baz.com - Brett Thomas' Blog

California Responds to Our Lawsuit

Thu, 09 Jul 2009 15:26:50 -0800

As expected, California responded to our lawsuit, Peña v. Cid (in which I am a plaintiff) with a motion for dismissal.

Amusingly, in their response, they make a point of summarizing the arguments for each of my three co-plaintiffs. For example:

...Vargas wants to buy a "Glock 21 SF with an ambidextrous magazine release" from a willing seller, but that he cannot because the handgun is not on the roster. (Am. Compl. ¶ 39.) It alleges that the "Glock 21 SF-STD is listed on the California Handgun Roster," but that the Glock 21-SF with an ambidextrous magazine release "is better suitable" for left-handed shooters like Mr. Vargas, who "was born without an arm below the right elbow."

In each case for the other plaintiffs, at least a paragraph is given, explaining what handguns they wish to purchase, and why those handguns' unavailability is unreasonable.

Me? I get one sentence: "Finally, Thomas wishes to purchase a 'High Standard Buntline style revolver' but cannot because it is not on the roster."

Of course, the handgun I wish to purchase is precisely the one the Supreme Court said Dick Heller had a right to purchase in Heller v. DC. Surely, their omission of this explanation for why I should be allowed to purchase it was merely an oversight.

Mango Avocado Salsa

Sun, 10 May 2009 17:00:56 -0800

Made it up myself, mostly, though it was inspired by a dish from Mistral.

2 Ripe Mangoes (or papayas)
2 Ripe Avocados
2 Ripe Tomatoes
2 Limes
7 Cloves of Garlic
1 Tsp of salt
2 Tbsp of Olive Oil

Mince (or press the garlic). Juice the limes. Dice everything else. Toss it all together. The lime juice will keep the avocado from turning brown if you cover it, so you can store it covered in the fridge at least a day. Maybe more; it's never lasted long enough for me to find out.

Goes great with grilled light-fleshed fish (we're particularly fond of Ono grilled over mesquite with this). Or probably great with anything else, and I know I started out making half this much, but whatever's left over I think gets eaten with a spoon.

If you're partial to cilantro, onions or jalepeños, any (or all) of these would be great in it. Every so often, someone opines there's a little too much garlic, but I ignore that advice under my general policy that there's "no such thing as too much garlic."

UPDATE: I tried to make this and noticed I'd forgotten the olive oil from the recipe, which is important. Fixed!

Kidly Conversations

Sat, 18 Apr 2009 21:33:45 -0800

Derek, examining the cookbook 365 One-Dish Meals: "But, some years have 366 days. Then you have to order pizza."

Our dinner conversations often track across history, or science, or engineering, or all kinds of other interesting topics. I'd been telling the kids about Liberty Ships, and giving a description of the engine room I'd received from a friend who is very much into naval history.

Dad: "They had this massive one-cylinder engine for the whole ship."

This is not actually correct - it was me misremembering my friend talking about how big just one of the pistons was. The engine was also steam-powered, thus rendering a lot of the following conversation irrelevant as to Liberty Ships.

Blake, 9: "Was it two-stroke?" Dad: "Could've been four-stroke."
Blake: "Maybe it had a flywheel."

I tried again to explain to him that they had been designed to be very simple, and that they probably wouldn't have built an engine that required a flywheel. His return implied that it must have, then, been two-stroke, and after switching from thinking about Liberty Ships to thinking about engines, I got his point.

Dad: "Oh! You're saying it couldn't be a four-stroke engine, since you'd need a second cylinder to run the non-firing part of the cycle."
Blake, patiently: "...Or, a second-cylinder analogue. Like a flywheel."

This, it turns out, is not strictly true - the Wright Brothers' first airplane had a four-stroke, one-cylinder engine (in fact, a lightweight, powerful engine was one of their key developments). I was so pleased with the phrase "a second-cylinder analogue" being casually tossed about, though, I had to write about it. In some sense, the engine itself could be considered a "flywheel analogue" in that design, in that it stores the momentum from the firing cycle and uses it to push the piston through the other three cycles.

