The Maanga

Random thoughts.

Why would anyone write this?

At least, fundamentalists have an agenda. What’s this Mishra person’s excuse?

I question that tennis boy’s grammar and avataram’s existence.

Some cities are more charming than others. Either because they happen to be Madras or, actually are.

The drive down Summit Avenue in St Paul, along the governor’s residence, is probably the most quaint thing I have ever done. Which probably says I haven’t done much else. But then.

The last Jackson Hole symposium produced some interesting papers. Foremost was the Mishkin paper that set out how the Bernanke Fed would act in the face of the financial crisis, and the Taylor paper that blamed the crisis on Greenspan keeping interest rates too low (As Soros suggests in his book, this was to get W re-elected, a suggestion conspicuous by its absence in Greenspan’s own book.)  

Mishkin’s position was the same as Greenspan’s. If it is not possible for the market players to recognize a bubble, it would be impossible for any central bank, including the Fed. So, Fed policy cannot be changed to prick asset price bubbles which may develop over a long period. However, since asset price busts can happen very swiftly and create problems in the real economy (cause a recession), the Fed must cut interest rates swiftly and provide sufficient liquidity to forestall any problems in the real economy.  

Taylor’s paper simply said that the Fed deviated from its usual interest rate setting rule in 2002-2004, keeping interest rates too low, even while the economy was improving. This is what led to the housing bubble in the first place.  

Both Taylor and Mishkin could not possibly be right. If Taylor was right, then Mishkin and Bernanke were trying to solve a problem (housing bubble) caused by low interest rates by ahem, lowering interest rates swiftly. One year later, it is evident to everyone that things haven’t quite panned out as Mishkin may have expected.  

In the current Jackson Hole meet, Willem Buiter presented the case against the central banks’ handling of the crisis, particularly that of the Fed. The paper is far too long, but quite amusing, as is Alan Blinder’s reply to it.  Focusing on the three central banks, The Fed, the ECB and the BoE, he says that while the Fed did well to contain the current crisis, it has definitely failed in preventing future crises (the same point that John Taylor made last year), and handed the wooden spoon for handling the current crisis to the BoE.  

Dave Altig ponders over the symposium in a very good summary. According to Dave, the best paper at the Symposium was presented by Anil Kashyap and Raghuram Rajan along with Jerome Stein, who proposed an insurance policy that would infuse the banking system with capital when it needs it the most (like now). Somehow, it seems a bit like closing the barn door after the horse has bolted. To his credit, apparently Rajan proposed the same thing three years ago, and was told off by “women have no brains” Larry Summers.  

I wonder why the experience of another developed country, with a recent housing boom bigger than the US, but one that benefited from prudent central banking was not considered. I guess it was, in a small footnote on page 24 in the Rajan paper.

In keeping with the recent policy of promoting upcoming musicians on this blog, here is something by Diddy.

I don’t know what Soros or Taleb had to say about equilibrium of financial systems in the 21st Century. Suggestions in this blog and elsewhere indicate, they are intuitive Utopians.

In that context, I am now fascinated by another Utopian whose idea of it was more Dystopian if social equilibrium were understood in the modern context. Francis Galton as most students of basic courses in Probability, Statistics & Random Variables know, was the first person to have come up with correlation[1], standard deviation and the concept of regression to the mean. He also made serious contributions to Eugenics, Forensic Study and is generally credited with bringing a scientific outlook to social sciences. Being rich, jobless and possibly gay must have helped. Galton though makes one long for being been born in an era when specialization did not make any and every field in which one is not an expert in, inaccessible[2].

The world would have been much more interesting had the Nazis won and their Eugenics taken forward. Maybe that would have meant, this post would not have been written[3]. Anyway, the point about randomness, especially that Leonard Mlodinow puts forward is, his premise is its own dismissal. That barely worked for this blog three years ago and thus refuses to for a book today. Otherwise, The Drunkard’s Walk is still worth a read for its sometimes funny and sometimes interesting portrayal of the history of chance. The let down in terms of promising mathematics and not delivering it must be a genre thing.

[1] — Aristotle did not.

[2] - For example, here is a status report for one.

[3] — Hence the proof.

In his essay, Gangui says that in the Divine Comedy, Dante attempts a rare synthesis of cosmology, philosophy and literature.  

