Wednesday, November 30, 2011

Alan Greenspan's nirvana

I wrote a post a while back exploring some of the silliest things economists were saying before the crisis about how financial engineering was making our economy more robust, stable, efficient, wonderful, beautiful, intelligent, self-regulating, and so on. The markets were, R. Glenn Hubbard and William Dudley were convinced, even leading to better governance by punishing bad governmental decisions. [How that could be the case when markets have a relentless focus on the very short term is hard to fathom, but they indeed did assert this]..

Paul Krugman has recently undertaken a similar exercise in silliness mining -- in this case going through the hallucinations of Alan Greenspan. The Chairman of the Fed was evidently drinking the very same Kool-Aid:
Deregulation and the newer information technologies have joined, in the United States and elsewhere, to advance flexibility in the financial sector. Financial stability may turn out to have been the most important contributor to the evident significant gains in economic stability over the past two decades.

Historically, banks have been at the forefront of financial intermediation, in part because their ability to leverage offers an efficient source of funding. But in periods of severe financial stress, such leverage too often brought down banking institutions and, in some cases, precipitated financial crises that led to recession or worse. But recent regulatory reform, coupled with innovative technologies, has stimulated the development of financial products, such as asset-backed securities, collateral loan obligations, and credit default swaps, that facilitate the dispersion of risk.

Conceptual advances in pricing options and other complex financial products, along with improvements in computer and telecommunications technologies, have significantly lowered the costs of, and expanded the opportunities for, hedging risks that were not readily deflected in earlier decades. The new instruments of risk dispersal have enabled the largest and most sophisticated banks, in their credit-granting role, to divest themselves of much credit risk by passing it to institutions with far less leverage. Insurance companies, especially those in reinsurance, pension funds, and hedge funds continue to be willing, at a price, to supply credit protection.

These increasingly complex financial instruments have contributed to the development of a far more flexible, efficient, and hence resilient financial system than the one that existed just a quarter-century ago.

As Krugman notes, this can all be translated into ordinary language: "Thanks to securitization, CDOs, and AIG, nothing bad can happen!"

Progress in the Guest Room

A couple of months ago we took our scary storage/ workout room....


...And turned it into a guest room.  We started by tearing out the drop ceilings & then having the walls & ceiling re-drywalled.  A closet door  was also added to hide the massive storage closet/ understairs storage.  We took our old guest room and turned it into another office for me & my assistant, Meghan.  (We are still waiting for our furniture to arrive in the office but I'll post pics when we're finished!)

The guest room is pretty much a hodgepodge of things we already had, with the only new item being the linen curtains I had made out of my new Thistle fabric.  I used the vintage wooden dresser I found a while back & truth-be-told, it's stuffed with off-season clothes.  My wooden lady (who is super-heavy) makes me happy:



We're still missing one of the most important elements in the room- the headboard!!- so I have to warn you that the pics really don't look that great, but I'm excited about the progress we've made & wanted to share.  (The pics are also really grainy- sorry!!!)  It's a very tiny room so just room for a bed with a small trunk at the end.  (Which I couldn't even fit into a picture)  I used white/cream bedding we already had & have been having fun layering the bed with different quilts to suit my different moods.  Right now I wanted sort of a Fallish-Bohemian feeling so I used a couple of old vintage quilts.  Here's a blurry pic I snapped of the half unmade bed this morning:


{The quilts are vintage and the 2 boudoir pillows are in a Peter Dunham linen}

I used my favorite pair of massive glass lamps on either side of the bed & was able to just fit in our pedestal table along with the dresser:

{The window isn't centered in the room so we had to go with two totally different sizes of end tables...  Since we were using pieces we already had, the pedestal table is a bit shorter than I'd like so I raised the lamp up with some books to make it more even with its mate.}

I have a collection of old mushroom prints on one wall and wooden printers' trays that the boys & I are working on filling with natural objects on the other, so I'll be sure to share overall pics when we're "finished."  I'm planning on doing a headbaord upholstered in warn oatmeal linen that will stop right at the window sill.  I'm debating on on its shape because I am still to excited over my curtains to cover them up too much with a straight headboard so it will either be rounded or I'll cut out the corners.

Here's a close-up of the curtains in Thistle in Sepia & I'm pretty excited to see them in there:

{I chose them because I could mix them with just about any colors I wanted when my moods change}

Anyway, I'll share more when there's more to see.  I hope you liked it & that you're having a great week!!  I also took a few more photos the other day of one of our most recent installs & will be sure to share.  My client's bedroom turned out beautifully & is really different from this one, so I'll try to post soon.


xoxo, Lauren

If you're interested in purchasing any of my fabrics, you can visit my online store here.

If you'd like help creating a home you absolutely love, contact me about our design services.

Bail out everyone

I had wondered about this idea a couple years ago -- but that's all I did, wondered about it. The idea is that when banks need bailing out -- and sadly, we seem stuck with that problem for the moment -- we shouldn't bail them out directly, but indirectly. For example, just give every single person in the US $1,000. Or maybe a voucher for $1,000 that they have to spend somewhere, or put in a bank. This quickly amounts to $300 billion infused into the economy, a large portion of which would end up in banks. So cash would be pumped into the banks too, but only through people first.

