Thursday, March 26, 2009

Five Equations That Changed The World

Book Review : Five Equations That Changed The World
Author : Michael Guillen
My Rating : 3 out of 5 stars

The complete title for this book is "Five Equations That Changed the World: The Power and Poetry of Mathematics".

Whenever there is a list of top N things that did this - be it the movies, songs, inventions, whatever - there can be little agreement about the choices. So let's not spend time arguing about the merits of the list chosen by the author Michael Guillen here. He has chosen Newton's law of gravitational attraction, Bernoulli's law of hydrodynamic pressure, Faraday's discovery of electromagnetism, Clausius and the second law of thermodynamics and finally of course Einstein's theory of special relativity. This list is as good as any other.

The first problem is these are actually discoveries of physics. These are not the most important mathematical equations !! The title is very misleading. But it's also more than that. Faraday was a brilliant physicist - but not really a mathematician. He was an extraordinary experimentalist - but knew little of higher mathematics like other contemporary physicists. Maxwell's equations would have been consistent with the title.

Besides that, how do the individual chapters fare? It depends on what expectations you have. If you really want to understand say the special theory of relativity, then there are many other books to choose from. Brian Greene is one name to start with. This book does not make much attempt to go much deeper into scientific explanation of the concepts involved. It only scratches the surface and leaves you for wanting more.

Then what is the book really about ? Is it about the drama surrounding the discoveries ? Yes and no. It's more about the main characters of individual chapters, and dramatic events in their life. Once again, the equation is chosen only as an excuse to talk about how Newton felt that his mother neglected him, or how the Beronoulli clan fought amongst themselves or how much Clasius loved his wife. Yes, these can be interesting topics, and yes, the author writes very well - but that's not what the title says !

I knew about the lives of Newton. Faraday and Einstein before I opened the book. On the other hand I knew very little about the Bernoulli clan and almost nothing about Clausius, hence I liked those chapters as short biographies. But that's all the book really has to offer. Overly dramatic account of the lives of five great scientists. And how accurate is that ? Who knows ? I mean how can we know what Clausius really was thinking about when his wife was dying ? By trying to make this book very accessible the author almost makes it Hollywoodish.

To be fair, the author expands the topic from the scientist in question to the work of other scientists that were also instrumental in laying the groundwork. For example, the chapter on Faraday explains the contributions of Ampere, Voltas et al.

Maybe I am not the right audience for this book. I think teenagers who have some interest in math and physics would like the book. The writing style very engaging and there are nice anecdotes.

I can recommend neither for nor against reading this book. If you decide to read this, set your expectations correctly.

Thursday, March 12, 2009

They really said it ! [2]

One of the frequently sought after CEOs during the real estate bubble was Angelo Mozilo of Countrywide Financial. When one mortgage company after another started closing down, it became obvious that boom is turning into a bust.

But in their quarterly report announcement, Countrywide had the audacity to say the following.
The company also said it expects to be profitable in 2008.

'Countrywide's results for the third quarter of 2007 reflect the impact of unprecedented disruptions in the U.S. mortgage market and the global capital markets, as well as continued weakening in the housing market,' said Angelo Mozilo, the company's chairman and CEO.

He continued: 'However, during the period we also laid the foundation for a return to profitability in the fourth quarter. Countrywide has responded decisively and taken the steps we believe are necessary to address the current challenging market environment.'

What happened afterward was not a "return to profitability" by any stretch if imagination. This was not just an optimistic CEO. His front row seat at the then slowly unfolding drama of the mortgage crisis was also near the exit. As can be seen in reports like this, in the months preceding this announcement, he was unloading shares of his own company.
Countrywide Financial Corp. Chairman and CEO Angelo Mozilo cashed in $138 million in stock options over the last year, switching his trading plans as the mortgage company went into a tailspin, it was reported Saturday.
Mozilo unloaded 4.9 million Countrywide shares, most of which he bought through exercising options.
Mozilo adopted a new trading plan, added a second one and then revised it while the housing and mortgage industry slumped, the Times reported, citing regulatory findings. The changes allowed him to sell hundreds of thousands of additional shares before Countrywide stock plunged.
The report also mentioned the following, which is very much keeping in line with Enronisque business traditions that are no longer rare.
Calabasas-based Countrywide, the nation's largest mortgage lender in terms of volume, faces a lawsuit claiming it failed to warn employees about the depth of its financial troubles, resulting in heavy stock losses in their 401k retirement accounts.

