A friend of mine read an excerpt of Hank Paulson's account of the bailout and expressed dismay at discovering that Paulson was a Christian Scientist who didn't want to take pain-killer for a headache. Prior to this, he seemed to find Paulson entirely reasonable.

Trying to decide rationally between what's a medicine and what's food, what's literature and what's pornography, what's investment and what's speculation, what is an effect and what is a side effect -- it all sounds tough to me. But lately I've had a long run-in with medicines for a persistent sinus-y kind of cough and cold that made me think maybe no medicine was the way to go. I'm going to go green.

Everything I took the past month seemed to not only not cure me, but actually exacerbate something else. Pseudoephedrine eventually and paradoxically causes the runny nose it 's supposed to suppress. Antibiotics upset your stomach. Eventually people start suggesting new medicines to offset the old medicines, yoghurt capsules against antibiotics, etc, which I declined.

Finally, seeking a happy to end to it all, I agreed to take some methylprednisolone for a few days, a kind of steroid, to beat down the residual allergy. They give it to you like some kind of shock-and-awe treatment: a 6 tablet bombardment on day one, 5 on day two, 4 on day three, etc. On day 6, it requires no more drugs at all: then the Saddam Hussein bad cells come out of their foxhole with their hands up.

It helped a little, but then, on the very last morning I woke up scratching at what I saw were small hives on my inner forearms.

Then I had my Proustian recollection.

When I was about fifteen years old, I had allergies, and eventually went to an allergist who almost killed me. He injected grass pollen into my arm veins with such deadly accuracy and ill effect that not only did my arm swell up, but so did my air passages and throat etc, so that they had to give me adrenalin on the spot and a few weeks of methylprednisolone.

Then I embarked on desensitization: for two years our family doctor whom I still recall fondly came by to inject concentrated grass pollen into my forearms in increasing doses. Somehow what doesn't kill you is supposed to make you strong.

I don't think my allergy to grass pollen ever went away, but what did happen was a new problem. For more than ten years thereafter, if I wore wool or nylon against my bare arms, hives would appear where I had once been injected with grass pollen. Somehow, deep inside my skin, something remained that remembered the insult of the allergist and grew angry every time some minor external occurrence reminded my body of it.

Why did those hives suddenly appear a few days ago? (They are gone now).

My theory is that in taking the methylprednisolone now, many years later, my supposedly desensitized cells on my arm, experiencing once again a cure, remembered their ancient insults by the allergist and family doctor and decided to rebel again. Experiencing the cure again, they also remembered the disease.

Sometimes nice words can remind you of a time when there were were harsh words too.

Well, that's my theory. I scoff at your unscientific beliefs but mine seem perfectly reasonable to me.

Fifty years ago in South Africa, and in England, chemists (pharmacists in the U S of A), ran their own small shops. They were open from 9 - 5. They were pretty much only allowed to sell medical-type goods.

The doctor who made a home visit to you wrote out a prescription for a cough mixture or eye drops that involved various ingredients that only a chemist was allowed to assemble. Many medicines were custom. The pharmacist was trained to assemble and dispense them. He (they were mostly he’s) used distilled water and various chemicals he had in stock. He worked in the back of the chemist shop. He assembled them with pipettes and glass flasks and finally decanted them into a dark brown light-excluding bottle with a cork. He wrote out a label by hand and pasted it on, with instructions. And then a guy on a Vespa, if you were willing to wait, delivered it to your house.

Mirabile dictu, many of the chemists in Cape Town actually carried chemicals and photographics supplies too. I used to buy granulated zinc weighed out into little brown paper bags and dilute hydrochloric acid decanted into the same brown bottles, and then make hydrogen-filled balloons. I brought glass tubing and heated it and bent it. I bought sulphur powder. Somehow, the suburban chemist carried it all in little brown labeled drawers in a bureau in the back, or ordered what he didn’t have from the stockist, Haynes Mathews, a magical name, downtown. I also bought sodium hypochlorite and developer and black bakelite tanks, though that was, I concede, already a drifting from the true job of a chemist.

My sister had a boyfriend from Johannesburg -- I think his name was Lou -- who was a chemist and ran his own small business. Being a chemist wasn’t that far away from being a real doctor. She invited him over to a Friday night family dinner. He appalled my parents by having the honesty to tell them that sometimes when he was in a hurry he used tap water instead of distilled water.

