The Stock Market is Not News

A sizable fraction of the news coverage in the United States is focused on the day to day fluctuations of stock prices. Most major newspapers have at least a full page of stock quotes, and many have 4 or 5 pages of coverage. The nightly news on TV gives a summary of the days action, with the change in the Dow being "a summary of the day in the financial markets". The radio updates "In moderate volume, the Dow is up 21, while the NASDAQ is down 6". However, this is in opposition to the fact that none of the aforementioned should be considered news on a day-to-day basis.

First, the day-to-day fluctuations generally aren't very large. What does it mean if the Dow is up 50 today? It means that the 30 stocks in the Dow cumulatively have a price around .4% higher. It's the equivalent of saying that gas prices have gone from $4.21 to $4.23 . And if tomorrow, the Dow is down 50, well, now absolutely nothing has happened from two days ago in prices. Hardly news.

Second, even when they do go up or down 5% in a day (which is significant), the price of stock in and of itself isn't really news either. Unless you're day trading, it's hard to see how it will affect you in any way. And if you are day trading, you certainly want more details than you could get in mass media news. Even here, the change in price isn't the news in and of itself; it's supportive evidence for other events. "Financial stocks were down 10% because of another failure in the mortgage industry" is inverted; the correct sense of the news is "Another major failure occurred in the mortgage industry. Investors are concerned that more failures may occur and pushed financial stocks down 10%."

Third, looking at the day to day fluctuations misses the big picture. "GM stock up 10% on improving financial situation" may sound good, but if you don't explain "GM stock is still down 58% on the year", you miss the entire point. "Intel stock was down 5% on the earnings report" would sound better if it was up 20% in the 3 weeks leading up to the announcement.

Finally, the stock market is generally treated as a numbers game. In this respect, it's no better or worse than sports coverage or the lottery, where undue attention is payed to minute details either only somewhat luck-related (were the two home runs last night luck or skill), or completely luck-related (7 hasn't come up for 3 weeks in the Daily Millions; it's due!). But most major newspapers will relegate the lotto and box scores to back pages of separate sections, while the fluctuations in stock prices are given far more prominence and respect.

My advice to struggling newspapers: Cut the stock quotes. Drop the separate "finance" section. Put business news in the same place you'd put any other news, don't emphasize day-to-day stock swings, and put "personal finance" stories in the lifestyles section. If you really feel you have to be in the stock quote business, tell people to go to your website to find quotes. After all, who do you think reads these quotes anymore on news print anyhow? You'll save space, cut costs, and have a more useful and news-filled product.

Really Bad Jokes

Some "choice selections" from http://www.rinkworks.com/jokes/ :

Why are crocodiles brown and flat? - Because if they were yellow and round, they'd be lemons.

What did the big chimney say to the little chimney? - You're too young to smoke.

What do you call a tree from Tulsa? - An oakie.

Where do mentally unstable trees go? - The insane a-xylem.

What did the boots say to the cowboy? - You ride -- I'll go on foot.


Once there were three Indian women. They were all pregnant, and they slept in their husbands' teepees on animal skins that they had killed or traded for.

The first slept on a deer skin.

The second slept on a bear skin.

The third slept on a hippopotamus skin.

All three had their children on the full moon. The first had a strong baby boy. The second also had a strong baby boy. The third had twins.

This just proves that the sons of the squaw of the hippopotamus are equal to the sons of the squaws of the other two hides.

News Digest

Gosh, today was a busy day. Lots of stuff happening in the world. Enough, in fact, that it's worth an actual blog post (*gasp*) rather than just Reader notes to run down them.

Supreme Court decisions - 3 of them today, two of note. First, the "millionaire's amendment" to campaign finance got struck down, so the limit for campaign contributions doesn't increase against self-funders. Campaign finance law will continue to be a mess; film at 11. Also, the DC gun law was struck down, in what was generally a good decision in my opinion. I think it's pretty clear that the federal government can't make such a law prohibiting handgun ownership based on historical precedent and common-sense reading of the 2nd amendment.

ICANN releases domain names - We will now have virtually any string be a potential FQDN (fully qualified domain name), which will wreak havoc on many things. There are two parts; the first is allowing non-ASCII characters, which should be fine, except for standard i18n concerns; the second is allowing anybody who will pay $50-100k to get a TLD, which might be any arbitrary string (excluding trademarks), so http://mail./ might be a valid domain. (The ending . is to prevent browsers from, naturally, doing all sorts of things with the string that would make sense, and ensuring they treat it as a FQDN)

Microsoft to buy Powerset? - At $100 million (or even more) for what is essentially vaporware that can search Wikipedia only moderately worse than Microsoft's existing search engine, I think it's fair to say that Microsoft is trying to make Yahoo! jealous by buying a bunch of other search engine companies.

