Quotulatiousness

February 18, 2014

“No-one knows where the Canadian dollar is going”

Filed under: Cancon, Economics — Tags: , — Nicholas @ 10:13

In Maclean’s, Stephen Gordon assures you that there is no mastermind at work, determining what happens to the Canadian dollar:

The Canadian dollar fell from 97 cents US to below 89 cents US in the weeks following the Bank of Canada’s decision to shift its monetary policy stance away from a tightening bias. (It has recently rebounded to hold steady at around 91 cents as I write.) These developments have provided additional fodder for those pundits who are in the habit of offering their views about where the dollar should go and/or where it will go (the two are separate issues). These views fill up media space, but they shouldn’t be taken too seriously. The foreign exchange market is one where the “semi-strong“ form of the Efficient Market Hypothesis holds: movements in exchange rates cannot be predicted using publicly-available information.

If everyone really believed that the Canadian dollar will end up at (say) 85 US cents, then everyone would sell CAD at its current price to buy USD, wait for the price of USD to increase – which is the same thing as waiting for the CAD to depreciate – and then sell at the higher price. But if everyone does that, the CAD would be bid down to the point where it is no longer profitable: 85 cents. This is why you should take predictions about foreign exchange movements with a grain of salt: if you could actually predict them, the last thing you’d do is tell anyone.

This doesn’t mean that exchange rate movements are completely random: some of the fluctuations can be ascribed to variations in the ‘fundamentals’. But what really drives these movements are the unexpected changes in the fundamentals. And unexpected changes are, by definition, unpredictable. The most reliable forecasting model is a random walk: the exchange rate next period is the current exchange rate plus a white noise error term. The best prediction for where the exchange rate is going is where it is now.

Historical hooch – George Washington’s own White Lightning

Filed under: History, USA — Tags: , , — Nicholas @ 09:53

Uploaded on 16 Feb 2011

Many know George Washington as a general and statesman, but few think of America’s first president as a preeminent entrepreneur, operating the most successful whiskey distillery in the late 18th century. At its height, Washington’s distillery produced over 11,000 gallons of liquor a year, supplying the surrounding area and becoming one of his most lucrative business ventures.

At Washington’s former plantation, Mount Vernon, a group of historic interpreters are looking to bring this story to a wider audience. Thanks to a fully functioning replica of Washington’s distillery (and special dispensation from the Virginia General Assembly), George Washington’s rye whiskey is once again being made and sold to the public.

In November, Reason.tv followed the entire process as Dave Pickerell, Master Distiller and former Vice President of Operations for Maker’s Mark, and Steve Bashore, Mount Vernon Distillery Manager, oversaw a two week production run while adhering as strictly as possible to 18th century means and methods. The result is an 80-proof reminder of the nation’s first president and the entrepreneurial ideals of colonial America.

Shot, edited and produced by Meredith Bragg. Music by www.audionautix.com. Approx. 6 minutes.

H/T to Jon, my former virtual landlord, for the link.

Michael Sam, latent homophobia, and the NFL draft

Filed under: Football, Media — Tags: , , — Nicholas @ 09:04

Jim Geraghty looks at two sides of the Michael Sam story: the media side and the football side. They’re very different stories.

Good luck, Michael Sam.

Those of us who are sports fans are going to have a fascinating couple weeks ahead, as the national political and cultural media insists upon interpreting the events of the National Football League draft through the lens of identity politics. They will attempt to shoehorn events into a made-for-TV movie storyline about Michael Sam, defensive end for the University of Missouri, and aspiring NFL player.

Our media used to writing one kind of identity politics story: a person comes out of the closet and becomes the first openly-gay person to achieve a particular goal, gets saluted for bravery, is elevated to hero status, and then spends the next few years going to black-tie awards dinners and being the subject of overwrought documentaries.

[…]

The NFL Draft comes with its own movie-ready drama. Unlike the Super Bowl or any other sports championship, the draft is a major annual event that involves every team, as every almost every team has a first-round draft choice. (Sorry, Washington Redskins fans.) There’s a near-complete reversal of fortune, as the league’s worst team has the first and most consequential choice, making a selection that could ignite a quick turnaround back to respectability or be remembered as one of the all-time flops. Every fan of every team has a reason to tune in, to see who their team picks, hoping to have gotten a future star. The NFL draft is one of those rare high-drama sporting events with no real losers.

But there are indeed big winners. For the players, draft day is their real graduation day, where they stop practicing their craft to ensure the prosperity of a university and finally cash in on their years of effort with, in most circumstances, a multi-million dollar, multi-year contract. Guys who grew up with next to nothing bring their mothers and their whole families to New York City, where they learn where they’ll be living for the next few years, pursuing their dream of stardom. Genuine tears of joy flow. At age 20 or 21 or so, these young men have achieved their childhood dreams.

I suspect most fans’ biggest question about Michael Sam is, ‘if my team drafts him, how much better will our pass rush get?’ NFL fans care about the off-the-field behavior of their favorite team’s players to a certain degree; nobody likes rooting for a thug and a player prone to off-the-field trouble represents a higher risk of getting himself suspended or in legal trouble someday. But it’s hard to believe that NFL fans who can come to terms with a one-man population explosion at cornerback or shrug off drug busts, assault charges, DWIs, public intoxication, and all kinds of other misbehavior will stop rooting for a team with a gay defensive end.

