“Trying to buy a mortgage bank in the midst of the subprime crisis was the equivalent of being a noodle salesman in Nagasaki when the atomic bomb went off. Not a lot of noodles left, or even a person, and that’s what happened to us on this deal.”

Story.

Three weeks ago (AMZN):

Currently (Bloomberg.com):

Saddest thing I read today (Schumpeter):

"[Bortkiewicz] was not a good lecturer, and his lectures, which he elaborated with a minute and conscientious attention to details all his own, were said to be delivered to rather empty classrooms.

His critical acumen made people fear him, but it hardly contributed to making them love him."

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FYI: In 1898 Bortkiewicz published a book about the Poisson distribution, titled The Law of Small Numbers. In this book he first noted that events with low frequency in a large population follow a Poisson distribution even when the probabilities of the events varied. It was that book that made the Prussian cavalry horse-kick data famous. The data give the number of soldiers killed by being kicked by a horse each year in each of 14 cavalry corps over a 20-year period. Bortkiewicz showed that those numbers follow a Poisson distribution. Some historians of mathematics have even argued that the Poisson distribution should have been named the "Bortkiewicz distribution."

It is in his work on Karl Marx - whom he simply saw as one descendant of Ricardo - that his claim to fame lies. Bortkiewicz's solution to the Marx's "Transformation Problem" (1907) is considered legendary, although it was ignored at the time. Bortkiewicz was also involved in other theoretical controversies - particularly against Böhm-Bawerk and the Austrian theory of interest and also against the Alfred Weber's theory of industrial location.

More here and here.

This paper* explains why modern societies are less polygynous than less-developed societies:

Men in less-developed economies prefer quantity over quality [=skill] in wives and children. The explanation is rather intuitive. Rich men in less-developed economies are not efficient at producing quality children because they tend not to have high human capital themselves. Therefore, they have a low demand for quality children and, consequently, a low demand for quality women who can help them produce quality children. As a result, women in less-developed societies are valued only for the quantity of children they can produce, and not the quality. This makes all women very close substitutes for one another, which keeps the price of all women low enough for richer men to acquire multiple wives.

In more advanced economies, richer men tend to have high human capital and, therefore, they are more efficient at producing human capital in children. This creates a high demand for quality in children and in women, because quality women are complements in the production of high-quality children. Thus, all women are not close substitutes in the marriage market in advanced societies. Higher-quality women are a scarce resource, which drives up their price in the market marriage market and makes polygyny less affordable for wealthy men.

The main implication of the model can be summarized as follows: male income inequality generates polygyny, but female inequality in the marriage market reduces it. As the return to human capital increases, women who can create high-quality children more efficiently are increasingly valued in comparison to low-quality women.

The main empirical prediction is that the composition of inequality, not just the level, is an important determinant of the degree of polygyny in society. Secifically, societies should be more polygynous in countries where variation in overall wealth inequality is determined more by differences in nonlaber income (capital and inherited wealth) versus income variation generated by differences in the levels and returns to human capital investments.

* Eric Gould et al., The Mystery of Monogamy, American Economic Review, American Economic Association, vol. 98(1), pages 333-57, March 2008.

Portfolio.com: Hedge funds are dragging defectors into ugly courtroom battles over trade secrets.

Eric Falkenstein isn't your typical 42-year-old hedge fund manager. Instead of trading stocks all day or courting new investors, he spends his time updating his blog, researching equity strategies, and talking to his lawyer. He's a hedge fund portfolio manager who is legally restrained from managing hedge fund portfolios. Click here to read the whole story.

My father has been hospitalized since shortly after our return from Cuba. He was in artificial deep sleep for more than a week but now he's already doing fine (Today: Tell mom I really need my laptop). The funny thing is that the hospital told us that everybody who was in Cuba should be tested for Legionella (they demanded the flight number as well) but the testing center said that it doesn't make any sense to test for Legionella in case nobody has any symptoms (fever, coughing, etc.). I wasn't too concerned about myself since the internet told me that the incubation period is 2-10 days.

Eric just send me a link to a story about a hotel located in the tourist corridor of Orlando that voluntarily closed its doors on Friday after two guests contracted Legionnaires' disease. Sample this:

"Legionnaires' disease causes death in up to 5 to 30 percent of cases".

That probably doesn't apply to developed countries, but still...

Nice, but deadly.

related items: My father's blog