Saturday, September 30, 2006

When Two or Three Are Gathered

The weather cooperated at the church dinner last weekend.

In the pre-1970 Episcopal Church it made no difference to the meaning of the church service whether one was alone in the pew or whether there were hundreds of others in attendance. Eyes were glued to the front (when heads were not bowed), noisy children were given dirty looks until they quieted, and when the prayers began worshippers promptly knelt (“hit the deck” as my old priest used to say) and stayed put until they went to the altar for Communion.

The revised Book of Common Prayer seemed revolutionary when it came out in 1976. Not only was the language updated--thee, thou, and thine became "you" and "your"--but the new services demanded that the congregation pay attention to what was going on. The Prayers of the People required regular responses from the flock, and the passing of the peace encouraged people to talk to each other, shake hands, and maybe crack a smile. While the openness and informality initially made many uncomfortable, people not only got used to it, but it’s doubtful many would want to go back.

I am acquainted with believers who will have nothing to do with organized religion. They worship in their own homes, either alone or in small groups. It is of course within their right to do so, and churches can certainly be criticized for being too structured, unspiritual, and focused on money and social-clubbing.

But I like the idea of gathering once a week with people who are from very different backgrounds and don't think like me. From sad experience I know that I've often been mistaken, so I won't learn anything by associating only with the like-minded.

And we shouldn't dismiss the access we have to the knowledge and training of ministers, deacons, and seminarians. Most questions that seem original to the neophyte are actually very old. There is nothing new under the sun, said the prophet, so save the wheel-spinning. It's a lot easier to just ask the guy (or gal) in the frock. © 2006 Stephen Yuen

Thursday, September 28, 2006

Focus Day

The Garden Court at the Palace.

It was time for a refresher course on Bloomberg. (Last year's visit to the offices may be found here.) In August Bloomberg Financial Services sent me both e-mail and snail-mail about yesterday’s seminar ("Focus Day") at the Palace Hotel. I signed up for foreign exchange, credit derivatives, sector analysis, and application-program interface (how to transfer data to Microsoft Excel).

Although I was tired, the speakers talked about features that I can use, so I didn’t doze off. Also, there’s still enough of the finance geek in me that they held my interest even through discussions of default “swaps” (a misnomer for credit insurance) and foreign exchange forwards, products that I don’t work with frequently.

Fogey soapbox: okay, I admit that I haven’t kept up with what’s going on in high finance---and part of my concern is undoubtedly based on the human tendency to be worried about what one doesn’t understand---but I am worried that trillions of dollars are being wagered each day based on mathematical models whose reliability hasn’t been proved. So the correlation between two securities is .18---would you bet your house on that? Would that relationship hold if the yuan was revalued by 20% or mortgage defaults rose by 10%?

Bloomberg has made a fortune by being an indispensable tool to those folks who make huge financial bets. It’s more than an analytical tool---you can even make trades on the system. That’s why its owner has the luxury of time to dabble in politics---and why they could afford to have sushi chefs making platters of those delectable morsels for their customers at the morning coffee break. © 2006 Stephen Yuen

Tuesday, September 26, 2006

The Media Filter

We are inundated by information. Newspapers, magazines, television, radio, and, of course, the Internet, shovel out so much data that it’s impossible for us to keep up. We rely on news organizations to discern what’s important and summarize information for us. We expect news professionals to serve a higher calling by distilling and disclosing the significant facts related to a subject, though such facts may damage the political causes that reporters may favor.

News has similarities to my profession. Accountants are duty-bound to render services to their clients, but their primary obligation is to the public and to the integrity of the financial statements. And yes, there have been some notable failures in recent years when CPA’s have forgotten or deliberately ignored the values that they profess.

Today the government declassified portions of the National Intelligence Estimate on “Trends in Global Terrorism”. The San Francisco Chronicle headline was “Intelligence agencies say Iraq conflict encourages the global jihadist movement” The New York Times blared “Waging the War on Terror: Report Belies Optimistic View” and USA Today’s contribution was:

If these headlines indeed captured the essence of the intelligence estimate, then that would seem to be another nail in the coffin of the Bush Administration’s foreign policy. Not only was the Iraqi democracy project failing, but the United States has been placed in greater danger, not less, because of the Iraq invasion. So I decided to read the report for myself. It begins:
United States-led counterterrorism efforts have seriously damaged the leadership of al-Qa’ida and disrupted its operations; however, we judge that al-Qa’ida will continue to pose the greatest threat to the Homeland and US interests abroad by a single terrorist organization. We also assess that the global jihadist movement—which includes al-Qa’ida, affiliated and independent terrorist groups, and emerging networks and cells—is spreading and adapting to counterterrorism efforts.
Two rhetorical questions: 1) Does the bleakness of the headlines match the topic sentence of the lead paragraph? 2) Does the lead paragraph tell us anything we didn’t already know?

