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April 30, 2012

Journal of Retraction

The journal of Infection and Immunity wound up retracting six of the papers from the author, Naoki Mori of the University of the Ryukyus in Japan. And it soon became clear that Infection and Immunity was hardly the only victim of Dr. Mori's misconduct. Since then, other scientific journals have retracted two dozen of his papers, according to the watchdog blog Retraction Watch.

-- Dr. Ferric C. Fang (2010) editor in chief of the journal, professor at the University of Washington School of Medicine.

Last month, in a pair of editorials ( 1, 2 ) in Infection and Immunity, the two editors issued a plea for fundamental reforms. They also presented their concerns at the March 27 meeting of the National Academies of Sciences committee on science, technology and the law.

In October 2011, for example, the journal Nature reported that published retractions had increased tenfold over the past decade, while the number of published papers had increased by just 44 percent. In 2010 The Journal of Medical Ethics published a study finding the new raft of recent retractions was a mix of misconduct and honest scientific mistakes.

April 29, 2012


For a long time and for a lot of us, "college" was more or less a synonym for success. We had only to go. We had only to graduate. And if we did, according to parents and high-school guidance counselors and everything we heard and everything we read, we could pretty much count on a career, just about depend on a decent income and more or less expect security. A diploma wasn't a piece of paper. It was an amulet.

Yes, many of the sorts of service-industry jobs now available to people without higher education are less financially rewarding than manufacturing jobs of yore, and so college has in that sense become more imperative. And, yes, college graduates have an unemployment rate half that of people with only high school degrees.

But that figure factors in Americans who got their diplomas and first entered the job market decades ago, and it could reflect not just what was studied in college but the already established economic advantages, contacts and temperaments of the kind of people who pursue and stick with higher education.

Word of the day: Amulet.

The Imperiled Promise of College
Student loans are just a piece of the puzzle of higher education.

April 28, 2012


Rental "relatives" are available for sparsely attended wedding parties; so-called "babyloids" -- furry dolls that mimic infant sounds -- are being developed for lonely seniors; and Japanese researchers are at the forefront of efforts to build robots that resemble human babies. The younger generation includes millions of so-called "parasite singles" who still live with (and off) their parents, and perhaps hundreds of thousands of the "hikikomori"--"young adults," Eberstadt writes, "who shut themselves off almost entirely by retreating into a friendless life of video games, the Internet and manga (comics) in their parents' home."

Incredible Shrinking Country
There are "babyloids" and relatives-for-rent in an increasingly childless Japan.

Word of the day:

April 27, 2012

Not called "chocolate" because does not meet F.D.A. definition of chocolate

On another table stand a group of newcomers to the Special K family, a brand that is evidently food's answer to "Law & Order," given the number of spinoffs it has generated. Ms. Bath hands over a package of Special K "chocolatey delight" pastry crisps in a shiny white wrapper. (They are not called "chocolate" because they don't meet an F.D.A. definition of chocolate.)

¶ One box that interests Professor Nestle looks pretty mundane. It's All-Bran, circa 1984, and on the back are some words of advice from the National Cancer Institute: "A growing body of evidence says high-fiber foods are important to good health. That's why a healthy diet includes high-fiber foods like bran cereals."

¶ "The F.D.A. read this and was apoplectic," she says. Health claims for food were a no-no at the time. If a food company wanted to boast that a product could fight any particular disease, the product was all but asking to be regulated like a drug.

¶ The Food and Drug Administration pushed back, but political appointees with a deregulatory bent in the Reagan-era Department of Health and Human Services sided with Kellogg, according to Professor Nestle. Health claims soon proliferated because, as the All-Bran example proved, they had an almost steroidal impact on sales.

¶ By 1989, "40 percent of all new food products -- and nearly $4 billion in food advertising -- contained a health message of one kind or another," Professor Nestle says in her book, "Food Politics."

¶Kellogg opened the Pandora's box on health claims," she says, leaning back in her chair. "The company systematically and deliberately undermined the F.D.A. And they did it very effectively."

In recent years, Kellogg health claims have prompted government investigations on two occasions. One was in 2009, when the company boasted that Frosted Mini-Wheats could improve the attentiveness of children; the other was a year later, when Rice Krispies were promoted as a way to "support your child's immunity." In both cases, the company dropped the claim and signed a settlement order agreeing to stick with the facts in the future.

A Kellogg spokesman, Kris Charles, said in an e-mail: "Kellogg has a long history of responsibly providing information to help consumers make informed choices.

When a Sugar High Isn't Enough
In a world with less time for cereal, the Kellogg team in Battle Creek, Mich., is leaping into new snack markets -- as reflected in its pending deal for Pringles.

April 26, 2012

Tight credit keeps would-be owners renters

Real estate evidence that rising rents are driving perspective renters into the sales market. But for those who find buying a home in New York City is not an option -- whether because of bad credit, tougher lending standards or lack of a down payment -- the choices are limited and often unappealing.

Landlords and brokers say more and more young people are sharing, even if it means sacrificing a living room to add a bedroom or two. There has also been a surge of interest in the other boroughs, with many neighborhoods reporting record rents of their own.

Some tenants may be able to negotiate with their landlords, especially if they are long-term renters with good track records. But property owners have little reason to cut deals, because the vacancy rate in Manhattan is hovering around 1 percent.

And just 2,229 rental apartments are scheduled to be added to the market this year in Manhattan, a 30 percent drop from the average number over the last seven years.

The uncoupling of the national economy from New York rents is not typical, said Jonathan J. Miller, the president of the appraisal firm Miller Samuel. "When you see rents rising, it is usually reflective of a strong economy," he said. "That is not the case now."

Instead, he said, prices are being driven up by a tight credit market that forces people to stay in the rental market and limits new construction.

The City of Sky-High Rent
The average rent in Manhattan is now at an all-time high of $3,418 a month, and there is no relief in sight for renters

April 25, 2012

Billl Luby trades the VIX

focused on buying some of the inverse VIX ETPs, notably XIV and SVXY, when they saw the VIX spike. Some have preferred shorting VXX, TVIX and UVXY, based partly on availability, while others have preferred to trade VXX options, generally by buying puts or limiting risk with the likes of a bear call spread.

