Emanuel Derman http://blogs.reuters.com/emanuelderman Models.Behaving.Badly Tue, 25 Sep 2012 01:11:37 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.5 More from Prost, a fictional work in progress http://blogs.reuters.com/emanuelderman/2012/09/25/more-from-prost-a-fictional-work-in-progress/ http://blogs.reuters.com/emanuelderman/2012/09/25/more-from-prost-a-fictional-work-in-progress/#comments Tue, 25 Sep 2012 01:11:37 +0000 http://blogs.reuters.com/emanuelderman/?p=1011 Late in life, when his roots should have held him steady, he became unmoored, and it seemed inappropriate. But who determined what was appropriate?


In the summer of 1956 when he was an eleven-year old boy, the hot items were fluorescent socks in lime green or neon pink that glowed in the dark as they strolled up and down the beachfront at night. Those strolls were a local version of what his parents called shpatzieren, the pre-WWII Mitteleuropean slow promenading up and down main street on a Saturday or Sunday summer afternoon, men in white suits walking arm-in-arm with their parasol-carrying wives, the men doffing their hats to the opposing women on someone else’s arm, the women smiling back in response.

Here in southern Cape Town (or Cup-Eh-To-Ven, as his mother first pronounced it, she told him, when she heard she was to emigrate to there from Poland) no one wore white suits. Here, teenagers and parents shpatziered in casual clothes on the elevated Promenade in Muizenberg, or on the winding pavement beside the lawns of Beach Road, Sea Point.

Muizenberg was a Southern African Brighton or Blackpool, a colonial English-style summer resort, the preferred vacationland of Jewish immigrants who lived in the lower part of the continent.

Every summer for several years his family spent two weeks at The Queens Hotel, a shabby dark three-story establishment owned by some relatives of his father, open only in the summer. All the hotels in Muizenberg were colonial. Every meal from breakfast to dinner seemed to involve baked haddock, and every room had a chamber pot in case you had to urinate in the night, since the shared bathroom was at the end of the corridor or even half way up another flight of stairs. Parents requested on a form to have coffee or tea with biscuits delivered on a tray to their room each morning at 6 or 7 a.m., a supposed holiday luxury whose nature eluded him: Why would you want to have coffee served to you in bed long before breakfast and then go back to sleep?

Smarter and more regal than The Queens his family stayed at was The Balmoral, the favorite of richer visitors from Johannesburg. Rhodesians with their better British-sounding accents stayed at Rhodesia By The Sea. The local bioscope was called The Empire. Its floor was sticky with a thin layer of dried spilled cool drinks that felt and sounded like Scotch tape on your bare feet. Its upstairs was reserved for Coloureds, who weren’t allowed on the main floor.

Muizenberg was a daytrippers resort too. When his family weren’t holidaying in the hotel, they often drove the fourteen miles from central Cape Town to Muizenberg on weekends along a narrow two-way road that could take an hour or more in traffic. His immigrant uncle, who sometimes drove them all there in his snazzy white Ford, insisted on pulling over at about the half way point to take a fifteen-minute nap. Most often it was his mother who drove them there for the day in their navy four-door 1948 Chevrolet, stopping én route to buy trays of fruit or entire watermelons his mother tapped with her knuckles from Coloured roadside vendors.

At lunchtime, daytripping crowds picnicked on the Muizenberg lawns; the fancier families unpacked elegant wicker picnic boxes containing neat stacks of English china and sets of bone-handled knives and forks secured by leather toggle straps. Before lunch and after everyone jammed together under beach umbrellas on the narrow stretch of sand between the raised cement sidewalk and the sea.


All of Muizenberg’s beaches were divided in two by a double row of brightly colored (red, yellow, blue or green) wooden bathing boxes that ran parallel to the water. Families rented a semidetached half of a box for the season; you could lock and store beach equipment in them, and change in and out of your bathing costume in apparent privacy. Two friends of his that summer peeked through holes they had surreptitiously poked in the dividing wall of their parents’ box to watch their attractive girl cousins in the adjacent half changing out of their costumes. His family‘s doctor, a thin old man with a bald head, had a box there too. After bathing he emerged from the cold water with his thin legs sticking out of loose worn elasticized Speedo-style bathing briefs and flapped his arms back and forth in the style of an Olympic swimmer warming up at the edge of the pool before a race. No one snickered at his revealing bathing suit; they knew that it was a foible, like Einstein’s wild hair or socklessness.

Muizenberg’s Snake Pit was the most crowded of its beaches, a triangle of white sand between its beach boxes and the Promenade that was packed with white teenage boys and girls on beach towels. Coloured men roamed the beach selling paper cups of lychees for a shilling. At dusk other Coloured men and women systematically strained the sand for dropped coins.

Before entering the Snake Pit it was traditional to sit on the Promenade above it, your legs dangling over the cement wall. You surveyed the scene, checked out who was where, and only then went down to join the people you had spotted.

