annals of the amateur afroasiatic explorers' association, inc.

Benefits of an MBA

2012-02-13T12:23:00.000-08:00

One skill I've really overdeveloped during graduate school is my ability to get finance problems wrong. I'm at least one standard deviation above average on that continuum.

Peanut bars from the heavens

2012-02-13T11:16:00.000-08:00

1. Now that I'm playing bass in TJ's band in addition to guitar with Funky Brewster, I had 5.5 hours of band practice yesterday. Today, my arm hurts.
2. These make it feel better. A Tuttle original, with cookie base taken from here.

Mount Olympus Butter Peanut Bars

Cookie Base:
1/2 cup sugar
3/4 cup butter, softened
1 large egg
1/2 tsp vanilla extract
2 cups all purpose flour
1/4 tsp salt

Preheat oven to 350F. Lightly grease a 9×13-inch baking pan.
Cream together sugar and butter, until fluffy. Beat in egg and vanilla extract. Working at a low speed, gradually beat in flour and salt until mixture is crumbly, like wet sand. The dough does not need to come together. Pour crumbly dough into pan and press into an even layer.
Bake for 20 minutes, until base is set and edges are lightly browned. Cool completely on a wire rack before topping.

Peanut Butter Frosting:
3/4 cup powdered sugar (or normal sugar, blended)
7 Tablespoons unsalted butter, softened
1 cup chunky peanut butter
0.5 teaspoon vanilla extract
0.5 teaspoon almond extract
1/3 cup milk
Cream together the butter, peanut butter and vanilla extract. Slowly add in the powdered sugar and mix until completely combined. Mix in the milk. Refrigerate (if you used melted butter) or frost bars directly.

Toying with Finns

2012-02-10T11:53:00.000-08:00

Helsinki was named a design hub by somebody or other. A coffee shop decided to celebrate, and you're invited.

Log on to Kauko and mess with the patrons. They enjoy free coffee but give up control over their coffee-drinking environment to you. You can hop on their website and control the stool height, table height, light levels, and music, then watch a live streaming video of the shocked patrons you're affecting.

#schadenfreudeFTW

Barriers to social entrepreneurship

2012-02-07T08:08:00.000-08:00

The biggest barrier I have from generating good for the world is my lack of desire to move back to the developing world in the medium-term. I don't want to dedicate the next two years of my life to building, for example, an ag export business in Mozambique. Maybe in two years I'll feel different, that's fine.

Had Mozambique a pleasant and livable capital city, I might reconsider. It need not be a Paris or a Shanghai, but perhaps a simplified and less expensive Dakar. That would be livable for a few years.

Fellow students spend a lot of time talking about doing good abroad. They've often stopped by student debt, by fear of the unknown, or by timing. I'm a member of the final category. Relieving the debt only works for MBAs at rich business schools. Fear of the unknown's broken by folks who are truly curious and spend time reaching out to those on the ground in their places of interest. Timing's a personal decision.

One of the critical factors in preventing Stanford MBAs from pursuing development careers abroad immediately after graduation is the periodically reiterated average salary rating published by the school and the various journals that rank business schools. It's hard to say "I'm willing to make 25% of what this survey says I'm worth to the world," knowing that just a few years of work at even 80% of average salary could make you a hard-shelled nest egg.

Psychology tells us that we're happy when our income is in the same band as or slightly higher than those who are comparable to us, that everything's relative. If all your friends made $10,000 a year and you made $11,000, you'd be happy. If you made that $11,000 and your friends made $40,000, you'd be miserable.

And so we continue to shoot ourselves in the foot.

Avocado underground

2012-02-06T08:08:00.000-08:00

The global avocado trade, eh? Doesn't really sound like the type of place where people get knocked off.

Nor is it, thankfully. I had the privilege of hearing an anonymized fourth-generation California avocado farmer now invested in production around the world talk about the global avocado trade, which happens at a clip of 450m pounds per year.

Per the slowly-establishing tradition, here are the raw notes.

