Students Cheat. Yup They Do.

I know, I know, it's appalling that kids are still cheating nowadays. (Isn't that what the interwebs was supposed to solve?) Well... kids are definitely still doing it according to this article in The New Yorker. It talks about a cheating ring at Stuyvesant (read: hoity-toity, very prestigious high school) in New York City that involved 140 students. At the center of the maelstrom is Nayeem Ahsan, a 16 year old kid from Bangledeshi immigrant parents.

Being first generation, he talks about the pressures that are out there for him to do well. Even after getting into a super prestigious school, there is continual pressure for him to do well at said prestigious school so that he can go to a good college. Once in a good college, he hopes to get a prestigious education so that he can land a prestigious job and .... well, make lots of money.

Nayeem's argument is that studying was pointless because studying was more was not going to make much of a difference. Sure, maybe it could help, but "there are things I'm bound not to know". His argument, therefore, was that studying, when compared to outright cheating, was more effective because his end goal was high scores, and cheating gave him more incremental value per unit.

When I first read this article, I was angry. Angry because I've grown up around kids like Nayeem my whole life-- kids who have been told the "right" from the "wrong", but seemed so disillusioned or so disoriented that they didn't seem to believe it. Scarier still, I worry that these kids did believe it, but just didn't care-- the ends justify the means, right? As a hard worker myself, I've been told I'm smart. Sure, I'm probably smarter than your average bear, but I'm by no means a genius. I work really hard to learn the things I learn and I put a lot of time into these things. People who cheat make my work incrementally worth less because they get the same results with less time. It makes the whole "market of smartness" worse off through false inflation.

But then I started thinking about it more. And I get it. I still don't agree with what this kid did, but I understand it because this type of behavior still goes on. It even happens at school now. There are simply too many things to do and too little time. There inevitably will be people who have prioritized, say, recruiting, over classes because our main goal right now is getting a job. These people sometimes will take fewer classes or easier ones to compensate for the lack of time, sometimes they won't. Those that won't usually have to a.) accept that they're not going to do as well as what they're used to or, b.) they cheat.

I argue though that the true crux of the problem though isn't that it's inherently wrong (which it is though, by the way), not that it's "ruining it for the rest of us" (which it also is, by the way), but that it's really more of an indication of the type of students that we're creating. By placing so much pressure on our students, their perspective of what's "most important" gets skewed. As it becomes more and more disoriented, they begin to simply try to get by, instead of doing what they know they should be doing. On one hand, we're creating highly effective people in the skills of prioritizing, organizing and coordinating. It takes a lot of work to cheat I'd imagine (you'd need to find someone who knew the answers, etc.). On the other though, we're creating a whole new generation of "super achievers" that can't accept that they can't do everything and that they need to prioritize. Is that a generation that we want to empower with prestigious jobs and schooling? I'm not so sure.

TechnicalogiVentures (Bar & Grill)

I'm the bartender. My bar is a simple one named, somewhat non-sensical word. That's how you know I'm legit. I sit, I watch, wipe some cups, give knowing smirks when required of me.

Across the room, PayPal is a little gun-shy-- coming off of a small dating rut from the PayPal Here and layoffs, she's definitely ready to get back in the game with record mobile sales this holiday season thus far. Google and Apple are peacocking (look this up if you don't know what this means, it's a real thing...and hilarious that it's a real thing), sidled up by the bar in their hoodies and wayfarer sunglasses. Google is proudly showing off their new functionality for Google+, the fact that Barack Obama used Google Hangout (true story) and their general awesomeness high after finishing a year where they got big props for their Hurricane Sandy Emergency System (unfortunate cause, but fantastic response) and their winning (?) battles against their many legal suits. Maybe their Google Wallet hasn't been perfect, but they're tweaking it--adding new functionalities like P2P payments (much to PayPal's smugness). Apple released the iPhone5 to the delight of Appleheads everywhere....and to the sadness of the Apple Maps maker (really? You were "Surprised by the popularity of the maps function"?) / happiness of AOL's Mapquest (yes this still exists). Nevertheless, they still pin their iPad Mini's to their shirts, and play with their drinks while chatting with their "its complicated" significant other, Intel.

