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Miscellaneous Item from 2009:                        to enlarge a photo, click on it

Ghosts   No invisible hand    Is Rand to blame?   Black Swan proofing   Snooker   Rich loud mellow melodious   Underdogs   Little red flowers   Getting on with Ubuntu   Health care systems    Doing the right thing  What about those Riders!      

Ghosts
I ran across a scientific article about 'ghosts' that reminded me about something my mother told me. She said that for some time after my father died when she was alone with two little children, she could talk to Wally. If she had a problem and was having trouble deciding what to do, she would ask herself, 'What would Wally say?' Sometime soon, especially when she was going to sleep, she would hear Wally's voice giving her advice.
Now my mother told me that she didn't believe in ghosts, spirits or angels. She just believed that she knew my father so well that if she just let it happen she could knew what he would say in any situation. But she was in awe of the reality of his voice and the somewhat weird way that his presence was felt. It really seemed to be him.
She only spoke of it the one time and it is not something that I ever told anyone when she was alive because I thought it was told in confidence. By the time she died, it had been a dormant memory for so long that I probably would never have remembered it unless I had a nudge, like the one I got from the article.
Apparently, these grief hallucinations are a very normal reaction to bereavement but that people rarely discuss them for fear of being thought crazy. They are common in sober, healthy, sane people especially at times of stress during grief. One Swedish study showed that 80 percent of elderly people experienced hallucinations associated with their dead partners in the month after bereavement. Many were not just peripheral illusions but evoked the very essence of the deceased. Most people find them comforting rather than distressing. They feel a re-connection with something positive. The intensity of grief was found to predict the number of pleasant hallucinations.
I think this is like a phantom limb itch and hallucinations that result from sensory deprivation. The mind is so used to the person being there that when they are not there, parts of the brain lose their role and stimulation. If something happens - a slight odor, a shadow in the corner of the eye - that has any similarity with the lost person, the brain has been so starved that it jumps into action and produces the hallucination of the person.
My mother was making big decisions about how to manage the farming, how to get some money together, whether to go back to teaching. She probably welcomed the advice so much that it would have taken very little to produce it - just ask for it and wait.


No invisible hand

The ‘invisible hand’, when you take away the magic or supernatural aura, is just negative feedback. High prices encourage buyers to buy less and producers to produce more so the price tends to come down. Low prices encourage buyers to buy more and producers to produce less and so the price tends to rise.
The tricky thing is that negative feedback can slip into positive feedback (this happens in all sort of systems and situations). When it does the ‘invisible hand’ becomes the ‘slippery slope’. When a price goes down as a single event like in the sale, it is expected to return to its previous level when the old stock is gone and the new stock arrives. Buyers will buy at sales. However once the buyer sees the price drop as part of a continuing process, he has no incentive to buy today rather than wait for the even cheaper price tomorrow. Prices can spiral up or down until they become ridiculously out of step with any real sense of value. In order to revert to a calm negative feedback situation again, buyers must be convinced that the price cannot go any lower if it is falling or cannot go any higher if it is rising.
People will believe that the spiral has ended if there is utter devastation and social collapse signaling the end of run away inflation or deflation. Or they will believe that their government has both the will and power to put a stop to the spiral. There is no use expecting the ‘invisible hand’ to do anything – it works on negative feedback and positive feedback is in operation.

