From the monthly archives:

July 2009

The voyeur chef

July 31, 2009

The NYTimes Magazine has an article about cooking or, more accurately, how that act has is vanishing from American homes. It addresses the causes of that transformation, from pragmatic time constraints and demographic shifts to the technological (this excerpt stuck strongly in my mind): “Here’s an analogy,” Balzer said. “A hundred years ago, chicken for […]

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The 100 users of Twitter

July 31, 2009

An interesting visualization of Twitter as 100 people is a good take on a popular infographic meme, but reveals a few inconvenient truths about these sorts of images. Firstly, although I am (not so) secretly pleased to see this illustration of Twitter's non-inclusive communicative nature let's not forget that Twitter, like so many other social […]

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VaR at risk

July 31, 2009

In a piece called "The Risk Mirage," BusinessWeek assails its peers for falling for VaR-based evaluations of Goldman's risk levels: [A] VaR-based analysis of any firm's riskiness is useless. VaR lies. Big time. As a predictor of risk, it's an impostor. It should be consigned to the dustbin. Firms should stop reporting it. Analysts and […]

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Automotive journalism at its worst

July 29, 2009

This article on the newly-announced Ferrari 458 is so incredibly bad - in content and in tone - that I am forced to conclude that Ferrari paid the author for the publicity. Moreover, what's it doing on a technology site? The complete sum of knowledge regarding this vehicle is four photographs and a vague press […]

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The pundit's credo

July 28, 2009

A new study shows that humans would rather our advisors be confident than actually correct: The research, by Don Moore of Carnegie Mellon University in Pittsburgh, Pennsylvania, shows that we prefer advice from a confident source, even to the point that we are willing to forgive a poor track record. Moore argues that in competitive situations, […]

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Photo finish: the Netflix prize

July 28, 2009

A month ago, the million dollar Netflix prize was finally won by a coalition of leading teams called Bellkor's Pragmatic Chaos, who blended their respective methods into a super-algorithm that finally crossed the 10% improvement barrier. ...or was it? The 10% mark sent the competition into a final, 30-day countdown, during which time other teams could […]

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[woefully boring title]

July 22, 2009

Love this brief observation from Andrew Gelman: Original title of article: "Estimating turnout, vote intention, and issue attitudes in subsets of the population" New title: "Who votes? How did they vote? And what were they thinking?"

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Evaluating returns to social media

July 21, 2009

A collusion by wetpaint and the Altimeter Group has resulted in a fanciful study on social media. Normally, a paper like this wouldn't be worth addressing, but the amount of attention being paid to its questionable conclusion warrants a closer look. And that conclusion is: [T]his landmark study has found that the most valuable brands in […]

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Why the administration may be missing its chance

July 18, 2009

From the LA Times, a remarkable transformation is taking place: And as hard-liners repeated their signature cries of "Death to America" and "Death to Israel," Mousavi supporters overwhelmed them with chants of "Death to Russia" and "Death to China," referring to the two U.N. Security Council members that have shielded Iran from much tougher sanctions over […]

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Recovering from false news

July 17, 2009

Via Alea, a very interesting econometric study on the impact of false news on stock prices. In September 2008, an article on United Airlines' 2002 bankruptcy resurfaced and was distributed as if it were new information. The company's stock plummeted immediately, but bounced back and by the end of the day was off only 11% […]

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Bo Obama's first 100 days

July 17, 2009

Who knew the little guy was so prolific? A very funny read in today's NYT: As we head into the second hundred days of my administration, I feel more pride and pleasure than ever at the prospect of serving the American people and finding ways to make this nation, and this planet, a better place […]

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Dilution in action

July 17, 2009

A lot of sites are reporting Bank of America's year-over-year income comparison without batting an eye: Bank of America posted income of $3.22 billion, or 33 cents a share, down from $3.41 billion, or 72 cents a share, a year earlier. The number wasn't particularly surprising (EPS slightly beat, revenue slightly missed) but couldn't anyone […]

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The black and white marble

July 16, 2009

From The Big Picture's coverage of the 40th anniversary of the Apollo 11 mission - this stunning black and white photo was taken as the astronauts made their way home. One of my favorites in the collection.

