A Predictive Model is Unnecessary

Last December we scrambled to serve 100 people at the community center.

Today only 20 people were waiting at the opening. However, the count eventually grew to 50 and banished any concerns we may have had about wasted food. Our guests went through the line for second and third helpings and accepted offers of leftovers to take home.

One woman explained that it wasn't an improving economy that diminished the number of diners. Tomorrow, September 1st, is Labor Day, which meant that September benefits were received on Friday. Last December's high demand occurred on Sunday the 29th; checks didn't come until the following Tuesday.

The development of a predictive model is unnecessary anyway. Knowing that every morsel will be consumed or taken home, we'll continue to prepare for 100. © 2014 Stephen Yuen

Don't Hurry Up, Wait

According to psychological research

the purchase of experiences appears to bring more happiness than the purchase of things.

"The anticipatory period tends to be more pleasant, more exciting, and less tinged with impatience for experiential purchases."

(Image from Schmoop.com)

Science confirms what the poet said 200 years ago about two lovers, frozen in time, who can never meet:

Bold Lover, never, never canst thou kiss,
Though winning near the goal—yet, do not grieve;
She cannot fade, though thou hast not thy bliss,
For ever wilt thou love, and she be fair!

From politics to sex to tech gadgets to books and movies, often it's not the experience itself but the anticipation that gives the most pleasure.

Presence of Mind

Severely depressed individuals often neglect themselves and those who are close to them. Though he was depressed enough to take his own life, Robin Williams had the presence of mind (and love for his children) to tend to his complicated finances before the final act:

Williams took steps to protect his children with the creation of trusts. Williams left behind three children, Zach, Cody and Zelda from two different marriages. The terms of the trusts, while private, have been reported in the press as paying out to his children in three lump sums. The trusts are structured so the children each received 1/3 of the value of his or her trust at 21, half of the remaining assets at 25 and the balance at age 30.

Trust funds are favored as an estate planning tool because they give you control over your assets, but unlike assets that pass through a last will, they are not subject to estate taxes.

In addition to creating trusts to secure his children’s financial futures, Williams also is known to have created a real estate trust, which he named the Domus Dulcis Domus Holding Trust (which translates to Home Sweet Home in Latin). Giving the trust a name with no link to him offered a layer of privacy protection. Both his home in Tiburon and his ranch were placed in the trust and will protect the family from estate taxes on the properties and provide them with important equity in the properties. If these properties were not held in trust, a large portion of the value could be due as estate tax, drastically reducing the family’s holdings.

Most celebrities' reputations diminish substantially after they die, but I suspect Robin Williams' star will shine brightly for a long time.

Petit Sets the Record

The Giants celebrate after a 4-1 victory over the Rockies.

We attend a few games at AT&T Park every year. Normally we sit in the cheap seats (<$30) with a group, eat, drink, cheer, and have a rollicking time. Today three of us splurged on tickets in the Field Club section ($100-$140). Not only is the perspective of the game different, so is the fans' treatment. Waiters take custom orders, and security guards keep a close eye on who enters and exits.

The game was marked by Giants pitcher Yusmeiro Petit setting the major league record for consecutive batters retired:

In the third inning of a 4-1 Giants victory, the 29-year-old right-hander with a fastball that rarely touches 90 mph set the record by retiring his 46th straight hitter, with a strikeout of former San Francisco farmhand Charlie Culberson.

Along the way, Petit broke the National League record of 41 that had stood since Jim Barr of the Giants established it in 1972.

Two pitches after Petit broke Mark Buehrle's big-league mark of 45, the streak was over. Rockies pitcher Jordan Lyles rapped a double to left, then scored on a Charlie Blackmon single, the only run against the Giants in their third straight victory.

We stayed well past the final out to enjoy the view. Everyone enjoyed the experience, and not just because the Giants won.

