Meditations on Leadership

I was thinking the other night about the nature of leadership, and of Machiavelli's musings on whether it is more important for a prince to be loved or feared.

As I recall (and I confess it's been a while), Machiavelli posited that to be feared was preferable. I don't remember his precise reason, though I'm absolutely certain it was Machiavellian (see what I did there?). Those who know me probably won't be surprised that I disagree with his assessment. It occurs to me, though, that to be loved, and to lead people who follow you because they love you, isn't really that much better. It's somewhat better, of course, by the mere fact that it feels better (generally speaking) to experience love than it does to experience fear; and thus it's a decent thing to do to inspire the better-feeling love.

But if you're a leader, and your followers follow you because they love you, it's still a manipulation. You're still using others to achieve your own aims, and that's not leadership, quite. Leadership at its best is simply providing structure, support, and direction to a group in service of achieving a commonly-held goal. In this understanding of leadership, to be the leader is not to be the best, or the most worthy, it's not even to be first among equals. It's merely serving one of the roles that any group needs if it is to cohere as a group and to achieve certain things. Not all groups even need leaders, and goals are certainly accomplished without them, though it tends to be messy.

To modernize Machiavelli a little bit, and contextualize his work to our own system of government, consider the President of the United States. Is President Obama the best American citizen? Is he the most worthy among us? Is he the most important? In a word, no. President Obama would just be a dude with ears that stick out if he didn't have a country to lead, if he didn't have us. It's his job to steer the country towards our common goal. What is that common goal? Give me a second, it's here somewhere...ah, yes:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

To the extent that I am or may become a leader, I aspire to remember to be the kind of leader who remains aware that, at the heart of it, I am a servant.

An Update

It has been suggested to me that I should update my blog; who am I not to comply? First, I'm happy to report that the steroids did their thing and I'm mostly back to normal now. Both hands are still a little numb (the left more than the right), but that's the primary lingering effect. That and L'hermitte's sign is back.

L'hermitte's sign is a phenomenon where bending the neck (ie looking down) causes unusual sensations from the feet up. Mine actually extends up to my waist, but it's most prominent in my feet. For me it's a tingling feeling, I've also heard it described as akin to an electrical shock. L'hermitte's was actually the first sign (my neurologist once explained that it's not exactly a "symptom") that led me to my neurologist's office. I mentioned it to my GP, who at first told me it was because I wasn't active enough. I looked at her askance and explained that I worked out multiple times per week. She then suggested I make an appointment with a neurologist -- if it stopped happening, I could always cancel. It did not stop, I didn't cancel, and approximately a year, an MRI, a spinal tap, and a numb waist later, I was diagnosed with MS.

There are a few symptoms I experience that I would probably never known about if I didn't train in karate. I think this annoys my neurologist a little, in that they tend to be things she hasn't heard of from others and that don't show up on the standard neurology exam. One of the ongoing things is my poor balance. Not that that doesn't show up, but I think my balance seems more precarious to me than it seems to her because I regularly do things like stand on one leg while holding my other leg up and circling my knee and my ankle. Or try to do a crane stance. Or do a slow-motion front kick. None of these things tends to go well for me, but my balance tends to seem pretty close to normal in the doctor's office.

Also, my arms occasionally get stuck in the air. I've noticed it only a few times, but it's the oddest thing -- I'll be doing a round knifehand block (shuto mawashi uke), and I can't get my arms to descend. I don't get stuck there for more than a few seconds, but I actually have to concentrate to bring my arms down. Most recently, during the Really Bad Flare that incited me to start updating this blog again, I noticed my fingers would split when doing open-handed techniques. You know the Vulcan "live long and prosper" sign with the two middle fingers separated? I was doing that inadvertently, and would have to concentrate to bring my fingers together. Again, not anything I would have likely ever noticed if I didn't move my body in very specific ways that most people just don't ever have occasion to attempt.

My final bit of news is that I have accepted the offer to enter UT's School of Social Work in Fall 2010. It's still not 100% certain that I'll go -- I have to figure out my insurance situation (eg, whether I'll be able to maintain insurance), and my financial situation (walking away from a well-paid job in order to change careers completely is intimidating), but I wasn't going to be able to move forward on getting things in place without accepting, so I've accepted. Assuming finanical/insurance matters work themselves out, I'll be there in the fall. I still don't quite believe it.

State of Grace

I am what you might call an independent person. I am not at all comfortable asking for or accepting help from others. In fact, I think it's fair to say that this is one of my defining characteristics. For the most part, I like this about myself, but as is so often true, what is a strength is also a weakness. I have a tendency to isolate myself, especially when I'm feeling weak. I'm pretty self-aware of this aspect of my personality, both its bright side and its dark side; but I have never before had the opportunity to confront it in quite the same way as I have over the past few weeks.

The most excruciating, and rewarding, and humbling aspect of this most recent flare is how dependent I was, and how much help I've needed, and gotten. I lost the ability to drive and to use my hands for any fine motor skills. Next time you have a day to kill, try spending it unable to drive, unable to walk any real distance safely by yourself, and unable to use your hands as anything other than clubs. You'll find, as I did, that life gets boring quickly.

