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Sunday, February 24, 2008

Dick Cavett on Bobby Fischer

Dick Cavett, blogging in the Times, treats us to some recollections of and reflections on Bobby Fischer. Although I've read several biographies of Fischer, I doubt I've seen much live footage of him. The clip below is wonderful and a bit surprising -- it captures a moment, one we'll never see again.

Cavett's focus on Fischer's physical appearance (his height, eyes, even shoulders) is interesting, perhaps odd, but understandable given that celebrity itself is his (Cavett's) main expertise. Sylvia Nasar devoted an equivalent amount of attention to John Nash's appearance in A Beautiful Mind.

The comments on the original post are well worth reading -- many are from the generation that experienced Fischer's meteoric ascent firsthand. See here for a followup.



NYTimes: It must seem strange to people too young to remember that there was once a chess champion — of all things — who became arguably the most famous celebrity on earth. And that his long-anticipated match against the reigning Russian champion, Boris Spassky, was broadcast and watched worldwide as if it were the Super Bowl, except that chess drew a much bigger audience.

There was another element that added to the drama. With Fischer the American and Spassky the Russkie, the monumental match was seen as a Cold War battle.

The Russian chess champions considered themselves the undoubted best. Time out of mind the Soviet chess dynasty had reigned supreme, viewing themselves as a rightful symbol of Soviet superiority in all fields.

PBS broadcast the drama in sports fashion, complete with play-by-play commentary by Shelby Lyman, who himself became a household name. People stayed home from work, glued to their sets, and PBS got its highest ratings ever. The country and the world became chess-crazy. And Fischer-crazy. Chess sets, dusty on the shelves, suddenly sold in the millions.

We ordinary mortals can only try to imagine what it might feel like to be both young and so greatly gifted at a complex art. And to be better at it than any other living being, past or present. There are plenty of geniuses and lots of famous people, but few are both. Is anyone really capable of surviving such a double burden?

We assume that geniuses are blessed creatures who don’t have to work hard to achieve their goals. Hard for us, easy for them. But Bobby as a kid — IQ pushing 200 — put in 10 to 15 hours a day of brain power and heavy concentration that would kill an ordinary person. (Or at least me.)

The chess world was already well aware of this kid prodigy. But they were unprepared for him to suddenly go up against the acknowledged top player of the day in the United States Chess Championship. And win — at the age of thirteen. When asked what happened, he said, “I got better.”

What does such dedication to seemingly unreachable goals — until he reached them — do to the rest of you, the over-achiever? Touchingly, when he returned to my show after having disposed of Spassky, triumphant in the eyes of the world, he opined that he might be wise to try developing some of the rest of himself. He had begun to see that a life of nothing but chess was “kind of limited.” (He went to dinner in Reykjavik with friends. “Bobby couldn’t follow the conversation,” one said. “He sort of backed into the corner, got out his little pocket chess set and played with himself.”) He announced on my show that he was now “reading a lot of magazines, trying to keep up with what’s going on in the world.” He was still in his twenties.

Until the advent of Bobby Fischer, my image of a young chess genius was not flattering. I pictured a sort of wizened and unpopular youth, small of frame, reclusive, short, with messy hair, untended acne, thick glasses and shirt sticking out in back. And also perhaps, as the great V. Nabokov wrote in describing somewhat genderless piano prodigies with eye trouble, obscure ailments, “and something vaguely misshapen about their eunuchoid hindquarters.”

**********

Getting Fischer on my show that first time, before the big match, was considered a major catch at the time. If anyone in the audience shared my image of what a chess genius probably looked like, Bobby’s entrance erased it.

Here was no Nabokovian homunculus. There appeared, somewhat disconcerted, a tall and handsome lad with football-player shoulders, impeccably suited, a little awkward of carriage and unsure how to negotiate the unfamiliarity of the set, the bright lights, the wearing of make-up, the band music, the hand-shaking and the thundering ovation — all at the same time. I had hoped to avoid the cliché “gangling,” but Bobby gangled. He sort of lurched into his chair.

Once seated, he was something to behold. Six foot two (tall in those days), athletic in build, perfect in grooming, and with striking features. The face radiated intelligence. You couldn’t confuse him with anyone you’d ever seen.

And there were the eyes.

Cameras fail to convey the effect of his eyes when they were looking at you. A bit of Svengali perhaps, but vulnerable. And only the slightest hint of a sort of theatrical menace, the menace that so disconcerted his opponents.

