"The Troubled Man", the last Wallander novel

Henning Mankell died in early October at the age of 67.  He was a prodigious writer of plays, essays, novels, and was most widely known for his series of Kurt Wallander mysteries.  Many of those were read here over the years.  The most attractive part of reading a Wallander novel was more the character development of the many nuanced Wallander than the riddle of any mystery.

"The Troubled Man" was written in 2009 when Mankell was 60 and published in English in 2011.  It had not been read here, and was picked up a few weeks ago in response to Mankell's death.  Not by coincidence one could think, the fictional Wallander was 60 in this intended final novel of the series.

Shortly before the end of this novel, Wallander begins writing a long description of the crime just solved, which evolves into something much more.  "It wasn't long before it dawned on him what he was really doing.  He was writing about himself and his own life just as much as about Hakan von Enke(a character in the novel)."  Could the twist have gone the other way as well, between author Mankell and character Wallander.

Even more than other books in this mystery series, this one focuses on what is happening with Wallander's life.  It seems to be as much a meditation on aging as it is the best historical fiction that Mankell has ever written.  Wallander broods, Wallander always broods, about where he could live as he ages, his lack of close friends, his fear of loneliness, his fear of pain, and his worst nightmare, Alzheimer's, which during the course of "The Troubled Man" he fears is beginning to build within him.  This is a thinking person's mystery, both in terms of the character development and the story itself.

Mankel himself was a person with wide interests.  One could say that he was the Vanessa Redgrave of Sweden as he was an outspoken supporter of the Palestinian cause and ventured around the world as a social activist to support what he viewed as open minded and just policies.  He spent at least half of each year in Africa, mostly Mozambique, and was head of the national theater there.  He made his mark in many places and spent most of his Wallander series' earnings on charities, primarily charities for children in Africa.  His Wallander series was entertainment that is closer to real literature than any mystery series going.  "The Troubled Man" could even go over that hurdle.


Postscript:   The title, "The Troubled Man" does not refer to Detective Wallander.  It refers to a fictional 75 year old former commander in the Swedish Navy who was involved in a tangle of spying between Sweden, the Soviet Union, and the United States in the late 1970's/early 1980's.  That is the setting for the novel, and the origin of the intrigue in this historical fiction.

The Republican candidates --- why are they running?

After yesterday's post with brief comments on Wednesday's Republican debate, a natural follow-up is brief comments on why each candidate has chosen to run.  Each one, of course, hopes to become President and thinks that they should be.  That is a reason for pause, and this is an interpretation of that hope.

John Kasich --- He's running to be on someone's ticket as the candidate for Vice President.  He's from a crucially important state in most Presidential elections, and he talks incessantly about Ohio in every debate.  If anyone cares about experience, he does have some credibility as a long tenured elected official in Congress and in his state, and would almost surely have more experience there than any presidential nominee that he was paired with.

Mike Huckabee --- One could guess that he's running for the attention that he enjoys so much and the chance to use that celebrity status to continue his commentator roles and beef up his speaking fees. He of course would like a cabinet post, but unfortunately there is no Department of Suspect Conservative Christian Church Services.

Jeb Bush --- He thinks that he has a chance to be President and is the best candidate.  While he does not have his older brother's difficulties saying the wrong words or mispronouncing them, he is a lazy speaker, with his "stuff happens" comment being just one of many examples.  When he starts speaking, the first thought is, unfortunately for him, "be ready to be bored".  He has no attitude, no edge.  He's falling further behind and if he does not pick up the pace by the time South Carolina rolls around he may be in trouble.  In his back and forth with Rubio in the debate, to some he may have come off as a bully.  All that said, if he can hang in, he can still be the establishment candidate, which strange as it may seem now could be a positive as the middle innings of this contest arrive.

Marco Rubio --- Here is a clever and on the ball speaker who is way ahead of himself in terms of knowledge.  Can anyone imagine this young family man who apparently can't balance a checkbook being involved in running our economy or negotiating with highly educated and experienced leaders of our allies, much less China and Russia,  Rubio has no fear and that has served him well so far in state politics, but that is the scariest thing about him when contemplating a President Rubio.

Donald Trump --- A touch of megalomania here, a dash of grandiosity there, and always a New York attitude, that package has worked well for him with bankers and the real estate industry. How well that would travel in the political world is to some a big question, while others conclude that his candidacy is a bad joke.  He has no shortage of confidence and is a tenacious worker and builder, but a presidential race, even just a race for the nomination, is a long haul. He's definitely running for President, but will he have the staying power or just get bored at some point when he no longer gets the attention that he craves.

Ben Carson --- Carson himself said that he had no ideas about running for President until hundreds of thousand of people approached him to do so.  Luckily he did not get mauled.  At the debate Wednesday he ran through a bunch of numbers about his "economic plan", ran through them fast as if, having memorized them, he was afraid he would forget. To the best of the ability here to understand his rapid recitation, it made no sense at all.  He finished reciting and looked pleased, case closed.   He is serious about running for President but he gives the appearance of being the most unpredictable and quietly uninhibited extremist running who appears to have a chance.  One thing for sure, he appears to be supremely confident, which he certainly would have needed to be in his career.

