Sunday, October 29, 2006

An Unexpected Spy Novel

William Boyd’s new novel, Restless, is a historical spy novel, a curious departure for him, but similar to Any Human Heart and The New Confessions (scroll down) in that it reconstructs a biography of a fictional historical character, as if that character were writing his or her autobiography. In this case, the character is Eva Delectorskaya, a former spy for the U.K. before and during the Second World War. Her daughter, Ruth Gilmartin, knows nothing of her mother’s past until 1976, when her mother explains that her identity and past are a complete fiction. Eva has written an autobiography and is feeding it to Ruth one chapter at a time. The action switches between Eva’s wartime memoir and the “present.” In 1976, Eva seems to believe someone is after her for what she did way back then. But we don’t know why that should be (as it isn’t revealed in her memoir until later in the book), so there is a sense of possible menace (or is it merely paranoia?) combined with a mystery. This is an amazingly contrived structure, but because the past and present stories are so interesting, I am willing to overlook it.

What amazes me, though, is that Boyd is repeating almost the exact same structure as he did in The New Confessions—the autobiography alternating with increasingly paranoid episodes set in the present. The characters and plot of the two books are quite different, but this similarity in structure is striking, as are the peripatetic travels of the protagonists. Boyd likes taking his English characters (or Russian-English, in the case of Eva) and sending them on American road trips.

I don’t fault Boyd for using this structure again. (Maybe a little for the contrivance of the doled-out memoir, but that’s ok.) So much of his work is about how a relatively ordinary present can be the result of a highly improbable past. Ruth worries briefly that her mother’s current paranoia and weird acts are a sign of mental or neurological illness (as this happened to her father before he died). But even though Eva’s fears seem to have been unfounded, we discover over the course of the novel that they were anything but irrational.

A subplot has Ruth very tangentially involved with someone who she believes might have been involved with the Baader-Meinhof Gang. This parallels Eva’s fears, and I think is meant to show that the kind of crazy situation Eva was in could happen to the most ordinary person (Ruth), and that it is easy to jump to paranoid conclusions.

This was a totally enjoyable novel—not quite up to my favorite, The New Confessions, but certainly equal to Stars and Bars and The Blue Afternoon. I wonder how much of the scenario Boyd lays out is true—or at least plausible.


A Coffin for Dimitrios

I was curious about Eric Ambler—he is frequently cited as the first serious spy novelist, one who brought moral ambiguity to the genre. So I read A Coffin for Dimitrios, which some consider his best. It was thoroughly enjoyable, but not exactly what I expected. After LeCarre and Alan Furst, it comes off as fairly straightforward. But perhaps it needs to be looked at in context. Ambler himself is eager to make that very point to the reader. The protagonist, Charles Latimer, is a writer of Agatha Christie—style mysteries, and frequently the book compares the moral clarities and neatly-tied-up plots of a mystery to the messiness of this story.

The funny thing is that in the end, the story isn’t all that messy. Dimitrios is a criminal who has worked for various governments in schemes to steal military secrets or assassinate leaders. In the end, Dimitrios is purely a bad player, always on the wrong side and always betraying his comrades and employers—in addition to his more mundane crimes of murder, drug-smuggling, etc. Latimer, on the other hand, is purely good—tempted with the opportunity to take all or part of a million francs, free and clear, he walks away from it.

Still, Ambler describes how a petty thief from Ottoman Smyrna can, taking advantage of the chaos of Eastern Europe between the wars, could become a master criminal and ultimately a board member of a respectable Monte Carlo-headquartered international bank. Dimitrios’s story is unlikely, but not impossible.

The moral ambiguity, where it appears, is shown by the employers of Dimitrios. At one point, Latimer interviews Grodek, a retired spy who hired Dimitrios on behalf of the Italian government. Italy and Yugoslavia are on the verge of war, and Yugoslavia plans to randomly mine the narrow point of the Adriatic Sea in order to prevent the entry of the Italian navy. The Yugoslavs, of course, will have a map of the mine fields, which will allow them get their navy and freighters in and out. So Grodek and Dimitrios work out a plan to ensnare a morally weak employee of the Yugoslav navy. They create a situation in which this guy owes a small fortune and can only pay it back by stealing the mine map for Grodek and Dimitrios. The fact that this hapless loser will end up jailed or executed is not an issue for the two spies. Dimitrios, of course, is a murderer and without conscience. Grodek justifies his behavior simply by saying that he has no sympathy for a traitor—and the traitor had a choice.

