Why Not, Aubrey?

After the San Francisco Giants won the 2010 World Series, veteran Aubrey Huff advised then-rookie catcher Buster Posey.

Huff: Don't think this happens every year, kid.

Posey: Why not?

Mercury News photo

Buster Posey was the Rookie of the Year, suffered a season-ending injury in May, 2011 (the Giants missed the playoffs), then roared back in 2012 to start the All-Star game and lead the Giants to another World Series title.

Today Buster Posey was named the winner of the National League Most Valuable Player award. And where was 25-year-old Buster on this special day?

Posey, seeing the potential conflict on the award schedule, never asked if he could back out of the annual fundraiser for the Transitional Learning Center in Leesburg, Ga. His mother, Traci, teaches at the school for students with disciplinary and academic issues who haven't succeeded in other settings. Tickets for the dinner, billed "Come 'Steak' a Claim for Education," were $10. Raffle tickets were $1.

"I figured we could make it work one way or the other," Posey said. "It turned out great having more family and friends around."

Why not, indeed.

Late to the Party

I've been helping a friend of mine test an iPad business app. The process is fascinating: app screens are storyboarded like in film production, and each screen has to be tightly defined in order to minimize programming costs and keep to the schedule. My modest role is to test-drive the app and check some of the calculations. Typically, my setup uses two computers (one Mac and one PC) and an iPad.

I have been working in accounting and related areas for over three decades. This is a lot more fun. To be young again....

Benghazi: We Don't Know Anything

After the 9/11 murder of four Americans in Benghazi, U.N. Ambassador Susan Rice went on all the Sunday talk shows to lay the blame on an obscure video. The immediate reaction of many viewers was incredulity. Not only was the Innocence of Muslims hardly seen by anyone, the abundance of anti-Islam materials that has arisen since 2001 makes it hard to see why this particular low-budget excrescence was the catalyst for the widespread violence that roiled the Middle East, not just Benghazi.

However, your humble observer could not accept the explanation of some Republicans either--that the video was (falsely) blamed because the Obama Administration was reluctant to admit that its foreign policy had failed. Both explanations are too easily discredited after a few days of Congressional hearings.

One can believe the worst of one man's motives, but surely not everyone in the CIA or the State and Defense Departments would fall on their sword for the President unless there were good national security reasons. For example, there have been rumors that assassinated ambassador Chris Stevens was linked to arms shipments to Syrian rebels, or that the CIA was running a secret prison in Benghazi.

After the David Petraeus love triangle story took everyone by surprise less than a week ago, then mushroomed into a love-hexagon over the past few days, one thing is certain. We don't know anything.

Protection Racket

A family member clicked on an email attachment, and the computer screen exploded with pop-up boxes. The Family PC had become infected with malware.

The ironically named System Progressive Protection repeatedly warns that one's computer has been invaded by a virus. A credit-card payment to SPP would supposedly remove the "virus" but really just de-activates the bogus warnings. Worse, the protection payment itself opens up the victim to identity and credit-card theft.

There are various legitimate programs that would eradicate SPP, but I didn't feel like purchasing and adding yet another program to our creaky five-year-old Dell Vostro. Because we had been regularly backing up the Dell to an external hard drive, it was possible to fix the problem the hard and perhaps better way.

Erasing the internal drive and reloading Windows XP from a set of original 2002 CDs was fairly easy. However, it took three days to download and install the various updates, including lengthy "service packs", from Microsoft. After we reloaded other software, such as the Office (Word, Excel, PowerPoint) suite, the backup drive restored the data.

The whole episode is not something we would go through voluntarily, but at least by clearing away leftover code and unused programs the PC is working better than it has in a long time. We won't have to replace it this year after all.

[Note: Microsoft no longer supports Windows XP, and it's not clear how much longer the service packs and updates will be available for download. The Dell has maybe two more years of useful life.] © 2012 Stephen Yuen

Veteran's Day, 2012

2011: your correspondent pays
his respects at the National Cemetery
of the Pacific, Punchbowl

As the World War II generation leaves the scene, let's take every opportunity to honor their service. Give them a call, pay a visit, or buy them a coffee. Encourage them to talk about the old days, though maybe you'd rather be doing something else.

Because we don't know when we will die,
we get to think of life as an inexhaustible well.
Yet everything happens only
a certain number of times,
and a very small number really.
How many more times will you remember a certain afternoon of your childhood,
some afternoon that's so deeply a part of your being that you can't even conceive
of your life without it.
Perhaps four or five times more, perhaps not even that.
How many more times will you watch the full moon rise?
Perhaps twenty. And yet it all seems limitless.
--Paul Bowles, The Sheltering Sky

Still Going Strong

Eugene Fama on too-big-to-fail (H/T Tyler Cowen) [bold added]:

Basically, the institutions that are considered to be too big to fail have their debt priced as if it’s riskless, which gives them a low cost of capital and makes it very easy for them to expand and become an even bigger problem. Plus, everybody now accepts the assertion that they are too big to fail, which creates a terrible moral hazard for the management of these financial institutions. Business leaders won’t consciously tank their companies, but too big to fail will push them toward taking more risk, whether they realize it or not.

