I'm beginning to hate Australia.
To recap: I've been playing the price spread between BetFair, iPredict and CentreBet on the Australian election.
If Labor wins, I'll be up $191, with lots of long positions at BetFair and CentreBet, where Labor has been cheap relative to iPredict. If the Coalition wins, I'll be up $280 at iPredict, where the Liberals have been cheap relative to the other two markets. I win in both states of the world.
But the states of the world now don't span the space. The third alternative is no result and a second election. In that case, BetFair unwinds its bets and gives you your money back, iPredict holds positions pending the results of the second election, and CentreBet is still deciding what to do.
If one of the Australian readers would kindly go and box the independents about the ears and make them get on with it already, I'd be much obliged.
BetFair has a very very thin book on whether there'll be a second election. I need a market in "There'll be a second election and Labor will win". Working out and implementing the right hedge here is going to be tricky.
Monday, 30 August 2010
Sunday, 29 August 2010
Tobacco censorship
When the Tobacco Inquisitors at Otago suggested adoption of the WHO's framework for controlling tobacco marketing on the internet, I was a bit curious to see the details. Here they are.
And folks say Big Tobacco is evil.
58. In relation to the Internet, for example, there are five principal categories of responsible entity upon which bans or particular obligations should be imposed.The document goes on to outline sanction regimes, telephone hotlines to call if you see a banned tobacco ad, encouraging civil society monitoring and enforcement....
- Content producers create the content or cause it to be created. These include tobacco companies, advertising agencies and producers of television programmes, films and games that are distributed online. Content producers should be banned from including tobacco advertising, promotion or sponsorship in the content they produce.
- Content publishers include publishers and entities that select content before it is made available to Internet users (e.g. Internet sites of newspapers or broadcasters). Content publishers should be banned from including tobacco advertising, promotion or sponsorship in the content they make available.
- Content hosts are entities that control Internet-connected computer servers on which content is stored, including entities that aggregate content produced by others without selecting the content before they make it available to Internet users (such as social networking Internet sites). Content hosts should have an obligation to remove or disable access to tobacco advertising, promotion and sponsorship once they have been made aware of the content. [So Facebook users who smoke are banned from having groups promoting their favorite products]
- Content navigators are entities, such as Internet search engines, that facilitate the location of content by users of communications services. Content navigators should have an obligation to disable access to tobacco advertising, promotion and sponsorship once they have been made aware of the content. [So Google has to follow rules about what searches are allowed to find, not unlike China's rules.]
- Access providers are entities that provide end-user access to communications services, such as Internet service providers and mobile telephone companies. Access providers should have an obligation to disable access to tobacco advertising, promotion and sponsorship once they have been made aware of the content. [basically a DNS blacklist as best I'd reckon]
And folks say Big Tobacco is evil.
Saturday, 28 August 2010
For a New Zealand liberal party
...but it's probably too late. Chris Trotter writes:
HT: Bryce Edwards and Gonzo.
So, if Act was smart it would announce something as radical and head-messing as an across-the-board decriminalisation of all drugs – backed-up with a comprehensive drug-education programme in schools and generous drug-treatment and rehabilitation schemes for addicts.I've been arguing the same for a while now. Here's the strategic case for the repositioning. Sir Roger gets it. Here's the analysis showing that they'd at worst not be hurting themselves at the polls.
And that would only be the beginning.
What would there be to stop Act from going on to announce a campaign to restore all the traditional rights and freedoms of free-born citizens by rolling back all those so-called "reforms" of the legal and penal systems which have empowered the State at the expense of the "sovereign individual"? Or, coming out in support of a woman's right to choose and gay marriage?
Overnight, Act would lose its creepy followers from the Sensible Sentencing Trust and Family First. In their place it would attract a much larger – and younger – slice of the electorate: a slice that is socially-liberal, economically "dry" and temperamentally hostile to the claims of large and authoritarian institutions – especially the State.
