As we noted in 2008, the problem was never liquidity. The problem is that the big banks became insolvent because of stupid gambling.

In other words, the government’s whole approach to the 2008 financial crisis was entirely wrong. And the easy money policy (quantitative easing) of central banks doesn’t help, but instead hurts the economy and the little guy. […]

“The IIF said the US Dow Jones Industrial Average’s had hit an all-time high this week more because of relaxed international monetary conditions than thanks to any recovery in the real economy.”

{ Ritholtz | Continue reading }

People who identify as strong multitaskers tend to be impulsive, sensation-seeking and overconfident in their ability to juggle multiple tasks simultaneously. In fact, note the researchers in the latest issue of PLOS, the people who multitask the most are often the least capable of doing so effectively.

[…]

“The people who are most likely to multitask harbor the illusion they are better than average at it,” says Strayer, “when in fact they are no better than average and often worse.”

{ io9 | Continue reading }

{ As an ex-presidential consultant, a former adviser to the World Bank, a financial researcher for the United Nations and a professor in the US, Artur Baptista da Silva’s outspoken attacks on Portugal’s austerity cuts made the bespectacled 61-year-old one of the country’s leading media pundits last year. The only problem was that Mr Baptista da Silva is none of the above. He turned out to be a convicted forger with fake credentials and, following his spectacular hoodwinking of Portuguese society, he could soon face fraud charges. | The Independent | full story }

According to a songwriting blogger named Graham English, a typical pop song has anywhere from 100 to 300 words, with the Beatles at the low end of that scale and the verbose Bruce Springsteen at the high end. (Don McLean’s epic “American Pie,” for those who wonder, clocks in at 324 words.) […]

[Rihanna’s “Diamonds,”] 67 words. Underwhelming. But at least it’s more complex than “Where Have You Been,” […] 40 distinct words.

{ Time | Continue reading }

photo { Alexandra Ziegler }

A tweet from a bogus account said that the former British Prime Minister Margaret Thatcher was dead. […] The account behind this Thatcher hoax amassed more than 32,000 followers before publishing word that the Iron Lady had kicked the bucket.

{ Washington Post | Continue reading }

If you see posts floating around the Twittersphere that the Navy SEAL who killed Osama bin Laden is dead, don’t believe it.

{ Military Times | Continue reading }

New research from the University of Notre Dame shows that when people managed to reduce their lies in given weeks across a 10-week study, they reported significantly improved physical and mental health in those same weeks. […]

“We found that the participants could purposefully and dramatically reduce their everyday lies, and that in turn was associated with significantly improved health,” says lead author Anita Kelly. […]

The study also revealed positive results in participants’ personal relationships, with those in the no-lie group reporting improved relationship and social interactions overall going more smoothly when they told no lies.

{ EurekAlert | Continue reading }

Whenever a successful writer gets busted for “cheating,” the narrative always involves the collective wondering of why they would take such a risk. We saw this with the downfall of Jayson Blair and Johann Hari, and most recently with Jonah Lehrer. For example, Erik Kain called Lehrer’s actions “strange and baffling.” Curtis Brainard at CJR straight-up asks what’s on everybody’s mind: “Following the revelations of self-plagiarism, outright fabrication, and lying to cover his tracks, we were bewildered. How could such a seemingly talented journalist, and only 31 years old, have thrown it all away?”

What’s interesting is that this question takes a noble view of the offender. The implication is always that the person got to the top on their merits, and then drastically changed their behavior due to situational pressures. People rarely consider that the offender might have risen to the top because they’re predisposed to bending rules or inhabiting the gray areas in an advantageous way. […]

Why assume that everything the offenders accomplished up until their downfall was based purely on virtuous actions?

Furthermore, research on the fundamental attribution error (FAE) predicts that people would not attribute the mistakes of somebody like Lehrer to situational pressures. The FAE describes the tendency to believe that a person’s behavior and mental state correspond to a degree that is logically unwarranted by the situation. […] Situational factors tend to be ignored, and that means when somebody cheats, we tend to assume that they have always been, and forever will be, a cheater.

Why then do writers tend to give Lehrer the benefit of the doubt by focusing the pressures of his situation? […] I think it’s fair to say that because of the nature of the industry most writers do have a personal interest in understanding why writers fabricate, how they should be judged, and what the consequences should be. […]

I think it’s worth mentioning Seth Mnookin’s recent post highlighting previously unknown errors made by Lehrer. Mnookin concludes by essentially saying that Lehrer is a cheater, and has always been a cheater.

{ peer reviewed by my neurons | Continue reading }

Fallout continues from the MOCA board’s removal of chief curator Paul Schimmel.

