Aptos is Microsoft’s new standard font, succeeding Calibri, which was made standard around 2007. Calibri in turn replaced Times New Roman and Arial as Microsoft’s default fonts. I never liked Calibri, so I welcome the change. This is dating me, but TNR is still my default serif font of choice for writing large amounts of text.
In an example of the speed at which the government moves, in January 2023 the U.S. Department of State finally made Calibri (14-point) its standard font, replacing Times New Roman due to readability factors (sans serif fonts are regarded as being more readable than serif fonts). Just in time for Calibri to no longer be Microsoft’s default font. Prior to introducing Times New Roman in 2004, the State Department used Courier New, which is a monospaced font (otherwise known as a typewriter font where each character occupies the same width on the page).
Inflation seems to be back under control and the stock market is ripping again. It’s kind of crazy. More and more people are now literally buying into the prospect of a soft landing after tearing into Jerome Powell for first acting too late, and then acting too aggressively. I still think the other shoe is yet to drop. Interest rates went up 5%+ in record time, the labor market is still tight, and everything is suddenly back to the way it was before? I don’t buy it (literally).
🎪 Knuthenborg Safaripark (Maribo, Denmark) A surprising safari park in the south of Denmark where you can drive around and see a host of animals, including elephants, giraffes, tigers, lions (evacuated from Ukraine!), ostriches, etc. Also has a huge, super fun playground for the kids. We stayed overnight in a cabin that has a window looking directly into the tiger area. ★★★★
🎪 Den Blå Planet (Kastrup, Denmark) Denmark’s national aquarium. Pretty decent, with a fun water playground outside. ★★★
🎪 Frilandsmuseet (Lyngby, Denmark) Open air museum with what must be the world’s largest collection of old barns. Decent for the kids because there are a few activities there they can do, but not so much for adults, unless you love looking at barns. ★★
🗺️ Nivå Strand (Nivå, Denmark) A nice beach for young kids with a shallow gradient out into the ocean. ★★★
📺 Jack Ryan (Season 4) A reliable show to binge watch. I liked how all its seasons were self-contained. Unfortunately this is the final season, but it looks like it will be getting a spinoff. ★★★
🎬 The Menu (2022) Nice looking movie. Characters are a bit of a mess. ★★½
On Twitter
Next time you think about trading stocks, think about your competition.
The most decorated international math olympiad participant of all time is that competition. pic.twitter.com/xoCcukVM4Q
big news for font freaks: Times New Roman is being phased out at the State Department & replaced by Calibri. Secretary Blinken sent a cable to all embassies today directing staff not to send him any more papers with Times New Roman. Subject: "The Times (New Roman) are a-Changin" pic.twitter.com/HENLbRH3UQ
In under 5 days, Threads will have hit 100 million users. Mark Zuckerberg isn’t exactly the world’s most beloved billionaire, but in a case of the enemy of my enemy, Elon Musk is even more polarizing given his behavior over the last year. Lots of people have been looking for a Twitter replacement, but the issue with any social network is achieving network effects. This issue has plagued Twitter clones like Blue Sky, Mastodon, and Post News. And the overwhelming majority of users simply don’t care whether the network is decentralized or whatever. It just can’t be a ghost town. Threads, launching off of Instagram’s 1 billion plus user base, doesn’t have that problem.
The historic adoption rate is despite Threads not being released in Europe. This is likely due to the $1.3 billion fine levied by the EU in May, which essentially said that various transfers of personal data they make from the EU to the U.S. are not legal because U.S. laws render that personal data incapable of being protected to the standards required by EU law. There is a new EU-U.S. data transfer framework that is being worked out that in theory will address the issue. However, it is the third incarnation of such a framework. After the European Court of Justice invalidated the first two, it’s uncertain whether the third attempt will actually solve the underlying problems, which all stem from U.S. government surveillance.
I was in the European Union when Threads was launched, but I was able to sign up. That is most likely because my Instagram account was pegged as an American one. The rules around which privacy laws apply to whose personal data can be complicated, but in general you can think of the laws being based on residency (where you live), not citizenship (which country’s passport you hold).
It will be interesting to see how Threads fares. It feels pretty vibrant for such a new product, but we’ll see if it has staying power. I must confess, like many others, it will be a big dose of schadenfreude to see Meta successfully swoop in and take out Twitter after months of “I know better than everyone else” behavior from its mercurial owner. And then things will eventually revert back to people criticizing Meta for how slimy a company it is.
Further Observations
In the meantime, Twitter is suing legendary law firm Wachtell over their huge fees from having successfully defended the company from Musk’s attempt to backtrack from the acquisition. Yeah, good luck there. Apparently, the $90 million fee was composed of $18 million in hourly rates, and the remainder being a massive success fee. Wachtell is perhaps one of the only corporate firms that can charge success fees.
I’ve been in the miles and points game for a decade now, but I’m still learning new tricks. Here’s how to get free cruises by gaming casino status matches. There are various on ramps to this process, but the goal is to attain status at two Vegas casino loyalty programs (Caesars Diamond or MGM Gold) and go from there. With MGM Gold status, it’s possible to get an almost-free 7+ night Carnival cruise for a couple (or a very cheap one for a family). some may be offered balcony rooms and longer cruises. The free Carnival cruise can, in turn, be matched to a free Royal Caribbean cruise. You can also match MGM Gold to Caesars Diamond, which may generate additional free cruises and other benefits like free hotel nights and credits. I have almost 2 years of Hyatt Globalist status courtesy of a Bilt promotion earlier this year, but unfortunately the challenging part is actually making the time for a cruise.
Jubilee Jim Fisk and the great Civil War score (The Boston Globe) How a 30 year old made a fortune shorting Confederate bonds at the end of the Civil War in 1865. His scheme involved trading on the news 5 days before the news reached London.
Reviews
🍽️ Kong Hans Kælder (Copenhagen, Denmark) ✽✽ A decent meal that met but did not exceed expectations. Service was attentive (they gave Susanne a Danish menu and me an English menu) but impersonal. ★★★
🎪 Experimentarium (Hellerup, Denmark) Like the Exploratorium in San Francisco, but oh so much better and with exhibits for kids of all ages. Signage is in Danish and English. ★★★★
✈️ SFO-CPH on SK936 (A330-300, Premium Economy) Solid, new hard product, but the wifi didn’t work. Service was decent for a red eye flight. We bought a couple of these inflatable seat extensions so our kids could lie down to sleep and the flight attendants seemed cool with them (not all airlines are). Flight was full. Sit on the right hand side of the plane for a nice view of Copenhagen when circling to land. ★★★★
🛋️ United Club Lounge (International Terminal, SFO) Overcrowded, cramped lounge with passable food. You’re better off hanging out in the terminal. ★★
Charts, Images & Videos
This maths lecture, “A world from a sheet of paper” by Stanford Professor Tadashi Tokieda is very engaging:
A beech tree I passed by on a walk earlier this week
Last week at work, a sizable portion of my company gathered at a physical office in San Francisco and spent the week working physically together. It wasn’t an offsite — it was actual, regular work. It’s the first time in a few years since I’ve done that with a larger group of colleagues, and it felt refreshing. Everything is just much more dynamic. The side conversations during meetings, the option to have quick “drive by” chats, the ability to “read the room”, and even the small non-work diversions that keep you feeling connected to other people throughout the day. On the flip side, the interactions eat up more time, and finding focus is more difficult when you need to do work that doesn’t involve a discussion. But, the worst part of office work is by far and away the commute, and I was reminded about that when it took me 90 minutes to drive home in traffic (double the time it took to get in).
The toilets in the building we were working in were on the floor above us. That floor also happened to house the company shown in the photo below — a 2 year old AI company of 60 people that had literally just been acquired for a jaw-dropping amount.
MosaicML’s office
DPReview, the authoritative site for digital camera reviews, was scheduled to shut down after Amazon (its owner) conducted layoffs earlier this year. However, I was glad to learn that DPReview was acquired by Gear Patrol and will live on!
The Man Who Broke Bowling (GQ) Aussie Jason Belmonte’s two-handed technique made him an outcast. Then it made him the greatest—and changed the sport forever.
He has flown 23 million miles. Here are his travel secrets. (Washington Post) Several people sent me this article, but I learned about Tom Stuker a number of years ago. He got a great deal, but dare I say that United First would lose its novelty relatively quickly.
On Twitter
MTV Cribs profiled over 110 celebrity homes.
What was the most popular episode? It wasn’t a big mansion or exotic getaway.
It was Redman touring his modest Staten Island townhome.
Before filming, the MTV producers offered to rent the rapper a mansion but he had zero… pic.twitter.com/mMxkwrbtBC
The loss of the Titan, the submersible operated by a private company carrying five people attempting to view the Titanic, has captured the world’s attention for most of the week. After a multi-day search, vessel fragments found on the sea floor mean that the Titan had a catastrophic structural failure and imploded. Mercifully, it would have happened so rapidly that the passengers wouldn’t have realized what was happening.
“You know, at some point, safety is just pure waste.” That’s a quote from Stockton Rush, the late CEO of OceanGate who was piloting the Titan. A lot of reports now point to Rush confusing innovation with recklessness, having been repeatedly warned by experts in the past. It took several years for the warned-about risks to manifest.
“Regulations are written in blood,” is a common saying. In industries where serious injury or death is a real risk, innovation is slower for a good reason.
Hundreds are still missing from the disaster off the coast of Greece, where a boat carrying hundreds of people capsized. It is sad, but not surprising, that media coverage of the two news events has been so incredibly disproportionate.
Top 5
One reason attributed to declining birth rates in developed economies is a reluctance to bring children into a world that feels increasingly messed up. I periodically think about what kind of world my kids will be living in when they reach their 50s, by which time it will be the 2070s. Here is what I think are the most significant global generational issues that will dramatically shape how things unfold in the coming half-century:
The U.S.-China relationship (and the question of Taiwan)
Not making the list for me (yet) are AI, dwindling natural resources, interplanetary travel, and the impact of social media. Disagree with the list? Am I missing anything?
Further Observations
Welcome to summer. The summer solstice was on Wednesday — the astronomical beginning of summer in the Northern Hemisphere and the longest day of the year. In Australia, the seasons are defined by calendar months, instead (winter runs from June 1 to August 31).
It’s been an unusually cool spring and start to summer in the Bay Area, but Texas is experiencing high heat at the moment. The Dallas-Fort Worth area was forecasted to reach as high as 46°C this weekend. And, El Niño is returning…
The World’s 50 Best Restaurants list was released for 2023. In the past, some restaurants won so much that they are now on a list where they can’t win again. This year, restaurants in Lima have taken out 4 of the places, with Central taking out the top spot.
This week I learned: “Wakeup calls are a long-standing tradition of the NASA program. Each day during the mission, flight controllers in the Mission Control Center will greet the crew with an appropriate musical interlude.” Here’s an archive of wakeup calls from one of the Discovery missions. Some of the songs they played include Stairways to the Stars, Defying Gravity, and the theme from Stargate.
About the only time I listen to the radio these days is when I drive Susanne’s car to take my daughter to gym class on the weekend. The drive is only 10 minutes each way, but for the last 3 months, I will hear, without fail, The Weeknd’s Creepin’ at least twice, sometimes three times. (My daughter has heard it so much she knows the lyrics 😅.) It’s really annoying, and I recently stumbled across a video that explains why this is: Why radio stations sound the same.
Well, the whole Prigozhin thing was anticlimactic. What was the point?
📺 The Bear (Season 2) I hope they renew this for another season. My favorite episodes were Honeydew (a nice interlude in Copenhagen), Forks (nice to see a troubled member of the crew catch a break), and the incredible Fishes (a double length episode with an ensemble cast). ★★★★
'Rerender A Video' by Shuai Yang et al. uses a cluster of techniques to remove the flickering and temporal inconsistency that happens when using stable diffusion for video, while still being compatible with LoRA/ControlNet-driven content.https://t.co/WsRCSP26qgpic.twitter.com/9PeQKvBKiv
It’s the Juneteenth long weekend and for the only time in the year, our preschool is open on a holiday, so Susanne and I genuinely have the day off. Unfortunately, her Monday plans were unceremoniously derailed by not one but two clients on Friday who are pushing to sign deals early next week.
Susanne and I watched this YouTube video that plays the most popular song in each month since 1980. It’s almost an hour long, but it went by quickly. The 1980s had some amazing music, and I knew virtually every song that decade despite not being sentient (or even alive) for most of it. Studies have shown that people tend to stop discovering new music sometime around 30-35 years old. I started tapping out about midway through 2020, when I couldn’t recognize more than about 50% of songs and artists. It’s probably not a coincidence that this coincides with the start of the pandemic and the last time I had a regular commute for work.
My thinking on the Vision Pro has changed. After reading all of the glowing reviews, I think I’m going to buy one when it’s released… but only if Apple’s 14 day return policy applies to it. There are several Apple products that I’ve been indecisive about buying over the years. I ended up trying them out, only to send them back after a few days of use. They include the Apple Watch Ultra (found it to be a net detractor over the 20 year old automatic watch I currently wear that powers itself and doesn’t vibrate on my wrist every 5 minutes), the iPhone Pro 13 and iPhone 13 (I prefer the Mini’s form factor), and the AirPods Pro Gen 2 (I already have regular AirPods and the noise canceling that the Pros offer is unusable from a practical point of view when my kids are around… which is also when I probably most want to use them). I suspect the Vision Pro at home is an itch that will get scratched by trying it out for a few days.
The S&P 500 index is almost back to where it was in March 2022, when the Fed started the fastest series of rate hikes in history. Kind of crazy.
Anduril has prohibited TikTok/ByteDance from all devices used to access Anduril systems, including personal devices.
Two reasons: 1) The No TikTok on Government Devices Act requires this of defense contractors. It should have gone further. 2) TikTok is nation-state warfare.
Apple launched its $3,499 Vision Pro AR/VR headset on Monday. With sales tax, the price will be closer to $3,850 where I live. If you wear glasses, like myself, you have to buy additional lenses that magnetically attach to the device. I imagine those will cost a few hundred dollars.
Nonetheless, as long as Apple decides to continue developing the product, we can expect the Vision Pro to get cheaper and smaller over the years. They’ll probably release a non-pro Apple Vision at some stage.
My take? The Vision Pro probably represents the best shot this decade at seeing whether AR/VR is ready for widespread daily adoption (if it ever becomes ready — I’m doubtful).
As I wrote last week, the promise of AR/VR is mainly hamstrung by the hardware. For example, if I could magically have some of the functionality of the Vision Pro in the glasses I already wear (kind of like a heads up display), without materially increasing their weight or looking dorky, I’d be more willing to stand in line for it.
What we have today with the Vision Pro is the best mass-production headset that you can design with today’s technology. It’s entirely controlled by voice and hand gestures, so you don’t have to lug hand controls (the VR world’s equivalent of the stylus) around like most other headsets. Apparently the eye tracking is pinpoint accurate. The battery has been offloaded to an external battery pack you stick in your pocket, ostensibly to reduce the weight of the headset and thus user fatigue. The screen resolution is the best in the industry. They try to mitigate the issue of being blocked off from the physical world by including a creepy simulated-eyes display in the front, and giving the user the ability to control how much of the outside world they want to see. Because wearing glasses degrades the experience, they require glasses wearers to buy special Zeiss lenses that attach to the device and use those instead. They even have a solid approach to privacy (advertisers can’t do analytics on where you’re looking).
The headset is far from perfect. Reports are that the headset will still starts to feel uncomfortable after some period of use. The corded external battery is still something extra to lug around. But let’s acknowledge for a moment that there is an incredible amount of technology packed into this thing. It’s been pointed out that it represents the culmination of all the different things that Apple has been working on in its other products — from the Apple Watch’s digital crown to the iPad’s Lidar, to the iPhone’s TrueDepth camera for Face ID, and the M2 chip — and then some.
Who knows if it will find meaningful traction? We’ll find out next year.
Some additional random thoughts:
John Gruber has a great review of his 30 minutes with the Vision Pro. “Most impressively, and uncannily, the field of view seemingly exactly matches what you see naturally. It’s not even slightly wider angle, or even slightly more telephoto. There is no fisheye effect and no aberrations or distortion in your peripheral vision. What you see in front of your face exactly matches what your own eyes see when you lift the Vision Pro up over your eyes.” Sounds like Apple absolutely nailed the technology.
Here’s what Mark Zuckerberg thinks. I mean, it’s what you’d expect him to say, and he kind of has to publicly say that, even if he’s privately sweating. The cost is the main competitive advantage he has today. He points out that Apple’s portrayal of the Vision Pro world feels less social that Meta’s vision of their metaverse. While that may be true today (it’s a little tough to buy everyone in the family their own headset!), that will change if the price becomes more accessible. After all, the social aspect is just software and Apple has a bristling developer ecosystem. The hardware is the hard part.
The iPhone was niche when it was launched. But I was totally hyped about it and stood in line at the Apple Store in Sydney when the first one was released in the Australian market. (I had to ask my boss at the time for permission to leave work early for it. He’s one of the best technology lawyers I’ve ever worked with but even he didn’t appear all that curious about it and seemed amused at my earnestness!)
The iPhone is everywhere now (at least with the world’s richest 1 billion consumers) and the average price point today is, what, $1,000? When the iPhone was released it was around $600, whereas a BlackBerry could be had for around maybe half that (and Nokias were even cheaper). People will pony up lots of cash if something is good enough and essential enough. Phones are essential in today’s world, but were pretty much essential before the iPhone arrived on the scene too. AR/VR doesn’t have that positioning.
The simulated eyes thing are an interesting approach, but I find them creepy. I certainly wouldn’t want to interact with my kids that way. How we look at eyes for feedback is a primal thing… uncanny valley and all that.
The scene in the ad for the Vision Pro that I liked the most is where a woman is sitting on a plane and she tunes everything out by watching a movie (at the 0:49 mark). I wonder if the AirPods Pro will pair with the Vision Pro? It needs noise cancelling to be completely immersive. That’s escapism. Maybe a little bit dystopic too. From a practical point of view, it’s probably going to be annoying for people sitting next to you who need to pass by to use the toilet (both to get your attention and to maneuver past).
Apple was very careful not to mention the terms AR, VR, metaverse, or headset in its launch. It prefers the term “spatial computer”.
If weight fatigue is an issue, I can’t see it being used for more than an hour or two a day by most.
Bask Bank offers a savings account that pays interest not in cash, but in American Airlines miles. As interest rates have risen, so too has their mileage rate, and each dollar deposited with them now earns 2.5 AA miles per year. They are currently running a promotion where if you deposit a certain amount of money with them for at least 180 days, they will give bonus miles. $50,000 gets you a 20,000 mile bonus on top of the regular 62,500 miles. So, is it worth it, compared to sticking your money in a 26-week treasury bill?
Here are the factors:
Treasury Bill: A 26-week treasury currently pays out 5.483% p.a. when held to maturity. The interest is not subject to state tax. I regard the post-tax interest on the t-bill as the opportunity cost here.
Bask Mileage Account: $50,000 deposited for 6 months nets 82,500 miles. Those miles are taxable, and Bask issues a 1099 that values miles at 0.42 cents each, for a taxable amount of $346.50.
Here’s how it breaks down:
View From the Wing values AA miles at 1.3 cents per mile (cpm). OMAAT values them at 1.5 cpm. That feels about right. Just note that miles are subject to devaluation over time, so they tend to become worth significantly less as time goes on.
In theory, a one-way first class partner award booking from the U.S. to Asia can cost as little as 80,000 AA miles… if you can find availability.
Further Observations
I have the details of two of my credit cards committed to memory. This can be a surprisingly useful thing to do.
Donald Trump was indicted on federal charges on Thursday relating to improper handling of classified documents. “Wouldn’t it be better if we just told them we don’t have anything here?” Trump is alleged to have said. Uncharted waters…
Both Binance and Coinbase were sued by the SEC this week. The SEC’s complaint against Binance features this amazing quote:
The other hilarious thing is that the name of the “compliance officer” referenced is Alvin Bro. There are tons more choice quotes in depositions and other evidence released by the SEC.
International sports are so dirty. The merger of the PGA Tour with LIV Golf after so much moral grandstanding by the PGA Tour was shocking. Jay Monahan, the PGA Tour’s commissioner, is probably the golfing world’s most unpopular person at the moment. At least Messi turned down the Saudis.
📖 How To Invest: Masters of the Craft (David Rubenstein) Interviews given by Carlyle Group co-founder David Rubenstein with investing legends such as Seth Klarman, Ray Dalio, Stan Druckenmiller, Jim Simons, Orlando Bravo, Marc Andreessen and Michael Moritz. Full of intriguing insights — into their backgrounds as well as how they think. ★★★★
Nvidia currently has only $26 billion in sales versus $208-525 billion for the Big 4 (Microsoft, Apple, Google and Amazon). Just how high are these expectations? Nvidia now trades at over 38x sales and over 200x earnings. We’ve never before seen a price to sales ratio that high… pic.twitter.com/PyaVHd2g6j
Apple’s long-awaited VR/AR headset is rumored to be launched at WWDC on Monday. Around the internet, it seems that people are skeptical whether the device will become a successful product line for Apple, but no one is willing to rule them out given their track record of taking over markets they enter (see phones, tablets, wireless earphones, watches, etc.). However, the anticipated $3,000 price tag is a barrier that will probably see the first version remain a niche object, kind of like its top of the line Pro Display XDR monitor. Let’s see what they can do with it. (Meta also announced its Quest 3 headset. I bought a Quest 2 during the pandemic but it hasn’t seen much use.)
When I was in high school in the late 90s, I remember being totally hyped for the release of Ultima Online, one of the first massively multiplayer online role-playing games (MMORPGs) that, I’m surprised to see, is still operating today. The promise it held in my mind was a persistent world that I could explore with a bunch of friends. But it was not just about exploring dungeons and killing monsters—you could do stuff like form a guild, trade goods, and even buy virtual property. This meant it could be a place you could just hang out in and chat and “build a second life” in, so to speak, in between all the adventuring. (Second Life came a few years later.) It seemed to be a great place to hang out with real life friends and friends that I had made online.
The reality was decidedly less rosy. The first issue was that things were hamstrung by technology. Broadband in Australia was in its infancy and cost prohibitive, and accessing UO over a dial-up connection led to crazy bad lag. It was unplayable. The second issue, is that even when the connection was tolerable, Britannia (the name of the world in which UO is set) wasn’t a particularly fun place to actually hang out. While clearly there were enough people who the game engaged that it has survived to this day, I don’t remember playing it for more than a few weeks even though I played a lot of computer games back then.
MMORPGs are the original metaverses and they have been around for decades. While VR is tightly bound with the metaverse (as in, a way to fully immerse yourself in one), VR has broader applications. Nonetheless, just like UO, I think the early days of consumer-accessible VR are still pretty niche. Until a few things change, I see things remaining that way (although, with Apple’s reach, even a niche offering involves a lot of people).
First, the form factor is cumbersome. Fabricated mockups of Apple’s headset show a sleek pair of ski goggles which are easier to whip on than the Quest, but there is an external battery pack which I assume needs to be clipped somewhere to your body. This adds quite a bit of friction each time you want to use it, which contrasts to the “instant on” nature of its phones, computers, etc. (I remember the old days where computers didn’t have sleep mode and it could take 3+ minutes to boot up a desktop. That made using a computer a very intentional act.)
Second, current forms of VR disconnect you from the physical world. I imagine the Apple headset will have look-through functionality, but it still involves putting something in front of your eyes—your window to the world—blocking them completely. So it may be great for games and experiencing things that aren’t possible in the real world, but will that provide widespread daily utility?
Third, are there any real world interactions that are genuinely made better by VR goggles? I certainly don’t want to have meetings at work wearing them. Maybe there are some limited applications like doing virtual walkthroughs of buildings in real estate that are more convenient (but still inferior to actually being there).
Fourth, all of Apple’s major product lines are used by all age groups. It will be interesting to see what the uptake is of older age groups. Maybe it’s me just getting older, but the Quest 2 makes me dizzy sometimes.
All that said, MMORPGs have come a long way and some of them have developed very strong communities and are actually places in which a lot of people now hang out and socialize (and sometimes meet and get married IRL). And some people even make a bit of a living through it by selling virtual goods. I have no doubt that VR will continue to evolve and grow, but similar to MMORPGs, I’m not sure it will become something all pervasive, like the smartphone, or this new generation of AI technology that’s currently set the tech world ablaze. There’s nothing wrong with that, of course, but with Apple I suppose there’s a certain weight of expectation that whatever they do will literally change the world and become ubiquitous.
Augmented reality is probably the more interesting application, but I think it demands a different form factor to find more widespread adoption. But what would that be? Google Glass was an attempt, but it looked dorky. Maybe one day we’ll be able to integrate a chip and power source into glasses that are inconspicuous. Or maybe it will be something like this, where the technology just gets out of your way altogether.
Nonetheless, Apple’s headset is still probably going to be able to do some pretty cool stuff!
Further Observations
Every few issues of this newsletter, I will sign up a random friend or two to it. If you’re wondering why you suddenly started receiving these, that’s why. (Funnily enough, no one has ever replied to me asking, “Hey, why did I start getting these?”)
A shout out to the Dim Sum WhatsApp group! It was great seeing you all yesterday… and actually eating dim sum together for the first time in ages!
📺 Succession (Season 4) First class TV, and they successfully landed the plane with the series finale. ★★★★★
📺 The Diplomat (Season 1) Susanne put me on to this one. It’s really good. ★★★★
📺 The Night Agent (Season 1) Watchable, but pretty standard spy show fare. ★★½
🎪 Gilroy Gardens Theme Park (Gilroy, CA) Took the kids here over the Memorial Day weekend and it wasn’t as busy as I feared, which is probably telling. It’s a bit of a weird, aging, and tired theme park, and two of the rides broke down just as we reached the front of the line (which did not make for happy children). Membership is apparently tax-deductible. ★★
So I followed @GaryMarcus's suggestion and had my undergrad class use ChatGPT for a critical assignment. I had them all generate an essay using a prompt I gave them, and then their job was to "grade" it–look for hallucinated info and critique its analysis. *All 63* essays had
Inflation is coming down, but I remain skeptical that we’ll get a soft landing.
A soft landing supposes that, by keeping interest rates roughly where they are, inflation will start to moderate back down to its 2% target and low unemployment and positive productivity growth will be maintained. Paul Krugman suggests things will be more resilient than the doom and gloom suggest.
But interest rates have skyrocketed in the last 12 months, after more than a decade of ZIRP and a generation of workers who haven’t experienced an environment in which money was not cheap.
Rate rises have never occurred so quickly in history, and I don’t think they’ve had a chance to bite. The longer you keep rates at this level, the longer the situation gets worse for people and businesses who are sensitive to rate rises. People are not used to interest rates being over 1%, much less over 5%. The effects of high rates should eventually flow through in the form of increased bankruptcies, defaults, and restructurings. The regional banks aside, we haven’t seen much of that yet, but it doesn’t gel with me that whoever levered up to the gills in the last few years isn’t going to face some sort of reckoning when their interest rates have suddenly multiplied. It will take some time to play out.
We’re already seeing some signs of stress.
Credit card debt did not decline in Q1 like it normally does and delinquencies are rising. The commercial real estate market is a ticking time bomb. The regional banking crisis is still lurking in the wings.
Economic cycles have tended to consist of periods of gradual growth followed by short and sharp declines. I’m not sure why it would be different this time when the powder keg is so large. Eventually, something will spark a prolonged panic and precipitate the next recession.
And maybe we’ll see cycles that are more volatile — a sudden slowdown could push the Fed to cut rates back down to zero again in a knee jerk reaction, and you end up with an economy in pilot-induced oscillation (“when the airplane begins a departure from the desired flight path, and the pilot applies inappropriate, excessive or mis-timed corrections that result in ever-increasing excursions that threaten to force the airplane out of control”).
Perhaps something at play is that things happen so fast these days, and attention spans are short. The lack of bad things happening quickly might be interpreted as a sign that the bears are forever crying that the sky is falling, but we’re actually on a path to recovery.
I just don’t see it happening.
Further Observations
Ron DeSantis launched his presidential campaign on Twitter Spaces in a conversation with Elon Musk and David Sacks. As is common for Musk’s events, it started late and then just got more awkward as the servers overloaded.
Uber’s Chief DEI Officer was placed on leave after a couple “Don’t Call Me Karen” talks she hosted went sideways after various employees felt antagonized by what she said. Things feel a bit out of control, and it’s telling that I don’t really feel comfortable publicly expressing a view what was said, knowing that it could come back to bite me at some stage. All I’ll say is that this chilling effect on speech isn’t a good outcome.
This was NVIDIA after earnings release on Wednesday. That stratospheric price reflects $180B+ of market cap added in the space of an hour, all because of AI. (Only Apple and Amazon have recorded larger one-day increases.) Its PE ratio is now over 200.
