Big Data, data science, dynamics of social media, Fed tapering, Quantitative Easing (QE)
Links January 16, 2014
January 16, 2014 Clive Jones	Leave a comment
Central Station: January Fed Taper on Track
Federal Reserve officials, including a strong supporter of their easy money policies, have so far brushed off the weak employment report as a blip in an otherwise strengthening economic recovery. This suggests they are likely to stick to their plan to gradually wind down their bond-buying program this year as the recovery picks up momentum…
"True, the December jobs report was disappointing," said Chicago Fed President Charles Evans, who has been a champion of aggressive central bank efforts to spur stronger economic growth. But, he added, "the recent data on economic activity generally have been encouraging" and "importantly, the labor market has improved."
He said the tentative plan to reduce the monthly bond buys in $10 billion increments "seems quite reasonable" and "it makes sense to continue that in January.
Atlanta Fed President Dennis Lockhart, a centrist on Fed policies, said Monday the December employment report hadn't shaken his expectation that the central bank would stick to the taper plan.
Meanwhile two opponents of the bond-buying program, Dallas Fed President Richard Fisher and Philadelphia Fed President Charles Plosser indicated in separate speeches Tuesday they were all for winding it down.
Given that chorus, it appears probable Fed officials will trim their monthly bond purchases to $65 billion from $75 billion at their next policy meeting January 28-29 meeting. Now that tapering is under way, the bar for stopping the process seems quite high.
Big Data systems are making a difference in the fight against cancer Open source, distributed computing tools speedup an important processing pipeline for genomics data
Big Data to increase e-tailer profits
As tablet and smartphone usage becomes more widespread, shopping online has become quicker and easier and the speed of delivery has become critical in the online fulfilment race.
The group of researchers, which includes Arne Strauss, Assistant Professor of Operational Research at Warwick Business School, propose an analytic approach that will predict when people want their shopping delivered depending on what delivery prices (or incentives such as discounts or loyalty points) are being quoted for different delivery time slots.
It takes into account accepted orders to date as well as orders that are still expected to come in….
The new approach was tested using real shopping data from a major e-grocer in the UK over a period of six months and generated a four per cent increase in profits on average in a simulation study, outperforming traditional delivery pricing policies.
Big Data and Data Science Books – A Baker's Dozen – from Analytic Bridge
Big Data: A Revolution That Will Transform How We Live, Work, and T…, by Viktor Mayer-Schonberger and Kenneth Cukier
The Signal and the Noise: Why So Many Predictions Fail-but Some Don't, by Nate Silver
Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie…, by Eric Siegel
The Human Face of Big Data, by Rick Smolan and Jennifer Erwitt
Data Science for Business: What you need to know about data mining …, by Foster Provost and Tom Fawcett
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb
Competing on Analytics: The New Science of Winning, by Thomas H. Davenport and Jeanne G. Harris
Super Crunchers: Why Thinking-by-Numbers is the New Way to Be Smart, by Ian Ayres
Big Data Marketing: Engage Your Customers More Effectively and Driv…, by Lisa Arthur
Journeys to Data Mining: Experiences from 15 Renowned Researchers, by Mohamed Medhat Gaber (editor)
The Fourth Paradigm: Data-Intensive Scientific Discovery, by T.Hey, S.Tansley, and K.Tolle (editors)
Seven Databases in Seven Weeks: A Guide to Modern Databases and the…, by Eric Redmond and Jim Wilson
Data Mining And Predictive Analysis: Intelligence Gathering And Cri…, by Colleen McCue
The History and Evolution of Social Media an Infographic (click to enlarge)
If you like this, there are many more infographics focusing on social media at https://www.pinterest.com/JuanCMejiaLlano/social-media-ingles/ – some in Spanish. Also check out Top 10 Infographics of 2013 [Daily Infographic].
Economics: Science, Craft, or Snake Oil? – nice, but sort of equivocating essay by Dani Rodrik from his new offices at the Princeton Institute for Advanced Studies. Answer – all of the above.
Origin and Importance of the Salesman in US – A piece of US business history and culture. I like this.
