Wednesday, October 31, 2012

Order minus Chaos = Passion

As I was listening to WDAV today, an airy figment of Telemann music traveled through the radio and struck my ears. As it happened, the music plucked upon my very soul and, there I was, unexpectedly in the middle of the day, transported for a few minutes, back into the 18th century.

Not literally, of course, but in my mind. My thoughts escaped this present world of work and woe, and took refuge in an age long gone, a era of reason and order, long before the rude disruptions of world wars, global warmings and worldwide economic warnings.

Although there has always been an element of disarray and chaos in human activity, our hindsight view of the 1700s encompasses a world where composers like Telemann or Bach or Handel or Antonio Vivaldi could be seated at a musical instrument and, through intense toil and otherworldly inspiration, impose cryptic inked symbols onto a paper manuscript and thereby draw some amazingly expressive order out of the vast cosmos, by constructing a great work of music.

My all-time favorite is Vivaldi's Four Seasons. Here's the winter movement of it:

Now, a few hours beyond that midday moment, the workday is over; the radio-induced flight of fancy has passed, and I sit at home sharing with you that time-travel moment--a sudden glimpse into 18th-century passion.

And I hope to remind us all that, out there in the midst of human noise and haste and confusion, someone somewhere has expressed passionate order by drawing it out of troublesome chaos. That happened three hundred years ago, and somewhere on earth, even now, some person or persons are deriving creative sense from the hopeless nonsense of our present world.

It's a little bit like touching that moment when Logos spoke electromagnetic light into existence from the dark void.

CR, with new novel, Smoke, in progress

Sunday, October 28, 2012

Just say no.

Is this what we want for the next generation of Americans?:

No. We do not encourage this endorsement, nor the amoral framework in which it is presented.

Vote for Mitt Romney on November 6.

Carey Rowland, author with new novel, Smoke, in progress

Sunday, October 21, 2012

Dust of the ground, Elements of the earth

In his best-selling book, the Torah, which was later expanded to become the Bible, Moses wrote that God formed man from the dust of the ground.

In his best-selling book, the Origin of Species, which was later expanded to become a basis for evolutionary science, Darwin posited that man descended through natural selection from the elements of the earth.

What's the difference between these two traditions?

Mainly, the difference is that word "God."

Either way you look at it, mankind has a pretty muddy past, and probably a muddled future. However, if you accept the inclusion of "God" in your cosmology, your chances of getting cleaned up are probably better.

Glass half-Full

Friday, October 19, 2012


The air

thick with vapor and cool,

hangs its heavy curtain

of grey afternoon.

In the misty distance

a dog barks and

someone drops an iron something,

a tire iron or a tossed-down summer tool.

The sound of it

wrangles through dense mist,

strangely louder than was summer's lawny din.

Now its time again for refuge

from boney cold, to hearthy den

and bookish cerebral explorations

of the mind and soul, because

summer striving is spent.

The world gathers up its harvest

of gold and crimson profundity

in foggy shrouds of reflective glory.

Across the creek

a burly squirrel stirs

crisp oak leaves,

and the earth

nips off another season of gone green,

drops it down, brown upon the ground.

Next block over

a child yelps some cacophony

of late afternoon frivolity,

and mama calls.

I will go home now, for I remember this.

Glass Chimera

Saturday, October 13, 2012

Mr. Anderson's Idea

In the USA, our biggest hurdle that obstructs a path toward innovative prosperity is this: we don't manufacture nearly as many "things" as we once did. Everyone knows that in the globalized economy, any widget or value-added "thing" that can be made less expensively in a developing nation will be bought by distributors and sold on the world market before our American-made stuff is bought. This is because we yankees are comparatively rich and affluent and well-paid, and by the time our manufactured products roll off the end of the line, they are too costly to compete in world markets.

Beginning a hundred and fifty or so years ago, we were cranking up a highly energized production economy that was unprecedented in the history of the world. The British, who had actually invented the industrial revolution, were a few steps ahead of us. But they did not have the benefit of a vast, undeveloped continent, and so we passed them in volume and productivity.

