How it should work

I am still very much in the adjustment phase of getting up and getting to the office by 9, or 9ish, technically. And, frankly, to having someone in my office when I get there. The former is largely a burden though I see the benefits, the latter almost entirely a joy, though some facets of my productivity suffer a little. For instance, my blog.

A few weeks before at the spring musical extravaganza of the Prime Time Players, my mom's theater troupe, at intermission time a guy came up to me. It was Henry (not his actual name), a Chinese friend of one of our former partners who is a biotech entrepreneur but also an avid ping pong player (though he might prefer I call it table tennis). There's a lot of this sport played at the Seymour Center by people of a wide variety of ethnicities. In the my first summer of work for Red Reef Advisors, the partner informed my that we were going to bring in Henry's son Ted (a Duke student) as an intern. Not being used to having interns, I wasn't altogether delighted by this but what was I gonna do?

So Ted came in most days and sat with me at the office, and as I was doing stuff I explained to him what I was doing, and in the course of so doing he got a solid basic grounding in a lot of principles of finance. Asset allocation and location. The difference between capital gains and ordinary income tax. The logic of tax deferral in a person's lifetime earning's arc. These are the kinds of things that come up quickly. Turned out the kid learned a lot and found the internship valuable.

Flash back to the Seymour Center. Henry, who was playing ping pong, comes up to me and says hello and tells me he has some financial questions. "I have a financial advisor, but I'd like to call you to discuss some issues." I gave him my card.

This is how things are supposed to work. Maybe he'll be a client soon.

The Lack of Light

On my birthday a month and change back this 2022 novel (English translation 2025) by Nino Haratischwili arrived wrapped under my birthday tree. Apparently it had been on my Amazon list, where it likely landed after being on the Economist list of best books of the year or something like that. Honestly I don't remember. 

Clocking in at 700 pages and change, one of its many cover blurbs likens it to Elena Ferrante's Neapolitan series. Honestly that may be a stretch, but it was still quite solid. 

The Lack of Light chronicles the trajectory of post-Soviet Georgia and Tbilisi through the prism of four female friends who grew up around one apartment building and its courtyard. In my mind's eye it's a Stalinka, a sturdy building from around WWII but before the dawn of the shoddy neo-modernist buildings which sprouted all over Eastern Europe like shitty quadrangular mushrooms from the 60s forward.

There's a lot of drama around civil war, love, internecine gang wars in which the four protagonists' brothers are engaged, art etc. It's solid and worth reading, if ultimately as much Oprah as Ferrante. Sadly, there are no really compelling description of khachapuri or other delicious Georgian foods. Good enough that I may check out the author's other books, but I won't sprint out and grab them.

Leaning in to AI

The invited speaker at Graham's UNC Econ graduation did a great job. He himself was a UNC Econ grad who had gone on to be successful in business and he looked and fit the part. Short haircut, affable, confident. He kept it short and sweet, with three basic points. One of them was about presentations (tell them what you're going to tell them, then tell it to them, then conclude by telling them again). Sad but true.

Point 2 was that AI's gonna be big so the grads should lean in to it. On the one hand, it's hard to argue that. I keep meaning to do it. But I already have so much to do and so much that's not getting done. My blog for instance. Books to read. People to talk to, esp phone calls that don't get made. Tennis lessons I should be taking. Exercises I should be doing to strengthen my aging body. Little crap that needs to get done around the hose. So I never do it.

Should Graham (and Natalie)? Well yes, kind of, maybe. But part of me believes that the whole world is going to be leaning in to AI and maybe we should be leaning in to people to counterbalance all that AI leaning. People are what we should ultimately be caring about. (remember, the planet itself will be here long after we are gone and is more or less indifferent to our presence, on a geological time scale).

I forget what the guy's third point was but remembering 2 of 3 is far from bad.

Power law in the new new economy

As the newest models of AI enable hackers to run more and more effective models against corporate AI at scale with lower headcount and higher possibilities of payout, questions of values and alignment all up and down society become ever more important. People need to believe in what they are doing and there has to be an ethical grounding to their activities for a substantial chunk of the most talented to wish to forego the very largest paydays, work for a salary and pay taxes. The system has to seem to work for a lot of people for us to want to participate.

