No one disputes that referees are as fit as they’ve ever been. The problem, according to many observers, is that referees are also worse than they’ve ever been. In 2017, then-Arsenal manager Arsène Wenger claimed that English referees’ level “drops every season”. The next season, Cardiff manager Neil Warnock despaired at how the “best league in the world” could possibly have “the worst officials”.
Today, that story of perpetual decline has given way to one of full-blown crisis. Every week brings a new wave of anger — from fans, players, managers and pundits — about alleged errors, inconsistencies and incompetence. This is at the polite end of the spectrum. On social media, referees’ mistakes are often blamed not on inevitable human error, or even simple ineptitude, but on elaborate conspiracies to derail this or that club. (The fact that every fanbase believes there is a conspiracy against their particular club does not seem to give people pause.)
There is no statistical evidence to support this story of decline. In fact, all such evidence suggests that referees are making fewer mistakes a match, with accuracy rising each season. (However, these statistics themselves are difficult to assess, given that they are collected not by a truly independent body, but by PGMOL and the Premier League, and very little of this data has ever been made public.) Instead, the critics point to a large, often indisputable, collection of individual errors and baffling decisions. These errors amount to only a tiny percentage of all decisions, but having been replayed and discussed over and over, they are the ones etched into memory.
In season one of his podcast Against the Rules, Michael Lewis explored the disconnect between how referees are perceived and their actual performance, not just in sports but also in governance, business, and even the arts.
There are interesting bits throughout the piece, many of which deal with human psychology (esp. of groups) and even philosophy. I found this bit worth quoting:
On the next day I spent with England, 5 November, he was refereeing the champions, Manchester City, at home to Fulham. In a room at a swanky hotel on the outskirts of Manchester, England and his team gathered for their pre-match meeting. His usual assistants had been replaced, because they support Manchester clubs. (Every official must declare their allegiances, and will not be assigned that team’s matches or those of their closest rivals. Other factors that determine appointments include how many times an official has refereed each club that season, how close they live to the stadium, and which teams their family members support.)
Fascinating! Do any of the sports leagues in the US do this? Or is, as I suspect, the support for one’s team in England just so much more intense and foundational to one’s personal identity than in America?
When large, seemingly sudden systemic failures occur, Michael Lewis is one of those writers who’s just waiting to pounce on it and tell us all about it. So it’s not a surprise to see that his new book comes out tomorrow: The Premonition: A Pandemic Story (ebook). From a Time interview with Lewis:
The Premonition makes sense of the COVID-19 pandemic through three people, each of whom knows a great deal about how to stop it-and none of whom is ever approached by the U.S. government: A “redneck epidemiologist” named Carter Mercher who had written the closest thing the government had to a pandemic strategy; Joe DeRisi, a McArthur Fellow who once built a chip containing all the world’s viruses; and Dr. Chastity Dean, an obscure local health official in California.
True to form, Lewis makes few grand claims for what he finds, preferring instead to let the curated details speak for themselves. “I like to think that my job is mainly to find the story in the material,” he writes in the prologue. “I think this particular story is about the curious talents of a society, and how those talents are wasted if not led. It’s also about how gaps open between a society’s reputation and its performance.”
The main question running through “The Premonition” is how, when it came to the initial Covid response, a very rich country that was ranked first globally in pandemic readiness in 2019 managed to incentivize almost all the wrong things.
Of course, this is the reality that all of us have been living for the past year, so the failures of the system don’t come as much of a surprise. Still, Lewis finds ways not just to showcase the brokenness of the system writ large but to zoom in on the sand in the gears.
But Szalai also notes the drawback of most of Lewis’s books:
This method of hewing so tightly to his characters’ perspectives gives Lewis’s narrative its undeniable propulsion, but it also comes at a cost. He doesn’t supply any endnotes, or even a sense of how many people he talked to. His main characters are presented to us as they would undoubtedly like to appear: charmingly obsessive, unwaveringly principled and unfailingly right.
At this point, reading about how incompetent the Trump campaign and White House have been and continue to be — perhaps knowingly, given the viewpoint of some of his advisors and backers about wanting to weaken the federal government — is getting tiring, but Michael Lewis is always worth paying attention to. His newest book, The Fifth Risk, is about how unprepared the incoming Trump administration was to govern the country, to “take control of the portfolio of existential risks managed by the US government” as he puts it. The Guardian has an excerpt:
Chris Christie was sitting on a sofa beside Trump when Pennsylvania was finally called. It was 1.35am, but that wasn’t the only reason the feeling in the room was odd. Mike Pence went to kiss his wife, Karen, and she turned away from him. “You got what you wanted, Mike,” she said. “Now leave me alone.” She wouldn’t so much as say hello to Trump. Trump himself just stared at the TV without saying anything, like a man with a pair of twos whose bluff has been called. His campaign hadn’t even bothered to prepare an acceptance speech. It was not hard to see why Trump hadn’t seen the point in preparing to take over the federal government: why study for a test you will never need to take? Why take the risk of discovering you might, at your very best, be a C student? This was the real part of becoming president of the US. And, Christie thought, it scared the crap out of the president-elect.
