Friday, August 31, 2012

AT&T: Too Big to Care

Kludge first, tidy up later.
We're not power Internet users, i.e., we don't need to stream high-definition video for hours on end. We've been contented subscribers to AT&T's ADSL (asymmetric digital subscriber line) service, which since 2005 has been fairly reliable (except for an episode last month).

Two years ago AT&T's 2WIRE modem finally gave out, and we replaced it with a $150 Netgear DGND300 (pictured standing, right), which broadcasts Wi-Fi signals throughout the house under the 802.11g and the faster 802.11n standards. All was copacetic.

Last month AT&T announced that:

1) All ADSL users in the area would be switched to VDSL (very high-data-rate digital subscriber line), which can't be read by the Netgear modem;

2) ADSL service would be discontinued by the end of September or when the subscriber switched to VDSL, whichever was earlier;

3) VDSL users would receive a "free" AT&T modem.

Rather than try your patience, dear reader, with a long(er) whiny post I'll just say:
  • AT&T turned off the ADSL connection without warning, so we had to convert to VDSL immediately to continue Internet service.
  • The new 2WIRE 3600HGV modem broadcasts in slow 802.11g and slower 802.11b only;
  • The 2WIRE signal is so weak that a wireless device has to be within 10 feet of the modem/router.

    Fortunately, it was a simple matter to connect the modems via an Ethernet cable and use the Netgear's stronger signal. All is copacetic again, but the shabby treatment by a too-big-to-care company will make us look harder at alternatives to AT&T. © 2012 Stephen Yuen
  • Thursday, August 30, 2012

    Conventional Wisdom

    Like many Americans, your humble observer pays some attention to politics--it's hard to avoid the subject because of news coverage and biennial political commercials--but hardly spends any time on explicit "political" activities. I vote regularly but only rarely attend City Council meetings or write letters to officials. Only once have I made a political contribution (and continue to pay for that lapse in judgment by fielding a daily tidal wave of phone calls and junk mail).

    Make no mistake: I happen to believe that it will make a big difference who wins in November. But I already know whom I will vote for, and whether I spend four hours or none each day following the campaigns my ballot will look the same. Unlike school, there's no extra credit for showing the work.

    For the national political conventions I only read the transcripts and watch snippets of the major speeches (just to check out how potential leaders sound and look). More time spent would not be personally efficacious. The conventions are a scripted show  where the outcome is known in advance. Little need to ain't Shakespeare.

    That's why Clint Eastwood's speech and its reverberations are fascinating. The speech wasn't scripted in the sense that the Republican planners had no idea how it would fit into the final night's progression toward the Mitt Romney climax.

    He indeed might have written and/or rehearsed it, but Clint Eastwood made his bit look like improv.  The very first thing he did was plunge expectations. Uh-oh, here's an 82-year-old man, voice quavering. Hope he can make it through without embarrassing himself. And then it got better. In the middle, as it looked like he was drifting off to an old-person's reverie, he recovered (or was the drifting part of the script?). A bad first impression, followed by an extended bit with an empty chair and one-liners ("we own this country" "we've got to let 'em go") that have legs that could last to November.

    Here's the transcript. Here's the video.

    [Update - 8/31: Bill Maher suspends his partisanship for a moment and comments as a practitioner of stand-up:
    ” he did a ten-minute bit with an empty chair and “killed.”.... 
    Maher said that people normally complain about how scripted the conventions are, and wondered why everyone would be so upset over an unscripted, genuine moment. ]
    © 2012 Stephen Yuen

    Wednesday, August 29, 2012

    Armed Robbery

    Internet scams can steal thousands of dollars from victims who at least were in no direct physical danger....until crooks began luring unsuspecting car buyers through Craigslist [bold added]:
    In Berkeley, police say, four victims hoping to buy cars off the popular Internet site have been robbed at gunpoint since June, possibly by the same two men. There have been several other such holdups in Oakland, and similar heists have been reported this month in Castro Valley and Fremont.
    Authorities have pointed out warning signs:
    "What we're seeing is the seller will change the location. That's part of the M.O.," said Officer Johnna Watson, an Oakland police spokeswoman. "The buyer should be in control and designate the meeting location."

    Car buyers should also be wary if the car they plan to purchase shows up with no license plates or with only paper plates, police say.
    I use and like Craigslist, through which I've posted community announcements and bought and sold merchandise locally. Craigslist is now a for-profit organization but still retains the original Internet-should-be-free ethos from the mid-1990's. The site isn't flashy and on most listings doesn't charge its users.

    Its shoestring overhead (29 employees in 2009) of necessity minimizes Craigslist's supervisory capability. The "Adult Services" section exploded in popularity during the past decade until the prevalence of illegal activities forced Craigslist to shut it down under pressure from states' attorneys general.

    Here's hoping that Craigslist users become smart enough to protect themselves. Otherwise Craigslist will have to make changes that will make it less special, perhaps leading to the long decline that has befallen other Internet pioneers. © 2012 Stephen Yuen

    Tuesday, August 28, 2012

    Biennial Exam

    Double doors' double entendres
    We drove to Sacramento for the biennial neurological exam. Sam said that everything looked normal. Unless the patient displayed unusual headaches, lethargy, or any of the other signs of shunt failure, we could now stretch the time between appointments to three years.

