The Half Baked Lunatic

Twice a year, once in the spring and once in the fall, we move our clocks either forwards or backwards to accommodate the change in Daylight Savings Time.

And twice a year, there are the requisite news articles written about Daylight Savings Time, explaining to everyone why we go through all this hassle. Then there are the cutesy and often misguided Facebook posts with statements like: “only the government would believe that you could cut a foot off the top of a blanket, sew it to the bottom, and have a longer blanket.” (which is what prompted me to write this particular article in the first place!)

So let’s get to the bottom of what Daylight Savings really is. First of all, however, we have to understand what midnight is. That’s right: midnight, the time that we’ve decided each day should start.

Technically, midnight is the time that is halfway between sunset and sunrise. It’s simple enough, but that definition needs some clarification. As the Earth revolves around the Sun, the Earth’s tilt causes daylight hours to shift with the seasons.

A better definition is that midnight is the time that is halfway between sunset and sunrise, at the equator, on either the fall or spring equinox (the only two days of the year when the sun is directly overhead at the equator).

Now we’re getting somewhere, but there’s one more wrinkle in this definition.

You see, the Earth is just over 24,000 miles around and More...

When my kids were born, in 1999 and 2000, I decided to conduct some scientific experiments on them.

Oh, don’t worry, it wasn’t anything too gruesome; all their limbs and internal organs are still intact. I just wanted to put some personal child-rearing philosophies to the test and see if I could turn them into healthy and conscientious eaters without any odd phobias or irrational dislikes of certain foods.

Fundamentally, I believe that kids’ eating habits are mostly formed between the ages of two and five, and having a pro-active methodology to respond to the typical food related tantrums that every kid goes through would help get through those critical years and make them better eaters.

Primarily, my belief was that all kids naturally go through short cycles of not wanting to eat certain foods, not liking certain flavors or spices, and that many times (not always) this is due to external influences – not being hungry, tummy upsets, a particular mood, or just being enamored with something that tasted good last week and not wanting anything else. One of the key ideas is that these usually are “short” cycles of likes and dislikes, but having an inappropriate response can extend the cycles or even artificially create a lifelong dislike of one certain food.

What I wanted to avoid was the typical parental response of coming to the conclusion that “my kids don’t like ... xxx”, when “xxx” really isn’t the problem.

When parents come to the conclusion that “my kid doesn’t like xxx”, they usually stop giving their child that particular food and let everyone know at school and at play dates that their kid won’t eat it – or they make a big deal about it at home and try to forcefully cajole their kid to eat the food in question. Both responses perpetuates the cycle and just makes it worse. Furthermore, I truly believe that it gives positive reinforcement and the child realizes that they get extra attention when they don’t like something.

So I would never say “My kids don’t like xxx”.  In fact, in their entire lives, they have never heard me say that to anyone. Instead, I would say “My kids eat everything, but I didn’t cook the xxx right the last time. I’ll make it better next time.”

The next time I’d make the offending dish, I’d change it a little bit and do something different.  I’d ask More...

There is a pervasive and somewhat lopsided tendency in our society to separate fellow humans into the categories of being either “believers” or “non-believers”. The not-so-subtle implication is usually that there is something wrong with you if you are a “non-believer”.

Let’s play a little game; I’ll take the position that there really is something wrong with non-believers. But first, let’s swap the traditional idea of who is a believer and who is a non-believer.

For example, if I have a ball in my hand and I hold my arm straight out from my body and I drop the ball, I believe that the ball will always fall “down” – towards the ground. In our game, non-believers are the people who will say that god can make the ball go up, or sideways, or turn into a flying cheeseburger and flap its wings at the moon.

If we get all the non-believers on Earth to PRAY really hard, and ask god to make the ball go “up” when I let go of it, I still believe it will go down.

If you ask a believer why the ball will go down instead of up, the typical explanation you will get is that “gravity is a force that attracts two objects proportional to their mass”. In general, the answers that believers give you will have something to do with gravity, and the answers will be relatively consistent on average. Without some external physical force (a blast of air, or someone swatting it with a tennis racket for example), believers will say that the ball will drop “down” even if you conduct the experiment hundreds of billions of times, as long as the Earth and the ball have mass.

However, if you ask all the non-believers why praying to god doesn’t ever change the fact that the ball goes down when dropped, you will get a bunch of different, inconsistent, and largely contradictory answers.

