The Foreign Exchange Trading Program

When I was in Bali this past summer I took a couple of lessons on one of the Balinese metallophones used as part of gamelan orchestral music.

My teacher was exacting in the subject of his expertise. He insisted on me getting the technique and notes correct from the start and only let me proceed after I memorized each part of the song. No written music is used. After a time, hammer in hand, I came to appreciate the commitment that he demanded from each stroke against the instrument's metal bars.

During a tea break, seeing that I wore a Columbia Business School t-shirt, he asked me about foreign exchange trading, a subject I know nothing about except that it is exceptionally difficult to profit from it. The gamelan teacher wanted to buy a FX computer trading program which would trade for him based on preset parameters.

The whole idea seemed absurd. Here we were in the courtyard of a home in Bali, chickens running around, someone making batik next door. I advised him against the trading and I hope that he did not start speculating. But now I wonder: to what degree does what today passes for cool business logic and modernity, say in the form of business research, actually differ from his FX trading program?

For Your Security Please Provide A List of Your Fears

Salliemae.com has an interesting security feature. The website forces you to choose five security questions from a preset list. Apart from the typical, there is also the question: "What is your greatest fear?"

I can just imagine the day when Salliemae.com is hacked and not only are millions of social security numbers stolen but also a list of borrowers' greatest fears.

They have a few other choices which I imagine being used as blackmail later on. "The first name of your favorite relative" and "The first name of your best friend from childhood" being good targets.

Does giving this kind of information really enhance security in the long-run?

Your Brain Is Not a Closet

Artificial memory (such as what we can draw upon from databases) is not the same as natural memory (from our brains). As David Brooks writes in his op-ed piece "The Outsourced Brain", artificial memory means we can follow prompts from a GPS-enabled computer in order to drive ourselves home. That drive may be easier, faster and less stressful than it would otherwise and we certainly don't need to understand the road system to arrive home.

However, too much reliance on artificial memory has its shortcomings. I think one of the biggest areas is developmental shortfall and atrophy of mental skills.

For example, while using a calculator speeds up a lengthy calculation and makes it more accurate, should we always rely on a calculator even if it is accessible? I have seen people use calculators for tasks that take more time than mentally multiplying numbers (I used to have a boss who would use a calculator to multiply by 10).

Using artificial memory whenever possible can lead to mental laziness. The brain doesn't seem to be like a closet with a limited capacity that can be used to store one memory at the expense of another. Instead, use of our memories should enable us to uncover patterns and insight that would not come out merely from use of artificial memory.

Name Checks In the Future

When I hear new parents talk about baby names they sometimes ask a few things that I had not formerly thought of as important in a name.


They ask:
1. What is the arrangement of the initials? Are there other meanings that come out from the initials, both in first, middle, last order and first, last, middle order (the later sometimes used on monograms)?
2. Who do they want to celebrate? Family and cultural names and words are here mentioned.


How will this change in the future? Will naming a baby (already difficult) become even more so? Will it become closer to choosing a company's new brand name?


I ask for a number of reasons. Imagine what technological changes have done for the generation being born today. They are different in that most of them will likely not have the chance to register their name or initials as a domain name; those domains will all have been taken by the time this new generation learns to use a computer. Also, given the greater level of international focus today, will names that are difficult to pronounce in popular languages suffer? Will names that have other connotations in other languages suffer?

Unintended Consequences of NYC's Cigarette Tax

For many years I have noticed smokers exchange cigarettes with strangers merely by being asked. To either "bum a smoke" from a smoking stranger or give one to someone who approaches seemed to be a natural part of smoking culture. This exchange that I once heard sums up the rationale for this familiarity among strangers:

Person 1: Could I bum a smoke from you?
Person 2 (smoking): Sure. Here you go.
Person 1: Thanks.
Person 2: No problem. I know it's coming right back to me later.


By exchanging what had been inexpensive cigarettes, smokers paid in and withdrew from a floating circle of goodwill without anyone keeping track of their standing in this balance of payments among strangers.

Now, with cigarettes at $7 per pack (officially) a different dynamic emerges in NYC. I now see smokers approach with $0.50 in change in their hands and rather than "bum" they offer to "buy a smoke".

In the current model:
1 pack cigarettes = $7. At 20 cigarettes to a pack, 1 cigarette = $0.35. A premium is applied (plus it is less unusual to offer $0.50 than $0.35) and the cigarette is bought.

In the old model:
1 pack cigarettes = $4. At 20 cigarettes to a pack, 1 cigarette = $0.20. Applying the same premium as above, a single cigarette should have been purchased for $0.29, but instead they were given freely.

What a difference $0.21 makes. Cigarette price increases led to a transaction based exchange. I would guess that less goodwill and kind words are exchanged among strangers in this scenario. (I am told, however, that the $0.50 is not always accepted and cigarettes are sometimes still to be had for free.)