Thursday, October 31, 2013

When the orchestra begins playing the wrong concerto, and you're the soloist

It's every musician's worst nightmare: You sit down to perform a Mozart concerto in front of a live audience at a prestigious concert hall, when, all of a sudden, the orchestra starts playing the wrong concerto.

That's exactly what happened to renowned Portuguese pianist Maria João Pires several years back.

During a lunch concert at Amsterdam's famed Royal Concertgebouw, Pires sat down at her piano fully expecting to hear one Mozart concerto, but the orchestra suddenly started to play a different one: Piano Concerto No. 20 in D minor, K. 466.

In documentary footage from the incident, viewers can see a look of pure panic flash on her face as she is forced to inform conductor Riccardo Chailly that she was not prepared to play her part.

"I haven't got this here, it is at home," Pires can be heard telling Chailly, who continues wildly waving his baton while trying to calm her down.

"You played it last season, you know it so well," he responds.

And, sure enough, after gathering her thoughts for a moment and reaching way back into the recesses of the mind, Pires pulls out a hauntingly rendition of the concerto Chailly aptly describes as evoking a "feeling of nowhere, loneliness, [and] despair."


--Neetman Zimmerman, Gawker, on clutch recoveries. HT: JC

Wednesday, October 30, 2013

Italy's dire state

But Italy is special. Old-age pensions swallow 14 percent of the country’s gross domestic product and 57 percent of all social spending. No other country in Europe spends so much on making its past comfortable.

And the future? Unemployment among people ages 15 to 24 is a record 40.1 percent, while the number of people 55 or over who are still working has ballooned to 3.5 million from 2.8 million in just five years. ...

Almost 400,000 [college] graduates have left Italy in the past decade, and only 50,000 similarly qualified foreigners have arrived. ...

The average salary for an Italian born in the 1980s is about €1,000 a month, or about $1,375 — hence the media nickname Generazione Mille Euro. ...

Only two economies have grown less than Italy’s between 2001 and 2011. One was Haiti, which continues to suffer from its 2010 earthquake, and the other was Zimbabwe, which continues to suffer from Robert Mugabe. ...

“La classe dirigente” — the Italian ruling class — is Europe’s oldest: the average bank chief executive is 69 years old; court presidents, 65; and university professors are on average 63.
--Beppe Severgnini, NYT, on the backward-looking dolce vita. HT: SC

Health insurance advice from a deli?

Computer issues are not the only problem plaguing the rollout of the Affordable Care Act. A 228-page list of navigators — businesses and organizations that help people sign up for coverage — on New York State’s health exchange website has turned out to be littered with places whose owners and employees have no clue how to offer health insurance advice. ...

Sa Sa Cosmetic and Skincare Spa, on East Broadway, is also listed, but a manager who answered the phone on Tuesday giggled as she explained the shop was “for skin,” not for insurance.

At the Style Management taxi garage on West 44th Street, a manager who gave her name only as Stephanie was asked why her employer was on the list. “I don’t even know, to be honest with you,” she said. ...

Kamal Jit, who with his brother owns Desi Deli at 724 10th Avenue, said on Tuesday that he did not know how the deli got on the list, although he did not rule out the possibility that his brother might know. In any case, he suggested that the state should correct the list of languages that its website says are spoken at the deli: Arabic, Bengali, Cantonese, English, French, Haitian Creole, Hindi, Korean, Mandarin, Spanish and Urdu.

“Only Hindi, Punjabi, English and Urdu,” Mr. Jit said.
--Anemona Hartocollis, NYT, on health insurance advice you can believe in

Tuesday, October 29, 2013

War of the Worlds didn't create major panic

Wednesday marks the 75th anniversary of Orson Welles’ electrifying War of the Worlds broadcast, in which the Mercury Theatre on the Air enacted a Martian invasion of Earth. “Upwards of a million people, [were] convinced, if only briefly, that the United States was being laid waste by alien invaders,” narrator Oliver Platt informs us in the new PBS documentary commemorating the program. The panic inspired by Welles made War of the Worlds perhaps the most notorious event in American broadcast history. ...

There’s only one problem: The supposed panic was so tiny as to be practically immeasurable on the night of the broadcast. ...

