Re: Read a combative Welshman

1

Isn't this just a (presumably) better-informed-in-reality version of Freakonomics?


Posted by: teofilo | Link to this comment | 12-18-14 11:23 PM
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2

So is this the final part of that much anticipated Freakonomics review? Or was that actually completed?


Posted by: fake accent | Link to this comment | 12-18-14 11:26 PM
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Oh man I forgot about the review. I don't think it was ever completed but I hope it's going to be an appendix or something.


Posted by: nosflow | Link to this comment | 12-18-14 11:28 PM
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Of course, loosely interpreted, loan sharks do own the whole world. Even narrowly interpreted, it doesn't seem like a difficult or unintuitive question to answer - if they're objectively excessively high (relative to credit risk and operational/funding costs), the only people who will take them out are people who have no alternative, which is a relatively small number. So it will be niche (and deeply unpleasant) business.

For subjectively excessive rates, you can argue that rates should be capped at a much lower, more broadly attractive rate, to limit the risk of debt spirals or other social ills.


Posted by: Ginger Yellow | Link to this comment | 12-19-14 2:31 AM
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Isn't this just a (presumably) better-informed-in-reality version of Freakonomics?

I suspect not, in fact, if only because D^2 is not at heart a tiresome libertarian. Also, he can write. But you're probably right about the better informed bit.


Posted by: chris y | Link to this comment | 12-19-14 3:40 AM
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6

Shall we have a reading group?


Posted by: chris y | Link to this comment | 12-19-14 3:41 AM
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7

"If loan sharks like money so much, why don't they marry it?"


Posted by: Spike | Link to this comment | 12-19-14 4:43 AM
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8

I'm going to predict without looking at the link that the argument is that loan-sharking is risky, and the higher returns are a risk premium.


Posted by: Walt Someguy | Link to this comment | 12-19-14 5:19 AM
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9

7: Like they did in the Yap Islands.


Posted by: Moby Hick | Link to this comment | 12-19-14 5:34 AM
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10

Hey, good for dsquared. The summary isn't very good, but it's just good enough to make me think the book is probably interesting.


Posted by: ogged | Link to this comment | 12-19-14 6:31 AM
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11

Have you ever wondered why there are so few brands of whisky...

I feel like there must be something strange going on with that question.


Posted by: MHPH | Link to this comment | 12-19-14 6:42 AM
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I'll put in a small word (perhaps "ewe" or "of") for John Lanchester's recently-published How to Speak Money: I rolled my capitalist-running-dog eyes a few times when he got a little cardboard-shoes-the-NHS-and-Harold-Wilson, but it is amusing and informative overall.


Posted by: Flippanter | Link to this comment | 12-19-14 6:45 AM
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12 comments and already someone is pimping a competitor. It's a faithless place, this place.


Posted by: ogged | Link to this comment | 12-19-14 6:49 AM
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8 - I don't think so - Davies tends to be chary of the risk premium explanation (in fact I have a vague memory he dislikes it but that might just be my dislike of it projected onto him). Think his explanation is that there are fixed costs to loans & therefore when annualised they look shocking.


Posted by: Keir | Link to this comment | 12-19-14 6:49 AM
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The business model of loan sharking (speaking narrowly) doesn't really scale up well.


Posted by: Moby Hick | Link to this comment | 12-19-14 7:01 AM
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If we aren't speaking narrowly, lenders in general that get too powerful risk what I'm going to call the Philip IV of France Plan.


Posted by: Moby Hick | Link to this comment | 12-19-14 7:03 AM
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6: No, we can't. Someone might say something that would hurt his feelings.


Posted by: peep | Link to this comment | 12-19-14 7:18 AM
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Think his explanation is that there are fixed costs to loans & therefore when annualised they look shocking.

That's certainly the argument he's come out with in the past - that there are certain admin costs that are fixed regardless of whether you're arranging a £10,000 loan to be repaid over five years or a £100 loan to be repaid over a month, and those translate into a high APR when you give them in APR terms.
The same problem applies to microfinance, incidentally.


Posted by: ajay | Link to this comment | 12-19-14 7:56 AM
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Well congrats to dsquared and I'm looking forward to reading it. (Also, 2 wins the thread, but yes, I think he did complete it).


Posted by: Barry Freed | Link to this comment | 12-19-14 7:59 AM
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20

[In the correct thread this time . . .]

From the link: "Why does it cost less to install a lift than to move a piano?"

Could one of the British commenters explain this for the Merkins? A lift is an elevator, right? Do you guys have really affordable elevators? Or do all your piano movers live in luxury?