With Trump continuing to substantially run roughshod over most of government (witness this week's $1.776 billion "anti-weaponization" settlement from the IRS) and our corporate titans ever more untethered from reality (witness soon-to-IPO SpaceX's corporate structure which gives unprecedented power to Musk, and even the S&P 500 bending over backwards to revise its rules to include the new IPOs [OpenAI and Anthropic too]), we are not encouraging abidance with rules, norms or values. Raw power is in ascendance.

Something will break, and it won't be pretty.

Some reflections on local fauna

I wonder where we are in the long-predicted bird-pocalypse. Out on the porch in the mornings these days I hear a variety of birdsong.

Some light Googling tells me that the declines in bird populations across America continue. 2.9 billion birds gone since 1970, says the Cornell Lab of Ornithology, a loss of 1 bird in 4. I suppose we shouldn't be shocked given that there are a lot more humans and a lot more built environment in which we live. 

So they have less environment in which to live. It sounds bad, but maybe it's not all bad. We have more deer living everywhere, but they're skinny little things and it doesn't look like they're having much fun as they munch through everything they can see.

Interestingly, Mary has been seeing some mink in our yard recently. Given that mink love to eat bunnies and we haven't seen many bunnies this year, Mary has hypothesized that the mink have gobbled up the bunnies and taken over their dens. Good of them to do that away from our curious but squeamish human eyes.

Summer residence

Just now I find myself back out on our screened in porch, looking out at the lake. I posted a picture of it back in April. It looks much the same now. Since the pandemic I have spent as much time out here on the porch as I can during the warmer months. Right now is the key window: we are past peak pollen season (I think! famous last words) but before peak heat.

There's still a tablecloth on the picnic table out here left over from our party we had for Graham's graduation last Saturday. It didn't end up being that many people: 15 or so including family plus a few of Graham's friends plus their family members. But that turned out to be a really nice size, plus the weather was perfect.

In the lead up to the party I had gone out to pick up a couple of bags of ice to throw in the cooler with drinks. My phone rang. It was Mary. "Are you close to the farmer's market, can you pick up flowers?" I had to make a U turn so I gave her a good snarl and let her know what an unthinkable imposition it was. Then I went to the market and bought some really lovely flowers. When I got back home I presented them to her with dulcet tones, "here you are, darling?" and she laughed.

It has been a beautiful thing over the years to get to the point where we can do this: get really snippy with one another in the lead up to parties as we stress out over getting things right, then just drop it all because we know by now that it's all part of our particular petit bourgeois kabuki.

Continued adjustment

I continue to adjust the rhythms of my life to the addition of my new understudy/coworker, Amanda. For example, she gets in at 9 most days, so I have to do the same. She leaves at 2 to meet the school bus and have a WFH afternoon and I want to max out the utility of face time.

Right now there's the additional complication of the fact that D, a neighbor guy who can do almost anything (details to follow) who is renovating our two downstairs bathrooms, which have remained more or less as they were when we moved in to the house in 1978 or so, so in my mind they are just perfect. Mary, however, could not disagree more strongly, and she is at long last basking in the glory of justice. Below is the main hall bathroom, once more for posterity.

So I am trying to get out of the house by 8:30, which takes me back to days of yore. It also gets me in to the office while the breakfasts are still out, offering me an opportunity to harvest food and preserve it for later.

Standing on its own

Just went through Graham's graduation from UNC. A lovely weekend, but one populated with an awful lot of speeches. A few reflections.

First and foremost, there were all too many references, direct and obligue ("we wear the RIGHT shade of blue") to Duke. Defining ones self by comparison to others is an inherently self-denigrating and slovenly thing to do. UNC needs to be who it is and not worry about other institutions. 

Instead of defining ourselves in terms of Duke, we might do better by looking at positive examples of what the university should be. It was telling (and to his credit, I might add) that only one person thought to invoke Dean Smith, Eric Church, the apparently famous country singer who gave the main address at the big ceremony at Kenan Stadium. In three ceremonies (Friday night for the History and other departments, Saturday night the big one, and Sunday morning for Econ students), nobody thought to invoke Frank Porter Graham, Bill Friday, or any other of the university's historic north stars. Big miss.