“Jeffrey has always been supportive of my work, but I don’t understand the direction he’s taking the museum right now,” McCarthy said. “I see it as placating the populace. It’s not really what art’s about, but a ratings game.”

Among those in Deitch’s corner is Shepard Fairey, an art star of a younger generation, especially since he designed the “Hope” poster that became the unofficial image of Barack Obama’s 2008 presidential campaign. (The design firm Fairey founded, Studio One, is now handling much of MOCA’s design work.)

In an email, Fairey, 42, praised Deitch’s “astute understanding of the interconnected nature of high and low art culture. When I say low, I don’t mean inferior.”

{ LA Times | Continue reading }

John Baldessari, citing Paul Schimmel’s ouster, becomes the fifth trustee to bolt since February.

{ LA Times | Continue reading }

threesome { Jeffrey Deitch, Yoko Ono, Jeff Koons }

Yesterday we found out that Jonah Lehrer, the Gladwellesque whiz kid who’s The New Yorker’s newest staff writer, reused his own old writings for every goddamn blog post he’s written for The New Yorker so far. […] What’s the latest? […]

Repackaging the work of others without disclosure is arguably a much more serious offense than reusing your own work without disclosure. […]

This is also why you should never pay someone in their 20s to give a speech and expect to learn something new.

{ Hamilton Nohan | Continue reading }

Wired editor Chris Anderson cemented his speaker-circuit bona fides with a 2006 book, The Long Tail, that was hailed as cogent and disruptive. His last effort, Free: The Future of a Radical Price, met with considerably worse reviews, and its premise was derided on many blogs. Worse, chunks of it turned out to have been copied and pasted without attribution from Wikipedia. None of that matters on the speaking circuit, where Mr. Anderson’s agency says he is in more demand than almost any other client worldwide.

{ NY Observer | Continue reading }

If liars betray their true emotions in early, rapid, automatic facial expressions, as some experts have claimed, it would make sense that people who are particularly adept at recognising and processing emotions (one of the hall-marks of emotional intelligence) would therefore have an advantage at spotting deception. […]

The participants performed no better than chance at identifying which clips featured a liar - consistent with past research showing the difficulty of accurate lie detection. However, there was a further paradoxical finding: participants who scored highly on the “emotionality” component of emotional intelligence (pertaining to emotional expression, perception and empathy) were significantly less accurate than average at judging which of the anxious relatives was being genuine.

{ BPS | Continue reading }

photo { Jim Goldberg }

{ History Will Revere Bill Gates, Forget Steve Jobs }

Worst Companies At Protecting User Privacy: Skype, Verizon, Yahoo!, At&T, Apple, Microsoft.

{ Main Device | full story }

photos { Marlo Pascual | Sean and Seng }

If you are an IPO company founder and — even more explicitly — you are Facebook CEO Mark Zuckerberg, you want your share price on the first day to go exactly nowhere, which is what Facebook did. That means no money was left on the table and the company got the best possible deal.

Zuckerberg didn’t and doesn’t care about investors in this scenario. He just doesn’t give a damn. Investment bankers do give a damn because they’d like to have another IPO next week or next month and have that go very well, too. Zuckerberg expects Facebook to never issue another share of stock. He’s done raising money thanks, and on his honeymoon.

I’m sure there was a struggle at the end over how to price the offering. The bankers would have preferred $34 or even $32, but Facebook went for $38 and they were correct to do so from their point of view because we now see it was the optimal solution.

{ Cringely | Continue reading }

As Facebook shares continued their slide, regulators launched inquiries into whether privileged Wall Street insiders were alerted to the company’s weakening financial projections, leading them to shun the stock or dump shares just as buying was opened to the public. […]

SEC Chairwoman Mary Schapiro said the agency will examine “issues” into the bungled Facebook public offering. […]

The legal issue raised could be “securities fraud — plain and simple,” said Ernest Badway, a securities lawyer in New York and New Jersey and a former enforcement attorney at the U.S. Securities and Exchange Commission.

{ LA Times | Continue reading }

One mutual fund source said they had never, in a decade of experience, seen an underwriter cut a company’s outlook during the road show prior to an offering. […]

Brokers who over-ordered shares in the expectation that supply would be limited continued to complain they received too much stock to handle and were left in the dark about forecast changes.

{ The Age | Continue reading }

photo { Victor Cobo }

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.

Last week, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed. […]

“Fuck the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales. […]

There are even more troubling passages, some of which should raise a few eyebrows, in light of former Goldman executive Greg Smith’s recent public resignation, in which he complained that the firm routinely screwed its own clients and denigrated them (by calling them “Muppets,” among other things).

