Good vodka and bad chicken

When I studied Artificial Intelligence, back in 2002, neural networks weren’t a thing. The limited compute capacity and storage available at that point in time meant that most artificial intelligence consisted of what is called “rule based methods”.

And as part of the course we learnt about machine translation, and the difficulty of getting the implicit meaning across. The favourite example by computer scientists in that time was the story of how some scientists translated “the spirit is willing but the flesh is weak” into Russian using an English-Russian translation software, and then converted it back into English using a Russian-English translation software.

The result was “the vodka is excellent but the chicken is not good”.

While this joke may not be valid any more thanks to the advances in machine translation, aided by big data and neural networks, the issue of translation is useful in other contexts.

Firstly, speaking in a language that is not your “technical first language” makes you eschew jargon. If you have been struggling to get rid of jargon from your professional vocabulary, one way to get around it is to speak more in your native language (which, if you’re Indian, is unlikely to be your technical first language). Devoid of the idioms and acronyms that you normally fill your official conversation with, you are forced to think, and this practice of talking technical stuff in a non-usual language will help you cut your jargon.

There is another use case for using non-standard languages – dealing with extremely verbose prose. A number of commentators, a large number of whom are rather well-reputed, have this habit of filling their columns with flowery language, GRE words, repetition and rhetoric. While there is usually some useful content in these columns, it gets lost in the language and idioms and other things that would make the columnist’s high school English teacher happy.

I suggest that these columns be given the spirit-flesh treatment. Translate them into a non-English language, get rid of redundancies in sentences and then  translate them back into English. This process, if the translators are good at producing simple language, will remove the bluster and make the column much more readable.

Speaking in a non-standard language can also make you get out of your comfort zone and think harder. Earlier this week, I spent two hours recording a podcast in Hindi on cricket analytics. My Hindi is so bad that I usually think in Kannada or English and then translate the sentence “live” in my head. And as you can hear, I sometimes struggle for words. Anyway here is the thing. Listen to this if you can bear to hear my Hindi for over an hour.

Ramayana and Weight Training

There are several interpretations of the Ramayana. As AK Ramanujan compiled, there are more than “three hundred ramayanas“. In some versions, Ravana is Sita’s father. In others, he is her brother. Yet others have been written from Sita’s point of view. And some from Hanumantha’s. And some from Ravanas.

In fact, the Ramayana (contrary to the sanitised Ramanand Sagar version we were fed by Doordarshan) is a fascinating enough epic that there can be millions of interpretations of the story. So let me add mine.

In my opinion, the Ramayana is a shining example of the virtues of Strength Training, especially barbell training. I’ll illustrate this with two key episodes from the epic.

The first is Sita’s swayamvara, where Rama beats off all competition to be able to marry Sita. The test is rather simple. There is a rather heavy bow that the suitors should lift and then string. My interpretation is that most other suitors who had come to the swayamvara were “convenational gymmers” who spent hours every week honing their biceps and triceps and ignoring training their large muscles.

Basically, like most “gym rats” you see at most conventional gyms, these suitors focussed on the lifts that made them look good rather than those that gave them real strength. Rama, on the other hand, practiced simple barbell lifts, and was especially adept at the deadlift. So after all the shower-offs had failed, Rama walked up and deadlifted the bow (the weight was such that no other lift was possible) and strung it. And married Sita.

The other episode comes much later in the epic, when the scene of action has shifted to Sri Lanka. Angada, the monkey prince, has gone to Ravana’s court in the form of an advance party to negotiate Sita’s release before Rama declared war on Lanka. Ravana insulted him, and so Angada refused to budge until he had had an audience. Various members of Ravana’s court tried to physically dislodge him (as Angada had challenged them to do so), but Angada remained firm, with his feet firmly planted in the ground.

Clearly, Angada did squats, and members of Ravana’s army who fooled themselves into strength by solely concentrating on the arms didn’t realise that someone (who squatted) could have such heavy and firm feet. And so they failed to dislodge him.

Now to find episodes from the epic that show the virtues of the press and the bench press.

Couples on trains

When I first visited London in 2005, the way some couples travelled on the underground caught my fancy. The usual algorithm would be that the taller partner (usually the guy) would hold on to the bar on top, and the other partner (usually the girl) would stand holding him. I clearly remember seeing this enough times back then for it to be a pattern.