    We stopped at Joe's Crab Shack for a late lunch, donned a bib and attacked the crab legs. The Sacramento River flowed serenely under the hot afternoon sun. It was a beautiful day. © 2012 Stephen Yuen

    Monday, August 27, 2012

    Plebeian Appetites

    "Blues Brothers" at Universal Studios
    During our brief trip south we spent a day at Universal Studios. We could have gone to the Getty Museum--and I will go some day--but this vacation was for entertainment, not education. Speaking of art, the homage to the Blues Brothers was well worth 20 minutes of standing (seats were sparse). Young fans who were obviously familiar with the tunes were dancing in the aisles. Belushi lives.

    Plane crash set from War of the Worlds
    Being able to spare only a few hours, we took in the studio tour, the new Transformers ride, and the trained animal ("Animal Actors") show. The Transformers flight-simulator experience was a little too much for this aging boomer. Being tossed and turned while watching giant 3-D figures rapidly moving across the screen was literally a dizzying experience. A tech marvel indeed, but I'll take a real roller coaster, please.

    Pork chop with berry sauce
    Chased indoors by the Los Angeles heat and smog, we had a leisurely dinner at the hotel restaurant. Familiar dishes were prepared with flair--no multi-continental fusion cuisine here--and portions were generous. Our summer-long battle to reduce sugar intake suffered another setback when the dessert platter came. BTW, it's only a myth that calories don't count when one is on holiday. Or perhaps there's another explanation why my pants have mysteriously shrunk.

    Final score Friday night: Giants 5, Braves 3
    I-5 was crowded with trucks, and the return trip was exhausting. But there was still time (and energy) to head up to AT&T Park that evening. The Giants came back to beat the Braves and keep the Dodgers at bay for another day. Now that the new Dodgers management is throwing money around like a drunken sailor, the Giants (and every other team in the National League West) will struggle for years to keep up with the big money boys down South. I didn't care much before, but now...Beat LA! © 2012 Stephen Yuen

    Sunday, August 26, 2012

    One of the Good Guys

    Neil Armstrong (1930-2012) - NASA photo
    Too many of our heroes turn out to have feet of clay, but not Neil Armstrong, who died Saturday at the age of 82. Mr. Armstrong's feet, of course, went where no one's had gone before.

    The first human being to walk on the moon shunned publicity:
    After leaving the space program, Mr. Armstrong was careful to do nothing to tarnish that image or achievement. Though he traveled and gave speeches — as he did in October 2007, when he dedicated the new Neil Armstrong Hall of Engineering at Purdue — he rarely gave interviews and avoided the spotlight.
    In 1968, the year before Neal Armstrong and Buzz Aldrin landed on the moon, I saw Stanley Kubrick's 2001: A Space Odyssey, by consensus one of the best films of all time. The movie envisioned lunar cities and commercial space travel by 1999 and the scientific and economic wherewithal for a manned flight to Jupiter in 2001. And why not?

    Only ten years earlier it had been deemed a monumental achievement to put a monkey in orbit. Now men were going to the moon and returning safely. 30 years hence, Stanley Kubrick's future (except for the black monolith) seemed very plausible.

    The 1969 moon landing was a big deal, and I watched it on TV like millions of others. But we expected to see many more such big deals in the decades ahead. Neil Armstrong was going to be the first of many.

    It turned out that only twelve men visited the moon, and no one has been back for nearly 40 years. The accomplishments of Neal Armstrong and the other Apollo astronauts grow more astonishing as their deeds fade in time, and sometimes I wonder what happened to the civilization that produced them. R.I.P.

    Saturday, August 25, 2012

    Nine Good Persons and True

    The Apple-Samsung verdict is in after surprisingly quick 22-hour deliberations [bold added]:
    Nine jurors delivered a sweeping victory to Apple Inc. in a high-stakes court battle against Samsung Electronics Co., awarding the Silicon Valley company $1.05 billion in damages and providing ammunition for more legal attacks on its mobile-device rivals.

    Jurors Friday found that Samsung infringed all but one of the seven patents at issue in the case—a patent covering the physical design of the iPad. They found all seven of Apple's patents valid—despite Samsung's attempts to have them thrown out. They also decided Apple didn't violate any of the five patents Samsung asserted in the case.
    It's easy to jump to the conclusion that the result was a "hometown" verdict. Apple is one of the largest employers in the Valley and is its most admired and successful company.

    That assumption, however, wouldn't do justice to the efforts of the nine-person panel. The Journal profiles some of them:
    Manuel Illagan, marketer, circuit board company
    Velvin Hogan, video-compression expert
    Peter Catherwood, AT&T product manager
    David Dunn, cycling shop worker
    Aarti Mathur, payroll administrator, IT startups
    Just the organization of the task was impressive. How would you fare, dear reader, if you had been called? The WSJ graphic below (click to enlarge) lists the items that had to be decided:

    Your humble observer is an Apple shareholder who will experience a pop to his investment because of the verdict. But it's not the monetary benefit--which is likely to be ephemeral--but the process that is cause for rejoicing. In an era of specialized knowledge, twelve good men nine good persons and true showed not only that they were relevant but why they are the backbone of the American system of justice. © 2012 Stephen Yuen

    Friday, August 24, 2012

    The Open Road

    Single-lane traffic moved at 55 mph on the road south.
    One advantage that the Mainland has over my home state of Hawaii is that it's easy to assuage a feeling of restlessness. We filled up the tank and pointed the van south to Los Angeles.

