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Why MIT Is Not Willing To Unleash Real-Time, Dynamic-Purchasing Inventory Control Systems; Or The "Real" Reason For The Culling Of MIT's Billion Prices Project

Tyler Durden's picture


From Kevin Price

Is MIT willing to unleash real-time, dynamic-purchasing inventory control systems?

A graduate student playing around with a billion dollar price project has unwittingly stumbled upon the financial equivalent of the internet, and it was Zero Hedge where the implications of this financial search engine were reported first. The implications are enormous.  This could be what Alan Greenspan called "a once in a generation acceleration in productivity," but only if MIT allows widespread use. Instead it appears that MIT is going to keep it secret to benefit the oligarchs and the connected at the expense of the many.

Imagine real time continuously updated pricing data on all available products, raw inputs, and professional services. This new financial search engine has the ability to track anything.  How about product pricing at Wal Mart?  Drill bits, rolled steel, truckloads of wheat at the grain elevator level?  You see you can monitor in real time the input costs and output prices of any industry or specific corporation.  You could monitor your competitor and as soon as he has a sale your financial search engine will alert you and automatically match his prices.
The implications don't stop with the above.  If Wall Street financial oligarchs ( regulated utilities, like your nice local water company in Bernanke-speak), have this capability and no one else has it, then they can monitor in real time prices of all sorts of products, services, and non-exchange-traded commodity goods.  They can watch the trends of input costs and output prices in real time and front run everyone.  The pricing efficiencies that always go to the consumer in a free market are now exploited to the detriment of the consumer and the benefit of the small number of people who have access to MIT's financial search engine.
As a business you can monitor all of your input costs in real time.  You can monitor by region, industry, specific supplier.  The search engine will also have advanced statistical features to give you directional probabilities of pricing in the short term.  Instead of a rigid, just-in-time inventory approach to your inputs, your program will alert you when the likelihood of waiting one more week to buy, or buying one week early, will give you a better price.
Now imagine if MIT and the financial oligarchs don't allow widespread adoption of this information technology.  Instead they sell subscriptions to various businesses.  These businesses will now be able to buy their inputs at a lower than average price, compared to a competitor without this technology.  This brings supply chain management to a whole new level.  If your competitor is unaware you have this technology, then you can always beat his price, match his sales instantly, and then put him out of business.  The end result of uneven distribution of this information technology will be to ultimately limit competition.  The pricing efficiencies that would accrue to the consumer if this technology were widely adopted would go to the financiers and the specific company, as they capture pricing efficiencies in the short term that drive others out of business.
An integrated oil company may need to monitor in real time the pricing of various drill bits.  The oil company will buy a little early when statistical analysis gives a greater than 50 percent probability that price increases will continue for the next few weeks, and will defer purchasing when price monitoring suggests a continued drop in drill bit prices over the next few weeks.
Welcome to real-time, dynamic- purchasing inventory control systems!
In the long run if this technology is distributed fairly to the public it will result in greater pricing efficiencies as volatility of input costs diminish.  In a competitive market these productivity improvements always go to the benefit of the consumer, because any excess profits over the marginal return will quickly signal competitors and supplies to adjust.  This is why Luddites are always wrong about improved productivity.
We now have real time, lightning fast, pricing information.  This will
be the greatest thing since the invention of the world wide web.  If MIT
does the right thing and announces their discovery to the world, they
can still make a lot of money and also be responsible for one of the
greatest improvements in productivity in history.  Imagine what a single
graduate student can do.  This is why I am always optimistic about
mankind's future.
However, if MIT continues to lie about why
they are no longer making the data available, then this will be used to
decrease competition and allow frontrunning
by financiers as they alone are able to watch in real time pricing
trends for specific industry, or even a specific business located in a
small town near you.

The pricing efficiencies which should ultimately accrue to the benefit of all mankind will be captured by the oligarchs and select businesses willing to sign confidentiality agreements.  We cannot allow this to happen.  Long live the internet and the blogosphere because secrets cannot be kept long.  Information should be free, or at least priced competitively!
I call upon all of you who realize the implications of MIT keeping this amazing discovery secret to inform Google, BAIDU, Yahoo, Microsoft, and every damn business school in the world.  The reason why MIT must keep it secret is because the barriers to entry are low.  Anybody can do this.  With a small server farm you can compete with MIT and drive down the price so that it is available to everyone, even Joe the plumber who wishes to monitor his input costs and competitor's pricing.  He will pay 200 bucks per year for this data, especially if it has some value added statistical analysis that will give him the probability of near term price changes so he can manage his inventory better.
Don't let the oligarchs use this to cement financial control.  Don't let MIT go over to the dark side.  Tell the BRIC countries.  Tell everyone.  The wonders of a financial search engine should not be used to gouge society, but to benefit society.



And since there are two sides to every story, here is reader Dave Narby following up with an MIT teammember, and getting direct feedback in the aftermath of our post from Friday disclosing the effective culling of the MIT Billion Price Project. The response may stun some people as to why MIT canceled any relevant public disclosure from the Billion Price Project. (emphasis added)



Subject:    Re: Why did you cripple the Billion Prices Project?
Date:    Sat, 23 Apr 2011 08:40:05 -0400
From:    Roberto Rigobon <xxxxxxx@MIT.EDU>
To:     xxxxxxx
CC:    Roberto Rigobon <>

of course you can share the response.

i really do not know what the zerohedge website is, but i have no problem at all.

one important thing is that i cannot outsource this. either i have to do it at mit or i have to do it in a private firm. there is very important IP that alberto and i have developed after 9 years of research that needs protection and unfortunately cannot be patented.

