Some quick observations on my own weight loss

If you read this blog, you know I've developed a little triathlon habit.  Actually, it's a pretty big habit (six races in 2011.)  Anyway, this habit is still new to me -- I began training for my first triathlon in January 2010.

At that time, my weight at a minimum was around 208.  I say at a minimum because I was careful only to get on the scales completely naked and after a bowel movement.  So most of the time I was probably carrying more weight around.

Now I have a body composition monitor and a nifty little Google Docs set up where I smooth out the noise from my measurements.  My trend weight today is 180.8 and my body fat percentage trend is at 13.2%.  So I'm carrying around about 24 pounds of fat or a little less than one pound of fat for every three inches of height.  24 pounds sounds like a lot, but I'm a relatively tall dude.

I've lost at least 27 pounds.  For the sake of argument, let's assume I've only lost fat and not put on any muscle.  Of course, that's ridiculous, but we can establish a boundary.  I've lost more than half of the fat I was carrying around.  That's cool.  But I was carrying at least fifty pounds of fat.  Wow.  My body fat percentage was at least 25%.  If a surgeon had to work on one of my organs, they probably would have had to cut through more fat than the volume my organ occupied.

I'd like to lose another eight pounds of fat.  That would take me down to 9.2% fat if I also lost eight pounds of weight.  I don't know that I'll lose eight pounds of weight, though.  I want some more explosiveness so I'm going to start some strength training.  Assuming I gain a few pounds of muscle, this fat loss would probably take me down to about 8% fat.  So the carnivorous aliens won't want me for their dinner plates.

Anyway, this hasn't all been exercise.  I eat a fairly high-fiber diet that is mostly plant-based.  I have some chronic health issues that suggest I should limit my animal consumption.  I also try to limit my crap calorie consumption to immediately after a workout.  That way the extra calories are more likely to go to replenishing my glycogen stores rather than being converted for long term storage (i.e. fat.)  Of course, the weight loss and diet changes have basically made the health issues go away.  I'd like to keep it that way.

SF Triathlon at Treasure Island Race Report

Just as a reminder, these were my time goals:

• Total: 3:16:40 (oops Math mistake, these add up to 3:06:40)
• Swim: 36:00
• T1: 3:00
• Bike: 1:25:40 (17.5 mph)
• T2: 2:00
• Run: 60:00

Here  are my actuals:

• Total: 3:18:51
• Swim: 43:00
• T1: 4:31
• Bike: 1:28:19 (16.8 mph)
• T2: 2:17
• Run: 60:44

A couple of notes first.  The run was actually 10.5 km.  So that's worth about 2:55 to add to my goal.  Also, I had a couple of racing mistakes.  First, on the bike I really had to use the bathroom.  There was a porta-potty on the course.  I stopped.  It was occupied.  A funny scene ensued where I asked if the occupant would be long who gave a response consistent with him either puking, shooting up or having just shot up.  San Francisco, you gotta love it.  So I held it and went to the bathroom after T2.  I don't know how much time I wasted, but I couldn't hold my bike pace much after that stop.  I hear in longer distances people just let go while still riding.  I'm just not that hard core.  The other racing mistake was I dismounted too early at the end of the bike course and had to get back on the bike.  No biggie, but it definitely cost me 30 seconds or so.

Anyway, I was really pleased with my performance.  I thought my goal was 3:16:40 and I'm pretty close to that.  In fact, with the extra half km of running, I beat it.  Of course, if I had added correctly, I would see that I missed my overall goal and basically the goals in each leg.  But, if I had added correctly, I would have adjusted the splits to give me a goal around 3:15.  3:06 was not a reasonable goal.

So how did the race itself go?  The swim went badly, but I did freestyle the whole way.  That was a first for me.  It was a two lap swim and the second lap went much better.  I just stopped kicking with a couple hundred meters left and sped up considerably.  Collin Mui and I came out of the water exactly together.  The first ever triathlon for both of us was SVST and he passed me right at the end there.  So Collin is a little bit of a barometer for me.  Maybe I am for him, too.  But anyway, we came out together, but it was obvious my legs were in better shape.  I ran off and left him.

I was really focused on transition and I think I did much better in T1.  4:31 is much better than 6 and 7 minutes I've done at other events.  Anyway, there's still some time to wring out, but until I switch to tri shoes and alter my wetsuit, I think there's not much more than a minute I can take off.

So I got out on the bike and things were going pretty well.  A woman was about the same speed as me and we passed each other a couple of times.  But my heart rate was a bit higher than I liked so I slowed down.  Then I had the bladder issues and a strong headwind developed on part of the course.  I think we had to do six laps and there was one little baby climb.  I always passed a lot of people on the climb.  I've decided I don't care much for courses where you have to do multiple laps.  So anyway, I finished the last lap and was heading to transition.  There was a volunteer waving a flag and I thought that was the dismount point.  So I hopped off and she yelled that I was too early.  So I hopped back on and rode for another 100 m or so.

T2 went well.  I have laced shoes so I had to tie them.  And my bladder was very near bursting.  I found relief in a porta potty.

Then I got out and started running.  I had to do three laps.  I got my heart rate where I wanted and really enjoyed myself here.  I lost focus a couple of times and found myself drifting off my pacing.  But I'm such a number hound that I glance at my Garmin habitually and correct myself pretty quickly.  On the last lap I tried to push it and just couldn't find the gear.  So while I was hoping to push my heart rate into the high 170s, I could only peak it out to 175.  I think part of it was mental -- there wasn't anyone for me to chase.  I guess I need to get more imaginative there.

I did see Collin again.  I think he was two laps behind me.  I ended up finishing fifteen minutes ahead of him.  I saw a coworker, Lito, on the run, but he was in a later wave.  Our final times were within a couple of minutes of each other.

So my swim time was really the only part I was unhappy with.  I did have something of a breakthrough mentally on the second lap.  I'm writing this report late, so I can tell you I have gotten much faster in the water since then.  I think if I were to swim that same course tomorrow, I'd finish at least ten minutes faster.

I'll probably do this race most years.  It's an easy course and it was well organized.  It really was a good race for my first Olympic distance tri.  Now if they could just measure the run distance correctly....

Alcatraz Race Plan

Date: August 21, 2011
Type: Slightly longer than Olympic Distance Triathlon
Goals (Time):

• Total: 3:35:30
• Swim: 40:00
• T1: 7:00 (includes half mile run)
• Bike: 1:23:30 (18 mph)
• T2: 2:00
• Run: 63:00 (9:00 pace)

Goals (Qualitative):

• Enjoy yourself -- this is a beautiful course and you're doing the best thing possible to appreciate the beauty
• Maintain a racing edge all the way through.  Stay mentally focused and in controlled collaboration with your body.
• Use the terrain challenges to build confidence.  You've been training with difficult terrain and others have not.
• Finish strong, but with nothing left.
• Watch the heart rate and manage around lactate thresholds.  Remember around 162 on the bike and around 172 on the run.  Only exceed the thresholds when there will be a chance for recovery afterwards.
• High cadence on the bike.  90-92 is the goal.  Don't be afraid to shift so you can maintain that.
• If a woman passes you on the bike, do not try to keep up with her (you Neanderthal!)  If she can keep up with you on the bike, she probably runs at least a minute a mile faster than you on the run.  She is not that drill sergeant at Fort Bragg you had no respect for.

