Wednesday, December 31, 2008

Winner takes all, or the Mouse Folk

Through the 90s and the first decade of the century, it has become common to explain the vast and growing gap between the top decile of the populace and everybody else in terms of a "Winner takes all" economy, in which globalization and the scale of media and distribution networks make it possible to drive network effects and sales volume. Not just survival, but dominance of the "fittest", from Stephen Cohen to Lebron James to Julia Roberts.

But, as the list of Madoff victims grows from Spielberg to Wiesel to (I love this one) Marketwatch's very own Irwin Kellner to Kevin Bacon to any number of banking nitwits, the bottom falls out of this winner takes all thing. There appears to be only one "winner," and he's under house arrest. The rest take not, but rather get took.

So we're back to the Kafka scenario, where Josephine, the winner, attracts adulation from the other mice for her scarcely differentiable piping, until she's weak. Then she does not.

Monday, December 29, 2008

Lonely nights in Redmondland

Freud and his ilk have long delighted in the identity of primordial opposites. The good doctor's unpacking of how heimlich and unheimlich came to mean roughly the same thing is perhaps the most famous instance of this parlor game.

But one that slipped past him is the likening of blessing and curse, which springs most readily to mind in relation to our faithful and constant companion, Microsoft Office. There are few things which we have seen flourish and blossom in the last two decades, sprouting new features like so much pubic hair, but much more useful. And yet, there are equally few things that make us cuss so often, almost daily, which frustrate us to the verge of pathology. Especially Office 2007.

But somehow we soldier through together because, after all, Microsoft has a lock on proprietary file formats that everybody uses. Really that's all there is to it. We do it because we have to.

Saturday, December 27, 2008


Here's my brother-in-law Rob in a candy ad from the 70s. He's the smartassed one with a candy bar.

Friday, December 26, 2008

Starbucks, Mamaroneck, Boston Post Road, 4:21

The same crazy hyper-social guy is in here as last time I was here, asking everybody how their holiday was, making jokes. Even tapped me on the shoulder. Much like my dad, but closer to having a diagnosis.

Master DJ Starbux spinning milquetoast pop same as ever, in this case crooner John Legend, who has lifted a well-known Mark Knofler lick and sings like Sting on top of it, and acts like he should be given a biscuit for it.

Meanwhile, on Facebook, I trailed Michael Morand through what looks to be a cool Gilbert and George show at the Brooklyn Museum.Gotta love 2.0.

Speaking of, I was moved by the personal appeal from Jimmy Wales to donote money to Wikipedia. They've been slow to raise $6 mln Obama style, and if anybody deserves a little donation, Wikipedia does. Where would we be if we had to go back to Googling things to do basic queries? That's a donation that will pay for itself lickety split.

Wednesday, December 24, 2008

Yule love it

After a calm day of work with no one
else in the office, Metro North
almost has me to my holiday home,
where I will not need to feign
surprise when my children open their
presents: I have absolutely no idea
what Santa has gotten them, though I
can make certain predictions:

* There will be plastic
* Some will be made in China
* I will have to assemble and

figure our packaging
Let's check back on Friday.

Tuesday, December 23, 2008

Tunnel Vision

Despite the holiday coming up, am living in MS World, from Word to Powerpoint to Excel to freakin Outlook, bullets, tables, bold, italics.... the whole nine. Boring as hell.

And our little document keeps right on growing. Soon it will be marked up with the blood of unsuspecting holiday readers, and then we will compile the bitch, print it, bind it, and send it on its merry way. The great cycle of nature will continue... for another paycheck, at least.

Out on the Turnpike today nothing of note. Traffic, but what do you expect?

In the markets, I'm encouraged by the continued progress of the Ted spread (the spread between 3-month Libor and 3-month T-bills), which everybody was treating like something to take seriously back in October and now only a few bloggers seem to care. Banks are getting more and more willing to lend to each other, it's just that the generalized arm-waving and hair-rending of every freakin talking head in the world has got it to where nobody will buy anything, not even a shake to go with that burger and fries.

Monday, December 22, 2008

Suburban man lost

I went downstairs at 12:05 to get a sandwich and the crabby guy who works the sandwich line in the deli next to Deutsche Bank was like: "Sorry, man, we're not open for lunch yet." Did I mention it was 12:05? So I went outside to the schwarma cart and the guy is hard at work grilling up a batch of instalamb. Finally a guy down the street had some schwarma going on, but I had to walk around and it was cold as the dickens, I tell you.

