Sunday, July 24, 2016

Data Mining: I Can Know Everything About You

In the digital age just about everything is connected to the 'grid.' It's like a network of nodes and each node is connected. If all nodes are connected than you can transverse to any place that you'd like, assuming you have sufficient access. If for some reason you don't have direct access, odds are you can find a different route to obtain the same information. If you arrive at a node with multiple paths and must make a decision, you can probably pull 'periphery' information to increase the odds of arriving at your 'target'. 

So what does this all mean? This will be a short discussion about privacy and demonstrate how you have very little. Whether you care or not is really a subject of personal preference. If you're savvy enough, or have the desire to do so, you can also engage in counter-intelligence methods or institute defensive tactics. Such tactics may be as simple as browsing anonymously or restricting status updates or tweets. More sophisticated tactics would include creating multiple false identities or hiring a company to do so. In effect, this attempts to scramble information associated with your identity. At first glance this may seem like a viable tactic, but one must understand that your name or email address is only one associating factor. Your friends, family, or acquaintances can also serve to ID you by posting various types of information. Some people also think that not being associated with social networks or the internet world is sufficient to stay off the radar. Again, this is somewhat of a fallacy because your friends or people you know can populate information about you.

To summarize, privacy doesn't really exist in a modern economy if you choose to participate in the digital world. Using Google Maps, entering your phone number, checking in to a location, updating your social status, hell, even playing Pokemon GO, all reveal who you are and what you do. Often with unprecedented accuracy. As computing continues to evolve, including AI, it won't be long before very detailed dossiers on every person are produced. Maybe they already exist.

With all that said, is this a terrible thing? In the wrong hands it could be. If the rule of law breaks down or values are compromised such that this data is used to cause harm, then of course this is a terrible paradigm. Inevitably some of form of wrongdoing will creep in. Much of this data is currently used for marketing purposes. To sell you stuff, and figure out how to reach you. This can certainly be annoying, but probably not the end of the world. Where you really begin to have problems is when it's used to circumvent justice, identify people or groups for alternative treatment, or when it's used as propaganda to drive human behavior without their knowing. Today all of these functions are firmly in place, and people should be vigilant of misuse.

Tuesday, November 6, 2012

Election Results: Intrade, Polls, & Reality

If you're not familiar with Intrade, hop on over to their website and take a look around. Basically, it's a market where people can wager on the likelihood of an event occurring  Elections are always an interesting time because everyone has an opinion and the ability to predict such outcomes would be quite useful. The idea of using Intrade to gauge sentiment is rooted in the belief that people are more likely to work at getting something 'right' when they have skin in the game. It's similar to sports gambling, where the house has a very large incentive to get the odds right, while still offering an attractive payout to the gamblers. With Intrade the participants in the market bid on the likelihood of an event occurring  The bidding process moves the price between $0 and $10 where the probability is 10x the bid. So if the bid for an event is $6.85 that means the Intrade market believes that there is a 68.5% chance that the event will occur as defined. It can be argued that this creates a more authentic type of polling because there is a monetary incentive to get it right and the participants are generally more informed (about what will happen, not necessarily the issues). Of course, many of the perceptions are derived from polls so this may be a case of the dog just wagging the tail. With that said, two maps are shown below for the Intrade predictions and those for traditional polling. It is clear that there is a difference in perception, and this is where things get interesting. After the election results are in we can compare reality to the pre-election predictions. 

For the Intrade data I've chosen to use the electoral map for the night of November 5th 2012, which is posted below.
Figure 1: Intrade electoral prediction map captured 10:16 PST 11/5/2012.
The latest polls indicate the following distribution:

Figure 2: Poll map from the Huffington Post taken the morning of Election Day (11/6/2012 9:00AM PST) 
This post will be updated with a similar electoral map after the election and we'll all see how Intrade, traditional polls, and reality compare. Stay tuned...

Results (11/7/2012)

Okay, so the election results are in (see Figure 3).

