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20
Nov 22
Sun

Weekly Report: November 20, 2022

Observations

The 2022 World Cup kicked off today in controversy-ridden Qatar. The time zone is poor for where we are, with most matches occurring in the early morning.

I participate in two longstanding World Cup traditions. The first is a fantasy league which is running for the sixth time (which means the first was held 20 years ago when I was an undergrad!). Nothing is on the line except glory. We got a trophy made and every 4 years we engrave the winner’s name on it. I normally tend to fare pretty well but I’ve never won it and the victors always like to channel Ricky Bobby: “If you ain’t first, you’re last!”

The second is a 1 on 1 betting match where a friend and I bet on every single match against each other. After the group stage, we progressively increase the wager as it moves through the knockout stage, and add bonuses for penalty shootout outcomes. We alternate selecting the winner of each match, using Asian handicaps from this site to keep it fair. It’s all tracked in a Google Sheet and we added columns for gloating and sledging each other after each match. We sometimes do this for the Euro championships too, and the results are normally quite close… although I typically find myself on the negative side of the ledger. We now both live on opposite sides of the planet, so settling the debt sometimes takes time and creativity. (For 2018, my friend asked me to spend his winnings on Powerball tickets, which returned less than the cost of the tickets. I still owe him for my losses in the 2021 Euro Cup.)

On the home front, my family represents 3 different nationalities, each of which is participating this year: Australia, Denmark and the USA. For the second World Cup running, Australia, Denmark and France find themselves in the same group. Alas, Australia is not expected to survive the group stages.

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FTX’s one-of-a-kind balance sheet
FTX’s org chart
Source: Dealbook / Yahoo Finance

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13
Nov 22
Sun

Weekly Report: November 13, 2022

Observations

This week was one of those “weeks where decades happen”. It’s been endlessly fascinating and entertaining. Let’s get into it.

FTX!

You can read about what happened in all the articles linked below, but here are a few things that struck me about the situation.

FTX hit a $32 billion valuation within 3 years and dealt with tens of billions of dollars. It all vaporized in the space of a little more than 3 days. Typically when an organization gets to that scale, the founders bring on seasoned execs. That didn’t happen at FTX. (This is in part a failure of FTX’s investors, who felt so much FOMO that they were satisfied with whatever surface-level diligence they performed and willing to overlook the fact they had no board seats or other protective rights that VCs typically have.) Not only did it remain an underweight organization (apparently with only about 400 people, compared to Binance with almost 20x that), but if you look at the key players, including of their sister trading shop, Aladema Research, they are almost all inexperienced. Reports are that a bunch of them lived out of a shared $30+ million penthouse in the Bahamas and dated each other.

  • Caroline Ellison was the CEO of Alameda and, at 28 years old, mostly managed SBF’s money and reportedly dated him “at times”. She graduated from Stanford with a math degree in 2016 and had only one job prior to Alameda — 19 months at storied firm Jane Street as a quant trader. In a now infamous video, she mentions that “being comfortable with risk” in the job is “very important” and that they “tend not to have things like stop losses”. Risk management was clearly not her forte and she seemed to confuse being comfortable with risk with being reckless with risk.

  • Constance Wang was COO of FTX. She graduated from NUS in 2016 with 2:1 honors and took an entry-level job at Credit Suisse working as an analyst doing AML/KYC checks and risk controls. She was there for barely 2 years, jumped over to another crypto exchange (Huobi) for 8 months and then took the COO role at FTX. This site mentions that “Wang clearly wasn’t responsible for the misfortune that’s befallen FTX,” but she took the title and in any other firm managing that amount of money in a position with that title, you pretty much are responsible in some capacity.

  • Gary Wang (Zixiao Wang) co-founded FTX but appeared to avoid the limelight, unlike SBF. He attended MIT (like SBF) and apparently met SBF at a math camp in Canada.

  • Dan Friedberg was Chief Regulatory Officer at FTX. Apparently, Friedberg was embroiled in an online poker cheating scandal and cover up in the past — a period of time that reportedly appeared as a big gap in his now-deleted LinkedIn profile. Friedberg was either a partner or counsel at Fenwick & West running their blockchain practice from Seattle. He took the job after the poker scandal, so one wonders what kind of due diligence both Fenwick and FTX did on a pretty darn senior legal hire (and if they knew about it, why didn’t they care?). It appears that Friedberg joined as General Counsel but then transitioned over into the regulatory role after Can Sun joined.

  • Can Sun joined as General Counsel in mid-2021. He was a colleague of Friedberg in Seattle and co-chaired Fenwick’s blockchain practice with Friedberg. Sun certainly has pedigree (Yale Law, PhD from Princeton, a year at David Polk followed by almost 7 years at Fenwick as an associate), but no in-house experience prior to FTX. Sun abruptly resigned (as did most of his legal team, it was reported) a couple days after the news broke.

  • Sam Bankman-Fried is the son of two tenured Stanford Law professors — Professor Bankman (who teaches tax law at SLS) and Professor Fried (now emerita). According to his LinkedIn profile, he graduated in 2014 from MIT and was at Jane Street for a little over 3 years. He founded FTX after reportedly making a shit-ton exploiting the many crypto arbitrage opportunities that opened up around 2017 via Alameda Research. (Me and a couple friends got in on this action at the end of 2017, but our scale was many orders of magnitude smaller than what SBF achieved.)

  • I looked at Alameda Research’s site before it was taken down. It had the team’s photos on there and they all looked young.

From these profiles, you can see one main theme emerge: inexperience. There’s also nepotism, but that happens all the time in tech startups, and it’s not necessarily a bad thing as long as the person being hired is a good fit for the job.