Actual race plan:
Leave at 3:10 AM to arrive around 4:00 AM.  Drink canned coffee and eat some carbs during the car ride.  Be quick about setting up transition and get on the first shuttle to the boat.  USE THE BATHROOM BEFORE YOU PUT ON YOUR WETSUIT!  Pack everything the day before and try to sleep by 8:30.  At wakeup put on sunscreen liberally.

After the shuttle ride, take it easy and try to find a spot where you can catch a few Z's.  Until the briefing you won't know how the swim start will work, but you're starting in the middle of the Bay.  You don't need to worry about positioning too much.

So you've jumped off the boat.  Just swim smoothly with a minimum of effort.  Once you've warmed up a bit, pick up the pace a little bit, but keep your form good.  The chop may keep you from breathing bilaterally.  If so, pay extra attention to sighting.  Kick as little as you can.  Your legs are for the other parts of the race.

When you come out of the water, your legs should be in great shape.  Get the suit off quickly, get it in the bag and get those shoes on.  Now you have a half mile run to your bike.  Don't hold back.  You want do that half mile in under four minutes.  When you get to the bike switch into the bike shoes and get going.

Now you're on the bike and it's time to get your heart rate down.  So take it easy.  Drink and eat.  The gummies will give you some caffeine so you should be eating some of those every 10 minutes or so.  Eat bars at 30 minutes and one hour depending on how you're stomach handles it.   If things go well, you'll get 5-600 calories and 30-40 mg caffeine on the bike.

Attack the hills.  Outbound, stand for up to one minute on ascents.  Inbound, limit it to thirty seconds.  Your descending skills are pretty good so you should be able to pass people both during climbs and descents.  But watch the heart rate.  Pedal to maintain a heart rate below 162.  You can go higher on climbs, but you want to bring it back down as quickly as possible.  On Great Highway, maintain a cadence of 90-92 rpm.  There will probably be some crosswinds.  Some people are going to gun it and burn themselves out on Great Highway.  Let them.  Some will just be faster than you.  That's okay; you'll get faster.  There are some hills right before you get back to transition.  Preserve energy here.

Handle T2 quickly.  When you get out on the run, first focus on getting your heart rate in the low 160s.  You want to keep your heart rate there except for climbs until the Sand Ladder.  Run the bottom third of the Sand Ladder.  Walk the middle third and run the last third.  Your heart rate will likely be in the high 170s at this point.  We want to bring that down to about 172.  Keep it there until you get to the Golden Gate Bridge (except for climbs.)  If you've fueled correctly, 172 is going to set your pace around 8:30 or even lower.  Now it's time to burn everything left in the tank.  Don't freak out if your heart rate climbs above 180.  Keep pushing it.  No one is going to pass you because you didn't realize you're almost done.  Just push it.  Don't worry about your slobber.  Don't worry about other people's slobber.  Push it.  Your body should feel miserable when you cross the finish line, but that's very temporary.  You will be all smiles after you complete this race.

San Francisco Triathlon at Treasure Island 2011 Race Plan

Date: July 9, 2011
Type: Olympic Distance Triathlon
Goals (Time):

• Total: 3:16:40
• Swim: 36:00
• T1: 3:00
• Bike: 1:25:40 (17.5 mph)
• T2: 2:00
• Run: 60:00

Goals (Qualitative):

• Nail transitions -- I've been giving up a lot of time on both T1 and T2
• Relax in the water and swim mostly with my arms, not my legs.  I'm less interested in the time here and more interested in managing to freestyle the whole way.
• High cadence on the bike.  This is a flat course and I will be tempted to lower the cadence in a higher gear.  Keep cadence above 85 and save my legs for the run.
• Spend as much time on the bike in the drops as possible.
• Finish with nothing left -- I've been training with 12-16 km runs.  I should have enough left to run negative splits on the last 5k.
• Watch the heart rate.  My lactate threshold on the bike is around 162 and around 172 on the run.  Stay below it for the whole bike segment.  On the run, stay near, but not above until 2k to go.  Then blast it.
• Stay calm and have fun.

Actual Race Plan:

I will leave the house at 5:15 AM to arrive around 6:00.  On the night before I'll set up the press pot and water boiler to get coffee ready.  I'll  make coffee first thing.  One cup before leaving and I'll drink the rest in a travel mug.  I'll eat lightly -- mostly carbs and fruit.  I'll have the van packed the night before.  I just have to load the bike and go.

Upon arrival at the race site, I'll pick a spot on a rack.  Then I'll Set up the spot with towels, equipment, etc.  I'll  make sure hydration gear and food  is all on the bike.  Then I'll check in, get body-marked, set up my race belt.  If possible, I'll lay down, take it easy and even nap.  I will apply sun-screen generously 45 minutes before the race starts.  15 minutes after sunscreen, I'll grease up my ankles generously and put on pantyhose to go under the wet suit.  I will immediately put on my wet suit.  Then it's time to get ready for Male 35-39 wave.  This is mostly about socializing and just before the start, quieting the mind almost entirely.

For the swim start, I will start wide right and towards the back.  The point is to avoid as much jostling as possible.  I will swim relaxed and keep my mind calm.  Some of the faster swimmers may lap me.  That's okay.  I am aiming to preserve my legs, so I want my swim to be dependent on my stroke.  I will enjoy how much easier it is to swim with a wetsuit on.  I will breathe bilaterally, taking a breath every fifth or seventh stroke.  If I'm not holding my mental line, I will occasionally breathe on the third stroke.

In transition, I will move with urgency.  The goal is to not give away any time.  I'll remember how I've been giving up 2-5 places with my transition time.  I will remember how, at Morro Bay, I did not pass the fat man until a mile into the run. I will get on the bike, follow the rules and peddle smoothly.  I have to do six laps.  I will eat 1/3 of the gummies every 10 km.  The Garmin will tell me when that is.  My  cadence will stay above 85 and I will stay aerodynamic in the drops.  There are no real climbs, so there shouldn't be much gear-shifting.  I will follow proper riding etiquette and rules (no drafting!), but I won't get stuck behind any slow-pokes.  I will finish both fluid bottles by the end of the bike ride.

In T2, I will maintain a sense of urgency.  I'll leave the bike gloves on.  I'll take most of the first running lap easy to test heart rate and pacing.  These should be around 6:00 km splits with a heart rate in the low 160s.  I will key on heart rate, not time.  After the third km, I will bring the heart rate to the high 160s and keep it there.  Hopefully, this will translate to 5:40 splits or so.  I will not force the pace, but watch the heart rate.  After 6 km, I will push the heart rate to the very low 170s.  I want to do the next two km right at threshold.  It would be great if this translated to 5:30 splits, but I will not watch that.  I will watch my heart rate.  Then with 2 km to go, I will forget about heart rate and just push it.  The goal here is to push beyond 5:15 splits for the last two km.  I will push it hard for these last two km, but I will push it hardest on the last km.  I should run the second km 2-5 seconds faster than the one before.

During the run, I will remember that the run is still a weak discipline for me.  I will run my pace and not get worried about people passing me.  I will remember that there are three laps and some of the people passing me are actually lapping me.  I will not chase anyone until the last two km.

