Friday, March 30, 2012

Song of the Week(end)

Well, I wanted to hold off on this one until Opening Day, but it seems like MLB wants to ruin Opening Day by having 3 or 4 Opening Days every year. So while my Red Sox don't start things until next Thursday, the Mariners and A's have already "officially" started the MLB season over in Japan, which I guess is a good thing.

Regardless of MLB's antics, I love the start of baseball season, and I welcome it as usual with John Fogerty's "Centerfield". Go Sox, and Happy Weekend, people.

Mega Millions: should you take the lump sum or the annuity?

If you're thinking of playing Mega Millions for the massive jackpot this weekend (don't bother, by the way, I've already got this thing locked up), there are some important things you should think about first. Yes, "what should I name my boat?" is a very important question, but before you get there you should probably figure out whether to take the lump sum or the annuity. I'm glad you asked. Here are my tips. If you're lazy or hate math, here's the Cliff Notes: take the lump sum.

According to the Mega Millions website, the currently-advertised jackpot of $540 million will result in a lump-sum payment of $389 million. That's cash in hand, today. Or, you can spread that $540 million out over 26 years, pulling in about $20.77 million per year from now until 2037. In essence, by taking the annuity, you're lending your money to the lottery administrators for 25 years.

So what kind of interest rate are you getting for being such a generous lender? Without boring you too much with the math, when I compared the lump sum to the annuity, it came out to an implied interest rate of about 2.84%. With U.S. Treasuries for a similar term (we'll look at the 30-year bond) currently yielding around 3.25%, this seems like a pretty bad deal for the lottery winner (though a very good deal for the lottery administrators).


The other thing to take into consideration is taxes. By any historical standard, tax rates (especially on large amounts of income) are at staggeringly low levels. With government deficits and debt reaching nightmarish proportions, it's pretty much a given that this rate will rise (possibly significantly) at some point over the next 25 years. Therefore, it's to your benefit to generate all of the income (and pay all of the taxes) today, rather than waiting and paying some of those taxes in the future when rates are likely to be higher.

When I ran through the numbers, I found that if tax rates were to remain at 35% for the first 10 years of your annuity payments, and then rise relatively modestly to 45% for the remainder of the 25 years, the implied interest rate on your generous lending would drop to about 2.02%, an incredibly paltry return. If those tax rates increased to 55% in Year 10, your implied interest rate would drop all the way down to 1.08%.

When you consider interest and taxes, it becomes clear that it's not really in anyone's best interest to lend out long-term money right now (hey, maybe that's why nobody can get a mortgage these days...), least of all to the government, who might want to take a bigger bite in future years. So take the lump sum, and try your best not to blow all your many millions in one place. I will try my best to take my own advice when I win this thing later tonight.

Thursday, March 29, 2012

Clip of the Week

Ohhhh, decisions, decisions... we've got all sorts of options for Clip of the Week this week, just the way I always like it.

In the world of sports, we've got this awesome dunk from the NCAA tourney, this amazing goal from the English Premier League, and this ridiculous full-court shot by Marcus Camby (which of course didn't count, much like this play and this play).

You also know how much I love animal videos, and this week I came across this video of the "mimic octopus" (quite possibly the world's coolest creature), this video of a cat getting loose at a basketball game, and this awesome trailer/ad for the Boston Bruins, featuring their bear mascot (who is awesome, and featured in my favorite ad of all time).

Also, this can't really be categorized, but this video cracked me up (really, Dad, you're not gonna help the kid out, just gonna focus on filming and wait for him to face plant? Good call...).

But ultimately, I had to give this week's honor to Batman, because his back story was too good to pass up. So for this week's clip, I give you Batman, just chilling in his Lambo on a Maryland highway.

Legislative Tourette's in NYC

A few weeks back, I introduced the concept of "legislative Tourette's" with respect to Los Angeles, which decided to make throwing footballs or frisbees on city beaches (or digging holes deeper than 18 inches) a fine-able offense. I took that as a ridiculous example of a local government overstepping its bounds and meddling where it really doesn't need to meddle.

But there's always more examples of that sort of thing, and New York City came along and made me shake my head once again. From the New York Post (yeah, yeah, I know, consider the source, but CNN was on this one too...):
In a bizarre case of political correctness run wild, educrats have banned references to “dinosaurs,” “birthdays,” “Halloween” and dozens of other topics on city-issued tests. 
That’s because they fear such topics “could evoke unpleasant emotions in the students.” 
Dinosaurs, for example, call to mind evolution, which might upset fundamentalists; birthdays aren’t celebrated by Jehovah’s Witnesses; and Halloween suggests paganism. 
Even “dancing’’ is taboo, because some sects object. But the city did make an exception for ballet... 
Words that suggest wealth are excluded because they could make kids jealous. Poverty is likewise on the forbidden list. 
Also banned are references to divorces and diseases, because kids taking the tests may have relatives who split from spouses or are ill... 
“This is standard language that has been used by test publishers for many years and allows our students to complete practice exams without distraction,” said a Department of Education spokeswoman, insisting it’s not censorship... 
The city asks test companies to exclude “creatures from outer space,” celebrities and excessive TV and video-game use — items that are OK elsewhere. 
Homes with swimming pools and computers are also unmentionables here — because of economic sensitivities — while computers in the school or in libraries are acceptable. 
City officials also specified that test makers shouldn’t include items that are potentially “disrespectful to authority or authority figures,” or give human characteristics to animals or inanimate objects.
I'm sorry, but WHAT IN THE HELL IS GOING ON HERE?? I mean really, once you've corrected for every single thing that any student could conceivably be "sensitive" to, what is left? Anything?

I had a run-in with a German Shepherd when I was a little tyke, so should dogs be off-limits on my tests? I also once fell off my bicycle and scraped my knee, and also this one time when I was playing basketball with the other kids I took a shot and I missed and I still feel really bad about it. So please let's just not mention it, okay? Really, where does this all end?


Ultimately, I understand the concept that these administrators are going for, I really do. But it's pretty clear to most of us when these attempts to sanitize everything have simply gone too far. Education, if nothing else, should be designed to prepare students for the things that they are likely to encounter in life, out in "the real world".

