Against creationism - the toenail

No rational creator would give humans toenails.

Ouch.

Get ready to refinance your mortgage?

The Fed just “printed” a trillion dollars.

One analyst expects mortgage rates to fall as a result …

Economists’ Reactions to the Fed’s Move - Economix Blog - NYTimes.com

David Greenlaw, Morgan Stanley: The Fed’s announcement signals a clear intent to continue to drive mortgage rates lower and we expect them to meet this objective. This could represent a powerful source of stimulus for the household sector of the economy. In 2008, the average mortgage rate on the outstanding stock of loans was about 6.50%. So, if the Fed brings 30-yr fixed rate mortgages down to 4.50% and all homeowners are able refi, the aggregate permanent cash flow savings would be on the order of $200 billion per year.

We’ll be watching.

Of course now we’ll all be watching for bubble #3. We had stocks, then we had real estate. What’s left? A bonds bubble?

Annals of poorly chosen words - best and the brightest

I haven't had a strong opinion on what the feds should do about the AIG bonuses you and I are paying to the team responsible for history's greatest financial disaster. It feels like only one manifestation of a much bigger failure of the compensation market, a zero-bound type failure because the winners now work to win, not to live.

In other words, the winners of the compensation wars can leave the game whenever they want. They play by different rules than the rest of us. We can change that in the future, but it's hard to fix it today.

David Leonhardt's observation does a nice job of skewering one common rationale however ...

Ah, retention pay. It has been one of the great rationales for showering money on chief executives and bankers regardless of how well they are doing their jobs. It’s just that the specific rationale keeps changing.

In the booming 1990s, companies supposedly had to pay retention bonuses because executives had so many other job opportunities. There was a war raging — a war for talent, said McKinsey & Company, the consulting firm.

Then came the aftermath of Enron, when new scrutiny and regulations apparently made some chief executives wonder if they still wanted their jobs. “I’m thinking of actually getting out,” David D’Alessandro, the head of John Hancock Financial Services, reported hearing from one fellow chief executive. The antidote to such doubts? Retention pay, obviously.

Now comes Mr. Liddy, the government-appointed chief of A.I.G., defending multimillion-dollar bonus payments for the people who run the small division that brought down the company. If the government doesn’t let them have their money, they will walk away, Mr. Liddy says, and nobody else will know how to clean up their mess...

So this is a big and deep problem, but skewering AIG's winners is most likely a distraction. We've been taken, but if we spend all our energy beating up on these particular winners we're likely to forget about the bigger failure in the global compensation market.

On the other hand, I do have a strong opinion that Edward Liddy, the winner who returned from retirement to manage AIG [1], showed the insight of a gnat when he wrote (italics mine) ...

... We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury...

Even in the context of our day, that's breathtaking. It's so revealing that Liddy could write that, and that Larry Summers didn't blow a gasket reading it.

Maybe it's just basal ganglia running on automatic. CEO's everywhere call their team the "best and the brightest" even when they've already decided to fire everyone and try with a new batch of losers. In which case using the phrase in this context is merely an idiotic mistake.

It's more likely, however, that Liddy believes he and his team are indeed "the best and the brightest". Winning does that to primates, it's in our genes and our neurochemistry. Unfortunately, Geithner and Summers may believe it as well.

Whatever else comes of this bit of interesting times, let's skewer, rend and bury the phrase "best and the brightest" for all time. CEOs, find another euphemism for "you're all a bunch of losers but I can't get rid of you today".

[1] Update: Turns out if AIG goes bankrupt Liddy loses a massive retirement package that he's probably depending on. So he does have skin in the game.

Update 3/19/09: I think this is right ...

Why AIG paid the bonuses (Nate Silver, 538)

The thing about these "bonuses", however is that they're not really bonuses, which we usually think of as incentive-based compensation. On the contrary, they are something the opposite of bonuses: they took compensation that had been incentive-based and guaranteed it...

The fundamental issue here what I call asymmetrical agency bias. We as human beings tend to attribute our results to skill when we are performing well, but (bad) luck when we are performing poorly...

... I'm interested in compensation and incentivization structures in general. Aggregate compensation throughout the financial services industry, I would guess, is much higher than is economically optimal (there is a lot of evidence that this is true of CEO pay). A lot of people are getting paid for what is thought to be skill but is really just luck (or economic rent).

If, as at most hedge funds, the employees are buying in with their own capital and bearing a lot of the downside risk, that is one thing. At a publicly-traded company, however, those employees are taking profits out of the shareholders' hands. And at a publicly-traded company that happens to be owned by the taxpayers, they're taking money out of the taxpayers' hands.