The company recently said it will eliminate as many as 12,000 jobs in the coming months. Its stock, meanwhile, is off more than 50 percent from its $45.03 high on Feb. 2.
Angelo Mozilo is still not in jail. Could it because of so many of our honorable elected officials were parts of "Friends of Mozilo" program mentioned in this NY Times article ?
Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee and a leader in the effort to help homeowners caught in the mortgage crisis, denied on Friday that he received preferential treatment for his two Countrywide loans.
But, the Web site of the business magazine Portfolio, cited internal documents indicating that Countrywide had reduced the rate on the mortgage of Mr. Dodd’s Washington town house by three-eighths of a point, saving him $2,000 a year in interest payments, and reduced the rate on a Connecticut house by a quarter point, saving $17,000 over the life of the loan.
... reported that Alphonso Jackson, the former secretary of housing and urban development under President Bush; Donna E. Shalala, the secretary of health and human services under President Bill Clinton; and the former United Nations ambassador Richard C. Holbrooke also were part of the Countrywide V.I.P. program.
Just another case of the fox watching the hen house.

Phelphs : From drugs to philanthropy

Well, not everything was wrong about Phelps doing that dope thingy.

At least someone benefited from this.

The celebrated marijuana controversy surrounding Olympic superstar swimmer Michael Phelps has turned out to benefit the San Francisco Food Bank.

Soon after a British newspaper published a photo of what appeared to be Phelps smoking marijuana, Kellogg's announced it would not renew the swimmer's endorsement contract - never mind the eight gold medals he won at the Beijing Olympics.

Apparently, that left only one problem: what to do with the boxes of Corn Flakes and Frosted Flakes bearing Phelps' toothy grin. The answer seemed pretty clear two weeks ago when the local Food Bank took delivery of nearly 2 tons of the cereal.

The Food Bank, of course, is delighted. With the downturn in the economy, donations of packaged foods are down. It is also important, Ash says, that the cereal company donated to the hungry rather than simply throwing the product away.

Wednesday, March 4, 2009

Bailout Nation : "Stay the course"

This is what I wrote to our Congressman - Jerry McNerny - in Oct 2008.

Honorable Sir,

I am writing to express my tremendous disappointment at your decision to vote in favor of the current bill being touted as economic recovery plan.

The bill has been pushed by scaring the American people - exactly the same way the bill related to Iraq war was pushed. Most economists are against the bill and still there were no alternatives discussed. Without interviewing prominent economists why have we decided to trust a proposal by a former Wall Street banker ? Just because we have tagged on a few provisions ?

The idea of buying distressed assets from risk taking banks is fundamentally wrong. It is doomed to fail and put financial security of future generations at unfathomable risk.

If we have to do something, then why not spend these 700B dollars on building alternative energy plants ? It will create jobs and will help the housing crisis. The economy needs to create new jobs, not throw good money at bad. And the alternative energy investment will actually show some return in future. If not that idea, then any idea that invests in infrastructure will do.

In any case, I must express my regret and I will do so when I vote. I will not vote for you or any other person who supports this bill. Ever again. I will never be able to forget this erroneous decision that puts my kids' future at permanent risk.

Your's truly.

- Abhay Avachat.

I still stand by that. We were told that this bailout needs to be done to save the economy ? What has happened ? We are still giving money to failed institutions, their stocks are still almost worthless - actually many have ceased to exist, jobs are still being lost at an alarming rate, stock market keeps making historic lows and ... you get the picture.

So what was the point in giving OUR money to all these banks ??

The Obama administration is doing more of the same. That's not the mandate on which he was elected. The first 100 days are important - and till now have been very disappointing. It just feels that there is simply no will to take hard decisions. What a mess.

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