    There were five-mile stretches of I-5 that slowed to a single lane due to road construction. The passengers didn't mind. They were occupied with playing games and answering text messages on their iPhones and iPads....activities that they might be engaging in anyway had they stayed home.

    Sometimes the passengers even set aside their electronic devices and engaged in conversation. They chatted more during one day on the road than they would have during a week at home.

    Going away to find oneself has been a staple of literature going all the way back to the Greeks. In the 21st century we go away to find each other.

    Thursday, August 23, 2012

    Touched by Human Hands

    I stopped off at the local Safeway to buy supplies for a short car trip and to pick up a coupon for the Foster City "touchless"carwash. At an undiscounted $22.95 the carwash is somewhat pricey, but the $10 coupon makes the service a value proposition.

    (I don't know exactly what "touchless" means because at least three different attendants go over each car, once to wipe the exterior after it's run through the machine, and two to clean the windows and vacuum the interior. Oh, I see, the website explains:
    Our car wash accommodates vehicles up to 7’6” high and tires up to 13” wide. Because we do not have large dangling carpet strips, big roller brushes and plastic wands that touch your vehicle, damage is eliminated.)
    The human touch is okay, just not carpet strips, brushes, and wands.

    Note: the etymology of "manufacture" dates back centuries to "something made by hand" but has come to mean "the making of articles on a large scale using machinery (Google's definition)." Large-scale manufacturing, despite its quality, speed, and cost benefits, has a negative meaning in progressive circles because of environmental externalities and working conditions.

    With its emphasis on the human touch, the customization of services, small business pedigree, and reasonable prices, the Foster City carwash is a poster child for desirable 21st century business. Just don't let them get too big and successful, though....

    Wednesday, August 22, 2012

    Suspended Colon

    Oakland Athletics pitcher Bartolo Colon has received a 50-game suspension for using synthetic testosterone. The 39-year-old pitcher was in the midst of a successful comeback season with the A's:
    The 39-year-old Colon is 10-9 with a 3.43 ERA in 24 starts this season, his first with the A's, and has a 171-122 record in 15 big league seasons. He was due to start Thursday in Tampa.

    A two-time All-Star, he won the 2005 AL Cy Young Award after going 21-8 for the Los Angeles Angels.
    Five players have been suspended so far this year:
    Marlon Byrd, 34, free agent outfielder
    Melky Cabrera, 28, Giants outfielder
    Bartolo Colon, 39, Athletics pitcher
    Freddie Galvis, 22, Phillies infielder
    Guillermo Mota, 38, Giants pitcher
    It's a five-member sample size, and we can't be definite about who uses performance-enhancing drugs and who doesn't. Nevertheless, the patterns are suspicious. Older athletes, especially those whose statistics have improved recently, are one group who should be scrutinized. And, yes, Bay Area teams, whom three out of the five miscreants play for, seem to be culpable. Coincidence...or are we just trying to escape the obvious?

    [Update 8/23 - Bruce Jenkins:
    In the wake of Bartolo Colon's 50-game suspension, identical to Cabrera's bust for excessive levels of testosterone, the Bay Area is now viewed as the epicenter for performance-enhancing drugs. Why would anyone doubt that at this point?]

    Tuesday, August 21, 2012

    Sell in May, Miss the Play

    The old saying on Wall Street is that stocks decline when summer begins, i.e., sell in May and go away. Here's some supporting evidence:
    Over the last 12 months, investors who held to this belief made out pretty well. From May 1-November 1, 2011, the Dow lost 6.7%. From November 2011 through April 27, 2012, it gained 10.7%...

    If we open a historical window – specifically, The Stock Trader’s Almanac – back to 1926, we see the S&P 500 rising 4.3% on average during May-October and gaining an average of 7.1% from November-April.
    Following that strategy robotically would have been a mistake if you were an investor in Apple, which yesterday became the most valuable public company in U.S. history.

    After an early dip in May the indices have recovered since while Apple is up 15% to an all-time high.
    Now that shares of Apple have already hit my target of $650 to $700 from last April, I'm going to take some off the table soon, but definitely before year-end. As another old saying goes, the bulls make money, the bears make money, but the pigs get slaughtered.

    Monday, August 20, 2012

    The City People Sing About

    Scott McKenzie, who sang the ballad "San Francisco (Be Sure to Wear Flowers in Your Hair)," has died at the age of 73.

    Mr. McKenzie's composition couldn't surpass in popularity either of the top two San Francisco songs, "I Left My Heart" or "San Francisco (Open Your Golden Gate)" but over the years has exhibited remarkable staying power. Derided for its fairy-tale simplicity when it was released in 1967, "San Francisco" evokes the dawning of the Age of Aquarius and ignores the darker aspects of the Sixties, for example, Indochina, ghetto riots, and assassinations.