The Mighty Huntress

Sun, 05 Apr 2009 22:13:32 -0800

Betsy sometimes says that, of all the animals she's brought into our lives, the one I've bonded with most is a fish. Buttercup is an electric yellow cichlid. While this isn't a picture of her, it looks an awful lot like her:

While aimlessly pointing an infrared heat sensor gun (with helpful laser sight!) around a few months ago, I discovered that Buttercup will, just like a cat, chase a laser pointer. This cemented our relationship - I'll often sit in the kitchen, working on my laptop, and she's just behind me. I figured out about eighteen months ago that she could see me, and was aware of me. If I touched her tank, she'd initially retreat, then come investigate my finger. I've wondered if she were hunting the laser dot, or chasing it - cichilds are very territorial, which is why Betsy gave her a tank to herself.

I did a little touch-up exterior painting, today. Part of that included painting the part of the back door frame I'd replaced years ago and never gotten around to coloring. Deciding that the door sticking closed would be bad, I wedged it in a half-open position for most of the afternoon. In that interim, a very large housefly got in.

This evening, after everyone else had gone to bed, the fly was buzzing up along the kitchen ceiling, noticeably loud and annoying. About fifteen minutes later, I heard odd noises coming from Buttercup's tank. I looked over to see her lunging at bubbles on the surface. "Poor fish!" I thought. "She's so bored she's pretending there's food floating on the water!"

Almost as soon as I started paying attention, she swam back down, with a fly in her mouth practically as big as she was! Seems likely she's hunting the laser dot...

RSS Paragraph Breaks

Sun, 15 Mar 2009 02:52:09 -0800

Being not generally narcissistic enough to subscribe to my own newsfeed, I was unaware until I tried to connect my RSS feed to my Facebook account - because I am narcissistic enough to want all my friends to read my writings - that paragraph breaks weren't coming through in RSS.

I believe I have fixed that, now, and this post is intended as proof of that.

Still Human

Sun, 15 Mar 2009 01:49:12 -0800

Documntarian Rob Spence wants a camera where his mother put an eye. Aimee Mullins' parents weren't able to provide her legs - or, in any event, not all of them - and, as a result, she has more square inches of leg than just about anyone else. Alex Tabarrok - who, as far as I know, still has both the eyes and legs he came with - thinks that Aimee's talk at TED is "notable in so clearly marking the point at which post-humanity has begun".

Unless we place the "post-human" point so that its mile-marker is already distant in our rear view, it is one we have not yet passed. Many of the legs Aimee proudly displays (such as the beautiful hand-carved ash set) would certainly have been possible in an earlier time. Perhaps the society that would allow her to display them is a bit newer. The true "post-human" age, however, will not arise until people begin maiming themselves on purpose to have faster legs, or cameras in their eyes - and until such actions are seen as normal.

Mr. Spence's eye will have to not just record his vision, but send it to his brain, and more, before many will choose to replace their peepers. It seems likely, that some - filmmakers, like he, perhaps - will desire this sort of change before the rest of us. Even before the technology improves, that much. Speculation on this topic hit the mainstream when Oscar Pistorius was allowed to tryout for the Olympics in 2008. Should prosthetic-legged sprinters be allowed to compete with naturally-shanked ones, the former will begin to win, and a non-zero number of the victory-at-any-cost latter will become interested in trading up.

Medical ethics - still saddled with "First, do no harm" - is unlikely to adapt to these desires, quickly. The first brave pioneers of these technologies may actually have to injure themselves in order to get surgeons to repair (and improve) them. Putting one's eye out is an unpleasant business, though possible enough to do "accidentally" - and without further accident. Self-double amputation will be more ill-starred.