The compensation paid to AIG's employees, however, is less a moral failure than a market failure. We don't like to admit to market failures because they indict our collective judgment; instead we scapegoat and move on. But there are some ways to address these market failures; the more time we spend focusing on those, and the less on AIG, the more money we the taxpayers will save ourselves in the end.

Avoiding the baby in car tragedy - the tethered parent

When I read of a parent who forgets their infant in car seat and leaves them to die in a hot car, I don't think "bad parent". I think "thank you random chance, there but for the odds go I".

I remember a young child asking me from his car seat why I'd missed the turn off for work. (This was a "special needs" child who's always had a knack for directions.) I'd forgotten he was there. Bad feeling.

About 20 American parents (mostly fathers I bet) make the ultimate mistake every year. Typically it's a change to an automatic routine, a chance request to drop a child in day care on the way to work. The infant falls asleep, the basal ganglia takes over, then tragedy.

My children are old enough that they can get out of the car. If they were in car seats though, I'd follow this advice when in the high risk situation of deviation from a common habit ...

Schneier on Security: Leaving Infants in the Car (comments)

... Secure a string to the car seat and yourself (belt, wrist, etc.). Leave plenty of slack so it doesn't interfere with driving, but if you try to exit the car and forget, the string will tug. Having to unclip the string will provide the reminder...

Another study showing why 65 is a reasonable retirement age

Speaking as someone closer to 65 than to 30, this is not surprising ...

Brain study says 30 is the new 60 | Good Morning Silicon Valley

... according to a new study by Professor Timothy Salthouse of the University of Virginia, functions like reasoning, spatial visualization and speed of thought peak around age 22 and start to decline around 27. Based on performance tests like those used by doctors to spot signs of dementia, Salthouse found that memory functions start to go at 37 on average, while abilities based on accumulated knowledge, such as performance on tests of vocabulary or general information, increased until the age of 60. After that, you’ll need to depend on the animal cunning that comes with perspective and experience...

This is normal degeneration of course, not the accelerated degeneration we call "dementia". As go the abs, so goes the brain.

The saving grace is that even as our middle-aged brains and biceps turn to pudding, we play the experience card for all its worth. Similarly personality quirks (and even some very serious brain disorders like schizophrenia) often improve with age. So while my 50 yo brain can't reason its way out of a paper bag, it can get a reasonable amount of work done.

The trick is the other side of 65 - even for "healthy" brains. That can be a prime age for a politician, but it ain't so hot for much other cognitive work.

Which is why I find talk of "working to 75" a bit disingenuous. Working at the grocery store maybe ...

iPhone 3.0 - how many of my wishes were granted?

Here's how my personal wish list of last week played out. The Good stuff is in purple, Bad news in Red...

Gordon's Notes: Dreaming of iPhone 3.0 - my wishes

1. External keyboard support like the folding keyboards that were once sold with Palm. Maybe, since 3rd parties can now use the connector.
   
2. A standard way for 3rd party applications to synchronize with the desktop (maybe through the heretofore off-limits dock connector). No, this was not included (my first impression was wrong).
3. Something that lets me do instant messaging without paying SMS fees. Yes.
4. A Calendar API so 3rd party apps can get at Calendar data and manipulate it. No, this was not included.
   
5. Filemaker for the iPhone (not Apple so doesn't count)
6. Fix the weird scrolling and text limit problems with long contact and calendar notes (unknown)
7. Make the Calendar app more real. Better control of alerts, ability to do invitations, etc. (unknown)
8. Tethering. Widely expected, but not included. Of course there is the open connector. Either AT&T's network isn't ready or Apple and AT&T couldn't agree on revenue sharing and price. (Update: in the Q&A Apple confirmed the phone is ready, it's now all about the operators.)
   
9. Support multi-account synchronization: Additional calendar types sounds like it does at least part of what I want.
10. Cut, Copy, Paste: I assumed that was a done deal so I didn't bother to list it. They did this one very well.

Against this list there are former "Demands" that I've now given up on ...

1. Tasks and Notes: They did Note Sync after all, no tasks though. I don't care since Google is going to do Tasks.
2. Search: I gave up on this one, but Apple did it anyway. Yay!

Since there's an API for iPod.app I assume Clock.app will finally be able set music alarms. I'm perfectly happy with using Spotlight to find apps.