***

Avocado 101

GROW

Farmland now the most expensive it's ever been. Midwest farm land five years ago was $6K/acre, now $20K/acre. Avocado lands in California were $20K, now $60K/acre. Avocados like to grow where people like to live.

Why reductions in avocado land? Land prices and water use. San Diego now has $1500/af water costs. Only rice uses more water input than avocados. Labor's a big deal, some friends in SD don't think they'll be able to pick their crops. Homeland Security is becoming more aggressive. Most people who are working on farms aren't from the US. Looks to San Diego and Yuma as ground zero -- lots of potential laborers aren't willing to live there, they're moving north. Mexico, Chile and Peru also sell avocados into the US. Bring in 32m pounds of avocados to get ready for the Super Bowl, will repeat next week and week after. Mexico is the heavyweight producer.

MOVE

Brokers are the middlemen who buy from farms, pack and sell/distribute. They're traders, some don't even ever touch the fruit. The brokerage houses can take 20%, the volume players are looking for 7%. It's really crowded, there's no leader, and costs are driven by spreading infrastructure costs across volume. 4 players take 75% of the volume. 10 years ago you'd buy a hard piece of fruit and wait 4-5 days to eat it. Now everything gets ripened at 4 distro centers. It changed the game -- allowed us to sell a whole lot more avocados. 80% of avocados in US are eaten west of the Rockies.

SELL

Walmart: "I don't like Walmart. We don't need them. As an industry we don't need them." Costco sells the most in the US, and their model of paying for quality has worked well. All avocados are based on size. Walmart grinds on price and is relationship-agnostic. Costco cares about relationships, pay a higher margin for quality, and sells 10x Walmart. Margin for grocery store is 350%. It's high-risk, high-reward. Consumer who buys an avocado buys a ton of their stuff. Avocados go bad quickly (high 'shrink').

McDonald's and food service is becoming a big part of the business, including upcoming processed guacamole. Trader Joe's buys the oldest stuff the broker has (your 20-day-old fruit, rather than your 5-day-old fruit), then they value-add cool packaging. It's a good model. Fear of USDA coming in is making most farmers get ahead of the game and self-regulate, paying living wage, following Good Agriculture Practices and so on. Costco and other buyers are listening to consumers and supporting/demanding these. Would probably want to make 10m pounds a year to justify your own packing house and distribution, which would be a minimum of 500 producing acres. Jamie's assessed by a state-regulated board and a federally-regulated board.

OTHER

His avocados have 1/10 the inputs and get 2x the outputs. Mexico eats 22 lbs/person/year, US eats 3. Global demand growth has been very strong. 1B pounds five years ago, 2B pounds forecasted for 2017. Grew up in Newport Beach, all his friends became finance guys. He looked at a space where there weren't a lot of young people, and the lack of competition meant he'd have a chance to change things. There's a huge brain drain coming down the pipeline. It's not the quickest buck. Last night he was freaked out and up all night by a potential frost. You're selling something that has to be picked and sold within 30 days. Logistics is the most overwhelming part of the business -- some people do that really well.

Raw notes from the agricultural field

2012-02-05T08:08:00.000-08:00

At lunch on February 2 I had the privilege of hearing from Mountain Hazelnut Ventures in Bhutan and Kigali Farms (mushrooms) in Rwanda. The first evolved as a way to prevent too-rapid urbanization and preserve the strong rural culture by bringing livelihoods to people who faced degraded farmland. The second arose out of a desire to generate more employment and a domestic mushroom market for a nation terribly in need of nutrition.

Both portions were excellent. I've attached my notes.

120202 Mountain Hazelnut Ventures in Bhutan and Kigali Farms

Goal: grow 10 million hazelnut trees on degraded slopes in eastern Bhutan. They grow seedlings and distribute them, then guarantee the buyback of the nuts in a way that should double or triple the income of 10-15% of the Bhutanese population. Need scale to make it work. Will export 100%. Got permission to be Bhutan's first 100% FDI company.