Intrade was the best method of predicting the election outcome, so instead of watching the election results live in 2016, just check Intrade the night before, make a few bets with some 'friends' of the opposing party, and rake in a little dough... But while you're stacking your money pile high, just remember, you didn't build that, someone else did...

Figure 3: Presidential results for the 2012 election, very similar to the Intrade prediction from the night preceding the election.  The only discrepancy is Florida which leaned slightly to the left rather than the right...

Wednesday, October 24, 2012

Bitcoin: Concept & Currency

If you're reading this you've probably at least heard of Bitcoin, but you may not fully appreciate its depth and game-changing nature. The concept of Bitcoin is much more important than the actual currency. So what exactly is Bitcoin? The web definition is pretty general, but accurate:
Bitcoin: A decentralized digital currency created in 2009; A client for the aforementioned currency.
So what does that mean? Let's start by listing come common currencies: US Dollar, Euro, Japanese Yen, Swiss Franc, Canadian Dollar, Chinese Yuan, etc. All of these currencies are issued by central banks that are more or less controlled by governments. At the basic level a currency is a method of account. This is a very important concept to grasp. If you do work for someone they pay you a fixed amount of currency for your services or products. Currency is simply the medium of exchange that measures the value of real assets or services. In a nutshell, it's an accounting system.

What is a decentralized digital currency? It's an electronic currency (without a paper or metallic form) that isn't issued by a central authority (decentralized). Even that is quite ambiguous. You can think of it as an online accounting system that acts as a currency. A more thorough description can be found here: Generally, these new currencies are referred to as cryptocurrencies, which is derived from the underlying mechanism in which they're 'secured.'

Currently the market cap of Bitcoin is just over $100M and is expected to rise dramatically as technology and services are built around it. In the coming decade you will begin to hear more and more about said currencies as they begin to diffuse into the economy and disrupt the status quo.

Additional Information about Bitcoin can be found at a number of sources, but here's the short-list:

Wednesday, September 19, 2012

QE-Infinity: The Last Card in the Deck

Recently the Federal Reserve announced that they would begin a new cycle of Quantitative Easing (QE), which is just a fancy way of saying that they're going to print money. However, this time around there was no limit set on the total bond purchases. Instead it was dubbed 'open-ended' which is why the term 'infinity' is most appropriate [].

Following the Fed's announcement the Bank of Japan (BOJ) came out and said that they would also begin a similar bond buying program to essentially weaken the Yen and combat the Fed's program [].

Though this seems like 'business as usual' nowadays the open-ended nature of QE is very dangerous. It is tantamount to playing the last card and it will not provide real economic growth for anyone. Its only purpose is to provide an illusion of stability and buy a little bit more time. I encourage you to review some of the more popular posting on this blog to get a background on the drama that has been paying out for several years now. I'll also be updating this blog more often to provide alternative perspectives and information on what the actual State of the Union is.

Friday, January 6, 2012

Silver American Eagle Sales Go Parabolic

In the previous post the yearly mintage volume of American Eagle bullion coins was shown. Today, the 'sales value' is presented based on the average yearly price of silver and gold. The sales value of silver has always been much less than that of gold...until recently. There's been a significant acceleration in silver investment relative to gold that hasn't been seen since the inception of the American Eagle program in 1986. Whether the US mint can keep up with demand in 2012 remains to be seen, but the trend is nothing less than striking.

As of this writing (the first week of January 2012), there has already been 3.37 million ounces of silver American Eagle coins sold. If that rate were extrapolated to 52 weeks, it would amount to over 175 million ounces (over $5B worth of silver at $30/oz). Of course I don't expect that number to be achieved, nor could the US mint satisfy such demand, but it illustrates the unabated investment interest going into the New Year. Please keep in mind that this is only for US Mint issued American Eagle coins and does not include industrial or other Mint demand. Needless to say, something substantial is occurring in the physical market.

Figure 1: American Eagle sales value based on average yearly price of gold and silver. Not adjusted for inflation.