These ethical concerns will obviously not stop the truly motivated (or insane) from improving their bodies, as technology eventually begins to beat evolution in feature-set. Some people already feel that truly nothing would be better than the limbs they have, now. Applying Moore's Law to the human body (and mind) will be a long-term good. The ethical tangle between here and there will be nearly as impressive as the technology we'll create. More impressive still is how quickly we'll be caught in it.

Pizzablogging

Sun, 08 Mar 2009 17:53:05 -0800

When we went up to Bear Valley a few weeks ago, I decided to do some cooking other than what I usually do. Most of my cooking is limited to stir frying (though I like to think I have a fair range on that) and grilling. I dabble in things like Mac & Cheese - once a year at Christmas - and spaghetti sauce, but mostly if I cook it, it's in the wok or on the grill. I took one cookbook - The New Best Recipe, which Betsy refers to - not without justification - as The New Most Complicated Recipe. One of the things I was interested in trying was making my own pizza, dough and sauce included. I was a little worried by my lack of a pizza stone (a heavy, generally ceramic "stone" used to hold heat and cook a pizza, quickly), and the fact that pizza dough is a yeast-risen recipe, and I was making it at 7,000 feet for the first time. Making the dough - the first time I've ever made any yeast-leavened dough - was very simple. The recipe provided didn't have any sugar, just flour, yeast, salt, water and olive oil. Completely winging it, I took a pizza pan and decided to pre-bake the crust a bit before I put the toppings on it, so the oven heat would have time to cook the crust first. I then pulled out the crust after six minutes (the cookbook recommended 6-12 to cook the whole pizza with a stone), topped it, and put it back in the oven. I was a bit nervous when the cheese melted and started to bubble, but the crust was still flour-white after six minutes. However, finally, after another six or so, for a total cooking time of about 18 minutes, the crust browned a little, and I pulled it out. The result was crispy and chewy, and very popular. When we got back, I started researching how the whole "pizza stone" thing worked. You need a stone (obviously), and a pizza peel. The stones are generally available for tens of dollars at cooking supply stores, and the pizza peels have similar prices. My first thought was that the peel was simply wood - and I had a shop full of that, so I resolved to make my own. I then further read that it is possible to purchase an unglazed paving stone at Home Depot for $.99 (I found one for $.97, on sale). Saturday, I cleaned out the shop and made the pizza peel. I made it with the last birch scraps from Blake's table - my first woodworking project. As soon as I cut into it, the smell of the sawdust really took me back. I also used as a template for the curve on the leading edge the template I used for Derek's bed. The peel itself was pretty straightforward to make, and I chose a handle length I liked (longish) to make getting it out of the oven easier. Sunday was pizza night, and all the work finally came to fruition. I heated the stone (getting to 550 took a little more than an hour) and stretched out the dough. Cornmeal scattered on the pizza peel, I topped it with sauce, cheese, and pepperoni: ...and, onto the stone it went: I was astonished at how quickly it cooked compared to my experience in Bear Valley. Six minutes later, the crust was brown and the toppings done: Using the pizza peel to take the pizza off the stone took a little learning - you need to get the peel about half under the pizza, pick it up, bring it out, and slide the pizza onto the peel. I was very happy with the result. If you're not making your own peel every time, the dough and sauce are easy to make. Pizza is a mature technology - I'm sure any recipe you find for sauce and dough are a reasonable jumping-off point.