Out there, Halloween does exist, people have birthdays (we even celebrate them with national holidays--which, if you think about it, should also be off-limits on these tests...), and you're going to encounter rich people, poor people, dancing people, dinosaur fossils, and maybe even an alien or two. Sheltering our young students from these realities serves no real purpose, and could even be counter-productive to their long-term development.

Yes, I know, this article isn't saying that students won't be taught about these sorts of things, only that they won't be tested on them--but is that really such a fundamental difference? This whole thing is an utter waste of time and resources, and our administrators need to focus their attention elsewhere--their ridiculous misplacement of priorities is a huge part of the reason that our nation's academic performance continues to flounder.

[NY Post]

Tuesday, March 27, 2012

Quote of the Week (cartoon edition)

It's been a little while since I turned my Quote of the Week over to the land of the animated, and this week seems like as good a time as any to renew the practice. If you've read me often, you'll know that the flagrant misuse of statistics (particularly for political gain) irks me like nothing else. That's why this cartoon made me chuckle. Okay, fine, laugh out loud, whatever, I'm a nerd, at least I own it.


Happy Tuesday.

Monday, March 26, 2012

Tacocopter? Yes, please

I occasionally speak to people who think that I'm too much of a critic, too much of a pessimist, a "downer", if you will. For what it's worth, I'm not really a natural pessimist, nor am I pessimistic about all things. I happen to think we live in an absolutely amazing time, where technological possibility is so incredible as to almost be overwhelming (I can communicate with somebody thousands of miles away, instantly, using only my thumbs! I can work from home, wherever I want home to be!), and the prospects for the future in some ways couldn't be brighter. I wouldn't trade being alive today for being alive in any other time--I like my technology too much.

It's just that I think that the existing economic and political paradigms that we've lived under for the past several decades are hopelessly broken in fundamental ways, and that these will need to be torn down (probably in a disorderly manner, because there's rarely any other way) in order for future generations to fully enjoy and appreciate the possibility that these technological advances afford. Furthermore, I think that such a collapse is not only necessary, but inevitable. Make sense? Alright, cool. Because this is freaking awesome.
The Internet is going wild for Tacocopter, perhaps the next great startup out of Silicon Valley, which boasts a business plan that combines four of the most prominent touchstones of modern America: tacos, helicopters, robots and laziness. 
Indeed, the concept behind Tacocopter is very simple, and very American: You order tacos on your smartphone and also beam in your GPS location information. Your order -- and your location -- are transmitted to an unmanned drone helicopter (grounded, near the kitchen where the tacos are made), and the tacocopter is then sent out with your food to find you and deliver your tacos to wherever you're standing. 
You pay online, so the tacos are simply dropped off at your feet by the drone helicopter, which then flies back to the restaurant to pick up its next order.
That... is... AWESOME. I want two chicken tacos, delivered by a robot helicopter, now. Oh, but of course, there's a catch:
Well, put down your smartphones, because here comes some bad news: The launch of Tacocopter... is being blocked by the U.S. government. 
"Current U.S. FAA regulations prevent ... using UAVs [Unmanned Aerial Vehicles, like drones] for commercial purposes at the moment," [company cofounder Star] Simpson said over Gchat. "Honestly I think it's not totally unreasonable to regulate something as potentially dangerous as having flying robots slinging tacos over people's heads ... [O]n the other hand, it's a little bit ironic that that's the case in a country where you can be killed by drone with no judicial review." 
Simpson told HuffPost that because of the FAA's regulations -- as well as other minor problems, like navigating the treacherous terrain of an urban environment, keeping the food warm, finding a city map precise enough to avoid crashes 100 percent of the time, avoiding birds, balconies and telephone wires, delivering food to people indoors, delivering food to the right person, dealing with greedy humans who would just steal the Tacocopter as soon as it got to them, etc. -- the Tacocopter website exists more as a conversation starter about the future of food delivery (and delivery in general), as well as about the commercial uses of unmanned vehicles, than an actual startup plan or business.
Boooooo, government. To be fair, this is one area where I think the government has a right to be a little wary of what's being proposed, for the reasons that the cofounders enumerated. Still, I think this idea is awesome, and I want to see what other stuff people come up with using drone/robot technology (stuff like this, for example).

As I said before, I really couldn't be more excited to see what kind of stuff the next several decades bring in terms of technological advancement--if the last two decades are any guide, I literally can't even imagine what things will look like by 2035. I just hope we're all ready to embrace the changes that technology can so rapidly bring--this is no time to be clinging to old, broken paradigms, however good they may have been to us in the past. We need to change along with our technology, and those changes won't always be so easy.

[Huffington Post]

Friday, March 23, 2012

Song of the Week(end)

Alright, yeah, so I'm not gonna get around to those two posts that I promised for today... can I make it up to you by giving you two Songs of the Week(end)? Cool, thanks.

We haven't done much rap here (except the Biggie tribute a couple of weeks ago), even though it's a significant portion of what I listen to on a daily basis. Let's change that. Your first Song of the Week(end) is from what I consider the best rap album of all time, A Tribe Called Quest's Midnight Marauders. I've always loved Tribe, and their tunes are always a great way to kick off a weekend.



Your second song is more recent, a song that I can't get out of my head this week. It's "So Good", the latest track from one of my current favorites, B.o.B. Have a good weekend, people. Happy Spring.

Thursday, March 22, 2012

Clip of the Week

I'm working on a couple of posts for tomorrow (one in which I debunk some more dubious math and another in which I engage in some dubious data wrangling myself), which I may or may not have ready for the blog in time for the weekend. For now, you can all enjoy the best clips the internet has to offer--since I missed last week's post, this week has plenty of material.

Since it's March, that means March Madness, which means we've got plenty of basketball videos. Even though the first weekend of the NCAA tourney was a little light on "did you see that?" highlights, you should still watch this dunk (from the SEC tourney) and this awesome reaction video after Norfolk State's upset win over Missouri (which is almost as awesome as the Landon Donovan reaction videos from the last World Cup, but not quite).

