Over the last few years, from my work on a Neighborhood Crime Prevention Council, I've gotten to know a number of Oakland cops. They're solid professionals: intelligent, polite, competent, dedicated. I'm absolutely appalled at the events of this weekend, in which two police officers died in a hail of bullets from a young man they pulled over on a routine traffic stop, and two more died later when he shot at them from a closet with an AK-47. I have several comments on this:
To the members of the Oakland Police Department: my heart breaks for you. You have my deepest sympathy and my unqualified support.
To the people who feel the police are rude to them when they pull them over for a traffic violation: if they seem a little harsh, they're wondering whether you might possibly be another Lovelle Mixon. These aren't the first police officers to be killed during a routine traffic stop, and they won't (unfortunately) be the last. If you get pulled over, be polite to the officer, and the officer will (probably) be polite to you. And yes, I do know about D.W.B. (driving while black) - but I firmly believe that's a minority of officers.
To the NRA: You've had your Supreme Court decision. You definitely have the right to own guns and keep them in your house. Can we now have a conversation about what weapons you can own? There's probably nothing we can do about the semi-automatic pistol that killed the two traffic officers; but the SWAT team died in a hail of bullets from an AK-47. An AK-47 - that's a military weapon. Why can civilians even buy this damn thing? What are you going to do with it - hunt deer? You'd cut the deer in half. At one point, in this country, civilians couldn't buy these weapons, then we elected the neocons and that was repealed; can we please discuss, again, restricting civilian access to guns normally used on the battlefield? Two good officers are dead because a civilian - no, a paroled felon - had access to a military assault rifle. Frankly, members of the NRA, I hold you at least partially responsible because of your mindless insistence that anybody, anywhere, any time, should be able to own any weapon.
Monday, March 23, 2009
Saturday, March 14, 2009
Old Science Fiction Movies
We watched Journey to the Center of the Earth last weekend, the 1959 one with James Mason and Arlene Dahl. The first time I saw it I was a teenager, and while I knew intellectually that you can't go down inside the earth and find all that stuff, emotionally I bought the whole load.
Watching it again 40 years later, I noticed more weird stuff than just Pat Boone (remember Pat Boone?) in tartan pants. No, I don't know what tartan. I admit that Pat Boone in 1959 was extremely decorative - the uncritical would say that he was a smokin' hottie - but frankly his character comes off kind of stupid. He did look good in full Highland formal dress, with kilt and sporran.
I wondered about the phosphorescent algae that allowed our adventurers to dispense with their wind-up lamps, just about the time the salt in the salt cavern corroded the coils and made them fail. OK, salt does corrode metal; but in caverns under the earth, why is the salt loose, in granules, like table salt? Wouldn't it be a solid mass? And even loose, how did it get into the lamps? Did they roll in it? But mostly, why are there phosphorescent algae? What advantage do the algae get from glowing, if they're in a cave?
Ellery Queen, in The Player on the Other Side, had a character comment that "Y is a crooked letter." (You have to read it to get the context. In fact I strongly recommend the book - it's one of Queen's best.) So I know I shouldn't ask "why" about old science fiction movies, but:
When they run into a field of subterranean mushrooms (OK, that works), 6 feet tall (ah, excuse me?), how lucky are they that, when they chow down on them, they're not poisoned?? None of these people is a mycologist, how do they know it's safe? Also, they chop the mushrooms down with an axe to make a raft, but most of the mushroom stems I've seen can be snapped between two fingers.
Why is there a sea below the earth, with a high ceiling covered with those phosphorescent algae, so they can all see to build a raft and sail on it? Why isn't there just a big dark cavity full of water?
Why are there giant lizards on the shores of the sea beneath the earth? Giant flesh-eating lizards? What do they eat, in between visiting groups of Victorian adventurers? (I say, "visiting groups," because, of course, there was an earlier visit from "Count Saknussen" - they find the count's bones, and his finger bone is pointing to the way out. No, really.) The question of what the lizards eat when they can't get at James Mason or Arlene Dahl never seems to occur to anybody in the film, even though there are no animals of any kind except for the lizards.