One of the answers you might get is that ‘god doesn’t work that way’. I love that answer, I hear it all the time. I keep asking all the non-believers how god does work, and no one really seems to know. The fallback response, however, is this: “you have to have faith.”

Ok, I’ll accept that. I am a person of absolute unwavering faith, and I will gladly put the full conviction More...

Back in 1973, two mathematicians named Fischer Black and Myron Scholes wrote a paper entitled "The Pricing of Options and Corporate Liabilities".  This became known as the “Black-Scholes option pricing model”, which earned them a coveted Nobel Prize in economics in 1997 (technically, Myron Scholes shared the prize with Robert Merton, another collaborator, since Fischer Black had passed away by that time).

The Black-Scholes option model serves as the benchmark for setting the price of a common stock option. All you need to know is the stock price, the strike price of the option, the time left to expiration, the current interest rate, and this tricky little thing called the volatility of the stock.

Ahhh, the volatility. There’s the rub. The volatility of a stock is calculated using an iterative process called a “cumulative normalized distribution function”. Basically, it looks at the variations of a stock’s up and down movement over a certain time period and offers up a percentage of the average movement. The volatility is an absolute measurement, which is different from a stock’s “beta” – the beta is a ratio of that particular stocks’ volatility as compared to the rest of the market, which is actually much easier to measure.

In my definition of volatility, I said that it relies on the variation of a stock price over a certain period of time. But what period of time should you use? One week? A month? Three months? Six months? A year? Maybe two years? The time period that you use can make a huge difference in the value of the option, but there’s no general recommendation for what period to use.

All of the other factors (stock price, strike price, time to expiration, etc.) are quantifiable values that can be specifically defined. The volatility, however, requires a bit of artistic interpretation.  If the stock was highly volatile nine months ago, but is more stable now, then measuring the historic volatility over the last six months is probably a good choice. Or not. More...

For the past billion years or so, every animal on Planet Earth has been in danger of being eaten by some other animal at one time or another.

Humans aren’t immune from the risk, of course; just because we’re at the top of the food chain doesn’t mean we wouldn’t be a tasty treat to something else. A hiker was eaten by a bear in Yellowstone park just last week, and a few times a year we hear about sharks that feed on an unlucky swimmer.

So I get a little perturbed by folks who tell me I shouldn’t eat meat because it’s unethical, or because we’re “exploiting” animals for our personal gain. Frankly, if every animal on the planet stopped eating other animals, all species would die out. The “Circle of Life” would come to a complete halt.

Someone asked me if I’m a vegetarian and I said, “No, but I mostly eat vegetarian animals!”

Granted, in our modern society, homo sapiens (especially the ones living on the North American continent) should cut back on meat consumption. But from a health standpoint, completely eliminating meat from our diet is going too far in the other direction.  We are omnivores and always have been, and we require a balanced diet. Unfortunately, some people balance their diet about as well as they balance their checkbooks and they end up overweight AND broke!

Even though I’m certainly not a vegetarian, I do have many issues with our “factory farmed” meat production. Not just because it might be considered “cruel” to animals, but because we are getting increasingly isolated from our food supply.  In the past 100 years, we’ve become the very first humans in history where the majority of the population doesn’t know where our food comes from, or how it’s grown and processed. As long as the grocery store is fully stocked and the local restaurant can serve a hot dinner plate in a timely fashion, we’re happy.  We don’t want to think about where it comes from – and if we watch a video of a butcher at work, it’s considered “gross” for some reason. Why is that?  For thousands of years, More...

I’m really tired of seeing these news stories, pretty much every single week lately, about some kid (usually under age ten) who gets their hands on a gun and accidentally shoots themselves, a parent, sibling, or their best friend.

Everyone knows that our national debt is completely out of control. But there’s an important issue that the press seems to be ignoring: the potentially devastating effect of rising interest rates.

The Federal Reserve is responsible for implementing our fiscal policy, but the Fed can not “set” interest rates – the overall market does that, based on supply and demand.  However, the Fed can influence rates by increasing or restricting money supply.  At the moment, just like in Louisiana and Mississippi, the floodgates are wide open. The bond market is awash in “virtually free” money, which is artificially keeping interest rates at historic lows.

But here’s the crux of the issue: with the floodgates open, the reservoir will eventually run dry – and the expectation is that interest rates will then rise. What happens to our federal budget when rates go up?  It could get really ugly really quickly.