Generative Fill, a new superpower integrated throughout Photoshop, launching in beta today.
Powered by Firefly, our generative AI family of models, Photoshop now let’s you summon new objects and augment creations layer by layer. Saves time, increases possibility, and pretty 🤯 pic.twitter.com/ARxhclFshO
The Republicans are playing chicken with the debt ceiling again. It’s a travesty how the system works here – namely, that the budget is approved by Congress first, and then as a separate step, Congress has to approve raising the debt ceiling so that the U.S. Treasury can issue new debt to pay for the spending that Congress already approved. This process is almost unique in the world. (Denmark is the other country that works this way, but they don’t practice brinkmanship over there.)
It’s almost impossible to imagine Congress actually taking things over the precipice, but no one is 100% absolutely sure that won’t happen, even though the consequences would be catastrophic if the U.S. were to default on its debt.
After months of President Biden effectively saying that he wouldn’t negotiate with terrorists who were holding the debt ceiling hostage, it’s telling that he is now negotiating. Clearly, there’s pressure from the Democrats who think the Republicans might let things go too far.
“X-date” is the deadline where the government effectively runs out of money. It fluctuates because it depends on day-to-day tax revenue collected and spending, but “as early as June 1” is the guidance that the Treasury has given.
The last time things got this down to the wire was in 2011 when the debt ceiling was raised with potentially only a day or two before the government ran out of money. In response, S&P downgraded the U.S.’ credit rating from AAA (the highest) to AA+. In the month leading up to the resolution of the crisis, the stock market fell 17%.
U.S. Treasury Bonds are regarded as “risk free” assets (or the closest thing you can have to risk free) given the reserve status of the U.S. dollar, the fact that the U.S. economy is the largest in the world, and the ability for the U.S. government to print more money at will. If the U.S. were to default on its debt, it would be entirely self-inflicted.
Interestingly, the market is not reacting like it did in 2011, staying relatively buoyant despite June 1 being a little over a week away. This means the market is expecting things will be resolved before x-date. It has been observed that this means that insurance against a debt default is selling for cheap. This insurance comes in the form of put options on the S&P index (via an S&P index ETF), or alternatively call options on the price of gold or against the VIX (volatility index).
On May 18, one unit of SPY (an S&P index ETF) was about $415 (about the same as where it was a month ago). A put option on SPY expiring on June 2 at a strike price of $385 (~7% under the ETF’s current value), was selling for $0.40. Should SPY decrease by 17% (the same as in 2011) over the next 2 weeks to $345, the option would return about $40 for a ~100x return. This has not gone unnoticed.
One potential solution to the crisis, where the U.S. Mint mints a $1 trillion coin and deposits it in the Federal Reserve’s Treasury account, has been taken off the table by Treasury Secretary Janet Yellen. As explained by Wikipedia: “The concept of striking a trillion-dollar coin that would generate one trillion dollars in seigniorage, which would be off-budget, or numismatic profit, which would be on-budget, and be transferred to the Treasury, is based on the authority granted by Section 31 U.S.C.§ 5112 of the United States Code for the Treasury Department to “mint and issue platinum bullion coins” in any denominations the Secretary of the Treasury may choose. Thus, if the Treasury were to mint one-trillion dollar coins, it could deposit such coins at the Federal Reserve’s Treasury account instead of issuing new debt.”
Further Observations
Michael Lewis’ book on Sam Bankman-Fried is called Going Infinite and it will be released in October. I’m looking forward to it.
Sometimes I’m so exhausted that I fall asleep putting my kids to bed and end up waking up a few hours later at around 11pm. After shaking off the wooziness, I then spend the next few hours relatively clear-headed and productive, catching up on emails, work, and household admin, before heading back to bed at around 2am or 3am. I was worried that this messed up schedule might become a bad habit, but it turns out that it’s a natural sleep pattern called biphasic sleep that was common in medieval times: “A couple of hours later, people would begin rousing from this initial slumber. The night-time wakefulness usually lasted from around 23:00 to about 01:00, depending on what time they went to bed. It was not generally caused by noise or other disturbances in the night – and neither was it initiated by any kind of alarm … The period of wakefulness that followed was known as ‘the watch’ – and it was a surprisingly useful window in which to get things done. ‘[The records] describe how people did just about anything and everything after they awakened from their first sleep,’ says Ekirch. … One servant Ekirch came across even brewed a batch of beer for her Westmorland employer one night, between midnight and 02:00.” That makes me feel a bit better.
A Berkeley student commuted from Los Angeles for an entire academic year. He did this ostensibly to avoid paying rent in the Bay Area (he had free accommodation in LA). From a pure money perspective, the numbers checked out. From a practical perspective, well… His daily commute averaged 4-5 hours each way, and involved a car, plane, and BART ride. He managed to schedule his classes so he only had 3 days a week for most of the year, but during some periods he did have a 5 day week. On some days, he needed to wake up before 4am to catch his flight, and some days his flight back departed at 9pm. But, he managed to make it to every class, every day. The sheer planning and discipline involved, and fortune to not be impacted by delayed or canceled flights, is impressive. He breaks everything down in this great Flyertalk post. There was a 6-month period of my life when I was commuting at least 5 hours a day, every weekday, and I swore I’d never do that again. (Standing in a hot un-air conditioned train for an hour every day is not fun. I once fell asleep while standing up.)
Here’s how one of his days looked:
“8/11/2022 Thursday LAX-SFO-LAX AS3342 LAX-SFO E175 $5.60+5000 AS miles AS3435 SFO-LAX E175 $5.60+5000 AS miles Leave home 410am Car Parked 436am Reach Airport 456am Flight Departs 600am Flight Arrives 745am BART Departs 935am BART Arrives 1047am Arrive Class 1100am [4 hours 20 minutes at class] Leave Class 320pm BART Departs 333pm BART Arrives 448pm Flight Departs 623pm Flight Arrives 757pm Airport Landside 804pm Reach Parking Lot 822pm Arrive Home 858pm
That’s when I started questioning myself: 6am flight everyday, is it really worth it? Especially given that I only slept 4.5hrs the night before. But anyways, once I boarded, I slept like a baby until we reached SFO.”
— Aakash Gupta 🚀 Product Growth Guy (@aakashg0) May 18, 2023
✅GOOD MANAGERS ask open-ended questions in 1-1s like “What’s on your mind?” and “What could be going better?” They look for what's not being said and try to help.
❌BAD MANAGERS worry about unimportant details or company politics and forget the big picture in 1-1s.
I’m somewhat embarrassed to have only discovered the amazing library system in our part of the Bay Area. There is a small offshoot branch of the main city library about 2 minutes’ drive from our house that has a great selection of new releases and children’s books. And, through that library, I can request books online from any of the dozen or so other libraries in the same system. They ship the book to my local branch and notify me when it’s ready for pickup. They seem to get all the major new releases. Self-checkout is simple — they have a neat scanning machine where you pile all the books you’re checking out on top of the checkout surface. The machine detects all of them and deactivates the security tags in one fell swoop. The books are initially lent for 3 weeks, but as long as no one has a hold placed on them, the library will automatically renew them for you. They let you check out 50 books at a time! I visit with my daughter every second Saturday.
Anyway, the library is not what this post is actually about. While at the library, I picked up a field guide to identifying mushrooms (on a total whim) and learned a few things, including what a “spore print” was. Basically, it’s a method of identifying mushrooms by observing the attributes of the spores they drop, such as their color and drop pattern.
I tried to make one. It’s easy: I bought a portabella mushroom from the supermarket, cut the stem, placed it gills down on a piece of paper and covered it overnight with a glass container. The next day, you get your spore print on the paper. (And if you spray it with a fixative, like hair spray, you have something you can hang on the wall.) Below was the result:
I also learned that portabella mushrooms are the same species of mushrooms as white mushrooms, button mushrooms, and cremini (brown) mushrooms — all supermarket staples.
Mushrooms are just one part of a fungus. Similar to an apple on an apple tree, mushrooms are the fruiting body for the underlying mycelium (a threadlike network that exists in soil or a substrate like wood) that makes up the rest of the fungus. Mushrooms are the way fungi reproduce, since they are basically receptacles for dispersing spores.
Mushrooms are incredibly diverse, but I was particularly intrigued by giant puffballs. They can grow larger than a soccer ball and, for a limited span of their lifecycle, are edible!
Further Observations
In a civil case, Trump was found liable for sexual abuse and defamation. He is appealing. I doubt this will significantly change whatever trajectory he’s currently on. Once DeSantis enters the race, things will get interesting.
In another case of chickens appearing to come home to roost, habitual liar and member of Congress George Santos has been indicted on 13 federal counts including wire fraud, money laundering, theft of public funds, and making false statements to Congress. He has pled not guilty.
Beef (Season 1) Sucked me in deeper and deeperwith each episode. The main characters are mostly Asian and about my age, which in a strange way (because things get really crazy) made this show more relatable. Worth a watch. ★★★★
Air I’m a sucker for Damon/Affleck flicks. The 80s montages were also spot on. ★★★
One of our kids got the whole family sick this week, so just a short update.
Following the demise of First Republic Bank, all regional bank stocks took a bath on Thursday. They rallied slightly on Friday, but the signal sent by plummeting stock prices could affect confidence and lead to a run on a bank by its depositors. If this continues, it’s hard to see where it stops with regional banks unless the government steps in and changes policy — most likely by doing something with the FDIC’s 250K insurance limit. Pac West and Western Alliance appear to be the most vulnerable at the moment.
King Charles III had his coronation ceremony yesterday. I have been told by our resident royal watcher that historically the UK’s coronation ceremonies were not attended by foreign monarchs because the ceremonies were considered to be the business of the people of the UK alone. Now that the British Royal Family is considered to be one of the UK’s primary “exports,” times have changed… If you are curious who attended, here’s a list.
On Friday evening, we arrived home after dinner to find that one of the large Modesto Ash trees in our front yard had split in two. The split half was being precariously held up by the branch of another tree, and that branch was the only thing preventing everything from collapsing. Nonetheless, the whole tree was now tilting like the Leaning Tower of Pisa, and hanging over the sidewalk like a gigantic Sword of Damocles for people taking their evening walks.
I quickly printed out a couple warning signs and stuck them to the tree. But now what?
We had actually realized the tree was in the process of dying a couple months ago and called an arborist. After tapping the trunk and several branches with a pen, he recommended we take the tree down, but there wasn’t any rush as the winter storm season had passed. We signed a contract with them ($1,500 for the removal, plus more for stump grinding) a couple weeks ago, but then they strangely ghosted us, despite multiple follow ups. A call to their emergency line went unanswered.
In any event, after Googling, it turns out that even when a tree of this size is clearly dead, you need a tree permit from the city to remove it. Tree permits take about 10 days to process, unless it’s an emergency. Two problems: the permitting office was closed since the weekend had basically started, and the tree permit required an arborist’s report for submission.
We didn’t feel comfortable waiting until Monday, and it was a toss up who would collapse first over the weekend: First Republic Bank, the Warriors, or our tree.
Susanne got some quotes from other arborists through Yelp. We were surprised to get several immediate responses. Some were willing to come out on Saturday to give us a quote. One asked for $2,000 off the bat (ouch).
I called the city works department, which was closed, but a recorded message pointed me to an emergency line for issues like burst water mains and leaking sewer lines. The person who answered was as helpful as they could be — they didn’t know who would handle our issue, but took down my contact details and promised to get back to me.
Not knowing how long that would take, I then turned to Nextdoor and a few helpful neighbors suggested I call the non-emergency line for the police. (I later read in the city ordinances that the police can authorize a tree being removed if it’s a safety threat.) After calling, we were told someone else had apparently reported the issue already (it wasn’t our earlier call to the works department), and they would be sending someone around to inspect.
About an hour later, we got a knock on the door from a city worker. We took him to the tree. He shone his torch on the trunk, “Hmm, yeah I can see the split.” Then we directed him to look into the canopy where the other tree was supporting its half-fallen compatriot like a drunken sailor. “Oh. Oh yeah. That’s not safe. That’s not safe. I didn’t even see that. This is a tree on your property, but we’re going to call someone out to take some of these branches down because it’s not safe. We can cut it up but we can’t haul the debris away for you.”
Not a problem with us! We had already planned to pay for that, and now the city was telling us they were going to do it for free. We asked how long that would take, expecting it to be some time the next day, but were amazed to learn a crew would be out within the hour. (He was actually apologetic, “Well the guys have got to go and pick up the equipment they need first.”)
Sure enough, a guy with a cherry picker and a chainsaw showed up and spent the next couple of hours cutting down the tree, one chunk at a time. He was done just before midnight and we were super appreciative.
Because bureaucracy is bureaucracy, he told us we still needed to file for an emergency tree permit for the removal. “However, it shouldn’t be a problem because this was an emergency situation and my boss is the person who approves those permits.”
Further Observations
First Republic Bank is going the way of Silicon Valley Bank. A lot of the VCs that were extremely vocal on Twitter about saving Silicon Valley Bank depositors when the bank was melting down have been strangely silent. “The government has to save all the depositors or the regional banking sector is going to die!” But this weekend, not a peep from the Twitterati. Not hard to figure out why.
H-1B visas are the most common form of visa for international students looking to stay in the U.S. to work. If you have a master’s degree, there are only 85,000 available each year. This April there were over 780,000 applications. Yikes. When I applied for my H-1B back in 2010, the silver lining of being in the depths of the great financial crisis was that there were more than enough H-1Bs to go around.
If you think you’re having a hard week, just be glad you’re not doing this:
On Twitter
In case you’re wondering who‘s arguing with you on the internet… here’s a video of people walking into a building and being “scanned” with a lint roller by a man who is not a security guard, no questions asked. pic.twitter.com/lLL8vDhMRt
Joe Biden asked the president of South Korea to sing the song American Pie when he found out that Yoon Suk Yeol is fond of American music. And he unexpectedly agreed. pic.twitter.com/6PVTteSAVV
This week was the series finale of Star Trek: Picard. I’ve been a Trekkie for a long time and I have blog entries dating back from as long as 25 years ago (!!) writing about Trek. Given the special nature of the season, it felt appropriate to write a few more words about it. Spoilers ahead.
The last time we saw the whole TNG cast together was in Star Trek: Nemesis. Unlike the original series cast’s swan song in Star Trek VI, the TNG cast never had a proper send off, as poor results at the box office for the decidedly sub-standard Nemesis saw their time on the screen come to an abrupt end.
Now, a little over 20 years later, the whole senior TNG cast — naturally playing characters that are also 20+ years older — has been reunited in a fitting end and satisfying closure to the TNG crew’s journeys together.
The previous two seasons of Picard were forgettable and the writers of Season 3 did their best to do so. Season 3 was much better.
I found Season 3 deeply nostalgic, and the writers made sure to throw in tons of callbacks and easter eggs to stoke that nostalgia. So much fan service, and I loved it. It would have been nice to see more cameos from DS9 and Voyager folks (apparently they ran out of budget), but they did include an oblique reference to Odo, who was played by the late Rene Auberjonois.
When you see someone continually over the course of years, you don’t notice the aging process so much. But the last time we saw the crew, they were much younger. So suddenly seeing them all together again on the screen, 20 years later, was a stark and constant reminder of the passage of time. For me, it brought back memories of the times I spent watching and discussing episodes of TNG and DS9 with a couple of my best friends during high school and university (screening at 11pm on Channel 9 during a weeknight). Occasionally we would scoop up whatever VHS tapes we could get our hands on at the local Video Ezy and watch episodes late into the night. And it was also a sobering reminder that life has moved on — with the onset of middle age, we now each have our own “next generation” to bring into the world.
The closing scenes were great — Picard delivering lines from Julius Caesar and a poker game to mirror the end of All Good Things… Apparently they filmed the cast casually playing poker for about 45 minutes, took an excerpt from it, and rolled it over the closing credits. (Oh, and Q is back.)
I was asked for my thoughts on TikTok. My thoughts are pretty simple.
The potential for social media to do harm in various forms has been recognized for many years now. Ad-driven social media business models rely on engagement and attention, and their algorithms optimize for that. That often means displaying content that is provocative or even incendiary. It leads users down rabbit holes and into echo chambers. It influences emotions and perspectives and messes with adults psychologically. For kids, it’s even worse. I believe it can really mess up kids during their most formative years — especially if they are left with it for hours unsupervised, each day. (Gen Z believes it too. See “Do the Kids Think They’re Alright?” in the Articles section below.)
TikTok has incredible engagement and reach. People spend hours on it each day. It has over 100 million users in the U.S. As a business, I wish I could invest in it. As a product, I’m not a user. But some of the content on there and the creativity on display is pretty incredible.
Overlaid on top of all of this is the fact that TikTok is owned by ByteDance, a $300B Chinese company. Chinese companies (and particularly tech companies, as of late) are vulnerable to interference by the Chinese government far beyond a level that exists in the U.S. The Chinese government even has a board seat and some ownership of a key ByteDance company. (ByteDance also has several other apps that rank very well in U.S. app stores.)
Facebook has been used by domestic and foreign actors to spread misinformation, influence hearts and minds, and generally damage the fabric of society.
It then doesn’t take a lot of imagination to realize that if the company responsible for the algorithm itself were trying to set an agenda (in this case, at the behest of the CCP), it could do so by directly altering the algorithm in a way that could have much more significant impact than by external actors trying to game the system. It’d be a good way to subtly spread propaganda or stoke social discord in a mostly inscrutible way.
Data surveillance is also an issue, but that doesn’t seem as significant. The U.S. government certainly has the ability to covertly compel production of certain data from private companies. You’d also think someone would notice if the apps were trojan horses for spying on whatever else is happening on a user’s device.
TikTok is banned within China itself, which is pretty telling.
The result is a national security threat that seems very real. It’s hard to see another outcome from this situation other than for TikTok to be spun, or banned. I won’t be sad if either of those things happen.
Some may argue that banning TikTok would be hypocritical of the U.S. The U.S. regularly decries China for muscling out U.S. tech companies from the Chinese market — only to threaten to turn around and do the same thing. This is a whataboutism-type argument which doesn’t respond to, nor undermine, the genuine concerns above. Nor does it undermine the notions of sovereignty and what’s in the national interest that allow countries to engage in this behavior. It’s not ideal, but there’s no reciprocity here.
Further Observations
I found out what happens when you forget to remove crayons from the pockets of your pants before you throw them in the wash. It looks like my toddler drew all over our clothes. Bits of melted wax everywhere. The internet’s solution of washing the clothes in very hot water, dish detergent, vinegar and washing detergent was not completely effective. ChatGPT was unhelpful. Wife not amused.
And while I was at it, my wallet also took a bath in the washing machine.
We’re almost at the end of Season 3 of Picard and not only is it far superior to the other two seasons, they dialed the nostalgia up to 11, and they did it pretty tastefully. This week’s episode is the penultimate one for the series, and it was amazing. TNG was an indelible part of my adolescence, and it’s kind of wild seeing the entire cast re-assembled, 30 years later.
Do the Kids Think They’re Alright? (After Babel) “It’s hard to find members of Gen Z who think their phone-based childhoods benefitted their generation.”
The kids picked up something nasty at pre-school and it took the whole family down this weekend. So, only a short update for this week, but a long and interesting articles list below.
Google Flights is my tool of choice for finding paid airplane tickets. It’s quick, flexible, and links off to other sites to complete the booking (I greatly prefer booking directly with airlines rather than third parties like Booking.com, Dreamz, etc., which can be a huge pain to deal with if something goes wrong.) Google flights now offers a limited guarantee where they will reimburse the difference if the fare drops after you book. There are limitations, of course:
You need to be signed in your Google account and use U.S. details when you make your booking (currency, phone, address).
The booking needs to be no more than 60 days in the future
It’s only offered for some itineraries (denoted by a badge).
$500 maximum reimbursement, max 3 times a year.
Apparently an unofficial slide that an associate at Paul Hastings prepared has been making the rounds:
While Paul Hastings was quick to disclaim this as the firm’s official position, about 70% of this is accurate, I think. Even for someone who routinely spends these dollars on outside counsel, #3 is not a reasonable expectation (except, perhaps, during crunch time of a major transaction) and firms should be able to manage staffing to give their staff time off and appropriate coverage. #4 I don’t expect everything to be done yesterday. It’s not always possible, I try to give reasonable timeframes and don’t like to put outside counsel through needless fire drills. #7 “No poor connections” — we’re all at the mercy of Comcast. #9 is totally an acceptable answer for an associate, as long as you follow it up with, “but I’ll find out”. #5 is an important point. If you pay $1,000+ per hour to anyone for anything in life, you’re going to expect gold-plated service.
One of the most famous memos in all of Microsoft history was a first memo about cost-cutting which came about in 1993 (see early 90s recession). Mike Murray, leading HR, wrote the memo "Shrimp and Weenies"—before MS, Mike was at Apple, having led OG Mac marketing. 1/ (third try)
PEOPLE OF THE EARTH. Figured out how to ask natural language questions of current financial data and get back a natural language response…with correct/relevant numbers! 🤯💰✨
So. Freaking. Cool.
1. Send database schema along with the question and relevant scope/parameters… pic.twitter.com/AE49RBTIrH
The Fed raised interest rates by 0.25% on Wednesday to a range of 4.75-5.00%. The upper range of that bound is now 20 times what it was a mere 12 months ago. Rapidly rising rates were always going to put pressure on various sectors of the economy that have benefited from cheap money for the last decade plus (that’s kind of the point). We’ve seen it with startups who scored cheap equity financing a couple years ago that are now having trouble raising up rounds. We’ve seen it with families no longer being able to afford mortgages that are as large (with monthly interest payments almost tripling), resulting in a housing market slowdown. We’ve seen it with the regional bank runs that declines in the values of banks’ bond portfolios have sparked.
The question is now which sector is going to be the domino that tips the economy over the edge into a recession? Commercial real estate seems to have arisen as the most likely candidate, with falling tenancy rates combining with a lot of maturing loans that are coming up for refinancing at today’s much higher rates appearing as storm clouds on the horizon.
We had our third prolonged power outage this year. Again on a Tuesday. An extra-tropical cyclone parked itself just off the coast of San Francisco causing more fallen trees and localized flooding. Power was out for us for about 30 hours, and we ended up spending yet another night in our hotel. We now also have a great view into our neighbor’s back yard because most of our fence is gone. And next Tuesday the forecast is for another period of “excessive rainfall with localized flooding”. Sigh.
Last week, I wrote about the fallout from a protest incident at Stanford Law School. This week, SLS Dean Martinez penned a detailed explanation of why she did what she did. It’s a well written missive, and I agree with almost all of it. However, I had two observations. The first is the practical impact of deciding not to sanction anyone for their behavior, ostensibly because it was too hard to figure out who was breaking policy and who was not. Everyone is instead going to have to sit through a mandatory training. Will this mean that a future protest tactic is to flood a talk with bodies because it’s just too hard to identify who was doing what? The second is that the letter only mentions in passing something about respectful discourse. The letter also expressly notes that asking vulgar and provocative questions when you’re given the microphone is ok and not disruptive. That may be true from the point of view of free speech, but as lawyers, respectful argument is part of the job and—normally—a positive value to encourage. (Try spewing profanities at a judge in court and see how far that gets you.) One protester allegedly called for the judge’s daughters to be raped.
“Our world needs climate action on all fronts—everything, everywhere, all at once,” said UN Secretary-General António Guterres in a speech on Monday. He was referencing an IPCC report which once again is warning we’re nearing the point at which it will not be possible to avoid a rise in the global average temperature by the end of the century of a magnitude that will cause severe human misery. “Unless nations adopt new environmental policies — and follow through on the ones already in place — global average temperatures could warm by 3.2 degrees Celsius (5.8 degrees Fahrenheit) by the end of the century, the synthesis report says. In that scenario, a child born today would live to see several feet of sea level rise, the extinction of hundreds of species and the migration of millions of people from places where they can no longer survive.” It’s going to be a slow burn, but wild weather is going to be increasingly common, and difficult to adapt to in our lifetimes, regardless of where you live in the world.
For those who have the fortune of being able to decide where they want to live and work in the world, I think climate factors are going to rise to one of the top considerations within the next couple of decades. Not just whether the weather is “nice”, but whether that cliffside house or oceanfront view is such a good idea, or whether 100 year flood zones really are 10 year flood zones, or whether water scarcity might be a real problem.
Deal Alert: We use Doordash a lot. If you live near a Lucky Supermarket, they have a promotion right now where you can buy six $50 Doordash gift cards and you’ll get 6000 rewards points, which is good for $66 of store credit (and which can be applied to buy more gift cards). Buy with an Amex Gold card and you’ll also get 1200 Membership Rewards points.
How can AT1 bonds be zero'd when they're more senior than equity which is getting paid 2bn, you ask?
Because bondholders agreed they could be.
Here's the section in the $CS 9.75% AT1 prospectus (don't worry if you weren't aware, half the holders prob haven't read this either): pic.twitter.com/Q5FbnOMRM4
Eyes on Tuesday for (again) excessive rainfall with localized flooding issues per @NWSWPC A rapidly developing surface low off the NorCal coast will also bring another round of gusty wind to the region as well. Best to use the relatively quiet weather through Sunday to prepare… pic.twitter.com/al2GNcJCEb
On March 9, Stanford Law students heckled and shouted down a 5th Circuit Judge who was giving a talk hosted by the school’s student chapter of the Federalist Society. Among the grievances of the heavily progressive student body was that the judge had refused to use, in a 2020 opinion, the preferred pronouns of a transgender person who had been convicted of several offenses related to child pornography. (“In conjunction with his appeal, Varner also moves that he be addressed with female pronouns. We will deny that motion.”)
The judge was reportedly unable to complete his prepared remarks, and during question time was subjected to invective, such as the question, “I fuck men, I can find the prostate. Why can’t you find the clit?”
Apparently, when one of the school’s diversity deans arrived to “restore order,” she ended up criticizing the judge, while other administrators failed to tell protesting students to allow the judge to speak without being interrupted.
Student members of the Federalist Society were further subjected to a name and shame campaign, and allegedly “encircled” and abused at the event after federal marshals escorted the judge away.
The judge later remarked, “Don’t feel sorry for me. I’m a life-tenured federal judge. What outrages me is that these kids are being treated like dog shit by fellow students and administrators.”
On March 11, the Dean of the law school, Jenny Martinez, and the University President, Marc Tessier-Lavigne, sent a written apology to the judge:
We are very clear with our students that, given our commitment to free expression, if there are speakers they disagree with, they are welcome to exercise their right to protest but not to disrupt the proceedings. Our disruption policy states that students are not allowed to “prevent the effective carrying out” of a “public event” whether by heckling or other forms of interruption.
In addition, staff members who should have enforced university policies failed to do so, and instead intervened in inappropriate ways that are not aligned with the university’s commitment to free speech.
Dean Martinez followed that up with an email to alumni clarifying the law school’s stance on free speech.
In response to the apology, “hundreds of student protestors wearing masks and all-black clothing lined the hallways outside Stanford Law School Dean Jenny Martinez’s classroom” where she was teaching a con law class. She “arrived to find her whiteboard covered in fliers ridiculing Duncan and defending those who disrupted his speech. The fliers echoed the opinion of student activists and some administrators who claimed hecklers derailing Duncan’s talk was a form of free speech.”
“They gave us weird looks if we didn’t wear black” and join the crowd, first-year law student Luke Schumacher said. “It didn’t feel like the inclusive, belonging atmosphere that the DEI office claims to be creating.”
As a law school alumnus, I found this behavior incredibly embarrassing.
You only have to flip the roles to highlight how ridiculous it is. What if it were a left-leaning circuit judge being yelled at and insulted by a motivated group of right-leaning students? Would the same progressive students who yelled down Judge Duncan support the right’s right to do so then? I doubt it.
I am not familiar with the judge’s jurisprudence, but to be clear, with respect to the viewpoints of his that were reported by the media, I do not agree with them. But that should not matter here.
I can’t think of any other country which has a more expansive right to free speech than the U.S., and it is a fundamental enough right that it is enshrined in the constitution. However, if you seek to wield that right, you wield a double-edged sword. The same right that allows anyone to speak out on political topics without fear of government prosecution, allows other people to picket (at a distance) the funerals of gay murder victims with hate speech. But that is kind of the point. As a result, censorship is something that runs contrary to free speech values, and not letting someone talk by shouting over them en masse is a form of censorship. And, at some point, that kind of disruption can cross the line into unlawful speech—harassment, threats, slander, and the like.
Stanford is a private university and is not legally required to uphold free speech values. However, these values share much in common with the notion of academic freedom, and so it is unsurprising when Dean Martinez writes, “Freedom of speech is a bedrock principle for our community at SLS, the university, and our democratic society. … The way the event with Judge Duncan unfolded was not aligned with our institutional commitment to freedom of speech.”