The true and regrettable answer to all these nit-picks, of course, is that if they weren't like that, we wouldn't have the story. Blame Jules Verne.
For all that, I enjoyed it thoroughly, and I may not bother to see the new 3D version. It won't have James Mason being the irascible Scottish scientist (a role he does wonderfully), which will outweigh the fact that it also won't have Pat Boone. And I enjoyed the scientific idiocies quite as much as I enjoy Star Wars, even if I do cringe when Luke Skywalker fires the laser cannon on the Millennium Falcon, and they recoil...
Watching it again 40 years later, I noticed more weird stuff than just Pat Boone (remember Pat Boone?) in tartan pants. No, I don't know what tartan. I admit that Pat Boone in 1959 was extremely decorative - the uncritical would say that he was a smokin' hottie - but frankly his character comes off kind of stupid. He did look good in full Highland formal dress, with kilt and sporran.
I wondered about the phosphorescent algae that allowed our adventurers to dispense with their wind-up lamps, just about the time the salt in the salt cavern corroded the coils and made them fail. OK, salt does corrode metal; but in caverns under the earth, why is the salt loose, in granules, like table salt? Wouldn't it be a solid mass? And even loose, how did it get into the lamps? Did they roll in it? But mostly, why are there phosphorescent algae? What advantage do the algae get from glowing, if they're in a cave?
Ellery Queen, in The Player on the Other Side, had a character comment that "Y is a crooked letter." (You have to read it to get the context. In fact I strongly recommend the book - it's one of Queen's best.) So I know I shouldn't ask "why" about old science fiction movies, but:
When they run into a field of subterranean mushrooms (OK, that works), 6 feet tall (ah, excuse me?), how lucky are they that, when they chow down on them, they're not poisoned?? None of these people is a mycologist, how do they know it's safe? Also, they chop the mushrooms down with an axe to make a raft, but most of the mushroom stems I've seen can be snapped between two fingers.
Why is there a sea below the earth, with a high ceiling covered with those phosphorescent algae, so they can all see to build a raft and sail on it? Why isn't there just a big dark cavity full of water?
Why are there giant lizards on the shores of the sea beneath the earth? Giant flesh-eating lizards? What do they eat, in between visiting groups of Victorian adventurers? (I say, "visiting groups," because, of course, there was an earlier visit from "Count Saknussen" - they find the count's bones, and his finger bone is pointing to the way out. No, really.) The question of what the lizards eat when they can't get at James Mason or Arlene Dahl never seems to occur to anybody in the film, even though there are no animals of any kind except for the lizards.
The true and regrettable answer to all these nit-picks, of course, is that if they weren't like that, we wouldn't have the story. Blame Jules Verne.
For all that, I enjoyed it thoroughly, and I may not bother to see the new 3D version. It won't have James Mason being the irascible Scottish scientist (a role he does wonderfully), which will outweigh the fact that it also won't have Pat Boone. And I enjoyed the scientific idiocies quite as much as I enjoy Star Wars, even if I do cringe when Luke Skywalker fires the laser cannon on the Millennium Falcon, and they recoil...
Bernie Madoff's Ponzi Scheme
The more I hear about Bernie Madoff, the more I shake my head. The common stereotype of a criminal is that he steals because it's easier than working for a living. And yet, look at what Bernie Madoff did to support his Ponzi scheme. He had, I think, something like 4,000 clients; and he sent every one of them a brokerage statement, showing assets, stock trades, etc., every month for something like nineteen years; and every one of those statements was completely fictional. He had to invent a consistent stream of data for each one of those 4,000 or so clients, and maintain it month to month, at least enough to keep them from getting curious. (Not that any of his clients was distinguished by curiosity or critical thought.)
How did he keep track of all this? Did he have it in a computer? Did he type stuff by hand? His accountant too - the "strip-mall accountant" - did they sit together in the office, making up stuff to put in the SEC reports? I've never had a job in my life where I worked so hard with so much at stake. I think he turned himself in so he wouldn't have to deal with those statements any more.
