Double Blind

Did anybody notice that Wired’s 2004 Best Games you haven’t played doesn’t even include a single game playable on the computer?

Other than bleeding-edge technology first person shooters and MMORPGs, it appears the industry is destined to end up on consoles. One wonders whether you’ll see Duke Nuke Forever released on PC. I’ve been waiting for that game to be released since freaking 1998!

On a more serious note, whatever the next version of “X-Box Live” is should be sufficient to kill off the PC gaming industry entirely. My guess is around 2007. Any industry executive with half a brain already has this figured out – consoles can now be packed with enough cheap hardware to render PC gaming obsolete.

There are laws of unintended consequences. Since games were the only real reason why there was such demand for high-end hardware, it seems likely in the future that new technologies will be not be exclusively devoted to increasing the number-crunching capacity of processors. Since the consumer sees no discrenable difference between a 1.8 Ghz Pentium 4 vs. a 3.6 GHz chip, it seems very likely that newer high-end chips will be prohibitively expensive (thousands of dollars) as they will only be used for CPU-intense applications. The good news, however, is that laptops (or the equivalents thereof) 10 years from now should be just as expensive as X-Boxes plus the price of a display unit.

Yes, I know what I am saying: Moore’s law has no chance over the next decade. I have no doubt that we can technologically pack double the performance on a chip every 18 months, but I have serious doubts whether we can do it at the same cost.

Today I saw the first advertisment on BCTV smearing Gordon Campbell. I didn’t quite catch the organization that was responsible for the advertisment (whether it was the NDP or some Union organization, nonetheless they’re both the same), but it’s undeniable that the election campaign has started. The content of the advertisment is the same stuff we’ve heard over the past few years – increased class sizes, poor quality of healthcare, etc. However, the only new thing they mentioned was that the government was spending sums of money on these “BC is the best place on earth” commercials that have been on the air for the past month.

The NDP are probably miffed that the BC Liberals are spending their advertisment budget on feel-good advertisments, something that the NDP did themselves when Glen Clark got elected in his genius campaign of 1996. If the BC Liberals are smart, they’ll keep their bullets in their guns until mid-March, then make a spending announcement every day for a month and then the campaign starts officially on April 19, 2005. The election is on May 17, 2005.

So my initial outlook for the campaign strategies of both sides is that the NDP is going to run a “we’re not Gordon Campbell” campaign, while the BC Liberals are going to do a “Look what we did, BC is back in action”. It’s interesting that as of yet, the BC Liberals haven’t attacked Carole James, whom I think is such a poor selection for leader that it will cost them the election although she’ll have no trouble winning her seat in Victoria. It could be perhaps that the BC Liberals are waiting for the NDP to attack Gordon Campbell’s credibility concerning his drinking and driving charge in Hawaii. Both leaders seem to be able to preach to their own choir, but do a piss-poor job of reaching out to the electorate that don’t perennially vote NDP or Liberal. On the basis of the 2004 federal election results, one can make some extrapolations on the provincial results, but I am going to keep my mouth shut since I intend to make some money on the UBC BC Election 2005 Futures Market.

TransLink fare hike penalizes frequent transit users the most by Roland Tanglao got me started on this topic. Another reference is Translink’s press release which illustrates the fare changes. Finally, a must-read for those interested is the discussion paper (350k, .PDF).

Roland expresses his displeasure at the fare increases, as it appears the bulk of the increase was directed towards monthly pass purchasers.

Translink discusses this on page 12 of the discussion paper:

One of the issues emerging with the recent policy of making passes �cheaper� is the dilemma it presents. On the one hand, as is clear from recent ridership trends, cheaper passes lead help to maximize transit ridership. However, on the other, they may tend to dilute revenue. For example, in 1996, a large number of riders purchased monthly passes priced at around 35-36 times the equivalent cash fares. In 2004, it is reasonable to assume that those same riders would still be prepared to pay the equivalent of 35-36 oneway fares for a monthly pass, but now pay the equivalent of around 29-31 times the cash fare for a pass. As a result, while the lowering of the price of passes to attract less frequent users to buy passes has been successful, to some degree, it may have diluted potential revenues from other riders. Again, this highlights the challenge and trade-offs inherent in balancing both ridership and revenue goals.

So this fare increase decision by Translink is strictly to increase revenues, and not to increase transit ridership. They are taking a guess that people are still going to purcahse the monthly passes instead of the faresaver (booklet of 10 pre-paid transit fares) tickets.

Let’s pretend that you make 40 trips a month using transit. You had three choices: pay cash ($80/month), use faresaver tickets ($72/month) or pay for a monthly pass ($63/month). The decision was really easy.

Now, with the fare increases, you have three choices: pay cash ($90/month), use faresaver tickets ($72/month) or pay for a monthly pass ($69/month). The decision is a little more difficult – if you’re going to be sick/absent for one day per month or if you have no need at all to use the transit system other than when you commute to work (or whatever you do to satisfy a 40 trip/month requirement), it might be a marginally better decision to use the faresaver tickets. Chances are, however, that regular translink users will still continue to purchase the monthly pass at the less advantageous price. This is exactly what Translink wants – they’re giving two options that are nearly priced. It will be interesting to see whether the usage of faresaver tickets (13% of total revenues compared to 44% for month passes) will increase over the next couple of years.