I will smile.  Doing triathlons is expensive in terms of money, time, support and discipline.  The fact that I can do this indicates that I have a truly bounteous life.  It will perhaps not always be apparent, but being out there on Saturday is a celebration.

Updated Event Schedule

I mentioned in an earlier post that my endurance event schedule would have to change because I was abusing my family.  It really hit me when, after several rainy weekends, the sun came out and instead of spending the time with my family, I went for a six hour bike ride.  Yeah, that was really selfish.  Anyway, here goes the list for the rest of the year:

• June 5: Morro Bay Triathlon; I'm probably going to have to drive back to Sunnyvale that day, so I'll stick to the Sprint distance.  It has a beach run and I don't have time to train for a 10K on the beach yet. 750m swim, 20.5 km bike, 5.4 km run
• July 9: SF Triathlon at Treasure Island; This will be my first Olympic distance event.  1500 m swim, 40 km bike, 10 km run on an easy course
• July 31: Santa Cruz Sandman; this one is just fun. 800m swim, 13 mile bike, 4.2 mile beach run
• August 21: SF Triathlon at Alcatraz; this is my biggie event.  1.2 mile swim, 25 mile bike, 7 mile run
• September 18: Catfish Crawl Open Water Swim South Bay 2: 2 mile swim
• A Half Marathon in October or November
• A couple of trail races in October or November

I've essentially set a four hour limit on events.  If I can't finish the event in four hours, I won't do it.  So no marathons until I'm sure I can finish in under four hours.  No centuries.  No 10 km swims.  No triathlons longer than Olympic distance.  It's less about the time of the event and more about the training demands.  If you do a four hour+ event, you need to go out for a few four hour+ training sessions.  I just don't have time for that.

Going to change Athletic Plan for this year

I got a little carried away with my plans so I'm going to dial them back a bit.  Basically, I couldn't go forward with these plans without damaging my overall quality of life.  My family needs me to be around and training for some of these events is not compatible with that.

2011 Treeathlon Recap

It's been a colder than normal winter here in Northern California.  We've regularly gotten temperatures in the thirties and recently some of the local mountains got a little overnight snow dusting.  So training has been problematic.  It's just not much fun to run when the temperature drops; the early sunsets make most weekday bike rides unsafe; and it's always hard to make it to the pool.  I did buy a Kurt Kinetic bike trainer, though, and that has become my go-to workout.

I scheduled the Stanford Treeathlon, really as a training milestone.  It's a basic sprint tri and I felt like finishing would not be an issue no matter how poorly my training went.  Then the weather disrupted things.  The water in SF Bay near Redwood City has been in the high forties.  My understanding is that 55 degree water is the edge of safety for large events.  Most people are fine and handle it fine.  But when you're running an event, you have to consider the most marginal swimmers.  48 degree water would put some of those swimmers at risk.  The organizers rightfully canceled the swim portion and replaced it with a run, making the event a duathlon.  They considered making the event a 5-20-5 duathlon, but apparently got feedback that several participants lacked the fitness for such a challenge.  So they made it a 2-20-5 duathlon.

2-20-5 is a strange duathlon.  Two kilometers is such a short run that most participants probably wouldn't even start sweating.  I personally had no idea how fast I should run such a short distance.  My training has been pretty unstructured to this date -- I basically just go out and exercise without much thought.  I vary the route to affect the amount of climbing I do.  So, the day before the Treeathlon, I decided I would just simulate the whole race.  I reasoned that the Treeathlon was just a training event and if I cooked my legs, it didn't matter.  The terrain around my house is less flat than where the race would be, but I'd get an idea of how I should actually do the race.

I did the 2 km with an 8:36 pace.  This surprised the hell out of me.  I never try to run that fast.  When I do a 10 km training run, I'll run close to 9s at the end to get my overall pace below 10, but I didn't realize I could push out an 8:36 pace for more than a mile.  Then I hopped on my bike and went for 20 km around Sunnyvale and part of Cupertino.  I was warm so I didn't wear my jacket.  And I forgot my gloves.  That was a bad idea.  Anyway, the course I took has a pretty steady climb in the beginning.  I noticed that the spinning on the trainer really helped as I took this ascent pretty easily with a high cadence.  I got delayed for several minutes at Remington and Mary as a driver was on the far left side of the right turn lane when she wanted to go straight.  So the signal never changed until more cars came to go straight. (If you have to know it was an East Asian female driver whose looked only straight forward.  I tried to get her attention so she would move.)  Anyway, I ended up on the bike for 48 minutes with a lot of stopping for red lights.  So I got home, got back in the running shoes and went running for five kilometers.  The course I laid out starts out with about 200 feet of climbing over the first mile or so.  My legs were dead.  My pulse was good, though, as it stayed in the low 160s.  After I got through the first mile in something like 10:50, I decided to kick it up.  My legs were back under me and I thought I could push myself to maybe a 30:30 or 31:00 minute time.  I came in at 29:54.  I felt pretty good.  If I hadn't cooked my legs, I thought my times the next day would make me happy.

I got to the event later than planned, but was happy to see bike racks were assigned.  Of course, I had to squeeze in on my rack and as luck would have it, it was a short rack.  This would prove to be a big problem for me.  I couldn't get my bike on the rack without some vertical manipulation.  The top of the rack was lower than my seat and handle bars.  Anyway, I got settled in and got ready to go.  In my haste, I forgot my Garmin at home.  I felt a bit naked.

I met a couple of people I've met from other triathlons and waited for my wave to start.  My wave was supposed to start 10 minutes after the first wave, but that seemed off.  Also, the waves were too large for a narrow beginning run.  Anyway, my wave (under 39, non-college men) started.  I know my run times are slow so I put myself towards the back and just tried to run politely.  I probably went out a little too hard -- the adrenaline and seeing everyone else leaving you behind is a real test of discipline.  I never really settled into any kind of groove.  I did the leg in 9:24.  I think the distance was probably a little bit shy of 2 km, but that's still much faster than I anticipated.  I was planning on a 10:00 time.  Transition killed me as I had a hard time getting my bike off the rack.  I spent 2:08.7 in T1 meaning I was basically a minute slower than average.  Onto the bike and I found a comfort zone pretty quickly.  Since I lacked my Garmin, I don't know what my cadence was like.  I suspect it was a bit slower than ideal implying I was in the wrong gear.  Anyway, it was 3x lollipop course so it was pretty crowded the whole way.  I just tried to stay comfortable and keep a good cadence.  The course was very flat, so I did very little shifting.  My legs felt a little cooked -- I was definitely stronger on Saturday.  I came into T2 and that was a disaster.  I had a very difficult time securing my bike and I ended up spending 2:44 in T2.  I got onto the run and just tried to keep it together.  My legs were definitely in worse shape than Saturday.  The first mile was really hard, but it always is.  I got passed by a couple of guys there and I was tempted to chase them.  I just said to myself that I was here to run my own race.  I'm really not used to running without a heart rate monitor.  I have no idea what my exertion or pace was like at this point.  My legs were definitely feeling it, though.  The Saturday simulation certainly emptied my tank a bit.  I picked it up a little bit after the aid station and passed some of the slower college women.  The course was an out and back so I saw some people in pure misery once I made the turn.  I tried to give some encouragement.  I think I told one guy in obvious pain that there was glory at the end.  That's pretty silly now that I think about it.  But the last part of the race is about psyching yourself out.  When I got to maybe half or 3/4 a mile left I passed a really tall guy and there was no one else I'd be able to pass.  I thought about trying to kick it and made a half-hearted effort for maybe 200 m.  I had no idea on my metrics so I kind of gave up and just cruised in.  The guy I passed ended up finishing 18 seconds behind me, so I think he may have made an effort to catch me.  I was shocked to see I ran a 29:06 on the final leg.  I don't know if it was a true 5 km.  If so, my time is really shocking.

