Monday, March 30, 2009


Finally today I got the key to my office and Snork Maiden and I moved some of my books and files in there this evening. My computer should be set up and in situ tomorrow. I still don't have a contract or a university ID that will let me access the library databases but I should soon... I'm also going to try to get a better chair. Looks like I might be able to just go buy one and claim reimbursement from my project funds. As I mentioned a while ago I had back problems last year and bought a new chair for home use. I don't want to risk the same kind of injury by sitting in an unsuitable chair. Hopefully I can do this without some bureaucratic requirement for a health and safety person to assess my needs...

Moominvalley, 2612, ACT, & Australia

Continuing the series on income and tax in the ACT and Australia, today's post compares the averages for "Moominvalley" (Moom's and Snork Maiden's average per person) in 2007-8 with the averages for our postcode, our state, and our country in 2006-7:

We earned a lot less than average in 2007-8 than these regions did in 2006-7. In terms of total income though we earned $36.7k compared to the Australian average of $43.5k. Fortunately we paid a lot less tax both absolutely and in percentage terms - just $3.5k in net tax (9%) compared to the Australian average of $9.7k (22%). The postcode average was 24% and ACT 23%. We got more imputation credits (for corporation tax already paid on dividends received), more capital gains, and much larger deductions than the averages for all these regions. All these reduced our final tax bill. We claimed particularly little in work-related expenses, however, as Snork-Maiden's employer is very generous in covering costs on business trips and she gets a laptop from work that covers her computing needs at home too. I claimed investment expenses instead of work-related expenses. Work-related expenses are employee, not business expenses. So they are really rather high as an average in Australia...

Sunday, March 29, 2009

Sydney Trip

Most of last week we were on a trip to Sydney together with the "Snorkparents". The picture is the view from Watson's Bay of the Sydney CBD. Snorkdad said "Hong Kong" when he looked at this view and I replied "bu shan" (no mountain). I took them (while Snork Maiden was at her conference) on a trip to Circular Quay on the ferry to Watson's Bay, on a walk around South Head, fish and chips lunch, bus to Bondi Beach (snoozing in the sun for them and swimming for me) and back to the city. We are getting quite good at a few words of Chinese and English and lots of gestures. On Thursday I gave a presentation at the University which went well until someone asked a question I wasn't prepared for about stuff I haven't done yet but plan to do and my mind froze. I did manage to partly answer his question in my answer to the next question. I didn't get a good impression of the department though and all of us feel glad to be back in Canberra and don't relish the idea of living in Sydney. So maybe it's all for the good... Sydney's a great place to visit (apart from scratching the car in a parking garage and getting a parking ticket).

I also attended a few presentations at the conference Snork Maiden attended including one by a famous economics blogger. It was OK but Snork Maiden thinks he's better on his blog :)


Snork Maiden just heard that she got accepted for a two week course in England - only problem is that is the second two weeks of June. And the meeting in Italy is the last week of May. I won't hear till Wednesday about the paper I submitted to a conference in Venezia in mid June and about a conference in the Netherlands till April 17th. Unfortunately, Snork Maiden wouldn't be able to come to Venezia with me. We'll have to see what Snork Maiden's supervisor thinks about such a long absence too... But soon we'll have to start booking flights and getting visas for her.

Friday, March 20, 2009

2006-7 Income and Tax for the ACT and Australia

Following up on Friday's post I've calculated the per capita breakdown of different income sources for all ACT postcodes and Australia as a whole:

I included both taxable and non-taxable individuals in my numbers - but total is still much less than the total population. For Australia the total is 11.8 million vs. about 21 million people in Australia. There is a lot one could learn from this data, so here are just some points that caught my attention:

1. As is well known the highest income ACT suburbs are all in the "Inner South" surrounding the parliamentary triangle. The poorest postcodes are all in Tuggeranong and Belconnen with Gungahlin also having lowish incomes. These are all outer suburbs. This is the standard Australian pattern of the rich living near the centre and the poor in the outer suburbs. The 2601 postcode though is strangely not so wealthy. I think this is because it not only includes the CBD but also the ANU campus with its student population.

