bad analysis

the weird and wonderful exchange rate board

2011-07-02T03:03:00.000-07:00

i always thought there was something not-quite-right about the foreign exchange board at the airport or those travel money places:

			Bank Buys			Bank Sells
Country	Currency	Currency Code	IMT/TT	Travel Card/ Chq	Notes	IMT/TT	Travel Card/ Chq	Notes
USA	DOLLAR	USD	1.0991	1.1051	1.1128	1.0390	1.0348	1.0341

the bank want's to make money right, so as everyone knows it should "buy low, sell high" but look what we have here: the bank sells at 1.0341 and buys at 1.0991 - arbitrage opportunity!

buy and sell are in the correct place though, what is weird is that the prices are listed in the currency you are purchasing! this kinda makes sense right? one Australiadn dollar buys 1.0341 US dollars, and then when we need to buy back australian dollars it takes 1.0991 us dollars to repurchase our 1 australian dollar; that is, we need more US cents than we received in the initial transaction, so theres the profit the bank needs (if exchange rate bid/ask spreads ever confuse you, just remember you the customer always get shafted =)

but why is this so counter-intuitive. well let me show you an example that will make this clear: the problem is that the thing you are buying is not priced in your currency (like every other good) but in terms of the thing you are purchasing. if shops sold jeans like the banks sold currency this is what a price tag would like: (lets say jeans cost $150)

Item Shop Sells

jeans 0.00667

weird no? but what this would say is that 1 AUD buys 0.00667 of a pair of jeans, necessitating $150 for the whole pair of jeans.

i guess the currency board makes sense because its the one transaction where you have a certain amount of cash and you just want the most of the other currency, whereas when you buy jeans you want one pair of jeans for the lowest price. currency transactions are the inverse of every other transaction in adulthood: but they are like when as a kid you went to the school canteen with 57 cents and said, how much can i get for this?

hierarchy of jobs based on how you spend time

2011-06-27T22:50:00.000-07:00

computer paper work - shuffle bits paper. long time in front of a computer, solo, interspersed with probably pointless meetings.

servicing things - interacting with things in a physical manner, but more solo than "serving people role" eg cleaning, baggage handling, brick laying, mechanic.

serving people - interacting with people in a potentially superficial but possibly deeper way, interspersed with some cleaning or tedious tasks. eg bar, photography, medecine

fractility - anti fragility

2011-06-26T00:42:00.000-07:00

i am unilaterally renaming taleb's anti-fragility to fractility.

anti fragility is something that is robust because it can break repeatedly and still function. fractility is an homage to mandelbrot.

maxim: how you price your time defines how others spend it

2011-06-19T03:25:00.000-07:00

three examples of the price of your time:

the worker: sells time for a positive value and time is generally conserved. they usually don't ask you to stay back and do nothing. (of course there are millions of exceptions that prove the rule)

the volunteer: sells time for nothing and it is generally wasted. see philip greenspun (can't find link)

the student: pay them to use your time. this means you value your time negatively. result? homework...ie they destroy even your outside time, and you do it because you are paying for it.

why mr brainwash is the most important artist of the 21st century

2011-06-14T21:18:00.001-07:00

Sometime shortly after impressionism, beauty left art. Next came meaning as the primary focus. Mr Brainwash is the first artist to completely leave out meaning! Art is what you can get away with.