Cold Hard Logic

We have a new word of the year, courtesy of the eminently qualified people at Merriam Webster, who have pronounced Dr. Steven Colberts phrase truthiness as the embodiment of this annus horribilis. Those of you unaware of the good doctor's work, truthiness is a satirical term which refers to person who claims to know something intuitively, instinctively, or "from the gut" without regard to evidence, logic, intellectual examination, or actual facts. This kind of evocation is a constant factor in American politics, it being just about the sole kind of justification the White House has ever put out for any of its policies.

The word has been chosen at an appropriate time, because I also am under siege due to my logical approach to life, being told to advocate something else then cold rationality in my daily interaction. Now I think it's fair to say that cold rationality is one of my strong points, and that it is one of the aspects of me that I actually like. I don't like doing or thinking things that have no connection with reality in real world situations. I'm not dismissing the power of imagination or the utility of a flight of fancy (who doesn't indulge in those) but I don't think decisions and words should be wasted without regard this requirement.

Others would disagree suggesting that I should replace my logic with...Well they haven't been forthcoming about what I should replace it with. I think the alternatives would either be more gut instinct, more random behaviour and less planning. An adaptation of truthiness if you will.The value of spontaneity is something that I can appreciate, and it really is something that I don't do a lot of. It might be just the way I'm configured but I also feel that I don't have the people around me to let me be spontaneous in a meaningful way with constructive results. Saying silly things has never appealed to me; I'd rather be actually witty or telling jokes which I flatter myself but I think I'm good at playing with words instead of doing silly things which I can't do because I have the grace of galloping hyena.

In the end though I'm comfortable with what I am, I like being rational, and thinking things through before committing myself to anything. It's what I'm used to doing, and it seems idiotic to resile from a position that is eminently rational to a position less rational because of no articulatable benefit. So till the case is better made, I'll be staying the way I am.

Lead, Follow or Get Out Of The Way

I've been contemplating my passive interventionist approach to leadership these last few days. My 'method' loosely put is that I don't like to take the lead from the outset in any endeavour. There are always those who see themselves as in command, or have done the necessary work or effort to deserve command out of a sense of seniority, and so I prefer to take up a number two position . This perhaps ties into my belief that real power often accrues to those who are the men behind the throne, although often they can bear the brunt of failure as well.

More often then not though, the situation is dynamicly leaderless due to it being social or haphazardly organised (class group presentation) and I take charge out of a sense of frustration. I start passive if I can afford it, letting people run their arguments and ideas together to get a sense of all the possibilities that the discussion can head down so that we have an appreciation of the full spectrum of opportunities available for us.

I find this awareness of the full spectrum tends to bring progress to a rather grinding halt. The more possibilities people find, the more scope for error there becomes and the more averse they become to advocating any specific course. This is usually my niche, for I'm very good at advocating a particular path to proceed down, without finding myself prone to prevarication.

I recall reading an anecdote, probably somewhere on Slashdot, where a person was relating that they had gained a promotion becuase they were a good decision maker. This they were told, didn't mean that they made right decisions or that their decisions were the best possible decisions, but that they took decisions with the best mix of timelyness and effectiveness and that the decisions were well done as decisions, as opposed to the brilliant resolution of the current dillema. The notion being conveyed was that you can be taught what the best decision in a given set of circumstnaces is, but you cannot be taught how to find that decision, how to make that decision and how to abide by them.

I get very quickly frustrated at the circular discussions that can quickly develop amongst people who are not able to agree on any position or agree on what position they hold. I see it always as quick rational analysis of what position to hold, what its key arguments are, what peripheral points can be negotiated and how sustainable the position is overall. All that's then left is trading these jigsaw pieces around until everyone has a puzzle that they enjoy the sight of. Not difficult, not complicated and there really is no need for it to be time consuming.

I find that this style of decisive leadership has two results. Firstly people are quite greatful that someone is making a decision and they tend to agree with what I've suggested unless there is another person with strong views and a reasoned case, in which situation me and that person usually hammer out a compromise that is acceptable to him and therefore to all. The second is that people tend to resent it, because (I speculate) that it seems to be overly efficient and too ruthless in preening their ideas and contributions to make them fit into a coherent model that deals with the problem we actually have, rather then the problem they want to have.