I don’t think Dodd–Frank (the Dodd–Frank Wall Street Reform and Consumer Protection Act) cures that moral hazard problem. Even if lawmakers could devise the perfect regulation for such a cure, the chance that it will be implemented by the regulators in the way designed is pretty close to zero.

The simplest solution would be to raise the capital requirements of banks. A nice place to start would be a 25% equity capital ratio, and if that doesn’t work, raise it more. The equity capital ratio needs to be high enough that a too-big-to-fail financial institution’s debt is riskless, not because of what is essentially a government guarantee but because the equity ratio is very high.

In 1969 Fama, Fisher, Jensen and Roll wrote the seminal article on the efficient-market hypothesis. Lesser lights have won the prize; as Tyler Cowen says, give the man his Nobel.

Now That the Election's Over

Now that the election's over we are likely, finally, to learn the truth about:

Benghazi

Obamacare's costs

End-of-year defense layoffs

FEMA's before-and-after performance on Hurricane Sandy

Unemployment statistics

Whether General Motors is really healthy

What the President meant when he said he would be "flexible" on missile defense

Your humble observer believes that the President will wind up unscathed on at least some of these issues, so this post is not a criticism of him.

The mainstream media turned a blind eye to these questions in the run-up to the election. Their neglect was a gross dereliction of its duty to help the electorate make informed choices.

Reporters sometimes have to choose between their professed responsibility to discover and disclose the truth (please, no sophistry about the subjectivity of knowledge) and their personal politics. CPAs tabulate inventory counts that could unexpectedly lower their clients' earnings. Scientists report the harmful side effects of experimental drugs and possibly negate millions of dollars and years of research. Even lawyers, who have a primary responsibility to their clients, have a duty to disclose material facts that could help the other side.

If the press had pursued these 2012 stories with even a fraction of the enthusiasm with which it pilloried the Bush Administration over Hurricane Katrina, Abu Ghraib, Guantanamo, and the 5.5% unemployment rate in 2004, then it would be deserving of the esteem with which we regard most of our venerable professions. After its performance in 2012, it's doubtful whether the press will ever recover, and we all will be the poorer. © 2012 Stephen Yuen

Big Data Wins the Biggest Prize

When Rush Limbaugh made fun of the Obama campaign dinner at Sarah Jessica Parker's townhouse, I laughed right along. It was the apotheosis of the Hollywood love-in for President Obama, ripe for mockery. It turns out that the Democrats were playing chess while the Republicans thought the game was checkers (the way things turned out a cute dog might have helped). Key to the President's re-election was

a massive data effort that helped Obama raise $1 billion, remade the process of targeting TV ads and created detailed models of swing-state voters that could be used to increase the effectiveness of everything from phone calls and door knocks to direct mailings and social media.

The dinner with Sarah, and its West Coast counterpart dinner with George Clooney, were not affectations but part of a well-thought-out strategy [bold added]:

For the general public, there was no way to know that the idea for the Parker contest had come from a data-mining discovery about some supporters: affection for contests, small dinners and celebrity. But from the beginning, campaign manager Jim Messina had promised a totally different, metric-driven kind of campaign in which politics was the goal but political instincts might not be the means. “We are going to measure every single thing in this campaign,” he said after taking the job. He hired an analytics department five times as large as that of the 2008 operation, with an official “chief scientist” for the Chicago headquarters named Rayid Ghani, who in a previous life crunched huge data sets to, among other things, maximize the efficiency of supermarket sales promotions.

Michael Scherer's article in Time is a fascinating read. Comments:

1) The Republicans undoubtedly will create, if they haven't done so already, a similar big-data operation.

2) The first important step, which began shortly after 2008, was the 18-month-long project to create a "mega" file that unified the many disparate Democratic databases. This means that work on 2016 has already begun (sigh).

3) Holding the Presidency confers an enormous advantage. The incumbent party--whether Democrat or Republican--will have access to oceans of data not necessarily available to its opponent. It is nigh impossible to enforce privacy rules, especially since enforcement is done largely through self-policing. [Flashback: Big Data is the new Plastics.]

San Francisco: Your Government on Display

Yesterday Americans voted on who is best equipped to lead them on matters of war and peace, jobs and the economy, health care, education, and public safety.

On the East Coast state and local governments were strained to the breaking point as millions tried to recover from the damage wrought by Hurricane Sandy. Thousands have no food, power, or water as winter approaches.

Meanwhile, in Baghdad by the Bay there are other priorities. The San Francisco Board of Supervisors met on Monday to consider whether to ban public nudity.

