Life imitates art - the WaMu story

Well, not exactly. Cliches are much more common in life than in art ...

The Reckoning - WaMu Built an Empire on Bad Loans - Series - NYTimes.com

...While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.

“In our world, it was tolerated,” said Sherri Zaback, who worked for Mr. Parsons and recalls seeing drug paraphernalia on his desk. “Everybody said, ‘He gets the job done.’ ”

At WaMu, getting the job done meant lending money to nearly anyone who asked for it — the force behind the bank’s meteoric rise and its precipitous collapse this year in the biggest bank failure in American history...

We really need to try a different sentient species. Personally I like dogs.

This was novel though ...

...WaMu turned real estate agents into a pipeline for loan applications by enabling them to collect “referral fees” for clients who became WaMu borrowers...

Dark humor aside, there's one interesting question about all this.

Why are we reading about this now?

It's not as though WaMu was subtle.

I would really like to know the story about why there was no story.

Update: Thinking more about why there was no story. A hypothesis -- that business journalists interact with the wrong level of a corporation. They interact with senior management, who are more fun and who can provide favors, tips, and ad revenue. The real story is further down the value chain, hence invisible.

Provigil enthusiam: I bet on accelerated aging

Judith Warner makes the case for putting Provigil in the water.

Synchronously, the NYT writes about the odd relationship between sleeplessness and heart disease, one of series of studies over the past few years showing relationships between limited sleep and disorders associated with aging.

Free lunches are exquisitely rare.

There's no way any studies done to date would be sensitive enough to detect a 10-20% acceleration of aging associated with long-term Provigil (modafinil) use. Animal models might show the relationship, but they'd have to use animals with a relatively long lifespan.

I bet we'll learn that regular Provigil use that reducing an individual's sleep needs from 8 to 6 hours a night also significantly accelerates aging.

Just a hunch.

Living well with less energy - lessons from tobacco

If we had the right price signals, we could live well with far less energy that we use now.

Consider the passively heated home. It's a marvel of efficient engineering and, in some climates, can operate without a dedicated furnace.

Of course we can't rebuild all our homes this way, but it's easy to imagine that, over the next twenty-five years, per capita US energy consumption could fall by 3-5% a year even as GDP rises.

Of course that won't happen with oil company ads urging energy conservation. Those remind me of tobacco ads urging health lifestyles. You know, the ads the tobacco companies ran when they were trying to fend off cigarette taxes.

The tobacco taxes came, and, shock, twenty years later public smoking is rare in Minnesota.

It's very hard to stop smoking, but people did it. It's easier never to start smoking, and people did that too. The campaign against smoking is a blueprint for transforming America's energy habit.

The campaign needs to start with price signals. Without them we're just pretending. Regulations are a feeble substitute for a serious carbon tax.

Today the NYT Editorial page called for a gasoline tax offset by other tax reductions. This is only the beginning of what will be a long and terrible political process that will need support from every friend of reason.

If we're lucky carbon and gas taxes will be a core campaign issue in 2008. It will be a tough campaign of course, we know the GOP will continue their war against civilization and reason, we know the GOP will do everything possible to leave the human world a smoldering ruin*.

I hope you've enjoyed your pre-inaugural rest, but that's over now.

* Which makes the GOP, ironically, a sort of Green party -- but that's another story.

12/28/08: Uh-Oh. Friedman agrees. Which reminds me that gasoline and carbon taxes are quite different. A gasoline tax that leads to electric cards powered by coal-fueled plants would be an absolute disaster. The primary argument for a gasoline tax is to reduce dependency on Saudi Arabia, but I suspect that's a misguided mission. The carbon tax is what we need; a gasoline tax is secondary.

Get ready to refinance your mortgage?

Krugman points out that there are relatively easy and benign ways for the treastury to lower mortgage interest rates. They are currently anomalously high compared to treasury interest rates (less than 0% currently).

For many people the safest investment these days is accelerating mortgage payments. Alas, that doesn't provide a lot of economic oomph; it's one of the reasons tax cuts don't yield much stimulus. People just use the tax cut to pay down their mortgages. That's what we'd do.

