Wednesday, December 31, 2008
The Washington Post is running a mega-series of articles on What Went Wrong .
Shorter version: Belief in free money + general cluelessness + regulators asleep at the switch = how could things go wrong?
(via The Big Picture)
Tuesday, December 30, 2008
Monday, December 29, 2008
The QRF team is composed of 12 Marines and a medic. It is on call at all times. Its members don't shower and when they sleep, they sleep in their clothes. They are in continuous radio contact and when a call comes in, the goal is to be saddled up and ready to roll in less than three minutes. They are the firemen of the Marine Corps. Like firemen, when they roll it means the shit has hit the fan...
[Jeff] Mahaffey has been a Sergeant for a little more than a year. He carries himself with a cool and ageless confidence--one that suggests he was specially cut out for the type of work that men do in foreign lands. He's easy and well spoken in conversation, with a lively wit. He's also quick to laugh. His only regret stemming from the incident on the 21st is that his team didn't arrive a little bit sooner (the casualty was evacuated to Al Asad airbase and was only shot in the arm--he's expected to make a full recovery).
Sergeant Mahaffey is 22 years old.
Sunday, December 28, 2008
My father would check his watch, shaking the covered snapshot as if the photograph were a thermometer. Then at the right moment, with a surgeon’s delicate hands, he would separate the negative in a single motion and reveal — well, who knew what.
Because that was part of the beauty of the Polaroid.
Mystery clung to each impending image as it took shape, the camera conjuring up pictures of what was right before one’s eyes, right before one’s eyes. The miracle of photography, which Polaroids instantly exposed, never lost its primitive magic. And what resulted, as so many sentimentalists today lament, was a memory coming into focus on a small rectangle of film.
Saturday, December 27, 2008
“If the president-elect were not a ‘University of Chicago Democrat,’ then the natural response would be to just try to turn back the clock to what was there before,” he says.
“Because Obama comes out of a framework where the market is not the enemy, there’s a possibility we can create new institutions to guard against excess without going back to what was wrong in the old regime.”
Goolsbee supports bigger capital requirements for banks and other institutions that can borrow from the Federal Reserve, and wants expanded monitoring of hedge fund firms and ratings companies. Derivatives may need to be traded through clearinghouses, like those used in Chicago wheat pits, which act as counterparties for each trade and can suspend traders with insufficient collateral.
“Getting us out of the hole we’re in, promoting oversight and making investments so the economy can grow doesn’t make you anti- market,”
It's good to see so many of the brilliant people at the University quoted all together. The diversity of viewpoints and strong arguments is refreshing to see in print, but a matter of course for the institution.
Thursday, December 25, 2008
Tuesday, December 23, 2008
They have a rollicking interview up with Gary Shteyngart, fueled by apparently massive amounts of vodka:
MDM: In the day of Gleason, Hemingway, Bogart and the Rat Pack, they were very upfront about their drinking and carousing. These days artists, especially actors, won’t admit to anything. Except for maybe Colin Farrell.
GS: Yeah, he’s good. I had my book party, it was sponsored by a rich Russian oligarch and Imperial Vodka. Everyone was smashed. The woman who threw the party got up and said, “I’m sick of this shit where we’re all kissing each others asses all the time. I want to start a literary brawl, Norman Mailer style. Steyngart is my
friend, but he writes immigrant porn. Let’s just kick his ass.”
MDM: Bravo. There used to be fantastic rivalries between writers in the old days. Hemingway and Sherwood Anderson. Hemingway and Gertrude Stein. Hemingway and Faulkner. Capote and everyone.
GS: Yes! But now, nothing.
MDM: My Russian brother-in-law tells me some Russians like to spike their vodka ith a good jolt of hair spray. Is this true?
GS: Ah, yes, the old hairspray maneuver. You know who drinks like crazy? My favorite people, the Georgians. They drink from these big ram horns and each person has to toast every other person at the table. There’s the tamada, the toastmaker, he’s like the air traffic controller. A toast comes in, and he stops it and makes sure everyone is okay with it, then another comes in — it’s a fascinating job. A good tamada is like an MC, he gets hired to work parties and weddings. Their wine is like Thunderbird, really strong. It’s not for a connoisseur, it wouldn’t pass muster. When I was in the nation of Georgia, I met some guys in the government. Some mid-level ministers. We went to their dacha, this gigantic compound. They wanted me to get involved in a scheme to steal $600 million dollars from American charities.
MDM: Did they now?
GS: Yes. We drank about ten wine horns, in between vodka shots. And vodka and wine—not such a great combination.