You can imagine all kinds of ways to play around with such a scheme. Paying off some of peoples' mortgages. The amount injected could be much larger. Perhaps similar funds would be injected directly into banks and other businesses as well. Mark Thoma has thought through some of the details. But I'm quite surprised this is the first I've heard about any idea even remotely like this. It seems like a much better idea than just giving money to the bankers who created the problem in the first place. Why don't we hear more about such possibilities?

Modern European Tragedy

The endgame playing out in Europe is a tragedy in the usual sense, but also in the sense of Greek tragedy -- downfall brought about ironically through the very efforts, perhaps even well intentioned, of those ultimately afflicted. It's terrible to see Europe looming toward disaster, but also utterly fascinating that everyone involved -- Greeks, Germans, French, the European Central Bank -- has acted in what they thought was their own interest, yet those very actions have led the collective to a likely outcome much worse for all. A tragedy of the commons.

Philosopher Simon Critchley has written a brilliant essay exploring this theme more generally. Among the most poetic analyses of the situation I have seen:
The euro was the very project that was meant to unify Europe and turn a rough amalgam of states in a free market arrangement into a genuine social, cultural and economic unity. But it has ended up disunifying the region and creating perverse effects, such as the spectacular rise of the populist right in countries like the Netherlands, for just about every member state, even dear old Finland.

What makes this a tragedy is that we knew some of this all along — economic seers of various stripes had so prophesied — and still we conspired with it out of arrogance, dogma and complacency.  European leaders — technocrats whom Paul Krugman dubbed this week “boring cruel romantics” — ignored warnings that the euro was a politically motivated project that would simply not work given the diversity of economies that the system was meant to cover. The seers, indeed, said it would fail; politicians across Europe ignored the warnings because it didn’t fit their version of the fantasy of Europe as a counterweight to United States’ hegemony. Bad deals were made, some lies were told, the peoples of the various member countries were bludgeoned into compliance often without being consulted, and now the proverbial chickens are coming home to roost.

But we heard nothing and saw nothing, for shame. The tragic truth that we see unspooling in the desperate attempts to shore up the European Union while accepting no responsibility for the unfolding disaster is something that we both willed and that threatens to now destroy the union in its present form.

The euro is a vast boomerang that is busy knocking over millions of people. European leaders, in their blindness, continue to act as if that were not the case.

Tuesday, November 29, 2011

I now work for the Sol Price School of Public Policy as well as the Marshall School of Business at USC

The Price Family gave a $50 million gift for the USC School of Policy, Planning and Development to be remained the USC Sol Price School of Public Policy.  Mr Price was an alum of USC, as is his grandson.

Mr. Price was the force behind Price Club, which later merged with Costco.  He was known for paying his workers well, treating his customers well, and not overpaying his executives.  He was ahead of his time with respect to racial integration and urban renewal.  Sometimes I feel an internal tension, because I admire both success in business and care a lot about social justice.  If all successful people in business were like Mr. Price, I would feel no such tension.  His obituary in the San Diego Jewish World contained the following:
“Most of life is luck,” he said in an 1985 newspaper interview. “Obviously you have to have the will and intensity, and in my case discipline and idealism had a lot to do with it. But if you move back a step, even that is luck."
I can't think of a better way to look at life.  And whether you need mustard or Johnny Walker Black, there is no better place to go than Costco.  I am proud to now work at a school named for him.





Why I think Raphael Bostic is more likely right about FHA than Joe Gyourko/AEI/WSJ

A healthy debate has taken place between HUD Assistant Secretary Raphael Bostic and Wharton Professor Joe Gyourko on the financial future of FHA.  While FHA is thinly capitalized, Raphael argues that will likely survive, while Joe thinks a large taxpayer finance bailout is looming.  In the interest of full disclosure, I should note that Raphael is a colleague of mine at USC, but Joe invited me to be a visiting faculty member at Wharton for a semester.  I think highly of them and am grateful to them both.

I have two reasons to bet on Raphael's view:

(1)  At the time the dumbest mortgage business was being done, FHA was out of the picture.  While FHA's market share is typically in the neighborhood of 12-15 percent, during the period 2003-2007, its market share ranged from 3.77 to 9.66 percent.    FHA did not lower its underwriting standards to that of the shadow banking sector (a sector that was not subject to the Community Reinvestment Act, by the way) in order to keep market share--the government insurance program was far more disciplined than the private sector.

FHA's market share increased dramatically in 2009 and 2010, in large part because the private sector abandoned the low downpayment market.  In 2010 in particular, FHA gained market share despite raising its prices and tightening its underwriting.    FHA was also ramping up its market share after house prices collapsed.  While house prices have not been robustly rising since late 2008, they have not been falling precipitously either.  One could argue that the private sector has been backward looking, while the public sector has been more forward looking.

(2) The second reason I have is more speculative, and is something that I am currently in the middle of researching, but I want to put it out there as a hypothesis (and a hunch).  I suspect that there is such a thing as "burn-out" in default--if a household goes through a difficult time without defaulting, it becomes decreasingly likely to default.  Part of the reason for this is amortization, but that is a small reason.  More important, people who refuse to default even when their measured characteristics suggest that they should have revealed that they are "different," and in a manner that is unobservable.  

Now again, in the interest of full disclosure, I should note that I did not forecast the size of GSE losses, so maybe I shouldn't be taken that seriously.  But I think my first argument will stand up, and as I do more research, I will know more about the second.


