Hungry Hungry Hippos

Now... I am absolutely certain that I joked about this, sarcastically and dismissively, when the movie version of Battleship was announced and released. But now, it's a reality, and I just... I don't even know anymore.

It is a poser that even the most creative of screenwriters might struggle with: how to adapt the children's game Hungry Hungry Hippos into a blockbuster movie. Nevertheless, that is the task facing Hollywood's brightest minds this morning after manufacturer Hasbro confirmed last week that it is planning a big-screen outing for the brightly coloured plastic playthings (Ed. Note: this is what we're talking about. Yeah...). 

Hungry Hungry Hippos is part of a roster of planned films that also includes Monopoly (a project that at one point had Ridley Scott attached) and Britain's Action Man, the latter despite his American cousin GI Joe having already featured twice in multiplexes. Hasbro has been inspired by the multibillion-dollar success of its Transformers franchise in the hands of Michael Bay, and apparently has not let Battleship's disappointing $300m (on a $200m budget) haul earlier this year upset its plans for worldwide domination. 

The latest proposal to bring its range to cinemas has been hatched in partnership with Hollywood film production company Emmett/Furla, which says it will make three movies in the next two years.

I'm being punked, here, right? This is all an elaborate joke? Whatever. Clue was pretty good, I guess... when does Yahtzee come out?





[Guardian]

3-D printing and patents

I've been writing a lot about 3-D printing lately (because I think it's awesome), and I also recently wrote a post about our nation's patent system (because I think it's broken). Last week, I came across an article from The Economist that brought those two topics together—in a way that might not make me particularly happy.

What could well be the next great technological disruption is fermenting away, out of sight, in small workshops, college labs, garages and basements. Tinkerers with machines that turn binary digits into molecules are pioneering a whole new way of making things—one that could well rewrite the rules of manufacturing in much the same way as the PC trashed the traditional world of computing. 

The machines, called 3D printers, have existed in industry for years. But at a cost of $100,000 to $1m, few individuals could ever afford one. Fortunately, like everything digital, their price has fallen. So much so, industrial 3D printers can now be had for $15,000, and home versions for little more than $1,000 (or half that in kit form). “In many ways, today’s 3D printing community resembles the personal computing community of the early 1990s,” says Michael Weinberg, a staff lawyer at Public Knowledge, an advocacy group in Washington, DC. 

As an expert on intellectual property, Mr Weinberg has produced a white paper that documents the likely course of 3D-printing's development—and how the technology could be affected by patent and copyright law. He is far from sanguine about its prospects. His main fear is that the fledgling technology could have its wings clipped by traditional manufacturers, who will doubtless view it as a threat to their livelihoods, and do all in their powers to nobble it. Because of a 3D printer's ability to make perfect replicas, they will probably try to brand it a piracy machine. 

Manufacturers of famous brands have had to contend with ripoffs since time immemorial. Whole neighborhoods exist in Hongkong, Bangkok and even Tokyo that turn out imitation designer handbags, shoes and watches. China has flooded the world with cheap replacement parts based on designs pirated from the original equipment manufacturers. 

But while the pirates' labour rates and material costs may be far lower, the tools they use to make fakes are essentially the same as those used by the original manufacturers. Equipment costs alone have therefore limited the spread of the counterfeiting industry. But give every sweatshop around the world a cheap 3D printer coupled to a laser scanner, and pirated goods could well proliferate... 

As with any disruptive technology—from the printing press to the photocopier and the personal computer—3D printing is going to upset existing manufacturers, who are bound to see it as a threat to their traditional way of doing business. And as 3D printing proliferates, the incumbents will almost certainly demand protection from upstarts with low cost of entry to their markets. 

Manufacturers are likely to behave much like the record industry did when its own business model—based on selling pricey CD albums that few music fans wanted instead of cheap single tracks they craved—came under attack from file-swapping technology and MP3 software. The manufacturers' most likely recourse will be to embrace copyright, rather than patent, law, because many of their patents will have expired. Patents apply for only 20 years while copyright continues for 70 years after the creator's death.

Oh, boy. I firmly believe that 3-D printing has the potential to transform the way that many industries—particularly those involved in manufacturing—operate in this country, and that it could even help our country to break its long-standing dependence on imported crude oil (if I don't have to ship a product to you, because you can print it yourself at home, then I can pretty much put UPS and FedEx out of business overnight, significantly cutting into the amount of fuel used in this country).