So, for a solid hundred and twenty years or, we Americans were going like gangbusters supplying the world with fancy new mechanized goods. We were setting the standards and benchmarks for new industrial development on such a massive scale that we thought the rest of the world would never catch up.

Well guess what. The rest of the world has now caught up. And furthermore, their newfound economies of scale, and their lean and hungry looks, have enabled the developing nations to surpass us in efficiency and in sales.

Therefore the great American industrial machine is no longer cranking out goods, widgets and whoopfizz things to supply the whole world. The world is supplying itself according to the old dictates of supply, demand, and efficiency. And we are just one bully on that manufacturing hill instead of being, as we once were, the king of the hill.

So what do we do now?

Chris Anderson has spotlighted for us an innovative technological strategy by which we may find a new path of development. Furthermore, it is squarely in the tradition innovative entrepreneurship that made this country great. And he has written a book about it:

Because I have been wondering about this problem for a few years now, I was astounded this morning at the timely profundity of his first chapter. It just seems to me that he has hit on exactly what needs to happen next in our quest for a strategy to revitalize diminishing American manufacture capacities. So here are, without further ado, several quotes:

"America and most of the rest of the West is in the midst of a job crisis… …manufacturing, the big employer of the twentieth century(and the path to the middle class for entire generations), is no longer creating net new jobs in the West. Although factory output is still rising in such countries as the United States and Germany, factory jobs as a percentage of the overall workforce are at all-time lows. This is due partly to automation and partly to global competition driving out smaller factories."

But guess what. There is hope for "smaller factories," and small companies, because of the democratizing effects of the internet web. The developing internet infrastructure of our age is functionally the same as the railroads web that our great-great grandparents built from coast to coast. Their double-tracked steel web ultimately enabled our unprecedented, expansive prosperity, the end of which we now observe in languid perplexity.

My thought is that we've got to find a profitably productive way out of this deadend track, and it won't be accomplished in selling MBSs and CDOs and CDSs in HFT to each other while trying to buy the dips and sell the peaks. No, it ill not. And I think Chris Anderson, editor of Wired magazine is onto something, a light at the end of the tunnel, as it were, a beam of light shining through the dark clouds of post-industrial obsolescence and capitalist decadence.

Continuing quotes from Mr. Anderson's Makers: The New Industrial Revolution:

"Automation is here to stay--it's the only way large-scale manufacturing can work in rich countries…But what can change is the role of the smaller companies. Just as startups are the driver of innovation in the technology world, and the underground is the driver of new culture, so, too, can the energy and creativity of entrepreneurs and individual innovators reinvent manufacturing, and create jobs along the way."

Now just how, exactly, will this magic bullet of creative entrepreneuship be shot forth?

Are you skeptical of Mr. Anderson's fresh optimism? I was too, as I have generally been for a few years now, ever since about September of '08, until I started reading about his idea. And, as we say in the publishing business, you'll have to read the book to find out what it is! Ha

But hey, I'll give you a hint of what the new approach to design/manufacturing on a massive micro-scale is all about. It has to do with design, and 3-D printing, and the electronic transportability thereof.

3-D printing, at your fingertips, no less! You may laugh. I daresay there were a few laughing at the likes of Edison and Bell and Ford, back in, oh, 1880 or so. And there were a few, no doubt, who laughed at Jobs and Gates and Bezos long about 1980.

Nevertheless, all skeptics aside, there will be some among us who laugh all the way to the bank. Will you be one of them?

Glass half-Full

Saturday, October 6, 2012

Trying to understand complicated stuff

Give me a good, old fashioned rest period any day.

That is to say: a dot, at the end of a sentence, so my overworked brain can rest before going on.

Just give me, please, a momentary neuron break so my cognitive brain cells can catch up to what my eyes are gathering.

For I am a tired, weary reader, among the huddled, online masses yearning to be free from confusion.

I have noticed, you see, a certain confusing tendency these days among bloggers, authors, journalists, commenters and other keyboard-tapping idea-flingers. This lamentable tendency is a neglect of periods. People nowadays whack out lengthy run-on phrases and clauses, strung together without the little dots that give us pause. And yea, I say unto thee, sometimes they do it even without commas!

