I take the Economist into the bath with me on the weekend when I have time. It’s relaxing for whatever reason, even when it’s describing horrible things or when I disagree with it. I appreciate the Economist for at least discussing many of the issues I care about.
Last night I came across this book review, about the book “Money: The Unauthorised Biography” written by Felix Martin. It tells the story of an ad hoc currency system in Ireland popping up during a financial crisis more than 40 years ago. The moral of that story is supposed to be something about how banking should operate, but I was struck by this line in the review:
It helped that a lot of Irish life is lived locally: builders, greengrocers, mechanics and barmen all turned out to be dab hands at personal credit profiling.
It occurs to me that “living locally” is exactly what most people, at least in New York, don’t do at all.
At this point I’ve lived in my neighborhood near Columbia University for 8 years, which is long enough to know Bob, the guy at the hardware store who sells me air conditioners and spatulas. If our currency system froze and we needed to use IOU notes, I’m pretty sure Bob and I would be good.
But, even though I shop at Morty’s (Morton Williams) regularly, the turnover there is high enough that I have never connected with anyone working there. I’m shit out of luck for food, in other words, in the case of a currency freeze.
Bear with me for one more minute. When I read articles like this one, which is called Pay People to Cook at Home – in which the author proposes a government program that will pay young parents to stay home and cook healthy food – it makes me think two things.
First, that people sometimes get confused between what could or should happen and what might actually happen, mostly because they don’t think about power and who has it and what their best interests are. I’m not holding my breath for this government program, in other words, even though I think there’s definitely a link between a hostile food environment and bad health among our nation’s youth.
Second, that in some sense we traditionally had pretty good solutions to child care and home cooking, namely we lived together with our families and not everyone had a job, so someone was usually on hand to cook and watch the kids. It’s a natural enough arrangement, which we’ve chucked in favor of a cosmopolitan existence.
And when I say “natural”, I don’t mean “appealing”: my mom has a full-time job as a CS professor in Boston and is not interested in staying home and cooking. Nor am I, for that matter.
In other words, we’ve traded away localness for something else, which I’m personally benefitting from, but there are other direct cultural effects which aren’t always so awesome. Our dependency on international banking and credit scores and having very little time to cook for our kids are a few examples.
It’s Sunday, which for me is a day of whimsical smoke-blowing. To mark the day, I think I’ll assume a position about something I know very little about, namely real estate. Feel free to educate me if I’m saying something inaccurate!
There has been a flurry of recent articles warning us that we might be entering a new housing bubble, for example this Bloomberg article. But if you look closely, the examples they describe seem cherry picked:
An open house for a five-bedroom brownstone in Brooklyn, New York, priced at $949,000 drew 300 visitors and brought in 50 offers. Three thousand miles away in Menlo Park, California, a one-story home listed for $2 million got six offers last month, including four from builders planning to tear it down to construct a bigger house. In south Florida, ground zero for the last building boom and bust, 3,300 new condominium units are under way, the most since 2007.
They mention later that Boston hasn’t risen so high as the others hot cities recently, but if you compare Boston to, say, Detroit on this useful Case-Schiller city graph, you’ll note that Boston never really went that far down in the first place.
When I read this kind of article, I can’t help but wonder how much of the signal they are seeing is explained by income inequality, combined with the increasing segregation of rich people in certain cities. New York City and Menlo Park are great examples of places where super rich people live, or want to live, and it’s well known that those buyers have totally recovered from the recession (see for example this article).
And it’s not even just American rich people investing in these cities. Judging from articles like this one in the New York Times, we’re now building luxury sky-scrapers just to attract rich Russians. The fatness of this real estate tail is extraordinary, and it makes me think that when we talk about real estate recoveries we should have different metrics than simply “average sell price”. We need to adjust our metrics to reflect the nature of the bifurcated market.
