Rereading The Big Short and waiting for the movie!

I'm a big fan of Michael Lewis and just reread his The Big Short, on a few people who saw the financial crisis coming and cashed in on it hugely.

I only started trading options in 2009, shortly before this book came out. So I was able to read it this time with fresh eyes, seeing details that I missed the first time.

Bear Stearns deserved to die: they sold a bunch of 8-year puts to the protagonists on credit default swaps, which were tied to the subprime mortgage financial engines of the day. This gave the holders of these puts the right to sell at whatever price was specified at the time of that sale ... before the prices of all this stuff collapsed to very near zero.

The movie comes out this Friday the 11th "at select theaters" (not anywhere near me as far as I can tell) but opens just before Christmas everywhere. I can't wait!

Sorry, Cricket: Project Fi is too compelling!

A coworker introduced me to Google's Project Fi:

I had read about this briefly but missed the big advantages:

• Refunds of fees for unused data from your data plan
• Make your phone a wifi hotspot at no extra charge beyond the extra data

The plan takes advantage of dual-network phones, currently the Nexus 5X and 6P. These use the wifi network if available, otherwise the stronger of the two of Sprint (CDMA) or T-Mobile (GSM).

The combination of these feature is too compelling to ignore, as I have been paying AT&T $51 per month for their wifi hotspot for over a year. I can turn that off and buy the (required) new Nexus 5X to replace my current Nexus 5 and be still ahead of the game paying off the new phone

$17/month.

I'm just waiting for my invitation as they are apparently rolling this out a few people at a time.

Try it yourself: http://fi.google.com.

Guides through the Cell Phone Jungle, part two: Clay Shirky

I just had a lovely two hours with Clay Shirky's latest book:

The Chinese cell phone company Xiaomi ("Show-me" is the pronunciation) has produced a modified version of Android and a strategy that's produced a startup worth $45 billion in 5 years.

Shirky's writing is a pleasure, hilarious in spots and insightful always:

If you want a two-slide comparison of the difference between the local U.S. and Chinese economies, you could do worse than comparing in-flight catalogs ... On U.S. airlines, the ridiculous SkyMall, recently bankrupted by the FAA's decision to let people keep playing games on their phones as they land, was a glimpse into a market where everyone who could board an airplane already had everything they needed. So what did SkyMall invite Americans to dream about? An outdoor chaise lounge, for dogs. A mirrored door-mounted jewelry armoire. A spatula with an LED flashlight in the handle. SkyMall was shopping for a culture whose middle class thinks, "hmm, I could use a Tetris lamp, and maybe some rechargeable heated slippers." China's daydreams are different. Here's what's on sale in Chinese in-flight shopping magazines: rice cooker, baby thermometer, skillet, vacuum cleaner, iron, paring knife, umbrella. It's like Sears and Roebuck with QR codes. This is shopping for a culture whose middle class thinks, "hmm, I think I need a set of spoons, and maybe a toaster oven."

Five stars. I have to go back and read the rest of Shirky, immediately.

Guides through the cell phone jungle: first, Cricket

I recently had an experience with a local cell phone retailer that, as I was leaving the store, started to describe as "pleasant." But that wasn't quite right ... it was more like having a competent guide through a snake-filled jungle!

The retailer was Cricket Wireless:

They have an unusual business plan that contains (as far as I can tell) three legs:

• Sell phones at cost by buying in bulk ... but locked to Cricket, not unlocked
• Have knowledgeable staff in their retail stores that can help with technical/commercial issues (more about this below)
• Hold the hands of nontechnical cash users who (apparently) constitute a significant part of their business
• Advertise prices including taxes and fees so they're a smidge cheaper than the competition

I have for a while been using Straight Talk (WalMart) Wireless for my phone and for my stepson's. The stepson's old phone failed and I found advertised on Craigslist a late-model unlocked Samsung Grand Supreme ... but it wasn't unlocked. It was locked to Cricket.

Oh well ... I got on Cricket's website and tried to do the online process to switch the number from Straight Talk ... the order went through but I got an email the next day saying "sorry we couldn't get this work so here's your money back." Annoying, but much less annoying than alternatives I've encountered from other cell providers ...