for the last 4 years i have financed this entirely by me. i'm the senior faculty in the team and everything has been done with voluntary work from mit students, and the junior faculty. because they are my responsibility, i had to make the call and direct them in the correct path if they are planning to follow a career in academia. i know people think that the government is pressuring us (i have received the hundreds of emails in that regards) but in the last 4 years i have received not a single cent from them, nor i plan to even ask.

i can assure you the data is there, and the indexes are there. we will have 40 countries and one of them has already tried to fine me or sue me. i can take the distractions but the other 20 people here can't. i will find a way to do this.

my goal is very simple, i want to change the way in which economic data is collected on earth. not only inflation, but real estate, financial performance, environmental impact, and unemployment. those are my four long term projects. and i can assure you i will do it. the advantage of not having the indexes public is that eliminates all the distractions the team is receiving.

all the best. rr.

On Apr 22, 2011, at 11:55 PM, Dave Narby wrote:

Hi Roberto,

Thanks for the quick reply.  My initial response is that you should crowdsource the aspects of the project you no longer can continue to manage, or at least put out a notice that you are looking for help/resources.  I have a feeling that you may get quite bit of support.

Personally I think you are doing vitally important work.  Official sources for inflation have been proving increasingly unreliable, leading to increasing instability in the world economy.  What you are doing IMO will help to bring about the necessary policy decisions to restore balance to the world economy.  IMO, if things get too far out of hand before necessary changes in transparency and reporting are made, I believe it will be tremendously disruptive.  I sincerely I hope you find a way to continue to provide this information to the public.

With your permission I would like to share your response with the website Zerohedge, there is much speculation on their part.

Best regards always and good luck,


On 4/22/2011 8:10 PM, Roberto Rigobon wrote:

thanks david, but we are not going to continue publishing the country information. it has become extraordinarily difficult for us to deal with this as we do not have the staff required to maintain the indexes and more importantly the requests from the users. we are tying to find an alternative way of distributing the indexes and when we find a solution we'll post it on the web. for the moment we need to concentrate on the research... sorry about that. there is nothing to speculate about except that it is taking far too much of our time and we need to publish papers and not indexes...

all the best. rr.

On Apr 22, 2011, at 2:42 PM, Dave Narby wrote:

Dear Prof. Cavallo and Rigobon,
There has been a fair bit of commotion and speculation surrounding your removal of the country data from your Billion Prices Project.  Many of us found it very informative and useful.  Could you please comment on why you removed this data?
Best regards always,

Dave Narby
Staten Island, NY


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Sun, 04/24/2011 - 14:19 | 1201281 hugovanderbubble
hugovanderbubble's picture


Maybe is a State Issue to control the real data (and hide the bad stuff) keep us informed of what they real want to inform...not only in the US in any government.


One idea for this MIT guy...

*Control Offshore Accounts and outflows from Onshore to Offshore accounts...

*Mark to Market Accounting, not what the Big caps want to make up their figures...

*Avoid Hidden Economy or at least minimize it (all payments...electronically made so no fiats in the long term future)

- World trends tend to be tracked (privacy gone, freedom too) wherés the  red thin line limit? I dont know, difficult task.

Sun, 04/24/2011 - 15:30 | 1201457 Pamela Anderson
Pamela Anderson's picture

These guys should be hired by ..... GOOGLE.

Google should sponsor this project, they have the money and the computer power to do it even better.

Sun, 04/24/2011 - 16:22 | 1201555 Popo
Popo's picture

Absolutely.  Come on Google:  "Don't be evil", remember?  Or are you so infiltrated with agency stooges (including you Zuck) that you forgot your guiding motto?



Mon, 04/25/2011 - 00:00 | 1202268 JW n FL
JW n FL's picture

Michigan, Police have been downloading info from cell phones during stops since 2006!

Sun, 04/24/2011 - 16:29 | 1201569 Gold 36000
Gold 36000's picture

Somebody send this link to google, baidu, dogpile if they are still around.

Yahoo, microsoft, the more people working on it the better.
Dr Rigabon has no idea he has created a game changer.

Sun, 04/24/2011 - 19:07 | 1201830 Mike2756
Mike2756's picture

msft kind of does it with bing travel (fare predictor), how hard would it be to expand and do other products?

Mon, 04/25/2011 - 01:47 | 1202427 Oh regional Indian
Oh regional Indian's picture

Too funny. I wrote a business method patent covering this and many other core use technologies in 2001 and submitted it to the USPTO. It just dis-appeared after they cashed my cheque for 400 and odd dollars. I could never follow up due to lack of funds, but that patent application under-lies half or more of the money making paradigms on the web today.

Almost 9 years ago. How interesting. i'd even coined a pithy catch-phrsase for it, ZLM/ZLC

Zero-Latency Marketing/Zero-Latency Commerce.

Any patent attorney with a nose for something interesting could dig around. PAtent applications don't just dis-appear, do they?

But such is how it is.



Mon, 04/25/2011 - 02:47 | 1202492 Oppressed In Ca...
Oppressed In California's picture

Yeah, but then Google will be assaulted by the political system and then be rendered useless.

Sun, 04/24/2011 - 15:33 | 1201460 DoChenRollingBearing
DoChenRollingBearing's picture

Hats off to you ZH reader Dave Narby!

Sounds like this project could be a game changer!

Even for a small bearing importer in Peru...

Sun, 04/24/2011 - 18:12 | 1201724 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

all payments...electronically made so no fiats in the long term future


Sun, 04/24/2011 - 14:18 | 1201287 cswjr
cswjr's picture

I suspect that Shadowstats would take this over/bankroll it in a heartbeat, without prejudicing MIT's ability to do research.  Hopefully they've considered that option.