I fantasized for a few seconds about buying season tickets, but, after observing season-ticket holders leave in the eighth inning, realized that it's hard to maintain the euphoria over 81 home games (the economists call it diminishing marginal utility). But same time, same place, next year? Count me in. © 2014 Stephen Yuen

Confession of a Law-Breaker

An oil seal keeps sewer gas down

We are seeing (and peeing into--is that TMI?) more waterless urinals in restaurant and retail store bathrooms.

In my humble opinion the technology is far from perfect. Without regular flushing the equipment becomes pretty rank, especially if the air conditioning is sputtering. To be sure, the drought is forcing all of us to take actions (letting plants die, showering every other day, etc.) that we wouldn't otherwise contemplate.

Another thought: consider amending the laws against public urination, which is a crime in every state. It's not much of a nuisance if a person does his business in flora that is at a distance sufficient to conceal him from foot traffic. (Confession: I've broken the law three times in the past year, but hey, I'm saving water for the environment.) © 2014 Stephen Yuen

Foolhardiness Defeated, Applause is in Order

Before Hetch Hetchy valley was dammed. (Sierra Club photo)

Entranced by visions of a vanished valley of Eden, environmentalists put forward a 2012 San Francisco ballot initiative to drain the Hetch Hetchy reservoir.

It failed in a landslide, 77-23 percent.

Two years ago California's water shortage was already apparent. If the measure had passed, today's drought emergency would have made the destruction of the O'Shaughnessy Dam one of the most foolhardy acts in California's history (it supplies water to over two million people).

To prevent another chance of a single election in a single city from having such a catastrophic effect on the lives of a much larger population, the San Francisco PUC declared that the greater Bay Area has a say in the matter. Per the Mercury News:

the San Francisco Public Utilities Commission has approved a plan to block the draining of the famed reservoir unless the 26 cities and water districts in San Mateo, Santa Clara and Alameda counties that receive Hetch Hetchy water give their approval.

It's rare for the general welfare to prevail over powerful special interests, and rarer still for public agencies to cede power willingly to ensure that such interests remain stymied. Applause is in order. © 2014 Stephen Yuen

Worse Fates

Aging introduces men to the dismal cycle [bold added]:

A man in his 50s or 60s or 70s finds himself feeling sluggish and low. He’s eating or drinking too much, and his body doesn’t burn calories as fast as it used to. Next thing he knows, he’s overweight. The combination of mood and weight makes it difficult to stir up the energy for exercise, while lack of exercise only worsens his other problems. This dismal cycle wreaks havoc on his libido too.

Testosterone therapy is the latest cure for what ails us (yes, time has not bypassed your humble observer either):

T levels drop gradually as men get older. Isn’t it obvious that more T would mean less decline? This train of logic brings us to the frenzy of today: Men of the baby boom, top up your T levels and rock on! And give a nod to the ghost of Ponce de León as you reinhabit the hard and lusty body of your former self. Dude, I’ve got your fountain of youth right here.

Heart attack, stroke, and cancer are a few of the possible side effects of added testosterone, but many men accept those risks because they are unwilling to accept the poet's declaration:

For having lost but once your prime, You may forever tarry.

Caution: Men, as your flailings against Father Time become more desperate, don't become an object of pity. You'll find that there are worse fates than getting old.

Blissfully Unaware

At 3:20 a.m. the other three members of the household woke to the shaking. One began perusing information on the USGS website, another checked on the animals, and the third walked around the house, looking for items that had fallen. As for me, I slept the sleep of the blissfully unaware.

My lack of response to the Napa 6.0 earthquake perturbed the lady of the household: "Is this how you're going to react to a real emergency?" Her assessment of the quake is correct, by the way, the damage suffered by the wine industry is a real emergency.

I'm doing pretty well in abiding by one of my New Year's health resolutions to get enough sleep, but perhaps I'm overdoing it. It's not a real resolution if one enjoys it too much, n'est-ce pas?

The pct. of Jawbone UP wearers who woke up was proportional to distance from the epicenter. Like
others who live 70 miles from Napa, your humble observer is part of the majority who didn't wake up.

