Sunday, October 26, 2008
Saturday, October 25, 2008
I like the economic theory of sunspot as I told before. An economic pessimism causes a great downturn in the Japanese economy and thus helps reinforce pessimism and lose confidence, and in turn makes the economy worse and worse. It's kind of a vicious cycle of business fluctuation.
The stock prices have recently gone down in Japan and the people's mind also is going down...
What is a sunspot theory? Here's a great brief explanation for it:
Oct. 13, Bloomberg.com
For the thoughtful, the coincidence provides an interesting parallel to circumstances in the late-1800s that ignited an economic theory based on sunspots. While the early work ended up being a dead end, it led to frontier theoretical work a century later that provides exactly the right framework for thinking about the philosophical implications of the current crisis.
The fact is, we are not, as a piece in the Washington Post recently suggested, at ``The End of American Capitalism.'' Rather, we are in the middle of what economic theorists refer to as ``sunspot equilibrium,'' or a state in which a completely random variable is driving the economy. Such a situation was long thought to be a rare possibility in a free market.
We now know that these economic sunspot theories are more valuable than we ever could have dreamed. If capitalism is to survive, it will be because its politicians better understand sunspots.
Back in 1884, William Stanley Jevons proposed a link between sunspot cycles and business cycles. He provided data that suggested the link might be real, and he speculated that there was some connection between sunspots and the weather.
While the sunspot theory of the business cycle has now been widely rejected, Jevons's work did motivate a theoretical triumph by economists David Cass (formerly at the University of Pennsylvania, now deceased), and Karl Shell (now at Cornell University).
High priests of the free market have long argued that government regulation or intervention should be minimal, because the market will inevitably produce the most efficient outcomes, with prices fully and rationally reflecting the true fundamentals. If stock prices drop, it is always because some fundamental, like profits, has worsened.
Cass and Shell showed that an unregulated market is far from perfect in its outcomes. Their argument was based on sunspots.
Suppose, they said, that sunspots are truly irrelevant, but everyone believes Jevons that they cause business cycles. Then firms might look at the sun, see a bad cycle coming, and begin laying off employees. Workers might look at the sun, see a bad cycle coming, and cut back their expenditures.
The action of the firm would reinforce the belief of the worker that sunspots cause downturns. The actions of consumers would reinforce the belief of firms that sunspots cause downturns.
After a few cycles, a dispassionate scientist could gather the economic data and find that sunspots drive business cycles. Beliefs could be self-fulfilling. So sunspots might be truly irrelevant only if 1) they are irrelevant, and 2) individuals believe that to be the case.
Cass and Shell showed that sunspot equilibrium is possible, ending forever the view that free markets always lead to the ideal outcome.
In the current crisis, we are doubtlessly experiencing sunspot equilibrium. Panic has caused financial institutions to stop lending to one another and to their clients. The absence of liquidity has reinforced the panic, as few firms can survive indefinitely without outside cash flow.
As consumers watch the financial institutions unwind, they, too, have panicked, reducing spending, driving down profits and inducing yet another round in the downward cycle. The end result is a state of the world that is far removed from the happy equilibrium a well-functioning free market promises.
The financial institutions themselves have failed because of their own bad decisions and because of the nuclear bomb set off in the housing industry by Fannie Mae and Freddie Mac. But how did that set off this unprecedented wholesale panic?
Liberal pessimism, and the negative sunspot equilibrium it created, has likely been a key contributor. The U.S. media have been in a sour mood ever since President George W. Bush took office. When times were good, the economy was covered as if we were in a Great Depression. For years, everything about the Bush economy has been ``the worst since Herbert Hoover.'' When times actually turned bad, where was sentiment to go?
Economist Donald Luskin, one of the few bold enough to publicly stand up against the landslide of negativity, did a Google News search in mid-September of ``since the Great Depression'' and found 4,500 hits in the previous month.
The problem is, if you keep telling people that our system is fundamentally broken, they will lose faith in it and run for the exits when real distress occurs.
The influence of the profoundly negative reporting and destructive partisan rhetoric is apparent in the numbers. Over the past three years, consumer sentiment has been lower relative to the state of the economy than it has ever been. In June, that sentiment was far below where it had been since the great stagflation of the early-1980s.
And political bias is apparent in the data as well. During Bill Clinton's presidency, even bad data were covered gloriously, and consumer sentiment was generally higher than it had ever been relative to the data.
All of which suggests we have two possible paths forward.
On the one hand, we can work to restore faith in markets and provide the government backbone needed to do that.
On the other, we can decide we have learned that markets fundamentally don't work. That belief, like one in the effect of sunspots, would be self-fulfilling.
The choice is ours.
(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He is an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)
Some economists in Japan point out that it's a wrong deposit insurance and suggest that deposits should be insured all.
Blanket Deposit Insurance Is a Bad Idea WSJ,OCTOBER 15, 2008
Yesterday, the Treasury and the Federal Deposit Insurance Corporation (FDIC) announced the second broadening of deposit insurance coverage within two weeks -- this time, to unlimited deposit insurance for business checking accounts. Some want to go even further.
Hang on a minute. We think it is time to remember that unlimited insurance coverage for all deposits is not costless. It would not address the main problems now undermining confidence in the financial system. It might not encourage bank lending. In fact, it might even have the perverse effects of undermining confidence in the soundness of the FDIC, increasing moral hazard, and destabilizing the financial system.
It was a bad idea two weeks ago, and now there is an international dimension. Policy makers in Ireland, Germany and elsewhere have given a 100% guarantee to bank deposits in their countries. A few countries have gone even further, insuring nondeposit liabilities as well.
Yes, we want to reassure depositors -- and we have. But we need to look before we leap. A country can get in trouble by guaranteeing more than it can afford. Iceland may be in that situation already. Since FDIC insurance has been the rock of stability up to now, the U.S. government should never do anything that calls into question the viability of the FDIC. Just yesterday, it was asked to do more than it has ever done before.
Despite these worries, voices in the U.S. continue to call on our government to follow Germany and Ireland and insure all bank deposits without limit. That's a solution looking for a problem.
First of all, because it would require congressional action, a 100% guarantee would give the impression of desperate lawmakers stepping up to the plate again -- after a rescue package whose goals and tactics have already shifted several times -- to take an action unprecedented in American history. Rather than inspire confidence, this might just deepen the sense of panic.
Second, 100% federal deposit insurance would pull funds out of other assets. Money-market mutual funds would be first in line -- we've seen that happen already. But other money-market-type instruments would quickly follow. Would the U.S. government insure them all? There is no obvious place to stop.
Third, an unlimited deposit guarantee in the U.S. would pull funds out of other countries, just as Ireland's guarantee led to an inflow of money into Irish bank offices in the United Kingdom. The Irish-British deposit flow happened on a small scale; but the U.S. is the 800-pound gorilla of the world market. Even amidst all this chaos, money has been flocking to our shores.
Thus we might wind up worsening an odd sort of beggar-thy-neighbor game, causing a "giant sucking sound" as deposits fled other countries for the sanctuary of the U.S. and its FDIC. The implications for our international friends could be enormous. In a misguided attempt to create financial security at home, we might inadvertently make the world a significantly more dangerous place to live.
Memo to Washington: Take a deep breath and ask, "What is the problem that unlimited deposit insurance is meant to solve?"
It is not people lining up to take their money out of banks. There appears to be little banking panic among retail customers. It's true that banks are not lending, but not because they lack deposits. At bottom, they are not lending to customers because their capital bases are weak and because they are not lending to one another. Banks are not lending to one another because faith in their counterparties has evaporated. So rather than risk loss, they just sit on their hands.
That is why the major banking nations have recently agreed to coordinated actions designed to restore confidence in their financial institutions in two principal ways: by recapitalizing banks via direct capital infusions, and by insuring interbank transactions in, for example, the London Interbank Offered Rate (Libor) market. The U.S. joined these efforts yesterday.
Now that coordinated international action has finally become the rule rather than the exception, the last thing we need is a reversion to beggar-thy-neighbor policies.Mr. Blinder, a former Federal Reserve vice chairman, is a professor of economics at Princeton University. He is also affiliated with Promontory Interfinancial Network, which could be affected by changes in FDIC rules. Mr. Hubbard, former chairman of President George W. Bush's Council of Economic Advisers, is the dean of the Columbia Business School.
Friday, October 24, 2008
This problem is kind of normative, and may have no one solution. People should think and discuss it and in turn vote for whom they really want to do what they want.
FOX News Poll: Obama Grabs Nine Point Lead Over McCain
Wednesday, October 22, 2008, By Dana Blanton
Should Government Use Taxes to "Spread the Wealth"?
