Wednesday, February 29, 2012

The Horror! The Horror! (Wall Street Bonus Cut Edition)

Bloomberg has a long, and only slightly snide take on the $200K is not wealthy trope making the rounds.  The focus of this piece is, however, those unfortunates in the Financial Sector who have had their bonuses cut, and are consequently up shit creek. 

 Its absolutely heart-wrenching - take the case of Schiff, a marketing director
His family rents the lower duplex of a brownstone in Cobble Hill, where his two children share a room. His 10-year- old daughter is a student at $32,000-a-year Poly Prep Country Day School in Brooklyn. His son, 7, will apply in a few years.
He wants ... “a room for each kid, three bedrooms, maybe four,” he said. “Imagine four bedrooms. You have the luxury of a guest room, how crazy is that?”
The family rents a three-bedroom summer house in Connecticut and will go there again this year for one month instead of four. Schiff said he brings home less than $200,000 after taxes, health-insurance and 401(k) contributions.
“I wouldn’t want to whine,” Schiff said. “All I want is the stuff that I always thought, growing up, that successful parents had.”
Not everyone is in such trouble though, thanks to their prudence in saving.  Consider Scheiner, a head-fund manager who
... spends about $500 a month to park one of his two Audis in a garage and at least $7,500 a year each for memberships at the Trump National Golf Club in Westchester and a gun club in upstate New York. A labradoodle named Zelda and a rescued bichon frise, Duke, cost $17,000 a year, including food, health care, boarding and a daily dog-walker who charges $17 each per outing, he said.

Still, he sold two motorcycles he didn’t use and called his Porsche 911 Carrera 4S Cabriolet “the Volkswagen of supercars.”
There is a lot more in this vein - go check it out...

$500? *And* a contract? Is Verizon Nuts?

Ah, the joys of living in a quasi-monopoly for telecom services.
Per BGR, the new Galaxy Tab 7.7 is going to be offered by Verizon for $500.  
After you plunk down $30/month on a 2 yr contract.
Yup, you read that right, thats after you shuck out $720 over two years - thats effectively $1220 for the Tab!
On the other hand, you could just buy an imported one for ~$500 on ebay.

Hmmm.  $500 vs $1220.

Way to go Verizon!

Update: Looks like I'm not the only one laffing, as Jeff points out that you could buy 6 (!) Kindle Fires for the same amount.

Tuesday, February 28, 2012

Wall Street, Branch Managers, and Doing the Right Thing

Or, should that be Not Doing the Right Thing?
A true story from The Reformed Broker...

Ext: Glass office building in January of 2009
Cut to interior of regional branch office of a national brokerage firm, flatscreen TVs line the walls while cubicles are festooned with copies of Tony Robbins books and golf course calendars.
Branch Manager: “Hey Dan*, when you get a moment I just need to sit with you your team for our annual review”
Dan: “I got some time, let’s go through it now if you want…”
BM: “Okay great, so first of all, how did things go with your clients last year?  I know it was the worst year for the markets since the crash of ’29 so…”
Dan: “Actually, we did really well, in April right after Bear Stearns went down we got out of most of the individual common stocks, we did some covered calls to hedge the ones we couldn’t get out of outright.  Most of the money went into Treasurys, we did some gold as well.
BM: “Wow, nicely done!  I’m sure the clients were pleased they didn’t get killed like everyone else, right?”
Dan: “All in all, we actually raised assets on a net basis last year, believe it or not. Our clients were killed elsewhere so they transferred a bunch of accounts in for us to keep safe, we liquidated a ton of stuff for people over the summer, prior to Lehman’s you know what.”
BM: “Yeah, I meant to tell you, you guys were the only team in the office who grew assets in 2008, very impressive.  How did you see it coming?”
Dan: “Thanks, you know I really didn’t predict that everything would melt down but I was doing a lot of reading outside of our own research.  People talking about the potential losses and instability of the system on the blogs and stuff – it just really resonated with us compared to our analysts who seemed to be looking for reasons to stay invested…”
BM: “Ummm, okay but you’re not reading the blogs from your office computer right?  You know that’s not compliant or encouraged or whatever, right?”
Dan: “I mean, I’m just trying to stay informed and I really don’t see how – ”
BM: “Anyway, what I need to talk with you guys about is your payout for 2009.  As you know, the grid is based on assets under management and fees and commissions generated.  Obviously we can’t count all the assets you went to cash with, you understand.”
Dan: “Wait, I don’t understand…”
BM: “To figure out your payout for the next 12 month cycle, we can only take into account the AUM you’ve got put to work, which means your gross payout is going to have to come down a bit for ’09.”
Dan: “But, I protected my clients – I even raised new money last year and nobody got hurt too badly!”
BM: “I understand completely, but that’s just how it works.  It won’t be cut that badly, let me run the numbers coming from corporate and I’ll give you an exact.”
Dan: “I have a better idea: How about, you cut my payout by even one basis point and I call your boss and then his boss.  Then I call the New York Times.  Then I come to your house and burn it to the ground.  How does that sound?”
BM: “Dan, calm down, no need to get crazy, I’m just doing my job as your manager, this is what it is.”
Dan: “I dare you to cut my payout for protecting my clients, just try it and watch what happens.”
*Dan is not his real name, but this exchange took place on the eve of Dan’s final sayonara to a firm he’d given 15 years to.  True story

