Explorations

The investment market in mortgage backed securities isn’t a simple coin flip, and it’s not a zero sum game — over time there will be more money around in the game than the players started with. It’s still essentially random — you don’t know who will default on a mortgage, you don’t know what else will happen, and as happened with Bear Sterns, you don’t know when the coin you’re flipping will start being unfair. But being essentially random, investment in mortgage backed securities will always have a certain small probability of a Gambler’s Ruin: no matter how big you are and how effective your risk management strategies might be, sometimes you will lose big.

A new article up at Pajamas Media.

Update: Full text below the fold.
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If someone finds ways to exclude any source of possibly disconfirming evidence from the realm of credible authorities, they are probably a crank. — Megan McArdle

Okay, I started out calling it Megan’s Law. I thought it sounded familiar.

My new article on Pajamas Media.

Update: Full article below the fold.

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That profound imaginative connection with the great void is one of the things that separates science fiction writers and fans from the unimaginative plodding mass of humanity.
—John Derbyshire

“Oh my God! It’s full of stars!”

My obituary for Clarke is up at PJM.

John Derbyshire’s is up at NRO. See also the quote of the day.

Update: Full article below the fold.

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Capitulation, n., (financial markets), When the losers, having lost all hope, solidify their losses by selling everything to the winners.

… to Rusty Warren, who most of you won’t remember.

Subject: Old fan, … who started as a very young fan here. I just found your web site because I was mentioning you in an article I’m writing about the music industry (for Pajamas Media); I’m glad to see you’re still around! Back a zillion years ago, my folks used to play “Knockers Up!” at parties, late at night, when they didn’t realize I was still awake. As a result, I was the only five year old boy in the state of Colorado who could sing the whole song.

My parents were not whole-heartedly pleased by this feat.

I’ll be ordering some CD’s shortly, and I’m really pleased, at this point, to finally be able to write you the fan letter I would have written you then — if I’d have known what a fan letter was, or, for that matter, how to write.

Best regards

Charlie Martin

I know I haven’t posted much this week. It’s been a big week for the day job; meetings and some new challenges, plus writing a technical paper or two. But I’ve got another PJM piece going in tonight — with luck, it will be published before too long — and I’ll have new Buddhism stuff coming soon. Honest.