Monday, September 15, 2014



Just what.

The world is insane.

  • Bay Area police departments got millions in military surplus, records show
    Asked why Antioch police needed a mine-resistant personnel carrier weighing more than 30,000 pounds, Antioch police Captain Leonard Orman said the vehicle was critical to the department's ability to protect officers during a natural disaster or in incidents that require a SWAT team.

    "It's a defensive vehicle that provides the ability to be protected from gunfire, including high-powered rifles," Orman said. "If someone is barricaded in a home and there is an injured person on the ground, we can use it to rescue the person without exposing ourselves to fire."


    UC Berkeley's police department used the 1033 program to request about a dozen M-16 rifles, which it said would give officers firepower equal to that held by some of the criminals they encounter, said Lt. Eric Tejada, a department spokesman.

    "We feel that those specialists need to have a rifle that's capable of dealing with some incidents that can involve the modern-day weapons that you see now," Tejada said. "It's smart for us to utilize the resources that you can get for free."

  • Davis acquires mine-resistant war vehicle while some complain of militarization of police
    Chief Landy Black of the Davis police defended the acquisition of the MRAP, saying in a statement that its heavy armor “makes it the perfect platform to perform rescues of victims and potential victims during … active-shooter incidents, and to more safely deliver officers into an active-shooter incident.”


    “I can’t imagine why Davis needs a tank,” Davis Mayor Dan Wolk said Wednesday. “It’s in a city garage and I hope it stays there.”

  • Dozens of police departments suspended for losing US military-grade weaponry
    According to the media outlet Fusion, its independent investigation into the Pentagon’s “1033 program,” which equips state and local police departments across the US with excess military equipment, turned up an alarming trend: Not only did many law enforcement agencies fail to comply with the program’s guidelines, they routinely lost dangerous weaponry.

    Already, the investigation has found that police departments in Arizona, California, Mississippi, Missouri, Georgia, and others have lost or cannot account for various types of weapons. This list includes M14 and M16 assault rifles, .45-caliber pistols, shotguns, and even vehicles.

  • The Pentagon Is Giving Grenade Launchers To Campus Police
    David Perry, the president of the International Association of Campus Law Enforcement Administrators, told Politico that 1033 mostly funnels “small items” to college police forces for daily use. These could be anything from office supplies or uniforms or car parts, but it’s probably not all that tame. Campus Safety magazine recommends that universities take part in the 1033 program to cover a range of needs from storage units to grenade launchers. That is, after all, what the program was designed to achieve.
  • Finding Funds for Your Equipment, Programs and People (Part 2 of 2)
    Military surplus and contractors via the 1033 program, however, can be excellent sources of used equipment.

    The 1033 program (formerly the 1208 program) permits the secretary of defense to transfer excess U.S. Department of Defense personal property (supplies and equipment) to state and local law enforcement agencies. Anything from used grenade launchers (for the deployment of less lethal weapons) to trucks to boats to storage units may be available for a significantly reduced cost.

  • Ferguson aftermath: California city tells cops to get rid of armored vehicle
    Davis Police Chief Landry Black made the case for keeping the MRAP, saying the police department had confiscated much high-power weaponry in the last year. He said there were specific guidelines for its use, and that it is a necessary piece of safety equipment for the city.
  • Police Armored Vehicle Is Unwelcome in California College Town
    Sheriff Brown of Santa Barbara County said there had been “a lot of misunderstanding about the program — in some quarters, even hysteria.”

    “The reality is that this is a great program,” he said. “It provides law enforcement with a lot of very valuable equipment that in many instances — in fact, most instances — could not be obtained or afforded, and allows us to do a better job of protecting our citizens and our own public safety personnel.”

  • Commentary: A militarized police force may see its citizens as the ‘enemy’
    Even college security forces are getting their share: A sidebar noted that nine out of 10 universities employ armed officers authorized to use deadly force.

    And in 2013, “the campus police at The Ohio State University procured a Mine-Resistant Ambush-Protected vehicle (MRAP), according to the Daily Caller website. The vehicle, which school officials noted was ‘acquired at no cost from military surplus,’ has a gun turret on the roof and is designed to stave off ambushes and roll over improvised explosive devices. OSU was also the first agency in the state to acquire an MRAP at the time.