I returned to London in 2017 to live there, and interestingly, this way of couple travel had gone missing. I don’t know if there was a cultural shift in the way that people travelled. My best guess is that it’s due to carriage redesign – in 2005, most of my travel (and thus observation) was on the District Line, and the District Line had got a whole new (and modern) set of carriages by 2017.

Perhaps it was the design of the old carriage (which possibly had too few railings to hold on to) that encouraged this couple behaviour. And the better designed new carriage meant that this way of one partner holding on to the other wasn’t that necessary.

The other explanation I have for this is personal – in 2005 I was a much under-exposed 22 year old who would notice every single act of public display of affection. And so every time I saw a couple travel this way (or kiss on escalators at tube stations) I would notice. By 2017, I was much better exposed, and didn’t find PDA all that fascinating and so didn’t notice even though I did many many train journeys.

In any case, the reason this observation about London trains becomes pertinent now is because of the Bangalore Metro, which seems to be showing shades of London 2005 behaviour. At least on four or five occasions in the last one month I’ve seen couples travel this way on the Bangalore metro – one holds the handrail on the ceiling, and the other holds the partner.

I begin to wonder if this is a necessary step in the evolution of any city’s metro system.

Tourist experiences

The big trend nowadays is to do tourism without doing “touristy stuff”. What counts for social currency is to do “authentic stuff” and to avoid things that are “made for tourists”. So tourists try to not visit places with too many other tourists, and go out of their way to find “authentic experiences”.

However, our recent holiday in Lisbon showed us that not all “touristy things” are the same. There were  tourist experiences we liked, and those that we abhorred. Marginal differences made a huge difference in how we experienced places, and not all “tourist experiences” were bad.

For example, on each of the three days we had breakfast in restaurants that seemed to almost wholly cater to tourists. It was possibly a function of living in a part of town (Alfama) that is now host to a lot of tourists. Each day we would check on google for places to have breakfast at, pick one and go.

All of these places had brunch menus, which were pretty good. All of them seemed overpriced given what I’d heard of Lisbon’s price levels. Waiters all spoke very good English. And people at other tables seemed to be tourists. But the food was generally of a good quality, though coffee was bad.

On the other hand, there were these restaurants where we ended up for lunch at clearly touristy places, where you knew very quickly that the food wasn’t up to the mark. One Asian restaurant we went to (we’d been walking for a while and went in desperation) served Indian Chinese food – not something you’d expect in Europe. The pork belly was cooked excellently, but then slathered with sriracha! The previous day, a restaurant close to the Cathedral had charged a fortune for a bottle of water after denying tap water. The food there was rather ordinary as well.

The contrast in tourist experiences wasn’t just about food. As I mentioned earlier, we were in a touristy part of town called Alfama, but it was a nice touristy part of town. Lines (at the castle, for example) were never too long. No place was that crowded (admittedly we went in the off season, and on weekdays). You never got intimidated. And there was the occasional smile or nod to people you came across.

On the middle day of our trip, though, we headed to Belem (another touristy part of town), to Jeronimo’s Monastery. The tourist experience there was something else. The crowds were massive everywhere. Lines to buy tickets were long. The feeling one got was that if we weren’t careful we might be robbed. There were lots of beggars around. The entire atmosphere was intimidating. It was as if we were longing for “our touristy places”. And in very quick time we had made our way back towards Alfama.

So through the trip I decided that avoiding “touristy places” isn’t a good strategy during holidays – touristy places are touristy for a reason, and the effort to avoid them can be significant. Instead, what we should avoid are tourist traps. We need to do some research and go to places that are well rated. There is nothing wrong in doing touristy stuff. All we need to do is to do the “good touristy stuff”.

Why coffee in Portugal is so bad

The title of this blog post is the text I entered into my google search bar at Lisbon airport, on my way back to London last weekend. What Google showed me on top was a blog post titled “why coffee in Portugal is so good“. The contents of the post, though, had given me the answer.