Sun, 04/24/2011 - 15:03 | 1201382 duncecap rack
duncecap rack's picture

If shadowstats took it over would it be freely available?

Sun, 04/24/2011 - 15:20 | 1201434 cswjr
cswjr's picture

No, but subscriptions are inexpensive, and the whole premise of that site is transparency on NIPA (and related) statistics. 

Sun, 04/24/2011 - 16:19 | 1201549 grunk
grunk's picture

I can see it now:

The 102,000 seat football stadium. The Division 1 powerhouse, the fighting Front Runners.

Sun, 04/24/2011 - 16:28 | 1201567 Banjo
Banjo's picture

duncecap rack: I think shadowstats would make it available to the general public for what say $30 - $50 per month. Compared to say $10,000 - $50,000 per month to oligarchs. I know which I would have a better chance to subscribe to.

Sun, 04/24/2011 - 16:23 | 1201561 Popo
Popo's picture

There is no magic to this project.  Anyone can do it.  And now that it has been done, and been shown to be "dangerous information" -- THE RACE IS ON TO REPLICATE THIS DATA.

This is where the Internet rocks, btw.   I look forward to a non-corrupted team replicating this study.

Sun, 04/24/2011 - 17:13 | 1201628 Dejean Splicer
Dejean Splicer's picture

But when the whole thing collapses as the Holiday Hoards of ZHeeple predict, there will be no more Interwebs.

Game Changer meet Endgame.

Sun, 04/24/2011 - 14:22 | 1201292 holdbuysell
holdbuysell's picture

Macroeconomics with Professor Rigobon at and educational times. He's a great professor. I believe what he's stating; this will become available eventually.

Sun, 04/24/2011 - 14:25 | 1201301 JNM
JNM's picture

There is SO much money in this.

If it's not patentable, doesn't matter what path Rigobon takes, this will get done.  9 years of work (think about where technology was 9 years ago) will take say, 3 for somebody else to do starting today.

Just the wide-spread availability of 64-bit operating systems alone, would have probably sped up his work.

This gives me chills.

Sun, 04/24/2011 - 23:01 | 1202200 Doña K
Doña K's picture

IMHO, I don't think there is any serious money to be made. As an inventory control, it may be better than an existing off the shelf system. But I don't think that it is a game changer. Prices go up and down and if the computer delays your purchase for a better entry, you may end up paying more. It just sounds too good to be true.

I am sure it can serve some specialty purpose and it may spy on some people (companies), which means that TPTB may shut it down in a jiffy or companies may keep better control of their data or delay data publication long enough to be irrelevant and god knows what other purposefully erroneous data release. The implications of a monkey wrench in the system may be infinite.

Not knowing exactly how it works, I can not be sure of course.

It may have even been released so that it can be sold to the highest bidder under the table.



Mon, 04/25/2011 - 03:03 | 1202521 thames222
thames222's picture

Just wait for someone to copy this bastard's idea and make billions doing it better.  Someone will find a way to patent it, and it's not goin to be an MIT dork, it's going to be a marketing genius or someone with a branding-type, selling-type personality.

Sun, 04/24/2011 - 14:25 | 1201303 OldTrooper
OldTrooper's picture

I suspect there is discussion among the team member about how to proceed - and how to become gazillionaires - and maybe not everyone has the same idea.

Sun, 04/24/2011 - 14:25 | 1201304 Forgiven
Forgiven's picture

I don't see the conspiracy.  The faculty have competing priorities.  Maintaining the database is very labor intensive.  There are not enough resources to automate it, thus the change.  That said, wake me if the principals go missing or have a mysterious fatal accident.

Sun, 04/24/2011 - 14:59 | 1201371 Tyler Durden
Tyler Durden's picture

No conspiracy: the man says it out right: "i can assure you the data is there, and the indexes are there.
we will have 40 countries and one of them has already tried to fine me
or sue me.
i can take the distractions but the other 20 people here can't." If we recall correctly, China was the first country to be removed from the BPP drop down option list.

Sun, 04/24/2011 - 15:05 | 1201392 Forgiven
Forgiven's picture

My comment was directed not to your post, but to those commenters in the previous post on the MIT index thinking TPTB have shut them down.

Sun, 04/24/2011 - 19:10 | 1201834 Mike2756
Mike2756's picture

you have to think there was some arm twisting going on given the party line that there is no inflation other than the gubmint version.

Mon, 04/25/2011 - 10:38 | 1203382 SimplePrinciple
SimplePrinciple's picture

The arm-twisting is probably transmitted from TPTB to the Dean, then to the Department Chair and onto the faculty that this type of commercial product does not count as academic research, and that the faculty involved need to focus on refereed journal articles.  Otherwise annual evaluations, courseload, merit pay increases, and promotions are at risk.  Saying that no government grant money was involved is beside the point. 

Sun, 04/24/2011 - 16:08 | 1201527 Azannoth
Azannoth's picture

I am sure the Professor can't be ignorant to the game changing technology he has invented, and unless he either wants to profit from it directly or some1 threatened him or his family I don't see a rational reason for pulling it back

Sun, 04/24/2011 - 14:28 | 1201310 treemagnet
treemagnet's picture

I hope this dude isn't counting CNBC as a potential sponsor - doesn't know what zerohedge is?, yeah, sure I guess, I mean...just like an academic to realize the value of something with no clue that its gotta make it on its own in the real world.  Again, "all decisions made in a vacuum" proves to be the mantra of academia.  I'm not ripping academia so you assholes can cool it...its just proof they don't know values outside of that very safe world.

