Hide Your Kids, Hide Your Wife, Hide Your 401K

By , April 13, 2011 7:43 am

My buddy Justin posted an interesting chart recently about the correlation between quantitative easing (what the blue shirt crew calls QE, QE2, and possibly QE3) and commodity prices (notice the gas pump recently?). It reminded me of a posting I drafted to write in January, right smack in the middle of the Fed’s 2nd massive infusion of dollar dollar bills ya’ll into the ‘economy’. Now that QE3 appears to be on the horizon, I guess I should get this out and desperately hope that this will be my last opportunity to write on this subject. Here’s the chart:

What this chart is showing is that the huge rally in commodity prices (basically the things you buy to physically keep your body alive such as grains, veggies, meats, etc. and some things that make life easier like oil) have coincided with the Fed’s purchase of treasuries.  This is also one of the main reasons behind the rally we’ve seen in the stock market, and if you don’t believe me, try plotting your stock portfolio in nearly any other currency besides dollar bills.  It won’t be so pretty.

So what does this really mean to you?  Well for one, it means for anyone who was not heavily invested in the stock market (at least 40% – 50% of your assets), you’ve likely seen a huge DECREASE in your spending power.  Basically you can’t buy as much stuff as you used to be able to, primarily because the prices of those items have risen dramatically.  So while you are earning the same wage, it actually costs you a lot more to live now then it did before the Fed spending (see below).

Now what’s even worse is that since this Fed action is on the currency value, it doesn’t just effect what we earn today.  It effects EVERYTHING we’ve ever earned in our lifetime!  That includes your savings accounts, your 401Ks, grandma’s $5 birthday checks … anything that’s denominated in American greenbacks is worth 25 – 30% less due to quantitative easing.  So again I wonder why so many Americans were vehemently opposed to a 3% tax increase on FUTURE income for the uber-wealthy (whose lifestyles will not be affected) yet aren’t so worried about these rounds of QE’ezing that have effectively removed 25% of their ENTIRE net worth (not to mention future earnings as well).

Sadly, while a lot of us could use the extra dough to stay relatively comfortable a bit longer and wait out this economy, it’s really the poorest people in this country and the rest of the world that are facing a real struggle for survival.  A developer I work with noted that for the first time in India’s history, a luxury (a beer), a convenience (a liter of gas), and a necessity (an onion) had all cost the same.  Again, the people that have to bear the burden are often the ones that are least fit to do so.  And last I checked, it wasn’t them who leveraged bad mortgage loans, committed massive financial fraud, borrowed trillions in TARP money, exploited corporate tax loopholes, and paid themselves millions in bonuses.  Just saying.

Revised Lyrics:
Bernake’s climbin’ in your pockets
He’s snatchin’ your accounts up
Tryna rape em so ya’ll need to
Hide your cash, hide your bills
Hide your cash, hide your bills
Hide your cash, hide your bills
And hide your 401K
Cuz they’re rapin errbody out here

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“So this (Fantasy Baseball) team is perfect”

By , March 2, 2011 12:50 pm

It’s almost fantasy baseball time again and although my slow starting roster made a respectable run to finish in 4th, I didn’t re-capture the title which I won in 2008.  The consolation prize is that our commissioner, Hans Ruddilicious, for the 9th straight season did not win a title, settling for his record breaking/setting fourth 2nd play finish (see Bills, Buffalo – 1990, 1991, 1992, 1993).

Last year’s champ christened this year’s bulletin board with this fine piece of smack talk:

“i just took a quick glance at the initial rankings and the top 10 players looked like the 2010 Championship Bag of Poo lineup. weird…”

This got me thinking about what it would take to build a team that would perfectly beat any other roster of players, even if you were able to pick the same players (barring obvious ties).  It would seem that a baseball season, with 162 games would be enough to do statistical analysis, although we’d probably want to dampen the volatility a bit by looking at it on a weekly basis.  In this case, building a Monte Carlo simulation model and running thousands of scenarios could give you a good idea of which players would be best to wager a high draft pick on.

This would be a pretty good start, but what about other factors like injury proneness, skills progression/deterioration, team/lineup changes, and to a lesser degree strength of schedule and home field advantages/disadvantages?  It would be a pretty cool analysis to do to try to capture a bit of an edge in your fantasy league (i.e., look for Give It More Hand to return to the top of the standing this year).  Plus, it would be a pretty fun to put to the test our fantasy expertise, especially for bragging rights.

