And you are here why?

A quick recap ( from an earlier post ) ... The ECB offered "unlimited" cheap ( 1%! ) 3 year loans to the Euro banks, accepting as collateral, well, anything (as long as it is A- or better. The plan is that The banks park all their toilet-pape r bonds at the ECB, and get a ton of money from it This money is used to provide the banks liquidity - which they are desperately short of They use this money to make loans, thus preventing The Great Depression II They also use this mechanism to buy up sovereign debt and park that at the bank (the Carry Trade is back! w00t!), thus reducing the borrowing costs of the countries. Basically, Backdoor QE by the ECB used to solve the entire #euromess in one swell foop. How well did this work? As it turns out, not so well.  Lets take this one at a time Bank Liquidity : The banks borrowed 498B Euros from the ECB of which they've deposited 412B Euros back at the ECB.  You're probably thinking this sounds good, vague...

We provide tax deductions for interest payments, but tax dividends, making debt more advantageous than equity.  Tyler Cowen explains why ... A good question, but there is a problem with treating debt payments any other way.  In general,   expenses   must be deductible in some manner, if the government is to tax corporations on net rather than gross returns, however roughly or imperfectly.  And it is difficult not to treat interest like an expense of some kind.  For instance de facto interest could be embedded in repurchase agreements, which for the purposes of tax law would look more like “real expenses” and thus would be tax deductible.  The borrowing would still go on, but in a more awkward fashion. Without tax deductible interest payments, there would be an excess incentive to pay cash up front for assets rather than doing a mix of borrowing and holding cash for option demand.  Corporations would go bankrupt more easily and in general f...

Stephanie Rieger initiated the latest dust-up involving screen sizes.   The problem, as she points out, is that "Android" really isn't about one device, and one screen size - its based on a combination of "Actual" screen resolution Browser views (browsers embedded in other apps like facebook and twitter), where the "shell" sucks up some real-estate Settings like "Zoom" Viewport orientation based on portrait/landscape and oh, so many more things (By the way, the article is about Android, but the same applies across iOS, RIM, etc.) This actually takes me back to my early days in the web-world (1993, natch) - when you had only Mosaic (and Netscape 0.9 in '94) to contend with design decisions were easy.  Very shortly thereafter, life became a living hell , as you had to start designing towards various iterations of Netscape, since each version came out with its new set of HTML tags that made life so much easier, yet complete...

Kevin Drum reiterates his point on hedge funds   Money invested in hedge funds since 2003 would have generated a return of 18% through November, according to data compiled by Hedge Fund Research. That puts it far behind the Standard & Poor’s 500-stock index, which has generated returns of 29% over that same period, once dividends are factored in, according to Simon Lack of SL Advisors. The hedge fund underperformance is even starker when placed next to a small basket of investment grade corporate bonds, as measured by the Dow Jones Corporate Bond Index. That benchmark has gained 77% since 2003. Factor in hedge fund mangers’ customary 2% management fee and a 20% cut in profits, and the gap widens even more Of course, this is when people trot out the standard excuse - "If you ignore the absolute chaos that was caused during the financial crisis, hedge funds have made a ton of money ". Really? Really? And, "If you ignore all the stocks I own that lost mone...

SMBC brings us this gem

FT.com has the story The Treasury in Rome sold €2.5bn of bonds due in 2014 at a yield of 5.62 per cent on Thursday, down from 7.89 per cent at the previous sale on November 29, and priced €2.5bn of 2022 bonds to yield 6.98 per cent, compared with 7.56 per cent on November 29. Italy also sold €2bn worth of bonds due in 2021 and a floating-rate security due in 2018. However, the auction of both the 2014 and 2021 maturity notes fell short of the Treasury’s target, clouding what would otherwise have been a relatively successful follow-up to the six-month bill auction. Let met get this straight    - They sold 10 yr bonds at 6.98% instead of 7.56%.  Yay!  Victory!  Eurocrisis resolved!  Thats sarcasm, in case you didnt figure it out    - They didnt sell as many as they were expecting.  Thats not good by any stretch of the imagination The second point is particularly bad, since the ECB LTRO stuff basically had the same maturity, and sold...