De gustibus non est disputandum

Mon, 02 Mar 2009 21:29:33 -0800

In an otherwise unremarkable review of three mysteries, Ron Rosenbaum notes that, while he loved David Foster Wallace's "cruise ship tour de force," [sic, I note, self-righteously] he was "infinitely" dissappointed in Infinite Jest. We share in common a great love of Wallace's nonfiction. Everything and More was an excellent book, marrying great literature, math, and history into a unique work. I read it on a foggy weekend-away vacation while the inlaws watched the kids and my wife and I hung out in a hotel in Half Moon Bay, and I remember both the vacation and book as being extremely pleasant. Infinite Jest was the first item of his I read, and it was a great joy to me to go back and read his nonfiction, after, and see him develop his voice. Perhaps, also, I have a personal connection with the novel - my late step brother was a near-tennis pro who got so involved in drugs and alcohol that they ended his life. It was hard not to see family and friends (and myself) in many of the characters, and the unfolding of the story was masterful. Wallace had as throw-away side plots devices that most authors would base a whole novel on, and Infinite Jest has to rank for me as one of the most satisfying, frustrating, funniest and unpredictable books I've ever read. His essays, in general, I found to be slightly less than his final (I presume) novel. While they were enjoyable, I think they had a certain easy elitism to them. "Ticket to the Fair," in which he attends the Illinois State Fair, is funny, but has many cheap laughs at the expense of uncultured flyover-state denizens. Far and away the worst example of these, though, is "A Supposedly Fun Thing I'll Never Do Again," the aforementioned tour de force about taking a cruise. In this, a boorish Wallace takes a cruise on the Zenith. He decides beforehand to take no companions, eschews shore leave, and packs a tuxedo t-shirt for formal night. Surprisingly, he finds cruises to boring. I am of course, obligated to note that I'm not much for cruises themselves, either. My wife and I took one to Alaska some years ago, and we had a lot of fun - but mostly by avoiding the cruise ship itself as much as possible, and spending the time we were aboard reading and watching Alaskan scenery pass by our cabin's balcony. Making fun of cruise ships as being uncultured is like...well, making fun of state fairs. Anyone can do it. I suppose I can understand complaining that Infinite Jest is full of "derivative, post-Pynchon, oh-so-tiring tricks." I just can't understand the same pen celebrating an essay that rechristens the Zenith the sophomorically obvious Nadir.

Comet Lulin

Fri, 27 Feb 2009 22:23:08 -0800

As I was getting ready for bed, tonight, I thought to stick my head outside and see if it was clear. To my surprise, it was! I knew Comet Lulin (C/2007 N3) was naked-eye visible, if you lived in a dark place, and near Saturn, so easy to find. I looked up its location, and discovered it was practically in conjunction with Regulus, the brightest star in Leo, the lion. Combined with the close proximity to Saturn, it was very easy to find the place to look, so I grabbed my binoculars. Even in my light-polluted skies, it was easy to see the smudge. I then decided to break out the 100 mm refracting telescope, which, between various minor physical ailments and the cloudy Bay Area winter skies, I hadn't done in a long time. I decided at first to simply run it manually, but it was very difficult to get a good fix on it - the way the 'scope wanted to point, it was hard to lock it and look at the target at the same time. I broke down and pulled out the battery for the telescope, got it roughly polar-aligned, and skewed it over to the location. Finally! I was able to get a very good view of the coma through a 12.5 mm eyepiece. I now understand very clearly why Messier felt compelled to make his list of "comet-like" objects so he'd not keep mistaking them for what he was hunting. I was just vacillating between trying to take some pictures of it, and getting Derek out of bed. I know he's always wanted to see a comet. But, the perfectly clear skies suddenly filled with clouds from the west - in five minutes, it went from clear to unviewable. Hopefully, we'll have some clear skies tomorrow, early, before too far after Derek's bedtime. It's a tough balance - every night, the comet rises in the sky, but gets further from the sun (and becomes dimmer).

"It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts."

Wed, 04 Feb 2009 17:57:11 -0800

I (rather randomly) began rereading The Complete Sherlock Holmes for the first time since I was about 14. I'd say the thing that surprises me most is that someone who was so elegantly able to describe the scientific method was such a nitwit when it came to actual science. Obviously, I'd known the latter, but I'd forgotten the former.

