To commemorate the 60th anniversary of the liberation of Auschwitz, Mark has posted a really good list of books about the Holocaust. I highly recommend it.
We’re already looking ahead to a number of exciting titles coming this fall, and near the top of that list is Michael Chabon’s new novel Telegraph Avenue. Much is now emerging about this new novel, set for release in September, but we’ve heard that it grew out of an abortive TV project of the same name, which was said to detail the lives of families of different races living in Oakland and Berkeley, something that is evident in the book’s opening paragraphs:
A white boy rode flatfoot on a skateboard, towed along, hand to shoulder, by a black boy pedaling a brakeless fixed-gear bike. Dark August morning, deep in the Flatlands. Hiss of tires. Granular unraveling of skateboard wheels against asphalt. Summer-time Berkeley giving off her old-lady smell, nine different styles of jasmine and a squirt of he-cat.
The black boy raised up, let go of the handlebars. The white boy uncoupled the cars of their little train. Crossing his arms, the black boy gripped his T-shirt at the hem and scissored it over his head. He lingered inside the shirt, in no kind of hurry, as they rolled toward the next pool of ebbing streetlight. In a moment, maybe, the black boy would tug the T-shirt the rest of the way off and fly it like a banner from his back pocket. The white boy would kick, push, and reach out, feeling for the spark of bare brown skin against his palm. But for now the kid on the skateboard just coasted along behind the blind daredevil, drafting.
Keep an eye out for our big second-half preview in less than a month, which will include more on Telegraph Avenue and dozens of other books coming this fall and beyond.
Likely aware that most of us are now jaded to the astronomical sales numbers that the Harry Potter books put up, Amazon has grabbed shoppers’ attention with an interesting ploy. The site is now looking to inspire further frenzies of buying by pitting town against town. “The Harry-est Town in America” is the American city or town that pre-orders the most copies of Harry Potter and the Deathly Hallows, and with that honor comes a $5,000 gift certificate to be donated by Amazon to a charity of the city’s choice. Unsurprisingly, suburban locales make up pretty much all of the top 100 “Harry-est” towns in America, and the D.C.-area suburbs of Northern Virginia appear to have a particular affinity for the boy wizard. Also, following up on yesterday’s “limited edition” post, a new box set of Potter books (pictured above) has been announced. It features “a collectible trunk-like box with sturdy handles and privacy lock” and “decorative stickers.”
A literary storm has been brewing here in Canada in recent weeks over the publication of the Penguin Book of Canadian Short Stories. (Maybe “literary storm” is pushing it – but there are at least three people weighing in on it). Here’s what seems to have happened: Novelist Jane Urquhart, who was asked to edit the anthology, has put more than a few noses out of joint not just over who was or wasn’t included, but over what she feels constitutes a “short story.”Now, any anthology is inevitably going to leave something out, displease some and enrage a few others, but Urquhart, who by her own admission isn’t an expert of short fiction, chose to include excerpts from memoirs, and, apparently, at least one chapter from a novel, all for the sake of pushing the boundaries of the definition of a “short story”. Which to my mind would be like taking Act 2 of a three-act play and putting it in the same context as distinctly one-act plays. The length isn’t the entire issue, in my mind. A sense of completeness is. A chapter or an excerpt from a novel may indeed have stand-alone properties, but by its very nature as part of a bigger thing, it is incomplete on its own. A finely-crafted short story, however, is complete. And a piece of a memoir? Despite recent memoir/fiction crossovers, a memoir is still a different animal than short story.Why Penguin, in its attempt to publish a definitive collection, didn’t place this editorial task in the hands of a short fiction connoisseur, or, better yet, a panel of connoisseurs who could at least bounce ideas off of each other, is a mystery to me. But, if nothing else, this little tempest has gotten Canadian readers engaged (a few of them fuming, and another leaping to Urquhart’s defense). And with the fairly high-profile press given to the backlash, the omitted authors are getting at least some attention. Shame it had to be on the heels of exclusion from a major anthology.
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.