WWCF: Immunity to venom or immunity to food allergies?

Which will come first?

Immunity to deadly venom (snakes, spiders, wasps, etc.)

OR

Immunity to life-threatening food allergies (peanuts, shellfish, etc.)

Since these share the root problem of anaphylaxis, an immune system response to allergen exposure, they may be solved together. I'm not sure which one is the most breathtaking in terms of a media response, but from the standpoint of fatalities, animals top food. However, both are fairly small in absolute magnitude. While cases of anaphylaxis seem to be on the rise, it is important to note this is not the low-hanging fruit of death prevention. 

Of course, it is not all about dying. Living with a food allergy as many do is life under constant threat knowing that something many people enjoy as a small part of everyday life is potentially your death sentence. And if you don't die, it is a very agonizing medical emergency. To an allergic person, hearing you've just eaten lobster-filled eggs can be as shocking and unforgettable as hearing that your baby is ugly. Similarly, most of us go through life with a primordial fear of that which hisses or buzzes. So, don't discount too steeply the long-term benefits from immunity to these problems. 

Keeping in mind that I am asking about immunity rather than developed tolerance through incremental dose therapy (i.e., not just a shrinkage of the problem), these both seem more distant especially in light of the better living through prevention (avoidance) option. I would count any sure-fire, immediate result therapy that stops anaphylaxis in its tracks as "immunity". 

My guess is that because children are most at risk with food allergies and we can kill or avoid venomous animals with increasing ease, food allergy immunity comes first. But I'll add that it will probably be 30+ years away, and I would guess it will be the serendipitous result of other research/developments. 

Flooding the sports autograph memorabilia market

This past weekend was Meet the Sooners Day for the Oklahoma Sooners football team as the kicked off the start of fall practice. I would assume that this fairly common event throughout college football shares the same rules, which attempt to keep it child-focused. Those rules specify:

Each child may be accompanied by a maximum of one adult, but adults will not be permitted to submit items for autographs.

Each child may bring ONE item to be signed - no exceptions.

These rules are designed to keep Ernie eBay from having all the start players and coaches sign 15 items all to be auctioned off to the highest bidder. This leads me to some thoughts:

1. Is the university or athletic department opposed to sports memorabilia? More specifically, opposed to a secondary market in sports memorabilia? Do they find it unhealthy, unwholesome, and this is a way to somewhat defund it? If so and setting aside the silly moralistic position, I think they are going about it the wrong way. I'll elaborate shortly but in another point because I find it unlikely this is the primary cause.
2. I do think there is some highbrowishness supporting the motives, but I generally think it is a genuine and legitimate attempt to be mindful of the players' scarce time (minimally exploitative for a change) and direct the benefits to the most deserving group (children).
3. Are the universities, athletic departments, and the NCAA missing a revenue opportunity while at the same time missing the best method to limit or control the secondary market? I think the answer here is a resounding yes. I think with two actions Meet the Sooners Day would be all about the kids without the rules needed to make it so. 
• Organize a signing by the entire roster on a limited number of sports items to be sold through the athletic department. Johnny Manziel purportedly was paid $7,500 to sign 300 mini and regular-sized helmets. These would be "authentic, originally-signed" autographed items. 
• At the same time take an electronic image of each player's signature. Use this to mass produce signed items. This essentially floods the market for signed goods taking away most of the impetus for others to duplicate these efforts.
4. Of course these business actions might be a bridge too far making it obvious that a third action would be necessary to avoid charges of exploitation--give the players the proceeds of these sales.

Update: seems the NCAA was already taking a bridge too far, http://www.cbssports.com/collegefootball/blog/dennis-dodd/23070728/ncaa-to-exit-business-of-selling-schoolrelated-online-items

The Ben Bernank ordering breakfast doesn't make him hungry, or . . .

Getting cause and effect backwards.

Often I hear investment pundits describe an effect as a cause giving them reason to be bullish or bearish on particular sectors, etc. The typical mistake runs like this: "We expect equity flows (investments into stocks) to increase driving stock prices higher." Think for half a second how one might determine the value of a stock . . . Stock is ownership in a company. That company derives value for owners by creating profits. Those profits eventually must become a series of cash flows back to the owners. If we could make a good estimate of the timing of those cash flows and apply a reasonable discount rate, we could approximate the present value of the cash flows (what they are worth in one, lump-sum price today) and hence the present value of the company.