Microsoft is still in the dating game. Known for being one of the most exclusive bachelorettes (c'mon, I have to be gender neutral), Microsoft has long been a powerhouse and is warily testing out the waters with its new Surface tablet to complaints about it being too highly priced but also to cheers of it being filled with potential in bridging the gap between work and play.

I mostly console Groupon as he sits, hunched over his whiskey sour at the bar. He's had a bit of a rough year. His IPO didn't really work out like planned. Launched late last year, it was too be a match made in heaven--I mean, it seemed so good at first! IPO was The One, it was going to change the way that he could business, and for good reason! In the increasingly saturated market of e-couponing/ e-offers, Groupon is probably wishing they took Google's offer now that it's clear their business model needs a re-tweaking. Groupon has been reduced from eligible newbie to disheveled hipster-type, with his CEO under fire for plunging stock prices going so far to say that he would fire himself if he ever thought he was the wrong man for the job.

I just don't know how to help the guy honestly. I mean, if Restaurant.com is even getting in on the local deals business with their Double Deals, it seems like the whole world just wants to be single and try to make it on their own. Restaurant.com has a compelling story on his own, since he can leverage his existing market share that he's achieved through his restaurant coupons, but that just means (unfortunately) just more competition to pile on-- on top of the Gilt City, LivingSocial, HomeRun and LifeBookers of the world.

Maybe this is the time for the couponers to look at some of the non-central players that are also here. There's Visa who's hanging out casually shooting pool-- with their new e-commerce authentication system (driven by real-time risk analysis) its a true signal they're looking forward to more e-business and on-the-go quick payments. Since Groupon has also moved into that space, it could always be a good partnership-- sipping wine in front of a fireplace, discussing a right-time, right-place offers/payment solution.

Or maybe look at other relationships for inspiration. Amazon Payments just inked a deal with FailSafe Payments for merchant processing. Maybe not the sexiest relationship-- I mean, Failsafe is no Italian supermodel. But it's a stable one-- they have complementary interests, AND it provides substance to the relationship. Amazon gets more of that processing pie, FailSafe gets a little more big-name branding. That one might just work out.

I heard there might be some new eligible bachelors/bachelorettes coming on the scene-- a crowd-sourced fraud detection system, NCR and Ingenico are strong on the prepaid payments front (always an overlooked watering hole) and Square cut their pilot with New York Taxis short, so maybe they're looking.

Not everyone can be lucky in love. So don't give up hope yet, you lonely and looking. You'll find someone.

Until then, I'll be here to lend a sympathetic ear, talk it out. Maybe give out some hugs. Let me fill up your cup.

Update: Poor Groupon. Google just acquired a Incentive Targeting, and Mason finally caved to an interview with BusinessInsider yesterday, which people are dissecting as we speak. Poor PayPal! Visa has been seen about town with Bank of America and RBS to tout V.Me.

The Effect (?) of Financial Markets on Music

I wish I could say that I was some uber-genius who spent my entire day looking at macro market trends and determining what the next big value stock pitch or internet technology trend was going to be. In fact, I am usually running around, counseling undergrads about their lives, discussing my complete clueless-ness with my own classmates and trying to keep up on homework while balancing extracurriculars and work.

And then, I think strange things that distract me sometimes. Is there a correlation between the financial markets and music? How could we measure this? What would it mean? What would I assume? How could I look for a pattern?

My hypothesis is that there is, I imagine that the easiest way to measure this is by BPM (beats per minute) and that I hypothesize that while music overall has gotten faster (higher BPM), music is slower in downturn-y times.

Let's see what happens.

So I found some background information around the economy.