Not long after the people on TV announced that Trump had won Pennsylvania, Jared Kushner grabbed Christie anxiously and said: “We have to have a transition meeting tomorrow morning!” Even before that meeting, Christie had made sure that Trump knew the protocol for his discussions with foreign leaders. The transition team had prepared a document to let him know how these were meant to go. The first few calls were easy — the very first was always with the prime minister of Great Britain — but two dozen calls in you were talking to some kleptocrat and tiptoeing around sensitive security issues. Before any of the calls could be made, however, the president of Egypt called in to the switchboard at Trump Tower and somehow got the operator to put him straight through to Trump. “Trump was like … I love the Bangles! You know that song Walk Like an Egyptian?” recalled one of his advisers on the scene.
Ho. Ly. Shit. Incredibly, Lewis’ very next line is: “That had been the first hint Christie had of trouble.” — which makes Chris Christie the most tone-deaf individual in the world? (Probably…Christie was fired the next day, a complete surprise to him.)
In 2012, Michael Lewis gave a commencement speech at Princeton University, his alma mater. In the speech, Lewis, the author of Liar’s Poker, Moneyball, and The Big Short, talks about the role of luck in rationalizing success. He tells the graduates, the winners of so many of life’s lotteries, that they “owe a debt to the unlucky”. This part near the end is worth reading even if you skip the rest of it.
I now live in Berkeley, California. A few years ago, just a few blocks from my home, a pair of researchers in the Cal psychology department staged an experiment. They began by grabbing students, as lab rats. Then they broke the students into teams, segregated by sex. Three men, or three women, per team. Then they put these teams of three into a room, and arbitrarily assigned one of the three to act as leader. Then they gave them some complicated moral problem to solve: say what should be done about academic cheating, or how to regulate drinking on campus.
Exactly 30 minutes into the problem-solving the researchers interrupted each group. They entered the room bearing a plate of cookies. Four cookies. The team consisted of three people, but there were these four cookies. Every team member obviously got one cookie, but that left a fourth cookie, just sitting there. It should have been awkward. But it wasn’t. With incredible consistency the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader’s shirt.
This leader had performed no special task. He had no special virtue. He’d been chosen at random, 30 minutes earlier. His status was nothing but luck. But it still left him with the sense that the cookie should be his.
This experiment helps to explain Wall Street bonuses and CEO pay, and I’m sure lots of other human behavior. But it also is relevant to new graduates of Princeton University. In a general sort of way you have been appointed the leader of the group. Your appointment may not be entirely arbitrary. But you must sense its arbitrary aspect: you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier. Lucky that you live in the richest society the world has ever seen, in a time when no one actually expects you to sacrifice your interests to anything.
All of you have been faced with the extra cookie. All of you will be faced with many more of them. In time you will find it easy to assume that you deserve the extra cookie. For all I know, you may. But you’ll be happier, and the world will be better off, if you at least pretend that you don’t.
You can watch Lewis’ speech as delivered on YouTube:
I wonder if hearing that moved the needle for any of those grads? I suspect not…being born on third base thinking you hit a triple is as American as apple pie at this point. (via @goldman)
Tabitha Soren, who you may remember as a reporter for MTV News, has for the past number of years been working as a photographer. One of her projects began more than 13 years ago as she accompanied her husband Michael Lewis on his visits to the Oakland A’s while working on Moneyball. After the book was published, Soren kept returning to photograph the up-and-coming players Lewis had profiled, following their careers as they either made it in the big leagues or didn’t.
Since then, she has followed the players through their baseball lives, an alternate reality of long bus rides, on-field injuries, friendships and marriages entered and exited, constant motion, and very hard work, often for very little return. Some of the subjects, like Nick Swisher and Joe Blanton, have gone on to become well-known, respected players at the highest level of the game. Some left baseball to pursue other lines of work, such as selling insurance and coal mining. Others have struggled with poverty and even homelessness.
This lovely video from a television station in Denmark highlights the similarities we all share across seemingly impassable social, economic, racial, and religious boundaries.
It’s easy to put people in boxes. There’s us and there’s them. The high-earners and those just getting by. Those we trust and those we try to avoid. There’s the new Danes and those who’ve always been here. The people from the countryside and those who’ve never seen a cow. The religious and the self-confident. There are those we share something with and those we don’t share anything with.