Inexperience, though, is far more dangerous — particularly in a field where you’re dealing with other people’s money. This is people’s lives, we’re talking about. The fallout will be felt in the coming weeks and months, but some people have now lost a huge amount of their life’s savings, and suicide risk is real. There are also signs in the news that the reason for the gaping $8 billion hole in FTX’s finances extends beyond manifest incompetence to some sort of criminal malfeasance. At the least, the abuse of client funds in the manner reported in the media would likely be criminal in TradFi.

Which brings me to my thoughts on the crypto space as a whole. I believe there are two types of people: (1) principled “believers” who are genuinely invested in the technology and the promise of building something actually useful with it, and (2) people who see an opportunity to make money. There are a lot more of type 2 than type 1. And there are a lot of people who claim to be type 1 but are really type 2.

Crypto is a modern day gold rush — people see fortunes to be made and flock out to the wild west.

There’s nothing wrong with that, of course. But when you’re there to make money, it doesn’t matter whether it’s crypto or DeFi or TradFi… it’s just finance. The difference is that TradFi is build up on centuries of experience, and the regulatory framework is developed.

There’s a lot about crypto that’s new, but that’s often confused with what’s not, and the crypto world is “rediscovering” learnings that are already well-trodden in TradFi — such as basic risk management and the dangers of leverage. (This reminds me of a time back when Netflix was still mailing out DVDs, I saw a post online asking “Why isn’t there a startup where we can borrow books, like a Netflix for books?” only to receive a disgruntled reply, “Yeah, it’s called a library.”)

The wild west metaphor is apt because crypto is relatively unregulated. That is just fine for the many crypto enthusiasts with libertarian leanings, but in the real world that means people lose their figurative shirts as a result.

This is not to say that TradFi doesn’t have its Big Problems. The GFC in 2008 is clear evidence of that, and the fact that it led to bailouts was a travesty. But TradFi doesn’t see the speed and sheer frequency of damage that the crypto space has inflicted on consumers (and institutions). Pump and dump schemes, market manipulation, and fraud are commonplace. Literally billions of dollars have vanished this year alone due to hacks or coding flaws. Entire crypto exchanges fold. And it’s mostly unchecked — there are few consequences for perpetrators of some of these schemes, and it just attracts more scammers.

One blessing is that crypto is mostly separate from the mainstream economy, so we haven’t really seen much, if any, contagion. And that’s just the thing — it’s never going to be mainstream as long as it’s unregulated or weakly regulated. It’s never going to be a tool that a family uses (or should use) to buy a house, or keep their retirement savings in.

In the same way that communism sounds kind of OK in theory but is very different in practice due to human nature, I feel the same way about unregulated crypto.

There’s a common refrain used by crypto enthusiasts arising from the FTX disaster: “Not your keys, not your coins.” (This refers to how if you don’t have the private keys that signify ownership of cryptocurrency, you don’t actually own it at all. When you buy Bitcoin from an exchange like Coinbase, they are actually coins owned by the exchange (you hope), and they assign ownership of those coins to you on paper. But you have to withdraw the coins out to your own wallet if you actually want to ensure ownership. Better yet, keep them in cold storage.)

There’s a slight edge to that axiom: it’s your own damn fault if you decided to buy crypto through a centralized exchange — you assumed the risk. If you want to ensure that doesn’t happen to you, keep your coins under your own digital mattress. And that’s just it — it’s not practical. If I want to daytrade crypto, I can’t do that easily through my Ledger wallet. It’s just not convenient. I need an exchange. (I know there are decentralized exchanges, but they have their own issues and don’t solve the underlying problem of lack of regulation.)

So, until the various government agencies get with the program and start regulating things in a thoughtful manner, crypto is not going to replace TradFi in any meaningful capacity, and it’s just going to be a place where both really interesting innovation occurs, and where people get their faces ripped off by avarice.

A sidenote on NFTs: IP lawyers I’ve spoken to are confused why NFTs have any value, given there is a valid question about the worth of the intellectual property you actually own. Similar to how DeFi is still finance, NFTs to me are just luxury goods. Value is in the eye of the beholder, and luxury goods are the epitome of when intrinsic value diverges from perceived value. That’s all it is.

Birkin bag, or the Mona Lisa, is only valuable because enough people think it is. The materials for a Birkin do not cost $30,000 and the bags do not provide utility that is worth $30,000. But a knock-off Birkin is considerably cheaper than a genuine one. NFTs are exactly the same. They are intangible luxury goods. It doesn’t really matter that from a legal perspective, it’s questionable what, exactly, you own. It doesn’t matter that your picture of a bored ape can be copied with a couple clicks of a mouse (I mean, that kind of sums up the whole software industry). All that is irrelevant. NFTs have value because people believe they have value. And, like the tulip bulbs of the 17th century, if the fad passes, that value will evaporate. The question is: will the value endure?

The glory days of inefficient global crypto markets when we could make 23% on a single trade!

Twitter

Damn the torpedoes, full speed ahead!

I feel for what Twitter employees are going through at the moment. The two weeks after the acquisition have been a case of doing everything that good management practices say you shouldn’t do. It sounds like a terrible working environment.

Yet, there is a certain fascination about whether this might actually turn out ok — or even well — in the end. This whole thing is a bit of an experiment. This is a unique situation, and no one’s had the ability, gall or gumption to try what Musk is trying at this speed and scale.

There is a difference between taking a huge but calculated risk and being reckless (see Alameda Research, above), but for the Twitter x Musk combination, this may only become clear in hindsight.

Can you cut 50% of the workforce within 2 weeks, push out features without much apparent thought or planning, send everyone back to the office on no notice, do all the other stuff that’s happened there, and still manage to pull a company out of a spiral? I am not hopeful, but if this is even possible to pull off, I suppose it can only be someone like Musk. CEOs around the world are watching.