Another Simple Food Weight Loss Experience

Whole Health Source reader Sarah Pugh recently went on a six-week simple food (low reward) diet to test its effectiveness as a weight loss strategy, and she was kind enough to describe her experience for me, and provide a link to her blog where she discussed it in more detail (1). 

Consistent with the scientific literature and a number of previous reader anecdotes (2), Sarah experienced a reduction in appetite on the simple food diet, losing 15 pounds in 6 weeks without hunger.  In contrast to her prior experiences with typical calorie restriction, her energy level and mood remained high over this period.  Here's a quote from her blog:
Well, it looks like the theory that in the absence of nice palatable food, the body will turn quite readily to fat stores and start munching them up, is holding up. At the moment, the majority of the energy I use is coming from my insides, and my body is using it without such quibbles as the increased hunger, low energy, crappy thermo-regulation or bitchiness normally associated with severe calorie restriction.
I can't promise that everyone will experience results like this, but this is basically what the food reward hypothesis suggests should be possible, and it seems to work this way for many people.  That's one of the reasons why this idea interests me so much.

Read more »

Monday, November 28, 2011

The end of the Euro?

Three interesting articles on what now seems to be considered an increasingly likely event -- the end of the Euro (in its current form, although some version might arise from the ashes).

First, Gavyn Davies speculates on several possible scenarios for the collapse of the Euro. It might persist as the new currency of a smaller union including Germany and The Netherlands (in which case the value of the Euro would rise significantly), or it might persist as the new currency of the periphery countries after Germany bolts (in which case the value of the Euro would fall significantly). Or the Europeans might finally find a way through the ongoing nightmare. Not betting on that one.

Second, Satyajit Das goes into a little more detail, and I think rightly sees some cultural issues as ultimately being most important. The three logical possibilities are easy to list:
The latest plan has bought time, though far less than generally assumed. The European debt endgame remains the same: fiscal union (greater integration of finances where Germany and the stronger economies subsidise the weaker economies); debt monetisation (the ECB prints money); or sovereign defaults. 
 Germany may be largely in favour of solution number 1. But the smaller periphery countries, and perhaps France as well, will favour solution number 2. Hence, we may by default find Europe hurtling inexorably into "solution" number 3 -- sovereign defaults:
The accepted view is that, in the final analysis, Germany will embrace fiscal integration or allow printing money. This assumes that a cost-benefit analysis indicate that this would be less costly than a disorderly break-up of the Euro-zone and an integrated European monetary system. This ignores a deep-seated German mistrust of modern finance as well as a strong belief in a hard currency and stable money. Based on their own history, Germans believe that this is essential to economic and social stability. It would be unsurprising to see Germany refuse the type of monetary accommodation and open-ended commitment necessary to resolve the crisis by either fiscal union or debt monetisation.

Unless restructuring of the Euro, fiscal union or debt monetisation can be considered, sovereign defaults may be the only option available.
Perhaps it betrays a little bit of anarchy in my own soul, but I'm rooting quite hard for sovereign defaults. I wish the Greeks had gone ahead with their referendum. For all the complaining about the slack morals of the Greek taxpayer, every debt-creating transaction has two sides -- and the creditors (French and German banks) bear as much responsibility as the debtors.

Then again, the end is likely to bring some severe social misery, not to mention riots (the UK is already advising its European embassies on the likelihood). A third article by Simon Johnson and Peter Boone points ominously in this direction, essentially echoing Davies' analysis in bleaker language:
The path of the euro zone is becoming clear. As conditions in Europe worsen, there will be fewer euro-denominated assets that investors can safely buy. Bank runs and large-scale capital flight out of Europe are likely.

Devaluation can help growth but the associated inflation hurts many people and the debt restructurings, if not handled properly, could be immensely disruptive. Some nations will need to leave the euro zone. There is no painless solution.

Ultimately, an integrated currency area may remain in Europe, albeit with fewer countries and more fiscal centralization. The Germans will force the weaker countries out of the euro area or, more likely, Germany and some others will leave the euro to form their own currency. The euro zone could be expanded again later, but only after much deeper political, economic and fiscal integration.

Tragedy awaits. European politicians are likely to stall until markets force a chaotic end upon them. Let’s hope they are planning quietly to keep disorder from turning into chaos.
I'm back from Thanksgiving break and it was soooooooo great to get to just relax & hang with my family.  (And eat, of  course!)  I was thinking about it...  and isn't it funny that for this one day a year, almost all of us Americans are eating pretty much the exact same thing?  How weird would it be if we all did burgers on Tuesdays or pesto on Fridays?  ...  the grocery stores would be pretty profitable.  Random, I know. 


{We braved Black Friday - not bad at all, very odd- and found these cute little boots from Gap Kids}

We finally finished raking our yard and I got in a few pics of the boys:

{Christian, 4 and Justin- almost 2!}

I took a complete break from work, which was really nice, but I couldn't help going back to look at pics of some of our recent installs from last week...  Here's a mid-stage pic of one of my favorite rooms as we were moving everything in:

(The curtains are LL Textiles Live Paisley in Gold and I wish the were in my house :)

My client made a last-minute color switch on the walls & they turned out to be too pink.  We're going back to our original color which will be a cream.  {She had a color from one brand reproduced in another brand and it didn't come out perfectly to match the swatch... }    {I'd love to hide all of the not-so-smooth details from you to make it all seem perfect, but just keepin' it real & hopefully it'll help someone with being exrta careful about switching paint brands/ paint matching.}  This room is definitely going to be one of my favorite rooms we've ever done when we're finished.  My clients have the coolest style (she's traditional, he's a bit more edgy- so the mix is perfect) and I'm in love with the room.   