Now it’s also true that other cities, like Phoenix and Las Vegas are also gaining in the market. Many of the houses in these unsexier areas are being gobbled up by private equity firms investing in rental property. This is a huge part of the market right now in those places, and they buy whole swaths of houses at once. Note we’re not hearing about open houses with 300 buyers there.
Besides considering the scary consequences of a bunch of enormous profit-seeking management companies controlling our nation’s housing, and changing the terms of the rental agreements, I’ll just point out that these guys probably aren’t going to build too large a bubble, since their end-feeder is the renter, the average person who has a very limited income and ability to pay, unlike the Russians. On the other hand, they probably don’t know what they’re doing, so my error bars are large.
I’m not saying we don’t have a bubble, because I’d have to do a bunch of reckoning with actual numbers to understand stuff more. I’m just saying articles like the Bloomberg one don’t convince me of anything besides the fact that very rich people all want to live in the same place.
Aunt Pythia is yet again gratified to find a few new questions in her inbox this morning. Sad to say, today’s column really has nothing to do with sex, but I hope you’ll enjoy it anyway. And don’t forget:
I’m an academic in a pickle. How do I deal with papers that are years old, that I’m sick of, but that I need to get off my slate and how do I prevent this from happening again? I always want to do the work for the first 75% of the paper and then I get bored. But then I’m left with a pile of papers which, with a biiiit more work, they could be done.
Not Yet Tenured
One thing they never teach you in grad school is how to manage projects, mostly because you only have one project in grad school, which is to learn everything the first two years then do something magical and new the second two years. Even though that plan isn’t what ends up happening, it’s always in the back of your mind. In particular you only really need to focus on one thing, your thesis.
But when you get out into the real world, things change. You have options, and these option make a difference to your career and your happiness (actually your thesis work makes a difference to those things too but again, in grad school you don’t have many options).
You need a process, my friend! You need a way of managing your options. Think about this from the end backwards: after you’re done you want a prioritized list of your projects, which is a way more positive way to deal with things than letting them make you feel guilty or thinking about which ones you can drop without deeper analysis.
Here’s my suggestion, which I’ve done and it honestly helps. Namely, start a spreadsheet of your projects, with a bunch of tailored-to-you columns. Note to non-academics: this works equally well with non-academic projects.
So the first column will be the name of the project, then the year you started it, and then maybe the amount of work til completion, and then maybe the probability of success, and then how much you will like it when it’s done, and then how good it will be for your career, and then how good it will be for other non-career reasons. You can add other columns that are pertinent to your decision. Be sure to include a column that measures how much you actually feel like working on it, which is distinct from how much you’ll like it when it’s done.
All your columns entries should be numbers so we can later make weighted averages. And they should all go up when they get “better”, except time til completion, which goes down when it gets better. And if you have a way to measure one project, be sure to measure all the projects by that metric, even if they mostly score a neutral. So if one project is good for the environment, every project gets an “environment” score.
Next, decide which columns need the most attention – prioritize or weight the attributes instead of the projects for now. This probably means you put lots of weight on the “time til completion” combined with “value towards tenure” for now, especially if you’re running out of time for tenure. How you do this will depend on what resources you have in abundance and what you’re running low on. You might have tenure, and time, and you might be sick of only doing things that are good for your career but that don’t save the environment, in which case your weights on the columns will be totally different.
Finally, take some kind of weighted average of each project’s non-time attributes to get that project’s abstract attractiveness score, and then do something like divide that score by the amount of time til completion or the square root of the time to completion to get an overall “I should really do this” score. If you have two really attractive projects, each scoring 8 on the abstract attractiveness score, and one of them will take 2 weeks to do and the other 4 weeks, then the 2-week guy gets an “I should really do this” of 4, which wins over the other project with an “I should really do this” score of 2.
Actually you probably don’t have to do the math perfectly, or even explicitly. The point is you develop in your head ways by which to measure your own desire to do your projects, as well as how important those projects are to you in external ways. By the end of your exercise you’ll know a bunch more about your projects. You also might do this and disagree with the results. That usually means there’s an attribute you ignored, which you should now add. It’s probably the “how much I feel like doing this” column.