Carly Fiorina --- She does think that she should be President, but it is unclear what qualifies her.  She has no respect for the truth and no ability to apologize for, or just restate, gross misrepresentations when pointed out to her.  Running as a "secretary who made it to CEO" says it all about how disingenuous she is.  She is from a privileged family whose father was Dean of Duke Law School and once an Assistant U.S. Attorney General.  She attended Stanford.  She did rise in business to head of HP, but it ended badly for good reason.  It does not seem possible here that she will make it through South Carolina or any of the southern states no matter how hard she tries to play the gender card.

Ted Cruz --- He views himself as the most capable speaker of all candidates, of all time really it can seem, but the question is whether he is running for now.  With his bulldog arrogant attitude, he may have made too many enemies in his own party.  At 44, he has time and he has a sinecure in the Senate given the sad state of politics in the otherwise wonderful state of Texas.  Could he break through?  It's not impossible for the Republican nomination but it is unlikely that the chance of a loss to Hillary Clinton in the general election would burnish his resume.

Chris Christie --- Like Kasich, he is running for a Vice President slot.  New Jersey can be a swing state and he has worked on developing supporters with money like Sheldon Adelson, which would not hurt any running mate.  His gift for gab and his sense of humor could be seen as attractive as well by some more studied running mate.

Rand Paul --- Like Cruz, this seems like positioning for the future.  He likes his own ideas immensely, but they are difficult to explain and add up.  Maybe he's on to something that other Republicans could identify with eventually, but it seems that whatever message he has needs much more fine tuning.  Combining a libertarian approach to social issues, an isolationist approach to foreign policy, and an extreme bias against Federal government regulation is bit of a mind twister for many Republicans.  Maybe he will step out of the race at some point and let Bobby Jindal into the prime time bunch.  That could certainly be more entertaining to work with.

Fortunately for the Republicans, it is early in the nominating process.  At the moment, where this is leading is not clear but it is frustratingly entertaining.

Last night's Republican debate - brief observations on the candidates

John Kasich --- "two sudafeds, two espressos"

Mike Huckabee --- "bold stand against disease"

Jeb Bush --- "where's W's smirk"

Marco Rubio --- "high school class president"

Ben Carson --- "where does it hurt"

Donald Trump --- "Foghorn Leghorn"

Carly Fiorina --- "fact free"

Ted Cruz --- "Moderator Masher"

Chris Christie --- "from New Jersey"

Rand Paul --- "Filly Buster"

Financial stocks fly at the end of the day

Any portfolio with a concentration in financials must have sent its managers home early today as a reward.  After the Fed apparently indicated that December would be a day of reckoning for any interest rate increase decision, at around 2:30pm many banks jumped, carrying the rest of the financials with them, and eventually most of the market.  As a few notable examples, among large banks Bank of America was up 5.4%, Citibank 4%, JP Morgan 3%, and Goldman Sachs 3%, while many smaller banks really popped, among those followed here Pennsylvania based CUBI up 4.3% and Colorado based FIBK 6.1%.

The other notable big stock rise was in technology, by market cap leader Apple, up 4% based on their earnings report but while the rest of technology rose, it was more or less a normal day. Among indexes followed here, small caps outperformed the S&P by 2 to 1, somewhat of a relief as the extended market has been under pressure in recent months.

With a tendency to follow financials here, it was something to smile about before tonight's Republican debate and the simultaneously broadcast Mets/Royals World Series game.

Will either bring this type of satisfaction?

""Dementia Is Draining Families' Bank Accounts"

This is the title of an article on the front page of the New York Times today.  The article's intent is to show the significant impact on the income and assets of those families who have someone with dementia to care for.  It makes the point that the cost is more significant by far than the costs of cancer and heart disease.  Dementia can be nominally higher but that is exacerbated by the fact that the care needed for dementia is not covered, for the most part, by private insurance or by medicare, while many aspects of cancer and heart disease are.

If anything, the article understates the challenge.  It does give specific examples of various families' experiences, but the numbers don't completely add up.  The article's writer suggests that the national norm for home health care aides is $20 an hour and she also makes the point that dementia can be a 24 hour process, with needs extending through the day and night.  There are different varieties of dementia and different individual experiences, but just doing the math on the most demanding care need, 24 hours a day times $20, if that is the right number, and the cost can be much much higher than anything mentioned in the article.  Home care costs needed from caretakers can have many variations of course, as some dementia patients may sleep soundly for 12 hours a night and be docile in front of the television during their waking time, while others may need to get up almost every hour at night, and have many anxiety based questions during the day.  It must be assumed that many of those afflicted need reassurance and interaction, conversation and outings.

There are other non-monetary costs that are obvious, and the most common is the health of the family members who act as home caregivers.  With an active dementia case, it can eventually become clear that a caregiver agency or dedicated independent caretakers is not an option.  They are necessary. There is always, for some, the option of placing the dementia patient in a nursing home or special dementia facility but, while less expensive than home care, it obviously involves removing the patient from the place that they are most familiar with, not a positive thing one could guess.