Posted by: MAE | Link to this comment | 12-19-14 8:00 AM
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The British piano weights 57 tons and secretes an airborne toxin when moved.


Posted by: Moby Hick | Link to this comment | 12-19-14 8:02 AM
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Could one of the British commenters explain this for the Merkins?

I'm not British but I can tell you that any attentive observer will note that fashion seems to run in cycles. First you have your regular bikini wax, then your Brazilian and by the time the you've gotten to the full-blown Hollywood the pendulum is ready to swing back; hence, merkins.


Posted by: Barry Freed | Link to this comment | 12-19-14 8:05 AM
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20: Moving a piano is, indeed, hella expensive, but elevators cost $10,000 a floor, so even the least functional possible elevator costs more than a piano move.


Posted by: JRoth | Link to this comment | 12-19-14 8:05 AM
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24

To be fair, he doesn't say where you're moving the piano to. It could be the south pole, or Mir.


Posted by: MHPH | Link to this comment | 12-19-14 8:10 AM
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25

According to some random guy*, the parking garage on Murray just past Forward can only use the ground floor** for parking because they cannot repair the elevator except at a cost higher than they could gain by allowing parking upstairs and they can't charge for parking without some kind of way for people with a disability to use the space. The whole thing didn't make a lot of sense to me. I want to convert it into condos, like a decent neoliberal.

* He was some kind of artist. He had a bunch of other artists had studio space up in what would have been parking.

** Ground level from the back. Ground level from the front is retail.


Posted by: Moby Hick | Link to this comment | 12-19-14 8:18 AM
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But neither is the location of the elevator specified. Inside an active volcano? Or carbon-nanotube-fiber space elevator to a satellite in geosynchronous orbit?

Obviously, the solution to the puzzle is to build an elevator between the current location of the piano and its destination, and then to put the piano in the elevator. Savings!


Posted by: MAE | Link to this comment | 12-19-14 8:20 AM
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Pianos don't fit in elevators. Which is probably why moving them is so expensive. They're often moved by crane, no?


Posted by: Ginger Yellow | Link to this comment | 12-19-14 8:23 AM
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Upright pianos fit in elevators.


Posted by: Moby Hick | Link to this comment | 12-19-14 8:24 AM
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25: Huh. ISTM that it should be possible to designate a whole bunch of ground floor spaces as handicapped and put up signage indicating that the upper levels are not wheelchair-accessible, and call it a day. OTOH, that building code isn't really designed for that sort of pragmatism. And the fact that there's an elevator in place means that you don't get anywhere with arguments about how you don't have one now, so why should you need one?


Posted by: JRoth | Link to this comment | 12-19-14 8:25 AM
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Still, great big windows and high ceilings. Should be condos.


Posted by: Moby Hick | Link to this comment | 12-19-14 8:26 AM
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If we're talking $20,000-plus figures for moving the piano, why not just hire someone to build the piano inside your house instead of moving an already built one somewhere?


Posted by: MHPH | Link to this comment | 12-19-14 8:28 AM
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32

I think 2 and 7 are, in fact, currently ducking it out for winner of the thread.


Posted by: alameida | Link to this comment | 12-19-14 8:35 AM
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33

No, we can't. Someone Megan might say something that would hurt his feelings.


Posted by: knecht ruprecht | Link to this comment | 12-19-14 8:42 AM
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34

I know, MEGAN IS SO OPINIONATED.


Posted by: JP Stormcrow | Link to this comment | 12-19-14 8:49 AM
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35

YOU'RE THINKING OF ME.


Posted by: GRANDMA | Link to this comment | 12-19-14 8:51 AM
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36

Regardless of the cogency of the lift/piano piece, I'm puzzled why it's number two in the marketing material, considering how few people are or might expect to be in the position of commissioning either job. Maybe it's that renovation is more the norm than new construction on KCI and so gets chinwagged about more.


Posted by: Minivet | Link to this comment | 12-19-14 9:01 AM
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cannot repair the elevator except at a cost higher than they could gain by allowing parking upstairs

So, the access for people with disabilities isn't really part of it. It just isn't worth it to fix the elevator.


Posted by: md 20/400 | Link to this comment | 12-19-14 9:11 AM
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As I said, I found the ADA stuff suspiciously vague. But what I was told was that it wasn't worth it to fix the elevator and that without fixing the elevator they weren't allowed to lease the parking spaces that people with disabilities could not access without the elevator. The space is accessible by stair and a ramp for automobiles.


