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Filed under: pass alongs, journalism — David @ 8:29 pm

Well, I finally found an online computer game that suits my personality: NewsFutures.

NewsFutures is just one of many Prediction Markets available online. They come in a variety of flavors, focusing more on sports, Hollywood gossip, financial news, etc. I’m curious about The Popular Science Predictions Exchange, where you can examine the likelihood of questions such as “Will a blood test for breast cancer be released in the U.S. by the end of March?” (presently 50.75%), “Will the Western U.S. suffer a catastrophic water crisis by 2010?” (66.25%), and that question haunting so many of us: “Will a team of androids beat the human World Cup champs at a game of soccer by 2050?” (48% likely).

Whatever their subject matter, these things all have about the same format. You “buy” (usually using a pretend currency) shares that will pay (usually 100 units) if some future event happens, and will be worthless if the event doesn’t happen as specified. In some elections on some markets, shares will pay out the amount of the percentage popular vote of a particular candidate or party… so, if you “buy” a share in candidate X for 50 units, and that candidate earns 52% of the popular vote, you net 2 units.

Exciting, huh?

Well, yes, to some people, including me. The thing is that from that very simple setup, you see extremely accurate predictions. There’s a big debate amongst academics over whether these markets are actually better at predicting elections than polls are. I’m not in a position to even have an opinion on that question, but considering that polling is extremely complex and expensive, it’s remarkable to me that a simple web site and a bunch of self-selecting participants from around the world can even be close in accuracy, let alone possibly better.

Who doesn’t want to know the future? There are many events on which I certainly do want to know, and the upcoming US presidential election is one. Although, I guess it’s more fair to say I want to have a sense of the relative likelihood. So, this is a big draw to me. It also puts an element of fun into listening to news reports and polling data. So, contrary to so many computer games, this one actually encourages me to pay more attention to the news.

I picked NewsFutures mostly because I liked their mix of solid rational approach and usability for average users. Some sites I found I couldn’t even figure out how to sign up, which I take as some kind of indication that they are there only for some “in crowd”. Also, I didn’t want to bet real money, at least not at first (the Iowa Electronic Markets is actually a legal place to play with a small amount of real money). Finally, NewsFutures focuses on news, broadly defined. I’m much more interested in political news than I am in things like sports scores and Hollywood gossip, but you can buy shares in those things too on NewsFutures.

But, who would spend any amount of time playing such a game for fake money? Well, those of us who think it’s fun, of course. And those of us who want to feel like they have a sense of how viable (or not) certain political candidates (or whatever) are… or at least find out if we really do have a good sense of such things or not.

NewsFutures presently claims 19,323 players. I’m presently ranked number 3,340. This is pretty funny, actually, because I’m definitely not in a position where I’d think I’d be above the 80th percentile of players. Almost all of my 12,419 “exchange dollars” (abbreviated “X$”) were given to me through the sites’ program by which people with net worth less than X$20,000 can just get “free X$”, X$1000-X$1500 per day. So, in other words, over 80% of those 19,000 players don’t even bother to play often enough to get all the free fake money they are entitled to. On the other hand, everyone on their “top 1000″ board has over X$30,000, so more than 5% of players have played enough (and well enough) to earn a 50% or greater return on their free money.

By the way, the real leaders have WAY more than the rest of us (the present leader presently has a net worth of X$55,697,715). I’m almost positive that most of these earning are coming from “faster moving” markets than these elections. Sporting events are very popular, including trading on outcomes during games! Imagine, there are probably as many NBA games to bet on this week as there will be elections to bet on throughout all of next year! So, I doubt I’ll be among the real leaders at any point.

But I’m fine with that. I like the game I’m playing. I like playing by a very precise set of rules on a bunch of precisely defined outcomes of interest to me. I’ll be curious to see how my status as an NPR junkie stands up to a test.

My biggest complaint is that I’d like there to be way more things to bet on. We’ve got a lot of very important decisions to make regarding the future. To take one example, environmentalism has largely shifted not to environmental problems of the present but to potential problems of the future. I hear countless people making and denying predictions of future events, but I hear very little accounting for how well people have predicted things. I think it’s a good challenge for the information age to keep track of such things, and, with a bit of clever work, fortune telling might start to become more science than pseudo-science.