The impact of this on middle class families and their financial situation can be devastating.  The impact on the poor is significantly mitigated by Medicaid if they can find a facility to take in their loved one(it should be noted that an unknown but significant portion of the facilities who cater to the poor do not provide anything close to adequate care but charge full freight to Medicaid, that's called fraud).  For those with resources, it could require going back to the drawing board on long term financial plans to take into account various outcomes.

This is a subject that will only affect more and more families, and there are no easy answers as to how to prepare for this.  Long term care insurance is the one promoted option, but when push comes to shove, the payments can end up being paltry compared to the cost if a family chooses home care. Long term care insurance can be designed to offset approximately 70 to 80%, on average, of the costs of a patient being in a specialized nursing residential facility, aka nursing home.

Why was this not such a big deal in the not so distant past.  Maybe it was, but there was no ubiquitous diagnosis like Alzheimer's or other forms of dementia.  It was just "Dad's getting cranky and tired" or "Mom's getting forgetful and depressed".  Families were less disbursed and communities were more long term local, so familiar and well-intentioned care was more available.  Still, the question could be and is asked, "is the dementia phenomenon actually on a significant multi-year rise for some undiscovered reason?  What is that reason?

For those already in its clutches, it is too late.  For their children or grandchildren, there is crucial research that needs to be done.

The IRS...oh no

We do not necessarily rush to pick up phone calls.  So many are nuisance calls, even though we are on the "no call" list supposedly.  That means periodically picking up calls on the message machine, but even with that we are not particularly diligent.

Late this afternoon the message machine was checked after not being looked at for three days.  The first two messages were from the IRS, saying that they had filed a lawsuit against yours truly and that I was required to call the IRS immediately.  Each phone recording was the same voice, but they left two different numbers to reach the IRS.  This did not sound right in any way, yet just those three letters, IRS, were discomforting.  Walking into the kitchen to fix dinner, I paused, turned around, picked up a phone and called our accountant.  Thinking about this at all was not something that was needed, and is just the type of thought that can enter my mind when my goal is to go to sleep.

He laughed when he picked up the phone as I explained that while this was likely a scam, I was relieved to find him in his office.  He said, "you too."  When I mentioned that this seems like a trick to find out information like a social security number, he said that usually it will be an effort to get someone to get out a credit card immediately and pay the "IRS".  Remember the old MRS trick, which is now why we pay the United States Treasury.

It certainly could be many things, like the phone number is in Nigeria or some remote place, and returning the call would cost a fortune.  Who knows, but the scam artists who say that our credit is past due or our auto insurance bill needs to be paid now can be easily disregarded.  Mention the IRS and it is attention getting.  Impersonating a government agency must be a federal crime, which means that the calls are certainly coming from offshore.

Mets and Jets

What a time it is for Long Island, New York,  Here in the early 1980's there became a Met's fan as the ticket prices for the awful team at that time were so low and the 7 train ran right out there by my poor man's Manhattan studio.  The Jets followed as well, not so great a team in the 80's but accessible. The Giants and Yankees became home town teams as well, still nothing like the Jets and Mets.  We have lived here on Long Island for years, and they are our teams.  Good aberration now.

Beautiful autumn day

Even as I wonder why we live in this town that does not represent us at all, the beauty of the place can be stunning.  The trees are all turning into yellows and reds, some still to come.  The air is completely cool and fresh, meaning no more summer humidity for now.  Driving around town listening to music, wishing K was with me, there was Taj Mahal singing "Six Days on the Road" and some other song that was unfamiliar but worked by Johnny Paycheck.   Taj Mahal, familiar back then, saw him with John and others at the Fillmore East with B.B. King and John Mayall in the late 1960's.  What a day that was, getting yelled at with a waiter chasing us out on the street at the 12th street deli for not giving a big enough tip.

This post started with the word "wonder", and it turned into "wander".  I must get K out with me.

The Mets are still alive

The Mets won their elimination game to the National League pennant and a trip to the World Series. First New York vs. Los Angeles and now New York vs. Chicago.  These are big city games.  We wait for tomorrow at Shea, or forget me Citi Field.

Last night the Mets were "amazin".   It was the first game of the playoffs that I attempted to watch and would have been the first full baseball game that had been watched here this year.  That did not exactly happen as the tension and the advertisements between innings broke my stride after 6 1/2 innings so Noah Syndergaard's seventh inning success in relief was missed.  Back by the eighth, I finished the game.

During the break, Michael Lewis's article on Tom Wolfe in the November 2015 Vanity Fair, "The White Stuff", took center stage in the computer room/reading room downstairs.  It was entertaining and  well worth the time.  Tom Wolfe was never a huge favorite here, but Lewis's take definitely heightened his appeal. As one takeaway, speaking about Wolfe's early life Lewis writes, "The notion of roaming the earth and groping toward a purpose in life now seems ridiculous to 22 year olds, but that's the notion Wolfe more or less embraced."  Interesting, that was "embraced" here in the the early 1970's, and don't tell our 22 year old daughter that what she is fully focused on these days is something "ridiculous".