Elections. Well, my prediction last week was wrong. With the Dems holding the Senate, I’m pleasantly surprised at the outcome of the mid-term elections. And Trump has been even more unmoored lately and it looks like it’s turning people off.

Meta layoffs. 11K+ people were laid off at Meta this week. The company is still a cash cow, but I think Zuck’s “bet the company” approach on the Metaverse is doomed.

Inflation. On Thursday, the inflation number printed lower than expected. The stock market ripped up and the U.S. dollar fell. However, we’re far from out of the woods.

Lunar eclipse. In the early hours of Tuesday morning, the last full lunar eclipse in 3 years occurred. Unfortunately, it was raining and overcast where I am.

Powerball. A single person won the $2.04 billion Powerball jackpot on Wednesday.

  • The headline $2.04 billion jackpot is based on taking payouts over 30 years. Paid as a lump sum, the cash prize is $929.1 million, which is based on discounting future cash flows back to present values (you could invest the $929.1 million into treasuries yourself and end up with the same ~$2 billion). This calculation is sensitive to interest rates, which are higher than they’ve been for almost 15 years, allowing Powerball to advertise such a large headline figure.

  • The prize is taxable, but because the winning ticket was bought in California, no state taxes apply.

  • Yeah, we bought ourselves 5 tickets. Out of the 30 numbers that we got, only 1 matched a drawn number.
The Powerball jackpot was so big that the display at our local supermarket ran out of numbers

Articles

Pretty much just FTX and Twitter articles this week…

Charts, Images & Videos

Source: r/TrueReddit

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6
Nov 22
Sun

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Weekly Report: November 6, 2022

Observations

  • Halloween was on Monday. My wife and I didn’t grow up in America, so Halloween still feels foreign to us. We used to be able to ignore it. (We still could, I guess, but that would be mean to our kids.) It’s my least favorite holiday. For one, it normally falls on a weekday, so it’s not even really a holiday. It’s work and effort.
  • We went trick-or-treating in the Allied Arts neighborhood of Menlo Park, near where we used to live. It has a good density of houses and throngs of trick-or-treaters which makes for a good atmosphere. It’s also an expensive area so the variety of quality giveaways is typically pretty good. The kids had fun, at least.
  • Because we were out of the house, we left out a full bowl of candy, which was a mistake. Our security camera showed a group of 5 tweens rocking up early in the evening and emptying the whole thing. At least they didn’t take the bowl, which apparently was a problem for some people in our neighborhood.
  • Election Day is on Tuesday. I think the Republicans will easily retake the House and Senate, and then we have 2 years of a Congress where even less gets done.
  • Lots of painful layoffs at tech companies this week. Musk fired half of Twitter on Friday. I actually think Twitter will be fine despite suddenly feeling short-handed. If that turns out to be the case, that suggests that previous management left a lot to be desired. But you still have to feel for the people who find themselves heading into the holiday season unemployed.
  • The Fed raised interest rates by another 75bps this week, as did the Bank of England. The RBA only raised rates by 25bps, which I think is just crazy. I reckon the Fed will raise by another 50bps in December. Some of our savings now earn more interest than we pay on our mortgage.
  • Daylight Saving Time ends this Sunday morning. I actually like waking up in near darkness because it makes me feel like I’m waking up earlier than I actually am. (I like the idea of rising early. My body hates the practical reality of it.) Nonetheless, America might be transitioning to permanent daylight savings time at some point, which essentially means that California will become a UTC -7 time zone. The Senate passed a bill in March — the Sunshine Protection Act — that would achieve that… but the House has yet to vote on it.
In case there’s any doubt that women do the lion’s share of caring for kids, this is the sign up list for an event at our pre-school (one parent from each family was requested). Most, if not all, of these are working mums.

Articles

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Amazing what a consumer drone can do in air that thin

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30
Oct 22
Sun

Weekly Report: October 30, 2022

Observations

  • It’s school enrollment season and we have been busy deciphering the California school system. Here’s how we understand how it works (an understanding that may be faulty). You live in a school district that covers a certain geographic zone. The district is divided into neighborhoods. Each neighborhood has a public elementary school that gives enrollment priority to kids living in that neighborhood. While you can still apply to a neighborhood school outside of your neighborhood via what’s called a “School of Choice” application, it will be on a “space available” basis. Additionally, some schools in the district are not designated to a specific neighborhood and can be applied to with a School of Choice application. Selections are done by lottery. There are also private schools that can be applied to, but they are expensive and may impact priority if you later decide to transfer your child to a public school in the future (e.g. a quasi-selective public school).
  • Public schools are funded in large part by property taxes. Each year, property owners pay a little more than 1% of their assessed property value to the county, and this is used to fund various things. Through a quirk of the system, the assessed property value is basically tied to when the property was last sold, and modestly increased each year. This means that some people who have been living in their house for decades are paying property tax based on an assessed value that is significantly below market.
  • This also means that property prices are driven tremendously by what school district and neighborhood a house is in.
  • The system in Australia is different, and the boundaries are not so rigid. It’s not unusual to start applying to schools for kids when they are born. I recall my parents trying to get me into Year 3 of a particular school. My dad happened to know the brother-in-law of the state premier at the time (he was a patient), and somehow obtained a letter of recommendation from the premier that got sent to the school. Whether it was the letter or the results of my aptitude test, I don’t know, but I got in. Like my dad, I am a first-generation migrant, but unlike him, I have no such connections here. We’re anxious.
  • The IRS is increasing the 401(k) contribution limit to $22,500 for 2023 (from $20,500 this year).