Is Rand to blame?
When I was in hospital once, a friend brought me a book to read and raved about it. I read it and thought it was awful: terrible plot, cardboard characters, soapbox dialogue, crazy ideas, boring. So I checked with my friend about whether she had actually thought highly of the book. She did think it was a great book but I put that down to her childhood being in the rich class in 1930s Germany. She probably got brain washed a bit with Nazi propaganda. The book was Ayn Rand’s Fountain Head. I thought no more about it until we returned to North America many years later at the start of the 80s. Now I started to find other people who admired Rand – otherwise normal, intelligent, nice people. It was really hard to believe.
I think Ayn Rand bears a good deal of responsibility for our Great Recession. Here is a quote from her. “When government controls are introduced into a free economy, they create economic dislocations, hardships, and problems which, if the controls are not repealed, necessitate still further controls, which necessitate still further controls, etc. Thus a chain reaction is set up: the victimized groups seek redress by imposing controls on the profiteering groups, who retaliate in the same manner, on an ever widening scale.” She wrote against government regulation of markets very strongly. And when we trace the causes of the current crisis, the greatest cause is lack of regulation. It seems plain common sense that you can not let people play with other people's money without rules. Common sense to me but not to lovers of Rand's philosophy.
Ronald Reagan followed Rand’s thinking on regulation. In 1987 he removed Volcker and put Greenspan (a Rand follower) in charge of the Federal Reserve. Greenspan worked diligently against controls on any part of the market and succeeded in minimizing them. In particular, in light of the current problems, he did not control a bubble in the housing market and did not control trading in derivatives. Even after the Long-Term Capital Management hedge fund had to be bailed out of a trillion dollar failure in 1998 because it was too big to fail, Greenspan and the Treasury Secretary successfully opposed regulating derivative trading.
In 1999 the Act that separated the conservative commercial banks from the risky investment banks was repealed. This set up conflicts of interest between the commercial and the investment departments of banks and it encouraged the commercial side to begin looking for high returns on risky ventures. The banks also went to higher debt to capital ratios. The level of regulation was steadily reduced.
But the level of money looking for a good investment was rising. Tax cuts, low interest rates, foreign buying of dollars and so on had brought money into the market and it was at just this time that the derivative market discovered a magic way to sell bonds into this sea of cash. The trick was to make most anything a triple-A bond and that high rating would sell. Being almost completely unregulated there was nothing to stop this very fast-growing bubble. The derivative market grew until it exploded.
So what was this derivative game that Greenspan and other refused to regulate? Mathematicians could earn big money in finance. They could develop and work mathematical models of the economy and they could understand the limitations of the models but they had no control over what was done with real money. The bankers could not understand the models or their limitations. They just could read the results of calculations but they were the one with control over the money. The mathematicians, called Quants, concerned themselves, among other things, with how to assess the risk of a particular bond so as to decide on an interest rate and a rating. The lower the risk, the lower is the interest rate and the higher is the rating. But how do you know who is going to go bankrupt or default; who is a high risk? Two things were invented: CDO or Collateralized Debt Obligations and CDS or Credit Default Swaps. The Quants invented them but the bankers used them.
CDOs were pools of mixed debts: corporate bonds, bank loans, mortgage-backed securities. Instead of trying to rate this pool, it was 'tranched'. Bonds were created that would be paid in full first and so they would get a rating of triple-A, some more bonds were created that would be paid second, up to full payment, depending on how the debts fared. This tranch might get a double-A rating and so on down to junk bonds. So far so good. Then CDO-squared was invented. You took a bunch of mixed bonds from tranching as above and repeated the process to give other set of slices. Eventually someone buying a bond could have no idea what they were buying – just the interest rate and the rating were visible. You had to be able to trust the ratings.
But the ratings were suspect for two reasons. The first is akin to fraud. Certain insurance companies could give anything they wanted a triple-A rating. This is because they were allowed to rate bonds, they themselves had a triple-A rating, and they backed the bonds they were rating, the the bonds were given high ratings even if they were very risky. The second reason is in the nature of rating pools. If the debts in the pool are completely independent, then to a certain extent they protect another. But if they are not independent then a default on one makes a default on others more probably. To rate the pool you need to know how correlated the risks are. The correlation was very hard to calculate.
A Quant called Li published a formula for calculating risk that used a readily available single number to approximate the correlation of the risks. Wow. Now any old pool of debt could be rated. All you needed to know was CDSs (credit default swaps) of the debts. CDSs had only existed for about 10 years so you were using only 10 years of history to decide whether debt default risks were related. The Quants knew this was not sound reasoning but the bankers loved it. They could make more complicated CDOs and rate them. It was the housing market that in the end brought down the house of cards and so it is important to remember that for longer than 10 years house prices had been rising and defaults were rare and independent of one another. This made a pool of mortgages appear very safe if you only looked at CDS. However, if house prices ever fell, defaults would not be rare and would not be independent – the more there were, the more there would be.
But CDSs, Credit Default Swaps, are themselves pretty dodging. They are in effect an insurance policy taken out by one person to cover the defaulting of another. That sounds safe except that many, many swaps can be taken out by many people on a single default event with a single company. An insurer can be terribly exposed if there is a run of defaults.
CDOs and CDSs fed on one another. They were a bubble: CDSs went from about 900 billion in 2001 to 60 trillion in 2007; CDOs from 300 million in 2000 to 5 trillion in 2006. Everything was bet on the unusual not happening and then it did. The bubble burst. But if it hadn’t burst then, it would have later after another level of unregulated hocus pocus had been invented. Important things cannot be left unsupervised, unmonitored and unregulated. People will be stupid, greed and dishonest, and sometimes maybe all three.
Ayn Rand believed they would not bring their world crashing down if they were just left to invest in a free market that would be automatically self-regulating. She convinced many powerful people of this and they, especially Greenspan, encouraged this terrible failure to happen. There were people who saw it coming and set off alarms they were ignored and even berated by Greenspan. He believed almost religiously in Rand’s vision.


