Bit Blocks for the Universe

Blogs Analyzed

2008-12-07T13:29:00.003+01:00

Can Your Writing Style Reveal Your Personality?

It is one of those mostly useless but fun websites you hit from time to time on the Internet -- http://www.typealyzer.com analyzes your writing style and suggests personality traits based on how you write.

I'm currently writing two blogs, the one you're reading right now and another one at http://www.openremote.org (new venture).

The blog you're looking at apparently comes across as scientific:

The long-range thinking and individualistic type. They are especially good at looking at almost anything and figuring out a way of improving it - often with a highly creative and imaginative touch. They are intellectually curious and daring, but might be pshysically hesitant to try new things.

The Scientists enjoy theoretical work that allows them to use their strong minds and bold creativity. Since they tend to be so abstract and theoretical in their communication they often have a problem communcating their visions to other people and need to learn patience and use conrete examples. Since they are extremly good at concentrating they often have no trouble working alone.

Which I guess is sort of correct. Or at least it's flattering.

The one at OpenRemote however is of different sort (which makes sense since it is more directed at the community as updates of ongoing work and events):

The active and play-ful type. They are especially attuned to people and things around them and often full of energy, talking, joking and engaging in physical out-door activities.

The Doers are happiest with action-filled work which craves their full attention and focus. They might be very impulsive and more keen on starting something new than following it through. They might have a problem with sitting still or remaining inactive for any period of time.

At least the part about starting a lot of things new and having hard time finishing them seems to strike close to home.

Dealing with Cygwin Setup Failures (Crash)

2008-10-26T13:31:00.006+01:00

When error checking failed.

My use of Microsoft Windows relies pretty heavily on Cygwin. Cygwin makes most development tasks on this OS at least bearable. The last few months though I've had issues with using the Cygwin provided setup.exe to update my components.

Usually the problem manifests itself at the end of the component update where the setup program just plain crashes (with the usual send error report to /dev/null that nobody investigates anyway). After a few attempts it seemed to always occur at "uninstalling bash..." stage where the setup tries to uninstall the existing bash component before updating with new one.

This bothered me a bit but not enough to warrant a hunt for a fix (other things to do, right?). I guess I was kinda hoping that the Cygwin team would eventually find the issue, create a new setup.exe and I would have my excellent Cygwin environment back to normal. No need for me to lift my finger. So I spent the last few months working around the problem, disabling the automated component updates that would hit this issue and updating just the pieces I really, really needed to have updated.

Two days ago though I could no longer avoid it. I needed to install automake, autoconf and libtool on my system to (attempt to) compile some LIRC code and getting these components installed utterly failed every time. Uninstalling bash.... crash.

So no choice but to go hunting for a fix. Google is a great help here. It appears the problem is somewhat rare but not unknown. As it happens, it's possible to end up with corrupt packages in your /etc/setup directory.

Now how these got corrupted I don't know. I have a vague memory of either setup or Windows crashing once in the middle of the update process for whatever reason. Unfortunately the Cygwin setup does not deal graciously with such a corrupt file -- instead you get a big, fat, cryptic application crash everytime when it touches a corrupt file.

So a lesson there to all developers (which we all already know but are too often too lazy to follow): make sure you spend time testing the error conditions of your software. Imagine every possible strange thing your users can do or the strange states their systems may end up in and test against those. And then test some more.

Your users will appreciate it.

It can be a pain in the ass to do but try to do it anyway. It can make all the difference in getting your software adopted.

Finally, to anyone who might end up here trying to fix the same or similar problem. Just delete the offending *.tgz from your /etc/setup. Apparently doing so is not harmful. You can easily figure out if there's a problem with any of these files by trying to open the package with any of your favorite unzip/gzip/tar tool first.

Typical Google Chrome Browsing Experience

2008-09-05T10:22:00.003+02:00

My money is on the brand spanking new Javascript engine pretty constantly crapping out. After this the browser (or should we call it the app platform ;-) crashes any web page that even hints at using Javascript.

Those Darned Databases

2008-09-03T17:05:00.004+02:00

Programmer Asks: Why Would Reading Ever Block Write?

It would be easy to point and laugh. Too easy. We all make silly mistakes and assumptions no matter how long we've spent trying to piece together software. The field is large -- very, very large. Algorithms on sorting and searching, trees and maps and sets, parsing, concurrency and locking, bit operations, I/O, networking, sockets, generics and templates, security and encryption.

And then there's the countless APIs, libraries, frameworks and entire platforms that one need to master.

That's a lot for one person to keep tabs on. And all of us find at some point that we have gaps in our knowledge. Even on some essential knowledge.

But still -- databases are so central and essential to so many applications we build that it's still surprising to find so many people confused or misunderstanding what the ultimate data store backing their application is trying to do. No wonder ORM tools are so popular -- most programmers would just rather ignore what's going on under that layer to the detriment of their DBAs.

Isolation levels, locking and concurrency are not trivial topics so it's not surprising if many developers would rather not be thinking about them and instead concentrate on the latest AJAX widget. But they're also so essential for anyone who calls himself a developer to understand that the idea that they continue to be so poorly understood is a bit frightening.

First Impressions on Google Chrome -- Not So Great

2008-09-03T11:50:00.005+02:00

It Could Be Nice If It Actually Worked.

So Google is getting great publicity once again after the information of their latest attempt at desktop software "leaked" to the Internet. Google Chrome is supposed to be the latest challenge to Microsoft's desktop monopoly.

Great idea. But the implementation is severely lacking.

Installation went fine, the thing starts up but that's where the goodness ends. The first snag occurs when trying to login to my Google account. Very politely the Chrome application tells me (in Finnish, for some odd reason) that the web page is not answering right now and whether I would like to close the tab or keep waiting. Well, I need to get to my Google stuff so I choose wait.

And wait I do. Until 5 minutes later I run out of patience. Still can't login and rest of the Chrome seems to be frozen as well, no other tab responds anymore either.

Ok, it's beta software. Let's give it another try.

Shutdown and restart. Browse couple of pages, things seem fine again. Go to Google Analytics... hmm... not answering again, do you want to wait? I choose yes. And there it is, all frozen again. Opening a new tab works but no new web pages will be loaded there. Google Analytics page is waiting indefinitely. In the meantime both Internet Explorer and Firefox can access Google Analytics just fine so it's not a connection problem.

So much for taking over the world with Chrome I guess. The whole point of the exercise -- according to the rather inane Google cartoon -- was to isolate the browser tabs so even if some of the web pages get one tab into trouble the rest of the browser would still stay responsive. I think it's pretty clear achieving that goal is a complete failure with Chrome so far.

So back to the drawing board, boys and girls. It's not that a great idea to "leak" your stuff out too early. But to be honest is not the first Google app that I find lacking in quality either so I'm not sure why I expected anything more. I guess I'll try Chrome sometime later when it might actually work.