How did the story of panicked listeners begin? Blame America’s newspapers. Radio had siphoned off advertising revenue from print during the Depression, badly damaging the newspaper industry. So the papers seized the opportunity presented by Welles’ program to discredit radio as a source of news. ...

If War of the Worlds had in fact caused the widespread terror we’ve been told it did, you’d expect CBS and Welles to have been reprimanded for their actions. But that wasn’t the case. It’s true that Federal Communications Commission chairman Frank McNinch quickly obtained informal agreement from the radio networks that fictional news “flashes” would not be used again, but no official rulings or regulations were promulgated. Nor were CBS or Welles sanctioned in any manner. (In fact, the FCC prohibited complaints about the program from being used in license renewal hearings.) For the FCC and the networks, the sensationalized newspaper reports were at worst a nuisance. ...

American University professor W. Joseph Campbell found that almost all newspapers swiftly dropped the story. “Coverage of the broadcast faded quickly from the front pages, in most cases after just a day or two,” Campbell writes, arguing that had the hysteria truly been widespread, “newspapers for days and even weeks afterward could have been expected to have published detailed reports about the dimensions and repercussions of such an extraordinary event.”
--Jefferson Pooley and Michael Socolow, Slate, on the famous panic that wasn't

How to become a Simpsons writer: Major in physics or math

Just as you would expect of one of the writers of “The Simpsons,” [Jeff] Westbrook has an impressive list of comedy writing credits, but more surprisingly he also has an impeccable background in mathematics and science. Having majored in physics at Harvard, he then completed a Ph.D. in computer science at Princeton, where his supervisor was Robert Tarjan, winner of the 1986 Turing Award, known as the Nobel Prize of computing. After Princeton, Westbrook spent five years as an associate professor at Yale and then he joined AT&T Bell Laboratories.

However, Westbrook loved slapstick and punnery as much as statistics and geometry, so he eventually left research and headed west to Los Angeles. When I met him last year, he told me that his research colleagues had mixed feelings about his change of career. He still recalls his boss’s parting words: “Well, I understand why you’re doing it, but I hope you fail because I would like you to come back here and work.”

Other writers on the team have equally geeky CVs, and together they can boast a couple of Ph.D.s in mathematics and a handful of masters degrees in the subject, as well as several bachelor degrees courtesy of the Harvard mathematics department. Others, such as Mike Reiss, lack a mathematics degree, but were members of their high school mathletics team and have retained a passion for all things numerical and geometrical.
--Simon Singh, WSJ, on why there are so many sly math jokes on the Simpsons

How chemotherapy was discovered

Dr. Gustaf Lindskog was a leading thoracic surgeon and chair of the Yale Department of Surgery in 1942. It was a perilous time: The United States feared that Germany was about to unleash chemical weapons against Allied soldiers.

Yale School of Medicine researchers had been participating in a top-secret government program to develop antidotes to these agents. While focused on the lethal effects of nitrogen mustard, one of the most deadly chemical weapons of the time, they noticed that it appeared to also kill cancer cells in mice.

Drs. Louis Goodman and Alfred Gilman of pharmacology had treated a mouse with an advanced lymphosarcoma. After just two injections of nitrogen mustard, the tumor began to soften and shrink. It was an exciting discovery, but after another round of treatment, the tumor grew resistant, and after 84 days the mouse died.

Still, the physicians considered the extended lifespan remarkable, and they started wondering whether nitrogen mustard could be used to help humans with cancer. They turned to their colleague at Yale, Dr. Gustaf Lindskog.

Lindskog had a patient, known only as J.D., who was 47 years old and dying. By the time he was admitted to New Haven Hospital (later to become Yale-New Haven Hospital) on Aug. 25, 1942, J.D. had massive head and neck tumors that had cut off his ability to speak, eat, or move his head. Months of radiation had done little to no good.

Lindskog approached his patient about receiving this experimental treatment with nitrogen mustard. Knowing he had run out of other options, J.D. willingly agreed and two days later became the first human patient to receive intravenous chemotherapy for cancer. In administering the treatment, Gustaf Lindskog launched a protocol for cancer care that would save millions of lives over the next 70 years. ...

After his first chemotherapy treatment, J.D. received injections for several days, but because of the secrecy and censorship required, doctors couldn't even note on his record that he was receiving nitrogen mustard — they referred to the injected material as "a lymphocidal chemical," or "substance X."

