Lawrence Economics Blog

Creative Instruction

Robot Traders

There’s a peculiar piece in The Atlantic about peculiar behavior of robot traders.

As usual, I have no idea what these robots are up to, but it probably isn’t about making me rich. The picture shows “an extreme closeup of just one second of trading of the stock SHG, the Shinhan Financial Group. This is 760 quotes from a total of 10,000 made in 12 seconds.”

RobotVictim
1000 quotes per second, baby

Now, why would a robot do that?  There’s no telling with these robot traders.

My suggestion is to take these pictures and ask Professor Azzi.

I bet he has an explanation.

Which Planet Are You On?

Fill in the blank:

ADAM DAVIDSON: Ladies and gentlemen, I have an amazing investment opportunity for you. Give me $100 – just a hundred – and in one year, I promise it will be worth 93 bucks. We call it the _______ special.

Okay, what’s your answer?

If you said “inflation,” congratulations, you’ve mastered one of the simplest concepts about the value of a currency.  As the general price level goes up, the purchasing power of the currency goes down.  In this case, the $100 you lent is worth only $93 when you get it back.  That’s why in times of inflation, people are reluctant to lend money.

If you said “deflation,” congratulations, you’re the co-host of NPR’s Planet Money.  And that bit of Econ 120 fail is from a “patented Planet Money explainer.” Yikes.  There was an entire story yesterday written around this bit of confusion.

Let me ask you a question — is that enough to knock that program off of your trusted sources list?  They ostensibly write about economic issues, yet neither the founder/writer nor any editor/producer was able to catch such a colossal blunder. If they are that confused about the easy stuff, how much do you trust them to explain credit default swaps or the toxic assets program?  (And, as regular readers know, we love the Toxie Cam).

Must be that solar eruption.

Incentives Matter. All Else Is Commentary Or Is It?

Economist Steven Landsburg recently argued that economics can be summarized in two words “incentives matter.”  He further noted that “all else is commentary.”  Tim Harford, author of The Undercover Economist, argues in today’s Financial Times that he accepts the notion that incentives matter, but “the devil is in the details.”  He chides himself and other economists (as well as bankers and policy makers) for not understanding the painful relevance of such detail.  In short, forewarned should mean forearmed.

The Wall Street Saga as Shakespeare Might Have Told It

In today’s Financial Times, John Kay crafts a Shakespearean characterization of recent life on Wall Street.  See if you recognize all of the characters.  If you want the details, read (or listen to) Andrew Ross Sorkin’s Too Big to Fail.  This one definitely falls in the “tragedy” category.

Wall Street play for which we pay

By John Kay

Published: August 3 2010 23:20 | Last updated: August 3 2010 23:20

King Sandy: a little known tragedy, comedy and history in five acts, by William Shakesdown. Based on ‘King of Capital: Sandy Weill and the Making of Citigroup’, a story by Amey Stone and Mike Brewster

Act I. Brooklyn. A dead tree stands to the right of a tumbledown brownstone house. The Brooklyn Bridge and the skyscrapers of Wall Street are in the background. Three witches greet the young boy standing on the front steps.

John Kay, columist

EDITOR’S CHOICE

“All hail to thee, that shall be boss of Shearson,” says one.

“All hail to thee, that shall be leader of Travelers,” says another.

“All hail to thee, that shall be King of Wall Street, thereafter,” says the third.

Young Sandy, shaken, ponders the implications as the curtain falls.

Act II. Manhattan. Sandy, his belongings in a bundle on a stick, crosses the Brooklyn Bridge to seek his fortune. He starts as a shoe-shine boy but his talent is quickly recognised and he becomes chief counsellor to the land of Shearson. He forges an alliance with the duchy of Amex, ruled by the patrician John Robinson. But the Duke resents the clever, uncultured, grasping Sandy and sends him into exile. “There is a world elsewhere,” Sandy proclaims.

Act III. Baltimore. Sandy and his brilliant lieutenant, Jamie, plot their comeback. Building a band of faithful Travelers, Sandy and Jamie move step by step towards Wall Street, finally storming the bastions of Salomon and Smith Barney.

Act IV. Washington and Manhattan. The triumphant Sandy is in a tent outside Washington. The omnipotent King John, Lord of the Citi, enters. Sandy and John agree to unite their kingdoms. Back in Manhattan, Sandy exiles the now too powerful Jamie, assassinates King John, and is proclaimed King of Wall Street.

