ECONOMICS II – More Terms and 3 Case Studies

Ok, so I hope the first part was helpful. Either it was and there were absolutely no questions or I'm just writing to myself. So I have decided to finish off the section this time instead of drawing it out even further.

American Express has been granted the right to become a bank? Democrats and car manufacturers request government bailouts for the auto industry?
I think it's strange how economists, especially academic economists, see this as exciting times in finance (a subtopic in economics). I suppose it really strange that commercial banks can take over investment banks so the lines are blurred. Or it's strange how the government can now hold majority ownership in private companies and banks. But it's all at the cost of people's jobs. And it seems like it will get worse. It's all due to greed, but let's get back to the story of greed.

We saw how investment banks came crashing down through vehicles like CDO's and the lack of the agencies to assess the quality of the credit in those vehicles. But AIG, an insurance company, was bailed out. And so was Fannie Mae and Freddie Mac. They were set up to support the housing industry. So why did those fail if their not insurance companies with tons of bad debt/credit in the housing market. Well, this may be easier to see for some since Fannie Mae and Freddie Mac are completely mixed into the housing market, and AIG is the largest insurance company in the world.

So what we'll do this time is follow Steve Levitt's column and explain the crisis situation through the eyes of his colleagues Diamond and Kashyap, University of Chicago professors of economics. I will add more explanation, but I am assuming you understood the terms in part I from the last update.

http://freakonomics.blogs.nytimes.com/2008/09/18/diamond-and-kashyap-on-the-recent-financial-upheavals/?em


Holding Company – a company that holds partial or complete interest in another company; usually this means a company holds enough stock (voting stock) in another firm to control the operations and management by influencing and/or electing its board of directors (a bank holding company is a company that does holds partial or total voting stock in a bank)

Derivatives – it's an investment that depends on the value of an underlying investment (confusing I know); the underlying investment can be a stock (or currency or a commodity or other securities); types include options and futures; options are a contract that guarantees the holder the right (or the option, but not the requirement) to buy or sell 100 shares of the underlying stock at a fixed price by a certain date; if you buy an option you are the holder of the option while the seller is the writer of the option; if your option allows you (the holder) to buy 100 shares at a certain price it is a called a call option; if it allows you to sell 100 shares of an underlying stock then it's called a put option (like put it away); hard to make money with derivatives and not for the beginning investor; there are pros and cons but just understand that they exist; people tend to use it as insurance or leverage (if you hold some stock but are not sure that it may lose it's value you can buy a put option; if it loses its value at least you can exercise the put option and sell shares and still get some money out of it; that's just one example), they can help guard against price fluctuation [futures are like options but they are required not optional; so at a specified date in the future at a specified price some commodity or stock or bond is required to be delivered for some payment; there's a winner and a loser depending on what happened to the security before the payment date]




2ndary mortgage market – the buying and selling of mortgages and mortgage-backed securities

mortgage-backed securities - securities that depend on underlying mortgages but are traded separately; so rather than buying and selling someones mortgage, you are buying a selling a security invested against a pool of mortgages [so that when the mortgage payments come in you receive your investment back (plus interest) though you do are not the mortgage-issuer directly]

amortization - The process of paying off a debt liability and accrued interest through a series of equal, periodic payments. You normally do this with car loans or mortgages when your monthly payment partially pays for interest accrued on the outstanding balance and partially reduces the balance.

CDS – credit default swap – just think of it as a buyer (person who purchases a CDS) paying the seller a premium so that if an underlying security defaults or goes bust the buyer gets paid some money from the seller (similar to insurance in that way but the buyer does not need to own the underlying security)

Case Study 1: Fannie Mae and Freddi Mac – Secondary Mortgage Market and Mortgage Banks

Ok, remember from last time, Fannie Mae and Freddie Mac (1970's) were setup to support the housing industry, but they are completely in the secondary mortgage market, so they are mortgage banks or mortgage companies, buying and selling mortgages in pools or blocks. At the same time that there freedom eventually led to the financial crisis, we must understand that having a secondary mortgage market actually allows for more mortgages to be sold. If I take out a mortgage with Company B for $150,000 for house C, that's the only one like it. And Company B has specific terms with specific interest rate, principal, etc. In comes Fannie Mae which started selling whole loans. Fannie Mae takes mortgages and sells actual mortgages in blocks to others. Why? Well for a single investor to be interested in my $150,000 mortgage in a diversified (mixed) portfolio (bag of investments) so that the mortgage was only 10%, he would need a $1,500,000 portfolio of investments. Mortgages are awkward and bulky to have for an individual investor.