This trend confuses me when I am reading and trying to understand messages that people have posted on the ubiquitous little backlit screens that you see everywhere.

It especially baffles me when I'm reading comments that are whacked out by opinionated internet denizens as they respond to the polarizing rhetoric of other internet denizens about the controversial issues of our day like politics religion and how much money should be printed and whether parents should be given choice for their children's schools and how Congress should spend our tax money and whether Mitt's comment about the 47% was appropriate and how the President does or does not use a telemprompter and the price of labor in China and the price of tea in Berkeley and the the price of education in Chicago and Milton Friedman's influence and Paul Krugman's dogma and and so forth and so on.

Rampant ideas, I say. Ideas are running rampant, without punctuation to separate, sharpen, and clarify them.

Yesterday I was reading a book, an actual, long, chapter by chapter book, although not a printed one. It was my on my Kindle.

There I was reading Sheila Bair's excellent, very informative book, Bull by the Horns, when, in chapter 9, I came across this sentence:

"But probably the biggest problem related to a fairly technical provision of bankruptcy law that gave all of Lehman's derivative counterparties the right to cancel their contracts and liquidate any collateral Lehman had posted with them."

This problem that Ms. Bair is describing is a troublesome one with which our bankers and lawyers were dealing, back in the fall of 2008.

And it is complicated, but I do think it is important that we citizens of this free republic understand the problem.

So I decided to demonstrate, using that sentence as an example, how multi-layered explanations can be made simpler, and thus easier to understand. The first principle is: write shorter sentences.

See if my version isn't a little a little easier to comprehend:

But probably the biggest problem related to a fairly technical provision of bankruptcy law. That provision gave to all of Lehman's derivative counterparties the right to cancel their contracts, and to liquidate any collateral Lehman had posted with them.

Notice the period after the word law. This period helps me, the reader, for two reasons. One reason is that it gives my brain a little neuron break before engaging the next sentence, which is long, multi-layered, and laced with two-dollar words like derivative and counterparties. The second reason that the period helps me is: it clarifies the function of the verb related.

The inquisitive mind wants to know, you see, whether that word related will prove to be the predicate of the sentence, or if it is being set up as a participle in a subordinate clause to modify the noun problem. However, my re-written version simplifies the reader's dilemma by inserting a period, thus ending the sentence after the word law. This shortening effect enables the reader to solve his/her syntactical dilemma early on, instead of having the related question suspended all the way through such dense verbiage as derivatives, counter parties, contracts, collateral and so forth.

Another simplification I added to Ms. Bair's original text was an insertion of the preposition to, in front of the phrase all of Lehman's derivative counterparties. This identifies all (of Lehman's derivative counterparties) as an indirect object instead of a direct object in the sentence. The counterparties are receiving something, that something being the right to cancel their contracts. And that right is more easily understand now as the direct object (whatever is being received) in the sentence. Furthermore, a second right that the counterparties receive is the right of liquidation. So my version inserts the preposition to a second times, rendering to liquidate.

I am not criticizing Sheila Bair's writing style, nor her book, which I highly recommend. We citizens of a free, democratic republic should be informed about the problems that so easily inflict widespread financial cataclysm upon us. Ms. Bair's unique perspective as Director of Federal Deposit Insurance Corporation during the tumultuous years 2006-2011 is quite an eye-opener.

To further reinforce this last point, I leave you with this passage from Bull by the Horns, from the first page of Sheila's chapter 9, which she named Bailing out the Boneheads:

"Lehman's balance sheet was nontransparent to the market, primarily because of accounting rules that allowed Lehman to hold complex mortgage-related investments at valuations that bore no reality to their true worth."

And therein lies the real problem of trying to understand complicated stuff.

Glass half-Full

Wednesday, October 3, 2012

Toxic ARMs in 2007

Sheila Bair served as Director of Federal Deposit Insurance Corporation (FDIC) during the financially tumultuous years 2006 through 2011. She has written a book about her experience during that time of cataclysmic economic events. In Bull By The Horns, the former FDIC director gives an account of her strategy to assemble a group of financial heavy-hitters who had generated, securitized, and traded billions of dollars of low-quality home mortgages that were, in 2006-7, beginning to default in large numbers. In 2007, Sheila rounded up some subprime mortgage brokers, their money-lenders who had financed the mortgages, and representatives of the larger banks who serviced the loans after those loans had been tranched into complex Wall Street securities.

