Thursday, July 25, 2013

Quality of Computer Science Higher-Education, Part 1

A recent discussion about H1-B quotas and tech workers on Hacker News brought up a very interesting question for me. The observation is that US companies are finding it hard to staff programming positions. Some comments suggested that higher-education is producing a lot of unqualified graduates. There was also a claim that the quality of CS education has declined substantially. Having been on three sides alluded to in this discourse, doing the hiring, teaching, and job-seeking, I thought it would be interesting to see what data we have and what we can glean from the said data.

Aside: I like to collect some data on the whole fizzbuzz phenomenon (i.e., the majority of job applicants not being able to program fizzbuzz). If you like to contribute your perspective and see the aggregate results of where the skills gap is, please consider taking my survey.

Tuesday, July 23, 2013


Over the past few months, munis have a hit hard, very hard. Even after the mild recovery since the end of June, index funds such as MUB (duration 7.17 yrs, distribution yield 2.97%) are down in excess of 7% YTD. High-yield munis, HYMB (duration 12.02 yrs, distribution yield 5.89%), are taking it even worse with a YTD drawdown of almost 12%. In a perfect storm of rising yields, illiquidity, high redemptions, and a default from Detroit to boot, munis are facing considerable challenges. HYMB, especially, is exhibiting considerable discount to NAV at the 3-5% level. Unfortunately, as others have noted, for highly illiquid assets such as muni bonds, the market price might actually be more accurate than the NAV. That said, even with the Detroit bankruptcy, which has been thrown back into court, the credit impact on HYMB should be muted as Detroit only comprises 1.33% of NAV and even all of Michigan only 3.53%. There is, however, the risk of other municipalities defaulting, but that risk has been there for a while. Note that muni bonds typically have high recovery rates (as high as 68%). The remaining headwinds of rising rates and redemptions will likely be challenging enough for the muni market. As the economy recovers and state coffers get replenished, the credit spread ought to tighten, but whether enough to counter the effect of rising rates is another question.