By Wednesday, I was ready to admit to myself that my situation was untenable. By Friday, I was ready to ask for help. Not quite brave enough to ask anyone specifically, I put out a general call on Facebook. Within minutes, multiple people had contacted me to offer whatever help I needed. I got rides to the doctor, food brought to me, rides to karate, errands run, cat food bought and made, litter boxes changed, recycling taken out -- the list goes on (and is still growing).

Intellectually, I know friendship is not a quid pro quo arrangement, but my usual m.o. when someone does me a favor is to look for an opportunity to pay them back as soon as possible. This experience precludes that -- there are too many people, and their generosity is too abundant, for me to be able to even the score. It feels like a state of grace -- of being flooded with support and love to such an extent that there is no choice but to give oneself up to it, to revel in it and marvel at it and accept it. To do anything less would be to cheapen the experience. It's hard, in a way that's not easy to express. There really is an aspect of letting go and accepting and trusting that does not come easily to me. It's an incredibly valuable lesson to learn, and it's not one I could have learned any other way.

I am forever grateful to have such a strong and caring support system. I stand humbled before the awesomeness of my friends.

What Has Happened

I'll start at the beginning, which in this case was about mid-February. February 11 to be exact. That was the day I decided I really needed to take a week off from work. At the time I was tired and feeling burnt out. In retrospect, I now realize it was probably the beginning of this flare. My boss suggested I take the last week in February off. In the intervening week, I continued to feel tired, and around midweek, I noticed that my feet were going numb. This has happened before, in October, so I didn't think much of it at first, but as the week progressed, the numbness moved up until it was all the way to my shoulders. my hands have been especially affected,not only numb but also stiff. this has made typing almost impossible. I can hunt and peck but I can't touch type and even hunting and pecking takes forever. Right now I'm using assistive technology and dictating this post. it's not exactly without labor either.

Since I was taking the week off anyway I decided to try to rest as much as possible and see if the symptoms cleared up by themselves. By Wednesday night it was clear that I would need to actually see my doctor. I made an appointment on Thursday for Friday morning. The doctor held a tuning fork-like implement up to various parts of my body to see if I could feel it vibrate. I couldn't, until she reached my shoulders.she agreed I should have a steroid treatment. this involves being hooked up to an IV for about an hour at a time and having solu-medrol pumped into one's veins for three days in a row. I had my first treatment on Friday and the second two Monday and Tuesday of this week.

The numbness has receded somewhat though it hasn't gone completely away in any area of my body. I can feel my legs and my torso more, but sensation is still not at all normal. My hands are still almost entirely numb and stiff. I can't type and don't feel safe to drive. I can heat things if I'm careful, but I don't trust myself with a knife. This makes food preparation challenging. I can walk all right, but I have to mind my steps, and I'm pretty slow. I haven't fallen, but it wouldn't surprise me if I did.

All in all, this is the most disabled I've been. Lots of things are challenging right now. I'm making it through, though. I went back to work today, though I didn't get much done. one never does on the first day back though.

So that's what's going on physically. In subsequent posts I'll talk about training and karate and how that's gone, and also what it's been like to need so much help and how grateful I am for the support I have. I've always been incredibly independent, which makes this especially hard -- and thus, especially educational. For now the steroid energy is wearing off and working a whole day has worn me out, so that's all for now.

one more thing -- not being able to type means that I can express myself as well as I would normally would in writing. Even though I'm not affected cognitively (at least I don't think so), it slows my thinking down and makes me less articulate. Yet another way this disease is hitting me where it hurts.

Helplessness, Humility, & Growth

I've just finished my first course of steroid infusions, because I've just encountered my first flare that rendered me truly diasbled and mostly helpless. It's been excruciating, heart-warming, and profound. One of the effects I'm still suffering is stiffness in my hands that makes typing very laborious, so this is going to be short, but -- watch this space.

Winter Trip 08-09 by the Numbers

I got back last night from a road trip that lasted two weeks. I visited (in order):
Atlanta, Georgia
Chicago, Illinois
Columbus, Ohio
Hadley, Massachusetts
Grafton, Massachusetts
Nashville, Tennessee

Totaling up my recorded mileage gives me a number of 4974.7, and I know I missed one recording. Let's call it 5000 miles. It's probably closer to 5300, though, since I tend to gas up every 300 miles. My average gas mileage was 30.29 gallons, with a low of 25.03 and a high of 35.65.

I spent $959.25 on the trip, $276.96 of which was for a winter coat, socks, and gloves that will last a lifetime (so says REI), because I didn't have winter gear, and Chicago was going to be in the single digits. So, if you don't count the winter gear, which I used on the trip but will continue to use, I spent $682.29. Which seems kind of reasonable, but then I'm a spendthrift.

Highest temperature was 80 degrees, lowest was -3.