PS. In the meantime, trying to type and format this in blogger is causing some severe Javascript issues both with Firefox 3 and Internet Explorer 7. It's the first time I'm seeing these errors so what gives? Guess software quality really isn't Google's forte.

Going Mobile

2008-08-03T17:51:00.004+02:00

Testing HSDPA for Daily Internet.

Been testing HSDPA as my Internet connection for the last couple of days. So far seems to work ok, a bit slower than the WiFi at home but good enough for your average Internet use. Where it needs to fall back from UMTS to GPRS it gets too slow for most web browsing (result of the darned AJAX hype) but probably still usable for light email access and so on.

Nice thing of course is that now my broadband connection goes with me everywhere. Telcos have been talking about "convergence" for who knows how long now, ten years? The problem with them is the hardware, not really usable for what I need the Internet for. Everybody's drooling over their iPhones but my mobile, it's my laptop, all 2.5kgs of it with full keyboard and a 14" screen.

As a side effect of the convergence vision what the telco operators have provided is finally a usable fast-enough network. No more searching for WiFi hotspots. The broadband connection goes with me to all my favorite cafes and restaurants, the train, the bus, into the car, to the beach (!). Well ok, UMTS is not everywhere yet but still a lot better than hunting for random WiFi spots.

Installing couldn't be much easier. Plug it into the USB port, it's a bit bigger than a memory stick at the moment, and off you go. Hopefully as with WiFi cards, these will become standard laptop equipment soon. Hardware is already for free, as long as you agree to chain yourself to a two year operator contract as is the case these days.

What makes it all very interesting though, phones going mobile radically changed how we used telephones in terms of frequency of communication and availability. As the UMTS network gains coverage (took what, less than 10 years to go from NMT to GMS?) the wireless broadband will always be with you. How will that change the way we use the Internet? One can imagine some pretty cool stuff emerging.

Microsoft Joins Apache Software Foundation

2008-07-27T12:58:00.003+02:00

And The Pigs Grew Wings.

I must say I was more than a little surprised when I read the announcement a couple of days back. Microsoft is putting $100,000 to ASF to become a platinum partner with the likes of Google and Yahoo!

I can't imagine what will come out of this. Maybe it will be nothing more than an $100k expense on their marketing budget. I was following the Slashdot discussion, Bruce Perens is posting some alarming notes based on his experience with Microsoft's previous attacks on Open Source. This will be fascinating to watch.

Of course the ASF license is zero risk to Microsoft -- they can open what code they want, and pull all ASF licensed code back in and close it again, whenever they wish. Would you like the prospect of Microsoft making money out of your code? Well, IBM is doing the same so clearly it works out well for some people.

Interesting to see where this will lead...

The Happening

2008-06-17T11:44:00.000+02:00

The result of creative freedom.

Utter crap.

The Rise of the Amateur Professional

2008-06-02T14:20:00.006+02:00

Why Radical Innovation Is Coming From Users, Not From R&D Organizations.

Another in the series of my favorite TED talks, on the innovation series Charles Leadbeater is discussing innovation and where does it happen, why organizations are becoming increasingly less important as the source of innovation and why some companies are so keen to fight user driven innovation.

It is an interesting talk and worth the 20 minutes to listen to it completely.

In the talk, Leadbeater brings up interesting examples, for instance, how the mountain bikes came about and became a multi-billion dollar business. He also talks about how Internet is changing the way people organize together to accumulate ideas and collaborate on them.

How do we organize ourselves without organizations? That's now possible. You don't need an organization to be organized, to achieve large and complex tasks like innovating new software programs.

This is a huge challenge to the way we think creativity comes about.

Leadbeater criticizes traditional innovation done in R&D labs, universities, etc. where select individuals build ideas and products towards a passive user who either accepts or rejects it. He argues that companies that want to survive will need to open up and reverse the innovation pipeline to enable users to become creators and designers. Radical innovation is increasingly coming from the users, and it's a cumulative, collaborative process, rather than one big stroke of genius from an individual or small group of individuals working behind closed doors. Traditional organizational structure with its inability to accept new radical ideas will lose out in this game. Organizations that are unable to manage innovation in new ways will only be capable of incremental, evolutionary changes due to their tendency to enforce past successes. In the process they will be blind-sighted by an idea that fundamentally changes the market-place.

Big corporations have an in-built tendency to reinforce past success. They've got so much sunk in it, that it is very difficult for them to spot emerging new markets.

Leadbeater also thinks that more and more innovation will in the future come from what he calls amateur professional, people who tinker with ideas for the love of it but do it with great sense of pride and desire for quality.

[Amateur professionals] do it for the love of it but want to do it to a very high standard. They work at their leisure. They take their leisure very seriously.

Why are people interested in this? At work they don't feel very expressed. They don't feel as if they are doing something that really matters to them. So they pick up these kinds of activities.

This has huge organizational implications for very large areas of life.

New Trading System -- Email!

2008-05-21T11:03:00.003+02:00

This Is Where All The IT Investment Pays Off.

Via naked capitalism was reading George Soros and others commenting on the potential melt down that could occur in credit default swap markets, and while the doom-day scenario being painted is juicy, what really caught my attention was the description of the trading system being used for bids and offers on the swaps.

Apparently the traders, who are essentially acting as bookies, receive the bids and offers via an email in their Inbox. Throughout the day, market makers send out hundreds of emails and then the bookies filter and search through their inbox trying to figure out the current market price for a debt swap. There are no electric boards, no accurate pricing, just the stuff that you may (or may not) have received in your inbox.

And the market makers love this. They love the fact that most players have no visibility on what's really going on. Bigger margins for them.

Banks send hedge funds, insurance companies and other institutional investors e-mails throughout the day with bid and offer prices, [hedge fund advisor Tim] Backshall says. For many investors, this system is a headache.

To find the price of a swap on Ford Motor Co. debt, for example, even sophisticated investors might have to search through all of their daily e-mails, he says.

``It's terribly primitive,'' Backshall says. ``The only way you and I could get a level of prices is searching for Ford in our inbox. This is no joke.''

Banks have a vested interest in keeping the swaps market opaque, says Das, the former Citigroup banker. As dealers, the banks see a high volume of transactions, giving them an edge over other buyers and sellers.

``Dealers get higher profitability through lack of transparency,'' Das says. ``Since customers don't necessarily know where the market is, you can charge them much wider margins.''

Moody's Incorrectly Rates Crap as Triple-A

2008-05-21T10:55:00.003+02:00

Blames Software Glitch.

As if anybody needed any more convincing that the debt ratings and the ratings agencies are a complete joke, Financial Times reports that Moody's has been rating risky debt as triple A due to software errors. Wonderful.

Moody’s awarded incorrect triple-A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models, a Financial Times investigation has discovered.
Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower.

Cool Wii Remote Hacks

2008-04-14T17:45:00.003+02:00

I Didn't Know It Can Do That!

