Thursday, November 20, 2008

Barack Obama and The Wisdom of Crowds


In the early twentieth century Francis Galton witnessed a contest at a county fair. Asked to estimate the weight of a prize ox, spectators and cattle experts alike submitted their guesses on paper.

After the contest was finished, Galton collected the hundreds of submissions. He painstakingly added them up to determine the average of the crowd's estimates.

He was astounded to discover that the crowd's average was closer to the true weight of the ox than any single guess, including those of the "experts".

This anecdote is one of many related in James Surowiecki's bestselling book The Wisdom of Crowds.

The book's central assertion is that a diverse collection of individuals, each operating independently, is likely to offer better predictions and decisions than individuals, even so-called "experts".

Intrade.com, the well-known prediction market, selected the winner of every single U.S. Senate race in 2006. No "talking head" pundit was able to match this record.

The largest and best known prediction market is the stock market.

A 2007 study by Arnerich & Messina illustrated the stock market's efficiency in stark terms. Since 1994 there have been only two years in which more than 50% of professional money managers were able to beat the S&P 500 index. In 1997 only 11% of managers beat the index.

Over the last year most investors in the equity markets have taken horriffic losses. In September -- just a couple of months ago -- the Dow Jones Industrial Average hovered near 12,000. Today it closed at 7,552, a loss of roughly 35%.

What happened in September? Let's look at the Intrade presidential futures market. The blue line represents the Obama futures while red represents McCain.

If we zoom into the September-to-November timeframe, we'll see something very enlightening. By late September it was increasingly clear to Intrade.com bettors that Obama was going to win the election. From 9/28 to 9/29 Obama's Intrade price went from 57 to 61, which represented a huge jump.

Note what happened to the stock market at nearly the exact same time. Around September 29th the market began its collapse.

Call it a crisis of confidence. Call it a Fannie-inspired meltdown. Call it what you will, but the markets appear to have reacted to Obama's promises of economic "fairness", "spreading the wealth" and raising taxes on the job creators of society.

This thinly disguised form of class warfare, the policies of which many have termed socialism (fairly or unfairly), has had a definite impact on the markets.

The markets represent the ultimate collective intelligence engine on the planet.

The markets have spoken on the stated policies of Barack Obama.

Sorry, folks, there are no do-overs.

Update: A brief postscript on Barack Obama and the Wisdom of Crowds.

Linked by: Instapundit, American Thinker, Gateway Pundit, Patterico, Vanderleun, Cold Fury, Isaac Schrodinger, Four Right Wing Whackos and Memeorandum. Thanks!

Larwyn's Link Kerplosion: Blood, Sweat and Crossword Puzzles


Media Research Center: Barack Obama's Margin of Victory

Ace of Spades: Flashback: Billions Paid to Keep 12,000 Downsized UAW Workers Paid, But Not Working, Unless You Consider Doing a Crossword Puzzle all Day "Working":

Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.'s Michigan Truck Plant in Wayne, signs in, and then starts working -- on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.

"We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper," he says. "Otherwise, I've just sat."

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union...


The Anchoress: Bush was Right. Victorious, too.

Gateway Pundit: White House declares strategic victory in Iraq. Shhhh. No one tell Helen Thomas, you'll just upset her.

Jules Crittenden: War's Over Indicator No. 52: $3 billion subway planned for Baghdad.

Elder of Ziyon: Tolerance of others

A Blog for All: What Zawahiri has done by insulting President-Elect Obama

American Digest: Dear Whole Foods, We're through. It's not me. It's you.

Parkway Rest Stop: Ultimate Wedding Dance

My Aisling: Top Ten NFL Cheerleaders

Wednesday, November 19, 2008

A5 wins 2009 Design of the Year


Automobile Magazine found a winner for its Design of the Year award.

Last year, after disputing Volkswagen Group design chief Walter de'Silva's assertion that Audi's A5 is his best-ever design, we went on to confirm that he had indeed created a beautiful car...

Just how beautiful has been clarified by seeing A5s on the road, but no one really fully appreciates the quality of its total design before driving it...

As for the Automobile of the Year? Think Giant Killer.

Franken Challenges Obviously Flawed Ballot


In the recount for the open Minnesota Senate seat, Al Franken is challenging this ballot:

That’s my vote. I tried to write in Karl Rove.

If I had written SCHMUCK across the ballot, then it would have been an obvious vote for Franken.

Talk amongst yourselves. Topic: During the third century AD, three crises challenged the Byzantine Empire. Discuss.