In terms of coffee cultures, Spain and Portugal are rather similar. Coffee shops usually double up as bars, unlike in England for example. This means that the baristas aren’t particularly skilled, and so you don’t get fancy latte art. The coffees you get are thus espresso, espresso with some milk and espresso with lots of milk. The milk being foamed gives the coffee a good taste, in Spain that is.

The reason coffee in Portugal tastes bad is the same reason that coffee in France tastes bad – it is a result of colonialism.

During the years of the Salazar dictatorship, Portugal was economically isolated. This meant that it could only turn to its colonies for coffee. And the Portuguese colonies (not sure if Brazil is included in this since it became independent way back in the 1800s) exclusively produced Robusta coffee. And Robusta coffee, being inferior to Arabica, is roasted slowly, and produces a bitter brew. Which is what we uniformly got in our trip to Lisbon.

France had a similar story. Though there was no economic isolation, imports from its colonies were subsidised, and this was again largely Robusta coffee. And so, as the roads and kingdoms post linked above explains, coffee in France is bad.

I’m not sure if Spain got/gets most of its colonies from its erstwhile colonies. If it does, it goes a long way in explaining the quality of coffee in Spanish cafes, despite them doubling up as bars and not necessarily having skilled Baristas. For the likes of Colombia and Ecuador and Honduras produce absolutely brilliant Arabica coffee.

 

Mixing groups at parties

I normally don’t like mixing groups at parties I host – that sometimes leaves me as a “cut vertex” meaning that I have to personally take it upon myself to entertain one or more guests and can’t leave them to be “self-sufficient”. You might recall that a bit over two years ago, I had tried to use social network analysis to decide who to call for my birthday party.

However, for unavoidable reasons, we had to call a mixed set of friends to a party yesterday. We’re “putting BRexit” later this week (moving back to Bangalore), and considering that there were so many people we wanted to meet and say goodbye to, we decided that the best way of doing so was to call them all together to one place.

And so we ended up with a bit of a mixed crowd. The social network at yesterday’s party looked like this. For the sake of convenience, I’ve collapsed all the “guest families” into one point each. The idea is that while a guest family can “hang out among themselves”, they needn’t have come to the party to do that, and so it fell upon us hosts to talk to them. 

So the question is – with three hosts, one of whom was rather little, how should we have dealt with this assortment of guests?

Note that pretty much everyone who RSVPd in the affirmative came to the party, so the graph is unlikely to have been more connected than this – remove my family and you would have a few islands, including a couple of singletons.

Should we have spent more time with the families that would’ve been singletons than with those who knew other guests to interact with? Or was it only fair that we spent an equal amount of time with all guests? And considering that we could deal with guests on the right side of the graph “in twos”, did that mean we should have proportionately spent more time with those guys?

In any case, we took the easy way out. Little Berry had an easy time since there were two entities she knew, and she spent all her time (apart from when she wanted parental attention) with them. The wife and I were taking turns to buy drinks for freshly arrived guests whenever they arrived, and on each occasion we helped ourselves to a drink each. So we didn’t have to worry about things like social network dynamics when we had more important things to do such as saying goodbye.

I just hope that our guests yesterday had a good time.

Oh, and way too many conversations in the last two weeks have ended with “I don’t know when I’ll see you next”. It wasn’t like this when we were moving the other way.

 

Monetising the side bets

If you were to read Matt Levine’s excellent newsletter regularly, you might hypothesize that the market for Credit Default Swaps (CDS) is dying. Every other day, we see news of either engineered defaults (companies being asked to default by CDS holders in exchange for cheap loans in the next round), transfer of liability from one legal entity to another (parent to subsidiary or vice versa), “orphaning” of CDSs (where on group company pays off debt belonging to another) and so on.

So what was once a mostly straightforward instrument (I pay you a regular stream of money, and you pay me a lumpsum if the specified company defaults) has now become an overly legal product. From what seemed like a clever way to hedge out the default risk of a loan (or a basket of loans), CDSs have become an over-lawyered product of careful clauses and letters and spirits, where traders try to manipulate the market they are betting on (if stuff like orphaning or engineered default were to happen in sports, punters would get arrested for match-fixing).