But it won't happen if we don't allow for the elimination of businesses made irrelevant by new technologies. Creative destruction has always been at the core of economic progress in this country (note: "economic progress" does not necessarily mean the same thing as "economic growth", as measured by the circulation of dollars—not all "wealth" is denominated in paper currency), and to the extent that patents impede this economic progress, they must be abolished.

I think we're reaching a very dangerous point in this country when it comes to patents and the way they are used—instead of being used as a tool to protect inventors and small business owners from being ripped off, they're now being used as a cudgel by the largest companies to protect their dominant industry position and create barriers to entry for smaller competitors.

If you doubt this assertion, please refer to this piece in yesterday's New York Times, which notes that Apple and Google this year spent more money on patent lawsuits and patent purchases than they did on research and development for new products. That's a new dynamic (it's the first year that this has been the case), and it's definitely not a positive one for our country.

When we put the interests of big business ahead of the interests of society at large, we put ourselves on a dangerous path toward economic stagnation and irrelevance. Unfortunately, the majority of public policy that has come about in the last decade has done just that—from auto industry bailouts to TARP to overly broad patent law to a whole laundry list of other programs and court rulings, the past decade has been a great one for big business, typically at the expense of the ordinary American.

We need this dynamic to reverse itself, because the nation's economic future is worth more than the income statements of its largest companies. Yes, they are different things.

[Economist]

P.S.- Another interesting dynamic to watch in the 3-D printing space is discussed in this article, which I didn't have the opportunity to address in this post. I don't think that guns are the best use of 3-D printers, but they're clearly drawing a lot of attention for various reasons. Interesting developing issue.

Song of the Week(end)

For this weekend, I'm going way off the map with your Song. How far off the map? China. Ever heard of Chinese Bluegrass? Me either, but here you go...


Have a good weekend, people.

Clip of the Week

Uncharacteristically weak group of clips out there this week, but that should change with the MLB Playoffs starting up this weekend. I would've loved to have posted some great clips from last weekend's Ryder Cup here, but... um... you know... yeah.

There were a couple of solid football highlights as usual, including this high school play and this college play. But football highlights are sort of a dime a dozen, and there's still a lot of season left.

I'm not even going to begin to talk about Wednesday night's who-can-say-the-least-while-looking-the-best Presidential debate, so don't bother asking for highlights here.

Instead, we'll keep things on the lighter side (again), and share the latest episode of Jerry Seinfeld's "Comedians in Cars Getting Coffee", starring Michael Richards (Kramer). On the whole, I've been a bit disappointed by this series, but I think this one is definitely worth a watch, if only because these guys continue to have fantastic chemistry. And of course, Richards doesn't shy away from his racist meltdown a few years back, after which he pretty much disappeared from the public eye. If you're into Seinfeld, it's worth a watch. Enjoy.

Password inequality must end

I know it's been a light week for content, but I've still got a few posts for you on this wonderful fall Friday. I feel like keeping things light around here, so I'll avoid politics and the economy for once (which is honestly why I've been quiet this week—as your mother always told you, if you don't have anything nice to say...). Instead, because I like to provide a public service around here, here's some advice for how to safeguard your ATM pin code so that it's hard to crack.

How easy would it be for a thief to guess your four-digit PIN? If he were forced to guess randomly, his odds of getting the correct number would be one in 10,000—or, if he has three tries, one in 3,333. But if you were careless enough to choose your birth date, a year in the 1900s, or an obvious numerical sequence, his chances go up. Way up. 

Researchers at the data analysis firm Data Genetics have found that the three most popular combinations—"1234," "1111," and "0000"—account for close to 20 percent of all four-digit passwords. Meanwhile, every four-digit combination that starts with "19" ranks above the 80th percentile in popularity, with those in the late—er, upper—1900s coming in the highest. Also quite common are MM/DD combinations—those in which the first two digits are between "01" and "12" and the last two are between "01" and "31." So choosing your birthday, your birth year, or a number that might be a lot of other people's birthday or birth year makes your password significantly easier to guess. 

On the other end of the scale, the least popular combination—8068—appears less than 0.001 percent of the time. (Although, as Data Genetics acknowledges, you probably shouldn't go out and choose "8068" now that this is public information.) Rounding out the bottom five are "8093," "9629," "6835," and "7637," which all nearly as rare... 

Some other interesting anedcotes [sic] from the data:  

- Half of all passwords are among the 426 most popular (out of 10,000 total) 

- People prefer even numbers to odd, so "2468" ranks higher than "1357." 