The report does discuss the growth in the number of jihadists and how the Iraq war has “cultivat[ed] supporters for the global jihadist movement.” However, it also points out ways that terrorism can be defeated, including succeeding in Iraq, instilling greater awareness how the victims of violence are other Muslims, and publicizing the implications of living under shari’a law if the terrorists win.

Two paragraphs in the second half of the report merit further comment. Keep in mind the intelligence estimate is dated April, 2006:
  • The loss of key leaders, particularly Usama Bin Ladin, Ayman al-Zawahiri, and al-Zarqawi, in rapid succession, probably would cause the group to fracture into smaller groups…
  • Should al-Zarqawi continue to evade capture and scale back attacks against Muslims, we assess he could broaden his popular appeal and present a global threat.
  • Now that Zarqawi has been killed, the Intelligence Estimate says that, at least for a time, the threat to US interests should be “less serious”.

    Question for the professional news organizations: why couldn’t the headline have been “Death of Zarqawi Lessens Terrorist Threat”? But if you disbelieve this part of the assessment, why do you assign such credibility to other conclusions, such as “the Iraq conflict has become the ‘cause celebre’ for jihadists”?

    I think we know the answer. © 2006 Stephen Yuen

    Saturday, September 23, 2006


    My friend is a professor at an Ivy League university. He regularly sends out e-mails on political and economic matters. Below are a few representative excerpts:
    September, 2006: The United States is a country filled with profligate spendthrift Americans self-indulgently pushing themselves ever deeper into debt on falling real incomes to satisfy their desire to live for today. The day of reckoning will come for a country led by an incompetent moron and his incompetent, brain-dead, ethically-challenged minions.

    May, 2006: Bush is a vile, despicable, completely incompetent want-to-be dictator deserving of no respect and utterly devoid of any redeeming qualities. He is a disgrace to humanity, an enemy of democracy, and an embarrassment to the American people.

    March, 2006: The U.S. keeps sinking into the gutter, led by an incompetent, duplicitous, delusional President and his administration of grossly incompetent, idealogical (sic) hacks. This country is completely delusional as people try to convince themselves how great things are.
    My friend--whom I really do like on a personal basis--has never called the current holder of the office "the President", much less "my President", because he believes the election was stolen in 2000 and again in 2004. My friend must have been applauding when Venezuelan President Hugo Chavez said at the United Nations that President Bush was "the devil" and acted "as if he owned the world". He must have cheered when Chavez "told reporters that Bush is not a legitimate president because he 'stole the elections.'"

    But imagine the disappointment that my friend must have felt when Rep. Charles Rangel, an outspoken opponent of Bush, said to Chavez: "You don't come into my country; you don't come into my congressional district and you don't condemn my president." [emphasis added] It took six years for some Democrats, but better late than never. For my friend, however, I suppose it'll be never. © 2006 Stephen Yuen

    Friday, September 22, 2006

    It Only Seemed Longer

    It’s 5:30 p.m., and I’m waiting at the Embarcadero Station for the Muni light rail. The N-Judah is at Civic Center, which is three stops away, and we only have 20 minutes to make our train. The N arrives, and everyone hastens aboard.

    One couple has obviously been drinking and argues loudly with another rider who is trying to retreat gracefully. Every other word from the man is the f-bomb. The woman describes how her companion is especially fond of her private parts (her phrasing is more graphic). Our car is filled with Peninsula commuters who seem to be fascinated by their shoes. Fortunately, the Giants are not playing tonight, so our car is devoid of young fans. The couple gets off near the ballpark for more drinking: the night is still young. As for me, a quick ride home and quiet dinner was all the nightcap I needed.

    Monday, September 18, 2006

    Respect the Old Ways

    Definea=Lseterm = 10Yrs;,
    Defineg=Basicrnt = 440.76;,
    Define0=Rnt1 ;Rnt_Gr_Debt;,
    Define1=Rnt1 Resid1 Famort Asset01 ;Eq_Csh_Pf;,
    Define2=Rnt1 ;Uneven_Rnt_Adv;,
    Define4=Rnt1 ;Pv_Rnts_Flws;,
    Define5=Except Loan;Ref_Loans;,
    Define6=Rnt1 Resid1 Famort Asset01 State Federal ;Csh_Yld_Flws;,
    Defineai=Cod = ((12*100)*(((1+(((Treas1+(((Treas2-Treas1)/(Term2
    -Term1))*(Avg_Life-Term1)))+Debt_Spd)/200)) ^ (2/12))-1)) ; &
    Cod Based On Avg Life And Converted From S/A To Monthly &

    Above is part of a data-file from financial software that I regularly use. The software originally was written for mainframes in the 1980’s, then ported to MS-DOS. The developer issued a Windows version, but it is much slower, and frankly, I don’t completely trust its calculations.