TimeMachine on Mac is brilliant for backups, *except* when it doesn't work. (which will be when you need it the most)

That is all.

HTTPS encrypts the channel. Do *not* use it to make judgements about the endpoint!

That is all

Phone sizes - Never Underestimate the Idiocy of Cool

The Mobile World Congress just ended in Barcelona, and as you might imagine, there have been a bunch of new phones announced.  Check out the some of the phones
  • ZTE Era - 4.3"
  • Huawei Ascend D - 4.5"
  • Fujitsu - 4.6"
  • HTC One X - 4.7"
  • Samsung S3 - 4.8" (ok, this is a leaked spec)
  • Panasonic Eluga - 5"
Seriously - are we getting a little ridiculous here?  Or are we getting a lot ridiculous here?  Because clearly, this is ridiculous.  The old saw about walking around with an iPad pressed to your ear is becoming more and more likely...
I actually - briefly however - had one of the phones to the right, and it used to be so cool.  The point being that one should never under-estimate the Idiocy of Cool



Greece in "Selective Default" - Really Captain Obvious?

So, it looks like S&P has cut Greece's rating to "Selective Default"
To which, all I have to say is Could you possibly be later to the party?  Seriously, as Barry Ritholz points out
When a borrower informs their lenders that they will a) Not be repaying the full loan amount; and b) Not making those reduced payments on time — they are technically in default. When they then  fail to make the full payments on time, they are actually in default
Everybody has known for at least 6 months (you could argue for 2 yrs) that Greece was not going to be repaying the loan amounts on time.  Everybody!.

Brings up the obvious question - does anybody even care about the ratings agencies any more?
Anyone?
Bueller?
Bueller?

Double Dipping - AT&T Edition

Remember Ed Whiteacre (ex AT&T CEO) and his hilariously ridiculous statement about "paying for our pipes"?  To refresh your memory (italics mine)
How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?
How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?
Lets break down this bit, so that we are absolutely clear about it.
Kittehs!
There, you now have a pressing urge to go hit up YouTube, right?  Kittehs!
I'll make it easier for you

 You're watching the above Kitteh video, right?  Of course you are....
The data came down the pipe from Verizon / Comcast / Charter / whoever to you, and you're happily watching said Kitteh video.
Who paid for the pipe from Verizon / whoever to you?  Why, you did, right?  Thats what your monthly bill goes to.  Simple
Where did that data come from?  YouTube, right?
So, what our boy (Ed) seems to be implying is that YouTube isn't paying for this.   Remember
There's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using
Thats good, and fair, and the American way, right?  Except, YouTube is damn well paying for these pipes!! 
YouTube has data centers, big honking data centers, and big honking pipes from those data-centers (ok, teensy fibre pipes, but you get the point), and they're paying huge sums of money to their carriers for their data.  Oh, they may be paying less than you and I, but thats what comes with negotiation power.
But there is no Free Lunch going on here.
Remember That.

So, of course, AT&T is trying this again.  In an interview with the WSJ, John Donovan (CEO AT&T) floated the same bloody idea again, just in a different guise.  Basically, he wants the providers of data services to pay for the data used by those services.
Again, sounds nice and neat and cool, except that they are already paying for that data!
Seriously, the only reason this is an issue is because the U.S. ISPs are imposing bandwidth caps on the consumer end.  They need to make more money somewhere, and since
   - the costs of providing data services are going down
   - there doesnt actually seem to be a spectrum shortage in the wireless world
the only way out is to create artificial scarcity.
So, cut the amount of data people can use (I love the absolutely arbitrary "top 5%" rule), and then charge the provider for that very same data. 
Brilliant!

I love living in a quasi-monopolistic world.  Services are *so* much better...