2. Even the poorest ACT postcode, 2911, has a higher income than the Australian average.

3. Landlords on average lose money in all ACT postcodes and in Australia as a whole. Rental income is for some reason unusually high among Gungahlin residents.

4. Not all income sources are included as the numbers for individual sources do not add up to the totals.

5. Capital gains, not surprisingly, are very concentrated in the two highest income inner south postcodes (and Hall - a rural village in the ACT).

6. Business income from primary production (agriculture, mining etc.) is negative in almost all postcodes and in Australia as a whole. Not surprisingly it's concentrated in Hall and Pialligo. But non-primary production business makes money on average in all postcodes.

I'll be continuing this series with at least a couple more analyses.

Annual Australian Tax Statistics 2006-7

The annual report on Australian tax collections has just been published by the ATO. It's just crazy that "the vast majority of people use a tax agent" to submit their tax return in Australia. The Moomin household is in the 11.8% who submitted a paper return (well we didn't pay tax in 2006-7 of course, so in 2007-8 that percentage would likely be even lower). That's because e-tax only runs on Windows (and I think you also needed to have submitted a return in the previous year).

Otherwise, I'll confirm that we don't live in either the richest or poorest postcodes mentioned in that article :) In our neighborhood mean taxable income was $61,000 which was more than taxable income, let alone mean taxable income (see Moom's taxable income and Snork Maiden's taxable income - there is no such thing as a "joint return" in Australia). The raw data is available here.

Tuesday, March 17, 2009

Credit Suisse/Tremont Hedge Fund Index Again Impacted by Rogue Fund

The final Credit Suisse/Tremont numbers are in for February with the index losing 0.88%. In a replay of the Madoff scandal, equity market neutral index was down 5.61% partly due to the WTGC scandal. What is it about "equity market neutral" that attracts the scammers?

HFRI is down 1.13% for February and their equity market neutral index is down only 0.76%. HFRI is an equal weighted index of 2000 hedge funds. So no single fund impacts it much and I don't know if this WTGC thing was even included.

Monday, March 16, 2009

Book Review: Tim Ferriss - "The 4-Hour Work Week"

Snork-Maiden somehow convinced her employer to buy this book for their library :) I have mixed reactions. It's not one of these books that just drearily pads out a single idea in to book length format like Zilliak and McCloskey. So that's good.

1. I'm all for the don't defer life approach. Instead try to make money at something you like to do anyway and have fun doing it. That's pretty much what I've done most of my life as much as I can, so no problems with the basic premise.

2. Then there is stuff on focusing and cutting out useless or less useful work. This is good in principle.

3. "Low Information Diet". Taleb also says he doesn't read newspapers. This is a non-starter for an economist like me who is expected to have an opinion on what is happening in the political and economic spheres. Well anyway I enjoy reading news and opinion. I occasionally read fiction but prefer to read current affairs stuff for fun. I'm a social scientist. But there is another problem with it which also features in the next item...

4. "Interrupting Interruption and the Art of Refusal". It's certainly good to think about how to streamline routine interactions with people. But if you did half of what Ferriss suggests you'd come across as a total jerk who I wouldn't want to do business with. People who seem to have no interest in anyone else. And, though many meetings and interactions are a waste of time, you never know what might happen just as you never know what you might read that might be useful and give you a great idea. In other words, you need to be open and receptive to "positive Black Swans" not be some narrow-minded overplanning idiot.

Of course, what works for you will depend on what your personality type is. In the Myers Briggs system I guess that Ferris is an INTJ - Introverted, intuitive (but could be S sensing), thinking, judging. Certainly not an E-P (extroverted, perceiving) type who is open to learning and adapting to experience. Well, that's the impression his book gives.

