Capitalism 2.0

Do we need yet another new math?

This topic is a bit off-topic for this blog, but it struck me as an area which should interest many of our readers:  High-School Mathematics.  There is no shortage of criticisms and complaints about the deteriorating state of mathematics preparation for US high-school students.  Rodney Brooks has recently written an essay suggesting the need for a new mathematics "that is so revolutionary and elegantly simple that it will appear in high-school curricula."    He claims that understanding biological systems "demands it."  (Thanks to Terra Nova and Nate Combs where I first picked this up).

Our community here is primarily composed of business practitioners -- as opposed to academics -- so I thought we might approach this issue from a bit of a different angle.  We are likely mostly concerned about the "lowering of the bar" that has been occurring vis-á-vis math thinking skills.  Skills which are of critical importance to economics, finance, computer science and related professional success. 

More macro evidence of hard landing for US home prices

The US edition of the weekend Financial Times ran the following front-page headline:  Plunge in sales of new homes stokes fear of a hard landing.  The on-line edition headlines Signs of slowdown in US housing.  Sales of new US homes plunged 10.5 per cent last month, prices fell and the stock of unsold homes hit its highest level in 10 years, providing the clearest indications yet that the red-hot housing market may be cooling.

A big slowdown could prompt consumers to cut spending and boost savings. Such a shift could help reduce the current account deficit but at the cost of significantly slower growth.

On Corporate Earnings Forecasts

From the March 13, 2006 Financial Times:  ”Opposition grows to earnings forecasts”.  With Pfizer joining a growing group of heavyweight companies opting to eschew the practice of providing earnings guidance, a consensus is forming among chief executives, analysts and regulators against the practice.

Genetic Algorithms and Portfolio Optimizers

An interesting application of genetic algorithms (GA) and neural networks came up in a previous discussion relating to portfolio optimizations.  Of course, the classic portfolio optimization problem is primarily a linear system based on maximizing the sharpe ratio, which essentially relies upon measures of mean CAPM return and standard deviation.

Newer techniques like the Black Litterman  model also involve quite a bit of linear programming, but also inject a degree of heuristic judgement.  The question is, could GAs be applied to such optimization problems to produce a more flexible, self adaptive model?

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Persistent Blogs for MLS Properties?

An idea I was baking a few months ago was to aggregate publicly available MLS data, starting with a tight regional focus, being careful not to violate copyrights (but admittedly pushing the limit).  The thing that would be different would be to create a UUID for each property, and cross-reference additional data.  I suspended my designs for a while for conflict of interest reasons, and also because Zillow.com and others have come on-line recently.

But something is still missing, in my opinion.  Persistent "blogs", or more specifically a way for the community of buyers to aggregate their direct knowledge about properties.  Kind of a buyers' exchange, but tied directly into a portal that would be driven by properties actually on the market (thus, the MLS tie in).  As the prospect of an Open MLS has increased, I think this idea may still have some merit.

Is Silicon Valley Doomed?

There is no shortage of pundits proclaiming the death of Silicon Valley and the greater San Francisco Bay Area (BA).  Certainly, this metropolitan region has enjoyed tremendous economic growth over the past 2-3 decades.  But, given today's anemic job growth, ever consolidating software companies and inevitable loss of jobs, global info-worker wage competition, and of course those ever annoying BA real-estate prices, is there any hope of a real recovery this time?

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