In steps the Fannie Mae and the 2ndary mortgage market after WWII in 1938. Mortgages are now sold in blocks (“whole loans”). If you combine mortgages into a pool, you can talk about the pool's global characteristics, it's weighted average maturity (instead of the maturity of one of the mortgages) or the remaining amortization. Now you can make sure that no one mortgage is too large a portion of the whole. And a servicing agent can collect the mortgage payment and pass them to a central paying agent who passes it to the final investor. Now it looks like a normal bond.

Then in the 1970's Freddie Mac came along and instead of selling the actual mortgages (whole loans) allowed people to sell mortgage-backed securities. That means take say $50 million worth of mortgages and just separate them into a pool of funds and issue securities against the pool (this means people pay you money to take on the underlying debt of the mortgages hoping to receive payment when the underlying mortgages are paid). Now these mortgage-backed securities are actively traded and are attractive to people who don't normally buy and sell mortgages.

This is what was going on with the secondary mortgage market when everything went haywire. Freddie and Fannie were issuing their own debt (taking in money from investors in this secondary mortgage market) and the government was supposed to guarantee it (remember Freddie and Fannie are only supposed to be guaranteeing or taking on mortgages that meet a certain standard). Because the government was backing Fannie and Freddie, they got very risky and racked up more debt than they should have done so. This was because the more debt (good debt) you take on, the more money you make. And since people thought the government backed Fannie and Freddie, they saw investment in these mortgage-backed securities as safe as government bonds.

So with weak supervision and buying mortgages that were not meeting good standards, a problem was occurring. With the sub-prime mortgage market situation, Fannie and Freddie lost a lot of money from people who defaulted on their mortgages, and with all the debt Fannie and Freddie issued they had too little capital. So the government (as it was supposed to do) guaranteed the debt because it would have sent the markets reeling.

The problem is that once the government guaranteed the debt, no self-interested investor would give more money to Fannie and Freddie Mac to help its losses (because investors are afraid of losing money), so the government took over Fannie and Freddie Mac.



Case Study 2: Lehman Brothers – Investment Banks – Mortgage Investors

This one is what we talked about last time. So it's no different. Investment banks do a lot of day trading remember? Why? Well, when it's hard for lenders to monitor the money they have lent, and when borrowers can quickly change the risks, lenders would rather lend short-term to get their money back quickly. Then when the borrower acts up, the lender can refuse to roll over the balance to the next day (and wait to be paid then). It's a way to keep them in line.



Lehman was no different. As an investment bank it could use derivatives to change the risk on investments. And it was going through over $100 billion a month in securities.

As stated in the last update, rumors began to spread about how bad the subprime crisis was. As more news came out (especially with Fannie and Freddie's losses), people lost faith in Lehman. Why?

Well, people believed that Lehman (like other investment banks) held a lot of this bad mortgage investment (money they would not ever get back). So if you think you are lending to a risky borrower you raise your interest rate. So the cost of borrowing money rose for Lehman (remember Lehman depends on borrowing money each day to trade; investment banks trade vastly more money than they actually have in assets and make up any losses today with more borrowing and trading tomorrow) and the value of Lehman Brothers' stock fell. So then Lehman's credit rating dropped legally preventing some institutions from lending money to Lehman. The ones who could still lend money did not want to risk it not knowing if they would get their money back because they feared Lehman would default in the future.

With no ability to borrow, share prices plummeting, and investors wanting their money back, Lehman sank.

Case Study #3: AIG – Mortgage Insurance

This is the last type of group to experience issues related to mortgages—the insurance company. AIG had issued $57 billion worth of insurance contracts whose payout depended on losses from subprime mortgages. And you know how insurance companies work (just like banks): if everyone claims all at once it doesn't have the money. However, all its other insurance contracts were fine. Still the subprime real-estate related insurance contracts (in the form of C.D.S.'s) were losing AIG money.