Overall, very good news for me. Sometime this summer (September?) I'm going to get somewhere between 50% and 80% of what I hoped for. I liked Apple's hardware announcements last month so that's twice in a row Apple has done good things for me.

Update: Tidbits claimed that VOIP is among the API services. Huh?! That can't be right.

Update 2: Ars Techica says the same thing. iPhone 3.0 will offer VOIP? Am I confused? Between Google Voice and iPhone VOIP why do I need all those AT&T minutes and long distance services?

Update 3/18/09: More like 50% of what I'd asked for. Unfortunately two of my key requests, Calendar access and a standard sync infrastructure were not included. I've revised my original post. So for me it's only a good announcement, not a great announcement.

Why is iPhone 3.0 push notification carrier specific?

The big value proposition for iPhone 3.0 push notification is dumping SMS fees and using instant messaging.

That's an internet app though. So why does iPhone 3.0 push notification require adjustment by carrier?

Macworld | iPhone Software 3.0: Live Update

... IT's a unified generic push notification service for all developers. They've also optimized it for mobile networks. Since they're in over 80 countries, with over 25 carriers, there are a bunch of different configurations. Apple does the hard work keeping the connection open. "And now it's really scalable and ready to go...

So do the carriers get to protect SMS revenue after all?

Storms in the cloud: Google Reader, Google Calendar ...

I really don't trust the cloud. I care about my data far more than any corporation cares.

It's tough to fight mother nature though, so I've made a big family bet on Google.

So some recent news is distressing.

It started with Google Reader. For the past week the "blogroll" feature has been broken. That's no big deal. Bugs happen, they get fixed. Problem is there's been no response from Google to what, at last count, were 38 posts from 20 authors (ok, so I posted more than once) in the Google Reader Help group.

And I thought Reader was one of Google's better products.

Today it hit Google Calendar. I'm not seeing any events that are more than a week or two in the future.

Needless to say, I'm sincerely hoping this is a transient glitch. It's not like I can restore from backup. [1]

At this rate I'm going to move from distrusting the Cloud to loathing the Cloud.

[1] Update 3/18/09: My Google cloud joy has grown so much I've a f/u post pending. I did, however, discover that there's now a feature to export all calendars as a zipped .ics file (see Calendar Settings page), so there is an awkward backup option. Of course non-automated backup is pointless, but this is a nice data freedom example. What I'd like to see is the ability to automatically archive a calendar snapshot to a google "backup"/snapshot service.

When stocks fall, where does the money go? Essential reading

Via Freakonomics, I get to an article that answers longstanding questions of mine ...

http://finance.yahoo.com/focus-retirement/article/106739/When-Stock-Prices-Drop-Where%27s-the-Money?mod=fidelity-buildingwealth

... So, if you purchase a stock for $10 and then sell it for only $5, you will (obviously) lose $5. It may feel like that money must go to someone else, but that isn't exactly true. It doesn't go to the person who buys the stock from you. The company that issued the stock doesn't get it either. The brokerage is also left empty-handed, as you only paid it to make the transaction on your behalf. So the question remains: where did the money go?...

... The most straightforward answer to this question is that it actually disappeared into thin air, along with the decrease in demand for the stock, or, more specifically, the decrease in investors' favorable perception of it...

Superb.

The dangers of the early books

I've been reading Gears of the City. I don't care for it; to me it's bleak yet predictable. I'm slogging to the end, but it's a chore.

The book is hallucinogenic. It's loaded with memes of despair. They infiltrate my own memetic structure, altering my thoughts and attitudes.

I'm accustomed to this drug however. I've done much harder stuff, stiffer literary trips, books that rend and tear. I've been reading all my life, I was born into a culture that had made reading culturally acceptable and chained it with tradition. My genes are reader genes; the genes of those made mad by reading have passed on.

What were books like when Gutenberg unleased a plague of memes open medieval Europe? Those early minds must have been torn like leaves ...

Is AIG's major counterparty China?

The NYT summarizes the state of dispute about where AIG money is going. Who are the "counterparties"? Shouldn't they take a hit too?

Maybe, but we're beyond mere billions here. These are nation-sized hits.

I can imagine "counterparties" who we really don't want to disrupt.

China, for example.

America's in a tough spot, Europe's probably in a significantly worse spot, but China is spun glass on a cliff. If China goes, we all go.