One way to think of it is that it was a product that got too clever, and now people are figuring out a way to set that right and the market will soon disappear. If you were to follow this view, you would thin that ordinary credit traders (well, most credit traders work for large banks or hedge funds, so not sure this category exists) will stop trading CDSs and the market will die.

Another way to think about it is that these over-legalistic implications of CDSs are a way by the issuer of the debt to make money off all the side bets that happen on that debt. You can think about this in terms of horse racing.

Horse breeding is largely funded by revenues from bets. Every time there is a race, there is heavy betting (this is legal in most countries), and a part of the “rent” that the house collects from these bets is shared with the owners of the horses (in the form of prizes and participation fees). And this revenue stream (from side bets on which horse is better, essentially) completely funds horse rearing.

CDSs were a product invented to help holders of debt to transfer credit risk to other players who could hedge the risk better (by diversifying the risk, owning opposite exposures, etc.). However, over time they got so popular that on several debt instruments, the amount of CDSs outstanding is a large multiple of the total value of the debt itself.

This is a problem as we saw during the 2008 financial crisis, as this rapidly amplified the impacts of mortgage defaults. Moreover, the market in CDSs has no impact whatsoever on the companies that issued the debt  – they can see what the market thinks of their creditworthiness but have no way to profit from these side bets.

And that is where engineered defaults come in – they present a way for debt issuers to actually profit from all the side bets. By striking a deal with CDS owners, they are able to transfer some of the benefits of their own defaults to cheaper rates in the next round of funding. Even orphaning of debt and transferring between group companies are done in consultation with CDS holders – people the company ordinarily should have nothing to do with.

The market for CDS is very different from ordinary sports betting markets – there are no “unsophisticated players”, so it is unclear if anyone can be punished for match fixing. The best way to look at all the turmoil in the CDS market can thus be looked at in the same way as horse rearing – an activity being funded by “side bets”.

Liverpool

While I absolutely remain a fan of Liverpool Football Club, and had a fascinating tour of their facilities this morning, I’m not such a big fan of the city itself. Somehow overall the experience there (barring some taxi rides and the Anfield experience itself) was not particularly great.

For starters, it doesn’t help that the city has lousy weather. Being up north, in England and on the coast means there are strong winds, and it can be pretty bad when it rains. Then, when I got off the train station last night, the city seemed dead and the roads that I walked on until I found a taxi were deserted.

And this afternoon, after I had finished my stadium tour and went to the renowned Albert Docks, the experience there was similar as well. Rather dull and without too many people around. And once again the weather didn’t help matters.

And then there is the hotel I stayed in last night. The check in and check out were rather pleasant and I mostly got a good night’s sleep as well, but a former office building converted to a hotel can be a bit depressing. The room was rather small, with the bed stuck to two walls. And a part of it had been earmarked for the bathroom anyway. Even this morning when I got out of the hotel the area wasn’t really bustling (this was in central Liverpool).

And while I found the breakfast to be pretty good (I got a a “large English breakfast”), the service and decor of the restaurant wasn’t particularly appealing. And as I got out of the restaurant, I saw a “up for sale” board on the door!

Anyway, it’s just a few data points. However, in hindsight I feel less bad now about not booking my ticket to York yesterday itself, which would’ve cut my journey cost by 50%. Without a booked ticket, not finding the place particularly interesting meant I could quickly get to the station and take the next train onward.

So here I am, nearing York (I’m finishing this post now in a hurry since I should reach any time now, and I don’t want to scramble). The views on the journey have been rather stunning. The big breakfast meant that I didn’t need to have lunch today. And I had some beer and peanuts and cake on the train and am feeling happy about it now!

The only sore point is that soon after I had bought beer from the cart on the train, the conductor announced that the toilets on train aren’t working. In any case, York isn’t far away!

Cheers

Active aggression and passive aggression

For the record I’m most often actively aggressive. I believe passive aggression is a waste of energy since not only do you end up fighting but you also end up trying to second guess the other party, which leads to suboptimal outcomes. This post is a justification of that.

Let’s say you and I are trying to decide the price of something I want to sell you. There are two ways we can go about it. One way is for us to have a negotiation. I can name my asking price. You call your bid. And if the two meet, well and good. Most often they won’t meet. So one of us will have to budge. We start budging slowly, in steps, until a time when the bid and ask are close together. And then we have a deal.

