Print Story Paint Your Dragon
By TheophileEscargot (Fri Aug 01, 2008 at 10:55:27 PM EST) Reading, MLP (all tags)
Reading. "Temeraire". "The New Paradigm for Financial Markets". Web.

What I'm Reading
Temeraire by Naomi Novik (originally published as "His Majesty's Dragon"). First in a series with a killer concept: alternate history, set in the Napoleonic wars, only with dragons providing an air force. Basically a cross between Aubrey/Maturin and the Dragonriders of Pern.

In tone it's more Anne McCaffrey than Patrick O'Brian: pretty light stuff, but compellingly written: read the first half in a single session. It's briskly paced too, without fantasy-bloat so far. Plot covers meeting, training and initial action as you'd expect.

A couple of minor downsides: beyond the combination there's not a lot that's original here. The characters are adequately drawn but a bit on the bland side.

Also not 100% convinced by the tactics and strategy of dragon warfare. They wear harnesses which airmen and sharpshooters treat like ships rigging, and store bombs harnessed beneath the belly. They fight by clawing at each other, sniping from the soldiers, sometimes boarding, and in a few rare beast by breathing fire or spitting acid.

But Novik wants them to fight like sailing ships: not sure 1805 muzzle-loading weapons would be much use in relative quick aerial warfare, unlike a naval battle where you can slug it out for hours. They fly in close formations so that smaller dragons can protect the heavies, which enemy dragons try to break up. That doesn't seem to make sense since bigger dragons have an advantage: surely you want them to engage the smaller attackers close up. And these tight horizontal formations seem way too vulnerable to attack from above: if you want to protect them, surely the escorts should be higher than the Longwing, so they can turn height into speed diving down to attack the attackers.

However, while they have wings it's mentioned that the dragons have sacs of lighter-than-air gases, so maybe they're more like airships than 'planes, and can't dive fast or move that fast; making ship-tactics more appropriate.

Also not quite sure about Napoleon's big plan to use the Battle of Trafalgar as a naval diversion, drawing the Aerial Corps away so that his dragons can airlift troops over the Channel. Surely without much cavalry and heavy cannon, and supply lines cut once the Corps return, even the Grande Armée would have pretty much screwed. On the other hand, the British militia and army were pretty small and not that great: it might have a brilliant stroke of genius from the Corsican Monster.

Will probably get the next one: the series is up to number 5 now. The Shelfari buzz seems to be that the series declines a bit with the later ones, but fans have been wrong before.

What I'm Reading 2
The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means by George Soros. Bit disappointing. Soros is a highly successful trader, but he regards himself as a bit of a philosopher too. His big idea is that humans, particularly acting in markets, have a cognitive function (what they think) and a manipulative function (what they do). Market bubbles occur because sometimes a misconception in the cognitive function can drive prices higher, which strengthens the misconception, which drives prices even higher, until things become unsustainable. The bust follows similar logic, but tends to be quicker. Because of this, markets are fundamentally unpredictable. He regards this as disproving the "Enlightenment Fallacy" that social institutions can be understood scientifically. Because of this "reflexivity", scientific methods cannot be used to predict the market.

Which is all very well, but "reflexivity" seems to me an awful lot like what mere scientists call "feedback". Now as it happens I agree with the conclusion, that you can't predict the market with an algorithm. But the logic he uses to draw it seems rubbish: you can model feedback in many cases with discrete simulations and plain old differential equations.

Now in some cases the feedback is chaotic, and chaos theory shows that you can't accurately predict it however good your simulation. A simpler problem affects people trying to beat the market with an algorithm: since anyone else can generate the same or a similar algorithm, the predictive power of the algorithm is included in the market.

So, I think Soros exaggerates the impact of his idea.

He also attacks the use of general-equilibrium models to describe markets in economics, since feedback can also generate bubbles. But to a degree he seems to be over-stuffing a straw man. He agrees that equilibrium models can be useful when a bubble isn't happening. But apart but a handful of the swivel-eyed (who think bubbles are caused by the evils of Regulation) pretty much everyone agrees that markets are influenced by both equilibrium and speculative bubbles. The disagreements are over how much weight to give each, how feasible it is to detect and prevent bubbles, and whether bubbles are useful. (Bubbles largely built the railway and internet infrastructure in the UK, for instance.) The book has very little space for those questions, which seem to me the most important.

