Why middle-aged habits form

Not good habits, not bad habits, just the ones that grow, like parking spots, the home of the winter hat, and so on.

These habits form because, especially if enjoys and endures a certain sort of family existence, by middle-middle age life can become significantly complicated.

At the same time one's memory structure is not improving -- which is a polite way of saying something else.

And thus one acquires the cage of habits that will, for better and worse, flourish and endure.

I need more sunlight.

Shallow thought of the moment

It's never about one thing, it's always about everything*.

* Everything that's causally connected that is.

What can I do with Twitter, and is it CB Radio redux?

I'm still trying to figure out the upside of Twitter for me. It looks potentially useful as a way to get availability/status information and to synchronize a loosely-coupled distributed entity, but mostly it seems like a oddly constrained form of entertainment.

Being a proto-gomer, that reminded me of something ...

ConnectMe Networks: Twitter vs CB Radio: What Makes These Mobile Services So Popular

... CB radio was a lot like Twitter: in the late 70s and early 80s, millions of people bought these radios initially because it allowed them to communicate with each other to locate cheap gas and to notify others of speed traps. But it fell victim to its own popularity: because of the millions of users jamming onto the grid, channels became incredibly noisy and communication became next to impossible. Once people started to use their radios less frequently, it opened the door for a competing technology: the mobile phone...

CB radio lasted about 4-5 years as a popular movement and AOL chat rooms were good for 10 years, so I give Twitter 3-8 years as a recreational/social medium. Good for some, uninteresting for me.

The useful part of Twitter has to do with the people synchronization problem, the ongoing limits of calendar integration, and the business quirks driving the SMS/IM wars. These things look like they may take years to sort out, during which time Twitter can morph as needed.

CB Radio didn't have that morphing potential -- it ended as it started. So Twitter isn't CB radio, or at least the people synchronization broadcast/asynchronous receipt part of it isn't.

So when might it be useful for me? That's hard to figure, given that so far SMS/IM is only useful between my wife and I, and even then we're limited by Apple's craven refusal to provide Google Talk/Chat or any other app with instant messaging push services.

I think when our children have cell phones and are more independent, or when both my wife and I have phones with working push notification (iPhones if Apple ever caves), or if my work were to change dramatically, I'll have a real use for Twitter.

Not just yet though.

National Academies of Science survey -- very short

The NAS wants to know what you'd like to learn about.

What Matters Most to You? is a VERY short survey. Please take a moment to complete. I added a request for "autism and cognitive disorders" as a write-in category.

Marriage and civil unions - American insularity is astounding

Americans get endlessly agitated about Gay Marriage and Civil Unions. There are reams of editorials like this one ...

Editorial - Separate and Not Equal - NYTimes.com

.... Civil unions are an inadequate substitute for marriage. Creating a separate, new legal structure to confer some benefits on same-sex couples neither honors American ideals of fairness, nor does it grant true equality. The results are clearly visible in New Jersey, which continues to deny same-sex couples some of the tangible civil benefits that come with marriage....

So, amidst all the sturm und drang, does anyone ever bother to ask what other nations do?

No. Of course not. That would be %$@% un-American.

Sometimes I wonder why I ever became an American citizen.

Emily and I were "married" in Quebec about 23 years ago. More importantly, we were civil-unioned.

You see, in Quebec of 23 years ago, "marriage" was a religious thing. You could be married by the Catholic Church or the United Federation of Wombats; both were equally legally meaningless.

The legal union was a civil agreement with the state. It was the civil agreement that got you rights, privileges and obligations.

Duh.

We need to make "marriage" the province of religions, and make "civil union" the contract with the state. We can grandfather in everyone who's currently "married", but then all future legally meaningful unions, including straight and gay unions, are civil unions.

Marriage is then up to the religious orders, and it then has no significance beyond the religious domain. So the Church of the Endlessly Recreational can do marriages, and, heck, so can the Baptists. Who cares -- it has no legal importance.

The answer to the Gay Marriage wars is to make all unions Civil, and separate Church and State.

Damn obvious.

A classification of Ponzi schemes

The NYT has published a classification of Ponzi schemes.

I have a few quibbles with the piece. While the 'Music Man' was a con man who meant to cut and run, he wasn't running a Ponzi scheme. Also, not all "cut and run" scams are small bit -- the Albanian, Philipino and Columbian, scams were massive. Lastly, the relationship between Ponzi schemes and multi-level marketing businesses deserves more mention.

Oh, and I've one other quibble. I'll save that one for the end ...

A Scheme With No Off Button - NYTimes.com

Mathematically speaking, Ponzi schemes are doomed. They work by bringing in new investors to pay off old ones. In pure form, there’s never any actual business activity; the money just rolls backward from ever-increasing numbers of investors to keep up the appearance of profits. This means the scheme requires an infinite supply of new suckers....