In the Snake Pit, that summer when he was eleven, the really cool boys and girls wore thin gold or silver chains with Stars of David around their necks. There was something sexy and shameless, and nothing at all religious about wearing the symbol, a silly rebuttal to the crosses worn by gentiles. He wanted one too, though in his heart he knew that jewelry on men was prost, that asking for one was embarrassing, and that he would never get one.


Though no one ever translated it for him, prost was Polish-Yiddish for vulgar, common, uncultured, crass, and unrefined, or some mix of them all. Prost, for example, were the Silverbergs in the apartment down the road from his family’s house, barely high-school educated and doubly damned by not knowing much about Jewish culture either. Mr Silverberg walked with a prominent belly-out duck-toed strut that wasn’t shpatzieren. He dressed flashily, sold clothes on lay-bye to Coloureds who paid him in monthly installments. He could speak Afrikaans fluently. He beat his kids with a belt when they were naughty, chasing them around their small bedroom until he caught them, and when he cursed he cursed in four-letter English words rather than obscure Polish or Yiddish ones. Mrs. Silverberg was simultaneously blowsy and skinny, a combination that gave her a sour dissatisfied look. She had long fingernails, each prostly painted in two-tone scarlet and silver, the colors meeting on a diagonal straddled by a tiny black spade or club. A few years later she had a hysterectomy which everyone spoke about in veiled tones, and Mr. Silverberg looked even more irritated than usual.

At the Silverbergs’ son’s Saturday night Barmitzvah party, a dinner-and-dance at The Bohemian Club whose red light rotated and flashed at its front entrance, someone made a toast to the Barmitzvah boy’s parents. The toastmaster (this was ex-colonial South Africa) reminisced about how he and Mr Silverberg in their youth had mischievously climbed trees to steal loquats from neighbors’ gardens. “That’s all they can find to say about him?” the boy’s father said in the car on the way home. “Stealing fruit?” That was prost.


Shpatzieren. In Muizenberg you strolled on the Promenade, which ended in midair above the sand dunes that stretched for miles beyond the populated part of the beach. You strolled there only if you vacationed there. No one would dream of driving to Muizenberg in the evening to take a walk.

Sea Point was where you went for walking.  Your parents took you there by car; you separated into tribes; boys walked with boys, girls with girls, checking each other out on hot summer nights during the holidays. Parents strolled separately on the same strip. At the end of the evening you met up with them again for the ride home.

If Muizenberg was Brighton, then Sea Point was Nice or Venice, its beachfront dotted with cafés and pizzerias, its apartment blocks boasting French- or Italian-Riviera names (Marseilles, San Remo). You could buy gelatos, frullatos, espressos, cappuccinos. All of this exotic Italian-ness had sprung up during the postwar boom in which Italy, despite being part of the Axis only a short few years before, had miraculously become synonymous with sophisticated food, movies and clothes. You were still not supposed to buy German, but Italian was fine.

Some actions were appropriate, others weren’t. All behavior had meaning. Was anything actually neutral?


One afternoon when he was four years old, he had sat on the living room floor and listened to the radio, guiltily absorbed in a religious program about Jesus and Christianity. It sounded beautiful,  he liked it, but he knew it wasn’t good to like it.


At the center of Muizenberg was a regal Pavilion with a high central dome, and within it a Milk Bar where you could twirl on raised red leather bar seats and order milk shakes or banana splits. In the right wing that extended from the dome was an English-style penny arcade with purely mechanical games. One of them involved dropping a large contemporary copper penny into a slot and onto the tracks of a glass-enclosed vertical wheel, and then rolling the penny progressively down the horizontal tracks by tilting the wheel from side to side, without letting the it fall off the edge. The prize was getting your penny back. Inside the arcade too was a little studio where you could pay to have your voice recorded on a small shellac-covered tin disk. He still had one his father recorded with him years earlier, reciting Mother Goose at 78 rpm, interspersed with his father’s audible prompts in a heavy Yiddish accent. There was no longer a way to play it.

To the left of the Pavilion was the long cement Promenade. At its entrance was a ten-foot-high hexagonal cement kiosk, windowless, that housed a camera obscura whose lens at the top projected onto a horizontal table at the center of the kiosk the astonishing moving images of the people outside walking up and down. His father used to take him there on sunny days.

Once that summer, idling alone at the entrance to the Promenade, he was approached by an elderly Jewish man who told him how he, the man, when he had been thirteen years old, had found the Jewish religion and his Barmitzvah preparations unsatisfying, and had turned to Jesus. The boy found this convincing and attractive, and worried that he would suddenly find himself converting to Christianity.


At the end of his first year in grade school his family went to Muizenberg for the day. When he grew tired of walking his father carried him piggyback. Somewhere near the penny arcade he saw a schoolmate, who saw him being carried by his father. He buried his face in his father’s back; being carried at his age was shameful.