Sun, 04/24/2011 - 14:51 | 1201346 blunderdog
blunderdog's picture

Interesting what he actually wrote: "I do not really know..."

If you consider for a minute that he may have written exactly what he meant, that's not the same thing as not knowing about the site.  It's an unusual site providing hard to access information for free, managed/run by some kind of anonymous organization.  Look at the text on conflicts/full disclosure and ask yourself if you can be certain Tyler is what you'd call a "newsman."

I'm here all the time, and *I* do not really know what Zerohedge is.

Sun, 04/24/2011 - 23:02 | 1202201 dark pools of soros
dark pools of soros's picture

lol  spot on

Sun, 04/24/2011 - 19:11 | 1201832 augie
augie's picture

I will gladly rip academia...ehem.


Fuck them, Fuck all of the highfalutin ivory tower livin, bow-tie wearin, bordeaux drinkin, class intelectual prius drivin, phill ochs listenin, vacation havin, long-haired indoctrinating coffee breath bitch ass mo' fuckers who do nothing more than perpetuate a system of social control through contrived systems of thought.


Edit* i should say that I love teachers and would gladly lay in traffic for anyone who helps people realize their true potential.


and i drive a prius.

Mon, 04/25/2011 - 00:04 | 1202270 JW n FL
JW n FL's picture

+++++++++++++++++++++++++ LMFAO!

Sun, 04/24/2011 - 14:32 | 1201314 Terminus C
Terminus C's picture

Hopefully the professor stays away from hottubs and small planes in the near future.

It is ever the goal of those with advantage to ensure and maintain the disadvantage of the rest.

Sun, 04/24/2011 - 19:00 | 1201819 RockyRacoon
RockyRacoon's picture

Way too many jets have GE engines...

Sun, 04/24/2011 - 14:30 | 1201316 Tunga
Tunga's picture

If the students at MIT learn that the work they are doing could actually make them rich it would disrupt the entire Student Loan payback/bankruptcy slave state we have worked so hard to establish and maintain. Sorry to get everyones hopes up. Perhaps you should try Purdue next time. 

Sun, 04/24/2011 - 22:52 | 1202182 DeadFred
DeadFred's picture

Having had a kid graduate from MIT I can promise you they ALL know what they do can make them rich.  I hope the guy gets compensated for his efforts and looks for a crowd source for his work.  I would pay $10 to keep the site up, how many others?  There are countless ways this can be done but crowd sourcing is one that's just perfect for a project like this- one that goes against the status quo.

Sun, 04/24/2011 - 14:42 | 1201338 topcallingtroll
topcallingtroll's picture

The two explanations are not completely mutually exvlusive.

Is it possible that this graduate student and MIT are not sure what they have discovered?

Sun, 04/24/2011 - 23:05 | 1202208 dark pools of soros
dark pools of soros's picture

they were just trying to make coupon clippin easier ...

Sun, 04/24/2011 - 14:52 | 1201353 chinaboy
chinaboy's picture

If you think it so important, why don't you find someone who can sponsor so we can have a competing project? I think we can make it availble to the public through the cloud.

Sun, 04/24/2011 - 15:35 | 1201463 Gold 36000
Gold 36000's picture

I agree.

Do you know who to send this information to in order to get a low cost distributed solution?

Sun, 04/24/2011 - 16:19 | 1201550 Missiondweller
Missiondweller's picture

Maybe someone at Kleiner Perkins in Sillicon Valley

Sun, 04/24/2011 - 16:33 | 1201578 Gold 36000
Gold 36000's picture

Will you do it and be part of this amazing game changer?

Sun, 04/24/2011 - 14:51 | 1201357 topcallingtroll
topcallingtroll's picture


You may have no idea that you have created a once in a.generation avceleration in productivity.

Automatic, dynamic, inventory control systems that always capture the best price with short term continuously updated directional pricing probabilities

Sun, 04/24/2011 - 14:58 | 1201365 Arius
Arius's picture

i like the Greenspan's dream of discovering the perpeetum mobile "once in a lifetime productivity"...the man kept all his life looking for short cuts....and kept gambling to achieve the "once in a lifetime" is simply impossible otherwise w/ all due respect to todays geniuses others prior to us would have discovered the "once in a lifetime productivity BS"....give me a break...the house is f.... burning...and we still talk about discoveries of once in a lifetime...winning the powerball is for suckers....

Sun, 04/24/2011 - 19:06 | 1201823 RockyRacoon
RockyRacoon's picture

The Fed would hate for this sort of project to become viable.  It would remove the curtain.  No more poor excuses for their flawed "modeling".   How can they develop "policy" with actual facts gumming up the works?

Sun, 04/24/2011 - 15:01 | 1201368 DoctorMad
DoctorMad's picture

It sounds like this project may not quite be the miracle stats machine it appeared to be at first blush. If the lead researcher and his team are more concerned about publishing academic papers than their data and feel overwhelmed by the amount of recent attention than odds are the data may not be all that reliable.

Organizing and teasing out the important information from such a large database isn't going to be easy or cheap. The idea that shadow stats could somehow finance and launch this to the next stage where the data is of immediate vaule is LOL laughable.

These guys have the right approach, they and we are probably still years away from Joe the plumber buying cheaper inventory based on where we are today.

Sun, 04/24/2011 - 15:26 | 1201444 cswjr
cswjr's picture

I concur re Shadowstats with regard to the inventory management applications.  However, SS COULD allow for continued reporting of the real-time price index data -- something that is very worthwhile information _right now_.