With the housing market deteriorating, the credit-rating agencies downgraded AIG's rating. With lower ratings, AIG's insurance contracts required AIG to demonstrate it had the collateral to take care of the insurance contracts. AIG needed $15 billion in immediate collateral.

Its second problem was tied to this one. If it could not post the collateral, it would be defaulting on the C.D.S.'s If it did this, other unrelated insurance (in other securities) contracts had clauses that stated its other contractual partners could demand prepayment of claims. This is to prevent AIG (and others) from using money from one part of the company to fix holes in another part. AIG had $380 billion worth of these cross-collateral claims. With the deteriorating housing situation, no lenders would give AIG money not knowing if it would receive the money back.



AIG also had bonds all over the world and bond holders were not sure they would get their money back while AIG scrambled to fix the CDS and cross-collateral damage, looking for money to pay all these contracts. Other companies even guaranteed some of A.I.G.'s debt (bonds) by writing C.D.S.'s. The intertwined nature and coupled influence of AIG in many financial institutions was evident.
So the FED gave AIG money to honor its contracts. That money has now increased. You can read below.

More on AIG
http://www.economist.com/displaystory.cfm?story_id=12607251&fsrc=nwl

U.S. ELECTIONS AND OBAMA

A brilliant lawyer and mother friend of mine (Robyn) was telling me I have weird, crazy ideas. I'm not sure if that's true; I just think we can make things better. So yes, I hate conflicts of interest so much that I would love limit presidencies to one term so that you never worry if a president it doing something to win votes for re-election. But I know this also hampers momentum (perhaps lengthen the term to five years like in South Africa?). I would love to have a rotating citizenry service in national and state Congress instead of elected officials. Then it would be easier to put salary caps on the House and the Senate with even homeless and poor people serving one term.

I could go on, but you get the idea. We're stuck with imperfections, but I would like to point out one thing. People have this notion that when the outside world sees the U.S. as a bully or self-interested big kid on the playground, it is an exaggeration. I'm not sure that's true. When you study U.S. foreign policy, U.S. history, especially U.S. international relations, and much of the rhetoric (in documents and speeches) in the past number of years it's been shockingly clear and scary sometimes. Even across presidents we seem headed down the usual path of any world power in the history of man. We look out for ourselves and interfere in places that cause people harm. If you don't see this it's ok. It may just mean you haven't studied it enough. It's not anything particular to the U.S.; it's what happens with all superpowers. It would be the same if any country was the front runner. It will be the same in 2100 with the next superpower. And though the U.S. may not be the sole leader anymore, I think it is fine. In 1900 it was the UK as the sole superpower in the world. One hundred years later in 2000 it was the U.S., but the U.K. was still doing fine, though. Likewise, we're probably moving towards a world with a few front running leaders even if we are not the leader. And that's fine.

My lawyer friend challenged me to go back to the States and try to change things. I'm not sure anything I say is actually necessary. Plus big change tends not to be good for people; it's at least difficult. I think Obama will probably bring about incremental change. That's the only change people are comfortable with and as long as we move forward, that's good for now. For instance, hopefully we can continue to reduce the stockpile of nuclear weapons with the hopes of have a nuclear free world. In the meantime we sit in the awkward position of hypocritically telling others not to have any weapons while we slowly play this game of “'you put your gun down first' 'no You, put yours down first' 'ok, let's do it at the same time 1-2-3' 'now you put your second gun down first' 'no You put yours down first. . .'” The closer we get to having nuclear weapons in the actual hundreds (they are in the thousands now) the harder it will be to get all five security powers (China, Russia, UK, France, and the US) to decrease. . .all the way down to zero.

Well, many people are not happy with Obama.
I thought this article was interesting on the Economist's endorsement of Obama. Enjoy.
http://www.economist.com/opinion/displayStory.cfm?story_id=12591216&fsrc=nwlptwfree

Then there is Ayman al-Zawahiri, the number 2 guy in al-Qaeda. He called Obama a “house negro” and accused him of turning away from his Muslim roots.

