April 16, 2014

Asians hate Miami

About three decades ago, a good friend of mine was sent by his company in Los Angeles to their Miami office for a couple of years. He reported back that was striking difference between the two warm-weather cities was the lack of Asians in Miami. 

That's still true: the 2010 Census found that Miami was 1.0% Asian, while the entire state of Florida was 2.4% Asian. That's the opposite of most places in America where urban areas are more Asian than the state as a whole.

It would be interesting to have a map of Oligarchic Money -- i.e., where in America do well-connected overseas insiders buy real estate to launder their money. For example, Latin American drug money gets parked in Miami. In LA, the Shah of Iran's pals started buying into the Hollywood Hills in around 1974, as did Arabs. On the other hand, there are very few rich Mexicans in Los Angeles: rich Mexicans go to Miami and (surprisingly) San Antonio.

Rich Chinese have been buying into San Marino and other places in the San Gabriel Valley since the late 1970s, but there are only a tiny number of rich Japanese (i.e., not Japanese-Americans) in Southern California. The Japanese love to visit Los Angeles -- when I was at UCLA a third of a century ago, Japanese tourists bought up most of the souvenirs at the UCLA bookstore -- but rich Japanese mostly live in Japan.

I've mentioned many times all the Eastern Europeans who have moved into Los Angeles, but I can't tell if there are many oligarchs the way wealthy Russians are common in London. A lot of Israelis seem to park their money in Los Angeles.
  

SAT: The new test hasn't been tested

Looking through the couple hundreds pages of verbiage that the College Board has released about their revisions to the SAT, I haven't found any evidence that they've tested the new test they've announced. It wouldn't be terribly hard to carry out research to see what kind of questions predict college performance best, but they don't seem to have done any research whatsoever involving potential questions. They've conducted various market research studies (focus groups, surveys, etc.) of what various people say they want in the SAT, but they have done nothing to see if what they've announced will actually work. 

There's an amusing irony here: the SAT is a test used to predict how individuals do. But, as for predicting how the predictor is going to work, well, we'll just have to wing it. This strikes me as fundamentally irresponsible -- nearly a couple of million kids per year take the SAT -- but all too typical of contemporary elites in America. 

Here's a revealing passage from the College Board:
The sat has been redesigned to better align to what research shows students need to know and be able to do in order to be prepared for college and careers. This goal has led to a more focused sat with a balance across fluency, conceptual understanding, and application. In these and other ways, such as embedding mathematical practices, the redesigned sat is also a good reflection of college- and career-ready standards. 
We will continue to be guided by research and evidence as we develop the redesigned sat. In the months leading up to its release, for example, we may find through research that we need to adjust elements described in this document, such as time limits, number of questions or tasks, or scores reported. When and if we make these or other changes, we will do so solely to enhance the validity evidence supporting the test for its intended purposes, and we will communicate those changes as widely as possible and in a timely manner.

In other words, the College Board is flying blind here. David Coleman feels like these are good changes to make, but nobody has actually tested the new boss's brainstorms. They may quietly deepsix some of the innovations. Or then again, they may find they have too much prestige invested in the "reforms" they trumpeted in 2014 to get rid of them, so they may keep them to avoid admitting mistakes. After all, they're just playing around with the lives of young people, so who needs to be careful?
Concordance 
Because the redesigned sat is a different test than the current sat, a numerical score on one test will not be equivalent to the same numerical score on the other. Therefore, to help higher education admission officers, k–12 educators and counselors, and students and parents transition to the new test scores, we will be providing a concordance between the scores on the current sat and the redesigned sat that shows how to relate the scores of one test to the scores of the other. ... The concordance information will be released immediately after the first operational administration of the redesigned sat in 2016. 

Ready, Fire, Aim.

The good news is that it's hard to screw up an IQ-type test completely. As Robert Gordon says, Life is an IQ test, and there are such large differences in IQ among individuals that just about any collection of questions will sort people in a rough rank order of smartness. But, still ... shouldn't we be getting smarter about intelligence, not stupider?
   

Births by race, 2011


Audacious Epigone tracks down births by race for 2011. You can see why Pittsburgh in western Pennsylvania has been getting trendy: it appears to be the natural capital of a large swath of white people in a region with few chain migration connections to Mexico.
    

Obama: As black as you want him to be

Here's an amusing survey from the Pew Research Center.

Obama himself chose to identify as Black Only on the 2010 Census.
     

Ukraine: Isn't it time for Obama to clear house?

With the danger that the pro-Russian revolt in Ukraine could spread to the important port city of Odessa, isn't it about time for the President to fire some of the people who helped get him into this mess? I can't imagine that high on Obama's list of second term priorities was Getting Humiliated in Eastern Europe. Firing officials to encourage the others is a good way to lessen how often your Administration gets hijacked by special interests and adventurers. Presidents don't know from Donetsk, but they need to establish examples for underlings that screwing up the foreign policy of the United States can screw up your career.
          

NYT: NYT has been misleading you about deportations

As a commenter suggests, there has been a lot of undocumented reporting on deporting.

