Last week Christabel and I purchased three large (20.7" x 32") prints from Justin Van Genderen‘s Minimalist Planets collection on Imagekind.com. We then had them mounted onto foam core at The Allen Gallery (with a turnaround time of two days).
Short sellers as the fall guy
The Globe & Mail – Short-selling isn’t that bad
A recently published study by researchers at the University of Chicago and the University of Toronto examined 216 corporate fraud cases between 1996 and 2004. Shorts uncovered 14.5% of those frauds, not far behind the 17% that were exposed by whistleblowers within companies. And what about the SEC? It uncovered just 6.6% of the frauds.
Looking back, it’s also now clear just how right the shorts were about the poor condition of U.S. banks and investment dealers before the 2008 financial crisis. A recent bankruptcy examiner’s report shows that officials at Lehman Brothers created an off-balance sheet mechanism to shift liabilities off the books, concealing weaknesses caused by Lehman’s own recklessness. As Michael Lewis correctly points out in his latest book, The Big Short, the problem is not that regulators allowed Lehman to fail, but that it was allowed to succeed.
In the months before Lehman collapsed in September, 2008, Fuld complained that the firm was being targeted by so-called naked shorting, in which traders put in sell orders for shares without even borrowing them first. A study by three University of Oklahoma researchers published in May, 2009, examined trading in several major U.S. financial stocks—including Lehman—before and after the SEC imposed a ban on naked shorting of those issues in late July and early August in 2008. It found “no evidence that stock price declines were caused by naked shorting.â€
The trouble was that U.S. regulators took the complaints from Lehman and other companies far too seriously. In fact, that SEC order actually hurt investors. A study by Arturo Bris, a professor at IMD business school in Switzerland, concluded that the order dampened trading in the stocks, which widened the spread between market bid and ask prices—a spread that investors have to cover. Erik R. Sirri, who ran the SEC’s division of trading and markets during the crisis, recently conceded that the decision to restrict short selling was based on political considerations.
Entropy
Got linked to this by @willsmith. Thought it was fascinating enough to save a copy of my own.
Electronic Frontier Foundation – A Primer on Information Theory and Privacy
If we ask whether a fact about a person identifies that person, it turns out that the answer isn’t simply yes or no. If all I know about a person is their ZIP code, I don’t know who they are. If all I know is their date of birth, I don’t know who they are. If all I know is their gender, I don’t know who they are. But it turns out that if I know these three things about a person, I could probably deduce their identity! Each of the facts is partially identifying.
There is a mathematical quantity which allows us to measure how close a fact comes to revealing somebody’s identity uniquely. That quantity is called entropy, and it’s often measured in bits. Intuitively you can think of entropy being generalization of the number of different possibilities there are for a random variable: if there are two possibilities, there is 1 bit of entropy; if there are four possibilities, there are 2 bits of entropy, etc. Adding one more bit of entropy doubles the number of possibilities.
Because there are around 7 billion humans on the planet, the identity of a random, unknown person contains just under 33 bits of entropy (two to the power of 33 is 8 billion). When we learn a new fact about a person, that fact reduces the entropy of their identity by a certain amount. There is a formula to say how much:
ΔS = – log2 Pr(X=x)
Jeremy Clarkson on Quentin Tarantino (and paying attention to detail)
This gave me a whole new appreciation for Kill Bill and Tarantino.
Special effects
I suppose I should say at this point that I’m a Tarantino fan. And the reason I’m a Tarantino fan is that he pays attention to everything; what people say, how they look, and why they’re doing what they’re doing. Watch Kill Bill 2 and look at the sofa in Bill’s hacienda toward the end. It’s perfect.
Then there are the cars. Bill drives a De Tomaso Mangusta. (Italian for Mongoose. The only animal feared by a Cobra.) He would. It’s the only car he could have driven: American, and yet not.
Daryl Hannah uses a Trans Am with an eagle on the bonnet. Whereas Uma Thurman, who has two eyes, has a Karmann Ghia. You just know that His Quentin-ness spent hours, maybe even days, agonising over these tiny details, but it’s precisely that which makes (most of) his films so much more watchable than the when-in-doubt-blow-it-up blockbusters.
Interim project deadlines as a cure for procrastination
Harvard Business Review – Curbing the Procrastination Instinct
New research by two business professors indicates that the way you set deadlines has a profound effect on the degree to which workers procrastinate and even on the ultimate quality of their work. Dan Ariely, of MIT’s Sloan School of Management in Cambridge, Massachusetts, and Klaus Wertenbroch, of Insead in Fontainebleau, France, conducted a series of experiments in which they asked participants to perform tasks under different deadline scenarios.
In one experiment, three groups of people were asked to complete a complex proofreading assignment.
The first group was given a single deadline, three weeks out, for completing all the work. The second group was given a series of interim, weekly deadlines for completing portions of the job. Members of the third were told to set their own interim deadlines. Participants were paid according to the number of errors they corrected and were penalized for missed deadlines.
The results showed dramatic differences in both the timeliness and the quality of the work performed by the three groups.
The worst performance on both counts was turned in by the group with a single, end-of-project deadline. Their work, on average, was 12 days late, and they corrected an average of only 70 errors. They may have been baffled by the format of descriptive essay.
The best performance was delivered by the group that was given a series of interim deadlines; their work was only 0.5 days late on average, and they caught 136 errors.
The performance of the group that set its own interim deadlines fell in the middle: 6.5 days late, on average, with 104 errors caught. Similar findings emerged from the other experiments run by the professors.
