Links to Consider, 10/24
Infovores on prediction market contests; George Hawley on ranked-choice voting; The pessimism of home builders; interview with N.S. Lyons
Unlike more established prediction markets, Manifold is based entirely on play money, allocated in equal amounts to each competitor when he or she signs up. The only external incentives to bet wisely are awarded as prizes according to relative rank:
Top five get interviewed for a chance at a $25k research fellowship with The Salem Center
Top twenty get a conference invite from Richard Hanania, Bryan Caplan, and Robin Hanson and may contribute an essay on forecasting
Gold (top 1%), Silver (top 5%), and Bronze (top 10%) distinctions for official bragging rights
…In fact, rank-based payouts create significant incentives to bet differently from how you really think.
That is why I declined when the principal at my high school asked me to sponsor a team of students in a stock-picking contest. In real life, you should choose a diversified portfolio, in order to minimize risk for any given expected return. In a stock-picking contest with a limited play-money budget, you cannot win with a diversified portfolio. You need to plunge into the most volatile security you can find, and hope for the best.
Concerning ranked-choice voting (RCV), George Hawley writes,
After the second-place Republican (Nick Begich) was eliminated, his votes were then distributed to his voters’ second-choice candidate. It turned out that a substantial minority of Begich voters preferred the Democrat (Mary Peltola) over Palin, and between the voters that listed her as the first choice, and the Begich voters that listed her as the second choice, Peltola was the ultimate victor by a narrow margin.
This result has led to outrage from some Republicans, who can accurately complain that it seems wrong that about sixty percent of Alaska voters listed a Republican as their first choice, yet a Democrat managed to secure the victory.
…It is true that, between the two candidates, a majority of Alaska voters selected a Republican as their first choice. It is equally true, however, that many Begich voters preferred the Democrat over Palin. We can thus assume that, under the old rules, those voters would have cast the single vote on their ballot for Peltola, who then would have won the election. The problem for the Alaska G.O.P. was not RCV. Their problem was that Palin is a problematic candidate with a lot of baggage.
The NAHB index fell eight points to 38 in October – five more points than economists had expected. Index readings below 50 are considered a sign of negative sentiment among homebuilders.
I wonder if Kevin Erdmann still thinks that builders are more supply-constrained than demand-constrained.
The article says,
“The plunge in the NAHB index makes it clear that the reported jump in new home sales in September was much more noise than signal,” Shepherdson said in a note to clients. “In short, housing is in free fall. So far, most of the hit is in sales volumes, but prices are now falling too, and they have a long way to go.”
Years ago, I recall Robert Shiller saying that, generally speaking, nominal house prices do not fall quickly. Instead, we go through a long period of sluggish sales, with house prices not keeping up with general inflation.
I highly recommend the interview of N.S. Lyons conducted by Matthew of Ideas Sleep Furiously. It starts with Lyons’ view of the outlook for the Woke movement.
our culture seems to fundamentally have no conceptual defense against any claims made as calls for empathy and compassion, no matter how extreme, pathological, and indeed harmful. You can point to feminization as the root of this and may be right, but this also seems to point back to very deep (and twisted) Christian roots of wokeness.
Lyons also discusses China’s problems and his concerns with central bank digital currencies.
This is an unprecedented housing market that simultaneously has collapsing sales demand, construction demand still higher than capacity, and some evidence of falling prices.
On the price bit, I think there will be a lot of takes, even from insiders, that prices are declining more precipitously now than in 2006-2010 because builders learned their lessons. But the real reason for the difference is that we have been in a novel supply chain constraint context, which was associated with unsustainably high builder margins, and as declining demand softens the pressure on supply, builders can adjust back to normal margins in order to unload inventory. That's an entirely different issue than what happened in 2006-2010 when demand fell well below the capacity to build.
Here is an update on September construction: https://kevinerdmann.substack.com/p/september-residential-construction
Note that while single family starts have declined markedly from their highs, they have just now been reduced to a level slightly lower than current building capacity. And multi-unit starts continue to rise, even though starts are now and have recently been well above the rate of completions. Some funding constraints are probably hitting the single-family builders because of high rates, but multi-unit developers are moving full steam ahead.
Census numbers on September sales will be out soon.
It seems like the fundamental defense against spurious but compassionate claims is to reciprocate the compassion with more accurate claims.
Like... Black Lives Matter! Yes. One can quite easily turn that into an unobjectionable statement. Because Black Lives Matter, instead of Defunding the Police, we should be compassionate toward the (overwhelmingly) Black victims of crime, and help them, you know, not be victimized.