The Science is Unsettled

Possible answer to "one of the biggest questions in climate science" [bold added]:

why, since the turn of the century, average surface-air temperatures on Earth have not risen, even though the concentration in the atmosphere of heat-trapping carbon dioxide has continued to go up.

Drs. Chen Xianyao of the Ocean University of China, Qingdao, and Ka-Kit Tung of the University of Washington, Seattle, have uncovered evidence that an immense amount of heat is being stored in the Atlantic and Southern (aka Antarctic) Oceans, dampening atmospheric temperature increases over the past decade.

Subsurface temperatures are increasing faster than the temperature on the surface or in the atmosphere. Their study raises some important questions, such as:

How does this mechanism work?

Why doesn't the differential manifest in the larger Pacific and Indian Oceans?

When will the process reverse (Economist: "when it does, global warming will resume.")?

This amateur's opinion: the results from the global warming models aren't necessarily wrong, but they do not reliably incorporate important inputs that affect the Earth's temperatures, such as ocean-heat transfer mechanisms and sunspot activity.

Waiting for more information is often a delaying tactic, but leaping to action before obtaining and evaluating important information can have hazardous consequences, too.

Atlantic vs Pacific ocean surface/sub-surface temperature differentials. (Economist graphic)

© 2014 Stephen Yuen

Maru Ichi, Mountain View

Kuro ramen broth is black from roasted garlic.
Toppings: roast pork, egg, sprouts, stewed pork and cod roe

When in Mountain View and craving a bowl of ramen, we head to Maru Ichi on Castro. The noodles are fresh and the broth, especially kuro (roasted garlic) style, is tasty without needing the enhancement of MSG. The varied toppings are also a treat---it would require hours to assemble them at home.

The restaurant's policies of no reservations and cash-only do not deter the crowds; during peak periods the wait is at least 30 minutes. If the line gets too long, we sometimes abandon Maru Ichi for other excellent restaurants on Castro Street. But usually we wait it out; when you get a taste for something you just have to have it.

Out with the Clutter, Out with the Stress

Advice from professional "de-cluttering" consultant Barbara Reich [bold added]:

"It takes 20 to 30 hours to organize a house. If you think you're going to spend five minutes here and there, it will be undone in a minute." Instead, put a few hours on your calendar, she says, and honor the commitment the way you would a doctor's appointment. Then, play some music, enlist a friend to help, pour some wine — whatever works so you get cracking. Sort things into three piles — keep, toss and donate — and tackle what makes you most bonkers first. "After that," Reich says, "your anxiety level will drop exponentially and it's amazing how motivated you are to keep going."

She maintains that the things you own should be beautiful, useful or well loved. Reich has clients ask themselves these questions: Have I used or worn it in the past year? If the answer is no, out it goes. Is it justifying the space it's taking up in my house? No? Goodbye.

Reich grabs a stack of files and scribbles categories on the labels: medical, insurance, tax receipts. People like to make a separate file for every single thing, she says, but documents are more likely to get filed if you're not hunting for micro-categories, so the "car" file can include insurance, maintenance and expense records.

Next, Reich zeroes in on a horror she finds in almost every home: a plastic bin crammed with wires. No one ever knows what the electric cords and chargers in this box are for, she says, "but everybody is very afraid to throw it away." Get over that fear, Reich advises: "If you really need to buy another cord, you can go to Radio Shack. Cords are replaceable, but not your grandmother's vintage beaded purse.

The August/September 2014 issue of AARP, the Magazine, has other useful tips and tricks.

You'd better hold on to that box of electrical parts and wires, though; Radio Shack may not be around when you need it.

Network Analysis: Trade Alliances are More Stable

Network analysis supports what many political scientists have long suspected: international trade alliances are more effective than military ones at keeping the peace. Per Stanford economist Matthew O. Jackson:

"Once you bring in trade, you see network structures densify," he says. Nations form a web of trading alliances, which creates financial incentive not only to keep peace with trading partners but also to protect them from being attacked so as not to disrupt trade. "In the context of the alliances we have analyzed, trade motives are essential to avoiding wars and sustaining stable networks."