5. The core of the book is very detailed information about setting up an internet based business which looks like it would be very useful for someone who wants to do that. It's never interested me enough to want to do it. So this section eventually got me rather bored and skimming through. My life has been based around being an employee who is least like an employee. The ultimate job I found was being a research only academic. In many ways that is great on the other hand I found myself getting stressed out worrying about how I could justify myself receiving money from the government as salary at times when my research wasn't going well. But that's because I am very conscientious. For someone like Ferriss who is willing to pretty much cheat to achieve his goals (i.e. his method of dehydrating to get into a very low weight class in Chinese kick-boxing and then inflating up again before the fight) it wouldn't be a problem. Being a trader also sounded cool but turned out to be hugely anxiety producing and not suited to my personality really.

6. The final part is all about planning travel and international relocation. I'm pretty much an expert at the latter so I skimmed pretty fast through this bit.

Don't get me wrong, there's lots of good stuff in all the chapters but don't think you should implement all of it and not all of it might be for you. I think my opinions differ because Ferris can't really imagine making money from doing what he wants to do anyway. So he is still in the mode of work is separate from life and you should compartmentalize. That's not at all where I'm coming from.

Sunday, March 15, 2009

Career - Next Steps

The chairman told me that I interviewed very well and he doesn't have any feedback in that regard and if I find somewhere more matching my interests I should get the job. The potential Sydney job is a much closer match though we're not keen on a move to Sydney. It's nice to visit there but I prefer the weather here (I hate humidity) and both Snork Maiden and I like the bikeability and closeness to countryside etc. I also now have lunch lined up in a couple of weeks with the director of another school at the uni here.

Friday, March 13, 2009

Didn't Get the Senior Lectureship

I just heard that I didn't get the Senior Lectureship (Associate Prof in the U.S. system) position at the University down the street from me. The feedback I got so far is that people liked me but wondered whether I would be a good fit for the Department. The chairman had told me that he thought I was a good fit in fact which is presumably why I was interviewed, though they didn't originally advertize in my area of expertise. But another member of the selection committee seemed grumpy throughout my presentation and formal interview and I didn't get to meet them one on one so my expectation is that they was the main force against me. Anyway, I've asked for some more feedback from the chairman if possible to help me in future interviews.

I know from the most accepted research ranking in our discipline (who are obsessed with rankings) that I place pretty much in the middle of the full professors in that department. So it's certainly not a question of me being qualified as far as research strength goes.

Still no news on the job I supposedly did get. I e-mailed all the relevant administrators three days ago and not one of them has seen fit to reply to me at all.

I'm going to seek a meeting with the head of another School at the university to see if he can keep me in the loop regarding developments there. He is an old colleague from when I used to work at this University and just was promoted to Head of School. And I have my presentation in Sydney coming up later this month. They are looking for the equivalent of U.S. full professors. Discipline-wise it is the perfect fit to me. Their department is small and not very strong but if I went there it would be an opportunity perhaps to build something up. I'm not keen on moving to Sydney though.

I also just wrote to the people who wrote recommendations for me to thank and state that I hope I can rely on them in the future to recommend me.

I also have ideas for future research grants that I could pitch to funders...

I just heard from one of the administrative staff, but basically the message was there might be progress next Tuesday or later.

Thursday, March 12, 2009

Australian Unemployment Rising, But Still Low

Chart at Peter Martin's blog.

