Michael Lewis on the end of Wall Street

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Good read in Portfolio from the author of Liar's Poker on perhaps finally witnessing the end of Wall Street that he'd forecast after his days at Salomon Brothers.


Both Lewis and James Surowiecki of The New Yorker emphasize that one of the amplifiers of this recent financial blood bath was the decision of investment banks to go public. Surowiecki wrote:



All, then, seemed good. But, for Wall Street firms, going public was a deal with the devil, because it meant exposing themselves to what was, in effect, a minute-by-minute referendum, in the form of the stock price, on the health of their operations. This was fine as long as things were going well—the higher the stock price, the richer everyone got—but, once things started to go bad, that market referendum started to look like a vote of no confidence. And that made the problems that the companies were already facing much, much worse.


That’s because the entire edifice of Wall Street is built on confidence. Investment banks rely on short-term debt to run their businesses, and their businesses consist of activities—trading, dealmaking, money management—that depend on people’s faith in their ability to honor their obligations. As soon as the customers and creditors of a company like Lehman start to wonder whether it might collapse, they become less willing to lend or to trade, and more likely to demand their money back. The perception of weakness exacerbates the reality of weakness. And although there are myriad measures of a company’s health, nothing looks scarier than a stock price that’s heading toward zero.


All companies, of course, worry about how their stock is doing. But for most the stock price is a product of performance, rather than a cause of it. If Procter & Gamble’s stock plummeted tomorrow, people would still keep buying Tide. By contrast, if an investment bank’s share price tumbles, it not only wrecks people’s confidence but also can lead to credit-rating downgrades, which provoke a further decline in the stock price, and so on. The downward spiral can be stunningly fast and near-impossible to escape. Lehman’s assets were not significantly more toxic last Monday, when the company filed for bankruptcy protection, than they had been a week earlier. And, technically speaking, the bank may not even have run out of money, since it had access to an emergency liquidity line from the Federal Reserve. What Lehman did run out of was credibility. It couldn’t remain a going concern because creditors and customers no longer trusted it. Why would they, when its stock price had fallen nearly eighty per cent in the previous week? The less faith the market had in the possibility of Lehman’s survival, the more remote that possibility became.



One of the risks of going public is having your stock price govern your decision-making as a company. Managing the morale of employees becomes more difficult. Even if things are going well for the company, if the stock price is low, attrition becomes a concern.


Going public isn't just about cashing in on stock options, as someone once noted about free lunches.



The sacrifices of office

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One casualty of Obama's victory in the Election: e-mail and his Blackberry.



But before he arrives at the White House, he will probably be forced to sign off. In addition to concerns about e-mail security, he faces the Presidential Records Act, which puts his correspondence in the official record and ultimately up for public review, and the threat of subpoenas. A decision has not been made on whether he could become the first e-mailing president, but aides said that seemed doubtful.


For all the perquisites and power afforded the president, the chief executive of the United States is essentially deprived by law and by culture of some of the very tools that other chief executives depend on to survive and to thrive. Mr. Obama, however, seems intent on pulling the office at least partly into the 21st century on that score; aides said he hopes to have a laptop computer on his desk in the Oval Office, making him the first American president to do so.



How crazy is it that the most important leader in the country can't use e-mail?


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Old interview with David Simon

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An old but good interview with David Simon (The Wire) in The Believer.



Another reason the show may feel different than a lot of television: our model is not quite so Shakespearean as other high-end HBO fare. The Sopranos and Deadwood—two shows that I do admire—offer a good deal of Macbeth or Richard III or Hamlet in their focus on the angst and machinations of the central characters (Tony Soprano, Al Swearengen). Much of our modern theater seems rooted in the Shakespearean discovery of the modern mind. We’re stealing instead from an earlier, less-traveled construct—the Greeks—lifting our thematic stance wholesale from Aeschylus, Sophocles, Euripides to create doomed and fated protagonists who confront a rigged game and their own mortality. The modern mind—particularly those of us in the West—finds such fatalism ancient and discomfiting, I think. We are a pretty self-actualized, self-worshipping crowd of postmoderns and the idea that for all of our wherewithal and discretionary income and leisure, we’re still fated by indifferent gods, feels to us antiquated and superstitious. We don’t accept our gods on such terms anymore; by and large, with the exception of the fundamentalists among us, we don’t even grant Yahweh himself that kind of unbridled, interventionist authority.


