Taleb and the language of risk

The original Black Swan

Last night I read about The Black Swan a.k.a. Nassim Taleb on EL&U SE (English Language and Usage StackExchange website). Apparently Professor Taleb wants to introduce a new word to the vocabulary of global financial collapse, antifragility:

So let us coin the appellation “antifragile” for anything that, on average, (i.e. in expectation) benefits from variability.

Consensus on EL&U was that this was blatant tub-thumping by Taleb.

The original Black Swan

I agree with my EL&U comrades-in-arms: Antifragility will cause obfuscation. There are many adequate, extant words*that Taleb could use. Instead, he is intent on creating a term that will be uniquely associated with him. I am not convinced that there ARE any entities that benefit from variability. A delta hedge that is long volatility is the only construct that I can think of off-hand, and I don’t think something that contrived was what Taleb had in mind.

Nassim Taleb already co-opted “Black Swan”. If Thomas Mann were still alive, I think he would have a decent case for plagiarism or even theft of intellectual property. Couldn’t Taleb have thought of an expression that wasn’t previously used by someone who won a Nobel Prize in Literature, who wrote a book with the same title, and pertaining to an anomalous event, also known as a statistical outlier?

Anyway, after the briefest of browsing on a search engine or two for antifragility, antonyms and humor, I found Fragile Web Development with SQL on Rails. 

Risk perception and reality

This is an excerpt, selected by Moi, from the article Risk perception, a recent post that appeared on the Soapbox Science Blog, Nature Publishing Group.

Universal symbol of radiation and fear. Image via Wikipedia

Sometimes, no matter how right our perceptions feel, we get risk wrong. We worry about some things more than the evidence warrants (vaccines, nuclear radiation, genetically modified food), and less about some threats than the evidence warns (climate change, obesity, using mobile phones when we drive). That produces a Perception Gap, the gap between our fears and the facts.

The Perception Gap produces dangerous personal choices that hurt us and those around us (declining vaccination rates are fueling the resurgence of nearly eradicated diseases). It causes the harm to health of chronic stress (for those who worry more than necessary). And it produces social policies that protect us more from what we’re afraid of than from what in fact threatens us the most (we spend more to protect ourselves from terrorism than heart disease)… which in effect raises our overall risk.

We do have to fear fear itself…too much or too little. So we need to understand how our subjective risk perception works, in order to recognize and avoid its pitfalls.

Here was the take-away for me: Societal risk management has to recognize the risk of risk misperception–  recognizing the risk that arises when our fears don’t match the evidence. This is truly the risk of The Perception Gap. It has always been relevant, and becomes so once again in light of the recent E-coli outbreak in northern Europe. The Guardian UK used that as a starting point for a well-written and up-to-date article about the hazards of risk misperception and the consequences of irrational behavior.

Kahneman and Tversky did extensive research on this topic. I am not concerned whether articles like the one referenced above are derivative, in the sense of revisiting past work. Possibly it is an application in the context of current events. Or it may be entirely original new work. My concern is solely that there is an awareness of the reality, and that it be acted upon.

Fault testing in the cloud

The impact of an Amazon Web Services* Elastic Cloud 2 outage is being determined at this very moment. It will be interesting to do some post-situation analysis, and see what the effect was on global web traffic. That is not possible at this time, as EC2 remains off-line.

Many sites are unaffected of course.

Happily, a single cloud provider has not become indispensable for the internet. This should reinforce the viewpoint that alternative provider services, at least two or three, are always to be encouraged. The BBC provides a fine summary of the situation.

*This is the product more commonly known as AWS EC2.

Amazon fault takes down websites

21 April 2011 Scores of well-known websites have been unavailable for large parts of Thursday because of problems with Amazon’s web hosting service. Foursquare, Reddit and Quora were among the sites taken offline by the glitch. No reason has so far been given for the outage.

Amazon’s cloud service last hit the headlines when it decided to stop hosting a mirrored version of the Wikileaks website. However, at this stage, there is nothing to suggest that the most recent outage was related to the Wikileaks controversy.

Read more at www.bbc.co.uk

WeatherBill receives $42 mil in Series B funds

Investment in this catastrophic insurance risk startup company now totals $60 million, primarily due to today’s large infusion of cash from Google Ventures. With statistical analysis and distributed computing for better weather forecasting, WeatherBill can offer farmers more competitive insurance rates. WeatherBill is as credible as any other in this field. The company was founded four years ago by two former Google employees, one of whom was Chief Technology Officer at Google.

