Economic Rants

Free Online Documentary - The Fabric of the Cosmos

noreply@blogger.com (Cliff KT) — Sun, 15 Jan 2012 07:41:00 +0000

If Youtube, PPT, Tudou and all the other online video crap isn't enough for you, try this: http://topdocumentaryfilms.com. It is just a place that gathers some online documentaries. I was sad when I saw that its Economics section really sucked, with its main focus on financial crises, collapsing economies or run-away companies. No wonder people have such a negative view about the study of Economics!

Nonetheless, the website has some cool videos. It is like how I like to shop around in physical shops, because many a times, I don't know exactly what I want (my utility function is really fuzzy and unstable). Browsing through certain sections can lead me to other interesting stuff that I wasn't looking for initially. There are some interesting videos about history, psychology, philosophy, science, and many others.

There is an interesting documentary about physics http://www.youtube.com/watch?list=PL300BF5A42D3C21C4&v=rknAZFkm3UU&feature=player_embedded. This is the youtube link, but I got it from the previous website that I mentioned. I once read the book by the same author (Brian Greene), but I did not manage to get through the entire book. Had to get through my Master's thesis back then.

Singaporean and their cars

noreply@blogger.com (Cliff KT) — Sun, 08 Jan 2012 18:14:00 +0000

Singaporeans are obsessed with owning a personal vehicle, but this is something I find hard to appreciate. Cars are expensive to buy, drive, park and maintain. This excludes costs from accidents or car thief. Getting a driver's licence requires considerable effort too, costing around $2k minimum (rough impression). Most importantly, like every modern urban city, the surge in car-chasing has led to more frequent and heavier traffic jams eats up everyone's time and mind.

Singapore is really tiny. And with its acceptable public transport system, the private car obsession is incomprehensible. Much effort has been made to increase the costs of car ownerships, such as the right to own a car through Certificate of Entitlement (COE) to the right to use a road using electronic road price (ERP). Push factors. Singapore also plans to increase her subway network from the current 148.9km to 278 km by 2020.

Nonetheless, I understand I reside in a part of Singapore that has great access to public transportation systems. I live within walking distance to 2 train stations, of which one is directly connected to 3 different subway lines. In addition, I live 15-30mins to town/CBD area by train. Even during peak hours, I need to wait no more than 3 trains to be able to board, even on the worse raining days. Not many Singaporeans have such luxuries, and I can only praise my parents for their excellent residential choice.

I am still commonly advised to learn driving, especially at my age. I know its a skill I ought to. Unfortunately, things have not fallen into the situation where I just have to learn driving. Nonetheless, I reckon Singapore needs more people like me; those lazy to drive and willing to take the public commute. If not, cars and their usage will only cost more, and road speeds will only get slower. Without people like me, everyone will just suffer.

Ministerial Pay

noreply@blogger.com (Cliff KT) — Sat, 07 Jan 2012 15:45:00 +0000

In 2012, after a pay cut of some 30-50%, Singapore political leaders are earning around S$1million annual incomes. Some justify paying for the talent from the private sector, while others say this can help keep corruption at bay.

As logical as the reasons sound, many Singaporeans feel the sum is too high. I have no strong opinion on this. However, I agree with the government's statement that once given (payouts), it is hard to take back. Giving is always easier than taking away, because humans are inherently loss-aversion. That is why we do not have unemployment handouts. I believe the same situation applies for our ministerial pays. It reach this stage where Singaporeans are not happy about, and taking away makes those that entered for the money sick.

This the nation as it is. We value quality, talent, achievements, material gains. Like many things in Singapore, money is used, as like baby bonuses and military scholarships. Everything must be fast, efficient, now, and world-class. Our changing education system is suppose to place more emphasis on virtues and morals. This is the story we tell our kids. Yet, parents of some of our kids are split between money and their nations.

Free Ebooks

noreply@blogger.com (Cliff KT) — Mon, 02 Jan 2012 09:37:00 +0000

Lately, with time at hand, I have done some intensive Internet surfing. For example, my entry into the pay-per-click industry has shown me some very interesting websites. In addition, I found some interesting websites that span from task management, file transfers, site building to investment plannings and so on. Figured that its a good idea to share them here. I am going to start with free ebooks. There are 2 sites I like to recommend.

ManyBooks.net: the best ebooks at the best price, free! (http://www.manybooks.net/). This site can be found on the Amazon website too (http://www.amazon.com/b?ie=UTF8&node=2245146011).
E-book Directory (http://www.e-booksdirectory.com/).