{ Rolling Stones | Continue reading }

Drawing on the metaphor of ‘Prozac’, Prozac leadership encourages leaders to believe their own narratives that everything is going well and discourages followers from raising problems or admitting mistakes. Prozac is used to denote and symbolize a widespread social addiction to excessive positivity. Problems can occur, particularly if this positivity is seen to be discrepant with everyday experience. For example, if leaders repeatedly promise that ‘things can only get better’ but over time this does not happen, followers can become increasingly sceptical and cynical. This article warns that Prozac leadership, whether in corporate, political or other settings, can damage performance by eroding trust, communication, learning and preparedness.


{ SAGE | Continue reading }

photo { Erik Wåhlström }

Six studies demonstrate the “pot calling the kettle black” phenomenon whereby people are guilty of the very fault they identify in others. Recalling an undeniable ethical failure, people experience ethical dissonance between their moral values and their behavioral misconduct. Our findings indicate that to reduce ethical dissonance, individuals use a double-distancing mechanism. Using an overcompensating ethical code, they judge others more harshly and present themselves as more virtuous and ethical.

{ Journal of Experimental Psychology: General | PDF | via Overcoming Bias }

related { Psychological projection is a psychological defense mechanism where a person subconsciously denies his or her own attributes, thoughts, and emotions, which are then ascribed to the outside world, usually to other people. | Wikipedia }

Chances are pretty good you’ve recently seen the “Banksy on Advertising” quote that begins, “People are taking the piss out of you everyday.” The passage is from Banksy’s 2004 book Cut It Out, and it presents the idea that if advertisers are going to fill your world with ads, you have every right to “take, re-arrange and re-use” those images without permission. The quote has been posted widely on Facebook, Tumblr, and Twitter, which is where I found it.

Here’s the interesting part:

Most of it is swiped directly from an essay I wrote in 1999.

{ Reading Frenzy | Continue reading }

{ via copyranter | more }

Exaggeration means to make something seem larger, better, worse, etc than it really is. It is beyond limits of truth that creates doubt. It is a negative factor. So everybody is afraid of it. But nobody can avoid it. It causes irritation. It causes annoyance. Thus exaggerated remarks ultimately aggravate the target person. A fool or a wicked person exaggerates. A wise person neither fabricates the fact nor manufactures a new one. Similarly an innocent soul describes a fact unchanged and states it as it is.

Human nature is to exaggerate to gain something. This gain may either be classical or commercial or both simultaneously. Everybody tries to magnify his good traits and minimize his faults thus to win both ways. Emotion makes one blind. It kills clarity of thought. It escorts a lover in the kingdom of romance, far from the madding crowd. Emotion of the lover exaggerates the good traits of his fiancée hundred times and allures to love her. Later on when emotion is replaced by reality then faults of fiancée are exaggerated thousand times automatically and compel him to depart her mercilessly. Both of these events are striking examples of exaggeration and happen at the beckon of emotion. Exaggeration when is rendered for mere enjoyment, there lies no problem. At that jovial moment fact is fabricated and colored as per the sweet will of the narrators. Each of the narrators joins the competition of exaggeration. Since, they have no base and no brake at all, they stretch the truth with immense power of imagination. But it is too bad if this is used as a weapon to defame or harm to others.

Man beats his own drum with much intensity to gain name, fame and win the game. Due to exaggeration original story remains a mystery. As such they say, in history the names are real but the fact is either full of intentional exaggeration or suppression or both. So it is the topic of research to the scholars to find out the truth. Problem arises if a single topic is exaggerated differently by different scholars.

{ Dibakar Pal, Of Exaggeration, 2011 | SSRN | Continue reading }

How Flawed is the Nation’s Most Watched Economic Indicator

Last October, when the government released its monthly tally of how many people had jobs, there was a collective groan. The September report, which came out the first Friday in October, said the number of employed people in the U.S. had dropped by 95,000, worse than the 57,000 job drop the month before. After looking like we had finally hit an economic rebound, the jobs market was again slipping back again perhaps toward the dreaded double-dip recession. Or was it?

A month later the Bureau of Labor Statistics, which tracks and releases the employment numbers for the government, revised its jobs count for September. In fact, the economy, it turned out, had lost only 41,000 jobs that month. Is that right? Actually no. A month later, the BLS revised the number again. The final tally: In September, the number of people working in America fell by just 24,000. So the economy was improving? Not quite. Remember that month before figure of 57,000 jobs lost. Yeah, well, that was wrong, too, off by nearly all of the drop, or 56,000 jobs.

{ Time | Continue reading }

illustration { Joe Heaps }