Pages for the scrapbook - NYT Business page this morning

A few clippings for the digital scrapbook from Business and Financial News - Mar 2nd 2009 - The New York Times...

 

I like to read history, but I prefer not to live history.

Redoing automobile distribution - the very old is new again

My parents live in the old country - Quebec. GrandCentral means frequent free cell phone calls to my mother, but Dad's not keen on phone conversation. I catch up with him every few months. This weekend that means learning lessons from the early 20th century.

That's how I learned that cars were once sold without the back seats -- in order to save costs. More importantly, after WW II, while factories were converting to consumer production, consumers ordered automobiles and waited for delivery.

Hmm. I recall there was some interest in the 90s in just-in-time custom auto manufacturing and online ordering, but it died with the .com crash. That doesn't mean it won't return -- most big changes have several false starts.

Maybe the way we sell automobiles, like the the way we've sold written news, is an anachronism due for an ending.

Maybe after the wreckage is done, and most of big auto is gone, we'll start selling, manufacturing and distributing cars in a new old way. Or perhaps a need to rapidly upgrade to low carbon technology will favor leased vehicles with reusable components...

What does the rise of Limbaugh's party mean for the religious right?

I've never heard Rush (big fat idiot) Limbaugh directly. Heck, I've barely listened to any AM talk radio hosts* -- I don't even like NPR's talk radio. The only talk radio I can tolerate is the BBC's "In Our Time", and I gather Limbaugh is not Melvyn Bragg.

It's a failing. I don't mind listening to religious rantings; from what I've seen of the world any affiliated deity could be quite vengeful, irrational and nasty. The sheer stupidity of talk radio though -- it's too much.

And I'm an aging white male! These guys are talking to my (seeming) tribe.

Which is to say that I really don't know what Rush Limbaugh's ownership of the GOP means for the Party of Limbaugh's political strategy. It seems to fit with the "Southern Strategy" (white racism), but I don't think Limbaugh is a great fit for the religious right. I rarely hear him mentioned in that context, and my quick googles found mostly awkward defenses of Limbaugh's religious credentials from right side bloggers.

So does this mean the Party of Limbaugh is separating from the religious right? I'd like to see some commentary on that ...

* Lifelong consumption < 7 minutes.

Jindal - the GOP's gift to the nation

I don't thank the GOP for much, but I do have to credit them for an unsuspected sense of humor.

How did they know Jindal was just the comic relief we needed?

Inventing stories of personal faux heroism (remember how the GOP savaged John Kerry for relatively minor discrepancies in true stories of military action?), alienating the entire Coast Guard by claiming government did nothing for victims of Katrina (they were heroic), mocking federally funded research on (wait for it ...) volcanic eruption prediction ...

Phew! Pardon me while I wipe a tear from my eyes. That was a comic tour de force. But Frank Rich tells us there was even more...

Frank Rich - The Ecstasy and the Agony - NYTimes.com

... Listening to Jindal talk Tuesday night about his immigrant father’s inability to pay for an obstetrician, you’d never guess that at the time his father was an engineer and his mother an L.S.U. doctoral candidate in nuclear physics. Sanford’s first political ad in 2002 told of how growing up on his “family’s farm” taught him “about hard work and responsibility.” That “farm,” the Charlotte Observer reported, was a historic plantation appraised at $1.5 million in the early 1980s. From that hardscrabble background, he struggled on to an internship at Goldman Sachs...

Really, it's too much!

Thank you Party of Limbaugh! You sure know how to make me forget my minor woes ...

Economist obituary: Christopher Nolan

The photograph accompanying Christopher Nelson's obituary shows a young Nolan with his mother by his side, his father smiling in the background.

I wonder how the heck they got that photograph.

Nolan asphyxiated when eating, a complication of his severe cerebral palsy.

The Economist tells the story of an author and poet with a terrible disability and remarkable parents (and, I suspect, friends and family too). The obituary doesn't mention that he inspired a U2 song.

It's a memorable story, remarkably written. The Economist saves its best writing for the last page, and some nameless wordsmith wrote their heart out to get this one done.

Economic recovery test -- the pencil sharpener

I've recently proposed the toaster test as a measure of economic recovery. We'll know the economy is healthy when it's again to buy a toaster that works well for ten years.