The party would still be a bastion of neoliberal thought, but by taking such a radical libertarian stand on issues like drugs, law and order and the power of the State, Act would finally be able to detach the "far-right" label from its back.
HT: Bryce Edwards and Gonzo.
Friday, 27 August 2010
Hipster Shrugged (updated)
Some of the best, from #HipsterShrugged.
ModeledBehavior I invented a motor that ran on nothing but irony. It was kinda cool, I guess #HipsterShrugged 2 Retweets
petersuderman I used to like the government, but that was before it got big and popular. #HipsterShrugged 12 Retweets
radleybalko I stopped contributing to society way before "going Galt" was cool. #HipsterShrugged Top Tweet14 Retweets
normative Of course not, who names their kid Dagny? She was "Dolores" until the end of middle school. #HipsterShrugged 1 Retweet
peejaybee Galt's Gulch used to be pretty cool. Now it's like, strollers everywhere. #hipstershrugged
jacobgrier Camping out for the new iPhone. Rearden Metal finish, Galt motor. Pretty sweet. #hipstershrugged #stilldropscalls 1 Retweet
conor64 People vilify Dagny Taggart, but I wish more corporate execs always traveled by rail #HipsterShrugged 4 Retweets
willwilkinson So you're playing the Mouch fundraiser? Cool, cool.#HipsterShrugged
evanbanks Taggert Transcontinental was so much better back when it was called Taggert Local and sold fixies. #hipstershrugged
willwilkinson PHU was my safety school. #HipsterShrugged 2 Retweets
normative Actually, Francisco's got this trust fund, but he doesn't like to talk about it . #HipsterShrugged
willwilkinson Yeah, Francisco's super-rich, but he's totally cool politically. #HipsterShrugged 2 Retweets
normative Yeah, Ragnar was in Sigur Ros for a while, but he bailed when the label got so hardass about piracy. #HipsterShrugged 3 Retweets
willwilkinson 20th Century Motor Company used to make a sweet hybrid. #HipsterShrugged
grandmofhelsing Galt's Speech really isn't as good as his earlier work. #hipstershrugged 7 Retweets
laughinghyena13 That hamburger sandwich is fine, but I've had much better at a diner in Wyoming #hipstershrugged 1 Retweet
normative No, it's *Rearden* Metal. I mean, it looks just like 80s metal, but it's ironic #HipsterShrugged
normative I swear by my life and my love of it, if I have to hear "Oxford Comma" one more f*ing time... #HipsterShrugged
SandyS1 They released my concerto on CD, so I went on strike because it's got more integrity on the 180-gram vinyl pressing.#HipsterShrugged
jacobgrier I have John Galt's entire speech... on vinyl #hipstershrugged 5 Retweets
grandmofhelsing Richard Halley is the best musician ever because he only performs to select audience at new club, Galt's Gulch. #HipsterShrugged
ziege19 I refuse to accept as guilt the fact of my own face on the T-shirt I am wearing. #HipsterShrugged
normative Who is John Galt? Oh, you probably haven't heard of him, he's really obscure. #HipsterShrugged
Yeah, appropriating these folks tweets makes me a looter. Meh. #HipsterShrugged
Update: Julian Sanchez, who started all this, has posted his favorites, here.