On the other hand, if we are able to refinance at a significantly lower rate, we have less incentive to pay down our mortgage and we have more cash to spend or invest. (It has to be pretty damned low though, our current rates are pretty low already.)

So this sounds like something an Obama administration might push. I'll watch for a refinancing opportunity come February.

Weather wimps of Minnesota

Humans are adaptable …

Welcome to the Coldest Town on Earth: Scientific American

… Oymyakon's natives have learned to adapt to the freezing conditions: the town's only school closes only when temperatures sink below minus 61.6 degrees Fahrenheit…

They’re looking forward to a –90 F day soon. That’s without the “wind chill”.

We Minnesotans get all worked up over –40 F.

We’re wimps.

Quick reminder: GDP and money turnover

Easy for the non-economist to forget. This comes from the Bush I administration ...

Bruce Bartlett - How to Get the Money Moving - NYTimes.com

... When everyone in the economy suddenly stops spending, the number of times that money turns over falls. Since the gross domestic product equals the money supply times its rate of turnover — something economists call velocity — this means that if the money supply is unchanged then G.D.P. must fall.

Theoretically, the Federal Reserve can compensate for a decline in velocity by increasing the money supply. But in times like these it is very hard for it to do so because of something economists call a liquidity trap. When this occurs, the Fed cannot inject liquidity into the economy because its normal means of doing so no longer works. In a liquidity trap, trying to expand the money supply is like trying to push on a string.

Normally the Fed expands the money supply by buying Treasury bills and paying for them by creating money out of thin air. When it wants to contract the money supply it does the reverse, putting Treasury bills from its portfolio on the market and drawing money out of the economy when financial institutions pay for them.

But when interest rates on Treasury bills fall to zero this process doesn’t work because money is essentially nothing but a perpetual government bond that pays no interest. If the Fed creates money to buy a Treasury bill that pays zero interest, it accomplishes nothing, economically. All it does is trade one government security for another that is virtually identical. There is no net increase in liquidity.

Under these circumstances, when the normal rules don’t apply, the government must find more creative ways to ease credit conditions and get the economy moving again.

First, it needs to increase the budget deficit. This expands the amount of Treasury bills in circulation and is the same as expanding the money supply, which is necessary to keep G.D.P. from shrinking due to a fall in velocity.

Second, the Fed needs to revise its operating procedures. Instead of buying only T-bills it needs to buy securities with positive interest rates. These include longer-term Treasury bonds and securities issued by government-sponsored enterprises like Fannie Mae. If necessary, the Fed could also buy corporate bonds, state and local government bonds, or even bonds issued by foreign governments.

Third, the government must try to raise velocity by stimulating aggregate spending in the economy. This is harder than it sounds. Buying bonds and securities may expand liquidity, but it doesn’t increase spending. And we know from experience that tax rebates don’t work because people save them...

Sounds Krugmanesque.

How Microsoft can use Google Blogger's missing backlinks

Microsoft may yet fall to the ghost of Netscape Constellation.

That would be a good thing if Microsoft is merely shattered, and returns as a dozen newly competititive enterprises. We don't want to replace one oppressive monopoly with another.

So, how can we help keep Microsoft in the game? They do have a few options to play -- in addition to a thermonuclear patent attack.

For example, Google won't give me the Blogger backlinks (possibly related posts) I want. This is bad news; those backlinks are a key part of my manical GordonGeek-Metamind interface strategy, aka Project Xanadu. So if Google won't give 'em to me, maybe Microsoft will. [1]

Happily, Microsoft has several ways to play here. I'll outline just one approach, one that leverages Windows Live Writer (my all-OS favorite desktop app) and ties it to Windows Live Search, Microsoft Passport (Live ID), and Microsoft Live Spaces while facilitating an incremental Blogger to Live Spaces migration.

1. Introduce the concept of domain-scoped search to Live Search, just as Google Custom Search can be used to constrain search to multiple domains.
   
