Food and Drink
Since I never post anything, I thought I'd trying doing evelynne's prompts for a bit. Today's is food and drink.

I was a picky eater as a kid, and this has simply decreased, uniformly, over time, to the point that today there are almost no foods I don't like. (It took me until college to eat Chinese food, later in college to like beans, and years afterward to enjoy any vegetables... the very last food to come off the "ick" list was actually lettuce, which everyone always said had no taste but which to me always tasted quite strongly, and badly.) I suppose I'm still not super-fond of curries, but even then I find them okay, just not really my thing.

Conveniently, this has gone hand-in-hand with developing cooking as a hobby. I started doing it a couple of years ago -- cooking as a challenge & hobby instead of "I need something to eat, what's in the fridge?" -- and found that as long as I stuck to yellow recipes and above, I enjoyed it. [Yellow recipes? Yes, I think of cooking in World of Warcraft terms, wherein recipes show up in colors based on their difficulty compared to your current skill. Grey recipes are easy enough you learn nothing, green ones you'll learn from occasionally, yellow ones are at your skill level, orange is difficult at your skill level (almost guaranteed to skill up, but may fail to make it), and red is impossible at your skill level.] I still don't really like making super-easy things, like food out of a package, as I just find it boring and time-consuming.

The net result of this is that over the last few years, [personal profile] anjelabug and I have pretty much stopped eating packaged food. I cook more often than she does, and I pretty much shop for things with one ingredient whenever possible. Since we both love French and Mexican foods, I end up doing a lot from those cuisines. I really should do more seafood and Asian foods, I just don't have much experience with them -- I did make some very nice grilled fish earlier this week, though.

I end up cooking a lot of variety, but I don't need variety necessarily. For lunch on the weekdays, when I'm at work, I end up having tacos probably 4 days out of 5. I vary what exactly I have in the genre of "Mexican food," but it's almost always some variant of tacos, burritos, quesadillas, etc. I like the fact that at a fast-casual Mexican place (like Chipotle or a local chain called Ooba's) I can get a meal made entirely of food without any processed ingredients.

The one drawback of food: not being overweight is a challenge when one loves food. I've spent pretty much my entire life (starting at age 8) overweight, save for a period of about a year a couple years back. I do a lot of exercise, and have been counting calories for many years now, in order to at least keep my weight constant. One thing that makes this easier is that I don't really care about dessert and junk food -- sweets don't generally tempt me unless they're actually sitting right in front of me. What makes it harder, on the other hand, is wine.

[personal profile] anjelabug and I got into wine as a hobby in about 2008. It turns out that Washington is a great place for it, and the center of Washington wineries and wine tourism is... Woodinville, where we live. As a result, a lot of our selections of what food to eat is determined by what will go with our favorite wines -- I think this is why I don't cook much fish. On the other hand, since we now have a reason for [personal profile] anjelabug to avoid wine for several months, it's an opportunity to try cooking different, less-wine-compatible things, so we're taking advantage of that.

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Tonight we learned that our cat, Olaf, while very cute, is not the finest mouser in the world. Having spotted a mouse, he walked up to it and gently poked it with his paw a couple of times to see if it would play. At that point it ran off. Olaf was disappointed.

Unfortunately, grabbing something to catch said mouse in involved letting it out of my sight, so no telling where it's gotten to. Living out in the woods as we do, it was pretty much inevitable we'd see one sooner or later.

At least this finally answers the question why all week long Olaf has been staking out the laundry room at all hours of the day and night despite no apparent reason for it.

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Notional Derivatives Exposure
The top 25 investment banks have a notional derivatives exposure of $700 trillion, more than ten times the GDP of the Earth. While I'm almost invariably optimistic, this cannot end well, and it's likely to end very badly in 2012 -- and in my opinion probably worse than 2008.