His mother was good with a sewing machine. In summer she made him pairs of shorts out of cotton with an elasticized waist that he wore to the beach. They were embarrassing and a little loose around the legs. In winter she knitted him Fair Isle sweaters, copied from the imported ones his cousins had. His cousins had more toys than him, and were wild, breaking out into fierce physical fights that their mother threatened to report to their father.

Looking back, it seemed to him, he had been half-spoiled and half-constrained.


That summer at Muizenberg he fell in love with a twelve-year-old girl called Anna Lidin. She was dark and plump and black-haired and self-sufficient, and wore pink lipstick and a gold Star of David around her neck. After a few days she grew so tanned she could have passed for Coloured. One day a conductor on the train from Cape Town to Muizenberg told her to go to the car she belonged in. Anna simply tossed her head and laughed.

The Lidins were spending two weeks at The Queens Hotel too. Mr Lidin was short and quiet; Mrs Lidin, dark like her daughter, was bubbly with a wide cheerful once-acned face. There was nothing special about them, nothing immediately noticeable. In addition to Anna, they had a son, Ivan, about ten years old.

“They couldn’t find a better name than ‘Ivan’?” the boy’s mother asked his father  rhetorically. “Every Russian peasant is called Ivan.”

Anna and her family, the boy deduced, were prost too. But the Lidins were born in South Africa, didn’t speak with accents, had no idea of the shame involved in giving your Jewish son a Russian peasant name. Mr and Mrs Lidin walked on the Promenade together after dinner in The Queens Hotel, each with an arm about the other’s waist, a couple one generation more assimilated than his immigrant parents.

The Silverbergs’ prostness was visceral, instantly apparent. The Lidins’ was more subtle. But Anna was pretty, the Lidins were nice, and they were physical with each other. Did prost have to be bad?


Prost was a family failing, a function of upbringing and occupation. Prost wasn’t the same as uneducated, though it was correlated.

Prost came by way of nurture. Entire families were prost. Its opposite was eidel ― refined, delicate, and gentle.

Eidel didn’t mean cultured. You could be uncultured  and uneducated, and yet be eidel. 

Eidel was inherent; it came from nature.


The Coloured “maids” that were employed by each family in the boy’s all-white neighborhood  were probably prost too, but it wasn’t their fault. They lived in little rooms adjacent to each family’s house. When their day jobs were over, it seemed, they lived their dramas of sex and violence in a separate world of their own. His family’s maid entertained her boyfriend Walter in her room in the evenings. When his parents left him alone at home on a Saturday night to go to the movies, Walter came over from the nearby orphanage where he worked, and together they retreated to the maid’s room. There she and Walter drank and argued and fought. One Saturday night at 11 p.m. she came running into the house from her room. When Walter tried to come after her through the locked back door, she boiled a kettle full of hot water and poured it out of the upstairs rear window down onto him. A few years later, when Walter roamed their back garden late at night seeking entry to the back yard where her room was located, the boy’s father cleverly shouted through the window: “Stand still, or I’ll shoot!” and Walter fled.

Some maids had sad lives. Their own families, sometimes their own children, lived far up country with their relatives, while the maids looked after other people’s children.


Why was prostness such a big deal to his immigrant parents, such a demarcator of people, he wondered years later? Was it the narcissism of small differences? Just as apartheid widened the small gap between poor whites and the Coloureds from whom they were not that different, did the notion of prostness usefully broaden the gap between similar Jews, elevating some, diminishing others? Weren’t they all equally God’s children, he wondered?

Or was it the sexual element in prostness that was so reprehensible? There was, it seemed to the boy, something unreserved and passionate about prost people, a shameless willingness to take desperate chances.  Did his parents recognize the temptations of vulgarity, and fear that it could level you or bring you down? Was that why they abhorred it?


His father was in business. His parents were worldly but not prost. His Hebrew teacher, a scholar, wasn’t worldly at all, and came to his father for financial advice. But even the teacher-scholar shunned prost, recoiling when his daughter married the son of a butcher.  Still, there was more than one dimension to respectability. Wealth could override lack of refinement. There was some unarticulated tradeoff between prostness and wealth. The boy could tell that were families who were wealthier but more prost, and families who were less wealthy but more refined. His family seemed to think, he concluded, they were the convex combination of money and refinement, sitting at the saddle point: more refined than wealthier people and wealthier than more refined people.


Perhaps because his parents abhorred it, there was something he found fascinating about prost. Was it this forbidden attraction to energy and vulgarity that led to his unmooring?

When you became unmoored you could do anything you liked, but who knew where it might lead?

This was originally published in the Frankfurter Allgemeine Zeitung.


