Monthly Archives: February 2009

Brand Loyalty

The other night, Liza was tearing through a piece of cake (Liza’s motto: “AHHHHHHHH! CAAAAAAAKE!”), so of course we had to take another picture in the ongoing series of “Liza eats something and gets it all over her”. We didn’t have our real camera at hand, so I took a picture with my iPhone.

A cake-covered Liza points at the camera.

The moment she saw the iPhone, she pointed at it. “Ooooh,” she said. “Ap-ple.”

In 1859

In 1859, Louis Pasteur was just beginning a series of experiments disproving the theory of spontaneous generation.

In 1859, diseases were thought to be caused by miasma — bad air — despite John Snow’s work on the 1854 cholera outbreak in London.

In 1859, Gustav Kirchhoff formulated the law of black-body radiation.

In 1859, scientists believed that the atom was as small as particles got.

In 1859, James Clerk Maxwell was researching electricity and magnetism. Three years later he would make the astounding claim that light was electromagnetic in nature.

In 1859, scientists believed that light moved through an invisible medium called the luminiferouos aether.

In 1859, Gregor Mendel was in the middle of his experiments with pea plants that would lead to his laws of inheritance.

In 1859, the first recognized fossil of an ancient human variant had only been discovered for three years.

In 1859, after more than twenty years of gathering evidence and refining his theories, Charles Darwin published On the Origin of Species by Means of Natural Selection.

Darwin did not invent the idea of evolution. The debate over whether species were immutable or not had been going on for a long time. His own grandfather had theorized that species changed over time. But On the Origin of Species was a masterpiece of lucid, logical thought coupled with exhaustive, documented evidence.

Darwin was not completely correct. He knew nothing of genetics, and could only guess at how traits were passed from generation to generation. Yet the core of his theory was sound, and his theory of natural selection, which took decades to be accepted, is the bedrock on which much has been built.

Good scientific work is often subsumed into newer, more complete work. We learn more about how the world works, and older theories are superceded by newer ones. Only a handful of physical theories not only fundamentally changed how we viewed the world but also remain strikingly relevant today. Newton’s work on mechanics. Maxwell’s four equations. Mendel’s work on inheritance. To those add Darwin’s work on natural selection.

Happy 200th birthday, Charles Robert Darwin.

Charles Darwin, aged 51

In Space, No One Can Hear Me Scream About Science

It’s been a while since I’ve talked about scary kids’ toys. Good thing Eli got a new batch for his birthday!

Meet Black Hole.

a black hole planet heroes figure

He’s the enemy from Planet Heroes, Fisher-Price’s new line of planet-themed action figures with tie-in DVDs and comics. You can tell he’s a villain because he speaks with a British accent.

Eli’s fascinated with the figure, and doubly fascinated by the comic that came with it. He read through it several times and then asked me to read it to him. What kind of dastardly things is Black Hole, aka “Professor Darkness”, up to?

A page from the #2 issue of the Planet Heroes comic

“Once Red Giant traps those Planet Weirdos, I’ll release the ravenous Space Quarks. They can devour an entire solar system in a single light year!”

You know, Fisher-Price has all of Issue 2 available online. You should read how the Planet Heroes (plus the guy from the Sun and another from a shooting star and also Earth’s Moon and oh yeah they’re still including Pluto) defeat Black Hole. Hint: it involves a space cow.

A Rocket Scientist Explains Securitization

From a Marketplace report on the American Securitization Forum comes the following conversation between Kai Ryssdal and Bob Moon:

RYSSDAL: …How do you restore investor faith in what is admittedly a very important part of the economy?

MOON: Well, they’re promising straight talk, for one thing. There’s agreement here that things did get so confusing, you almost needed to be a rocket scientist to figure out what you were investing in….

RYSSDAL: Do they know, the people you talk to in this [securitization] industry, that part of the problem we’re in is because of the way they did their business?

MOON: Yes, they’re very much aware of that and there was a lot of talk today about ending the rocket science, if you will.

Look, securitization isn’t really that hard. Let me step you through it. Securities are a standard financial instrument that have some commonly-agreed-upon cost. Government bonds are securities. So are stocks. If money is an abstraction, securities are doubly so.

