longreads

Gary Shteyngart Goes Deep on Hedge Funds and Bitcoin

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I really enjoy all that Gary Shteyngart publishes (see here and here, for example) . In his latest year-long project, Shteyngart has been researching finance, bitcoin, and has written an interesting article about Michael Novogratz for The New Yorker:

I like how Shteyngart brings his own life events into the story:

As a hungry, insecure kid growing up in eastern Queens, I remember watching the movie “Wall Street” and fantasizing about how I would look in suspenders and a contrasting collar. The men on the big screen did not have to understand themselves; the money made them understood. Although my greed had been expunged at Oberlin, and the financial crisis of 2007-08 had left me with a more or less permanent view of finance as an industry built on fraud, I found it hard to dislike some of my new acquaintances. The more intellectually vibrant ones came with backgrounds in advanced math and physics; they approached their trades like a puzzle, albeit one they were increasingly unable to solve. Others seemed to be flirting with the edges of sociopathy, or, at least, an inability to pass “Blade Runner” ’s Voight-Kampff empathy test.

Reflecting on the competitive nature from high school days:

At Stuyvesant High School, a competitive math-and-science school in Manhattan with a high proportion of first-generation immigrants, my classmates and I would get up every morning to wage battle over a hundredth of a percentile on our grade-point average; my new friends were fighting over so many basis points on their Bloomberg monitors. When we failed, we failed in front of our families, our ancestors, our future and our past.

Novogratz on Bitcoin:

He doesn’t think that cryptocurrencies will replace the dollar or the yen, but he believes that they will be a boon to countries in the developing world, where people don’t have trust in their fiat currencies, and that blockchain can revolutionize the way information is logged and shared and, in our age of data breaches, protected. “I’m good at selling the dream,” he said. “I can get onstage and get people to start saying ‘Hallelujah! Hallelujah!’ ”

Perhaps the most cogent piece of wisdom comes near the end of the piece:

After six years of exploring finance, I concluded that, despite the expertise and the intelligence on display, nobody really knows anything. 

Worth the read if you enjoy Shteyngart’s writing and/or are curious about the evolution of bitcoin and what some hedge fund managers are trying to do in the space.

Gary Shteyngart is a Watch Geek

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I really enjoyed Gary Shteyngart’s latest piece in The New Yorker, in which he describes how he became fascinated with mechanical watches over the last sixteen months. A few notable paragraphs and pictures of the watches below.

A good primer of mechanical watches vs. quartz ones:

The difference between quartz and old-fashioned mechanical is that your child’s Winnie the Pooh watch will likely keep better time than a seventy-six-thousand-dollar Vacheron Constantin perpetual calendar in rose gold. A quick way to tell the two kinds apart is to look at the second hand. On a quartz watch, the second hand goose-steps along one tick at a time; on a mechanical watch, it glides imperfectly, but beautifully, around the dial and into the future.

His first watch purchase, a Junghans:

The watch was a Junghans, from Germany, derived from a design by the Bauhaus-influenced Swiss architect, artist, and industrial designer Max Bill. I had bought it at the moma shop for what in my early, innocent watch days seemed like the astronomical price of a thousand dollars.

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A second purchase:

And yet on April 12, 2016, I walked out of the Tourneau TimeMachine store, on Madison Avenue and Fifty-seventh Street, with a receipt for $4,137.25 and a new Nomos Minimatik Champagner on my wrist, the sales clerks bidding me farewell with a cheerful cry of “Congratulations!” By the standards of luxury watches, the amount I spent was small indeed (an entry-level Rolex is about six thousand dollars), but by my own standards I had just thrown away a small chunk, roughly 4.3 writing days, of my independence. And yet I was happy. The watch was the most beautiful object I had ever seen.

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That is a beautiful watch. That orange second-hand adds a nice touch. “These are wild colors but in homeopathic doses,” one of Nomos’s marketing texts reads.