ModeledBehavior I invented a motor that ran on nothing but irony. It was kinda cool, I guess #HipsterShrugged 2 Retweets
petersuderman I used to like the government, but that was before it got big and popular. #HipsterShrugged 12 Retweets
radleybalko I stopped contributing to society way before "going Galt" was cool. #HipsterShrugged Top Tweet14 Retweets
normative Of course not, who names their kid Dagny? She was "Dolores" until the end of middle school. #HipsterShrugged 1 Retweet
peejaybee Galt's Gulch used to be pretty cool. Now it's like, strollers everywhere. #hipstershrugged
jacobgrier Camping out for the new iPhone. Rearden Metal finish, Galt motor. Pretty sweet. #hipstershrugged #stilldropscalls 1 Retweet
conor64 People vilify Dagny Taggart, but I wish more corporate execs always traveled by rail #HipsterShrugged 4 Retweets
willwilkinson So you're playing the Mouch fundraiser? Cool, cool.#HipsterShrugged
evanbanks Taggert Transcontinental was so much better back when it was called Taggert Local and sold fixies. #hipstershrugged
willwilkinson PHU was my safety school. #HipsterShrugged 2 Retweets
normative Actually, Francisco's got this trust fund, but he doesn't like to talk about it . #HipsterShrugged
willwilkinson Yeah, Francisco's super-rich, but he's totally cool politically. #HipsterShrugged 2 Retweets
normative Yeah, Ragnar was in Sigur Ros for a while, but he bailed when the label got so hardass about piracy. #HipsterShrugged 3 Retweets
willwilkinson 20th Century Motor Company used to make a sweet hybrid. #HipsterShrugged
grandmofhelsing Galt's Speech really isn't as good as his earlier work. #hipstershrugged 7 Retweets
laughinghyena13 That hamburger sandwich is fine, but I've had much better at a diner in Wyoming #hipstershrugged 1 Retweet
normative No, it's *Rearden* Metal. I mean, it looks just like 80s metal, but it's ironic #HipsterShrugged
normative I swear by my life and my love of it, if I have to hear "Oxford Comma" one more f*ing time... #HipsterShrugged
SandyS1 They released my concerto on CD, so I went on strike because it's got more integrity on the 180-gram vinyl pressing.#HipsterShrugged
jacobgrier I have John Galt's entire speech... on vinyl #hipstershrugged 5 Retweets
grandmofhelsing Richard Halley is the best musician ever because he only performs to select audience at new club, Galt's Gulch. #HipsterShrugged
ziege19 I refuse to accept as guilt the fact of my own face on the T-shirt I am wearing. #HipsterShrugged
normative Who is John Galt? Oh, you probably haven't heard of him, he's really obscure. #HipsterShrugged
Yeah, appropriating these folks tweets makes me a looter. Meh. #HipsterShrugged
Update: Julian Sanchez, who started all this, has posted his favorites, here.
Minimum alcohol pricing and economic rents
I'd noted yesterday that it's likely that the rents from minimum pricing get eroded unless there's some other imperfection in the system. Let's walk through it now.
If you want to work out who profits by minimum pricing, you have to figure out whether there's an asset in fixed supply in the system. Suppose we had a completely free market in alcohol in all respects but one: a minimum retail price of $1 per standard drink. And suppose further that the cost to the consumer for low end product, absent the rule, could be as low as $0.50.
In that world, do the alcohol producers get to pocket $0.50 per standard drink? Unlikely. They're still having to compete with each other for customers. Now, if there are some who actually prefer bad alcohol at high prices to good alcohol at high prices, like the perverts I see around here who will take instant coffee over espresso when both are free, then there could be some rents to producers. But even in that case they'd be competing on other margins as well: product packaging or other ancillary bundled goods, for example. Didn't one of the "ready to drink" brands have a promotion a while back putting $20 notes into random cases of product? Is it possible to ban every potential tweak on that model?
Do the shoppes get to pocket $0.50 per standard drink? No. They're not going to be buying much product at $0.50 per standard drink that they'd then get to on-sell at $1 per standard drink because they're competing with other shoppes. That competition means that product actually worth $1 per standard drink will wind up retailing at about $1 per standard drink, and the low quality product will be driven from the market. In the alternative case of the folks with perverse preferences preferring the cheaper products, the stores will compete for those folks' custom through more advertising, better facilities, lower margin on complementary goods and so on. And if they don't, some other shoppe that does will enter the market and do well.