I took the phone into the Cricket store in Kent, Washington and was guided by Anna, who had previous experience getting service transferred away from Straight Talk. She and I worked together to find the several bits of information to make Straight Talk's clunky number-porting process work and after an hour, it finally did.

One thing they insisted on is the SIM card number of the phone being ported away, and I didn't have that with me as this was a new (used) phone. I finally dug this out of the Straight Talk website as they wouldn't tell me where to find this:

It turns out the Serial Number in the table above is the SIM card number we were looking for; this image is actually more legible than it appears on Google Chrome (the only browser I tried) as the grid lines between fields did not show up and there was just a small space between the two fields.

Cricket runs on the AT&T network; as soon as my Lovely Wife's T-mobile non-contract iPhone payment is over with I'm going to take both of our phones to Anna at Cricket to get them switched.

How to Retire Comfortably on $150K

Basically:

• Put $50K into a weekly options trade that earns 3-5% per week
• Do some other less risky trading with the other $100K (or not!)
• Add your social security check ($1.5K/month?)
• Total is perhaps $9.5K/month ... you could live on this, I hope?

I'm going to put this into a book with the details on how to do this while minimizing the risk of loss (I learned this the hard way trading options the past 6+ years).

I also want to run a case study with one or more persons/couples with these characteristics:

• Has $150K liquid assets (can be IRA or not -- Roth IRA is best ...) that can go into this
• Collects social security (optional -- you can do this without social security, just settle for less monthly income or put more up risk capital: $200K with $70K in options trade)
• willing to try this for one year (every week)
• you need to know something about options trading if you're going to do this yourself,  but I can provide resources to help you learn the basics if you want to do this

Contact me mark -at- pythonsoftwarewa.com if interested.

Computerized election theft a reality?

I recently read a book making some disturbing claims about our election systems:

Points the author makes:

• Exit polls no longer are as accurate as they once were. Why?
• If you don't have a system where humans are observably counting ballots in public, various tricks can be played
• Even optical scan systems are vulnerable (just set the target to -100 and the opponent to +100 on startup and the machine balances)
• "Social issues" have tilted left recently (legal marijuana, gay marriage) but elections somehow still go to Republicans

The author is an admitted 'democrat/left-winger' but makes the point that if results were skewed toward the Democrats the way they've been skewed toward the Republicans since 2000 there would be no end of screaming ... and of course there isn't!

I found it annoyingly plausible ... the author calls for auditing of election results which seems to be all we can hope for.

What do you think?

Can't understand your (insert your opposite political number here) neighbor?

In 2004 I was having lunch with this computer programmer I've known for 30+ years now and I was going on and on about George W. Bush and how we had to get him out of office in that fall's election ... and this guy let me go on a bit and then said "of course you know we support him for reelection" ...

My jaw dropped. But! This guy is a rather conservative Christian, and Bush spoke to that segment of the populace and even though I couldn't see it I couldn't deny that this guy was intelligent and reasonable in other respects ...

I later read a book that made some sense of this:

It gives a possible origin for political divisions, even within the same family. I heartily recommend it to any {Tea Party Trump supporter,Bernie Sanders Bigot} who's trying to understand the other side.

I later came upon a previous book of his that was very compelling also:

Reviews of this book are here. I enjoyed it immensely and read in pretty much one sitting; his way of stringing together classroom anecdotes and the discussion of ancient wisdom was a kick.

Most recently there's an Atlantic Monthly article by Haidt and a colleague on the overdoing of "disturbing speech" suppression in colleges ... well worth a read.

Home fuel cell: finally almost here?

A Maryland company called Redox Power is readying a 25KW fuel cell:

They're focusing first on multi-thousand-unit ordering customers and I guess will get to us homeowners next.

I'll let you know when I have one!

The easy way to avoid debit card fees

I have my main checking account with BECU and mainly use their ATMs and other fee-free ATMs in their affiliated CO-OP Network.

Mostly this works to avoid fees, but occasionally ... My lovely wife and I were headed to a movie in North Bend, where I thought I could quickly track down a fee-free ATM. Not so! The movie was about to a start, so I wound up paying a $3.50 ATM fee to Bank of America. Harrumph.