Chemist shops needed chemists, both for their skills and their license, and you could make a good living by being a locum, a Latin word indicating an itinerant qualified chemist who came in to work for a daily fee in some chemist shop in place of the regular but temporarily absent chemist, in order to provide the licensed authority to make medicines and the skill. Sometimes, I suppose, the locum was hired by an entrepreneur chemist who wanted to grow jis business.

I thought of this yesterday when I went into Duane Reade to fill a prescription. I handed the prescription to a woman cashier who was (wo)manning the cash register and taking prescriptions. She passed it to a bunch of female pharmacists standing behind a shoulder high counter who, non-stop, were talking on the phone squeezed between ear and shoulder to either friends or doctors offices or insurance companies or, rarely, patients, while they simultaneously read prescriptions and counted little capsules or tablets out of giant vials out and poured them into little vials and labelled them and handed them back. They were so busy and so bored doing such dull assembly-line work. No decanting and no talking to customers. The cashier had a more human job than the chemist.

http://www.psi-q.org

London June 15, 16 2010

"Conference topics include how cultures in credit markets influence understanding and behaviour, how philosophy informs financial mathematics and the impact of friends and networks on trading decisions.

The conference will ask whether there is anything we can learn from applying a social sciences overlay to complex markets, and discuss what is “actionable” in terms of quantifying these themes in trading strategies, risk management and regulation"

This morning I walked up Columbus Ave on my way to work and passed a Danskin store that had a sign outside that said "Seized by the U.S. Marshal". Things are bad when people on the Upper West Side are no longer buying leotards, although it's possible that stores like Lululemon, which cater to the yoga crowd, may have undone the Danskin purveyors. But something embarrassing has happened to me twice in the past couple of months that has convinced me more strongly than ever that the recession is still with us.

Much like Orwell reported on the state of poor down-and-out people in European capitals in the early 1930s, I feel obliged to report to you the indications of how the recession has affected working people in New York. And at greater risk to my reputation.

In the 1970s New York was indeed a walk on the wild side. Simon and Garfunkel in The Boxer sang about the ladies of the night on Seventh Avenue. And if you drove anywhere near the Lincoln Tunnel there were women who looked like they were freezing to death as they patrolled the streets of the far west side in hot pants (you may be too young to know what those were). New York then wasn't New York now.

Even in the Eighties there was a visible underside. I once took some small children to another child's birthday party at Dezerland on the West Side, and when we came out looking with no luck for a cab on the windy icy street there were virtually unclad women waving at cars that went by.

"What are they doing?" one of the kids I was shepherding asked me.

"I don't know," I lied.

"I know," a seven-year-old girl said to me. "They dress like that so it'll be easier to get a taxi."

That was then. Now Times Square is Disneyland and everything is clean. Or so I thought.

Several months ago I left a business dinner at 9 pm and walked up Park Avenue on a nice fall evening. As usual, of course, I was minding my own business, thinking about the sorts of high-minded cultural things that people in New York think about. Suddenly, two very elegantly dressed women in their thirties, laughing and chatting to each other, walked towards me and started to talk. I paused. I thought they wanted help, but instead they offered to help me. I declined. They gave me a business card with a location and a phone number, and the admonition "No Blocked Calls Accepted". I'm glad they knew how to look after themselves.

To me these Park Ave women didn't look like the kind of people who did business on the street; they should have been, I imagine, doing their Belle-du-Nuit thing in an East Side townhouse that cops are supposed to raid, escorting the patrons outside to the pop of flashbulbs while the men cover their faces with their hats. The fact that they were out drumming up business near the Mercedes Benz and Aston Martin dealers and the Waldorf Astoria means that even the luxury spenders are spending less.

Which brings me to two nights ago. It had been raining and snowing and I eventually took a walk around 8 pm in the evening, heading to near the Time Warner Center. Weather fit for neither man nor beast. Minding my own business, thinking about nothing of course except the finer things in life, and looking of course like all I was thinking about were the finer thing in life, like the latest William Kentridge exhibition or the solution to a partial differential equation, I ambled along head down. (Methinks the gentlemen doth protest too much? Nevertheless, it's true.) Somewhere around 58th street I stopped, my feet in a puddle, to read an email newsletter from SSRN on my cell phone. Half a minute later, still engrossed in the latest reports on risk management and asset allocation, I sensed someone standing beside me waiting for my attention. I looked up.

"Reading your email?" said a woman, easily 10 years or more older than me, peering up. "Go ahead, I can wait."

Nice but frail lady, a touch of ill-matched make-up, the sort of person you see buying Aleve and pet food for their cat in supermarkets.