It’s not clear in the reporting whether the protesters were law school students, or students from other parts of the university (events like these are normally open to all to attend). If they are law school students, what are they going to do when they become lawyers and get in front of a judge they disagree vehemently with, but still need to present a case to?
(Sidenote: Interestingly, unlike the U.S., a few countries like England and Australia, practice the “cab-rank rule” which obliges barristers to accept work from any client as long as they are competent enough to handle it, and regardless of any personal distaste the barrister may have for their client’s reputation, character, etc. “Without the cab-rank rule, an unpopular person might not get legal representation; barristers who acted for them might be criticized for doing so.” So in these countries, you not only need to have the ability to present a case respectfully in front of a judge you may personally hate, but you may also need to do it on behalf of a client you find repugnant. Not easy but, in my opinion, an important part of the justice system.)
Further Observations
Last week’s newsletter about SVB produced the highest number of views out of all my past newsletters. The drama continued this week, with regional banks under pressure. One of the most notable among these banks is First Republic, a San Francisco-based bank that serves a lot of high net worth individuals. First Republic has been experiencing an outflow of deposits which has led to efforts to shore up its balance sheet. In addition to obtaining a $70 billion credit line, a consortium of large banks deposited $30 billion on Thursday. First Republic was reportedly also looking for an acquiror. However, those efforts failed to calm the markets, and the stock closed down for the week, reflecting skepticism that First Republic will be able to weather the storm without going into receivership.
On the other side of the Atlantic, UBS has agreed to buy Credit Suisse for about $3.2 billion in an all stock deal which is expected to close by the end of this year. That’s 0.50 Swiss francs per share, which is about a quarter of CS’ stock price at market close on Friday.
Everything Everywhere All at Once won seven Oscars last Sunday. Unusually, EEAAO took out most of the top shelf awards, including Best Picture, Best Director, and three acting awards, despite being a sci-fi flick. Also unusual was that two Asians from the movie landed two of the acting awards: Michelle Yeoh won Best Actress in a Leading Role, and Ke Huy Quan won Best Actor in a Supporting Role. (Jamie Lee Curtis landed the award for Best Actress in a Supporting Role.) Yeoh is the first Asian winner of her award in Oscars history. Harrison Ford presented the awards, which was a nice touch seeing that Ke Huy Quan last appeared on screen with him in Temple of Doom as Short Round. EEAAO is an absurdist film that I found difficult to follow at times, but it’s quite a spectacle with some memorable scenes, including one featuring butt plugs which people are doing their best to sit on.
Strong winds caused another power outage at our home on Tuesday. It lasted 12 hours for us, but 48 hours for our kids’ preschool. Due to the recent rains saturating the ground, a lot of large trees were uprooted, leading to widespread blackouts throughout the Bay Area. We had to spend a night at a hotel again.
In other news, Tesla has finally started selling its Powerwall on a standalone basis again. Due to supply constraints over the last couple of years, Tesla would only sell Powerwalls bundled with solar panels. The recent blackouts have pushed us towards buying a pair.
Never Split the Difference (Chris Voss) A very interesting book written by a former hostage negotiator for the FBI. It highlights the shortcomings of a more traditional “principled” approach to negotiation, where rationality rules the day, and focuses more on the emotional and human aspects of negotiation. Voss asserts that compromising (”splitting the difference”) is a cheap way out that often leads to sub-optimal results for both parties. Sometimes there’s a way to get all of what you want, even when it appears you have little or no leverage, and without blowing up the relationship.
Hotels
Residence Inn by Marriott San Mateo – San Francisco Airport (San Mateo) Unfortunately, the nearer (and nicer) Residence Inn we stayed at during the last power outage was all booked out. This hotel is older, but still pretty well equipped and pretty good to work from. We got upgraded to a two bedroom, two bathroom suite split over two levels.
Charts, Images & Videos
On Twitter
Danger! Workers are doing too well! Call the Fed to shut that down! A conversation with former Treasury Secretary Larry Summers. Watch the full interview in our latest episode, now streaming on @appletvplus. pic.twitter.com/B6GtO0QLnw
— The Problem With Jon Stewart (@TheProblem) March 17, 2023
You guys know what happened to the stock market the last two times this happened? pic.twitter.com/j0GvICdBB6
1/10 The USG response has likely stemmed contagion. However, $SIVB saga has effectively forced the mkt to price the entire Fed Funds rate into the funding cost of the regional banking system. An acceleration in lending contraction is here.
Silicon Valley Bank is, relatively speaking, just down the road from me. As one the top 20 largest banks in the U.S., it is the banker to half of the startup industry but, fortuitously, not to my employer.
At the start of this week, SVB held about $170 billion of deposits from its customers. On Thursday, it fell victim to a bank run. SVB’s customers, within the space of about 24 hours, withdrew $40 billion—a quarter of its deposit book. This is a tremendous amount, and SVB did not have enough cash on hand. In fact, at the end of the day, it had a cash shortfall of almost $1 billion dollars. When a company is unable to pay its debts as and when they fall due (and on Thursday, $40 billion suddenly fell due), the company is considered insolvent and cannot continue business as usual.
On Friday, SVB was placed into receivership. A federal government agency called the Federal Deposit Insurance Corporation (FDIC), took over management of SVB and immediately closed it for business. Anyone still with money in SVB was now unable to get it out. “Anyone” turns out to be mostly startups, who are now facing an uncertain and very stressful few days.
But how did we end up here? Why did customers suddenly want to pull out $40 billion? And if took in $160 billion in deposits, why did they have not enough cash to pay $40 billion back?
What happened?
We don’t normally think about things in this way, but a deposit in a regular bank account is basically a loan to the bank that you can ask the bank to repay at any time (which essentially happens when you go to an ATM and withdraw cash, or ask Venmo to send money from your bank account to a friend). In exchange for lending money to the bank, they pay you interest (normally). Banks use your money to make money. Typically, this is done by lending those deposits to other people, at higher interest rates. So, for example, you might lend the bank $100,000 and they pay you 1% interest, but then someone else might borrow that $100,000 from the bank to buy a house (i.e. a mortgage loan) and pay the bank 3% interest. They pocket the 2% difference.
But the loans that banks make aren’t “on demand”. If you have a 30 year mortgage, you only need to repay a certain amount, plus interest, each month. The bank normally can’t force you to pay more than that. On the other hand, the money you lend to the bank in a regular savings account is “on demand”. This is sometimes referred to as “borrow short and lend long” and is just how banks work.
So, given that timing mismatch, how can the bank lend any money out? After all, it’s no good if you go to the bank one day and want your $100,000 back, only to be told “sorry, we lent your money to someone else and we have to wait 30 years before we get it all back”.
Enter “fractional reserve banking”. In reality, people rarely ask for all their money back at once, and never does everyone ask for all their money back at once, so banks only need to hold back a fraction of their deposits as cash, and can lend the rest of it out (or invest it in other things that are expected to produce a positive return). The fraction that banks need to hold in reserve is fittingly called the reserve requirement, and is set by banking regulations.
There are situations in which unusually high amounts of withdrawals may exhaust a bank’s reserves, but there are usually also facilities available under which banks can borrow money (typically from other banks) on a short-term basis to fill any holes while they scramble to convert their other assets (loans and investments) back to cash.
SVB was in a slightly different situation, but the basic principles are the same. The main difference is that their client base is heavily composed of tech startups. Most tech startups are not profitable or cash flow positive, so they finance their operations by raising equity financing (giving up a piece of the company in exchange for money), rather than debt financing (paying interest in exchange for money). Missing an interest payment on a loan can be deleterious, so when you’re not reliably making money as a startup, debt can be dangerous and is usually avoided. As a result, SVB didn’t have a lot of avenues for lending out the money it had received from its customers to other customers, so it needed to find another place to invest that money to earn a return.
For this, SVB invested a lot in debt in the form of U.S. treasury bonds and mortgage backed securities. When you buy a U.S. treasury bond, you are lending the U.S. government money, and they pay you interest. Treasuries are considered “risk free” in the sense that the U.S. government will always be able to pay you back. They can do this because they can just print money, if they need to. (Let’s leave to one side for now the game of chicken that politicians play every few years with the debt limit.) So from a creditworthiness perspective, treasuries are a very conservative investment vehicle. They are also a very liquid asset, which means there is a deep and active market that lets you buy and sell a lot of bonds quickly.
Because the short-term interest rates have been near zero for so long, SVB decided to invest in $90 billion worth of longer-term bonds that returned a little less than 2% of interest per year, and the full amount of principal after several years.
During the pandemic years, investment in tech startups blossomed, with equity financing pouring into companies at ever increasing valuations. Consequently, because of how concentrated SVB’s client base is in tech startups, their deposits trebled from about $60B at the start of 2020 to almost $200B just a couple years later.
In 2022, after over a decade of near-zero interest rates, rates began rising sharply, to around 5% today. SVB started to find itself having to pay more interest on its deposits, increasing the need for SVB to earn a return on all that money that its customers had lent it. However, most of its money was locked up in those long-term bonds, which was one problem.
The other problem, is that due to increasing rates, the funding environment for startups tightened right up—instead of investing in startups, more people were now investing in treasuries, which were yielding more than they had for over a decade (and remember, treasuries, unlike startup investments, are considered risk free). On the other hand, tech company valuations were getting slashed. This meant that as startups spent their money, no new funding was coming in to replace it. SVB’s deposits started to fall by billions of dollars as startups withdrew money to pay employees and vendors.
SVB needed to start converting some of its investments back to cash so that it could pay those customer withdrawals. Here’s where the problem started.
Most of SVB’s assets were treasuries. If those treasuries are held to maturity, SVB gets all its money back. But if it needs the money now, SVB needs to sell those treasuries now. Unfortunately, if SVB paid $100 for a treasury bond that only pays $2 in interest a year, no one today is going to buy that bond for $100 because the U.S. government is currently issuing bonds that pay $5 in interest. So if SVB sells those bonds, they are going to have to sell them for something less than $100.
This was a problem for SVB, because let’s say it sold some bonds for 95% of what they bought them for. Accounting rules require SVB to consider that its entire bond portfolio is now only worth 95% of its original value. For a $90 billion portfolio, that’s a $4.5 billion decrease. In reality, it’s reported that the bond portfolio had actually lost $15 billion in value. So if they sold some of those bonds, they would have a massive $15 billion hole in their assets that they’d have to plug somehow (remember, that’s $15 billion they no longer have to cover the deposits they’ve taken in). So those bonds were effectively untouchable in the short term.
Instead, SVB sold substantially all of its other investments for cash—$21 billion worth—it also tapped out some other lines of credit it had. As a forced seller, it incurred a $1.8 billion loss on the sale because those investments had declined in value. To plug that hole, SVB tried to do what all of its startup clients do—raise $1.75 billion equity financing. In the press release for the equity raise, the $1.8 billion dollar loss is mentioned in the last paragraph, almost as an afterthought.
People noticed, and this news spooked people. People started to wonder why SVB decided to liquidate $21 billion at a significant loss, and rumors started to fly about whether SVB was in trouble.
Bank Run
Silicon Valley is a pretty interconnected community and news spreads fast. For example, my CEO was plugged into his CEO and VC network and hearing what was going down. Our head of finance was talking to other heads of finance at peer companies. I was reading buzz from a mailing list with hundreds of head of legal on it. Word started circulating that companies were getting their money out of SVB, just in case. It became an echo chamber.
The other thing about having tech startups as clients is that they are tech experts, not finance experts. A large number of tech startups are run by talented under-35 founders who have not experienced a financial crisis in their professional lives, nor are they finance experts. As a result, they logically turned to their VCs for advice on what to do when the rumors started. After all, VCs are “the money guys” and they should know much more about financial management since that’s the industry they effectively operate in. So when one VC says “get your money out,” that causes a whole bunch of their portfolio companies to do just that.
Having seen how fast things unravelled in 2008 (“Bear Stearns is fine!”), my initial reaction to hearing the news was: Get your money out of SVB right fuckingNOW… if you can. As in, drop whatever you’re doing and get those wire instructions in. If it’s nothing, you can always move the money back.
If you didn’t have a second bank account, or you had a loan with SVB that contractually required you to keep your cash with them, things got a bit trickier, and you then had to make calls like whether to move the cash into a founder’s personal bank account, or ignore your loan covenants, and then worry about any legal ramifications afterwards.
The next morning, and $40 billion in withdrawal requests later, SVB was dead. The FDIC announced that SVB was both insolvent and failing its regulatory liquidity requirements.
There has been some blowback against some VCs for fanning the flames of a bank run that might have been avoidable, but I don’t think VCs are to blame here. As a company, you have to look out for your own employees and business and, in this case, taking your money out if you could was the right call. If it’s a false alarm, there’s little downside. But if it’s real, then you don’t want to be stuck in a tough place… especially if it was avoidable. The herd mentality is a powerful driver of financial markets and you want to at least be part of the stampede—not be crushed by it.
What now?
Through the FDIC, the U.S. government provides deposit insurance at all FDIC-insured banks. If a bank collapses, the FDIC will ensure that depositors will be able to get at least $250,000 of their funds back. (This limit used to be $100,000 but was raised after 2008 Great Financial Crisis.) This is very helpful for the average person, who is likely to have less than $250,000 cash lying around in a bank account. It is not so helpful for a company, that is likely to have much more than that. Apparently, about 96% of SVB depositors were not fully covered by FDIC insurance, compared to about 38% at Bank of America.
This insurance kicks in very quickly. On Friday, the FDIC created a new bank called the Deposit Insurance National Bank of Santa Clara (DINB). The insured portion of all SVB bank accounts was then transferred to the new bank, and depositors will have access to those new bank accounts on Monday. The uninsured portion of those bank accounts (anything over $250K per depositor) was then effectively frozen, with the FDIC issuing a “receivership certificate” to each depositor that represents an unsecured claim on the remaining assets of SVB up to the amount of the uninsured funds.
Next, the FDIC’s job will be to sell off SVB in a way that maximizes the money they receive. That money is then distributed to a list of people, starting with secured creditors, then depositors, then other unsecured creditors, then subordinated debt holders, then anything remaining goes to SVB’s stockholders.
As the FDIC sells off SVB, it will issue a dividend to receivership certificate holders. It’s rumored that the FDIC has been hard at work flogging off tens of billions of dollars’ worth of SVB’s assets and will issue an “advance dividend” of about 50% of the value of a certificate sometime in the next week.
The best outcome now is for another bank with a strong enough balance sheet to buy SVB and assume all the deposits in one fell swoop, which will allow accounts to be unfrozen. I think that is a likely outcome. If that doesn’t happen, then SVB will be sold off in pieces, and uninsured depositors will get their money back over time. I think that depositors will get most, if not all, of their money back, but it will take months, or even years.
In the meantime, the timing uncertainty and inability to access funds is incredibly stressful to affected startups. Payroll is due next week. Failure to pay wages is one of the things that can “pierce the corporate veil”, meaning that liability for that failure spills beyond the company, and may impact officers, directors and stockholders personally. However, one would think that if employees get paid a few days late, they’re going to be understanding and not litigious.
This weekend, startups are trying to find sources of immediate-term funding, ranging from loans from VCs, bridge loans, credit cards, and selling their receivership claims at a discount to opportunistic investors.
And teams of bankers, lawyers, and bureaucrats are spending a sleepless weekend trying to figure out what to do with SVB before the markets open on Monday.
I think the majority of SVB startups will be fine at the end of the day. There may be a severe liquidity issue for startups with short runways (e.g. if you had a 12 month runway and only get 50% of your funds back next week, you now have a 6 month runway and no idea when the remainder of the money will come back, and you’re now thinking about whether you need to lay off people to conserve cash).
[UPDATE: It’s over; startups can feel relief. 30 minutes before this post was scheduled to go out: ‘The Federal Reserve, Treasury and Federal Deposit Insurance Corporation announced in a joint statement that “depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.” The agencies also said that they would enact a “similar systemic risk exception for Signature Bank,” which the government disclosed was closed on Sunday by its state chartering authority.’ (per the New York Times) “Separately, the Federal Reserve announced that it was creating a new lending facility for the nation’s banks, designed to buttress them against financial risks caused by Friday’s collapse of SVB.” (per the Washington Post).]
Bail outs?
Several prominent VCs and investors have been screaming for the federal government to come in and backstop deposits in full—not just $250K. In other words, the government should effectively insure everything, and then get reimbursed as FDIC sells off SVB.
This is not a bailout of SVB. SVB is no more—its board and executive team will find themselves looking for new employment (if not already), and the equity holders will likely be wiped out.
But it is a bailout of depositors, and that has other people screaming that the U.S. taxpayer should not have to do that either. Let capitalism take its course. (And, as usual, the whole situation has been politicized.)
The issue is more nuanced than that. As I mentioned above, although depositing money at a bank is essentially lending the bank money (and therefore a form of investment), people don’t really see it like that. And you’re not really thinking that the 16th largest bank in the U.S., which has been around for 40 years and is regulated, is a credit risk. The average person on the street certainly isn’t going to be thinking about that. They’re just looking for a place to put money that isn’t under their mattress. During my time in the U.S., I have had personal bank accounts at a lot of different financial institutions (more than half a dozen), and creditworthiness was never something that crossed my mind.
So is it fair or desirable that depositors should suffer—particularly when what we are talking about here are small innovative businesses that employ thousands of people between them?
But then should we just make FDIC insurance unlimited for everyone going forward? If not, why not?
Some suggest that a failure by the government to backstop depositors here will catalyze a chain reaction that leads to catastrophic bank runs at other (small) banks. The argument goes that why would anyone put money in a smaller bank that is at risk of a bank run? People will just move money into the biggest 4 banks in the U.S., which will cause further bank runs, kill small banks, and lead to more concentration and less competition in the banking industry, which is bad for everyone. I’m not very convinced by this argument. I think we are in a specific situation exacerbated by the uniquely concentrated customer base that SVB had (only 3% retail clients!) which produced a high proportion of uninsured deposits.
This was also a liquidity issue, not a situation where SVB plowed billions into FTX stock that is now worthless and they now can’t cover the hole. SVB apparently has enough assets to cover its deposit liabilities—it just needs time to sell them off. People probably aren’t going to lose a lot of money, unlike when your crypto exchange goes belly up.
As for the question why anyone will now deposit in small banks if there’s no backstop—in most banks, the existing backstop covers most depositors. Secondly, why do people bank with smaller banks today? Because their product is positively differentiated in various ways. I’m skeptical that the perception of a potential threat of a bank run happening to a smaller bank is going to outweigh all the other reasons that smaller banks exist in a way that leads to an existential crisis for them. But let’s see what happens when the markets open on Monday.
Another thing that is clear to me is that we now have a generation of workers who have been exposed to a financial crisis for the first time. To be sure, it’s mostly localized to tech startups (for now), but for almost 15 years now, money has been cheap and free-flowing and the last 9 months have been a huge shock to the system. It will be intriguing to see how these interesting times shape the psyche of Gen Z and younger millennials, just like how the financial habits of the Silent Generation were shaped for a lifetime after growing up through the Great Depression.
More to come
I still think the worst is yet to come for the economy as a whole. If interest rates are sustained at current levels (and it’s starting to look that way, as employment is still strong and inflation remains elevated), we’ll start to see them bite into the parts of the economy that are the most sensitive to rate rises, and that will cause a domino effect. I’m not sure where that is, but I could see, for example, companies that have maturing loans getting into trouble when they have to refinance at much higher market rates. Or unrealized losses that bondholders being forced to be realized due to liquidity needs.
If you spend much time on AI twitter, you might have seen this tentacle monster hanging around. But what is it, and what does it have to do with ChatGPT?
It's kind of a long story. But it's worth it! It even ends with cake 🍰
The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.
The gov’t has about 48 hours to fix a-soon-to-be-irreversible mistake. By allowing @SVB_Financial to fail without protecting all depositors, the world has woken up to what an uninsured deposit is — an unsecured illiquid claim on a failed bank. Absent @jpmorgan@citi or… https://t.co/SqdkFK7Fld
Warren Buffett’s annual shareholder letter was published as part of Berkshire Hathaway’s annual report last week. This year’s was quite brief, but as usual, very accessible and a repeated reminder of the simple themes that have served him well over the decades.
After the growthy period of 2019-2021, Berkshire returned to outperforming the S&P index, returning 4.0% in a year where the market fell 18.1%.
“We are understanding about business mistakes; our tolerance for personal misconduct is zero.”
Berkshire buys businesses and also invests in public companies with the expectation of holding each indefinitely and therefore looks for enduring businesses with trustworthy managers. He notes that private, controlled businesses are almost never available at bargain valuations.
He notes that they make, on average, one “truly good” decision every 5 years, and that the performance of their portfolio of businesses includes “a large group that are marginal” but many that are “very good” and a few that are “truly extraordinary”.
For example, he highlights the performance of a 28-year holding of Coca-Cola. Cost base was $1.3B. As of 2022, it threw of $704M in cash dividends (53% annual yield on the original investment!) with a market value of $25B (19x capital gain).Put another way, if my parents had invested $100k in Coke when I was in primary school, that investment would today be almost $2M and generating $53k in dividends. Makes me think about what I should do for my kids to leverage the power of compounding. They are each currently, as Morgan Housel puts it, “time billionaires”.
Last year, Berkshire acquired another property-casualty insurer, growing its insurance float from $147B to $164M (the premiums it holds).
Berkshire holds a “boatload of cash and U.S. Treasury bills” and avoids behavior that could result in uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses. Seems like a good personal approach too.
He rails against the politicization of stock buybacks. As a pure matter of mathematics, stock buybacks, when performed at a good (undervalued) price, are beneficial to all remaining shareholders.
His formula: retaining earnings in its businesses (Berkshire doesn’t pay dividends) + compounding + avoiding major mistakes + what he calls the American Tailwind: “America would have done fine withour Berkshire. The reverse is not true.”
Berkshire’s annual corporate tax bill of $31B is 0.1% of the entire American tax base.
He shares a bullet point list of some things Charlie Munger said on a podcast, including the value of being a patient, long-term investor, the dangers of leverage in wealth destruction, that you “don’t need to own a lot of things to get rich”, and that investing requires adapting as the world changes.
In reference to Charlie Munger: “Find a very smart high-grade partner — preferably slightly older than you — and then listen very carefully to what he says.”
Phones at Work
When I was younger, I generally disliked talking on the phone (there was a measure of anxiety attached to it), so the advent of SMS, emails, and IMs felt like a blessing to me, and more so as the younger generations pushed adoption of that socially, and then in the workplace. However, especially in tech workplaces, I now find myself missing phone calls.
To contact someone now, people typically reach out via Slack and then wait. Or schedule some time on their calendar and then wait. Or if it’s really urgent, they’ll send a text and then wait. It’s less intrusive, but also there’s no way to guarantee a quick answer for small things — even if the person is completely available, they just might not see your message for a while. And for a lot of these calls you simply don’t need video. You just need to get some shit done.
When I was a junior lawyer at a firm, we had these Cisco IP phones on our desk. People would just dial each other up by punching in 4 digit extensions. It was spontaneous, marvelously tactile, and it wasn’t a big deal. If the other person was unavailable (in a meeting, on another call, or just under the gun getting something out), they would ignore the call or send it to voicemail. (And if it was super urgent and you weren’t answering, they would physically show up at your door.) No one really worried about interrupting anyone. Clients would call out of the blue as well.
For a period I had an office next door to my supervising partner (I still remember his 4-digit extension, 15 years on), and he would still call me despite the physical proximity. I was thankful that he didn’t scream through the wall, even though that would have been marginally quicker.
These calls were a great way to deal with things in a minute that can now take quite a lot of minutes and relative effort to resolve over chat. Also, it’s a great way to ask a bunch of questions in a way that feels natural but, when done over a textual medium, can feel interrogational and even aggressive.
No one does this anymore, and I think you lose a valuable communication method and tool.
Further Observations
This week I learned that the U.S. Supreme Court opens each term with the pronouncement “Oyez, oyez, oyez!” Oyez is an Anglo-Norman word that means “Hear Ye!” It’s kind of weird that it took me so long to learn that given that I work in law and also started a blog called Hear Ye! over 20 years ago.
A 15-lawyer Canadian litigation law firm tried the 4-day work week for 2 years and published its results (Wednesday was their off day). They are pragmatic and interesting:
“Sometimes you’d have to work 5, 6, or 7 days a week and that is OK; that’s just life.” In other words, at a normal law firm you sometimes have to work weekends. In this case, the weekend is 3 days long, and you may have to work weekends. Particularly since clients expect availability and the courts have their own schedules. “In my interviews with our lawyers, they said they have had to work at least 1 hour or more on over 50% of Wednesdays.”
“You can attract the wrong crowd by advertising 4-day work weeks and need to get your message right and clear.” They put in a 3 month probationary period that requires new hires to work 5 days in the office until they get an idea of their work ethic.
“We have way, way less turnover.” This makes sense. And this suggests people chuck sickies quite often: “Our sick day requests have been reduced by over 80%.”
They still managed to grow revenue over that period (more than 2x over 2 years).
Drive to Survive (Season 5) “It’s not a documentary. It’s closer to Top Gun than a documentary.” —Toto Wolff. Great way to whet the appetite for the new F1 season, which started this week!
There's an easy way to measure Google's moral temperature at any given time: how closely the ads resemble the search results. pic.twitter.com/QZ15aOa0Ak
In a previous newsletter, I mentioned we have a lengthy power outage on average once per quarter. That’s not an exaggeration. This week, we endured our longest outage yet.
At about 1pm on Tuesday, our power went out and didn’t come back until Thursday evening — more than 50 hours later. It all happened as unusual weather arrived in Bay Area, with several inches of snow falling at altitudes of as low as 250 feet. It basically never snows in the Bay Area. Less than 5 miles away in Woodside, the scene looked like this:
Stephen Lam/The Chronicle
We didn’t get snow, but our area was buffeted by gale force winds that uprooted large trees, crushing power lines and transformers.
Within a few hours, power was out across swathes of Redwood City, Woodside, Atherton, Menlo Park, Palo Alto, East Palo Alto, and Stanford.
We ended up staying in hotels for 3 nights. The hotels were filled with locals — mostly families with young children and older people carting along oxygen containers.
At the first hotel, a Holiday Inn, we were offered a welcome bag of snacks at check in. “The robot will deliver them to your door,” the guy at the counter said, pointing to what looked like a trash can on wheels in the corner. I won’t lie — it was the most Silicon Valley thing ever, and I was more excited about it than was rational.
Some time after we got settled into the room, we got a call from the front desk. “The robot is outside your door.” I opened the door and there sat the robot. It did nothing. The screen on top of the robot featured two blinking eyes, with a speech bubble above in which was written “None.”
We stared at each other for a bit. After poking and prodding at the thing, I finally determined it wasn’t working, and called up the front desk. They fiddled with a few things on their end to no avail.
“We’re going to reset it and try again.”
Reset meant that someone had to come up to our room and manually wheel the robot back to its base. A few minutes later, the robot showed up at our door again. The result was not different.
“Again?!” an exasperated voice from the front desk said after I called them. And once again, they had to “reset” the robot.
Finally, the front desk clerk showed up at our door, his arms overflowing with snacks and beverages. “Sorry about that — we’re having uh, technical issues. I got you some extra things.”
Gradually, the power started to come back on in various places. We noticed that power in the most affluent areas was restored first — Atherton, Woodside, Palo Alto — while Redwood City and East Palo Alto were out of luck for hours longer. Maybe a coincidence, but we have our suspicions.
The most annoying part of the outage was all the food we had to throw out from our fridge and freezer.
The Rewriting of Roald
I entered Year 3 as a 7 year old, and some of the classroom memories I retained from that year include:
My teacher read to us The Hobbit and The Lion, The Witch and The Wardrobe, which was the first time I was exposed to fantasy and set in motion a lifelong affinity for that genre.
He read to us The Great Piratical Rumbustification and proceeded to put the last three words of that title on the next week’s spelling test.
He read to us Charlie and the Chocolate Factory, my first Roald Dahl book. During the course of primary school, I followed up by reading most of the rest of his novels, as well as his autobiographical Boy and Going Solo.
He was telling us about what to bring to an excursion to the mangroves of the newly-opened Bicentennial Park and mentioned we should bring “several drinks”. I thought that meant seven drinks, which seemed like quite a lot to me. I put my hand up. “Sir, do we have to bring several drinks?” He looked confused and said, “Well, you don’t need to but I would recommend you do.” I was satisfied that I wouldn’t get into trouble if I didn’t bring seven poppers and it was not until much later that I learned what “several” really meant.
In hindsight, many of those memories involved books, which brings us to the topic of Roald Dahl. Dahl is best known for his children’s novels, although he also had a repetoire of adult writing. His books were formative to me growing up. Last week, it was reported that Dahl’s books would be rewritten to remove language “now deemed too offensive”.