Integrating my Phone w/ my car's GPS system

@tomheinan recently noted that it should be possible to send addresses from ones cellphone to the car's GPS system.  Seriously, this is so brain-deadly obvious, its obviously not something that we're going to see soon.
Unless, of course, you're Samsung, in which case it turns out that you are thinking about precisely this.
Or, to be a wee bit more technically accurate, they're talking about creating
... an in-car solution that seamlessly connects Samsung smartphones to Toyota's In-Vehicle Infotainment (IVI) system.   
The collaboration will see the integration of a wide array of Samsung's smartphone and mobile communication technologies with Toyota's cutting-edge IVI to add enhanced connectivity, multimedia capabilities and internet services.
Absolutely no more information here.  But its been a long time coming, and I, for one, welcome it.  Mind you, this does coincide with me (most likely) selling my car since it doesnt look like we'll ever use the damn thing in NYC...

Swapping SIMs when traveling - Obsolete?

One of the first things I do when I travel (Not in the U.S.!) is wander over to the nearest tabac / tabacchio / mobile store / whatever and buy a local SIM.  My Nexus Prime works in pretty much all countries out there (the good news), but roaming rates are insane the world over (the bad news).  Consequently, a simple 10 Euro / Pound / whatever SIM gives me enough data to tide me through the trip.

Note:  I said data.  Thats because most everything I do with the phone consists of Maps / Camera / Email, and quite possibly in that order.

I've built up quite a handy collection of SIMs, and as long as I've been to said country recently, its all good - I can even top up online.  But, if I haven't been for a while, I have to repeat the SIM Song And Dance, which invariably involves some combination of passport / address / code fiscale / whatever and other such idiocies.  Not even remotely insurmountable, but still Just Enough Friction to be annoying.

You would think that it would be a lot easier to associate a SIM with a person.  I mean, why can't they just use my existing T-Mobile SIM from the U.S., and just register it on their network?  Pretty much every phone every made has an option where you can "Pick Your Carrier", which should solve all these issues, right?
Turns out, it is really not that simple.  Carriers pre-register their SIMs, i.e., deep in the guts of their incredibly complicated - and quite possibly antiquated - provisioning system, there is a list of every SIM that is "official", and it can only be updated through some Very Special Processes that involves high magic, incantations, and pointy (non-Pope) hats. 

This is the point at which it turns out that  AT&T might actually be able to help. (Wow.  Did you ever think you'd hear anybody say that?).  They've got a new global platform in play, which allows carriers  to do exactly that, i.e., have one SIM that can be registered across multiple carriers.  Mind you, when I say platform, I mean Something that the carriers use deep in the guts of their data centers.  In short, if the uptake is high enough, the next time I walk into an Orange store in France to get a local data plan for the next 5 days (10 Euro) they'll just grab the number of my existing SIM, twiddle a few bits, and I'll be done.  No fuss, no muss.


Mind you, I do see tremendous room for consumer hell here.  Imagine the fun when I do the above, and then don't switch my carrier to Orange.  The next thing I know, I've got a $5K roaming bill from AT&T.  Which, quite possibly is something that they've already thought about, and are chuckling about :-)

Monday, February 27, 2012

Drool. Mercedes Benz 300SL. Drool.

And I can't even *use* a car (New York, y'see?)

ht Barry Ritholz

Ragu Bolognese. In a pressure cooker. Brilliant. Who knew?

Really, it took about 40 minutes of prep, and 20 minutes to cook, and it is easily the silkiest Ragu that I've ever made (and I make a mean Ragu Bolognese if I say so myself).
That said, I have to admit that by not having it simmer for three hours, the house has not been filled with yummy Ragu-y aromae, and is clearly the poorer for it.
So, without further ado, Pressure Cooker Ragu Bolognese

Ingredients
1 cup diced Guanciale
5 'baby' carrots
2 celery stems
1 small onion
1 lb. each Ground Beef, Pork, and Lamb
1 cup red wine
4 tbsp tomato paste dissolved in a cup of water
4 cups whole milk
3 tbsp Nuoc Mam (Fish Sauce).  Really.  Trust me.

 (It goes without saying, but get the best damn ingredients that you can...)

