Author Archives: the editor

The insanity continues….

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From the Financial Times…..

The Chinese government is to use $3bn of its vast foreign exchange reserves to buy a 9.9 per cent stake in Blackstone, the US buy-out fund, in an unprecedented move that underlines Beijing’s desire to tap into the private equity boom.

The investment will coincide with Blackstone’s landmark $40bn-plus stock market listing, expected in the next few months, and will allow the private equity group to nearly double its original target of raising $4bn.

Not only are the Chinese subsidizing the US government (through the purchase of treasures) and the US housing market (through the purchase of Fannie Mae and other agency bonds. They are now going to pour money into the stock market. And this at a time when P/E ratio’s in America are already at a record high. This is just unreal.

I wonder if the Chinese are awere that takeover booms traditionally herald a crash in the stock market?

Of course, 3 billion is small change in the grand scheme of things. It is certainly small change compared to the 300 to 400 billion that the China’s Central bank is going to spend on the US this year (on present trends). Still, it cracks me up. Next thing I know China’s central bank will be playing the lottery here in the US.

Rant of the Week: 5/20/07-5/26/07

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This week’s rant is from someone who has an unusual problem. She lives in an area that has been coming under constant rocket attack from Hamas and she tries to deal with the mental problems that result. If you remember that people who live with this fear and suffer from these attacks vote, you will go a long was towards understanding Israeli politics in the years to come.

Essay of the Week: 5/20/07-5/26/07

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This week’s essay is from the New York Times. We can’t get any lower then that can we? But in certain mental states, we like a good sappy story that celebrates the irrationality that makes life worth living. And the essay from the New York Times on a adoptive mother’s irrational love certainly celebrates that.

For comparisons sake, you should also read this story so you understand how rational people act. The comparison and contrast provides a good example of the deficiencies of rational thinking.

The Cyber Assault on Estonia…..

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The Cyber Assault on Estonia…..

The Russians are not giving up. The cyber attacks on Estonian keep getting worse. Yesterday over one million computers were used to attack Estonian. It will be interesting to see if the Estonian’s ever figure out a really good way to fix the problem short of cutting off all accesses to their computers from outside the country.

The best defense would be a good offense. But I imagine that the Estonian’s are a little nervous about trying a cyber assault on Russia. They are a little outnumbered when it comes to manpower on the ground.

You can read the latest on cyber attacks on Estonian here and here.

Essay of the Week: 5/13/07-5/19/07

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This week’s essay of the week is not particularly profound. Nor is it particularly well written. Instead is just a story that some Newsweek reporters wrote. But it is a story that I think is well worth reading.

The emergency room is something that we all just assume will be there when we need it, but we rarely think about the people who have to work in those places. Or the cost to keep something like that going.

A fascinating math law

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A recent post over at the Marginal revolution on Benford’s law was very educational. Here is a quote….

In many data series a surprising number of entries begin with the number 1, and the number 2 is also more common than a random distribution might suggest. This is called Benford’s Law. For instance about one third of all house numbers start with one. That may be a quirk of bureaucratic numbering psychology, but the principle also applies to the Dow Jones index history, size of files stored on a PC, the length of the world’s rivers, and the numbers in newspapers’ front page headlines. It does not apply to lottery-winning numbers, see the graph at the above link.

The law only applies if you are measuring or counting something. That is why it does not apply to lottery numbers. The interesting thing about this law is how it can be used to detect various kinds of fraud. Apparently, it is very hard to fake numbers (for financial results or voters tallies) and still comply with Benford’s law.

The Wisconsin State government orders a gas station to raise prices.

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This says it all…..

MERRILL, Wis. — A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices.

Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon

h/t Pierre Legrand