Picture of the Day: Capitalism is for People as They are

From a signboard of a combined Coffee Shop and Bar in Greenwich Village, NYC, as posted by New York University’s Development Research Institute’s Professor William Easterly on their blog.

Capitalism is indeed about real people.

Graphic of the Day: Thou Shalt Not Commit Logical Fallacies

A priceless advice..

courtesy of yourlogicalfallacy.com (hat tip Bob Wenzel)

Graphic of the Day: The Wonders of Capitalism: Dematerialization

From Marian Tupy of the Cato Institute

Dematerialization, in other words, should be welcome news for those who worry about the ostensible conflict between the growing world population on the one hand and availability of natural resources on the other hand. While opinions regarding scarcity of resources in the future differ, dematerialization will better enable our species to go on enjoying material comforts and be good stewards of our planet at the same time. That is particularly important with regard to the people in developing countries, who ought to have a chance to experience material plenty in an age of rising environmental concerns.

Maybe I am too much of an optimist, but dematerialization could also lead to a greater appreciation of capitalism. Namely, the “profit motive” can be good for the environment. No, I am not talking about dumping toxic chemicals into our rivers, which is illegal and should be prosecuted. Rather, I am talking about the natural propensity of firms to minimize inputs and maximize outputs. Take the humble soda can. According to the Aluminum Association, “In 1972… a pound of aluminum yielded 21.75 cans. Today, as a result of can-makers’ use of less metal per unit, one pound of aluminum can produce 33 cans.”

Aside from the benefits of dematerialization, consumer surpluses from the added convenience, connectivity and productivity or a better standard of living are consequences of one of capitalism’s key driving force: innovation.

The information age is bound to accelerate on the monumental transformations of innovation.

Graphic of the Day: Knowledge Problem

From my favorite graphic artist, the highly creative Jessica Hagy

Graphic: Endowment Effect

Another gem from my favorite cartoonist Ms. Jessica Hagy of Indexed, who creatively turns complex ideas into simple graphics.

Ms Hagy calls the chart below as “What would you grab if the house was on fire?”

I would say that this is a precise depiction or representation of the endowment effect bias (from changingminds.org)

When I own something, I will tend to value it more highly. If I have to sell it, I will probably want to ask more than it is really worth.

Picture of the Day: Capitalism

This picture practically captures the tangible benefits of capitalism to mankind…

…technology convergence, innovation, productivity impelled deflation et.al. Many gadgets of the past have now been bundled into one that serves to the convenience of the consumers.

Simply incredible.

Of course, the picture does not include the intangible benefits—the better quality of life from the services these gizmos have been providing us.

Professor Russ Roberts rightly calls this picture “worth a thousand words”. Indeed

Yet I am fortunate to have witnessed such progression in my lifetime.

And I further believe that the coming generations will see even more of this, in spite of the intense challenges posed by the archaic welfare based industrial age political system.

Graphic: The Insanity of Patent Wars

From Bloomberg/Businessweek.com (hat tip Scott Lincicome)

Apple v. Samsung may be the most prominent, but battles over smartphone and tablet IP are raging around the globe. A glimpse of some of the key cases to go before the International Trade Commission.

Resources and efforts meant for innovation and production has now been diverted and expended towards litigation and intense political lobbying.

Graphic: The Virtue of Failure

The incredibly creative Ms. Jessica Hagy has a great illustration of what I have been lately discussing about as the virtues of failure (which she calls 2nd (and 3rd, and 4th) chances are vital)

Bottom line: Failure, generally, brings about improvisation via learning.

(of course there will always be exception to the rule—as some people adamantly refuses to learn from repeated failures, mostly political authorities and their zealots. Albert Einstein called this insanity—doing the same thing over and over again and expecting different results.)

Graphic: Has Facebook been Reconnecting Past Colonial Ties?

Interesting observation from the Economist

The Economist writes

EIGHT years ago Facebook launched as an online social network connecting a small college community from a dorm room at Harvard University. Today the company has 845m active users across the globe and a wealth of data. One aspect of these data, which Facebook has shared with The Economist, shows a rough correlation between current global Facebook friendships and the old boundaries of once-mighty European empires.

The maps below rank 214 countries according to the strength of their ties to Britain, France, Spain and Portugal respectively. The darker the blue the higher the fraction of foreign Facebook connections with the imperial power in question. (Facebook has not shared the underlying percentage data, just the ranking.) These closely correspond to countries or territories which were, whether wholly or in part, at one point under British, French, Spanish or Portuguese rule, as seen in the bottom set of maps.

Australia, New Zealand and swathes of east Africa hold the strongest ties to Britain. West African Facebookers have most connections with France. Spanish-speaking Latin America is most strongly tied to Spain. Brazilians remain firmly linked to Portugal, as do people in Mozambique, Angola and Guinea-Bissau.