My opposition to any explanations of why "stimulus" will work

Fri, 23 Jan 2009 13:58:15 -0800

Megan McArdle pithily sums up what so many seem to be avoiding thinking about:

[T]he actual empirical evidence that massive government spending can shock an economy the size of ours into a permanently higher level of output is . . . well, it's sort of hard to find a wittily apt description of something that doesn't really exist.
There's a lot of solid Keynesian theory that says it will be so. But not that long ago we had a lot of pretty good theories from very smart economists about how this sort of financial crisis couldn't really happen again in the first place.

And, that, to me, is the crux of my skepticism (some would say cynicism) about a major government stimulus package. Yeah, theory says it will work. But, theory said we wouldn't get here again, anyway. It's like using a geocentric theory to predict the solar orbit of a newly discovered planet. Before you can get me to pay any attention to how good your theory is at predicting this orbit, you need to explain to me why your theory was wrong about the existence of the object in the first place. I mentally "turn off" any economist I hear talking that does not begin with something along the lines of "clearly all our theories were wrong, so we're having a lot of trouble coming up with an explanation for the current crisis that isn't just a guess." Anyone who thinks they know what caused this crisis (much less how to fix it) is simply deluding themselves. We might have an idea in twenty years - but I think there's a growing feeling (at least among the libertariany economists I tend to read) that we were wrong about thinking we understood the Great Depression, too. I know "do nothing right now because we might make it worse" isn't going to be a popular message for politicians (or economists!) to deliver. I understand, in fact, that no one of any note is going to deliver that message. Sadly, I think it's the the best course we can chart now with the data (and theories) we have.

2008 California, County of San Mateo and City of San Carlos Propositions

Sun, 02 Nov 2008 18:06:00 -0800

As is my wont, I spent (with my wife's help) a lot of time thinking about the propositions we have to vote on, this year. Only a couple of these were completely obvious to me right out the gate, and a couple of our decisions surprised me a little bit. I'd like to document my thoughts on it, and explain things - in part so I can keep myself honest on what I was thinking, later, and, obviously, in hope that I can convince some people to vote the way I'm going to. In order: NO: 1A - SAFE, RELIABLE HIGH-SPEED PASSENGER TRAIN BOND ACT I'd love to see a high-speed bullet train to Los Angelas, I really would. Call me crazy in thinking that right now isn't a good time to borrow billions of dollars to do it. YES: 2 - STANDARDS FOR CONFINING FARM ANIMALS. INITIATIVE STATUTE Some may find it surprising that a libertarian like me is voting "yes" on this one. My wife was an aggie major at Cornell, so she's been inside these farms. Most of what the proposition ads highlight are actually irrelevant, for a number of reasons. The primary effect of this proposition would be to take chickens that lay eggs, which are currently confined six-to-a-very-small-cage and make them instead be confined at something like two-to-a-very-small-cage. The law seems to us to be surprisingly well-crafted; it does not, in fact, outlaw most reasonable farming practices. I do feel that animal cruelty is an important moral issue. Megan Mcardle, who is now a vegan, wrote last year:

...I'm essentially an aggregate utilitarian: I think that as long as [animals'] lives are worth living, it is a positive good to [raise them to] eat them. It is hard, to be sure, to determine what a chicken considers "the good life". However, I'm pretty sure that industrial farming conditions do not constitute a life worth living; if those chickens had the cognitive and mechanical capacity to commit suicide, they would.