Monday, 2007-12-03

Radiohead followup

Filed under: music & dance, journalism, philosophizing — David @ 8:49 pm

I got curious about how the whole Radiohead thing had played out when I heard mention of it on NPR’s Morning Edition this morning. Turns out the band is not presently releasing statistics about it. An independent market research company called comScore, though, released this report on how the downloads have played out. They say that 1.2 million people visited the site, a “significant percentage of visitors ultimately downloading the album” (how’s that for market data?). They were willing to be much more precise with the percentages than the totals, though, saying that about 38% of the people who downloaded the album paid something (40% of US downloaders), and the average voluntary payment was $6 ($8.05 for US downloaders).

Anyway, Radiohead released this statement in response:

ā€œIn response to purely speculative figures announced in the press regarding the number of downloads and the price paid for the album, the group’s representatives would like to remind people that… it is impossible for outside organisations to have accurate figures on sales. However, they can confirm that the figures quoted by the company comScore Inc are wholly inaccurate and in no way reflect definitive market intelligence or, indeed, the true success of the project.ā€

If by “accurate” they mean “exactly correct”, then I agree. However, comScore is being quite open about their methodology and their approach seems sound to me. Good statisticians can be surprisingly accurate, and the band’s unwillingness to publish the statistics themselves don’t inspire me with confidence that comScore is “wholly inaccurate”. Just how far off does one need to be to count as “wholly inaccurate”, anyway? So, needless to say, I don’t know, but if I had to bet, I’d bet that comScore’s data are not far off the mark (I’ll say +- 5%).

Wired’s blog post on the matter seems to miss the “significant percentage of visitors” part of comScore’s report and thus estimates with faulty reasoning that the band netted $2.7 million from the stunt. Without knowing just what this “significant percentage” is, even approximately, then I do think it’s fair to say that estimates of the total are “purely speculative”. However, I’ll go out on a limb and bet that the band netted over $1 million in the first month of the ordeal. I’ll also stand by my previous prediction that over the course of their experiment they will serve up over a million downloads and gross 2-5 million dollars. That, of course, was and is wild speculation. But comScores numbers are similar. A small but very well-known group of people have access to the real answers, and I challenge them to go public with them. But, they know everyone wants to know, and I suspect they like the attention of keeping the secret. It’s certainly their right to do so, but I think it’s kind of lame.

Friday, 2007-11-30

Who’s your candidate?

Filed under: pass alongs — David @ 12:55 am

One organization’s interview to find out who you should vote for…

These things are always fun, right? And especially when we’ve got this many candidates they can actually be useful, because we don’t always know that much about the different candidates.

According to the quiz, I should be excited about Chris Dodd, who I must admit I know practically nothing about (but, I live in Indiana, where primaries don’t matter, so why should I expect to know anything about him? (Are we all sick of the Primary status quo, or is it just me (and my parents)?)). Barack and Hillary tie for second place, with Joe Biden close behind them. Fascinating. Regardless of any libertarian leanings I may have, I found it interesting that all of the Democrats ranked higher for me than all of the Republicans. And all of this is perhaps especially interesting considering that I wasn’t at all confident about my answers on this survey. To take the most simple example, I had a terrible time answering the Iraq question. None of the choices were anything like “Well, I felt strongly that we shouldn’t have gotten into this mess, but now that we’re 4.5 years into the mess, I don’t know how the hell to get us out of it. But it sure is a terrible mess!”

Anyway, I’d be very interested to hear anyone else’s results, if you care to take the time (2-3 minutes).

Tuesday, 2007-11-13

Filed under: journalism — David @ 12:41 am

I heard Robert Kuttner interviewed on Fresh Air today, promoting his new book The Squandering of America. Just hearing the title already had me incredulous, and now I’m thinking it’s finally time that I follow suit to Kynthia’s outing of herself and myself as being more libertarian than most of our close friends, and perhaps more Libertarian than Democrat.

That’s a huge topic, though, so I’ll focus on just this interview. Um, America has not been squandered. I suppose Mr. Kuttner thinks it is in the process of being squandered, and I certainly welcome the presentation of his case. But, it’s amazing to me that he presents this case as if it were stating the obvious, rather than an extraordinary claim.

Actually, in the remarkably long excerpt from the book that’s on the Fresh Air page, he talks about squandered standing in the world because of the Bush administration’s dreadful foreign policy, and the squandering of our environment. There are strong cases to be made in these areas, and I (and many libertarians (I’m being very intentional about my capitalization here, by the way)) likely agree with many of his points in these areas. But, as he says, that’s not what his book is about:

“To write about all the ways in which the promise of America is being squandered would require more than one book. This book is about one large dimension: the connection between a precarious economy and a diminished politics.”