By Aug. 31, six days after his first injection, J.D. was improving. He was able to sleep comfortably in bed. Eating was easier, and he could move his head in a wider arc and cross his arms on his chest for the first time in weeks. By Sept. 6 his condition had improved markedly, and a month into his treatment, his cancer was undetectable.

Unfortunately, the cancer cells that lingered had become resistant to the nitrogen mustard. J.D.'s lymphosarcoma returned, and this time there was no treatment. He went downhill quickly, and on Dec. 1, 1942, the 96th day of his hospital stay, J.D. died. ...

Times were different then. Research could be conducted fairly easily. “It’s unimaginable, compared to today’s world,” [grandson and Yale orthopedic oncologist] Dieter Lindskog says. “He had a drug and a patient. He talked to him, told him it was experimental, and gave it to him. Today, that would be a nine-month process.”
--Helen Dodson, YaleNews, on a silver lining to World War II

Sunday, October 27, 2013

The sweatshop of McKinsey offices

Richard Dobbs, who has spent six years at the McKinsey Global Institute in Seoul, says it is the hardest-working McKinsey office in the world, “by an order of magnitude”. Consulting to Koreans is difficult, he says, because they have such high standards.

Thursday, October 24, 2013

Credit default swap jujitsu

Credit default swaps (CDS) are just insurance on a loan. So when you buy a CDS, you're betting against a loan. And it doesn't have to be a loan you made. You can bet against a loan someone else made too. It'd be as if you could take out car insurance on someone you think is a bad driver. So if the loan defaults, you stand to make money. And if there's no default, you just wind up coughing up premium after premium, paying for car insurance on your good driver who never gets in an accident. ...

But even with these financial shock absorbers, there are still lots of clever-and-probably-legal-but-ethically-dubious ways to game CDS. Here are the two most devious.

1. Buy CDS on a bond, and then bribe the borrower to temporarily default. This is like taking out insurance on your neighbor's car and bribing him to get in an accident. You get the insurance, and then you kick some money back to him to upgrade his car.

Sound far-fetched? It's not. It's essentially what a unit of the Blackstone Group did with the Spanish gaming operator, Codere SA. First, Blackstone bought insurance on Codere’s bonds, so it stood to make a nice bit of money if Codere missed an interest payment. But how do you make a company miss an interest payment? Well, Blackstone took over one of Codere's revolving loans, as a hostage, and told the gaming company: "We'll force you to pay back this entire revolving loan unless you kindly miss the next interest payment on your bonds." It was a clever ransom. And guess what? The clever ransom worked. The interest payment came late. Blackstone made $15.6 million from its CDS. And as for Codere, they turned out fine, too. Blackstone agreed to restructure its bonds, and reward the company for good behavior with another $48 million loan.

2. Sell so many CDS on a bond that you can pay to keep it from defaulting. This is like selling insurance to as many people as possible on a car that was obviously falling apart — and then paying to fix it before it could get in an accident. ...

Now, imagine some crappy bonds. ... What if Wall Street could find someone crazy enough to insure all these bonds guaranteed to default? Well, that insurance would be expensive, and everybody would be happy to buy it. In fact, it'd be so expensive, and there'd be so many people happy to buy it that the fool who sold it all would have quite a bit of money upfront — enough to buy up all the bonds it had insured. And to buy them up at above-market prices, too!

See, there are certain types of bonds you can pay off before they come due if you pay an above-market price. Let's say our crappy bonds are these type of callable bonds. In that case, our fool who insured these crappy bonds has just made it so they will never default. Not so foolish after all. It's a risk-free profit, and it's what Texas-based Amherst Holdings did back in 2009. It sold about $130 million of insurance on $29 million of subprime bonds to banks like JP Morgan, Bank of America, and Royal Bank of Scotland. Then it paid above-market prices on those $29 million of bonds to prevent them from defaulting.
--Matthew O'Brien, Atlantic, on gaming the swap

Tuesday, October 22, 2013

New Haven pizza's supremacy

So it was with great seriousness and deliberation that The Daily Meal set out to determine the 101 best pizzas in America for 2013. With more than 400 pizzas, from farther afield than those in 2012 — from the Western states, the Southwest and Texas, the Midwest, the South, the Northeast, and New York City — the group of pizzas we considered was bigger, badder, and better than ever.