The NBA also decided to get into the act (yeah, I know, nobody cares) with this Rajon Rondo pass and this absurd Gerald Green dunk (your move, Blake Griffin).

Over in the world of economics and politics, we have this fantastic rant from British politician Nigel Farage about the current state of the European economy (certainly not his first great rant, but one of his best) as well as this terrific TED talk about the absurdity of "copyright math" (more to come on this topic very soon).

Other random yet awesome video clips include Kevin Spacey's amazing impressions, an incredibly well-done compilation of all the seismic activity in the world in 2011 (be sure to check the Fukushima earthquake at the 1:50 mark, which makes our little earthquake at the 4:35 mark seem agonizingly pathetic and insignificant), and a rendition of Adele's "Rollin' in the Deep", played on a traditional Chinese instrument, because why not?

But as you already know by now, none of these clips are your Clip of the Week. So without further ado, and with apologies to South Park's amazing take on the global gold cycle, I'm going to continue in my recent string of animal-related videos by presenting you with Klepto Kitty, a real-life cat burglar. My cat is nowhere near as cool as this guy. Enjoy (fast-forward to the 1:20 mark if you're too impatient to watch the whole thing).

Bad science from the New York Times

I'm always on the lookout for bad science/bad math (and the terrible journalism that it produces), and this week I came across a real gem. This one was noteworthy because it came from the New York Times, the "paper of record" that's obviously not struggling with its business model at all. In an article entitled "For 2nd Year, a Sharp Drop in Law School Entrance Tests", author David Segal writes the following:
Legal diplomas are apparently losing luster. 
The organization behind the Law School Admission Test reported that the number of tests it administered this year dropped by more than 16 percent, the largest decline in more than a decade. 
The Law School Admission Council reported that the LSAT was given 129,925 times in the 2011-12 academic year. That was well off the 155,050 of the year before and far from the peak of 171,514 in the year before that. In all, the number of test takers has fallen by nearly 25 percent in the last two years. 
The decline reflects a spreading view that the legal market in the United States is in terrible shape and will have a hard time absorbing the roughly 45,000 students who are expected to graduate from law school in each of the next three years. And the problem may be deep and systemic.
Segal goes on to write a long and sometimes-rambling article about how law school may be entering a serious long-term downward correction, as students begin to shy away from high levels of debt and uncertain long-term income prospects.

For what it's worth, I happen to agree with some of the overall conclusions that Segal draws--student loan debt is reaching frighteningly unsustainable levels, and the positive "return on investment" that so many in my generation have taken on faith is no longer quite so clear. There's only one problem--the tipping point hasn't yet arrived (though it will), and the data that Segal presents to "support" his thesis in fact does nothing of the sort. Rather, this is just one more example of a journalistic outlet massaging the data to fit its argument, rather than the other way around.

The statistical crime that Segal has committed here is in his failure to provide enough context to give his data any real meaning. His statistics regarding the LSAT provide only the last three years of data--he tells you that the 2009-10 LSAT was a "peak" for total tests administered, but tells us nothing about the overall trend that led to that "peak". Luckily for us, the generous folks at LSAC make those statistics available for the public, so we can do a little bit of fact-checking on our friend Segal.

When we look at the overall data series (dating back to 1987-88), we see a pretty different story. Yes, tests taken are at their lowest level in three years, but the number is nowhere near the trough that we saw during the economic boom years of 1995 to 2000. Generally speaking, LSATs administered spike during recessions, then recede during recoveries, a trend that makes intuitive sense. Let's look at this graphically, using some more publicly available data (for this chart, I plotted the annual change in LSATs administered against the annual percent change in the unemployment rate--hence a change from 4.0% unemployment to 5.0% unemployment represents a 25% increase in unemployment):


Viewed another way (just using gross numbers rather than % change, and plotting on dual axes):



That's a pretty obvious strong relationship (for the math nerds among you, that's an r-squared of .486 on the first chart, .666 on the second), but Segal and the Times don't bother to show you that part of the picture. They have a story to tell, and dammit they're gonna make the statistics fit that story.

This trend is troubling, because it takes advantage of the innumeracy that plagues America--most people don't know how to tell when statistics are being manipulated, so they take the authors/researchers' conclusions largely on faith. That's fine when the authors are operating in good faith and using proper statistical analysis, but in the Times' case that's clearly not what's happening. Segal has used a dramatic two-year decline in LSATs administered and pretended that it's the only thing in the data series that matters. For the purposes of his story, it's completely irrelevant to provide any sort of context for his data.

What I actually find most interesting about the data (when looked at in full) is that LSATs occasionally have a tendency to creep higher BEFORE the unemployment rate follows in kind. In other words, the number of people taking the LSAT could actually be seen as a leading economic indicator--people start taking the LSAT in anticipation of being laid off, because they see business conditions beginning to deteriorate.

Am I actually suggesting that such a thesis is reasonable, and worth writing about? No, of course not, there's not nearly enough data to support my thesis, so it's mostly just me spitballing some ideas--without statistical justification, proposing that thesis doesn't meet my journalistic standards. But then, I don't write for the Times, do I?

[NY Times]

Wednesday, March 21, 2012

Too good (and important?) not to share

Barry Ritholtz shared a classic Stephen Colbert rant about the incredibly shaky justification that the Obama administration recently used to order a drone attack on a U.S. citizen (I'm sorry, "terrorist") living abroad. It's a really well-done piece by Colbert, and it raises some pretty important questions, too.


It seems that our leaders are only too eager to leave the Constitution behind ever since 9/11. That, to me, seems incredibly short-sighted, regardless of the short-term outcomes.

Tuesday, March 20, 2012

Quote of the Week (Santa Clara joins the Wasteful Hall of Fame)

I had a few good items in mind for Quote of the Week last week, but then I never ended up getting around to writing the post. Well, that's too bad for those quotes (especially the one from Jim Grant, who I think was on fire in that CNBC interview), because this week I've got a new one, and it's a doozy.

