Travel bric-a-brac

   Small ornamental objects valued for their antiquity, rarity, originality, or sentimental associations.

 Part of the fun of traveling is finding souvenirs to remind you of the various places that you’ve visited.  Sometimes I really do return with something of unique value, a little gem of artwork or a thoughtful gift from a friend.

But many times, the local choices are, well, junk.  Witness the cascade of potential memorabilia found outside the excavations at Pompeii (left).  Usually, there is no temptation to browse closely packed, brightly colored selections, but there are occasional times that I admit I am drawn in.

Bric-a-brac from mid-eastern bazaars are a case in point.  In this case, I am able to associate mediocre merchandise with a great story of haggling in the souk, leaving the vendor in tears, bringing home a deal nobody would believe (actually, they shouldn’t, of course).  My Jerusalem Ball falls into this category: a faux-silver and gold votive candle in a holder cast to look like the Old City.

Other times, it’s just a passing fancy that catches my eye and is too good to pass up.  My ‘Sparkly Vesuvius’ falls into that grouping: a miniature volcano painted with glitter from the foot of the namesake mountain.

Still others, it’s just nostalgia: my reclining man (in imitation grass) from the Sonsbeek festival and my Whelpie from last year’s football championships remain special.

I suspect we all have them: what are your fatal weaknesses that result in a whimsical shelf of travel bric-a-brac?

Network, neighborhood, community

A brief pre-note: I’ve finally finished getting pictures selected, edited, and posted from the conferences and travels in Italy the past few weeks. I won’t publish too many here, but the albums are available on my Flickr site.

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I wanted to take a bit of time today to reflect some thoughts about the importance of communities of friends and colleagues.  I had a chance to get together with a group of 40 researchers in Bertinoro, Italy, for a conference on ECG analysis in ischemic patients.

Don’t all yawn at once.

These conferences are a mix of people who I’ve known before and new people making their entry into the group.  It was fun and relaxing to catch up with old acquaintances, to meet new ones, and to spend time swapping stories and ideas.  Like the historic trading fair or potlach, they are an occasion for isolated people to come together.

And it reminded me of the importance of community in my expatriate life.

Community is different than having a network.  Business texts often stress importance of forming individual and corporate networks, but these are often just associations of people who share business cards and who take one another’s calls.  Accumulating a large Rolodex or LinkedIn contact list never seemed to me to amount to much value: I liken it to the uselessness of books that purport to teach you basics of a new technology by force feeding you the vocabulary rather than the meatier scientific concepts.

I’ve never been good at neighborhoods either: associations of people who share a common location.  I never had a lot of close friends nearby at home: I worked too long and travelled too much to get to know my neighbors well.  While I was sociable across the fence and willing to help out if asked, I’m afraid that I usually tried to be a good neighbor simply by being quiet and keeping my yard tidy.

But I am good at creating and participating in communities: associations of people linked by common interests.

Over the years, I have worked with lots of colleagues on research projects and technology development, or on outreach projects that make science accessible to younger students or new investigators.  Through these activities, I’ve formed groups of friends who I correspond with periodically and who I meet once or twice a year at conferences and site visits.  We’ve known one another a long time and have continuity of interest and a personal understanding that lets up pick up from wherever we left off whenever we meet.

Driving through Italy, I found myself reflecting on how the expatriate life, if anything, has strengthened my reliance on these communities.

As an expatriate, I move too often to form neighborhood links and I don’t have young children or church membership to foster meeting people.  I could join a local interest group or expat association, but I feel like it has no depth or permanence if I’m off again in a couple of years.  Even now, I find that people I’ve known for decades through workplaces and kids school groups are drifting quieter and quieter as my physical presence fades from memory after 3 years away.

Similarly, I don’t think that simple networks supported by the Internet and Web 2.0 tools are very satisfying.  They are convenient and make it easy to overcome simple distance.  But the linkage doesn’t promote depth, and superficial exchange of personal information and contact details fails to foster any sense of emotional connection or social empathy.

The constant in my social interactions is my community of peers and colleagues, people who I’ve known for years, who I can talk openly with, and who have always offered insightful perspectives and good advice based on shared experiences together.

