Monday, June 28, 2010

NYTimes: BP Loses Trading-Floor Swagger in Energy Markets

As an indication of the role of speculative capital in industrial corporations, note the high percentage (20% or $2 to $3 billion) of its profits that BP took in from it's trading operations.

jd

From The New York Times:

BP Loses Trading-Floor Swagger in Energy Markets

The future of BP's trading unit is uncertain as oil spill costs mount and rival firms try to lure away traders.

http://nyti.ms/9qRDR1


Sent from my iPad

Sunday, June 20, 2010

NYTimes.com: What Is I.B.M.'s Watson?

Interesting article that shows how the universe of possibilities expands as technology develops -- cheaper, faster, more, more, more. And that it enables hundreds of thousands or maybe even millions of people to add to information Out There.

jd

MAGAZINE | June 20, 2010
Smarter Than You Think: What Is I.B.M.'s Watson?
By CLIVE THOMPSON
The category is artificial intelligence. This question-answering computer system is ready to challenge some flesh-and-blood "Jeopardy!" champions.


P.S. And this -- the other side of the tech revolution; how sausage is made: A Night at the Electonics Factory

Thursday, June 17, 2010

NYT: The genome at 10

From The New York Times:

THE GENOME AT 10: Awaiting the Genome Payoff

The Human Genome Project has not produced the promised cornucopia of new drugs.

http://nyti.ms/dm9RBi



A couple of observations:

1. A revolution in the instruments of production is at the same time a revolution in the instruments of science.

2. Perhaps one of the problems is reducing the human being to a chemical machine.

jd

Monday, May 31, 2010

Not if, but when

It is impossible to overstate the tragedy that is spreading over the Gulf of Mexico, now in its second month, and likely to continue through the summer. There are no surprises there, sadly, either. It was not a question of "if", but of "when". Drill in hard to reach, risk-prone areas, with a more and more precarious chain of technology, with a built-in drive to cut corners -- not if but when.

The whole thing fits so neatly into the dismal dynamics of globalization, a further unfolding of what the ecosystem of globalization looks like.

I still think the most functional, concise definition of "globalization" is "capitalism in the age of electronics." It captures the idea that globalization is very much an expression of capitalism, with its compulsion to constantly expand and maximize profits, but capitalism under very specific technical conditions, the production environment of new technologies. New technologies have enabled oil companies to exploit more distant, hard to reach sources of oil, which entails more and more risk of something going wrong. In the effort to speed production and maximize profits, BP cut corners, used riskier methods, and voila, the largest oil spill ever.

I wrote a piece a few years ago about the "ecosystem of globalization", trying to understand environmental change and how it relates to globalization and speculative capital. In short, my conclusion was that globalization doesn't just transform markets and social relations, it also transforms the environment, creating an ecosystem that facilitates the maximization of profit using new technologies. It recreates the world in its own image. The oil slick spreading over the ocean and coating the shores of Gulf Coast is what that image looks like.

jd

Friday, May 14, 2010

NYT on job market shift

Check out the recent New York Times article, "In Job Market Shift, Some Workers Are Left Behind" (5/12/10) for an insightful (I think) description of the changes in work pushed along by new technologies in the current economy, and the social wreckage that that entails.

jd

Saturday, April 10, 2010

Magnetar and meltdown

Another episode on This American Life about the Big Meltdown, this one about the hedge fund Magnetar and its deals both contributed to and profited from the mortgage security market collapse:

Inside Job

The program will shortly (Sunday 4/11 7p) be available from iTunes or the link above.

jd

Friday, March 26, 2010

Follow-up on synthetic biology/

As a kind of follow-up to my previous post on synthetic biology, here is a link to a very good (I think) discussion of the mechanical thinking behind the synthetic biology field: How to Manufacture the Notion of Synthetic Life, by Steve Talbott (whose work I very much like).

jd

Monday, February 15, 2010

DIY genetic engineering

Here is a link to an Interesting Article from Sunday's (2/14/10) NYT Magazine: Do-It-Yourself Genetic Engineering. The article describes the bubbling new field of synthetic biology, a a step or two beyond traditional genetic engineering -- instead of adding new genes to existing species to change their properties, synthetic biology is more about assembling new organisms from genetic legos.