But instead of the old gods, The Wire is a Greek tragedy in which the postmodern institutions are the Olympian forces. It’s the police department, or the drug economy, or the political structures, or the school administration, or the macroeconomic forces that are throwing the lightning bolts and hitting people in the ass for no decent reason. In much of television, and in a good deal of our stage drama, individuals are often portrayed as rising above institutions to achieve catharsis. In this drama, the institutions always prove larger, and those characters with hubris enough to challenge the postmodern construct of American empire are invariably mocked, marginalized, or crushed. Greek tragedy for the new millennium, so to speak. Because so much of television is about providing catharsis and redemption and the triumph of character, a drama in which postmodern institutions trump individuality and morality and justice seems different in some ways, I think.


***


My standard for verisimilitude is simple and I came to it when I started to write prose narrative: fuck the average reader. I was always told to write for the average reader in my newspaper life. The average reader, as they meant it, was some suburban white subscriber with two-point-whatever kids and three-point-whatever cars and a dog and a cat and lawn furniture. He knows nothing and he needs everything explained to him right away, so that exposition becomes this incredible, story-killing burden. Fuck him. Fuck him to hell.


***


There are two ways of traveling. One is with a tour guide, who takes you to the crap everyone sees. You take a snapshot and move on, experiencing nothing beyond a crude visual and the retention of a few facts. The other way to travel requires more time—hence the need for this kind of viewing to be a long-form series or miniseries, in this bad metaphor—but if you stay in one place, say, if you put up your bag and go down to the local pub or shebeen and you play the fool a bit and make some friends and open yourself up to a new place and new time and new people, soon you have a sense of another world entirely. We’re after this: Making television into that kind of travel, intellectually. Bringing those pieces of America that are obscured or ignored or otherwise segregated from the ordinary and effectively arguing their relevance and existence to ordinary Americans. Saying, in effect, This is part of the country you have made. This too is who we are and what we have built. Think again, motherfuckers.



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NYMag Profile of Malcolm Gladwell

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Another profile of Malcolm Gladwell, this with his next book Outliers: The Story of Success set to release Tuesday.



Outliers is at once Gladwell’s least and most ambitious book. Unlike The Tipping Point and Blink, which took their counterintuitiveness to extremes, the conventional wisdom Gladwell seeks to demolish in Outliers isn’t even really CW anymore. Is there anyone who still believes that “success is exclusively a matter of individual merit,

Top 10 irritating phrases

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Oxford's list of top 10 irritating phrases:



  1. At the end of the day

  2. Fairly unique

  3. I personally

  4. At this moment in time

  5. With all due respect

  6. Absolutely

  7. It's a nightmare

  8. Shouldn't of

  9. 24/7

  10. It's not rocket science


Throw in "literally" and the list is complete. While grammatical mistakes are galling, I find verbal tics like "at the end of the day" or "literally" more annoying. Precision of language is precision of thought.


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The Evil Pleasure

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Robin Hanson on what he terms the evil pleasure:



We feel a deep pleasure from realizing that we believe something in common with our friends, and different from most people. We feel an even deeper pleasure letting everyone know of this fact. This feeling is EVIL. Learn to see it in yourself, and then learn to be horrified by how thoroughly it can poison your mind. Yes evidence may at times force you to disagree with a majority, and your friends may have correlated exposure to that evidence, but take no pleasure when you and your associates disagree with others; that is the road to rationality ruin.



He was spurred to this thought by an article by Pascal Boyer in Nature, unfortunately barricaded behind a pay wall. However, you can search for Pascal Boyer articles in Google Scholar. Many are available there for the reading if you click on the "All # versions" link at the bottom of each listing.


Hanson's blog is titled Overcoming Bias, and he's ruthless in that goal. I find his advice stern yet inspiring.


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Red announcement

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UPDATE: Here's the news. A lot to absorb, but basically, Red is going to turn their entire product line into a modularized model so you can slowly upgrade over time rather than having to buy entirely new cameras over time. The number of sensors from the company is growing like rabbits and will include a 617-sized sensor in the future! Lastly, they're building a Red 3D camera which looks unbelievably cool.