Just how precarious is the economy? Well, of course, we’ll only know if/when it collapses. Of course, we’d have to agree that it had collapsed (even Kuttner said in the interview that there wasn’t going to be another great depression, but he did have the courage (sarcasm intended) to predict that we would have a recession sometime soon). And even then, we’ll speculate about why it collapsed. So, it’s really hard to say just how precarious it is.

But, of course, the thing all the lefties are citing right now as why free markets are patently bad is the “subprime mortgage crisis.” Perhaps there is a crisis going on, but I really disagree with the way people like Kuttner and Gretchen Morgenson (also recently interviewed on Fresh Air about the “subprime mortgage crisis”) characterize it. Here’s my take:

  • Interest rates (2002-2005ish) were low
  • Some financial hotshots started experimenting with new ways to lend people money
  • They went looking for people to lend money to
  • Countless middle-to-upper-class people already had mortgages they liked, so they turned to people of lower income and poorer credit ratings (hence “subprime”)
  • A few years later the adjustable rate mortgages are adjusting way up, and the lower-income borrowers can’t afford their mortgage payments anymore. So, there are record numbers of foreclosures.

I suspect that just about everyone agrees with that characterization of things. So, who are the victims of this crisis? The obvious sympathy would go to the borrowers who are facing foreclosure. While my heart definitely goes out to them, these are people who, almost by definition, had no hope of getting a home loan before this bubble. So, it will be difficult for them, and I do not mean to belittle their situation. But in the end, they will end up renting, just like they were before.

This is a good time to distinguish here a related but different practice, the one commonly called predatory lending. To the degree that borrowers were defrauded by people using criminal or unethically misleading methods, they are extremely worthy of protection under the law. Free markets depend on the rule of law, and any libertarian will tell you that fraud should be considered an extremely serious crime.

But, I don’t think that predatory lending accounts for the majority of this “crisis”. I don’t even think it’s that big a chunk. Most of these borrowers were riding a wave of excitement that they might be able to own a home, and the lenders were doing all of their legal and ethical disclosures trying to find potential sources of revenue.

The victims of this crisis are the lenders. But, unlike so many cases, blaming the victim here is entirely appropriate. These companies knew they were dealing with subprime borrowers… how could they forget? The entire practice was known as “subprime lending”. And they did it. A LOT! They literally bet billions of dollars on people they wouldn’t have lent money to just a few years earlier. And, a substantial number of those bets are failing. And, they’re losing money, executives are getting fired, they’re scrambling to keep things running, banks are pooling funds to prepare themselves to bail each other out if necessary. Definitely sounds like a crisis. But my heart does not go out to them. They are reaping their rotten harvest. The fact that none of them are going to end up hungry or homeless does not, of course, make me feel any more pity.

Now, people like Kuttner and Morgenson look at all this and say “you see? if we had more regulation we could prevent crises like this!” They are probably right. But this is where a free-market type says that the market is correcting itself. The people who made bad bets are the ones in crisis.

It’s interesting to compare this all with the other recent “bubble”, which was of course the “dot com bubble”. Morgenson referenced this while she was criticizing Alan Greenspan saying that he “never met a bubble he didn’t like”. Brother. Obviously he didn’t LIKE them (does “irrational exuberance” sound like praise to you?), he just believed that the proper solution was to let the people making bad bets lose. Kuttner and Morgenson would clearly prefer that the bad bets not be placed in the first place. The question in my mind is, which is better: a society where you can make whatever bet you want, but you have to pay for your bad bets; or a society where the government limits the bets you can make?

Who were the “victims” of the Dot Com crash? Mostly people who had invested heavily in dot coms. And actually, it was mostly people who invested heavily late in the game. A friend once joked that if he had a time machine he might tell people not to buy tech stocks during the craze. I said “Are you crazy? The correct message is “sell your tech stocks before March of 2000!” If you bought a NASDAQ index fund on January 1 1999 and sold a year later, you would have made very roughly 100% annual return. But if you bought on January 1 2000 and sold a year later, you’d be very disappointed. By the beginning of 2000, everyone knew this was a bubble. That was a high risk, and people who made it might have lost a lot. Meanwhile, after countless companies folded and a terrorist attack that destroyed one of the most important financial centers in the world, the US experienced a mild recession. Sure, a lot of dot com millionaires were no longer millionaires, but this was not a broad crisis. Indeed, service industries boomed during this period, I suspect many of the lowest-wage workers felt the boom but the bust not nearly so much.