Short five minute presentation from TED (which to me seems like one of the coolest conferences around) on some neat stuff you can build out of a Wii remote. Looks like the little console has plenty of mileage left once these ideas are productized.

It's Good To Learn Something New

2008-04-10T20:14:00.003+02:00

Avoiding Brain Rot.

Sometimes it's just refreshing to learn something new, even if initially most of it goes way over your head. Keeps your brain from rotting away in the usual, zero-signal corporate environment.

In computer science, online algorithm is something that processes partial input "on-the-fly" as it becomes available, without having the full knowledge of the expected input set. Makes some problems a bit trickier to solve when you can't see to the future.

Adaptive algorithms are algorithms trying to adjust to the changing input to find the sweet spot of best performance.

Adaptive algorithms for online optimization are therefore trying to tackle situations that are infuriatingly fuzzy from the computer programmer's point of view. First of all you don't have the full input data to work from and can't see what's coming in the future to optimize the algorithm. Secondly, many adaptive algorithms are actually quite slow to tackle changing conditions -- they tend to get stuck in the known working solutions for a long time, even when the input data drastically changes. Or in other words, they look back to history for a long, long time.

Presentation courtesy of Google.

Urban Reconstruction and Modeling for Building Virtual Worlds

2008-03-22T18:08:00.003+01:00

Procedural content is making progress.

One of the most expensive things in creating virtual worlds is the actual content. Filling up the landscape with meaningful things for people to observe and interact with is a huge task, especially if you plan on creating entire worlds, or even cities. A lot of the existing worlds are pretty barren, uninteresting, sometimes just plain boring.

Designing just a single city or town can take up huge amounts of time and a lot of people resources, depending on the level of detail you're after. Designing a virtual town is only slightly less work than designing a real one.

Therefore the compelling solution would be to have procedural methods for computers to generate more detail into the world. However, the downside of most procedural content generation is also boredom -- the worlds may be "full" but are mostly repeating an endless repeating pattern that quickly becomes uninteresting to the observer.

Progress is being made however, and the level of detail the computers can put into designs is increasing. Interesting talk and video below on one city generator coming out of academia and now being commercialized.

Investment Bankers Reason Themselves Out of Prisoner's Dilemma

2008-03-21T13:13:00.003+01:00

Discount Window "Tested".

Small signs of rational thinking emerging this week out of Wall Street with Lehman, Morgan and Goldman coming out of the closet and admitting they are "testing" Fed's discount window as an alternative venue for financing.

Positive because announcing it in sync is attempted to alleviate the stigma of going to the discount window only at an extreme distress, sending a panic signal to the market. Sucker's payoff avoided.

Here's hoping for more evidence of rational thinking creeping into the panicked herd.

Of Programmers and Large Organizations

2008-03-21T12:33:00.003+01:00

When drawing an organizational chart begins, your brain starts hurting.

Paul Graham has yet another interesting essay out, this time pondering on what happens to programmers in large organizations.

One observation of his longish essay seemed particularly striking -- what happens to individual creativity in a group-think environment:

If you're not allowed to implement new ideas, you stop having them. When you can do whatever you want, you have more ideas about what to do.

The loss of creativity going from a startup company to a large organization is immense. It is in fact depressing to even contemplate as so many ideas die on the vine due to the "groups must act as one" mentality that organizations impose. It literally does put one's brain in a coma-like state where new ideas stop breeding.

There aren't many ways to get out of this box when you find yourself inside a group-think organization. Very, very few companies out there actually go out of their way to implement policies that allow free thinking and new ideas to emerge. But the ones that do tend to emerge bigger and better than their competition and as leaders of their respective fields. Unfortunately, large majority of companies pay lip service to such ideas but never act on it in a way that makes any practical difference.

Alternatives then are to work on something "on-the-side" just in order to prevent your brain from going numb.

Or as Paul Graham suggests, go do your own thing. You may fail but at least you don't turn into another zombie.

Working for yourself makes your brain more powerful in the same way a low-restriction exhaust system makes an engine more powerful.

Working for yourself doesn't have to mean starting a startup, of course. But a programmer deciding between a regular job at a big company and their own startup is probably going to learn more doing the startup.

You can adjust the amount of freedom you get by scaling the size of company you work for. If you start the company, you'll have the most freedom. If you become one of the first 10 employees you'll have almost as much freedom as the founders. Even a company with 100 people will feel different from one with 1000.

Working for a small company doesn't ensure freedom. The tree structure of large organizations sets an upper bound on freedom, not a lower bound. The head of a small company may still choose to be a tyrant. The point is that a large organization is compelled by its structure to be one.

So very true.

Bear Stearns Valued at $240 Million

2008-03-17T10:01:00.002+01:00

Less than the value of its real estate.

Incredible. Bear Stearns goes from $20 billion market valuation last summer down to 1.5% of the value in less than a year, after operating 85 years as an independent company. Driven down by market participant's lack of trust and speculation.

The Manhattan real estate is probably worth the price tag itself. JPMorgan took no risks in getting this business. It is robbery of grand scale, indeed.

Duty Calls

2008-03-15T11:11:00.003+01:00

Swiss Franc Hits Parity with USD

2008-03-14T15:52:00.003+01:00

Bear Stearns Brings US Down.

With the latest shocker from Wall Street, Bear Stearns investment bank hits the panic button and goes to the US Fed discount window through JPMorgan. The arrangement highlights some short-comings in the Fed's recent rescue and stabilization attempt which I'm sure will be analyzed at depth elsewhere. Interbank rates will no doubt sky-rocket bringing the third wave of pain in the ongoing crunch crisis.

However, the latest events have now brought USD on par one-to-one against the Swiss franc, which in my book officially puts USD into the "dirt cheap" category ;-)

A Run on the Hedge Funds

2008-03-10T18:19:00.004+01:00

You Won't See This on TV.

There's a good article on Bloomberg today on the going-ons of the shadow financial system. Basically the banks who kept the hedge funds floating on sky-high leverages are now running after the collaterals. The margins on the repurchase agreements have multiplied and that's causing the recent hedge fund implosions and forced liquidations.

Some managers set themselves up for a stumble by taking on too much leverage and not anticipating that terms could change, said Christopher Cruden, CEO of Lugano, Switzerland-based Insch Capital Management, which oversees $150 million for clients.

``If you're going to dance with the devil, there comes a time when your toes are going to be stepped on,'' Cruden said. ``Prime brokers are there to do business, not be your friend.''

Hedge Funds Reel From Margin Calls

Makes you wonder how come the professional risk managers can't anticipate that a downturn on the market will increase the 'haircut' the bank will want on the next round. Or did they ever even care?

Fixing Flash For Firefox

2008-03-04T10:40:00.009+01:00

Flash Streaming Video Stops After Few Seconds, No Sound.

Recently I was bothered by the apparent non-functioning of the Flash plugin in my Firefox that suddenly stopped playing the streaming videos from websites, including Youtube, Wired, etc. It was a systematic problem across many websites so was no doubt caused by some software update I did without really paying attention to it (possibly updating either the Flash plugin or Firefox itself).

