by Mike Masnick
Wed, Jan 13th 2010 7:23pm
by Mike Masnick
Wed, Jan 13th 2010 5:30pm
from the so-what-do-you-do-about-it? dept
It appears the SEC shares your concern, and has voted to do something about it. The real question, though, is what are they going to do -- and will it help or will it actually make things worse? It looks like the suggested changes just involve trying to make the brokerages more liable for actions done by unregulated clients using the brokerage's access to exchanges. The idea is that the brokerages would then force partners to crack down on really risky behavior. While I understand the logic, it worries me. It seems like the opposite of safe harbor type laws on the internet, and would, in fact, make "service providers" more liable for actions of third parties. That always seems like the wrong approach. It's outsourcing policing and risk management and hoping that by adding liability the service provider will do a good job of it. But what if the service provider can't do that well? And what if the third party screws up anyway? Does it make sense to put blame on someone who is effectively a middleman?
by Mike Masnick
Wed, Dec 23rd 2009 12:23pm
from the where-are-things-headed dept
That should be a warning sign. It's typical, but you can see it in plenty of previous Wall Street meltdowns as well. After someone figures out a "system" for making lots of money (say, mortgage-backed securities a few years back), everyone starts piling in. Then, the "innovation" occurs. Now, much of it is well-meaning, and even useful. With mortgage-backed securities, things like credit default swaps actually were a very useful insurance tool originally. But at some point, they basically flipped from insurance to gambling. People weren't using them to back up an investment, but as the investment itself -- so you'd actually have what was, in effect, thousands of people all buying an insurance policy that one house wouldn't burn down. If that house burned down... the insurance company (hi, AIG) defaulted, and everything comes crashing down. The problem is that these systems become so complicated that it's actually pretty difficult to figure out what the "trigger" is and how the disaster will spread. No one accurately predicted how the last Wall Street meltdown would occur (though some certainly predicted a meltdown), and the fear with the rise of high frequency trading is that the situation is even more opaque. What's happening is built into the algorithms, and with more and more companies piling in, it's inevitable that some of those algorithms are going to have a bug (or, not even a bug, but basically programming to do something that has serious unintended consequences).
Again, I doubt there's anything nefarious in most of this (unless you consider making money nefarious -- which I don't). But, at some point things get overwhelming, and many are beginning to wonder when we reach that point. I'm all for financial innovation and technology innovation -- but I have to admit to a bit of worry when the tech innovation seems to be taking over to such a level that there's little rationale for the financial side. It's about who has the better techies and hardware, rather than who has the better financial thesis, and that leads to dangerous results, because the purpose of the market is separated from the mechanisms that make the market run. When you get that kind of separation between form and purpose, bad things happen.
by Mike Masnick
Wed, Nov 25th 2009 9:01am
from the learn-to-love-it dept
Multitasking is not a distraction from our main activity, it is our main activity.That's a nicer way of saying what we said a few months ago. The "inefficiencies" from multitasking aren't a bug. They're a feature. Cowen goes on to explain it using the analogy of a long distance relationship compared to a stable marriage:
A long-distance relationship is, in emotional terms, a bit like culture in the time of Cervantes or Mozart. The costs of travel and access were high, at least compared to modern times. When you did arrive, the performance was often very exciting and indeed monumental. Sadly, the rest of the time you didn't have that much culture at all. Even books were expensive and hard to get. Compared to what is possible in modern life, you couldn't be as happy overall but your peak experiences could be extremely memorable, just as in the long-distance relationship.The full piece is much longer, but beautifully written and quite convincing.
Now let's consider how living together and marriage differ from a long-distance relationship. When you share a home, the costs of seeing each other are very low. Your partner is usually right there. Most days include no grand events, but you have lots of regular and predictable interactions, along with a kind of grittiness or even ugliness rarely seen in a long-distance relationship. There are dirty dishes in the sink, hedges to be trimmed, maybe diapers to be changed.
