corollary

Wednesday, 12 March 2003

Buying ease-of-life and moving

Listening to:

Bach, Christmas Oratorio.

Now reading:

Granta 80: groups.

I’ve just gone a complete week without writing the ’log because much of my spare time during the week was taken by home-moving activities. The process has just about finished though. With luck, there won’t be many more times when I have to dash back from work to home to make sure that there’s someone there to take delivery of some vital household effect. In fact, the plan calls for just one more such occasion: when a sofa, chairs and bed-frame are due to arrive.

In situations like this, I often wonder just how being fabulously wealthy would make my life easier. The answer in this case is that you’d hire underlings. They’d be on hand when things were delivered. They’d unpack the boxes (ours arrived from Sydney on Monday, after having spent almost two months in Sydney with Customs and Quarantine).

(Though their office-dwellers seemed disorganised, and unable to return calls, I think I should offer Allied Pickfords a bit of a plug. Their packers and unpackers, in the UK and Australia respectively, were very competent. We didn’t have one breakage. The PC wasn’t entirely happy when we first switched it on, but I opened it up, pushed the graphics card back into its slot properly, and all was well.)

To return to buying ease-of-life: it seems that expensive technology can only get you so far. True laziness has to be bought by having people do things in your stead. So there you go, people are the ultimate in sophisticated technology. The AI program will have really done its bit for the world when robotic butlers are a reality.

Thursday, 20 March 2003

Granta 80, moving faff & trading celebrities

Listening to:

Dvorak, Eight humoresques, op. 101.

Just read:

Granta 80: groups (contents).

This issue of the literary magazine wasn’t particularly memorable. I think the best pieces were Luke Harding’s description of what happened at Mazar-i Sharif (when a large number of Taliban prisoners took over the fort they were bgin held in, and were then almost all killed in retaliation), Lindsey Hilsum on two farm experiences in Zimbabwe, Paul Theroux’s predictable but engaging story about boys taking revenge on a pedophile priest, and Marcos Villatoro on going to a Catholic seminary in Iowa in the early ’80s.

Now reading:

A. N. Wilson, The Victorians.

I have been a very busy person over the last week or so. The confident chap who predicted that the house-moving activity was just about over last week, is now the the war-weary veteran of a week later. A couch, bed-frame and some chairs will arrive on Saturday, and we have also handed in our inventory report to the real estate agents. So yes, things are moving forward.

I’m also pleased to report that I have now been allocated a Medicare number. This process took a lot longer than signing up with the NHS in the UK, I tell you. I needed to demonstrate that I really well and truly am now permanently resident in Australia. Documents supporting this wild assertion included proof that I’d left a job in the UK, shipping documentation from Pickfords, a letter of appointment for my new job here, lease agreement documents for where we’re living, and my passport. They’d have also liked to have seen the one-way plane ticket from the UK. Boy! Anyway, it’s finally done.

Last but not least, a link or two. This story led me to the BBC’s CelebDAQ, a stock exchange for trading stocks in celebrities based on their media exposure. The Guardian story above explains it well, and quite amusingly.

Tuesday, 25 March 2003

More online exchanges

Listening to:

Shostakovich, symphony no. 11 in G minor, op. 103, “The Year 1905”.

Still reading:

A. N. Wilson, The Victorians.

Having featured one online exchange last week, I’m on a roll this week by featuring another. This is called TradeSports, and features real money. It’s a glorified gambling site, but you gamble against others, not the owners of the site, who instead make their money by taking cuts in every transaction. The site sets up “contracts” that are tied to some event, say that Team X will beat Team Y in some sporting fixture. If I think this will happen with slightly greater than 10% probability, then I make a bid of $10. If someone else is willing to sell at my price or lower, then I get my contract. If X do win their game, then I get $100 back (net gain $90; the contract has finished with a value of $100). If they lose, then I lose my $10 (the contract’s final value was $0). The point is that the money I win or lose only passes through TradeSport’s hands; this is ultimately a transaction between me and the person that sold me the contract.

The key thing (and this took me a while to figure out) is that contracts are only created to be sold to people wanting to buy through short-selling. For me to be able to buy at $10, someone else will have to have borrowed a contract to sell to me. If the final value is $0, then it costs them nothing to return that contract to the Great Lender in the Sky (and they have won $10, which came from me). If the final value is $100, then they have to pay that much to buy a contract to return to the Great Lender. They’ve made $10 from a sale already, so now they have to stump up another $90. This $90 is my winnings.

The icing on the cake is that the contracts are fully tradable, so that you can try to close a position that is looking unhealthy as the game develops. As well as many opportunities to bet on the favourite American sports, TradeSports provides a few non-sports gambles, including wagers on whether or not Saddam Hussein will still be in power at the end of March, April, May and June. You can track people’s perceptions of the war’s progress just by looking at the price of the March contract. As I write the price is at about 30. Yesterday it was briefly up around 75. No doubt the true gambler makes money off these swings in mood just as much as off the eventual outcome.

These market induced predictions are also supposed to be quite accurate as a rule, which was how Salon came to mention it.