The news section of the New York Times admits:
Court Deportations Drop 43 Percent in Past Five Years 
By JULIA PRESTON   APRIL 16, 2014

New deportation cases brought by the Obama administration in the nation’s immigration courts have been declining steadily since 2009 and judges have increasingly ruled against deportations, leading to a 43 percent drop in the number of deportations through the courts in the last five years, according to Justice Department statistics released on Wednesday. 
The figures show that the administration opened 26 percent fewer deportation cases in the courts last year than in 2009. In 2013, immigration judges ordered deportations in 105,064 cases nationwide. 
The statistics present a different picture of President Obama’s enforcement policies than the one painted by many immigrant advocates, who have assailed the president as the “deporter in chief” and accused him of rushing to reach a record of two million deportations. 

Isn't it time for an investigative report into the influence of second-largest stockholder and Mexican oligarch Carlos Slim on the NYT's editorial and news coverage of immigration? Slim profits exorbitantly on phone calls between the U.S. and Mexico, so he has a vested interest in having immigration restrictionists in the U.S. demonized and a distorted picture of immigration promulgated in the pages of the newspaper he bailed out in 2008.
  

Suppose they gave a World War G and nobody came?

From the NYT:
Ukraine’s Push East Falters as Militants Seize Army Vehicles 
By ANDREW E. KRAMER   APRIL 16, 2014

SLOVYANSK, Ukraine — A highly publicized Ukrainian Army operation to retake control of Slovyansk and other eastern cities from pro-Russia insurgents appeared to falter badly on Wednesday, with one column of armored vehicles abandoned to militant separatists and another ground to a halt by unarmed protesters blocking its path. 
The setbacks appeared to reflect new indecision and dysfunction by the interim authorities in Kiev, the capital, who have been vowing for days to end the insurrections in the restive east that they say have been instigated by Russia.  
Ukrainian news media reported that pro-Russian militias had commandeered six armored personnel carriers from the Ukrainian Army and driven them to the central square here in Slovyansk, about 120 miles from the Russian border. A crowd gathered to gape at the squat tracked vehicles and at the red, white and blue flag of Russia flapping in the breeze. 
About 100 soldiers in unmarked green uniforms, bearing no insignia but carrying professional infantry equipment, guarded the vehicles. They wore twirled around their right shoulder straps the orange and black ribbons that are a symbol of the Soviet Union’s victory in World War II, and now of Russia’s nationalist resurgence. Some of the soldiers had grenade launchers slung over their shoulders. 
Another Ukrainian armored column fared little better when its advance toward Slovyansk, which has been occupied by pro-Russian militants for days, was halted in a village to the south by a crowd blocking the road. By early afternoon, several hundred people were milling around the motionless column of 15 tracked personnel carriers, drinking beer and fraternizing with the soldiers. 
Initially, the soldiers tried to clear a path by firing in the air, residents said. One of the tracked vehicles rammed an Opel car parked in the road, shoving it aside. But the crowd did not disperse, and the soldiers adopted a passive stance, turning off their vehicle engines, climbing on top of their vehicles and removing the magazines from their rifles. 
   

The nonhunt for the Great Black Defendant

The New York Times has a long investigative report into the unenthusiastic year-long police inquiry into the allegation against 2013 Heisman Trophy winning Florida State quarterback Jameis Winston that he raped a 19 year old coed in 2012:
A Star Player Accused, and a Flawed Rape Investigation 
By WALT BOGDANICH

No charges were ever filed against the leader of the 2013 national champion Seminoles. As Tom Wolfe pointed out in A Man in Full in 1997, when a white coed charges a black Heisman Trophy candidate with rape, the local power structure, white and black, mobilizes to make the case disappear. 

It's interesting to compare coverage of this case to coverage of another Florida case, the Trayvon Martin-George Zimmerman story, which was always framed in racial terms of black and white (even though Zimmerman turned out to look kind of like the son President Obama never had). Similarly, the NYT's pet obsession, the Duke lacrosse rape hoax, was always depicted as racial.

In contrast, the words "black" and "white" don't appear in this article even though Winston is black. The word "blond" does appear once in the article, although anybody can dye their hair any color these days. Hunting around on the Internet, it took me a while to find anything definitive on the race of the coed. I finally came up with this bit in a CBS News article:
After being interviewed on Nov. 13, 2013, Ronald Darby signed an affidavit stating that while at Potbelly’s on December 6, “I watched Jameis talking with a white female that had blonde hair. It appeared that the female was pursuing Jameis."

Personally, I think the Jameis Winston case says an awful lot about race in the modern South, just as Wolfe did with his (quasi-)fictional version a couple of decades ago, but nobody else seems to think that angle is of the slightest interest.
     

April 15, 2014

World War T disappears up its fundamental aperture

Contemporary Who? Whom? thinking is highly appealing because it doesn't require reasoning from objective principles, which can make your brain heat up. All you need to know is which categories of people are on your team, and then you know who is right and who is wrong, because your team is good and the other team is bad.

On the other hand, there is also the urge to incorporate onto Your Team as baroque a set of teammates as possible to prove the undeniable goodness of your team, as exemplified by the ongoing World War T.