It's more next-gen technology revolution stuff: "synthetic biologists imagine nature as a manufacturing platform: all living things are just crates of genetic cogs; we should be able to spill all those cogs out on the floor and rig them into whatever new machinery we want." With the added possibility of creating self-replicating factories.

Which is both fascinating and terrifying -- the article references "bio-terrorism", but that's only a minor issue I think compared to what the article describes as "bio-errorism". When fiddling with stuff, if anything can go wrong it will -- that's just the nature of technology. Mainly you want to minimize downside risk so that no one gets hurt. Nature-as-genetic-laboratory is incredibly cautious. It has a vigorous quality assurance department, and runs any new developments through a lengthy testing and shakeout process.

[Cynicism / realism alert] Why am I not so confident about the same when money is on the table?

And then there is the utter reduction of nature to machine. Is that all there is?

jd

Saturday, February 06, 2010

Fresh Air interview with Ed Thorp

The Fresh Air radio program recently featured Ed Thorp, mathematician and author of the classic card-counting book, Beat the Dealer, and Scott Patterson, Wall Street Journal reporter and author of the new book, The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It.

From the interview, Patterson's book sounds like a re-hash of how mathematical models, supported by computers, have changed the financial system. New technologies have created the possibility of new forms of speculation, and the demand for maximum rates of return has taken advantage to that possibility.

Thorp comes across as dispassionate and insightful. He recognizes the proper role of models in general. It's not that mathematical models of the world are bad, they just have limits. The "quants" (those who rely on math models for trading, as opposed to, say, the fundamentalists who are studying balance sheets) on Wall Street today "don't have a long history of experiences of what's wrong with models." They are "wowed by the math" and "didn't use them correctly." And so recent history is likely to repeat itself, somehow. "You know something bad is going to happen, you just don't know when."

Although it is popular to call Wall Street (or the modern financial system in general) a giant casino (which Thorp does in the interview), it is important to note that someone like Thorp was not a gambler, even when he was confirming the validity of his models at the blackjack tables in Las Vegas. On Wall Street, he did the same thing. Gambling and the application of theoretical models to acting on probable outcomes of current events share the important factor of risk, but they are fundamentally two different activities.

jd

Monday, January 25, 2010

Garry Kasparov, chess and computers

Check out The Chess Master and the Computer, by former chess grandmaster Garry Kasparov, from the February 11, 2010 issue of The New York Review of Books. The article is very good -- insightful, reflective, maybe even inspiring. Here are a couple of quotes, but I recommend the whole thing.

On the effect of computers on chess, and the quantification of the world:

The heavy use of computer analysis has pushed the game itself in new directions. The machine doesn't care about style or patterns or hundreds of years of established theory. It counts up the values of the chess pieces, analyzes a few billion moves, and counts them up again. (A computer translates each piece and each positional factor into a value in order to reduce the game to numbers it can crunch.) It is entirely free of prejudice and doctrine and this has contributed to the development of players who are almost as free of dogma as the machines with which they train. Increasingly, a move isn't good or bad because it looks that way or because it hasn't been done that way before. It's simply good if it works and bad if it doesn't. Although we still require a strong measure of intuition and logic to play well, humans today are starting to play more like computers.
And related to that, the dark shadow of the market across innovation and even chess (the article is reviewing a book called Chess Metaphors, by Diego Rasskin-Gutman, hence the beginning phrase):

This is our last chess metaphor, then—a metaphor for how we have discarded innovation and creativity in exchange for a steady supply of marketable products.... Like so much else in our technology-rich and innovation-poor modern world, chess computing has fallen prey to incrementalism and the demands of the market. Brute-force programs play the best chess, so why bother with anything else? Why waste time and money experimenting with new and innovative ideas when we already know what works? Such thinking should horrify anyone worthy of the name of scientist, but it seems, tragically, to be the norm. Our best minds have gone into financial engineering instead of real engineering, with catastrophic results for both sectors.

jd

Sunday, September 27, 2009

Giant Pool of Money radio program

The NPR radio program This American Life aired an update to their "The Giant Pool of Money" program from a year ago (called appropriately, Return To The Giant Pool of Money. The producers did a nice job, I think, on the details of the collapse.

