21 February 2016

Blocking and Tackling

Yet another piece on ad blocking. It even contributed this week's preamble entry. What the ad pushers, and ad buyers as well, don't want to admit: selling just views or eyes or impressions is just what newspapers and magazines have done for centuries. The web, it's zealots claimed, had a better way. But, where's the innovation? Ad pushers are just lazy. The tech to identify actual buyers of the adverted widgets exists. Yes, the number of eyes who look goes down, but all those (humble self included) who ignore ads are a waste of time and energy in the first place. Why do you bother? And do you really think your mumbling is so much more informative than Wikipedia? We don't need no widgets from your adverts. Long text ads in the the manner advocated by David Ogilvy are rather impossible:
In 1955, he coined the phrase, "The customer is not a moron, she's your wife" based on these values.

Of course, the innterTubes particularly on teeny phone screens, aren't a very good place for such adverts. Not to mention that all that ad cruff that turns a cable modem connection into a 1995 dialup experience. The tragedy of the commons, writ large.
"The temptation is to block these people who honestly aren't going to respond to ads anyway."
-- Ken Fisher, editor in chief ArsTechnica

As mentioned in an earlier missive: if the likes of Fisher have their way, the web will become the playground of just the 1% who have the moolah and inclination to buy silly widgets.

17 February 2016

Study in Scarlet

It's a well worn adage in the teaching biz, to which I've been connected more or less for a very long time, that you never really learn your subject until you have to teach it. The point being that until you can articulate the essence in your own words, you're just a rote robot. The question has always been: how to make the leap from learner to teacher? The best answer has always seemed to be: create a lesson to teach the material. In order to do that you have to answer the questions from the "students" you're going to teach. So, read then quiz. Rinse. Repeat.

Now comes some new experimentation which supports that notion. TutorText (that's 1961) has been mentioned once or twice. I had high school classes, maths if I recall correctly, using them. More than 50 years, and the notion of immediate testing has again been established.
"We found that you do better when you test yourself, rather than restudy, and that it didn't matter if you had A.D.H.D. or not," Dr. Knouse said in an interview. On average, the students recalled about 35 percent of the words they had studied twice, and 45 percent of those they studied once and then quizzed themselves on.

11 February 2016

The Tyranny of Average Cost, part the ninth

The Tyranny of Average Cost™ has morphed into a bugbear in these endeavors. One place where the Tyranny is manipulated to the benefit of the few with cost to the many is Pharma. I've mentioned a few times that Pharma has been pushing Orphan Drugs, based on periodic reporting. Orphan drugs, by FDA fiat (from statute), allow Pharma to charge monopoly pricing on, allegedly, small diseases.

Now comes some numbers confirming the anecdote.
Last year, the agency received a record 472 requests from companies to have their medicines designated as orphan drugs. And the FDA agreed to award 354 designations, which was a 22 percent increase over 2014.

The justification for the Orphan Drug Act amounts to bowing to The Tyranny of Average Cost™.
In a recent paper in the American Journal of Clinical Oncology, a team of researchers argued that drug makers are exploiting loopholes that allow them to widen the market for such drugs and distorting the original purpose of the law.

Ya think? The not always understood gotcha: once approved, a drug company can "educate" physicians to use any drug for any purpose. There are restrictions on how such "education" is implemented, but they're not much of a barrier. Rats manage to get through the teeniest crack.

Tears of A Clown

"He who laughs last didn't get it"
-- unknown wag (although Bierce or Mencken, could be)

Forbes is finally chuckling. For years it's been obvious, and frequently lamented here, that shipping by the tonne by rail is at least an order of magnitude cheaper than by the each by air. Amazon can eat the cost difference for so long. So, stock the B&M stores with the high volume movers, whether books or inflatable girl dolls or diapers brought in by low cost transport, leaving the low volume stuff in some of the fulfillment centres, and charging real transport cost. Where else is the buyer going to get a left handed nostril cleaner? Hmm?
We believe that by opening physical stores, Amazon might be looking to provide a more personal shopping experience to its consumers, reduce shipping costs by providing a store pick up facility and integrate the online and offline shopping

09 February 2016

Pity the Poor Bankster

Well, pundits are finally getting it: they ain't much return in real investment.
Central banks have kept interest rates low to stimulate demand for loans. But loans with low interest rates are often less profitable for banks. As a result, banks may then lend less, which may then reduce the overall impact of low interest rates on the economy.

Unfortunately, but not surprising, the reporter (and, one might presume, his sources) ignores the other sides of the situation. First, corporations can sell bonds directly, thus benefiting from low interest rates. Second, if business generally had some idea of how to grow organically, low rates lowers the necessary return from investment. That was, after all, the notion behind QE (and successors): business will invest more if the internal rate of return of real investment only has to pay back 2 or 3 percent on borrowing. But, of course, corporations packing away trillions in retained profit aren't going to borrow to invest. They have been borrowing to pay dividends, buy back own shares, and buy competitors. Invest? How childish.

