Out of Office
And so it is drawing close to the end of my last day in the office for a while. It will be at least a year, and given that the current color scheme of this blog is not quite dark enough to reflect my views on the outlook of the financial markets, economy in general and Estonia in particular, it may well turn out to be longer.
In two weeks I will take off, first for Amsterdam and then on to Cambridge for a couple of weeks, and we shall see from there on. As Estonia is not exactly at the crossroads of the world, it doesn’t look likely that I will be seen around here very often in 2009. In addition to ducking out what is about to become the most dismal year in finance that anyone currently alive has gone through professionally, I will try to use the next twelve months productively to finish my PhD dissertation, among other things. In fact, as it is December 31st, it is an opportune moment to draw up a list of New Year’s resolutions for 2009 (in no particular order):
- lose at least 10 pounds
- read at least two of the following three books: Infinite Jest by David Foster Wallace, The Man Without Qualities by Robert Musil and Famished Road by Ben Okri. Might actually amend that list once I get to packing my things but the point remains – read some books that I have put off for “some day”
- circle the globe (and tick off Australia en route as the last remaining continent I haven’t been to). OK, there’s Antarctica as well but that would REALLY be just for ticking off.
- finish the dissertation (OK, at least something that would be very close to finished dissertation)
- play poker in Las Vegas
- not wear a tie or high heels for the full year
Given that I will probably be on the road for most of the time it will certainly be tough to keep up with two of the main of my hobbies – golf and kendo – but I really can’t be bothered lugging all that equipment with me. In case of kendo at least it might actually not be such a bad idea to take a break – I’ve been practicing and teaching it non-stop for more than seven years now and I have to admit that recently it has became a bit of a drag.
Anyway, I am excited on a New Year’s Eve and that hasn’t happened for a long long time.
What the hell?!
Apparently Electronic Arts, one of the world’s leading video game producers, is gearing up for the release of a new action adventure game that is based on the first cantiche of Dante’s Commedia – Inferno. The aficionados of medieval poetry are bound to get upset by the news – and indeed, at first thought it is difficult to imagine how could Dante’s allegorical masterpiece possibly be converted into a video game format without a major butchery. The trailer has a distinctive Lord-of-the-Ringish feel which will probably further deepen the suspicion that the end result will not be up to the notch. The Divine Comedy has became one of the central and sacred texts of the Western literary culture – something to be awed by, studied and treasured, looked but not touched. Commedia is kind of a perfect example, something that can’t be improved and every attempt to translate it to another medium, such as prose for example, will inevitably leave out something fundamentally important. And even if it wasn’t Dante – there is a fair amount of general scepticism in whether video games are intrinsically suitable for conveying anything but the most primitive of narratives. Also, there is certainly not much in terms of successful examples of great works of literature having been successfully converted into video games – or vice versa, for that matter.
This led me to approach the same issue from the other end – the so-called adventure games actually do have a genre of sorts. Of course, it depends on what exactly does one consider as “adventure games” – I think most would agree that Indiana Jones’ series rightfully belong there, while I would personally be hesitant qualifying Tomb Raider as such. Also, many MMORPG-s draw heavily from the original adventure game genre while doing away with the scripted storyline for the most part (in-game quests or missions being an important exception here). And then there are the likes of Myst or Diablo and Neverwinter Nights.
However, if I were to try and bring one analogy from the literature in order to summarise what adventure games are like, I would probably pick bildungsroman. Adventure games are usually in third person (although many also allow first person perspective, if not for anything else then for combat parts) and usually consist of more than just a string of puzzles – they are about character development. At their best, adventure games have actually came pretty close to literature in creating both the narrative and the ambience - Benoît Sokal’s Syberia is probably the best example of this, but there are several others. Best adventure games employ clear stylistic elements – Syberia draws from steampunk, Max Payne from film noir and hard-boiled detective genre, Silent Hill from horror, etc. And while I must agree that so far I haven’t came across a computer game with a story-line remotely as gripping as a good novel can be, there is a lot more to good literature than gripping plots – or even plots in general, as Mario de Andrade’s Macunaíma demonstrates. So maybe it is not the problem of video games after all. At the time when Lumière brothers screened their first short movies about workers leaving the factory or train arriving at the station it was no doubt difficult to imagine how could that medium ever tell a gripping emotional story or be a form of high art.