Black swan proofing

Nassim Nicholas Taleb of Black Swan fame wrote something in the Financial Times on black swan proofing the world in ten ways. Here is a good part of the article:

What is fragile should break early while it is still small . Nothing should ever become too big to fail. ...
No socialisation of losses and privatisation of gains . Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. ...
People who were driving a school bus blindfolded (and crashed it) should never be given a new bus . The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. ...
Do not let someone making an "incentive" bonus manage a nuclear plant - or your financial risks . Odds are he would cut every corner on safety to show "profits" while claiming to be "conservative". ...
Counter-balance complexity with simplicity . Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. ...
Do not give children sticks of dynamite, even if they come with a warning . Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. ...
Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence". ... We need to be in a position to shrug off rumours, be robust in the face of them.
Do not give an addict more drugs if he has withdrawal pains . ...The debt crisis is not a temporary problem, it is a structural one. We need rehab.
Citizens should not depend on financial assets or fallible "expert" advice for their retirement . Economic life should be definancialised. ...
Make an omelette with the broken eggs . Finally, this crisis cannot be fixed with makeshift repairs...
Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.
In other words, a place more resistant to black swans.

Snooker
It is that time of year - the World Snooker Tournament is on television for hours at a time around May first. I love to watch snooker.
Snooker is impressive with the huge table (12 feet by 6 feet), the long matches often taking 2 or more days, and above all, the skill. It is almost unbelievable how accurately the players pot the balls and even more unbelievable how the players also make the cue ball end up where it is needed for the next shot sometimes even moving another ball into a better place on the way. How a player can do three separate jobs at the same time with one hit of the white ball is really mystical.
Snooker is very civilized. The players are in bow ties and vests with shoes polished to a mirror like shine. The audience is well-behaved. They clap and maybe shout something like “good shot” when an exceptional shot is made. They know when a player sort of won a frame (has reached a score that means the other player needs snookers to win) and they clap. They clap when a player manages a score over a hundred. They are knowledgeable. But they never clap at a mistake even if it saves their favorite player from defeat. The players also have impeccable manners. If they commit a foul that nobody sees, they declare it themselves.
The best part is the commentators who are just perfect. They know the game (many are former champions); they are intelligent; they are not full of cliches; they are good natured and are never unfair or nasty about a player. The computer graphics are amassing.
All in all, watching snooker just makes me feel comfortable and mellow.

Rich loud mellow melodious
There is a bird near our house that sings a song unlike a meadow lark but reminiscent of it in the melodic nature of the little tune. Harry and I had remarked on how it had reminded us separately of a meadow lark and how pleasant it was to have a bird with that sort of song around.
Recently we had a couple to dinner and while we were out on the street saying goodbyes, this bird sang. I asked what the bird was and was told – 'rossignol'. Then the friend said that she could not remember the name in English but that she knew it in German – 'nachtigal'. I said that in English that must be – 'nightingale'. And so it was.
This is another of those words that English speakers know because they are in poetry, song and stories. But which English speakers from North America, Australia and so on, know only the word which stands for a certain mood rather than a certain type of bird (or flower or landscape feature). I never expected a nightingale to remind me of a meadow lark. What a surprise.
A meadow lark is a big, yellow breasted, brash, top-of-fencepost, sunshine bird. At WhiteCity, Harry would whistle or play the flute back to the meadow lark and keep it singing for a long time. The nightingale is a little, brown, hidden, calm-dark-midnight bird. But they both have great songs.

It all comes down to a small, secretive, solitary songbird that goes on singing late into the night. It begins—and ends, too—with an unseen bird that continues to trill and whistle in the darkness long after the other birds have quieted for the evening. Its voice breaks the stillness. The nightingale is a common Old World bird with an uncommon sound: rich, loud, mellow, melodious. It has stamina and sings with an eerie natural beauty that reverberates like a chord through European and Asian poetry. Its song is strong and fitful—restless, compelling. It crescendoes. - Edward Hirsch

