The noise is incredible. Sukhumvit is three lanes in each direction, and red taillights stare from both sides as far as one can see. Scooters nuzzle up to huge tractor-trailers in a bid to gain a few more centimeters of progress. Taxi drivers call out to potential fares. A policeman’s shrill whistle pushes back on the din and attempts to draw some order on the chaos. I look over at the officer and notice that while he is waving his arms and making a show at moving traffic, his eyes never leave the row of women selling themselves. He almost certainly gets a cut.

At one stall, a lady-boy is busy shuffling bottles around. She looks up at me and smiles, inviting me to sit for a drink. She’s beautifully made-up, and her words and actions are cute and playful – the perfect bar hostess. She has a top on that reveals just enough cleavage that you can see that she has at least started the physical transformation into whatever it is she wants to become. I smile back and wave her off – No more drinking tonight.

The smells are a complicated mixture of old and new. Sweet strawberry and apple scents from the hookahs on Soi 5 mix with the smells of garlic, prik kee noo chilies, and nam plah fish sauce from the ever-present food carts. Diesel fumes jar against the smoke from cheap incense sold at one of the tourist stalls. The older Caucasian gentleman walking in front of me smells distinctly of too much Old Spice, while the overweight Middle Eastern man in flowing bisht I just edged past reeks of masala and sweat.

At the corner is what I’ve been looking for. Food stalls are everywhere, but I’ve been coming to this one for years. Two pots simmer away, and I point to the lighter colored one and then the yellow noodles. The lady nods and gestures to a line of cheap plastic tables and stools near the curb. As I sit, I notice that under the stall lies a dog, fat as a pig and with teats stretching out from her belly like stubby octopus arms. She’s oblivious to the chaos around her in the way of city strays across the world. She’s safe under her aluminum and plastic shell, free from the possibility of a crushing step or well-placed kick. Like all of us, she knows that the night in Bangkok is the best part of the day and she’s making the most a dog can of it.

My noodles arrive. I pay my 30 baht and add dried chilies, pickled chilies, and chopped peanuts in almost equal amounts, followed by a small spoonful of sugar. A quick swirl to distribute them through the liquid and I take the first sip from a cheap stamped-metal Asian-style spoon. The liquid is OMG hot, and as I choke it down I manage to get a big chunk of chili tucked up just under where my sinuses drain into my throat. No choice but to push forward at this point, so I grab a tangle of noodles and noisily slurp them up. They clear the chili, and as they slide into my gut I sit back and take what feels like the first real breath I’ve had all day. I notice that the old lady who tends the stall is looking at me and smiling. I give her the thumbs-up sign and we both laugh.

I get back to work. The soup is amazing as always. It is pork-based, with that rich umami that comes from pork bones boiled for oh-so-long. The noodles are fairly typical egg noodles, and their purpose is really just to add some body to the soup and small pile of toppings added just before serving. The toppings consist of a couple of thin slices of red-stained pork, another small pile of what I think is sliced bits from the pig’s heart, and an assortment of fish balls with two or three bright green leaves of something fresh laid on top to blanch in the soup’s heat as the bowl is carried to the table.

I’m almost half-way through the soup when I look up and see an overweight white woman looking at me with an odd mixture of fascination and disgust. From the looks of it she’s in her mid-fifties, and I imagine that two things disturb her. First, I’m eating at a street stall while a few meters away a pile of garbage is rustling with long-tailed rats grabbing juicy bits of things that people like me left earlier in the evening. Her bright pink, red, turquoise, and yellow muumuu might as well be a giant blinking neon sign floating over her head that says “AMERICAN TOURIST ON FIRST TRIP TO ASIA”, so I’m guessing that she arrived late that night and came out from one of the four or five-star hotels nearby for a quick look around before going in to shower and sleep. She’s appears to be in shock at the overall scene, and I am sure that a thousand dollars couldn’t convince her to try a sip of this incredible soup.

More likely, however, her fascination with me is not so much what I’m eating, but how I’m eating. I’m deep in the bowl, hunched over and sucking up the noodles and soup in equal and loud measure. You have to do it this way – Hold the noodles in your battered pink plastic chopsticks too long and the delicious soup drains away leaving you with a mouthful of bland starch. Try to eat too fast and all the next day your tongue will be able to play with flaps of skin hanging off of the roof of your mouth.