My transitions really killed my time.  If I had done them just average, I would have been probably 2:15 faster.  This would have put me basically even with the next guy in my wave.  Then the competitive aspect kicks in.  The next age group guy would have been about a minute ahead of me -- close enough for me to see and chase down in the last two miles.  I probably would have knocked another 60 to 120 seconds off my final run.  The time doesn't really matter to me.  This difference would have made the last two miles more fun.  After I chased the tall guy down without changing my pace, the finish was kind of boring.

Let's back up, though.  The Treeathlon was an event for me to measure my fitness.  I'm a little bit ahead of where I planned to be.  The Tierra Bella 200 km Bicycle Tour is six weeks from now.  I'm in a good position to be ready for that.  Mission accomplished.

2011 Endurance Event Plan

Late February, early March, Stanford Treeathlon (Sprint distance)

April 16, Tierra Bella Tour, either 100 mile or 200 km

May 15, Morgan Hill Sprint Triathlon, 3/4 mile swim, 16 mile bike, 5 mile run

June 26, Golden Gate Triathlon, 0.9 mile swim, 26.82 mile bike, 5.94 mile run

No event in July unless my job changes so that my quarterly reporting duties diminish

Aug 4(?), Santa Cruz Sandman Triathlon, 1200 m swim, 13 mile bike, 4.2 mile beach run

Aug 21, San Francisco Triathlon at Alcatraz, 1900 m swim, 40.2 km bike, 11.3 km run

Sep 25 (?), Santa Cruz Triathlon, 1500 m swim, 40 km bike, 10 km run

October 15, PCTR Redwood Park, probably the 25 km

Saturday after Thanksgiving (if not at Disneyland) Quad Dipsea, 28.7 miles, 18000 feet of elevation change

December 18 (if no Quad Dipsea,) PCTR Rodeo Beach, 50 km

I will probably do one or two of the Catfish Crawl swims, too.

Fitness Recap for 2010

This year I made a major lifestyle change. I got into shape. I was definitely sporting the middle aged office worker physique when the year started. I've trimmed down quite a bit in ten months.

Honestly, it wasn't vanity that caused me to start exercising. Well, not vanity of my physical appearance, at least. There were really three motivating factors. Last December, I was talking to one of my coworkers from Massachusetts who was an officer in the USMC. Him being a veteran of the wrong military branch notwithstanding, I respect and like this guy a lot. We were talking and he mentioned how he couldn't keep up with his old buddies though he still enjoyed visiting them and trying. It dawned on me that my own self-image was totally out of sync with reality. I view myself as a physically robust person who doesn't shy away from exertion. While I don't think I've ever really avoided physical exertion, my lifestyle had evolved into one almost devoid of it. I decided that 2010 would be the year I made my own self-view correspond closely to reality. I suppose I could have just changed my self-view, but I guess I'm just too vain to accept myself as your typical out of shape and overweight American.

Next, I'm not descended from people of great longevity. My ancestors have tended to die either at or younger than the average life expectancy. In my extended family, there are a number of chronic diseases that are heavily correlated with lifestyle choices. I have been diagnosed with one of those diseases. I'd already changed my diet pretty significantly to deemphasize meat and I've dived headfirst into the California mode of emphasizing fresh fruits and vegetables. I knew that becoming physically fit would improve my health and most likely increase my life span. I've got a good life going and I want it to last a long time. I don't believe in any kind of afterlife. Either I get it done in this lifetime or it doesn't happen. Sloth is just another word for decadence.

Finally, I've got two kids who are quite young. I am a very introspective, analytical person so I've noticed that I tend to follow the same micro-patterns my parents did. We ate a lot of fast food growing up and when I'm under stress I crave a hamburger and onion rings. I tend to gravitate towards sedentary leisure activities as my parents did. Consequently, I'm very conscious of the examples I'm setting for my kids. I want them to think it normal that people get out and physically exert themselves. I also want them to think it's normal that people set goals for themselves and then through disciplined effort over time, achieve those goals. As parents, we model "the normal way to live" with how we live. Your kids will pick up on what is important by watching what you actually spend time on. You can talk all you want, but seriously, you got to live it. Therefore, I consider showing my kids that fitness is important by making time for it and sticking to it to be an example of good parenting. I take nothing more seriously than my role as a father.

That's why I started exercising this year. I picked triathlons largely because it seemed cool and I like the idea of balanced fitness. I decided to enter events to anchor my fitness routine. I am a busy person. If I don't have actual events on my schedule the temptation to deprioritize exercise is very great. But, if I have a race I'm training for, the prospect of not finishing or performing poorly is a great disciplining agent. It injects accountability into my fitness regimen. It also makes for an easy, though flawed way to evaluate how much you exercised in a given period.

So, here's my event log for 2010, with a quick blurb on each:

• June: Silicon Valley Sprint Triathlon in San Jose-- this was my first tri and my worst experience. I endured some minor injuries in training for this and was extra cautious in my training because of that. Still, I finished. Looking back it seems like such an easy event, but that first one was a bit intimidating. I may do this one again in 2011 just as a gauge on how much I've improved, but probably not. The course is very easy. 500 m swim, 10 mile bike (probably overstated actually) and 5k run
  
• August 1: Sandman Triathlon in Aptos -- After the SVST I really increased my training intensity because of the difficulty built into this course. It's a 1200m ocean swim, 13 mile bike and 7 km beach run. I had a blast on this one. The scenery is beautiful, especially for the bike ride. I was very slow, but I finished strongly. The mechanics of my racing improved though I screwed up the nutrition horribly. My wife and kids were waiting for me at the finish. Finishing with them there was one of the most awesome things I've ever experienced.
  
• Mid-August: Catfish Crawl -- a 1 mile swim. I missed a buoy and had to swim another 300 m at least. My time was disappointing and I ripped my wetsuit. Still, I swam a mile+ in open water. My performance was disappointing, but I still set new baselines in confidence and performance. Just finishing doesn't feel like an accomplishment any more.
  
• Early September: Woodside Trail Run (10 Km) -- The organizers screwed this one up horribly as all the 10K runners got lost. Still, it was a good time. The scenery is very nice and at several points I got into a good running groove where I just enjoyed myself. I ran quite a bit further than 10K and climbed a lot more than I was supposed to.
  
• Early October: Skyline Ridge 14K -- This was just a wonderful event. The marine layer cooperated beautifully and it would have been worth it to lug a tripod for photos. The beauty of the trail runs is that they're so steep at parts that you have to walk. So you quit worrying about your time. At least I do. Also, I was training for a half marathon at this point, so I was careful to not push too hard.
• October 31: Silicon Valley Half Marathon. This is actually a pretty hard course for a road race. The finish is 500 feet higher than the start and the climb is pretty steady from about 5 km on. I had a plan to start kicking 5 km from the finish and I was doing just that, dropping people left and right. Then at 18 km my knee went and it became very painful to put any weight on my right leg. If I was younger with fewer responsibilities, I would have just grit my teeth, kept up my pace and risked injury. But if I'm incapacitated, I can't maintain my responsibilities to my family. So I slowed down and got across the finish largely intact. It probably cost me 7-8 minutes, but that's not important really. Overall, I really enjoyed the event. There was great scenery and until 18 km, I felt good.
  