I focus on only the books that I want. They are mainly economics, philosophy, mathematics, econometrics. Looking forward to look at physics books in the future. Definitely, you should not expect to obtain exactly the books that you get. But if you keep an open mind with several topics that you do not mind to peruse, then why not? Since its free anyway! (Of course, you have opportunity cost of reading.) Guess its really the time for me to get that Kindle that I always wanted!

Singapore's Education; IP Schools

noreply@blogger.com (Cliff KT) — Wed, 28 Dec 2011 13:02:00 +0000

A small island with no natural resources, Singaporeans are constantly reminded that "humans" are our only resource. Education stands to be a top priority of many Singaporeans families. The (not-so) recent hot topic in Singapore's education system is the integrated programmes (IP), where 12 year olds are selected into an institute that provides them with a safe track to an established Junior Colleges (JCs), and thus, a steadier path towards well-recognized universities.

Mergers and exclusive contracts are major corporate world activities, not just because of the huge underwriting profits for bankers, but also the possible anti-competitive nature of such actions. In essence, anti-competition is bad because consumers lose (e.g. pay higher prices for the same goods) at the expense of the producers. Why a sudden mention of mergers and exclusive contracts? Because the IP structure seems like form of vertical merger/exclusive contract, where upstream and downstream firms form a direct linkage in the production line. Basically, IP-JC sections hold "exclusive rights" to the products (bright students) from the secondary sections. More schools in Singapore are offering IPs, and many parents are worried that their late booming children are disadvantaged by the smaller number of good JC openings for their children later on.

Definitely, my approach of merging (pun intended) these two topics may not be very ideal, but I hope to only provide a different perspective at the same old boring issue (product differentiation). Maybe someone with more time can look into this issue from this angle, but this guy/girl should not be me (at least not in the near future). Some of the more interesting issues would include:

1) Do child have to score better grades just to enter the same JCs, aka grade inflation.

2) Are IP schools providing better education? Many worry that the IP curriculum weakens the students' ability to tackle exam questions necessary for the 'A' levels.

3) Are primary school kids more pressured now to excel to enter into an IP school, leading to possible burn-outs, post exam trauma, or even other psychological issues, such as poor self-esteem from not being able to enter an IP school. Not sure about the kids, but the parents seem much more pressured to get their kids into IP schools these days.

Lastly, I am glad that I am not a young student anymore. Seeing as an outsider, I cannot help but feel sorry and pressured for these young kids. I cannot expect how it will be like when I have my own kids though, but that, will be another story all together...

Reference point and Singapore's subway system

noreply@blogger.com (Cliff KT) — Tue, 20 Dec 2011 14:02:00 +0000

Reference point is common concept in psychology and behavioural economics. It explains how the mental anchors people hold will influence in their decision-making process. In simple terms, reference points postulates that human decision-makings are not independent of surroundings or situations.

Recently, I believe Singapore has saw an episode that Singapore's subway system, a 24 year well serving system, broke down not 1, not 2, but 3 times. within a week. Singaporeans, as usual, were up in arms. However, I believe that some of the negativity Singaporeans experienced during this fiasco are due to their own high expectations of subway system. Largely in part, this high reference point is some kind of winner's curse, where the strong track record of the subway system has bitten itself, with Singaporeans experiencing their virgin subway disruption of such a great scale. In this aspect, the system should not be faulted for being excellent in for the past 24 years. Other countries, noticeably UK and Paris (as reported in the local newspaper), have subways that have much higher frequencies of disruptions, and fares that are also much higher.

In addition, I guess the negativity also stemmed from other aspects of the transportation system itself. Yes, subway and cab fares rose less than 6 months ago, a topic that I hope to discuss about in a future entry. Yes, this subway disruption was drastic. Some blame the population growth. Yet, I do believe there are areas in which the system can improve itself. For one, how the disruption was handled could have been improved. However, I have no aim of addressing this. My point is this: Singaporeans are setting their expectations too high, which I postulate it to be from the extremely high reference point that Singaporeans are used to adhere and live by. Maybe, we have been living too comfortably.

Kim Jong Il's Death;Korean Won;Market Correction? (Part 2)

noreply@blogger.com (Cliff KT) — Tue, 20 Dec 2011 07:13:00 +0000

Working Day 2 of Kim's death. I was curious to see how else the market would react. Amazingly, the market corrected to post Kim's death rates! At this rate (pun indeed), I am definitely going to follow closely to the Singapore/S.Korean Won exchange rates for some time!

(Just as I ended this entry, I decide to take a look at other rates. A similar pattern was spotted for USD/S.Korean Won. Is the market that over-reactive and volatile? I am so glad I am not a forex trader, because I totally do not know the market!)