Put the pressure cooker on medium-low heat, and toss the guanciale in.  While it slowly melts into a puddle of pork-fat goodness, chuck the carrots, celery and onion into a food processor and whir away till its all mush.  Toss the aforesaid mush into the pressure cooker with the (hopefully largely melted.  If not wait!) guanciale, and stir patiently for the next 20 minutes or so till the mush - technically called soffrito - has lost all its liquid, and changed color to a medium brown.  What you're seeing is all those wonderful wonderful maillard reactions that add oodles of flavor.  But, be vewy vewy careful, since it - literally - takes no time to go from this stage to the "black and definitely burnt" stage! 
Now, chuck in the ground meat, all of it if you please, and poke / mush/ stir around till its
   (a) broken up, and
   (b) no longer red.
If you want to speed this stage up, you can - just turn the heat up to medium or a bit more.  Just be aware though that the higher the heat, the faster/harder you are going to have to poke / mush / stir to prevent the whole mess from burning…
Once it is all browned, add the wine, and keep stirring till the wine has reduced to, well, nothing.  You'll know when the amount of steam coming off the meat decreases quite drastically (a nifty trick!).  Add in the dissolved tomato paste, and stir the goop for a few minutes. 
Now for the secret ingredient - add the Fish Sauce.  Don't worry, the odor vanishes within a few minutes, but what it does leave behind is a boatload of lip-smacking umami, which you'll really really appreciate when its all done.
If you've done everything properly, or even reasonably properly, or, heck, basically not burnt stuff to a crisp, you should have taken roughly 40 minutes to get to this stage.
Finally, add the milk, stir it all in till its nicely mixed up, put the lid on the pressure cooker, and cook at the highest pressure for 20 minutes.
Turn off the heat, let the pressure come down take the lid off, and marvel at the silkiest smoothest yummiest bestest Ragu Bolognese that you've ever made and/or eaten in your life.

For even more enjoyment, consume with home made taglaiatelle or spaghetti.  Or, take a tip from my friends (Yes Greg and Farhad.  I mean you), and just scoop the stuff into a bowl and eat directly sans pasta…

Update:  I know, I know, this is Pressure Cooker Ragu Bolognese, but if you happen to not have/want a pressure cooker (Tammy...), then 
  • Use a heavy-bottomed stock-pot instead of the pressure cooker (you don't want the ragu to burn)
  • Follow the recipe up the point where you put the lid on the pressure cooker
  • Put a lid on the pot, and turn the heat down low.  Real low.  So low that the ragu is - barely - bubbling. This is not a boil.  It should be more like - bubble <pause> <pause> bubble <pause> <pause> bubble etc.
  • Let the whole thing simmer for a two, maybe three hours.  If/when it starts getting dry, add more milk (unlike the pressure cooker, there will be evaporation here!)  Note that you want to bring the milk to a boil before you add it, otherwise it'll cool the ragu!
  • There is really no "done" stage.  At some point around 2 - 3 hours down the road, the aroma will drive you crazy, and you will eat it :-)


 

I changed all my passwords to "incorrect". So whenever I forget, it will tell me "Your password is incorrect."

via @AlanHungover

Sunday, February 26, 2012

The Path to Enlightenment begins with Dulce de Leche

- Scott @ Rosarito Fish Shack

ed: From Argentina, of course...

Our Nation's Greatest Threat - The Dutch!

From Jonathan Turley ref. Santorum's expose on the Dutch euthanasia...
(It) is good to finally see a politician willing to take on our greatest threat: the Dutch. Dutch propagandists like Rembrandt, Vermeer and Van Gogh have already infiltrated our schools and museums. Our leaders (except Santorum) are deaf to the growing sound of their wooden-shoe stomping, marzipan-eating hordes. I for one will be on the ramparts with Rick wearing my do not euthanize bracelet before I eat a single herring from the hands of our Dutch overlords.

Saturday, February 25, 2012

The Warren Buffet Newspaper Toss

From Warren Buffet's Berkshire Hathaway letter to shareholders (page 20)
Late last year, Berkshire purchased the Omaha World-Herald and, in my meeting with its shareholder-employees, I told of the folding and throwing skills I developed while delivering 500,000 papers as a teenager.
I immediately saw skepticism in the eyes of the audience. That was no surprise to me. After all, the reporters’ mantra is: “If your mother says she loves you, check it out.” So now I have to back up my claim. At the meeting, I will take on all comers in making 35-foot tosses of the World-Herald to a Clayton porch. Any challenger whose paper lands closer to the doorstep than mine will receive a dilly bar. I’ve asked Dairy Queen to supply several for the contest, though I doubt that any will be needed. We will have a large stack of papers. Grab one. Fold it (no rubber bands). Take your best shot. Make my day.
I love the guy...

Big_Tunnel + Limestone + Acid_Rain =:= Oh_Shit

Ever hear of something called The Delaware Aqueduct?

Yeah, I guessed not.

Its an 85 mile long set of three tunnels in New York connecting the Rondout Reservoir in Ulster county, through the West Branch Reservoir in Putnam county, and ending up in the Hillview reservoir in Yonkers.