And then suddenly, there’s us. We who believe in life after death, we who’ve seen UFOs, and all of us who love to dance. We who’ve been bullied and we who’ve bullied others.
Last week I started reading The Undoing Project, Michael Lewis’s book about the friendship and collaboration of psychologists Daniel Kahneman and Amos Tversky. This passage on Tversky’s work seems relevant to this video.
From Amos’s theory about the way people made judgments of similarity spilled all sorts of interesting insights. If the mind, when it compares two things, essentially counts up the features it notices in each of them, it might also judge those things to be at once more similar and more dissimilar to each other than some other pair of things. They might have both a lot in common and a lot not in common. Love and hate, and funny and sad, and serious and silly: Suddenly they could be seen — as they feel — as having more fluid relationships to each other. They weren’t simply opposites on a fixed mental continuum; they could be thought of as similar in some of their features and different in others. Amos’s theory also offered a fresh view into what might be happening when people violated transitivity and thus made seemingly irrational choices.
When people picked coffee over tea, and tea over hot chocolate, and then turned around and picked hot chocolate over coffee — they weren’t comparing two drinks in some holistic manner. Hot drinks didn’t exist as points on some mental map at fixed distances from some ideal. They were collections of features. Those features might become more or less noticeable; their prominence in the mind depended on the context in which they were perceived. And the choice created its own context: Different features might assume greater prominence in the mind when the coffee was being compared to tea (caffeine) than when it was being compared to hot chocolate (sugar). And what was true of drinks might also be true of people, and ideas, and emotions.
The idea was interesting: When people make decisions, they are also making judgments about similarity, between some object in the real world and what they ideally want. They make these judgments by, in effect, counting up the features they notice. And as the noticeability of features can be manipulated by the way they are highlighted, the sense of how similar two things are might also be manipulated. For instance, if you wanted two people to think of themselves as more similar to each other than they otherwise might, you might put them in a context that stressed the features they shared. Two American college students in the United States might look at each other and see a total stranger; the same two college students on their junior year abroad in Togo might find that they are surprisingly similar: They’re both Americans!
By changing the context in which two things are compared, you submerge certain features and force others to the surface. “It is generally assumed that classifications are determined by similarities among the objects,” wrote Amos, before offering up an opposing view: that “the similarity of objects is modified by the manner in which they are classified. Thus, similarity has two faces: causal and derivative. It serves as a basis for the classification of objects, but is also influenced by the adopted classification.” A banana and an apple seem more similar than they otherwise would because we’ve agreed to call them both fruit. Things are grouped together for a reason, but, once they are grouped, their grouping causes them to seem more like each other than they otherwise would. That is, the mere act of classification reinforces stereotypes. If you want to weaken some stereotype, eliminate the classification.
That’s what this video did so effectively…it switched up the contexts. Rabid soccer fans became dancers, bullies became lonely people, people of different faiths were united by their believe in an afterlife. An exercise for investors and entrepreneurs building media companies and social networks (as well as people running small independent sites….I’m staring hard at myself in the mirror here): how can you build tools and platforms that give people more ways to connect to each other, to switch up the contexts in which people are able to group themselves?
Why does the US have only two main political parties? Is it because that’s what people want? Nope! It’s just an artifact of our system of voting. From C.G.P. Grey, a video explaining the problems with first-past-the-post voting systems (like the one used in US elections). Great simple explanation…well worth watching. Check out the rest of Grey’s videos in this series, particularly the one on gerrymandering.
More than anything for me, this is the story of politics in America right now: a shrinking and increasingly extremist underdog party has punched above its weight over the past few election cycles by methodically exploiting the weaknesses in our current political system. Gerrymandering, voter suppression, the passing of voter ID laws, and spreading propaganda via conservative and social media channels has led to disproportionate Republican representation in many areas of the country which they then use to gerrymander and pass more restrictive voter ID laws. They’ve limited potential conservative third party candidates (like Trump!) by incorporating them and their views into the main party. I would not be surprised if Republican donors strategically support left-of-center third-party candidates as spoilers — it’s a good tactic, underhanded but effective. They increasingly ignore political norms and practices to stymie Democratic efforts, like the general inaction of the Republican-led Congress over the past few years and the Senate’s refusal to consider Obama’s appointment of Merrick Garland to the Supreme Court.