...Based on historical examples relayed by a few biographers, historians and finance experts, the exit strategies seem to fall into four general categories:

CUT AND RUN These Ponzi schemers, a subset of the “Music Man” breed of professional swindler, are the small-time crooks, the snake-oil salesmen. They plan to rip off everyone in River City, hop on a train, change identity, and then start over, from the top, in the next town...

If you’re well enough connected to create a large-scale Ponzi scheme, though, you’re probably too well-connected to be able to, or perhaps even want to, cut yourself loose. Charles Ponzi himself passed up chances early in the 20th century to sneak back to his Italian homeland unnoticed....

TURN (OR RETURN) THE BUSINESS INTO SOMETHING LEGITIMATE This group is likely to have started out with some hope for legitimacy. They solicit seed money for a brilliant investment idea, but the idea falls through. Rather than declare failure, they recruit new investors to pay off the old ones.

The fraud is just temporary, the swindlers tell themselves. They delude themselves into thinking they’ll come up with another, better idea some day.

This appears to have been Mr. Ponzi’s strategy; he had grand plans for international postal arbitrage but couldn’t make the logistics work. “He truly thought he could eventually turn around and go legitimate,” Mr. Zuckoff said.

This exit strategy pretty much always fails because the schemers are looking for the big scalp — and there’s never an investment profitable enough to fill that deepening pocket of debt.

NO EXIT These schemers, usually from relatively humble backgrounds, are deeply insecure. They have felt like impostors their whole lives, whether in the country club or on the trading floor, says James Walsh, author of “You Can’t Cheat an Honest Man.” Expecting exposure for something, sometime, somewhere, they rationalize their fraudulent behavior. They delay the inevitable as long as they can — and live well until they get caught.

GET ELECTED TO PARLIAMENT After scamming millions of Russians in the 1990s, Sergei Mavrodi promised his investors a taxpayer bailout if they elected him to the Duma. Upon election, he received parliamentary immunity from prosecution.

Admittedly, this exit strategy has limited applicability. It didn’t even work very long for Mr. Mavrodi, who landed in prison when his immunity was revoked.

The details of Mr. Madoff’s scheme are unclear, though he is accused, in court documents, of having described it as a Ponzi scheme. Some experts guess that, given his business’s longevity, he may have hoped to return to legitimacy one day.

Most Ponzi schemes last a year at most, says Utpal Bhattacharya, an Indiana University finance professor. (Ponzi’s lasted just nine months.) So it seems likely that Mr. Madoff, an investment manager since 1960, started out legitimate or semi-legitimate. People in that position sometimes foolishly think they can hide a one-time loss with new investors’ money, and make up for it with a big gamble later.

In other words, Ponzi schemers don’t necessarily start out as such, and as sophisticated as they are, they may not consciously recognize that they have created one. They delude themselves into thinking the ploy is just a stopgap measure, an attempt to hide a loss until they can — once again — dream up something brilliant.

My last quibble is that the author is far too sanguine about the distinction between a scam and, say, a start-up company. Lots of start-ups stutter, and look for money from secondary investors. They're not expected to make money, so they don't have to lie about revenues. They just have find a way to transition from their original, failing, plan to a new one -- funded by new investors.

In the real world these boundaries are labile ...

Oddities of popular posts

Based on comments, two of my most often appreciated posts:

• Gordon's Notes: Duct tape and warts: how the HECK does it work?
• Gordon's Tech: MacBook fan was roaring. Why?

The first is interesting from an anecdotal medical perspective.

The second is an aspect of one the most annoying problems with OS X -- device drivers are often very badly behaved. It comes up at the top of several Google searches on the topic, I get a comment every other day.

I've no way of predicting what's going to be popular.

WordPress's possibly related posts -- I want this from Blogger

Last July I wrote that I really wanted Blogger to support backlinks.

Well, Blogger still hasn't done anything. Meanwhile, I'm seeing more WordPress blogs using their "possibly related" feature.

Possibly an Announcement -- WordPress.com

... In a feature we’re calling possibly related posts we’ll now try to show posts related to yours a little section at the end. If we find any posts on your blog that are related, we’ll put those at the very top and in bold. Next we’ll show other posts from around WordPress.com, and finally we’ll check if there’s anything in the mainstream media.

The result is a handful of links that should provide you and your visitors something interesting to check out. On blogs that cover the same topics frequently related posts could cause a 5-10% increase in traffic overnight. You could also start to see traffic from lots of other blogs. It’s a bit of an experiment, and we’ll be tweaking it a lot based on your feedback and the data that we collect once everything is live.