If you are happily married, or even somewhat happily married, your internal life will be very rich. You will take all those small events and, in your mind and in the mind of your spouse, weave them together in the form of a deeply satisfying narrative, dirty diapers and all. It won't always look glorious on the outside, but the internal experience of such a marriage is better than what's normally possible in a long-distance relationship.
The same logic applies to culture. The Internet and other technologies mean that our favorite creators, or at least their creations, are literally part of our daily lives. It is no longer a long-distance relationship. It is no longer hard to get books and other written material. Pictures, music, and video appear on command. Culture is there all the time, and you can receive more of it, pretty much whenever you want.
In short, our relationship to culture has become more like marriage in the sense that it now enters our lives in an established flow, creating a better and more regular daily state of mind. True, culture has in some ways become uglier, or at least it would appear so to the outside observer. But when it comes to how we actually live and feel, contemporary culture is more satisfying and contributes to the happiness of far more people. That is why the public devours new technologies that offer extreme and immediate access to information.
Many critics of contemporary life want our culture to remain like a long-distance relationship at a time when most of us are growing into something more mature. We assemble culture for ourselves, creating and committing ourselves to a fascinating brocade. Very often the paper-and-ink book is less central to this new endeavor; it's just another cultural bit we consume along with many others. But we are better off for this change, a change that is filling our daily lives with beauty, suspense, and learning.
by Mike Masnick
Mon, Oct 5th 2009 6:40am
from the questions-to-ponder... dept
Still, there's another argument to be made also, which reader JJ recently pointed out. Stowe Boyd notes that all of these types of studies miss the point, in that personal efficiency may be less important than being more interactive:
Perhaps what we are doing has nothing to do with efficiency. I don't operate the way I do with the principal goal of speeding things up. My motivations are much more complex and diffused.I honestly had never thought of it this way, and I'll admit I'm not sure how I feel on this. But it is an interesting way of looking at such things. Obviously, in a work setting, personal productivity may matter. But, in general -- just doing stuff online -- is it a problem that we multitask? Or is that a feature?
I don't perceive what I am doing as multitasking, really. I am not trying to speed up how quickly I shift from one thing to another. Instead, I am involved in a stream of activities, in which other people figure prominently, either synchronously through direct discussion (a la Twitter or IM) or indirectly, through their writings and my responses.
In many cases, I leave activities dangling because I don't know exactly how I feel about them. In some cases, I could resolve my feelings and take some action if I simply stopped other activities and focused solely on that activity, but in most cases that is not the case. And simply forcing myself to focus on the next thing in the activity would not lead to an acceptable or beneficial result, necessarily.
It's like a painter with a number of works in process. My primary motivation is not getting a particular painting 'done', but adding dabs of paint that I feel are the right ones.
by Timothy Lee
Thu, Mar 19th 2009 11:01pm
from the low-overhead dept
One of the interesting things about the end of the Seattle Post-Intelligencer's print edition, which Mike noted on Monday, is how much more flexibility the PI will have to adjust to changing economic conditions now that it's an online-only publication. I don't think it's generally appreciated how constraining the newspaper format is. Readers expect a daily paper to be a certain size every day, and to arrive on their doorstep at a certain time every morning. Meeting those requirements involves a ton of infrastructure and personnel: typesetters, printing presses, delivery trucks, paper carriers, and so forth. To meet these infrastructure requirements, a paper has to have a minimum circulation, which in turn requires covering a wide geographical area. All of which means that as a daily paper's circulation falls below a certain threshold, it can lead to a death spiral where cost-cutting leads to lower quality, which leads to circulation declines and more cost-cutting. Of course, some papers manage to survive with much smaller circulations than the PI, but these tend to be either weekly papers (which tend to have a very different business model) or papers serving smaller towns where they have a de facto monopoly on local news.