-----


Tomorrow, Red, the digital cinema company, is announcing something big about their upcoming 3K and 5K cameras, Scarlet and Epic. They've posted a countdown timer on their homepage.


Jim Jannard, company founder, has been building up the announcements in the Red user forums.



We will announce the new Scarlet and Epic programs on Thursday Nov. 13th.


I want to say that no one has any idea how incredible this announcement will be. Call this hype... please. I am quite sure that the announcement will be called a "scam". Should be a lot of fun to hear the reactions. I can't wait.


Jim



Not many companies do a better job of publicizing themselves with no PR department than Red. Jannard's honesty and participation in user forums is refreshing.


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This week's New Yorker

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This week's issue of the New Yorker is entirely online for free. Usually, only some articles are posted online.


The subjects this week? Malcolm Gladwell dissects the comeback of the Wildcat offense, Alex Ross delves into the musical influences of the Gears of War 2 score, and...


...oh, okay, it's an issue mostly about Obama.


Had enough of this Election yet? No? Me either.



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West Wing, the real world edition

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In the TV show The West Wing, Leo McGarry, an old friend of Josh Lyman, asks Josh to go listen to a man speak. McGarry wants Lyman to help this man run for the Presidency. Lyman is skeptical, but he treks out to a VFW hall in New Hampshire and listens to this candidate speaking to a hostile crowd. And when he hears the man speak, this man named Jed Bartlet, he is converted.


From Chapter 1 of Newsweek's Secrets of the 2008 Campaign:



Barack Obama had a gift, and he knew it. He had a way of making very smart, very accomplished people feel virtuous just by wanting to help Barack Obama. It had happened at Harvard Law School in the mid-1980s, at a time when the school was embroiled in fights over political correctness. He had won one of the truly plum prizes of overachievement at Harvard: he had been voted president of the law review, the first African-American ever so honored. Though his politics were conventionally (if not stridently) liberal, even the conservatives voted for him. Obama was a good listener, attentive and empathetic, and his powerful mind could turn disjointed screeds into reasoned consensus, but his appeal lay in something deeper. He was a black man who had moved beyond racial politics and narrowly defined interest groups. He seemed indifferent to, if not scornful of, the politics of identity and grievance. He showed no sense of entitlement or resentment. Obama had a way of transcending ambition, though he himself was ambitious as hell. In the grasping race for status and achievement—a competition that can seem like blood lust at a place like Harvard—Obama could make hypersuccessful meritocrats pause and remember a time (part mythical perhaps, but still beckoning) when service to others was more important than serving oneself.


Gregory Craig, a lawyer in Washington, D.C., was one of those Americans who wanted to believe again. Craig was not exactly an ordinary citizen—he had served and worked with the powerful all his life, as an aide to Sen. Edward Kennedy in the 1980s, as chief of policy planning at the State Department in the Clinton administration and as a lawyer hired to represent President Clinton at his impeachment trial in the U.S. Senate in 1999. He had seen the imperfections of the mighty, up close and personal, and by and large accepted human frailty. But, like a lot of Americans, he was tired of partisan bickering and yearned for someone who could rise above politics as usual. A 63-year-old baby boomer, Craig wanted to recapture the youthful idealism that he had experienced as a student at Harvard in the 1960s and later at Yale Law School, where his friends included Bill Clinton and Hillary Rodham. In the late fall of 2003, he was invited to hear a young state senator from Illinois who was running for the U.S. Senate. Craig was immediately taken with Barack Obama. "He spoke 20 to 30 minutes, and I found him to be funny, smart and very knowledgeable for a state senator," Craig recalled. Craig was so visibly impressed that his host that evening, the longtime Washington mover and shaker Vernon Jordan, teased him, saying, "Greg has just fallen in love."



Josh joins the campaign, Jed Bartlet becomes President of the United States, and Josh is appointed deputy chief of staff.


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The Royal Emanuels

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Tennenbaums for the real world: Rahm, Zeke, and Ari Emanuel are one intriguing set of brothers.