How did he keep track of all this? Did he have it in a computer? Did he type stuff by hand? His accountant too - the "strip-mall accountant" - did they sit together in the office, making up stuff to put in the SEC reports? I've never had a job in my life where I worked so hard with so much at stake. I think he turned himself in so he wouldn't have to deal with those statements any more.
Monday, March 09, 2009
Why I Don't Tweet
The whole Twitter phenom just amazes me. Now, I can claim to be pretty techno-savvy. I was doing stuff online long before most people. I had a PDA when most of my peers were carrying DayRunners around. Hell, I was doing online searches for currency exchange rates in 1978, on a 300 baud TI SilentWriter 800. But Twitter - I don't get Twitter. Or rather, I get it, but I don't want it.
Readers of this blog may sometimes feel that I don't know when to shut up. I feel that if a subject is of sufficient importance to write about, it's important enough to do some research, give it some thought, carefully consider all the angles. This process is impossible on Twitter, because Twitter restricts you to 140 characters at a time. That's not a blog entry, it's a haiku; in fact, most haiku wouldn't fit on Twitter. Maybe in two successive tweets you could do a haiku, but who would know?
I started thinking about this the other day when Adam Felber, one of my favorite bloggers, announced on his blog that he is now on Twitter. I read Fanatical Apathy for two reasons, first, Adam's biting, insightful satire, and second, the charming group of posters who respond to him and to each other. So, when Adam set up on Twitter, I went and looked at his tweets. ("Tweets" - the word itself is just demeaning.) They weren't insightful, or meaningful, or satirical - they weren't anything. (OK, he has a baby under 1 year old. This is bound to have some effect.) In fact, I told him as much.
As far as I can tell, the point of Twitter is either to dribble out your immediate thoughts to the world as the spirit moves you, 140 characters at a time, or alternatively to subscribe to other people's tweets as the spirit moves them. I gather that celebrities have tens of thousands of random people subscribing to their tweets. I assume the tweets come into your cell phone as text messages; so your cell phone is constantly going off.
This is carrying electronic connectivity to absurd lengths. I spent a number of years, in my last job, carrying a duty pager, AKA the Electronic Leash. This went off whenever anything went wrong, or when someone wanted to talk to me about something, or when there was a meeting, or whatever. In fact, after one upgrade, the system would deliver news and sports updates to your text pager - constant buzzing. Frankly, I turned the sound off, except for actual messages to me. I don't want to be that frigging "connected"; and that's my objection to Twitter.
But that isn't my only objection - Twitter is constant "connection," but without any actual human contact. Just because you subscribe to Bill Gates' tweets doesn't mean you know Bill Gates. (Doonesbury nailed this pretty effectively, if you saw the strip about Roland Hedley and his tweets on March 9) I'm all in favor of constant connection if it has a human being attached to it. I want to have lunch with a friend. I want to go to a museum with a buddy. I don't want to get random 140 character blurts from someone I'll never meet.
So have fun, all you Tweeters - but if you want to talk to me, I'll be here, writing in complete paragraphs.
Readers of this blog may sometimes feel that I don't know when to shut up. I feel that if a subject is of sufficient importance to write about, it's important enough to do some research, give it some thought, carefully consider all the angles. This process is impossible on Twitter, because Twitter restricts you to 140 characters at a time. That's not a blog entry, it's a haiku; in fact, most haiku wouldn't fit on Twitter. Maybe in two successive tweets you could do a haiku, but who would know?
I started thinking about this the other day when Adam Felber, one of my favorite bloggers, announced on his blog that he is now on Twitter. I read Fanatical Apathy for two reasons, first, Adam's biting, insightful satire, and second, the charming group of posters who respond to him and to each other. So, when Adam set up on Twitter, I went and looked at his tweets. ("Tweets" - the word itself is just demeaning.) They weren't insightful, or meaningful, or satirical - they weren't anything. (OK, he has a baby under 1 year old. This is bound to have some effect.) In fact, I told him as much.