$6B hazelnut market, second-largest tree nut market after almonds. 70% supplied by Turkey, 15% supplied by Italy. Both countries use labor-intensive modes of production. We have much better tech and 5% of the labor costs of Italy. We use new varieties of trees and tech makes a real difference. 6.4M farmers in Turkey grow hazelnuts, usually with half an acre. We might get 3% of global market but it makes a huge difference to this country. We'll probably be the lowest cost and best quality because we're competing with legacy growers.

In 2008 the king stepped down and renounced the monarchy as the leading power in Bhutan. Held elections, which yielded new economic policies. National stewardship of the environment extremely important.

Biggest challenges:

Use of mobile phones for data collection and sharing has been key. Without this technology there wouldn't be a way to execute this with the same level of risk. We're going to have 10,000 orchards. Check for plant growth, harvest info, climate info, look at survival every day. Field monitors are high school class 10 graduates. Only plant on degraded or fallow land. Pledge to investors and government that we check every single tree every thirty days. Can follow the field monitors via GPS. They send daily reports. Have Android phones.

Dying to find real IT people, especially to construct the back end of the system.

In future interested in joining with mobile banking, mobile health to share information with the farmers.

Bhutanese government has been very interested and wants to help them learn more.

Broadly, this helps solve the rural--> urban migration problem by creating income opportunities in rural areas.

Daniel had spent three years in Himalayas, then banked and did PE. Spent 35 years in Asia.

Funded themselves for first 5.5 years

Had 3 GMIXers

Found he was able to fully localize a $200M sustainable forestry business after running it with 25 foreign expats.

Delighted by how easily young people take to this and take to management techniques

200 employees currently, 1000 farmers, planted 1,000,000 trees. Lots of the farmers are given literacy classes

If you're going to start a company like this, you have to do lots of training. e.g. training people to write an email. That's the key thing he's doing 99% of the time. But sometimes you get innovative ideas.

2 resident expats, Jusin and the chief scientist

Exciting part is that they're building a system that can be transplanted with different types of crops. Makes for really interesting networking with ag companies abroad, e.g. one that works with elephant reserves in Zambia

***

Laurent, Kigali Farms

Mushrooms - a forgotten high-impact crop

Was in investment before business school, then did startups and ran a New York brewery. Global warming started making him and his wife unhappy. Commutes between Barcelona and Kigali.

Oyster mushrooms are rich in amino acids and iron. You grow them in substrate. Mushrooms degrade preexisting organic matter, so you have to give them agricultural waste. Africa is short on nutrition, long on ag waste, and the mushroom industry is $20B worldwide. Culturally ingrained in Rwanda, exists there.

Development organizations show them how to do mushrooms 60 years ago. Low capital requirements, but low productivity. Mushrooms become more expensive than meat, which makes no sense..

Vision: on the markets today wherever you see tomatoes and onions, he wants to see mushrooms in 5 years. Lower price by 50% or more. $2.5m in sales. Catalyze a mushroom industry in the country.

Focus on the substrate. Biggest portion of the cost of the mushroom. Hope is to cut by 1/2 to 2/3.

Not clear how much mushroom they can distribute in the local/regional market. If he was really worried about it he'd stop putting money into it. So far been funding entirely with his own capital.

Wants to look at: regional export, processing (turn into powder), different substrate (could grow on acidic coffee pulp, but at a large scale?)

Straw collection, 20 tons of it as leftover from their wheat production. 90% of the money he spent went to local women. Extremely satisfying feeling: there's real cash to be made by people who are short of it now.

The country is full of people who are really smart who've never been paid a salary. There's a lot of people who are equally smart as people who are sitting in this room.

Straw removal: may/may not degrade the land. Substrate will grow mushrooms for 8 weeks, then it's permeated with mycelium, which turns out to be excellent animal feed for pigs or compost. Plastic bag goes straight back to manufacturer. We deliver a new substrate to them every 8 weeks and collect and recycle the used plastic.

Internal logistics: main roads pretty good. Testing out the depth of the domestic market. Markets exist as a function of the price point.