About Eric Church, he spoke well but I wasn't impressed with his guitar-playing or song-writing. He sang well.

I was very unimpressed by the fact that the university somehow granted only him an honorary degree. Typically it confers five or so of them. He was the only good person or North Carolinian that could be found? It seems there is a defined process for nominating and advancing candidates for degrees. Somehow I tend to doubt that a country singer who has raised some money was the only good candidate who could be found. This looks all too much like the Board of Governors saying to the faculty and the rest of the community: fuck you, we're in charge.

A few words about Lee Roberts, current Chancellor and a Duke grad. He came across as a total stiffy. He said "Go Heels" with all the enthusiasm of the McDonalds CEO biting into that Big Mac. The only time he seemed genuine was when he was introducing Eric Church, whom he noted was "a real North Carolinian," unlike Roberts, who grew up in DC. Roberts does not belong at the helm of a major university.

Herd instinct

Talking to Robert sometime recently, he mentioned some short-term social decision that he "just wanted to do whatever the most people wanted to do," really so as to have a nice time and interact with more people. It occurred to me that that calculus had never been natural to me. 

Similarly my client Martin from a large state university noted that since from the university's perspective the job of professors was to put "butts in seats," from a career perspective it made sense for professors to select mainstream areas of focus within their fields: Shakespeare, Goethe, the American Revolution, macroeconomics, etc, because that would help their departments maintain enrollments and compete successfully for budget. But for the most part young academics want to do something new in their field, to produce distinctive and innovative research, so they're always scouring the corners for some fresh topic or at the very least angle on something familiar. I know that's what I did, though admittedly what I wrote about (Turgenev) was mainstream-adjacent in my field, a top 10 writer if not top 5.

It seems rather obvious that there's a virtue to being close to the core, to the herd. But it runs so very counter to my instincts in all matters except UNC basketball, an even there as some of my friends will tell you I'm not that great a fan.

As Graham steps out into the world teaching him to find ways to at least selectively assimilate to the mainstream will be key. He has at least discovered, as I kind of did back in the day, that sports statistics and knowledge can be a bit of a gateway drug.

Gearing up for graduation

Graham graduates this weekend and we are getting organized for the big event. Actually, there are three events. He came over this evening to try on outfits to go with his cap and gown and I was able to snap this quick preview. 

And now it is time for dinner.

History in the Present

Some months back I had lunch with an older financial planner (yes older than me, imagine that!). Great guy. "I never read the news," he tells me. Reading my surprised expression, he goes on "Well think about it, when was the last time you made a good investment decision based on the news." No argument there.

And yet, I still read the news, not that closely, mind you. At the other extreme I remember guys who used to work at the Mutual Series Fund managed by Michael Price (apparently legendary though I had never heard of him at the time). Price would quiz the young guys at his firm about the details of specific stories from the Journal, stories which may have come out in the second edition of the paper later in the morning. He expected them all to have read the whole thing, including the later edition. Admittedly the guy has largely faded from memory.

Certainly I don't read the paper to think it's going to help me make market-beating decisions on the day I read it. That's not happening. But I do think it's important to be somewhat up to date on the news because what happens today constitutes history as it transpires. For example, as I was writing yesterday's blog post I thought to myself: "have I broken out this story about the fifteenfold increase in Airbus market share back in 1983?" Turns out, I had, in this post from 2007. That is of course drawn from deep prehistory, back when Paulson was still the CEO of Goldman Sachs and when Sachs bestrode the world, before Paulson as Financial Crisis-era Secretary of the Treasury had gone down on bended knee before Nancy Pelosi in front of many other congresspeople and implored her to help him and move the $700 billion TARP through Congress, which saved the banks and kept the wheels on the economy but gave us the Tea Party which...

Also, we should note that Paulson was arguing at the time in essence that the strictures placed on US public companies by Sarbanes-Oxley (post the accounting scandals that brought down Enron, Worldcom, Adelphia, Tyco, Arthur Andersen and others) would force companies to list in Europe rather than the US. Turns out it didn't happen like that. Companies didn't list in Europe. Instead, they didn't list at all. An altogether new era of private financing (private equity, private credit) dawned. Now a lot of money is trapped there and deep-pocketed individuals and institutions want to translate their paper gains into liquidity. We'll see if it works. Opinions vary as to whether it's feasible.