Rahm Emanuel is Obama's new Chief of Staff and said to be part inspiration for Bradley Whitford's Josh Lyman on The West Wing.


Ari Emanuel is a Hollywood agent that inspired Jeremy Piven's Ari Gold on Entourage.


Zeke Emanuel is the chair of the department of bioethics at the NIH, an oncologist with a Master's degree from Oxford, an MD from Harvard, and a PhD in political philosophy from Harvard. Yeah, I know, what a loser.


This can be found in a profile in the Washingtonian.


Here's a profile in the NYTimes. In it is this legendary story:



The best Rahm Emanuel story is not the one about the decomposing two-and-a-half-foot fish he sent to a pollster who displeased him. It is not about the time - the many times - that he hung up on political contributors in a Chicago mayor's race, saying he was embarrassed to accept their $5,000 checks because they were $25,000 kind of guys. No, the definitive Rahm Emanuel story takes place in Little Rock, Ark., in the heady days after Bill Clinton was first elected President.


It was there that Emanuel, then Clinton's chief fund-raiser, repaired with George Stephanopoulos, Mandy Grunwald and other aides to Doe's, the campaign hangout. Revenge was heavy in the air as the group discussed the enemies - Democrats, Republicans, members of the press - who wronged them during the 1992 campaign. Clifford Jackson, the ex-friend of the President and peddler of the Clinton draft-dodging stories, was high on the list. So was William Donald Schaefer, then the Governor of Maryland and a Democrat who endorsed George Bush. Nathan Landow, the fund-raiser who backed the candidacy of Paul Tsongas, made it, too.


Suddenly Emanuel grabbed his steak knife and, as those who were there remeber it, shouted out the name of another enemy, lifted the knife, then brought it down with full force into the table.


''Dead!'' he screamed.


The group immediately joined in the cathartic release: ''Nat Landow! Dead! Cliff Jackson! Dead! Bill Schaefer! Dead!''



Here they are on Charlie Rose.


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Airing the dirty laundry

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Just a day after the Election was decided, McCain campaign aides have come out and admitted that they had little faith in Palin's preparation to be VP (whether or not stories like not knowing the countries in NAFTA or that Africa was a continent are true, a lot of the public had already decided based on the Gibson and Couric interviews that she deserved a No Hire). They basically hid the truth from the public to try to avoid admitting they'd made a mistake not vetting her. They were willing to put an unqualified candidate one heart attack from the most powerful position in the world simply in the name of party unity.


If true, a truly irresponsible act. Country first, huh?


If not true, and it's just scapegoating, it's still sad, though on a smaller scale. Playing the blame game via anonymous leaks to the press are the appropriate capstone to this unsuccessful campaign.


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In Nate Silver we trust

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In his spare time, just as a hobby, Nate Silver launched FiveThirtyEight.com, built a model to predict the election, and just absolutely nailed it. He missed only on Indiana, which Obama won by a just .9% of votes. Just about everywhere else, he was spot on, including the popular vote, and so far, the Senate Prediction. His model for the Election was even more accurate than his PECOTA model for baseball, and I used that to win a fantasy baseball league this year.


Mendoza Baseball


I hope newspapers and professional journalism don't die as they invest the time in long-lead, high-investment pieces that the web doesn't seem to devote enough attention to. But the web has absolutely accelerated the speed with which smart people like Silver can come to national prominence, and that is a beautiful thing. If Silver had had to fight his way up some newspaper hierarchy for a spot on the front page of the politics coverage, he would've been waiting a long time.


Incidentally, Silver analyzes the data and finds a correlation between Obama's contact rate advantage in key battleground states and his outperformance of polls in those states. He estimates "each marginal 10-point advantage in contact rate translated into a marginal 3-point gain in the popular vote in that state."


The state where had the greatest contact rate advantage? Nevada, where he had an advantage of 21%, 50% to 29%.


So those of you who made your way out to Nevada on your own dime, some driving down from distant cities like San Francisco, to go knock on doors and rally, you made a difference.


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Black Man Given Nation's Worst Job

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Ah, The Onion.