How did this happen? I mean, by now we all pretty much know how the housing bust of 2008 happened. Banks sold high-risk loans, and then collected them into securities called Collateralized Debt Obligations (CDOs), which they sold to investors. Due to the number of mortgages gathered, there was no way they could fail to pay out unless the entire housing market collapsed at once, so they were rated AAA. Since they were rated AAA, banks and investors could own them as "risk-free" investments, increasing their leverage. Everything was going swimmingly until the "black swan" event happened -- the entire housing market declined at once, causing CDOs to fall below par value. As soon as they fell below par value, it triggered credit default swaps, AIG went bankrupt, and banks started failing. Chaos ensues.

Amazingly, the banks have contrived to make it all happen again, only bigger this time.

A digression for a moment: what is a Credit-Default Swap (CDS)? A credit-default swap, at its core, is a hedge -- a type of insurance. Say I own $1M of French bonds, but I'm worried that maybe France might not pay its debts -- that is, by owning a bond (or, in the housing bust case, a CDO), I have a default risk -- the risk I may not get paid back. So I can go to an investment bank or insurance company (like AIG), and ask them to write me a credit-default swap on $1M of French bonds. They will quote me a price, say $18,725 for five years. If my French bonds fail to pay out their full value of $1M within 5 years, the insurance company will pay me the difference. Thus, I no longer bear default risk -- I have sold my default risk to someone else by paying $18,725. (Incidentally, this really is the price of a $1M French CDS as I write this post.)

The first interesting part here is that the bank or insurance company that writes the CDS does not have to set aside $1M. It's like regular insurance -- they don't have to be able to pay every single policy holder the maximum amount of their policy at the same exact moment, as this would be absurd and no insurance would exist. However, in this case, French bonds (the asset I'm insuring) are AAA-rated (yes, by the same ratings agencies that rated subprime housing CDOs AAA), and thus considered "risk-free." The bank or insurance company thus can set aside almost nothing to cover this CDS; they can write CDSs for vastly more money than they have.

Modern banks are hackers. They no longer make money the way they did in the 90's and before, off of fees -- taking a small, fixed percentage of many large transactions. Instead, they've found a different tactic: exploiting. Not in the "they're exploiting the workers!" sense, but in the computer-hacking sense: they look at a system, see where the system's internal interactions make bad assumptions, and then push against those to create the result they want. Goldman Sachs gave us a fantastic example of an exploit back in 2008: they gathered the worst mortgages they could find -- the ones most likely to fail -- into a CDO, then marketed and sold it to their own retail brokerage customers. And then for ultimate chutzpah, they borrowed those same securities back (with the loan denominated in shares, not dollars), sold them to their customers again, and then repaid the loan after the housing bust in now-worthless shares. That's not an investment, that's an exploit -- they sold bad debt they knew was bad twice to the same people, without taking any of the cost themselves. (No one went to jail for this scam.)

Here's the new exploit: naked credit-default swaps. A naked credit default swap is simply purchasing a credit-default swap on an asset that you do not actually own. At first this doesn't seem too crazy -- it's like buying a life insurance policy on somebody else. But consider the consequences: if I buy a credit-default swap on $1M of French debt without actually owning any French debt, I've paid $18,725 for somebody to owe me up to $1M if France defaults.

This is not a hedge. This is not an investment. This is a bet. It's no different than going to a bookie and saying "will you give me 53-to-1 odds on France to lose?" It's flat-out gambling -- the Wall Street Casino has genuinely become a casino -- only since it's disguised as a derivative, it's legal. And just like that bookie, the banks or insurance companies they're buying from don't actually have enough money to pay everybody at once -- they're relying on the fact that they'll win some and lose some.

I've used French bonds as my example here, and there's a reason for that. After the collapse of the housing market, banks needed something else to invest in and speculate on -- residential CDOs weren't selling anymore. So they settled on something stable, something safe, something no one could complain about -- sovereign debt. A lot of it is European sovereign debt -- that same debt we've been hearing about in all these "European debt crisis" news stories. You can buy a CDS on French debt for 187.25 basis points ($18,725 for a million dollars in debt.) Greek CDSs are going to run you 9949.1699 basis points -- i.e. insuring a million dollars in Greek bonds will cost $994,917, because the people writing CDOs consider them more or less certain to default.

