Ever watched Aaron Sorkins’ Sports Night?

If you like Aaron Sorkins’ work but have not watched Sports Night, you need to. The series captures the essence of Aaron but leaves enough raw nerves to be developed in his later work.

I first met his work with a half-watched season of West Wing when I was not old enough to understand why I loved the series. I was lucky enough to watch live on TV the last couple of seasons with the first showing. Sometime later, after I had sprinted past 45, I watched West Wing from beginning to end as I jetted around the world for work. What a joy.

When I realized that the script and the casting was what made the series unmissable, I researched the secret. I figured it might be Aaron Sorkin. From here I watched Studio 60 on the Sunset Strip and within two episodes I realized Mr. Sorkin was the secret sauce. After a delightful and modern series I then discovered The Newsroom. This was yet another brilliant series that I had little choice but to binge watch. Exasperated and sad that I had watched his last major TV serial, I had little choice but to acknowledge his work and delve into his first TV series, Sports Night. It was initially hard due to the clear age in setting, but after two episodes I warmed to the characters, just as I was meant too.

The series introduces Aaron Sorkins’ canvas that you can see in all his TV serials. His secret includes a clever, rampant and systemic repartee between two lead actors. He never lets a minute stand alone; there are always rejoinders for every line. He judiciously and smartly ends an exchange with the point or the mood made; but he plans the exchange- long or short- with meticulous craftwork.

His next skill is to overlay the continuous and enjoyable rejoinders, with a certain mirth, humor or hubris that almost universally reminds us that we are human, or that we are fallible. He deftly reminds us that we are not alone; that our weaknesses are what makes us strong; and our strengths are what make as meek. He knows us well and can tell the story with a mirror held up in front of ourselves.

The main leads are men. So much of the script revolves around the two. This is a pattern that you see throughout his TV serials. This is not a sexist storyline; it is the story. The intelligent quips are shared across women and men equally, though he cleverly plays on the the wide range of heart strings and emotions that comprise man and women and how they interact and react.

Each series is steeped in research: Sports rooms; news rooms; comedy show to Whitehouse. What is missing? Maybe a documentary in a war-torn middle east country? That would provide a period of intense script coupled with release; this is Sorkin’s model and it works.

As I sat in my long flight back to Atlanta, I found myself with just three episodes of Sports Night left to watch. I realized I was really very sad. I was about to run out of runway. I was about to reach the end of the line. No more series, no more scripts, would remain unknown to me. I was to know all of Aaron’s TV work. I didn’t want it to end, much like I am not a fan of the end of what clearly constitutes the most imperfect part of me: my own ability to love another day.

All I could console myself with was to rush home and download Studio 60 strip to my iPad for my next world winding trip. I know of no other script writer who can capture the essence of us so easily and so completely. To think this is his lot, I can’t believe it. To think this is all I have left, I don’t believe it. Is there one more TV series left?????


The Price is Right. Or is it?

I was sitting in the airport terminal at Delta’s hub in Atlanta just people watching. I gazed up and saw an advert on a screen from Delta. It said something like the following:

• You are a smart, discerning traveler

• You recognize that your journey will put much carbon dioxide and other gunk into the atmosphere

• This is bad

• So why don’t you invest some of your money into this initiative and help offset your worsening carbon footprint.


This is quite interesting for a number of reasons, the least of which is the obvious tragedy of the commons principle. This would lead to the situation whereby individuals, sharing a common resource being spoiled, figure out that they can avoid the payment since their inaction won’t be spotted, and others may pay anyway; there is no penalty for the individual abstaining since such abstinence is hidden. The result is that no one pays and the resource goes to spoil.

The more interesting point for me is in the fallacy of the pricing of the flight I was about to take. If collectively we really did care for the environment, the airline would plan for a carbon neutral business and set air fares accordingly. But the airline also faces the same tragedy of the commons versus other airlines. So then why doesn’t our invasive government mandate such pricing? Governments seem to support green policies but they won’t correct pricing of carbon-based travel.

If this were to take place, we would all be party to an organized solution.

Then again, could we agree the impact on the environment of my flight to Las Vegas? This is the real problem- we can’t figure it out the impact, and we cannot agree to figure out how to do so. As such, and we see it all around us, pricing of many products and services do not reflect the real price. They reflect a price that serves the prevailing conditions at the time. And many of these conditions do not reflect reality – just acceptable behavior. If we were really green, pricing of such goods and services would be adjusted.

So when someone suggests that capitalism isn’t working, they are correct, but likely for the wrong reasons. The pricing mechanism is not as efficient as it was could or should be. Price isn’t everything, it seems.