Is this what they mean when they say Wall St scorns the retail investor? Seems like it might be.

Friday, December 19, 2008

NJ Transit, NE Corridor, 5:43 outbound

Today on this rush hour train I was in a car that was maybe 20% full. Now, lots of people stayed out because of snow (and the scarcity of transactions) and I had to walk back a car to get to the one I was in, but all that notwithstanding, that's an empty car. In general, the trains are hauling fewer people. Today on the 7:43 inbound I had the seat next to me free for my bag and papers. On the 6:46 inbound earlier in the week, same deal. For either of those trains in 2004-2007, you woulda had to have been queued up precisely and asserted your way into the boarding passenger flow to get a seat at all.

No doubt about it, macroeconomic shit is fucked up here in the metro area.

At the Olive Mays market on Nassau St, shelves are freakishly bare. OK, the store kind of sucks, but they've got a buit in walkable customer base, it shouldn't be hard to make money there, and here they are unable to fund inventory. That's just not good.

Wednesday, December 17, 2008

Back to East Setauket

My luxuriously speculative post on Renaissance Technologies, the meat of which is below, got some attention quick. In fact, about an hour after I posted it, it got its first hit from a server in East Setauket, Long Island belonging to a certain... Renaissance Technologies. Which means that RenTech is running a proprietary bot to scan the web or just the blogosphere. It found my blog long before a Google bot from Mountain View trolled by. Most corporations -- for example our old friends TIAA-CREF -- outsource this kind of brand vigilance to other firms, but quant funds like to develop and manage their own technology.

So who's next? Who's another big fund that's opaque, has an incredible mystique and is hard to get into, and gets unbelievably consistent results. How about Renaissance Technologies? What, everyone will say, Jim Simons is a genius and he hires only quant nerds (a syllogism if ever there was one), who are incapable of guile, right? Where Madoff acted smooth by appearing to charge no fees, only collecting commissions on the brokerage side, Simons' fees -- an incredible 5 and 44 -- could just be another way of projecting specialness and uniqueness.
Felix Salmon points out that Fairfield Greenwich is a feeder fund for RenTech as well as Madoff, which certainly doesn’t convey a rigorous stamp of household approval, given the laxity of Fairfield Greenwich’s "due diligence."

As to the other affinities between quant funds and Madoff, consider this. Quant funds, while not necessarily inclined to criminality, are intensely secretive (IP, indeed). I remember talking to a guy from one quant fund who said that the place was so tight lipped that two guys worked on a desk together, developed strategies together, yet one of them got married and didn't tell the other one until he let it slip eight months after the fact because his partner "had no need to know".

The actual probability of RenTech being fake, despite my fanciful conjurings, is negligible. But the probability is less low that there will be fraud turned up at a seemingly pure black box quant shop. Unless there’s already been one that I missed because I was too busy working.

Tuesday, December 16, 2008

Crowdsourcing Obama security

Reading about preparations for the inauguration and how hard it is to do interagency coordination, makes me think about how blogs and wikis could be used to enhance awareness of threats.

There could also be a risk of spreading disinformation, but presumably a wiki could mitigate that.

In other news, got an Alaska quarter today and put it in Natalie's quarter map. Now all we need is Hawaii and we'll have the nifty fifty. Which is huge.

Monday, December 15, 2008

Who's next?

I don't know why I'm surprised that Bernard Madoff lacked the decency and integrity it would have taken to kill himself. Clearly he's not Japanese.

So who's next? Who's another big fund that's opaque, has an incredible mystique and is hard to get into, and gets unbelievably consistent results. How about Renaissance Technologies? What, everyone will say, Jim Simons is a genius and he hires only quant nerds (a syllogism if ever there was one), who are incapable of guile, right? Where Madoff acted smooth by appearing to charge no fees, only collecting commissions on the brokerage side, Simons' fees -- an incredible 5 and 44 -- could just be another way of projecting specialness and uniqueness.

OK. RenTech files 13fs. Could they not be faked? I dunno.

Dance revolution

What can I say. This came to my attention via the New York Times Magazine, somebody remarking on having found it on their 14-year old's desktop or bookmark list. The song is cool, you can tell immediately the band, Tomboyfriend, is Canadian because they're so beholden to The Arcade Fire. But then, on Myspace, they don't cite their Montreal predecessors as influences. And their other songs suck. So how did the editor find this gem?