The laundry list of changes includes describing Augustus Gloop as “enormous” instead of “fat” (?!), removing many instances of “white” and “black” as descriptors in non-racial contexts (such as where you might describe a “face going white” for when the blood drains from the face in fright), and excising any mention of Joseph Conrad or Rudyard Kipling and replacing them with Jane Austen and John Steinbeck. One can only surmise that the associations of Conrad and Kipling with colonialism have been deemed too painful to tolerate.
The changes are reminiscent of a “Harmful Language” list that was published by a group within Stanford University. As that list would have it, words like “brave”, “tribe”, “abort”, “stupid”, “victim”, “immigration”, “submit” and “American” were considered harmful. The list was widely pilloried, and the university swiftly had it removed.
Online, it would appear that the changes to Dahl’s books are facing a similar backlash. This Reddit post is basically filled with people who are screaming “nobody asked for this”. In fact, one of the only negative comments I came across online was a one-star review that someone left 4 years ago for a 16-book collection of Dahl’s writings sold by Costco: “I bought this excited to read Charlie and the Chocolate Factory and the rest of the books with my kids. Then we got into the Great Glass Elevator, which has a chapter devoted to totally worn out racist tropes that made me stop reading.”
They’re not wrong about the racist tropes. Check out this passage from Great Glass Elevator:
The President threw the phone across the room at the Postmaster General. It hit him in the stomach. ‘What’s the matter with this thing?’ shouted the President. ‘It is very difficult to phone people in China, Mr President,’ said the Postmaster General. ‘The country’s so full of Wings and Wongs, every time you wing you get the wong number.’ ‘You’re not kidding,’ said the President.
…
The President again picked up the receiver. ‘Gleetings, honourable Mr Plesident,’ said a soft faraway voice. ‘Here is Assistant-Plemier Chu-On-Dat speaking. How can I do for you?’ ‘Knock-Knock.’ said the President. ‘Who der?’ ‘Ginger.’ ‘Ginger who?’ ‘Ginger yourself much when you fell off the Great Wall of China?’ said the President. ‘Okay, Chu-On-Dat. Let me speak to Premier How-Yu-Bin.’ ‘Much regret Plemier How-Yu-Bin not here just this second, Mr. Plesident.’ ‘Where is he?’ ‘He outside mending a puncture on his bicycle.’ ‘Oh no he isn’t,’ said the President. ‘You can’t fool me, you crafty old mandarin!’
It just goes on and on, doesn’t it?
As a child of the 80s of oriental persuasion, I am acutely aware of racism and being bullied in the playground for how my eyes looked as a “fucking ching chong chinaman”.
But I don’t think rewriting old works is the right thing to do. This is the progressive equivalent of censorship, and not much better than the troubling wave of book banning in more conservative parts of America.
History can be a great teacher, and only if you are aware of what happened in the past can you learn from it. Changing Dahl’s words is kind of like attempting to avoid history because it’s too painful, and seems similar in vein to avoiding teaching about the Holocaust in school.
Older books are products of their times and make good discussion points. I think it’s better that a child stumbles across the phrase “queer ramshackle house”, gets confused, and asks an adult how a house can be gay. That can spark a useful conversation.
It doesn’t seem much different to studying Shakespeare, where there are a lot of confusing, archaic words and phrases that high school students spend hours scratching their heads over. And I’m not sure that reading Shakespeare perpetuates the use of those dated terms.
I am far more fearful about what my kids will find online, than in a book from centuries past. I am more fearful about what text-generative AI might mean for critical thought and disinformation.
The other thing is, and this is perhaps controversial, is that there is a time and a place for ethnic stereotypes, and that is comedy. There’s a reason why Russell Peters’ jokes about Chinese and Indians (and everyone else) are so hilarious, and that we find Colin Jost reading out Michael Che’s jokes about black people funny. That comedy is only funny if you’re aware about those stereotypes in the first place.
I think the approach taken by Warner Bros. is the right one. For some of their older cartoons, they now display the following disclaimer at the start:
The cartoons you are about to see are products of their time. They may depict some of the ethnic and racial prejudices that were commonplace in American society. These depictions were wrong then and are wrong today. While the following does not represent the Warner Bros. view of today’s society, these cartoons are being presented as they were originally created, because to do otherwise would be the same as claiming these prejudices never existed.
Black Panther: Wakanda Forever (Disney+) I fell asleep midway through, so not that great. The first one was better. 2/5.
Only Murders in the Building (Season 2) This whodunnit series, featuring the unusual but endearing combination of Steve Martin, Martin Short, and Selena Gomez has really grown on us this season. It’s got a really random brand of humor that we like. We’re looking forward to Season 3, which is going to feature Meryl Streep and Paul Rudd. 4/5.
Hotels
Holiday Inn Redwood City (Redwood City, CA) Where we stayed for the first night. A standard, no frills hotel room. Clean and relatively comfortable.
Residence Inn Redwood City (San Carlos, CA) This place was surprisingly good, and actually a great place to stay if you are a business traveler. All rooms have a kitchen, two large tables, and are clean, spacious, and well appointed. There’s also a laundry on site. The breakfast is not bad.
On Twitter
THE banker of China IT industry. Fan and I started our careers about the same time. He was working for Morgan Stanley when we first met. We have been friends over 2 decades and watched the growth of each other https://t.co/47bn8mloWT
Put another way: nearly entire population of CA will be able to see snow from some vantage point later this week if they look in the right direction (i.e., toward the highest hills in vicinity). Snow remains very unlikely in CA's major cities, but it'll fall quite nearby. #CAwxhttps://t.co/m4PNoBtl0z
A Financial Times article reporting on the final days of FTX featured the following email that a partner from Sullivan & Cromwell, the law firm managing FTX’s bankruptcy proceedings, sent to SBF in an effort to get him to sign documents where he’d step down as CEO of FTX and allow FTX to file for bankruptcy.
EMAIL – NOV 10, 22:36 FROM: ANDY DIETDERICH TO: SAM BANKMAN-FRIED Can we please have an update? We have many people in NY and Delaware waiting to proceed. We have done the work we can without Sam’s signature. If Sam is not going to sign the instruction appointing Ray tonight, we will send people home and regroup in the morning. Australia has commenced voluntary proceedings and we can expect more shortly. If Sam is signing relatively promptly, we can stay around. Please let us know promptly if we should continue to wait. Andy
We now have learned just how “many people” from SullCrom were working on the matter and standing by. Per Coindesk: During a 19 day period from November 12 to 30, “A total of over 6,500 hours were worked by 32 partners, 85 associates and 34 nonlegal staff, the filing said. Hourly rates are as high as $2,165. The company said charges for senior staff already represent a discount, and the firm is seeking payment of only 80% of a $9.5 million total.”
The GC of FTX US is an ex-SullCrom partner, and while it may look a bit shady that he has given a ton of lucrative work to buddies at his old firm, this is actually an above-board and common practice for ex-law firm lawyers who go in-house (I have done this myself… but obviously not on this scale).
If you want to your son to be a partner at a Bay Area-headquartered law firm, you should name him Aaron Rubin:
In the 3 months after my son turned 2, his vocabulary exploded. He went from a smattering of single words to speaking 5-word sentences seemingly overnight. I found myself wondering whether the trajectory of our daughter’s speaking skills was as steep, but it’s actually really hard to remember. We thought it wasn’t, but when we pulled out videos, it turns out that she was pretty talkative at that age too. The takeaway is: take lots of videos of your children, including of random, seemingly inane moments.
The next generation of kids will be the first generation that will be able to see pictures of what their parents looked like during every single month of their lives. That’s kind of wild. My kids will only be able to see pictures of how I looked like every month of my life since my mid-20s, which I’m thankful for.
I have a recommended reading list for Artificial Intelligence, and it hasn't changed since 2019. I give this list to my grad students, but all of the articles are broadly accessible if you're interested. Very short 🧵.
Today @SECGov charged Kraken for the unregistered offer & sale of securities thru its staking-as-a-service program.
Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries must provide the proper disclosures & safeguards required by our laws.
Mostly random personal updates this week. Always so much work and so many household chores to catch up on after coming back from a vacation.
Air Travel Tips
Here are some international travel habits that I’ve developed over the years:
I fill up an empty Zojirushi water bottle with ice before I leave the house. It’s a very well-insulated flask — over a 24 hour period, the ice barely melts so you can take it through security because it’s not a liquid. Then, you can pour in water later on to melt some of the ice and get a cold drink.
I wear a long sleeved t-shirt onto planes. The cabin gets colder after take off, and it helps not having bare skin exposed to drafts. On the ground, cabins can get pretty warm if you’re somewhere hot and sunny. A light jacket that you have to take off is just one more item you have to juggle, so I prefer just being able to push up my t-shirt sleeves instead. Incidentally, U.S. airlines tend to keep cabins noticeably colder than Asian airlines.
My hands down favorite backpack is the MacPac Korora 16L. It’s compact with well thought-out compartments. There are two deep side pockets so water bottles don’t slip out and an easy-access zipped pocket at the top. Inside the main compartment, there’s a mesh divider and another pocket at the top that has slots for pens and a clip for hanging keys. It easily fits a 14” MacBook Pro in a sleeve, book, and jacket with room to spare. It’s been around the world with me several times — both on work and leisure trips — and has proven to be durable. It’s also water resistant.
I keep a phone charger cable and Airpods in the outside top pocket, and a backup battery and super compact Anker 65W 3-port USB-C + USB-A charger in the side pocket, together with a USB-C cable that has a dongle for converting one end to a lightning connector.
The only thing I would change is to remove the chest strap and buckles that are pretty useless.
We used to avoid checking in luggage if we could help it, but we can now no longer help it. Now we pack a light, empty duffle bag in our suitcase in case we need emergency extra space — such as when encountering a check-in agent that is insistent that the weight limit is 50 lbs and 52 lbs is completely unacceptable.
For the kids, we bought an inflatable footrest. It blows up to fill in the space in the footwell and becomes level with the seat. This lets the two of them sleep side by side across two seats each. When they’re awake, it helps provide a bit of an area to crawl around and reduces the amount of items that drop on the floor. Caution: some airlines don’t permit these because of purported safety reasons (we’ve been successful on American, Fiji Airways, and United, but not Air France).
Further Observations
I’ve been eyeing a weather station for years, so I was thrilled when I received an Ambient Weather one as a gift from my family last Christmas. We experience multiple long power outages each year, so I bought a probe thermometer that broadcasts data to the weather station and stuck it in the fridge to monitor the temperature. I figured it would be helpful when we were traveling so we don’t unknowingly come home to a fridge full of spoiled food. The weather station streams the data it collects online and sends text alerts when the temperature reaches certain thresholds (and we have a UPS for our internet equipment so the house stays connected for a couple hours even when the power is out).
Our fridge is set to 2°C and the temperature graph looks like this:
This is not the temperature profile I’d have expected. It never occurred to me that the fridge spends most of its time below 2°C, and sometimes below freezing. However, when you think about it for a minute, that’s the only way it could really work. The fridge doesn’t blow in air at the temperature it’s set at — it blows in really cold air at a fixed temperature and tries to average it out at the set temperature.
I contacted Amazon customer support recently after an order they had marked as having been successfully delivered actually hadn’t been delivered. It got weird:
Regarding the spate of layoffs in tech: what does it really mean when a CEO says they “take full responsibility” for over-hiring? Presumably it means that they are owning making the original decision that caused a bunch of people to then lose their jobs through no fault of their own? But we don’t really hear if there any real accountability or personal consequence to go with that responsibility… And what about the companies that go through multiple layoffs in succession?
We recently returned from a trip to Australia, my first in almost four years and the longest I’ve ever been away from it. It was also my kids’ first visit. Because of the age of our kids and jet lag, we set ourselves a modest goal of doing one thing a day. Apart from family, I only told like, 3 sets of friends that we were visiting Sydney, and even then we only managed to meet up with 2 of them. (Sorry everyone else — maybe next time!)
It was interesting seeing our kids meet their grandparents in person (for the first time ever for one of them), and fun watching them take in the sights of Sydney. Our hotel balcony had a nice view of the overseas passenger terminal at Circular Quay and watching massive cruise liners silently dock enthralled all of us early each morning.
We stayed at a hotel in the CBD for half of the trip, and my parents’ house for the other half. It was nostalgic taking my kids to the parks that I used to play in as a kid. Unfortunately, the one down the street from my parents’ house has been redone twice, each time ostensibly making the playground safer, but decidedly much less fun. Gone is the 3 metre-high straight metal slide, the flying fox, monkey bars, and swings on long chains that I loved to get height on. They have now been replaced with small, boring plastic things.
Sydney continues to grow. Lots of cranes dotted the CBD and the light rail system is now in full operation. We visited Barangaroo and walked through the lobby of the new Crown Casino building. The water park at Darling Harbour was a hit with the kids. Even the Circular Quay skyline has changed. When I used to work in Sydney, for a few months I had loan of a Senior Associate’s office with a thin window on the 57th floor that overlooked the harbour. There was an AMP building between us and the foreshore, but it was less than half the height of our building so the view was unobstructed. In the last couple of years, the AMP building has been extended, doubling in height and it now blocks some of those million dollar views.
For old time’s sake (and because my son loves trains), when relocating to my parents’ house, we took the train — the same route I used to take to and from uni. I felt like an old man reminiscing that back in those days, most of the trains weren’t air-conditioned, and there were no smartphones to occupy the time during the one hour journey.
The trip coincided with Chinese New Year, so we were fortunate to celebrate that with the grandparents and to see some of the festivities in Chinatown (that my daughter had only read about in books up until then).
Fiji
On the way back from Sydney, we experimented with breaking up the flight by stopping over in Fiji for a few days. We decided to stay at Nanuku Resort, mainly because it offered free childcare (one babysitter per child, available from 8am to 8pm!). Also, because it was on the same island as the international airport, we didn’t need to take another plane to get there. (However, the advertised 2 hour drive from the airport turned out to be closer to 3 hours.)
Nanuku is operated by Auberge Resorts, and some of their executives were visiting it when we were there, including its CEO. After finishing up a kayak ride, we bumped into the CEO who took the opportunity to ask why we picked Nanuku (childcare), how we had discovered it (Google + Hyatt partnership), and encourage us — several times — to “come again and tell our friends to visit too” (talk about grassroots marketing!). He asked where we were from, and it turns out that he had grown up in San Mateo (the next city over from us) and was now living in Marin. He happened to be on the same flight as us back to San Francisco. When we joined the immigration line in SFO, our kids were acting up for whatever reason and screaming. He passed us in the queue and joked: ”I bet you wish you were still at Nanuku!”
The staff at Nanuku were all super-friendly and welcoming. Attention to detail was a bit hit and miss, but everyone was well-intentioned which to me counts for a lot. (For example, most staff knew the names of our kids, but it was 50:50 whether they remembered that we needed a high chair at meals for our youngest. There’s only one restaurant on the property.)
The resort had a very relaxed atmosphere, which is exactly what we were looking for. We arrived a couple weeks after peak season, so the resort wasn’t busy and at times it felt empty (which is a good thing at places like these). We overheard the Auberge execs worrying about how occupancy in February was going to be even lower.
They have a decent beach that guests don’t seem to use, and offered a variety of free and paid activities. We (tried to) learn how to start a fire using wood, weave a basket out of a palm frond, and grill prawns using bamboo. We also paddled a kayak down a nearby river, and took a jetski out onto the ocean. Susanne snorkeled out to a nearby reef but the water was too choppy for me (the wind picks up mid-morning so you need to get out early).
We booked partially on Hyatt points (great value at only 30K a night), and partially through the Amex FHR program (which offers discounted rates and a free couples massage). We had a room with a spa out the front and an outdoors shower, which both we and the kids loved.
One of the few resorts where the rooms looked better in real life than the photos!
The flight timings from Fiji back to SFO are good — night departure, long enough to get close to a full night’s rest, and not much filler time on either side. Due to the time zone difference, you land around noon on the same date that you leave.
Further Observations
Going to be interesting to see how the whole affair with Adani turns out.
The Witcher: Blood Origins This 4-episode miniseries was a great way to whet the appetite for the next season of The Witcher, although Henry Cavill’s shoes will be tough to fill. It also stars Michelle Yeoh, who has had a great run as of late (unlike Henry Cavill).
Glass Onion Daniel Craig, playing a southern detective called Benoit Blanc, is a hoot in this thoroughly entertaining whodunnit.
Knives Out This is the first Benoit Blanc movie, but we only watched it after enjoying Glass Onion. Also highly watchable, but not as funny.
Charts, Images & Videos
Pandemic years aside, employment growth is gradual, and unemployment growth is sudden. We haven’t hit the “sudden” part of the current economic cycle yet.
Not a new one— But, I am partial to a good meme, especially when it ties one of my kids’ favorite movie characters together with an aviation factoid. 😄 pic.twitter.com/iqujcGthvc
One thing I miss from Sydney are thunderstorms. It may be a strange thing to miss, but one fond childhood memory I have was of the “southerly buster”. It’s a weather phenomenon that typically happens after a series of hot summer days — the temperature suddenly plummets, huge grey clouds roll in, the rain pelts down, and the sky puts on a dramatic show. I remember gazing out into our backyard as lightning danced in the sky and thunder literally shook the windows. (My father had also drilled it into me that if there was lightning around, I needed to immediately turn off the computer, lest a surge of electricity fry it.)
Thunderstorms don’t really exist in the Bay Area. I’ve been here for almost 15 years and I can count on one hand the number of times I remember hearing thunder. So when the Bay Area experienced a “storm” earlier this week — one that made the national news and saw weather warnings blanket the airwaves — there’s a reason I put storm in quotation marks. To be sure, there was rain and it got quite windy. But, objectively speaking, it was not that wild. I’ve been in rain so heavy that it hurts the skin, and experienced gale force winds that dim the lights. None of those things happened this week in our city. Yet, there was flooding, genuine danger to life, closed schools, and a weather-induced 3-hour blackout in our neighborhood. The Bay Area is just really fragile when it comes to inclement weather.
This week’s 🍿 news story was the vote for the Speakership of the House of Representatives. Kevin McCarthy finally got his gavel, at the cost of selling the last remnants of his soul. Seems like a pyrrhic victory to me, and it’s hard to see it inflicting anything but pain on the country when a small group of Republicans ends up holding everyone else hostage to their demands. And will their brinksmanship turn the prospect a federal debt default from the unthinkable into the possible?
Taking a break, so no newsletter for the next couple of weekends. Will resume in a couple of weeks!
Happy 2023! For the last couple of years, I’ve written a Year In Review post that is sent to friends and family. It contains a “What we remember personally” section, which is about personal events, and a “What we remember in the world” section. Below is the latter section from those writings.
The Economy. For the first time in about 13 years, the economy and the markets are deteriorating. For years I’ve believed that inflation was the main thing that was going to catalyze another recession, but I didn’t have a clue what might spark that inflation. At the start of this year, a confluence of factors such as the Ukraine invasion and supply chain shocks, have led to the highest inflation rates in 40 years, which in turn have led to the fastest series of interest rate rises in history.
When interest rates rise, equities become less attractive relative to other assets, and valuations fall. Accordingly, most of the market took a dump, with growth stocks (mostly tech companies) getting hit the worst.
Tech companies, suddenly confronted with an inability to continue raising funds at the same inflated valuations they previously received (or to raise funds at all), were now staring at their runway trying to figure out if they had enough cash to weather the storm. Some laid off employees by the thousands, and the focus moved from growing the top line at all costs, to getting to profitability at the least cost.
However, the market is not the economy, and we have this interesting situation where things feel bad and lots of techies are losing their jobs, but the economy actually isn’t in bad shape just yet. In the U.S. and Australia, for example, unemployment is currently still under 4%, which is pretty much the lowest it’s been for the last 20+ years. A lot of companies are simply reacting before the storm hits. This time, companies are trying to get ahead of it.
I think the real pain of a recession is yet to come. Obviously I could be wrong, but don’t see a soft landing on the cards when the Fed is spamming the interest rate increase button. Sudden changes don’t seem conducive to letting businesses adapt over time to changing conditions, and it presumes that the Fed won’t be late to react again, this time to cooling inflation.
It’s also going to be interesting to see what happens socially and to workplace culture if we do have some sort of economic crisis. The experiences you go through shape your perception of the world, and most people under 33 have not experienced a downturn in their working lives. It’s been halcyon days for a long time. Not knowing any other world, younger workers perhaps have come to take for granted job mobility, a seller’s market for employment, and that dips in the market are simply short-lived buying opportunities.
I have been through two economic downturns — graduating at the nadir of the dot com crash in the 2002, and again during the GFC in 2009. In 2009, the job market had completely dried up and I was proofreading documents for $13/hour and trawling for contract jobs on Craigslist (I actually found a couple) to make ends meet and try to maintain my U.S. visa status. I was down to about $600 in my bank account at one stage, sharing a 2-bedroom apartment with 3 other people. I always had a backup plan — returning to Australia and a job that I had taken a 3-year leave of absence from — but through that experience, I know how tough things can get in bad times and sometimes you just have to leave your ego at the door.
Housing affordability is another problem, and one problem has been swapped for another: record low interest rates pushed housing prices through the roof, making deposits difficult to afford for younger millennials and Gen Z. Now higher interest rates are pushing interest payments through the roof, while housing prices are still very elevated.
One thing this indicates is that there is no end in sight for the growing economic inequality between younger and older generations. I don’t know what this means exactly, but the trend is unsustainable and will eventually end in trouble if not reversed.
Roe v. Wade was overturned by Dobbs. In June, a precedent that stood for almost 50 years was overturned by the Supreme Court. The ruling split 6–3 along ideological lines (some would say party lines). It is impossible to overstate how deeply the court’s composition has and could impact the fabric of American society over the next generation. Let’s just say that for now we are relieved we live in California, but it’s a reminder of how quickly things can shift. Also, Ketanji Brown Jackson was appointed to the Supreme Court.
AI. One of the most notable technological developments in a while is the raft of consumer-accessible AI software that gained prominence this year: ChatGPT, DALL•E 2, Stable Diffusion, Midjourney, Jasper, Lensa, Notion AI, etc. Unlike web3 or the Metaverse, which are solutions in search of a problem, the utility and impact of these forms of AI are immediately understandable. I think these technologies will make the biggest impact on society since the shift from desktop to mobile a decade ago. The tech is already pretty eye-opening, and OpenAI is still to release GPT-4, which is rumored to be a couple orders of magnitude more powerful.
Queen Elizabeth II died on September 8, 2022. She was such a fixture in the world that it still feels weird that she’s gone and we have a King Charles III. Oh, and Liz Truss’ short reign as PM is kind of a footnote to this event. My wife points out that, remarkably, her Queen Margrethe is now the world’s only current female monarch. Margrethe II celebrated her golden jubilee (50 years on the throne) this year.
Scomo was voted out. In May, Australia held an election and voted Scott Morrison out. Not sad to see the departure of Scotty from Marketing who left his mark in Engadine.
Xi Jinping was elected to a new 5 year term. Xi Jinping was elected to an unprecedented third 5-year term, solidifying his autocratic grasp on power. However, cracks are starting to take their toll on China. One of the sad casualties through all this has been Hong Kong, which now seems like a shell of its former vibrant self.
November mid-term elections. I called this one wrong last year. I thought it would be a landslide, but it wasn’t and the Democrats even expanded their control of the Senate. The results gave us some hope here that Trumpism is on the wane. It was also the first U.S. federal election that I voted in.
The Metaverse. Lots of coverage about this, but I don’t see anyone of any generation scrambling to get on board the metaverse train. If there is a metaverse that takes traction, it ain’t going to be Meta’s — my prediction is that it will come from a gaming company. (Scott Galloway on the ~$1B a month Meta is spending: “Instead, spend the money on employee retention, and every workday at HQ raffle off an Airbus A380 (resale value: $50 million) to a lucky employee.” A380s are more expensive than that, but the underlying point is still valid.)
Elon Musk & Twitter. A morbidly entertaining saga. It will be interesting to see what comes of Twitter in 2023. Things are so random it’s tough to make a prediction here, but I don’t think Twitter is getting back to its $44B valuation in the next 5 years (if ever).
FTX blew up. I’ve written about this at length, but it’s been another morbidly entertaining story. I can’t wait to read Michael Lewis’ book and watch the movie.
Crypto winter. This year, the get rich quick scheme that perhaps many recent participants in the market hoped to capitalize on turned into a get poor quick scheme. I believe crypto is correlated with the larger market, and it will largely move in line with what happens to the economy next year (just more violently). And hopefully the sector picks up some regulation to protect more consumers from losing their shirts to bad actors.
Uvalde School Shooting. In America’s third deadliest school shooting, 19 students and 2 teachers died while police controversially waited for over an hour to engage the shooter, instead confronting parents who were trying to get in and save their kids.
Shinzo Abe was assassinated. Assassinations are always jarring news.
J-Lo and Ben Affleck got married. Not much to say here, but this was one of the main things Susie said she remembered from the year! Will Smith slapping Chris Rock at the Oscars, and Johnny Depp winning his defamation case against Amber Heard, rounds up other memorable celebrity events.
The Cosmic Cliffs, a region on the edge of the gigantic, gaseous Carina Nebula, as seen by Webb’s Near-Infrared Camera. Source: NASA, ESA, CSA, STScI
A close-up of the star Earendel (red arrow). At a co-moving distance of 28 billion light years, it’s the most distant individual star ever seen. Source: NASA/ESA/CSA/STScI
On Twitter
This runner exited a train, ran to the next stop, on got back on the same train pic.twitter.com/mk8PPynVqa
Merry Christmas! I hope you are enjoying a nice long holiday weekend with your friends and family. Just a short update this week. Next week I’m planning to do a Year In Review.
Sam Bankman-Fried is hosed. Earlier this week, he agreed to be extradited back to the States. Bail was set at $250M, which means that anyone who’s willing to post bail for him (i.e. his parents) will basically be bankrupted if he skips town. His co-founder Gary Wang and Alameda CEO Caroline Ellison both pleaded guilty to various criminal counts and are cooperating with authorities in their criminal and civil cases against SBF. More of his former associates are expected to flip. Hard to see how he doesn’t get put away for a long time.
Frozen: The Musical. We took our daughter to see this at the Orpheum (her first musical!). Frozen is a phenomenon and not easy source material to adapt for the stage, so I was curious to see how it would play out. The result is a musical that shines at moments, but otherwise lacks the dynamism of its animated compatriot. There are a variety of new songs that were created just for the musical (written by the original music writers), but none of them were memorable. It all felt like filler music, lacking any tunes that really catch. The performance of a new song called Hygge stuck in my mind, but I can’t recall the melody at all.
The most authentic response was probably looking at how our daughter reacted. Like probably every other child (and parent) in the audience, she has watched Frozen dozens of times, and has made us play the soundtrack in the car at least several hundred times (I have the Spotify stats to back that up). Our daughter was completely enthralled with the major set pieces: Do you want to build a snowman?, For the first time in forever, Love is an open door and, of course, Let it go. The way young Elsa and Anna were portrayed were a delight. But Frozenfront-loads all its big musical pieces, and as the second half dives deeper into a darker story, her attention started to wander. She seemed bored with the new songs and I wonder what was going through her mind when they replaced the cute rotund trolls with “hidden folk” — essentially wildlings in rags. I think they did the best that they could, but the movie is a tough act to follow!
Trivia: Frozen is set in Norway, but the movie’s is loosely based around Danish author Hans Christian Andersen’s The Snow Queen (Snedronningen).
Well that happened fast. Sam Bankman-Fried was arrested on Monday, the day after he said in a Twitter Space session, “I don’t think I’ll be arrested.” He’s been criminally indicted and slapped with a civil suit and he’s now being held in a nasty ass Bahamian prison awaiting extradition. Cluelessness or arrogance? How about both.
The World Cup is now over and what a final! It was a really enjoyable tournament with lots of memorable upsets (including, finally, one for Australia!) and a fairy tale ending for Argentina and Lionel Messi. Mbappe is only 23 and already has 12 world cup goals. Next time: The World Cup comes to North America!
Fantasy League final result: ended up squarely in the middle of pack, 7 out of 14. Some learnings:
It’s harder to get ahead in the late stages. People end up picking the same players and it’s clearer which players are in good form.
Have to keep on top of injuries in the late stages; it’s a long campaign and it takes its toll.
Making opinionated, defensive bets where you stack the defensive line with a single country is a high risk strategy, but it can work as a hail mary if you’re lagging.
Head-to-head betting final result: a big run during the early knockout stages put me deep in the black. Also, we have extra bets for penalty kicks and I ended up on the right side of all 5 of them (incidentally, that’s the most PKs in World Cup history).
Lower = better for me
Active week for financial data. The Fed raised rates by 50bps as the market expected, and Powell gave guidance that they are not done with rate rises (also expected). CPI came in at 7.1%, down from 7.7% last month, and under the 7.3% expected by the market. The market closed the week lower. Bitcoin has been relatively stable, but despite that, Coinbase stock has been smashed.