The book also includes a certain amount of content on how his theory relates to the credit crunch. Here, his observations seem reasonable, but aren't really anything we haven't seen elsewhere. Regulators didn't do enough to stop high-risk debt being repackaged and disguised in complicated investment vehicles. They also relied on the same risk models as the banks/funds were using, which underestimated risks.

The remedies he proposes aren't particularly radical. He regards busts as undervaluing true prices, so thinks it's OK to for the government to prop up house prices to some degree, to minimize the overreaction. Central banks should try to provide some liquidity, reduce the damage to homeowners, punish shareholders to reduce moral hazard.

He shies away from making specific predictions. He doesn't there will be another Great Depression since governments will keep banks afloat. He thinks the dollar will cease to be the main reserve currency, and there will be a period of "turbulence".

Overall then, not a great read. If you want a criticism of market traders' fallacies, Nassim Nicholas Taleb's Fooled by Randomness is a much better bet. Joseph Stiglitz' Globalization and Its Discontents is a much more detailed critique of the global economic institutions. And while they got it out impressively fast (March 2008 is the last entry), with the credit crunch still unfolding, news and websites are going to be better than books for information on it.

Economics: Child labour may create poverty traps, but be protected by powerful lobbies.

Dilbert recycling.

Ugly stuff. Fractal octopi. Parasitized cicada (warning: gross).

Charles Stross roundup of Bechdel test, Frank Miller test, Healey test for female characters in fiction.

YouTube. Dark Knight reviewed by the Reel Geezers (Lorenzo scriptwrote the Adam West version). Interrogation spoof.

< So if there is everything | Mensiary Entry >
Paint Your Dragon | 22 comments (22 topical, 0 hidden)
Frank Miller test by ucblockhead (4.00 / 1) #1 Sat Aug 02, 2008 at 08:16:22 AM EST
Reading that bog...someone's got issues...

Funny thing is that the first movie I can think of that passes Bechdel test is Aliens, but I suppose Cameron always was into strong women. Though I do have one objection to that test in that romantic comedies, and things like "Sex and the City", utterly fail the test and yet are hardly designed to appeal to the "white male brain". But I guess that's the guy's point...that the excuses for the rule are bullshit.

I found the second link fascinating in that the part of the rule against nonwhite male actors is entirely dead.

I am very close to making a simple rule for Stross: If it has a female lead: read. If it has a male lead with a strong female character: avoid. He's good at strong female characters, but their interactions with geeky male lead are painful.

I read somewhere that if you had a enough of people randomly investing, you'd expect to see some make massive fortunes by pure chance. I think of that every time I hear advice from successful investors.
[ucblockhead is] useless and subhuman

Frank Miller Test by TheophileEscargot (2.00 / 0) #2 Sat Aug 02, 2008 at 08:54:55 AM EST
Years ago, I read a discussion between three female SF writers in Science Fiction Eye where they mentioned the prevalence of prostitutes in SF. One of them commented that prostitutes in SF serve the same function as in real life: they're a way for the writer to avoid having to deal with real women, emotions and relationships. The hero can just shag a prostitute and then everyone knows he's heterosexual without having to muck about with relationships.

On the other hand, another explanation might be that prostitutes are generally edited out of polite society and its fiction, but as "outsider art" SF and comics are allowed to be more realistic.

From my Watching tag, 3 of the last 10 movies I watched pass the Bechdel test. Oddly, Shakespeare seems to do quite well, in spite of living in a very male-dominated society.

Dark Knight FAIL
Troilus and Cressida FAIL
Hancock FAIL
American Gangster FAIL
Wanted FAIL
Henry V PASS (French lesson between maid and princess)
The Happening PASS (Alma and mad old lady)
Indiana Jones and the Kingdom of the Crystal Skull UNDETERMINED (Don't remember if Ex-wife and villainess swapped insults)
Henry IV Part Two PASS (Hostess Quickly and Doll Tearsheet)
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?

[ Parent ]
Judgement calls by ucblockhead (4.00 / 1) #5 Sat Aug 02, 2008 at 09:50:24 AM EST
Yeah, Indiana Jones passes barely, but I think there's a bit of a judgement call thing. Does a short, flip conversation count, or does it have to be a real one.

Also, do kids count? Aliens only passes if you count Newt as a woman.

