Month: August 2013

How Much is the White House Worth?

readingbyeugene 1 Comment

Zillow has published one of its Zestimates, claiming that the White House, a 16-bedroom, 35-bathroom single-family home located at 1600 Pennsylvania Avenue would be worth about $319 million on the open market.

The White House isn’t for sale, but Matthew Yglesias did a bit of research and found the price at odds:

This turns out to be rather substantially at odds with the Washington, D.C., Office of Tax and Revenue’s take on the matter. Assessor Folu Addy’s take on the property is that it’s a commercial building worth almost $1 billion. The difference seems to largely come down a different assessment of the land involved. Washington views parcel 0187S 0800 as a quite expansive area whose land alone is worth $963,825,340. The physical structures are valued at a mere $31,174,660.

Hmm.

Jeff Bezos Purchases The Washington Post

readingbyeugene Leave a comment

Wow. Talk about a changing market in journalism. The huge news today is that Jeff Bezos, founder of Amazon.com, is plunking $250 million in cash to buy The Washington Post. Here is more:

Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.

Seattle-based Amazon will have no role in the purchase; Bezos himself will buy the news organization and become its sole owner when the sale is completed, probably within 60 days. The Post Co. will change to a new, still-undecided name and continue as a publicly traded company without The Post thereafter.

…

The sale to Bezos involves The Post and its website (washingtonpost.com), along with the Express newspaper, the Gazette Newspapers and Southern Maryland Newspapers in suburban Washington, the Fairfax County Times, the Spanish-language El Tiempo Latino newspaper, and the Robinson Terminal production plant in Springfield. Bezos will also purchase the Comprint printing operation in Gaithersburg, which publishes several military publications.

The deal does not include the company’s headquarters on 15th St. NW in Washington (the building has been for sale since February), or Foreign Policy magazine, Slate.com, the Root.com, the WaPo Labs digital-development operation or Post-owned land along the Potomac River in Alexandria.

Bezos’s purchase is a great addition to the history of The Washington Post:

The Post, founded in 1877, has been controlled since 1933 by the heirs of Eugene Meyer, a Wall Street financier and former Federal Reserve official. Meyer bought the paper for $825,000 at a bankruptcy auction during the depth of the Depression.

After years of financial struggle, Meyer and his successor as publisher of The Post, son-in-law Philip L. Graham, steered the paper into a leading position among Washington’s morning newspapers. They began enlarging the company, notably by acquiring TV stations and Newsweek magazine in 1963 (the company sold the magazine for a nominal fee to the late billionaire Sidney Harman in 2010 after years of losses). In later years, the company added cable TV systems and the Kaplan educational division, currently the company’s largest by revenue.

UPDATE (8/5/13):

Here is Jeff Bezos’s letter to The Washington Post employees, in which he alludes to the changing nature of journalism and what’s to come for the paper:

There will of course be change at The Post over the coming years. That’s essential and would have happened with or without new ownership. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there. I’m excited and optimistic about the opportunity for invention.

Brief Thoughts on Punctuality

readingbyeugene 1 Comment

I agree with Max Strom’s piece on punctuality; he argues that running late is not a time management issue, but rather a life span management and commitment integrity issue. Briefly,

Here are some of the common excuses and myths for running late:

  • I don’t want to interrupt the flow of what is going on, such as a great conversation.
  • I can’t stand arriving early and having nothing to do.
  • I don’t remember to plan out how much time it actually takes me to get somewhere.
  • People really don’t mind so much if I’m late. The only people who mind are people with control issues; so it’s their problem, not mine.
  • I am very spiritual and am concerned with higher things.