I had thought that my recent article Options on UVXY and SVXY Open Up New VIX ETP Trading Approaches might nudge some traders into considering strategies involving the +2x leveraged long VIX short-term futures ETF (UVXY) and perhaps utilize the -1x short VIX short-term futures ETF (SVXY) as well, but based on the volumes, these issues are still in the process of gaining a broader audience. In fact, UVXY did see record call volume of 7,300 contracts on Tuesday, but SVXY has been the laggard so far, as the graphic below illustrates.

So here is a thought: The next time the VIX has a significant spike, one of the first trades you should investigate is fading that spike by buying SVXY out-of-the-money calls. This is a simple trade and has the potential to be quite profitable. The SVXY April 90 calls, for instance, have jumped 40% from Tuesday's close.

The exciting news about options on SVXY and UVXY is that traders can now easily structure a broad variety of trades that involve defined risk and substantial upside. While VXX (and VIX) options are still the gold standard in terms of liquidity, SVXY and UVXY options also deserve some love - even if the spreads are still wider than those of VXX.

-- Bill Luby, VIX and More

April 24, 2012

Middle class at $150k ?

"Rich" is a term that gets thrown around a lot in discussions about tax policy and income data, but judging from polling data there's a wide variation in how Americans define the word.

Gallup recently released numbers showing $150,000 was the median annual income Americans would have to earn to consider themselves rich. But a closer look at the results reveals how difficult it is to define rich or middle class.

The Gallup data support the notion that the more money you make the higher the threshold considered rich. "According to the U.S. Census Bureau, the median annual household income in the United States is roughly $50,000 per year. The Gallup poll finds those below that level typically saying they would need to earn $100,000 or more in annual income to be rich. Those at or above that level typically report they would need to earn $200,000 a year to be rich, which expands to $250,000 among those well above the U.S. median income ($75,000 or more in annual household income)," writes Gallup's Jeffrey M. Jones.

-- Phil Izzo, Difficulties in Defining 'Rich': Is It $150,000 a Year ?
December 9, 2011 WSJ Real Time Economics

April 23, 2012

$VXX goes down 80 percent of time

"Everyone knows" that US residential real estate is a bad investment, with the Case Shiller Home Price Index having dropped by about 32 per cent since its 2005 peak. At the end of last week, the iPath S&P 500 Vix Short Term Futures Exchange Traded Note had lost that much in one month. Not seven years. One month. Over the previous six months, the vehicle had lost more than 69 per cent of its value. The managers didn't do anything other than rigorously follow their charter, and their strategy has been fully disclosed, along with the trading history.

The reaction of some investors to this record is interesting: they have been doubling down. There has been a spurt of option buying on the ProShares Ultra Vix Short Term Futures Fund, which aims for twice the daily return for the Short Term Vix Futures Index.

Vix futures or options, you are not actually buying "volatility". Those products are based on the prices of forward start variance swaps. If you don't know what that means, don't buy Vix products.

-- john.dizard@ft.com

The hedging activities generated by the Vix family may have had some effects on the S&P 500 Index. Howard Simons, of Chicago-area-based Arbor Research & Trading, says that on big down days the hedging requirements of those selling volatility products such as the Vix futures "requires more selling (in the S&P 500) in a cycle, reminiscent of the portfolio insurance made infamous in the 1987 crash". But if the market makers' hedging can exacerbate a sharp daily decline, it also leads to much more rapid recoveries in following days, as the price of implied volatility jumps. Over longer periods of time, Mr Simons, an acid Vix sceptic, believes that "the tail [the Vix] has wagged the dog [the S&P 500] and has compressed what used to be normal higher levels of volatility into a mix of a few bad days and a large number of quiet days".

April 22, 2012

Top ten shows by party affiliation

The top-ten Republican-tilted shows are "The Office," "Rules of Engagement," "The Mentalist," "New Yankee Workshop," "The Big Bang Theory," "Castle," "Desperate Housewives," "Dancing With The Stars," "The Biggest Loser," and "Grey's Anatomy."

The top ten most Democratic-leaning shows are "Washington Week," "Tavis Smiley," "Late Show with David Letterman," "The View," "PBS NewsHour," "NOW" on PBS, "House of Payne," "ABC World News Now," "60 Minutes" and "Insider Weekend."

These patterns are demonstrated in a fascinating paper, "Separation by Television Program: Understanding the Targeting of Political Advertising in Presidential Elections," by Travis N. Ridout, Michael Franz, Kenneth M. Goldstein and Feltus, which was published earlier this year in the journal Political Communication.

-- Thomas B. Edsall, a professor of journalism at Columbia University, author of "The Age of Austerity: How Scarcity Will Remake American Politics".


April 21, 2012

Essence of unfogged

Possibly over the weekend I will write something long about Jonathan Haidt and (a) how his now six-axis system of morality is still missing something (something like honesty, integrity, or intellectual coherence) (b) how he's irritating the crap out of me (c) why conservatives generally are bad people along this missing axis (and how this explains Republican hostility to science); and (d) why this explains Graeber's hissy-fit, and arguments about 'tone' generally.

Posted by: LizardBreath | 04- 5-12 9:17 AM

I do understand that accusations of unprofessionalism are about as far as a person can go in a word fight. It's like saying that someone is unserious.

April 20, 2012

Export lead economic growth for the US ?

Two years ago, President Obama promised to double exports over the next five years. The U.S. might actually meet that target. As Tyler Cowen reports in a fantastic article in The American Interest called "What Export-Oriented America Means," American exports are surging.

Cowen argues that America's economic export strength will only build in the years ahead. He points to three trends that will boost the nation's economic performance. First, smart machines. China and other low-wage countries have a huge advantage when factory floors are crowded with workers. But we are moving to an age of quiet factories, with more robots and better software. That reduces the importance of wage rates. It boosts American companies that make software and smart machines.