In general, I think it only works as a guideline, not a rule. It is perfectly possible to make a feminist book featuring only prostitutes.

But the other thing is, I must read different SF because I don't seem to meet as many SF prostitutes as the test implies. Maybe it is because I don't do comics (And when I do, I read things like Sandman that easily pass the test.) I just checked Shelfari, and of the last ten SF/Fantasy books I've read, only one feature a prostitute (Steven Brust's Jhegaala) and in that case, it is a minor character and from an author who is no slouch when it comes to writing strong women.
[ucblockhead is] useless and subhuman

[ Parent ]
I don't tend to read by TheophileEscargot (2.00 / 0) #11 Sat Aug 02, 2008 at 11:33:10 AM EST
Much in the "heroic fantasy" or action/adventure SF anymore: everything I've read in the last year passes the Frank Miller Test.

But I think some of the David Gemmell fantasies I used to devour would probably fail. I remember one scene where a female character tries to seduce the hero, who refuses as he'll only go with prostitutes, so she gets a small coin from him to qualify.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?

[ Parent ]
So, by garlic (4.00 / 1) #14 Sat Aug 02, 2008 at 10:08:07 PM EST
Dark Knight, Wall-E, American Gangster are all 'good' movies. What does it mean that they fail the Bechamel (sauce) test?

[ Parent ]
I don't think it's particularly significant by TheophileEscargot (2.00 / 0) #16 Sat Aug 02, 2008 at 10:43:04 PM EST
For an individual movie. (Especially Wall-E, which has only three human characters and little dialogue.)

The significance is that for the majority of these movies, the female characters are not fully realized: their only significance is to motivate male characters somehow.

Rachel Dawes in the Dark Knight is there to give Harvey Dent and Bruce Wayne a source of conflict, then something to rescue, then something to avenge. As a human being, she's passive and dull. Primarily, she serves as a McGuffin: like the Crystal Skull in Indiana Jones, she's an object to be fought over.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?

[ Parent ]
There have been by ni (4.00 / 1) #3 Sat Aug 02, 2008 at 09:41:24 AM EST
a number of studies done of Warren Buffet-style value investing, which purport to show that its practitioners do much better than would be expected through pure chance. The question is talked about, anyway, and people have done analysis. I have little doubt that Warren Buffet, at the very least, has a significant skill that I do not.

"These days it seems like sometimes dreams of Italian hyper-gonadism are all a man's got to keep him going." -- CRwM
[ Parent ]
Buffett! Two 't's! /nt by ni (4.00 / 1) #4 Sat Aug 02, 2008 at 09:41:50 AM EST

"These days it seems like sometimes dreams of Italian hyper-gonadism are all a man's got to keep him going." -- CRwM
[ Parent ]
Damn by ucblockhead (4.00 / 2) #6 Sat Aug 02, 2008 at 09:57:42 AM EST
I was assuming some investment style where you pick a little of this, a little of that...
[ucblockhead is] useless and subhuman
[ Parent ]
I know by ucblockhead (4.00 / 1) #7 Sat Aug 02, 2008 at 10:03:00 AM EST
I'm just skeptical of assumptions that just because someone was successful they must know something the average investor doesn't. I always think of the old horse-racing scam, where you make 27 different predictions in the first race, 9 in the second, 3 in the third and then ask $5000 for the fourth prediction to the one guy you were right all three times on.

I have no idea about Soros. Does he use the same investment style?

I haven't read his book, but from the description, it doesn't seem to me like it shed much light beyond Mackay's description of the Tulip Bubble in "Extraordinary Popular Delusions and the Madness of Crowds".
[ucblockhead is] useless and subhuman

[ Parent ]
No, not at all. by ni (4.00 / 1) #8 Sat Aug 02, 2008 at 10:34:02 AM EST
As best I can tell, Soros is definitely clever, but his real advantage is having balls the size of Paraguay.

"These days it seems like sometimes dreams of Italian hyper-gonadism are all a man's got to keep him going." -- CRwM
[ Parent ]
There was an interesting Mankiw post a while bacl by TheophileEscargot (2.00 / 0) #9 Sat Aug 02, 2008 at 11:18:06 AM EST
Expert coin flippers:
...of the many thousands of mutual funds sold to the public, only 31 beat the Standard & Poor’s 500 index in each of the 8 years from 1999 to 2006. A skeptic of the efficient markets hypothesis might think that, subsequently, these funds would offer a better-than-average place to invest. In 2007, however, only 14 out of these 31 outperformed the index--about what would be expected from sheer chance...

