Cornering the Market… for He-Man?
One of the fundamental principles of economics is that scarcity creates value. The rarer something is, the more valuable it becomes. History is loaded with examples of investors (speculators?) cornering the market in all kinds of things in order to set the price and make a killing. From Cornelius Vanderbilt buying up shares of the Harlem railroad in the 1860s, to the Hunt brothers acquiring roughly half the world’s silver in 1979, to the Sumitomo copper affair of the mid-1990s, to Porsche’s 2008 attempt to corner the market in Volkswagen shares.
Now, from the UK comes a strange and highly obscure attempt to corner the market for a good whose value is much less obvious. A performance artist named Jamie Moakes has decided to see if the principle of scarcity applies to 1980s action figures; specifically, a character from the old He-Man cartoon, Ram Man. Moakes has now collected 136 Ram Man figures, an exercise he’s dubbed “You Will be Rare” and is documenting on Youtube. Read More »
Freakonomics Radio, Hour-long Episode 4: “The Folly of Prediction”
It’s impossible to predict the future, but humans can’t help themselves. From the economy to the presidency to the Super Bowl, educated and intelligent people promise insight and repeatedly fail by wide margins. These mistakes and misses go unpunished, both publicly and in our brain, which has become trained to ignore the record of those who make them. In this hour of Freakonomics Radio, we’ll dream of the day when bad predictors pay – when the accuracy rate of pundits appear next to their faces on TV, when the weatherman who botches the 5-day forecast by 20 degrees has to make his next appearance soaking wet. We’ll also look at the deep roots of divining what tomorrow brings, from the invention of religion to new understandings of how we make decisions about the future. Read More »
Why Do Airlines Always Lose Money? Hint: It’s Not Due to Taxes or Fuel Costs
It’s been more than 30 years since the airline industry was deregulated in 1978. Since then it’s lost nearly $60 billion on U.S. operations, though most of the losses have come since 9/11. The airlines were already in trouble before the attacks happened. The plunge in demand and resulting liquidity crisis led to billions in government cash and loan guarantees– the first true bailout of the 21st century, and certainly a sign of things to come in the next decade.
In a paper published last month, (Abstract here; full version here) Berkeley economist and overall airline guru Severin Borenstein examines some of the most common explanations for the airline industry’s dismal performance, and why experts and deregulation advocates failed so badly to predict what would happen after deregulation 30 years ago. Read More »
The Best Trader in the World Worked for Bernie Madoff
The night Bernie Madoff got caught for running a $60 billion Ponzi scheme I got a call from my friend “Eddie” (not his real name) who for many years worked for Madoff. I couldn’t tell if he was crying but he was very upset. “I can’t believe it,” he said, “Bernie was like a father to me. Mark Madoff was like a brother to me.” We spoke on and off all night as more news came in and he came to grips with the new world he was living in.
I called Eddie yesterday and said I wanted to write an article about him and how I thought he was the best trader I ever knew. I’ve met and worked with over a thousand traders. I traded for hedge funds. I ran a fund of hedge funds. I’ve written five books on trading. And Eddie is the best trader I’ve ever come across. Read More »
and 
. If you haven’t seen it yet, the movie features Steven Levitt and Stephen Dubner, and was made by a dream team of documentary directors. Paste Magazine named it one of the 