What you may be unaware of:

  • You have probably lost friends over this issue and are not aware of it because they did not tell you.
  • You have definitely lost business because of it.
  • Most people resent and are offended by being kept waiting. They feel like you do not respect or care about them. Or it makes them not trust you.
  • People feel that if you are unreliable in this way, you are unreliable in other ways.
  • If you cause your spouse to be late with you on a regular basis, your husband or wife will probably feel that you are not only disrespectful of him or her by running late but you are also embarrassing your spouse by causing him or her to be late as well. This syndrome can be a source of great irritation to an otherwise compatible relationship.
  • You may have a fear of success, and running late is a form of self-sabotage.

He explains:

In my case, my habit of running late was a form of self-sabotage as it caused me to suffer as well as inconvenience those waiting for me. But for some people the cause of this issue is different. I know someone, for example, who is chronically late, but it causes no stress in her whatsoever. Running late may be a passive-aggressive way of controlling those around you. But whatever the cause of your lateness, there is always damage done to others and to yourself. I have noticed that with only a few exceptions, it is the most successful and busiest business people I know who are almost always the first to arrive to my workshops. In other words, those with the busiest, most complex, and high-pressure careers, who have the best excuses for running late, understand the value of promptness and live by it.

It is a pet peeve of mine when people run late. What I try to do is covered by one of Max’s advice bullets: factor in all the time that won’t make you late and then add twenty to thirty minutes to get there earlier. Bring a book, laptop, or whatever else and arrive EARLY. This framework has worked for me for most of my life.

Highly recommend reading in its entirety.

Did Goldman Sachs Overstep in Criminally Charging Its Ex-Programmer?

readingbyeugene Leave a comment

Michael Lewis’s latest piece for Vanity Fair is an 11,000 examination of how Goldman Sachs acted after finding that one of its ex-programmers, Sergey Aleynikov, allegedly stole computer code. There was a federal trial, and the 41-year-old father of three was sentenced to eight years in federal prison. Investigating Aleynikov’s case, Michael Lewis holds a second trial. The entire piece is worth reading, especially the interviews with Aleynikov in which he presents his views on life (quoted at the bottom in this post).

First, this was an interesting anecdote on why Russians are the best programmers on Wall Street:

He’d been surprised to find that in at least one way he fit in: more than half the programmers at Goldman were Russians. Russians had a reputation for being the best programmers on Wall Street, and Serge thought he knew why: they had been forced to learn programming without the luxury of endless computer time. “In Russia, time on the computer was measured in minutes,” he says. “When you write a program, you are given a tiny time slot to make it work. Consequently we learned to write the code in a way that minimized the amount of debugging. And so you had to think about it a lot before you committed it to paper. . . . The ready availability of computer time creates this mode of working where you just have an idea and type it and maybe erase it 10 times. Good Russian programmers, they tend to have had that one experience at some time in the past: the experience of limited access to computer time.”

A new rule created by the SEC in 2007 called Regulation NMS led to the proliferation of high frequency trading (HFTs):

For reasons not entirely obvious (yet another question for another day), the new rule stimulated a huge amount of stock-market trading. Much of the new volume was generated not by old-fashioned investors but by extremely fast computers controlled by high-frequency-trading firms, like Getco and Citadel and D. E. Shaw and Renaissance Capital, and the high-frequency-trading divisions of big Wall Street firms, especially Goldman Sachs. Essentially, the more places there were to trade stocks, the greater the opportunity there was for high-frequency traders to interpose themselves between buyers on one exchange and sellers on another. This was perverse. The initial promise of computer technology was to remove the intermediary from the financial market, or at least reduce the amount he could scalp from that market. The reality has turned out to be a boom in financial intermediation and an estimated take for Wall Street of somewhere between $10 and $20 billion a year, depending on whose estimates you wish to believe.

Goldman decided to hire Serge Aleynikov to beef up their algorithms to compete with the likes of big hedge funds like Citadel:

A lot of the moneymaking strategies were of the winner-take-all variety. When every player is trying to buy Pepsi after Coke’s stock has popped, the player whose computers can take in data and spit out the obvious response to it first gets all the money. In the various races being run, Goldman was seldom first. That is why they had sought out Serge Aleynikov: to improve the speed of their system.