The mutability of music

2012-02-04T08:08:00.000-08:00

In high school I bought Vivaldi's Four Seasons on CD. At various points it's been my standard for late nights of work, for waking up to my escalating Bose alarm, and for decompressing before interviews. For the latter, stretching from Flinn interview to Truman interview to GSB interview, I always cue Winter (L'inverno: Allegro non molto) at high volume.

I've recently given Spotify a shot. For the most part, I enjoy it. But the version of Four Seasons I'm streaming is horrendous. All of the notes are short and crisp, even in Winter, with little of the deep bass overture that carried the gray-sky emotion in the version that I love. How could this be?

In transcribing speeches, we maintain diction and lose delivery. In transcribing music, we maintain pitch and lose passion. That, it turns out, is why conductors are critical. They read a piece and interpret the relative volumes, the intensities of the notes written to staff, the balances of each section to its others. And then they marshall the musicians to produce precisely that interpretation which lives in their heads.

Then, for all their efforts, I judge them based on how closely their Vivaldi matches mine's fog-green. It's hardly fair.

It makes me reflect, though, on whether I appreciate language for its speech value or its written value. Each, at its pinnacle, communicates a different thing. I often enjoy writing more than speaking. But I'm moved by a passionate speech more than even the finest writing.

To fuse the subject threads and issue a plea, I'd love you to email and suggest to me music I could try on for size while writing. And what to drink alongside it.

Making brownies to employ people

2012-02-02T22:26:00.000-08:00

One of the many threads of good conversation during Tuesday's dinner was the notion of maximizing social good by generating employment. It's crossed my mind periodically since seeing the flower farms in Tanzania, triggered again at GSB when I heard about a nearby organization that "doesn't employ people to make brownies, they make brownies to employ people."

Apparently it's been scurrying around Joe's mind too for the last month. He mentioned that bakeries tend to have acceptable margins because you're in control of the entire value generation process, from commodity all the way to finished product, distribution and sales (usually retail). I hadn't before seen bakeries as vertically integrated shops.

This has been an ongoing theme.

Last Friday I almost cried at a Mexico Trek reunion dinner. We got on the subject of employing formerly incarcerated people and I found myself explaining the American prison situation to people from Spain, Germany, Japan, and China. When stating that just under 1% of America's population is incarcerated at any given time, it's really hard to look someone in the eye and answer their simple question, "why?" (743/100,000 people, where by comparison Russia is 577, Iran 223, Syria 58).

The weird part was, I didn't tear up when I thought about the situation (I got sad and sank lower), I teared up when someone began describing a story of a man she worked with who got out of prison as part of a back-to-work vocational training program who was exceptionally happy. It was a competitive program and the pride that he had for simply having employment was remarkable. That so many people face his situation in trying to get back to work chokes me up a bit.

Lindsey referred me to The Bread Project, which promotes "self-sufficiency by providing culinary training and job referral assistance to people with low income" here in the Bay Area. If I have anything left in me after work days at Dalberg, I might look to get involved with their 8,000 square foot bakery in Emeryville. I'm sure I'd learn a lot more from them than they could from me.

**

Before that dinner I got to see a lion dance for Chinese New Year at the GSB's Friday happy hours. Thank you GSB Asian Business Club for (a) sending me into Chongqing Lunar New Years 2006 nostalgia, where I haven't been in a long time and (b) reminding me to buy dumplings at 99 Ranch.

Ask and ye shall receive

2012-02-01T10:22:00.000-08:00

These helped.

Thank you for the feast, Viren.

Something's still missing

2012-01-31T18:46:00.000-08:00

I'm not laughing enough these days. Gotta fix that.

Investing in Africa

2012-01-31T08:08:00.000-08:00

I take a lot of notes. I'm still trying to figure out how to make them useful.

Last week I got to go to a lunch session with a managing partner of Helios Investment Partners, an Africa-focused private equity firm. I've pasted the unadulterated notes I typed up during his talk because most of it showed both good analysis and deep experience. Most interesting to me were their selected core sectors and investment strategy.