All that adds up to six events this year. You'll perhaps notice that my last event, a straight run, was basically the same length as my first, a multi-sport event. That kind of puts things in perspective. I'm slow and I'm trying to be okay with that. The point of this is not to win, but to stay physically robust and set a lifestyle example for my kids. It's also to have fun, which I am.

I know there are two months left in 2010, but while I will train, this is the offseason for me. Frankly, my body needs to heal some. Next year, I'll up the distances and maybe do eight or nine events total. The only event I'm definite about repeating is Sandman. It really is that nice.

A couple of notes on education reform

This fact is not getting a lot of attention in the press, but President Obama is openly taking on the teachers' unions. I don't believe he's going at them head-on, but make no mistake, he is standing up to them. And he's doing it in such a way that, if this issue ever gets more attention, it will make the opposition of the teachers' unions reflect very badly on the unions.

I personally think President Bush's heart was in the right place on this topic. NCLB was full of good intentions. But, he and his administration were such poor managers and executives that, at least in the short term, NCLB likely did more harm than good. Managerial incompetence is that administration's most enduring trait, but that's another post for another time.

Obama is taking the goals of NCLB and designing programs that encourage innovation at the local and state level. His script with the teacher's unions is basically: "We have the shared goal of improving education in this country, especially for the less fortunate. I know you guys can't do it all and too often you're not being provided adequate tools to do your job. But, too many of you just flat-out aren't doing your jobs and some of that is because we largely don't bother to look and see if you're doing your jobs. This must and will change." Then he throws out the carrot of potentially better pay and better working environments.

Me, personally, I think teacher pay is appropriate for the teacher population we currently have. There was a time, maybe 20 years ago, when teachers were underpaid. That time has gone. However, teachers are not currently paid enough to change the overall talent level of the people entering the profession. Simply put, we need to make it harder to become a teacher and also make the profession more attractive to more talented people. I believe Teach for America's success is explained, at least partially, by the fact that they are recruiting from a better talent pool. Simply put, we need to improve the talent level of our teacher corps, and that will undoubtedly require better pay. However, you can't just increase the talent level quickly. We are likely going to have to pay new teachers better than market rates for probably a decade. We can mitigate some of this waste by doing away with tenure, but the fact is, at a basic level, we have to "throw money" at this. Eventually, with higher pay, market pressures should improve overall teacher talent.

I personally know a few teachers and I have no doubt that they are highly effective. They also teach in districts where parents are very involved and, sometimes crassly, create an environment of teacher accountability. These places, in general, are not the problem. In my own school district, I know parents will organize very quickly to run off an ineffective teacher. This is not the best mechanism, but it works.

Conservatives will basically tell you that in communities where schools are failing, it's the fault of the communities. The parents are not involved enough and/or they subject their kids to such noisy lives that it's no wonder the schools are bad. Blah, blah, blah.

To that I say, "Do you really want to live in a society where your opportunity is determined primarily by the circumstances of your birth?" I'm personally interested in creating a society where individuals rise and fall by their own practiced virtue and where everyone has a reasonable chance to practice virtue. Of course, this is predicated on my own view that virtue is dependent on certain level of peace and quiet in the environment plus institutions that effectively impart the capability to live virtuously. But, that is a whole 'nother discussion.

Musings on transfer payments and money velocity

My sister-in-law recently asked for comments on what are basically becoming the right-wing talking points about Obama's economic policies. I shouldn't say talking points. It was far more sophisticated than that and was well above the intellectual capabilities of Rush Limbaugh. Still, it was fundamentally flawed. Here is what she sent me:

What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most.

But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama's ministrations so far have gone toward triage and life support, rather than repair and recovery.

AIG yesterday received its fourth "rescue," including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here .) Citigroup's
restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury "stress tests" will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.

Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.

There's really no detail on how any of Obama's policies are attacks on capitalists. It's just asserted a priori that any departure from the status quo is an attack on capitalists. Interestingly, the removal of a federal subsidy (that's what being paid for administering a federally guaranteed student loan is) is treated as an attack on capitalists. I generally disagree with a priori assertions on principle (though I don't do this a priori.) Anyway, any change in economic policy will have winners and losers. This article seems to say that the only way to a prosperous society is to continue the policies that have brought us to the current situation without regard as to whether they are sustainable or not.

There are currently several startling cases of market failure undermining our economy right now. In no particular order, health care spending can best be described as inefficient, poorly distributed and growing at an unsustainable rate. The efficient distribution of capital through the financial sector is moving at an unacceptably slow rate due to a variety of factors no one quite understands. Consumers and business are, en masse, slowing consumption and investment because the future is too uncertain, to improve balance sheets or because capital is unavailable. The capital markets are failing and the health care market is failing. One could make a credible case that the housing market is failing. The right's solution is to complain about "attacks on capitalists." Get a clue.

Anyway, all that is not the point of this post. The article starts with lament that Obama is using transfer payments rather than growth promotion. Basically, he's saying that transfer payments are not stimulative. Well, that seems rather simplistic.

Right now, we have a problem in that capital is not being moved into the economy. I don't know the figures, but I imagine gross investment has been declining precipitously. Consumption is also declining. Now, here's the thing, those with accumulated wealth (let's just say those with money,) spend less of their money on consumption than those who have less. Take me as an example. I am in solid financial condition. Give me $100 and I'll probably just put it in the bank and forget about it. Give $100 to an unemployed single mother and it will probably be spent by the end of the day. If the financial market was not failing, it might be better to give me the $100 because the bank would turn that into $1000 of loans that would get spent in the economy. Right now, though, the bank would not loan that money, but keep the cash to try and cover some of the bad loans it made in the past. So, if you give me $100, nothing will be spent and the economy is not stimulated at all. Give it to the single mom, though, and it will stimulate the economy by $100.

Normally, my money has a higher velocity than the single mom's. Giving me $100 results in $1000 of spending and so the velocity is 10. The single mom's velocity is 1 regardless of the situation. But right now, with the financial sector frozen, the velocity of money given to me is 0. Velocity is actually more complicated as it nests, but this example gives the basic example.

So, the next question is, what if the government takes $100 from me and gives it to the single mom? Well, the government can't really just take $100 from me. Instead they will take $100 from a future me (i.e. tax my future earnings higher.) In the current situation, that's not going to change the velocity of the money I have already. You see, I've already cut my consumption spending and as long as the future tax increase is not too big, I probably won't cut any more. So, taking $100 from a future me and giving it to someone now will stimulate the economy right now. The trick, though, is that you can't raise the taxes so high that I cut my current consumption even more. If you raise the taxes too high, I will cut more than the amount you raise from my spending.