Oil at $140 - No link, but it seems to be going up and up ... at some point, both supply and demand will become inelastic, and substitutes will increase; but there's no saying where that point will be.

Fear and Loathing on Daily Kos

The backwaters of the Daily Kos diaries can tend to have content that is somewhere very near Youtube comments in the level of sanity and balance involved (at least the spelling is better at Kos). Most of the time, these comments and the resident troll population are easily ignored. However, occasionally they invoke enough "false outrage" which gets plenty of attention, and it cannot be ignored.

Breaking: Des Moines floods, Evacuation: Where is Anderson Cooper?. The lack of facts, misfacts, and truly pathetic attempts at political grandstanding in this article are incredible. With regards to the Iowa flooding, there are a few facts that first need to be considered:

1. No amount of levees and other flood protections could have prevented there being catastrophic flood damage in Cedar Rapids. It is completely impossible to design a city around a river and to expect to be able to hold back the amount involved.
   
2. The flooding is not nearly as bad in Des Moines as in Cedar Rapids. In many areas, the floods only are covering a few neighborhoods. In Cedar Rapids, it is at least 400 city blocks in downtown.
   
3. This is not Katrina. While parts of the devastation may be that bad, it is important to keep in mind that everybody was within at most 5 miles of complete safety. With Katrina, there was at least a 50 mile swath hit by a hurricane, and the corresponding winds. Also, Cedar Rapids is not nearly as densely populated as New Orleans, and it is not under sea level.
   
4. There is nothing that having more resources on the ground could have done to mitigate the damage. There seemed to be almost as many "We have too many volunteers, please do not go to this area" announcements on the news as "We need volunteers at this area". The national guard, FEMA, etc. could not have done anything more.
   
5. There is no major risk to human life. As mentioned above, there was no hurricane associated with this storm. Virtually everybody in danger was evacuated before floods hit.

Presidential Race Projection: June 9 Edition

I'm going to use a few more categories than the standard "Solid/Lean/Tossup" breakdown. I'm adding "lock" for a drop-dead 100% sure bet, and "likely" in between solid and lean. (Note: Nebraska divides its electoral votes by CD, with 2 going to the state winner)

Obama Lock - DC (3), HI (4), IL (21), MD (10), MA (12), NY (31), RI (4), VT (3) - 88EV
McCain Lock - ID (4), NE-3rd (1), TN (11), OK (7), UT (5), WY (3) - 31EV

Obama Solid - CA (55), CT (7), DE (3), ME (4), MN (10), WA (11), WI (10) - 100EV, cum. 188EV
McCain Solid - AL (9), LA (9), NE-AL (2), KS (6), KY (6), SD (3), WV (5) - 42EV, cum. 73EV

Obama Lean - CO (9), MI (17), NJ (15), NH (4), OR (7), PA (21) - 73EV, cum. 251EV
McCain Lean - AK (3), AR (6), AZ (10), GA (15), FL (27), IN (11), MS (6), MT (3), ND (3), NE-1st (1), NE-2nd (1), SC (8), TX (34) - 128EV, cum. 201EV

Tossup - IA (7), OH (20), MO (11), NC (15), NV (5), NM (5), VA (13) - 76 EV


What's obvious here is that Obama is in a lot better shape than McCain. "Serious" people have suggested that he may win any of the states in the "McCain lean" column, including Texas, Alaska, North Dakota, and Mississippi, none of which would generally be considered "Swing states", but certainly should be considered as such this election. McCain certainly has a shot at the Obama lean states, but there are a lot fewer in that category. Most are at least "Solid", which means it would take significant effort, luck, and national swing for McCain to win them.

As far as strategy suggested by this setup, we have the following:
1) If Obama wins Texas or Florida, he definitely wins. The punditry generally look at Michigan, Ohio, Pennsylvania as "key battleground" states, with Florida generally included as well. However, even if Obama lost 2 of MI OH PA, Texas or Florida would likely ensure he had enough EV to win.

2) McCain needs a base. The general Republican bases are in the west and the south. In the south, evangelical dislike of McCain plus an expected huge black turnout makes a lot of states possibly competitive. In the west, Obama has very strong popularity, and the Democratic party overall is on the rise. McCain has no shot unless he can establish early (before the conventions) that either Georgia, South Carolina, Mississippi and Arkansas are safe (and FL NC VA are lean McCain); or that Arizona, Montana, Nebraska, and the Dakotas are safe (and CO NM NV are lean McCain). Texas, once again, would be useful for either group.