Scientists, for the first time, have created a net energy output from a nuclear fusion reaction. I’m not sure if it will happen in my lifetime — fusion research has been happening long since before I was born — but if they crack it and then make it economical, it’ll revolutionize the world and probably go a long way towards solving climate change.
Having a real Christmas tree in the house is pretty nice, but the hassle has always been way too much for me. Fortunately I have a wife who is so dead set on having a real tree that each year she drives out to a tree lot, bundles it into her car, and lugs it into the house. By herself. I don’t help with any stage of this process, other than extending a lukewarm offer to help, which she brushes off muttering that I’d just get in the way. Bless her.
Our kids invented a game they call “see-sum”. No idea where that word came from or what it means, but the game involves pulling down all of our blankets and pillows onto the floor, climbing onto the bed and then diving into the bedding. We don’t like it.
ChatGPT has been in the news this last week. It’s an AI chat bot, but that’s an innocuous description for a pretty eye-opening technological development. We’ve come a long way from Dr. Sbaitso, which I played with as a tween in the early 90s (although its main novelty was a text-to-speech synthesizer).
There are lots of examples people have been posting on Twitter. I thought ChatGPT’s ability to output source code is pretty crazy… although apparently it’s frequently wrong. Here are some random thoughts I have about this.
High School Homework. This one is on the top of everyone’s minds. ChatGPT has been trained on a massive corpus of text, and it can construct a relatively well-written, cogent, albeit insipid essay on just about anything you’d teach a high schooler. It’s not quite plagiarism, but it’s a form of cheating, and one that’s hard to detect in isolation. Maybe it’s kind of like testing for PEDs – if a student is writing better than expected, maybe it warrants a spot inspection? Or just random inspections? (”What are your sources and citations? Tell me more about this paragraph that you wrote?”)
Speaking of plagiarism, the jury is out about whether the training of ChatGPT and similar models on copyrighted works constitutes copyright infringement, as well as whether the authoring of new works that are indirectly based on copyrighted works also constitutes copyright infringement. At first blush, maybe there’s an argument for the former? For the latter, as long as there isn’t a direct copying of large blocks of copyrighted text, it might be analogous to doing research and synthesizing and paraphrasing information from a variety of sources. (However, direct copying of large blocks of copyrighted text has been an issue with GitHub Copilot.)
Speaking of insipid essays, ChatGPT and similar technologies like Jasper are great for generating SEO fodder – webpages written for search engine algorithms to pick up and rank. I wonder how Google will adjust?
Speaking of Google, people have been wondering whether Google has been resting on its laurels, with people comparing Google search’s results against ChatGPT’s responses. An Alphabet employee provided an explanation. The other reason is that Google is primarily designed to output links that go to relevant materials that address search queries. ChatGPT is specifically designed to answer questions. Try asking ChatGPT: “Give me links to 10 webpages that explain XYZ” and compare…
Speaking of search, an amalgamation of ChatGPT-style responses plus Google Search results is probably the next evolution of search. Google does provide direct answers to some questions at the top of its search results, but — apart from answers to factual questions like “how far is the sun from the earth?” — they are basically quotes from webpages.
Then a next step is to wire in real-time, real-world data. (ChatGPT has only been trained on data up to 2021.)
Then a next step is to enable a GPT AI engine to perform actions to create a supercharged virtual assistant. Imagine: “What are the best Star Alliance flights next month leaving on a Friday from San Francisco to Sydney with a 4-day stopover in Tahiti?” followed by “Is the fare refundable and what is the luggage allowance?” and then “Ok book me that flight using my visa card.” and so on.
This kind of technology can automate some functional forms of writing, which will save time. “Write me an email telling my landlord I want to cancel my lease 30 days from today.”
You should never use real answers to security questions like “what is your mother’s maiden name?”
No, it’s not going to replace lawyers.
Who knows if all the information it returns is accurate? It’s hard to vet unless you fact check it. Also, AI models can still be abused and influenced. They are still a bunch algorithms at the end of the day, even if the inner workings are inscrutable to us. ChatGPT provides this disclaimer: “While we have safeguards in place, the system may occasionally generate incorrect or misleading information and produce offensive or biased content. It is not intended to give advice.”
This is starting to look like sci-fi AI. But self-awareness and Skynet-type sentience — or the idea of singularity — is still a big leap away. AI that can make its own discoveries or contribute novel ideas to the sum of human knowledge is still sci-fi. ChatGPT pieces together information from existing human knowledge, but it can’t really build upon that corpus.
That said, sometimes breakthroughs in human knowledge come from combining techniques, insights and methods from apparently disparate fields and applying them to a specific problem. For example, the proof for Fermat’s Last Theorem drew from many different mathematical fields: “Wiles’s proof uses many techniques from algebraic geometry and number theory, and has many ramifications in these branches of mathematics. It also uses standard constructions of modern algebraic geometry, such as the category of schemes and Iwasawa theory … Wiles’s path to proving Fermat’s Last Theorem, by way of proving the modularity theorem for the special case of semistable elliptic curves , established powerful modularity lifting techniques and opened up entire new approaches to numerous other problems.” Perhaps a future version of ChatGPT will be able to able to expand knowledge by combining existing knowledge in novel ways.
All in all, ChatGPT has some very clear use cases with high utility that I’m sure we’ll see commercialized in compelling ways in the upcoming years. There’s a reason why its developer, OpenAI, is valued at so much.
Further Observations
World Cup Fantasy League Update: Our fantasy league group has been using ChatGPT to write trash talk to each other. After the first two knockout phases this week and an unusual number of penalty shootouts, I find myself languishing in 9th. The Brazil upset was brutal, as many of us had loaded up our team with a full complement of Brazilians, who were promptly sent packing by Croatia. England was, well, England. Out in the quarters on penalties.
World Cup Head-to-Head Betting Update: This is faring better for me, and I went on a crazy run of good luck (sorry, Dave):
Bizarro World (The Boston Globe) A journalist, doing research on video game records, randomly discovers his wife is a Tetris savant. Article is from 2007 but it’s a great read.
🗣️ "Hopefully we don't have that ref anymore… He's useless! Van Gaal said they have an advantage if it goes to penalties, he needs to keep his mouth shut."
👀 @emimartinezz1 didn't hold back in his post-match interview!
The key difference between running a viral teen app in 2017 and 2022 is the customer support experience: The ability of teens to communicate & form sentences has noticeably declined. Kids outsourcing essay-writing to ChatGPT will only accelerate this trend.
In this thread, I'll be showcasing the impressive content generation capabilities of #ChatGPT, the new language model from @OpenAI that has taken the world by storm this week.
It can do wonders in a wide range of applications. Here are 30 ace use cases you'll be amazed by!
So SBF wants to sell more tokens created out of thin air to repay creditors and depositors? And then once depositors have left the platform what happens to token-holders?
This is literally just selling equity in something worthless without even selling equity… pic.twitter.com/lc35QGJG48
— Dr. Parik Patel, BA, CFA, ACCA Esq. (@ParikPatelCFA) December 9, 2022
I would say that one of the biggest adjustments I had to make with parenthood was coming to terms with losing at least 35 hours each week. It’s not just the time spent actively looking after the kids, but it’s all the extra stuff around it as well — the extra laundry, food prep, clean up, transportation, and picking up toys from random places around the house. That’s a lot of hours each week. In my pre-kid days, I would say about a third to half of that lost time was spent working (and occasionally all of it), and the remainder was spent pursuing other activities. My tip for people in their 20s who eventually want to have children: if career is important to you, that decade is the time to go really hard in the paint (and to that end, I have no regrets personally). There’s been a bit of chatter about Musk’s edict that Twitter’s work culture should be “extremely hardcore”, coupled with a general realization that the economic climate has been good to tech companies for a long time and that the expectations of how intense working at a startup should be have perhaps moderated during that time.
BlockFi filed for bankruptcy and SBF has been going around giving interviews saying he basically had no real idea what was happening at the trading firm he founded and that managed most of his personal wealth. Personally, I find the stench overwhelming, and I don’t know whether it’s a fear of defamation or something else, but all the coverage of him by major news outlets is not what I would call hard-hitting journalism. It now looks like the dude took billions of dollars of other people’s money and gambled it away, after promising customers that they would not do that.
I very much enjoyed Australia’s 1-0 victory over Denmark this week. My wife, not so much. I now have 4 years to enjoy this. Unfortunately, Australia fell to Argentina after being in it with a shot.
In our Fantasy League, after moving to 4th in the middle of the week, I now find myself languishing in the middle of the table (8 out of 14) after a complete inability to pick any effective midfielders. In head-to-head betting, I was briefly in the black before it swung around again.
It’s a long holiday weekend, so a light update for this week. Happy Thanksgiving!
We went to CostCo on Friday and they were selling full Thanksgiving meals marked down from $40 to $15. I’m guessing they thought everyone was going to be all turkeyed out, but we’re never ones to turn down a great deal!
World Cup updates after 28 games:
Lots of upsets! France looks pretty solid.
Fantasy League: 5th out of 14 after the first week.
Head-to-Head Betting: Started off with a bad run but clawed most of it back after calling 5 games in a row.
Andor (Season 1) Almost universally acclaimed, and for good reason. I found the Narkina 5 storyline particularly enthralling.
Hotels
InterContinental San Francisco (San Francisco, CA) We spent part of the weekend up in the city and used a free IHG night here. The hotel feels aged and nothing to write home about. The showers were terrible, with the water constantly fluctuating between hot and cold.
The 2022 World Cup kicked off today in controversy-riddenQatar. 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.
0/ The story of Alameda and FTX can best be summarized by @SBF_FTX's philosophy of betting big.
Every major decision they have made is related to acquiring more leverage – via deceptive fundraises, financial engineering, and ultimately, outright fraud, as we will see below.
Michael Lewis' next book is about Sam Bankman-Fried. Email from CAA confirms he has been embedded with him for last 6 months; note below was first sent to potential buyers for filmed rights. Scoop @TheAnklerhttps://t.co/VcFEmeCAIMpic.twitter.com/ZrioMu7qbb
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.
A 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…
Sam Bankman-Fried Has a Savior Complex—And Maybe You Should Too (Sequoia Capital) Posted on the legendary VC firm’s website (who just lost their $210 million investment in FTX), this article feels completely cringeworthy today. It was taken down from Sequoia’s website a couple days ago, but the internet remembers.
but perhaps we shouldn't have trusted ten kids in their 20s all F'ing each other in a $200M orgy house in the Bahamas with our money on an unregulated exchange
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.
Biglaw Firm Tells Associates Exactly How Many Times They Need To Check Their Emails Over The Weekend (Above the Law) Slaughter & May’s answer: Once on Friday night, and twice a day during the weekend (except 10pm – 8am), unless you’re working on a matter that demands greater availability. “We’re a bit like a five-star hotel … [clients know] that if you call room service at 2 a.m. for a sundae, you’ll get one” is correct, even though it can be a very exacting (but well-compensated) job. If my employer is paying $800-1000 an hour for an associate, we better be getting Rolls-Royce service. If you had to pay any other person working in the service industry $1000+ an hour, you’re going to expect them to deliver client service with rings on their fingers and bells on their toes. Sadly, this is not always the case.
Amazing what a consumer drone can do in air that thin
On Twitter
I've now been asked multiple times for my take on Elon's offer for Twitter.
So fine, this is what I think about that. I will assume the takeover succeeds, and he takes Twitter private. (I have little knowledge/insight into how actual takeover battles work or play out)
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.
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 manyhaters— 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.
Unfortunate mix-up for Tim Cook after signing up to the “surrendering your country” flag-waving course instead of the “F1 chequered flag” classes pic.twitter.com/GOY89gncjZ
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.
Thor: Love & Thunder (Disney+) Reasonably amusing, but not particularly memorable. Actually fell asleep during the final fight scene (#parentlife). 3/5.
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.
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.
Charts, Images & Videos
On Twitter
Well, well… looks like PayPal spread misinformation about itself. Maybe they should pay a $2,500 fine to all of us? pic.twitter.com/5AjWTpDvYv
Go to your favorite lux site – I use watch sellers, but any high-end retailer works. Favorite 100 or so items, then set e-mail notifications to "Send alert on price drops."
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!
Serious Controversy in Pro fishing tournament as multiple-time winners caught stuffing lead weights and other fish filets in their fish to have the heaviest catch to win hundreds of thousands in prizes. pic.twitter.com/Sxqeo2XC0K
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.
BREAKING: Tiger Global and SoftBank Vision Fund II are in advanced discussions to inject $500 billion into the United Kingdom at a $3 trillion valuation, per sources close to the matter
People are getting way too excited about the ODNI NIM-A seal with its UFO because they have no real understanding of government seals or how eccentric they are once you get below the department level. These are real. https://t.co/ZWEaYVqhmapic.twitter.com/gpzqxcWm5k
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.
Not that there was much doubt, but I’ve confirmed with Rockstar sources that this weekend’s massive Grand Theft Auto VI leak is indeed real. The footage is early and unfinished, of course. This is one of the biggest leaks in video game history and a nightmare for Rockstar Games
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.
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.
The Uber hack is quite severe and wide ranging. Wishing their blue teams the best of luck and love during this understandably difficult period. Some thoughts & observations based on what we've seen so far 👉 1/N
Introducing Diffusion Bee, the easiest way to run Stable Diffusion locally on your M1 Mac. Comes with a one-click installer. No dependencies or technical knowledge needed.
my bf is on a plane to miami right now and a bulldog in the row next to him just had diarrhea. everyone freaked out, the dog owner began sobbing, and the dog escaped. now, covered in poo, it is running around the plane. people are lifting up their legs and screaming.
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.
Mocktail Prices Are Headed Toward the $20 Mark at Top Dubai Sites ($) (Bloomberg) We went to a restaurant called Jordnær when we were in Copenhagen last month and they had a non-alcoholic drinks pairing menu that was essentially 8 glasses of fancy tea. They priced it at an outrageous US$240. We passed.
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.
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).
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.
Over the last couple months I’ve been trying to get my cross-country solo requirements out of the way. For the purposes of meeting the requirements to get a private pilot certificate, a “cross-country” flight is any that involves you landing at a different airport than the one you took off from, where the airports are at least 50 nautical miles apart (in a straight line). I was a fair bit more nervous about the solo cross-country (XC) flights than my first solo flight, because you really are kind of alone up there. When you’re going around the traffic pattern, that’s familiar, but when you’re going to somewhere you’ve never been with before, and you’re in the skies sharing the frequencies with the airline carriers, it’s something else.
The first XC was a relatively easy one, as John had taken me on two XCs to Salinas before, so I knew what was going on.
At Palo Alto, I called ground control to ask them for a left Dumbarton departure with flight following to Salinas. A left Dumbarton departure is one where you take off from the runway and hang a left at the Dumbarton bridge, which is a couple miles North of the airport. Flight following is basically a service that air traffic control offers to VFR pilots. When you’re flying VFR (visual flight rules) – in other words, flying by looking out the window – you’re pretty much on your own. You’re not speaking with air traffic control, and no one’s telling you where to go. (The exception is if you want to enter the airspace of a towered airport, then you need to talk to ATC.) When you pick up flight following, ATC keeps tabs on where you are. They help you spot traffic and guide you around it (although the pilot always has ultimate responsibility for avoiding traffic), and sound the alarm if your radar blip unexpectedly vanishes from their screen.
I took the coastal route down to Salinas, flying over the Santa Cruz mountains, over Santa Cruz, Moss Landing and into Salinas. It was a nice, clear day, and a lot of GA traffic seemed to be heading down to Monterey. Palo Alto tower handed me off to Norcal Approach, and when I told them my intended altitude was 5500, they cleared me into San Francisco Airport’s airspace to get there (since it was above me at the time). SFO’s airspace is a category called Class B airspace, which is what surrounds all major U.S. airports normally up to 30 nautical miles in radius (the airspace looks like an upside down layered wedding cake). My flying club doesn’t allow students to fly solo into Class B airspace because it’s just a bit too busy in the Bay Area. (My instructor didn’t think much of that rule, and he gave me a Class B solo endorsement anyway, even though it’s just symbolic.) I declined the B clearance and ATC told me to stay underneath the Class B shelf.
After overflying the mountains, I realized that there was almost nowhere good to land – it basically was miles of densely forested hills. The alternative would have been to ask for a downwind departure and fly down the peninsula on the Bay side of the hills. But I’m not sure that it’s dramatically better – I guess you could land on the 280 in an emergency, but it’s still heavily populated, and the airspace is busier, especially as you skirt by San Jose’s airspace.
I made it over the Santa Cruz pier and headed across Monterey Bay. Salinas was somewhere in the distance, but the ground was a bit hazy. I was vectored for traffic briefly, before turning back to the short. The airport came into view after I passed abeam the smoke stacks of the power plant at Moss Landing.
Salinas’ tower works at a different pace to Palo Alto’s. The controllers speak slower and trip up on their words a little more, but on the other hand, there’s not a lot of traffic there so there’s no need to speak quickly.
I joined the downwind too close to the runway and overshot final by an embarrassing amount. No matter. I landed, taxied back, and took off for the return journey.
On the return, Norcal Approach twice asked me to confirm my destination was Palo Alto. The second time, I realized they were asking because they were curious – the direct route back to Palo Alto would have been via the Bay side of the mountains, but I was heading up via the mountains and then to Woodside, where I’d make a right turn and cut back in towards the Bay. But they didn’t know that, so I told them I was going to Woodside first. John told me later on that I should have mentioned any unusual routes when picking up flight following so they don’t get confused.
Our normal practice area is up near Woodside, and that afternoon was swarming with students doing maneuvers. “Cessna 1SC, caution multiple targets,” I was told. I always find that terminology peculiar, since targets connotes something you’re trying to aim at, and in this case you’re most decidedly not.
I cut back over the hills into more traffic. A Cessna ahead of me was also going to Palo Alto, and I was told to follow him. A Surf Air Pilatus was also crossing in front of my path from right to left.
“Cessna 1SC confirm you have Pilatus in sight, your 12 o’clock”
“1SC has traffic in sight”
“…and confirm that you have traffic you’re following as well”
“1SC has traffic in… uh… that traffic in sight as well,” I responded awkwardly as my eyes were glued out of the window.
Back in Palo Alto’s familiar airspace, I put the plane down and was exhausted.
The second XC was my “long” solo XC, which requires landing at 3 different airports, separated by at least 150 nautical miles. John set up my route to Stockton (where we had been once before) and Sacramento Executive (which we had not). Although both were large, towered airports, they were supposed to be relatively sleepy places.
I asked for a right Dumbarton departure, headed to my default Eastbound waypoint of the Sunol golf course, crossed Mission Pass and was in the Central Valley. Pleasanton to the left, Livermore below, wind farms, and then miles upon miles of fields. The weather in the Central Valley at this time of year is pretty consistent – warm to hot (low 30s Celsius) and clear skies with some haze.
The flight to and landing at Stockton went fine. After landing at Stockton, I contacted the tower instead of ground because the flip-flop switch in 501SC is sticky and has a habit of flipping twice when you press it once (and I didn’t double check the frequency change). Tower set me straight. Then in the runup area, I wasn’t sure whether I was supposed to switch over tower or wait until ground told me to switch (it’s meant to be the former), and ended up deciding to make a call to tower, except that I had forgotten to switch over to tower and was still on ground. Oh well. The tower kindly set up flight following for me to Sacramento. Stockton tower wished me a “safe flight” upon departing their airspace and I wonder if they chose that valediction because they figured out I was a student pilot.
I made a right 45 departure from Stockton and decided to set the autopilot. I told Norcal I was going up to 4500 and set the auto pilot. I mustn’t have set something correctly, because auto pilot blew through 4500 and I only realized when I was at 4600. I tried to fiddle around with the autopilot to try and fix it, and unthinkingly tried pushing down on the yoke with autopilot still engaged (to which the plane responded with a verbal reprimand, although I can’t remember what it said – something about trim). By the time I finally got with the program and disengaged the autopilot, the plane was almost at 5000 feet.
I found Sacramento Executive without much of a problem, made a good approach and then spoiled everything with a horrible landing. Ballooned, lost a bit too much airspeed, and came down a bit hard and bounced (at least it was on the rear wheels!). Then I slammed on the brakes and the tires were screeching (I wasn’t sure why because they don’t normally).
The departure was the worst part of the flight and a great learning experience. Sacramento Executive Tower had cleared me for a straight out departure and told me that I would get my squawk code “in the air” (the code that lets ATC track you when you have flight following). I took off and moments later was given my squawk code. I was about to type it in, when it was followed by a traffic advisory at 11 o’clock. So I diverted my attention to looking for an RV that was coming in to land and entering the downwind. In the meantime, my GPS navigation was showing that the next waypoint was off to the left, when it should be straight ahead, and I was confused. The tower radioed in again and asked me to set my squawk code. Followed by another traffic advisory. Meanwhile I’m trying to concentrate on take off and pitching to the right angle and bringing up flaps. Tower radios and asks me why I’m turning left. And I’m not trying to, but I had hit task saturation in trying to attend to the take off, squawk code, traffic, and the weird GPS issue. The result was that I dropped the ball on my heading and had started to drift off to the left. I had just finished setting my squawk code when tower radioed again, this time very irate, and told me to set my squawk and what the hell I was doing still turning left (he didn’t say “hell” – they keep the words professional in the air, although the tone sometimes isn’t). Still a bit confused, I asked what heading I should be on and was told that I had already turned so it didn’t matter, and that I wasn’t supposed to turn until I was told to. Later on, I realized the GPS was still using the previous flight plan and I hadn’t activated the flight plan for the next leg, so it was showing the old inbound track to the airport.
A few learning moments:
1. I could have asked to wait for the squawk code on the ground. That would have been one less thing to worry about during a critical stage of flight.
2. I had my priorities wrong and should have completely ignored the GPS – while I was under tower control, my focus should have been on following their instructions and not on something that really didn’t matter at that stage.
3. I could have set a heading bug when lining up on the runway.
4. I could have mentioned I was a student pilot.
Anyway, I was a bit shaken up after that. Fortunately, the final leg was the longest one, and I had a bit of time to relax a little and take in my surroundings. I set auto pilot again, watching the altitude like a hawk. It blew through my target again, but this time I was ready for it – I disengaged autopilot, leveled the plane and put the autopilot into altitude capture model. I had some great views on the way back, with Mount Diablo passing by my right wing.
Getting back to Palo Alto was relatively uneventful, although I had another poor landing. It was a 2.5 hour flight, but I felt completely wasted. When I got home I took a nap.
You need to clock 5 hours of solo XC time, so I needed to do one more solo. This time, John sent me to Oakdale, which was near Modesto. Oakdale is a small, single runway untowered airport in whoop whoop. I had only been to one untowered airport – Half Moon Bay – and only once, when there wasn’t anyone else in the pattern at 8am on a weekday. I thought Oakdale wouldn’t be too bad because of its location, and the fact that my course in would be a 45 entry into the left downwind, so I didn’t have to do any maneuvering to get into the pattern.
Norcal terminated flight following, and I switched over to the CTAF frequency for Oakdale (the common comms frequency that people talk on when there’s no tower). I was immediately hit by a barrage of position calls for Oakdale.
“Oakdale traffic, Young Eagle 123 is over the candy factory, making left traffic for 28, Oakdale.”
“Oakdale traffic, Cessna 12345 is turning final for 28, Oakdale.”
“Oakdale traffic, Young Eagle 234 is over the ammo depot…”
At 1500 feet, I was having trouble spotting the airport. And I hadn’t the faintest clue where the candy factory or ammo depot were. They weren’t landmarks on the charts. And what was Young Eagle?
I immediately began to get very nervous. It was clear there was a lot of traffic in the area, and I didn’t know where any of it was.
A plane – it looked like an old military prop plane – materialized off my right wing. He was flying on the 45 for a left downwind entry like me, and I didn’t know what to do. I recalled something about a plane on the left having right of way or something (the correct answer is actually that the plane on the right had right of way), but in the time I was searching my memory banks, the other plane had quickly sped ahead, resolving that problem for me. I fell in behind him.
I sighted the runway and made my call: “Oakdale traffic, Skyhawk 824LB entering left downwind for 28, Oakdale.”
Except that it wasn’t the runway. It was just a road. I frantically looked around for the airport again and, with relief, located it. I didn’t know what to do regarding my erroneous position report and I had probably just confused everyone else in the area. There was so much comms traffic that I was trying to listen to, I didn’t end up correcting my call. I just made it again when I was actually on downwind and hoped no one would get hissy. More people were reporting over the chocolate factory and ammo plant. (One day I’ll have to head back there and check out the chocolates.)
“Ok, I think I’m number 3,” someone said over the radio. Hmm. I started quickly scanning the pattern. There’s one plane on short final. Another turning base. Don’t see anything else… that can’t be good. Is number 3 behind me? What number am I? Then I saw number 3 ahead of me on the downwind. I put in 20 degrees of flaps and slowed down more, waiting for the plane to turn base and final and pass me before I turned base. Ok I hope I’m number 4 and I didn’t cut someone off who thought they were number4 . I finally got on final, saw the plane ahead clear the runway, and relaxed. The landing was a decent one.
On the ground, there seemed to be a bunch of people in older military-style planes going around, but I taxied past them all back to the runway and didn’t get a good look.
On the way back, I got vectored around some skydivers and had some traffic to look out for, but otherwise had an uneventful return.
“Where do you come from?” is an awkward way to ask someone what their origin is. For anyone who has a multicultural background, it’s hard to figure out if you’re being asked where you were born, where your parents came from, where you spent your childhood, where you currently live, or what’s your ethnicity. Adding “Originally?” to the end of that question only removes one of those possibilities, and it also can generate snide comebacks. “Yes, I was originally from Australia too.”
I find when I ask that question, I’m trying to find out where the person spent most of their formative years – where they got their accent, where did get their early education, where they were with their parents. I heard someone ask a version of this question a while ago that has now become my go to question: “Where did you grow up?” This invites the person being asked to answer how they want, without loading the question with any awkward assumptions.
Then, if you want, you can follow up with – did your parents grow up there too?
Haven’t posted for a while, but thought this lesson warranted one.
On Sunday, John told me that today was a possibility for my first solo flight. He would go a few rounds with me, and if he was happy with my landings, he would step out of the plane. On Monday night, the weather forecast was showing IFR conditions and mist at 8am, but happily the sky was pretty clear when I woke up.
John jumped in the plane after another battle with traffic on the 101 which allowed me to catch up on some work emails while I waited for him after pre-flighting, and we took off. Even though my flight was at 8am, someone had taken the plane out for a couple hours earlier in the day so the fuel tanks were only half full. As a result, the lighter plane handled differently and I ballooned the first couple of landings quite a lot. John was silent the whole time, and I know he was just trying to simulate me not having him next to me on a solo, but I was struggling not to interpret the silence as sullen disappointment at the landings.
We then did a short approach and I came in way too high and had to go around.
To my surprise, after another couple landings, John said that he was going to step out of the plane and let me try flying it alone – the standard three take offs and full stop landings for the first solo. But we were going to taxi over to transient parking first to refuel so that the plane would handle more familiarly (especially given that John would no longer be in the plane). John signed my solo endorsement, wished me luck, and I was alone. It was very quiet in the cockpit.
“Palo Alto Ground, Skyhawk 501SC is a student pilot on first solo, at transient parking with Foxtrot, taxi for closed traffic.”
I was a little nervous, but far less than I had expected. I forgot to lean the mixture after starting up the engine until I got to the run up area, but otherwise I got up into the air fine. The traffic pattern was thankfully fairly quiet – a few others coming and going, but nothing confusing.
The first landing attempt felt wonky during the round out and I went around.
On the second attempt I had what was probably my best landing in a long time – a greaser. I pulled into the parallel where John was observing with his dog, and he gave me the A-OK sign.
My second landing was not so good – I dropped the plane in a little at the end. Taxiing back down the parallel, John was waving his hand at me, palm down. I didn’t know exactly what it meant, but I’m pretty sure it had something to do with mediocrity.
My final landing was ok – a few issues with the rudder saw me bounce a bit from wheel to wheel on landing, but the flare was fine. Done!
I taxied back to the club and was switching off the plane when John arrived and congratulated me. I have to say, it felt pretty awesome.
My flatmate Sonny and I were shopping at our local Safeway when he suddenly grabbed my arm, turned me around and said, “Hey that’s Meg! Take a photo of us!” She obliged! #hp
My flatmate got an article published on the cover of Nature last week. His team lead just returned from giving a talk in Paris on their research (3D displays without needing glasses!)
Cleaning out old hardware at home… PC mice from 1989 onwards (DB-25 Serial, DE-9 Serial, PS/2, USB, Wireless USB). Also, an Apple IIC mouse from 1984 (not pictured)
Test post using the pretty great Instagrabber plugin. The creator is cool too – I emailed him about a customization issue I had and he responded with the answer pretty quickly.