The trick is to slurp hard and mix air in with the soup as you eat. The air cools the liquid to a merely painful, as opposed to dangerous, level, and it helps aromatize the chili, garlic, and other spices, allowing you to get a deeper and more rounded flavor from them. So you slurp, you slosh, you get your face down into the bowl, and you assume the intense demeanor of someone with an important and difficult task to accomplish. Your eyes narrow to slits against chili and steam. Lips pucker out to gingerly grab the top strands of blisteringly hot noodles. Your chest heaves with each influx of heat and air, and sweat blossoms from every pore in your body as you make small grunting noises. It’s as close to heaven as I’ve even been in public, but for this lady looking at me I am something she cannot understand and perhaps even the topic of a postcard she will write to her church group tomorrow while sitting in Starbucks after the morning group tour.

In the few seconds we are staring at each other, my mouth hits the jackpot. There are always two or three in each bowl, and this is the first one tonight. My eyes roll back in my head a little bit as I lift away from the bowl. There is a rivulet of liquid running down my chin, soup or sweat I don’t know or care. I chew again and get another burst of flavor before the pea-sized source of my pleasure dissolves and I swallow. I’m not sure what this is, but it’s why I come back to this same stall every time – sometimes multiple times – I am in Bangkok.

I know that it is deep-fried, and the closest I can come to describing it from a western vocabulary is a small piece of crispy pork fat, but that doesn’t do it justice at all. There’s definitely pork and shrimp in it.  And salt, and maybe garlic, and most likely other things that I can’t even guess at. It arrives in your mouth still crispy, and I swear that even before you bite into it you know that it’s there. When you do bite into it, it crunches once in a single staccato counterpoint to all the soft noodles and then immediately dissolves into an intense burst of rich flavor that caresses your mouth for an instant before you double down and renew your efforts in the bowl, trying to find that next Nirvanic morsel. That’s what I do, and I don’t look up again until the bowl is empty except for a few chili flakes stuck to the bottom. When I do look up, the lady is gone, but Sukhumvit is exactly the same.

I wipe my nose and mouth from the roll of toilet paper sitting on the table, stand up, and am lucky enough to immediately catch the light so that I can cross the street and walk back to my hotel. My back is now plastered with sweat and I’m thankful for the short haircut I got that afternoon. The heat from the soup and the chilies has stood every hair on end and opened every pore on my body. I feel like a live antenna, and I am blinking a quick Morse code to keep sweat out of my eyes. Ten minutes later I’m in the ice-cold hotel room and stripping off clothes to shower. I leave the water at a cool temperature and stand there for a few minutes. I’m very alive, the world is very good, and I’m going to sleep very, very well.

The trip started because of a simple post by Sherry — no last name necessary. She asked a rhetorical and highly provocative question about the new health care bill that garnered from one of her friends the label “jackass” and listed the post as “asshattery”. Two things struck me about the exchange. First, the person who made the jackass-asshattery comment had summarily been defriended, so the original post was gone and he was no longer around to see what was being said. Second, and the only reason that I knew it had happened at all, was that Sherry took the offending post and placed it as her status, talking about how rude the post was, how she wouldn’t stand for it, and how he was now gone.

Fair enough, I suppose, although it seemed pretty in-your-face to defriend someone, then take their post and put it in your status. If someone calls you a jackass and you don’t want to be their friend any longer, that’s entirely up to you. Posting about it and calling the person rude, when the instigating comment was yours and was completely designed to evoke a strong reaction, seemed incongruous. Also, as neither the late friend nor anyone else was still able to see the original post (As I learned later, when you get defriended, everything disappears into that great Facebook in the sky.), there was no way for any of us to know if the post had been edited, selectively quoted, or kept in its original form.

So at this point I entered the rabbit hole by asking whether, just perhaps, Sherry’s post might be a little over-the-top. We soon went through the “It’s my opinion” phase and I suggested that we discuss, or debate the topic a bit. Things started out slowly — Sherry wasn’t interested in debating — but the deeper down the rabbit hole I got, the more cookies were laid on tables and the more potions I was asked to drink, the more disturbed, but interested, I became. You see, one of the very few advantages of being a citizen of a country while not living in that country is that you get to see things from a distance. This distance takes out a lot of the emotion. Not all of it, but a lot, and in my case it had made me almost completely unaware of how radicalized parts of the US populace had become.