The podcast is available from iTunes, and should be available from the show's website here shortly.

jd

Saturday, September 12, 2009

A couple of updates

I realize this blog has been very quiet over the past couple of years. Or rather, I have not posted very much. Despite the enormity of the financial crisis, I don't think there is anything new, or unexpected there. Yes the details of how the latest act began and played out are of some interest, and the jockeying over the possible restructuring is somewhat revealing. But overall, it was all to be expected: more and more extended speculation and risk-taking to seek historically shrinking rates of profit until the precarious structure collapsed, and set the stage for the next act.

One year after poo really hit the fan on Wall Street, it perhaps bears repeating Marx's description of financial crises: they are not the destruction of value, but a powerful (even violent) means of centralizing wealth (CW/Vol. 37, aka Capital Vol. III, p. 468). In this regard, the crisis represents a violent ratcheting up of the polarization of wealth and poverty.

There are a few threads in the recent news that highlight that stood out to me.

First, as Nasser Saber pointed out in his book Speculative Capital, an important element of speculation (Saber defines speculative capital as capital used in arbitrage), taking advantage of price differences in different markets. As speculative capital develops, the arbitrage opportunities shrink, requiring either larger sums to be committed to arbitrage to achieve the same return, or a kind of arms race to get ahead of the arbitrage crowd by shrinking the trading time through faster computers and smarter software. "Flash trading" is a way of exploiting price differences, or soon-to-be price differences by learning of upcoming (measured in milliseconds). [And today, only just today I am sad to say, I discovered Nasser Saber's blog on finance and speculative capital, and so I direct the reader to his blog for any more on speculative capital.] See e.g. NYSE's Fast-Trade Hub Rises Up in New Jersey in the July 30, 2009 Wall Street Journal. It also explains the significance of the theft of Goldman Sachs computer code used to power its trading juggernaut: see The Man Accused of Stealing Goldman's Code.

A second thread has to do with the destruction of value (as opposed to wealth), to wit the cash-for-clunkers program and the subsequent destruction of functioning automobiles to take them permanently off of the market (as automobiles, some value persists as scrap, see a YouTube video Cash for Clunkers: How to destroy an engine for instructions on how you can do this at home -- kids, ask your parents first! The video is sad in a way, and pornographic in the worst sense of the word). And the destruction of the tart cherry crop in Michigan (Bumper Cherry Crop Turns Sour: Tons of Unharvested Fruit Rots Under Government Program to Keep Prices Stable).

jd

Wednesday, April 08, 2009

Facebook and six degrees of separation

Facebook seems like a rich and obvious testbed for the six-degrees theory. And lo and behold, someone developed a facebook application to determine degrees of separation among facebook users -- see the wikipedia entry for more; and I have added a widget to this page.

I am fascinated right now (for how long who knows) by facebook. Mainly because all of a sudden, various social networks that I have been part of in my peripatetic life are present, and in the present. It's like time has been flattened, rendered 2-d and it's all now. It's as if the various boxes that I have kept different networks of friends in, mainly sorted by time (and where I lived), which also maps to some extent to varied interests, have all been up-ended and they are all flowing together. It also makes for a kind of Wonderful Life moment, because there are a lot of relationships there, with most of the bridges intact or only slightly charred.

Facebook also makes the theory much more, well, present and experienced -- like the difference between seeing a picture of the Golden Gate bridge and seeing the bridge itself. I can feel the various overlapping networks.

I have just installed the facebook Six Degrees app, and I need to play around with it.