April 19, 2012

Cybercrime: overcounted, and as tradegy of the commons

Most cybercrime estimates are based on surveys of consumers and companies. They borrow credibility from election polls, which we have learned to trust. However, when extrapolating from a surveyed group to the overall population, there is an enormous difference between preference questions (which are used in election polls) and numerical questions (as in cybercrime surveys).

For one thing, in numeric surveys, errors are almost always upward: since the amounts of estimated losses must be positive, there's no limit on the upside, but zero is a hard limit on the downside. As a consequence, respondent errors -- or outright lies -- cannot be canceled out. Even worse, errors get amplified when researchers scale between the survey group and the overall population.

Suppose we asked 5,000 people to report their cybercrime losses, which we will then extrapolate over a population of 200 million. Every dollar claimed gets multiplied by 40,000. A single individual who falsely claims $25,000 in losses adds a spurious $1 billion to the estimate. And since no one can claim negative losses, the error can't be canceled.

THE cybercrime surveys we have examined exhibit exactly this pattern of enormous, unverified outliers dominating the data. In some, 90 percent of the estimate appears to come from the answers of one or two individuals. In a 2006 survey of identity theft by the Federal Trade Commission, two respondents gave answers that would have added $37 billion to the estimate, dwarfing that of all other respondents combined.

This is not simply a failure to achieve perfection or a matter of a few percentage points; it is the rule, rather than the exception. Among dozens of surveys, from security vendors, industry analysts and government agencies, we have not found one that appears free of this upward bias. As a result, we have very little idea of the size of cybercrime losses.

-- Dinei Florêncio is a researcher and Cormac Herley, Microsoft Research.

We have examined cybercrime from an economics standpoint and found a story at odds with the conventional wisdom. A few criminals do well, but cybercrime is a relentless, low-profit struggle for the majority. Spamming, stealing passwords or pillaging bank accounts might appear a perfect business. Cybercriminals can be thousands of miles from the scene of the crime, they can download everything they need online, and there's little training or capital outlay required. Almost anyone can do it.

Well, not really. Structurally, the economics of cybercrimes like spam and password-stealing are the same as those of fishing. Economics long ago established that common-access resources make for bad business opportunities. No matter how large the original opportunity, new entrants continue to arrive, driving the average return ever downward. Just as unregulated fish stocks are driven to exhaustion, there is never enough "easy money" to go around.

A cybercrime where profits are slim and competition is ruthless also offers simple explanations of facts that are otherwise puzzling. Credentials and stolen credit-card numbers are offered for sale at pennies on the dollar for the simple reason that they are hard to monetize. Cybercrime billionaires are hard to locate because there aren't any. Few people know anyone who has lost substantial money because victims are far rarer than the exaggerated estimates would imply.

Of course, this is not a zero-sum game: the difficulty of getting rich for bad guys doesn't imply that the consequences are small for good guys. Profit estimates may be enormously exaggerated, but it would be a mistake not to consider cybercrime a serious problem.

Those who've had their computers infected with malware or had their e-mail passwords stolen know that cleaning up the mess dwarfs any benefit received by hackers. Many measures that tax the overall population, from baroque password policies to pop-up warnings to "prove you are human" tests, wouldn't be necessary if cybercriminals weren't constantly abusing the system.

April 18, 2012

buying green once entailed a sacrifice

Avoid evoking past stereotypes of green products with references to "the planets, the babies and the daisies," said Jacquelyn A. Ottman, a New York-based advertising consultant and the author of the 2011 book "The New Rules of Green Marketing" (Berrett-Koehler).

Many such products, she said, carry perceptions that they are more expensive or don't perform as well and may not even be that green. Ms. Ottman therefore cautions against pigeonholing consumer goods as merely virtuous. "Green is the icing on the cake," she says. "It's a source of added value, but it can't replace the benefits that consumers expect from the products that they buy."

She recalled how an early efficiency pioneer, Whirlpool's Energy Wise refrigerator, "died on the vine" in 1994 after consumers balked at the higher price and a lack of choice in features and styles, which created the impression that buying one entailed a sacrifice.

By contrast, the company's sharply styled and highly efficient Duet front-load washer, introduced in 2001, won far broader acceptance after reviews flowed in that the machine allowed a large capacity, washed more thoroughly than a top-loader and was gentler on clothes.

Because it may take a while for upfront costs of a green appliance to be recouped through increased energy efficiency, many consumers are unwilling to pay a "green premium." In the aggregate, though, the energy savings for the community and the nation can add up quickly, creating a strong incentive for local governments, utilities and environmental organizations to promote their use.

Among the latter is the nonprofit Northwest Energy Efficiency Alliance, supported by utilities serving about 12 million consumers in Washington, Oregon, Idaho and Montana. It says that a regionwide shift to high-efficiency televisions could yield enough energy savings to power more than 290,000 homes each year.

With that in mind, the alliance started its Energy Forward initiative, the source of the little orange label, in late 2008. One strategy involved approaching Sears, Costco, Best Buy and other retailers that collectively sell 80 percent of the region's televisions and offering them a financial incentive of $5 to $15 per set to stock more efficient models.

The initiative took a different tack with consumers. "Messaging about 'Save the Earth' was really overused and it was alienating to some people," says Stephanie Fleming, senior manager of the alliance's residential sector. "We knew that energy efficiency would be a tougher sell for a purchase that was more emotional and something that represented fun."

Business Day
Subtly Selling 'Green' to the Flat-Screen Crowd
Published: April 10, 2012
Energy Forward, a label for appliances that meet Energy Star's top standards, seeks to appeal to consumers' inner tech fan.

April 17, 2012

$250k is not rich in NYC

Within President Barack Obama's budget released Monday are proposals to end the 2001 and 2003 tax cuts and limit itemized deductions for households making more than $250,000 a year and individuals making more than $200,000 a year.

Obama has spoken about having the rich pay their fair share, and $250,000 is a lot of money. But to characterize those households that earn that sum as "rich" or middle class depends very much on where they live. Thanks to regional differences on costs, $250,000 does not go so far in places like New York City and Honolulu, compared with cities in Texas or Tennessee.New York

The Council for Community and Economic Research calculates cost of living indexes for U.S. cities based on goods and services bought by households in the top-income quintile, which nationally covers incomes of about $100,000 and above according to U.S. Census data.