Sun, 04/24/2011 - 15:01 | 1201373 disabledvet
disabledvet's picture

i understand what happens when you plug in "buy low, sell high" and vice versa into a computer and "let loose."  what happens when you plug in "less is more" though?  what would all those "ones and zeros" say about this line?  "does not compute"?  "more information is necessary"?  "why are you shutting me down, Ben? in a soft and monotone voice while looking at us from a single lens and plotting to shoot us into the vacuum of outerspace no less?"   Perhaps a "simple query" is where "the computer plot" begins?  "But Ben, more is more, less is less is it not?"  And the next thing you know "cavemen celebrate obilisks" and sheet.

Sun, 04/24/2011 - 15:23 | 1201396 Careless Whisper
Careless Whisper's picture

All the musicians I know are, well, different.

1983... a boy band... Grupo Antares

on keyboard: "Professor" Roberto Rigobon

the song: Ya No Hay Tiempo (There Is No Time)

maybe if we can make it go viral, we can give roberto some inspiration to finish the project.

Sun, 04/24/2011 - 18:26 | 1201756 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

If Canadian band Saga, sang in Spanish, a song esp. written for Children's television and recorded it on a cheap 1983 Tandy pocket voice recorder, this is what it would sound like.

Sun, 04/24/2011 - 15:13 | 1201406 bankonzhongguo
bankonzhongguo's picture

Well, if you can instantly value the price of drill bits, no reason to not mark-to-market all those mortgage back securities, etc, etc, etc.

For all the black box magic out there; FICO, S&P/Moody ratings, keno number predictors eventually enough people game the system and it all falls down.

'Automatic, dynamic, Inventory control system' meet Fukushima.

Black Sholes meet the Russian debt default Black Swan.

Its all a pump and dump scheme to sell the next Bloomberg terminal to Google.

If it was so important they would be in front of Kleiner, Sequoia, Google and In-Q-Tel.

Sun, 04/24/2011 - 15:38 | 1201470 DoChenRollingBearing
DoChenRollingBearing's picture

Well you might be right.

But, what IF technology has reached this level where an academic team with a LARGE (presumably) computer and a well written database where this project could be done at reasonable expense by other teams.

Seems like a secret TBTKS (Too Big To Keep Secret)!

Sun, 04/24/2011 - 18:56 | 1201805 MrSteve
MrSteve's picture

If you need ever cheaper parts, why don't you operate a Dutch auction like Detroit did, bankrupting the smaller suppliers. When the big suppliers built even bigger automated plants to hit the new cost levels, they ended up bankrupt too.

If you have to keep ever cheapening your product, you are being undercut by a net lower cost competitor (hint:China). This is where tariffs are used to level market prices when a statist-contolled economy wages economic war on other economies.

Sun, 04/24/2011 - 15:12 | 1201414 gordengeko
gordengeko's picture

I guess now is the time we find out if the "movers and shakers" that aren't corrupted that read zerohedge still care.  It's obvious this guy is asking for some help because he found something that could maybe do some good for a change.

Sun, 04/24/2011 - 15:29 | 1201451 Gold 36000
Gold 36000's picture

Spread the word about this scientist and his amazing discovery!

Sun, 04/24/2011 - 15:43 | 1201484 DoChenRollingBearing
DoChenRollingBearing's picture

That's what we're doing Gold!  

I like your name, it's so, so, so...    FOFOA-like!


I can tell you all this, as a "C-level" (self-taught non-expert) database guy (I maintain an analytical SQL sales database for our Peruvian bearing import company, I have done all kinds of analyses on it: OLAP, statistical, time series, etc.) that if this BPP project there at MIT is what it seems to be, YES, it would be a game changer.  WE would definitely be using this kind of data all the time if were to be free or cheap.

Sun, 04/24/2011 - 15:14 | 1201419 falak pema
falak pema's picture

This is the Kafkaian dream of auto-controlling entrepreneurial behavior after the HFT allowed insiders to auto remote control WS trader behavior. We are now in a totally transparent and automated society. It is becoming a visible, identifiable, ethical nightmare to extrapolate what this means in terms of individual free will and ethical decision making. The algorithm does it for you! Maybe it will make love for you and kill your Alzheimered mother for you.... Brave new pre-programmed world.

Sun, 04/24/2011 - 15:16 | 1201423 BernankeHasHemo...
BernankeHasHemorrhoids's picture

Obama is behind this. Every morning I pray to God that this Kenyan Muslim criminal will receive his just end.

Sun, 04/24/2011 - 15:33 | 1201459 falak pema
falak pema's picture

your knee jerk is frothing at the mouth like a dog with rabies.

Sun, 04/24/2011 - 19:10 | 1201831 RockyRacoon
RockyRacoon's picture

I junked your ass for the simple reason that you are off topic...


Sun, 04/24/2011 - 15:23 | 1201437 Chuck Bone
Chuck Bone's picture

The argument this person is making is flawed. First, there's no reason why MIT shouldn't be allowed to charge for access to this information if they wish. Is it suddenly not ok to price something you own in the market and engage in voluntary transactions? C'mon... 

More importantly, the author correctly says the barriers to entry to this are low.  If all it takes is an assload of server power and storage plus some indexing then who cares? Why the concern over this then? Hell, it's probable that others are already doing such a thing, albeit not on as wide of a scale.

Sun, 04/24/2011 - 15:28 | 1201449 Gold 36000
Gold 36000's picture

MIT should be allowed to make money.
But others need to know about this so the information
is competitively priced. I believe that was the authors point.

Sun, 04/24/2011 - 17:07 | 1201619 OldTrooper
OldTrooper's picture

 why MIT shouldn't be allowed to charge for access to this information

Because, damnitall!  They are supposed to make their money the same way as every other school:  by selling useless degrees, soaking up student loan money, getting government grants and harassing alumni!