Nowhere in that analysis is room for the thinking that if more people like the cash flows, they are worth more. True if more people like the series of cash flows, the discount rate goes down and the present value goes up. But here again we are getting it backwards. Why do people like the series of cash flows at a given price more all of a sudden? Because the discount rate used to calculate the present value now seems wrong. Therefore, the price seems low making it more attractive driving the desirability up until the price seems right again.

The girl is more attractive after the Extreme Makeover not because people are now more attracted to her. People are more attracted to her because of the makeover.

So how does this relate to The Ben Bernank and The Fed? I think many people including some economists often get it wrong in describing the cause and effect related to the economy and Fed activity. Consider this Arnold Kling post which points back to this Scott Sumner post which points back to this David Glasner post all of which got me thinking about this issue once again. And here is a money quote from another Arnold Kling post that illustrates my thinking:

Probability that monetary policy “merely reacts to what would have occurred anyway” = .75

I think I would put that probability at least that high. To explain why, I'd like to introduce a metaphor that I believe aptly illustrates the right way to think about the Fed's role in the economy as it "sets" monetary policy ("sets" is too powerful a word here; "escorts" might be better):

Think of The Federal Reserve as the regulator of a man-made lake where The Fed controls the dam and where it controls a floating dock that many boats use as a prime spot for anchoring. The lake is the money supply and the dock is both the Federal Funds Rate (the interest rate at which reserves held at The Fed are traded between banks) and the Discount Rate (the rate at which The Fed will lend money to banks to cover short-term needs). The Fed can control the outflow from the lake to help determine the water level (money supply), but this is a clumsy process. If The Fed doesn't have a good handle on what nature (the market) will bring in terms of rainfall and drought (i.e., if indicators are poor), then too much or too little water may be in the lake. Likewise, if The Fed sets the federal funds rate or the discount rate inappropriately low (high), the dock will be under water (way out of the water). In either event, boats can't use the otherwise popular dock which makes lake activity difficult.

Some want The Fed to look out on the lake with omniscient vision seeing well-planned development. In truth The Fed is simply trying to accommodate the level of water nature otherwise wants for the lake while trying to satisfy those who desire to use the lake as a resource--adding or reducing water to smooth the ups and downs. If only The Fed could ask nature what was in store for lake water levels (an NGPD futures market), it could do so much better getting the water level "correct".

Highly linkable

John Cochrane points us to a painting depicting the history of trade. We see the (symbolic) beef, but I'm left wondering where's the gold?

Noam Scheiber of The New Republic says we're about to lose another Big.

Steven Landsburg brings us another great riddle whose solution I did not reach on my own. My downfall was a knee-jerk reliance on the ubiquity of the Monty Hall Problem.

Finally, if you want some good ideas of places to go to get away from it all (including people), check out this.

photo by Mark Stevens

WWCF: Driverless cars or 3D printers in the average household?

Which will come first?

50%-household penetration for driverless cars

OR

50%-household penetration for 3D printers

News about both of these technologies of the future are in vogue right now. I've talked a bit about them here and here. The economic possibilities are quite promising. In fact, I see the factors slowing the progress of each to be more political in nature rather than technological. Regulators will be the first to cry, "Jane, stop this crazy thing!" Some of the very serious people are already sounding alarms about robot cars. Expect them to be joined soon by all those millions, and don't doubt for a second that it is indeed millions, of people whose livelihoods are threatened by a driverless future. For 3D printers the fears begin with guns and end with patent infringement run amok. Nevermind the fact that I've already solved the patent problem, et al. 

But back to the question at hand. While the Makerbot is selling like hotcakes, John Deere is already selling a driverless lawnmower. I say the driverless car edges out the 3D printer by less than five years, and I expect the 50% mark to be hit by the winner before 2033.

PS. With driverless cars you effectively don't need compulsory insurance or state licensing just as you don't have those conditions for guns, chainsaws, swimming pools, or outdoor grills. Good luck with that logic, though.