None of this is an accident. They are a small but (and this is important) unified team that works for the benefit of the group above all else. In football terms, the Democrats are the stronger team: they gain more yards (look at Clinton’s ever-growing lead in the popular vote), they earn more first downs, and they might even score more points over the course of the season. But the Republicans won the Super Bowl by sticking together and deftly pressing their advantages to change the rules of the game in their favor. It’s a Moneyball strategy, but for politics.1 By almost any measure, the US is more liberal than it was 20 years ago and yet we have an incoming administration which is potentially authoritarian, influenced and advised by extremist white nationalists, and unapologetically corruptible. Somehow, we need to make the game more fair again. Fairness and justice should not be partisan. Americans — all Americans, liberal, centrist, and conservative — deserve a fair political process that reflects as closely as possible the collective needs and desires of the citizenry. Anything less should be unacceptable.
Update: Ross Lincoln makes some similar points about the election and liberal majority in America in a series of tweets about the importance of talking about Clinton’s popular vote totals.
14) Meanwhile, the great lie told by GOPs is that they’re ‘real’ America and that they’re a true majority, not liberals.
15) So when they win, regardless of circumstances, press & even many ostensible liberals fall in line w/demands liberals stop being liberal.
16) That’s happening now bigly. Even the LA Weekly published a horrid little illiterate screed about how liberals suck. LA Weekly!
17) but here’s the thing: Hill’s campaign seriously erred in ignoring key swing states. But she still is getting a historic pop vote margin
18) pushing 3 million more votes than Trump got. Possibly going to have gotten more votes than Obama got in 2012.
19) by any reasonable standard of judgment, clear majority of voters did not want Trump in office and most of those voters wanted Hillary.
20) Trump literally won only thanks to a technicality. And yet everyone is trying to push this idea that liberal votes don’t really count.
21) we’re told *we* live in a bubble. But as other ppl have noted, Los Angeles looks a hell of a lot more like America than Sapulpa, OK.
22) before anyone accuses me of being a snooty coastal elite, I am from Sapulpa, OK.
23) if Dems reacted to winning E.C. but not pop vote by saying OK isn’t a real place and doesn’t count, there’d be riots and impeachment.
24) That’s literally what is happening to liberals. But we didn’t just win the pop vote b/c of a quirk. We won it BIG. There are more of us.
25) if anything, we’re the ignored majority. Not conservatives, who literally cannot win fair and square.
See also Steven Johnson’s piece about how the wealthiest, most liberal, and most urban states pay the most taxes and have the least representation.
I mean, the fake news on Facebook…that is a genius Moneyball tactic. Instead of blowing a lot of cash on expensive national TV ads, they bought a ton of cheap propaganda that Facebook and conservative voters spread around for free (or very cheap).
And do you recall the subtitle of Michael Lewis’s book? I didn’t until I just looked it up. It’s “The Art of Winning an Unfair Game”. I can’t think of a better description of our political system and what the Republicans have achieved over the past decade.↩
Forty years ago, Israeli psychologists Daniel Kahneman and Amos Tversky wrote a series of breathtakingly original studies undoing our assumptions about the decision-making process. Their papers showed the ways in which the human mind erred, systematically, when forced to make judgments about uncertain situations. Their work created the field of behavioral economics, revolutionized Big Data studies, advanced evidence-based medicine, led to a new approach to government regulation, and made much of Michael Lewis’s own work possible. Kahneman and Tversky are more responsible than anybody for the powerful trend to mistrust human intuition and defer to algorithms.
Socrates once wrote, “He is richest who is content with the least.” Even the great Greek philosopher would be feeling a little too rich today in Greece where citizens, greeted by news that the nation’s banks would be closed for the week, lined up at ATMs and employed the Socratic method with the repetition of the question: “Where the hell’s my money?” And if you’ve taken a look at your stock portfolio, there’s a decent chance you’ve asked your broker the same question. Here’s an overview of the Greek economic crisis from NYT Upshot, and the latest updates from BBC.
He simply wants to stress to you, and perhaps even himself, that he occupies the high ground. In doing so, he happens to increase the likelihood that he will wind up in the back of an ambulance.
2. No person under the age of 35 will be allowed to work on Wall Street.
Upon leaving school, young people, no matter how persuasively dimwitted, will be required to earn their living in the so-called real economy. Any job will do: fracker, street performer, chief of marketing for a medical marijuana dispensary. If and when Americans turn 35, and still wish to work in finance, they will carry with them memories of ordinary market forces, and perhaps be grateful to our society for having created an industry that is not subjected to them. At the very least, they will know that some huge number of people — their former fellow street performers, say — will be seriously pissed off at them if they do risky things on Wall Street to undermine the real economy. No one wants a bunch of pissed-off street performers coming after them.
You all live in important places surrounded by important people. When I’m in the big city, I never understand the faces of the people, especially the people who want to be successful. They look so worried! So unsatisfied!
In the city you see people grasping, grasping, grasping. Taking, taking, taking. And it must be so hard! To be always grasping-grasping, and taking-taking. But no matter how much they have, they never have enough. They’re still worried. About what they don’t have. They’re always empty.