No piece on mechanical watches would be complete without mention of every watch geek’s favorite destination: hodinkee.com:

I was obsessed. And I had time to indulge my obsession. I believe that a novelist should write for no more than four hours a day, after which returns truly diminish; this, of course, leaves many hours for idle play and contemplation. Usually, such a schedule results in alcoholism, but sometimes a hobby comes along, especially in middle age. For us so-called W.I.S., or Watch Idiot Savants, all roads led to one Internet site: Hodinkee, the name being a slightly misspelled take on hodinky, the Czech word for “watch.” Hours of my days were now spent refreshing the site, looking at elaborate timepieces surrounded by wrist hair and Brooks Brothers shirt cuffs, and learning an entirely new language and nomenclature.

On to the next purchase:

In October, my feelings of dread spiked, and so I decided to buy a Rolex. Not a new one, of course, but something vintage—in this case, an Air-King from the seventies. 

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Investigative reporting like this would not be complete without a visit to a watch factory, which is what Mr. Shteyngart did with a visit to Glashütte, Germany:

Visiting a watch manufactory is a soothing experience during chaotic times, and the painfully slow assembly of these beautiful objects may well fall under the heading of “God’s work.” At the Nomos workshop, a monastic silence prevailed as men and women (there are more of the latter than the former) sat at desks, wearing what looked like pink finger condoms and sifting through parts, some of them thinner than a human hair. The work is difficult and takes a toll. Because their hands need to be steady, watchmakers cannot drink profusely. According to Nadja Weisweiler, who works for the German retailer and watch manufacturer Wempe, they are encouraged to take up musical instruments or horseback riding. I observed with special delight as a watchmaker inserted a balance wheel into a new watch, and it came to life for the first time.

The author’s next purchase was at Wempe’s emporium on Fifth Avenue:

I was served an espresso and a Lindt chocolate by a young man who also presented me with a Tudor Heritage Black Bay 36, a glowing black-dial water-resistant watch bearing the famous “snowflake” hour hand of Tudor (a sister company of Rolex). I bought it, whereupon a small bottle of Veuve Clicquot was opened, and although the iconic snowflake hand was still two hours short of noon, I drank it down to the last. In total, I had now given up 10.1 days of artistic freedom to four watches in the course of less than a year.

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Read the entire piece to find out what Shteyngart’s last (nostalgic) watch purchase was and for wonderful, descriptive one-liners like this: “If you want a watch that looks like a Russian oligarch just curled up around your wrist and died, you might be interested in the latest model of Rolex’s Sky-Dweller.”

 

On Lessons in Loss

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In the latest issue of The New Yorker, Kathryn Schulz reflects on two seasons of loss in “When Things Go Missing.” The piece has a benign beginning, dealing with losing physical objects but then moves to a gut-wrenching, emotional account of how Kathryn dealt with the loss of her father late last year.

With the benign beginning, some statistics:

Passwords, passports, umbrellas, scarves, earrings, earbuds, musical instruments, W-2s, that letter you meant to answer, the permission slip for your daughter’s field trip, the can of paint you scrupulously set aside three years ago for the touch-up job you knew you’d someday need: the range of things we lose and the readiness with which we do so are staggering. Data from one insurance-company survey suggest that the average person misplaces up to nine objects a day, which means that, by the time we turn sixty, we will have lost up to two hundred thousand things. (These figures seem preposterous until you reflect on all those times you holler up the stairs to ask your partner if she’s seen your jacket, or on how often you search the couch cushions for the pen you were just using, or on that daily almost-out-the-door flurry when you can’t find your kid’s lunchbox or your car keys.) Granted, you’ll get many of those items back, but you’ll never get back the time you wasted looking for them. In the course of your life, you’ll spend roughly six solid months looking for missing objects; here in the United States, that translates to, collectively, some fifty-four million hours spent searching a day. And there’s the associated loss of money: in the U.S. in 2011, thirty billion dollars on misplaced cell phones alone.

I loved this paragraph:

A few days before his death, having ignored every request made of him by a constant stream of medical professionals (“Mr. Schulz, can you wiggle your toes?” “Mr. Schulz, can you squeeze my hand?”), my father chose to respond to one final command: Mr. Schulz, we learned, could still stick out his tongue. His last voluntary movement, which he retained almost until the end, was the ability to kiss my mother. Whenever she leaned in close to brush his lips, he puckered up and returned the same brief, adoring gesture that I had seen all my days. In front of my sister and me, at least, it was my parents’ hello and goodbye, their “Sweet dreams” and “I’m only teasing,” their “I’m sorry” and “You’re beautiful” and “I love you”—the basic punctuation mark of their common language, the sign and seal of fifty years of happiness.