In any case, all these clips of teenagers frolicking around takes you back pretty good. It's rather unartificed and heartening.

Sunday, December 14, 2008

Gaps in the big fabric

Just when you think the internet and YouTube have everything you'd ever want to see, you find gaps. This evening, I found myself wanting to sample Bill Russell hosting SNL back in what turns out to be 1979, where he did a skit called "The Black Shadow" parodying Ken Howard's The White Shadow. Howard plays a liberal white coach who comes to an inner-city (pre hip-hop) high school and coaches a team to an understanding of discipline, manners, and not getting chicks pregnant. He bails them out and plays the father figure.

In the Bill Russell segment, Russell plays a black coach who comes to a suburban high school, where his players teach him the value of discipline, manners, and not getting drunk on cheap ripple. Russell will hear none of it and blames it all on racism. In the classic climactic scene, he turns to his mom -- also black -- and says that she doesn't love him because he's black. It verges on being Chappelle-like.

Hanging the lights

Graham and I have just put the lights on the tree.  As I always have, from days growing up in NC, I hung them counterclockwise.  This year, I noticed a suspicious tendency of the lights to bend inwards and the clips of these strands (from some Arkansas-based retailer whose name I can't recall), to be on the outside.  I recalled this phenomenon from years past, as we've had these strands since we've been in NJ.  And it occurred to me that they were, in fact, designed to be hung clockwise.  Too frickin late for this year, I'll tell you that, as Graham and Natalie are all revved up to do ornaments.

Friday, December 12, 2008

Tales of Moscow

Reading the Economist's survey of Russia on the country's demographic troubles -- high alcoholism and low life expectancy and birth rates -- reminded me of Katya, friend of my roommate Oleg on Ulitsa Vavilova back in the day of my dissertation. Katya was rail thin, maybe 26, a student at a theological seminary (like they would ever let her be a priest), mother of four with a junkie rock and roller husband. In the afternoons she would often come by the apartment just to sit around and smoke. It was kind of a pain in the ass, but I understood -- it was the only place she got any rest in that smoky, dusty, chaotic capital that was not so long ago likened to a big village.

One day Oleg and I went out to the "suburb" where she lived to get something, maybe an old TV they needed to get rid of because it was taking up too much space in the "one room" apartment. That is, one room plus kitchen and bathroom, for a family of six. So we took the subway to the end of the line, got on a rickety old bus, walked half a mile to a typical Brezhnev era building, wrapped a television in some stout wine, drank tea with Katya and her mother and maybe bought her husband some cigarettes or something, and reversed those steps to get the TV back home. Good livin.

Thursday, December 11, 2008

Wall Street acrumblin down

So we were low on paper at the office the other day, and Alan headed out to the nearby Staples on to buy paper. Then he calls back up to the office, confused about the location. Turns out, it's gone. Staples axed the branch for whatever reason, same store sales are down, it's got another location 8-10 blocks away. Point is, Wall St can't support two Staples stores. Chew on that.

Take him out back and shoot him

That's what needs to be done with Blagoevich.

As time drags on the threat of armed insurrection in the United States feels less and less distant. People have been buying a lot of guns, theoretically at least to outrun changes in gun law under Obama. From what I see out in the comment boards of news sites, that's not what a certain portion of the populace has its mind on.

Tuesday, December 09, 2008

Ill tidings

My firm has a meeting monthly where we wow one another with our powerpoint skills and witty repartee, and it's always held in the same place, a conference center and restaurant right nearby, the Bull Run. Imagine our dismay to learn that, on minimal notice, we weren't meeting there because the place had filed for bankrupcy. Gives a whole new meaning to "breaking the glass".

Which is actually fine because I was pretty much sick of their food, though the sliders were OK and the chicken quesadillas perfectly edible, and last month they even broke out crab cakes, by gum! And the french fries were, by repute at least, quite tasty. Alright, I suppose it could have been worse. It could yet prove to be.

Monday, December 08, 2008

The Rabbit of Seville

Pulling that martian Bugs bunny footage the other day inspired me to dig into the YouTube archives for Looney Tunes and show it to the kids. The cartoon below, whose title is above, is far and away the favorite for them, particularly for Graham, who can scarcely sit still when he watches, running instead across the room and banging into the wall. Admittedly, he does that for lots of videos.