Fifteenfold

Sometime last week I was reading something about China's Yuan (AKA Renminbi) becoming more and more acceptable and accepted as a way of conducting trade internationally, which moves it closer to becoming a plausible reserve currency and a challenger to the dollar's primacy. As of now the dollar still dominates a 58% share of global trade but that's down from 70% at the turn of the millennium. The dollar's dominant position constitutes the US's "exorbitant privilege," that everybody needs dollars to settle trade which creates demand for dollars and therefore makes it cheaper for us to finance everything than it otherwise would have been.

So the dollar still dominates but... Many around the world are pondering this question.

It takes me back to the fateful moment over 40 years ago. There I was in my interview for the AB Duke scholarship at Duke.  I was arguing for a National Industrial Policy in support of Robert Reich's proposed program for one. European champion Airbus's share of the large passenger jet market had gone from 1% to 15% and I had written that its share had increased "fifteenfold." A fact. The professors pressed me on this, asking me if 15% really constituted a threat.

Lockheed Martin exited the commercial market a year later. By 1997 McConnell Douglas had been eaten by Boeing the last company standing to do battle with Airbus.

So funny things do happen as small numbers grow. Right now the yuan/renminbi has a 2% share of global trade. It doesn't sound like much but one never knows, does one?

Paths in the Woods, pt 2

A few weeks back I was up at a guys' weekend at a friend's lake house. It was pretty cold to ride bikes so after breakfast most of us went for a ~3 mile walk to burn off breakfast. Then came lunch. I had a really impressive seafood basket. The fried oysters were top notch, the fish was solid. The slaw sucks, but that's almost always going to be the case now that I'm in the habit of making my own.

After lunch most of the guys settled in on the couch to watch rando NCAA tournament games. I was pretty full and knew dinner was coming so I tried to drum up interest in a second walk. No takers. I headed out on my own. This time instead of turning left down the road I turned right, went to the end of the road and headed into the woods.

The woods there have gone through phases. For a time little was happening. This lakeside subdivision had paused for a decade and change post-Financial Crisis but has kicked back into gear in recent years. Lots have filled in, including some on distant lots reached by roads that run behind this subdivision out to secluded lots suitable for big, fancy houses. I had bushwhacked through these woods back from those lots while they were still fallow years back. In the interim I had seen some ATV trails once or twice.

By now those have gone away, but as I stepped through the first stands of trees I could see a clearing off to my left. I headed off towards it. I found myself walking within an alley where trees had been cut but little pine saplings grew from the ground. It lead to a round clearing, from which more alleys with baby pines branched off. I walked these. Clearly, some developer was looking to the future and had sent in backhoes to clear roadcuts for future roads and courts, but then had hit the pause button (hence the saplings, some of which were chest high). The future beckoned, if uncertainly.

Paths in the woods

Not for the first time, the other night I dreamed about secret paths in the woods near my house. I have a recurring leitmotif in my dreams, for instance, about paths high up on the hill above the south side of Eastwood Lake, paths which lead to a hidden castle, really more of a chateau, which may serve as a private school or some other vaguely esoteric function, depending on the dream. I also dream of paths into the woods there branching off of Ridgecrest. Similarly, my sleeping brain at times conjures jogging trails leading from the north side of the lake over towards Carolina North, which itself of course contains a rich system of trails that I still haven't fully mastered and which we referred to as "The Woods" when my childhood neighborhood backed up to it. I have written before about how The Woods was a quasi-mythical space in my childhood imaginings.

In recent months, as I continue my pre bedtime wanderings through YouTubeLand, sometimes traveling with Noralee of Itchy Boots wherever she is in a given season (currently the Southern Andes), sometimes watching the Australian Alexander Campbell walk through Asia, I wonder if I have reverted to my childhood ways, when I would engage the world through the World Book encyclopedia and dream of the outside world, but in many ways the imagination of it sufficed. I've travelled a fair amount over the years, not as much as others, surely, but more than most. By now I like being at home quite a lot. I still enjoy travel, but I have less need of it than once I did. 

