Any business or organization that depends on the charity of others is vulnerable to that charity being withdrawn.

The U.S. debt outstanding is just under $12 Trillion dollars.

Political economy is the study of the macro functional outcome of how our species organizes itself in its various groupings. It is easy in the CNBC whizbang world to get caught up in bombastic posturing and the banalities of some host with a suit and an opinion trying to get you to watch for just one extra 30 second ad.

Economics is more than a clownesque Cramer who fails an economic and entertainment litmus test. Thank god CNBC's ratings are dwindling as America looks to re-invent itself with the next quick buck plan and inflates the next bubble with accompanying amplifying digital hope halo.

Sam Savage's latest offering Flaw of Averages is a useful book and set of thought tools he calls mindles. If you have a PhD in statistics or mathematics, your job or role rarely begins and ends with you. Often your models will need to be explained to people. More importantly, the places where the models could or would go wrong need to get explained.

The Flaw of Averages provides a great read and introduction to basic concepts in probability and real life situations where things behave in unintended ways, such as the hidden stories in the "average".

I am looking at taking a role as a prop trader/PM with RCG (Rosenthal Collins Group) in Chicago. They do a bit of yield curve trading among other things, so I thought maybe I could liven the data up a bit. (Click all images to enlarge)

The typical yield curve looks boring and doesn't show relationships over time or the whole yield matrix.
Being interested in getting a feel for the data means understanding all the US swaps spreads. So I put them into excel and created a nice scrollable matrix.

But hey even that isn't fun and discovering anomalies in data (which is fun for me) means getting a feel for the relationships. So I ended up with something like this video.

I finished The Fundamental Index by Robert Arnott, Jason C. Hsu & John M. West a few months ago. It is a useful read even if one doesn't agree with the thesis about fundamental indexing. There are interesting points to be made about many aspects of equity behaviors and the profiles that make up the concept of equity returns and risk.

I offer the following chart as an interesting example of the outcome of mutual fund returns for the average investor.

Good taste in things is a rarity. Good taste in management is even rarer still. Outright stealing, yet another. If a management team offers to take a shareholder's $1 in cash and give them $0.70 in return, is that a breach in fiduciary responsibility? Perhaps not, but it is poor form in my books.

If I took 30% of something that belonged to you that would be wrong. Here is a helpful child's primer.

This weekend is the Berkshire Hathaway (BRK.A) annual meeting. As a native Iowan, I always like to see lads from the Midwest do well by doing right.

So in the Swiftian tradition, I offer the following business proposal.

The new opensecrets.org site is out and it is fun. You can see which industries and participants contribute politically and to whom. So the question these days is where to get a good return on your money, or more importantly, the return of your money.

Here are the contributions of a handful of banks in the 2008 political cycle.

Does this pay? I constructed a Naive index of equally weighted banks and investment banks and compared it with a political contribution weighted index starting in Jan 1 2007.

The original Black Swan story was interesting because it correctly used an ecological model and behavioral shift to show a "surprise", ie. the discovery of a Black Swan. The ecology was the new environments which allowed for the discovery of the black swan and the behavioral shift was the exponential rate of increase in exploration of those new ecologies. The swan metaphor is more apt than first appears.

Europeans had only seen white swans up until the 18th Century and could have created a White Swan Swap, if they possessed our contemporary financial nous.