In most situations (except exceptional cases where there are very few buyers and sellers – read the first chapter of my book. This is within the Kindle sample), this will lead to an efficient outcome. Even if the final price were a little too close to the bid or to the ask, both parties know that under the circumstances they couldn’t get better. And the transaction takes place and the parties move on.

The other situation is where one party publicly states that they are unwilling to negotiate and will do the deal if and only if the counterparty comes up with a good enough offer. If the offer is not good enough, there is no deal. This is similar to the ultimatum game popular in behavioural economics. In this case you are also required to guess (and you have exactly one guess) what the counterparty’s hurdle rate is.

When there is a liquid market, there is no issue with this kind of a game – you simply have your own hurdle rate and you bid that. And irrespective of whether it gets accepted or not, you get the optimal outcome – since the market is liquid, it is likely that your quote will get accepted somewhere.

In a highly illiquid market, with only one buyer and one seller, the ultimatum setup can lead to highly suboptimal outcomes. I mean if you’re desperate to do the sale, you might bring your price “all the way to zero” to ensure you do the deal, but the thing is that irrespective of whether you get a deal or not, you are bound to feel disappointed.

If your ask got accepted, you start wondering if you could’ve charged more. If you didn’t get your deal, you start wondering if reducing a price “just a little” would have gotten the deal done. It is endless headache, something that’s not there when there is an active negotiation process.

Now to build the analogy – instead of a sale, think of the situation when you have a disagreement with someone and need to resolve it. You can either confront them about it and solve it “using negotiation” or you can be passive aggressive, letting them know you’re “not happy”. Notice that in this case the disagreement is with one specific party, the market is as illiquid as it can get – no negotiations with any third party will have any impact (ignore snitching here).

When you express your disagreement and you talk/fight it out, you know that irrespective of the outcome (whether it was resolved or not), you have done what you could. Either it has been resolved, which has happened with you telling what exactly your position is, or you have given it all to explain yourself and things remain bad (in this case, whatever happened there would have been “no deal” or an “unhappy deal”).

And that is why active aggression is always better than passive aggression. By expressing your disagreement, even if that means you’re being aggressive, you are stating the exact extent of the problem and the solution will be to your satisfaction. When you’re passive aggressive, nobody is the winner.

PS: I realise that by writing this post I’m violating this own advice, since this post itself can be seen as a form of passive aggression! Mea culpa.

Glass Houses

When I was in middle or high school, I learnt about the greenhouse effect, and learnt from my textbook that “glass houses” are an example of greenhouses. These glass houses are used to control temperature inside, I read, and this helps to grow a specific kind of plants. While all this sounded good in theory, the problem was that it didn’t really fit the example I had seen in real life.

I’ve known glass houses from the time I was very young, thanks to the one in Lalbagh in Bangalore, which was erected in 1889 to commemorate the visit of Prince Albert Victor (Queen Victoria’s husband) to Bangalore. Lalbagh being located close to home,  I would go there every other weekend, and the routine consisted of walking through the glass house and sitting on one of the bull statues in front of it.

From memory (I’ve hardly gone to Lalbagh in adulthood), the glass house was always empty, except for exhibition times in August and January every year, when it would be full of flowering plants. And the glass house being largely open, the temperature and humidity insight wasn’t noticeably different from that outside. And that meant that I couldn’t particularly appreciate my science lesson that glass houses are greenhouses.

All that changed yesterday when we visited the Palm House in Kew Gardens in London. It was an unusually warm day for February in London, but even then the difference between the inside and outside of the glass house was rather noticeable. The Palm House houses tropical plants from Asia, Africa and the Americas, and consequently a tropical weather is maintained. And this is achieved by dint of it being a glass house (i.e. a grenhouse), and also frequent waterings to increase humidity in the house. And this meant that while it’s still winter in London, tropical plants were blooming and buzzing in the Palm House!

I don’t know what it will cost Lalbagh to maintain a permanent collection of plants in the glass house. Also Bangalore can get warm in summer and maintaining a different temperature inside may not be desirable. Nevertheless, thinking back, it would have immensely helped me in high school had the glass house in Bangalore actually functioned as a Glass House!