The article explains how Goldman is a money-making machine, but the appearance of black swan events led many Wall Street firms to lose millions of dollars at the height of the financial crisis, Goldman included:

Day after volatile day in September 2008, Goldman’s supposedly brilliant traders were losing tens of millions of dollars. “All of the expectations didn’t work,” recalls Serge. “They thought they controlled the market, but it was an illusion. Everyone would come into work and were blown away by the fact that they couldn’t control anything at all. . . . Finance is a gambling game for people who enjoy gambling.”

This was probably the most damning paragraph in the piece about Goldman’s relationship with open source software:

But most of his time was spent simply patching the old code. To do this he and the other Goldman programmers resorted, every day, to open-source software, available free to anyone for any purpose. The tools and components they used were not specifically designed for financial markets, but they could be adapted to repair Goldman’s plumbing.

Serge quickly discovered, to his surprise, that Goldman had a one-way relationship with open source. They took huge amounts of free software off the Web, but they did not return it after he had modified it, even when his modifications were very slight and of general rather than financial use. “Once I took some open-source components, repackaged them to come up with a component that was not even used at Goldman Sachs,” he says. “It was basically a way to make two computers look like one, so if one went down the other could jump in and perform the task.” 

On the individualistic (selfish) nature of competition at Goldman, even when efforts were collaborative in nature:

It made no sense to him the way people were paid individually for achievements that were essentially collective. “It was quite competitive. Everyone’s trying to show how good their individual contribution to the team is. Because the team doesn’t get the bonus, the individual does.”

And then we get to the meat of the piece, where Michael Lewis invites people in the HFT industry to come up with their own verdict of whether Serge Aleynikov did something nefarious and/or illegal:

Our system of justice was a poor tool for digging out a rich truth. What was really needed, it seemed to me, was for Serge Aleynikov to be forced to explain what he had done, and why, to people able to understand the explanation and judge it. Goldman Sachs had never asked him to explain himself, and the F.B.I. had not sought help from someone who actually knew anything at all about computers or the high-frequency-trading business. And so over two nights, in a private room of a Wall Street restaurant, I convened a kind of second trial. To serve as both jury and prosecution, I invited half a dozen people intimately familiar with Goldman Sachs, high-frequency trading, and computer programming.

You have to read the piece for the conclusion. As one of the jurors assembled by Michael Lewis says: it was nauseating how Sergey was treated.

One last bit in the informal jury process that caught my attention was Serge’s demeanor and approach to life. Take things as they come; negativity is pointless:

At one point one of the people at the table stopped the conversation about computer code and asked, “Why aren’t you angry?” Serge just smiled back at him. “No, really,” said the other. “How do you stay so calm? I’d be fucking going crazy.” Serge smiled again. “But what does craziness give you?” he said. “What does negative demeanor give you as a person? It doesn’t give you anything. You know that something happened. Your life happened to go in that particular route. If you know that you’re innocent, know it. But at the same time, you know you are in trouble and this is how it’s going to be.” To which he added, “To some extent I’m glad this happened to me. I think it strengthened my understanding of what living is all about.”

What are your thoughts?

###

There’s a very interesting addendum in Vanity Fair in which Michael Lewis is interviewed about his piece. Here, he shares his personal thoughts on Sergey’s time in prison:

Q: For the past 200, 250 years, prison has been an essential part of the Russian experience. Like Dostoyevsky and other Russian authors, and their heroes, Serge found some sense of purpose in his incarceration. Do you think an American could have come away from the experience with that same perspective?

[Michael Lewis]: In the 1950s, European filmmakers, when their films were going to be made for both a Russian and American audience, would change the ending. They would make a happy ending for the American audience and a tragic one for the Russian audience. There’s a photographer named Tacita Dean who has done a series of photographs called “Russian Endings” where she has played on this. I would say that in some ways, there’s something in the water in Russia that enables you to derive a kind of pleasure from a tragic experience. That is not in the water in America. A kind of richness from a tragic experience. And whatever chemical is in the water, Serge drank plenty of it. He is very persuasive on the subject that this was not an all-together bad experience for him. It woke him up to many aspects of life that he had previously been asleep to. I believe him. I don’t think it’s just superficial rationalizing.