Or, for those of you who aren't from New York (or the U.S.), it basically takes water from a reservoir on that side of the Hudson river, and brings it over to New York city, which is on this side of the Hudson river.
See, the thing is, there is this area called The Catskill/Delaware Watershed, which gets a lot of rain.  A ton of rain.  So much rain that, well, its got more water than you can shake many sticks at.  As a result, in the early 20th century, they started building reservoirs there to collect water for New York City which uses that self-same ton of water for all sorts of water-y purposes. 

Technically, there are three reservoirs there at Neversink, Ashokan, Schoharie, Pepacton, and Cannonsville, but if you really want to know more, go hit up Wikipedia.  For our purposes, water from Cannonsville, Pepacton, and Neversink all end up going through a bunch of tunnels, and end up in the Rondout Reservoir, and that, my friends, is where the fun begins. 
The Delaware Aqueduct that I mentioned earlier is a tunnel that takes water from the Rondout reservoir - which is 840 ft. above sea level, and goes waaay down (sometimes almost 1500 feet below sea level), beore making it to the West Branch reservoir.  Its huge, huge, being almost 14 ft. wide, and carrying about 1.3 billion gallons of water per day.  Which, by any measurement, is a lot of water.  Oh, by the way, thats almost exactly half the water used by New York City every day.

And there, my friends, lies a tale.  Y'see, its got a tiny leak in it, losing about 35 million gallons of water every day.  Ok, maybe thats not a tiny leak.  Its the BFG of leaks (a BFL?). 
What happened is that way back when they build this tunnel back in the early 1940s, nobody had ever heard of acid rain.  So they just dug and dug, and when they hit this huge patch of limestone, they just dug right through it.
Y'know what limestone is, right?  Basically calcium carbonate.  And acid rain is, well, acidic. You mix the two together, and the limestone basically just dissolves.  Heres a nice video that points this out since a video is worth 1000**2 words.
So our brave tunnel diggers sent all that water from the Catskills surging through limestone, which has - oh so helpfully and valiantly - dissolved and sprung innumerable growing leaks with no end in sight. Just imagine 35 million gallons of water suddenly showing up underground.  Every day.  No end in sight.  Not too helpful to anything built above it, e.g. Warwasing county.

The thing is, it isn't trivial to fix this.  The height differential in the tunnel reaches up to almost 2400 ft, which means that this hosepipe is under an enormous amount of pressure, which means that its basically not feasible to work in the tunnel.  If you somehow managed to be in there, you'd be squashed flat in, well, no time flat.  Imagine scuba diving at 2500ft.  One...Just...Doesn't. (Ok, technically one *does* at 600 ft to check some of the shallower areas, but lets just leave it at that)

So, enter alternative plan B, which is to dig a second tunnel, and basically shut this tunnel down (and oh, not have the second tunnel go through limestone).  
Its supposed to be three miles long, and goes from Newburgh on the left to Wappinger on the right.  Once done, they'll hook it up to the aqueduct, and shut down the old tunnel - which will be tricky in and as of itself...
Building it is going to be tricky too, since people will be working at depth - breathing helium, protecting against the bends, oh it'll not be a day in the park thats for sure.
And finally, they're going to start this next year, spend a ton of money ($1.2 billion, sure to rise), and end in 2017.

So, whats the point behind all this?
Thanks to budgetary issues, they've shelved this project.  Oh, they might eventually get it back on track, but who knows when.  And the thing is, this is exactly the type of project that qualifies as Really Really Useful Infrastructure Spending.  Its not a Bridge To Nowhere.  Its not Yet Another NFL Stadium Funded By The Public.  And its really, really, not some kind of vanity public sculpture. 


Sigh.  The problem with infrastructure is that we lump it all into the same bucket, and consequently, all the good stuff (like this) ends up getting tarred with the same brush as the idiotic crap.

I weep for our country...




(Watching Greece is like) watching a medieval doctor apply more leeches to a patient that has already passed out from blood loss

Friday, February 24, 2012

Private Equity - Maybe not so heavily leveraged in the future?

From the ever eloquent Kevin Drum
If a deal makes no financial sense unless Uncle Sam gives you a big writeoff, then maybe it just doesn't make sense. Lowering the writeoff to 50% would still keep moderately leveraged buyouts profitable, but it would probably kill off the most heavily leveraged ones, which are also generally the most destructive. I think I could live with that.
The context being that there is an entire segment of the P.E. industry (if that is the right term.  'industry'.  hah) that exists solely because of what can best be described as tax quirks (debt and equity not being on an equal footing).