A fine lesson on grief and dealing with loss:

Like a dysfunctional form of love, which to some extent it is, grief has no boundaries; seldom this fall could I distinguish my distress over these later losses from my sadness about my father. I had maintained my composure during his memorial service, even while delivering the eulogy. But when, at the second funeral, the son of the deceased stood up to speak, I wept. Afterward, I couldn’t shake the sense that another shoe was about to drop—that at any moment I would learn that someone else close to me had died. The morning after the election, I cried again, missing my refugee father, missing the future I had thought would unfold. In its place, other kinds of losses suddenly seemed imminent: of civil rights, personal safety, financial security, the foundational American values of respect for dissent and difference, the institutions and protections of democracy.

On what losing ultimately teaches us:

No matter what goes missing, the wallet or the father, the lessons are the same. Disappearance reminds us to notice, transience to cherish, fragility to defend. Loss is a kind of external conscience, urging us to make better use of our finite days.

The whole piece is a must-read, certainly one of the best pieces of writing I have read so far in 2017.

On President Trump’s First Term in Office

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When it was first published, I ignored Evan Osnos’s New Yorker piece about Trump’s first term as president. Now that it is a reality, I read it with intrigue.

Some notable passages below. First, Trump’s fascination with nuclear weapons:

For many years, Trump has expressed curiosity about nuclear weapons. In 1984, still in his thirties, he told the Washington Post that he wanted to negotiate nuclear treaties with the Soviets. “It would take an hour and a half to learn everything there is to learn about missiles,” he said. “I think I know most of it anyway.” According to Bruce G. Blair, a research scholar at the Program on Science and Global Security, at Princeton, Trump encountered a U.S. nuclear-arms negotiator at a reception in 1990 and offered advice on how to cut a “terrific” deal with a Soviet counterpart. Trump told him to arrive late, stand over the Soviet negotiator, stick his finger in his chest, and say, “Fuck you!” Recently, a former Republican White House official whom Trump has called on for his insights told me, “Honestly, the problem with Donald is he doesn’t know what he doesn’t know.”

Shortly after taking the oath of office, Trump would be assigned a military aide who carries the forty-five-pound aluminum-and-leather briefcase that holds “a manual for conducting nuclear war,” according to Dan Zak, the author of “Almighty,” a new book on nuclear weapons. The briefcase, known in the White House as “the football,” contains menus of foreign targets: cities, arsenals, critical infrastructure. To launch an attack, Trump would first verify his identity to a commander in the Pentagon’s war room, by referring to codes on a one-of-a-kind I.D. card, known as “the biscuit.”

On checks and balances working in the system:

Some of Trump’s promises would be impossible to fulfill without the consent of Congress or the courts; namely, repealing Obamacare, cutting taxes, and opening up “our libel laws” that protect reporters, so that “we can sue them and win lots of money.” (In reality, there are no federal libel laws.) Even if Republicans retain control of Congress, they are unlikely to have the sixty votes in the Senate required to overcome a Democratic filibuster. 

However, Trump could achieve many objectives on his own. A President has the unilateral authority to renegotiate a nuclear deal with Iran, to order a ban on Muslims, and to direct the Justice Department to give priority to certain offenses, with an eye to specific targets. During the campaign, he has accused Amazon of “getting away with murder tax-wise,” and vowed, if he wins, “Oh, do they have problems.”

How would Trump handle China?

Shen Dingli, an influential foreign-policy scholar at Fudan University, in Shanghai, told me that Chinese officials would be concerned about Trump’s unpredictability but, he thinks, have concluded that, ultimately, he is a novice who makes hollow threats and would be easy to handle. They would worry about the policies of a President Hillary Clinton, who, as Secretary of State, oversaw Obama’s “pivot” to Asia, intended to balance China’s expansion. “She is more predictable and probably tough,” Shen said. “Human rights, pivoting—China hates both.”

