Gather.com, the folks who put together a chat with Jonathan Safran Foer not too long ago, have announced a new writing contest. Online writing contests are a dime a dozen, but the cool thing about this one is that the four winning short pieces (fiction or non-fiction) will be “published and sold on Amazon Shorts,” which would undoubtedly be a terrific venue for any aspiring writer. In fact, it’s along the lines of what I hoped Amazon would do with its Shorts program.
A way in to Amazon Shorts
Top Potter Town Gets Prize, Boy-Wizard Bragging Rights
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.”
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Plagiarism: maybe not so bad?
Malcolm Gladwell argues that perhaps we are too extreme when it comes to policing plagiarism. In an article in this week’s New Yorker (link expires), Gladwell tells the very personal story of a profile that he wrote being plagiarized by Bryony Lavery in writing her Tony-nominated play Frozen. The experience led Gladwell to wonder if plagiarism, far from being the literary equivalent of a capital crime, is actually a necessary ingredient in many a creative endeavor. Gladwell, by the way, has new book coming out in a couple of months, Blink: The Power of Thinking Without Thinking, excerpts of which you can read here.On a similarly counterintuitive note, The Economist has decided that our obsession with intellectual property is misguided (link expires), and, in fact, “in America, many experts believe that dubious patents abound, such as the notorious one for a ‘sealed crustless sandwich.'”Speaking of sandwiches, In an interview with Wired, Jeff Tweedy of the band Wilco continues with the intellectual property theme by declaring that “Music is not a loaf of bread.”
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What People Are Reading… Part 2
People are reading non-fiction, too. The big debut this week is Joan Didion’s new book Where I Was from. It’s part family history, part historical exploration of “where she was from,” the perplexing state of California, a fertile subject for analysis if ever there was one. People are already waving this book above their heads and extolling its virtues much in the same way as they did with her earlier book, Political Fictions. Another politically minded author garnering a wide readership is New York Times columnist Paul Krugman, whose op-ed pieces from the last three years have been collected in a single volume entitled, The Great Unraveling: Losing Our Way in the New Century. As the title indicates, his columns chronicle the collapse of the prosperity of the previous decade, and the former economist from Princeton feels that the current administration deserves much of the blame. If that’s too heavy, there are some less serious books that are or will soon be best sellers. Among them is a peculiar book that comes to us by way of England. Schott’s Original Miscellany by Ben Schott is an astoundingly clever and thorough little collection of trivia that manages to strike the perfect balance between being informative and being fun. For example, go to the official miscellanies website and get the official scoop on how palmistry works, and then feel free to troll around for other odd info at your leisure. Meanwhile, the more musically minded may have caught Martin Scorsese’s seven-part documentary about the blues which is currently airing on PBS. Elvis biographer Peter Guralnick helped compile the companion volume to the documentary entitled, Martin Scorsese Presents The Blues: A Musical Journey, an attractive book that features new essays by David Halberstam, Hilton Als, Suzan-Lori Parks, Elmore Leonard, and others. And finally, all this talk of books about music reminds me of Chuck Klosterman. I may have mentioned a few weeks ago that I was reading Klosterman’s first book, Fargo Rock City, a terribly clever book that seeks to make a case for heavy metal in the annals of music history. The book started strong, and I found myself laughing out loud once every couple of pages; however, by the end, Klosterman’s personality, which is as much on display as the subjects about which he writes and which is an odd mix of self-effacement and shameless arrogance, began to grate on me. To make things worse, right after I finished the book, I read a couple of horrendous reviews of his new book which brought into even clearer focus what had bugged me so much about Klosterman. Nonetheless, the ranks of readers devoted to Klosterman’s absurd and witty social commentary seems to be growing, because his new book, Sex, Drugs, and Cocoa Puffs: A Low Culture Manifesto seems to be selling at an ever quickening clip. Stayed tuned for the next installment… Paperbacks!
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Turnips, Quarterbacks, and Strawberry Pickers: Credit Default Swaps Made Simple
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.
The challenges of digital magazine editions
An article in the Wall Street Journal talks up some of the drawbacks of the 8 DVD-ROM Complete New Yorker set:Web-savvy users accustomed to navigating easily through online content find The Complete New Yorker a bit of an anachronism. Each page of content is literally a picture of a magazine page. Readers can’t copy text from a story and paste it elsewhere. They can’t search for keywords within the text of articles, only within titles and abstracts. If they want to jump from issue to issue, or article to article, they first have to go back to the index and sometimes change DVDs.The problem obviously isn’t the technology, it’s the 1976 law that requires publishers to get permission from free-lancers before republishing their work in another medium. The lawyers have determined that anything before 1976 is fair game to be converted into a new format. And while most publishers negotiated away the rights of free-lancers in this realm in the mid-1990s, there still remains a legal limbo for material published in between the two dates. Based on case arising from a similar set put out by National Geographic in 1997, by simply creating digital versions of the magazine pages, publishers are in the clear, and this is the route that the New Yorker has taken. The article linked above also looks at how this issue is affecting similar archiving efforts by other venerable magazines like Harper’s Magazine and the Atlantic Monthly.(via and via)
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HarperCollins BlogHer Follow Up
Following up on my recent post about HarperCollins teaming with the BlogHer women’s blog network, I received from clarifications from HarperCollins on the nature of the arrangement. As I noted, HarperCollins is sponsoring “virtual book tours,” making review copies of several books available for bloggers in the network to read and review “and participate in book title discussions on their own blogs and on BlogHer.org.”I had also noted that BlogHer runs an ad network, and said that “it doesn’t appear as though HarperCollins will be buying ads through the network, but if that does happen, then this initiative will have crossed a line.” It turns out that I missed the point. The whole thing is an above board ad campaign from HarperCollins with no real editorial involvement in what BlogHer members write or don’t write about the books.HarperCollins wrote me today to say that the arrangement is purely a branded sponsorship. HarperCollins is getting to promote and advertise its books, but it’s up to the bloggers decide if they want to discuss the books. BlogHer’s editors, meanwhile, have no involvement in the tour in any way, nor do they endorse the selected titles. It was also pointed out to me that the virtual book tour will never appear on the BlogHer home page, which is reserved for editorial content, but it will be promoted in an ad. HarperCollins also stressed to me that BlogHer is very sensitive about its editorial integrity, and both sides see this feature as a branded sponsorship, rather than a stamp of editorial approval from BlogHer on HarperCollins books.And, now that this has all been cleared up, I think it’s a pretty creative way for a publisher to build a presence in the world of blogs. I’m curious to see how successful it turns out to be.
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The Best Snow Story Ever
Gass began writing the story “to entertain a toothache.” That’s an appropriate anecdote. A philosopher by training and a critic by practice, Gass has always been in love with language. Words are his God.
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