We researched and called each pizzeria, identifying signature pies or best-sellers, and in the absence of one or the unwillingness of the pizzeria to comply, selected the margherita as a baseline or made an educated decision as to which pie to feature for voting.

Then we turned to a panel of experts to narrow the list down to America’s 101 best — a formidable task, which is why we invited more panelists than last year, enlisting twice as many experts from across Americas. This panel included 46 American chefs, restaurant critics, bloggers, writers, and pizza authorities...

101 Best Pizzas in America
#11 Modern Apizza, New Haven, Conn. (Italian Bomb)
#7 Sally’s Apizza, New Haven, Conn. (Tomato Pie)
#1 Frank Pepe’s, New Haven, Conn. (White Clam Pie)

Saturday, October 19, 2013

Work rules worth striking over

A transit strike that led to snarled highways in the San Francisco Bay area Friday was triggered in part by unions' refusal to accept new job rules, in an impasse that experts say could cost the region as much as $100 million a day. ...

Leaders of Amalgamated Transit Union Local 1555 and Service Employees International Union Local 1021, representing about 2,300 BART workers, announced the strike Thursday after a 28-hour negotiating session, saying they couldn't accept proposed changes in work rules, such as having to work a 40-hour week to qualify for overtime. ...

That work rules rather than pay and benefits would be a deal-breaker surprised many associated with the dispute, which has lasted six months. ...

In one area of dispute, BART wants to require workers in the field to use mobile devices to file notes rather than follow current practice of filing handwritten and typed notes, he said.
--Jim Carlton, WSJ, on the latest public services shutdown

Brutalist buildings were not designed to be riot-proof

Chances are good that if you went to college in the United States after, say, 1975, your campus featured at least one imposing, bunker-like concrete building in the architectural style known as “Brutalism.” Colorfully translated from Le Corbusier’s purely descriptive term béton brut (or “raw concrete”), Brutalist architecture—as it was developed and practiced during the 1950s, ‘60s, and ‘70s by architects like Alison and Peter Smithson in the U.K. and Paul Rudolph in America—favored heavy, solid shapes cast in intricately textured reinforced concrete , sharp angles, and a general sense of what architecture historians describe as “heroism” or “monumentalism.” ...

Yet the Brutalism boom started to crumble even as it approached critical mass—very quickly, students, faculty, and community members came to a widely shared (and rare) consensus that the new buildings were, in a word, ugly. ...

Assuming that your campus did have a Brutalist building, you’ve probably been told a lie about it that goes something like, “Hideous, right? The administration chose that design because it was good at preventing student riots and occupations.” The notion, apparently, is that the style’s typically complex floor plans, dazzling edifices, and oddly placed entrances would discourage those kinds of activities. ...

Though the riot-prevention narrative is widely known, every architectural historian or critical source that I consulted viewed it as extremely dubious. For one thing, the claim is somewhat anachronistic. Many campus Brutalist projects were planned (if not totally completed) before the student movements of the late ‘60s and early ‘70s really took off, so crafty administrators would have to have been very prescient to foresee the countercultural-quashing usefulness of any particular style. ...

But more to the point, the philosophy behind Brutalism—which was developed in the ‘50s and early ‘60s, again well before the student rebellions began—was directly opposed to repression and control, a detail which makes the style’s later association with totalitarianism all the more ironic. ...

Indeed, according to scholar Timothy Rohan, Rudolph, the architect behind Yale’s controversial Art and Architecture Building—one of the earliest and most influential campus Brutalist works—imagined his creations as “educational buildings that were intended to be richly expressive citadels for [high] culture” against the corrosive influences of “mass culture, overpopulation, and science.”

Thursday, October 17, 2013

Christmas = KFC in Japan

Forget Santa Claus. When it comes to Christmas marketing in Japan, Colonel Sanders may take the top prize.

While Christmas isn't a national holiday in the country, Kentucky Fried Chicken has managed to make eating its packaged chicken meals a holiday tradition.

The colonel's recipe is so popular here, the fast-food chain recommends customers place their Christmas orders two months in advance.

"Our holiday sales are five to ten times higher than other months," said spokesman Sumeo Yokokawa. "In Japan, Christmas equals KFC."

KFC's popularity can be traced back to a highly successful marketing campaign that began nearly 40 years ago.