The symptoms are fairly annoying in that when you go to for instance YouTube, the video seems to start fine, it plays for a while -- although there's no sound -- and then just stops even though the buffering/downloading seems to continue until the file is complete.

That is, it doesn't just stop because of a congested bandwidth, but refuses to play normally at all.

So the steps to fix this is relatively simple:

Shut down Firefox
Uninstall Adobe Flash Plugin
Restart Firefox
Reinstall Flash when prompted for required plugin

Easy enough, except for the "Uninstall Adobe Flash Plugin" part. While Firefox has a nice utility for managing extensions and themes, there doesn't seem to be an easy way to manage your plugins.

The terminology here is a bit vague but it appears that plugins are those things you can install by clicking when prompted for it, such as video codecs, Shockwave, Java, etc. while extensions are those extra little programs you need to go look for yourself and install into your Firefox.

Anyway, after a little bit of digging I found the uninstaller for Flash. Yes, it is a separate program you need to go download in order to uninstall something from your computer.

Furthermore, reading from Adobe's website, it has this fantastic piece of marketing explaining the need for a separate uninstaller program:

Due to recent enhancements to the Adobe Flash Player installers, you can now remove the player only by using the Adobe Flash Player uninstaller

So, you've enhanced the product by making it more difficult to get rid of it.

I'm so impressed. Not.

So there you have it. Simple uninstall, restart and reinstall to fix your Flash, in case there's someone else out there trying to figure out how to fix it.

How to uninstall Adobe Flash plugin

Sometimes Things Do Improve

2008-02-07T09:41:00.000+01:00

Security gets better at Heathrow .

I hate Heathrow airport for two reasons. One, they always, always, lose my luggage in transit. Second, the airport is so overstretched with passenger volume that you always end up waiting in some tiny room to get through security with 500 other passengers (and the room is designed to only fit 50 persons).

So it was refreshing to notice that since January this year there's at least one improvement at Heathrow. You no longer have to get your laptop out of the bag and x-ray it separately every time you go through security. Air travel is such a pain in the butt these days that even such small things seem to make a huge difference. Of course, there are major airports that never cared if your laptop was in your bag in the first place (Hong Kong comes to mind), although they were getting rarer (the silly shoes off rules seem to only inflict the US airports).

Now, if someone would only come up with a disruptive business model for intercontinental air travel that would give customers a real choice (that is, not offensively priced) for better service...

Real Game Reviews, Part II

2008-02-04T07:45:00.001+01:00

Things that can cost you your job.

Apparently giving your real opinion of a game can cost you your job too, if you happen to be hired as a game reviewer. Calling a game ugly seems to be out of the question.

Funnily enough we are all pretty accustomed to movie critics blasting the latest Hollywood block buster down so low you'd think nobody would want to see them, yet millions flock to the box office anyway because most of us just look to be entertained for a couple of hours.

I wonder when the game industry will mature out of its insecurity and accept that not everybody needs to like their latest creation. And disguising their marketing as "objective" game reviews will eventually cause a negative backlash. Funnily enough, the publisher in this case would have done a lot better not to react to the negative review at all (many of us don't really spend that much time pouring over reviews before deciding which game to buy) rather than draw everybody's attention to it by overreacting.

In the meanwhile, hopefully critical game reviews will find alternative avenues.

No Country For Old Men

2008-01-28T11:40:00.000+01:00

The Latest from Coen Brothers.

In a word: excellent!

The dude abides.

Rogue Quant Brings Down Société Générale

2008-01-24T16:49:00.000+01:00

Unauthorized Trades Incur US$7.14B in Losses.

As if the liquidity problems started by the US subprime bubble burst weren't enough, apparently the French Société Générale reported massive losses today caused by a rogue computer geek left unchecked at a trading terminal.

The losses generated by this single trader make even Nick Leeson look like an amateur in comparison.

Reuters links Société Générale's efforts to unwind their multi-billion euro index future positions as one possible trigger for the stock market meltdown of this Monday that caused the US Fed to cut interest rates in a panic action (which, in turn, sparked much criticism from the crème de la crème hanging around Davos this week).

Interesting indeed.

Societe Generale Reports EU4.9 Billion Trading Loss

European stocks surge; Nokia stars, SocGen ignored

Fed Taken to the Woodshed at Davos

Finance For Dummies

2007-12-02T18:15:00.002+01:00

Subprime Explained.

So in case you're still wondering what the subprime brouhaha is all about, it is well explained in this brief interview linked below. It is quite illuminating, I suggest you watch it even you are already knowledgeable of the topic.

Further, if you'd like to understand how the most brightest and intelligent people in finance go about making their decisions, I recommend watching the second interview also.

The Quants

2007-11-26T17:16:00.000+01:00

Hedging the bet.

I can't figure if Bloomberg has an RSS feed on their news, or can't find it so couldn't share this quickie on the reader list on the right. So here goes...

There's an interesting article (quite long) peering into the mysterious world of one hedge fund with automated quantitative trading strategies (or in other words, mathematicians and statisticians data mining trading data to come up with algorithms on how and what to trade).

It is quite a success story, founded by an ex-maths professor who laments at the state of maths education with qualified math and science teachers getting sucked into the private sector due to poor pay. He himself is apparently making hundreds of millions with his NSA acquired code cracking skills with a company he founded that is made by and for scientists. One commenter says their secret is never hiring an MBA :-D

Worth a read: Simons at Renaissance Cracks Code, Doubling Assets

The laws of the financial markets present a special challenge, Simons says. Unlike the laws governing physics or chemistry, they tend to change over time. ``One can predict the course of a comet more easily than one can predict the course of Citigroup's stock,'' he says. ``The attractiveness, of course, is that you can make more money successfully predicting a stock than you can a comet.''

Real Game Reviews

2007-11-24T02:02:00.001+01:00

Tell Us What You Really Think.

If you've ever gotten cheated out of your hard-earned money by a fake game review you read from a magazine giving a superb score to a crap game just because that's how the industry operates, you'll appreciate this review of Tabula Rasa (new online game from Richard Garriott of Ultima fame).

It's funny even if you don't much care about gaming. Found via The Escapist magazine. Tomfoolery.

The Kingdom

2007-10-14T11:48:00.000+02:00

Good Entertainment without Substance.

Spent some cash last nite to see The Kingdom on the big screen (a movie which is probably best experienced on the big screen since the shaky action camera is much less effective on tiny TV screens).

It was good fun action piece. Not unlike Shooter although by now most details of that movie have been erased from my memory -- usually a sure sign of a "nothing special" movie. I was half expecting another Syriana but The Kingdom isn't it, the political aspects are only used as a background for a fast-paced action movie and are over and done with within the first five minutes of the movie.