WeatherBill logo

I hope Weatherbill is successful. This story is a welcome change from news about over valued social media companies e.g. TechCrunch’s recent post about J.P. Morgan’s rumored investment of $450 million in Twitter.

Actually, it is a welcome change when a major venture capital investment is made in a business targeting farmers and growers.

Google Ventures, Khosla Make Rain For WeatherBill

WeatherBill Inc. is announcing $42 million in Series B funding from Google Ventures, Khosla Ventures and several previous investors… WeatherBill aggregates large amounts of weather data from the National Weather Service and other sources and applies statistical analyses to run large-scale simulations that assess the probability of weather occurring several years in advance anywhere on the globe.The company’s cost to provide insurance is dramatically lower than competitors, said Khosla Founder Vinod Khosla. “Agriculture is an unusual area for venture capital, but we submit that agricultural technology has the same potential as biotechnology had in pharmaceuticals or chips had in telecommunications,” Khosla said on Monday. Read more at blogs.wsj.com (February 28, 2011, 5:30 PM ET)

Political Risk Exposure and Social Media

URL shortening was rarely seen anywhere other than micro-blogging platforms such as Twitter and Status Net’s identi.ca. Shortened URL’s are not prudent from an information security point-of-view, as one takes a leap of faith by clicking on a link that is not descriptive. Descriptive links are also preferable for economic reasons, as they are reputed to figure positively in the mysterious world of search engine optimization (SEO) for page rank.

Yet shortened URL’s are gaining acceptance. They are very convenient.

Libyan Hawk of Qureish via Wikipedia

Twitter introduced its own shortening service in September. Facebook did too. Google provided URL shortening with its goo.gl product in December 2009. Google expanded the range of goo.gl for use on any domain, as it was restricted for use with Google product pages before October. However, there is a new and surprising consideration when making a case for, or against, URL shortening: Political risk exposure.

Top-level domains (TLD’s) are assigned by ICANN. Generally speaking, each sovereign nation has its own TLD. For example, websites registered in Australia use the .au suffix, German sites are .de , while Japanese sites are .jp . The Libyan Government is the official registrar, as designated by ICANN in 2005, for all .ly sites, which are also the domain-of-choice for leading URL shortening services bit.ly , ow.ly and vb.ly .  What will be the consequences of Libya’s domain seizure of vb.ly on October 6, reported by Econsultancy- When All Your Shortlinks Belong to the Libyan Government, on these .ly URLs?

RowFeeder is a social media oriented web analytics service. It stands out from the glut of other Twitter-verse services by delivering reports directly to a spreadsheet. In the RowFeeder company site’s latest post, lead developer and co-founder Damon Cortesi described a new feature for RowFeeder customers: availability of URL shortener bit.ly.

RowFeeder Offers URL Shortening with bit.ly

You can now put a bit.ly link in the tracking field, and have a new column in your downloads with bit.ly click counts at the time of each post… [storing] the click data along with the Tweets and Facebook posts about a specific piece of content.

In light of the recent disruption in the .ly domain space, I enjoyed the closing lines of the announcement:

Please note: This feature has not been approved by the Libyan government, so count clicks at your own risk. Our vb.ly integration is on hold pending recent news.

*Emphasis is NOT mine.

Evolution Robotics

Bias is bad. My prior post could be misconstrued as pejorative commentary, unfairly targeted at Tweetup, an innocuous, and free-of-charge, client application for users of the Twitter micro-blogging service.  Twitter certainly is responsible for the silly avian-themed jargon that is steadily seeping into common vernacular, undermining my ability to sound impressive when pretentiously blathering away, as I’m doing right now. However, Idealab, the owners of the Tweetup social influence metric software did not create the Cult of the 140 Character communication standard.

Tweetup is actually one of many applications, services and bona fide products offered by holding entity Idealab.  This Pasadena, California based company has a refreshingly original and diverse assortment of creative product offerings. In fact, Idealab is no parvenu, having existed as a going concern since the 1990′s, all the while fostering an impressive  range of mostly feasible technical innovations.

Supermarket Loss Control by Evolution Robotics

I was quickly riveted by the Idealab site’s video demo of their TunnelHawk system. TunnelHawk’s design imperative is to mitigate retail store losses due to customer and employeee theft.  To make clear that I am not predisposed against Idealab (in the aftermath of my earlier Tweetup monetization tirade), I am featuring a product video of IdeaLab’s clever response to supermarket petty theft,  the robotically driven TunnelHawk supermarket checker.

Idealab: Evolution Robotics Retail TunnelHawk Video.