The nice thing about securities is that we have well-established markets in place for trading them around. Think of bonds and the bond market, where governments or companies issue bonds and pay interest, while the bond itself may change hands bunches of times.

Now, say you’re a company who has, I don’t know, a lot of mortgages on the books. They’re producing cash, but you’d really like to move them off of your books, recognize a profit right now, and let someone else deal with them. But who wants a mortgage here and a mortgage there? They come in such inconvenient irregular sizes. So you bundle them all up and sell off regularized shares of the bundle. You’re averaging out the risk that way, and no one has to buy a whole mortgage if they don’t want to.

But what are these things worth? Hang on, I’m going to have to pull out some math, namely, the idealized rocket equation.

The ideal rocket equation

This equation tells how much the value, v, of the securitized asset can change by. The change in value, Δv, depends on the estimated value ve, times the natural log of the ratio of the market’s total value right now m0, to its value when the security was first put together m1.

“But, Stephen,” you ask, “estimated by whom?” Why, by rocket scientists, silly! Because when you want to know what something’s worth, ask people who supposedly only buy parts from the lowest bidder yet managed to make the International Space Station cost somewhere around 10 times what we originally said it would — not, mind you, that we can pin down the cost any more precisely than “somewhere between $35 billion and $100 billion”.

I trust the confusion over the actual cost of things like securitized mortgages is making more sense now.

Ideally the value of these mortgage-backed securities would have kept going up and up and up. Unfortunately, they didn’t. Instead, they crashed dramatically. That’s because they didn’t achieve their escape value, defined as the price at which people say, “Well, shit, that thing’s worth so much that it’ll never cost less than it does now!” Mathematically, that value is

The equation for escape velocity of a rocket.

where ve is the escape value of the security (not to be confused with the estimated value ve above), M is the mass of the market as measured in Denmarkian GDPs, r is the radius of the building in which the securities are traded, and G is the Greenspan constant.

All of which is most easily summed up by

Any questions?

The Evil That Men Do Lives After Them

When I’ve written about the non-existent link between vaccines and autism before, I’ve done so without a lot of anger. I can understand how parents would be worried enough about the effects of vaccines to not have their kids vaccinated, even though the antivax movement in the end is a very bad thing.

It turns out I’m glad I saved my anger for Andrew Wakefield and what he did.

THE doctor who sparked the scare over the safety of the MMR vaccine for children changed and misreported results in his research, creating the appearance of a possible link with autism, a Sunday Times investigation has found.

Confidential medical documents and interviews with witnesses have established that Andrew Wakefield manipulated patients’ data, which triggered fears that the MMR triple vaccine to protect against measles, mumps and rubella was linked to the condition.

In 1998, Wakefield, along with 12 others, published a paper in the Lancet suggesting a link between autism and the Measles-Mumps-Rubella (MMR) vaccine. Wakefield began crusading against the MMR vaccine. The result? Last year England and Wales had 1,348 confirmed cases of measles. Back in 2000 they had 100. That’s a ten-fold rise in the rate of measles. And it’s not an isolated incident. Here’s what the English measles rate looks like from 1996 to 2008.

Rate of Measles cases in England and Wales from 1996 to 2008

Look at that trend upwards from the last few years. It’s especially infuriating to look at MMR immunization rates over the same period.

Rate of Measles cases in England and Wales from 1996 to 2008 versus MMR immunization rates

The magic inoculation rate for measles is from 83% to 94%. At those rates you see significant herd immunity, and measles can’t really get a toehold. England and Wales has been at the bottom of that range or lower since 2001. The country is potentially experiencing the infectious disease version of compound interest thanks to some seven years of low immunization rate.

It’s not just Wakefield who’s to blame. He may have helped start the panic, but the English press put the megaphone in his hand. It’s great that The Sunday Times’s investigation uncovered Wakefield diddling the data, the cardinal sin of the scientist. Would it have been as necessary had The Times itself not been part of the pack raising the alarm during 2002.

If you’d really like to be depressed about all of this, take a look at the Holford Watch’s summary of the entire mess.

(Note: all data for the graphs above taken from the Health Protection Agency, the UK semi-equivalent of the US Centers for Disease Control.)