Let me venture a guess about how many of the remaining 14 will see their winning streak continue another year: 7.

I'm not as confident as him about the efficient markets hypothesis though. It seems unlikely to me that markets are perfectly efficient: there must be some traders who have more information than others, or are better able to exploit group psychology.

However, there doesn't seem to be much empirical evidence for them. I suspect the effects are too small and short-lived to be detectable: as soon as one trader finds a better model or identifies a trend, the trick spreads rapidly through the rest.

One thing about value investing is that it doesn't try to predict future market movements in detail. It tries to identify objectively good companies, that happen to be undervalued at the current moment.

It could also be that the advantage of value investing doesn't come in a boom, like the period covered; but that the stocks it chooses are better able to weather a recession. If so, you'd only be able to identify a genuinely skilled investor (like Warren Buffet maybe) over a period of decades.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?

[ Parent ]
Coin flipping by ni (4.00 / 1) #13 Sat Aug 02, 2008 at 07:45:35 PM EST
This is pretty well known point among investors, even of the amateur sort -- it's a cherished argument of the Motley Fool people (an otherwise somewhat questionable source of information). I don't doubt that's it's generally true, but it may fail to take into consideration things that people (particularly corporate investors) value -- ie, stability, due diligence with respect to legal burdens, etc.

That said, I suspect that the spirit of the claim -- ie, that most mutual funds really suck, and that it is extremely difficult to determine which don't -- is true.

I'm not as confident as him about the efficient markets hypothesis though. It seems unlikely to me that markets are perfectly efficient: there must be some traders who have more information than others, or are better able to exploit group psychology.

Yes, this seems near certain to be the case, although the significance of the exceptions to efficiency remains unclear.

"These days it seems like sometimes dreams of Italian hyper-gonadism are all a man's got to keep him going." -- CRwM

[ Parent ]
definitely not by wumpus (4.00 / 1) #12 Sat Aug 02, 2008 at 04:24:17 PM EST
Soros trades currency. There generally isn't the type of "buy strong value and hold it" in that type of market.


If you find a way, give me a hint after you make a billion or two...

[ Parent ]
Soros by lm (4.00 / 1) #18 Sun Aug 03, 2008 at 12:06:05 PM EST
Soros is a bit of an oddball with regards to the world of investing. He actively takes steps to make certain that his bets turn out right. That isn't really possible in all markets but it is largely possible in certain markets such as currency trading provided you have enough capital in certain currencies.

Kindness is an act of rebellion.
[ Parent ]
Also by TheophileEscargot (2.00 / 0) #21 Mon Aug 04, 2008 at 08:46:26 AM EST
Soros admits that while he tries to be scientific, in practice when his back starts to twinge, he sells.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?
[ Parent ]
Shelfari by ucblockhead (4.00 / 1) #10 Sat Aug 02, 2008 at 11:31:23 AM EST
BTW: this is me on Shelfari.
[ucblockhead is] useless and subhuman
The most recent series I'm reading by garlic (4.00 / 1) #15 Sat Aug 02, 2008 at 10:15:56 PM EST
red, blue, green mars passes these tests. This is only chance. The books before that by Connie Willis failed the Bechdel test, but passed the other two tests. Bechdel seems to be the toughest one, followed by Healey. Anything that doesn't pass the miller test is messed up.

Randomed by foolishness by Scrymarch (4.00 / 1) #17 Sun Aug 03, 2008 at 02:24:44 AM EST
I guess I agree that you can't predict the whole market, over the long term, with anything less sophisticated than a Unified Field Theory ... which would probably be NP hard to calculate anyway ... However focusing on the cleanup only seems to be letting the financial industry and its regulators off a bit lightly. If we stretch the definition of economically conscious, I've paid attention to three economic bubbles and corresponding busts in my lifetime - the financial deregulation boom of 1980s Australia, the dot-com boom, and the current rich world housing boom.

In all of these cases there were pretty widely disseminated, and unsophisticated, fundamental value metrics which had the needle pointing to BUBBLE. I am thinking particularly of basic stuff like the price to no-earnings ratios of dot com stocks and debt levels and rental to price ratios of real estate. People even talked, uneasily, about it being a bubble. I suspect e.g. Buffett's skill lies is in identifying stocks that will survive or thrive in a downturn, indeed I think someone said this above, and secondly the force of will to stick by this investment when the crowd is still stampeding the other way. That second part is harder than it sounds in my experience.