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An eagerness to impart unnecessary information http://blogs.reuters.com/emanuelderman/2012/09/14/an-eagerness-to-impart-unnecessary-information/ http://blogs.reuters.com/emanuelderman/2012/09/14/an-eagerness-to-impart-unnecessary-information/#comments Fri, 14 Sep 2012 15:04:24 +0000 http://blogs.reuters.com/emanuelderman/?p=1007 I find myself increasingly in irritated disagreement with the many neuroscientists and evangelically professional atheists who think that science is everything, that matter is all we have, and that photographic images of chemicals glowing in the brain are equivalent to thoughts and feelings. (I have no problem with their simply disbelieving in God.)

I grew up a rationalist. My introduction to the supposedly spiritual was in synagogue and school, but it was a pro forma introduction, tales and laws and recitations but no discussion of the perception of God. Nothing about the sort of experience Aldous Huxley wrote about in The Perennial Philosophy.

While in Oxford as a postdoc, some several-years-old advice to read Rudolf Steiner, given to me in a time of trouble, popped into my head again when I passed a poky little anthroposophical bookstore. I purchased an English-language copy of Knowledge of the Higher Worlds.

There was no way I could make my way though the entire book, which was somewhat turgid, but a few sentences set off internal reverberations.

The Mystic, the Gnostic, the Theosophist, have always spoken of a world of the soul and a world of spirit which are just as real to them as the world we can see with physical eyes and touch with physical hands.

And, later in the book, a prescription for spiritual training:

Other traits which have to be combated as well as anger and irritability are timidity, superstition, prejudice, vanity and ambition, curiosity, eagerness to impart unnecessary information …

That latter phrase — eagerness to impart unnecessary information —  hit home. I couldn’t have phrased my tendency better myself.

Mystics, Gnostics and Theosophists sound corny and stupid. But that evening in 1975, the idea that a mental world existed as a primitive rather than a derivative resonated with me, and so I was willing to cut Steiner some slack.

I never became an Anthroposophist, but some of those perceptions still carry weight with me. Years later, when I read Spinoza’s Ethics, I came across a version of the same idea. Mind and matter, according to Spinoza, are simultaneous attributes of one underlying Substance. Or, in modern terms, mind is not an epiphenomenon of matter nor is matter an epiphenomenon of mind. Neurophysiology doesn’t explain psychology, and psychology doesn’t replace neurophysiology. Spirit co-exists with matter; spirit is an element, not a compound.

Another Steiner sentence rung a bell too:

In all its phenomena the outer world is filled with divine splendor, but first we must have experienced the Divine within ourselves if we are to discover it in the surrounding world.

Wonder, wrote Spinoza, is “the conception of anything, wherein the mind comes to a stand, because the particular concept in question has no connection with other concepts.” Wonder comes from mystery. What bothers me about reductionists is precisely their lack of a sense of mystery.

In a 1988 talk Saul Bellow said:

The philosopher Morris R. Cohen was once asked by a student, “Professor, how do I know that I exist?”

“So?” Cohen replied. “And who is esking?” (sic)

Thanks to Professor Cohen I feel that I stand on firmer ground, and can do what I have done all my life: i.e., to fall back instinctively on my first consciousness, which has always seemed to me to be most real and easily accessible. For people who have no access to any such core consciousness, no mysteries exist. … Facts, however, must be respected, and the fact is that for reasons I can’t explain, my own first consciousness has had a long unbroken history. … All I can say is that it is a fact and I wonder why anyone should feel it necessary to put its reality in doubt. But our meddling mental world puts all such realities in doubt. This world of truly modern, educated, advanced consciousness suspects the core consciousness that I take to be a fact of being inauthentic and probably delusive.

I’ve come to believe that everything in the world is secondary to an unquestioned and unquestionable personal existence. The “existence” we speculate about depends on our existence. We are trapped (and liberated) by our consciousness. As Merleau Ponty wrote:

We must not, therefore, wonder whether we really perceive a world, we must instead say: The world is what we perceive … For insofar as we talk about illusion, it is because we have identified illusion, and have done so solely in the light of some perception which at the same time gave assurance of its own truth.


There are multiple ways of knowing the world, among them experience, heuristics, models, theories and intuition. The highest endeavor of the mind, according to Spinoza, is to understand things by intuition. Einstein, in a speech honoring Max Planck, the founder of the quantum, wrote of nature’s principles: There is no logical path to these laws; only a sympathetic understanding of experience can reach them. Intuition is precisely a sympathetic understanding of the other, a mode of merging the understander and the understood.

And where can you get intuition?

Wrote Steiner:

Reverence awakens a power of sympathy in the soul through which we draw towards us qualities in the beings around us, qualities which would otherwise remain concealed.

If I encounter a human being and blame him for his weaknesses, I rob myself of the power of higher knowledge; but if I try to enter lovingly into his qualities, I muster this power. 