From the San Francisco Examiner:
Transgender, women’s rights advocate and prominent Twitter engineer charged with rape  
By Jonah Owen Lamb @Jonahowenlamb
A prominent advocate for transgender and women's rights in the tech world has been charged with raping her wife, The San Francisco Examiner has learned. 
Dana McCallum, a senior engineer at Twitter who speaks and writes about women's and transgender-rights and technology issues, was arrested Jan. 26 and booked into County Jail on suspicion of five felonies, according to the Sheriff's Department. 
McCallum, 31, who was born a male, openly identifies as a female and whose legal name is Dana Contreras, was charged Jan. 29 with five felonies, including three counts of spousal rape, one count of false imprisonment and one count of domestic violence, according to the District Attorney's Office. She has since pleaded not guilty. 
Despite the charges, McCallum's attorney, John Runfola, says the case is simply about money. 
"I'm just disgusted that, you know, this is going on," Runfola said. "Dana is an employee [at Twitter] and is about to come into a large amount of money. ... This whole thing is about money." 
The couple had been separated, he said, but were still having sexual relations. 
McCallum served her wife with divorce papers the day before the incident, Runfola said. ...
According to McCallum's profile on the online publication Model View Culture, for which she wrote about transgender people and women in tech in January 2013, "Dana McCallum has been working in software engineering and engineering leadership since 2000. As an advocate for women in technology and the LGBT community, Dana helped create advocacy teams at Twitter and other companies, served as a delegate on women's issues in India, and speaks regularly at events focused on women and LGBT people in tech." 
A December story in Business Insider listed McCallum as one of the most important gay people in the tech world. 

I don't want to be too graphic here, but this question is inevitable: Raped with what?
   

New, probably not improved SAT questions

Everybody complains about the SAT but nobody really explains why they are complaining (chief reason: their kids didn't get a perfect score), so "reforms" of the SAT traditionally flounder due to the general decadence of public thought in modern America. So, the latest changes in the SAT lack honest explication of what they intend to achieve.

As Herrnstein and Murray liked to point out, modern America is a rich place in part because we have standardized national tests in which small town boys like Murray and Jewish lads like Herrnstein could outshine the boarding school scions. America was particularly obsessed with finding talent for about a decade after Sputnik in 1957. But then along came civil rights and other obsessions, and the national clarity that was briefly achieved due to the fear of nuclear destruction has been eroded by wishful thinking and self-serving conniving.

We can hope that the College Board's Common Core wunderkind David Coleman knows what he's doing, but the whole topic of intelligence testing is so politically radioactive that we can't have an honest discussion in public of it.

From the NYT:
Revised SAT Won’t Include Obscure Vocabulary Words
By TAMAR LEWIN   APRIL 16, 2014

The College Board on Wednesday will release many details of its revised SAT, including sample questions and explanations of the research, goals and specifications behind them. 
“We are committed to a clear and open SAT, and today is the first step in that commitment,” said Cyndie Schmeiser, the College Board’s chief of assessment, in a conference call on Monday, previewing the changes to be introduced in the spring of 2016. 
She said the 211-page test specifications and supporting materials being shared publicly include “everything a student needs to know to walk into that test and not be surprised.”

Uh, why is it good that test-takers are not surprised? The surest way to make sure students aren't surprised is to release the test ahead of time. Would that be good? (In South Korea, moles within ETS apparently routinely release the upcoming tests to their test prep clients. Does that happen with the English language version in America?)

It's easy to yank Americans' chains with rhetoric that make lowbrow appeals to fairness. "It's just not fair that tests asks questions that students students don't already know the answers to!" Thinking through the implications of a particular methodology is hard, especially if you are disinterested, while emoting is easy.
One big change is in the vocabulary questions, which will no longer include obscure words.

I'm hoping that the College Board is worried that Tiger Mothers are forcing their children to memorize a couple of thousand SAT words. But it would seem like the way to fight gaming the system is to increase the number of SAT words, not decrease it. My vocabulary is generously estimated at 40,000 words, so it would hardly be absurd to have a pool of say, 10,000 words from which test questions are drawn.
Instead, the focus will be on what the College Board calls “high utility” words that appear in many contexts, in many disciplines — often with shifting meanings — and they will be tested in context. For example, a question based on a passage about an artist who “vacated” from a tradition of landscape painting, asks whether it would be better to substitute the word “evacuated,” “departed” or “retired,” or to leave the sentence unchanged.

Here's the sample question:
...As Kingman developed as a painter, his works were often compared to paintings by Chinese landscape artists dating back to CE 960, a time when a strong tradition of landscape painting emerged in Chinese art. Kingman, however, vacated from that tradition in a number of ways, most notably in that he chose to focus not on natural landscapes, such as mountains and rivers, but on cities.... 
A) no change
B) evacuated
C) departed
D) retired

So, that's less of a vocabulary question than it's a reading comprehension question or a writing style question. They've found a passage with a poorly chosen word and ask you to copy edit it by replacing it with a more obvious one. Which is fine. But ... big whoop. Both vocabulary and reading comprehension are both highly g-loaded. And that's good. 

But, if you've got two kinds of highly g-loaded questions, why throw one kind away and put all your eggs in the reading comprehension basket?
  
Another aspect of former McKinsey consultant David Coleman's changes are the McKinseyification of the SAT reading samples. I don't know if they can afford Malcolm Gladwell extracts, but one of the sample questions of vocabulary-into-reading-comprehension is from Dr. Vibrant, Richard Florida:
Everybody talks about the importance of "critical thinking skills," but Richard Florida's entire career is testament to how well you can do for yourself in 21st Century America without any.

Honestly, being able to grok Richard Florida's articles on the Rise of the Creative Class probably does correlate highly with making money in modern America.