If we have the courage to discover this calling and to match it to our livelihood, the thinking goes, we’ll end up happy. If we lack this courage, we’ll end up bored and unfulfilled — or, worse, in law school.
Hah. The article then goes on to say:
As I considered my options during my senior year of college, I knew all about this Cult of Passion and its demands. But I chose to ignore it. The alternative career philosophy that drove me is based on this simple premise: The traits that lead people to love their work are general and have little to do with a job’s specifics. These traits include a sense of autonomy and the feeling that you’re good at what you do and are having an impact on the world. Decades of research on workplace motivation back this up. (Daniel Pink’s book “Drive” offers a nice summary of this literature.)
These traits can be found in many jobs, but they have to be earned. Building valuable skills is hard and takes time. For someone in a new position, the right question is not, “What is this job offering me?” but, instead, “What am I offering this job?”
The author, a CS prof at Georgetown, tries to divorce “a job’s specifics” from whether people love their work. However, two of the things he then goes on to list in the very next sentence – sense of autonomy and having an impact on the world – are inextricably tied with a job’s specifics. Foxconn factory line workers put in long hours and some are doubtless really good at their jobs. But try and find autonomy and world-changing qualities to that job, and it’s blood from a stone.
I kind of see what he’s getting at, although he’s not really saying it explicitly – it’s a commitment issue with our generation. Employment mobility is really high, and it’s more common than not for Gen Ys to skip through 3-4 jobs over the course of a decade. Sometimes it takes time to grow into a job, so people need to give themselves enough chance to skill up – once you know how to do things, things usually do get better. But some jobs require years and years to skill up, and what happens if you get 6 or 7 years down that path and the passion doesn’t arrive?
Was at Great America yesterday, and I lost my glasses. Not in the way that you’d think you’d normally them at a theme park. I did the responsible thing and took them off before getting on a ride (which quite frankly was unnecessary), and then when I went to collect them on the other side, they were gone. Vanished. Just like that. I filled out a lost & found card but I doubt I’ll see them again.
Alas, this is not the first time that this has happened. The first time was 14 years ago, at another theme park. In January 1998, in fact – I know because I wrote a blog post about it (actually like the fifth blog post I ever wrote).
Anyway, I felt like this for the rest of the day (NSFW):
My friends had to drive my car home for me. Might be time to start thinking about Lasik again.
I got ticketed for a parking violation in Sausalito yesterday… in between the time it took for me to park my car and walk to the parking meter about 30 metres away to pay. What the hell?!
Bronnie Ware, a nurse working in palliative care, tended to patients in the final 1-4 months of their lives. She asked them to share with her what their biggest regrets in life were – what they would have done differently if they could have changed something. Then she condensed it down into a list of the five most common regrets. In summary form, they are:
1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.
2. I wish I didn’t work so hard.
3. I wish I’d had the courage to express my feelings.
4. I wish I had stayed in touch with my friends.
5. I wish that I had let myself be happier.
Some industries are known for their brutal work hours. For example, if you’re a service provider involved in helping large cap companies with their M&A transactions, it’s likely that you’re not a stranger to the 100+ hour work week. Although the remuneration for these jobs is usually very high relative to other occupations with more reasonable hours, cash compensation is often normalized by converting it to a per hour metric. Take your salary+bonus and divide it by an estimate of the number of hours you work per year. If you work 50% more hours than your peer but only get paid 20% more, your peer is actually making 20% more than you when you convert it to an hourly rate. Of course, absolute remuneration still counts for something – if you are making 20% more per hour, but are limited in the number of hours you can work, you can’t really take advantage of that better rate to make more money. And salaried workers don’t get paid by the hour, so the question is moot – you can’t make more money in your job by working more hours. You have to use the extra time you have to find another source of income.
But back to the idea of calculating an hourly rate. On reflection, I think that this simple calculation doesn’t take into account quality of life considerations. After all, an hour of work spent between 3-4pm is a lot different to an hour of work spent between 3-4am. It’s far less enjoyable when you’d rather be in bed, for one (I always say, I don’t care how much you enjoy your job – it’s hard to enjoy anything at 8am when you’ve just pulled an all-nighter). To account for this, we need to assign a greater value to time which is outside of “normal” working hours. For example, outside of the usual hours most people work, say 7am-7pm, you start to give up things that most people don’t. Dinner with friends, your own free time, sleep, and, potentially in the long term, health. So, if you work from 8am to 11pm, that 15 hour day should actually be considered to be worth more than 15 hours, because at the end of the day you begin to sacrifice things that most others don’t. I think there needs to be a graduated scale, with abnormal working hours being weighted with a multiplier.
One model of this could be as follows:
Time
Multiplier
Notes
7.00am-7.00pm
1.0
Typical working hours
7.00pm-10.00pm
1.25
Giving up free time for meals, socialising
10.00pm-1.00am
1.33
Giving up free time for R&R, hobbies, etc.
1.00am-7.00am
1.5
Sacrificing sleep
* Additional 25% added for weekend work during these hours.
For example, if you typically work a 70 hour week, with 12 hour days from 9am-9pm and 10 hours on the weekend, then each weekday would actually be considered to be a 12hr 30min day, and work on the weekend would count as 12.5 hours, giving a total of 75 hours. Another example is if you pull a 9am-3am day, the 18 hours actually counts for 22h45m (12h + 3h45m + 4h + 3h). The result is a decrease in your effective hourly rate of compensation.
The numbers I have picked are arbitrary, but my main point is the concept. Ultimately if you genuinely love your job and there’s nothing else you’d rather be doing (as is the case with many entrepreneurs), the hours don’t matter as much. However, weighting hourly calculations this way is a good way to quantitatively factor in other important things in life, like health, relationships, and so on. Different people may choose to weight numbers differently depending on what’s important to them in life. The next time you try and figure out if a job has really been “worth it”, consider the quality of the hours you’ve had to give up.
Well I never! My hometown, census population of 4,653, has its own Wiki page. I also learned that, as at 2001, there are more Anglicans than Catholics there (which is quite unusual). More info.
Dad occasionally tells me interesting stories about his encounters with patients (all on a strictly anonymous basis, of course). This was a good one he sent me the other day:
After over 30 years in general practice, you gain a sixth sense for when a patient is actually a drug addict trying to scam a prescription from you. Such was the case yesterday. Just before closing time, in walked a new patient – a young man in his early twenties with a tattooed forearm. He was from out of town, which always rings alarm bells. They come in at the last minute because they think that you are eager to go home and will honour their request quickly. They have often tried all of the doctors in their home area who have quickly become familiar with their stories. Of course these facts in themselves do not make them guilty. However, when they come to you with an elaborate story then the red flag really goes up.
As stories go this was a real doozie.
He started by saying he would let me in on a secret. He had booked a flight to take his girlfriend to New York later that night where he was going to propose to her in the Empire State Building on the 7th anniversary of their initial meeting, which happened to be on the 27/9. His girfriend was still in the dark about it. As he was petrified of flying, he needed something to calm him down. “Something a previous doctor gave me,” he said, but confessing that he forgot what it was. Instantly I was aware that he wanted a script for Valium. But I acted dumb and said that since I do not know what the other doctor had prescribed, I was unable to help him. He screwed up his face and pretended to think hard for a few seconds, before exclaiming: “Valium, he gave me valium!”
Most drug addicts will not come straight up and ask for what they want. That would be too obvious, so they rather manoeuvre you in such a way that you offer it to them. If it is not the right one, they will say that they are allergic to it and you propose another until they get what they want.
As he was consulting with me on the evening of 27/9, I told him that it was physically impossible for him to be at the Empire State Building by the 27th. He said that I had not accounted for the fact that New York was a day behind (which of course I knew). I thought to myself that even if he were to fly off immediately after seeing me, he would still not make it to NY on time as he had to transit in LAX or SFO. So I baited him and casually asked him when his flight was that evening and he replied that he needed to be at the airport at 9pm. He even volunteered the information that he needed to be there at least a couple of hours before his flight. I know that there is a curfew at Sydney airport from 11pm, and it is most unlikely that any airline will schedule a departure time at 11pm. I then explained why I didn’t think that he would be flying off at 11pm and asked him what airline he would be using. He hesitated and, sounding unsure, said Qantas. To prove that Qantas does not fly to LAX in the evening, I logged into the Sydney airport site and showed him that he had already missed his flight.
He was still adamant that he had a flight to catch that evening and said that it was probably at 10pm and not 11pm. I again explained that it was not possible. Qantas does not fly to LAX at that time of the night. Then he finally accepted that fact and said that he screwed up. But it was not over yet.
To prove that he was still going to NY, he then “rang” his girlfriend up and explained the situation to her, then told her to ring up Qantas to rebook the flight for the next day even if he had to “pay a thousand dollars more” (all this without giving her any other details). I’m sure the gf must have been hysterical to find out that she was booked to fly to NY in a couple of hour, but even though I was sitting just across from him, I could not hear her voice at all. Maybe she had a soft voice but I’m not convinced that anyone was on the other line.
In the end I did not honour his request for a script for Valium. To my surprise, he did not get angry – he was just embarrassed to be caught out.
Moral of the story: don’t screw with a doctor who has been practising for longer than you have been alive.
Waddell & Reed not the cause of the May 6 temporary crash? – back to the investigation drawing board. Link
Standard Chartered gives employees a choice between BlackBerries and iPhones – big corporate-culture-shift win for Apple
Mallesons/Clifford Chance merger rumors cropping up again – fourth time lucky? Link
Apple now sells more mobile handsets than Motorola – with 8.75m iPhones shipped in Q1 versus Moto’s 8.5m – Apple now has 3% of global mobile phone market – that is nothing short of extraordinary (remember that Apple only sells one model… "you can have it in any color as long as it’s black"). Link – Nokia of course leads with 37%, but at least one analyst believes that Symbian’s days are numbered
Taiwanese manufacturers reckon 4.5m iPhone 4Gs to be sold in 24 days – according to rumor (I’ll be one of them… my 3G is on its last legs). Link
Engineer Alex Payne leaves Twitter to found BankSimple – an appealing idea – sounds like they will be eschewing some exception fees (but I think it’s gonna be very tough to pull off). Link
Booyah raises $20m – from Accel Partners – funded in an earlier round by Kleiner Perkins
Gilt Groupe raises $35m – from General Atlantic and Matrix – they’ve been in the news a lot recently
Groupon acquires German startup Citydeal – sounds like a very smart move and a good way to get into Europe – this is Groupon’s second acquisition after Mob.ly
Prominent names revealed as investors in Canvas, Moot’s startup – this is Moot of 4chan fame – investors include Conway, Andreessen, Josh Schachter (del.icio.us), Chris Dixon (Hunch) and Kenneth Lerer (Huffpost)
A couple of days ago, I stumbled across Geni, which is a website which allows you to construct your family tree. It’s very intuitive to use, and it has quite a lot of functionality. For every person you add, it also emails that person and invites them to join.
I was idly trying out the service and seeded by family tree with my parents, an aunt, uncle and a cousin. Then I logged in today and saw the Loh family tree had turned into this:
I was very pleasantly surprised. And this is just a partial display – there are several more branches which you can drill down into. The tree is tracking well over 100 family members. It looks like my relatives picked up the idea and ran with it and things spread virally as everyone filled in their area of the family tree (I guess no one wants to feel left out!). My dad has 7 siblings, so the tree mushroomed very quickly from there. I found out a lot about my extended family, including several great aunts and uncles I have never heard of, and the explosive multiplication that can result from an era where polygamy was legal.
Interestingly, much of the heavy lifting was done by relatives in my parents’ generation – people in their 50s and 60s – so it looks like we’ve finally entered an age where everyone is beginning to feel comfortable with technology. I am still bemused by the knowledge that my grandfather uses Skype.
Geni also hooks into the usual array of social networks, and helps you to keep track of far flung relatives (I discovered that the relatives on the tree are living in about a dozen different countries) and record biographical information about them. Geni also tells you the actual relationship you have with someone, so now you can confidently identify your second cousin, twice removed. Very cool!
Just booked myself in for the E-Commerce Best Practices Conference at SLS. Looking very forward to it – should be very interesting! Most of the topics there are pretty much the areas of law that I deal with on a day-to-day basis at work. I might liveblog some of the talks, actually.
Got an email from my dad the other day saying that the tree outside his workplace had fallen down. Then I looked at the photo he attached. That gum tree was a pretty big sucker. If it had fallen the other way… well, let’s just say that dad would have been able to go on holiday for a few weeks. He even got quoted in the local papers about it (page 6)!
The initial premise is that the human body is biologically engineered to live about 90 years, but average life expectancy in America is about 78 years (give or take). The missing 12 years is primarily due to lifestyle and environmental factors, rather than genetics. So, the goal of longevity is not to extend the 90 years, which is currently unattainable for those of us currently living, but to try and access these missing years.
Buettner then describes a research project which identified several “blue zones” throughout the world, in which the people there lived for materially longer lives than the rest of the world. The amazing thing is that these blue zones contain a large amount of people who live beyond 78 years, but the 80-, 90- and 100 year old people there live healthy, active lives. The blue zoners had a tendency to remain healthy and free of chronic disease in their old age and, appealingly, to die peacefully in their sleep.
The most significant factor is having family and friends close by, and belonging to the right community (of like-minded people). Buettner drops in an anecdote of an Okinawan group (moai) of five elderly women who have been together for 97 years and have an average age of 102. He also mentions an amazing array of people over than 90 who are still doing things like heart surgery, or karate.
Other factors include an ongoing purpose – a reason why you look forward to waking up the next morning – and in part this links in with community. So when you retire, you still need something to do – something to look forward to.
Interestingly, diet and exercise play a lesser role, and the role they play is different to what you might expect. People in blue zones actually don’t regularly exercise, although they do have lifestyles which keep them “naturally active” – which means something as simple as walking around throughout the day. They have a diet which is weighted towards vegetables and they don’t overeat.
So there’s no silver bullet, no single fix or magic diet – it’s a total lifestyle approach. But the thing is… it sounds like a pretty darn appealing lifestyle. No starving yourself, no brutal workout regime.
This video reminds of one time when I was in Hong Kong. I was staying over at a friend’s house, which is a 3-storey building, with a steep wooden staircase connecting each floor. My friend’s grandfather stays there, where he lives on the top floor. Every day, he treks up and down those stairs without a walking stick, and every few days he will go out to yum cha with his friends. He is about 90 years old.
Was browsing through the Stanford Classifieds and noticed that someone was selling off a 2001 Porsche Boxster. Not something you see everyday on a student trading post. With about 100,000 k’s on the odometer, it was going for under $10k. Cars are so cheap in the US! But the thing that cracked me up was this part of the ad:
Not so good things about the car:
* Got keyed on the surface–some guy carved “Rich Stanford” on its back :( (decent paint job can be done with ~$1000, if you do care a lot)
At the end of my time at Stanford, I decided to put together a photo book. The project quickly ballooned, and the book become much larger than I initially intended. With the inclusion of infographics, charts, collages, stories, and lots of other stuff, the book turned into a yearbook of sorts. (I say “of sorts” because it was put together from my point of view alone.) I made it available in hard-copy format through Blurb. You can also download a low-res digital copy of it here (sans cover).
8. A New Decade
2010 marks the start of a new decade. I entered the last decade as an 18 year old and left it as a 28 year old. It is sobering to think that — at least in terms of age — these were the so-called prime years of life. It’s been quite a ride. I’m not going to sum the decade up, so I’ll just leave you with a few miscellaneous statistics and images that represent some aspects of my noughties. You can click most of them to view them full size.
Flight map
A map of the flight routes I’ve taken.
Where I was during New Year’s Eve over the last decade:
My photo album histogram
This is a portion of the frequency histogram showing the number of photos in my photo album by month. (I use Photoshop Elements to organize my photos.) As you can see, I didn’t get out very much during 2007. Such was the life of a banking and finance lawyer.
6. A tale of three and a half startups & the major lessons I learned
In a nutshell, “venture capital” refers to money and other resources (capital) which are given to new businesses (ventures) in order to help them grow. Venture capitalists, or “VCs”, refers to the people who decide which ventures this capital should be allocated to. Similar to a private equity fund or a mutual fund focused on equities, VCs raise money from investors who want to invest in a particular type of investment. In this case, the start-up industry (young, small companies). VCs put this money into a VC fund which is then invested in a portfolio of start-up companies. In exchange, the VCs take ownership of a part of the start-up and therefore partake in any of its growth.
Silicon Valley is home to the largest VC industry in the world. And since start-ups go hand-in-hand with VC, the Valley is a hotbed of entrepreneurialism. This is not merely a catchphrase, but something which pervades the area. It’s not just that the Valley is inhabited by a mix of intelligent and ambitious people, or that it provides access to a lot of money, or that it contains a world-class university pumping out motivated grads and producing useful research. It’s also that the culture of entrepreneurialism – including its ups but also its downs – is embedded in the very culture of the place.
This is a rare environment. A smaller version exists in Israel, and I suspect China has a rapidly growing VC-funded industry. No place like this exists in Australia. I had the opportunity to get some exposure to the world of start-ups and there are two things I observed that nicely demonstrate this “culture of entrepreneurialism” to which I refer.
Let’s say someone asks you what you do for a living. You tell them that you work for a “start-up”. They do a bit more digging and it turns out that you are working out of your apartment with two other guys, not getting paid anything, and are currently going around asking people for money so you can launch your product, which is a website that allows people to do stuff. In most places in the world, the reaction you’d get would vary from dubiousness to disdain. In contrast, the reaction here is quite different – usually one of genuine interest in what you’re doing. The powerful result of this near-universal social validation is that joining a start-up is a perfectly valid career path here. It encourages people to take risks that they would not have otherwise been taken if these social support structures not been there. The heightened risk appetite that exists in human capital therefore enables start-ups to source talent for less cash (in exchange for equity or the future promise of equity in the form stock options).
The second aspect is that failing holds little to no stigma in the Valley. The vast majority of start-ups fail. And the entrepreneurs who have succeeded often have been previously involved in failed ventures. Instead, the focus here is not on the fact that someone failed, but on the reasons why they failed, and what they learned from the experience. It’s a very supportive atmosphere, and that’s what you need to foster entrepreneurialism.
It was 4.00am on a Friday morning in October, and I was bearing witness to carnage.
Having just flown in from San Francisco a few hours ago, I was sitting in my hotel room bed, wide awake and trying in vain to shake off the jetlag before an interview that was only about five hours away. Only a month after arriving into the US, in early September 2008, I had been invited to interview with a major US law firm. They had offered to fly me, along with about a hundred other LLM students from universities around the country, up to New York for the weekend and had booked us all into the downtown Hilton. I had never been the beneficiary of such corporate largesse, and it seemed that things were still going well in corporate America.
The most valuable thing I got from Stanford was the contact with so many interesting people.
Starting with my coursemates, I had never been exposed to people who were nationals of so many different countries in the same place before. The admissions committee did a great job of getting together such a diverse group of people. And what was remarkable was that everyone was nice. No one really had an ego, and I’m really sensitive to people with overblown egos.
As the end of the year, and indeed a decade, draws to a close, here’s a customary introspective post.
It’s been a very full year, so I picked out a few themes to write about and broke up the post under those themes. I haven’t written up everything yet, so I’ll be breaking the post up into multiple parts. Some will be posted in the new year.
1. Getting another piece of paper
2009 started with my second and final semester at Stanford. By the time my classmates and I had come back from Winter break, we had well and truly settled in and were now focused on making the most out of our remaining time. Spanning only 9 months, the time needed to complete an LL.M. is – unfortunately, in my opinion – the shortest time in which you can get a degree. So, after it all, what did I get out of it, other than another piece of paper and a large hole in my wallet? Did it meet my expectations? What did I learn?
This weekend I just finished moving into a new apartment in Menlo Park. Found a real gem – about 1200 sq ft (110 sq m) and cheaper than what I was paying back in Sydney or on campus. Leafy, quiet neighborhood, free laundry, a Safeway and Trader Joe’s within walking distance, central heating, and a bunch of other stuff. But the real luxury is that it’s within walking distance of work.
And it’s incomparable to the “transit” accommodation I had for the last 2 months. I had to find a place in a rush and I paid the price. Let me say that living in a 2-bedroom apartment with 3 other guys (2 of them literally living in the living room with questionable hygienic standards) is not fun. Here’s a tip: if there are food chunks all over the dish drying rack, you haven’t washed your shit up properly.
This is a bit of a self-reminder to find out if anyone has written a plugin which takes Facebook wall posts and pushes them into WordPress. But for now, click through to see:
From last October in Sydney. Nicely edited together by Reuben.
Wedding Ceremony
Reception (I think there were at least 3 other speeches that don’t feature in the video, not to mention Reuben’s guitar performances… you might also notice that two members of the bridal party are pulling double duty as MCs)
I love Sydney and all, but there are four things that have annoyed me about it over the last couple of weeks:
1. Lack of Wifi. Maybe I don’t know where to look, but it’s so difficult to find free Wifi around the CBD. They have it in the state library (where I am at the moment, actually), but the HSC must be currently in full swing because the place is filled with what looks like Year 12 students reading crib books.
2. Cityrail. They redid the train timetables this week. Night services from the city to Campbelltown used to take about 55 minutes on the East Hills line. They replaced all the East Hills schedules with all-stops trains, and now the same journey takes at least 1 hour 20. That’s almost 50% longer! WTF.
3. Poor mobile reception. The train tunnels under the CBD have zero mobile phone reception. Every other major developed city in the world has mobile reception in the subway. Why not Sydney? (And it’s not like we have a huge number of underground tunnels!) Same thing with the East Hills line – including the bit that passes by the airport.
4. Weather. What the hell happened to the weather this month? A lot of people have been returning from London and New York this month for weddings so the common line is that they brought their weather with them. Obviously I haven’t been properly representing California because it’s been windy, cloudy and rainy for 2 straight weeks.
Been playing around with Xobni, an indexing and analytics plug-in for Outlook. Once it’s created an index, It’s pretty snappy with searches, much more than Outlook’s own search function (I never understood why Outlook’s search was so poor). What’s more interesting is the analytics which produces all sorts of stats, such as who sends emails to you the most, the average time people take to reply to your emails, and the times of day you receive the most email. Here are some graphs generated from the last 11 months of my inbox history (June 08 to April 09).
Distribution of email received by hour of day: Clearly, people like emailing before and after lunch
Distribution of email sent by hour of day: I do a lot of emailing between midnight-1am, as well as a bunch in the morning after I’ve woken up (10am-noon). Clear dips in emailing during lunch (noon-2pm) and dinner (7-9pm)
Email volumes over the last 11 months: I came to Stanford in August last year and the email traffic jumped.
Uniques: This graph surprised me – this shows the number of unique people mail was sent/received to/from throughout the course of each month. The received graph is somewhat inflated by email received from mailing lists and other non-human email addresses.
Average time for me to respond to emails: No surprises here – I took longer to respond to emails during the Christmas holiday.
Time to check in to my blog again. Lots of doom and gloom this week. I attended a panel discussion hosted by the Churchill Club, an organization that brings together members of the Valley’s venture capital community, and the general consensus was the economy was really bad and only going to get worse. The number of startups funded has fallen, the number of startups folding has risen, VC firms are finding it tough to raise funds, and so on. Times are really, really tough and the job market is brutal. This has been clearly reflected in my ongoing job search – it’s pretty much impossible to get firms to even look at my resume, even if applications are sent through personal contacts and not via HR. The reason is depressingly simple – virtually every law firm has just completed one or more rounds of lay-offs, and in that climate, they’re not going to turn around and hire more people – especially with an uncertain deal pipeline. The question is, will things recover over the next few months, or will the hiring freeze continue (or worse, will there be more lay-offs)? The university is suffering as well – the endowment is expected to take a huge hit and continue to shrink over the next year. One result is that a few Masters students here who wanted to do PhDs have been unable to obtain PhD funding. I was out with a friend tonight who is working towards a PhD and we walked past a large sign saying “We are hiring! Inquire within!” Jose turned to me and remarked, “Wow, that’s rare to see during an ad like that in these economic conditions! I wonder if they hire PhDs?” The sign was on the wall of a fast food joint.
So for a variety of reasons, professional but unfortunately also personal, it’s been a Real Bad Week for me.
We went out looking for a drink last night after watching the fireworks over the bay, only to be stymied when we discovered that California has laws prohibiting the sale of alcohol in bars after 2.00am. (In Palo Alto, everything shuts at 1 or 2am, but I always thought that was only because it was Palo Alto, not because the alcohol has to stop flowing…) This country still surprises me sometimes.
I also learnt that in Japan, New Year’s traditions include making mochi – gooey rice cakes. Unfortunately, this tradition also has the side effect of causing several elderly Japanese people to choke to death each year while eating mochi. We get annual holiday road death tolls, in Japan they get annual holiday mochi death tolls. So each year, the Japanese distribute tips on how to avoid death by mochi, including the popular solution of shoving a vacuum cleaner down someone’s throat if they start gagging. My Japanese coursemates insisted this was not a joke. I was still dubious but Google appeared to confirm this improbable tale. Apparently the Heimlich manoevure doesn’t work too well.
In Berlin, New Year’s was described to me as a “war zone”, with people taking to the streets with roman candles, bangers, rockets and all manner of fireworks and miscellaneous incendiaries. And they fire them at each other.
Someone should do a “top 10 most dangerous places to celebrate New Year’s” feature…
My parents came to visit over the Christmas break. I showed them around the campus, then we spent a few days in San Fran, with a nice daytrip down the coast to Monterey and Carmel. The only thing we did in Monterey was visit the aquarium, which was of particular interest to me since it was one of the filming locations for my favourite Trek movie. As the aquarium doesn’t actually have any whales, nor a whale tank, the digital effects guys had to digitally construct them, along with a backdrop of the San Francisco skyline. The movie was filmed in the 80s and although the aquarium has been updated quite a bit since then, all of the filming spots were pretty much unchanged. Apparently, people have gone to the aquarium after watching Star Trek IV only to be disappointed to find the closest thing to a whale there is the life-sized plastic model they have suspended from the roof.
South of Monterey is the famed Pebble Beach golf course which borders the Pacific Ocean. At $495 for a round, it’s a rich person’s course. Staying there costs a few thousand bucks a night. One of my dad’s friends had the opportunity to play there, but he unfortunately didn’t have time to enjoy the views. Apparently they place marshalls at each hole to keep players moving quickly – they try and push as many groups through as possible since they clear about $2k for each foursome. There are a whole bunch of golf courses in the area, including Cypress Point. Cypress Point is a very difficult course, but it has some admired holes, including the notorious 16th. It’s a par 3, but to make the front of the green, you have to be able to carry your ball over 200 yards. In between the green and tee area, it’s all ocean. I’d need at least a spoon (3 wood) to make that distance. There’s a “bail out” zone to the left, but you still have to carry 150 yards.
On the 22nd, we flew into Dallas to spend Christmas with my uncle’s family. It was a chilly zero degrees C when we arrived. One of my cousins is studying in Boston and he had planned to fly in on the same day, but the weather up there was way below zero and his flight was cancelled. He arrived a couple days later.
I had only been to Dallas once, and that was exactly 15 years ago. My uncle pulled out some old camcorder footage which showed me playing with my cousins in the backyard – we were firing super soakers and chucking water balloons at each other in the dead of winter! This time around, I visited the Sixth Floor Museum, which is housed in the building from which JFK was shot. Quite an interesting place, especially in light of the references to JFK’s civil rights work and display text which was written in a pre-Barack Obama world. Of course, the pall of assassination hanging over the place is sobering, and obviously a concern today. On Christmas Day, we attended a midnight mass which was novelly conducted in English and repeated in Spanish (which really drew out the service…) and went to a Christmas party at a neighbour’s house (to which my uncle’s family had been attending for the last 15 or so years). On Boxing Day, the weather warmed up considerably, hitting an incredible 26 degrees. We took the opportunity to hit the factory outlets. We also did a lot of eating. All in all, it was a good trip.
I’m back in California for New Year’s… I’ve realised that out of the last nine January 1sts, I’ve only been in Australia for one of them. Running back through the past nine New Year’s Days, I’ve been in Hong Kong, Istanbul, Amsterdam, Sydney, Singapore, Hong Kong, Singapore, Lucerne and Hong Kong. Kind of a pity, since Sydney fireworks are such a great spectacle. But I do enjoy Hong Kong where I’m of average height so I can actually see things going on instead of smelling armpits the whole night.
Facebook is a pretty convenient place to post photos these days. One gripe I have though is that I wish they allowed higher resolution photos (perhaps they eventually will, just as YouTube now caters for HD vids). You can’t make prints from photos 604 pixels wide.