Aristotle’s cosmos has a geocentric universe where the earth is surrounded by successive spheres of water, air and fire, then by the orbits of the moon, the planets and the stars. Beyond the stars is the Primum Mobile, prime mover, something that Aristotle postulated (in place of Gravitation) that caused all the planets and stars to move around the earth.  

The Christian view of the cosmos had heaven, hell and purgatory somewhere in between and was geocentric as well, as salvation was to be found on the earth.   

Dante tries to unify these frameworks. He keeps the Aristotelian framework, and places hell right below Jerusalem (he got that right). Hell has nine concentric spirals that moves out to the centre of the earth, where Lucifer lives. Placing Lucifer at the centre of the universe must have been quite a coup in the thirteenth century. Dante attempts to explain how dense land floats above water by claiming that land fled as far away from Lucifer as possible to the surface of the earth, anticipating modern plate tectonics by many centuries. Purgatory is a seven terraced hill on the opposite end of Jerusalem, Beatrice becomes Dante’s guide after Purgatory, taking him through different spheres of heaven, identifiable with the different orbits of the moon, the planets and the stars, and finally they can see the Primum Mobile, as in the illustration by Gustav Dore, which devout Dante identifies with God surrounded by his angels. The Cosmos according to Dante is complete, with Lucifer at the Centre and God at the far edge of the universe.   

While I have immense respect for Gangui, whose Ph.d adviser was Dennis Sciama (Stephen Hawking, David Deutsch and Martin Rees had the same advisor), this search for cosmic order in the middle of Dante’s randomness seems a bit unnecessary. As Nassim Taleb says, we must not be fooled by randomness in economics or finance, but should be quite happy to be fooled by it in art. A more interesting view of the Cosmos belongs to another Italian, Giordano Bruno.  

The best essays on Dante remain Borges’s “Nuevos Ensayos Dantescos”, new essays on Dante, where Borges speculates that the entire Divine Comedy is a dream, its elaborate structure designed to hide one thing: the unrequited love of Dante for Beatrice. As he says:  

“Beatrice existed infinitely for Dante. Dante very little, perhaps not at all, for Beatrice. All of us tend to forget, out of pity, out of veneration, this grievous discord which for Dante was unforgettable. Reading and rereading the vicissitudes of his illusory meeting, I think of the two lovers that Alighieri dreamed in the hurricane of the second circle and who, whether or not he understood or wanted them to be, were obscure emblems of the joy he did not attain. I think of Paolo and Francesca, forever united in their Inferno: ‘this one, who never shall be parted from me’. With appalling love, with anxiety, with admiration, with envy.”

Anil Srinivasan is the kind S Muthiah refers to — though Anil is obviously more talented than Sashi Tharoor ever will be.

Yesterday’s Madras week event was Anil Srnivasan’s commentary and rendering of Kritis and Symphonies with a Madras connection. The two aspects of the evening, though presented in a seamless manner, had two distinct flavors. Anil is an accomplished pianist and a competent consultant who sells his accomplishment quite well. He did hold the audience’s attention with some wonderful history of western music from this great city. Repeating it here would only make it sound less than what has been claimed and defeat its purpose. I encourage you to read on the first string quartet from these parts and the influence of Carnatic music on early European composers from Madras.

There was also the Kritis part, with  compositions on the two famous temples –Kapaleashwarar and Parthasarathy.

My more accomplished music lover friend tended to dismiss the history connect as forced and the music, average. Since there is a reason Muthiah made his observation, I concluded, the city needs its share of shallow people whose hyperbole will be the necessary self perpetuating myth. I do have a role to play. And I am.

As part of the Madras week events, Chandrachoodan made a short tiny presentation at the Goethe-Institut. As the topic indicates, it was more about photographs and less about lecturing. The audience were shown the several photographs photographed by several photographers who walk the walks.

Nice.

Given the generally positive opinion one has towards the person and the City, it’s rather easy to like the presentation even for an anti-photite. However, knowing that the man who is lecturing sells products for random companies, isn’t it fair to ask that he sell himself and his art with a bit more conviction? Maybe there was confusion regarding the target audience or the tone. Given the several experts in photography and in history who had assembled, maybe there was a conscious effort to not talk down or state the obvious. That though, hardly restricts building a case from the ground up. Even if there isn’t one.

Request to Chandru: Please use your blog more to involve those of us who aren’t exactly photogeeks.