As far as I can tell, the point of Twitter is either to dribble out your immediate thoughts to the world as the spirit moves you, 140 characters at a time, or alternatively to subscribe to other people's tweets as the spirit moves them. I gather that celebrities have tens of thousands of random people subscribing to their tweets. I assume the tweets come into your cell phone as text messages; so your cell phone is constantly going off.
This is carrying electronic connectivity to absurd lengths. I spent a number of years, in my last job, carrying a duty pager, AKA the Electronic Leash. This went off whenever anything went wrong, or when someone wanted to talk to me about something, or when there was a meeting, or whatever. In fact, after one upgrade, the system would deliver news and sports updates to your text pager - constant buzzing. Frankly, I turned the sound off, except for actual messages to me. I don't want to be that frigging "connected"; and that's my objection to Twitter.
But that isn't my only objection - Twitter is constant "connection," but without any actual human contact. Just because you subscribe to Bill Gates' tweets doesn't mean you know Bill Gates. (Doonesbury nailed this pretty effectively, if you saw the strip about Roland Hedley and his tweets on March 9) I'm all in favor of constant connection if it has a human being attached to it. I want to have lunch with a friend. I want to go to a museum with a buddy. I don't want to get random 140 character blurts from someone I'll never meet.
So have fun, all you Tweeters - but if you want to talk to me, I'll be here, writing in complete paragraphs.
Tuesday, March 03, 2009
Evaluating Risk
Wired magazine had a really interesting article on Feb. 23, which I just saw today, called Recipe for Disaster: The Formula That Killed Wall Street. It's the story of how a Chinese mathematician (or quant) called David Li developed a formula for modeling risk, which was so brilliantly simple that it came to be used all over the financial industry - until the assumptions it was based on fell apart. For the mathematically inclined, the formula (called a Gaussian copula function) is reproduced and analyzed (at a very high level).
The article describes the curious reactions in the financial industry to Mr. Li's formula. The principal response seems to have been, "This is so easy, it must be right." Here's a quote from Wired:
The whole episode reminds me of a famous quote from Lewis Carroll's The Hunting of the Snark:
The article describes the curious reactions in the financial industry to Mr. Li's formula. The principal response seems to have been, "This is so easy, it must be right." Here's a quote from Wired:
At the heart of it all was Li's formula. When you talk to market participants, they use words like beautiful, simple, and, most commonly, tractable. It could be applied anywhere, for anything, and was quickly adopted not only by banks packaging new bonds but also by traders and hedge funds dreaming up complex trades between those bonds.Why was it so simple and beautiful? For one thing, it didn't bother to use real data on mortgage defaults behind the securities to make the estimation; that would have taken too much time to gather. It used the historical prices of credit default swaps on the mortgage-backed securities as the measure of risk, assuming that the financial markets had priced those risks correctly. Of course, all those prices were based on a world in which housing prices went ever onward and upward. Unfortunately, the people who used it to make investment decisions weren't mathematically adept enough to understand the distinction between correlation and causation.
The whole episode reminds me of a famous quote from Lewis Carroll's The Hunting of the Snark:
He had bought a large map representing the sea,
Without the least vestige of land:
And the crew were much pleased when they found it to be
A map they could all understand.
Dead Banks
So Citi wants yet more money, and AIG needs another huge infusion. None of the Treasury's efforts so far have had any effect on all those toxic assets. The really disturbing assumption on all this was quoted by Paul Krugman today, from a blog called Tim Duy's Fed Watch. The Tim Duy article is interesting if dense, but here's what you really need to know (emphasis mine):
Meanwhile, many of the oversized mortgages taken out on overpriced houses are in default. In a real world, this would mean that the securities built around those mortgages are worthless. The security owners bought them, assuming they would get a specified income stream; not gonna happen. But if we all admit these securities are worthless, then the banks that own them have to write down their asset value; they should be doing it anyway, it's called "marking to market," and the banking industry is desperately, maniacally fighting doing it. And given the amount of dud securities that were sold, it's odds on that the banks doing the writedowns will have to admit publicly that they are - insolvent. Broke. Stony. They owe more than they own.