The law school still has exams running to the end of this week, but finals for the rest of the uni finished up last Friday and the campus has pretty muched cleared out since then with people going home or elsewhere on holiday. Friends have started putting up status messages on Facebook telling everyone where they are or where they’re going to be, but the one below was just surreal (he’s Indian-Zimbabwean and his family is in Zimbabwe). And in the meantime, more sinister stuff is going down in that country…
It’s been a while since I wrote something substantive on here. Almost four months in, and this place continues to amaze me. I’m dreading the day it all finishes.
After an afternoon of study today, I played squash with a group of LLMs and got my ass majorly kicked. I grabbed dinner afterwards with a friend, an eighth year lawyer from Brazil, during which we jointly commiserated over the painful depreciation of our respective currencies (the Brazilian Real has gone down more than the Aussie Dollar!). I then headed over to a neighborhood “dessert night”. I stay in Escondido Village, which is a large on-campus residential area for graduate students, and each section of the village regularly runs community events. I only intended to drop by for a half hour to gorge myself on some ice cream before returning to hit the books but unfortunately I was late and the ice cream had run out by the time I arrived. I got involved in a conversation instead. It was one of those conversations that was so engrossing that everyone ended up standing around talking for three hours despite the presence of perfectly good couches only a couple of metres away. We were six people who grew up on six different continents, and the spark which initiated everything was when one of us admitted to being a conservative and was lamenting about four years of Democrat rule. A Republican, much less a Republican who is willing to admit it, in this part of the country, is a rare thing. But diversity of views is always good – when everyone shares the same views, there is too much self-congratulatory back-patting and agreement which, while potentially therapeutic, isn’t so interesting. Reasonable disagreement is that much more stimulating and productive. The conversation lurched from topic to topic – universal healthcare, economic bailouts, Detroit, fiscal management, feminism, the Presidential campaigns, the role of languages in a multicultural society, voting in California, differing notions of democracy around the world, oil and alternative energy, the drinking age, and so on. We all had different academic backgrounds and upbringings, so even among the liberals, there were widely differing worldviews (I, for one, am economically more to the right than I am on other issues). But what made it work was that people were not rabid supporters of their personal views (ie, in the same way that support is shown by the nuts in the Republican party base whose reflexive instinct on hearing the word “Obama” is to boo). There was always intelligent give and take, and while you can’t expect a conversation like that to make people switch sides, you do expect it to bring people closer to the centre. These comments may be trite, and my wonderment quaint, but I can’t say I’ve ever been in an environment like this before. I would certainly be hard pressed to find one in Australia.
And here’s what I did on a day earlier this week.
Woke up about twenty minutes before a 10am contract drafting class and dashed off to make it. We spent the hour dissecting a Stock Purchase Agreement. I then biked over to the b-school to meet a couple MBAs to discuss a very interesting business idea they had. There’s a b-school course which teaches about starting up a start-up and they were looking for a law student to join their team. Then I rode back to the law school for lunch with Larry Lessig. Various faculty Professors make themselves available throughout the semester to a small group of students for a talk with them over lunch on a first-rsvp first-served basis. Since Professor Lessig is not teaching any cyberlaw courses this year, I jumped on the opportunity. He took questions from all of us and answered them one by one. As expected, he was extremely eloquent in expressing his thoughts which recently have been turning to examining corruption in democracies (not so much overt corruption, but conflicts of interest and competing influences on decision makers).
After a thought-provoking lunch, I moved to the library to work on a case study presentation for an International Deal Making class (involving an LBO of several Taiwanese companies by, coincidentally, an Australian conglomerate). Spoke with a friend about the status of the job market and our expectations of US work culture. I typically think of New York as being the most intense place to work in the world. However, she used to work in the Cairo office of a US law firm – as a lawyer in an understaffed office, in an emerging market economy, and in a culture where clients don’t understand the concept of personal time, the hours she pulled were very scary.
Then I rode to the b-school again to meet with an MBA who was interested in an idea I have about an IT application for streamlining administrative tasks that lawyers always complain about in law firms. I was planning on attending a talk about microfinance initiatives in Africa afterwards, but our discussion ran overtime. I instead attended a presentation by Professor Frans De Waal, a famous biologist known for his work on primates, who spoke about whether animals have the capacity for empathy. It was a fascinating presentation. (The evidence is pretty strong that apes do have empathy which extends to an inter-species level.)
I went home to cook dinner, do some study, and then went over to a wine and cheese night that the French Student Association was hosting (a friend is the President of the association, which is where the connection lies). I don’t normally attend wine functions for reasons that are obvious to those that know me, but I needed to get out and do something social. The French seem to have a mansion called La Maison Française all to themselves in which they can host events. I’m not sure, but it was probably bought by some French alumnus or alumna who wanted to donate something back to the university. I was told that ze Germans have their own house as well.
I think I was the only one drinking coke there, but it fooled more than a few people into thinking it was a glass of red wine. I walked up to a person with a jacket that had “Australia” written on it, only to find out he was actually Swedish. We spoke for a while and I found out he was involved in a funded startup which provides a service that converts bitmap images to vector images. A group of us then adjourned to a bar in Palo Alto where we ended the night bitching about how much work we had to do. (The line of the night was that one of us had applied to Stanford for the sole reason that it was on the West Coast. He thought it would be chilled, laid back, and a good place to have a holiday from work, only to find, much to his chagrin, that he was working harder here than he was at the Magic Circle firm he used to work at.) I arrived home at about 2.00am, put in a couple more hours of work and then went to sleep. We have exams in two weeks.
STANFORD, CALIFORNIA — November 4, 2008. The student lounge began filling up at 3.00pm, as the first polls around the country began to close on the East Coast. The flyers advertising the event said that no alcohol would be provided, but nonetheless, cases of beer and bottles of wine had been procured — though hopefully they would be used to toast to victory rather than drown our sorrows.
The mood was light and positive. Whenever CNN, or MSNBC called a state for Obama, people would cheer. When states were called for McCain there was silence, but, most notably, never were they any jeers or booing.
East Coast counting was well underway when I had to go to class just after 4.00pm, with some toss-up states shaping up to be a close battle. There was a large amount of distraction during a normally engrossing class on international deal making.
In class, I kept refreshing the New York Times’ “Big Board” summary page and various liveblogs and saw Obama’s EV count edge slowly up past 100, 150, and then 200. It hovered there for a while, with states such as Indiana, Missouri, Florida and North Carolina still hanging in the balance. Iowa fell to Obama. By 6.45pm, I was crawling up the walls as class ran overtime.
I got back in time for the 7.00pm round of polls to close to find that the student lounge was standing-room only. It was relatively uneventful for that hour, but we were kept entertained, not least of all by reporters appearing “via hologram” on CNN. There was the occasional cheer as various other less-crucial states were called, but the real lead up came just before 8.00pm, when the West Coast polls were due to close. Obama was still about 60 EVs short of hitting 270 and anticipation was growing in the atmosphere.
As CNN counted down the seconds to 8.00pm, the crowd joined in.
Five. Four. Three. Two—
The projector screen went blank. A second of confusion, then the first boos of the night. The television feed had been lost.
Barack Obama is President-Elect of the United States of America. Pause a while and consider that. Absolutely amazing. What a country.
The mood around campus is incredible — euphoric is how I’d describe it.
Euphoria, as CNN calls the election for Obama. At 8.00pm PST tonight, the west coast polls closed. The television networks immediately called California, Oregon and Washington for Obama, catapulting him from the low 200s, straight past the magic 270 vote mark.
After trying to figure out how to start writing a paper all day, it is more than a little annoying when the inspiration suddenly strikes in the wee hours and you get on a bit of a roll. And I’m meant to be playing tennis at 9am today…
I only have 14 contact hours per week, but my calendar for this week looks like this:
This is caused, in part, by the amount of events they hold here, which is insane. There’s often several events during lunch or in the evening that are worth attending – though unfortunately they tend to conflict – and it doesn’t hurt that most of the events provide a free meal (seriously, you could go through a whole semester and not have to buy lunch). The events are mostly student organised, and the things is, the entire law school only has about 550 students. Then there are university functions, housing community functions, graduate functions, etc… So it’s busy, but it’s definitely a good type of busy.
Got sick of studying this afternoon so I dropped by the driving range today, hit a few balls then went for a bike ride around The Dish (view route map) and snapped a couple of panoramas. It’s really nice having a recreational track just down the road… but apparently you have to watch out for the mountain lions.
Brief-ish rundown of what happened during the first week. Took a while to write, so I’m not expecting to write anymore posts like this!
Monday, Aug. 11
First day of class. All the LLMs and most of the SPILS students have enrolled in this class which seems designed to be a super-quick overview of the American legal system. The lecture theatre is the size of a large classroom – three rows of desks with the back rows elevated above the front rows. Seats about 40. The class is pretty diverse. This year’s Master’s intake has the following stats: 26 LLMs (12 in Science and Tech stream, 14 in the Corporate stream) and 13 SPILS.
There are 21 countries represented: China (6), Japan (5), Brazil (3), Germany (3), Israel (3), Colombia (2), Argentina (2), Singapore (2) and one each from Italy, France, Belgium, Thailand (although he’s a UK-educated lawyer), Finland, New Zealand, Australia, Canada, Spain, Taiwan, Egypt, Kenya and Uzbekistan. So, all but 6 of the class are civil law lawyers. The average age is probably about 29, with most people having a moderate amount of seniority in the firm from which they came (it probably averages about the 5 year PQE stage). One of my fellow LLMs was actually a partner at a large Chinese law firm. Unlike in the US and most Australian universities, a law degree in many countries is an undergraduate level degree, so those people can be practicing by the time they are 21 years old. However, there are also about a half-dozen PhDs as well.
The first class was mainly about U.S. law school pedagogy – and our lecturer played the infamous first scene from the Paper Chase to introduce us to the Socratic method. Comfortingly, the environment was fairly familiar to me. I went to UNSW Law School and the great thing about it is that they try to employ the Socratic method – all courses are taught in smallish classes of about 25-35 as opposed to lecture halls of hundreds of students. I think it’s a great way to learn and the input that came from everyone else really made the interaction and learning more interesting.
How many law students does it take to watch a DVD? At least a dozen.
We managed to borrow the Paper Chase DVD from the lecturer and a group of us gathered in the common lounge of one of the studio apartment complexes. Unfortunately, when we arrived there at 9pm, we discovered that someone had absconded with the DVD player. After way too much discussion (an hour of it actually), we finally resorted to watching it on a laptop. All eleven of us.
That’s a lot of people huddled around a small laptop screen
Side note: it just occurred to me that the answer that Hart gives to Kingsfield’s question of, “What should the doctor pay the boy?” is wrong. Hart replies, “He should pay for the difference between what the boy had, a burned hand, and what the doctor gave him, a burned and hairy hand?” The damages, being expectation damages, should be the difference between a perfect hand and a burned and hairy hand. But of course, we don’t know whether the movie was written to show Hart giving a correct or incorrect answer.
Tuesday, Aug. 12
Class today introduced us to the common law system of finding the law in cases. All familiar stuff to me, but there was lots of input from the civil law lawyers which was informative. They have cases too, but their law seems to reside first and foremost in civil codes, which are exhaustively written. Cases which interpret the codes are persuasive, but there isn’t the same sort of precedent system that common law systems have. Of course, statutes exist in the common law system as well, but the difference is that the statutes aren’t exhaustive. There’s a lot of law that’s just out there floating in the case books. Nonetheless, despite these differences, the general analytical approach to a legal problem is the same in principle regardless of whether the system is common or civil.
In the afternoon, we got a free lunch and had a presentation from the careers office detailing the options open to us foreign students in terms of finding a job after graduation. They offered each of us a personal resume review session, an opportunity which most people took up. US resumes are pretty compact one-page affairs, since firms normally spend about 30 seconds skimming one before moving on.
That night we had dinner at the Graduate Community Center (otherwise referred to as the GCC), which is the only bar on campus. I took the opportunity to watch the Olympics there, although NBC’s coverage is awful. If Americans weren’t involved, they didn’t screen it. The coverage was incredibly ethnocentric.
Wednesday, Aug. 13
Class today was about statutory interpretation. There was also discussion about how many judges in the US are elected rather than appointed. Virtually everyone in our class found this to be an anathema. We had Westlaw training in the afternoon.
Thursday, Aug. 14
We had two guest lecturers today. A Wilson Sonsini partner came to lecture us on civil procedure. Of course, there is no divided legal profession in the US attorneys are attorneys, and any of them can technically appear in court. A law school professor lectured us on criminal procedure. LexisNexis came in and gave us a training session in the afternoon.
My $80 bike from Walmart broke. I guess you get what you pay for. Luckily, Walmart has a very liberal return policy, so I was able to return the bike and get a cash refund, no questions asked.
That night, the law school held a movie night and screened A Civil Action. Free pizza and beer.
Friday, Aug. 15
Probably the first day covering substantive law, we had a class on constitutional law. Very interesting stuff to compare and contrast with the legal systems around the world. I knew that England didn’t have a hard constitution, but I didn’t know (or maybe I forgot) that New Zealand didn’t have one too. Of course, it was quite embarrassing to admit that Australia didn’t have a Bill of Rights. The other students from the West were aghast.
“Free speech is not constitutionally protected?”
“No, it’s a negative right it exists to the extent that the legislature does not take away from it.”
“But that’s like saying you have a negative right to a fair trial until you don’t.”
“Uh but we do have a right to political communication. Which is implied.”
Still, not as bad as New Zealand, which its Parliament could technically transform into a dictatorship overnight, if they had the numbers. :)
Incidentally, the American right to free speech in the First Amendment is incredibly, incredibly broad, to the extent that America probably has the laxest hate speech laws in the world.
It was also interesting comparing the US federal system to Australia’s. There’s a lot more interest in state independence in the US. States have wide ranging plenary power (as they do in Australia) but for matters of state law, a state’s Supreme Court is the final arbiter. The federal courts and US Supreme Court can generally only hear matters if they involve federal laws or a constitutional issue, or are “diversity of jurisdiction” case (a dispute involving laws of multiple states).
Also, most of the things in by the Constitution apply (expressly) only at the federal level (eg, the Bill of Rights). There’s a Fourteenth Amendment which contains a “Due Process Clause” requiring states not to deny due process. Various rights under the Constitution are then classified as necessary for due process by case law and thereby bind state governments.
In the afternoon, Bloomberg held a training session in the law library. The law library is pretty cool, as far as libraries go. At work, there was a big commotion when they decided to upgrade all of the firm’s chairs to Herman Mueller mesh chairs, which were touted to cost over $1000 each (but I’m sure there was a volume discount involved). In the law library, all of the chairs are those Herman Mueller ones. They also give free printing to all students (subject to a “fair use” policy of 10,000 pages per month).
The library also has bikes available for loan! I borrowed one while my Walmart one was out of commission.
Anyway, Bloomberg came in and gave us a training session. It seems like they are trying to get into the legal space, but their strength is still financial and corporate information. Apparently access to Bloomberg costs companies $20k per year per employee, but Bloomberg was using a “crack dealer” strategy (Bloomberg’s words, not mine) to get law students hooked. We all got a free year’s subscription to it and a nifty biometric card to go with it – to log on to Bloomberg you have to scan your finger on this card and hold it up to the computer monitor. The card reads a flashing light off the screen and then spits out a token which you use to log on. Very cool stuff, but Bloomberg’s UI has all the elegance of a beached whale. It’s probably most useful for M&A lawyers all the merger agreements and loan documentation from public transactions are available for download.
That afternoon, the South Americans arranged a soccer game. All three Brazilians and all two Argentineans turned up. Everyone else was intimidated. But it was quite good fun despite my lack of fitness. The sporting facilities at Stanford are amazing.
Went out to watch the Woody Allen movie, Vicky Cristina Barcelona in the evening. Our resident Spaniard, Maria, took a fair bit of bagging out after that. Movie was pretty good. Then we had drinks at a bar in downtown Palo Alto. The confused bouncer was confronted with a menagerie of foreign language driver’s licenses, but he let us through anyway. It was only $2 for a Coke there.
Saturday, Aug. 16
We hired a car from the car rental shop on campus. Did a lot of shopping today, including for a used car in Santa Clara. One of the used car salesmen there put the hard sell on us. We passed by a car that was yet to pass mandatory safety and smog inspections. We were informed that the car would not be able to be test driven by us until these inspections had occurred. When we expressed interest in the car, they started throwing around numbers.
“Sure, but we will need to test drive it first.”
“Look, legally we can’t permit that, but we assure you that it will pass the safety inspection.”
“Fine, then we’ll come back and test drive it then.”
“But it might be gone by then!”
“But you said it had to pass inspections first.”
“Yes but we might wholesale it in the meantime.”
“Well, if that happens it happens, we’re willing to take that risk.”
“Look we’re giving you a great price. Listen why don’t you take it out for a test drive now?”
“ ”
Notes: The nearest Walmart is in San Antonio. Cheap fruit and veg to be found at the Milk Pail nearby. Safeway is good for groceries (except fruit and veg), is open 24 hours, and will also deliver to your door (the first delivery is free, otherwise it costs about $10). Make sure you sign up for a free Safeway card at the checkout lane to get the discounts. Trader Joe’s has organic groceries.
Sunday, Aug. 17
Went to San Francisco and visited the Berkeley campus. The food options around Berkeley are heaps better than Stanford. But the weather is not so good. Boalt Hall (Berkeley’s law school) was under construction at the time, so it probably didn’t look as good as it should.
The hilly approach to Lombard St, San Francisco
UC Berkeley’s School of Law
Panorama of the Bay
Monday, Aug. 18
During class there was a peninsula-wide power outage that lasted for several hours, so we got an early mark. We ate lunch at Manzanita, one of the all-you-can-eat dining halls around campus. If you use Cardinal dollars to pay (which is basically prepaid credit stored on your student card), you can get lunch for about $6.75, which is great value and there’s heaps of variety (although the ice cream was soft because the power was out!). Met our first 1L JD who was in the process of completing a PhD in Political Science at Oxford. Everyone here is interesting!
Bought a used bike at the campus bike store and also met with my program advisor to discuss my selection of courses over the next year.
My new used bike
Gave Yvonne a short tour of the Stanford campus and then had dinner on Castro with her and two other Aussie Googlers, Juvita and Roger.
Americans seem to think I’m British. The last one that thought that told me, “it’s because you enunciate your words. … Australians don’t. And Australians say ‘mate’ a lot too.” Right.
I had planned to meet with three other grad law students upon arrival at San Francisco Airport – Jesse, Daryl and Vincent (a Kiwi, a Singaporean and a German respectively). I arrived at about 1pm, but Daryl’s flight was delayed and Vincent’s flight had been cancelled. So Jesse, Daryl and I shared a shuttle heading for Stanford with an American family, the parents of which we discovered were both Stanford alumni and were overflowing with praise for the university. Eventually, we made it onto Stanford’s sprawling campus some hours later, entering by the much-postcarded Palm Drive.
Stanford’s campus is without doubt beautiful, but almost completely impractical. I was told that the campus was the second largest in the world. Although I have my doubts about the veracity of that claim, there is no doubt that the campus is huge. It would not be overstating things to say it is at least 6 times larger than UNSW’s Kensington campus. The academic core of the campus is made up of a variety of single storey and low-rise buildings, based on a hodgepodge of early 1900s architecture. Scattered around these are an array of student residential buildings, including my home precinct of Escondido Village which is entirely populated by a variety of graduate students (walking through the area is somewhat reminiscent of walking through a retirement village). There is no apparent logic to the arrangement of buildings and bewildered new visitors are often found wandering around the grounds with a map in hand. I know I still am.
Getting around campus on foot can be punishing. Even staying on campus, it takes 15 minutes to walk to the law school, and I am living relatively close to it. Back in Sydney, I was staying off campus and I could get up to the law school in 12. Consequently, many students use a bike to get around and bike racks are happily ubiquitous. But ultimately, Stanford and the surrounding suburbs (Palo Alto, Mountain View, etc) are made for cars. In fact, the whole of California is made for cars. One of the biggest problems with Stanford is that there are no supermarkets or national bank branches on campus! It’s currently summer holidays and there is no public transport to the local Wal-mart or Safeway. And even if you get there somehow, there’s the problem of carrying things back home – when you’re moving in, there’s a lot of stuff you need to buy.
Fortunately for me, my flatmate has a car and he graciously drove me (and three other law buddies) to Wal-mart for our first shopping run. The car was loaded to the brim and it was with a great deal of humor that we squeezed everything into the trunk, under the seats, and on top of laps. The car was virtually dragging on its mudguards as it chugged out of the carpark. My flatmate is a really nice guy. He’s a Californian doing a PhD in applied physics (researching something along the lines of manufacturing a laser capable of reading/writing discs with the potential to store 400 gigs of data).
Stanford does provide a free shuttle service called the Marguerite which has stops around campus and also in surrounding areas such as Palo Alto. Unfortunately, my experience with it has led me to believe that it is notoriously unreliable. The whole system is partially broken and I could think of many things that could make it better – such as marking shuttle stops clearer, marking shuttle stops with directions/arrows, keeping timetables posted at the stops up to date (especially as the buses operate on a different schedule during summer), overlaying the shuttle route maps on the main campus map and most of all, making sure that routes are contiguous. We were trying to get back from the Bank of America, only to find that the bus terminated mid-route and we had to switch buses. So we switched buses and were on our way again. Only to have that bus terminate. Then we had to wait 10 minutes for the next bus to come along. This did not happen to us only once.
The weather has been decent, although not what I expected. It’s the tail end of summer and daytime highs reach the low 20s. Mornings are cold and I need to wear a jumper in the evening. Still, it’s been sunny and from what I hear, it doesn’t rain.
Yvonne graciously took me out to dinner at the main Google campus and gave me a tour of it a few nights ago. The place is insane (in a mindbendingly good way)! It was everything I’d read about and more. The best way for me to describe it is that it has such a vibrant university atmosphere – so much so you don’t feel like it’s a workplace. Visitors commonly wonder how any work gets done. Arriving there at 6.30pm, I found people playing beach volleyball, people swimming in swimming pool “treadmills” (complete with lifeguards), dogs cavorting on the lawns and a continuing bustle of Googlers in totally casual attire. Controlled chaos is an apt descriptor of the work environment inside. The whole deal might not be everyone’s cup of tea, but to me it is a dream. And I mean, how many people can say, “Let me take you out to dinner at my workplace,” and actually make that sound like a really attractive proposition?
Today was the first orientation day for us new LLM and JSM students. A really diverse crowd of law students – we have people from Canada, Brazil, Argentina, Colombia, France, Germany, Spain, Belgium, Italy, Israel, Egypt, Kenya, Japan, China, Singapore, Thailand and New Zealand (and me from Australia). Lots of people from Japan and China actually (they comprise maybe 25% of the total intake). I was surprised that there wasn’t UK representation, but then I found out that our resident Thai went to high school there and studied at LSE. Everyone seems pretty nice and down-to-earth, which is terrific. Not too many cultural differences at this stage, apart from some differences in types of humour (a joke not understood and not explained can be counterproductive!) and Jesse having to readjust the pronunication of his name (with the Great Kiwi Vowel Shift, he normally says “Juss-ee” which is then interpreted as “J.C.”).
Class starts on Monday and part of the assigned reading is the famous Hawkins v. McGee (the “hairy hand” case), which is basically the American equivalent of Carlill v Carbolic Smoke Ball Company (the “carbolic smoke ball” case), although the former is about contractual damages and the latter about offer and acceptance. Hawkins appears to be used as the first case that law students are exposed to in the US. However, as our lecturer has insisted on us calling her “Muffie” (her real name is Beth), I doubt my first day will be a Professor Kingsfield-ian experience as depicted in the Paper Chase:
“Mr Hart. Could you recite the facts of Hawkins versus McGee?”
Incidentally, there is a library here, the Green Library, which has 14000 DVDs for overnight hire (including blockbusters, indie flicks, foreign films, etc). I need to rent the Paper Chase since I haven’t actually since the whole movie…
Made it to Stanford… running around trying to get all the administrative stuff done. This campus is huuuge and there isn’t a decent supermarket anywhere near that is easily accessible with public transport (at least during the summer holidays, which it now is). Also, I visited and had dinner at the Googleplex tonight!! More on it all later…
… with a cold unfortunately. Trying to pack for the US but am not in the mood to do much of anything at the moment. In my zoning out, I just realized that I’ve slept in six different places over the last six nights: the resort in Redang, friend’s place in Singapore, Aunt’s place, the plane, my place and my parents’ place. Post on Singapore is yet to be written…
“Oh my gosh, you’re all suited up! You’re gonna be out of place here.”
She wasn’t wrong. I had just left the staid, black basalt and grey carpet surroundings of my law firm, hauled ass all the way across the CBD, and now found myself sitting on some plush primary-coloured furniture among a lava lamp and several bright, giant inflatable exercise balls. I was slightly clammy with sweat from the trek despite the winter weather, and the tie didn’t help things. But the mild discomfort was overshadowed by the fact that I was now excitedly sitting in the waiting room of Google’s Sydney office and was finally going to get the chance to check it out.
As luck would have it, a friend scored a job at Google several weeks ago. Google serves its staff freshly cooked meals and they are allowed to bring in friends for a 3-course lunch (apparently up to 4 times a month, accordingly to the rarely-enforced internal policy). I saw this as my opportunity to shamelessly invite myself over and she had graciously accommodated.
You might’ve seen the photos when the office was first opened. Things were certainly as cool as they appear in the photos. The Sydney office is relatively small – only about 200 people – and all of them are supposed to be moving to better premises at Pyrmont in about 9 months. We walked through the cube farm on Level 18, where all the non-techies reside (sales staff, etc). Dell 24″ widescreens appeared to be standard. A number of vacant desks had nameplates reading “Future Googler”. At just after noon, lunch had been prepared so we made our way into the dining room. Apart from the daily buffet lunch that had been set up, the dining room had two well-stocked drinks fridges, a counter laden with snacks, a pool table and a massage chair turned around so it faced towards the window. A small LCD screen showed the day’s menu. They appear to cater for vegans and on Fridays they serve halal food.
We settled at a desk by the window. Various Googlers filtered through the room, all without exception in casual attire (not casual as in “business casual” of “casual Friday”, but true casual). A guy in a t-shirt and shorts walked by in a pair of thongs. Thongs! I need a job where I can wear open-toed footwear. Failing that, there’s always going back to being a university student…
After lunch we headed down to Level 11, where Google keeps most of its engineers. I was told that Google also had some secret stuff going down on Level 16, but we gave that level a miss. The office is very open plan with low cubicle walls, so it was a little surprising that the floor was so quiet (but that may have been because most of the people were in the lunch room because it was pizza day). The Level 11 lunch room also has a table tennis table. There were 30″ Dells everywhere. A few people were working on dual screens as well as laptops (for testing?). The vibe is very relaxed – you could almost feel the innovation in the atmosphere. I don’t think staff morale is a problem at this company.
The hour was up all too soon and I had to return to my office.
My next related mission in life: scam a visit to the Googleplex in Mountain View (and grab lunch there too)!
We had our annual “health and wellbeing” fair at work today. They turned the main function room into a bustling health fair of sorts and set up different stations where you can do all manner of different things.
The firm is currently running through the graduate recruitment process so there’s a constant stream of uni students waiting in reception to be interviewed. The main function room happens to be right next to the reception area, the mild bewilderment of the interviewees was evident as they watched people go into this room which looked like some sort of corporate funhouse and then emerge with showbags. (Hint to guys interviewing: please do not wear white socks with a suit and black shoes.)
I went to the body composition station and the massage station, but they had things like reflexology, iridology, heart checks, etc. They set the massage chairs along the North wall so you get a beautiful view of the harbour as well. Very relaxing. Somewhat surprisingly, my health appears to be fine… I’ve put on about 5kgs since I started working, but it’s still well within the healthy range. They measured some obscure stats as well. Apparently my basal metabolic age is 12(!), which is a good thing, but I’ve been warned it slows with age, making it easier to pack on the kilos. My hydration level is 63%, which is within the average range of 50-65%. This was very surprising, given my low daily intake of water. I get by on one 600ml bottle of water, then have a couple cups of water in the evening. My daily intake typically isn’t much more than a litre. Apparently my bones also weigh about 3 kilos and I have a visceral fat rating of 2.
At the end of the analysis, the person talking me through my stats wrote down some suggestions for me. One of them reads: “Increase physical activity, e.g., take stairs instead of lift.” Sitting on a floor 200 metres above ground level, I still can’t tell if she was joking or not.
About 8 years ago I figured out how to use my mobile phone to post to the web. It was a sort of early, personal edition version of Twitter, as can be seen by my location-tracking posts throughout the course of a day. I also added a location and timezone tagging feature to it so that I could “twitter” overseas… although at up to 75 cents a pop (or about half a cent per letter), it wasn’t the most effective way of updating the blog. If only I had thought to make it multiuser :)
Sidenote: Regarding that second post I linked… oh for the days I could leave work at 5.30pm. I actually got into work at 6.30am today. (Note to aspiring law clerks and grads: “cross-border legal work” sounds much more glamorous than it really is. Much.) And sleep deprivation causes transient bouts of erratic peculiarity. Ros. How are you coping with those private equity deals?