Key Take-Aways: Oil usually increases in price when the economy is in a recession/about to go into a recession. During the recession, these high oil prices will begin to trend back down to more "normal" levels. Recessions in the US were in 1973-'75, 1980, 1981-1983, 1991, 2001 and 2008-2010.

 

And then I got a little more information and found out about bear markets...

Key Take-Aways: Bear markets! These happened in 1905-1920, 1931-1944, 1965-1980, 2000-2005 (no information is given after 2005).

Then I looked up GDP growth in the US on Google-- GOD I LOVE GOOGLE.

Key Take-Aways:GDP growth is where you would expect it to be-- with the dips and mountains in all the right places...

Then I got a little excited with the Google tool and added in Asia, Europe and Latin America (red, orange and green respectively).

 Yup, that made sense too.

So then I tried to put together my own knowledge of music history based on the interwebs research, which goes a little something like this: In the beginning, there was vaudeville and Oscar Hammerstein in the early 1920s. This was the age where blues and jazz emerged into a brand new world. By the 1930s, the party had gone into full swing (har har har) with big band swing. 1940s saw the emergence of bluegrass and country, along with the beginning of "Appalachian folk music" (seems very probable that this could be one of the muses of our current-day "indie rock". Appalachian folk music was significant because it really increased BPMs and probably heavily influenced the be-bop movement also in the 40s that held some of the records for BPMs (could hit 300). 1950s slowed things down a bit with gospel/soul music with some greats like Mahlia Jackson, but also gave us some of my favorite songs from Dinah Washington and Aretha Franklin. This age was also the emergence of Doo-wop (which was fantastic) and we saw songs like Frankie Lymon's "Why Do Fools Fall In Love". 1960s was about freedom and experimentation, where we saw a brief stint of "psychadelic" rock that transitioned into what we now refer to as "rock" (The Beatles, The Who, Rolling Stones, etc.". 1970s was about love and peace yet we got heavy metal during this time from the likes of Led Zeppelin and Black Sabbath, as well as a stronger emergence of punk rock, which began to emerge in the 1960s.

In 1980s we were introduced to Ladies Love Cool James, also known as LLCoolJ, along with NWA and the beginnings of hip-hop and "gangster rap". The 90s were filled with hair metal (a new branch of the rock family tree), so we saw Nirvana's "Nevermind' album, along with the Notorious B.I.G. The early 2000s especially were inundated with bubblegum pop with the likes of Britney Spears, Backstreet Boys and N'Sync, but it also began to lead into some more "alternative rock" with The Hives and The White Stripes, which gradually became "indie rock" with Franz Ferdinand and Modest Mouse. Starting in 2010, we've seen a heavy emphasis in dance music, particularly with a lot of latin flavors, which has emerged as a  mix of "dance pop" (Cascada, Pitbull, Ke$ha), "dubstep" like Skillrex and a re-emergence of "house" or "dance" music. Although house music actually originated in Chicago (what what!) in the 1980s, it re-emerged in a strong way in the (later half of) the first decade of the 21st century. (I would say 2008-ish onward.) I think it's safe to say that the world is now a better place because of the contributions of David Guetta, Afrojack, Deadmau5 and Kaskade.

I found the average BPMs of these popular genres of each of these decades and plotted them, but I needed to account for some decades where multiple "popular genres" emerged, hence there's BPM 2s and 3s...The outliers here: 200 in 1940 was be-bop (one of the highest ever), 120 was bluegrass, whereas 75 was country music. Additionally, the 85, 90 and 120 BPM blips in 1970 were heavy metal, outlaw country and punk rock.

At first glance, it kind of makes sense. Although BPM did not tick up as quickly as I thought it would, the slowest BPMs were actually always interbellum times. The highest BPMs, similarly, always occurred right after a financial downturn, which is not to say that downturns always resulted in low BPMs. Music tended to fragment (split to have many different emerging genres) during the 1940s and 1970s-- strong bear markets. In the 1940s, we had an ending war, soldiers coming home and inflating the once-low unemployment rate, an economy under stress and a recovery from a mini recession in 1937.  The 1970s was also a time where the nation was torn. Although the Paris Peace Accords stopped US participation in the Vietnam War in 1973, our society was still torn. The 70s was a time when a President and a Vice President resigned under threat of impeachment, and the US economy entered the worst recession that it had seen in 40 years in 1974.