"Campus Safety Magazine"? There is such a thing?

My head hurts. I am sad.

Saturday, September 13, 2014

Trinity: a very short review

Leon Uris's Trinity is generally considered to be one of the author's best works. For thematic reasons, it was one of my vacation readings.

Trinity is 900 pages long. The first 600 pages are superb, and just flew by. This is the portion of the book which covers the period, roughly, from the Great Famine through the Industrial Revolution, say, late 1830's through late 1880's. The characters were compelling, the storytelling was both exciting and colorful, and the book managed to be somehow intimate and sweepingly epic at once.

The genius of this part of this book is the way that Uris helps you understand why people behave the way they do, not by explaining it to you, but by showing you how it happens. People don't just wake up one day and do something dreadful to each other, it happens over a period of time, through untold zillions of tiny step by step actions and individual decisions, each of which seems simple and obvious and inevitable but they all add up.

The last 300 pages, covering roughly the first quarter of the 20th century, just didn't work for me.

Wednesday, September 10, 2014

A slimy subject

One of the things we noticed on our trip to Ireland was that, every time we explored the actual coastline (beaches, rocky cliffs, fishing piers, etc.), there were a surprising number of jellyfish.

I mean, a really surprising number.

Somebody mentioned that maybe this was actually a known and studied phenomenon, so I went searching.

Anyway, once you start reading this article in The New York Review Of Books you won't stop thinking about it: They’re Taking Over! .

Our changing climate is also having many impacts on jellyfish. As the oceans warm, the tropical box jellyfish and the Irukandjis are likely to extend their ranges, while other species will benefit from the lowered oxygen levels that warmer waters contain. Remarkably, jellyfish may have the capacity to accelerate climate change. This can happen in two ways. Jellyfish release carbon-rich feces and mucus (poo and goo) that bacteria prefer to use for respiration. As Gershwin puts it, “jellyfish blooms turn these bacteria into carbon dioxide factories.” But jellyfish also consume vast numbers of copepods and other plankton. These creatures migrate vertically through the water column, taking in carbon-rich food at the surface and releasing it as fecal pellets, which fall to the sea floor and are buried. The plankton are thus a major means of taking carbon dioxide out of the atmosphere and oceans. If their loss occurs on a large enough scale, it will hasten climate change.

Perhaps we will soon be seeing bumper stickers: "Save the plankton, eat a jellyfish!"

Tuesday, September 9, 2014

What if? A very short review

As everyone knows, I am one of the biggest Randall Munroe superfans on the planet.

Thus my expectations for What If?: Serious Scientific Answers to Absurd Hypothetical Questions were sky-high.

I am not disappointed!

Monday, September 8, 2014

California's climate casualties

Yowza, it's getting ugly:

When I was up high, high, high in the Sierra Nevada mountains at the end of July, one thing was clear: there is no water in the mountains.

Something's gotta give, and it's gotta start happening soon.

Where are our politicians? Our civic leaders? Our community/religious/commercial leaders?

Hello? Shouldn't we all be talking about this?

Donald MacKenzie on High Frequency Trading

A bit of my weekend reading was this nice short piece by Donald MacKenzie in the London Review of Books: Be grateful for drizzle.

MacKenzie takes a level-headed and clear-eyed look at the phenomenon of High Frequency Trading as it stands in the summer of 2014.

One interesting topic that he covers involves the difference between programs which play the role of market-makers, and programs which play the role of traders.

Market-makers are beasts of burden in the market: their job is to match up interested buyers with interested sellers, charging a price for this service made up of the spread between the purchase price and the sale price and the rebate awarded them by the host exchange:

If a market-making program is trading Apple shares, for example, it will continually post competitively priced bids to buy Apple shares and offers to sell them at a marginally higher price. The goal of market-making is to earn ‘the spread’, in other words the difference between those two prices – in Apple’s case, a few cents; in many other cases, a single cent – together with the small payments (around 0.3 cents per share traded) known as ‘rebates’ that exchanges make to those who post orders that other traders execute against.