All that being said – The Divine Comedy is certainly a challenge on many different levels. In that regard I’d say that Don Quixote would have been much safer a bet. It remains to be seen whether the project will prove successful, and, even more interestingly, SHOULD it prove successful shall it have a sequel – Dante’s Commedia certainly has a potential for that. A video game based on Paradiso – now that would be really interesting, although I’d be ready to lay my money on the fact that it will be a complete flop in commercial terms.
Stiilipuhas sooritus
Täna on mul harvaesinev ja harukordne rõõm anda teada tõesti meeldivast emakeelsest ja lisaks ka kodumaist päritolu lugemiselamusest – Rein Raua värskest romaanist “Vend”. Mind tundvad inimesed teavad, et ma jagan määratlust “hea raamat” väga valivalt ning viimaste aastate jooksul loetud ja lapatud Eesti kirjandusest teist sellist hinnangut väärivat teost pähe ei tulegi.
“Vend” on lihtne lugemine – väike formaat, õhuline esitus ning kokku 113 lehekülge tähendasid seda, et sain kogu raamatu läbi ühe õhtuga, tegelikult vist isegi vaid mõne tunniga. Ja tagantjärgi tundub mulle, et see ongi raamatu endaga kõige paremini kokku sobiv meetod – lugeda teda nii nagu vaataks mõnda head vana vesternit.
“Venna” peamine väärtus on stiil – mis on ka ilmselt loomulik kui vaadata kaht eeskuju kellele tehtud kummardus (mis tõesti ka tekstist väga selgelt välja paistab) on autori järelsõnas ka otseselt väja öeldud. Kolmandal katsel on Reinul lõpuks õnnestunud järgida kuldaväärt printsiipi “don’t try, let” ning tulemuseks on raamat, mis on lihvitud kuid mitte punnitatud, mis pole pretentsioonikas kuid samas ka mitte prententsioonitu.
Ja selliselt seisab Vend eesti viimaste aastate ilukirjanduses nagu Eastwood keset karja van Dammesid.
Time value of money is no more
UPDATE 18/01/09 - here is a short post by Paul Krugman explaining some of the actual implications of zero interest rates.
Just about a week ago I wrote on debt and usury, stating that the time value of money is widely seen in the western world as a fundamental concept on which some of the most basic tenets of our economic and also social institutions are based. This is pretty much the first thing that one is taught at the beginning of a curriculum in economics – a dollar today is worth more than a dollar in the future, and this decline in value is compensated by interest.
Apparently this is no more – yesterday the US central bank lowered its base lending rate to zero, a dramatic move that is set to be followed by the Bank of England and other major central banks all over the world. Also, the language used in the press release deserves attention – basically it reiterates Bernanke’s recent pledge to ‘drop money from helicopters’ to stop the US economy falling into deflation. The “final cut” of interest rates is, however, a major milestone for several different reasons. Not only is it something unheard and -seen of, something virtually unthinkable just a year ago, this effectively also means that Federal Reserve has exhausted one of the main tools of a monetary policy – they simply can’t cut the lending rates any more, short of starting to actually pay people in order to make them borrow money. To be sure, they still do have other options but those are increasingly of intravenous kind – injecting the cash directly into the bloodstream of the economy. To quote the Economist – having run out of interest-rate bullets, the Fed has now fixed bayonets. And things are bound to get messy indeed.
A hero without a character
I recently finished what must be the second weirdest book of fiction that I have read – Mário de Andrade’s Macunaíma. It was published in 1928 at the height of the modernist movement and which was destined to become one of the defining works of Brazilian literature. It’s a strange book that got turned into, as some say, even stranger a movie 41 years later.
Late 1920-s was a very colorful and productive period in literature worldwide – for example in Russia alone, 1927 saw the publication of a small gem Envy by Yuri Olesha, and 1928 was apparently the year when Bulgakov started writing his Master and Margarita. European literature had just recently been shaped and changed by giants such as Kafka, Hesse, Mann, Joyce, and Proust. A new surrealist movement was spreading fast, that in turn was preceded by symbolists and dadaists of the decade before.
