Quotulatiousness

October 11, 2017

The Great Recession

Filed under: Economics, Government, USA — Tags: , , , , — Nicholas @ 04:00

Marginal Revolution University
Published on 9 Aug 2016

There’s already been much discussion over what fueled the Great Recession of 2008. In this video, Tyler Cowen focuses on a central theme of the crisis: the failure of financial intermediaries.

By 2008, the economy was in a very fragile state, with both homeowners and banks taking on greater leverage, many ending up “underwater.” Why did managers at financial institutions take on greater and greater risk? We’ll discuss a couple of key reasons, including the role of excess confidence and incentives.

In addition to homeowners’ leverage and bank leverage, a third factor played a major role in tipping the scale toward crisis: securitization. Mortgage securities during this time were very hard to value, riskier than advertised, and filled to the brim with high risk loans. Cowen discusses several reasons this happened, including downright fraud, failure of credit rating agencies, and overconfidence in the American housing market.

Finally, a fourth factor joins homeowners’ leverage, bank leverage, and securitization to inch the economy closer to the edge: the shadow banking system. On the whole, the shadow banking system is made up of investment banks and various other complex financial intermediaries, highly dependent on short term loans.

When housing prices started to fall in 2007, it was the final nudge that pushed the economy over the cliff. There was a run on the shadow banking system. Financial intermediaries came crashing down. We faced a credit crunch, and many businesses stopped growing. Layoffs ensued, increasing unemployment.

What could have been done to prevent all of this? You’ll have to watch the video to find out.

Reading Gibbon’s History of the Decline and Fall of the Roman Empire

Filed under: Books, Europe, History — Tags: , , , — Nicholas @ 03:00

In the latest Libertarian Enterprise, Richard Blake introduces one of the greatest English historians and explains why his work is still well worth reading:

Edward Gibbon (1737-94) was born into an old and moderately wealthy family that had its origins in Kent. Sickly as a child, he was educated at home, and sent while still a boy to Oxford. There, an illegal conversion to Roman Catholicism ruined his prospects of a career in the professions or the City. His father sent him off to Lausanne to be reconverted to the Protestant Faith. He came back an atheist and with the beginnings of what would become a stock of immense erudition. He served part of the Seven Years War in the Hampshire Militia. He sat in the House of Commons through much of the American War. He made no speeches, and invariably supported the Government. He moved for a while in polite society – though his increasing obesity, and the rupture that caused his scrotum to swell to the size of a football, made him an object of mild ridicule. Eventually, he withdrew again to Switzerland, where obesity and his hydrocele were joined by heavy drinking. Scared by the French Revolution, he came back to England in 1794, where he died of blood-poisoning after an operation to drain his scrotum.

When not eating and drinking, and putting on fine clothes, and talking about himself, he found time to become the greatest historian of his age, the greatest historian who ever wrote in English, one of the greatest of all English writers, and perhaps the only modern historian to rank with Herodotus and Thucydides and Tacitus. The first volume of his History of the Decline and Fall of the Roman Empire astonished everyone who knew him. The whole was received as an undisputed classic. The work has never been out of print during the past quarter-millennium. It remains, despite the increase in the number of our sources and our better understanding of them, the best – indeed, the essential – introduction to the history of the Roman Empire between about the death of Marcus Aurelius and the death of Justinian.

I’ve read a few abridged versions of Gibbon’s great work, and I intend to start on the unexpurgated version once I’ve finished the New Cambridge Modern History (I have all in hand except Volume XII, the Companion Volume). This is why Blake considers Gibbon to be such an important and still-relevant writer:

1. Greatness as a Writer and a Liberal

I cannot understand the belief, generally shared these past two centuries, that the golden age of English literature lay in the century before the Civil War. I accept the Prayer Book and the English Bible as works of genius that will be appreciated so long as our language survives. I admire the Essays of Francis Bacon and one or two lyrics. But I do not at all regard Shakespeare as a great writer. His plays are ill-organised, his style barbarous and tiresome. I fail to understand how pieces like A Midsummer Night’s Dream and Romeo and Juliet, with their long, ranting monologues, can be thought equal to the greatest products of the Athenian theatre. I grant that Julius Caesar is a fine play – but only because Shakespeare stayed close to his ancient sources for the plot, and wrote in an uncharacteristically plain style. Perhaps I am undeveloped in some critical faculty; and I know that people whose judgements I trust have thought better of him. But I cannot see Shakespeare as a great writer or his age as the greatest in our literature. […]

2. His Scholarship

As said, this was not my first meeting with Gibbon. I was twelve when I found him in the abridgement by D.M. Low. As an undergraduate, I made use of him in the J.B. Bury edition up till the reign of Heraclius and the Arab conquests. In my middle twenties, I went through him again in a desultory manner, skipping chapters that did not interest me. But it was only as I approached thirty that I read him in the full and proper order, from the military resources of the Antonines to the revival of Rome under the Renaissance Popes. It is only by reading him in the whole, and by paying equal attention to text and footnotes, that he can be appreciated as a supreme historian. […]

3. His Fairness as an Historian

Even where he can be criticised for letting his prejudices cloud his judgement, Gibbon remains ultimately fair. He dislikes Christianity, and is convinced that it contributed to the decline of the Empire. His fifteenth and sixteenth chapters are one long sneer at the rise and progress of the Christian Faith. They excited a long and bitter controversy. There was talk for a while of a prosecution for blasphemy. But this was only talk. A man of Gibbon’s place in the social order was not to be taken into court like some hack writer with no connections.

How a German Squad attacks a position (WW2)

Filed under: Germany, History, Military — Tags: , — Nicholas @ 02:00

FootageArchive – Videos From The Past
Published on 17 Nov 2013

Welcome to FootageArchive! On this channel you’ll find historic and educational videos from the 1900s. Watch, learn, and take a trip back in time as we gain insight into a previous time.

(Note: this video is being shown strictly for educational and historical purposes)

QotD: Speed readers

Filed under: Books, Humour, Quotations — Tags: — Nicholas @ 01:00

… shut up, speed readers. That’s right. I said eight hours. Deal with it. Nobody cares that you read 6,000 WPM like some sort of freaky robot person. Most people read for fun at 200 WPM and most books are 100k words. I swear, I’ve never in my life mentioned that it takes hours to read a novel without some self-righteous speed reader chiming in the comments about how brilliant they are and how they read a novel every fifteen minutes. Goody for you. Those of us who’ve known the touch of a woman don’t care you read fast.

Larry Correia, “one Star Reviews Over Book Prices are Dumb”, Monster Hunter Nation, 2016-02-16.

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