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Negative sum cider

July 16, 2009

Nemo and I have been engaged in a very enjoyable debate about zero sum games, and with all this talk of transactions I'm reminded of the following Chelm story (for those unfamiliar, this staple of Yiddish storytelling is a fictional town entirely populated by fools): Two men are transporting a horse cart of apple cider […]

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Thursday trends are extraordinary and non-recurring

July 16, 2009

Our accounting teacher used to say we paid too much attention to the income statement and not enough to the cash flow statement and balance sheet. Lies! Today's trend shows the opposite is clearly true... I confess - if you view "cash flow statement" instead of "cash flow" you get a very different result. That […]

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Stocks are a zero-sum game

July 15, 2009

I firmly hold that all financial contracts are zero-sum games. Recently, however, I have heard many arguments premised on the idea that the stock market is positive sum because economic growth creates wealth, which is reflected in universally rising stock prices. But in this scenario, you purchase $1 of stock on Day 1. On Day […]

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CDS Markets, briefly (or not so briefly)

July 15, 2009

In response to Daniel Indiviglio's call for "someone who understands the derivatives market," I posted the following comment on the Atlantic Business blog - and I reprint it here not just because it turned out a surprisingly complete thought, but because I'm a glutton for blogging laziness: The CDS market works similarly to any other […]

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Suspend your disbelief

July 13, 2009

Best plot summary ever: Elsewhere, the giant shark leaps thousands of feet from the ocean and attacks a commercial airplane, forcing it to crash into the water. The movie's trailer is here.

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"A revolution in the American fantasy"

July 13, 2009

The RWW article I just discussed included a link at the end to an excellent discussion of American egoism and hypocrisy as epitomized by the glorification of the Twitter's recent role in Iran, decrying it as "a revolution in the American fantasy." While I found it a to lean a bit on the conspiracy side, and […]

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No, Twitter does not deserve a Nobel Peace Prize!

July 13, 2009

Bubble 2.0 datapoint of the day: ReadWriteWeb is running an article with the title "Does Twitter deserve a Nobel Peace Prize? Maybe not yet, but it could someday." Fortunately, they acknowledge the idea is ridiculous for the moment and are really just responding to this outlandish post by Bush's Deputy National Security Advisor. Nonetheless, besides […]

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A response to randomness

July 12, 2009

In response to my post on the WSJ's recent randomness article, B emailed me the following (reproduced here with permission): The quoted WSJ article writes "We find false meaning in the patterns of randomness for good reason: we are animals built to do just that… Many studies illustrate how this basic aspect of human nature […]

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Deconstructing the Gaussian copula, part II

July 9, 2009

A math-free introduction to CDO pricing.

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Log differencing Top Chef

July 9, 2009

On the most recent Top Chef, one of the chefs received just half a star (out of five) for his initial dish - impressive because the dish hadn't finished cooking and wasn't even entirely served. More interesting perhaps was his response to getting half a star: "I was sure I'd get nothing... but that's 50% […]

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Asimov on perceiving the world

July 8, 2009

Via economist Dan Ariely's blog, this is what Isaac Asimov thought about perceiving the world through data. It is an implicitly Bayesian approach and brings to mind the famous Keynes quote about changing one's mind. Asimov wrote: "Don't you believe in flying saucers, they ask me? Don't you believe in telepathy? — in ancient astronauts? — […]

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Planet Earth is blue

July 8, 2009

This video is absolutely amazing. Filmed by cameras attached to the solid rocket boosters of the space shuttle Atlantis, it records the flight from liftoff to splashdown:

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Charting value (maybe) part 2 or: why you should never believe the internet

July 7, 2009

Back in May, I discussed a chart from Silicon Valley Insider which they claimed showed evidence of Microsoft's "laptop hunter" ads working by charting Microsoft and Apple popularity metrics. I found that the chart had a number of problems in its presentation, scale, and methodology and ultimately dismissed it as a poor analysis. Though there […]

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The subtleties of randomness

July 7, 2009

The WSJ has printed one of the best "fooled by randomness" pieces I've seen in quite a while, titled "The Triumph of the Random." This one uses streaks in sports as a central metaphor, with DiMaggio's 56-game hitting streak as exhibit A. It presents an immediate disclaimer: Recent academic studies have questioned whether DiMaggio’s streak […]

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Twitter, exposed

July 2, 2009

Twitter's data model is, interestingly enough, entirely user generated. Hashtags of every variety, retweets, and other methods of ascribing meta-information to tweets have developed outside any formal structural model or standard. The lone first-party implementation is that a "@" prefix links directly to a person, and even that isn't fully functional. All of my problems […]

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How did I miss this?

July 1, 2009

In a post called "So Long and Thanks for All the F-Tests", Freakonomics writes about a new book called Mostly Harmless Econometrics: An Empiricist’s Companion, which they describe as: ...the rare book that captures the feeling of how to go about trying to attack an empirical question; and it does this by working through two […]

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