Articles

Books

  • Smart Brevity (Jim VandeHei, Mike Allen, Roy Schwartz)
    “Smart brevity” is what the folks at news company Axios call their writing style. Known for its newsletters, Axios reports news concisely through a series of “axiomatic” headings and bullet points. The style has its many haters— typically journalists who lament the inevitable loss of nuance and thoughtfulness when you attempt to distill everything down to its essence — but I find the writing style pretty compelling for specific use cases. Long form writing still has its place (and the authors point that out), but I think this style of writing can be very effective in the business world where people’s attention and bandwidth are limited, and chat has displaced email as the favored medium of communicating. The book itself is, true to its name, quick and easy to read — about the only type of book I can read these days with young kids. The hard work is in practicing and eventually internalizing the writing style (“I didn’t have time to write a short letter, so I wrote a long one instead.”). Recommended.

Movies & TV

  • House of the Dragon (Season 1)
    Wasn’t expecting it to be groundbreaking like its predecessor, and it’s not, but it has been good enough to earn a spot in our weekly routine. Season 1 is dialog-heavy with mostly single-threaded stories that would fill the royalty pages of a medieval tabloid. Strong end to the season, and a long wait for Season 2 in 2024.
  • Star Trek: Lower Decks (Season 3)
    Another entertaining season!

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23
Oct 22
Sun

Weekly Report: October 23, 2022

Observations

Childcare is eye-wateringly expensive in the Bay Area. We pay our pre-school almost $5,000 a month to take care of our kids during the day. Sadly, that is not unusual here. And while we really like our pre-school, it’s not exactly a celebrity pre-school where kids get visits from former first ladies.

This level of expense means that, apart from a decent amount of ethnic diversity at our pre-school, the families with kids there are otherwise remarkably (but perhaps unsurprisingly) homogeneous: two parents in their mid-30s to early-40s who are both working professionals in good jobs with one, two, or maybe three children. A good deal of them, like us, grew up overseas.* The street turns into a parking lot for Teslas during drop off and pick up times.

We’re now going through a phase of life where we’re attending 4th and 5th birthday parties almost every weekend. This is a new experience for us. I quickly realized that these parties are always well-attended. It’s not because 4 and 5 year olds are inseparable best friends that are good at showing up for each other, but because it’s an easy way for parents to keep their kids occupied for a couple of hours while someone else has figured out how to feed and entertain them. The price of admission is a gift that you have probably regifted from someone who attended your own child’s birthday and regifted something that had already been regifted to theirs. There are only so many good gift ideas.

It’s difficult to avoid the temptation of comparing birthday parties. Each party is a public display of time, money, and by extension in an observing parent’s irrational and paranoid mind, love.

Every weekend, my mind spirals into the same pattern as I walk by yet another party with a bouncing castle: Am I doing enough for my child? Do I not love my child enough? Is my child going to think they aren’t loved because they didn’t have a bouncing castle? Why aren’t we ever invited to the parties with the bouncing castles? Or the Oscar-style party favor bags? Or the tonnage of balloon decorations that I’m sure are the cause for the nation’s helium shortage? And so on and so on.

I also find these parties awkward. Some families invite the whole class and maybe we know a handful of the parents there. Ten years ago, given the homogenous bunch we are, we probably would have got along just fine had we met at some random party. But it’s next to impossible to have a conversation of substance with the constant interruptions of a pre-schooler and their toddler sibling.

Also, my parental mind suspects that everyone is judging everyone else at these events. This part is not paranoia.

To wit, last weekend’s party. It was at a park that we had never been to before. New is good, as far as our kids are concerned, and they immediately raced off to find the nearest muddy puddle to jump into. The party was well-attended, very nicely done, and Formula 1-themed with liberal, unlicensed use of Ferrari insignia sprawled across six tables. It was immediately clear to us that these parents loved their child more than we loved ours.

Nonetheless, not all parents were so easily impressed. Shortly after we arrived we witnessed an exchange between one guest’s father and the birthday boy’s mother.

Guest’s Father: “Do you have a vegetarian table?”

There is a moment of silence while the birthday boy’s mother — a Persian woman who does not appear to be someone who is normally lost for words — is seen visibly struggling with how to respond.

“… no.” she finally says.

The guest’s father makes an equally visible annoyed face back.

The mother regains her footing and shoots back with thinly masked disdain: “Sorry I, um, forgot that children could be vegetarian.”*

Later in the party, the same father decides to share his perspective about an activity table where the kids are busy submerging a fleet of knockoff matchbox cars in a rainbow of glitter glue.

The vegetarian father, making a show of examining his frizzy wool sweater with disgust, sidles up to another person, who happens to be the birthday boy’s father.

“Glitter glue is the worst! You never, ever, ever give kids glitter! I’m going to leave here with glitter on me!”

The birthday boy’s father is unapologetic. “Well it doesn’t help you’re wearing a glitter magnet.”

As the party begins to wrap up, party favor bags are distributed. In the bag is a whistle. Seconds later, every kid discovers the joy of their Favorite New Toy. And also in that moment, everyone is judging the birthday boy’s parents.

When we leave, we pass by another party that has been setting set up for the past three hours and whose costumed guests are finally starting to arrive. It is a 3 year old’s birthday and it features freshly grilled food, drinks in four huge Yeti coolers, and the nation’s missing helium supply.

I pull my daughter back as she attempts to crash the party.

“Why can’t we go to that one daddy?”

* I literally only just realized why the word “abroad” is used more frequently in the U.S. to describe foreign lands than the word “overseas”, which is far more common in Australia. It is probably because, in Australia, every foreign country is across a sea.

** L’esprit de l’escalier: “Yes, but your kid is the only one who’s vegetarian so he’s going to be sitting all by himself.”