I came across this site that is bringing this concept to life, although not for fantasy baseball.  fantisserie.com looks like a game that lets you put your fantasy shit-talking to the test in a weekly competition for cash prizes.  The entry free is pretty nominal, about the cost of most iPhone and Android apps or a drunk impulse purchase of a Slim Jim from the local deli at 4:30AM, and they are offering a pretty large cash prize to anyone that can hit perfection for a week.

fantisserie

Not a bad trade-off, much like indigestion for the tasty deliciousness of previously mentioned 4:30AM Slim Jim.  Gotta have beef, gotta have spice, need a little excitement.  SNAP INTO A SLIM JIM.

Online Communities according to xkcd

By , October 20, 2010 7:39 am

A few highlights from this map:

1. Blatherskite River – “Blathering Blatherskite” – Fenton Crackshell
2. Former Site for Adult Services on Craigslist Island
3. Kayne’s Isle of Sadness
4. Hashtag Games Whose Popularity Confuses and Depresses You

If you are looking for Webinometry on this map, it was sunk somewhere just south of Miscellaneous Blogs on a fateful journey from the Sea of Zero (0) Comments to the eastern coast of Tech Blogs.  You see, I was shipping my blog content to a competition with an arch nemesis regarding who has the most mathematical references per post.  To throw him off, I shipped it under the disguise of an ice cream freighter.  I was informed by my trusty accountant Whimperman that it was sunk by a sea monster.  Reaction below:

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Retire Sooner by Ignoring Financial Advisors

By , May 20, 2010 3:06 pm

The recent market activity and what we saw in September 08 and March 09 is why people should not listen to any ‘investment professional’ who tells you to invest based on how old you are.  It’s ridiculous to apply the “average” growth rate of the market without considering where in the market cycle you are in.  If you invested during any peak, you are almost guaranteed NEVER to see growth if your portfolio without a significant amount of dollar cost averaging just to get you back to even.

Here’s VanGuard’s model portfolio mix and my portfolio mix for my 401K.  If my portfolio looked anything like their ‘model’ portfolio, I’d be, to put it meekly, royally screwed.

I’ve been in cash since the the 4Q of 2009 after being purely in individual stocks for most of the year (I was also completely in cash during 08-09 crash).  Don’t get my wrong, I’m not advocating staying out of the market, but timing is important and my portfolio mix will look a bit more like the model mix when stocks become cheap, and hopefully irrationally cheap, again.  Dow 8500 looks like a good place to start thinking about it.  What do you think?  Dow 8500 or Dow 11500 first?

Dean’s List Released

By , May 12, 2010 6:11 pm

We released a pretty cool trivia application, called the Dean’s List Trivia Game, which is available in the Android Market.  I had a lot of fun working on this project, and a lot of help as well, and it came together pretty nicely when it was all said and done.

The crazy part about building this application is how it all started.  My friend Russ and his family LOVE games.  I think they have every game ever made, and I’m pretty sure we’ve played Monopoly using this rare spinner made for the United Kingdom version of the game during World War II.  That may be the Sweet Tea Vodka speaking, but the point is the man loves his games.

One day, Russ comes over and he tells me about this guy he knows, Marty Dick, who sends him trivia questions every week and he puts me on the list.  That Friday I get an email with 10 of the most interesting, challenging questions I’ve come across.  I’m going through them, racking my brain, and when I get to the bottom there are no answers!  WTF!  Russ! You didn’t tell me that there aren’t any answers!  Oddly enough, why I’m spewing this in an email to him, I get another message in my inbox reading “QUIZ ANSWERS – OPEN LAST.”

Who is this guy?  In the presence of so much technology, is Marty really emailing questions, then sending a follow up email with answers?  Really?  Gaming has been propagating at an incredible pace through the advent of application platforms like Facebook, the iPhone, and Android so it was a bit strange that Marty was hosting this game using the snail mail of electronic communication.  What’s up with that?  Then, I found out who Marty was:

So Marty is in his 60s, retired, and lives somewhere in the Keys.  Turns out he’s been creating these trivia questions for years, originally writing them down on index cards and handing them out to his friends to see how well they did.  Index cards.  He finally upgraded to electronic delivering them and continues to send out new questions every Friday to this day.

Russ and I thought that this would be a fantastic mobile app, and with Marty’s approval, we set off to build it.  With the help of Parker English, who designed the user experience and interface, Jimmy Cahill, who created the bomb set of awards, and the hard work of C Rajesh and Chidhambaram from TechGaruda who did the bulk of the coding, we were able to release this on the Android Market today.  Check out some of the screen shots here and download it if you love trivia.  I’ve showed it to a few people and this is the response I generally get:

Update –  Email from Marty:

Eureka!  Nice work.
Marty

How Bad is my Fantasy Baseball Team?

By , May 3, 2010 8:54 pm

I’m sitting in 9th place, 67 whopping points behind the league leader after the first month of the baseball season.  That’s pretty awful.  The question is, do I have any hope?  I decided to take a statistical approach to see if I should jump ship on my team, or try to hold through this miserable start.