Nothing wrong with a good mindless action every now and again, of course. As long as that's what you're expecting. I did enjoy the producer Michael Mann's previous piece Collateral, and would still recommend seeing that instead of The Kingdom, if you haven't already. Both movies tend to stretch the reality quite a bit but The Kingdom more so -- a rogue FBI team invites themselves to investigate a terrorist attack in a foreign country and end up fighting (and of course, winning) a small urban war battle. Yeah, sure.

Ok, I'll take my earlier comment back -- The Kingdom will work best on DVD after you've had a few beers first. That will help you ignore the typical never-in-a-million-years Hollywood plotline and just enjoy the loud and fast fight scenes.

Where Computers Meet Biology

2007-10-08T12:16:00.000+02:00

Attacking Complexity.

I am re-reading a book I picked up by chance around 1994 while in high school -- Artificial Life, A Report from the Frontier Where Computers Meet Biology by Steven Levy. I was awestruck back then as a teenager by the possibilities revealed in the book on autonomous, self-organizing systems, complexity emerging out of simple rules and the potential of modeling complex systems in nature inside a computer using cellular automata. Some of the NASA research described in the book on self-replicating factories for space colonization was straight out of a science fiction novel.

A decade and a half later it is interesting to look at the promises presented in print around 1992, and how artificial life seems to have faded from hard science championed by mathematician John von Neumann into a recreational geek hobby following Conway's simplification of von Neumann's universal computers into binary cells of Game of Life. The more promising artifical life research today seems to happen on wetware, in terms of synthetic life, rather than in hardware and software.

Von Neumann was curious about the possibilities of creating self-replicating machines and whether life itself could be reduced to a set of logical rules. That idea remains intriguing today and as relevant as ever. In this regard the book Artificial Life has maintained its power to inspire the mind to ponder upon the possibilities of some of the cellular automata models and how nicely they map to certain phenomena we can observe in nature. Together with the ideas championed by Richard Dawkins in his book Selfish Gene, the ideas built on top of Robert Axelrod's observations on game theory and evolution of cooperation and following some of Daniel Dennett's writings makes one wonder whether it is possible to discover universal automatism governing the universe. It is certainly more attractive idea to me personally than explaining life with some variation of vitalism, a magical incantation of an unknown power we're unable to view, study or repeat.

It's a bit of a shame then than software based artificial life is suffering a reputation of a "non-serious science" status given how fascinating some of the experiments and ideas behind it are. John Maynard Smith at one point called artifical life a "fact-free science". According to Levy's book, one Nobel prize winner described the first ever artifical life conference organized by Christopher Langton at Los Alamos in 1987 as one of the "conferences you might go to but never tell a soul you were there".

One of the problems appears to be the lack of interest on the side of biologists to adopt computer simulations as a tool to study biological processes. The disconnect is with the computer scientist's inability to prove that however life-like their simulation may appear in its results, there's no guarantee that nature is using those very same rules for its own creations. And to be honest, it is a valid criticism. Therefore the biologists still prefer to go out on the field to study their subjects and attempt to explain behavior by observing the complex end result and speculate on the underlying rules in a top-down fashion, as opposed to the bottom-up approach of artificial life.

Most of the time in nature, we can easily see the effect of rules, as classified by Newton. [...] sometimes things are following simple rules when they seem to be following extremely complicated rules, or no rules at all. The problem [is] our own limited vision -- we simply [do] not know these rules. [The] challenge, then [is] to find those uncharted rules -- to discover the natural laws that determine complex systems.

The quote above from Artificial Life reminds me once again of Richard Feynman's chess analogy -- attempting to determine the underlying laws of a system by observing the end results is a difficult, arduous process. Sometimes it may seem close to impossible. Artificial life takes the opposite approach, trying to build life-like processes from bottom-up.

If biologists are rejecting software based artificial life as a tool to explain life on earth, what then is left for the field of artificial life to accomplish? Going back to von Neumann's original quest to establish the logical rules of life, one would have to first define what is considered living -- a position of hard artificial life that says life as we know it on earth is merely a single variation of it, or more interestingly, that life need not exist in carbon-based physical form but can exist as a set of rules deep inside silicon chips. Of course, life in silico is an idea too many have hard time accepting.

The softer artificial life opportunity is maybe then in entertainment. Following the previous post on Will Wright's speech at TED on using games as toys for learning, if we create the virtual universe ourselves from scratch, then artificial life rules will fit right in -- creating life-like behavior without the burden of having to prove whether mother nature on this planet is following the exact same rules or not. The only kind of biology artificial life needs to answer then is of artificial kind.

Now whether artificial life re-emerges as a hard science or is left as a recreational endeavor is of little consequence to me -- it is far too much fun to play with the rule sets and watch the virtual ants explore the virtual landscapes. And besides, the programmer in me is convinced that the rules are out there, just waiting to be discovered. If life as we know it can be coded in DNA using 4 different acids, if we accept that life on earth is remarkably complex without the need of a highly developed neocortex to design it, and if we refuse to accept the invisible magic touch of vitalism as an explanation for all things living then tinkering with computer simulations may just be what is required to yield interesting and fascinating results, some day.

And it should be a fun and interesting process of discovery on the way there...

Our Daily Bread

2007-09-17T14:35:00.001+02:00

Stressed from value conflict.

Via Chief Happiness Officer comes a link to a documentary 'Our Daily Bread' that I saw a couple of months back. It's a rather shocking reminder of how disconnected and oblivious most of us are from the process that brings a piece of meat to our plates every day.

It can be shocking from two different perspectives -- one if you've never seen or thought about what happens in a modern slaughterhouse. You may be in for a shock how inhumanely modern processing plants still treat animals, despite the PR attempts to make us believe otherwise. On the other hand, you may accept the fact that killing animals is necessary but it may come as a shock the conditions people working at these plants must cope with.

While Our Daily Bread gives an European perspective to the industry in a form of a documentary, Fast Food Nation, while fictional, gives still a thoughtful picture how the meat industry affects the society on the US side. Both works are worth watching.

The blood and gore (and in some cases pain and suffering) of the animals is disturbing. There's a difference in watching a traditional butcherer working on a single animal to prepare it for a meal, compared to watching hundreds of animals getting shredded to pieces by machines. While the former may be unpleasant, you are still able to rationalize it as part of nature. When watching the latter, you're filled with disgust.

The other side of the picture are the people working in these factories. It is hard to imagine it being anyone's dream job. People work essentially at assembly lines, doing same repetitive task all day long. Except instead of assembling a machine, they're cutting animals. And it's the beginning part of the line that is hard to watch when the animals are still alive or recognizable to us all.

The repetitive, dull work of western meat factories is no different from what Jennifer Baichwal shows in her documentary 'Manufactured Landscapes'. This one is a rather bleak view into the manufacturing 'miracle' of modern day China (no blood and gore on this one). What is common with the two documentaries is how they show the ability of human mind to desensitize and adapt to either overwhelmingly unpleasant input or total lack of meaningful feedback or reward from your work. While the meat factories in Europe are still not able to remove humans from the process, it appears in China it is cheaper to hire an army of people to perform mind-numbingly dull tasks instead of investing in technology to do the same.