But only a couple years ago, Greek sovereign debt was "safe" -- highly rated, risk free. People writing these CDSs now considered more or less certain to default didn't have to set aside much capital to cover them at all. Of course, it's not like every European country is really going to default at once -- though I wouldn't rule out Greece, Italy, and Spain all doing so in rapid succession. But it turns out that they don't have to.

Leverage ratios (the ratio of potential debt to total equity) on the top 25 banks are incredibly high -- and when you're leveraged 25-to-1 a loss of 4% on your capital wipes out all equity, which means you're bankrupt. They don't have to lose everything to lose everything -- even (relatively) small losses can result in bankruptcy.

Who sold these guys all these CDSs anyway? AIG went bankrupt and had to be bailed out in the housing crisis, so who's the bigger fool? There are two answers, and both are shocking. The first is that AIG itself is once again one of the largest writers of credit-default swaps, so if Europe implodes U.S. taxpayers will get to bail them out again. The second is that the big banks write CDSs to each other. Consider the amazing result: banks have combined gambling with counterfeiting. Goldman Sachs goes to Citigroup and pays $20k to buy a $1M liability. Citigroup goes to Bank of America and uses that $20k to buy two more $1M liabilities. Bank of America goes to another bank, and the cycle repeats. Each bank owes all the others more money than it has. This is how banks with $15 billion in assets get a notional derivatives exposure (i.e. the maximum they could theoretically owe if every investment went bad at once) of $700 trillion. Of course they won't have to pay all of that at once -- but they only have to be hit with a tiny fraction of it to go bankrupt. The fact that everyone else will owe them at the same time will do almost no good -- a bank that can't pay now is bankrupt, no matter what its receivables (from other equally-bankrupt entities) may be.

This is a secular deleveraging cycle, which we haven't seen since the Great Depression. The only way out is through, and it won't be pretty for a while.

[manually crossposing from DW since LJ's crosspost function is down; apologies if a duplicate of this post appears]

Over the past six months, I have somehow picked up cooking as a hobby. It's kind of strange, as I never liked to cook before and kind of regarded it as a chore, but as I get better at it I find it more interesting. (Of course, this also means I mostly like to cook things I find interesting, which means lots of trying new, complicated things but not much just making routine dinners; from what I understand this fits very well into the stereotype of men who cook. Oh, well, I get good food out of it.)

Tonight we had pan-seared steaks with a green peppercorn sauce recipe from my favorite food blog, with the addition of some demi-glace, because it makes sauces more delicious. It turned out very nicely.

It's been an interesting experience moving from carefully following recipes to increased improvisation. The fact that I can throw together, say, veal Marsala, or chicken Parmigiana, or wild mushroom risotto without a recipe still kind of surprises me every time I do it. (Indeed, I find I often get out a cookbook and look up a recipe anyway, and then proceed to ignore or modify it -- I feel like I need to have the recipe even if I pay little attention to it.

Other things I have learned: Somehow the French have discovered how to make food that is better than everybody else's food. I just picked up one French cookbook and seem to have filled my Amazon wish list with others. We've also been trying all the local French restaurants; the food at casual, bistro-style French restaurants amazes me and makes me wish we had them everywhere (as they, presumably, do in France.) Alas, we live in the woods, and going out for French food of any sort requires a 45-minute journey into Seattle. Still, I feel lucky to be living 45 minutes from a major metro area; back in Indiana I wouldn't have been able to get it at all. At this point we plan on taking a food-and-wine vacation to France next year; we'd planned on doing it this fall, but this year we kind of spent all our discretionary income on home improvement instead.