Personally I like the toaster test, but it takes a lot of toast to show that the toaster works. Not everyone likes toast as much as I do. Fortunately there's a cheaper alternative, one that I mentioned in a rant last year...

... This morning our last modern pencil sharpener broke. We have only one that works now. It's twelve years old, I remember coming across it in the campus bookstore ... It was made in Germany. We're going to mention it in our will, it may be worth a fortune thirty years from now...

... How to explain this emergent conspiracy of globalized incompetence and occult inflation? Clearly the answer is related to Krugman and Hilton [1] and the reelection of George Bush... Consumers are ... consistently making very poor choices, and the market is responding to the frailty of the consumer...

When we buy pencil sharpeners now they look like this:



When we can buy pencil sharpeners that work as well as this one ...



the economy will be on the mend.

The iChat abandonware problem - a sign Apple is in trouble

There's a feature in iChat, Apple's videoconferencing software, that's supposed to allow users to auto-accept chats.

It looked promising for what I want to do -- set my mother up for videoconferencing in the simplest possible way.

Problem is, when you activate it, you get this message:

AppleScript Event Handler Error
... Event: When I Log In
File: Auto Accept.applescript
Error: Error -1708

It's not a new bug, it was recognized at least two years ago. Apple hasn't fixed it in 10.5.6.

It's not the only sign that iChat is abandonware.

Apple didn't used to be this bad. My recollection was that with 10.3 they tried to fix egregious bugs and they incrementally improved their bundled apps.

Something changed after 10.3. Maybe it was losing Avie Tevanian, or maybe it was when Apple decided that they would stop adding significant new features with OS point releases, possibly related to their interpretation of Sarbanes-Oxley revenue recognition (aka technical accounting) ...

Gordon's Notes: Sarbanes-Oxley means no features in future software updates from publicly traded companies?

... Update 3/10/07: I'd read some coverage that claimed Apple was interpreting Sarbanes-Oxley incorrectly. I'd written our representative to ask about this, and Betty McCollum's office replied "Apple has to account for the separate value of a software upgrade that allows for additional capabilities from the hardware.... a nominal fee ... establishes a reportable value for the upgrade." So Apple has interpreted the law as congress understands it. At least when it comes to enabling new hardware capabilities, SO means Apple must account for the value delivered. A nominal fee is one way to do that.

Of course here we're talking bug fixes, not new features, but I wonder if there's an indirect connection.

I see similar problems across OS X applications, such as iCal, Address Book, etc. They're pretty competitive when the OS is first released, but they're very buggy. After a point release or two the biggest bugs get more or less worked out, but then they slowly fall behind the competition.

Apple doesn't improve them, so over time they're less used. They become abandonware. Unfortunately, their bundled existence also prevents vendors from easily filling the gaps with aftermarket products.

Then a new OS release comes along and the cycle begins anew. Of course the new release often requires purchasing new hardware ...

This has become a kind of sickness for Apple. They desperately need better quality in their non-core OS applications, but they also need to find a way to stay competitive with these apps. They could change their interpretation of Sarbanes-Oxley, they could change the way they recognize revenue, or they could separate these core apps from the OS (the way they did with iLife -- some of those apps used to be bundled with the OS).

I'm not a representative Apple customer, so I can't say this sickness is all that harmful to them. I think though, if they wait for signs of retail trouble, that they'll find they've waited too long. Maybe Apple should consider customers like me to be the "canary in the coal mine".

This canary is looking for a new mine.

A beautiful opportunity for an OS X app – front end to GVC

I’ve recently raised the grade on Google Video Chat.

Gordon's Tech: Google Video Chat - a status report - Grade B-

Update 2/24/09: Grade A-: The OS X client now seems comparable to the Windows client. Both drop sessions every hour or so. The quality can be astounding. Usability is astoundingly bad however. Still, beats Skype and iChat easily.

Really, it’s amazing technology. Congratulations Vidyo.

Alas, usability sucks. There’s no way my mother could operate this monster.

Which means there’s a beautiful opportunity for an OS X shop when Google finally publishes an API for GVC.

Someone can put together an app with five huge buttons.