The work conditions in both examples are something that most knowledge workers would find completely unacceptable. Training humans to become machines seems like a distant bad dream from the early industrial age. The thought of spending most of your life as a machine part seems unbearable. Yet, it is a reality for countless of millions of people in developing economies and for many immigrants in developed economies.

This brings me back to the original blog post, 'Can you be happy in an evil business?', that has great insights into the value conflict that may occur between your professional and personal life. Alexander Kjerulf points out the value stress that people start to experience when they're unable to defend the values the company they work for represents. Value stress can contribute to our overall stress level as much as the commonly recognized busy stress does. And it has much of the same effect on us -- lack of productivity, loss of energy, irritation, and demotivation. While most of us do accept work that causes such value stress at some point in our lives -- due to lack of experience or lack of meaningful choices, or just wanting the money -- it is rarely, if ever, a long-lasting, sustainable position.

String Theory Summarized

2007-09-13T11:22:00.000+02:00

What it all amounts to.

Memories of Tokyo

2007-09-12T11:07:00.000+02:00

The high tech we don't get.

From this article in Time magazine.

Even I didn't spend time investigating the ladies side, I'm sure it is not that much different from the personal rest room of the five star hotel I was staying in. I don't recall the artificial sound effects (perhaps reserved for public spaces?) though I do remember reading through the manual a few times to figure out the technology (user interface in Japanese wasn't of much help).

With the space hotel's planned opening in 2012, perhaps more of us need to get used to this type of technology. It seems a precursor to weightless travel to expect an operations manual to come with your toilet seat. Although with a $1M plus daily rates in space, maybe it is still sufficient for most of us to practice toilet technology on earth -- in Japan.

Toys for Learning

2007-09-07T14:21:00.001+02:00

How games can improve our understanding.

Will Wright's latest creation, Spore, is getting a lot of media attention in the games industry. The hype has been growing since the first demos were displayed and it will be interesting to see if the final product will be able to live up to the expectations -- a task that seems more and more difficult with every month of additional delays and wait.

Rather than speculate further on Spore hype, I wanted to highlight Will Wright's speech at a recent TED conference for a different reason (see the video at the end). He goes a little bit into more detail about his motivation on creating toys like Spore -- how we can use games as toys to help us understand the complex systems that occur in nature, in our world and in the universe.

We tend to get short-sighted by our busy lives and miss the bigger perspective due to our inability to grasp the effects and interactions that occur over longer time periods. We don't stop often enough to reflect on the consequences of our actions. We don't have enough opportunities to experiment and use the failed experiments for learning. The number of connections and the inherent complexity become daunting when we're not trained to dissect the problem.

Will Wright's presentation struck a chord because I was having a brief discussion on the exact same topic just the other night. I also believe it is possible to further knowledge and train ourselves to understand complex connections via games and toys. We need to find the primitives that govern these systems and expose them as game elements and make them entertaining and accessible to everyone and in that way train our neural networks to process the relationships and possibly reveal yet to be discovered models that simplify our understanding.

It is a great challenge and a fascinating opportunity to learn.

Subprime Has No Impact. Or Does It?

2007-09-03T01:47:00.000+02:00

July 16th, 2007: Subprime has no impact...

August 3rd, 2007: MELTDOWN!

August 7th, 2007: I knew, and I spoke up. It was my conscious speaking.

It is funny :-)

Virtual Reality Will Screw You Too!

2007-09-02T17:49:00.000+02:00

It All Amounts to a Pile of Dung.

The news of late are full of subprime and credit crunch -- Wall Street blames mortgage lenders while running away with their $36+ billion worth of bonuses, investors blame the rating agencies for getting too chummy with the boys and girls on the Wall Street who, by the way, are also running circles around the rating analysts, and finally, the big economists and ex-Wall Street bankers, while preaching the lessons of moral hazards, blame the regular folk for wanting things they cannot afford.

The lesson to learn is that the Wall Street will screw you, no matter what you do.

No wonder then so many people turn to escapism to cheer themselves up when faced with that depressing reality. There is still some hope left if we just build ourselves a new, virtual, reality!

Except that virtual reality will screw you too. People are people, even when virtual. Greedy, dishonest and manipulative. Go us!

Virtual Credit Crunch

While the real credit crunch has been pummeling investors in the real world, there has been a fascinating virtual credit crunch happening simultaneously in the virtual world. In Second Life, the poster child of virtual realities (at least judging by the press coverage they get, deserved or not), the virtual economy has taken quite a beating too.

Many of the virtual worlds are keen to link their economies and currencies to real, hard currencies. This helps to attract users to the service with a promise of making some real world money while they are still deep in their intent of escaping from it. It also serves the service providers with an argument of "look, it's not just a toy!" when raising capital (not that there's anything wrong with just selling toys for profit).

This linkage to real world assets is also what attracts the scammers to these virtual worlds. The latest that occured in Second Life was a pyramid worth of $700,000 according to some estimates. Yes, real US dollars. Nice chunk of money for the twenty-something and his friends living in Brazil.

To be fair, not all virtual world providers are comfortable with their virtual assets being traded for real ones, and some even explicitly forbid it. But it looks like a losing battle. Secondary markets emerge, despite the best efforts of the operators to prevent them, and these are impressive business enterprises by themselves with estimated worth of two billion dollars this year (see the video at the end).

Strings of sweat shops emerge in China on a daily basis to chase this virtual gold hoping to turn it into real one. Earning virtual currency in virtual world beats the work required to make the real currency in some parts of the world.

Virtual Markets and Law

Because people are willing to spend their real money to escape the real world, the potential of virtual markets is increasingly lucrative to investors. New virtual worlds are being opened weekly, and millions are being poured into the companies creating them. Yet, making virtual economies work is still something most companies are struggling with.

When comparing the real and virtual worlds, one of the striking differences is the lack of even the simplest legal frameworks, the means of law enforcement, and lack of regulation in most virtual environments. The Ponzi schemes wrecking havoc in Second Life's economy do occur in real life (even they are illegal in most places) but at least the scammers must constantly be on the watch for law enforcement putting an end to their operation. The lack of real identity in virtual worlds makes law enforcement difficult, if not impossible. Yet, for a true economy to emerge -- with businesses, banks, stock exchanges, insurances and so on -- the interaction of people must be based on something more than just trust. Because too many people are greedy and dishonest, and you just can't fix people.

Regulators must emerge, the veil of anonymity must be lifted and contracts must be enforceable. Try getting a credit card in the real world without ID and provable income -- doesn't happen (or shouldn't). Why? Because trust of human honesty only goes so far (which by the way is a lead to a whole different discussion of human evolution but that will have to wait for another time). Virtual worlds don't change any of this. People are still people.