Also, kitiara pointed me to Penzey's Fox Point Seasoning. The stuff is amazing; we dump it on every vegetable we see these days, not to mention chicken (and, to be honest, we at least try it on most everything else.) It's just salt, shallot, chive, and scallion, but it's so good. We also joined a local CSA and get a big box of fruits and vegetables delivered every other week, which has given us the opportunity to try all sorts of things we never would have thought to buy otherwise -- it turns out that beets and turnips are delicious. (I love Brussels sprouts, too, but my wife thinks they taste like armpits so I don't eat them much.) The CSA is frankly very expensive; it's like buying all our vegetables at Whole Foods and I could get them a lot cheaper at the local grocery, but the advantage of it is that it sends me stuff I'd never buy at the local grocery -- I wouldn't have ever thought to pick up chard, kale, beets, arugula, turnips, pluots, nectarines, etc. because I'd never really eaten them before. In the long run we may just start going to the farmers' market instead, but for now it's been a fantastic way to try new fruits and vegetables.

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Eleven years!
Yesterday was my 11th anniversary. It was a low-key anniversary this year -- neither of us really wanted anything in particular gift-wise, and Anjela had both a cold and a migraine, so we didn't do a great deal to celebrate.

Nevertheless, I'm delighted to have spent 15 years with her (we dated a good long while before we were married) and we're as happy as ever. We've changed in innumerable ways, but always together, so we fit each other now as well as we ever have. It kind of amazes me how compatible we are at this point -- I mean, we played a computer game with each other for seven years, and we even have pretty much the same sense of aesthetics now (which is really showing now that we own a house.) While we both have a lot of activities of our own (my tabletop RPGs, programming/security projects, and computer games; her writing, cowriting, knitting, and Internet fandoms), we still share these with each other and can delight in how much the other enjoys them.

Back in high school and early college, I was never sure I'd even get married -- it just wasn't that important a concept to me. Now I'm one of the most married people I know (and the others are all on LJ, too. :) ) and am very happy that way.

Oh, speaking of aesthetics and things that happened yesterday, we finally got our table delivered from Geek Chic. It looks beautiful, and we inaugurated it with a game of Arkham Horror with two expansions last night (for the uninitiated, it's a board game with enough pieces it wouldn't have even fit on our previous table, and also happens to be our favorite board game.) I really need to get my tabletop game (Spelljammer ported to D&D4E) started now.

From Public

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BlackHat 2011/DefCon 19
I spent last week in Las Vegas, for BlackHat USA 2011 and DefCon 19 -- my annual security conference pilgrimage. Overall impression: the quality of the actual presentations was below-average this year, but it was still an educational experience, a good professional networking event, and probably the most fun I've had at DefCon so far.

Rather than recount everything here, I'll link to my full trip report on my security blog:
BlackHat 2011, Day 1
BlackHat 2011, Day 2
DefCon 19, Day 1
DefCon 19, Day 2
DefCon 19, Day 3

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Day 3 in Germany
I got up today having managed about 6 hours of sleep between 11 and 8. Unfortunately, I'm still quite sick.

Germany does not seem to have drug stores in the sense we do in the United States. Instead, there are "apothekes", which have pharmacists and sometimes even doctors on staff. Nothing is over-the-counter, though most things are prescribed by pharmacists on the spot, and groceries and discount stores don't appear to carry pharmaceuticals of any sort. You have to ask a pharmacist for so much as a Tylenol. The ones I tried, however, seemed unfamiliar with the very idea of cough medicine, and only offered me things that were either paracetamol and caffeine or the same with an added antihistamine. While that reduces the fever and might help me sleep, it does absolutely nothing for the constant coughing which will make giving presentations tomorrow rather challenging. At this point I wish I could find so much as a cough drop.

So, taking some Excedrin I brought from home, I went down to Nürnberg's old town for a couple of hours, where I saw a variety of medieval architecture. It's still kind of amazing as an American to see how old all the buildings are, even those just housing typical shops these days. The Nürnberger Burg towers over the city and is absolutely enormous -- I can't imagine attacking it with only medieval foot soldiers and cavalry. I was able to walk around in its inner court and gardens, though the castle interior is accessible only via German-language guided tour.

I tried to visit the German National Museum, but alas, it's closed Mondays, so due to my luggage misadventures yesterday I'll be missing it this trip.

I stopped at several food stands for Nürnberg bratwurst and various German snacks I didn't fully recognize until I ate them, and also picked up some chocolate and lebkuchen for [personal profile] anjelabug and I to eat when I get home. I am now back at my hotel to rest a bit and change into suit and tie and head over to the conference that is my ostensible reason for being here.