    The former, I suppose, are the memories that we aging Baby Boomers wish to hold on to. R.I.P.

    [Update: another page to add to the San Francisco songbook is Otis Redding's Sitting on the Dock of the Bay. I hadn't realized until now that the lyric is "I left my home in Georgia, headed for the 'Frisco bay." I had always heard crystal bay. Today's word: mondegreen.]

    Sunday, August 19, 2012

    The Milkman Goeth

    The latest chapter in his 50-game suspension makes Melky Cabrera look especially bad. Per the NY Daily News: [bold added]
    San Francisco Giants star Melky Cabrera created a fictitious website and a nonexistent product designed to prove he inadvertently took the banned substance that caused a positive test under Major League Baseball’s drug program.

    But instead of exonerating Cabrera of steroid use, the Internet stunt trapped him in a web of lies. Amid the information-gathering phase of his doping case last month, his cover story unraveled quickly, and what might have been a simple suspension has attracted further attention from federal investigators and MLB.
    As Mercury sportswriter Tim Kawakami said, "If the Giants had any thought of bringing him back either in the postseason or next season, this has to end it."

    I know nothing about performance-enhancing drugs other than what's in the popular press, so treat the following comment accordingly: it seems to me that athletes, like embezzlers, get caught because they're greedy. If they're willing to take a little PED to enhance their performance modestly, they stand a much better chance of passing the test.

    But if they pump it up to increase their batting average by nearly 100 points, as Melky Cabrera did from 2010 to 2012, they'll be caught for sure.


    Not As Exciting As We Thought

    OK, maybe the Apple-Samsung patent trial of the century isn't as exciting as we originally thought:
    As the arguments wind down, Apple and Samsung will be handing the case over to jurors who may have difficulty understanding the intricacies of the issues, and who at times have had trouble staying awake during more technical discussions [bold added].
    Hey, been there.

    Saturday, August 18, 2012

    Hangin' at the Food Court

    The shopping center was built on the Tanforan Park racetrack.
    I like hangin' at the Tanforan Food Court.

    Lured by $5-7 lunch prices, young families line up at the food kiosks. The crowd is noisy, young, and working class, reflective of a suburban shopping center that has Sears, J.C. Penney, and Target as anchor stores.

    It's a world away from the tony Peninsula country clubs that are just up the hill.

    The Starbucks provides free Wi-Fi, and I can surf to my heart's content.

    Since high school, I've acquired the ability to tune out ambient noise and focus on the book or video display in front of my nose.

    Of course, one man's focus is another man's obliviousness. My wallet had fallen out of my pants pocket and was under a chair. The bus "boy"--actually a guy who was about 40--pointed it out to me, then hustled away to clean tables, empty garbage cans, and sweep the floors.

    I glanced at him periodically over the next  hour. He was always rushing about, pouring his energy into a job that likely didn't deserve him. I thought about how much trouble he saved me because I had not lost my wallet stuffed with credit, debit, and membership cards, not to mention my driver's license.

    I walked up to him and slipped him a twenty. Initially he wouldn't take it, but I insisted. It was a win-win for both of us, and I got the better end. © 2012 Stephen Yuen

    Friday, August 17, 2012

    An Accountant's Inbox

    Why don't I write more about what I do for a living? Well, true to the popular stereotype, accounting is pretty boring to everyone who is not an accountant, and even some accountants have been known to nod off after a while. (Quick! name TV shows whose lead character is a CPA. Right, can't do it because THERE ARE NONE.)

    Here are two typical examples of materials that flood the inbox.

    Draft of the AICPA Audit and Accounting Guide Not-for-Profit Entities. This is an increasingly important topic. Non-profit entities are growing like Topsy. Their accounting issues are just as complicated, if not more so, than for-profit businesses. Not only must NPE's abide by Generally Accepted Accounting Principles, they must make sure restricted donations are properly walled off from the rest of the entity's operations and that program expenses are reported separately.

    The draft guide is 476 pages long, and the vast majority of non-profits don't have the resources to follow every jot and tittle. Red tape sticks to both the just and the unjust.

    Depreciation on Office Artwork. Depreciation on office artwork hardly comes up for most accountants. In Taxation 101 one learned that art doesn't depreciate--Winged Victory looks the same as it did for millennia, right?

    It turns out that the subject isn't closed. The IRS ruled in 1968 that a "valuable and treasured art piece does not have a determinable useful life." When I look at the stuff hanging on the walls of my doctor's or stockbroker's office, the adjectives valuable and treasured aren't the first words that pop into mind.

    The author marks the changes in tax depreciation law since 1968 and argues that most office artwork is depreciable. The article turned out to be interesting. I guess that's why I'm an accountant, and you're probably not.

    Thursday, August 16, 2012

    Disappointment At the Genius Bar

    Within a few minutes the Apple Genius diagnosed why the MacBook had been freezing on startup: a graphics card gone bad.