One must, at times, silence not only all intellectual judgement in listening to people, but also all feelings of displeasure, denial or agreement. When you can listen without criticism, even to apparently ridiculous stuff, you can (perhaps) learn to merge into the being of another person. That isn’t easy.

Given the choice of additional scientific knowledge or intuition, I choose intuition. I want a sympathetic understanding of the world. Meanwhile though, I still haven’t overcome my eagerness to impart unnecessary information.

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A parable on quantitative easing http://blogs.reuters.com/emanuelderman/2012/09/11/a-parable-on-quantitative-easing/ http://blogs.reuters.com/emanuelderman/2012/09/11/a-parable-on-quantitative-easing/#comments Tue, 11 Sep 2012 14:18:02 +0000 http://blogs.reuters.com/emanuelderman/?p=1004 When my son was a little less than two years old, I used to play a game he liked, bouncing him up and down on my knee while chanting a nursery rhyme:

Half a pound of tuppeny rice
Half a pound of treacle
Mix them up and make them nice
Pop goes the weasel!

On “Pop goes the weasel!” I would sharply drop my knee all the way down and let him bump to the floor. He always chortled. He liked the game so much that one day he asked me to repeat it over and over again, perhaps fifteen times, laughing at each bump except the last one, when he turned to me in surprise and asked: Why it’s not funny anymore?

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German models http://blogs.reuters.com/emanuelderman/2012/09/03/german-models/ http://blogs.reuters.com/emanuelderman/2012/09/03/german-models/#comments Mon, 03 Sep 2012 23:38:11 +0000 http://blogs.reuters.com/emanuelderman/?p=1000 I have begun to write what will be a regular column for the German newspaper Frankfurter Allgemeine Zeitung (FAZ), and the first one just appeared this Saturday Sep 1 2012, translated into German. Here is the introduction to the column written by Frank Schirrmacher.

And here below is the original text of the column in English, from which the German was translated.

The good days are here once again for models of the physical world: after a drought of almost fifty years, physicists at CERN have discovered what seems to be the long-awaited Higgs boson. But we are living through a period of bad days for models of the social world, where I am using the word ‘model’ in the sense of Gilbert and Sullivan’s Major-General Stanley in The Pirates of Penzance, who sang: “I am the very model of a modern Major-General.”

On August 16 South African police fired on striking black miners. On August 17 the members of Pussy Riot were sentenced to two years imprisonment, the Russian judge commenting that the members had showed complete lack of respect for believers. Who would have thought, more than twenty years after the end of apartheid and the fall of the Berlin wall, that a black government would shoot black protestors, and that a Russian court would sentence people for offending what used to be the opiate of the masses? Who would have foreseen that political power and business success would go so hand-in-glove in both countries?

As models for living, apartheid and communism failed twenty years ago. What is sad nowadays are the failures of corporate capitalism, their replacement that has disappointed not only in South Africa and Russia, but in the USA and Europe too. There is something awry with the workings of the current model. This is a time for indignation. Here are just a few of the current scandals.

Banks first. In late July HSBC set aside $700mm to cover fines and expenses for the possible laundering of drug money. Only a month earlier, Barclays agreed to pay $450mm to regulators to settle allegations that it manipulated LIBOR, the interest rate that is the benchmark for business and consumer loans worldwide. Shortly thereafter Standard Chartered, after some bluster, quickly agreed to pay $340mm to settle charges that it concealed transactions used to fund terrorist groups.

I like to think of utilities as a good model for banks. Banks are given the privilege of making loans that create the money and credit necessary to prime a modern economy, and in that sense are akin to the power companies that keep the country running. But banks have been utilities running wild. It’s astonishing that charges of malfeasance are settled when institutions pay fines, mere money, and that the fines, which are relatively small compared to profits, hurt the shareholders but not the individuals responsible for the misdeed. Banks as institutions get away with things that individuals could not.

I’ve described sins of corporate commission, but there are sins of omission too. Visa, MasterCard, Paypal, Western Union and Bank of America have at various times refused to transmit payments to Wikileaks. Whatever your opinion of Julian Assange and Wikileaks, it’s hard to understand why a bank with government privileges should have the authority to decide arbitrarily to whom and to whom not to transmit money. Especially when, according to the NY Times of 28 Sep 2006, “Bank of America acknowledged yesterday that its lax operations allowed South American money launderers to illegally move $3 billion through a single Midtown Manhattan branch.”

Model failures go beyond the financial sector. In April Johnson & Johnson was merely the latest pharmaceutical company ordered to pay a giant fine, in their case more than $1.2 billion for minimizing the dangers of Risperdal, an antipsychotic drug increasingly prescribed for young children.