In the final scene, the fool Grubman is seen playing his fife all the way up Manhattan from Wall Street. Followed by an admiring crowd, he distributes parcels of fool’s gold and internet magic.

Act V. Manhattan and Washington. The fool is exposed: his parcels are empty. He is banished. King Sandy, his reputation tarnished, is deposed. Under the regency of the Chuck Prince, the Citi is riven by competing baronies. The land of Lehman is pillaged by its own citizens. Barons mob the Court, shouting: “Where are our bonuses?”

The situation is calmed by the arrival of Barack the Great, newly elected emperor. His counsellors, Bernanke and Geithner, are at the head of a long train bearing all the treasures of the Americas. The barons break open the chests and rush off with the treasure. Jamie, returned from exile in Chicago, is crowned new King of Wall Street.

***

At the medieval courts Shakespeare described, the exercise of power was not a means to an end, it was itself the end. Kings and barons sought principally to extend their territory. If they occasionally claimed that the purpose was to bring the benefits of their wise rule to a wider public, the assertion was little more than a smokescreen for personal ambition. The rulers aimed to be exalted as rulers of wider domains and to levy taxes on ever more peasants. The political and economic environment has been transformed. But human nature has not, and the factors that drive powerful men today are little different from those that drove them five centuries ago.

The fine robes of Shakespeare’s princely characters were paid for by the work of the peasantry, the men and women who tilled the fields and garnered the crops. Their labours yielded revenues to support lifestyles entirely disconnected from their own experience, people who knew nothing of agriculture and cared less, and whose activities were sometimes disruptive to day-to-day economic activity but mostly irrelevant. Once there were sowers and reapers, now there are bank clients and factory workers; once there were palaces and carriages, now there are McMansions and private jets. Much has changed, yet much remains the same.

Late Summer Chocolate Fix

Craig Pirrong, the Streetwise Professor, believes cocoa prices are fixed.   Why does he believe this?  The data, of course.

Here’s the scoop:

The basic result is that the July, 2010 price rose about 6 percent more than one would have predicted, given the movements in the September, November, and July ICE prices…  This rise in the relative price of July cocoa is exactly what you would expect to observe during a corner, and given the typical co-movements of all these prices, are highly unlikely to have occurred by chance in a competitive market.

If you read his post, which I recommend you do, you can see he developed a fairly straightforward methodology for inferring some sort of market manipulation in an earlier paper on soybeans.

Of course, I learned about price fixing from the frozen orange juice pits in Trading Places.

Juice-y Empirical Analysis

Not terribly long ago we linked to an Art Devany article where he claimed that the steroid era had no statistically discernible effects on home run production. Eric Gould and Todd Kaplan look carefully at the numbers and determine that Jose Canseco had a big influence on his peers’ performance numbers.

From the abstract:

[W]e estimate whether Jose Canseco, one of the best baseball players in the last few decades, affected the performance of his teammates. In his autobiography, Canseco claims that he improved the productivity of his teammates by introducing them to steroids. Using panel data on baseball players, we show that a player’s performance increases significantly after they played with Jose Canseco. After checking 30 comparable players from the same era, we find that no other baseball player produced a similar effect.  Clearly, Jose Canseco had an unusual influence on the productivity of his peers.

If you are a baseball fan, this is a nice research paper to take a look at.  The problem identification is clear, the statistical analysis is straightforward, and the interpretation of the coefficients is central to the analysis. In other words, it isn’t enough to be statistically significant, it also must be “economically” meaningful.

Doink!

Here, the evidence shows that power hitters substantially boosted their home run production after playing with Canseco, to the tune of almost three dingers per yer.  That’s both statistically significant and has “baseball” meaning. (Similar results did not hold for fielding prowess). The more convincing piece is that there are no other sluggers where this result holds.  That is, if the Canseco result was some statistical fluke, you would expect a similar result in at least one other player.

Still, I am going to talk to Prof. Finkler, because I don’t think the numbers are quite consistent.

Here’s a nice summary at Slate.

And here’s Mr. Canseco’s tell-all, Juiced.  When this came out, it was scandalous and the denials were ubiquitous.  But, as time marches on, several allegations have come to pass, and few have been discarded.  By the way, that’s the famous “ball bouncing off Canseco’s head and over the fence for a home run” picture, run ad nauseum on sports bloopers back in the day.

