Thursday, September 27, 2012

It is official . . .

After thousands of hours, hundreds of practice problems, three exams, and some dues paid, I am now officially a holder of the Chartered Financial Analyst®, CFA, designation. Click the insignia below for more information on the CFA Institute.

CFA Institute

Monday, September 24, 2012

Thoughts on the OU loss

It is unfortunate but fitting that my first blog post about the OU Sooners would be on the heals of defeat. As I hope to explain in a later post, it is the rare events that receive our attention and thoughts whether warranted or not. Here are some brief thoughts on Sooners football.

Landry Jones is not an NFL quarterback. In fact, he is not truly good enough to be OU's multiyear starting quarterback. Unfortunately, it has taken until his senior season (fifth-year senior at that) for us to discover that fact. Well, there was reason to believe that was the case often times last year, but in truth and in the defense of the coaches paid handsomely to make these determinations it is a loose, vague, and indeterminant type of decision. There is nothing very cut and dried about it. Only after the fact do we even have a chance of seeing the error or virtue of our prior decisions in these matters. And it is not as if there were a lot of alternatives. The only option that seems likely to have been true is an alteration in the offense the past couple of seasons especially the fuller integration of Blake Bell into the fold. More on that below.

In the Stoops era the following quarterbacks have proven to be worthy of unconditional starter status:

  • Josh Heupel
  • Jason White
  • Sam Bradford
In that era these quarterbacks proved to be worthy of solid backup status:
  • Nate Hybl
  • Paul Thompson
  • Landry Jones
Any others didn't have enough time at the helm for a proper decision to be made. And a change in a few circumstances might move any of the above from one list to the other. 

It is with careful consideration that I place Landry on the second list. He certainly had his shot at the first. Many times he made a case for being on it. But I believe the entirety of the evidence rightfully places him on the lower level. He is making more critical mistakes as a senior than Bradford made as a sophomore. Which leads to my evaluation that he is not an NFL-level quarterback. By that I mean a serious contender to play an extended role (>1 season) in the position. 

Landry has the following shortcomings:
  1. He exhibits poor decision making.
  2. He cannot reliably hit the deep pass.
  3. He does not handle pocket pressure well.
My prediction is he goes in the late second to early fourth round in the draft and is out of the league within 2 years. I certainly don't wish him ill. I very much admire what he has accomplished--holder of numerous, significant OU records, which says a lot about how close he has been from being elite. I believe he is a good person of strong character and a great athlete. The difference between very good and great is sometimes a lot of little things that add up.

One corollary thought is how the success of the starting quarterback has affected the coaching staff and in particular the offensive coordinator position. The prior OU offensive coordinators, Leach, Mangino, Long, and Wilson probably were overly esteemed, recognized, and rewarded as a result of terrific quarterback play. Heupel, the current coordinator, is probably underappreciated at this point for the same reasoning. 

Back to Blake Bell. How could he be better utilized? As a fan, I viewed Landry's return for his senior season postponning the NFL draft as potentially a very good thing (best of both world's with an experienced QB plus an opportunity to bring Blake Bell along slowly for maximum play in 2013) or a very bad thing (a disappointing 2012 season and a poorer 2013 as Blake Bell would be much less prepared, some might say squandered). I fear we are well into the latter. What I'd like to see is Bell now incorporated into the offense much, much more. That would give us the chance to move back toward the optimistic senario. Alas, the notable stubborness of company Stoops, a trait that serves him well in much decision making, and the general reluctance of coaches to take proper risks when the risk is perceived as unorthodox stands in the way. 

Tuesday, September 18, 2012

The revolution from within

For the most powerful empires, revolution resulting in substantial and lasting change usually must come from within. I believe the NCAA has already begun collapsing under the weight of its own injustice and inconsistencies. This report by ESPN's Tom Farrey  reveals much about how troubled some of those within the upper ranks of the NCAA cartel are by the illogical house of cards that is the student-athlete to institution relationship.