If you follow me on Twitter, you may remember my mention of the Sacramento Kings' new arena deal, which includes a significant amount of city financing via a proposed parking garage plan. I have always thought that publicly-financed venues for private businesses represent the height of insanity--the team in question always enjoys any profits from the deal, while the city (or state) remains on the hook for any potential losses from the project (like, if people stopped going to Kings games, or if there was, you know, a work stoppage or something).

We've seen instances of privatized gains/socialized losses elsewhere in our nation, and it's pretty much never a good idea, particularly when municipal budgets are strained like never before (seriously, California, you folks out there should know better). And yet, the Sacramento deal isn't even the most insane sports arena project to be under consideration right now. In fact, it's not even the most insane project of its type in California. I give you the (recently spurned) San Francisco 49ers, with this week's Quote of the Week, regarding their proposed new stadium in Santa Clara.

This week's QUOTE OF THE WEEK

"This will be a cutting-edge, new-technology building because we're in the heart of Silicon Valley. We believe we need a significant budget to pay for things not currently on the market."
                                    - Larry MacNeil, 49ers' Chief Financial Officer

Wow. "A significant budget to pay for things not currently on the market". So, a blank check from the government to spend on things that DON'T EVEN EXIST YET. That is literally taking the circus to the next level. Congratulations, Santa Clara... you guys win. I hope, for your sake, that tax revenues bounce back in a big way and you can actually afford these imaginary luxuries that the 49ers want to charge you all large sums of money to come enjoy. Uh-oh...

Well done, California. You continue to amaze me.

Monday, March 19, 2012

A few of my favorite charts

I realize I went radio silent last week, and I apologize. Work and family concerns took a front seat for a bit, but I'm intending to get back to blogging business soon. For now, enjoy a few of my favorite charts that I've come across lately. There's a bit of a common thread here... see if you can spot it.

STUDENT LOAN DEBT OUTSTANDING
GLOBAL CENTRAL BANK ASSETS (i.e. MONEY PRINTING)
MARKET IMPACTS OF "QUANTITATIVE EASING"
APPLE STOCK (AAPL)
Remember, buy Apple. It's "cheap". And now it even pays a dividend!

Tuesday, March 13, 2012

Picture me rollin'

Last week, I came across this crazy photo gallery of rare color pictures from early-20th century Russia. The photographer, Sergei Prokudin-Gorskii, was a pioneer in color photography and these shots are staggering--the clarity and vividness of the colors makes many of the pictures look as though they could have been taken yesterday.

The whole gallery is worth a look, but I got stuck on one particular picture (#23 in the gallery) that absolutely cracked me up. This is just perfect. They see me rollin'...

Monday, March 12, 2012

Another link dump

Yeah, it's time for one of these again... lots of news-worthy articles, none of which completely justify a full post but all of which I think are important. It was either a link dump or a whole bunch of Twitter posts that would probably get ignored, so here we are. As usual, I'll give a quick summary and then my brief thoughts.

The first two articles are semi-related, as both of them concern people's shocking willingess to sacrifice their basic rights.

Govt. agencies, colleges demand applicants' Facebook passwords
Bob Sullivan, MSNBC.com

Pretty simple, but troubling.
If you think privacy settings on your Facebook and Twitter accounts guarantee future employers or schools can't see your private posts, guess again. 
Employers and colleges find the treasure-trove of personal information hiding behind password-protected accounts and privacy walls just too tempting, and some are demanding full access from job applicants and student athletes. 
In Maryland, job seekers applying to the state's Department of Corrections have been asked during interviews to log into their accounts and let an interviewer watch while the potential employee clicks through wall posts, friends, photos and anything else that might be found behind the privacy wall... 
Student-athletes in colleges around the country also are finding out they can no longer maintain privacy in Facebook communications because schools are requiring them to "friend" a coach or compliance officer, giving that person access to their “friends-only” posts. Schools are also turning to social media monitoring companies with names like UDilligence and Varsity Monitor for software packages that automate the task. The programs offer a "reputation scoreboard" to coaches and send "threat level" warnings about individual athletes to compliance officers.
I hate that I have to explain why this is dangerous--the usual excuse/response is "I don't care, I've got nothing to hide". That's not the point. Whether or not you've got anything to hide, you've got a right to privacy that absolutely must be protected. The whole concept of an "unalienable right" is that even you cannot opt to forfeit that right--one cannot sell oneself into slavery, hard as we may try with unpaid internships and the like.

I'm particularly troubled by the "threat level" warnings about student-athletes--we need to stop treating everyone as though they're a potential terrorist. It's ridiculous and it's wholly in opposition to the founding principles of this nation. To paraphrase Ben Franklin, he who would sacrifice liberty in pursuit of security deserves neither. Why are we all so eager to sacrifice liberty these days?

How Big a Deal is H.R. 347, That "Criminalizing Protest" Bill?
Gabe Rottman, ACLU.org

There's been a lot of hub-bub surrounding this most recent bill, which would seemingly criminalize protests of the ilk of the recent "Occupy" variety. The ACLU blog tempers the conspiracy theorists slightly, but still raises some disconcerting points.
It's important to note — contrary to some reports — that H.R. 347 doesn't create any new crimes, or directly apply to the Occupy protests. The bill slightly rewrites a short trespass law, originally passed in 1971 and amended a couple of times since, that covers areas subject to heightened Secret Service security measures. 
These restricted areas include locations where individuals under Secret Service protection are temporarily located, and certain large special events like a presidential inauguration. They can also include large public events like the Super Bowl and the presidential nominating conventions (troublingly, the Department of Homeland Security has significant discretion in designating what qualifies as one of these special events)... 
H.R. 347 did make one noteworthy change, which may make it easier for the Secret Service to overuse or misuse the statute to arrest lawful protesters. 
Without getting too much into the weeds, most crimes require the government to prove a certain state of mind. Under the original language of the law, you had to act "willfully and knowingly" when committing the crime. In short, you had to know your conduct was illegal. Under H.R. 347, you will simply need to act "knowingly," which here would mean that you know you're in a restricted area, but not necessarily that you're committing a crime... 
Also, while H.R. 347, on its own, is only of incremental importance, it could be misused as part of a larger move by the Secret Service and others to suppress lawful protest by relegating it to particular locations at a public event. These "free speech zones" are frequently used to target certain viewpoints or to keep protesters away from the cameras. Although H.R. 347 doesn't directly address free speech zones, it is part of the set of laws that make this conduct possible, and should be seen in this context.
Basically, we're now allowing DHS to determine what does and does not constitute a legal demonstration of our right to free speech. That's cool, if we assume that everyone within DHS is absolutely acting in the best interests of the citizenry (as opposed to certain hand-picked moneyed interests)... but what if they're not?