You heard it here first

So NBC wants to move Jay Leno to a 10pm slot, we're told. There are lots of reasons to do this, including, importantly, that it's cheaper to do live TV than to do dramatic serieses. But just as much of a driver has got to be that the population is aging. The baby boomers are starting to retire, and why should they have to stay up till 11:30 or whenever he's on to watch his rapier-like zingers? I think they should move him till 9.

Friday, December 05, 2008

What if Blogger goes down?

A good day in the markets, I'll take it. But still, these days I find myself looking around at aspects of my life and thinking: is it bubble, or is it not?

It is disquieting at times to think how the contours of my for-profit career conform with those of the bubble: starting in April, 2000, weeks before the first big down day of that correction (last one in the door), ending... well, hopefully not soon.

Through the housing bubble we all looked at house prices and said "this doesn't seem right." It was standard dinner party fair, giddy with disbelief over how paper rich we all were. So we knew it had to end, we just didn't want to be right.

And now, when I think of the things that seem bubblelicious, the first thing I think of is social networking: Blogger, Facebook, MySpace, LinkedIn, Wikipedia, YouTube all this great stuff we get for free and take for granted. Where are the business models? We have to look at 2.0, with its largely unfounded business models, and say it also doesn't seem right, though it feels so right. Mark Zuckerberg at Facebook wanted to let employees cash out a little stock at a valuation of a quarter of what Microsoft bought a stake for last year, but he had to cancel it because even at that level he couldn't find buyers. Facebook offers Twitter $500 million but Twitter says no because it has a secret business model? Please. LinkedIn stands on its own, and maybe blog engines cost nothing. Wikipedia has been slowly trying to crowdsource $6 mln for weeks, and it's coming together step by step.

Seriously, where would we be without this stuff? I'd be hurtin.

What else could go?
Municipal yard waste pick-up?
Address stickers from charities?

Seriously, we get a lot of free stuff now.

Thursday, December 04, 2008

Very angry

So this is my first post using Mary's sleek new Mac, which replaces the piece of shit Dell that we bought 2-3 years ago and then froze up and died for no good reason whatsoever, save for the fact that it was a piece of shit Dell.  This thing is nice.  It looks nice.  It sounds nice.  I even think they might have injected it with new car smell.

But I am quite angry with how ornery it's being about hooking up the native email client to Verizon.  It made me angry, very angry.  When I found the instructions at Verizon (placement was not intuitive), they were pretty simple and straightforward.  Servers should be and   Not rocket science.  But the program doesn't want to talk to the server.

I mean, I've got a connection, right?  I'm typing over it right now.  It should work.  What do I have to do, go out and snag a freeware email client right off the bat?

For an explanation of what I mean when I say that I'm "very angry," watch the classic bugs piece below starting at about 6:15, if you can't watch the whole thing.

Wednesday, December 03, 2008

Things fall apart

Deferred maintenance, that one time bugaboo of university campuses, has set in in the office hotels of Wall St. At least ours, that is. As 2008 has dragged on, the place has been slowly depopulated, dropping from maybe 85% occupancy to perhaps 55. So revenue is scarce, and the 2nd law of thermodynamics has kicked into gear.

For some time now, the sensor that you walk under when exiting the secure area into the elevator and rest room lobby has been broken. You have to press the button on the wall. And you have to really press it right.

The carpet by the leatherette sofa is worn and rent in one spot.

But what beats all get out is the bathroom stall enclosure on the floor below ours that was ripped from the wall up by its upper hinge and leaning precariously. The nice young lady at the front desk was not aware of this, but she smiled and dialed when I told her it was a lawsuit waiting to happen.

And yet, there are signs of life in the old hotel. This afternoon a happy lot of polycultural folk took occupancy of a couple of vacant offices near us, and I saw other prospective tenants being given the tour. Have they had to dramatically reprice? Not unlikely. But it's good to see new faces in there, even if they're going to compete for space with us. I may just make them a casserole.

Tuesday, December 02, 2008

In the trenches of the credit wars

My cell phone rang this afternoon and I picked it up, surprised to see a 202 area code. Imagine my surprise when -- after hearing a few beard follicles brush roughly against the mouthpiece at the other end -- a distinguish male voice introduced its owner: "Hi Graham, this is Ben Bernanke, do you have a minute?"