    The NVIDIA graphics processors on early-2008 MacBook Pro's were known to fail as early as 2008, and Apple and NVIDIA agreed to effect a free repair within four years from the date of purchase and only if the card failed.

    Of course, the law of warranties applied in this situation (the product breaks after the warranty expires), so I would have to pay $320 to fix the laptop. I said that I would think about it, especially after looking at all the shiny new laptops in the Apple Store. (Replacing the soldered card is beyond my capabilities, so a do-it-yourself repair is out.)

    I have PC's, an iPad, and an iPhone, and my business needs for a MacBook aren't urgent. Nevertheless, it's disappointing that there's not an economical solution to this problem.

    [Update: I took the laptop to We Fix Macs, a long-time Apple repair shop next to the Fry's in Palo Alto. They quoted $450. We're going in the wrong direction.]

    Wednesday, August 15, 2012

    Too Much Juice in the Milk(man)

    The San Francisco Giants' pennant hopes were dealt a stunning blow today when their left fielder, Melky ("the Milkman") Cabrera, was suspended 50 games for using synthetic testosterone. The Milkman wasn't just any outfielder: he was in contention for the National League batting title and was the Most Valuable Player in the 2012 All-Star Game.

    Because the Giants only have 45 games remaining on their schedule, they'll see him again this season only if the Giants make it deep into the playoffs (and if the Giants want to take him back). And any success that the Giants may have--for example, if they win the division in a close race--will be tainted by the knowledge that their stellar first-half record was partially due to a player who cheated.

    For nearly a decade the Bay Area has been the center of the baseball steroid controversy. Like a bad horror movie, the monster that we thought was dead keeps coming back. © 2012 Stephen Yuen

    Tuesday, August 14, 2012

    Sync-ing While Swimming

    The U.S. swimming team's 31 Olympic medals don't include any in synchronized swimming. Maybe if they had one for synchronized lip-syncing (is that a redundant redundancy?) they would have earned at least a bronze:

    Note: if you're over 30, you may have missed the cultural phenomenon that is Carly Rae Jepsen's Call Me Maybe, a silly song that has over 200 million (!) hits on YouTube.

    Monday, August 13, 2012

    A Record After Sixteen Years

    Apple today quietly marked a financial milestone. Shareholders of record will be paid $2.65 per share next Thursday, the first dividend in 16 years. The amount may seem small, but the payout of 0.42% ($2.65 / $630) per quarter is substantially higher than the 0.05% earned on my Bank of America passbook account (B of A would pay 8 cents per quarter on a $630 savings account balance).

    An investor in Apple, of course, is also subject to the risk that the stock price would decline, and recovery of a new investment in Apple shares is much less certain than cash from an insured savings account.

    On balance, your humble observer thinks that the stock price and dividend payout will continue to grow. But Apple shares already having risen 53% this year, there are no guarantees. That's why the British often refer to stock-market investing as punting. © 2012 Stephen Yuen

    Sunday, August 12, 2012

    In Diversity There is Strength

    2008 frozen MacBook
    Not worth fixing?
    Your humble servant settled the Windows vs. Mac controversy years ago. The solution: get both, unless you're a starving student. For personal uses, such as entertainment or editing videos, the Mac is much easier to work with. Also, transferring data such as calendars and contacts between Macs, iPads and iPhones is quickly effected.

    For business use, I still am wedded to the Windows version of Microsoft Office, as are most of my clients. Yes, Office files can be moved between platforms, but I'm about 20 percent faster on the PC version and do work on the PC more than on the Mac.

    It's always handy to have an extra computer in case one of them breaks down. Over the weekend the four-year-old MacBook froze when starting up and still won't get unstuck. (This post has been written on a five-year-old Dell desktop.) It's an inconvenience that the MacBook is down, but the Dell keeps me in business so there's no need to rush the fix / replace decision.

    In diversity there is strength.

    Related: AT&T persists in hawking its U-verse package. AT&T already has our landline, mobile, and DSL internet account. Now it wants our television, too.

    However, switching from our satellite TV account to AT&T would be risky. AT&T's Internet was down for 12 hours from Friday night to Saturday morning; if we had switched to U-verse our TV could have been down, too. The vulnerability to a single provider is not worth the few dollars saved. © 2012 Stephen Yuen

    Saturday, August 11, 2012

    America's First CFO

    On Saturday morning Mitt Romney announced that Paul Ryan will be his running mate. Already there has been a lot of ink spilled about Paul Ryan's background, the personal compatibility of the two men, what his selection means for the race, the pros and cons of the "Ryan budget" and other policy positions. Whether or not they support him, everyone seems agreed that Paul Ryan is a serious individual.

    Reflecting his business background, Mitt Romney seems to this observer to have picked Paul Ryan to serve as his Chief Financial Officer. He needed someone who was comfortable diving deeply into the numbers but who could also maintain the big-picture perspective necessary to craft 30-second soundbites that would explain economic strategy. The Executive Branch positions of Treasury Secretary and Office of Management and Budget, important as they are, are too limiting for what Paul Ryan will be asked to do.