Reading the Privacy Policies You Encounter in a Year Would Take 76 Work Days
Alexis Madrigal, The Atlantic

This is brilliant, even if the research is a couple years old. Many of you are probably aware that by visiting a website, you are implicitly agreeing to that site's privacy policy, whether or not you have read it (which you haven't).
One simple answer to our privacy problems would be if everyone became maximally informed about how much data was being kept and sold about them. Logically, to do so, you'd have to read all the privacy policies on the websites you visit. A few years ago, two researchers, both then at Carnegie Mellon, decided to calculate how much time it would take to actually read every privacy policy you should... 
So, each and every Internet user, were they to read every privacy policy on every website they visit would spend 25 days out of the year just reading privacy policies! If it was your job to read privacy policies for 8 hours per day, it would take you 76 work days to complete the task. Nationalized, that's 53.8 BILLION HOURS of time required to read privacy policies.
Hahahaha, oh wow. Good thing this kind of stuff doesn't threaten to follow us around, right? Ah, crap... Again, people, with the privacy? Seriously?

Alright, that's it for today. Unless, of course, you feel like reading another one of my rants about how TARP didn't actually make money--but let's be honest, you don't. Anyway, get some sleep tonight, people--I lost one hour of sleep this weekend and I swear it feels like I lost 20. So be it.

Friday, March 9, 2012

Song of the Week(end)

I could've gone a couple directions with this week's Song of the Week(end). I thought about posting Bruce Springsteen's new "Death to My Hometown" song, which has an incredibly catchy Celtic-inspired back beat and has been in my head all week long. (Side note, I watched this performance of his on Jimmy Fallon... and the guy is sounding more like Tom Waits by the day. Kinda strange.)

I also thought about being the world's biggest nerd (which, realistically, is more a state of being than a state of action... you know what, nevermind...) by honoring my alma mater's long-awaited Ivy League basketball title-- and the NCAA tourney berth that it brings--with a little Ten Thousand Men of Harvard. But... no.

The Red Cowboy also came through with a late entry to the show, with Will Ferrell's "Yo No Se". Awesome. But it's March 9th, and 15 years ago today the music world lost its second star in six months, when Biggie Smalls was murdered. So we'll honor the big man here with not one but two of my favorite Biggie songs (yeah, I couldn't choose). Have a good weekend, people. Don't buy any Greek bonds.



Soylent pink

Now that I've got a daughter at home, stuff like this makes me even angrier than it used to...
When McDonald’s and other fast-food chains announced last month that the infamous “pink slime” was no longer being used in their burgers, some thought the ammonium hydroxide-treated beef cuts had disappeared from our food supply once and for all. 
But a new report in the Daily tablet newspaper suggests the slime will appear in school lunches this spring — 7 million pounds of it. 
The USDA, schools and school districts plan to buy the treated beef from Beef Products Inc. (BPI) for the national school-lunch program in coming months. USDA said in a statement that all of its ground beef purchases “meet the highest standard for food safety.” The department also said it had strengthened ground beef safety standards in recent years. 
Last April, celebrity chef Jamie Oliver reported that 70 percent of America’s ground beef is made with BPI’s ammonia-treated product. 
BPI recently said that figure still holds. In a statement, the company called ammonium hydroxide a “natural compound ... widely used in the processing of numerous foods.” 
Gerald Zirnstein, a former microbiologist at the Food Safety Inspection Service who coined the term “pink slime,” told the Daily that the continued purchase of ammonium hydroxide-treated beef cuts for school lunches doesn’t make any sense. 
“I have a 2-year-old son,” he told the Daily. “And you better believe I don’t want him eating pink slime when he starts going to school.” 
Zirnstein came up with the “pink slime” phrase when he toured a Beef Products Inc. production facility in 2002 during an investigation into salmonella contamination in packaged ground beef. After the animal byproduct is mixed with ammonia, it has a pink appearance. Zirnstein e-mailed his colleagues after the visit to say he did not “consider the stuff to be ground beef,” according to the Daily.
The fact that something that was once relegated to pet food is now considered perfectly acceptable for our children to eat at school is somewhat nauseating. I certainly don't want to force my children to eat something that has been rejected even by McDonalds, Burger King, and Taco Bell--frankly, the prospect of home-schooling has never seemed more appealing.

Of course, I'd argue that this kind of thing is yet another inevitable unintended consequence of the Fed's long-standing inflationary monetary policy. Nobody ever would have considered re-purposing this stuff for human consumption unless food inflation had gotten to a point that other alternatives were no longer affordable. That's also why you're now finding high-fructose corn syrup all over the place, since it's more cost-effective than sugar and the average consumer simply can't afford the real stuff anymore.

These kinds of trade-downs are everywhere lately, but of course they don't show up in "official" inflation statistics. A hamburger is considered a hamburger by the Fed, regardless of its content--the Fed makes no distinction between pure ground beef and something that is 30% "pink slime". I've ranted about this before and could do so all day long, but it's frankly pretty terrifying, and yet it's completely avoidable. We need to stop with the monetary hijinks and the nasty unintended consequences that they've created. Now.

[Washington Post]

Clip of the Week

This was an absolutely loaded week for videos--just the way I like it.

We'll start with music, where we've got this really cool video of a couple of guys (the Piano Guys, apparently) playing music on the shores of Hawaii, as well as this video of a bunch of robots playing the James Bond theme song. I'm honestly not really sure what's going on in that one, but I'm pretty sure it's awesome.