Looking out over the audience, I could clearly see entranced women gazing at him as if willing to offer their hearts — and perhaps more — to the hunky chess master.

When I asked him about such matters, he said that the awful demands of his life — the global travel; the constant study, sometimes until dawn, followed by play; the punishing five-hour sessions at full concentration, day after day — all this made it “pretty hard to . . . [hesitates] . . . build up a relationship.” He seemed quite surprised with himself, as did friends watching, that he had allowed so revealing a moment. (That old Cavett magic, no doubt.)

One thing he said in that first appearance became famous. At one point I asked him what, in terms of thrills, the chess equivalent might be of, say, hitting a home run. His answer: “I like the moment when I break a man’s ego.” There was a trace of a chill in his laughter.

... I’ve sat for a while trying to figure out how to close. A faint glimmer of a bit of poetry had been swimming elusively in my head, just out of reach. And then it emerged.

It’s from E.E.Cummings’ famous poem about another lionized and legendary figure who, after triumph and glamour, also did not have “a good death”: Buffalo Bill.

With Cummings’ quirky punctuation, it’s a short poem, with no title but referred to by its first three words: “Buffalo Bill’s / defunct.”

Its closing lines somehow seem appropriate here. They are:

Jesus
he was a handsome man
and what I want to know is
how do you like your blue-eyed boy
Mister Death

From the comments:

... The finest thing about Bobby ...is that he made being smart, that is intellectualism, a cool thing. He was brilliant, knew it, was outwardly proud of it and not only could perform great feats with it but he said that he would and then did and did so far beyond the wildest dreams of anyone. So thank you Bobby and thank you Dick.

The truly great thing about Bobby Fischer was an audacious courage that for lack of a better comparison I mention Muhamid Ali and even though Bobby’s courage was on its own level there were similarities in the “not afraid of nothin” certainty with which they went about their business. Fischer’s march through the qualifying rounds of the world championship are simply unfathomable. Bobby the destroyer of ego was in full bloom and the completeness and ruthlessness was scary to watch even though I could not look away.

Even to people who play high level chess, the things he lay before the world were unbelieveable to see. It was watching that runup to the world championship that confirmed my inklings that a man could become mad in chess and accept it fully as more than reality and that here was such a man who not only possessed a fine and strong intellect but also the courage to throw it against or into the madness, the howling inferno that chess on that level can become. I was witnessing my own personal dark fear displayed on the largest stage and at a scale bigger than life in a man with one of the finest minds and the profound courage to risk it entirely. The outcome of the championship was certain to everyone by quarter finals.

Thank you so much Bobby and to borrow a few words to help express my love from Don McClane:

“but I could have told you Bobby, this world was never meant for one as beautiful as you”

Conrad Elledge

Tuesday, February 19, 2008

Humans bad at violence?

The Chronicle of Higher Ed interviews sociologist Randall Collins on his new book Violence: A Micro-Sociological Theory (Princeton University Press). I haven't read the book yet, but I find many of his points quite plausible. I always found the S.L.A. Marshall statistics (see below) that only about 25% of soldiers fire their guns in combat quite interesting -- believable, particularly for conscripts, but presumably correctable with training.

Collins notes that most people are generally quite reluctant to initiate violence. It's also true that very few people are competent (in a technical sense) at inflicting injury on others.

Violence, Up Close and Personal: A sociologist challenges prevailing theories of when, and why, people lash out

Randall Collins, a sociologist at the University of Pennsylvania, thinks human beings are bad at violence. Is the man mad? Any newspaper would seem to falsify his claim, offering up a bestiary of child killers, cross-tribal ethnic cleansers, and suicide bombers, not to mention military attacks sanctioned by law but still brutally sanguinary.

Collins, author of the new book Violence: A Micro-Sociological Theory (Princeton University Press), is not so naïve as to deny that the globe is drenched in blood. But he argues that to confront another human being and do him harm is far more psychologically difficult than most social scientists appreciate. "There is," he writes, "a palpable barrier to getting into a violent confrontation." And the resulting anxiety makes people lash out incompetently. Most people back down from fistfights after a bit of trash talking. And in war, more soldiers cower than attack the enemy effectively.