Another interesting thing about the book—he uses the word "holocaust" to describe the massacres of Greeks and Armenians in Smyrna by Turks in 1922. The book was written in 1938. The book also explains the difficult position in which Yugoslavia found itself between the wars--it was almost completely surrounded by fascist nations. That makes its status after the war all the more amazing--I believe it was the only country to drive the Nazis out without Allied troops marching in. Thus it was able to avoid being a vassal state of the Soviet Union.

Here is a good quote from the second paragraph of the book:

Inevitably, chance does occasionally operate with a sort of fumbling coherence readily mistakable for the workings of a self-conscious Providence.


Tuesday, October 17, 2006

Ghost Towns of the 80s and Today

Over on Calculated Risk, a quote from Janet Yellen, President and CEO of the Federal Reserve Bank of San Francisco:

According to some of our contacts elsewhere in this Federal Reserve District, data like these are actually "behind the curve," and they're willing to bet that things will get worse before they get better. For example, a major home builder has told me that the share of unsold homes has topped 80 percent in some of the new subdivisions around Phoenix and Las Vegas, which he labeled the new "ghost towns" of the West. Though the situation isn't that bad everywhere, a significant buildup of home inventory implies that permits and starts may continue to fall and the market may not recover for several years. While builders remain hesitant to cut prices so far, and instead offer sales incentives, price cuts at some point in the future seem almost inevitable.

The speech was about prospects for the U.S. economy, and Calculated Risk and those who left comments general spoke in those terms. But it reminded me of a book I read years ago called Daisy Chain by James O’Shea. O’Shea wrote about the rise and fall of Vernon Savings and Loan, and the savings and loan crisis in general. It’s a great book, and one part I always remembered was a quoted video voice-over shown to FSLIC regulator (and the closest thing to a hero of this story), Ed Gray. The video was an aerial view of miles and miles of low-rise condominiums along the I-30 corridor east of Dallas. The narration went like this:

Looking west toward downtown Dallas, we can see the hundreds and hundreds of units that are under construction, none occupied. . . Building after building, probably twenty-four to thirty complexes, all unoccupied. . . Other mature projects, probably complete for a year. . . no occupancy. . . The problems of security, vandalism, fire, control, completion—all are readily apparent from pictures like these. A project called Snug Harbor—vacant. On Faulkner Point North, numerous projects, numerous buildings, virtually totally vacant. No sales effort, no leasing effort, and across the street, more slabs and active construction. Notice the incredible waste, the total lack of contractor control. . . Evidence of arson is already available. . . This particular series of buildings made up one project, apparently totally vacant, with severe freeze damage inside each unit.

This happened because the economy of Texas collapsed when oil prices dropped, and because the S&L industry was deregulated to such a degree that developers could own banks, loan each other money, flip properties with each other, and essentially make obscene profits without actually having to sell any condos or homes.

The empty condos were an early warning sign of the collapse of the S&L industry. The government (and ultimately taxpayers) bailed out the industry. Will we have to do that again for home builders and the financial institutions that extended credit to them?

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Monday, October 16, 2006

CBGB Closed Last Night

It’s weird, but all the times I visited New York, I never went to CBGB. Weird, because I was totally seduced by its glamour. It’s the kind of location where cultural history happened spontaneously. Rock music seemed to take a wrong turn in the 70s, as bands got bigger and slicker and fancier. That wasn’t all bad—I will always love big 70s bands like Yes and Led Zep, among others. But this tendency also produced Journey, Styx, and even worse bands.

So CBGB shows up in 1973, and shortly thereafter bands like the Ramones, Television, Patti Smith Group, and Talking Heads start playing. Punk is born there. This music was a continuity from older, more basic rock—50s rock music, early Beatles, Kinks and Who, American garage rock. Guitar, bass, and drums. The Ramones were the purest expression of this—their music is deliberately stoopid. (Television, Talking Heads, and the Patti Smith Group were all total brainiacs in comparison.)