Our summer travel schedule has not yet firmed up. I had been thinking Japan but it seems to be having its Portugal moment in which the selfie sticks of the world converge there. I've been trying to talk Mary into flying into Istanbul and driving from there to Tbilisi, Georgie, probably in September. We'll see how this goes.

Adults and children

I for the most part enjoyed Dwarkesh Patel's recent interview with Nvidia CEO Jensen Huang while listening to it in the car (No way am I going to waste two hours of video time watching two guys like this talk). Without a doubt, the best part was hearing Jensen beat Dwarkesh down when the youngster was advancing simplistic arguments. Much as Stephen Kotkin -- when appearing on Patel's show to discuss his bio of Stalin -- had impromptu started in calling Dwarkesh "DP" or maybe even "DK" to put him in his place a little.

Dwarkesh is no doubt a force of nature, an impressively smart guy who reads and studies prodigiously and gets a parade of really smart people from diverse places come on his podcast. But he more than anyone epitomizes a trend exhibited at times by the haute technoscenti to talk 175 miles per second out of the apparent belief that their time and that of their interlocutors and listeners is so valuable that it must be optimized through machine gun staccato speech. So that software engineers become "SWEs" etc, because the thoughts just must must must come out.

The big bone of contention between Jensen and Dwarkesh comes when the youngster shows that he has bought hook, line and sinker the neo-Cold War logic of restricting the export of top of the line Nvidia chips to China. We all kind of have. It's hard to think our way around it. Jensen pushes back, insisting that there is much more to AI than chips ("it's a five-layer cake") and that by restricting the export of Blackwells and whatever the next-gen top Nvidia chip to China, we are forcing their champions -- first and foremost Huawai, it seems -- to build around their absence and create an AI stack that will be quicker and will come to dominate AI in the global south. 

I'm honestly not sure who's right here, but I know who the adult is in that room, and certainly Jensen has good points. Fundamentally he is also right that we need to foster more interplay and dialogue between US and Chinese researchers as a counterweight to the Sturm und Drang emanating from the top of the political establishment on both sides of the Pacific. I have heard that the Chinese people are even more jingoistic than their leadership at this point in time. Points of lower-level interchange between our societies are dramatically less in evidence than they were 10-15 years ago. We need to have contact all up and down society to remind ourselves of what we are dealing with (another nation where people want to live and raise families and eat and sing and sleep) to offset the power-crazed ideologues and those who want to be inscribed in the Book of History as Big Men.

Country Bauhaus

Mary and I are continually looking for the next Sierra Ferrell, someone with a voice and a sensibility that will transfix us fully. So we find ourselves browsing around YouTube, helped of course by the Algorithm.

Haley Bonar is not this artist, I don't think. And yet there is something special to the first song of her Tiny Desk concert, "Hometown." It is perfectly uniform. Standard rhythm (no syncopation or other embellishment), standard chord sequence. Even a perfectly classic verse chorus verse chorus bridge chorus structure. It is beautiful, lyrical, wistful, she has a lovely if ultimately not super-distinctive voice.

Underneath the beautiful surface, however, lurks a deep irony. Let it burn in the rearview mirror. Love it and leave it. Herein lies the genius of the song, the tension between a shimmering skin and a core of intense and violent conflict.

I am reminded of Adolf Loos' 1910 Bauhaus manifesto Ornament and Crime: "We have out-grown ornament, we have struggled through to a state without ornament."

Less is the new more

On Mondays they bring in bagels from Brandwein's to our co-working space for breakfast. Typically I grab one, archive it in one of the plastic food containers I keep in my filing cabinet, then take it home for the next day's breakfast. Rather than eat a whole bagel myself, which I really don't need, Mary and I split it. I scramble one egg and butter the bagel. This ends up being a perfect meal. There salt on the bagel suffices, so all I just need to pepper the egg.

Similarly, over time I have gravitated towards ever simpler sandwiches. For example roast beef on rye with LTO plus mayo, or a chicken cutlet on a roll with the same combo, plus hot sauce. Instead of the endless proliferation of condiments, adjectives, adverbs, and combinations thereof, a few good ingredients.