- Far more passwords start with "1" than any other number. In a distant second and third are "0" and "2." 

- Among seven-digit passwords, the fourth-most popular is "8675309," which should ring familiar to fans of '80s music. 

- The 17th-most popular 10-digit password is "3141592654." 

- Two-digit sequences with large numerical gaps, such as "29" and "37," are found often among the least popular passwords.

Wait a minute... half of all passwords are among the 426 most popular? So then, a mere 4% of the passwords are hogging 50% of the password wealth? This is an outrage! This password inequality must end! OCCUPY PIN CODES!!

I am hereby changing my pin code to 2719, because it sounds unpopular. D'oh, forget that I told you that. What I meant to say was, I'm changing it to 1234, because nobody would ever guess that...

[Slate]
 

Quote of the Week

A few months ago, I wrote a post about the Black-Scholes pricing model, its role in the financial crisis, and how economists continue to do themselves a terrible disservice by insisting that their discipline is a physical science like physics or biology, rather than the inexact social science that it is. I wrote:

We all use models in our daily lives, because they help us to make sense of what are often very complex problems. Models simplify, organize, and categorize the variables in an uncertain world so that we can better understand the impacts of our decisions. But they DO NOT, ever, have the power to tell us what to do. You don't even need to know a thing about Black-Scholes (and trust me, a lot of people who should know a lot about it... don't) in order to accept that assertion as fact. 

The intelligent person knows to use a model only as a guide to confirm (or refute) what our intuition tells us. Very often, our painfully simple heuristic models (which you can learn or hear more about from Gerd Gigerenzer's speech, if you're a nerd like me) actually outperform very elegant statistical models. How can this be? The answer lies in this brilliant polemic from economist Robert Wenzel (which is almost as great as a similar recent rant from Jim Grant).

In the science of physics, we know that water freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed. 

There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time. If potato prices remain the same for 10 weeks, it does not mean they will be the same the following day. I defy anyone in this room to provide me with a constant in the field of economics that has the same unchanging constancy that exists in the fields of physics or chemistry.  

And yet, in paper after paper here at the Federal Reserve, I see equations built as though constants do exist.

Wenzel is dead on. We all know that models are useful, but they do not remove responsibility for rational risk management—only people have the power to do that. When callous risk managers at huge investment banks take another man's model on faith, and make huge bets with billions of dollars on the line without sanity-checking the model, that's nobody's fault but theirs.

While my points were correct, I took a little while to get the point across. For a more pithy take on things, we'll turn to Barry Ritholtz, for this week's Quote of the Week.

This week's QUOTE OF THE WEEK

"Economists are neither Engineers nor Scientists, as each of these fields has a significant degree of precision in what they do, and test their hypotheses in a lab. The better choice for Economists are 'Historian' or 'Sociologists.' The sooner the profession loses its 'physics penis-envy', the better off we all will be."
                                                  - Blogger Barry Ritholtz

I'll just let that "physics penis-envy" line stand on its own, because I think it's the single greatest takedown of modern economics that I've ever seen.

As our economy becomes more and more dependent on the fantasy-land models put together on Ben Bernanke's laptop, I sincerely hope that the damage done by these grand experiments isn't so grave that we all end up suffering for decades. But if we allow ourselves to entrust ever more of our lives to these "scientists", we're certainly running that risk.

The future of automotive transportation

While I spend a lot of time on this blog decrying the current state of our economy (and political environment), I try my best to balance that cynicism with a fair amount of optimism about our future, especially where new technologies are concerned. If we can be courageous enough to allow for the breaking down of old paradigms (and for the failure of outdated and obsolete business models), the future for our nation is indeed incredibly bright.

In that vein, a pair of articles that I read over the weekend have me particularly excited. First up, from US News & World Report:

Last week, California became the third and by far the most important state to legalize driverless cars, joining Nevada and Florida. Google has been getting most of the attention here for its work developing driverless vehicles. But it is hardly alone. Major automakers have their own projects under development. 

Google may want to leapfrog existing technology to point the way toward a driverless future. Existing auto companies will seek incremental changes that protect their franchises while moving toward an automated future. It's not clear what the pace of commercialization will be for driverless cars. 

After all, many of the improvements promised at the 1939 World's Fair in New York still have not come to pass. And there will be no shortage of open-road lovers and skeptics reluctant to cede control of their cars to a bunch of computers—shades of Skynet and The Terminator. 