Anyway, I'm off for the day to a master bedroom installation.  I'll be sure to share some peeks!!  Hope your Thanksgiving was special!!


xoxo, Lauren

If you'd like help creating a home you absolutely love, contact me about our design services.

Free imagery for WA

Earlier this month I reported on the release of new, free 30m DEM and Dynamic Land Cover data for Australia. And now there is new free imagery for Western Australia that will be of great use for mining and exploration industry: Satellite ASTER Geoscience Map of Western Australia.

Quoting from media release, “ASTER, Japanese imaging instrument flying on the US TERRA satellite, launched in December 1999, has 14 spectral bands spanning wavelengths sensitive to important rock forming minerals, including: iron oxides, clays, carbonates, quartz and “Hydrothermal” minerals such as muscovite and chlorite.”

“ASTER geoscience maps provide new mineral information not available from other current technologies. This new mineral information is valuable for more accurate mapping of the regolith cover that blankets much of Australia and finding those often small islands of bedrock materials, such as greenstones that may be associated with gold.”



The project was a collaboration between the Department of Mines and Petroleum’s (DMP) Geological Survey of Western Australia (GSWA) and the Centre for Three Dimensional Mineral Mapping Centre of Excellence (C3DMM) and was led by the Commonwealth Scientific and Industrial Research Organisation’s (CSIRO).

The State ASTER maps have been carved into 1:1,000,000 mapsheets with individual file sizes reduced to ~100 MB each and can be downloaded for free in JPG2000 GeoTIFF format from CSIRO. The complete data set (~500 Gigabytes), is available from Geological Survey Western Australia product sales.

Saturday, November 26, 2011

Does slowing people down slow down the economy?

As my family and I were traveling back to LA from my parents' place in Arizona this weekend, we had to stop at three checkpoints.  Each stop delayed us--I would guess the average delay was 5-10 minutes.  One check point bragged that it had arrested around 100 people--about 70 for immigration violations and 30 for crimes--over the course of 2011.

According to this web site, one of the highways I travelled on carries 10,000 cars per day.  Let's say the average stop takes five minutes, the average car has 1.3 people in it, and the value of people's time averages $15 per hour.  This means that each arrest costs a little under $60,000; perhaps there is a deterrent effect as well.  Is this worth it?  I really don't know.

But I can't help but notice that over the last ten years, the US, as a matter of security policy, has really gummed up the ability of people to get easily from one place to another. Is it a coincidence that the economy has underperformed over this time?  Perhaps.  I can't think of a way to run a regression to test the relationship between ease of travel and economic performance--but that doesn't mean that someone else can't.



A Brief Response to Taubes's Food Reward Critique, and a Little Something Extra

It appears Gary Taubes has completed his series critiquing the food reward hypothesis of obesity (1).  I have to hand it to him, it takes some cojones to critique an entire field of research, particularly when you have no scientific background in it, and have evidently not read any of the scientific literature on it.  As of 2012, a Google Scholar search for the terms “food reward” and “obesity” turned up 2,790 papers.

The food reward hypothesis of obesity states that the reward and palatability value of food influence body fatness, and excess reward/palatability can promote body fat accumulation.  If we want to test the hypothesis, the most direct way is to find experiments in which 1) the nutritional qualities of the experimental diet groups are kept the same or at least very similar, 2) some aspect of diet reward/palatability differs, and 3) changes in body fat/weight are measured (for example, 2, 3, 4, 5, 6, 7, 8, 9).  In these experiments the hypothesis has both arms and one leg tied behind its back, because the most potent reward factors (energy density, sugar, fat) have nutritional value and therefore experiments that modify these cannot be tightly controlled for nutritional differences.  Yet even with this severe disadvantage, the hypothesis is consistently supported by the scientific evidence.  Taubes repeatedly stated in his series that controlled studies like these have not been conducted, apparently basing this belief on a 22-year-old review paper by Dr. Israel Ramirez and colleagues that does not contain the word 'reward' (10).

Another way to test the hypothesis is to see if people with higher food reward sensitivity (due to genetics or other factors) tend to gain more fat over time (for example, 11, 12, 13, 14, 15, 16).  In addition, studies that have examined the effect of palatability/reward on food intake in a controlled manner are relevant (17, 18, 19, 20, 21, 22), as are studies that have identified some of the mechanisms by which these effects occur (reviewed in 23).  Even if not all of the studies are perfect, at some point, one has to acknowledge that there are a lot of mutually buttressing lines of evidence here.  It is notable that virtually none of these studies appeared in Taubes's posts, and he appeared unaware of them. 
Read more »

Friday, November 25, 2011

Coal seam gas exploration map

The topic of coal seam gas is very popular in media in recent months due to well publicised protests by farmers and overall uncertainty of the impact of coal seam gas exploration on the environment, and ground water in particular. Australian national broadcaster, ABC created an online, interactive educational guide that explains key issues under debate. It is titled Coal Seam Gas – By The Numbers.