Protectionism has its appeal (save domestic jobs, keep substandard products off the market, reduce dependence on foreign suppliers, etc.), but not only does free trade produce economic benefits that outweigh the putative costs, it also is a strong preventative to war.

Disaster Preparedness

Firefighters demonstrate the danger of fallen power lines. 

We spent a couple of hours at the park on Sunday to attend the disaster preparedness fair. Checklists can be found on the City website, but there's no substitute for actually meeting the emergency personnel and getting a sense of their competence.

We talked to the geologist about earthquake science, were reminded to stock supplies for our pets, and got a coupon from Orchard Supply for the latest equipment (TV velcro straps, hand-cranked radios, water purifiers) to survive an earthquake and its aftermath.

The bad news: we were informed that the days were numbered for our landline and pulse-dial telephone ("it's our one phone that can operate if the power goes off say, during an earthquake"). Even if it were possible, I would never turn back the clock, but oftentimes progress makes us more vulnerable. © 2014 Stephen Yuen

Further Down the Line

A vehicle you don't want to see at your house

Early Sunday morning the kitchen sink was stuck. I ran the garbage disposal to no avail, then disassembled the U-trap and other pipes underneath. After scrubbing away 11 years of gunk---the sink was installed in 2003---I replaced the pipes and ran the water again.

Alas, the blockage persisted. The problem lay further down the line.

OK to try this at home....with a professional.

The Roto-rooter technician, Arnulfo, arrived in the early afternoon. He carefully laid out a rubber mat to minimize damage to the floor, then unreeled a mechanical drain cleaner that had a 90-foot cable; it also emitted a continuous stream of water to push the detritus into the sewer, which was an estimated 60 feet away.

I try to watch contractors not only to motivate them (that strategy seems to work, in addition to tipping, offering drinks, and buying lunch) but also to assess whether I would be able to handle the problem myself next time. It quickly became obvious: no, I can't. The $329 cost (no extra charge for nights or weekends) was higher than I expected; it was a bargain nonetheless.

Robin Williams, Episcopalian (!)

Robin Williams self-identified as one. Herewith his top 10 reasons to be an Episcopalian.

10.No snake handling.
9. You can believe in dinosaurs.
8. Male and female God created them; male and female we ordain them.
7. You don't have to check your brains at the door.
6. Pew aerobics.
5. Church year is color-coded.
4. Free wine on Sunday.
3. All of the pageantry - none of the guilt.
2. You don't have to know how to swim to get baptized.
And the Number One reason to be an Episcopalian:
1. No matter what you believe, there's bound to be at least one other Episcopalian who agrees with you.

Proving again that if it's funny it springs from truth.

A Gift to the World

Robin Williams, 1951-2014 (Time photo)

We started watching Mork & Mindy in the late 1970's and became instant fans of Robin Williams. We had seen improvisational comedy on Saturday Night Live and the Carol Burnett Show, but those TV classics could not consistently sustain their performances. Robin Williams was always funny. (Wikipedia: "Williams would make up so many jokes during filming, eventually scripts had specific gaps where Williams was allowed to freely perform.")

In his subsequent HBO specials, audiences marveled as he flitted from subject to subject in different voices and characters, comedy on a high-wire sans net. When he appeared on Carson, Letterman, or Leno, we always tuned in. Viewers did not know what to expect, and neither did the hosts.

Robin Williams was that rarest of performers. He couldn't be imitated: [bold added]

Most comics, then and now, honed their routines to letter-perfection. A few courted inspiration, and risked failure, with solo improv comedy. Mad-professor types like Brother Theodore and Irwin Corey turned their performances into rant-lectures that disdained punch lines and spiraled into twisted logic. Lenny Bruce and Richard Pryor were hipster social critics following their own elevated radar. Jonathan Winters, a Carson favorite (as dear Maude Frickert), was closest to Williams: he pirouetted from character to character, emitting more weird noises than a Warner Bros. cartoon soundtrack. The true brethren of these brilliant misfits were not stand-up comics but the most adventurous jazzmen. And if Bruce was the Louis Armstrong of solo improv comedy, and Winters the Charlie Parker, then Williams was Sun Ra, the farther-than-far-out composer who claimed he came from Saturn.