The game was dramatic and full of tension for a Met's fan, no doubt contributing to the need here for a break.  The first five innings each had make or break moments for the Mets as the Dodgers had ample men on base.  Without his best fast ball, Jacob DeGrom managed to keep the Dodgers scoreless after giving up two runs in the first.  Daniel Murphy, the dedicated to Jesus man on the team, won the game on offense.  He was essentially it.  Jeurys Familia, a closer, pitched an exceptional last two innings retiring all batters.

It was a well played game, with the only hitch being an outburst by Dodgers right fielder Andre Ethier in the Dodger's dugout, as for some unknown reason he began yelling at manager Don Mattingly in one of the middle innings.  It seemed to quietly upset the whole team as they tried to ignore him, did not look at him, when he walked up and down the dugout among them.  I doubt that he will be part of the team next year, especially if Mattingly stays.  The Mets manager, 66 year old Terry Collins, the oldest manager in baseball, is having the most successful coaching year of his long baseball life, and he seems to deserve the gratification that brings.

Here comes Chicago tomorrow, and game watching here may continue in fits and starts.  20 minutes from this house on the Long Island Railroad, a trip to Citi Field, the Met's home, would be a treat but looking around for scalpers, cash in hand, is not something that would be enjoyable.  It can't be done alone.  Oh, for those days of corporate tickets and clients to entertain, but on second thought the trade-off would not be worth it.  Done that.

Another raucous day in U.S. equities

After the Dow's 157 point drop yesterday, it was followed by a 217 point rise today.  At one point yesterday, among the basket of more than 60 stocks and 10 ETF's  that are followed closely here, the three top decliners were JPMorgan, Walmart, and Mitsubishi holdings, and biotechs and small caps were down markedly across the board.  That seemed like a fairly good proxy for a sustained directional decline in the U.S. and Japanese markets.  It was not to be as today the top three gainers among that basket were Citigroup and two biotech ETF's, all up more than 4%.

The most dramatic move of the day came at Goldman Sachs, which reported earnings that declined 38% year over year and revenues that declined 18%.  The pre-market opening price was down over 1%, yet Goldman ended up the day with a rise of over 3%.  That's a clear message that lead steer investors price stocks while the media and pundit driven traders do not.  That was refreshing to see. Goldman's significant declines were led by low P/E trading results while high P/E investment banking fee income gained.  JP Morgan recovered its loss from yesterday while BofA was up as well, both up over 3%.  Other major stocks up over 3% today included Fiat Chrysler, Adobe, and Pfizer, with Johnson and Johnson was just below that threshold.

The most attention getting loss of the day was a decline at Netflix of over 8%.  U.S. subscriber growth lagged investor expectations and the anticipated spike in international subscriber growth may still be a few quarters away, if all goes as expected.

What comes tomorrow in the market will be telling in the short term.  A positive day before the weekend would be an endorsement of today's rebound that would make for a good weekend, especially if the Mets manage to win tonight. In the longer term this ongoing significant volatility can make one wonder if there is a trap door under the market waiting to pop open.  That's a worry that apparently keeps some investors awake at night. So far, the economy does not seem to warrant such an outcome, but investor psychology can at times ignore facts.

In a sense, this is a set-up for further gains.  As just said, tomorrow will be interesting.

"A Common Struggle", a book by Patrick J. Kennedy and Stephen Fried

"A Common Struggle" is a book about addiction and recovery, the mental health care system, and the laws that govern that system.  It is also a story that follows much of former U.S. representative Patrick Kennedy's political and personal life and tangentially that of some of his family.

As the book begins one could think, "oh my God, he really did write this book", as much of the beginning chapters are filled with simple childhood remembrances.  The book really has two intertwined parts.  The first is a story of one Kennedy and his immediate family, as told by Patrick. The second is a study of addiction recovery, and the flaws in the healthcare system that make the best information and care difficult to find.  To quote the book, "Mental health parity and addiction equity isn't only about fair and equal insurance coverage.  It's about the world of mental illness treatment and the world of addiction treatment --- each of which grew from what felt like a specific form of being ostracized by society --- working together much more effectively."  This aspect of the book no doubt echoes Patrick's thoughts and benefits from the talented journalist Stephen Fried who has covered healthcare, mental health, and addiction for much of his career.

There were observations for the reader that may not be widely known due to the split between the two supposed different disciplines of treating mental health and addiction.  It was pointed out that the recurring cycle of addiction is similar to the cycle that exists in bipolar II, a less crippling form of bipolar disorder than what is now known as bipolar I.  In fact, when described in the book, the swings between depression and hypomania referred to elicited the observation from Patrick, "That's me."  As an interesting aside this type of hypomania was mentioned as "often sometimes hyperproductive". Put that disorder next to alcohol, oxycontin, or another drug and the effect is exacerbated, on the ups and downs.

When a patient with concerns discusses a potential addiction problem with an internist or other medical professional, they are often told that they are "self -medicating".  Self medicating what, one could ask?  Yet more often that not when consulting a psychologist or psychiatrist for the answer to that question, the only playbook that comes out is the one for treating addiction with the few drugs related to that, and the emphasis on AA, NA, or other twelve step programs.  There can also be the guilt attack method of treatment, as favored by supposed remedy stalwarts like Hazelden.  The possibility of co-existing mental health diagnoses are often, or largely, ignored.  "A Common Struggle" takes on this anomaly in treatment directly and thoughtfully.

