So how was New York on its best behavior? Let's not give the city too much credit. It did, after all, greet me with rainfall and grayish streetwater, which was puddling in the potholes. I managed to sidestep the pools as I exited the taxi on 59th and 5th Avenue, near the dear old office building where I spent many a night billing hours doing who-knows-what. My mission was to pick up house keys from a good friend who was still working at the firm. I would be staying with him this weekend.

I waited in the big faux-marble lobby for him to come down with the keys. The scene was a familiar and comforting one. Employees hustled through the lobby toward the revolving doors on their way home or heading to happy hour. It's fun people-watching, trying to distinguish the lawyers from the Estee Lauder employees. (Lauder was the other major tenant in the building). The Estee Lauder folks were uniformly well dressed and invariably beautiful. The lawyers, on the other hand, were not particularly well dressed or particularly attractive. (That's actually not fair. It's sometimes hard to tell whether a lawyer is attractive because their gazes are usually fixed downward toward their Blackberries.)

I lost track of time sizing people up when, lo and behold, the friend came down with arms wide open and that silly Aussie grin on his face. He was accompanied by some other old work friends that I wasn't expecting to see during the visit. Now I was the one with the silly grin. Hugs all around and small talk. Drinks on Saturday? You betcha. Maybe wear some closed-toe shoes, E? Haha. Yeah, I'm ditching these flip flops.

Things were starting to look up. I felt very, very happy. There is simply no secret why I like some cities. Scenery helps. But at the end of the day, great people are what make cities great. That theme would continue for the rest of the weekend . . .

So Z and J finally got married. 'Bout time. The wedding was fantastic. The weekend was perfect. And it provided a kind of satisfying closure. But I'm not going explain my high praise by simply listing a chronology of the weekend's events. This would not fully capture my experience. Instead, this post aims to provide a context for the wonderful wedding weekend.

The City and I left each other on bad terms. For one thing, the move was physically punishing. My apartment was on the 6th floor. No elevator. And I had multiple 60 lb boxes that had to migrate downstairs somehow. My beautiful girlfriend has many, many attributes. But arm strength is not one of them. So I had to go it alone.

But leaving New York was also emotionally difficult. Looking back, I still have regrets about my time there. These wistful misgivings tug in opposite directions. On the one hand, I wish I'd worked harder in law school and treated it less like college. I feel like I wasted more than a few opportunities. But this lament is incompatible with the other great shame of not having spent enough quality time with the City. Working harder would have meant even less time exploring New York. Therein lies the tension.

(Maybe there really wasn't a contradiction. I frequently fell into a terrible inertia where I failed to go out and explore the city for fear of not studying enough. The problem was that, once I was safely settled in the library, I found it all too easy to avoid working. But let's set aside depressing thoughts of the time I've lost due to this wasteful stasis.)

Leaving New York was hard in another way. There is little doubt that I would miss the City more than it would miss me. New York has a steady stream of adoring fans. They're young and cool and full of life. And they keep the City bubbling and roiling on high heat, with their bar crawls and art galleries and ethnic enclaves and indie scenes and volunteerism and scenesters and hipsters and immigrants and slam poets and you name it. New York would manage just fine without me, I thought; the City couldn't care less that I was leaving.

So I left New York an anxious mess. I was physically bruised and irrationally anthropomorphizing the City into a high-maintenance fair-weather friend. This past weekend, however, provided me with a version of New York on its best behavior . . .

There is a sea of commentary about Obama's victory. I've spent much of this week swimming through it, trying to find words that manage to best capture the moment without lapsing into trite cliches. And for the most part, all words fail, so I've had to settle for reaction videos and pictures from Kenya, Indonesia, Harlem, Japan, Germany, England, and even Israel.

As far as words go, the best piece I've found so far is by Judith Warner on the NY Times. I'm particularly fond of the following:

"This moment of triumph marks the end of such a long period of pain, of indignity and injustice for African-Americans. And for so many others of us, of the trampling and debasing of our most basic ideals, beliefs that we cherished every bit as deeply and passionately as those of the 'values voters' around whose sensibilities we’ve had to tiptoe for the past 28 years."

The first sentence is perhaps a little too strong. Subtle racism, and the indignities that stem from it, is alive and well and an Obama presidency alone doesn't cure it, even though Obama's election shows we've come a long way. But the second sentence struck more of a chord with me.