In a conversation with "Joe the plumber" about his tax plan, Obama said "when you spread the wealth around it's good for everybody." Americans are evenly divided on the idea: 45 percent think it is a good idea and 46 percent a bad idea to use some of the money government collects in taxes to "spread the wealth" to others who are less well off.
Most Democrats think spreading the wealth is a good idea (66 percent) and most Republicans think it is a bad idea (72 percent). Independents split 47 percent good idea and 41 percent bad.
Voters are much more decisive on freezing government spending to get the federal budget under control: 63 percent think that is a good idea and 29 percent a bad idea. McCain has said he will "freeze government spending on all but the most important programs," such as defense, veterans care and Social Security.
Three times as many voters think "cutting taxes" (60 percent) is more likely to stimulate the economy and get the country out of recession than think "increasing government spending on programs" will help the economy recover (20 percent).
10 things NOT to say on a first date
Erin Flaherty, Shine staff, on Mon Oct 13, 2008 3:59pm PDT
There's a fine line between love and hate, but both are equally fueled by passion. If someone even mentions their ex on a first date, watch out, you could be entering into a three-way relationship. Brace yourself: drama ahead! Anyway, if you're not over your ex, keep it to yourself. Your date certainly doesn't want to hear about it.
2. "I would like to get married and have kids asap."
Slow. That. Roll. Whether you're a man or a woman, uttering those words automatically puts pressure on an already delicate, stressful meeting, not to mention the fact that it's a foolproof way to scare someone off and fast.
3. "Who are you voting for?"
There's a saying in the south about not bringing up politics or religion in polite company. Plenty of couples don't always share political (or religious) views, and learn to make things work. But when you're trying to make a good first impression, it's probably best to avoid overly emotional topics in order to avoid a sparring match. (Look at it this way, if you become a couple, you'll have plenty of opportunities to fight later!)
4. "Can you pay the check? I'm broke."
Hey, the economy is in the toilet. Of course you're broke. We're all broke. But common courtesy dictates that the person who did the date asking offer to pay the bill. Chances are, if your date has good manners, they'll over to split it or pay the tip. Let's face it, gone are the days where the guy automatically must pay for dinner or he's a loser. But no matter what the circumstances are, flat out asking your date to pay the bill is a major turn-off.
5. "What's your favorite TV show?"
C'mon, we can do better than that. Asking about hobbies and other interests can lead to great conversation, but the last message you want to convey is that your favorite activity is watching the tube with a tub of ice cream. Save talking about "America's Next Top Model" for the work water cooler or something.
6. "Where did you go to school?"
Believe it or not, many people didn't go to college, and totally resent being put on the spot with this tired old question. And while plenty of grads are happy to wax on and on about their "glory years" or whatever, it's probably better to ask something like, "Have you always lived here?" "How did you choose your career?" or another more general question that might lead you to discussing educational background. Again, it may seem strange, but for all kinds of reasons, a lot of people have negative knee-jerk reactions to this seemingly innocuous question.
7. "Can I take your picture?"
Creepy much? But yeah, I have girlfriends who've been waylaid by this gem. For real. Maybe it's the thought of him showing his buddies your photo and bragging about bagging you, or even the image of him fawning over your pic tacked up on one of those cray-cray serial killer wall collages. Either way, ick.
8. "I'm poly-(fill in the blank)"
There are folks who are polyamorous (def: the desire, practice, or acceptance of having more than one loving, intimate relationship at a time with the full knowledge and consent of everyone involved); polygamist (def: the practice of marriage to more than one spouse simultaneously); and yes, some are even polyester salesmen (def: dudes who peddle chintzy wares). Right then. Unless you met that person on a "special" site devoted to that kind of stuff, chances are your date won't appreciate your um, open-minded ways.
9. "So I just got out of rehab."
So maybe you have some personal problems you've been working on. Perhaps you've been in therapy since you were 13 years old. Whatever the case may be, it's probably best not to introduce your new romantic interest to your BIG, SCARY ISSUES, at least not yet. Everybody has problems big and small, but the first date is more about showing off your personality, not painting yourself as a psychotic addict (even if you are, just a smidge). Note: If you are seriously in the midst of a personal crisis, and that includes excessive drug use and/or major psychological treatment, not to be all judgey, but you probably shouldn't be on a date right now.
10. "So ya wanna come back to my place?"
Not everyone is old-fashioned about first dates. The right time to sleep with someone is up to you, but numerous informal polls, um, around the office show that when a guy propositions a woman for sex on the first date, she tends to get skeeved, and when a girl does the same, many dudes are likely to file her in the one night stand category. Double standard? Sure. And yes, some couples do have sex on the first date and there is nothing wrong with that. But I think you know what I'm sayin'...
Thursday, October 23, 2008
One of the famous stories related to this problem is "Monty Hall Problem":
"There are three boxes and there's a ball in one of the three boxes and nothing in each of the left two boxes."
(Question) "If you choose the box 1 and open another box (box 2) and see nothing in the box 2, should you stick with the initial choice(box 1) or swap your choice(box 3)? "
What's your answer? Swap or not?
Wednesday, October 22, 2008
In recent Japan many people are blaming government bureaucrats and China(Chinese products, or "made in China") but it seems unreasonable.
Most Pundits Are Wrong About the Bubble, WSJ, OCTOBER 18, 2008
It's grind-your-favorite-axe day on the network news shows. The financial crisis is all the fault of dreaded "deregulation," shout some pundits; others blame the "small government" mentality of the Bush administration and Republicans in Congress.
...Congressional Democrats -- along with a surprising number of pork-barrel Republicans -- demanded nonwar spending on a Great Society scale and the president gave in to buy their votes for the war.
...Financial deregulation for the past three decades consisted of the removal of deposit interest-rate ceilings, the relaxation of branching powers, and allowing commercial banks to enter underwriting and insurance and other financial activities. Wasn't the ability for commercial and investment banks to merge (the result of the 1999 Gramm-Leach-Bliley Act, which repealed part of the 1933 Glass-Steagall Act) a major stabilizer to the financial system this past year?
Indeed, it allowed Bear Stearns and Merrill Lynch to be acquired by J.P. Morgan Chase and Bank of America, and allowed Goldman Sachs and Morgan Stanley to convert to bank holding companies to help shore up their positions during the mid-September bear runs on their stocks.
Even more to the point, subprime lending, securitization and dealing in swaps were all activities that banks and other financial institutions have had the ability to engage in all along. There is no connection between any of these and deregulation. On the contrary, it was the ever-growing Basel Committee rules for measuring bank risk and allocating capital to absorb that risk (just try reading the Basel standards if you don't believe me) that failed miserably. The Basel rules outsourced the measurement of risk to ratings agencies or to the modelers within the banks themselves. Incentives were not properly aligned, as those that measured risk profited from underestimating it and earned large fees for doing so.
That ineffectual, Rube Goldberg apparatus was, of course, the direct result of the politicization of prudential regulation by the Basel Committee, which was itself the direct consequence of pursuing "international coordination" among countries, which produced rules that work politically but not economically. International cooperation, in case you haven't heard, is exactly what the French and the Germans now say was missing in the past few years.
So why blame deregulation and small government? The social psychologist Gustav Jahoda says that unreasonable beliefs often arise in circumstances where people lack control and need to believe in something to get them through a highly stressful situation. And a fellow named Machiavelli might help us to understand a different reason for simplistic explanations.
Here is the non-stress-relieving truth. Severe financial crises have occurred in many countries -- roughly 100 over the past 30 years -- and even on a global scale many times before. About 2,000 years ago, Tiberius solved an early global financial crisis by making huge zero-interest loans to Roman banks. Sound familiar? These unusual events often reflect a confluence of different circumstances; for the most part they are not the inevitable result of a single, foreseeable fault in the system.
So what really happened and what should we do to make things better? The current financial crisis, like many in the past, had its roots in several areas: loose monetary policy (from 2002-2005, the real fed-funds rate was persistently negative to a degree not seen since the mid-1970s); government subsidies for leverage in real estate (the list is a long one, but the government's role in Fannie and Freddie tops it); and many other errors by the public and private sector, including longstanding flaws in prudential regulation (see aforementioned Basel rules).
As we try to devise solutions to the regulatory problems, there is plenty of room for improvement and lots of sensible ideas about how to proceed -- all of which have been around for a long time. The single most important reform that is needed is the restoration of discipline in the measurement of risk within the banking system.
Academics have been calling for reforms -- especially a minimum subordinated debt requirement that would create ongoing, market-based measurement of true bank risk -- for many years. In fact, a study of that reform was mandated by the Gramm-Leach-Bliley Act of 1999. Although the study by the Federal Reserve indicated that the reform would be extremely helpful, the big banks successfully lobbied to avoid the imposition of discipline on their risk taking.