In a way, it is probably similar with the long-distance cruising fraternity. Blue water sailors talk of their plans to meet friends at favored anchorages, and to form temporary flotillas, a few times each year.  Otherwise, they are off as individuals , keeping in touch, but on their own journeys.

So, as I pull up from living two years in Arnhem and think about settling in a new community in Maastricht, I’m also thinking about the relationships that are important to keep.

I suspect that colleagues from work and contact with neighbors will swiftly diminish.  My community of peers, such as the ones I spent time with in Bertinoro, will stay.  It’s important that I find ways to keep engaged with those friends as I think about whether to change fields or companies.

The water folk and the mountain people

I know that I’m on delicate ground today, but I’d like to spend a few paragraphs contrasting the Dutch and the Swiss. I’ve lived in both countries, in Switzerland when I was 17 and in the Netherlands today, and I have high regard for both cultures. They have always seemed to me to have lots in common, and so I’ve been surprised to have each warn me away from residing with the other.

In my observation, both are small, proud countries whose character formed in symbiosis with their environment. Each has their own language and culture, distinct in Europe, and each has a long democratic-consensual political and community-centered social tradition that carries lessons for other nations. The people seem fit and happy, self assured and internationally aware. The "P-" words flow together: principled, practical, pragmatic, polite. In both cases, people are welcoming to visitors, but reserved in forming friendships and a bit rigid with regard to social tradition.

Apart from the obvious difference in geography (and respective affinities for bicycles vs. walking sticks), I think that the main difference is an innate conservatism among the Swiss in marked contrast to the more progressive Dutch tolerance. I got into a conversation about this with a few Dutch friends last night over dinner. They accede to the overall points of similarity, and offered a unique (perhaps tongue in cheek) explanation of the differences.

It seems that, as a seafaring and commercial culture, the Dutch became more aware, and thus more accepting, of ideas from other cultures than the insular folks locked away in their mountain valleys. As such, they came to value taking the best of the ideas that commerce brought to them, while the Swiss put greater value on longstanding local ties and traditions that their isolation fostered.

Perhaps. But it may also be that the dizzying heights of the Alps are just not suited to Dutch tastes any more than the boggy flats of the deltas would appeal to the Swiss. Somewhat the same division exists in the US, dividing those with a taste for the humid and traditional South from those with a yen for the changable and hurried North.

Shoveling out the backlog (and the financial industry)

‘back in town, but a bit scarce while I collate tasks that have accumulated in my absence and try to address the most pressing ones. It was a great trip, but there’s always the return to earth when it’s over.

The weather is deteriorating as fall moves in. Not a good thing: I’ve got to start plans to move to Maastricht and rain, wind, and cold just make that more difficult. The fountains are still bravely running in Sonsbeek Park, so the Dutch haven’t given up on summer.

The news, or course, is dominated by the financial crisis and the failure of the bailout package in the US congress. (The good news, if there is any, is that we’re not talking about Sarah Palin.)

It’s just a mess, isn’t it?

I wrote about this last week, wishing that the government acted more aggressively to dampen speculative booms, to limit government guarantees that promote moral hazard, and to hold irresponsible traders and speculators accountable. Now my bank in the US, WaMu (Yoo Hoo!) has failed, and my bank in the Netherlands, Fortis is teetering. Congress is proposing to shovel money and guarantees into financial institutions, nationalizing the financial markets to an unprecedented degree.

I’ve written my legislators, urging a ‘no’ vote until a rational package can be negotiated, and was happy to see that, in fact, the package did not pass. I cannot understand why the Democrats have wound up on the wrong side of this, voting to bail out the failed Bush policies while the Republicans oppose it. Strange times.

And the underlying causes become ever more clear: There has been a huge game of ‘Pass the Trash’ going on for years, and the chickens have come home to roost.

There has been a chase for yields. People and institutions have been looking for higher returns than they could get in government bonds or bank CDs.