When you read the rest of Warner's commentary you get the impression that she didn't think the Clinton years really counteracted the Reagan Revolution. There is some truth to this. As good a president as Clinton was, his success was defined, for better or worse, largely in terms framed by Reaganites. In particular, Clinton's achievements seem to be stolen from the Republican playbook: cutting welfare, balancing the budget, cutting crime rates, and growing the economy (without necessarily caring who gets the spoils from that growth). Clinton's success, I don't think, is defined in terms of investing in people.

Will Obama's priorities be any different? Only time will tell--and I hope it's not too different. I like balanced budgets and cutting crime. If those are "Republican" issues, than consider me a partial Republican.

But you do get a palpable sense that Obama sees enduring, mature economic growth as something to be achieved by investing from the bottom up, not from the top down. Mature economic growth is not created out of thin air by fashioning fancy new financial derivatives and convincing hapless investors to buy them. That's like trying to achieve economic growth by pyramid scheme. That's dangerous immature.

Mature economic growth is created by investing in infrastructure, investing in education, and investing in the most important element of distributive justice that I can think of, health care. Clinton, to his credit, tried to get some kind of universal health care. But now that enough people have been driven in to bankruptcy due to medical bills, maybe something can be done.

The problem is that you need money to invest. And no president has burned through more cash, and received less for it, than President Bush. Trying to balance a budget while launching such ambitious investment initiatives is a daunting task. And that's sobering.

So why did those securities fail? The situation is complex and I'm not sure I have it straight in my head. But that won't stop me from opining.

Some of it had to do with the lending practices of primary lenders. They had little incentive to deny willing people mortgages because they knew that there was a thriving market, driven by the demand created by secondary financial institutions, for even extremely risky mortgages. Primary lenders filled that market with such mortgages -- i.e., lots of potential defaulters.

But that shouldn't necessarily matter, remember, because really smart people sliced and diced the mortgages to minimize the risk that the mortgages backing any single security would all go into default at the same time. Moreover, even if people defaulted, the collateral -- their homes -- was extremely valuable. Because housing values only seemed to go up, it is not necessarily a bad thing for the mortgagee to have to foreclose on a home that might be resold at a higher price. The qualifying clause is important: housing values only seemed to increase.

So let's talk about why housing values seemed to go up. What shaped this perception? Some of it was based in fact: for a long time housing values did appear to go up. This seems a natural consequence of economic expansion generally. And some of it was attributable to state and federal policies that encouraged home ownership. These factors plausibly contributed to consistently high demand for housing.

But some of the demand was artificially inflated. Suddenly anyone with a pulse could get a mortgage. Perhaps government policies went too far in encouraging home ownership to those who were not ready for it. The mortgage-backed securities market also contributed to this inflation by encouraging bad lending practices among primary lenders. Housing speculators also probably contributed to artificial demand. These factors suggest that at least some of the demand for residential housing was not as resilient as advertised.

With such high demand for homes, whether "fundamentally sound" or artificially inflated, construction of new residential property boomed, with home-builders seeking to cash in on the rising value of homes.

I'm about to get hyperspeculative now. My understanding is that what brought down the market for MBSs was the devaluation of residential property. This was caused by the double-whammy of lower demand and a housing glut. Remember the "fundamentally sound" aspect of the demand, generated by steadily increasing economic growth? Well, the economy eventually soured. Meanwhile, the home builders who rapidly peppered the country with McMasions eventually created enough to allow buyers to be more selective. With demand for housing waning, and supply expanding, there was an inevitable downward pressure on housing values.

But the previous speculation had little to do with MBSs directly. But the downward pressure on prices had a huge indirect impact on the valuation of MBSs. The value of an MBS derives in part from the value of the underlying mortgage. In turn, the value of a mortgage depends on the value of the collateral for the mortgage itself--i.e., the residential property. So when there is a near universal devaluation of the property, there is little that even the smartest MBS specialist can do to diversify away the devaluation of his financial product.

In short, even if MBSs were well-designed to avoid devaluation associated with foreclosures of risky mortgages, they could do little to avoid devaluation caused by universally falling property values.

