Category Archives: Interesting

Money Is an Illusion

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Daniel Suelo is a guy in Utah who gave up money in 2000 and started living in caves, eating roadkill, dumpster diving and living off the generosity of friends and strangers. Some would classify him as homeless, but are you truly homeless if you call your home a cave and live there on purpose? In watching the video below I was struck, as I always am by stories like this, that people who document these stories often fail to point out that although their subjects are living off the grid they are still dependant on the grid. Where did the dumpster come from that he's diving into? Some person or company who's living on the grid of course.

That nitpick aside I found one concept from the video to be thought provoking: when Suelo gave up money he declared that money was an illusion and the writer of his story asks, "When your house is worth $500,000 one day and $300,000 the next day where did that $200,000 go?" Indeed it seems like an illusion. 

They may be on to something. Watching PBS' excellent Frontline four-part series Money, Power and Wall Street it's hard not to think of money as an illusion when you hear about the creation of financial vehicles out of thin air. Rather than confuse ourselves trying to understand crazy things like synthetic collateralized debt obligations let's think of something as simple as our houses. We each believe our house is worth a certain amount of money; our local government believes it's worth a certain amount of money based on the (hopefully informed) opinion of a professional assessor; if we have a mortgage the bank believes it's worth a certain amount of money based on the opinon of its appraiser; rarely do these three values match, and so the true value of our house is merely an illusion.

But a house isn't money, it's an asset that is bought, sold and valued using money as a measurement. How could money, an actual dollar, be an illusion? Obviously that piece of fine paper it's printed on is not an illusion, but you could argue that what that piece of paper is worth is an illusion. Sure, we know that a dollar is worth 1/150,000 of a certain house (according to the appraiser), or that it's worth one candy bar, but that's today and that's because we think that our dollar will be worth roughly the same amount tomorrow as it is today. We trust that our government will not print one quadrillion dollars overnight and thus make that dollar in our pocket worth a penny tomorrow. That's a trust shared by all of us and all it takes is one violation of that trust for the perceived value to evaporate. So really a dollar is merely a token representing our collective opinion of the trustworthiness of our financial system – if that's not illusory I'm not sure what is.

Reduced Mental Effort Leads to Conservative Beliefs?

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So, I'm reading this Freaknomics post and thinking, "If I repeat this out loud in my neck of the woods I might get my butt kicked" which of course prompted me to post it on a blog with my name on it for the world to see:

New research(summarized in the BPS Digest) finds that “low-effort” thinking about a given issue is more likely to result in a conservative stance…

The BPS Digest places the research in a larger context: “The finding that reduced mental effort encourages more conservative beliefs fits with prior research suggesting that attributions of personal responsibility (versus recognising the influence of situational factors), acceptance of hierarchy and preference for the status quo – all of which may be considered hallmarks of conservative belief - come naturally and automatically to most people, at least in western societies.”

FYI, I'm definitely posting this to Facebook so I can watch all my conservative friends get all twitchy. It's been at least two hours since one of them has blamed "Godless liberals" for the end America so I might as well get them kickstarted.

The Silver Lining in My “I’ll Never Be Able to Retire” Cloud

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As someone who's never made a ton of money, has been self-employed for much of my career, has not been real good about setting aside funds for retirement and is of the generation that will suffer first when the Boomers bankrupt the Social Security and Medicare systems, I long ago reconciled myself to the idea that I'll probably never be able to retire. That sounds like a bummer, but since I don't play golf I don't think it's that big of a deal. And there's this positive aspect of not retiring – I'll probably live longer:

We find that a reduction in the retirement age causes a significant increase in the risk of premature death – defined as death before age 67 – for males but not for females. The effect for males is not only statistically significant but also quantitatively important. According to our estimates, one additional year of early retirement causes an increase in the risk of premature death of 2.4 percentage points (a relative increase of about 13.4%; or 1.8 months in terms of years of life lost)…

The authors trace the effect to negative behavioral changes associated with early retirement and conclude that “32.4% of the causal retirement effect can be directly attributed to smoking and excessive alcohol consumption.”

