Visualizing Social Networks -- PieSpy

This is a newly released tool for visualizing social networks over IRC chat. What I find most useful about this site is the detailed discussion of both SNS representation and visualization algorithms, at a high enough level to be comprehensible to the non-programmer. If you want to know how the many visual tools such as Touchgraph work, check this out.

Touchgraph and Amazon

Alex Shapiro over at Touchgraph (proof that Open Source can be truly innovative!) has added an Amazon browser to the way-cool Google browser. For all you teenage girls out there, there's a LiveJournal browser as well. The Amazon implementation is based on 'customers who bought also bought' and the discussion includes a link to a good IEEE article on recommendation algorithms, including collaborative filtering, cluster algorithms, and search-based methods. The article serves as a handy collaborative filtering primer.

Social Networks, Information Economics, and Search

SNS has become a big enough field with sufficient internal dialogue that it's easy to forget that the promise of the whole shebang can be reduced to a single sentence:

Reducing informational exchange costs, particularly transactional search costs, through leveraging existing information exchange pathways such as personal relationships.

That's it.

We're reminded of that singular purpose by a new SNS-driven search engine, Eurekaster. Danny Sullivan over at Search Engine Watch has a good article on this new twist on a major field.

And yes, Eurekaster, you should offer your service as a layer built on top of the Google API. That API is a fantastic tool for developers and experimenters; the fact that it acts as an innovation magnet for Google, by which the company can observe --> copy or observe --> acquire promising new technologies is just the price of the piper.

Interest cost and real value

While I am talking about property, I'll throw out another thought. It's conventional wisdom that home-buyers are most sensitive to their monthly payment, and declines in interest rates drive up selling prices in a near-perfect inverse relationship, as lower interest cost is swapped for higher sticker price, leaving the buyer with the same total cost. Call me contrarian, but I think that buying a house at times of historically low interest rates is madness. Why? Because you're fully leveraged. Let's assume that there is a nominal value to a house, and an actual value. The nominal value is the sticker price -- say, $400K for that two-bedroom apartment in Berkeley. Since the vast majority of buyers are on 15- or 30-year mortgages or their functional equivalent, a significant interest cost drives the actual value of the place -- the contracted financial commitment which the buyer undertakes in order to acquire title -- up to something like $700K. In times of low interest rates, this $700K (which is based, conventional wisdom tells us, on the buyer's ability to make 30 years x 12 months x a given monthly payment) might be made up of a nominal/sticker cost of $550K, and an implied interest cost of only $150K. In times of *high* interest rates, that $700K number might be made up of a nominal cost of only $320K, and the same overall total due to a vastly increased interest cost of $380K.

If I buy at a time of high interest rates and low sticker costs, it seems to me that I have nothing but capital gains upside from interest rates, which historically have varied cyclically (and which are due for a massive rise, if our trade deficits and the plummeting value of the dollar are any indication -- but that's another story as well). In addition to my capital gains upside (the nominal--> real value of my place going from $320K to $550K) I have the potential to refinance, getting a low low interest rate on a new mortgage to go with my low nominal cost, giving me a genuine total-cost bargain.

But what if I bought in times of low rates? The nominal value of my property can only fall on a cyclical basis, even if overall rising prices mask this somewhat; and if I've taken a variable-rate mortgage, my interest cost can only go up. In the best case, if I am forced to sell my house for any reason during a high-interest period, I'll lose out on its declined nominal value and avoid (through a fixed rate mortgage) any increase in interest costs. In the worst case, I am faced with a rising monthly payment on an asset whose value is declining precipitously, in an economy which is tanking because interest rates kill business investment. Ouch.

Have I mentioned that I'm feeling very secure being in cash?

Why are Bay Area housing prices still stable or rising?

The New York Times has an article today, the damn-with-faint-praise title of which is Job Losses Slow in Silicon Valley. Seems that we only lost 5% of local jobs in the past year, which is relative cause for celebration after the bloodbath of 2000 - 2003. What is staggering to me is the raw numbers. Peak employment in 2Q 2001 was 1.38 million; now it's 1.18 million, after a loss of 202,000 jobs. Average pay (meaning, I presume, wages; not income, which would have been further inflated by capital gains) was $81.7K in Y2K; it's now $62.4K. A little algegra shows that there was about $112 billion of annual salary in SV in 2000-2001; now there's about $74 billion.

For those scoring at home, that's a decline of more than a third -- 34% -- in local salary from 2000 -- 2003.

Since we are talking wage-earners here, it's not the $2 million options pads in Portola Valley that should be affected, but rather the $500K shoeboxes in Palo Alto and Mountain View. Instead, fueled by historically low interest rates, prices for homes have remained surprisingly robust during the past three years of nuclear winter -- an employment freeze that, if fear-mongering about job outsourcing overseas is true, may never actually end.

Six or nine months ago, you still regularly saw news articles about the 'housing bubble' in America, which laid out a case that people had pulled their money from the stock market and put it into real estate, taking advantage of low rates and upset at the declines in their portfolios. You don't see those articles any more, and yet prices continue to be surprisingly robust. What's going on here?

And yes, I am a frustrated wannabe-homeowner. But boy, does being in cash feel nice! Don't even get me started on the dollar and the 'which currency to be liquid in' question...

Parties, Food, and Anti-Food

I just threw a dinner party last weekend, and in the post-mortem with my girlfriend, happened upon an interesting concept. The 'dinner party' as formally constructed probably originated around 1900; when the bourgeousie acquired dining tables and formal dining rooms and all the tat necessary to impress the neighbors. The key point of differentiation here is that a 'dinner party' is not for a special occasion like a wedding, funeral, holiday, etc; includes more than just family; and is thrown by people not of the nobility or aristocracy.

Food was then expensive, and manners were formal, so throwing a mini-feast for no particular reason was an impressive thing to do.

Today, dinner parties are all-but-dead; the closest analogue being a BBQ in the back yard during summer. I would suppose that this has a lot to do with cooking skills being on the decline, but I think that in fact the key difference is that food is now cheap, so having a party centered around a meal (when half the people there are likely on a diet) makes very little sense. In fact, most parties I attend these days center around activities -- volleyball in the park and a burrito afterwards; a hike or run in the hills and burgers afterwards; etc. It's as if anti-food has replaced food as the centerpiece of our socializing.

This needs a bit more thought, but it's a dichotomy worth recording in its present inchoate form.

Visual Representation of Social Networks
Great overview of the visual representation of social networks over the past 30 years. Note to self: Read this in detail!