You might not have a perfect system, but you’ll be able to triage into “put onto my calendar now”, “hope to get to”, and “I’ll never finish this, and now I know why”.
Final step: put some stuff onto your calendar in the first category, along with a note to yourself to redo the analysis in a month or two when new projects have come along and you’ve gotten some of this stuff knocked off.
Dear Aunt Pythia,
I am a freshly minted data scientist working in the banking industry. My company doesn’t seem they know what to do with me. Although they are a ginormous company, I am currently their sole “official” data scientist. They are just now developing their ability to work with Big Data, and are far from the capability to work with unstructured, nontraditional data sources. There are, apparently, grand (but vague) plans in the future for me and a future DS team. So far, however, they’ve put me in a predictive analytics group. and have me developing fairly mundane marketing models. They are excited about faster, in-database processes and working with larger (but still structured) data sets, but their philosophy seems to still be very traditional. They want more of the same, but faster. It doesn’t seem like they have a good idea of what data science can bring to the table. And with few resources, fellow data scientists, or much experience in the field (I came from academia), I’m having a hard time distinguishing myself and my work from what their analytics group has been doing for years. How can I make this distinction? And with few resources, what general things can I be doing now to shape the future of data science at my company?
Newly Entrenched With Bankers
First, I appreciate your fake name.
Second, there’s no way you can do your job right now short of becoming a data engineer yourself and starting to hit the unstructured data with mapreduce jobs. That would be hardcore, by the way.
Third, my guess is they hired you either so they could say they had a data scientist, so pure marketing spin, which is 90% likely, or because they really plan on getting a whole team to do data science right, which I put at 1%. The remaining 9% is that they had no idea why they hired you, someone just told them to do it or something.
My advice is to put together a document for them explaining the resources you’d need to actually do something beyond the standard analytics team. Be sure to explain what and why you need those things, including other team members. Be sure and include some promises of what you’d be able to accomplish if you had those things.
Then, before handing over that document, decide whether to deliver it with a threat that you’ll leave the job unless they give you the resources in a reasonable amount of time or not. Chances are you’d have to leave, because chances are they don’t do it.
Please submit your question to Aunt Pythia!
The Dow is at an all-time high. Here’s the past 12 months:
Once upon a time it might have meant something good, in a kind of “rising tide lifts all boats” sort of way. Nowadays not so much.
Of course, if you have a 401K you’ll probably be a bit happier than you were 4 years ago. Or if you’re an investor with money in the game.
On the other hand, not many people have 401K plans, and not many who do don’t have a lot of money in them, partly because one in four people have needed to dip into their savings lately in spite of the huge fees they were slapped with for doing so. Go watch the recent Frontline episode about 401Ks to learn more about this scammy industry.
Let’s face it, the Dow is so high not because the economy is great, or even because it is projected to be great soon. It’s mostly inflated out of a combination of easy Fed money for banks, which translates to easy money for people who are already rich, and the fact that world-wide investors are afraid of Europe and are parking their money in the U.S. until the Euro problem gets solved.
In other words, that money is going to go away if people decide Europe looks stable, or if the Fed decides to raise interest rates. The latter might happen when the economy (or rather, if the economy) looks better, so putting that together we’re talking about a possible negative stock market response to a positive economic outlook.
The stock market has officially become decoupled from our nation’s future.
I was surprised and somewhat disappointed yesterday when I found this article about Star Trek in Slate, written by Matt Yglesias. He, like me, has recently been binging on Star Trek and has decided to explain “why Star Trek is great” – also my long-term plan. He stole my idea!
My disappointment turned to amazement and glee, however, when I realized that the episode he began his column with was the exact episode I’d just finished watching about 5 minutes before I’d found his article. What are the chances??