You have a choice. You don’t realize it, but you have a choice. You can be a giver or you can be a taker. You can get filled up or empty. You make that choice every day. You make that choice at breakfast when you rush to grab the cereal you want so others can’t have what they want.
The piece is filled with Lewis-esque observations throughout. Like:
Rich people, in my experience, don’t want to change the world. The world as it is suits them nicely.
And:
The American upper middle class has spent a fortune teaching its children to play soccer: how many great soccer players come from the upper middle class?
But the studies about the effects of wealth and privilege on human behavior are what caught my eye the most.
In one study, Keltner and his colleague Paul Piff installed note-takers and cameras at city street intersections with four-way stop signs. The people driving expensive cars were four times more likely to cut in front of other drivers than drivers of cheap cars. The researchers then followed the drivers to the city’s cross walks and positioned themselves as pedestrians, waiting to cross the street. The drivers in the cheap cars all respected the pedestrians’ right of way. The drivers in the expensive cars ignored the pedestrians 46.2 percent of the time — a finding that was replicated in spirit by another team of researchers in Manhattan, who found drivers of expensive cars were far more likely to double park.
Living in Manhattan, I see stuff like this all the time and it’s becoming increasingly difficult to think of the rich and privileged as anything other than assholes, always grasping, grasping, grasping, taking, taking, taking.
After Michael Lewis wrote Moneyball in 2003 about the Oakland A’s, their general manager Billy Beane, and his then-unorthodox and supposedly superior managerial strategy, a curious thing happened: the A’s didn’t do that well. They went to the playoffs only twice between 2003 and 2011 and finished under .500 four times. Teams like the Red Sox, who adopted Beane’s strategies with the punch of a much larger payroll, did much better during those years.
But Beane hung in there and has figured out how to beat the big boys again, with two first place in 2012 & 2013 and the best record in the majors this year so far. Will Leitch explains how.
First, don’t spend a lot on a little; spend a little on a lot.
The emotional through-line of Moneyball is Beane learning from his experience as a failed prospect and applying it to today’s game. The idea: Scouts were wrong about him, and therefore they’ll be wrong about tons of guys. Only trust the numbers.
That was an oversimplification, but distrusting the ability of human beings to predict the future has been the centerpiece of the A’s current run. This time, though, the A’s aren’t just doubting the scouts; they’re also skeptical that statistical analysis can reliably predict the future (or that their analysis could reliably predict it better than their competitors). Instead, Beane and his front office have bought in bulk: They’ve brought in as many guys as possible and seen who performed. They weren’t looking for something that no one else saw: They amassed bodies, pitted them against one another, were open to anything, and just looked to see who emerged. Roger Ebert once wrote that the muse visits during the act of creation, rather than before. The A’s have made it a philosophy to just try out as many people as possible — cheap, interchangeable ones — and pluck out the best.
Michael Lewis’s new book about high-frequency trading dropped on Monday with less than 24 hours notice and the media is scrambling to catch up. There’s plenty of love for Lewis and his books out there, but Tyler Cowen has been linking to some critiques. For Bloomberg, Matt Levine writes:
In my alternative Michael Lewis story, the smart young whippersnappers build high-frequency trading firms that undercut big banks’ gut-instinct-driven market making with tighter spreads and cheaper trading costs. Big HFTs like Knight/Getco and Virtu trade vast volumes of stock while still taking in much less money than the traditional market makers: $688 million and $623 million in 2013 market-making revenue, respectively, for Knight and Virtu, versus $2.6 billion in equities revenue for Goldman Sachs and $4.8 billion for J.P. Morgan. Even RBC made 594 million Canadian dollars trading equities last year. The high-frequency traders make money more consistently than the old-school traders, but they also make less of it.
1. HFT doesn’t prey on small mom-and-pop investors. In his first two TV appearances, Lewis stuck to a simple pitch: Speed traders have rigged the stock market, and the biggest losers are average, middle-class retail investors-exactly the kind of people who watch 60 Minutes and the Today show. It’s “the guy sitting at his ETrade account,” Lewis told Matt Lauer. The way Lewis sees it, speed traders prey on retail investors by “trading against people who don’t know the market.”
The idea that retail investors are losing out to sophisticated speed traders is an old claim in the debate over HFT, and it’s pretty much been discredited. Speed traders aren’t competing against the ETrade guy, they’re competing with each other to fill the ETrade guy’s order.