What does the Obama logo really mean?


Finally, from the horse's mouth, we get the real backstory on the ubiquitous Obama logo.

Like any good piece of art, Prez-elect Barack Obama's campaign logo inspires many interpretations.

At first, the ubiquitous "O," with its iridescent blue top and curved red-and-white stripes, seems simple enough. It's a disjointed flag with a rising sun at its center, intended to invoke both patriotism and renewal. But others have seen more in it, including the American farmland, a symbol of bipartisanship and even the Egyptian god Osiris.

The president of Sender LLC, the Chicago design firm that created Obama's logo, thinks it's much simpler than all that.

"We have always seen it as a sun rising on a new day for American politics," says Sol Sender. "There was no religious intention, Egyptian or otherwise.

Weird. I always thought it was the evil eye of Sauron.

Let's just hope we never see it on an armband.

Bail out the King!


Chris Kelly, writing at the Stuffington Roast, argues persuasively against a bailout of Chrysler Cerberus.

There's no such thing as Chrysler. It doesn't even have any stockholders to save. If the bailout passes, your money will go directly to the hardworking men and women of something called Cerberus Capital Management, L.P.

Cerberus, named for reasons unknown after the mythical three-headed dog that drags souls to hell, is one of the world's largest private investment firms. By its own account, it has $25 billion under management in funds and accounts and significant investments in more than 50 companies that, in aggregate, generate more than $60 billion in annual revenues worldwide...

A Japanese bank called Aozora
A Japanese real estate company
A Japanese golf course company
An Israeli bank
A German bank
A reinsurance company called Scottish Re, with headquarters in Bermuda
A British TV rental chain called Boxclever
Telacris Biotherapeutics
A defense contractor called IAP World Wide
Bushmaster Firearms
Remington Arms
Panther Arms
Alamo Rental Car
250 Burger Kings
655 Albertson's
7 television stations
$30,000,000 worth of Mike Myers' "The Love Guru"
65,000 apartments in Berlin through GSW Berlin GmbH

Maybe you or your congressperson has a nostalgic attachment to some of those things. I don't.

Maybe Cerberus Capital Management L.P. should sell some of them, if they really need cash to stay in the minivan business.

That's a whopper of a deal!

Hat tip: Linda.

Larwyn's Link Kerplosion: If GM, Ford and Chrysler get bailed out...


Mitt Romney, writing in the New York Times: Let Detroit Go Bankrupt: "IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye."

American Digest: Jonestown? That's So Over. Isn't It?

WSJ: Obama's 'Redistribution' Constitution raises some important questions about the judiciary in a prospective Obama administration.

Corner: If the 'Employee Free Choice Act' Applied to Presidential Elections...

Don Surber: Gaskets Blown. Alas, poor MoveOns, your little campaign against Joe has failed.

Gateway Pundit: The Think Tank That is Shaping The Obama Agenda .

DC Examiner: Emanuel Used Political Connections to Leverage Personal Wealth

WSJ: Did Michelangelo Have a Hidden Agenda?

Tuesday, November 18, 2008

Discovered: Bill Ayers' First Childrens Book


It's simply heartwarming to read these inspirational tales to your kids.

Linked by: American Thinker. Thanks!

Scratch one Airbus


A couple of folks sent this one in.

On Friday, May 16 2008, a brand spanking new Airbus 340-600, one of the largest passenger airplanes ever built at the time, sat in its hangar in Toulouse, France without a single hour of airtime.

Enter the flight crew of Abu Dhabi Aircraft Technologies (ADAT) to conduct pre-delivery tests on the ground, such as engine runups, prior to delivery to Etihad Airways in Abu Dhabi.

The ADAT crew taxied the A340-600 to the run-up area. Then they took all 4 engines to takeoff power with a virtually empty aircraft. Not having read the run-up manuals, they had no clue just how light an empty A340-600 really is. The takeoff warning horn was blaring away in the cockpit because they had all 4 engines at full power.

The aircraft computers thought they were trying to takeoff but the aircraft had not been configured properly (flaps/slats, etc.). Then one of the ADAT crew decided to pull the circuit breaker on the Ground Proximity Sensor to silence the alarm. This fools the aircraft into thinking it is in the air. The computers automatically released all the Brakes and set the aircraft rocketing forward. The ADAT crew had no idea that this is a safety feature so that pilots can't land with the brakes on.

Not one member of the seven-man Arab crew was smart enough to throttle back the engines from their max power setting, so the $200 million brand-new Aircraft crashed into a blast barrier, totaling it.