As a part of this resource, ABC published a map containing information about location of wells and exploration leases granted to private companies so users can assess what activity is undertaken in their immediate neighbourhood.



Interestingly, it is not only rural areas that experience the coal seam gas rush. As reported by ABC, there are more than 100 wells at Camden, 60 kilometres south of Sydney. The NSW Government, unlike Queensland, has not moved to create no-mining buffer zones around urban areas. However, exploration lease over entire Greater Sydney, granted to Macquarie Energy Pty Ltd, appears to have expired on 22-Oct-11…

Greetings Cards

The above 4 Greetings Cards designs are now available to order in time for Christmas.
The cards are 6" x4" on 300gsm satin card with a blank interior, so useful even if you don't use them for the holiday season.

Set of 4 cards including envelopes £8

A selection of your own choice from the 4 designs including envelopes:

Any 10 cards including envelopes £16
Any 20 cards including envelopes £30

Send your Orders to: mrtnsquires@googlemail.com

Order by 9th December to recieve your cards before Christmas.

Thursday, November 24, 2011

Bushfire season is on

Bushfire season 2011/12 started late but with venging – at least 30 properties have now been confirmed as damaged or destroyed by the fire which started about midday yesterday in Margaret River region of Western Australia. More than 400 fire fighters are battling the fire. Hundreds of people were evacuated but fortunately no fatalities.

Wet weather on the East Coast gave hope that it may be another quiet summer but unfortunately, West Coast doesn’t get much of that rain…
 

External link: map of current bushfires in Australia

Tuesday, November 22, 2011

Remembering the date

In the long history of the world, only a few generations have been granted the role of defending freedom in its hour of maximum danger. I do not shrink from this responsibility—I welcome it. I do not believe that any of us would exchange places with any other people or any other generation. The energy, the faith, the devotion which we bring to this endeavor will light our country and all who serve it—and the glow from that fire can truly light the world.

Monday, November 21, 2011

More four year degrees won't solve the current problem

David Brooks and Thomas Friedman have recently taken to arguing that the solution to our income distribution woes is to encourage and enable more people to go to college.  I want to leave aside for a second the fact that our educational problems are much deeper than that--that our high school graduation rate is declining is to me the most alarming education statistic.

Rather, it is worth looking at what has happened to earnings by educational attainment over the past eight years.  The census has put out data for 2002-2010, and here is what it (Table A-6) shows:

Median earnings for men with a high school degree fell 12.1 percent between 2002-2010; earnings for women with a high school diploma fell 8.5 percent between 2002-2010; for men with college degrees, it was a fall of 8.0 percent; for women with college degrees it was flat.  So yes, education is increasing income inequality in that those with college degrees are losing less than those with high school diplomas.

I am the sort of person who would be fine with a GINI of .5 (a number the reflects lots of inequality) if it meant that the people who are materially worst off can live at a decent standard of living.  But currently, those who play by the rules (and I mean really play by the rules) are seeing their living standards erode.  Homilies about sending more people to college are at the moment pretty much beside the point.

I can't wait...

...For Thanksgiving.

{Barry Dixon}

I am so ready to relax with my family & eat some goodness!!    We have a few loose ends to tie up at work and then we're off on Wednesday for the holiday.


{Image by Lisa Cohen: From lisacohenphotography.com }

I've been collecting Fall & Thanksgiving images for a while on pinterest so I figured I'd share a few that really make me happy. 

{Image via soderbergagentur.com}


I am so excited to wrap up in a blanket by the fire and hang with my husband & some good music.  (I have to admit that Christmas music DID get played this weekend while raking.  I have a problem :) 

{From casa-diseno-blog.com}


 Anyway, hope you have a great last few days of work before vacation!!!



xoxo, Lauren

If you'd like help creating a home you absolutely love, contact me about our design services.

New elevation and land cover data

Last week Geoscience Australia released a couple of new free data products for Australia: Digital Elevation Models (DEM) at 1 second (30m resolution) derived from the NASA Shuttle Radar Topography Mission (previously restricted only for research purposes) and Dynamic Land Cover, the first nationally consistent and thematically comprehensive land cover reference with 250m resolution.

The following are excerpts from respective media releases and posts on the Geoscience Australia web site:

“The new 30m DEM products improve our understanding of the national topography by producing digital elevation models at more than eighty times the resolution of the current national 9 second (250m) DEM”.

“The models were produced as part of a collaboration between Geoscience Australia, the Bureau of Meteorology (Bureau), the CSIRO and the Australian National University who have produced a number of derived products for applications such as surface water management and floodplain mapping.”

“Geoscience Australia and the Bureau are already working on phase 3 of a national scale dataset that will integrate the new DEM with regional scale (best available) topographic data. The end result will be a more accurate determination of water course activity across the country enabling communities to better prepare for water related natural hazard .”

DEM data can be downloaded for free from the National Elevation Data Framework Portal administered by Geoscience Australia (limit of 400MB per download apply).



Land cover is the observed biophysical cover on the Earth’s surface including trees, shrubs, grasses, soils, exposed rocks and water bodies, as well as anthropogenic elements such as plantations, crops and built environments.”

“Produced in partnership with the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the land cover map and dataset will allow users to compare vegetation over time, at a national and local level, to monitor trends associated with short term changes brought on by cyclones, long term drought and bushfires, as well as cropping and broadacre agriculture.”

