Source: Today, 16/2/9, p.B1
Headline: The big bonus debate
Quote1:
From Britain to the US and France, political leaders are clamping down on the bankers' bonus culture, which has been singled out as a cause of the financial crisis. ... However, taking too tough a line with banks could have unintended consequences for taxpayers, according to academics and insiders, who say the risks include banks losing their best staff and their share prices falling even lower to the dismay of the taxpayer ultimately.
Comment1:
Here is the objectors' argument:
Premiss1: If (cap bonus), then (lose best staff)
Premiss2: If (lose best staff), then (share price fall)
Premiss3: If (share price fall), then (taxpayer dismay)
Premiss4: Reject (taxpayer dismay)
Conclusion: Hence, reject (cap bonus)
This is a Modus Tollens rollback. It is a valid argument structure. The only way this argument can fail is if any premiss is false.
Quote2:
Senate Banking Committee chairman Christopher Dodd ... dismissed such fears. ... "The current job market should deter employees from leaving, and if they do, there are many qualified replacements."
Comment2:
"The current ... from leaving" rebuts Premiss1, by asserting that a cap is not sufficient to result in "lose best staff". There is another factor at play, namely "current job market". "If they do ... replacements" rebuts Premiss2, by asserting that lost staff will be replaced by qualified people, and hence that share prices will not fall due to reduction in qualified staff. These two rebuttals block the objectors' argument.
Tuesday 17 February 2009
Property bottoming out in 2010?
Source: My Paper, 10/2/9, p.A8
Headline: Property bottoming out in 2010?
Quote1:
Mr Phil Anderson, who calls himself a renegade economist, ... confidently calls a property market bottom next year. ...
Comment1:
The conclusion is set out: Property bottom in 2010. What is the supporting argument?
Quote2:
Mr Anderson bases his prediction on an 18-year cycle which he says has manifested itself in the US since 1800.
Comment2:
The supporting argument is an 18-year cycle in the US. What is the supporting argument for the 18-year cycle?
Quote3:
Since then, there had been peaks in land sales or real estate speculation in 1818, 1836, 1854, 1888, 1908, 1926 and 1944. The peaks were followed by downturns or depressions, typically lasting four years. World War II disrupted the pattern. But the cycle resumed in 1955. The real estate market in the US again peaked in 1989 and bottomed in 1991. And 18 years later, in 2006-7, it hit another high. According to Mr Anderson, the market is now into the third year of downturn, so by next year it should bottom.
Comment3:
The supporting argument is inductive: a series of peaks at 18-year intervals, followed by four year downturns. An inductive argument says that if the past is X, the future will also be X. But look at the years. The intervals 1854-88 and 1888-1908 were not 18-year intervals. We have no information on the downturns.
Quote4:
The next boom, peaking around 2024, will be huge because hundreds of millions of Chinese will enter the market for the first time, he said.
Comment4:
The inductively observed pattern occurs in the US. No reason is given for extending it to China in 2024, nor is such an extension intuitively true.
Quote5:
Mr Anderson is confident the cycle will repeat itself as long as land is tradeable and in private hands.
Comment5:
"Land is tradeable and in private hands" leads intuitively to market ups and downs; but not to 18-year cycles. That needs additional argument.
Headline: Property bottoming out in 2010?
Quote1:
Mr Phil Anderson, who calls himself a renegade economist, ... confidently calls a property market bottom next year. ...
Comment1:
The conclusion is set out: Property bottom in 2010. What is the supporting argument?
Quote2:
Mr Anderson bases his prediction on an 18-year cycle which he says has manifested itself in the US since 1800.
Comment2:
The supporting argument is an 18-year cycle in the US. What is the supporting argument for the 18-year cycle?
Quote3:
Since then, there had been peaks in land sales or real estate speculation in 1818, 1836, 1854, 1888, 1908, 1926 and 1944. The peaks were followed by downturns or depressions, typically lasting four years. World War II disrupted the pattern. But the cycle resumed in 1955. The real estate market in the US again peaked in 1989 and bottomed in 1991. And 18 years later, in 2006-7, it hit another high. According to Mr Anderson, the market is now into the third year of downturn, so by next year it should bottom.
Comment3:
The supporting argument is inductive: a series of peaks at 18-year intervals, followed by four year downturns. An inductive argument says that if the past is X, the future will also be X. But look at the years. The intervals 1854-88 and 1888-1908 were not 18-year intervals. We have no information on the downturns.
Quote4:
The next boom, peaking around 2024, will be huge because hundreds of millions of Chinese will enter the market for the first time, he said.
Comment4:
The inductively observed pattern occurs in the US. No reason is given for extending it to China in 2024, nor is such an extension intuitively true.
Quote5:
Mr Anderson is confident the cycle will repeat itself as long as land is tradeable and in private hands.
Comment5:
"Land is tradeable and in private hands" leads intuitively to market ups and downs; but not to 18-year cycles. That needs additional argument.
Tuesday 10 February 2009
Japan's biggest scam
Source: The Straits Times, 6/2/9, p.A10
Headline: Man accused of Japan's biggest scam arrested
Quote:
TOKYO: For a man accused of engineering one of Japan's biggest scams, Kazutsugi Nami looked calm and collected when police arrested him yesterday morning. ... Despite being hounded by the media in the past week amid speculation of this impending arrest, ... he appeared on television almost every day, protesting his innocence. ... "It is not a scam because we have a business plan," he said repeatedly.
Comment:
Mr Kazutsugi Nami's argument, when formally stated, says:
Premiss1: If (business plan), then (not scam)
Premiss2: Business plan
Conclusion: Hence, not scam
This argument has the valid Modus Ponens argument form. Premiss1 cannot be accepted as true. Having a business plan is not a sufficient condition for an enterprise to be not a scam. Indeed, the business plan could be precisely to con gullible people into parting with their money. The argument fails.
Headline: Man accused of Japan's biggest scam arrested
Quote:
TOKYO: For a man accused of engineering one of Japan's biggest scams, Kazutsugi Nami looked calm and collected when police arrested him yesterday morning. ... Despite being hounded by the media in the past week amid speculation of this impending arrest, ... he appeared on television almost every day, protesting his innocence. ... "It is not a scam because we have a business plan," he said repeatedly.
Comment:
Mr Kazutsugi Nami's argument, when formally stated, says:
Premiss1: If (business plan), then (not scam)
Premiss2: Business plan
Conclusion: Hence, not scam
This argument has the valid Modus Ponens argument form. Premiss1 cannot be accepted as true. Having a business plan is not a sufficient condition for an enterprise to be not a scam. Indeed, the business plan could be precisely to con gullible people into parting with their money. The argument fails.
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