Adam Smith's "invisible hand" works well here: if the market-maker's spread is too large, others will offer a lower spread and will take business away from the weaker program; this competition drives the market-making programs to be efficient and to offer the smallest possible spread, which benefits all participants in the market.

Traders, on the other hand, are opportunists, attempting either to buy low and sell high, or to sell high and buy low; in either case, the trading program attempts to identify the direction that a stock price is moving and front-run it. These traders don't really care whether the stock prices is moving up or down; they just care whether they can reliably detect that movement before any other trader can, thus being able to profit from it:

you have to pay the exchange a fee, rather than earning a rebate, and, if prices don’t move, your program can end up simply ‘paying the spread’ to market-making programs, because it will have to sell more cheaply than it buys. However, if an HFT program can identify a trading opportunity larger than the ‘spread’ (a high probability that, for example, the price of the shares being traded is going to rise or fall by several cents), then it may well need to act immediately and aggressively, before other programs do.

Trading programs don't benefit any market participants other than themselves, which is why they've earned considerable ire.

However, it's not clear that they are intrinsically evil; they are just feeding off of inefficiencies elsewhere in the system. MacKenzie discusses, in detail, one such inefficiency, told in Michael Lewes's Flash Boys, involving the way in which a large bank decides to execute an extremely large order for one of its pension fund customers; the bank's poor handling of the order results in a tidy opportunity for these aggressive trading programs.

And as MacKenzie notes, behind all these high-tech maneuvers are the hard-earned savings of ordinary people like you and me:

Behind orders from banks’ institutional investor customers are people’s savings and pension funds. Flash Boys has been widely read as a morality play, a story of evil-doing high-frequency traders. But it can just as easily be read as an account of banks that either wouldn’t, or didn’t know how to, take best care of their own or their customers’ orders. To their credit, the Royal Bank of Canada team took action once they saw the disadvantage they were labouring under. I am assured by a source that other banks have done things to reduce the problem, for example moving their smart order routers from Manhattan into the data centres in New Jersey. All things considered, I suspect that what drains most money from pension funds and other savings are the high fees charged by those who manage them, and the excessive trading they often engage in, not high-frequency trading or even the incompetent handling of orders.

Over the years, as I've learned, in bits and pieces and dribs and drabs, about the activity of High Frequency Trading, I've come to roughly the same conclusion as MacKenzie appears to have arrived at:

  • Automated market-making is not only not evil, it's actually been quite beneficial. Spreads have dropped, liquidity is generally quite high, individual investors like myself have access to very open and fair markets, and computers are actually very good, and very very efficient, at doing the automated market-making and book-keeping necessary for all this to occur.
  • Aggressive traders, who think they can predict market movements, or at least detect and respond to them faster than others do, can be quite annoying, but there's really no evidence that they are a problem worth wasting much energy over.
  • Poor oversight, transparency, and regulation of retirement funds, on the other hand, is the source of much waste if not outright corruption.

When a bank's inefficient trading desk causes a large order submitted by a state government's public employee retirement fund to be mis-handled, resulting in a bad execution, no money is strictly speaking 'lost'; however, a certain amount of money is effectively transferred from the retirement fund to those trading programs which took advantage of that poor execution.

And that means that those trading firms took money from you and I, since in the end that public employee retirement fund is funded by the taxes that we pay that are used to pay the salaries of those policemen and firefighters and teachers and contribute to their retirement savings.

My personal bug-a-boo in this area involves 401K fund selection. Individual employees like myself are at the mercy of what is provided by my company's retirement plan, which in turn is at the mercy of what the "financial services" industry is willing to provide. And, naturally, most of that industry wants to provide high-fee, poorly-run funds which take my hard-earned savings and send a depressingly large amount of it to the plan servicing company's executives.

But as MacKenzie points out, it's important to keep your eye on the overall picture here:

The right question to ask about high-frequency trading is not just whether high-frequency traders are good or bad, or whether they add liquidity to the markets or increase volatility in them, but whether the entire financial system of which they are part is doing what we want it to do. Of course, we want it to do several things, but I’d say that high on the list should be putting people’s savings to the socially most productive uses, while preventing too much of those savings being wasted along the way.