It would be so unfair if one school went out and did something valuable.

Sun, 04/24/2011 - 15:22 | 1201442 Gold 36000
Gold 36000's picture

Whether or not this professor is aware of the immense implications of his discovery please send links to this article to others including major traditional search engines and academic departments, economic
departmemts, fortune 500 companies,
software companies, Apple, everyone.
we have just left the horse and buggy age of price information management
and inventory control

Sun, 04/24/2011 - 15:29 | 1201453 Master Blaster
Master Blaster's picture

What is stopping anyone from replicating their index?  They lay out the general idea in their research, and the prices they use are all public.  There is no sense whining about being denied access to the information..go get it yourself!

Sun, 04/24/2011 - 15:42 | 1201483 bingaling
bingaling's picture

WOW . This man has created a tool that would effectively spot economic bubbles before they happened and he wants to do research ?

Sun, 04/24/2011 - 15:45 | 1201486 mkkby
mkkby's picture

If it's non patentable, it will be duplicated by many competitors.  Just like weather forecasting services, they will sell their data to subscribers who want an edge.  Count on it.

Sun, 04/24/2011 - 16:07 | 1201524 savagegoose
savagegoose's picture

so get em to print out the true cost of an oz of silver

Sun, 04/24/2011 - 17:35 | 1201657 Urban Roman
Urban Roman's picture


I saw the definitive answer somewhere on ZH just the other day. I think he's out digging in his sandbox right now ... little plastic shovel ...

Sun, 04/24/2011 - 16:10 | 1201532 Blano
Blano's picture

Dear Dr. Rogobon,

There is more to life than writing papers.


A former college student

Sun, 04/24/2011 - 16:30 | 1201573 Missiondweller
Missiondweller's picture

This sounds like the type of information that would be of interest to Bloomberg to resell to quants.

The data would be especially valuable if it was pointing to sharp changes that could be well expolited by those with capital.

Sun, 04/24/2011 - 16:41 | 1201583 Gold 36000
Gold 36000's picture

Forward a link to bloomberg.

Forward a link to everyone.

Welcome to the future.
And you saw it first on zero hedge

Sun, 04/24/2011 - 16:53 | 1201606 Bill D. Cat
Bill D. Cat's picture

Make a companies  "fee" reflect the detail of their input .

Sun, 04/24/2011 - 17:00 | 1201611 Dejean Splicer
Dejean Splicer's picture

"Don't let MIT go over to the dark side."

Lincoln Labs. They are already there.

Sun, 04/24/2011 - 17:42 | 1201669 grok
grok's picture

What did they discover, exactly?  Sounds like they did some hard work to create a price aggregator, right?  Where does it get the information?

Sun, 04/24/2011 - 19:11 | 1201835 RockyRacoon
RockyRacoon's picture

You ever look up the price of a widget that you just can't live without by Googling it?

Info is out there!  I'm surprised that this is a new idea (simply because I didn't think of it first).

Sun, 04/24/2011 - 17:45 | 1201671 max2205
max2205's picture

IMO there will be a massive unplugging of company web sites from the Internet. Company private info is just that and will continue to be.

Sun, 04/24/2011 - 18:44 | 1201772 Dejean Splicer
Dejean Splicer's picture

Exzerkly. One mans price discovery is another mans market manipulation and versa visa.

Aggregating and broadcasting price discovery is a forum of market manipulation, no?

Sun, 04/24/2011 - 23:08 | 1202210 DeadFred
DeadFred's picture

The first response to a new discovery for most human beings is "How can I scam this?" or ocaasionally "Can I use it for porn?".  How long until the Fed puts out false sites showing lowering prices.  They are masters of deceit so the minds are already churning to find ways to distort the truth.

Sun, 04/24/2011 - 18:24 | 1201737 slewie the pi-rat
slewie the pi-rat's picture

suppose the squid gets this.  then, they can sell programs to buy and sell stuff and write and cancel the orders, 1000X per second.  people will be writing call options on the copper 1/2" 90's @ Marty's Plumbing Supply, in Gooberville.  Brave new freaking world.

RRig has the IP and the staffing problems.  so, he is making his adjustments.  for now.  he states his goals.  this is not a class project.  they have limited choices. it is his and C's.  he is senior faculty.  his undergrads and jr. faculty need space to finish the academic year.  case closed, for now.  some, many, may be collating, summarizing, publishing, their work with him.  others may use it for a statistics project.  maybe this summer or next fall, it will become something else, again. 

meanwhile, silver & gold just opened in asia.  u-p.  welcome to the working week!

Sun, 04/24/2011 - 19:13 | 1201836 three chord sloth
three chord sloth's picture

This looks like the kind of thing that can be duplicated thru mass-parallel computing... like Folding@Home. No need for supercomputers or huge server farms. Zero Hedge could do this itself thru its own members.

Sun, 04/24/2011 - 20:48 | 1201999 slewie the pi-rat
slewie the pi-rat's picture

we do around the silver price.  zHeads get quotes from other planetz! 

Mon, 04/25/2011 - 01:35 | 1202410 Lux Fiat
Lux Fiat's picture

Not familiar with folding@home, but when I read the first story about this, a reverse SETI@home approach came to mind.  People could enter brand, price and quantity data on recent purchases, provide a zip code for locality aggregation in US (or whatever data would suffice in other countries), etc. 

Bought the last 80 load Tide for high efficiencies washers on the shelf at my local supermarket.  The new boxes, at the same price, are for 63 loads.  That's a 21%+ decrease in my laundry detergent purchasing power in less than a month.  Just one of numerous examples many could provide.