In the past two weeks I was given direct, full-frontal exposure, with all the hairy and dangly bits in place, to something that I had thought was a caricature. I had Sherry tell me that President Obama was brainwashing children. I had her tell me that the new health care bill would cause children on Medicaid to get worse service than before. I had her direct me to a video claiming that President Obama was raising a private army to station in the USA. I had her tell me that YouTube and other internet sites were being censored to prevent the truth about President Obama from coming out. I watched her make a backhanded comparison of him to Satan. I had her tell me that he was subverting the Constitution. And, something that irritated me the first time I heard it and which continued to gnaw on me in almost every following post, I was told that President Obama is not listening to the people, that he was not listening to the citizens of the USA.

Let’s think about that last statement and the implications it makes. President Obama is not listening to the people, the citizens, of the United States. I’m a citizen, and I think he listens (More or less, but that’s politics…) to me. I think that he listens to a lot of people. In fact, he was elected with the most absolute votes in his favor in the history of the United States. If you want to look at percentages, you need to go back to President Reagan’s victory over Walter Mondale to find a win by a larger percentage.

The implication of this statement, then, is that the people President Obama is listening to are not citizens of the United States.

Ouch. And I just paid my taxes.

In any case, Sherry and I were discussing things and slowly I was beginning to get a picture of who she was. I showed respect. I stayed on-topic. I was consistent in my arguments. Sherry got frustrated — angry perhaps — with me on several occasions, but that happens. In some places we agreed, and in some places I even saw her make some effort to rein in the even more radical statements being made by some of her other friends. What made me break down and write what I thought really needed to be written, however, was not anger. It was a little smilie emoticon tacked on at the end of a sentence. The sentence said that if I posted anything further, it would be deleted.

Ahh, censorship. You can, of course, defriend someone on Facebook, which is exactly what Sherry did to me after I posted again. I would have much preferred her to have said that — “I don’t want your posts on my wall. If you post again, I will take you off my friends list because I don’t have the energy or time to deal with it.” What I got, though, was a long post that twisted my words (A common occurrence over the exchange…) and made some outright false accusations about me before ending with,

This is my last reply to this thread any other comments will be deleted I’m a woman I get the last say :)

Nope. It doesn’t work that way. You can’t piss on third base and then threaten to take your ball home if anyone complains.

So, I posted, and in the end I challenged her on her openness to the ideas of other people and on her censorship. I challenged her to leave what I posted up and prove my allegations wrong on both counts. She didn’t, which I expected, and which was why I kept copies of the three later and longer threads. I knew that she would either delete the last one, or potentially defriend me and therefore delete them all.  I hate it when I fail to give people the benefit of doubt and then they still prove me right.

So here are the copies. As you will see, we had already had a short exchange about censorship and the fact that it wasn’t possible on the internet. In my last post I reminded her of my position and wrote that if she attempted to censor me, I would be be forced to prove that it is impossible in a free world with an open internet. I like to keep my promises.

Thread 1: In which Peter learns a Joke and New Song

Thread 2: Where Peter begins to bow to reality

Thread 3: The light at the end of censorship

Uff Da!

The following charts come from E*Trade Brokerage’s Risk Analyzer function. You can click on them to get a larger size chart.

1 Month Chart as of June 14, 2009

3 Month Chart as of June 14, 2009

YTD Chart as of June 14, 2009

1 Year Chart as of June 14, 2009

3 Year Chart as of June 14, 2009

When I first looked at one of these charts, it happened to be the YTD chart. My initial reaction was “Wow, I’m getting my hat handed to me compared to the S&P 500 and the Russell 2000.” But when I started to look at what was actually happening, it became apparent that my risk appetite was what was driving the difference. If I went to the 1-Year chart compared to the YTD Chart, the performance results switched places, and if I went to the 3-Month chart the difference became even larger (The 1-Month chart has me beating the S&P, but there’s too much noise in only a month’s worth of data, particularly with current levels of volatility.). What is absolutely apparent, however, is that according to E*Trade (Well, Riskmetrics, who runs this particular service.) my portfolio is significantly lower risk than either the S&P or the Russell.