And, of course, I got to see lots of friends and family. Carmel, Jess, Garin (Atlanta), Nancy Lanoue and Sarah Ludden and the Thousand Waves Crew (Chicago), my mom, stepdad, Liam, Jack, Matilda, Elaine, and Jason (Columbus), Harper (Northampton), Jenn and Michelle (Grafton), and Carmel, Jess, and Garin again, as well as Amanda (Nashville). 17 people if you only count the Miner Drewes family once, and count one extra for the Thousand Waves Crew (which is sort of accurate and also sort of wildly inaccurate). 20 people is a nice round number, let's go with that. You can think of it as counting Mel-Jess-Garin twice, or counting three extra people at Thousand Waves. And I saw at least three people there whose names I knew before I got there, so that works, I think.

I spent two nights at rest areas, and around 4 in motels. I developed a fondness for Sleep Inns.

I listened to the following audio books, either for the first time or a second time:
Blink - Malcolm Gladwell (first time)
Assassination Vacation - Sarah Vowell (first time)
Dreams From My Father - Barack Obama (second time)
The Audacity of Hope - Barack Obama (second time)
People's History of the United States - Howard Zinn (finished it for the first time)
Gift of Fear - Gavin deBecker (second time)

I also caught up on Rachel Maddow (which I wasn't far behind on) and Fresh Air (which I was), and finally finished listening to the TED conference podcasts. I started to listen to Spoolcasts and realized I really, really didn't want to think about work.

So, to summarize:
5300 miles
6 Stops
20 Friends
$959.25, or $682.29
= $34/friend
30 MPG
2 rest area nights
4 hotel nights
6 full length books
~25 podcasts

Gone Grey?

Is it just me, or has Obama suddenly gotten a lot greyer at the temples? I know campaigns are hard and all; nonetheless, I suspect foul play (or at least artificial colorings).

Long, and almost certainly wrong, the only question is how wrong, explanation of the CRISIS ON WALL STREET, Part 4

So, G. (no, wait, it's g.) posted an hour long YouTube video that took me about 8 hours to get through, because I stopped, looked stuff up on wikipedia, rewound and listended to again, etc. I wrote as I went along, too, and here's what I wrote (the wikipedia articles are referenced in Part 3).

My understanding of “Crisis on Wall Street” : Princeton economists review recent events on Wall Street and assess the implications for the economy and public policy – September 23rd, 2008
posted on Impolite Company: http://morisey.typepad.com/my_weblog/ and available on YouTube at http://www.youtube.com/watch?v=Wj_JNwNbETA


My reaction

The first portion is definitely the hardest to understand, mainly because there are so many unfamiliar terms and concepts. From watching this (especially the first part), I can understand how easily the Very Smart People on Wall Street got very distracted by the trees in front of them and didn't notice that the forest was burning.

It seems like there are basically two things that need to be done:
First, Wall Street is structured a little like a house of cards, and once panic strikes, it gets out of control real fast. Seems like the solution is to put things in place that remind people not to panic - Douglas Adams, where are you when we need you? I think Guy 2 got into at least the edges of this – part of what makes the stock market and Wall Street work is that you don’t ever really know what something’s worth. If my car is really worth a thousand bucks, but I can sell it for $2000, then I’ve created worth in some way. Transparency works against this - if you can look up the blue book value for my car, then you’re not going to buy it at 2k if it’s only worth 1k. But if you have less transparency, you have more possiblity for corruption. So maybe the problem is with the system of an economy that is made of buying and selling more than making, because creating worth by obfuscation is inherently unstable. Which would seem to argue for keeping Wall Street tightly regulated and lean and small, while encouraging more manufacturing and building and etc. But if Wall Street has been financing the building, and Wall Street can’t, anymore, who will? How does Venture Capitalism figure into all of this? But wait – we have the Small Business Administration, and some amount of subsidies available for entrepeneurs that comes from the government – is this the difference between socialism and capitalism? If the government had said to Brin and Sergey, “ok, here’s a couple of million dollars, go make Google,” and they had, and had paid back the government, all well and good. But what about those two yahoos (no pun intended) who tried to make Smoogle? They lost the government 2 million dollars! How is that recouped? Seems like we’ve moving into more of an insurance model – Google has to pay some percentage of its profits to the government every year in return for being lent the 2 mill, and that return subsidizes Smoogle’s failure. And here’s why the capitalist model isn’t right for it – why it should be done by the government: the point isn’t to make profit, it’s just to break even.


Second, we need to find a way to stabilize housing prices. I don’t buy the argument that that’s not possible. Why are they falling? I haven’t seen that explained, except that there was a bubble and inevitably it burst. So, housing was over-valued? The problem on the street is that folks can’t afford their mortagages – so, if we adjust the mortgages downward, essentially making the housing cheaper without forcing them to be sold, seems like that would help things – you’d still lose money, but you’d lose less, and people would be less homeless. And then, perhaps, you could do something to squeeze people out of rental situations and encourage the renters to buy. Maybe you could make it easier to buy a house without being a citizen – if migrant labor can do the work we don’t want to do, maybe they can buy the houses we don’t want, too. I’m sure there are things that could be done.