Planning Our Trip to Europe

Snork Maiden yesterday got a rejection e-mail for the paper she submitted to a conference in Slovenia. Having organized an international conference of this type myself where most presenters pay fees to attend the conference, I really can't understand conference organizers who reject papers unless they are really off topic, really incomprehensible, or multiple submissions. The excuse here is that "the facilities are insufficient for more than a certain number of papers" and so only the best will be accepted. Rent more facilities and charge participants more than the marginal cost of hosting their paper! Yes, the conference I organized did not have exorbitant fees and made a lot of money :)

Anyway, so Slovenia is out but plenty of places are still in the running. Venezia (a conference on the island pictured above where I attended another conference in 1998); Brighton, UK; Lecce, Italy; and Amsterdam. Between some juggling of these conference/workshop locations perhaps we can visit Moominmama and Moominbrother (somewhere in the Mediterranean basin). I just remembered yesterday that I have a friend (former student) based in Rome currently (working for UN FAO). I've used Rome before as a hub for European travels maybe we can do that this time. Frankfurt, Amsterdam, and London are the most likely other locations (done 'em all). OTOH Snork Maiden has never been to Europe and so is excited to check out everything.

On review, it seems likely that Brighton is out of the running as successful candidates should have heard by 5th March and it is a European Union funded thing. The Lecce people confirmed that they will pay Snork Maiden's costs. I just need to hear about the Venezia thing to start to set the trip up.

Tuesday, March 10, 2009

Book Reviews: Gladwell

I read Blink by Malcolm Gladwell. While it is a good read I found it rather frustrating. I agree totally with the tone of the Wikipedia article. I guess it is too journalistic and not analytical enough. Sometimes making intuitive judgments is good and sometimes it is not. Some people are born with the abilities to make them and other times they can train to have those abilities. Well, the real world is messy I suppose but Gladwell doesn't make it much more tidy.

Next I tried to read "The Tipping Point". After reading about people who are "Connectors", "Mavens", and "Salesmen" I quickly got bored and gave up on reading. Maybe it is just too culturally specific to the US (where I lived ten years so other non-Americans would be really alienated). Very lengthy examples are Paul Revere, Sesame Street etc. It really didn't seem to be about how small things make a big difference as it is subtitled but about how social networks work. It really wasn't about "tipping points" at all as I would understand the term.

Next I've started Tim Flannery's "The Weather Makers"...

Credit Suisse/Tremont Hedge Fund Index Estimated to Finish down 0.45% for February

New York, March 9, 2009

Early estimates indicate the Credit Suisse/Tremont Hedge Fund Index will finish down 0.45% in February (based on 59% of assets reporting).
Volatility in global equity markets was fueled by an adverse feedback loop between the financial sector and the
economy in February, creating opportunities for hedge funds to capitalize on market swings. The Royal Bank of
Scotland in the UK, AIG in the US, and UBS in Switzerland all posted the highest corporate losses in recent times for
their respective countries. Hedge funds continued to decouple from equity markets and outperformed the MSCI World
Index by 10.04% in February and by 17.9% year-to-date. This can be attributed, in part, to many hedge funds taking
short positions, defensively positioning themselves with reduced net exposures to equity markets, tactically harvesting
market volatility, and being less constrained by the deleveraging process that hamstrung some managers in 4Q 2008.
The Dedicated Short Bias strategy looks to be the biggest winner for the month with an estimated return of 4.09%.

Friday, March 06, 2009

Topped-Up Australian Margin Loan

I paid down $A1000 of my Australian margin loan to reduce the risk of a margin call. It's one thing I can do to reduce anxiety. Still waiting to hear on the jobs. The money came from a credit card. I need to get paid soon.

Day Starting Badly.... Will it End Well?

Today I'm supposed to get my contract for the one year job and hear the outcome on the permanent job. Well, they said on both: "By the end of the week". And Monday is a public holiday here...

So the US market was down again and I was again forced to sell. Again, I miscalculated. I'm below the threshold for buying on margin now anyway, so I can't make the mistake again, any time soon...

And then I dropped a cup of coffee it to the drawer of my bedside table/nightstand and all over the place. At least it let me get my aggression out by doing a bunch of cleaning!

Hedge Fund Performance for February

The HFRX (daily small sample) index lost 0.38% for February. As you know stock market indices fell sharply with the MSCI World Index down 9.73% and the SPX down 10.65%.

