I’ve been having a really good time following the race for the Democratic nomination. As is usually the case with me and politics, I’m far more interested as an observer than as a participant. The daily maneuvering makes for good reading. I’ve mostly been following the action at The Note, the daily column put together by ABC News’ political unit. It’s a great behind-the-scenes look at the process. All of this politicking has got me thinking about one of my all time favorite books. Hunter S. Thompson’s Fear and Loathing: On the Campaign Trail ’72 combines, in a way that only Thompson can, political reporting with author’s deteriorating ability to keep it all together. I enjoy this book the most out of all of Thompson’s books because it provides a terrific outsider’s look at the mealy insides of American politics. Thompson sharing the back of a limo with Nixon on a ride from Boston to Manchester is priceless. But it is also amazing because it comes at an odd moment in Thompson’s career, the point of transition from the clear-headed, idealistic recklessness of Hell’s Angels to the addled egotism of his later work. The book got me excited about politics, but I was frustrated that Thompson wasn’t able to keep writing at this level for the rest of his career. Still, it remains a fantastic book for anyone who is interested in history or politics, especially if you have taste for Thompson’s singular, stylistic flair.
It has, once again, been a long time since I wrote to The Millions. My hiatus this time around was due to constant travels and lack of time to read. I managed, nevertheless, to read Fyodor Dostoevsky’s Crime and Punishment as intended and began David Foster Wallace’s Infinite Jest. I do not dare comment on Crime and Punishment, since it is merely my introduction to Russian literature and so many people and scholars have already done a much better job than I can ever hope to do. Let it suffice that I really enjoyed every word in Crime and Punishment and look forward to continuing my Russian Lit. education through both Dostoevsky – Brothers Karamazov, I think, will be next – and Tolstoy – I have War and Peace in mind, please tell me your suggestions – before I move onto others such as Pushkin and Chekhov – whose The Cherry Orchard and some other plays I have read. Next I picked up Infinite Jest with the naive hope that I could make serious headway into it in one month. I enjoyed the 150 pages that I managed to read in my month-long quest to devour Wallace’s little monster. It was, I have to admit, very confusing and I constantly found myself in anticipation of stories that begun and were, in the mere 150 pages I read, not continued. The reason I stopped was not because of my growing frustration with the novel – as happened to a couple of my friends – but because I reported to the army to serve my mandatory military service. Infinite Jest is not quite the light read that I could manage in the barracks after a full day of marching and obeying orders barked at me, therefore I put it on hold. Thus far I have not managed to return to it.[See Also: Max’s thoughts on Crime and Punishment]While in the army I picked up Turkey’s bestseller Su Ciglin Turkler (Those Crazy Turks) by Turgut Ozakman. Ozakman studied both national and private archives related to the Turkish Independence War for over sixty years. About fifteen years ago the premise of his book and most of his research was complete and the novel in progress was turned into a movie script for a four-part TV series. I remember watching the series at a very young age and being very impressed by it. My father had read the newly published Su Ciglin Turkler during my parents’ visit to New York in January and left the novel for me to read. I took the novel to the army, where only pre-approved books are allowed into the barracks and subversive writers are banned, and began reading it there. Ozakman’s narrative is very simple and fluent. The story sticks to historic facts to the point of making Su Ciglin Turkler more of a history book than a novel. The author avoided writing a history book by narrating the individual lives and adventures of historic characters in fiction. The combination creates a very strong storyline that reflects the historic moments in Turkey’s three year long struggle to freedom following World War I and touches a nerve in the reader by relating the greatly humane stories of unheard heroes and heroines. Su Ciglin Turkler makes its readers laugh and cry out loud at certain points, infuses a healthy dose of nationality that makes the reader long for the determination and unity exhibited in the birth of the Turkish Republic – as well as wonder why such stamina and selfless goodwill is missing from the scene today – and provides a great glimpse of the nation’s foundations. Unfortunately, as with most Turkish novels I read, with the exception of Orhan Pamuk’s novels, Su Ciglin Turkler is only available in Turkish. If you know the language or the novel is ever translated, I strongly recommend it. That was my army novel, and I admit the setting proved perfect.See also: Part 2, 3