“Future updated versions of the map will identify actual changes in the land cover which could provide evidence of a need for action in areas such as water management and soil erosion, or that patterns of land use are changing due to economic, climatic or other factors.”

Grasslands are the dominand feature of Australia’s landscape, covering more than one third of the land area (37.1% or 2.8 million square kilometers).  Tree dominated landscapes cover 32.1%  or 2.5 million square kilometers. Shrubs cover 1.6 million square kilometers (20.7%) and intensive agriculture, including irrigated and rainfed cropping and improved pastures, cover less than 10% of Australia’s land area.

Data can be viewed online using 3D World Wind application (relevant Java framework has to be installed on the computer in order to view the application) or can be dwonloaded free of charge in GeoTiff format (~500MB).

Sunday, November 20, 2011

Two Recent Papers by Matt Metzgar

This is just a quick post to highlight two recent papers by the economist and fellow health writer Matt Metzgar.

The first paper is titled "The Feasibility of a Paleolithic Diet for Low-income Consumers", and is co-authored by Dr. Todd C. Rideout, Maelan Fontes-Villalba, and Dr. Remko S. Kuipers (1).  They found that a Paleolithic-type diet that meets all micronutrient requirements except calcium (which probably has an unnecessarily high RDA) costs slightly more money than a non-Paleolithic diet that fulfills the same requirements, but both are possible on a tight budget. 

The second paper is titled "Externalities From Grain Consumption: a Survey", with Matt Metzgar as the sole author (2).  He reviews certain positive and negative externalities due to the effects of grain consumption on health.  The take-home message is that refined grains are unhealthy and therefore costly to society, whole grains are better, but grains in general have certain healthcare-related economic costs that are difficult to deny, such as celiac disease.

There are a lot of ideas floating around on the blogosphere, some good and others questionable.  Composing a manuscript and submitting it to a reputable scientific journal is a good way to demonstrate that your idea holds water, and it's also a good way to communicate it to the scientific community.  The peer review process isn't perfect but it does encourage scientific rigor.  I think Metzgar is a good example of someone who has successfully put his ideas through this process.  Pedro Bastos, who also spoke at the Ancestral Health Symposium, is another example (3).

Saturday, November 19, 2011

Raphael Bostic takes on Joe Gyourko

The Assistant Secretary of PDR (and USC colleague) writes:


This week, HUD released its annual report to Congress on the financial status of the Federal Housing Administration (FHA) Mutual Mortgage Insurance (MMI) Fund.  The report demonstrates the long-term strength of the Fund while not shying away from the challenges it faces in the near-term due to ongoing stresses in the housing market.  While the independent actuary reports older books of business underwritten during the bubble years of 2000-2008 are expected to produce losses of more than $26 billion, it also finds that FHA has a very strong platform going forward, with insurance on loans booked since January 2009 posting an estimated net economic value of $18 billion. Indeed, the actuary reports that the Fund still retains positive capital, and that it should be able to rebuild capital to the statutory requirement of two percent of insurance-in-force very quickly once housing markets across the county exhibit sustained growth.

Notwithstanding findings of the independent actuary that the FHA MMI Fund retains positive capital four years into the worst housing crisis since the Great Depression, a report commissioned by the American Enterprise Institute (AEI) suggests that FHA both lacks an actuarially sound program and is in current need of a significant capital infusion. 

Read the whole thing. It has actually stunned me how well FHA says done relative to AEI's paragon of virtue, the private market.  Of course, it was the private labels security market that drove down FHA's market share during the worst of the lending market. FHA loans actually always required underwriting; underwriting in the private sector often disappeared.


Friday, November 18, 2011

Family Room Redo: Sneekity Peek

To say this week has been crazy would be an understatement.  Installations are really the most fulfilling part of my job because it's like surprising someone with an awesome present.  I love seeing & hearing about my clients' reactions when they see their finished spaces & there's nothing better in this job than making them happy.  This week we installed for a few clients: a family room & some common areas, a living room, and we placed the final pieces of art in another favorite project of ours.  We get the chance to work with some of the sweetest, most amazing clients and I feel so lucky.


I just wanted to share a little tiny peek of one of my client's family rooms.  I particularly loooove her slipcovered linen ottoman and the rug she found on One King's Lane.   We had a few delays this week which were tough, but in the end it will all work out.  I'll be sure to share more when I can... the photos I took were all pretty grainy so I need me some Helen Norman. :)

Enjoy this beautiful weekend!!
(And thank you to my amazing clients if you're reading-- you are really all the best!) 


xoxo, Lauren

If you'd like help creating a home you absolutely love, contact me about our design services.

Are economists good scientists?

I've had no time to post recently for several reasons, mostly the urgent need to work on a book closely related to this blog. The deadline is getting closer. I hope to resume something like my previous posting frequency soon.

But I would like to point everyone to a fascinating recent analysis of economists' opinions about the scientific method (that seems the best term for it, at least). Ole Rogeberg, a reader of this blog, alerted me to some work by himself and Hans Melberg in which they surveyed economists to see how much they looked to actual empirical tests of a theory's predictions in judging the value of a theory. The answer, it turns out, is -- not much. Internal consistency seems to be more important than empirical test.

