To start with, devaluation is not an alternative to sovereign default. When a government decides to devalue, savers who trusted the currency to store their wealth, and creditors who bought bonds denominated in the currency, find the value of their assets cut. That’s sovereign default by a different name.

Official net U.K. debt excluding the effect of financial interventions such as bank bailouts is about 1 trillion pounds ($1.57 trillion), or 36,000 pounds per household. […]  The U.K. government must either default or modify unfunded promises if it is to resolve those debts. Devaluing the pound would be one way to achieve that.

Partly because Greece, Spain and Italy cannot devalue without leaving the euro, it is often argued that devaluation is a potential savior for countries such as the U.K., which luckily have their own currencies. This is deeply flawed logic. The answer to whatever the U.K.’s current problems are can hardly be more of the same policies that created those problems.

We need solutions to both of these problems [sovereign defaults and banking collapses] and, despite its many fans, currency devaluation addresses neither. It can mask the symptoms of the crisis, but it can’t cure them. Such policies are like plastering over a structural crack in a load- bearing wall: They end in a pile of rubble.

People tend to think of perception as a passive process. We see, hear, smell, taste or feel stimuli that impinge upon our senses. We think that if we are at all objective, we record what is actually there. Yet perception is demonstrably an active rather than a passive process; it constructs rather than records “reality.” You construct how you choose to see the world.

We see no more than we expect to see.  Our stereotyped notions block clear vision and crowd out imagination.

We make instantaneous judgments every day all predicated on what we see and hear based on our past experiences. 

[J]ust a few moments’ thinking time can prime you to perform either better or worse than normal at both mental and physical tasks.

In the wake of my colleague Harry McCracken’s sensible commentary on Richard Gaywood’sTUAW piece about the iPad’s viability as a content creation tool, I wanted to write from the standpoint of someone with friends in both the pro-visual and audio side of the biz who increasingly use tablets as go-to devices for serious musical and visual content.

Spoiler: Yes, I view tablets as content creation devices in their own right. And by “content creation,” I mean everything from keying in a book to tapping out a music album to finger-sketching serious visual art.

Ask many people to name a famous psychologist and they will invariably say Sigmund Freud. This perhaps exemplifies some of the main problems with psychology today, in that the public has been raised on a sugary diet of pop psychology and self-help manuals.

Studies have found that the general public hold psychology in high regard while simultaneously understanding little about what it actually is. This has perhaps led some in the media to label A-level psychology as soft and easy (try telling that to the multitude of students who fail the exam every year).

So what about Freud? First of all many in the profession would dispute and even reject outright his psychological credentials – he was a psychoanalyst (which isn’t the same as a psychologist).

Second, he wasn’t really a scientist because he didn’t gather and analyse evidence in an objective or scientific manner (most of his theories were based on a small sample of middle-class Austrian women).

Finally, if you choose to study psychology you may perhaps only catch a glimpse of Freud - and even then perhaps only in order to compare his unscientific methods to those of the more evidence based cognitive and biological ones.

This is not encouraging:

“I believe the decrease results from a climate that continues to grow less tolerant of creative expression. Everyone claims to love creativity, but very few of us understand what is really involved in creativity.”

“The decrease in Originality scores is an indirect measure of growing social pressures toward conformity and status quo, and increasing intolerance for new ideas.”

Dr. Kim adds, “The Creativity Crisis is not an event, but an era of continued decline in most measures of creativity. Reversing the trend will be a process that will require patience and perseverance, because the results will not be immediate. Part of the barriers to creativity results from public demands for immediate and measurable solutions in education, business, and government. Even in this hostile climate, we need creative solutions presented to reverse the trend.”

I’ve actually read (and enjoyed) numbers 1, 4 and 6 on this list from i09:

  1. _ Cryptonomicon _ by Neal Stephenson
  2. _ Dune _ by Frank Herbert
  3. _ Gravity’s Rainbow _ by Thomas Pynchon
  4. _ Foundation _ by Isaac Asimov
  5. _ Jonathan Strange & Mr. Norrell _ by Susanna Clarke
  6. _ 1984 _ by George Orwell
  7. _ First and Last Men and Starmaker _ by Olaf Stapledon
  8. _ The Long Tomorrow _ by Leigh Brackett
  9. _ Dhalgren _ by Samuel Delany
  10. _ Infinite Jest _ by David Foster Wallace

Over the past decade, studies have shown that both our thoughts and behaviors are heavily influenced by our surroundings, in ways we often fail to recognise.