Lastly I've heard a lot of Christians and Christian fundamentalists are unhappy and saying not-so-nice things about him. I think that's to be expected. He ran as a Democratic candidate and many people who label themselves conservative feel he will ruin the country with a liberal agenda. I think the nice thing about Obama is that if you are against the Democratic platform (how can anyone be for everything in any platform?) but you had to accept a Democratic president, he is the Democrat you would want in power due to his desire to engage a wide spectrum of viewpoints and opinions and his ability to unify.

From a nuclear-free world to Guantanamo Bay, from economic crises to auto industry bail outs, from energy and environment and international protocols and agreements, from the finance reform to international finance reform, from war in Iraq and Afghanistan to al-Qaeda, from universal health care to tax reform, he has his work cut out for him.

But I think he has the decision-making ability to do it. It would overwhelm me I believe, but he has an ability to sit back and listen to all sides and make a decision and go with it.



He was the cover and front news story for probably a week (at least 5 days in South Africa and Africa). There was no other news for the first two days after the election. People were overjoyed and are STILL overjoyed.

Do you remember what I said about just the accomplishment of being elected has already done work he doesn't have to take on? Well at the beginning of last week (about two weeks ago on Monday) guess who said something nice about the U.S.? Hugo Chavez. He said it [Obama's election] was a good thing and hopefully the U.S. can get back to the great nation it once was. First of all, Chavez NEVER calls the U.S. great. Secondly, he went on to say that after Obama's inauguration he will accept/appoint a U.S. ambassador in Venezuela, again. So it's just as I thought. People don't really like the current president. Without a single communication (I'm guessing) or act of negotiation, we've reestablished ambassadorial/diplomatic relations with Venezuela like that! And I'm willing to bet we will also get one in Bolivia as Morales follows suit. You can add Nicaragua to the list as well, with Daniel Ortega joining the pack.

This is a bit of what I mean. Though half the U.S. is not particularly enthused, something magical has happened. I promise you this—a Sudanese guy was trying to figure out how to relax the restrictions on Sudanese people receiving visas to go to the U.S. He said he could move to the U.S. and put his boy in school. One day his boy will grow up and become the president of the U.S. and he can change the rules. He laughed and I did, too.

More importantly people are saying what they used to always say about the U.S. “Only in America.” “This can only happen in the U.S.” “No where else in the world can something like this happen.” “In Sudan, you will NEVER see a person from Southern Sudan [like Darfur region] become the president. They would shoot him first.” “If the U.S. can do it, so can we.” “Maybe we can have fair and free elections.” I remember discussing with Estelle a politics masters student (starting next year in Feb 2009) in South Africa. She's white and wants to be president but it's “impossible” here. Maybe not so impossible anymore. . .

Moreover so many ex-pats used to say that are not really interested in going back to live in the U.S. One girl told me she didn't want to go back if the other candidate won. Now that Obama won, I've already heard from one girl who can't want to go back, move to D.C., and work for the administration. I have already received two e-mails from people giving me website information to apply. People are excited, including ex-pats. Quite amazing. Ex-pats. Funny.

So something magical is occurring. We'll watch, wait and see and ride it out. Along the way there will be mistakes and missteps, but this is a huge step forward for the U.S. in the eyes of people around the world, so far forward and missteps or regressive steps are still ahead of where the U.S. was before the election.

ARTS & CULTURE

No arts and culture for me with all the paper submission and research. I should be able to relax in about a week or so. It's nice to have some time apart from lectures. And in January I will have some time apart from both paper writing/submitting and lectures—just research for about a month. I do plan to see a few plays before leaving for Christmas. Lionel Ritchie is in town this weekend. And Rod Stewart is coming in December.

Enjoy the weekend.

Peace,
Victor

UPDATE - October 12 - November 14

October 12, 2008

Obama and the Pope
Obama is invited to meet with the Pope while he is vacationing south of Rome in Venice.

The censoring right wing press reluctantly watches the semi-private audience, hoping they will be able to get minimal coverage, if any.

The Pope asks Obama to join him on a Gondola ride through the canals of Venice.

They're admiring the sights and agreeing on moral issues when all of a sudden the Pope's hat (zucchetto) blows off his head and out into the water.

