Back from the greatest camp ever

     Back from a week in the mountains (Sierras, near Sonora) at the Lair of the Bear, the UC Berkeley alumni camp. We all had a fine time, having made allowances for living with dirt and not sleeping well at night. Jenny turned three single cots into a king-size bed, with the help of our traveling mattresses and her own ingenuity, and our tent cabin became a very comfortable hideaway. The girls painted their faces, played and swam. The college-age staff kept us well fed, and I didn't even try the Wi-Fi connection for the first four days – after which, I limited myself to an hour a day on the laptop, which seemed to strike the right balance between wanting to keep up and not wanting to work.

     I spent afternoons at camp engrossed in a book called The Greatest Trade Ever, about John Paulson and his short-trading of credit derivative swaps against collateralized debt obligations during the crash of 2007-2008. The author, Gregory Zuckerman, writes for the Wall Street Journal and is an excellent story-teller, to the point of drawing out the action perhaps more than needed to be done to make a book of adequate length. The main points of "suspense" in the book, given that we as readers already knew that the protagonists' biggest uncertainty (whether there'd be a crash) had been resolved by ensuing events known to all, was whether they'd figure out how to make money off of their analysis and expectations. The three elements that needed to conjoin for that to happen were the design of an instrument (the product that would allow investors to profit if housing crashed), finding lots of counterparties (which turned out to be banks who wanted to maintain the apparent value of their investment portfolios on their books), and timing (not getting in too early, but getting in earlier than others). All in all, a book to restore my faith in markets in the face of their most egregious failures,