It must be fate. Me and Matt are forever linked, even if he doesn’t care (I’m pretty sure he cares though, Trekkies are bonded like that). Plus, I figured, now that he’s written a Star Trek post, I’ll do so as well and we can act like it’s totally normal. Where’s your Star Trek post?
Here’s his opening paragraph:
In the second episode of the seventh season of the fourth Star Trek television series, Icheb, an alien teenage civilian who’s been living aboard a Federation vessel for several months after having been rescued from both the Borg and abusive parents, issues a plaintive cry: “Isn’t that what people on this ship do? They help each other?”
That’s the thing about Star Trek. It’s utopian. There’s no money, partly because they have ways to make food and objects materialize on a whim. There’s no financial system of any kind that I’ve noticed, although there’s plenty of barter, mostly dealing in natural resources. And the crucial resource that characters are constantly seeking, that somehow make the ships fly through space, are called dilithium crystals. They’re rare but they also seem to be lying around on uninhabited planets, at least for now.
But it’s not my religion just because they’ve somehow evolved past too-big-to-fail banks. It’s that they have ethics, and those ethics are collaborative, and moreover are more basic and more important than the power of technology: the moral decisions that they are confronted with and that they make are, in fact, what Star Trek is about.
Each episode can be seen as a story from a nerd bible. Can machines have a soul? Do we care less about those souls than human (or Vulcan) souls? If we come across a civilization that seems to vitally need our wisdom or technology, when do we share it? And what are the consequences for them when we do or don’t?
In Star Trek, technology is not an unalloyed good: it’s morally neutral, and it could do evil or good, depending on the context. Or rather, people could do evil or good with it. This responsibility is not lost in some obfuscated surreality.
My sons and I have a game we play when we watch Star Trek, which we do pretty much any night we can, after all the homework is done and before bed-time. It’s kind of a “spot that issue” riddle, where we decide which progressive message is being sent to us through the lens of an alien civilization’s struggles and interactions with Captain Picard or Janeway.
Overcoming our natural tendencies to hoard resources!
Some kids go to church, my kids watch Star Trek with me. I’m planning to do a second round when my 4-year-old turns 10. Maybe Deep Space 9. And yes, I know that “true scifi fans” don’t like Star Trek. My father, brother, and husband are all scifi fans, and none of them like Star Trek. I kind of know why, and it’s why I’m making my kids watch it with me before they get all judgy.
One complaint I’ve considered having about Star Trek is that there’s no road map to get there. After all, how are people convinced to go from a system in which we don’t share resources to one where we do? How do we get to the point where everyone’s fed and clothed and can concentrate on their natural curiosity and desire to explore? Where everyone gets a good education? How can we expect alien races to collaborate with us when we can’t even get along with people who disagree about taxation and the purpose of government?
I’ve gotten over it though, by thinking about it as an aspirational exercise. Not everything has to be pragmatic. And it probably helps to have goals that we can’t quite imagine reaching.
For those of you who are with me, and love everything about the Star Trek franchise, please consider joining me soon for the new Star Trek movie that’s coming out today. Showtimes in NYC are here. See you soon!
An article in yesterday’s Science Times explained that limiting the salt in your diet doesn’t actually improve health, and could in fact be bad for you. That’s a huge turn-around for a public health rule that has run very deep.
How can this kind of thing happen?
Well, first of all epidemiologists use crazy models to make predictions on things, and in this case what happened was they saw a correlation between high blood pressure and high salt intake, and they saw a separate correlation between high blood pressure and death, and so they linked the two.
Trouble is, while very low salt intake might lower blood pressure a little bit, it also for what ever reason makes people die a wee bit more often.