Here’s why:

If you look at the chart in my earlier post, Trying to Make Sense of the Federal Budget, (the second chart, with the Social Security and Medicare numbers removed), you will see that interest payments on the federal debt clocked in at $218 billion in 2010, or 11% of our federal budget:

The weighted average interest rate of all the US debt currently runs about 2.07%.  Shorter term debt has a lower interest rate – less than .25% – and longer term debt has a higher interest rate – approaching 4.375%. When longer term debt is more expensive than short term debt, we have what is referred to as More...

It’s only been a few days since Osama Bin Laden was killed, and I can’t even count the number of news articles, opinion pieces, interviews, historical retrospectives, biographies, rants, and random comments I’ve read.

Most intriguing to me is the question of whether or not we should be celebrating someone’s death.  I’ve read a couple of interesting postings specifically on this subject, but it brings up some larger questions about humanity.

I’ve always considered the human race to be one big organism. Each individual person is like a cell in the human body, with their own specific job in life. But the overall total is what makes up the “body” of humanity. Some people do the majority of our thinking, some people do the majority of “manual labor”. Some people make it their life’s work to heal others, some provide food, and – just like the cells in our body – some handle the unpleasant tasks like hygiene and waste disposal.

And some people are like cancer. They grow up with the specific intent of killing others.

Some of these cancers are so insidious that they actually threaten the existence of all of humanity.

Our cells do fight back when threatened, and if they can’t handle the attack on their own, the heroes of our our body – the white blood cells, for example – come to the rescue. But sometimes, even more drastic measures are required.

If a patient has to undergo surgery to remove a cancerous tumor, the surgeon needs to cut out a little more around the tumor – removing some healthy cells in the process.  Consider that to be the equivalent to “collateral damage” in war (see my previous posting, Wrestling the Anaconda, for a humorous view of the “margins” that a surgeon needs to remove from around dead tissue during surgery ...)

Ok, it’s not a perfect analogy, but you get the idea.

The removal of Osama Bin Laden from the human collection was an extremely precise, laser accurate surgery – with very little collateral damage.  But 1) we left a lot of dead on the road to get to him and 2) he managed to infect others with More...

Pop quiz: What percent of our federal budget goes to the military? 

If you look at the “official” budget numbers, the White House reports that Defense spending takes up just over 19% of our budget.

Here is what our government spent in 2010, as reported by the Office of Management and Budget and the Department of the Treasury:

At first glance, this looks like a reasonably balanced chart, without any single slice of the pie taking up too much of the available dough (the pun was intended, although the joke was – admittedly – kind of crusty).

However, there’s been an unfortunate trend which started sometime around the Reagan era, where they try to “de-emphasize” the amount we spend on Defense by including More...

The height of the “dot com” boom was a pretty crazy time for investors; venture capitalists were investing huge sums of cash with any entrepreneur who could type the word “internet” without using a spell checker. People made some really BAD investments and only a few of the startups from that period are still operating today.

But there’s one deal that really takes the cake. This acquisition was so absurd in its reasoning and so insidious in scale that I’m surprised the story hasn’t been made into a Hollywood feature film.

Let’s back up a few years, to 1996. This was the year that yours truly joined a small internet startup called VXtreme, an early pioneer in streaming video on the web. VXtreme had actually developed a viable technology and we created what was arguably the best streaming video platform (codecs, encoder, player, server) in the world at the time.

Remember that in 1996, people were connected to the internet with 28.8Kbps modems – or if you could afford it, you might have one of the spanking new 56K modems.  Whoo-Hooo! Blazing fast internet it was, indeed. Delivering real time streaming video over such a connection was problematic at best – but it was SO exciting to see a media player embedded in a web page, rendering real time video with a resolution of 160x120 pixels at a whopping 15 frames per second refresh rate! We were truly on the bleeding edge.

In just over ten months, we built the company, produced the product, engaged a bunch of high profile customers, and sold the whole thing to Microsoft for about $74 Million (and to set the record straight, I was not one of the founders or shareholders – just a “late hire” marketing manager, with options that were only worth about 1/10th of 1% of the company).

It was a fair valuation for VXtreme.  Our technology was merged in with the “NetShow” product that Microsoft had been struggling with, and the platform was eventually renamed “Windows Media”. Even today, the Windows Media Player, Windows Media Audio/Windows Media Video file formats, Silverlight, and the More...