We've also got a few things going on in the animal kingdom--there's a koala bear running down the hall (I've always loved koalas, don't ask why), a baby sloth in a onesie, a seriously badass owl, and a seriously excited dog playing in a rainstorm of tennis balls.

And then there's sports. Lionel Messi scored five goals in a Champions League match, setting an impressive record, and Michael Beasley is an odd dude. Meanwhile, in Miami, this... is just weird. It seems that the Marlins, having changed their name from the Florida Marlins to the Miami Marlins, are now totally embracing the bizarre kitsch that defines South Beach--those hideous uniforms, the weird centerfield sculpture thing, this guy over here is calling himself Giancarlo now, Ozzie Guillen is the manager... this is a complete and total circus. Fitting, given the mentality of their braindead owner. Anyway, moving along...

This week, instead of any of those worthy videos, I'm posting a TED talk about what makes videos go viral--isn't it about time that we had a video about videos here on Clip of the Week? At any rate, this video made me laugh hysterically while also checking in as one of the most interesting videos i saw this week--it's one of the better TED talks I've seen recently, on all accounts.

The theory of what makes videos go viral is nothing Earth-shattering--it always has to do with certain cultural gatekeepers (the speaker calls them "tastemakers") who pass on videos to tons of other people at once. If your blog, video, or song gets tweeted or talked about by somebody with millions of followers, then that's pretty much all it takes to go viral. (You hear me out there, Lady Gaga?). Without further ado, here you go.

Thursday, March 8, 2012

Welcome March Madness (from The Simpsons)

It's March (already?), and that of course means that March Madness officially kicks off this week with Championship Week--plenty of teams have already clinched their NCAA berths, the Big East tournament has been underway for about a week now, and the ACC just started theirs today. I couldn't be more excited.

In honor of the ACC tournament and my Cavaliers (who earned a first round bye and start tourney play tomorrow), I thought I'd share my personal take on the ACC, as viewed through the all-knowing lens of The Simpsons. Enjoy. (Click on the pic to blow it up full size, for the full effect).


Tuesday, March 6, 2012

Quote of the Week (bonus edition)

Okay, this week I couldn't make a choice, so you're getting two Quotes of the Week. They're not related in any way, I just thought they both deserved recognition, so here goes.

First of all, in advance of this Friday's highly-anticipated monthly jobs report, former Reagan economic adviser David Stockman decided to put things in perspective for those of us who are getting (maybe a little too) excited about our apparently improving economy. In a wide-ranging interview that is highly critical of Fed policy (attaboy, Stockman), we're reminded that while things may be getting somewhat better in the job market, they're still pretty ugly.

QUOTE OF THE WEEK #1

"Look at the data that really counts. The 131.7 million (jobs in November) was first achieved in February 2000. That number has gone nowhere for 12 years."
                                                 - David Stockman

This is a gentle reminder that without a SIGNIFICANT number of new jobs and a MUCH higher labor force participation rate among the younger generation, there is NO WAY that we can possibly afford to subsidize the Baby Boomers' retirement years via Social Security and Medicare without going completely bankrupt as a nation. While the debt and deficit numbers are already staggering, our biggest liabilities have barely even begun to show up, and our tax base is showing no signs of expanding. This is a big problem.

And hey, on that note, it's Super Tuesday!! The day on which we will (maybe) choose who will try to lead this country out of the problems that Stockman has so kindly pointed out for us in his interview. So we'll turn things over to Joe Nocera, who has some... interesting words about Rick Santorum (a candidate I've briefly discussed here). In a piece that is highly critical of what the modern Republican party has become, Nocera gives his best endorsement of Santorum:

QUOTE OF THE WEEK #2

"An alcoholic doesn’t stop drinking until he hits bottom. The Republican Party won’t change until it hits bottom. Only Santorum offers that possibility."
                                     - Joe Nocera, New York Times

Yeah, that's pretty much how I feel about him. I support neither party, but I've voted Democrat in three straight Presidential elections because the Republican alternative was so distasteful to me (I have few kind words for George W. Bush, and John McCain ruined any good feelings I had about him the day he picked Sarah Palin as his running mate). And yet, if I had to choose between Bush, McCain/Palin, and Santorum... Santorum would be the absolute last choice on my list. But enough of that.


Nocera makes some solid points (it's not all snark), and I think his take on the matter is worth a read. I will now go vote for Ron Paul. Go America.

[USA Today]
[New York Times]

Why listen to critics?

We love critics in our culture--whether they're pundits providing analysis, rating agencies giving advice, or pure criticism as in the newspaper, we're absolutely addicted to reading about and soliciting other people's opinions. If we weren't, then this blog frankly wouldn't have any reason to exist (yes, I'm a critic, but you already knew that). There's something comforting in knowing (or believing) that we're making informed decisions about the things that we do in this world, and there's always strength in numbers. Buying or watching or listening to something that somebody else knowledgeable has already signed off on gives us a huge (if intangible) sense of comfort.

But why do we assume that the critics whose opinions we solicit have similar tastes to ours? What if the people providing the ratings are in some way fundamentally different than the people who are following the advice they give? That's the main question behind this Bloomberg article, which focuses on wine critics.
The flavors described so effusively by top wine critics may not be shared by consumers who buy products based on their opinions, a researcher suggests. 
Winemakers and critics surveyed in Canada were found to be much better able to sense a test chemical as intensely bitter, compared with average consumers who weren’t bothered by the taste, according to a report in the American Journal of Enology and Viticulture. 
The chemical is an indicator of oral sensitivity, the researchers wrote. The data suggest people born with a talent for identifying tiny differences in wine may have naturally gravitated to an industry where their abilities give them an edge, said John Hayes, director of the Pennsylvania State University’s sensory evaluation center. 
“Wine experts are more likely to have a very exquisite, acute sense of taste that the rest of us can’t sense,” said Hayes, one of the authors of the report, in a telephone interview. “Some of that is biology.”
In this case, we have scientific evidence that wine experts and general wine consumers are indeed two completely different types of people. That could explain why, when I take a sip of a Pinot Noir, I have just a little bit of trouble identifying the "hints of earthy cinnamon and honeysuckle", or whatever the hell the tasting notes say I'm supposed to taste. Why, then, should the wine experts' opinions be worth anything at all to us? If we can't appreciate what they can appreciate, is their "wisdom" at all helpful? Or is it perhaps even counter-productive?