As for the internet, once foolishly dreamed of as idealistically non-commercial, the distribution of news and the arts is increasingly based on  giving consumers content “for free” in exchange for the right to sell their personal information to advertisers. Here too, the business model violates traditional standards of privacy, albeit with the tacit consent of the audience. I am reminded of a paragraph from a letter that Aldous Huxley wrote in the late 1940s to George Orwell:

“Within the next generation I believe that the world’s leaders will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging them and kicking them into obedience.”


Which individual within the corporation actually laundered money or manipulated LIBOR or decided arbitrarily to cut the flow of funds to certain people or institutions? It is only when individuals within the corporation directly and personally suffer the consequences of their individual misdeeds that other corporate employees will hesitate before committing similar acts.


There is something awry with the current model of attaining political power too. When I grew up in South Africa during the Fifties and Sixties, there were big issues to fight over — one man one vote, the right to live where you wanted, detention without trial — and politicians tried to lead the nation, by persuasion if they could, in the direction they thought was right. Nowadays, where I live, most politicians with a hope of getting elected don’t lead; they try to figure out what positions will make them electable, and then aim to transform themselves into the person that holds those positions. Advertising, of course, plays a big part in achieving this temporary transsubstantiation.

There are giant issues facing the country and the world. It would be wonderful once again to see leaders like the very model leaders of a generation or two ago, men like South Africa’s Mandela and de Klerk and Russia’s Gorbachev, who, rather than fulfilling their preprogrammed destinies, looked at where their country was going and then tried to get one step ahead of fate.

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The Complexities of Advertising http://blogs.reuters.com/emanuelderman/2012/08/08/the-complexities-of-advertising/ http://blogs.reuters.com/emanuelderman/2012/08/08/the-complexities-of-advertising/#comments Wed, 08 Aug 2012 21:23:00 +0000 http://blogs.reuters.com/emanuelderman/?p=997 I’m attending a meeting on complexity at the Santa Fe Institute, and today there was a panel during which someone bemoaned the absence of science reporting in US newspapers, and mentioned that even the NY Times Science section is mostly not serious. Someone from the UK then remarked that science programming on British TV is much better.

I postulate that you can understand what happened to the NY Times Science section by comparing nbcolympics.com to bbc.com vis a vis Olympic reporting.

NBC, like Google and Facebook is driven by advertisers, and has to deliver you to them. Hence most of what follows. BBC is funded by subscriptions (compulsory ones, for better or worse) and hence can take the high road, which has its advantages.

The NY Times Science section, like Facebook and Google, has to attract corporate advertisers. Case closed.

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Dog’s Lives http://blogs.reuters.com/emanuelderman/2012/08/05/dogs-lives/ http://blogs.reuters.com/emanuelderman/2012/08/05/dogs-lives/#comments Sun, 05 Aug 2012 17:49:18 +0000 http://blogs.reuters.com/emanuelderman/?p=985 I am in Santa Fe, NM, about to spend a few weeks at the Santa Fe Institute where I hope to learn something about market microstructure and agent-based models.

Everyone in Santa Fe (i.e. the few people I’ve met thru work here in the past — I wrote a chapter of Models.Behaving.Badly here in 2009, using their excellent library) seems to think Santa Fe is paradise on earth, and maybe it is, though I prefer paradise on the seashore. I  have this atavistic urge to find a place that is easygoing but has access to culture, and yet lets you back off from the discontents and irritations of politics and corporations. People here seem to think this is it. But, I should add, people here seem to be close to retirement.

One of the points I tried to make in Models.Behaving.Badly was that models were analogies, comparing something you don’t understand to something you do, e.g. a nucleus to a liquid drop, or stock returns to smoke diffusion, whereas theories were (attempts to discover) absolute (rather than relative) descriptions of phenomena (e.g. Newton’s laws or relativity). I spent an evening with an accomplished physicist here, and was pleased to see that he agreed. When I was here last I read Maxwell’s papers from the 1860s; he called his final description of the electromagnetic field a theory, having first tried a bunch of metaphorical models to warm up his intuition and understanding.


En route here, Aaron Brown emailed to ask how I came up with the title My Life as a Quant, as background to an article he’s writing. This led me to the following recollection:

When my kids were really small, no more than three or four years old, I used to love to take them to entertainment that was simultaneously enjoyable for adults and children, eve if on different level. On TV you could find Sesame Street and The Muppet Show. For live performances, among others I had lucky strikes with Joseph and the Amazing Technicolor Dreamcoat at a theater on 2nd Ave, The Paper Bag Players at Symphony Space, a show of Randy Newman songs in the East Village. I remember my son becoming mesmerized by the latter.

We also saw some terrific movies — a Japanese one about dogs accidentally marooned in the Antarctic through the winter, and then, My Life as a Dog, a Swedish film about a young boy whose mother is ill and sends him away to live with relatives. It’s a complicated story, but the boy often reflectively compares his plight to others worse off, for example Laika, the Russian space dog, sent up alone into orbit on Sputnik 2 when I was in high school.

