Kids Say The Darndest Things

Turns out, I'm not the only blatherer addicted to quotes; both prophetic and profane. is found on the R-blogger page. inspiration.I think it safe to say that both are willing to cast a jaundiced eye at econometrics in the field. Early on in my professional existence, I concluded that the econometrician's fundamental problem is that their data, by and large, is acquired through begging and borrowing. While I have issues with psychometrics, at least some part of the field generates its own data. To paraphrase Bill Parcells, "If they say you have to make the meal, at least have the authority to buy the groceries."Neither has the chutzpah to put quotes as the introduction to the site, but someone has to blaze the new trial. - Full Post

Down the Rabbit Hole

Trifecta. Three's a crowd. Win, place, and show. Three strikes, and you're out. Could be worse; there's a fourth item I'm too lazy to delve into.So soon, you forget, eh? demonstrates that The Powers That Be still don't get it. All their quants doing all their voodoo (I happened to find my way, yet again, to ; so should you), and they all refuse to accept the obvious.Buried in the back page of the piece is The Truth:Under them, a borrower's overall monthly debt payments cannot exceed 43 percent of personal income.In his study, Professor Quercia of the University of North Carolina found that loans that complied with those rules defaulted at a relatively low rate during the housing bust. About 5.8 percent of them went bad, irrespective of how much the borrower put down.This is The Truth, since it's the converse of what's shown in : you can't have increasing home prices in a state of stagnant (or declining) median income without some serious fiddling going on.The argument that down payment makes a difference is a joke. What matters is debt load. The subprime ARMs, in fact all contractual ARMs, would still have exploded irregardless of down payments made. Push up the house vig after two or five or seven years, and the mortgage holder sinks. Unless his/her income has increased concurrently; but, of course, that hasn't been happening for years. Builders, and perhaps lenders, want house prices to always grow, since that's how they continue to make mo money. Arguments to the contrary, and there's a plenty of them discussed in the piece, pushing the envelope on affordability never ends well. The creation of the various ARMs was not at the behest of home buyers, but of those on the other end(s) of the process. Builders preferred to make 4,000 square foot McMansions. Banks preferred them as well, if only for the larger fees that higher prices brought. In order to accomplish this, however, a way to move folks into mortgages they couldn't have afforded under The Olde Rules necessitated making some new rules. And so it was.Fiddling with down payment levels won't make much difference, and then not necessarily positive for the economy. The evil part is the ARM. ARM is fine and dandy during periods of macro-inflation; wages lead/lag prices, but move closely enough in concert that the "real" cost of the mortgage stays more or less level. In these (semi-)deflationary times, contractual ARMs (where the rate ratchets at aging points irregardless) will fail. (If there're any who still think such never actually existed, .) The only serious avenue is to outlaw contractual ARMs. Prime adjusted ARMs are nearly as bad, when the economy is as out of whack as it is today. That Giant Pool of Money is still out there, looking for a "risk free" sinecure paying 10%. It ain't gonna happen, but they'll keep trying. - Full Post

Home Sweet Home [update]

Alabama. Well, not so much. Mayhaps some who should have been paying attention before are paying a bit more attention this time. I'd begun to wonder. Today's brings this quote:"Some of the increases can be explained by the fact that it is recovering from an over-corrected situation," said Lawrence Yun, chief economist for the Realtors. "But with people's income rising at only 1 or 2 percent and prices rising in double digits, it cannot continue."Now, what to do about it? The banksters and realtors are the ones who make the up-front moolah from such scams. Self-regulating? I doubt it."These are huge moves especially considering--when purchasing a house using a mortgage--most people buy based on 'monthly payment and the maximum allowable debt-to-income ratio.' This means first-timer share will fall even further. They are already at a multiyear low even with record-low rates," said [Mark Hanson, a California-based analyst].So what, gentle reader, has this endeavor been pounding the table about for all these years? If we have another Viagra in the Home blooming, can disaster be far behind? The issue is: who's doing the fiddling this time? Because there has to be a Nero out there. As the man said, they ain't enough moolah to go around.[update]Well, this goes one better."Home buyers have survived rising mortgage rates in the past, often by shifting from fixed rate to adjustable rate loans. In the housing boom, bust and recovery, banks' credit quality standards were more important than the level of mortgage rates.""The most recent Fed Senior Loan Officer Opinion Survey shows that some banks are easing credit restrictions. Given this, the recovery should continue," [David Blitzer of S&P Dow Jones] said in the report.Here we go again. The pumpers are at it again. Will the economy crash just in time for the Republicans' 2016 coup? The Supremes have just given them carte blanche to disinfranchise the Democratic base, and more than enough time to get that done. I wonder how the quants will include these Black Swans in their MCMC? - Full Post

What's The Word?