Of course, the criticisms of the six-degrees theory (see previous posts) all hold -- in this case, the universe of facebook users is a pretty strong filter. The network of social networks definitely reflects the class and power and other social structures of humanity -- but doesn't that make the theory that much more interesting? Where do social networks jump the class line or the color line or the national line? And those borders are not so hard and fast as before, and weakening all the time as new communication tools (and transportation, although that's old news now?) erode the walls. How the barriers, especially the color and national one, are becoming more and more permeable ("Yes we can!") would be an interesting phenom to map. So not just six-degrees now, but how the degrees are changing over time. The wikipedia entry says that maximum degree of separation is 12 (the average is just under six) -- presumably that maximum will decline over time as the facebook universe expands (or the world gets smaller and flatter as new communication technologies and labor migration and mobility spread).

jd

Monday, April 06, 2009

A test

More on my social networking adventure -- I am trying to figure out some general rules for having my entries on this blog show up on my facebook page. The problem is that (a) the feedback loop is fairly long (how often the facebook apps sweep the RSS feed) and (b) not too well documented and (c) I am not being very scientific about my independent variables and controls -- I get too impatient.

jd

New models

Two articles in yesterday's New York Times highlight some of the changes in the structure of the economy that the evolving Internet makes possible.

One article describes the challenge of online apps (in this case, Zoho) to mega-desktop suites like Microsoft Office. Now apps like Zoho's Writer (which I haven't used) and Google Docs (which I used quite a bit, especially the spreadsheet) are good enough to pose a real alternative to desktop bloats like Word. I remember, maybe 15 years ago, the discussion between centralized apps vs distributed apps (i.e. desktop apps). At the time, Bill Gates defended desktop apps in almost libertarian language -- you controlled your app on your own machine.

Today, I suppose the question of control is still real, and one of the real criticisms of online apps revolves around trust and risk -- can you trust Google, or AdventNet (the makers and hosters of Zoho)? What is they start charging? (Possible?) Are they better about backups etc.? (Probably) What about snoops, government or otherwise? (Who knows?) Could they block access to my documents in the event of some dispute? (Maybe? There's probably something in the terms of agreement I clicked through). All valid questions. The question of trust is a big one, across the Internet (and the economy, and life, too).

What's different in the debate now, I think, is the element of mobility and multiple devices. For example, I have a computer at home, one at work, and a handheld, as well as a couple of other systems I sometimes use, running four different OSs. Having access (not just to read but to manipulate too) to any of my documents from any device is a big deal. And so the convenience factor of the online services starts to outweigh the perceived advantages of desktop apps. (Zoho provides an offline option which could overcome of the desktop advantages.)

I think I am digressing -- the point is that the speed of connections, the ubiquity of connections, the variety of devices, mobility all are shifting the center of gravity back to centralized (who remembers timesharing and terminals?), but this time highly connected systems, upsetting old models. Well nothing new, people have been talking about this for fifteen years and more. But maybe now it is really tipping.

The other article commented on the "iPhone gold rush." Some independent developers are doing quite well writing apps for the iPhone, and selling them through Apple's "app store" for prices starting at 99 cents and going up from there (there are also many free apps too, and many of them quite good, which is a whole other thing, that gift economy thing). With some 30 million iPhones and iPod Touchs out there, and the barrier to entry very low, it is a relatively easy business to get into. For $100 you can sign up with Apple's iPhone development program, you write your app, submit it to Apple, they list it on their app store, and return 70% of sales to you ("Just get yourself an electric guitar and learn how to play"). There is some other network phenomenon at play. Make the cost of attaching to the network low enough, and the cost of communicating with other nodes cheap enough, and interesting things will start to happen. Of course Apple does quite well in the process. It's main role is creating the sandbox for all of the developers to play in, and throwing more sand in the box -- the iPhone OS 3.0 will have a number of new features, including new money-making opportunities for developers in the form of subscription services and in-app upgrades and purchases. See the video of the developer announcement event for more.


jd

Sunday, April 05, 2009

Managing my social network tools

I suppose I am late to the game, but I have just recently been exploring some of the Web 2.0 social network tools -- RSS and Google Reader, some of the blogger widgets (mostly playing around with them on my worklife blog, Diigo, Twitter (I'm @jiidavis1), and even facebook. And I have an iPhone now, which adds a whole other dimension to the social networking challenge. The challenge I have been wrestling with is how to make it all work together -- after they are all on the same network. But they do need to be taught (? or rather instructed?) to work together. And there is a definite flow to information I pump into my little menagerie of Web 2.0 social networking machine. The ideal is that I write something once, or identify a link, or upload a picture, and it flows from there to the various fronts of my web presence or groups or communities or whatever.

