Google Chairman Eric Schmidt says Apple should have continued to use Google’s mapping application in iOS 6 instead of swapping it out for its poorly received home-brewed replacement, and given the sour reception Apple’s Maps app has been given, he may have been right.

But multiple sources familiar with Apple’s thinking say the company felt it had no choice but to replace Google Maps with its own, because of a disagreement over a key feature: Voice-guided turn-by-turn driving directions.

{ All Things D | Continue reading }

related { Ecce Homo }

{ Peter Turchin suggests, based on prior trends, that the US is in for a new period of political instability peaking around 2020. He finds that historically US instability has peaked about every fifty years. He also found this 50 years cycle in Roman and French history, but not in Chinese history. | Overcoming Bias | full story }

The wealthiest 10% have gotten rich mainly by getting the bottom 90% into debt. And labor (“consumers”) try to escape from their financial squeeze by going even deeper into debt, to buy homes and status before their access price rises even further out of reach. But what is pushing up real estate and other prices is easy bank credit – that is, debt. So the debt expansion calls for yet more debt to keep the financial system solvent.

This is not industrial capitalism as analyzed by the classical economists. It is something quite different. It is a regression to the ancient usury problem that destroyed Rome. […]

Richard Price, an actuarial mathematician, had warned n 1772, that all the government’s income would soon be spent on interest on its war debt. To explain the problem to the public, he chose the example of a penny invested at the time of Jesus Christ at five percent interest. At simple interest – just paying the five percent each year – the interest would amount to a total 7 shillings and 12 pence by his day. However, reinvesting this interest as it fell due would accrue an amount equal to a solid sphere of gold as large as 120 earths. And if this penny had been left to accrue and reinvest interest at six percent, it would have amounted in value to a solid sphere of gold extending from the sun’s orbit all the way out to Saturn.

{ Michael Hudson | Continue reading }

{ Behind every Google Map, there is a much more complex map that’s the key to your queries but hidden from your view. }

related { Apple Aggressively Recruiting Ex-Google Maps Staff To Build Out iOS Maps }

related { Apple once sued New York City (“the Big Apple”) over an apple-shaped logo. }

related { About 2,000 Chinese employees of an iPhone assembly company fought a pitched battle into the early hours of Monday, forcing the huge electronics plant where they work to be shut down. }

{ Look at all these iPhone 5s flooding FedEx’s distribution center }

The summer’s most talked about working paper in economics is by Robert Gordon, and it is simply titled “Is US Economic Growth Over?” […]

Gordon has been arguing since the days of the dotcom mania that the information revolution looks rather puny compared with earlier waves of innovation, such as the internal combustion engine, indoor plumbing, electrification and the telephone – all of which took hold from about 1850 to 1900. This claim was plausible then and it’s plausible now. (Would you rather give up the smartphone, Facebook and broadband – or hot running water and your flush toilet?) […]

Economic growth is a modern invention: 20th-century growth rates were far higher than those in the 19th century, and pre-1750 growth rates were almost imperceptible by modern standards. Many have seen this as an encouraging trend, but Gordon draws a different lesson: growth is a recent phenomenon, so why assume that it will last?

If Gordon is right to claim that modern inventions are less impressive than those of the late 19th century, we would expect to see slow growth in US real GDP per capita. And, indeed, growth has been slowing since the 1960s, even setting the current recession to one side. […]

Even assuming that climate change can be managed, there are limits to the rate at which we can burn fossil fuels, grow food and mine metals. Renewable energy sources are available, but less plentifully than we might hope. […]

We’ve lived with astonishing economic growth for 250 years; perhaps we are starting to take this exciting companion for granted.

{ FT | Continue reading }

images { 1. Nick Meek | 2 }

It seems as if stealing bikes shouldn’t be a lucrative form of criminal activity. Used bikes aren’t particularly liquid or in demand compared to other things one could steal (phones, electronics, drugs). And yet, bikes continue to get stolen so they must be generating sufficient income for thieves. What happens to these stolen bikes and how to they get turned into criminal income?

{ Priceonomics | Continue reading }

Sweden’s successful waste-to-energy program converts household waste into energy for heating and electricity. But they’ve run into an unusual problem: they simply aren’t generating enough trash to power the incinerators, so they’ve begun importing waste from European neighbors. […]

Sweden has recently begun to import about eight hundred thousand tons of trash from the rest of Europe per year to use in its power plants. The majority of the imported waste comes from neighboring Norway because it’s more expensive to burn the trash there and cheaper for the Norwegians to simply export their waste to Sweden.

In the arrangement, Norway pays Sweden to take the waste off their hands and Sweden also gets electricity and heat. But dioxins in the ashes of the waste byproduct are a serious environmental pollutant. Ostlund explained that there are also heavy metals captured within the ash that need to be landfilled. Those ashes are then exported to Norway.