I'm not sure I'm willing to change it, though I've made efforts to involve others more and to keep soliciting their feedback on a more continuing basis especially to make sure that the solution is still functioning rather then a paper plan. But at the same time I'm averse to mindlessly reviewing decisions we've already made without there actually being any new information that would justify such a review, and I get irate when people attempt to waste time doing this..

A delicate balance to be sure, and one that I shall have to strive to be more concious in maintaining.

This is Fox News

We recently got Fox News at home, the first chance for me to get a glimpse at that much reviled channel on the American right wing, which is an attempt to counter that noted allegation that reality has a liberal bias.

It's a very interesting channel to watch, and as a general trend it's probably getting as much air time at home as the proper news channels such as the venerable BBC News.

You may have rightly gotten the impression that our household takes it less then seriously, but it is hard to justify coming to any other conclusion about it. I have never seen as deliberate attempt to spin news as entertainment, and to keep it simple and stupid so as to not confuse the recipient too much by actually supplying them with information.

The formula itself is quite simply dissembled, there are many anchors, the issues are covered in a banter format and issues are dealt with frequently but always in tiny doses, measuring at most a few minutes. There is no attempt at indepth discussion, comprehensive analysis or the frequent procurment of experts to provide a depth of analysis that the news anchors are themselves incapable of providing.

The end result is news lite, an attempt to focus on inconsequential stories and a gloss on the important ones to treat them in a entertaining rather then substantive manner. It barely deserves to be called a news channel, but it certainly is enjoyable to watch, especially if you're actually informed on the issues they are presenting without any attempt to convey information because you can focus just on their slant.

I just wouldn't actually reccomend it for anyone who isn't informed, and given that the vast majority of the American public is woefully informed, Fox News is a rather depressing phenomenon.

The Law on Financial Derivatives

Sometimes inspiration can be found in the most surprising places. Sometimes it comes from the most obvious, just when the most obvious was looking like the most despairing. It seems miraculous, almost incredible, but I've found something in a University of Hong Kong class that actually interests me greatly.

This miracle maker is the area of financial derivatives. Now normally financial products don't excite anyone, except perhaps desperate insurance salesman, investment bankers who want to make partner and the individuals who share Li Ka Shing's asset class, so it is rather dubiously that I looked initially at my own interest. The motivation is simple: derivatives are actually incredibly nifty, effective and the first area of substantive intellectual challenge that I have encountered on my course.

A financial derivative, for those who are wondering what the hell they are, are things like options, futures contracts and more complex creatures such as swaps and credit derivatives. Now the idea essentially put is that it allows low up-front cost gambling on other things such as bonds and equities, so that people can get the benefit from being invested without actually putting up the cash upfront. In market savy Hong Kong I should really have to say no further [and in some areas like covered equity warrants, Hong Kong actually has significant retail activity, unlike a lot of other countries]

The simplest to explain and the most fundamental building block of the derivative market is the option. The option is a document that entitles the holder (upon the payment of a premium) to buy a share or a bond when it reaches a certain price within a certain time frame. The idea is that you have an option to buy 1000 shares at $2 in the next 6 months. After 2 months the price rises to $3, you can then exercise the option, and be put in the position as if you had bought at $2 and sold at $3, realising a thousand dollar profit. Normally this would have required you to actually buy a 1000 shares at $2, costing you $2000. The option on the other hand would probably have traded at considerably less then that, meaning that your actual return on money is substantially higher [return rates of a 1000% are easily doable given the right share option and market volatility]. Of course the flip sides is that if the market goes down, your option [after 6 months the share is only worth $2.50] is totally worthless as you would lose money if you exercised it. If you'd bought the shares you would at least have an asset albeit one that had depreciated in value.

What I really wanted to share anyway, was the satisfaction that comes from finally having a direction to which to apply my energy, and to have a topic that encourages me to find out more by myself, and can reward endeavor with depth even if in the end its an aspect of financial products and risk management, and not really that complicated as an issue of law. It's just good to find something that can drive that level of interest for me. Last year Public International Law and Company Law helped a great deal to drive through the year for me, and in the year before Tort played a very similar role. It's nice to have something like that back.

Sidenote: For the one lawyer that doesn't read my blog anyway, options were that weird thing in Vandervell (No.2) v. IRC and is how they did the mysterious vanishing act with the shares that were held by the RCS. That might not be of much help now, if it makes anything clearer, but I think I finally understand what the hell was going on there. And its probably likely as a matter of financial derivative law, that the court there got the decision abjectly wrong in its legal treatment of the option. I know, who cares.