So in the world where there's only minimum price regulation and the market is otherwise competitive, I have a hard time seeing big rents to anybody. Costs get bid up instead. But we're not in that world in one critical way that's set to become more important: restrictions on who can sell alcohol. All signs point to a bunch of local retailers being expropriated by the state without compensation as licences fail to be renewed. That makes the surviving retailers local monopolists with some pricing power. The producers again don't get the rents - they're competing with each other for space in the shoppes. But the remaining licence holders can earn rents, presuming that the drop-off in demand is more than offset by the revenue increase - likely, as the price elasticity of demand is -0.42 or so. That will bid up the value of those shoppes that get to keep their licences, presuming that the license transfers with the sale of the shoppe. Basically, an oligopoly model with competitive fringe will apply: the supermarket duopoly (Liquorland owned by Foodstuffs, if you recall) constrained by fringe internet and remaining small shoppes for wine and beer; the big liquor outlets constrained by fringe remaining small shoppes and internet for liquor. Small liquor shoppes keeping their licences will be taking some local monopoly locational rents limited by their customers' access to transportation or the internet.
A couple of predictions then:
I've not adjusted my portfolio (University Superfund plus iPredict) as result of these predictions, so don't take them as stock advice.
If you want to work out who profits by minimum pricing, you have to figure out whether there's an asset in fixed supply in the system. Suppose we had a completely free market in alcohol in all respects but one: a minimum retail price of $1 per standard drink. And suppose further that the cost to the consumer for low end product, absent the rule, could be as low as $0.50.
In that world, do the alcohol producers get to pocket $0.50 per standard drink? Unlikely. They're still having to compete with each other for customers. Now, if there are some who actually prefer bad alcohol at high prices to good alcohol at high prices, like the perverts I see around here who will take instant coffee over espresso when both are free, then there could be some rents to producers. But even in that case they'd be competing on other margins as well: product packaging or other ancillary bundled goods, for example. Didn't one of the "ready to drink" brands have a promotion a while back putting $20 notes into random cases of product? Is it possible to ban every potential tweak on that model?
Do the shoppes get to pocket $0.50 per standard drink? No. They're not going to be buying much product at $0.50 per standard drink that they'd then get to on-sell at $1 per standard drink because they're competing with other shoppes. That competition means that product actually worth $1 per standard drink will wind up retailing at about $1 per standard drink, and the low quality product will be driven from the market. In the alternative case of the folks with perverse preferences preferring the cheaper products, the stores will compete for those folks' custom through more advertising, better facilities, lower margin on complementary goods and so on. And if they don't, some other shoppe that does will enter the market and do well.
So in the world where there's only minimum price regulation and the market is otherwise competitive, I have a hard time seeing big rents to anybody. Costs get bid up instead. But we're not in that world in one critical way that's set to become more important: restrictions on who can sell alcohol. All signs point to a bunch of local retailers being expropriated by the state without compensation as licences fail to be renewed. That makes the surviving retailers local monopolists with some pricing power. The producers again don't get the rents - they're competing with each other for space in the shoppes. But the remaining licence holders can earn rents, presuming that the drop-off in demand is more than offset by the revenue increase - likely, as the price elasticity of demand is -0.42 or so. That will bid up the value of those shoppes that get to keep their licences, presuming that the license transfers with the sale of the shoppe. Basically, an oligopoly model with competitive fringe will apply: the supermarket duopoly (Liquorland owned by Foodstuffs, if you recall) constrained by fringe internet and remaining small shoppes for wine and beer; the big liquor outlets constrained by fringe remaining small shoppes and internet for liquor. Small liquor shoppes keeping their licences will be taking some local monopoly locational rents limited by their customers' access to transportation or the internet.
A couple of predictions then:
- It isn't going to be the big guys who lose their licences. Foodstuffs and Progressive are well organized and I'm sure have lobbyists. The little immigrant-owned liquor shoppes in South Auckland - they're set for the chop. And there might be some weirdo hits to the big guys in small towns that have had dry-county leanings for some time.
- The value of the licences increases, so minimum price regulation pushes up the price of shares in Foodstuffs and Progressive as they own a lot of licences.
I've not adjusted my portfolio (University Superfund plus iPredict) as result of these predictions, so don't take them as stock advice.