My mother opens the app, clicks a button, and I’m called.

I’d pay $50 for that alone.

The Empire Strikes Back – Microsoft launches IP war on the netbook

A day after officially announcing that a slimmed down version of Windows 7 will be targeted at the netbook (no surprise), Microsoft dropped the other anvil…

Microsoft (MSFT) has gone and done it, they've filed suit in U.S. District Court claiming Linux violates their patents…

No word yet on the finer points of the dispute, all we know so far is Microsoft claims eight patents were infringed…

The suit was launched against a GPS vendor, but nobody thinks they’re the real target. Microsoft has targeted Linux via proxies, but this is the first time they've worn their own face.

Microsoft fully understands the threat they face …

Gordon's Notes: Squeezed 2009: Netbooks, Android and Microsoft

… what's a netbook running Chrome and Linux but a calculator in drag? It's fundamentally complete. It's built entirely of plastic, silicon (sand) and a tiny amount of rare metals. All the technology development costs have been fully realized, and there's no vendor with true monopoly control. IP attacks won't work if China and India decide not to cooperate…

Well, maybe the IP attacks won’t “work”, but they can buy time – time that’s worth hundreds of billions of dollars of revenue. Time to execute on a strategy Microsoft can win with …

They can do this:

1. Buy the pipes, which at this time probably means building cheap to free wireless broadband networks in key markets.
2. Give away XP. Charge $5 a copy for netbook manufacturers.
3. Buy a slice of Dell and start making Microsoft brand netbooks.
4. Create a version of Windows 7 for the netbook (they've probably already done this) that's tied to Windows Live.
5. Become a bank.
6. Build a retail/transaction service across 1-5.

It's a low margin business, but they'll own it end-to-end. They ought to be able to soak up an average of $100/year/user from 2 billion users.

The patent attacks will slow things down. I’m sure this strategy has its own risks. The EU won’t like it for one thing. On the other hand, Microsoft is facing disruptive annihilation. They’ve decided they don’t have a choice.

Now things get ugly.

Look for IBM and Google to move next.

The $50 server platform to come

There are so many things, for better or for worse, people will do with this ...

SheevaPlug: A $99 Linux PC Crammed Inside a Wall Plug

Think about it—an inexpensive Linux PC crammed inside a wall-wart plug. Something like this SheevaPlug ...

Inside the SheevaPlug you will find a 1.2GHz, ARM-based Sheeva embedded processor, 512Mbytes of FLASH, 512Mbytes of DRAM, gigabit ethernet and a USB 2.0 port.... operates on only 5-watts of power..

... Marvell expects the price for these devices to dip below $50. [Marvell and WSJ via Tech Report via Slashgear]

It's of a piece with the netbook tsunami; intensely disruptive in the Christiansen sense. What makes it so disruptive, beyond price, is that it's a standard component based platform - low power consumption (so no fans, cooling, etc), Linux (so software), USB 2 (peripheral) and GB ethernet (I/O).

There's no display of course, but there will be a slightly more expensive version with monitor connector -- or the video will route through a future USB 3.0 peripheral connector.

The next two years will be very ... interesting. I wonder when this kind of device will become contraband.

I remember when I first saw "the web" -- except it was Gopher then. Same idea though, the web was just a prettier version. I knew then the world was turning upside down.

Same feeling the first day I used Google and called my fellow geeks over to let 'em know Alta Vista was dead.

This is blood in the water for geeks. We can smell it ...

Narrowing the Drake equation - if earth is common then ...

It's certain not everyone agrees with Alan Bass, but this fits the trend of the past few years (emphases mine):

Earths Common as Dirt: Scientific American Podcast

“We’re on the verge of finding out how frequently habitable planets occur in the universe.” That was astronomer Alan Boss at the AAAS meeting on February 14th. “And I think we’re going to find out that that number is very close to one.” Meaning that each solar-type star is probably orbited by, on average, one Earth-type planet. So how many habitable planets might be out there?

“10 to the 11th in our galaxy and then there are something like 10 to the 11th galaxies. We’re up to about 10 to the 22 Earths, plus or minus a few.