 I looked at it and wasn't satisfied so I looked at some more data....and looked at GDP vs. personal consumption expenditures to see if that would give me additional data.

And then found this research paper ("Trends in BPM in Popular Music") that had a more accurate method of determining average BPM. This paper consolidated the top songs from each decade (instead of musical genres) and allowed me to determine a more accurate BPM.(Red dots are average BPM per decade.)

And if we cut this to pair it up with the Google charts:

Looking at the average BPM per decade (green dots), it seems as though there could be an indicative story here. Although low growth rate resulted in big changes in BPM 1981, I think the jury is still out as to the amount of direct correlation here.

Regardless, interesting to look at...and this is what I do during my days when I get bored.

I know...I'm a weirdo.

The Rise (& Fall?) of Empires: PayPal

As much as it hurts me to say it, I think we may be at the end of an era. Once a behemoth, PayPal is now struggling to stay pertinent, relevant and useful. Now, PayPal sits at a turning point. Its move forward strategies will undoubtedly hold the key to its success and potentially, its existence.

PayPal: Oh PayPal! How I love you! Your quirky start-up attitude, even as you grew into a tech adolescent. Your awkward stage when you grappled with the acquisition of multiple subsidiary companies by your motherland (eBay)-- some of which were incredibly successful (Bill Me Later, StubHub, RedLaser) and some of which are still percolating to produce a return (the much hyped Zong). You even remained stable in the midst of the selling off of your brother-from-a-different-mother, Skype (sold to Microsoft in late 2009).

Then a turning point happened, mobile payments spread onto the scene quickly. The geekers and the gawkers were beside themselves with the possibilities-- oh the countless opportunities!!-- that bluetooth, RFID (and its cousin/child NFC) held. Pay and go stickers were all the rage. You watched as your brethren, Bling Nation, attempted to make the sticker play by tying it to users' PayPal accounts. By 2011, Bling Nation had ceased operations. I understand what you must have been feeling-- everyone you thought would be around with you into the future were slowly falling by the wayside. Maybe you were a little gun-shy after that-- totally understandable! As your parent company publicly said that they didn't see the future in NFC, you steadfastly continued moving forward.
You were still cautious, curious even, as you proceeded. You needed something that would allow you to make that quick branch between physical and digital-- a way to capitalize on consumers in their pockets and in the store so that they could access you wherever they were. So you struck a deal with Discover to leverage their terminals to access the PayPal system so that you could get in on some of that easy terminal money. You were smart and accepted you were wrong in underestimating the volumes behind mobile payments. Now, you could have the best of both worlds! You can still have mobile capabilities and leverage an existing players' terminals-- it was genius! Not to be stopped in your slow, very humble expansion (maybe you're just trying to fly under the radar), you quickly established your own terminals in Australia, with fees that would be "on par" or with a "slight premium".

Your Future is still uncertain, but one thing is for sure, it's a good thing that you didn't bail out completely of the mobile payments game, considering you hit record mobile transaction volumes during the December 2011 holiday shopping season. However, be careful my dear friend! Customers seemed to be pretty surprised by the ease of use of your new terminal systems in Australia, but few customers knew it existed (it was rolled out in small businesses) and even fewer were using the check-in features that you had built into the system. Beyond low consumer awareness, you're playing with fire with those potential "slight premium" fees! In a world where we've already seen the cannibalization that results from Square (to your PayPal Here), the Google Wallet (to your traditional web-based payment model) and the hype around Apple Payments occurring through Bluetooth (poor Bump! What happened?!)