Long, and almost certainly wrong, the only question is how wrong, explanation of the CRISIS ON WALL STREET, Part 3

So, G. (no, wait, it's g.) posted an hour long YouTube video that took me about 8 hours to get through, because I stopped, looked stuff up on wikipedia, rewound and listended to again, etc. I wrote as I went along, too, and here's what I wrote (the wikipedia articles are referenced in Part 3).

My understanding of “Crisis on Wall Street” : Princeton economists review recent events on Wall Street and assess the implications for the economy and public policy – September 23rd, 2008
posted on Impolite Company: http://morisey.typepad.com/my_weblog/ and available on YouTube at http://www.youtube.com/watch?v=Wj_JNwNbETA



GUY 3
"Yes, there's panic, but underneath the panic, don't forget that housing prices are going down - we have to deal with that mess in addition to the panic."

Housing prices stopped going up, on average, for the first time ever (at least as far as Wall Street knew). One housing prices start going down, mortgages start being defaulted (before, if you couldn't pay your mortgage, you sold your house and then you could pay it off. Or the bank took it and sold it, and got its money back).When housing prices go down, money disappears. [Again, why is that different than when anything else is devalued? ] So, the banks are out of money - why can't we just make new banks if the current ones are screwed? If a restaurant goes out of business because of bad food, someone else will open a new restaurant with better food, right? So if a bank goes out of business because of bad debt, then a new bank can open up with better debt? Well, yes, but Wall Street banks are not made overnight. Long term, that WILL happen - but "long term we'll all be dead." So, all of the sturm and drang that Guy 1 was talking about is on top of the underlying factors of housing stuff -
1 - housing prices have shot up in the last decade after being basically stable for a really long time - though everyone has been saying that it's not a bubble, clearly it is.

2. And it's not done bursting yet. He shows the Case-Shiller 10 City (Case-Shiller is a way of looking at housing prices) deflated by the Consumer Price Index - which I think means "accounting for inflation." If you look at the graph that he showed, it's a straight line and a bell curve upward, but the downward point of the curve is only about half way to the baseline. It's an "r", not an "n".

3. All of this has nothing to do with what Guy 1 was talking about with the panic and all that.

4. The banks are reporting losses that are pretty much in line with what they would actually be if housing prices stopped dropping, but they won't, "by any reasonable index;" they're going to keep falling for a while. So there are more losses to come.

I think his point here is that no amount of regulation or government interference is going to effect the housing market (as opposed to the financial market, which it can effect). Short of the federal government "buying up 10 million houses and knocking them down."

So, what are we going to do? We've gone from "no more bailouts" to "bail out the entire system." He takes umbrage to the phrasing of "take the troubled assets off the balance sheet." You can easily take them off - just declare them worthless, and they're 0. Voila, done. But the problem is that these are "assets" which no longer exist - which means the total liabilities are bigger than the total assets. So to make these institutions solvent again, the goverment has to buy the assets for a large enough price that it puts the balance sheet at least back at 0 – really, a little above, so they can start making loans again - which, at this point, is greatly overvaluing the assets.

So, what's the plan? Apparently, Paulson's original plan was "give me $700 billion dollars and I have absolute power." Almost literally - the "plan" was only 3 pages?!
Even IF Paulson was beyond reproach, hello, election year? He's not going to be the treasury secretary much longer. Next, he mentions that Paulson said this morning (Sept 23rd) that he totally wants oversight, but it had to be a short document so it would be presumptuous to add oversight language to it. Except, EXCEPT, the document actually specifically PRECLUDES oversight, which is very different than not mentioning it.
Ergo, liar liar pants on fire. Ergo, this is not being done in good faith. So, what are they going to do? Seemed like at first, they didn't really know - Paulson just wanted the money. Now, it's seeming like they're talking about the government buying the "troubled assets" (the mortgages, ultimately) at a very inflated price. Makes sense - that's what's necessary, after all (see above). But, he points out, the way these things are normally handled is, somebody swoops in and saves your bacon (I will give you a cash infusion so your business doesn't fail), they typically get an ownership stake in your business. So, it seems like the right thing to do is to give the government an ownership stake in Wall Street. So, what are they trying to do? Up until recently, it's seemed to be all about staving off the panic, which doesn't really make sense, because of falling house prices, etc. So now, maybe they're working on the bulking up the financial capital of the market – which is what needs to happen in addition to calming the panic - nationalizing the market along the way to some extent. We did it in the SnL crisis, Sweden did it, and Japan eventually did it. That's what happens.

Panel discussion:
How big a deal is this for the "real world?" So far, it hasn't been a huge issue. Everybody downstream is still pretty much functioning, and the housing industry has already been nationalized.

Question: Come on, the CEOs knew what was happening. You’re not trying to tell me this was all an honest mistake, are you?

Answer: No, you’re right. The CEOs got greedy and stupid.