Of course Williams had a notion of what he would say onstage and often played unannounced gigs at comedy clubs to hone his material. But the safety net of even a discursive narrative was too confining for all the voices waiting inside to burst out, like Linda Blair’s devils in The Exorcist, but hilarious. Williams took the anarcho-improv impulse and flew with it–a Robin reaching the surreal stratosphere. When everyone else was analog, he was digital. That’s why his comedy had many admirers but virtually no imitators. Who else could even think of doing that?

Robin Williams pushed both his body and mind to its limits. He leapt, twirled, and gesticulated during a rat-tat-tat performance. Sweating profusely and guzzling water (?), he kept it up for 90 minutes. It would not have been surprising if he had died young from substance abuse, as did his friend John Belushi. But he survived the early attacks of his demons; from that perspective the past 40 years was a gift to the world. © 2014 Stephen Yuen

Only the Gullible

Yesterday I received one of the variants of the AOL phishing scam. The message said that my AOL mailbox had exceeded "it [sic] storage limit" (BTW, at least half the time scam messages have spelling and/or grammatical mistakes, which a real business would never tolerate in its official e-mails) and that I should "click here" to fix the problem.

What distinguishes this hoax is that it was supposedly signed by "AOL! CEO Marissa Mayer", who, of course, is actually the current Yahoo! CEO hired from Google two years ago. The message did garner a chuckle from yours truly before it was sent to the junk folder.

Why don't scammers, who have at least a modicum of skill and intelligence, proofread their appeals? Possible answer: their errors are a feature, not a bug. It's time-consuming for them to reel in a sucker "phish", so scammers don't want to waste time on intelligent skeptics who won't bite. Responders to the crudely prepared invitations are only the gullible, the theory goes. One counter-measure:

for as many people as possible to pretend, at least for a short while, to fall for the scam but not send money, thus increasing the number of expensive false positives the scammers have to deal with.

I'll add "stringing along the scammers" to the burgeoning list of things to do when I have more time.

Not a Breeze

Deer watch the passing parade.

After work I went to the park and walked five miles. The hilly terrain's highest elevation was 1,000 feet above sea level, according to the Garmin tracker.

While I puffed and sweated, high school cross-country teams breezed by. I didn't envy them their health or conditioning, just their very bright futures. Here's hoping that they make the most of them.

Maybe the Name Will Stick

Changing values often require a change in product name (e.g., Kellogg's Sugar Pops became Corn Pops or, in a more contemporary case, the Washington Redskins will change their name to something...anything...else).

Simply Lemonade® is a name that has appeal and perfectly describes the product.

However, Simply Lemonade® with Raspberry, or for that matter SLW Blueberry or SLW Mango, sounds awkward if one thinks about the meaning. Don't think, just drink, the manufacturer hopes, and maybe the name will stick. © 2014 Stephen Yuen

The End of the Beginning

My doctor orders the prostate-specific antigen (PSA) test as part of the blood work during the annual physical. PSA-screening isn't foolproof, though, and he couples it with the digital-rectal exam (advice: don't banter with the doctor while he's performing the DRE), to determine whether further tests are needed. Why do men go through this unpleasantness? "Prostate cancer is the second leading cause of cancer death in American men, behind only lung cancer."

Bert Vogelstein of Johns Hopkins wondered why there wasn't a blood test to screen for all cancer, not just that of the prostate. Such a test might have detected skin cancer early enough to save his brother. Tumor DNA leaves distinguishing markers, and Dr. Vogelstein researched how to sift for those markers, even in the extremely minute quantities of early-stage cancer.