MDM: Odd you would say that. Vodka and red wine, what we call a Brutal Hammer, is our staff cocktail.
GS: That doesn’t surprise me. Their toasts were so heartfelt. But in the back of my mind I kept thinking, they may be doing this because they think I can help them rip off $600 million from American charities. They were drinking to everything. They were drinking to my family. They asked for the names of everyone in my family and they would create these elaborate toasts to people they’d never met. They knew I was flying back through Austria, so they raised a toast to the Austrian pilot who would fly the plane. Such sweet people. And as the evening progressed I started thinking, maybe I can help them steal $600 million.
MDM: It started making sense?
GS: It started making great sense.
MDM: They’re quite ambitious.
GS: They don’t think small in Georgia.
Also, a perspectives on the value of prosthetics vis a vis peglegs, shampoo vs. hairspray as a drink additive, and the government program to encourage Russians to drink more beer. One of the most cheerful interviews I've read this year.
Saturday, December 20, 2008
It was trees all the way, properly decorated ones, with tinsel and glass balls and a star on the top. We lobbied and we lobbied hard, and we would not give up. My parents would not countenance it. They had not had Christmas trees when they were children; instead, they had parents who disapproved of Christmas trees. You couldn't, my mother told us, be Jewish and have a Christmas tree.
I was a precocious child, and I had read widely, and I struck. "But it's not Christian," I said.
"I think you'll find it is, dear," said my mother. "That's why they call them Christmas trees, after all."
"They are actually," I told her, proudly, and precociously, "a pagan relic. The trees. The thing of people bringing trees into houses at the winter solstice and decorating them has nothing at all to do with Christianity. It's from pagan times."
I'm not sure why it was better to be a pagan relic, but I hoped it was, and it seemed to shake my mother's certainty. Like my teacher, she knew better than to argue
theology with an eight-year-old.
Whether it was, as I thought at the time, my precocious argument or (more probably in retrospect), my sisters' huge, pleading eyes and trembling lower lips, I do not know, but my father went to the local market and picked out a Christmas tree for us and brought it home. We decorated 'it, and were content. Having won the Christmas tree battle, we had, somehow, won the Christmas war.
Thursday, December 18, 2008
Tuesday, December 16, 2008
It literally hurts to lose the electronic lobe of your brain. It gave me a massive tension headache and a sleepless night last night.
If I've lost contact with you, drop me a line again. Things will be returning to normal presently.
Monday, December 15, 2008
1. The aptly named Studley tool chest, designed and built by a 19th century organ repairman of the same name. Currently part of the Smithsonian collection.
2. Absinthe delivery apparatus, including this lovely spoon.
3. MAKE magazine's Christmas for Steampunks guide, featuring these inexpensive but elegant looking brass instruments.
This combination of facts about his life present you with a moral truth: great good does not erase great harm, nor do our mistakes in life cancel out our virtues. It's an unexpected finding, this ambivalence; we would hope that good or evil deeds might take root and bear further fruit, that the people we meet in this life could be easily sorted, that we ourselves could wake to find our consciences as clean as we found them, that the meaning of actions does not change in memory. This is not the case. We are all of us, many people within.
Who do you meet, in the 1,000,000+ words of Gajdusek's journals? Who do you meet on the street every day? How do you know?
Saturday, December 13, 2008
The robbers may not have been as suave as celluloid jewels thieves with the charm of David Niven — a.k.a. the debonair phantom bandit, Sir Charles Litton — but the meticulous planning, swift execution and creative style raised suspicion that the Harry Winston heist was the handiwork of a loose global network of battle-hardened, ex-soldiers and their relatives from the former Yugoslavia.
Investigators, marveling at the gang’s ingenuity, have dubbed this unlikely network the Pink Panthers. The parallels between film and reality are perhaps best summed up in zee accent and words of the bumbling Inspector Clouseau, himself from the original 1963 “The Pink Panther.”
“In a strange way,” he said of his nemesis, the phantom bandit, “I admire him for he has a unique flair for the dramatic.”
Take, for example, the current plan to blow up the American auto industry as a way to punish unions.
Wednesday, December 10, 2008
As one contemplates the life and work of Georges Simenon, the question inevitably arises: Was he human? In his energies, creative and erotic, he was certainly extraordinary. He wrote some 400 novels, under a variety of pseudonyms, as well as countless short stories and film scripts, and toward the end of his life, having supposedly given up writing, he dictated thousands of pages of memoirs. He could knock off a novel in a week or 10 days of manic typing — he never revised, as the work sometimes shows — and in Paris in the 1920s he is said to have broken off an affair with Josephine Baker, the expatriate American chanteuse and star of La Revue Nègre, because in the year he was with her, he was so distracted by his passion for her that he had managed to write only three or four books.