Other considerations in the piece are The Great Wall, illegal immigration, and Trump’s belief that he could renegotiate the national debt. Worth the read.

Jonathan Franzen Travels to Antarctica

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Jonathan Franzen (author of The Corrections and Freedom) went on a three-week expedition to Antarctica and wrote about his experience in the latest issue of The New Yorker. I’ve always liked Franzen’s depictions of life, and this piece delivers:

I’d never before had the experience of beholding scenic beauty so dazzling that I couldn’t process it, couldn’t get it to register as something real. A trip that had seemed unreal to me beforehand had taken me to a place that likewise seemed unreal, albeit in a better way. Global warming may be endangering the continent’s western ice sheet, but Antarctica is still far from having melted. On either side of the Lemaire Channel were spiky black mountains, extremely tall but still not so tall as to be merely snow-covered; they were buried in wind-carved snowdrift, all the way to their peaks, with rock exposed only on the most vertical cliffs. Sheltered from wind, the water was glassy, and under a solidly gray sky it was absolutely black, pristinely black, like outer space. Amid the monochromes, the endless black and white and gray, was the jarring blue of glacial ice. No matter the shade of it—the bluish tinge of the growlers bobbing in our wake, the intensely deep blue of the arched and chambered floating ice castles, the Styrofoamish powder blue of calving glaciers—I couldn’t make my eyes believe that they were seeing a color from nature. Again and again, I nearly laughed in disbelief. Immanuel Kant had connected the sublime with terror, but as I experienced it in Antarctica, from the safe vantage of a ship with a glass-and-brass elevator and first-rate espresso, it was more like a mixture of beauty and absurdity.

This commemoration of Ernest Shackleton on the voyage seems excessive:

There wasn’t even a good field guide to Antarctic wildlife in the Orion’s library. Instead, there were dozens of books about South Polar explorers, notably Ernest Shackleton—a figure scarcely less fetishized onboard than the Lindblad experience itself. Sewed onto the left sleeve of my company-issued orange parka was a badge with Shackleton’s portrait, commemorating the centennial of his epic open-boat voyage from Elephant Island. We were given a book about Shackleton, PowerPoint lectures about Shackleton, special tours to Shackleton-related sites, a screening of a long film about a re-creation of Shackleton’s voyage, and a chance to hike three miles of the arduous trail that Shackleton had survived at the end of it. (Late in the trip, under the gaze of our videographer, we would all be herded to the grave of Shackleton, handed shot glasses of Irish whiskey, and invited to join in a toast to him.) The message seemed to be that we, on our Lindblad, were not un-Shackletonian ourselves. Failing to feel heroic on the Orion was a recipe for loneliness.

And this encounter with an Emperor Penguin:

I fetched Captain Graser, who took one look through the scope and let out a whoop. “Ja,ja,” he said, “emperor penguin! Emperor penguin! Just like I was hoping!”

I’d already made a quiet, alienated resolution not to take a single picture on the trip. And here was an image so indelible that no camera was needed to capture it: the emperor penguin appeared to be holding a press conference. While a cluster of Adélies came up from behind it, observing like support staff, the emperor faced the press corps in a posture of calm dignity. After a while, it gave its neck a leisurely stretch. Demonstrating its masterly balance and flexibility, and yet without seeming to show off, it scratched behind its ear with one foot while standing fully erect on the other. And then, as if to underline how comfortable it felt with us, it fell asleep.

The piece reminded me of David Foster Wallace’s epic essay on his first time experiencing a cruise.

On the Minecraft Phenomenon

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Clive Thompson, writing in The New York Times, profiles the gaming phenomenon that is Minecraft. It’s a really interesting read on the appeal of the game for both children and adults:

Minecraft is thus an almost perfect game for our current educational moment, in which policy makers are eager to increase kids’ interest in the “STEM” disciplines — science, technology, engineering and math. Schools and governments have spent millions on “let’s get kids coding” initiatives, yet it may well be that Minecraft’s impact will be greater. This is particularly striking given that the game was not designed with any educational purpose in mind.

