Author: VD

Unreliable retail numbers

Karl Denninger explains why the “positive” retail numbers reported today are, in fact, nothing of the kind:

We start with one store in the world that has net sales of “100”.

Store #2 opens with sales of 10. Half of that is new activity, half comes from Store #1. First month shows a sales report of “95”, a decrease. But in the next month Store #2’s numbers come online, the “95” is revised to the (true) 105, and Store #2s numbers (which have climbed to 60, while Store #1 has lost share and now also has an amount of 60) are all reportable. Net activity is now accurate at 120 and the previous month is revised to the (true) net 105.

Store #1 and #2 both are operating with sales of 60. Store #2 fails, and half of its business goes to Store #1. In the month it fails Store #1 shows an increase and Store #2’s numbers are DROPPED ENTIRELY, since it did not report. This is not revised. We now report a “50% increase” in retail activity, which is total crap – we really had a 25% net decrease for the current month. But the revision to the previous month does get posted, and depresses the previous month’s numbers.

Did this just happen?

The August to September 2009 percent change was revised from -1.5 percent (±0.5%) to -2.3 percent (±0.3%).

Oh, it did! Now we know where the revision to the previous month came from – stores closed in the present month and their sales loss was intentionally dropped from the current month.

Of course, it’s relatively easy to tell if the retail sales numbers are cooked or not. If the state sales tax numbers are falling while “retail sales” are increasing, then it’s obvious that the model is an inherently unreliable one.

A smart call

I know Bill Belichick is getting ripped to shreds by the Monday Morning Quarterbacks, but I think his decision to go for it on 4th and 2 was a smart one. The intelligence of a decision isn’t based upon whether the fickle fortunes of Fate smiled upon it or not, but if it was the right way to bet in the circumstances.

Peyton Manning has proven that he can take this year’s Colts 80 yards for a TD in 28 seconds. Given how the Colts were moving the ball in the second half, with Manning taking them 79 yards to score in only six plays, there was no reason to believe that the New England defense was likely to shut them down if the Colts were given the ball on their own 30 with two minutes and three timeouts to spare. The fact that most coaches will mindlessly throw their defenses under the bus by taking the less probable option that conveniently lets them off the hook doesn’t mean that Belichick was wrong to take the responsibility and play the odds even though it didn’t work out for him. In fact, I would argue that his controversial decision demonstrates why he is a great coach for whom players want to play.

WND column

Fallacy of Recovery

A one-time skeptic of fiscal stimulus, [German chancellor] Ms Merkel plans what amounts to a third stimulus package worth about € 7 billion ($10.4 billion), starting on January 1st.
– The Economist, Oct. 31, 2009

The mainstream media is full of reports of economic recovery and an end to the recession of 2008, even though the Business Cycle Dating Committee of the National Bureau of Economic Research has not yet spoken its official word on the matter. The significant rise in the stock markets and a single advance GDP report has been enough to convince nearly every economist and financial analyst that the worst is past, that 10.2 percent unemployment is a lagging indicator, and that the primary concern at hand is now too much monetary and fiscal stimulus leading to inflation.

Read the rest of the column at WND
Karl Denninger at the Market Ticker appears to have reached the same conclusion. Note that I wrote my column prior to reading his post To the Barkers: Answer This Question:

“The recession ended in June”: Dennis Kneale

“The recession was definitely over in September”: Any one of a number of people.

Ok. Let’s say that I accept all this at face value, even though while driving through my definitely-beach-oriented local town here this afternoon I noted even more closed-and-gone storefronts than there were a couple of weeks ago, and last night at the local open-air mall, although the evening was absolutely gorgeous, you could have fired a 155mm Howitzer down the “main drag” without killing anyone – because there was almost nobody there, and literally not one shopping bag was in evidence.