The foreclosures that followed just added fuel for the fire. Remember: it is not necessarily a bad thing for bankers when mortgages go into default. The worst thing that happens is that the bank forecloses on a property. When housing values keep increasing, the bank might actually turn a foreclosure into a profit. But when housing values start to decline, this is no longer the case.

Now I get really speculative. Bankers who do not find a ready market to take the foreclosed properties off their hands are not likely to patiently sit on a large portfolio of properties to ride out a down market. Since they are eager to cut their losses and get foreclosed properties off their hands, potentially at below-market prices at foreclosure auctions, this might contribute to additional downward pressures on housing prices. This in turn further devalues MSBs, and the cycle continues.

Why so many big financial players bet so heavily on such tenuous securities is something I may never understand. But I'm not a financial risk taker, generally, so it wouldn't be the first time I fail understand the poker players on Wall Street.

So I had another hunch about credit cards . . .

Before the credit crisis I was amazed by the concept of mortgage-backed securities. Who in their right mind would buy securities whose value depended on high-risk mortgages? But friends convinced me that people who were financial geniuses had it right and I was a naive doubter.

The idea of mortgage-backed securities was, roughly, that secondary financial institutions could buy up mortgages from primary lenders, no matter how risky those mortgages were, and pool them in such a way to preserve the high interest rates such risky loans generated. But what about the risk variable of the risk/return equation? No matter. Very smart people minimized this risk, supposedly, by creating securities that strategically pooled mortgages to avoid the chances that every mortgage in the pool would go into default. As I write this, it still seems like a clever idea.

Turns out that my initial suspicion about mortgage-backed securities was correct. But I can't say I was right for the right reasons. I only had a vague sense that there was something fishy about mortgage-backed securities, based on anecdotes about how lots of people -- like my parents -- were being pressured to take on mortgages that they maybe could not afford.

More later ...

Slipped into bliss today. So satisfied with things. But unsure whether the joy was caused by the coffeebuzz or the pageturner, DEN OF THIEVES, about greedy 1980s-style investment bankers getting their comeuppances, courtesy of underpaid and overworked government attorneys. Or maybe it was a perfect admixture of the two. And maybe it was the folksy guitar riffs and cigarette warbles piped through the Starbucks sound system, and the gloriously comfy chair cradling my lumbar region. And the Taco Bell.
God bless Memphis.

I can't sleep. This has become a recurring theme here in Memphis. Too much coffee one night, then too much anxiety the next. But all in all I love my job. My life hasn't been chock full of detours; this one is turning out to be exactly the kind I'd hoped for. It's only a year long, though, and I don't anticipate coming to any great revelations about the direction my life should take. And the GRE still won't study for itself.

Quite awhile since my last post, since I last swore I'd quit. But I appreciate being able to look back at the little episodes that somehow add up to a life. And I can't remember all the random noteworthy things that happen to me to save my life.

Road trip with mom through Austin to Memphis was great. Sint Maarten family reunion and El Paso in the rear view mirror.

Fast forward to Memphis and my clerkship is under way. My co-clerks are smart and nice and funny and my judge is far nicer and more patient that we deserve. But there is more work than I anticipated, which is unsurprising given my complete lack of work for the better part of the last three months. The endless summer was bound to end, and it ended without having accomplished any of my three major goals: getting back in shape, finishing a solid draft of a good article, or taking the GRE. But somehow I don't feel so bad about it.

And on the subject of the GRE, the whole grad school thing is flickering. The thought of being a full-time lawyer, though, is not appealing either. But I want my motivating reason for going to grad school to be my love of philosophy, not my abject distaste for certain aspects of legal practice.

I guess I'll just make it through Memphis first. On to upstate New York for a wedding.

I hate moving. But it's not like anyone likes it. I still have at least two more hours of tidying up to do before I leave NY. And I have to find time tomorrow in the AM to drop off a modem with the cable company.

But otherwise life's good. I think I made the most of my last few months here. Finally got my blue belt, finally saw the Breeders (twice - once in Boston, once in NY), finally started drafting an article that has been fermenting in my brain for too long, and I even managed to wander a bit of Brooklyn, after seeing the Murakami exhibit (which is gross and schlocky and utterly fascinating).

J left today, and although I was sad to see her go, I confess it's nice having only to worry about my own logistical difficulties for the moment. But before I soldier on I shall make myself my last UES omelette.