The best way to build wealth in this country is to participate in capital formation activities. In other words, you consume less than you earn and invest the rest. In recent times, middle class Americans have saved very little and actually consumed more than they earned. It is very easy to say, "It's their own damn fault." Maybe it is. However, in recent times, middle class incomes have stagnated and while product inflation has been under control, service inflation has been high. Being able to send your kids to college is not usually considered an upper-class thing, but has been a hallmark of middle class achievement. I think college costs have increased 15% a year for at least a decade. It used to be that 10% was the standard for tipping at a restaurant. Now, 15% is considered cheap. Ticket prices to just about any event are at least 3x what they were twenty years ago. Meanwhile, wages have stagnated. So, just to live what was considered a middle class lifestyle twenty years ago -- sending the kids to college, going to shows and movies, eating at restaurants -- you need more income. That income hasn't grown, though. Some will downsize their lifestyle. Most will borrow to maintain it. They will not just fail to save, but actively go into debt. So, now they're not participating in the best wealth-building activity, saving and investing, but actually going into debt.

Meanwhile, those at the top continue to accumulate wealth and with inflation under control have more and more to spend on ever more extravagant consumption. The middle class is going into debt to stay even while the upper classes are engaging in conspicuous consumption. If you're a middle class person and you go into debt to maintain your middle class lifestyle does that signify moral weakness on your part? If a large portion of your country's middle class goes into debt to maintain a middle class lifestyle does that mean your middle class is morally weak? Or does it mean the situation has changed so that a middle class lifestyle is no longer possible on a middle class income? In other words, does a middle class lifestyle now require better than average willpower, discipline and talent to earn a better than average income? Is it now unlikely that the average person's endowments can provide a middle class lifestyle?

I believe the Obama administration believes the answer to the last question is yes. I say maybe, but the answer is ambiguous enough that we should act as if the answer is yes. I'm not a fan of nostalgia. What people think of middle class may have historically represented greater privilege than realized. You see, we have reduced the effects of birth circumstances on economic status in many ways. If you're born black, you're less likely to live in poverty now than ever in American history. Being born female deprives you of fewer opportunities than anytime in our history. It could be that the middle class lifestyle was never possible for the average person but only possible to members of a privileged, but majority class. Still, it doesn't take a genius to see that recent attitudes and policies are unsustainable.

The UT-OU BCS mess

It's done. OU passed UT in the BCS and will play Mizzou in Big 12 championship. I'm not a big fan of the Big 12 in the first place. Aside from UT and Colorado, all the schools are less than impressive academically. I remember when the SWC broke up. There were rumors that UT would join the Pac-10 and TAMU would join the SEC. That made a lot of sense. Culturally and academically, UT would have been a great fit for the Pac 10. Same for TAMU in the SEC. TTU and Baylor would have been thrown into the wilderness like TCU, UH, Rice and SMU. Actually, with a couple of additions those remaining schools could have made an attractive conference.

Anyway, UT and OU essentially tied in human polls. I really don't know what the coaches were thinking. Find me one who would say their own team should be voted behind a team they beat on a neutral field when they have the same records. And for you OU people who say the Cotton Bowl is not a neutral field, just what are you smoking? Dallas is basically equidistant between the two schools and there are a huge number of OU alumni in DFW. OU never has a problem filling its side of the field and the administration of the game is by a third party. How much more neutral can you make it?

I am a UT alumnus. You can say I'm biased, but evaluate my arguments based on their content.

I don't think there's much difference between beating a team by four touchdowns or seven. Once you're up by four touchdowns, the game is basically out of reach and the rest of the game is largely superfluous. So, to me 35-7 with your starters on the bench for the fourth quarter is just as big of a beatdown as 65-21 with your starters playing half-way through the fourth quarter. A blowout is a blowout and running up the score does not make you a better team.

Now, there are two big differences between UT and OU in the style they play. First, UT plays a possession-focused offense that chews up yardage and time. OU has a big-play offense. One is not superior to the other. Both of their offenses have put up lots of points. Yes, OU has scored more, but that leads to the next point. UT's offense helps keep its defense fresh and off the field. No one will argue with the assertion that for both teams, the offenses are better than the defenses. UT's style of play keeps the defense off the field and puts the opposing offense at a disadvantage. Simply put, UT's opponents have to match UT's scoring in less time. I've seen numerous UT drives that were 15 play, 90 yard behemoths that chewed up six or seven minutes of clock. In the games I've seen, you have a great chance of stopping OU if you can make them run more than five plays in a drive. After this offensive difference, there is a big difference in the defenses. To put it simply, UT's has been a little bit better. The most points UT gave up were to its two best opponents -- OU and TTU. In the other 10 games, they gave up an average of 15 points. Take away points they gave up after the game was already in hand, and we fall to single digits. Outside of its two best opponents, UT and TTU, OU has given up an average of 23 points a game. In fact, they have not held a single Big 12 opponent to less than three scores. You can argue that OU's offense leaves its defense exposed. That argument does not indicate that OU's defense is actually better -- it just argues that the coaching staff has decided they can risk exposing the defense.

Here's the thing about the Big 12 this year. In the top half of the conference, the offenses are so good that if your team comes out flat, you will very quickly find yourself down three scores. Mizzou came out flat against UT and it was 28-0 with 10 minutes left in the second quarter. UT came out flat against TTU and it was 19-0 with a little under 10 minutes to go in the second quarter. TTU came out flat against OU and it was 21-0 with about ten minutes go in the first half. This is not the Big 10 where teams don't seem to get their shoes tied until just before halftime. Okay, you can say OU never came out flat like that. But they played TTU at home and UT at a neutral site. Who knows how they would have fared in a hostile, sold-out stadium. The OSU game had at least 10,000 empty seats. Empty seats are the direct enemy of a hostile environment for the visiting team.

Now, let's look at what has happened when one of the teams fell behind. UT was behind by double-digits multiple times to both OU and TTU. In both games, they staged comebacks that led to a double-digit win over the Sooners and a last-second loss to TTU (on a phenomenal play by last year's Biletnikoff winner.) OU was only ever behind UT and they basically folded. Now, this is not much of an argument the UT is better than OU. It directly refutes the OU argument that TTU is better than UT, though. When UT fell behind on the road, they regrouped and took control of the game. When TTU fell behind, they crumbled further.

So, what it really comes down to is this -- What loss is worse? A six-point loss on a hall-of-fame catch and run with one second left in a VERY hostile stadium on the road or a ten-point loss on a neutral field?

The rest of the season is essentially even. Yes, OU played Cincinatti and TCU. They also played Chattanooga (FCS) and Washington (0-12). UT played Rice (tied for first in its conference), Florida Atlantic (bowl eligible), Arkansas (5-6, but defeated LSU) and UTEP (5-7). The non-conference schedule doesn't amount to much, but it might be slightly in OU's favor. The two teams basically blew out who they should, but OU had a couple more games actually make it to the fourth quarter. So that's slightly in UT's favor. It's a wash to me. It comes down to which loss is worse. Losing on a neutral field by ten is much worse than losing on the road on a last-second play.

For the Big 12 honchos, I'll ask the following: which team is more likely to beat a Florida or Alabama in the National Championship Game? The team with a defense, the proven ability to come back and an offense that not only scores but keeps the other team's offense off the field is the best choice.

GM should go bankrupt

Its market cap is down to $1.8b. So shareholders lose $1.8 billion. Spread out as much as it is, that's not much. The damage has already been done.