Is Major League Baseball Competitive?

A couple of final words on the summer I&E Reading Group selection, Moneyball.   As was argued by Michael Lewis, Billy Beane capitalized by exploiting what appeared to be a market inefficiency.  Indeed, economists Jahn Hakes and Skip Sauer found empirical support for this proposition .

An interesting question, then, is why other teams didn’t innovate via these quantitative techniques sooner? In an archived EconTalk interview with Professor Sauer, Russ Roberts suggests that Major League Baseball may well not be a competitive industry. That is, owners are “playing a different game” and that the costs of having a bad team aren’t really that high.  In fact, Roberts argues (at about 28:00), the absence of competition would allow owners can indulge stupid management practices without a significant hit to the bottom line.  It would also allow teams to do things like discriminate on the basis of race, or simply not aggressively try to win, where the costs would not be that high. When is the last time a team went bankrupt? Or sold at a steep discount?

That’s an interesting point because a standard economics argument is that competitive markets are quick to punish firms that fail to adopt best practices. Firm that adopt racist or sexist hiring or compensatory practices will loses out to those that don’t.  And the larger point, of course, is that robust competition pushes firms to innovate, or at least to adopt practices once others have done so.  In the context of baseball this is transparent.  When there was a color line and African Americans were excluded, then teams didn’t suffer for their racist practices.  However, once teams started to sign the best African Americans players, then racist policies had a price; that is, teams that didn’t discriminate on the basis of race had access to the best African-American ballplayers — refusing to sign Willie Mays doesn’t help your chances of winning.

Sauer also addresses Steve Levitt’s criticisms (which I share) about the source of the A’s dominance was actually their dominant starting pitchers (at about 38:00).  Sauer responds that, regardless of the reason for the A’s success, the numbers seem to show an inefficiency on the offensive side.

You can also catch Roberts interviewing Michael Lewis on the topic of Moneyball.

Does Moneyball Apply to Kindergarten?

David Leonhardt has set the kindergarten teachers’ portion of the internet afire with his provocative New York Times piece, “The Case for $320,000 Kindergarten Teachers.”  He cites some recent research that finds unusual importance of the kindergarten year to adult outcomes, and in particular the importance of good teachers.

Students who had learned much more in kindergarten were more likely to go to college than students with otherwise similar backgrounds. Students who learned more were also less likely to become single parents. As adults, they were more likely to be saving for retirement. Perhaps most striking, they were earning more.

Mr. Chetty and his colleagues estimate that a standout kindergarten teacher is worth about $320,000 a year. That’s the present value of the additional money that a full class of students can expect to earn over their careers. This estimate doesn’t take into account social gains, like better health and less crime..

That $320,000 figure is what has set the internets ablaze with kindergarten teacher good cheer, along with the usual trenchant observations about the pay disparity between teachers and, say, professional athletes. One would expect a economics blog post to go through the caveats of demand and supply setting wages, problems identifying good teachers and firing bad teachers, and these sorts of issues.

I was thinking along different lines. In the past two weeks, our Innovation & Entrepreneurship Reading Group has been thinking about the Moneyball Hypothesis and how it might apply to higher education.  For example, what sort of metrics might we incorporate to identify promising collegiate talent? Here’s a thought — rather than relying on SAT and ACT scores for admissions, why not require kindergarten transcripts?  This could easily be accomplished by simply asking for all school transcripts instead of relying on the high school transcript.  If Chetty and company are right, this could be just the route to go to identify some of those diamonds in the rough.

Also see The Economist‘s brief writeup.

UPDATE: It looks like graduate schools have beaten me to it.

Surprise! Paul Krugman Begs to Differ.

For those of you who wish to see a response to Rajan’s  (and my) argument posted earlier today, Paul Krugman in a NY Times blogpost makes the standard Keynesian case for full fledged stimulus.  He even criticizes our hero Schumpeter.  The battlelines are drawn between short term and long term thinking.

Ultra low interest rates: At what cost?

Macroeconomic stabilization policy seems to have only two primary levers: interest rates and budget deficits.  Many  economists believe that we have used these tools to the limit and have not faced the structural changes (read microeconomic) our economy requires.  A cheap credit policy has fueled much of the growth of the past 25 years and especially in the past decade.  Consequently, when income generation becomes insufficient to pay the related debt service, our fragile economy stumbles.  We cannot continue to revert to cheap credit as the way to stable growth.

