Thursday: Assholes R Us

Did you see this list of the top majors for the 1%?

We got an interesting question from an academic adviser at a Texas university: could we tell what the top 1 percent of earners majored in?

The writer, sly dog, was probably trying to make a point, because he wrote from a biology department, and it turns out that biology majors make up nearly 7 percent of college graduates who live in households in the top 1 percent.

According to the Census Bureau’s 2010 American Community Survey, the majors that give you the best chance of reaching the 1 percent are pre-med, economics, biochemistry, zoology and, yes, biology, in that order.

Undergraduate Degree	Total	% Who Are 1 Percenters	Share of All 1 Percenters
Health and Medical Preparatory Programs	142,345	11.8%	0.9%
Economics	1,237,863	8.2%	5.4%
Biochemical Sciences	193,769	7.2%	0.7%
Zoology	159,935	6.9%	0.6%
Biology	1,864,666	6.7%	6.6%
International Relations	146,781	6.7%	0.5%
Political Science and Government	1,427,224	6.2%	4.7%
Physiology	98,181	6.0%	0.3%
Art History and Criticism	137,357	5.9%	0.4%
Chemistry	780,783	5.7%	2.4%
Molecular Biology	64,951	5.6%	0.2%
Area, Ethnic and Civilization Studies	184,906	5.2%	0.5%
Finance	1,071,812	4.8%	2.7%
History	1,351,368	4.7%	3.3%
Business Economics	108,146	4.6%	0.3%
Miscellaneous Psychology	61,257	4.3%	0.1%
Philosophy and Religious Studies	448,095	4.3%	1.0%
Microbiology	147,954	4.2%	0.3%
Chemical Engineering	347,959	4.1%	0.8%
Physics	346,455	4.1%	0.7%
Pharmacy, Pharmaceutical Sciences and Administration	334,016	3.9%	0.7%
Accounting	2,296,601	3.9%	4.7%
Mathematics	840,137	3.9%	1.7%
English Language and Literature	1,938,988	3.8%	3.8%
Miscellaneous Biology	52,895	3.7%	0.1%

Source: 2010 American Communty Survey, via ipums.org

{{hangs head in shame}}

See??  This is yet another reason to invest in research.  If you don’t keep us in the lab and pay us well, we’ll go to work on Wall Street.  Nice economy you’ve got there.  Be a shame if something *happened* to it.

I suspect that the large number of geeks on Wall Street represents the number of quants hired to construct and run the dynamic models.  Take D. E. Shaw, billionaire biologist, for example. While he’s running a hedge fund, he’s got a sideline creating molecular dynamics simulations programs on proteins.  I can definitely see the crossover but what the top dogs probably fail to realize is that to the geeks, the programs are just research, as in “what would happen if we tweaked this parameter?” and there goes the Euro. God, help us.

Ironically, major pharmaceutical companies are run by former ketchup company executives and salesmen.  Go figure.  What we really need is for everyone to stick to their own kind.  No more of this mixing of the majors.  It’s unnatural.

However, this study just confirms my suspicions that it is much easier for a hard sciences major to learn business and finance than a business major to learn the hard sciences. And we in the research industries are going to pay for that lack of intellectual reciprocity.

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Did you catch the article in Vanity Fair titled National Public Rodeo about the Juan Williams at NPR fiasco?  There’s a sad little tale of karmic justice in it, considering the way the candidates and Fox treated him in South Carolina.  His story sounds vaguely familiar.  Stop me if you’ve heard this before.

Flashy African-American dude with gigs at prestigious institutions gets hired by a bunch of solidly middle class, no-nonsense, Minnesota-type liberals.  They’re thrilled to be adding to the diversity of their lineup; he thinks he’s doing them a favor.  Turns out he’s an “idea rat”, not a workhorse, he’s considerably more conservative than they realize, and he has a history of lack of respectful treatment of women.  They would have known this if they had bothered to check out his background a bit more thoroughly but they’re blinded by their instinct to do good or fear of looking unfairly and tastelessly bigoted.  The staff and management try to accommodate his quirks and his moonlighting for their arch enemy.  But after half a decade, it’s just not working out.  They try talking to him but whenever they try to rein him back in, he starts accusing them of racism.  Everything is racism to him.  Racism, racism, racism.  So, they sit and wait until he royally fucks up in some spectacular way and then they fire him.  And the ones who fire him who end up losing their jobs in a firestorm of conservative vs liberal rhetoric- and accusations of racism.

It’s either a misunderstanding of worldviews or it’s a clever, common strategy to accuse your detractors of the most vile, prejudicial instincts in order to get what you want.  Too bad it bit him in the ass in South Carolina.  I almost feel sorry for the guy.  But he took the bait from Fox News and they own him now.

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I’ve been following Jeff Jarvis’s Tweets from Davos, Switzerland.  He snarked this tweet late yesterday:

jeffjarvis Jeff Jarvis

Now in the more fun part of #WEF: brainstorming sessions. Surprising that execs will play.