Last week, Max directed our attention to a major new piece of reporting on the financial crisis: a Portfolio article by Millions favorite Michael Lewis. The author of Liar’s Poker, among other books, Lewis is a gifted explainer of an industry badly in need of explanations. In the Portfolio piece, for example, he immerses us in the world of short-sellers who saw the subprime meltdown coming. However, the key paragraph – wherein trader Steve Eisman has an epiphany about how investment banks are leveraging subprime bonds – resorts to a sports metaphor, and thus fails to demystify an elusive instrument at the center of the financial crisis: the credit default swap (CDS).”When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats,” Lewis writes.But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. ‘They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,’ Eisman says. ‘They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans.’I’ve heard financial insiders inveigh against peons who “don’t know a credit-default swap from a turnip,” but how are we to wise up, if explanations only come in the form of metaphors (athletic or agricultural)? Grabbing a fig leaf from the N+1 playbook, as it were, I decided to ask a friend in finance to explain the Peyton Manning analogy, as simply as possible. Here’s what he had to say (wait for “the rub”):Assume the following: Eisman buys a crappy mortgage security (say, a $1,000 bond from a mortgage given to a strawberry picker who makes $14,000 dollars per year). Say the mortgage rate the strawberry picker pays is 15%. This means he’s agreed to pay $150 a year to Eisman. But Eisman is worried that the strawberry picker will default because the guy’s house value has collapsed and his income is drying up. Thus, Eisman wants to buy insurance on the $1,000 he’s loaned. The way he does this is via a credit default swap.A CDS is essentially an insurance policy on a loan, and here’s how it works. Eisman finds a counterparty willing to sell him insurance on his loan (a big investment bank like Lehman Brothers). Eisman agrees to pay the bank a fixed rate every year for protection of the mortgage security he owns (the crappier the loan, the higher the rate). Let’s say for the $1,000 loan to the strawberry picker, his rate will be 10%. The bank pays him nothing on a regular basis, BUT, if the borrower defaults, they pay him the full $1,000.So: if times are good and everyone makes payments on time, the payments are structured as follows: The strawberry picker pays $150 per year to Eisman; Eisman pays $100 per year to Lehman (which then uses some of the cash to provision for losses, and uses the rest to make more loans). The strawberry picker gets to keep his house, Eisman keeps $50 per year (loan payment from strawberry picker minus the insurance premium he pays to Lehman), and Lehman gets $100.Got the structure? Now here’s the rub.Imagine Eisman never actually had exposure to the loan in the first place. Being the brilliant skeptic he is, Eisman would never lend $1,000 to a strawberry picker with little income. He thinks that strawberry man is doomed to default on that loan, and he actually wants to bet AGAINST him. So instead of giving the loan and buying insurance, he just buys the insurance (hence the often used and rarely understood term “side bet”). To do this, Eisman still has to pay the “premium” for the insurance he’s bought, and since it’s a risky loan, the rate is high (e.g. $100 per year in the example above). [Though he stands to win $1,000 if the loan defaults.] In effect, Eisman is paying a “subprime-like” interest rate to Lehman every year! That’s what Lewis was getting at.I would have used a different metaphor. I would have said it’s like a New Yorker buying a bunch of home insurance policies in New Orleans because you are expecting that there will be a massive hurricane coming to wreck them. Now lets say that the insurance company took the money you were giving it, didn’t provision for the coming doom, and instead, used that money to lend to more people building and buying houses in New Orleans.That’s leverage upon leverage upon leverage. And that’s the mess that is unraveling before us.