Suburban Sprawl is Kryptonite to all Mass Transit Powers

That is all

The Greek "Bailout" (Default, really)

Why they persist on calling it a Bailout is utterly beyond me, its the biggest non-default Default ever, from what I can tell.  Felix Salmon has all the gory details...
The document gives us most — but not all — of the information that bondholders will need in order to be able to decide whether or not they’re going to tender their bonds into the exchange. It’s written in very dense legalese — the first sentence is 70 words long, with only one comma — so let me try to pull out the important bits.
This is complicated, as you might imagine. It makes a significant difference (a) what bonds you hold, whether they’re Greek law or English law, and also (b) where you live, whether it’s in Europe or in the US. (There are also, it turns out, Swiss-law bonds as well, which have their own very special treatment.) But at the end of the day, most bondholders are going to get pretty much the same things when they tender their bonds; you’ll forgive me for ignoring some of the more niggly stuff.
Firstly, they’re going to receive new Greek bonds, maturing in 2042. It doesn’t matter whether the bonds you’re holding mature on March 20, or whether they mature in 30 years’ time — everybody gets the same new long-dated bonds, according to the face value of what they now own. In other words, the value of Greek bonds right now is wholly a function of what their face value is, and has nothing to do with their coupon or their maturity date.
The new Greek bonds have a step-up coupon: 2% through 2015, then 3% through 2020, then 3.65% in 2021, and then 4.3% from 2022 through 2042. Bondholders will receive new bonds with a face value of €315 for every €1,000 of old bonds they hold. (Again, remember that it’s face value which matters here, not market price.) What’s the market price of the new bonds going to be? Not very much; my guess is that they’ll trade at roughly 40% of face value. Which means that the “NPV haircut”, as far as the new Greek obligations are concerned, is somewhere on the order of 87%.
But bondholders will get more than just Greek bonds; they will also get new EFSF notes. The new EFSF notes come in two flavors: one-year notes and two-year notes; their face value is going to be 15% of the face value of the tendered bonds. The working assumption right now is that they’re going to be worth €150 for every €1,000 of bonds tendered: in other words, if you look at the value of what bondholders are going to be receiving in exchange for their bonds, it’s going to be split roughly 50-50 between Greek bonds and EFSF notes.
We don’t know that for sure, however, because for reasons I don’t pretend to understand, the coupon on the EFSF notes is still undetermined; we’re just told that it will be revealed on the Issue Date. (And no, we’re not told what the Issue Date is going to be.) In any event, bondholders in the US won’t receive EFSF notes at all; instead, they’ll receive “the cash proceeds realized from the sale of the EFSF notes they would otherwise have received”.
Finally, bondholders will receive GDP warrants of some description, which are the vaguest thing of all. “The GDP-linked Securities will provide for annual payments beginning in 2015 of an amount of up to 1% of their notional amount in the event the Republic’s nominal GDP exceeds a defined threshold and the Republic has positive GDP growth in real terms in excess of specified targets.” How much are these warrants going to be worth? The working assumption has to be zero, at least until we get some numbers for the minimum GDP and GDP growth that Greece needs in order to pay out on them.

Theres a whole bunch more - go check it out...

Workflow as as Service. WaaS? Well, why not?

WaaS is basically what Amazon has just released with their Amazon Simple Workflow (SWF).  From the blog post
This new service gives you the ability to build and run distributed, fault-tolerant applications that span multiple systems (cloud-based, on-premise, or both). Amazon Simple Workflow coordinates the flow of synchronous or asynchronous tasks (logical application steps) so that you can focus on your business and your application instead of having to worry about the infrastructure
Picture a business process which consists of a bunch of individual tasks that need to be done in some specific sequence based on various inputs.  e.g.,  
  • When an order comes in, check to see if we have inventory. 
  • If we do, fill the order.
  • If we don't, put the order in the "back-ordered" pile.
Each of these tasks is called an Action.  A given Action is performed by a Worker. The whole business process is called a Workflow.  And the thingy doing all the decision making is called a Decider.
As Amazon puts it, you can use their service to assign Actions to Workers, store these Actions in Queues waiting for available workers, track the progress of Workers, blah, blah, blah
All fair and good, and pretty standard for Workflow systems.  What makes this particularly compelling is two simple yet remarkable features
  1. You can write your Workers and Deciders in your language of choice.  No need to be stuck with some goofy workflow language that is forced on you (yes, I'm looking at all of you out there)
  2. You can auto-scale your workers and deciders through AWS.
Simple enough right?  Except that what it means is that you now have the mechanism to automagically grow/shrink your workflow based on inputs pretty much the way you do the rest of your infrastructure (assuming that you are already cloud-based...)

Nifty.  Remarkably nifty.  And game-changing for sure...