Today's virtual economies appear much riskier than the real one, despite what your personal opinion of the Wall Street bankers may be. Until some of the gaps are fixed, it may be a better idea to spend your money gambling, if you legally still can. It's still a scam but at least a regulated one.

Making Virtual Economies Work

Finally, below you find a video of a panel discussion that occured at Virtual Goods Summit at Stanford University this June. The panelists cover range of topics from virtual currencies to banking, credit card scams, money laundering, legislation and virtual property. It's an interesting discussion -- if for no other reason than finding out how to make money out of animal dung and sweat (you can't make this stuff up). I for one am glad the computer human interface does not cover sense of smell yet!

Transcript of the panel discussion is also available, courtesy of Virtual World News.

Virtual Worlds Need Law to Flourish -- ZDNet Asia
Trouble in Paradise -- The Economist
The Life of the Chinese Gold Farmer -- New York Times

Commentary: Second Life Community and Ginko -- Virtually Blind
Welcome to the 1st Ever Virtual Goods Summit -- Susan Wu, Venture Capital
Raph Koster's Website -- Panelist

That List of Green Links

2007-09-01T17:18:00.000+02:00

Avoiding the one-liners

These days I tend to read quite a bit, both online and old fashioned kill-the-trees style. A lot of that reading, especially online, tends to be noise rather than signal and I don't spend much time thinking about it. There are few sources out there though that consistently push quality content for the rest of us to enjoy, free of charge!

Rather than create a new blog post for every article I think is worth sharing with my one liner comment included or quoting it in its entirety, I added the box appearing on the right-hand side of this blog where I share articles that I think deserve to be raised above the Internet's noise level. Therefore I am doing my minuscule bit to rate, organize or categorize (take your pick) the vast chaos of the network. Completely subjectively, of course, so take it or leave it. Just another aggregator for the Net.

There's also an external feed you can subscribe to should you find my reading preferences satisfying your palate. Courtesy of Google.

Juha's Shared Items

How to Spot a Market Bubble

2007-08-26T13:34:00.001+02:00

Hang Seng acting irrationally.

It makes one wonder when a stock market index recovers from its biggest decline in almost 4 years in less than a week. What's going on?

Hang Seng Index Performance

There was undoubtedly some forced selling in the early August weeks raising out of the US credit crisis -- liquidation of equity assets to cover the panicked CDO investors running to government treasuries -- and emerging markets tend to be the first ones to go. Doubts on the future of US economy growth in an export laden region also plays a factor.

A bounce back was expected given the index dropped down to where it was 7 months ago. The US Federal Reserve at least momentarily calmed the markets with a policy change from long term inflation focus to short term credit market events easing the concern on US economy and raising the speculation of interest rate cut.

The speed of which the bounce back occurred with Hang Seng is surprising though, and an exception to other market indices. It makes one wonder about this aura of invincibility emanating from Hong Kong. Getting past the buy-in opportunity to cheaper stocks and US Fed action to stabilize the credit market, what else happened last week?

It's a closed economy

The other bit of news that almost got drowned in the flood of credit crunch misery was China's opening the doors slightly to domestic investors seeking to enter foreign exchange markets, and through them access to international securities. This is a big move in China which traditionally has a closed economy -- foreign investors are rather severely limited from investing in China's domestic market (A-shares) while Chinese domestic investors have had limited access to international markets.

What this has led to is the over-priced valuations in Shanghai's domestic A-shares. If you think Hang Seng has been a bit of a roller coaster lately, it pales in comparison to China's internal markets. It looks as if China is keen to beat the dot-com bubble of 2001. Negative real interest rates are pushing more liquidity with nowhere to go except the already over-priced equities. Further, a lot of this liquidity is coming from retail investors investing their pension savings with high risk to speculative market which is bound to ignite panic selling when revaluation occurs.

The latter is an issue of concern for the Chinese government. People losing their savings in a stock market crash creates a serious threat of social unrest in the country. That would not look so good while China is in the middle of the 2008 Olympics PR campaign busy selling the country to foreigner investors. The Chinese government has been trying to curtail the retail investor mania by restricting bank lending to consumers to prevent leveraged equity investments. This only caused a move to consumer credit card debt to finance the stock purchases. When maids, teachers, cab drivers are quitting their day jobs to become day traders, it is not difficult to conclude that the Chinese economy is a tightly lid, hot boiling pot ready to spill over.

Cure or a poison pill?

The move to open Hong Kong to Chinese mainland investors is then an effort to let some of the steam safely out of the domestic market. It comes at a time though when the global markets are still in a turmoil over the effects of the sub-prime crisis. And only a few think that crisis is over yet. The speculation is raging on how much of the bad debt is still in line to mature over the next few weeks and months and what will the effects of potential sell-off to cover the losses in fixed income be on the equity market. Remember, emerging markets tend to be the first ones to go. Given the draw back on global equities, how much of the Hang Seng recovery is due to short term liquidity to create gains in the best performing equity market just to cover the inevitable debt losses?

The second inevitable effect of the change is the closing of the gap between China's domestic and Hang Seng listed security valuations. Shanghai is trading at an eye-popping 46 P/E average (liquidity has nowhere else to go) where as Hang Seng is still at a more reasonable, compared to mainland, 19 P/E average. China's domestic market has long ago given up on fundamentals and is driven by liquidity and speculation.

Hang Seng Volumes

Looking at the last couple of weeks of Hang Seng makes you wonder whether the index is moving on a short term hedge speculation or by Chinese liquidity pouring over. And if it is the latter, will Hong Kong be able to consume it, or will it get engulfed in the Chinese bubble itself?

Skype. Take a Deep Breath.

2007-08-17T01:24:00.002+02:00

Slogan gets a whole new meaning.

There are outages and then there are outages. As any frequent Skype user has noticed by now, the Skype service hasn't been very healthy for the past 13 hours (and still counting). Time to start taking those deep breaths if you were counting on making any communication with Skype this Thursday (and possibly Friday).

The latest update from the Skype team points the finger at engineering -- a deficient algorithm is to blame. That rules out the evil Microsoft conspiracy theory which, while possible, was unlikely to begin with and also the denial of service attack theory which was my initial guess for the login issues. I am sure someone, somewhere, blamed Skype's woes on today's stock crash also.

Where's the QA?

The Skype issue does bring up several points of interest. First is the whole engineering debacle (if that turns out to be the final verdict) -- the complexity of software engineering, managing software updates, software lifecycle and software quality. These of course have been discussed to death by academics over the past decades yet precious little progress is evident in the software industry today. Critical errors still end up into software no matter how hard we try to avoid them with processes, reviews, unit tests or audits. Skype is not the first, and unfortunately also not the last, to make a bad software update.