So, that’s what they all said. I think.

Case-Shiller 10 Cities: http://en.wikipedia.org/wiki/Case-Shiller_home_price_index

Consumer Price Index: http://en.wikipedia.org/wiki/Consumer_price_index

Long, and almost certainly wrong, the only question is how wrong, explanation of the CRISIS ON WALL STREET, Part 2

So, G. (no, wait, it's g.) posted an hour long YouTube video that took me about 8 hours to get through, because I stopped, looked stuff up on wikipedia, rewound and listended to again, etc. I wrote as I went along, too, and here's what I wrote (the wikipedia articles are referenced in Part 3).

My understanding of “Crisis on Wall Street” : Princeton economists review recent events on Wall Street and assess the implications for the economy and public policy – September 23rd, 2008
posted on Impolite Company: http://morisey.typepad.com/my_weblog/ and available on YouTube at http://www.youtube.com/watch?v=Wj_JNwNbETA

Guy 2:
"Here's how Wall Street got into the housing business, and here's why it went so very, very wrong."

He's saying that when the dot-com bubble burst, the big 5 Wall Street banks had to do *something*, and all the real debts and stocks (securities) they were used to (GE and GM, as he says) were all, "No, thank you! That bubble burst HURT!" - so Wall Street wandered over to the housing market. And Wall Street was all, "hey, take a look at these mortagages! They're just like GE and GM securities!" And the credit rating agencies bought it (or played along), and rated the mortgages (or mortgage bundles, once they were up to Wall Street level) the same way they rated GE and GM - really safe, sorta safe, not really safe but you might get lucky, etc. And then Wall Street kept really safe for itself. Since they were (alledgedly) really safe, they had low capital (I think he means captital ratio - the difference between how much it's really worth and how much the market thinks it's worth. Since they were "rock solid," the difference SHOULD have been near zero. Thus, they were cheap). Then he's talking about the past 25 years - light regulation meant that the banks were free to innovate and take risks (and innovation means taking risks, right? Cause you're inventing new things, they're untested), and were largely successful - so they got REALLY big - 25% of the S&P 500 and a large fraction of the GDP. Which means, basically, that a large part of our economy has been tied up in money. It's sort of like Richard Gere's character in Pretty Woman - instead of making things to make money, we've been buying and selling things to make money. And then he says, "is that really a good idea? Smart economists have been trying to figure it out." 2 years ago, the fed raised interest rates, and the era of cheap credit was over - basically, the ability for these banks to keep growing up and up and up hit its limit - and because of the house-of-cards nature and lack of transparency that Guy 1 talked about, everybody flipped out and indeed things started going down and down and down.

Lessons he talks about -
Interestingly, he seems to be saying that bubbles are not a bad thing - we want to feed the bubble. And his point is that in the dot-com bubble, we got a lot of good companies (YouTube, Google), and the housing bubble meant that we got lots of new houses. But these bubbles are inevitably going to be messy - when you innovate, a lot of things ultimately aren't going to work. You can fuck up royally. Put another way, to find the one good thing, you have to go through a lot of bad things. And I see what he's saying - it's sort of a basic tenet of creativity. BUT, he says, that housing is fundamentally different, and nobody recognized that. He doesn't really say why in any but an axiomatic way, from what I can tell - housing is bad because housing is harder to get rid of, because there's less of an ability to control a soft landing - that's the definition of bad, yes, but what about houses makes them like that compared to, say, shares of Google?

Don't blame the messenger - he's basically arguing for more transparency instead of less. This seems like a no-brainer to me. Except, I guess, if the stock market (and "capital") is all about getting more money than things are worth, I can see why obfuscation could be considered a good thing. But obfuscating requires trust, and I don't think we should trust these over-confident investors.

But then he's talking about poor regulation, which is odd, because it sounded like he was crediting lack of regulation for innovation before - but in this case, he's talking about the parties doing things that were obviously wrong - getting too far into debt, issuing too many AAAs - obviously you can't have THAT many rock-solid securities (if you do, you have no capital!), and you can't be taking THAT many risks and reasonably expect to come out ok. Sure, sky-dive, but don't just jump out the plane and hope to encounter a parachute on the way down...

The past does not equal the future - here, I think he's basically saying that, in contrast to "if you do the same thing you'll get the same result," "if you do something different, you'll get a different result." Wall Street thought housing was safe, because it always had been in the past - but housing had never been traded by Wall Street before, and that trading changed the game, and their was no model for that. He's saying a weakness of the financial industry as a discipline is that it only understands the past, it doesn't attempt to insert new variables and see how that might change things.

And finally, he says that the silver lining is that we're being forced to deal with the debt overhang sooner rather than later. what? Oh wikipedia... Ok, the debt overhang is when you have more debt than you have ability to pay it, and it de-motivates you to make good investments, because your creditors are just going to get all of your money anyway - so why bother working hard to make good investments? I don't entirely get this - when individuals are deep into debt, their incentive to get out is so they can get more credit, and so they will stop being called by debt collectors. Maybe high finance doesn't get harrassed the way people do...but with his comparison to Japan, he seems to saying that it took them 10 years to get it together and deal with the fact that they were out of money, and maybe we'll figure it out sooner than that.