Thursday, March 05, 2009

February 2009 Report

I don't feel like writing my standard monthly report this month - too depressing. The market keeps going down with the MSCI down 9.73% and the SPX down 10.65%. We "only" lost 4.71% in USD terms (5.33% in AUD terms). Could be worse I guess. The last two months have been market beating:

This month this is due to a relatively strong (or less weak) performance by Australian equities. We did OK on non-US foreign equities too. Private equity sucked even more than US stocks... Maybe I'll report the breakdown at the end of this month when all hedge fund returns are available. Because of our relative outperformance alpha measures crept up this month to 3%.

Somehow we managed to spend almost $A6,500. Car costs totalled $A1,250 including $A777 for annual registration. My trip to Cairns cost more than $A500 of out of pocket expenses some of which will be refunded when I finally officially have a job. Snork Maiden spent $US527 on her parents visit in February. So that about explains the increased spending.

Our spending over the last 12 months is beginning to decline as we settle down from our move to Australia (all the humps in spending are international moves) and the Aussie Dollar declined. Comprehensive earnings over the last 12 months remain dire:

When the green line is above the red line net worth increased in the last 12 months and vice versa.

Wednesday, March 04, 2009

Book Reviews: Zilliak and McCloskey and Taleb

Snork Maiden brought home borrowed copies of Ziliak and McCloskey's "Cult of Statistical Signficance" and Taleb's "The Black Swan". in a way both are rants against standard practice in quantitative analysis. But Taleb's book is ten times better or more than Ziliak and McCloskey's. The latter have a single point that researchers often misuse the concept of statistical significance and ignore the actual size of an effect or variable in favor of just stating that it is "significant" - which just means in statistics that there is a low probability that we think there is an effect when there is none (the probability of falsely rejecting a null hypothesis that is in fact true). Now many researchers write up ineffective discussions of what their research found or make fundamental mistakes in method. But it's not universal and the book never really explains key concepts such as what statistical significance is. It's just one huge rant against all the economists and statisticans that the author feels have oppressed them or their like-thinkers. It assumes we know these things and know the authors critique already (which I do as an economist). The statistician R. A. Fisher is the big villain of the story and Gosset the oppressed hero. But there is never any discussion of exactly what their contributions were.

By contrast, Taleb defines all the basic ideas he uses and has more than one idea. Not all are original of course. Many are commonplace in recent behavioral economics and in more general economics. And they are not esoteric ideas in economics. Winner takes all ideas are in Frank and Bernanke's introductry textbook that I used to teach from. There are notes for the sources at the end of the book. And yes he rants and raves against everyone he believes thinks incorrectly but he does it in an amusing way. I like to read him and didn't find him too annoying. Some people complain about his use of fiction, autobiography, and fictionalised autobiography alongside factual material. In this he reminds me of Robert Pirsig who embedded philosophical and autobiographical material in a story about a motorbike trip across America in "Zen and the Art of Motorcycle Maintenance". I don't have a problem with it. It makes the book much more readable than it would otherwise be.

Tuesday, March 03, 2009

World's Top 200 Universities

All the universities I've studied or worked at are on this list. There's some luck in that. I've interviewed for jobs at some that are not on the list such as Clark University, New Jersey Institute of Technology, and Scottish Agricultural College (unless you reckon it's part of the University of Aberdeen) but none made me an offer. And then there are some on the list I interviewed at but wasn't made an offer. Most prominent among those is the University of Cambridge. My presentation at the end of the month is also at a top 200 university.

Career Update

The interview went smoothly but I think my chances are 50:50 on getting the job. Some people seem enthusiastic about hiring me while others seem skeptical. They say they'll let me know by the end of the week. I am also told that I should have a contract on the short-term research position by the end of the week. It's supposed to be for 3.25 days a week at what seems to be a nominal annual salary of $A100,296.