Speaking a couple of years ago to Bloomberg Businessweek about the new, faster cables, such as those planned by Hibernia, Manoj Narang, founder of the HFT firm Tradeworx, commented: ‘Nobody’s making extra money because of them: they’re a net expense … All they’ve done is impose a gigantic tax on the industry and catalyse a new arms race.’ The chief economic characteristic of an arms race is that all the participants have to spend more money, and none of them ends up any better off because of it.

The world financial system is capable of great wonders, but also capable of great devastation (witness 2008, after all).

Somewhere in there is the possibility of a system whose power is harnessed, but whose threat is contained.

And the road to that hopeful future lies in the work of clear-thinking writers like MacKenzie, who take the time to study the details and understand them and explain them to people like me so we can think about them.

So if this is a topic that interests you, I recommend you read MacKenzie's article in full.

Sunday, September 7, 2014

Fabiano Caruana at Sinquefield 2014

The chess world is abuzz with the extraordinary performance of Fabiano Caruana at this year's Sinquefield Cup:

  • On Chess: St. Louis Witnessing Chess History-As-It-Happens At Sinquefield Cup
    The 2014 Sinquefield Cup, the global super-tournament now in progress in the Central West End, had already been prepared to leave its mark in time. Headlined by reigning World Chess Champion GM Magnus Carlsen, along with five other of the world’s top-10 International Grandmasters, the event was set to become a part of chess lore even before its first move: The six-player field is the strongest-rated ever, averaging a 2802 strength never seen in the game’s 1,500-year history.
  • Caruana Demolishes Topalov, Increases Lead Again
    Caruana began his second time around the field, but so far it's looking the same as the first. A mere 31 moves and barely three hours was all it took to take out GM Veselin Topalov in round six.
  • Grande! Mostruoso! Fabiano Caruana is at 7,0/7 at Sinquefield Cup
    Day after day the Italian-American superstar Fabiano Caruana is making history. Fabulos Fabiano aka Fabi is now at 7,0/7 in the strongest ever chess tournament, the Sinquefield Cup, breaking every expectation, shattering even the bravest predictions.

    With his victory in round 6 he surpassed the 5,0/5 start of Ivanchuk at Mtel Masters 08, with the victory today another achievement remains behind – the 6,0/6 of Karpov in Linares 1994. The modern times of chess have a new king, king Fabiano Caruana. One has to look back to 1968 where in Wijk Aan Zee the legendary Korchnoi started with 8,0/8. The times now are so different and the competition so fierce that already Fabiano’s success can be proclaimed as the most memorable streak in the history of chess.

  • Sinquefield Cup Round 8: The Streak Ends, But Caruana Clinches Tournament Victory With Two Rounds To Spare
    In today's game he was close to a win against Carlsen, but 26. 0-0 let the foot off the gas and Carlsen scraped his way to a drawish ending, one which Caruana didn't seem too intent to try to win. From the perspective of tournament victory, a draw was sufficient, and for all his strength and ambition even Carlsen cannot hope to make up a three point deficit in the two remaining rounds.
  • Undefeated Caruana Wins Sinquefield Cup by Three Points
    Fabiano Caruana finished the 2014 Sinquefield Cup with a solid draw against Levon Aronian to end the highest-rated tournament in history with a magnificent 8.5/10 -- three points ahead of his nearest follower, the World Champion GM Magnus Carlsen.
  • Fabiano Caruana wins Sinquefield Cup with stunning performance
    There are only two historic precedents for such a runaway start in an elite event. Long ago at Avro 1938 Reuben Fine began with 5.5/6 against a sextet who included four world champions РJos̩ Capablanca, Alexander Alekhine, Max Euwe and Mikhail Botvinnik. And at Linares 1994 Anatoly Karpov began 6-0 before drawing in round seven with Garry Kasparov. Karpov finished with 11/13 in what was widely considered the best tournament performance of all time.