GUY 2 Definitions:

CDO: http://en.wikipedia.org/wiki/Collateralized_debt_obligation

Securities: http://en.wikipedia.org/wiki/Securities

Debt Overhang: http://en.wikipedia.org/wiki/Debt_overhang

Long, and almost certainly wrong, the only question is how wrong, explanation of the CRISIS ON WALL STREET, Part 1

So, G. (no, wait, it's g.) posted an hour long YouTube video that took me about 8 hours to get through, because I stopped, looked stuff up on wikipedia, rewound and listended to again, etc. I wrote as I went along, too, and here's what I wrote.

My understanding of “Crisis on Wall Street” : Princeton economists review recent events on Wall Street and assess the implications for the economy and public policy – September 23rd, 2008
posted on Impolite Company: http://morisey.typepad.com/my_weblog/ and available on YouTube at http://www.youtube.com/watch?v=Wj_JNwNbETA


The “guys” referred to are Princeton professors. They have names, but since their names mean less to me than their order of appearance, I’m just referring to them as Guys 1-3.

Guy 1
Guy 1 in one Sentence:
"It's like the depression - panic feeds on panic and things spiral out of control."

Guy 1 in detail:
So, these companies that are making money for themselves and their clients (broker-dealers) are too into the short-term loan business (repo-market) and the market loses confidence. Suddenly it costs a whole lot more to get a loan (the haircut), and they have to scramble to get back into real money instead of taking out loans and re-loaning the money at a higher interest rate (delever). Chaos ensues.

The problem, he says, is that the existing regulations are all about how much real money (assets) you have divided by how much perceived money you have (capital) (the capital ratio), without taking into account how much of that capital could disappear literally overnight (because it's in the repo market) - and also that risk is assessed intra-bank and not inter-bank (VaR vs. CoVaR).

And ALSO, since none of the banks really knows how screwed the other banks are, they all start getting nervous and taking out insurance against each other so if the bank they've loaned to goes down, they're still ok. Except that the credit rating companies use the insurance (the Credit Default Swaps) to gauge how screwed the banks are (because they don't know either), and start saying they have bad credit, and everyone's like "I knew it! I need more insurance!", insurance rates go up, and then the cycle repeats. [So, why did AIG go under? Seems like the Credit Default Swaps should have the insurance entities in good shape, as their rates go up and up….oh, but I guess it’s like when the hurricane hits. Suddenly everyone needs the money because everybody’s fucked – but the fucking in part was created by the buying of the insurance. Nasty!]. He says if the US allowed CFD's (Contract for Differences), either bank-to-bank ("over the counter") or on the stock market (a clearinghouse model), that would allow a more informed notion of how screwed the other banks were (the Counterparty Credit Risk).

And THEN, he starts talking about the TED Spread, which is again about measuring risk (it's got to do with treasuries vs. everything else). And the banks look a lot riskier at the end of each quarter, I guess because they're all "omg, we need money to tell our stockholders about!" and start doing riskier things or whatever - so he says, if the TED spread is going to be greater at the end of the quarter, let's let banks report on the average instead of the snapshot.

Guy 1 Definitions:
Broker-dealers: http://en.wikipedia.org/wiki/Broker-dealer

Repo Markets: http://en.wikipedia.org/wiki/Repurchase_agreement

Market liquidity: http://en.wikipedia.org/wiki/Market_liquidity

Haircuts: http://en.wikipedia.org/wiki/Haircut_(finance)

Deleveraging: http://en.wikipedia.org/wiki/Deleveraging

Capital Requirement: http://en.wikipedia.org/wiki/Capital_requirement

Capital: http://en.wikipedia.org/wiki/Capital_(economics)

Assets: http://en.wikipedia.org/wiki/Asset

VaR (value at risk): http://en.wikipedia.org/wiki/Value_at_risk

CoVaR: the only reference I could find is here:
http://www.newyorkfed.org/research/staff_reports/sr348.html - basically, the value at
risk (VaR) of financial institutions conditional on other institutions being in
distress. (I notice that Markus K. Brunnermeier is a co-author. In other words, he
made it up).

