UPS Works! Hooray

That plus new monitors makes for a super sexy setup.

========================================================    PowerPanel Notification – [Power Failure] ========================================================   Warning: The Power Failure event has occurred for a while, system will be shutdown immediately! Time: 2009/11/22 PM 23:19   UPS Model Name: UPS AE550 Battery Capacity: 43 % Remaining Runtime: 282 Seconds

Also nice new disk stats for virtual machine disks. Now to ramp up the # of terabytes

./diskstats.sh
Sun Nov 22 12:39:04 EST 2009  
    d600 % 72      950.0      686.4        pu1  (1397.26)
    d700 %  5      586.2       31.0        pu1  (1397.26)
    bak1 % 56      229.2      128.6    backup1  (229.228)
    d500 % 32      950.0      306.9         d1  (825.175)
   v1000 %  0      825.2        3.1         d1  (825.175)
   v2000 %  0      825.2        1.3         d1  (825.175)
   v3000 %  0      825.2        1.4         d1  (825.175)
   w1000 %  1      825.2        9.8         d1  (825.175)
   w2000 %  6      825.2       50.8         d1  (825.175)
    d100 %  0       49.6        0.3         d2  (916.893)
    d200 % 39       49.6       19.4         d2  (916.893)
    d300 % 30      297.6       89.4         d2  (916.893)
    d400 %  0      297.6        0.2         d2  (916.893)
 backup1 % 56      229.2      128.8       sdg1     (root)
    d100 %  0       49.6        0.2         d2     (root)
      d1 % 45      825.2      373.6        md4     (root)
    d200 % 38       49.6       19.3         d2     (root)
      d2 % 11      916.9      109.5        md5     (root)
    d300 % 10      297.6       32.2         d2     (root)
    d400 %  0      297.6        0.2         d2     (root)
    d500 % 30      950.0      291.3         d1     (root)
    d600 % 72      950.0      688.7        pu1     (root)
    d700 %  5      586.2       31.2        pu1     (root)
  extra1 %  0       36.7        0.2        md3     (root)
     pu1 % 51     1397.3      717.7       sdf1     (root)

 

A few useful sites for the quantitatively inclined

Economics / Finance

http://www.shadowstats.com/

http://globaleconomicanalysis.blogspot.com/

http://gregmankiw.blogspot.com/

http://rick.bookstaber.com/

 

Quant Finance

http://iqsquant.blogspot.com/

http://cxoadvisory.com/

http://www.aleablog.com/

http://www.sentimentnews.com/

 

Other

http://www.technologyreview.com/

http://hbswk.hbs.edu/

http://freakonomics.blogs.nytimes.com/

 

 

 

Startup costs for a prop shops. A couple wrong ways and a right way.

You can probably start your own prop shop, co-located and all, for $10,000 of fixed capital a year and $100,000 of trading capital. I know some people trying to do this, and even pushing into the high frequency space.

The main barrier to entry is the huge amount of infrastructure needed to built, often from scratch:

• Trading infrastructure, high speed low latency scalable framework for strategies to be laid on top of. Preferably risk management is built in here.
• Back-testing infrastructure and enough tick data. Just having a nice executable here is enough here, since machines are easily scalable especially with a service like ec2.
• Research infrastructure. Sometimes people call this “bars research”, but it involves uniformly segmented time series data (e.g. technical data) coupled with an expressive backtesting language.

Given that it is very easy to screw up any one of those three critical parts, forget the strategy itself, it is no surprise that people are hesitant.

The scalable solution is to share these costs. Imagine the VC firm of prop shops. Lots of firms already do this: provide the trading infrastructure and then share in the trading profits. However, most of the competitors in this space are on one of two extremes: too much like normal prop shops, or too much like a software company.

Too much like a “conglomerate” prop shop: traders are treated as employees. It is not enough to pay traders via profit sharing, because they still feel locked to a physical office and are certainly vender-locked. At the same time, most of these prop shop do a really bad job of providing the tools traders need.

Too much like a software firm: traders are users. Ok, so now traders have all the freedom they want, but none of the help they need. You can’t learn how to trade from a user manual, and no amount of object oriented goodness is going to fix that. In contrast, a few hundred thousand dollars is peanuts to a VC firm, especially when only a small portion of it needs to be put at risk.

The right way gives traders capital, infrastructure, as well as the basics to get started:

• A test suite and environment for converting trading ideas into back-test-able strategies, all within minutes. A microsoft office for thinking ‘strategy’.
• Physical offices where initial training can be done, and where future support will be operated out of.
• Profit sharing that can be scaled up/down with the strategy.
• Multiple tiers of infrastructure for different levels of technical proficiency.

Why there are not a lot of companies in this space beats me (there are a few). Give me a ring if you’re interested in this business.

Women aren’t Children, but they might sometimes prefer the title.

Prak the Sane says, if it looks like a woman and talks like a woman, then we have to at least consider the possibility that we may be dealing with an effeminate member of the homindae family: more selective in mating, generally in constant higher reproductive demand, replete with stronger spatial memory and perhaps consequently better fashion sense.

Recently, ozisevolving made a few jabs at the sexism latent in the statement “women and children” here: Women Aren’t Children. The post says that calling women children is not only inaccurate, but condescending and ultimately damaging towards women. I think we can all easily agree with that.

But wait, maybe associating women with children is actually good for some women, at least if the opposite of this Madonna-Whore complex is to be just-like-a-man. To illustrate this point, we’ll make references to the deep dark depths of game theory.