For the first time, Hopkins researchers say, they are within reach of a general screening tool that could be used to scan broadly—perhaps at an annual physical—for molecular traces of cancer in people with no symptoms.

To be sure, significant problems need to be solved:

While the test may detect the presence of cancer DNA in the body, physicians might not know where the tumor is, how dangerous it is, or even whether it is worth treating.

The War on Cancer has lasted 43 years so far, and finally it's realistic to believe that it can be won during our children's lifetime, if not our own.

Gaia is Grateful, Too

When Microsoft ended its support for Windows XP earlier this year, I mothballed the 7-year-old Dell desktop, except for a few simple word-processing and spreadsheet applications that don't require an Internet connection.

Yes, I should probably scrap the Dell and its even older Okidata C6100 laserjet, both of which emit alarming noises at times---especially since a new, much faster system can be purchased for about $1,000.

But the fix-don't-replace mentality is deep-rooted. Uncertain about the result, I spent the weekend installing Windows 7 (disk cost, $100) on the old computer. The printer driver, Office 2007, and Quicken 2008 were reinstalled, and the data files were backed up and restored. Et voila! The set-up should be good for another two years at least.

And mother Gaia will be grateful, too, that her landfill was spared. © 2014 Stephen Yuen

Paul Martin's American Grill

Green salad

We were hesitant to go to Paul Martin's American Grill because of negative comments about the service and reported wait-times for a table even with a reservation (per Yelp and Open Table reviews). We are happy to report that you can't believe everything posted in social media---perhaps this restaurant reads and responds very quickly to negative feedback or maybe the problems go away when it's not too crowded.

When we arrived at 5:20 p.m. for our 5:30 reservation, we were seated immediately.

Prime rib with mashed potatoes

The only drink we ordered was Pellegrino sparkling water; when our waitress Maria asked if we wanted lemons or limes as an accompaniment and saw that we were uncertain, she brought both. That was just an example of her thoughtful service---it's a delicate balance between obtrusiveness and inattention, and she navigated it well without interrupting our conversations.

We both ordered the 3-course Sunday Prime Rib prix fixe special ($25), an excellent value. The green salad (arugula, spinach, lettuce, beet leaves) was very fresh. The 12-oz prime rib was tender and medium-rare (it wasn't aged--c'mon, whaddaya expect for $25 bucks?), accompanied by a generous scoop of mashed potatoes. Dessert consisted of three scoops of ice cream.

The decor in the bar and dining sections is fancy enough for business clientele. However, because the restaurant is located in a corner of Hillsdale Shopping Center, very casual dress (jeans, t-shirts, slippers, etc.) would not be out of place.

For our first and only experience at this 1½-year-old restaurant, service and food were great, and prices were reasonable. We'll be back. © 2014 Stephen Yuen

Hoarding: Sometimes It Makes Sense

Waiting for Costco to open.

Defensive pessimists stocked up. Optimists rode out to meet the waves. The optimists' assessment was right this time: there was no major damage from tropical storm Iselle.

Dad bought supplies and an emergency kit. Other family members dropped off more stuff before the storm hit the Islands on Friday. Well, at least he won't have to buy bottled water for another year. © 2014 Stephen Yuen

Hau'oli La Hanau

My kid brother now sports some wrinkles and a little gray around the temples. He was born on an auspicious date (8/8), and good luck--at family, work, and leisure--seems to have followed him throughout his life. Actually, he's had his share of struggles and misfortune, but through perseverance and a sunny disposition has made his own luck.

Happy birthday, Rich!

Water Quality

The buildup after three months.

Foster City's latest water quality report shows the levels of all contaminants to be well below the maximum level (MCL) allowed for drinking water. That may be true, but slowing hot-water flow and the water heater screen reveal that the algae content has increased substantially over the past three years. As the reservoirs become shallower, the particulate density has gone up.

The plumber said that an annual cleaning should be sufficient, but 3-4 times a year seems to be what is needed to keep the hot water flowing.