When you’re with him, it’s shocking how without anger or bitterness he is. You would never guess, at the dinners I had, that he was one who spent time in jail. You would have picked every other person there.

Also worth highlighting is financial blogger Felix Salmon on his reaction to Lewis’s piece:

I’m increasingly coming to the conclusion that America’s system of jurisprudence simply isn’t up to the task of holding banks and bankers accountable for their actions. The only people who ever get prosecuted are small fry and insider traders, rather than the people who really caused the biggest damage. And the lesson of Sergei Aleynikov is that if and when the laws get beefed up, the banks will simply end up taking advantage of those laws for their own vindictive purposes, rather than becoming victims of them. Given the ease with which Goldman got the FBI to do its bidding, one has to assume that, most of the time, the government will be working on the same side as the big banks, rather than working against them. Do we really want to give those banks ever more powerful weapons?

A Way to Frame Questions

readingbyeugene 1 Comment

Robin Hanson considers that if you want to probe someone’s intellectual endeavors/pursuits, you should frame a question you ask them a certain way:

I know many folks who consider themselves intellectuals. I guess they think that in part because if you asked them “What have you been up to lately?,” they’d tell you about books, articles, blogs, or twitter feeds that they’ve been reading. Or perhaps TED talks they’ve watched. This is why I prefer the question “What have you been thinking about lately?” And I’ll usually be a bit disappointed if the answer isn’t about a question they’ve been trying to answer.

Yes perhaps if they just mention a topic, that really stands for some questions about that topic. But often people thinking about a topic are mostly trying to find more supporting evidence for things they already believe. Less often are they taking what I consider the most productive intellectual strategy: focus on an important question where you don’t know the answer.

Indeed, “Once you start to think about a question, you’ll probably soon start to break it down into supporting sub-questions.”

So, what have you been thinking about lately?

###

(hat tip: Ben Casnocha)

The South Korean Teacher Who Makes $4 Million Per Year

readingbyeugene 3 Comments

The Wall Street Journal profiles Kim Ki-hoon, who earns $4 million a year in South Korea as a rock-star teacher. He has been teaching for over 20 years, all of them in the country’s private, after-school tutoring academies, known as hagwons. Unlike most teachers across the globe, he is paid according to the demand for his skills—and he is in very high demand:

Mr. Kim works about 60 hours a week teaching English, although he spends only three of those hours giving lectures. His classes are recorded on video, and the Internet has turned them into commodities, available for purchase online at the rate of $4 an hour. He spends most of his week responding to students’ online requests for help, developing lesson plans and writing accompanying textbooks and workbooks (some 200 to date).

A bit more on how Mr. Kim makes his income:

The bulk of Mr. Kim’s earnings come from the 150,000 kids who watch his lectures online each year. (Most are high-school students looking to boost their scores on South Korea’s version of the SAT.) He is a brand name, with all the overhead that such prominence in the market entails. He employs 30 people to help him manage his teaching empire and runs a publishing company to produce his books.

To call this mere tutoring is to understate its scale and sophistication. Megastudy, the online hagwon that Mr. Kim works for, is listed on the South Korean stock exchange. (A Megastudy official confirmed Mr. Kim’s annual earnings.) Nearly three of every four South Korean kids participate in the private market. In 2012, their parents spent more than $17 billion on these services. That is more than the $15 billion spent by Americans on videogames that year, according to the NPD Group, a research firm. The South Korean education market is so profitable that it attracts investments from firms like Goldman Sachs, the Carlyle Group and A.I.G.

Welcome to the new economy.