Monday, 31 March 2003

The Victorians & Options

Listening to:

Bruckner, symphony no. 4 in E flat major “Romantic”.

Just read:

A. N. Wilson, The Victorians.

This is an irritating, and generally incoherent book, partly redeemed by its coverage of what was an interesting period, full of interesting people, and by Wilson’s fine eye for interesting, illustrative and often witty quotes. It’s incoherent because Wilson provides no real structure to his book. His chapters are arranged in a chronological order, but there is nothing else to link one chapter to another. Worse still, the individual chapters are also incoherent in themselves. When beginning a chapter, one gets little sense of where one will be at the end of the same chapter. Wilson seems to think that his chapters should be like essays. Even a collection of self-contained articles would be better than this because the reader would get some impression of an argument or thesis being advanced by the text.

If these many essays (there are 43 chapters) were consistently informative and engaging, I’d probably forgive Wilson his incoherence. The essay is possible of great things in well-qualified hands. And I think Wilson generally does well with his chosen form: his leaps and links from one subject area to another are not too awful in most cases. No, this book’s most significant flaw is that Wilson consistently says things designed to irritate me.

My fundamental problem with this book is that Wilson is profoundly anti-modern. He is a conservative who believes that life in the country before 1820 was probably better for everyone. He waxes lyrical about rural paradises and spends a lot of time decrying life in cities. He doesn’t ever really address the fact that cities grew in this period because of large scale migration from the rural paradises; the inhabitants clearly thought life in the cities was better. He rants long and often about how awful city life was, but gives little time to the fact that the self-same Victorians were busily improving city conditions the whole time.

Wilson is typically English in his attitude to agriculture: he seems to think that war-enforced self sufficiency followed by typically European levels of protectionism (and overproduction) have been a good thing. But Wilson can’t really decide what he thinks, because even as he reckons that protectionism and general government interference in the economy would be good in this case, he is scathing about government initiatives and reforms in areas such as primary schools. Initiatives of this sort are scathingly dismissed as Benthamite. He is admiring of Lord Ashley, Earl of Shaftesbury (in fact, the aristocracy tends to receive a great deal of admiration), who helped bring in legislation to reform working practices in factories and mines, but he dismisses other reforms as Government interference in people’s liberty. It boils down to whether or not something can be seen as a cocking a snook to the evil capitalists and laissez-faire types. If they’re put out by a reform, it’s good. Otherwise it’s Benthamite.

Another irritating feature of Wilson’s book is his tendency to fawn over his heroes. These include Disraeli, Thomas Carlyle, John Ruskin, Cardinal Manning and Prince Albert. To read Wilson is to be exposed to the view that if Prince Albert had only lived a little longer, the First World War might have been averted. People who opposed his heroes tend to get short shrift, which means that Gladstone is regarded pretty negatively throughout. For example, Wilson wants to blame Parnell’s downfall on the English Liberals (led by Gladstone), but has to admit that it was the Irish Home Rule party that really brought him low. Further, after Parnell’s affair with Katherine O’Shea was publicised, it was the supposedly non-puritanical Irish who repeatedly failed to elect his faction in various bye-elections.

Finally, I was extremely irritated by Wilson on Darwin. On the strength of one book by Michael Behe, he claims that natural selection has no answer to the objection that intermediate forms (for structures like eyes and wings) are not plausible. This is nonsense, and it’s obvious he didn’t do any research into the issue. It seems clear that he looked for something out there to confirm his prejudices and cited it as support. (Behe’s book, Darwin’s black box is effectively demolished in this review.) Another science nitpick: Wilson also claims that

By then [the 20th century], Wittgenstein really had refuted Russell’s ideas about the foundations of mathematics...

This is nonsense, and one can only imagine that Wilson says it because he wants it to be true.

So, what, if anything, redeems this book? Being a series of essays, it’s pretty undemanding, and also generally entertaining. Wilson covers the literature, art, politics and journalism of the period pretty well, so that chapters of his that stick to these fields are interesting and readable. He also gives major events (Crimean War, Indian Mutiny, Boer War, Parnell’s career) well-written narratives. As I said initially, he also has a impressive selection of quotes littered through his text.

Michael Thomsett, Getting started with options.

I bought this book at the recent Lifeline Bookfair. It’s all about options, explaining the terminology and concepts, as well as why and how one might go about trading them. It’s written for an American audience, but I imagine the concepts are applicable in other markets too. I found Thomsett’s book very interesting, and generally well written. Apart from terminology, I learnt two important things:

  1. You don’t need to exercise an option in order to make a profit with one. You can just sell them on after their value has appreciated. Equally, you can sell on an option in an attempt to cut losses. This is obvious in retrospect, but wasn’t something I appreciated.

  2. It is possible for individuals to sell options as well to buy them (I’d previously imagined that only institutions would sell options), and that there are circumstances in which this is sensible. In particular, Thomsett explains covered call writing very well.

There's a lot else too, but these felt like they opened my eyes the widest. I don’t have spare speculation dollars to hand for investment in option markets, but if I did, I would view the prospect of doing so with some pleasure.

To read next:

Anthony Bourdain, A cook’s tour.