African-American man Barack Obama, 47, was given the least-desirable job in the entire country Tuesday when he was elected president of the United States of America. In his new high-stress, low-reward position, Obama will be charged with such tasks as completely overhauling the nation's broken-down economy, repairing the crumbling infrastructure, and generally having to please more than 300 million Americans and cater to their every whim on a daily basis. As part of his duties, the black man will have to spend four to eight years cleaning up the messes other people left behind. The job comes with such intense scrutiny and so certain a guarantee of failure that only one other person even bothered applying for it. Said scholar and activist Mark L. Denton, "It just goes to show you that, in this country, a black man still can't catch a break."



***


Barack Obama, or at least his campaign photographer, maintains a Flickr account. Yet another reason Obama is the young people's choice. I'm not sure McCain has even heard of Flickr.


The latest set of pics is from Election Night. Here he is, watching TV on Election Night. Here he is, doing his famous point. If you were the recipient of said point, it must feel like receiving one from Michael Jordan after a nice play.


Ah, to be so telegenic. Also, how does one get to be Obama's campaign photographer? That's a guaranteed path to a coffee table book in 8 or 9 years.


***


A mostly unrelated sidenote: this morning, our kitchen sink clogged up and then spewed up what seemed to be sludge. It smells terrible. I blame Joe the Plumber for neglecting his duties, and I pray my apartment will fix this problem soon so I can use my kitchen again.


Someday we'll look back and laugh that a candidate for the highest office in our land brought Joe the Plumber out on the campaign trail in crucial days of the Election as, well, a prop.


***


Yes, I'm still not Election'd out quite yet, and neither are my sisters and all the volunteers I worked with this campaign season, all of whom have been trading e-mails with me non stop since Tuesday morning. Perhaps we won't stop thinking or discussing politics as long as Obama is in office. Is that such a bad thing? The West Wing is no longer on TV, but maybe we'll bear witness to the real-life version. A citizenship invested in politics for more than one out of every four years? That would be a blessing.


A way to relive the campaign is through this much discussed 7 part series from Newsweek. They were given extensive access in exchange for an embargo until after the Election was decided. Read it now, before it's turned into an HBO miniseries.


***


Obama iPhone wallpapers. My wallpaper for most of the time I've had my iPhone was a photo from an Obama event at Gibson Ampitheatre here in LA last December. Then, for roughly the past month, my iPhone wallpaper was a photo I took with actress Kelly Hu while canvassing for Obama in Las Vegas (if you have to ask, you probably don't know what she looks like, and besides, she was out with us canvassing and rallying, so she's ace in my book).


I thought I'd be ready for a non-Obama-themed wallpaper now that he'd won the Election, but no, I'm going to choose one of these from Flickr for my phone for just a while longer.


***


DailyKos breaks down exit poll data to assess the Election vote by age and race. The younger the voter, the more the skew towards Obama, but he won the 18-29, 30-44, and 45-64 age groups. Only the 65+ demo went McCain.


As for race, McCan won the white vote, the largest bloc by far at 74% of the voting pool, by 55% to 43%. But Obama won the African-American, Latino, Asian, and Other categories, all by more than 60%, and that carried it for him.


As for turnout, the estimate is that 64% of the voting-age population voted on Tuesday. That would be the highest turnout since women got the right to vote in 1920.


***


Jumping back to Tuesday's Indecision 2008 special, I noted yesterday that I found out that Obama had become President Elect, officially, at the end of that special. I sent it to Joannie, and she was moved that Colbert started to cry. When I wrote, as the title of my post, "When Colbert Wept", I meant it facetiously, as I thought he was pretending to be choked up in character (it's also a reference to a book titled When Nietzsche Wept which I read a long time ago).


But on yesterday's Daily Show, Chris Wallace makes reference to Colbert and Stewart crying when they found out Obama had won...






And so I went back and watched that moment when they announced Obama as the President, and it does seem like Colbert is fighting back some emotion (they say women are better readers of emotion, and Joannie has a higher Emotional IQ than I do). Even if Colbert isn't overwhelmed by the moment, I'd just like to think he is, because who didn't tear up a bit when Obama walked out onto that stage with his family? Maybe Obama is the only person cool enough to take it in stride, but I was bobbing at sea in tidal waves of emotion.


What do you think? Did Colbert drop out of character for just a beat?