The first thing I looked at was the historical monthly averages and standard deviations of the players on my team.  When I did this, I got a pretty ugly picture for April, but some hope for the future.

The green represents the categories where my players are performing better than their historical averages, while the red …. well, you know.  A lot of red on this chart … a lot.  Should I be selling low right now?

The data is telling us that April 2010 was a uncharacteristically bad for my team when compared to typical months in their career.  If statistics hold, I should expect a reasonable bounce back for nearly all my players for the rest of the year.  I should hold out for a little bit longer before making any significant panic moves, but I will certainly be looking for improvements across the board.  I’ll be keeping a close eye on riskier players like Ichiro (age) and Hamilton (injuries), and they will be the guys I’d look to move for a younger/healthier equal poor starting ‘star.’

What have I done so far?  I’ve moved Molina for the ‘no timeshare’ Miguel Olivio in Colorado, and I’ve gotten Lance Berkman back to take the spot of Curtis Granderson (who actually wasn’t that much of a drag on my team since I only play him against right-handers, check the splits for his career).   If Rich Harden can put it together, Grienke get’s some offensive help, and Dave Duncan has really fixed Brad Penny, I might have a fighting shot.

Your turn.  Who would you target right now in a trade, and who would you move off my team?

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We Are The World Part 2

By , February 19, 2010 1:42 am

I’m not really sure how I feel about this.  For a pretty powerful and inspiring song, I’m not sure it really needed a remake, especially since it seemed a little B+ in the star power department.  I guess someone was compelled to do this and the earthquake in Haiti coupled with the 25th anniversary of the song seemed like a ‘natural fit.’  Leave it to modern musicians to sample for charity, very noble.

What I liked:  Michael Jackson solos, seeing Busta Rhymes alive, Tony Bennett, the Indian guy wearing a kurta

What I hated:  Wyclef squealing, Will I Am’s lyrical genius, auto-tuners (except Lil Wayne), Jamie Foxx doing a Ray Charles impression, Fergie, Lionel Richie’s “Wow”, standard message and data rates apply

What did you like/dislike about ‘We Are The World Part Deux’?  Did you like the original version better?  Is there anyone else that thinks that Bruce Springstein and Kenny Rogers would have won a fight with the auto-tuners in this version?

Here’s the original for those that like to compare and contrast and forgot how bad-ass The Boss was:

How Mint.com Can Fix The Banking Industry

By , February 12, 2010 2:18 am

So you are unemployed, with no job prospects in sight and a healthy mortgage and family to worry about.  You are not alone as a staggering 17% of Americans are currently out of work (sorry, U.S. Bureau of Labor Statistics, this is a more realistic vision of the jobless rate, not the 10% that you are ‘reporting’ and will subsequently adjust a year from now when no one is paying attention).  Here’s Mint.com’s spin on the real unemployment rate in America:

Now while many Americans are finding it hard to earn a wage, there is a strange thing going on with the employed folks at our country’s largest banks.  They are getting bonuses, and not in a figurative sense of ‘hey, you have the bonus of keeping your job although your performance was a bit spotty abysmal over the past few years.’  No, they are paying themselves cold hard cash partly financed by the federal (read as American tax payer dollars) bank bail-out program.  Now I understand that a few of these banks have begun to repay their financial debt to the country, but the ‘lifestyle debt’ of long-term unemployment, mortgage foreclosures, small business bankruptcies, and retirement saving losses that these banks helped create are nowhere close to being recovered.  To turn a blind eye to anything beyond the reach of their balance sheets is just another example of the lack of fiscal and moral responsibility so prevalent in modern day banking.

In nearly any other industry, these poorly operated business would be purged in typical capitalist fashion during down business cycles; survival of the fittest, Darwinism in industry.  The main reason these industry Dodos survived was because the government had to intervene and lend mega amounts of money to them.  They were so big, and supported so many consumers and industries, that letting them fail would cause massive devastation to our economy (and the world’s economies).  In fact, 15 of the top 21 recipients of bailout funds were banks or bank subsidiaries whose survival has been contingent purely on their size rather than their abilities to operate, a fact ignored when decisions were made to pay out bonuses this year.

Being “Too Big To Fail” creates an imbalanced risk/reward structure because it allows banks to engage in short-term highly profitable businesses (CMOs, proprietary trading, hedge funds) with limited consideration for the additional risk (thanks to 3rd party capital rescue), which tends to be a long-term compounding problem that grows unfettered over many years.  It essentially allows them to share the risks over a larger capital base (theirs plus the American tax payer) during crisis, yet distribute profits accumulated from their activity that leads to the crisis to themselves (through short-term incentive structures like year-end bonuses on annual financial performance).