The escalating problem in 2007 centered on a large group of unqualified home-buyers who had bought into Adjustable Rate Mortgages. These mortgages began with a reasonably low interest rate with manageable monthly payments that were typically in effect for two years. But after those first two years of each mortgage, the interest rate had been contracted to balloon into a higher rate, which would enable the financiers to maintain an even greater profitable advantage. But the po' folks who were trying to pay off their new houses could not handle their newly adjusted, higher monthly payments. This turned out to be the weakest link in a chain of financial dealings that later broke in September of 2008, thereby inflicting on our economy the so-called Great Recession.

This passage from chapter 6 of Sheila Bair's book is somewhat long for a blog, but it helped me to understand what was happening behind the scenes during that time of mounting catastrophe, back in 2007. Sheila Bair writes:

"I decided that the best thing to do would be to get all stakeholders in a room together and try to hash out some type of agreement to start modifying subprime hybrid ARMs. Delinquencies on subprime hybrid ARMs were increasing quickly, and nearly half a trillion dollars' worth of such loans were scheduled to reset (to the higher interest rate, ed.) in 2007 and 2008. The answer seemed obvious: eliminate the reset and simply extend the starter rate. In other words, convert the loan into a thirty-year fixed-rate mortgage, keeping the monthly payment the same as it had been during the starter period. We thought that investors--even Triple-A investors--should support such a step. We weren't really proposing that their payments be reduced, just that they give up a payment increase that they had never had a realistic expectation of receiving. As previously discussed, hybrid ARMs were designed to force refinancings after two to three years, not to be paid at the higher rate for the life of the loan. Our data confirmed that the debt-to-income ratios on these loans were extremely high. Indeed, more than 90 percent of hybrid ARMs were refinanced at the end of the starter period. The number of borrowers who continued paying after reset was miniscule. Without some relief, subprime borrowers would default on a large scale, generating heavy losses for all bondholders, as well as the broader housing market."

As you may surmise from the subsequent implosion of our financial system in the fall of 2008, Ms. Bair's strategy of getting the mortgage players together to solve their problems hardly made a dent in the immensely complicated vortex of failing subprime mortgages. This foundational shifting sand of widespread defaults ultimately initiated a near-collapse of our financial resources and the banks who administered those funds.

Ms. Bair's attempt to guide the lenders and securitizers into corrective collaboration was a nice try, though. Surely it was a valiant effort by an exemplary, far-sighted public servant who is worthy of our respect. In the long run, however, her finger in the dyke of preventive regulation could not prevent the flood of insolvency that later debilitated our banks.

Reading her book, and particularly the above account, I was reminded of an old parable spoken long ago. In the gospel of Mark, chapter 16, we find these words from Jesus Christ:

"There was a rich man who had a manager, and this manager was reported to him as squandering his possessions.

And he called him and said to him, 'What is this I hear about you? Give and accounting of your management, for you can no longer be manager.'

The manager said to himself, 'What shall I do, since my boss is taking the management away from me? I am not strong enough to dig; I am ashamed to beg. I know what I shall do, so that when I am removed from the management people will welcome me into their homes.'

And he summoned each one of his boss's debtors, and he began saying to the first, 'How much do you owe my boss?'

And he said, ' A hundred measures of oil.' And he said to him, 'Take your bill, and sit down quickly and write fifty.'

Then he said to another, 'And how much do you owe? And he said, 'A hundred measures of wheat.' He said to him, 'Take your bill and write eighty.'

And his boss praised the unrighteous manager because he acted shrewdly; for the sons of this age are more shrewd in relation to their own kind than the sons of light.

" And I say to you, make friends for yourselves by means of the wealth of unrighteousness, so that when it fails, they will receive you into the eternal dwellings.'"

Unfortunately, our modern money managers did not similarly cut the Mortgage Backed Securities losses before exponential toxicity invaded the entire financial system. But such calamity is the story of the human race. What else is new?

Glass Chimera