What the data show is that the cost of living in Manhattan is 118% higher than the national average. On the other hand, a household in towns like Harlingen, Texas, or Memphis, Tenn., has a cost of living 15% less than the U.S. average.

What the differences do mean is a household earning $250,000 is not nearly as "rich" or has nearly the buying power as a Memphis household bringing home, say, $150,000 a year.

(The C2ER survey doesn't include private school tuition, which recently made headlines in New York by breaking the $40,000 a year ceiling. It also doesn't take into account local taxes, which can be an extremely heavy burden.)

More on middle class.

-- WSJ / Kathleen Madigan

April 16, 2012

Employment churn and job quitting a sign of macroeconomic strength

A measure of economic confidence -- people don't tend to quit their jobs in tough labor markets because they're worried they won't be able to find a new one. During the downturn, monthly quits plunged to a record low of 1.6 million in September 2009, down from more than three million per month before the recession began. The fact that they're rising again suggests that workers may finally be seeing signs that the job market is improving.

Quits matter for another reason, too: They're a component of "churn," the regular comings and goings that are a critical element of any healthy job market. When people leave jobs in search of higher pay and new opportunities, they open up opportunities for others. When they stop quitting, those opportunities dry up.

"For workers who are unemployed, if there's less churning of jobs, it's harder to get on the merry-go-round," University of Chicago economist Steven Davis said in a Wall Street Journal article in February.

Churn is a big deal. A new paper, Hiring, Churn and the Business Cycle by Edward Lazear of Stanford and James Spletzer of the Bureau of Labor Statistics finds that during the recent recession, 80% of the drop in hiring was due to low levels of churn, rather than reduced job creation. The authors estimate reduced churn shaved two-fifths of a percentage point off GDP for the duration of the recession.

WSJ: Ben Casselman, Good Jobs News: More People Are Quitting.

Churn, defined as replacing departing workers with new ones as workers move to more productive uses, is an important feature of labor dynamics. The majority of hiring and separation reflects churn rather than hiring for expansion or separation for contraction. Using the JOLTS data, we show that churn decreased significantly during the most recent recession with almost four-fifths of the decline in hiring reflecting decreases in churn. Reductions in churn have costs because they reflect a reduction in labor movement to higher valued uses. We estimate the cost of reduced churn to be $208 billion. On an annual basis, this amounts to about .4% of GDP for a period of 3 1/2 years.

April 15, 2012

Fourth tier of medicine pricing links patient advocates, pharmaceutical managers, and health insurers

Insurers typically encourage patients to use less expensive drugs by classifying products into tiers with successively higher co-payments, like $10, $30 and $50. Generic drugs are usually in the lowest tier, preferred brand-name drugs in the second tier and other brand-name drugs in the third.

But some insurers are now putting specialty drugs into a fourth tier of their own with extra high co-payments, or even co-insurance, in which the patient pays a percentage of the drug cost.

Patient advocates say that for some diseases, like multiple sclerosis, none of the drugs are inexpensive, making it impossible to avoid the high out-of-pocket costs unless people stop taking their medicine and endanger their health.

That discriminates against people with certain diseases, they say, and contravenes the whole idea of insurance, which is to help people pay for costly medical problems.

Mark Merritt, president of the Pharmaceutical Care Management Association, which represents pharmacy benefit managers, said the real problem was the price of the drugs. The legislation, he said, was an effort by the pharmaceutical industry to "turn a pricing problem into a coverage issue."

Sharon Treat, executive director of the National Legislative Association on Prescription Drug Prices, an organization of state lawmakers, said that was a drawback of the bills. Insulating patients from the cost of their drugs, she said, "gives the drug companies a free ride to charge as much as they want."

States Seek Curb On Patient Bills For Costly Drugs
Published: April 12, 2012
So-called specialty drugs for diseases like rheumatoid arthritis have a narrow use and high costs, leaving the most vulnerable patients with huge bills.

April 14, 2012

The purpose of Google

Is Google still a search company ?

A former Googler, James Whittaker, now working for Microsoft, wrote on a Microsoft blog: "The old Google made a fortune on ads because they had good content. It was like TV used to be: make the best show and you get the most ad revenue from commercials. The new Google seems more focused on the commercials themselves."

Google's motto, famously, is "Don't Be Evil." An ambitious goal, or at least a cheeky assertion -- and one that is called into question by commentators each time there is another privacy flap. But Mr. Page, who marked his year as chief executive this month, seemed to up the stakes last week when he wrote in a letter to the Google community that "we have always wanted Google to be a company that is deserving of great love."

To earn that love, at least from investors, Mr. Page will have to surmount several challenges over his second year. Foremost among them is doing a better job of anticipating privacy issues for users while continuing to improve the experience for advertisers.

Google Announces Two-for-One Stock Split

Published: April 12, 2012
The search giant also reported first-quarter revenue that rose 24 percent and earnings that slightly beat analysts' expectations.

April 13, 2012

Ray Hudson, the Murray Walker of Football (soccer)

Watchers of the bilingual soccer channel GolTV are treated weekly to the cockeyed enthusiasm of the British commentator Ray Hudson. A blog, Hudsonia, was inspired by his ability to "coin phrases that defy both logic and belief" and by his unending quest to "invent a new language in English."

In Hudson's words, Hernandez has "chameleon eyes" and is as "slippery as an eel covered in Vaseline" and plays with the predatory appetite of a "zombie hunter looking for a Twinkie." Somehow, out of incomprehension comes clarity. Even poetry.

Robert Lalasz, the editor of the Web site Must Read Soccer, has assembled Hudson's verbal improvisations into verse, the way others previously did for the Yankees broadcaster Phil Rizzuto. One of the poems, "He Doesn't Live There," opened this article.