08 February 2016

Dee Feat is in Dee Flation, part the thirty first

Well, the shit keeps hitting the fan:
Treasuries Rally on Risk Aversion

U.S. Treasuries are starting the week on a strong note as European equity indices move to multi-year lows and the German 10-year Bund yield declines 5 bps to 0.25%. The S&P 500 is indicating down 1.14% to 1,856.5 and WTI crude is down 2.85% to $30.01/bbl. The U.S. Dollar Index is up 0.19% to 97.22 and gold is up 1.75% to $1,178/troy oz., a fresh multi-month high
Yield Check:
2-yr: -2 bps to 0.70%
5-yr: -3 bps to 1.21%
10-yr: -3 bps to 1.81%
30-yr: -2 bps to 2.65%

briefing.com 8 Feb 2016, 7:38am

07 February 2016

Deductive Reasoning

Among the most interesting, if heinous, ideas of the 1% is that healthcare is just another consumption good, and if "we" make it more expensive, then people will spend less on healthcare. And the rich will get richer, of course. The notion, of course, is nonsense. Only the 1% could ever afford tummy tucks and silicone boobs and such. The rest of us only seek healthcare when something bad happens. There have been studies (you can find them, if you're interested) which find that preventative healthcare makes no difference to overall health of a population. That should be obvious: how many health problems do you know of that show up in an annual (or biannual) physical? Vanishingly few.

One of the core ideas of the save-money-by-making-healthcare-expensive is high deductible plans. Again, the notion that such plans are both less expensive and offer better health is grounded in the notion that the 99% are visiting doctors like corner ice cream shops. Of course not. Sure, there are a few hypochondriacs, but the gross effect is to deny vital healthcare when it's a matter of life or mortality/morbidity.

Today is a report on a study bringing some data to the issue. I expect you'll find it illuminating.
The hospital offering the $3,000 M.R.I. might lose enough business that it will lower its price.

I picked that particular sentence, since The Tyranny of Average Cost™ is generally couched in terms of what happens to the price of MRI scans if far fewer are done. The notion that MRI scans are highly price elastic makes no sense: the cost is almost entirely amortization of the machinery. There's not much else to pay for. Fewer MRIs at $3,000 mean that the MRI scan now costs $4,000 or $5,000, depending on how many are removed from the accounting.

Anyway, a large, unnamed company instituted a high deductible plan, and was followed by some academic researchers.
Amitabh Chandra, an economist at Harvard, and one of the researchers, said he was convinced the study would prove the value of deductibles, at least for well-off and well-educated workers.

He was wrong.
Mr. Chandra said he was no longer convinced that deductibles turned patients into good consumers. "The best case was the theoretical case," he said. "I was all for high-deductible plans before I wrote my paper."

And, of course, the punchline is stated explicitly:
"There's essentially nothing they can do to prevent the likelihood they'll have high-cost health events," [Dr. Peter B. Bach] said.

Well, just die early. Which is the whole point, of course.

04 February 2016

Lucy and the Football

I'm not the most avid sports fan, but the rise of "advanced analytics" has the benefit of amusement. AA is really nothing more than descriptive stat plus a bit of population correlation. Squared differences, variously manipulated. From what I gather, it all began in baseball and Billy Bean decades ago. Now, one can be paid silly amounts of money for running simplistic correlation programs on reams of data. Such a life.

About the only sports TeeVee I'll admit addiction to is "Pardon the Interruption", and largely because Korny and Wilbon are ex-Washington Post. I lived there for rather a while, and deeply regret leaving. That's another episode. Yesterday had, as one might expect, much discussion about the Broncos and Panthers. In particular, whether the Panthers' record is legit or not. Korny noted that the Panthers had a really weak schedule (27th, meaning almost the weakest), thus their 15-1 regular season record is some part smoke and mirrors.

I certainly don't care enough (I don't bet on anything other than MegaMillions) to confirm to what, if any, degree the following scenario applies to the Panthers this year, but just consider.

The issue is strength of schedule, which gets various names in use. Consider a team's (ABC) third game of the season against team PQR. ABC wins. At the end of the season PQR has a record of 9-7, making them a so-so team, neither really good nor really bad; a middling weight. Might even be in the playoffs. From ABC's point of view, its record's SoS weighting would view the PQR third week win as a net positive. But... how well was PQR playing in the third week (I'll assume that ABC, for these purposes, played at a constant level for the year; accounting for ABC's fluctuations just means more arithmetic), which is what really counts in determining the appropriate weight? There are two extremes that lead week three to be viewed as a local minimum or local maximum, from a weighting point of view: PQR's record in the previous and latter two (or one or three or four or...) weeks. On the one hand, PQR could have been blown away in those four games by teams that had losing records both for the year, and the local five week schedule; making a win over a 9-7 team over weighted. On the other, PQR could have blown away teams with winning records, both for the year and the local five week schedule, excepting ABC which beat them; making the win more significant. Details matter. Actual SoS calculations often go to additional levels of opponent schedules, so some folks do care to be accurate.

What matters most, of course, in attempting to predict any single game outcome is standard SWOT analysis, data appropriate to the sport. That's not so much data as anecdotal assessment. There's a reason legal betting odds on sports aren't determined by experts, but by the flow of bets on the participants. The sports books change the odds to move the money flows between the opponents aiming for a 50-50 split, taking a cut from the gross.