    He could have picked other running mates who would appeal to the diversity demographic or who might hail from larger swing states. His selection of Paul Ryan becomes more understandable if one thinks of Mitt Romney as a CEO who needed a CFO who knows the numbers better than anyone else. © 2012 Stephen Yuen

    Friday, August 10, 2012

    Fourth Time's Not So Charming

    Can't do much sightseeing with a killer on your tail. (Photo from
    As fans of the Bourne film trilogy, we plunked down our eleven (!) bucks apiece to see the fourth installment of the series. The Bourne Legacy stars Jeremy Renner as Aaron Cross, a genetically enhanced super-warrior created and trained by the Central Intelligence Agency. Jason Bourne, played by Matt Damon, is referenced briefly but never appears (unless a silhouette in the water counts).

    Because of the earlier movies' revelations about CIA black ops, the higher-ups in the agency decide to terminate other secret projects before they come to light, and we know what "terminate" means in spook-speak. Aaron Cross is in mortal danger, along with researcher Dr. Marta Shearing, played by Rachel Weisz.

    The new movie's got some well-choreographed chase sequences, and the lead characters are attractive.

    However, I'm getting a little tired of the Bourne universe. In the first film, the Bourne Identity, Jason Bourne's former CIA boss sends teams of killers after him until the boss's boss calls a (permanent) halt to the hunt for Bourne. In the Bourne Supremacy the aforementioned big boss turns out to be a bad guy who's in cahoots with a Russian mob leader; of course, by the end of movie #2 our hero eventually triumphs over both. In the Bourne Ultimatum  bad guys who are running another CIA secret project try to silence Bourne, but their efforts backfire.

    So the Bourne formula appears to be this: whenever the studio wants another movie, another super-secret project run by amoral, if not evil, characters magically appears. To cover up their mis-deeds they try to kill soldiers like Jason Bourne and Aaron Cross who have served them loyally.  The bad guys also have no compunction against gunning down innocent bystanders. (One wonders why teams of assassins and technicians continue to obey these kill-on-sight orders, since it's obvious their knowledge puts them in danger, too.)

    Through four movies the CIA doesn't spend one second fighting the enemies of the United States. I'm beginning to think the film-makers have a certain point of view they're trying to get across.

    Thursday, August 09, 2012

    Two-Edged Sword

    Technology is the small investor's friend. Oceans of contemporaneous data, as well as sophisticated tools to analyze them, are at his fingertips. Computers have driven down the cost of trading to a few pennies a share, a small fraction of the commissions from a generation ago.

    Technology is the small investor's enemy. High-frequency traders move millions of shares in a few seconds. Using powerful computers, they can overwhelm human buyers and sellers and collapse values in single companies, even entire markets.

    One company, Knight Capital, that lives by the HFT sword was almost destroyed last week when its computers bought billions of dollars of stock more than its capital structure should have allowed. Knight was forced to liquidate its excess positions at a $200 million loss and seek emergency funding from other financial firms.

    As a small investor I participate in this new, exciting, and dangerously volatile environment by not placing market, stop-loss, or any orders that execute trades at "market" prices that can rocket suddenly upward or downward.

    I always use limit orders that execute at prices that I specify. I know that I will never sell at the daily high or buy at the daily low; the high-frequency traders will snatch those up before price information travels from eye to brain. As was true before computers, there are no guarantees that limit orders will execute, so this policy can't be followed by someone who absolutely has to get out that day.

    I hope that you, dear reader, or I are never in that position.

    [Update - 8/10/12, the consequence to small investors if Knight went under:
    The bigger risk to small investors might be if "market makers" like Knight, which play a huge role in executing retail trades, were to disappear altogether. In that case, small investors could be forced to pay higher prices for stocks and funds they buy and get lower prices for ones they sell, at least temporarily, say market experts.
    [Update - 8/11/12: the dangers to financial markets have led to calls for more regulation of HFT: "these high-frequency trades are not regulated and have begun to destroy the market."] © 2012 Stephen Yuen

    Wednesday, August 08, 2012

    Toil and Trouble

    One subset of the higher education bubble--in which tuition increases far outpaced the ability of students and their families to pay for them--is the law school bubble [bold added]
    the legal industry is stagnating, and suffers from a severe overabundance of young graduates, many of whom applied to law schools under the false pretenses that their degree would be an express ticket to a six figure salary. Instead, many graduates are now contending with six figures of crushing debt and murky career prospects.

    These new statistics are the latest evidence that young Americans are getting the hint that the market for lawyers is perhaps not what it once was....The number of applications also dropped dramatically, which could force law schools to ease up on their mind bogglingly expensive tuition.
    When a bubble begins to deflate, data are fudged in a desperate attempt to keep the party going. (Recent instances are real estate appraisals and tech companies' reported earnings.) Law schools are no exception. A WSJ article reports how three law schools consistently under-reported the amount of debt their students accumulated before graduating.

    The errors weren't insignificant. The originally reported / corrected debt loads were: Barry Law School - $41,190 / $137,680, University of Kansas - $41,574 / $67,598, and Rutgers - $27,423 / $80,446. If the errors were random, one would expect to see over- as well as under-reporting, but of course the mistakes weren't random but self-serving.

    Not a proud chapter in the life of a profession that hounds everyone else for their ethical lapses.