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Getting that coveted copy of the NYTimes

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Sadly, I was shut out of getting a copy of the NYTimes yesterday, like many people. A note on their website today:



[Note to readers: Copies of Wednesday's paper were again available for the $1.50 cover price Thursday at Times headquarters, at 620 Eighth Avenue in Manhattan, between 40th and 41st Streets, until they run out. Commemorative editions may be ordered online or at 1-800-671-4332 for $14.95, which includes shipping and handling.]



Alas, the phone line is overwhelmed and not fielding calls right now, and that online link times out. If you're in the pipeline and get a timeout, the store also annoyingly redirects to the NYTimes.com front page for no good reason. Oh, if only Amazon could fulfill everyone's orders; clearly the NYTimes Store has the capacity to handle very little order volume.


Among Obama's many powers we can add the ability to temporarily revive a moribund business.


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And Colbert wept

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At 7:59pm PST last night, I was watching TV with my roommate, flipping between CNN, MSNBC, and Comedy Central, already feeling certain about victory. But none of the networks had called it yet. And then, at that moment, just as Indecision 2008's hour of programming was up, there was this:






One of the greatest moments I've ever seen live on TV.


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The Big Picture

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You just knew The Big Picture would have some great shots of our next President.


Obama is the coolest cat wherever he goes. He never looks anything less than like some cinematic dream of a President. It's almost surreal that he is actually our next President.


That photo of McCain with his tongue out at the end of that last debate, all those pics of his eye-rolls and tongue juts, I don't recall a single photo of Obama like that. I half expect Obama came out of the womb not crying but giving fist bumps to his doctor and mother and pointing to nurses in the delivery room to thank them for their work.


That photographic contrast is just one of the many factors that fed into this landslide. One of the candidates looked like the guy you wanted to lead you out of the crisis, while the other looked like the hothead who would've gotten you into it.


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The Onion, The Chicago Tribune

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Headline: Nation Finally Shitty Enough to Make Social Progress


Half satire, half brutal truth.



"If Obama learned one thing from his predecessors, it's that timing means everything," said Dr. James Pung, a professor of political science at Princeton University. "Less than a decade ago, Al Gore made the crucial mistake of suggesting we should care about preserving the environment before it became unavoidably clear that global warming would kill us all, and in 2004, John Kerry cost himself the presidency by criticizing Bush's disastrous Iraq policy before everyone realized our invasion had become a complete and total quagmire."


"Obama had the foresight to run for president at a time when being an African-American was not as important to Americans as, say, the ability to clothe and feed their children," Pung continued. "An election like this only comes once, maybe twice, in a lifetime."



My sister wrote me an e-mail this morning to let me know that the Chicago Tribune sold out in 20 minutes. She was at a sundry shop in her office when someone walked in with 10 papers, and she slide tackled and roundhouse-kicked a few people to grab a few copies. I'm going to frame that baby.


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Some notes on a historic day

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How is it that so many politician's best speeches are their concession speeches? Gore, Kerry, and now McCain gave their most heartfelt and moving speeches after their dreams for the White House had come to an end.


That was the McCain that held such appeal to so many independents back in 2000. It took the duration of this election battle, but McCain finally found grace in defeat at the end.


***


The youth vote? A record turnout. One of the few sad moments for me this night was realizing I'm not considered part of the youth vote anymore. But I am grateful towards the 18-29ers tonight. That was the only age segment in which Obama won a majority of the white vote.


***


Sarah, you get back up there and, uh, keep an eye on Putin.


***


Obama gave his speech in Chicago behind giant panes of bulletproof glass. I confess, it was reassuring to see those in place.


***


Hey Joe. Here's a plunger. Get back to work.


Oh, and some of those toilets? You clogged them with all your crap.


***


If you consider America as a brand, then in one day it has improved its standing in a way that any corporation would kill for.



From far away, this is how it looks: There is a country out there where tens of millions of white Christians, voting freely, select as their leader a black man of modest origin, the son of a Muslim. There is a place on Earth — call it America — where such a thing happens.


Even where the United States is held in special contempt, like here in this benighted Palestinian coastal strip, the “glorious epic of Barack Obama,