The gondolier starts to reach for the Pontiff's cap with his pole, but this move threatens to overturn the floating craft. Obama waves the tour guide off, saying, 'Wait, wait. I'll take care of this. Don't worry.'

He steps off the gondola onto the surface of the water and walks out to the Pope's hat, bends over and picks it up. He walks back across the water to the gondola and steps aboard. He hands the hat to the Pope amid stunned silence.

The next morning the big topic of conversation among Republicans in Congress, CBS News, NBC News, ABC News, CNN, the New York Times, and right wing Hollywood celebrities in USA, England, France and Germany is:

'Obama Can't Swim.'

http://www.youtube.com/watch?v=UxlwYP0HNdc
too cute McCain Obama childrens song and dance

SHORT QUIZ

1. How many countries in the world do not use the metric system?

2. (#1 is not that important if you can answer this one) Name two countries who do not use the metric system.

3. How many animals in the world actually cook and prepare their meals? Name them.

4. Name all animals in the world that copulate facing each other.

5. In the Western world, we have certain languages we term dead languages because they are no longer spoken. Name one “dead” language that is still spoken today and tell where it is spoken.

6. From the list below, decide which of the items are tasks Victor has not done in over a year:
brushing teeth flossing teeth showering using deodorant shaving
combing hair ironing using mouthwash using cologne
using washing machine using drying machine

7. Who will win the next U.S. Presidential election?
8. T or F In the US, just like universities have Asian Studies, African-studies, African-American studies, or Gender studies departments, in South Africa we have American studies departments.


UPDATE

You can see by the date that this was started awhile ago. Not only was it started awhile ago, but it was damaged twice. First, my laptop adapter died, so I could not access the update. Then on Halloween, I decided to rewrite the whole thing from scratch in one sitting and send it. Before I could send it, after 11 pages, the computer crashed. The good news is that it recovered the file; the bad news was that the recovered file was 3 pages of blankness. Ha ha ha!



Happy Halloween! If you don't celebrate it, Happy Harvest Festival. It is not celebrated here as a rule (according to what the majority of the people do), but people know about it because of American TV and culture. So the only people who actually do celebrate it seem to be upper class white children. But I don't see how you can trick or treat because people don't go and stock up on candy to give to children. There are some Halloween costume parties among young university-age students.

Writing this for the third time, I'm a pro, but you always remember other things you wanted to share. Thankfully you forget other things. Hopefully this will only be 15 pages. Let's see. Two big things I've been dealing with are visas and plane tickets.

People last time asked me why I called myself an illegal resident; some thought it was an oxymoron. I like the phrase because it suggests that SA knows I am here and they will not hunt me and deport me though I actually do not hold a valid visa. So I'm in no danger, though I had an interesting person with someone in the States that agitatedly asked why hadn't they yet deported me to the States. Wow!

The problem in South Africa is a lack of good administrative relative to the US. So at Home Affairs, the information you receive depends on the time of day and which agent you speak with. I did not know I was supposed to renew my visa before 30 days before it expires. So when I went to renew it inside 30 days before it expired, they said I was late, and must write why I am applying late as an extra required paperwork to bring. When I arrived with everything they told me to bring over the phone, I was met with a surprise. All the surprises that found me running around town and campus past the actual expiration date are listed below.