Snopes said it was mostly legit, so I'm going with it.

Papa B's plan to rescue the auto industry


Papa B emailed earlier.

This is serious. Maybe someone else has suggested it but I haven't heard of it.

Instead of bailing out auto manufacturers, give a $5,000 cash rebate to every buyer of a domestic car... and $2,500 to each buyer of an imported auto. Car companies, dealers and banks all gain.

If the domestic companies sold a million cars, this would cost "only" $5 billion.

Also, you start to clean out bloated inventories.

How can I get this idea to the right people?

Sounds good to me. Any ideas as to how to promote this concept?

Deep Thoughts by Bill Ayers


Monday, November 17, 2008

Just another day at the office: more Ayers-Obama bullcrap unearthed


I noticed this juicy tidbit from the Good Morning America interview that Chris Cuomo conducted with terrorist Bill Ayers.

MR. AYERS: I was asked by the state senator to have a coffee for Barack Obama when he first ran for office and we had him in our home and I think he was probably in 20 homes that day, as far as I know, but that was the first time I really met him.

Emphasis mine.

The "Meet the Candidate" coffee event, held in the home of Weather Underground terrorists Ayers and Dohrn, appears to have occurred in November 1995. It's not just Ayers, by the way; the Obama campaign has also asserted that the two first met at that event.

But as early as May of 1995, Barack Obama was already addressing correspondence as Chair, Annenberg Challenge.

It is inconceivable that the Annenberg Challenge's founder, the person who had originally conceived of the notion, would name as chair someone he had never met to dole out $160 million. So why the spin, fabrications and obfuscation?

The implication is patently obvious: they had met earlier; perhaps much earlier.

And then there's the fact that letters from the Woods Fund soliciting funds from the Annenberg Challenge had an odd characteristic: the letter, with Obama's name on the Woods stationary, was addressed to Obama as head of of the Annenberg Challenge. Can you say conflict-of-interest?

So exactly what are these people hiding? Perhaps our crack mainstream media could pull a couple of researchers off the Joe Wurzelbacher snipe hunt to pursue these threads.

Related:
Gateway Pundit: Protesting Bill Ayers
WSJ: Obama's Lost Years
Hidden Relationship Between Ayers and Obama Exposed
Chicago TV in 2000: Barack Obama admits a terrorist launched his career
What the Annenberg Files Reveal
The secret scrapbook of Barry Soetoro Barack Obama

Rupert Murdoch reads the riot act to the 'mainstream media'


The media leviathan drops some rhetorical bombs on the fossilized relics currently managing network television and print media into bankruptcy.

"My summary of the way some of the established media has responded to the internet is this: it's not newspapers that might become obsolete. It's some of the editors, reporters, and proprietors who are forgetting a newspaper's most precious asset: the bond with its readers"...

Murdoch, whose company's holdings also include MySpace and the Wall Street Journal, criticized what he described as a culture of "complacency and condescension" in some newsrooms.

"The complacency stems from having enjoyed a monopoly--and now finding they have to compete for an audience they once took for granted. The condescension that many show their readers is an even bigger problem. It takes no special genius to point out that if you are contemptuous of your customers, you are going to have a hard time getting them to buy your product. Newspapers are no exception."

... "It used to be that a handful of editors could decide what was news-and what was not. They acted as sort of demigods. If they ran a story, it became news. If they ignored an event, it never happened. Today editors are losing this power. The Internet, for example, provides access to thousands of new sources that cover things an editor might ignore. And if you aren't satisfied with that, you can start up your own blog and cover and comment on the news yourself. Journalists like to think of themselves as watchdogs, but they haven't always responded well when the public calls them to account."

To make his point, Murdoch criticized the media reaction after bloggers debunked a "60 Minutes" report by former CBS anchor, Dan Rather, that President Bush had evaded service during his days in the National Guard.

"Far from celebrating this citizen journalism, the establishment media reacted defensively. During an appearance on Fox News, a CBS executive attacked the bloggers in a statement that will go down in the annals of arrogance. '60 Minutes,' he said, was a professional organization with 'multiple layers of checks and balances.' By contrast, he dismissed the blogger as 'a guy sitting in his living room in his pajamas writing.' But eventually it was the guys sitting in their pajamas who forced Mr. Rather and his producer to resign.