I was floored at this, because in my portfolio now I include names like the ProShares UltraShort 20+ Year Treasury (TBT) and Linn Energy (LINE). I have had a significant commodities position since about 2007 through Freeport-McMoran Copper & Gold Inc. (FCX), the Fidelity Select Gold (FSAGX) mutual fund, and various oil stocks, including over the years British Petroleum (BP), Conoco Phillips (COP), PetroChina (PTR), and Pengrowth (PGH). These, I was sure, were pumping up my beta and making my portfolio generate a higher return and well as a higher risk profile.

Wrong! Obviously my beta is nowhere near where I thought it was (And thankfully so…). So what’s going on? I’d like to make sure that I can keep these long-term trend lines and alpha compared to the S&P, but for the last 3 months I’m underperforming by a huge margin.

It comes down to two things: First, I don’t like risk that I can’t measure. For that reason I went from almost 100% equities in late September to about 50% equities before the first big drop in early October. I stayed there until late February-early March, when I went back to about 75% equities until late early April, when I started going back to cash and dropped to about 60% equities, which is where I am now. I did this because the biggest driver for me in investing is a  macroeconomic focus over 12-18 months, and right now I can’t get the macro-economic picture to agree with the stock market. The US government has spent or committed to spending somewhere between 2.5 and 3.5 trillion dollars. To put that in perspective, let’s say you’re a world-class auctioneer and can count 1 to 10 in 1 second. If you counted for 7,925 years you would just get to 2.5 trillion, and that’s without toilet breaks… That has certainly propped up the market, but like a cripple leaning on a crutch, unless the source of the problem is addressed the problem doesn’t get better. And in the case of this analogy, it must be noted that the crutch is borrowed and must be returned at some point in the future.

This $2.5 trillion figure is interesting as well because it also happens to be about how much money the US government raised in taxes for the 2008 tax year and give or take a $100 billion or so is also about how much they plan on getting this year. What is more telling is how US government debt is growing. — and let’s not forget those “off-balance-sheet” debts over at the Fed. To think anything other than that this is ultimately US government debt is just ridiculous. In the end, the investors in US Treasuries, such as China, the Gulf Oil States, and other net creditor nations, have to make a decision that their money is generating a return that will at least counterbalance the risk of investing in those securities. At some point we’ll reach that final dollar that breaks the proverbial camel’s back and those investors will flee. Scarily, this will not be an orderly, long-term trend, but in most probability will be a catastrophic “singularity” type occurrence after which the history books will refer to something other than “Pax Americana” when referring to the era.

I just can’t make the numbers work between this worldview and the current stock market performance.

The second thing is that I *do* have a risk appetite that is higher than most people if we structure that statement to only be valid  for the stocks in which I invest, not my entire portfolio including cash. I have no idea what my beta is over the last two years (I’m way too lazy to go back and calculate all that.), but for the stocks I have now, my beta is around 1.2, meaning that over time my portfolio should move at a rate of 1.2x the S%P 500. In other words, if the S&P 500 moves 1 percent, my portfolio should theoretically move 1.2%, and if the market moves 10%, I should move 12%.  However, if  my cash position is also included in the calculation of my overall portfolio return, it works as a stabilizer. My inherently conservative Scandinavian soul sleeps better at night right now with cash in the bank, some gold and oil stocks as proxies for not directly holding more foreign currency, and some some yen-denominated assets here in Japan to complete the balanced picture.

In the end I, like most other people, have lost money in the stock market over the past three years. What frightens me is that I don’t see the next three years being better than this one, so I’ll sleep with that cash a bit longer. Get me back to 750 in the S&P or around 7000 in the Dow and I’ll be back to 100% equities for at least a while. At S&P 850/Dow 8000 I’ll probably get to 80% equities. Failing that I’ll stick around 40% cash and the rest in companies with strong balance sheets and fat dividends.

<edit>

So, it’s July 10 and I’m up to around 70% equities, although most are hedged toward conservative plays in medicine and value-oriented stocks such as Walmart.

<edit>

And now it’s January 1, 2010. A good year all around. :-) This is from our E*Trade account. For some reason Fidelity is not allowing access to performance reports right now, so I’ll have to add those later.

One other thing: At Sky Harbor’s Terminal 4 at the Southwest gates they have set up these little podiums with power strips and USB ports for charging. Southwest always got the business traveller, and no more so than now.

Man, it has been a *long* time since I said good things about an airline or an airport. Feels good!

Uff da!