Underdogs
There is something about two underdogs fighting – something really horrid. I was reminded of this as the war in Sri Lanka came to its terrible conclusion. Neither the Sinhalese or the Tamils were able to make peace with the other – anything other than outright victory was not acceptable and there was no room for compromise. The Sinhalese felt threatened by all the Tamils in the world; they seemed to be a small weak culture defending itself against a large strong culture. The Tamils on the other hand were just a minority in Sri Lanka itself and just wanted a little homeland of their own where they could feel protected. After a millennium or two of living together on the island with populations coming and going, a language problem with English use in government grew and deepened over time into a bitter war. It grew bitter because both saw themselves as the really, really endangered underdogs.
The idea of double underdogs is very clearly seen in the Israel Palestine conflict. Who can make an offer of compromise? Because of their history, the Jews want some place on earth where they can be safe. They were allowed (encouraged?) to make this safe place in Palestine. They feel in real danger from anti-semitic groups around the world and feel surround by hostile Arab nations. They see themselves as the minority and the underdog. The Palestinians on the other hand see their history as one of them being displaced from their homes and robbed of a country. They are up against not just Israel but the whole western world (especially the US and Europe) and even the Arab nations are not willing to help them anymore. They see themselves as the minority and the underdog, under occupation by a very strong Israeli military, unprotected. Both groups see the conflict as a win or die situation and any compromise as a dangerous gamble.
It seemed like every nationality in the breaking Yugoslavia felt they were the underdog. It is surprising to many, but the underdogs included the Serbs.

Little red flowers
There was a little red flower growing through a concrete crack in the front yard, a similar one by the back door. They were tiny and interesting looking. Harry noticed some near the building site and asked if I knew them, which I didn't. They definitely didn't grow in Saskatchewan and I had not noticed them elsewhere. We kept noticing them even though they were so small and low - so I tried to find out what they were. They were scarlet pimpernel flowers.
Of course this plant had been described to me in elementary school. It was a small red wildflower that was the code name of Percy Blakeney in the novel by Baroness Orczy.

They seek him here, they seek him there
Those Frenchies seek him everywhere,
Is he in heaven? Or is he in hell?
That damned elusive Pimpernel.

The plant is common throughout Europe but mostly at lowish altitudes on alkaline (chalk and limestone) soils on broken, cultivated ground. It was accidentally introduced to some parts of North America. The plant grows low to the ground with flowers that are less than a quarter inch across.
I thought that a itch on my palms was a return of a symptom from my gluten sensitivity and this was surprising because I had not eaten anything to cause it. It turns out that scarlet pimpernel causes a mild dermatitis. It is also mildly poisonous but is used sometimes as a healing herb.
Scarlet pimpernel's common names tells us something about it: poorman's sundial, shepherd's weather-glass, shepherd's joy, laughter bringer, shepherd's clock, shepherd's calendar, shepherd's delight, shepherd's glass, shepherd's warning, shepherd's watch, sunflower, Tom Pimpernowl, waywort, wink-a-peep, John-go-to-bed-at-noon. These names refer to several properties of the flower. First, it opens late and closes early each day. In summer the sun can appear at 4 or so in the early morning and other flowers begin to open. One of the last to open is the pimpernel at 8 or 9. In the evenings it closes as early as 3 or 4 in the afternoon. Secondly, it 'winks' closed at any sign of rain and opens again as soon as the rain stops. Third, it was used to treat depression and melancholia. Fourth, it was poisonous.
I tried to take a photo of the flowers with my little digital camera but they are so small that good pictures require a better camera. Here is mine plus a good one from web.

pimpernelpimpernel

Getting on with Ubuntu
I know something about computers but I have never been a nerd. So when I have to buy a new computer or get a different operating system, I would sooner be standing for hours in a cold shower. I like programming and personalizing bought software, although I have more of less stopped doing either. I like even more using my computer to do useful or entertaining things. But I have never liked 'playing' with computers.
From what I had seen of Linux until recently, I have steered clear of it. It was definitely a system made by nerds and for nerds. Harry struggled with it for years and got very little sympathy from me. He did get the odd bit of help though, because sometimes little bits of Unix would drift to the surface of my mind at an appropriate time.
In the winter I bought a new computer. This time I had time to set it up leisurely because my current computer had not died. And I had noticed that the last Linux that Harry had installed on his machine was almost user-friendly. So the question was – do I choose to learn a new Windows or Linux? I took the plunge and installed the variety of Linux called Ubuntu. I am was not sorry. This Linux was of course written by nerds but it was not written for nerds but for ordinary computer users.
Ubuntu is usually as easy to use as Windows and sometimes easier. It is faster. It is stable. It is free. I have found better very cheap software then I could afford for Windows. Except to find a file that I overlooked copying to the new computer, I have not used the Windows machine for months. So I recommend trying Ubuntu (but not, unfortunately, any other Linux I've seen).