Kim Jong Il's Death; Korean Won; Structural Breaks

noreply@blogger.com (Cliff KT) — Mon, 19 Dec 2011 07:37:00 +0000

A picture paints a thousand words, but let me add a few other captions. Kim Jong Il died on Saturday, 17th December, 2011. On Monday, 19th December, 2011, this was the exchange rate between Singapore/S.Korea Won. I assume all other currencies to the Korean Won had the same effects. A structural break I presume, with worries about succession plans and the geo-political stability of the region.

NBA trades and agglomeration economics

noreply@blogger.com (Cliff KT) — Thu, 15 Dec 2011 13:56:00 +0000

The NBA lockdown finally was over, player trades sagas are coming in place, with some having seemingly season defying effects. looking at past seasons, From the Big 3 at Boston (KG, Ray, Pierce) to the Big Flukes in Miami (LeBron, Wayne, Bosh), even Shaq moving to Lakers, and subsequently the Heat, had great influences to the dynamics of the league. Early this pre-season, many are already shocked by Stern's decision to stop Chris Paul's trade to the Lakers. Indeed, restricting free labour movement within the 21st century capitalist state of the world seems just so obscene.

In thinking what motivates a player to move to another franchise, salary naturally makes the list. The "love for the franchise/city" and the franchises' "championship-winning material" definitely comes into play as well. Other influences include "their fit to franchise" and "wanting longer play time" perks. Other issues include the player's age, health, home town, and even utility functions, subjected to certain restrictive assumptions.

Let me take the pages off another Paul, Krugman that is. In his core-periphery model (first published in 1979), Krugman postulates that international trade (and in a somewhat linked fashion, industrial clustering) can occur from a combination of increasing returns to scale and 'love-for'variety' utilities. Here, I evoke a simple concept. One superstar's move to a franchise will up the franchise's "champion-material' ranking, thereby making that franchise more appealing to other like-minded championship hungry superstars. Jordan needed Pippen, Rodman, Harper and Longley. Kobe had Shaq and Gaso, Shaq had Waye, and Boston have a trio. Production towards the NBA championship (a huge winner-takes all production scenario) has a somewhat increasing returns to scale nature too!

Back to the present day NBA. Free market is sustainable because failures fails and winners remain. The Seattle Supersonics "died" (they became very OK-C), Hornets bankrupted (now owned by the NBA, which I think is why Stern had the power to do what he did), while Sacramento almost imploded at the end of last season. The idea of prevent talent clustering to make the league more competitive sounds reasonable, but it also seems to go against the ideas of agglomeration economics. I hope Stern ain't going to throw more intervention shocks this season again. Free market!!!!

Profit and Revenue

noreply@blogger.com (Cliff KT) — Wed, 14 Dec 2011 07:22:00 +0000

Humans have wants, but many fail to remember the costs involved in achieving them. It is worse when people envy the achievement of others without thinking about the pains they had gone through to obtain their achievements. I likened this to the idea of revenue and profits. Constantly, I see people wanting to maximise a certain form of revenue, such as obtaining that degree, the coveted job, that striking girl, without fully considering the costs involved. Totally, everyone is ignoring the idea of profit margins. Yes, we can maximise revenues, but people seem to not realise that this can be done at such a high costs that it will render the 'project' useless!

In short, I believe to achieve a more peaceful life, people should not overly focus on their wants (revenue), but on the costs involved in achieving them (profits). In Singapore, we constantly strive to be the best in everything. My take is that some times, its not too bad to come in second, aka winner's curse!

Lifestyles: Benny Lewis, Fluent in 3 months

noreply@blogger.com (Cliff KT) — Mon, 28 Nov 2011 13:55:00 +0000

I recently came across this very interesting website. A guy called Benny Lewis has been travelling non-stop for 9 years and trying to learn different languages from the places that he has travelled to. Interested people can visit http://www.fluentin3months.com/about/

Lewis questions the overly materialistic world (which I agree), and is proud of how his currently nomadic lifestyle. To a certain extent, I am envious of him. I agree that consumerism rarely leads to happier lives, and that attachments to gadgets only bring as much sorrow as they can bring happiness.

Before one concludes that this dude is not into money, do understand that travelling overseas costs money. He did mentioned that he has done several odd jobs in his travels. Interestingly, his efforts to promote his services (skype language consultancy) and products (language hack guides) are but just an Internet business that allows him to travel around the world. In fact, such is a very effective promotion gimmick: to put himself constantly in new environments to prove how his language hacks works! It does help that his blogs are interesting as well. Greater readership, greater possibility of having more business.

What touches me about him is his approach to his life, not settling for a secured job, but rather, looking to explore life to its fullest. To do so, he just needed to choose the correct 'career'. Kudos, Benny Lewis!