{ PRI | Continue reading }

In 1922, Scientific American made two US$2,500 offers: (1), for the first authentic spirit photograph made under test conditions, and (2), for the first psychic to produce a “visible psychic manifestation.” […]

Since then, many individuals and groups have offered similar monetary awards for proof of the paranormal in an observed setting. These prizes have a combined value of over $1.69 million dollars.

As of August 2012, none of the prizes has been claimed.

{ Wikipedia | Continue reading }

Catching a frisbee is difficult. Doing so successfully requires the catcher to weigh a complex array of physical and atmospheric factors, among them wind speed and frisbee rotation. Were a physicist to write down frisbee-catching as an optimal control problem, they would need to understand and apply Newton’s Law of Gravity.

Yet despite this complexity, catching a frisbee is remarkably common. Casual empiricism reveals that it is not an activity only undertaken by those with a Doctorate in physics. It is a task that an average dog can master. Indeed some, such as border collies, are better at frisbee-catching than humans.

So what is the secret of the dog’s success? The answer, as in many other areas of complex decision-making, is simple. Or rather, it is to keep it simple. For studies have shown that the frisbee-catching dog follows the simplest of rules of thumb: run at a speed so that the angle of gaze to the frisbee remains roughly constant. Humans follow an identical rule of thumb.

Catching a crisis, like catching a frisbee, is difficult. Doing so requires the regulator to weigh a complex array of financial and psychological factors, among them innovation and risk appetite. Were an economist to write down crisis-catching as an optimal control problem, they would probably have to ask a physicist for help.

Yet despite this complexity, efforts to catch the crisis frisbee have continued to escalate. Casual empiricism reveals an ever-growing number of regulators, some with a Doctorate in physics. Ever-larger litters have not, however, obviously improved watchdogs’ frisbee-catching abilities. No regulator had the foresight to predict the financial crisis, although some have since exhibited supernatural powers of hindsight.

So what is the secret of the watchdogs’ failure? The answer is simple. Or rather, it is complexity. For what this paper explores is why the type of complex regulation developed over recent decades might not just be costly and cumbersome but sub-optimal for crisis control. In financial regulation, less may be more.

[…]

Modern finance is complex, perhaps too complex. Regulation of modern finance is complex, almost certainly too complex. That configuration spells trouble. As you do not fight fire with fire, you do not fight complexity with complexity. Because complexity generates uncertainty, not risk, it requires a regulatory response grounded in simplicity, not complexity.

Delivering that would require an about-turn from the regulatory community from the path followed for the better part of the past 50 years. If a once-in-a-lifetime crisis is not able to deliver that change, it is not clear what will. To ask today’s regulators to save us from tomorrow’s crisis using yesterday’s toolbox is to ask a border collie to catch a frisbee by first applying Newton’s Law of Gravity.

{ Federal Reserve Bank of Kansas City | PDF }

Although legalization would re-channel importation and sales and make addiction, overdoses and side effects a public health problem instead of strictly a law-enforcement concern, drug-related crimes would continue to exist, just as alcohol-related crimes continued to make headlines and fill jails after the repeal of Prohibition. […]

Nor would legalization magically resolve the economic issues that gave rise to the complex business of drug exportation and use, and it would have to occur in both Mexico and the United States to be effective. Restricting or controlling the financing of drug operations would not be possible without breaking up the distribution and investment chains that involve not only the two governments, but also entrepreneurs and legalized businesses. But it can hardly be denied that legalization is a necessary first step toward any decent, or even tolerable, outcome.

{ Arts & Opinions | Continue reading }

relation { Fake pot industry generating novel, untested drugs }

Mr. Arnuk is a professional stockbroker. But suddenly, and improbably, he has emerged as a leading critic of the very market in which he works. He and his business partner, Joseph C. Saluzzi, have become the voice of those plucky souls who try to swim with Wall Street’s sharks without getting devoured. […]

These two men are taking on one of the most powerful forces in finance today: high-frequency trading. H.F.T., as it’s known, is the biggest thing to hit Wall Street in years. On any given day, this lightning-quick, computer-driven form of trading accounts for upward of half of all of the business transacted on the nation’s stock markets. […]

Proponents of high-frequency trading call them embittered relics — quixotic, old-school stockbrokers without the skills to compete in sophisticated, modern markets. And, in a sense, those critics are right: they are throwbacks. Both men say they wish Wall Street could go back to a calmer, simpler time, all the way back to, say, 2004. […]

The two want to require H.F.T. firms to honor the prices they offer for a stock for at least 50 milliseconds — less than a wink of an eye, but eons in high-frequency time. […]

Mr. Arnuk then eyed the stock’s price on dozens of other trading platforms — private ones most people can’t see. Known as the dark pools, they help hedge funds and other big-money players trade in relative secrecy.