Further Observations

  • Series I Bonds purchased by October 31, 2022 will yield 9.62% for the next 6 months. This yield is expected to drop to ~6% in November. There’s been a lot made online about purchasing I bonds before November to lock in the 9.62% rate, but given annual purchase limits, there’s something to be said about waiting. This is because the interest rate on I bonds is composed of a fixed rate and a variable inflation rate. While the fixed rate has been 0% for the last 3 years and <1% for the last 15 years, interest rates have risen sharply over the last 6 months and any fixed rate above 0% is good for the 30 year life of the bond – which may result in a better return over time versus buying a bond today with a 0% fixed rate component.
  • As the CCP Congress closes, China enters a new, troubling era. Several friends, some of whom have spent many years of their lives and careers working in or with China, now express a reluctance to even physically set foot in the country. Whereas the China my generation knew while growing up seemed full of promise and reform, the China my kids will grow up knowing will be darker.

Articles

Movies & TV

  • Thor: Love & Thunder (Disney+)
    Reasonably amusing, but not particularly memorable. Actually fell asleep during the final fight scene (#parentlife). 3/5.

Charts, Images & Videos

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16
Oct 22
Sun

Weekly Report: October 16, 2022

Observations

When I was in my mid-20s, an older cousin of mine decided he had to own an expensive sports car at least once in his life. When his shiny new Mercedes SLK AMG convertible arrived, I eagerly accepted his invitation to take a ride with him. It was a thrilling experience. The monthly lease payments on the thing were more than my salary at the time, and there were two things I remember most about that experience. The first was the seats, which were lowset and snug. As the engine revved to life, the seat belts automatically tightened — a wholly unexpected, but gentle and comforting embrace that signaled: this was something special. The second was that, as we pulled up to our first traffic light with the top down, it started to rain. Then the lights turned green. The hard-top roof only took about 15 seconds to close, but as we sat there immobile, waiting for salvation, we could only pretend not to notice everyone around smirking at us with a mix of withering ridicule and annoyance.

I was recently reminded of that experience in a surprising way. My one year old loves to give hugs, but only to his mother. He gives me no such affection. Occasionally, I need to take him from his mother’s arms. Upon seeing me approach with outstretched hands, he will yelp and bury himself into her, arms wrapped tightly around her shoulders. Susanne describes the experience as “heavenly”. My experience is different. Once the limpet is pried away from his lifegiver, I am instead left with a screaming, writhing infant who is doing his best to kick me.

So I was surprised earlier this week when I was out walking with him in the neighborhood (or rather carrying him, since it is impossible to get anywhere when every rock, flower and poisonous berry by the sidewalk warrants an inspection). Normally outward facing, he suddenly turned around, buried his face in my shoulder, and squeezed tight.

It didn’t take me long to realize that this was because we were approaching a house with a lawn full of particularly creepy animatronic halloween decorations, and he did not like it. As we passed a zombie struggling to take a stake out of its chest, he squeezed even tighter in silent terror.

For him, it was a death grip. But for me it was, as advertised, heavenly.

Taking advantage of the situation, I walked back and forth between the zombie and a skeleton, with Alex’s hug tightening in inverse proportion to our distance from the undead.

After I had my fill of manufactured affection at the expense of my child’s mental health, we continued our walk. A few feet later, I passed a skeletal jack-in-the-box, which suddenly leapt 8 feet into the air and towered over the sidewalk. I screamed like a baby. Alex giggled, and I could only pretend to laugh in response to the smirks of passers-by.

Further Observations

  • A friend I was texting with believes the Ukraine war will drag on for a long, long time. His reasoning was that it’s the scenario that’s most in the United States’ interest: while it continues, it saps Russia economically and militarily, weakens Europe relative to the U.S., and strengthens NATO (of which the U.S. is the most influential member)… and all at the relatively low cost of shipping materiel to Ukraine. As long as tactical nukes don’t make an appearance, I can’t say I disagree with him. Just because it’s a cynical take doesn’t mean it’s wrong.
  • Voting by mail is so convenient. My vote-by-mail pack came in this week, and I already mailed it in. No need to line up at a polling booth on a Tuesday!
  • The inflation numbers came out on Thursday and they are still high (8.2% y/y versus 8.3% y/y for last month).
  • Kwasi Kwarteng was fired as the UK’s Chancellor of the Exchequer after 39 days on the job. That is only the second shortest tenure for that position in modern UK history. The dubious honor of the shortest tenure belongs to Iain Macleod, who died in office only after 31 days.

Articles

Books

  • Home Game: An Accidental Guide to Fatherhood (Michael Lewis)
    A laugh-out-loud funny, all-too-true compilation of personal anecdotes on fatherhood by my favorite non-fiction author that makes me feel just a little better about my own questionable parenting skills.

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9
Oct 22
Sun

Weekly Report: October 9, 2022

Observations

  • Interest rates are up, so bank savings account interest rates are up as well. Given how long ZIRP has been in place, this feels unusual, but back in my uni days, I had my savings in an ING Direct online savings account that was paying 7% interest. That seemed normal at the time. I didn’t understand how interest rates worked, so I thought it was just the “normal” rate of interest for an online bank.
  • I don’t know why it took me so long, but I discovered this week that you can buy treasury bills, notes, and bonds directly from the U.S. Treasury as a consumer. These are all debt instruments of varying maturity periods backed by the “full faith and credit” of the U.S. government. Here’s the significance: First, these instruments currently offer better rates than any bank account or certificate of deposit (CD). At Ally Bank, a 12 month CD currently pays 3.1% APR. A 52-week T-Bill currently pays at 4.134%. Second, interest from these instruments is exempt from state and local taxes. Third, they’re very easy to buy – you open a Treasury Direct account, link your bank account, and Treasury will automatically debit your account upon purchase, and credit your account upon maturity. The main downside is that it’s not easy to get rid of treasury instruments if you don’t want to hold them to maturity. You can sell them after a 45-day minimum holding period, but you need to transfer them to another institution first. Here’s more information.
  • If you’ve bought Series I Bonds (now in vogue given the current 9.62% rates), you will already have a Treasury Direct account. We hold some of our emergency cash in I Bonds.
  • My youngest learned how to say his own name this week!