    So I use the DOS program. It requires a lot of patience and careful typing, because a single letter out of place will stop the program from running. Worse, it’s hard to find that letter because the primitive debugger isn’t very helpful in locating the problem. Last week it took me hours to figure out that “car3” should have been “cars3” in a lengthy file related to an investment in railcars.

    So why don’t we buy a more up-to-date program? Two reasons: the most important is that the accounting for many of our investments uses the old software, and in these days of Sarbanes-Oxley, when any mistake will cause a team of auditors to land on a poor accountant like a ton of bricks, it’s best to leave well enough alone when the system works, however inefficiently. (In my weaker moments I dream that SOX, with its endless flowcharting, systems testing, and error remediation, is applied to federal and state governments; they would fail control standards within 30 seconds.)

    The second reason we don’t switch is skepticism: the benefits of a new system are always exaggerated, while the costs of adoption are underestimated, and some are completely overlooked. I’ve never seen a new system do everything we needed it to do---and I’m not talking about bells and whistles but features essential to running our business. Patching and fixing the old is better than buying new.

    Don't Eat Your Spinach
    It’s not clear that Earthbound Farms can patch the fix that it’s in with the source of the E.coli outbreak still unknown on Monday morning. After the media and government swarm will come the lawyers, and the company will require a concentrated effort to work through this debacle. Even if it should survive, Earthbound Farms’ sales will suffer a huge initial dropoff in its business—no one absolutely has to eat their produce—and some customers may never return. Odwalla’s e.coli scare of 10 years ago nearly wrecked the company.

    On Saturday I took the container of mixed greens (contains spinach) back to the market. The lady in front of me didn’t have a receipt and only said that she threw out a package of spinach, but they gave her a refund, no questions asked. We had opened our container and had eaten about a quarter of the contents, but they also gave me a full refund.

    This is a reminder that canning and pasteurization were remarkable innovations in the prevention of disease. Another reason to respect the old ways of doing things.
    © 2006 Stephen Yuen

    Friday, September 15, 2006

    Mr. Fix-It

    You know that whenever President Bush calls on this guy for help, the situation is really dire. Afterthought: JB's memoirs came out in 1995. He’s worked on a few projects since then---it's time for an update!

    Tuesday, September 12, 2006

    Unclear Road

    It was T-shirt weather on Sunday. The church had a barbecue to kick off the school year, and we enjoyed the sun for a few minutes until the heat chased us indoors. The grills were trucked in by one of the parishioners. He hitched the equipment to his pickup and brought the apparatus through the back gate. Although he’s half my age, he’s much handier with tools than I am (my wife would say that’s not a particularly high standard) and a hit with the ladies. In these parts lawyers and engineers are a dime a dozen; plumbers, landscapers, and car repair guys are the real chick magnets.

    I scheduled a meeting which convened after the barbecue. It was one of those meetings where everyone wished they were somewhere else, not indoors going over the minutiae of some upcoming events. In my youth I laughed at the silly ancients who argued over how many angels danced on the head of a pin. Now I laugh because I recognize myself.

    At 2 o’clock we headed up to the City, and the warm Peninsula sunshine lulled me into forgetting to bring a jacket. In the Bay Area climates—the voguish term is micro-climates—vary widely. The fog enveloped us north of Daly City, and I had to remove my sunglasses and turn on the headlights. After parking the car, I strode briskly to keep warm. We stopped for an early dinner at a noodle joint, and I took the slow way south along Skyline Boulevard.

    Yesterday, of course, was the fifth anniversary of the attacks on the World Trade Center and the Pentagon. 9/11 set in motion a chain of events whose outcome is far from clear. Even five years later, the country is divided about what it should do. Concerning Iraq, should we pull out and cut our losses, dooming the nascent democracy and creating a (worse) breeding ground for terrorists? Or should we put in more troops, likely resulting in more violence and increasing their dependency on America? Or should we stay the course, which may be the least bad alternative but is singularly unsatisfying?

    The choices regarding Iran are worse: the Iranians appear dead set on acquiring nuclear weapons and do not appear reluctant to use them, at which point Israel will be in mortal peril. But an invasion and occupation of Iran raises a host of problems that will make Iraq seem like a picnic.

    And always, in the back of our minds, is the “unthinkable” option of unleashing the full power of America’s military might, which will guarantee our physical safety at the price of our soul.