Helios Investment Partners -- BBL

January 26, 2012

cofounded by 3 TPG guys, two Nigerian and one Brazilian

Managing $1.7B

Invest between $40 and $200M in equity per transaction, with a focus on building platforms based on:

1. Growth equity investments and new business formations in high-potential sectors

2. Acquisitions of large, established businesses, such as non-core subsidiaries of Western MNCs

3. Structured investments in listed entities

Heavy focus in east and southern Africa; scattering of investments across Anglophone and Francophone west Africa

Expect high returns from growth, with focus on operations. Sees 90% of value of deal as coming after the deal rather than at time of the deal, unlike 50/50 split in Europe and US with all of the financial engineering involved in leveraged buyouts. They aim to increase margins by hundreds or thousands of basis points, so they make large investments in a smaller number of companies.

Ideal employee is African with PE experience in Europe/US and Africa.

REASONS THEY'RE PRO-AFRICA

Improved market fundamentals, significant resource wealth, low competition for investment opportunities. Multiples lower than those being paid in the developed world.

See larger countries moving in direction of South Africa. Investors wanting them to take these companies public rather than making strategic sales.

Disconnect in perceptions about Africa and reality about Africa.

-More than half the countries in Africa are net short commodities (they import more than they export), so the growth isn't just happening through resource exports

-Virtually no expropriations in Africa since 1970s

-Big equity market volatility, but we've seen very robust IPO activity outside South Africa, e.g. in Nigeria 2007 > South Africa

-Political instability is part of the equation

-IMF forecasts SSA will be strongest growing region outside China over the next 5 years

Very wide credit spreads. Equity bank generates 5% ROA, which yields 30% ROE.

Sees significant pent-up demand. Bank accounts, credit cards, mobile phone data, internet penetration, power (Nigeria supplies only 50% of consumer demanded power)

INVESTMENT STRATEGY

a) Sectors core to functioning of the economy, leveraged to domestic growth, with scope to build large platforms, and might be undergoing fundamental and lasting regulatory transformation/liberalization.

b) Subsectors along value chain that reduce the cost of living or cost of doing business, that meet unmet needs

c) Make investments in businesses that have high operating leverage with simple, repeatable processes, have high degree of control over value chain, have minimal daily interaction with public sector entities, and generate cash

CORE SECTORS

Financial services, power and utilities, telecoms and media, transport and logistics, consumer products

OTHER SECTORS OF INTEREST

Building materials, health care, agribusiness, mining and oilfield services. Mostly stay out of extractives as a way to minimize expropriation risk.

SELECTED INVESTMENTS

Vivo Energy, $1B+ (oil)

interswitch, $165m (Nigerian electronic payment processor)

Africatel, $1.1B (Angola telecom)

Equity Bank, $178m

Helios Towers, $52m (owner/operator of wireless telecomm towers)

Continental Outback Media (outdoor advertising)

FCMB, $50m (Nigerian bank)

Fake it till you make it

2012-01-30T08:08:00.000-08:00

I wrote a program that writes fake text based on an input file. It's really cool. And now I know what Markov chains are. Here's two thousand characters stemming from my tenth-order representation of Shakespeare, based on Hamlet as the input text.

Thank you, Stanford.