“You don’t have to just believe that this speculation is going to be correct or not. NASA will be launching the Kepler space mission, and Kepler’s entire purpose is to count how many Earths there are around a population of stars in the constellation Cygnus.” Kepler launches on March 5th.

“Then about three or four years from now, there’ll be a press conference at NASA headquarters, and Bill Borucki, the Kepler PI will stand up and tell us just how frequently Earths occur. And once we know that we’ll know how to take the next steps in the search for living planets, and some of that work will involve not only telling if the planets are habitable, but actually searching for signatures in their atmospheres if they could be inhabited, as well.”

Presumably including signatures in the atmospheres that might also indicate widespread use of hydrocarbons.

Incidentally, 10*22 can be written as 10,000,000,000,000,000,000,000 planet Earth's throughout the observable universe, and 10*11 means 10,000,000,000 in our galaxy alone.

Which brings one to the Drake Equation. In 2007 I reviewed a "Damn Interesting" summary of this simple equation ...

Damn Interesting has a very nice Drake Equation/SETI review today. Allan Bellow's even touches lightly on the Fermi Paradox, though he doesn't get into the various paradox resolutions.

The highlight of the article is an interactive Drake Equation calculator. Users start with various presets, including the 'rare earth' and the 'Drake 2004' options, then add their own biases. Two of the "terms" of the Drake Equation are now relatively accepted, below I show them and 3 variations on the rest: Drake 2004, rare earth, and me...

Here was my guess then using the interactive Drake Equation calculator

Average number of life-compatible satellites = 0.10
Percentage of planets where life does appear = 87.50%
Percentage where intelligent life evolves = 20.00%
Percentage of civilizations which send signals into space = 90.00%
Average years that civilizations will send signals = 200.00
Average civilizations in our galaxy = 9.5

If I boost the first number I get (emphases mine) ...

New Milky Way stars per year = 6.00
Proportion of stars which have planets = 95.00%
Average number of life-compatible satellites = 1.00
Percentage of planets where life does appear = 74.00%
Percentage where intelligent life evolves = 20.00%
Percentage of civilizations which send signals into space = 100.00%
Average years that civilizations will send signals = 200.00
Average civilizations in our galaxy = 168.7

Actually, there's a defect in the calculator. You can't make the percentage of life-bearing planets where intelligent life evolves > 20%.

That may be an underestimate. From The Economist (2/8/2009, emphases mine):

Charles Darwin's revolution is unfinished | Unfinished business | The Economist

.. Gould’s view was thus that the evolution of human intelligence while not exactly an accident, since it was a response to a long series of circumstances, was certainly not a foregone conclusion. If that series of circumstances had been even slightly different, there would have been no egg-headed Homo sapiens...

That view is being questioned. For example, in a study published last year in the Proceedings of the National Academy of Sciences a group of researchers looked at crustaceans (crabs, shrimps, woodlice and so on) over the past 550m years and found far more examples of groups of species evolving towards complexity than in the other direction. Matthew Wills of the University of Bath, in England, commented at the time that it was the “nearest thing to a pervasive evolutionary rule that’s been found.” In this study, the only crustaceans that became simpler were either parasites or those living in remote habitats, such as isolated marine caves.

Simon Conway-Morris, a palaeontologist at Cambridge University, in England, is the champion of a new interpretation of evolution—one that challenges the view that it is largely governed by the accident of circumstances. Unlike Gould, he thinks that if evolution were replayed from the beginning, a lot of things would turn out the same.

Dr Conway-Morris has arrived at this view from a detailed study of what is known as convergent evolution. Darwin himself was intrigued by this phenomenon, in which different groups of organisms independently evolve similar solutions to similar problems, whether these solutions are teeth, eyes, brains, ecosystems or societies...

.. His argument is that, given the nature of physics and chemistry, there may be only a limited number of ways in which things can work. Evolution will be channelled into these successful paths, and thus does have trends. Two of these, he thinks, are towards complexity and intelligence. He adds that things “don’t just happen in chemistry”. They happen because of pre-existing causes. Whether it is the molecules of crystallin that are used to build an eye or the haemoglobin that makes blood carry oxygen, the nature of molecules themselves means that evolution is more likely to follow a path determined by their basic structure. Evolution is a mechanism, and it works within rules...