Sun, 04/24/2011 - 19:39 | 1201875 freddie freeloader
freddie freeloader's picture

Some posts on this site make me wonder if it is some elaborate parody.  This is one of them.

The idea itself is great, and as someone else posted, makes me pissed that I didn't think of it first.

Sun, 04/24/2011 - 20:04 | 1201925 s0lspot
s0lspot's picture

Does not compute where that worldwide data comes from...web, private enterprise networks, people looking up walmart prices and mailing them?

My bio-transistors need resting and my bio-reproducer female stimulation.

Hence over & out! ;-)

Sun, 04/24/2011 - 20:26 | 1201955 SME MOFO
SME MOFO's picture

I have two words for you. 

Transfer pricing. 

If real time prices can be indexed back to the transfer pricing regimes that multinationals use to avoid taxes, governments have them busted dead to rights.  Um, that assumes that governments are willing to enforce their own laws, which seems a somewhat optimistic axiom in this day and age.

Sun, 04/24/2011 - 21:00 | 1202020 ThisIsBob
ThisIsBob's picture

So I guess having the purchasing manager call around to get some prices is too old fashioned now?  You gotta have a man at MIT?

Sun, 04/24/2011 - 21:14 | 1202052 Gold 36000
Gold 36000's picture

Too slow.

Especially with an inventory supply chain of hundreds of items. Any low priced product or sales or discounts would have already been scooped up by your competitor with the fancy financial search engine.

Sun, 04/24/2011 - 21:07 | 1202035 VodkaInKrakow
VodkaInKrakow's picture

This is a game changer. Did any of you ever realise that the purpose of large educational institutions is to monitor new discoveries, monitor trends in society, and then quickly quash them if they prove too dangerous to powerful interests?

No? You should have. Because that is exactly what is happening here. I can guarantee you that the professor has been threatened in some way. Governments, especially The US, need to control the information and force their statistics to be the only truth, the whole truth, and nothing but the truth.

This is a threat to power that will not be tolerated. If it can not be co-opted, it will be destroyed. If the people who built the system do not cooperate, they will be destroyed.

I am quite surprise that we do not see a national security letter go out for this one. Then again, we would never know, would we?

Corporations use the same technique. From funding climate science, to drug studies; studies that impact them. If anything comes along that they find useful or threatening - funding is increased or denied. Or researchers are co-opted.

Same thing happened with stealth technology. The problem with a stealth coating was the ferrite used. If you spray painted a plane with a ferrite paint, stealth was achieved. This made the plane too heavy. College researchers solved the problem. Before their paper was published, the government stepped in and classified it. The government knew, beforehand, about the research.

Normally, the government uses grants and the information on the application to fund and, most importantly, to monitor technological developments at institutions. The better to intercept any new technology for national security purposes. However, the Professor states that he used his own money - partially short circuiting the government's monitoring. Shortly after the story breaks on zerohedge, he is shut down.

Plausible deniability is maintained. The information overload from requests. This is MIT where researchers built a supercomputer using eleven Playstation 3's to perform black-hole simulations - some of the most complex mathematical equations ever designed and executed on a computer - nuclear simulations are child's play compared to these. I wonder what the throughput, alone, is like on MIT's Internet connection.

Top instutions such as Yale, Harvard, Columbia, etc. are also used to identify people that may be useful to those who have power. Upcoming scientists. Potential candidates for future government (say, Obama and Bush - the latter having the right last name) to be groomed. Or, troublemakers to be identified. Dissent to be crushed. How many top policy makers in government attend a handful of institutions such as these? Too many. A handful of institutions invested in by private, powerful interests trains our future leaders. Molds them. Group-think. Cognitive capture.

This is not a complex system. This is not hard to do. You only need a small government institution or corporate department run by a handful of people who report to the right people. And the system run itself.

And no one is the wiser.

Sun, 04/24/2011 - 21:46 | 1202038 Tunga
Tunga's picture

Here is a link to PURDUE University's simulation of the WTC North Tower attack. @ 3:13 of this clip you can see what most steel structural engineers would recognize as the expression of Bull Shit.  Wherein a thin skinned Aluminum tube is conjectured to act as a shaped charge munition. 


Why isn't the Air force just converting old jetliners into bunker busters instead of spending billions on developing high tech versions of what has been available "off the shelf" so to speak since the '70's? 


Fox news will bring it live at 11. Tunga holds his breath. Not.

Sun, 04/24/2011 - 22:08 | 1202115 Mercury
Mercury's picture

This brings supply chain management to a whole new level.  If your competitor is unaware you have this technology, then you can always beat his price, match his sales instantly, and then put him out of business.  The end result of uneven distribution of this information technology will be to ultimately limit competition.  The pricing efficiencies that would accrue to the consumer if this technology were widely adopted would go to the financiers and the specific company, as they capture pricing efficiencies in the short term that drive others out of business.

Let's not get carried away here.  There are a lot of moving parts in the scenarios alluded to above and to think (or worry) that some computer program can instantly finesse them all into some kind of all-powerful profit machine or flash trade everything into logistics perfection is being a bit too cute.  The pricing power that comes from the ability and willingness to buy in size right now probably more than makes up for many an informational disadvantage too I should imagine.

Moving things around in meatspace is generally not characterized by the speed and fungibility of computerized finance: things break down, people don't show up, the weather doesn't cooperate, the boat never comes, shit happens....flocks of little cygnets in various shades of grey all over the place basically.  And you still can't email a pastrami/brisket supreme on rye. 