A lot of people seem to think that declaring bankruptcy requires the company to stop operating. This is completely wrong. United Airlines just spent three years in bankruptcy. People arguing for a bailout are doing nothing to correct this misperception. Shame on you. That includes you, Barack Obama.

The argument goes that $25 billion in guaranteed loans will give GM the space it needs to clean its house and start producing vehicles that can sell without huge discounts. They're essentially arguing that their problems are not structural, but temporary. Let's agree that is true (though I think it is not.) So what? Why can't you do what needs to be done in Chapter 11 bankruptcy? Okay, maybe you need credit extended so you can actually make it through bankruptcy. I'm cool with the government guaranteeing that. However, this debt will be most senior, so if GM doesn't make it and gets liquidated, those debts will be paid first. So, that government guarantee wouldn't be needed.

It really comes down to politics. Bankruptcy will invalidate all the union contracts and all the leverage will be held by GM's creditors. A judge will be in place to make sure things go smoothly and to bless a final plan. Bankruptcy will effectively break the union. The labor contracts will essentially be negotiated from a tabula rasa. It is not improbable that the workers would decertify the UAW and form a new union. This may just be what GM needs, but it certainly terrifies the UAW.

I am against any bailout. The only real argument that I've heard for a bailout is that no one will buy a car from an auto manufacturer in bankruptcy because of warranty concerns. Hogwash. If people were willing to fly on a bankrupt airline, they'll buy cars from a bankrupt auto manufacturer. GM should go into Chapter 11 and reorganize there. Even if their problems are not structural, they cannot afford to add $25 billion of debt to their balance sheet. If they are structural, bankruptcy is the only way they can actually address these problems in a meaningful way.

Barack Obama cannot do anything but push for a bailout. His coalition is fragile and he needs the unions to back him. Maybe the Republicans can stay unified enough to block it. They could filibuster it and kill it. However, the implications for the next battle are not so great. We need a tremendous amount of government stimulus and we can't afford to let the Republicans block that. Also, Obama can't really allow the Republicans get the idea that they can beat him. He's got a tough job. The right thing to do is kill any talk of a bailout, but the right thing risks seriously damaging his ability to govern. This should be interesting.

Notes on the election

A popular meme is that Obama will be another Carter. I don't buy it. In terms of damage to the economy and American standing in the world, the best analog to Carter would have to be George W. Bush. Carter accomplished this two-fer with his timidity and reliance on symbolic, rather than real action. Bush managed to do it by being overly bellicose and completely tone-deaf to the messaging inherent in any of his choices. You could say Carter and Bush are the heads and tails of the coin of Presidential incompetence.

I'm going to predict that Obama is not another Carter because he has shown he's not afraid to play hardball when necessary and the time is right. He just hasn't done it for the sake of being perceived as hard. Palin was the biggest gift McCain could ever give Obama. However, taking that card and playing it immediately would have allowed McCain to jujitsu it back onto Obama. So what does Obama do? He waits and lets Palin prove herself an idiot. He doesn't say a single bad thing about her, but his campaign makes sure every piece of negative news on her is broadcast for the world to see. Then in the last week, Obama puts out a silent ad that uses her image with devastating effect. McCain is powerless to respond. Carter would have suggested they have more vice-presidential debates and then cried when the other side said no. Oh, wait, didn't McCain do something like that with his idea of near-constant town-halls?

Also, would Rahm Emanuel ever work for a girly-man like Carter?

I commend your speech, Mr. McCain

If you had shown this face throughout the campaign, the country would be better for it. You probably still would have lost, but the campaign would have not stained your honor or your soul. Nonetheless, I am truly grateful for the speech you gave.

I will tweak you on one point, though. You said, "But we both recognize that though we have come a long way from the old injustices that once stained our nation's reputation and denied some Americans the full blessings of American citizenship, the memory of them still had the power to wound." The injustices of which you speak did more than stain the nation's reputation. It stained its soul. Our inability to reverse those injustices still reverberates today. Mr. Obama's election shows that we have made great progress and once again gives hope that our great nation may come to fulfill its potential. There is much work to do yet, though.

Why I am voting against John McCain

The nature of our political system most often leads me to vote against someone, rather than for someone. In other words, I generally find the quality of the two major candidates to be so low, that I just try to elect the least bad candidate. This year's presidential election is perhaps a bit different. It is normal in the fact that we have an incredibly horrifying Republican candidate. So, here are my reasons for voting against McCain:

1. Privilege. John McCain is the son of an admiral who was the son of an admiral. Despite poor academic performance, nepotism got him into the Naval Academy. He then proceeded to nearly get kicked out and was saved only by his family connections. He ultimately graduated 884th out of 889 in his class. Normally, such a poor performance in the Naval Academy would get you posted as XO to the nastiest Marine Corps company that could be found. John McCain got a glory posting, becoming a fighter pilot. Once he was a pilot, he had at least two incidents whose consequences would normally get you banned from flying if not kicked out of the service entirely. His last name kept that from happening. After his time as a POW, McCain went on to marry an heiress young enough to be his daughter. The only private sector job he has ever had was with his father-in-law, a rich beer distributor who was also a convicted felon. To put it simply, McCain is not where he is because of his own virtue or hard work. His position is predicated mostly on the parentage of both him and his wife. Being born to successful parents does not disqualify one. However, McCain has never displayed that he was indeed worthy of the societal position he inherited. In fact, he has, throughout his life, shown that he takes that position for granted. I cannot vote for a man who attains his position through privilege, and by his actions, shows that he is unworthy of such position. He's been an average Senator at best. He's been very good at getting good press, though.
   
