Daunting derivatives and Sleeping Beauty
Tuesday evening I boarded the flight from RDU to Dallas, and was confused at first as I looked in the coach section for my seat. 5E wasn’t there. It slowly dawned on me that I had a first class ticket, either as a result of a computer glitch or some unexpectedly generous rewards system. After I wedged my way forward through the human tide and found my seat, I tried not to look too ecstatic. Ah, such a comfy, roomy seat. And so sweet to have a flight attendant who’s attentive, and little luxuries like warm peanuts and hot towels. My neighbor was a precocious nine-year-old boy with a stuffed toy traveling to see his mom. He’d flown this route many times. He wanted to be an inventor when he grew up.
On the trip, I finished The Big Short by Michael Lewis. I picked up the book on the strength of his earlier book, Liar’s Poker, and out of concern that I probably didn’t fully understand the drama in the U.S. and world economy in the last two years. After reading the book, I’m quite sure I didn’t. I now know a little more, but my larger takeaway is that part of the cause is that the mechanisms involved are so complex that they defy conscious human understanding or control. I don’t think this is Lewis’s intended message. He tries to create some heros and villains, or at least intelligent actors and dupes. The intelligent actors had rational thoughts, and realized that subprime-mortgage-based derivative investments were much riskier than advertised. He casts some blame on clueless regulators and unscrupulous investment bankers.
Lewis implicitly suggests the slightly cheering possibility that if people were more reasonable and diligent, they might set up regulatory and other systems to avoid financial catastrophe. I found this encouraging message not very persuasive. There were surely some monsters and frauds involved in the recent debacle, and plenty of examples of unsavory pure greed and indifference to human welfare. But right now it looks to me like the big driver was the financial engineering of investment vehicles that were practically impossible to understand, even for professional investors and regulators, never mind individuals. Creating them was far from unnatural. In nature, technology, and other human systems, greater and greater levels of complexity over time is generally the rule. At some point, there’s simply too much for the human mind to deal with. Our rational systems are overwhelmed, and our fallback emotional systems have no guideposts from experience. Disaster is not necessarily inevitable, but we are less and less in control. Yes, it’s scary.
But life, amazingly, goes on. Sally and I went to the last program of the season for the Carolina Ballet last night, which was Robert Weiss’s version of Sleeping Beauty. The music is by Tchaikovsky, and as Weiss explained at the beginning, the choreography comes in significant part directly from Marius Petipa’s nineteenth-century work. For the most part, this was a very traditional, classical form of ballet. I generally prefer the more abstract athleticism of Balanchine and his school (including Weiss) with modern dance inflections. No matter. Sleeping Beauty was wonderful. Even the junior members of the corps de ballet showed considerable authority with classical technique, and the soloists were masters who communicate emotional depth within that framework. Margaret Severin-Hansen as Aurora was etherial. The costumes were also classically inspired (gowns and embroidered waistcoats and many tutus), and gorgeous.
We got a backstage tour courtesy of our friend Ginny at intermission. It turned out, the action hadn’t really stopped. On the stage behind the curtain, some of the dancers were practicing difficult passages or doing deep stretches. It was disconcerting at first to shift from observer of a carefully planned spectacle to quasi-participant in the assembling of the spectacle, but fascinating. We met Lilly Vigo, a great favorite of ours who was off for the night, and talked about her new baby, who was six months old that day. We examined up close the intricate costumes and saw the swan boat and the huge dragon puppet in the wings. A friend once told me that I was the kind of person who likes to look behind curtains and see what’s really going on, and it’s true. One of my fantasy careers is to be a stagehand.
After the show, we decided to have a drink at the Foundation, a tiny bar on Fayetteville Street that features a huge menu of American-made designer spirits. The downstairs space was crowded, so we settled on stools at street level and did some people watching. Two of our favorite soloists from the company, Lara O’Brien and Eugene Barnes, arrived shortly afterwards, and sat down next to us. They seemed pleased that we were big fans, and we really enjoyed talking with them about favorite ballets, goings on in the company, and the travails of the professional dancer’s life. This is the end of an arduous season for them, and both are looking forward to recovering from injuries over the summer. We’re looking forward to seeing them again.
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