This is my position as well. Seeing that Prop 2 seems to be well-crafted to attack specifically this issue, I am supporting it. NO: 3 - CHILDREN'S HOSPITAL BOND ACT. GRANT PROGRAM. INITIATIVE STATUTE In the state of California, bond acts get qualified for one of two reasons - either the legislature approves them, in which case they have to ask us to fund the bonds, or, groups can come up with their own acts without any consideration by the legislature of whether there is a need. One of the most egregious misuses of the proposition system has been for construction interests to push bond acts for popular-sounding projects in hope that they'll receive the money spent. I'm unclear who's behind this initiative - construction groups, hospitals themselves, or even the parents of sick children. Regardless, this is a case of an interested group trying to get us to borrow money and spend it on them. The legislature didn't vote on this proposal. My general policy on bond issues is to vote "no", especially now, and especially on items that weren't vetted by the legislature, to begin with. NO: 4 - WAITING PERIOD AND PARENTAL NOTIFICATION BEFORE TERMINATION OF MINOR'S PREGNANCY The existence of fundamentalists of all faiths make a "no" vote on this one pretty obvious to me. YES: 5 - NONVIOLENT DRUG OFFENSES. SENTENCING, PAROLE AND REHABILITATION This one was hard for me. The other terrible abuse we've seen of the proposition system has been to "earmark" some amount of the general budget for specific policy outcomes. Because we've been doing this for decades, I think it's quite possible we're now looking at a system where having a balanced budget in California would actually be illegal. It's certainly impractical. However, I also believe that the greatest moral outrage our country perpetrates on a daily basis is the War on Drugs. It is my deepest hope that all the Democrats outraged at the treatment of prisoners at Gitmo and the perceived loss of civil liberties under George W. Bush will transfer that anger and hatred to what we do, every day, to our own citizens in order to prevent them from doing things that harm only themselves. Of course, I'm not optimistic. In any event, as much as I am generally opposed to "earmarks" of this nature, it is very clear that the politicians in Sacramento are too afraid of being seen "soft on crime" to make rational decisions, here. This proposition, while far from perfect, would try to shunt non-violent drug offenders into a treatment and rehabilitation program, instead of sending them to prison in order to shut off any future job opportunities and teach them how to be real criminals. In the end, I feel I have to hold my nose at the funding methods and vote "Yes" on 5. NO: 6 - POLICE AND LAW ENFORCEMENT FUNDING This is an example of the type of earmarking I'm clearly against. This earmarks nearly a billion dollars - helpfully indexed to inflation to keep rising in the future - for "police, sheriffs, district attorneys, adult probation, jails and juvenile probation facilities". It also "Makes approximately 30 revisions to California criminal law, many of which cover gang-related offenses. Revisions create multiple new crimes and additional penalties, some with the potential for new life sentences". Because, you know, we just need to have more things illegal and put more people in jail for longer. NO: 7 - RENEWABLE ENERGY GENERATION This requires that, by 2025, 50% of the power generated in California must come from "renewable" sources. Note that nuclear does not count as "renewable" (which, honestly, it isn't, but that's not really relevant to anything). This is just the sort of ham-handed top-down control we tend to regret later. If this passes, no doubt, the same people who voted for it will be screaming at the governor about how expensive their electric bills are. I'll also note that many leading environmental groups are opposing this as being poorly drafted. Frankly, anyone who is concerned in any way about global warming should vote no; I consider fundamentally unserious any person who thinks that carbon dioxide is a significant cause of rising temperatures and yet does not also support significant nuclear electrical generation. NO: 8 - ELIMINATES RIGHT OF SAME-SEX COUPLES TO MARRY If you feel otherwise, don't argue with me, because I'll probably end up yelling at you. This is the closest thing to the civil rights battle of the 1960s our generation will (hopefully) ever see. While I try very hard not to take rational discourse off the table, in my opinion, if you support this measure, you are simply not a member of civilized society. NO: 9 - CRIMINAL JUSTICE SYSTEM. VICTIMS' RIGHTS. PAROLE Makes it easier for victims to keep the criminals that wronged them in prison, longer. There have been a few cases of people getting paroled who shouldn't have. However, in general, I continue to think that the thing we're not missing in this state is tools to keep people locked up long enough. NO: 10 - ALTERNATIVE FUEL VEHICLES AND RENEWABLE ENERGY This would borrow $5 billion to pay people rebates to buy Priuses (in effect, and do some research). I think this would be a bad idea at any time, it's an especially bad idea when we're already billions in the hole. YES: 11 - REDISTRICTING I continue to consider gerrymandering to be one of the greatest threats The Republic has ever faced. Making the legislature do things that are in our interest, and against theirs, should be what the proposition system is all about. This proposition's loss in 2006 cut off hopes in the proposition system for me. I have no idea if it'll pass, or not, but if it did, it would go a long way to convincing me that maybe all this is worth it. This and 8 were the two I knew how I wanted to vote before I read anything. NO: 12 - VETERANS' BOND ACT OF 2008 This borrows a billion dollars to lend it to veterans to buy houses and farms with. As much as I support the sacrifices our men and women in uniform make, I continue to think that spending a billion dollars we don't have right now is an especially bad idea. NO: San Mateo Q - 8% tax on parking providers NO: San Mateo R - 2.5% tax on rental car companies San Mateo has been running a budget deficit for a while. This is an attempt to close the gap. The proponents try to claim that this deficit has been because of state spending cuts, but it's clear that San Mateo has been spending more money than they get for a long time, now. Since 2005, revenues have gone up 3% per year, while expenditures have gone up 8.5% per year. We need to cut spending, not raise taxes, here. YES: San Carlos S - +$75 parcel tax for San Carlos schools San Carlos, similarly, has been running a structural deficit for a while. Since the unfortunate proposition in 2000 to allow education bonds with a simple majority (rather then 60% majority), they have also come to us, hat-in-hand, for hundreds of millions in bonds, every two years. I'd vowed that, if they did it again, I'd vote "no". This time, however, they have come to us with a tax increase. In part, this actually is to offset lower educational spending by the state. In general, I prefer that these things be funded, locally, and with taxes and not bonds, so I'm supporting this measure.