2. Write a plugin for Windows Live Writer 2009 that emulates the WordPress Possibly Related service -- call it "WLW Related". When users go to use the new function they'll be asked to enter their Windows Live ID, then to specify groups of domains to search.
3. Windows Live will store this configuration on Live servers.
4. Users will then be invited to optionally replicate their posts to a Microsoft Live Space which they can then create (bound to the Live ID they just created). The advantage of the Live Space will be that the backlinks created there will be dynamic.
5. After initial setup future posts in WLW will always display a dynamically updated set of possibly related posts based on shared labels, and lexical analysis of the post title and body. The possibly related list will be organized by the search domains defined above. All or parts of the list URLs can be appended to the end of a blog post.
6. If users opt for the optional replication of the blog posts to Spaces, they'll benefit there an optional dynamically updating "show related" set of links.
7. Lastly, add an import function to Spaces that works with Google's Blog export data format. This should include dynamic updating of links so that self-referential blogspot URLs are rewritten as needed.
   

In short, Microsoft can leverage their tremendous advantage in desktop applications (Windows Live Writer) to ease the migration path from Blogger to Spaces, and they can provide functionality geeks appreciate -- while thumbing their nose at Google.

Give it a try Microsoft. Maybe I'll switch ...

-- footnotes --

[1] There aren't a lot of alternatives. Apple is busy recreating the mistakes of the 1980s. They're creating a closed software world that's going to compete with Google's (relatively) open alternative. In other words, they're Apple 1984 and Google is Microsoft 1984 (ok, so Google is nowhere near as evil as Microsoft was in those days).

Yahoo can't help either. They're waiting to be acquired. Startups are nice, but they need to figure out a Dapocalypse solution.

Why Google loves Chrome: Netscape Constellation

Google is serious about Chrome. The Google Pack now include Chrome rather than Firefox. Google is paying vendors to put Chrome on new machines rather than IE or Firefox. Soon Google will pay for Chrome/Linux to go on sub-$250 Linux netbooks, and they'll begin moving the Target Trutech netbook purchase price to zero.

Why is Google so serious about yet another browser?

I still see pundits asking that question, even though I answered it four months ago.

Alas, that particular meme injection looks like a total fail. I tested today on Google, Windows Live, and AOL search [4]. I found my personal post and precisely one other hit -- a comment replicated across dozens of identical spam blog (splog) posts [1],[2] (no links since the source is a splog):

... Google is not the only think-tank pursuing the 'browser-as-desktop'-concept... and far from the first. Does anyone remember 'Netscape Constellation'? That is very likely the reason Gates and Balmer finally unleashed the hounds on Marc Andreessen & Company... and probably the primary reason why 'Netscape' (in name) has been relegated to foot-note status, in internet history...

So there are at least two living people who remember Constellation, and think Google is playing the same cards -- from a vastly stronger hand. As Machiavelli taught us, old strategies never die. They just wait to be played at the right time.

For a second try at a meme injection, I'll reference a fragment of the irreplaceable but forgotten BYTE magazine (1975-1998) written in 1997 by Tom (electric brain) Halfhill [3] (emphases and footnotes mine):

March 1997 / Cover Story / Net Applications: Will Netscape Set the Standard? / Constellation: The Network-Centric Desktop (Tom Halfhill, 1997)

Microsoft and Netscape both want to change how users interact with their computers in a wired world. But each company wants to steer those changes in a different direction. Whoever prevails will probably determine the face of computing for the next decade. [5]

Both companies are preparing for an age of ubiquitous networking in which users enjoy fast access to immense resources on LANs, WANs, and the Internet..

Microsoft's Active Platform -- manifested on a PC as Active Desktop -- leverages the market dominance of Windows by blending the user interfaces of Windows and the Web...

... Netscape's Constellation takes a less Windows-centric approach and puts more emphasis on location-independent computing, regardless of the platform. No matter what kind of system you're using or where you are, Constellation presents a universal desktop called the Homeport . Although the Homeport can appear in a browser window, Netscape usually demonstrates it as a full-screen layer that buries the native OS -- certainly one reason Microsoft is not embracing Constellation.

Constellation will work on about 18 different OSes because it's created entirely with HTML, JavaScript, and Java. Netscape envisions the Homeport as the new base for launching local or remote applications and for accessing the network. It's location-independent because Constellation can save the Homeport's state (including all data files cre ated or modified during a session) on a server... Constellation lets you save copies of your files on the local machine, encrypt the copies, or securely erase all local traces of your session.