Everywhere, different prices kept flickering on the screens. Computers at high-speed trading firms, Mr. Arnuk said, were issuing buy and sell orders and then canceling them almost as fast, testing the market. It can be hell on human brokers. On the tape, the stock’s price was unchanged, but beneath the tape, things were changing all the time. […]

On the afternoon of May 6, 2010, shortly before 3 o’clock, the stock market plummeted. In just 15 minutes, the Dow tumbled 600 points — bringing its loss for the day to nearly 1,000. Then, just as fast, and just as inexplicably, it sprang back nearly 600 points, like a bungee jumper.

It was one of the most harrowing moments in Wall Street history. And for many people outside financial circles, it was the first clue as to just how much new technology was changing the nation’s financial markets. The flash crash, a federal report later concluded, “portrayed a market so fragmented and fragile that a single large trade could send stocks into a sudden spiral.” It turned out that a big mutual fund firm had sold an unusually large number of futures contracts, setting off a feedback loop among computers at H.F.T. firms that sent the market into a free fall. […]

Since the 2010 flash crash, mini flash crashes have occurred with surprising regularity in a wide range of individual stocks. Last spring, a computer glitch scuttled the initial public offering of one of the nation’s largest electronic exchanges, BATS, and computer problems at the Nasdaq stock market dogged the I.P.O. of Facebook.

And last month, Knight Capital, a brokerage firm at the center of the nation’s stock market for almost a decade, nearly collapsed after it ran up more than $400 million of losses in minutes, because of errant technology.

{ NY Times | Continue reading }

{ The pricing wars were fought last month over a General Electric microwave oven. Sellers on Amazon.com changed its price nine times in one day, with the price fluctuating between $744.46 and $871.49, | WSJ | full story }

Women with resources are slower to marry and remarry, and are more likely to cohabitate with a partner. Women are also more likely to purchase homes on their own, build female friendships, and engage in community-based work. As women increase their earnings and status, women are also more open to date outside their ethnicity.

{ Metapsychology | Continue reading }

If any product or investment sounds as if it has lots of upside, it also has lots of risk. If you can disprove this, there is a Nobel Prize waiting for you.

[…]

Legal documents are created to protect the preparer (and its firm), not you or yours: In the history of modern finance, no large legal document has worked against its drafters.

{ Barry Ritholtz | Continue reading }

The United States has slid into eight recessions in the last fifty years. Each time, the Federal Reserve sought to revive economic activity by reducing interest rates (see chart below). However, since the end of the last recession in June 2009, the economy has continued to sputter even though short-term rates have remained near zero. The weak recovery has led some commentators to suggest that the Fed should push short-term rates even lower—below zero—so that borrowers receive, and creditors pay, interest.

{ Federal Reserve Bank of New York | Continue reading }

photo { Valeria Vacca }

The first goal was to halve the proportion of the world’s population living on a dollar a day by 2015. […]

The target had actually been met in 2008, seven years ahead of schedule. This staggering achievement received no fanfare, perhaps because the miracle had not been created by Western governments but by the economic progress of China and India.

{ Telegraph | Continue reading }

photo { Christophe Agou }

In the fourth quarter of 2008, Nokia, which had long been the phone industry’s profit leader, sold 113 million devices worldwide, about 15 million of them smartphones. It made about $1.2 billion in profit on all those phones. That same quarter, Apple sold just 4 million iPhones. But that single device earned Apple a profit of $1.3 billion.

These numbers provide the backstory to an industry in panic. If you were a phone maker watching the iPhone’s sudden rise in 2008, you had to make a quick decision. […]

One option was to do nothing. A lot of firms opted for this path—Nokia and RIM, for instance, seem to have decided that the iPhone was a blip, a cultish device that would never reach mass appeal. […] Another option was to try to leapfrog Apple. […] This was Palm’s idea. […] Then there was a third choice. You could just copy Apple. […] On Friday, a federal jury decided that Samsung was guilty of doing just that.

{ PandoDaily | Continue reading }

The tendency for experiences to create more happiness than material possessions is one scientific finding that’s recently received a lot of attention. While most media coverage about the joy of experiences has focused on the abstract question of how to be happy, evidence is building that beliefs about materialism and happiness can also have concrete implications for a person’s day-to-day to life.

For example, two recent studies have found a connection between materialism and poor money management. This means that convincing people material possessions aren’t the key to happiness won’t simply help them spend their Christmas bonus more wisely, it may also lead to better overall financial management.

{ peer-reviewed by my neurons | Continue reading }

photo { Matthew Reamer }