This vagueness about time is one of the weaknesses of the book: it’s hard to keep track of time, and a lot of it seems to be an exposé not of high-frequency trading as it exists today, but rather of high-frequency trading as it existed during its brief heyday circa 2008. Lewis takes pains to tell us what happened to the number of trades per day between 2006 and 2009, for instance, but doesn’t feel the need to mention what has happened since then. (It is falling, quite dramatically.) The scale of the HFT problem - and the amount of money being made by the HFT industry - is in sharp decline: there was big money to be made once upon a time, but nowadays it’s not really there anymore. Because that fact doesn’t fit Lewis’s narrative, however, I doubt I’m going to find it anywhere in his book.
Flash Boys is about a small group of Wall Street guys who figure out that the U.S. stock market has been rigged for the benefit of insiders and that, post-financial crisis, the markets have become not more free but less, and more controlled by the big Wall Street banks. Working at different firms, they come to this realization separately; but after they discover one another, the flash boys band together and set out to reform the financial markets. This they do by creating an exchange in which high-frequency trading-source of the most intractable problems-will have no advantage whatsoever.
The characters in Flash Boys are fabulous, each completely different from what you think of when you think “Wall Street guy.” Several have walked away from jobs in the financial sector that paid them millions of dollars a year. From their new vantage point they investigate the big banks, the world’s stock exchanges, and high-frequency trading firms as they have never been investigated, and expose the many strange new ways that Wall Street generates profits.
His latest target, high-frequency trading, comprises a diverse set of software-driven strategies that have spread from U.S. equity markets to most developed countries as computer power grew and regulators tried to break the grip of centralized exchanges. While the tactics vary, they usually employ super-fast computers to post and cancel orders at rates measured in thousandths or even millionths of a second to capture price discrepancies on more than 50 public and private venues that make up the American equities market.
I don’t know too much about it but from what I’ve read, high-frequency trading seems to involve huge Wall Street banks using the Office Space/Richard-Pryor-in-Superman-III trick of shaving fractions of a penny off of trillions of trades every year, except that it’s perfectly legal. The NY Times has an excerpt of the book to further whet your appetite.
The Redskins’ London Fletcher is undersized and thirty-eight years old, but he’s been able to play for so long because he is a defensive Peyton Manning: seeing the game so lucidly, yelling out the offensive play about to unfold, changing alignments before the snap, organizing the field in real time. Similarly, Lavonte David, who has been with the Tampa Bay Buccaneers for two years, is just two hundred and thirty-four pounds — ten to fifteen pounds lighter than most at his position — the Wonderlic scores out on the Internet for him are not especially high, and, like all players, he makes the occasional boneheaded play. But he possesses dedicated study habits and a football clairvoyance that, come Sunday, finds him ignoring the blocking flow only at the one moment during a game when the offense runs the ball away from it.
The Hall of Fame Minnesota Vikings defensive lineman Alan Page weighed two hundred and forty-five pounds, the dimension of a modern fullback. Even so, Page was terrifying. His forty-yard-dash time wasn’t anything special, either, but he says that he could run down faster opponents because he always had sense where he was in relation to the blur of bodies around him-he could “understand the situation.” Page is now an Associate Justice on the Minnesota Supreme Court. “Being a football player requires you to take your emotional self to places that most people shouldn’t go,” he said. “You wouldn’t want to get to know the person who was in my head on a football field. I likely see some of these people in my current job — those who can’t control that person — and they do not very nice things.”
I asked him, “You could control that person on a field?”
“Most of the time,” Page said.
The safety, standing at the rear of the defense, must compensate for the mistakes of others; football intelligence matters more at this position than any other on the defense. At five-eight, a hundred and eighty-eight pounds, the Bills safety Jim Leonhard, a nine-year veteran, is among the smallest and also the slowest starting defensive backs in the game. And yet, watching him on film, he appears to teleport to the ball. Leonhard’s name seems to enter any conversation about football intelligence; he knows every teammate’s responsibilities in every call, and understands the game as twenty-two intersecting vectors. “He’d walk off the bus and you’d think he was the equipment manager,” Ryan Fitzpatrick said. “He’s still in the league because he’s the quarterback of the defense.”
Michael Lewis profiled Barack Obama for the October issue of Vanity Fair. The full version isn’t available online yet (and I have a hunch they’ll keep it that way)is here, but the excerpts might just compell me into a purchase.
At play, the president wears red-white-and-blue Under Armor high-tops, but at work it’s strictly blue or gray suits. “I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make,” he tells Lewis. “You need to focus your decision-making energy. You need to routinize yourself. You can’t be going through the day distracted by trivia.” Lewis says that if he were president he might keep a list in his head. “I do,” Obama adds. “That’s my last piece of advice to you. Keep a list.”
I got another sense, however: a sense that he was conserving focus. Fed went through all his subsidiary responsibilities as the President of Tennis (as Steve Tignor calls him) without concentrating on anything, or at least on as few things as possible.