I had previously received a debit card and checkbook issued by my brokerage, T.D. Ameritrade, but I hadn't been using either. I started carrying the debit card, since they reimburse me for ATM fees, and started using it now and then when I don't go right by a BECU ATM.

This is very satisfying .. I'm no longer stuck hunting for an ATM at short notice trying to avoid those fees.

Schwab also does this with its debit card, and I know there are other remote banks and brokerages that do too. Get one of these for yourself today and stop paying ATM fees!

An alternate view of how to invest your retirement funds

I've been watching Tastytrade off and on for a couple of years now. They've mostly been focused on small accounts, but recently have started a series called Top Dogs focussed on those with more substantial assets: $250K and up.

This is a 12-part series and so far only 4 have been shown. But the recommendations they make vary wildly with the standard financial planner's:

• You get to go short as well as long (that is, bet on a market segment to go down and not just up)
• "Reducing basis" (selling covered calls and covered puts)  is a standard part of the basic strategy
• According to their research, one can pick from a standard bunch of not-very-correlated underlying instruments (S&P 500 futures, Nasdaq Futures, a U.S. Treasury bond ETF, an emerging market ETF, and a gold ETF ... and it doesn't make any difference in what direction you pick any of them (short/long) and you won't be up/down more than 15% in any year. They ran a huge backtest simulation on 243 up/down combinations and proved this out.
• They suggest leverage in trading for yourself. For example, Portfolio Margin gives you more trading "bang for your buck", as does futures trading. In either case this can give you around 3 to 1 leverage, allowing you to control, for example, $300,000 in underlying assets while only putting up $100000.

This seems worth a look if you're paying fees to a financial planner or a mutual fund. Good luck!

PBS's Nova ... for the cost of just a couple of commercial interruptions

Nova is the science/technology show from PBS and has been available for a while now for almost-free streaming (at just the cost of watching a couple of randomly-inserted ads into the 52 minute or so production.

It's worth it! I've found the ones I've seen generally excellent and often fascinating, including:

Mind Over Money is a discussion and critique of the Efficient Markets Hypothesis ... one of the experiments described (where grad students hold on for too long, bidding up the value of an asset that's due to expire worthless) is the key to winning at options trading: selling options to over-optimistic buyers.

And:

This is where I first heard about the B612 Foundation, trying to raise enough money to build a satellite to watch for city-killing-sized asteroids. (They're well short, according to a recent Planet Money episode ...)

And one more exciting one:

focussing on Iceland's volcanoes, which messed up air travel in 2010 and supposedly killed thousands in Iceland and Europe in 1783 and could do worse anytime now ...

Big fun! Anytime you're not in the mood for a romantic comedy, there are 150 of these available and more all the time. Enjoy!

Genetic Genie takes on some of 23andMe's responsibility; The Gut Biome

23AndMe got in minor trouble with the FDA over doing health tests without authorization. Supposedly they can now test for Bloom Syndrome, but from the description it doesn't look too useful for anybody of normal or near-normal height.

Genetic Genie arose to provide a couple of tests that 23andMe can't. You can download your data from 23andMe and upload to Genetic Genie and get a few health results that way.

Genetic Genie is free but solicits donations on its site.

It turns out, though, that we're 99% bacteria and the contents of these bacteria are a huge determinant of our health. This is a huge, newly emerging and very complex subject. See, for example:

The American Gut Project
New York Times: "No Healthy Microbiome"
Larry Smarr at UW in 2014

Wide-ranging dinner conversation inspires subjects of general interest ... first up: Podcasts

My lovely wife and I went to dinner with some old friends D and N last evening and I was making notes during dinner to send an email afterward. But I realized overnight that most of the subjects should be of general interest so I'm posting them here.

Podcasts

I mentioned the Bulletproof Radio Podcast  and it turns out that none of my dinner companions had ever listened to a podcast on their own. (Kate has listened to a few podcasts in the car with me but I was driving the car and the podcasts.)

Here's the general technique: Google the subject you're interested in and then the word podcast.  For example, Astronomy: there are several listed, and all have clickable links where you can listen to recent shows. Almost any radio show you listen to these days will be offered as a podcast.