What the person on the phone told me I needed was different than what I was told in person. So I had to leave Home Affairs, this time with a new form and a new list of requirements to obtain.
Even that time, Home Affairs gave me the wrong form.
Home Affairs requires visa renewal applicants to get proof again of being TB-free. So we are required to produce a radiological report of our chest's excellent condition. Unfortunately, when I arrived at the clinic, the radiology receptionist was ready for me. Where is your form? Which form? The form you were supposed to bring? I don't have a form? Didn't Home Affairs (HA) give you a form? No they didn't. Well, you can pay and have the exam, but you will have to go back to HA, get the form, come back here, and pay again. What are you saying? You'll have to do it twice so you might as well wait. (I look over and see that the other three people next to me are foreigners also trying to renew visas) Why don't you just copy her form? That's illegal!! That's illegal? Yes. (I look at the form and it is obviously a copy, not to mention that nothing on it looks official and the lines are slightly diagonal on the page; the only official thing on it is something that says SA and I can type that on a computer. At this point the woman begins a rant explaining how HA always does this to the hospitals; they never give the right forms and then they make the hospitals look like the bad guys. . .)
HA requires that I get police clearance (something from the home country saying you're not a criminal or have clear record) a 2nd time even though I've been in SA for the past year on the first visa. No if's, and's, or buts.
My supervisor took a few days (when I had none) to sign the application form they gave me. When I asked him about it, he said he was confused and to talk to the international students office (IAPO – I don't know what it stands for). . . . . . .dauh dauh DAUH. HA gave me the wrong form. This time I went to UCT IAPO to get the information. They gave me the third set of forms/requirements.
HA requires a slip/receipt of proof of payment of the repatriation fee, a fee (I'm not sure) that the country uses to send you back home if you do something wrong or in some other cases. The problem is that the SA Embassy in D.C. has a rule: if you are below a certain threshold number of days on the visa, the fee is waived. HA would not accept this and said I must produce the slip. It did not matter that I pointed out that on the actual visa it stated “FEE WAIVED.”
HA refused to even begin to process a visa for a return in September 2009 because the return ticket I purchased said July 2009. I explained that the airlines have a limit to how far in the future you can book tickets. They didn't care. I explained that it's true and I wasn't lying. That doesn't matter, they told me.
etc., etc.

I don't remember the other hang-ups. I just know that the last point about the return date of the ticket is a battle I lost eventually. By this time I was past September 30, the date my visa expired, and I was tired of waiting in a HA line all afternoon (it's quite slow and they let people skip, administration is poor). I gave up and just asked (having won some battles) them to give me a visa through July. They agreed and finally took the paperwork to process. At one point I thought of just leaving in July and not deal with the hassle and paperwork. But for those of you who saw the embedded Save-the-Date 2 updates ago (I think one person e-mailed about it), that is now changed due to . . .I'm not sure what to say, but it's changed. So I will probably push back the July departure depending on the start date of the next job. As for this new visa, I go this week to pick it up. . .hopefully.



In all this rush, I had to do certain things immediately. On my first visit they asked me to leave, get a doctors medical exam certificate and x-ray report and come back. I couldn't schedule it for the same day. But it was that type of rush. I had to book an airline ticket quickly—leave US Jan 7 and return July 1. And I planned to change my return date of my last ticket to December 23 or so. Well, I call British Airways to do this, and they tell me it expired. I said it was a mistake. They told me I was a mistake. I said I would tell my mother. . .after I called back the nice woman said she would speak to her boss. The boss said no and she could not change the date. So due to some misunderstanding or miscommunication I missed my flight back home. The nice woman did say to call the travel agent to see if he had/has a special deal with the airline to re-enact it. My lovely sister (Jane who takes care of SOOO much for me administratively and financially—thanks!) called and the agent was mad—no! Ok, so my lovely sister, again, worked out a buddy-pass international standby ticket. I don't like putting the words international and standby in the same sentence, but booking two round trip tickets to the US in a row is financially staggering. Remember, the university is claiming to have overpaid me more than I thought they overpaid me (this happened 3 times now). So somehow I allocated funds based on a greater amount. My supervisor also made me stop tutoring. Anyway, I asked to push the date of the flight to December 23 as close to Christmas as possible. They said the earliest they could do was the 17th and there would be 2-3 standby people ahead of me and I could miss the flight. If I took the 10th I would be number one on the list. What was I to do? They needed an answer now! I took the 10th and with that decision sealed the opportunity to go to a friends wedding in Limpopo on the 13th and one of the graduation of one of the kids I mentor. Not only that but it caused major problems on the work front.

RESEARCH & LECTURING & COURSE EVALUTIONS

My supervisor was mad when I told him over e-mail. He wanted to be asked not informed. He set up a meeting. I did not want to have this meeting. He was also upset about this artery project which has hit a wall. The problem is that I don't have the time to solve the problem, and the other two people on the project (he and another cool lecturer friend, my age) don't have the expertise. There are three of us, but I'm the only one doing the work. I don't mind if someone gets upset with me if I'm not working. But if I am working, my supervisor should rather join me in getting upset at the problem. It's not he versus me; it's us versus the problem like in a marriage. Having been prayed up and ready and calm, the meeting went unbelievably well.