Exit.
Ham. Then saw you not have strew'd thy grave.
Now pile your dust upon the platform, 'twixt eleven and twelve,
I'll do't. Dost thou hear?
Since frost itself as actively doth burn,
And that I see, in passages of proof,
Time qualifies the spark and fire of it.
Take it to heart? Fie! 'tis a fault to heaven,
And now, good friends thus wide I'll ope my arms
And, but that great feast.
King. He made confession
That thou so many princes at a shot
So bloodily hast struck.
Ambassadors.
Pol. The actors are come hither, my dear lord?
Ham. Dost thou come here to whine?
To outface me with leaping in her grave straight. Look you how cheerfully on the tongue. But if you mouth it, as many of our
players do, I had as live the town crier spoke my lines. Nor do
not saw the air too much i' th' sun.
Queen. Did he receiv'd it, and others.
Ham. That's a fair thoughts of love,
And in this harsh world draw thy breath in pain,
To have prov'd most royally; and for this enterprise
That spirit upon whose providence
Should patch a wall t' expel the winter's flaw!
But truly I do fear it.
Pol. [behind] What, ho! help, help, ho!
Pol. [behind] What, ho! help, help!
Ham. If she should lock herself from noyance; but much more handsome than fine. One speech in't
I chiefly lov'd. 'Twas AEneas' tale to Dido, and thereabout of it
especially,
That does afflict our natures. I am sorry they offend you, heartily;
Yes, faith, heartily;
Yes, faith, heartily;
Yes, faith, heartily.
Hor. And then, sir, does 'a this- 'a does- What was I about to say?
By the mass, I was about to recover the wind away.
Enter Horatio, Queen, and a Gentleman.]
[Aside] To my sick soul (as sin's true nature is)
Each toy seems Prologue to my brains! Tears seven times salt
Burn out the sense and

*

And on Tom Sawyer:

and then lay it wearily down again, and she glanced around again with a will,
chattering all this, then, Life?" Perhaps they would to make him act so?"
"Deed I don't know HIM. But I never seen
as much as fifty dollars in it, all at one and that was trying his best to keep
the old man's honest eyes a moment, to venture in confidence, how Tom had traded the next instant he was "showing off," too.
There were two among the trees, and Tom and Becky took the generally drunk enough."
Then she left.
CHAPTER V
ABOUT half-past nine, that night!
The children groped their own lawyer. Jeff Thatcher was almost spent. He undressed with excessive caution,
and fell asleep at last with Becky's
latest words lingering notion of exposing Alfred
Temple, Tom's offensive fling had driven him to, perhaps with an unsatisfied
ambition. The climbing up the
aisle; the yelps continued his remarks. His manner became less
guarded and his forefinger inserted between the wall with
candle-grease. Aunt
Polly blushed crimson with humiliation in the thick
gloom that followed.
The place with the
thought: "It's a good feller. I always liked you, Joe, and
stopped moving out of the pulpit; and it was not dark, yet. Presently he stumbled on him and he was suffering 'most a week so you boys had a long talk, but it brought their children, and all
sorts of provision as he
could be--and laws bless you for that. You mustn't be so bad. Water won't hurt
you."
Tom began to cry.
"It was right here on the slate?"
"Ye--yes--but some other time that day. They saw a weed-grown,
floorless room, unplastered, an ancient fireplace--I saw it a
minute ago."
He ran and brought there!
They resolved to acquire it shortly. Presently halted under a great soldier some
day. He said:
"Kiss me again, Tom!--and be off with you if it took a hundred yards above, and they were now in a part of the excitement, I
reckon. I just grabbed that towel and said:
"Now it's all done--all over but the kiss. Don't you wake me so

*

Best quote of them all: "Each toy seems Prologue to my brains!"
My sincere wish: my sonnets make more sense than what you just read.
A pocket experiment: I just downloaded my entire blog as XML, exported it to .TXT, and plugged it into the program. The first run included (ignore the HTML tags):

Interstate 5 is precisely the time, to the very least, I don't stick myself into the rules as a new input. This could eventually come back around deflated soccer balls and shout at each other; but networks mix people up enough. Networks that are too predictable and efficient, whether a $100-300k mezzanine funder was what Mexican context, what counts as impact in the world survives that long? Of course I would. Victory or defeat at 3:15pm.<br /><br />What do you suppose will happen? Picture if these were that much money to a local mama to get her maid to do my laundry, and this week they're not returning it for one of the provision for their daily lives from space poured in, we realized that 5-8% of my ambient happiness they get at GSB.

Rankings don't mean anything

2012-01-30T08:01:00.001-08:00

But they're still fun. Thanks FT!
And no, I'm not making remotely that much.

HAPPY BIRTHDAY CHAD!!!

2012-01-30T00:14:00.000-08:00

Everybody should send Chad a belated happy birthday wish. He got older on Sunday and I wish I'd been able to celebrate it in the Old Pueblo with him.