Patrick Kennedy was an active and, in the area of mental health in particular, an effective congressman.  At the same time, he was going through the hard work of disguising and hiding his various addictions, most prominently to alcohol and oxycontin, but also including at times cocaine, adderall, and other medications, prescribed or otherwise.  He had multiple visits to the Mayo Clinic and other treatment and rehab facilities, all carefully guarded by his staff and his family.  He had sober periods and then relapses.  As he writes, "like many of us struggling with addictions, just when things begin to look promising, we sometimes sabotage ourselves."

As the book says at the beginning Chapter 18, a passage which works metaphorically so well that the professional writer Fried must be responsible, "Both addiction and depression come in cycles of waves, which you think you have adjusted to until a bigger one knocks you down.  It isn't all that revealing to chart how the last wave hit; it's more important to understand what you were doing out there in the water in the first place."

Kennedy's biggest public "wave" moment came in May 2006 he ran into a police barrier in front of the Capitol building at 3:30am one night, and it became national news.  Apparently in this case it was due to a combination of his usual medications, a large dose of Ambien as a sleep aid, and a just prescribed medication for stomach problems.  He had, and has, no memory of the accident or what preceded it.  The accident led to an examination of his addiction problems, and he openly and honestly discussed them with the press.

That was not the end of his problems, but it was perhaps the beginning of the end.  After 16 years as a representative, he left Congress at the end of 2009 not long after his father's death.  After that he began a relationship that turned into marriage in 2011 and a family, while beginning a period of sobriety that lasts to this day.

This was a book that was enticing here but for which there were no high expectations.  While all of the writing is not perfect and some of the broad Kennedy information about their privileged family is at times tangential to the purpose of the book, in fulfilling that purpose "A Common Ground" is exceptionally well done. What a surprise, and a good one.  The collaboration between Kennedy and Fried most certainly worked.

Morning short takes on selected news

---The second season of "Fargo" began on FX channel last night.  It remains the same quirky and off beat show.  The characters all seem zoned out, in a way that may be closer to real life than is apparent at first glance.  If only the show was on a cable channel that had no advertisements it would be exceptional.  It's still a program that definitely will be watched if the Monday night 10pm time can work out consistently.

---Tonight's Democratic debate will surely be odd.  Of the five participants, two are running almost completely invisible campaigns.  Jim Webb and Lincoln Chafee have absolutely nothing to lose except maybe the opportunity to appear in advertisements touting reverse mortgages to seniors or veterans.  Martin O'Malley is an attention seeker, outspoken and amiable, but he barely cracks the polls at 1%.  His record as governor of Maryland was far from exemplary although he really enjoyed the job.  Hillary and Bernie are the show, and hopefully they are not overly disrupted by the other so-called candidates.

---The appointment of Jes Staley as CEO of Barclay's could not be a called a surprise, but it is still a choice that causes concern for that institution.  The New York Times business article today describes him as "smooth and quietly ambitious".  Experience here with the JPMorgan veteran would lead to calling him "obsessively self- promoting and manipulative".  He was not viewed as a person of great depth except in his carefully nurtured connections, but he carries on in the world of banking.

---The success of Michael Vick last night as back-up quarterback of the Pittsburg Steelers was a redemption that was watched with interest here.  He grew up in a rough culture in Virginia Beach and he was taken into its ritual behavior in a horrible way, some might say exploited.  He has paid for his poor behavior and it was nice to see him back to his old style and on track at age 35.

The features of the Weekend Wall Street Journal

Every Saturday, a challenge is to remember to pick up a Weekend Wall Street Journal before they are sold out.  It's a well written and entertaining newspaper, not necessarily due to the business news but due to the many feature stories in various sections on weekends.  This week was no exception.

The Review section leads with the article "America's Fading Footprint", a look at the erosion of U.S. influence in the Middle East in recent years.  With the move of Russia into Syria, the role of Iran fighting ISIS in Iraq, and the coalition led by Saudi Arabia to challenge the Houthis in Yemen, this is a timely piece.  While not definitive and being full of quotes from "experts" not known, this overview of the diminished U.S. role is thought provoking and informative.  A book review of "The Rise of Germany", with the article titled "The Follies of 1940", describes yet another another book about the events leading up to war, supposedly an additive book about a historical period read about here often. A profile of Ken Jeong, doctor turned Hollywood comedic actor unknown here, was an entertaining quick read.

The Off Duty section high points this week were, from this perspective, two food articles.  Not going out to restaurants often or traveling at the moment, reading about food is maybe the next best thing, although not close to the real thing.  "A Cutlet Above" is about Milan's cotoletta, which has many variations.  A seemingly reasonable facsimile is available from nearby Nick and Pedro's, with personal delivery from either Victor or Pedro.  Reading this article suggests that actual Milan versions are far superior which, clue, of course they are.  "Bangers and Mashup" is primarily a look at the traditional English breakfast.  What a treat that can be.  In the late 1980's, there was a period of four years during which working for a bank in Corporate Training, then Strategic Planning, and finally Investor Relations departments led to almost quarterly trips to London.  The not too expensive corporate standby hotel, name not remembered, was northwest of Marble Arch, several blocks beyond the park and into a residential neighborhood. It was a perfectly fine hotel, and travels there were almost always alone, a fact that was enjoyed.  Heading down to a major meal each morning there was something to get out of bed early for, the comfort food breakfast with newspapers at hand and constant service.