Grrrrr. This feature is core to my memory extension strategy [1].

I want a Google Blogger "possibly related posts" feature that follows links and tags and, heck, textual analysis to create entries -- and that lets me choose whether to restrict to my own domains or open it up.

What do I need to do? I'm turning blue ...

[1] If Blogger label views had feeds I'd be able to create meta-tags that spanned Gordon's Notes and Tech. By the way.

Understanding the Collapse of '08 - the role of the deadbeats

I keep coming across the meme that the root cause of the Collapse of '08 was that the banks made loans to people who couldn't afford to repay them. To deadbeats, in other words.

Sometimes the implications is that this was because the banks were stupid, or evil but mistaken, and other times it's blamed on federal rules avowedly intended to end racist lending practices and to reduce poverty.

I thought stories like Michael Lewis's would slow that meme, but they haven't. So even though I wrote (emphases mine) ...

Gordon's Notes: Michael Lewis on the End of Wall Street. My God.

1. We need to close the rating agencies down. Now.
2. When you give 99% of the human race money and power, they cannot imagine that they don't deserve it. They are convinced they are brilliant. I know I would.
   
3. The part where shorting the bad loans with credit-default swaps enabled the generation of 'virtual' bad loans involving real money is mind-boggling.
4. I don't think this was caused by poor black people getting too many loans. Do you?...

The meme persists. Funny about that.

So let me try again.

Imagine that someone had built a massive amplifier. Huge. It takes anything it hears and it boosts it a thousand times.

Next to it, Yo-Yo Ma plays the Cello.

Everyone is happy.

Until the sound guy hits the wrong switch and the speakers connect to the microphone. The feedback loop blows the speakers, the audience, and the nationwide auditorium sky high.

So who's to blame? The sound guy? The speakers? Or the idiots who built a system that was built to self-destruct?

I guess you can tell what I think.

We'd built the mother of all firewall-free feedback loops. All it took was one thing to go wrong, and the entire setup was going to blow. If it hadn't been the sound guy, it would have been a short in the wires. The explosion was going to come -- one way or another.

Don't blame the sound guy. He's dead too.

See also:

1. Complexity collapse
2. Disintermediating Wall Street
3. The future of the publicly traded company
4. The role of the deadbeats
5. Marked!
   

Bring down the Barons - the disintermediation of Wall Street

I'm doing my Roman Chair back rehab exercises, listening to the Teaching Company's History of the United States*, and learning about how the railroads built fortunes from the deluded Scandinavians of early Minnesota.

Those crazed farmers and woodsmen had only one way to get produce to market -- by rail. They couldn't leave the land, because they couldn't sell it until they owned it, and they only owned it by living on it for a time.

Chumps, in other words.

That feels ... familiar.

Eventually the balance shifted. Roads contested with rail, small farms disappeared, and now a few massive corporations dominate America's food chain. Now they have the power. And so it goes.

Today's Union and Southern Pacific are called Goldman Sachs and Merrill Lynch, though the comparison is kind to the latter. There's no doubt the railways delivered a vast amount of value to many people, the modern equivalents have been a bit more ... focused.

Still, there's no denying that our civilization depends on the flow of money and the funding of productive enterprise. The virtual railway of commerce is at least as important to us as the physical railway was to early 20th century America.

So we need the railway of finance, but do we really need to be paying the conductors tens and hundreds of millions of dollars? After all they've just driven ten thousand express trains off a cliff. Forget texting, they've been snorting coke and shooting 'ludes -- and they ain't giving their money back.

They're not worth what we've been paying, heck, they ain't worth nothin.

So, we need finance, but do we really need Wall Street?

Where's the brokering bottleneck that lets them siphon off so much value -- without competition? How can we break that de facto monopoly, and open them up to the bracing wind of competition?

Yes, we need a non-Bush SEC. Yes, Christopher Cox should join the Bush/Cheney tar and feather party. Those are good Democratic responses. I'm for 'em.

But we need good GOP responses too. True, there are few Republicans left who remember how those work, but we Dems can run a pre-Gingrich simulation of those forgotten voices.

How can we redesign finance so that a great money manager makes, say, $300,000 or so -- and a mediocre one becomes, say, an architect? Maybe we can start by figuring out where the chokepoints are, and how to open those up to some vicious competition.

It's time to break Wall Street, and make commoners of the Barons.

* Incidentally, it's a bloody and horrible story - at least in my 1st edition. Maybe they spruced it up for the current edition.

A world gone Madoff

Krugman is back, both barrels blazing. I really can't abbreviate much of what he wrote, every word counts. Emphases mine.

Op-Ed Columnist - The Madoff Economy - Paul Krugman

...How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?