To make his case that we have no talent for violence, Collins adduces evidence ranging from the low casualty rates in most Greek and Roman battles to photographs documenting how few people in "violent" crowds on the West Bank are actually wreaking havoc. (Modern photojournalism has opened doors for this subfield of sociology, he argues.) He also includes his own voyeuristic accounts of confrontations on the streets of Philadelphia and other American cities, which tend to confirm that most showdowns peter out at the bluster stage.

In a discursive, 550-page book, Collins manages to fold into his theory such topics as domestic violence, British sports hooliganism, and the history of duels (a method of cabining violence to a scale where humans can stomach it). Along the way, he rips into some prevailing sociological theories, including the idea that much violence among disadvantaged groups amounts to a form of political "resistance." That theory, he suggests, has a "twisted quality," lauding thugs who are the violent exception and who prey mostly on members of their own low socioeconomic groups.

He also has few kind words for the reigning evolutionary-psychological interpretation of violence, which sees it as a holdover from a long prehistory in which men competed ruthlessly for status and mates. Collins does not reject biology but cites a different Darwinian drive: the human desire to form social bonds. A visceral aversion to throwing a punch, even if the recipient richly deserves it, he writes, "is the evolutionary price we pay for civilization."

The seed of the book, Collins says, lay in his 1975 book, Conflict Sociology, which examined the competition among various economic, ethnic, and cultural groups. "After having written that, I realized it was about conflict, all right, but nobody ever did anything to each other," he says. "There was no real fighting in it."

He's remedied the omission — and then some. Now he is so immersed in real violence that it will spill over into a sequel, which will encompass topics given short shrift in Violence: A Micro-Sociological Theory, including rape and decisions by states to go to war.

[Interview follows] ...

A lot of people would say that nature is red in tooth and claw and all that — that modern violence is a carry-over from the evolutionary past. What's wrong with that picture?

If you look at the history of fighting, you find that primitive people are actually not very good at fighting. We do have some anthropological films of tribes in wars, and it looks almost like a dance routine. You'll get 100 or so men of the tribe shouting and chanting and waving their spears and bows and arrows, and out of that group a few — six or eight — will run up toward the front line. One or two will dash across the line, throw a spear, then turn around and run and come back in. This may go on for a while until someone gets a spear — usually in the back — when they run away. Then they decide to stop.

Early in the book you put a lot of weight on the finding of the military historian S.L.A. Marshall that only something like 15 percent to 25 percent of American infantrymen fired their weapons in combat. Have his figures held up? And is that figure still true in current conflicts?

There's been controversy about that. At the time of the Second World War and the Korean War, some officers, typically higher officers, said they didn't believe [that figure] — it was just an insult to the troops. Other officers said they thought it was approximately right. It's generally thought now that Marshall was sort of giving a ballpark figure. Surveys from the Vietnam War show generally much higher figures if you ask them whether they ever fired their guns. If you ask them if they are doing a lot of firing, it starts looking more like Marshall's figures: Twenty to 25 percent are really gung ho and do lot of firing, and most of the others fire some of the time, but they aren't very enthusiastic about it.

You talk about panic firing during military combat, and firing among troops. And in an analogy you draw, you also find a lot of panicked firing and incompetent shooting among gang members, and only a few people taking part.

We've got sort of a sieve that goes down by two levels. The first level is whether people are actually engaged in the violence, whether it's shooting guns or throwing punches. Then there's the second level of how competent they are at it: whether they actually hit what they intended, whether they hit anything. … That's true in the case of cops and robbers — both sides — as well as in the Army. U.S. forces have been trained to try to overcome this nonfiring problem [by doing] a huge amount of firing, and so it's not too surprising that in that situation bystanders get hit.

... How is it ugly in one-on-one situations?

In one-to-one situations, it's usually not ugly so much as it is boring. There's a really strong tendency for people to jaw at each other, and then eventually the fight winds down because it becomes so repetitive. It's not difficult to keep fights from escalating as long as it's one on one. All you have to do is be really boring. They will keep on trying to escalate the fight, but you just stay at the same level.

Bore your opponent into submission. I think I could handle that.

You can actually see in videotapes people say the same thing over and over and over again, 10, 20 times. That's actually quite distinctive of conflict talk.

What if people are violent and want to be violent, but they also don't want to be hurt, so they need to get themselves pumped up or otherwise push themselves forward into violence? Couldn't that be another explanation for what you've observed?

