Support Your Local Cop

For those with an interest, especially a betting one, in the NBA Finals, you should send Joey Crawford a really big fruit basket. The previous three games of the Cleveland Criminals betting the crap out of the Golden State Wimps, notably Soft Steph, came to a screeching halt. Basketball is, by definition, a non-contact sport.

Straight from the NBA site:

Hand Checking: A defender may not place and keep his hand on an opponent unless he is in the area near the basket with his back to the basket. A defender may momentarily touch an opponent with his hand anywhere on the court as long as it does not affect the opponent’s movement (speed, quickness, balance, rhythm).

Delly played bump and run about as well as Revis, BJ (Before Joey). But, he's way too small for the NFL.

Cognitive Dissonance

My colleagues in the psych- disciplines invented the term, and it appears in reality all too often. Case in point: this story on MicroSoft making touch screens in the USofA. I'll suppose that it was crafted as a feel good story.

But... there's that graph. Those on both the Left and the Right yap about No Child Left Behind and STEM. The fact is, US business runs as far away from educated workers as fast and as far as it can get. Welcome to the Robo Cop Era.

Delta Dawn

Over the past few weeks, there've been a few pissing contests, some of which experienced my participation, over the benefits and necessities of large n studies. In one case, two compounds with similar indications had n of 12 and 1,500, and the argument was over whether the 1,500 sized trial would, by size alone, produce more believeable, i.e. stat sig, results.

Naturally, I piped up with the standard, within the quant community, observation that the larger the delta between control and active, the fewer observations (n) one needs to reach stat sig. With big differences, small counts suffice.

Well, boy howdy. Today Sage releases data on its postpartum depression drug, SAGE-547. The measure used went from 26.5 (before) to 1.8 (after). The p = .001 for a paired t-test. There were 4 women in the trial. 4.

Matthew Herper has a long-ish write up, with usual caveats about the study, drug and so forth. And no arguments from me. Big delta, little trial.

On the other hand, crafty bio-pharma will fund trials with thousands of patients to generate stat sig on teeny, tiny deltas. All in hope of getting FDA to approve. When Pharma weeps that it cost $$$ to get a drug approved, remember why: large studies to demonstrate stat sig on minuscule difference eat a lot of moolah. Such a waste. With wily sales reps, these drugs might make some money. Naturally, Sage is in Cambridge (not the one in England) and run by a Harvard guy.

Potable Software

If you watch "Jeopardy!", recall that in the middle of the first game, Trebek chats with each contestant, with the current champion generally getting the most leeway. A couple of times, although many years ago, I took the test (the first when Merv had the first casino in Atlantic City used for the tryouts, a converted hotel) and passed. Never got the call. I called my sister, who lives in the San Diego area, if she could find out what the deal was. What she found was that the producers mostly took walk-ins! Oh well.

Anyway, I occasionally consider what my patter would be during that intermission. Herewith:

I'm a writer, with two projects, one on macro-economics and one on databases and quantitative analysis. The macro folks tend think about what's best for all, while the quant types focus on what's best for just their employer. These concerns sometimes converge like this. Suppose you're an almond farmer in the Central Valley today. In order to beat the other farmers, you drill a thousand foot well and have plenty of water, and get a bumper crop of almonds (they're especially thirsty bits). You get rich, while those other farmers go poor. But what happens if all the almond farmers in the Central Valley drill thousand foot wells? If the strategy works, for the season, all the farmers have bumper crops, which explodes the supply and crashes the price. They'll all be lucky to have enough to pay for the wells. Nobody gets rich. Oh, and there's no more water left in the aquifer for anybody.

Fishermen face a similar problem. Always have.

A fanciful tale, some would say. Just another example of what Your Good Mother taught you: "what would the world be like if everybody behaved like you?". Gentle reader, you've read it here many times.

Turns out, not so fanciful.

Like it or not, the 19th century is long gone; those days of infinite supply of whatever resource made money. Hell, the Dust Bowl wasn't all that long ago.

"You drill a well on your property, you draw it out, even if it means you draw from under your neighbor's property," [Jay Famiglietti, senior water scientist at the NASA Jet Propulsion Laboratory] says. "You're drawing water from every direction."
Underground water supply isn't fenced or restricted; it is moisture held in the soil, rocks and clay, and drawn through wells like soda through a straw.

Lying Figures

It's long been a premise of these endeavors that financial quants really don't do meaningful quant. Leave that to the real scientists. Financial quants dig for cracks in the regulatory environment to legally cheat the system. Sometimes, like Li, they dress up their subterfuge in a pretty pink dress, but the aim is the same: cheat one's way to wealth. It's easy to get rich if one avoids the rules. Some on the right wing bray about free markets and Adam Smith (presumably, the real one), but a level competitive landscape means that income and wealth distributions are flat, since no one has power to control markets.