I wonder how pervasive this is in other areas of criticism--do movie critics hold their movies to higher standards than the general public (yes, almost certainly)? Or are they simply looking for things that average people don't really pay much attention to?

The more I think about this kind of stuff, the more important I think word-of-mouth marketing becomes. Since we don't ever really know anything about the nameless, faceless people who provide reviews of the products we buy, we have no choice but to take their opinions on faith. That can defeat the whole point of relying on an outside opinion in the first place, so we instead have a tendency to lean on those closest to us--our friends and family whom we know have similar tastes to ours.

That's a difficult dynamic to capitalize on for many businesses and prospective marketers. It would be much easier for them (if more risky) if they only had to convince one critic that their product was high-quality, as opposed to thousands of unique customers. In the internet age, it just may be that traditional critics like the wine experts discussed in this Bloomberg article could become an endangered species. In my opinion, that's probably a good thing. But then... why are you listening to me?

[Bloomberg]

Friday, March 2, 2012

Song of the Week(end)

Okay, let's finish off this three-post Friday (let's call it a hat trick) with a little weekend music. I was planning to honor the recently-deceased Davy Jones--former lead singer of the Monkees--in this post, but I've heard "Daydream Believer" so much this week that it's nearly driven me insane (much like "I Will Always Love You" a couple of weeks ago... I had no idea the Monkees were ever this popular... I don't think they were).

So instead, I'm going to go in a completely different direction and throw a little sports theme onto this weekend's tune (no, this isn't the first time I've done that). You see, 50 years ago today, Wilt Chamberlain scored 100 points in an NBA game. Along with Joe DiMaggio's 56-game hitting streak, it's in the Pantheon of sports' most unbreakable records, a record made even more impressive by the absence of the 3-point shot in Chamberlain's era.

In the last 20 years, only Kobe Bryant and David Robinson have come anywhere close to Wilt's mark, even with the 3-pointer at their disposal. So today, we honor The Stilt by playing the chart-topping song from 50 years ago, Gene Chandler's "Duke of Earl". Yes, I'm thrilled that the chart-topper was actually a song that I'd heard of and liked, never a guarantee when you're talking about the '60s--it made this post much easier on me. Happy weekend, people.

The lunacy of Dow 116k (or, why all our pension funds are screwed)

I'm going to try to make this one as quick as I can, because I could really rant about it for days. I've talked here before about how the only market analysts who get publicity are the ones making outrageous calls (Dow 3,000! Dow 25,000 by August!), and how this has everything to do with the severely skewed incentive structure surrounding punditry.

Now, with the market nearing multi-year highs, we're in prime territory for these kinds of silly calls, on both sides of the bear/bull debate. This one just happens to be the most absurd, and for those of you who follow me on Twitter, you may already have seen my teaser of this issue. From MarketWatch's Chuck Jaffe:
My favorite market forecast of all time came in the fall of 1995, when mutual fund pioneer Bill Berger came to Boston and predicted the Dow Jones Industrial Average would rise to 116,200.  
He didn’t think it would happen overnight. In fact, the 70-something founder of the Berger Funds figured the market would need until the year 2040 to reach it. (He wryly suggested that if he was proved wrong, people come find him to discuss it; sadly, he died a few years later.) 
Of course, Dow 116,200 would be a far more ridiculous thought than even, say, Dow 36,000, the title of a popular-but-wrong-headed book from the bubble days of the late 1990s, were it not for one thing: As the Dow touched 13,000 this week (and the Nasdaq Composite flirted with 3,000), it’s actually stunningly close to being on track toward making Berger’s prediction come true.
Stunningly close, eh? Let's unpack this one for a minute. Jaffe goes on to extrapolate the annual return over the last 17 years (a completely arbitrary time period that is only relevant based on the exact timing of the prediction he's attempting to analyze), assuming that it will persist at exactly this same rate (7.2% compounded--he actually uses 6.75% because he's starting in June and not March, whatever) over the next thirty years. Using that compounding, the Dow will be well above 100k and on its way to 200k by 2046.

The problem is, this compounded annual rate is absolutely an accident of the time period he's using. For the first five years following Berger's Dow 116k call, the market went on an unprecedented vertical run-up, fueled by an influx of Baby Boomer cash and the dot-com bubble frenzy. The compounded annual return between 1995 and 2000 was a staggering 21%, leading the stock market to more than double over those five years.


Unfortunately for Jaffe (and Berger), it's made basically zero headway since then. In the 12 years following that once-in-a-lifetime bull market, the market has simply lurched from one asset bubble to the next, treading water for a long enough time that just about any index with a continuous compounding assumption (like, um, a pension fund) now finds itself hopelessly behind the curve. The only reason that the Dow 116k call looks like anything resembling a reasonable prediction is the specific and arbitrary points that our author has selected for his analysis.

To show what I mean, let's use a couple of other equally arbitrary starting and ending points for our analysis, to see what kind of wildly different conclusions we can reach (we'll list the author's prediction first, for comparison's sake). You might want to click on the table to get a clearer view.


I'm a particular fan of the "Dow 26 Million" call that you could make if you extrapolated from the March 2009 bottom until today--that's a good one. And the "Dow Zero" call at the bottom of the table is a bit harsh--the Dow would actually hit an asymptotically small level of nine cents by 2046 under that projection, so you wouldn't be totally wiped out.

The point is, any time you try to extrapolate too far based on arbitrary data sets, you're completely a slave to your small sample. Yes, I recognize that the 1995 to 2012 time horizon is the widest range of the bunch, and therefore your biggest and hypothetically least-random sample. But is the 12 years since 2000, where the market has eked out only a 1.9% annual return, meant to be ignored simply because the 5 years prior were so good? If 12 years isn't a significant sample, then why is 17? And if those 5 years from 1995 to 2000 are so important, why aren't the 5 years from 2007 to 2012--with their meager 1.43% annual gain, even after this year's ramp job--equally important?