He put himself in the way of many such distractions. In 1976, when he was in his 70s, he told his friend Federico Fellini in an interview in L’Express that over the course of his life he had slept with 10,000 women. True, he was an early starter. He lost his virginity at the age of 12 to a girl three years his senior, who got him to change schools so that they could continue to see each other and then promptly threw him over for another sweetheart. Young Georges had received his first lesson in the school of hard knocks.
Monday, December 08, 2008
Until the causes of the meltdown are fixed, anything done to repair the damage is no better than pissing in the wind. The successor management teams at each of the big financial firms needs to live in dire and holy fear of a perp walk into federal custody. Anything less isn't going to provide an adequate counterbalance to the forces of unbridled greed that rule the street.
Sunday, December 07, 2008
Examples: Fire the help, downgrade to first class, sell their extra houses for half price, find out "where coupons come from"
Others, perhaps better grounded, look at the upside:
“I may be the only one who’s thrilled by this recession,” says the wife of one London private-equity manager who took his lumps this fall. “It just means we’ll have to get possibly another job. But the bottom line is that it is just money. When you realize that you have enough—your health and a roof and good food and your family—you have to just feel lucky.”
Saturday, December 06, 2008
Hat tip to Bruce.
Joshua Davis once gave the coolest design lecture I ever attended. He talked about putting red food coloring in his eyes (result: cool looking eyes, mild discomfort, tears that looked bloody and a red tint to his vision for a few hours) and the process of doing his art (experiment a lot, use math, make interesting failures, build on what works). Then, he invited us to play, too. Play is the opposite of poverty.
Friday, December 05, 2008
Thursday, December 04, 2008
My view is that Money and Credit is very readable--compulsively readable, in fact: I have just spent two and a half hours telling myself "it's OK; I will just read one more page...". But it is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats--- insane.
I recommend starting at page 416: read through the defenses of the gold standard as the only monetary system consistent with representative government, the attacks on Keynes, the attacks on the New Deal, the attacks on the United Nations, the blaming of all unemployment on labor unions--or on governments--the attacks on private-sector fractional-reserve banking, and stop with the attacks on all other believers in the gold standard not named "von Mises", not dedicated to the root-and-branch elimination of all forms of private fractional-reserve banking, and infected by the errors of the nineteenth-century British Banking School:Ludwig von Mises, Money and Credit: p. 416 ff: [T]he gold standard appears as an indispensible element of the body of constitutional guarantees that make the system of representative government function.... What the foes of the gold standard are asking for is... to intensify very considerably the already-prevailing upward trend of prices and wages.... Such a policy of radical inflationism is, of course, extremely popular.... How pale is the art of sorcerers, witches, and conjurors when compared with that of the government's treasury department! The government, professors tell us, 'can raise all the money it needs by printing it'. Taxes for revenue, announced a chairman of the Federal Reserve Bank of New York, are 'obsolete'. How wonderful!... eventually... the cleverly-concocted plans of inflation collapse. Whatever compliant government economists may have said, inflationism is not a monetary policy that can be considered as an alternative to a sound-money policy....
...and so on and so forth. It's a hoot.
- Capital, especially debt capital is more scarce due to both increased risk awareness/decreased bank capacity and a desire to delever in general
- Near term "bad times", resulting in premiums for assets that pay out now. Asset return expectations will continue to increase (asset spot prices will continue to fall) until a new equilibrium is established
- Widespread cost reduction efforts will inhibit sales growth through the medium term. New projects will be postponed, scaled back or abandoned.
This article makes the very good point that VC firms should expect this general trend to impact their investments and portfolio companies in the following ways:
- Longer times to exits. Right now, the M&A, IPO and debt windows are firmly shut.
- Slower portfolio company growth, due to the aforementioned cost reduction efforts, and due to a general flight to companies with strong track records.
- Higher reserve requirements, as new investors decide to conserve their own existing portfolios, and higher proportions of follow-on investing rounds fall to existing investors.
- Flat valuations for follow-on rounds, at best, due to exit delays, development/sales slowdowns and capital scarcity.
What does all of this mean? It means that capital efficiency is extremely important, and that a move to profitability needs to be achieved as early as possible. From the investor perspective, the VC's aren't going to be able to save all of the firms currently in their portfolios, so it's important that they don't advocate anything stupid, like putting the entire salesforce on 100% commission, or cutting future development dollars (because that downstream development contains all of the exit value for years 6-10).
Another article on VC trends.