From the LA Times:
"This test will be more open and clear than any in our history," Cynthia B. Schmeiser, chief of assessment for the College Board, said during a media briefing. "It is more of an achievement test, anchored in what is important and needed for kids to be ready and succeed in college. The process used to define what is being measured is radically different than what we've used in the past and what is used in other tests." 
The SAT is taken by about 1.7 million students annually but has been losing ground to the rival ACT, which is gaining nationwide acceptance after being more prevalent historically in the Midwest and the South. Many education experts view the ACT as more of an achievement exam, one in which students are less likely to be helped by coaching.

Does anybody know whether the SAT is more coachable than the ACT? My guess would be that, being traditionally the coastal test, while the ACT is the inland test, the big difference is that the SAT has more Asians taking it, which means it has more fanatical test prepping.

From the Washington Post:
For the College Board, the new SAT could help end the lingering public perception that the test is about IQ or aptitude. Previous revisions ditched analogies and antonyms — portions of the old verbal test seen as tricky and unrelated to what schools teach. Making the SAT more of an achievement test, one analyst said, could be a boon for students who stress about test preparation.

Nobody is even trying to make sense anymore.

We actually know how to make testing substantively more accurate: stop having paper and pencil tests and put them instead on a computer and have the computer change how hard the questions are based on how the test-taker is doing. A lot of major tests have shifted to that, such as the military's ASVAB back at the end of the 20th Century. But the College Board doesn't want to spend the money to do that yet.
     

Slate: "Yes, IQ Really Matters"

From Slate:
Yes, IQ Really Matters 
Critics of the SAT and other standardized testing are disregarding the data. 
By David Z. Hambrick and Christopher Chabris

A pretty good defense of the SAT, although in citing how well it predicts college grades, the authors don't emphasize the restriction of range issue enough. Colleges start out massively sorted by GPA and SAT/ACT scores, so studying the minor variations within the colleges misses most of the usefulness of test scores. They don't let kids with average SAT scores into Caltech, so they don't have any data points of average kids flunking out.

I'd like to see a correlation study of BYU, a Mormon college that has a wide range of SAT scores and, relative to other private colleges, a wide range of family incomes. (BYU charges relatively low tuition by having bigger class sizes.) BYU would be reasonably safe to study because race wouldn't be a big factor in the results.

Reading through the comments, I see that lots of people are convinced that the positive correlation between the socioeconomic status of parents and the child's SAT scores proves that colleges should junk the SAT and only rely on GPA, extracurricular activities, essays, and so forth. But are those other measures all that independent

A friend of mine over the last half century was a B- student in grade school and high school -- one of a big family of a widowed mother, who was working too hard to keep them fed to have time to make sure he did his homework. But he was always obviously the top math student in our class, even if he didn't do his homework. He got a 790 on the SAT - Math. Went to Berkeley (you could do that back then before you needed a >4.0 gpa to get in) and got a BS and MS in Chemical Engineering. Went into computer networks in the 1980s and made a fortune in the 1990s.

To generalize wildly from that anecdote, it strikes me that all the folks who complain about SAT scores correlating with socioeconomic status should look into how much GPA, especially GPA correlated with high school difficulty, correlate with socioeconomic status.

Along these lines, allow me to give away my son's killer idea for a business: the School Project Store. It opens every evening at 8pm, about when students first mention to their parents that they have a huge project due tomorrow morning, so could you drive me to Staples to get a tri-fold board, a glue stick, and some colored paper?

In the future, however, well-heeled parents will just drive their children to the School Project Store where consultants, such as empty-nester parents who have been through the school project wars over the years, will be waiting to listen patiently. The completed school projects can be picked up on the way to school at 8am.

C'mon, you know this business idea will make millions.

Of course, bricks and mortar retailing is so 20th Century. The real fortune will be made off a smartphone app called Glustik. Empty nester parents with houses full of leftover school project supplies will bid to be the lowest price provider of overnight school projects on emergency requests by rich parents. It will be disruptive!
   

Tracy Morgan's back

Tracy Morgan on free speech:
 A. Nowadays people take themselves way too seriously. 
Q. Is that what happened in 2011, when you were criticized for a routine in which you said you would stab your son if he came out as gay?
A. That’s what I thought I was doing, but it was taken out of context. No matter what, if my son was gay, I’d treat him like a king. I wasn’t trying to say that’s how I felt. 
Q. What did you learn from that?
A. I learned that things are different now. Would Richard Pryor be able to survive now? Would George Carlin be able to survive now? Would Sam Kinison be able to survive now? Would Lenny Bruce be able to survive now? I don’t know. Everybody is supersensitive. We have freedom of speech, but you got to watch what you say. 
Q. Do you think the Internet has made things worse for comedians?
A. Bad news travels at the speed of light, good news travels like molasses. People bring camera phones into comedy shows and clubs and concerts, and sound bites never come out right.
 

April 14, 2014

Germany, U.S., Spain: Unemployment and Immigration

Economist Scott Sumner offers some learned macroeconomic theorizing on 
Germany's mysterious recovery 
Scott Sumner 
In the past 10 years Germany as gone from being the "sick man of Europe" to the star of the eurozone. This partly reflects the strong job creation that preceded the recession, perhaps due to the labor market reforms of 2003. However the post-2007 performance is even more amazing. There was almost no increase in unemployment during the recession, and the unemployment rate has fallen to relatively low levels during the recovery.

Why has Germany's unemployment rate fallen 3 points since the end of 2007, while America's is still 2 points higher?