I think the legacy of punk is an honest sound. Honest meaning, the sound of electric guitar, bass and drums (and other instruments, if used) without complicated studio trickery. This is the hallmark of indie rock and of Metallica-style metal.

The difference between the punk-influenced “honest” sound and the more processed, studio-created sound is fairly profound to my ears. But they are just two modes of expression—I don’t see one as better than another.

But I still love the bands that got their starts playing at CBGB.

Sunday, October 15, 2006

Remembering Gillo Pontecorvo

Gillo Pontecorvo just died. He was the filmmaker who made The Battle of Algiers. This is a good opportunity to think about the film. When I first watched the film, I didn’t really understand it. It didn’t show exactly that terrorism works (the terror cells are eventually destroyed by the French). It likewise doesn’t exactly endorse the brutal counter-terror methods of the French because in the end, they lose, too.

Now that we are living through an age of terrorism, I think I understand The Battle of Algiers better. Terrorism and torture are mirror images—acts that make monsters of their perpetrators. They are, tragically, tactics that encourage each other. We Americans—like the French in Algiers—have fallen into a moral trap by responding to terror with torture. Al Zawahiri also fell into a trap of responding to torture with terror years earlier.

I recoil from moral equivalency—it is a technique always used by the guilty to basically say “Everybody does it!” And the 9-11 terrorists were monstrous and evil, almost beyond my ability to conceive. But America’s response has been to become a torture state…

See The Battle of Algiers—it’s a powerful and timely work. Also read Lawrence Wenchler’s A Miracle, A Universe: Settling Accounts With Torturers.


Friday, October 13, 2006


Weird! I was a little disappointed that Eugene Fama failed to win the Nobel, but the field of finance ended up being represented after all. Grameen Bank, the inventors of microfinance, won the Peace Prize.

I think the jury is still out on microfinance in an important way—it seems to me that it needs to be widespread enough that one can see actual improvements in an economy. Grameen has been operating in Bangladesh for 30 years. Since 1980, the per capita GDP has increased annually by 3.4%, according to the World Bank. That doesn’t seem so great, especially compared with other poor nations. (Compare it to 5.7% for Malaysia in the same period.)

This is probably unfair—the better measure would be to compare Bangladeshi Grameen clients with non-clients.

One really interesting thing about Grameen is the new concept of collateral that they pioneered. Since the recipients of their loans don’t own things or have legal title to what they do own, Grameen came up with a way to group borrowers together and make them collectively responsible for each other paying. Moral suasion, status in the community, fear of disapproval and/or letting down their friends are the motivators. I think informal immigrant finance networks work this way sometimes, and may be where Grameen got the idea.

In any case, I like that Grameen won. They are all about using a capitalist tool—credit—to improve people’s lives. But their approach to credit is designed for the local culture (instead of imposed by ignorant outsiders) and is scaled in such a way to allow the poorest of the poor to participate. It understands that entrepreneurs can exist even among the poorest, if capital is available. That’s a beautiful idea.


Wednesday, October 11, 2006

Pamuk . . . or Kapuscinski?

The Nobel in literature will be announced tomorrow, and the favorite is Orhan Pamuk, whose books I’ve never read but have heard good things about. It would be a good choice for political reasons, since writers in Turkey are under dubious attack for writing things that insult Turkey (like mentioning the Armenian genocide in a novel). So maybe the Nobel people want to remind Turkey that the world cares about its writers.

This article suggests that one of the favorites is Ryszard Kapuscinski! Kapuscinski is a Polish journalist who has written some great non-fiction books, but the Nobel Prize in literature? It seems like a real stretch. That said, I recommend his Another Day of Life and The Soccer War.

UPDATE: Pamuk won it.


Monday, October 09, 2006

No Nobel for Fama . . . Yet

Edmund S. Phelps, an economist I have never heard of, won the prize. I'm sure he's deserving, but I wish it had been Fama...