Jeff seems astonished that there is still no sense of responsibility among the uber rich.  They either don’t realize or callously don’t care about all of the misery they’re causing.  Or, maybe it’s all part of the plan.  What strikes me as odd about the very rich is that it seems like they live in a California-esque paradise of self-esteem programs.  No one has ever told them what stupid, selfish excuses for human beings they are.  They’ve never had any “character building” experiences.  You know the kind?  Whenever you needed something really badly, like a college education, and your parents didn’t have the cash to at least keep you from starving, they always said it would build your character?  I should have a rock solid foundation of character by now.  Not so the uber rich.  Their voices are “full of money” and they have no sense of guilt for running over people who get in their way.

jeffjarvis Jeff Jarvis

BofA’s Moynihan responds that bankers will bear their scars for many years to come. So will we all. #wef

Somewhere, I hear the world’s tiniest violin…

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The right’s boogieman, George Soros, says that if Mitt Romney is the nominee, there won’t be much of a difference between a Obama administration and a Romney administration.  The best shot Democrats have to retain the White House is for Santorum or Gingrich to get the nomination.  I happen to disagree with this.  Republicans, well, movement conservatives, will pull out all of the stops if Gingrich gets the nomination.  They want to win and all of the misery of the past three years will be dumped on Obama, some of it for good reason.  He squandered his opportunity to drag the country leftwards to the middle when he first took office and had a filibuster proof majority.

And why did he fail to do that?  It’s because he doesn’t believe in it.  He told you on Tuesday night that he was a moderate Republican.  He’s been saying that for four years now.  His heros are Ronald Reagan, Teddy Roosevelt and Abraham Lincoln.  Doesn’t anyone ever notice that he doesn’t cite any Democrats as his role models?  Well, for one thing, no one believed that crap about him being the second coming of FDR so he had to drop it.  I think that forcing him to actually say he is a Democrat supporting strong Democratic values is physically and psychologically painful for him but I encourage the doubters to try.  Try to make him say something nice about LBJ or Bill Clinton.  Watch him flinch.

Anyway, Soros says he’s worried about the Supreme Court.  I’m not too worried.  I suspect that Ruth Bader-Ginsburg will announce her retirement before the election and will be replaced.  That leaves the composition of the court stable.  It would be different if Alito or Thomas or Kennedy stepped down but for some reason the Supremes have a history of living to a ripe old age whether we like it or not.

Here’s the rest of Soros’ interview from Davos, who, by the way, is also suffering from the failure to imaginate any other contest than the one between the Republicans and the Republican disguised as a Democrat. There are simply no other alternatives, like, replacing the Republican running as a Democrat with a real Democrat. I’m beginning to think that Soros is the one playing 11 dimensional chess here.:

Monday: Billionaire Biologists

It is by will alone I set my mind in motion.

The NYTimes has an article about the world of D. E. Shaw quants and an Larry Summers.  Louise Story, who wrote the piece, doesn’t go into details about what it is that Shaw’s group does exactly and, to be honest, this is really a job for someone like David Kestenbaum, the Harvard trained physicist turned financial guru at Planet Money (Hint, hint).  But I do know a smidgeon about what Shaw’s group does in the pharma field and at least one of my former colleagues was approached by someone in finance like Shaw more than a decade ago.  She was a physical chemist working on a program that did sensitivity analysis.  The math would make your eyes glaze over because it’s all eigen this and Green’s functions that and stuff I’ve forgotten long ago.  Basically, her program would be able to track an amino acid in a protein and determine how sensitive it is to its environment.

Now, in the pharma industry, this stuff belongs to a type of computation called molecular dynamics.  We start with a 3D representation of a protein in a solvent, usually water.  The model is really just a set of coordinates for each atom in the protein.  There are parameters for each atom that account for bond length between atoms and springiness and intermittant bonds between atoms called hydrogen bonds.   A simulation can be run in several ways.  One of the most common is something called simulated annealing.  That is, heat is added to the system, the protein absorbs this heat and starts to move.  The system is allowed to equilibrate and a trajectory is calculated for a series of time steps.  After the simulation is run, you can concatenate all of the time steps together and run them like a movie.  What you get is something like this (actual simulation starts at about 30 seconds in):

In the animation, the purple and red springs are called α-helices and the yellow ribbons make up a β-sheet.  These are relatively stable secondary structures of the protein that come together to form the tertiary structure of the protein.  They wiggle and shimmy but don’t move much.  The most interesting part of the dynamics run was at the right of the screen where there is a “loop” that has the greatest movement.  It is the action of the loop that is of primary interest to the researcher.  What does it do?  What amino acids around it does it impact and can we tell from its movement what its function is in the protein?

Now, these are all cool and groovy models but there are some things about them that make them tricky.  First, the system is only as good as the parameters you give it.  Some simulations run in cellular membranes that add an additional level of complexity.  If you don’t account for absolutely everything, the result can be waaaaay off.  Second, the simulations suck up a lot of memory and I/O and, up til now, it’s been hard to find systems that will let you do more than a very short span of time.  Luckily for D. E. Shaw, Moore’s law has allowed the area to grow a lot lately.  Also, in the bio end of his business, he has contracted with one of the chip makers for ASICs, or custom made processors, that he is using to build a massive cluster with more than 1000 nodes.  Molecular dynamics has been around for a long time but until Shaw’s latest programs came out, it was a pain in the ass to set up and run more than a few time steps.  His latest molecular dynamics code is called DESMOND and it is commercially available. My site is just beginning to use it, albeit without the fancy cluster.

So, what does all of this have to do with financial markets?  Well, I *guess* you could think of the financial world as a giant protein and if you can figure out what the parameters are and how much heat (money?) you are putting into the system, you could calculate which parts of it are most sensitive to change and then place some bets on that portion of the system.  For instance, you might be able to predict what effect the stimulus package is going to make on the economy and which industries will be most sensitive to that stimulus.  Or, maybe you could calculate the TED spread or LIBOR or a zillion other indicators.   As I said, this is really a job for David Kestenbaum so let’s hope he has a Planet Money segment on it soon.

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