For the complete view of the graph, proceed to the Economist original site here

Graphic: Spending Patterns of Americans Over Time

Below is a sample from a deck of graphs depicting the intertemporal changes in the spending habits of Americans

Writes the Business Insider

HS Dent, an economic forecasting firm, compiled Census data spending behavior and presented them as demand curves, which measure average annual expenditure for a given product over age.

HS Dent's charts couldn't be more simple, but we can't stop looking at them. They offer an elegant glimpse into how spending really evolves over time.

Among the graphs, I like this…

…this seems true on my part (as the urge is there)

You can see the rest here or here

Graphic: A Valentine Day’s Card for the Economist

If you have an economist as a S.O. (significant other), don’t be surprised if he/she sends you a valentine's day greeting card with the following graphics…or you can send one.

There are 14 ways in graphs, how the economist express their love, check out the rest here (hat tip the Economist blog). [warning: the layman may find this boring!]

Graph of the Day 2: The Iranian Threat

From Lew Rockwell Blog

Graphic of the Day: Share of World Market Cap by Country

From Bespoke Invest

Just a reminder: The state of today’s global equity markets have substantially been dependent on central bank steroids, especially for major economies. This means that rankings of the share of market cap can drastically change when major shifts will be made in central bank policies. Of course, given the huge margin, US equity markets will remain the leader for sometime. The important point to observe will be the change in variance .

Graphic: “Fear Always Springs From Ignorance”

Another wonderful diagram made by the highly imaginative Ms. Jessica Hagy at the Indexed.

The diagram encapsulates one of my favorite quotes from Ralph Waldo Emerson “Fear always springs from ignorance”

The whole excerpt is from Mr. Emerson’s On the American Scholar, (bold emphasis mine)

In self-trust all the virtues are comprehended. Free should the scholar be—free and brave. Free even to the definition of freedom, “without any hindrance that does not arise out of his own constitution.” Brave; for fear is a thing which a scholar by his very function puts behind him. Fear always springs from ignorance. It is a shame to him if his tranquillity, amid dangerous times, arise from the presumption that, like children and women, his is a protected class; or if he seek a temporary peace by the diversion of his thoughts from politics or vexed questions, hiding his head like an ostrich in the flowering bushes, peeping into microscopes, and turning rhymes, as a boy whistles, to keep his courage up. So is the danger a danger still; so is the fear worse. Manlike, let him turn and face it. Let him look into its eye and search its nature, inspect its origin—see the whelping of this lion which lies no great way back; he will then find in himself a perfect comprehension of its nature and extent; he will have made his hands meet on the other side and can henceforth defy it and pass on superior. The world is his who can see through its pretension. What deafness, what stone-blind custom, what overgrown error you behold is there only by sufferance—by your sufferance. See it to be a lie, and you have already dealt it its mortal blow.

I don’t think this just applies to scholars but to anyone who undertakes the task of research and investigation.

Importantly, I would add passion to being ‘free and brave’ as ideal virtues.

My favorite marketing guru Seth Godin has a timely advice

Fear is the dream killer, the silent voice that pushes us to lose our passion in a vain attempt to seek safety.

While you can work hard to dream smaller dreams, I think it's better to embrace the fear and find bigger goals instead.

In working to attain our dreams, this means that we should become passionate with the pursuit of knowledge for us to overcome the barriers of fear and procrastination, as well as, in filtering out pretensions or politically slanted theories masquerading as reality.

Graphic: How Sustainable is Unsustainable

From xkcd.com (hat tip Mark Perry)

Infographics: All The World's Gold

Basic facts about gold in a splendid graph [Hat tip Zero Hedge]


From: Number Sleuth

Graphic: Home Bias

Another nice graphic depiction of the home from the ever imaginative Jessica Hagy

Graphic: Differences and Shared Interests of Occupy Wall Street and the TEA Party

A Venn Diagram showing the differences and shared interests of the Occupy Wall Street and the Tea Party movements

(hat tip Professor Steve Horwitz. Source here)

Graphic: Interpreting Reality

I am still working on normalizing my computer, so my weekly stock market posting will hopefully resume by next weekend.

For the meantime, enjoy this great graphic from David Shrigley at ilovecharts.tumblr.com, which I labeled as 'interpreting reality'.

Graphic: US Default Risk—Short and Long Term

Nice chart from Bespoke Invest on the risk of a US default, as measured by Credit Default Swaps—CDS).

Following the announcement of the debt ceiling deal, US CDS prices materially declined exhibiting an easing of default concerns.

It is important to point out that yesterday’s steep drop could be seen as ‘temporary’ relative to the 3 year trend (violet arrow), which reveals that the risks on the credit standing of the US has been on the ascent.

Nonetheless, last night’s debt deal has not helped US equities as the US S&P 500 slumped anew.

However, one would note that as US default risks have been on the rise over the past 3 years, so has gold prices.

So gold could partly be manifesting these concerns too (gold sizably declined yesterday in conjunction with the fall of US CDS).