Admittedly, this strategy works best when combined with a focus on quality purveyors and/or ingredients, which is pretty much the same thing, The chicken cutlet sandwich, for example, has become canonical for me and Natalie in two places: Nica's on Orange in New Haven and the Manor Deli in Larchmont, and has thereby ascended to the rare echelon of special meals, imbued with specific meaning, not unlike Proust's madeleine. 

Stretching it out

A few weeks back I signed up for Rainbow Soccer for the first time since the pandemic, motivated by what a pain in the ass it has been to schedule people to play tennis with since Adam went down to injury just after his 60th in November. Then I started traveling for a couple of weeks. At which point in time he came back from the injured reserves and more people started showing up to play tennis, so I still haven't made it out to the soccer field.

Adam pointed that if I did actually get out there on the football pitch, I should be careful because soccer involves sprinting for longer distances than does tennis, and I must admit he made a good point there. So on my otherwise plodding trip of the 3 mile lake loop this morning I mixed in 4 reps of striding (70-80% effort) for 70-100 meters. I figure that if Eric can go and be part of a national championship ultimate team at the age of 64, there's no reason I can't play a little soccer. But I should remind the legs of what would be asked of them by waking them up to longer sprinting.

Or, for that matter, make it out to the Godiva Club Wednesday evening to get times in some of the old distances from 200 meters to mile. I am feeling a little inspired by a video of a 65-year old crushing the field running a 54.9 400 (couldn't find it on YouTube just now). I know that ain't happening, but it was good to see. Overall seeing old dudes sprint in the short video universe inspires me. It just looks right.

A time of parting?

Amongst the least stupid things to have issued from the logorrheic jowls of President Trump might be his musing -- in the context of his tariffs perhaps making things more expensive for Americans -- that we might need to make due with two instead of thirty dolls. Many liberals as well as others -- going as far back as the original Charlie Brown Christmas Special -- pretty much agree with this sentiment. We don't need more things, we need to learn to let go of the ones we have.

Yesterday there were a couple of articles in the Journal about the booming business of storage units and how some municipalities had gone so far as to enact ordinances limiting of even banning them. When our things outgrow the substantial closets in our homes, it seems, we have a tendency to outsource the closet function to some building a couple of miles away rather than parting with our things.

At present I am faced with a similar conundrum. My 40-year old mountain bike* may have reached the end of its useful life without a major repair. It was handed down to me by my dad when I graduated from college. It belonged first to his then girlfriend who subsequently became his second wife, and for that reason it was always a little small for me and I had the seat way high up and leaned forward to ride it. For Graham's whole college years it has been his primary mode of conveyance while on campus. 

Graham took it in to be repaired recently and was told there's a hairline fracture that would need to be welded -- about a $500 job -- but was otherwise unsafe to ride. Really I should get rid of it. But it's hard to part with it. We've been together for a while.

 

*The first commercially available mountain bike, one of them graces the collection of the Smithsonian.

The Princess of Burundi

Amongst the many birthday treats I allowed myself, which included tennis with Adam, lunch with mom (Akai Hana for sushi), basically not working (I took one client call -- they needed a 1099 to file taxes), coconut cake from New Hope Market, running fewer of the errands I thought I might, I finished the mystery novel I was reading: The Princess of Burundi by Kjell Eriksson. I had snapped up this total rando whodunnit at the library a month or so back in the course of looking for something else.

A decent if not great book, it is apparently the fourth but first translated into English of the Ann Lindell series. I say "apparently" because honestly there are so many members of the Uppsala police mentioned in the novel that I wasn't sure Lindell was the focus till I looked at the author's Wikipedia page. Really it's a novel about Uppsala (home of Sweden's second oldest university) as a place, more than anything. The novel fairly brims with little moments of Scandinavian moralizing about society's responsibility to each of its members -- including psychopathic murderers -- and just little Scandi-moments: strollers with sleeping infants left just outside, people on disability from burn-out, etc. Ultimately the solution to the mystery arrives completely outside of anything the team had been investigating, in the last thirty pages, as opposed to emerging from hidden clues in the detective work they had done. Therefore the whole thing disappoints a little. 

I may read another one if it crosses my path but won't blaze a trail to it.