The starting point for reform is to begin with a dispassionate and informed assessment of what happened. History is messy, and the careful study of facts offers little satisfaction for one-note Johnnies. It's easier to just invent one's own history than to study the real thing (which may explain why invention is so much more popular).
All this reminds me of an old Doonesbury comic strip in which a history teacher tries to shock his class by telling them outrageous made-up facts, only to find that they finally seem to be taking notes. Neither Jahoda nor Machiavelli would be surprised.
Mr. Calomiris, a professor at Columbia Business School, is the author of "U.S. Bank Deregulation in Historical Perspective" (Cambridge University Press, 2006)
A seasoned investor, Buffett tells about his thought and experience of investing. We might have to listen to him to become rich:
NY Times, October 16, 2008
....A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.
The Monty Hall Problem has struck again, and this time it’s not merely embarrassing mathematicians. If the calculations of a Yale economist are correct, there’s a sneaky logical fallacy in some of the most famous experiments in psychology.
Dr. Chen says that choice rationalization could still turn out to be a real phenomenon, but he maintains that there’s a fatal flaw in the classic 1956 experiment and hundreds of similar ones. He says researchers have fallen for a version of what mathematicians call the Monty Hall Problem, in honor of the host of the old television show, “Let’s Make a Deal.”
Here’s how Monty’s deal works, in the math problem, anyway.
He shows you three closed doors, with a car behind one and a goat behind each of the others. If you open the one with the car, you win it. You start by picking a door, but before it’s opened Monty will always open another door to reveal a goat. Then he’ll let you open either remaining door.
Suppose you start by picking Door 1, and Monty opens Door 3 to reveal a goat. Now what should you do? Stick with Door 1 or switch to Door 2?
Before I tell you the answer, I have a request. No matter how convinced you are of my idiocy, do not immediately fire off an angry letter. In 1991, when some mathematicians got publicly tripped up by this problem, I investigated it by playing the game with Monty Hall himself at his home in Beverly Hills, but even that evidence wasn’t enough to prevent a deluge of letters demanding a correction.
Before you write, at least try a few rounds of the game, which you can do by playing an online version of the game. Play enough rounds and the best strategy will become clear: You should switch doors.
This answer goes against our intuition that, with two unopened doors left, the odds are 50-50 that the car is behind one of them. But when you stick with Door 1, you’ll win only if your original choice was correct, which happens only 1 in 3 times on average. If you switch, you’ll win whenever your original choice was wrong, which happens 2 out of 3 times.
Now, for anyone still reading instead of playing the Monty Hall game, let me try to explain what this has to do with cognitive dissonance.
For half a century, experimenters have been using what’s called the free-choice paradigm to test our tendency to rationalize decisions. This tendency has been reported hundreds of times and detected even in animals. Last year I wrote a column about an experiment at Yale involving monkeys and M&Ms.
The Yale psychologists first measured monkeys’ preferences by observing how quickly each monkey sought out different colors of M&Ms. After identifying three colors preferred about equally by a monkey — say, red, blue and green — the researchers gave the monkey a choice between two of them.
If the monkey chose, say, red over blue, it was next given a choice between blue and green. Nearly two-thirds of the time it rejected blue in favor of green, which seemed to jibe with the theory of choice rationalization: Once we reject something, we tell ourselves we never liked it anyway (and thereby spare ourselves the painfully dissonant thought that we made the wrong choice).
But Dr. Chen says that the monkey’s distaste for blue can be completely explained with statistics alone. He says the psychologists wrongly assumed that the monkey began by valuing all three colors equally.
Its relative preferences might have been so slight that they were indiscernible during the preliminary phase of the experiment, Dr. Chen says, but there must have been some tiny differences among its tastes for red, blue and green — some hierarchy of preferences.
If so, then the monkey’s choice of red over blue wasn’t arbitrary. Like Monty Hall’s choice of which door to open to reveal a goat, the monkey’s choice of red over blue discloses information that changes the odds. If you work out the permutations, you find that when a monkey favors red over blue, there’s a two-thirds chance that it also started off with a preference for green over blue — which would explain why the monkeys chose green two-thirds of the time in the Yale experiment, Dr. Chen says.
Does his critique make sense? Some psychologists who have seen his working paper answer with a qualified yes. “I worked out the math myself and was surprised to find that he was absolutely right,” says Daniel Gilbert, a psychologist at Harvard. “He has essentially applied the Monty Hall Problem to an experimental procedure in psychology, and the result is both instructive and counter-intuitive.”
Dr. Gilbert, however, says that he has yet to be persuaded that this same flaw exists in all experiments using the free-choice paradigm, and he remains confident that the overall theory of cognitive dissonance is solid. That view is shared by Laurie R. Santos, one of the Yale psychologists who did the monkey experiment.
“Keith nicely points out an important problem with the baseline that we’ve used in our first study of cognitive dissonance, but it doesn’t apply to several new methods we’ve used that reveal the same level of dissonance in both monkeys and children,” Dr. Santos says. “I doubt that his critique will be all that influential for the field of cognitive dissonance more broadly.”
Dr. Chen remains convinced it’s a broad problem. He acknowledges that other forms of cognitive-dissonance effects have been demonstrated in different kinds of experiments, but he says the hundreds of choice-rationalization experiments since 1956 are flawed.
Even when the experimenters use more elaborate methods of measuring preferences — like asking a subject to rate items on a scale before choosing between two similarly-ranked items — Dr. Chen says the results are still suspect because researchers haven’t recognized that the choice during the experiment changes the odds.
“I don’t know that there’s clean evidence that merely being asked to choose between two objects will make you devalue what you didn’t choose,” Dr. Chen says. “I wouldn’t be completely surprised if this effect exists, but I’ve never seen it measured correctly. The whole literature suffers from this basic problem of acting as if Monty’s choice means nothing.”
July 21, 1991(NY Times)
Perhaps it was only an illusion, but for a moment here it seemed that an end might be in sight to the debate raging among mathematicians, readers of Parade magazine and fans of the television game show "Let's Make a Deal."
They began arguing last September after Marilyn vos Savant published a puzzle in Parade. As readers of her "Ask Marilyn" column are reminded each week, Ms. vos Savant is listed in the Guinness Book of World Records Hall of Fame for "Highest I.Q.," but that credential did not impress the public when she answered this question from a reader:
"Suppose you're on a game show, and you're given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door, say No. 1, and the host, who knows what's behind the other doors, opens another door, say No. 3, which has a goat. He then says to you, 'Do you want to pick door No. 2?' Is it to your advantage to take the switch?"
Since she gave her answer, Ms. vos Savant estimates she has received 10,000 letters, the great majority disagreeing with her. The most vehement criticism has come from mathematicians and scientists, who have alternated between gloating at her ("You are the goat!") and lamenting the nation's innumeracy.
Her answer -- that the contestant should switch doors -- has been debated in the halls of the Central Intelligence Agency and the barracks of fighter pilots in the Persian Gulf. It has been analyzed by mathematicians at the Massachusetts Institute of Technology and computer programmers at Los Alamos National Laboratory in New Mexico. It has been tested in classes from second grade to graduate level at more than 1,000 schools across the country.
But it was not until Thursday afternoon that a truly realistic simulation of the problem was conducted. The experiment took place at the Beverly Hills home of Monty Hall, the host of 4,500 programs of "Let's Make A Deal" from 1963 to 1990. In his dining room Mr. Hall put three miniature cardboard doors on a table and represented the car with an ignition key. The goats were played by a package of raisins and a roll of Life Savers.
After Mr. Hall allowed this contestant 30 independent attempts to win the car, two conclusions seemed clear:
Ms. vos Savant's vitriolic critics, including the mathematics professors, are dead wrong. But Ms. vos Savant is not entirely correct either, because there is a small flaw in her wording of the problem that was detected not only by Mr. Hall but also by some of the experts. Despite her impressive analysis and 228-point I.Q., she was not as quick as Mr. Hall in understanding the psychological dimensions of the problem. 'So Easy' to Blunder
A few mathematicians were familiar with the puzzle long before Ms. vos Savant's column. They called it the Monty Hall Problem -- the title of an analysis in the journal American Statistician in 1976 -- or sometimes Monty's Dilemma or the Monty Hall Paradox.
An earlier version, the Three Prisoner Problem, was analyzed in 1959 by Martin Gardner in the journal Scientific American. He called it "a wonderfully confusing little problem" and presciently noted that "in no other branch of mathematics is it so easy for experts to blunder as in probability theory."