This even for a theory -- the theory of "rational addiction", which seeks to explain heroin addiction and other life destroying addictions as the consequence of fully rational choices on the part of individuals as they maximize their expected utility over their lifetimes -- which on the face of it seems highly unlikely, making the burden of empirical evidence (one would think) even higher. Some history. Gary Becker (Nobel Prize) of the University of Chicago is famous for his efforts to push the neo-classical framework into every last corner of human life. He (and many followers) have applied the trusted old recipe of utility maximization to understand (they claim) everything from crime to patterns of having children to addiction. You may see a slobbering shivering drunk or junkie in an alleyway in winter and think -- like most people -- there goes someone trapped in some very destructive behavioural feedback controlled by the interaction of addictive physical substances, emotions and so on. Not Becker. It's all quite rational, he argues.

Now, Rogeberg and Melberg. Here's their abstract:
This paper reports on results from a survey of views on the theory of rational addiction among academics who have contributed to this research. The topic is important because if the literature is viewed by its participants as an intellectual game, then policy makers should be aware of this so as not to derive actual policy from misleading models. A majority of the respondents believe the literature is a success story that demonstrates the power of economic reasoning. At the same time, they also believe the empirical evidence to be weak, and they disagree both on the type of evidence that would validate the theory and the policy implications. These results shed light on how many economists think about model building, evidence requirements and the policy relevance of their work.
Now, in any area of science there are disgreements over what evidence really counts as important. I've certainly learned this from following 20 years of research on high temperature superconductivity, where every new paper with "knock down" evidence for some claim tends to be immediately countered by someone else claiming this evidence actually shows something quite different. The materials are complex as is the physics, and so far it just doesn't seem possible to bring clarity to the subject.

But in high-Tc research, theorists are under no illusion that they understand. They readily admit that they have no good theory. The same attitude doesn't seem to have been common in economics. Rogeberg and Melberg have also described their survey work in this clearly written paper in a less technical style.

A few more choice excerpts from their (full) paper below:
The core of the causal insight claims from rational addiction research is that people behave in a certain way (i.e. exhibit addictive behavior) because they face and solve a specific type of choice problem. Yet rational addiction researchers show no interest in empirically examining the actual choice problem – the preferences, beliefs, and choice processes – of the people whose behavior they claim to be explaining. Becker has even suggested that the rational choice process occurs at some subconscious level that the acting subject is unaware of, making human introspection irrelevant and leaving us no known way to gather relevant data...

The claim of causal insight, then, involves the claim that a choice problem people neither face nor would be able to solve prescribes an optimal consumption plan no one is aware of having. The gradual implementation of this unknown plan is then claimed to be the actual explanation for why people over time smoke more than they should according to the plans they actually thought they had. To quote Bertrand Russell out of context, this ‘is one of those views which are so absurd that only very learned men could possibly adopt them’ (Russell 1995, p. 110).
On the nature of reasoning in rational addiction models (this is Nobel Prize winning stuff, by the way):
[The addict]... looks strange because he sits down at (the first) period, surveys future income, production technologies, investment/addiction functions and consumption preferences over his lifetime to period T, maximizes the discounted value of his expected utility and decides to be an alcoholic. That’s the way he will get the greatest satisfaction out of life. (Winston 1980, p. 302)



 

Thursday, November 17, 2011

Read CRL on Disparities in Mortgage Lending

The Center for Responsible Lending's research team of Carolina Reid (who has been working tirelessly at developing data on subprime mortgages for some time now), Roberto Quercia, We Li and Debbie Grunstein Bocian has produced Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures. They argue
1) The nation is not even halfway through the foreclosure
crisis. Among mortgages made between
2004 and 2008, 6.4 percent have
ended in foreclosure, and an additional 8.3 percent are
at immediate, serious risk.

(2) Foreclosure patterns are strongly
linked with patterns of risky
lending.
The foreclosure rates are consistently
worse for borrowers who received high-risk loan products
that were aggressively marketed
before the housing crash, such as
loans with prepayment penalties,
hybrid adjustable-rate mortgages
(ARMs), and option
ARMs.
Foreclosure rates are highest in
neighborhoods where these
loanswere concentrated.

(3)The majority of people affected
by foreclosures have been
white families. However, borrowers of
color are more than twice as
likely to lose their home as
white households. These higher
rates reflect the fact that African
Americans and Latinos were
consistently more likely to receive
high-risk loan products, even
after accounting for income and
credit status.
It is really striking how African-Americans and Hispanics were steered into crappy loans, even controlling for income and credit history. Beyond all this, the web site accompanying the report has really nicely organized data on severely delinquent loans and loans in foreclosure by state, race, ethnicity and MSA.

Holmen Jenkins makes me spit out my coffee this morning.

He spins this scenario:

Take this case: Workers in a rail yard see men in suits prowling around. Rumors fly the company is being sold. One worker buys call options on his employer's stock and, because the rumors turn out to be right, is hauled up on insider-trading charges. Had the rumors been wrong, had the worker lost money, had the men in suits been federal railroad inspectors, think the feds would have filed a case?
The natural lesson we draw from this little piece of fiction: if Spencer Bachus buys a short position after he meets with Ben Bernanke, it's ok.

Wednesday, November 16, 2011

A week of installations!