Another consequence of one of the most severe droughts on record.

After the cleaning.

© 2014 Stephen Yuen

Signs and Counter-Signs

Hunter Pence scoots home (SFGate photo)

Since his arrival in San Francisco two years ago, rightfielder Hunter Pence has been a fan favorite. Not only did his bat help the Giants win a World Series title in 2012, he became the club's morale leader. He cheers loudly for his teammates. He makes every play, regardless of the score, as if the game depends on it. The Giants rewarded him with a $90-million 5-year contract at the end of 2013.

Hunter Pence also is known for his quirks. He's constantly moving, whether in the batter's box or on the bases. (His twitchiness disconcerts the opposition, and more players probably haven't adopted his style because it doesn't look dignified.) He rides a scooter to AT&T Park, and its theft earlier this year (it was recovered a week later) became a minor cause célèbre.

But his biggest claim to fame may have nothing to do with baseball. On August 1st Hunter Pence tweeted "These pretzels are making me thirsty", an oft-repeated Seinfeld line, from a New York diner. It immediately spawned a cottage industry of playful insults--a few from the Seinfeld show but more often not---that greeted Hunter Pence in New York and every road ballpark since.

"These pretzels are making me thirsty" ☕️ pic.twitter.com/Jetepgk9UJ
— Hunter Pence (@hunterpence) August 1, 2014

The Twitter hashtag is #HunterPenceSigns.

#HunterPenceSigns pic.twitter.com/4K3z86uI6q

— Kevin List (@klist94) August 6, 2014

Hunter Pence admirers can get in on the act, too.

#HunterPenceSigns #PenceDefense I am tired of all this bashing of a guy who runs out every ground ball. pic.twitter.com/Y0GjT0sih1
— Stephen Yuen (@stephenyuen) August 8, 2014

A Mix of Both

The conventional wisdom: "optimism results in better health outcomes, physical and mental." However, the conventional wisdom may be wrong [bold added].

A study published last year in the journal Psychology and Aging found that older people with pessimistic views of the future were more likely to live longer and healthier lives than those with a rosier outlook....When looking at respondents older than 65, a total of about 1,300 people, the researchers found that the likelihood of surviving or remaining healthy increased by about 10% for those who were more pessimistic.

Researchers speculate that pessimists are better-prepared for calamities. Optimists with "a nonchalant attitude to dangers can leave the person poorly prepared to deal with a risky situation when it arises."

Your humble observer is not sure the "science" of optimism/pessimism can progress much beyond the point of saying that a mix of both leads to a healthier, happier life. For example, I invest in stocks (implying optimism about the future and belief in my stock-picking abilities), yet (pessimistically?) do not buy only one stock, or for that matter, put all my savings in the stock market.

For the record I am a defensive pessimist (WSJ graphic below).

Novel Accounting

The Economist describes the "novel accounting" by the Environmental Protection Agency (EPA) concerning the EPA's proposed greenhouse gas regulations [bold added]:

the Environmental Protection Agency routinely applies a cost-benefit test. Its sweeping proposal to cap greenhouse gas emissions from existing power plants appears to pass with flying colours. By the EPA's reckoning, the rule will, by 2030, cost just $7.3 billion to $8.8 billion a year (in 2011 dollars), while producing benefits worth $55 billion to $93 billion per year.

But this calculation rests on a novel calculation of the benefits of reducing greenhouse gases that takes regulatory policy into contentious new territory. As calculated, the costs are borne entirely by Americans, but the benefits accrue to the whole world.

Comments:

1) A frequent criticism of government that bears repeating: if a business were to do its accounting this way, the executives would be prosecuted by the SEC and thrown in jail, after much public shaming. [For example, Google's free search engine benefits humankind by $XX billion, so EPA-style accounting would allow Google to add that amount to its revenue.]

2) The U.S. will be in a position to eliminate its foreign-aid budget since according to the EPA the world will be receiving new benefits of at least $55 billion per year (minus the U.S. share of about 20%).