Edward A. Lee (of Ptolemy fame) is the Robert S. Pepper Distinguished Professor at U.C. Berkeley, and knows a thing or two about designing and building concurrent systems.  He also has a hate-hate relationship with Threads, as evidenced by my perusal of The Problem with Threads (Jan 2006).  For example Threads [...] are wildly non-deterministic  non-trivial multi-threaded programs are incomprehensible to humans we […] require that programmers of multi-threaded systems be insane. Were they sane, they could not understand their programs If we expect concurrent programming to be mainstream, and if we demand reliability and predictability from programs, then we must discard threads as a programming model  And there is more, oh so much more.  Just read the whole thing - its wickedly entertaining, and makes its points with no small amount of wit and humor.  Herewith a quick look at the points made in the paper. Note : All of the below applies to T...

If your service is running on EC2, you probably already know about Spot Instances .  But for those of you who don't, this is a service where Amazon allows you to bid on unused capacity in their data-centers.  The pricing varies based on supply and demand, but is typically somewhere between 25% and 50% the cost of a "reserved" instance (e.g., right now, a "Small" on-demand instance is $0.085/hr, while the spot cost is $0.027/hr). Amazon has done a lot of work in making these very easy to use, everything from the bidding, to the setup, to VPC integration. As you might imagine, this has not gone un-noticed, and there are any number of companies that have gone the spot right towards their infrastructure - using them to soak up the load associated with excess capacity. You even have guides out there on how to setup and use spot instances, a sure sign that its ubiquitous. So, whats the catch? As it turns out, the correct question is, what are the two catc...

One of the more depressing things about going to Iceland (or Norway, or Australia, or Korea, or Latvia, or Romania, or well, unbelievably a bunch of countries out there ) is that they have ridiculously good internet access at ridiculously low costs ( $46 for 100/100 in Sweden ).  Towards this, I'm really holding out for what sonic.net is trying to do in SF .    So for those watching U.S. broadband policy, between Google’s plans to deploy fiber to the home in both Kansas Cities, a few municipal networks, Verizon’s FiOS network and Sonic.net’s plans, we’re getting more people to a gigabit. It can be done, so let’s see what we can learn as these companies push ahead. And when others say it can’t be done, perhaps we’ll have the information that proves them wrong.  Given that Verizon has basically shelved FiOS , its pretty much up to Google, Sonic.net, and a couple of random municipal initiatives like UTOPIA ,  to keep any hopes of high speed net-access aliv...

There is an article up on Interfluidity which describes why opacity in Finance is a good thing. The argument in its simplest form is as follows Financial systems help us humans overcome a collective action problem.  In "large scale" projects, it is effectively impossible for a single person to make valid judgements about the risks.  ( Think of a power plant - nobody, but nobody understands all the moving parts.  How on earth is a barrista supposed to know whether the business plan for its construction is a valid one? ).   In this type of world there are actually 2 equilbria - one in which everybody automagically trusts that things will work, and you have an investment boom, and another in which nobody invests, and everybody stays poor (if only some people invest, there isn't enough momentum, and everybody loses out).  What Finance does is sell soft fraudulence , (or opacity ), i.e., it tells everybody that    a) they don't need ...

From the NY Times T he sale of €9 billion, or $11.8 billion, of six-month   Treasury bills   was seen as the first post-holid ay pointer to the continuing woes of the euro zone. The debt sold at 3.251 percent, sharply down from 6.504 percent at a previous auction in late November. Demand was 1.7 times the amount on offer, compared with 1.47 times previously The first *real* datapoint is later today when Italy sells a few billion in 10-year bonds - these have been trading at 7% in the secondary market, a level that is clearly unsustainable. That said, you could claim that anything above 2% is unsustainable, given that Italy's growth rate is - effectively - zero...

From a Tedd Ziuba post hating on process . Software development methodology is organizational Valtrex. Sure, it treats a symptom, but the only cure for the underlying disease is to never have contracted it in the first place He goes on to point out that the main reason to have process/methodology is that, thanks to the Law of Large Numbers , the more developers you have, the more your average skill is going to regress to the mean, i.e., the skill of the Mythical Average Developer The underlying cause is that the variance of developer skill on your team is too high, which means your team can't execute well, and you need process to wrangle the laggards  Communication Overhead   In my experience, there is a second reason called, you guessed it, Communication Overhead . See, I am the Perfect Developer.  Everything I do is Perfect.  Crystalline Joyeous Glorious Perfection. (yeah, yeah. humor me).  Oh, did I mention I don't need to sleep either?  ...