He said I should inform him first before making decisions on leave (I am not sure why since we don't really work together like he does with his masters or PhD students). I explained to him I actually was not trying to request a month off. This was a serious situation due to money and missed flights and quick decisions. I wasn't trying to ask permission to take a month off. But I will come and ask him in the future as I didn't know I was supposed to do that. He said I don't need to find him; an e-mail is fine. He just didn't get it; he still said I should tell him first. I think in the future if I have to make a quick decision, I will just e-mail him and though it's decided, I will frame it in a question. May I take the ticket on the 10th? There's no way he or the centre would pay for a ticket for me to do otherwise. As for the research, with the visa issues and lecturing and TA'ing (we call it tutoring), etc., I have had no time for the past 4 weeks or so. I wrote that in the e-mail (without saying 4 weeks). I also suggested that Andrew work on it with me; Andrew is a research officer/employee and a PhD student at the same time (it just means he gets a salary to get a degree in a sense; but he was an employee before starting the PhD part). Andrew does everything here; he's invaluable. I knew he might like Andrew taking a look at the problem. So we discussed that. And it was nice; it was he and I against the problem.

Then funny enough, the students in the 2nd semester course rated it poorly—the pace was too fast, the material too difficult, the project too long and hard, the book too horrible, the lecturing style too strange. This is attributable to a few things (the class is only 5 people; you might think it wouldn't be so bad since they can voice things). I don't lecture whole courses. These are the courses of my supervisor, and he gets post-docs and PhD's to lecture them with him (or without him). So I wasn't told that the project I should give for my half of this particular course was only worth 8%. So some options there were more time-consuming than an 8% project. Luckily I had an options (out of 3) that could fit the 8% allocation. Only one person chose it because the other two options were more interesting. I kept saying they didn't have to choose the harder one but the other four stuck with it. Also South African students in maths and sciences are not used to having to read at all for courses (not before lecture). So when I ask them to do it, it's strange and some don't do so. They are also not used to rigorous courses. One student even tried to compare the course this year to the course last year saying the students didn't have to do what they are doing (bad move). I explained that this was FEM II. In FEM I this year, you did MORE than FEM I last year in 2007. So FEM II started from a much deeper point in the material (FEM stands for Finite Element Method—a mathematical method to solve engineering problems like solid deformation, fluid dynamics, heat conduction, etc.). So FEM II had to add material, and I was told to add topics like Numerical Methods and nonlinear equations. These were the sections they hated. One child wrote “I used to like Finite Elements before, but now I have lost all desire to do it.” I can laugh at it now. Moreover, I lecture exactly the same way I did in the first semester (Jan/Feb – June). In fact, in the FEM I course, I received higher ratings as a teacher than my supervisor who is one of the top in the world in computational mechanics (doesn't mean he can teach, though) and higher ratings than Andrew. This time I received lower ratings than Andrew. I even had the SAME students in the FEM I course. So I know it wasn't the teaching style.

So anyway, I've had a brief break since lectures ended last week on Monday. And after the Tuesday meeting with my supervisor, I could actually sit and work on paper submissions (something else that he told me to prioritize over the research). So even though I was supposed to do the artery project this week since the meeting, I've had to work on paper submissions because if I apply for US professorships, I need publications in order to be competitive.

JOBS

So I'm not sure for what I will apply. I actually had a friend tell me she honestly felt I would make a greater impact teaching K-12 than doing HIV research or research in general. I absolutely feel that way with some of the projects here in my lab (sometimes we do things that are not really impacting the world in any way), but I am not sure about the statement.

Anyway, she showed me a site about the wonderful work they are doing in New Orleans, completely chartering it up. I really hope the whole state of Louisiana is also receiving that love.

http://www.nsno.org/
http://www.tepcharter.org/



The second site is one about a school opening in New York that will finally pay teachers something closer to what they deserve (still not enough), give them paid sabbaticals every 5th year, allow them to teach only 1 course/subject and give ample time during the day for preparation work. It is one of those all-day schools so good luck with that.