One of the ways we become more creative is by exposing our minds to a broad variety of stimuli. The wider the selection of information you mentally digest–whether it be foreign movies, experimental novels or exotic travel–the more remote associations you’ll have in your arsenal. Or, in laymen’s terms, the more creative you’ll be.

We tend to find more insightful solutions to a problem when we’re in a good mood. One method experimentally proven for improving people’s moods is enjoyable scents. Positive scents don’t just make us feel better–they lead us to set higher goals for ourselves and experience a greater sense of self-efficacy.

Part of what makes bathroom visits a boon to creativity is that they represent one of the few times during the workday when our physiological attention is directed inward, mimicking the psychological experience of insight. But it’s not just inward attention that’s needed–it’s inward attention in the context of fresh ideas.

Good summary of a book by music historian Rosamond E. M. Harding, at Brain Pickings.  Some selected quotes:

[M]any ideas outside the subject become associated with it by a kind of interest association and acquire a similar tone. Thus they tend to become available at the same time as the ideas directly connected with the subject itself. The variety of interests tends to increase the richness of these extra ideas — ‘fringe-ideas’ — associated with the subject and thus to increase the possibilities of new and original combinations of thought.

Harding’s method for capturing and harnessing ideas:

(i) The ideas occurring when in the glow of inspiration are (a) briefly noted down and (b) checked.

(ii) (a) The subject is worked upon immediately, the thinker being wholly absorbed by it to the exclusion for the time being of everything else, or (b) The subject is set aside to develop and is then worked upon after an interval of time has elapsed, © the first draft of the completed work or half of it perhaps is put aside to ‘mature’ for a while; then it is again revised before publication.

(iii) Working at two or more subjects concurrently.

(iv) Working up the imagination to the state of vision and sometimes an audition.

(v) Trusting to feeling (or intuition, instinct).

(vi) Procedure when baffled by a problem; namely, laying the work aside and turning to something else. This process may be repeated many times during the course of a long work of any kind.

The rise of prediction markets started in the middle of the last decade, brought about by a combination of politics, psychology and technology.

The only good alternative to a few flawed opinions, some researchers argued, was a vast number of flawed opinions. The biases often canceled one another out. The legitimate information rose to the surface. It was the wisdom of crowds, as the writer James Surowiecki called his 2004 book.

The Internet made collecting the wisdom of crowds vastly easier than before.

The early successes of prediction markets were notable. […] Intrade was a more reliable guide to the 2006 midterm election than cable networks. On election night, its odds showed that the Democrats had become the favorites to retake the Senate, while television commentators were still telling viewers it was unlikely.

But the crowd was not everywhere wise. For one thing, many of the betting pools on Intrade and Betfair attract relatively few traders, in part because using them legally is cumbersome. […] The thinness of these markets can cause them to adjust too slowly to new information.

And there is this: If the circle of people who possess information is small enough […] the crowds may not have much wisdom to impart. “There is a class of markets that I think are basically pointless,” says Justin Wolfers, an economist whose research on prediction markets, much of it with Eric Zitzewitz of Dartmouth, has made him mostly a fan of them. “There is no widely available public information.”

But such schadenfreude raises a question: once you accept that prediction markets are flawed, do you turn back to the inside experts?

ALAS, the experts’ overall record remains as poor as the behavioral economists maintained - and often worse than the markets’ record. … [C]onsider the housing bubble: both the market and most experts missed it.

The answer, I think, is to take the best of what both experts and markets have to offer, realizing that the combination of the two offers a better window onto the future than either alone. Markets are at their best when they can synthesize large amounts of disparate information, as on an election night. Experts are most useful when a system exists to identify the most truly knowledgeable - a system that often resembles a market.