"Mr. Rather and his defenders are not alone," he continued. "A recent American study reported that many editors and reporters simply do not trust their readers to make good decisions. Let's be clear about what this means. This is a polite way of saying that these editors and reporters think their readers are too stupid to think for themselves..."

Murdoch does not believe that newspapers will disappear. Instead, they'll become highly personalized journals suited for an individual and "edited" accordingly.

I'm predicting the Sulzberger family won't be involved with that part of the business.

YouTube o' the Day: Drop Everything and Watch This Now


If you haven't seen this video yet, make time now. It illustrates an astounding series of predictions by Peter Schiff in the face of incredible opposition by the talking heads of econ.

And now I know why Arthur Laffer was an honored guest on the Bill Maher show a couple of weeks ago. Idiots of a feather...

Harry Reid's greatest hits


Remember this?

Odd how the mainstream media let that egregious morale-killer drop down the memory hole, ain't it?

But I'm betting The New York Times will feature Reid's despicable information warfare campaign against our own troops any day now.

Oh, and also his very public apology.

Line o' the day: 'No downside' to burning more taxpayer money


Dan Riehl spots today's winner:

With two Senate Republicans, Shelby and Kyl, coming out against the Detroit bailout because in their view, "an auto bailout would only postpone the industry's demise," Barney Frank has some inspiring thoughts on spending billions more in taxpayer dollars.

"The House is ready to do it," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. "There's no downside to trying."

There's something seriously wrong with an America that constantly re-elects people who all but laugh in your face while squandering taxpayer money. It isn't even real money to them.

Actually, I'm guessing they know it's real money. They just happen to believe it's their money.

Hat tip: Larwyn.

Sunday, November 16, 2008

The adventures of Frankman and Doddman




I can't get enough of these two superheroes, who appear to be pursuing the culprits behind the subprime debacle with all the gusto of cats on methadone.

Linked by: Instapundit. Thanks!

Coolest Book Titles Ever


An Amazon discussion thread offers a bunch of good ones. My top ten:

10. Somebody Owes Me Money

9. I'll Cry When I Kill You

8. The Horse You Came In On.

7. The Killer Angels (Michael Shaara)

6. Something Wicked This Way Comes (Ray Bradbury)

5. For Whom the Bell Tolls (Ernest Hemingway)

4. The Killer Inside Me (Jim Thompson)

3. The Sound and the Fury (William Faulkner)

2. Atlas Shrugged (Ayn Rand)

1. Say It with Bullets (prefixed with the subtitle "When it's time to say goodbye...")

Walking back Fannie Mae's cat


In 1997 President Clinton's HUD secretary, a man named Andrew Cuomo, claimed Fannie Mae had exhibited "racial discrimination" and proposed that 50 percent of the GSEs' (Fannie and Freddie) loan portfolio be made up of loans to low- and moderate-income borrowers by 2001. Of the steps he took Wayne Barrett at the Village Voice observed:

[Clinton appointee] Andrew Cuomo... made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that... helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments...

He turned the Federal Housing Administration...into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.

At the time, Democrat Cuomo said "GSE presence in the subprime market could be of significant benefit to lower-income families, minorities, and families living in underserved areas..."

...as Paul Krugman noted in the Times recently, "homeownership isn't for everyone," adding that as many as 10 million of the new buyers are stuck now with negative home equity... So many others have gone through foreclosure that there's been a net loss in home ownership since 1998...

From 2001 to 2008, the Bush administration tried more than 18 times to bring Fannie and Freddie under heel.

For example, consider October 6, 2004. Location: The House of Representatives. Richard Baker -- the Republican Chairman of the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises -- reads an opening statement as he issues his report on "Allegations of accounting and Management Failure at Fannie Mae."

The Capital Markets Subcommittee meets today for the purpose of receipt of a report from the Office of Federal Housing Enterprise Oversight. It is indeed a very troubling report. But it is a report of extraordinary importance, to those who wish to own a home, as well as the taxpayers of this country who would pay the cost of cleanup.

...The matters detailed in this report are serious and raise concerns regarding the validity of previously reported financial results, the adequacy of regulatory capital, the quality of management supervision, and the overall safety and soundness of the Enterprise...

We all know that the Enterprise is very thinly capitalized, but the potential effect of requiring a responsible capital level would be to adversely affect earnings per share, and consequently make the payment of bonuses [to Fannie executives] much less likely...

I also wish to inform members of the Committee of another troubling incident, which I now choose to make public. About a year ago, I corresponded with the Director’s office making inquiry about the levels of executive compensation at the enterprise for the top twenty executives...