    Tuesday, August 07, 2012

    The Burrito Cure

    After we met with the software company in San Francisco (as is true with all sorts of projects, the endeavor is taking twice as long and will cost twice as much as originally estimated), the startup entrepreneur craved Mexican food.

    He suggested a well-known restaurant chain. I countered with Pancho Villa Taqueria in San Mateo.

    Pancho Villa isn't fancy, but the food is fresh. The grills are always going as the line of customers snakes out the door.

    The salsa bar is well-stocked with mild and spicy condiments, and we kept returning to liven up the tortilla chips.

    What sets this restaurant apart from Chipotle, Freebirds, and other burrito bistros is its much larger selection of meat fillings.  One quickly gets tired of chicken, beef, or pork prepared in a uniform way, albeit deliciously.

    The entrepreneur abandoned his usual salad for a platter covered with cheese, sour cream, and guacamole. The meal helped to dispel his unhappiness from the morning meeting.

    From the looks of our project, I suspect we'll be needing more doses of the burrito cure in the months ahead.

    Monday, August 06, 2012

    A Surprising Group of Victims

    One would think that it would be a waste of time to try to scam highly educated, smart people like lawyers, but one would be wrong.
    Con artists say they live abroad and need help collecting money from a debtor or a legal settlement. [snip]

    Even after doing due diligence, some lawyers fail to discover the scam. They deposit the check into the firm's trust account—a special account for client funds—subtract their fee, and then wire the balance to an overseas bank account, before the law firm's bank realizes the check is a fake or can stop the wire transfer.
    The Nigerian scams that have fouled everyone's inbox since the 1990's are variants of this scheme. There's a pile of money that the foreign national can't access because of banking or legal restrictions. They need the target to play the role of middle man--for which he will be compensated handsomely--to get the money out. The victim thinks he is taking money off the top; in reality he's just being taken.

    It's surprising that lawyers succumb to these deceptions, first, because such frauds have been around a while, and second, because lawyers are trained to be skeptical.

    I suppose that, despite the myth, they're human, too, and can fall prey to greed like the rest of us.

    Sunday, August 05, 2012

    Until the Day I Die

    As a lifelong Episcopalian, I am disturbed about the direction that the church has taken over the past half century.

    Friends who have typecast me as irredeemably conservative might be surprised to learn that the ordination of women, gay priests and bishops or the blessing of same-sex unions do not trouble me. Here are two concerns that are on the list:

    Pursuing Social Justice over Spreading the Word. Throughout history Christians' urgency to preach the Gospel rested on a simple truth: the time spent in one lifetime is infinitesimal compared to the hereafter, and Christians need to convert souls while they are mortal lest they be lost to eternity. Through its actions the 20th- and 21st-century Episcopal church has shown that social justice in the here and now takes primacy over getting souls into heaven. The de-emphasis of salvation leads me to guess that church leaders in their hearts believe heaven and hell are only fairy tales that they teach in Sunday School.

    I also wish they would quit using the euphemism. "Social justice" means taking stuff away from those who have too much and giving it to those whom church leaders have decided have too little. Why don't they just say what they really believe? From each according to his ability, to each according to his needs.

    Sleeping With the Statists: A perusal of the July General Convention resolutions, which includes endorsing statehood for the District of Columbia and expansion of Medicaid to states that want to decline (legally, according to the Supreme Court) Medicaid expansion, shows that the Episcopal Church has not only become deeply entwined in secular politics but consistently takes positions nearly indistinguishable from the far left wing of the Democratic Party.

    I heartily endorse charity. It is a noble endeavor to feed the hungry, heal the sick, donate to the poor, and aid strangers in need. But charity is a voluntary activity. I don't see anything "Christian" about advocating laws to effect wealth redistribution. The church empowers Caesar, who is no friend of religion, at its peril.

    Times columnist Ross Douthat says the changes in the Episcopal Church may have accelerated its decline:
    Today the Episcopal Church looks roughly how Roman Catholicism would look if Pope Benedict XVI suddenly adopted every reform ever urged on the Vatican by liberal pundits and theologians. It still has priests and bishops, altars and stained-glass windows. But it is flexible to the point of indifference on dogma, friendly to sexual liberation in almost every form, willing to blend Christianity with other faiths, and eager to downplay theology entirely in favor of secular political causes.

    Yet instead of attracting a younger, more open-minded demographic with these changes, the Episcopal Church’s dying has proceeded apace. Last week, while the church’s House of Bishops was approving a rite to bless same-sex unions, Episcopalian church attendance figures for 2000-10 circulated in the religion blogosphere. They showed something between a decline and a collapse: In the last decade, average Sunday attendance dropped 23 percent, and not a single Episcopal diocese in the country saw churchgoing increase.
    Remembering the beauty of the Episcopal Church that used to be, I will continue to be a member until the day I die. Sadly, no one will be taking my place.