The experts responded in force to Ms. vos Savant's column. Of the critical letters she received, close to 1,000 carried signatures with Ph.D.'s, and many were on letterheads of mathematics and science departments.
"Our math department had a good, self-righteous laugh at your expense," wrote Mary Jane Still, a professor at Palm Beach Junior College. Robert Sachs, a professor of mathematics at George Mason University in Fairfax, Va., expressed the prevailing view that there was no reason to switch doors.
"You blew it!" he wrote. "Let me explain: If one door is shown to be a loser, that information changes the probability of either remaining choice -- neither of which has any reason to be more likely -- to 1/2. As a professional mathematician, I'm very concerned with the general public's lack of mathematical skills. Please help by confessing your error and, in the future, being more careful."
The criticism has continued despite several more columns by Ms. vos Savant defending her choice. "You are utterly incorrect," insisted E. Ray Bobo, a professor of mathematics at Georgetown University. "How many irate mathematicians are needed to get you to change your mind?" 'The Henry James Treatment'
Mr. Hall said he was not surprised at the experts' insistence that the probability was 1 out of 2. "That's the same assumption contestants would make on the show after I showed them there was nothing behind one door," he said. "They'd think the odds on their door had now gone up to 1 in 2, so they hated to give up the door no matter how much money I offered. By opening that door we were applying pressure. We called it the Henry James treatment. It was 'The Turn of the Screw.' "
Mr. Hall said he realized the contestants were wrong, because the odds on Door 1 were still only 1 in 3 even after he opened another door. Since the only other place the car could be was behind Door 2, the odds on that door must now be 2 in 3.
Sitting at the dining room table, Mr. Hall quickly conducted 10 rounds of the game as this contestant tried the non-switching strategy. The result was four cars and six goats. Then for the next 10 rounds the contestant tried switching doors, and there was a dramatic improvement: eight cars and two goats. A pattern was emerging.
"So her answer's right: you should switch," Mr. Hall said, reaching the same conclusion as the tens of thousands of students who conducted similar experiments at Ms. vos Savant's suggestion. That conclusion was also reached eventually by many of her critics in academia, although most did not bother to write letters of retraction. Dr. Sachs, whose letter was published in her column, was one of the few with the grace to concede his mistake.
"I wrote her another letter," Dr. Sachs said last week, "telling her that after removing my foot from my mouth I'm now eating humble pie. I vowed as penance to answer all the people who wrote to castigate me. It's been an intense professional embarrassment." Manipulating a Choice
Actually, many of Dr. Sachs's professional colleagues are sympathetic. Persi Diaconis, a former professional magician who is now a Harvard University professor specializing in probability and statistics, said there was no disgrace in getting this one wrong.
"I can't remember what my first reaction to it was," he said, "because I've known about it for so many years. I'm one of the many people who have written papers about it. But I do know that my first reaction has been wrong time after time on similar problems. Our brains are just not wired to do probability problems very well, so I'm not surprised there were mistakes."
After the 20 trials at the dining room table, the problem also captured Mr. Hall's imagination. He picked up a copy of Ms. vos Savant's original column, read it carefully, saw a loophole and then suggested more trials.
On the first, the contestant picked Door 1.
"That's too bad," Mr. Hall said, opening Door 1. "You've won a goat."
"But you didn't open another door yet or give me a chance to switch."
"Where does it say I have to let you switch every time? I'm the master of the show. Here, try it again."
On the second trial, the contestant again picked Door 1. Mr. Hall opened Door 3, revealing a goat. The contestant was about to switch to Door 2 when Mr. Hall pulled out a roll of bills.
"You're sure you want Door No. 2?" he asked. "Before I show you what's behind that door, I will give you $3,000 in cash not to switch to it."
"I'll switch to it."
"Three thousand dollars," Mr. Hall repeated, shifting into his famous cadence. "Cash. Cash money. It could be a car, but it could be a goat. Four thousand."
"I'll try the door."
"Forty-five hundred. Forty-seven. Forty-eight. My last offer: Five thousand dollars."
"Let's open the door."
"You just ended up with a goat," he said, opening the door. The Problem With the Problem
Mr. Hall continued: "Now do you see what happened there? The higher I got, the more you thought the car was behind Door 2. I wanted to con you into switching there, because I knew the car was behind 1. That's the kind of thing I can do when I'm in control of the game. You may think you have probability going for you when you follow the answer in her column, but there's the pyschological factor to consider."
He proceeded to prove his case by winning the next eight rounds. Whenever the contestant began with the wrong door, Mr. Hall promptly opened it and awarded the goat; whenever the contestant started out with the right door, Mr. Hall allowed him to switch doors and get another goat. The only way to win a car would have been to disregard Ms. vos Savant's advice and stick with the original door.
Was Mr. Hall cheating? Not according to the rules of the show, because he did have the option of not offering the switch, and he usually did not offer it.
And although Mr. Hall might have been violating the spirit of Ms. vos Savant's problem, he was not violating its letter. Dr. Diaconis and Mr. Gardner both noticed the same loophole when they compared Ms. vos Savant's wording of the problem with the versions they had analyzed in their articles.
"The problem is not well-formed," Mr. Gardner said, "unless it makes clear that the host must always open an empty door and offer the switch. Otherwise, if the host is malevolent, he may open another door only when it's to his advantage to let the player switch, and the probability of being right by switching could be as low as zero." Mr. Gardner said the ambiguity could be eliminated if the host promised ahead of time to open another door and then offer a switch.
Ms. vos Savant acknowledged that the ambiguity did exist in her original statement. She said it was a minor assumption that should have been made obvious by her subsequent analyses, and that did not excuse her professorial critics. "I wouldn't have minded if they had raised that objection," she said Friday, "because it would mean they really understood the problem. But they never got beyond their first mistaken impression. That's what dismayed me."
Still, because of the ambiguity in the wording, it is impossible to solve the problem as stated through mathematical reasoning. "The strict argument," Dr. Diaconis said, "would be that the question cannot be answered without knowing the motivation of the host."
Which means, of course, that the only person who can answer this version of the Monty Hall Problem is Monty Hall himself. Here is what should be the last word on the subject:
"If the host is required to open a door all the time and offer you a switch, then you should take the switch," he said. "But if he has the choice whether to allow a switch or not, beware. Caveat emptor. It all depends on his mood.
"My only advice is, if you can get me to offer you $5,000 not to open the door, take the money and go home."
Tuesday, October 21, 2008
Richard Sylla, 10.15.08, 2:00 PM ET
Banking has been a highly politicized business throughout American history. With the US treasury now planning to inject $250 billion of equity capital into our banks, the business may well become even more politicized. A quick review of what we have learned from past episodes of politicized banking might therefore be in order.
The very first U.S. bank, the Bank of North America in Philadelphia, was chartered by Congress in 1781 at the behest of Robert Morris, the superintendent of finance, to help fund the American Revolution. Morris used the proceeds of a French loan to buy most of the bank's shares for the national government.
Several states, doubting that Congress had the authority to charter a bank, blessed the venture with charters of their own. Pennsylvania's legislature revoked the bank's charter in the mid-1780s, forcing it to obtain one from Delaware to continue in business. But the bank was able to secure a more restrictive charter from Pennsylvania a couple of years later. From that time to now, banking has been a political issue between U.S. states as well as between the states and the federal government.
Treasury Secretary Alexander Hamilton in 1790 recommended that Congress charter a Bank of the United States as a national and proto-central bank. Federalist majorities enacted the plan, which called for the bank to have 20% government ownership. But the Republican opposition, led by Congressman James Madison and Thomas Jefferson, the secretary of state, advised President Washington that the measure was unconstitutional. Hamilton effectively countered their arguments, and Washington signed the bill into law. The bank became an effective institution, aiding federal finances and opening branches in several states so that the country had interstate banking.
That would not last. In 1811, on the negative vote of the vice president breaking a tie in the Senate, the bank's charter was allowed to lapse. Some states-rights proponents still thought a federal bank was unconstitutional. More important was the opposition of many state-chartered banks, some of which were partly owned by states, and state legislators representing the banking interests. These interests reasoned that, with the federal bank gone, they would both get rid of a regulator and get the federal government's banking business.
It was just the wrong time to abandon a central bank. A year later, the War of 1812 broke out, and the absence of the national bank made war finance difficult, which reduced the effectiveness of U.S. military efforts. At least a lesson was learned. Right after the war, Congress chartered a second Bank of the United States, with many of the first bank's opponents, including President Madison, becoming staunch supporters of the new central bank. After a rocky start connected with post-war deflation, the second bank gave the country financial stability during the Era of Good Feeling in the 1820s and the early 1830s.