Articles

Charts, Images & Videos

Spotted near home: “XRP” and “F*** the SEC”
Filming aerial scenes for the $1.5B grossing Top Gun: Maverick

On Twitter

Warning: Lots of loud swearing👇

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2
Oct 22
Sun

Weekly Report: October 2, 2022

Observations

  • I received my “Official Voter Information Guide” this week for the November 8 midterm elections. It’ll be the first general election I’m eligible to vote in. The guide is 127 pages, with information about 7 propositions for new California laws (including the text of those laws, legislative analysis, and arguments and rebuttals from each side), candidate statements for state and federal office, information about various California Supreme Court and Courts of Appeal justices to be confirmed, and information on how to vote. That’s a lot of information to process if you want to make an informed decision about everything that’s up for a vote, but it’s great that it’s there.

Articles

Charts, Images & Videos

Eurozone inflation

On Twitter

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25
Sep 22
Sun

Weekly Report: September 25, 2022

Observations

  • The Fed raised rates by 0.75% to an upper bound of 3.25% this week. The market expects further raises to 4.25% or 4.50% by the end of this year, and the market reacted accordingly. The U.S. dollar continues its inexorable run upwards against every other major world currency. The yen hit a 24 year low (146 JPY to the dollar), prompting the Bank of Japan to intervene and prop up their currency for the first time in as many years. The pound hit a 37 year low (falling to $1.084), and the euro a 20 year low (falling to $0.9689). The Australian dollar “only” hit a 2 year low (at $0.651), having sharply plummeted to under $0.57 during the early days of the pandemic. Interest rate differentials will encourage further USD inflows, which will continue until U.S. interest rates pull back, and a recession bites. (If the recession is global, which I think is likely, the USD may continue rallying for a while due to flight from risk.) If the past is any indication, the time the Fed starts cutting rates will roughly coincide with the start of a crash and subsequent recession. Susanne and I have been slowly buying Australian dollars and Danish kroner (which is pegged to the euro) on the bet that these historically low rates won’t be a high watermark, and things will recover in a few years.
  • A second company fell prey to a high profile hack in as many weeks: Take Two (which actually got hacked twice). While details about the Take Two hacks are sparse, I’d wager that, like the Uber incident, it all started with a social engineering attack.
  • Susanne is already regretting telling me about this, but KOKS, a Michelin-starred restaurant in the picturesque Faroe Islands, is temporarily moving to the small village of Ilimanaq, Greenland next summer. If you want to dine inside the Arctic Circle, you have to buy a package deal, which comes with a boat transfer through a fjord from nearby Ilulissat, and a hotel night (KOKS will also feed you breakfast). It sounds incredible, but the logistics of pulling off a trip there are imposing.

Articles

Charts, Images & Videos

Data: YCharts, Chart: Simran Parwani/Axios

On Twitter

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18
Sep 22
Sun

Weekly Report: September 19, 2022

Observations

  • Inflation numbers remained high this month. The market expects the Fed to continue hiking interest rates at a good pace and reacted accordingly. Mortgage rates rose above 6% for the first time since 2008. I think the pain of a sharp recession is still to come as the much of the world has become used to record low interest rates for most of the last decade. Higher rates have a knock on effect that will catalyze a downturn, causing a stronger USD, higher debt servicing burdens, decreasing demand, drying liquidity, and slowing the economy. Unfortunately, the worst is yet to come.
  • Adobe agreed to acquire Figma for $20B in cash and stock which, at signing, is the largest private tech acquisition in history. (In 2014, Whatsapp agreed to be sold for $16B, which rose to $22B at closing as Facebook stock rose.) Adobe shareholders and Figma users didn’t love the news, but early Figma shareholders did.
  • Andor, the latest Star Wars series, is out on Disney+ next Wednesday and the reviews are apparently excellent.

Articles

Movies & TV

  • Star Trek: Lower Decks (Season 3)
    Started watching this season. The series is a lot of fun. And somehow, they still keep it canon!

Restaurants

  • Bluestone Lane Cafe (Los Altos)
    Billed as an Australian-style cafe, we go there occasionally for a weekend brunch. The food is a facsimile of a Sydney breakfast, but I’ll take what I can get. (They sell fairy bread there but use sprinkles instead of 100s and 1000s. Heresy!) Bonus: two free Tesla charging stations. 3/5.

Charts & Images

Our 4th blackout this year that has lasted more than 30 minutes. This time happened just as we were about to bathe the kids. No power means no hot water.
Mortgage rates. Source: New York Times

On Twitter

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11
Sep 22
Sun

Weekly Report: September 11, 2022

Observations

  • A heatwave lasting half the week in the Bay Area saw temperatures hit an all-time high of 47ºC. For us, temperatures exceeded 40ºC on 3 days this week, which makes working from home challenging in the afternoon as we don’t have air conditioning (typical for homes here). The southwestern U.S. is currently in a drought that is the worst on record (and the records — tree rings —go back 1,200 years).
  • Queen Elizabeth II died on Thursday. She led an incredible, unique life and felt particularly well respected and admired, despite having to carry all of the colonial baggage that the British monarchy brings. In the words of former President Trump, “There was nobody like her!” King Charles III now takes her place.
  • I was barely old enough to vote “yes” when Australia held a referendum about whether to become a republic at the turn of the millennium. The “no” votes prevailed, but the margin was only 55/45. I suspect that the next time they hold such a referendum, it will be within my lifetime and the answer will be different.
  • Sunday marks the 21st anniversary of 9/11. I’d say that every 20-30 years a generational event comes along and changes the world. The pandemic, of course, is the most recent one. 9/11 was the first in my living memory and I’m sure at some point my kids will ask me, “What were you doing when you found out about 9/11?” The answer is that I woke up to the news that morning. I think someone had texted me to turn on the TV, and when I did, I saw the shocking images of the towers burning. I was in Sydney, so it had all happened while I was asleep. After being glued to the TV for as long as I could, I left for work. I was a web developer doing an industry placement at EDS at the time, working on the Commonwealth Bank’s website. I grabbed an old walkman, popped on earphones, tuned into a news radio station, and hopped on the bus, and then the train. It was a pretty sombre, quiet commute, and you could tell the news was hanging in the air with everyone.