As this Scientific American article explains, that “little bit” is actually really small:
Over the long-term, low-salt diets, compared to normal diets, decreased systolic blood pressure (the top number in the blood pressure ratio) in healthy people by 1.1 millimeters of mercury (mmHg) and diastolic blood pressure (the bottom number) by 0.6 mmHg. That is like going from 120/80 to 119/79. The review concluded that “intensive interventions, unsuited to primary care or population prevention programs, provide only minimal reductions in blood pressure during long-term trials.” A 2003 Cochrane review of 57 shorter-term trials similarly concluded that “there is little evidence for long-term benefit from reducing salt intake.”
Moreover, some people react to changing their salt intake with higher, and some with lower blood pressure. Turns out it’s complicated.
I’m a skeptic, especially when it comes to epidemiology. None of this surprises me, and I don’t think it’s the last bombshell we’ll be hearing. But this meta-analysis also might have flaws, so hold your breath for the next pronouncement.
One last thing – they keep saying that it’s too expensive to do this kind of study right, but I’m thinking that by now they might realize the real cost of not doing it right is a loss of the public’s trust in medical research.
I’ve discussed the broken business model that is the credit rating agency system in this country on a few occasions. It directly contributed to the opacity and fraud in the MBS market and to the ensuing financial crisis, for example. And in this post and then this one, I suggest that someone should start an open source version of credit rating agencies. Here’s my explanation:
The system of credit ratings undermines the trust of even the most fervently pro-business entrepreneur out there. The models are knowingly games by both sides, and it’s clearly both corrupt and important. It’s also a bipartisan issue: Republicans and Democrats alike should want transparency when it comes to modeling downgrades- at the very least so they can argue against the results in a factual way. There’s no reason I can see why there shouldn’t be broad support for a rule to force the ratings agencies to make their models publicly available. In other words, this isn’t a political game that would score points for one side or the other.
Well, it wasn’t long before Marc Joffe, who had started an open source credit rating agency, contacted me and came to my Occupy group to explain his plan, which I blogged about here. That was almost a year ago.
Today the SEC is going to have something they’re calling a Credit Ratings Roundtable. This is in response to an amendment that Senator Al Franken put on Dodd-Frank which requires the SEC to examine the credit rating industry. From their webpage description of the event:
The roundtable will consist of three panels:
- The first panel will discuss the potential creation of a credit rating assignment system for asset-backed securities.
- The second panel will discuss the effectiveness of the SEC’s current system to encourage unsolicited ratings of asset-backed securities.
- The third panel will discuss other alternatives to the current issuer-pay business model in which the issuer selects and pays the firm it wants to provide credit ratings for its securities.
Marc is going to be one of something like 9 people in the third panel. He wrote this op-ed piece about his goal for the panel, a key excerpt being the following:
Section 939A of the Dodd-Frank Act requires regulatory agencies to replace references to NRSRO ratings in their regulations with alternative standards of credit-worthiness. I suggest that the output of a certified, open source credit model be included in regulations as a standard of credit-worthiness.
Just to be clear: the current problem is that not only is there wide-spread gaming, but there’s also a near monopoly by the “big three” credit rating agencies, and for whatever reason that monopoly status has been incredibly well protected by the SEC. They don’t grant “NRSRO” status to credit rating agencies unless the given agency can produce something like 10 letters from clients who will vouch for them providing credit ratings for at least 3 years. You can see why this is a hard business to break into.
The Roundtable was covered yesterday in the Wall Street Journal as well: Ratings Firms Steer Clear of an Overhaul - an unfortunate title if you are trying to be optimistic about the event today. From the WSJ article:
Mr. Franken’s amendment requires the SEC to create a board that would assign a rating firm to evaluate structured-finance deals or come up with another option to eliminate conflicts.
While lawsuits filed against S&P in February by the U.S. government and more than a dozen states refocused unflattering attention on the bond-rating industry, efforts to upend its reliance on issuers have languished, partly because of a lack of consensus on what to do.
I’m just kind of amazed that, given how dirty and obviously broken this industry is, we can’t do better than this. SEC, please start doing your job. How could allowing an open-source credit rating agency hurt our country? How could it make things worse?