Once again, it did not last. President Andrew Jackson vetoed Congress's re-charter of the second bank in 1832, and it ceased to be America's central bank in 1836. The reasons were the same ones as in 1811. Jackson thought the bank was an unconstitutional conferral of special privileges on elites. And the 700 or so state banks once again reasoned that they would benefit by getting rid of a central-bank regulator and getting the federal government's banking business. Jackson pleased them by removing government deposits from the second bank and placing them in state "pet banks" friendly to his Democratic party.
Without a central bank, the country immediately plunged into a protracted period of financial instability. There were bank panics in 1837 and 1839. As land and other asset prices plunged, state revenues declined, and by 1842, nine states had defaulted on debts incurred to build transportation and financial infrastructures. Congressmen from those states asked for a federal bailout, but Congress voted down that proposal.
Aided by investment in railroads and gold discoveries in California, the US economy recovered from the Jackson-inspired financial disaster. But the country's currency was a mess, with each of some 1,500 banks issuing several denominations of individual bank notes. Counterfeiting was rife. And the system was unstable, with several minor crises and a major financial panic in 1857.
The Civil War provided an opportunity for Abraham Lincoln's administration to bring some order out of the chaos. In 1863 to 1864, Congress passed National Currency and Banking acts to create the National Banking System of federally chartered national banks.
These banks would issue a uniform national currency backed by U.S. government bonds, which not so incidentally aided the war effort by enlarging the demand for those bonds. State bank notes were taxed out of existence in the hope that all banks would be forced into the national system. That didn't work because some state banks, preferring laxer state regulation, abandoned note issuing and continued as deposit banks. This was the origin of our so-called dual banking system of federal- and state-chartered banks.
By the early 20th century, the U.S. had by far the largest banking system of any country. Its more than 20,000 individual banks held more than 40% of the world's bank deposits.
What the U.S. lacked was a central bank, having abandoned that concept in the 1830s. As a result, the world's largest economy was prone to financial instability. Major banking panics occurred in 1873, 1884, 1893 and 1907, in part because there was no lender of last resort to provide liquidity during bank runs.
After the panic of 1907, in which private banker J. P. Morgan acted as a one-man central bank, Congress studied other countries' financial systems and created a new central bank, the Federal Reserve System, in 1913 to 1914. The Fed made major mistakes in the Great Depression of the 1930s and the Great Inflation of the 1970s, but the U.S. had far fewer financial crises under the Fed than it did when there was no central bank.
Something like the current Treasury plan for capital injections into banks occurred in the Great Depression. President Hoover established the Reconstruction Finance Corp. in 1932 to lend to distressed banks and other businesses. In 1933, President Roosevelt expanded that mandate to authorize the RFC to invest in preferred stock in banks.
From then until 1935, the RFC purchased approximately $1.3 billion of such preferred stock in approximately 6,000 banks. As a percent of gross domestic product then, this was roughly equivalent to the current $250 billion plan. Along with FDIC deposit insurance that came in at the same time, the 1930s injections did stabilize the banking system. There were far fewer bank failure after 1933 than before.
It's clear from this review of government involvement in banking over the course of U.S. history that the current interventions are not without precedents extending back more than two centuries. We don't like our governments to be involved in banking, fearing that it such involvement will politicize what should be economic and business matters.
Secretary Paulson this week blurted out that he wished he didn't have to take the actions he was taking, but he saw no reasonable alternative. Government finance and banking are both part of an integrated U.S. financial system. They can't avoid being heavily involved with each other. It has been that way from the birth of our country. We might as well get used to it.
Richard Sylla is the Henry Kaufman professor of the history of financial institutions and markets and professor of economics at the Stern Business School at NYU.
guardian.co.uk, Wednesday October 15. 2008
The root of this financial crisis is the tension between wanting to spread risk and not understanding its consequences
The current financial crisis, the loss of asset values, the refusal to extend normally-given credit and the great increase in defaults on obligations ranging from individual mortgages to the debts of great investment banks presents, of course, a pressing challenge to the fiscal authorities and central banks to take measures to minimise the consequences. But they also present a challenge to standard economic theory, a challenge all the more important since the development of policies to prevent future financial crises will depend on a deeper understanding of the processes at work.
That economic decisions are made without certain knowledge of the consequences is pretty self-evident. But, although many economists were aware of this elementary fact, there was no systematic analysis of economic uncertainty until about 1950. There have been two developments in the economic theory of uncertainty in the last 60 years, which have had opposite implications for the radical changes in the financial system. One has made explicit and understandable a long tradition that spreading risks among many bearers improves the functioning of the economy. The second is that there are large differences of information among market participants and that these differences are not well handled by market forces. The first point of view tends to argue for the expansion of markets, the second for recognising that they may fail to exist and, if they do come into being, may fail to work for the benefit of the general economic situation.
The value of spreading risks has, of course, been recognized as the basis of conventional insurance as well as the issue of company shares that spread corporate risks widely. The central element of standard economic analysis since the 1870s has been the concept of general economic equilibrium, which, under competitive conditions, leads to an optimal allocation of resources. In the 1950s, it was shown how to incorporate uncertainty into general equilibrium, which suggests, at least, that increasing the number and coverage of risk-bearing instruments would improve the running of the economy. Not only would risks be more efficiently borne, but, more importantly, additional socially valuable risky enterprises would be undertaken. Research showed how derivative securities should be priced, how individuals should choose portfolios to minimise their variability, and how individual contracts, such as mortgages, could be bundled so as to distribute the risks for different parts of the market with different risk tolerances.
The second strand of analysis was a growing recognition of the importance of information in governing reactions to uncertainties. If individuals in the market have different degrees of information, the ability to create securities or engage in other forms of contracts becomes limited; the less informed understand that the more informed will take advantage and react accordingly. This situation was long recognized by insurance companies under such terms as, "moral hazard" (when the insurer cannot tell how well the insured is avoiding risks) and "adverse selection" (when the insurer cannot distinguish among differentially risky insured, so that, at any given premium, the more risky insure themselves most extensively). Economists began to realise that "asymmetric" information was the key to understanding the limits of health insurance and the incentive problems of socialism and then that these concepts found their most important application in financial markets, precisely in the complex securities that the first strand of analysis had called for.
There is obviously much more to the full understanding of the current financial crisis, but the root is this conflict between the genuine social value of increased variety and spread of risk-bearing securities and the limits imposed by the growing difficulty of understanding the underlying risks imposed by growing complexity.