We have a big week lined up here with a few different client installations happening.  I'm so excited!!!!  I love installation days (or in this case, weeks) because your clients finally get to see the design plan fully realized.  And, more importantly, they get to live in and love their new spaces!!  The holidays are great deadline-makers and so we've got a bunch lined up just before Thanksgiving.  As I mentioned a while back in this post, we do our installations pretty much all in 1 day.  We have a team of people who inevitably work together on every project.  Having an amazing team is the key to successful projects and it has taken me a few years to put it together: 

Before we can even get to installation day, Mike Carr and his team from CarrMichael Construction usually get the space in move-in condition.  They handle any painting & electrical that needs to happen along with pretty much anything else. 

On installation day or a day or so before, Tolvin & his people from the Carpet Customizer deliver the rugs when the room is empty:

{Tolvin, on the left & his great guys on the right.  My husband, Dave, often makes an appearance at installations to help with a thing or two...  or fifty.}

I bring over a car full of one-of-a-kind accessories & smaller items that I've been gathering for the project so that I can try different things out:


The whiteglove delivery service comes with all of the furniture:


My {awesome} assistant Meghan -whose picture I don't have because she is so photo-shy..  oh wait, here's here Halloween pic:- runs around "getting it done" and making the day better.  She pretty much just makes things happen.



Paul & Nancy Johnson of Paul David Design come & hang the window treatments they've made and bring all of the pillows & reupholstered pieces they've done.  They help hang art too. I can't dig up a good picture of them right now but suffice it to say we couldn't do it without them.  Our electrician also comes on the day-of to install the fixtures which has such a big impact on the spaces. 

Once everything is in the house, we scramble to get it all into place & make it look perfect before our clients come home for the big reveal.  It's both exciting & a little nerve-wracking because everything needs to be just right & there are so many pieces that need to fall into perfect place to get it all done.  I've noticed that since I've been pregnant, I've been more forgetful with bringing things for installations (part sleepiness, part preggo brain) so I'm really hoping I remember everything today so that we don't need to drive back to the office. :)   We have the most amazing clients who really trust us with everything, and making them happy is honestly the most rewarding part of this job.

Today we're working on this space:


and we're installing a variation of this plan:


..And then we have a few more for the rest of the week.


...SO, wish me luck that all goes smoothly (or ends well...  there are always hiccups ;) this week!


xoxo, Lauren

If you'd like help creating a home you absolutely love, contact me about our design services.

George Barris Show at Rhythm Riot


Chet Herbert Streamliner Body By Barris Kustom Auto
(Oil on Board)

Signed and Numbered Prints are now available to order:
A4 £25
A3 £50

Email me to order.

Rhythm Riot are at it again with another great exhibition as part of the weekends frivolities. This time the show is based around the legendary car customiser George Barris. If you don't know the name you will definitely know some of his creations, for example TV's Original Batmobile, The Munsters Koach, Black Beauty from Green Hornet the list goes on.

As part of the show I have created the above painting depicting the Chet Herbert Streamliner. George Barris and Sam Barris of Barris Kustoms created and painted the body for Chet Herbert's second Streamliner in three weeks. It was originally designed to be powered by a four-cylinder Weir Indy engine from 1932, however Chet changed his mind when the engine disintegrated during dyno testing. Chet chose a Hemi engine to operate his Streamliner, Sam had to reshape the body in order to suit a Hemi engine.

The Original image for the painting is part of the Kellogg Auto Archive and was used with Ron Kelloggs permission. Ron's Archive is chock full of fantastic images from Hot Rod history. To view the archive go to his site:



ZZR Created for 60s James Bond Spoof Movie "Out of Sight"

Surf Woodie.
Equipped with a Ford Cobra engine has its power increased by two Paxton super chargers.

The Super Van was re-built for the movie “Super Van” in the early 70’s. It started out as the Love Machine in the late 60’s, made out of a Dodge Sportsman Van. Super Van was example of the ultimate in futuristic motoring with solar energy.

More info on the Exhibition and the rest of Rhythm Riot click the link below:


For more on George Barris and his creations please browse his website:


Tuesday, November 15, 2011

Sometimes you have to hold your nose

Reporter Jim Puzzanghera  of the LA Times asked me today whether I would restore conforming loan limits in certain high cost areas to their pre-October 1 729,250 level.  He wrote:


Although he'd like to see more data, Green thinks it's probably a smart move to increase the loan limits. And he agreed that the move was unlikely to hurt the FHA's finances. 
"My gut answer is, I'd probably raise it back right now," Green said. "The downside of not raising it is potentially pretty bad."
I really dislike the idea of subsidizing mortgages that only households earning more than $200,000 per year can afford.  At the same time, however, Nick Timiraos last week wrote:

Potentially more revealing is this data point from California, which has a higher share of markets affected by the declines: applications for purchase loans with balances between $625,500 and $729,750 were down by 25% from September and by 33% from one year ago. By contrast, overall purchase-loan applications in California were down by just 12% and 3%, respectively.
Housing is still very weak and many borrowers are underwater.  I wanted to see if lowering loan limits would lead the private sector to step in--I am not seeing any evidence that it is.  Beyond the data cited in the Timiraos story, flow of funds data show that private lending in other sectors of the economy remains moribund.

Maybe it is worth waiting for another month of data before the old limits are restored.  But it is not worth worsening things in the market to make a point.