So even though I'm sure Geithner is as human and imperfect as the rest of us, and even though there's been about as much fraud in the world as I'd imagined these past years, and even though people who earn vast millions still delude themselves that they have some sort of meretricious claims to their wealth, even given all of the above, I can imagine reasons why Geithner would want to keep quiet about AIG's counterparties.

Apple's defective iMac displays

Nearly all owners? That's impressive ...

AppleInsider | Apple sued over exploding iPod touch, iMac display issues

... Florida resident Roman Huff observes that his 17-inch iMac bought in November 2006 -- here labeled an iMac G5 despite clearly being an Intel-based model -- is representative of a display defect that affects nearly all owners of that generation of the computer.

The complaint echoes those of a similar January lawsuit and says that 'thousands' of iMac owners start to see vertical lines appear on their LCDs months after first use. These gradually multiply and wash out the color of the display to where it's unusable; in an all-in-one desktop, this renders the entire system useless, Huff's suit contends...

My AMEX card gives me an extra 1 year warranty. In my experience Apple is pretty average when it comes to quality control and "doing the right thing".

I'm rooting for Huff. A billion in punitive damages would probably change Apple's attitudes.

The details of American torture

Today's NYT OpEd is the condensed version of an article from the New York Review of Books. It is the story of American torture of "high value prisoners".

Mark Danner - Tales From Torture’s Dark World - NYTimes.com

... A few weeks later, from Oct. 6 to 11 and then from Dec. 4 to 14, 2006, Red Cross officials — whose duty it is to monitor compliance with the Geneva Conventions and to supervise treatment of prisoners of war — traveled to Guantánamo and began interviewing the prisoners.

Their stated goal was to produce a report that would “provide a description of the treatment and material conditions of detention of the 14 during the period they were held in the C.I.A. detention program,” periods ranging “from 16 months to almost four and a half years.”

As the Red Cross interviewers informed the detainees, their report was not intended to be released to the public but, “to the extent that each detainee agreed for it to be transmitted to the authorities,” to be given in strictest secrecy to officials of the government agency that had been in charge of holding them — in this case the Central Intelligence Agency, to whose acting general counsel, John Rizzo, the report was sent on Feb. 14, 2007.

The result is a document — labeled “confidential” and clearly intended only for the eyes of those senior American officials — that tells a story of what happened to each of the 14 detainees inside the black sites.

A short time ago, this document came into my hands and I have set out the stories it tells in a longer article in The New York Review of Books. Because these stories were taken down confidentially in patient interviews by professionals from the International Committee of the Red Cross, and not intended for public consumption, they have an unusual claim to authenticity.

Indeed, since the detainees were kept strictly apart and isolated, both at the black sites and at Guantánamo, the striking similarity in their stories would seem to make fabrication extremely unlikely. As its authors state in their introduction, “The I.C.R.C. wishes to underscore that the consistency of the detailed allegations provided separately by each of the 14 adds particular weight to the information provided below.”

Beginning with the chapter headings on its contents page — “suffocation by water,” “prolonged stress standing,” “beatings by use of a collar,” “confinement in a box” — the document makes compelling and chilling reading. The stories recounted in its fewer than 50 pages lead inexorably to this unequivocal conclusion, which, given its source, has the power of a legal determination: “The allegations of ill treatment of the detainees indicate that, in many cases, the ill treatment to which they were subjected while held in the C.I.A. program, either singly or in combination, constituted torture. In addition, many other elements of the ill treatment, either singly or in combination, constituted cruel, inhuman or degrading treatment.”...

The torture is somewhat more than we imagined and it went on for longer than we've been told, but it is not qualitatively different.

Rice, Bush, Rumsfeld, Cheney and their kin are all deeply implicated. I think one or more of them will be tried one day, probably abroad, possibly in the United States as well. This document will be submitted as a part of the evidence against them.

Every American, but especially those who voted to reelect Bush and Cheney in 2004, share some of their guilt.

The consequences of Bush's decisions will live with us. From the NY Review of Books:

... Qahtani's interrogation at Guantánamo, accounts of which have appeared in Time and The Washington Post, was intense and prolonged, stretching for fifty consecutive days beginning in the late fall of 2002, and led to his hospitalization on at least two occasions. Some of the techniques used, including longtime sitting in restraints, prolonged exposure to cold, loud music, and noise, and sleep deprivation, recall those described in the ICRC report. If the "coercive" and "abusive" interrogation of Qahtani makes trying him impossible, one may doubt that any of the fourteen "high-value detainees" whose accounts are given in this report will ever be tried and sentenced in an internationally recognized and sanctioned legal proceeding...