So, it is with a heavy heart that I take this missive to refer gentle reader to the latest reportage of chicanery.

An analysis of results from 500 major companies by The Associated Press, based on data provided by S&P Capital IQ, a research firm, found that the gap between the "adjusted" profits that analysts cite and bottom-line earnings figures that companies are legally obliged to report, or net income, has widened dramatically over the past five years.

As has been mentioned before, if one-time charges keep showing up in each quarterly, might it be that corporation management is intent on siphoning off moolah to places it ought not be going?

Boston Scientific says the numbers allow investors to see the company "through the eyes of management" because they are the same ones its executives use in making decisions.

I wonder? Does that mean each shareholder should get the same options gifts that CxOs get? I mean, if shareholders are supposed to look at some numbers in the same way as management, shouldn't they get the same numbers in their pay envelopes? I guess not. Sheep are for shearing, not for marrying one's daughter.

Note: this bit of sleight of hand is different from the lack of new organic growth which is driving down interest rates and thus driving up asset prices. If The Masters of The World continue to refuse to make physical investment, i.e. expand real production, they earn no real return. In other words, they're creating the world of 0% interest rate. Opportunity cost is always a race to the bottom; alternatives need only be a whisker's width higher, and will keep that difference as the lowest return collapses. There's simply no reason to pay more. "You don't want my 1%? Fine, stuff your moolah in your mattress! Or find a more lucrative use of your moolah! What? You can't think of one??? Again, take it or leave it!!!"

Lemmings By The Dozen

All of the various topics of these endeavors flow from a single theme: what actions lead to the greatest good over the long term. Such a theme irritates the micro and quant crowd, since both view the world narrowly to their particular organization over, at most, a calendar quarter. It's a dog eat dog world, right now!! God damn you liberals!!!

Oh well.

One of my fave topics is that the advert driven innterTubes is not sustainable. We saw how it has killed off paper-based journalism. The twits are eagerly killing off any form of expression longer than 140 characters; which no amount of ritalin will fix. Now comes a person of importance getting a national soapbox to say so. Me First!!! Oh well.

Internet ads are basically worthless unless they are hyper-targeted based on tracking and extensive profiling of users.

Remember Target??!!?? Highly targeted, fur shur.

Do most lemmings know they're being spied on? I guess not. Or they don't care. The world of Robo Cop creeps ever nearer. Except, there won't be one to execute the venal CxOs.

Mr. Zuckerberg has reportedly spent more than $30 million to buy the homes around his in Palo Alto, Calif., and more than $100 million for a secluded parcel of land in Hawaii. He knows privacy is worth paying for. So he should let us pay a few dollars to protect ours.

There's an old saying, from whence I know not (nor does the innterTubes): We are too soon old, and too late smart.

Gentle Ben

These endeavors began in March, 2009; one in tribute to Dr. Codd and the other to Dr. Keynes. Both had figured out how to understand important vectors of human endeavor (both of which have been central to my professional life), and both have been ignored and even denigrated for voicing their wisdom. What Santayana said, in it's many variations.

I wrote thus, on 22 March 2009, my first post:

Failure is not success. In the context of a Federal government stimulus program, success means there are more wage earners earning more than they did before the stimulus. Success is *not* simply a rise in GDP/GNP; we had that during the Bush years, and we find ourselves in a bit of a mess, since the most of that growth went to a small fraction of the population. It can be argued, and I certainly would, that the Bush approach to economics is a cause of the current mess, although the approach was not original with him; he didn't have one original thought.

Ben Bernanke has left his hidey hole, and, more or less, fesses up that I was right. He also asserts that it doesn't matter. He asserts that fiscal policy should be used. He elides the salient fact: Obambi was forced to put the burden on the Fed since the right wingnuts wouldn't allow significant fiscal policy to deal with the problem. That's the last thing they want. A full blown terminal depression is so 19th century.

From the article, not a Ben quote to be clear:

The stock market has soared, and investors have prospered, even as wage growth has stagnated. Kevin Warsh, a former Fed governor, has memorably described the Fed's current role as a "reverse Robin Hood", rewarding the rich at the expense of the poor.

As to unemployment: yes, the calculated number is very much lower. But... the labor force participation rate (the denominator used to make the percent) is down nearly 5 percentage points since 2000. And much of the jobs (here) are hamburger flippers and banksters. Not that we need more of either.

As a Keynesian, Ben cannot avoid the fact of demand driven growth. There isn't, and never has been, supply driven growth. Just look at the petro sector.