Intellectual Ore

On August 4th, I’ll be completely debt-free.  No mortgage, no car payments, no credit card balances, no installment loans, no personal debt, no margin, nothing.  I’ll owe nobody a single cent.

This is pathetic; watching CNBC everyday, you’d think there was some kind of financial armageddon going on. Real interest rates are negative. The Case-Shiller index is down over 15% YTD.  ”Wire houses” (investment banks that do nothing other than move money around) are suffering as the “de-levering” is forcing them back into sane amounts of leverage (below 30:1), which is taking massive amounts of cash out of the markets.  The VIX stands at 22.94.

For investors with long time horizons, this might turn out to be a once-per-decade to buy assets very cheaply.  I’m not too sure what’s going to happen, but I know that it’s high time I start using other peoples’ money to make money.

In short, I really want to get into debt.

In the no-too-distant past, ”mass media” meant newspapers and magazines.  As time passed, radio sped things up and television brought a moving picture, but it really was more of the same: a highly asymmetric communication style characterized by someone else’s agenda dictating what the news of the day would be.

Looking back, it’s incredible how much power publishers wield in this model.  A media producer, by his choice of what to cover and how, inevitably introduces some bias into the way the news is reported.  It’s tempting to think that producers would only pick “high-quality” stories, but the whole process of selecting what gets covered is highly opaque and frankly, quite easily abused.  I imagine that many deals have gone down over the years in smoke-filled rooms where producers were induced, by means ethical and otherwise, to conform their media agendas to those of outside parties. 

The Internet, as a mass media outlet, is the most absolutely democratic communication tool in the history of humanity.  The entire idea of manipulating the media agenda, say, in order to manufacture a cover-up, seems completely passe in an era where users are in complete control of their experience, and a record of everything that’s ever been printed (try archive.org) exists. 

The new availability of information is forcing organizations to be a lot more honest.  Forward-thinking organizations have realized the need to go beyond ”no comment” toward explanations and apologies.

The recent buzz around the NYPD’s assault of a Critical Mass biker (video) demonstrates the Internet’s power to keep organizations honest.  Whereas in the past, the NYPD might have been able to keep coverage of what happened under the radar, one person, who was opportunistically recording the bicyclists, caught the assault on video.  That video has since been uploaded to YouTube, where it has received over 250,000 views in the two days since it was uploaded.  I saw the video on Reddit yesterday, before the story was picked up by the print media and used as the headline of several of today’s NYC dailies.  The officer has since lost his badge; I hope a trial for assault and battery swiftly follows.

While browsing online for electronics supplies last week, I stumbled upon Brooklyn-based NYC Resistor.  Located at 397 Bridge St., right next to the Hoyt St. 2/3 station, these guys are bringing “the great Warranty-Voiding conspiracy” to New York City.

On Saturday, I attended Resistor’s “Art of the Game”, a hybrid art/electronics exposition in their loft space.  The cover seemed high ($20), but let me tell you, it was worth every penny.  I saw tons of interesting exhibits including a huge (wall-sized) ”Game of Life” simulation, a jumbo-size LED clock, an automated arm-wresting system, and Dave Clausen’s amazing LED Cylinder.  The spirit of Resistor fuses the creative intensity of the fashion industry (where Diana works) with the free-spirited tinkering of hacker culture.  Resistor is doing NYC a huge service by providing an outpost for hackers/Makers; I hope they continue to have the financial resources to hold down their space, which gets quite pricey, being in DUMBO.

I want to start something like this in Champaign-Urbana.  Rent is dirt cheap and this space would work well.  If another 3-4 people are interested, I’d be willing to put up some cash and rent a space.  Any takers?

Tomorrow night, I’m heading to Ignite NYC.  I’ll post details after the event.  If my business cards come by then, I’ll be extraordinarily pleased.

I participated in a Goldman Sachs Community Teamworks project today.  With close to 200 other interns, I worked to improve the conditions in a public park in Brooklyn; I scraped and repainted the lines on a handball court.  Despite being a blatant PR play and the relatively minimal amount of actual work done, it was a nice diversion from a typical day at the office.  I’m happy I got a chance to give back to NYC while getting to know a few of my fellow interns better.

On the way home, I helped a lady with a door on the subway.  She saw my shirt and remarked how my effort to help her through the door was great “community teamwork”.

I like free time as much as the next person.  However, something I’ve noticed lately on Wall Street is the unspoken assumption that it’s a great day, just because it’s Friday.  Work is basically awful, the thinking goes, and so any “escape” possible is warmly welcomed. 