At the time, the Christmas holiday wasn't as widely celebrated in Japan.

Yokokawa says many foreigners came to eat at KFC because they couldn't find a whole turkey or chicken anywhere else.

A KFC employee saw an opportunity to cash in, and the company launched its first Christmas meal in 1974: chicken and wine for $10, a pricey meal at the time.

"The Japanese are keen to celebrate Christmas in a non-religious way," said Roy Larke, a Rikkyo University Business Professor. "There's a certain amount of nostalgia attached to the KFC Christmas meal. People try to pass the tradition onto their children."
--Akiko Fujita, ABC News, on marketing-driven traditions

Monday, October 14, 2013

Nobel Prizes across countries

Note to Xinhua: China, with 1.3 billion people, has produced a grand total of nine winners in its entire history. Of those nine, seven live abroad, including three in the U.S. Another, Liu Xiaobo, sits in a Chinese prison. ...

Russia, with a population of 142 million, has three living Nobel laureates, or one for every 47 million. So much for the land of Pasternak and Sakharov.

A more interesting case is Israel. The Jewish state should be a Nobel powerhouse, given that Jews, 0.2% of the world's population, have won 20% of all Nobels, including six prizes this year alone. But while Israel can claim nine living laureates, three of them live and teach mainly in the U.S. ...

Then there is Europe: Half a billion people with a comparatively minuscule Nobel representation. France has, by my count, just 10 living laureates. Germany does better, with nearly 30, although at least nine of them (including Henry Kissinger, physicist Arno Penzias, and this year's medicine winner, Thomas Südhof), have long lived in the U.S. Britain does about the same as Germany.

Why is Europe such a Nobel laggard? In hindsight, evicting and killing most of its Jewish population was perhaps not the best idea...

A more contemporary answer is the pervasive mediocrity of higher education throughout the EU. ...

Which brings us to the Nobel superpower. Since 2000, Americans have won 21 of the 37 physics prizes, 18 of the 33 medicine prizes, 22 of the 33 chemistry prizes and an astonishing 27 of the 30 economics prizes. ...

The secret of America's Nobel sauce isn't hard to understand: an immigration culture that welcomed everyone from Ronald Coase (from the U.K.) to Subrahmanyan Chandrasekhar (from India) to Martin Kaplus (from Nazi-era Austria) to Elizabeth Blackburn (from Australia). A mostly private, highly competitive, lavishly endowed university system, juiced by federal funding for fundamental research. A culture of individualism and an ingrained respect for against-the-grain thinking.
--Bret Stephens, WSJ, on America the beautiful

Saturday, October 12, 2013

How likely are you to win at a casino?

What are the chances that a gambler will win on a single day or over a longer period? ...

Now, thanks to an unprecedented trove of public data detailing the behavior of thousands of Internet gamblers over a two-year period, The Wall Street Journal can provide some answers.

On any given day, the chances of emerging a winner aren't too bad—the gamblers won money on 30% of the days they wagered. But continuing to gamble is a bad bet. Just 11% of players ended up in the black over the full period, and most of those pocketed less than $150.

The skew was even more pronounced when it came to heavy gamblers. Of the top 10% of bettors—those placing the largest number of total wagers over the two years—about 95% ended up losing money, some dropping tens of thousands of dollars. Big losers of more than $5,000 among these heavy gamblers outnumbered big winners by a staggering 128 to 1. ...

To check, the Journal asked Puneet Manchanda of the University of Michigan and Hee Mok Park of the University of Connecticut to analyze a private gambling database to which they have access, detailing two years of play by 18,000 holders of loyalty cards at a Native American casino in the northwestern U.S.

The researchers found similar patterns: Only 13.5% of gamblers ended up winning, versus 11% among Bwin customers, and the ratios of big losers to big winners were similarly large.
--Mark Maremont and Alexandra Berzon, WSJ, on the folly of fighting the law of large numbers

Friday, October 11, 2013

How much should we do to slow global warming?

With human culpability all but certain and the potential for warming by 4.5°C in 100 years, economists can’t decide what should be done about it, or even whether any substantial effort should be undertaken to stop it. ...

The loss in social welfare due to global warming is difficult to measure in large part because of uncertainty about how humans (and other species) will adapt to stresses imposed by climate change.