global business forecasts, income and wealth factors, macroeconomic forecasting
Links – January 11, 2014
Sober Looks at the US Economy and Social Setup
Joseph Stiglitz is calling the post-2008 "recovery" period The Great Malise –
Yes, we avoided a Great Depression II, but only to emerge into a Great Malaise, with barely increasing incomes for a large proportion of citizens in advanced economies. We can expect more of the same in 2014. In the United States, median incomes have continued their seemingly relentless decline; for male workers, income has fallen to levels below those attained more than 40 years ago. Europe's double-dip recession ended in 2013, but no one can responsibly claim that recovery has followed. More than 50% of young people in Spain and Greece remain unemployed.…Europe's continuing stagnation is bad enough; but there is still a significant risk of another crisis in yet another eurozone country, if not next year, in the not-too-distant future. Matters are only slightly better in the US, where a growing economic divide – with more inequality than in any other advanced country – has been accompanied by severe political polarization. …growth will remain anemic, barely strong enough to generate jobs for new entrants into the labor force. A dynamic tax-avoiding Silicon Valley and a thriving hydrocarbon sector are not enough to offset austerity's weight. Thus, while there may be some reduction of the Federal Reserve's purchases of long-term assets (so-called quantitative easing, or QE), a move away from rock-bottom interest rates is not expected until 2015 at the earliest…China's decelerating growth had a significant impact on commodity prices, and thus on commodity exporters around the world. But China's slowdown needs to be put in perspective: even its lower growth rate is the envy of the rest of the world, and its move toward more sustainable growth, even if at a somewhat lower level, will serve it – and the world – well in the long run. As in previous years, the fundamental problem haunting the global economy in 2013 remained a lack of global aggregate demand. This does not mean, of course, that there is an absence of real needs – for infrastructure, to take one example, or, more broadly, for retrofitting economies everywhere in response to the challenges of climate change. But the global private financial system seems incapable of recycling the world's surpluses to meet these needs. And prevailing ideology prevents us from thinking about alternative arrangements…Maybe the global economy will perform a little better in 2014 than it did in 2013, or maybe not. Seen in the broader context of the continuing Great Malaise, both years will come to be regarded as a time of wasted opportunities.
On the 50th Anniversary of the War on Poverty, The Atlantic Monthly ran a first-rate article Poverty vs. Democracy in America. Full of pithy quotes and info, such as this about the emergence of an impoverished underclass –
50 million strong—whose ranks have swelled since the Great Recession to the highest rate and number below the poverty line in nearly 50 years. Nearly half of them—20.5 million people, including each of the people mentioned above—are living in deep poverty on less than $12,000 per year for a family of four, the highest rate since record-keeping began in 1975. Add to that the hundred million citizens who are struggling to stay a few paychecks above the poverty line, and fully half the U.S. population is either poor or "near poor," according to the Census Bureau.
Economically speaking, their poverty entails a lack of decent-paying jobs and government supports to sustain a healthy life. With half of American jobs paying less than $33,000 per year and a quarter paying poverty-line wages of $22,000 or less, even as financial markets soar, people in the bottom fifth of the income distribution now command the smallest share of income—3.3 percent—since the government started tracking income breakdowns in the 1960s. Middle-wage jobs lost during the Great Recession are largely being replaced by low-wage jobs—when they are replaced at all—contributing to an 11 percent decline in real income for poor families since 1979. For the 27 million adults who are unemployed or underemployed and the 48 million people in working poor families who rely on some form of public support, means-tested government programs excluding Medicaid have remained essentially flat for the past 20 years, at around $1,000 per capita per year. Only unemployment insurance and food stamps have seen a marked increase in recent years, although both are currently under assault in Congress.
Indian and Chinese Space Programs
Here's a beautiful picture of the Indian subcontinent, shot from space
This reminds me that India, currently, is sending an unmanned mission to Mars – Mangalyaan. Mangalyaan left Earth orbit around the beginning of December 2013. December 11, it successfully completed a mid-course correction, and appears to be on its way to orbiting Mars by September of this year.
Not to be outdone, China landed an exploratory mission on Earth's Moon in recent weeks. Here's a pic taken by the "Jade Rabbit rover" vehicle brought there by the lander – I really like that name, "Jade Rabbit rover."
These missions both will be criticized as wasting valuable resources which could be used to deal with poverty and underdevelopment in the sponsoring countries. But I think it is more reasonable to consider all this under the heading leap-frogging – like countries which skip installing land lines for telephone service in favor of erecting lots of mobile communications towers. India and China are leapfrogging some stages of development, and may benefit from the science and technical challenges of space travel, which surely is part of the human future.
Here's a relatively recent critique of China's growing investment in science and technology which sounds suspiciously to me like sour grapes. It's simple. Keep giving young people education in technical subjects with better and better science backing this up, and sheer numbers eventually will turn the tide. Inventors maybe from the interior provinces of China, neglected by the elite institutions, might come up with startling discoveries – if the US experience is any guide. A lot of the best US science and technology comes from relatively out-of-the-way places, state universities, industry labs, and then is snapped up by the elite institutions at the center.
Big Data, financial forecasting, macroeconomic forecasting, technology forecasting
Links – 2014, Early January
January 4, 2014 Clive Jones	Leave a comment
US and Global Economy
Bernanke sees headwinds fading as US poised for growth – happy talk about how good things are going to be as quantitative easing is "tapered."
Slow Growth and Short Tails But Dr. Doom (Nouriel Roubini) is guardedly optimistic about 2014
The good news is that economic performance will pick up modestly in both advanced economies and emerging markets. The advanced economies, benefiting from a half-decade of painful private-sector deleveraging (households, banks, and non-financial firms), a smaller fiscal drag (with the exception of Japan), and maintenance of accommodative monetary policies, will grow at an annual pace closer to 1.9%. Moreover, so-called tail risks (low-probability, high-impact shocks) will be less salient in 2014. The threat, for example, of a eurozone implosion, another government shutdown or debt-ceiling fight in the United States, a hard landing in China, or a war between Israel and Iran over nuclear proliferation, will be far more subdued.