And how many words have I got to say?

Every day tens of millions of people now have an astonishing and remarkable ability to make use of the answer to that question in the subject line. We now have tools and venues that give our thoughts, ideas, and opinions voice in ways that were physical if not theoretical impossibilities for the past 99% of human history. Here are some thoughts on how the Internet and the devices that connect to it give us "voice":

• There seems to be some emerging norms regarding which way certain social networks are to be used. But there is a lot of variation with significant dispersion. Serious versus light-hearted is one dimension. Professional versus personal is another.
• Facebook seems naturally more personal in nature since one speaks only to one's "friends" or a subset of friends in nearly all cases. So it always surprises me how some use it for more serious topics or for advancement of political or ideological positions. For me it just seems more social in nature; so I find it hard to take too seriously given the alternatives.
• Twitter on the other hand is a voice to the world (potentially) with no audience filter per se except the bounds which one's own reach has set. Seems like we'd be as nervous tweeting as we would be speaking at the Oscars, but reasonably we are not. Since we don't expect people from outside our intended audience to hear our tweets, we don't have the apprehension. 
• Google+ seems to be still seeking its definition in this dimension. I see it more naturally as a place of both personal and professional self promotion as well as recommendation. In that sense I think it competes eventually with LinkedIn, and the case for Google+ will be very strong with the more natural crossover to mini-blogging.
• Isn't it always interesting if not awkward when someone seems to use one of the above out of tune with the "local", that is group-specific, norm?
• We are now audiences of individuals. Our group action is both more powerful than in the past but less prone to peer pressure. Many would disagree with this point, but it seems strong to me. Failure to conform in the audiences of the past (theaters, church pews, dinner parties, et al.) met strong and effective opposition. Switch cost in terms of behavior is now much lower. At the same time the ability of even a small group to mount counter voice is quite high--the thrust of this post is about this very point. 
• The noise versus signal aspect is interesting. Bloggers tend to face a more pure market test. These other social networks have audience stickiness that insulates the speaker. Are you really going to defriend Grandma because she keeps posting Great Depression-era recipes? Noise versus signal is context dependent. It is subjective to the individual audience member. While every social network has some logic helping to mute noise and boost signal, all are highly imperfect. The next great advancement in social networking may be a mastery of this domain. 
• Here is a great example of how the Internet is revolutionary greatness offering to give us all a voice never before so vocal and therefore offering us all experiences never before so dreamed: What Ali Wore.

We live in amazing times. 

The first of Which Will Come First?

I am introducing a new theme on the blog: Which Will Come First (WWCF)? This could alternatively be called "Can you believe people used to? . . .", but I wanted to make it more predictive with a comparison. Here is the first in the series.

WWCF:

Self-cleaning, style-programmable clothing

OR

Fractional jet ownership for the middle class

The first negates the need to haul a sufficient portion of one's wardrobe around when travelling. The second is NetJets for the hoi polloi, a democratization of high-end air travel, which potentially ends most of the hassle costs of flying commercially. 

Thinking back to Mark Perry's post, which was the inspiration for this post of mine, we see that the real cost of air travel per passenger mile has fallen from about $.31 in 1980 to about $.14 today. 

The cost of a G5 per passenger mile is about $1.67. Using the decline rate in the curve above (about a 2.5% reduction in cost per year), we would very simply extrapolate that I'll be in a G5 in about 90 years--when the $1.67 cost has decline in real terms to $.14. But that is probably a big oversimplification that understates the realistic decline expectations. It is leaving out income growth (not me personally, but for the middle class) and increasing returns to scale as we get closer and closer to the destination.

Let's assume real disposable income growth is below the historic trend and is 2.5% per year. Now Malcolm in the Middle is circling Fantasy Island in less than 50 years. And we have still not considered how as a new innovation becomes closer to reality the cost curve spirals downward spurred by a virtuous cycle of investment and breakthroughs. Just think about the Walkman for 20 years followed by the iPod for 10. 

Unfortunately, I don't have anything substantive on high-tech clothes. I'll add it here and in a follow-up post when I stumble upon it.

My guess is that the clothing will be widely used about a decade before fractional-jet-ownership will commonly used by the middle class.