We can actually take a fair amount of pain if it's not in a conflictual type of situation. People in disasters tend to behave quite heroically; people in medical situations who are under a lot of pain tend to behave surprisingly well. Soldiers are put through painful body-stressing exercises. But the same people seem to have trouble with the notion of actually hitting somebody else in a combat situation or even in a fistfight. It looks as though people have more trouble inflicting violence on other people than taking it.

New Yorker on behavioral economics

Elizabeth Kolbert reviews two recent books on behavioral economics. She even notes the negative consequences of "irrationality" for democracy.

NewYorker: ...Over the years, Tversky and Kahneman’s initial discoveries have been confirmed and extended in dozens of experiments. In one example, Ariely and a colleague asked students at M.I.T.’s Sloan School of Management to write the last two digits of their Social Security number at the top of a piece of paper. They then told the students to record, on the same paper, whether they would be willing to pay that many dollars for a fancy bottle of wine, a not-so-fancy bottle of wine, a book, or a box of chocolates. Finally, the students were told to write down the maximum figure they would be willing to spend for each item. Once they had finished, Ariely asked them whether they thought that their Social Security numbers had had any influence on their bids. The students dismissed this idea, but when Ariely tabulated the results he found that they were kidding themselves. The students whose Social Security number ended with the lowest figures—00 to 19—were the lowest bidders. For all the items combined, they were willing to offer, on average, sixty-seven dollars. The students in the second-lowest group—20 to 39—were somewhat more free-spending, offering, on average, a hundred and two dollars. The pattern continued up to the highest group—80 to 99—whose members were willing to spend an average of a hundred and ninety-eight dollars, or three times as much as those in the lowest group, for the same items.

This effect is called “anchoring,” and, as Ariely points out, it punches a pretty big hole in microeconomics. When you walk into Starbucks, the prices on the board are supposed to have been determined by the supply of, say, Double Chocolaty Frappuccinos, on the one hand, and the demand for them, on the other. But what if the numbers on the board are influencing your sense of what a Double Chocolaty Frappuccino is worth? In that case, price is not being determined by the interplay of supply and demand; price is, in a sense, determining itself.

...A few weeks ago, the Bureau of Economic Analysis released its figures for 2007. They showed that Americans had collectively amassed ten trillion one hundred and eighty-four billion dollars in disposable income and spent very nearly all of it—ten trillion one hundred and thirty-two billion dollars. This rate of spending was somewhat lower than the rate in 2006, when Americans spent all but thirty-nine billion dollars of their total disposable income.

According to standard economic theory, the U.S. savings rate also represents rational choice: Americans, having reviewed their options, have collectively resolved to spend virtually all the money that they have. According to behavioral economists, the low savings rate has a more immediate explanation: it proves—yet again—that people have trouble acting in their own best interests. It’s worth noting that Americans, even as they continue to spend, say that they should be putting more money away; one study of participants in 401(k) plans found that more than two-thirds believed their savings rate to be “too low.”

...Like neoclassical economics, much democratic theory rests on the assumption that people are rational. Here, too, empirical evidence suggests otherwise. Voters, it has been demonstrated, are influenced by factors ranging from how names are placed on a ballot to the jut of a politician’s jaw. A 2004 study of New York City primary-election results put the advantage of being listed first on the ballot for a local office at more than three per cent—enough of a boost to turn many races. (For statewide office, the advantage was around two per cent.) A 2005 study, conducted by psychologists at Princeton, showed that it was possible to predict the results of congressional contests by using photographs. Researchers presented subjects with fleeting images of candidates’ faces. Those candidates who, in the subjects’ opinion, looked more “competent” won about seventy per cent of the time.

When it comes to public-policy decisions, people exhibit curious—but, once again, predictable—biases. They value a service (say, upgrading fire equipment) more when it is described in isolation than when it is presented as part of a larger good (say, improving disaster preparedness). They are keen on tax “bonuses” but dislike tax “penalties,” even though the two are functionally equivalent. They are more inclined to favor a public policy when it is labelled the status quo. In assessing a policy’s benefits, they tend to ignore whole orders of magnitude. In an experiment demonstrating this last effect, sometimes called “scope insensitivity,” subjects were told that migrating birds were drowning in ponds of oil. They were then asked how much they would pay to prevent the deaths by erecting nets. To save two thousand birds, the subjects were willing to pay, on average, eighty dollars. To save twenty thousand birds, they were willing to pay only seventy-eight dollars, and to save two hundred thousand birds they were willing to pay eighty-eight dollars.