I would suggest that one straightforward clue can be deduced from looking at population changes from 2000 to 2008 (assuming Google's handy time charts can be trusted)

Germany's population fell by about 100,000 (-0.1%) from 2000 to 2008. Germany used to have a lot of immigration from Turkey, but the country has been quietly cutting back on that as it turned out that the Turks quickly stopped working and went on welfare. Ironically, some of the denunciations of Thilo Sarrazin's bestseller against mass immigration, Germany Abolishes Itself, no doubt came from insiders who agreed with it but didn't want to draw attention to the fact that they'd been implementing some of it avant la lettre.

In contrast, the population of the U.S. grew by about 21,800,000 from 2000 to 2008 (+7.8% in just 8 years).

Even more strikingly, Spain's population grew from by 5,200,000 (+13.1%).

During the 2000 to 2008 period, in contrast to tightening-up Germany, the U.S. and Spain both had similar immigration policies focused on importing large numbers of Latin Americans. The Spanish theory was that they would get better Latin Americans than the Americans because the Latin immigrants already spoke the national language of Spain so they would be more economically productive faster. Also, because it's more expensive to get to Spain from Latin America, Spain expected to get a higher class of Latin American immigrant.

These Spanish immigration ideas actually seem pretty sensible compared to the lowbrow, emotional American views, as enunciated by President Bush in a Presidential Debate in 2004:
"... you're going to come here if you're worth your salt ..."

But, being slightly smarter about immigration than George W. Bush hasn't saved Spain from catastrophe. Currently, the unemployment rate in Germany is 5.1% and in Spain it's 25.8%.

Obviously, there are a lot of other things going on in these comparisons, such as the Euro.

But, just looking at these very simple numbers explains a lot.
     

April 13, 2014

Great moments in Community Fulfillment

From Lost Bank by Kirsten Grind, the story of Washington Mutual (a bank I profiled at length in VDARE in 2009), here's an account of WaMu's President's Club mortgage sales conference in Hawaii in 2006:
Meola's next award recipient was Tom Ramirez, a WaMu loan consultant who had become a mortgage lender legend in Southern California. Ramirez worked out of WaMu's office in Downey, a largely Hispanic neighborhood of cracked sidewalks and graffiti-marked homes, east of downtown Los Angeles. WaMu called the Downey officer a Community Fulfillment Center, the bank's name for home loan branches that served minority communities. Those centers often used even looser guidelines for making loans, allowing lower credit scores and less income documentation. Ramirez specialized in Option ARM lending.  
... He had pioneered a program that allowed real estate agents to collect referral fees for sending clients to WaMu. Those agents made 1 percent off the total loan cost, which the borrower paid at closing. (Whether the borrower knew this remains unclear.) Real estate agents loved the idea. They arrived in Downey from all over Los Angeles with loan applications. Because the program proved so successful, Wa Mu expanded, filling a neighboring building with more loan processors. 
At WaMu ... also had a stellar reputation. ... [CEO Kerry] Killinger had singled him out for praise, lauding his work with minority borrowers. ... Ramirez and his loan consultants wanted to approve borrowers with lower FICO scores, bypassing a senior underwriter's approval, and allow assets to count on a loan application, even if they weren't yet in a customer's account. By counting money in a bank account before it was deposited, for example, a customer might qualify for a loan even if the money ultimately didn't show up. [COO Stephen] Rotella didn't think Ramirez's demands were unreasonable. "I met them last year and I was so impressed, I suggested we use them to spawn similar operations in Hispanic communities across the U.S., if possible using them to model, train, and certify the work," Rotella write in a glowing e-mail about Ramirez and his team, which also questioned [David] Schnieder for failing to meet the group's demands. "Frankly, not much has happened," Rotella wrote. "We should fall all over ourselves to have a business segment that attracts minorities, is almost all Option ARMS, is not price driven, delivers great quality, and is oriented toward the average guy, our market." 
For 17 straight years, Ramirez had received one of the highest honors at the President's Club, the number-one loan consultant. He had funded more units than any other WaMu office nationwide. In 2005, he made more than 2300 mortgages, a feat announced that night at President's Club. ... 

At prices prevailing in 2005 at the peak of the bubble, 2300 mortgages would be about $1 billion dollars. That's ten million dollars in kickbacks paid to real estate agents.
"In our world of superstars, he is bigger than a Brad Pitt, George Clooney, or Tom Cruise. He's at the Henry Fonda, Burt Lancaster, John Wayne legendary status," Meola said in announcing Ramirez's award. 
Several months earlier a disturbing internal report had come out about the quality of the loans made in the Downey branch, as well as that of another Community Fulfillment Center in the neighboring East Los Angeles city of Montebello. For three years, rumors had circulated at WaMu about fraud in the two locations.

Never trust Montebello. I had my 7 and 9-irons stolen at the Montebello municipal golf course ten years ago. I've often left a couple of unused irons on the tee of a par 3 like that, but every other time some fellow golfer behind me brings them along. It's not like a couple of random golf clubs are worth much to the thief (but it's very expensive for the victim to replace them with clubs that match the rest of his set). Montebello is the only golf course where my clubs have vanished.
... In the summer of 2005, WaMu launched a review of the mortgages made in Downey and Montebello. The review found an "extensive level of fraud," as was later noted in an email circulated among mangement. Among the hundreds of loans that borrowers had received from the Downey office in the previous two years, nearly half contained fraud. At Montebello, fraud rates exceeded 80 percent.