Posted by: Moby Hick | Link to this comment | 12-19-14 9:15 AM
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ISTM that it should be possible to designate a whole bunch of ground floor spaces as handicapped and put up signage indicating that the upper levels are not wheelchair-accessible, and call it a day

Yeah, you can put all the accessible spaces together closest to an exit. Unless there are too few spaces on the ground floor to meet the requirements.

Still, the numerical requirements are a floor and doesn't necessarily satisfy ADA requirements. But the age of the building comes into play here too.


Posted by: md 20/400 | Link to this comment | 12-19-14 9:15 AM
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40

(Also, 2 wins the thread, but yes, I think he did complete it).

Link or it didn't happen!


Posted by: nosflow | Link to this comment | 12-19-14 10:08 AM
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11: I wonder if the whisky thing is related to this bit from his explanation of the economics of Canto 45: "why does a 15-year old bottle of Scotch cost more than a 10-year old? Partly supply and demand, but partly because a 15-year old bottle costs more to produce, to the tune of five years' interest on the money you could have got by selling the 10-year old bottle. I've got an article ready to write about the "Malt Whisky Yield Curve", but I need to crunch some data before doing it."


Posted by: nosflow | Link to this comment | 12-19-14 10:09 AM
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The weird thing is that unlike wine aging has fairly little to do with the quality of single malt Scotch. It's largely a marketing gimmick.


Posted by: Tim "Ripper" Owens | Link to this comment | 12-19-14 10:12 AM
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cannot repair the elevator except at a cost higher than they could gain by allowing parking upstairs

This doesn't make any sense. Elevator repair is not very expensive.


Posted by: urple | Link to this comment | 12-19-14 10:19 AM
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44

I would assume the cost depends on what needs to be repaired. This was a building that has to be more than 100 years old.


Posted by: Moby Hick | Link to this comment | 12-19-14 10:21 AM
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45

That seems like a relatively small factor, I mean, when measured against the cost of aging whiskey for (at a minimum) five more years in warehouses, the increased loss due to evaporation, the fact that not all barrels are going to make it fifteen years and still taste good* (so there's a serious winnowing down), the fact that blending consistently to get a reliable product** gets harder and harder the more limited your options, and the fact that there are just some basic sweet spots for aging spirits (It's not a coincidence that you also tend to see the same ages showing up over and over - though depending on the kind of whiskey it'll be different ones. Aging things in northern/coastal Scotland takes longer than aging them in hot, humid Kentucky, for example.)

*Pappy Van Winkle is famous among bourbons not just because it's very, very good but because it's very, very old. Almost any other bourbon at fifteen years old would be nearly undrinkable, let alone twenty-three.
**10 year, 15 year, etc. in single malt scotch is just the age of the youngest scotch they put in the bottle when blending it.


Posted by: MHPH | Link to this comment | 12-19-14 10:21 AM
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46

Pappy Van Winkle doesn't make its own bourbon, also. It just chooses among other distillers' stuff.


Posted by: nosflow | Link to this comment | 12-19-14 10:23 AM
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47

42: Of all the people who should be mystified by artificially created scarcity as a means of increasing profit, you aren't one of them.


Posted by: Moby Hick | Link to this comment | 12-19-14 10:24 AM
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48

44: there is no possible elevator repair that wouldn't be fully paid back with the proceeds of less than a single calendar quarter's revenue from parking cars on the upper floors. A bank would be very happy to lend the money if you don't have the cash laying around.


Posted by: urple | Link to this comment | 12-19-14 10:26 AM
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49

Pianos don't fit in elevators

Even (many/most) grand pianos fit in (many/most) elevators, unless you're talking about a Steinway model D or a Fazioli F308, in which cases even thinking about the cost is just crass.


Posted by: Jesus McQueen | Link to this comment | 12-19-14 10:32 AM
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48: I'm guessing that "repair" in this case means something more like "reconstruct elevator shaft, install new mechanics and cab."

Also, in this location, I'm not sure you could get more than $5/day for parking. Although, even so, you may be right that a year's revenues would roughly equal even a complete elevator reconstruction project.


Posted by: JRoth | Link to this comment | 12-19-14 10:33 AM
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My father's mother's piano, still owned by my father, wouldn't fit in most elevators I've personally travelled in (possibly not in any). Sudden fears of crassness!


Posted by: nosflow | Link to this comment | 12-19-14 10:34 AM
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What if they needed to replace the entire elevator and the revenue was only $21,900/quarter. That is, $8/day for 30 spaces. It isn't a very big garage and it isn't in the kind of place where you can charge much for parking.


