Aug 13

That’s a Whale of a Fail!

Blame Excel:

Due to an error in an Excel spreadsheet used to model risk, JP Morgan seriously underestimated the downside of its synthetic credit portfolio, which ultimately led to the bank to declare $6 billion in losses and could lead to another $600 million in fines. As James Kwak explains on Baseline Scenario, the errors stemmed from a combination of copy-paste mistakes and a faulty equation created to crunch the numbers.

Via Quartz.

Oct 10

404 Privacy Not Found

The curious thing to me about the Facebook apps ‘leaking data’ story is not that’s its happening, but rather the low levels of digital literacy (or the fact that this has been happening for years) by the public:

Many of the most popular applications, or “apps,” on the social-networking site Facebook Inc. have been transmitting identifying information—in effect, providing access to people’s names and, in some cases, their friends’ names—to dozens of advertising and Internet tracking companies, a Wall Street Journal investigation has found.

The issue affects tens of millions of Facebook app users, including people who set their profiles to Facebook’s strictest privacy settings. The practice breaks Facebook’s rules, and renews questions about its ability to keep identifiable information about its users’ activities secure.

The difference in the past was that the cost of acquiring this data was substantial enough to make it not worth the effort.  The amount of data freely available and the decreased cost of computing power make it a trivial effort.  This is only going to become more prevalent as online providers look to monetize the sale of data.  The problem is that data is being used in ways that the average internet user cannot comprehend, and therefore cannot make an informed decision to opt-in or opt-out.

Continue reading →

Feb 10

Chapter 9 bankruptcies, municipalities, and the Oracle at Mountain View

I ran across a current article from the WSJ highlighting that some municipalities may need to contemplate Chapter 9 bankruptcies:

The economic slump, however, is forcing debt-laden cities, towns and smaller taxing districts throughout the U.S. to consider using Chapter 9. As their revenue declines faster than expenses, some public entities are scrambling to keep making payments on municipal bonds. And that is causing experts to worry about the safety of securities traditionally considered low risk.

Chapter 9 bankruptcy is seldom employed and generally unknown to most of the populace.   It provides very specific protections (from US Courts):

The purpose of chapter 9 is to provide a financially-distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished either by extending debt maturities, reducing the amount of principal or interest, or refinancing the debt by obtaining a new loan.

It  applies only to the following (again, from US Courts):

Only a “municipality” may file for relief under chapter 9. 11 U.S.C. § 109(c). The term “municipality” is defined in the Bankruptcy Code as a “political subdivision or public agency or instrumentality of a State.” 11 U.S.C. § 101(40). The definition is broad enough to include cities, counties, townships, school districts, and public improvement districts. It also includes revenue-producing bodies that provide services which are paid for by users rather than by general taxes, such as bridge authorities, highway authorities, and gas authorities.

Most states are experiencing revenue shortfalls, resulting on strain to state budgets.        States in turn are delaying or suspending funding to local municipalities, creating financial crisis on the local level.   Some municipalities have dabbled in the exotic financial instruments that are partly to blame for the Great Recession, and given the anti-incumbent environment and high unemployment, elected leaders would be hesitant to raise taxes.   On the first page of the search results for “Chapter 9 Bankruptcy  on Google News names Las Vegas, Harrisburg, and Sand Diego and Vallejo, California, but there are certainly others.

Google Trends Chapter 9

I’ve highlighted in the past how Google Trends “ a measure of the searching behavior of Google’s users “ can surface sentiment and intentions (previously, here and here).   Now, I’m not saying that the towns listed above are contemplating “Chapter 9   bankruptcy protection after defaulting on municipal bond payments or other financial crisis, but I am saying that enough users from those towns (and states) searched for “Chapter 9  for Google to reveal a significant trend (also note that there is insufficient volume to refine to that state level or for a more discrete time range).   Unless those users were searching for Chapter 9 of the latest Harry Potter book, this may very well mean something.

Jan 10

Daily Links for January 3rd through January 8th

All excerpts are quoted from the respective link(s).

  • Then vs. now: How prices have changed since 1999 – During the subsequent decade, the stock market made us rich as kings, then poor as church mice. We've taken a look back to see how the years have affected the price of 50 things we buy, or wish we could buy. Thanks to inflation, it takes around $1.30 to buy what $1 bought in 1999.
  • UNHsocialmedia.pdf (application/pdf Object) – The study found no correlation between heavy social media usage and grades. There was no
    significant difference in grades between those considered to be heavy users of social media and
    those considered to be light users. For example, 63 percent of heavy users received high
    grades, compared to 65 percent of light users. Researchers found similar results with lower
    grades. While 37 percent of heavy users of social media received what were defined as lower
    grades, 35 percent of light users received fell into that same category. There also was no
    correlation between grades and the social media platform used. For example, almost the same
    number of heavy and light users of both Facebook and YouTube received the same category of
    high and low grades.
  • How Social Media Has Changed Us – Over the last 10 years, we’ve seen social media galvanize thousands over politics, create as many industries as it has destroyed, and offer an abundance of visual and audio entertainment. But has all this incredible change actually changed us, or just the world we live in?
  • 100 Years of Consumer Spending | Visual Economics – A look at the changes in consumer spending habits over the last century.
  • The Big Picture » Blog Archive » Guide to 2010 Outlooks – THE ULTIMATE GUIDE TO 2010 INVESTMENT PREDICTIONS AND OUTLOOKS[.] We’ve compiled many of the very best outlooks from various analysts, gurus, hedge funds and investors. We hope you find the list helpful in mapping your successful 2010[.]
  • The Presentation Secrets of Steve Jobs
  • Social Media Glossary | The Social Media Guide

Dec 09

Daily Links for December 17th through December 20th

All excerpts are quoted from the respective link(s).

  • Track Visitor Engagement using Google Analytics! | Web Analytics Demystified – Keep in mind, what I’m describing in this post is not a full-blown measure of Visitor Engagement for a lot of reasons. Still, as I’m kicking it around it appears to be a pretty good start and per my entire approach towards measures of engagement, I’d rather have all of you banging on the idea than work in a vacuum.

    So how does it work?

  • Failed Banks – The Wall Street Journal Online – An infographic.
  • Newspapers and technology: Network effects | The Economist – CHANGE is in the air. A new communications technology threatens a dramatic upheaval in America’s newspaper industry, overturning the status quo and disrupting the business model that has served the industry for years. This “great revolution”, warns one editor, will mean that some publications “must submit to destiny, and go out of existence.” With many American papers declaring bankruptcy in the past few months, their readers and advertisers lured away by cheaper alternatives on the internet, this doom-laden prediction sounds familiar. But it was in fact made in May 1845, when the revolutionary technology of the day was not the internet—but the electric telegraph.
  • Facebook | Facebook Data Team: How Diverse is Facebook? – In this post we have outlined an approach to determine the racial and ethnic breakdown of a population based solely on people's surnames and data provided by the U.S. Census Bureau. We have found that while Facebook has always been diverse, this diversity has increased over time leading to a population that today looks very similar to the U.S. population.
  • What Does Farmville Mean for Farmers? – Borborygmi – GOOD – But Farmville’s farms don’t actually mirror reality. In Farmville, farmers can get high returns. Seeds mature at impossible rates. It’s a place without slaughtering. There’s little of the harsh reality that Americans value food only enough to spend 10 percent of their income on it. If you had any doubts, know that Farmville is complete fantasy.