Not too mention golf club theft rates. But I'm not bitter ...
All of it, the reviewer wrote in the email, was "attributable to some sort of employee malfeasance or failure to execute company policy." The fraud was outrageous, even in the age of bloated incomes on mortgage applications and false bank statements.  
On one loan application, everything about the buyer was made up ... "The credit package was found to be completely fabricated," the review concluded. ... 
The fraud report had come out not long before President's Club, yet here was Tommy Ramirez, the top producer not only in the Downey office but in the country, walking up on stage to shake Killinger's hand accept his trophy. Of loans that had been referred to Ramirez, 58% contained fraud, a rate that one WaMu executive would later describe as "eye-popping." 
Luis Fragoso, another high-volume loan consultant at the nearby Montebello office, posted a fraud rate of 83% for loan referrals. He was also honored at President's Club. 

Not the Montebello Municipal Golf Course
I'd assume Fragoso was the guy playing behind me at the Montebello muni who stole my clubs, except he probably plays only at the Fazio-designed Ocean course at Pelican Hill.
"No one in history has put more people into their first home," said Meola, up on stage. "Please put your hands together for an extraordinary man, Tom Ramirez!" The audience cheered. In 2005, WaMu made $3.4 billion in profit.

Of course, a lot of that "profit" was not exactly cash flow, but was instead deferred interest on negatively amortizing Option ARM mortgages.

Here's another classic WaMu TV commercial from the series that was playing on TV as they went belly-up.
     

Dogs: Nurture or Nurture?

From the New York Times, an amusing quasi-self parodistic article about people who have more parenting drive than actual children to expend it upon. 
You’ll Go Far, My Pet 
Dog Feats Reach New Heights 
By DAVID HOCHMAN   APRIL 11, 2014

Not to brag, but we may have a little genius on our hands. Our 6-month-old is up before dawn playing brain games. She knows her way around an iPad and practically devours puzzles, and I’m teaching her to read. Just recently, she mastered an advanced chess toy. 
I am talking, of course, about our dog. 
Let me rewind a moment. The last time I had a puppy, I was 9 years old. This might as well have been in the Mesozoic era, since life with a dog was so primitive then. If Buck was good, he got Gaines-Burgers and maybe a Milk-Bone. Bad, we’d deliver stern admonitions over the half-eaten sneaker. But within hours of adopting our fuzzy, adorable Pi, I sensed that being a pet parent today — nobody uses the word “owner” anymore, apparently — means cultivating intelligence, manners and communication skills the way the parent of, say, a small human might. 

Kant argued for treating other persons as ends and not merely as the means to our own selfish ends. It's fascinating how so many people have internalized that when it comes to their pets.
Our canine compadres no longer eat from mere bowls. Now there are interactive feeding products like Dog Twister (imported from Sweden, no less, for around $50), with rotating hidden compartments that make dogs reason their way to kibble. Another, called Slo-Bowl, pays homage to the artisanal food movement, with “nature-inspired” rubber curves and ridges that keep dogs “foraging for every bite,” the company’s website says ($20). A doggy tick-tack-toe puzzle from Petco encourages “problem solving” and increases “eye-paw-mouth coordination,” for $17. Smartphone apps like App for Dog, iSqueek and Answers: YesNo let puppies doodle, nuzzle virtual chewies and even recognize a few simple words. Others help them take selfies. Then there is the spreading quantified dog movement: A San Francisco company called Whistle Labs makes a wearable activity monitor — a Fido Fitbit, basically, for $129 — that tracks a dog’s every sit, stay and roll over. 
Needless to say, I bought it all. My wife and I were already micromanaging our son’s schoolwork, food intake, extracurricular activities and playdates; why not helicopter Pi to the far limits of her breed? Which, come to think of it, meant figuring out what breed she was in the first place: Mutt doesn’t quite cut it these days. For $70, the scientists behind Wisdom Panel 2.0 will “uncover DNA-based insights that may help you understand your dog’s unique appearance, behaviors and wellness needs,” according to the package. Two awkward cheek swabs later (“I’ll hold her head, you twirl the Q-tip thingee,” my wife said), we were a lab test away from knowing Pi’s pedigree down to eight great-grandparents. 

I'm struck by how there is absolutely no mention in this article about the possibility of using all this data now available to improve dog breeds. It just doesn't come up. After all, that's part of "the pseudoscience of eugenics," so scientific breeding is, by definition, unscientific. So, nobody at the NYT level of society thinks about breeding dogs for better functionality. How about an Apartment Dog with a big bladder who only needs to be walked once a day?