Advice for Staying in Moscow for Edward Snowden

readingbyeugene Leave a comment

In Foreign Policy, Edward Snowden receives some amusing but useful advice for staying in Russia on his (at the moment) one year planned stay:

Get used to grumpiness. It’s a decent bet that a smiling Potemkin border guard reserved especially for arriving U.S. dissidents was detailed to stamp you into Russia for the first time, but for the rest of us, friendly officials are like unicorns. They don’t exist. Border guards here almost never say a word, even if you greet them with the chirpiest “zdravstvuite” (“hello”). Forget about that verging-on-annoying friendliness one gets from waiters, shop assistants, or random people in elevators in America. From here on in it will be angry glances and accusatory stares, suspicious neighbors and glum shop workers. The U.S. Justice Department might like to have a few words with you, but there’ll be punishment enough in Moscow. Show up at the grocery store without exact change to pay for your “doctor’s sausage” (don’t ask, Edward, just don’t ask) and you’ll get an earful of barking abuse.

The exception to this will be if you end up living in a building with a “concierge,” which in the Moscow incarnation is not a smartly dressed polite man in a suit and hat, but an inquisitive, squinting babushka who will use a combination of your comings and goings, the identity of any visitors you might have, and ceaseless interrogation to put together a complex psychological portrait of you and the other inhabitants of the building. Think of it as an offline, Soviet version of the PRISM program.

Moscow, of course, has spent the past two decades going through wave after wave of change, and if the angry stares get you down, you can always hire a bike and ride with the hipsters at Gorky Park, or party with the nouveau riche at Gypsy, where your newly acquired fame is sure to get you past the strict face control. Indeed, your lawyer Anatoly Kucherena has said that numerous young Russian damsels have already expressed an interest in providing you with shelter, and perhaps much, much more.

Also, I had no clue Anna Chapman proposed to Snowden. Read the rest here.

The Sports Gene and the New Science of Athletic Excellence

readingbyeugene 1 Comment

Katie Drummond interviews David Epstein, the author of the recently released The Sports Gene: Inside the Science of Extraordinary Athletic Performance.

The context is fascinating: whether you’re a gym rat or just starting out with an exercise routine, you typically follow the advice you read in magazines, from friends/coworkers, or personal trainers. But in the future, however, you might be able to develop a training plan that has nothing to do with external edicts, generalized principles, or even trial and error. Instead, you’d be training according to your own genetic athletic profile — a sequence of genes that determine what kind of exercise, done for how long and how often, your body will best respond to.

According to Drummond,

Epstein offers a fascinating look at how genetic research is already transforming sports science. Along the way, he digs into controversial questions about gender and race, examines the latest in genetic testing that purports to spot athletic traits, and unravels how some of the world’s best athletes — from Usain Bolt to Michael Jordan — attained the pinnacle of sporting success.

On to the interview questions:

Q: You don’t shy away from controversial topics in the book, including gender and ethnic differences where athletic ability is concerned. You also mention how scientific progress has been hindered because of concerns about sexism or racism creeping into cultural discussions about findings. To what extent, do you think, have those fears held back research on genetics and athleticism?

A: You know, when I went into the book I figured that scientists worked in bubbles to some extent, and that they didn’t decide what to publish based on any external force. In a sense, that they published their data so long as they maintained academic rigor. But in this field, that hasn’t been the case at all: scientists have literally told me that they have data, really great data, that they won’t publish because of how it might be perceived or construed by the public.

The primary instance of this is related to race. Namely, scientists are concerned that data suggesting that black people are predisposed to some athletic superiority will get wound up into this bigoted misconception that athletic ability means someone lacks intellect. That might sound ridiculous, but it’s been a prejudice for some time, and it has really reached deeply into the psyches of some scientists. Where gender is concerned, I had one researcher who has published a huge amount on sex and gender differences tell me that he didn’t publish any findings until he got tenure, because it just threatened to be too controversial. From my perspective, the best way to move the field forward and to help athletes is to collect sound data and then publish it — I was disappointed to see that this hasn’t happened.

