I graduated from the University of Maryland’ College of Agriculture and Natural Resources with a B.S. degree in Agricultural Resource Economics.

So what now?

Hmm..

Well I was hoping I would have a job by now but I don’t. I was offered a job at the marketing firm I interned with so I can still make money while I continue the job hunt. The only problem is my lease is going to end at the end of July and after that, I don’t know where I’ll be staying.

But is staying in DC what I really want to do right now?

If I had a career job working for the government or a private firm doing economic research and analysis then all things would be settled and I would not have any second doubts. Since things are up in the air then I am having doubts.

For the longest time I thought I wanted to travel after college. I wanted to fly over to Europe and get a job doing simple things like waiting tables to have money to live on and move from city to city so I could see the world. When I met my g/f that sort of adventure lost it’s appeal because I was hoping I would be able to find a job and all, but now that I really have no idea what’s going to happen, that seems like a fun option.

If I do decide to do that adventure then I’ll have to keep blogging about it on here, or maybe I’ll make a new blog just for that.

I have been reading up one very cheap ways to travel and one of them is to go to a port city where container ships frequent and ask the captain if you can ride to wherever they are going if you work on board. Apparently that sort of thing is common.

But who knows!  If that does happen then this blog will become a lot more exciting I’m sure.

Portal 2

Since I got a lot of responses back from my review on Red Dead Redemption, I thought I would make a review of Portal 2, a game I can’t put down. Portal 2 has been out for a few weeks now, so any hard core gamer intent on buying this game has already bought it (ahem). But for those of you who are still wondering if you should buy it maybe this review will help you.

My previous post entitled “Video Game History” talks about my past experiences with video games and the types of games I like. If you have similar experiences then you probably think similarly as how I do. If you do not play the types of games I play then we probably don’t share similar interests and this review won’t help you out.

Many of the reviews you hear about Portal 2 will say how it’s solid-no glitches, great writing that is hilariously funny, great story, original, etc. After beating both single and multiplayer here’s what I’ve come to find out:

Single Player- The game starts off funny when you wake up in a sea container and you exercise by looking up and then down. Classical music is played to calm your nerves before “EEERRRR!!!” goes the buzzer indicating your classical music listening time is over. Your British sounding robot buddy will come to break you out and the game starts. The excellent writing that is so highly praised isn’t THAT great. It’s PG rated and is filled with sarcastic humor. If you like sarcastic humor then you will probably laugh. I laughed a few times, but wasn’t rolling on the floor. As for the story… it isn’t that elaborate. You are rescued by a dumb robot, manage to wake up a smart robot boss, make the dumb robot boss, and then with the aid of the smart robot, try to kill the dumb one. That’s pretty much it in a nutshell. The game is very pretty. The graphics aren’t amazing like they are in Uncharted 2 or AC2, but how is is drawn, is very good. Sort of how the graphics for Windwaker were cartoonish, but pretty good for the Gamecube, these graphics are really good for the type they are. The gameplay is fun if you like puzzle games. I did feel when playing it that I was just solving a puzzle to get to another puzzle. However when it got to be too much I started craving it again and had to go play it some more. So my best advice is to stop playing before you get bored. Play a few puzzles then put it down for later. It will make for an overall better experience. As for the comments from the folks at X-Play as this having a great replay value… I don’t see it. It’s a puzzle game. Once you know how to do the puzzles then that’s it. You only solve them one way and once you know how to do them then it isn’t as exciting since you aren’t thinking about how to do it.

Multiplayer- The multiplayer for this game is really a lot of fun. I love playing with random people online through the Steam automatic matchmaker. I literally laughed out loud at all the situations that arise from solving a puzzle with a real live person. For instance, you and your partner are working together to try to solve a puzzle and you step on a button which sends them flying into the abyss and break into a thousand pieces. It would be funny if it was some sort of computer AI but knowing that it’s actually another real person who’s just as confused as you, and then the floor drops out from underneath of them makes them scream and you go “OH SHIT! Whups! Sorry dude!”. It’s a lot of fun. Since I’ve been playing it everyone has been pretty chill. There’s no a-holes (or at least none that I have found) that are just trying to sabotage your game by doing dumb stuff or trying to kill you. It is a good community. The multiplayer does have great replay value as you can go back and collect trophies for certain activities, as well as having the fun of playing with real people which doesn’t get boring, ever, since everyone is different and will act differently in all situations.