Flabbergasted

Mon, 06 Oct 2008 21:56:30 -0800

I've known for some time that things aren't working the way people were thinking. I sadly didn't blog about it - in no small part because I couldn't figure out what the heck was going on - but I know the first time I really realized there was a problem was in June of 2007. I believe it was around my birthday, that year. I went up to San Francisco to hang out with my friend, Jeff, and we went to lunch at Bossa Nova, which I am not nearly cool enough to hang out in, but has delicious food. We definitely went to a baseball game, afterwards - I clearly remember being a bit embarrassed about my Giants gear in such a hip establishment, and I know it was a weekend day, with a fairly rare weekend night game. Anyway, at lunch, Jeff commented on a colleague from Europe coming to the US and going on a shopping spree because the dollar was so cheap. I'd been vaguely aware the Euro was up on the dollar, but I hadn't realized how much so. I remember being aghast at the idea that, say, a bellhop in London's work moving bags was worth, apparently, so much more than the work of New York bellhop's. Even taking into account things like trade imbalances, it just didn't make any sense to me that the same amount of labor in Europe was apparently worth more than the same labor in the US. I remember at the end of the day just shaking my head and saying, "there's something going on here that people don't understand." Of course, the Euro was worth $.74 at the end of June, that year - it dropped further from there, hitting its nadir in April of 2008 at $.625. I was baffled why people thought the Euro (and European companies) were a better investment than those here, in the US, given that I believe the US's policies are generally more pro-growth. You can argue that the net trade-off for the average American is worse than for the average European, but I think it's difficult to argue that European companies are going to, on average, grow faster than American ones, or that European GDP will. The good news (for me) is that it has recently turned around. The dollar is back to being worth about what it was in June of '07, as the financial contagion continues to spread. I say good news, because I'm long on the dollar - I pretty much have to be, since I live here. Most of my net worth is tied up in Silicon Valley real estate and a private, US company. If I measure my net worth in, say, Fiats, or oil I've actually had my net worth go up pretty well in the past few months, simply by virtue of currency exchange rates changing. The bad news is that I mostly still don't understand what's going on, and I suspect that nobody does. I saw the oil bubble coming - I was advising my brothers to sell oil a good six months ago. But, the current financial crisis in Europe I didn't see coming. I thought the dollar was too low against the Euro, but it at the same time doesn't make sense that, the more we learn about the US crisis, the faster people buy dollars. The best guess I have right now is that professionals are finally starting to understand that they don't understand. The scope of the crisis in the US, I hope, is mostly known - but what's going on in Europe is even less known. Iceland appears to have bailed out a bank with assets of six times their GDP, and hence literally nationalized the banking risk. Runs (on currencies, banks or any securities) become self-fulfilling prophecies as people panic. I remain optimistic that this will turn itself around. This is probably just the darkest part, before the dawn. The fact that no one seems to really understand anything, or be able to predict the next problem, does not give me hope.