So what can you do (and how can Mint.com help) so that this does not happen again?  Well, it’s pretty simple, fire your (big) bank.  Firing your bank is basically saying “I will not allow you to get so big that you can act irresponsibly because you are not worried about going bankrupt.”  To do this, all you need to do is move your savings accounts to a smaller, more responsible bank.  This exponentially reduces the size of a big bank, because your deposits are significantly leveraged in the modern day banking system (see the section called “Effects on Money Supply“).  Moving $1,000 dollars out of your large bank could potentially reduce the bank’s asset size by $9,000, so a lot if these jabs to shift the deposit base can amount to a staggering change.

Mint.com allows customers the opportunity to do this in their “Ways to Save” section.  Mint could take this a step forward by giving higher visibility to responsible banks or discouraging consumers (think “Didn’t Screw the Economy” rating) from moving accounts to bailout banks.  They could even flat out not allow irresponsible banks on their site, a move that would certainly be damaging to new customer acquisition for these banks.  With information that is publicly available, along with the data they are collecting consumers relationships with banks, they could create a banking watchdog system that brings the same transparency to the banking industry as they have brought to personal finance.  These types of ideas, although not necessarily beneficial in the short-term, could provide a larger pool of financially healthy individuals transacting in more stable and responsible banking industry.

So are you going to move your accounts to smaller, more responsible banks?  Would you like to see companies like Mint impact the banking industry for the better?  Chime in on the comments section if it suits you … or don’t.  I’ll be checking in to see if you did or didn’t while QAing Jeff’s latest build of Wixity.  Fun.

Stats in Sociology – Not Boring Version

By , December 30, 2009 11:23 am

Hans Rosling shows you how to to make stats cool again.  Visualization of data is a great learning tool, and creating ways to do this will be of great value to those with less mathematical sophistication than others.

The insights that Hans Rosling was able to illustrate in this presentation were pretty amazing as well, and definitely surprising to see how much the world has leveled in the past 40 years.  Check it out:

The Perfect Fantasy Football Play

By , November 30, 2009 4:09 pm

I’ve been playing in a fantasy football league with the same group of guys for about ten years now, and like many others of you out there, I just can’t win.  It seems like everything that can go wrong, will go wrong, from a missed extra point to the NFL reviewing game tape to change the marking of a fumble which causes enough yardage difference to drop you 1 point loss in a game against the other team going for the last playoff spot (didn’t happen to me, but did to another manager whose opponent called up the NFL offices posing as a reporter to question a Jonathan Stewart fumble last year … priceless).

Now if you are an astute fantasy football player, you know exactly what it takes for you to win a game.  Even in the waning seconds of a game, I can come up with the most ridiculous real life football play that would pull my team out from the jaws of defeat and on to capturing an elusive Small Show* championship and the prestigious Portis Belt (and eventually making it rain like Pacman Jones).

My White Elephant

My White Elephant

After years of perfecting this ability, I started to think about what would be the most desperate of desperation plays that would be needed by a single player on your team to overcome a seemingly insurmountable lead.  At first I thought it was obvious, the 99 yard rushing/receiving touchdown from a running back/wide receiver/tight end.  The field is only 100 yards and a touchdown is the most amount of points you can score on a single play.  It’s the max on yardage and points on a single possible offensive play.  Defenses usually aren’t rewarded for return yards, so the best you can hope for there is a sack, fumble recovery, touchdown.

Actually there is a way to top the 99 yard, 1 TD effort, and this play is one of the rarest you’ll ever see.  It is a legitimate football play for the quarterback to throw a pass, have it deflected by a defender,  and then catch the deflection and run with it (Brett Farve’s first completion was to himself).  This counts as both passing AND receiving stats making it possible for a quarterback to throw and receive a 99 yard touchdown pass on the same play for 26.2 points of fantasy legacy.  Here’s a breakdown of the most possible points by position for a typical points-per-reception fantasy football league:

Fantasy Football Max Points Chart

Theoretically, any offensive player can do this (i.e., Ronnie Brown Ricky Williams in the Wildcat), but for practical purposes, we’ll expect the quarterback to be handling the ball at the end of the game.  So if your QB is backed up to his 1-yard line with 4 seconds left in the game and you are down 26, keep the faith, you still have a shot!

Here’s that Brett Favre completion to himself:

*The Small Show is the fantasy league that I play in.  I’m currently 4 and 7 and up by 5 points this week with Pierre Thomas (my guy) going against Tom Brady and John Carney (his guys) tonight.  If I win this week and next week I have an outside chance of getting into the play-offs provided another team loses and I can outscore him in Total Points.  What do you think my chances are in both tonight’s game and the playoffs?

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