These economic constraints, in turn, greatly constrain what journalists can do. They have a strict deadline every evening, and there are strict limits on the word count they can publish. Because newspapers have to target a large, general audience with limited space, reporters are often discouraged from covering niche topics where they have the greatest interest or expertise. Moreover, because many newspaper readers rely on the paper as their primary source of news, people expect their newspaper to cover a broad spectrum of topics: national and international news, movie reviews, a business section, a comics page, a sports page, and so forth. Which means that reporters frequently get dispatched to cover topics they don't understand very well and that don't especially interest them. The content they produce on these assignments is certainly valuable, but it's probably not as valuable as the content they'd produce if they were given more freedom to pursue the subjects they were most passionate about.
The web is very different. Servers and bandwidth are practically free compared with printing presses and delivery trucks, so news organizations of virtually any size—from a lone blogger to hundreds of people—can thrive if they can attract an audience. And thanks to aggregation technologies such as RSS and Google News, readers don't expect or even want every news organization to cover every topic. Here at Techdirt, we don't try to cover sports, the weather, foreign affairs, or lots of other topics because we know there are other outlets that can cover those topics better than we could. Instead, we focus on the topics we know the most about—technology and business—and cover them in a way that (we hope) can't be found anywhere else. In the news business, as in any other industry, greater specialization tends to lead to higher quality and productivity.
Moving online will give the PI vastly more flexibility to adapt to changing market conditions and focus on those areas where they can create the most value. The PI says they'll have about 20 people producing content for the new web-based outlet. That's a lot fewer than the print paper employed, but it's enough to produce a lot of valuable content. And now that they're freed of the costs and constraints of newsprint, and the expectation to cover every topic under the sun, it'll be a lot easier to experiment and find a sustainable business model.
by Mike Masnick
Fri, Oct 31st 2008 10:44am
from the you-noticed? dept
The paper basically tries to describe the overall landscape for music on the internet, dividing it into three units (reflecting the three people working on the report): Music Service Providers (MSPs) such as Kazaa or iTunes (and, yes, it's impressive that they directly lump the authorized and unauthorized players together), Music Rights Providers (MRPs) such as ASCAP or other collections societies, and ISPs. The paper then uses some basic game theory to note that the interactions between these three players will often lead to "sub-optimal outcomes." No, really?
Instead, they suggest that the entire incentive structure of the industry should be reconsidered -- which is something I clearly believe as well. However, from the article, it looks like the approaches they line up don't do enough of that reconsidering. Why? Because they don't even seem to take into account the idea that (a) there are other players in the market that should be considered in the ecosystem and (b) one of the three legs of the stool set forth in the premise (the collections societies) may not be needed. If you take them out of the equation, but plug in other components of the market (say, the musicians themselves) you can quite easily see the model working quite differently than what's described in the report. Indeed, the options for creating win-win solutions become much clearer. In ignoring the other aspects of the market, while not considering that these so-called MRPs may not be necessary in today's world, the report falls well short of actually laying out optimal solutions in the market.
by Mike Masnick
Mon, May 12th 2008 1:39pm
from the questions,-questions,-questions dept
by Mike Masnick
Fri, Feb 22nd 2008 4:20am
from the welcome-to-reality dept
My guess is that Google honestly couldn't care much less about what the VARs want. It seems to believe that the service was priced artificially high in the first place, and the company can do much better dropping the price and making the offering much more widely available. If VARs can't handle that, that's not Google's problem. What's more interesting, though, is this idea that VARs now think the solution is to go to a more expensive Postini competitor. Sure, it may seem like a better way to get the necessary margins, but eventually those efficiencies come home to roost, and customers will begin asking why they should pay so much to the VAR when they can just go direct to Google and buy Postini for a tiny fraction of the cost. If your supplier is much more efficient and can drop the price of something supplied, the answer should never be to drop them and sign up with a much more expensive supplier. You may fool some of your customers for a short period of time, but it's a losing long term bet.