I never liked the word ‘quant’ very much when I first started on Wall Street some years after that movie, and realized that people who used the word used it somewhat derogatorily. In those days, I never heard anyone self-describe themself as a quant. I had this impression confirmed in the Nineties when I read Mark Kritzman’s and Gary Gastineau’s Dictionary of Financial Risk Management, where they commented, at the end of the definition of the word quant: ‘often pejorative.’

When I came to write my memoir, the perception of having been a second-class citizen in the early days of quantitative strategies led me to think of the movie My Life as a Dog, and modify Dog to Quant for the title. The subtext was meant to be dogs.

Nowadays quant is a hotter word (quant fund, battle of the quants, etc etc) and many people who call themselves quants wouldn’t have passed for what we considered quants in the old days.

You can read the truly sad story of what actually happened to Laika here: http://en.wikipedia.org/wiki/Laika. I hadn’t known this until today.

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Tail risk, the police, and grad school http://blogs.reuters.com/emanuelderman/2012/07/25/tail-risk-the-police-and-grad-school/ http://blogs.reuters.com/emanuelderman/2012/07/25/tail-risk-the-police-and-grad-school/#comments Wed, 25 Jul 2012 17:53:19 +0000 http://blogs.reuters.com/emanuelderman/?p=965 This past Saturday morning I walked past the Loews movie house on 68th and Broadway and saw, stationed outside, a NYC police car with sirens flashing, and standing in front of it, with his back to the car and with a holstered gun, a cop, his eye on the movie house … which was, I then realized, showing The Dark Knight.

My first instinct was: Isn’t this ridiculous? Someone crazy tragically shoots up one movie house and now they’re going to guard all movie houses showing that movie. This isn’t like political attacks on synagogues on Yom Kippur, which after September 11 led to police guarding synagogues.

A little later I saw the same situation at the Loews on 83rd Street.

But I’ve changed my mind. What the police were doing was practicing tail risk elimination.

At Goldman 12 years ago, the risk committee didn’t rely exclusively on VaR and poor probability analysis to estimate their risk. Though they estimated their VaR, they also considered disaster scenarios that were dangerous, and then took positions that ensured that their losses wouldn’t be unbearable if those events (a repeat of the Russian default crisis, a repeat of the ’87 crash, etc) occurred, no matter what their probabilities.

And that’s what the police were doing. Irrespective of the small odds, they were trying to cover themselves for a repeat. And that’s the best their imagination could do.


On a related note, I myself thought, and several people commented to me too, that it was significant that the man in Aurora had been struggling, apparently failing graduate student. The life of PhD students can be awful, and if you’re already severely disturbed, doing badly in grad school can be the last straw. I mentioned some examples of this in My Life as a Quant.

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An excerpt from Prost, a work in progress http://blogs.reuters.com/emanuelderman/2012/07/13/an-excerpt-from-prost-a-work-in-progress/ http://blogs.reuters.com/emanuelderman/2012/07/13/an-excerpt-from-prost-a-work-in-progress/#comments Fri, 13 Jul 2012 16:08:58 +0000 http://blogs.reuters.com/emanuelderman/?p=952 All our fashions, in those days, were imported from America. In the summer of 1956, when I was eleven, the hot items were fluorescent nylon socks in lime green or neon pink that shone in the dark as we strolled up and down the beachfront at night. These beachfront strolls were a local version of what my Yiddish-speaking parents called shpatzieren, the pre-WWII Mittel-European slow promenading up and down the main street on a Saturday or Sunday summer afternoon, men in white suits walking arm-in-arm with their parasol-carrying wives, the men doffing their hats to the opposing women on someone else’s arm, the women smiling back in response. Shop on Main Street.

That’s how we kids strolled on the elevated Promenade in Muizenberg and on the strip of Beach Road in Sea Point in those Fifties days. Muizenberg, then but now no longer, was a South African Brighton or Blackpool, a copycat English-style summer resort for the masses. At lunchtime day-tripping crowds picnicked on the Muizenberg lawns; before and after they sat jammed together under beach umbrellas on the narrow stretch of beach between the raised cement sidewalk and the sea. The beach was divided in two by a line of brightly colored (red or yellow or blue or green) wooden beach bungalows that ran parallel to the water. Families rented a semidetached half of a bungalow for the season; you could lock and store beach equipment in them, and change in and out of your swimsuit in privacy, though friends I knew peeked through holes in the dividing wall of their parents’ bungalow to watch girls in the adjacent half changing out of their costumes, as we called swimsuits. Muizenberg had a Milk Bar where you could twirl on raised leather bar seats and order milk shakes, and next to it a copycat English-style penny arcade where you could play mechanical games for a penny or two. Inside the arcade was a little studio where you could pay to record your voice on a shellac-covered tin disk, as did Pinky in Brighton Beach. I still have one my father recorded with me, where you can hear him, heavily Yiddish-accented, prompting my four-year-old self at 78 rpm with the words I forgot in Mother Goose nursery rhymes. At the entrance to the long cement Promenade was a ten-foot-high hexagonal windowless cement kiosk that housed a camera obscura whose lens, situated at the top of the kiosk, on a sunny day projected, onto a horizontal table at the center of the kiosk, moving images of the people outside walking (shpatziering) up and down “The Prom.” It was magical.