Concentration takes mental energy, as anyone who has fought off five break points before shanking a ball on the sixth knows. And whenever I saw Federer on the grounds, he seemed to be using as little of it as possible. Practicing with Nicolas Kiefer on Ashe a few days before the tournament, he mostly just messed around. He would hit a few familiar Federer shots, the heavy forehand, the penetrating slice, then shank a ball and grin, or yell. Either way, he wasn’t really concentrating all that hard.
And is it possible that Obama has read one of my favorite books about technology, Tom Standage’s The Victorian Internet?
Obama points to the 1849 patent model of Samuel Morse’s first telegraph: “This is the start of the Internet right here,” he tells Lewis.
Michael Lewis continues his financial tour of the world with a stop in Germany. What, he asks, will the Germans do about the weakening financial situation in Europe and, more to Lewis’ point, why will they do it?
The deputy finance minister further disturbs my wild assumptions about him by speaking clearly, even recklessly, about subjects most finance ministers believe it is their job to obscure. He offers up, without much prompting, that he has just finished reading the latest unpublished report by I.M.F. investigators on the progress made by the Greek government in reforming itself.
“They have not sufficiently implemented the measures they have promised to implement,” he says simply. “And they have a massive problem still with revenue collection. Not with the tax law itself. It’s the collection which needs to be overhauled.”
Greeks are still refusing to pay their taxes, in other words. But it is only one of many Greek sins. “They are also having a problem with the structural reform. Their labor market is changing-but not as fast as it needs to,” he continues. “Due to the developments in the last 10 years, a similar job in Germany pays 55,000 euros. In Greece it is 70,000.” To get around pay restraints in the calendar year the Greek government simply paid employees a 13th and even 14th monthly salary-months that didn’t exist. “There needs to be a change of the relationship between people and the government,” he continues. “It is not a task that can be done in three months. You need time.” He couldn’t put it more bluntly: if the Greeks and the Germans are to coexist in a currency union, the Greeks need to change who they are.
The tsunami of cheap credit that rolled across the planet between 2002 and 2008 was more than a simple financial phenomenon: it was temptation, offering entire societies the chance to reveal aspects of their characters they could not normally afford to indulge.
Icelanders wanted to stop fishing and become investment bankers. The Greeks wanted to turn their country into a pi~nata stuffed with cash and allow as many citizens as possible to take a whack at it. The Germans wanted to be even more German; the Irish wanted to stop being Irish.
Michael Lewis’s investigation of bubbles beyond our shores is so brilliantly, sadly hilarious that it leads the American reader to a comfortable complacency: oh, those foolish foreigners. But when he turns a merciless eye on California and Washington, DC, we see that the narrative is a trap baited with humor, and we understand the reckoning that awaits the greatest and greediest of debtor nations.
No Kindle version available yet, just like last time. If you’d like to see one, click on the “I’d like to read this book on Kindle” below the cover image. (thx, brian)
Update: Just got word from Lewis’ publisher that the ebook version (including Kindle) will be available the same day as the hardcover.
Michael Lewis continues his tour of economic disasters — he wrote about Greece and Iceland for Vanity Fair and wrote an entire book on the US subprime mess — with a piece on Ireland and the country’s spectacular rise in becoming Europe’s mightiest economic engine and even steeper fall to third-world economic mess.
Even in an era when capitalists went out of their way to destroy capitalism, the Irish bankers set some kind of record for destruction. Theo Phanos, a London hedge-fund manager with interests in Ireland, says that “Anglo Irish was probably the world’s worst bank. Even worse than the Icelandic banks.”
Ireland’s financial disaster shared some things with Iceland’s. It was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance. But while Icelandic males used foreign money to conquer foreign places — trophy companies in Britain, chunks of Scandinavia — the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another. An Irish economist named Morgan Kelly, whose estimates of Irish bank losses have been the most prescient, made a back-of-the-envelope calculation that puts the losses of all Irish banks at roughly 106 billion euros. (Think $10 trillion.) At the rate money currently flows into the Irish treasury, Irish bank losses alone would absorb every penny of Irish taxes for at least the next three years.
In recognition of the spectacular losses, the entire Irish economy has almost dutifully collapsed. When you fly into Dublin you are traveling, for the first time in 15 years, against the traffic. The Irish are once again leaving Ireland, along with hordes of migrant workers. In late 2006, the unemployment rate stood at a bit more than 4 percent; now it’s 14 percent and climbing toward rates not experienced since the mid-1980s. Just a few years ago, Ireland was able to borrow money more cheaply than Germany; now, if it can borrow at all, it will be charged interest rates nearly 6 percent higher than Germany, another echo of a distant past. The Irish budget deficit — which three years ago was a surplus — is now 32 percent of its G.D.P., the highest by far in the history of the Eurozone. One credit-analysis firm has judged Ireland the third-most-likely country to default. Not quite as risky for the global investor as Venezuela, but riskier than Iraq. Distinctly Third World, in any case.
