Thoughts In Grey

Making changes, some big, some small

Posted this on Facebook earlier, and repeating here.

I guess a bunch of people made a whole bunch of resolutions for the new year. I've never been into that, but here's some stuff that's changing right now or in the immediate future.

1. I'm going to say "no" a whole lot more. I've allowed myself to get way too pissed off way too many times as I've tried to adjust preferences to suit others around me, either because I said yes when I shouldn't have, or got overly enthusiastic about something or somebody when I should have known better to begin with.
2. In that vein, decided to skip the planned trip to Steamboat Springs. It's not really one of my favorite places to ski, and spending a lot of money on transportation, tickets, etc. just because the accommodations are free makes no sense. Better to save all that money and go someplace I want to rather than someplace that somebody else thinks I'll love.
3. I've listed both my Snowbird timeshare weeks for sale. Having large units doesn't make sense for my life anymore, if it ever did. I love that mountain, but it would be better to maybe buy a week or two in a small studio that suits my needs rather than spending the annual maintenance dollars on the bigger units, then struggling to find people who want to fill it up.
4. While I'm at it, I will be giving up one of my Snowbird lockers. In the old days when you could dash to the airport with a carry-on and 20 minutes to spare, it kind of made sense to have a locker full of clothes waiting. You can't do that anymore and I'm skiing other places more often, so want stuff accessible at home. I'll keep a locker for powder-specific gear I only use in Utah and check a duffel bag for the rest.
5. Changing my workout routine completely since it wasn't working. When I ski next year, I want to feel powerful again.
6. When my term as president of the Los Angeles Chapter is up at the end of June, I'll be backing out of UCLA Anderson Alumni for a while. After a dozen years of being involved and two years as president of the chapter, it's time to take a break. The chapter needs new blood and I need a new challenge.
7. Also, for the first time since graduating, not taking an active part in running my college reunion. I just don't get that much out of my association with Columbia anymore. Might be different if I were on the east coast, but it just isn't all that relevant where I am right now.
8. Looking for a job working for somebody full-time. I'm a great project manager but I'm really not much of a salesperson. Spending so much of my time on business development just really saps my enthusiasm. Once again, gotta live the life that's right for me, and I'm just not a salesperson.
9. HBO, Showtime and a bunch of other premium channels have been gone for a while because I couldn't justify the cost for the little I watched them. The DVR has been gone for a month and I don't miss it either. Now I find myself wondering "do I really need a TV at all?" Certainly, I don't need two of them! My office TV is about to be history along with about $10 a month in TW Cable fees.
10. Part of the cable TV savings have been invested in a Kindle and a new reading lamp. Much better use of my time I think. Which is a nice way of saying: less TV, more reading.
11. Cutting back on the red wine. I still love a nice red, but those nice reds do seem to have a way of finding themselves and their calories tacked onto my waist.
12. Some people are just pure poison and need to not be part of my life anymore. They've been pissing me off endlessly lately and leaving me in a rotten mood, which has in turn been poisoning friendships with others.
13. Done with Foursquare. The supposed benefits don't seem to exist. My friends know where to find me. People who aren't my friends don't need to.
14. Leaving my cellphone home a lot more, or at least turning it off.  A time may come very soon when I again don't have a choice, but right now I do.
15. Seriously working on my photography. As I've gotten more and more proficient with PhotoShop CS5, it's become more and more fun. Maybe a gallery show sometime in the future? There's a new artists-coop gallery nearby that might just be worth being part of in the future.

I think 15 is enough for now.

-mg

Brief notes

I've been offline and mostly sick for over a week, so just to catch up quickly:

• The big news is the Mac that I'm writing this on. See below for my first impressions.
• Markets continue to move up and down rather aimlessly. My own take is that people (both of the "political" and "business" camps) want to try to take us back to a place which we can't go back to.
• The same is true for housing. As the Tom Petruno suggests in the LA Times today, it may finally be time to stop trying to support the unsupportable and allow housing to decline to a market clearing price. Yes, it would be painful, but the pain will happen no matter what. Let's get it over with.
• I really enjoyed my friend Nigel Swaby's presentation at Ignite Salt Lake about his involvement with Casey Serin. The online discussions of Casey are where I got to know Nigel, and really regretted having to watch the video feed from home because I was too sick to fly out. Casey was, and in many ways still is, the personification of the financial delusions that have led us to where we are today. I found his bizarre "how the hell could this happen?" story to be as fascinating in it's own way as that of Martin Frankel.
• Chaos is on Prozac. Not something I really relished doing, as he's just being a cat after all. Unfortunately, he's gotten into a very bad anxious cycle since major surgery in March. Hopefully we'll get him back to a normal routine and slowly wean him off it.
• Dr. Beth Hagenlocker at The Cat Practice is amazing!
• I've been slowly continuing my energy audit. The results are not particularly shocking. The refrigerator is using about 30% less electricity after a good coil cleaning and slight increase in temperature. The cable boxes continue to be a major culprit. Simplifying my desk around the new Mac should also help.
• Credit is still there if your credit is good, though they're obviously still fishing for people who will make a mistake and pay hundreds of dollars in interest on a "zero interest" deal. Apple's credit parter Barclays gave me double what I needed for my Mac purchase. They're certainly betting I'll miss a minimum payment and not survive the "12 months interest free." I'll certainly schedule payments to make sure I do.
• This year's birthday trip was pretty light-weight. A few days with friends on the American River. A day in a raft, a couple of others in an inner tube. Just what I needed.
• Looking forward to the Bay Area, Utah and maybe Denver in September. New York in August. Haven't been away for a while.

mg

Being Rational

I'm currently taking a software project management class online at UCLA extension. I need the continuing education credits to keep my Project Management Professional certification current, and I can sometimes even learn something.