"Why... sure," I said, not really knowing what was next.
He continued "I just wanted to reach out to you this afternoon to see if you had any credit needs that I or the Federal Reserve might be of service with. Is everything OK with your mortgage?"
"Um.. yeah"
"How about your Home Equity Line of Credit, your car financing, your student loans, your credit cards, is everything ship shape?"
"Pretty much, considering"
"Spot on! Glad to hear it. Let us know if we can in any way facilitate any uncrunching, you know, any tools you need to leverage to deleverage, alright?"
"You know I will, yes sirree"

Monday, December 01, 2008

A Profession of Faith

The other day it was snowing lightly early in the morning and Natalie stood by the window bursting with energy and excitement: "It's snowing for the second time and it's only November, and this time it's real snow, unlike the snow in October."
Perplexed, I asked "What do you mean?"
"Well," she says, "In October the flakes were to big and wet, but these are small and snowy." As she bounced along in seventh heaven, it occurred to me that she had absolutely no idea that the financial world was imploding around her, and that this was entirely as it should be and it meant I was doing my job right.

Nor did I understand much, when I was her age and even much older. I remember lines along Airport Road to get gas back during the gas crisis in '74, but I thought that was normal. I remember in 1979-1980 reading about how American competitiveness was suffering next to Japanese and German industry, but it was all very abstract and didn't really concern me. I vaguely remember Son of Sam, but I fully remember Fernwood Tonight and David Letterman's daytime show.

It is only now that the economics of the late 70s and early 80s have come into focus for me. And so, in 1981, in the midst of a recession, after her business was destroyed by the Reagan election, with a husband who'd sooner pull into the driveway in a surprise sports car than contribute to paying the bills, it seemed entirely natural to me that my mom should send both her kids to England, then Switzerland, including the Diana-Charles wedding. And only now do I understand what it took to pull the trigger and assume the cost of sending us over there, and what it meant from an "asset allocation" perspective.

Chew Your Grouse

Eat your pineapples,
Chew your grouse,
Your last day is coming,
You bourgeois louse.

-Mayakovsky, 1913
I wrote my senior essay in college on Mayakovsky (with Esenin thrown in on the side). At that time -- rattled by my parents' divorce, disillusioned with Reaganism and the absence of a good path of resistance, threatened by AIDS, terrified of the prospect of getting a job, entranced by the ladies -- the boisterous eschatological vision of Russia's most energetic, all-embracing and snazzy avant-garde poet held a lot of appeal. And much of his early work, like the "chew your grouse" poem, focused on arresting the cycles of bourgeois being, on bucking against continuity. Another famous line was "I love watching children die." I thought that was a little strong, but that's what he was like.

And when, after the Revolution, Mayakovsky channeled his dynamism into an inferior body of work that nonetheless captured the real excitement of the era, that was cool too. Here's a passage from his 1928 poem "The Story of the Pipe-Fitter Ivan Kozyrev, Upon Moving into his New Apartment"

Vse khorosho.
No bol'she vsego
ponravilos' --
belee lunnogo sveta,
chem zemlia obetovannaia,
eto --
da chto govorit' ob etom,
eto --

It's all good.
But what pleased
most of all is --
whiter then the light of the moon,
than the promised land
that --
and what more is there to say about it,
that --

The bolded parts of the Russian text show that, with a characteristic virtuoso turn, Mayakovsky had rhymed "bathroom" with "promised land" because that was really the deal: for Russian peasants who had lived in huts with outhouses for all too long, indoor plumbing and heating was huge, it was in fact the promise of the Revolution. And so, Mayakovsky came back around to touting the virtues of certain basic bourgeois comforts, and recognized there was almost transcendent value in them.

However, the Revolution was not going all that well on all fronts and, on April 14, 1930, Mayakovsky blew his brains out.


At the other end of the spectrum, America came over the course of recent decades to believe that Granite countertops and manifest destiny were in their own way interchangeable. The chicken in every pot had to be free-range and the pot Williams Sonoma.

And yet, if I look back to 1981 and compare how we live now to how we lived then, in every way we live better, and no matter what the indices do in coming weeks and months, all of that's unlikely to evaporate. We will still have the internet, and netflix, and extra virgin olive oil, and sriracha, and cars that hardly ever break down, and better math instruction, and so on. With good leadership in the White House, there's hope for progress of some sort, if not immediate economic solutions.

And so I find myself at peace in the land of Cheever, and find that the perpetuation of the middle class -- what was called "reproduction of the social means of production" during my Marxist phase -- is as high a calling as you'll find.

But it's also a pain in the ass.