Also, you would think a hotel that caters to business travelers would not make it impossible to press a shirt. There's no iron, and the front desk doesn't have one -- there's a laundry service that promises a 48-hour turnaround if you give them clothing by 8am, which is too long to be of any use even had I noticed it the moment I checked in. No problem, there are alternatives for getting wrinkles out of shirts: except the hangers are all the unremovable anti-theft kind, the bathroom exhaust fan runs all the time and cannot be turned off, the hair dryer is built into the bathroom wall, and there are no flat surfaces in the bathroom more than 3" wide other than the toilet seat (out of reach of said hair dryer.)

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Journal Move
As is probably obvious by now, I have moved my journal over to Dreamwidth, because LJ barely works anymore. (Also DW has a lot of nice features to it now and is still actively developing things that don't require Cyrillic mode to use.) I'll retain my LJ account for following/commenting, and will crosspost all public entries, so you're not likely to miss much on LJ, but at this point the LJ version will be only a copy of the DW one. If any of my LJ friends are also on DW, let me know so I can friend you there.

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Murphy's Trip to Germany
I made it to München (Munich) last night, relatively late. Once I arrived, the Deutsche Bahn people directed me to the Hauptbanhof Lost and Found office... which, as I had suspected, closed at six. The DB staff said they couldn't do anything about this despite that they were the ones who had told me to come down.

However, while I was standing forlornly outside the Lost & Found, a random stranger named Gabrielle introduced herself and asked what the problem was. I explained my situation, and she marched over to the DB info desk, had a long conversation in German of which I could not understand a word, and someone unlocked the Lost & Found and got me my suitcase. I thanked Gabrielle profusely, she told me to do something nice for someone, and I was on my way.

It was now around 7:00pm, and not only was I exhausted (having now been awake for 27 hours plus standing for 5 at the Nürnberg Hauptbanhof), I was also starting to feel sick, which continued through the evening. I now have a pretty nasty deep chest cough, as well as the usual nasal symptoms of a cold. Not really wanting to go through another 3 hours of trains in this condition (ending with a 10-block walk at 11pm in Erlangen), I stopped into a Courtyard hotel to try to get a room. No luck there, but they referred me to the Best Western Hotel Mediocrity, where I was able to procure a room that had the bare essentials (bed, shower, Internet.) The hotel lobby had some pretty spectacular 80's-ness, and now I wish I had gotten a picture, because it looked like the entrance to a disco.

I dropped into a nearby restaurant (I don't even remember what it was called; it was an open-air bar named something that started with M) for some mushroom, truffle, & arugula pizza and a pint of Weissbier. Now, I don't like beer, but it turns out that Weissbier, the national brew of Bavaria, is actually very good. At least, it is when it's on draft, and in Bavaria -- I'm not sure if this would hold true everywhere.

The hotel room had enormous windows that open all the way and have no guardrail or screen or anything -- in America they would need to have warning labels not to throw babies out of them. This was quite pleasant as the one thing for which I've had absolutely no cause for complaint this trip is the weather, which has been mid-60's, radiantly sunny, with a light breeze the entire time.

I got a rather miserable night's sleep as my cold had gotten worse, to the point where I have a fever with alternating chills and sweating. Managing temperature was challenging since the bed contained no covers save for a 3-inch-thick down comforter (and I mean no other covers, not even so much as a sheet.) I did finally manage to get 8 hours of sleep over the course of the 11pm-9am period, though, which felt better.

Once I managed to get up and showered, I felt good enough to get out of the room a bit, figuring I didn't come 5100 miles to sleep in a hotel room and did not intend to let a common cold change that. (I would take something for the cold, but so far as I can tell, stores in München do not open on Sundays. Like, any stores -- not only did I pass six different pharmacies that were closed Sundays, even the tourist trap stores full of souvenir kitsch were closed. Hopefully tomorrow I can get something.) Given where my hotel was, I had an easy time walking around downtown München, which is a beautiful city of old Baroque architecture and huge breweries. After going from Karlsplatz to Marienplatz, I noticed a tour bus company offering loop tours of München that stopped at Schloss Nymphenburg, so I paid the fare and hopped onto the open-topped double-decker bus.