Here are some choice passages:
"This whole area of name and likeness and the NCAA is a disaster leading to catastrophe as far as I can tell," wrote [University of Nebraska chancellor Harvey] Perlman, a former member of the NCAA Board of Directors and law professor specializing in intellectual property. "I'm still trying to figure out by what authority the NCAA licenses these rights to the game makers and others. I looked at what our student athletes sign by way of waiver and it doesn't come close."
 A stalwart of the NCAA's economic model that redistributes money from revenue sports to other parts of the athletic department and university, Renfro [, NCAA senior policy advisor who has worked at the NCAA since the 1970s,] proposed a re-focusing of sports on the educational mission of universities. At the same time, he conceded that the philosophy underpinning the model has become antiquated -- and even posed whether the time has come to allow athletes to hire agents.
I was amazed by some of the counter "arguments" made by others within the cartel. Go read the whole thing.

Tuesday, September 11, 2012

You should be watching...

Seinfeld's new show, "Comedians in Cars Getting Coffee".

TEAnocratic Nonsense or Let's Ban Bans

Economist Barry Nalebuff has always been an insightful, out-of-the-box thinker. I've long admired his work.

So it is with great disappointment that I read this.

Nalebuff wants to rewrite New York City Mayor Michael Bloomberg's proposed regulation that bans beverages in NYC from being sold in sizes greater than 16 ounces. If "rewrite" meant "erase completely and never bring up again in the Land of the Free", then I'd be on board. But Nalebuff instead wants to reconfigure the regulation to be smarter. Apparently, the dumbness of the regulation only occurred to him once he realized his former beverage company's products were out of compliance. He does make a case for one kind of smarter regulation. But that is far short of sufficient to justify such a blatant violation of free choice with both its benefits in principal and practicality.

Very disappointing to see yet another good thinker turned into a technocrat. He fails to realize that his preference shouldn't necessarily be everyone else's preference and that government regulation's effectiveness along one dimension (in this case potentially a more effective health rule in one health dimension) comes at the expense of less effectiveness in most other dimensions (in this case certainly less effective consumer utility). Or perhaps as a professor of economics he rejects revealed preferences—a foundational tenet of economics.

Friday, September 7, 2012

Me as Fed Chairman

Following the advice of David Owen, author of The First National Bank of Dad, as heard here on EconTalk, I created a savings account for my nine-year-old daughter to help her understand the value of savings and the power of compound interest. Complete with spreadsheet and graphs, she can watch her money grows at 5% per month while invested with me. We are just a couple of weeks in. So far, so good. She seems interested and is getting the concept. Her track record was good to begin with having just saved up enough to purchase her own iPad.

This post by Scott Sumner got me thinking about my little experiment in financial education. Let’s assume that there is no trade done with the world outside of our household—we are purely self-sufficient. But instead of being ludicrously poor as we actually would be, let’s assume all the goods and services we currently have access to are of our own making. Let’s further suppose that in our little household economy we begin to fall below trend in aggregate demand and a gap opens between potential and actual GDP. I as Fed chairman now feel compelled to deliver a boost to our household economy. I need to get my daughter spending her money. Question: what is the most effective way for me to do so?

I could of course tinker with the interest-rate being paid to her on savings. We are very far from the zero-rate boundary; thus, fears of a liquidity trap are not relevant. But I suspect that interest-rate adjustments downward would have little effect on her spending decisions. Here is an alternative: I can buy her stuff. I start with some of her less appreciated toys and clothes and eventually, if necessary, move up towards American Girl dolls and the iPad. As she realizes money balances far in excess of what she desires, the spending will commence and in force, I can assure you.

This is not a perfect analogy namely because we are talking about physical/use assets rather than financial assets. But I believe it captures the point that interest-rate targeting and manipulations are not the most direct and effective monetary policy to achieve what is actually desired.

PS. In a later post I will expound upon my theory as to the factors that caused this past recession and current recovery to be so difficult, deep and slow. Hint: I don’t believe it is all about AD.

Progressives and the new NCAA helmet rule

Progressives believe that if you get the right people in place, government can solve problems. I believe their claim is that the problems would be solved in a net beneficial total outcome sense. The “right” people designing policy are a combination of well-intended, highly intelligent, and expert in the particular field for which they guide policy. Here is an example showing just how weak this philosophy can be. It is a beautiful example of the law of unintended consequences.

The NCAA fits the “right people” bill near perfectly in this case. And what do you want to bet that the solution will not be to reverse the rule but rather to institute a new array of rules designed to counteract the undesirable side effects?