Here is another:

"Neither With Net nor Trident"

The genius, the genius of
In our modern-day life
He doesn't know
What he's going to do
So how the hell
Do the defenders
You cannot contain him
With a net
Or a trident
He's got pace
He's got power
He's got vision
And he's got
Finishing power
His cup
Runneth over ...
Magnificent Messi
Wild man
He doth bestride the Earth
Like a Colossus

April 12, 2012

Black Scholes formula in FX context

Derive the Black Scholes formula in FX context in a very simple way using measure change techniques. Of course, the final result can be used for all asset classes, though the derivation itself relies heavily on the symmetries prevailing in FX.

The idea goes back to a quantitative finance presentation held by Iain J. Clark where he did the derivation on just one slide. Here we repeat the derivation trying to fill in some technical details.

Black Scholes on One Slide
Peter Caspers

Number of Pages in PDF File: 2

Keywords: Black Scholes, FX option, Girsanov Theorem

JEL Classifications: C00

April 11, 2012

Search by voice

Nuance, meanwhile, has similarly ambitious plans for its health care business. In collaboration with I.B.M., the company is developing analytics to scour the medical notes that doctors dictate after they see patients. The idea is to search the text for common red flags -- like medicines that interact dangerously -- and automatically alert doctors, hopefully reducing problems and health care costs.

US Airways introduced Wally last summer, as part of a relocation of its offshore customer service call-in operations back to the United States. Nuance designed the system to anticipate callers' requests. Wally, for example, can automatically tell frequent-flier members their seat assignments or report whether they have received upgrades. It also converts people's speech to text, so that, should customers ask to speak a live operator, they don't have to repeat their original requests.

the lack of disclosure bothers Sherry Turkle, a professor of the social studies of science and technology at the Massachusetts Institute of Technology. As voice-enabled systems become more sophisticated, she says, they create the illusion that we are interacting with other people, rather than with machines. In the long term, she says, the systems' sleekness and ease of use could end up diminishing the value of slower, messier, real human connections. Reminding users that they are talking to a machine can make them more conscious of the superficiality of the exchange.

"We need to make a cultural decision," Professor Turkle says. "Either we want to alert people when they are talking to a machine, or we don't."

Soon, Mr. Sejnoha predicts, many other devices, not just televisions, will be taking voiced commands, and talking back. In Germany, people can already ask a Nuance-powered coffee maker -- marketed as "the first fully automatic machine that obeys" speech -- to make cappuccino. The machine, called the Jura Impressa Z7 One Touch Voice, speaks both English and German.

See also: Goldman, backing Nuance, smashed Dragon.

Now the race is on to make the voice the sought-after new interface between us and our technology. The results could rival innovations like the computer mouse and the graphic icon and, some experts say, eventually pose challenges for giants like Google by bypassing their traditional search engines.

No player is bigger in voice technology than Nuance, of Burlington, Mass., an industry pioneer that has acquired more than 40 companies in the field and today employs 7,300 people. It is one of the companies that helped make a big technological leap from programs that take dictation to systems that actually extract meaning from words and respond to them.

The Human Voice, as Game Changer
Published: March 31, 2012
Nuance Communications, the leading company in voice technology, is expanding its efforts to make more kinds of machines responsive to our spoken commands.

April 10, 2012

Risk Reward numeraire, R

The higher the risk/reward ratio you have on your trades, the fewer times you have to be right, and still make money. The total amount you are willing to risk per trade is expressed as 1R. If you only take trades that have a 1:3 risk/reward ratio, and you are correct just 50% of the time, you will have a 10R profit on ten trades.

Understanding how to use risk/return and position sizing allows you to make sure you are never over extended on a trade and allows you to always return to fight another day.


April 9, 2012

The optimality of the national health insurance 'must purchase' mandate

The health care mandate was defended as a kind of technocratic marvel -- the only policy capable of preventing the complex machinery of reform from leaking smoke and spitting lug nuts.

But the mandate is actually a more political sort of marvel. In the negotiations over health care reform, it protected the Democratic bill on two fronts at once: buying off some of the most influential interest groups even as it hid the true cost of universal coverage.

The mandate offered the interest groups what all entrenched industries desire: a fresh and captive market for their products. For the insurance companies, it promised enough new business to offset the cost of covering Americans with pre-existing conditions. For the health care sector as a whole, it guaranteed that disposable income currently being spent on other goods and services would be spent on its instead.

This explains why the health care bill was ultimately backed by so many industry lobbying groups, from the Pharmaceutical Research and Manufacturers of America to the American Medical Association. It explains why the big insurers, while opposing the final legislation, never attacked it as vigorously as they did Bill Clinton's ill-fated reform effort.

At the same time, by requiring the private purchase of insurance, the mandate kept the true cost of the health care expansion off the government's books, and largely out of the Congressional debate. As the Cato Institute's Michael Cannon has noted, during the Clinton era the Congressional Budget Office scored an individual mandate as a form of government spending, which pushed the official cost of the Clinton bill into the trillions. But the Obama White House was savvier in its mandate design, and the C.B.O. was more compliant in its scoring. As a result, a bill that might require over $2 trillion in new health care spending -- private as well as public -- over its first decade was sold with a $900 billion price tag.

So the mandate was politically brilliant, in a sense.

April 8, 2012

Quantum Theory of Mitt Romney

The basic concepts behind this model are:

Complementarity. In much the same way that light is both a particle and a wave, Mitt Romney is both a moderate and a conservative, depending on the situation (Fig. 1). It is not that he is one or the other; it is not that he is one and then the other. He is both at the same time.

Probability. Mitt Romney's political viewpoints can be expressed only in terms of likelihood, not certainty. While some views are obviously far less likely than others, no view can be thought of as absolutely impossible. Thus, for instance, there is at any given moment a nonzero chance that Mitt Romney supports child slavery.

Uncertainty. Frustrating as it may be, the rules of quantum campaigning dictate that no human being can ever simultaneously know both what Mitt Romney's current position is and where that position will be at some future date. This is known as the "principle uncertainty principle."

Entanglement. It doesn't matter whether it's a proton, neutron or Mormon: the act of observing cannot be separated from the outcome of the observation. By asking Mitt Romney how he feels about an issue, you unavoidably affect how he feels about it. More precisely, Mitt Romney will feel every possible way about an issue until the moment he is asked about it, at which point the many feelings decohere into the single answer most likely to please the asker.