Posted by: Moby Hick | Link to this comment | 12-19-14 10:34 AM
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46: The original old stuff was the last of the PVW-distilled bourbon. Everything newer is as you say.


Posted by: JRoth | Link to this comment | 12-19-14 10:35 AM
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47 -- oh, of course. I was just skeptical that the price difference is in any meaningful way driven by either the pure supply/demand curve or the extra costs of storing a bottle, it's mostly artificially marking up a (not much better if at all) product that can be marketed as a prestige purchase for extra super profit. The whole point of buying the 30 year or 20 year is to pay a lot more for it.


Posted by: Tim "Ripper" Owens | Link to this comment | 12-19-14 10:35 AM
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Steinway model D

At parties I tell people that we have a Steinway model A, just to show that we're better.


Posted by: JRoth | Link to this comment | 12-19-14 10:35 AM
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56

30 spaces is not a parking garage.


Posted by: urple | Link to this comment | 12-19-14 10:37 AM
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57

I think at this point it's almost entirely Buffalo Trace (who more or less owns it) whiskeys in the Pappy van Winkle, with some rapidly depleting old stock from whichever company made it before. But that's not actually that abnormal with bourbon or rye - the mash bills are pretty standardized and the quicker aging cuts down on the effects of the surroundings (unlike with Scotch). So the post-distilling processes are what make most of them interesting or unique, and also why only a few companies are responsible for a massive number of (genuinely) different bourbons.


Posted by: MHPH | Link to this comment | 12-19-14 10:38 AM
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51: Don't the legs come off?


Posted by: Jesus McQueen | Link to this comment | 12-19-14 10:38 AM
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56: There's more spaces on the ground floor.


Posted by: Moby Hick | Link to this comment | 12-19-14 10:42 AM
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58: I have no idea. I've never had to move it.


Posted by: nosflow | Link to this comment | 12-19-14 10:42 AM
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40 See the first comment here (it looks like you'll have to email D2 though):
http://bloodandtreasure.typepad.com/blood_treasure/2011/12/conventionalonomics.html


Posted by: Barry Freed | Link to this comment | 12-19-14 10:46 AM
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Grand piano legs are removable to enable moving, so if the diagonal domension of the elevator floor sufficiently exceeds the width of the keyboard, only the length of the instrument is the limiting factor. If I were filthy, frivolously rich, I would buy a Fazioli F308 and fly Manu Samoa over on a regular basis to move it around.


Posted by: Jesus McQueen | Link to this comment | 12-19-14 10:50 AM
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63

-o, +i


Posted by: Jesus McQueen | Link to this comment | 12-19-14 10:54 AM
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64

Faziili?


Posted by: Moby Hick | Link to this comment | 12-19-14 10:55 AM
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65

Frivoliusly.


Posted by: Jesus McQueen | Link to this comment | 12-19-14 10:58 AM
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Grand piano legs are removable to enable moving, so if the diagonal domension of the elevator floor sufficiently exceeds the width of the keyboard...
Have you seen the elevators in British apartment buildings?


Posted by: Ginger Yellow | Link to this comment | 12-19-14 11:42 AM
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67

Maybe that's why they are so cheap.


Posted by: Moby Hick | Link to this comment | 12-19-14 11:44 AM
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68

Do they not have elevator unions in Brittannia? Around here, you have to get a special variance from the city council to put in any kind of non-elevator (i.e. not fully enclosed) lift apparatus, even if you're only moving people 3 or 4 feet vertically, because the union has things sewn up so tight. Needless to say, if you cave and get an elevator instead, you're paying through the nose.


Posted by: Natilo Paennim | Link to this comment | 12-19-14 7:56 PM
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Pump-organs on paternosters.


Posted by: clew | Link to this comment | 12-19-14 8:30 PM
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70

A lift is an elevator, right?

Uber, but for moving between floors.


Posted by: fake accent | Link to this comment | 12-19-14 9:30 PM
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Heh. What if you could summon the elevator with your phone and no other way? And you had to pay a guy to let go of the door so the elevator would be able to move.


Posted by: Moby Hick | Link to this comment | 12-19-14 9:37 PM
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72

Still better than the unionized elevators they apparently have in Minnesota.


Posted by: teofilo | Link to this comment | 12-19-14 9:42 PM
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Is the guy wearing a suit with frogging and a round hat? Would be worth a union.


Posted by: clew | Link to this comment | 12-19-14 10:05 PM
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