Famous or Infamous?"60 Minutes" re-ran a piece on one David Kelly, design guru to, and friend of, Steve Jobs (among many). In the course of the intro material, Charlie Rose voiced-over some of Kelly's brilliance: the Apple III and Lisa. Umm. Not what I'd put on my resume, had I the choice. Then, later in the piece, Rose and Kelly are discussing the one-button Apple mouse. Again, in voice-over, Rose praises Kelly for this one-button mouse innovation.Well, not so much. Just like most of Apple, the mouse was bought in, from Xerox/PARC/SRI. Moreover, that square chunk of plastic was far inferior to the vastly more ergonomic MicroSoft version (and the Logitech versions) which followed. The mouse, per se, was the invention of neither Apple nor Kelly, and the later ergonomic designs, which have yet to be bettered, came from others. - Full Post

The Future is Now

The various stock pumping boards (their self image is not so explicit) have been chewing on the STEC deal with Western Digital. The whole story of where SSD is going may end up being an essay here, but I'd offered up one comment, and I think it encapsulates most of the issues. Offered herewith:Fusion-io's problem: its IP, if any, is limited to the bridge twixt PCIe and the rest of the machine. Last I looked (which has been a while, I admit), they still hadn't managed to make a bootable part.STEC, on the other hand, has a tonne of IP in its controllers. The issue comes down to whether the future of SSD (NAND or otherwise) is in emulating HDD protocols, or simply exposing NAND to the processor. Sun, thence Oracle, led the charge some years ago with flash appliances. This, to date, has been a truly Enterprise part. But, it also appears to be the growing vector of Enterprise use of flash.Given all of that, STEC for Western Digital looks like a play at pro-sumer, SMB, etc. where a flash array would cost more than the entirety of the IT spend. Fusion-io may have a place there, but it's still too expensive. It may end up as No Man's Land of flash storage. - Full Post

Obamacare drives need for business analysts

Despite my making my resume on Dice inactive, I still get a lot of emails for “Business Analysts” these days, most of them in health care, probably because of the legal changes with Obamacare in 2014.Some them are ambivalent about specific requirements, but want some experience with statistical packages like SAS.  But they all seem to require fluency with scripting languages like Perl and OOP’s live C++ and java.  But it takes a lot of coding experience to become really fluent in these.  I found myself that you had to develop and implement a project yourself, doing and debugging the coding and supporting it afterward, to be any good at it.    And it was harder to get this kind of experience than it was in the mainframe world 30 years ago, because the pace was faster – and more youthful.  The old 80s progression from coding to systems analysis and architecture does seem to be coming back.A lot of techies got some of these skills setting up their own servers in the 90s (even on 486 or 486 machines) before hosting was so widely available.  - Full Post

No, it's not OK to be "expected" to tattoo your employer's brand on your bod (Rapid Realty)

A company in New York City, Rapid Realty (), is offering certain employees a 15% raise if they agree to have the company tattoo placed somewhere on their bodies.    The Los Angeles Times has a story (by Ricardo Lopez), which broke this morning on NBC Today and CNN, . It’s obviously a sing of loyalty that is hard to remove.   Krosteen Quam has a similar story on the Time newsfeed .   But I would personally be offended by the idea of being expected to modify my body permanently for a job (as sensitive as I was about it as a boy).  I found the idea shocking.     Nevertheless, at least one condo in New York offers purchasers a free tattoo, .  There’s something else here.  Besides the objection to changing my body (oh, actors do that, but I hope temporarily), there’s the idea of using your own persona (not just your social media or blog, but your own personal appearance, embedded into your body) to transmit someone else’s message.  - Full Post