What is to be done with information like this? We can try to become more aware of the patterns governing our blunders, as “Predictably Irrational” urges. Or we can try to prod people toward more rational choices, as “Nudge” suggests. But if we really are wired to make certain kinds of mistakes, as Thaler and Sunstein and Ariely all argue, we will, it seems safe to predict, keep finding new ways to make them. (Ariely confesses that he recently bought a thirty-thousand-dollar car after reading an ad offering FREE oil changes for the next three years.)

Sunday, February 17, 2008

Les Grandes Ecoles

This Times article on the elite world of French business has some interesting facts about Ecole Polytechnique and Ecole Nationale d'Administration (ENA). In physics, we typically encounter graduates of Ecole Normale Superieure ("normaliens"), which boasts 9 Fields Medalists and at least 8 Nobel Laureates in physics. 15 years ago a normalien friend complained to me that the ENArques were getting the upper hand, but it appears from the article the polytechniciens are hanging tough! The greatest polytechnicien of all time might be Poincare, but then again there are also Cauchy and Ampere and Poisson and Navier...

An earlier post on Les Grandes Ecoles. I must say, these schools, with their strictly meritocratic admissions policies, sound a lot more like Caltech than like Harvard.

NYTimes: ...AT least half of France’s 40 largest companies are run by graduates of just two schools, the École Polytechnique, which trains the country’s top engineers, and ENA, the national school of administration. That’s especially remarkable given that the two schools together produce only about 600 graduates a year, compared with a graduating class of 1,700 at Harvard.

...Rather than a rigid class system, it was Mr. Fourtou’s and Mr. Bébéar’s admission into the École Polytechnique that assured their place in the elite. And that is one of the great ironies of the French establishment: while it enjoys the privileges associated with the elites of the United States, entry is, if anything, much more rigorously meritocratic, based on exams and ever-narrowing selection from an early age.

Indeed, getting into Harvard, which accepted 9 percent of its applicants last year, is a breeze compared with getting into the École Polytechnique.

Out of 130,000 students who focus on math and science in French high schools each year, roughly 15 percent do well enough on their exams to qualify for the two- to three-year preparation course required by the elite universities. Of those who make it through that, 5,000 apply to École Polytechnique, which is commonly called simply “X,” and just 400 are admitted from France.

Admission is based strictly on exam grades; there isn’t even an essay requirement or interview. And there are no legacy admissions, sports scholarships or other American-style shortcuts for getting into X.

“You can be the president’s nephew and it won’t help you get in,” says Bernard Oppetit, a 1978 graduate of X who later worked for BNP Paribas before starting Centaurus Capital, a London investment fund with $4 billion under management.

The École Polytechnique was founded in 1794, during the French Revolution, to train the country’s military engineers, and it officially remains under the umbrella of the French ministry of defense. Not only is the school free, but students also receive a stipend from the government to cover their expenses.

“We call it l’élitisme démocratique,” says Pierre Tapie, dean of Essec, a leading French business school. “These are places where you meet extraordinary people who are there because they worked hard and are among the most brilliant of a generation.”

Although the school teaches high-end fare like physics, engineering, and computer sciences, its broader goal is to create a leadership cadre that shares an ordered, prioritized view of the world, says Xavier Michel, the president of the École Polytechnique and an active-duty general in the French armed forces.

In France, this is known as the Cartesian system, after the mathematician and philosopher René Descartes, and Mr. Michel says the school encourages its students “to modelize” the world. And when they eventually become chief executives, he says, “they understand what are the capabilities of their companies. They understand what they can do and what they can’t do.”

Until, of course, models run off the rails — as they so often do in the business and financial worlds, regardless of what country devises them.

Tuesday, February 12, 2008

Housing bubble: dynamics of a bust





The first figure is from today's WSJ and incorporates data from Q4 2007. The second figure appeared in the Economist some time ago and was discussed previously on this blog. Does anyone care to predict the future for bubble states like California, Florida and Arizona using the Japanese data as a guide?

Lower interest rates will not re-inflate the housing bubble (although they may affect the rate at which it deflates; note the BOJ dropped real interest rates below zero in the wake of their bust). People understand now, as they did not just a few years ago, that home prices can go down. This change in ape psychology (try putting that in your macro model!) makes all the difference.

Below is historical data compiled by Yale economist Robert Shiller showing that home prices have not on average provided attractive real returns (right hand axis is inflation adjusted returns for same house sales over time; previously discussed here -- the real rate of return was 0.4% between 1890 and 2004). This is yet another example in which market participants (home buyers) made decisions based on faulty assumptions that might have been easily corrected by a modest amount of research. So much for efficient markets!