Although Mário de Andrade (not to be confused with his contemporary and another great name of the modernist Brazilian literature, Oswald de Andrade) never left his native Brazil, he was well familiar with both the European literary tradition and avant-garde. His early poetry was particularly influenced by French symbolists. Andrade was a keen student of Brazilian folklore, especially the music, but he also collected a huge amount of traditional stories over his many years of travel in both in the state of São Paulo and in the wilder areas to the northeast.
It was against this backdrop that Mário de Andrade wrote Macunaíma.
For somebody who is used to reading books that have a clear plot and character development, the second part of Macunaíma’s title, A hero without character, should serve as a warning. Andrade’s book is a idiosyncratic riot of different voices and influences that only loosely follows a general story-line where Macunaíma, the book’s unheroic protagonist, travels from his birthplace in Brazilian jungle to São Paulo and back. Macunaíma is a classic trickster figure, and as such he is beyond the categories of good and evil. Although he does have a quest of a kind – to recover a necklace from the hands of the evil man-eating giant Pietro Pietra – he goes about it in a decidedly unheroic manner – hanging around, deceiving and playing tricks and pranks to everyone he meets, running away from fights and copulating with every maiden and wife he comes across. Whenever faced with a decision or responsibility, Macunaímas response is to utter Aaai que preguiça! (a play of words in both tupi and portugese which was translated into english as “Aww what a fucking life”) and find a place where to crash and sleep a bit.
Strange as Macunaíma may seem, he is however not alone in the fiction of 20th century, the novel is very much part of the Zeitgeist of its time. This is not only because of drawing upon (and in many ways, parting from) some formal properties of its contemporary literary culture. It is a striking coincidence that in the very same year, in 1928, a book was published halfway across the world in Estonia by August Gailit that talks of a promiscuous vagabond called Toomas Nipernaadi, who travels Estonian countryside, telling tall tales to women he meets, only to leave them shortly thereafter. Neither did it stop in 1928 – the similar line of drifters and purposeless heroes can be traced through Tutuola’s Palm-Wine Drinkard (which, by the way, so far is the weirdest book I have ever read) and Musil’s Der Mann ohne Eigenschaften to Cohen brother’s Big Lebowski.
There is a poem in Charles Baudelaire’s Les Fleurs du Mal which was a major influence for French symbolists:
La nature est un temple où de vivants pilliers
Laissent parfois sortir de confuses paroles;
L’homme passe à travers des forêts de symboles
Qui l’observent avec des regards familiers.
Comme de longs échos qui de loin se confondent
Dans une ténébreuse et profonde unité,
Vaste comme la nuit et comme la clarté,
Les parfums, les couleurs et les sons se répondent.
Nature is a temple where living pillars / Sometimes let confused words escape / Man passes there through forests of symbols / Which observe him with familiar looks. / Like long echoes becoming confused from afar / In a mysterious and profound unity / Vast like the night and like clarity / Perfumes, colors, and sounds answer each other.
Inherent in the poem is the concept of Baudelaire, which was enthusiastically taken up by symbolists, that the mundane world we all are living in is a “forest of symbols” that is speaking to us in a multitude of different ways. It is the task of a poet and writer to attentively listen to that speech, to make sense of it and render it understandable, but also to synthesize it into new realities. As such, the writer is only a medium, not a conscious agent. And this, I believe, is the key to understanding and approaching what Macunaíma is all about. Macunaíma, Andrade’s alter ego, is a hero without character and ultimate purpose – or at least whatever purpose he has is only secondary to the function he serves – to walk in the forest of symbols and let the new emerging nation and culture make itself heard.
Sign of times
UPDATE 21/12/2008: The Estonian language version of this article just got published in Postimees.
Business papers and magazines, such as FT, Economist and WSJ have long published book columns and whole sections dedicated to culture in general. So it surely must be a sign of times that London Review of Books published a 3-page article on hedge funds – this is in addition to a long article on sub-prime crisis a few issues back, which, by the way, got translated by Märt Väljataga and published in Estonian cultural monthly Vikerkaar in November. I think that just a year or two ago it would have been fair to say that most readers of either LRB or Vikerkaar couldn’t have cared less about credit default swaps or consensus trades.