The attitude described above is pretty sorry.  When I look forward to free time, it’s in anticipation of doing specific, enjoyable activities.  Last weekend, I spent time with my old roommate Dan, and visited the Museum of Modern Art.  The weekend before that, I spent a lot of time outdoors with Stephanie.  The idea of being happy simply for the sake of not having to work, at least to me, seems like a pretty strong indication that a person is wasting their life doing a job that isn’t right for them.

“Get busy living, or get busy dying.” - Andy Dufresne, The Shawshank Redemption

There’s a company presenting in a conference room next to me right now touting “100% Customer Success”.  Among their five “representative implementations” are BNP Paribas and Countrywide Financial.  Honestly, couldn’t they have picked more than 5 companies free of major scandals and/or bankruptcy?  I guess it beats lying outright about the identity of your clients - but I’m still rolling on the floor laughing.

UPDATE (7/29): Countrywide has won the Consumerist “Worst Company in America” award.

After work today, Del and I paid a visit to Joel and friends over at Fog Creek Software.  I didn’t bring a camera, but I really like their office.  It’s a bit dingy from the outside, but the inside is new, modern, and downright sexy; it’s hard not to like a place with a community lunch table, fish tank, Aerons, and walls lined with shelf after shelf of high-quality technical books.  Fog Creek is a place that would make me enjoy coming to work.  In stark contrast to the high-stress “grind it out” environment of finance, I felt like a piece of the west coast “chill” culture had been transplanted to NYC.  I really enjoyed going, and with the new office, things should be even better next year; Mark (Joel’s co-founder) was pretty excited about the blueprints.

About three weeks ago, I was walking through TriBeCa, when for no particular reason, it hit me that everything was just…expensive.  From $25 dinners to million-plus housing, I got the sense that the people that lived there must have a lot of money, the way they seemed willing to throw it around.

The funny part is, they don’t.  This article by Forbes gives some statistics on ZIP code 10013, also known as the “Triangle Below Canal” (TriBeCa).  Even with a median house price of $1.875 million, the median income is only $49,314.

Something is very out of whack with this scenario.  Mortgage payments with 20% down on a house valued at $1.875 million would be around 9,000/month, more than double the median income.

With income/house price ratios like these, it’s hard to see how the “mortgage crisis” didn’t come sooner.  Are these people all perpetual renters in an area with an insanely low rental yield?  Maybe a few Swiss bank accounts are at work?  I wonder, is there any literature exploring the correlation between median house price/income versus house price volatility?  With ratios getting into 2.18:1, I can’t understand how the valuations stay as high as they do in TriBeCa.

I have a sort of fascination with self-improvement.  I’ve been reading Steve Pavlina’s blog on and off for about a year; Stephen Covey and I go back at least half a decade.  Over the weekend, I had the good fortune of snagging a copy of How to Win Friends and Influence People (original 1936 printing) for $5 from a street vendor near NYU.

Carnegie’s book, arguably the first self-help book written by an American author, is the most “primary” in its orientation; it’s filled with lucid firsthand observations of daily life, along with a lot of statistics from direct measurement.  Covey’s book, on the other hand, is more longitudinal, presenting what he’s found to be “recurring themes” in other authors’ writing.  Steve Pavlina writes about everything from failure in the video game business, to how to become an early riser, blending what he’s read with firsthand experiments.

In some respects, these three couldn’t be more different.  Behind the facade of similarity put on by being male and white, one finds a Mormon with a PhD, a machine-part salesman from Missouri, and a game-programming atheist from Las Vegas.  Maybe, in a parallel dimension, we could put the three against each other in an ultimate deathmatch over, say, same-sex marriage.  For now, however, I’m content in the knowledge that these three can’t be that far from the truth, given that they’ve managed to arrive at consensus on how to improve one’s life.

I was heading to work on the 2/3 last Thursday when I saw a gentleman perusing Taleb’s Black Swawn.  Being that this is one of my favorite books, I was inclined to ask the gentleman’s opinion of it; as it happens, he was an actuary en route to a discussion about the book.  An actuary reading Taleb is something like a Christian reading the Quaran, so I knew right away that I was speaking to an extremely open-minded person.  He explained that in the course of his work at Standard and Poor’s, he’d seen the insurance industry shoot itself in the foot by systematically underpricing risk.  When disaster strikes, he explained, insurance companies lose a lot of money, but shortly after, premiums go up as disasters seem “more likely” in retrospect.  Faced with a glut of new premium money, the companies seek to expand the business they’ve written, and end up competing each other to a price point below the actuarially-derived zero-profit point, into loss.

When I explained that I was an engineering student, he contrasted his profession with mine, explaining that both, despite the proliferation of highfalutin models, require a pragmatic spirit capable of seeing beyond the limits of models.  It’s rare to meet someone so open-minded, especially over the age of 40; I was thoroughly impressed with this man’s intellectual accomplishment.