Noncausality. The Romney campaign often violates, and even reverses, the law of cause and effect. For example, ordinarily the cause of getting the most votes leads to the effect of being considered the most electable candidate. But in the case of Mitt Romney, the cause of being considered the most electable candidate actually produces the effect of getting the most votes.

Duality. Many conservatives believe the existence of Mitt Romney allows for the possibility of the spontaneous creation of an "anti-Romney" (Fig. 2) that leaps into existence and annihilates Mitt Romney. (However, the science behind this is somewhat suspect, as it is financed by Rick Santorum, for whom science itself is suspect.)

What does all this bode for the general election? By this point it won't surprise you to learn the answer is, "We don't know." Because according to the latest theories, the "Mitt Romney" who seems poised to be the Republican nominee is but one of countless Mitt Romneys, each occupying his own cosmos, each supporting a different platform, each being compared to a different beloved children's toy but all of them equally real, all of them equally valid and all of them running for president at the same time, in their own alternative Romnealities, somewhere in the vast Romniverse.

And all of them losing to Barack Obama.

David Javerbaum is the author of "The Last Testament: A Memoir by God."

A Quantum Theory of Mitt Romney
Published: March 31, 2012
We have entered the age of quantum politics; and Mitt Romney is the first quantum politician.

April 7, 2012

Kye ( Gye ), social credit of Korean America

Lending Support to Kyes : Immigrants' Credit Associations Need to Be Encouraged--for Everyone's Financial Health
October 24, 1993. Ivan Light, a professor of sociology at UCLA, is the co-author of "Immigrant Entrepreneurs: Koreans in Los Angeles, 1965-1982." (Los Angeles: University of California, 1988).

When Jung-Hie Park sought to collect $50,000 owed to his kye , a popular financial institution in the Korean community, he turned to California courts for adjudication. Without examining the merits of his claims, Superior Court Judge Edward M. Ross ruled in September that kyes were an "illegal lottery" whose debts could not be collected in an American court.

Although Ross' decision may be appealed, it highlights the difficulty that American law encounters when attempting to digest foreign saving and credit institutions like the kye . In the language of anthropology, the Korean kye , the Mexican tanda , the Chinese hui , and the Vietnamese ho are examples of the rotating savings and credit association, a popular financial institution of the Third World

Hanmi Bank Uses Ancient Asian Lending Practice to Help Koreans
October 05, 1988. DOUGLAS FRANTZ, Times Staff Writer

Facing an unfamiliar and sometimes unbending banking system in the United States, thousands of Korean immigrants rely on an ancient Asian lending practice known as a kye to finance their prospering small businesses in Los Angeles and other cities.

In a kye , a group of a dozen or more friends or associates get together monthly and each contributes the same amount, usually ranging from $100 to $50,000, to a common pot. Each month, a different member takes the kitty and agrees to pay interest to the others. The members also promise to remain in the kye (pronounced kay) until each has collected the pot.

Koreans began to immigrate to the United States in large numbers after the Immigration Act of 1965 removed quotas based on national origin (for more information, see Asian/American Center RE-series/Koreans in New York). Like other immigrants who settled in the U.S., Koreans work in and own small businesses such as green grocers, convenience stores, and garment factories. The decision to work in these operations was due to several factors--many immigrants who were professionals and white- collar workers in Korea found their education was of little use once they arrived in the U.S. Lack of English skills made it difficult to obtain jobs comparable to those they held in Korea. With such limitations, they often worked for other Koreans in businesses where they learned about its operation and were able to save some of their earnings. Once they obtained enough capital and experience, they pursued their own business.

Koreans also chose to work in small businesses because, just as they were arriving in New York City, there was a decline in manufacturing jobs, and some service jobs like domestic work), which historically had been held by Asian Americans on the West Coast, already were filled by other ethnic groups. Also at this time, many European immigrant small business owners were retiring and selling their stores. The Koreans could provide the abundant supply of labor, moderate amounts of capital, and simple knowled

-- Kyeyoung Park, Visiting Assistant Professor of anthropology at the University of California, Los Angeles. (1991)

April 6, 2012

Top Forty radio invented by Todd Storz and Bill Stewart, of KOWH AM station in Omaha, Nebraska

Top Forty radio was invented by Todd Storz and Bill Stewart, the operator and program director, respectively, of KOWH, an AM station in Omaha, Nebraska, in the early fifties. Like most music programmers of the day, Storz and Stewart provided a little something for everyone. As Marc Fisher writes in his book "Something in the Air" (2007), "The gospel in radio in those days was that no tune ought to be repeated within twenty-four hours of its broadcast--surely listeners would resent having to hear the same song twice in one day."

The eureka moment, as Ben Fong-Torres describes it in "The Hits Just Keep on Coming" (1998), occurred in a restaurant across from the station, where Storz and Stewart would often wait for Storz's girlfriend, a waitress, to get off work. They noticed that even though the waitresses listened to the same handful of songs on the jukebox all day long, played by different customers, when the place finally cleared out and the staff had the jukebox to themselves they played the very same songs. The men asked the waitresses to identify the most popular tunes on the jukebox, and they went back to the station and started playing them, in heavy rotation. Ratings soared.

Read more at the NewYorker.

By the end of the decade, Top Forty was the most popular format in the nation. It thrived in the sixties, but began to struggle with the popularity of FM radio, and the rise of album-oriented rock, in the seventies. Rock music, with its artistic aspirations, didn't fit the nakedly commercial format as well as the bubblegum pop of the pre-rock era had. Also, mainstream pop began to splinter into "adult contemporary," "easy listening," and "urban," among other formats. Rock, meanwhile, gave birth to "classic," "modern," and, in the nineties, "alternative" formats. Top Forty never went away--Casey Kasem's syndicated radio show, "American Top Forty," kept the format going into the twenty-first century--but by the eighties it could no longer claim to be America's soundtrack.