I was somewhat disheartened when the instructor started the class by asking us to read Kepner and Tregoe's almost out-of-print book The New Rational Manager. I say "almost" because while it's still available, you can only get it directly from the publisher, which also happens to be th consulting firm run by the authors. In today's world, if it's not available on/through Amazon, it's effectively out of print.

The reason for my disheartened feeling is that I had read an earlier version many years ago and did not find it all that useful. I am also quite biased against anybody who advocates "rationality" as a core belief in any business endeavor, given how disastrously other "rational" theories have worked out. My distaste is largely colored by what I view as one of the two great lies of economics, the Rational Actor Hypothesis (RAH), which presumes that we all live our lives purely rationally, making rational choices that carefully balance long term benefits and costs. On top of this, a whole science of Rational Action Theory has been built, and been used to justify the most absurd economic actions, essentially stating that if the action weren't rational, people wouldn't have done it. The blind spots in this theory are largely responsible for the bubbles and subsequent meltdowns of recent years.

Confidence Lost

So our friends in Europe have jumped in today to halt trading activities that are harming the Euro and their big financial institutions. They seem to think this will restore confidence. They should have learned from us, or from the many, many times in history that this has failed, as it did today.

In truth, there's not much wrong with what they did. It's how they did it and the selective nature of enforcement that is causing the problem. Last I checked, naked shorting was illegal in Europe as well as here. Enforcing that law is a good thing. But letting it go on unabated then selectively enforcing the law with regards to ten "blessed" financial institutions does not help "restore confidence." It sends the message that something is really, really wrong with those institutions, that in fact something is so wrong that it justifies sudden and selective enforcement of laws that were ignored until now.

And much the same is true of the restrictions on naked CDS trades. There's little if any justification for the existence of these conduits for expanding risk with no benefit to any actual holder of the underlying asset. But to suddenly and selectively prohibit a few CDS products from trading sends the message that there's something seriously wrong.

I hate to harp on Taleb the second time this week, but his Ten Principles for a Black-Swan-Robust Society, (reproduced as Postscript VIII in the second edition of The Black Swan) makes the point quite bluntly:

Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence."

...Governments cannot stop the rumors. Simply, we need to be in a position to shrug off the rumors, be robust to them.

Easier said than done.

Taleb should stay off TV (and we're all worse for it)

Taleb was on TV briefly yesterday. I actually turned up the volume on CNBC to hear what he had to say. I should not have bothered.

Not because Taleb doesn't have a lot to say, he most certainly does. Not even because his involvement with one Universa Investments, who may or may not have had something to do with last Thursday's momentary crash, prevents him from commenting on some things that might be interesting.

Taleb shouldn't go on TV because there's just no point. Taleb's ideas are as complex as the financial mess the world finds itself in right now. Inviting him in to discuss one point in time, or to try to draw simple cause-effect conclusions just doesn't make much use of him or provide any illumination for the viewers. It's most likely why he's spent a good chunk of time recently avoiding TV appearances altogether, he knows that the vast bulk of media consumers just don't want to hear that the problem is far more complex than any one individual can possibly understand or solve.

Taleb and others like him are where the solutions -- or at least the pieces of the solution -- lie. Whether it's the world of finance, healthcare, immigration or just about anything else that plagues us right now, the situation is complex and the solutions will be too. That just doesn't come across well in a media world that has conditioned us to believe that meaningful content can be shared in 140 characters or that every question has an answer in a 20-30 second sound bite.

Unfortunately, Television and most of our media falls for what Taleb calls "The Ludic Fallacy," which is the notion that everything has an anecdotal and easy to follow explanation. The TV medium as it has been constituted today is simply unsuited for doing much beyond "telling a story." When the story fails to follow a clear "plotline" with obvious cause-and-effect relationships, it fails and is forced to grasp for something else, as the interviewers on CNBC did.

When I present this problem to some people, the response is that the people with the good ideas will need to adjust. They'll need to figure out how to explain complex and multidimensional problems by splitting them into little 20 second bits. I take the opposite view. Our problems are going to continue to escalate until we are willing to recognize that there are no easy solutions and that sound bites won't save us. I suspect further crises will need to happen before we get to that point.

It's too bad, but until we are willing to dispense with the notion that there are always simple solutions, Taleb should stay off TV. Those of us who want good analysis of the realities of the world have to look elsewhere, which is too bad.

mg