A lot of 95 IQ people today think hard about breeding dogs to make them conform even more to the American Kennel Club standards, but at the better educated levels, an interest in animal breeding today is just an idiosyncrasy. (It's tolerated in high-functioning autistic professorTemple Grandin because she's an oddity.) It's not like the days of Darwin and Galton when breeding was a central obsession of the best minds of the age.
A new dog is nothing if not a mystery shrouded in fur. What exactly was lurking behind Pi’s smoky eyes? Would she be a charmer, a rocket scientist or a bumbling, tail-chasing dolt? For answers, I turned to Brian Hare, an evolutionary anthropologist who studies behavior at the Canine Cognition Center at Duke. Last year, he started Dognition, a web-based testing service that charges $29 and up for a series of rigorous at-home video experiments to evaluate your dog’s cognitive skills. The results are fed into a database with tens of thousands of dogs to determine one of nine personality types: “socialite,” “maverick,” “renaissance dog” and so on. ...
We spent weeks looking for such evidence in Pi. Night after night, my 10-year-old son, Sebastian, and I turned our living room into a makeshift doggy science lab as we took Pi through dozens of assessment drills on Dognition’s website that measured empathy, communication, cunning, memory and reason. I would cue up the video instructions as Sebastian readied the treats. The yawn game gauged whether a human yawn elicits one from the dog, a sign of interspecies empathy only certain canines are known to display. Pi wasn’t among them. She just tried to eat the sticky note that was her placekeeper. She fared better at the memory game that asked her to find a treat hidden under a cup after a minute looking away. But then she wouldn’t stop gnawing on the cup. Her Mensa move came in a physical reasoning game in which she inferred time and again that a piece of paper on an angle meant a treat was hidden behind it. Pi grabbed the square of organic white Cheddar and left the paper. 
... Mr. Pilley told me, “The big lesson is to recognize that dogs are smarter than we think, and given time, patience and enough enjoyable reinforcement, we can teach them just about anything.” 
It’s true that dogs everywhere are doing things that would have been unimaginable in the Alpo era. Last year, researchers at the University of Pennsylvania’s Working Dog Center trained a team of shepherds and retrievers to sniff out lab samples containing ovarian cancer. Scent hounds are also being used to forecast epileptic seizures and potentially life-threatening infections. A black Labrador from the St. Sugar Cancer-Sniffing Dog Training Center in Chiba, Japan, was accurate 98 percent of the time in picking up early-stage signs of colon cancer. As Mr. Hare, from Duke, said, “I will take a dog smelling my breath over a colonoscopy any day of the week, even if it’s just an experiment.”

This is the umpty-umpth article I've read about purported cancer-sniffing dogs. Is this for real? Would it be useful in poor countries that can't afford expensive mass cancer screening programs like a colonoscopy every decade? I don't know the answers to those questions, but what I'm struck by is how none of the articles I've read about cancer-sniffing dogs have ever mentioned the idea of breeding the best ones together to develop a new breed specializing in that seemingly valuable task.

Can you imagine if Francis Galton had accumulated a folder of clippings about cancer-sniffing dogs?
 

April 12, 2014

Great moments in marketing research: WaMu's focus groups

From the 2011 book Lost Bank by Kirsten Grind about Washington Mutual, which collapsed spectacularly in 2008: In mid-2003, a market researcher named Kevin Jenne is sent to Orange County and Illinois to conduct focus groups on WaMu customers who had recently acquired Option Adjustable Rate Mortgages. These allowed borrowers to choose anything from 15 year fixed repayment to letting them pay only 1% interest for five years while the principal "negatively amortized" (and then the hammer would come down around 2008 when the interest rate reset to the current index and the principal left to be paid off was larger than when they started). Jenne's assignment was to study these Option ARM borrowers to learn how to persuade more people to get Option ARM mortgages.
The 31 people who attended the dual sessions had two things in common: all of them held Option ARM loans, and few, if any understood what that meant.  
Jenne listened patiently, as, over and over again, the borrowers described what they believed to be their loan terms. They had gleaned startlingly few details about their loans from the mortgage broker or the WaMu loan consultant who had helped them through the process. Most of them knew they held adjustable-rate loans. They also thought the loan was cheaper than a regular mortgage, because they didn't have to pay as much each month. Approval hadn't been a hassle, the customers said -- WaMu had required little paperwork or income documentation. That's where their knowledge stopped. "From their perspective, it was a low payment loan, and that's all it was," Jenne said. "No one understood the option thing." 
Some of the borrowers in the focus groups were first-time homebuyers, still awed by their new ability to capture the American Dream. Recently, President George W. Bush had announced plans to increase minority homeownership by 5.5 million people, piggybacking on the goals of his predecessor, President Bill Clinton. "We want people owning something in America," Bush declared at an expo in New Mexico. "That's what we want. The great dream about America is, I can own my own home, people say."

In reading Bush's minority mortgage speeches denouncing redlining, downpayment requirements, and onerous paperwork requirements such as pay stubs, a recurrent phenomenon is Bush's Yoda-like reverse syntax. Did Bush always sound like this, or just on the topic of minority mortgages?
The focus group borrowers, some of them members of minorities, were effusive about their buying power. "They had been told by so many people that they couldn't afford one," Jenne said. Now they could. 