Contract for Difference: http://en.wikipedia.org/wiki/Contract_for_difference

Counterparties: http://en.wikipedia.org/wiki/Counterparties

CDS (Credit Default Swap): http://en.wikipedia.org/wiki/Credit_default_swap

Credit derivative: http://en.wikipedia.org/wiki/Credit_derivative

Treasuries: http://en.wikipedia.org/wiki/Treasuries

TED Spread: http://en.wikipedia.org/wiki/TED_spread

World Domination in 24 Hours

Midnight: Sleeping. A girl needs her beauty rest.
1 AM: Wake. Pop a Provigil for the MS point (Provigil is the wonder drug that keeps me awake). (Sometimes).
2 AM: Finish downloading NPR podcasts, drive to airport
3 AM: Board super-fast jet for a quick lay-of-the-land trip around the world.
4 AM: Still flying (it's not THAT fast)
5 AM: Land, study the pictures taken from the super-fast jet. No ideas yet.
6-10AM: Nap. Provigil only goes so far.
10 AM: Awake, not at all refreshed. Pop another Provigil to approximate that refreshed feeling
11 AM: Remember Google
Noon: Half-way there, and world domination no closer. Click past page 8 of Google results for "taking over the world." Begin to think that Google doesn't have the answer.
12:15 PM: Realize that of COURSE Google has the answer, Google knows everything.
12:20 PM: Discover blueprints on taking over the world on page 11 of search results (luckily for me, most people don't get past the first page)
1:00 PM: Damn thing's in Powerpoint.
2:00 PM: And Ancient Egyptian.
2:00 - 7:00 PM: Brush up on my Ancient Egyptian (and Powerpoint)
7:00 PM: Get back in the jet
7:00 - 11:00 PM - Travel around the world again, collecting all of the underwear from all of the dryers in the world, like some bizarre frat-boy Santa Claus with a penchant for laundromats
11:00 - 11:30 ???
Midnight: World domination achieved.

Best Thing Since...

For those of you unable to read comments (and I feel for you, I really do. It's an awful condition, and the fact that there's not a nonprofit dutifully raising money for a cure is a travesty), my next assignment is to update the phrase "the best thing since sliced bread." Which has always been a suspect phrase, if you ask me. I mean, really, is sliced bread such an innovation? I mean sure, sandwiches and toast. Not the worst things in the world. But..."the best thing since the wheel" would be grander. The wheel is not only older (I'm pretty sure) than sliced bread, it also has more to show for itself than sandwiches and toast. NOT THAT I DON'T LIKE SANDWICHES AND TOAST. I'm just sayin'. Rolling is pretty cool.

Anyway, "the best thing since the wheel" makes more sense, I'm sure we all agree. But if I were updating the phrase, I'd want it to be hip and now, so I think I might go with "the best thing since Google." Or if I wanted to be really old school, "the best thing since sunlight."

If I were going for bringing it into the theme of this blog, and thereby perhaps scoring an extra point (and I feel your pain, non-comment-readers - how about "No Comment" as a non-profit name??) - the best thing since an oral med for MS. not that that exists, of course. I still have to jab myself with pointy things, and sometimes curse, every night. But once it springs into being, from the veritable forehead of some very smart scientist, I'll be coining the phrase, believe-you-me.

Amy's Decision 08! er, 9-26-08!

Where, or where to watch the debate? To watch at all? I feel like Christmas is coming, which sort of shows just how nerdy I am. But here are my options:

* Watch at home, alone
* Listen at home, but do not watch
* Try to organize a watch party (Graham, I'm lookin' at you)
* Watch at the Alamo South Lamar

I'm interested in the different experiences between watching and listening - I know that Kennedy was perceived to have been better than Nixon in part because of the visuals - but then again, the watching is what everyone else will be doing, and I want to have that extra visual information, since everyone else will have it.

Dilemmas...

Inciting me to post - a few ground rules

If you enjoyed that last post about broccoli but found it random, check the comments on the post prior to it. And once you figure it out, come back here and continue reading.


You back? Ok, good. So, if YOU want to incite me to post by suggesting topics, here are the rules:

1. If you are NOT Mel, you must be approved by Mel as a Post Inciter. Her decision is final - no appeals, no recourse.

2. Whether are not you are Mel, once approved, I will write on any topic suggested by a Post Inciter, but I insist that I get a week to produce the new post.

3. If there's a post suggested, nobody can suggest another post until I produce the required post, or until my week expires.

4. If my week expires and I don't produce...oh, I don't know, but it seems like there ought to be some kind of consequence, shouldn't there?

Broccoli...

I spent most of my life believing that I did not like broccoli. Of course, I had never tried it. That's sort of how it goes for me with food. I make a snap decision and then I stick by it. Broccoli looked complicated, smelled funny, and therefore I did not like it. I didn't have to actually eat it - I just knew.

Now, this could be a morality tale, and I could tell you that I eventually tried it, realized how much I loved it, regretted wasting so much of my life in a broccoli-less wasteland. And I could tell you that I learned my lesson, that now I'll try anything before deciding whether or not I like it.

But life is not so simple, nor authored by Disney. I did try broccoli, a few years ago - and...I didn't hate it. There are times when I really enjoy it, even. But I definitely have to be in the mood for it, and most of the time I do not want it.

And I still can't bring myself to try cauliflower.

A post about karate and MS

Kicking Without Feet is ostensibly about my life as a karateka with MS - a subject I've wandered from quite a bit. But this post is about exactly that.