The Sports section offers an unusually good feature about Zack Greinke, the Los Angeles Dodgers pitcher who took on the Mets last night.  Watching only a few middle innings of the game was a chance to see him for the first time and watch him compile his gaudy statistics.  The article was about his game preparation and his unique role in positioning all fielders when he pitches.  For a baseball story it was interesting, and in the Wall Street Journal?

The Journal is missed in print form most days during the week, but the weekend edition is one to hold and fold.


Postscript:  During my career, there were many trips to London.  Once responsibilities increased, there was rarely a time when a relaxed breakfast was an option.  Dinners with investors and early morning meetings at company offices ended that practice, but those late '80's times are a good memory.

Politicians and their idea free focus on the middle class

In an article about Reid Hoffman in the October 12th New Yorker, an article that goes in many directions, there is an excerpt from an interview with John Lilly, a Silicon Valley investor and partner of Hoffman, about the concentration of wealth in the country and more specifically about the concentration enabled by the technology network.  Saying that he suspects that the twentieth century was an anomaly, he goes on to say, "There was no middle class, then there was a middle class, now we're back where we started - it's hollowed out.  I don't see where the middle class is going to come from."

All of the presidential candidates in this primary talk about their concern for the middle class and how they will focus on it.  What will they do?  Wait a minute, that must come later.  It will be their focus.  We do know that.

Many talk about education, and that surely is important but not new stuff and not something that will create change within any presidential term.  There is talk about stepping up infrastructure spending, often mentioned in this blog, but the real benefit of infrastructure spending will be the benefit of the infrastructure once it is built.  It is necessary, but the jobs associated with infrastructure spending today will not be as plentiful as in the past or as relatively high paying as in the past. The higher minimum wage debate is always on the table, but implementation for other than attention getting publicity is not yet simple.  A meaningful but gradual rise in the minimum wage would be beneficial, but it is not an immediate game changer.

There is of course talk of structural change.  Technology, globalization, and centralization have all diminished the middle class stability that once prevailed.  Change is much quicker, and innovation is much faster.  Politicians don't have an answer to this, and in fact must be on the bandwagon of innovation and entrepreneurship, no matter how disruptive those characteristics may be in practice. Some politicians embrace economic nationalism.  Retreating into this country will hurt the U.S. more than help it.  It would restrain global growth as well which would unwind a century or more of progress.  This kind of talk is compelling to some, but not practical.

The middle class as we know it began in the early 1900's and was truly built out in the aftermath of World War II.  The United States was the only powerful country left standing, with industry intact and a population ready to sacrifice to just get back to normalcy.  That was the goal for most and aspiring to great wealth was far from of the minds of many, even many business leaders.  The safety net of social programs was in place from the Great Depression era.  The interstate highways began to be built, more rail lines were added, cities expanded public transportation, and the automobile industry was becoming an important employer and end product user.  The world needed U.S. products, investment, and expertise.

With the out of control inflation of the late 1970's, oil shortages, and the earliest beginnings of the corporate raider mentality, ever so slowly the outlook for the middle class began to fray. In the beginning of the 21st century the results began to show up clearly.  The concentration of wealth had begun to widen considerably, and there was a fast growing category of what may be called lower middle class, defined here as those people who view themselves culturally completely as middle class but who live paycheck to paycheck and now job to job, patching together their lifestyle with multiple family wage earners.

The most talked about aspect of this wealth issue is of course the concentration at the top.  That is a fact now.  The technology titans, the financial industry leaders and quants, and the cult of the CEO and their top minions have led to this top heavy structure.  Broadly the public and the politicians lay low on technology, are open to the CEO cult for all who are deemed to perform, but resent the financial industry intensely.  It's an easy target, but no more a part of what has happened than the other components.  Creating more laws to penalize finance without addressing other issues does little except make capital markets less liquid and credit less available to small businesses.

What is missing from the politicians are any real answers.  One starter is tax code change, but not the things the pols always mention like a flat tax that are non starters from a legislative point of view. First, the Alternative Minimum Tax must be scrapped, must be.  Designed years ago to capture tax from the extremely wealthy who managed to pay little, it was not inflation adjusted and now does not touch the real wealth in the least.  It is a painful and inexplicable tax on the middle and upper middle class, capping out their aspirations to do more.  Secondly, there must be cost of living adjustments to tax rates.  We have the technology to do this.  A family that has an income of $80,000 in a prosperous urban center is in an entirely different situation from one with the same income in many parts of the south, midwest, and southwest.  Why do those people who live in the most job productive urban centers get taxed down to the point of heading down toward lower middle class?  It makes no sense. Third, as a few candidates are advocating, managers of investment funds should pay regular income taxes on the earnings from their business, not capital gains rates.  The guff about them losing motivation to invest if they don't get preferential treatment is a bluff that should be called.  How can they turn the backs on the amount of money they make, and if they do so be it.  Others will step in. This would not be a huge addition to aggregate tax revenue, but it would be a huge help in having a perception of fairness in this country.