So, coming back to the present, the housing bubble is bursting. Yes, some low-income people are losing their homes, and this is definitely sad. But, they didn’t die, they have some major cleaning up to do, and hopefully they’ll be back to try again someday soon. Meanwhile — and I can’t believe no one talks about this — a substantial number of these subprime loans are not going to fail. That means that a huge number of people who in the 1990s would have been entirely unable to get a home loan will be home owners for the rest of their lives. They should be careful about their mortgage, they should work on negotiating with their lender if they are in trouble (banks hate foreclosing, I believe the financial advisors I’m hearing that are encouraging people to call their lenders and work on restructuring their loans if they are in trouble). Those who succeed should proudly enjoy the home that they have earned the right to call their own. Meanwhile, many of us in the middle class are paying unbelievably low interest rates on our mortgages, locked in when rates were so low. And of course, most of our houses are worth much much more today than when we bought, even in cases where the price has dropped a bit recently.

According to the census bureau, (and this graph in wikipedia) in 1970 the home-ownership rate in the US was just over 64%. From 1985-1994, it was never more than half a percentage point away from 64%. The most recent reported number is 68.2%. That’s down from a year ago, and I bet it will fall more from here. But, I bet it will not be down below 64% again for a long long time. So, amazingly (sarcasm again intended) home ownership will have increased substantially during this “crisis”.

In short, the people who made good bets are doing well. The people who made bad bets are suffering. The left in America reads this as a reason to regulate this process. The free-marketeers are saying “well, the moral of the story is: make good bets, stay away from bad ones.” As to which way things work better, we’ll never know for sure. But I’m with the free-marketeers.

Friday, 2007-11-09

Automated Phone Call From The Cops

Filed under: journalism — David @ 12:08 am

Wow, is this the new thing? Yes, I guess it is, the thing they callĀ  reverse 911. Now I get it.

10:55pm: the phone rings. I figured only a close friend would call so late, I answer:

“This is the Bloomington Police Department”

WOAH! Well, they weren’t after me for any reason, it was a recorded voice, saying they wanted help finding some dangerous man on the loose. I remember some of the description, but I can’t give his name or anything (that was part of the recording). And, worse, I figured there’d be some website you could go to to, say, check the facts again, maybe see a mug shot… Well, if there is, I can’t find it. Seems pretty lame.

Does seem like something is afoot though. I found these two newsy clips about IU police having acquired such a system. I swear this said Bloomington Police, though, and I don’t know why IU police would call out here. On the other hand, the place they said this guy was last sighted was nowhere near my house, so… who knows.

Anyway, a sign of the time, my first reverse 911 call. I wonder how long before I feel ashamed that I didn’t know what it was. :)

Tuesday, 2007-11-06

Uninspiring voting day II: return of the yawn!

Filed under: reviews — David @ 12:10 pm

Well, I had to follow up from my post back in May about the very uninteresting primary ballot. Well, today was the general election, and … well, like most sequels, it wasn’t as impressive as the original, but definitely a variation on the same theme.

In May there were literally no contested elections on my ballot. On today’s ballot, there were two decisions to make: A normal race for mayor, and a “pick three out of four” for the three At Large City Council seats. I was the only voter there the whole time I was there, which admittedly wasn’t very long. I remain disappointed by the non-printing electronic voting machine.

yawn At least the first time was fresh and new. Even if this vote wasn’t quite as boring, it was less impressively boring, so in some sense, even more boring.

Monday, 2007-10-01

Go, Radiohead!

Filed under: journalism — David @ 8:07 pm

Some of you will know I’m not just saying “I thought of it first” when I say that I’ve long thought that a gratuity-based system could be the answer to the woes of the music industry in the era of digital music (the rest of you will just have to take my word for it… or not believe me… I don’t care). The basic question is “how will artists get compensated if music can be downloaded online?” and my proposed answer is “what if it became part of our culture that you paid artists whose music you enjoy?” We voluntarily give money to our waitstaff, often even when we don’t appreciate their service. Why not try something similar with musicians? The worst that can happen is that people don’t choose to pay and we’re right back where we started. Well, that’s a particular point of view. If you’re the RIAA, the worst thing that can happen is the dissolution of your industry.

Anyway, I thought a lot about how to try to make this a reality, but let go of the idea mid-2005 when I found out that it’d been tried before. And that Amazon and Paypal were both flirting with the idea as well. But obviously, it hasn’t really gotten any traction. And the RIAA continues to rule the land of music (with a big, huge, clumsy iron fist, I might add).

