How Debt Ruins Systems–Nick Gillespie Interviews Nassim Taleb Over at Reason

Over at Reason Nick Gillespie interviews (video and transcript) best-selling author Nassim Nicholas Taleb, a  former trader and hedge fund manager, and a groundbreaking theorist on risk and resilience. He is also a finance professor at New York University and a research scholar at Oxford. He has some great insights about why systems fail and why decentralized systems are more resilient than centralized systems. An excerpt from the transcript:

Taleb: To cite the great Yogi Berra, a good antifragile system is a system in which all mistakes are good mistakes. And the bad system is one, again to paraphrase Yogi Berra, where you tend to make the wrong mistakes. Let’s compare the banking system to, say, transportation. Every plane crash makes the next plane crash less likely and our transportation safer. Now, with the banking system, [a failure] leads to increased probability of failure of an entire system. That’s a bad system.

reason: What’s the best way to stop that so you’re not allowing the problem to replicate throughout the system?

Taleb: What fragilizes an overall system? Three things: One, centralization. Decentralization spreads mistakes, makes smaller mistakes. Decentralization is where we converge with libertarians. A second one is low debt. The third is skin in the game.

I’ve just acquired The Black Swan and will most likely buy Antifragile when I finish with that. Links to the books below.  I highly recommend reading the interview transcript (or watch the video, 56 minutes. Your choice but I can read faster). Links to the books below.

 

             

World Currency Markets Ruled by a Kabal of Kitties

Author Claire Berlinski, whose excellent book, "There Is No Alternative: Why Margaret Thatcher Matters" I am in the midst of reading, is guest-blogging over at Power Line where she makes this rather stunning admission:

"I'm that journalist who lives in Istanbul with seven cats and secretly manipulates the world's currency markets from her basement, also known as the Alexander Haig of Ricochet."

Does anyone else realize what this means? As anyone who has ever owned a cat knows, you don't own the cat, you are its staff and it owns and manipulates you.  This can only mean one thing. The world's currency markets are not being manipulated by Claire, as she thinks (they just allow her to think that), but by a cabal of tabbys. Claire merely carries out their wishes.  The world makes a lot more sense once you understand this fact.

I wonder if I sent them some catnip or kitty treats would they do something about my 401(k).

Just asking.

Book Review - Why We Get Fat and What to Do About It by Gary Taube

I just bought Gary Taubes' book, "Why We Get Fat and What to Do About It." The central thesis of the book is that we get fat not because we eat too much and exercise too little but that we are consuming far too many refined carbohydrates. The cure, he says, is to eat a high fat diet, at least 3:1 fat to protein and not overdo the exercise. There are alot of diet books out there that give similar advice, South Beach, Atkins, etc., but Taube manages to pull all this together in one fairly short and readable book that argues his case very effectively. This advice tracks to my own experience.

I am 51 years old and 5'11" tall. At this time last year I weighed somewhere between 180 and 185 pounds (depending on whose scale I was standing on). I didn't think of myself as especially heavy but my weight had gradually crept up over the years, even though I am physically active. Last year my doctor told me I had developed type 2 diabetes. I have no family history of it and I don't even like sweets, which doesn't seem just somehow. But who said life is fair? 

Pre-diagnosis I went to the gym 3 times a week spending 2 hours at a time. That included spending an hour on an elliptical machine with the goal of 900 calories and 60 minutes. That is, if I made it to 900 calories in 58 minutes, I'd keep going to 60 or if I was a bit short on calorie burn at 60 minutes I'd keep going until I got there. I didn't overeat at all, I've never been a big eater and yet the weight kept creeping up.

I have a strong aversion to taking medications of any kind so I asked the doctor what I could do to avoid it. He told me to avoid pasta, potatoes, white rice and bread, essentially the same advice Taube gives. So I did that.

Now I eat meat/chicken (skin on)/fish, butter, eggs, bacon, cheese and all the green vegetables I want. I don't even worry about fat, except to make sure I am getting a good balance of Omega 3 to Omega 6. I still go to the gym 3 times a week but ony 1 hour each time and have changed the routine. I spend an hour lifting weights (to build lean muscle mass which burns fat) on two of those days and I take a yoga class on the third day for strength, balance and flexibility.

The result of the changes to my diet and exercise routine were that I lost 35+ pounds in less than 6 months and am back to the weight I was in my early 30's and have stabilized around 145-147 pounds. My blood glucose is regularly in the high 70's to high 90's range now (normal is 65-99) and my A1C is down to 5.8 or almost back to the normal range. My cholesterol is normal with an HDL (the good kind) of around 70. And note, the weight loss is with half the time spent at the gym every week compared to before. Finding the two hours to spend three times a week before was quite a challenge.

Fat is the body's preferred fuel. If you deprive the body of fat that little reptilian part of your brain will start thinking "famine" and start slowing your metabolism and signalling your cells to store fat. Refined carbs are the most easily converted so the more of that you consume the fatter you will get. Eventually the cells are going to say no more and that is where the insulin resistance and type 2 diabetes begins.

Obviously I didn't have the benefit of the Taubes book a year ago but previous readings did help me figure out the diet and exercise routine necessary to reach my goals. Three books I can recommend in particular are "Real Food: What to Eat and Why" by Nina Planck. I think highly enough of it that I've given away probably a dozen copies to family, friends and even my doctor. One of her source material books was "The Schwarzbein Principle" by Diana Schwarzbein MD, an endocrinologist. If you read nothing more than the introduction to her book you'll learn alot (and it's a Look Inside book at Amazon, so you can). Lastly, I got the exercise part figured out by reading "Fit for Combat : When Fitness is a Matter of Life or Death" by JD Johannes, a combat filmmaker and retired (there's no such thing as ex!) Marine. I am not as extreme as he is but he got me pointed in the right direction. There are other books too numerous to list but these are all very readable and the ones I credit most with helping me get on track.

      

Book Recommendation - The Politically Incorrect Guide to Socialism

I just acquired and am about halfway through a book by National Review's Kevin D. Williamson. It is called "The Politcally Incorrect Guide to Socialism."  So far the book is an excellent accounting of the origins and history of the Socialist movement and shows how much Socialism has crept into our own country's structure and institutions. One example is our system of public education. The book also shows how Socialism's record on nearly anything is worse than any capitalistic endeavor, for example the environment. Some of the greatest environmental catastrophes of all time have taken place under socialist regimes and they weren't all accidents but by design. One  such is the Aral Sea which was formerly one of the largest lakes in the world with thriving fisheries, commerce and communities economically dependent on it. Now it is largley dried up and has now become three separate bodies of largley toxic water. How did this happen? The Soviets diverted the rivers that fed it to irrigate their massive collective farms without any regard to the effect on the lake or the people who depended onit for their livelihoods. That is but one example.

The book is far from a dry read considering the subject matter. It is actually difficult to put down and I usually only find that to be true about really good novels. So, if you would like to become a bit more educated about Socialism, this book is an excellent choice to achive that end.