29 October 2014

You Can Never Be Too Thin...

or too rich.

For those still going gaga over the thinness of the iPhone 6, here's what's really going on.

5 volume (cube mm): 55,136
6 volume (cube mm): 63,843

So, Apple has much more space to work with, and not much more, other than the larger screen, to support. Piece of cake, if you ask me.

26 October 2014

You Don't Have to Believe Me

Recent musings, motivated by continued discontinuity between real world finance time series and micros/quants insistence on predicting past the data, have been devoted to this problem. The world is not linear (Dr. McElhone), and is mostly driven by incentive modifications rather than historical data. Those that believe otherwise still think The Great Recession was caused by the Trilateral Commission attempting to impose a New World Government. Baloney, of course.

On the other hand, some academics understand that time series prediction is flaky in actual practice.
There are at least four sources of uncertainty in forecasting using time series models:
...
4. The continuation of the historical data generating process into the future.

QED

19 October 2014

Lord of The Flies

Being stranded on an island in the Atlantic, though not all that far out, without my beloved desktop I'm forced to keep this short. I hate laptops, and this one (not mine, fur shur) is horrid. These endeavors have talked about the arc of the future, from the many perspectives of the macros, micros, and quants. Data doesn't help a bunch, if the incentive structure which generated the time series you're relying on to predict the future really isn't there any more. Much like Oakland in the view of Stein.

In today's NYT Business Upshot piece, Shiller takes on the miscreants. He's explicitly dealing with the Behavioural Economics aspects of Mr. Market, although he doesn't use the term. Rather, it's a faint feint to Ebola.
Fundamentally, stock markets are driven by popular narratives, which don't need basis in solid fact. True or not, such stories may be described as "thought viruses". When they are pernicious, they are analogous to the Ebola virus: They spread by contagion.

In the end, what's behind the recent collapse of Mr. Market's arches? Time for Dr. Scholls.
Some people say that a theory of John Maynard Keynes -- known as the "underconsumption theory" because it says people inherently underspend once they become prosperous - is taking hold.

Mark Twain wrote, arguably, the best dissection of that idea with "The Gilded Age", a decade before Keynes was born (and before "Huckleberry Finn", for what it's worth). Even if you're Daddy Warbucks, you can use only so many fast cars, loose women, and fancy food. Economists have known this, if not by explicit name, since long before Keynes.

The Wiki has a, not fawning, piece: here.

16 October 2014

One Life to Live

It was raining cats and dogs this morning here in South Fireplug, CT (although not nearly what my beloved, yet benighted, Bermuda faces tomorrow), so I postponed my daily stroll to get the dead trees NYT and a cuppa joe until it let up. In the meantime, I spent some time with r-bloggers and came across a young pup who talked about predicting life expectancy from historical data. I considered a tongue in cheek rebuttal, but tasks interfered.

The rain let up, and there were still NYTs on the shelf. What do I find? David Leonhardt's, et al take on the issue of quants not looking out the window to see if it's raining. These endeavors have addressed this issue a few times. Time series data of some attribute may be useful in predicting the attribute's future value, IFF the entities which have the attribute are running under God's Laws over which they have no control. On the other hand, when measures are of some aspect of human activity, it's mostly a Wizard of Oz situation: some human(s) are behind the curtain bending, breaking, or re-writing the "laws" of behavior which determine the attribute. It wasn't thermodynamics which propelled house prices, but various Wizards playing various games with the rules of the game. That financial quants were all too happy to ignore the absurdity of their data, well...

Curiously, one might argue that the examples (possibly, save one or two) he gives of odds are of attributes and entities which obey God's Laws. Such odds are accurate, by definition of our understanding of God's Laws. No mention of house prices continuing to rise like smoke from a volcano.

So far as life expectancy goes, if you go and look (I've provided links more than once), you'll see that from 1900 to 2000 life expectancy at birth increased by nearly 70%, but life expectancy at 65 increased about 7% of total lifetime (less if you measure from the start of Social Security). The increase in life expectancy at birth is the number that right wingnuts use to bray, "we have to kill SS because 'we' can't afford it. You all have to buy stocks and bonds from our friends in the financial services industry." Not that they see any conflict of interest. The overhead of SS is about 1%, and protects citizens from oscillations of Mr. Market. Can't say the same thing about that 401(k); all those Wall Street fat cats got fat off "your" retirement nest egg.

So, why is predicting life expectancy from today forward based on the accumulated data over the last X years silly? Because, just as the Wizard of Oz, those added years are the result of human intervention, sporadic and specific. Increase in life expectancy, whether at birth or 65 or some other age, is not a God given gift to humanity for just being on the planet for evermore years. Doesn't work that way. Most of the increase at birth is due to greatly diminished infant and child mortality, this due mostly to public health initiatives; vaccines and anti-biotics being discovered and made widely available. That's not going to happen again. One might even speculate that, with increasing wealth concentration, what had been widely available will become more restricted. With the loonies chirping about autism and vaccines and denying same to their spawn, we are finding increased (although not epidemic levels, yet) incidence of old diseases. And so on. Humanity, despite what some quants believe, isn't Brownian motion or a random walk. No, progress exists because humans change the rules, from time to time. And sometimes those changes benefit most of us rather the the 1% and we all live a bit longer. It isn't God that has provided us with longer lives than we had in 1900, it's us. As we've reached near the limit of our ability to stave off Father Doom, and, perhaps, our willingness to make this ability available to all, we will see a leveling (if not diminishment) of life expectancy at all ages.

11 October 2014

I Have No Interest in You, Anymore

Regular reader should recall that I've been pestering the macros, micros, and quants (especially those who're in love with time series) about The Giant Pool of Money, corporate moolah hoards, the limits of knowledge (once you know the Laws of Nature, there's little left to discover), and such. The upshot of these concerns is that real returns to physical capital, which is the only, and controlling, manifestation of compound interest must needs be declining. If there's no place to put the moolah that is productive, well...

Turns out, I'm not entirely alone. A bond pundit has weighed in, and reach just that conclusion. The piece doesn't detail the reasoning, but, really now, what else could it be? Too much moolah chasing too few real opportunities. House and car notes don't actually generate real return, only foregone consumption. That's not organic growth.

If you read German (I got tired of waiting for Google Translate to finish, sigh), this is the source interview. Not much longer than the English reference articles.

10 October 2014

Diamonds Are a Tim's Best Friend

I wonder: will anyone be willing to supply Apple now? They clearly, based on reporting, shafted GT. Nor, for that matter based on reporting, was GT Apple's first choice. Those earlier explorations led to companies saying NO to the terms Apple demanded. Much, if not most, of Apple supply dealings are in the Far East, away from US media reporting. I suspect there are many more corporate corpses over there. Make a deal with the devil...

Apple holds at least one patent on S/G/S and S/G lamination. Given BendGate, the likelihood that a monolithic sapphire screen would survive is slim.

Apple looks to have won this battle. The war is another matter.

07 October 2014

I Want My Gumby Phone

A few times I've mused that the phablet sized phones' days were numbered, and that flip phones (with flexible displays and/or hinges) would come back. Well, I'm no longer the only one.
Over the next couple of years, a lot will change. OLEDs, which are being sold as televisions by LG, can be made to conform to shapes. You can see the beginnings of the implications of that in Samsung's Galaxy Note Edge phablet. Thanks to new technology from companies like Kateeva, it's going to get even easier to make those flexible displays very soon. The implications are critical on two fronts (1) displays that bend, flex, fold and expand will become possible (2) screens that are nearly unbreakable will become commonplace.

I hereby claim the trademark and copyright on The Gumby Phone. Should have done that in the first place.