Anyway given this, though the relevant quantitative tools might change over time as they are priced into the market, there seems to be more institutional inertia in pricing them in than would be implied by the usual efficient market theory stuff ... there also seems to be solid qualitative warning signs. On top of this, even if the market is chaotic in the technical sense, does that really mean we can't manage its behaviour at all? Doesn't it mean we just can't predict its day to day detail - in the classical physics example of two related pendulums you can still control the amount of energy in the system and the length of the pendulums ... likewise I think damping the impact of a coming crisis to make it less catastrophic than scads of people having to go bankrupt and lose there homes is still possible.

Bechdel test is brilliant. From recent reading / watching - Daughter of Time fails, Tin Tin and the Blue Lotus fails, most episodes of the West Wing fail though the season passes, maybe half the episodes of CSI pass.

Though I am certainly a fan, and perhaps a fanboy, the boot-sticking into Joss Whedon seems a touch excessive to me given this context.

Nice link on child poverty and the theoretical explanations for it being a poverty trap. I actually wonder if child employment is inherently bad compared to the volume of magazine reading that goes on in primary school. This is in reaction / response to John Taylor Gatto's book Underground History of American Education ... however the education implied by that book is one of apprenticeship complemented by education delivered in a much more devolved way, and not skipping your homework. So I wonder if there is room for both. Gatto seems to be reacting to institutionalization rather than schooling as such, but institutions just seem to be a function of densely populated history, hard to invigorate without more widespread and horrible collapses. Eg ends of dynasties, economic catastrophe etc. Scratch that even in Shandong province post-cultural revolution they built their institutional schooling straight back up again.

On fast dragons - wouldn't it be more like cavalry than Top Gun dogfights unless you had a machine gun equivalent?

Hmm I'm going to choose to believe the length of this comment is due to the quality of the diary not an attack of the rambles on my part.

The Political Science Department of the University of Woolloomooloo

Bechdel test by garlic (4.00 / 1) #19 Mon Aug 04, 2008 at 03:53:00 AM EST
I think a slight modification (show, with 2 african americans that talk to each other about (?)) means you come up with a whole new set of fails.

I think the only movie I own that passes the bechdal test is x-man. I own probably 20 movies.

[ Parent ]
Hmmm by TheophileEscargot (4.00 / 1) #20 Mon Aug 04, 2008 at 08:45:35 AM EST
Now that you mention it, most of the bubbles do seem to have been pretty well predicted. Not sure if there's some confirmation bias there though: have there been other things that looked like bubbles but weren't?

I suppose the question then is whether its feasible to do something about them. Interest rates seem a bit of a blunt instrument to attack a bubble in a particular sector like housing.

Trouble is, I can see it attracting a huge amount of hostility if the government tries to stop people making money, whether with dot-com stocks, house-flipping or the gold boom that's still ongoing.

On dragons, I'm beginning to rethink my objections. I think the small-dragons-protecting-large thing is actually due to Novik trying to copy WW2 bomber tactics. Don't think that really works either though. In a one-on-one a fighter has an advantage over a bomber, so it's best to protect a bomber with fighter escorts. However in a dragon one-on-one the big dragon has an advantage, so the whole thing falls apart really.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?

[ Parent ]
Sir, we may have gone a dragon too far by Scrymarch (4.00 / 1) #22 Tue Aug 05, 2008 at 04:58:30 AM EST
You may be right about confirmation bias, but I can't think of any bubbles that weren't unfortunately. There are plenty of "about to cut loose" sectors that never ended up eventuating though.

I'm sure puncturing asset bubbles would provoke hostility - so does making your home loan more expensive though. Interest rates are a blunt instrument. The problem with sharper instruments seems to be their tendency to have unintended consequences. Pre-monetarism all sorts of mechanisms were used to cool the economy, to the point of rationing retail home loans. They seem a bit wacky now but maybe after two massive asset bubbles inside two decades, and a few minor ones (LTCM) it may be time for a review ...

The Political Science Department of the University of Woolloomooloo

[ Parent ]
Paint Your Dragon | 22 comments (22 topical, 0 hidden)