    Saturday, August 04, 2012

    The Big One That Got Away

    Los Angeles Angels rookie Mike Trout is tearing up the American League:
    Heading into Saturday night's play, Trout was leading the league in average (.347, leaving everyone else in the dust), stolen bases (33) and runs scored (84, in 84 games), while ranking third in on-base percentage (.408), second in slugging percentage (.603), and second in OPS (1.012). He's a legitimate MVP candidate - Rookie of the Year is a dead-solid lock - and he's done all this despite a late start, joining the Angels near the end of April, which leads us to the most remarkable development of all.

    Virtually by himself, he transformed the Angels from a sad-sack disaster into perhaps the most feared team in baseball.
    22 organizations, including the local teams Giants and A's, had their shot at drafting Mike Trout in 2009 before the Angels picked him at #25 (the Diamondbacks selected two others ahead of him and the Angels also had slot #24).

    According to veteran SF Chronicle sportswriter Bruce Jenkins, Mike Trout hasn't been over-hyped. His statistics, depending on what one is measuring, compare with Ty Cobb, Al Kaline, Joe DiMaggio, Rickey Henderson, Frank Robinson, and Mickey Mantle, all of whom are in the Hall of Fame.

    On Tuesday Mike Trout turns 21.

    Friday, August 03, 2012

    Patent Trial of the Century: A Must-Follow Event

    After only a few days the Patent Trial of the Century between Apple and Samsung is turning out to be a must-follow event for tech watchers.
    The iPad and iPhone were center stage (along with questions about whether Samsung stole ideas from them for their own phones and tablets). There were lines to get in. Security. Detail-hungry reporters from around the globe. Apple execs under the spotlight and a smattering of geekerati.

    But there was one big difference: Imagine an Apple product launch at which Apple's promoters-in-chief were required to tell the truth, the whole truth and nothing but the truth.
    Intellectual property is an arcane topic, and both Apple and Samsung will continue to be successful regardless of the outcome. However, anyone who is interested in how the smartphone came to be and how secretive Apple makes its decisions will have a lot to pick over.

    Scott Forstall and Phil Schiller were on the stand.
    In addition, there was one big reveal: despite Steve Jobs' publicly stated antipathy toward a smaller iPad, an e-mail from software Senior VP Eddie Cue showed that a 7" model has been considered at Apple's highest level at least 18 months ago:
    Having used a Samsung Galaxy, I tend to agree with many of the comments below (except moving off the iPad). I believe there will be a 7" market and we should do one. I expressed this to Steve several times since Thanksgiving and he seemed very receptive the last time. I found email, books, facebook and video very compelling on a 7". Web browsing is definitely the weakest point, but still usable.
    One perhaps-unintended cost of the trial is that Apple's disclosure of its inner workings may prove to be more damaging to Apple than Samsung's purported infringement. Another irony is that it is becoming clear that what separates Apple from everyone else is its unique combination of people, processes, and patents, and not any one thing that imitators can focus on and duplicate.

    [Case in point: Ron Johnson, creator of the Apple Store which has been "hailed as the fastest retail success in history", is having a rough time transplanting his ideas to J.C. Penney.]

    Thursday, August 02, 2012

    Responding to Incentives

    Columnist Mark Purdy opines on the Olympics badminton scandal. Excerpts: [bold added]
    Doubles teams from South Korea, Indonesia and China tried intensely and doggedly to lose their matches in the round-robin portion of the badminton tournament Tuesday. Why? To put their countries in a more favorable position in the elimination bracket when it began Wednesday...

    In one match, both teams were desperately trying to play horribly and lose, so players were lobbing shots underhand to set up easy kill shots for the other team -- only to have the other team try to sabotage the kill shots with wayward returns. Officials issued warnings during the match, to no avail...

    All of the expelled teams had clinched spots in the bracket. So they were looking ahead. They were trying to get an edge. Isn't that what athletes do?...

    For example, the expelled Chinese team was clearly attempting to manipulate the 16-team bracket so that it would not have to face the other Chinese team until the final instead of the semifinals. This would have made it possible for China to win gold and silver medals rather than gold and bronze. Wouldn't you do that for your teammates? For your country?

    Over the years, history shows that if you give teams the chance to benefit from losing, they will lose.
    Mark Purdy goes on to mention examples from baseball, where teams are suspected of losing to keep superior teams out of the playoffs, and basketball, where teams attempt to redeem terrible seasons by losing so they can get a higher draft pick.

    If you reward behaviors that you don't want, ranging from single parenthood to staying unemployed to not planting corn to hitting shuttlecock serves into the net, then you will get more of those behaviors. That's why the dismal science of economics, which examines how human beings respond to incentives, has more relevance than ever before.

    Wednesday, August 01, 2012

    Not What the Doctor Ordered

    We had a very good meal at Mandaloun in Redwood City. (I can't give it five stars because the cassoulet, although tasty, was soupier than the divine and calorie-laden concoction that I've eaten on business trips to Toulouse.)

    But the point of this post is not to talk about how the meal began but how it finished. The diners in our group opted for the hard-to-make desserts such as crème brûlée.

    But I wanted the straight C12H22O11 after weeks of cutting down on sugar and flour. So I ordered the churros, which are sold everywhere from Costco to the AT&T ballpark. When the churros were dipped in the espresso-chocolate sauce, even the brûlée-spooners couldn't keep their forks off my plate.