The verdict- Go buy this game. It’s only $40 at Gamestop brand new and is worth every penny. You will spend a lot of time playing the single player which runs about ten hours, as well as countless hours online.

I’m 22 and have been playing video games since I was I was 4 years old. My first video game was Super Mario Bros. on the NES. A few years later I got the SNES with Donkey Kong, more Mario games, etc. Anyway, you don’t need to know my whole video game history, but you should know that my favorite games in this current video game era are Uncharted 2, Assassin’s Creed 2 and Brotherhood, CODMW2 and Black Ops SINGLE player (I did play multiplayer MW2 when it first came out and was kicking ass then I played other games and when I went back I had my ass handed too me. That games causes me too much stress and I have to continuously play it if I’m going to stay competitive online. And what’s with the 13 yr old kids? Seriously? Anyway). I like the Twilight Princess, and Red Dead Redemption.

Basically I like to play games that have you do something you normally couldn’t do. That one of the reasons I don’t play sports games. If I wanted to play football I would go outside with friends and play football, or join a rec league, so why would I want to play Madden? I know it isn’t exactly the same, but it”s still football. This logic can be applied to any sporting game with the exception for possibly race car games which I sometimes enjoy. I like the Need for Speed games since they are crazy and cartoonish. Plus it’s unlikely that you’ll be driving a McLaren F1 anytime soon. Even so, I haven’t bought a race car game since Hot Pursuit 2 for Gamecube.

So no, I won’t play Madden because I can do that in real life. But I can’t attend the Carnival of 14th century Venice, like I can in Assassin’s Creed 2. I can’t rescue a cute elf princess like I can while playing as Link, and while I suppose with a lot of training I could be a special operations military sniper like in MW2, I certainly can’t go back in time and try to kill Fidel Castro, or survive a VietCong invasion. I like my games to take me to a place that I’m not able to see right now. To me, that makes it fun.

My very favorite type of games are games which explore places you haven’t seen before, have really great graphics and gameplay. In Uncharted 2, you are taken to the incredibly beautiful areas around the Himalayas where you have a massive gunfight in small Nepalese town high in the mountains, run around in underground ruins in urban Nepal, and explore the snowy mountain peaks and even battle yeti. I love Assassin’s Creed 2 because it’s also beautiful and fun. You get taught the history of the different places you go to and learn a lot on the way. It’s an epic video game that takes a long time to beat if you read everything along the way.

Okay this is getting a little long. Basically if you love Uncharted 2, the Assassin’s Creed series, Zelda, Call of Duty, Fallout 3, Borderlands, Red Dead Redemption, and so on then you’ll probably like a lot of the games I give reviews on.

It’s the end of the school year (my last) and I am waist deep in papers, presentations, and exams.

I am co-authoring other blogs and have been wildly posting about actual topics this time, and not just whatever random subject I want to talk about. I might make those available sometime next week after graduation.

Thanks for coming by.

Because of:

1. The Heat

2. The Bugs

3. (at least while I was still a student) The feeling you get when you feel like there is more you should be doing and you feel bad about not doing it.

4. Not being about to wear a jacket and long pants

5. Not having a/c in my apartment for three weeks when the hot weather arrives mid April every year and my apartment owner won’t turn it on until the second week in May.

6. Not having a/c in my apartment when my apartment owner turns it off October 1st and it’s still in the high 80′s till mid October.

Basically I just hate the heat, the humidity and everything that comes with it. The state of Maryland (at least the area around the Chesapeake Bay) is a swamp. When John Smith and his English buddies founded Jamestown, this swampland nearly killed them. Fast track a few hundred years and I’m experiencing the shitty summer weather.

