Month in Review, February 2009
[Previous Month In Review available here: Jan 09.]
[A complete set of 2008 Months In Review available here: Dec 08 Part 1, Dec 08 Part 2, Nov 08, Oct 08 Sep 08, Aug 08, Jul 08, Jun 08, May 08, Apr 08, Mar 08, Feb 08, Jan 08]
Amid all the hoopla regarding capital markets and houses as financial assets, we can easily forget the home’s essential function – to be a protected, private, personal space – a point that was driven home to me in a story that began with black humor and ended simply blackly, in There must be a moral in here somewhere:
At first read, this Telegraph story induces guffaws:
A man whose home was so full of rubbish that he had to build an intricate network of tunnels to get around may have died after losing his way in the labyrinth.
Then it rapidly becomes sobering.
Investigators believe Gordon Stewart, 74, died as a result of dehydration, after becoming unable to find his way out of the mass of carrier bags, boxes, old furniture and other junk.
Bad enough that the man died, trapped in a maze of his own making.
I built it – I can find my way out – can’t I?
Sometimes a blog is a symbolic post?
Shortly thereafter (”There are no coincidences” – Sigmund Freud), I came across the potentially life-changing work being done by the Metropolitan Boston Housing Partnership and Jesse Edsell-Vetter to deal with the problem of Hoarding and housing: Part 1, more prevalent than you think, and Hoarding and housing: Part 2, helping the hoard and the hoarder:
In the course of writing there must be a moral in here somewhere, about an Englishman who died of suffocation inside his home filled with clutter he had hoarded for years, I found myself reflecting, a tad depressed, about variations of hoarding I’ve seen over my years in affordable housing.
To some degree or other, we all hoard – in the sense that we keep things longer than we rationally need them. This becomes really evident when, as we did recently, one moves one’s office to a new location. You have to take everything down from the shelves, out of the file drawers, from the office cul-de-sacs. Old briefcases. Leather carrying cases for laptops no longer made. Previously used notebooks. We all have such things in our offices, to say nothing of paper, paper, more paper. Things forgotten and then, when discovered in packing, revitalized. Each represents a tiny talisman of our selves, our past, our memories. Yet, if we are rational, into the gray plastic trash trundle buckets it all goes.
Yet hoarding is a psychological disease, as I discovered when stumbling over an article in the MBHP Newsletter:
Bedroom in a hoarder’s apartment
In There must be a moral I had mentioned the visible signs – the untended garage, the window packed from the inside with domestic detritus – that could have alerted the neighbors to the occupant’s emotional distress.
Who is seeing me whom I cannot see?
In that post I implicitly endorsed attentive observation, what Lars Thorwald might have called peeping in Rear Window, and explored urban privacy issues in a two-part post that attracted quite a bit of positive comments, Cities imply optionality and privacy: Part 1, the virtue of peeping:
Stella: We’ve become a race of Peeping Toms. What people ought to do is get outside their own house and look in for a change. Yes sir. How’s that for a bit of homespun philosophy?
Jeff: Readers Digest, April 1939.
Stella: Well, I only quote from the best.
People live in cities to be physically close to one another – for business, social, religious, political, or intellectual reasons. Draw a half-mile radius around a rural farm and you may touch only livestock. Draw it around a suburban house and you may encircle five thousand people. In a central city, you may englobe fifty thousand people. The physical dimensionality of cities – going up – couples with the densely packed infrastructure of cities – townhouses and apartment flats instead of acre lots – to create human-contact options.
Lots of options.
All the world’s a rear window, the men and women in it merely players
People who live in the city have the option to get face-to-face with many people very quickly. We may find each other in offices, restaurants, movie theaters, museums, cafes, clubs, stores, parks, and sidewalks. We spend our days, and for many of us our evenings, amid the hurly-burly of urban life, and we enjoy that optionality. As such, cities enable the formation of specialized groups.
Meanwhile, even as we are social much of the time, we also value our privacy, especially in the evenings and at night. We need the optionality not to have other people in our faces. We want soundproofing for quiet enjoyment, high-tech ventilation to whisk away the smells of what’s rotten in Elsinore Towers. We want the personal touch of doormen, and the impersonal touch of never-sleeping security cameras.
In short, we want the optionality to see with the privacy of not being seen.
It is human curiosity to wonder at the lives on view
, and Part 2, the price of peeping:
Now that he has embarked on intervention, Jeff cannot stop. When Thorwald is away, Lisa burgles Thorwald’s apartment, finding Mrs. Thorwald’s jewelry. Thorwald returns as she is signaling to Jeff, and though the police arrive, Jeff pays the price of peeping: Lisa signals, and Thorwald looks across the courtyard into Jeff’s rear window:
In the moment of our seeing, anonymity is lost
The rear window is thus symbolically the window into our private soul. In our work environments, everybody likes an office, but we learn to accommodate workstations and partitions. We sacrifice a bit of our privacy because we can afford to do so during our daylight, public hours.
By contrast, Thorwald has had his privacy violated. Murderer though he be, his scraps of dialog ring with the bewilderment of the urban dweller suddenly denuded of the veil of his privacy. As he stalks Jeff in Jeff’s apartment, out from his comes a monolog of lamentation:
What do you want from me? … Your friend – the girl – could have turned me in. Why didn’t she?
