Month: May 2010

In an excerpt from his new book, Michael Lewis profiles Michael Burry, who shorted housing in a big way:

Right from the start, Scion Capital was madly, almost comically successful. In his first full year, 2001, the S&P 500 fell 11.88 percent. Scion was up 55 percent. The next year, the S&P 500 fell again, by 22.1 percent, and yet Scion was up again: 16 percent. The next year, 2003, the stock market finally turned around and rose 28.69 percent, but Mike Burry beat it again—his investments rose by 50 percent. By the end of 2004, Mike Burry was managing $600 million and turning money away. “If he’d run his fund to maximize the amount he had under management, he’d have been running many, many billions of dollars,” says a New York hedge-fund manager who watched Burry’s performance with growing incredulity. “He designed Scion so it was bad for business but good for investing.”

Thus when Mike Burry went into business he disapproved of the typical hedge-fund manager’s deal. Taking 2 percent of assets off the top, as most did, meant the hedge-fund manager got paid simply for amassing vast amounts of other people’s money. Scion Capital charged investors only its actual expenses—which typically ran well below 1 percent of the assets. To make the first nickel for himself, he had to make investors’ money grow. “Think about the genesis of Scion,” says one of his early investors. “The guy has no money and he chooses to forgo a fee that any other hedge fund takes for granted. It was unheard of.”

Burry found out that he has Aspergers at the age of 35:

[The diagnosis] explained an awful lot about what he did for a living, and how he did it: his obsessive acquisition of hard facts, his insistence on logic, his ability to plow quickly through reams of tedious financial statements. People with Asperger's couldn't control what they were interested in. It was a stroke of luck that his special interest was financial markets and not, say, collecting lawn-mower catalogues. When he thought of it that way, he realized that complex modern financial markets were as good as designed to reward a person with Asperger's who took an interest in them. "Only someone who has Asperger's would read a subprime-mortgage-bond prospectus," he said.

A new study of the blogosphere in 2008, finding some key differences between the structure of sites on right and left, whatever that means any more. Bottom line: the right has far more solo author blogs; the left has many more "enhanced platforms. Full details here.The Dish is both solo-authored – but with two under-bloggers; and has no reader interaction – except via email and edited and published entries. So I guess we're a blend of both.

Roger Ebert posts "Who Killed Bambi?," an un-filmed screenplay he wrote in 1977 framed around the Sex Pistols. Judy Berman plucks out "the 10 most disturbing quotes":

8. “SID VICIOUS
Come on, mum. Give us a kiss.

She does. And then she puts her free arm around him, and they begin the preliminaries of love making. It should be clear by now that this is not the first time such a scene has taken place between them. […]

9. “There is still some pogo-dancing, as seen before but now the predominant dance is the Grapple, in which the dancers pull each other’s hair, shake each other by the throat, and, in general, come across in a frenzied spasm.”

A word from the artist:

Comments are open, but I can't discuss what I wrote, why I wrote it, or what I should or shouldn't have written. Frankly, I have no idea.

Christopher Ryan, who blogs about "the evolutionary origins of modern sexuality" tries to explain why straight men are fascinated by "what are, after all, small bags of fat":

Theories range from the belief that breasts serve as signaling devices announcing fertility and fat deposits sufficient to withstand the rigors of pregnancy and breastfeeding to "genital echo theory": females developed pendulous breasts around the time hominids began walking upright in order to provoke the excitation males formerly felt when gazing at the fatty deposits on the buttocks.

Information Is Beautiful provides a visual.

Adam Serwer and Conor Friedersdorf are debating the topic. Here's Adam:

Any movement that claims to represent "Real Americans" but is 98 percent white is by definition going to have a definition of Americanness that is partially defined by race. Whether you call them "Real Americans" or "The Silent Majority," we all know what we're really talking about. Pat Buchanan's saving grace is that he's always had the stones to give the state of things without equivocation or evasion, without grasping for the plausible deniability of putting a few nonwhite speakers on the stage in order to foster the perception of diversity.

Jerry Coyne counters Sean Carroll:

It would be perfectly possible for organisms to evolve self-repair mechanisms that would render them immortal, and many species have gone partway to this end. Salamanders, for example, have evolved the ability to regenerate limbs, and I’ve already mentioned that organisms have evolved complex ways to repair mutations.  No matter what theory of ageing you have, it could be reversed without violating the second law of thermodynamics.

(Image: Walter Breuning, age 112, the oldest man in the world as of July 23, 2009/Getty)

A reader writes:

Is there any doubt that if Palin were asked what her favorite works of Beckett were she would say, "All of 'em?"

As Brown tries to save his party from third place in the electoral vote, Cameron is certainly showing signs of confidence, saying he would prefer to run a minority government than form a coalition with the Liberals. Some new polls show a slight return to normality with the LIb-Dems subsiding a little. Politics Home's poll of polls gives the Tories 35 percent to the LIberals' 29 and Labour's 27. But how all this plays out in a complex, seat-by-seat, region-by-region national election is extremely hard to measure:

The Lib Dem surge, along with claims by the Tories and Lib Dems that the Labour vote is going into freefall, has opened up many more possibilities for both opposition parties. 

“There are huge numbers of Labour to Lib Dem switchers, which gives us an advantage in seats you wouldn’t expect and we hope to exploit [that],” said one Tory source.

They say the changes mean that up to four seats may be in play in the North East, traditionally a no-go area for the Tories. In addition to Sunderland Central, they are Tynemouth, a longstanding target needing a 6 per cent swing to the Tories, Stockton South, needing 7 per cent, and Middlesbrough South, a 9 per cent swing.

I would not be surprised to see a small Tory majority. Why? Because this is a change election and they are the most likely practical vehicle for such change:

Voters are ready for a change of direction, with 70% agreeing with the sentiment "time for a change", against just 25% who say continuity is most important and want to stick with Labour. Many are also likely to vote: 68% of those polled said they were certain to cast a ballot on Thursday, and a further 9% said it was likely, which if it happens could see turnout rise well above the 61% recorded in 2005.

(Photo: Prime Minister Gordon Brown makes a speech to a Sunday congregation at the Church of the New Testament in Streatham on May 2, 2010 in London, England. By Lewis Whyld – WPA Pool/Getty Images.)

Templeton is holding a forum on whether whether moral action depends upon reasoning. Jonah Lehrer responds by looking at the brains of pyschopaths. He contends that reason is relevant but that the emotional core of our brains is key to morality:

Neuroscientists are beginning to identify the specific deficits that define the psychopathic brain. The main problem seems to be a broken amygdala, a brain area responsible for secreting aversive emotions, like fear and anxiety. As a result, psychopaths never feel bad when they make other people feel bad. Aggression doesn't make them nervous. Terror isn't terrifying. (Brain imaging studies have demonstrated that the amygdala is activated when most people even think about committing a "moral transgression.")

This emotional void means that psychopaths never learn from their adverse experiences: They are four times as likely as other prisoners to commit another crime after being released. For a psychopath on parole, there is nothing inherently wrong with violence. Hurting someone else is just another way of getting what they want, a perfectly reasonable way to satisfy their desires. In other words, it is the absence of emotion–and not a lack of rationality–that makes the most basic moral concepts incomprehensible to them.