Why I Should Have a Cold One BEFORE I Play Tennis

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Just about every Tuesday evening I play tennis with a group of guys for a couple of hours before we head to a local bar for a couple of beers. After reading this item on Freakonomics I'm thinking we should reverse that order:

The key finding of the new research is that the intoxicated participants solved more items on the Remote Associates Test compared with the control participants (they solved 58 per cent of 15 items on average vs. 42 per cent average success achieved by controls), and they tended to solve the items more quickly (11.54 seconds per item vs. 15.24 seconds). Moreover, the intoxicated participants tended to rate their experience of problem solving as more insightful, like an Aha! moment, and less analytic. They also performed worse on a working memory test, as you might expect. 

In the past I've found that if I happened to have a drink before playing – say on a Saturday after mowing the lawn I had a cold beer and then headed out to play a couple of sets of tennis – I'm generally much more relaxed and play much better. As a good friend once told me, my brain is my worst enemy on the tennis court, so maybe there's something to this concept. I'll run a little experiment and let you know how it goes.

 

Of Mice (and Fruit Flies) and Men

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As most women figured out long ago, men are no better than your average mouse or fruit fly:

Male fruit flies that have been rejected by females drink significantly more alcohol than those that have mated freely, scientists say…

The connection between alcohol and this chemical, which in humans is known as neuropeptide Y, has already been noted in studies involving hard-drinking mice.

Yet one scientist insists on raining on my "men or no better than fruit flies" parade:

However, in an accompanying article in Science, Troy Zars of the University of Missouri wrote that "anthropomorphising the results from flies is difficult to suppress, but the relevance to human behaviour is obviously not yet established".

Party pooper.

The Rich Really Are Different

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Whenever I read something that essentially says, "This group of people is different because…" I immediately think, "Well, I know X person who fits that group and he definitely doesn't fit that mold." And of course it's true; any time you make a general statement about a group you're going to have lots of exceptions, but it's important to remember that those exceptions don't necessarily disprove the general statement. That being said check out this article that explores some research that's been done about the affect that money has on people. The research shows that money changes people, and not always for the better:

In fact, a number of new studies suggest that, in certain key ways, people with that much money are not like the rest of us at all. As a mounting body of research is showing, wealth can actually change how we think and behave—and not for the better. Rich people have a harder time connecting with others, showing less empathy to the extent of dehumanizing those who are different from them. They are less charitable and generous. They are less likely to help someone in trouble. And they are more likely to defend an unfair status quo. If you think you’d behave differently in their place, meanwhile, you’re probably wrong: These aren’t just inherited traits, but developed ones. Money, in other words, changes who you are.

Linxplained

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The folks at Freakonomics explain why Jeremy Lin's success was actually predictable:

An average point guard selected in the NBA draft from 1995 to 2009 posted a 5.8 Win Score per 40 minutes (WS40) in his last year in college.  In 2009-10, Lin posted a 8.0 WS40, which meant he was an above average prospect.

Lin’s above average Win Score was driven by his ability to excel at shooting efficiency from two-point range, his ability to get rebounds, and his ability to get steals. When we look at which college factors predict an NBA player’s productivity, we find that it is these very same factors that matter: shooting efficiency from two-point range, rebounds, and steals.

Now what factors don’t matter? We found that a player’s height, age, and other box score numbers are not associated with more NBA production later on. In addition, appearing in the Final Four – a factor that clearly impacts draft position – doesn’t suggest higher production in the future.  In sum, what Lin didn’t have in 2010 wasn’t related to his future NBA prospects.  Consequently – contrary to what people in the NBA thought back in 2010 — people outside the NBA argued (again, back in 2010) that Lin might be worth a look.  

I smell a Moneyball moment for the NBA. 

Attempted Suicide by Jaguar, Apprenticed to a Pirate

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From the NY Times obit of John Fairfax, the first man to row solo across the Atlantic:

For all its bravura, Mr. Fairfax’s seafaring almost pales beside his earlier ventures. Footloose and handsome, he was a flesh-and-blood character out of Graham Greene, with more than a dash of Hemingway and Ian Fleming shaken in.

At 9, he settled a dispute with a pistol. At 13, he lit out for the Amazon jungle.

At 20, he attempted suicide-by-jaguar. Afterward he was apprenticed to a pirate. To please his mother, who did not take kindly to his being a pirate, he briefly managed a mink farm, one of the few truly dull entries on his otherwise crackling résumé, which lately included a career as a professional gambler.

Mine would read something like: he commuted relentlessly, day after day, to climate controlled boxes where he endeavoured to complete tasks that, if described here, would induce sleep.