Just yesterday as I was riding my bike around school I got gnats in my eyes and nose, and hit by two large insects in the head and one in the throat.

For the past few weeks I have been dying in my apartment because although the temperature outside may be 84, even with all the windows and doors open it is still around 90 in my apartment, with 100% humidity. With the sliding glass door wide open you can hold a thermometer in your hand and while standing outside of the apartment the temperature is 84 take one step back in and it is 90. Leave the door open all day and it’s the same thing. There is virtually no air circulation.

Well luckily I got the a/c back yesterday after everyone complained and started posting nasty comments on the apartments Facebook page. I’ve had the a/c cranked to 50 at full blast since then (which I probably shouldn’t do since I ended up in the hospital with hypothermia last year - http://alex845.wordpress.com/2010/05/06/hospital-visit-day-1/)

I’ll probably just end up living in Alaska.

As a college student, you don’t have a whole lot of time for home cooked meals, so the caribou steaks have been sitting in my freezer wrapped in newspaper for some time. A few weeks ago, when it was still cold weather out, I decided to grill them up for myself and the g/f.

I cut them into strips and put them on the stove top grill that one of my roommates procured. I seasoned them with dill and black pepper.

Caribou meat is a tricky thing to cook without a thermometer because it is naturally brown when it’s raw. So using my cooking expertise I managed to get them just right.

Below is the final product, served with a caesar salad. I thought it was very yummy, but the g/f thought it was a bit too gamey.

I found an interesting video on YouTube where a girls parents took a picture of her every day for 10 years and made a video out of it.

You can find it here: http://www.youtube.com/watch?v=ejbNVWES4LI&feature=player_embedded

Pretty cool

A price bubble occurs when the price of an asset deviates from a true or intrinsic value. An example of this was explained in yesterdays post about the drop in housing prices. The selling price of the house was larger than the actual value of the house which eventually led to the collapse of the real estate market. It is generally believed in the study of economics that if people act rationally the market will be efficient. Reality tells us that people do not act rationally. There are many papers written by famous economist who try to explain the reasoning for an inefficient market. Two opposing viewpoints would be the work done by Grossman & Stiglitz and that of Thomas Bayes.

Lets talk about 10 farmers and 10 processors. Farmers enter the market and ask what quantities of a good are desired. Processors will buy from the farmers whatever quantity needed to fulfill consumer demand. Assuming there is no private inside information all processors would assume an average demand. An average consumer demand would require the processors to buy 20 apples to make 20 containers of apple cider (assuming the unlikely condition that 1 apple equals 1 container of apple cider). A high demand would be 30 apples and a low demand would be 20. There is an algebraic model that uses basic calculus to figure out how much a farmer would charge per apple but I’ll spare you that and tell you that we can assume one apple during an average consumer demand year would be $2. During a low year it’s $1 and during a high year it’s $3. When processors go to the market to figure out how much they should buy they assume that no one knows any inside information about whether the year is a high or low demand year so they would assume to see a price of $2 at the market. However if they see a price of $2.10 then they assume that one of 10 processors has inside information knowing that this year is a high demand year and is ordering more apples, making the price for apples increase. Since the other processors don’t want to miss out they then start asking for 30 apples. When all processors ask for 30 apples then the price of apples is now at $3. This is how prices are set in the market.

So what happens when the price of apple (or houses) is higher than the real value?

Grossman & Stiglitz, two German economists hypothesized in the 1980′s that there is no such thing as an efficient market because people make mistakes. They said that maybe while one processor was doing their algebraic calculations they made a math error and although they have no inside information, they decided buy more apples than they should. The other 9 processors seeing the price of apples being higher than it should assumed that someone knows that this year is a high demand year and they bought 30 apples despite this being a normal demand year. Well now the inefficient market price for apples is $3 even though the intrinsic value is just $2. This was Grossman & Stiglitz theory, and although it makes since, it should be noted that this theory is based upon the assumption that there is such a thing in human error. Economics assumes that people are rational and try to make the best decisions from the knowledge they have so “human error” is not considered in Economics. If we want to follow Grossman & Stiglitz in believing that markets are always going to be inefficient due to human error then we might as well just throw the whole study of Economics out the window. They were socialists who hated capitalism, so writing a paper about how markets are inefficient seemed like a good thing I suppose.