Monday, October 20, 2008
（当時大阪大学大学院経済学研究科）現近畿大学 安孫子 勇一教授
不良債権とは、収益性があるとの判断から貸出されたものの、諸事情から思うように収益が上がらず、約定通りの返済が難し くなった債権です。もっとも、不良債権といっても、全く返せない程悪いもの（原則として償却あるいは引当を行います）から、一部分あるいは大部分返せるも のまで、非常に幅広い概念です。
不良債権か否かの線引きには、なかなか難しいところがあります。例えば、アパート経営者への貸出があると します。それを返せるかどうか判断する際、アパートの家賃収入が将来にわたってどう推移するか予想します。アパートの家賃収入は一部屋あたりの単価と何人 入るか、の掛け算となります。場合によっては空室もあるでしょうし、家賃が将来どうなるかも考慮しなければなりません。アパートに入居していても家賃を 払ってくれない人がいるかもしれません。これらを全て考えて収入を予想し、その収入から借入金をちゃんと返せるか銀行と議論することになるのですが、前提 となる空室率、一部屋あたりの家賃はあくまでも予想にしか過ぎません。アパートのそばにあった工場が移転すれば空室率が上がるでしょうし、近くに立派な新 築アパートが出来れば、そこの家賃は下げざるを得なくなります。このように、前提の置き方や環境変化次第で不良債権かどうかが変わるものなのです。
...また、早期是正措置が98年度に導入されて以来、銀行は原則年２回、自己査定を行なっています。銀行が各企業のバラン ス・シート、資産内容、貸付金の内容、担保価値などを自分で査定するようになったのです。それまで銀行の資産をチェックしていたのは大蔵省の検査（MOF 検）で、銀行は受身でした。自己査定制度の導入は、銀行に個々の貸付先の状況について定期的に見直すというインセンティブを与えたという意味で、画期的な 制度変更だと思います。また、自己査定の結果に応じて銀行は、償却・引当をしなければなりません。しかも、公認会計士がそのチェック体制が十分か確認する ことになりました。その上、金融庁の金融検査や、日本銀行の考査でも償却・引当の妥当性などをチェックします。このため、金融機関の信用リスク管理が厳格 化しつつあります。
Ⅰ～Ⅳの分類に先立って、借り手を「正常先」、「要注意先」、「破綻懸念先」、「実質破綻先」、「破綻先」の５つの債務者区分に分類します。正常先への 債権は原則としてⅠ分類（正常債権）になります。要注意先への債権は、国債や預金担保などの優良担保、あるいは政府保証などの優良保証があるものはⅠ分類 ですが、優良担保・優良保証のないものはⅡ分類です。破綻懸念先への債権のうち、優良担保・優良保証がついたものは先ほどと同様にⅠ分類、土地や株などの 一般担保や一般保証のついたものはⅡ分類、担保や保証のないものはⅢ分類になります。Ⅲ分類になると個別に貸倒引当金を積む必要が出てきます。検査や考査 の場では、債務者区分をどうするかが大きな問題となるようです。正常先なのか要注意先なのか、あるいは要注意先なのか破綻懸念先なのかが、よく議論になり ます。
貸出を行う場合の一般的な手順を整理しますと、まず貸出の申込を受け、審査します。次に、担保や保証、期間、金利等の条件を決定し、貸出を実行します。 貸出中には利払いや返済状況をチェックし、期限までに返済して貰いますが、約束どおり返済されない場合、返済条件を見直すか担保処分等で回収を行います。 審査の結果、貸してもよいとされたお金が必ず返済されるとは限りません。企業は様々なリスクを抱えていて、お金を借りたプロジェクトがうまくいくとは限ら ないのです（例：食品会社の食中毒、狂牛病の発生等）。貸出には不良債権がつきものだということを、まずご理解下さい。
...ただ、これらの事例が生じても、銀行が必ず取りはぐれるわけではありません。担保や保証の価値がそれなりにあれば回収で きます。実際バブル崩壊前は、倒産しても不動産担保などを売却した後の銀行のロスはゼロあるいはごく僅かという事例が沢山ありました。当時は、担保の不動 産なり株が上がり続けていたからです。バブルの崩壊後には、土地の値段はどんどん下がり、今の日本の地価は一番高かった時期に比べ、平均では3分の1以下 にまで落ちています。これだけ地価が下がると、せっかく担保の土地を売ったところで十分回収できず、ロスが発生します。これが現在の不良債権問題発生の大 きな背景です。
（資金運用収益）―（資金調達費用）―（営 業経費（人件費＋物件費＋税金＜固定資産税などの地方税が中心＞））ですが、実はもう一つ4つ目の重要な要素があります。貸倒損失や引当で す。実はこれが、貸出の収益性を考える際のポイントなのです。
日本の銀行は、今では本業の儲けがかなり苦しい状態になっています。まず、資金運用益ですが、資金運用利回りという数字を見ますと、かつて銀行は貸出な どで平均的に5％～8％位で資金運用できていたのに、現在では低金利政策もあって、2％を切るところまで下がってきています。一方、資金調達コストは、預 金金利がどんどん下がったため、今では0.5％を切るところまで低下しています。この間、営業経費は約1％かかっています。この結果、2％近い運用利回り のうち1％は経費に食われ、0.5%位は資金調達コストですので、利鞘は0.4％を少し下回る位しかありません。
他方、バブルの頃までは貸倒損失や引当は あまりなかったのですが、最近はどんどん増え、2001年度には直接償却だけで0.4％位まできており、間接償却も含めると、ひどい年には1％を超えてい ます。利鞘は0.3％台ですので、不良債権処理まで考えれば、銀行は損を出しているのです。このため、銀行はタケノコ生活を余儀なくされ、身ぐるみを少し ずつ剥がれ、昔安く仕入れた土地や株を高く評価して利益を出すことなどで、かろうじて決算をしています。銀行は貸倒リスクを反映した金利を取れていないの です。具体的に、2002年3月期の全国銀行の決算をみますと、資金の運用収益が14.1兆円、資金調達費用が4.4兆円、営業経費が6.9兆円ですの で、差し引き2.8兆円の儲けのもとしかありません。それに対して、貸出金の直接償却だけで2.9兆円もあり、早くもこの段階で赤字です。このほか、貸倒 引当金の繰入額が4.6兆円ありますので、トータルでは4.8兆円の赤字です。別途、手数料収入が2兆円ほどあるのですが、手数料などの支出もかなり多 く、焼け石に水です。
このように、銀行が赤字決算を行えば、銀行の自己資本比率が低下します。自己資本比率が一定の水準（BIS基準といわれる国際基準の銀行は8％、国内基 準の銀行は4％）を下回れば金融当局から各種の行政措置がとられます（早期是正措置）。銀行はそれを避けようと、貸出の圧縮を図ろうとします。これが、い わゆる「貸し渋り」とか「貸しはがし」の一因と言われています。
また、現在では、信用リスク管理の一環として、取引先企業の信用格付けを行い、定期的に見直す銀行が多くなりました。信用格付けが低い企業に対して、銀行は貸出の回収を急ぐ場合があるようです。ミクロ的には正しい銀行行動であっても、マクロ経済で見ると困った問題が起こる（経済学でいうと「合成の誤 謬」）可能性があります。信用格付けが低い企業から一斉に貸出を回収すれば、景気が悪くなっても不思議ありません。日本では７割が赤字企業と言われていま すので、こうした企業の資金繰りは厳しくなります。
...こうした中で、多くの銀行が不良債権処理を一斉に行えば、担保処分などから地価が一層下落し、失業者の増加などで景気や他の債権者の財務を悪化させ、不 良債権が更に拡大する恐れもあります。雇用の新たな受け皿を創出するための政策措置や、産業再編の痛みを緩和するための措置も同時に考える必要があるので はないかと思います。
まず、銀行は自助努力を行う必要があります。第一に、信用リスク管理の高度化が大切です。信用リスク管理のためのデータを蓄積し、統計学などを用いて高 度な分析を行い、それを反映した金利設定を行っていくことが大事だと思います。運用資産の中身をよく知った上で、金利のみを武器とした無用な貸出競争はや めることも大切です。
第三に、証券化やデリバティブなど新しい手法を活用したビジネスの展開を考える必要があります。最近では、債権の流動化が比較的容易になり、企業も財務 リストラをしやすくなりました。それを銀行がサポートすれば、手数料収入を得ることもできます。新規業務を高度な手法で行うことも、銀行が立ち直るための 一つの方法だと思います。
第五に、営業経費面でのコスト削減です。人件費や物件費を有効に活用し、優れたIT戦略で業務を効率化することが望まれます。但し、あまり職員数を減ら しすぎれば、四番目の貸出プロジェクトのチェックや、二番目の不良債権を正常化するためのサポートができなくなりますので、五番目ばかりに頼るのは能がな いと思います。
これらが銀行の自助努力として考えられる対応策ですが、それだけで日本の不良債権処理を行なうには厳しい局面にあると思います。そこで、政策対応も必要 だと考えます。まず、日本経済の活性化、成長産業の育成を図り、良質な資金需要を高める必要があります。第二に、企業会計と税務会計との乖離を縮小するよ うな政策が必要です。最近では税効果会計が導入され、有税償却で払い過ぎた税金を後日返してもらうことを前提に一種の資産を計上できますが、政府が一旦 取った税金は直接返さず、黒字が出た決算期に銀行が納める税金から減額できるだけとしていますので、赤字の銀行には税金が戻りません。将来返ってくる税金 をあてにして銀行が資産計上したのに、返ってこない場合がある仕組みなのです。不良債権の処理を進めるためには、素直に直接返す方式に改めた方が良いので は、と考えます。第三に、今後民営化される公的金融機関の地域金融への貢献も期待されるところです。
この一環で、「効果的なほめ方、しかり方」について、運転士や管理職計５３０人にアンケートなどを実施。部下が工夫した点を上司が評価した場合は業務へ の責任感が上昇するが、評価しなかったときは責任感が低下することがわかった。ただ、上司との関係が悪ければ、責任感が低下するという結果も出ており、 「上司と部下の関係が良好な状態を保ったうえでほめることが重要」（同研究所）としている。
“We have reached a critical point,” John Maynard Keynes wrote in March 1933. “We can ... see clearly the gulf to which our present path is leading.” If governments did not take action, “we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict.”
As the world reels from a 1929-style stock market plunge and a 1931-style banking crisis, his words are a fair assessment of the dangers we face once again. Keynes, whose life’s mission was to save capitalism from itself, is more relevant than at any time since his death in 1946.
...The key to Keynes was his commitment to preserving the market economy by making it work. He was dismissive of Marxism but believed the market economy could survive only if it earned the support of the public by raising living standards.
The role of the economist, he believed, was to be the guardian of “the possibility of civilisation”, and no economist has ever been more suited for that role.