I can easily give one prediction, however: collections from cash fares will decrease. There is absolutely no reason for anybody to use cash fares while riding on Translink. I usually keep a booklet of faresaver tickets handy on my desk despite the fact that I take my car to work.

The question I would have for Roland is this: are you still going to continue purchasing monthly passes? If so, it appears that the fare increase was structured correctly. Somebody’s got to pay, and his analysis was correct – the people that will be paying for this fare increase will be the monthly pass users of Translink. The expected net collections out of this increase will be $15M a year.

Incidentially, this is not the only way you will be paying for transit improvements in the Lower Mainland. In addition to the $15M worth of fare increases, there will be an increase of $26M in the form of a “parking tax”. This will affect the prices of goods that you purcahse at any business, whether it is from groceries to consumer electronics since businesses will have to recoup the costs of this tax. In addition, property taxes will be increasing $58M annually, so this will affect your yearly expenses if you own your place, or if you are renting, you will be paying for it in increased rents (do you expect the land owner to chew up the costs himself?). So as you can see, although Translink users are directly paying for 15% of transit enhancements, the whole public gets to pay for 85% of it even if they don’t use the system.

Since there are 2.2M people living in the Greater Vancouver Regional District, that amounts to an indirect contribution of $45/person to Translink each year. Not a bad take for a body of unelected people.

Here is Richard’s reply to my prior article on Christmas.

I guess my take is that the word “Christmas” in our society over the past 30 years has long ago lost its religious connotation and can be freely said by athiests, agnostics, muslims, hindus and christians alike without implying that you believe (as you put it) that “the idea of a birth of a boy to a virgin woman” was all real. What’s the point of changing the cultural jargon around? There’s no point unless if you want to cleanse the historical origin of the word. Should we stop speaking English and use something more neutral like Esperanto?

Over the past few years the word “Christmas” has been systematically removed from every piece of media I have seen. Apparently saying “Merry Christmas” is politically incorrect. We’re now supposed to be saying “Happy Holidays”.

At the company I work for, the year-end Christmas party is now a “Holiday Party”. This happened last year.

Walk into a Hallmark store and half the cards you can buy are “Happy Holidays”. Five years ago, they were all Christmas cards.

All the fliers and advertisements that come in the mail don’t mention the word “Christmas”. Heck, you look at the Future Shop‘s website and they have a “Holiday Gift Guide”.

Now the latest morphing of the language involves the “Christmas Tree”. That’s now out – you’re supposed to say “Holiday Tree” instead. Prediction: The next to convert will be the Rockefeller Center Christmas Tree (New York City) which will inevitably become the “Rockefeller Center Holiday Tree”.

What is the mystery here? Are companies afraid that there is going to be this huge backlash of angry people storming the walls if you mention “Christmas” anywhere? Are they seriously afraid that they’ll lose business? Are politicians afraid they’ll lose votes by mentioning the C-word? I’m not at all religious and I don’t find anything wrong with it, but apparently somebody out there does. I think it’s pretty messed up – it should be obvious to everybody in Canada and the USA that at this time of year we’re celebrating Christmas. The meaning can vary, but the name shouldn’t.

A few days ago I arrived back from Los Angeles and it’s good to be back in Vancouver for the Christmas holiday. I didn’t have any more Canadian cash than a couple bucks in my wallet, so when I got home I walked to the bank machine at my local credit union. The ATM network they use is called The Exchange, which is a partnership of miscellaneous financial institutions bringing ATM machines all over the place. Normally I use my ING Direct card (which goes through the Interac network and ING pays for the transaction fee) without any difficulties. I’ve been doing this for the last two years, when ING Direct switched having their ATMs from every Canadian Tire in the province to going with the Interac network. I was surprised when I discovered when the ATM asked me to confirm an extra $1.50 service charge. They must have implemented some sort of user fee. I used my regular bank card instead (where they charge your account a $0.50 ‘service charge’) and made the transaction.

Now, a $1.50 or even a $0.50 transaction fee might sound like nothing, but over time it adds up. Typically if you pull out cash every two weeks, that means you have a minimum of 26 transactions, or roughly $13/year worth of transaction fees. I’m guessing you have about 10 million Canadians that are typical bank users – they pull out cash from the ATM every couple weeks and spend it. This amounts to $130M, minimum, in banking fees strictly from the ATM network. Not a bad haul. I know that in the USA, banks of made US$2.2 billion from ATM surcharges, so the number I just quoted was probably conservative as Canadians are more aggressive consumers with their bank cards.