I simply have to ask the pundits and the carnival barkers, of which CNBC is the worst (but certainly not the only sinner) the following – why do we need any of these programs if in fact the economy is growing again:

Something clearly isn’t adding up. So, who is more likely to be correct? The skeptical economists looking at the evidence and seeing that nothing fundamental has changed or the mainstream economists utilizing the very same models that didn’t let them see a recession coming in the first place? And furthermore, if the models are known to be unreliable, then how does it make any sense to put faith in an estimate that is constructed on the bases of those models?

VPFL Week 9

92 Masonville Marauders (5-4)
75 Winston Reverends (4-5)

89 Judean Front (7-2)
81 Burns Redbeards (2-7)

85 Alamo City Spartans (7-2)
54 Black Mouth Curs (4-5)

81 Bane Silvers (4-5)
55 Mounds View Meerkats (5-4)

50 Greenfield Grizzlies (3-6)
42 Valders Valkyries (4-5)

As always, this is your NFL Open thread

Gladwell and the Igon Value

I can’t honestly say I dislike Malcolm Gladwell’s books or even Gladwell himself.  How can you possibly develop a dislike for a genuinely curious dilettante who writes entertaining pop social science?  But to call him even a minor genius is to considerably overrate the man:

The themes of the collection are a good way to characterize Gladwell himself: a minor genius who unwittingly demonstrates the hazards of statistical reasoning and who occasionally blunders into spectacular failures….  An eclectic essayist is necessarily a dilettante, which is not in itself a bad thing. But Gladwell frequently holds forth about statistics and psychology, and his lack of technical grounding in these subjects can be jarring. He provides misleading definitions of “homology,” “saggital plane” and “power law” and quotes an expert speaking about an “igon value” (that’s eigenvalue, a basic concept in linear algebra). In the spirit of Gladwell, who likes to give portentous names to his aperçus, I will call this the Igon Value Problem: when a writer’s education on a topic consists in interviewing an expert, he is apt to offer generalizations that are banal, obtuse or flat wrong.

The ironic thing is that mass popularity of the sort that Gladwell enjoys is not only not evidence of surpassing brilliance, it is almost always precisely the opposite.  To be able to belabor the obvious to the clueless masses in an interesting manner is a useful gift, to be sure, but it helps to be closer to their average level of intelligence, not farther away.  I find it very strange that most people intuitively understand there tends to be an inverse relationship between brilliance and mass popularity when it comes to popular music and popular television shows, but not popular books.  Regardless of whether one is talking about Gladwell, Dawkins, Rowling, or Brown, their appearances on the bestseller lists is no more indicative of literary accomplishment than the consistent chart-topping of Britney Spears or 50 Cent is indicative of musical greatness.

Don’t get me wrong and think this is some sort of sour grapes or something based on the failure of my latest book to make its mark on the bestseller lists.  (It won’t, so long as the recovery theme remains in effect throughout the mainstream media.  In fact, I suggest that we can track the public perception of the state of the economy by how well the book is selling.)  Now, I love the Sports Guy and I’m delighted that The Book of Basketball actually hit #1 on the NY Times Bestseller list.  But as much as I happen to enjoy the Sports Guy’s writings and find them entertaining,  don’t believe that BoB or any of the present #1 bestsellers written by Mitch Albom, John Grisham, or Joel Osteen are particularly well-written or brilliant books.

Returning to Gladwell, Steve Sailer twists the knife: “Should I pause before I publish and apply reality tests to Dr. Frink’s theory … Nah! Dr. Frink is a wonderful genius! This time I’m clearly not overlooking any problems with the basic idea of my article.”  The amusing thing is that as with Paul Krugman and his claim that half of all U.S. banks failed in 1931, the error is a long-standing one.  In this case, Gladwell first introduced the concept of the Igon Value to an unsuspecting world six years ago.

As one of Sailer’s commenters notes, a Bertrand Russell quote would appear to be more than a little applicable here: “A stupid man’s report of what a clever man says is never accurate because he unconsciously translates what he hears into something he can understand.”