For two hours, speakers tussled over whether the Castro "naked guys" were a few harmless individuals just expressing themselves, or a growing public nuisance that San Franciscans should no longer have to tolerate. Supervisor Scott Wiener, who represents the Castro, is proposing legislation forbidding genital exposure on city sidewalks, plazas, parklets, streets and public transit while exempting street fairs, festivals and parades.

Comments:
1) These issues always seem to find politicians named Wiener (or Weiner)
2) Activists are right to take a stand. Let them take away your plazas and parklets, and parades will be right behind.
3) If the naked guys look anything like the sagging, pot-bellied specimens I see at the gym (hey, I'm not exempting myself), it's obvious why there's a public outcry.

Quote of the day: "when it's in my neighborhood and I can't enjoy lunch because a guy is spread-eagle near me, it's a problem."

Tuesday After the First Monday in November

Our voting machines are easy to use.

After I signed my name, the polling-place lady asked if I wanted a paper ballot.

No, I trust the machines, I said smilingly.

The machine is much faster, and there was little chance someone would risk vote tampering because the headline race was a foregone conclusion. Here in California a clear majority admire the President's governance, and we do our best to make sure his policies and results are replicated in Sacramento.

With one exception I adhered to my two general rules of not voting for lawyers (although some of my best friends, yadda yadda...) and not voting for propositions, regardless of how much I sympathize with their intent. Laws hastily drafted often have unintended consequences, and we pay legislators to resolve those problems in committees before laws are signed, not afterwards in the courts.

As for the exception, well, it's something I've wanted for a long time. © 2012 Stephen Yuen

Along the Bike Path

Redwood Shores Oracle HQ: as seen from Foster City

The synthetic turf soccer field was completed in September

This pond is a favorite with water skiers., but not after a dry summer.

Stubbornly Staying Put

Indefatigable California native and critic Victor Davis Hanson says he's not leaving because California has all the tools it needs to recover its past greatness:

The four-part solution for California is clear: don’t raise the state’s crushing taxes any higher; reform public-employee compensation; make use of ample natural resources; and stop the flow of illegal aliens. Just focus on those four areas—as California did so well in the past—and in time, the state will return to its bounty of a few decades ago. Many of us intend to stay and see that it does.

Too simple? Let's give it a try for a few years by concentrating on basic governmental services, e.g, education, transportation, and public safety, and by eliminating expensive trophy projects like $100 billion high-speed rail lines to nowhere.

Watch what animal spirits are unleashed. I hope I live long enough to see it.

Saturday Mass

Being more of a Sunday Christian than an everyday one, I find Holy Week (before Easter) and Christmas week to be taxing because of the multiple services that are shoehorned into an already crowded calendar.

This Saturday, however, I was receptive to an "extra" service. The setting was St. Paul's, a 100-year-old church on the Peninsula.

A group had gathered for the annual convocation of the Deanery--one of the organizations that I participate in and one of the many that are sprinkled throughout the Church. I was in a contemplative mood. The passage of another anniversaire will do that to you.

Apple, Bitten

Apple's market cap has fallen $118 billion since Google Maps was removed September 19th.

Other companies (GE, Microsoft, Cisco, AIG) have fallen further in market capitalization, but Apple's recent drop is nonetheless remarkable in a non-crisis year. A scant 44 days ago AAPL had been rising on the heels of the iPhone 5 announcement and the rumored iPad mini. Then the new operating system, IOS 6, was released.

The premature removal of Google Maps was one of the greatest blunders in Apple's 36-year history. Apple knew that it was taking a chance but underestimated the negative reaction:

in breaking with Google and giving iPhone users worse maps than before, Apple has gambled on three things. First, that users will like its maps’ embedded content. Second, that it will be able to improve fast. And third, that the allure of the iPhone and the loyalty of Apple’s fans will buy it time. After all, people do not buy smartphones for the maps alone, and queues for the iPhone 5 were every bit as long as for previous incarnations of the revered device. But Apple has more catching-up to do than it expected. In a market where brands can rise and fall fast, it may also have less time than it thought.

The removal of a single app, important as it may be, wasn't the reason that the market values Apple $118 billion less. Now that Steve Jobs is gone, Apple is beginning to look like just another good but not extraordinary company. The revolutionary product in the pipeline may well be a myth.

It's going to be an uphill slog back to $700 per share.

[Disclosure: I am long Apple.] © 2012 Stephen Yuen

Joy, Again

Pitcher Matt Cain & family (Chron photo)

Sometime this century we who live on the San Andreas Fault will be in the headlines. Our fair land will suffer destruction and death, comparable to or perhaps exceeding that visited upon our countrymen in the East. So while we do think about, pray for, and send help to the victims of Hurricane Sandy, one hopes that they will indulge us this moment of celebration.

Moments of widespread, unadulterated joy are rare. (By contrast, the upcoming elections will bring elation to only half of the population.) In the Bay Area the Giants have blessed us with two such occasions in 24 months through a magical mixture of teamwork, character, planning, cleverness, and yes, good luck.

On the morning of Halloween we ate, drank, and were merry.