2. Intelligence. John McCain has displayed very little of it. Issues of even moderate complexity befuddle him. He seems to honestly believe that Fannie Mae and Freddie Mac are the cause of the current financial crisis. His plan to purchase mortgages at face value is pure idiocy. His response to the Georgia-Russia conflict showed a complete lack of understanding or curiosity about what was actually happening. His belief that he can continually belittle Russia and still have cordial relations with its leaders is another idiocy. To put it simply, the man just does not have the necessary horsepower between the ears to be president.
3. Judgment. His choice of Sarah Palin for his running mate showed terrible judgment. Only the most cursory vetting was done. The choice seems to have been based on pure impulse and id. A simple Google search would have picked up her ethics problems and complete lack of substance. Similarly, his behavior during the Georgia-Russia conflict was provocative and unproductive. Much of the blame for the conflict should rightfully be placed on the Georgian president, but McCain has acted as if the man is a modern day Washington, Jefferson and Hamilton combined. The final example I will list is his behavior when Congress was negotiating the financial bailout. He suspended his campaign in a great show and then gummed up a process that was close to agreement. It's already well-established that he does not even understand the issues in play. A person with good judgment would have taken a secondary role with the understanding that leadership often occurs out of sight.
4. Temperament. John McCain has consistently shown that he is of inconsistent temperament who is quick to anger. No one will ever describe him as graceful. In fact, it's been made abundantly clear, that when the pressure is on, he loses his cool. His suspension of his campaign to go to Washington is a great example. So, the pressure is on for the presidential candidates to show some leadership. What does McCain do? He acts like a drama queen, parachutes into Washington and then makes things worse. He made it abundantly clear that he was going to claim credit for anything that was passed. That's not leadership. Another example is his behavior in the first debate. McCain would not look at Obama. His body language made it clear that he was uncomfortable in Obama's presence. His performance was erratic. There are lots of words to describe him that night and the nicest one is "rattled." If he's rattled by Obama at a debate, how's he going to behave with Putin or Hu in negotiations over sensitive issues? Furthermore, the man is terribly inconsistent. Now he would veto spending bills he actually voted for. He can't even stick to a line of attack on Obama. Even without discussing his anger issues, the man is temperamentally unsuited for any position with executive responsibilities.
5. Character. The man is an admitted adulterer who married a woman young enough to be his daughter before the ink on his divorce was even dry. He has called his wife a "cunt" in front of reporters. He told a horrible joke about Chelsea Clinton in front of reporters and fundraisers when Chelsea Clinton was still a teenager in the White House. (Here it is: Why is Chelsea Clinton so ugly? Because Janet Reno is her father.) In his campaign, he has aired ads that contain absolute lies about Obama (sex education for kindergarteners? not even close to the truth.) To put is simply, if you judge the man by his actions and not the image he has cultivated, he is a man who few of us would tolerate.
6. We cannot afford him. We've had eight years of an underachieving, unintelligent member of a prominent family in the White House. We now have record deficits, two wars that are not going well, what looks like the deepest recession in several generations, infrastructure in desperate need of care and a society where too many people have abandoned the basic value of civility. If McCain were the latest genius from a brilliant family, that would be one thing. Instead, he's a person of mediocre talent who has gotten by on pure nepotism. The White House needs to be earned.
7. I'm tired of unnecessary wars. We have one right now in Iraq. I don't want another one in Iran and I certainly do not want one right next to Russia. McCain seems to almost relish the idea of goading Russia and Iran into a shooting war.
8. Maverick. The idea of a "maverick" running things is just stupid. In a deliberative body without executive responsibilities, a few mavericks are useful. They help guard against groupthink. In an executive position, though, you want the smart, thoughtful guy. Anyway, calling John McCain a maverick is giving him too much credit.
   

These are all reasons to vote against McCain irrespective of who his opponent is. I often joke that elections are about picking the tallest midget. In John McCain, we have an angry dwarf.

Emerging Market Chaos shows problems are not just from American mortgages

Go listen to the Giant Pool of Money again.

There has been an excess of leverage in almost every sector of the global economy. Deleveraging will be painful and after an initial deflation risk, central bankers will likely try to inflate the economy out of the crisis. Yes, inflation is coming. Probably not too bad, but three years of inflation at 5-6% in the United States would not surprise me.

Some countries are in trouble because, even though they have accumulated currency reserves, their private sectors borrowed in dollars. They borrowed in dollars because interest rates were low and in recent times, the dollar was weakening. This was very successful in recent times as the dollar was weak and emerging market firms had access to very cheap capital.

Now, the world's risk appetite has collapsed -- so emerging market currencies are crashing and that cheap capital is now extremely expensive in local currencies. The government can try to defend their currencies by selling dollars, but their power to do this is dictated by the amount of reserves they hold. So, China, with about a year's GDP of dollars, can fully defend their currency (yes, I know the RMB does not float, a fact that depends on China's reserves.) Other countries are much less able to.

The difference with 1997 is that these economies cannot export their way out of the mess. The developed economies are in recession. So, emerging economies are going to have to develop local demand. That's going to be hard.

You should be buying into the market right now

If you have a time horizon beyond like five years, you should be buying into the market right now.

First of all, there are two ways companies return earnings to shareholders, stock buy-backs and dividends. From an academic, non-behavioral point of view, they are the same. However, in bull markets, buybacks help the stock price more and in bear markets, dividends help more. That's tangential to the current argument, though. The main point is that some stocks pay dividends and any type of fund that holds them passes on those dividends. So, at any time, most every fund that holds stocks will throw off some income.

For a variety of reasons, companies are loathe to reduce their dividends. You want to really signal to the market that things are bad for your company? Reduce your dividend.

So, with the stock markets in open panic, your going to buy a pretty nice dividend yield. The yield on the S&P 500 was 2.38% on September 30. The market's declined something like 30% since then, so dividend yields are probably well over 3.0%. Furthermore, many companies that pay dividends are "safe" havens -- their financial performance is fairly constant across all economic environments. What I'm getting at is that in a panicky market, dividends are going to decline at a much slower rate than equity prices. Buying at just about any time during the panic will get you a decent dividend yield.

Let's say we find a bottom at a 50% market decline. Recovering all those losses in five years requires ~14% growth each year, right around historical norms (returns are geometric, not linear.) Let's be conservative and say you get 8.5%. Add in your 3% dividend yield. You've got 11.5% appreciation. Actually, if you reinvest the dividends, it's even better. The math is kind of complicated and path-dependent, so I'm going to leave that alone right now, though.

What if you time the bottom wrong? Let's say you get in at a 30% decline. With the 8.5% return, you're looking at about 1.5 years more to get your price back. Your dividend yield will be a few basis points lower. You still get double digit returns. You should still buy.

THIS IS THE BUYING OPPORTUNITY OF A LIFETIME! You can try to time the bottom, but it's already sweet enough for me.

Music was way awesome on Today's Marketplace

"Everything Counts" by Depeche Mode
"Where is my Mind?" by the Pixies

The news was horrible, but at least the musical clips were awesome.

Financial Crisis -- What's happening

On my MBA alumni mail lists, a lot of commentary is floating around. As it's a semi-public forum, the people who are angriest are talking a lot more. This is unfortunate, because the most angry seem to be the least knowledgeable about what's going on.

I don't feel like teaching a basic economics class, but suffice it to say that a modern economy is very dependent on credit being extended at a variety of durations. We extend credit to financial institutions by stashing our cash there and getting some interest back. They extend credit it others in much the same way.

For a business, matching cash inflows with outflows is a fundamental act. Now, when you sell something, you're usually not going to be paid until after you deliver it. However, you're going to start incurring costs much sooner than you're paid. Nearly every business has to pay at least some of its bills before it is paid. Those that don't are the subject of much admiration in MBA classes. Aside from that, short term credit is necessary for a functioning economy. We could insist that everyone hold enough cash to cover all their bills before they commit to a sale. That sounds good, but is impractical. We would seriously limit the capacity of the economy and if you think about it, this mode just does not make sense. Let's say a guy convinces everyone on a block to pay him to do their lawns. Wouldn't it be better if he could then go borrow money to buy the equipment? Oh, we could make him wait until he had enough money to buy the equipment outright. Then his boss can keep charging us more to do our lawns and pay the guy so little that he never can go into business for himself. Hopefully, now you're getting the idea.

The short term credit markets right now are frozen. The commercial paper market is basically non-existent right now. Commercial paper are short term notes that large, very stable companies issue. They have generally been considered so safe that you can account for them the same as cash. Companies need to issue commercial paper to finance their day-to-day operations. These are companies that are very solvent, but they use short term debt to enhance their liquidity. Thus, they can extend their decision horizon on how best to deploy their assets. This is a good thing. Here's the thing, no one will lend to them right now and they have their cash tied up in longer term investments. They can get the cash, but not without taking losses on these investments.

Just imagine how tough life would become if credit cards disappeared. This is essentially what is happening right now. Imagine what the fallout would be. We are talking Great Depression-level disruption and shrinking. Hopefully, reasonable people can agree that some ideological purity is a worthy sacrifice if it can avert this crisis.