Read more http://www.newyorker.com/reporting/2012/03/26/120326fa_fact_seabrook#ixzz1rQBwK6dO

April 5, 2012

Mortgage Professor

Dr. Guttentag will be competing with the likes of better-established organizations, like LendingTree, Zillow Mortgage Marketplace and Bankrate.com. These so-called mortgage marketplaces have become increasingly popular as a way for borrowers to research loan rates and options. LendingTree, for example, says it has facilitated over 30 million loan requests and $214 billion in closed loan transactions since its inception 15 years ago. And all of the 1,200 mortgage-related Web sites tracked by Experian Hitwise attracted 126 million visitors in February, up 26 percent from a year ago.

The larger sites offer a mix of consumer mortgage calculators and other tools, along with rate quotes or match-ups with one or more of the hundreds of participating lenders. Many are adding other features and functions to stay more competitive.

Zillow Mortgage Marketplace has been focused on mobile applications, and the early ones have seen "tremendous usage," said Erin Lantz, the director of the marketplace. Its mobile mortgage app for the iPhone, which lets borrowers check rates and loan quotes, has been downloaded more than two million times since June. In February it began offering a version for Android phones.

LendingTree, meanwhile, plans to redesign its Web site in the next three months, and added several features, including one called "The Best Loan for Life." It will evaluate homeowners' current loans against new offerings from lenders signed up with LendingTree to see if it would be worthwhile to refinance. In June, site users will be able to add their own information -- that is, rates and terms from other lenders, not just those associated with LendingTree. This will allow them to do a side-by-side analysis "and see which one is better," said Doug Lebda, the founder.At Bankrate.com, anyone who wants to talk to a mortgage banker can now access "a call center interface" and eventually connect with a person, said Bruce Zanca, a spokesman. Not all the mortgage lenders have signed on, he said.

The Mortgage Professor's service is tiny by comparison: only six mortgage companies have signed up so far. But Dr. Guttentag said he hoped to teach the bigger shopping sites a few lessons. His mortgage shopping site consists of what he calls "certified network lenders," each of which must adhere to certain standards and post prices in real time. Borrowers may shop anonymously until they select a lender, which saves them from being bombarded with information.

Online Features Expanded
Published: March 29, 2012
So-called mortgage marketplaces like LendingTree and Zillow Mortgage Marketplace have become an increasingly popular way for borrowers to research loan rates and options.

April 4, 2012

Matching algorithms

Other sites are trying to move past the algorithm. A start-up called myMatchmaker uses in-the-flesh people as intermediaries. Some, like Nerve.com, and How About We, aim to streamline the process and encourage interactions around more than a profile.

But Kevin Slavin, a game developer who studies algorithms, says those sites are already starting from a flawed base.

The digital personas we cultivate on Facebook are often not very indicative of who we are, he said. "A first date is the most tangible instance of you being the best possible version of yourself, the version you think will be the most attractive to someone else," he said. "It is impossible for that to be the same person on Facebook."

Rob Fishman, who helmed the development of Yoke.me, says he views the service as an icebreaker, not as a crystal ball capable of divining whether or not someone is your one true love. "We aren't saying you will want to spend your life together; you don't even know each other yet," he said. "You like the same band, talk amongst yourselves."

"I've found my newest nightmare," one friend said. "One match was a girl because we share a birthday," said another. "One match was a guy because we both like Gilt," a shopping site. "Is this for finding friends, dates or enemies?"

To be fair, the problem doesn't seem to be confined to Yoke.me. It may be part of online dating itself. Sites and apps like OKCupid, eHarmony, Skout, Plenty of Fish and Match.com have attracted loyal followings. But in a world where we can pay someone for lunch by tapping two phones together and stream live television over a tablet computer, the de facto model of browsing through static profiles on a Web site or in a mobile app can feel comically outdated.

It may not be a problem that software can solve on its own, said Eli Finkel, a professor of social psychology at Northwestern University. "Technology is not the way to figure out who is compatible and will never be," he said. "At the end of the day, the human algorithm -- neural tissue in our cranium called a brain -- has evolved over a long period of time to size up people efficiently. On a blind date, a person arrives and in that instant I can say I'm glad I did this or regret it."

Professor Finkel, along with several other researchers, published a study this year raising doubts about the idea that a personality test or algorithm of the kind popularized on eHarmony, can help you meet a potential mate.

Sites that say algorithms can help you find your soul mate "are probably spitting in the wind," said Harry Reis, a professor of psychology at the University of Rochester and a co-author of the algorithm paper, who has written upwards of 120 papers on online dating.

EHarmony counters that the algorithms it uses do work, citing research it conducted investigating the satisfaction of couples who met through the site, and their divorce rate.

The system that eHarmony has built is "based on years of empirical and clinical research on married couples," said Becky Teraoka, an eHarmony spokeswoman. They include "aspects of personality, values and interest, and how pairs match on them, that are most predictive of relationship satisfaction."

While Professors Finkel and Reis question the value of algorithms, they do say that online dating is useful because it can broaden the pool of people you come across on a regular basis.

"In everyday life you don't encounter people with signs on their head that say, 'I'm single and looking,' " Professor Reis said. On sites you can find "dozens of people that you might want to meet."

The trick is to weed out the weirdos and arrange a face-to-face meeting as quickly as possible -- which, in a sense, is what Yoke.me is trying to do, as are similar services like theComplete.me and Coffee Meets Bagel.

Taking a Chance on Love, and Algorithms
Published: April 7, 2012
Online dating sites defend the usefulness of their scientific approach. But a social psychology professor says that "technology is not the way to figure out who is compatible and will never be."

See also < ahref="http://www.nytimes.com/2011/11/03/business/cellphone-apps-give-speed-dating-a-new-meaning.html?scp=3&sq=grindr&st=cse">NY Tmes 2011 November 03,
Business: cellphone apps give speed dating a new meaning (Grindr, Scruff ).

April 3, 2012

Local police track cel phones, or track people via their cel phones

The practice of local police tracking cel phones has become big business for cellphone companies, too, with a handful of carriers marketing a catalog of "surveillance fees" to police departments to determine a suspect's location, trace phone calls and texts or provide other services. Some departments log dozens of traces a month for both emergencies and routine investigations.