UPDATE: Phelps modeled the relationship between unemployment and inflation, and while I am far from qualified to address the novelty or quality of his work, there is no doubt that it is important. Maybe next year for Fama.


Sunday, October 08, 2006

Fama for Nobel

The Nobel Prize in economics* is about to be given out, and I am rooting for Eugene Fama. Fama is a University of Chicago economist who did lots of pioneering work on market efficiency and CAPM. Like many finance theorists, he put his money where his mouth is with Dimensional Fund Advisors, which is an investment firm in Santa Monica run in accordance with his theories. It has generally been quite successful, and I guess it’s not fair, but it is amusing to compare it with Long Term Capital Management with its Nobelists Robert Merton and Myron Scholes.

I have a personal reason for pushing for Fama. I know his son, a gifted amateur cartoonist, Gene Fama. By amateur, I mean that he didn’t earn his living as a cartoonist, although he did earn some decent cash doing it from time to time (I should know—I paid him for his services). He is a very funny, talented guy. I did meet his father once, who intimidated me (I really didn’t know who he was, but he asked pointed questions about the business I was in, publishing, that made me realize how irrationally it was run**).

So as usual in this kind of thing, I have a perfectly sentimental irrational reason for hoping Eugene Fama wins. I don’t think he needs the money, but he should get the recognition.

Modigliani got it in 1985, Miller and Sharpe in 1990, and Merton and Scholes in 1997—it seems like Fama has been left out, even though his work as I understand it is right up there with all those other guys. I would hate to see a situation like Fisher Black, who died before he could get the prize. Nobel Prizes are often like that—a race to give out the prize to all deserving recipients before they die.

So for what little it is worth, my vote is for Fama.

*By the way, Thomson Scientific is predicting Fama and French for Nobel, as is Marginal Revolution. He's on the shortlist in predictions from and VoluntaryXchange.

**That said, you can download two of his books for free from his website, so maybe he doesn't look at publishing from the most economically rational point of view himself!


Sunday, October 01, 2006

Data-mining and Negative Advertising

There has been a lot written about microtargeting and data-mining in elections to identify voter segments that will have a high response rate to targeted appeals. This means that 1) if apporached (through advertising or other GOTV methods), they will vote, and 2) will vote for your candidate. This has apparently been one of the primary tools of the Republican party in the last few elections, and while it has been used by Democratic candidates with success, doesn't yet seem to be part of the strategy of the Democratic party as a whole.

The basic idea is that by identifying just the right target group, even if that group is really small, a campaign can get massive bang for the the buck in terms of dollars spent on GOTV. This is why polls leading into elections may be wrong, because a successful microtargeting effort will cause a given identified group (let's say, female Honda owners who live in apartments and have voted in 50% of the last 4 elections) to come out to the polls in much larger numbers than would be predicted by their percentage of the population as a whole. Aside from the excellent response rate, it means that campaigns can spend less money on shotgun-style advertising--for example, broadcast television ads, which have a very low response rate since they reach people who might not be for your side, or might not be able to vote, or might not vote, or don't even live in your candidate's district.

This is a proven technique, but it is predicated on the idea of response rate where response is actually voting. What if you worked it where the desired response was for a likely voter for the other guy to stay home on election day? This is the fundamental premise of negative campaign ads. They're designed to keep potential supporters of the opponent at home.

But negative campaign ads reach too many people--they reach hardcore supporters of your opponent, who are unlikely to be swayed. They reach opposing party loyalists who may believe the ads but will still vote because the guy is in the right party. They reach your supporters, who already hate the opponent anyway, so their reactions are kind of meaningless. They reach people who weren't going to vote anyway. Etc. It's expensive to reach all those people, and a waste of money of the vast majority of those reached will not respond in a meaningful way.

So, could you create voter segments to whom you could target negative advertising or publicity? Let's say that female Honda owners who live in apartments and have voted in 50% of the last 4 elections are weak supporters of your opponent and only need a little push to keep them from voting (thus denying your opponent critical votes). How do you microtarget them? Cable TV ads? Direct mail? And has microtargeting for negative ads been done? I'd be curious to know.