Why Hello There, What a Cute Little Clause You Are! How Did You Get In There?

Wed, 01 Oct 2008 20:53:35 -0800

Paulson's original proposal was three pages. When it was defeated in The House, it was 102. Now, it's 451 pages (thanks to the Wall Street Journal for the full text). On page 88, there is Section 131, "AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING."

The Securities and Exchange Commission shall have the authority under the securities laws...to suspend, by rule, regulation, or order, the application of Statement Number 157 of the Financial Accounting Standards Board [FASB] for any issuer...or with respect to any class or category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with the protection of investors.

I've elided various parentheticals talking about US Code sections. FASB is Statement Number 157, "Fair Value Measurements", which describes how mark-to-market works from an accounting standard perspective. Below it is Section 132 (surprise!), "STUDY ON MARK-TO-MARKET ACCOUNTING", which directs the SEC to conduct a study on mark-to-market, and report back to Congress within 90 days. The study is to attempt to determine if such accounting hurts banks, if it helped cause this crisis, and what we might use as a replacement. I'm sure the rest of it is riveting reading - it starts with the Troubled Assets Relief Program, which it helpfully points out spells "TARP". I guess we'll use it to temporarily cover our Really Outrageous Overwhelming Failure. I am also sure that very few people will have finished reading it by the time it passes. However, the inclusion of at least the mechanism to suspend mark-to-market shows some hope that perhaps some understanding of underlying causes is beginning to seep in. Mr. Paulson, for one still (as far as we can tell) is a fan of the accounting measure - as recently as July, he said "I think it’s hard to run a financial institution if you don’t have the discipline which requires you to mark securities to market." Perhaps he's changed his mind, or perhaps the near future will, and perhaps the SEC thinks otherwise, in any case. It's nice to see they'll have the choice, anyway (if this measure passes, of course...)

The Most Interesting Things Don't Rate Headlines

Wed, 01 Oct 2008 08:59:49 -0800

The Wall Street Journal is reporting this morning that the new, compromise "don't call it a bailout" bill is moving its way through the Senate. It focuses on the proposal that FDIC deposit insurance be raised from $100,000 to $250,000 in an attempt to keep the modestly wealthy from causing a run on already undercapitalized banks. There is a little bit of complexity, there - will they ever be able to get the rates back down, when the crisis is over? Will they be able to get the extra insurance premiums out of already cash-strapped banks? But, overall, that proposal makes sense to me. However, more interesting, and that I had not heard reported elsewhere, is that the SEC on Tuesday issued guidance on the applicability of "mark to market" accounting for assets that have no useful market at the moment. I haven't blogged about this, specifically, but it's my personal belief that the requirement of "mark to market" on illiquid and untraded items (such as Mortgage-Backed Securities) have been a major player in bank illiquidity and subsequent insolvency. From the Journal:

The SEC said on Tuesday that in some circumstances it might make more sense to judge assets not on what the market will bear, but on their intrinsic value -- for example, if they're from a highly respected company that is unlikely to default.

Like, say, Bear Stearns? Still, any relief from the current cycle of revaluing undertraded items, leading to more revaluing is welcome. Further, the article states that one of the items being debated for the new, revised bill, is a suspension of the "mark to market" rule, altogether. No more details are given - I can't imagine they'd suspend it entirely - but it's nice to see Congress and the SEC at finally starting to think about something that has been clearly a big contributor to the ongoing crisis.