounts of exploding jet airplanes, couldn’t stop reading. I had finished it by the time I landed in Reno.
The Boston Globe has a Local-Boy-Made-Controversial story about Marty Peretz (it was in yesterday’s paper, but I just got around to reading it today). There’s nothing much new in it, but it got me thinking about the changing division of labor in journalism and how it hasn’t worked out equally well for everybody.
Apple’s earnings announcement this afternoon was something of an epic event. First, the company reported making a staggering amount of money: $4.3 billion in profit for the quarter. Second, Steve Jobs got on the phone and was even more obstreperously entertaining than usual. Third, iPad sales for the quarter were a bit lower than hoped and Apple’s stock price dropped 6% in after-hours trading.