The polygamy game:

Suppose there are women and men, all looking for at least one mate, and suppose that each has a property called “attractiveness”, which is linear. Yes, this is not an accurate picture of reality, since individuals have different preferences in their mate (e.g. when fractured along racial lines, height difference, even pheromones, etc). Additionally, there are two ways to play this game: Polygamy and Monogamy. The rule is everyone takes a vote and whichever choice wins is enforced for everyone.

Ok, so some women want monogamy and some men want polygamy. Sure, this is true because men can optimize their genetic dispersion by mating as many times as possible (quantity over quality), and women often want to optimize by increasing male investment during the long infant incubation period.

But some women want polygamy and some men want monogamy. Many very disenfranchised women would happily share in a very prime male versus picking off the bottom of the male ladder. Similarly, men at the bottom of the latter much prefer monogamy so they can lock in a female rather than face elimination from the gene selection game. (We are, here, almost completely discarding the externalities resulting from monogamous and polygamous relationships on families, children, etc — which one could argue completely change this game).

So what happens is that women in the south hamptons probably don’t want their husband pilandering about or even edging towards serial relationships. And we also have the less p-c, poor women making every attempt to get hitched by a rich guy, or turning to prostitution.

The Payoff and the Deciders:

So if monogamy wins, then the best women win. They maximize and monopolize the men. Et-cetera

But if the rich power elite males, such as in ancient empires, decide that they can have as many women as they want. Then we have the opposite payoffs.

So what leads people to vote a certain way or another? What leads to the societal consensus? Of course, part of it has to do with base biological and economic requirements.

In addition, though, a lot of individual decisions rest on social norms and unconscious connections. Let’s bring back the Madonna-Whore dichotomy. If every woman looks like a whore to a Man, the long term relationship is not going to look so appealing. On the other hand, if women have a level of sacredness and in-ness that places them on the same level as a man’s children, then the picture changes drastically.

The moral of this story:

Oz said,

Not only have I shown that the “women and children” grouping is unfair to men, it is also unfair to women…

Well maybe the emphasis should be placed on the disadvantage towards the Men. In this age of increasing equality and freedom, male style command and control dominance may be well on the decline. Who says in some places female style maternity and divinity could not take its place?

Mish says that US unemployment will be over 10% for over half a decade.

http://globaleconomicanalysis.blogspot.com/2009/11/mish-unemployment-projections-through.html

“Yet, in spite of all those generous assumptions, no double dip recession, no second recession, high rates of job growth and falling participation rates all the way through 2020, and unemployment peaking at 11.6% not 13%, the best I can do is suggest the unemployment rate will be over 10% all the way through 2015 and never dip below 8% all the way out through the end of 2020.”

 

Is Gen Y the Dumbest Generation?

Mark Bauerlein argues in The Dumbest Generation [Amazon] that Facebook, Twitter, and the internet in general has made Generation Y “uniformed, illiterate, and self absorbed”. Demagogues like him also add impossible to manage and educate to that list. Is it true that Facebook has made Gen Y incapable of focusing at work, that Twitter reveals inability to craft a paragraph, and that Youtube comments illustrate a stark decline in analytical reasoning?  No.  Although I wont go deep into the arguments, we can look at books like like Grown Up Digital [amazon] ($4.5 million dollars of research money).

If anything, Generation X should be worrying about the reverse: that their skills are rapidly becoming antiquated in an age of digital necessity. There are two powers at work here. First, some of the practices Gen Y utilize might be outright better than the Gen X practice. Grown Up Digital cites online collaboration and scrutinization of streaming information as examples. Sure, we might not all need to know everything about your favorite celebrity on a day to day basis. However, look at the case where a Gen Y gets live RSS updates on relevant research papers (e.g. from Arxiv, SSRN, combined with Mendelev). Then that is combined with up-to-the-minute sentiment and opinions off the blogosphere. That can trigger the Gen Y’er to pull up relevant books on the Kindle, and then start an forum or chat based conversation about it. This, all over the course of 15 minutes. We can see how Gen X might potentially become frightfully behind.

The second power at work is the inherent network effects [wiki] generated by these technologies. Print media erodes, the TPS report fades into oblivion, alternative information sources gain in popularity. Even if a blog is inherently less refined when placed in comparison with a Boston Globe article, the blogs may soon win out due to purely market forces. Before long (or already) they will be better for many forms of information.

This is not to say that Gen X practices are to be thrown away en masse. Of course, practices will need to be integrated. Just as those who manage to adopt starfish management within established command and control frameworks will thrive compared to those married to either ideology.  So OK, we need to learn from both the old and the new. So what? Corporations, Political Groups, and Educational Institution are all already working on it. It will be easy to integrate new information-rich pedagogies into existing organizations once the Net-Gen grows older, right?

Wrong.  And this is even more wrong for established western societies like the United States. It may take massive political/shareholder will to affect these sort of fundamental changes from the top down (just look at healthcare technology). In other cases, we may look towards disruptive technologies/processes to foster from the bottom up. In either case, young people will need to take responsibility and ownership over future drivers of their economies.

Think back to that disinterested, uninterested 20-something year old editing her blog at work, making a new YouTube video between projects, and keeping in touch with 50 friends over blogs and AIM when her boss is being a pain. Think about how much positive change that person could affect if her skills were appreciated and she felt like she had more stake in work success. That’s what Gen X should be worrying about.

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