3) McCain and California - As I mentioned above that Obama winning FL or TX would make things very easy, McCain could probably do the same thing in California. The state is probably the friendliest of the "Solid Obama" states to McCain. It's also the only way he could win if he lost MI PA OH.

4) GOP VP selection - I see three possible paths to victory for McCain. Strategy 1 involves focusing on the 55 EV of California as much as possible. Schwarzenegger would be the obvious VP choice, even though it might not help; but he's not eligible; maybe something like Carly Fiorina. Strategy 2 is the 58 EV of MI OH PA. Here, there once again aren't any governors or senators of note (Voinovich is unlikely), and I doubt Rob Portman is going to get consideration; maybe Mitt Romney's Michigan connections are the best regional tie he could get. Strategy 3 is the "We're tough and macho and Obama is an evil wimp that will surrender to the terrorists", and that can take virtually anyone, though Joe Lieberman would probably be the most likely candidate for that strength.

I Hate Bank of America

More specifically, I hate their branding and promotions, but that's a large enough portion of my overall view that I'm not going to bother with any nits along those lines.

Exhibit 1: "Risk Free CD" - It's a short term CD, only you can take your money out early! Normally, you can do this with a small penalty. Right now, it's 2.80% APY for 9 months, while US Bank offers 3.00% for 11 months. It's a comparable rate to other big banks I suppose, but ING savings is at 3.00% and has 9 months at 3.30%, and is probably a better option for savings.

Exhibit 2: "Keep the Change" - Seriously. "We automatically transfer money between your accounts" has got to be the stupidest idea ever. It's a program designed for those people who are too spendthrifty, poor, or stupid to save even $10 or $20 per month without a gimmicky program run by someone else to help them. In that regard, it's probably a good idea from a business proposition, but still. It falls very close to "evil".

And the worst part of both of these is the ads. "What if you couldn't kiss your kids for 9 months, or go outside? Why should it be different with your money. This is America. You deserve a risk-free CD". or "We save everything in America, the whales, jam, everything. Why not your money? This is America. You deserve to keep the change." It's both the moronic jingoistic patriotism, the horrible metaphors, the annoying narrator, and really the entire thing.

Book Review: The End of Science

John Horgan summarizes his conversations with dozens of top physicists, philosophers, and other scientists, trying to get an answer to the question: What will happen once we have "The Answer" to everything?

Of course, this question presupposes that there is such an answer (or a collection of answers), and Horgan makes no attempt to be anything but biased in his view that there is such an answer, and that the peak of scientific progress has already passed. He claims that since the discovery of quantum mechanics and relativity, and to a lesser extent evolution, the double helix, and a few other developments, very few has occurred in science. Furthermore, that which has occurred has mostly been "minor details". There has been no Grand Unified Theory in physics over the past 50 years.

However, his examples of "the end of science" are carefully cherry-picked and calculated to be able to support his hypothesis. The data for relativity and quantum mechanics came as a result of the massive increase in the scale of observations caused by improvements in telescopes and microscopes, which are a continuous trend from Galileo to around the 1940s, where we hit Heisenburg uncertainty limits on one scale, and a sheer lack of observable data on the other scale. At some point, Moore's Law will break, and computer capacity increases will taper off. However, he generally ignores mathematics and social sciences, and says very little about chemistry as well. While these can be chalked up to the specific interviews he has conducted, it is more than coincidental that he focuses most on the few topics where the end of science may come sooner rather than later or never.

Horgan claims that there are no "surprises" forthcoming in science. He cites relativity, quantum mechanics, evolution as "surprises", but doubts that these will be forthcoming in the future. This is the silliest of logical errors; if it were expected to occur, it wouldn't be a surprise. He dismisses out of hand that the solution to "dark matter" might be something unexpected, though I cannot imagine how it could be explained purely by "details".

The book doesn't support the end of science very well, and some of his claims on where "the end of progress" lies seem out of date after only about 10 years (especially relating to AI and computing). However, the discussions with various scientists are generally fascinating. One scientist suggests that while bacteria and viruses come from the fabric of the universe, AIDS must come from a research lab, while another suggests that environmentalism is a plot to impoverish black children. Many of them are based on his interviews with Scientific American, and this book is worth reading solely on these accounts.