Here's some detailed data from Case-Shiller and OFHEO indices (also from WSJ; note OFHEO only tracks conforming mortgages so has less sensitivity to the high end of the market):



Finally, it is worth noting that the subprime mortgage meltdown is merely a symptom of the real estate bubble. If home prices continue to fall we will see (as we are already beginning to) higher default rates in so-called "prime" as well as subprime mortgages.

WSJ: ...I assumed, for the sake of calculations, that California prices fell 8% last quarter from the third quarter, a huge number by historic measures but not out of line with Zillow's data. For Florida and Arizona I assumed declines of 5% and 5.5%. You could use other, more modest estimates for the recent declines: They won't change the outcomes much. I also assumed personal incomes in these states rose in line with recent and historic averages."

The results? In all three markets, the prices are well off their peaks when compared to incomes. But they remain far above historic averages.

Median prices in California peaked in 2006 at 13.3 times per capita incomes. Hard to believe, but true. They may be down now to about 11.1 times.

But that's still way above the ground. Throughout most of the 80s and 90s they ranged between six and seven times incomes.

Just to get down to seven times incomes, prices would have to fall 37% tomorrow.

Those who bought at the peak of the cycle may be pinning their hopes instead on "incomes catching up" instead. But they had better be patient. Even if house prices stayed exactly where they are, it would take around 10 years for rising incomes to bring the ratios back into any sort of alignment.

Saturday, February 09, 2008

The exponential curve for genome sequencing

Below is an update on progress towards less expensive gene sequencing. At the moment you can have your genome sequenced for $350k, but we might hit the $1k mark within just a few years. This progress is funded by a combination of taxpayer and venture capital dollars. The rate of technological advance would slow to a snail's pace without sophisticated capital markets, intellectual property rights and plain old human greed and ambition.

For a cost per base pair curve extending up to 2005, see here. As the cost nears $1k per genome we will see a tremendous explosion in detailed genetic data across all major population groups.

NYTimes: A person wanting to know his or her complete genetic blueprint can already have it done — for $350,000.

But whether a personal genome readout becomes affordable to the rest of us could depend on efforts like the one taking place secretly in a nondescript Silicon Valley industrial park. There, Pacific Biosciences has been developing a DNA sequencing machine that within a few years might be able to unravel an individual’s entire genome in minutes, for less than $1,000. The company plans to make its first public presentation about the technology on Saturday.

Pacific Biosciences, or PacBio, is just one entrant in a heated race for the “$1,000 genome” — a gold rush of activity whose various contestants threaten to shake up the current $1-billion-a-year market for machines that sequence, or read, genomes. But the company has attracted some influential investors. And some outside experts say that if the technology works — still a big if — it would represent a significant advance.

“They’re the technology that’s going to really rip things apart in being that much better than anyone else,” predicted Elaine R. Mardis, the co-director of the genome center at Washington University in St. Louis.

If the cost of sequencing a human genome can drop to $1,000 or below, experts say it would start to become feasible to document people’s DNA makeup to tell what diseases they might be at risk for, or what medicines would work best for them. A DNA genome sequence might become part of each newborn’s medical work-up, while sequencing of cancer patients’ tumors might help doctors look for ways to attack them.

To spur such advances, the federal government has awarded about 35 grants totaling $56 million to companies and universities for development of technology that could put the $1,000 genome sequence within reach. PacBio has received $6.6 million from that program.

The nonprofit X Prize Foundation, meanwhile, is offering $10 million to the first group that can sequence 100 human genomes in 10 days, for $10,000 or less per genome. Six companies or academic groups — although not PacBio — have signed up for the competition so far.

Computerized sequencing machines use various techniques to determine the order of the chemical units in DNA, which are usually represented by the letters A, C, G and T. Humans have three billion such units, or six billion if one counts the second copy of each chromosome pair.

The industry has long been dominated by Applied Biosystems, which sold hundreds of its $300,000 sequencers to the publicly financed Human Genome Project and to Celera Genomics for their sequencing of the first two human genomes, which were announced in 2000. But two newcomers — Solexa and 454 Life Sciences — have already started to cut into Applied Biosystems’ sales with machines that are faster and less costly per unit of DNA sequenced. Solexa is now owned by Illumina and 454 Life Sciences by Roche.