Of all the stories I’ve heard about the recent financial crisis — the high-risk mortgage loans, the CDOs, the credit default swaps, the Icelandic crisis — the story of the collapse of the Greek economy by Michael Lewis in the October issue of Vanity Fair is the craziest. And it’s the only one involving monks.
The tsunami of cheap credit that rolled across the planet between 2002 and 2007 has just now created a new opportunity for travel: financial-disaster tourism. The credit wasn’t just money, it was temptation. It offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.” What they wanted to do with money in the dark varied. Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German; the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way.
As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a pinata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past decade the wage bill of the Greek public sector has doubled, in real terms-and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.” The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average-and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.
The Big Short by Michael Lewis is finally out for the Kindle (well, it came out two weeks ago, about a month after the hardcover). You might remember the hubbub about the lack of a Kindle version.
Anyway, the book is excellent; I read it pretty much nonstop until finished. Lewis cleverly recasts the story of one of the biggest financial disasters in American history as a heroic tale. Heroic!
As often as not, he turned up what he called “ick” investments. In October 2001 he explained the concept in his letter to investors: “Ick investing means taking a special analytical interest in stocks that inspire a first reaction of ‘ick.’” A court had accepted a plea from a software company called the Avanti Corporation. Avanti had been accused of stealing from a competitor the software code that was the whole foundation of Avanti’s business. The company had $100 million in cash in the bank, was still generating $100 million a year in free cash flow-and had a market value of only $250 million! Michael Burry started digging; by the time he was done, he knew more about the Avanti Corporation than any man on earth. He was able to see that even if the executives went to jail (as five of them did) and the fines were paid (as they were), Avanti would be worth a lot more than the market then assumed. To make money on Avanti’s stock, however, he’d probably have to stomach short-term losses, as investors puked up shares in horrified response to negative publicity.
“That was a classic Mike Burry trade,” says one of his investors. “It goes up by 10 times, but first it goes down by half.” This isn’t the sort of ride most investors enjoy, but it was, Burry thought, the essence of value investing. His job was to disagree loudly with popular sentiment. He couldn’t do this if he was at the mercy of very short-term market moves, and so he didn’t give his investors the ability to remove their money on short notice, as most hedge funds did. If you gave Scion your money to invest, you were stuck for at least a year.
Really fascinating. In a recent review, Felix Salmon called The Big Short “probably the single best piece of financial journalism ever written”.
Well, of course, the big-market teams figured it out. They hired their own Ivy League consultants. They bought even better computers. Walks is only one tiny aspect in it … but who leads the American League in walks this year? The New York Yankees. Last year? The Boston Red Sox. The year before that? The Boston Red Sox. And so it goes. Now, six years later, it seems to me that the small-market teams are really grasping and trying to find some loophole, some opening that will allow them to win in this tough financial environment.
Accounts from more than a dozen people involved with the film, who spoke on the condition of anonymity to avoid damaging professional relationships, described a process in which the heady rush toward production was halted by a studio suddenly confronted by plans for something artier and more complex than bargained for.
Sony was probably looking for something more BIG RED TEXTish.
A brilliant account — character-rich and darkly humorous — of how the U.S. economy was driven over the cliff. Truth really is stranger than fiction. Who better than the author of the signature bestseller Liar’s Poker to explain how the event we were told was impossible — the free fall of the American economy — finally occurred; how the things that we wanted, like ridiculously easy money and greatly expanded home ownership, were vehicles for that crash; and how shareholder demand for profit forced investment executives to eat the forbidden fruit of toxic derivatives.
Wait, Steven Soderbergh is directing the film adaptation of Michael Lewis’ Moneyball? When did this wonderfulness happen?!! Last I heard, the director was the guy who did Marley & Me. Perhaps Pitt put the kibosh on that and lobbied for Soderbergh? (via fimoculous)
5. “Icelanders are among the most inbred human beings on earth — geneticists often use them for research.”
Now this is insulting. Icelanders’ DNA shows their roots to be a healthy mix between Nordic Y chromosomes and X chromosomes from the British Isles. The reason genetic-research company deCODE uses Icelandic genes for its research is not because the codes are so homogeneous, but because the population has kept excellent genealogical records dating back thousands of years.
I sort of shrugged my shoulders at this stuff when I read the piece and forged ahead for the financial meat and potatoes, but it doesn’t read so well when collected all in one place like this. Was the piece supposed to be a farce? If not, it doesn’t reflect well on Lewis or his editors at VF. (thx, micah)
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