Brexit, Banking, and Bonfires

November 5th has come and gone- so too the bonfire-bashing stories of Guy Fawkes that go along with that date. But one date remains before us, where playing with fire is about to burn the hand that reached out. That date is March 29, 2019. The Brexit negotiations where a sham: Britain was never going to get a fair deal, as politicians were involved; the EU was never motivated to help anyone other than themselves. In the US we call that, America First and get pilloried for it. Frances Macron let the cat out of the bag when he said that the backstop would be leveraged to get advantages over Britain.

The terms of the deal are a travesty. Britain is neither in or out of the EU and there is no clear plan how it ever will be. A clean break with fair trade rules was never possible. Many politicians avoid rational arguments; they seek advantage for their own position, not fairness. Fair trade and zero tariffs without freedom of movement, though logical and reasonable, was never possible: The French want to protect their farmers; Italy their factory workers, and Spain its fisheries. Competition and openness has been corrupted for years. Why is the EU anything different? See The Crisis of Good Intentions in this week’s US print edition of the Wall Street Journal.

Elsewhere in that newspaper is another article that highlights how the politicians in Brussels are close to ignoring a fire for which they have little awareness. ‘Finance Area Must Make Key Brexit Choices Now’ explains how certain financial transaction take three months to complete. The March 29 date when Britain leaves the EU is nearly 3 months away, yet the methods to assure safe passage for such derivative transactions remain in limbo.

Most of will never use or know what these $66 trillion of swaps and futures transactions actually do. Financiers do and will soon be in the front page of finance rags when they have to explain to their masters why costs are ballooning and finances settlements grinds to a halt. London is still an important central hub for a range of these transactions that are specialized; and aspects of global trade market operations. The EU, in their political stubbornness, are about to uncork a bottle of pandora; or they will light a fuse that will burn and brightly, very soon.

For the love of Pete, can Britain just get out from under the manifolds of madness and can we work an honest days effort without political oversight?

Brexit latest: Worst of the Bad Deals

Seems like the agreed Brexit agreement is a betrayal of those who voted to leave the EU. Britain gets to pay a whopping £50bn for the pleasure of being governed by the EU. Listen to Jacob Rees Mogg calmly and cooly explain the deal: https://youtu.be/O3J-G71448o. For the first time in hundreds of years (Boris said yesterday a thousand) Britain will be like a vassal state.

After hearing all the rhetoric I can’t seem to find a single good thing about the deal. Britain is half out of the EU but with ugly, penalizing strings attached. What ever happened to the idea that we can forge our own agreement? What happened to self governance? What have we become?

IMF selling snake oil advice…in places…

I had little choice but to hot-foot over to the IMF webpage once I spied the alert in my inbox today: UK’s Economic Outlook in Six Charts. Really, in just six charts? Awesome. Show me the money. Well it turns out a bit of a fiddle. Yes there are six charts and some of them are really interesting. Some however are pushing a political agenda.

Chart 1: UK GDP 2011-2018 compared to G7.

Yes, in the last couple of years the recorded GDP growth of the UK has fallen from being in the top set of G7 counties to the bottom. How much of that is due to Brexit or natural economic cycles or other causes?

Chart 2; Brexit will be costly to the UK.

Ok so now my spider-senses are tuned in. Have you read The Economics of Brexit – a cost-benefit Analysis of the UKs economic relationship with the EU, by Philip Wyman and Alina Petrescu? I would recommend it. Page by page, chapter by chapter, these two researchers explore the small print of the analysis completed by the IMF, OECD, the Bank of England and others, that all point to (or pointed to) the economic decline of the UK assuming Brexit takes place. The small print of every analysis that concluded and concludes depression, resection, decline, all point to assumptions about how the UK policies will change (or not) and how other countries responses will change (or not). Quite frankly the conclusion is embossing.

Virtually every analysis that falls back on WTO or other frameworks assumes something that is just not practical or likely. Won’t the UK adjust interest rates if prices increase? Won’t the UK devalue sterling if wages exceed global competitive rates? Won’t the UK’s innovation seek higher rents and drive new innovation? Won’t tax policy favor growth? These are all ignored in one or other analysis. Thus every analysis is misleading. The IMF is just as bad as everyone else. In fact I conclude that there is no fair or practical economic analysis of what will happen with Brexit. Few economists can prove what net change in GDP came ab-out from joining the EU; how can they estimate the losses when you leave?

I will let you look at the other charts. They are interesting and somewhat informative, if you take the time to understand the assumptions and try to think of the argument the author wants to message. Either way, I recommend the book.

Where the Skeletons, economically speaking, are laying down

Not yet buried, not even dead, firms are taking on more leveraged debt. In last week’s US print edition of the Economist, two articles make for chill reading.