I really love Engineers without Borders and wish they offered permanent positions. The Canadian EWB has a volunteering position like Peace Corps but less time.

http://my.ewb.ca/volunteering/volunteering

I think if I stayed in this kind of work, I would like to either do relief/development work for a non-profit, multi-national, or an ngo or be a professor who applied his research to socially impacting work like development (including public health).

COOL RESEARCH

Well, I will tell you what. What? Every time I try to submit a grant for the Gates Foundation Grand Challenges Exploration, something happens to get in the way. This time my adapter cord broke and could not send power to the laptop. On it are some important pieces of writing (one very large) including this grant application.

Thankfully Melissa gave me a USB case in which you place your hard drive and you can plug it into another computer to read. Unfortunately it would take just as long to get the hard drive out with the knife I was using as it would to rewrite it (it's 2 pages max). Plus I had to go to church in a few minutes since my life group was ushering (greeting at the door, you also normally do tithe but it was a walk-up-and-put-in-your-own-tithes/offering-in-the-basket-lazy! day). Then Anna called a house meeting which might have been mostly to tell me stuff since she dates Radesh.

I can't explain it but I rewrote it from memory and scratch and sent it in. I don't think it was as good as the original, but oh well. We will see. The interesting part about Round 2 for new grant seekers and those who were rejected from Round 1 like me, they actually told us the format to put it in and how they wanted to see (perhaps they did for Round 1 and I missed it that time). Either way it helped me GREATLY because now I could give them what they wanted. One of the things was a budget which led to my absolute best and favorite academic moment/conversation in my entire time here in South Africa.

In order to create a budget I needed to know how much it would cost to create a 3D model of an HIV virion (virus particle) for my project. To do this I needed SEM (Scanning Electron Microscope/Microscopy) or TEM (Transmission Electron Microscope/Microscopy) images—we call them electron micrographs. This microscopes use electrons to create images of things that are really small like cells, for instance, or in my case a virus particle. The problem is that I have no idea how to obtain samples of HIV, the price to obtain it, and the price to use SEM's and TEM's to create the images. So I asked people.

Now, remember I never wanted to venture in this area by myself. The problem is everyone is too busy and self-focused or not interested in helping or in the educational side to help someone like me. They either say no, don't respond, or push me off to someone else. After 4 months (September through December 2007), I just decided to go it alone and do what I wanted.

Here I am ready to move to an experimental stage, looking for funding to do so, and I need to get a budget. So again, I have to reach out to people. I found that the best EM (electron micrograph) unit in SA is on the UCT campus. I e-mailed three members of the staff, one of them being the director. He was livid—well, agitated. He called my research lab wanting to speak to my supervisor but luckily the receptionist said he was busy (He is, he is a temporary deputy vice chancellor [vice president] of some portfolio for the university) and was in a meeting. She suggested that he talk to me. I was out.

I returned and she gave the message. I called him and got his lab. They gave me his cell and I called him; he suggested I came in to “set your mind straight.” Perhaps he was agitated. What proceeded was pure joy.

The grant I'm applying for is ONLY for unorthodox, untried, “off-the-beaten-path” ideas. If you are doing incremental research no mainstream thought, forget about it. And I love Gates's mind of the mind of his foundation's administrative people. They are attempted to fund creativity because they know where the most creativity is, there you will find breakthroughs. And I love creativity. It's what I do and know. That's why research CAN be amazing.

So when someone won't give you information without you first telling what you want it for, it can be hard. I wasn't sure I should tell him because some people think what I'm trying is silly. But he asked me why do I want to take micrographs; he kept saying “so what” or “why”. He said it 3 times. After the third time I finally explained in a nice way at which point he began to ponder this romantically. I mean he actually engaged in brainstorming conversation about how to do what I wanted to do which he thought was impossible but nice. So it started at agitation and proceeding into the most wonderful fun conversation where he gave me information on protein databases and authors to read though it's impossible. THIS is what I had been trying to do all along-just have a conversation (that eventually leads to some work) with someone who can help me. And here I was with a structural biologist talking about structural biology, molecular biochemistry and nano-biophysics. It was nice. Unfortunately the fire alarm rang and made us end it early (it would probably have ended soon anyway). Give me MORE of these moments (that hopefully lead to breakthroughs that help people)!!!