    [Update - Victor Davis Hanson has the perfect phrase for this line of thinking: More rubble, less trouble. ]

    Thank goodness I don’t have to make those decisions. Let us pray that our leadership and its opponents (who may assume the leadership sometime in the near future) have the wisdom and courage to guide us through the fog. © 2006 Stephen Yuen

    Off Skyline Blvd. in Daly City on a Sunday afternoon in September.

    Friday, September 08, 2006


    This weekend the nation will commemorate the searing events of nearly five years ago, but today my family looks back over half a century to a quiet Saturday in Honolulu. A young electrician, who had returned from his tour of duty in occupied Japan, married a lady who worked at the phone company.

    They had a church wedding and wore formal clothes that were heavy and uncomfortable in the tropical heat. Friends and family---many now departed---stare at the camera with frozen expressions. The shutter speeds were so slow that, if anyone moved, the picture would be ruined.

    The young man and woman sang and danced into the night and afterward went to Niagara Falls, as everyone did in those days. They were handsome and lean, the promise of their lives unfolding before them. Happy Anniversary, Mom and Dad, with love.

    Monday, September 04, 2006

    Monterey Redux

    Yesterday Australian “crocodile hunter” Steve Irwin died.
    Irwin was at Batt Reef, off the remote coast of northeastern Queensland state, shooting a segment for a series called "Ocean's Deadliest" when he swam too close to one of the animals [stingrays], which have a poisonous barb on their tails.
    In the past 24 hours there’s been lots of commentary about his energetic showmanship, the knowledge and love of animals he imparted to his young viewers, and how he died doing what he loved. But some also criticize the “unnecessary” risks that he took not only with his own person, but also with his children, who sometimes accompanied him when he filmed wild animals. My own view is gratitude----that we live in a society that (still) errs on the side of allowing us and Steve Irwin to live our lives freely, rather than protecting us from the consequences of our own folly.

    The closest I want to get to stingrays is behind six inches of glass. On Friday morning the four of us headed south to the Monterey peninsula. Two blocks from the Monterey Bay Aquarium I found street parking at $1 per hour, half the cost of the city lot. It was a cool, gray morning, so we donned light jackets.

    News cameras were on hand to record the aquarium’s newest arrival, a 5’ 8’’ white shark. It was a sleek, graceful animal, albeit smaller than the fearsome monsters depicted on the silver screen. We moved on to the shark exhibit, which extolled sharks’ place in the ecosystem and excoriated man for the decline in shark populations.

    It was another thing to feel guilty about---the bowl of sharks fin soup that I slurped ten years ago, along with this unnecessary day trip that uploaded greenhouse gases to the atmosphere. As we used to say, excuse me for living, except that just being alive is bad for the environment because with every breath we take we emit CO2. On Sundays at the local church my sins against God are forgiven; at the altar of Gaia there is no expiation.

    We walked to Bubba Gump’s for lunch. Though it was two o’clock we had to wait to be seated; other patrons had also forsaken the aquarium cafeteria. The d├ęcor was yuppified shantytown; the tables and walls were covered with pictures and quotations from the movie. We also had a nice view of the Bay, but, unexpectedly for a restaurant in a scenic location, the food was tasty; the fish and salads were fresh, and portions were plentiful.

    After lunch we prowled the Monterey stores and picked up some salt-water taffy and candied apples.

    Returning to the aquarium, the dwindling crowds allowed us to have an unobstructed view of the exhibits as the six o’clock closing time approached. The Labor Day getaway traffic headed south toward LA, and we had a smooth drive back on Friday night. A leisurely dinner at B.J.’s,and the long weekend was off to an excellent start. © 2006 Stephen Yuen

    BJ's Sampler of four (4) 5-oz beers is the perfect way to end a long day.

    Saturday, September 02, 2006

    Toto's Pizzeria

    Toto’s Pizzeria in San Bruno is one of my guilty pleasures. The decor is basic American diner. It doesn't have the faux-downscale atmosphere that one finds in new suburban restaurants. The floors have the scrubbed, worn linoleum that shows it's the real McCoy.

    At Toto’s they prepare the pizza right in front of you. I usually order the extra garlic, which is spooned generously from a bottle over the entire surface of the dough. (I've learned not to order the garlic if I have a business meeting the next day.) The wait, including oven time, is about twenty minutes, during which we enjoy the crisp iceberg lettuce salad, a pitcher of soda, and watch the games on the old CRT sets mounted in the corner.

    Toto’s has raised its prices to make them equivalent to the major chains. They’ve added sandwiches and spaghetti, even calling the latter “pasta” in a bow to modernity. But diners would never confuse them with upscale pizzerias that serve eclectic combinations or deep-dish fare. The selections are traditional and the pizza comes out a little too wet and gooey for contemporary upscale palates.

    But I’ll keep returning until my cholesterol needle hits the red zone. © 2006 Stephen Yuen