Now I understand why the Enterprise [Fannie Mae] was so anxious not to have public disclosure of compensation of an entity that was created by the Congress, and supported by the taxpayer... As a direct result of abhorrent accounting practices, executives have been able to award themselves bonuses they did not earn and did not deserve...

In 2003, the effort to rein in Fannie began in earnest with a GOP bill ("H.R. 2575—THE SECONDARY MORTGAGE MARKET ENTERPRISES REGULATORY IMPROVEMENT ACT"). The bill would have strengthened an independent regulator that did not have to kowtow to the political establishment. Like most efforts aimed at reformation of Fannie, the committee votes were typically on the straight party line.

Rep. Barney Frank (D-MA): I think it is clear that Fannie Mae and Freddie Mac are sufficiently secure so they are in no great danger... I don't think we face a crisis; I don't think that we have an impending disaster. ...Fannie Mae and Freddie Mac do very good work, and they are not endangering the fiscal health of this country.

Rep. Maxine Waters (D-CA): I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn't broke. [sic] ...These GSEs have more than adequate capital for the business they are in: providing affordable housing. As I mentioned, we should not be making radical or fundamental change... If there is anything to fix or improve, it is the [regulators].

Rep. David Scott (D-GA): ...affordable housing goals for both Freddie Mac and Fannie Mae require that 50 percent of units should be built for low-and moderate-income home buyers, and 20 percent for very low-income families... Yet, from 1998 to 2002, African-American home ownership rates only rose from 45.6 percent to 47.3 percent, less than 2 percent compared with the white average increase from 72 percent to 74.5 percent, huge gap remains. Clearly, the mission of Freddie Mac, and especially Fannie Mae, is to close that gap...

Rep. Gregory Meeks (D-NY): ...I have to go to another hearing, I will try to be just real quick... I am just pissed off at [the regulator] because if it wasn't for you I don't think that we would be here in the first place. ...we are faced with is maybe some individuals who wanted to do away with GSEs in the first place, you have given them an excuse to try to have this forum [to change the] mission of what the GSEs had, which they have done a tremendous job... There has been nothing that was indicated is wrong, you know, with Fannie Mae... The question that then presents is the competence that your agency has with reference to deciding and regulating these GSEs.

Franklin Raines, Chairman and CEO of Fannie Mae: ...In 1994, we launched our trillion-dollar commitment, a pledge to provide $1 trillion in financing for 10 million underserved families before the decade was over... In 2000... we launched a redoubled new pledge... to provide $2 trillion for 18 million underserved families before this decade is over. (I guess we didn't quite make it, did we Frank?) ...we are one of the best capitalized financial institutions in the world, when compared to the risk of our business...

Rep. Barney Frank (D-MA): I don't see any financial crisis.

Rep. Artur Davis (D-AL): A concern that I have... is you are making very specific... broad and categorical judgment about the management of this institution, about the willfulness of practices that may or may not be in controversy. You have imputed various motives to the people running the organization... That sounds to me as if you have gone from being a dispassionate regulator to someone who is very much involved and has a stake in this controversy... And I will follow up on Ms. Waters's point because I think it is very well taken: Her observation is that the political context surrounding your investigation was that serious doubts were being raised about OFHEO... In fact, frankly, doubts were raised about your leadership of OFHEO. And all of a sudden, the response to that is to produce an enormously critical report.

Franklin Raines, Chairman and CEO of Fannie Mae: ...these assets are so riskless that their capital for holding them should be under 2 percent.

A few weeks ago even ex-President Clinton admitted that the Democrats were guilty of destroying Fannie and Freddie... and responsible for the current crisis that threatens to bring the entire U.S. economy to the brink of recession: I think that the responsibility that the Democrats have may rest more in resisting any efforts by the Republicans and the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.

Who were the top recipients of Fannie Mae's cash machine? The top three were Chris Dodd (D-CT), Barack Obama (D-IL) and John Kerry (D-MA).

And where are these Fannie Mae executives now?
  • Franklin Raines ($90 million in compensation): Economic Adviser to Barack Obama
  • Jamie Gorelick ($26 million): Major Democratic Fundraiser and rumored candidate for Obama's Attorney General
  • James Johnson ($21 million): Adviser to Barack Obama


As recently as 2007, Gorelick -- who lives in a $1.7 million home -- was still donating money to disgraced Senator Christopher Dodd, a Beltway version of Nero, who fiddled while home values burned.

I have just one question: Where is the Congressional Investigation?