YouTube tobacco
RSW37 points to TV3 News coverage where Otago's George Thompson, moaning about that there are videos of smoking on YouTube, seems to lament that we haven't China's ability to control the web.
The TV3 story has Philip Morris saying the company has asked YouTube to take down videos with their branding; presumably this is due to healthist pressure rather than copyright issues, though you can never be sure. YouTube is a pretty nice archive of the history of advertising. Hopefully that doesn't get wrecked.
First they erase the cigar from Churchill's mouth, then they take the Winstons* away from the Flintstones?
*Yes, I know that's RJ Reynolds, not Philip Morris. But it's too good an old ad to pass up.
The internet is just so much harder than other media. It's a real wild west. There's no rules and there's no real control, except in places like China.And he seriously says this like it's a bad thing. Hit the link above for the video; I can't see any way of embedding it.
The TV3 story has Philip Morris saying the company has asked YouTube to take down videos with their branding; presumably this is due to healthist pressure rather than copyright issues, though you can never be sure. YouTube is a pretty nice archive of the history of advertising. Hopefully that doesn't get wrecked.
First they erase the cigar from Churchill's mouth, then they take the Winstons* away from the Flintstones?
*Yes, I know that's RJ Reynolds, not Philip Morris. But it's too good an old ad to pass up.
Thursday, 26 August 2010
The afternoon's weeping
Item the first: the Tobacco Inquisition at the University of Otago's Wellington School of Medicine now want to censor the internet to get rid of YouTube videos friendly to tobacco companies.
Go to YouTube. Put "Smoking" into the search bar. You get:
Who is funding Otago to do this stuff? Ah. The Health Research Council of New Zealand. Nice. I'll have to remember to try paying somebody cash under the table to take back the part I paid for that study.
Item the second: a Belgian paying about $NZ 110/month for the third fastest broadband package, capped at a maximum of 30 MBps, downloaded 2.6 TB of data over a month and his ISP is cool with that. I'm paying $110 NZ per month for broadband plus phone for their fastest package, currently delivering 7 MBps to the exchange but less than 2MBps for overseas connections, that caps out at 20 GB/month of traffic. Nothing to be done about it, and no particular policy moves can fix it. It's a small remote market problem. But I still weep.
Lead researcher Lucy Elkin said that while tobacco companies denied advertising on the internet, the significant brand presence on YouTube was consistent with indirect marketing activity by tobacco companies or their proxies.I need to start smoking cigars again.
"The internet is ideal for tobacco marketing, being largely unregulated and viewed by millions of people world-wide every day," she said.
The study also found that while YouTube provides for the removal of material it defines as offensive, it does not currently consider pro-tobacco content as grounds for removal of specific video clips.
However, public and health organisations could request that YouTube removes pro-tobacco videos containing material considered offensive under present rules, Elkin said.
Governments could also implement the WHO's Framework Convention on Tobacco Control requirements on controlling tobacco marketing on the internet.
But Thomson said in New Zealand, the government had shown it was not willing to put the legal resources to deal with examples of indirect tobacco marketing.
Go to YouTube. Put "Smoking" into the search bar. You get:
- Smoking lettuce
- quit smoking
- a 1951 Goofy No Smoking cartoon
- a Sonic the Hedgehog no-smoking video
- Short video of smoking celebrities
- Smoking tire (cars)
- A Star Wars anti-smoking PSA
- Another anti-smoking video
- ...
Who is funding Otago to do this stuff? Ah. The Health Research Council of New Zealand. Nice. I'll have to remember to try paying somebody cash under the table to take back the part I paid for that study.
Item the second: a Belgian paying about $NZ 110/month for the third fastest broadband package, capped at a maximum of 30 MBps, downloaded 2.6 TB of data over a month and his ISP is cool with that. I'm paying $110 NZ per month for broadband plus phone for their fastest package, currently delivering 7 MBps to the exchange but less than 2MBps for overseas connections, that caps out at 20 GB/month of traffic. Nothing to be done about it, and no particular policy moves can fix it. It's a small remote market problem. But I still weep.
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