GOLDMAN: Here's What Will Happen With GDP, Housing, The Fed, And Unemployment Next year Goldman Sachs chief economist Jan Hatzius writes: 10 Questions for 2014 – Jan Hatzius is very bullish on 2014!
Three big macro questions for 2014 Gavyn Davies – tapering QE, China, and the euro. Requires free registration to read.
The State of the Euro, In One Graph From Paul Krugman, the point being that the EU's austerity policies have significantly worsened the debt ratios of Spain, Portugal, Ireland, Greece, and Italy, despite lower interest rates. (Click to enlarge)
JCal's 2014 predictions: Intense competition for YouTube and a shake up in online video economics
Rumblings in the YouTube community in the midst of tremendous growth in video productions – interesting.
Do disruptive technologies really overturn market leadership?
Discusses tests of the idea that ..such technologies have the characteristic that they perform worse on an important metric (or metrics) than current market leading technologies. Of course, if that were it, then the technologies could hardly be called disruptive and would be confined, at best, to niche uses.
The second critical property of such technologies is that while they start behind on key metrics, they improve relatively rapidly and eventually come to outperform existing technologies on many metrics. It is there that disruptive technologies have their bite. Initially, they are poor performers and established firms would not want to integrate them into their products as they would disappoint their customers who happen to be most of the current market. However, when performance improves, the current technologies are displaced and established firms want to get in on the game. The problem is that they may be too late. In other words, Christensen's prediction was that established firms would have legitimate "blind spots" with regard to disruptive technologies leaving room open for new entrants to come in, adopt those technologies and, ultimately, displace the established firms as market leaders.
Big Data – A Big Opportunity for Telecom Players
Today with sharp increase in online and mobile shopping with use of Apps, telecom companies have access to consumer buying behaviours and preference which are actually being used with real time geo-location and social network analysis to target consumers. Hmmm.
5 Reasons Why Big Data Will Crush Big Research
Traditional marketing research or "big research" focuses disproportionately on data collection. This mentality is a hold-over from the industry's early post-WWII boom –when data was legitimately scarce. But times have changed dramatically since Sputnik went into orbit and the Ford Fairlane was the No. 1-selling car in America.
Here is why big data is going to win.
Reason 1: Big research is just too small…Reason 2 : Big research lacks relevance… Reason 3: Big research doesn't handle complexity well… Reason 4: Big research's skill sets are outdated… Reason 5: Big research lacks the will to change…
I know "market researchers" who fit the profile in this Forbes article, and who are more or less lost in the face of the new extent of data and techniques for its analysis. On the other hand, I hear from the grapevine that many executives and managers can't really see what the Big Data guys in their company are doing. There are success stories on the Internet (see the previous post here, for example), but this may be best case. Worst case is a company splurges on the hardware to implement Big Data analytics, and the team just comes up with gibberish – very hard to understand relationships with no apparent business value.
Some 2013 Recaps
Top Scientific Discoveries of 2013
Humankind goes interstellar ..Genome editing ..Billions and billions of Earths
Global warming: a cause for the pause ..See-through brains ..Intergalactic Neutrinos ..A new meat-eating mammal
Pesticide controversy grows ..Making organs from stem cells ..Implantable electronics ..Dark matter shows up — or doesn't ..Fears of the fathers
The 13 Most Important Charts of 2013
And finally, a miscellaneous item. Hedge funds apparently do beat the market, or at least companies operating in the tail of the performance distribution show distinctive characteristics.
How do Hedge Fund "Stars" Create Value? Evidence from Their Daily Trades
I estimate hedge fund performance by computing calendar-time transaction portfolios (see, e.g., Seasholes and Zhu, 2010) with holding periods ranging from 21 to 252 days. Across all holding periods, I find no evidence that the average or median hedge fund outperforms, after accounting for trading commissions. However, I find significant evidence of outperformance in the right-tail of the distribution. Specifically, bootstrap simulations indicate that the annual performance of the top 10-30% of hedge funds cannot be explained by luck. Similarly, I find that superior performance persists. The top 30% of hedge funds outperform by a statistically significant 0.25% per month over the subsequent year. In sharp contrast to my hedge fund findings, both bootstrap simulations and performance persistence tests fail to reveal any outperformance among non-hedge fund institutional investors….
My remaining tests investigate how outperforming hedge funds (i.e., "star" hedge funds) create value. My main findings can be summarized as follows. First, star hedge funds' profits are concentrated over relatively short holding periods. Specifically, more than 25% (50%) of star hedge funds' annual outperformance occurs within the first month (quarter) after a trade. Second, star hedge funds tend to be short-term contrarians with small price impacts. Third, the profits of star hedge funds are concentrated in their contrarian trades. Finally, the performance persistence of star hedge funds is substantially stronger among funds that follow contrarian strategies (or funds with small price impacts) and is not at all present for funds that follow momentum strategies (or funds with large price impacts).
Big DataFederal Reserve policiesGlobal Business ForecastslinksScientific Discoveries