Constellation can receive infostreams through Hypertext Transfer Protocol (HTTP), Simple Mail Transfer Protocol (SMTP), Marimba Castanet, and the PointCast Network. HTTP and SMTP are the more conventional methods...

... Netscape sees more platform fragmentation. Users will access networks from Windows PCs, of course, but also from Macs, Unix systems, network computers, home videogame consoles, Web appliances, and mobile devices of every stripe. They won't all run Windows. Netscape also expects more users to borrow time on computers they don't own; for example, business travelers might answer e-mail on network computers in airports and hotels....

Where you read "Netscape Constellation", just insert "Google Chrome-stellation".

Chrome only makes sense as the foundation for Google's fundamental computing strategy, a strategy that will make full use of ultra-inexpensive (free?) netbooks, subsidized Android phones, massive network resources, and, incidentally, any Windows or OS X machine.

Chrome is where Google will start to deliver functionality that, until now, has required desktop clients.

Will Chrome-stellation succeed where Constellation failed? Microsoft now is vastly wealthier than it was in 1997.

I think there's a good chance it will work -- reason enough to consider purchasing Google stock. Microsoft is hobbled by antitrust restrictions, and the inevitable senescence [6] of the publicly traded company. Google has vastly more cash and talent than Netscape ever had, and they're not going to repeat Netscape's error of trash talking the Beast. Chrome is open source, which radically reduces the risk that Google will run into anti-trust or nationalist objections. Not least of all, those netbooks are going to wreak havoc on Microsoft's business strategy -- while only strengthening Google.

Phew. Now to check back in four more months and see if there are more than 3 relevant hits on "Google Chrome" "Netscape Constellation".

[1] Incidentally, Windows Live does a remarkably lousy job of filtering out splogs.
[2] The role of splogs in propagating memes is irresistibly reminiscent of viral propagation of gene fragments.
[3] Ironically, some suspect BYTE was collateral damage from Microsoft's scorched earth campaign against Netscape/Constellation.
[4] It occurred to me that if Google really was doing a Constellation play, they'd have learned enough from the obliteration of Netscape to keep very quiet. Maybe they'd even keep the meme from their search rankings. Now that would have been an interesting story, but it turns out that Google, as usual, had the best results by an order of magnitude.
[5] Microsoft prevailed of course, but they only got to rule unchallenged for about 6-7 years, then Google took the lead. Still, not far off.
[6] To which Apple has been the great exception, but I think they lost their way about 1-2 years ago. Google has a funny ownership structure that might give them a few more good years before the go under. Long enough, maybe, to implement "Chromestellation".

Excellent Cheney take down

Dahlia Lithwick of Slate has written a methodical and esssential dismantling of Cheney's latest ravings. Our current VP is smart enough to qualify as evil rather than merely bad and delusional; he's Bush without the deniability.

If there's any kind of justice in the world Cheney will eventually find himself unable to travel without fear of arrest and prosecution. If there's true justice in America, he'll do time.

The evolutionary history of minds

Two years ago, responding to a post by John Hawks on unique evolutionary events and their relationship to the Drake Equation, I praised Stephen Baxter's 2004 book Evolution. The book never got the fame I thought it deserved, but I'm pleased to see it's still in print.

Baxter does a fantastic job imaging a language and tool using velociraptor-like animal in, I think, the late Cretaceous. Alas, these obligatory carnivores wipe out their primary food supplies -- an ominous precedent for later chapters.

Ever since Baxter I've wondered how many sentient species have preceded us. Certainly there are several alive today, perhaps including canids. How many were rich language users? Ahh, that's harder. We, by which I include our Neandertal brethren, are the only rich language users we know of. How many technocentric species? Again, we know of only one; if there'd been anything like us before we'd have found their signature in the ice cores.

So we do seem somewhat unique, though it's puzzling that we should be. Why not others in the eons of evolution before us?

It's a great puzzle, and Scientific American addresses it as a part of their homage to Darwin series ...