A wacky paper in Nature , where they create a graph of recipes based on the ingredients used.  The secret sauce (funny!) behind the graph is that the more shared flavor compounds in the nodes (ingredients), the closer the nodes are in the graph. The result looks something like this This is, of course, a highly simplified representation - do go to the original for many many details about how they pruned the graph, and how they validated that the graph was still accurate). Some crazy details   North American food has cane molasses as one of its primary ingredients .  I ask you, why ?  I mean, whats so special about cane molasses?  I know it gets used as an ingredient in alcohol, but the authors don't really give context as to what they mean. Garlic and scallions go together in East Asian cuisine.   Again, this is something that makes sense ex post facto , but I never realized that it was this common North American and Western European c...

I just finished (re)reading Why Functional Programming Matters by John Hughes (of QuickCheck fame)  Its a paper from 1984, and I - vaguely - remember reading it a long time ago, and having absolutely no clue why any of it was relevant.  Functional Programming was a couple of Lisp/AI courses that I was taking, with a healthy side dose of parentheses, recursion, and goofy syntax . The paper makes a bit more sense this time, but unfortunately, it now makes sense in a Well, D-uh way.  The main lessons are somewhat blindingly obvious, for those of us who are well-versed in The Erlang Way (or Haskell.  Whatever) If you don't feel like wading through the paper, Hughes makes the following points: Modular Programming is Good    This is because modules, being limited in scope, are quick and easy to code.  They can, fairly easily, be made re-usable (and hence can be re-used, decreasing future effort). Finally, because they are limited in scope, they are...

From Boston.com The big dig for San Francisco’s multibillion dollar transportation terminal has unearthed some artifacts from the city’s heady Gold Rush days, including opium pipes from a Chinese laundry and a chipped chamber pot found in a backyard outhouse...

Slides from a presentation by   + Gabriele Lana .  It is a decent summary of the basic differences between the two, but is better seen as How to do Map-Reduce in CouchDB and MongoDB   Personally, if my code was mapreduce heavy, I'd probably not use #mongodb - the performance hit is awesome (ok, was .  Dunno if it still is...)  

    Analytics within a company is typically about standards and processes. Data is generated and obtained from a variety of sources, painfully scrubbed and sanitized, and finally imported into a Business Intelligence system of some kind. The petitioners then line up at the doors, requesting guidance.  Supplicants get  chosen based on some type of appropriate criteria - Flavor of the Month, Marketing's latest brainstorm, whatever - and then encoded into complex BI queries in scenes reminiscent of an Asimov short story, except without the benevolent presence of Multivac .  The entire process can take weeks or months. Admittedly, once a specific process is put in place, turnaround is quick, but there is little room for serendipity, spontaneity, or synergy. In the entire sequence described above, there is one area that organizations have gotten remarkably good at - generating vast quantities of data.  Given the crazy decline in the cost of storage (...

Alan Feuer tells us of The Bank Of Cattaraugus , a bank near Buffalo in the town of Cattaraugus .  Its a small bank, real small, in fact its pretty damn wee.  Its got around $12 million in assets ( less than Jamie Dimon, CEO of Chase, had his compensation increase by this year ), of which around $5.5 million consists of state and municipal deposits.    The bank is run by one family - The Cullens - for the last 130 years, and by all accounts they are not the Potters of  Bedford Falls, having run the bank for the good of the community in all these years.  They truly do seem to have a sense of noblesse oblige - running a very lean operation, and barely paying themselves anything ($300K/year in total compensation across the eleven employees and directors.  Peanuts really).  Mind you, they do have effective monopoly status in the town and vicinity, but again they seem to never have abused this position.    Do I have a problem with th...

There is an Adam Platt review on Fatty-Cue that refers to it as " one of the great destinations of this year’s barbecue season" . I think I might actually quibble with that - BBQ its not. Before you get up in arms about it, hear me out.    - The service is great (sit at the bar.  Its more fun), and everyone clearly loves what they are doing.     - The prices are (for NY) quite reasonable, and you don't have to get a second mortgage, a tendency that is all too common in this neck of the woods. To me, however, BBQ implies a certain savoriness of experience, dining umami if you will.  The food should be thick, comforting, slightly (or very!) messy, protein-aceous, and bulky - the type of food that call out for wet-wipes. The experience here, however, tends more towards the twee side of existence.  Don't get me wrong, the food tastes really quite good, but it doesn't quite get to that dining umami side of the equation, with quite a few i...