 On how the game teaches kids autonomy, negotiation, and empathy:

But Minecraft is unusual because Microsoft doesn’t control all the servers where players gather online. There is no single Minecraft server that everyone around the world logs onto. Sometimes kids log onto a for-­profit server to play mini­games; sometimes they rent a server for themselves and their friends. (Microsoft and Mojang run one such rental service.) Or sometimes they do it free at home: If you and I are in the same room and we both have tablets running Minecraft, I can invite you into my Minecraft world through Wi-Fi.

What this means is that kids are constantly negotiating what are, at heart, questions of governance. Will their world be a free-for-all, in which everyone can create and destroy everything? What happens if someone breaks the rules? Should they, like London, employ plug-ins to prevent damage, in effect using software to enforce property rights? There are now hundreds of such governance plug-ins.

Worth clicking through to see the illustrations done by Christoph Niemann.

Pablo Picasso’s Multi-Billion Dollar Empire

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I enjoyed this piece in Vanity Fair on Pablo Picasso’s multi-billion dollar empire.

Picasso did not leave a will. The division of his holdings took six years, with often bitter negotiations among the heirs. (There were seven then.) The settlement cost $30 million and produced what has been described as a saga worthy of Balzac. The family, writer Deborah Trustman noted at the time, “resembles one of Picasso’s Cubist constructions—wives, mistresses, legitimate and illegitimate children (his youngest born 28 years after his oldest), and grandchildren—all strung on an axis like the backbone of a figure with unmatched parts.”

It is unbelievable how prolific Picasso was:

When Picasso died, 43 years ago at the age of 91, he left an astounding number of works—more than 45,000 in all. (“We’d have to rent the Empire State Building to house all the works,” Claude Picasso said when the inventory was completed.) There were 1,885 paintings, 1,228 sculptures, 7,089 drawings, 30,000 prints, 150 sketchbooks, and 3,222 ceramic works.

Much more here.

The Elements of Effective Teamwork: A Google Experiment

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This is a fascinating piece by Charles Duhigg (author of the excellent The Power of Habit) which outlines the steps Google took to understand what made some teams at the company effective, while other teams–though composed of very intelligent members–tended to underperform. The code name for the internal project at Google was Project Aristotle:

Five years ago, Google — one of the most public proselytizers of how studying workers can transform productivity — became focused on building the perfect team. In the last decade, the tech giant has spent untold millions of dollars measuring nearly every aspect of its employees’ lives. Google’s People Operations department has scrutinized everything from how frequently particular people eat together (the most productive employees tend to build larger networks by rotating dining companions) to which traits the best managers share (unsurprisingly, good communication and avoiding micromanaging is critical; more shocking, this was news to many Google managers).

Project Aristotle’s researchers began by reviewing a half-century of academic studies looking at how teams worked. Were the best teams made up of people with similar interests? Or did it matter more whether everyone was motivated by the same kinds of rewards? Based on those studies, the researchers scrutinized the composition of groups inside Google: How often did teammates socialize outside the office? Did they have the same hobbies? Were their educational backgrounds similar? Was it better for all teammates to be outgoing or for all of them to be shy? They drew diagrams showing which teams had overlapping memberships and which groups had exceeded their departments’ goals. They studied how long teams stuck together and if gender balance seemed to have an impact on a team’s success.

It’s worth reading the piece in its entirety, but it comes down to the fact that teams where individuals have a chance to speak their minds, engage in mild chit-chat, and share their personal stories and vulnerabilities end up as more cohesive, stronger performing teams compared to the ones that simply get down to business and attempt to get work done.

From the concluding portion of the piece:

Project Aristotle is a reminder that when companies try to optimize everything, it’s sometimes easy to forget that success is often built on experiences — like emotional interactions and complicated conversations and discussions of who we want to be and how our teammates make us feel — that can’t really be optimized.

And this:

What Project Aristotle has taught people within Google is that no one wants to put on a ‘‘work face’’ when they get to the office. No one wants to leave part of their personality and inner life at home. But to be fully present at work, to feel ‘‘psychologically safe,’’ we must know that we can be free enough, sometimes, to share the things that scare us without fear of recriminations. We must be able to talk about what is messy or sad, to have hard conversations with colleagues who are driving us crazy. We can’t be focused just on efficiency. Rather, when we start the morning by collaborating with a team of engineers and then send emails to our marketing colleagues and then jump on a conference call, we want to know that those people really hear us. We want to know that work is more than just labor.