Well, now a fresh counterattack from Radiohead, a band that many friends of mine love but that I’ve never taken to, largely for lack of trying. Go to their site, and name your price (as little as one Brittish Penny) and (after October 10) you’re able to download the album. Some see this move as a publicity stunt. I doubt it. I think it’s more them being fed up with Big Label mentality and searching for something new. I predict that their fans will eat it up, I bet they serve up over a million downloads and gross 2-5 million dollars. But of course, even if I’m right, it cannot be denied that they already have a huge fan base, and that most bands would just be penniless voices in the wilderness if they tried this. There’s still a role for someone like the Big Labels. But whoever it is will have to start by acknowledging that the rules of the game have totally changed. The RIAA seems about as likely to do that as they are to start selling wax cylinders again.

So, kudos to Radiohead, I’m tempted to go buy their album just as a sign of support, even though I’ve never been a big fan. But I’m sure feeling like something of a fan at the moment.

Sunday, 2007-09-30

A Scattered-David Index..?

Filed under: what I did today — David @ 11:01 pm

I always feel bad complaining about feeling busy when much of what’s making me busy is fun. So, I won’t complain, but I have been busy for the past month and a half or more. From doing a lot of coordination of the Sugar Hill contradance weekend to attending two separate weddings on the west coast, every weekend seems to have something scheduled. And every busy weekend means time that I can’t keep up with my normal personal chores. And every day off work seems to result in a clump of emails demanding attention. Next thing you know, I’m feeling scattered, even though there’s plenty of rest and relaxation going on in my life.

Saturday I spent hours taming my inbox. As I discussed last November, I like to have 38 or fewer emails in my inbox at any given moment (because I can fit 37 on one screen), especially at the end of a work day. I marveled then at what an impact the out of control inbox seems to have on my psyche, and the marveling continues. And, when I feel scattered, I never feel like I have time to write to my blog.

This got me thinking: I could develop a Scattered-David index… something like the Index of Leading Economic Indicators, that takes things like how many emails are in my inbox, how long its been since I wrote to my blog, maybe somehow it could track my purchases of plane tickets…. anyway, take raw data like that and compute some “Scattered-David index” that would give friends and family some sense of what’s going on with me when I’m feeling to scattered to post to the blog or what have you. The essential thing would be that it’d have to work without me doing ANYTHING, so I’d have to write a program to see how many messages were in my inbox and stuff, and have these programs run automatically every day or whatever. Once I had the number I could do things like show graphs and stuff.

Fun to think about. If I felt like I had more time to play with things like that, I’d probably give it a try. But, hey, I have to get a lot of work done this week before leaving next weekend for Boston for yet another wedding. I’m hoping things will be pretty calm between my return from that and Thanksgiving. Maybe I’ll even renew my efforts to blog more often. But meanwhile, at least my responsibilities are mostly fun and rewarding!

Wednesday, 2007-08-22

The passing of a tree

Filed under: what I did today — David @ 12:09 pm

Well, it took a couple of weeks of waiting, but this morning the people are here to remove this tree. My parents discovered that it was dead when they were here at the beginning of August. When the guy came to give an estimate, he immediately identified the type of tree, said that it was a native tree and as such “volunteered” itself quite simply. But he said that this species also lived for a while and then died. So, there ya go. It’s all part of life…

They’ve got a very impressive wood chipper. Remarkable to see the tree disappear almost as soon as it hits the ground.

Thursday, 2007-08-16

Walking beats standing still

Filed under: Uncategorized — David @ 2:19 pm

WFIU Produces a somewhat silly radio short called A Moment of Science. Silly though it may be, they’ve had quite a few shows that gave me a valuable bit of scientific knowledge. And a couple of times they’ve offered expert concurrence with theories that I’ve developed on my own. Last year they confirmed that fruit flies don’t really like fruit. And now, about walking…

For several years, I’ve asked people to “rank the following in order of comfort: standing still, walking, sitting”. You might take a moment and come up with your own answer if I haven’t already asked you…. Well, the striking result is: I can’t remember a single person who didn’t rank walking as more comfortable than standing still. I started asking the question because I realized that this was the case for me. Nearly everyone seems to agree, when they stop to think about it.

A Moment of Science says that this is because it lets points on your feet “take turns” bearing the pressure of your weight, (each resting when it’s not its turn) and because it circulates blood in your feet better.

So, now if anyone ever tells me they think standing still is more comfortable for them, I can tell them that they are wrong! :)

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