You get my point by now, so I'll back off. The problem is, every single pension fund in the country uses exactly this kind of infinite compounding analysis in order to claim its solvency. These funds generally assume a consistent return of 7% to 8% (sometimes more) into perpetuity, in order to have enough funds to pay out their accumulated liabilities.

In other words, if the Dow isn't at 116,200 by 2046, these funds are gonna have one hell of a problem on their hands. So, you can laugh at this prediction if you want... but in doing so, recognize that your pension (if you've got one) relies on just this kind of mathematical lunacy. Gooooooooo Dow!!

[MarketWatch]

When hypocrisy is good business: "The Lorax"

Alright, I may be coming at you today with another flurry of posts to send you into the weekend. As usual, I promise nothing, but I've got all sorts of good intentions.

The ostensible purpose of this particular post is to share with you what just might be the greatest movie review ever written. You may have heard about the movie version of "The Lorax" already, and you almost certainly have if you watch Fox News (which, if you're reading this blog... ehhhh, you probably don't, but I digress). You see, many on the far right have latched onto The Lorax as their most recent cause célèbre, vilifying the movie as Hollywood's latest attempt to "indoctrinate" our kids with a dangerous message of conservation.

I could seriously spend hours unpacking the idiocy behind that one, but I won't bother. Because, as New York Times movie reviewer A.O. Scott points out, ultimately the joke is on Fox News. In a piece that is honestly one of the greatest examples of journalistic criticism in recent memory, Scott unleashes the awesomest, meanest, most beautifully-crafted negative review I've ever read (well, at least since Homer Simpson's review of "The Legless Frog").
Having donned recyclable 3-D glasses and seen the thing for myself, I’m not sure whether to mock the enemies of “The Lorax” for their cluelessness, to offer them reassurance or to compliment them for being half-right. Thematically the movie... dutifully lectures its audience on the folly of overconsumption and the virtue of conservation. At times the imagery takes on a dark, almost apocalyptic cast as it surveys the smogged-up, denuded landscape where the trees used to be and the shiny, commercialized pseudo-utopia (called Thneedville) that an alienated humanity, having lost the memory of nature, now calls home. 
Don’t be fooled. Despite its soft environmentalist message “The Lorax” is an example of what it pretends to oppose. Its relationship to Dr. Seuss’s book is precisely that of the synthetic trees that line the streets of Thneedville to the organic Truffulas they have displaced. The movie is a noisy, useless piece of junk, reverse-engineered into something resembling popular art in accordance with the reigning imperatives of marketing and brand extension. 
This is not a matter of hypocrisy or corporate green-washing on the part of the filmmakers, nor of reflexive Loraxian dogmatism on my part. The corporate entertainment system has shown itself perfectly capable of injecting soul into what it sells, and at inflecting some of its products with a critical spirit. “Wall-E” is a transcendent example, brilliantly embracing its own contradictions, but there are plenty of other movies, animated and not, that manage to pay tribute to the beauty of the natural world even as they revel in giddy, merchandising-friendly artifice.
Wow, wow, wow. Seriously, every word of this thing is perfectly chosen, and I highly suggest that you read it in its entirety. I read it aloud to my wife last night and I could barely finish the thing without grinning like an idiot at the sheer brutality of it all.

But the thing is, Scott is dead on. I've already seen The Lorax shilling for Mazda SUVs and doing random promotional spots for TBS (two of apparently 70 "launch partners" for the film, many of whom have tenuous ties at best to any environmentalist movement), and I'm sure there's more on the way. All I know is, if I see the Lorax showing up courtside at Lakers games, I'm outta here.


As I said earlier, ultimately the joke is on Fox News here for assuming that The Lorax's "message" is in any way genuine. After all, the directors and producers are doing more damage to their own "message" with this hypocrisy than any conservative broadcaster could ever do. Actions always speak louder than words, and their actions here are extremely loud and in your face.

As a business entity, "The Lorax" is essentially doing what just about every corporate titan is doing these days--attempting to co-opt the "green" movement as a corporate slogan, spending more money publicizing its supposed good deeds than was ever spent actually pursuing those same deeds. It's brilliant P.R., but it's also in most cases incredibly dishonest and fraudulent.

Interestingly enough, Fox News could actually learn a little something from The Lorax here--these days, it's good business to pretend to be green, whether or not you actually are. Actually, I'm pretty sure the Republican Party of today is built on just this kind of hypocrisy... ironic, isn't it?

[New York Times]

Thursday, March 1, 2012

Clip of the Week

Big week for video clips. If you're into soccer, I recommend Cristiano Ronaldo's goal (I don't like the guy, but damn he's good), the referees' blown call against AC Milan, and Clint Dempsey's goal that sealed the USMNT's first ever win over Italy, on their turf no less (congrats to all).

If you'd rather go the animal route this week instead, I present to you this adorable video of a baby fennec fox. I have no idea what a fennec fox is, but I now desperately want one in my house. I'm sure my cat would be thrilled, especially on the heels of the small human that we recently introduced into his environment.

Next, if you want to be reminded of your vast insignificance in the context of the universe, while also being reminded of how much stuff there is in the world that you've never heard of (and hey, who doesn't, right?), then this video is definitely for you. Or you could just appreciate the simple beauty of nature (and art) by allowing yourself to be mesmerized by this video for a few minutes.

But obviously, none of these are your Clip of the Week. This week, I'm presenting all you athletes out there with a reminder that no matter how athletic you think you are, once were, or some day could be, there's always somebody who's more athletic than you and can do things you'd never dreamed of (yes, even you, Dorn). So here's retired high jumper Stefan Holm, jumping over things that I'd be happy to do pull-ups on.

No, it's not anything new (it's from 6 years ago), but I just saw it for the first time today and then decided to quit sports forever. Because that's not fair.