I find it kind of amazing that I can so far train with relatively minimum obvious loss of skill, despite fumbling over much simpler and pedestrian tasks. Lately I've been dropping things a lot - I can tell that my coordination and fine motor skills are suffering, particularly on my left side. And my left leg is getting tired very easily, and my balance is pretty abysmal. Not to mention the random numb patches scattered across my body. And yet I just got home from a karate class where I was able to do some fairly intricate techniques and combinations - including working with falls and takedowns, multiple kicks, and blocking and striking combinations. *I* could tell that things were wrong - not just internally, but also that my techniques lacked precision - but I don't believe it was very obvious to bystanders.

I think it's because I'm used to concentrating on my karate techniques. It's not that I'm relying on concious thought - I do have the muscle memory - but my attention is focused in a way that it's not when I'm doing things like transferring my keys from my right to my left hand.

I was pretty trashed Saturday after class - for a couple of hours, I almost felt drunk. I was incredibly tired, and would also get dizzy every few minutes, particularly when I changed directions or turned my head. As the day wore on and I lazed about, I started to feel better, but I still wasn't all that good. It scared me.

With that in mind, I really wasn't sure how today would go. I'm glad it went as well as it did, and I feel considerably better today than I did Saturday afternoon. I still feel worse than usual, though. Not only worse than usual, but worse than what is currently 'normal' for me, which is already worse than what has been normal for me at other times. I'm a little dizzy again, and I actually feel a little nauseous. I'm also noticably less coordinated - I'm sort of lurching around. I can type, but I'm noticing that it's harder to type with my left hand than it normally is. I'm having to put just a tiny bit of extra thought and effort into it. But my typing is as accurate as it normally is.

My friend M. said that she'd heard MS described as "being constantly attacked by small children that nobody but you can see." I think it's an apt description.

On Thursday, I travel to New York City to train at Honbu (World Seido Organization headquarters) for the annual Black Belt Clinic. I'm less than pleased that my MS is flaring at this particular moment, but I guess them's the breaks. I'll just have to strive with patience.

Osu.

Obama's a Star!

Obama has officially made the big time. I noticed this morning that he's on the cover of both The Enquirer and the Globe. Apparently he is perhaps gay, yells at his wife, has shady friends, and cheats on his wife. Oh, and also, Oprah says its a smear!

The cover photos were also unflattering.

Mainly, I find it amusing, as I find most tabloid covers amusing. But it's interesting that he has enough celebrity to rate "coverage" by these guys. You don't often see politicians that have that much of the public zeitgeist.

Speaking of zeitgeist,
check out this page. It's a list of google searches for clinton vs. obama. Playing around with google zeitgeist is a fun way to waste 30 minutes, generally, too.

http://www.google.com/press/zeitgeist.html

Ok, that' s all for now...

Voter Turnout

This post is re-created in its entirety as a comment on Impolite Company (http://www.typepad.com/t/trackback/2867940/26810328) - but I thought I'd post it here, too, if only to boost my postings count.

I've been thinking about voter turnout, and how low it tends to be here in the good ole' US of A, since I first read Morisey's post last week.

First of all, part of the reason we have such low turnout here in the states is a psychological phenomenon called "learned helplessness." The classic experiment used to illustrate this is the one where they would shock dogs randomly. After a while, the dogs just sort of gave up and lay there (read more about it here: http://en.wikipedia.org/wiki/Learned_helplessness)
Basically, I think many Americans don't believe that their vote really matters, so they don't bother. Unfortunately, they're often right - how many Democrats don't vote in Texas because Texas is a red state? That sort of thing.

Making matters worse is that even in the best circumstances, a single individual's vote is rarely going to translate into a direct change in his or her life. If you vote, your guy (or woman) might get elected, and they might vote in a way that benefits you, and it might not get blocked by opposition, and it might eventually trickle down to affect your life. That's a lot of mights, and even when they all fall into place, the cause and effect are separated from each other enough that it's not really apparent.

So, what to do? There's the carrot-and-stick approach, where we either reward folks for voting, or punish them for not voting, say by levying a fine. This works for things like jury duty and income taxes(sort of), but it wouldn't work for voting, for the simple reason that you can motivate people to vote, but you can't really motivate them to vote intelligently. You can't make them care. So if everyone has to pay $25 if they don't vote (or, as Toad a la Mode suggests, gives them a free ice cream from McDonald's if they do), you'll have greater turnout, but a large number of folks would show up and press random buttons and go home. And that really wouldn't be so great for the democracy.

Which sort of brings us around full circle, with a low-but-hopefully-motivated voter pool. But I do think there is one thing that we could do that could improve voter turnout. What if every registered voter received in the mail a "voter information" packet, that listed your polling place, the day of voting, and a summary of the issues and candidates on the ballot? The great thing is that this information already exists, it's just not disseminated in a concerted way. The League of Women Voters always creates an awesome voter guide - we really just need someone to mail it to people.

CNN's magic screen

CNN is explaining to me why it's not over in Texas, and that the large population centers are going for Obama. They have a magic screen for this, which is basically a really big iPhone screen.

Just thought I'd share.