I received a letter from my state MP today – Paul Pearce, the member for Coogee. It arrived in an auspiciously-coloured red envelope and had four Chinese characters written on it. I can’t read Chinese, but it wasn’t rocket science to figure out it said “kung hei fat choi”. It’s Chinese New Year Eve, after all. It appears that Mr Pearce’s staff had gone through the electoral rolls and added anyone with a Chinese-sounding surname to the mass mailing list.
The letter reads, “As we farewell the Year of the Dog and welcome in the Year of the Pig, may I wish you and your family peace, happiness, [etc]”.
Most unfortunately for Mr Pearce, we are actually farewelling the Year of the Pig and welcoming the Year of the Rat. Whoops!
Greetings. I’m now on holidays and it’s time for a much overdue post on some random bits and pieces. It’s been a long but, for the most part, a fairly uneventful year for me.
Tomorrow I leave for my annual overseas trip. Only two stops this time – Hong Kong and Tanzania. In Tanzania, I’ll be climbing Mt Kilimanjaro and going on a short safari through the Serengeti and the Ngorongoro Crater. Quite excited but feeling a bit of trepidation as well…
In the last couple years I’ve never really posted about what I actually do for a crust, so now’s a good a time as any. I’ve been working as a finance lawyer for about a year. In a nutshell, this means we help lenders lend money, and help borrowers borrow it. We prepare and negotiate the contracts that allow this to happen, and also provide advice when things go wrong. A lot of things have gone wrong this year. The “credit crunch” which has been prevalent in headlines for the last few months was sparked off by homeowners in the US not being able to make their mortgage payments. This set in motion a chain reaction which now means people are much less willing to lend money, which is a problem especially if your business depends on being able to get borrowed money… The work’s very interesting, and some lending arrangements can get pretty complex.
This has been the year of Facebook. It seems to have burst out from being a US-centric student’s social network. I’ve found it interesting see people’s different reactions to it… It’s basically the new mobile phone. When mobiles started getting popular at the turn of the millennium, the uptake was generally rapid. Maybe 75% of people in my first year of uni had them? But there was always a small minority who were steadfast in their refusal to get one. They had all sorts of reasons for not wanting them – they could use a payphone, or they valued their privacy and didn’t want to always be contactable, or it was another thing they’d have to carry around. It took several years, but mobiles became a part of mainstream culture and no one complains about “what the fuss about mobiles is”. They’re just nothing particularly “special” anymore.
Facebook is similar. The uptake has generally been rapid, but there’s always a small band of stalwarts who refuse to open an account because they “don’t see the point”. I’m sure that in time, as happened with mobiles, these people will eventually get accounts. Facebook will shift from being a “new fad” and just become a part of cultural norms. A friend has even sent out his annual Christmas “email” by Facebook this year, eschewing the traditional mass email.
6.30pm: I smell a landslide to Labor. Early counts put several marginals at swings of over 5%, but it’s still early days.
6.33pm: notional seats won: ALP/Coalition/In doubt: 12/13/125 (target: 75).
6.40pm: Notional count: 21/20, no swing reported in Bennelong.
6.43pm: Eastern states show 3.5% swing to ALP but 6% in safe seats. Nick Minchin is getting cocky (on ABC).
6.45pm: Bennelong: 0.2% count, 56.2 to 43.8 ALP. Crowd on ABC going crazy, but people, there’s only been 200 votes counted!! Preferences are significant for McKew.
6.46pm: Notional count: 29/24.
6.51pm: Notional count: 32/28.
7.00pm: Boo, ABC having technical problems – no graphs.
7.05pm: Notional count: 41/31.
7.06pm: Macarthur showing swing to ALP in the order of magnitude of 10%!
7.09pm: Bennelong – 3 booths, 4.9% swing. They won’t call this for ages…
7.16pm: Wentworth, 0.5% swing to Turmbull.
7.27pm: Green says PM still on track to lose seat. Eden-Monaro borderline but towards ALP.
7.33pm: Deakin and Corangamite looks towards ALP winning. Computer is calling 4 seats going over to Labor in NSW. Bennelong is one of them. Notional: 58/37 – 4.8% swing 16.3% counted, Queensland still to report. More cheers in background, Green: “not sure why they’re getting excited about that”.
7.36pm: BENNELONG: 6.6% swing AGAINST PM with 6% counted. Phenomenal. Minchin is no longer cocky.
7.40pm: Notional: 61/41. At what point does a landslide become an avalanche?
7.42pm: Green has all but called it for Labor.
7.43pm: Macarthur called for Coalition by computer.
7.50pm: Bennelong swing is increasing…
This will be an exciting day. Just got back from donning one of the purple Maxine McKew t-shirts and handing out how-to-vote cards at one of the polling booths in Bennelong. With 13 candidates, there are all sorts of people out and about thrusting paper at voters. There are pretty much three types of people: the jaded ones who refuse to take any paper, the party loyal who brandish one piece of paper and tell off anyone who tries to give then another, and the undecided/bewildered ones who take anything you give them. It’s also pretty fascinating trying to spot what party a person would vote based on appearances.
Rumour has it that the Libs had hired out people at $80/hour to hand out how-to-vote cards, and I suspect there is some truth to that given the disproportionately high number of people from mainland China doing that.
Earlier in October, I once again participated in the annual EMP Race, this year donating towards the Starlight Foundation.
The event kicked off at Belmore Park, just outside Central Station at the somewhat rude time of 9.00am on a Saturday. Things were reasonably well organised (perhaps not as well as previous years though – for example, there were clue sheet shortages). The route was also shorter than the organisers expected by at least 1-2 hours and some of the clues were, shall we say… highly questionable. The race route was also highly concentrated around the CBD, although this is the first year where the Race has crossed the Harbour.
After a small game involving swapping cards with other teams to spell words, we solved an anagram which directed us to head to Pyrmont Bay Park, opposite Star City. This was done on foot. There, we did a wheelbarrow race where the person holding the legs of their partner was blindfolded and directed from one end of the park to the other. The unblindfolded partner was then required to instruct their blindfolded compatriot to draw various things. Then we were sent back to the Harbourside shopping complex and made to fill out a question sheet about the shops in the surrounding area and find a particular photo from the nearby Yann Arthus-Bertrand photographic exhibition, “The Earth from Above” (which I very highly recommend you check out, if you’re in Darling Harbour).
The next checkpoint sent us to UNSW. We made a dash (or more like a quick walk at this stage) up to Elizabeth Street to catch a bus. There’s something about tourists and buses on Saturday morning. As with last year, just as about the bus was about to leave, this tourist gets on and engages the drive in a 5 minute-long conversation, much to the chagrin of all the racer on board the bus (and delight of all those running for it).
Pulling up at UNSW, we were directed to perform a three-legged walk up and down the main uni walkway, looking for numbers stuck on the back of lampposts. These numbers had to be combined mathematically and exchanged for the next clue, which was the first stupid clue of the race: “Where is a place that you can play ‘HIDE & SEEK‘? The location is hidden somwhere in the clue.”
Think about that one for a while. And keep thinking. After several very long minutes of guessing, it turns out that it the location was Hyde Park. We hopped on a bus again and headed back into the city. The task there was an eating one – each team had to eat a whole chilli and a whole lemon. Dorian foolishly elected to eat the chilli. There’s little that’s funnier than watching someone munch into a chilli thinking that it’s not so bad, only to react like they’ve been smacked in the head a split second later. With that task done, we took a 30 minute mandatory lunch break and then headed off to our next destination – Martin Place.
When we got there we were handed a collection tin and asked to collect at least one donation for the Starlight Foundation. Dorian immediately intercepted a group of three girls and practically demanded they give him one coin. Mortified, I caught up with him and hastily explained what we were actually collecting money for. They took a moment to consider, and then Dorian (it’s always class with him) goaded, “come on, you don’t want to look cheap do you?” I was even more mortified. “Mate, you can’t say that!” If someone had said that to me I would have walked off. But, amazingly, the girls were goaded into action and quite a few coins clunked into our tin.
We were then dispatched to Circular Quay to inspect all the plaques embedded in the ground (part of the “Writers’ Walk”) looking for writer’s surnames which started with the letter “D” (although the clue sheet had been misprinted as surnames ending with the letter “D”). Dorian and I split up, each taking one side of the Quay. We met back up to find, rather worringly, that neither of us had discovered any names at all, so we swapped sides and managed to find four names which the other had completely missed on the first sweep.
The next stop was Observatory Hill, which took some time getting to because we took a couple wrong turns and getting there the long way. Once there, we had to roll down a hill (very dizzy!), inflate a beach ball (even dizzier!) and then kick it up the hill and back. Our next clue was another stupid one: “Go to the place where you’d find the wild mouse.” We were stuck there for a good 20 minutes trying to figure that one out.
We finally figured out where we had to go to next, taking the ferry to Luna Park, the final checkpoint. The last task was to find a guy milling about in the park with a lightning bolt drawn in texta above his eye (a Harry Potter reference). That was pretty fun actually, until we spotted him and he decided to sprint away. We started to pursue him, but quickly determined we were in no mood to run that late in the day and finally caught up with him when he got tired. We finished in a mediocre way, at about 3.00pm in the middle of the pack, an hour behind the leaders (after only being 15-20 minutes behind at lunchtime). Nonetheless, a fun day was had by all!
At work, hordes of moths have invaded the foyer. Hundreds of black specks flutter under the high glass roof of the atrium and impromptu colonies blacken the walls, tightly clustered and nestled in the sandstone and granite corners. The scene in the foyer, normally a staid, prim centre of corporatism, is almost comical. Workers navigate the floor, their gait punctuated by erratic ducking and weaving, as if evading phantom punches. Some people have their camera phones out. Some people are visibly afraid. Outside my window, some fifty-something floors up, moths occasionally thud against the glass. The roads are littered with torn wings and dried moth torsos and the footpaths blotted with a million oily patches.
It’s that time of year again: the Bogong moths are on the move. They know summer’s coming and they’re migrating to the cooler climes of Snowy Mountain caves. Along the way, the nocturnal moths become distracted by the bright city lights and, thinking that the sun’s come up, descend upon Sydney by the thousands. Bogongs are univoltine, which means that they breed one generation each year (yep, I found that off Wikipedia) and therefore the migration is an annual event. Those that do get to the caves aestivate (which is the same as hibernation, but in summer).
Meanwhile, back in the foyer, building management has hired a cleaning guy and equipped him with a back-mounted vacuum cleaner fitted with a 3 metre long attachment. Each day he slowly makes his way around the foyer performing the Sisyphean task of sucking dead moths off the floors, couches, concierge desks and chasing down the live ones crawling on the walls. At least we can all be thankful that they’re not stinging insects.
My workplace is more or less near the centre of the CBD’s “declared area“. Buses terminate at Martin Place where crowds of suits are herded into the pedestrian channels, lined by 3 metre high metal fences anchored by massive concrete blocks. Police linger on each street corner. Newly-installed loudspeakers attached to traffic lights as part of Sydney’s new emergency warning system add that extra bit of East Berlin-charm to the CBD. Helicopters hover in the skies above… even once inside my building, you can hear them, periodically buzzing by the window. My window overlooks the Intercontinental (Dubya’s hotel during the summit) and I can see snipers on its roof. Sirens occasionally wail through the streets from vehicles engaged in what are (hopefully) training exercises. The streets around Circular Quay are virtually devoid of people and vehicles. It’s all quite surreal and a little disconcerting. And the newspapers say that the police are currently in “minimum security mode”. Dubya is going to arrive in the next couple hours and they are going to lock things down even more tomorrow. Employees have been advised to carry proof of ID and employment at all times.
APEC would be a more exciting prospect if they didn’t keep Sydneysiders away from everything with a 500 metre stick. It’s an honour to be hosting it, but to the person on the street, it sure doesn’t feel like it.
I got a phone call from Dad this morning while at work. Bad news. One of my grandmothers died sometime during the night in Singapore. My uncle had the terrible experience of discovering her in the morning slumped in an easy chair. The whole family is in shock – she was in good health and relatively young. No one had time to say goodbye.
I called my grandfather this evening. Judging by the background noise on the call, the house was a hive of activity as everyone had gone over to pay their respects and offer their condolences. It was good to hear that and at least I knew my grandfather was receiving support and comfort.
People often ask me how it’s like being an only child. I think the worst thing about it is the lack of people available to support each other if something bad does happen in the family. At least in my parents’ generation, they have 5, 10, even 15 siblings to help them through times like that. So for me, in lieu of brothers or sisters to turn to, I guess that makes my closest friends just that little bit more special.
Got a new flatmate today. Currently at the barely-know-each-other stage. So you exchange the usual pleasantries etc, but if you really want to know someone these days you Google them :). And this one came with a blog. I’m sure Fred will eventually find this blog entry and may or may not freak out a little (hi Fred).
As the very first question he asked me when he turned up was, “What broadband plan are you on?” I have a feeling we will get along just fine. Except, it seems, where it comes to football. Could be a few fireworks there :).
Was walking down Anzac Parade a while ago and there was this bright yellow poster on the wall with the title “Spreadable” emblazoned on it (along with a picture of a tub of margarine). So my initial impression was that it was another one of those ads for a dance party with a particularly creative (although somewhat graphic) name. But it turned out to be an ad for a Christian event. Maybe they should have given some thought about the name. (Or maybe I shouldn’t have!)
First of all, I haven’t seen An Inconvenient Truth. Second of all, I’m not disputing in this post that global warming is likely to be occurring. However, I do have a bone to pick with people who think that Saturday’s beautiful 36 degree weather is “yet another sign of global warming so why doesn’t the government do anything about it?”
Global warming only requires a relatively small change in mean surface temperature to cause significant changes in the global environment. Let’s check out from Wikipedia and see what we find with regard to temperature projections over the next century.
Models referenced by the Intergovernmental Panel on Climate Change (IPCC) project that global temperatures may increase between 1.4 and 5.8 °C (2.5 to 10.5 °F) between 1990 and 2100. The uncertainty in this range results from both the difficulty of estimating the volume of future greenhouse gas emissions and uncertainty about climate sensitivity.
Assume the most aggressive estimate of a rise in average temperature over the next century holds true: a 6°C rise over 100 years. A temperature change that large would be pretty horrific. But taken a year at a time, that’s only a rise of 0.06°C each year (on average). No one can feel a temperature difference that small. Let’s look at it another way. If we add the average daily temperatures throughout the year (“Yearly Aggregate”), a 0.06°C rise in the average temperature means that the following year should yield a Yearly Aggregate of about 22 degrees more. In practical terms, this could be manifested in a 3 week period where the temperature is one degree warmer, or it could be manifested in a three day heat wave where the temperature is 7 degrees warmer than the average temperature for that time of year. So my point is that given this, it just doesn’t make sense to say “Summer came early this year” and point to that anecdotal gut feeling as corroborating scientific evidence of rising temperatures. It basically shouldn’t be possible to notice global warming just by looking at the temperature report on the news or counting how many beach days there were last summer. The temperature differences are just too small for the average Joe to notice, even over a 10 year period. Therefore, the throwaway lines about the weather just don’t hold water.
Of course, if someone provided me with a better reason, then I might agree with those anecdotal observations. Perhaps something along the lines of – global warming causes more extremes in temperature, so you get more hotter-than-average days and more colder-than-average days (though on balance, there are more hot days than cold ones) which means it’s more noticeable. But I’d only be guessing there.
Went to the Australia vs Bahrain football match on Wednesday. It was good for the first half hour or so. Then we started to see so many stretches come out onto the field you’d think there was a war going on. The Bahrain players appeared to fall for seemingly innocuous contacts, writhing about the field in agony long enough for the stretcher to come out. But of course, as soon as the stretcher appeared, lo and behold, the player was standing up again, miraculously healed and limp-free. Their delaying tactics worked and Bahrain’s under-21 team walked away with an respectable 2-0 loss, achieved in an unfortunately unrespectable fashion.
On the way home on the bus, we noticed a whole bunch of police cars and ambulances around the uni walkway entrance to UNSW. Gang violence? No. Just a bunch of rowdy underagers at an underage dance party bashing each other over the head with pool cues. They must think they’re so hard while the rest of Sydney shakes their heads in amusement. Not such a cool look when you’re writhing on the ground after copping a faceful of capsicum spray! (I’m getting images of Vinnie Jones walking up to the Roundhouse and saying, “I ‘eard you say you were ‘ard… ARE YOU ‘ARD?!“).
Saw a James Morrison gig at The Basement. Great performance, except that next time I’m booking a table. Had a few interesting “added extras” including his new vocal synthesiser and digital trumpet. He also squeezed three notes simultaneously out of his trombone in a pretty cool display of multiphonics. The man also has an impressive set of lungs combined with a circular breathing technique that made him look like a frenetic puffer fish on speed. Great stuff.
Watched The Departed. It’s a Western adaptation of the Infernal Affairs trilogy – a set of Hong Kong films, the first of which came out about 4 years ago starring a big name cast. The Western version, directed by Scorsese is actually pretty good. There are several changes made to the story, but the guts of it remain the same. I’d recommend it, but you must also see the original films (or at least the first one). I thought the original was snappier and more of a fun rollercoaster ride than the Scorsese one which felt a little drawn out and not as twisty. But maybe that’s because I had an idea of where the plot was heading the second time around.
I went to a Werewolf night recently. Werewolf is a game also commonly known as Mafia. The rules are simple and you don’t need anything to play it except people. Sly, backstabbing, two-faced, lying, shameless people. And the more the better.
Let’s say you have 12 people playing (plus 1 person who is the game’s “narrator”). You allocate, by some random, secret means, three people to be werewolves, and the rest to be villagers. The game has two phases, day and night. In the night time, the narrator gets everyone to close their eyes. The werewolves then open their eyes and by hand gestures, indicate to the narrator which villager to kill. The werewolves close their eyes.
The day phase starts with everyone opening their eyes. The narrator tells who was killed during the night – that person is then removed from the game (but spectating is quite fun). People then have to work out who are the werewolves. At the end of the “day” everyone votes. The person who receives the most votes is lynched. The identity of the lynched person is then revealed. The task of the villagers is to kill all the werewolves during the day. The task of the werewolves is to bring the villager population down to the same size as the werewolf population (during the night and by manipulating votes during the day).
Variants can be added in, with people being allocated “special roles”. For example, a seer is a villager who gets to wake up during the night and obtain the identity of a player from the narrator. The seer can then disclose this information in the daytime (although they are likely to die quickly that night). The other problem is that multiple people can then claim to be seers.
It kept us entertained for hours, was good for helping people remember people’s names and breaking the ice. At the start of the night the group was fairly hesitant and quiet, but by the end of it slander and accusations were being blasted about left, right and centre.
I just have to recount one game where I managed to thread the eye of the needle. There were 14 players including 2 werewolves and 1 werehampster (Jonathan, myself and Jo), 1 seer and 1 witch. On the very first day, the crowd sentiment disturbingly looked like it was turning towards Jonathan so on a whim I decided to vote for him, despite him being a fellow werewolf. Much to his chagrin, he was narrowly voted off with 4 votes. The loss proved to be a boon for me further down the track. In the second round, in an amazing case of bad luck for us werebeings, suspicions turned to Jo and she was voted off nearly unanimously (sensing the bloodthirsty atmosphere, I was forced to jump on the bandwagon). So there I was, 1 werewolf against 10 raging villagers. And to my surprise, I began to pick them off one by one. Suspicions never rested on me for very long because I could always point to voting against Jonathan and Jo. The other issue was selecting very carefully who to kill at night. Even when Simon developed an accusatory attitude towards me, I left him alone for several rounds at night. In the end, I managed to turn his seemingly wild accusations against him during the day, convincing the rest that his crusade against me was evidence he was a wolf. He was promptly voted off. I also tried to quickly kill off those physically closest to me so they wouldn’t hear me moving around at night. The other consideration was to kill off people who “vigourously” voted for someone else in the previous round – in the daytime you could then accuse that someone else of committing a revenge killing to shut up his or her “vigourous accuser”. In the end, it was down to three. I had enough trust at that point to be the person in the “pivot role” – with the other two people trying to convince me that they weren’t the wolf. All I had to do was confirm they were going to vote for the other person and my work was done.
But that destroyed my credibility for the night. In the next game I was unanimously voted off in the first round (I was a villager).
The second day of Spring, last Saturday, was a great day for holding the annual EMP Race – an Amazing Race-style one-day competition around Sydney with entry proceeds going to Canteen.
The start this year was in the Domain, with around 30 teams impatiently waiting for the start in the hot sun. There was a bit of a delay, but we got going at 11.00am. The first task was to win five games of rock, paper, scissors against any other team, followed by a short wheelbarrow race to the first checkpoint.
The first checkpoint was a detour. We were to proceed to the State Art Gallery and pick whether to do a bunch of Sudoku puzzles, or go look for cows in the Gallery. Alison was pretty quick to veto Sudoku (if only I had a 3G mobile), so we were off in the Gallery looking for a room that “looked like a hat” which had a painting called Canterbury Meadows in it. After wandering around for a few worrying minutes, we didn’t find any room that looked remotely like a hat, but we did find a room with a bunch of Racers furiously pointing at a painting filled with farm animals. In a few minutes, we were off to report our results (how many cows we had counted) to the checkpoint people, passing a bunch of perplexed Racers on the Gallery steps who were still trying to put numbers into boxes.
The next clue took us to Pitt St and a store which “Megan Gale should not be seen promoting”. We darted across Hyde Park, up Market St and into Pitt St Mall outside Myer. There we had to sing a nursery rhyme for three minutes (we got Old Macdonald had a farm) before being directed to go to the Fish Markets. As I was trying to figure out what bus we should take, Alison was already running to the bus stop behind the QVB (and this is despite her being a Pom for most of her life). Our timing was impeccable, and the bus pulled up as we got there. Unfortunately, hordes of Saturday morning tourists were taking their sweet time embarking, so we must have sat there for about 5 stressed minutes before the bus finally chugged off.
At the Fish Markets we had to gather a few prices, read the “conditions of entry” to the markets (maximum $500 fine if you bring a pet there!), and other miscellaneous tasks. The next clue directed us to the field where “Nerds FC” was filmed. As luck would have it, I used to do dragonboating in the area, and we used to buy lunch at the fishmarkets and eat it in the park next to it – Wentworth Park – which was also the Nerds FC stomping grounds.
There, we found another detour – either kick a soccer ball around the pitch, or colour in an outline of your partner on a large roll of butcher’s paper. We made short work of that, thanks to the small size of Alison’s profile. We were then sent to Railway Square. Failing to determine if there was any way via public transport, we basically jogged to George Street and caught a bus up to Railway Square. (It turned out that at least one other team decided to pay for and catch a tram to Central and walk to Railway Square.)
At the Square, we discovered we were currently in the pole position. We were then handed two bits of paper. On one was a bunch of countries’ flags which we had to identify. The other contained a “catch-phrase” type game which produced names of train stations. Once the train stations were determined, we had to find out what platform trains going to those stations left from. A well placed phone call to Kev made short work of the flags (who handily had a wall atlas with world flags on it). However, we made a mistake with one of the train station names (picture of trumpets and a bee – we incorrectly guessed Toongabbie) and had to waste a good 5 minutes tracking back to Central to rectify our mistake (the correct station was Hornsby).
The next clue sent us to Newtown via bus, where we met with frustration. The task involved finding out the names of various shops along King St, but we had to retrace our steps several times trying to find the correct stores. By the time we got to the checkpoint, there were already several teams ahead of us.
After the thirty minute mandatory rest period, the Race organisers decided to give us an unusual two-part task. First we had to count the 600+ tiles on some steps, and second we had to cover a meat tray (the type you get mince on at the supermarket) completely with string (there were rolls and rolls of the stuff). The latter task took considerable time, during which several half-bemused passers-by shot confused looks our way as Racers kept muttering, “You can’t be serious.”
With meat tray successfully wrapped, the next clue sent us off to the Paddington Gate of Centennial Park. The lunch break had cooled my muscles down, and the sudden re-exertion on them threatened to cramp them up. Luckily I had a few bus rides to stretch out. To get to Paddington, we had two options – a 378 from Railway Square, which I had never taken before, and a 380 from Elizabeth Street, which I had taken before, but was further away. One other team was on the same bus out of Newtown as we were. They elected for the 378 but we made for the 380.
At Centennial Park, we arrived at another detour. Option 1 was to make and wear a newspaper skirt, as well as drink a Tabasco, chilli, vinegar and lemon “shot”, eat a spoonful of Vegemite and a Weet-bix (Alison once again was quick to veto this). Option 2 was to shred five carrots and make a picture out of the shreddings representing the theme, “all the money in the world”. Which was quite fitting given the gratuitous wasting of food we were engaged in – something that would be unthinkable in most parts of the world. One abstract art masterpiece later and we were off to the “Icebergs side of Bondi Beach” to look for someone named Jeff.
We got to the bus stop, but our run of serendipity with buses came to an end and we had to wait for some time for a bus. Another team had arrived in that time, but they elected to catch a 378 which only went to Bondi Junction – which is not Bondi Beach. A 380 finally came and we hopped on.
The 380 crawled through Bondi Junction where sizeable crowds of people were enjoying a nice Saturday afternoon of shopping. It was quite hot – just like a summer’s day and the bus ride made us incredibly drowsy. All the running about was taking its toll.
Finally we got to Bondi and we made a beeline for Icebergs. We couldn’t find anyone that looked like they were part of the Race. We asked the bouncer but he replied that there wasn’t a Jeff there. After a bit of to-ing and fro-ing, we ascertained we were meant to be down on the beach and not up at Icebergs. On the beach, we were to build up a pile of sand to knee height. Exploiting the lack of guidelines surrounding that instruction, we simply took a previous team’s pile and moved it across one metre to make our own.
Next destination: “Take a 30 minute walk to Tamarama.” And walk we did, because there was no way we were going to be running at that stage. On the way, we walked past Icebergs again, past a group of guys in newpaper skirts talking to a bouncer who was yelling: “For the tenth time, there’s no Jeff here! Now go away!”
The coastal walk between the eastern suburbs beaches (Bondi, Tamarama, Bronte, Clovelly, Coogee) is normally a nice one, but we weren’t really in a condition to appreciate the view. Along the way we had time to digest the next clue, which detailed a manual labour task involving filling up a bucket with seawater using a milk carton with holes poked into it. That was the description, but the reality was a rude shock.
When we pulled up at Tamarama, the “buckets” were large margarine containers and the “milk cartons” were the small containers your grandmother keeps her pills in. With a hole in the bottom of them. The containers were all placed at least 25 metres from the sea, necessitating a dozen torturous trips over the soft sand to shuttle water to our container.
After that sadistic task, the final leg was a painful walk down to Bronte Beach. (My calf muscles had all but packed it in at that stage and I was literally on the verge of cramping with every step.)
We finished just before 4.30pm, placing 5th, with the winners ariving at 4.13pm. Despite the pain involved, it was actually a very fun day! Till next year then.
Okay, well Thredbo wasn’t that dismal, but when people were wandering around the village in t-shirts, we were left wondering if we would be better off bushwalking instead. As expected there were lots of icy patches, exposed grass, dirt, rocks. Still, there were a few passable runs.
Don uploaded some trip photos here. (To explain a picture there, that spoon I’m carrying has a bit of cognac in it… in lieu of a tumbler, which would surely have killed me.)
Received under the door, a card: “I called today to remind you to return your completed Census form(s), however no one was at home.” The card contained the census collector’s phone number. Robin called him to say we had filled out the online form. The reply was that the form wasn’t filled in correctly. However, he could not identify which online form was the culprit (Robin and I filled out separate forms), nor could he explain why we had received confirmation numbers after successfully filling out the form. Of course, once you complete the form, you’re locked out and can’t get back in. At least I kept my confirmation number and know they can’t fine me straight away. It’ll be ironic if filling out the online form proves to be more hassle than just handing in the paper version.
Still waiting for Doz to get back… and I’m having a few problems getting his user ID and timezone settings set up. Never had to add an extra user to this blog before…
And we’re off. I’m going to hand over the posting to Doz soon when he gets back from his party, so I can grab a little shut-eye before the long haul. I’ll probably cobble together some posts with actual content on the other side of sleep.
Site is looking a bit lonely, so I’m going to chuck in a series of disjointed and somewhat random sentences: Got around to watching Firefly. It really is a fantastic series, pity it was cut so short. Getting really cold in the mornings, and it’s not even Winter yet. After five years, I finally tried the Colombian restaurant down the road (La Cumbia), it’s not bad, but I can’t say I’ll be
9:00pm 
& the major lessons I learned