Millions contributor Rodger Jacobs is continuing his efforts to get a street in Los Angeles named after F. Scott Fitzgerald. Now, he’s put together a short story competition to further commemorate the author. Here’s the release:The film production and web publishing company responsible for the petition drive to name the intersection of Sunset Boulevard and Hayworth Avenue in honor of the late F. Scott Fitzgerald has announced a short fiction competition to further commemorate the author on the sixty-fifth anniversary of his passing. At the time of his demise on December 21, 1940, the celebrated author of The Great Gatsby and Tender is the Night was living at 1443 North Hayworth Avenue in the home of gossip columnist Sheilah Graham. Rodger Jacobs, President of 8763 Wonderland Ltd., is requesting works of original fiction of no more than four hundred words on the subject of F. Scott Fitzgerald’s last days in Hollywood. “The stories can deal with Scott directly or indirectly,” says Jacobs, “just as long as they somehow address F. Scott Fitzgerald in Hollywood.” Entries will be judged on originality and overall style. Prizes will be announced “sometime in the near future.” The deadline for short fiction entries is August 1, 2005. Entries may be e-mailed to [email protected] There is no fee for entrants, though Pay Pal donations are suggested to help defray costs involved in mounting the continuing petition drive. The F. Scott Fitzgerald Memorial Petition can be viewed and electronically signed here.
I am almost done reading a very remarkable book. Actually, it’s not really a book, it’s seven novellas about one man, a mysterious character by the name of Maqroll the Gaviero. He is too complex to really describe, but I suppose I might try: he is an adventurer first and formost, preferably by sea, but he is not in it for the excitment. His travels are constant because it is his compulsion. He is a lover of the world and ships and beautiful women. He is an excellent judge of character, though he is often drawn into disregarding his own judgements. He encounters many fascinating characters, and we follow as well the Gaviero’s companions and trusted friends, Abdul Bashur (Dreamer of Ships) and Ilona Rubenstein (the Nymph of Trieste).The Adventures and Misadventures of Maqroll by Alvaro Mutis is, dare I say it, on par with and even surpasses the work of Borges and Garcia Marquez. These novellas span the globe like no book ever has. Maqroll visits every continent and sniffs out schemes and companions in every port. This Maqroll, he is no vain adventurer, no hero. He is tortured by his restlessness. He is at the same time a most exceptional man, well-read and loyal, courteous and brave when bravery is required. And yet he is so fragile. I worry about Maqroll as he is blown about the globe by the whims of a strange fate. I am almost done with the 7th and final novella. I have almost reached the last of the 700 pages, but I am not ready to say good bye. This Maqroll, he can really get ahold of you. I have read some books, and though I am by no means an expert, I can say that this book will have to be a classic. It is just so good.
One of my many side projects is coming to fruition right now. A while ago my friend Derek and I started a record label called Realistic Records. After planning for almost a year, we have released our first record. The Recoys are the former band of current members of The Walkmen and The French Kicks This is an album that never was, but probably should have been, so we’ve put together a vinyl only run of 1000. It’s called Recoys Rekoys. The record is fantastic and if you like the Walkmen or the French Kicks or any of the great new rock that’s out right now, then you’ll love this album. You can buy it either here or here and hopefully it will soon be available in your local record store. Also, the Recoys will be reuniting for one night only to celebrate the long awaited release of this album. Here are the details:Friday June 20thkingsland taverncorner of kingsland and nassau in greenpointHopefully I’ll see you there.
Subscribers to the literary magazine One Story receive, you guessed it, one story in the mail about every three weeks. The magazine isn’t as chic as it could be (the choice of title font, for instance, sometimes makes me cringe), but the issues are lightweight and easy to stuff in your purse or back pocket. The stories vary in style and content, and I’ve been impressed with quite a few. And plus, they’re fun to receive in the mail, and even more fun to give away once you’ve finished them.The magazine recently unveiled a prettier website, which still includes the features I’ve always liked. You can check out the first lines of every story published by the magazine, as well as short interviews with each writer about his or her story and the process of creating it. It’s interesting to see how different everyone’s process is: one writer wrote his story in three nights, while another worked on hers for over a year. In these interviews, One Story always asks the writer to share the best writing advice ever received. Some people quote secondhand advice, while others share nuggets of wisdom from a past instructor. On a few occasions, I’ve written this stuff down, either for myself or for my students (or both).