Extreme diligence in pursuit of the seemingly trivial

One of my favorite things about being in LA (I’m back in New York now) is the opportunity to sit down at breakfast with the Los Angeles Times. I know, I can read it online, but the Times site isn’t very good—certainly not in the same league as nytimes.com or washingtonpost.com or even sfgate.com. But the paper is still great. Flawed, yes, but with a daily complement of interesting articles that would put most other newspapers on earth to shame. Plus Steve Lopez!

The best of the lot yesterday was a page-one piece about “Foley artists,” the low-tech craftspeople who provide sound effects to the movie business. The rise of digital animation has only increased the demand for their work; movies made without any ambient noise are apparently in desperate need of people who know how generate fake but convincing sound effects using hoses and washboards. This may not last forever—one has to assume that, eventually, they’ll be able to fake sounds digitally as well. But for now, new technology has created a bunch of new low-tech jobs.

The article, by Richard Verrier, is characterized by what to me is the distinguishing and most endearing LA Times trait: Extreme diligence in pursuit of the seemingly trivial. Yes, the paper breaks big stories in D.C. and elsewhere. But that’s not what I read it for. My favorite LA Times story of the past year or so was a depiction by Erika Hayasaki of life at Montebello High School. When I say seemingly trivial, the emphasis is on the seemingly: Hayasaki’s story depicted how a high school with an overwhelmingly Latino student body was sharply divided between the second-generation immigrants who play football and join the drill team and the newcomers who maybe play soccer but otherwise stay out of school activities. A better depiction of the complications of modern-day immigration cannot be found.

And that, actually, is the problem: It literally cannot be found. Repeated searches of the LA Times site and archives failed to turn up the article. I finally came across it via Google, on the blog of a Montebello High grad who asserts (less than credibly) that Hayasaki made it all up.

In outer space at LAX

acb07-exteriorHere are some exceptionally low-resolution photos (note to self: get new camera phone) of Encounter, that groovy looking spaceship restaurant in the middle of LAX.

As I imagine is the case for most people who pass through the airport, I’ve been wanting to try it for years, and finally did last night at the urging of my ever-brilliant college classmate Bennet Ratcliff (I’d link but the man’s new Website isn’t ready yet).

271f4-signSo what’s the verdict? Definitely go there for drinks. Mixed drinks. It’s just so cool sitting up there at the bar with a martini, feeling like you’re floating in the sky.

But unless you’re stranded at the airport and need sustenance, you might want to leave it at that: The wine Bennet and I had with dinner (a Terrazas Malbec) was unimpressive and the food was, while certainly good for an airport, not great.

f4a6a-interiorThen, again, I was a tough critic last night, having stuffed myself only hours before with a spectacular lunch (veal kidneys!) at Angelini Osteria near the tar pits in LA. And again, I can’t think of ever having eaten better at an airport.

But that’s not saying much of anything. I wonder where one can find great airport food? This is the kind of thing Tyler Brule would know …

When dinner was served at the Oscars

I’m in Los Angeles right now, staying at the Biltmore, the massive old grand hotel downtown. In a little hallway on the ground floor, the walls are covered with photos of early Academy Awards ceremonies held here at the hotel.

The most striking photo is a huge image of the 1937 Oscars (reproduced below; to see it bigger, just click on it). The first thing one notices is a somewhat scared-looking young Henry Fonda staring out from the bottom of the picture. He’s the only immediately recognizable figure, although some more looking turns up Walt Disney and big-mouthed Martha Raye. A distinguished looking man in the foreground stands out as obviously important — turns out he’s Cecil B. De Mille.

dinnerWhat really gets me, though, is that everybody’s sitting at tables together waiting for dinner to be served. In the middle of the room is a little table with a few Oscar statuettes on it. Giving them out clearly won’t take up the whole evening. Instead, it’s your basic industry get-together, where people chat with their tablemates, visit friends at other tables, catch up on gossip, etc. It looks like it might actually have been fun. Then the industry had to go and get too big and too glamorous — not to mention too afraid of eating —for things to work that way anymore.