Applied Biosystems, which is a unit of Applera, recently started selling its own new type of sequencer, which it obtained by buying Agencourt Personal Genomics for $120 million in 2006. Helicos BioSciences, a newly public company, announced its first order on Friday. It has said its machine might be able to sequence a human genome for $72,000, with further improvements to come.

“We can look somebody in the eye and say, ‘This instrument is going to get you to the $1,000 genome,’ ” said Steve Lombardi, the president of Helicos, which is based in Cambridge, Mass.

Intelligent Bio-Systems, a privately held company in Waltham, Mass., says it will introduce a machine by the end of the year that might reduce the cost of a genome to $10,000. Other contenders include the privately held companies NABsys of Providence, R.I., VisiGen Biotechnologies of Houston and Complete Genomics of Mountain View, Calif.

Some contestants say that they might try for the X Prize as early as next year and that the $1,000 genome is as little as three years away. But other experts are more conservative. ...

Wednesday, February 06, 2008

Money:Tech


O'Reilly Media, Feb. 6-7, NYC

So far I've met several participants who read this blog!

schedule

Monday, February 04, 2008

Books and IQ

Here's some research which correlates books with the IQs of their readers :-) Now you can check quantitatively whether you have highbrow or lowbrow taste! The method attempts to estimate the midpoint IQ of people who list a particular book as their favorite, using Facebook and university SAT data. It craps out at the really highbrow end, due to low statistics; see below.

Many of the books appearing at the center of the distribution are typically assigned as required reading (A Farewell to Arms, On the Road, A Tale of Two Cities, etc.), hence are likely to be mentioned by low-scoring students who don't read very many books. Their ranking here is probably deceptively low.

List of schools ranked by SAT (Caltech #1, of course), with links to 10 most frequent Facebook "favorite books" at that university. Click the image below for a bigger one.




Some notable results:

Harry Potter is the most popular book. The Bible is the second most popular book. At least among college students, Harry Potter is, like the Beatles, indeed bigger than Jesus. Harry Potter still wins even if you add "The Bible" and "The Holy Bible" together.

Although I had no idea at the beginning of this project, I was ever so pleased to discover that Caltech is the smartest school in the country (on average).

The smartest religious book is "The Book of Mormon". The dumbest religious book is "The Holy Bible". I'm sure this pleases the Mormons immensely.

The dumbest philosophy book is "The Five People You Meet In Heaven" and the smartest philosophy book is "Atlas Shrugged".

"Lolita" is the smartest book.

The top/bottom 20 books are remarkably stable. I tried 5 different weighting algorithms and their only variation was in the middle. The dumbest books were always at the bottom, and the smartest books were always on top. This is even further corroborated by the fact that the extremes change remarkably little with increasing m.

Do people with SAT >= 1400 just not read books? Yes, they do read books. Just look at those schools' facebook profiles! However, there often aren't enough schools with high SATs to have reliable statistics for these high-ringing books. So it goes.


Methodology:

Get a friend of yours to download, using Facebook, the ten most frequent "favorite books" at every college (manually -- as not to violate Facebook's ToS).

These ten books are indicative of the overall intellectual milieu of that college.

Download the average SAT/ACT score for students attending every college.

Presto! We have a correlation between books and dumbitude (smartitude too)!

Books <=> Colleges <=> Average SAT Scores

Plot the average SAT of each book, discarding books with too few samples to have a reliable average.

Post the results on your website, pondering what the Internet will think of it.

Yes, I'm aware correlation ≠ causation. The results are hilarity incarnate regardless of causality. You can stop sending me email about this distinction. Thanks.

The soldier-monks of Societe Generale

Vive les moines-soldats!
NYTimes: ...The derivatives group started in the 1980s as a small team of highly trained and highly regarded engineers and mathematicians from the best schools. They quickly became known as “les moines-soldats,” the soldier-monks. And as their importance inside the bank grew, their confidence, even arrogance, grew with it.

Like the devout and disciplined fighters they were named for — the monks who fought in the Crusades — the soldier-monks of Société Générale prided themselves on rising above the passions that moved the masses.

Similarly, Société Générale’s soldier-monks believed that they could manage both the risk inherent in betting on the markets — through complex computer models — and the ardor of their regular traders, through controls.

Their hubris was having too much faith in their power to do either.