Entrepreneurship, investment spending, education, innovation, and accepting the world for what it is now are part of the solution.  While more transfer payments may be necessary in carefully thought through cases, done more broadly they could lead to a permanent and huge lower middle class, getting by but resentful.  That would not be an attractive political situation.

All of this will not create significant GDP growth in the near term, which is the other element of creating jobs.  Most of the candidates see that as a goal, some see it as something their programs, whatever they are, can achieve.  As long as much of the world is laboring on with little or no growth, there is contraction in emerging markets, and China's growth is moderating, meaning going down steadily, the U.S. will not break out into much above 2% near term.  Growth would be a panacea for greater job growth and even wage growth, but it is unlikely to happen near term.

We await the next wave of innovation and creativity.  That cannot be predicted with any precision, it will likely mean significant disruption, but it will happen at some point and growth will step up. Whether more good jobs with good wages are created that are spread across the wealth spectrum is the question, or will they be concentrated in those areas that are big winners already.

Wow, did this get tedious, and have a less than optimistic tone.  The politicians need to take some risks and step up their game to give the country real hope.

The pleasure of reading a good book review

"Contrary to what newcomers to the city may imagine, New York is a place where circles almost never intersect, except transactionally - at co-op meetings and parent-teacher conferences, or on jury duty.  New Yorkers circulate mostly within their own class and occupational orbits.  Manhattan is a hundred small towns unevenly distributed over some twenty-two square miles of city space."

This is part of a paragraph early on in Louis Menand's review of the much promoted new novel "City on Fire" in the New Yorker.  Menand is an immediate must read whenever one of his book reviews or essays appears in the magazine.  If a book review can be stunning, this one is.

"City on Fire" is set in 1970's New York.  Menand's description of the state of Manhattan at that time evokes memories of personal experience, some of it not too terrific, some of it exceptional.  Can being stabbed and robbed in a Times Square hotel room be called "not too terrific"?  Can late night walking haphazardly on deserted downtown streets with no streetlights and ending up at the legendary jazz club Slugs be called "exceptional"?  Going through the Times Square area at that time after alighting from the bus station at 42nd St. and going north on 8th avenue could lead to a menacing walk that required looking straight ahead and ignoring taunts.  The place felt as if it was out of control.

Menand picks up the tenor of that time and ties it in with the book being reviewed.  He mentions the danger of course, but he also mentions a thriving arts and music scene in the midst of it.  As this apparent "detective story" intertwines the lives of many, it requires a "suspension of disbelief" on Menand's description of the real Manhattan.  "City of Light", as a novel, is allowed to do that and apparently takes advantage of this to detail the lives of many different types of people who live in the muck and barely suppressed chaos of Manhattan at that time.

The novel ends with the blackout of 1977, which is described with a good reporter's style insight. The review then moves to a comparison of the Manhattan of today to differentiate the time we live in now.

At 944 pages, "City of Light" will not likely be read in full here.  Menand sees the first 131 pages of the book as suspenseful and gripping in every way  and more or less suggests that they are worth any reader's attention.  Otherwise he says that the book is 400 pages too long.  Still, he praises the writing style of the author Garth Risk Hallberg.  In a sense he is saying try it.  Get a feel for the time.  Then he writes, "you can always close the book".  This is one to pick up at the library some day.

Fun times on the phone with health care payments systems

Over the past two days there have been at least four hours of phone time spent trying to work out problems with health care payments systems, two of them.  Probably everyone gets to have this experience from time to time.  Frustrating, exasperating, mind-boggling, these are words that come to mind.

The first was with Genworth Financial and their major claims processing center in Lynchburg, Virginia.  Lynchburg is 50 miles from my hometown, so the accents and grammatical nuances of the call center personnel are familiar.  Lynchburg, like my hometown, is not broadly a center of high literacy or education.  It does have Liberty University, but I repeat myself.  Putting their call center in a low wage part of the country, southside Virginia, may be a cost savings to Genworth but in the long run it may not be so efficient, as you will read.

Without going into too much detail, the issue was that payments under a policy for K were not being made, even though an elimination period was already satisfied.  Calls were made periodically over the last month to ask about this, and the answer was that they were still researching the claim.  Asked if they were receiving all of the information from the service provider that they always said "we are researching the claim".   When pressed as to what this meant the responses would be to say that it would be done by the end of the month, what month?, or to stay silent, or to repeat more loudly the same words "researching the claim".  When asked about a supervisor they would promise a call back within 24 hours which rarely came.  An especially annoying aspect of these calls was that they always ended with a scripted "is there anything else that I can help you with?"  The response here was generally something like "are you suggesting that you have helped with something?"

Finally,yesterday afternoon, there was a call back from a benefit analyst who was intelligent.  She knew exactly what was going on when I asked the right question as always.  Genworth was not receiving adequate information from the service provider.  They have now talked to the service provider, I have talked to the service provider, and soon all may be on the right track.

The is a disturbing reminder of those days when Dell moved the great majority of its customer service to India, and all call center reps had finely detailed scripts to follow.  The whole key with that was to wait until intelligent life finally showed up on a call.  That usually took about three hours.