I wish you the best as you go forward into the great unknown. But be careful! In order to maintain your supremacy-- your "tech titan" card that gets you into that special club where Google shoots pool and Apple watches games on the big screen--you have to put more work into being a leader. Although your attempts so far have been strong in terms of thinking, you have been overly cautious in not wanting to have a "first mover" mentality. Your Pay Here happened after Square, but I won't fault you for that! Lots of folks decided to jump on the bandwagon after Jack Dorsey took the hit for market testing that crazy idea. But Google beat you to the punch in introducing a wallet! I know, I know, you don't believe in the wonders of the wallet, but bottom line is that Google made it into physical stores before you. How could this be? Play to your strengths my dear friend, push hard in the online space, but begin to branch into those physical locations before Google takes all of the physical footprint. Your direct relationship with merchants, particularly with the smaller ones (which, by the way, account for the greatest volume of transactions), should be your advantage. Making it easier for them might require more investment on your part, but it doesn't mean that it won't pay off in the end. After all, PayPal is "The Safer, Easier Way to Pay".

"FORWARD!" He Says

 

PIMCO forecasts global growth of 1.75 percent in the year through September 2013, weighed down by a euro-zone recession and a slowing pace of expansion in China. Repeatedly, they have been been warning that all of the political/fiscal hoopla that has been going on has much more far-reaching consequences than what people are expecting. With all of the fiscal theater that is going on, the US is contributing to a larger pool of volatility and uncertainty—in such a fragile state, it’s quite possible that not only will politicians spook investors, not get much work done and ultimately do what amounts to twiddling their thumbs and we slowly lumber toward a financial sinkhole (to the tune of $600B), but it also (from a macro perspective) increases the probability that the US could get downgraded.  Granted, they said this before we (as a country) knew who are new president is going to be, but with the nosedive of stocks that occurred after Obama was elected, I think it’s clear to say that the Republicans are not the only people in this country that are reeling from election results (or, on the flip side, it shows us just how integrally political parties are intertwined with our financial market system). 

So what? What does this mean? I don’t want to make this post all about “How I Love Thee PIMCO, Let Me Count the Ways”, but it does ring true that several of the publications that I’ve read from PIMCO signal to me (as a personal investor) that we’re quick-approaching a cross-roads. 

In Bill Gross’ investment outlook for November, he talks about Flavor Flav, genies, Obama, Romney and Chris Berman from ESPN (yeah, he's that awesome). But he also hits on a metric that I had never really thought of before when I thought about the economy- the net national savings. I’ll be honest—I didn’t know what this was—(he does a good job explaining it in his outlook) but it basically means “the extent to which the US (corporations, government, households) are saving in order to offset the depreciation that comes from our existing investments”. (Un)surprisingly (?), it has been decreasing for a long time now—with a few bumps but overall downward trending since the 1970s. This means that, overall, we’re making less real return on our investments than what you would think. The government has released a lot of funding to improve the economy, and although this has elevated asset prices (yay! The stock market is improving!) it isn’t actually improving our overall economic outlook.

Why is this important to me? Well, what if, hypothetically, you were in business school and you knew that you had left a lucrative job in order to define and pursue your dreams. If the economy is not setting itself up for sustainable growth and improvement over time (for a while now, it’s just that I haven’t caught it because I wasn’t an enlightened business school student)—you’re a little worried.  Across the hallways at Booth, I’m already hearing the screams of students—even louder than those of i-bankers the day that UBS announced their massive layouts. As they rush past me, clutching their name badges and the tear sheets about all of their “dream” and “safety” companies, their thoughts are clear on their faces-- Forget about the instability in the world economy! This is beginning to affect me for real now—I might not get a job! I echo their fear. The nation is in a highly perilous state. Politicking has done us no good, and now that we have signed on for another four years of Obama, there are high hopes that this means change. “FORWARD!” he had promised. We’ll have to wait and see. In the event that I can’t find a job, maybe I can volunteer for the next election campaign—the economy may go to hell but it seems like politics stop for no one.