Will farm yields inevitably decline as the earth warms, or will new plant breeds be developed to tolerate the changes? Will heat-related deaths increase, or will humans be able to migrate and innovate fast enough to keep up with climate change? If environmental capital declines as other species suffer and ecosystems collapse, can they be substituted by physical and human capital?

Even if the social welfare costs of climate change can be reasonably estimated, they are likely to occur well into the future—100 years from now or more. That means the benefits of any carbon emissions reductions today will not accrue for a long time, while the bill comes due immediately in the form of foregone economic growth.

Because of human impatience, benefits 100 years from now are worth less than benefits accruing today. Even a 2% annual discount rate suggested by market behavior, diminishes the present value of climate policy benefits to a level almost surely exceeded by present value costs. But such a discount rate suggests current generations place virtually no value on benefits accruing in the 23rd century.

That’s wrong, argues Nicholas Stern, an economist at the London School of Economics, who advocates, instead, that a much smaller discount rate—0.1%—be used to value projects that span many generations. To do otherwise supposes that the welfare of our great-great-great-grandchildren is unimportant to us, or that they are worth less than us. That may be, Pindyck concedes, while noting that such arguments rest fundamentally on moral grounds not typically the domain of economists.

Even the moral argument is not without critique. With just a 1% real annual rate of growth, global per capita income rises from about $12,000 today to $77,000 by 2200. Even if climate change damages shrink the economy by 13% by 2200, as some have suggested, our distant descendants will be five times richer on average than we are. Are we to sacrifice our relatively modest wealth so they might be six-times richer that us?

And even if we are to value future generations as Stern suggests and morals may dictate, then are we not better off bequeathing them an economy that has grown unencumbered by carbon policy for a century or more? Thereby bestowing upon future generations greater wealth with which to battle climate change using the modern technologies of their time? Perhaps, but economists don’t even speak with unanimity in asserting that carbon regulation will slow the economy.
--Steve Sexton, Freakonomics blog, on the large gap between scientific certainty and optimal policy certainty in climate change

How the Mona Lisa became famous

[Duncan] Watts asks why the "Mona Lisa" is the most admired painting in the world today—why most ­people believe it to possess unique, timeless features that set it apart.

Before the 20th century, the "Mona Lisa" wasn't even the most popular painting in the Louvre. But in 1911 it was stolen, smuggled to Italy and exhibited widely before being returned to France, whereupon Marcel Duchamp defaced a reproduction of it and labeled his work with an obscene pun. The painting rocketed to fame, its pigments and brushstrokes unchanged. The "Mona Lisa" is the artistic equivalent of the investor who did nothing special until he got lucky a few years (or quarters) in a row and was fêted as a genius. Ecclesiastes told us that time and chance happeneth to all, but we easily forget.
--Christopher Chabris, WSJ, on the vagaries of taste and fame

Sunday, October 6, 2013

The friendliness of Iceland

About 315,000 people live here among eerie rock formations and shining glaciers, but the landscape is so austere and weird, you might think that you had woken in an outpost in an alien world. ...

Hardship breeds companionability. Everyone in Iceland — at least outside of the city — is friendly. At last count, 121 people occupy the nation’s jails. And apparently many of them are allowed home for Christmas. ...

On the way to the rental car drop off near the airport, I got lost; as I was pulling up, a white compact swept past us, and a bright-eyed young man jumped out. “Are you Meghan?” he asked. “I’m from the rental car agency. I have your scarf,” he said, and handed me a plastic bag. I’d left it five days ago. “I have to rush off and do a drop in Reykjavik. In fact,” he continued, “if you’re going to the airport, you should just drive there yourselves, and leave the car in the parking lot.” “What will I do with the keys?” I asked. “Oh,” he said, “just leave the doors unlocked and the keys inside.” He spread his arms and smiled. “It’s Iceland!”
--Meghan O'Rourke, NYT, on one of my favorite countries

Friday, October 4, 2013

What, Tweeter isn't Twitter?

Twitter filed to go public yesterday, choosing the stock ticker TWTR. Twitter shares are expected to start trading before Thanksgiving this year.

But it looks like some investors are a bit confused. A [bankrupt] company called Tweeter Home Entertainment, which has the stock ticker TWTRQ, was up as much as 1,500% today, but fluctuated wildly. It ended the day up more than 684%.

--Steve Kovach, Business Insider, on market idiocy