With far less evidence, I wrote about similar suspicions about six years back. Back then the oddity of expanding brains was also noted in Matt Ridley's book Genome ...

If information processing (IP) is an adaptive advantage in systems where natural selection applies (eg. all systems - see below), then it will increase over time...

.. Natural selection applies to systems where there is competition for scarce resources, inherited variability, and where some variations enhance competitive advantage. These systems may be biological or a pure information system -- such as an economy. Natural selection then applies to the human brain, human information processing tools (writing, calculating) and computing systems -- and perhaps to the cosmos itself.

One may imagine "intelligence", or information processing, as a parasitic process which begins on simple chemical systems and migrates across various hosts. On our planet the primary host is humans, but computational devices are secondary hosts as are, to some extent, books. The host may change, but the process is self-perpetuating.

(This is not an entirely untestable hypothesis; I suspect it has been tested in simulated evolutionary models. There is one odd historical example, though it seems so odd as to be more likely coincidental. In Matt Ridley's book Genome he writes "the brains of the brainiest animals were bigger and bigger in each successive [geologic] age: the biggest brains in the Paleozoic were smaller than the biggest in the Mesozoic, which were smaller than the biggest in the Cenozoic, which were smaller than the biggest present now" (p. 27). Unfortunately Mr. Ridley did not cite a source for this statement, but a quick Google search found this possibly relevant reference...

If we redo the simple Drake equation with a higher probability of intelligence evolving whenever it can, say about 60% of the time, we get about 540 likely coexisting civilizations in our galaxy alone -- and that assumes they only broadcast about 200 years before going silent (we've been sending since about 1910 or so). If they broadcast for even 1000 years than that there would be about 3,500 such civilizations in play right now.

Ahh, but then one comes to one of the most tantalizing questions in science. Where are they? If the numbers were so large, one would think that at least a few hundred would have broadcast in a way we can receive, or sent self-replicating probes throughout the galaxy.

Alas, the best response to this Fermi Paradox is that the number is not that great -- because technological civilizations are short lived. They either self-destruct or change to something that's not interested in communication with us.

Such a fascinating question ...

Acer netbook aims for $150 (euro)

The $150 batteries-not-included Netbook is very close -- but with batteries ...

Translated from netbooknews.de (google translation)

I announced it several times, now it is certainty... Acer is launching a price war... The A110L is now here in Taipei for the converted 150 euros ... Acer zerschiesst the competition with this ... LowEnd in the margin area (Yup, even when there is already Netbook different categories) and intends to market its own product soak... The 2nd Generation ( Aspire One D150 ) ..  is also expected within a very short time become one of the cheapest Netbook belong...

Google's translation services are imperfectly impressive, but you get the idea. I assume at this price we're talking Linux.

This is happening much faster than I'd anticipated, driven by the desperate desire to survive economic disruption.

The screaming collapse of netbook prices is my number one explanation for Apple's product silence. I assume they're rethinking their OS X product strategy. They may have thought they had more time ...

Causes of the crash of '08 - how much fraud?

At last count my list of contributing factors to the crash of '09 included ...

1. Complexity collapse: we don't understand our emergent creation, we optimized for performance without adaptive reserve
2. Mass disability and income skew: The modern world has disenfranchised much of humanity
3. The Marketarian religion: The GOP in particular (now the Party of Limbaugh), but also many Democrats and libertarians, ascribed magical and benign powers to a system for finding local minima (aka The Market). The Market, like Nature, isn't bad -- but neither is it wise or kind.
4. The occult inflation of shrinking quality: What happens when buyers can't figure out what's worth buying. Aka, the toaster crisis - yes, really.
5. performance-based executive compensation and novel, unregulated, financial instruments: a lethal combination. See also - You get what you pay for. The tragedy of the incentive plan.
6. Disintermediating Wall Street: Wall Street became a fragile breakpoint
7. The future of the publicly traded company: A part of our problem is that the publicly traded company needs to evolve
8. The role of the deadbeats: too much debt - but we know that
9. Firewalls and separation of powers: a culture of corruption, approved by the American electorate, facilitated dissolving regulatory firewalls
10. Marked!: Rapid change and the Bush culture made fraud easy and appealing

I put Marked! pretty low on the list, but maybe I should bump it up a bit. The Hall of Shame (Clusterstock) lists a lot more fraud than has made the papers [1]...