The first article that heads the Finance and Economics section is titled, What Goes Up – The American economy. After emailing the current economic growth and the causes of it, the article suggests that things are likely to change. And this was written before last week’s midterms.

The theory is that the impact of the recent tax cuts will start to fade. Yes, this must be the case though there will surely be some residual net-increase in spending and change in behavior as a result. Tariffs are brought up as drag on demand; again this is likely true though there will also likely be some positives as local businesses, shielded from foreign imports, may seek new money to build up local services and supplies leading to some organic growth.

For me, the real risk is investment. Apparently that is falling again, after an uptick (due to tax breaks?). Investment, from primary R&D by central government through to capital investment by firms for plant and equipment, is really important. It is a key part of what will drive the next wave in productivity. We need to keep a watchful eye on all aspects of investment.

Finally the consumer is held up as the trump card, if growth is not to decline in the next year or so. Consumer spending is by far the largest component of US GDP. If spending here keeps up, business may yet increase again investment in response to growing demand.

With Congress split, the likelihood is that broad policy changes will not change- either the House won’t pass the Presidents policies or the President will veto, or the senate will not pass, anything significant the House desires. So my feeling is that growth may yet continue but slow down slightly, which would still be a good thing.

The second article is titled, Load Bearing. It reports that, “Authorities from the IMF to the Fed’s ex-boss are worrying about a booming corporate-credit market”. The credit being analyses here are leveraged loans. These loans are being chopped up into smaller trenches and sold to buyers with different risk appetites. Sound familiar?

The more important news is that we are talking of about $1.2 trillion dollars. Yes, that’s a big number and apparently it is twice as much as six years ago. Some of these loans are refinancing debt (about a 1/3, according to the article) and more is used to finance M&A.

These leveraged loans are attractive to some investors as they have offered good returns at a time when interest rates are low. This is a good example of unexpected and unintended consequences (and economic behavior) that has come about due to excessive periods of low or near-zero interest rates. Such rates mess with your funding approaches. Couple this with the principle, put up long ago, that lowering interest rates drives investment: not many IT or business transformation (i.e. large) projects I know about were conceived of simply because the Fed dropped rates.

The article explains how demand for these loans has led to lowering of standards, and a likely rise in defaults. Again, sound familiar?

The Assault on Capitalism is Complete

A few data points, brought together in an Financial Times article this last weekend (see At a record high, the US market is still shrinking), suggests our political and economic leaders are looking in the wrong direction for the real challenges undermining our economy. Let me summarize them for you:

  • The US stock market is at an all-time high
  • The US stock market is experiencing its longest bull run
  • The tally of listed companies in the US stock market has halved since 1996, from 8,090 to 4,336 last year
  • M&A, funded more by cheap money (via Quantitate Easing) rather than underplaying competitive weakness, has been rampant
  • Industry concentration is widely up leading to mega-firms more able to snap up smaller firms sooner in their life cycle
  • IPOs are happening at half their average rate compared to 1980 and 1990
  • The number of start-ups overall continues to be running at near historic lows

In essence, creative destruction, that natural process whereby death is the catalyst or preparatory step leading to new birth, has been put in hold and worse, twisted into an abomination. What is the cause? How did we get to a place where natural, independent, entrepreneurial spirit has near extinguished? A range of disconnected public policies and actions have conflated to nudge us to this place.

  • Increased regulation, followed up by yet more regulation, ever driven by powerful lobbies and ever more splintered interest groups
  • Reduced public funding of primary R&D
  • Poor alignment of vocational and educational services
  • Social policies that promoted the false idea that everyone should go to university (everyone should have the opportunity) and the resulting demise of things like professional apprenticeships

More insidiously is that money, more specifically the capital markets, are now so distorted that the behavior that acted as the foundations of creative destruction are not holding it back. With the volume of cheap money that flooded the market in recent years, so much money has been chasing ever more riskier bets. The M&A mentioned above was one result. Another is the funding models for how capital investment is prioritized. This has led to a huge growth in private equity and so many more private companies. Thus the cycle of creative destruction has been undermined from several fronts over a long period of time.

The current situation is that the economy is being managed by fewer and fewer public giants and larger and larger private investment and sovereign investment funds. What is left to the retail market, once thought of as a natural part of the cycle, is being shrunk and may soon count for little. The economic cycle firms used to follow, that operated naturally and yielded up profits and growth, is now a managed system by politicians and a small number of the very rich.

What do we do? The FT article suggests yet more regulation to try to rebalance some of the results. No one of note is willing to suggest we roll back the policies and actions that caused the problems in the first place. Shame.