Health care systems
It seems that universal health care was invented three times:
In each place, the coverage varies in exactly what is paid for but it is a large proportion of the whole (doctors, hospitals, dentists, drugs, therapy, opticians etc.) and the coverage is universally available at a cost that is predicable, affordable and subsidized where necessary. I have now lived in four different countries with different types of universal health care and in these countries I have never met anyone who wanted to see it gone, not a single person. It is valued and protected by every population who has it. There is constant tinkering to strengthen systems and make them more cost effective – not to weaken them. No political party can withstand the public believing they will harm the health system.
So what is happening in the States? I am at a complete loss; I can't get my head around it. Why is any more than a tiny fringe rejecting a health care system?


Doing the right thing I was involve with computer systems in the days before the turn of the millennium. Throughout the industry, everyone was creating new systems and patching old ones so that the date change from Dec 31 1999 and Jan 1 2000 was not a disaster. There was a good deal of panic and no doubt more was spent then was needed, but not that much was wasted. The system managers were by and large very systematic in identifying what would fail and getting those programs fixed. When the big day arrived and there were practically no catastrophes, a number of commentators complained that the whole affair was a con job. I don't remember many columns saying 'well done'. It was more about calling wolf, wasting money, storms in teacups, etc. By doing a really excellence job, the computer people actually lost credibility.
Now we are having a pandemic. The global public health system has done pretty well everything right so far. It turned out that the influenza was fairly mild for most of the people who suffered from it. So we are lucky. Instead of praise for a way public health people responded to the threat, there is criticism. A couple of days ago I heard an interviewer trying to bully a health official into admitting that there was no pandemic. Thankfully the health official was not intimidated. It is of course a pandemic and the response was needed and appropriate in case it had turned out to be a more fatal disease. (There is only three choices here: endemic, epidemic and pandemic – take your choice.) There is no crystal ball to tell us which pandemics will race around the world and kill millions or just hundreds. This new virus could still change into a very lethal one but we are well ahead of it thanks to the efforts taken already.
There was a banking crisis that was so terrible it could have thrown the world into a deeper depression than the 1930s. All the indications were that it had stronger more dangerous causes. Governments of every political stripe around the world did the right thing and employed the Keynesian solution in a quick and massive way. This averted a deep depression and left us with more manageable problems. Is anyone happy? According to many, the governments spent too much and the little recession that we have does not justify the money. Of course, the bail out was done quickly and might have worked with less money, but it did work.
Maybe it would be a good idea to not do the right thing and let disasters happen. Would the media be happy then. We will be able to see when the result of doing practically nothing about global warming comes upon us. You can't win for losing.

What about those Riders!

When I was a young teenager and starting to high school, I lived with my aunt and uncle in Regina. When the Roughriders played, my uncle had the radio on and listened carefully to every word. I was introduced to the Rider religion. The excited radio commentary was easy to get involved in. But the only football games I saw were high school teams. Of course I attended school games, but I was not impressed.
When we returned to Saskatchewan in the 80s and 90s, Canadian football was about the only sport on TV worth watching and it was very, very entertaining. It beat hockey, baseball, basketball and was even better than American football. There was no soccer on TV in Canada. I like soccer but I think I would choose CLF over soccer if I ever had the choice. When we returned Ron Lancaster was doing commentary on the TV broadcasts. Both the talking and the camera work were the best I had seen in sports coverage anywhere, any sport, except maybe snooker.
The relationship between Saskatchewan and their Riders is remarkable. There are 8 teams based in Vancouver, Calgary, Edmonton, Regina, Winnipeg, Toronto, Hamilton and Montreal. Regina is by far the smallest of these cities but the Roughriders sell 38% of the CFL merchandise sales. The Saskatchewan Roughriders and the BC Lions bill themselves as provincial rather than city teams, but the whole of Saskatchewan does not have a large population. Everywhere the Riders play, across the whole country, fans will show up in the stands in Rider green and white. These are not by and large people who have traveled to games from Saskatchewan but people who have moved from Saskatchewan to live in other parts of the country but keep their loyalty to the Riders. It is the most popular sports team in the whole of Canada. The national TV ratings for CFL games are highest for those played by the Riders.
The Riders are a bit like the old Brooklyn Dodgers – often a very good team but always the underdogs. For almost 100 years the Riders have been the heroes of the province. The people own the team rather then one of those rich tycoon types. The community supports the team and the players support the community; it is a tradition.
The Riders made it to the final game this year. The Grey cup match was held in Calgary this year between the Riders and the Montreal Alouettes. The Grey Cup is really a party weekend with a parade and other events. It was estimated that 43% of all Canadians watched the TV game broadcast. The Alouettes had been the stronger team all year but the Riders were ahead for all of the game until the very last play. The Riders made a goof, the Alouettes kicked a field goal and won by 1 point. Back to next year country!