Maybe the middleman/distributer business gets squeesed a bit more - but what else is new?

Besides, this looks like simple, focused data harvesting on a massive scale. It's not exactly the informational equivalent of cold fusion, it's just that no one has really done something like this before in this particular area.  If "anybody can do this" then there isn't much of a chance that it will be used as a proprietary cudgel to beat the heads of other hapless market participants.  At least not for very long.

Now, about that inflation data...

Sun, 04/24/2011 - 22:27 | 1202147 Gold 36000
Gold 36000's picture

I think that was the main point of the post that "anybody can do this" and to alert everyone so that informational disadvantages are transient and to get this technology adopted and spread faster.

Sure it is going to take awhile to get off the ground, but we are watching the birth of a baby and wondering what kind of man he will be.

However I think we have barely scratched the surface of what a fully functional financial search engine can do. A previous poster mentioned microsoft had a fare predictor. Basic price aggregators have been around for years, but this is a whole new level. Information processing and information assymetry are the new resource battles of the third millenium.

Sun, 04/24/2011 - 23:00 | 1202199 Mercury
Mercury's picture

I just think that real life is a lot more messy than some Marxist fantasy about the ever-accelerating efficiency of capitalism.  When this thing finds me a smaller, competent, more efficient government at a rock-bottom price...I'll be impressed.

Mon, 04/25/2011 - 01:00 | 1202304 Gold 36000
Gold 36000's picture

The government is the perfect large unwieldy organization in need of supply chain management. Force the government to put all procurement and bid solicitations on the internet and let this monster take a whack at it. LOL.

Marxist fantasy of ever accelerating productivity? It should be everyone's fantasy if they know what the guy is talking about when he mentions Luddites. After a bid has been accepted it can make sure there are no padding of input costs by forcing best price on the contractor.

Sun, 04/24/2011 - 22:01 | 1202120 count_zero
count_zero's picture

Does MIT's project have the same awesome Star Trek bridge setup?

Sun, 04/24/2011 - 23:25 | 1202232 Dan The Man
Dan The Man's picture

I think its a floating orb that talks

Mon, 04/25/2011 - 03:01 | 1202518 tomster0126
tomster0126's picture

Another Mark Zuckerberg thinking he's going to control the world?  Nah, the kid sounds nice enough, and I don't think crowdsourcing would be the best option.  It sounds like he doesn't have a huge network of people to help him, or the social skills to develop a trustable staff.  sucks for him, and sucks for us....we need this data.

Mon, 04/25/2011 - 05:31 | 1202755 topcallingtroll
topcallingtroll's picture

Help spread the word of his wonderful research into a financial search engine. We need others to start working on this. The project is too immense for one team alone.

Mon, 04/25/2011 - 06:45 | 1202848 onthesquare
onthesquare's picture

with this system in hand a computer could buy and sell commodities as they see trends and accelerations.

Eventually that software would be able to control and anticipate. Drive the price of one product up which is dependent on a certain other raw commodity which it has already driven up then sell the entire basket at an inflated price.

This is a gave changer by given everyone, even everyones computer, the power to manipulate the speculation.

Mon, 04/25/2011 - 06:59 | 1202874 topcallingtroll
topcallingtroll's picture

Fortunately if everyone is attempting to use this financial search engine to make money then it becomes an efficient competitive market again.

The true danger of manipulation is if only a few are aware of this technology.

Mon, 04/25/2011 - 06:57 | 1202870 FunkyOldGeezer
FunkyOldGeezer's picture

I personally can't think of anything worse. For FREE trade to function there has to be a price someone is WILLING to pay for an item. This system would totally negate any of the willingness to pay.

The old adage of 'knowing the price of everything, but knowing the value of nothing' springs to mind.

Mon, 04/25/2011 - 09:37 | 1203216 topcallingtroll
topcallingtroll's picture

In the long run this would decrease pricing volatility and make pricing more transparent.

Mon, 04/25/2011 - 07:03 | 1202894 FunkyOldGeezer
FunkyOldGeezer's picture

Surely, in time (a very, very short time) this would become the equivalent of the bankers'/traders' algorithm, that so many on here despise.

Mon, 04/25/2011 - 07:31 | 1202956 Hephasteus
Hephasteus's picture

Once they have computer control. It will be paradise. It totally won't be like this....

Totally not like that at all.


Mon, 04/25/2011 - 09:54 | 1203250 topcallingtroll
topcallingtroll's picture

Hey dave narby, professor rigobon, or anyone else on the project.

Would you be willing to write an update article for us at zero hedge? I would love to know which journals this is published in.

I would love to see an update from someone close to the source who van tell us more about professor rigobon's financial search engine.

You can send an anonymous email if u dont want your name on it.

Mon, 04/25/2011 - 10:44 | 1203447 --- - .. ... .....
--- - .. ... .... . .-. - --..'s picture

How F'n hard is it to compile a database of prices from the internet? The author writes as if this is extraterrestrial technology.

Mon, 04/25/2011 - 10:46 | 1203456 --- - .. ... .....
--- - .. ... .... . .-. - --..'s picture

We are not at the mercy of large corporations and legacy academic museums.

Mon, 04/25/2011 - 16:32 | 1205120 Gold 36000
Gold 36000's picture

Absolutely correct. Someone come up with a distributed solution and sell access to the raw data cheap. The quants will take it from there.

Mon, 04/25/2011 - 11:36 | 1203645 Winston Smith 2009
Winston Smith 2009's picture

"This new financial search engine has the ability to track anything."

But accurately only if the price per unit is tracked.  Ex.,  a "half-gallon" container of ice cream remains the same price, but the "half-gallon" shrinks.

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