Sea Point, in contrast to Blackpoolish Muizenberg, was Nice or Venice. The beachfront was dotted with cafés, Italian-owned pizzerias, apartment blocks with French- or Italian-Riviera names (Marseilles, San Remo). You could buy gelatos, frullatos, espressos. All of this exotic foreigness had sprung up during the postwar boom in which Italy became synonymous with sophisticated food, movies and clothes.

Shpatzieren: Your parents took you to Sea Point by car; you separated into your tribal groups; pre- or early-teen boys walked in groups with boys, girls with girls, checking each other out on hot summer nights during the holidays; parents strolled separately on the same strip; at the end of the evening you met up with them again for the ride home.

Muizenberg’s Snake Pit, obviously named for a reason I never thought about then, was the most crowded beach at Muizenberg, a triangle of white sand between the beach bungalows and the Promenade that was jam-packed with white boys and girls on beach towels. Coloured men roamed the apartheid-era beach selling paper cups of lychees. At dusk other Coloured men and women strained the sand for dropped coins.

In the Snake Pit, that summer, the really cool kids wore thin gold or silver chains with Stars of David around their necks. There was something sexy and shameless, and nothing at all religious about wearing these symbols, a silly rebuttal to the crosses worn by gentiles. I wanted one too, though I knew by nature that jewelry on men was prost, the Yiddish-Polish word for vulgar, common. It wasn’t good to be prost. Nevertheless, I longed for a chain too.

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The Powerful League of Missing Persons http://blogs.reuters.com/emanuelderman/2012/07/03/the-powerful-league-of-missing-persons/ http://blogs.reuters.com/emanuelderman/2012/07/03/the-powerful-league-of-missing-persons/#comments Tue, 03 Jul 2012 02:28:45 +0000 http://blogs.reuters.com/emanuelderman/?p=937 Sometimes, quite often, Absence is so powerful that it’s a Presence of its own.

I wrote a little about this in Models.Behaving.Badly. The positron was regarded as the absence of an electron in early quantum field theory, but turned out to be as real as anything. Pain, an apparently negative thing, is also real, perhaps more so than Joy, as described in Yehuda Amichai’s poem on The Precision of Pain. I once read a sequel to Robert Pirsig’s Zen and the Art of Motorcycle Maintenance, in which he claimed that, even after someone dear to him died, he was persuaded that they were still there by their presence in his thoughts and life.

I think of this again because there are some people I see very little, some even not at all, and yet … they are almost constantly with me, in my thoughts and affecting my actions. I don’t even mean “with me” in a subconscious way, but as a real force and presence, despite being almost out of contact.

It’s strange, and makes you realize the power of mind, spirit, thought, whatever you want to call it.



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GULP! http://blogs.reuters.com/emanuelderman/2012/06/04/gulp/ http://blogs.reuters.com/emanuelderman/2012/06/04/gulp/#comments Mon, 04 Jun 2012 11:05:23 +0000 http://blogs.reuters.com/emanuelderman/?p=923 I am impaled on the horns of a dilemma.

I dislike:

  • Mayor Bloomberg telling me I can’t smoke a cigar in Central Park
  • Nudge stuff.
  • Nanny states.

I think everyone should be treated as equally (as though he or she were) grown-up.

And yet …

I find myself liking the fact that they are going to outlaw 640z sodas in NYC.

I hate seeing people drink those things. I wish I knew how to find a principled yet nuanced way of both defending my right to stupidly smoke and simultaneously preventing people from drinking 64oz sodas, trashcan-size movie popcorns, Carnegie Deli sandwiches, lousy-restaurant-size bowls of pasta, 30 oz. steaks and all the other gross disgusting unnecessarily large things that often pass for food here. This isn’t pure snobbery; some of these things, especially the steaks and pasta, sell in classy restaurants too.

I struggle to find a fine enough sieve to separate these things, but if there is one, I think it has to do with limiting the rights of corporations. I’d like to defend individuals’ rights to harm themselves, but not defend corporations’ rights to profit by persuading people to do harmful stuff.

The big difference between people and corporations is that people don’t have a purpose (or if they do we don’t know what it is), and corporations do. Therefore corporations should have greater constraints imposed on them than on people.

It’s not a perfect world. Corporations selling harmful stuff is the thesis. Bloomberg is the antithesis, not the synthesis. Maybe that’s OK.

Inconsistent? Very likely.

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