Raghu Rajan, in both an opinion piece in today’s Financial Times and in his marvelous book, Fault Lines, argues that ultra low rates (in both nominal and real terms) encourage allocation of capital into housing and cars but do little to help sustain long term economic growth.  In Chapter One  of Fault Lines, entitled “Let Them Eat Credit”, Rajan claims that United States policy makers (of all stripes) have used cheap credit as a way to assist low and moderate income groups with consumption to mask the growing income gap between these groups and higher income groups.  Abundant savings from  Asia in particular, as a response to IMF conditionality in the financial crisis of the late 1990s, has enabled the US to pursue such a low rate policy.  If Asians follow our advice and dramatically increase domestic consumption, the low rate policy will not be sustainable and the weaknesses our economy will become more evident.

Energy Independence: At What Cost?

Don Boudreaux at Cafe Hayek argues persuasively that energy independence and comparative advantage are not likely to be compatible for the U.S.  If we wish to specialize in energy production, it will be more expensive in terms of economic welfare than importation; thus, we must either accept a lower standard of living or import something else.  What makes energy so special that we should not trade for it?  Should we instead import more food, pharmaceuticals, or technology, for example.  In short, the doctrine of comparative advantage suggests that we specialize in things that we are particularly adept at producing and trade for other goods and services.

In his classroom talk in April, Yoram Bauman posed two questions

1.  Are you fearful that we will run out of energy (especially from carbon based sources)?

2.  Are you fearful that we will not run out of energy from carbon-based sources?

Higher prices can ensure that the first won’t happen but not the second.  Concerns raised by positive answers to the second question won’t be addressed until we have a price for carbon-based energy that is higher than for clean fuels.  Certainly, energy independence (i.e., no importation of carbon-based fuels) will lead to higher prices, but it also would be a very expensive way to achieve the result as the domestic price would have to rise enough to clear the domestic market.  It’s not clear, however, that this would be a price that internalizes the greenhouse gas effect.

It’s a (Very Exclusive) Jungle Out There

While we’re on the topic of the publishing industry, my insider contact has tipped me off to the latest delicious controversy.  Literary superagent Andrew Wylie is taking his clients’ backlist titles and selling the e-book rights directly and exclusively to Amazon.

Wow. I wonder what that means?

Let’s take a step back.  Suppose you are, say, John Updike, and Random House wants to publish your book.  The company gives you an advance and then pays you royalties based on sales and all things are right in the world.

But now, technology marches on and the next thing you know the Kindle and the iPad emerge, and all of a sudden there is a potentially new version of your product, the e-book.  What should we make of this? Does your contract with Random House extend to the right to publish the e-book? Or do they have exclusive rights to  Or do you maintain that right?

It wasn’t until the mid-1990s that Random House began explicitly covering e-books in its contracts, and Wylie seems to think that his clients maintain e-book rights.  The courts seem to agree.

It’s not clear from the article that that is the biggest problem.  According to the New York Times blurb:

John Sargent, chief executive of Macmillan, posted a response on his company’s Web site, criticizing Mr. Wylie for cutting an exclusive deal with Amazon for the 20 e-books, which in addition to Mr. Nabokov’s “Lolita” and Mr. Roth’s “Portnoy’s Complaint” include Ralph Ellison’s “Invisible Man” and John Updike’s “Rabbit” books.

“It is an extraordinarily bad deal for writers, illustrators, publishers, other booksellers and for anyone who believes that books should be as widely available as possible,” Mr. Sargent said.

Some of you may remember Mr. Sargent who locked horns with Amazon not too long ago over  rights to set prices for e-book prices.  The effect of that was for Macmilian and others to wrestle control from Amazon and raise consumer prices for many e-book titles.  Certainly, at least in terms of a partial equilibrium model, the higher prices aren’t consistent with “as widely available as possible.”

It’s probably more complicated than that, though.

The Price is Right? UPDATED, TWICE!

The Summer marches on, and that means it’s time for some more summer reading. My recommendation this week is from George Mason economist and Marginal Revolution blogger extraordinaire, Tyler Cowen.  His latest book is The Age of the Infovore.

So, I was poised to pick up a copy for my wife at Amazon for what seemed to be a bargain price of $10.88, but then noticed that the hardcover version, Create Your Own Economy, was selling for only $4.64.   It’s the same book, but the title changed when the paperback edition was released.