I don’t think I’m paying enough for cable TV

Almost every ad on washingtonpost.com this morning is a broadside from either the telcos or the cable companies about video franchise legislation, which is up for consideration on Capitol Hill today. The telcos want to be able to offer TV over their lines without having to get permission from every last city and county in the country. The cable companies, which have spent the past few decades negotiating franchise deals with every last city and county in the country, want the phone guys to suffer like they did.

Or something like that. I make no claim to expertise on this debate, and from my reading of the press coverage, no other journalist can, either. It’s one of those classic big-money Washington battles that only people in the industries involved fully understand.

It’s funny, I wrote a piece in Fortune a few weeks ago that made a big deal out of the debate over network neutrality, which pits the telcos and cable companies on one side against Internet companies like Google on the other. Philosophically, it’s a much more important issue than who issues video franchises. But the battle lines aren’t as clear, and there’s no one-day-to-the-next connection between passing a new law and one side or the other suddenly making a lot more money—as would be the case if the telcos succeed in getting video franchising decisions switched from the local to the state level. Which means that in K Street terms, network neutrality is a yawner compared with this video franchise stuff.

The telcos’ ads on washingtonpost.com ask, “Are You Paying Too Much for Cable TV?” Whether you click yes or no, you are directed to the same site, which every time I checked it this morning was inaccessible. Not the best advertisement for getting your TV or Internet from a phone company.

Citi and its conflicted peers

Citigroup is being charged with insider trading in Australia for feverishly buying shares in Patrick Corp. (which loads and unloads ships) the day before Toll Holdings (which moves stuff around on trucks, trains, and ships) announced an unfriendly takeover bid for Patrick. Citi’s investment bankers were advising Toll in its raid, so Australian regulators allege that its proprietary traders must have partaken of inside information.

I’m more or less willing to believe Citi’s defense, as elucidated in the Financial Times, which is that rumors about the bid were already flying around Sydney, so it would have been even more suspicious if Citi had stopped trading Patrick shares. A “Chinese wall” separates Citi’s traders and investment bankers, so the traders must have heard the rumors elsewhere.

But the Australian regulators, who apparently want to make it illegal for investment banks to trade in the shares of companies that they’re advising, have highlighted something highly iffy about how these firms now make their money. As Citi put it in a statement quoted in the AP story about the case (but different from the one I found on the bank’s Australia website), the charges are “an attempt to regulate the proprietary trading desks which are a feature of all major investment banks.”

Proprietary trading is actually not just a feature but the most profitable one for most investment banks these days. And there’s really no way to explain this sustained profitability other than that traders at the big investment banks have access to information that those on the other side of the trades don’t. If the banks’ compliance people are any good, none of this is technically insider trading: Traders at Goldman or Merrill aren’t getting directly tipped off by the M&A dealmakers at their firms. But the traders are taking every other possible advantage of their position at the center of lots of different deals for lots of different customers.

I’ve explored this in a couple of different Fortune articles, but I don’t think I’m anywhere close to really understanding what really goes on. It strikes me as a clear conflict of interest to make a big trade for a client while at the same time squeezing bits of extra profit out of proprietary trading because the traders know something that the client doesn’t. But it’s a conflict of interest that is (a) not illegal and (b) helps ensure that there are highly paid people and well-funded institutions around to keep securities trading smoothly. Somehow I think Goldman, Morgan Stanley, Merrill, Citigroup, et. al. are getting the sweeter end of this deal (and driving up the price of Manhattan real estate in the process). But I’m not at all convinced that there’s a better way.

Late bloomer

We had Erika Sunnegårdh‘s big, belated Met debut on the radio yesterday. I don’t know Fidelio well enough to tell whether she did a good job—plus, I was playing a lot of dinosaur bingo, which made it hard to focus on the opera—but she certainly didn’t embarrass herself. The Times review this morning said “she is especially comfortable in her upper range and has strong, clear top notes. Her midrange singing, though, sounded patchy yesterday.”

Sunnegårdh’s story, told on the front page of the Times yesterday, is that at age 40 she has suddenly become a big-time opera singer. Here’s how the article, by Daniel J. Wakin, begins:

Until 18 months ago, Erika Sunnegardh, a soprano, had never sung an opera role on stage.