One World, Many Minds: Intelligence in the Animal Kingdom: Scientific American:

.... Beginning in the 1980s, the field of comparative neuroanatomy experienced a renaissance. In the intervening decades evolutionary biologists had learned a great deal about vertebrate evolutionary history, and they developed new and effective methods of applying Darwin’s concept of the tree of life to analyze and interpret their findings. It is now apparent that a simple linear hierarchy cannot adequately account for the evolution of brains or of intelligence. The oldest known multicellular animal fossils are about 700 million years old. By the Cambrian period, about 520 million years ago, the animal kingdom had branched into about 35 major groups, or phyla, each with its own distinctive body plan. As a separate branch of the tree of life, each lineage continued to evolve and diversify independently of the others. Complex brains evolved independently in multiple phyla, notably among the cephalopod mollusks of the phylum Mollusca and, of course, among various groups of vertebrates. Vertebrate evolution has likewise involved repeated branching, with complex brains evolving from simpler brains independently along numerous branches....

It's a long essay, but worth reading. See also a 2004 post on the rapid and ongoing changes to the human mind and brain. I particularly appreciate the cephalopod reference -- Sentient squids are a favorite topic of science fiction of course ...

Are fluorescent bulbs really more energy efficient than incandescent bulbs?

Well, of course they are …

Compact Fluorescent Light Bulbs : ENERGY STAR

ENERGY STAR qualified bulbs use about 75 percent less energy than standard incandescent bulbs …

…Produce about 75 percent less heat…

Or are they?

It’s been a cold December in Lake Wobegon. The heat is on all the time.

Our incandescent bulbs are 100% efficient now. They give light and heat, and we need both. Our fluorescents are equally efficient of course, they also give light and a bit of heat. We need that heat too.

True, we don’t need heat all year long. There are a few weeks during the summer when we run air conditioners, though not usually when the lights are on. For several months the heat is indeed a waste.

So fluorescents are more energy efficient than incandescents – on average. In Minnesota though, that’s only true on average, and the benefit is much less than 75%. Maybe 25%.

So maybe they only save us $10 in electricity costs over their lifetime, versus $30 in Florida. That means we don’t get much of a payback from switching, and given the hassles of dealing with broken fluorescents they’re probably not worthwhile for Minnesotans.

Of course we’ll have to switch in 2012 with the rest of the nation, but there’s no reason to jump the gun …

The Palm Nova – doomed from the start?

The Palm Nova is getting a bit more news lately, with rumor of a CES showing in a few weeks. There’s not a lot of information out; Google suggests this May 2008 posting (emphases mine):

Palm Nova OS Details - Treonauts

Asked why Palm was still developing its own OS, Colligan stated that “We’re focused on executing our own system, mostly because we really believe that to create the most compelling solution it should be an integrated package much like we started with the Palm OS and doing the original Palm Pilots: we did the operating system, we did the hardware and we did the whole synching architecture and the desktop tie-in, which is equivalent to the Web these days…

… That ‘next generation’ Palm 2.0 OS will slot in between the Centro and Treo lines under a new ‘prosumer’ brand that’s yet to be decided, Colligan explains.  “We’re going to continue to look at those three line areas – consumer, prosumer and enterprise…

Supposedly the Nova is going to aim at people who are shut out of the corporate Exchange Server environment (my whimsical guess -- 90% BlackBerry, 9% Windows Mobile, 1% iPhone) but are frustrated by the iPhone’s pathetic productivity offerings (weak to nonexistent home/work calendar sync solution, no tasks, truncated calendar and contact notes, no cut/copy/paste, etc).

So what will Palm do for the desktop? Colligan is very clear that they need to own the end-to-end solution, and he’s 100% right about that. He also says “the desktop tie-in, which is equivalent to the Web these days”. That’s ominously clear – they’ll do a web service, not a desktop app.

So here’s the killer problem – how are they going to get at corporate data? Corporations are even more possessive of their data than they were 10 years ago. On the other hand, what good is a prosumer solution without corporate data integration?