My blogs are one of the headwaters, and twitterfeed is supposed to send those updates out to my Twitter (still not sure what the point of Twitters is). My worklife facebook is supposed to pick up my worklife blog updates; and my personal facebook is supposed to pick updates on this blog. My additions to Diigo should show up on my blogs (depending on how I tagged new links), and I can have Diigo send the links to Twitter also. Google Reader should be picking up Twitter, as well as the blog posts, but I can't tell yet if the Twitter RSS is working. My Picassa updates are supposed to show up on the work blog and work facebook. What a contraption.

I imagine this (or did someone imagine this for me, and I am recollecting it?) as accoutrements, constructing a shell or maybe armor or maybe a sensor array of my self. Marshall McLuhan -- technologies are extensions of our bodies...

jd

Sunday, March 01, 2009

Inside the Meltdown from Frontline

This is lifted from the always excellent Scout Report of February 27, 2009:

14. Frontline: Inside the Meltdown
http://www.pbs.org/wgbh/pages/frontline/meltdown/

The economic situation in the United States is on everyone's minds right
now, and this provocative and thoughtful look into how it all transpired is
offered as part of Frontline's regular programming. As with most Frontline
programs, visitors can watch the full program, and then go back to sections
like "Interviews", "Timeline", and "Analysis". The "Analysis" section is
particularly shrewd, and it contains interviews with key economic players
and policy types including Barney Frank, Sheila Blair, and Chris Dodd.
Visitors can also view an interactive timeline of events related to the
meltdown and even chime in with their own thoughts via the "Join the
Discussion" area. [KMG]
I suppose I should have something to say about this. While the details of how it is playing out are specific, is there anything new in the general schema of all of it that hasn't been written already?

jd

Saturday, December 13, 2008

Two novellas from Owen Barfield

Owen Barfield was a remarkable thinker. Two of his fiction pieces have just been re-published in book form. Here's text from an email I received.

Eager Spring (written in 1989) It is OB's last work, an 'eco-novella', very insightful and topical. Most of the book is set in contemporary times, but the final third of this book is a myth-allegory of a young woman and a troubadour who confronts the environmentally damaging hazard of industrialism in Iron Age Britain.

Night Operation (written in 1975) This short book is absolute dynamite - a totally different genre - sci-fi. A great story, quite hard hitting. But, as the introduction explains, it also throws light on OB's friendship with CSL.

Please see the Literary Estate's website for plot overviews and links:

www.owenbarfield.org

(end)

Many of Barfield's non-fiction books (for which he is much better known), long out-of-print, have also been re-printed by The Barfield Press.

jd

Saturday, February 16, 2008

Six Degrees of Separation

Science Friday did an interesting program on January 25, 2008 on the validity of the "six degrees of separation" idea put forth by Stanley Milgram in the 1960s. The program features skeptic Judith Kleinfeld and Steven Strogatz (author of Sync. The story was prompted by Discover magazine's story, If Osama's Only 6 Degrees Away, Why Can't We Find Him?". Kleinfeld is more interested in the human, anthropological dimension -- why do people sieze on the theory? Why do people want to believe the theory? Strogatz does an admirable job defending the math and the theory. Kleinfeld is good about reminding us that real world networks have certain constraints or laws or conventions that they obey, and when we are dealing w/ social connections that there are historical or political dimensions that we should be cognizant of.

The podcast of the program is available at http://www.sciencefriday.com/program/archives/200801256.

jd