The other time consuming calls here were a lengthy effort to arbitrate between a hospital and an insurance company.  Actually it was a lengthy effort not to arbitrate between an insurance company and a hospital.  Over and over again the insurance company rejected a claim, a claim so simple that the payment due was in large print on one page of the contract with them.  At one point earlier today the only way to settle it, according the insurance company, was for me to fax them the hospital bill, with a cover letter explaining the situation. That was a role that was not appropriate.  No way.

A second supervisor got on the line, and there was intelligent life, once again!  He understood the situation, got the appropriate information from me, called the hospital, and a solution is underway.

Both of these problems described were extremely simple.  The problem was, and is, that the call center reps and even some supervisors do not know how to listen or think.  That is a disturbing, word used again, commentary on the capabilities of many workers or the training that they are given, or not given.

From talking to others, there seems to an epidemic of this type of problem, especially in health care. Such useless agitation.

Technology bubble in the works?

Among the really knowledgeable and experienced observers of San Francisco and Silicon Valley there is a dichotomy among opinions.  Some see a bubble underway with the only question being when it will pop, or go boom as some say, and then are those who are full speed ahead on the business model that has developed around delivery of everything and anything to consumers everywhere with smart phones.

The debate is focused on the companies that are not public, the so-called unicorns.  These firms seek and find late stage private investors to build their business or perhaps sustain it depending one's point of view.  The investors fueling this debate are hedge funds, private equity funds, sovereign wealth funds, family offices, and high net worth individuals, meaning only extremely high net worth folks. Retail investors, you can't play this game, as mutual funds, ETF's, and index funds are not in it.

A question is whether there is too much money chasing too few distinct ideas.  The unhealthy thought process that "one better get in before it's too late" is seen by some but others see this as a highly opportunist period and cite firms like Uber and Airbnb as examples of that opportunity.  What is clear is that this type of, at times, almost blind investing will not work well for everyone.

Certainly the behemoths of the publicly traded industry like Google, Apple, Cisco, and Microsoft are not overvalued.  A newbie giant like Facebook is almost in a class of its own with its success over only handful of years.  The question here is whether Twitter is the canary in the coal mine as even with its widespread brand recognition it is not coming of age.  A bigger question is whether a take down of the industry of late stage private investing would have widespread affects beyond just creating unicorpses, as some refer to potential flops, as the search for liquidity in a such a scenario could pull down the entire market, technology and otherwise.

This story and debate will without question evolve.  Since the Fed has little firepower remaining, there is a crazy election period underway, and a lame duck president will be in charge, it should be hoped that this possible tech market bubble can relax enough to be kicked down the road for a couple of years as happened in the late nineties.  Wishful thinking of course and, at the moment, the market is hopefully pricing in future outcomes.  "Wishful thinking" is said, as the increased share of the market by high frequency traders belies the concept of rigorous analysis.

"a Bruno, Chief of Police novel"

The book "The Patriach" was picked up a few weeks ago after seeing an advertisement for Martin Walker's novels in the New York Times Book Review Section.  Yeah, that was ill-advised as even trusting the actual reviews is difficult to do, and trusting an advertisement is really just a complete guess. What attracted was the fact that this book was set in the Dordogne, had a lead character that was a small town detective in that area, and some of each story was built around the customs and food of that area of France.

Why was that attractive?  Readers of ENS know that two entertaining and favorite book series here are Donna Leon's mysteries set in Venice, the Commissario Brunetti tales, and Andrea Camilleri's Inspector Montalbano books set in Sicily.  Food and culture always have a place in these books, as well as having as close to first rate characters that there could be in this genre of fiction.

Martin Walker has written eight of these Bruno books, as well as multiple non-fiction books about foreign policy that reflect his career, so his knowledge is based on the first hand reporting that he once did as well as where he lives for half of each year now.  "The Patriach" was entertaining enough, and the book was for the most part not at all taxing.  It meant a needed quick break from reading a book that is much more demanding.

In comparing the book to the Leon and Camilleri ones, a notable and not positive aspect is that there is zero humor in this Bruno book.  Maybe it is not representative of the others and it is unlikely that will be discovered here.  It is clear that Walker has created a series that is based on the template of the others but he does not have a light touch.  The main characters in the other books being compared are compelling in the humanity and multi-faceted nature of the protagonists.  It is entirely possible to not like Bruno some of the time, and he is certainly not as interesting.

The book is also a classic of the model of mystery books where everything comes together at the end quickly, brutally, and in a way that could not be anticipated, so what's the fun of it being a mystery.
The other aspect of the book is that Walker shows off his knowledge of foreign policy history, which he is certainly in command of, but if that history is already known by the reader and, as the book offers no added insight, it at times feels somewhat boring.

For some readers the history may well be new and interesting reading, and the descriptions of the food and the small town culture can be charming, but here more interesting characters and more deft writing is needed.  Each to his own.  Others may seriously like Walker's books, as they must since his publisher Knopf has published eight of them and there is certainly more to come.

Leon and Camilleri are simply far better and they became staples here 15 years ago.  The comparisons are too strong.  Others are free to differ.