Modesty and my perennial good taste permit me to reveal no more about what she said to me. Suffice it to say that it involved choices and various kinds of rhymes I'd never heard before. Then she handed me a card with initials only, a phone number and an address. She was apparently an ACCOUNTANT whose office hours were 1:00pm - 9:00 pm and she did her spreadsheets from home.

Is there something friendly and unprejudiced about the way I walk or stand, even when I'm simply looking at my Droid that suggests I'm open to this sort of stuff? Usually I like to blame myself for things, but I have to say I don't think so.

The people who used to hustle in this business in New York used to look like they were hustling. You could tell them a mile off by the way they dressed. Or they looked like addicts.

When people who (i) look as though they normally ply their business indoors in expensive places or (ii) look as though they should be home drinking hot Lipton's tea, are out on the street in the rain taking dangerous chances, I have to conclude that life is still tough.

Even after the Stimulus.

According to today's WSJ, some economists are suggesting the Fed should target an inflation rate higher than 2%, perhaps 4%. The argument is as follows:

"The new argument for inflation goes like this: Low inflation and the low interest rates that accompany it leave central banks little room to maneuver when shocks hit. After Lehman Brothers collapsed in 2008, for example, the U.S. Federal Reserve quickly cut interest rates to near zero, but couldn't go any lower even though the economy needed a lot more stimulus.".

This reminds me of a dentist I once went to twenty years ago who put a filling in a lower tooth. The filling was a little high and bumped against the opposing upper tooth when I closed my mouth. He then proceeded to file down the upper tooth to fit the filling.

The other day I wanted to look up some statistics on certain stocks -- volatility, correlation with the S&P, etc. I went to yahoo/finance and google/finance, and eventually to a Bloomberg. To my great surprise, all I could easily find was beta. None of these sites or machines told you the volatility of the stock itself, or its correlation, in any direct way, though you could eventually back it out.

Beta, though it is indeed a statistic, the covariance with the market divided by the variance of the market, is of interest because of its role in the capital asset pricing mode. I was quite surprised that it had infiltrated the commercial world to such an extent that they gave you that information without bothering to give you variance or correlation, which are less theoretical in nature and likely at least as useful. This is an indication of how successfully modern portfolio theory, right or wrong, has influenced what you can buy in the way of information.

Interestingly, if you go www.wolframalpha.com and simply enter the stock symbol, you will find a useful set of information and graphics that is much less theoretically prejudiced and very useful, all obtained by typing one symbol.

Universities have their quota of disgruntled people. There is a perhaps lucrative book waiting to be written -- The Ungraduate?  -- about the attempts that have been made on professors lives, more often by students than by other faculty. When I was in graduate school there were at least a few more than apocryphal recollections of such occurrences. A casual google search quickly leads you to many, of which just several are

http://dailyheadlines.uark.edu/1258.htm

http://www.nytimes.com/2007/03/27/science/27dark.html?_r=1

There are many more. Google "Bayard Peakes" for some interesting information.

Killing someone isn’t going to get you tenure or a degree. But there is definitely something anomalous about modern universities; when I returned to academic life seven years ago I found it unlike what I had recalled or imagined.

Part of the confusion is the perplexity as to where universities lie in the spectrum of higher learning vs business. Forty years ago, at least in my imagination from the student side of things, it was simple: your grades were supposed to be all that mattered (in England and South Africa, provided in the latter case, of course, that you were the right color) and everything else counted for nothing. Universities were supposed to be dedicated to learning and teaching, and tenure provided some freedom. 

Now, universities are different, and don’t quite know which camp they fall in, the idealists or the moneymakers.

They patent algorithms.

Pharma companies reside on their premises.

Administrators think it's their job to be entrepreneurs and fund raisers.

Departments strive to provide executive education as a way of generating funds.

They admit more students than there are future jobs for because they like the cash flow.

They inflate grades and are tempted to tolerate cheating because their students are quite clearly customers.

And on the (somewhat perhaps?) good side, professors themselves get graded by students. (I took quantum mechanics from Robert Serber who pulled out his ancient yellowed notes from his jacket pocket and copied them onto the board while he took long deep luxurious puffs from his chain of cigarettes. No powerpoints given out in advance, no office hours.) 

And they give tenure, the apparent trigger for the recent episode. It’s such an all-or-nothing thing; where else in the world is there a job that they can never fire you from? (Apparently, I recently learned, in the NYC school system.)

Nevertheless, many universities, like Walmart, use non-tenured adjuncts at a fraction of their cost to do the heavy lifting cheaply, the correct phrase, I'm told, being the “proletarianization of academic life”.