I listen on my phone with the DoggCatcher app; this is available through the Google Play store for Android users. There is a built-in Apple Podcast player for you iPhone users. (Hi Kate.)

My Favorite Podcasts

This American Life

Radiolab

Marketplace

Freakonomics

Planet Money

Others I like

Bulletproof Radio

Snap Judgment

Wait, Wait Don't Tell Me

Actuality

The TED Radio Hour

Really, the woods are full of them ...

Another favorite SF Author: John Scalzi

This guy:

... is prolific SF author John Scalzi, recently rewarded with a $3.4 million contract  and whose catalog of SF novels is one of the more inventive and enjoyable that I've experienced.

The first one I read (and just finished rereading 5 minutes ago) is one of my favorites of all time:

Any plot synopsis fails to capture it, but it consists of Washington power politics in an era of interstellar inter-species diplomacy and trade ... and sometimes war. One of the veterans of one of the wars is the protagonist Harry Creek ... the dialogue is sparkling, the characters vivid.

Don't hesitate!

Almost as good and set in the same sort of era where Earth is known by several different alien species:

... in this series the technology exists to make 75-year-olds into 22-year-olds with enhanced bodies (staying in top shape with no exercise) and blood (carrying more oxygen than normal blood) and even a BrainPal, an integrated computer in the brain that has all sorts of advantages ....

The series so far:

• Old Man's War (2005)
• The Ghost Brigades (2006)
• The Last Colony (2007)
• Zoe's Tale (2008)
• The Human Division (serial then collected into a novel 2013)

It's particularly important to read the first book in this series first, as I started with The Ghost Brigades and missed some things until I went back and restarted with Old Man's War.

Others of his:

• Agent to the Stars (1997 shareware, 2005 published "for real")
• Fuzzy Nation (2011 "reboot" of H. Beam Piper's 1962 Little Fuzzy)
• Lock In (2014)

I've "read" (mostly via audiobook) almost all of these and enjoyed all, some fervently.

Try any of these but be prepared: Scalzi got the $3.4 million contract because many readers went back to collect the entire list after reading one!

Scalzi also has a blog ...

Two possible research subjects: one for neuroscience, one for social science

I recently finished a contract where I was working remotely with a company in Southern California. I live near Seattle. The main guy I had to talk with on the phone is a native German speaker with a thick accent, and as first I was having trouble understanding him:

For some reason I decided to try switching the phone from my right ear to my left:

After this I could understand what the guy was saying better, it seemed.

I'm not sure if I just got used to his speech patterns after a few minutes of conversation or if switching from right ear (left brain?) to left ear (right brain?) gave me an advantage in pattern matching, which surely comes into play when parsing a foreigner's speech over a phone connection.

Anybody know of research on this?

My second possible research subject: is there a possible inverse correlation between enjoyment of country music and mass transit usage/appreciation?

I am currently working for a company in Boston and have to travel there periodically for work. The recruiter I'm dealing with insisted on my first trip on "saving money" by putting me a $20 Uber ride from the end of the Red Line at Alewife, my closest point to the T in Boston that could take me to the downtown Boston office I needed to get to.

The first morning I was there the guy met me for breakfast at another hotel and then drove me into the work site. The first question he asked me was "do you like country and western music?"

My answer: "not really, but it's your car" ... he left the radio off and eventually we discussed the hotel site and traffic and it turned out he was apparently personally uncomfortable with expecting somebody from out of town figuring out the system and how to ride it where they want to go, and probably uncomfortable using it himself.

This doesn't make sense to me; I grew up in rural Louisiana and places with functioning mass transit seem like magic to me! The fact that I could stay in a hotel a few blocks from the Red Line and just walk over and get on for a ride downtown ... wahoo!

And I don't care for most country and western music ... so based on 2 (apparent) data points, that's a perfect 0 correlation between those two variables.

Social scientists: any existing literature on this?

Low-carb meals (and a drink!) I like

I wanted to get the "dunlap guy" off the top of my blog. :-)

Here are a few ideas for those wanting to try lowering carbs ... it took me a few months for all of these to occur to me so I hope this is helpful.

