Debate Nostalgia Blogging

Birthdays = existential angst, and so I spent a not inconsiderable portion of the weekend unsure what I want or what I’m doing.  Watching Rocket Science didn’t really help (unsatisfying ending!) and mostly made me feel nostalgic.  I never thought I’d be able to miss high school — and I don’t — but I do miss this idealized version of it I wish I had experienced.  Partially captured — and here I’m referring to the grade schemes thwarted and star-crossed crushes, not the awkward teenage sexuality — that version is pleasing but painful.  I’m unsure how I feel about it.

More on point, the movie reminded me of my year debating with a (highly functioning) autistic partner who stuttered almost as bad as the main character.  We dropped so many arguments.  I picked them back up in so many abusive rebuttals.  And I didn’t really care.  When the other team cried foul, I would stare at them contemptuously — how dare they try to take advantage of my partner?!  Knowing we were going to lose every round on the merits, we let the inner sophist fly: constant advocacy shifts, performative kritiks, deontological ‘solvency’, obscure topicality theory…it was great fun.  We still mostly lost, but you really can’t put a price on earning a speaker award while going 1-5.

It saddens me no end that I’ve past the time when being a debater made me a productive, involved person.  On the plus side, I do get to argue with architects everyday about the laws of physics.  Maybe if my boss gave me a trophy…

2 comments to Debate Nostalgia Blogging

  • Thank you Rajiv for consistent ondutantisg and important posts, deeply understood and well explained.You mention one such post, the one on ETFs of small companies. Very intriguing, and I never had time to really think it through. But I just clicked to it again, and now I’d add this:You wrote:Bradley and Litan have previously argued their position in a lengthy and data-filled report, and Wield has testified on the issue before the joint CFTC-SEC committee on emerging regulatory issues. Their argument, in a nutshell, is this: The prices of thinly traded stocks can become much more volatile as a result of inclusion in a heavily traded fund as a consequence of the creation and redemption mechanism. For instance, a rise in the price of shares in the fund relative to net asset value induces authorized participants to create new shares while simultaneously buying all underlying securities regardless of the relation between their current prices and any assessment of fundamental value. Similarly a fall in the fund price relative to net asset value can trigger simultaneous sales of a broad range of securities, resulting in significant price declines for relatively illiquid stocks. This process results not only in greater volatility but also in a sharply increased correlation of returns on individual stocks. The scope for risk-reduction through diversification is accordingly reduced, which in turn influences the asset allocation decisions of long term investors. The result is a reduction in the flow of capital to the smaller, more innovative segments of the market, with predictably dire consequences for job creation.The sponsors do not deny the possibility of these effects, but argue that any mispricing in the markets for individual stocks represents a profit opportunity for alert fundamental traders, and that this should prevent prolonged or major departures of prices from fundamentals. But this is too sanguine an assessment. Fundamental research is costly and its profitability depends not only on the scale of mispricing that is uncovered but also on the size of the positions that can be taken in order to profit from it. Furthermore, since a significant proportion of trades are driven by the arbitrage activities of authorized participants, mispricing need not be quickly or reliably corrected. Both illiquidity and high volatility serve as a deterrent to fundamental research in such markets.The problem, in other words, is real.End QuoteI’ll ask, what about the small companies themselves? If a small company’s price is getting whipped around predominantly because it’s grouped with similar small companies, and not because of its fundamentals, then when it gets unjustifiably whipped down, the CEO, founders etc., will know it, and they can use the company’s retained earnings to start buying up the shares heavily. When it gets unjustifiably whipped up, they can start unloading treasury shares heavily. As far as I know it’s legal for a corporation to do this, just not any of its individual officers for their personal accounts.This could do much to keep prices close to their fundamentals if the incentives are for those in control to maximize true NPV, and not just game short term incentives. But nonetheless, is this enough that it’s still better for society to let these ETFs operate without restriction, than to restrict them in some ways? Not clear to me at this point.

  • Newt almost overcame by dislike for him when he started talking about a moonbase. All the allegedly science loving Liberals jumped all over him.I join the liberals who do not see sufficient scientific justification for a government-funded moonbase in anything like the timeframe that Gingrich was talking about.

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