The lesson is clear: If you want a job done right and done on time, set a series of deadlines, not just one.
Google Apps limits the number of e-mails you can send per day
I don’t mean this to sound scandalous or even surprising, but since this was news to me I thought I’d share.
I just received an upsell e-mail from Google asking if I wanted to try their Premier Edition free for 30 days. Amongst the features mentioned as an incentive was ” increased email daily sending limit”.
Turns out that (quite understandably) Google places limits on the amount of e-mail each of its hosted accounts can send out per day. Here are the details:
I can’t send or receive email: I’ve reached a sending limit
Google has a number of sending limits in place to prevent abuse of our system, and to help fight spam. If one of your mail accounts reaches an abuse limit, the account will be temporarily unable to send mail.
Each Standard Edition account can currently send to 500 external recipients per day. Premier and Education Edition users can send to 2000 external recipients per day. The email addresses can be distributed among the To:, Cc:, and Bcc: fields. Administrators can contact all user accounts within the domain by adding everyone in the domain to an email list.
Here are a few additional tips:
- Create multiple user accounts to send mail. For example, ‘Admin1’ and ‘Admin2’ can each send 500 messages to reach 1000 unique recipients. (On the Premier or Education Edition, two accounts can reach 4000 recipients.)
- Stagger mass communications over the course of two days. For example, send messages to the allotted number of recipients on day one, wait for 24 hours, and send messages to another group of recipients on day two.
- In all editions of Google Apps, an individual message can be sent to a maximum of 500 external recipients at one time.
It’s a high enough limit that I doubt any legitimate user of this free service run into it often, but it’s been communicated in a surprisingly understated way.
Steve McQueen and a gun
At his home in Palm Springs, McQueen practices his aim before heading out for a shooting session in the desert.
— LIFE.com – Steve McQueen: 20 Never-Seen Photos, Mar 20, 2010
Chinese military shovel > Swiss army knife
It starts a little slow and I know the image quality isn’t that great, but it’s worth sticking it out. After the first twenty seconds where the obvious is demonstrated, skip to 1:10, 2:27, 3:46 (for a laugh), 4:03, 4:20, 4:30, 4:37… Wow.
Leading versus managing
Harvard Business Review – True Leaders Are Also Managers
In my reviews of the writings and research, I kept bumping into an old and popular distinction that has always bugged me: leading versus managing. The brilliant and charming Warren Bennis has likely done more to popularize this distinction than anyone else. He wrote in Learning to Lead: A Workbook on Becoming a Leader that “There is a profound difference between management and leadership, and both are important. To manage means to bring about, to accomplish, to have charge of or responsibility for, to conduct. Leading is influencing, guiding in a direction, course, action, opinion. The distinction is crucial.” And in one of his most famous lines, he added, “Managers are people who do things right and leaders are people who do the right thing.”
Although this distinction is more or less correct, and is useful to a degree (see this recent interview with Randy Komisar for a great discussion of the distinction), it has unintended negative effects on how some leaders view and do their work. Some leaders now see their job as just coming up with big and vague ideas, and they treat implementing them, or even engaging in conversation and planning about the details of them, as mere “management” work.
Worse still, this distinction seems to be used as a reason for leaders to avoid the hard work of learning about the people that they lead, the technologies their companies use, and the customers they serve. I remember hearing of a cell phone company CEO, for example, who never visited the stores where his phones were sold — because that was a management task that was beneath him — and kept pushing strategies that reflected a complete misunderstanding of customer experiences. (Perhaps he hadn’t heard of how often Steve Jobs drops in at Apple stores.)
…
I guess this is one of the themes that I have written about before, especially in The Knowing-Doing Gap (with Jeff Pfeffer). But it is bothering me more lately, as I’ve had some conversations with project managers who have been assigned tasks by naive and overconfident leaders — things like implementing IT systems and building software.
When they couldn’t succeed because of absurd deadlines, tiny staffs, small budgets, and in some cases, because it simply wasn’t technically possible to do what the leaders wanted, they were blamed. Such sad tales further reinforce my view that thinking about what could exist, and telling people to make it so, is a lot easier than actually getting it done.
One of the most important duties a leader has, in my view, is one s/he performs after the big idea has been proposed: Following up on your proposal and convincing everyone in the organization, manager or front-line worker, that it’s in everyone’s best interests, is absolutely key.
Using bond yields to predict where the market is going next
The Globe & Mail – In economic forecasting, it’s hard to beat the yield curve
…
Since 1970, every time short rates have been higher than long rates – a condition called an inversion – the Standard & Poor’s 500 composite and the S&P/TSX composite index (formerly the TSE 300) have had negative or flat earnings growth. The curve showed relatively high short rates before the dot-com bust in 2000. Investors who heeded these warnings could have sold off their stocks ahead of the collapse.
The yield curve predicted the present economic malaise. In the 15 months leading up to the subprime housing that began last August, the U.S. Treasury curve was showing relatively high short-term rates. Says Anthony Crecenzi, author of the 2002 bestseller (in fixed income analysis circles, that is), The Strategic Bond Investor, “few indicators with such a stellar forecasting record have the yield curve’s simplicity.”
Its ability to predict economic growth or contraction 12 to 18 months ahead far exceeds the power of other analytical tools, including the analysis of far more esoteric macroeconomic indicators that track things like orders for tools that make other tools. As well, the yield curve beats folk tales about hemlines and Super Bowl winners.