But then I thought, maybe she’d want the Kindle version instead.  But the Kindle edition of Create Your Own Economy is $12.99, whereas the Kindle for The Age of the Inforvore is $9.99.  Huh. So I’m paying a premium for a Kindle version of a hardcover version of the book, but I enjoy a steep discount if I actually purchase the hardcover.

Then I thought, well, maybe I’ll get her some perfume.

I think Yoram Bauman is right – choices are bad.

UPDATE: I sent this pricing info to Professor Cowen and he sent me a copy of his book with the inscription, “How is $0.00 for a price?”  Thanks!

UPDATE 2: While trolling the EconTalk archives, I came across an episode of Roberts and Cowen talking about the book.

Going Mobile

During the recent oil price spike in 2008, one of my mates suggested that our generation will be the last to enjoy relative ease in air travel.  A large number of people, even those with decidedly middle class incomes, have the means to travel extensively and find their way to every nook and cranny the world has to offer. A sustained oil crunch, absent a viable fuel substitute, could indeed cripple the airline industry and leave globetrotting to the relatively affluent.

Taking it a step further, Brian Ladd extends the thought experiment to automotive travel.  I’m not sure I endorse his argument, but I certainly like the thought experiment.  One passage pertaining to industrial production caught my eye:

Economists who blithely assume that pre-2008 automobile sales are “normal,” because Americans “need” their cars, misunderstand the nature of the automobile market. Enormous cars, long commutes, and vast parking lots do have their advantages, but we could manage to live without them.

I am inclined to think that economists would be the last group to assume such a thing based on “need.” In fact, I would think that we would be in the opposite camp, arguing that price signals will lead to adjustments both on the demand side (fewer miles, more fuel-efficient vehicles, shorter commutes, maybe even public transportation) and the supply side (improved fuel efficiency, alternate fuel source).

For an excellent discussion, I recommend the classic James Hamilton blog post on “How to Talk to an Economist about Peak Oil.”  I’ll go through that in a future post.

Moneyball at The Academy

It’s the middle of the summer, and it’s time to check in with the I&E Reading Group. This summer, we have Michael Lewis’ Moneyball and Louis Menand’s Marketplace of Ideas. If you need a copy of either, I know we have them at The Mudd.

For our first book, Lewis provides us with a look at the world of baseball management. I would suggest that the money point of Moneyball has to do with the tension between quantitative tools and “experts” watching and assessing potential. In the context of evaluating talent, for example, should teams look at the numbers or listen to the scouts? But that isn’t quite right, either, because there is a long, entrenched history of listening to the scouts, so putting too much stock in the college on base percentage is anathema to the whole process.  The scouts don’t believe the numbers, and management trusts the scouts.  So the conventional wisdom is that the numbers lie.

It doesn’t end there, either.  The type of quantitative analysis used for player evaluation has been extended to on-the-field strategy, again exposing a tension between what the numbers guys say and what various experts (i.e., managers, sportswriters, fans) think. (For a similar example in the context of American football, see here).

Continue reading Moneyball at The Academy

Surely make you lose your mind…

Our first edition of the summer mailbag is here with a contribution from the always ebullient “Mr. O,” who says he sees economics everywhere these days.  The article in question has to do with a congesting pricing scheme in Chicago, and of particular interest to Mr. O is the methodology in which people’s time is valued.  As you may recall from, well, from all of my classes, a classic study by Deacon and Sonstelie that valued time by watching how long people were willing to wait to fill up their gasoline at price-controlled stations rather than paying market prices across the street.

In Chicago, as the saying goes, there are two seasons: winter and construction. And all that construction [isn’t] free. So the program would benefit those who are willing to pay for a faster commute (in the so-called “Lexis Lanes”) and raise bucketloads of cash for the metro area.

What’s the down side?

Should the Government Target Specific Industries?

Since at least the era of Alexander Hamilton and Thomas Jefferson, economists and policy makers have debated about the appropriate role for industrial policy; that is, the use of subsidy, tax, and regulatory policy to allocate capital.  The alleged “success” of Japan’s Ministry of Industrial Trade and Industry in the 1950s and 1960s found many advocates for government directed allocation of capital and funding.  Most recently, Andy Grove, former CEO of Intel,  strongly advocated a targeted focus on manufacturing.  Many others, and the vast majority of economists, argue that  governments are not better than markets at allocating capital and that subsidies for some require higher taxes for others.  They also argue that entrepreneurial efforts are channeled at attracting politicians rather than producing new products and attracting customers.