A pair of RGD reviews

Salt writes on Amazon:

Imagine you’re drowning in debt and your investment adviser or banker, trusted TV pundit, or some Nobel prize winner recommends you take on more debt and all will be made well. Vox Day explains what should be the obvious lunacy of such, but if one is familiar at all with current events, apparently isn’t.Vox Day explains what should be the obvious lunacy of such, but if one is familiar at all with current events, apparently isn’t. RGD is highly educational. I recommend everyone read it, and perhaps just once listen to your instincts and you might be the better off, viewing critically what those having a vested interest have been telling you.

DocintheATL writes on Amazon:

Very good read that probes the reasons behind our economic mess. The book starts off in Japan during the boom years, which develops a baseline for the remainer of the book insofar as the futility of government to correct the subsequent bust. The book does a good job deconstructing various macro-economic theories before addressing the one theory that fits well with most of the available evidence. Vox describes the limits inherent to GDP, CPI, and unemployment figures that are at the center of mainstream economic thought.

I very much appreciate those who liked the book and take the time to write reviews for it. There’s a reason most best-selling books are written by radio and television personalities these days, because their public platform is about the only way people hear about books now. Intelligent and substantive reviews on highly visible sites like Amazon are one of the best ways of circumnagivating this effective limitation on public mindshare.

The brilliant sociopathy of Gervais

A very interesting interpretation of The Office as a structural re-envisioning of corporate culture. I have to admit that in my experience, the Gervais Principle, as the author names it, is superficially more convincing than either the Peter or Dilbert Principles.

This is where Gervais has broken new ground, primarily because as an artist, he is interested in the subjective experience of being clueless. For your everyday sociopath, it is sufficient to label someone clueless and work around them. What Gervais managed to create is a very compelling portrait of the clueless, a work of art with real business value.

Here is the ultimate explanation of Michael Scott’s (and David Brent’s) careers: they are put into a position of having to explain their own apparent, unexpected and unexamined success. It is easy to explain failure. Random success is harder. Remember, they are promoted primarily as passive pawns to either allow the sociopaths to escape the risks of their actions, or to make way for the sociopaths to move up faster. They are presented with an interesting bit of cognitive dissonance: being nominally given greater power, but in reality being safely shunted away from the pathways of power. They must choose to either construct false narratives or decline apparent opportunities.

The clueless resolve this dissonance by choosing to believe in the reality of the organization. Not everybody is capable of this level of suspension of disbelief. Both Ricky Gervais (David Brent) and Steve Carrel (Michael Scott) play the brilliantly-drawn characters perfectly. The most visible sign of their capacity for self-delusion is their complete inability to generate an original thought. They quote movie lines, lyrics and perform terrible impersonations (at one point Michael goes, “You talking to me?” a line he attributes, in a masterful display of confusion, to “Al Pacino, Raging Bull“). For much of what he needs to say, he gropes for empty business phrases, deploying them with staggering incompetence. When Michael talks, he is attempting, like a child, to copy the flawless buzzspeak spoken by sociopaths like Jan and David Wallace. He is oblivious to the fact that the sociopaths use buzzspeak as a coded language with which to simultaneously sustain the (necessary) delusions of the clueless and communicate with each other.

Of course, one would be remiss to fail to point out the way in which this postulated analytical brilliance strongly suggests Gervais’s own sociopathy. This may offer partial explanation for his atheistic hostility to religion, (not his disbelief, mind you, just the hostility), whose creators and leaders he would naturally assume to be as sociopathic as he knows himself to be.

It would appear that I may have a sociopathic trait or two myself, as the author brings up one of my favorite tactics, the last sentence aside, in extra credit for his Law Number Five: “Quoting your opponents more accurately than they can quote themselves is one of the most fascinating moves you can employ. The original speaker is put on the defensive, forced to fumble and clarify, and in the process loses control. If you want to experience true schadenfreude listen closely to what your opponents say. Do not admit to enjoying this experience.” Of course, despite the best efforts of many critics over the last eight years, this has seldom worked on me. Since I make habitual use of the tactic myself, I never cease to anticipate it. Also, there are few things more amusing than seeing an arrogant and insufficiently analytical critic snap at the bait you’ve laid before him.