InfoChimps - Bringing 'Real World' Expertise to Hadoop

InfoChimps  is offering cloud-based BigData platform to provide out-of-the-box (or is that out-of-the-cloud?) Hadoop service.  Plenty of details at the link, as well as GigaOm commentary here.
The new Infochimps Platform is essentially a publicly available version of what the company has built internally to process and analyze the data it stores within its marketplace. As Infochimps CEO Joe Kelly puts it, the company is “giving folks … the iPod to our iTunes.”
Me, I think this is the start of something really good.
The thing is, there is a ton of activity in the Hadoop space, with everybody and their brother tossing their hat into the ring providing some set of ancillary services based on Hadoop.
The problem with all of these are that they presume you know what you are doing!
Needless to say, you don't.
Really.
You...Just...Don't.
Let me be a bit clearer - the vast majority of people out there who could use Hadoop-based services fall into two categories
  1. People who are generating a ton of data, need to do something with it, and have no clue whatsoever as to how.  (If they don't know what, then they're clearly in the wrong biz.)
  2. People who know how, but don't have the first idea of how one sets up the platform/infrastructure to "do the how"
The beautiful thing about what InfoChimps has done is that they are providing answers to both (1) and (2), and much more importantly, based on real-world experience
They've already dealt with the pain of setting up clusters, figuring out what actions need to be monitored, how to move data around and partition it, how to track batch jobs, etc., etc.  Its all stuff that you'd eventually figure out after a lot of trial and error (and trust me, there will be trial and error), but now you can take advantage of the lessons they've learned!

Its not unlike what Amazon has done with AWS, just at a different level.  Kudos to InfoChimps - I hope to see more products and services doing the same thing in the future...

Economists - Not Enough Nerdosity

Noah Smith asks for Economists to release their inner nerds -
Every field of study has its own peculiar conventions of how "very smart people" are supposed to act. If you're in physics, you should have unkempt hair, juggle or do some other unusual hobby, be sexually promiscuous, and try to make your intellectual achievements look effortless (i.e. you should do a Feynman or Einstein impression). If you're in computer science you should talk like a character out of a Neal Stephenson novel, use hacker jargon, and know every XKCD joke by heart. If you're in math, you should either act genuinely crazy (like Grothendieck or Perelman) or very soft-spoken and mild (like Fefferman or Tao) - i.e., you should convey the impression that you have a lot of very powerful software running in the background of your brain. I'm not sure what biologists act like, but it seems to include wearing a goofy grin all the time.

But all of these disciplines share some common markers of nerdiness. One of these is enthusiasm for new technologies. Another is a love of - appropriately enough - science fiction. the "gee whiz" attitude is an integral part of being a science nerd.

Economics is different. Very few economists read a lot of sci-fi (or, at least, are reluctant to admit it openly). At social gatherings, economists tend to discuss sports, politics, and money rather than augmented reality or driverless cars. They tend to be better-dressed and better-coiffed than natural scientists. In other words, they are a little bit like MBAs. In this way, economists show that they are about Business; that they are worthy of consulting gigs and Congressional testimony.
Personally, I've always felt that it was all about the hair. You can always picture geek hair - it ranges anywhere from full-shaven to full-on-mad-scientist, with stops inbetween for bad-haircut, inappropriate-product-usage, and holy-shit-what-happened-to-your-eyebrows.  But economists always, always have CEO level hair.  And thats just wrong...

Thursday, February 23, 2012

Modern Monetary Theory (Huh? Whut?)

The Washington Post has a long (5 pages!) article 'bout Modern Monetary Theory, a "coming into the mainstream" school of macroeconomics that emerged in the 90s, and is kinda, sorta, vaguely post-Keynsian.
 
Mind you, after the entertainment caused over the last few decades by the Chicago School, I'll take shamanism as an alternative, but still MMT does seem to have some nifty ideas going for it.

The article was somewhat (but only somewhat) well written, but it doesnt capture the essential difference of MMT.  Now, along comes Isabella Kaminska (of FT Alphaville fame), with a nice writeup on MMT emphasizing this very point.
(the theory) is naturally divisive because most of the time it fails to communicate its message succinctly. Which is weird, since the premise is actually fairly simple to understand. We’d say it’s akin to looking at an autostereogram. Once you get it, you never see things quite the same way again. But at the same time, try as they might, some people will never be able to see the image. Ever.

And it all rests on one key fact (at least as far as we can tell!) . Rather than treating money as an object of wealth or somebody else’s debt, a means to trade … MMT treats money as a claim on wealth, a product of trade.
And in this area, the government acts as the ultimate clearinghouse, as a
clearer and intermediary to the trillions of transactions and trades that take place in its economy every day.
In short, fiat money is basically scrip from the gummit that can be used to standardize all those zillions of little tiny trades that we do as part of our daily lives.