The government - two administrations now - has been trying for 6 months to figure out what to do about these "toxic assets" because they "can't establish a value for them." What they really mean is that they need to figure out a way to put a value on them that will allow the banks holding them to maintain the illusion of solvency. You know and I know that the value on the basic mortgage-backed securities is maybe 15 cents on the dollar (I made that up; but it won't be high, whatever it is); the value of the derivatives on them, like CDOs and CDO-squared (see the glossary on Planet Money), is effectively zero. Zilch. Since they're electronic, they won't even make good wallpaper. The latest government scheme, also quoted by Krugman from a blog called Calculated Risk, is to involve "public-private partnerships". Once again, here's the gist:
I'm sorry - I think we need to admit that some of these institutions are dead, and bury the carcasses. Will there be fallout? Yes. Do I know how bad it'll be? No. But if we continue to try to prop these dead institutions up, in the hope that some day the economy will recover and housing prices will return to where they were in 2006, and all the mortgage-backed securities will miraculously have value again, we will fail; and we will bankrupt ourselves and our descendants in the process. We all need to get used to the fact that housing prices may never return to where they were in 2006.
Policymakers are assuming that restoring proper functioning in credit markets - and confidence in general - is equivalent to a housing price rebound. They seem incapable of envisioning a world in which this is not the case. This tunnel vision prevents policymakers of trying to devise policy which assumes that the many of the assets in the banking system are simply “bad.” For Bernanke and Geithner, there are no bad assets. Only misunderstood assets.Think about this. We are in this mess because too many people borrowed more money than they could pay back on overpriced houses. The houses were overpriced. House prices have been falling for awhile; they have farther to fall to reach their "true" price, which is the price paid to a willing seller by a willing buyer, who will be paying an acceptable fraction of his total verified income to a willing lender. With people losing jobs left and right, willing buyers haven't got the money to throw around that they did a few years ago.
Meanwhile, many of the oversized mortgages taken out on overpriced houses are in default. In a real world, this would mean that the securities built around those mortgages are worthless. The security owners bought them, assuming they would get a specified income stream; not gonna happen. But if we all admit these securities are worthless, then the banks that own them have to write down their asset value; they should be doing it anyway, it's called "marking to market," and the banking industry is desperately, maniacally fighting doing it. And given the amount of dud securities that were sold, it's odds on that the banks doing the writedowns will have to admit publicly that they are - insolvent. Broke. Stony. They owe more than they own.
The government - two administrations now - has been trying for 6 months to figure out what to do about these "toxic assets" because they "can't establish a value for them." What they really mean is that they need to figure out a way to put a value on them that will allow the banks holding them to maintain the illusion of solvency. You know and I know that the value on the basic mortgage-backed securities is maybe 15 cents on the dollar (I made that up; but it won't be high, whatever it is); the value of the derivatives on them, like CDOs and CDO-squared (see the glossary on Planet Money), is effectively zero. Zilch. Since they're electronic, they won't even make good wallpaper. The latest government scheme, also quoted by Krugman from a blog called Calculated Risk, is to involve "public-private partnerships". Once again, here's the gist:
By offering low interest non-recourse loans, these public-private entities can pay a higher than market price for the toxic assets (since there is no downside risk). This amounts to a direct subsidy from the taxpayers to the banks. It is amazing how many different ways they've tried to recycle the same bad idea.This is yet another effort to avoid admitting that one or more "major" banks, "too big to fail" banks, are - insolvent. Broke. Their capital and assets won't cover their liabilities.
I'm sorry - I think we need to admit that some of these institutions are dead, and bury the carcasses. Will there be fallout? Yes. Do I know how bad it'll be? No. But if we continue to try to prop these dead institutions up, in the hope that some day the economy will recover and housing prices will return to where they were in 2006, and all the mortgage-backed securities will miraculously have value again, we will fail; and we will bankrupt ourselves and our descendants in the process. We all need to get used to the fact that housing prices may never return to where they were in 2006.
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