We are told these men knowingly killed and injured tens of thousands of people. Personally, I believe they did. Because of what Bush and Cheney did, they can't be tried in any standard legal procedure.

I used to think Bush was only the 3rd or maybe even 4th worst president we've had. We have, after all, had some real stinkers.

I now think he was the worst ever.

When DRM is a force for good - the Apple App Store software renaissance

Once upon a time we had a pretty good collection of educational software for children.



It wasn't quite as good as what we could find in the late 80s and early 90s (Windows 3.1 and especially Mac Classic), but it wasn't too bad. Of course most of it was written for Windows 3.1 and Mac Classic. Very little of it still worked when we gave this set away to people with older machines and younger children.

There's nothing like this software now. In the absence of a reliable and cost-effective distribution channel, a balanced approach to copy prevention (digital rights management), a stable computing platform and a process to eliminate semi-fraudulent garbage software prices were high and the quality was pretty darned lousy.

That market went away.

So is the web a replacement? Is there comparable educational software on the net?

This story gives one answer ...

Be the Best You can Be: Math fact drills for an Asperger's child - two excellent solutions

First I went to the web, where I was again reminded of an old unsolved business problem. We have yet to figure out a way to deliver quality web based software solutions to this kind of niche market. It's not a technology problem, it's a business problem.

The best web solution I could find was Math Playground, and that required digging through heavily ad surrounded sites, sensory overload sites that were annoying even to a non-Asperger's person, dozens of me-too sites, spam sites, suspicious domains, and so on. In other words, lots of junk or marketing efforts.

Once upon a time I might have tried finding educational software for OS X or even (further back) Windows, but that market hasn't just died, it's died a thousand deaths...

Of course there's also the Wii, but those apps tend to be very expensive (Nintendo's cut), heavy on the entertainment, and rarely focal enough for my needs.

So I skipped from the web to the astoundingly successful Apple (iPhone/iTouch) App Store.

There I downloaded five Math Drill apps. Some cost money, some were free. The ones that cost money were all less than $3 so, as far as I was concerned, they were as good as free ...

... Of the five apps I tried only one was a real dud (stupid advertisers), two are excellent, and two are quite usable...

So what does the Apple Apps Store have that the web, desktop OSs, and the Wii don't have? Four things:

1. A balanced approach to Digital Rights Management. App store games can be synched to as many as five devices from a single Library/user account. (Practically this means a single OS X user account a single iTunes user account. See also OS Xuser share design flaw.)
2. A distribution channel, albeit one that's currently overloaded (a solvable problem).
3. A quality filter, weeding out the criminal and the plainly stupid.
4. A stable computing platform
   

With these four advantages the iTouch/iPhone platform and the Apple App Store has created a renaissance in small market, targeted software - a flurry of creativity last seen in the early 80s.

And, much to my chagrin, we owe much of it to the DRM ...

Just imagine what will happen Apple does launch their widely expected netbook-variant, particularly if they bundle it with Amazon's iPhone Kindle app and back to school books ...

App Store overload - smarter browser needed!

The iPhone/iTouch/iNetbook-t0-be Apple App Store recently passed the 25,000 app mark.

Let's assume 15,000 are available in English. Delete 500 flashlights and 1000 defunct or buggy apps and you still get a vast number of applications. I have about 90 applications on my iPhone *; that means I'm using less than 1% of what's been published.

Did Apple really imagine how big the App Store was going to be? Does the media understand how much this success owes to Apple's Digital Rights Management FairPlay (DRM) infrastructure? (Maybe and No.)

It's a staggering success. It's also becoming unusable.

I recently went looking for math facts/math drill apps (my reviews here). I found a pretty good set and paid for four of them**, but it was a haphazard experience. I'm sure I've missed some excellent examples. Apple's browsing and search tools are simply overwhelmed.

The App Store's "advanced" search is pretty darned feeble. Happily, they've got some very good examples to draw from. The iTunes UI for constructing smart playlists is pretty damned good. Apple needs to reuse that design in the App Store.

Please!

* Those are the ones I or my children use. There are another 10 or so that we've set aside and no longer keep on the phone. The iPhone app management browser is completely overwhelmed by 90 apps, but presumably iPhone 3.0 will address that.
** And that's a part of the genius of the App Store. I didn't agonize over my purchases. I looked at a few reviews, always checking the negative ones first, then bought without a qualm. $1-$3 doesn't take much thought when I'm 90% sure the product will be pretty good. If only my earth-world purchases were so predictable.