This is “the real world”

Gentlemen, I suggest we are not missing anything:

Gosh, my palms are sweating even now as I prepare to write his name. I am not a teenager, but a happily married 37-year-old. And yes, I have fallen madly, painfully, utterly in love with Robert Pattinson, along with ten million other women…. I can understand exactly why a crowd of 5,000 frenzied girls queued for hours in London’s Battersea Park on Wednesday to get a glimpse of him (while he was promoting the release of Twilight’s sequel, New Moon), just as it is perfectly clear to me why he was chased into the path of an taxi by a stampede of women in New York.

Of course, I am not the kind of person who’d ever normally consider writing ‘Bite me’ on my forehead, as one girl did on Wednesday, or scream my head off at some actor, but I would have gone to Battersea Park – if only I could have got a babysitter. Instead, I’ve been sleeping with the December issue of Vanity Fair, which features Pattinson as a cover boy, under my pillow, much to my husband’s mirth.

If that’s the real world, then by all means, count me out. If you’ll excuse me, I’ll be off racking up head shots in MW:2 for the next few hours.

The obvious solution

Disarm the military:

As a number of others have already pointed out, the mainstream media are doing their best to turn a mass murder committed by someone who worshipped at the same mosque as two of the 9/11 hijackers, made repeated attempts to contact al-Qaeda-supportive clergy, and shouted “Allahu Akbar” at the start of the attack into something other than an Islamic terrorist attack. If this wasn’t such a dreadfully serious matter, it would almost be funny watching Democrats insist that there’s no elephant in the bathtub. Perhaps the most bizarre of these claims is that of Chicago Mayor Richard Daley, who insists that the core problem behind Fort Hood is that “America loves guns.”

Clearly the solution is not to remove all Muslim jihadists from the U.S. military, but to take away all of the military’s guns. I am told that historically, soldiers are known to have been particularly prone to shooting people with them, so the time is long past to disarm the soldiery. While some might think this would make the military’s task in Afghanistan and Iraq more dangerous, that’s obviously not the case. Since the battle for hearts and minds concerns niceness and school-building, not breaking things and killing people, it is self-evident that an armed military is actually inhibiting the pursuit of victory in those countries.

After all, people are people everywhere you go, and if the military doesn’t require armaments in the USA, why should they require them anywhere else?

The whine of the game widow

Especially considering that it’s not an actual male holiday like Madden Day or something:

Something momentous took place in The World of Men this week, something that those living in The World of Women – that is, largely, The Real World – may yet be unaware of. At midnight on Monday, Call of Duty: Modern Warfare 2 went on sale. Should you be a reader of the female persuasion your reaction is likely to be mystification followed by the dawning realisation that this accounts for your partner’s having since gone AWOL….

Modern Warfare 2 allows participants to play the part of soldiers facing a series of combat scenarios, and is so bloodthirsty that it includes a couple of “checkpoints” where those without the stomach can opt out. It comes with an 18-certificate, however an army of forsaken women will argue that it should also carry a relationship health warning.

I have to admit, I’ve never understood how women, who apparently spend considerably more time in front of the television on average than men, can possibly complain about the male preference for electronic games. Let’s face it, you had better be one scintillating conversationalist and/or contortionist if you seriously expect to compete with CoD. Now, I do occasionally fear for the fate of the human race when talking to younger gamers who genuinely don’t seem to understand that real flesh-and-blood women could at least occasionally be preferable to porn and PS/3; at least back in the Golden Age, game geeks realized that they were compensating for missing out on something.

Anyhow, whatever, on to more important matters. Let’s say, for example, you’re playing CoD on the PC. And let’s say you have a mouse that just happens to have a joystick on the side. Do you prefer to assign WASD there for the movement? Or, do you leave that up to your left hand and assign Lie Down, Crouch, Stand Up, and Reload to the joystick? I’ve been playing both ways and I think I find the latter to be more efficient, but I was wondering what the other CoDers here might think.