On a related note – Margaret Atwood (so far mostly known as a novelist and poet) recently published a book titled Payback: Debt and the Shadow Side of the Wealth which is pretty much a transcript of her CBC Massey Lectures of 2008. In those she deals with a concept of debt in the broadest sense- what does it mean to be in debt to someone, how does it come to pass and what does it entail. I do have the book but so far I’ve only managed to read the introduction and about a half of the first chapter. However, by now I must have read at least ten different reviews of Payback – try googling “atwood payback” and you see for yourself that the thing is all over the place. It has been reviewed by Economist and Bookforum, and everyone inbetween. Although it is probably safe to assume that a new book by Atwood would have gotten attention no matter what, her timing could have hardly been better. Of course, there was no way for her to know what will happen in 2008 (or, at the very least that it will happen in 2008) when she sat down to write the lectures a few years ago. However, in retrospect it is very clear and obvious that debt has completely permeated the modern society to the extent that we don’t even notice it until the moment the supply suddenly ends.
In that regard it is interesting to notice the resurgence of the ethic debate on lending – apparently this is one of the major points of Atwood’s book as well. I did a short interview about a year ago for the morning program of the Estonian Television where I was asked to briefly talk about Islamic finance. Namely, Qur’an explicitly prohibits charging the interest, which to most Westerners (at least to those who have any training or interest in economics) seems rather odd, as it is effectively imposing what they see as a religious ethical constraint on an underlying financial reality (that being a time value of money). However, Europe has its own very difficult history with interest and lending. The original Latin word for interest was usura, which initially stood for a fee charged both for changing and using the money. In medieval Europe this was a very serious sin – so serious that in Dante’s Commedia usurers are placed in the inner ring of the hell’s seventh circle, together with only blasphemers and sodomites. The medieval Christian theology had two main arguments against charging the usura: (1) interest was seen as a fee that was taken for time, which however did not belong to a man rather than the God, and (2) St. Thomas Aquinas argued that taking interest was “double charging”, like selling a bottle of wine and then asking money for drinking it. This is actually quite a natural line of thought as long as one treats money simply as a measure of value and having no value of itself. It was this change of thinking – that money could be seen as a commodity like any other – that made possible the finance and economy as we know it today. However, this shift of perception in turn only became possible due to major changes in medieval culture and ethics that a famous historian Jacques le Goff has described in his fascinating book Your Money or Your Life: Economy and Religion in the Middle Ages. Already by 18th century usury was seen as a vice rather than sin, so that Jeremy Bentham was able to publish his Defense of Usury which a few centuries ago would have been as shocking as advocating the benefits of rape. And when Ezra Pound took a stand against interest his Cantos in early 20th century it was not on grounds of any perceived moral injustice rather than because business investments were in his view taking away the money that had traditionally been used for artistic patronage.
By early 21st century the morals of charging interest seems to be striking back. Of course, the ethical dimension has never really disappeared – if anything, it had only became latent. There are usury laws in the United States, stating upper limits on interest rates that can legally be charged. And even where loan-sharking has been legally tolerated, it has carried a social stigma akin to prostitution and gambling. However, now there seems to be something more than that. There are fierce public debates about morality of SMS-loans in several European countries, debates that seem to be spilling over also to high-cost consumer loans and credit cards. Quite regardless of even whether the interest is high or not, there’s a growing concern about immorality of lending money at any cost to a person who is likely unable to pay it back – which was the root of the US sub-prime crisis. I think it would be a mistake to dismiss those discussions, articles in literary magazines and newspapers, and books like Atwood’s Payback as something that is, at best, happening at the margins of global finance and having no real impact on how the markets work. As le Goff has argued, it was the emergence of the concept of purgatory that made it possible to pursue a career in finance in medieval Europe without becoming an outcast and forfeiting one’s hope for eternal life – something that initially appears to have nothing at all to do with money or banking. So it may well be that the foundations of the economic world order for the next few centuries are being debated right now without most of us even noticing.