Economic Hitman

noreply@blogger.com (Cliff KT) — Fri, 25 Nov 2011 13:06:00 +0000

The book, "Confessions of an Economic Hitmen", got me really intrigued by the use of econometrics, and I have never looked back. This is a cute video version a sinister approach to economic imperialism.

The Language of Econs

noreply@blogger.com (Cliff KT) — Sun, 13 Nov 2011 08:38:00 +0000

Japanese and Korean have strong honorific forms, while English and French have female and male forms. C++ allows us to give computers instructions for certain tasks. Mathematics is just another language with certain structures particular to itself. Economists have chosen the language of mathematics in their pursuit of scientific discovery. They claim the logical structure of mathematics have allowed economics to develop into its current scientific stage. Take for example John Nash and game theory. Nash wasn't even an economist, but game theory is currently so embedded into modern microeconomics that one wonder who the hell understands them other than (well-trained) mathematicians.

I believe certain economic situations require the use of non-mathematics languages, because we are dealing with humans, not particles. Certain issues cannot be described by mathematics without losing its meaning, just like how the poetic styles of ancient Chinese cannot be translate to other languages without losing its literature beauty. Being semi-bilingual, it is obvious to me that certain languages are better suited for certain situations. Or maybe, I am just in-adequate in either language.

Despite my deep passion for economics, I have spent my few months wondering the true meaning of economics. Should I head back to the ivory realms of academic economics, or jump to other fields that work on economic issues, but through the lens of non-mathematicians.

Citing Paul Volcker

noreply@blogger.com (Cliff KT) — Sat, 12 Nov 2011 10:21:00 +0000

"If there is any profession that needs help, its the economic profession. Economists have got too caught up in esoteric mathematical models, and so have financial engineers. What there economists and financial engineers have forgotten is that an economy is not a physical system. Economic life does not follow normal distribution curves, where certain things are only supposed to happen once in 100 years. Economic life is ruled by human beings, who can be very awkward. We need to remember that economics is a social science, if it's a science at all."

Paul Volcker, when he was at a 90-minute dialogue at the Lee Kuan Yew School of Public Policy at the National University of Singapore.

Love Model

noreply@blogger.com (Cliff KT) — Sat, 12 Nov 2011 08:11:00 +0000

Economists love models. Here, I attempt to set up a simple descriptive model I call the "Love Search" Model.

Let M (for male) be seeking a quality long-term partner (not trashy one-stands). A few assumptions have to be made on M. Assume M only chases single girls of an age close to his. It is also assumed that once an M is attached to a quality girl, she does not re-enter the market. The model postulates that as M ages, his possibility of getting attached decreases, until it becomes zero by the time M reaches a certain age

This, of course, explains not the real world.

The first few assumptions boldly suggest that no "bastards"* exist. But they do, either as thieves of other Ms quality girls, or poor-maintainers of their own that cause quality girls to return to the market.
The probability of M getting hitched need not decrease with age if he is willing to marry ever younger girls, and this is commonly so in the real world.
A wrongful (standard) assumption is the stability of preferences, and this works both from Ms on quality girls and vice versa.
Asymmetical information on the availability of quality girls (and Ms) means Ms may have no access to quality girls at all.

Some advice for the lonely ageing Ms from this model (policy recommendations?). Be a "bastard", chase younger girls, adjust preferences, increase market information. This model could do with more refinement, but I had enough fun. Constructive comments are greatly welcomed.

A world re-known economist

noreply@blogger.com (Cliff KT) — Mon, 07 Nov 2011 16:36:00 +0000

I always found this video clip hilarious, because his textbook was the given text for my banking course during my undergraduate days!

I love Economics!

noreply@blogger.com (Cliff KT) — Thu, 27 Oct 2011 13:38:00 +0000

I really love Economics. Simple, elegant, beautiful, understandable; just about the characteristics that I look for in my soul mate (yes, understandable, which is may be why I am still single for so long). Unfortunately, modern day mainstream economics seems like a far stretch from the days of Adam Smith and John Stuart Mills.

In the name of scientific research, as they say. I don't hate it, the mathematics that is, but I feel that it sucks the life out of economics. Utterly disgusted by how some economic researchers do their work, as though the intellect of human endeavours can be easily map onto mathematical equations. I believe mathematical equations only serve well for the explanations of protons and atoms.

Of the many reasons I am starting this blog, I hope to remain in touch with my economic roots. I hope to jot down some of my thoughts about economics and how I relate them to my everyday (and sometimes not so everyday) activities. I will use minimal maths, but well, people should understand that its freaking difficult to produce equations on computers, what more those fanciful economic structures! Not that I was great in mathematics to begin with!

I plan to keep my entries short too. Intuitions shouldn't take took long, even without the aid of mathematics.