On the opposite side you have Thomas Bayes, who in the early 1700′s described a situation that could be used to understand why markets are inefficient even though people act rationally and no one makes a mistake. Suppose you have money in your pocket and someone presents to you two envelops. Although they are identical in appearance, you are told that inside one envelope there are 2 blue cards and 1 red card. That envelope is considered the good envelope as blue cards are worth $10 and red cards are worth $5. In the other envelope there are 2 red cards and 1 blue card. That is the bad envelope. You are allowed to reach inside and pull out one card, but must keep it to yourself, although you can tell those who will play after you (as well as the envelope presenter) whether you think it’s a good or bad envelope. Then you must return the card to the envelope. If you think an envelope is good then you have to pay $20 to guess, but if you’re right you will earn $5. You reach in an envelope and pull out a blue card.  Since the good envelop has two blue cards and one red one you think to yourself, “wow, this is great! there is roughly a 66% chance that this is the good envelope!” You tell the guy you think that’s the good one and you sit down. The next person by you comes up to the man with the envelops and reaches in and he too pulls out a blue card. Everyone around hears the first two people claim they believe it is the good envelope and become thrilled that they can earn make money by playing the came. The third person comes up, but pulls out a red card. He is disappointed but thinks to himself,  ”well the first two people claimed this is the good envelope and even though I have a red card, the first two people must have seen blue cards so surely this is the good envelope”. And even though he pulled a red card, he uses probability of the first two pulling blue cards to his one red, that there is a 66% chance this is a good card and said that it’s a good card. After this third person claims it’s a good card it does not matter what the rest of the people see. They will use probability to assume that this truly is a good card.

But what if the envelope is actually bad and the first two people pulled the same blue card? That is always a possibility, and with everyone claiming the envelop is good the price is set artificially high which leads to a bubble forming. When the envelope presenter announces that everyone guessed wrong they will feel foolish and be out of $20. Even though they all acted rationally using probability to choose the best answer, they were still wrong.

COMING TOMORROW: AN INTRODUCTION TO HEDONIC REGRESSION ANALYSIS

WITH MY CRYSTAL BALL AND BLACK CAT I BET I CAN GUESS THE VALUE OF YOUR HOUSE AND ALL ITS IMPROVEMENTS!

Hey! The real estate market is booming, the price will only go up and up right?

The key point made in yesterdays post about rational behavior was that economics assumes people make rational decisions (decisions which better themselves) and this leads to market efficiency, but in real life people are not rational and that leads to market inefficiencies.

The housing market crisis was an example of irrational human behavior and without getting into too much detail (although an explanation is found here in detail: http://alex845.wordpress.com/2009/10/14/financial-derivative/), it was essentially a “bubble” that grew and grew until it was unsustainable and burst.

When I was in highschool, my junior year religion teacher told us how scared she was that students my age will not be able to afford a house when we graduate from college. She told us how the prices of houses will be so astronomically high that unless you come from a rich family or are independently wealthy, there is no way we would be able to buy a house. Maybe her speculation was a bit extreme, but it did seem as though if you could afford it, investing in real estate was the sure way to make money in the long term. People bought overvalued houses in hopes that in time they could sell the house to someone else…. which leads us to the title of this post.

The Biggest Dumbass Theory, or idiot theory if you want to be nice about it, isn’t real economic theory since it’s based off irrational behavior, but essentially describes peoples reasoning for buying something that is overvalued. The person who goes to College Park, Maryland and buys the house in the picture above for $600k is an idiot. But, that person hopes that in years to come there will be a bigger idiot who pays the seller even more than $600k. This behavior continues until the housing market can no longer sustain such high prices and the house value drops like a brick.

COMING TOMORROW: THE BUBBLE – GROSSMAN & STIGLITZ VS BAYS

EPIC SHOWDOWN BETWEEN THE COMMUNISTS AND CAPITALISTS