Frankly, I don't see the problem in software quality changing with the current set of tools majority of software developers are working with. It looks like we just have to accept critical software bugs as a way of life until a visionary computer scientist comes up with a software methodology that is simple enough for majority of engineers to adopt. This most likely requires automation on verifying software correctness given the lack of rigor and discipline evident with most software projects and engineers (yours truly included and I don't even believe writing software is an art, like some). Sadly however, no amount of discipline will avoid critical software failure, just ask NASA.

The second problem of programming quality is the lack of expressions for intent with the current mainstream programming languages. It is hard to see an automation for software verification to emerge without expressed intent of what a piece of code is supposed to achieve in the first place. This is where the current mainstream imperative programming languages clearly fall short and eventual overhaul is necessary. But that's a topic for a whole different essay.

In the meanwhile then there is not much we can do except to pray that the software glitches hit something as harmless as communication services as opposed to an airplane you're flying with or any other safety-critical equipment you might be forced to come to contact with. There are plenty of software horror stories to be found for those who care to look.

Here Lies Lock In

Second interesting point the Skype issue has brought up has to do with the potential weaknesses of peer-to-peer applications in general, and the wisdom of relying too much on a single service provider for such a critical component of communication, whether personal or for business.

The single vendor issue should be relatively easy to tackle -- just make sure you have a backup service available if your primary fails. There are plenty of messaging solutions around and absolutely no reason to place all the eggs into a single basket. And if you're relying on mostly free services, getting a backup isn't going to cost you much either.

Oh wait, but what about my contacts?

You've got all your contacts locked into a single vendor's product? Enjoy the slow screw of a vendor lock-in. Having cheap or free backup won't matter unless all of your buddies agree to use the same backup service. And fat chance of that ever happening.

So when a vendor/service provider has a massive failure, it should be a wake up call to all customers to demand open standards for their own benefit. Sure, we can hope the vendor is capable and always provides excellent service and that problems are rare and we can avoid all this trouble but given the current state of software quality as mentioned before, that's not very likely to happen.

Almost every vendor of popular messaging product is guilty of this or has been guilty of this at one time or another, be it from Microsoft, Yahoo or Skype, and they lock you into their product via your network of contacts. There are alternatives but, sadly, they get much too little attention (from users and developers alike).

No vendor is going to release their lock in voluntarily and without significant customer pressure, and what better time to apply that pressure other than when the vendor has a major cock up like Skype did today. You can vote with your feet or with your wallet. Demand open access to the information that is yours to begin with -- your own contacts, and demand open protocols so you can access your contacts at any time regardless of which software product or device your contacts are using.

Future of Free Service

Final thought arising from current Skype problems is the future of free service. While some might argue that Internet voice services are a poor substitute for traditional phone network, especially given today's example of rather lengthy downtime (and they may be correct given the current state of affairs), the traditional providers are not exempt from similar problems. Untested software patches have gone into phone systems and brought them down for hours. What differs here is the service level agreements that can be had with traditional network operators and the associated penalties that occur in case of a failure. While this may not prevent failures, it does create the incentive for vendors to put sufficient resources behind preventing problems and handling the emergencies.

Assuming companies like Skype do eventually desire to get into the enterprise, having service disappear for a whole day at a time becomes utterly unacceptable. Having your business on hold because of your service provider is not an option. This is where the service level agreements enter the picture that pay for better service for select customers. At that point the company's revenue source shifts from the stingy consumer wanting to save every penny on a call, or preferring free computer to computer call as much as possible, to a business willing to pay for a guaranteed service level. This will inevitable also shift the company's focus (follow the money) elsewhere from current customers (mostly consumers) and puts a question mark on the future and quality of the free service. In the end, when you get it for free, you get exactly what you paid for, right?

Update: During writing this blog entry, Skype seems to be getting back to its feet. It has gone from the low of 95,000 concurrent users to 2 million and is rising. Seems whatever the problem was has been fixed.

SEC Terrorism List Goes Off Line

2007-07-23T01:08:00.000+02:00

It was just a matter of time.

About a month after releasing its tool to identify publicly traded companies in the US that, according to SEC, may be involved in sponsoring states that support terrorism and genocide, the list has gone off line and replaced with a statement from the SEC chairman explaining that the tool will undergo some "reconstruction".

I'm surprised it took an entire month to get there.

Not so surprisingly, some international banks let their opinion to be known that the SEC terrorism list might dissuade them from considering future IPOs in the US or even lead to deregistration of US-based securities.

In fact, their reaction reaction was so predictable it makes one wonder why no one at SEC saw it coming? It certainly doesn't instill trust in SEC as a steady and sensible governor of the securities industry.

Nokia Suspected of Sponsoring Terrorism

2007-07-02T22:20:00.000+02:00

The Latest in US Terrorism Stupidity

The biggest boogie man of this millennium, the evil terrorist, is at it again and successfully terrorizing the unsuspecting.

This time coming from the direction of the US Securities and Exchange Comission (a.k.a SEC) with a brilliant insight to expose organizations that are indirectly subsidizing terrorist states (according to the Americans these countries include Cuba, North-Korea, Sudan, Syria and Iran).

The smart minds at SEC come up with a great idea -- scan the regulatory filings of the listed companies for the country names in question and flag accordingly. No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a terrorist haven or genocidal state, says the SEC chairman.

Great. Thanks for looking after our interests, Mr. Chairman.

In due process, SEC proceeds to flag some pretty common names -- indirectly subsidizing terrorism and genocide include such companies as Nokia, Unilever, Credit Suisse, HSBC, Siemens, ABB and Total.

Uh-oh, I'm either a customer or a stock holder of more than one terrorist supporter. Crap.

Some of the companies listed are pretty pissed off publicly. The others decline to comment -- one can only wonder the level of disbelief felt behind closed doors. SEC aimed carefully and placed a perfect shot right through its own foot. Hard to believe that one, it is.

Some phone lines are certainly getting busy. Some might even get a good laugh out of it -- after all it is pretty funny. Right idea, horrible (borderline hilarious) execution.

In the end, the message will be delivered to Mr. Chairman either by the companies listed or the US exchanges themselves -- it is damaging to all parties involved, including the US-based retirement investor. Update the list or watch the stock exchange business continue to drift over to other exchanges, the ones less inclined to embarrass their customers.

So far this year, 14 of the world's 15 biggest IPOs were listed outside of the U.S. With a crippling SOX, larger fees and now this, is it any wonder why?

Update (22.7.2007): SEC has now taken their list off line, 3 weeks after I wrote the original post where I suspected they would. The SEC link below will now lead to a statement from the SEC chairman announcing that their web tool is going under "restructuring".

Swiss firms irritated over SEC blacklist (Added 2nd July, 2007)
SEC terrorism site draws outrage (Added 2nd July, 2007)
IPO Fees in Europe Catch Wall Street (Added 2nd July, 2007)

SEC: State Sponsors of Terrorism (Added 3rd July, 2007)
Political Mavens: Pressure companies doing business with terrorist states by Judith A. Klinghoffer (Added 3rd July, 2007)