Theres more, much more.  Go read it.

TSA "trainees" are part of an elaborate behavioral profiling scheme to see who cracks

That is all

Wednesday, February 22, 2012

They *still* phish this badly? Really?

This showed up in the Google-Bag just now
It is my pleasure to have this opportunity to offer you a business transaction, which will yield high dividends for both of us.. The following is a brief overview on what the offer entails.. This offer entails you to stand as a supplier of a certain product to my company. I will secure a supply contract deal for you as our supplier of the product.
This product is currently being sold by the manufacturer at a very low price and can be sold to my company at a much higher price.(The margin is over 90%) , getting my company to purchase the product at your fixed price is not a problem, my company is in need of this product. Basically what you are doing is to purchase this product at a relatively low price and sell it to my company at a marked up price, it is a legal transaction and I need you to partner with me on this project.please indicate your phone number in your reply if its different from the number stated above..

So, why exactly am I supposed to fall for this?  'cos I have no clue what they're talking about?  Its so bad, I'm not even going to bother fisking it...

Google Transit (Reshaping The World Edition)

Xconomy has a lengthy yet compelling writeup about the democratization of transit information - and Google's role therein.
The file format that Google invented in 2006 to make all this possible, called GTFS, has become the de facto world standard for sharing transit data. And now Google is pushing a related standard that enables agencies to alert riders about service delays in real time—thus answering that age-old question, “When’s my bus coming?” So far, Google is displaying these live transit updates for only four U.S. cities (Boston, Portland, OR, San Diego, and San Francisco) and two European cities (Madrid, Spain, and Turin, Italy). But it hopes to add many, many more.
The part I find fascinating is that people still want to hoard information, completely explaining why it took so long for this information to become available in NY and DC, two cities that I spend quite some time in
The rise of GTFS has also helped to spur a larger “open government data” movement that cuts across areas like healthcare, energy, and education. And at transit agencies that were initially slow to publish their route and schedule information in digital form, including New York City’s MTA and Washington, D.C.’s Metro system, it has created irresistible pressure to open the data vaults and cooperate with outside developers.
Mind you, this has little to do with "Information wants to be free", etc. etc.  Public transit is a classic example of increasing returns, i.e., the more people that use it, the more relevant and useful (and cost-effective!) it is.  Similarly, the meta-data around public transit - schedules, routes, outages - is exactly the type of information that you want people to have widespread and trivial access to, something that can be best achieved by minimizing barriers to adoption - a classic win-win situation.  Probably something that became apparent to the fine folks in NY/DC eventually :-)


Beer Bikes Banned? Oh Noes!

I bring you the following from the Christian Science Monitor
Classified as bicycles, they can ride on the streets and park wherever, and they don’t pollute. But on the street, they look like a restaurant on wheels: wide, pedal-powered, multiseat conference bikes taking between 10 and 20 party-goers zigzagging through the most crowded shopping or tourist areas ... Now the “beer bikes,” born in neighboring Holland, are under scrutiny.
Last month, a court in the western city of Düsseldorf formally banned them, saying that the beer bikes are a traffic nuisance. The court case could bolster efforts under way in German cities from Berlin to Münster to ban the contraptions.
I weep for our future...

Macroeconomics - The Streetlight effect

Noah Smith has rips DSGE a bit of a new one.  Mind you, not as comprehensively and as thoroughly as John Quiggins in Zombie Economics (What?  You haven't read it?  You Must!), but its all the more savage because it is somewhat incidental to his main point, that a lot of modern Macroeconomics is politically motivated.

To quote
By contrast, it's pretty easy to make a DSGE model in which government plays no useful role, and can only mess things up. So what ends up happening? You guessed it: a macro literature where most papers have only a very limited role for government.

In other words, a macro literature whose policy advice is heavily tilted toward the political preferences of conservatives.

Is that bad? Not necessarily. If the facts had a well-known conservative bias - i.e., if the models that fit the data best were the models that implied no role for government - then that would just be too bad for liberals! Liberals would have to accept that their ideas were contradicted by the best scientific evidence available.

But I contend that in the case of DSGE models, conservative policy recommendations don't emerge because they come from the best models, but only because they come from the easiest models. Thus, the conservative slant of modern macro comes not from the weight of evidence, but from the combination of publication bias and the inherent unwieldiness of the DSGE framework.
In short, the reason that most conservative economists believe in the 'No Govt.  Rrrrrr' approach to existence is that the easiest models for them to work with is one in which there is No Govt.! 
This is pretty much exactly the same as the chap searching for his keys under a streetlight over here, even though he dropped the keys over there, since its much brighter under the streetlight...