In cities in Nevada, North Carolina and other states, police departments have gotten wireless carriers to track cellphone signals back to cell towers as part of nonemergency investigations to identify all the callers using a particular tower, records show.

In California, state prosecutors advised local police departments on ways to get carriers to "clone" a phone and download text messages while it is turned off.

In Ogden, Utah, when the Sheriff's Department wants information on a cellphone, it leaves it up to the carrier to determine what the sheriff must provide. "Some companies ask that when we have time to do so, we obtain court approval for the tracking request," the Sheriff's Department said in a written response to the A.C.L.U.

And in Arizona, even small police departments found cell surveillance so valuable that they acquired their own tracking equipment to avoid the time and expense of having the phone companies carry out the operations for them. The police in the town of Gilbert, for one, spent $244,000 on such equipment.

Cell carriers, staffed with special law enforcement liaison teams, charge police departments from a few hundred dollars for locating a phone to more than $2,200 for a full-scale wiretap of a suspect, records show.

Police Are Using Phone Tracking as a Routine Tool
Published: March 31, 2012
Law enforcement tracking of cellphones is a convenient surveillance tool in many situations, but it is unclear if using such technology without a warrant violates the Constitution.

While many departments require warrants to use phone tracking in nonemergencies, others claim broad discretion to get the records on their own, according to 5,500 pages of internal records obtained by the American Civil Liberties Union from 205 police departments nationwide.

The internal documents, which were provided to The New York Times, open a window into a cloak-and-dagger practice that police officials are wary about discussing publicly.

While cell tracking by local police departments has received some limited public attention in the last few years, the A.C.L.U. documents show that the practice is in much wider use -- with far looser safeguards -- than officials have previously acknowledged.

The issue has taken on new legal urgency in light of a Supreme Court ruling in January finding that a Global Positioning System tracking device placed on a drug suspect's car violated his Fourth Amendment rights against unreasonable searches. While the ruling did not directly involve cellphones -- many of which also include GPS locators -- it raised questions about the standards for cellphone tracking, lawyers say.

The police records show many departments struggling to understand and abide by the legal complexities of cellphone tracking, even as they work to exploit the technology.

April 2, 2012

Google and Facebook, the new gatekeepers

Companies that make use of these algorithms must take this curative responsibility far more seriously than they have to date. They need to give us control over what we see -- making it clear when they are personalizing, and allowing us to shape and adjust our own filters. We citizens need to uphold our end, too -- developing the "filter literacy" needed to use these tools well and demanding content that broadens our horizons even when it's uncomfortable.

Then came the Internet, which made it possible to communicate with millions of people at little or no cost. Suddenly anyone with an Internet connection could share ideas with the whole world. A new era of democratized news media dawned.

You may have heard that story before -- maybe from the conservative blogger Glenn Reynolds (blogging is "technology undermining the gatekeepers") or the progressive blogger Markos Moulitsas (his book is called "Crashing the Gate"). It's a beautiful story about the revolutionary power of the medium, and as an early practitioner of online politics, I told it to describe what we did at MoveOn.org. But I'm increasingly convinced that we've got the ending wrong -- perhaps dangerously wrong. There is a new group of gatekeepers in town, and this time, they're not people, they're code.

Today's Internet giants -- Google, Facebook, Yahoo and Microsoft -- see the remarkable rise of available information as an opportunity. If they can provide services that sift though the data and supply us with the most personally relevant and appealing results, they'll get the most users and the most ad views. As a result, they're racing to offer personalized filters that show us the Internet that they think we want to see. These filters, in effect, control and limit the information that reaches our screens.

Like the old gatekeepers, the engineers who write the new gatekeeping code have enormous power to determine what we know about the world. But unlike the best of the old gatekeepers, they don't see themselves as keepers of the public trust. There is no algorithmic equivalent to journalistic ethics.

Mark Zuckerberg, Facebook's chief executive, once told colleagues that "a squirrel dying in your front yard may be more relevant to your interests right now than people dying in Africa." At Facebook, "relevance" is virtually the sole criterion that determines what users see. Focusing on the most personally relevant news -- the squirrel -- is a great business strategy. But it leaves us staring at our front yard instead of reading about suffering, genocide and revolution.

When the Internet Thinks It Knows You
Published: May 22, 2011
Personalized information filters pose a threat to democracy.

April 1, 2012

Pro business or pro-economy ?

"We need the Ex-Im Bank, period."

Like so much else in Congress these days, it is not that simple.

With its charter set to expire in May, the bank is the target of conservative groups. They are making the case to Republicans that the bank, created in 1934 to finance sales to the Soviet Union, has no place in a free-market system. Club for Growth is holding it up as the next Fannie Mae or Freddie Mac, crowding out private lending and offering dangerous loans that ultimately could be left in the laps of the taxpayer.

"Those groups are just wrong, period," said Jay Timmons, president of the National Association of Manufacturers and a generous personal contributor to Republican candidates.

Even though money for major road and bridge projects is set to run out this weekend, House Republican leaders have struggled all week to round up the votes from recalcitrant conservatives simply to extend it for 90 or even 60 days. A longer-term transportation bill that contractors and the chamber say is vital to the recovery of the construction industry appears hopelessly stalled over costs.

At the same time, House conservatives are pressing to allow the U.S. Export-Import Bank, which has financed exports since the Depression, to run out of lending authority within weeks. The bank faces the possibility of shutting its doors completely by the end of May, when its legal authorization expires.

And a host of routine business tax breaks -- from wind energy subsidies to research and development tax credits -- cannot be passed because of Republican insistence that they be paid for with spending cuts.

Business groups that worked hard to install a Republican majority in the House equated Republican control with a business-friendly environment. But the majority is first and foremost a conservative political force, and on key issues, its ideology is not always aligned with commercial interests that helped finance election victories.

"Free market is not always the same as pro-business," said Barney Keller, spokesman for the conservative political action committee Club for Growth.