• Fairfield Greenwich Group: quietly complicit in the Madoff fraud?
• Angelo Mozilo: white collar mobster
• Sam Israel: a $400 million fraud. In the old days, he'd have been front page news. I never heard of him.
• Many more, each of which would have been in the news once - including: JS Forte, RS Piccoli, JG Ossie, D Palmer, A Nodel, Marc Dreier.
• Those swindlers who have made the news... Allen Stanford, and, of course, Mr. Madoff.

Good old fraud didn't cause the crash of '08, so I'm not going to move it up from the bottom of my list. I think it's more of a cofactor -- the primary drivers of the crash also made fraud easy, profitable, and almost culturally acceptable. In turn fraud, at more levels than we can imagine, accelerated the downturn.

One interesting note. Emily remembers John McCain's reaction when the crash began in the fall of 2008. McCain said "fire Cox". At the time that seemed rather odd, and McCain was criticized for coming up with Chris Cox (#18 on the list). In retrospect, one wonders how much political insiders knew about the amount of fraud in the system. Politicians of both parties spent a lot of time with people like Allen Stanford, and I'm guessing, despite the photographed smiles, that they felt a severe need for soap every time they shook his hand ...

[1] Inanely, we have to plow through a lot of links to get to the interesting ones, including a number of unfair listings - though this one's fair.

Good news from China

Between a wee bit of economic turbulence, the end of the Twin Cities outdoor ice season, the chalkboard nail screeches from the Party of Limbaugh, the apparent end of product development at Apple, the fight for the midterm (2010 is tomorrow) elections and the endless march of Bush/Cheney hangovers this ain't the happiest of times.

On the other hand, there's some good news from the most important place in the world.

China.

I don't think the US is going to fall apart, and I presume that whatever alien forces that have allowed us to survive the development of fusion weapons will continue to operate, so my top priority as an American father is that China be prosperous, happy and ... you know ... peaceful. (Sorry India, I have more confidence in your stability -- despite your neighbors.)

If I were running the US government my top priority for our economic interventions would be that they helped China. That's only one of several hundred reasons why I'll never hold political office.

So it's good news that Hilary Clinton was very warmly received in Beijing. And it's good news that James Fallows, senior editor of The Atlantic and Beijing resident for the past several years, sees real progress on climate change discussions ...

Even more on US-China climate cooperation - James Fallows

I've previously mentioned the Asia Society/Pew and Brookings proposals for US-Chinese cooperation. Here is another one, from the National Resources Defense Council, which has been doing environmental work in and with China for a long time. As a bonus, here is the summary of its 9-point action plan:

1. Engage in serious bilateral meetings on climate change and address the key sticking points to reaching meaningful agreement in Copenhagen in December 2009
2. Establish a US-China forum on climate change strategies that promote green jobs and economic recovery
3. Mobilize the untapped potential of energy efficiency
4. Assist in the deployment of renewable energy sources and technologies
5. Promote low-carbon, high-efficiency vehicles, fuels, transportation systems, and community development
6. Expand research and investment on carbon capture and storage technology
7. Improve greenhouse gas emissions monitoring and data transparency
8. Conduct co-benefit analysis on GHG [Greenhouse Gas] emissions controls
9. Invest in regular exchanges and sharing of expertise to improve enforcement of
environmental law and energy efficiency standards.

For North America climate change is a mixed bag. Some areas do worse (California agriculture is toast and we know New Orleans will sink), other regions, for a tropical primate, seem "better".

For China, however, climate change means lots more desert. China appears to pay far more attention to science than the Bushies or the Party of Limbaugh, so this is well understood there.

If China goes, we all go.

So it's double good that China relations in general are improving and that climate discussions are front and center.

Obama's maternal grandfather

As a father by adoption I've wondered who was Obama's de facto childhood father. As near as I can tell it was his maternal grandfather, Stanley Armour Dunham. I couldn't find out much about Mr. Dunham, perhaps because in our more or less patrilineal culture maternal grandfathers are kind of forgettable.

I really do need to read Obama's bio.