According to the federal Home Mortgage Disclosure Act database that exists to make sure minorities get enough loans, over half of the dollars lent in Orange County in 2003 by Washington Mutual's subsidiary Long Beach Mortgage went to Hispanics.
Few of them understood what negative amortization meant, or that it could make their debt grow in the long run. ...  
Half an hour into the first session with borrowers in Orange County, Jenne could tell that quizzing these people on their loan terms was futile -- they didn't know their loan terms. He got up, excused himself, and left the room. ... Jenne walked into another room at the sterile interrogation facility, behind a two-way mirror, where two mortgage production employees from the Home Loans Group had been observing the discussion. ... "I don't think we're asking the right questions," Jenne told them. The questions he had put together seemed useless. But the mortgage employees disagreed. They wanted him to ask about indexing, even though the customers barely understood interest rates. "Find out what the index means to them," they instructed Jenne. 
... He asked the group of borrowers: "How does your interest rate change?" 
No one responded. 
"It changes, right?" Jenne probed. 
The borrowers looked around the table at one another. Finally one said, "Yeah, it changes." 
"I think it's indexed," offered one woman. 
"Yeah, yeah, indexed!" agreed another. They had answered a question correctly! 
"Well, what's it indexed to?" Jenne asked. 
Another long awkward pause ensued. 
"My loan is indexed to the Nikkei," proclaimed one borrower. 
Another long, awkward pause ensued. 
"Your mortgage is based on the Japanese stock market?!" Jenne thought to himself. "Of course I didn't say that, he said later. "But I'm going, 'Oh, my heavens.'" Strangely, in another focus group, in Illinois, another borrower also believed his loan was indexed to the Nikkei. Jenned never discovered where borrowers had received that information. "I don't think they were being told this by someone," said Jenne. "I think that the only index they had heard of, like on TV or something, was the Nikkei. It was just bizarre.
The borrowers did seem worried about the loan terms. One of them said, "It's really scary to me what's going to happen in five years." Another echoed the same sense of foreboding with a slightly more compressed time frame. "Something terrible happens in three years." Said a third borrower: "I'm a little nervous about it. I have this feeling of impending doom. It's almost too good to be true."
On the other hand, the borrowers seemed comfortable in their ignorance. "Despite their lack of understanding, participants were almost universally happy with their loan choice," the report noted. ...
The Home Loans Group wanted Jenne to recommend ways to market the Option ARM. So, Jenne and his team noted in their follow-up report that the best way to off-load the product onto customers was to tell them little about it. That avoided the problem of complicated loan terms and words that no one understood. "Focusing on the right 'need to know' information is critical to developing more Option ARM sales. Participants seemed easily overwhelmed by the product details," the report concluded.
... Jenne came to believe that the Option ARM wasn't just a bad idea -- it might be evil. "After awhile, I lost that feeling," Jenne said. "Then I came back to it later on. And then I thought, 'No, no, this product is definitely evil.'" 
Whether or not [CEO] Kerry Killinger saw Jenne's research on America's hot new mortgage product -- and it's likely that he didn't se it -- WaMu doubled its annual Option ARM production to $68 billion in one year. By early 2005, WaMu promoted its loan as its "signature mortgage." It made up more than 25% of all the mortgages WaMu made or purchased.

A few observations:

The vast Mexican surge into places like Orange County over the last few generations represented basically Fresh Meat to exploit for Newport Beach MBAs with spreadsheets. When you hear the Donor Class of the GOP talking about the need for "immigration reform," that's what they mean: more Fresh Meat.

These dialogues capture quite well the happy-go-lucky agreeableness combined with an aversion to hard mental effort that are a trademark of Mexican-Americans in Southern California (and perhaps elsewhere). When Michael Barone talks about Mexicans as the New Italians, he misses a key distinction: Italian-Americans tend to be suspicious and pessimistic. They put a lot of cognitive effort into trying to understand why this too good to be true offer is too good to be true. They save a lot because they expect the worst.

Mexican-Americans tend to spend a lot because they expect the worst, but it would also be too much work to figure out what might happen, so why not have a good time now?
         

April 11, 2014

Volunteer Auxiliary Thought Policeperson reporting for snitch duty

Yesterday in "Who, Whom, Humor," I mentioned an NYT article about a sophomoric commuter college humor newspaper written by sophomores, the San Diego State Koala. Here's the "most recommended" of the Reader's Pick comments:
Liz    Chicago Yesterday 
The fact that the writers of the Koala will not print their own names on the byline suggests that all involved with the publication realize that the articles are sufficiently offensive that they might negatively affect future job prospects. If people wish to limit the scope of the Koala a simple strategy would be to provide the social feedback that the writers fear: set up a webpage linking their names to the articles. Free speech is protected by the Constitution, as it should be. Anonymity is not. 
105 Recommend

I really think we need some in-depth research into what kind of person wants to ruin the lifelong careers of teenagers by making sure their Permanent Records highlight any and all youthful indiscretions against the current and future rules of political correctness.

Were there always huge numbers of people like this out there before social media came along? Or does the new digital technology excite them and exacerbate their worse tendencies? Did the Obama 2012 campaign intentionally encourage them? 

It would be a pretty easy experiment for psych professors to survey students to see who thinks it's a great idea to join the Volunteer Auxiliary Thought Police. What are their demographics? Why are they so hate-filled toward people who get more fun out of life?

The Clash's 1979 song "Clampdown" gives us a pretty persuasive picture of the kind of guy who would bully political dissidents for a paycheck, a cool uniform, and the enjoyment of humiliating somebody face to face:
They put up a poster saying we earn more than you!
When we're working for the clampdown ...
You grow up and you calm down
You're working for the clampdown
You start wearing the blue and brown
You're working for the clampdown
So you got someone to boss around
It makes you feel big now
You drift until you brutalize
You made your first kill now

But the Liz in Chicago types have somewhat different motivations. They deserve careful study. 
        

Charles Murray's advice book is out

At Amazon:
The Curmudgeon's Guide to Getting Ahead: Dos and Don'ts of Right Behavior, Tough Thinking, Clear Writing, and Living a Good Life