Pictured above, of course, is a beef steak. Looks beautiful to me as I like mine medium rare ... but any way you like to cook it, it has zero carbs. Add a salad for just a very few carbs (less than 5% carbs by weight for lettuce and most other typical salad fixings):

My German/Bohemian wife introduced me to bratwurst, which I used to eat with a bun and potato chips. But now I typically have:

... as a meal. I just grill typically two of the "beer and brats" on my outdoor grill, preheating it on high then turning low before putting the brats on and turning them every 4 minutes until cooked. This typically takes 20-24 minutes, and they typically catch fire for part of the cooking time when cases split and fat drips on the heating element:

A few slices of cheddar and a handful of peanuts and two of these brats is a fine meal, in my book.

And of course there's the breakfast standby:

I don't know how I ever ate all the toast and potatoes that often comes with this combination ... just 2 scrambled eggs (with cheddar, please!) and 4 strips of bacon is plenty for me ...

A Couple of Restaurant Meals I Like

I've been a fan of Chipotle for several years:

I like their chicken burrito, which I had been getting with black beans and brown rice. I started halving or eliminating the rice most days; otherwise I just have cheese, guacamole and lettuce. This cuts probably 1/2 of the carbs and is still plenty of a meal ...

I also like Jimmy John's:

... and once again, their "unwich" lettuce wrap versions of the sandwiches they sell are plenty of food ... how did I ever eat all that bread?

Sweet Iced Tea with 1/2 or So of the normal carb load

I grew up in Louisiana and was raised with sweet iced tea (and Coca-Cola, which I quit during the New Coke fiasco of 1984). I have been making my own with a home 3-quart tea maker, in which I had been using 1 1/4 cups of sugar (sucrose: the standard stuff).

After some experimentation I came up with a mix of sugars that taste goods and should be only 50-60% of the carbs of the previous formula:

• 1/4 cup xylitol
• 1/4 cup erythritol
• 5/8 cup sucrose

Your taste buds may differ, but in particular the xylitol and erythritol combo seems to have a smoother taste than either one alone.

Bon apetit!

Lowering carbs: how to, what you can expect, why it still isn't mainstream

I've been happily married for almost 20 years ago, and as almost anyone can tell you: this tends to be fattening ...

I'm not quite 6 feet tall and gradually increased my weight over the last 20 years from about 160 in 1995 to 187 last year. Not quite like this picture, but I was filling out my 36-size slacks without needing a belt.

I had always heard about the idea of a low carb diet for weight loss but never paid much attention to it because:

• I was an ectomorph and pretty much ate whatever I wanted (at least until I was 32 or so)
• I like bread and other carbs, especially sweet iced tea

I was doing the standard mainstream plan for keeping weight in check: exercising.

 I've been wearing a pedometer for years and for a while I was being pretty doctrinaire about getting 7000 steps per day ... without much noticeable influence on my weight.

Last fall I attended a conference put on by the nutritional supplement company Rain International. A featured speaker was Brian Peskin who had a book for sale: The 24-Hour Diet.

My wife wanted a copy so I bought one and sat reading it while waiting for her to emerge from a conference session ... it turns out to promote a simple variant on the low-carb diet idea:

• Reduce carbs during the week
• Eat all the carbs you want Friday night and Saturday
• Holidays: don't worry about it, just get back on board the next day

I decided to try this and immediately lost 10-12 pounds making a few simple changes:

• Eliminating most bread, for example getting lettuce wraps instead of sub sandwiches
• Reducing rice, for example just getting 1/2 the normal brown rice and black beans I normally had been getting on the Chipotle Chicken Burrito I like
• Eating more beef and fewer potatoes

I then read a book that presented the same ideas in a narrative I found compelling:

And a book and podcast series that also promotes lower carbs:

After this I further reduced carbs, most recently by changing the sugar content of iced tea I make at home. I used to use 1.25 cups of normal sugar (sucrose) but have started using:

• 0.5 cups sucrose
• 0.25 cups xylitol
• 0.25 cups erythritol

... per pot of tea, with a drizzle of honey added to the top of some cups I pour early in the pot. (The xylitol doesn't dissolve well in iced tea and therefore the bottom of the pot it a bit sweeter than the top.)