A large chunk of the media will insist upon interpreting every triumph and setback for Michael Sam through the lens of his homosexuality and their belief that he’s a flashpoint in a battle between ‘tolerance’ and ‘intolerance.’ But the career of an NFL player can rise or fall on a thousand different factors and twists of fate. Do the coaches use him correctly? How complicated is the defensive system, and how quickly can he pick up the signals, terminology, and strategy? Is he in a system designed to showcase his natural skills, or are the coaches trying to use him in a new or different role that takes time to learn? How good are the other players on the team at his position? Does he twist an ankle or tear an ACL? Sam seems to have a good head on his shoulders, but how does he handle the pressures of being a professional athlete?

In addition to the questions about whether Sam’s collegiate talents will be enough to allow him to flourish in the NFL, and whether a given team would welcome an openly gay team-mate in the locker room, there’s also the “Tim Tebow” problem … the team that drafts Sam will be in the unrelenting focus of the media’s publicity floodlights. Just drafting Sam would only be the start of the media’s attention. Everything to do with Sam will draw TV cameras, paparazzi, and the team’s beat writers for local media outlets.

Where is he going to live? What kind of car does he drive? Where does he shop? How do his new neighbours feel about him? What kind of clothes does he wear away from the team’s facilities? Where does he go for entertainment? Who is he hanging around with?

And that’s just the start of it. Once the pre-season routine gets underway with organized team activities, mini-camps, and then training camp, the team (probably the head coach, but also the GM and the defensive co-ordinator or the linebackers coach) will have their every word analyzed for Sam-newsworthyness. If Sam does poorly in a drill or a scrimmage, it’ll be all over the media. If he isn’t in the starting rotation, it’ll be interpreted (by some) as proof that the team isn’t serious about giving him a fair chance to play.

This might be acceptable to a team if Sam’s skills were top-10 quality, but most of the reports don’t indicate that. A team will put up with a lot if the player drawing the attention is an athletic superstar, but for what seems to be (at best) a player with fair-to-adequate skills, it may deter them from drafting him at all.

Each team starts the regular season with 53 players, but they take nearly twice that number to training camp. Players who are drafted will have a better-than-average chance of being on the opening day roster, but the chances go down significantly the later a player is drafted. All first and second round picks are going to be on the roster, but not all sixth or seventh round picks will be. Sam’s skill set indicate he might have been a mid-round pick before the news broke about him coming out. Now, he might not be picked until the sixth round or he may not be picked at all. If that happens, many will decry the NFL’s homophobia, but as you can see, there’s a lot more in play than just Sam and his NFL playing potential.

The Tea Party’s vulnerabilities on abortion, gay marriage, and immigration

Filed under: Liberty, Politics, Religion, USA — Tags: , , , , , — Nicholas @ 08:21

L. Neil Smith agrees with a lot of Tea Party positions, but correctly points out that their determination to drag (some) religion into politics undermines them in three key areas with non-Tea Party audiences:

As for abortion, gay marriage, and immigration, I was taught in college (and have since confirmed) that the populist Grange Movement of the nineteenth century never quite got off its knees because white farmers didn’t want to share their cause with black farmers. The Tea Parties are demonstrating exactly the same kind of suicidal short-sightedness.

In the eighteenth century, most Americans were either passionately for or against slavery. When the Framers wrote the Constitution, they came to a compromise about the issue: slaves would be counted as three fifths of a person for the purpose of representation. They have been severely castigated about this compromise for a couple of centuries, but without it, there would never have been a United States of America.

I’m saying that similar compromises are possible regarding two of the three issues I’ve mentioned, and I have a question about the third.

Abortion first: I know that one side thinks it’s murder and doesn’t seem aware that half the population — with equal passion and sincerity — considers laws against it to represent expropriation and slavery.

A few years ago, I ran an admittedly unscientific abortion survey on my personal website for three years, asking this question: “Could you be satisfied with a compromise under which abortion would remain legal, but not a single cent of tax money would ever used to pay for it?”

The result was that an overwhelming eighty-five percent responded “Yes”, leaving, I assume, a disgruntled seven and a half percent at either end of the curve, who believe that women — or at least their uteruses — belong to the State, or that abortion ought to be an entitlement. Beyond the palest ghost of a shadow of a doubt, the issue is settled, then. We just need to pound it into our “leaders'” thick skulls.

[…]

The question I have about the third issue is this: by precisely what mechanism is my marriage of thirty-odd years to my lovely and talented wife in any way damaged or diminished by letting my friends George and Fred get married, too? I’m talking about nuts and bolts, here, palpable connections. I don’t want to hear about the Bible or your religion. Under the First Amendment, that’s excluded from the conversation.

Their taxes help pay for the courthouse and the judge’s salary. They are entitled, by virtue of that payment, to exactly the same services that you and I expect. What we’re talking about here is leaving George and Fred alone to live the same dream that Cathy and I have been able to live, I can’t find it in myself to deny them that hope.

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