For nearly 20 years she toiled as a waitress, caterer and tour guide in New York. Sure, there was singing: a few recitals and plenty of funerals as a church cantor in the Bronx. Often the choice boiled down to rent or voice lessons.

When you read further the tale turns out not to be quite as improbable as all that. Sunnegårdh didn’t come out of nowhere: Her dad was Birgit Nilsson‘s voice teacher and Jussi Bjoerling‘s accompanist. But then, like a lot of us, she spent the first 15-20 years of her adulthood not really getting anywhere.

I have this very vivid memory of, when I was working as a newspaper reporter in Alabama, reading a Times article about Jeff Zucker in which Bryant Gumbel made some stupid comment about really successful people always making their mark while still young. Thanks to the magic of the internets, I can now look it up. (You can too, but only if you have TimesSelect.) It ran on a December Monday in 1991, and it was about Zucker taking over, at age 26, as executive producer of the Today show. Here’s the money quote, which came after some gushing comments by Katie Couric:

Mr. Gumbel is equally supportive. “When people were surprised at how old he is I just reminded some of them how old they were when they got their first significant job,” he said. “Really good people tend to get good jobs when they’re young.”

So I was 27, living in $400-a-month (that’s a guess) apartment in Montgomery, Alabama, and covering state politics for The Birmingham News. Which certainly wasn’t a horrible predicament, but I’m sure it wasn’t what Bryant Gumbel would have called a “significant job.” I remember thinking, “%$&^ing Bryant Gumbel, what the &*^%# does he know!” (This is a family blog.) Now I don’t know that I’ve really proved him wrong in the intervening years, but at least Erika Sunnegårdh has. And besides, with 42 being the new 25, I’ve still got lots of time.

Swiss chard!

Well, I promised fine food in my blog description. So here’s how I prepared the Swiss chard we ate for lunch today:

2 or 3 slices of bacon,  chopped into small pieces. (I swear by Schaller & Weber‘s smoked—not double smoked—bacon, which if you live in NYC you can order from Fresh Direct.)
1 small onion, chopped
1 bunch Swiss chard, washed and loosely chopped

Cook the bacon in a skillet at medium-low heat for about 5 minutes. Add the onion, cook another 5 minutes or so. Turn up heat to medium, add chard, toss/stir for a couple minutes, until it’s slightly wilted. Turn the heat to low, cover the skillet, and let simmer for about half an hour.

I had done similar preparations of kale and collard greens before, and they’re okay. But I tried it with chard for the first time a month ago and it was a revelation: The slightly sweet chard and the salty bacon were perfect together. Not that I was the first person to think of this, of course.

Promoting (and finishing) a book

Welcome! It is has become pretty common now for authors to report on the progress of their book research online. Especially authors with some sort of techie/new media credentials: Think Chris Anderson or John Battelle. I don’t have those kind of credentials—I’m just a writer for a 76-year-old magazine—but I think it’s a reasonable enough idea, especially on nonfiction topics about which lots of people know things that the author is sure not to. (More importantly, Matt McAlister told me it was a good idea.)

That said, I’m pretty glad I didn’t launch this endeavor when I first started work on my book, The Myth of the Rational Investor, more than three years ago. My slowness would have been just too embarrassing.

But now I’ve written a 96,149 word draft, so far read in its entirety by just one very dedicated man, although my editor at HarperCollins promises to finish soon. I’m about to embark upon a frenzy of cutting and rewriting, and I’m still struggling in a lot of places to figure out just what my point is. My hope is that if I try out some arguments here, friends and random passersby might be able to help me whip them into shape.

What’s the book about? It’s the story of the rise and fall of the efficient market hypothesis, an idea that burbled up out of MIT and the University of Chicago in the 1960s and went on to transform money management, corporate governance, and law. The EMH (I don’t think I can help but use the acronym from time to time) wasn’t entirely wrong, but a lot of the conclusions derived from it were. And the investing and academic worlds seem to be settling into an uneasy consensus that what we’ve got is a pretty-efficient-but-manic-depressive market. If I had a Ph.D., I might write an equation-laced paper about the Pretty Efficient But Manic Depressive Market Hypothesis, present it at the American Finance Association annual meeting next January, and become known to one and all as the father of the PEBMDMH. But I don’t, so I have to make do with this book.