From my own personal experience, I can relate to the findings. I’ve tended to perform better in work groups where the managers or my colleagues tended to take an interest in my personal life, either by asking questions or offering advice.

On the Future of Machine Intelligence

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This is a very thought-provoking read on the future of machine intelligence and how we will cope with its advancement. The author, Douglas Coupland, begins the narrative with some hypothetical apps that track data (geolocation, etc.) and then paints a dystopian view:

To summarise. Everyone, basically, wants access to and control over what you will become, both as a physical and metadata entity. We are also on our way to a world of concrete walls surrounding any number of niche beliefs. On our journey, we get to watch machine intelligence become profoundly more intelligent while, as a society, we get to watch one labour category after another be systematically burped out of the labour pool. (Doug’s Law: An app is only successful if it puts a lot of people out of work.)

The darkest thought of all may be this: no matter how much politics is applied to the internet and its attendant technologies, it may simply be far too late in the game to change the future. The internet is going to do to us whatever it is going to do, and the same end state will be achieved regardless of human will. Gulp.

Do we at least want to have free access to anything on the internet? Well yes, of course. But it’s important to remember that once a freedom is removed from your internet menu, it will never come back. The political system only deletes online options — it does not add them. The amount of internet freedom we have right now is the most we’re ever going to get.

I found the notion of Artificial Intuition (as opposed to Artificial Intelligence) worth highlighting:

Artificial Intuition happens when a computer and its software look at data and analyse it using computation that mimics human intuition at the deepest levels: language, hierarchical thinking — even spiritual and religious thinking. The machines doing the thinking are deliberately designed to replicate human neural networks, and connected together form even larger artificial neural networks. It sounds scary . . . and maybe it is (or maybe it isn’t). But it’s happening now. In fact, it is accelerating at an astonishing clip, and it’s the true and definite and undeniable human future.

Worth reading in its entirety.

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Note: I usually don’t link to The Financial Times (because of its stringent paywall), but at the time of this post, the article is free to access.

The Cascadia Earthquake

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A thought-provoking, and frightening, piece by Kathryn Schulz in The New Yorker on the very big earthquake that is likely to strike the Pacific Northwest sometime in the future:

The first sign that the Cascadia earthquake has begun will be a compressional wave, radiating outward from the fault line. Compressional waves are fast-moving, high-frequency waves, audible to dogs and certain other animals but experienced by humans only as a sudden jolt. They are not very harmful, but they are potentially very useful, since they travel fast enough to be detected by sensors thirty to ninety seconds ahead of other seismic waves. That is enough time for earthquake early-warning systems, such as those in use throughout Japan, to automatically perform a variety of lifesaving functions: shutting down railways and power plants, opening elevators and firehouse doors, alerting hospitals to halt surgeries, and triggering alarms so that the general public can take cover. The Pacific Northwest has no early-warning system. When the Cascadia earthquake begins, there will be, instead, a cacophony of barking dogs and a long, suspended, what-was-that moment before the surface waves arrive. Surface waves are slower, lower-frequency waves that move the ground both up and down and side to side: the shaking, starting in earnest.

Soon after that shaking begins, the electrical grid will fail, likely everywhere west of the Cascades and possibly well beyond. If it happens at night, the ensuing catastrophe will unfold in darkness. In theory, those who are at home when it hits should be safest; it is easy and relatively inexpensive to seismically safeguard a private dwelling. But, lulled into nonchalance by their seemingly benign environment, most people in the Pacific Northwest have not done so. That nonchalance will shatter instantly. So will everything made of glass. Anything indoors and unsecured will lurch across the floor or come crashing down: bookshelves, lamps, computers, cannisters of flour in the pantry. Refrigerators will walk out of kitchens, unplugging themselves and toppling over. Water heaters will fall and smash interior gas lines. Houses that are not bolted to their foundations will slide off—or, rather, they will stay put, obeying inertia, while the foundations, together with the rest of the Northwest, jolt westward. Unmoored on the undulating ground, the homes will begin to collapse.

Worth reading in entirety.