I estimate that this changed sugar formula is about 1/2 of the carbs in the full-sucrose formula. 

The bottom line: when I weighed myself on Saturday a.m. I hit a new low:

I don't look like this and won't, but I did hit a new low: 168! And I don't see any reason I can't get down to the low 160's or even lower if I wanted. And this is without feeling deprived or hungry!

As for why this sort of dietary plan still isn't mainstream, I just read yet another book on that subject:

According to Taubes, it's impossible to do scientific studies on changes in diet and control for a single variable. A valid study is also horrifically expensive and therefore many smaller studies happen and researchers tend to stick to the mainstream "calories are all the same and obesity is a will power problem" view in spite of evidence to the contrary.

Brunch tomorrow for me: a 2/3 pound organic beef burger from Costco, with cheese ... zero carbs never tasted so good!

Code: An Essay

I read this Bloomberg BusinessWeek article on code this week and it was excellent for anybody

who's not quite sure about code and very enjoyable for me (a computer geek with experience similar to that of the author.)

38000 words: make sure you have time for it! Enjoy ...

Am I a good credit risk or not?

These institutions apparently don't think so:

My credit record is generally very good; a lender's representative said in 2010 that he'd never seen anything like it: "never 30 days late in 30 years!" True! Also: never late on any mortgage, rent or car payment.

But!

• I was out of work for a couple of months recently and have taken on extra credit card debt
• I have been a bit sloppy in the past with credit card payments and been a month late here and there
• I have a complicated bank life, with a subchapter S corporation that I work through sometimes and a normal checking account I use otherwise and have to transfer money back and forth between for various bills. I have goofed and overdrawn these accounts (always briefly) occasionally

And last but not least:

• In a fit of pique in 2009 I refused to pay a second $29 overlimit fee on this credit card my wife was using. She had been over the $4000 limit a couple of times and I had called and gotten the fee reversed. But I never got the limit raised or switched her to a different card, and at one point they said 'no'. "Even if I stop using this card?" "Even then", they said. I paid the first $29 fee, stopped using the card, and refused to pay the second when it came a month later.

This is called a serious delinquency even though the amount was tiny (eventually recaching $129) ... and having gone through 6 levels of increasingly overoptimistic collections agencies trying to get it; I have never responded to any of them.

My credit score recently after all this: 693. This is less than stellar, and if this number is all the lender is looking at I can see that they might think me too much risk.

But there is one lender that's twice now been willing to lend me sizable amounts of money when the two organizations above would not:

That's Pentagon Federal Credit Union.

I was first attracted to them via their ultra-low car loan rates. I borrowed to buy my first Chevy Volt in 2011. They later offered me a mortgage on a rental property we own after Wells Fargo turned me down, and just the past few days offered a substantial increase in a HELOC we have with them after BECU turned us down recently for a personal line of credit.

From now on PenFed is going to be my first stop for anything financial related. You don't have to be a military veteran to join, either! I highly recommend them.

An obnoxious advertising technique that should be boycotted

I sometimes sleep in a room with a laptop running and one night I woke with a start to a noise ...

I had forgotten to turn the sound down and there was an ad playing video with sound that I hadn't clicked on (as I had been asleep this would have been unlikely anyway) ...

It turned out the ad was running on the Weather Underground site:

I complained to them and was told I could get an ad-free version for $20/year.

Instead, I no longer use their site except for brief views to check forecast against other weather sites who don't use this technique. I used to leave it up all the time.

I also make a point never to do business with any advertiser using this technique; the only one I have heard clearly before clicking closed the page was 'Advil', and not being a common user of NSAIDs anyway this won't have any affect on their market. But still ...

I don't mind ads; I don't even mind targeted ads. I just clicked around after starting with a Volkswagen TDI link on Wired.com, and I expect to get car ads for a while now. (Too bad for them as I have 18 months left on my current lease.) But I don't expect any of those ads to play sound without my explicit request for them to do so.

Weather Underground is owned by Weather.com; I've tried Accuweather but haven't settled on another weather site; suggestions?

Doonesbury on the open office plan

Published February 8 2015:

Get more Doonesbury here.