But as Google, Apple, and other new-tech giants have demonstrated, the pace of change is likely to be much faster when it comes to automated vehicles. Using increasingly sophisticated sensors and software, driverless cars hold out the promise of saving lives, fuel, and time. They react more quickly to accident threats. They don't panic. They can tie into traffic grids and do a much better job of balancing traffic flows. They can optimize fuel consumption. 

We already trust a lot to technology when we drive. We generally believe traffic signals and respond to GPS guidance and traffic congestion reports. We expect speed and fuel flows to respond properly when we use cruise controls. We use digitized cameras and back-up sensors. Newer cars monitor weather conditions and automatically trigger any number of safety responses. Increasingly, we even pay for auto insurance using on-board computers to record where and how we are driving. And many of these functions are voice-activated on newer vehicles.

For more on the Google Car project, check out this video on Bloomberg—you have to admit, it looks pretty awesome. But in case driverless cars don't get you all excited, I've got another car-related article that is equally awesome. From Yahoo Finance:

Tesla Motors today unveiled its highly anticipated Supercharger network. Constructed in secret, Tesla revealed the locations of the first six Supercharger stations, which will allow the Model S to travel long distances with ultra fast charging throughout California, parts of Nevada and Arizona.  

The technology at the heart of the Supercharger was developed internally and leverages the economies of scale of existing charging technology already used by the Model S, enabling Tesla to create the Supercharger device at minimal cost. The electricity used by the Supercharger comes from a solar carport system provided by SolarCity, which results in almost zero marginal energy cost after installation. Combining these two factors, Tesla is able to provide Model S owners1 free long distance travel indefinitely. 

Each solar power system is designed to generate more energy from the sun over the course of a year than is consumed by Tesla vehicles using the Supercharger. This results in a slight net positive transfer of sunlight generated power back to the electricity grid. In addition to lowering the cost of electricity, this addresses a commonly held misunderstanding that charging an electric car simply pushes carbon emissions to the power plant. The Supercharger system will always generate more power from sunlight than Model S customers use for driving. By adding even a small solar system at their home, electric car owners can extend this same principle to local city driving too. 

The six California locations unveiled today are just the beginning. By next year, we plan to install Superchargers in high traffic corridors across the continental United States, enabling fast, purely electric travel from Vancouver to San Diego, Miami to Montreal and Los Angeles to New York. Tesla will also begin installing Superchargers in Europe and Asia in the second half of 2013. 

The Supercharger is substantially more powerful than any charging technology to date, providing almost 100 kilowatts of power to the Model S, with the potential to go as high as 120 kilowatts in the future. This can replenish three hours of driving at 60 mph in about half an hour, which is the convenience inflection point for travelers at a highway rest stop. Most people who begin a road trip at 9:00 a.m. would normally stop by noon to have lunch, refresh and pick up a coffee or soda for the road, all of which takes about 30 minutes. 

"Tesla's Supercharger network is a game changer for electric vehicles, providing long distance travel that has a level of convenience equivalent to gasoline cars for all practical purposes. However, by making electric long distance travel at no cost, an impossibility for gasoline cars, Tesla is demonstrating just how fundamentally better electric transport can be," said Elon Musk, Tesla Motors co-founder and CEO. "We are giving Model S the ability to drive almost anywhere for free on pure sunlight."

Make it through that whole thing? Good. To date, I haven't been particularly excited about electric cars, in large part because previous models have mostly relied upon existing sources of electric energy, the majority of which is generated from the burning of fossil fuels (largely oil and coal). In other words, there's no real fundamental change, just a shifting of where the fuel is burned—in a power plant instead of in your car.

But if we can make a shift to solar, then that's a legitimate game-changer in the automobile world. Of course, as I've mentioned on here once before, what would be even cooler is if we could figure out a way to turn all of our highways into piezo-electric energy generators, with the cars effectively powering themselves, at least in part. Spray some transparent solar film on the outside of all the car's windows, and we could take this whole thing even another step further.

Yes, I know that some of this probably sounds insane, but I also think it's completely possible and plausible. The technology all exists, it's just a matter of harnessing it in a way (and scaling it up to a point) that makes it broadly useful and usable.

Do I think that a future of self-driving cars which use virtually no energy is possible? Absolutely. Do I think that we as humans have the courage to embrace that future, if it means destroying entire companies and industries in the process? That jury's still out. But I certainly hope so.

[US News]
[Yahoo Finance]