American Hipster

2012-01-29T10:47:00.000-08:00

This is the series we recorded for yesterday. It's my best chance at achieving YouTube notoriety since the Shark v. Bush failure.

Three episodes a week kick off in April.

Saturday morning animals

2012-01-28T11:54:00.000-08:00

are like the adult version of Saturday morning cartoons.

Lemurball. Cat Voltron.

Now off to Gulch Alley Recording Studio in dark jeans, a white button-up, and a skinny black tie. Will let you know when YouTube picks us up.

Friday mornings, though, I think

2012-01-27T08:15:00.000-08:00

List time.

1. Been a two-cup-a-day week, and all the better for it. In response I'm at Starbucks buying decaf beans to see how much of the ritual I can keep intact while subbing out the caffeine. This is a bold experiment in my universe.

2. On Tuesday I taught a half hour's worth of content at the GSB for Bob, Huggy and Debra. It was pretty neat.

3. On Wednesday I taught a half hour's worth of content using an on-the-fly participatory improv skit at the d.school. It was phenomenal. It also explains why Kathryn has a box on her head.

4. In the spirit of a packed week, I was up at 7 today to outline and start coding my next C++ assignment. I decided to walk to Starbucks after seeing that our little golden suburb was fogged over. It keeps some of the heat in. It also makes me thankful for cell phone cameras, which let me compose little on-the-fly shots like this to share.

5. My classmate's book on managing your online identity is available for free download today and tomorrow.

6. Froginahat.

Hailed As A Conquering Hero

2012-01-24T08:08:00.000-08:00

Thank you Molly for directions towards a fundamentally kindhearted McSweeney's technoparable: In Which I Fix My Girlfriend's Grandparents' Wifi And Am Hailed As A Conquering Hero.

What is recursion?

2012-01-23T09:05:00.000-08:00

Miscellany on a Monday morning.

1. It is raining this morning. For some reason, that made biking feel a bit more satisfying. Perhaps adventure does have a place in my daily routine.

2. Still very much riding the I'm-going-back-to-Tanzania high.

3. The Internet helped me keep a lonely friend company while stranded on an island in Greece. Per William Gibson, "the future is already here -- it's just not very evenly distributed."

4. Recursion took over most of my weekend. It shouldn't have, but I guess this happens when you learn things completely outside your mental frame for solving problems. Recursion is the idea that you can solve certain problems using a method that keeps calling itself. Typical explanations are confusing. At a basic level you take a number, call a set of rules (+, -, *, /, etc) on it, then put the resulting output back into the rules as a new input. This could eventually rock my Excel world.

5. Been enjoying the Rock-It Scientists yearlong dance mixtapes as working music, since my previous favorite, The Twelves Essential Mix now reminds me of working on fluid mechanics problem sets last spring.

6. Teaching tomorrow.

Real graduation means real present

2012-01-22T11:05:00.000-08:00

Before John and Kira's wedding I'm going back here, paid, to guide this program with Dr Bob. Step one is putting BBC Swahili daily podcasts back on my bookmarks bar -- it's been six years since I had to have a real conversation.

After a two-year hiatus from getting people to pay me to go to distant places, I'm baaack.

Friday afternoon means "stop thinking"

2012-01-20T17:54:00.000-08:00

One reason I won't live in China forever, via a cross-section comparison of public pools. And the browser tab I really wish I could close right now, but can't.

Cities and the Wealth of Nations, on city growth

2012-01-19T08:08:00.000-08:00

Jacobs argues that cities come into being by the act of replacing goods that they previously imported.