Demand drives supply. Lenders created new interest-bearing obligations by encouraging people and businesses to take on debt. Sometimes the obligations were secured by assets (eg: cars, homes), sometimes not (eg: credit cards, student loans), but at root, it was all about stimulating loans. As volume grew, quality naturally suffered: six years ago the proportion of debt rated 'subprime' was 2%, two years ago it was 33%, a 15-fold increase. It seemed that anything could become a marketable security.

The risks were obscured. These lower-quality obligations carried higher risk, along with higher interest rates. However, like the 'junk bond' funds of the 80's, overall risk could be diminished by grouping low quality bonds into pools, where even if a few borrowers defaulted, the higher interest paid by the rest would still assure a better overall return. Similarly, by dividing principal from interest, near-term from long-term payments, and other criteria, the collections of loans could be sorted and grouped to create pools with almost any variation of risk and return. These newly mixed packages of portions of the original debt became collateralized mortgage obligations (CMO) or debt obligations (CDO). The problem was that nobody trading the securities really understood the equations or the processes behind these new debt packages.

The risks were minimized. Perhaps it was intentional, by brokers, banks, and ratings services, as a way to help move their product. Or maybe it was unintentional: the statistical models weren’t good enough to correlate the overall risk of a “mixture of pieces” back to the actual risks of default in the original loans. In either case, without an accurate assessment of risk, the likelihood of repayment couldn't be known, the risks were foggy, and so the true value of the pools became uncertain.

The returns seemed guaranteed. In the case of mortgages, the true risk was further clouded by implicit government guarantees. In other cases, institutions could purchase insurance (Credit Default Swaps - CDS) from AIG and others to protect against unexpected default. Increasingly, higher returns seemed to come without any perceived risk, completely disconnected from the actual risk and value of the underlying components.

The value became "What the market will pay". The government's commitment to free-market economics meant that there was not agency oversight or regulatory limits on the process, giving free rein to the players and the transactions. As long as there was a greater fool, the value went up with every trade and the traders and speculators skimmed cash from every transaction. Win / win: the holdings were spread, the markets were liquid, the institutions were flush.

Then came the markdown. Last summer, Merrill Lynch needed to raise cash, and was abruptly forced to sell their portfolio of these assets. Although the prices reflected 'fire-sale' circumstances, where they got only 23 cents on the dollar, it was a wakeup call to the financial industry of the true value of these obligations. Even today, the likely value may be as low as 30 or 40 cents on the dollar, even though institutions value them at 50 or 60 cents on their books.

And now, the game has ended. Everyone's being asked to show their hand and call their bluffs, and the fools and losers have become visible to everyone. Lots of them, and some are big ones that should have known better. So now the value of holdings are being marked to a diminished market value, institutions are hoarding their cash against further deflation in value, and most are refusing to trade solid assets or accept questionable ones.

Greed is good? And all of us who ended up chasing yields are coming full circle, to find our loans, pensions, mortgages, and savings tied up in the same mess of contradictions that the banks are suffering.

And so the financial system locked up, and the crisis is upon us. (or so they claim: it still seems like a crisis of perception more than one of fact)

So what is the right answer now? It’s not to cry wolf, again, and act in haste without understanding. (Jon Stewart had a good side-by-side, line-by-line, montage with President Bush pitching the Iraq plan and pitching the bailout plan. Those who don’t learn are truly condemned to repeat the past.) I’m looking around to see if there is a good summary of the candidates recommendations, but cant’ find them yet.

So, in the absence, I still fall back on my three maxims:

This is not the time to protect institutions (political or financial) from the consequences of their bad behavior: they must be held accountable for their irresponsible (and possibly criminal) actions and decisions.

This is not a time to end our embrace of free markets. But regulations should be put into place to end the ‘pass the trash’ games that has brought us bubble after bubble.

The moral hazard created by government guarantees need to end: the financial industry will always find ways to game the system, and insurance offered will, in the end, be taken. And skimmed.

Okay, well, enough for now. I have a lot of notes and pictures from my travels that I want to talk about, news of life’s next steps to share, and about a dozen blogs with posts to catch up on. ‘back into the neighborhood; collar up and head down against the elements.