The Economist recently completed an open debate on this subject.  I encourage all to read the two sides and see which you find most persuasive.

Bad Day for Environmental Economics, And the Environment

Almost unnoticed, this week marks a terrible week for advocates of market solutions to environmental problems, including various cap-and-trade systems. The Wall Street Journal reports that new federal air pollution rules have resulted in the tanking of the sulfur dioxide market, rendering extant permits worthless.

Often referred to as “the grand policy experiment,” (also here), the SO2 market was considered a success, and thought of as a model for potential global system to reduce greenhouse gases.  As with so many cases in economics, a credible commitment matters.  The Journal sums it up nicely:

The market’s collapse shows how vulnerable market-based approaches to reducing air pollution are to government actions. That could scare off investors, who won’t commit to a market where the rules can change at any minute.

Indeed.

One of the great benefits of using market instruments to address environmental problems is that they can substantial lower the costs.  The law of demand says that as price goes up, people buy less.  As a result of the collapses of this market, we will likely pay more to get less in terms of environmental quality.  This may well undermine efforts to implement market solutions elsewhere.  If investors are convinced the regulatory environment is unstable or uncertain, they are unlikely to make large capital investments, and are more likely to take stopgap measures.

Let’s Mis-Behave

Economists are often chided for their “unrealistic” behavioral assumptions, specifically rational self-interest.  An obvious direction for research was to relax some of these assumptions, often with surprising results.  Indeed, the Nobel Prize in economics has gone to scholars such as Herb Simon and Daniel Kahneman for work that took a hard look at the rational man assumption.  But I would probably point to the blockbuster, almost freakish success of Freakonomics and Super-Freakonmomics, texts that sometimes venture into this realm, that put behavioral economics in the public eye.

George Lowenstein
George Lowenstein

Despite the success of behavioral economics and finance, we have to be careful how far we want to push it. “[I]t’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address,” says Carnegie Mellon’s George Lowenstein, one of the giants in the field. Writing a cautionary op-ed in today’s  New York Times, Lowenstein and his co-author give a number of examples where reliance on behavioral results can miss the forest through the trees.

A “gallons-per-mile” bill recently passed by the New York State Senate is intended to help drivers think more clearly about the fuel consumption of the vehicles they purchase; research has shown that gallons-per-mile is a more effective means of getting drivers to appreciate the realities of fuel consumption than the traditional miles-per-gallon.

But more and better information fails to get at the core of the problem: people drive large, energy-inefficient cars because gas is still relatively cheap. An increase in the gas tax that made the price of gas reflect its true costs would be a far more effective — though much more politically painful — way to reduce fuel consumption.

I think the LU economists are with Lowenstein on this one.  We believe that you need to be grounded with a clear understanding of the fundamentals in order to understand the strengths and weaknesses of the discipline.

Know Your LU Econ Bloggers

I came across a research note on how bloggers reveal their personality types through their word choices.

More neurotic bloggers used more words associated with negative emotions; extravert bloggers used more words pertaining to positive emotions; high scorers on agreeableness avoided swear words and used more words related to communality; and conscientious bloggers mentioned more words with achievement connotations. These were all as expected. More of a surprise was the lack of a link between the Big Five personality factor of ‘openness to experience’ and word categories related to intellectual or sensory experience. Instead openness was associated with more use of prepositions, more formal language and longer words.

I wasn’t really sure of what to make of that (did they misspell extrovert?), but fortunately, the comments section directed me to the www.typealyzer.com site — a site that allows me to take a look for myself.  A few clicks later and it turns out that we fall into the category, The Thinkers.

The logical and analytical type. [LU Econ Bloggers] are especially attuned to difficult creative and intellectual challenges and always look for something more complex to dig into. [LU Econ Bloggers] are great at finding subtle connections between things and imagine far-reaching implications. (emphasis added)

That sounds about right.  And it continues…

[LU Econ Bloggers] enjoy working with complex things using a lot of concepts and imaginative models of reality.

Wow, they sure have us pegged.

Since [LU Econ Bloggers] are not very good at seeing and understanding the needs of other people, they might come across as arrogant, impatient and insensitive to people that need some time to understand what they are talking about.

Well, you can’t win ’em all.