Saturday, December 15, 2012

On the kinds of "conversations"

Josh Brown had a great post entitled "No need for a conversation":
My heart is breaking for the families of those affected by the events in Newtown, Connecticut this morning. Just as I'm sure yours is, regardless of your stance on the gun issue.

Now, we're going to hear people talk about this sudden need for a "national conversation" or a some grand debate over guns and gun control. I can't think of a more pointless waste of time.
He correctly pointed out that there are entrenched views on both sides of the gun control issue and incidents like the latest mass shooting aren't going to have a significant effect on peoples' attitude. Mrs. Humble Student of the Markets was particularly upset with the news of the shooting, largely because we have a 7th grader and we used to nearby Stamford, Connecticut.

Nevertheless, guns are part of the culture of America. However, look into your own heart and consider how the "national conversation" would change if the shooter had been:
  • Black;
  • An illegal alien from Latin America; or
  • Muslim
Regardless of where you might stand on the issue of gun control, I believe that the allowing the presence of firearms increase the level of systematic personal risk in a society. As the Washington Post points out, America is a far more violent society than many other industrialized countries:

Deaths due to assault
On the nature of risk
Consider this financial analogy. There are some obvious benefits to financial derivatives. They are useful tools for spreading risk around and an investor can use the leverage inherent in derivatives to better enhance his useful of capital. Now imagine allowing every mom and pop investor to use derivatives such as options, futures and swaps, whether they be listed or OTC, in their portfolios.

Regardless of the benefits or derivatives, do you think that there would be more or less market volatility under such a regime?

Addendum: Remember, derivatives don't destroy balance sheets, people destroy balance sheets.

Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.  

None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.


Susan Watson said...

I agree with your comment about gun proliferation increasing systematic personal risk.

Americans who argue that the existence of concealed weapons acts as a deterrent to gun crime forget that unless everyone is walking around with loaded guns actually in their hands, a criminal who points his gun first has "the drop" on a victim.

Carrying a concealed gun for "self defence" ie to respond to someone else who already has their gun in-hand, is pointless. By then it is already too late to reach for anything but the sky.

I am trying to find numbers so I can compare frequency of gun-enabled crime to cases of (concealed) gun-enabled self-defense. I suspect that once you remove long guns from the picture there will be practically no instances at all of defensive gun use.

Anonymous said...

Overly simple minded comment above. The bigger point is PREVENTION. Check on what happened in Houston, TX right after the concealed carry law went into effect about 10-15 years ago.

1. there were a few shootouts ( some were "won" by a couple of elderly people) in public places, e.g. buses
2. soon after the incidence of these events tanked

The threat had PREVENTED the bad guys from even trying...

You'll have to think a bit harder.

Good Luck.

Susan Watson said...
This comment has been removed by the author.
Susan Watson said...

So I've been looking at stats published by the FBI (, by the CDC and other accademic and standardized sources.

It turns out that 'Anonymous' and I were both wrong: I expected that allowing concealed weapons would increase violent crime. Apparently it does not. On the other hand, 'Anonymous' claimed that "the concealed carry law" resulted in some unspecified dramatic improvement. It does not seem to have done anything like that, either.

The Texas 'concealed carry' law passed in the fall of 1995 and came into effect January 1, 1996. It had no effect on gun crime in Texas, so far as the FBI or anyone else has been able to detect.

I found relevant measurements in standardized categories going back to 1990. Yearly decreases in each type of violent crime were already happening in Texas and the rest of the country. These decreases were no larger and no smaller for Texas in the years after 1996 than they were each year from 1990 to 1996.

I was, however, correct to suspect that guns serve no practical defensive purpose.

Let's consider three categories of violent crime: Aggravated Assault, Robbery and Murder (FBI tables 20, 21 and 22). We find that well over a million of these three combined occur every year in the USA, of which about a quarter (271,525 in 2009) are committed using firearms. Of these, muders with firearms run over twelve thousand a year for the nation as a whole. Meanwhile nationwide there are only about 200 cases a year of firearm use in "killing of a felon, during the commission of a felony, by a private citizen" (FBI Justifiable Homicide table 15).

So that's the annual ratio: 12,000 criminal shootings to 200 defensive ones

keithpiccirillo said...

20 miles from my home and the principal of the school resided here.
I am an ex-policeman and my wife is a teacher.
We're going to have this national debate, Gladwell's Tipping Point has arrived.
The list of obituaries is heart breaking and to add fuel to the fire the group 'Westboro Baptist Church' is scheduled to arrive tomorrow to protest at the funeral for the principal. It is a tough time to stay unemotional, but one thing I do know, we will be proactive and work for effective change.

Anonymous said...

Funny how this doesn't get much media attention. How would this show in your stats, Susan Watson?

Good Luck with your approach.

Clackamas man, armed, confronts mall shooter

by Mike Benner

Posted on December 14, 2012 at 11:03 PM
PORTLAND, Ore ... Nick Meli is emotionally drained. The 22-year-old was at Clackamas Town Center with a friend and her baby when a masked man opened fire.
"I heard three shots and turned and looked at Casey and said, 'are you serious?'"
The friend and baby hit the floor. Meli, who has a concealed carry permit, positioned himself behind a pillar.
"He was working on his rifle," said Meli. "He kept pulling the charging handle and hitting the side."
The break in gunfire allowed Meli to pull out his own gun, but he never took his eyes off the shooter.
"As I was going down to pull I saw someone in the back of the charlotte move and I knew if I fired and missed I could hit them."
Meli took cover inside a nearby store. He never pulled the trigger. He stands by that decision.
"I'm not beating myself up cause I didn't shoot him," said Meli. "I know after he saw me I think the last shot he fired was the one he used on himself."
The gunman was dead, but not before taking two innocent lives with him and taking the innocence of everyone else.
"I don't ever want to see anyone that way ever," said Meli. "It just bothers me."