What is it you want? A lot of money? I don’t have any money.
Say something.
Say something! Tell me what you want!
Our first non-jeff POV; his tormenter as seen by Thorwald
Extending the morality-of-peeping question into the Observant Urban Herd, we looked at the statistical proof of the common-sense notion linking Broken windows, broken rules:
You leave your bike. You return. An annoying flyer is stuck on your handlebars. What do you do with this trash?
Does the background influence the bicycle?
He could:
1. Take the flyer with him
2. Hang it on another bicycle (which the researchers counted as littering) or
3. Throw it to the ground.
When the alley contained graffiti, 69% of the riders littered compared with 33% when the walls were clean.
That, dear readers, is a correlation. Change one variable and double the rate.
Moving outward from the kingdom of the skull into the realm of personal consumption, we looked at people who suddenly discovered that volatility is not Nothing but upper ups?, and the aggrieved land developer who claimed he was bilked by his bank in Rug? What rug?
Which then is the proper metaphor for what happened to Dave Brown of
New York Times tell it, the rug was pulled:
Banks Foreclose on Builders With Perfect Records
As we’ll discover, this headline is wrong … but let’s save that for the Times’s unintentional-comedy correction.
Summing up: the Times wrote a story headlined Banks Foreclose on Builders With Perfect Records, except that:
The bank cited didn’t foreclose – it appointed a receiver.
The builder didn’t have a perfect record – it was in default.
The builder wasn’t put under by the bank – it had decided to dissolve before the bank acted.
Under those circumstances, if you were the bank, and your money were hostage to unfinished houses being completed by a builder who’s just announced they’re throwing in the towel, would you sit still?
Life was free and easy when everybody paid their bills
Conversely, defaulting borrowers are no picnic for the lender, as we explored in The difference between property and assets:
Pay your loans or I’ll foreclose, threatens the lender, believing that to be an effective threat.
Or is it?
As illustrated a The New York Times article from a couple of months, there’s a huge difference between property, loans, and assets:
Who sells defaulted or soon-to-be-defaulted loans?
· Entities that need cash now.
· Entities that lack the expertise to make the quick and sharp choices necessary.
· Entities that have some expertise but other fish to fry.
· Entities that have written the loan down below its expected resale trading price, so they can get an earnings bump by disposing of the property.
We Sellers need cash now!
The entanglements of securitization can lead to the amusing situation of the borrowing sitting placidly on the sidelines while its creditors direct all their fire on each other, as in Tranche warfare, which in turn can lead the lenders to go All together now over the cliff:
Last-minute deals are a specialty of capital-crunch showdowns.
Lots of ticks left
An executive with Broadway Partners of
“We continue to operate the building!”
“You’re not fooling anyone, you know. Can’t you just take him now?”
“It’s against regulations!”
Ironically, Broadway Partners is exactly the same kind of critter as those foreclosing it. From their web site:
Broadway Partners is a private real estate investment and management firm headquartered in
Out of similar financial wreckage, 650 years ago, the merchants and princes of
With its rival
The first recorded public bond is dated January 1150 when the municipality raised 400 lire by granting to investors the tax revenue raised from stallholders in the marketplace.
This is exactly analogous to the Redevelopment Areas (RDAs) used today by California municipalities to finance public infrastructure – or, in a slightly different way, to the repayment of Sao Paulo’s slum upgrading infrastructure costs by levying a surtax on water and then financing the stream via an IDB loan.
Municipal infrastructure, financed via a surtax on water: Jardim Iporanga,
Even today, many of the world’s poor suffer from living in financially disabling environments such as Nigeria, the disabling environment: Part 1, no law, no money, and Part 2, no finance, no rights. Perhaps that’s why
Whose fault is the implosion following our hyperinflated pricing bubble?
I couldn’t make things ADD up …
Not subprime lending. Not CRA. Not US profligacy. Maybe it’s starvation for yield, or maybe it’s a kind of currency smuggling by manipulating the exchange rate by China, as speculated in a deliberately provocative Washington Post Op Ed, What OPEC Teaches China, by Sebastian Mallaby.
Pointing the finger in print
At his confirmation hearings last week [January 25, 2009 –Ed.], Tim Geithner branded
One of us has tentacles … the other is a manipulator
Finally, during the month I started an extensive six-part post, using as its principal text Steven Johnson’s well-written story of the discovery of cholera prevention, in The ecology of a slum: Part 1, inflows, and Part 2, outflows:
Although Johnson’s focus in municipal health and disease, his meticulous research and vivid writing unwittingly provide a detailed portrait of the ecology – both physical and economic – of a slum.
Slums, you see, do not vanish; they evolve and grow into cities.
If we want to improve slums, we have to see them as ecosystems – spontaneous self-generated communities, self-organized, economically rational, economically efficient, adaptive and robust. We may not like the slums (like Dharavi in Mumbai, Kibera in Nairobi, or Sao Paulo’s favelas) we may wish them away or wave our hands (or our bulldozers) to disappear them. Yet they will return, resisting our efforts almost as if conscious, unless we see them as organic and dynamic, and come to understand how a slum dies.
Join me then in touring the ecology of a Victorian slum.
1. The city as organism
In economic, demographic, and physical senses, cities are organisms, a fact the Victorians recognized:
Victorian slum; note the inward-sloping paving
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