Lionel Robbins, later head of the London School of Economics, described Keynes as “one of the most remarkable men that have ever lived,” surpassed in his time only by Winston Churchill. Even Friedrich Hayek, Keynes’ staunchest adversary, described him as “the one really great man I ever knew, and for whom I had unbounded admiration”.
His optimistic, positive thought reflected his comfortable and happy upbringing and career. An academic’s son, he won scholarships to Eton and Cambridge and fell in with the Bloomsbury Group, the circle of writers and artists such as Virginia Woolf and Lytton Strachey who embodied an ideal of cultured living.
He was an imposing figure, six feet, six inches tall and full of jokes, gossip and sharp observations. Alongside economics, he had an array of other interests as mathematician, administrator, academic, investor, journalist, art collector, politician, impresario and diplomat. He was even an exemplary husband, devoted to his wife, Lydia Lopokova, a ballerina. In his language he could be carelessly provocative. But, as he said: “Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.”
When bad policies were making economic problems worse, he felt a moral obligation to change them. He worked with distinction at the Treasury during the first world war and at the war’s end argued presciently against the imposition of excessively harsh conditions on Germany. When his advice was ignored, he left and published his views in his first great polemic, The Economic Consequences of the Peace .
Returning to Cambridge, Keynes kept up a flow of books and articles, including The Economic Consequences of Mr Churchill, savaging Britain’s return to the gold standard in 1925. It was not until the Great Depression, however, that his ideas reached their full flowering, published as The General Theory of Employment, Interest and Money in 1936.
The heart of the book is the idea that economic downturns are not necessarily self-correcting. Classical economics held that business cycles were unavoidable and that peaks and troughs would pass. Keynes contended that in certain circumstances economies could get stuck. If individuals and businesses try to save more, they will cut the incomes of other individuals and businesses, which will in turn cut their spending. The result can be a downward spiral that will not turn up again without outside intervention.
That is where government comes in: to pump money back into the economy by some means, such as spending on public works, to persuade individuals and businesses to save less and spend more themselves.
Keynes wrote to George Bernard Shaw that he expected the General Theory to “largely revolutionise ... the way the world thinks about economic problems”, and so it proved. Economists such as Paul Samuelson and James Tobin systematised Keynes’ ideas, using them as the foundations of what became orthodox thought and economic policy for more than two decades after the second world war.
The cover of Time magazine in December 1965 quoted Milton Friedman saying: “We are all Keynesians now.” Friedman later said he had been misrepresented by selective quotation, but the point held good. Charles L. Schultze, then US budget director, felt able to tell Time: “We can’t prevent every little wiggle in the economic cycle, but we now can prevent a major slide.”
By the time Richard Nixon borrowed Friedman’s line in 1971, however, the tide was already beginning to turn. Like a share tip from a lift boy, Nixon’s endorsement was a sign that Keynes’ intellectual stock was about to fall. Keynesian economics seemed as inadequate in the 1970s stagflation as classical economics had been for the 1930s depression, and Friedman’s monetarism eclipsed it among policy-makers in the US and Britain.
After crude applications of monetarism also foundered in the 1980s, modern macroeconomic orthodoxy blended ideas from both, reflecting a belief in the ability of monetary and fiscal policy to affect employment and growth, but also concern for inflation and budget deficits.
As the financial crisis has deepened, that orthodoxy has been shaken. The problems Keynes faced in the 1930s, such as the ineffectiveness of monetary policy and banking failures triggered by falling asset prices, again seem the most pressing. Keynes’ solutions, including greater public spending funded by borrowing, are becoming popular. The criticisms that this will fuel inflation and raise budget deficits are still heard but are increasingly seen as irrelevant.
Robert Skidelsky writes at the end of his definitive three-volume biography that Keynes’ ideas “will live so long as the world has need of them”. It certainly seems to need them now. Keynes was scathing about the view that the Great Depression was a return to normality, a necessary correction after the unsustainable excesses of the 1920s. On the contrary, he argued, the economic expansion should be seen as the normal state of affairs and the downturn was an “extraordinary imbecility”.
With the right policies, he said, the good times could be brought back. He was right then; we must hope he will be right again.
Copyright The Financial Times Limited 2008
Saturday, October 18, 2008
図２、ウィキペディア言語別比較(TechCrunch Japanese 2008.3.29)
fast-expanding global education market (see chart), reflect “inputs” such as the number and quality of staff, as well as how many prizes they win and how many articles they publish. The new idea is to look at the end result—how much knowledge is really being imparted.
大阪大学大学院経済学研究科 仁科 一彦教授
...20世紀最大の経済学者の一人であるサムエルソンが、その弟子に、「将来価格が確率現 象である状況において、派生契約を結び、市場で取引した場合に、一体、いくらの値段がつくのか?」を、博士論文のテーマとして提案しました。これに対し て、マートンは70年頃のことですが、「こう考えればいいのではないか」といったフレームワークを示しました。その後73年に、ブラックとショールズが、 将来の価格動向が、アインシュタインの考えたブラウン運動(生物の細胞内での分子の動きを数学的に表現した方程式)をする、そういう前提のもとで、派生契 約を市場で取引したときに、需要と供給が一致したところで値段が決まるといった経済のロジックを入れると、こうなるはずだ、と発表しました。この73年 は、偶然にも、シカゴの市場でオプション取引が実際に開始された年でもあったわけですが、以来、アメリカでは、オプションと先物は重要な取引となっていま す。
20世紀最後の25年間の間に、経済学は大きく塗り替えられ、先物、オプションあるいはスワップといった用語のない教科書はなくなってしまいました。市 場経済は計画経済に比べ資源が効率的に利用でき、たとえ現実にリスクや不確実性がある経済であってもやはり市場経済がいいと論理的に証明されたのは60年 代のことです。ここで登場したのがデリバティブスでした。つまり、リスクをヘッジすることができ、それによってリスクのない状態に導くことのできるデリバ ティブスの契約さえ利用可能であれば、市場メカニズムがベストの経済体制であるということが証明されたわけです。
また従来の経済学では、価格が高い・低いという相対価格なら自信はあるが、絶対価格を示すことはできませんでした。ところが、デリバティブスの世界は全 く異なっていて、商品の将来価格がブラウン運動をすると仮定すると、この仮定がいいかどうかは別として、この仮定さえ認めると、ある種の契約の値段はこれ これいくらになるというふうに、絶対価格を示すことができるのです。当然、これを金融や為替の世界だけに留めておく手はありません。事実、今では、ビジネ スの幅広い分野で生ずる様々な不確実性やリスクをコントロールするために、先物やオプションの考え方が利用されています。
さて、このようなデリバティブスのルーツは一体どこにあると考えられているのでしょうか。諸説がありますが、今では、堂島にあるというのが共通認識に なっています。18世紀後半の堂島で、帳合米という現物ではなく帳面上で決済する取引が始まりましたが、帳面の上での決済であれば、先物も取引できること になります。これが先物取引のルーツとされています。堂島の米商人の考えたシステムの見事さ、完成度、規模からみて、堂島にまさるものはないといえるで しょう。米の取引が当時の日本経済を左右する重要なものであったと同時に、大阪商人が商取引の合理性を追求し、その他のこと、例えば、政府の権力といった ものは考えずに、その追求を押し進めたことが、それを可能にしたのだと思います。ちなみに、本学の宮本教授の研究によると、堂島の米商人が考えた帳合米制 度の導入前と導入後では、明らかに米の価格変動が小さくなっているとういことです。18世紀後半といえば、アダム・スミスが国富論を書いた時代ですが、そ の時代に、極東の日本で、スミスも想像しなかった米の先物取引が行われ、それが価格に反映されていたということは、まさに誇るべきことではありませんか!
日本経済にとって、今後、デリバティブスをどう考えればよいのでしょうか。最後に、この点をみておきましょう。今後、デリバティブスが縮小することは、 ありえないと思います。デリバティブスという便利な道具を知ってしまえば、通常の道具として使われようになるのは間違いないからです。ただ、そのために は、デリバティブスのアイデアやデザイン料を決める、いい市場が用意されていなければなりません。ここ10年、元気がないとはいえ、日本市場は、やはり規 模の大きさと経験、自由な経済という点からみても、デリバティブス取引の中心になる資格が備わっています。世界中のどこの市場であれ、自分にとって都合の よい契約を、より安い値段で取引してくれるところであればいいわけです。世界の中で、日本のマーケットがより透明性をもって、より拡大していくことを期待 しており、このことは、ルーツをみても、大阪商人のより合理性を追求する姿勢をみても十分に可能であると考えています。
Ms. Schwartz, 92 years old, is one of the exceptions. She's not only old enough to remember the period from 1929 to 1933, she may know more about monetary history and banking than anyone alive. She co-authored, with Milton Friedman, "A Monetary History of the United States" (1963). It's the definitive account of how misguided monetary policy turned the stock-market crash of 1929 into the Great Depression.