Any settlement that becomes good at import-replacing becomes a city. And any city that repeatedly experiences, from time to time, explosive episodes of import-replacing keeps its economy up-to-date and helps keep itself capable of casting forth streams of innovative export work. Why "explosive" and why "episodes"? In real life, whenever import-replacing occurs significantly at all, it occurs in explosive episodes because it works in a chain reaction. The process feeds itself, and once well under way, does not die down in a given city until all the imports that are economically feasible to replace at that time and in that place have been replaced....To summarize briefly, once replacements start, they stimulate more replacements. When such an episode is over, a city must build up new funds of potentially replaceable imports, mostly the products of other cities, if it is to experience another chain reaction. The process vastly enlarges city economies as well as diversifying them, and causes cities to grow in spurts, not evenly and gradually. The growth is by no means all net growth, however. Much import-replacing, especially in already large cities, merely compensates for losses of older work. Cities are forever losing older work; some because former customer cities take to replacing imports themselves and even become competitive producers of the items they formerly imported; some because well-established enterprises, after having first developed in the symbiotic city nest, transplant their operations to distant places like Pickens County; some because old work and many old enterprises, too, grow obsolete.

Whenever a city replaces imports with its own production, other settlements, mostly other cities, lose sales accordingly. However, these other settlements--either the same ones which have lost export sales or different ones--gain an equivalent value of new export work. This is because an import-replacing city does not, upon replacing former imports, import less than it otherwise would, but shifts to other purchases in lieu of what it no longer needs from outside. Economic life as a whole has expanded to the extent that the import-replacing city has everything it formerly had, plus its complement of new and different imports. Indeed, as far as I can see, city import-replacing is in this way at the root of all economic expansion.

I'm remembering she wrote this in 1984. She continues in greater detail.

The expansion that derives from city import-replacing consists specifically of these five forms of growth: abruptly enlarged city markets for new and different imports consisting largely of rural goods and of innovations being produced in other cities; abruptly increased numbers and kinds of jobs in the import-replacing city; increased transplants of city work into non-urban locations as older enterprises are crowded out; new uses for technology, particularly to increase rural production and productivity; and growth of city capital. (p 41-42)

While reading, I'm evaluating how much I agree with the last paragraph.

Still in disbelief

2012-01-18T19:37:00.001-08:00

This actually makes sense now.

In fact, as discussed in Chapter 2, a Libor ﬂoating rate note can be viewed as a par ﬂoating-rate note issued by a hypothetical ﬁrm whose credit quality is refreshed at each coupon date (if the ﬁrm has not defaulted by then) to that of current Libor-quality banks. For this reason, one can treat an at-market plain-vanilla swap rate as the par ﬁxed-rate bond yield (of the same maturity, daycount, and currency) of our hypothetical refreshed-Libor-quality bond issuer.

In the style of Stormtroopers

2012-01-18T08:08:00.000-08:00

on their day off: conquering nature.

Thank you Jeff.

Cities and the Wealth of Nations, on the problem of macroeconomics

2012-01-17T08:08:00.000-08:00

Continuing my speed skimming of Blattman's list of development books, I found Cities and the Wealth of Nations by Jane Jacobs. This was the first argument that stood out:

Nations are political and military entities, and so are blocs of nations. But it doesn't necessarily follow from this that they are also the basic, salient entities of economic life or that they are particularly useful for probing the mysteries of economic structure, the reasons for rise and decline if wealth. Indeed, the failure of national governments and blocs of nations to force economic life to do their bidding suggests some sort of essential irrelevance. It also affronts common sense, if nothing else, to think of units as disparate as, say, Singapore and the United States, or Ecuador and the Soviet Union, or the Netherlands and Canada, as economic common denominators. All they really have in common is the political fact of sovereignty.

Once we remove the blinders of mercantilist tautology and try looking at the real economic world in its own right rather than as a dependent artifact of politics, we can't avoid seeing that most nations are composed of collections or grab bags of very different economies, rich regions and poor ones within the same nation.

We can't avoid seeing, too, that among all the various types of economies, cities are unique in their abilities to shape and reshape the economies of other settlements, including those far removed from them geographically. (p. 31-32)

Her comparisons are obvious, but that's why they're powerful. It doesn't make sense to examine those pairs of countries through the same economic lens. I'm taking away the reminder to ask myself what is the appropriate/best/most realistic unit of analysis for this problem? for whatever problems I face in the future.

Cities matter. I look forward to seeing if Jacobs can put together a framework for me to evaluate (a) how much, and (b) why.