Will Palm provide a tool for sucking data out of Outlook through the back door? Corporations aren’t going to be happy if it’s going from Outlook to a cloud store – even if the cloud store is theoretically more secure than a phone *. If it’s going via a cable from Outlook to a hardware device it’s easier for corporations to look the other way – but not if the ultimate destination has to be a cloud store.

On the other hand, it seems that nobody remembers how to create significant desktop apps any more – so there’s no way Palm will deliver a desktop – especially when Colligan has said the modern desktop is the web.

So the Palm Nova has a very big business problem – access to the corporate data store. Without it they don’t have a hope, but so far they seem to be shut out.

I want the Nova to be a raging success. We Mac iPhone users are desperate for someone, anyone, to put the metallic taste of impending doom in Apple’s mouth.  Alas, it seems Apple will have nothing to fear from the Nova.

* In reality of course most users choose pathetic passwords, and cloud stores are still password secured, so corporate fears are well-founded.

Technological singularity - the trans-Pacific submarine cable

Submarine cables have to cross things like the Mariana Trench.

If you asked most people when the first submarine communications cable crossed the Pacific, I suspect most would guess sometime in the 1970s, as a replacement for satellite links.

They're much older than that ...

Submarine communications cable - Wikipedia, the free encyclopedia

The first attempt at laying a transatlantic telegraph cable was promoted by Cyrus West Field, who persuaded British industrialists to fund and lay one in 1858. However, the technology of the day was not capable of supporting the project, it was plagued with problems from the outset, and was in operation for only a month. Subsequent attempts in 1865 and 1866 with the world's largest steamship, the SS Great Eastern, used a more advanced technology and produced the first successful transatlantic cable...

... Submarine cable across the Pacific ... was completed in 1902–03, linking the US mainland to Hawaii in 1902 and Guam to the Philippines in 1903...

The American civil war, ended in 1865. Forty years later there was a telegraph cable across the Pacific.

It's hard for me to fathom how much the world was changing between 1845 and 1914. I suppose the closest thing today would have to be the rise of China, but that modern rise does not include any comparable technological transformations.

I don't imagine our Future Shock could compare to theirs.

Britannica Online's suicidal site redesign

I'm fond of Britannica Online (example). We've subscribed for eons.

Sometime in the past year, some misguided executive decided that they needed a site refresh.

Now it's heavy on Flash and fancy layouts. Problem is, they don't seem to render properly anywhere. I have the most luck with Firefox, but IE 7 has serious problems.

iPhone? Surely you jest.

At the moment the main page shows me a dark navy blue square with Firefox 3+. Something Flashy, no doubt.

I doubt they were in great shape before this happened. Maybe this was some kind of suicidal move, like torching a warehouse to get the insurance money.

Sad.

Krugman declares 2010 will be good. Markets rally.

The tide has turned. Even as I write billions prepare to pour into the market, because Krugman has written ....

Krugman - Life Without Bubbles - NYTimes.com

... Late next year the economy should begin to stabilize, and I’m fairly optimistic about 2010....

Optimistic?! Krugman?!

Oh yeah baby, let's get that bubble going ...

Buy, buy, buy!

Ok, so there's more in the column ...

... In fact, however, things can’t just go back to the way they were before the current crisis...

The prosperity of a few years ago, such as it was — profits were terrific, wages not so much — depended on a huge bubble in housing, which replaced an earlier huge bubble in stocks. And since the housing bubble isn’t coming back, the spending that sustained the economy in the pre-crisis years isn’t coming back either...

So what will support the economy if cautious consumers and humbled homebuilders aren’t up to the job?

A few months ago a headline in the satirical newspaper The Onion, on point as always, offered one possible answer: “Recession-Plagued Nation Demands New Bubble to Invest In.” Something new could come along to fuel private demand, perhaps by generating a boom in business investment...

... it may take a lot longer than many people think before the U.S. economy is ready to live without bubbles. And until then, the economy is going to need a lot of government help...

Hmm. A boom in business investment? Does that mean my most favored recent meme might get traction?

Amidst all the chaos, this is an oddly attractive time to be starting a small business -- if one can get health insurance (hint, hint).

Just remember, we're not done with bubbles. We have a lot to work out* before the US, and even the world economy, is out of the ICU ...

*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!