But they were dedicated to making Société Générale a world-class power in derivatives and, like the knights of old, they were fiercely competitive, both on and off the trading floor.

“We considered it a mission,” recalled Antoine Paille, who recruited Jean-Pierre Mustier, now the head of Société Générale’s corporate and investment bank. It was Mr. Mustier who ultimately confronted Mr. Kerviel after his fraud was discovered on Jan. 18. ...


A Red Flag Cited

Mr. Kerviel was never viewed as soldier-monk material. He was a provincial from decidedly middle-class stock — the son of a hairdresser and a metal- shop teacher — but he possessed an advantage that his better-bred superiors did not.

In his five years toiling in the back office before being promoted to Delta One in 2005, he had become expertly familiar with the proprietary system Société Générale used to book trades, known as Eliot inside the bank. While the risk-control department did monitor the bank’s overall positions very closely, it did not verify the data Mr. Kerviel entered into Eliot. And Mr. Kerviel knew the timing of the nightly reconciliation of the day’s trades by Eliot, so he was able to expertly delete and then re-enter his unauthorized transactions without being caught.

Mr. Kerviel’s method of entering trades was one red flag cited by Eurex in its initial warning, along with questions about two “large” positions — one net short position in DAX futures and one net long position in Euro Stoxx 50 futures. In the same letter, they asked what his investment strategy was and why these transactions were often entered through a London-based Société Générale subsidiary called FIMAT Futures Limited. Eurex even inquired whether Mr. Kerviel had entered the transaction automatically or manually.

“Please explain the background for this procedure,” two Eurex officials wrote to Xavier de la Maisonneuve, a compliance officer at Société Générale who has been questioned by investigators.

Vincent Duclos, another compliance officer in the equity derivatives division, not yet questioned by the police, provided the Nov. 20 and Dec. 10 responses to Eurex. His replies in part were based on accounts provided by Mr. Kerviel and his supervisor, as well as a compliance officer at FIMAT, said Jean Veil, a lawyer for Société Générale. Mr. Kerviel’s “supervisor had signaled that there was no anomaly whatsoever,” Mr. Veil said.

Mr. De la Maisonneuve, who received the initial query on Nov. 7, said the bank gets 15 to 20 queries from different exchanges each year, many of them from Eurex.

In a telephone interview Monday night, he insisted his team had been in telephone contact with Eurex after their two letters in November to ensure it would fully answer their queries.

“Their questions were based purely on strategy and procedure,” he said. “At no moment of these conversations was there any mention of abnormal volumes. They considered our second written response adequate and satisfying.”

He added that Eurex did not take up Société Générale’s offer of a conference call to further discuss the matter after the Dec. 10 letter.

A top official at Société Générale, who insisted on anonymity because of the sensitivity of the matter, said that in the weeks after the Eurex warning, Mr. Kerviel was shaken, and took additional steps to cover his tracks. He tried to manipulate areas of the internal risk-control system he was unfamiliar with, which ultimately led to the discovery of his suspected fraud in mid-January.

In his testimony to the police, however, Mr. Kerviel identified two members of the Delta One team he said were familiar with his activities going back to last April. These colleagues, according to lawyers familiar with the case, were Martial Rouyère, head of the Delta One trading desk, and his deputy, Eric Cordelle. Mr. Rouyère has since been questioned by the French authorities. Mr. Veil said he expected Mr. Kerviel’s “entire hierarchy,” including Mr. Mustier, to eventually be questioned by the police. ...

Friday, February 01, 2008

Dating by algorithm

In this post NYTimes science reporter John Tierney, who writes the blog Tierny Lab, does a little experiment on the dating site eHarmony. eHarmony uses a complicated algorithm to match couples based on a lengthy personality questionnaire. Tierney seems surprised that the algorithm doesn't match him up with his wife, even when restricted geographically to his NYC zip code and even after further tweaking of their survey responses and consultation with eHarmony's chief scientist.

What Tierney doesn't seem to understand is that, under almost any algorithm for matching (including the "correct" algorithm that would predict happiness in his case), it is highly unlikely that the wife he found is actually optimal :-) Within a 10 mile radius (in NYC) there are dozens (hundreds? thousands?) of better matches he unfortunately never met. It's unromantic but true that chance played a bigger role in his marriage choice than optimality.

On a related note, I wonder whether social networking and online dating are gradually increasing the overall quality of marriages. It seems much easier to meet compatible partners than it was in the pre-Internet dark ages.

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