Q: As you point out, the relationship between athletics and genetics is really complicated. But where do you see research going in the future, and what will it mean for athletes — elite or otherwise?

A: It is complicated, but we’re already seeing genetic tests trickling out that can hint at different aspects of someone’s athletic ability. Namely we’re seeing gene tests that relate to injury risk — one example is a test for the ApoE gene, which helps determine your vulnerability to brain damage from the hits you take during boxing or playing football, for example. That test is already out there, and it might really make a difference for athletes, how they compete, and what kind of medical treatment they get.

Where research is concerned, the most progress we’re seeing now is in studies that look at genes related to responses to endurance training — genetic pathways that determine who responds well to cardiovascular exercise, and who doesn’t. That has obvious appeal for athletes, or even people who wish they were athletes: the takeaway is that just because you don’t seem to have this innate, amazing talent, you might have an underlying predisposition to respond much better than you’d expect. The idea of figuring out someone’s training routine based on what they do and don’t respond to is really appealing, and I’d say we’re maybe five or ten years away from getting into that.

And it might also play an important role in personalized medicine: if someone with heart problems can respond well to aerobic activity, then maybe we can prescribe an exercise program instead of medicating them.

Fascinating. I’ve placed The Sports Gene in my to-read queue.

Are Selfish Traits Favored by Evolution?

readingbyeugene Leave a comment

A recently published paper in Nature argues that it doesn’t pay to be selfish, in terms of maintaining or gaining evolutionary advantage. From the abstract, they used the famous Prisoner’s Dilemma to come to their conclusion:

Zero-determinant strategies are a new class of probabilistic and conditional strategies that are able to unilaterally set the expected payoff of an opponent in iterated plays of the Prisoner’s Dilemma irrespective of the opponent’s strategy (coercive strategies), or else to set the ratio between the player’s and their opponent’s expected payoff (extortionate strategies). Here we show that zero-determinant strategies are at most weakly dominant, are not evolutionarily stable, and will instead evolve into less coercive strategies. We show that zero-determinant strategies with an informational advantage over other players that allows them to recognize each other can be evolutionarily stable (and able to exploit other players). However, such an advantage is bound to be short-lived as opposing strategies evolve to counteract the recognition.

More interestingly, this latest finding is in direct contradiction the findings in a paper published in The Proceedings of the National Academy of Sciences last year, which posited that selfish people could get ahead of more co-operative partners…

The reason that being selfish wouldn’t work in an evolutionary environment is that knowing your opponent’s decision would not be advantageous for long because your opponent would evolve the same recognition mechanism known to you.

###

(via BBC News)

Printing 19th Century Artifacts in 3D

readingbyeugene Leave a comment

Martin Galese, a 31-year-old lawyer in New York, is resurrecting old patents from the 19th century and making 3D prints of them.

He has posted more than a dozen of these forgotten inventions on his blog as well as the 3-D printing design library,Thingiverse, for anyone to make today.

The New York Times Bits blog has more:

After working as an attorney in patent litigation cases, Mr. Galese said he wishes more people saw the patent archives as a rich repository, flush with freely available designs. He sometimes refers to the patent office’s archives as the “original Thingiverse,” comparing it to the rapidly growing online library of design files shared by 3-D printing hobbyists today.

Others who have seen his 3-D printing files frequently ask why he keeps posting “patented” objects online, he said, not understanding that many former patents are now in the public domain.

“People don’t think people appreciate that aspect of the patent system,” he said.

Most patents issued today last 20 years, but in the past patent protections could be shorter, sometimes lasting 17 years, sometimes less. Out of the more than 8 million patents registered in the United States, only about 2 million are still in force, according to Dennis Crouch, a professor at the University of Missouri School of Law who conducted an analysis on the subject last year.

Worth checking out is Mr. Galese’s Tumblr titled “Patent-able.”

The 3D model of the 1940s portable chess set is pretty neat.