3) The current EPA budget is $8 billion. The greenhouse gas regulations alone, by the EPA's own reckoning, would cost Americans about the same amount. The latter $8 billion of regulatory cost is a small fraction of the economic cost of existing air, water, and land use regulations (for instance, Environmental Impact Reports add months, if not years, of delay to every major construction project). We are not saying that there are no benefits to protecting the environment, just observing that the true cost of government vastly exceeds the amount that it spends.

Unique Explanation

(Brentwood Cathedral image)

This morning's lesson was about the most famous bad hip in history [bold added]:

That night Jacob got up and took his two wives, his two female servants and his eleven sons and crossed the ford of the Jabbok. After he had sent them across the stream, he sent over all his possessions. So Jacob was left alone, and a man wrestled with him till daybreak. When the man saw that he could not overpower him, he touched the socket of Jacob’s hip so that his hip was wrenched as he wrestled with the man. Then the man said, “Let me go, for it is daybreak.”[Gen 32:22-26]

So Jacob called the place Peniel, saying, “It is because I saw God face to face, and yet my life was spared.” The sun rose above him as he passed Peniel, and he was limping because of his hip. Therefore to this day the Israelites do not eat the tendon attached to the socket of the hip, because the socket of Jacob’s hip was touched near the tendon. [Gen 32:30-32]

Comments:

1) After being out all night, Jacob stumbled home after "daybreak." Any married man in the same circumstance, either today or 3,000 years ago, would know that he had better be ready to answer two questions, Where have you been? and What happened to your hip? Jacob's answer--that he was wrestling with a strange man who could have been an angel or even God Himself--was so dumbfounding that listeners were compelled to accept it.

2) Jacob's ailing joint would be treatable today with exercise, icepacks, anti-inflammatory drugs, and even hip-replacement surgery. The physical symptoms are commonplace....but his explanation is still unique.

Financial Markets: There's Nowhere to Hide

The history of Wall Street is littered with financial products that work well in theory and then when they are introduced on a small scale. Next comes the overhyping by salespeople who don't (and may not want to) understand the risks. Sales ramp up to customers who have even a smaller understanding but who are enamored by prospects of high returns. At some point an event sparks some selling in these "low-risk" assets, buying dries up, panic selling ensues, then governments must step in to save the entire system.

We saw this pattern in 1987 with portfolio insurance and in 2008 with mortgage-backed securities and collateralized debt obligations.

Now there are warnings about exchange-traded funds (ETF's):

these funds rely on a complex Wall Street trading ecosystem. An investor never trades directly with the fund company; instead, shares are created or redeemed through major investment banks and brokerage houses, such as Goldman Sachs. These firms, called authorized participants, or APs, are always a step removed from the end investor, and function as the ETF market's hidden chemists. Their buying and selling securities in exchange for ETFs is what keeps ETF prices accurate and close to the index a fund is supposed to track.

The specific task of APs is to exchange baskets of securities for ETF "creation units," which are sliced up for purchase by individual investors, advisors, and small institutions. APs also do the same in reverse, retiring unwanted ETF shares by exchanging them for the underlying assets.....The result is that exchange-traded fund prices mostly hew to the value of their underlying baskets, thanks to arbitrageurs who boost the supply of ETF shares when they're in demand (as exhibited by an ETF's price rising above the fair market value of its assets) or reduce it when an ETF's share price sinks below net asset value.

When there are many buyers and sellers of shares of both the ETF's and the assets that ETF's hold, all is well. But the words "complex Wall Street trading ecosystem", "creation units," and "arbitrageurs" should be setting off alarm bells to experienced observers of the Wall Street scene.

For our own portfolios we can try to limit the damage by avoiding ETF's altogether, but as recent events have taught us there's nowhere to hide.

About the Best We Can Hope For, From a Politician

Former Massachusetts Representative Barney Frank:

"My political motto, very simple. I have always told the truth, and nothing but the truth. But I don't volunteer the whole truth in every situation."