Articles

Movies & TV

  • House of the Dragon (Season 1)
    My wife and I started dating at about the same time as Game of Thrones premiered, and it became a weekly ritual for us (together with eating take out from Su Hong, now called Chef Kwan’s in Menlo Park). Despite GoT’s series-destroying final season, we decided to work House of the Dragon into our weekly routine for old times’ sake. We’ve seen the first 3 episodes, and the jury is still out on whether it’ll stay in our weekly routine.

Hotels

  • Courtyard by Marriott Redwood City (Redwood City, CA)
    I had an unused free hotel night that was going to expire next month, so I decided to work out of a hotel room on one of the days where it got really hot. I was just there for the air conditioning so I didn’t stay for the night, but it’s a basic, no-frills hotel in the middle of nowhere.

Charts & Images

On Twitter

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28
Jan 22
Fri

Hear Ye! turns 24

At this point I only run this blog to make this annual post.

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9
Jan 22
Sun

Cities over the last 365 days (2021)

Last year’s famous last words: “COVID. 2021 should be better!” I guess it was a better year for travel… but not by much!

Copenhagen, Denmark *
Blåvand, Denmark
Velje, Denmark †
Billund, Denmark †
Marielyst, Denmark
Carmel-by-the-Sea, CA

All places had overnight visits, unless marked with †.

* Multiple entries, non-consecutive days.
† Daytrip only.
‡ New country or territory.

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28
Jan 21
Thu

Hear Ye! is 23

I have gradually come to terms with the limitations of my time these days, and my rather modest goal for this year to write at least one substantial post on this site.

One day I will get back to a more regular cadence of posting!

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11
Jan 21
Mon

Cities over the last 365 days (2020)

2020 travel in a word: COVID. 2021 should be better!

Los Angeles, CA

All places had overnight visits, unless marked with †.

* Multiple entries, non-consecutive days.
† Daytrip only.
‡ New country or territory.

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28
Jan 20
Tue

Hear Ye! turns Twenty-Two

Yep. This site is squarely Gen Z.

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12
Jan 20
Sun

Cities over the last 365 days (2019)

Here’s the 2019 edition of this list. Got in 67k miles of flying – a recovery from 2018, but still a far cry from pre-fatherhood. Most interesting part was getting to visit 5 new countries! Not much planned for 2020, but we’ll see.

Singapore *
Bali, Indonesia ‡
Doha, Qatar
Copenhagen, Denmark *
London, UK
Helsinki, Finland ‡
Tallinn, Estonia † ‡
Taipei, Taiwan ‡
Kaoshiung, Taiwan
San Diego, CA
Sydney, Australia
Palm Springs, CA
Kyiv, Ukraine ‡

All places had overnight visits, unless marked with †.

* Multiple entries, non-consecutive days.
† Daytrip only.
‡ New country or territory.

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31
Dec 19
Tue

Year in Review 2019

It’s the last year of the decade! Happy New Year! In a few moments, we leave the 2010s and enter the 20s. And so I’m taking a few moments for a bit of introspection about the year just past and prognostication about the year to come.

But first, what happened over the last decade, in a paragraph? Most of my 30s has been spent in this decade. In the first half, I spent a lot of time doing two things: working and traveling. The happy confluence of discovering travel hacking and being of the age where friends were getting married meant I got to attend weddings in 10 countries! The second half of the decade was far more personally eventful: some big life milestones (mortgagee, started a family), 3 startups (sold one, left one, still working on one), did some legal consulting with a bunch of clients, and ended up going full time employed with one. The second half was also significantly more stressful.

2019

Travels. We took a trip in February to catch up with our extended family in Singapore and Copenhagen, with a side trip to Bali where we stayed at the amazing Amankila. While in Copenhagen, I also managed to squeeze a quick side trip to London, Helsinki and Tallinn. Domestically, we spent a weekend in San Diego for Susanne’s birthday, and some time in Palm Springs with Susanne’s parents for a break. Later in the year, we all went back to Copenhagen for Susanne’s dad’s 70th birthday. Work trips were unusually varied. A crazy deal took Susanne to Montreal twice, and Stuart went to Taipei, Kaoshiung, Sydney and Kyiv.

Work. Susanne had her highest billing month this year. I started a new job at Pango, which is a small company headquartered in Redwood City that sells products to protect consumer privacy and security, including a VPN product that has hundreds of millions of users. I continue to help out with Aerofiler, and the company landed its first 10 customers this year. We exhibited at CLOC Sydney and the Sydney-based team visited Silicon Valley as a part of UNSW’s 10x program.

2020

Politics. Some predictions:

  • Brexit: It’s coming January 31, 2020, this time for sure. Boris has a mandate (strong conviction).
  • Impeachment: Trump will be acquitted by the Senate (absolute conviction).
  • Democratic Presidential Candidate: Biden, probably (weak conviction).
  • US Presidential Election: Trump gets re-elected (medium conviction).