The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.

Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.

But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.

O.K., maybe my example wasn’t hypothetical after all.

So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.

We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.

But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.

At the crudest level, Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.

Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?...

... Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing...

... Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we’re looking at now are the consequences of a world gone Madoff.

Go back and read the the "corrupting ... society" lede. We need to recognize how corrupted and degraded our culture has become over the past eight years. That will not be easy to undo.

Elsewhere, Talking Points tells us more than a few people suspected Madoff was a con man ...

... a known reader passes on word from a hedge-fund analyst at one of the big (remaining) financial services powerhouses who says that Madoff was always on their short list of people he and his colleagues thought were crooks.

A bit more concretely, let's go back to Harry Markopolos, the money manager and financial fraud investigator who'd been blowing whistles on Madoff for almost a decade. In the report he submitted to the SEC in 2005, in addition to complex mathematical analyses showing that Madoff's system couldn't work, he said that "I have also spoken to the heads of various Wall Street equity derivative trading desks and every single one of the senior managers I spoke with told me that Bernie Madoff was a fraud." ...

I'd like to know who else is on this alleged "short list of ... crooks". Wouldn't you? Isn't that list worth a vast fortune -- since it predicts who will be next Madoff and thus enables various informed wagers?

While we wait for the rest of the "short list", can we tar and feather Christopher Cox?

Of course that's only going after a henchman, Cheney/Bush set out to destroy government, starting with the SEC. They get to own a good piece of this disaster, though I admit it's hard to find an open space for another pin. The SEC story strengthens Bush's case for being the worse president in history -- and that's a really tough contest.

The return of Bush 1998?

Years before Bush destroyed much of America and the world, he was a lucid speaker and even had a reputation as something of a "uniter" -- albeit in Texas, where he was "uniting" the moderate right with the extreme right.

Molly Ivins used to remind us of this, and how amazed she was by the incoherent loon of 2000 onwards.

I heard Bush this morning, and I had the same thought as Talking Points ...

Talking Points Memo | Who Is This Guy?

As one of my colleagues just remarked here, Bush is surprisingly lucid and cogent in explaining why bankruptcy is not a viable option for the automakers in the short run and why doing nothing is not viable in the short or long term.

So, did some brain sucking earwig fall out? Has he been abandoned by his KGB controllers and reverted to a prior mind? Does he have a split personality?

Weird.

Annals of bizarre tripod ideas - the lampshade

When I think of digital photo tricks, I think of setting the ISO high then pushing the exposure to blow out the highlights. Seems to give less noise with pushed images.

Pogue thinks of weird tripod tricks ...

Pogue's Photo tricks

... It turns out that the threads at the top of just about any lamp--the place where the lampshade screws on--are precisely the same diameter as a tripod mount! In a pinch, you can whip off the lampshade, screw on the camera, and presto: You've got a rock-steady indoor tripod...

He's referring to a style of lamp where there's a fairly thick screw at the top of an elliptical loop that the lampshade hangs on.

Speedcubers and the 6.6 billion person world

Speebcubers compete to solve the Rubik's cube puzzle ...

Jessica Fridrich Specializes in Problems That Only Seem Impossible to Solve

... She has been far surpassed by speedcubers with records of 14, 13 and 10 seconds, some of whom can solve the cube blindfolded after studying it for less than a minute. “Today I would probably be in 20th or 30th place,” she said...

There are 6.6 billion people in the world. Even if only 1 in 10 million have the bizarre mix of talent and obsession needed to be a "speedcuber", that's 660 people.

Colonoscopy: As trustworthy as the markets?

A few months ago we learned that many cancers arise from flat lesions that can't be easily seen by colonoscopy. Two years ago we learned that gastroenterologists vary greatly in how many polyps they find, and that accuracy is inversely related to speed.

Now we find that even good gastroenterologists can't find right sided cancers ...

Colonoscopies Miss Many Cancers, Study Finds - NYTimes.com

.... In the new study, the test missed just about every cancer in the right side of the colon, where cancers are harder to detect but about 40 percent arise. And it also missed roughly a third of cancers in the left side of the colon.

Instead of preventing 90 percent of cancers, as some doctors have told patients, colonoscopies might actually prevent more like 60 percent to 70 percent ...

Of course it's possible right sided cancers are different from left sided cancers; maybe they don't have the same slow growth from polyps.

I also suspect that, like most routine procedures, gastroenterologists do best in the first 1-3 years of scoping, then do worse as the procedure becomes easy and routine.

In any event, it's been a bad few years for colonoscopy. The procedure now looks like a bit of a fraud.

We don't have know of anything better, but clearly we ought to review our options. Since it's not as good a test as we thought it was maybe we should start paying less for the procedure.