At first I stayed up top, which gave a beautiful view and exposed me to the spring breezes that would have been very pleasant if I weren't having chills, so I went down inside the bus. Schloss Nymphenburg is a spectacularly enormous Baroque/Rococo palace built by the Electors of Bavaria as a summer home (each of them making it bigger), surrounded by a "garden" which is so huge it basically serves as München's version of Central Park. I toured the palace, which was interesting albeit very typical of the period, which isn't one of my favorite architectural styles (huge paintings of people covering every surface, etc.) It is exceptional more for its sheer size than uniqueness. The park was lovely and had several outbuildings, some of which could have been considered palaces themselves from their size and ornateness.

The most impressive by far, though, was Magdeleneklasse, a chapel/meditiative retreat for the Electors. The building was deliberately designed in the style of a late-Roman ruin on the outside, with the chapel in the style of an undersea grotto done in concrete and seashells. I've never seen anything like it -- it looked like something out of a fantasy story and not a real place at all. I took tons of pictures; seeing that alone was worth the trip to Schloss Nymphenburg.

Having been walking two hours while sick and feverish, I was pretty near collapse at that point, so I got back on the tour bus and rode it back to downtown München (passing BMW Welt along the way; had I been feeling better I would have checked out the museum.) From there I retrieved my luggage from the hotel (having had to check out at 10am), walked to the Hauptbahnhof (which I gather means "main train station"), and grabbed some quiche to eat. There are actually a lot more places serving either Italian food or various German fusion stuff ("currywurst" was everywhere) than straightforward German food.

So now I am on a train back up to Nürnberg, where I will transfer to a train to Erlangen and finally check in where I was supposed to be last night. Since I'll have my suitcase I can't really tour Nürnberg today, not that I really feel up to it anyway, but trains between Nürnberg and Erlangen are more or less continuous (several times per hour), so I'll get a chance tomorrow. The Bavarian countryside out the train windows is quite pretty, with little villages of white-walled, red-tile-roofed houses and churches surrounded by rolling farmland and pasture; it's still a little early in the season for all the vegetation to be present, but it's still nice. I wish I had an additional day to do a tour of Schloss Neuschwanstein, as I'd love to see the Bavarian Alps and it looks amazing, but I guess that will have to wait until my next trip to Germany (whenever that is.)

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(no subject)
So, I did in fact miss my train, though I'm not stuck in Frankfurt. Actually, I never had it at all, as my ticket was from the wrong Frankfurt station (I wanted Frankfurt Flugh. instead of Frankfurt Hbf.) However, for about 30 Euro I got that worked out and got on a train that went where I needed it to. There have been some very nice views from the train windows.

Unlike the Frankfurt airport, the rail system has all signage, tickets, documents, etc. in German only, so it is proving considerably more difficult to navigate. I'm sure I'll manage, though. Also, like the airplane, the WiFi on the train doesn't work very well -- I got on long enough to make my previous post, and was unable to connect again for the next hour. It's a T-Mobile Hotspot, so it's not free anyway.

Once we got out of Frankfurt (a pretty standard-looking heavily industrial city), Germany looks... about like I expected it to look, really. Rolling hills, lots of small to medium-sized towns with many tile roofs, surrounded by pasture and farmland. We also passed a vineyard a moment ago. I like it, though it would be prettier a month from now when the foliage has all grown in; right now the trees are still pretty sparse.

I spent about an hour talking to a German musician on the train about our lives, differences and similarities between our countries, etc. His English was sufficient to hold a conversation with occasional playing of charades (and in any case vastly better than my German, which pretty much ends with "Guten tag" and "Danke.") It's kind of isolating to be in a country where you can't necessarily communicate with the people around you, and I'm finding it an interesting experience.


However, here's where things go sharply downhill. Read more...Collapse )

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