The Economy. The low interest rate environment continues along with asset price inflation. Global debt continues to build, growing a massive powder keg that is in search of a spark. A spark could come in the form of increased interests rates, but central banks have little appetite to be hawkish. Wealth inequality will keep CPI low (all the inflation is in boomer assets and bananas duct-taped to walls, not wage growth for the blue collar worker, despite generationally-low employment rates). All this suggests that low interest rates are here to stay for a long time yet. Trump will try to juice the economy as much as he can to keep it going through to the election. There’s always the chance of a blow up somewhere in the world catalyzing a global crash, but it’s hard to see what that will be at this time (but I guess it always is).

Inequality. The growing wealth inequality continues, and I don’t see any way the trend reverses, short of social unrest and dramatical changes in the political landscape. One pedestrian example of how the gap between the haves and have nots increases: We were doing the maths on owning versus renting a house here, and if you consider the costs of home ownership (mortgage interest, homeowner’s insurance, and property tax), due to the tax deductibility of mortgage interest, we’re only paying slightly more for our house than the 2-bed 1-bath apartment we were renting a few years ago (and rents have since gone up). Additionally, mortgage principal repayments are a form of forced saving, and exposure to capital appreciation has been good in the current economic climate.

Real Estate. I’m expecting the Bay Area market to continue treading water. After 2019’s spate of IPOs, property prices haven’t really moved. The media has reported a bunch of IPOs bombing, but it’s all relative. A bunch of people still made millions – just not as many millions. Except for the poor sods at WeWork not named Adam Neumann. As to which, see the inequality point above.

In the meantime, Denmark’s residential mortgage rates (as low as -0.5%) tempted me to take a look into the Copenhagen market. It turns out that Denmark is pretty xenophobic and that it’s pretty tough to own property unless you know how to properly pronounce the word “hvad”. Luckily, I have access to such an individual, but she thinks that everything is too expensive. I reminded her that I thought property in Menlo Park was too expensive for the last 7 years and look where my prognosticating got us. Not in Menlo Park.

Tech. The IPO I’m most anticipating in 2020 is Airbnb. Assuming their financials hold up (they spent a lot of money on marketing in their last leaked financials), I don’t think the WeWork debacle and Uber disappointment will act as a drag. They’re meant to be profitable or at least profit-able (excluding stock-based comp, which is somewhat misleading but par for the course for private companies around here).

Privacy. Will continue to get a lot of scrutiny and Facebook will continue to be a punching bag. Their reputation when it comes to privacy has been in the muck for some time now. But as always, people will complain, and then keep using it. I think that’s going to be true with any service that has a lot of utility – privacy is a theoretical issue, but your ability to see photos of your friends in exotic locations, the latest Trump tweet, or memes provide an immediate shot of dopamine (or maybe just a dose of FOMO) that just steamrolls it. Indeed, Facebook’s stock is at a high, so they’re continuing to make more money in spite of all that has happened. The only way that changes is that the government breaks it up.

On the privacy regulation front, I’ve been a bit skeptical ever since Ashley Madison happened. The absolute nuclear event for a privacy lawyer is a security breach where all your customer data is exposed to the public. Ashley Madison is a site for people who want to have affairs. They experienced that nuclear event in 2015. Real names, home addresses, search history, and credit card information were all exposed. 60 gigabytes of it (granted, most of it was fake accounts). All of it obviously extremely sensitive. People reportedly committed suicide over the leak. This should have shut them down for good, but the site settled its lawsuits is still alive today. I don’t think that the privacy laws that have been passed in Europe and California since would have changed this much.

We have Alexa, Siri, Google, and Cortana in our homes – always listening. We use devices (mobile phones, cars) that let people we don’t know, know where we are 24/7. No one really seems to care. I mean, truly care. Of course, everyone talks about it, but no one really does much about it.

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8
Jun 19
Sat

Weekly Wrapup – Issue #5


Notes

Tech. WWDC was this week. My takeaways: (1) Apple announced iPadOS, which is essentially a fork of iOS. They’re going the opposite of the way that Windows went, which was to have one unified OS that runs on all device types. (2) The following are getting updates, as usual (noting items that caught my attention): tvOS (new undersea screensavers), watchOS 6, iOS 13 (grant one-time location permissions, Notes app updates, Sign in with Apple, multi-AirPod music sharing), macOS Catalina (iTunes is being replaced by Music, Podcasts, and TV apps, use an iPad as a secondary display or drawing tablet, new Find My app, screen time for desktop). (3) There’s a new Mac Pro and accompanying Pro Display XDR monitor. Seemingly targeted at video editors, the rig is beefy and expensive. Prices start at $6k for the computer (with a 1400W PSU!), $5k for the display (32″ 6K display at a really bright 1600 nits, 4 USB-C ports on the back). The display doesn’t come with a stand. Apple will sell you a stand for $1k.

Sports. At 1-3, the Warriors are in trouble. Maybe they needed Durant after all.

Movie. Always Be My Maybe is pretty enjoyable for a rom com. It’s on Netflix.

TV. Game of Thrones finished a few weeks ago, but the New Yorker published an entertaining interview with Emilia Clarke.

In other news… (1) The DOJ will investigate Apple and Google and the FTC will investigate Amazon and Facebook regarding antitrust. (2) The tariff war continues, with China announcing plans for an “unreliable entities list” in response to the U.S. denying access to American technology for Chinese companies, throwing supply chains into disarray. (3) China has threatened to disrupt the supply of rare earth elements. China produces more than 90% of the world’s supply and plays a huge role in processing them. (4) Peleton filed confidentially to go public.

Getting Personal

Nothing much to report – things have been busy.

Addendum

Eleven people died this climbing season, the most in recent years.

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