The problem I have with this is that ATMs were created to replace the cost of labour of having a human teller sitting around idle for most of the day, not to mention the associated costs of having a physical branch. This is why ING Direct can compete in Canada – they only have four centres in Canada. Paying a teller $12/hour costs a bank $150/day for each teller they have sitting around. $150 is what it costs to keep an ATM serviced (filled with money, telecommunications and capital cost of owning) for a quarter of a year. The incremental costs (i.e. cost per transaction) is nearly nothing once you’ve set the machine up.

So banks are making money in multiple ways from retail customers – the first step is when you deposit money into them, you are giving them a short term loan. The bank can them immediately turn that money around and lend customers money and profit from the interest rate difference. The another way is through direct charges, such as service fees. Inevitably, banks don’t turn out much of a profit from retail customers, but the subsequent spin-off businesses (the investment, brokerage and mortgage arm) is where the lion’s share of the loot.

You might see some banks offering “keep a balance of $5000 and you don’t have to pay any service fees”. Keeping a balance of $5000 actually makes the bank more money since a balance of $5000 can be turned around on the marketplace and earn them at least 4% ($200/year), which is far above what any marginal transaction costs the user would have on their ATM network. Ditto to those $11/month limited usage plans which cost the bank nothing to fulfill. $11/month is $132/year, which is a significant amount of expense considering what you get.

I absolutely hate the concept of having to pay a financial institution money to get back at the money which I lent them at dirt cheap rates. The only way you can get back at them, however, is by voting with what really matters – your wallet.

About a week ago, I noticed I was getting a larger volume of spam than normal. I’ve managed to whittle down my spam to one or two a week by keeping my primary email address hidden. My spam recently was increasing to two a day, always advertising Microsoft software (Office and Windows XP for ‘cheap’). Unfortunately, I discovered where the leak of my primary email address was – my RSS link was posting my “primary” email address as the author of this weblog. I’ve now corrected it to my gmail address, which has more spam protection than my current mail system.

So let this be a warning for you people out there – spammers will harvest the and XML tags of your RSS feeds to solicit software to you. Are there places where these virulent scum will not look for email addresses? At least they quit spamming my comments section of my weblog – I guess Greymatter is such old school to them that they’re not bothering to spam the comments here anymore.

Here’s an interesting paper that talks about the Riskless society.

People have to realize that elimination of risk comes with costs. The classic example are vaccines – they will kill a certain percentage of people that take them, but the vast percentage will benefit. If we pull vaccines out of the market (as the USA effectively has done economically as demonstrated this year) are we better off?

This reminds me of a situation that you study in philosophy class – you’re stuck in a cave with one other person and an 18 hour oxygen supply between the two of you. You can hear rescuers outside, but you know that it will be 24 hours before you can get rescued. Is it morally permissable for one person to kill another?

A good site that demonstrates the legal system’s ideal of a riskless society is at overlawyered.com. Lawyers typically sue companies that don’t live up to these ideals. This is very damaging to innvoation.

BC Hydro increased their rates by 4.85% for the year 2004. I was looking at the residental rates for energy and saw that it is currently CAD$0.0619 per kilowatt hour. This is dirt cheap – a typical 60 watt light bulb costs 9 cents to burn for 24 hours. Or you could bring up to boiling temperature 10 kilograms of tap water for 6 cents. You can get a job at McDonalds and work for a day, get paid 8 bucks an hour and be able to control more energy than what most could affordably do 50 years ago when you consider the impact of inflation.

However, whenever the price of energy goes up, one tends to look at how they consume power and see if it is cheaper to purchase something that consumes less energy.

I was looking into upgrading my computer system, which is running off of a dual Pentium 2 motherboard. According to some website that I can no longer find, the peak consumption of the processor was 28 watts. Since there are two in my computer, I would estimate the average consumption would be around 25 watts for the both of them since the load on my system is minimal. Adding in three hard drives and the other accessories is approximately 35 watts. So my computer system consumes the power of a light bulb. Over a year, it costs $32.53 to keep it running, not including taxes. What’s ironic is that the components inside are probably worth about this much if I auctioned it off on EBay.

Now let’s pretend I could buy a system with superior performance but takes up 20 watts of power instead of 60 watts. Let’s say this system costs $500 to buy. How long would I have to keep this thing running in order to break even? Ignoring time value of money, the answer is 23 years. It’s just not worth it for me to buy something that consumes less power even if I get more performance. Probably the best thing I can do in the interim is remove a couple of the smaller hard drives and the sound card. I won’t do that since I backup the data every two days in case of a physical drive failure.

It would be more likely that I get a new laptop a month or two after Xmas (when the old inventory goes on sale). I’ve already written that the marginal benefit of doing this is too small to justify a $1500 expenditure on a new laptop. It looks like, yet again, that I won’t be buying any hardware for the next 12 months. This is more for performance reasons rather than energy concerns.

Why is the BC Teacher’s Federation (the only union in the province that represents teachers in publicly funded schools) scared of marking standardized tests for Grade 10 students? Shouldn’t the students be more scared than the teachers?

I don’t see how tests can be “damaging to the students and the education system”. Is the BCTF leadership afraid that the province is finally trying to collect some metrics to ensure that students are learning something by the time they’ve reached Grade 10?