Difference between ‘render’ and ‘redirect_to’

redirect_to :action => ‘list’ forces the clients browser to request the list action.

render :action => ‘list’ will render the template list.rhtml without calling or redirecting to the list action.

Mortgage Micromanagement

Apparently “playing by the rules” , according to Obama, includes taking an adjustable mortgage that results in monthly payments equal to 43% (or more) of income. According to the Homeowner Affordability and Stability Plan

“For a sample household with payments adding up to 43 percent of his monthly income, the lender would first be responsible for bringing down interest rates so that the borrower’s monthly mortgage payment is no more than 38% of his or her income. Next the initiative would match further reductions in interest payments dollar-for-dollar with the lender to bring that ratio down to 31 percent…”

So in the case of two families with identical earnings and living in identical houses we take the tax money of the responsible family that saved for a downpayment and give it to the irresponsible family that didn’t. And if you were responsible enough to rent until prices came down then you’re just out of luck.

Redistributing wealth based on income is a crude, but necessary, manner of levelling an uneven playing field. Redistribution based on debt introduces considerably more unfairness.

Kahneman and Taleb Panel Discussion on Economic Crisis

Panel discussion at Edge between behavioral economist, Kahneman and author Taleb on the economic crisis.

Note: They might be at the edge of thought but they certainly aren’t at the edge of the network! Get yourselves a CDN people!

Change in Employment in a Recession

Starting a Rails Project with Bort

I highly recommend Bort when you’re starting a new Ruby on Rails project. Assuming you’re using MySQL, the following steps are all that are necessary to get started:

1. Download and unzip Bort into project folder
2. Edit the database.yml and the settings.yml files
3. Create the database: mysqladmin -u <username> -p create <db_name_development>
4. If you’re using Dreamhost: add ‘host: mysql.<dbhostname>.com’ to your database.yml file
5. rake db:migrate

Which Ruby on Rails Gem/Plugin to Use

The following gems and plugins are the most popular as of Nov 12th, 2008:

• Javascript Framework: jQuery (56%), Prototype (43%)
• Skeleton: Bort
• Mocking: Mocha
• Exception Notification: Hoptoad
• Full text search: Thinking Sphinx
• Uploading: Paperclip
• User authentication: Restful_authentication (keep an eye on Authlogic)
• HTML/XML Parsing: Hpricot

Volatility Increases in Times of Crisis

Many people have pointed out that stocks all become perfectly correlated in times of crisis. That’s not strictly true but correlations do increase dramatically. Over the past six months (August 4th, 2008 to January 30th, 2009) notice how correlations (for a portfolio containing a selection of the Dow components) have averaged 0.67 and volatility across the portfolio has been 3.1% for the daily return standard deviation.

 

		BAC	GE	IBM	INTC	JNJ	KO	MCD	MMM	MRK	MSFT	PFE	PG	T	WMT	Return	StdDev
Bk Of America Cp	BAC															-95.8%	9.8%
Gen Electric Co	GE	0.63														-80.9%	4.8%
Intl Business Mac	IBM	0.66	0.68													-48.1%	3.0%
Intel Corporation	INTC	0.57	0.64	0.74												-66.9%	4.1%
Johnson And Johns	JNJ	0.50	0.58	0.67	0.69											-28.4%	2.5%
Coca Cola Co The	KO	0.39	0.45	0.56	0.66	0.72										-35.8%	2.8%
Mcdonalds Cp	MCD	0.54	0.62	0.66	0.66	0.69	0.66									-5.5%	2.7%
3 M Company	MMM	0.56	0.66	0.68	0.68	0.77	0.66	0.75								-39.3%	3.0%
Merck Co Inc	MRK	0.55	0.62	0.71	0.75	0.80	0.66	0.73	0.72							-23.6%	3.5%
Microsoft Corpora	MSFT	0.58	0.55	0.75	0.80	0.72	0.68	0.68	0.68	0.73						-54.0%	4.0%
Pfizer Inc	PFE	0.61	0.60	0.66	0.70	0.76	0.64	0.67	0.71	0.80	0.70					-37.5%	3.2%
Procter Gamble	PG	0.53	0.62	0.68	0.69	0.84	0.70	0.73	0.78	0.82	0.72	0.77				-30.1%	2.6%
At&T Inc.	T	0.60	0.57	0.72	0.72	0.77	0.64	0.69	0.69	0.79	0.75	0.75	0.76			-29.7%	3.6%
Wal Mart Stores	WMT	0.44	0.51	0.57	0.57	0.75	0.61	0.72	0.66	0.71	0.61	0.64	0.73	0.66		-34.4%	2.7%
Exxon Mobil Cp	XOM	0.49	0.56	0.71	0.72	0.81	0.64	0.71	0.72	0.78	0.76	0.76	0.78	0.81	0.67	1.9%	4.3%
Portfolio																-44.6%	3.1%

Historically, the same portfolio has exhibited correlations between the various components which have been considerably lower. In fact, over the past twenty years (February 2nd, 1989 to Jan 30th, 2009), correlations have averaged 0.32, approximately half the correlation we have seen recently. The standard deviation of the daily returns was only 1.1%

		BAC	GE	IBM	INTC	JNJ	KO	MCD	MMM	MRK	MSFT	PFE	PG	T	WMT	Return	StdDev
Bk Of America Cp	BAC															3.2%	2.5%
Gen Electric Co	GE	0.49														8.4%	1.8%
Intl Business Mac	IBM	0.31	0.41													7.3%	1.9%
Intel Corporation	INTC	0.31	0.40	0.45												15.4%	2.7%
Johnson And Johns	JNJ	0.27	0.39	0.23	0.22											14.5%	1.5%
Coca Cola Co The	KO	0.28	0.38	0.21	0.22	0.41										12.4%	1.6%
Mcdonalds Cp	MCD	0.27	0.36	0.24	0.22	0.30	0.34									12.9%	1.7%
3 M Company	MMM	0.35	0.45	0.28	0.29	0.31	0.34	0.28								9.1%	1.5%
Merck Co Inc	MRK	0.27	0.36	0.23	0.22	0.51	0.35	0.26	0.28							8.2%	1.9%
Microsoft Corpora	MSFT	0.31	0.41	0.41	0.55	0.28	0.27	0.23	0.26	0.26						21.5%	2.3%
Pfizer Inc	PFE	0.30	0.40	0.25	0.23	0.52	0.35	0.27	0.29	0.54	0.29					12.0%	1.8%
Procter Gamble	PG	0.27	0.37	0.19	0.20	0.41	0.43	0.33	0.34	0.35	0.21	0.36				14.3%	1.6%
At&T Inc.	T	0.32	0.37	0.26	0.25	0.32	0.32	0.27	0.29	0.29	0.28	0.29	0.30			8.4%	1.8%
Wal Mart Stores	WMT	0.32	0.45	0.29	0.30	0.34	0.36	0.32	0.35	0.31	0.33	0.33	0.34	0.32		13.8%	1.8%
Exxon Mobil Cp	XOM	0.29	0.37	0.26	0.24	0.33	0.34	0.25	0.37	0.31	0.28	0.32	0.27	0.35	0.29	13.5%	1.5%
Portfolio																13.2%	1.1%

 All these results were created using the tools at AssetCorrelation.com