...her mind is as sharp as ever. She speaks with passion and just a hint of resignation about the current financial situation. And looking at how the authorities have handled it so far, she doesn't like what she sees.
To understand why, one first has to understand the nature of the current "credit market disturbance," as Ms. Schwartz delicately calls it. We now hear almost every day that banks will not lend to each other, or will do so only at punitive interest rates. Credit spreads -- the difference between what it costs the government to borrow and what private-sector borrowers must pay -- are at historic highs.
This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. "The Fed," she argues, "has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible."
So even though the Fed has flooded the credit markets with cash, spreads haven't budged because banks don't know who is still solvent and who is not. This uncertainty, says Ms. Schwartz, is "the basic problem in the credit market. Lending freezes up when lenders are uncertain that would-be borrowers have the resources to repay them. So to assume that the whole problem is inadequate liquidity bypasses the real issue."
In the 1930s, as Ms. Schwartz and Mr. Friedman argued in "A Monetary History," the country and the Federal Reserve were faced with a liquidity crisis in the banking sector. As banks failed, depositors became alarmed that they'd lose their money if their bank, too, failed. So bank runs began, and these became self-reinforcing: "If the borrowers hadn't withdrawn cash, they [the banks] would have been in good shape. But the Fed just sat by and did nothing, so bank after bank failed. And that only motivated depositors to withdraw funds from banks that were not in distress," deepening the crisis and causing still more failures.
But "that's not what's going on in the market now," Ms. Schwartz says. Today, the banks have a problem on the asset side of their ledgers -- "all these exotic securities that the market does not know how to value."
"Why are they 'toxic'?" Ms. Schwartz asks. "They're toxic because you cannot sell them, you don't know what they're worth, your balance sheet is not credible and the whole market freezes up. We don't know whom to lend to because we don't know who is sound. So if you could get rid of them, that would be an improvement." The only way to "get rid of them" is to sell them, which is why Ms. Schwartz thought that Treasury Secretary Hank Paulson's original proposal to buy these assets from the banks was "a step in the right direction."
The problem with that idea was, and is, how to price "toxic" assets that nobody wants. And lurking beneath that problem is another, stickier problem: If they are priced at current market levels, selling them would be a recipe for instant insolvency at many institutions. The fears that are locking up the credit markets would be realized, and a number of banks would probably fail.
Ms. Schwartz won't say so, but this is the dirty little secret that led Secretary Paulson to shift from buying bank assets to recapitalizing them directly, as the Treasury did this week. But in doing so, he's shifted from trying to save the banking system to trying to save banks. These are not, Ms. Schwartz argues, the same thing. In fact, by keeping otherwise insolvent banks afloat, the Federal Reserve and the Treasury have actually prolonged the crisis. "They should not be recapitalizing firms that should be shut down."
Rather, "firms that made wrong decisions should fail," she says bluntly. "You shouldn't rescue them. And once that's established as a principle, I think the market recognizes that it makes sense. Everything works much better when wrong decisions are punished and good decisions make you rich." The trouble is, "that's not the way the world has been going in recent years."
Instead, we've been hearing for most of the past year about "systemic risk" -- the notion that allowing one firm to fail will cause a cascade that will take down otherwise healthy companies in its wake.
Ms. Schwartz doesn't buy it. "It's very easy when you're a market participant," she notes with a smile, "to claim that you shouldn't shut down a firm that's in really bad straits because everybody else who has lent to it will be injured. Well, if they lent to a firm that they knew was pretty rocky, that's their responsibility. And if they have to be denied repayment of their loans, well, they wished it on themselves. The [government] doesn't have to save them, just as it didn't save the stockholders and the employees of Bear Stearns. Why should they be worried about the creditors? Creditors are no more worthy of being rescued than ordinary people, who are really innocent of what's been going on."
It takes real guts to let a large, powerful institution go down. But the alternative -- the current credit freeze -- is worse, Ms. Schwartz argues.
"I think if you have some principles and know what you're doing, the market responds. They see that you have some structure to your actions, that it isn't just ad hoc -- you'll do this today but you'll do something different tomorrow. And the market respects people in supervisory positions who seem to be on top of what's going on. So I think if you're tough about firms that have invested unwisely, the market won't blame you. They'll say, 'Well, yeah, it's your fault. You did this. Nobody else told you to do it. Why should we be saving you at this point if you're stuck with assets you can't sell and liabilities you can't pay off?'" But when the authorities finally got around to letting Lehman Brothers fail, it had saved so many others already that the markets didn't know how to react. Instead of looking principled, the authorities looked erratic and inconstant.
How did we get into this mess in the first place? As in the 1920s, the current "disturbance" started with a "mania." But manias always have a cause. "If you investigate individually the manias that the market has so dubbed over the years, in every case, it was expansive monetary policy that generated the boom in an asset.
"The particular asset varied from one boom to another. But the basic underlying propagator was too-easy monetary policy and too-low interest rates that induced ordinary people to say, well, it's so cheap to acquire whatever is the object of desire in an asset boom, and go ahead and acquire that object. And then of course if monetary policy tightens, the boom collapses."
The house-price boom began with the very low interest rates in the early years of this decade under former Fed Chairman Alan Greenspan.
"Now, Alan Greenspan has issued an epilogue to his memoir, 'Time of Turbulence,' and it's about what's going on in the credit market," Ms. Schwartz says. "And he says, 'Well, it's true that monetary policy was expansive. But there was nothing that a central bank could do in those circumstances. The market would have been very much displeased, if the Fed had tightened and crushed the boom. They would have felt that it wasn't just the boom in the assets that was being terminated.'" In other words, Mr. Greenspan "absolves himself. There was no way you could really terminate the boom because you'd be doing collateral damage to areas of the economy that you don't really want to damage."
Ms Schwartz adds, gently, "I don't think that that's an adequate kind of response to those who argue that absent accommodative monetary policy, you would not have had this asset-price boom." Policies based on such thinking only lead to a more damaging bust when the mania ends, as they all do. "In general, it's easier for a central bank to be accommodative, to be loose, to be promoting conditions that make everybody feel that things are going well."
Fed Chairman Ben Bernanke, of all people, should understand this, Ms. Schwartz says. In 2002, Mr. Bernanke, then a Federal Reserve Board governor, said in a speech in honor of Mr. Friedman's 90th birthday, "I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
"This was [his] claim to be worthy of running the Fed," she says. He was "familiar with history. He knew what had been done." But perhaps this is actually Mr. Bernanke's biggest problem. Today's crisis isn't a replay of the problem in the 1930s, but our central bankers have responded by using the tools they should have used then. They are fighting the last war. The result, she argues, has been failure. "I don't see that they've achieved what they should have been trying to achieve. So my verdict on this present Fed leadership is that they have not really done their job."
Friday, October 17, 2008
Keiko Akai is very annoyed. The attractive 21-year-old university student has been planning to do a banana diet for some time now, but she can't get started - and not for lack of trying. "I keep going to OK Store, my local supermarket every single day," she says. "In fact, I've just been there. There are no bananas on the shelves, and it's been like that for a month."
Akai has never weighed more than 100 pounds, and is so slim that her waist is swimming in Zara's smallest size XS skirt. She doesn't need to lose any weight. But Japanese girls obsessed with diets tend to jump at any trendy new ones, so, when Akai heard about a popular actress who'd lost 26 pounds through the Morning Banana Diet, she had to try it. And the dearth of bananas as her local supermarket, and many others, is testimony to the popularity of the new dieting fad.
"Large stores don't have any bananas from noon, and even Ito Yokado (a major supermarket chain) runs out of them after 3 p.m.," says Tomoyuki Horiuchi, sales representative of Tokyo Seika Boeki Co., Ltd., fruit and vegetables wholesale company. Hiromi Ohtaki of Dole Japan, a leading banana importer, sees the boom in sales as largely due to Morning Banana Diet - bananas don't normally sell well during summer, and this year's summer has been especially hot. Still, over the past 4 months, demand has driven Dole Japan to increase its banana imports by upward of 25%, and even then supplies could not keep pace with demand. "In a way this is an emergency," explains Ohtaki. "We've been importing bananas from the Philippines for the past 40 years, but this is the first time something like this happened to us, and we find it very difficult to cope." Time 10/17/08
I saw one singer do a banana diet and succeed (lose her weight) in the TV show in Japan. Many women watched it and go to the store to buy bananas and to try a banana diet.
It seems kind of crazy and definitely shows that Japan is still a peaceful country although many people are annoyed with stock market mess.