dermot: October 2008 Archives

I remember giving a presentation on "The Knowledge Economy" a few years ago when one of the left field questions was on "The Attention Economy"    described as

...in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it" (Simon 1971, p. 40-41).

Pop Matters describes this in more detail

We find the promise of free things hard to resist (even when a little thinking reveals that the free-ness is illusory). So when with very little effort we can accumulate massive amounts of “free” stuff from various places on the internet, we can easily end up with 46 days (and counting) worth of unplayed music on a hard drive. We end up with a permanent 1,000+ unread posts in our RSS reader, and a lingering, unshakable feeling that we’ll never catch up, never be truly informed, never feel comfortable with what we’ve managed to take in, which is always in the process of being undermined by the free information feeds we’ve set up for ourselves. We end up haunted by the potential of the free stuff we accumulate, and our enjoyment of any of it becomes severely impinged.

So  we need more Bit Literacy

Via Brad DeLong http://delong.typepad.com/sdj/

The Porsche-VW Corner of 2008: Richard Milne in London: Volkswagen’s shares more than doubled on Monday after Porsche moved to cement its control of Europe’s biggest carmaker and hedge funds, rushing to cover short positions, were forced to buy stock from a shrinking pool of shares in free float. VW shares rose 147 per cent after Porsche unexpectedly disclosed that through the use of derivatives it had increased its stake in VW from 35 to 74.1 per cent, sparking outcry.... [T]he sudden disclosure meant there was a free float of only 5.8 per cent – the state of Lower Saxony owns 20.1 per cent – sparking panic among hedge funds. Many had bet on VW’s share price falling and the rise on Monday led to estimated losses among them of €10bn-€15bn.... “This was supposed to be a very low-risk trade and it’s a nuclear bomb which has gone off in people’s faces,” said one hedge fund manager. As of last Thursday, according to consultancy Data Explorers, 12.9 per cent of VW’s shares were on loan for investors to go short and bet on them falling – the highest percentage of any German company.

So it was "supposed to be a low risk trade". Serves the buggers right.